Sensex, Nifty end flat; HDFC falls 1%, Reliance & ITC gain
06 May 2014
It was a tepid day of trading at Dalal Street today as benchmark indices consolidated for second consecutive day but the Nifty ended marginally above 6700. The Nifty was up 15.95 points at 6715.30 while the Sensex was up 63.30 points at 22508.42.
Analysts say the market is seeing a lull just before the poll storm on election results day on May 16 with exit polls on May 13 itself. Market watcher Ajay Bagga expects Budget and monsoon to play a major role over the next few months. He advises investors against taking any big calls at this point in time.
''I would say that the people are lightening their positions and waiting on the sidelines. Taking a big call right now isn't worth it. Of course, given a long-term perspective, being, as you have already mentioned - a six-month or a six-year period, one should definitely buy,'' he said.
European share markets drifted sideways. US economic news and near-record-low global borrowing costs helped soothe jitters about unrest in Ukraine and offset weak results from Barclays and Aberdeen Asset Management. More than 30 pro-Russian separatists were killed in fighting near the east Ukraine rebel stronghold of Slaviansk, Interior Minister Arsen Avakov said on Tuesday, as Russia announced plans to beef up its Black Sea warship fleet.
The simmering unrest lifted safe-haven gold and pushed wheat prices - Ukraine and Russia are both big grain growers - to a 13-month high.
Capital goods, oil & gas and banking stocks lend support to the market while IT stocks dragged again. Reliance, ICICI Bank, L&T, ITC and Tata Motors were top gainers while Bharti Airtel, Tata Power, Wipro and HDFC were among the laggards.
Housing Development Finance Corporation (HDFC) posted a net profit of Rs 1723 crore in the quarter ended March 31, up 11 percent from Rs 1555 crore in the year ago period, which is broadly in-line with estimates. However, its net interest income (NII) was below estimates. In the Q4, NII rose 9 percent to Rs 2073 crore from Rs 1899 crore, year-on-year.
Canara Bank fell 5 percent as brokerages recommended selling it post Q4 earnings. CLSA recommends to sell it for a target of Rs 240 per share. It says that Canara Bank's gross non performing loans (GNPL) was lower due to sale of loans to asset reconstruction companies (ARCs) but fresh slippages remain high.
Shares of Ricoh India hit record-high at Rs 148.95, up over 15 percent intraday. The company has announced a delisting offer at floor price of Rs 58 per share, indicative price of Rs 120 per share.
Atul gained 12 percent while United Bank of India jumped 5 percent. Credit Analysis and Research (CARE) closed up 2 percent rose after the Reserve Bank of India allowed foreign institutional investors to buy up to 74 percent of the ratings provider.
3:40 pm Market closing: The market consolidated but the Nifty ended above 6700. The Nifty was up 15.95 points at 6715.30 while the Sensex was up 63.30 points at 22508.42.
Reliance, ICICI Bank, L&T, ITC and Tata Motors were top gainers while Bharti Airtel, Tata Power, Wipro and HDFC were among the laggards.
3:20 pm International markets: Investor sentiment for US equities has reached an extreme level, though the market is not as manic as it was in the final stages of the dotcom bubble of the late 90s, writes Edward Chancellor of global investment management firm GMO in his quarterly newsletter. Chancellor bases his view on GMO's proprietary sentiment model comprising some 20 traditional sentiment measures like insider selling, leverage, animal spirits, leverage, volatility and momentum among others.
The author of the best seller on financial manias: 'Devil takes the hindmost' says one factor lacking for the development of a full-blown stock market bubble at present is strong credit growth. Private sector credit growth has been lackluster even as quality of credit in general has been deteriorating, points out Chancellor.
3:10 pm Macro outlook: Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed optimism on India's growth rate going beyond the 5 percent mark soon.
"The economy has been growing at a flat rate of 5 percent and hopefully we will see it picking up in the near future," he told PTI on the sidelines of a special talk at Oxford University.
Rajan also reiterated his view on the growth rate being inextricably linked with curbing inflation.
"I have always stressed that stimulating growth and controlling inflation are not opposed to each other. Inflation is what is standing in the way of India's growth," he added.
Rajan was addressing student members of the Oxford Union Society (OUS) on his way to Switzerland, where he has meetings planned with the Bank for International Settlements (BIS) on May 11 and 12.
2:55 pm Market outlook: Long time market watcher Ajay Bagga advises investors against taking any big calls at this point in time. He expects Budget and monsoon to play a major role over the next few months. "India remains an attractive destination for international investors," he told CNBC-TV18.
Bagga expects money flow into India to rise irrespective of poll outcome. He prefers private banks over PSU banks. He is also positive on consumer discretionary and capital goods spaces. He says investor can bet on midcap space if bullish on Indian economy.
