Sensex plunges 208 points, Nifty below 8100; ITC, Infy fall 2%

10 Sep 2014

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03:30 pm Market closing: The market ended in red for second day. The Sensex ended down 207.91 points or 0.7 percent at 27057.41 and the Nifty managed to end at 8094.1, down 58.85 points or 0.7 percent. About 1742 shares have advanced, 1275 shares declined, and 88 shares are unchanged.

Hero MotoCorp, Coal India, ITC, HDFC and Infosys lost around 2 percent each. Sesa Sterlite, ICICI Bank, Tata Power, Bajaj Auto and Tata Steel are top gainers in the Sensex.

03:20 pm Gold import duty? The government is not considering an immediate gold import duty cut, Trade Minister Nirmala Sitharaman said..

The government had raised the import duty on the yellow metal last year to 10 percent to limit overseas purchases by the second-biggest bullion consumer and help trim its bloated current account deficit.

However, a dramatic improvement in the deficit had raised market expectations of a duty cut.

03:10 pm New KYC norms: Market regulator Sebi plans to align KYC (know your customer) norms for domestic investors with the foreign portfolio investors (FPI) regime, CNBC-TV18 learns from sources.

Earlier this year Sebi had put in force the entire FPI regime which had a very rationalised risk assessment system, where FPI were categorised in to low, medium and high categories. Now, Sebi wants to bring in the same concepts for the domestic investors because currently there are different risk assessments criteria for different kind of entities; whether its mutual fund or Development Financial Institution (DFI) or an individual or a high net worth individual (HNI) or a body corporates.

According to Sebi KYC should be based on the risk assessments of these entities - they will be categorised as low, medium and high and going forward intermediaries will have much better say of classifying these entities based on the risk assessment they do.

03:00pm Wockhardt in focus
Wockhardt said a meeting of the board of directors of the company will be held on September 15, 2014, to consider and approve amalgamation of two wholly owned subsidiaries viz Wockhardt Biopharm and Vinton Healthcare with company.

02:50pm RPP Infra in News
Investors bought huge shares of smallcap company RPP Infra Projects after winning major order for construction of godowns in Tamil Nadu. The stock gained as much as 19.3 percent intraday.

Infrastructure development company RPP has bagged new order worth Rs 89.48 crore in construction of scientific storage godowns in Tamil Nadu Civil Supply Corporation (TNCSC) campus at Thanjavur and Nagapattinam in Tamil Nadu, said the company in its filing.

One order worth Rs 39.16 crore is for construction of scientific storage godown of 39000 million tonnes capacity in TNCSC campus at Thanjavur district while the second order worth Rs 50.3 crore is for same type of godown of 40000 million tonnes capacity in TNCSC campus at Nagapattinam district.

02:40pm Mahindra and Mahindra declines
Mahindra and Mahindra shares fell 1.6 percent. Kotak Institutional Equities cut the automaker to reduce from add, lowering the target price to Rs 1,310 from Rs 1,404.

It cited valuations as the key reason for the downgrade.

Kotak Institutional Equities said Mahindra and Mahindra lost 13 percent market share in the utility vehicle segment over the past two years, describing that as a "significant loss".

According to the report, further re-rating of the stock would depend on curtailing subsidiary losses, improving consolidated returns on capital employed.

02:30pm Interview
Vinod K Dasari, MD,  Ashok Leyland is confident of delivering the order of 4000 buses in the next 12 months time. The company has already delivered the first bust at the end of July.

Revenues of Rs 1500 crore are expected in the next 9-12 months from this order, said Dasari. According to him the volume growth could be around 8-10 percent if the domestic market grows faster.

With regards to exports, the company expects and overall growth of 30-40 percent for combination of buses and trucks, said Dasari.

India's second largest commercial vehicle manufacturer Ashok Leyland on Tuesday has bagged orders for 4,000 buses worth Rs 1,500 crore from State Transport Undertakings (STUs).

Ashok Leyland will offer a mix of JanBus, midi-buses and ultra low entry (ULE) buses as a part of this order.

02:20pm Global Markets Check
Global shares fell as markets strengthened bets on an early US rate hike while persistent concerns over Scotland's future unnerved investors in Europe, helping a high-flying dollar hold on to recent gains.

European stocks fell for the fourth day in a row and benchmark US Treasury yields rose for the fifth straight session, something not seen since early June.

Shares in the euro zone's biggest bank Santander fell 2 percent, twice as much as the euro zone financials index and three times as much as the broader pan-European banking index after the sudden death of its 79-year old chairman Emilio Botin, reports Reuters.

02:10pm Market Expert
Despite the correction, market analysts are bullish and recommend staying invested. Market expert Satish Ramanathan advises traders to stay put, as he is expecting a longer-term revival. Every correction should be used for buying rather than selling, he adds.

