Sensex, Nifty end in red; Sun Pharma, ONGC major losers

03:34 pm Market closing
It is the third consecutive day that market has ended in red as consolidation mode is on. The Nifty once again ended below the 8100-level, down 8 points at 8085.70. The Sensex slipped 61.54 points to 26995.87.

Sun Pharma and ONGC lost around 4 percent each while Coal India, Wipro and M&M were other laggards in the Sensex. SBI, Hero, BHEL, HUL and Tata Power were major gainers.

03:20 pm MF data
Mutual fund (MF) managers raised their exposure in bank stocks to all-time high of over Rs 56,600 crore in August, making it the seventh consecutive monthly rise in capital infusion.

According to the latest data available with Securities and Exchange Board of India, MF investments in bank stocks reached Rs 56,625 crore as on August 31, accounting for 20.10 percent of their total equity assets under management (AUMs) of Rs 2.81 lakh crore.

Since January, MFs have been raising their exposure to banking shares. Software was the second most preferred sector with MFs, with an exposure of Rs 29,668 crore, followed by pharma (Rs 19,394 crore), auto (Rs 17,754 crore) and finance (Rs 15,116 crore).

At current levels, the MF industry has the highest exposure to banking sector since August 2009.

03:00pm Torrent Power in News
Torrent Power is the latest company to enter the list of interested parties for GMR's Emco plant, reports CNBC-TV18 quoting unnamed sources.

The company is said to have conducted an initial round of inspection at the plant which is one of the assets GMR is trying to monetize to pare it Rs 40,000 crore debt.

GMR is likely to sell its majority stake in the plant which is worth Rs 3,948 crore. GDF Suez, Sembcorp and various other PE players are reported to be interested in the plant.

Both GMR and Torrent Power refrained from commenting on the development.

02:40pm Tata Motors under pressure
Shares of Tata Motors lost ground after its UK subsidiary Jaguar Land Rover (JLR) reported weak sales growth in August.

JLR sold 30249 units in August, down 11 percent compared to previous month but up 9 percent compared to same month last year. Jaguar sales dropped 16.5 percent M-o-M and 6 percent Y-o-Y to 5074 units while Land Rover sales declined 10.5 percent month-on-month (up 12 percent year-on-year) to 25175 units.

The fall in sales on month-on-month basis was because of production constraints at assembly lines three months prior to XE launch, name plate registration holiday in August-September in Europe and muted demand across few developed markets like US.

In last week, JLR US retail sales fell 14.8 percent Y-o-Y to 5673 units.

02:20pm Interview
Union Bank of India plans to raise Rs 1,386 crore through qualified institutional placement (QIP) by the end of FY15. Speaking to CNBC-TV18 on same, CMD Arun Tiwari says the bank will prefer doing the QIP when market price will be equal to book value as the bank is no hurry to raise funds.

The state-owned bank has already received all the necessary clearances from the Reserve Bank of India and shareholders to raise funds.

Union bank is targeting net interest margin of 2.9 percent by the end of this financial year after improving them to more than 2.5 percent in June quarter. The bank also expects to cut down its gross non-performing assets (NPAs) to below 4 percent in FY15 after rising to 4.27 percent in the quarter gone by.

02:00pm The market continued to consolidate at around 8100 level on the Nifty and 27000 level on the Sensex but the broader markets remained strong with the BSE Midcap and Smallcap indices rising 1-1.5 percent.

The Sensex declined 11.40 points to 27046.01 while the Nifty rose 2.40 points to 8096.50. About 1939 shares have advanced, 1030 shares declined, and 94 shares are unchanged.

Nitin Jain, principal investment manager, Kotak Mahindra (UK) Partner remains constructive on equity markets given the improving global liquidity. In an interview to CNBC-TV18, he says that India Inc's earnings by the second or third quarter of this financial year should start reflecting this optimism.

Further he adds that earnings growth will be the key driver for Indian stock market from hereon.

Housing finance company HDFC and petrochemical major Reliance Industries led the recovery in the market in last hour of trade, up 1.4 percent and 0.4 percent, respectively.

Top lender State Bank of India jumped 1.7 percent followed by L&T, Infosys, ICICI Bank, HUL, Hero Motocorp, Axis Bank and NTPC with 0.5-1.3 percent.

However, Sun Pharma, ONGC, Coal India and Wipro remained under pressure, falling 1-5 percent.

In the midcap space, GSFC, Abbott India, Westlife Development, EID Parry and GMDC rallied 6-20 percent while Godfrey Phillips, Triveni Turbine, J&K Bank, Jyothy Labs and Hindustan National Glass lost 3-5 percent.

