Sensex up 158 points; metals & defensives lead, SBI falls 3.4%

It was a positive start to the week with the equity benchmarks gaining 0.8 percent Monday, after losing more than two percent last week. Some short covering and robust trade data led the support.
 
The BSE Sensex rose 157.64 points to close at 18946.98 after scoring more than a double century intraday while the NSE Nifty advanced 46.75 points to 5612.40.

Meanwhile, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining more than 1.5 percent. Advancing shares outnumbered declining ones by 1438 to 815 on the BSE.

Trade data for July was strong today with the exports rising 12 percent and imports falling 6.2 percent on lower oil import. Trade deficit declined to USD 12.2 billion from nearly USD 18 billion in a year ago period.

Metals, FMCG, healthcare, capital goods and auto stocks rallied while banks remained under pressure on fears of more rupee measures.

Metals shares saw strong demand with the BSE Metal index rising 4.5 percent following China's positive economic data. Tata Steel (ahead of earnings on Tuesday) and Jindal Steel rallied 8-9 percent.

Sun Pharma was the star performer among defensives, soaring 6.6 percent after first quarter earnings. Credit Suisse has an outperform rating on the stock; the brokerage house raised its target price to Rs 585 and increased earnings per share estimate by 14 percent to reflect higher US sales, lower tax rate and a rupee rate of 60 per dollar.

ITC, HDFC, Hindustan Unilever, Larsen & Toubro and Hero Motocorp shares gained 2-3 percent.

Shares of State Bank of India, the country's largest lender, dropped 3.4 percent post disappointing earnings in April-June quarter. Net profit fell higher-than-expected 14 percent year-on-year to Rs 3,241 crore while its net NPA jumped 36.6 percent Q-o-Q to Rs 29,989 crore during the quarter.

The BSE Bankex lost one percent; private sector lenders ICICI Bank and HDFC Bank were down 1-1.6 percent.

Private oil & gas explorer Reliance Industries, software services exporter TCS and power producer Tata Power declined 1.7-3 percent.

Aurobindo Pharma shares surged 12 percent after reporting a profit of Rs 18 crore in Q1 as against loss of Rs 129 crore Y-o-Y and the board also approved spinning off the injectable business.

Manappuram Finance rallied 4.5 percent after posting a profit of Rs 53 crore in June quarter versus a loss of Rs 141 crore last quarter.

Shriram EPC gained 3 percent as Irish cement maker CRH acquired Sree Jayajothi Cements, a unit of Shriram Group for Rs 1400 crore. Shriram EPC held 68 percent stake in that company.

Gujarat Gas shares added another 16 percent gains on top of a 20 percent rally last Friday post strong earnings. Nomura upgraded the stock to a buy with a target price of Rs 250. The brokerage house says that while concerns remain on likely restructuring, valuations at 6.1x P/E and 1.5x P/B are too compelling.

Tech Mahindra and Marico gained 1-1.7 percent while Britannia Industries jumped 5.4 percent on higher-than-expected earnings in June quarter. GVK Power spiked 12 percent after its Q1 loss more than halved to Rs 30 crore (year-on-year) on better performance from airport segment and overall improvement in margins.

4:00 pm Market closing: Combination of short covering and robust trade led to a good day for market today. The Sensex nearly scored a double century in intra-day trade before closing with gains of over 150 points, ending at 18946.98 while the Nifty was up 46.75 points at 5612.40. About 1438 shares have advanced, 815 shares declined, and 124 shares are unchanged.

The rally was led well by the beaten down metals pack which continued last week's short covering. HDFC had a strong showing after Morgan Stanley said the recent NHB move on lowering risk weights will have a positive impact.

Sun Pharma gained 7 percent on strong earnings and FMCG stocks came back in radar after stunning performance from Britannia . The stock rallied in trade and had a rub-off effect on ITC and HUL in trade today. The midcaps outperformed with an advance/decline ratio of 3:1. GVK and Aurobindo Pharma were the major gainers.

