Sensex up 326 points, Nifty gains 100 pts; ITC remains weak
04 September 2013
3:35 pm Forex norms: The Reserve Bank of India's move to partially relax some of the restrictions imposed on capital outflows aims at attracting slightly longer term capital flows, says Manoj Rane, MD & Head Fixed Income & Treasury-India, BNP Paribas.
The government has to fund the huge current account deficit (CAD) and this step is in line with that objective, he told CNBC-TV18 in an interview.
RBI eased ECB norms today allowing companies to use overseas borrowings for general corporate purposes clarifying that there is no intention to restrict bonafide overseas investments. It also said that its August 14 curbs on outward investments will not apply retrospectively.
3:20 pm Yellow metal update: Gold prices gained Rs 660 to Rs 32,200 per ten grams in the national capital today, mainly on sustained buying by stockists driven by firming global trend. Silver also rose for the third day by adding Rs 70 to Rs 55,500 per kg on increased offtake by industrial units and coin makers, reports PTI.
Traders said sustained buying by stockists amid a firming global trend mainly led to an upsurge in gold prices. Increased offtake by industrial units and coin makers kept silver prices firm for the third day, they said. Gold in New York, which normally set price trend on the domestic front, rose by USD 15.70 to USD 1412.20 an ounce and silver by 3.19 percent to USD 24.28 an ounce.
The market is once again firing away with strong gains as the Sensex is up 337.86 points or 1.85 percent at 18572.52, and the Nifty up 105.85 points or 1.98 percent at 5447.30.
About 1291 shares have advanced, 839 shares declined, and 157 shares are unchanged.
Banks, oil & gas, metals and tech stocks are holding up the indices while realty stocks are under heavy selling pressure. BHEL , Tata Motors , Bharti Airtel , Hindalco and ICICI Bank are top gainers in the Sensex. While index heavy ITC is still down around 1 percent.
Raghuram Rajan's taking over as the next RBI governor seems to be boosting the market for now. Former deputy governor Subir Gokarn says Rajan won't lessen RBI's focus on inflation but he may look for new ways to encourage dollar flows.
02:59pm Block deals
Ultratech Cement rallied 3 percent after more than Rs 81 crore worth of equity shares changed hands on the National Stock Exchange.
Zee Entertainment declined 2 percent. Nearly Rs 11 crore worth of shares exchanged hands on the BSE.
Glenmark Pharma lost 1.8 percent amid hefty volumes on the BSE. Nearly Rs 14 crore worth of equity shares changed hands at Rs 512 level.
02:50pm Market Update
The market gained two percent again in late trade on further buying in technology, telecom, financials and oil & gas stocks.
The Sensex is up 328.09 points or 1.80 percent at 18562.75, and the Nifty is up 103.25 points or 1.93 percent at 5444.70.
Axis Bank , Ranbaxy Labs , State Bank of India , YES Bank, United Spirits , ICICI Bank and ITC are most active shares on exchanges.
02:40pm Top Gainers & Losers
Ranbaxy Labs is the top gainer in the Nifty, rising 9 percent followed by BHEL and IndusInd Bank with 6 percent gains.
Jaiprakash Associates , Tata Motors , Bharti Airtel , Hindalco Industries and Cipla gained 3-5 percent.
Oil & gas explorer Reliance Industries , top software services exporter TCS and country's largest private sector lender rallied more than 2.5 percent. Infosys and ONGC gained 2 percent each.
However, ITC remained under pressure, falling more than one percent followed by Maruti and HDFC Bank with marginal losses.
02:30pm Stocks In News
Real estate companies like DLF and Indiabulls Real Estate are down 1-2 percent after the RBI objected strongly to builder schemes like 80:20, saying it should not be paid upfront to developers and wants home loans to be linked to stage of completion of the project.
Ipca Labs shares gained 8 percent after its Indore manufacturing facility received USFDA approval. This will enable the company to commercialise oral solid dosage formulations in the US market from this formulations manufacturing facility.
