Realty hammered as Sensex falls further; Bharti, SBI losers

20 Mar 2013

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Key benchmarks fell for the fourth successive session Wednesday, as concerns over the continuity of policy reforms and a slowing economy kept buyers at bay. The 30-share BSE Sensex fell 123.91 points to close at 18884.19. With this, the index has shed 686 points in the last four sessions.

The 50-share Nifty closed at 5694.40, down 51.55 points over its previous close. The index has fallen 214 points in the last four sessions.

The fall was far more bruising in midcaps and small caps, which have been hit by a renewed wave of sell-off over the last week.

A slowdown in foreign fund flows and dismal corporate earnings had already reined in the upsurge in stock prices of late; the latest bout of political uncertainty has deepened the sense of gloom.

''We do not see any immediate threat to the stability of the Government at the Centre but note that political uncertainty may make the reforms process more difficult,'' Kotak Securities wrote in its note to clients.

Bharti Airtel led losers among frontline shares following the latest twist in the 2G spectrum allocation case, falling 4 percent. Other key losers included NTPC, ICICI Bank, ONGC and SBI, down 3-4 percent.

''Our cautious stance on Indian equities since late January has been premised on expectations that 1) the slowdown in the economy is sharper than street estimates 2) the window of opportunity for reforms could likely narrow given the substantial election calendar over the next 12-14 months,'' said a strategy note by brokerage house JP Morgan.

Realty shares were the worst performers, with HDIL leading losers. The stock crashed 20 percent after rating agency CARE cut the ratings of the company's bonds.

Opto Circuits, Educomp, Bilcare, Manappuram Finance and Delta Corp were big losers in the midcap space, with the stocks plunging between 10-20 percent.

The RBI cut the benchmark repo rate by 25 basis points on Tuesday, but the market has been indifferent to it.

"We believe policy rate cuts will likely not be effective until we see meaningful deceleration in CPI (consumer price index) inflation and improvement in deposit growth," brokerage house Morgan Stanley wrote in its note to clients.

Equity benchmarks continued to trade lower in afternoon trade, despite positive open for European markets. The Sensex remained below the 19000 level while the Nifty broke the 5700 level.

At 14.50 hours IST, the Sensex was down 139.11 points or 0.73 percent at 18,868.99. Meanwhile, the Nifty fell 54.25 points or 0.94 percent to 5,691.70, weighed down by financials, oil & gas, metals and capital goods stocks.

Reliance Infrastructure topped the selling list on NSE Nifty, falling 8.53 percent. Jaiprakash Associates, ACC, IDFC, Bharti Airtel and SBI were down 4-5 percent.

Larsen & Toubro, Hindalco and NTPC dropped 3 percent.

However, Hindustan Unilever was the top gainer, rising 2.5 percent. Shares of ITC, TCS, Tata Motors and Cipla gained 0.6-1.5 percent.

In the midcap space, HDIL crashed 18.75 percent after CARE cut its rating on company's non-convertible debentures.
 
Manappuram Finance tanked 15.52 percent while Delta Corp, Opto Circuits and CORE Education lost 11-14 percent.

The cuts deepened in afternoon trade as the Nifty fell below 5700, weighed down by political and global uncertainty. Real estate, sugar and infrastructure were weakening the indices.

The Sensex was down 106.56 points at 18901.77, and the Nifty fell 43.35 points at 5702.70.

Midcaps were hurting the most. The index was down 1.6 percent. Unitech (down 6.75 percent), Opto Circuits India (down 8.33 percent) and Shree Renuka Sugars (down 6.4 percent) were the major losers among the midcap stocks.

The other losers on the Sensex were SBI, L&T, NTPC, Maruti Suzuki and BHEL.

HDIL collapsed 17% after rating agency CARE revised downwards the rating of the company's non convertible debentures to 'default'. In a CNBC-TV18 exclusive, sources indicate that HDIL will repay the Rs 150-180 cr debt to PNB by March 31 from the proceeds of Adani transaction.

Meanwhile, gainers on the Sensex included HUL, Cipla, Tata Motors and TCS.

It is a weak session of trade; the Nifty has drifted below 5700 level. At 12.16 hrs IST, the Sensex is down 131.34 points at 18876, and the Nifty fell 52.40 points at 5693. About 609 shares advanced, 1889 shares declined, and 1053 shares remain unchanged.

