Sensex ends weak; Jindal Steel falls 7%, Coal India dwn 6%

02 Aug 2013

4:00 pm Market closing: The Sensex ends down 153.17 points at 19164.02, and the Nifty closes 49.95 points down 5677.90. About 770 shares have advanced, 1475 shares declined, and 154 shares are unchanged.

Small caps were badly hurt while banking, capital goods, metals, FMCG and realty stocks dragged the indices. Technology and oil & gas stocks outperformed the peers. Jindal Steel closed down around 7 percent, Coal India fell 6 percent ahead of April-June qaurter earnings expected tomorrow. wn

3:50 pm: Atul Chaturvedi, CEO of Adani Agro which manufactures popular Fortune oil brand today stressed that the company had no relationship with National Spot Exchange and owned no money to the commodity stock exchange.

"We have never dealt with NSEL ever in the past. It seems it is some vested interest is spreading all these rumours which have absolutely no base whatsoever," Chaturvedi claimed.

3:45 pm Midcap losers and gainers: Financial Tech (down 73 percent), MCX (down 42 percent), Hanung Toys (down 53 percent), IL&F Engg (down 32 percent) are top midcap losers this week. On the gainers side are Wipro (up 15 percent), Sun TV (up 13 percent), SKS Micro (up 12 percent), Titan Industries and M&M Finance (up 8 percent each).

3:40 pm Earnings: Jubilant FoodWorks reported a 5.13 percent increase in standalone net profit to Rs 34 crore for the first quarter ended June 30.

The company had posted a profit of Rs 32.34 crore in the same quarter a year ago.

Net sales rose 26.07 percent to Rs 396.42 crore from Rs 314.44 crore in the corresponding period last year, Jubilant FoodWorks said in a statement.

3:30 pm Deal talk: Exide Industries is in separate talks with Canada's Manulife Financial Corp and Samsung Life Insurance Co to sell a 26 percent stake in its life insurance unit, two sources with direct knowledge of the matter said.

A 26 percent stake in the insurance company, ING Vysya Life Insurance Company Ltd, may be valued at more than USD 100 million based on its premium income, said the sources, who declined to be named as they were not authorised to speak to the media.

The market is reeling under selling pressure as investors are seen offloading metals, realty and FMCG stocks. The Sensex is down 153.97 points at 19163.22, and the Nifty slips 52.35 points to 5675.50. About 646 shares have advanced, 1504 shares declined, and 145 shares are unchanged.

Siemens shares crashed more than 6 percent after it reported net loss of Rs 48.8 crore in April-June quarter as against profit of Rs 36.2 crore in a year ago period. Siemens says made provision of Rs 135.4 crore on significant development in few projects.

Sun TV Network gained more than 2 percent. South-based media conglomerate's net profit was unchanged at Rs 164 crore in first quarter year-on-year, but net sales rose stronger-than-expected 41 percent to Rs 602 crore from Rs 425.8 crore on yearly basis. The company earned income from IPL franchise at Rs 98.5 crore while expenses were Rs 129 crore.

The market extended losses in afternoon trade with the equity benchmarks falling more than one percent, weighed down by metals, FMCG and banks stocks.

The BSE Sensex is down 199.04 points or 1.03 percent at 19118.15, and the NSE Nifty is down 67.20 points or 1.17 percent at 5660.65.

Among technology stocks, TCS , Infosys and Wipro gained 1-1.6 percent as the domestic currency (Indian rupee) reached to 61 against the dollar.

Declining shares outnumbered advancing ones by 1497 to 642 on the Bombay Stock Exchange.

2:00 pm: There has been a regulatory vacuum in spot commodity exchanges, says Ramesh Abhishek, chairman, Forward Market Commission.

In an interview to CNBC-TV18 he informed that three spot exchanges were exempted by the government under Section 27 of FCRA to conduct forward trading in one day contracts. This was done to boost volumes so that their economic viability improved. However many conditions were laid.

