Sensex ends below 28000; OMCs fall, IT & pharma outperform

Dalal Street ended the day flat with a negative bias. The market opened in the green but profit-booking crept in as the day wore on. The Sensex ended below 28000, down 68.26 points at 27940.64. The Nifty lost about 25 points after hitting the 8,400 mark for the second day in a row. The 50-share index closed at 8357.85.

Banking, oil & gas and real estate stocks lost the most. Technology and pharma stocks were  major gainers. Midcaps fared worse than the bluechips with the index losing nearly 80 points.

Infosys, Dr Reddy's Labs, Bharti Airtel, Wipro and Bajaj Auto were top gainers while Tata Power, Sesa Sterlite, ONGC, GAIL and Hero MotoCorp were among the losers in the Sensex.

Oil marketing stocks tumbled after the government hiked excise duty on petrol and diesel. According to CNBC-TV18, the govt may gain Rs 6,000 crore from the excise hike in rest of this fiscal.

Gautam Chhaochharia, head - Research, UBS Securities thinks the Nifty may touch 9,600 by 2015-end.However, Chhaochharia said the growth recovery is still some time away and will increase mildly and gradually despite country's consumer price inflation for October cooling off to 5.52 percent and increase in industrial activity for September to 2.5 percent.He expects a gross domestic growth of 5.5 percent and 5.8 percent for FY15 and FY16, respectively.

Global gold demand fell to its lowest in nearly five years in the third quarter as Chinese buying slid by a third, the World Gold Council, putting it back behind India as the world's biggest gold consumer.

According to reports, the ministry and the Reserve Bank of India (RBI) are also discussing tightening limits on gold imports by trading houses. Brent crude traded around USD 80 a barrel, near its lowest since 2010, after OPEC said demand for its oil would fall next year, while Saudi Arabia remained silent about a possible cut in production.

03:30 pm Market closing: The market has ended lower. The Sensex was down 68.26 points or  at 27940.64 and the Nifty slipped 25.45 points at 8357.85. About 1334 shares advanced, 1716 shares declined and 105 shares were unchanged.

Tata Power, Sesa Sterlite, ONGC, GAIL and Hero Moto were major laggards. On the gaining side were Infosys, Dr Reddy's Labs, Bharti Airtel,, Wipro and Bajaj Auto. As a fall out of government increasing excise duty hike on petrol and diesel, BPCL and HPL slipped 4-6 percent each.

03:15 Result: Vedanta Resources Plc reported a 5 percent fall in first-half core earnings due to lower production and higher costs at its oil and gas and Zambian copper businesses, where the company said it was continuing to face challenges.

The London-based miner, which has most of its assets in India, said earnings before interest, tax, depreciation and amortisation fell to USD 2.1 billion in the six months ended September 30 from USD 2.21 billion a year earlier.

Vedanta said lower volumes at Zinc India, lower Brent crude prices, a higher share of profit on petroleum payable to the Government of India and a planned maintenance shutdown at Cairn India Ltd, its oil and gas operations, had also hurt the company in the first half.

The miner reported an 8 percent fall in oil and gas production and a 12 percent decline in copper output at its Zambian business last month.

2:45 pm Foreign holding for HDFC Bank? The long-pending proposal of HDFC Bank to hike overseas holding may be taken up by the Foreign Investment Promotion Board (FIPB) in its meeting tomorrow.

HDFC Bank's proposal is expected to come up for consideration in the next meeting, sources said. Late last year, HDFC Bank had approached the FIPB for increasing the foreign holding in the bank to 67.55 per cent from 49 percent.

If the proposal of the bank to raise foreign investment to 67.55 percent is accepted, it would exceed the cap of 74 percent, after taking into account parent HDFC Ltd's stake.

The Department of Economic Affairs and DIPP (Department of Industrial Policy & Promotion) are of the view that promoter HDFC's 22.56 percent stake in HDFC Bank is foreign investment.

2:36 pm Market check: The market has slipped further. The Sensex is down 155.84 points at 27853.06 and the Nifty is down 52.75 points  at 8330.55. About 1254 shares have advanced, 1695 shares declined, and 91 shares are unchanged.

Oil & gas and realty stocks are dragging the indices. HPCL and BPCL are down 4-5 percent each.