02:00pm Equity benchmarks extended losses in afternoon trade on weakening rupee. The Sensex dropped 220.93 points to 27044.39 and the Nifty fell 64.10 points to 8088.85 while the market breadth remained positive.

About 1585 shares have advanced while 1272 shares declined on the Bombay Stock Exchange.

The Indian rupee breached 61 a dollar level, down 42 paise compared to previous day's closing value on worries the US Federal Reserve may raise interest rates earlier than expected.

Shares of ITC, Infosys, Reliance Industries, HDFC, Larsen and Toubro, HDFC Bank, State Bank of India and ONGC declined 1-1.9 percent while ICICI Bank, Sesa Sterlite, Bajaj Auto and Tata Power bucked the trend, up 1-1.5 percent.

1:55 pm Who is a wilful defaultor? Widening the ambit of 'wilful defualter', the Reserve Bank of India has issued clarification wherein it has allowed banks to include key executives in the management as defaulters too. The central bank also wants banks to name non-group entities as 'wilful defaulters' if they have given guarantees and don't pay up when the original party defaults.

Discussing the issue, D Narang, Executive Director of United Bank of India, which declared Kingfisher Airlines and its promoter Vijay Mallya wilful defaulter, said the bank has already served notice to UB Holdings, which is the guarantor for KFA.

''They have submitted a reply to us and we have been examining as there are certain legal issues that need to be sorted before we go against UB Holdings,'' he said.

Narang said a company or guarantor have every right to challenge the 'wilful defaulter' status if bestowed upon.

1:30 pm Macro data: Indian factory output probably slowed further in July as core industries like mining and cement manufacturing were hampered by the monsoon rains, but more encouragingly inflation was seen easing in August, a Reuters poll found. Industrial production was seen growing 1.8 percent from a year earlier in July, slower than June's 3.4 percent increase, according to the median consensus in a poll of 31 economists.

"This is the time when mining remains weak because of monsoons, so it will not deliver a good number. Manufacturing is also expected to lag," said Upasna Bhardwaj, economist at ING Vysya Bank.

The Nifty is in the red for the second day defending the 8100 mark as FMCG and banking stocks show weakness. The 50-share index is down 48.75 points at 8104.20 while the Sensex is down 171.53 points at 27093.79. About 1699 shares have advanced, 1063 shares declined, and 105 shares are unchanged.

Infosys, ITC, SBI, Reliance and M&M are among top laggards in the Sensex. Among the gainers are Tata Power, Bajaj Auto, ICICI Bank, Sesa Sterlite and Bharti Airtel.

Shipping stocks like Mercator, SCI and ABG Shipyard gain 7-12 percent today. In a bid to promote domestic shipbuilding industry, the government is mulling a financial assistance scheme, which could include a shipbuilding fund to provide soft loans to players.

The rupee weakened to its lowest in nearly a month tracking falls in emerging markets due to worries the US Federal Reserve would raise interest rates earlier than expected, although exporters' dollar sales capped broader falls.

Emerging markets tracked falls in Wall Street and a rise in US bond yields after a San Francisco Federal Reserve Bank paper released on Monday showed investors underestimated the speed at which the Fed might raise interest rates.

That raised concerns the US central bank could signal an earlier-than-expected rate hike at its next policy meeting on Sept. 16-17.

01:00pm Lanco Infratech in focus
Investors lapped up shares of Lanco Infratech on company's decision of selling more power plants to cut down debts. The stock gained as much as 8 percent intraday.

"Lanco plans to sell 3000 MW assets to raise Rs 5,000 crore cash and to reduce the additional debt of Rs 15,000 crore," said the company in its filing.

Recently (August 13) the company, which has been reporting losses since the quarter ended June 2012, sold its Udupi thermal power plant to Adani Power for Rs 6,000 crore.

The company said since last one year, it has been working on each of the projects to settle the issues and bring back viability. With measures (taking by government to reslove power related issues) as well as in the background of CDR approval and various meetings with bankers and strategic partners, we are confident of driving the Group into same level of profitability again," it added.

12:40pm Interview
BPO firm Firstsource Solutions is very confident about its outlook in FY16. According to its MD and CEO Rajesh Subramaniam, the margin expansion is intact. The company maintains margin improvement guidance of 150-200 bps in FY15.

The deal pipeline of the company is very attractive and currently stands around USD 400 million.

The company is active in defence and healthcare segments, especially affordable healthcare and expects significant opportunities going ahead.

The management expects a slightly subdue growth of around 4-6 percent in FY15. However, the company is hopeful of growing above 8 percent next year.

