Sensex falls 246 points, shuts sub 21K on taper fears
12 December 2013
The 30-share BSE benchmark fell below the 21,000-mark for the first time in last four sessions, tracking weakness across the globe on Fed tapering woes. The market fell for the third consecutive session today, especially after it touched new highs on Monday. The Sensex fell 245.80 points or 1.16 percent to 20,925.61, and the Nifty declined 70.85 points or 1.12 percent to 6,237.05. Investors will remain worried till the direction from RBI policy and Federal meeting due next week; hence, the new highs are unlikely in near term, feel experts. Andrew Holland of Ambit Investment Advisors does not see market making new highs. He expects the Nifty to move towards 6000 level by month-end.
Market experts believe the consistent improvement in financial parameters may compel Federal Reserve to think of reducing monthly fiscal stimulus or give strong hint of tapering in its forthcoming policy meeting that is scheduled on December 17-18. ''Tapering will happen if not in December then definitely January,'' Andrew Holland said. Meanwhile, Nirmal Bang believes the Fed is set to roll out a mild tapering to the tune of USD 5-10 billion from its current monthly purchase of USD 85 billion in its December meeting. ''In order to reaffirm the markets on its pledge to keep the federal fund rate low for an extended period of time, the Fed may even lower the unemployment threshold of 6.5 percent at which it could consider raising interest rates,'' the Nirmal Bang report said.
Back home, industrial output data, which will be announced later in the day today, is expected to see contracting 1.2 percent in October as against a growth of 2 percent last month. It is largely driven by a high base effect. Even consumer price index is likely to remain elevated in double digits at 10 percent, a CNBC-TV18 poll says. These are important indicators for the Reserve Bank of India to determine monetary policy.
Stocks specific action
It was majorly a broadbased selling in the market today with the BSE Auto, Bank, Metal, Oil and Gas and Capital Goods indices falling between 1-2 percent. Tata Motors fell for the third straight day today, falling 4.5 percent on top of a 3 percent loss in earlier session after Jaguar Land Rover raised its capex guidance to GBP 3.5-3.7 billion for FY15. FY15 capex guidance poses a risk of negative free cash generation for Tata Motors, says Barclays in its report. The brokerage house cut target price on the stock to Rs 407 from Rs 431 apiece. Bajaj Auto, which was also on broker's radar, fell 2 percent. Bank of America Merrill Lynch downgraded the stock to neutral from buy and also cut target price by 13 percent Rs 2,100 from Rs 2,425 apiece. Among others, shares of ICICI Bank, ITC, Reliance Industries, TCS, ONGC, Larsen and Toubro, Bharti Airtel and State Bank of India lost between 1-3 percent. However, Tata Power bucked the trend, gaining nearly 4 percent followed by HDFC with a 1 percent gain. Among midcaps and smallcaps, SKS Microfinance gained 3 percent as micro finance lender completed its Rs 80.81 crore worth securitisation. Tata Teleservices surged over 7 percent on a media report that Tata group will inject Rs 4,000 crore in the company while Cadila Healthcare rose 2.65 percent on settlement of suit with Warner Chilcott. However, Kingfisher Airlines plunged 6.5 percent as a media reports suggested that Karnataka High Court has allowed banks to take possession of Kingfisher House in Mumbai. UB group stocks remained in focus today as well. UB Holdings rose 1.4 percent and United Breweries gained nearly 3 percent on source-based reports that Heineken, the largest shareholder in United Breweries (UB), has offered to buy UB group's stake in UB.
03:30pm Market Update
The market bleeds further in late trade on Thursday. The Sensex was down 258.68 points or 1.22 percent to 20,912.73, and the Nifty fell 70.85 points or 1.12 percent to 6,237.05 (as per provisional data). Shares of Tata Motors , ONGC , Coal India , ICICI Bank , Bajaj Auto , Ambuja Cements and IndusInd Bank were down 2.5-4.5 percent. Among midcaps, Coromandel International , Cox and Kings, Mcleod Russel, Amtek India and Gujarat Pipavav spiked 4-8 percent whereas Indian Infotech, Shipping Corporation, Blue Dart and Torrent Power slipped 3.5-5 percent.
