Sensex cracks 518 points, Nifty ends below 7650; BHEL falls 8%
08 Jul 2014
4:00 pm Banks UK expansion
Two banks from India - Axis Bank and Union Bank - are among the five new entities authorized to do banking business in the UK during the last fiscal, as per latest statistics released by the British regulators.
In the 12-month period, following the changes introduced by the UK regulators to reduce barriers for entry of new financial institutions, five new banks have been authorized out of which two are Indian.
The five banks authorised between April 1, 2013 and March 31, 2014 are Axis Bank UK Ltd, Union Bank of India (UK) Ltd, FCMB (UK) Ltd, UBA Capital (Europe) Ltd and Paragon Bank plc. Other Indian banks present in the UK include ICICI Bank, SBI, Bank of Baroda, Canara Bank, Syndicate Bank and Bank of India, among others.
As many as 30 new banks could open in the United Kingdom following changes introduced by the UK regulators to reduce barriers for entry of new financial institutions.
03:50 pm FII view
Investment guru Marc Faber is gung-ho on Indian equities and prefers betting his chips on India rather than the US. Faber, the author of Gloom Boom & Doom Report, said he doesn't see the latter giving good returns in the next five-10 years horizon. The key near-term trigger for the Indian market is pro-reform Modi government's maiden Union Budget on July 10. Investors are closely watching the event and with the countdown in its last leg, Faber expects the Indian government to look at simplifying tax code.
Also, to boost the subdued investment climate, team Modi will have to fix a slew of issues, he added. Faber cautioned that Indian market's move from heron will be largely dependent on global data and the second half of the year could be difficult for Indian equities, which have been witnessing a massive hope rally for quite sometime now.
03:40 pm Air India earnings
State-owned Air India has shown improvement both in terms of operational as well as financial parameters in 2013-14 over the previous fiscal, the government said in Parliament today.
"Passenger revenue has increased from Rs 12,494.44 crore in 2012-13 to Rs 14,300 crore in 2013-14, i.e by 14.45 percent," Civil Aviation Minister Ashok Gajapati Raju Pusapati said in the Rajya Sabha.
The net loss of the carrier marginally decreased to Rs 5,388.82 crore in 2013-14 as against Rs 5,490.16 crore in the previous fiscal.
The minister also informed that passenger load factor of Air India improved from 72.4 percent in 2012-13 to 73.6 percent in 2013-14. The passengers travelled on total network also increased to 15.3 million, up 8.5 percent in the last fiscal.
03:35 pm Market closing
It is one of the worst falls in last 10 months as the market succumbed to profit booking pressure. Deeper cut was seen after the Rail Budget was presented which did not match expectations as it lacked clarity on projects and proposals.
The Sensex was down 517.97 points or 1.98 percent at 25582.11 and the Nifty ended at 7623.20, down 163.95 points or 2.11 percent. About 770 shares advanced, 2230 shares declined and 98 shares were unchanged.
BHEL was the worst hit, losing 8 percent. NTPC, Tata Power and Coal India fell 5 percent each. L&T was down 4 percent. Only Sun Pharma and HDFC were gainers in the Sensex.
03:22 pm Losers
BHEL slumps 9 percent while Coal India slips 6 percent, followed by NTPC, Tata Power and ONGC.Sun Pharma, ITC and HDFC are lead gainers in the Sensex.
03:18pm Market check
The market drags further on heavy profit booking. The Sensex is down 569.90 points or 2.18 percent at 25530.18 and the Nifty is down 176.00 points or 2.26 percent at 7611.15. About 769 shares have advanced, 2220 shares declined, and 94 shares are unchanged.
03:10pm Expert reaction
Umesh Chaudhary, VC, Titagarh Wagons gives thumbs up to Gowda's proposal of restructuring the Railway Board. He, however, believes the operating ratio of 94 percent is alarming. Sachin Bhanushali, President, Gateway Rail Freight also believes that the railway restructuring is a bold move by the minister as the board has remain unchanged for a very long period of time.
Gowda plans to upgrade the passenger service through the PPP route. He also proposed foreign direct investment (FDI) in Railways and sought Cabinet approval in the sector, except rail operations.
03:00pm FII View
Rakesh Arora, Macquarie says the optimism surrounding the new government is fast translating into good business all around. ''At the index level, we expect revenue growth for Sensex of 14.2 percent and Nifty of 14.5 percent and PAT growth of 15.5 percent and 14.9 percent, respectively, led by margin expansion of 150 basis points and 110 bps, respectively,'' he adds.
02:50pm Aban Offshore on buyers' radar
Shares of Aban Offshore surge as much as 9.8 percent to Rs 940, their highest level since May 14, 2010, on hopes the country's largest offshore drilling company may enjoy higher rig rates in the coming quarters, dealers say.
