Sensex, Nifty fall 1%; metals, capital goods, banks drag
07 October 2014
03:30pm Market Closing
The market extended its southward journey for the second trading session of the October month with the Sensex falling 296.02 points or 1.11 percent to 26271.97 on Tuesday.
The Nifty closed way below the 7900, down 93.15 points or 1.17 percent to 7852.40. About 1120 shares advanced while 1762 shares declined on the BSE.
Hindalco Industries, Sesa Sterlite, Cipla, Dr Reddy's Labs, HDFC, DLF, Jindal Steel and Cairn India were top losers, falling 3-6 percent while NTPC, Gail India and Power Grid bucked the trend, up 1-1.5 percent followed by Tata Motors, Wipro and Tata Power with marginal gains.
02:55pm Market Check
Equity benchmarks extended losses in last hour of trade with the Sensex falling 277.62 points or 1.04 percent to 26290.37 and the Nifty shedding 84.10 points or 1.06 percent to 7861.45.
Decliners beat advancers on the Bombay Stock Exchange by a ratio of 1718 to 1071.
HDFC, Dr Reddy's Labs, Sun Pharma, Hindalco Industries, Sesa Sterlite, DLF, Cairn India and Jindal Steel topped the selling list, down 3-6 percent.
KK Mohanty, managing director, Gammon Infrastructure says the company has pared the promoter share by 15 percent to 65 percent.
Speaking to CNBC-TV18, Mohanty says the company is not into corporate debt restructuring (CDR) and has more than 6 operational projects.
Furthermore, he adds that while the company's Nasik and Mumbai tollway has seen a dip in traffic, the company expects to log in a revenue of Rs 1000 cr.
02:00pm Market Check
The market slipped further with the Sensex losing 211.53 points to 26356.46 and the Nifty falling 63.55 points to 7882 weighed down by capital goods, healthcare, metals, and banking and financials stocks.
About 1163 shares have advanced, 1560 shares declined, and 115 shares are unchanged.
Shares of HDFC, L&T, Sun Pharma, M&M, Sesa Sterlite, Dr Reddy's Labs and Hindalco Industries lost 2-4 percent while Tata Motors and NTPC gained 1-2 percent.
In the midcap space, Apollo Tyres, Hathway Cable, Shipping Corporation, Sobha Developer and Religare Enterprises rallied 4-7 percent while Den Networks, Trinity Trade, Petronet LNG, Gujarat State Petronet and Blue Star lost 4-6 percent.
Among smallcaps, Cera Sanitary, Shree Global, Heidelberg Cement, OCL India and Sundram rose 6-16 percent whereas ESS DEE, Oscar Investment, Venkys, Bodal Chemicals and Orissa Sponge slipped 5-6 percent.
01:55pm Tyre stocks on buyers' radar
Tyre makers gain as natural rubber prices in the local market are near their lowest levels in five years.
A strong rupee also helps further lower the cost of imports. Tyre makers source natural rubber from both home and abroad.
Auto sales in September were also robust, spurring share gains, dealers say.
Shares in Apollo Tyres jump as much as 7.6 percent. JK Tyre and Industries rises as much as 5.6 percent and Ceat gains as much as 4.9 percent, reports Reuters.
01:20pm FII View
FII flows into India hit a seven-month low in September. But the question is will flows continue to be under pressure on US Federal Reserve rate hike jitters? Cameron Brandt, Director of Research, EPFR Global believes investors are perhaps edging more towards a risk-off mind set.
He says institutional investors will probably deploy the money piling up in money market funds once they get some certainty about the number of issues. But fund managers continue to talk India up so there seems to be some appetite, he adds.
Rishav Dev, Equity Strategist Capital - Institutional Equities, Quant, too, is not much worried about the decline in fund flows. He says maybe the magnitude of flows has slowed, but it is inflows nonetheless and not outflows. Moreover, he adds, global factors are in India's favour.
Dev believes November-December are the best months for emerging markets equities. According to him, equity inflows could be in excess of USD 25 billion this year.
01:00pm Market Check
The market extended losses in afternoon trade due to fall in capital goods, metals, healthcare and HDFC group stocks. The Sensex dropped 151.91 points to 26416.08 and the Nifty declined 51.15 points to 7894.40 while the rupee gained 30 paise to 61.31 a dollar.
