Business Today

Narendra Modi effect: How the stocks moved through counting day

After the initial run (till 10:15 am), when the Sensex crossed 25,000-mark, the market has seen profit booking and is currently range bound around 24,700.

Team Money Today | May 16, 2014 | Updated 21:30 IST
LIVE: How the stock market is reacting to election results
Photo: Reuters

15.50 pm: Sensex closes the day with 216.14 points gains at 24,121. Nifty also rises 79.85 points, or 1.12%, to 7,203.

Over 200 scrips, including the heavyweights like Reliance Industries, ONGC, State Bank of India, HDFC Bank, Indian Oil Corporation and ICICI Bank, hit 52-week high on strong buying support from funds. Many of the stocks surged more than 10 per cent in the intra-day.

EXPERT SPEAK: Ninad Karpe, chief executive officer and managing director at Aptech

The BJP manifesto is very holistic and wholesome where vocational education and employment generation is concerned. Skilling the youth and employment generation is a virtuous circle and the manifesto has given enough attention to this element. I believe these two points are what the country needs the maximum today. I also believe the strong mandate given by the people of India to BJP will further bolster the new government to laying emphasis on developing the human skill infrastructure.

The human skill infrastructure involves access and availability of financing, particularly to the under-served, creating an  institutional framework, recognition of skills, improving the quality of present vocational delivery mechanism, social acceptance and interface with the industry for acceptance from the jobs perspective.

3.30 pm: ICICI Securities raise their target price for ONGC and HPCL  stocks to Rs 439 and Rs 428, respectively.

3.24 pm:  Stocks of oil marketing companies rise over 6%. HPCL, BPCL and IOC gained 7.34% to 403.10, 6.39% to Rs 550.05 and 7.28% to Rs 330.

2.54 pm: Banking stocks start losing steam with the BSE Bankex off 5% from its high.

EXPERT SPEAK: Nilesh Shetty, Associate Fund Manager-Equity at Quantum AMC

The strong showing of the BJP has exceeded market expectations driving a strong rally in markets. However, the real economy continues to remain weak and market participants would be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle. Current valuations have already set a high benchmark and any disappointment on policy announcements could lead to a correction, Shetty says.

Murthy Nagarajan, Head-Fixed Income, Quantum AMC

"The poll results are on expected lines. The debt  market is expected to be rangebound with the ten year to trade in the range of 8.60-8.80 levels  and the currency is expected to trade in the range of  Rs 58 to Rs 62 against the dollar in the coming months."

2.47 pm: Around 198 stocks touched their 52-week high on the National Stock Exchange. On the other hand, 29 stocks hit their 52-week low on the exchange at 2:35 pm.

EXPERT SPEAK : Nirakar Pradhan, chief investment officer, Future Generali India Life Insurance

The strong mandate received by NDA this morning is positive for both equity and debt markets. A stable and decisive  government can reengineer Indian growth story through spearheading structural reforms going ahead, and thus increasing foreign investors' interest on India. While a lot of the positives are already factored in by the markets, now everyone will  be watching out for actual steps to be taken by the government starting with the union budget and tax reforms etc. With the likelihood of investment cycle kick-starting soon, investors could look at buying at every fall cyclicals such as banking, cement, capital goods and Oil & Gas.

2.12 pm:
At 2.11 pm, Sensex falls 1,239.62 points from its day high of 25,375.63. Trading at 24,136.01 levels.

2.07 pm: The market took a course correction and it is little above its opening level. Now of the 30 stocks in the Sensex, 12 stocks are in the red and the worst performing stock is Tata Steel (-4.98%) and the best performing stock is Sesa Sterlite Ltd with +7.71%.

1.45 pm: Nifty plunges 110 points in 10 minutes. The NSE index was trading at 7,190 against 7299.70 ten minutes earlier.

1.32 pm: After a long dull period all the stocks of the CNX Realty are in the positve. The index itself is up 6.47%. Oberoi Realty (+2.19%) is the laggard and India Bulls Realty is leading the index with +16.58%

1:30 pm:
In the CNX Pharma which is down (-0.88%) there are only two stocks in the positive region Lupin (+1.14%) and Glaxo (+1.04%). And the worst performing stock is Cadila Healthcare (-3.90%)

1.24 pm: CNX Energy is up by +2.47%. Leading the index is BPCL (+6.69%), IOC (+5.07%) and R power (+4.72%).Meanwhile the laggards are CAIRN (+2.31%), GAIL (+0.49%), ONGC (+0.29%)

1.21 pm:EXPERT SPEAK: Ankit Aggarwal, director, Alankit Group

"With the changing government and clear majority, the market will boom like anything. If the development of the country happens at a faster way, market also has to respond in the same manner. Overall, the market condition should be very good for the investors," he says.

