Sensex plunges 340 points; Tata Motors sinks 5%, Infosys up 7%
10 October 2014
03:30pm Market Closing
Equity benchmarks erased some gains seen in previous session, impacted by weak global cues. The Sensex fell 339.90 points or 1.28 percent to 26297.38, and the Nifty lost 96.80 points or 1.22 percent to 7863.75.
About 1012 shares have advanced, 1903 shares declined, and 112 shares are unchanged.
Tata Motors, Hindalco Industries, Sesa Sterlite, Tata Steel, Mahindra and Mahindra, Jindal Steel and NMDC rallied 3.5-7 percent.
However, Infosys outperformed, up 6.63 percent post strong set of numbers as well as approval of bonus in the ratio of 1:1. HCL Technologies, Asian Paints, BHEL, Sun Pharma, Hero Motocorp and Reliance Industries were up 0.5-2.5 percent.
03:00pm Market Update
Equity benchmarks extended losses in last hour of trade. The Sensex plunged 347.53 points or 1.30 percent to 26289.75 and the Nifty fell 103.85 points or 1.30 percent to 7856.70.
About 942 shares have advanced, 1869 shares declined, and 118 shares are unchanged.
Tata Motors and Sesa Sterlite fell more than 5 percent followed by Hindalco Industries and Tata Steel with 4-4.5 percent. ITC, HDFC, HDFC Bank, M&M, Axis Bank, Bharti Airtel, HUL and Coal India plunged 2-3 percent.
02:30pm Cairn India in Focus
Cairn India reported seven percent drop in second quarter production from its flagship Rajasthan oilfields, mainly due to a shutdown at the fields to carry out maintenance work.
Rajasthan block production in July-September stood at 163,262 barrels of oil per day as compared to 175,478 bpd a year ago, the company said in a statement here.
"At Rajasthan, we successfully completed the planned shutdown announced in Q1, for routine operational and statutory maintenance activity at the Mangala Processing Terminal, which resulted in lower production of 163,262 bpd," it said.
Cairn said production is back to normal levels in the current quarter. "We are back to normal production levels at Rajasthan after the shutdown; excluding the shutdown period, Q2 production was comparable to Q1. We also utilised this opportunity to tie-in new facility enhancements related to development projects," the statement said.
Cairn produced 204,128 barrels of oil and oil equivalent gas from all its fields in the country in Q2, down eight percent from 221,190 boepd in the corresponding period a year ago, reports PTI.
Output from Ravva oil and gas field off the Andhra coast slipped 29 percent to 20,596 boepd as "gas sales have been suspended since July 4, 2014 on account of one of the customers undertaking a major unplanned maintenance activity within their Andhra Pradesh pipeline network."
02:00pm Market Check
The market has not been showing any sign of recovery yet. The Sensex dropped 196.20 points or 0.74 percent to 26441.08 and the Nifty tumbled 59.05 points or 0.74 percent to 7901.50.
About 1038 shares have advanced, 1668 shares declined, and 120 shares are unchanged on the Bombay Stock Exchange.
Nischal Maheshwari, Head Of Research, Edelweiss Securities expect a volatile ride for the Indian market since it is no more dependent on domestic fundamentals which have getting better by the day, but now there is cause of concern on the global fundamentals especially with IMF's warning of global growth.
However, every fall in the domestic market should be used as an opportunity to accumulate stocks where the earnings visibility is very strong, says Maheshwari. Although lower crude prices bodes well for India, it shows the demand world over has reduced, he adds.
Commercial vehicle maker Tata Motors and aluminium major Hindalco extended losses in afternoon trade, down 5 percent and 4.31 percent, respectively. Tata Steel, ITC, M&M, Sesa Sterlite, Cairn India and NMDC tanked 3-4 percent. HDFC, HDFC Bank, L&T, Axis Bank, ONGC, HUL, Bharti Airtel and Maruti Suzuki were down 1-2.7 percent.
However, Infosys maintained its northwared journey, up 6.34 percent post higher than expected earnings. Net profit of the company in Q2FY15 grew by 7.3 percent to Rs 3,096 crore and dollar revenue rose by 3.1 percent to USD 2,201 million on sequential basis.
HCL Technologies, Sun Pharma, BHEL, Hero Motocorp, BHEL and Reliance Industries were other gainers, up 1-2.5 percent.
Tyre stocks like JK Tyre and Apollo Tyres gained 1-2 percent as well as paint shares like Shalimar Paints and Asian Paints rallied 8 percent and 2 percent, respectively on fall in crude oil prices. Brent crude fell 1.4 percent to USD 88.88 a barrel.
Paint and tyre companies are collateral beneficiaries of the decline in crude prices as a large part of their raw materials consists of oil coordinates.
01:50pm Inflation to ease further?
India's consumer price inflation probably eased for a second straight month in September helped by lower food and fuel costs, a Reuters poll found.
While prices were trending lower, analysts said the Reserve Bank of India's inflation target further out in January 2016 may be difficult to achieve.
Consumer prices in September were forecast to have risen 7.2 percent, according to a poll of 28 economists, weaker than 7.8 percent in August. It would also be the lowest inflation reading since the indicator was introduced in 2012.