The rupee has been trading in the range of 61-62 a dollar, which is the fair value of the rupee, says Ashutosh Khajuria, President – Treasury, Federal Bank. He sees the range of the rupee at 60-62/ dollar.
Shares of HDFC, Sun Pharma, Mahindra and Mahindra, Cipla, Sesa Sterlite and Hindalco Industries lost 2-3.5 percent followed by L&T, ONGC, SBI, Dr Reddy's Labs, Tata Steel and Coal India with 1-1.8 percent loss.
However, Tata Motors rallied 2.6 percent despite a 8 percent fall in September sales. Commercial vehicle sales of the company went down 13 percent to 28,943 units and light commercial vehicle sales fell 24 percent year-on-year to 18,539 units while medium and heavy commercial vehicle sales rose 18 percent to 10,404 units.
12:55pm Cera Sanitaryware posts strong earnings
Bathroom solutions provider Cera Sanitaryware has reported a whopping 48.1 percent growth in second quarter (July-September) net profit at Rs 15.7 crore. Profit in the year-ago period was Rs 10.6 crore.
Net sales grew by 25.8 percent to Rs 199.6 crore in the quarter ended September 2014 from Rs 158.7 crore in same quarter last year.
12:30pm GMR Infrastructure in Focus
The first 685 MW unit of GMR Chhattisgarh Energy's 1,370 MW supercritical coal-based thermal power plant at Raikheda in the state has commenced electricity generation.
"The first unit achieved synchronisation with the grid. on October 2, last week," GMR said in a statement.
The unit used fuel oil to achieve this first synchronisation. The project has been implemented on multiple packages concept by Doosan of Korea. Work on the second unit of 685 MW is in progress, the statement added.
Since 2013, the GMR Group has commissioned two coal-based thermal power plants - the 2x300 MW EMCO Energy at Warora in Maharashtra and three units of the 4x350 MW GMR Kamalanga Energy at Kamlalanga in Odisha, reports PTI.
12:00pm Market Check
Equity benchmarks fell half a percent in noon trade while the broader markets were flat. The Sensex dropped 125.50 points to 26442.49 and the Nifty slipped 42.40 points to 7903.15.
Declining shares outnumbered advancing ones by a ratio of 1355 to 1141 on the Bombay Stock Exchange.
Dipan Mehta, Member, BSE & NSE, said that an absence of action on major reforms from the government has been putting doubts in the market.
He said that technically, the markets appear to be weak and vulnerable at this point of time because all India-centric stocks, the banks, cement, capital goods-which are supposed to do well on the uptick of GDP growth rates -- are just not participating in the bull run, and the defensives and export-oriented sectors can contribute only up to a level.
''Thus at this time it is best to be a bit of cautious and wait as this correction may deepen further over the next few trading sessions,'' he added.
Infosys was the most active stock on exchanges ahead of its second quarter earnings that will be announced on October 10, up 0.25 percent.
Hindalco Industries, HDFC, Sesa Sterlite, Mahindra and Mahindra, Tata Steel, Cairn India, UltraTech Cement and Jindal Steel were top losers, down 2-4 percent. However, Tata Motors, HUL, Maruti Suzuki, NTPC, Bajaj Auto and HCL Technologies gained 0.5-2 percent.
All tyre stocks have been buzzing of late after a fall in rubber prices, which dipped as low as Rs 95 a kg in September, after hitting a 44-month low. In an interview to CNBC-TV18, Koshy Vargheese, Executive Vice-President - Marketing at MRF, said the fall in rubber prices have come post a slide in crude oil prices.
He said the slowdown in demand in China has contributed to softening of rubber prices, but feels the sustainability of pick-up in demand will be known post-Diwali.
Typically for MRF, the positive impact of correction in rubber prices is felt with a quarter's lag. The recent correction in prices and stable pricing scenario in the replacement market bode well for margins across players.
MRF has been able to manage better margin profile compared to its peers due to higher share of replacement market, balanced product portfolio and premium pricing across most segments.
Vargheese said that typically the company maintains inventory levels of one month and feels that if the current trend in auto industry continues, ''it would be a fair assumption that 9-10 percent revenue growth may not be off the mark''.
11:40am DQ Entertainment in News
Shares of DQ Entertainment International rallied 11 percent on signing major content deal with Ciwen Media Group in China.
