Moneycontrol Bureau
Buying in late trade helped the BSE Sensex gain 188 points intraday Tuesday, especially ahead of the outcome of the 2016 US presidential elections that will set the tone for global markets. Equity benchmarks were rangebound before gaining strength in last hour of trade.
The 30-share BSE Sensex rose 132.15 points to 27591.14 while the 50-share NSE Nifty was up 46.50 points at 8543.55 after hitting an intraday high of 8559.40.
The rally in late trade was largely on hopes of Hillary Clinton becoming the 45th US president but overall investors are still in wait-and-watch mode.
Democratic party candidate Hillary Clinton continues to be the favourite, said Keith Parker of Barclays who is overweight on emerging markets. The Republicans will control the House, which reduces chances of aggressive change in policies like taxes and regulations, he added.
He expects further upside in case of Clinton win. However, if Republican party candidate Donald Trump wins, a 10 percent downside is expected, Parker said.
"Rather reacting on first tick, we suggest traders to wait and let the markets to stabilise before initiating any fresh trade," Jayant Manglik of Religare Securities said.
European stocks were mixed while most Asian bourses eked out modest gains after oscillating between positive and negative territory, as investors focused on the US presidential elections.
On the home turf, the broader markets also gained strength with the BSE Midcap and Smallcap indices rising 0.4 percent and 0.2 percent, respectively despite weak breadth. About 1523 shares declined against 1359 advancing shares on the BSE.
Tata Motors retained its top position in the buying list throughout the session today, rising 6.5 percent as Credit Suisse believe the GBP depreciation will drive a multi-year outperformance for the stock (JLR). The brokerage house has upgraded it to outperform with increased target price at Rs 720 (from Rs 510 earlier), representing a 40 percent upside.
However, Maruti Suzuki fell 1 percent after Credit Suisse has downgraded the stock as most positives seem priced in.
It says further upgrades look unlikely given that 18-20 percent volume growth in FY18 is already baked in. It raised FY17 EPS by around 8 percent (Q2 results) but broadly maintained FY18/FY19 EPS and target price at Rs 6,000.
ICICI Bank rose 1.6 percent. Analysts say watchlist is expected to decline going ahead as resolutions to stressed accounts happening at a fast pace. BHEL climbed nearly 3 percent after Q2 earnings beat analysts' estimates with profit at Rs 109 crore against loss of Rs 180.8 crore YoY.
Pharma stocks were under pressure today as several analysts believe that a Democratic win in the US presidential election will have a negative impact on drug pricing control. Indian pharma companies have 15-48 percent exposure to the US. Sun Pharma lost 3.35 percent followed by Lupin (down 0.66 percent) and Cipla (down 1.7 percent).
Lupin and Cipla will also announce quarterly earnings on Wednesday. A CNBC-TV18 poll expects Lupin to report a 80 percent growth in profit and Cipla to post a 13 percent degrowth YoY.
Varun Beverages saw a subdued listing but managed to rebound. It closed 3 percent higher at Rs 459.50 against issue price of Rs 445.
Ashok Leyland and KEC International gained 2-4 percent on better-than-expected earnings in Q2 while Bharat Forge fell 1 percent on dismal quarterly performance.
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