NEW DELHI: The domestic equity market broke a four-day losing streak and staged a smart comeback on Friday, after a relentless selloff had sliced off over 1,200 points from the benchmark Sensex and dragged it below the psychological 25,000 mark.
That marked a huge relief for investors, who had become nervous in the face of a massive selloff triggered by turmoil in China’s economy and markets.
The S&P BSE Sensex closed at 24,934.33, up 82 points, while NSE’s 50-share barometre Nifty50 closed at 7,601.35, up 33 points.
The rupee was trading at 66.74, down 18 paise against the US dollar.
The market followed cues from its Asian peers, which traded higher as China ditched the circuit breaker mechanism it had introduced earlier this week, and which had halted the market twice in four sessions.
The People’s Bank of China of PBoC also raised its guidance rate for the yuan for the first time in nine trading days, having allowed the currency’s biggest fall in five months on Thursday.
“India will eventually be a beneficiary of the slowdown in China. As long as the US recovers gradually, India will benefit as an economy. Even if our economy does slow down, which it probably may, we will continue to be the best emerging market and attract money by way of FDI as well as FII inflow,” said Killol Pandya, Head-Fixed Income, Peerless Mutual Fund.
On Thursday, the Sensex had tanked 555 points to close at 24,852, while the Nifty50 had settled at 7,568.30, down 172.70 points. Both the indices had touched one-and-a-half-year lows on Thursday.
The gain in the index was led by Tata MotorsBSE 2.99 % (3.00%), ONGC (1.64%), Tata Steel
(1.48%), ITC (1.30%) and Sun Pharma (1.23), while Cipla (2.53%) and L&T (2.38%) were among the big losers.
“Investors should have a very stock-specific approach. Try and buy stocks in a very staggered manner and lookout for names where the earnings trajectory would be far better over the next two to three quarters,” said Mayuresh Joshi, Fund Manager, Angel Broking.
“I think the problem is that China is quite confused because the situation has not been handled so well. When you think about the global situation, fundamentally, there is really nothing new to talk about,” said James Glassman, JPMorgan Chase.
“What is happening in India is very different from what is happening in China. In some ways, there is almost the opposing effect. So China weakening corrects commodities, which is positive for India. There is no logical reason why India needs to come down if China comes down,” said Sumeet Nagar, MD, Malabar Investments.
Among the sectoral indices, power, realty and oil and gas led the gains. China’s CSI300 index closed 2 per cent higher at 3,361.56 points on Friday, while the Shanghai Composite Index rose 2 per cent to 3,186.41 points.
In Europe, the pan-European FTSEurofirst 300 index rose 0.2 per cent but was on course to record its steepest weekly drop since late August. The euro zone’s blue-chip Euro STOXX 50 index was up 0.1 per cent at the time of filing this report.
Brent crude prices rose 75 cents to $34.50 a barrel near an intraday high of $34.72. It was more than $2 higher than Thursday’s close of $32.16, a level last seen in 2004.
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Here is a list of top eleven stocks that are likely to be in focus today:
Wipro Ltd: Days after naming former TCS veteran Abidali Neemuchwala as its new chief executive officer (CEO), India’s third largest software exporter Wipro has named company old-timer Bhanumurthy BM as its new chief operating officer and also assigned new roles to other veterans such as GK Prasanna as part of a newly-unveiled organizational structure, according to three people directly familiar with the developments.
HDFC Ltd: HDFC Capital Advisors, a new arm of India’s largest mortgage lender HDFC, is raising a Rs 5,000-crore fund that will make long-term equity investments in middle-income housing projects across the country.
L&T Ltd: Larsen & Toubro’s hydrocarbon arm, in consortium with US-based engineering company McDermott, has bagged an offshore contract from state-run ONGCB worth Rs 2,450 crores for the development of the latter’s Vashishta and S1 deepwater fields situated off the east coast of India, the Indian engineering major said Thursday.
Bajaj Auto Ltd: Encouraged by the performance of its new CT 100 commuter bike in 2015, which helped India’s largest premium motorcycle maker Bajaj Auto make a comeback, the company has decided to make it more affordable by reducing its price below Rs 35,000.
Reliance Power Ltd: Government has declined Reliance Power’s request to reconsider restrictions on output from its mines in Moher and Moher Amlohri Extension blocks – linked to its Sasan UMPP as the case is in the court.
Axis Bank Ltd: The government is considering diluting its 11.7 per cent stake in Axis Bank it holds through the Specified Undertaking of the Unit Trust of India (SUUTI) to meet shortfall in disinvestment proceeds and revenue collection during the current fiscal.
Videocon Industries Ltd: The Videocon Group’s plans to sell its 4G spectrum to Telenor seem to have run into a glitch, with the Norwegian carrier wanting to buy airwaves in four circles rather than just the two that are on offer, said two people aware of the matter.
IDBI Bank Ltd: The state-owned bank in which the government is looking to pare its stake and bring in strategic investors, on Thursday hired seven banks to help it raise Rs.3,771 crore through a qualified institutional placement (QIP) issuance, said a media report.
Canara Bank: Canara Bank has informed BSE that as per the powers delegated by the Board of the Bank, the Bond Committee has decided to raise Basel III Compliant Tier -II Bonds amounting to Rs. 900 Crore (as Series – II) by way of Private Placement.
Cipla Ltd: India’s third largest drug maker Cipla has created a five member management council, led by CEO Subhanu Saxena as part of its transformation process. This is the fourth of such top level reshuffle that Cipla has carried out in a span of 12 months.
Bharati Shipyard Ltd: The company has informed BSE that the Board of Directors of the Company at its meeting held on January 07, 2016 have approved for issuance and allotment of 26,47,313 convertible warrants at Rs.22 per warrant on preferential basis to M/s. Edelweiss Finance & Investments Limited in compliance with all statutory and relevant regulations.