1:50 pm FII view: Brokerage house Morgan Stanley says the widely held view that India is at the beginning of a new multi-year bull market like the one seen in 2003-04, may not be correct. According to the brokerage, while there are some similarities, there are plenty of dissimilarities as well. In a nutshell, the macro and market environment were much more appealing at the start of bull market in 2003-04

''The similarities we found were the state and direction of global liquidity, the 2-year forward expectation of earnings growth, which was 15% for both periods, the ending point of absolute valuation multiples and sector performance ranks," says the Morgan Stanley note.

1:30 pm Interview: Crude prices have softened of late and paint companies feature among the top benefactors owing to lower input costs. Abhijit Roy, MD, Berger Paints believes the reduction in crude prices will aid gross margins, however adds that most of the company's raw materials will have no impact from the crude fall. Roy rules out any price hikes in the short-term given softness in input prices.

Although there is no material pick-up in volumes so far, the paint company is confident of achieving margins in the range of 11-12 percent on the back of their market share having improved to current 19-20 percent, he says in an interview with CNBC-TV18. While the automotive segment is seeing signs of uptick, a revival in the infrastructure space will abet growth in industrial paint segment, he adds.

The Nifty continues to trade weak for the third day in a row.  The Sensex is down 77.96 points at 26979.45, and the Nifty down 14.65 points at 8079.45.

Sun Pharma, Coal India, ONGC, Wipro and M&M are top laggards in the Sensex. Among the gainers are SBI, HUL, HDFC, Hero MotoCorp and NTPC.

The cabinet committee on economic affairs (CCEA) has waved the green flag to sell stake in Coal India, ONGC and NHPC and are set to garner over Rs 45,700 crore at current market rates. Retail investors are also set to get a 20 percent reservation in this stake sale.

Speaking at the Economist India Summit 2014 Power & Coal Minister Piyush Goyal said that the government does not intend to fully exit Coal India and the Supreme Court's decision on the coal allocation issue will help re-orient Coal India.

Japan's Nikkei share average rose to an eight-month high on Thursday as the weak yen lifted sentiment and a meeting between the central bank governor and prime minister boosted expectations of additional easing in the long-term.

The Nikkei climbed 0.8 percent to 15,909.20, the highest closing level since Jan. 10. The broader Topix hit a six-year high, rising 0.3 percent to 1,311.24.

Bank of Japan Governor Haruhiko Kuroda said he told Prime Minister Shinzo Abe that the central bank will not hesitate to ease policy further if its 2 percent inflation goal becomes difficult to achieve.

01:00pm Bharat Electronics on buyers' radar
Motilal Oswal initiated coverage on Bharat Electronics with a buy rating and with a price target of Rs 2,600, implying 26 percent upside from current levels.

"The leader in Defense Electronics in India, Bharat Electronics (BHE) would be a key beneficiary of the rising defense expenditure in the country. The Indian Air Force would be finalizing large ticket acquisitions of USD 20-22 billion, and as the proportion of Electronics is higher in Air Force orders, these deals would be important from BHE's perspective," the brokerage reasoned.

Motilal Oswal expects BHE to report revenue CAGR of 14 percent and earnings CAGR of 18 percent over FY15-17. The stock gained 3.5 percent.

12:40pm Interview
With umpteen orders up its sleeve, Motherson Sumi Systems expects 15-20 percent topline growth along with a 40 percent return on capital employed in this fiscal.

The global auto ancillary player looks to set up 14 new plants in India, US and Mexico, out of which, production at 3 new plants will begin by September, says Vivek Chaand Sehgal, Chairman, Motherson Sumi Systems adding that amongst all the markets, US and Chinese markets have picked up the most.

Motherson Sumi boasts of winning orders worth 7.7 billion euro worth over the last 3-4 years. Meanwhile, the company will announce its next 5-year plan in April 2015, he says in an interview with CNBC-TV18.

12:20pm Nikkei Check
Japan's Nikkei share average rose to an eight-month high as the weak yen lifted sentiment and a meeting between the central bank governor and prime minister boosted expectations of additional easing in the long-term.

The Nikkei climbed 0.8 percent to 15,909.20, the highest closing level since Jan. 10. The broader Topix hit a six-year high, rising 0.3 percent to 1,311.24.

Bank of Japan Governor Haruhiko Kuroda said he told Prime Minister Shinzo Abe that the central bank will not hesitate to ease policy further if its 2 percent inflation goal becomes difficult to achieve.

But he also told Abe that a positive economic cycle in Japan is firmly in place, suggesting there is no immediate need to act, reports Reuters.

