Sensex recovers; SBI, ONGC, Bharti, Tata Motors rally 2%

25 Sep 2013

03:30 pm Buzzer: Ashoka Buildcon is on buyers' radar today on the back of Rs 494 crore order from Maharashtra State Electricity Distribution Company ( MSEDCL). Shares of the Maharashtra-based company surged over 11 percent in intraday day on Wednesday. "The company has received 'Letter of Awards' for four turnkey contracts for electrification work," it said in a filing to BSE. Out of the total contracts, Rs 155.20 crore is for Barshi, Rs 106.24 crore for Solapur, Rs 117.79 crore for Baramati and Rs 115.27 crore for Kedgoan.

03:20pm Market Expert India is still looking at a period of great uncertainty and reasonably high volatility compared to what markets had become used to during the period of no tapering, says Arnab Das, Roubini Global Economics. Despite the pressure on the rupee easing and markets doing reasonably well compared to August end, fundamentally nothing has changed - India continues to have high current account deficit, Fed will eventually begin tapering, among others, he says.

03:15pm Recovery The Nifty is extremely choppy towards close of the session after recouping losses. The Nifty recovered nearly 75 pts from day's low and the Sensex nearly 230 points from day's low. Bank Nifty, which caused the downward move in the market today, also recovered nearly 175 pts from day's low.

03:05pm Market Update The market recovered more than half of its losses in late trade amid volatility ahead of expiry. The Sensex is down 75.44 points at 19844.77, and the Nifty is down 23.10 points at 5869.35. BHEL is the major gainer in the Sensex, surging nearly 8 percent followed by Hindalco Industries and Sesa Goa with around 4 percent gains. Tata Motors , State Bank of India , Sun Pharma and ONGC gained more than 2 percent.

02:55pm Buzzers Tata Motors shares gained more than 2 percent. Nomura raised target price on the stock to Rs 391 from Rs 327. Jaguar Land Rover should continue to outperform the industry, the brokerage house report said. Oil marketing companies are under heavy selling pressure as Petroleum Minister Veerappa Moily said that there are no immediate plans for a one-time diesel price hike. BPCL and HPCL lost 3-4 percent while IOC fell 1 percent. Financial Technologies crashed 10 percent after the auditors of the company withdrew the audit report for FY13, saying the company's earnings statement is no longer reliable. This comes after NSEL auditor Mukesh Shah & Company withdrew NSEL's audit report. Meanwhile, NSEL defaulted on its weekly payout obligation for the sixth week in a row.

02:45pm Active stocks YES Bank, State Bank of India, Financial Technologies, Tata Motors, Reliance Communications , TCS and Axis Bank are the most active shares on exchanges. UB Group stocks remained on buyers' radar since the reassuring comments from Vijay Mallya. Kingfisher Airlines (up 10 percent) and UB Holdings (up 5 percent) are in upper circuit after Mallya said that Kingfisher Airlines is in talks with an investor and he expects these plans to take some form or shape in about 90 days.

02:30pm Volatility ahead of expiry The volatility increased in the market ahead of September series expiry tomorrow. The market recovered half of its losses in last 10 minutes of trade. The Sensex is down 80.73 points at 19839.48, and the Nifty is down 26.80 points at 5865.65. Overall the September series has been good so far with the market rising more than 8 percent on more than Rs 11,000 crore foreign inflow. Meanwhile, the rupee gained 21 paise to 62.53 against the US dollar.

02:14pm Consistent pressure in six leading stocks Reliance Industries, ITC, HDFC Bank, HUL , ICICI Bank and HDFC dragged both the equity benchmarks down in afternoon trade. The Sensex is down 172.73 points at 19747.48, and the Nifty is down 59 points at 5833.45. Declining shares outpaced advancing ones by 1265 to 796 on the Bombay Stock Exchange. Nifty 5900 Call added 30 lakh shares in open interest and its premium dropped by 77 percent to Rs 12 while Nifty 6000 Call added 17.5 lakh shares in open interest and its premium fell by 87 percent to Rs 2. Experts don't see Nifty moving above 6000 in near term due to lack of trigger.

Nifty may not go below 5000-5200 level, or break out beyond 6000 in a sustainable way by 2013 end, says Gautam Chhaochharia, head Of India Research, UBS. More clarity will emerge only post elections, more progress and economic recovery will be seen after that, but still it is critical to buy at the right levels, he says. According to him, the risk reward is only below 5300-5400 levels rather than at current levels because currently the market is trading at forward multiples of more than 14 times which is not cheap from any angle. He advises investors to be in the profit-taking mode - specifically on cyclicals and even financials.