1:50 pm Boardroom: Telecom major Reliance Communication has the highest revenue per minutes (RPM) says Gurdeep Singh, Pres & CEO-Wireless Business, Reliance Communications . In an interview to CNBC-TV18, Singh guides that the company will continue to improve its RPMs even in the days to come. The company's RPM jumped 4 percent in Q1.

Singh says the company, that has managed to slash its debt by over Rs 400 crore in Q1, will continue to focus on profitable growth. Adding to that confidence, he says the company is running cashflow positive and will now aim to get more paid and profitable minutes.

"Our focus increasingly is on to increase the paid and profitable minutes consumed on our network. To that extent, we will continue that journey till we reach a good customer and a revenue mix of the subscribers using our network," says Singh in an interview to CNBC-TV18.

1:40 pm FII view: Despite Reserve Bank of India 's (RBI) efforts to protect the free falling rupee, global investors continue to remain bearish on the rupee, says Nicholas Ferres of Eastspring Investments.

Strengthening of the dollar and positive US macro data will uplift global cyclical stocks and may impact emerging markets (EMs), he told CNBC-TV18. EMs, which have been highly expensive, may see more pain on the back of rising US bond yields. From ASEAN (Association of South East Asian Nations) countries, Ferres is betting on Taiwan and Korea.

1:30 pm Downgrade: Bank of America Merrill Lynch downgrades public sector lenders Bank of Baroda and Union Bank of India on slowing growth and impact on earnings from mark-to-market losses in their bond portfolios, reports Reuters.

Bank of Baroda shares are down 6 percent, while United Bank of India falls 5 percent.

The Nifty is struggling below 5700, weighed down by commodities, power names and rate sensitives. The Sensex is down 85.25 points at 19231.94, and the Nifty slips 28.15 points to 5699.70. About 671 shares have advanced, 1343 shares declined, and 162 shares are unchanged.

The midcap index slumps over a percent, infra, telecom and banks are the key laggards.

Titan rallies after margins adjusted for the inventory write down stand at 10 percent, beating street estimates. In a CNBC-TV18 boardroom, the management says the reversal of gold on lease model is a positive development. It does not see margin fall as a big concern. Deustche bank has upgraded the stock to a buy, it believes market conditions favour acceleration in market share gains

Globally, it is a positive session across Asia but Japan is powering ahead with an over 3 percent gain led by the weakness in yen. Europe has opened in positive.

12:55pm Buzzers
There is no respite for Financial Technologies . The stock cracked another 18 percent, but now 49 percent off its morning lows of Rs 105.50. NSE has said there will be no new F&O contracts till the market-wide limit is cut. Chairman of the Forward Markets Commission, Ramesh Abhishek told CNBC-TV18 that FMC will check on NSEL warehouse stocks to find out whether they have inventory worth Rs 6,200 crore .

Titan Industries shares rallied 8 percent in trade today after margins adjusted for the inventory writedown stand at 10 percent, beating street estimates. In a CNBC-TV18 boardroom, the MD of the company, Bhaskar Bhat says that the reversal of gold on lease model is a positive development for them. He does not see margin fall as a big concern. Deustche Bank has upgraded the stock to a buy, citing market conditions favour acceleration in market share gains.

Bank of Baroda continued to hurt, falling 5 percent on top of previous day's 8 percent loss. Bank of America Merrill Lynch has downgraded the stock to neutral and cut its target to Rs 550. The brokerage house has cut their EPS estimate for FY14 by 20 percent on weak earnings and the recent RBI action.

The BSE Sensex is down 74.34 points at 19242.85, and the NSE Nifty is down 29.05 points at 5698.80. About 658 shares advanced while 1267 shares declined on the BSE.

12:45pm Market update
Metals, FMCG, private banks, pharma and auto stocks are down while technology and PSUs gained.

Index heavyweight Reliance Industries extended gains to 2 percent.

