Nifty closes flat ahead of F&O expiry; Tata Motors gains 2%
27 November 2013
The market closed Wednesday's rangebound session on a flat note ahead of expiry of November derivative contracts on Thursday. Investors are also cautious ahead of second quarter GDP and fiscal deficit data due on Friday.
The Sensex was down 4.76 points at 20,420.26, and the Nifty fell 2 points to 6,057.10.
During November series, the Nifty plunged 3.81 percent and the Sensex lost 3.5 percent weighed down by financials, oil & gas and FMCG stocks.
Experts expect some selling pressure on expiry day tomorrow as they are cautious after foreign institutional investors sold more than Rs 300 crore worth of shares on Tuesday - the big sell-off for the first time since September 30. In fact, the downward journey may also continue in December series as well, feel experts.
According to Yogesh Radke, Head of Quantitative Research at Edelweiss Securities, if the Nifty breaks 6000 level, it can touch 5,850 level and perhaps fall further to 5,750 level, depending on the outcome of the state elections.
"We are finding short side aggression to get rolled and that is the reason we are seeing some amount of lackluster rollovers in Bank Nifty," Radke said.
Meanwhile, Vineet Bhatnagar, MD of PhillipCapital feels the turbulence seen in the market in the past few sessions of the November series is likely to continue going into December.
Major largecaps like Infosys, Reliance Industries, State Bank of India, TCS, HUL and ICICI Bank fell between 0.3-1 percent while Bharti Airtel dropped nearly 2 percent.3:50 pm Market closing: The market volatile trading session on a flat note. The Sensex ends down 4.76 points at 20420.26, and the Nifty closes at 6057, down 2.00 points. About 1120 shares have advanced, 1329 shares declined, and 156 shares are unchanged.
Tata Motors , ITC , ONGC , Coal India and Dr Reddy's Labs were top gainers in the Sensex. Top losers include Bharti Airtel , NTPC , SBI, Sesa Serlite and Wipro .
3:40 pm Alert: India's M3 money supply rose an annualised 13.8 percent in the two weeks to November 15, slower than 13.4 percent a year earlier, the Reserve Bank of India said, reports Reuters.
Money supply was 90.74 trillion rupees as of November 15, compared with 90.82 trillion rupees on November 1, the central bank data showed.
The central bank said reserve money rose 9.1 percent year-on-year in the week to November 22, faster than 4.6 percent a year earlier.
3:30 pm Market outlook: The market is likely to see downward pressure in tomorrow's expiry, says Yogesh Radke, Head of Quantitative Research at Edelweiss Securities. He expects it to continue in the December series as well.
According to him, if the Nifty breaks 6000 levels, it can touch 5,850 level and perhaps fall further to 5,750 level, depending on the outcome of the state elections. He says, at the moment, the market is seeing only short-side aggression. "We are finding short side aggression to get rolled and that is the reason we are seeing some amount of lacklustre rollovers in Bank Nifty," Radke told CNBC-TV18.
After a feeble positive start the market is in treading in choppy water. Banks offering no support but a few auto stocks are holding up.
The Sensex is up 35.03 points at 20460.05, and the Nifty is up 3.70 points at 6062.80. About 1078 shares have advanced, 1262 shares declined, and 159 shares are unchanged.
Tata Motors with a gain of over 2 percent is the biggest gainer in the Sensex. Other gainers include ONGC, ITC, DR Reddy's Labs and Coal India.
Among the major losers are Bharti Airtel, NTPC, BHEL , Sesa Sterlite and Wipro.
The rupee is marginally higher on some inflows. Bond prices continue to rise on the back of a fall in US treasury yields and some strength in the rupee.
The Asian markets are mixed. A recovering yen pushes the Nikkei lower. Bangkok faces a fourth day of anti-govt protests that threaten to topple the Yingluck Shinawatra government.
03:05pm Market Update
The market is extremely volatile in last hour of trade as the Sensex is up 52.51 points to 20,477.53, and the Nifty is up 12.45 points to 6,071.55.
03:00pm Nestle gains 2%
Nestle India shares gained more than 2 percent on reports that parent company Nestle SA may hike stake in its Indian subsidiary via share buyback.