03:20pm Lupin launches Duloxetine Hydrochloride
Lupin has launched Duloxetine Hydrochloride Delayed capsules in 20 mg, 30 mg and 60 mg strengths in the US. Duloxetine HCI DR capsules 20 mg, 30 mg and 60 mg strengths are the generic equivalent of Eli Lilly and Company's, Cymbaltaź Delayed-release Capsules 20 mg, 30 mg and 60 mg. These capsules are used for the treatment of major depressive disorders, generalised anxiety disorders and management of neuropathic pain associated with diabetic peripheral neuropathy. The stock is up 0.4 percent.
03:15pm Repo rate likely to increase
Raghu Kumar, co-founder of RKSV says it is very likely that the RBI will raise the repo rate on December 18. He believes tje inflation figures will give some insight as to whether the repo rate will stand at 8 percent or 8.25 percent at the end of the year. "Today's headline CPI inflation figure should provide some insight into what sorts of steps the RBI might take to curb inflation levels. With the GDP growth rate coming in at a better than expected 4.8 percent last month, the RBI has some leeway to continue increasing the Repo rate when it meets on 18th December. An CPI inflation figure of 10.1 percent or above would provide grounds for the Reserve Bank to raise the Interest rate by 25 or even 50 basis points. More confirmation would be given with the WPI inflation figures, due to be released two days prior to the interest rate decision," Kumar elaborated.
03:10pm Analysts expect contraction in IIP
Softening of domestic demand is a bigger worry than lower exports, says Leif Eskesen, HSBC Global Research. He expects IIP to contract by 1 percent annually due to falling electricity and mining outputs. Both for the WPI and CPI, he expects inflation numbers broadly in line with the previous months - above 10 percent for CPI, still above 7 percent for WPI, he adds.
03:05pm Market Update
The market fell 1 percent in last hour of trade with the Sensex falling below the 21000-mark and Nifty below the 6250 level weighed by auto, banks, oil & gas and metals stocks. The Sensex lost 207.84 points to 20,963.57, and the Nifty slipped 59.50 points to 6,248.40. About 1009 shares have advanced, 1345 shares declined, and 143 shares are unchanged. Shares of ICICI Bank, ONGC, Bajaj Auto and Coal India plunged 2-2.7 percent while ITC , Reliance Industries , TCS , Larsen and Toubro , Bharti Airtel and State Bank of India declined over 1 percent. Tata Motors maintained its southward journey for third day, falling more than 4 percent today. However, Tata Power surged 4.5 percent followed by HDFC with a 1.5 percent upmove.
02:59pm Bajaj Auto plunges 2% to Rs 1,955.75 on downgrade Bank of America Merrill Lynch downgraded rating on Bajaj Auto to neutral from buy and also cut target price by 13 percent Rs 2,100 from Rs 2,425 apiece. The cut in target price is driven by earnings per share cut of 4-7 percent over next two years, the report says. Bank of America Merrill Lynch says Hero Motocorp remains its preferred pick.
02:50pm Motherson Sumi talks to CNBC-TV18 Auto parts firm Motherson Sumi has won a € 2 billion order for its subsidiaries SMR and Peguform, Chairman Vivek Chaand Sehgal told CNBC-TV18. ''Peguform has received orders with € 4 billion since November 2012,'' he said, referring to the German firm the company acquired a few years back. He added that the company had received orders from Audi in Mexico and was looking to install a unit in Mexico to be able to service the new orders. ''We are also looking to increase capacities in China and Germany,'' Sehgal said. Pointing out that the company's topline had grown to USD 5.4 billion from USD 3 million in 1993, he said he was looking at a capital expenditure of Rs 700-800 crore in the next one year. On the firm's profitability targets, he said: ''We are guiding to be a company with a 40 percent ROCE (return on capital employed) by 2014-15.''
