Sensex below 28000, Nifty ends at 8632; Idea Cellular top gainer

23 Aug 2016

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3:30 pm Market Closing: Equity benchmarks as well as broader markets remained in a consolidation mode for the second consecutive day. The Sensex was up 4.67 points at 27990.21 and the Nifty up 3.45 points at 8632.60.

Technology and telecom stocks gained strength whereas FMCG, infra and auto stocks were under pressure.

Idea Cellular surged nearly 7 percent on hopes of merger with Vodafone.

Tata Power shed more than 3 percent after reporting a 76 percent degrowth in Q1 profit on account of one-time loss.

3:05 pm IPO: The Rs 1,200 crore public issue of RBL Bank, erstwhile Ratnakar Bank, has received overwhelming response from investors as it already received bids for Rs 37,897 crore worth of shares on last day of subscription.

The issue has oversubscribed 44.44 times as the IPO received bids for 168.4 crore equity shares against the total issue size of 3.79 crore shares (excluding anchor investors' portion), according to the latest data available on the exchange (15:00 hours IST).

The reserved portion of qualified institutional buyers (QIBs) is oversubscribed 72 times while the non-institutional investors' portion subscribed 98 times. The quota reserved for retail investors saw oversubscription of 5 times.

RBL Bank is the first private sector lender came out with initial public offering in a decade.

2:40 pm: Big merger?: Idea Cellular and Vodafone are in exploratory talks for a possible merger, reports CNBC-TV18 quoting unnamed sources.

Idea and Vodafone merger may breach 50 perncet market share in few circles and will create India's largest telecom company.

Regulatory approvals are crucial for Idea and Vodafone potential merger, say sources.

Vodafone India may not need to bring in its IPO if it seals a deal with Idea. Idea shares surged 5 percent.

2:20 pm Infosys SEZ: The Centre has rejected a proposal of software major Infosys to set up an IT special economic zone (SEZ) in West Bengal due to lack of state's recommendation.

The decision was taken in a meeting of the Board of Approval (BoA), headed by Commerce Secretary Rita Teaotia, on August 12.

"After deliberations, the board rejected the proposal due to lack of recommendation from the state government," the minutes of the BoA meeting said.

Infosys had proposed to set up IT-ITeS SEZ over an area of 20.14 hectares in South 24 Parganas.

The state government's recommendation is important to get approvals from the BoA. On the other hand, the BoA approved four new proposals to set up SEZs.

2:00 pm Market Check
Equity benchmarks extended losses amid consolidation in afternoon trade with the Nifty breaching 8600 level, dragged by ITC, L&T, ICICI Bank, HDFC and Reliance Industries.

The Sensex fell 85.51 points to 27900.03 and the Nifty slipped 37.20 points to 8591.95. About 1326 shares declined against 1211 advancing shares on the BSE.

Railways increased freight rates by upto 19 percent. Star Cement said that will impact cement and freight rates. UltraTech Cement, ACC and JSW Steel declined over a percent.

BHEL extended sell-off, down 4.4 percent as Macquarie has retained its underperform rating on the stock with a target price of Rs 79.

The brokerage house says the stock has held up on hopes of turnaround in orders & earnings but there is likelihood of scrapping of large tender by NTPC where the company was L1. It expects BHEL to return to meaningful profit only in FY19.

European stocks extended gains, buoyed by data which showed that the euro zone economy had yet to feel a negative impact from the 'Brexit' vote. The pan-European STOXX 600 was up 0.8 percent.

Markets in wait-and-see mode ahead of a speech on Friday by US Federal Reserve chair Janet Yellen at Jackson Hole and clues about the timing of the next US interest rate hike.

1:20 pm Market Outlook: Above normal monsoon and a favourable base effect will boost earnings growth in the second half of current fiscal, says TVF Capital Advisors' founder Shiv Puri. He expects healthy earnings growth in the auto, cement and consumer durables sectors.

Earnings will also benefit from a boom in the rural economy after good monsoons, leading to higher tractor sales.

Despite macro stability and improvement in earnings growth, markets could face volitility in September, he says. The volatility, he says, is a global event and happens almost every year in September.

