Sensex snaps 8-day losing streak; BHEL down 19%, FT up 31%

05 Aug 2013

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The market snapped 8-day losing streak amid volatile session and closed with marginal gains Monday. The support was led by FMCG, metal, technology and banks stocks, but the upside capped by healthcare and capital goods majors.

The BSE Sensex was up 18.24 points at 19182.26, and the NSE Nifty gained 7.50 points to finish at 5685.40 while the BSE Midcap and Smallcap indices advanced 0.3 percent each.

Abhijit Paul, founder of Alphative Advisors LLP expects the Nifty to bounce back by a-percent-and-a-half over the next couple of days.

"The market is oversold. Sentiments are fairly weak, poised for a short-term bounce. The first level would be close to 5,800-mark and may extend further up. But in a market of this kind, my expectations are low. It is too late to go short in the market and makes sense to go contra long,'' he adds.

Meanwhile, Parag Thakkar, head of sales, HDFC Securities adds that in the short-term, the rupee will have a significant impact on market while in the long-term, the 2014 elections are the key factor. ''Considering that India is now going to grow at 5-6 percent and the US is showing signs of recovery, it is very difficult to believe the rupee will come below 58-59 and will still remain above 59-60. And this is what the market is expecting to happen.''

Country's largest private sector lender ICICI Bank was up 1.76 percent while NTPC , Hero MotoCorp, Coal India , Sterlite and Tata Steel gained 3-4 percent. Jindal Steel rallied 8 percent on buyback buzz.

L&T, HDFC, Bharti Airtel , Tata Motors , Bajaj Auto , Sun Pharma , Dr Reddys Labs and Cipla were down 1-2 percent.

Earnings Impact
Shares of state-run capital goods major BHEL slumped 19 percent on dismal performance during April-June quarter and downgrades by brokerages . Net profit halved on yearly basis to Rs 465 crore while operating profit margin dipped 820 bps to 6 percent in first quarter. The company received just Rs 1470 crore worth of orders in Q1 while its order book position declined 19 percent year-on-year to Rs 1,08,000 crore during the quarter. Goldman Sachs has a sell call on the stock, while Deutsche Bank has cut its target price to Rs 126 from Rs 169 on the stock.

Oriental Bank of Commerce rallied 6 percent after the fall in slippages and restructured assets during the quarter while Punj Lloyd surged 8 percent post the company posted a profit of 40 crore as against a loss of Rs 13.4 crore on yearly basis.

Power Finance Corporation too was excited in trade today, rising nearly 12 percent after net profit grew by 23 percent and net interest income rose by 40 percent, but on the flip side, GSFC lost 2 percent as it reported a big drop in profits to Rs 5.5 crore from Rs 172.7 crore.

TV Today Network was locked at 20 percent upper circuit after the media company posted a net profit at Rs 12 crore in first quarter as against loss of Rs 35 lakh in a year ago period while the profit doubled sequentially from Rs 6.36 crore.

Tata Chemicals shares declined over 2 percent as its first quarter consolidated net profit fell by 30 percent year-on-year to Rs 75.2 crore.

Hindustan Construction Company surged 17.5 percent, continuing its upward journey for the second consecutive session. On Friday, it was locked at 20 percent upper circuit.

Puravankara Projects plunged 6 percent ahead of first quarter earnings on Tuesday. Crompton Greaves , Karur Vysya Bank , Standard Chartered, Tata Power and Uniteh will also announce its June quarter numbers tomorrow.

Financial Technologies (FTIL) continued to remain in focus today, bouncing back with 31 percent gains today after falling 72 percent in previous two sessions. In the latest development over the weekend, National Spot Exchange (promoted by FTIL) said 13 trading members will pay 5 percent of their outstanding obligations, a total of around 3,100 crore, weekly, and eight members with contracts amounting to almost Rs 2200 crore would settle outright.

It could take about five months for investors awaiting payout on the National Spot Exchange (NSEL), to get their money, said Financial Technologies founder Jignesh Shah at a press conference in Mumbai. Other company promoted by FTIL, MCX remained under pressure, falling 10 percent.

