Markets high on Modi, but wary of hangover
Sensex sniffs 22,000 on pre-poll optimism, CAD comfort; infra, banks lead way
Mar 08, 2014
Source : Business Standard


MUMBAI: Stock market indices jumped to record highs on Friday as foreign institutional investors (FIIs) stepped up purchases of domestic shares, encouraged by stability in the rupee. The Sensex clocked a record for the second straight session while the Nifty surpassed its previous high of December 9 last year. But not everyone on the Street was rejoicing as the rally was led by battered domestic sectors such as banks, real estate and infrastructure, a deviation from the usual leaders such as information technology and pharmaceuticals.
A large section of fund managers, who had cut exposure to these shares to the bare minimum, had to scamper to buy them on Friday despite bleak earnings prospects to avoid underperformance.

Fund managers said heightened hopes of the Narendra Modi-led Bharatiya Janata Party (BJP) forming the next government were driving the frenzy in those shares. Many market participants are unimpressed with the gains of Friday because the rally has not been broad-based, though the general consensus is that further gains are in the offing.

“This is clearly a liquidity-driven rally where the high-beta sectors and stocks that are under-invested in are leading the charge. The market is running ahead of the fundamentals,” said Ritesh Jain, chief investment officer, Tata Asset Management.

The BSE’s Sensex rose 405.92 points or 1.89 per cent to a new closing high of 21,919.79 on Friday after touching 21,960.89. The NSE’s Nifty rose 125.50 points or 1.96 per cent to close at 6,526.65, off its all-time high of 6,537.80.

“The market will scale new highs as the (election) outcome becomes more and more certain. There is going to be a management change in India, that’s something that the market is taking for granted. This optimism is moving the market,” said Raamdeo Agrawal, joint MD, Motilal Oswal Financial Services.

FIIs net-bought shares worth about Rs 2,577 crore on Friday, extending their purchases to the 17th straight trading day. In these 17 days, these investors have poured about Rs 9,500 crore into Indian stocks. Some analysts say a large chunk of the inflows on Friday could have been from global exchange-traded funds (ETFs), which are known to flood the market ahead of key events or when the undertone is optimistic. ETFs usually invest in the Sensex or Nifty as a basket.

Brokers said that could be the reason why the broader market ended weak. Across the BSE, declines outnumbered advances by 1,466 to 1,354. The BSE’s mid- and small-cap indices fell 0.2 per cent each. Another sentiment indicator, the Volatility Index (VIX) — a measure of traders’ expectations of near-term risks in the market — also reflected that a section of the market was uncomfortable with the market rally. The VIX shot up 15.5 per cent to 16.72 on Friday, showing traders were buying options as insurance against any possible fall.

The BSE’s banking and real estate indices soared over 5 per cent each, their highest intra-day gains since September 2013.

“Expectations are high that the next government would be pro-business and revive the country’s investment scenario,” said Jain. The rupee extended its gains for the fourth straight day on the back of dollar flows from FIIs. The currency ended at a three-month high of 61.09 a dollar compared with its previous close of 61.12 a dollar. The rupee had ended at 61.04 a dollar on December 10.

However, the gains were limited due to dollar buying by banks during the market closing hours.

The dollar buying was for meeting the needs of public sector oil marketing companies (OMCs). According to estimates by currency dealers in state-run banks, the dollar demand of these public sector OMCs is in the range of $6-7 billion per month.

Latest Realty News

Real estate players wake up to digital media to boost sales
Mar 08, 2014
AHMEDABAD: From setting up branded YouTube channel that showcase walkthroughs of upcoming projects, to hiring social media marketing firms, real estate players such as Godrej Properties, Tata Housing and Adani are joining the digital media marketing bandwagon in a bid to strengthen sales.
Property rates in Eastern Mumbai District expected to double by 2017
Mar 08, 2014
MUMBAI: Property rates in the Eastern Mumbai District (EMD) which encompasses Karjat, Neral, Shelu and Khopoli are expected to double by 2017, according to Brick Eagle, a financial services platform for affordable housing development in India.
India will have more billionaires than other countries by 2023: Knight Frank
Mar 08, 2014
MUMBAI: Knight Frank today released its 8th edition of the Wealth Report. This yearly issue provides a unique insight into the attitudes of ultra-high-net-worth individuals towards property, investments and spending patterns across the globe and provides an annual analysis of wealth flow and property investment around the world.
Aadhar Housing Finance Forays into Gujarat
Mar 08, 2014
AHMEDABAD: Aadhar Housing Finance Limited (Aadhar), a segment focused housing finance company, today announced the launch of its operations in Gujarat to provide housing finance to the lower income segments (whose monthly income is between Rs 5000 to Rs 25000). The Company currently operates across 7 States namely Madhya Pradesh, Uttar Pradesh, Chhatisgarh, Odisha, Jharkhand, Bihar and West Bengal.
Single women’s home ownership on the rise
Mar 08, 2014
BHOPAL: Gone are the days when investing in real estate was exclusively for men. There is now emergence of single women in the residential space and they constitute the second biggest group of home buyers in India.
Bank licences on course despite polls
Mar 07, 2014
DELHI: Finance Minister P Chidambaram on Wednesday clarified the Reserve Bank of India (RBI) was likely to issue a few bank licences during the remaining term of the incumbent United Progressive Alliance (UPA) government, notwithstanding the model code of conduct that kicked in with announcement of the election schedule.
NPAs rise as slowdown persists
Mar 07, 2014
DELHI: The economic slowdown seems to have helped push the gross non-performing assets (NPAs), or doubtful loans, of public sector banks (PSBs) to 5.17 per cent of their advances by end-December 2013, against 4.18 per cent a year before.
Bad loans expected to be higher this fiscal: FM
Mar 07, 2014
DELHI: Finance Minister P. Chidambaram Wednesday said the Non-Performing Assets (NPAs) or bad loans of the public sector banks are expected to be higher this fiscal, which is a matter of big concern.
Growth in restructured loan book stabilising
Mar 07, 2014
MUMBAI: Kohlberg Kravis Roberts (KKR & Co) and Blackstone Group LP, two of the major private equity (PE) investors in India, are planning to increase their exposure in the country by changing their investment strategy. While Blackstone is doing a lot of real estate investments, KKR says it will focus more on investing in stressed corporates
KKR bets on stress; Blackstone on realty
Mar 07, 2014
MUMBAI: Kohlberg Kravis Roberts (KKR & Co) and Blackstone Group LP, two of the major private equity (PE) investors in India, are planning to increase their exposure in the country by changing their investment strategy. While Blackstone is doing a lot of real estate investments, KKR says it will focus more on investing in stressed corporates.

Latest Realty News Of State

Realty Talk's