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Tuesday 3 February 2015

Sensex, Nifty weak; Sesa surges 6%, RIL & ONGC support

03:30pm Market close

The market has ended lower dragged by rate sensitives. The Sensex was down 122.13 points or 0.4 percent at 29000.14. The Nifty slipped 40.85 points at 8756.55. About 1313 shares have advanced, 1553 shares declined, and 257 shares are unchanged.

Axis Bank was down 5 percent while Tata Power, Bajaj Auto, M&M and SBI are among laggards.

03:20 pm Gold update

Gold prices today fell by Rs 180 to Rs 28,270 per ten gram at the bullion market, snapping its two-day rising streak, as demand from jewellers and retailers eased at prevailing levels amid a weak global trend. Silver, however, recovered by Rs 450 to Rs 38,450 per kg on increased offtake by industrial units and coin makers. Traders said besides fall in demand at existing levels from jewellers and retailers at domestic markets, a weak global trend as investors weighed prospects for higher US interest rates mainly kept pressure on gold prices.

Gold in New York, which normally sets price trend on the domestic front, fell 0.72 per cent to USD 1,273.80 an ounce in yesterday's trade. In the national capital, gold of 99.9 and 99.5 per cent purity plunged by Rs 180 each to Rs 28,270 and Rs 28,070 per ten gram respectively. The precious metal had gained Rs 350 in the previous two trading sessions.

03:05 Result

Two-wheeler maker TVS Motor missed street expectations on bottomline and opearational front but topline was in line during October-December quarter. Net profit jumped 31.1 percent year-on-year to Rs 90.2 crore in Q3FY15 as against expected growth of 38 percent.

Revenue climbed 29 percent to Rs 2,653 crore in the quarter ended December 2014 compared to Rs 2,057.6 crore in same quarter last fiscal, supported by strong volume growth.

Operating profit surged 29.8 percent on yearly basis to Rs 160 crore and margin remained flat 6 percent in the quarter gone by. Analysts had estimated operating profit at Rs 174 crore and margin at 6.5 percent for the quarter.

02:50pm Bullish on Tata Motors

CLSA has a buy rating on Tata Motors citing that it has potential for multiples to improve given that the auto major is entering a strong volume and earnings growth phase. The brokerage has a target price of Rs 740 per share and sees a 60 percent upside at Rs 950 in a two-year’s time once Jaguar Land Rover (JLR) new products have been launched.

CLSA also expects Tata’s earnings growth to accelerate to 29 percent CAGR over FY15-17 and upgrades FY16-17 EPS by 8-22 percent. It is optimistic that JLR’s

margins may sustain at 18-19 percent levels over FY16-17 despite a weaker product and regional mix.

“This, together with multiple new product launches and start of China plant should drive strong profit growth in JLR over the next two years. India business losses should also shrink sharply with commercial vehicle cycle recovery and new passenger vehicle products,” it says in a note.

02:30pm State Bank of Travancore in News

Capital markets regulator Sebi has sought clarification from the merchant banker of State Bank of Travancore on the firm's proposed Rs 485-crore rights issue. Without disclosing the details, Sebi said "clarifications (are) awaited from lead manager" for the proposed rights issue. In rights issue, shares are issued to existing investors based on their holdings at a pre-determined price and ratio.

According to the latest weekly update to the processing status of draft offer documents filed with Sebi, the regulator said clarifications are awaited on the proposed rights issue of State Bank of Travancore as on January 30 this year. The status is updated on a weekly basis by the regulator and the next update of the status, as on February 6, would be uploaded on Sebi's website the next working day.

Sebi said it might issue observations on State Bank of Travancore document within 30 days from the date of receipt of satisfactory reply from the lead merchant bankers to the clarification or additional information sought from them.

The regulator had received the draft offer documents on January 5 this year through its lead manager BOB Capital Markets. The bank proposed to issue equity shares for an aggregate amount up to Rs 485 crore on rights basis to its shareholders, as per a draft letter filed by the lending body with Securities and Exchange Board of India (Sebi). State Bank of Travancore is a subsidiary of the country's largest lender State Bank of India (SBI), reports PTI.

02:00pm Market Check

The market saw sharp recovery in late trade post morning slump. The Sensex got back above the 29000 level led by oil & gas, FMCG and telecom stocks. However, weak earnings from Punjab National Bank and an absence of rate cut from the RBI dampened overall market sentiment today.

The 30-share BSE Sensex declined 60.16 points to 29062.11 and the 50-share NSE Nifty fell 17.50 points to 8779.90. About 1298 shares have advanced, 1464 shares declined, and 246 shares are unchanged.

Gautam Trivedi of Religare Capital Markets says he expects a rate cut post the Budget. The street is very cautious on banks as Q4 could be worse than Q3. Expectations are high from the Union Budget, he adds.

PNB topped the selling list on Nifty, down more than 7 percent after reporting very weak Q3 earnings. Asset quality worsened with gross NPAs close to 6 percent against 5.65 percent last quarter. Management expects pain on asset quality to continue for another two quarters.

The Reserve Bank of India kept key rates unchanged today but cut SLR by 50 basis points to 21.5 percent. Governor Raghuram Rajan says more data is awaited for further action on the rates front. More information please visit this site www.bigprofitbuzz.com

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