Indian rupee fell by 40 paise to 60.83 against the US dollar. Despite Reserve Bank of India's (RBI) efforts to protect the free falling rupee, global investors continue to remain bearish on the rupee , says Nicholas Ferres of Eastspring Investments.

Strengthening of the dollar and positive US macro data will uplift global cyclical stocks and may impact emerging markets (EMs), he told CNBC-TV18.

12:25pm Equity benchmarks are marginally weak amid volatile trade, weighed down by metals, FMCG, healthcare and private sector banks.

The BSE Sensex is down 40.06 points at 19277.13, and the NSE Nifty is down 18.45 points at 5709.40. The broader markets too are under pressure with the BSE Midcap and Smallcap indices falling 0.5-0.7 percent.

Hindustan Construction Company (HCC) turned profitable with first quarter net profit at Rs 19.2 crore as against a loss of Rs 31 crore in a year ago period, sending shares 20 percent higher. Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped three-fold to Rs 210 crore from Rs 70 crore year-on-year and operating profit margin jumped 1110 basis points Y-o-Y to 18.3 percent in the first quarter.

Power Grid crashed 14.5 10 percent as the state-run transmission utility plans to sell 15 percent stake via follow-on public offer in the company. It reported nearly 20 percent jump in net profit at Rs 1,040.34 crore in the first quarter of the current financial year. It had raked in a net profit of Rs 870.11 crore in the June quarter of last fiscal.

12:00 pm F&O trend: Atul Badkar, VP - Institutional Equities - Derivatives Desk at Edelweiss Securities expects Nifty to be broadly in the range of 5,720 and 5,850 for the next few days.

On specific stocks, he is bearish on Tata Global Beverage and Mahindra and Mahindra and sees them as most lucrative shorting candidates. From the banking space, ICICI Bank , Axis Bank and State Bank of India remain weak, so one can look to short them, he added.

11:50 am Auto update: Bajaj Auto 's total sales plunged 18 percent year-on-year to 2.81 lakh units in July, as motorcycles continued to see lacklusture demand.

The Pune-based motorcycle maker has launched several new models like the Discover ST, Discover 100T in the last several months and more Discover models are around the corner.

Bajaj Auto is the only company that doesn't make scooters and Rajiv Bajaj, the company's MD has said in the past that it is the motorcycle segment that will be its focus. He maintained that a fall in its motorcycle sales reflects the state of the industry and July is traditionally weak for motorcycles.

The strike at its Chakan plant near Pune did not have any impact on the sales, Bajaj told CNBC-TV18.

11:45 am Market outlook: ICICI Prudential AMC has been underweight on financial companies since 2009, but the scale at which it fell in July forced us to look at adding a bit, says S Naren, CIO - Equities, ICICI Prudential AMC . However, he continues to remain underweight on the sector, but within the space he's more positive on private sector.

He told CNBC-TV18, fixed income markets have become extremely attractive at this point of time. He is constructively positive with a one year view because it doesn't require growth for the returns to come like in equity markets. There is extreme fear in the fixed income market and on the valuation side unlike equity markets where you have norms like price to earnings or price to book, you don't have the equivalent here. According to him, he says, taking one year, the rate at which the government is borrowing minus Wholesale Price Index (WPI) inflation, those numbers today are pretty large and one of the largest it has ever been in the last 10 years.

11:30 am Big fall! Jindal Steel crashes around 8 percent on the BSE. Earlier, the company said that it will cut planned investment by 40 percent in the next two years because of raw-material shortages.

"The company will spend Rs.12,000 crore (USD 2 billion) in the two years through March 2015, scaling back an earlier plan to spend Rs.20,000 crore," CFO K Rajagopal said on Wednesday.

The market refuses to budge higher amidst lacklustre trading. The Nifty is still struggling below 5750, down 0.30 points while Sensex is up 25.00 points at 19342.19. About 628 shares have advanced, 988 shares declined, and 109 shares are unchanged.

