 "Sensex rallies 1000 points in 11 days; Reliance, ITC surge most")
Reliance Industries, ITC, Tata Steel and Lupin from the S&P BSE Sensex contributed up to 8% in the benchmark index's 1000-point rally in the past 11 trading days.
At 10:28 am; the S&P BSE Sensex was trading at 32,032, up 228 points. The index has surged 1,159 points or 3.8% from 30,834 hit on June 28, 2017. The benchmark index hit a new high of 32,044 in intra-day trade on Thursday.
Infosys and Bharti Airtel were up 6%, while Tata Motors, State Bank of India (SBI), Tata Consultancy Services (TCS), Hindustan Unilever (HUL), Maruti Suzuki India, Sun Pharmaceutical Industries and NTPC are among others that beat the markets by gaining more than 4%.
India’s industrial output grew by 1.7% in May vs. 3.1% in April. The retail inflation also continued to downtrend in June to 1.54% vs. 2.18% in May.
“This again hints at the slower growth in the Indian economy. RBI has lowered the inflation expectation for FY18, however the May inflation at 1.54% is lower than those expectations too. Despite the weak macro data, RBI may still like wait and observe the ramifications of the Fed unwinding the balance sheet, which is expected to happen in 2017. In our opinion, the current macroeconomic data suggests room for RBI to cut the interest rate,” Angel Broking said in a note.
“Nifty hit new closing high above 9800 on Wednesday with foreign investors covering their P-Note hedges and value buying by mutual funds. For today expect new highs to continue as strong momentum drives an overbought market further up. Also, expect the broader market to outperform as risk on trade spreads to the Mid- and Small-cap stocks/sectors,” India Infoline said in morning note.
ITC, the top gainer up 8.3% to Rs 334 in past 11 trading days, has surged 20% in past two months after the proposed Goods and Service Tax (GST) rates announced by the Government in May 2017.
“The biggest positive in terms of rates came in for ITC, which saw its overall tax incidence going down by 6-7% as per our calculations. We expect ITC to pass on the benefit of lower tax to the consumers especially in the fast growing DSFT cigarettes that would lead its volume growth in coming quarters,” Reliance Securities said in FMCG sector results preview.
Apart from lower tax, the Government has also brought uniformity in tax rates across states removing all ambiguity. The stock has returned 20% since announcement of the rates and we expect the momentum to sustain and volume growth trajectory to improve substantially in coming quarters, added report.
Reliance Industries rallied 8.2% to Rs 1,513 on BSE. On Wednesday, the stock hit high of Rs 1,525 in intra-day level, also its highest level since January 2008. Thus far in the calendar year 2017, the stock surged 40% against 20% rise in the benchmark index.
Tata Steel too up 8.2% to Rs 562, during the period, surges 28% in past two months, after recorded a strong operational performance for the March quarter. During April- June (Q1FY18), Tata Steel reported 28% growth in steel sales volume which surpassed the industry average.
“Incremental volumes from Kalinganagar and better prices are expected to drive growth for Tata Steel in Q1FY18. However, sharply reduced ferrochrome prices and higher coking coal cost is expected to result in lower EBITDA on QoQ basis,” analyst at Edelweiss Securities said in results preview.
At 10:28 am; the S&P BSE Sensex was trading at 32,032, up 228 points. The index has surged 1,159 points or 3.8% from 30,834 hit on June 28, 2017. The benchmark index hit a new high of 32,044 in intra-day trade on Thursday.
Infosys and Bharti Airtel were up 6%, while Tata Motors, State Bank of India (SBI), Tata Consultancy Services (TCS), Hindustan Unilever (HUL), Maruti Suzuki India, Sun Pharmaceutical Industries and NTPC are among others that beat the markets by gaining more than 4%.
India’s industrial output grew by 1.7% in May vs. 3.1% in April. The retail inflation also continued to downtrend in June to 1.54% vs. 2.18% in May.