2:40 pm Exclusive: Bharti Airtel 's IT deals worth USD 1.5 billion are expected to be closed soon. CNBC-TV18 learns from sources that the likes of Infosys are frontrunners in the race to acquire them.
IBM and Airtel had signed a landmark USD 2 billion outsourcing deal in 2004, which expired in March 2014. Airtel has restructured the deal this time around breaking it into three parts. The restructuring has brought down IBM's share in the USD 2-billion outsourcing deal significantly with just USD 500 million worth of outsourcing contracts from Airtel. The idea is to carve out a smaller portion of the deal for IBM and also get other vendors aboard, based on capabilities and niche specialty in certain technology.
It looks like a day of consolidation as Nifty holds 6700. The Nifty is up 8.75 points at 6708.10 while the Sensex is up 48.45 points at 22493.57. About 1227 shares have advanced, 1357 shares declined, and 126 shares are unchanged.
Reliance, ICICI Bank, ITC, Tata Motors and L&T are gainers while Bharti Airtel, Tata Power, Hero Motocorp, Hindalco and Wipro are laggards.
HDFC posts mixed fourth quarter earnings. Net interest income (NII) of Rs 2,073 crore is below street expectations while profits are in-line at Rs 1,723 crore. Margins improved and asset quality remained stable.
Asian share markets shuffled higher after promising US economic news helped Wall Street to a firmer finish, though activity was again light with Tokyo still on holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 percent. European stocks were also seen inching higher, reversing the previous session's dip.
The market is in green with Nifty trading above 6,700 led by gains in oil & gas and FMCG stocks. The Sensex is up 86.20 points at 22531.32, and the Nifty up 17.65 points at 6717.00. About 1231 shares have advanced, 1192 shares declined, and 123 shares are unchanged
Midcaps gain, outperforming benchmark indices.
ICICI Bank, ITC, Reliance, ONGC and Tata Steel are top gainers in the Sensex. Among the laggards are Bharti Airtel, Hindalco, Wipro, TCS and Bajaj Auto.
The rupee is trading at 60.22/23 after rising as high as 60.05 in opening deals and largely steady from its previous close of 60.21/22, with dollar demand from oil firms hurting the Indian unit.
Traders, however, do not expect the rupee to fall below 60.30 levels as local shares continue to trade stronger, while other Asian currencies also trading higher versus the dollar.
The dollar hovered near a three-week low versus a basket of currencies as US bond yields struggled to pull away from their recent troughs, with moves subdued in holiday-thinned trade.
Traders expect the rupee to hold in a 59.90 to 60.30 range during the session with domestic shares being watched for cues on foreign fund flows.
12:50 pm Interview: NH Bhansali, CEO of the FMCG major Emami Group said the company expects an annualised price hike of 4-5 percent and volume growth of 10 percent in FY15 in an interview to CNBC-TV18.
According to him the company's efforts to save costs helped margin expansion in fourth quarter. Meanwhile, ad spends too could go up in FY15 becuase of new launches, he added. Emami posted an 18.26 percent rise in its consolidated net profit at Rs 111.15 crore for the fourth quarter ended March 31, 2014 on the back of good performance in domestic and international markets. The company had posted a net profit of Rs 93.98 crore in the same period of the previous fiscal.
12:30 pm Buzzing: Shares of Ricoh India hit record-high at Rs 148.95, up over 15 percent intraday. The company has announced a delisting offer at floor price of Rs 58 per share, indicative price of Rs 120 per share.
Promoter and promoter group currently holds 73.60 percent of the equity capital of the company.
"The acquirer intends to make the delisting offer in oder to voluntarily delist the equity shares from the BSE by acquiring 10,497,791 shares held by the public shareholders representing 26.40 percent of the equity capital in accordance with delisting regulations," it said in statement to the BSE.
The Sensex is up 79.12 points at 22524.24, and the Nifty is up 18.40 points at 6717.75. About 1215 shares have advanced, 1052 shares declined, and 110 shares are unchanged.
ITC, ONGC, Reliance, ICICI Bank and Tata Steel are top gainers in the Sensex. Among the losers are Bharti Airtel, Hindalco, Wipro, TCS and Bajaj Auto.
Activity in India's services industry contracted for a tenth straight month in April, pushing firms to put hiring plans on hold for the first time since November, a business survey showed.
The HSBC Services Purchasing Managers' Index, compiled by Markit, rose to 48.5 in April from 47.5 in March, but held stubbornly below the 50-mark that divides growth from contraction.
"While the business activity index improved, it remained below the water line. This points to still subdued service sector activity," said Leif Eskesen, chief economist for India and ASEAN at HSBC.
New business fell at a slower pace in April but the employment sub-index slipped just below the 50-level to 49.8 as firms reacted to falling workloads.
