BSE Sensex, Nifty end strong; midcap, smallcap outperform

15 Jul 2013

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3:50 pm Market closing: The Sensex ends the day at 20034.48 up 76.01 points while Nifty closes 21.80 points at 6030.80. About 1340 shares have advanced, 958 shares declined, and 145 shares are unchanged. Midcaps and small caps outperform with around 1 percent rally. Hindalco , Sterlite Industires, Bharti Airtel , M&M and TCS are big gainers of the day. Coal India , Infosys , NTPC , Tata Steel and Tata  Power.

3:40 pm Rupee check: The rupee is off lows on some dollar selling by a largeUS bank as well a large state-run bank, dealers say. "A large US bank was selling around 59.90/91 levels," says a senior dealer, reports Reuters.

Local stocks also in positive zone, 0.5 percent higher.

3:35 pm Earnings: Kitchen appliances manufacturer TTK Prestige's first quarter (April-June) net profit slipped by 16 percent year-on-year to Rs 25.8 crore on rise in raw material cost.

Net sales increased marginally to Rs 306.3 crore in April-June quarter from Rs 302.5 crore in corresponding quarter of last fiscal.

Cost of raw materials consumed increased 32.6 percent to Rs 105.28 in June quarter from Rs 79.40 crore in a year ago period.

3:30 pm FII view: The markets overall are now focused on a gentler approach to repricing through tapering but earnings season could be the next big risk says John Woods, MD & Chief Investment Strategist, Citi Private Bank in an interview to CNBC-TV18.

However, he sees limited downside for Asian emerging markets (EMs) and expects some sort of recovery from Q3 onwards. North Asian markets like Taiwan, Hong Kong, Singapore as a function of exports and uptick of growth in United States will see bottoming out first.

3:25 pm Buzzing: National Green Tribunal says that Sterlite's Tuticorin plant can remain open as reports suggest that the Sterlite plant not polluting Tuticorin area. The final order on Sterlite Tuticorin Unit will come soon. The stock is at Rs 91.50, up Rs 3.20, or 3.62 percent on the BSE.

Don't miss: Analysts raise Infosys earnings estimates after strong Q1

The market continues to be volatile in last trading hour of  the day. The Sensex is up 87.58 points at 20046.05, and the Nifty is up 24.45 points at 6033.45. About 1265 shares have advanced, 915 shares declined, and 137 shares are unchanged.

Most of the indices are in the green territory while technology and power stocks are laggards of the day. NTPC, Coal India, Tata Steel, Infosys and Tata Motors are top losers in the Sensex.

Meanwhile, Hindalco, Bharti Airtel, M&M, TCS and Sterlite Industries are gainers.

SpiceJet shares gained nearly 8 percent. The airline company says few investors showed interest in company post FDI clearance and it is too early to comment on equity issuance to interested companies.

Unitech rose 4.6 percent after United Corporate Parks shortlisted 6 bidders for Gurgaon IT SEZ, reports CNBC-TV18 quoting sources.

Unitech has 40 percent stake in Gurgaon IT SEZ. It is learnt that the bid gives IT SEZ enterprise value of Rs 2,750-3,000 crore.

02:45pm SpiceJet shares gained nearly 8 percent. The airline company says few investors showed interest in company post FDI clearance and it is too early to comment on equity issuance to interested companies.

Unitech rose 4.6 percent after United Corporate Parks shortlisted 6 bidders for Gurgaon IT SEZ, reports CNBC-TV18 quoting sources.

Unitech has 40 percent stake in Gurgaon IT SEZ. It is learnt that the bid gives IT SEZ enterprise value of Rs 2,750-3,000 crore.

Also Read - Analysts raise Infosys earnings estimates after strong Q1

02:30pm TTK Prestige shares slipped 5 percent after its first quarter net profit fell 16 percent year-on-year to Rs 25.8 crore and operating profit margin declined 230 basis points to 13.5 percent in April-June quarter as against 15.8 percent in a year ago period.

Also Read - RBI fines 22 banks, warns 7 for KYC violations

02:20pm Equity benchmarks gained marginally in afternoon trade with the Sensex and Nifty holding 20000 and 6000 levels, respectively. European markets too remained positive, rising more than 0.5 percent.

The BSE Sensex is up 66.15 points at 20024.62, and the Nifty is up 16.10 points at 6025.10. The broader markets continued to outperform benchmarks, gaining 0.7 percent.

Advancing shares outnumbered declining ones by 1175 shares to 892 on the Bombay Stock Exchange.