Nestle SA wants to increase Nestle India stake to 75 percent from 62.8 percent, according to reports.
02:54pm Maruti Suzuki down 0.8 percent
Maruti Suzuki will recall 1,492 vehicles across 4 models that manufactured between October 19-26. The company will replace steering columns free if found defective.
Recalled vehicles include Ertiga, Swift, Dzire and A-Star.
02:44pm Rolta talks to CNBC-TV18
KK Singh, CMD of Rolta India said the company bagged USD 25 million 3D City modelling project in West Asia.
He expects 38-40 percent earnings before interest, tax, depreciation and amortisation (EBITDA) margin on order and expects to execute the project in next 1-2 years.
02:34pm Eros International in focus
Temasek Fullerton bought stake in Eros International Plc for USD 22 million.
02:24pm Movers and Shakers
State Bank of India , Bharti Airtel , Wipro , Sesa Sterlite, GAIL , NTPC and BHEL lost 1-2 percent followed by Reliance Industries , Infosys , HDFC and ICICI Bank with 0.3-0.5 percent loss.
However, ITC shares gained 1 percent on reports that the company hiked some cigarette product prices by Rs 4-5 per pack of 10 pieces.
Tata Motors rallied 2 percent and ONGC rose over a percent.
02:14pm The market is lacklustre in afternoon trade today as traders are cautious ahead of ahead of expiry of November derivatives contracts on Thursday.
The Sensex is down 23.71 points at 20,401.31, and the Nifty is down 12.40 points at 6,046.70. About 951 shares have advanced while 1295 shares declined on the BSE.
The market is likely to see downward pressure in tomorrow's expiry, says Yogesh Radke, Head of Quantitative Research at Edelweiss Securities. He expects it to continue in the December series as well.
According to him, if the Nifty breaks 6000 levels, it can touch 5,850 level and perhaps fall further to 5,750 level, depending on the outcome of the state elections. He says, at the moment, the market is seeing only short-side aggression. "We are finding short side aggression to get rolled and that is the reason we are seeing some amount of lackluster rollovers in Bank Nifty," Radke told CNBC-TV18.
Most active shares are United Spirits (up 2 percent), Wockhardt (down 9 percent), Westlife Development (down 0.6 percent), SBI (down 1.2 percent), LIC Housing Finance (down 3 percent), ICICI Bank (down 0.6 percent), Infosys (down 0.5 percent) and Tata Motors (up 1.7 percent).
Meanwhile, the rupee gained 25 paise to 62.25 against the US dollar.
1:50 pm Alert: India does not see an immediate need for a local reinsurance fund for refiners, the oil secretary said, after some trade sanctions with Iran were eased following a deal between Tehran and six world powers to curb the Islamic Republic's nuclear programme, reports Reuters.
Vivek Rae, however, said that India will continue its efforts towards forming a local reinsurance fund.
The deal suspends sanctions provisions on insurance, which had left refiners that processed Iranian oil without cover and resulted in India's imports falling to below even the level permitted by sanctions.
1:40 pm Interview: Newly-appointed chairman of MCX -SX, GK Pillai, is on a mission to convince investors that his company has nothing to do with the scam-tainted National Spot Exchange or the commodity exchange MCX, all part of Financial Technologies group. The turn of events at NSEL has affected the credibility of the FT group in general, prompting brokers and investors to think twice before dealing with any of the companies in the fold.
"Our task initially is to build up confidence among the members and the investors about MCX-SX to show that there is no financial transaction that MCX-SX has had, which is linked in any way with NSEL and the MCX-Commodity Exchange," Pillai said in an interview to CNBC-TV18.
1:30 pm Opinion: Vineet Bhatnagar, MD, PhillipCapital feels the Nifty is likely to find strong support at 5900-5950. Bhatnagar, who sees the Nifty trading in the range of 5,900-6,300 next month, is not hopeful that the index will breach its record high in December.
On specific stocks, index heavyweights like RIL , HDFC , ICICI Bank and ITC , which have fallen nearly 4-10 percent in November series may not see more downward pressure in the upcoming series, he added.
Further, he is positive on private banks and is betting on Bajaj Auto and Hero MotoCorp from the auto space. Also, he recommends investing in Crompton Greaves , Voltas and Tata Steel .
