Sensex, Nifty close flat; metals, banks fall; IT, FMCG gain
25 August 2014
03:30pm Market Closing
The market lost sheen in last hour of trade especially after the Supreme Court order on coal block allocation case. The Sensex rallied more than 200 points intraday to hit a new high of 26630.74 but failed to maintain those gains, up 17.47 points to 26437.02 at close.
Nifty too erased all its gains but managed to hold the 7900 leve, down 6.90 points to 7906.30. About 1399 shares have advanced, 1619 shares declined, and 74 shares are unchanged.
Metals, power, banks and realty stocks saw major selling pressure while defensives like FMCG and IT supported the market.
02:50pm Market Check
The market erased more than half of gains in last hour of trade due to sharp fall in metals and banks stocks. The Sensex rose 51.47 points to 26471.02 and the Nifty advanced 6.25 points to 7919.45.
About 1387 shares have advanced, 1548 shares declined, and 89 shares are unchanged.
Hindalco Industries crashed 8 percent and Jindal Steel plunged 11 percent. Tata Steel and Sesa Sterlite lost around 4 percent while in the banking space, ICICI Bank, HDFC Bank and Axis Bank fell 0.7-1.5 percent.
Orient Paper, MD, ML Pachisia says that the paper industry remains under stress and the volumes across the industry will continue to be sluggish.
He, however, expects a pick up in demand for paper business. He expects paper division to do better in the second half of the fiscal.
The company, which is a major player in paper space, makes writing, printing, industrial and specialty paper. Its new division of electrical goods including fan and lightning business continues to do extremely well.
Orient Paper's debt currently stands at Rs 220 crore but is declining slowly and gradually, adds Pachisia.
02:00pm The market remained strong on positive European cues. The Sensex rose 145.69 points to 26565.24 and the Nifty climbed 30.65 points to 7943.85. About 1590 shares have advanced, 1288 shares declined, and 79 shares are unchanged.
Shares of TCS, HDFC, ITC, State Bank of India, ONGC, Maruti Suzuki, Dr Reddy's Labs, HUL, BHEL, Bharti Airtel, Cipla and Hero Motocorp rallied 1-3 percent.
However, Jindal Steel and Hindalco Industries lost 6 percent and 5 percent, respectively after Supreme Court order saying blocks awarded via screening panel since 1993 were illegal and no objective criteria was followed in allocations. The court will decide consequences of illegality on September 1.
European markets like France's CAC, Germany's DAX and Britain's FTSE gained 0.7-1 percent following a key speech by Mario Draghi, the president of the European Central Bank (ECB), who delivered a dovish tone on Friday in Jackson Hole meeting, and stressed that more stimulus could be announced soon.
01:25pm Alstom T&D in News
Shares of Alstom T&D India spiked 7 percent after getting big order from Power Grid Corporation of India for ultra-high voltage direct current link.
"Alstom has been awarded euro 400 million (Rs 3,250 crore) in contracts to build Phase II of the Champa-Kurukshetra ultra-high voltage direct current (UHVDC) link in Northern India, by Power Grid Corporation of India (PGCIL)," said the company in its filing.
The company's share in the contracts would be Rs 1,430 crore, it added.
Alstom, the market leader in Indian power transmission sector, will build two 800 kV, 3000 MW converter terminal stations, and design, manufacture and deliver on a turnkey basis 800 kV UHVDC thyristor valves, 32 converter transformers, 400 kV gas-insulated switchgear and substation equipment.
The project also covers the commissioning and successful operation of both the terminal stations and their integration with Champa-Kurukshetra Line 1 bipole, currently under construction.
"The Champa-phase II HVDC project follows the earlier success of Champa phase I, and confirms Alstom's market and technological leadership in the HVDC domain," said Rathin Basu, MD.
01:00pm The market continued to trade around its record high with the Sensex rising 188.42 points to 26607.97 and the Nifty climbing 47.15 points to 7960.35 led by technology and banks stocks.
The BSE Midcap underperformed benchmarks, rising 0.35 percent. About 1572 shares have advanced, 1191 shares declined, and 89 shares are unchanged.
Maruti Suzuki gained 1.8 percent after Credit Suisse raised target price to Rs 3,500 per share. The brokerage believes the launch of small diesel engines will be more important than new car launches and expects the company to grow faster with a 5 percent market share gain in next 3 years.
Shares of TCS, HDFC, ONGC, State Bank of India, Hindustan Unilever, BHEL, Cipla and Dr Reddy's Labs gained 1-2.5 percent.
JSPL and Hindalco Industries topped the selling list, falling 3 percent and 1.6 percent, respectively ahead of the Supreme Court ruling on coal block allocations today.
12:55pm Nikkei Check
Tokyo stocks rebounded to a 3-1/2-week high today, led by exporters and others as the yen struck a seven-month low against the dollar after a gathering of central bankers underscored the diverging path of Japanese and US interest rates.
The benchmark Nikkei average climbed 0.5 percent to 15,613.25 points, its highest closing level since July 31. It shed 0.3 percent on Friday, breaking a nine-day winning streak - the longest since December.