12:25pm Sanghi Industries, BL Kashyap rally
Sanghi Industries surged 4.9 percent and BL Kashyap jumped 20 percent

Reliance Mutual Fund bought 32.6 lakh shares of Sanghi at Rs 44.5 a share via a bulk deal on Tuesday while HDFC Mutual Fund purchased 14 lakh shares of BL Kashyap at Rs 9.20 each in a bulk deal.

12:00pm The market was not showing any signs of recovery in noon trade. The Sensex declined 142.03 points to 27123.29 and the Nifty fell 41.15 points to 8111.80 but the broader markets continued to outperform.

The BSE Midcap and Smallcap indices gained 0.4 percent and 0.7 percent, respectively. Advancers beat decliners by a ratio of 1629 to 1027 on the Bombay Stock Exchange.

Shares of ITC, VST Industries and Godfrey Phillips India fell 2-4 percent on government's tighter norms to put a check on smoking. According to a media report, the government may also ban sale of loose cigarettes.

However, shipping stocks ABG Shipyard, Bharati Shipyard, GE Shipping, Mercator, Varun Shipping and SCI surged 5-15 percent as in a bid to promote domestic shipbuilding industry, the government is mulling a financial assistance scheme, which could include a shipbuilding fund to provide soft loans to players.

Largest private sector shipbuilder ABG Shipyard, which is under a CDR, will receive Rs 650 crore infusion from lenders by this month-end as part of the Rs 10,000-crore debt recast deal worked out in March, a top company official has said.

11:45 am Market outlook: Jyotivardhan Jaipuria, Head of Research, BofA ML remains bullish on the Indian market. In an interview to CNBC-TV18, he says that India Inc's earnings are likely to double over the next four years and Indian indices would mirror those gains. However, for now, global cues, especially interest rate hike by the US Federal Reserve, continue to be the biggest risk for Indian equities and could spoil the party. He foresees a 5-7 percent correction from the current levels.

On his sectoral bets, Jaipuria is very positive on the oil and gas space . He is bullish on banks and expects a big re-rating in public sector lenders. But his biggest overweight sectors are auto and cement. On the other hand, the research firm is neutral on export-oriented sectors - IT and pharma. It is also underweight on telecom and consumer staple stocks.

11:30 am Buzzing: Shares of ITC fell 2 percent intraday on government's tighter norms to put a check on smoking. According to a media report, the government may also ban sale of loose cigarettes.

The report states that an expert panel headed by Delhi government's former principal secretary Ramesh Chandra has submitted its observations to the health ministry. Besides, the report suggests raising age limit for smoking to 25 years from 18 years and increasing fine for smoking in public to Rs 20,000 from Rs 200.

The panel also suggested to impose manufacturers a fine of Rs 50000 up from now Rs 5000 for violating the provision on carrying pictorial warning signs on cigarette packets.

The market is still under pressure. The Sensex is down 123.14 points at 27142.18 and the Nifty is down 36.95 points at 8116.00. About 1543 shares have advanced, 887 shares declined, and 91 shares are unchanged.

Tata Power, Sesa Sterlite, ICICI Bank, Bharti Airtel and Bajaj Auto are top gainers in the Sensex. Among the losers are Infosys, M&M, ITC, Reliance and SBI.

Gold slipped to trade near its lowest in three months as speculation over an early US interest rate hike strengthened the dollar and dulled bullion's appeal. The dollar hit a 14-month high on Tuesday as investors seemed to reprice the risk of an earlier US interest rate hike after interpreting a Federal Reserve study as suggesting they were underestimating such a move.

Finance Minister Arun Jaitley will miss a meeting of finance ministers from the Group of 20 nations in Australia next week as he is still in hospital undergoing treatment, reports Reuters. Jaitley was admitted to a New Delhi hospital on September 1 for treatment to manage a diabetic condition. The 61-year-old minister, who is responsible for both finance and defence in India's new government, had originally been expected to leave hospital after a few days.

10:55am FII View
Jyotivardhan Jaipuria, Head of Research, BofA ML remains bullish on the Indian market. In an interview to CNBC-TV18, he says that India Inc's earnings are likely to double over the next four years and Indian indices would mirror those gains.

However, for now, global cues, especially interest rate hike by the US Federal Reserve, continue to be the biggest risk for Indian equities and could spoil the party. He foresees a 5-7 percent correction from the current levels.

The Indian market has been moving higher on positive domestic developments; other emerging markets have done well because of strong global inflows, but given the global cues one could see a tactical correction in emerging markets, he adds.

10:25am Sasken Communication in News
Shares of Sasken Communication Technologies touched a 6.8-year high on getting royalty payment from Spreadtrum Communications Inc in connection with arbitration award received in July.

Spreadtrum, on September 9, has remitted an additional amount of USD 21.49 million in terms of royalty and interest on unpaid royalties, said the company in its filing. It was an addition to the receipt of first tranche of USD 7 million from Spreadtrum on August 13.

