Sensex snaps 3-day fall, midcaps outperform; banks support

Equity benchmarks snapped three-day losing streak to close marginally higher amid consolidation on Wednesday despite mixed global cues. The broader markets outperformed benchmarks.

The 30-share BSE Sensex rose 34.09 points to 27831.10 and the 50-share NSE Nifty closed above 8350 level, up 14.95 points at 8355.65 while the BSE Midcap and Smallcap indices gained 1 percent each.

The market may remain in consolidation mode due to lack of triggers in near term, but the undertone of the market is still very buoyant, feel experts.

Bharat Iyer, JPMorgan says equity markets are in consolidation mode, adding trading volumes and values, delivery volumes and outstanding positions in the derivatives segment picked up a tad over the last month.

''Investor sentiment remains positive, as reflected in net buying by FIIs and local MFs. But insiders were sellers and the breadth was negative too,'' he adds.

On the global front, Asian markets closed mixed with the Shanghai rising 3 percent after falling initially while Nikkei lost more than 2 percent. The economic data continued to be weak as China November consumer inflation eased to 5-year low of 1.4 percent stoking expectations that Beijing may move more aggressively to head off the risk of deflation in a slowing economy.

Jim Walker of Asianomics says the Chinese economy is slowing down rapidly and is growing at 5-6 percent, which is nowhere close to 7 percent forecasted earlier. He expects the growth to slowdown to 3-4 percent in 2015.

European markets like France's CAC, Germany's DAX and Britain's FTSE were trading 0.2-0.7 percent higher (at 16 hours IST).

On the home turf, State Bank of India was the top gainer on the Sensex, up 3.5 percent followed by ICICI Bank and HDFC Bank with over half a percent gain. The PSU Bank index rallied 3 percent.

State-run oil and gas explorer ONGC was up 2.4 percent. Media report suggested that India and Russia may sign energy pact during Russian President Vladimir Putin's India visit. In this pact, Rosneft is likely to offer 10 percent stake in Vankor field and 49 percent stake in Yurubcheno-Tokhomskoye to ONGC, says the report.

Tata Power climbed 1.9 percent. The company said it will acquire Ideal Energy Projects (owned by DP Mhaiskar, the founder of IRB Infrastructure Developers) in Maharashtra. Ideal Energy owns 540 MW thermal power project in Nagpur.

Drug maker Cipla gained 1.3 percent after its subsidiary Meditab decided to sell entire 48.22 percent equity stake in Chinese company Jiangsu Cdymax Pharmaceuticals Company.

Tata Motors, the commercial vehicle maker and owner of luxury car maker Jaguar Land Rover, rebounded in afternoon trade to close with 1.55 percent gain. The stock fell more than 2 percent in early trade on fears that China growth slowdown may impact JLR sales. Meanwhile, Citi maintains buy on the stock as it believes with strong product pipeline, JLR volume growth should remain strong.

Among others, Dr Reddy's Labs, Sesa Sterlite and Hero Motocorp gained more than a percent while L&T, HUL, Bajaj Auto and Gail India declined 1-2 percent.

Power equipment maker BHEL was down 2.5 percent as JP Morgan maintained underweight rating on the stock with a target of Rs 175 apiece.

In the broader space, insurance companies like Reliance Capital and Max India rallied 4-5 percent. The select panel on insurance recommended a composite cap of 49 percent on all forms of FDI and FPI, saying term 'control' must be defined in the Insurance Act in the report tabled in the Rajya Sabha today.

The rally in Reliance Capital was also supported by a media report suggested that the Anil Dhirubhai Ambani Group company may sell entire stake in online travel company for Rs 500 crore.

Power Finance Corporation and Rural Electrification Corporation surged 5-6 percent after finance ministry sources told CNBC-TV18 that both companies' divestment is unlikely in FY15. CCEA had approved 5 percent stake sale in both companies each in November 2014.

