Friday, 2 January 2015

Nifty ends at 8395, Sensex up 380 pts; banks up, M&M drags

03:30 pm Market close: After a stellar rally, the market ended on a high note. The Sensex was up 380.36 points or 1.4 percent at 27887.90 and the Nifty closed up 111.45 points or 1.4 percent at 8395.45.

About 1784 shares advanced, 1160 shares declined, and 709 shares were unchanged.

HDFC, BHEL, Tata Motors, ICICI Bank and Axis Bank were up 2-4 percent. M&M, Reliance, Bajaj Auto, Hero MotoCorp and HUL were laggards.

 03:15 pm Macro economic outlook: Samiran Chakraborty, head of research, Standard Chartered Bank says at the moment there is some disconnect between PMI and IIP data. He estimates November IIP to be closer to 4 percent and if that happens the divergence will narrow.

He adds that right now just a positive IIP even at 2 percent will make everyone happy, but that should not be the case. October IIP slipped to -4.2 percent. India should aspire for higher IIP, he says. However, on the brighter side, he believes low IIPs are a thing of the past. Going ahead, he expects export growth numbers to be better in the second half of FY15.

On third quarter GDP, he says due to the much higher weightage on agriculture in Q3 when compared to the rest of the quarters, it will be closer to 5.5 percent. "Kharif production this time was not good, and to what extent it will be counterbalanced by manufacturing will have to be seen," he explains. Also, Chakraborty feels services will be tepid.

3:00 pm FDI policy on March 31: The Commerce and Industry Ministry plans to release the next edition of its consolidated FDI policy document on March 31, incorporating all the changes made over the past year.

"The next edition of the Consolidated FDI Policy Circular i.e. 'Consolidated Foreign Direct Investment Policy Circular of 2015' is scheduled to be issued on March 31, 2015, and will be effective from 1 April 2015," the Department of Industrial Policy and Promotion (DIPP) said.

The DIPP has invited public comments on the document till January 16, it said. FDI is considered crucial for economic development and India has taken several steps to attract such funds.

2:35 pm Market outlook: Veteran fund manager Akash Prakash of Amansa Capital sees Indian corporate earnings growing by over 20 percent compounded over the next 2-3 years. He believes the stock market will deliver similar growth. He bases the expectation on low base, acceleration of the economy and the rupee trading at 63-65 per dollar, coupled with low commodity prices.

"I am making an assumption that multiples will hold because interest rates are coming down, they may not expand. Bulls ofcourse will argue that multiples will expand. I would say do not assume that, assume multiples hold, earnings growth over the next 2-3 years will be 15-20 percent, so the markets should compound at that," he told . He is bullish on banks and consumer discretionary stocks. He continues to like IT despite the fact that he sees short-term pain in the sector. More information please visit this site

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