Nifty opens above 8200, Sensex firm; ITC, Bharti, Infosys losers

ONGC, Cipla, Axis Bank and HDFC twins are gainers while Tata Motors, Bharti, ITC, Bajaj Auto and Infosys are losers in the Sensex.
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Dec 01, 2016, 10.24 AM | Source: Moneycontrol.com

Nifty opens above 8200, Sensex firm; ITC, Bharti, Infosys losers

ONGC, Cipla, Axis Bank and HDFC twins are gainers while Tata Motors, Bharti, ITC, Bajaj Auto and Infosys are losers in the Sensex.

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Nifty opens above 8200, Sensex firm; ITC, Bharti, Infosys losers

ONGC, Cipla, Axis Bank and HDFC twins are gainers while Tata Motors, Bharti, ITC, Bajaj Auto and Infosys are losers in the Sensex.

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09:17
Moneycontrol Bureau

9:55 am Market view:
Speaking to CNBC-TV18 Sanjeev Prasad, Senior Executive Director and Co-Head of Kotak Institutional Equities, said that recovery may not continue as valuations are on the higher side for a lot of stocks.

This is a reversal of the big trade one saw on passive buying at the end of June and October which were led by market expectations for loose monetary policy, he said.

The gross margin story that was valid for auto in the last two years is no longer relevant. We have to rely on core volume growth which is a challenge given all the challenges now, he said.

He is still upbeat on the banking sector. A few oil and gas names are inexpensive, he averred.

9:45 am Macro outlook: Speaking to CNBC-TV18 A Prasanna, Chief Economist, I-Sec PD, said that the economy is unlikely to recover fully in Q3.

India’s economy grew 7.3 percent in July to September, marginally quicker than the previous quarter’s 7.1 percent, but the revival could stutter in the coming months, hit by an economy-wide cash-crunch following the unexpected ban on Rs 500 and Rs 1,000 currency notes.

GDP growth may slow down to 6 percent in this quarter, he says, adding that liquidity crunch may not have a lasting impact.

He expects the RBI to cut rate by 25 basis points in December.

9:30 am FII view: Ajay Kapur of Bank of America Merrill Lynch says India has shown strong improvement in current account since the 'taper tantrum' of 2013 and the currency has been relatively resilient this year.

But, the earnings recovery continues to be elusive and valuations at 20 times trailing price to earnings (PE) and 2.9 times trailing prices to book (P/B) remain expensive as compared with other emerging markets, he feels.

Clogged public sector banks' balancesheet, the impact of demonetisation in the short term and the consequent negative wealth effect as well as potential delays in implementation of structural reforms are likely causes of headwinds for the markets, according to him.

Ajay Kapur says despite being the biggest laggard this year among major emerging markets, investor positioning in India is still high - a contrarian negative.

Don't miss: Buy, sell, hold: 2 stock upgrades by analysts post Q2 results

The market has opened firm as the Sensex is up 79.42 points or 0.3 percent at 26732.23. The Nifty is up 19.50 points or 0.2 percent at 8244.00. About 424 shares have advanced, 104 shares declined, and 28 shares are unchanged.

ONGC, Cipla, Axis Bank and HDFC twins are gainers while Tata Motors, Bharti, ITC, Bajaj Auto and Infosys are losers in the Sensex.

The Indian rupee slipped in the early trade. It has opened lower by 10 paise at 68.48 per dollar versus previous close 68.38.

Mohan Shenoi of Kotak Mahindra Bank said, "Oil prices have risen on the back of OPEC decision to cut production. Strong US data makes December rate hike near certain."

The US dollar surged to a 9-month high against the yen and also gains against the euro and Swiss Franc after a surge in oil prices pushed US treasury yields higher.

Auto stocks are likely to be in focus today as November sales data will be announced. Demonetisation may hit auto sales as retail growth is expected to be sharply lower for all companies. Medium and heavy commercial vehicles (MHCV) segment may be impacted the most. Analyst expect 30 percent drop in retail volumes and passenger vehicle industry may see 20 percent drop in retail sales.

Oil and aviation stocks will be also keenly watched. Petrol price is hiked by a marginal 13 paise a litre while diesel rates were cut by 12 paise in line with global trends. Jet fuel price is cut by 3.7 percent ( Rs 1881) to Rs 48379/kl in Delhi.

Meanwhile, on macro economy front India’s gross domestic grew 7.3 percent in July to September, marginally quicker than the previous quarter’s 7.1 percent, but the revival could stutter in the coming months, hit by an economy-wide cash-crunch following the unexpected ban on Rs 500 and Rs 1000 currency notes.

Crude prices rallied as the Organisation of Petroleum Exporting Countries (OPEC) surprised the markets with an agreement to cut oil production by 1.2 million barrels a day, in an effort to support oil prices. Crude oil prices have declined by more than half since mid-2014 because of global oversupply and an increase of US shale production.

Asian markets opened on a positive note early after OPEC reached its first deal since 2008 to cut oil production. Australia's ASX 200 was up 0.58 percent, with strong gains in its energy sub-index, which climbed 6.76 percent and its materials sub-index, which was up 2.14 percent.

The Nikkei 225 surged 1.55 percent in early trade, likely because of the weaker yen which hovered at the 114 handle.

US stocks edged higher as an upbeat outlook from UnitedHealth lifted health insurers, though a sharp drop in oil prices weighed on energy shares and limited the advance.


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Nifty opens above 8200, Sensex firm; ITC, Bharti, Infosys losers

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