"ONGC has okayed an expenditure sanction of an additional USD 501.95 million (equivalent to Rs 3,085.54 crore) for hiring of five more offshore jack-up rigs for a period of three years," according to oil and gas industry website Indianpetro.com.
The effective rig rate based on the Indianpetro news article works out to approximately USD 91,680 per day, Reuters calculation shows.
Aban lists Oil and Natural Gas Corporation and its unit ONGC Videsh among its marquee clients, a presentation by the company in May 2014 on its website shows. The stock gained 3.7 percent now.
02:47pm Brent crude fell below USD 110 a barrel on easing geopolitical tension.
02:45pm Shrenuj and Company gains 3.5%
The RBI has relaxed norms governing import of rough, cut and polished diamonds by doubling the credit time period to 180 days.
"...it has been decided, in consultation with the government, that the clean credit i.e. credit given by a foreign supplier to its Indian customer/ buyer, without any Letter of Credit (Suppliers' Credit)/Letter of Undertaking (Buyers' Credit)/Fixed Deposits from any Indian financial institution for import of rough, cut and polished diamonds, may be permitted for a period not exceeding 180 days from the date of shipment," RBI said in a notification.
In an interview to CNBC-TV18, Pranav Bhargava, EVP of the company said that it is a step in the right direction. He informed that the move will have nearly 30-40 basis points positive impact on the company's bottomline. He believes export revenue could rise by 10-12 percent on the back of the RBI move.
02:40pm Market extends losses
The Sensex dropped 376.48 points or 1.44 percent to 25723.60 and the Nifty fell 120.80 points or 1.55 percent to 7666.35. About 775 shares have advanced, 2157 shares declined, and 90 shares are unchanged.
L&T, SBI, Reliance Industries, ONGC, ICICI Bank, TCS and Tata Motors slipped 1.5-4 percent while BHEL, NTPC, Coal India and Tata Power cracked 4.5-7 percent.
However, housing finance company HDFC and drug maker Sun Pharma outperformed, rising over a percent.
02:35pm Railways to borrow Rs 11,790 cr in 2014-15
Indian Railways will borrow less at Rs 11,790 crore from market through its two companies IRFC and Rail Vikas Nigam Ltd for capital expenditure during 2014-15.
The estimated market borrowing by these two companies during current fiscal were pegged at Rs 13,800 crore from markets, as per the interim Railway Budget for 2014-15 tabled in February. Thus, there has been downward revision in the market borrowing plan by Rs 2,010 crore for the current fiscal.
"As I have increased internal resource component of plan, I propose to scale down market borrowings... to Rs 11,790 crore," Railways Minister D V Sadananda Gowda said in his
proposals while presenting the Rail Budget today. Resources from PPP are kept at the interim (budget) level, he said.
Indian Railways Finance Corporation (IRFC) will raise Rs 11,500 crore in 2014-15 for investment in rolling stock and projects, the Railway Budget document tabled in Parliament said. Besides, the other financial firm under Indian Railway, Rail Vikas Nigam (RVNL), plans to raise Rs 290 crore through market borrowing, reports PTI.
02:30pm Expert on Railway Budget
Jaijit Bhattacharya, PhD, Partner, Infrastructure and Government Services, KPMG in India said, "The budget appears to be very well thought out and having something for all its stakeholders without being populist. It provides the much needed strategic financial headroom required for the railways to enable it to make the necessary critical investments into modernisation and expansion. The much needed support for PPP as a significant source of investment capital is the backbone of providing the strategic financial headspace."
"The focus on safety and security is much appreciated. Increase in RPF constables is a much needed step to improve the security in trains. In addition, using modern technology to enhance safety and security, as well as improve management by deciding to adopt an ERP, is welcome," he adds.
02:25pm CMC hits record high post Rail Budget
Shares of CMC, which provides passenger reservation system, touched record high at Rs 2,114, up 7.66 percent after Railway Minister Sadananda Gowda, in its first Rail Budget, said reservation system will be revamped. But the stock lost some gains later on due to profit booking, rising over a percent.
"We will expand scope of online booking. e-Ticketing through mobile phones will be popularised," he adds.
CMC says Indian Railways still uses CMC built Integrated multi-train passenger reservation System (IMPRESS) which was rolled out in 1985 onwards in stages till early 2000.
Gowda further says railway ministry will be working on making railways office paperless in five years.
02:20pm Railway Budget Speech
Railway Minister Sadananda Gowda promised lifts, escalators, foot over bridge (FOB) and battery-operated chairs for differently-abled people at all major stations in his maiden Budget on Tuesday . The minister also announced the first Bullet Train for the Mumbai-Ahmedabad route.