Educomp Solutions shares plunged 5 percent as more than 6,000 staffers were not received salary for three months, reports CNBC-TV18 quoting sources. Sources say liquidity was impacted as schools stopped payment to company.

4:00 Market closing: The Sensex ends the day at 19182.26, up 18.24 points while the Nifty ends up 7.50 points at 5685.40. Dragged by BHEL, Capital Goods index lost around 4 percent while metals led by Jindal Steel gained 3 percent.  Sterlite Industries, NTPC, Coal India and Hero MotoCorp are major gaienrs in the Sensex while Bharti Airtel, Tata Motors, L&T and Bajaj Auto are other laggards.

3:50 pm midcap gainers: Punj Lloyd (up 8 percent), SKS Microfinance (up 8 percent), NDTV (up 20 percent), Alembic Pharma (up 10 percent), Shasun (up 10 percent), PFC (up 12 percent), Financial Tech (up 31 percent) and IRB Infra (up 8 percent) are midcap gainers in today's trade.

3:45 pm Boardroom: Low-cost carrier, SpiceJet, which is owned by Sun Group despite being confident of improvement in airline market continues to worry about the high aviation turbine fuel cost, which makes for almost 50 percent of total cost of the company.

SL Narayanan, Group CFO, Sun Group raised concerns about increasing crude cost and strengthening dollar, which is a double whammy for airline companies.

"Since most of fuel is anyway imported any increase in the crude prices has an immediate impact on airline profitability. Then since crude gets paid for in US dollars in any increase in dollar prices is bound to impact us," Narayanan said.

3:35 pm Warning bell: Rising automation and low attrition in IT sector may act as a dampener for job seekers with industry body Nasscom expecting hiring to decline by up to 17 percent to 1,50,000 in the current fiscal.

The USD 108-billion Indian IT-ITeS sector provides employment to about 3 million professionals.

"I think we will have net additions of 150,000-180,000 this year. Last year it was about 180,000," Nasscom President Som Mittal told PTI when asked about the hiring environment.

3:25 pm Boardroom: Credit rating agency ICRA feels that if market conditions did not improve in the coming quarters , the company's margins may get hit. Disruptions in issuing new bond papers in the last couple of weeks are likely to continue in the future, which will impact the company's earnings, Naresh Takkar, managing director of ICRA told CNBC-TV18.  He expects the returns from short term investments to pick up in the near-term, even if yields are compressed currently.

He says that the earnings before interest taxes (EBIT) losses in its consulting business are due to the sluggish market environment. He also says that delay (elongation) in projects was having a negative impact on its financials.

The market has been extremely stubborn today refusing to budge ahead amid volatile trading. The Sensex is up 31.96 points at 19195.98, and the Nifty adds 9.70 points at 5687.60.  About 1000 shares have advanced, 1105 shares declined, and 132 shares are unchanged.

From the small cap space, TV Today is the big buzzer today, up 20 percent after posting a Rs 12 crore profit against a loss of 35 lakh, year-on-year.

Tata Chemicals shares lost nearly 4 percent after the Tata Group company's consolidated net profit dropped more than 30 percent on yearly basis to Rs 75.2 crore in first quarter, but net sales grew by 8.9 percent Y-o-Y to Rs 3,292 crore during the quarter.

Oudh Sugar Mills' loss widened to Rs 27.4 crore in April-June quarter from Rs 6.2 crore on yearly basis while net sales fell by 24 percent year-on-year to Rs 271.2 crore during the quarter. The stock is down 1 percent.

02:55pm Earnings
Tata Chemicals shares lost nearly 4 percent after the Tata Group company's consolidated net profit dropped more than 30 percent on yearly basis to Rs 75.2 crore in first quarter, but net sales grew by 8.9 percent Y-o-Y to Rs 3,292 crore during the quarter.

Oudh Sugar Mills' loss widened to Rs 27.4 crore in April-June quarter from Rs 6.2 crore on yearly basis while net sales fell by 24 percent year-on-year to Rs 271.2 crore during the quarter. The stock is down 1 percent.

