Nifty ends below 6000; SBI, M&M rally post Q2 nos, ITC weak

The market remained in bear trap for the seventh consecutive session on Wednesday, dented by weakness in global peers on uncertainty over Fed tapering. Choppy market saw selling pressure in last couple of hours of trade today.

Lower-than-expected factory output and CPI inflation above 10 percent, too, caused selling pressure in the market. Investors are cautious ahead of October WPI inflation on Thursday, which is expected to be around 7 percent, according to a CNBC-TV18 poll. September inflation was at seven-month high of 6.46 percent.

The 50-share NSE Nifty closed below the 6000-mark for the first time since October 8 at 5,989.60, down 28.45 points from previous close. The Sensex declined 87.51 points to 20,194.40.

The euphoria of Diwali week has ebbed and correction in Indian market will continue in response to consolidation in global markets, feel experts.

Raychaudhuri predicts 10 percent correction in Indian market from current levels and sees Sensex touching 18900 level .

Shares of ITC, HDFC Bank, TCS and Bharti Airtel lost more than 1.6 percent followed by Reliance Industries and TCS with around 1 percent loss.

Cipla lost 2.5 percent ahead of its September quarter earnings that will be announced later in the day today. Analysts expect sharp fall in standalone profits and operating profit margin for the quarter.

However, Tata Motors shares rebounded with 1.6 percent gains after falling for two consecutive sessions on downgrade by brokerage houses.

Sun Pharma and Tata Steel gained more than 1.6 percent in anticipation of strong quarterly earnings. More than 47 percent rise in Taro's net income Y-o-Y at USD 96.3 million, too, boosted Sun Pharma.

State Bank of India gained more than 1 percent as its asset quality was not as bad as feared , but net profit dropped 35 percent - more than analysts' expectations to Rs 2,375 crore for the quarter ended September 2013.

Second quarter earnings, too, helped M&M rise 1.8 percent as its profit rose 10 percent year-on-year to Rs 989.5 crore due to strong sales performance of tractor business and tight control on material cost and all expenses. No deterioration in automotive segment margin was also the reason for upmove in share price.

ONGC gained a percent as oil & gas explorer, which announced September quarter earnings after market hours, showed a 51 percent rise in net profit at Rs 6,064 crore.

Meanwhile, the rupee snapped five-day losing streak today. It gained 25 paise to 63.46 against the US dollar (at 16:10 hours IST) as dealers believe the RBI may have sold dollars via PSU banks.

On the global front, major Asian markets like Hang Seng and Shanghai fell nearly 2 percent on uncertainty over Fed tapering. European markets were trading 0.3-0.9 percent lower (at 16:10 hours IST).

3:50 pm Market closing: After a lot of struggle with the bears, the market ultimately closed in the red. The Sensex closed down 87.51 points at 20194.40, and the Nifty lost 28.45 points to close at 5989.60. About 1052 shares have advanced, 1363 shares declined, and 161 shares are unchanged.

Hindalco , Tata Steel , M&M, Sun Pharma and Tata Motors were top gainers in the Sensex. Among the laggards were Cipla , GAIL , Sesa Sterlite, Hero Motocorp and HDFC Bank .

3:40 pm Update: The government will hold roadshows in three countries next week ahead of its plan to sell a 5 percent stake in Coal India , the world's largest producer of the commodity, reports PTI.

"The roadshows will take place next week in three countries -- Singapore, Hong Kong, Australia," a source said, adding that they will go on for a week.

Last month, the government held roadshows in five nations, including Germany and the UK.

3:30 pm Buzzer: FMCG major Gillette India 's stock surged nearly 5 per cent in the afternoon trade today as the company launched its one-day offer-for-sale (OFS) at a floor price of Rs 1,650.

The base price is at an over 15 per cent discount over the yesterday's closing price of Rs 1,959.55 apiece.

Gillette India got bids for 3.99 lakh shares compared to 28.57 lakh shares on offer at 1445 hrs. The OFS is already subscribed 14 per cent at an indicative bid price of Rs 1,726.35 per share.

At the base price, these shares would be worth about Rs 471.52 crore.

The slide in the market continued as the Sensex is down 77.76 points at 20204.15. The Nifty slips 31.70 points to 5986.35.

About 965 shares have advanced, 1366 shares declined, and 138 shares are unchanged.

