Nifty ends below 6100; IT gains, Hero & HDFC Bank fall 2%
15 October 2013
3:45 pm Market closing: After struggling a lot, the market closed on a weak note. The Sensex ended down 59.92 points at 20547.62, while the Nifty is down 31.20 points at 6081.50. About 975 shares have advanced, 1424 shares declined, and 142 shares are unchanged. Tata Steel , Bharti Airtel , Wipro , Hindalco and HUL were top gainers in the Sensex. On the losing side are Hero MotoCorp, HDFC Bank , SBI , Tata Power and ICICI Bank .
3:30 pm Update: Britain's Vodafone Group Plc has indicated that it will invest more than USD 2 billion in India following a government decision to allow foreign companies to fully own local carriers, Telecommunications Minister Kapil Sibal said, reported Reuters. "Vodafone is bringing in more than a couple of billion dollars," Sibal told Reuters in an interview. "They will bring in investment and take advantage of the 100 percent FDI that is now in place."
3:15 pm Management interview: Despite an approval to raise Rs 1,000 crore via qualified institutional placement (QIP), Karur Vysya Bank does not see the current market scenario apt to do so. K Venkataraman, its MD and CEO, says that the enabling resolution has been passed through a vote, but the timing of the QIP will be decided based on improvement in the market conditions within a year. "There is no timeline.
We are looking at more opportune time. Instead of going to the market when I need the capital, it is better we choose the time when the market is more rewarding and then go on to raise as the enabling resolution is valid for about a year. We can always look for good time for raising this," he said in an interview to CNBC-TV18.
3:00 pm Market opinion: The mood is cautious, so investors should continue to play the market using a defensive approach, recommends Nirmal Jain, chairman of IIFL. In an interview to CNBC-TV18, Jain said that he remains overweight on technology and pharma stocks and would prefer sticking to them in the current market scenario. "If one looks at the market, although indices have moved up, but most of the money as well as the rises in prices have been concentrated in few stocks and few sectors," he says.
The market continued with its southward journey amid choppy trade in afternoon while the rupee fell 18 paise to 61.73 against the US dollar. The Sensex is down 76.81 points at 20530.73, and the Nifty is down 21.85 points at 6090.85. Declining shares outpaced advancing ones by 1400 to 879 on the Bombay Stock Exchange.
HDFC Bank shares lost more than 2 percent after its second quarter (July-September) net profit rose 20 percent -- higher-than-expected -- to Rs 1,982 crore, compared to a year ago period led by higher other income. However, NPAs of the bank increased during the quarter. Net interest income of the country's second largest private sector lender jumped 20 percent to Rs 4,476 crore in September quarter from Rs 3,732 crore in a year ago period, which was below the analysts' forecast.
2:00 pm Exclusive: The Cabinet Committee on Investments (CCI) in the last three months have managed to find solutions of issues related to nearly 40 projects that entail an investment of Rs 1.5 lakh crore, says Anil Swaroop, additional secretary and head of project monitoring group in an interview to CNBC-TV18. According to Swaroop, so far, there was no structural mechanism through which the industry could discuss and resolve grievances, but now the progress has been made due to government's initiative in the form of CCI.
1:45 pm Market expert opinion: Mayuresh Joshi of Angel Broking expects the market to possibly cap off at around 6150-6200 levels odd. As deadline to the US shutdown draws closer, Joshi says that if the resolution is reached one might have some amount of sentimental risk on trade continue into the emerging markets including India.
"I think if there is some amount of catastrophe related to the US debt ceiling most asset classes will correct," he adds in an interview to CNBC-TV18. According to him, the US tapering may be in January-February. "In that sense it does give a little bit of a leeway to emerging markets and the respective economies to shore up like the governor has done at our end. The debt ceiling is crucial and a resolution would bring respite to most emerging economies and their currencies as well," he explains.
1:30 pm Rate hike on cards? September inflation data increased the chances of a rate hike by the Reserve Bank (RBI) going forward. Sonal Varma, India Economist at Nomura Financial Advisory believes that these are signs of a 25 basis points (bps) rate hike in the October 29 meet. She also sees two more rate hikes going into March 2014.
Meanwhile, Arun Kaul, chairman of UCO Bank says that the bond markets have priced in a repo rate hike going forward. The high figures of inflation are on the back of a spike in the food inflation, says Kaul. The high core inflation data has been the very disappointing, adds Varma. However, both the experts expect the WPI to reduce going forward.
The market is flattish with negative bias in afternoon trade. The Sensex is down 43.34 points at 20564.20, and the Nifty is down 19.95 points at 6092.75. About 781 shares have advanced, 1306 shares declined, and 129 shares are unchanged. Profit taking is seen in banks, cement and capital goods stocks.
