Sensex inches towards 27000; HDFC twins, pharma lead

Moneycontrol Bureau

12:40pm Telecom stocks on buyers' radar

Investors continued to buy shares of telecom stocks on Tuesday on reports that the Narendra Modi government is planning a new super regulator for the communications sector.

New regulator will be called as Communications Commission, which may replace Telecom Regulatory Authority of India (TRAI), sources told CNBC-TV18.

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) may also get replaced by Communications Appellate Tribunal, sources add.

The scrip of Bharti Airtel rose 3.55 percent to Rs 389.30 and Idea Cellular climbed 4.06 percent to Rs 174.20 while Reliance Communications was up 2.08 percent at Rs 120.45 and Tata Teleservices (Maharashtra) advanced 1.15 percent to Rs 11.39 on the Bombay Stock Exchange.

12:20pm Auto sales to see strong growth?

The festive season that started with Ganesh Chaturthi will augur well for the slacking automotive sector, believe industry experts Ajay Shethiya, Auto Analyst at Centrum Broking and Sundeep Kumar Bafna, MD of Fortpoint.

Speaking to CNBC-TV18 on their expectations for the upcoming days, Bafna says most dealers have stocked themselves to the brim to cater to the festive demand. He expects the demand pick up seen in August to continue in September too.

Auto sales have seen a significant pick up in August. Auto majors Maruti Suzuki, Honda Cars, Hyundai and Nissan reported healthy growth in domestic sales and two-wheeler maker Hero Motocorp sold 5,58,609 units of two-wheelers in August, registering growth of 21 percent over the corresponding month of previous year.

Shethiya expects this pick up to continue resulting in a better H2FY15. He believes the trend in auto sector is reversing as every cycle last for four years and we are already in the third year of the slowdown. 

12:00pm Equity benchmarks remained in positive terrain in noon trade with the Sensex inching towards 27000 level supported by HDFC twins, healthcare, telecom and auto stocks.

The Sensex climbed 110.67 points to 26978.22 and the Nifty jumped 40.05 points to 8067.75. Advancing shares outnumbered declining ones by a ratio of 1648 to 969 on the BSE.

Prabhat Awasthi, Head of Equities & MD, India Nomura Financial Advisory sees Sensex at 30,000 in 12-months time on the back of earnings growth momentum. According to him, there is no reason to become structurally negative on India right now.

Awasthi expects market to re-rate on inflation and growth based tailwinds. In fact, he believes the recent election-led euphoria discounts the expectations of pick up in growth.

Cipla topped the buying list, up nearly 7 percent on its launch of inhaler Seroflo in Germany, Sweden. This is a significant development for the company as it monetised its respiratory portfolio in the developed market. Bank of America Merrill Lynch and Morgan Stanley expect this to be a USD 150 million opportunity for Cipla while Nomura increased target price to Rs 569 from Rs 439.

Sun Pharma and Ranbaxy Labs gained 3-3.5 percent after sources said Drug Controller General Of India (DCGI) reinstated European Union export licence to Ranbaxy's Toansa unit. DCGI had suspended supply from that unit to EU in May.

Housing finance company HDFC and private sector lender HDFC Bank gained 1 percent and 1.8 percent, respectively.