Celebrations continue…Sensex closes at a new high

iifl30th October, 2013 : Comments by Amar Ambani, Head of Research, India Infoline 


The festive season seems to be getting better and better as the BSE Sensex managed to re-conquer the 21000 mark yet again and end at an all time closing high on Wednesday. The momentum continued for the second straight day post RBI’s decision of cutting the Marginal Standing Facility (MSF) rate bringing cheer on Dalal Street.


The RBI had jacked up the MSF by 200 bps in July as the rupee sharply weakened against the US Dollar. It rolled back 75 bps of that in its September 20 review and another 50 bps earlier this month.


Sentiment got another boost as market participants also cheered reports that Federal Reserve would not rock its boat at its policy meeting and leave stimulus in place for the next few months.


For a change today’s rally was led by the defensives like the healthcare and the FMCG stocks. Even the telecom, power and realty stocks were among the major contributors. The mid-cap and the small-cap stocks participated in the rally today.


Only the Auto and the select PS stocks were under pressure.


Finally, BSE Sensex closed at 21033 up 105 points, while NSE Nifty closed at 6,252 up 31 points over the previous close.


Bharti Airtel, Dr Reddy’s Labs, BPCL, Ranbaxy, Hindalco, IndusInd Bank, ICICI Bank, ICICI Bank and Bajaj Auto were among the top gainers in the Nifty. On the other hand, Axis Bank, Wipro, Bank of Baroda, Ambuja Cement, SBI, HDFC Bank, SSLT, DLF and JP Associates.


The advance-decline ratio favoured the bulls. On the BSE, 1272 stocks advanced against 1160 declining stocks, while 177 remained unchanged.


The INDIA VIX was down 1.2% at 19.53. It hit a day’s high of 20.06 and low of 18.84.


Amar Ambani Head of Research at IIFL said “JSW Steel managed to report a strong growth in topline led by some inventory liquidation during the quarter. Sales volume increased 22.7% qoq against a production growth of 4.2% qoq. Operating profit too was higher than our estimate on the back of higher volumes. JSW reported a PAT of Rs1bn due to a forex loss of Rs8.4bn. Debt for the company has increased sharply over the last six months due to an increase in its receivables. We believe JSW would be an underperformer in the near term due to high debt and the tight iron ore market in Karnataka. We believe the recent rally in the stock should be used to exit.”


Shares of Bharti Airtel surged over 4.5% after posting better than estimates after consolidated net profit fell 29% to Rs5.12bn on 9.9% increase in total revenues to Rs13.24bn in Q2 September 2013 over Q2 September 2012.

Lupin second quarter consolidated net profit increased 39.8% on yearly basis to Rs4.06bn. Consolidated revenue of the company grew 16% yoy to Rs26.68bn in quarter ended September 2013. It reported other income of Rs81 crore for the quarter as against Rs4 crore in a year ago period while tax expenses surged 79.5% yoy to Rs2.58bn.

Havell’s beat market expectations as second quarter standalone profit after tax rising a whopping 44.5% yoy to Rs1.26bn. Total income of the company climbed 21.75% on yearly basis to Rs11.74bn in three-month period ended September 2013.

Bata India reported a growth of 17.30% in net profit for the quarter ended Sept. 30, 2013 to Rs375.8mn as compared to Rs320mn in the same period last year. Total income went up by 14.33% to Rs4.84bn for the quarter ended Sept. 30, 2013 from Rs4.24bn in the year ago period.

Shares of Ranbaxy Laboratories on Wednesday ended higher reversing intra-day losses. The company posted a consolidated net loss of Rs4.54bn for the quarter ended September 30, 2013.

Oriental Bank of Commerce second quarter net profit fell 17% yoy to Rs2.51bn. Net interest income increased 10.7% on yearly basis to Rs12.81bn in three-month period ended September 2013. Provisions and contingencies climbed 3.3% sequentially (up 19.7% yoy) to Rs5.50bn in the quarter gone by.

Globally, Asian share markets took heart from record highs in U.S. stocks.

Japan’s Nikkei gained 1.2%, while Australian shares added 0.3% and Shanghai stocks 1%. MSCI’s index of Asia-Pacific shares outside Japan crept up 0.5%.

European shares edged higher with CAC, DAX and FTSE starting off with gains of at least 0.5%.