“This again hints at the slower growth in the Indian economy. RBI has lowered the inflation expectation for FY18, however the May inflation at 1.54% is lower than those expectations too. Despite the weak macro data, RBI may still like wait and observe the ramifications of the Fed unwinding the balance sheet, which is expected to happen in 2017. In our opinion, the current macroeconomic data suggests room for RBI to cut the interest rate,” Angel Broking said in a note.
“Nifty hit new closing high above 9800 on Wednesday with foreign investors covering their P-Note hedges and value buying by mutual funds. For today expect new highs to continue as strong momentum drives an overbought market further up. Also, expect the broader market to outperform as risk on trade spreads to the Mid- and Small-cap stocks/sectors,” India Infoline said in morning note.
ITC, the top gainer up 8.3% to Rs 334 in past 11 trading days, has surged 20% in past two months after the proposed Goods and Service Tax (GST) rates announced by the Government in May 2017.
“The biggest positive in terms of rates came in for ITC, which saw its overall tax incidence going down by 6-7% as per our calculations. We expect ITC to pass on the benefit of lower tax to the consumers especially in the fast growing DSFT cigarettes that would lead its volume growth in coming quarters,” Reliance Securities said in FMCG sector results preview.
Apart from lower tax, the Government has also brought uniformity in tax rates across states removing all ambiguity. The stock has returned 20% since announcement of the rates and we expect the momentum to sustain and volume growth trajectory to improve substantially in coming quarters, added report.
Reliance Industries rallied 8.2% to Rs 1,513 on BSE. On Wednesday, the stock hit high of Rs 1,525 in intra-day level, also its highest level since January 2008. Thus far in the calendar year 2017, the stock surged 40% against 20% rise in the benchmark index.
Tata Steel too up 8.2% to Rs 562, during the period, surges 28% in past two months, after recorded a strong operational performance for the March quarter. During April- June (Q1FY18), Tata Steel reported 28% growth in steel sales volume which surpassed the industry average.
“Incremental volumes from Kalinganagar and better prices are expected to drive growth for Tata Steel in Q1FY18. However, sharply reduced ferrochrome prices and higher coking coal cost is expected to result in lower EBITDA on QoQ basis,” analyst at Edelweiss Securities said in results preview.
| Company | 28/06/2017 | LTP | %chg |
| ITC | 308.15 | 333.65 | 8.3 |
| Reliance Inds. | 1398.50 | 1513.10 | 8.2 |
| Tata Steel | 519.90 | 562.30 | 8.2 |
| Lupin | 1064.90 | 1151.00 | 8.1 |
| Bharti Airtel | 377.35 | 401.50 | 6.4 |
| Infosys | 924.40 | 976.80 | 5.7 |
| St Bk of India | 276.40 | 288.85 | 4.5 |
| TCS | 2351.20 | 2456.85 | 4.5 |
| Tata Motors | 442.15 | 461.20 | 4.3 |
| Sun Pharma. | 545.20 | 568.50 | 4.3 |
| Hind. Unilever | 1089.60 | 1135.40 | 4.2 |
| NTPC | 158.75 | 165.35 | 4.2 |
| Larsen & Toubro | 1132.40 | 1177.30 | 4.0 |
| Power Grid | 207.30 | 215.50 | 4.0 |
| Coal India | 245.80 | 254.80 | 3.7 |
| Axis Bank | 494.50 | 512.50 | 3.6 |
| Maruti Suzuki | 7238.95 | 7481.55 | 3.4 |
| Adani Ports | 364.30 | 376.40 | 3.3 |
| Asian Paints | 1109.15 | 1139.25 | 2.7 |
| Wipro | 258.40 | 265.20 | 2.6 |
| Sensex | 30834.32 | 31993 | 3.76 |
| Top 20 gainers from S&P BSE Sensex | |||
| LTP : Last traded price on BSE in Rs at 09:45 am | |||
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