BSE Sensex shrugs off US govt shutdown; banks, infra lead

Moneycontrol Bureau
Live Market Commentary

1:45 pm Macro update: The economy will grow at more than 5 percent in the current financial year ending in March 2014, Economic Affairs Secretary Arvind Mayaram said, reports Reuters.

"It will be more than 5 percent. It cannot be less than 5 percent," Mayaram said.

Mayaram also said as of now, a shutdown of the US government is not likely to have a major impact on the Indian economy. "As of today, I don't see any major impact on the Indian economy on that account."

1:30 pm Buzzer: Shares in Tata Communications gained 4.3 percent after South Africa's Vodacom Group said it was in exclusive talks to buy the company's unlisted local unit, Neotel, in a potential USD 590 million deal, reports Reuters.

Acquiring Neotel would be a major boost to Vodacom's ambitions to grow its data business in Africa's largest economy.

"Every USD 100 million of deal equity value adds Rs 15/share to fair value. However, we add a conservative Rs 30/share and raise our target price to Rs 250 and reiterate BUY," Kotak said in a report on Tuesday.

1:20 pm Outlook: Bank of America Merrill Lynch (BofA-ML) lowered its current account deficit (CAD) target for India for the current financial year to 3.2 percent of the GDP from 4 percent earlier.

"We have cut down the FY14 current account deficit (CAD) forecast to 3.2 per cent of GDP (from 4.0 per cent earlier) by pulling down the net gold import bill by USD 7 billion to USD 30 billion," BofA-ML said in a research note today.

According to the global financial services major, though CAD at 3.2 percent of GDP is significantly lower than the 4.8 percent it registered in fiscal year 2012-13 ", it still remains higher than the 2.4 percent of GDP that we estimate as the optimal current account deficit".

Don't miss: India's factory slump eases in Sept, orders still shrinking

The market is firm boosted by banks, capital goods and pharma companies. The Sensex is up 101.31 points at 19481.08, and the Nifty is at 5773, up 37.70 points.

About 1118 shares have advanced, 817 shares declined, and 130 shares are unchanged.

September auto sales numbers point to some cheer. Maruti's sales rise 11.7 percent percent year-on-year to over 1 lakh units, beating expectations. TVS Motor's sales also rise about 16 percent Y-o-Y with a big boost coming in from exports. M&M, though bucked the trend, as total sales fell 10.5 percent but are better-than-expected.

Globally, the US government shuts down for the first time in 17 years as the Congress fails to resolve a budget stand-off over the heathcare law. Asian markets come off marginally from highs though most experts believe that the news was on expected lines.