Weekly wrap: Large caps slip; investors bargain hunt in mid, small caps

Frontline shares drifted lower in a truncated trading week, but there were plenty of takers for small and midcap stocks. The market will remain closed for trading on Thursday (Gandhi Jayanti), Friday (Dussehra) and Monday (Bakri-id). The RBI kept benchmark rates unchanged at its monetary policy review on Tuesday, and at the same signaled that the next rate cut was unlikely before end 2015, if at all.

The BSE Sensex ended the week at 26,568, down 0.2 percent over last Friday, and the Nifty closed at 7946, down 0.3 percent.

In comparison, the BSE Midcap Index gained 0.6 percent and the Small Cap Index rose 1.2 percent.

 IT, pharma, and media were among the best performing sectors, while shares of realty, metal, power, PSU banks and capital goods companies took a beating. Also read: Modi premium over, market's focus back on quality stocks: Ridham Desai

A section of the market is getting cautious as current valuations seem to price in most positives, even though things have not really got moving on the ground. The somber mood in global markets ahead of a likely rate hike in the US also weighed on sentiment. Already, the rupee is under pressure because of the strengthening of the dollar, and some players fear this could prompt profit booking by short term FIIs as a weak rupee could erode their profit margins.

Prime Minister Narendra Modi’s visit to the US and the investment commitments from top US CEOs failed to move the market, which is now waiting for some strong policy action by the government to get the economy going.

The RBI has made it clear that it will not cut rates unless it is confident of hitting the January 2016 consumer inflation target of 6 percent. The central bank said it was confident of achieving the 8 percent inflation target for January 2015, but that would not be a good enough reason to reduce rates.

 Also read: Citi sees Sensex at 31K by Dec'15; expects gradual rerating

Brokers expect some action in IT stocks in the run up to the second quarter earnings announcement.

“For the top-five Indian IT firms, we expect sequential growth trends to accelerate in constant currency,” brokerage house Credit Suisse said in a note to clients.

Goldman Sachs too has sounded a bullish note on IT stocks despite the recent outperformance.

“Relative to its own history, sector valuations are not stretched and implies USD revenue growth of 14 percent versus our forecast of 15 percent CAGR in FY14-FY16 (estimated),” said the Goldman note, adding that market expectations from large caps like Infosys and Wipro were subdued despite Q2FY15 being a seasonally strong quarter for the industry.

Wipro, Infosys and Sun Pharma were among the best performers in the Nifty, gaining 5-7 percent.

 DLF, Tata Power, JSPL and Tata Steel figured among the worst performers, shedding 4-7 percent.

 Among midcaps, HOV Services (+ 53 percent), Gammon Infra (+ 18 percent), Mangalore Chemicals & Religare Enterprises (+16 percent each), Tata Sponge (+14 percent), Berger Paints (+ 12 percent), Strides Arcolab (+ 11 percent) and Bata (+10 percent) were the big gainers.

In the big corporate development of the week, Strides Arcolab acquired Shasun Pharmaceuticals in an all stock deal in the ratio of 5 Strides shares for every 16 Shasun shares. More information Please visit this site www.bigprofitbuzz.com

Nifty ends below 7950; IT surges, Hero up, Maruti falls 3%

03:30 Market closing

 The market ended a dull day of trade on a flat note. The Nifty ended tad below 7950 down 19.25 points at 7945.55 while the Sensex slipped 62.52 points at 26567.99. Oil & gas and FMCG stocks were beaten down while IT stocks gained on dollar strength. 

Wipro, Infosys, M&M, TCS and Hero were top gainers. On the losing side were Maruti, Tata Steel, GAIL, Tata Power and Reliance. 

03:00pm Market Check

The Sensex declined 52.90 points to 26577.61 and the Nifty fell 15.35 points to 7949.45. About 1220 shares have advanced, 1604 shares declined, and 107 shares are unchanged. 

02:45pm Minda Industries in focus

 Minda signed a joint venture agreement with Panasonic Corporation, Japan to manufacture and supply of lead acid storage batteries for two wheelers, four wheelers and for other industrial batteries. The proposed plant of the joint venture company will be located at Pant Nagar, Uttrakhand.

 The shareholding of Panasonic Corporation and Minda Industries in the said joint venture is in the ratio of 60:40, said the company. 

The cost of the project will be around Rs 160 crore. The commercial production of the 4W batteries is planned for June, 2015. It is stated that the production capacity of this joint venture company is expected to be two million batteries by 2018. 

02:30pm IVRCL in News

 

IVRCL shares rallied 8 percent as a media report suggested that the company is going to sell Rs 4,000 crore worth of assets. 

While clarifying the assets sale, the company said as part of strategic business plan to monetize BOT assets, it proposed to divest its stake in certain road projects and water projects. The same has been mentioned in press release dated April 01, 2013 under copy to stock exchanges. Therefore, the news is already in public domain.