Extending the passenger-friendly services and calling for a revamp in the Railway reservation system, he proposed online booking facilities which will give commuters the choice to not only book the train but the coach, berth and seats as well. He also called for to popularize e-Ticketing through mobile phones and offering Wi-fi services in 'A1 stations'.
The minister plans to upgrade the passenger services through the PPP route. He even proposed foreign direct investment (FDI) in the Railways, except operations, and sought Cabinet approval for the same.
''I seek Cabinet approval for foreign direct investment in Railways except in railway operations. The government will also look to fund future projects, including high-speed trains, via the public-private-partnership mode. We also need to leverage railway PSU resources. We will also look for ways to monetize Railways land,'' he said.
02:10pm Railway stocks at day's low: Texmaco Rail crashed 18 percent; Kalindee Rail, Stone India, Kernex Microsystems, BEML and Titagarh Wagons plunged 5 percent each.
02:05pm Market Expert: Prabhudas Lilladher's Head - Institutional Equities R Sreesankar believes the momentum and business confidence is back in the market. He expects small and midcaps to perform better from current levels.
02:00pm Equity benchmarks plunged more than 1 percent in afternoon trade on profit booking and post Railway Budget. The Sensex lost 303.87 points to 25796.21 and the Nifty fell 102.65 points to 7684.50 weighed down by oil & gas, capital goods, metals and banks stocks.
About 883 shares have advanced, 1997 shares declined, and 91 shares are unchanged.
BHEL, Sesa Sterlite, NTPC, Coal India, SBI, Power Grid Corporation, DLF and NMDC topped the selling list, falling 3-5 percent.
However, Sun Pharma, HDFC and Kotak Mahindra Bank bucked the trend, rising more than a percent followed by Infosys, Cipla, ITC and Asian Paints with 0.3-0.7 percent.
1:55 pm Reaction CMC says railways' contribution to company's revenue not very large but no other IT co provides railway reservation. It has a long history of association with Indian Railways.
1:47 pm Budget highlights: Govt proposes 54 percent higher funds for 23 ongoing Govt proposes 54 percent higher funds for 23 ongoing projects in the Northeast with an outlay of Rs 5,116 crore. Govt proposes highest ever plan outlay of Rs 65,455 Govt proposes highest ever plan outlay of Rs 65,455 crore for 2014-15.
1:45 pm Cipla's woes: Hailing the British government's efforts in encouraging research and development in the pharmaceutical industry, Cipla chairman Yusuf Hamied has said the "step-motherly" treatment given to this sector in India has to stop.
In the wake of company's announcement in India of plans to invest 100 million pounds in its British subsidiary alongside the UK government, Hamied appealed to the Indian government to also do more in the field.
"This is something we Indians can take a lesson from the British as to how the British government here is encouraging us to come and do research with the benefits that they are giving us. By and large the step-motherly treatment that we have got over the years has to stop and we have to be encouraged to do more," he said.
1:40 pm PM Modi on Rail Budget
1:35 pm Modi on Rail Budget: PM Modi praises Rail Budget. Addressing the nation, he says initiatives taken will help Indian economy in a big way. "Rail budget is a growth engine. This budget will prove that. We neglected it in the past". Aimed at overall development of India. It is a modern budget. Focussed on science and technology," he adds.
1:30 pm Brickbats for Rail Budget: Rahul Gandhi criticises the budget. Says it is not pro-poor. Former Railways minister PK Bansal criticises Rail Budget. Says budget focussed more on minor issues.Former minister Ashwini Kumar says budgets talks only about the ills, offers no concrete solutions. The Congress criticises Rail Budget. Says it is a bankrupt budget.
1:25 pm Medical launch: Glenmark Pharmaceuticals will launch generic version of anti-hypertension drug telmisartan tablets in the US market following receipt of approval from the country's health regulator.
Glenmark Generics, USA a subsidiary of Glenmark Generics Ltd has been granted final abbreviated new drug approval (ANDA) from the United States Food and Drug Administration (US FDA) for Telmisartan Tablets, the company said in a filing to the BSE.
"Glenmark will commence distribution of the product immediately," it added. The approval is for the 20 mg, 40 mg and 80 mg tablets. Telmisartan tablets are Glenmark's generic version of Boehringer Ingelheim's Micardis. Telmisartan is indicated for the treatment of hypertension.
1:20 pm Buzzing: Shares of Aban Offshore surge as much as 9.8 percent to Rs 940, their highest level since May 14, 2010, on hopes the country's largest offshore drilling company may enjoy higher rig rates in the coming quarters, dealers say.
"ONGC has okayed an expenditure sanction of an additional $501.95 million (equivalent to 3,085.54 crore rupees) for hiring of five more offshore jack-up rigs for a period of three years," according to oil and gas industry website Indianpetro.com.