It is a choppy trading session as the Nifty struggles to hold firm at 6050. The Nifty is down 19.60 points at 6039.50. The Sensex is down 52.29 points at 20372.73. About 892 shares have advanced, 1255 shares declined, and 146 shares are unchanged.
BHEL , Bharti Airtel , Sesa Strelite, Sun Pharma and HDFC are top losers in the Sensex. Among the top gainers are ONGC , Tata Motors , ITC, Bajaj Auto and Coal India .
Third round of talks between the UP government and sugar mill owners have failed. The UP government filed a case against three sugar mills for failure to begin cane crushing operations. The coercive actions spark protests from mill owners. They are willing to run mills at "no profit-no loss" if they are nationalised.
The United Spirits stock surged over 2 percent as it emerged that Diageo hiked its stake in the company from the open market at a steep premium. Sources say PE players expressed interest in buying most of Diageo's Whyte & Mackay business for around USD 1.3 billion.
Drug-maker Wockhardt falls foul of the US FDA once again. It's Chikalthana plant received an import notice from the US drug regulator for non-compliance with good manufacturing practices. The move is likely to cost the company over Rs 1,200 crore.
01:00pm Market Update
The market continued to trade marginally lower amid volatility as the Sensex is down 28.50 points to 20,396.52, and the Nifty is down 13.70 points to 6,045.40.
About 915 shares have advanced, 1214 shares declined, and 159 shares are unchanged.
12:50pm Wockhardt speaks post import alert from USFDA
"We have received warning letter from US Food and Drug Administration (USFDA) for Chikalthana facility. USFDA excluded 5 products from import alert. We already initiated steps to address US FDA observations," Wockhardt said.
"Metroprolol XR (which is used to treat high blood pressure) is under the import alert," the company added.
The stock is down 8.95 percent to Rs 429.75 amid hefty volumes on the BSE and is one of the top five most active stocks today.
12:45pm Edelweiss Financial Services up 4%
The board of directors of Edelweiss Financial increased the limits of foreign institutional investors (FIIs) holding in the equity share capital of the company from 24 percent to 28 percent.
12:40pm ICICIDirect says valuations of Automotive Axle looks expensive
"Although the stock price has significantly corrected over the past year and does partly capture the severe downturn faced by the medium and heavy commercial vehicle industry, valuations still remain expensive as earnings visibility remains poor and is likely to suppress the valuation multiples. We are dropping coverage on the stock and recommend that investors exit the stock on rallies," ICICIDirect report said. The stock slipped 3%.
12:30pm ONGC talks on gas price hike
The proposed doubling of gas price to USD 8.4 mmbtu from April 1 next year should add roughly Rs 4000 crore to annual profit, ONGC chairman and managing director Sudhir Vasudeva said in an interview to CNBC-TV18.
Oil minister Veerappa Moily Tuesday reiterated the government's commitment to raise gas prices and said the revised gas price would be notified shortly.
"What came as music to our ears yesterday was that very categorically it was told that we will be given the producer price and as regards the subsidy to be given to fertilizer and power sectors, that would be decided between the finance ministry and the concerned ministry,'' Vasudeva said.
Vasudeva is hoping that the government will allow ONGC to retain much of the profits from the higher gas prices, as the company was bleeding cash from selling oil at subsidized prices.
12:20pm Marico says worst is behind for company
The second quarter displayed a mixed set of numbers from companies in the fast moving consumer goods sector which were battling a slowdown in urban spending. But FMCG major Marico is confident of securing decent growth going ahead on the back of robust rural demand.
Speaking to CNBC-TV18, Saugata Gupta, Group CFO & CHRO (Chief HR & Strategy) said the company is counting on significant improvement in volume growth over the next few quarters. The company is embarking on a strategy of direct distribution and focussing on right cost structure and right price points for consumption to tick in.
12:10pm Wockhardt in focus
The Wockhardt stock has been hit badly and is down about 8 percent on the back of USFDA issuing an import alert on its Chikalthana facility. 70 percent of its EBITDA was expected to come from this facility next year.
Prakash Agarwal, pharma analyst at CIMB says 23 percent of the total topline comes from the Chikalthana facility. He says net-net there could be a USD 100-120 million topline impact, which could culminate into Rs 20-21 of EPS which is 26 percent of EPS impact.