3:50 pm Govt move to check rupee: The government will ask state-run oil producers to raise more funds through external commercial borrowings, Finance Minister P Chidambaram said, as the government tried to sooth investor nerves about a sharp fall in the value of the rupee.

3:40 pm Sebi move: Listed public sector companies have sold shares worth over Rs 2,500 crore to comply with minimum public shareholding norms for which the deadline ended last week, a report said today.

Capital market regulator Securities and Exchange Board of India (Sebi) norms required all state-run companies to have at least 10 percent public shareholding by August 8.

Till June 30, as many as 16 public sector companies were required to meet Sebi's minimum public shareholding norms.

3:30 pm Market outlook: From the beginning of the year itself, Sandeep Shenoy of Anand Rathi Financial Services was of the view that 5600-6100 would be the trading zone for the market to move in before the traction from earning could come and lend support. The next uptick for the market would emerge from Q2 earnings which is three months away, he adds.

According to him, the metal space will continue to remain an underperformer for sometime now. NMDC and MOIL might be looking good, but other major players such as Tata Steel or JSPL are not yet out of the woods, he says.

In the pharma space, Shenoy says Sun Pharma is the TCS " target="_blank" title="Tata Consultancy Services">Tata Consultancy Services (TCS) of the pharma industry. The traction in earning is so humungous that this stock has reached a scale of its own, he says.

3:20 pm Earnings: Marico beats the street estimates on every parameter except total income during April-June quarter. Consolidated net profit grew by 27.4 percent on yearly basis to Rs 157.7 crore in first quarter.

Total income rose by 8.8 percent year-on-year to Rs 1,382 crore in June quarter from Rs 1,270.3 crore in a year ago period, which was slightly below expectations.

Analysts on an average had expected FMCG major to report net profit of Rs 135 crore on total income of Rs 1,397 crore.

The market pares gains in the last trading hour. The Sensex is up 147.37 points at 18936.71 while the Nifty is up 43.20 points at 5608.85.  About 1443 shares have advanced, 796 shares declined, and 131 shares are unchanged.

HDFC shares rallied nearly 5 percent, while ONGC , ahead of its earnings, rose more than 2 percent.

Tech Mahindra rose more than 2 percent after higher-than-expected earnings during April-June quarter. The company also increased FII investment limit to 45 from 35 percent.

State Bank of India's ( SBI ) June quarter numbers disappointed the street with the bad loans surging by 19 percent over the previous quarter. Shares fell more than 3 percent as analysts see further downgrades.

02:50pm Aurobindo Pharma jumped over 13 percent after reporting a profit of Rs 18 crore in Q1 as against a loss of Rs 128.9 crore Y-o-Y. The board also approved spinning off the injectable business.

Manappuram Finance rallied 4 percent after reporting a profit of Rs 53 crore as against loss of Rs 141 crore Q-o-Q.

Shriram EPC surged 8 percent as Irish cement maker CRH acquired Sree Jayajothi Cements, a unit of Shriram group, for Rs 1400 crore. Shriram EPC held 68 percent stake in that company.

02:26pm The market extended gains in afternoon trade with the both equity benchmarks rising more than one percent, aided by FMCG, metals, capital goods and pharma stocks.

The BSE Sensex is up 237.28 points at 19026.62, and the NSE Nifty is up 68.90 points at 5634.55.

HDFC shares rallied nearly 5 percent, while ONGC , ahead of its earnings, rose more than 2 percent.

Tech Mahindra rose more than 2 percent after higher-than-expected earnings during April-June quarter. The company also increased FII investment limit to 45 from 35 percent.

State Bank of India's ( SBI ) June quarter numbers disappointed the street with the bad loans surging by 19 percent over the previous quarter. Shares fell more than 3 percent as analysts see further downgrades.