1.20 pm: Defensives like IT, FMCG and Pharma amongst the losers in the index stocks. Dr. Reddys (-2.5%), Infosys (-2.4%), Wipro (-2%), ITC (-1.88%), HUL (-1.4%), Cipla (-1.34%)

1.06 pm: Rupee has appreciated to 58.84 (up 0.45) levels vis a vis the US Dollar today.

According to Naveen Mathur, Associate Director Commodities and Currencies at Angel Broking, this is infact the immediate impact of the elections results and will stabilise at 57-58 levels. Over the medium term i.e. over the next  6 months, Mathur expects the rupee to move to 54-55 to the dollar, subject to expectations being met by the new government.

1:05 pm : Volumes on the BSE within the equity segment has shot-up by 42% to Rs 4,584.46 crores

EXPERT SPEAK: Sankaran  Naren, chief investment officer, ICICI Prudential AMC

He believes the election results 2014 are far ahead of all the exit poll expectations.

"Post 1984, this is the first time a single party is getting almost absolute majority. This is an extremely positive structural move for the potential returns in the equity markets. It is also positive for a drop in interest rates over the next 18 months. Hence, it is extremely important for investors to consider investing in equities. Currently, domestic investors are extremely under-invested in equities and we believe they should allocate to equities even today.  We believe that banking, infrastructure and mid-caps are likely to outperform the large caps, which does not mean that large caps will not be in a position to give returns. With regards to fixed income, investors should consider moving out of all defensive fixed income products to much more aggressive ones."

1:00 pm:
While the CNX FMCG is in the red, despite being a defensive sector. The stocks in the green are Rasoya Proteins (+1.74%); MCDOWELL-N (+1.62); GODREJCP (+1.04); EMAMILTD (+1.41); JUBLFOOD (+1.18); TATAGLOBAL (+0.90); MCLEODRUSS (+0.58);  GSKCONS(+0.16)

12:54 pm : Within the index CNX Bank the worst performing stock is HDFC and even that is in the positive terrain (+5.86%)

12.45 pm: After the initial run (till 10:15 am), when the Sensex crossed 25,000-mark, the market has seen profit booking and is currently range bound around 24,700.

12.32 pm: Small cap majors are doing well. PMC Fincorp, Amtek Auto and PTC India jumped 3.64% to Rs 795, 1.49% to Rs 183.90 and 6.98% to Rs 75.10, respectively.

12.31 pm: A real estate company has also now joined the league, infact heading the gainers list. IndiaBulls up 15.96%.

12.21 pm: IT and Healthcare stocks are looking under pressure. CNX IT and CNX Pharma are down by 0.64% and 0.26%, respectively, against their previous close.

12.02 pm: Volumes in the derivatives segment has gone down. Turnover was Rs 9,453.92 crore on Thursday. Today, it's Rs 1,560.46 crore as of 12.00 pm.

11.56 am: Defensives, that were the darling of the market till now are on the backfoot now. Financial Tech (-4.47%); Oracle Fin (-2.56%); Dr Reddys Lab (-2.41%); Dabur India (-2.08%); Biocon (-1.82%)

11.54 am: Adani and Finance lead the markets: REC (+14.98%); Andhra Bank (+14.01%); Adani Enter (+13.75%); Canara Bank (+13.22%); Power Finance (+13.21%)

11.53 am: In CNX Nifty five stocks are trading in red. Dr Reddy, Tech Mahindra, Cipla, Infosys and Wipro down 2.52%, 0.99%, 0.90%, 0.88% and 0.42%, respectively.

11.45 am: Sensex pares its early gains. It declined 2.28% to 24,785.98 from its level at 10 am.

Taher Badshah, senior VP and co-head of equities Motilal Oswal AMC says, "Markets could pause for a while but have enough legs to move up further over the next few months. We could see much higher action in midcaps from hereon."

11.33 am: EXPERT SPEAK: Killol Pandya, Senior Fund Manager, Debt- LIC Nomura Mutual Fund

"As of now, the results are strongly indicating that NDA is set to form the new government. BJP seems to be having a remarkable run with it leading by itself in more than the half way mark. While the markets (esp the equity market) is cheering on the apparent sweep by NDA, I am more relieved that India has given a consolidated mandate and this will lead to a relatively higher political stability in India... Going ahead, we can hope for decisive action from a strong central government. This may because of cheer to FIIs etc who have been worried about political instability in India. However, the macro economic factors may continue to weigh on sentiment once the election euphoria calms down. With the global geo-political environment being sensitive and domestic factors such as inflation and monsoon worrying investors, investors may do well to contain their enthusiasm and proceed cautiously as of now.