The pharma company's future Abbreviated New Drug Application (ANDA) approvals would be blocked because of this import alert, he says.
12:00pm The market fell marginally amid volatility in noon trade, weighed down by financials, capital goods, IT and power stocks. The Nifty slipped below the 6050 level at 6042.35, down 16.75 points while the Sensex declined 36.64 points to 20,388.38.
The month of December may be a lacklustre month for the markets. Foreign Institutional Investor (FII) inflows may moderate because globally these are the times when most of the institutional players start looking to close their books for the year, says BP Singh of Pramerica Mutual Fund.
Except for the elections, there are no major events lined up for the month, he says. He does not think the December state elections will have much of an impact on the markets.
Bharti Airtel and BHEL topped the selling list, falling 2 percent each followed by SBI , Sun Pharma and Sesa Sterlite with over 1 percent loss.
However, ITC shares gained nearly a percent on reports that the company hiked some cigarette prices by Rs 4-5 per pack of 10 pieces.
11:50 am Interview: The proposed doubling of gas price to USD 8.4 mmbtu from April 1 next year should add roughly Rs 4000 crore to annual profit, ONGC chairman and managing director Sudhir Vasudeva said in an interview to CNBC-TV18.
Oil minister Veerappa Moily Tuesday reiterated the government's commitment to raise gas prices and said the revised gas price would be notified shortly.
"What came as music to our ears yesterday was that very categorically it was told that we will be given the producer price and as regards the subsidy to be given to fertilizer and power sectors, that would be decided between the finance ministry and the concerned ministry," Vasudeva said.
11:40 am Buzzer: The US Food and Drug Administration has imposed an "import alert", effectively a ban, on the Chikalthana plant operated by Indian generic drugmaker Wockhard, the regulator said in a notice on its website. The stock fell 13.5 percent intraday.
An "import alert" results in the detention without physical examination of drugs from firms that have not met so-called good manufacturing practices, according to the FDA website.
11:30 am Market outlook: Abhineet Anand of Quant Capital feels aggressive bidding for lower number of orders is likely to keep margins of these companies under check and the sector is poised to witness pressure on capacity utilisation.
The broking firm has a buy call on industry major Larsen and Toubro with a target price of Rs 1,115. ''The second quarter earnings have been most encouraging for the company,'' he explained.
On the flipside, it recommends selling state-owned BHEL. Quant Capital has cut its target price on the stock from Rs 141 to Rs 132. Other players like ABB and Siemens are also on Anand's sell list. It has slashed its target price on Cummins India from Rs 411 to Rs 396.
11:20 am Buzzer: Shares of Voltas jumped 3.5 percent intraday on Wednesday. Investors are euphoric about the company as it bagged three overseas project orders worth Rs 1,000 crore in the Middle-East.
The Tata group's air conditioning and engineering services firm Voltas first project is for a 120-bed integrated health centre and workers' hospital in Qatar. The second one is for a sports hall and administrative office in a 5,350-seat indoor stadium being built to host the World Cup Handball Competition scheduled for January 2015 in the country.
The market is quiet ahead of November series expiry on Thursday. The Sensex is down 34.38 points at 20390.64, and the Nifty slips 15.50 points to 6043.60.
About 826 shares have advanced, 993 shares declined, and 130 shares are unchanged.
Tata Motors, ONGC, Hindalco, Coal India and Dr Reddy's Labs are top gainers while Bharti Airtel, Bhel, Sesa Sterlite, HDFC Bank and L&T.
The rupee holds steady on the back of global dollar weakness. Month-end dollar demand from oil importers is seen limiting gains. Bond prices continue to rise on the back of a fall in US treasury yields and some strength in the rupee. Profit-booking at peaks prevent an all-out rally.
Modest gains on Wall Street are unable to boost Asian markets sentiment this morning. The Chinese markets outperform while the rest of Asia is lower on profit-taking and rising political tensions in the region.
In currencies, the dollar is at one-week low undermined by lower treasury yields. The euro-dollar swings back to 1.357 levels and the yen trades near 101/USD.