02:40pm Sensex may see 24000 Indian shares are forecast to scale new highs next year after elections, attracting offshore funds despite an expected rough period for emerging markets when the US Federal Reserve shifts monetary policy, a Reuters poll showed. The poll predicts a better performance than this year's 9 percent increase but far more modest than the 25 percent surge in 2012 when foreign investors bought a massive USD 24.4 billion worth of Indian stocks. The consensus of 21 strategists and brokerages polled Dec 4-11 put the index at 22,625 by the middle of next year and an all-time high of 24,000 by year-end, a gain of just over 13 percent from Wednesday's close of 21,171.41.
Uncertainty about the outcome of the elections, due by May, has prompted many investors and businesses to delay decisions as there are no clear favorites among leading parties to win a majority when India goes to elections, reports Reuters.
02:05pm The market is not showing any sign of recovery in afternoon trade as investors are nervous ahead of RBI policy and Federal Reserve meeting due next week. The Sensex lost 172.29 points or 0.81 percent to 20,999.12, and the Nifty fell 49.40 points or 0.78 percent to 6,258.50, continuing downtrend for the third straight day today after these indices touched record highs on Monday. Tata Motors is the major loser in the Sensex, falling 4 percent followed by ICICI Bank, Reliance Industries, TCS and ONGC with a 1-2 percent fall. Shares of Bank of Baroda , Punjab National Bank and Ambuja Cements lost 2-3 percent. However, the top gainer is Tata Power that rallied nearly 5 percent. GAIL and HDFC climbed 1 percent each. On the macro data front, the index of industrial production for October is likely to range between a growth of 1 percent and a decline of 3.5 percent. While on the inflation side, consumer price index for November is likely to come it at around 9.7 percent to around 10.8 percent. Remember these data points will be crucial in determining the RBI policy next week. Shares of Shasun Pharma gained 2 percent as the compnay is planning to sell Vizag unit.
01:50pm LT Foods talks to CNBC-TV18 VK Arora, CMD of LT Foods expects full-year topline to be around Rs 2,700 crore. He sees bottomline around Rs 90-100 crore. He says the company intends to invest Rs 40-50 crore in capex, sales and marketing in FY14. The stock fell 3.5 percent on profit booking after rallying 10 percent in earlier session on Qatar's tender of buying 24000 tonne of basmati rice from India.
01:40pm Most active shares Power Grid Corporation, Tata Motors , Idea Cellular , State Bank of India , Titan Company, ICICI Bank , Infosys and Tata Steel are the most active shares on exchanges. In the midcap space, Amtek India , Mcleod Russel, Coromandel International , Cox and Kings and NIIT Technologies rallied 4-7 percent whereas Indian Infotech, Ruchi Soya , CRISIL , Hexaware Tech and Jyothy Labs lost 2-4 percent.
01:30pm Cadila Healthcare settles suit, up 2% Cadila Healthcare today said it along with Zydus Pharmaceuticals (USA) Inc, have entered into an agreement with Warner Chilcott Company to settle all outstanding patent litigation related to Asacol HD (mesalamine) delayed-release tablets, reports PTI. The agreement remains subject to preparation and execution of definitive documentation, Cadila Healthcare said in a statement. As part of the agreement, Warner Chilcott will grant Cadila and Zydus a royalty- bearing license to market a generic version of Asacol HD beginning on November 15, 2015 or earlier under certain circumstances, following receipt by Zydus of final approval from the USFDA of its ANDA for generic Asacol HD, the company said. "Alternatively, if Zydus does not receive FDA approval of its generic Asacol HD by July 1, 2016, Zydus will be permitted to launch an authorised generic version of Asacol HD beginning on July 1, 2016," it added. Asacol is used to treat ulcerative colitis, proctitis and proctosigmoiditis.
01:20pm Sakthi Sugars talks to CNBC-TV18 Dismissing talks of the government doubling mandatory blending of ethanol to 10 percent, M Manickam, managing director, Sakthi Sugars, says the previous 5 percent blending wasn't implemented. Speaking to CNBC-TV18, Manickam says until cane prices are fixed at parity, the hike on blending limit will not make a big difference. ''We need the sugar prices to go up above Rs 34 for us to even breakeven. Nobody is talking about sugar prices they are only talking about marginal concepts. I think it is not going to really make any impact,'' he explains.