02:40pm Results Boardroom
SL Narayanan, Group CFO of Sun Group says that the profitability of SpiceJet will improve in FY14. The market share will remain stable at 20 percent," he adds.

"Aviation turbine fuel (ATF) prices continue to hurt operations. ATF import will start anytime now and that may help cut costs," Narayanan says.

The company has added Muscat as its 9th international destination. "International profitability will go up with Muscat's addition," he adds.

02:20pm Equity benchmarks are completely lacklustre in afternoon trade due to lack of trigger locally and globally. Metals, FMCG, technology stocks are on buyers' radar while capital goods and HDFC pack are under pressure.

The BSE Sensex is up 19.03 points at 19183.05, and the NSE Nifty is up 4.95 points at 5682.85.

Financial Technologies (up 24 percent), Hero MotoCorp, YES Bank, Reliance Communications , SBI and Axis Bank are the most active shares on exchanges.

Ahead of April-June quarter numbers on Tuesday - Puravankara Projects gained more than 7 percent and Unitech rose 2 percent; Tata Power and Crompton Greaves lost 2-3 percent.

The government has shelved its plan to divest stake in BHEL as investors are finding it tough to determine company's future price, reports CNBC-TV18 quoting agencies. BHEL shares crashed 17 percent on poor first quarter numbers.

SpiceJet shares rose 0.6 percent on good performance at operational and topline levels, though bottomline declined. Net profit of the airline company slipped to Rs 50.5 crore from Rs 56.2 crore on yearly basis while operating profit margin increased 30 bps Y-o-Y to 5.5 percent in April-June quarter.

2:00 pm Gold update: Gold edged higher after softer-than-expected US nonfarm payroll data eased fears of an imminent tapering of the Federal Reserve's stimulus measures.

Gold had fallen below USD 1,300 last week after strong US gross domestic product and factory activity data that reduced its investment-hedge appeal. However, it rebounded after data showed US employers slowed their pace of hiring.

1:50 pm Earnings: SpiceJet's April-June quarter net profit fell to Rs 50.5 crore from Rs 56.2 crore year-on-year. Total income during the period, however, grew to Rs 1704 crore from Rs 1467 crore (Y-o-Y). Operating margin in the first quarter was at 5.5 percent Y-o-Y.

1:40 pm Macro outlook: HSBC Markit Services Purchasing Managers' Index for India fell to 47.9 in July from 51.7 , Leif Eskesen, HSBC Global Research believes that investors confidence is waning domestically because of weak macros - imbalances in the economy and high consumer price index (CPI) inflation. The Indian service sector suffered a fall in activity in nearly two years in July, hampering chances for a recovery in growth in Asia's largest economy.

"We have not yet seen the impact of the structural reform measures that have been announced in terms of traction on the ground of growth," he says in an interview to CNBC-TV18.

Eskesen maintains his FY14 GDP growth target for India at 5.5 percent, but cautions that if there is no recovery in manufacturing and service sector then this estimate may fall further.

1:30 pm Global cue: European shares hit a new two-month high, mirroring gains in the United States where the S&P 500 hit a record high after mixed US jobs data raised expectations a withdrawal of stimulus would be delayed.

1:25 pm Bad health: Wockhardt slumps another 5 percent on the BSE as reports indicate that a total of 7 FIRs were filed in Pune, Kolhapur, Mumbai which was for sale of Spasmoproxyvon which is illegal and was banned on May 23.

The market is going flat as the Nifty struggles below 5700. The Nifty is down 2.35 points  at 5675.55 while the Sensex is up 9.19 points at 19173.21. About 847 shares have advanced, 1090 shares declined, and 118 shares are unchanged.

After giving up over 70 percent last week, Financial Technologies witnesses a solid rebound today. In the latest development over the weekend, NSEL said 13 trading members will pay 5 percent of their outstanding obligations, a total of around Rs 3,100 crore, weekly, and eight members, with contracts amounting to almost Rs 2200 crore, would settle outright. 

Buying interest seen in Jet Airways as sources indicate SEBI has cleared the Jet-Etihad deal and it is now up to the government to clear it. Separately, Jet has slashed ticket fares to as low as Rs 1777 for domestic air travel on select routes.