Macro data cheers the market with the exports rising 12 percent in July and imports falling 6.2 percent on lower oil import. Trade deficit for July was at USD 12.2 billion, down from nearly USD 18 billion in a year ago period.

Meanwhile, index of industrial output will be announced after market hours today. A CNBC-TV18 poll sees the June IIP data at negative 1.3 percent as against negative 1.6 percent in May.

2:00 pm Trade data: Exports rose 11.64 percent in July to USD 25.83 billion from the previous month but the trade deficit was almost unchanged at USD 12.27 billion, keeping pressure on the current account deficit and the beleaguered rupee.

Imports fell 6.2 percent from a year earlier to USD 38.1 billion, the trade ministry said on Monday citing provisional trade data.

1:50 pm Brokerages on SBI earnings: Citi says SBI's asset quality weaker than other PSUs. It says headline numbers driven by higher non-interest income and lower provisioning. UBS adds that its first quarter performance missed on asset quality.

1:40 pm Market outlook: Vibhav Kapoor, IL&FS believes that market is in the danger of shifting downwards from the 5500-6100 range due to worsening of fundamentals of the economy.

In an interview to CNBC-TV18, he says, the market has remained weak for a long time now due to which interest rates are going up, money market is tightening and therefore, is likely to have a negative impact on the growth going forward.

Talking sector-specific, he believes pharma sector will continue to outperform though banks might face problems if economy slows down. He recommends avoiding public sector banks despite big fall in their stock prices.

1:30 pm Result poll: ONGC's June quarter profit may decline around 16.5 percent year-on-year to Rs 5076 crore on lower realisations. The state-run firm's sales will decline around 1.5 percent Y-o-Y to Rs 19777 crore, states CNBC-TV18 poll. The firm will announce numbers later in the day.

Analysts on an average expect the firm's net realisation to slip to USD 42.8/bbl as against USD 46/bbl. During the quarter, both oil and gas production will fall  anything between 1-5 percent Y-o-Y, they estimate.

1:20 pm Rupee outlook: Ananth Narayan of Standard Chartered has given his vote of confidence to the Reserve Bank of India's (RBI) measures on the rupee by saying the currency hitting its all-time low of 61.80 again against the dollar is unlikely now.

"The action since July 15 and the words, which have come in from the ministry, clearly indicated the authorities are watching it extremely carefully. So purely from a sentiment perspective and from a market confidence perspective, I think the often talked about line in the sand is now there again," adds Narayan.

 The RBI will be auctioning Rs 22,000 crore of government cash management bills every week, it said in a statement, without specifying for how many weeks the sales would last.

Narayan expects the RBI to announce more policy reforms if the rupee starts showing signs of weakness again.

The market has managed to gather pace in afternoon trade as the Nifty is above 5600 led by metals and pharma but banks are refusing to budge from the weak levels. The Sensex is up 200.37 points at 18989.71, and the Nifty adds 55.25 points at 5620.90. About 1214 shares have advanced, 744 shares declined, and 116 shares are unchanged

The midcap index jumps over a percent.
Among the gainers, Tata Steel and Jindal Steel are leading with a gain of around 8 percent each. Shares of metal companies are gaining riding on positive Chinese economic data.

China's factory production increased 9.7 percent in July Y-o-Y, the National Bureau of Statistics said on Friday. China is the world's largest consumer of copper and aluminum.

On the downside is SBI (down 3 percent) on the back of dismal April-June qaurter. India's largest lender disappointed the street with the first quarter net profit falling higher-than-expected nearly 14 percent year-on-year to Rs 3,241 crore, dented by higher provisions against bad loans and muted growth in the net interest income, which grew just by 3.5 percent to Rs 11,512 crore in April-June quarter from Rs 11,119 crore.

However, the growth in net interest income was a little higher than analysts' forecast.

12:55pm Manappuram General Finance rallied 5 percent after reporting a profit of Rs 53 crore as against a loss of Rs 141 crore in previous quarter.