01:10pm Fed tapering may start in January Andrew Holland of Ambit Investment Advisors feels Fed tapering will happen if not in December then definitely January. "I am still not sure what the impact of the tapering will be and I think the market is going to be a little bit scared about that, but I am sure that the Fed will keep the monetary policy a little loose to help us through that period and we will sit here and say India has still enough to get us through the tapering," he elaborated.
01:00pm The slide in market continued for the third consecutive day today as likely contraction in industrial output and fears of Fed tapering weighed. The Sensex shed 160.15 points to 21,011.26, and the Nifty dropped 47.25 points to 6,260.65. Declining shares outnumbered advancing ones by a ratio of 1228 to 902 on the BSE. Broking firm Macquarie Capital sees the Nifty touching 7,200 level by December 2014. With the taper terror coming to fore yet again, most market watchers may feel that this is an aggressive target, however head of research Rakesh Arora disagrees. On the flipside, he doesn't expect the Nifty to correct more than 1-2 percent from the current levels and added that the probability of the index falling to 5,500 level is very low. Tata Motors extended its losses in afternoon trade, falling nearly 4 percent, in addition to a 3.25 percent decline in previous session. Raising capex guidance for FY15 by its UK subsidiary Jaguar Land Rover caused selling pressure in the stock, though JLR sales numbers for November were good. JLR sold 37,403 units in November, a growth of 25 percent compared to last year. Jaguar's retail sales rose 55 percent year-on-year to 6,244 units and Land Rover's sales increased 20 percent to 31,159 units during same month. Industrial output and consumer price index data will be announced today after market cloing. According to a CNBC-TV18 poll, IIP is expected to be contracting 1.2 percent in October as against a growth of 2 percent last month, largely driven by a high base effect. CPI is likely to remain elevated in double digits at 10 percent.
12:58pm FII view Ridham Desai of Morgan Stanley says beta is back and is now the best performing style in India. "The shift in investing styles now seems to have hit an extreme level. Over the past month, only five styles generated alpha, namely, beta, financial leverage, capex, high dividend yield and what the sell side consensus was recommending," he adds. According to him, small caps beat large caps. This is reminiscent of a full blown bull market, he adds.
12:50pm SKS Microfinance in bull grip Shares of SKS Microfinance surged as much as 4 percent in intraday trade today after the non-banking finance company completed its Rs 80.81 crore worth securitisation. "SKS Microfinance has downloaded the receivables from micro loans extended to 100,850 rural women entrepreneurs to a special purpose vehicle, and pass through certificates (PTCs) have been purchased by a major private sector bank. Notably, the entire pool qualifies for priority sector treatment as per RBI's priority sector lending guidelines," the company said in its filing to the exchange. SKS says the pool is rated AA (SO) signifying 'high degree of safety regarding timely servicing of financial obligation' by one of the leading rating agencies.
12:40pm Nikkei at one-week low on Fed tapering fears Japan's Nikkei share average dropped for a third day to a one-week low on Thursday, led by selling in futures and index heavy weights like SoftBank Corp as the mood was soured by renewed anxiety of an early reduction in US stimulus. The Nikkei ended down 1.1 percent to 15,341.82 after slipping to a low of 15,255.36, the weakest since last Friday. The Topix shed 0.7 percent to 1,242.23, with 29 of its 33 subsectors in negative territory. Traders said selling in futures and index-heavy stocks dragged down the market, with SoftBank Corp skidding 1.1 percent. It was the most traded stock by turnover, reports Reuters.
12:30pm CPI to be in double digits According to a CNBC-TV18 poll, consumer price index is widely expected to be in double digits, at around 10 percent. However, A Prasanna, Chief Economist, ICICI Securities Primary Dealership, is not as optimistic. He infact expects it to be on the higher side of the range, at 10.78 percent. The good news is, from hereon, he expects it to come off. Considering vegetable prices are already correcting, he expects CPI to remain in double digits for another month. "So by March we are looking at somewhere around 9 percent on headline CPI," he told CNBC-TV18. Mohan Shenoi, President - Group Treasury & Global Markets, Kotak Mahindra Bank , expects the Reserve Bank to hike repo rate by 25 basis points to guard against taper-related outflows. He says the political stance post the elections is clear – inflation needs to come down.
