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Markets cheer upbeat corporate earnings

By Purva Chitnis
Last updated on: February 05, 2016 17:13 IST
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The S&P BSE Sensex ended higher by 278 points to end at 24,617 while Nifty50 settled down at 7,489, up by 85 points after hitting the psychological mark of 7,500 during intraday.

Markets ended higher for the second straight session mainly on the back of upbeat corporate earnings. 

The broad based buying across the board on account of stabilization in oil prices also aided the rally.

The S&P BSE Sensex ended higher by 278 points to end at 24,617 while Nifty50 settled down at 7,489, up by 85 points after hitting the psychological mark of 7,500 during intraday.

The broader markets also fell in line with their larger peers with BSE Midcap and Smallcap indices finishing up between 1.2-1.9%.

Globally, Asian markets finished on a mixed note in anticipation of the US jobs data that can provide some clues to the US Federal’s next monetary policy review.

The US dollar is trading weak ahead of the jobs data. Japan’s Nikkei and China’s Shanghai Composite finished down between 0.6-1.4% each while Hang Seng ended 0.5% higher. 

European equities are trading in green following the global cues with major indices trading between 0.1-0.5% each.

The weak dollar arrested the downfall in crude oil prices as US crude was trading marginally up by 0.2% at $31.79/barrel.

In a crucial announcement, the Reserve Bank of India (RBI) Deputy Governor H R Khan said the apex is open to regulatory changes so as to give a boost to investment in infrastructure sector.

Further, chief economic advisor, Arvind Subramanian said that low global commodity prices is a plus for India infra investment.

RESULT IMPACT

Most of the companies that announced their corporate earnings result for the December quarter today have surpassed the Street’s expectations.

Lupin zoomed 9%, bouncing back 10% from intra-day low on the BSE, after the company reported better-than-expected net profit of Rs 530 crore against an average analysts’ estimates of Rs 475 crore for the quarter ended December 2015 (Q3FY16).

Eicher Motors rallied 7% to Rs 18,128 on the BSE after the company reported a better than expected consolidated net profit of Rs 271 crore for the fourth quarter ended December 31, 2015 (Q4) on the back of strong net sales despite the production getting affected by the floods in Chennai. 

Cadila Healthcare registered 38% increase in consolidated net profit at Rs 390 crore for the third quarter on the back of robust sales in the US market. The stock ended with gains over 4%

Berger Paints India moved higher by 4% to Rs 279, also its lifetime high on the BSE, after the company reported a strong 38% year on year (YoY) jump in net profit at Rs 101 crore for the third quarter ended December 31, 2015 (Q3FY16) on back of strong operational performance and lower finance cost.

The company posted a profit of Rs 73 crore in the same quarter last fiscal.

KEY STOCKS

Tata Motors finished 3.5% higher. The autocar maker unveiled three cars at the Auto Expo namely Compact sedan codenamed Kite 5, compact SUV Nexon and lifestyle SUV Hexa.

In a major turnaround, Tata Steel rebounded and finished 3.5% up after hitting a low of Rs 215 on the BSE.

The company reported a loss of Rs 2,127 crore in the quarter ended December 2015, against a profit of Rs 157 crore in the corresponding period in the previous year.

This was mainly because of lower realisations, write-downs taken and restructuring done at its European operations along with employee separation compensation charges taken for the India business.

Coal India gained 1.5% after the government decided to raise about Rs 6,000 crore by getting Coal India to buy back a fourth of its paid-up share capital at a premium.

The banking and financial shares witnessed buying interest in today’s trade. Axis Bank, SBI, ICICI Bank, HDFC twins all finished higher between 0.5-4% each.

In the technology space, the trades were mixed ahead of the US jobs data. Wipro and Infosys dropped 0.2% and 0.4% respectively while TCS ended 0.4% up.

On the flip side, Adani Ports, Maruti Suzuki, GAIL (India) ended down between 1.1-3.1% each.

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Purva Chitnis in Mumbai
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