SpiceJet rose 3 percent as the air carrier has announced an airfare hike by 25-30 percent owing to the higher aviation turbine fuel prices. Jet too has hinted in that direction.
02:15pm Equity benchmarks remained strong in afternoon trade on the back of short covering today after nearly 4 percent fall in previous session.
The Sensex is up 248.82 points or 1.36 percent at 18483.48, and the Nifty is up 78.20 points or 1.46 percent at 5419.65.
Parag Thakkar of HDFC Securities does not see an absolute collapse in the market going forward. The news of Syrian crisis and QE taper by US Fed has been accepted by the market, he says.
However, the market may have a tough time if the crude prices touch USD 120 per barrel on the back of what is happening in Syria, Thakkar told CNBC-TV18. It is the right time to buy good quality stocks on the decline, he adds.
Meanwhile, Indian rupee gained 53 paise to 67.10 against the US dollar. RBI clarified on overseas direct investments by Indian companies, saying investment curbs are not applicable for deals before August 14.
In the commodity space, MCX gold October futures fell 2.66 percent to Rs 33,522 per 10 gram and silver September futures lost 4 percent to Rs 55,100 per kg.
Crude also lost 2.6 percent to Rs 7,315 per barrel and copper tumbled 3 percent to Rs 494.30 per kg.
In the international market, gold and Nymex crude slipped 0.5 percent each while copper and silver declined 1-2 percent.
1:55 pm FII view: Gautam Chhaochharia, head of India Strategy, UBS expects Nifty to hover in the range of 5000-5850 this year. He believes slowing growth is causing a collateral damage to the economy, but on the other hand there are pockets such as exports that will benefit and therefore, overall impact on the market is unlikely to be negative earnings growth.
However, if the vicious cycle continues and rupee crosses 70/USD then market may get further negative, he adds. According to him, the rupee is unlikely to stablise even at 66-67/USD in the near-term.
In an interview to CNBC-TV18 he says the next sentiment booster for the market can come from the Reserve Bank of India (RBI) announcing more measures for the currency. ''One immediate hope beyond the administrative support would be the pension and insurance bill which should be done in Parliament in this session,'' he adds
1:45 pm View on gold: Kishore Narne, Motilal Oswal Commodity Broker has a positive outlook on gold suggests buying the yellow metal now. According to him, the ongoing Syrian crisis and weakness in rupee is likely to trigger safe haven buying in gold.
Meanwhile, one can buy crude with a stop losses of Rs 7,430 per barrel and targets of Rs 7,570-7,585 per barrel for the day, he told CNBC-TV18.
1:35 pm Buzzer: Shares of Ipca Laboratories spiked 9 percent in afternoon trade Wednesday after the pharma company received approval from USFDA for Indore manufacturing facility.
"The US Food and Drug Administration (USFDA), following an inspection, has found acceptable the company's oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh," Ipca said in its filing.
After this approval, the company will be able to commercialise oral solid dosage formulations in the US market from this formulations manufacturing facility.
1:20 pm Opinion: Former Reserve Bank (RBI) deputy governor, Subir Gokarn feels that Raghuram Rajan's biggest challenge as RBI Governor lies in convincing the policy makers to address the core problems of deficits.
The question remains whether the RBI wants to focus on growth, currency volatility or inflation. Rajan may not change the central bank's stance completely, Gokarn, director of research at Brookings India told CNBC-TV18. The new Governor may look to increase dollar flows via sovereign bond issues, he adds.
Stressing on his point to address structural problems, Gokarn says that the RBI's short-term measures will hold significance if they supplement long-term steps. "We have to deal with is the current account deficit (CAD)", he says.
The market holds ground but loses steam slightly in afternoon trade. The Sensex is up 131.88 points or 0.72 percent at 18366.54, and the Nifty adds 46.35 points or 0.87 percent at 5387.80. About 1138 shares have advanced, 779 shares declined, and 151 shares are unchanged.