However, the trading activity was subdued, with trading volume hitting the lowest in a week, reports Reuters
12:25pm Market Expert
The market has been extending gains with indices surging to newer highs of late on account of which, brokerage house Edelweiss Financial Services maintains their Sensex target at 29,600 for the end of this fiscal.
Seeing no tailwainds hereon, Nirav Sheth, Head of Sales, Institutional Equities, Edelweiss Financial Services is bullish on the macro scenario with valuations, earnings and other parameters reverting back to normal. However, in an interview with CNBC-TV18, he cites concerns over investors struggling to mirror that bullishness in their portfolio.
Sheth is upbeat on the banking sector but will shy away from metals and cement space. He also feels software and consumer staples may underperform going ahead.
12:00pm Equity benchmarks remained strong with the Sensex and Nifty trading at all-time high. The Sensex jumped 197.75 points or 0.75 percent to 26617.30 and the Nifty rallied 47.30 points or 0.60 percent to 7960.50.
Advancing shares outnumbered declining ones by a ratio of 1513 to 1080 on the Bombay Stock Exchange.
State Bank of India, Arvind, Sun Pharma Advanced Research, Tata Sponge, Wockhardt, TCS, ONGC and ICICI Bank were most active shares.
BHEL, TCS, Kotak Mahindra Bank, SBI, IndusInd Bank, HDFC and ONGC spiked 1.6-2.7 percent while Jindal Steel, Hindalco Industries, Tata Power, United Spirits and GAIL declined 1-2.7 percent.
Ranbaxy Labs gained nearly a percent after UBS maitians a buy on the stock and raised target price to Rs 784 from Rs 600 earlier as the stock trades at a 6 percent discount to Sun Pharma based on the merger ratio. It believes Ranbaxy remains a good way for buying into Sun Pharma for long term holders.
Among midcaps, Greaves Cotton, Sun Pharma Advanced, Arvind, Emami and Whirlpool surged 6-10 percent whereas ESS DEE Aluminium, Bhushan Steel, Manappuram Finance, Bayer CropScience and Jet Airways fell 4-7 percent.
11:55am Banks in focus
The Reserve Bank of India (RBI) announced a revised framework for liquidity management. It tweaked the old framework to meet the overnight cash requirements of banks henceforth, the market will now have 14 day repos four times in a two week period, the RBI will also be giving money through three day repos and four day repos.
It is more like drip irrigation in the money markets with money coming in the form of small doses at several points in time to keep the call rate at 8 percent, which is the repo rate. Agam Gupta, MD, Head of FXRC, South Asia, Standard Chartered Bank spoke to CNBC-TV18 to detail the impact.
11:30am Kolte-Patil hits 52-week high
Betting big on the Mumbai's residential redevelopment market, Pune-based realty player Kolte-Patil Developers is expecting nearly 20-30 percent of its revenues from this market in the next three years, a top company official said.
The company has already entered into agreements for three redevelopment projects in Mumbai's western suburbs that has total area of over six lakh sqft and is eyeing a few more in areas such as Dadar-Chembur belt, Worli, Mulund, Khar, Bandra and Santacruz.
With a strong vision to expand in Mumbai, we are looking at the huge scope available in the redevelopment segment. This strategy has proved to be very effective, and we are confident that this will reap rewards across markets," Group Chief Executive Sujay Kalele told PTI.
11:00am The market extended gains in late morning trade with the Sensex surging 170.12 points to 26589.67. The Nifty touched 7950 level, up 38.80 points to 7952 on further buying in technology, FMCG and auto stocks.
The BSE Midcap and Smallcap indices gained 0.3 percent and 0.6 percent, respectively., About 1400 shares have advanced, 988 shares declined, and 81 shares are unchanged.
Top software services exporter TCS rallied 2 percent and housing finance company HDFC jumped 1.8 percent. State-run power equipment maker BHEL shot up nearly 3 percent. Top lender State Bank of India and car maker Maruti Suzuki rose over 1.4 percent.
FMCG major Hindustan Unilever gained 1.6 percent. Shares of ITC, Reliance Industries, ONGC, Infosys, Tata Motors, Sun Pharma and Axis Bank climbed 0.3-0.8 percent.
However, Sesa Sterlite, Hindalco Industries, Tata Steel, Gail and Tata Power fell a percent each.
10:50am Glenmark under pressure
Glenmark Pharma fell more than a percent on downgrade by Bank of America Merrill Lynch (BoAML) post a 35 percent rally in the shares in the last three months.
The brokerage downgraded the stock to underperform with a new target price of Rs 710 as it believes the stock is fully valued at target FY16E P/E of 18 times. According to the report, increase in price target is driven by a 5 percent rise in FY16E earnings per share and target multiple of 18 times (versus 17 times; in-line with historical average).
BoAML values Glenmark at a 10 percent discount to large peers, given its relative business size, limited product pipeline in US and leveraged balance sheet with lower returns versus peers.