Delhi takes centre stage as the Parliament's monsoon session kickstarts today. In what could be another stormy session, 44 key bills will be the on the agenda. These include the food security bill, pension bill, insurance bill and the land acquisition bill.

The week would see blue-chip earnings from Tata Power , Ranbaxy Laboratories , Tata Motors and Sun Pharmaceuticals Industries, among others.

12:55pm Losers and Gainers
HDFC Bank , Tata Motors and Tata Power dropped over 2 percent while HDFC and Larsen & Toubro declined 1.6 percent each.

Puravankara Projects lost over 5 percent ahead of first quarter earnings on Tuesday.

TV Today Network is locked at 20 percent upper circuit after the media company posted a profit of Rs 12 crore during June quarter as against loss of Rs 35 lakh in a year ago period. Net sales grew by 26 percent on yearly basis to Rs 89 crore crore.

12:45pm Buzzers
Country's largest power producer NTPC and utility vehicle maker Mahindra & Mahindra gained more than 2 percent.

Among metals, Sterlite Industries shares surged 4 percent while Jindal Steel rallied over 2 percent.

However, state-run capital goods major BHEL crashed 19 percent in afternoon trade on disappointing April-June quarter earnings. Standalone net profit halved to Rs 465.4 crore from Rs 920.9 crore in a year ago period , dented by weak power segment performance, despite higher other income. EBITDA margin plunged 890 bps year-on-year to 4.5 percent in the first quarter.

Indian rupee appreciated by 31 paise to 60.79 against the US dollar.

12:20pm The market is flat with a positive bias with the Nifty hovering around 5700 led by strength in FMCG, technology and metals stocks. Reliance Industries and ICICI Bank gained nearly 1.5 percent while ITC surged 2 percent.

The BSE Sensex is up 45.75 points at 19209.77, and the NSE Nifty is up 13.10 points at 5691.

Delhi takes centre stage as the parliament's monsoon session kick started today. In what could be another stormy session, 44 key bills will be on the agenda, which includes the Food Security Bill, Pension Bill, Insurance Bill and the Land Acquisition Bill.

Buying interest is seen in Jet Airways , which gained 2 percent. Sources indicate that SEBI has cleared the Jet-Etihad deal and it is now up to the government to clear it.

Jet has slashed ticket fares to as low as Rs 1777 for domestic air travel on select routes.

Meanwhile, after giving up 72 percent last week, Financial Technologies witnessed a solid rebound today, gaining 29 percent. In the latest development over the weekend, National Spot Exchange (NSEL) said 13 trading members will pay 5 percent of their outstanding obligations, a total of around Rs 3,100 crore, weekly, and eight members with contracts amounting to almost Rs 2,200 crore would settle outright. The street will watch out for further details in a press conference slated for later today.

11:50 am Alert: JSW Steel said it produced 9. 91 lakh tonne of crude steel in July, up 47 percent year-on-year from its three manufacturing units at Vijayanagar, Salem and Dolvi.

During the period, the company's production of flat rolled products was up 64 percent to 7.9 lakh tonne while that of long products rose 31 percent to 1.86 lakh tonne.

The firm said its capacity utilisation was lower in July at its 10 MT Vijayanagar plant in Karnataka due to shutdown of one of its furnaces for relining and capacity enhancement. The facility will resume production next month-end.

11:40 am Market outlook: Though there is a distinct possibility of Indian equities seeing a sharp correction, but there is no solid reason as well for the market to hold at current levels, says Dipen Sheth, head-Institutional Research, HDFC Securities.

''Domestic investors have been net sellers. Foreign investors don't see the macro situation improving, if there is a selloff from on a sustained basis, there will be very little support for the market,'' he told CNBC-TV18 in an interview.

11:35 am Weak: Orbit Corporation dropped nearly 10 percent intraday to touch a record low of Rs 11.77 Monday on reports that LIC Housing Finance has sent a Rs 96 crore loan recovery notice to the company.

Housing finance company has curbed Orbit Corp's sale of flats in three Mumbai projects, which are located at Andheri, Lower Parel and Lalbaug, reports CNBC-TV18 quoting agencies.