FMCG major Hindustan Unilever is the top gainer on the Sensex rising almost 2 percent. Broking firm UBS has upgraded HUL to buy from neutral.

It has raised the target price to Rs 540 from Rs 500, citing expectations for a strong business outlook and the prospect of rising volumes for its products.

Cipla, TCS, Hero Motocorp and Sun Pharma are the other gainers.

The midcap index is down over 1.5%. Stock like Unitech, Opto Cirucits, Shree Renuka have fallen more than 5% each. On the flip side, SBI is the top loser on the Sensex, it is down 2.73%. L&T, NTPC and ONGC have also lost 2 percent each.

Paring most of early losses, the Indian rupee is down by three paise at 54.40/USD in the late morning deals.

Globally, it's a mixed session across Asian markets; the Chinese index is up nearly 2%, while Hong Kong is up a percent. Japanese markets are shut today.

Equity benchmarks continue to be weak though they tried to pull back after finance minister P Chidambaram and parliamentary affairs minister Kamal Nath held a press conference to assure that the government was not under any threat after DMK pullout; and that it has always stood for the rights of the Tamils.

Despite the message, which sent out positive signal briefly, the market remained nervous. The 30-share was down 46.56 points at 18961.54, and the Nifty was trading 22.35 points lower at 5723.55. Asian markets were trading mixed.

The indices saw some support from FMCG, Pharma and metal companies with HUL, ruling at the top with 2 percent gains. Among pharma companies, Cipla, Lupin and Sun Pharma were up 1.7 percent, 1.5 percent and 1 percent, respectively while metal stocks like Sterlite and Sesa Goa were up over 1 percent.

NTPC lost 2.74 percent on poor response from government's discom restructuring plan. Power Minister Jyotiraditya Scindia said eight states are on board for the scheme. These states account for Rs 1.5 lakh crore of accumulated losses, much lower than Rs 1.9 lakh crore the bailout scheme had hoped for.

In midcaps, mayhem was widespread. Besides Manappuram (down 11 percent), stocks that were bleeding include HDIL (-12.25 percent), Core Education (-6 percent) and Opto Circuit (-6.2 percent).

It was lacklustre trading session after market opened on a sluggish note reeling under political pressure of Tuesday. The Sensex slipped 9.45 points at 18998.65 while the Nifty fell 10.20 points at 5735.75.

ONGC, NTPC, HDFC Bank, M&M and Maruti Suzuki continued to be laggards on the Sensex. Biggest loser of the day, Manappuram Finance was still down 10.11 percent at Rs 24.90 on the Sensex.

Sugar stocks were also quickly losing investors' confidence as the cabinet panel has deferred decision on sugar decontrol. Balrampur Chini, Shree Renuka and Bajaj Hindusthan were down over 2.2 percent each.

On the gaining side were HUL, Sterlite, Cipla, BHEL and Bajaj Auto.

Another big mover was Globus Spirits which was up 12.94 percent, the company has allotted 4.75 percent Cumulative Compulsorily Convertible Preference Shares (CCCPS) at Rs 140 to Templeton Strategic Emerging Markets Fund. "The company is going to use Rs 70 crore for business expansion," the management said in an interview to CNBC-TV18.

India continues to underperform following a combination of events at home and around the globe. The passing of the food security bill amid a serious  political crisis, sparked by the pull out of DMK, an UPA ally, have hardly soothed investor nerves.

The 30-share BSE benchmark Sensex quickly slipped into the red after opening in green. At 09.16 AM, the Sensex fell 26.64 points at 18981.46, and the Nifty slipped 4.75 points at 5741.20. The INR opened at 54.53.

Midcaps have opened weak as well. Manappuram fell 10.3 percent after losing big on Tuesday.

Other losers on the Sensex included M&M, L&T and Maruti Suzuki shedding around 1 percent each. Sugar stocks were also quickly losing investors' confidence as the cabinet panel has deferred decision on sugar decontrol. Balrampur Chini, Shree Renuka and Bajaj Hindusthan were down over 2.2 percent each.

Biggest gainers on the Sensex were Cipla, HDFC, HUL, TCS and ITC.

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