1:00 pm Market Check
The market has been in a narrow range of 8600-8670 from last week, especially after pricing in all key events. Investors waited for the speech by US Federal Reserve Janet Yellen at Jackson Hole on Friday and expiry of August Nifty derivative contracts on Thursday.

The 30-share BSE Sensex was down 52.42 points at 27933.12 and the 50-share Nifty slipped 15.85 points to 8613.30. About 1274 shares advanced against 1172 declining shares on the BSE.

Tata Power shares fell nearly 2 percent after the company reported one-time loss of Rs 312 crore in Q1 that resulted in sharp profit fall on yearly basis.

Infosys and TCS continued to be strong, up 1.5 percent each.

12:55 pm FIIs investment: FIIs on Monday were sellers for the first time last 29 consecutive trading sessions. They sold around Rs 300 crore worth of shares yesterday after more than Rs 19,600 crore worth of buying in previous 28 sessions.

Some profit booking is warranted as they have been pumping in money in India since March. From March to August, FIIs purchased more than Rs 54,000 crore worth of shares while the Sensex rallied nearly 22 percent.

12:40 pm Europe Update: European stocks opened slightly higher with markets in wait and see mode ahead of a speech on Friday by Federal Reserve chair Janet Yellen at Jackson Hole that could give clues about the timing of a US interest rate hike.

The pan-European STOXX 600 was up 0.37 percent in early trade.

Tentative trade in Asia, where major indices were mixed, wasn't carried into Europe sentiment was more positive amid a lack of earnings and major data releases which is causing investors to pause for breath.

12:20 pm Interview: Adani Ports  is targetting a fourfold increase in capacity to 100 milion tonnes at its Dhamra port over the next four years, GJ Rao, Director, Adani Ports told CNBC-TV18.

Adani's Ennore and Vizhinjam ports are currently under construction and will start operations in October and December respectively, Rao said. It currently has 8 operating ports.

Adani is also one of the pre-qualified bidders in Bhavanapadu Port in Andhra Pradesh, he said.

12:00 pm Market Check
Consolidation continued for the second consecutive day due to lack of triggers. Globally investors waited for Federal Reserve Chief Janet Yellen's speech at Jackson Hole.

The 30-share BSE Sensex was down 17.62 points at 27967.92 and the 50-share NSE Nifty fell 5.90 points to 8623.25. About 1241 shares advanced against 1137 declining shares on the BSE.

HPCL, Indraprastha Gas, SBI, HDFC, ONGC, Glenmark Pharma, Infosys and India Cements were most active shares.

Oil prices fell, with Goldman Sachs warning that August's price rally had been overdone and that a proposed oil production freeze at current near-record levels would not help rein in an oversupplied market. International Brent crude oil futures were trading at USD 48.83 per barrel, down 0.67 percent, from their last close.

US West Texas Intermediate (WTI) crude was down 0.86 percent at USD 47.00 per barrel.

11:40 am Oil Update: Oil prices fell as analysts including Goldman Sachs warned that August's price rally had been overdone, and that a proposed oil production freeze at current near record levels would not help rein in an oversupplied market.

International Brent crude oil futures were trading at USD 48.75 per barrel, down 0.83 percent from their last close.

US West Texas Intermediate (WTI) crude was down 1.03 percent at USD 46.92 per barrel.

11:20 am Interview: Nestle's two-minute noodles brand Maggi which found itself in the eye of a storm last year has bounced back strongly gaining 57 percent market share in June, within 9 months of relaunch. It has also regained its leadership position in the instant noodles segment on the back of strong marketing campaigns and introduction of new variants, according to Nestle management.

Since relaunch in November 2015, Maggi sales have seen a 70-80 percent growth which has been a culmination of efforts of the management and employees and the best is yet to come, Suresh Narayanan, Chairman and Managing Director, Nestle India told CNBC-TV18.

Narayanan said the company has added 25 new products in the past two months, adding that the second half of calendar year 2016 will see a much better performance on account of growth in existing and new products.

11:00 am Market Check
Equity benchmarks remained rangebound with the Nifty moving in a 25 points range ahead of expiry of derivative contracts due on Thursday. Technology stocks continued to support the market whereas FMCG, infra, healthcare and select banks stocks were under pressure.

