Indian shares ended near day’s highs Monday as euphoria over the fuel price hike continued to spike index-heavyweights in the oil&gas sector. Positive cues from European peers also boosted sentiments.
Indices opened on a firm note despite mixed cues from Asian markets. Sustained buying activity in Reliance Industries, Reliance Communications and ONGC helped the benchmarks to gain moment as the session progressed.
Bombay Stock Exchange’s Sensex closed at 17774.26, up 199.73 points or 1.14 per cent. The index touched a high of 17794.80 and low of 17571.85 in today’s trade.
National Stock Exchange’s Nifty ended at 5333.50, up 64.45 points or 1.22 per cent. The broader index hit intra-day high of 5339.45 and low of 5270.75.
“Market is likely to trade in a range of 5250 to 5350 levels in coming days in the absence of any directional trigger, whereas a range breakout on either side may give further direction to the market.
If S&P CNX Nifty sustains above 5320 levels then further up move may be seen in the market towards 5350-5380 levels. On downside if it stays below 5280 levels then selling pressure may intensify and Nifty may test 5250-5220,” said Anand Rathi’s weekly technical report.
BSE Midcap Index was up 1.14 per cent and BSE Smallcap Index moved 1.10 per cent higher.
Amongst the sectoral indices, BSE Oil&gas Index gained 2.29 per cent, BSE Realty Index advanced 2.15 per cent and BSE Power Index moved up 1.94 per cent.
In the coming sessions, concern of rising inflation due to fuel price hike and impact of monsoon are likely to guide the market.
According to India Meteorological Department, the cumulative rainfall till the week ended June 23, 2010 stood at 11.1% below Long Period Average. The rainfall for the week ended June 23, 2010 stood at 21.2% below normal.
“We expect headline inflation to peak towards the end of Jul’10 and begin descending towards the 7% levels by Nov’10. Our assumptions are based on our in-house view that crude is likely to remain range bound with an upper-end level of $80/bbl.
While we had been expecting a 75bps monetary tightening in policy rates during the rest of FY11E (repo at 6%), we believe that the fuel price deregulation might force the RBI’s hands sooner than anticipated. Although the RBI is slated to announce its First Quarter Review of the Monetary Policy on 27th Jul’10, we opine that a policy move is unlikely to be pushed that far out,” said an Ambit Research report.
Reliance Communications (4.65%), Reliance Infrastructure (4.04%), ONGC (3.19%), Tata Motors (2.35%) and Reliance Industries (2.33%) were amongst the top Sensex gainers.
Reliance Communications on Sunday announced a deal that would see its tower business combine with smaller rival GTL Infrastructure to create what it claimed would be the world’s largest independent telecom tower company with an enterprise value of Rs 50,000 crore and 80,000 towers. The GTL Infra-RCOM deal is one of the biggest domestic M&A deals.
Pemex and Reliance Industries may soon forge a partnership to develop a large-capacity greenfield refinery in Mexico. The 300,000-barrels-a-day refinery will largely meet the domestic energy requirements of Mexico.
Shares of oil marketing companies have gained momentum since the government announced hike in fuel prices. According to Emkay Global Financial Services, the recent announcements and actions by the government to partially deregulate and hike price have shown incremental upside on earnings of OMC’s.
“Implementations of a partial de-regulation have set in motion the process of re-rating of the oil marketing companies. With policy initiative being a strong rating trigger for the OMC’s, the recent event is likely to help OMC’s regain their historic peak valuation of 1-year forward P/BV of 2x.
We maintain buy rating on the IOCL, BPCL and HPCL with the target price of Rs 392 (1.4x FY12E BV of Rs.286), Rs 675 (1.3x FY12E BV of Rs.514) and Rs 515 (1.3x FY12E BV of Rs 442) respectively,” the report said.
IOC gained 5.20 per cent, BPCL advanced 3.04 per cent and HPCL looked up 7.66 per cent
ITC (-1.52%), Jindal Steel (-0.82%) Hero Honda (-0.18%), HUL (-0.17%) and Maruti Suzuki (-0.08%) were the major index losers.
Market breadth was positive on the BSE with 922 gainers and 384 declines.
European markets held on to morning gains led by banks and US stock futures indicated a positive start. At 5 pm IST, Dow Jones futures was up 0.19 per cent, Nasdaq edged 0.34 per cent higher and S&P 500 advanced 0.28 per cent.