"A fall in vegetable prices on the month is the main reason we expect a fall in CPI," said Aman Mohunta, economist at Nomura. He added that a statistical base effect from September last year, when inflation was abnormally high, could temper Monday's data.
The RBI has set a target of bringing inflation down to eight percent by January 2015 and six percent by January 2016 but Governor Raghuram Rajan has admitted to upside risks on the latter target, reports Reuters.
01:30pm Market Expert
Nischal Maheshwari, Head Of Research, Edelweiss Securities expect a volatile ride for the Indian market since it is no more dependent on domestic fundamentals which have getting better by the day, but now there is cause of concern on the global fundamentals especially with IMF's warning of global growth .
However, every fall in the domestic market should be used as an opportunity to accumulate stocks where the earnings visibility is very strong, says Maheshwari.
Although lower crude prices bodes well for India, it shows the demand world over has reduced, he adds.
On the earnings front, he says the second quarter earnings would be a bit subdued with some companies reporting flat toplines and moderate EBITDA margins. It has been one year into currency depreciation, and the base effect of that and higher commodity prices in the last quarter is now coming into the currency side, thinks Maheshwari.
01:00pm Market Check
Equity benchmarks trimmed losses in afternoon trade supported by Reliance Industries and State Bank of India that both bounced back with marginal gains.
The Sensex declined 141.94 points or 0.53 percent to 26495.34 and the Nifty fell 40.90 points or 0.51 percent to 7919.65 while the BSE Midcap and Smallcap indices slipped 0.3 percent each.
Investors in the US bypassed corporate earnings and economic reports to focus on global concerns, including Europe's softening economy. Dipan Mehta, Member of BSE and NSE feels Indian investors too are rattled by larger-scale concerns than earnings. However, if earnings are below street expectations, it may be an added negative element for the market.
According to Mehta, Infosys' quarterly result tends to drive the technology sector with peers following the trend.
About 1003 shares have advanced, 1652 shares declined, and 111 shares are unchanged on the BSE.
Infosys, Aban Offshore, PVR, Tata Consultancy Services, State Bank of India, Apollo Tyres and BHEL were most active shares on exchanges.
12:35pm Europe Check
European markets opened lower with the France's CAC and Britain's FTSE falling 0.7 percent each while Germany's DAX declined 0.9 percent after disappointing German data.
12:30pm PNB In News
State-owned Punjab National Bank (PNB) has slashed interest rates for bulk deposits over one month but raised it for deposits under one month.
For deposits from one month to under 3 months, the new rate is 7.25 percent, down from 7.5 percent, while for bulk deposits from 91 days to under one year the new deposit rate is 8.5 percent from 8.75 percent earlier.
However, PNB has not touched its retail or non-bulk deposits despite the fact that a few weeks back the country's largest public lender SBI cut its retail deposit rates for one year and above to 8.75 percent; in this category, PNB and other banks still offer 9 percent.
12:00pm Market Check
Equity benchmarks continued to see selling pressure with the Sensex falling 227.78 points to 26409.50 and the Nifty slipping 65.25 points to 7895.30. But the fall in broader markets was less compared to largecap indices; the BSE Midcap and Smallcap indices declined 0.7 percent and 0.5 percent, respectively.
About two shares advanced for every share advancing on the Bombay Stock Exchange.
Deven Choksey of KR Choksey Shares & Securities says the much needed correction is coming which gives an opportunity for portfolio investors to invest at lower levels.
According to him, the Nifty is in a broad range of 7800-8200 and one must buy when it comes to 7800 level that would be a good technical support for the market.
Shares of Tata Motors, Hindalco Industries, Tata Steel, Mahindra and Mahindra, Sesa Sterlite, Jindal Steel and Cairn India kept top positions in the selling list, down 2.5-4 percent.
However, along with Infosys (that maintained 6 percent gain from early trade on strong Q2 earnings), BHEL, Dr Reddy's Labs, Hero Motocorp, Sun Pharma, Asian Paints and HCL Technologies outperformed the market, up 1-2.5 percent.
Weak global markets due to Europe growth concerns drove Indian equity benchmarks down a percent. The Sensex declined 251.11 points to 26386.17 and the Nifty fell 73.05 points to 7887.50.
About 793 shares have advanced, 1610 shares declined, and 105 shares are unchanged on the Bombay Stock Exchange.
Metal stocks such as Hindalco and Tata Steel saw profit booking, down 3.5 percent each. In fact the CNX Metal Index was the top sectoral loser, down 2.75 percent below its 200 DMA of 2793.
Among other indices, BSE Auto, FMCG, Bank, Capital Goods, Oil & Gas and PSU indices declined 1-1.9 percent. Tata Motors topped the selling list, down 4 percent.
However, the BSE IT Index bucked the trend, up 2.6 percent led by Infosys' Q2 numbers. Vishal Sikka's first quarter as Infosys CEO gave thumbs up by the market. The software services exporter delivered over 3 percent growth in dollar revenues compared to estimates of 2.9 percent, maintaining dollar revenue growth guidance for FY15 at 7-9 percent.