The effective rig rate based on the Indianpetro news article works out to approximately $91,680 per day, Reuters calculation shows.
1:10 pm Market outlook: There is a huge pent up demand for Indian equities among global investors, feels Dipen Seth of HDFC Securities, adding that this will be a golden decade for India.
In an interview to CNBC-TV18, Seth says the market will continue to climb post-Budget, with PSU reforms being the key theme. He says PSU banks still offer great value, but reforming them will be a challenge because of the huge non-performing assets. Among private sector banks, Seth is bullish on Axis Bank , IndusInd Bank and ICICI Bank . He says he will buy ONGC with a long term view, and is also bullish on stocks like Cholamandalam Finance and Federal Bank .
Slide in market continues as Railway Minister Sadananda Gowda presents Budget. The Sensex is down 152.01 points at 25948.07 and the Nifty is down 54.70 points at 7732.45. About 967 shares have advanced, 1813 shares declined, and 93 shares are unchanged.
Brent crude slipped below USD 110 a barrel, trading close to its lowest in nearly a month, as fears of supply disruption in Iraq eased and prospects for a rise in Libyan exports improved.
The benchmark is headed for a seventh straight session of losses, the longest-losing streak since October 2012. Brent has fallen 5 percent since the Iraq crisis drove prices to a nine-month high of USD 115.71 in June.
August Brent crude was at USD 109.98 a barrel by 0500 GMT, down 26 cents. US crude futures for August edged down 8 cents to USD 103.45, after settling down for a seventh session on Monday, the longest decline since December 2009.
01:00pm Railways will use bio diesel for up to 5 percent of total diesel needs, says Railway Minister Gowda. "Rs 5,116 crore is earmarked for projects in northeast in FY15. e-Procurement will be made compulsory," he adds.
12:59pm Railway Minister Gowda says status of ongoing projects will be available online.
12:58pm Railway Ministry proposes to give boost to rail movement of fruits, vegetables. It also proposes to set up project formulation & management group. "We will expand scope of online booking," he adds.
12:57pm Railway Ministry proposes to majorly improve earnings from parcel segment.
12:56pm Railways will increase speed of some trains to 160-200 km per hour, Gowda says in its first Railway Budget.
12:55pm Gowda says Railway Ministry will ensure connectivity in 3 critical coal evacuation lines.
12:54pm Stock impact: CMC surged 5 percent, Kalindee Rail falls 4 percent, Siemens slips 1.4 percent.
12:53pm Ministry will speed up coal connectivity in areas like Jharsuguda
12:52pm Railway ministry will have digital reservation charts at stations. "We will talk to industry to attract investment under PPP and BOT modes. We will facilitate connectivity to new ports via private partnership," Gowda says.
12:51pm Stock impact: Texmaco Rail falls 8.5 percent, Titagarh Wagons slips 5 percent, BEML loses 4 percent, Container Corporation declines 1 percent.
12:50pm Railway Ministry will offer Wi-fi services in all 'A' category trains
12:49pm Railway ministry will allot Rs 1,780 crore to eliminate unmanned level crossings.
12:48pm Railway Minister says the ministry is working on making railways office paperless in 5 years.
12:47pm "We will have diamond quadrilateral network for high-speed trains. We allocated Rs 100 crore for high-speed rail network," Gowda says.
12:46pm Market Update: TheSensex is down 64.51 points at 26035.57 and the Nifty down 28.65 points at 7758.50.
12:45pm Hesays first bullet train will be launched in Mumbai-Ahmedabad
12:44pm Railway Minister is contemplating setting up Railway University.
12:43pm Railway Minister proposed for restructuring of Railway board. "We will take eco-tourism to northeastern states. e-Ticketing through mobile phones will be popularised," he adds.
12:41pm Railway Minister says 4,000 women RPF constables will be recruited. Estimate over Rs 40,000 crore is needed for track renewals. "We will introduce system of speedy clearances for new rail tracks," he adds.
12:40pm Railways will encourage corporate houses to adopt stations. It will introduce pre-cooked ready-to-eat meals by reputed brands. It proposes to set up food courts at major stations. Reservation system will be revamped, Gowda says.
12:37pm Gowda says budget allocation for cleanliness increased by 40 percent. There will be CCTVs at major stations to monitor cleanliness. "Railways will expand scope of online booking," he adds.
A2Z Maintenance is in focus
12:35pm Railways will place foot-overs, lifts, escalators at major stations via PPP route. He sees FY15 pension provision at Rs 28,850 crore. Rs 1.82 lakh crore is needed to complete 359 projects.
12:33pm Railways will scale down FY15 IRFC market borrowings to Rs 11,790 crore. FY15 freight earnings is pegged at Rs 1.06 lakh crore, he says.