NBCC climbed over 2 percent. Nomura reiterates buy rating post their meeting with the management with a target price of Rs 1049. SKS Microfinance shot up nearly 11 percent after UBS initiated coverage with buy rating and a price target of Rs 500 per share as it expects 32 percent CAGR in AUMs over FY15-17.

Opto Circuits remained on buyers' radar, up 3 percent as a media report suggested that DIPP moved a cabinet note to allow 100 percent FDI in medical devices.

Sugar stocks like Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini, Triveni Engineering, Dhampur Sugar and Sakthi Sugars saw huge buying interest today, rising 3-11 percent.

In the smallcap space, Bartronics India, JMT Auto and OCL India surged 20 percent each while Nilkamal, Indo Count Industries, Hindusthan Dorr-Oliver, Archies, Clutch Auto, NCC and Redington gained 4-16 percent.

About 1681 shares advanced while 1255 shares declined on the Bombay Stock Exchange.

03:30 pm Market close
After a volatile day of trade, the market ended on a flat note. The Sensex ended up 34.09 points at 27831.10, and the Nifty was up 14.95 points at 8355.65. About 1681 shares have advanced, 1255 shares declined, and 110 shares are unchanged.

SBI gained 3.5 percent while ONGC, Tata Power, Tata Motors and Cipla were top gainers in the Sensex. Among the losers were BHEL, GAIL, HUL, Bajaj Auto and L&T.
03:15 pm Gold & silver check

Gold prices today soared by Rs 650 to Rs 27,470 per ten gram in the bullion market here on strong seasonal demand and firm trends in global markets. Silver also rose sharply by Rs 1,600 to Rs 38,400 per kg on increased offtake by industrial units and coin makers.

A fall in rupee value against the US dollar and increased buying by jewellers and retailers amid ongoing wedding season lifted prices of the precious metal, bullion traders said. A cheaper rupee makes imports of the metal costlier. The rupee was trading weak at 62.05 against the US dollar at the forex market.

In Delhi, gold of 99.9 and 99.5 per cent purity zoomed up by Rs 650 each to Rs 27,470 and Rs 27,270 per ten grams respectively. It had gained Rs 170 yesterday. Sovereign traded Rs 100 higher at Rs 23,800 per piece of eight gram.

03:00pm Coal linkage rationalisation soon
The government could soon finalise the proposal for coal linkage rationalisation and swapping arrangements of about 40 thermal power projects, a move that is expected to save up to Rs 6,000 crore in logistics cost.

The proposal includes swapping agreements for power projects of companies including Adani Power, Indiabulls Power and NTPC, among others.

The Inter Ministerial Task Force (IMTF), which was formed to undertake a comprehensive review of existing coal sources and consider feasibility for rationalisation of linkages, has approved coal linkage rationalisation for 18-20 thermal power plants, according to sources.

IMTF comprises officials from the Ministries of Power, Coal, Railways and the Central Electricity Authority.

Sources said, consultancy firm KPMG has listed out 20 proposals for the coal swapping arrangements.

02:45pm Reliance Capital in Focus
Looking to cash in on e-commerce boom, Reliance Capital is all set to sell its 16 percent stake in leading travel portal Yatra.com for an estimated Rs 500 crore and is in talks with 2-3 international investors.

The deal would mark an over 12-times appreciation for this investment by Reliance Capital, the financial services arm of Anil Ambani-led business conglomerate Reliance Group, which had acquired a 16 percent stake in the online travel company for Rs 40 crore in 2006.

Sources said that Reliance Cap is in talks with 2-3 leading international investors to sell this 16 per cent stake for an estimated USD 80 million (about Rs 500 crore). The identity of the interested buyers could not be ascertained, reports PTI.

When contacted, a Reliance Capital spokesperson said: "We continuously evaluate opportunities to unlock the value of our minority investments to enhance shareholders value."

