Sri Lankan stock brokers watch a computer screen at the Colombo Stock Exchange. (Photographer: Luis Enrique Ascui/Bloomberg News)

Nifty Sets A New Record; Rupee Clocks Best Week In A Year

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  • Closing Bell

    Indian shares climbed adding to their second week of gains boosted by a thumping win by PM Modi’s party in a key state and the U.S. Fed struck a dovish tone after a policy meet.

    The benchmark S&P BSE Sensex gained 0.2 percent to 29,649, its highest level in nearly two-years. Meanwhile, the NSE Nifty index closed little changed but at a new record high of 9,160. This after the 50-share index rose as much as 0.7 percent to register a new intraday all-time high of 9,218.40.

    ITC Ltd. was the top gainer on both the Sensex and the Nifty after the government indications that it will refrain from raising taxes on cigarettes, potentially helping the company make up three years of lost sales. Technology stocks also made a comeback this week, led by Wipro and HCL Tech.

    The market breadth, however, turned in favour of the sellers at close of trade. About 883 stocks declined, 627 advanced and 60 remained unchanged on the NSE.

    Resumption of foreign inflows and seven straight months of net purchases by local funds have boosted the valuation of Indian stocks to their highest-level in more than six years. The Sensex traded at 17.3 times estimated 12-month earnings, the highest since November 2010.

    Foreign funds have purchased $2.9 billion of local shares so far this year after a record $4.6 billion outflow in the three months through December. Domestic funds have been buyers for seven straight months through February, including a record Rs 13,800 crore ($2.1 billion in November).

    Nifty Next Stop, 9600?

    Ruchit Jain, technical analyst at Angel Broking said the overall trend remains positive as the Nifty was making higher tops and higher bottoms. Besides that, another positive he said was that the corrections so far have been time corrections and not price corrections.

    “We had breakout gap this week, i.e. a significant move after a period of consolidation. This gap area from 8,950-9,050 is a very strong support for the market. The market is unlikely to go below that in the short-term,” he told BloombergQuint in a phone conversation.

    On higher side, he said whenever any index or any stock is trading at an all-time high level, the targets are usually arrived by looking at reciprocal retracements of the previous corrective move. “As per the reciprocal retracement, the target for Nifty should head first to 9,400 and then to 9,650,” he said.

    Sun Pharma's Unit To Acquire Canada's Thallion Pharma

    Sun Pharmaceuticals Ltd. in an exchange filing said that it's indirect subsidiary Taro Pharmaceuticals Inc. is set to acquire 100 percent shares of Canada-based Thallion Pharmaceuticals Inc. (Canada). The acquisition is priced at 2.3 million Canadian Dollars with 0.4 million due at the earlier of the completion of an additional pre-clinical animal study or April 1, 2019.

    Shares of the company were trading lower by 0.4 percent at Rs 708.20.

    United Bank Near 2-Month High

    Shares of government-run United Bank of India Ltd. jumped as much as 12 percent to Rs 26.95, the highest since February 9, 2017.

    The lender received a letter from the Indian government on capital infusion of Rs 418 crore.

    Trading volumes were nearly 5.5 times its 30-day average. The stock has a total return of 30.6 percent on a year-to-date compared with 11.7 percent for the benchmark Sensex index.

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    Former IDBI Chief Gets Bail

    European Indices Open On A Weak Note

    MTNL Jumps On Talks Of Merger With BSNL

    Shares of Mahanagar Telephone Nigam Ltd. (MTNL) rose as much as 8 percent to Rs 26.20 after a parliamentary panel suggested merger of state-run telecom firm with Bharat Sanchar Nigam Ltd.

    MTNL’s trading volume at 2.3 times 30-day average. The stock has given a return of 23.5 percent so far this year compared with 11.7 percent for the benchmark S&P BSE Sensex index.

    Dredging Corporation of India Jumps 14.3%

    • Shares of the company extend winning streak to day 4; up 44 percent this week
    • Top Nifty 500 index gainer for second consecutive day
    • Volumes at 24 times its 20-day average
    • Provides integrated dredging and related marine services; Market cap: Rs 1,980 crore
    • On 6 March, the company clarified on an Economic Times report (Government looking to sell 51 percent stake in Dredging Corp) saying it has no specific official information/communication from the Centre regarding the stated news item.
    • Government of India holds 73.47 percent stake as of December 2016.

    Jindal Poly Films Extends Winning Streak To Day 6

    • Jumped as much as 12.8 percent today after closing 19.4 percent higher yesterday
    • Gained 40 percent in a week
    • Manufacturer of polyester and polypropylene films; Market cap of Rs 2,000 crore
    • On 6 March 2017, board approved expansion plans of Rs 350 crore

    History On The Side Of Indian Stocks, Says S Naren

    Rupee Tumbles 24 Paise, Stronger Equities Restrict Fall

    Reversing its 4-day climb, the rupee fell 24 paise to 65.65 against the dollar today as the American currency got some of its lure back among banks and importers.

    The dollar's strength overseas weighed, but a higher opening in domestic equities cushioned the impact.

    The rupee had gained 28 paise to close at a fresh 16-month high of 65.41 on Thursday after the U.S. Federal Reserve stuck to its stance of a gradual approach on future rate hikes.