The rupee is off day's lows post a weak opening after RBI clarified on overseas direct investments by Indian companies. The central bank said that investment curbs are not applicable for deals before August 14. Bonds decline as the rupee gained in strength.
Real estate companies like DLF and Indiabulls Real Estate are down 2-3 percent after the RBI objected strongly to builder schemes like 80:20. The RBI said that should not be paid upfront to developers and wants home loans to be linked to stage of completion of the project.
BHEL , Tata Motors, Bharti Airtel , Hindalco and TCS are top gainers in the Sensex. Meanwhile, ITC , Martui Suzuki, Sun Pharma , HUL and HDFC Bank are major losers in the Sensex.
12:59pm Market Update
The market erased some gains from day's high on profit booking. The Sensex is up 228.77 points or 1.25 percent at 18463.43, and the Nifty is up 74.75 points or 1.40 percent at 5416.20.
HDFC Bank trimmed gains from 1.5 percent to 0.3 percent while Infosys cut gains from 3 percent to 2 percent.
Cigarette major ITC and car maker Maruti Suzuki lost more than one percent.
12:50pm Rupee update
The rupee climbed above the 67 level on fall in dollar demand. It gained 75 paise to 66.88 against the US dollar after hitting an intraday low of 68.60 per dollar in early trade.
The Reserve Bank of India (RBI) aggressively sold dollars to prevent the currency from falling to a record low amid volatility in global markets over the US push for limited US strikes on Syria, reports Reuters.
Traders also cited hopes that Raghuram Rajan, who takes over at the RBI on Wednesday, will bring a new approach to the central bank's defence of the rupee, which has so far relied on a risky strategy to drain cash and raise short-term interest rates.
The Sensex is up 306.51 points or 1.68 percent at 18541.17, and the Nifty is up 97.85 points or 1.83 percent at 5439.30.
12:45pm Global Update
European markets are flat in early trade amid geo-political tensions. Asian markets are mixed in late trade, Shanghai and Nikkei gained 0.2-0.5 percent while Hang Seng declined 0.3 percent.
12:30pm Stocks in News
Ipca Labs shares surged 8 percent after the pharma company says that the US-FDA, following an inspection, has found acceptable the company's oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh.
Fresenius Kabi rallied 7 percent as the government late last evening approved 17 FDI proposals including Rs 349 crore proposal of Fresenius Kabi. This will allow the parent company to acquire shares of the Indian subsidiary which will then be de-listed.
12:15pm It is a strong momentum in the market in noon trade with the equity benchmarks rising two percent on the back of sharp recovery in rupee.
The Sensex is up 364.99 points at 18599.65, and the Nifty is up 114.80 points at 5456.25. More than two shares advanced for every share declining on the Bombay Stock Exchange.
The rupee gained 57 paise to 67.06 against the US dollar after showing a 144 paise recovery from day's low of 68.52 per dollar.
According to Agam Gupta, Standard Chartered Bank , the Reserve Bank of India's intervention through state-run banks must have checked the fall in the Indian currency. He believes the new RBI governor might come up with non-resident Indian (NRI) bonds to stem rupee fall.
BSE Oil & Gas, Metal, Capital Goods, Bank, Auto, Healthcare, IT indices gained 2-3 percent.
11:50 am Macro data: Indian services activity shrank in August at its quickest pace since the depths of the global financial crisis as new business dried up, a survey showed, the latest evidence that Asia's third-largest economy is rapidly losing steam even as policymakers battle a full-blown currency crisis, reports Reuters.
Taken together with a survey of Indian factories published on Monday that showed activity shrank for the first time since early 2009, the data will stoke worries that growth in the July-September quarter could be even weaker than in April-June.
11:45 am Market outlook: Speaking to CNBC-TV18, Saurabh Mukherjea of Ambit Capital says the market will now be eyeing the new Reserve Bank Governor Raghuram Rajan's takeover and the policy statements coming from him. He believes the central bank will focus on defending the rupee, that has depreciated 25 percent year-to-date, thereby tightening the monetary policy.