12:20pm FII View Bank of America Merrill Lynch expects the Sensex to correct around 19000-19500 levels in early 2014. However, its 2014-end Sensex target stands at 23,500, the report says. For the early part of the year, the brokerage house sees the market being driven by taper, supply of paper and rate hikes while it sees election hopes overshadowing any economic weakness in the first half of 2014. According to the report, the economy as well as earnings will take time to recover. For 2014, Bank of America Merrill Lynch's top buys include ICICI Bank , Lupin , Maruti Suzuki, TCS and ONGC while it expects Power Grid, Tata Steel and Hindustan Unilever to be the top underperformers. Fom the midcap space, the brokerage house is bullish on Bharat Forge , Motherson Sumi , LIC Housing Finance , Aurobindo Pharma and Eicher Motors .
12:10pm Jet Airways in focus A month after the Competition Commission of India gave its clearance to the acquisition of 24% equity stake by Middle-Eastern carrier Etihad in Jet Airways for Rs 2,058 crore a former senior executive of national carrier has rung the alarm bells. Former executive director of Air India Jitender Bhargava has now moved the Competition Appellate Tribunal seeking a stay on the merger as he claims the deal would have an ''adverse impact on the domestic aviation industry particularly Air India.'' The petition has been filed under section 58A of the Competition Act. In two separate petitions filed before COMPAT on December 11 Bhargava has alleged that the Competition Commission of India failed to initiate an inquiry as statutorily required under the law and thus granted an ''unconditional approval.'' In his petition Bharagava has argued that the commercial cooperation agreement or CCA – that works like the basic constitution of the deal – was also implemented by Jet and Etihad even before the CCI gave its nod. This he says that the deal itself is completely null and void.
12:00pm The market extended losses in noon trade with the Sensex falling more than 150 points weighed down by further fall in Tata Motors . Oil and gas, banks, auto, technology and pharma stocks were weak. The Sensex slipped 165.45 points or 0.78 percent to 21,005.96, and the Nifty fell 48.60 points or 0.77 percent to 6,259.30, but the broader markets outperformed benchmarks. The BSE Midcap and Smallcap indices were flat. Tata Motors plunged nearly 3 percent, in addition to a 3.25 percent fall in earlier session as its UK subsidiary Jaguar Land Rover (JLR) - the luxury car maker - raised capex guidance for FY15. Analysts feel the rise in capex will have impact on debt and free cash flow of the the company. JLR reported 25 percent growth in global sales at over 37,000 units. Jaguar sales ticked up 55 percent for November while Land Rover sales came in higher by 20 percent.
11:55am United Breweries and UB Holding in focus Heineken, the largest shareholder in United Breweries (UB), has offered to buy UB group's stake in UB, reports CNBC-TV18 quoting sources. It is learnt that UB group executives met top heads of Heineken recently. UB group is seeking premium for its stake in United Breweries, sources say. According to sources, UB group is likely to retain minority stake in UB and may sell part stake. Vijay Mallya is seeking to remain chairman of United Breweries. Sources say both Heineken and UB Group are negotiating on contours of the deal. Shares of UB and UB Holdings gained between 1-1.6 percent.
11:45am Nasscom outlook Nasscom president Som Mittal on Thursday said though the outlook for the Indian IT sector for FY14 looks good, he will maintain the revenue guidance at 12-14% for FY14, and will not revise it higher. Mittal, however, is happy that the rupee has stabilised. ''62-63/$ is a good level as it helps us offset many inflationary trends. 68/$ would have resulted in pricing pressure from clients,'' he said on CNBC TV 18 .
11:40am Nomura says buy Power Grid Nomura advises buying Power Grid Corporation and keeps its 12-month target price unchanged at Rs 129/share. "CERC draft norms entail a potential 5-6 percent dent to earnings. Final regulations are likely to be more balanced," Nomura report said. The brokerage house says the target price on the stock will drop by 2 percent If draft regulations are implemented in full.
