Tuesday 14 July 2015

Sensex up 200 pts; Tata Motors rebounds, Reliance leads-- 15 July 2015

Reliance Industries, TCS, ONGC, Tata Motors, Mahindra & Mahindra and Wipro climbed 1-1.8 percent.

The reason behind the fall and rise in oil prices yesterday, according to Miswin Mahesh of Barclays, is the fact that the Iranian nuclear agreement still needs to be approved within the Congress in the US. They have 60 days to do that. Despite US President Barack Obama firm statement that he will veto any opposition to it, it is still important. Secondly, even after the Congress approval in September, actual oil from Iran will hit the market only in the fourth quarter. There are also a few other roadblocks to go through in terms of Iranian oil hitting the market. The first tranche that would hit the market would be the 40 million barrels of oil Iran has on oil tankers, says Mahesh. This will hit the market first after the European insurance sanctions are removed on tanker shipments, he told CNBC-TV18. Iran has the fifth largest oil reserves in the world. Despite the fact that Iran will be opening its oil sector to foreign companies, oil contracts will play a key role here, he says. While foreign companies are extremely keen to go to Iran, a lot will depend on how attractive it will be for major oil companies around the world to go to there and start rejuvenating the oil fields, he adds.
The market gained strength after a day of consolidation, rising 0.8 percent led by broadbased buying. The Sensex climbed 217.44 points to 28150.34 and the Nifty rose 57.10 points to 8511.20. The BSE Midcap index advanced 0.5 percent and Smallcap jumped 0.8 percent. Nearly three shares advanced for every share falling on the Bombay Stock Exchange. Maruti Suzuki rallied more than 2 percent to touch a new high of Rs 4,138.45. Brokerage Credit Suisse has maintained outperform rating on the stock and raised target price to Rs Rs 5,100 from Rs 4,370 earlier (implying 26 percent potential upside), citing higher volume growth going ahead and likely addition in MSCI index. Reliance Industries, TCS, ONGC, Tata Motors, Mahindra & Mahindra and Wipro climbed 1-1.8 percent.
 
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