Reliance Industries, ITC, HDFC Bank, ICICI Bank, HUL and M&M are the major losers in trade, falling between 2-3 percent. State-run capital goods major BHEL surged 7 percent followed by Tata Motors and Hindalco Industries with 2 percent gains.

2:00 pm Point of view: Cement prices have risen primarily in the South and the West India, says Sanjay Ladiwala, Cement Stockists and Dealers Association of Mumbai. This has been on the basis of a slight pickup in demand plays, more on optimism than anything else, he says. There will be a lot of volatility in prices, he says. There is optimism that prices would go up but at the same time when newer capacities come in, there will be pressure on prices and correction will happen, he adds. This volatility is likely to continue for the next six months.

1:45 pm Update: Finance Minister P Chidambaram has informed that the Prime Minister has approved setting up of the Seventh Central Pay Commission . Pay Commission is usually constituted every nine years, and forming of the new one is much earlier than usual. The Sixth Central Pay Commission recommendations were implemented from January 1, 2006. The Seventh Pay Commission will take two years to submit its report, recommendations of which are likely to be implemented with effect from January 1, 2016. Sources told CNBC-TV18 that the next government will inherit additional payout of at least Rs 1 lakh crore on account of higher wage bill in April 2016. The Sixth Pay Commission impact was Rs 40,000 crore.

1:30 pm Buzzer: Hindustan Zinc (HZL) shares extended gains on top of a 3 percent rally in previous session as the process of divestment seems to be gathering steam. Vedanta chairman Anil Agarwal, who holds 64.92 percent stake in Hindustan Zinc through Sesa Sterlite (earlier known as Sterlite Industries), told CNBC-TV18 that he is open to any method for acquiring government's residual stake in the company and Balco as well.

The market has succumbed to selling pressure led by heavyweights like Reliance , HDFC Bank and ITC . The Nifty has slipped below 5850 on the back of high volumes. The Nifty is at 5818.05, down 74.40 points or 1.26 percent and the Sensex is down 231.10 points or 1.16 percent at 19689.11. About 760 shares have advanced, 1210 shares declined, and 149 shares are unchanged. Among the laggards in Nifty are BPCL , M&M, IDFc, Reliance and HDFC Bank. BHEL is still leading the gainers pack with a gain of 4 percent followed by Tata Motors , Hindalco , Bharti Airtel and ONGC in the Nifty.

Oil marketing companies are under heavy selling pressure as Petroleum Minister Veerappa Moily said that there are no immediate plans for a one-time diesel price hike. Shares of BPCL , HPCL and IOC are down between 1-4 percent in intraday trade on Wednesday. Moily said that the dual-pricing of diesel is not worrying. "At present the state transport undertakings (STU) are purchasing diesel at market real prices without any subsidy. STU's will purchase diesel at the subsidised rate and will be in a need to encourage public transport, but this would be subject to their active corporation in our conservation campaign," he said. Asian markets too are under pressure. Meanwhile, rupee inches higher on the back of dollar sales by exporters.

12:55pm Losers BSE Bankex fell more than 2 percent in afternoon trade, largely led by private banks. However, state-run lender State Bank of India gained 0.6 percent.

Oil & Gas, FMCG and realty stocks are also under pressure.

Oil market companies like HPCL , BPCL and IOC lost between 1.5-5 percent after Petroleum Minister Veerappa Moily said that there are no immediate plans for a one-time diesel price hike.

12:38pm Stocks in News UB group stocks Kingfisher Airlines (up 10 percent again) and UB Holdings (up 5 percent) are active today after founder Vijay Mallya says that Kingfisher is in talks with an investor and he expects some movement on that front in about 90 days. Financial Technologies shares lost 10 percent as the auditors of the company say the company's FY13 earnings statement is no longer reliable.

12:25pm Market Expert views The market remained under pressure; the Sensex is down 173.06 points at 19747.15, and the Nifty is down 57.20 points at 5835.25. Experts feel the market will remain rangebound in near term. They do not see any major upside in the market as the fundamentals of India are weak now. Bank Julius Baer is not very upbeat about the India going forward. Mark Matthews, its Head of Research, feels that the slowdown in the economy is far from over. India is still stuck with structural issues such as deficits which are adding to the volatility.

12:09pm The market extended its downward journey with the equity benchmarks falling more than a percent in noon trade, weighed down by FMCG and private financials. Index heavyweight Reliance Industries dropped nearly 3 percent. The Sensex is down 201.74 points at 19718.47, and the Nifty is down 66 points at 5826.45. Declining shares outnumbered advancing ones by 1088 to 731 on the Bombay Stock Exchange. Nifty may not go below 5000-5200 level, or break out beyond 6000 in a sustainable way by 2013 end, says Gautam Chhaochharia, head Of India Research, UBS. More clarity will emerge only post elections, more progress and economic recovery will be seen after that, but still it is critical to buy at the right levels, he says.