11:30am Just Dial rises further Shares in search service provider Just Dial gained 2.2 percent after index compiler FTSE says it will include the stock in its FTSE AllCap index, effective from the start of trading on December 23, reports Reuters. FTSE also raised the 'investability weight' in its global equity index series of HCL Technologies to 38 percent from 30 percent and that of Tech Mahindra to 45 percent from 24 percent, according to a statement on its website.
11:20am IIHFL bonds issue opens India Infoline Housing Finance's (IIHFL) issue of secured, redeemable, non-convertible debentures (NCDs) of face value of Rs 1,000 each has opened for subscription today. The issue will close on December 20, 2013. IIHFL, the housing finance arm of India Infoline, retains the option to close on such earlier date or extended date up to a period of 30 days from the date of opening of the issue. The company aims to raise Rs 500 crore (NCD issue aggregating up to Rs 250 crore with an option to retain over-subscription up to Rs 250 crore). IIHFL's maiden public issue of IIFL Home Bonds with 5-year tenor, is offering a coupon rate of 11.52 percent per annum payable monthly.
11:10am Info Edge gains nearly 2% to Rs 460 Credit Suisse has an outperform rating on the stock and raised its target price to Rs 540 from Rs 420 apiece. "The stock has outperformed by 20 percent since Zomato raised funds. We see more upside potential in the stock and expect recruitment segment to accelerate significantly in FY15," Credit Suisse report said.
11:01am The market continued to fall for the third consecutive session today on Fed tapering fears. The Sensex lost 126.49 points to 21,044.92, and the Nifty fell 39.95 points to 6,267.95. Private banks, FMCG, auto and oil & gas stocks were under pressure while power stocks charged up again. Shares of Reliance Industries , Tata Motors , ICICI Bank and Bharti Airtel dropped between 1-2 percent. However, Tata Power bucked the trend, rising 6 percent. BHEL , HDFC , GAIL and Jindal Steel gained 0.5-1 percent. Andrew Holland of Ambit Investment does not expect higher levels from hereon and sees Nifty moving to 6000 level by end of 2013. He sees Fed tapering taking place between December and January. In macro data today, CNBC-TV18 poll sees October IIP contracting 1.2 percent as against a growth of 2 percent last month, largely driven by a high base effect. November consumer price index is likely to remain elevated in double digits at 10 percent. Both data will be announced post market hours today.
10:50am NSEL recovers more money The erstwhile CFO of P D Agroprocessors, Ranjeev Aggarwal, who is currently the director of Primezone Developers has agreed to pay Rs 42.77 crore directly to the National Spot Exchange (NSEL), in eight installments. The first payment of Rs 1 crore, as per the schedule, has been received today. PD Agro, the third largest borrower of NSEL which traded on the Exchange on behalf of Dunar Foods, Dulisons Cereals and Dulisons Foods, has a payment obligation of Rs 637.49 crore, of which has so far only managed to pay Rs 7.06 crore of the outstanding amount.
10:40am Credit Suisse view Credit Suisse does not expect index of industrial production for October and consumer price index for November to be good. The brokerage house believes India is better placed to deal with quantitative easing tapering. It expects US Fed to begin tapering in January 2014 post budget deal. Credit Suisse says RBI will be forced to hike rates as inflation remains sticky. According to the report, RBI will hike repo rate by 25 bps on December 18.
10:30am GMR Infrastructure consortium likely to get order A consortium of GMR Infrastructure and the Philippines' Megawide Construction Corp is the likely winner of a USD 400 million tender to build and operate a passenger terminal at an international airport in central Philippines. The consortium beat six others at an auction on Thursday by offering a premium of 14.4 billion pesos for the project at Mactan-Cebu International Airport, one of several infrastructure projects offered under a public-private partnership scheme, reports Reuters
10:20am Citi sees current account deficit at 2.7% of GDP Rohini Malkani of Citigroup maintains her view that trade deficit will narrow to USD 166.2 billion in FY14 from USD 195.7 billion last year." "The compression in the trade deficit is likely to bring down current account deficit (CAD) to 2.7 percent of GDP in FY14. This factors in the possibility of lower remittances in H2FY14 arising from the surge in FCNR deposits and rising un-official gold imports," she adds. She expects CAD to remain moderate at 2.7 percent of GDP in FY15 as well.
