Thursday, 8 December 2016

Opening Bell - Sensex gains 196 points, Nifty opens in green

The S&P BSE Sensex is trading at 26,433 up 196 points, while NSE Nifty is trading at 8,152 up 50 points.

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The S&P BSE Sensex is trading at 26,433 up 196 points, while NSE Nifty is trading at 8,152 up 50 points.

Asian markets opened sharply higher after the US markets overnight climbed 300 points with Europe also closing with large gains. This even as US$ saw profit booking, bond yields fell & oil traded lower after the sharp OPEC cut rally. The US markets are leading from the front with expectation of huge capex expansion & spending which is setting a bullish fervor globally.

Commodity market tips

Most Asian indices were trading higher today, in-line with the gains in US markets, amid speculation that the European Central Bank will extend its asset purchase program at its policy meet, later today.
 
Industry is hoping that the ECB monthly asset purchases will continue and will be prolonged beyond this fiscal. Another factor which has been expected and accounted by the markets is the rate hike by the US. Japan opened at 18646, Hong Kong's Hang Seng opened at 22997, Taiwan's Straits Times started at 2967, and China's Shanghai Composite started at 3222. All Asian indices were trading in green at 8:30 am

On the other hand, US markets closed on higher side. The rally was led by dividend-yielding transportation, real estate and telecom shares. While, on the losing end were the biotechnology and pharma stocks. Here also, the traders are looking forward to the announcements by ECB Monetary Policy makers. Nasdaq Composite closed at 5393, Dow Industrial Avereage ended at 19549, while S&P 500 closed at 2241, wherein all the mentioned indices gained more than 1% at the end of the day.

The monetary policy committee (MPC) maintained status quo on interest rates advocating caution in light of heightened uncertainty emanating both from potential US Fed rate hike and the demonetisation move in India. The central bank has maintained its accommodative stance and will gauge the repercussions of the various transitory developments and then accordingly take a call on the rate trajectory. Improving macroeconomic profile and contained inflation paves the path for further moderation in the interest rates. RBI withdrew the 100 pc CRR requirement with effect from the fortnight beginning December 10 and this could give some boost to the banks. The outlook is a positive start. The US markets soared to new highs and Asian markets have joined the party. Attention would be on the European Central Bank today, which may announce an extension to its quantitative easing programme.

RBI Monetary Policy Review:

After the recent surge in bank deposits on account of demonetisation move and moderation in food inflation, it was widely expected that RBI may deliver yet another cut. Conversely, the monetary policy committee (MPC) unanimously decided to stand pat on interest rates given that a rate cut was front loaded in October. The central bank advocated caution in light of heightened uncertainty emanating both from potential US Fed rate hike and currency replacement in India.

On rate outlook, RBI will further delve into the flow of macroeconomic indicators and events before making any move on the policy rates. Although the central bank has persisted with its accommodative stance, it will remain circumspect in regard with risks emanating from a prospective hawkish US Fed policy, intensifying volatility in global financial markets and ensuing weaker Indian rupee. The monetary policy committee will gauge the repercussions of the various transitory developments and then accordingly take a call on the rate trajectory. Nevertheless, amid the warranted prudence of RBI, we still sense a possibility of a 25bps rate cut before the end of this fiscal year. Improving macroeconomic profile and contained inflation paves the path for further moderation in the interest rates.

Stocks in focus:

Suven Life Sciences has been granted a patent in India for a drug used for the treatment of neuro-degenerative diseases.

PVR has partnered with South Korea’s CJ 4DPLEX to add another 10 4DX screens to its network in major cities like Bengaluru and Mumbai.

The capacity of Coromandel International Ltd's fertiliser unit is being expanded from 700tpd to a 1,000tpd and the public hearing for the purpose is being held on the factory premises at Sriharipuram.

State Bank of Travancore (SBT) said it will raise up to Rs 6 bn through issuance of Basel-III-compliant additional tier-I bonds on private placement basis.

Sun Pharmaceutical said the US health regulator has informed the company of more concerns found at its Halol manufacturing plant after a recent inspection.

Ashoka Buildcon, through its power division, has won rural electrification projects worth Rs9.50bn in Bihar.

NTPC has struck coal at its first coal mine.

Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corp signed a pact to build India's biggest oil refinery at a cost of USD30bn on the west coast.

The government has initiated a probe into Reliance Industries and Oil and Natural Gas Corp having knowledge as early as in 2003 of state-owned firm's natural gas flowing into adjoining fields of RIL in KG Basin.

CERC has passed an order and granted relief measures to Tata Power in compensatory tariff case for force majeure event.

Adani Transmission Limited (ATL) executed the share purchase agreement (SPA) with Reliance Infrastructure Limited (R-Infra) for 100% acquisition of the latter's Western Region System Strengthening Scheme's (WRSSS) transmission assets.

The US Food and Drug Administration (USFDA) has issued form 483 with five observations against Divi's Laboratories' unit at Chippada Village in Visakhapatnam of Andhra Pradesh following an inspection, which concluded on December 6.

Laurus Labs Ltd. IPO subscribed 0.61 times on Day 2; QIB Portion Fully Subscribed.

Hindustan Zinc enters solar energy biz, to invest Rs 630 crore.

BPCL, IOC sign consortium agreement to set up West Coast Refinery and Petrochemical project.







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