Gold is flat after gaining in the previous two sessions but traded near its highest in three weeks as more intense fighting in Ukraine lifted the metal's safe-haven appeal.
Pro-Russian rebels shot down a Ukrainian helicopter in fierce fighting near the eastern town of Slaviansk on Monday, and Kiev drafted police special forces to the southwestern port city of Odessa to halt a feared westward spread of rebellion.
11:55 am Sahara bail plea: The Supreme Court rejected the bail plea of Subrata Roy, chief of conglomerate Sahara, in connection with a debenture case. Roy was lodged in jail on March 4 after he failed to turn up at a hearing despite summons by the court, which later asked Sahara to issue a refund of Rs 10,000 crore towards investors in order to secure bail for its head honcho but various proposals by the company towards payment of the amount have been rejected.
Two real estate arms of Sahara had raised about Rs 20,000 crore in 2012 via an optionally-fully-convertible debenture issue that was deemed to have flouted regulatory norms and dubbed as illegal by market regulator Sebi.
11:30 am Buzzing: Shares of Piramal Enterprise rallied over 8 percent intraday as despite reporting a loss of Rs 311.3 crore in March quarter. Investors are excited about the stock as it declared a special dividend of Rs 52.50 per share.
Higher finance cost dragged its earnings as it had posted a net loss of Rs 200.41 crore during January-March quarter last fiscal.
Net sales of the company stood at Rs 1,110.38 crore for the last quarter of FY14, as against Rs 926.93 crore during the same period of previous fiscal.
These financing costs include one-time financing charges of Rs 178 crore on account of discounting of receivables for investing in lending operations and in acquiring stakes in Shriram Group entities, the company said.
The market manages to hold steady as the Sensex is up 84.54 points at 22529.66, and the Nifty is up 23.30 points at 6722.65. About 1203 shares have advanced, 855 shares declined, and 110 shares are unchanged.
ITC, ONGC, ICICI Bank, Reliance and BHEL are top gainers in the Sensex. Among the losers are Hindalco, Bajaj Auto, Hero Motocorp, Bharti Airtel and TCS.
United Bank of India up 6 percent on NII growth of 24 percent and a profit of Rs 469 crore. Asset quality is still bad with gross NPA at over 10 percent but has improved 17 percent sequentially.
The rupee opened higher tracking firm Asian units but was quick to erase most of its initial gains as various banks stepped up dollar purchases on behalf of their importer clients. Gilts are lower on profit sales post Monday's sharp rise in prices
US treasury notes snapped their five-day winning streak after better data from the US. From currencies euro trades steady holding on to recent gains. The yen was little changed against the dollar
Gold is at near three-week highs as fighting in Ukraine boosts safe haven bids. Crude prices however came off as expectations of rising oil inventories offset geopolitical tensions
Asian markets eke out slim gains on the back of better US data. Trade is thin as South Korea, Hong Kong and Japanese markets are shut. China's gains are capped on news of China's only listed bad debt management firm seeking to raise USD 500 as it anticipates a rise in bad loans.
10:50am Stocks at all-time high
Stocks like Atul, Deepak Nitrite, Eicher Motors, Gujarat Pipavav, Ricoh India and Vinati Organics were trading at fresh life-high prices today.
10:46am News Flash: Supreme Court rejects Subrata Roy's bail plea
Supreme Court says there is no merit in Sahara's plea for Subrata Roy's bail. The court has also asked Sahara to come up with new proposals to refund investors.
10:40am Midcap Movers & Shakers
Gujarat Pipavav (up 5.74%), Bajaj Electrical (up 5.14%), SKS Microfinanc (up 5.14%), Radico Khaitan (up 4.97%) and Rajesh Exports (up 4.82%) were top gainers in the BSE Midcap index.
On the losing side, Risa International (down 4.5%), Jubilant Life (down 3.34%), Hind Nat Glass (down 2.71%), Tube Investment (down 2.66%) and ABG Shipyard (down 2.24%) were top losers.
10:30am Global market outlook
No mania yet in US equities, but Fed may allow bubble, says GMO
"Given that the credit cycle is not close to a peak, it's quite possible that the Fed will allow a full-blown stock market bubble to form, Yellen's protestations notwithstanding," says Edward Chancellor of GMO in his quarterly newsletter. Read more
10:20am Piramal Enterprises up 6% on special dividend of Rs 52.50 per share
Piramal Enterprises posted a consolidated net loss of Rs 311.35 crore for the fourth quarter ended March 31, 2014, due to higher finance costs.The company's board approved a dividend of Rs 52.50 per equity share. The stock was up close to 6 percent in morning trade on special dividend announcement. Read more
10:10am Canara Bank falls 3% post Q4, brokerages not impressed
Shares of Canara Bank fell 3 percent intraday on Tuesday as its March quarter earnings were disappointing. The state-owned bank's net profit fell 15.8 percent (Y-o-Y) to Rs 610.83 while total income of the bank increased to Rs 11,609.72 crore. Read more
10:00am It was a steady start for the market as the Sensex surged over 100 points in early trade led by gains in ITC, ICICI Bank, ONGC and Reliance Industries.
