Sensex, Nifty remain firm; Hindalco, TCS, BHEL jump 1-3%

Moneycontrol Bureau10:58 am Market Update: Equity benchmarks extended upside with the Sensex rising 113.74 points to 24791.11 and the Nifty climbing 41.30 points to 7553.85.About 1140 shares advanced against 884 declining shares on the BSE.Hindalco (3.5 percent), TCS (2.5 percent), Wipro (1.7 percent) and GAIL (1.6 percent) are the top gainers in Nifty. Among the losers are Lupin (-4.3 percent), Sun Pharma (-2.2 percent), Maruti Suzuki (-0.8 percent) and HUL (-0.7 percent).

In sectoral performance as reflected by the respective indices, consumer durables (2.0 percent), metals (1.5 percent), IT (1.4 percent) and auto (0.7 percent) gained, while healthcare (-1.5 percent) were under pressure.

Key Asian markets were trading firm. China’s Shanghai led gainers, trading 54 points or 1.9 percent higher at 2959. Hong Kong’s Hang Seng was up 171 points at 20675, Singapore’s Straits Times was up 22 points at 2902, Taiwan’s Taiwan Index was up 63 points at 8797, and Korea’s KOSPI was up 2 points at 1990. Japan was the only exception to the bullish trend with the Nikkei 225 down 245 points or 1.5 percent at 16691.10:40 am Credit Suisse on Torrent Pharma: Credit Suisse has upgraded Torrent Pharmaceuticals to outperform from neutral as valuations are attractive at 15.6 times FY18 EPS with higher than peers returns and lower risk as Torrent's US plants have a clean FDA status and its stable India business accounts for half the profits; (2) it has surprised positively on improved execution in both India (Elder integration) and the US (higher market share); (3) capacity constraints in both US and EU get addressed with commissioning of the Dahej plant; and (4) concerns of a weak US pipeline ease as it has increased efforts and filing should pick-up from the next quarter.10:20 am Buzzing: Lupin shares hit fresh 52-week low of Rs 1,624, down 3 percent intraday. CLSA downgraded the stock to underperform from buy and slashed target price to Rs 1,800 from Rs 2,162 earlier as it does not see near-term catalyst. It expects the stock to remain rangebound until clarity emerges on the Goa observations.

Out of nine USFDA observations in Form 483 on Lupin’s Goa plant, two are repeat from the July 2015 inspection (Observation No 2 and 4) while two are worrying (No 1 and 4), feels the brokerage.

CLSA says past instances indicate that repeat compliance violations increase the risk of escalation to a warning letter or may lead to delays in approvals for site until issues are addressedsatisfactorily.

It also believes many lucrative pending approvals are linked to the Goa plant that may get delayed.

Also read - Expect 20% corporate earnings growth in FY17: IDFC Sec10:00 am Market Check

The market is firm on its feet as the Sensex is up 94.58 points or 0.4 percent at 24771.95. The Nifty is up 30.95 points or 0.4 percent at 7543.50. About 977 shares have advanced, 715 shares declined, and 105 shares are unchanged.

Hindalco, TCS, Wipro, BHEL and M&M are top gainers while Lupin, Sun Pharma, HUL, Dr Reddy's and Cipla are losers in the Sensex.

Christopher Wood of CLSA says current crude oil rally is a countertrend move driven by hopes of a production freeze between Russia and Saudi Arabia and will fail, just as the rally in the second quarter of last year failed.

According to Greed & Fear, oil is much more likely to go to USD 20 a barrel than to recover to USD 60 a barrel. He feels still the rally may last a while longer given that Saudi needs to price its planned USD 5 billion international bond issue.

Wood says oil market will also remain hopeful ahead of the scheduled OPEC-Russia summit on April 17.