 Further, as per the CDR package, the company is required to monetize certain assets and the above point has been clarified to the shareholder in the AGM held on September 26, 2014 to his query, it added. 

02:00pm Market Check

 The market remained directionless with the Nifty holding 7950. Oil & gas, FMCG, banking and financials, and metals stocks declined while technology and auto stocks gained.

 The 30-share BSE Sensex slipped 12.27 points to 26618.24 and the Nifty dropped 3.30 points to 7961.50. About 1259 shares have advanced, 1485 shares declined, and 114 shares are unchanged.

 Individual stocks have been correcting of late but Nifty has not witnessed appropriate correction due to extended support by the defensives. Deven Choksey, Managing Director of KR Choksey Shares and Securities feels this could be a strategy to bring a much-needed headroom into some stocks.

 If Nifty remains in an adjustment band of 7900-8200, he is confident of investors buying into corrected stocks from a long-term perspective. 

Shares of ITC, Reliance Industries, ONGC, Maruti Suzuki, HUL, Tata Steel, Gail India and Tata Power were down 1-2.5 percent while Infosys, TCS, Wipro, Hero Motocorp and Coal India gained 1-3 percent.

In the midcap space, Relaxo Footwear, Berger Paints, Cyient, Bata India and Kaveri Seed shot up 5-9 percent while Trinity Trade, PTC India, Rajesh Exports, BF Utilities and Manappuram Finance lost 3-5 percent.

 Among smallcaps, Visagar Polytex, Oscar Investment, Balrampur Chini, Minda Industries and Can Fin Homes surged 7-10 percent whereas KGN Enterprises, Wim Plast, Swadeshi Industries, KDJ Holidayscap and JMT Auto slipped 5-8 percent. More information please visit this site www.bigprofitbuzz.com

Nifty hovers around 7950; gold near 9-month low

The market continues to be in sluggish mode ahead of the long weekend. The Nifty is hovering around 7950, down 12.20 points at 7952.60. The Sensex slips 35.05 points at 26595.46. About 1162 shares have advanced, 1430 shares declined, and 115 shares are unchanged. 

Wipro and Hero are up 2-3 percent. Other top gainers are Infosys, TCS and Coal India. Among the losers are Maruti, Tata Steel, GAIL, ONGC and ITC. 

Gold extended losses to trade near a nine-month low and looked likely to break below the key USD 1,200-an-ounce level, clobbered by a stronger dollar and lack of support from top buyer China. 

With the dollar at a four-year peak against a basket of major currencies, other precious metals also took a hit. Platinum tumbled to a five-year low, while silver retained sharp overnight losses to trade at its lowest since March 2010. 

A stronger US currency makes dollar-denominated precious metals more expensive for holders of other currencies. Worries about an interest rate rise in the United States have also hurt gold, a non-interest-bearing asset. More information please visit this site www.bigprofitbuzz.com

Sensex, Midcap volatile; ITC, Reliance, HDFC, ONGC slip

12:30pm Gold Update

Gold extended losses to trade near a nine-month low and looked likely to break below the key USD 1,200-an-ounce level, clobbered by a stronger dollar and lack of support from top buyer China.

With the dollar at a four-year peak against a basket of major currencies, other precious metals also took a hit. Platinum tumbled to a five-year low, while silver retained sharp overnight losses to trade at its lowest since March 2010.

A stronger US currency makes dollar-denominated precious metals more expensive for holders of other currencies. Worries about an interest rate rise in the United States have also hurt gold, a non-interest-bearing asset.

Spot gold slipped 0.2 percent to USD 1,205.90 an ounce by 0623 GMT, falling for the fourth straight session. It went as low as USD 1,204.40 in the previous session, its lowest since early January.

The metal slid 6 percent in September, its sharpest monthly drop since June 2013, and also logged its first quarterly loss of the year, reports Reuters.

12:00pm Market Check

 Equity benchmarks continued to consolidate due to lack of triggers. The next trigger for the market would be second quarter earnings (July-September) that will be kicked off with Infosys on October 10.

The 30-share BSE Sensex declined 46.98 points to 26583.53 and the Nifty slipped 17.25 points to 7947.55. The BSE Midcap and Smallcap indices were flat. The market breadth was weak; about 1134 shares have advanced while 1317 shares declined on teh Bombay Stock Exchange.

Tata Steel and Maruti Suzuki shed 2.5 percent each followed by ITC, Reliance Industries, HDFC, ONGC, Hindustan Unilever and Gail India with 1-1.8 percent loss. Top lenders like State Bank of India, HDFC Bank and ICICI Bank were down 0.7 percent, 0.77 percent and 0.2 percent, respectively.

However, Wipro and Hero Motocorp topped the buying list, up 2 percent each. Infosys and TCS gained 1.8 percent each. Shares of Tata Motors, NTPC, Axis Bank, Coal India, Mahindra & Mahindra and Dr Reddy's Labs rose 0.3-0.9 percent. More information please visit this site www.bigprofitbuzz.com