Moneycontrol
Oct 18, 2016 01:22 PM IST IST | Source: Moneycontrol.com

Sensex, Nifty, Midcap extend gain; Asia, crude oil remain higher

Equity benchmarks as well as broader markets extended rally in noon trade with the Nifty inching towards 8600 level, aided by index heavyweights HDFC, Reliance Industries, ICICI Bank, ITC and Infosys.


Moneycontrol Bureau

12:58 pm Market Update
: Benchmark indices rallied further with the Nifty reclaiming 8600 in afternoon trade.

The 30-share BSE Sensex was up 292.95 points or 1.06 percent at 27822.92, and the Nifty up 84.30 points or 0.99 percent at 8604.70.

About 1804 shares advanced against 796 declining shares on the BSE.

12:40 pm Europe opens:
European stocks opened higher as firming oil prices lifted global sentiment. The pan-European STOXX 600 was around 0.62 percent higher with all major bourses in positive territory.


However, data from the Institute of International Finance showing weak portfolio flows to emerging markets is adding to nerves around the strength of China and is just one factor putting a break on risk appetite.


Investor caution continues to mount as election day approaches in the US.

12:33 pm Buzzing:
Arvind shares hit record high of Rs 368.50, up 5.5 percent intraday after CLSA raised target price on the stock to Rs 418 from Rs 362, citing improving return on capital employed (RoCE) profile in textile business.


While retaining buy call on the stock, the brokerage house says Arvind's textiles business (contributed 62 percent to FY16 revenue) is structurally shifting in favour of the less capital-intensive garmenting division with a reduced focus on commodity denims. Meanwhile, expansions are being restricted only to critical units with a focus on outsourcing the rest.


This offers visibility of an improving RoCE even as cotton price volatility is a near-term headwind, it says, adding a more capital-efficient asset-light textiles business should continue to fund growth in the brands & retail (B&R) division.

12:20 pm Next rate cut?:
The Reserve Bank of India is expected to take advantage of expectations that inflation will remain low in the near-term and cut interest rates again early next year with an aim to boost already-solid growth a little bit more, a Reuters poll found.


New RBI Governor Urjit Patel and his six-member Monetary Policy Committee used the same rationale for their surprise 25 basis point (bps) cut to 6.25 percent earlier this month, the lowest since November 2010.


Inflation cooled to a 13-month low of 4.31 percent in September and the latest Reuters poll of economists expect it to average 4.8 percent in the January-March quarter of 2017, just under the RBI's near-term target.


"The significant run-up in CPI inflation between April and July was mainly driven by food prices. But thanks to normal rains, it could reverse quickly, taking inflation to well below (the) RBI's early-2017 target of 5 percent," wrote Pranjul Bhandari, chief economist for India at HSBC.

Also read - Niche areas of IT will be a trend to watch for: Ramesh Damani


12:00 pm Market Check


Equity benchmarks as well as broader markets extended rally in noon trade with the Nifty inching towards 8600 level, aided by index heavyweights HDFC, Reliance Industries, ICICI Bank, ITC and Infosys.


The 30-share BSE Sensex was up 260.52 points or 0.95 percent at 27790.49 and the 50-share NSE Nifty rose 74.55 points or 0.87 percent to 8594.95. The BSE Midcap and Smallcap indices climbed over a percent. About 1755 shares advanced against 726 declining shares on the exchange.


Most markets in Asia were higher, as oil prices advanced. China's Shanghai and Hong Kong's Hang Seng gained more than 1 percent.


Oil prices rose as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season in the northern hemisphere. A drop in the dollar away from seven-month highs the previous day also supported crude, as a lower greenback makes fuel purchases cheaper for countries using other currencies domestically.

Brent crude was at USD 51.85 per barrel, up 0.64 percent from the previous close. US West Texas Intermediate (WTI) crude was up 0.64 percent at USD 50.26 a barrel.

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