On Wednesday sensex were trading nearly 2 percent higher, extending gains for the third straight session mainly led by gains in banking, financial and metal sectors. Meanwhile, IT and FMCG indices also supported the markets while the auto index was in the red.
Sensex Surges 1000 Points Today
IFCI, IIFL Finance, Piramal Ent, IDFC First Bank, L&T Finance, Magma Fincorp, Indusind Bank, Tata Steel, Adani Ports, Grasim, Tata Motors, Hindalco, JSW Steel, and UPL hit their respective 52-week highs in trade today. Tata Power has seen a steady 10 percent upmove in the last 10 days, outperforming the benchmarks like NSE 500 for that matter, backed by good volumes.
In terms of key support, it’s 20-day exponential moving average (EMA) is at Rs 90.8 — 10 percent from its current market levels that is 100 per share. Remember, this is a 3-year high; Tata Power still hasn’t gone to its fresh life high.
So watch out for that. However, the strides it has made in its distribution and renewals business is helping. Also, the deleveraging part has come into play in favour of the company as has been the case for many other power companies in the past. Deven Choksey of KRChoksey Securities believes there is a reason to remain bullish in the housing finance companies (HFCs) space. He thinks the demand for newer houses will pick up.
“We are having a cheaper cost of funds. The developments are happening into the economy as a result of which the buyer is coming into the market. I would think that demand for newer houses will gradually pick up. I think it is a good space to be into as far as investment is concerned. I feel safer investing in HFCs than investing money in real estate companies. We will remain bullish. This is a space, which should do wonders in next three-five years,” he said.
Suresh Ganapathy of Macquarie Capital Securities feels that valuations of most banks are not expensive, despite the recent rally in these stocks. “If you were to look at the valuations of these banks relative to historic average, they are still at best around historic averages,” Ganapathy said in an interview to CNBC-TV18. “In some cases like State Bank of India (SBI), they are still below historic averages. Therefore there is still enough upside left in the financial space because I think the next five years is going to be one of the best years for the entire financial sector,” he said. According to him, there is still a lot of room for rerating for financial sector looking at their valuations relative to other sectors.