02:30pm Jewellery stocks in News
Shares in gold companies are trading higher. India will announce changes as early as this week to a rule mandating star trading houses export 100 percent of gold imports, sources told Reuters.

The proposed changes will give companies more flexibility amid global price fluctuations - traders say.

Titan Company gained 2.5 percent, Gitanjali Gems surged 7.98 percent and Tribhovandas Bhimji Zaveri is up 4.1 percent.

02:00pm Market Check
The market remained choppy in afternoon trade today, exhibiting resilience as the Nifty maintained its head above 8350 despite global volatility while the broader markets outperformed.

The BSE Sensex rose 89.08 points to 27886.09 and the Nifty climbed 26.40 points to 8367.10 while the BSE Midcap and Smallcap indices gained 1 percent each. About 1615 shares have advanced while 1121 shares declined on the Bombay Stock Exchange.

Jim Walker of Asianomics says the Chinese economy is slowing down rapidly and is growing at 5-6 percent, which is nowhere close to 7 percent forecasted earlier. He expects the growth to slowdown to 3-4 percent in 2015.

Talking about China, the Shanghai closed in the green, bouncing back in late trade after falling initially. The economic data continued to be weak as China November consumer inflation eased to 5-year low of 1.4 percent stoking expectations that Beijing will move more aggressively to head off the risk of deflation in a slowing economy.

Sugar stocks like Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini, Triveni Engineering, Dhampur Sugar and Sakthi Sugars saw huge buying interest, jumping 4-9 percent.

Tata Power topped the buying list, up 2.6 percent after the company decided to acquire Ideal Energy Projects in Maharashtra. Ideal Energy owns 540 MW thermal power project in Nagpur; hence Tata Power said its generating capacity will increase to 8,885 MW.

The select panel on insurance recommended a composite cap of 49 percent on all forms of FDI and FPI, saying term 'control' must be defined in the Insurance Act in the report tabled in the Rajya Sabha today.

The rupee weakened for the third straight session today, trading at 62 to the dollar versus a close of 61.88 yesterday tracking weak Aasian and local equities.

1:50 pm Buzzing: Shares of SKS Microfinance jumped as much as 8.8 percent intraday to hit fresh 52-week high of Rs 379.50. Brokerage UBS initiated coverage on the stock with buy rating and set target price of Rs 500, citing strong growth potential and high return on equity (ROE) in the micro finance company.

SKS is one of its preferred NBFC picks (the others are LIC Housing Finance and Shriram Transport Finance ). The brokerage said after consolidating over FY11-13, non-banking microfinance companies (NBFC-MFIs) have resumed their growth trajectory, with loan growth of more than 40 percent in FY14 and H1 FY15. It expects low microfinance penetration and a rising market share for NBFC-MFIs to support a loan CAGR of more than 25 percent for the sector over the medium term.

1:30 pm Parliament: The select committee report on the Insurance Bill, headed by Chandan Mitra, has been tabled in Rajya Sabha today. The draft report, among other things has recommended 49 percent composite FDI in insurance, suggested changes in definition of reinsurance, sought to define the term 'control' in Insurance Act and proposed power to IRDA in formulating norms subject to acts and rules.

The panel has accepted suggestions to the draft insurance bill made by Opposition Congress. Speaking about the bill, Ashwin Parekh says it is a long awaited and may go through if there aren't many dissents. He clarified that composite FDI includes FDI, FPI and NRI components as well. Former LIC chairman SB Mathur feels the bill, if it becomes a law in this session itself, will lead to many insurance companies becoming public by 2016.

The market is still in a sluggish mode as the Sensex is up 45.24 points at 27842.25. The Nifty up 14.65 points at 8355.35. About 1602 shares have advanced, 1036 shares declined, and 98 shares are unchanged.

Bank stocks are lending major support to the indices. SBI is up over 2 percent while Tata Power, ONGC, Sesa Sterlite and Cipla are major gainers in the Sensex. Among the losers are Bajaj Auto, Sun Pharma, HUL, ITC and GAIL.