Fortis healthcare gains 3 percent as the company will sell stake in its Hong Kong unit, Quality Healthcare Medical Services, to British Medical Services group Bupa for USD 355 million. This is part of Fortis' efforts to pare debt through asset sales.
Bharti, Wipro , Tata Steel , Hindalco and TCS are top gainers in the Sensex. Among major losers in the Sensex are GAIL , Tata Power , ITC , ICICI Bank and Tata Motors . AP Paper falls 4 percent after reporting a loss of Rs 45 crore versus a profit of Rs 7.5 crore year-on-year.
12:55pm Bajaj Finance falls 2% despite strong numbers in Q2 Bajaj Finance's second quarter net profit rose 29.5 percent year-on-year to Rs 167 crore while net interest income jumped 31 percent to Rs 579.6 crore from Rs 442 crore during the same period. Total income of the non-banking finance company increased 30.74 percent to Rs 961 crore in September quarter from Rs 735 crore in a year ago period.
12:45pm Repo Rate hike? After a rise in inflation for the fourth consecutive month, experts believe the Reserve Bank of India may hike repo rate on October 29, when the central bank will announce its second quarter review of monetary policy.
Brace for a 25 bps repo rate hike and 25 bps marginal standing facility (MSF) cut in next monetary policy, Indranil Sengupta, Chief Economist India, BofA ML warns citing uncomfortable CPI inflation. The Reserve Bank of India (RBI) in its mid-quarter policy review on September 20, had raised repo rate by 25 bps to 7.5 percent.
The next policy is scheduled on October 29. Meanwhile, the annual consumer price inflation rose more than expected to 9.84 percent in September from 9.52 percent in August. Sengupta is hopeful that CPI may subside to 8.5 percent level going ahead . He sees WPI inflation at 6.6 percent by March-end. The inflation, based on wholesale price index (WPI) stood at 6.1 percent in August and 5.85 percent in the previous month.
12:35pm Europe update European markets opened higher on hopes of likely deal to reopen the US government and avoid debt default. Germany's DAX, France's CAC and Britain's FTSE gained nearly 0.5 percent.
12:25pm Equity benchmarks are weak in noon trade with the Nifty struggling at 6100 level, dragged by financials and FMCG stocks. However, technology stocks remained on buyers' radar on expectations of strong earnings in September quarter. The Sensex is down 38.45 points at 20569.09, and the Nifty is down 16.60 points at 6096.10.
Gautam Trivedi of Religare Capital Markets recommends long-term investors to be cautious because he feels that the market has run ahead of its fundamentals. According to him, the underlying economy is still not showing signs of improvement as inflation remains fairly high, so another repo rate hike by the Reserve Bank of India might hurt the economy further.
Financials are down on profit booking as well as on fears of repo rate hike in October policy by RBI. ICICI Bank , HDFC Bank , State Bank of India and HDFC lost between 0.3-1 percent. However, technology stocks continued to see buying interest. TCS gained more than a percent ahead of its second quarter earnings later today.
Analysts expect a solid set of earnings from the company, with a dollar revenue growing at 5.5 percent and margins expanding around 230 bps sequentially to over 29 percent due to currency depreciation. Wipro and Bharti Airtel are top gainers in the Sensex, rising 3 percent each. However, IndusInd Bank lost nearly 4 percent after Bank of America Merrill Lynch retained its underperform rating on the stock, but raised target price to Rs 400 from Rs 380 earlier. Citi has a sell rating on the stock with a target price of Rs 360.
11:55 pm FII view: Investors have turned "equal-weight" on Indian stocks according to the Morgan Stanley semi-annual survey of 95 institutional investors. The investment bank says only 21 percent of the investors are "overweight" on India versus 39 percent in February, the lowest since it began this survey, while only one-third believe that India will beat emerging markets in the next 12 months.
On average, investors expect the Sensex to be at 20,949 in the next 12 months, almost flat versus current levels. The Sensex is expected to be at 20,286 by the end of the year and at 22,200 by the end of 2014, according to a Reuters poll last week.
11:45 pm Buzzer: Shares of Fortis Healthcare rallied 6.6 percent in intraday trade on Tuesday after the company decided to divest its 100 percent shareholding in Hong Kong-based Altai Investments to British Medical services group Bupa for USD 355 million. Altai Investments is the holding company for Quality Healthcare.
The deal, which is a part of company's efforts to reduce debt, is expected to be completed in October 2013, the company said in its filing. "The divestment enables Fortis to further strengthen balance sheet and substantially improve net debt equity ratio, creating further room for growth," Malvinder Singh, executive chairman, and Shivinder Singh, executive vice chairman of Fortis Healthcare said.