Ridham Desai of Morgan Stanley expects a 10 percent downside for the Sensex in the 12 months. 

"I do see some absolute downside to share prices. Our Sensex target actually calls for a 10 percent downside. We don't have a year end target anymore but it is a 12-month target," he said in an interview to CNBC-TV18.

Meanwhile, barely a month after the rupee hit a two-month high and showed signs of stabilising after its brutal fall this year, the currency is at risk from a re-emergence of heavy demand for dollars from oil importing firms.

As the rupee hit a nine-week low against the dollar on Wednesday, extending its drop over four trading sessions to 2 percent, the overriding fear in Indian markets was the return of dollar buying by oil companies, coupled with concerns the Reserve Bank of India (RBI) will soon wind down a special dollar facility for these firms.

03:00pm Andhra Bank plunges 4%

Public sector lender Andhra Bank disappointed street with the second quarter net profit falling 78.3 percent year-on-year to Rs 70.7 crore on higher provisions.

Net interest income grew 28 percent to Rs 1,145.4 crore in thre-month period ended September 2013 from Rs 894 crore in a year ago period.

Provisions spiked 30.44 percent sequentially (up 260 percent year-on-year) to Rs 502.2 crore during September quarter.

02:50pm Rupee recovers
The rupee gained 23 paise to 63.48 against the US dollar after hitting an intraday low of 63.90 per dollar.

Dealers believe the RBI may have sold dollars via PSU banks, which help snapping five-day losing streak for the rupee.

02:40pm Gainers & Losers
Sesa Sterlite is the biggest loser with a 3 percent fall followed by HDFC Bank and Bharti Airtel with 2 percent decline.

Shares of TCS , ITC , ICICI Bank and L&T lost around 1 percent while HUL , Sun Pharma , Tata Motors , M&M and Hindalco gained 1-2 percent. SBI and ONGC advanced 0.8 percent each.

2:00 pm Market check: The Sensex is down 119.83 points at 20162.08, and the Nifty down 44.75 points at 5973.30. About 916 shares have advanced, 1319 shares declined, and 141 shares are unchanged.

1:50 pm Results: September quarter net profit of Mahindra and Mahindra jumped to Rs 989.5 crore from Rs 902 crore year-on-year.  However, revenue shrunk to Rs 8,929.6 crore from vs Rs 9,813 crore. Its tractor business EBIT grew to Rs 534 crore compared to Rs 392 crore in the year-ago period. The stock jumped around 1 percent on the BSE.

1:40 pm Result: Private sector lender Karur Vysya Bank's second quarter net profit fell 37.5 percent year-on-year to Rs 83 crore, dented by higher provisions and operating expenses.

Net interest income rose 6.57 percent Y-o-Y to Rs 298.4 crore in the quarter gone by.

During the same period, operating expenses jumped 41 percent to Rs 247.77 crore while other income soared to Rs 106.2 crore from Rs 85 crore.

1:30 pm Macro outlook: In the current scenario, it is widely expected that the Reserve Bank will once again raise policy rates despite slowing economic growth. The RBI had raised benchmark lending rate by 50 bps over previous two months. But Indranil Sengupta, chief economist at BofA ML does not see remission in inflation between now and the next policy meet.

"The RBI may raise rates in December policy and maintain status quo thereafter," he said.

Sengupta says the rupee will swing in the wide zone of 60-65 /USD range in the near term while FY14 Current Account Deficit may come in at 2.8 percent Of GDP. The continuous spike in lending rates by banks have hurt industrial growth and to revive this crucial backbone of the economy, Sengupta advocated rate cuts.

After six days of decline, there is some respite in the equity markets. The Sensex is up 62.44 points at 20344.35, and the Nifty is up 17.60 points at 6035.65. About 1078 shares have advanced, 1136 shares declined, and 148 shares are unchanged.

Midcaps are also holding firm but small caps are mildly in the red.

Experts are not too gung-ho on the market going ahead. Shankar Sharma of first global believes the bear market is not over yet and he expects more downside than upside from here. Ridham Desai of Morgan Stanley expects a 10 percent downside for the Sensex in the 12 months. He says that correction in the Indian market may deepen if the data from the US remains strong.

State bank of India's September quarter earnings were mixed . Its net interest income grew by 12 percent year-on-year to over Rs 12000 crore while profits take a beating, falling 35 percent on a yearly basis. During the period, asset quality worsened marginally whereas fresh slippages reduced. Reacting to the results, the stock is up 3 percent on the BSE.

