Thursday, 8 January 2015

Sensex up 350 pts, Nifty above 8200; rupee surges, oil dips

02:20pm PFC, REC divestment

The roadshow for the divestment in PFC and REC is likely to start on January 12 and continue till January 16

The government plans to divest 5 percent in both these companies in FY15 and hopes to garner around Rs 3,000-3,400 crore via stake sale. The roadshows will be conducted in Hong Kong, Singapore, London, New York, Boston, Mumbai and Chennai.

However, sources indicate that NHPC stake sale and RINL, HAL listings are unlikely in FY15. There has been uncertainty too over the residual stake sale in HZL and BALCO during the current fiscal year as Finance Ministry is planning to send it back to Mines Ministry. But the government is hopeful of divesting its stake in Coal India before February.

The government has proposed to offload 10 percent stake in Coal India in FY15. According to sources, it may reserve 10 percent stock for Coal India employees in OFS. Sebi rules allow promoters to reserve up to 20 percent for retail investors.

The other mechanism that the Finance Minister may look at to offload more stake would be through CPSE ETF, launched last year.

02:00pm Market Check

The market extended gains in afternoon trade with the Sensex rising 375.64 points or 1.40 percent to 27284.46 and the Nifty climbing 129 points or 1.59 percent to 8231.10. The broader markets continued to outperform, the BSE Midcap and Smallcap indices jumped more than 1.8 percent.

About 1975 shares have advanced, 770 shares declined, and 403 shares are unchanged on the Bombay Stock Exchange.

Adrian Mowat of JPMorgan says oil price decline is a boon for Asian consumers. "This is an excellent buying opportunity in global equities, reasonable to expect 20 percent returns in India this year, new government has been working ever since it came to power," he adds.

Asian equity markets with the exception of Shanghai gained today. Europe gained more than a percent. However, Brent crude erased all its gains, falling 0.37 percent to USD 50.96 a barrel while US crude lost 0.08 percent to USD 48.61 a barrel.

The Indian rupee too extended recovery, rising 48 paise to 62.69 a dollar.

Coal India gained over 1 percent after trade unions called off their strike late last evening. Coal Minister, Piyush Goyal says workers' issues have been addressed. Morgan Stanley remains equalweight on the stock.

In a bid to deliver at least USD 400 million of cost savings in 2015, Standard Chartered announced closure of its loss-making institutional cash equities and equity research operations. The bank says this move is expected to impact nearly 200 roles immediately and expects a reduction of almost 2,000 people in 2015. More information please visit this site

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