10:10am Cadila Healthcare in focus Shares of Cadila Healthcare climbed over 2.5 percent as the healthcare firm has tentatively settled Asacol patent litigation with Warner Chilcott. Kotak Securities believes the settlement improves visibility on US launches and expect US approvals to be the key stock trigger. The brokerage house raised a target price on the stock to Rs 830 from Rs 800 apiece.
10:00am Equity benchmarks fell nearly 0.7 percent in morning trade ahead of industrial output data that will be announced after market hours today. A CNBC-TV18 poll sees October index of industrial production contracting 1.2 percent as against a growth of 2 percent last month, largely driven by a high base effect. The Sensex declined 138.17 points to 21,033.24, and the Nifty slipped 43.15 points to 6,264.75. Declining shares outnumbered advancing ones by a ratio of 604 to 522 on the BSE. Weakness in Asian markets due to Fed tapering fears is also hurting the market. Investors are keenly waiting for RBI monetary policy and FOMC meeting due next week. Brokerage house Bank of India Merrill expects the Sensex to correct to around 19,000-19,500 in early 2014. The three key factors driving the correction will be (a) Tapering by the US Fed, (b) share issues by the government and (c) rate hikes and sluggish Dec quarter earnings. "Although we believe India is now better prepared for tapering (low current account deficit) and lower FII debt investments), we still see an impact on both equity and currency markets, though of a lower intensity than we did six months ago," said the note by the brokerage.
09:55am Market Expert If the Reserve Bank of India governor Raghuram Rajan manages to address the twin issues of inflation and rupee fall then there will be a period of consolidation in the market, followed by a move up, believes Pashupati Advani of NBIE. However, he cautions till banks and infrastructure companies start moving, pulling up the rest of the market will be difficult.
09:50am Tata Teleservices on fire Shares of Tata Teleservices gained more than 10 percent on a media report that the Tata Group is investing around Rs 4,000 crore in two tranches in its telecom arm Tata Teleservices. "This is after banks said they could not renew loans for Tata Tele until the company's annual losses were funded," according to report. "The investment isn't meant to fund spending on the impending airwave auction to be conducted by the government," a media report said quoting unnamed sources.
09:40am Lanco Infratech extends gains Shares in Lanco Infratech are up about 2.5 percent after media reports suggested a consortium of lenders has agreed to restructure about Rs 8,000 crore of debt-laden firm's liabilities. Part of the L Madhusudan Rao-promoted Lanco Group, which is reeling under debt of about Rs 40,000 crore, the approval of the debt restructuring is likely to offer a lifeline to the firm, which operates in the highly capital-intensive power, construction and real-estate businesses.
09:30am FII View Viktor Shvets of Macquarie says the global macro backdrop is unlikely to stabilise. "It is not a question of tapering, but rather inability to withdraw," he adds. He remains overweight on north east asia, principally China and Korea while he likes Philippines but remains underweight on India and Indonesia. "The global recovery is uneven and deflation remains strong and risks may not decrease in the near-term," Shvets says.
09:15am The market extended its losses in early trade on Thursday following weakness in global peers over Fed tapering fears, continuing fall for the third consecutive session. The Sensex fell 115.60 points to 21,055.81, and the Nifty declined 31.45 points to 6,276.45. Shares of ICICI Bank , Larsen and Toubro , Tata Motors , Bharti Airtel , Bajaj Auto and Coal India declined 1-1.7 percent. HDFC Bank , Infosys , Reliance Industries , Sun Pharma and State Bank of India lost around 0.5 percent. However, HDFC, Hindustan Unilever , ITC and GAIL are only gainers in the Sensex. Indian rupee fell further in opening trade on Thursday. It depreciated by 35 paise to 61.60 against the US dollar versus previous day's closing of 61.25 per dollar. Asian markets are weak with the Nikkei down over a percent. US markets on Wednesday dropped sharply for a second session with S&P 500 and Nasdaq seeing their biggest losses in nearly five weeks as fears of tapering grow. European equities too slip. QE tapering fears resurface ahead of the US Federal Reserve's policy meeting next week. Leading economists expect the Fed to kick start its taper plan as the US economy strengthens.