The 30-share BSE Sensex was down 28.04 points at 27957.50 and the 50-share NSE Nifty fell 6.85 points to 8622.30. About 1182 shares advanced against 1060 declining shares on the BSE.

Infosys and TCS topped the buying list on Sensex, up around 2 percent whereas ITC, ICICI Bank, L&T, SBI, Bajaj Auto and BHEL were down 1-3 percent.

10:35 am Poll: Aurobindo Pharma's profit in April-June quarter may jump 29.6 percent year-on-year to Rs 560.3 crore and revenue is seen rising 15 percent to Rs 3,810.7 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is likely to surge 24.1 percent to Rs 899.2 crore and margin may expand 180 basis points to 23.6 percent on yearly basis.

10:20 am BSE to drop TCI: Top bourse BSE has decided to drop Transport Corporation of India (TCI) from its indices from August 26, as the logistics firm is demerging its express distribution business into a wholly-owned subsidiary.

TCI would be shifted out of S&P BSE 500, S&P BSE AllCap, S&P BSE Industrials, S&P BSE MidSmallCap and S&P BSE SmallCap.

The company would be replaced by Infibeam Incorporation on S&P BSE 500 from August 26.

"Transport Corporation of India is demerging its express distribution business effective August 26, 2016," BSE said in a statement.

10:00 am Market Check
Equity benchmarks continued to trade in a tight range ahead of expiry of August derivative contracts and speech of Federal Reserve Chief Janet Yellen at Jackson Hole.

The Sensex was up 16.74 points at 28002.28 and the Nifty gained 6.10 points at 8635.25. The market breadth was positive as about 1113 shares advanced against 726 declining shares on the BSE.

Shriram EPC shares gained 20 percent after its subsidiary Shriram EPC FZE, Sharjah has bagged an order worth USD 230 million (Rs 1,530 crore) from Moon Iron & Steel Co (MISCO), Oman.

Fortis Malar rallied 20 percent for the second consecutive session after Fortis Healthcare decided to demerge diagnostic business and that will be merged with Fortis Malar.

9:35 am Goldman on oil: Goldman Sachs isn't getting too excited about the rally in oil.

Crude oil prices have risen 15 percent since the start of August on speculation of a reduction in output by OPEC members as well the weakening of the greenback that has boosted demand for oil, which is traded internationally in dollars.

Still, the investment bank reckons that the recovery remains fragile due to signs that disruptions in Nigeria, Iraq and Libya are easing.

"While oil prices have rebounded sharply since August 1, we believe this move has not been driven by incrementally better oil fundamentals, but instead by headlines around a potential output freeze as well as a sharp weakening of the dollar," Goldman analysts wrote.

Goldman is sticking to its forecast of USD 45-USD 50 per barrel forecast for Brent crude oil though next summer.

9:15 am Market Check
The market was marginally lower in early trade with the Sensex struggling below 28000 level amid consolidation. Investors waited for speech by the Federal Reserve Chief Janet Yellen at Jackson Hole.

The Sensex was down 32.64 points at 27952.90 and the Nifty declined 16.20 points at 8612.95.

NTPC and HPCL fell 1-2 percent after first quarter earnings announced yesterday evening.

HDFC, Reliance Industries, L&T, Lupin and Sun Pharma were under pressure whereas Infosys, Asian Paints, Adani Ports, TCS and Wipro gained.

The Indian rupee has opened higher by 7 paise at 67.12 per dollar against previous close of 67.19 a dollar.

Ashutosh Raina of HDFC Bank says the market attention is fully focused on Fed Chief Janet Yellen's Jackson Hole speech this weekend, after some hawkish comments from Fed speakers have increased the probability of Fed hiking interest rates earlier than anticipated.

He expects the USD-INR pair to trade in the 67-67.50/dollar range in the near term.

The dollar stopped its advance against major currencies on hesitation ahead of a speech from the Fed chair on Friday.

Asian markets were mixed with the Japan's Nikkei and Hong Kong's Hang Seng falling over 0.3 percent whereas China's Shanghai gained 0.2 percent.

US stocks were little changed on Monday as a drop in oil prices that weighed on the energy sector was offset with a strong showing by biotech stocks.

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