12:31pm "We propose to hike budgetary plan outlay to Rs 47,650 crore. FY15 passenger fare revenue pegged at Rs 44,600 crore," he says.
12:29pm Gowda expects freight traffic growth of 4.9% in FY15. Escorts, Siemens India, ABB India, Kalindee Rail, Container Corp, Texmaco Rail, Kernex are in focus
12:27pm Railway Minister Sadananda Gowda expects FY15 total receipts at Rs 1.64 lakh crore
12:26pm Railways will privatise and set timeline for ongoing projects. Siemens India, L&T, Alstom T&D are in focus
12:25pm Railways will fund future projects, including high speed trains via PPP mode
12:23pm Railways need cabinet approval for FDI in rail except rail operations. "We will encourage wagon-leasing market," he says
12:21pm Recent fare revision will bring only Rs 8,000 crore. "We need to leverage railway PSU resources," he says. Last month, he announced a 14 percent hike in passenger fares across the country.
12:20pm Railways sanctioned 676 projects while completed 317 projects.
12:17pm Gowda says Indian Railways needs Rs 1.82 lakh crore to complete 359 projects. "Railways suffered from sanctioning of projects versus completion. Tariff policy lacked rational approach so far," he adds.
12:15pm Railways is generating a meagre surplus for capex every year. Hence, it needs Rs 50,000 crore every year for 10 years, Gowda says.
12:14pm Railway's total gross receipts for the financial year 2013-14 was at Rs 1.39 lakh crore and operating ratio at 94 percent.
12:13pm Railway minister says Indian Railways is the driver of Indian economy and is backbone of defence systems supply chain
12:12pm Railway targets to become largest freight carrier in the world
12:11pm Railway Minister says he flooded with requests for new trains and railway lines
12:10pm L&T bags Rs 5,000 crore EPC contract from Kuwait Oil Corporation.
12:09pm The rupee gains 23 paise to 59.78 a dollar after falling 27 paise in previous session.
12:07pm Railway Minister Sadananda Gowda starts presenting Railway Budget
12:05pm Railway Minister Sadananda Gowda will present NDA government's first Railway Budget in parliament soon.
12:00pm Equity benchmarks remained volatile with negative bias on Railway Budget day. The Sensex fell 32.34 points to 26067.74 and the Nifty declined 19.35 points to 7767.80.
About 1045 shares have advanced, 1613 shares declined, and 95 shares are unchanged.
Transformers & Rectifiers, Container Corporation of India, Hind Rectifiers and Kalindee Rail rallied 3-4 percent on the day when Railway Minister Sadananda Gowda announced Rail Budget. However, Texmaco Rail and ARSS Infra fell 3 percent each.
11:57 am "By a conservative estimate, the railways need Rs 20,00,000 lakh crore of investment by 2020, according to economist Tirthankar Patnaik at Religare Capital Markets. That's far in excess of the Rs 1,44,000 lakh crore the sector is estimated to earn this year even after an unpopular fare-hike pushed through last month.
11:55 am Buzzing: Shares of Container Corporation of India (CONCOR) touched a record high of Rs 1,399.80, up 3.8 percent ahead of Railway Budget. Citi also initiated buy rating on the stock with a target price of Rs 1,600, citing major gainer from domestic recovery and new government's initiatives.
CONCOR provides efficient and reliable multi-modal logistics support for the country's exim and domestic trade and commerce.
"We initiate at buy on CONCOR, India's dominant operator of container trains (79 percent market share), as a major beneficiary of a revival in domestic capex and industrial activity, completion of dedicated freight corridor (DFC) by CY17E, which will trigger a step-jump in asset turns, volumes and margins, introduction of goods and services tax (GST) over next 2-3 years, which will boost domestic logistics, and a bounce-back in India's trade," says Citi in its report.
11:45 am Expert opinion on market: Nobel Prize-winning economist Joseph Stiglitz said he is "very uncomfortable" with current stock market levels, arguing they do not equal a strong economic recovery in the United States.
The Dow breached 17,000 points on Thursday before the US markets closed for the long July Fourth weekend. The jump came after the US government reported the economy created a better-than-expected 288,000 jobs in June and the unemployment rate fell to 6.1 percent.
"The reason the stock market is high, in part, is that interest rates are low, wages are low and the emerging markets are still growing much faster than the US economy, let alone Europe," Stiglitz said. He pointed to the fact that many US-listed multinationals are increasingly getting a large chunk of their profits from emerging markets.
11:35 am Tax cut hopes: Nishith Desai Founder Nishith Desai Associates expects Restrospective tax ammendments to be removed and says Direct Taxes Code must be withdrawn. He does not expect relief on Minimum Alternate Tax (MAT).