Gold is trading close to a seven-week peak as weakness in the dollar and global equities prompted investors to seek safety in the precious metal. The dollar index nursed hefty losses after a brutal shakeout of bullish positions, with investors finding excuses to take profits as the year-end looms.

Global equities took a hit from political turmoil in Greece and after China's market posted its worst day in five years.

12:55pm L&T in News
L&T Construction, the construction arm of L&T, has won orders worth Rs 2008 crore including two new international orders in the months of November and December 2014.

Power transmission and distribution business has secured new orders worth Rs 1058 crore from Algerian transmission utility company - SONELGAZ - GRTE (National Society for Electricity and Gas), Power Grid Corporation of India (in Jammu & Kashmir), Bihar Grid Company, Purvanchal Vidyut Vitran Nigam etc.

Buildings and factories business has secured orders worth Rs 920 crore for the construction of a midfield airport terminal building and car park at Abu Dhabi, and for the construction of various buildings for two-wheeler company's manufacturing plant in Gujarat. The scope involves civil, structural and other associated works.

Orders worth Rs 30 crore have also been received from various ongoing jobs of heavy civil infrastructure and water & renewable energy businesses, says the company in its filing.

12:35pm RBI deputy governor says
Reserve Bank of India Deputy Governor SS Mundra said the central bank would have room to cut interest rates should factors leading to lower inflation continue.

The comments come ahead of consumer inflation data due on Friday. The RBI held interest rates steady earlier this month, but said it could ease monetary policy early next year.

Mundra also said the central bank would grant licences to so-called payment banks by March or April after releasing the final guidelines for applications last month, reports Reuters.

12:20pm Market Update
The market gained strength in afternoon trade with the Sensex rising 100.82 points to 27897.83 and the Nifty climbing 29.30 points to 8370 led by banks, metals and power stocks. State Bank of India, ONGC, Hero Motocorp, Sesa Sterlite, Tata Power, Dr Reddy's Labs, Tata Steel and Hindalco Industries gained 1-3 percent.

About 1544 shares have advanced, 1011 shares declined, and 87 shares are unchanged on the Bombay Stock Exchange.

12:15pm Market Expert
Sachin Shah, fund manager, Emkay Investment Managers is of the view that the undertone for the market is still very buoyant because macro factors are still in favour of Indian economy and the faith in Modi government is strong.

Market is giving a decent opportunity, so utilise that to buy on dips, says Shah.

Talking about sectors and stocks, he says although the slowdown in China is posing serious hurdle for the metal space but is not overly concerned about that.

12:00pm Market Check
The market remained rangebound with the Nifty trading in a range of 20 points despite weak global cues, but the broader markets outperformed equity benchmarks. The BSE Midcap and Smallcap indices climbed over 0.7 percent.

The BSE Sensex rose 9.87 points to 27806.88 and the Nifty advanced 3.90 points to 8344.60. About 1477 shares have advanced, 1005 shares declined, and 94 shares are unchanged on the Bombay Stock Exchange.

The select panel on insurance recommends a composite cap of 49 percent on all forms of foreign direct investment. The panel says (in the report tabled in the Rajya Sabha today) term 'control' must be defined in the Insurance Act. Reliance Capital and Max India rallied 4-7 percent.

Tata Motors remained in focus today on fears of a slowdown in China impacting JLR sales. China contributes almost 40 percent to JLR sales. The stock bounced back in noon trade after seeing a 2 percent fall in early trade.

Bharti Airtel gained marginally as the TDSAT has set aside a Department of Telecommunications penalty of Rs 650 crore on the company.

Asian markets traded mixed amid weak global cues and sluggish data from China. Japan's Nikkei dropped over 2 percent whereas Shanghai recovered from the day's low to trade with more than 2 percent gains. Brent crude continued to trade around five-year lows on oversupply concerns.