Opto Circuits India rallied 32 percent amid heavy volumes. Trading volumes increased 11.5 times to 2,51,29,696 equity shares as compared to its five-day average of 21,74,359 shares.

1:50 pm Management speaks: PK Goyal, Director Finance, IOC says that under-recovery on diesel stands at  Rs 9.45 per litre while it is Rs 368 per cylinder on LPG. IOC is currently at Rs 227.30, up Rs 4.10, or 1.84 percent on the BSE.

1:45 pm Penalty stroke: RBI penalises 22 banks in the range of Rs 50 lakh- Rs 3 crore for violation of KYC norms. The central bank has issued cautionary letters to seven more banks following scrutiny. SBI , Bank of India , Bank Of Baroda, Canara Bank , IOB , Central Bank, Federal Bank are fined Rs 3 crore each  while Andhra Bank , Punjab & Sind Bank, PNB , J&K  Bank and United Bank Of India are fined Rs 2.5 crore each. RBI has also issued cautionary letters to Barclays Bank, BNP Paribas, Citibank, RBS, and StanChart Bank .

1:35 pm: Shares of Kohinoor Foods (KFL) were locked at 20 percent upper circuit on Monday, after the company announced its plans issue equity shares on preferential basis to Abu Dhabi-based agri company Al Dahra International Investment (ADII) LLC at a consideration of Rs 160 apiece.

Speaking to CNBC-TV18, Satnam Arora, MD of the company says huge price premium reflects the bullish prospects of the basmati rice and ready-to- eat foodstuff producers. ''We got a commitment from them also to supply minimum 25,000-30,000 tonne of rice,'' he informs.

1:30 pm Warning: M&M has laid off 500 temporary workers and may be forced to defer capex plans. The auto company reduced employee strength by 500 over last two months. M&M also warns that there could be more cuts in employee strength if shutdown continues post July. The stock is currently at Rs 921.85, up Rs 16.25, or 1.79 percent on the BSE.

1:25 pm Update: Bombay High Court adjourns Yes Bank board dispute case till July 29. Madhu Kapur has sought inspection of documents while Yes Bank and Rana Kapoor raise serious objections to amendments.

Don't miss: FMCG, auto earnings to be weak; see no rate cut, says Axis Cap

It is a strong start to the week with a comfortable cruise above 6000 for the Nifty led by pharma and bank stocks. The BSE Sensex is also at a 1.5 month-high, adding 75.55 points at 20034.02. The Nifty is up 21.15 points at 6030.15. About 1114 shares have advanced, 849 shares declined, and 130 shares are unchanged.

The midcap and small caps see relative outperformance.

At last there is some good news on the macros as wholesale price inflation for June comes in at 4.86 percent lower than expectation of 5 percent. Jump in vegetable prices by 24 percent month-on-month pulled inflation above May levels but core or non-food manufacturing inflation fell further to 2 percent from 2.4 percent month ago period.

Global events will be key this week as the Federal Reserve chairman will appear before the US Congress on July 17-18 while G20 finance ministers and central banks will meet in Moscow on July 19-20.

In commodities, Brent Crude is holding above USD 108 per barrel, Nymex is around USD 106. Gold has gained marginally and is now trading at USD 1290 an ounce.

In other asset classes, euro is holding above 1.30 to the dollar. The dollar index is around 83 mark.

12:55pm Management interview

Irfan Razack, CMD of Prestige Estates says the company is on course to meeting Rs 4000 crore fresh sales for FY14. "Momentum is quite good and southern markets like Bangalore is still robust," he adds.

He says the company will continue to maintain margins at 30 percent plus range and fresh launches of 14 million square feet are expected in FY14.

Also Read - Hope to raise Rs 115-120cr via stake sale: Kohinoor Foods

12:50pm Gati shares gained 2.6 percent as the promoters released pledge on 45 lakh shares of the company.

Wind turbine manufacturer Suzlon Energy advanced one percent as the company's subsidiary completed installation of 325 mega watt Thornton Bank wind farm in Belgium.

Also Read - Upbeat on IT; expect good returns from OMCs: HDFC MF

12:40pm Indian rupee came off day's low of 60.10 against the dollar in afternoon trade today. It fell 25 paise to 59.81 per dolllar.

Shares of TCS , Hindustan Unilever , Bharti Airtel , Dr Reddys Labs , Cairn India , Bank of Baroda , Lupin and PNB rallied 2-3 percent while Tata Steel topped the selling list, losing 2.5 percent on loss in its European arm.