12:00pm Equity benchmarks remained under pressure in noon trade with the Sensex declining 93.44 points to 26963.97 and the Nifty falling 21.45 points to 8072.65 whereas the BSE Midcap and Smallcap indices gained around a percent.

Sun Pharma retained its top position in the selling list, down 4 percent on USFDA's surprise audit at its Halol facility in Gujarat. Coal India, ONGC and NHPC fell 2-4 percent after the Cabinet Committee on Economic Affairs on Wednesday approved stake sale in these companies.

Tata Motors declined nearly a percent on reporting 11 percent degrowth month-on-month in August sales by Jaguar Land Rover. Shares of M&M, Wipro, HDFC Bank, TCS, Reliance Industries, Cipla, Dr Reddy's Labs, Maruti, Bajaj Auto and GAIL shed 0.3-1.5 percent.

However, HDFC, SBI, HUL, Axis Bank, L&T, Hero Motocorop, NTPC and Hindalco Industries bucked the trend up 0.3-1.3 percent.

HOEC (up 17 percent), Sun Pharma, SBI, GSFC (up 20 percent), SKS Microfinance, Bharti Airtel, IDFC and HDFC were most active shares on exchanges.

11:45 pm Buzzing: Shares of HPCL jumped 3.5 percent intraday Thursday on analysts' growing bullishness. Macquarie maintains outperform rating on the stock with an increased target of Rs 506 per share. It believes that the stock may see 25 percent rise in one month's time with a decline in crude price and gains from oil reforms. The stock has already seen a 20 percent rally from August till date.

The brokerage is positive on HPCL's ability to rampup refining capacity & face private sector retail competition. Overall, HPCL is aiming to spend USD 2.88 billion to raise its refinery capacity by 69 percent over three years post getting clearances.

''With the decline in overall subsidies the time-lag between cash allocation and disbursal has reduced to 3 months for the 6 months it was earlier. This helps reduce working capital requirements, which cuts OMCs interest expense as 55-70 percent of their debt is short-term working capital loans,'' it says in a report.

Investors have been buying oil marketing stocks like HPCL and BPCL with a hope to see zero losses on diesel. Earlier, the government has also said the under-recovery on high speed diesel (HSD) applicable for first fortnight of September will go down to Rs 0.08 per litre. This was Rs 1.78 per litre during second fortnight of August 2014.

Pharma and metal stocks drag the benchmark indices as the Sensex is down 109.72 points at 26947.69. The Nifty is down 23.00 points at 8071.10. About 1605 shares have advanced, 898 shares declined, and 89 shares are unchanged.

Sun Pharma continues to be under pressure as USFDA springs a surprise audit at Sun Pharma's Halol plant as it contributes to around 40 percent of US sales.

Coal India, M&M, ONGC and Wipro are other losers in the Sensex while HUL, SBI, Bharti, L&T and Axis Bank are top gainers. Globally, the Nikkei continues to gain and is now trading at 8-month highs on a weaker yen.

Brent crude nudged higher to stay above USD 98 a barrel amid geopolitical concerns in the Middle East, although worries about ample supply and weak demand that dragged prices to 17-month lows in the previous session kept a lid on gains.

An escalation in the United States' campaign against Islamic State militants with plans for air strikes for the first time in Syria and more attacks in Iraq have raised fears of reprisals.

10:55am Market Check
Equity benchmarks erased early gains with the Sensex falling 79.48 points to 26977.93 and the Nifty losing 13.90 points to 8080.20 but the broader markets remained strong.

The BSE Midcap and Smallcap gained 1 percent each. About 1744 shares have advanced, 730 shares declined, and 85 shares are unchanged.

10:45am Interview
Abhijit Roy, MD, Berger Paints believes the reduction in crude prices will aid gross margins, however adds that most of the company's raw materials will have no impact from the crude fall.

Roy rules out any price hikes in the short-term given softness in input prices. Although there is no material pick-up in volumes so far, the paint company is confident of achieving margins in the range of 11-12 percent on the back of their market share having improved to current 19-20 percent, he says in an interview with CNBC-TV18.

While the automotive segment is seeing signs of uptick, a revival in the infrastructure space will abet growth in industrial paint segment, he adds.

10:30am IDFC in News
Investors bought more shares of IDFC today after the state-run infrastructure financing company decided to open QIB issue on September 10. The stock gained 4 percent, in addition to 2 percent upside in previous session.