The market is slowly picking up steam on strength in FMCG and metal stocks. The Sensex is up 92.72 points at 19256.74, while the Nifty adds 24.05 points at 5701.95. About 871 shares have advanced, 901 shares declined, and 115 shares are unchanged.

Punj Lloyd surges 6 percent after reporting stable numbers in April-June quarter. The company maintained its quarterly run rate of Rs 3000 cr on topline and Rs 250cr on the EBITDA line . Total income was up 8.3 percent at Rs 3006 cr , while the company reported a profit of Rs 40.4 cr vs a loss of Rs 13.4 cr Y-o-Y.

Asian markets are trading with a negative bias. Nikkei is down 1 percent on stronger yen.

Post the disappointing job data, bond yields dropped to 2.6 percent and dollar fell to 81.995. Euro rose to 1.3275 and japanese yen rose to 98.7.

Indian bonds are also higher as rupee moved up from its all time lows. The slight recovery in US bonds is also helping.
The rupees steerngth is alrgely because of long dolalr unwinding after the greenback's weak showing this mornign across asia

Crude prices fell after disappointing jobs report caused fears about slowdown in oil demand. Brent is at USD 109 per barrel, and Nymex is at USD 107.2. Gold is rangebound at USD 1317 per ounce.

10:59am Results Boardroom
Ravi Gupta, CFO of Jubilant FoodWorks says that same-store sales growth has been sliding. "Same-store sales growth was down due to poor economy, but we still expect 8-10 percent same-store sales growth in FY14," he adds.

He further says, "20 bps margin impact was due to Dunkin Donuts and rest of margin impact was due to Domino's." Operating profit margin lost 140 bps Y-o-Y to 16.8 percent in first quarter.

10:50am Coal India is trading close to its IPO price of Rs 245 on Monday morning. It touched a record low of Rs 248 and now it is up 3.3 percent after the management interview with CNBC-TV18.

The market gained momentum on support from technology, oil & gas, FMCG and private banks' support. The BSE Sensex is up 119.23 points at 19283.25, and the NSE Nifty is up 33 points at 5710.90.

10:40am Earnings reaction
IL&FS Engineering and Construction shares surged 10 percent after the company posted a net profit at Rs 3.1 crore in first quarter as against loss of Rs 34.2 crore in a year ago period, helped by other income.

Total income rose by 38 percent on yearly basis to Rs 484.5 crore while other income of the company jumped to Rs 24.7 crore in April-June quarter from Rs 17.7 crore in corresponding quarter of last fiscal.

10:30am The market remained in a range in morning trade Monday with the equity benchmarks hovering around their previous closing values.

The BSE Sensex is up 2.71 points at 19166.73, and the NSE Nifty is down 8.15 points at 5669.75, but the broader markets are under pressure.

Financial Technologies (FTIL), YES Bank, Reliance Communications and BHEL are most active shares on exchanges.

FTIL shares continued to remain in focus with a surge of 11.7 percent after hitting a low of 20 percent in early trade Monday. National Spot Exchange (NSEL) said that Rs 2,181 crore will be paid by members and the remaining Rs 3,107 crore will be settled on weekly basis, but this was rejected by Forward Markets Commission (FMC).

YES Bank shares dropped nearly 4 percent. Media reports suggest that the bank's co-promoter Rana Kapoor has initiated settlement talks with Madhu Kapoor.

Declining shares outpaced advancing ones by 851 to 656 on the Bombay Stock Exchange.

10:00 am Boardroom: S Narsing Rao, Chairman and managing director of Coal India in an interview to CNBC-TV18 said that e-auction volumes remained flat but realisations slipped significantly to Rs 2,140 per tonne.

Rao further said production guidance will remain at 48 million tonne (MT). Though sales volume was up 2 percent (year-on-year) Y-o-Y, blended realisation de-grew around 2 percent Y-o-Y, he added.

9:50 am: Strides Arcolab surges 4 percent on the BSE as shareholders have approved FII investment limit to 74 percent from 52 percent in the company.

"As required under the FEMA Regulation, the Company has made necessary intimation to the Reserve Bank of India confirming the shareholders' approval for the increased Fll investment limit," the company said in a statement.