11:30 pm Exclusive: In this battle between liquidity and macros, in the near term, liquidity wins every time, without exception, says CNBC-TV18 Managing Editor Udayan Mukherjee. So, as a trader it is safe to ignore the macros, he advises. "We have seen few weeks back what a change in the perception of liquidity can do to the market.
The ferocity with which the market sold off from 6,100 to 5,100 was simply because of the perception of global liquidity changing. Now, it has changed for the better. People are far more dovish in their expectations, money is coming in everyday and as a trader you would want to give this macro data wide berth," he said in an inetrview.
After erasing gains in early trade, the market is losing further with the Nifty still below 6100. The Nifty is down 48.20 points at 6064.50 while the Sensex is down 133.34 points at 20474.20. About 591 shares have advanced, 1114 shares declined, and 107 shares are unchanged. Banks, capital goods and realty stocks are under selling pressure.
However, technology stocks are leading the indices with Wipro and TCS gaining 1-2 percent each. TCS will declare its July-September quarter results in the evening. A CNBC-TV18 poll shows analysts on an average expect its profit after tax to rise 19.25 percent sequentially to Rs 4,527 crore in second quarter. Analysts believe dollar revenues of the software company (TCS) may increase 5.5 percent quarter-on-quarter to USD 3339 million and rupee revenues are likely to jump 15.9 percent Q-o-Q to Rs 20,850 crore in the quarter gone by.
Asian markets rise as US lawmakers said they were optimistic that a deal to end the partial shutdown of the US government and raise the debt ceiling will be reached. Currencies saw the euro trade largely flat against the dollar while the yen rose against the greenback on further safe haven buying. Brent and gold futures inched a tad higher with Brent at USD 111 per barrel and gold is still sub USD 1300/oz.
10:55am Buzzers Andhra Pradesh Paper Mills shares tumbled 4 percent as the company reported a loss of Rs 45 crore in Q2 as against a profit of Rs 7.5 crore in a year ago period. However, CMC rallied 4 percent after a 15 percent sequential improvement in revenues and 27 percent growth in profit after tax in the quarter gone by.
NIIT Technologies (up 1.65 percent) and Sintex (down 0.8 percent) will report their earnings today. Sintex is expected to report subdued set of results with a revenue growth of 3.5 percent, margin contraction of 80 bps and profit degrowth of 8.7 percent. NIIT Tech is expected to report better numbers with a 9 percent sequential improvement in revenues.
IndusInd Bank lost 4 percent after Bank of America Merrill Lynch retained its underperform rating on the stock, but raised target price to Rs 400 from Rs 380 earlier. Citi has a sell rating on the stock with a target price of Rs 360.
10:45am Market Update The market extended losses after shedding early trade gains. The Sensex is down 97.96 points at 20509.58, and the Nifty is down 35.85 points at 6076.85. Declining shares outnumbered advancing ones by 1005 to 660 on the Bombay Stock Exchange. Capital goods majors L&T and BHEL too lost its early gains, falling more than a percent on profit booking. However, Wipro remained in bull grip with the stock rising nearly 2 percent. The company will declare its September quarter earnings on October 22.
10:35am Stocks In News TCS shares added another 0.6 percent gains ahead of its September quarter earnings today. The stock has rallied 78 percent year-to-date. Analysts expect a solid set of earnings from the company with a dollar revenue growing at 5.5 percent and margins expanding around 230 basis points sequentially to over 29 percent due to currency depreciation.
Reliance Industries rose just 0.26 percent post its second quarter results. JP Morgan has upgraded the stock to overweight and upped the target price to Rs 1,000 a share from Rs 800/share earlier as it remained positive on company's core business expansion strategy while Macquarie maintained its outperform rating on the stock with a target price of Rs 1,100/share.
Fortis Healthcare shares gained 4 percent as the company has confirmed sale of its stake in quality healthcare medical services to British medical services group Bupa for USD 355 million. This is part of its efforts to reduce debt by selling some assets.
10:23am The market shed some of its early gains as the Sensex fell below the 20700 level, dragged down by private sector banks and FMCG stocks. The Sensex is up 30.38 points at 20637.92, and the Nifty is up 9.95 points at 6122.65. Citi Investment is not very upbeat about the Indian market currently.
