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Wednesday, 26 November 2014

Sensex, Nifty climb into green; Oberoi leads realtors

1:30 pm: Indices have made a good comeback in the last half an hour with the Sensex now up 79 points at 28417 and the Nifty up 22 points at 8484. Market breadth too has improved with gainers outpacing losers nearly 2:1 on the NSE.

Second line shares continue to fare better than their large cap counterparts with Gujarat Gas(+ 15 percent) and Oberoi Realty (+8%) being among the key gainers.

Brokers say every rise in indices is likely to be met with profit taking as the market does not have enough triggers to sustain the uptrend.

Kotak Securities has rated Oberoi Realty as one of its top picks in the real estate space.

"Even though debt has increased, Oberoi’s balance sheet still remains strong with additional leveraging capacity to eventually raise monies for business development," the brokerage said in a note to clients.

In sectoral trends, realty, metal and FMCG shares are among the best performers, while IT shares have been under pressure right through the day.

Sanjeev Prasad of Kotak Institutional Equities feels the FMCG and pharma spaces may appear expensive, but a de-rating was unlikely as these stocks would be a good hedge in the event of the much anticipated economic reforms not coming through. He is bullish on stocks like Marico, Dabur and Britannia.

"Valuations have become pretty expensive across the board if you look at any consumer staple company or pharmaceutical company but I am willing to make a call that you may not see that kind of de-rating even if you see a big slowdown in terms of economic reforms momentum, etc. Valuations probably will hold up more in anticipation of the kind of medium-term growth as far as some of these sectors are concerned," he said in an interview to CNBC-TV18 this morning. 

1:00 pm: The consolidation in Indian equities continued in afternoon trade Wednesday, with outperformance in metals and oil & gas offset by weakness IT and pharma. The broader market, however, bucked the trend.

At the time of this writing, the Sensex and the Nifty were down 33 points and 11 points (0.13 percent each) to 28,306 and 8,451. The BSE midcap index rose 0.56 percent while the smallcap index was up as much as 0.9 percent.

GAIL, Cipla and ITC were the biggest gainers in the Sensex rising 1.5 percent to 3 percent while Bharti Airtel and Bajaj Auto were down 1.7 percent each.

The latter two were down after Nigeria, a key African market for both, devalued its currency by 8 percent today.

Power and gas shares rose after a CNBC-TV18 report said the government would today chalk out plans for gas pooling, a move in which power plants that have gas suppliers far away could enter into swap arrangement with a nearby supplier, saving transportation costs and potentially helping idle power plants with 28,000 megawatts capacity that are currently starving for fuel.

JSW Energy surged 6.6 percent, Petronet LNG climbed 4.1 percent while Torrent Power was up 8.1 percent.

Jet Airways was up 2 percent after industry official met the civil aviation minister yesterday to discuss several issues related to the industry such as the 5/20 rule, high airport charges, etc.

State-run HMT jumped 6.1 percent amid reports the government was planning a rescue package for the loss-making company.

Financial Technologies appreciated 5.9 percent after it agreed to sell stake in MCX-SX to Rakesh Jhunjhunwala among other investors.

While ITC clmbed 1.8 percent, a day after falling 5 percent, after brokerages expressed the view that the announcement yesterday -- that the government may decide to ban sale of loose cigarettes – was unlikely to come through.

A number of shares, including Asian Paints, Castrol, Container Corp and Gujarat State Petronet, have hit 52-week highs in trade today.

While Elder Pharma, Era Infra, Gujarat NRE Coke and Omaxe hit 52-week lows. More information please visit this site

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