2:20 pm Big news: The government hiked the excise duty on petrol and diesel prices by Rs 1.50 per litre. This means the review that oil marketing companies were expected to take up, which would have led into another price cut for both diesel and petrol on the back of softening crude, is just out of the window.

According to a notification issued by the Central Board of Excise and Custom (CBEC), basic excise duty on unbranded petrol will be Rs  2.70 a litre as against Rs 1.20 a litre. On branded petrol, the duty has been raised to Rs 3.85 a litre from Rs 2.35 a litre. The new rates come into effect immediately. Apart from a basic rate, there is special additional excise duty and additional excise duty on both types of petrol.

So far, there has been a cut of about Rs 8-9 per litre in petrol and Rs 6 in diesel prices from its peak. The development has come ahead of the fortnightly review, wherein the OMCs were expected to go ahead with Rs 1-1.50 cut, but now the situation does not change.

The market is still consolidating. The Sensex is down 39.51 points at 27969.39 and the Nifty is down 14.30 points at 8369. About 1396 shares have advanced, 1504 shares declined, and 100 shares are unchanged.

Infosys, BHEL, Wipro, Hindalco, Sun Pharma are top gainers in the Sensex. Among the losers are Tata Power, Axis Bank, ONGC, HDFC and GAIL.India's liquidity is expected to go into its normal state of deficit from current surplus, says JP Morgan.

Government will cut spending to meet fiscal deficit target, JP Morgan argues. Government will also build back its cash balances, it says. Deficit would preclude any large OMO sale, bank adds. Future RBI liquidity management will be mainly through FX forward interventions, it predicts.

1:30 pm Small banks? RBI will invite applications for setting up of small and payment banks -- aimed to cater to small businesses and low income households -by the end of this month after putting in place final norms in this regard.

Besides, Reserve Bank is also planning to revamp its cash management system, Governor Raghuram Rajan said today. Addressing micro-financiers at a Nabard function, Rajan also said that microfinance borrowers should be protected from arbitrary loan pricing.

The RBI Governor also reiterated his reservation against repeated loan waivers by various state governments, saying the move distorts credit pricing, thereby also disrupting the credit market.

The market seems to be consolidating. The Sensex is up 7.78 points at 28016.68 and the Nifty is down 3.10 points at 8380.20. About 1371 shares have advanced, 1418 shares declined, and 106 shares are unchanged.

BHEL, Cipla, Sun Pharma, Dr Reddy's Labs and Wipro are top gainers in the Sensex. Among the losers are Tata Power, Axis Bank, HDFC, GAIL and SBI.

Brent crude traded around USD 80 a barrel on Thursday, near its lowest since 2010, after OPEC said demand for its oil would fall next year, while Saudi Arabia remained silent about a possible cut in production.

Global demand for oil from OPEC will drop to 29.20 million barrels per day (bpd) next year, almost 1 million bpd less than it currently produces, the cartel said in its monthly report.
Brent broke below USD 80 a barrel for the first time since 2010 on Wednesday before settling down USD 1.29 at USD 80.38.

12:50 pm Inflow of foreign funds: India flow tide has turned decisively, said Citi Research, a unit of Citigroup Global Markets Inc.

"It's high, rising and could well have a long way to go," it said.

Citi Research said retail inflows in mutual funds of USD 6 billion in six months sustainable; cites weak performance of other assets and very low equity ownership. Year-to-date foreign debt inflows are ahead of equity flows for the first time, says Citi Research.

Citi Research says foreign investors are turning aggressive on India, betting more on cyclicals and less on defensives.Domestic investors raising exposure to staples, industrials and energy, it says, while Maintaining Sensex target of 31,000 and Nifty target of 9,240 for December 2015.

12:30 pm FII view: Gautam Chhaochharia, head-Research, UBS Securities remains bullish on the market with Nifty target of 9,600 by 2015-end. However, Chhaochharia said the growth recovery is still some time away and will increase mildly and gradually despite country's consumer price inflation for October cooling off to 5.52 percent and increase in industrial activity for September to 2.5 percent. He expects a gross domestic growth of 5.5 percent and 5.8 percent for FY15 and FY16, respectively.

Speaking to CNBC-TV18, Chhaochharia said that the two-wheeler space is surprising positively. Maruti remains his top pick in auto space though he recommends avoiding two-wheeler companies.