John Woods of Citi Investment feels that the market is still looking for important structural reforms. "We have started to see flows returning back to EM in general and India in particular but a number of bodies are cautioning that unless India follows through some fairly substantive and meaningful structural reforms, it will not be able to depend on foreign direct investment (FDI) to fund its external deficit," John Woods elaborated. HDFC Bank and ICICI Bank are the laggards, falling 1.5 percent each. HDFC Bank will report its second quarter earnings today; according to a CNBC-TV18 poll, analysts on an average expect profit after tax of the bank to rise 26 percent on yearly basis to Rs 1,963 crore in the quarter gone by.
FMCG majors ITC and Hindustan Unilever declined 0.6 percent each while commercial vehicle maker Tata Motors lost more than a percent. Aditya Birla group stocks are under pressure as CBI filed FIRs against Aditya Birla Group Chairman Kumar Manglam Birla, Nalco, Hindalco and former secretary coal PC Parakh. Hindalco Industries and Grasim Industries slipped nearly 2 percent while Aditya Birla Nuvo lost 4 percent.
10:00 am TCS results poll: India's largest software services exporter Tata Consultancy Services (TCS) will declare its July-September quarter (Q2FY14) results. A CNBC-TV18 poll shows analysts on an average expecting profit after tax to rise 19.25 percent sequentially to Rs 4,527 crore in second quarter. The company has been a consistent performer in the technology space. Investors will closely watch TCS' quarterly earnings after its rival Infosys reported higher-than-expected revenues in Q2 and surprised the street by revising FY14 guidance to 9-10 percent from 6-10 percent earlier.
9:45 am Coalgate: The Central Bureau of Investigation has named Aditya Birla Group Chairman Kumar Mangalam Birla in its 14th FIR in the case. FIRs have been filed against Kumar Manglam Birla, Nalco, Hindalco and former secretary coal PC Parakh. Cases of cheating, forgery and financial misrepresentation have been filed. CBI searches are also on in Delhi, Kolkata, Bhubaneswar and Mumbai in connection with the coal scam. Hindalco is down 2 percent while Nalco is under a bit of selling pressure.
9:35 am Market outlook: Manishi Raychaudhuri of BNP Paribas Securities sees Q2 earnings for their coverage universe falling 9 percent Y-o-Y, on aggregate. "However, the expected decline is driven primarily by commodities. At 14.1 times FY14 expected consensus PE and 2.2 times price to book value, the risk of earnings downside does not seem fully factored in,'' he says in an interview to CNBC-TV18. Jyotivardhan Jaipuria of Bank of America Merrill Lynch believes the assembly elections could be significant. He explains, "In two of the past three elections, the market has given a negative return a month before the result announcement. Three sectors that have done well from 6 months before elections are autos, energy and utilities while consumer staples have generally done poorly."
9:25 am Big Bull: Index heavyweight Reliance Industries' (RIL) second quarter (July-September) net profit grew 2.6 percent quarter-on-quarter (up 1.5 percent on yearly basis) to Rs 5,490 crore, supported by strengths in its petrochemical and refining businesses. Net sales of the company rose 18.4 percent to Rs 1,03,758 crore in the September quarter, compared to Rs 87,645 crore in June quarter. Gross refining margin (GRM) stood at 7.7 percent in September quarter as against 8.4 percent in June quarter. Analysts had expected GRM at 7.8 percent. The stock is up 3 percent on the BSE.
Reliance's September quarter results boosted the market to open in positive terrain. The Sensex is up 130.56 points at 20738.10, and the Nifty up 34.85 points at 6147.55. About 283 shares have advanced, 48 shares declined, and 9 shares are unchanged. The market does not seem to be bothered about the rising inflation.
Consumer price index (CPI) inflation increased to 9.84 percent in September from 9.52 percent in the month-ago period. Meanwhile, the Indian rupee edged higher by 30 paise at 61.25 per dollar in early trade Tuesday as against previous day's closing of 61.55 per dollar. The dollar slipped and the yen gained on safe-haven demand as concerns rise in some quarters that the US may actually default on its debt obligations.
Globally, the US markets ended near session highs on Monday in choppy trading with the Dow and S&P 500 closing in positive territory for the fourth-straight session, as investors remained encouraged by signs of progress in the budget deal. In Asia, China's central bank appeared to underline its commitment to currency reform by allowing the Yuan yesterday to rise to a record high of 6.1073 against the dollar despite signs of unexpected weakness in exports.
This leaves the Yuan up 2 percent in 2013, in marked contrast to slides posted by other Asian currencies, and more than 35 percent higher since a revaluation in 2005. In commodities, crude prices were mixed to slightly higher as traders covered short positions in the event that US politicians reach a deal to fund the government after being unable to do so in the last two weeks. Brent though slipped below USD 111 a bbl From precious metals space, gold gives up yesterday's slight gains in early trade.