In commodities, Brent is stable this morning at USD 110/bbl while Nymex prices slip on the back of a surprise build up in US stockpiles. Gold prices are rangebound with strong US housing data stoking fresh tapering fears.
11:00am Market Update The market remained lacklustre as the Sensex is down 14.14 points at 20,410.88, and the Nifty is down 10.35 points at 6,048.75. Declining shares outpaced advancing ones by 905 to 791 on the BSE.
10:50am Market Expert The turbulence seen in the market in the past few sessions of the November series is likely to continue going into December, cautions Vineet Bhatnagar, MD, PhillipCapital.
The November F&O series will expire on Thursday and most market experts see it ending between 6000-6100. He told CNBC-TV8 that Nifty is likely to find strong support at 5900-5950.
Bhatnagar, who sees the Nifty trading in the range of 5,900-6,300 next month, is not hopeful that the index will breach its record high in December.
Meanwhile, those looking to play the index using the Futures could look at selling 5900 Put and 6300 Call.
10:40am Buzzers United Spirits gained 2 percent after Diageo purchased 19 lakh additional shares at Rs 2,400 apiece on Tuesday via its wholly owned subsidiary Relay BV.
Capital goods stocks like Voltas and Thermax climbed 2-3 percent after former received orders worth Rs 1,000 crore and latter bagged order worth Rs 269 crore.
Havells India gained more than 1 percent after Bank of America Merrill Lynch upgraded the stock to buy from neutral and raised target price by 20 percent to Rs 928. Upgrade in the stock is on the back of rise in quality of earnings, recovery in demand for household electrical goods, cost reduction and richer mix will offset higher tax.
10:30am Wockhardt under pressure
Shares of Wockhardt tanked 7 percent as US Food and Drug Administration issued import alert on company's Chikalthana unit. Import alert is on all products made at Chikalthana unit.
Brokerage house CIMB says 23 percent of company's topline comes from Chikalthana facility. "So import alert on this facility could impact earnings per share by 26 percent and highly profitable products like Toprol will be impacted," CIMB explained.
10:20am Midcaps and Smallcaps
In the midcap space, National Fertiliser, BASF, Sunteck Realty, Torrent Power and Era Infra Engineering gained 5-8 percent while Jet Airways, Eros International, Sobha Developer, Info Edge and Indian Hotels lost 2.5-4 percent.
Among smallcaps, Techno Electric, Ahlcon Parent, Sagar Cement, Minda Industries and Delta Corp rallied 4-7 percent whereas Seshasayee Paper, Shree Global, Merck, Suven Life Sciences and Educomp Solutions fell 4-7 percent.
10:10am The market is directionless in morning trade with the Nifty hovering around the 6060 level. Oil & gas and metal shares see buying interest while HDFC twins and technology stocks are under pressure.
The Sensex is up 13.33 points at 20,438.35 while the Nifty is down 0.15 points at 6,058.95. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising between 0.2-0.4 percent.
Advancing shares outnumbered declining ones by a ratio of 783 to 484 on the BSE.
Investors are cautious ahead of state elections results due on December 8 and general elections in 2014.
Manish Hemrajani of Oppenheimer believes that the 2014 general election will be a crucial factor in deciding the direction and the magnitude of investment activities.
"Market participants are pinning their hopes on a favourable and decisive election results, this implies that the forthcoming state elections in December 2013 could have a disproportionate impact on equities," he adds.
Shares of Tata Motors and ONGC rallied 1.5 percent each while Dr Reddy's Labs and Hindalco Industries rose 1.3 percent each.
However, Bharti Airtel is the biggest loser in the Sensex, falling 2 percent followed by Sesa Sterlite with 1.6 percent loss. Hindustan Unilever, HDFC and HDFC Bank declined more than 0.7 percent.
10:00 am Alert: Crisis-ridden bourse National Spot Exchange Ltd (NSEL) on Tuesday paid around Rs 9 crore against the scheduled payment amount of Rs 174.72 crore, defaulting for the 15th straight time, reports PTI.
With Tuesday's pay-out, NSEL has so far settled about Rs 235 crore against Rs 5,600 crore dues to 13,000 investors.