"First of all the entire exercise of the Budget must move to accrual based system from receipt base. Currently the Budget is misrepresenting the true financial state of the nations affairs because number of hidden liabilities are not reflected in the Budget. For example about USD 50-70 million worth tax liability which may arise as a result of the tax disputes which are mostly settled in favour of tax payer," he said.
11:25 am Finance Minister says in the Parliament:
- States' fiscal deficit better than centre's
- Fiscal deficit must be maintained at acceptable level
- Government understands need for fiscal prudence
- Need to continue some tax breaks
- Government will intensify action to collect tax arrears
- Revenue foregone not considered in calculating fiscal deficit
11:20 am Buzzing: Shares of ICRA rose 2 percent intraday as it reported a good set of April-June quarter earnings. The rating agency's first quarter FY14 net profit jumped 28 percent to Rs 19.40 crore year-on-year. Spurt in other income on the back of maturing of investments boosted the quarter earnings.
Other income was up 33 percent in the first quarter ended June 30, driven primarily by the maturing of investments in fixed maturity plans, ICRA said in a statement. The New Delhi-headquartered company's total income was up 19 percent during the reporting period at Rs 49.10 crore as against Rs 41.41 crore in the same period year ago.
Operating income rose 14 percent at Rs 36.71 crore as against Rs 32.11 crore in the corresponding period. On a consolidated basis, the group's profit after tax was up 32 percent to Rs 21.80 crore in the April-June period from Rs 16.57 crore a year ago.
11:15 am Rail Budget hopes: In an interview to CNBC-TV18, SK Nevatia, CMD, Hind Rectifiers, said he expecting a good industry-friendly Budget this time. Moreover, he sees strong ordering on wagons and engines in the Rail Budget.
He thinks the full benefits of the Rail Budget will only be seen in FY16 and feels the Railways will contribute around 60 percent to the anticipated turnover in FY15.
Vivek Sahai, Former Chairman of the Railway Board, feels more public-private-partnership should be encouraged in the sector, which should also focus on construction.
He expects Konkan Railways to make profits after years of losses.
11:10 pm Oil price: Oil prices eased in Asia today as dealers await the resumption of disrupted Libyan crude exports, while ebbing fears about fighting in major producer Iraq also weighed, analysts said.
US benchmark West Texas Intermediate for August delivery dipped 11 cents to USD 103.42 while Brent crude was down 19 cents at USD 110.05.
Singapore's United Overseas Bank said prices remained under pressure as "fears of supply disruptions out of Libya and Iraq abated".
Oil prices have tracked lower since Wednesday when Libya's interim Prime Minister Abdullah al-Thani said authorities had regained control of two export terminals blockaded by rebels.
The market is slipping ahead of NDA government's maiden Railway Budget. Expectations are running high as Prime Minister Narendra Modi has always emphasised on improving and modernising the ailing sector.
The Sensex is down 62.50 points at 26037.58 and the Nifty is down 25.05 points at 7762.10. About 941 shares have advanced, 1482 shares declined, and 93 shares are unchanged.
Sun Pharma, HDFC, Cipla, GAIL and HUL are top gainers in the Sensex. Among the losers are Sesa Sterlite, Reliance, Coal India, M&M and Wipro.
Meanwhile, rail stocks are weak falling prey to profit booking. Stocks like Titagarh Wagons , Kernex Micro and Texmaco are down around 5 percent intraday. Interestingly, most of these stocks touched 52-week highs before falling prey to profit booking.
11:02am National Fertilizers gained 1 percent after media report indicated that the company is likely to get Deepak Fertilizers' share of gas from government.
11:00am Tushar Mahajan, Nomura Financial Advisory says there is low room for disappointment in the Budget. Any disappointment in Budget could see Nifty move to 7500, he adds.
According to him, selling options could be a good strategy. He says the brokerage is looking to go long in banking & energy sectors.
He says the brokerage will buy L&T if it corrects to Rs 1,650/share.
10:55am Dr Reddy's Annual Report
Dr Reddy's Laboratories, in its FY14 Annual Report says proprietary drugs in R&D have USD 30-300 million market potential and more than 15 proprietary products are under development.
The drug maker expects first proprietary product ANDA within 2 years. It aims to launch difficult-to-make generic products in few years.
Dr Reddy's Labs sees FY15 as better year for achieving growth. "62 ANDAs with 9 first-to- file are pending with USFDA for approval," it adds. According to the report, bulk drug sales of the company fell 22 percent in FY14 on low demand.
10:50am Barclays has reiterated overweight rating on Maruti with an increased target price of Rs 3059 per share, indicating an upside of 39 percent. The brokerage is bullish on the stock hoping for higher volumes and improved profitability. Hence, it has raised earnings estimates by 5 percent for FY15 and 14 percent for FY16 stating 'limited risk to Maruti's market share in near term'.
