Sensex up 740 pts, Nifty above 6100; rate sensitives lead

Moneycontrol Bureau
Live Market Commentary

02:55pm Polaris Buzz

Polaris shares gained more than 2 percent on top of a 1.7 percent rally in previous session as a media report yesterday suggest that the company was in talks with Japan's NEC to sell services division.

Sources told CNBC-TV18 today that bidders want the company to consider sale of entire company. NEC and NTT seek majority stake in the company, say sources. Both are currently in exploratory talks with company.

It is learnt that the company is keen to keep its product business while bidders like NEC & NTT are eyeing its product business.

Sources say Polaris is unwilling to reduce valuation for its services business. It is likely to have sought USD 330 million for the same.

Meanwhile, the Sensex is up 746.25 points or 3.74 percent at 20708.41, and the Nifty is up 233.85 points or 3.96 percent at 6133.30.

Also Read - Nifty can climb to 6300 this year; shun FMCG, buy banks: JP Morgan

02:50pm Oil Retailers Rally

Shares in state-owned oil retailers gained as a rally in the rupee against the dollar was seen easing concerns about higher cost of crude oil imports and dollar debt, dealers say, reported Reuters.

HPCL gained 4 percent and BPCL rallied 8 percent while IOC rose 3 percent.

The rupee surged as much as 2.8 percent on Thursday, hitting its highest in a month, as the US Federal Reserve's decision not to dial back its easy money policy is expected to provide a reprieve to the local central bank in its policy making.

Also Read - Rajan will ease liquidity; buy bank after a day: IIFL

02:45pm F&O update

Stocks futures added 5 crore shares in open interest and high beta stocks saw huge build-up.

Nifty 6100 Put added 30 lakh shares in open interest and 6000 Put added 26 lakh shares in open interest.

Nifty 6000 call shed 14 lakh shares in open interest while 6300 call added 7 shares in open interest and its premium jumped 1.5 times to 24.

Also Read - Mkt rally won't sustain beyond 5%; focus on quality stocks now: Kotak

02:35pm Market Update

The Nifty sees biggest 1-day gain since May 2009 in absolute terms while the Sensex touched its highest level since November 2010.

The 50-share NSE benchmark gained 1,000 points from its August 28 lows and rallied 1,000 points in last 16 trading sessions. About 30 Nifty stocks rallied over 20 percent since August 28 low.

Bank Nifty is also at its highest level since July 23, which jumped over 3400 points since August 28 low. Banking stocks gained in the range of 3-23 percent.

Also Read - 61/$ key support for rupee; sub 60 unlikely soon: Macquarie

02:25pm Stock in News

Ashoka Buildcon gained 3 percent as its joint venture has signed concession agreement with Tamil Naud government for road project. Joint Venture will develop Chennai ring road on annuity basis.

Suzlon Energy shares surged 4 percent after the company sold 75 percent stake in its China arm for USD 28 million to Poly LongMa Energy. The move is a part of the company's asset monetisation stratgey in order to pare its Rs 13,700 crore rupee debt.

Also Read - Sensex soars 500 pts: When money is easy, stocks will party

02:15pm Bulls retained their hold on the Dalal Street in afternoon trade with the equity benchmarks surging more than 3.5 percent, supported largely by rate sensitives after Federal Reserve has kept its bond buying programme unchanged at a rate of USD 85 billion per month.

The Sensex is up 715.26 points or 3.58 percent at 20677.42, and the Nifty is up 228.05 points or 3.87 percent at 6127.50. About 1331 shares have advanced while 887 shares declined on the Bombay Stock Exchange.

One needs to be cautiously optimistic on emerging market says Herald Van Der Linde, Head of Equity Strategy, Asia-Pacific, HSBC because the issues concerning current account deficit (CAD), reforms etc have not yet gone away. So he sees no case for changing their rating.

Recently, HSBC had downgraded India to an underweight.

Moreover, he expects a correction for Indian market at some point of time.

Meanwhile, the rupee gained 161 paise to 61.76 against the US dollar on sustained dollar selling by FIIs.

As surprising as the FOMC announcement was yesterday, this brings great news for emerging markets, says Nirmal Jain, Chairman, IIFL. Easy money will continue to come into emerging markets which will lead to a rally in currencies, equities and bonds, he says.