Kingfisher slumped 3 percent in trade after SBI Cap took possession of the Kingfisher house in Mumbai. The company owes over Rs 6,000 crore to SBI.

Shriram EPC shares surged 8 percent as Irish cement maker CRH acquired Sree Jayajothi Cements, a unit of Shriram Group for Rs 1400 crore. Shriram EPC held 68 percent stake in that

12:20pm Equity benchmarks gained momentum in noon trade with the Nifty soaring above the 5600 level, led by metals and pharma stocks, but banks are under pressure. CLSA cuts its overweight position on India while Nomura slashed Sensex target to 20000 for 2014.

The BSE Sensex is up 173 points at 18962.34, and the NSE Nifty is up 41.10 points at 5606.75 while BSE Midcap and Smallcap indices gained more than one percent.

More than 1200 shares advanced while 716 shares declined on the BSE in noon trade.

Sun Pharma , Tata Steel and Jindal Steel are top gainers among largecaps, rising 7-8 percent followed by Sterlite Industries with 5 percent gains.

Aurobindo Pharma jumped over 7 percent after reporting a profit of Rs 18 crore. The board also approved spinning off the injectable business.

Globally, it is a mixed session across Asia. Japan tanked nearly a percent while Chinese markets hit a 1-month high on economic optimism. Hang Seng clocked over 2 percent gains.

The Nikkei share average dropped to a 7-week low on Monday after Japan's economy grew more slowly than expected in the last quarter, while thin trade dragged down brokerage stocks on worries about lower commissions.

The benchmark Nikkei fell 0.7 percent to 13,519.43 and the broader Topix dropped 0.6 percent to 1,134.62. Only 1.78 billion shares changed hands, the lowest level since December 11.

Japan's economy grew an annualised 2.6 percent in April-June, well below the market consensus of 3.6 percent, which added to concerns about a delay in a planned sales tax hike to tackle massive government debt.

12:00 am Gold update: Gold prices rose sharply by Rs. 424, or 1.53 per cent, to Rs. 28,180 per 10 gram in futures trade on firm global cues, reports PTI.

At the Multi Commodity Exchange, gold for delivery in far-month December was up sharply by Rs. 424, or 1.53 per cent, to Rs. 28,180 per 10 gram in business turnover of 63 lots.

The metal for delivery in October also moved up by Rs. 422, or 1.53 per cent, to Rs. 28,328 per 10 gm in a turnover of 1,627 lots.

11:50 am FII view: Nomura slashed its March 2014 target for the Sensex to 20,000 from 21,700, joining the ranks of foreign brokerages turning skeptical on the Indian stock market.

Recently, Goldman Sachs had lowered its Nifty target to 6200 from 7000, and Morgan Stanley had reduced its Sensex target to 19720.

The Nomura report highlights weak growth across sectors, and the renewed upward pressure on interest rates as the main reasons for the downgrade.

"After revisiting a host of real activity indicators, we find that not only does growth remain weak across sectors of the economy, its momentum has ratcheted down further over the past few months," says the report by Nomura's Prabhat Awasthi and team.

11:45 am Management speak: Despite the scenario unlikely to improve in short term, Parag Parikh, ED & and CFO, Gammon Infra is confident of doing Rs 1,000 crore revenues in FY14 . "We are in advance stage of completing toll bridge alongside Godavari river and our Patna Road project is also expected to be completed by March," he told CNBC-TV18.

Gammon has achieved financial closure of its key projects including Vijayawada Gundugolanu Road, Gorakhpur bypass and Sidi-Singrauli stretch, but again high interest cost is a big concern.

Meanwhile, for having Rs 1,000 crore revenues by March next year, the firm has to do net around Rs 250 crore revenues each quarter which seems challenging with big ticket orders being hard to come by and those in kitty need to be completed on time for this kind of sales growth.

11:40 am Output: Car sales in India fell an annual 7.4 percent in July, an industry body said on Monday, the ninth straight month of fall, as rising fuel costs and high interest rates continued to keep demand subdued.