More clarity will emerge only post elections, more progress and economic recovery will be seen after that, but still it is critical to buy at the right levels, he says. According to him, the risk reward is only below 5300-5400 levels rather than at current levels because currently the market is trading at forward multiples of more than 14 times which is not cheap from any angle. He advises investors to be in the profit-taking mode - specifically on cyclicals and even financials. Country's largest private sector lenders ICICI Bank and HDFC Bank are down 1.75 percent and 3.3 percent, respectively. Even housing finance major HDFC lost 1.7 percent. Among others, ITC , Hindustan Unilever and M&M slipped 1.5-3 percent whereas BHEL extended gains, rising 3.7 percent. Tata Motors is the leader in the Sensex, gaining 2.7 percent followed by ONGC and Bharti Airtel with more than 1 percent gain.

12:00 pm Management speaks: S Narsing Rao, CMD, Coal India clears the accusation against the company by global activist group Greenpeace India stating that the coal reserve reported by the company in 2010 were in line with global standards. Every year since 2011, the company has been adding more than 2.2 billion tonne of coal reserve each year and will continue adding more reserves as it keeps developing new mines, says Rao.

The company's production target for FY14 is 482 million tonne the coal offtake target is 492 million tonne, both of which Rao says are achievable. "As we have 57 million tonne of ground stock as on April 1, we will be able to liquidate some 15-20 million tonne. We targeted 10 million tonne. If there will be any shortfall in some companies, we will make up that from the ground stock," says Rao in an interview to CNBC-TV18.

11:45 am Market levels: The market has fallen further. The Sensex is down 211.38 points or 1.06 percent at 19708.83, and the is Nifty down 67.15 points or 1.14 percent at 5825.30. About 735 shares have advanced, 1064 shares declined, and 137 shares are unchanged. BHEL , Tata Motors , ONGC , Bharti Airtel and Hero MotoCorp are top gainers in the Sensex.

11:30 am FII view: Jyotivardhan Jaipuria, head of research, BofA Merrill Lynch says, "The market is likely to correct nearly 6-8 percent in the next few weeks and it may shift back to lower end of range." Though there will be a few green shoots, with respect to authorities clearing stalled projects etc, but it is too late to start infrastructure investments now, he added. Also, according to him, the much talked about one- time diesel price hike seems to be off the table. All eyes are now fixed on to the upcoming general elections and Jaipuria feels that run to the polls and its outcome will now become a major overhang for the market. But he feels that things won't pick up just because of new government. Meanwhile, earnings growth in FY14 is seen at 6-7 percent and foresees FY14 Sensex EPS at Rs 1,260. BofA Merrill Lynch is overweight on software, pharma , telecom and auto stocks, but prefers staying away from infrastructure as of now.

After a flat opening the market is trending southwards dragged by banks, oil & gas and FMCG stocks. The Sensex is down 149.45 points or 0.75 percent at 19770.76, and the Nifty down 46.95 points or 0.80 percent at 5845.50. About 770 shares have advanced, 856 shares declined, and 106 shares are unchanged. Meanwhile, Asian shares are mixed following a fourth straight session of losses in the US as fears of the failure to arrange a budget deal weighed on sentimen. Dollar index was firm today trading with strength against the euro. Emerging market currencies such as the Turkish lira, Indonesia rupiah were on a weaker footing.

Gold is in a tight range after uncertainty over the tapering timeline weighed while crude prices inched up a tad bit. However the possibility of easing tensions between US and Iran are expected to keep prices lower. Government bond prices were up on value buying by dealers, but no announcement of an open market gilt purchase by the Reserve Bank of India Tuesday limited further gains. Rupee flattened out but was higher earlier on the back dollar sales by foreign and state-owned banks. However, month-end dollar demand from importers likely to weigh on the rupee.

10:55am Market Update The market lost ground with the Sensex falling more than 100 points, weighed down by index heavyweights ITC (down 2.56 percent), HDFC Bank (down 2.75 percent), Reliance Industries (down 1.76 percent) and HDFC (down 1 percent. The Sensex is down 119.34 points at 19800.87, and the Nifty is down 41.60 points at 5850.85. Nifty may not go below 5000-5200 level, or break out beyond 6000 in a sustainable way by 2013 end, says Gautam Chhaochharia, head Of India Research, UBS. More clarity will emerge only post elections, more progress and economic recovery will be seen after that, but still it is critical to buy at the right levels, he says.