Also Read - Scared about rupee; bullish on FMCG even now: Ramesh Damani

12:30pm The BSE Sensex touched 20000-mark for the first time since May 31st, especially after the inflation staying below the 5 percent level. European markets too are quite supportive.

The index is up 42.44 points at 20000.91, and the Nifty is up 8.90 points at 6017.90.

The broader markets gained strength; the BSE Midcap Index rose 0.7 percent and Smallcap is up 0.5 percent.

Gitanjali Gems is locked at 5 percent lower circuit for the third week. It has been under pressure from last month, after RBI and SEBI norms on import of gold.

France's CAC, Germany's DAX and Britain's FTSE rose 0.5 percent each in early trade Monday.

12:20pm Equity benchmarks gained marginal strength after the WPI inflation staying below the 5 percent level in June as well.

Wholesale Price Index inflation rose marginally to 4.86 percent in June as against 4.7 percent in May (provisional), but it was better-than-forecast of 5 percent.

The BSE Sensex is up 13.53 points at 19972.00, and the Nifty is up 0.30 points at 6009.30, but the broader markets outperformed benchmarks.

Advancing shares outpaced declining ones by 1062 to 842 on the Bombay Stock Exchange.

IT majors TCS and Wipro gained 2 percent each, but its rival Infosys slipped 2 percent on profit booking after rising 11 percent Friday on better-than-expected Q1 earnings.

12:00 am Macro data: June wholesale price index (WPI) inflation has eased to 4.8 percent as against a CNBC-TV18 poll of 5 percent month-on-month. Inflation rate in May stood at 4.7 percent.

11:52 am: OBC revises interest rates for term deposits of Rs 5 crore and above. The stock is currently at Rs 197.75, up Rs 1.10, or 0.56 percen on the BSE.

11:45 am Houseviews: Morgan Stanley says IRB Infrastructure is the top pick in infrastructure space. The brokerage house has set a target price for the stock at Rs 186 apiece. The stock rose nearly 4 percent.

BHEL shares fell nearly one percent as Morgan Stanley says avoid this stock. "We remain underweight on the stock with a target price of Rs 150 apiece," Morgan Stanley report said.

The brokerage house expects state-owned capital goods major's FY12-15e sales to fall by 21 percent and profit by 42 percent.

11:40 am Gold update: Taking positive cues from global markets, gold futures prices on Monday rose 0.72 per cent to Rs 27,047 per 10 grams as speculators enlarged positions.

At the Multi Commodity Exchange, metal for delivery in far-month October gained Rs 193, or 0.72 per cent, to trade higher at Rs 27,047 per 10 gm in a turnover of 56 lots.

On the similar lines, the metal for delivery in August spurted by Rs 175, or 0.65 per cent, to Rs 26,918 per 10 gm, clocking a business volume of 1,464 lots.

11:35 am Update: India's iron ore imports plunged 78 percent in the April to June quarter from a year earlier, according to provisional data from government sources, as domestic supply rose and exports fell.

The shipment data, coupled with a 9.1 percent drop in iron ore imports by top buyer China in June, is expected to drag on global prices of the steel-making raw material that have already shed more than 12 percent so far this year.

Also Read - FMCG, auto earnings to be weak; see no rate cut: Axis Cap

11:30 am Earnings outlook: Inspite of Infosys and IndusInd Bank reporting good April-June quarter results, Rajat Rajgarhia, Head of Research, Motilal Oswal Securities is not upbeat on the overall earnings . In fact, he expects them to be quite bad. "We are looking at probably the lowest sales growth in the last 10 years in this quarter.Earnings growth will be zero for the entire Motilal Oswal universe or Sensex 30," he adds in an interview to CNBC-TV18.

Lot of expectations in the market for earnings growth was based on hope - hope of monetary easing, hope of currency stabilising, hope that there would be industrial recovery etc; but hope he says will have to get postponed for few more quarters. So, at  best one can expect an earnings growth of about 7-8 percent, he adds.

11:24 am Buzzing: Kohinoor Foods shares are locked at 20 percent upper circuit in morning trade Monday after the basmati rice producer decided to issue 70,48,306 equity shares on preferential basis to Abu Dhabi-based agri company Al Dahra International Investment (ADII) LLC at a consideration of Rs 160 apiece.

