Wednesday, 3 September 2014

Nifty holds 8100; Bharti gains 3%, Tata Motors up 2%

 9:25 AM :Nifty holds 8100; Bharti gains 3%, Tata Motors up 2%

The market continues its uptrend for another day. The Sensex is up 85.35 points at 27104.74, and the Nifty is up 27.80 points at 8110.85. About 533 shares have advanced, 94 shares declined, and 22 shares are unchanged.

Tata Motors, NTPC, Tata Power, HDFC and GAIL are top gainers in the Sensex. Among the losers are Hindalco, Coal India, Bharti Airtel and Dr Reddy's Labs.

The Indian rupee gained marginally in the early trade. It has opened at 60.63 per dollar versus previous day's closing value of 60.68 a dollar.The dollar hovered at 14-month highs against a basket of major currencies early on Wednesday, underpinned by upbeat US data and further supported by a sell-off in the yen and sterling.

In the US, markets closed mixed with the S&P 500 holding above 2,000 after rising to another intraday record, as energy companies dropped along with the price of oil and investors fretted whether the European Central Bank would make further monetary policy moves this week. European shares slipped to close marginally lower, as investors monitored events in eastern Ukraine and reacted to economic data from the region.

In other asset classes, Brent crude slipped to a 16-month low, falling 2.5 percent to just above USD 100 per barrel while US crude hit a 7-month low. With the dollar index at a 14-month high, a strong dollar and the prospect of slowing oil demand were seen as the key reasons for the fall. Gold too was at its lowest level since mid-July, breaking through key support as the dollar hit a one-year high against the euro.

Morgan Stanley has upgraded its June 2015 target for the Sensex to 28800 after the recent rally, says managing director, Ridham Desai. However, that’s his conservative estimate.

Desai expects the Sensex to rally as high as 33900, but with some conditions: if the government continues to work on it fiscal consolidation path and the Fed doesn’t take any disruptive policy action. If these two conditions are met, then Desai says, the Sensex has about 40 percent chance of seeing this level by June 2015.

A 360-degree turnaround in sentiment regarding India, apart from institutional flows has led to this market rally. And a lot of it has to be credited to the government, believes Desai. “People abroad have faith in the potency and execution of the new govt. They are sending the right signals. The Goldilock-like scenario that is unfolding, both on the macros as well as the micros, will change for sure, but we are fairly comfortable for the next three years atleast,” says Desai.

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