"DQ Entertainment and Ciwen Kids of Ciwen Media Group signed a significant content acquisition deal of multiple properties produced by DQE for distribution in Greater China, which includes Mainland China, Hong Kong and Macau," said the company in its filing.
DQ Entertainment is the global entertainment production and distribution company, specialising in animation, gaming and VFX content production, licensing and distribution.
Beijing-based Ciwen produces and distributes media content including TV dramas and motion pictures.
11:20am FII View
Robert Buckland, Citi says economic data is generally supportive of a more pro-growth angle in Asia. "Investors however, remain concerned about the growth rate of the Chinese economy. These periodic concerns have room to cause market weakness in Asia," he adds.'
"Outside of China, the main risks are the effects of a stronger USD and higher US rates in 2015. India will gain fiscally from weaker commodity prices. Overall, Asia is a beneficiary of weaker commodity prices," says Buckland.
11:00am Market Check
The market remained under pressure weighed down by index heavyweights like HDFC twins and ITC. The Sensex fell 154.24 points to 26413.75 and the Nifty declined 52.15 points to 7893.40.
About 1130 shares have advanced, 1235 shares declined, and 114 shares are unchanged.
Metal stocks are weak as global growth concerns weigh. The World Bank has cut China's growth forecast for the next 3 years - estimate is 2015 growth will be 7.2 percent, 7.1 percent in 2016 versus a previous forecast of 7.5 percent for both years.
Other frontline stocks in focus include Tata Motors (up 1.5 percent) that saw buying despite weak September sales, Mahindra and Mahindra (down 2 percent) as Mahindra 2 wheelers bids to acquire 51 percent stake in Peugeot Motorcycles.
Infosys reversed earlier losses reacting to Jack Palmer (former employee) suing the company again. DLF lost nearly 3 percent as Prime Minister Narendra Modi yesterday said the Election Commission should take appropriate action over the Haryana government's approval of DLF and Robert Vadra land deal
From the broader markets, Mphasis declined 2 percent after Macquarie downgraded the stock to underperform. TVS Motor and Ashok Leyland gained 1 percent and 3 percent, respectively post September sales numbers.
Ballarpur Industries rallied 11 percent as IFC will invest USD 100 million in BILT's arm while Apollo Tyres rose 6 percent after the RBI said foreign investors can buy upto 45 percent in the company.
Brent crude fell to over two-year lows while FIIs started month of October on negative note with a sell figure of Rs 63 crore on last Wednesday. This comes after September saw the lowest FII flows in seven months.
10:55am Market Check
The Sensex fell 135.18 points to 26432.81 and the Nifty declined 44.30 points to 7901.25. About 1182 shares have advanced, 1074 shares declined, and 102 shares are unchanged.
10:45am Ballarpur Industries in focus
Shares of Ballarpur Industries surged nearly 11 percent as International Finance Corporation will invest USD 100 million (about Rs 616 crore) in Bilt Paper BV, a step-down subsidiary of the paper manufacturer, in lieu of fresh shares.
"BPBV has entered into definitive agreements with IFC for subscription of new shares worth USD 100 million at an implied pre-money valuation of USD 600 million," Ballarpur Industries had said in a BSE filing yesterday.
"This will result into a shareholding of IFC in BPBV of 14.29 percent," the company had said. Bilt Paper is also exploring the possibility of listing of its shares at an overseas stock exchange. The subscription of shares is subject to fulfilment of conditions set out in the definitive documents, it said.
In June, Ballarpur had said that BPBV is evaluating and exploring options with IFC for receiving potential investment from IFC, in a combination of debt and/or equity in BPBV and/ or its step-down subsidiaries.
10:20am World Bank on Indian economy
Indian economy, which accounts for 80 percent of South Asia's output, is set to grow by 6.4 percent in 2015-16 as against 5.6 percent in 2014-15, the World Bank has said.
With economic activity buoyed by expectations from the new elected government of Prime Minister Narendra Modi, "India is benefiting from a "Modi dividend"," the Bank said in its twice-a-year South Asia Economic Focus report yesterday.
Over the next year or so economic growth should be supported by the recovering US economy that would provide a market for Indian merchandise and service exports, it said.
"The outlook over the next years for South Asia indicates broad economic stability and a pick-up in growth with potential risks concentrated on the fiscal and structural reform side," said Martin Rama, Chief Economist for South Asia at the World Bank.
"Future growth will increasingly depend on strong investment and export performance," he added.