"ADII will invest in the company for 20 percent stake on fully diluted basis and will have the option, subject to necessary approvals, to buy another 4.99 percent stake within a period of six months from the date of completion of investment in the company on fully diluted basis," according to a filing with the exchange.

Don't miss: Rangarajan paints rosy FY14, but macros stay weak

The market is going extremely choppy as it kick-starts the week marked by first quarter earnings by major companies like TCS and Reliance Industries.  The Nifty is struggling hard to stay above 6000. The Nifty is 5996, down 12.95 points while the Sensex slips 31.93 points to 19926.54.

TCS, Bharti Airtel , Wipro , M&M and Dr Reddys Labs are major gainers in the Sensex.

Crompton Greaves is down 2.5 percent has postponed its buyback scheme after Sebi revised its buyback norms on the June. The company said it will now commence the proposed buy-back only after incorporating amendments suggested by Sebi.

Meanwhile on the global front,  Asian indices are trading mixed. China is up 1.5 percent as China GDP meets expectations. Q2 china GDP grew at 7.5 percent vs 7.7 percent Q-o-Q.

10:55am Tata Global Beverage gained 1.8 percent as the company has signed an agreement with Tata Realty and Infrastructure for the development of its property in Bengaluru through a SPV.

Tata Blobal said it has agreed to transfer its Bengaluru property for Rs 190 crore, which will be discharged through a mix of cash, equity and other securities in the special purpose vehicle, and constructed space in the developed property.

The broader markets outperformed benchmarks as advancing shares outnumbered declining ones by 945 to 683 on the BSE. BSE Midcap and Smallcap indices gained 0.5 percent.

10:45am The NSE Nifty is trading below the 6000 level, weighed down by financials and auto stocks. ITC erased its early gains and fell 0.5 percent.

TCS gained 1.5 percent ahead of its first quarter earnings on Thursday, July 18.

Also Read - Sensex 30 earnings to see zero growth in Q1: Rajat Rajgarhia

10:40am Shasun Pharma has signed a letter of intent (LOI) with Bangalore-based pharmaceutical firm Sequent Scientific to develop, manufacture and sell veterinary products, including API and formulations, in the global market. In this joint venture, 73 percent would be owned by Sequent and 27 percent by Shasun. This would also be an exposure for Shasun into the veterinary medicine segment, where it has not been operating so far. The stock rose 2.5 percent.

IOC shares gained 1.3 percent as oil marketing companies hiked petrol prices for the 4th time in 6 weeks by Rs 1.55 per litre to offset the impact of the rupees fall against the dollar.

10:25am Kohinoor Foods shares are locked at 20 percent upper circuit as the company will issue 20 percent stake on a preferential basis at Rs 160 apiece to Al-Dahra an Abu-Dhabi based agri company. Management told CNBC-TV18 that it is likely to raise Rs 115-120 crore via this stake sale and the funds will be used to improve working capital of the company.

Kalindee Rail gained 5 percent. The company will issue 24.90 percent equity to Texmaco . This is in order to avert Jupiter Metals plans to acquire 30 percent stake in Kalindee Rail through a conditional open offer. Texmaco Rail rose 4 percent.

10:15am Indian equity benchmarks remained under pressure amid volatility Monday, after rising more than 660 points on the Sensex in previous two sessions.

The BSE Sensex is down 37.81 points at 19920.66, and the Nifty is down 16.35 points at 5992.65.

Indian rupee fell 50 paise to 60.06 per dollar in morning trade. "Bernanke may give further assurance of reduction in bond buying program, which in turn will raise interest rates and hurt the rupee. US yields are expected to rise, which will make the rupee weak, Arvind Narayanan of DBS Bank says.

Dr Reddys Laboratories shares gained 1.5 percent in early trade to touch a record high of Rs 2,385.95 Monday as Citi recommended buying the stock with a target price of Rs 2,125 after a launch of Dacogen.

Shares in SpiceJet  gained 8.66 percent to Rs 30.25 after media reports suggesting that Kuwait Airways may pick up stake short of the 25 percent mark in the company. The deal value is pegged around Rs 1000 crore, the report says.

Infosys declined 2 percent on profit booking; the stock had rallied 11 percent Friday on better-than-expected first quarter earnings and keeping the dollar revenue guidance for FY14 unchanged at 6-10 percent.

CLSA maintained outperform rating on the stock, but has raised target price by 16 percent to Rs 3025 from Rs 2605 while Morgan Stanley has raised its target price to Rs 3225 from Rs 2890 earlier, maintaining overweight rating.