Barclays believes that stock is an excellent proxy for India's economic recovery. It estimates that Maruti is well positioned to benefit from improved customer sentiment (as GDP growth recovers), product launches and wide distribution network.
10:45am JP Associates says in respect of issue of equity shares of QIBs through a qualified institutions placement, the finance committee of the board of directors of the company has, on July 07, 2014, decided to close the bid period, and approved the issue size at USD 250 million (i.e. approximately Rs 1,500 crore) at a price of Rs 70.27 per share.
10:40am In an interview to CNBC-TV18, Vivek Sahai, former chairman of the Railway board says public-private-partnership should be encouraged in rail. "Public-private-partnerships should focus on construction in Rail," he adds.
He expects Konkan Railways to make profits after years of losses.
10:35am Hind Rectifiers gains 2%
Hind Rectifiers, which makes railway transportation equipments, expects a good Railway Budget this time. According to him, the government will release proposals that benefit entire rail sector.
The company expects turnover of Rs 140 crore in FY15. "Railways will contribute 60 percent to anticipated turnover in FY15. We are likely to see full benefits of Rail Budget only in FY16," says the company.
10:30am ICRA Q1 earnings
Rating agency ICRA delivered a good and steady performance in Q1FY15 as its revenues increased by 17 percent to Rs 68 crore and profit after tax grew by 32 percent to 21.8 crore year-on-year. Growth was mainly led by debt and bank loan ratings.
10:25am Container Corporation on buyers' radar
Container Corporation of India gained more than 2 percent as Citi initiates coverage with a buy rating on the stock and a target price of Rs 1600.
The brokerage believes company is a major gainer from domestic recovery and new government's initiatives and their market dominance set to widen further.
10:20am Modi Government's First Railway Budget
High-speed trains, world-class stations and safe journeys are likely to be the government's top priorities in first Railway Budget by Narendra Modi government.
The high-profile Golden Quadri-lateral Rail Network-linking the four metro cities-might be important highlights of the budget. Running semi-high-speed trains on select routes is likely to be an item of immediate implementation.
Even before he presented his maiden budget, Railway Minister Sadanand Gowda made waves with a 14 percent hike in passenger fares across the country. However, the government has passed the buck on its predecessor UPA government for the rail price hike.
10:15am Interview
The Reserve Bank of India (RBI) easing lending norms for diamond imports is a step in the right direction, says Pranav Bhargava Exec VP, Shrenuj & Co.
The RBI relaxed norms governing import of rough, cut and polished diamonds by doubling the credit time period to 180 days. Earlier, the timeframe was of 90 days. The RBI said the revised directions will come into force with immediate effect.
Bhargava says the move will have nearly 30-40 bps positive impact on the company's bottomline. He believes export revenue could rise by 10-12 percent on the back of the RBI move.
10:10am Railway Budget important to watch out for
According to market expert, Anand Tandon if anything dramatic can be done by the government then it would be the Railway Budget. They may convert it from a deparment of government into a corporation, which in turn would cut down the support it needs from the Budget, he adds.
Most of the railway stocks have already rallied but he is still bullish on Container Corporation and Gateway Distripark. One can also look at BEML and Escorts, he adds.
From the market point of view playing for the Budget on July 10 would be too big a risk, instead one needs to look forward to earnings and its impact on the market.
10:05am FII View
Rakesh Arora, Macquarie says the optimism surrounding the new government is fast translating into good business all around. ''At the index level, we expect revenue growth for Sensex of 14.2 percent and Nifty of 14.5 percent and PAT growth of 15.5 percent and 14.9 percent, respectively, led by margin expansion of 150 basis points and 110 bps, respectively,'' he adds.
10:00am Equity benchmarks witnessed some profit booking after hitting record highs in early trade. The Sensex fell 65.69 points to 26034.39 and the Nifty lost 27.50 points to 7759.65. Railway stocks are also on sellers' radar with the Texmaco Rail, Kernex Microsystems and Titagarh Wagons losing 3-5 percent ahead of Railway Budget.
The broader markets declined too with the BSE Midcap and Smallcap indices falling 0.5 percent and 0.7 percent, respectively. About 773 shares have advanced, 1267 shares declined, and 56 shares are unchanged.
Shares of Sesa Sterlite, M&M, Coal India, Wipro, ICICI Bank, Power Grid Corporation, UltraTech Cement, Tech Mahindra and DLF lost 1-2.5 percent while Sun Pharma, HDFC, Cipla, Gail, Infosys, Kotak Mahindra Bank and IndusInd Bank bucked the trend, rising 0.7-2.5 percent.
L&T, ICICI Bank, MCX India, Reliance Capital, IRB Infrastructure, Infosys, Aurobindo Pharma, ONGC, ITC and Reliance Industries are most active shares on exchanges.