9:40 am Alert: As downward pressure continues on rupee and share prices, India has moved dangerously close to slipping out of the elite 14-member global league of stock markets having a trillion-dollar valuation, reports PTI.

Currently at USD 1.004 trillion, Indian market is managing to stick to its trillion-dollar tag by a wafer-thin margin of 0.4 percent and may lose this status by any further fall of this small magnitude in rupee or stock valuations.

According to the data available with the stock exchanges, the total value of all listed companies in the country has retained the trillion-dollar level by a margin of less than one per cent for many days now.

9:30 am Gainer: Financial Technologies continue to remain in focus today with a surge of around 8 percent on the BSE. NSEL has issued a proposed settlement cycle involving Rs 5,600 crore . NSEL said that Rs 2181 crore will be paid by members but the remaining Rs 3107 crore will be settle on weekly basis, but this was rejected by FMC.

9:25 am Record low: Shares in Coal India fell more than 2 percent to a record low of Rs 248 on poor April-June qaurter earnings . With such a downfall, the stock price is almost nearing its IPO price which was fixd at Rs 245 per share.

Its first quarter net profit falling higher-than-expected 16.5 percent year-on-year to Rs 3,731 crore, led by lower realisation from E-auctin sales.

Chairman and managing director, S Narsing Rao, in a press conference, said realisations from e-auction slipped significantly to Rs 2,140 per tonne in April-June quarter as against Rs 2,561/tonne Y-o-Y.

Net sales declined marginally to Rs 16,472 crore in April-June quarter from Rs 16,500.6 crore in a year ago period, which too came in lower than forecast.

9:20 am Big crash: State-owned Bharat Heavy Electricals  ( BHEL ) shares crashes around 12 percent on the BSE. On Saturday it reported a dismal performance on every parameter as the first quarter standalone net profit halved to Rs 465.4 crore from Rs 920.9 crore in a year ago period, dented by weak power segment performance, despite higher other income.

Net sales dropped 23.7 percent to Rs 6,352.5 crore in April-June quarter from Rs 8,326.2 crore in corresponding quarter of last fiscal.

Earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 74.7 percent on yearly basis to Rs 283 crore and EBITDA margin plunged 890 bps year-on-year to 4.5 percent in the first quarter.

The market has opened on a tepid note. The Sensex is up 17.90 points at 19181.92 while the Nifty is up 4.50 points at 5682.40. About 216 shares have advanced, 96 shares declined, and 25 shares are unchanged.

Meanwhile, economic downslide set to dominate the proceedings as the monsoon session of Parliament begins today. Many ordinances including the food security ordinance will come up for conversion into laws.

The Indian rupee opened at 61.01 per dollar versus 61.01 Friday.

Agam Gupta, Standard Chartered Bank said, "The rupee is expected to open stronger on dollar weakness. However, the rupee will be in a range on domestic demand supply mismatch along with fears of RBI intervention or measures to stem volatility. The range for the day is seen between 60.75 - 61.25/USD."

On the global front, US markets closed modestly higher in thin volume despite a tepid jobs report. While the data was disappointing, it still showed job growth and may also make the Federal Reserve a bit more hesitant about curtailing its bond purchases in September. The CBOE volatility index fell to sub 12 levels.

In Europe, markets closed mixed following weak jobs data from the US.

Asian shares were soft in early trade as the US dollar was on the defensive after data showed US employers slowed their pace of hiring in July, while the NZ dollar dropped after a food-safety scare affected exports of the country's largest company, reported Reuters.

Hong Kong's Hang Seng rose 0.22% or 48.93 points at 22,239.90.

Japan's Nikkei shed 1.37% or 98.18 points at 14,267.98. Singapore's Straits Times was down 0.36% or 11.56 points at 3,242.57.

In the currency space, the dollar remains on the backfoot. The euro is still above 1.32. The dollar index is at 82 mark. The dollar yen is around 98.

Brent crude slips to USD 108 on demand growth concerns. Nymex too slips to sub USD 107. Gold hovers around USD 1310 an ounce.

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