On July 1, Bangalore-based Sasken received arbitration award in its favour in the matter of Spreadtrum Communications Inc. "The award recognised that the agreement between the parties is in full force and as a result, Spreadtrum has been directed to pay USD 31.7 million within 30 days, towards royalties and interest on unpaid royalties," said the company in its filing.

The arbitrator also had directed Spreadtrum to continue to provide royalty reports and pay the contracted royalties on an ongoing basis. In December 2012, Sasken had approached American Arbitration Association's International Centre for Dispute Resolution over non-payment of royalties.

10:00am The market remained under pressure with the Sensex falling 102.47 points to 27162.85 and the Nifty slipping 30.40 points to 8122.55 weighed down by index heavyweights like Infosys, ITC, HDFC, Reliance Industries and HDFC Bank.

However, the outperformance in broader markets continued with the BSE Midcap and Smallcap indices gaining 0.3 percent and 0.5 percent, respectively. Advancing shares outnumbered declining ones by a ratio of 1260 to 803 on the Bombay Stock Exchange.

Laurence Balanco, CLSA says relative to the regional benchmark, India continues to work its way higher following the breakout form the 2010-2013 downtrend channel.

''Further relative gains are likely in the coming months. Technically strong stocks in India include names like Infosys, ICICI Bank, Axis Bank, ONGC and Apollo Hospitals,'' he adds.

Infosys fell 1.4 percent followed by ITC, HDFC, Reliance Industries, HDFC Bank, Larsen and Toubro, SBI, Mahindra and Mahindra, Axis Bank, Hero Motocorp and Wipro with 0.6-1.2 percent.

However, shares of ICICI Bank, Bharti Airtel, ONGC, Tata Motors, Cipla, Tata Power and Hindalco gained 0.3-1.5 percent.

10:00 am FII view:  Laurence Balanco, CLSA says relative to the regional benchmark, India continues to work its way higher following the breakout form the 2010-2013 downtrend channel.

''Further relative gains are likely in the coming months. Technically strong stocks in India include names like Infosys, ICICI Bank, Axis Bank, ONGC and Apollo Hospitals,'' he adds.

Viktor Shvets, Macquarie says emerging market equities are coming towards the tail-end of the rally as most indicators are turning less supportive. ''We will watch currencies moves and cost of capital closely. In our view, Eurozone is deeply embedded in deflation and recent ECB moves are likely to increase volatilitym'' he adds.

9:45 am Buzzing: Shares of Biocon were up 2 percent intraday on Wednesday after it acquired GE Capital's entire 7.69 percent stake in its research services subsidiary Syngene International for Rs 215.38 crore.

The drug maker company, which had sold the stake to GE on October 31, 2012 for Rs 125 crore, has paid almost double to buy back this stake.

"Biocon Research Ltd, a wholly owned subsidiary of Biocon, has entered into an agreement with GE Equity International Mauritius, a subsidiary of GE Capital Corporation to purchase the latter's investment in Biocon's research services subsidiary, Syngene International for an agreed consideration of Rs 215.38 crore," the company said in a BSE filing. 

Equity benchmarks fell 0.4 percent in early trade on weak global cues. The Sensex declined 98.03 points to 27167.29 and the Nifty lost 32.20 points to 8120.75.

About 576 shares have advanced, 517 shares declined, and 43 shares are unchanged.
 
State Bank of India, Infosys, M&M, Hero Motocorp, BHEL, Ambuja Cements, United Spirits, IndusInd Bank and Jindal Steel fell more than 1 percent.

However, Coal India, Bharti Airtel, ICICI Bank, Bajaj Auto, Sun Pharma and Power Grid Corporation gained 0.5-1 percent.

The Indian rupee opened lower by 17 paise at 60.77 per dollar versus 60.60.

It was broad rally in the US dollar. The greenback hit a fresh six-year high versus the yen. However, some stability in euro and sterling eased the dollar gains marginally. The dollar index is just holding above the 84 mark.

Himanshu Arora, Currency Analyst at Religare said, "USD-INR pair is expected to trade higher today amid consistent strength in dollar against a basket of currencies and on profit taking in domestic equity markets.''

He further added, ''Dollar demand from importers and lack of clear signs on tensions in Ukraine may also cap the rupee in today's session. USD-INR is expected to trade in the range of 60.38-60.95/dollar."

Asian markets were trading weak following weak US cues. US stocks closed lower on fears that Fed may signal a change in stance at the upcoming FOMC meet.

And in Europe, shares closed lower on the back of fears over an upcoming independence vote for Scotland spreading across the region and weak trade on Wall Street. In commodities, Brent crude oil prices fell below USD 100 per barrel in volatile trade , a fourth straight daily decline as ample supplies weighed.

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