NSEL, which is engulfed in a Rs 5,600-crore payment crisis, had previously defaulted for 14 times. On its seventh pay-out date and thirteenth pay-out date, the bourse was unable to make any payment.
"The total amount being disbursed today is around Rs 9 crore," a NSEL spokesperson said.
9:50 am FII view: Manish Hemrajani of Oppenheimer believes 2014 general election to be a crucial factor in deciding the direction and magnitude of investment activities. "Market participants are pinning their hopes on a favourable and decisive election results. This implies that the forthcoming state elections in December 2013 could have a disproportionate impact on equities. We recommend defensive stocks," he sais in an interview to CNBC-TV18.
9:40 am Update: Cairn India will spend up to Rs 5,725 crore to buy back shares, a move which would help promoter Anil Agarwal-led Vedanta Group gain greater control over oil producer without putting any money.
Cairn, which is sitting on a cash pile of about USD 3 billion, in a statement, said its board has approved buying 17.09 crore shares or 8.9 per cent of the total shareholding, from open market at no more than Rs 335 apiece.
The buyback will start in January after shareholders nod and other sanctions and approvals are in place. The stock is flat in early mornign trade.
9:30 am Buzzer: Competition watchdog CCI is expected to rule out any change in its view on the Jet-Etihad deal. The CCI had cleared the deal but also noted in its review that Etihad will have significant control over Jet Airways , post the deal.
However, Jet and Etihad wanted the competition watchdog to review its stance. The Jet Etihad deal, which broadly involves a purchase of 24 percent stake by Etihad into Jet Airways was approved on November 12.
The stock is down 3 percent on the BSE.
The market continued to remain volatile in early Wednesday morning trade, after witnessing a sell-off in the previous session. The volatility is also on the back of November series expiry on Thursday.
The Sensex is down 7.95 points at 20,417.07, and the Nifty is down 3.90 points at 6,055.20. Advancing shares outnumbered declining ones by a ratio of 446 to 284 on the BSE.
Tata Motors , ITC , ONGC , Reliance and L&T are top gainers in the Sensex. Among the laggards are Sesa Sterlite, HDFC Bank , Bharti Airtel , BHEL and Sun Pharma .
Neelkanth Mishra of Credit Suisse is positive on the stocks that benefit from low-end consumption like ITC, Emami , Marico and Godrej Consumers. "We are also positive on Maruti and believe it is best placed among carmakers to withstand the sustained slowdown in middle-income consumption," he adds.
The rupee kicked-off trade at 62.45 per dollar on Wednesday, up 5 paise compared to previous close of 62.50 per dollar.
Pramit Brahmbhatt of Alpari India feels the rupee will be rangebound today with a slight negative bias owing to a weak equity market and strong month-end dollar demand by oil marketing companies and other importers.
However a strong euro and a weak dollar coupled with RBI's intervention in the market might aid rupee, he adds.
According to Brahmbhatt, the range for the day is seen between 62.1-63.10/USD.
Among the global markets, the Dow ended flat on Tuesday, still closing at a record high and the Nasdaq cleared 4,000 for the first time in 13 years lifted by better than expected housing data. However, mixed earnings reports dragged the European markets lower.
Meanwhile, Asian markets were unable to carry the overnight US momentum and the Nikkei slipped in early trade today.
Nymex prices slipped in early trade, while Brent is firm as demand-growth concerns arise after an industry report showed a higher than expected build in stockpiles in the world's largest oil consumer.
From precious metals space, gold was trading in a narrow range below USD 1,250 an ounce with strong US housing data stoking fears the Federal Reserve would soon begin rolling back stimulus measures that burnish the metal's appeal as a hedge against inflation.
However, Tata Motors topped the buying list, rising more than 2 percent followed by ONGC and L&T with 0.5-1 percent gains.
ITC shares climbed 1 percent on reports that the company hiked some cigarette product prices by Rs 4-5 per pack of 10 pieces.
In the broader space, Wockhardt tanked 9 percent after the pharma company received an import alert from US Food and Drug Administration on Chikalthana Unit. The company says Metroprolol XR, which is used to tread high blood pressure, is under the import alert.
However, United Spirits rallied nearly 3 percent as Diageo's unit Relay BV bought 19.7 lakh shares of the company at Rs 2400/share via block deal in previous session.