The Sensex was up 115.70 points or 0.52 percent at 22560.82, and the Nifty was up 31.65 points or 0.47 percent at 6731.00. About 922 shares advanced, 540 shares declined, and 63 shares remain unchanged.
Top gainers in the Nifty were DLF (up 2.70 percent), ICICI Bank (up 1.66 percent), ITC (up 1.52 percent), ONGC (up 1.40 percent) and ACC (up 1.39 percent)
Jindal Steel (down 1.64 percent), Hindalco (down 1.22 percent), Bajaj Auto (down 0.71 percent), Maruti Suzuki (down 0.7 percent) and TCS (down 0.67 percent) were top losers.
10:00 am Macro growth: India's Current Account Deficit (CAD) is likely to be around 2 percent of GDP in the coming few years due to slackening of gold imports, among other factors, Prime Minister's Economic Advisory Council Chairman C Rangarajan said.
"With inflation showing signs of decline and gold prices also not rising, the attraction of gold as an asset is coming down. And as we go ahead we should find the demand for gold falling. There are also other factors contributing to improvement in exports.
"Therefore, I expect the current account deficit to remain around two per cent of the GDP over the years," Rangarajan told reporters. Finance Minister P Chidambaram recently said the CAD was brought down significantly to USD 32 billion in 2013-14 as against USD 88 billion during 2012-13 and fiscal deficit contained within the target in the last fiscal.
9:50 am Shut down: Bharat Petroleum Corp plans to fully shut its 120,000 barrels per day Bina refinery in central India for up to a month in September and October for maintenance, its head of refineries BK Datta said on Monday.
Bina refinery has only one crude oil unit. During the shutdown, the refiner will carry out maintenance at the plant's secondary units as well.
Precise dates for the shutdown have not been decided yet.
The Bina plant is operated by Bharat Oman Refineries Ltd (BORL), majority owned by BPCL. Oman Oil Co owns a small stake in BORL. Separately, BPCL will restart a 90,000 bpd crude unit at its Kochi refinery by the weekend, Datta said.
9:40 am Poll: According to a CNBC-TV18 poll, net profit of HDFC is seen rising 11 percent to Rs 1732 crore from Rs 1555 crore on a yearly basis. During the quarter, its net interest income (NII) is likely to grow 13 percent to Rs 2145 crore from Rs 1899 crore year-on-year.
Analysts feel that its PAT growth is seen to be restricted due to lower NII and lower contribution from dividend and treasury income. According to them, reported growth could be slower due to portfolio sell downs to HDFC Bank - for 9mFY13 portfolio sell downs were negligible and supposed to pick up in Q4. Asset quality is expected to be maintained.
9:30 am Buzzing: Shares of Canara Bank fell 3 percent intraday as its March quarter earnings were disappointing. The state-owned bank's net profit fell 15.8 percent (Y-o-Y) to Rs 610.83 while Total income of the bank increased to Rs 11,609.72 crore
Its gross NPAs were down2.49 percent from 2.57 percent on a yearly basis.
The market has opened on a higher note. The Sensex is up 101.01 points at 22546.13, and the Nifty is up 19.90 points at 6719.25.
About 311 shares have advanced, 87 shares declined, and 22 shares are unchanged.
Metal stocks are rallying for second consecutive day with Tata Steel leading the pack. HUL, L&T, ICICI Bank and HDFC are other gainers in the Sensex. Among the losers are Sesa Sterlite, Wipro and Infosys.
The Indian rupee gained in the early trade on Tuesday. The rupee opened higher by 17 paise at 60.05 per dollar against 60.22 Monday.
The dollar was subdued in Asia, holding largely around where it began this week after an aimless session overnight with holidays in Japan and Britain crimping activity in markets.
Ashutosh Raina of HDFC Bank said that, "Risk off sentiment resulted in US yields coming off sharply and all asset classes taking a pause. The Indian markets have been no exception, with all markets in a consolidation phase."
"The dollar-rupee pair has also been moving in a tight 60-60.50/dollar range. Expect the pair to continue trading in this narrow range as we approach the election results," he added.
On the global front, US stocks advanced with the Dow industrials coming back from a triple-digit deficit, as an upbeat read of the US services sector countered concern about conflict in Ukraine and growth in China.
In commodities, crude oil slipped, pressured by reports that China's manufacturing sector contracted and Libya's oil output was recovering.
From precious metals space, gold neared its highest level in three-weeks, extending the previous session's gains, as simmering tensions in Ukraine and a broke above a key chart level fueled buying.