Sensex up 40 pts; Ambuja Cements down 4% post CS downgrade

Moneycontrol Bureau
Live Market Commentary

10:55am Market update

The market is trading marginally higher. The BSE Sensex is up 36.46 points at 20186.31, and the Nifty is up 12.40 points at 6041.60, underperforming broader markets.

The BSE Midcap Index rose 0.6 percent and Smallcap gained 0.3 percent. About 919 shares advanced while 699 shares declined on the BSE.

Shares of Hindalco Industries, Bajaj Auto, M&M and ICICI Bank, Bank of Baroda and IndusInd Bank gained 1.5-2.7 percent whereas GAIL, ONGC, Wipor, ACC and Ultratech Cement lost 1-2 percent.

Also Read - Sovereign downgrade risk still on table for India: DBS

10:35am Earnings reaction - Reliance Industries shares dropped 1.6 percent as its Q1 earnings were operationally weak, but treasury gains helped beat street estimates. Net profit fell by 4 percent quarter-on-quarter to Rs 5,352 crore while EBITDA dipped 9.5 percent Q-o-Q to Rs 7,075 crore from Rs 7,825 crore due to a dip in gross refining margin to USD 8.4 a barrel as against USD 10.1 a barrel in Q4.

Brokerage house - Ambuja Cements plunged 4 percent as Credit Suisse downgraded the stock to neutral with target price of Rs 205. "The stock is trading at its peak multiples and already pricing in a margin recovery in CY14 as part of potential merger synergies with ACC. We expect June quarter profits to decline 25-35 percent Y-o-Y for Indian cement majors," Credit Suisse report said.

10:15am Indian equity benchmarks recouped early trade losses amid volatility, supported by financials and auto stocks. The broader markets also trade with marginal gains. Advancing shares outnumbered declining ones by 697 to 510 on the BSE.

The BSE Sensex is up 47.77 points at 20197.62, and the Nifty is up 14.30 points at 6043.50.

HDFC led gainers, rising 2.7 percent while ICICI Bank rose 1.35 percent. HDFC Bank and State Bank of India advanced nearly 0.4 percent.

Auto stocks are also on buyers' radar. Tata Motors, Bajaj Auto, M&M and Hero Motocorp gained 1-2 percent while Maruti increased 0.6 percent.

Jal Irani of Macquarie says that Reliance Industries' (RIL) first quarter earnings were in-line with expectations. "We retained price target of Rs 1,100/share," he said. The stock lost 1.5 percent.

State-owned capital goods major BHEL dropped another 4 percent today on top of Friday's 8 percent fall due to order book concerns.