Automakers sold 131,163 cars in India last month, according to data from the Society of Indian Automobile Manufacturers (SIAM).

The market seems to be extremely volatile. The Sensex is up 118.84 points at 18908.18, and the Nifty up 23.70 points or 0.43% at 5589.35. About 1139 shares have advanced, 632 shares declined, and 108 shares are unchanged.

A CNBC-TV18 poll sees the June IIP data coming in at negative1.3 percent versus a negative 1.6 percent reading seen in may. Also watch out for the trade data

Meanwhile, metals and pharma are leading but banks are sulking. Clsa has cut its overweight position on India while Nomura slashes Sensex 2014 target to 20000.

State bank of India is down nearly 3 percent ahead of its earnings as asset quality concerns continue. ONGC's net realistions is expected to come down sharply as absolute subsidy burden remains intact.

Sun Pharma jumps 7 percent on strong fundamentals and robust sales growth in the US. Cipla too sees smart upmove post numbers.

Aurobindo Pharma too jumps over 7 percent after reporting a profit of 18 Rs crore. The board also approved spinning off the injectable business.

10:55am Cipla gained 3 percent on solid results with a revenue growth of 26 percent and profit after tax growth of 10 percent. Total income was boosted by fees from technology and other income. CLSA has upgraded the stock to outperform with a target price of Rs 470. The brokerage house raised its estimates by 3 to 5 percent due to an operational beat as well as inclusion of the Medpro acquisition.

Gujarat NRE Coke surged 6 percent as the company reported net profit of Rs 3.67 crore as against net loss at Rs 11.02 croreon lower forex loss and higher other income.

BGR Energy rallied 5.5 percent as the revenue growth of 35 percent and PAT growth of 11 percent beat street estimates.

Manappuram General Finance rose 5 percent after reporting a profit of Rs 53 crore in Q1 as against loss of Rs 141 crore in previous quarter.

The rally continued on Gujarat Gas, rising 15 percent. Nomura upgraded the stock to a buy with a target price of Rs 250. The brokerage house says that while concerns remain on likely restructuring, valuations at 6.1x P/E and 1.5x P/book are too compelling.

10:30am The market is flat-to-positive in morning trade after erasing early gains, but the broader markets outperformed benchmarks. Healthcare, FMCG, metals and auto stocks are supporting the market while SBI , TCS , HDFC Bank , Reliance Industries and BHEL are under pressure.

The BSE Sensex is up 64.05 points at 18853.39, and the NSE Nifty is up 9.05 points at 5574.70. Midcap and Smallcap indices gained 0.5-0.9 percent.

Shares of country's largest lender State Bank of India plunged 3 percent ahead of first quarter earnings today. According to a CNBC-TV18 poll, analysts on an average expect a 5 percent fall in net profit at Rs 3,565 crore Y-o-Y.

Sun Pharma surged 7.5 percent after it posted a loss of Rs 1276 crore due to Pfizer settlement in Q1 as against profit of Rs 795.5 crore in a year ago period. The company paid Rs 2,520 crore in Pfizer settlement. Adjusted profit stood at Rs 1,244 crore for the quarter.

Aurobindo Pharma shares gained nearly 10 percent in initial trade Monday on strong Q1 earnings and demerger of injectable business.

Among midcaps, Gujarat Gas, Auroline Industries, Orchid Chemical and Delta Corp shares rallied 11-17 percent while IRB Infrastructure dropped 5 percent.

10:00 am Big Deal: Shriram EPC shares rallied more than 14 percent in early trade Monday after it announced today that it has finalised the sale of stake in Sree Jayajothi Cements (SJCL) to My Home Industries (MHIL).

MHIL is a 50:50 joint venture between Ireland-based CRH Plc and Hyderabad-based My Home Group. MHIL has valued SJCL at an enterprise value of Rs 1,400 crore.