The market seems to be sluggish after hitting record highs consecutively last few days. The Sensex is down 31.49 points at 27977.41 and the Nifty is down 13.50 points at 8369.80.

About 1284 shares have advanced, 1322 shares declined, and 109 shares are unchanged.

Cipla, BHEL, Wipro, Sun Pharma and Infosys are top gainers while Axis Bank, HDFC, SBI, Dr Reddy's Labs and GAIL are losers in the Sensex.

IT, Pharma and consumer durable stocks are lending support to the market while oil & gas and banks are under selling pressure.

Gold was steady as investors awaited US data for possible cues, but sentiment remained fragile as optimism over an economic recovery and a strong dollar dented bullion's appeal as a hedge.

More outflows from bullion-backed exchange-traded funds indicated that investors anticipate further price falls as the dollar stays close to a four-year peak.The metal has seen an intense sell-off since Oct. 31, sliding below the key technical level of USD 1,180 and then plumbing a 4.5-year low at USD1,131.85. It has since recovered modestly on short-covering.

11:50 am Macro economy outlook: Inflation is likely to be in the 6-6.5 percent range in the first quarter of calendar year 2015, is the word coming in from Sonal Varma, India economist at Nomura Financial Advisory & Securities. However, disinflation continues to be there in the economy because of the lag effect of growth. She believes the Reserve Bank is taking a medium-term view on inflation and wants to see it at 4-4.5 percent. Her base case is still for a rate cut in January 2016.

According to her, there is limited scope for a interest rate cut in current framework. Varma says part of the bounceback in IIP in September is because of increased production on account of festive season in October. She expects to see some moderation in IIP growth in October as it had fewer working days.

11:30 pm Buzzing: Shares of Whirlpool of India hit record high at Rs 640.80, up 20 percent intraday. Investors are enthused about management confidence and growth plans.  In an analyst meet, the management has said of achieving target of growing revenue 2.5 times in next three years, 35 percent CAGR over FY14-FY17E with focus on profitability.

The home appliance maker is eyeing to become market leader in 2017. Arvind Uppal, Chairman, Whirlpool India had said earlier in an interview to CNBC-TV18, "Our target is that by 2017, we want to achieve the number one position in home appliances industry in India. So we are sitting in the back end of 2014 and we have three years to get there. Roadmap is already there.''

As profitability has improved, Whirlpool is focusing now on volumes and gaining market share in economic segment also by launching various prouducts in categories like semi-automatic washing machine etc, which would drive revenue without compromising on profitability.

After opening on firm note, the market has become quite flat. The Sensex is down 14.76 points at 27994.14 and the Nifty is down 10.35 points at 8372.95. About 1183 shares have advanced, 1220 shares declined, and 88 shares are unchanged.

Banks and realty stocks are dragging the indices while both small and midcaps are still holding in the green. Cipla, Wipro, BHEL, Sun Pharma and Wipro are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, Bharti Airtel, Sesa Sterlite, HDFC and SBI.

India and the US have resolved WTO issues says Commerce Minister, Nirmala Sitharaman. She adds that India and the US have resolved differences with respect to public food stock holdings but the WTO general council will now consider India's proposals

Meanwhile, Brent is near USD 80 per barrel, its lowest since 2010, after OPEC says demand is likely to fall next year.

10:55 am Buzzing: Shares of Bharat Petroleum Corp (BPCL) slipped 3.5 percent intraday as it posted dismal September quarter results. Brokerages also are negative on the stock.
CLSA has downgraded it to underperform from buy with a target price of Rs 800 per share.

CLSA says that oil marketing companies (OMCs) no more benefit from falling crude price after diesel price deregulation and warns that these companies may have to bear one-time inventory losses as crude falls.

BPCL's upstream business which makes over 35 percent of our fair value could be negatively impacted if crude stays weak, it adds.

"Recent stock price builds in continuation of supernormal marketing margins and ignores the risks of upcoming competition from private players. It says marketing margin and volumes of OMCs will be at risk as competition from private players ramps up in the auto fuel marketing space in the coming months," it says in a note.

10:30 am FII outlook: Adrian Mowat, Chief Asian and Emerging Equity Strategist, JPMorgan says the CPI data is likely to come down further going ahead. According to him, the fall in crude price and the pick up in economy is making Indian equities quite attractive right now and believes the current valuations of Indian market look fair.