10:00 am Market falls: Profit booking seeps in as the Sensex is down 72.18 points at 26027.90. The Nifty is down 27.90 points at 7759.25. About 768 shares have advanced, 1263 shares declined, and 52 shares are unchanged.
Sun Pharma, Cipla, HDFC, GAIL and HUL are top gainers in the Sensex.
9:50 am View on international markets: Jason Todd, CIMB says Asia is pro-cyclical and remains a value asset vis-a-vis world equities. ''Corporate leverage is not high and at 12x forward earnings, there is a reasonable cushion for bond yields to move higher,'' he adds.
He further says the brokerage favours markets which will benefit from improving growth and offer good value like China & Korea. ''We like the structural story behind India, the Philippines and Vietnam,'' he adds.
9:45 am Brokerage view: Barclays has reiterated overweight rating on Maruti with an increased target price of Rs 3059 per share, indicating an upside of 39 percent. The brokerage is bullish on the stock hoping for higher volumes and improved profitability. Hence it has raised earnings estimates by 5 percent for FY15 and 14 percent for FY16 as it sees limited risk to Maruti's market share in near term.
Barclays believes that stock is an excellent proxy for India's economic recovery. It further estimates that Maruti is well positioned to be benefit from customer sentiment (as GDP growth recovers), product launches and wide distribution network.
9:40 am FII view: Rakesh Arora, Macquarie says the optimism surrounding the new government is fast translating into good business all around. ''At the index level, we expect revenue growth for Sensex of 14.2 percent and Nifty of 14.5 percent and PAT growth of 15.5 percent and 14.9 percent, respectively, led by margin expansion of 150 basis points and 110 bps, respectively,'' he adds.
He says the brokerage recommended stocks on the back of expected results - Long: Maruti Suzuki, Dr Reddy's Labs, GPPV, IRB Infrastructure, YES Bank and short: SAIL, Bajaj Auto, Hindustan Zinc, Cairn India and Union Bank of India.
9:35 am Stocks fall: After rallying for over a month, some rail stocks are just losing breathe on the day Sadanand Gowda will present the government's maiden Rail Budget. Stocks like Titagarh Wagons, Kernex Micro and Texmaco are down around 5 percent intraday. Interestingly, most of these stocks touched 52-week highs before falling prey to profit booking.
However, Hind Rectifier and Kalindee Rail are still on buyers' radar.
High-speed trains, world-class stations and safe journeys are likely to be the government's top priorities. The high-profile Golden Quadri-lateral Rail Network-linking the four metro cities-might be important highlights of the Budget. Running semi-high-speed trains on select routes might be an item of immediate implementation.
9:25 am Rail Budget: The new government led by Narendra Modi is all set present its first Rail Budget today. A hike in the FDI limit for railways, greater private sector participation and investments for an upgrade of the existing infrastructure are some of the key areas likely to be in focus.
On July 10, the government may shy away from repealing the controversial retrospective tax law-but the Finance Minister may signal the end of the era of retrospective changes and will promise a stable, non-adverserial tax regime in his Budget speech
The market opens in green on Rail Budget day. The Nifty hits 7800-mark, up 25.30 points at 7804.05 and the Sensex is up 77.64 points at 26177.72. About 565 shares have advanced, 140 shares declined, and 30 shares are unchanged.
Sun Pharma, NTPC, ONGC, M&M and Tata Power are top gainers while ITC, Dr Reddy's Labs and Infosys are laggards in the Sensex.
The Indian rupee gained marginally in the early trade on Tuesday. It has opened higher by 7 paise at 59.94 per dollar versus 60.01 Monday. The dollar inched higher against the euro but pared some early gains, as investors continued to digest last week's strong US employment report and speculated about when the Federal Reserve is likely to begin raising rates.
Ashutosh Raina of HDFC Bank said that, ''Better than expected US jobs data last week stoked the positive sentiment across global markets. Markets are now re-assessing as to when the Fed will start raising the interest rates. USD-INR pair has been trading in the 59.50-60.50/dollar range and should continue to trade in this range till the Budget.''
In Asia, Nikkei sees profit booking from five-and-a-half-month peak. Kospi is higher owing to Samsung forecasting lower-than-expected second quarter operating profit and sales.
In the US, stocks fell, with Wall Street retreating from all-time highs, as investors looked to the start of the earnings season and considered whether the federal reserve would hike interest rates sooner than expected.
Stocks closed lower following weak industrial production data for Germany, which stoked fears of a slowdown in Europe's largest economy. Germany released its industrial production index for May, showing output fell 1.8 percent month-on-month.
Brent crude slipped below USD 110 a barrel as Libyan oil exports were primed to ramp up.
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