Other big gainers on the Sensex are Sun Pharma, HUL, Tata Motors and Hindalco. Top losers in the Sensex are Sesa Sterlite, Cipla , GAIL , Hero Motocorp and Bharti Airtel.

01:00pm Market Update
The market gained some ground in afternoon trade as the Sensex is up 43.30 points at 20325.21, and the Nifty is up 8.80 points at 6026.85.

Shares of State Bank of India rallied 2.5 percent post second quarter earnings. Net profit fell 35 percent year-on-year to Rs 2,375 crore due to write-off of Rs 1,253 crore, but net interest income grew 11.6 percent Y-o-Y to Rs 12,252 crore in the quarter gone by.

Asset quality was stable as net non-performing advances (NPAs) grew 8 basis points sequentially to 2.91 percent and gross NPAs rose 8 basis points to 5.64 percent.

12:55pm NCC Boardroom
YD Murthy, Executive VP-Finance, NCC is confident of  achieving a 10 percent revenue growth for FY14 and topline of Rs 1700-1800 crore in Q3,Q4, on back of substantial orders of about Rs 3700 crore received in Q2.

"We are confident we will be able to generate EBITDA margins of 8.5-9% for FY14,'' says Murthy in an interview to CNBC-TV18.

According to him the company will be able to pare down the debt to the tune of Rs 200-250 crore by monetising some build operate transfer (BOT) and real estate assets.

12:50pm Rupee recovers
The rupee gained ground after falling for five consecutive sessions. It appreciated by 20 paise to 63.51 against the US dollar.

Dealers believe the Reserve Bank of India may have sold dollars via PSU banks.

12:45pm Jubilant Foodworks Boardroom

Jubilant Foodworks is gung-ho and absolutely upbeat about the medium to long-term consumption story in India and plans to increase its guidance for opening new stores in India despite its slow growth for the quarter ended September.

Ajay Kaul, CEO of the company told CNBC-TV18 that the company plans to open 135 new Domino's stores against its target of 125 previously. The company has also upped its Dunkin Donut new store target from 18 to 20 going ahead. The company is also receiving good response from its new markets Baramati and Puducherry, says Kaul.

The company however, is not hopeful of achieving its same store sales guidance of 8-10 percent going ahead, says Kaul.

12:15pm The market continued to gyrate in a range around its previous closing level due to lack of trigger. The Sensex is up 0.69 points at 20282.60 while the Nifty is down 1.80 points at 6016.25.

Ridham Desai of Morgan Stanley remains cautious on the markets. He expects a 10 percent downside for the Sensex in 12 months.

He feels correction in the Indian market may deepen if the data from US remains strong, but long-term investors should stick to the market.

Shares of Reliance Communications gained nearly 6 percent as second quarter reported profit after tax jumped over six-fold to Rs 675 crore and adjusted profit after tax doubled to Rs 234 crore compared to previous quarter.

Aban Offshore too reported strong numbers with the net profit growing 58 percent year-on-year to Rs 77.7 crore and operating profit margin expanded 180 basis points Y-o-Y to 53.1 percent during second quarter.

Jet Airways surged 3 percent as the Competition Commission of India approved Jet-Etihad deal, paving the way for Etihad to acquire 24 percent in the Indian airline. CCI says the deal is not anti-competitive and will actually bring airfares down, but the order raises issues of control.

12:00 pm Buzzer: Bata India stocks surge 4.3 percent after its parent Bata B N B V bought 608,657 shares of the company at 888.05 rupees per share via a bulk deal on Tuesday, as per the Bombay Stock Exchange data.

The bulk deal raises parent company's stake to 52.95 percent from 52.01.

"Bata's parent company believes that the growth has bottomed out for its Indian arm, the creeping acquisition endorses that," an analyst tracking the company at a domestic brokerage house said.

11:50 am Result poll: State-run oil & gas explorer ONGC will declare its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts expect good quarterly earnings on account of an extremely poor performance in previous quarter.
 
They expect net profit to rise 47 percent sequentially to Rs 5,900 crore in the quarter gone by. The company made one time provisions in June quarter.

11:40 am Rupee check: Reserve Bank of India is likely to have stepped in to prop up the rupee via state-run banks, from falling further after it opened at a nine-week low of 63.90 to the dollar, traders said.