    Source: PTI

    Tobacco Firms Gain After GST Panel Sets Extra Levy Cap

    Shares of tobacco firms rose between 3 percent to 7 percent after the Goods and Services Tax (GST) panel set the cap for additional tax on tobacco.

    Shares of Godfrey Phillips rose as much as 2.86 percent while ITC was the top gainer on the Nifty 50 index with gains of over 7 percent. VST Industries was up 3 percent on the Bombay Stock Exchange.

    Radio City’s Parent Music Broadcast Lists At 26% Premium

    Jagran Prakashan-promoted Music Broadcast Ltd. on Friday became the first radio channel operator in eleven years to go public, as its shares listed on the Bombay Stock Exchange at Rs 420, a 26 percent premium to its issue price.

    The Radio City FM station operator’s initial public offering (IPO) was subscribed nearly 40 times by the time the issue closed on March 8, according to stock exchange data.

    Nifty Rally Gone Too Far?

    Opening Bell

    Indian shares rose for the third time this week despite the global equity market rally losing momentum. However, the equity benchmarks pared some of their opening gains as some investors chose to book profits after the record rally.

    The S&P BSE Sensex gained as much as 0.8 percent to 29,824 while the NSE Nifty jumped 0.7 percent to a new all-time high of 9,218. The market breadth was skewed in favour of the buyers. About 941 stocks advanced, 485 declined and 466 remained unchanged on the NSE.

    Also Read: Stocks Radar: ITC, ABG Shipyard, GMR Infrastructure, Lupin

    Stocks To Watch

    • ABG Shipyard: Says few parties expressed interest after lenders invited EOI
    • Aditya Birla Nuvo: Says Ammonia, Urea plants at Jagdishpur temporarily shut; plant expected resume ops April 10
    • Coal India: India GST Council caps environment cess for coal at Rs 400 per tonne
    • Hindustan Organic: To consider transfer of co.’s plant to ISRO and appoint asset valuer for HFL stake
    • ITC: India GST Council approves a cap of Rs 4,170 per 1,000 sticks or 290 percent ad valorem or a combination of both for tobacco and products
    • Jyoti Structure: Clarifies lenders decided to restructure debt
    • Lupin: Introduces generic Minastrin 24 FE chewable tablets in US
    • Marico: Says Guwahati personal care product plant starts ops
    • Megasoft: Gets Bihar govt deal for IT services
    • Nocil: Approves expanding rubber chemicals capacities
    • Oil & Natural Gas Corp. (ONGC): To explore coal-bed methane prospects post pricing freedom
    • Reliance Infrastructure: Approves raising Rs 2,000 crore through QIP; to use fund for defense operations, cut debt

    Talking Points

    • GST Council Approves All Five Draft Bills, Moving Closer To July 1 Rollout
    • Cap on additional levy on tobacco, luxury cars, aerated drinks cleared
    • Coal imports in India at 144.87 MT as of December 31 versus 146.12 MT
    • Delhi Airport signs land license pact with Airbus for simulator
    • Global funds buy Rs 1,360 crore of local stocks; domestic funds sell Rs 88.17 crore yesterday: Provisional data
    • Brazil 2017-18 sugar output seen at record 36 million tonnes: Wilmar
    • India federal government to bear cost of farm loan waiver in Uttar Pradesh (PTI)
    • Alibaba-Backed payments startup Paytm takes big step Into Canada

    Must Read: When an Indian Billionaire Becomes an Activist Investor

    Money Market Heads-Up

    The U.S. Fed decision of not accelerating the timeline for future tightening and Prime Minister Narendra Modi's victory in state elections have pushed the Indian rupee higher this week. The local currency has climbed 1.8 percent to 65.41 per dollar this week, which is the most in a year.

    However, some traders say that the rally in the rupee is overdone and that it has taken the currency to expensive levels on a real effective rate basis. ANZ expects some retracement of the currency once the euphoria fades and sees the rupee at 67.50 per dollar by the end of the year.

    In the bond market, the yield on the benchmark note declined 6 basis points for the week. Later today, the government will repurchase Rs 3,500 crore of bonds.

    Good Morning!

    The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, rose 0.2 percent to 9,205.

    Most Asian stocks were trading little changed, as Japanese equities slipped while Hong Kong shares fluctuated, after the biggest gain for MSCI Asia Pacific Index since November a day before. The Bloomberg Dollar Spot Index was little changed after dropping 1.4 percent in previous two sessions.

    Overnight, the S&P 500 Index’s post-Fed rally ran out of steam after the gauge climbed within 0.5 percent of an all-time high. The pound retreated after Thursday’s gains spurred by some Bank of England policy makers saying they may not be far behind monetary policy committee member Kristin Forbes who’s leaning toward raising interest rates.

    The focus on Friday will be a meeting between Donald Trump and Angela Merkel, while Steve Mnuchin will be attending his first G20 finance chiefs gathering in Germany as U.S. Treasury secretary. He repeated his view on Thursday in Berlin that the long-term strengthening of the dollar is in the best interest of the U.S. economy and that it reflects in the world’s reserve currency.

    Oil advanced 0.3 percent to 48.88, heading toward its first weekly gain in three weeks. Gold was steady after a two-day gain, trading at $1,227.15 an ounce and poised for a 1.9 percent increase for the week.

    BloombergQuint