Monday, January 19, 2015

Nifty ends at 8551; HUL tanks 5%, Wipro gains 5%

03:30 pm Market closing

The market managed to hold on to its gains till the end, supported by capital goods and pharma stocks. The Sensex ended up 140.12 points at 28262.01 and the Nifty was up 36.90 points at 8550.70.  About 1670 shares advanced, 1304 shares declined and 296 shares were unchanged.

Wipro was up 5 percent, followed by GAIL, BHEL, Axis Bank and Bharti Airtel. HUL lost 5 percent after it showed dismal volume growth in Q3. Hero, TCS , HDFC and SBI were other laggards in the Sensex.

03:10 pm Buzzing

Shares of M&M Financial slipped 8 percent intraday on Monday after it posted dismal December quarter earnings last week. Higher-than-expected non-performing loan provisions dragged its December quarter net profit 17 percent year-on-year to Rs 136 crore.

Not at all impressed by the earnings, Deutsche Bank says there is intense focus on NPL recoveries and M&M Fin is not chasing growth, hence have cut FY15E/FY16E net profit estimates by over 13 percent and target price by 7 percent  to Rs 270 per share.

ICICI Securities has also downgraded the stock to reduce from hold as asset quality remains a concern. It has also slashed target price to Rs 245 per share.

02:59pm HUL Q3 profit jumps 18% to Rs 1252 cr

Hindustan Unilever's (HUL) third quarter net profit jumped 17.9 percent year-on-year to Rs 1,252 crore, mainly led by income from land sale.

The bottomline came in higher than expectations of Rs 1,091 crore while the topline missed forecast, which was estimated at Rs 7,963 crore, according to the average of estimates of analysts polled.

The FMCG major also disappointed on volume growth front, which stood at 3 percent, much lower compared to forecast of 5-6 percent and 4 percent in Q3FY14.

02:45pm FII View

Global cues seem to be the key trigger for the markets this week with a lot of events lined up. Geoff Lewis, JPMorgan AMC speaks about the significance of these events on world markets. The first event is GDP number from China, and Lewis believes it will be in the expected range of 7-7.5 percent.

The next event is ECB meet where analysts expects Mario Draghi to announce a QE package that will stem the fall of eurozone prices. Lewis however feels that Draghi won't announce an aggressive QE scheme. Most analysts fear that if the size of QE is not sizeable, then eurozone may enter a deflationary spiral from which it would be tough to wriggle out.

He sees huge inflow of foreign money into Indian equities in the coming days, despite headwinds like appreciating dollar and the trickle down impact of weak commodity prices. Lewis says India will not face the wrath of global liuidity crunch primarily due to the domestic economics (that is on the mend) and a take off in US economy.

02:30pm Info Edge in News

Info Edge's third quarter net profit jumped 16.3 percent sequentially to Rs 38.6 crore supported mainly by other income. However, lower revenue and operational performance restricted profit growth.

Net sales fell 1.2 percent to Rs 145.7 crore in the third quarter of current financial year 2014-15 from Rs 147.5 crore in previous quarter.

Operating profit declined 14.3 percent quarter-on-quarter to Rs 36 crore and margin slipped 370 basis points to 24.9 percent in the quarter gone by.

Other income of the company rose 132 percent sequentially to Rs 25.5 crore in October-December quarter.

02:00pm Market Check

The market gained strength in afternoon trade as the Nifty scaled past 8550 supported by banks, capital goods, oil & gas, healthcare and select auto stocks.

The Sensex rose 203.25 points to 28325.14 and the Nifty jumped 53.40 points to 8567.20. The BSE Midcap Index gained 0.6 percent and Smallcap up 1 percent. About 1687 shares have advanced, 1152 shares declined, and 282 shares are unchanged on the Bombay Stock Exchange.

Vetri Subramaniam of Religare Invesco that the current valuations are not cheap post the big rally. He expects corporate earnings growth for the December quarter to be in single digits. He is unlikely to see capex revival in a hurry.

It’s a mixed bag for global markets today, China suffered a big setback, down 8 percent after the regulator cracked down on margins, punishing a dozen brokerage firms for violating margin trading rules. However, European markets rose ahead of ECB policy on Thursday. There are expectations of an announcement of a 500 billion euro bond buying program.

Wipro surged 6 percent as the company reported stronger than expected results with a constant currency growth of 3.7 percent - the highest in the last 12 quarters. GAIL India gained 4.

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