Oil marketing companies like BPCL, HPCL and IOC gained 1 percent on account of Brent crude that has slipped below USD 90 per barrel. Some paint stocks such as Shalimar Paints and Asian Paints gained 7.5 percent and 1.6 percent as they are beneficiaries of lower crude prices.
Globally, Asian stocks were under pressure following the weak close of the US markets as investors fret over slowing European growth.
10:50am Oil Prices
Oil prices sank today to more than two-year lows as weak economic data from Germany
underscored concerns over a global economic slowdown and its impact on energy demand, analysts said.
In Asian trade US benchmark West Texas Intermediate for November delivery tumbled USD 1.49 to USD 84.87, its weakest level since June 2012.
Brent crude fell USD 1.61 to USD 88.44, also the lowest level since June 2012.
The losses come as equities markets suffer another heavy sell-off.
Another round of negative eurozone data showed a 5.8 percent slump in German exports in August, while leading think tanks also slashed their growth forecasts for the eurozone's largest economy.
In the United States, a closely monitored report showed rising crude inventories, signalling weakening demand in the world's top oil consuming nation.
Meanwhile, prices have also been dampened by ample global supplies owing to increased US shale gas production and a return to the market of Libyan oil following a prolonged
disruption due to civil unrest, reports PTI.
10:30am Market Expert
Nilesh Shah MD & CEO, Envision Capital is positive on Indian equities and believes that Indian remains a strong buy.
The recent decline in commodity prices especially crude will be a huge advantage for India and will ease the pressure on its import bill. Also, the new government is taking steps to boost India's macro-economic environment, hence the outlook for India will be positive for the next few years.
He recommends market participants to buy the market on dips. Any correction in good quality stocks should be seen as a buying opportunity, he added.
10:00am Equity benchmarks lost more than a percent on concerns over Europe growth. The Sensex fell 267.63 points to 26369.65 and the Nifty slipped 79.10 points to 7881.45 weighed down by metals, FMCG, banks and capital goods stocks.
The broader markets too were under pressure with the BSE Midcap and Smallcap indices falling 0.9 percent each. More than two shares declined for every share advancing on the Bombay Stock Exchange.
Infosys bucked the trend on better-than-expected performance in September quarter, up 6 percent. Its net profit in Q2FY15 grew by 7.3 percent to Rs 3,096 crore and dollar revenue jumped 3.1 percent sequentially to USD 2201 million as against expectations of 3.4 percent in profit and 2.9 percent in dollar revenue. The company also declared bonus issue in the ratio of 1:1 and dividend of Rs 30 per share.
However, Tata Motors, Hindalco Industries and Tata Steel topped the selling list, down 3.5 percent each followed by HDFC, NTPC and Sesa Sterlite with 2.5 percent loss.
Shares of ITC, Reliance Industries, HDFC Bank, L&T, ICICI Bank, ONGC, M&M, HUL, Bharti Airtel, Axis Bank, Sun Pharma and SBI declined 1-2 percent.
Equity benchmarks started of Friday's trade on a negative note following weak global cues post concerns over Europe growth.
Infosys ' Q2 earnings beat the street estimates as it has reported a 7 percent growth in second quarter (July-September) profit at Rs 3,096 crore quarter-on-quarter and dollar revenue grew 3.2 percent to USD 2,201 million. The share was up more than 5 percent at Rs 3844.
The Sensex declined 307.13 points or 1.15 percent at 26330.15, and the Nifty was down 97.05 points or 1.22 pecent at 7863.50. About 417 shares have advanced, 1168 shares declined, and 32 shares are unchanged
Hindalco, Tata Steel, BHEL, Sesa Sterlite, DLF and Tata Motors declined 2-3 percent while Infosys, BPCL and Dr Reddy's Labs were gainers.
The Indian rupee slipped marginally in early trade, down 10 paise to 61.15 a dollar compared to previous day's closing value.
Pramit Brahmbhatt, Veracity said today investors are likely to trade cautiously ahead of vital macro data. He expects the rupee to trade rangebound to slightly weak taking cues from strong dollar. He sees rupee ranged between 60.60-61.40/USD.
On the global front, Asian markets were down following Wall Street's selloff as investors worried over slowing growth in Europe.
German exports dropped 5.8 percent in August, the largest decline since the financial crisis, saw the Dow tumble more than 300 points overnight, while the S&P 500 and Nasdaq slid more than 2 percent each. Remarks from European Central Bank (ECB) President Mario Draghi also weighed. Speaking at the Brookings Institute, he reiterated that quantitative
US stocks sank, erasing all and more of the previous day's rally, as investors bypassed US corporate earnings and economic reports to focus on global concerns, including Europe's softening economy.
European shares closed down after volatile trade reacting to weak economic data. Germany posted its biggest fall in foreign trade for five and a half years. German exports dropped 5.8 percent in August, the largest decline since the financial crisis.
In commodities, crude prices hammered by relentless anxiety about oversupply and waning global demand. Brent crude dropped below USD 90 a barrel for the first time since 2012 and US crude hit a 22-month low.
From precious metals space, gold retained gains and is headed for its best week in nearly four months as a slump in equities attracted safe-haven bids for the metal.