10:00 am Expert's view: Investor Ramesh Damani says it is hard to be wildly optimistic on the market, given the current macro-economic scenario. In a free-wheeling chat with moneycontrol.com, Damani says it is the rupee that he is most worried about.

"For the next 6 months to one year, I am scared about the rupee. It is even scarier when you go into the details of the current account," Damani said.

It is sudden tightening of liquidity that makes Damani cautious on the index, though he says there are plenty of investment opportunities elsewhere. "The hallmark of emerging markets since 2003 has been liquidity; money was cheap, growth was good and valuations were attractive. You now have a scenario where money is slowly getting tighter, growth is coming at a price, and valuations are no longer cheap," he said.

9:50 am Buzzing: Dr Reddys Laboratories shares gained 1.5 percent in early trade to touch a record high of Rs 2,385.95 Monday as Citi recommended buying the stock with a target price of Rs 2,125 after launch of Dacogen injection in the US market. The drug manufacturer launched anti-cancer drug Decitabine in the injectable form which is a similar version of Dacogen.

"The approval for Dacogen is positive given the uncertainty over FDA approval timelines and the impact that it can have on street estimates for Dr Reddys," Citi report said.

9:45 am Mover: Neyveli Lignite rallies around 3 percent as the Tamil Nadu Chief Minister has appointed a team to discuss modalities of divestment in the company. Further discussion on NLC divestment will be held today.

9:40 am Expert views: Nandan Chakraborty, MD-Institutional Equity Research, Axis Capital feels if quantitative easing (qe) continues that it will lot of international markets including India. In an interview to CNBC-TV18, he warned that earnings for FMCG, consumer discretionary, autos are likely to be weak. Talking specifically on rupee, Chakraborty that the domestic currency may be at 60/dollar by 2013-end and even touch 62 per dollar in 2014.

9:32 am Loser: Tata Steel falls around 3.5 percent on the BSE as the steel giant's European arm has reported a record loss of 1.2 billion pounds for the year.

Tata Steel Europe, Britain's largest steel producer, reported the losses for the year until March 31 as part of its latest results filed at Companies House in the UK.

It marked a massive rise from 846 million pounds the previous year.

As per the company's filing, revenues fell 14 per cent to 8.7 billion pounds due to a "deterioration to market conditions in the second half".

9:30 am Buzzing: According to reports, Kuwait Airways is likely to buy stake in SpiceJet. It is likely to pick stake short of the 25 percent mark. The deal value is pegged around Rs 1000 crore. The aviation company jumps around 9 percent at Rs at Rs 30.10 on the BSE.

9:20 am Gainers: M&M, Dr Reddys Labs , Sterlite Industries, Wipro and TCS are top gainers in the Sensex.

Also read what Udayan Mukherjee says about the market ?

The market opens in negative terrain on weak macro data. The Sensex is down 40.78 points at 19917.69 and the Nifty slips 17.80 points to 5991.20. About 168 shares have advanced, 143 shares declined, and 30 shares are unchanged.

Industrial production data released on Friday delivered a rude shock as it contracts 1.6 percent in May and retail inflation for June rises to 9.87 percent. Meanwhile, the June wholesale price index (WPI) is expected today.

The Indian rupee opened lower at 59.92 per dollar versus 59.55 Friday. Fed Chairman Ben Bernanke may give further assurance of reduction in bond buying programme, which in turn will raise interest rates and hurt the rupee, says Arvind Narayanan of DBS Bank.
"US yields are expected to rise, which will make the rupee weak.  June WPI is seen around 5.3 percent," he adds.

According to him, the range for the rupee is seen between 59.70-59.60/USD.

Oil marketing companies (OMCs) will be in focus today as weak rupee forces the OMCs to hike petrol prices again by Rs 1.55 per litre.

In Asia, China has reported second quarter gross domestic product (GDP) at 7.5 percent (Y-o-Y) and up 1.8 percent Q-o-Q. This is inline with what was being estimated.

Asian markets are mixed ahead of china's second quarter GDP as well as industrial production data expected today. Japanese markets are shut for trade.

Federal Reserve Chairman Ben Bernanke is to appear for the semi-annual congressional testimony on Wednesday and Thursday.

The euro is holding above 1.30 to the dollar. The dollar index is around 83 levels.

In commodities, Brent Crude is trading close to USD 109 after touching a low of USD 107.28 per barrel. Nymex too saw a one dollar gain but it's still below the 16-month high.

From precious metals space, gold is trading at USD 1280 an ounce.

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