11.04 am: Sensex erases some early gains, trading at 24,859, down from a high of 25,364.

10:55 am: Of the 50 stocks comprising the Nifty HCLTech (-0.76%), DR Reddy (-1.26%), TCS (-1.49%), Infosys (-1.68%), Tech Mahindra (-2.04%) and Wipro (-2.18%) are laggards.

10.42 am: ICICI Bank is currently trading at Rs1523.95, up by Rs 130.85 or 9.39% from its previous closing of Rs 1393.10 on the BSE.

10.30 am: EXPERT SPEAK: Gnanasekar Thiagarajan, Director, Commtrendz

He believes, positive election outcome can impact commodity market in many ways -

1. As Narendra Modi is seen as industry friendly person, he could be favouring industries and interest rate cuts are expected.
2. Since rupee has appreciated strongly and expected to appreciate more, gold import curbs could be removed sooner than expected.

10:28 am: Nifty loses steam, is up only 4.14%

10:25 am: Top 3 losers Financial Tech (-4.22%); Divis Lab (-2.11%) and Infosys (-2.08%)

10.14 am: Banking stocks such as Canara Bank and Indian Bank jumps 20% and 14.32%, respectively, to Rs 400.95 and Rs 82.10. From the sectoral indices, BSE Bankex is among the top performers with 9.39% gain at 17,808.78.

10.10 am: BSE Sensex up 5.32% at 25,176. Other major indices, BSE 100 and BSE 200, up 5.51% and 5.19%, respectively.

10.13 am: Among the sectoral indices, Bank Nifty is leading with 9.85% up followed by CNX Auto 6.02%

10:05 am:EXPERT REACTION: Amar Ambani, Head of Research, IIFL

"Trend seems to suggest that BJP is trending closed to 270 seats, which means they may not have to take any outside support, hence making it an extremely stable proposition and allowing a free hand in policy making... Market participants were expecting a Nifty level of 7200 with a whiff of 7500 amongst a few with positions being built up on the long side at 7800... Given where it is, people may fear the market is overvalued, however a big correction is highly unlikely. In terms of valuations we are still at 14.5x Price to earnings, far from market peak valuations of 21 to 22x PE during a period of euphoria... Nifty could cross 8000- to 8200-levels in the coming few months, which is closer to its fair value and given the kind of verdict we are expecting. Once election dust settles two things will drive the market going forward, how the economy is doing and what is happening to global fund flows."

"PSU Banks have gained a lot more considering a favourable election outcome raises expectations of  greater autonomy for PSU Banks, recapitalisaition as well as divestment hopes. These banks are also trading at extremely cheap valuations i.e. 0.5-0.6 book value with dividened yields of 5-6 per cent."

9:58 am: Defensives on backfoot -- losers of the market. Berger Paints -3.09% ; Financial Tech  -2.11% ; Divis Lab -2.02% ; Dr Reddys Lab -1.35% ; Glenmark Pharma -1.03%

9:52 am: Nifty up  5.44 per cent

9:49 am: Sensex is 5 per cent up

9.36 am: Sensex hits 25000 for the first time its life time high

9.35 am: Anutosh Bose, chief operating officer, LIC Nomura Mutual Fund, says, "'A sturdy government taking steps towards administrative reforms, kick-starting the stalled projects (the so called low hanging fruits) and initiation of a few key infrastructure projects, and we will have investors around the world focusing back on India in hordes."  

9.35 am: Yes Bank up 11 per cent at 581.50, IOC and Power Finance Corp up 10% each at. Share price of Adani Enterprises jumped by Rs 32.05, or 6.51%, to Rs 532.75 against its previous close. Adani Port and Special Economic Zone and Adani Power were also trading 4% and 4.5% higher against their previous close.

9.34 am: Indian Bank up 17 per cent at 163.50

9.33 am: Canara Bank up 22 per cent at 408

9.30 am: Early trends show NDA is likely to form government at the Centre. The key benchmark index Sensex is at 24845.07, up 917.19 points against its previous close. Nifty is at 7403.30, up 280.15 points against its previous close.

9.27 am: Punjab National Bank stocks up 10 per cent at 939

9:20 am: Dr Reddy is the only stock among the 30 forming the SENSEX that is in red (-0.99 per cent)

9:17 am: Yes Bank at 574.90 up +9.85

9.15 am: BSE Sensex hits new record high of 24,930.42, surges 1,024.82 points; Nifty breaches 7,400 for the first time in opening trade



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