According to him, the risk reward is only below 5300-5400 levels rather than at current levels because currently the market is trading at forward multiples of more than 14 times which is not cheap from any angle. He advises investors to be in the profit-taking mode - specifically on cyclicals and even financials.

10:37am Buzzer Financial Technologies crashed 8 percent as the auditors of the company have withdrawn the audit report for FY13, saying the company's earnings statement is no longer reliable. Hindustan Zinc rose over 1 percent as Anil Agarwal told CNBC-TV18 that he is open to any method for acquiring government's residual stake (29.54 percent stake) in company and also Balco.

10:22am Stock in News Suven Life Sciences shares gained 3 percent as the healthcare company received three product patents for new chemical entities abroad. It secured patents in South Korea, New Zealand and Singapore. Ashoka Buildcon gained more than 3 percent as the road developer received orders worth Rs 494 crore from Maharashtra power company.

10:09am The market is going listless in morning trade Wednesday due to lack of trigger and ahead of September series expiry on Thursday. The Sensex is down 2.14 points at 19918.07, and the Nifty is down 3.65 points at 5888.80. Lack of any major triggers in the short-term will cap the upside for the market at 6,100-6,200 levels for the next three-six months, says Vikas Khemani, Edelweiss Securities. According to him, the next big trigger for the market will only be in the form of state elections. Speaking to CNBC-TV18 Kemani says that since inflation, interest rates are unlikely to come down in the near-term, market will get more inclined towards the defensives in next three-four months. Tata Motors and BHEL are top gainers in the Sensex, rising 2-2.7 percent followed by L&T, Sun Pharma , ONGC , Tata Power and NTPC with more than 1 percent gains. However, index heavyweights Reliance Industries, ITC, HDFC, HDFC Bank and TCS fell between 0.5-1.2 percent.

10:00 am Watch out: Shares of Financial Technologies (FTIL) fell more than 14. The company, which is already stressed by NSEL debt crisis is facing another issue on auditor report. The auditors of the company say that the audit report on the standalone and consolidated financial statements for the year ended March 31, 2013 should no longer be relied upon. Both NSEL and MCX (down 2 percent) are promoted by FTIL. In a release to the BSE, the company notified that it has deferred discussing some of the items in its AGM today. Following are the three resolutions that deferred by the company in AGM agenda - 1) Company will mull audited balance sheet for FY13; 2) Company will ratify payment of interim dividend; and 3) Reappointment of Deloitte Haskins & Sells.

9:45 am FII View: John O' Connell of Macquarie says that they continue to favour equities over commodities. "We think commodity prices will be less responsive to global growth than was the 2000s due to expected increase in supply, and slowing demand growth from China. Equities are one of the best leading indicators, and their rise is a positive growth signal. A focus on what the Fed might do and when misses the point that the rise in bond yields is also ultimately driven by a better growth outlook," he said in an interview to CNBC-TV18.

9:30 am Buzzers: Shares of power stocks are gaining muscles on cabinet's approval of methodology for auctioning coal blocks. Reliance Power , Tata Power and Adani Power rallied between 1-2 percent in early morning trade on Wednesday. The cabinet's nod will provide upfront and production-linked payments and benchmarking of coal sale prices. Coal blocks will be put for auction after the Environment Ministry reviews them, and bidders have to agree to a minimum work programme, according to an official statement.

The market opened on a flattish note but the Nifty maintained to be above the 5900-mark. The Nifty is up 9.10 points or 0.15 percent at 5901.55. The Sensex is up 56.57 points or 0.28 percent at 19976.78, and About 214 shares have advanced, 55 shares declined, and 22 shares are unchanged. The Indian rupee opened on a flat note at 62.76 per dollar versus 62.75 yesterday. Pramit Brahmbhatt, CEO, Alpari India said, "The euphoria of positive measures by Fed has lost its sheen due to a dampener by RBI last week and hence, rupee has been trading weak." "Rupee is expected to trade with a weak bias owing to choppy equities, weak sentiment in Asia and strong dollar demand by importers. The range for the day is seen between 62.20-63.30/USD," he added.

The euro slipped against the dollar to just below 1.35 undermined by German sentiment data that was slightly below expectations and comments from European Central Bank officials saying they were prepared to do more to support the region's fragile recovery. US markets gave up most of its gains in the final minutes of trading on Tuesday to end near session lows. The S&P closed below the 1700 mark. European markets ended marginally higher. Meanwhile, Asian markets opened mostly lower today morning. Tokyo Electron shares are bid-only this morning due to a glut of buy orders following a USD 9 billion deal with Applied Materials (AMAT). The deal is the largest since Citigroup's purchase of Japan's Nikko Cordial in 2007 and comes at a time when the Japanese government is trying to lure more foreign investment.