This, Mukherjea adds, will lead to a weakening of growth prospects in the country.
Additionally, the Fed's tapering of its bond buying program will provide the RBI some room to defend the currency. Hence, the rupee may strengthen in the next 15 days time, he adds.
On specific stocks, Mukherjea says Coal India is a must buy for all investors.
11:30 am Buzzer: Gujarat Gas Company shares soared 9 percent in morning trade Wednesday as the company and Gujarat State Petroleum Corporation (GSPC) entered into a Memorandum of Understanding (MoU) for a long-term gas supply deal.
As per the MoU, GSPC has agreed to supply 0.85 mmscm of gas per day to Gujarat Gas from January 01, 2014 to June 30, 2025. Price of gas will be determined in the relevant Gas Sales Contracts (GSC) and it is expected to be formula based, according to its filing on the BSE.
The market is gaining steadily on the back of rupee recovery by 135 paise in late morning trade. The Sensex is up 364.62 points or 2 percent at 18599.28 while the Nifty jumps 115.40 points or 2.16 percent at 5456.85.
About 1085 shares have advanced, 500 shares declined, and 104 shares are unchanged.
Banks, oil & gas, metals and autos are adding strength to the indices. Tata Motors , Hindalco , BHEL , Reliance and Hero MotoCorp are gainers in the Sensex.
Asian markets trend lower on renewed geopolitical concerns.
The Syria concerns are reflected in other asset classes as well. Crude prices are higher with Brent above USD 115 per barrel. Gold is back above USD 1400/oz while the dollar index rose to six- week highs to 82.5.
10:55am Earning estimates cut
Ridham Desai of Morgan Stanley says that the firm is trimming its broad market earnings growth forecast for FY14 to -6 percent from 12 percent and introducing an estimate of 5 percent for FY15.
"We cut our Sensex earnings growth estimates to 4.1 percent from 10.5 percent for FY14 and to 12.7 percent from 19 percent for FY15. Our new 12-month forward Sensex target is at 18,200," Ridham Desai adds.
Real estate companies like DLF and Indiabulls Real Estate lost 2.5-3 percent as the Reserve Bank of India has objected strongly to builders schemes like 80:20, saying it should not be paid upfront to developers and wants home loans to be linked to stage of completion of the project.
Spicejet gained 3 percent as the aviation company announced an airfare hike by 25-30 percent owing to the higher aviation turbine fuel prices. Jet Airways too has hinted in that direction.
Gujarat Gas jumped 6 percent as the company and Gujarat State Petroleum Corporation (GSPC) entered into a MOU for a long-term gas supply deal. As per the MOU, GSPC has agreed to supply 0.85 mmscmd of gas to Gujarat Gas from January 1, 2014 for 10 years.
10:35am Gainers & Losers
Technology stocks are the real drivers today with the BSE IT Index rising 2.7 percent. TCS and Infosys rallied 3 percent each while Wipro gained 2 percent.
Index heavyweight Reliance Industries soared 3 percent after losing 6 percent in previous session.
Commercial vehicle major Tata Motors surged 3.6 percent. Private sector lenders ICICI Bank and HDFC Bank rose over 1 percent.
However, ITC and Maruti Suzuki fell more than one percent on profit booking
10:25am V-shape recovery in Rupee
Indian rupee saw V-shape recovery, gaining 4 paise to 67.59 against the US dollar. It was down 87 percent to 68.52 in early trade today.
The Fed's tapering of its bond buying program will provide the RBI some room to defend the currency. Hence, the rupee may strengthen in the next 15 days time, Saurabh Mukherjea of Ambit Capital says.
10:10am The market rose more than 1.5 percent in morning trade Wednesday on short covering in most beaten down stocks after carnage seen in previous session.
The Sensex is up 296.89 points or 1.63 percent at 18531.55, and the Nifty is up 86.55 points or 1.62 percent at 5428. Advancing shares outnumbered declining ones by 1073 to 461.