The rupee is heading for a sixth straight-session slump, tracking the unexpected quickening of retail inflation in October, sparking rate hike fears as well as concerns over tapering of the dollar-swap window for oil firms.

11:30 am Market outlook: What we recently saw was more of a bear market rally, and that has played itself out fully , says Shankar Sharma of First Global.

"Anybody now walking into the party will be paying the bill and not having drinks on the house," Sharma said in an interview with CNBC-TV18. Sharma feels we are still in a bear market, and the upcoming general elections will weigh on sentiment.

Sharma said the fundamental picture now is much better than that in June-July, and that India has now broken free from the camp of peers like South Africa, Indonesia and Brazil. He does not see the rupee retesting its record low of 68-69/USD seen in August.  

The market is making mild gains with the Nifty just above the 6000 level. The Nifty is up 5.70 points at 6023.75 while the Sensex is up 44.75 points at 20326.66, About 879 shares have advanced, 850 shares declined, and 111 shares are unchanged.

Healthcare stocks are on buyers' list with Sun Pharma as lead gainer.

Sun Pharma is up over 3 percent after Taro's September quarter earnings beat expectations. Taro's sales grew 28 percent year-on-year. Its operating profits grew faster at 46 percent led by 740 basis points margin expansion. Religare has hiked its target price to Rs 725 solely.

Other major gainers in the Sensex are Tata Steel , BHEL , Tata Motors and Hindalco .

Banks are still under pressure. Axis Bank is down 2 percent. Sesa Sterlite, GAIL , L&T, Hero Motocorp and HDFC Bank are other laggards.

The rupee opened at a two-month low against the dolar on poor sentiment after the disappointing CPI data. Government bond prices fell after the CPI rose to a seven-month high of 10.09 percent in October and are under pressure ahead of the Rs 15,000 crore auction today

Asian markets trend lower as heightened uncertainty over the taper timeline and disappointment over lack of details on policy reforms by China weigh on sentiment.

Currencies saw some strength in the dollar which is trading above 81 while the euro dollar is at 1.34 levels. Crude prices gained this morning after trending weak yesterday. Brent is trading above USD 106/bbl. While Nymex is nearing USD 93/bbl and gold prices too inched higher a tad.

11:00am Market Update
The market remained lacklustre in morning trade. The Sensex is up 36.08 points at 20317.99, and the Nifty is up 6.45 points at 6024.50.

Tata Motors rebounded on short covering today, rising 2 percent after falling more than 6 percent in previous two sessions on brokerages downgrade reports.

However, financials continued to trade lower on fears of rate hike after CPI inflation climbed above 10 percent for October. State Bank of India , ICICI Bank and HDFC Bank declined between 0.3-0.6 percent.

10:55am Jet flies 7%
Shares of Jet Airways jumped 7 percent in intraday trade on Wednesday as it may soon roll out operations with Etihad. The Competition Commission of India (CCI) has finally cleared the much-awaited Jet-Etihad deal , which was pending since April. The Abu Dhabi-based airline will acquire 24 percent stake in the Naresh Goyal-led Indian carrier for Rs 2,058 crore.

However, the CCI has mentioned very specifically that if ever in future the commission finds either of the companies or this combination having any implications or impact on competition then action could be taken against them.

10:45am GMR Infra drops 2% post Q2 numbers

Infrastructure company's net loss widened to Rs 393 crore in three-month period ended September 2013 from Rs 179.3 crore in a year ago quarter, but operating profit margin expanded 260 basis points Y-o-Y to 24.7 percent.

10:36am SBI weak ahead of earnings

According to a CNBC-TV18 poll, profit after tax is likely to decline 27 percent year-on-year to Rs 2,675 crore while net interest income (the difference between interest earned and interest expended) may increase 8 percent Y-o-Y to Rs 11,861 crore in three-month period ended September 2013.

10:19am The market is directionless today after falling for six consecutive sessions from its record high. On the global front, Asian markets are weak on uncertainty over Fed tapering.

The Sensex is up 9.17 points at 20291.08 while the Nifty is down 1.20 points at 6016.85 while the rupee continued its slide for the sixth straight day, falling 7 paise to 63.77 per dollar.

Manishi Raychaudhuri of BNP Paribas Securities expects the home currency, which has fallen to 63 against the US dollar, to continue to remain weak going forward.