Technology and oil & gas stocks are lending support to the indices while metals stocks are extremely weak.

However, there is no respite for Financial Technologies , the stock cracks another 20 percent, but now off its morning lows. Chairman of the forward market commission tells CNBC-TV18 that it will check on NSEL warehouse stocks to find out whether they have inventory worth Rs 6,200 crore.

Meanwhile, Asian markets are buoyant following a record-setting session on Wall Street. Nikkei is up 1.5 percent on weaker yen.

Dollar index surges to 82.4, yen weakens to 99.6. Euro holds above 1.32.

Brent is above USD 109, Nymex is above USD 108 per barrel. Gold retreats marginally, though holds onto USD 1300 an ounce

The rupee started lower on the back of a strong dollar globally. There is two way interest from FIIs with some funds cancelling forward hedges and other buying at the current lower levels. PSU banks were noted offering dollars.

Indian bonds are lower ahead of the Rs 15,000 crore bond auction later today. Sentiment is also affected by the high fiscal deficit number and the higher crude prices.

10:45am Jindal Steel & Power topped the selling list among Sensex 30, plunging more than 8 percent.

IOC " target="_blank" title="Indian Oil Corporation">Indian Oil Corporation (IOC) is under pressure today. The cabinet cleared the proposal for 10 percent divestment in IOC. However, the management told CNBC-TV18 that this is not the right time for stake sale, sentiment is not good given rupee depreciation and rising under-recoveries.

Titan Industries gained 7 percent after the margins adjusted for the inventory writedown stand at 10 percent, beating street estimates. Deutsche Bank upgraded the stock to a buy from a hold with a return of 'gold on lease', market conditions favour acceleration in market share gains and strong expansion plans.

10:25am Idea Cellular shares lost 2 percent on profit booking. The stock surged quite sharply in previous sessions; so it may have already priced in strong first quarter results.

Index heavyweight Reliance Industries and ITC are the leaders today, rising 1.6 percent and 0.9 percent, respectively.

Technology stocks like Infosys , TCS and Wipro rallied 1-3 percent on rupee depreciation. The domestic currency fell by 31 paise to 60.74 against the US dollar.

Financial Technologies (FTIL) shares crashed 45 percent intraday on top of previous day's 65 percent fall after the National Spot Exchange (promoted by FTIL) suspended trade in its all one-day forward contracts except for E-series products. The stock recovered a bit and is down 23 percent to Rs 148 now.

10:15am The market remained in consolidation phase and is looking for a firm direction on either side, after getting slaughtered from last week on weak earnings (especially PSU banks) and rupee volatility.

The Sensex is down 18.85 points at 19298.34, and the NSE Nifty is down 8.65 points at 5719.20 while midcaps and smallcaps lost 0.6 percent.

Vineet Bhatnagar, managing director, Phillip Capital feels the Nifty may bounce back in the near term and this relief rally may help it retest 5,820-5,830 levels.

"For the moment it is looking as if Nifty is a bit oversold and short-term traders, day traders could benefit from a very quick in and out strategy," he said in an interview to CNBC-TV18.

Power Grid Corporation shares crashed 14 percent after the earnings announcement and board's approval for follow-on public offer of 69.44 crore equity shares.

Future Retail rose over 9 percent after the cabinet committee on economic affairs cleared the proposal to further relax rules for FDI in multi-brand retail.

It has ruled in favour of hiking FDI cap in insurance through the automatic route to 49 percent and cleared 100 percent FDI in telecom.

Declining shares outnumbered advancing ones by 749 to 448 on the Bombay Stock Exchange.

10:00 am Market outlook: The Nifty may bounce back in the near term and this relief rally may help it retest 5,820-5,830 levels, says Vineet Bhatnagar, managing director, Phillip Capital.

"For the moment it is looking as if Nifty is a bit oversold and short-term traders, day traders could benefit from a very quick in and out strategy," he said in an interview to CNBC-TV18.