Source http://economictimes.indiatimes.com/RIL-ONGC-fuel-Sensex-RCom-supports/articleshow/6102208.cms
Indices opened on a firm note despite mixed cues from Asian markets. Sustained buying activity in Reliance Industries, Reliance Communications and ONGC helped the benchmarks to gain moment as the session progressed.
Bombay Stock Exchange’s Sensex closed at 17774.26, up 199.73 points or 1.14 per cent. The index touched a high of 17794.80 and low of 17571.85 in today’s trade.
National Stock Exchange’s Nifty ended at 5333.50, up 64.45 points or 1.22 per cent. The broader index hit intra-day high of 5339.45 and low of 5270.75.
“Market is likely to trade in a range of 5250 to 5350 levels in coming days in the absence of any directional trigger, whereas a range breakout on either side may give further direction to the market.
If S&P CNX Nifty sustains above 5320 levels then further up move may be seen in the market towards 5350-5380 levels. On downside if it stays below 5280 levels then selling pressure may intensify and Nifty may test 5250-5220,” said Anand Rathi’s weekly technical report.
BSE Midcap Index was up 1.14 per cent and BSE Smallcap Index moved 1.10 per cent higher.
Amongst the sectoral indices, BSE Oil&gas Index gained 2.29 per cent, BSE Realty Index advanced 2.15 per cent and BSE Power Index moved up 1.94 per cent.
In the coming sessions, concern of rising inflation due to fuel price hike and impact of monsoon are likely to guide the market.
According to India Meteorological Department, the cumulative rainfall till the week ended June 23, 2010 stood at 11.1% below Long Period Average. The rainfall for the week ended June 23, 2010 stood at 21.2% below normal.
“We expect headline inflation to peak towards the end of Jul’10 and begin descending towards the 7% levels by Nov’10. Our assumptions are based on our in-house view that crude is likely to remain range bound with an upper-end level of $80/bbl.
While we had been expecting a 75bps monetary tightening in policy rates during the rest of FY11E (repo at 6%), we believe that the fuel price deregulation might force the RBI’s hands sooner than anticipated. Although the RBI is slated to announce its First Quarter Review of the Monetary Policy on 27th Jul’10, we opine that a policy move is unlikely to be pushed that far out,” said an Ambit Research report.
Reliance Communications (4.65%), Reliance Infrastructure (4.04%), ONGC (3.19%), Tata Motors (2.35%) and Reliance Industries (2.33%) were amongst the top Sensex gainers.
Reliance Communications on Sunday announced a deal that would see its tower business combine with smaller rival GTL Infrastructure to create what it claimed would be the world’s largest independent telecom tower company with an enterprise value of Rs 50,000 crore and 80,000 towers. The GTL Infra-RCOM deal is one of the biggest domestic M&A deals.
Pemex and Reliance Industries may soon forge a partnership to develop a large-capacity greenfield refinery in Mexico. The 300,000-barrels-a-day refinery will largely meet the domestic energy requirements of Mexico.
Shares of oil marketing companies have gained momentum since the government announced hike in fuel prices. According to Emkay Global Financial Services, the recent announcements and actions by the government to partially deregulate and hike price have shown incremental upside on earnings of OMC’s.
“Implementations of a partial de-regulation have set in motion the process of re-rating of the oil marketing companies. With policy initiative being a strong rating trigger for the OMC’s, the recent event is likely to help OMC’s regain their historic peak valuation of 1-year forward P/BV of 2x.
We maintain buy rating on the IOCL, BPCL and HPCL with the target price of Rs 392 (1.4x FY12E BV of Rs.286), Rs 675 (1.3x FY12E BV of Rs.514) and Rs 515 (1.3x FY12E BV of Rs 442) respectively,” the report said.
IOC gained 5.20 per cent, BPCL advanced 3.04 per cent and HPCL looked up 7.66 per cent
ITC (-1.52%), Jindal Steel (-0.82%) Hero Honda (-0.18%), HUL (-0.17%) and Maruti Suzuki (-0.08%) were the major index losers.
Market breadth was positive on the BSE with 922 gainers and 384 declines.
European markets held on to morning gains led by banks and US stock futures indicated a positive start. At 5 pm IST, Dow Jones futures was up 0.19 per cent, Nasdaq edged 0.34 per cent higher and S&P 500 advanced 0.28 per cent.
Source http://economictimes.indiatimes.com/RIL-ONGC-fuel-Sensex-RCom-supports/articleshow/6102208.cms
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