He believes India may see a further earnings upgrade going ahead in 2015 after Standard and Poor's raised India's outlook to 'stable' from 'negative' in September, saying the country's government mandate and improved political setting offered a conducive environment for reforms. Meanwhile, Mowat remains overweight on financial sector though he recommends caution while investing in public sector banks.

The market is succumbing to profit booking pressures. The Sensex is down 37.14 points at 27971.76 and the Nifty is down 19.60 points at 8363.70. About 940 shares have advanced, 1028 shares declined, and 72 shares are unchanged.

BHEL, Sun Pharma, Cipla, L&T and Tata Steel are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, HDFC twins, TCS and Tata Motors.

Asian shares slipped slightly as investors looked to a run of Chinese economic indicators due later in the day, while Wall Street shares ended a five-day winning streak as falling oil prices hurt energy stocks.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.1 percent with resource-heavy Australian shares falling 0.5 percent. Japan's Nikkei fell 0.3 percent after big gains in the previous two sessions on expectations that Prime Minister Shinzo Abe will postpone a planned tax hike next year to support the economy.

The oil market showed no sign of a rebound after five-months of decline, with Brent crude futures hitting a four-year low of USD 79.72 per barrel.

9:55 am Market check: There is a sudden dip in market as the Sensex is down 54.99 points at 27953.91 and the Nifty is down 22.30 points  at 8361.
About 961 shares have advanced, 946 shares declined, and 64 shares are unchanged.

9:45 am Buzzing: Shares of National Aluminum Company rose 10 percent intraday after it announced strong September quarter results. The  state-run aluminium maker reported 91 percent jump in net profit to Rs 341.52 crore for the second quarter ended September 30, 2014-15, on higher income.

The company had clocked Rs 179.17 crore net profit in the July-September quarter of the last fiscal, it said in a BSE filing.

Total income of the company rose to Rs 1,996 crore from Rs 1,738 crore a year earlier. Total expenses of the company rose to Rs 1,625 crore from Rs 1,599 crore. Tax expenses also increased to Rs 198 crore from Rs 83 crore.

9:35 pm Results: Steel maker Tata Steel has reported a 36.8 percent jump in consolidated net profit at Rs 1,254 crore for the July-September quarter led by income from land sale in Mumbai. Profit in the year-ago period was Rs 916.8 crore. The company earned an exceptional gain of Rs 1,145 crore on account of completion of sale of a land at Borivali, Mumbai. If this exceptional income removes from profit, then earnings missed street expectations on every front. In Q2FY14, there was a deferred tax credit of Rs 390.02 crore.

Profit was expected at Rs Rs 593 crore on revenue of Rs 35,990 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Consolidated total income from operations fell by 2.4 percent to Rs 35,777.11 crore in the quarter ended September 2014 compared to Rs 36,644.9 crore in same quarter last year.

The market has opened on a strong note again. The Sensex is up 79.83 points at 28088.73 and the Nifty is up 21.95 points at 8405.25. About 544 shares have advanced, 148 shares declined, and 23 shares are unchanged.

Sesa Sterlite, M&M, Wipro, Hero MoroCorp and ONGC are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, Tata Steel, ITC and HUL. BPCL is down 2 percent. Among the midcaps, Nalco is up 8 percent.

The Indian rupee opened flat at 61.48 per dollar versus 61.51 Wednesday. Britain's pound fell to a 14-month low against the dollar on Wednesday as investors pushed back rate-increase expectations to late 2015 after the Bank of England forecast low inflation. The dollar rose more modestly against other major currencies.

Mohan Shenoi of Kotak Mahindra Bank said," Gradual dollar strength is continuing globally. Better than expected IIP and CPI data is positive for Indian stock markets which should keep rupee well supported. The USD-INR is expected to trade today in a range of Rs 61.20-61.50/dollar."

Global cues, meanwhile are mixed with the US markets ending flat as investors mulled the slowdown in Europe. European markets closed with sharp losses and Asia too is trading in the red.

In commodities, WTI crude closed at a three-year low with prices under pressure from the growing oil glut created by the US shale boom and the restart of Libya's largest operational oilfield. Brent slipped below USD 80 dollars per barrel. Gold hovers around USD 1160 an ounce.