He is bullish on fast moving consumer goods sector and added that rupee's fall and international newsflow has made telecom and IT stocks very attractive.

9:50 am Houseview: CLSA has raised earnings forecast by 4-5 percent on Infosys . The brokerage has also revised target to Rs 3300 per share. The stock is up around 1 percent on the BSE.

9:40 am Precious metal: Gold fell for a fifth session on Friday, heading for its biggest weekly loss in a month as strong US economic data raised fears the Federal Reserve may start to taper its commodities-supportive stimulus measures, reports Reuters.

Positive jobless benefits and factory activity data followed stronger-than-expected US GDP numbers this week. The Fed has said its policy remains driven by data, even though it gave no signs in a statement on Wednesday that it was set to wind down its $85 billion monthly bond-buying measures.

9:35 am Weakling: Power Grid slumps around 10 percent on the BSE. It reported nearly 20 percent jump in net profit at Rs 1,040.34 crore in the first quarter of the current financial year. It had raked in a net profit of Rs 870.11 crore in the June quarter of last fiscal.

The state-run transmission utility plans to sell 15 percent stake in the company.

9:30 am Punished again! Both Financial Technologies and MCX India are still punished in today's trade as National Spot Exchange (NSEL) suspended trading in one day forward contracts in all securities on Thursday. After a dismal lose of 65 percent on Thursday, Financial Technologies has fallen another 31 percent on the BSE today. MCX India too has hit lower circuit again, down 20 percent.

NSEL plans to merge all contracts and settlement of these contracts after 15 days. For the next 15 days there will not be any trading in contracts except for the E-series. The positions outstanding in these contracts will be settled by way of delivery or cash payment after expiry of 15 days. The exchange will subsequently come out with the date when the settlement is going to happen.

9:20 am Divestment woes: IOC falls around 3 percent on the BSE as the cabinet cleared the proposal for 10 percent divestment in the oil marketing company. However, the management told CNBC-TV18 that this is not the right time for stake sale, sentiment is not good given rupee depreciation and rising under-recoveries.

The market attempts to pullback in initial trade on the back of strong global cues and reform measures approved by cabinet. The Sensex is up 119.03 points at 19436.22, and the Nifty adds 33.35 points at 5761.20. About 290 shares have advanced, 113 shares declined, and 30 shares are unchanged.

Future Retail surges around 8 percent as the cabinet moved ahead with FDI reforms. It has cleared the proposal to further relax rules for FDI in multi-brand retail. The cabinet has ruled in favour of hiking FDI cap in insurance through the automatic route to 49 percent and cleared 100 percent FDI in telecom.

The Indian rupee opened lower by 17 paise at 60.60 per dollar versus 60.43 yesterday.

Himanshu Arora, Religare said, "RBI said foreign investors interested in hedging forex exposure relating to P-Notes should have permission from note holders to do so. This may force banks and investors to slash their dollar positions, keeping the dollar under pressure against the rupee. The range for the day is seen between 60.10-60.65/USD."

Meanwhile, Asian markets were trading higher. China's Shanghai Composite rose 0.39 percent or 7.92 points at 2,036.99.

In US, markets closed at record highs propelling the S&P 500 above the 1,700 mark for the first time, as Wall Street cheered a round of upbeat economic data and ahead of the widely-watched government jobs report. So far this year, the Dow and S&P 500 have spiked more than 19 percent, while the Nasdaq has surged an impressive 21 percent. The CBOE volatility index slid below 13.

In Europe, major indices closed with over 1 percent gains reacting to strong US and European data as well as rate decisions from the European Central Bank and the Bank Of England. In data from Europe, Euro Zone manufacturing activity grew for the first time in two years in July.

The European Central Bank has decided to leave key interest rates unchanged.

In commodities, crude prices surge. Brent Crude rises to USD 109 a barrel. Nymex crude too rose 2 percent to USD 108.

From precious metals space, gold slips towards USD 1300 an ounce.