"Subsequent to the approval accorded by the shareholders of the company on July 29 to issue and allot equity shares for an amount aggregating up to Rs 2,000 crore to qualified institutional buyers (QIBs), the capital raise committee of the board of directors has decided to open the issue on September 10 for subscription by QIBs under the said placement," said the company in its filing.

The company has fixed a floor price for share sale at Rs 143.70 apiece.

10:15am FII View
Mahesh Nandurkar, CLSA says the government has started laying out building blocks for a sustainable higher growth trajectory for India.

''We highlight 4 key initiatives i.e financial inclusion, digital India, improved foreign policy and greater autonomy to states. While these initiatives do not have a quantifiable economic impact; they will have a huge broad based positive impact for an inclusive longer-term growth improvement,'' he adds.

10:00am The market continued to trade in a positive terrain with the Sensex rising 44.85 points to 27102.26 and the Nifty gaining 19 points to 8113.10 while the broader markets outperformed benchmarks smartly.

The BSE Midcap and Smallcap indices climbed 1 percent each. About three shares advanced for every share declining on the Bombay Stock Exchange.

Sun Pharmaceutical Industries fell over 4 percent on US drug regulator's surprise audit at the pharma major's Halol facility in Gujarat. It is learnt that USFDA inspectors in two teams are auditing both the injectibles as well as oral solids units at the plant, with one team focusing on manufacturing processes and other closely auditing quality control and assurance departments.

In the midcap space, GSFC shot up 13.4 percent followed by Abbott India, Bhushan Steel, Indian Bank and Bharat Electronics with 4-5 percent while among smallcaps, HOEC, Oscar Investment, Infinite Computer, Punjab & Sind and Marathon Realty surged 9-17 percent.

10:00 am FII view: Ridham Desai, Morgan Stanley says, ''Several market participants, including us, believe we may be at the beginning of a new multi-year bull market but a comparison between now and 2003-04, when the market started its previous bull run, is not justified.''

According to him, market and macro variables are at different levels but showing similar trends. ''However, we think the direction of change for most of these variables is in the right direction in 2014. Like in 2004, growth is improving, inflation is falling, the CAD is compressing and real rates are rising. The bottomline is every bull market has its own drivers, and comparisons between market conditions today and in 2003-04 are unwarranted,'' he adds.

9:45 am Big fall: Shares of Sun Pharmaceutical Industries fell as much as 6 percent in early trade Thursday on US drug regulator's surprise audit at the pharma major's Halol facility in Gujarat.

According to CNBC-TV18 sources,United States Food and Drug Administration USFDA inspectors in two teams are auditing both the injectibles as well as oral solids units at the plant, with one team focusing on manufacturing processes and other closely auditing quality control and assurance departments.

It is learnt that majority of ex-Taro products of Sun Pharma for the US market come from Halol facility. So, if sales from its subsidiaries Taro and URL are removed, analysts say nearly USD 300-400 million of company's sales would depend on products manufactured at Halol. In that light, the USFDA audit and its results are important to note.  

Equity benchmarks bounced back on Thursday morning after falling for previous two sessions on profit booking. The Sensex climbed 84.12 points to 27141.53 and the Nifty rose 32.50 points to 8126.60.

More than five shares advanced for every share declining on the Bombay Stock Exchange.

Shares of IDFC, Bank of Baroda, Axis Bank, NTPC, BHEL, HDFC and Hindalco gained 0.8-2.7 percent while Sun Pharma, ONGC, Coal India, Bharti Airtel and Cipla fell 0.3-2 percent.

The Indian rupee opened with a marginal gain of 8 paise at 60.86 per dollar against 60.94 previous day close. The dollar hit a six-year high against the yen. Meanwhile the euro continue to trade below 1.30 to the dollar.

Mohan Shenoi of Kotak Mahindra Bank said that, "The dollar rally due to risk-off sentiment arising out of Brazil downgrade and uncertainty about the Scottish referendum appears to be losing momentum today.''

He further added, ''The rupee had depreciated against dollar despite crude prices falling below USD 100/bbl. This trend is also expected to pause today. The rupee is expected to trade today in a range of 60.60-61/dollar."

According Emkay report, SPOT USDINR prices are expected to have support at 60.70 and buying can be seen there. Prices on higher side can again test 60.95. Prices should not fall below 60.55 to maintain positive outlook for the day.

Asian markets were trading mixed. In the US, stocks rose, rebounding after the S&P 500's largest decline in a month, with social-media shares helping lift the technology sector and as investors pondered when the Federal Reserve would start hiking interest rates.

And in Europe, shares closed mixed, having fluctuated during the session on concerns over when the US Federal Reserve might start to raise key interest rates and the upcoming independence vote in Scotland.