9:50 am Exclusive: With the Reserve Bank (RBI) further looking to reduce money flow in the system by sucking out Rs 22,000 crore through cash management bills every Monday, short-term borrowing rates are likely to go up , says Pratip Chaudhuri, chairman of State Bank of India .

There was no threat to long term rates as most banks have held their long term paper in the held to maturity, or HTM, category, Chaudhuri told CNBC-TV18.

He does not see base rates rising right away. He says commercial paper (CP) market and the certificates of deposit (CD), which were earlier in the range of 8-9 percent, would certainly move beyond the cut-off in the RBI auction of short-term paper.

The classification for raising rates is not along public sector or private sector lines. It would depend on who is at the short end of the curve, whose maturities are coming up, they would be required to raise rates, Chaudhuri says.

9.44 am Market level: The market has given up its gains as the Nifty sinks below 5600. The Nifty is at 5573, up 8 points while the Sensex is up 43.34 points at 18832.68, and the Nifty up 7.85 points at 5573.50. About 735 shares have advanced, 349 shares declined, and 56 shares are unchanged.

9:40 am Earnings expectation: State Bank of India ( SBI ), will report April-June quarter today. Continued pressure on asset quality and operating profit is likely on the country's largest bank.

From oil & gas space, ONGC's revenues are seen lower at Rs 19777 crores due to lower volumes. Net realistions may come down sharply as absolute subsidy burden intact.

9:30 am Buzzer: Aurobindo Pharma surged more than 7 percent. Its April-June consolidated net profits have come in at Rs 18.6 crore vs loss of nearly Rs 129 crore (Y-o-Y). The topline too has come in higher at nearly Rs 1700 crore vs under Rs 1200 crore in the same quarter last year. Additionally, the board has approved the spin-off of their injectibles business.

9:20 am  Gainers and losers: Manappuram Finance gained around 5 percent on the BSE. However, its April-June quarter profits have dipped all the way to Rs 52.9 crore vs nearly 158 crore in the same quarter last year. Total income too has come in lower at Rs 572 crores vs Rs 711 crores (YoY).

The market gained more than half a percent in early trade with the Nifty rising above 5600 level, aided by healthcare, FMCG, metals and auto stocks. Sun Pharma topped the buying list, gaining more than 4 percent after first quarter earnings.

Top lender State Bank of India dropped over one percent ahead of April-June quarter earnings in afternoon today.

The BSE Sensex is up 107.99 points at 18897.33, and the NSE Nifty is up 30.35 points at 5596. Advancing shares outnumbered declining ones by 495 to 176 on the BSE.

All eyes will be on the macros today as the June IIP data is due today. A CNBC-TV18 Poll sees the data coming in at -1.3% versus a -1.6% reading seen in may.

The government now all set to announce more measures to revive the rupee. North block could hike the limit on external commercial borrowings (ECBs) and PSUs may issue quasi-sovereign bonds and an import duty hike on luxury goods is also on the

the Indian rupee opened higher by 41 paise at 60.47 per dollar as against Thursday's closing price of 60.88.

Rajeev Malik, CLSA said, "RBI has announced issuance of short-term paper to mop up liquidity in order to stabilise the rupee. The rupee will have a marginal positive reaction, but other asset classes such as bonds and equities will likely be weaker. We retain our 2014-end forecast of 65/USD for the rupee."

Meanwhile, Asian markets were trading firm. China's Shanghai Composite rose 0.82 percent or 16.90 points at 2,069.13. Hong Kong's Hang Seng advanced 1.31 percent or 284.83 points at 22,092.39. Japan's Nikkei shed 0.75 percent or 102 points at 13,513.19.

In the currency space the Euro holds above 1.33 to the dollar. The dollar index is around 81.10 levels. The dollar yen is around 96.

In commodities, Brent Crude is hovering around USD 107 per barrel. From precious metals space, gold rises to USD 1330 an ounce.