Private investment is expected to pick up thanks to the government's business orientation, and declining oil prices should boost private sector competitiveness. But economic reforms will be needed for India to achieve its full long-term growth potential, the report argued.
The report said the region's economy will expand by a real 6 percent in 2015 and by 6.4 percent in 2016 compared to 5.4 percent this year, potentially making it the second fastest growing region in the world after East Asia and the Pacific, reports PTI.
10:00am Market Check
Equity benchmarks continued to trade lower with the Sensex falling 109.84 points to 26458.15 and the Nifty losing 35.70 points to 7909.85 weighed down by metals, banking and financials, FMCG and capital goods stocks.
About 1076 shares have advanced, 867 shares declined, and 94 shares are unchanged.
Harendra Kumar of Elara Capital has been worried about market's valuations and levels.
On the back of IMF paper revising global GDP growth downwards, which is not far away from global recession and given that 45 percent of India's economy is globally-linked, Kumar maintains a cautious stance for the market hereon.
He advises investors to accumulate on dips as 7,600 is likely to be the immediate target for the market.
Aluminium major Hindalco Industries topped the selling list, falling over 3 percent followed by HDFC and Cipla with 2-3 percent loss. ITC, HDFC Bank, Mahindra and Mahindra, Hero Motocorp, Gail India and BHEL lost 1-1.5 percent.
However, Tata Motors, TCS, Infosys, ICICI Bank, Reliance Industries, Axis Bank and NTPC bucked the trend, up 0.3-1 percent.
09:55am Gold Update
Gold held above USD 1,200 an ounce, retaining most of its sharp overnight gains following a bout of profit-taking in the dollar, but optimism over the US economy and possibility of higher rates kept investors wary.
Spot gold slipped slightly to USD 1,203.30 an ounce by 0249 GMT. It had jumped 1.3 percent on Monday in its biggest one-day gain in two months as physical buyers and bargain hunters lent support following earlier lows.
The metal is still not too far from a low of USD 1,183.46 reached earlier on Monday - its weakest since June 2013 - as a strong US jobs report dented its safe-haven appeal, reports Reuters.
09:35am FII View
Christopher Wood of CLSA says despite claims in some quarters that Narendra Modi is not living up to expectations, all the evidence is that he is quietly getting on with business while, sensibly, not being distracted by excessive interaction with the media.
"The most meaningful change Modi has instigated for ordinary people is his focus on financial inclusion via Jan Dhan Yojana. Another sensible approach being pursued by Modi is to encourage individual states to compete for investment. This dynamic should turn India's federal structure from a negative to a positive," he adds.
09:15am Market Check
After a long weekend of five days, equity benchmarks started of Tuesday's trade on a (marginally) lower note with the Sensex falling 22.52 points to 26545.47 and the Nifty losing 11.25 points to 7934.30.
However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.4 percent each. About 595 shares have advanced, 309 shares declined, and 52 shares are unchanged.
Shares of ITC, HDFC Bank, HUL, Infosys, Dr Reddy's Labs and UltraTech Cement lost 0.8-1.4 percent while TCS, BHEL, Coal India, ICICI Bank, NTPC, HCL Technologies and BPCL gained 0.7-2 percent.
The Indian rupee opened higher by 20 paise on Tuesday at 61.41 per dollar against 61.61 a dollar on last Wednesday.
There is a flat trade for the dollar today after rising to a four-year high of 86.746 on Friday.
Ashutosh Raina of HDFC Bank said, "The recent US non-farm payrolls number fuelled the speculation that US Federal Reserve may hike interest rates sooner than expected which sent the dollar index to near-term highs."
"The USD-INR pair continues to trade in the 61-62 range, tracking the choppy and volatile global markets," he added.
On the global front, Asian markets were trading mixed. Hang Seng, Nikkei and Kospi saw marginal gains while Straits Times and Taiwan Weighted declined. Protest in Hong Kong that started a week ago has been demanding the right to choose a candidate for the chief executive role in 2017.
In the US, stocks fell with investors adopting a cautious approach two days before the release of minutes from the Federal Reserve's last meeting and quarterly earnings. The federal open market committee releases minutes from its last session on Wednesday, with the Federal Reserve on track to conclude its bond purchases this month.
And in Europe, it was a positive start to the week although the German DAX pared gains following disappointing economic data from the country.