According to the brokerage, company's US business has been struggling with revenues stuck at USD 78-80 million per quarter over the last eight quarters due to slower approvals and limited filings over FY10-12.
10:25am Market Expert
While Andrew Holland of Ambit Investment Advisors is bullish on India from a three-year perspective, he is cautious of the fresh record highs the market is seeing everyday.
Speaking to CNBC-TV18, Holland explains that the market is being driven only by liquidity for now and any global volatility will have widespread effect of the emerging markets.
He further explains that the Modi government needs to announce reforms that will revive the operative conditions on ground. He says the Q1 earnings have been only disappointing and it hasn't led to any capex expansion.
''Once Modi visits other countries to invite them to invest in India, I hope it results more in Foreign Direct Investment rather than Foreign Institutional Investors,'' he adds.
However, on a more positive note, Holland says he expects India to grow at 7 percent and corporates earnings growth to grow at 15-20 percent.
10:00am The market remained in a positive terrain with the Sensex rising 127.58 points to 26547.13 (after hitting an all-time high of 26582) and the Nifty advancing 29.75 points to 7942.95 supported by banking and financials, healthcare, capital goods and auto stocks.
The broader markets gained marginally. About 1304 shares have advanced, 753 shares declined, and 79 shares are unchanged.
BHEL topped the buying list, up 2.5 perent followed by HDFC, TCS, State Bank of India, Mahindra and Mahindra, Sun Pharma, Axis Bank, Cipla and Dr Reddy's Labs with 1-1.5 percent.
Maruti Suzuki touched a record high of Rs 2,805, up 1.8 percent after Credit Suisse maintains outperform rating on the stock with an increased target price to Rs 3,500 apiece (from Rs 3,020 earlier).
The brokerage says Maruti remains top pick in the Indian autos space, and is both an Asia ex-Japan and Global focus list stock. "We raise FY16 earnings per share estimate by around 3 percent and introduce FY17 estimates, which are 15 percent higher than the street's," it adds.
However, Hindalco Industries and Sesa Sterlite fell 1.4 percent. Infosys, Tata Steel, HDFC Bank, Gail, Tata Power, Wipro and Hero Motocorp declined 0.1-0.9 percent.
09:59am Asian Paints in focus
Asian Paints says Berger International (BIL), Singapore, a subsidiary of Asian Paints (International) (APIL), Mauritius (wholly owned subsidiary), has on August 22, 2014 filed an application for investment approval with the regulatory authorities at Jakarta, Indonesia for setting up a paint manufacturing facility as part of a greenfield foray into Indonesia.
This greenfield venture is subject to necessary statutory and other approvals, it adds.
09:45am Market Expert
According to Navin Agarwal, CEO, Institutional Equities, Motilal Oswal Securities, India is one of the best performing markets in the world currently and the foreign investors continue to repose their faith in the Indian equities.
Rajat Rajgarhia, MD - Institutional Equities, Motilal Oswal Securities expects a 15 percent growth in the Sensex earnings in FY15 and 20 percent in FY16. He sees strong earnings upgrades happening and a lot of flows from India directed funds going ahead.
The key theme of the conference is likely to be the next move by the Reserve Bank of India and the government. The broking house believes the management by the RBI in the last nine months inspired a lot of confidence in the India economy and hence, the market.
09:15am Equity benchmarks opened higher despite mixed global cues. The 30-share BSE Sensex rose 129.62 points to 26549.17 and the 50-share NSE Nifty touched a record high of 7942, up 26.65 points at 7939.85.
About 1013 shares have advanced, 318 shares declined, and 40 shares are unchanged.
Hindalco Industries, Tata Motors, Maruti Suzuki, BHEL, Sun Pharma and ONGC topped the buying list.
However, Infosys, Mahindra and Mahindra, Cipla, HDFC Bank, GAIL and United Spirits fell 0.1-0.8 percent.
The Indian rupee opened marginally lower at 60.55 per dollar on Monday as against Friday's closing value of 60.47 a dollar.
Agam Gupta of Standard Chartered expects rupee to trade in the range of 60.35-60.65/dollar. "Local banks will probably be on the bid between 60.35-60.40/dollar, while exporters and FIIs will sell dollars on any uptick above 60.60/dollar," he says.
According to Emkay report, spot USDINR prices are expected to have crucial support at 60.40-60.42 and prices should bounce back from this level. "Prices on higher side can face resistance at 60.60. Prices should not fall close 60.30 to maintain overall positive trend. Only a close below 60.30 will negate the upside view," it adds.
Globally, US Fed chairman Janet Yellen marked a mild departure from her ultra dovish stance at Jackson Hole saying the economy is getting closer to the central bank's goals on full employment and stable inflation. Wall Street ended mixed while the dollar is back at 11-month high.
Asian markets were trading mixed on flattish US lead and over Ukraine woes. The Nikkei is higher as the yen breached the 104 level and is currently sitting at 6-month lows.
In other asset classes, the euro fell to its lowest in nearly a year against a broadly firmer dollar after comments from the head of the European Central Bank raised prospects of more policy easing.