Sensex, Nifty consolidate; Mindtree gains 4%, Lupin up

Moneycontrol Bureau

10:55 am Market Update: The Sensex gained 1.19 points at 28447.31 and the Nifty fell 4.75 points to 8603.30. About 1213 shares have advanced, 1007 shares declined, and 140 shares are unchanged on the BSE.

10:40 am ACC Q2 nos forecast: Cement major ACC is expected to degrow in the quarter ended June. Profit is likely to fall 11 percent year-on-year to Rs 217 crore and total income may drop 2 percent to Rs 3,012 crore, according to a CNBC-TV18 poll.

The company follows January-December as its financial year.

Analysts expect cement volumes to decline in April-June quarter (following weakness in past two consecutive quarters) due to poor sales seen in Southern and Northern markets.

The topline of ACC, which has pan India presence, may be dragged by lower volumes but realisations and RMC may support. Analysts see poor realisations in northern and western regions.

Southern presence may help realisations as cement prices jumped 15 percent Y-o-Y. Ready mix concrete (RMC) business may support topline. RMC business clocked revenue of Rs 439 crore in Q1CY15 and Rs 305 crore in Q2CY14.

10:15 am Market Expert: Vibhav Kapoor of IL&FS issues a warning to very optimistic traders/ investors. He agrees that with global headwinds out of the way, Nifty has made higher bottom at around 8000 levels. Apart from global positivity, other macros, including low commodity prices, too have been aiding sentiment. There are signs of improvement even in the country's micro environment, particularly with the government taking gradual actions, he said.

However, poor earnings remain a concern but the biggest negative is that of stretched valuations, Kapoor said. Most consumer companies' valuations are steep even at FY17 levels. Nifty too is stretched. He thinks one cannot make too much money from here and the market must consolidate at some point.

10:00 am Market Check

The market entered into a consolidation phase after 2-day rally. The 30-share BSE Sensex gained 33.25 points at 28479.37 and the Nifty rose 5.80 points to 8613.85. The broader markets, too, turned volatile.

Near term concerns like tepid earnings, policy logjam and global volatility aside, brokerage house Ambit reiterates that the Nifty can climb to 11000 over the next 24 months.

Sun Pharma gained more than 1 percent as brokerage CLSA raised target price on the stock to Rs 1,160, citing potential of Ranbaxy's Mohali plant. Lupin, too, rose over 1 percent on getting approval from US Food and Drug Administration for diabetes drug PrandiMet.

Mindtree surged 4 percent after better than expected revenue in the quarter ended June. Revenue increased by 6.9 percent quarter-on-quarter to Rs 981.6 crore and dollar revenue grew by 4.8 percent to USD 154.9 million during the quarter, better than forecast of 6.7 percent and 4.3 percent growth, respectively.