8:40 am - Sunday November 8, 2015

Nifty hits record high; HDFC & Axis Bank up 3-4%, GAIL dips

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The Nifty touched record high at 8628 today, up 68.55 points or 0.80 percent at 8619.25 while the Sensex rose 249.88 points or 0.88 percent to 28511.89. About 1557 shares have advanced, 1142 shares declined, and 300 shares are unchanged on the Bombay Stock Exchange. Indiabulls Housing shares in demand Shares of Indiabulls Housing Finance touched a record high at Rs 599.60 per share, up 5 percent. CLSA has maintained a buy rating on the stock with a target price of Rs 630 per share. It has also raised earnings forecasts by 1 percent and sees 22 percent CAGR profit growth over FY14-17.

The brokerage feels that Indiabulls will not only benefit from the fall in cost of funds in the near-term but also from potential upgrades to credit ratings over the medium-term. “Over the longer-term as well, we expect Indiabulls’ funding costs to trend down with potential upgrades to its credit ratings (from AA+ to AAA) that will help to expand market share and deliver profitable growth,” it says in a report. CLSA, however, feels that the lending company may show growth volatility in Q4FY15 due to change in accounting policy on investment-income, large write-offs and low tax rate.

Market Expert The next year-2016- will be watershed year in terms of economy and markets, believes Nandan Chakraborty, managing director- institutional equity research, Axis Capital. In an interview to CNBC-TV18, Chakraborty says 2014 was a sweet spot in terms of a new stable regime, falling crude prices, etc but 2015 is unlikely to see any growth in terms of capex or jobs. However, the stability and the real effect of the new government’s policies will be in full swing in 2016 and it will benefit from the positive sentiment surrounding the government’s economic measures. What is also likely to aid the economy is significant flows from US, Europe and Japan, he further adds. “So long as the US and Europe continue to grow, they will keep pumping money. Similarly, I expect the Bank of Japan to continue spewing liquidity, so capital is not going to be a problem at all,” he adds.

Market Check The market inched towards all-time highs. The Sensex surged 224.02 points to 28486.03 and the Nifty jumped 66.80 points to 8617.50. About 1574 shares have advanced, 1090 shares declined, and 302 shares are unchanged on the Bombay Stock Exchange. Asian markets gained today, buoyed by China’s Q4 GDP that beat expectations to come in at 7.3 percent against estimate of 7.2 percent.

Oil prices, however, remained subdued with the brent trading below USD 50 a barrel. The International Monetary Fund cut global growth forecast for 2015 to 3.5 percent from 3.8 percent and also cut its India and China growth forecast marginally. IMF says boost from lower crude oil prices would be offset by dimmer economic prospects for China, Russia, eurozone, Japan and oil producers. Metal stocks such as Tata Steel and JSW Steel gained today after CNBC-TV18 learnt from government sources that the steel ministry has written to the finance ministry seeking revision of import duty on steel products. The steel ministry is asking for raising import duties to safeguard the domestic industry from dumping.

HUL saw additional pressure, down 1 percent after the 5 percent cut seen yesterday. Bank of America Merrill Lynch reiterated its neutral stance, saying Q3 results were below estimates led by revenue miss. CLSA maintains sell on the stock with a target of Rs 650 per share. In key earnings today, Kotak Mahindra Bank came off day’s high to trade flat after it’s third quarter earnings matched street estimates. Profitability jumped 21 percent in Q3 and the net interest income rose 13 percent to Rs 1,580 crore on consolidated basis Y-o-Y. HDFC, Sesa Sterlite and Axis Bank gained 3-4 percent while GAIL fell 2 percent.

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