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Tuesday, 24 February 2015

Sensex, Nifty end flat; HUL & BHEL up 2-3%, ONGC falls

03:30 pm Market close: The market has ended on flat note. The Sensex was up 29.55 points at 29004.66 and the Nifty ended up 7.15 points at 8762.10. About 1165 shares have advanced, 1717 shares declined and 201 shares are unchanged.

HUL, L&T, BHEL, ITC and Cipla were top gainers in the Sensex. Among the top losers were Sesa Sterlite, ONGC, Tata Steel, Bharti Airtel and Tata Motors.

03:20pm Budget Expectations: ICICIdirect says revving up growth via capacity creation will take precedence over demand led growth as reversing the decline in the capex cycle will be the key prerogative of the NDA government. Hence, according to the report, Budget 2015-16 will clearly attempt to contain expenditure and divert resources optimally to kick start the investment cycle, going ahead. 

"The Budget should clearly lay down a roadmap on critical issues like GST and reviving the capex cycle by optimum utilisation of surplus PSU cash. Further, clarity on international taxation issues like GAAR, newer initiatives like ‘Make in India’ and ‘Smart Cities’ along with mentioning avenues for raising long-term funds for creating infrastructure and measures to attract/increase financial saving in the economy would be the key things to watch out for in this Budget. This intent/roadmap will provide more clarity on the prerogative of the government and requisite direction to the markets, which, in turn, will raise the confidence of the private sector," the report says. 

03:10pm Market Update: The Sensex rose 43.55 points to 29018.66 and the Nifty advanced 12.25 points to 8767.20 led by capital goods, IT and FMCG stocks.

The market breadth remained weak as about 1137 shares have advanced and 1724 shares declined on the BSE.

02:55pm FII View: The stock market has been resilient to weak corporate earnings for the December quarter, and the trend could continue for a while, feels brokerage house JP Morgan.

"The street cut earnings estimates for FY15E and FY16E by 3-4 percent. Despite these cuts, we think current estimates for earnings growth for the next two years at 10 percent and 18 percent look vulnerable to further downgrades," says the JP Morgan note to clients, adding that an earnings recovery could take 4-6 quarters to gain momentum.

Yet, the brokerage feels the market is not vulnerable to earnings cuts and that the divergence between market performance and corporate earnings could continue in the near term.

"We have seen this narrative twice over the last decade – continuing for four quarters each over 2007-08 and over 2012-13. During these phases also the changes in earnings expectations and the market performance were inversely correlated," the JP Morgan note says.

According to JP Morgan, the key driver of market performance in the current cycle has been surplus global liquidity and relative appeal within emerging markets.

"We would expect markets to remain well supported until these drivers remain in place, with investors extending the timeframe for their investments to pay off," the note says.

02:25pm Interview: Naresh Bhansali, CEO-Fin, strategy & business development & CFO, Emami is confident of surpassing their earlier growth guidance of 15-17 percent.

With the ramp-up in production of the recently launched products in the next fiscal, there would be marked improvement in the finances of the company, he said.

According to Bhansali, the company is actively looking for global and domestic acquisitions.

The company is all set to strengthen its Zandu Healthcare base and expand its brand portfolio in FY16. It would be looking at new launches to help increase consumer spending.

02:00pm Market Check

The market gained strength amid consolidation in afternoon trade as FMCG, capital goods, technology and banks stocks extended gains. The 30-share BSE Sensex rose 139.17 points to 29114.28 and the 50-share NSE Nifty advanced 38.90 points to 8793.85.

However, the broader markets remained marginally under pressure. Declining shares outnumbered advancing ones by a ratio of 1594 to 1087 on the BSE.

The government tabled the 14th finance commission report. It recommended that the centre should transfer 42 percent of the divisible pool to the states, including taxes and grants against 32 percent earlier.

Prabodh Agarwal of IIFL says investor mood is very positive at the moment. He advises not to be distracted by the Budget and keep buying this market. Government should look at higher spending in infrastructure which should be funded by increasing tax rates this Budget, he adds.

Shares of ITC, L&T, HUL, Cipla, BHEL, NTPC and GAIL gained 1-2 percent while ONGC, Tata Motors, Reliance Industries, Sesa Sterlite, Bharti Airtel, Tata Steel and Hindalco declined 1-3 percent.

On the global front, Japan closed with gains of more than 0.7 percent while Europe traded flat. All eyes are on Greece as the Eurogroup is expected to mull Greece's revised list of reform proposals. Investors were also cautious ahead of US Fed chairperson Janet Yellen's testimoney before Congress over next 2 days. More information please visit this site www.bigprofitbuzz.com

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