The euphoria of Diwali week has ebbed and correction in Indian market will continue in the foreseeable future in response to consolidation in global markets. Raychaudhuri predicts 10 percent correction in Indian market from current levels and sees Sensex touching 18900 levels.

Sun Pharma is the biggest gainer among largecaps in the Sensex, rising 3.5 percent ahead of second quarter earnings. Taro numbers too helped the stock rally. Net income rose 47.2 percent Y-o-Y to USD 96.3 million and net sales jumped 27.5 percent to USD 205.3 million in the quarter gone by.

Ahead of September quarter earnings, Tata Steel gained more than 1 percent and M&M rose 0.76 percent while ONGC , Cipla , Coal India and State Bank of India are under pressure.

9:55 am Result poll: Mahindra and Mahindra (M&M) will declare its second quarter (July-September) results today. According to a CNBC-TV18 poll, analysts feel the trend of June quarter will be continued in September quarter as well, as tractor volumes growth will compensate for slowdown in auto volumes.

Analysts expect profit after tax of the company to fall 5 percent on a yearly basis to Rs 860 crore and revenue to decline 10.5 percent Y-o-Y to Rs 8,780 crore in three-month period ended September 2013.

9:45 am Market Check: Though the market has recovered a bit, selling pressure continues to be seen. The Sensex is up 30.88 points at 20312.79, and the Nifty up 4.70 points  at 6022.75. About 501 shares have advanced, 586 shares declined, and 46 shares are unchanged.

9:40 am Buzzer: Shares of Lanco Industries jumps around 9 percent in early trade. There was a block deal where 17.75 lakh shares (4.46 percent)  exchanged hands on the BSE at Rs 21.05 per share. The stock was quoting at Rs 22.30, up Rs 1.25, or 5.94 percent on the

9:30 am  FII view: Laurence Balanco of CLSA feels that with the Nifty falling nearly 4 percent following the failed breakout attempt above 6,330-6,340 resistance provided by the previous peak, one should now look for price action to once again fade to form a right shoulder of a minor head-and-shoulder topping pattern. "A break below 6,080-6,107 support should result in move down to the 5,870-5,880 area over the coming weeks," he said.

According to Bhuvnesh Singh of Barclays, with most of the asset plays highly leveraged, India may be in need of a new set of companies to invest in further asset rollouts. "These companies should have the financial wherewithal to invest in the current part of the cycle where a lack of bidders could produce some of the highest R-O-E assets. Companies with relatively large and unleveraged balance sheets in cyclical sectors include Reliance Industries, ONGC and Coal India," he adds.

The market has opened in negative terrain. The Sensex is down 13.70 points at 20268.21, and the Nifty is down 18.95 points at 5999.10. About 133 shares have advanced, 183 shares declined, and 17 shares are unchanged.

Among the top losers are ICICI Bank, SBI, Hindalco, HDFC Bank and Bajaj Auto. Sun Pharma, Tata Motors, Bharti Airtel, TCS and Dr Reddy's Labs are gainers.

The industry output on Monday came in lower-than-expectation at 2 percent and the consumer inflation came in at 10.09 percent.

Meanwhile, rupee continued its downtrend for the sixth consecutive session on Wednesday as it is heading towards 64 per dollar.The currency fell 19 paise in early trade to 63.90 per dollar as against previous day's closing of 63.71 per dollar.

According to Himanshu Arora of Religare, dollar is expected to trade higher in the next session due to weak cues from CPI and IIP. "Continued strength in the dollar index, as seen in the past few trading sessions may also underpin dollar against the rupee in domestic market," he adds.

He says the range for the day is seen between 63.50-64.15/USD.

In the global space, the US markets ended lower on Tuesday after rising bond yields increased debate over how soon the Federal Reserve would start trimming its monetary stimulus. Dow shed 31 points and S&P 500 closed down by 4 points. Fed officials, however, offered diverging views, adding to the uncertainty about the outlook for their easy-money policies.

Asia followed its Wall Street peers , lowering, on the heightened talks of scaling back Fed stimulus weighing on sentiment.

China's Shanghai Composite slipped 0.91 percent or 19.38 points at 2,107.39. Japan's Nikkei shed 0.43 percent or 62.87 points at 14,525.81. Among commodities, Nymex futures fell more than USD 2 a barrel and gold traded near a four-week trough.