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Wednesday, 25 March 2015

Nifty struggles below 8500; rupee falls too, GSPL soars 5%

11:20am FII View: There are too many factors in the short-term to predict the near-term trajectory, is the word coming in from Anup Maheshwari, executive vice-president and head of equities at DSP Blackrock Investment Managers.

The first quarter is usually a little soft for the midcaps, but they come back in the subsequent quarters, he says. But earnings overall have been disappointing in the last few quarters, he adds. However, he believes that earnings will normalize soon and it is a buy on dips market.

In telecom, he says the sector is yet to see pricing power. He is waiting for revenue per minute (RPM) to increase in telecom to justify capex in auctions.

Maheshwari also expects the government to start spending aggressively from next month.

11:00am Market Check

The market plunged on expiry day, infact extended losses into the seventh consecutive session. The rupee and bond markets too declined, reacting to the spike in brent crude prices.

The Sensex dropped 236.66 points to 27875.17 and the Nifty slipped 58.30 points to 8472.50. About 802 shares have advanced, 1335 shares declined, and 152 shares are unchanged on the BSE.

Telecom stocks such as Bharti Airtel remained in focus, up 1.5 percent. Spectrum auctions concluded yesterday after 19 days and 115 rounds of bidding. Kotak says while aggregate results are marginally negative versus their pre-auction expectations, it does not see preliminary results as an irreparable damage outcome. Kotak is positive on Bharti and Idea Cellular.

Companies with gas based power plants such as Torrent Power, GMR Infra and Lanco Infratech were in focus. The government approved a mechanism for providing imported LNG to stranded gas based power plants at a concessional rate.

Citi says Gujarat State Petronet is likely to be the biggest beneficiary. GSPL's earnings could increase by 28-30 percent against a 7 percent increase for GAIL's earnings. The brokerage says there is a potential 10-18 mmscmd of additional LNG import. Analysts see the policy move as an incremental positive for lenders to gas based power plants such as IDFC, SBI and IDBI amongst others.

United Bank spiked 4.5 percent as the RBI has relaxed restrictions on credit disbursements of the bank.
Meanwhile, the Indian rupee dropped 38 paise to 62.70 a dollar. Global markets continued to be in focus on account of the geopolitical tensions emerging in Yemen. Brent crude prices spiked up to USD 58 a barrel. More information please visit this site

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