Gautam Chhaochharia, head of India Strategy, UBS expects Nifty to hover in the range of 5000-5850 this year. He believes slowing growth is causing a collateral damage to the economy, but on the other hand there are pockets such as exports that will benefit and therefore, overall impact on the market is unlikely to be negative earnings growth.
However, if the vicious cycle continues and rupee crosses 70/USD then market may get further negative, he adds. According to him, the rupee is unlikely to stablise even at 66-67/USD in the near-term.
The rupee is trading at 68.13 per dollar, after trimming losses from 87 paise to 50 paise.
9:55 am: Karl Slym, MD Tata Motors says the company's revival in commericial market in FY14 and stresses that the segment will revive only next fiscal. Tata Motors' domestic sales of commercial and passenger vehicles for August 2013 were 44,717 units. Its sales of commercial vehicles, during the period, in the domestic market were 33,153 units including 24,904 light commercial vehicles and 8,249 medium and heavy commercial vehicles. Sales of passenger vehicles in August were at 11,564.
9:45 am Buzzer: Fresenius Kabi Oncology shares are on buyers' radar after the government approved Rs 349 crore FDI proposal of the company.
This foreign direct investment (FDI) approval will allow parent company to acquire shares of the Indian subsidiary which will then be delisted.
Parent company Fresenius Kabi (Singapore) Private Limited holds 81 percent stake in the company as of June 2013.
The Royal Bank of Scotland Asia Merchant Bank (Singapore), Macquarie Bank, Morgan Stanley Asia (Singapore) PTE and Nomura Singapore have 6.85 percent stake.
9:35 am Downgrade: Morgan Stanley has cut broad market earnings growth forecast for FY14 to negative 6 percent from 12 percent and introduced an estimate of 5 percent for FY15.
Ridham Desai of Morgan Stanley says, "We cut our Sensex earnings growth estimates to 4.1 percent from 10.5 percent for FY14 and to 12.7 percent from 19 percent for FY15. Our new 12-month forward Sensex target is at 18,200."
9:24 am Market level: The Sensex is up 160.99 points or 0.88 percent at 18395.65, and the Nifty up 48.95 points or 0.92 percent at 5390.40. About 486 shares have advanced, 226 shares declined, and 34 shares are unchanged.
The market is very volatile. The Sensex slipped immediately in the red after opening in positive terrain. The Sensex is up 87.20 points or 0.48 percent at 18321.86, and the Nifty up 17.20 points or 0.32 percent at 5358.65. About 183 shares have advanced, 85 shares declined, and 30 shares are unchanged.
The Indian rupee opened lower by 47 paise at 68.10 per dollar versus 67.63 on Tuesday.
Pramit Brahmbhatt, CEO, Alpari India said, "Rupee is back on its south bound journey owing to a looming credit downgrade by ratings agencies. Higher crude prices and expectations of tapering by Fed will push rupee to trade at record lows. The range for the day is seen between 67.20-69.50/USD."
The dollar hit a six week high after stronger-than-expected US economic data bolstered expectations that Federal Reserve will start scaling back stimulus this month. The euro-dollar trades at 1.316 and the yen at 99.5/dollar.
In the US, the Dow gave up much of a 120 points intra-day rally as Syrian fears escalated and markets still squeezed out small gains supported by positive economic data on Tuesday. European shares closed down in choppy trade and back home, our market got clobbered yesterday as the four-day rally came to a grinding halt wiping out USD 25 billion in market cap.
Meanwhile, Asian markets slipped in early trade today.
In commodities, crude prices rose as lawmakers voiced support for military action against Syria, raising new fears about an armed conflict that could crimp supply. Brent traded at USD 115.7/barrel while Nymex rose above USD 108/barrel giving up some gains towards close
From precious metals space, gold prices rose as much as 1.4 percent intra-day to within striking distance of a 3.5-year high as the consensus against Syria developed before giving up some gains.