11:50 am Sikka's Infosys drive: Infosys CEO and Managing Director Vishal Sikka told CNBC's "Squawk Alley" on Tuesday that the Indian firm's founders are still invested in its future, but that they sold stock to use for philanthropic purposes. Sikka is the company's first nonfounder CEO.

"It was long overdue, I think it was part of a portfolio decision. The vast majority of their holdings are still there, and they are still among the largest shareholders of the company," Sikka said of the founders' stock sale. "They're fully committed to the management, to the company-it's all good."

Founders and their family members sold roughly 32.6 million shares, worth about USD 1.1 billion, according to Reuters. NYSE-traded Infosys stock opened more than 4 percent lower on Monday when the stock sale occurred.

11:30 am Buzzing: Shares of SKS Microfinance jumped as much as 8.8 percent intraday to hit fresh 52-week high of Rs 379.50 on Wednesday. Brokerage UBS initiated coverage on the stock with buy rating and set target price of Rs 500, citing strong growth potential and high return on equity (ROE) in the micro finance company.

SKS is one of its preferred NBFC picks (the others are LIC Housing Finance and Shriram Transport Finance).

The brokerage said after consolidating over FY11-13, non-banking microfinance companies (NBFC-MFIs) have resumed their growth trajectory, with loan growth of more than 40 percent in FY14 and H1 FY15. It expects low microfinance penetration and a rising market share for NBFC-MFIs to support a loan CAGR of more than 25 percent for the sector over the medium term.

The market is still dragging with the Sensex down 38.93 points at 27758.08. The Nifty is down 9.95 points at 8330.75. About 1299 shares have advanced, 961 shares declined, and 89 shares are unchanged.

Sun Pharma, ITC, Bajaj Auto, HDFC and HUL are among losers in the Sensex. The gainers include Tata Power, ONGC, Sesa Sterlite, Hindalco and Hero MotoCorp.

Globally, China bounces back after reacting negatively to the CPI data for November that came in at 1.4 percent the lowest reading since November 2009.

However, most of the other Asian markets are in the red. Besides reacting to sluggish data from China, sentiment is impacted by the over 12 percent fall in Greek markets. Brent crude continues to trade around 5-year lows.

Oil prices fell in Asia today as dealers await the latest US supply report for clues about production levels, while weak Chinese and German trade data also weighed, analysts said.

Analysts surveyed by the Wall Street Journal said they expected domestic inventories to have fallen by 2.7 million barrels in the week to December 5.

The American Petroleum Institute, an industry group, in its own survey however said stockpiles likely rose 4.4 million barrels. It said refinery operations likely increased 1.6 percentage points to 94.6 per cent of capacity.

10:58am ABB India up 3.4%, Siemens gains 2.8%
Morgan Stanley turns overweight on industrials in its model portfolio. "We are adding 300 bps to industrials (from nil earlier) by cutting energy to neutral," the investment bank says.

Adds industrials to re-rate as interest rates fall in response to government action, fiscal consolidation and declining CPI which are likely precursors to a new capex cycle in 2016.

Says private capex is likely to recover slowly given stretched balance sheets and low profitability.

Says if there is a positive surprise on capex, it is likely to come from state-owned enterprises and the government, reports Reuters.

10:40am Tata Motors under pressure
Shares of Tata Motors fell 2 percent intraday as ongoing slowdown in Chinese economy, indicated by latest inflation data and GDP, may impact Jaguar Land Rover sales.

Chinese market contributes 40 percent to JLR (the UK subsidiary of Tata Motors) sales. JLR had reported strong 17 percent volume growth over past 6 months in China.

Overall market for JLR products in China has been growing despite slowdown in GDP. The company is going to manufacture three models (Evoque, Discovery Sport and Jaguar XF) in China and is planning to increase dealership network in China by 55 percent from 161 to 250 in 18 months.

However, China's annual consumer inflation eased to a five-year low of 1.4 percent in November from 1.6 percent in October, the lowest since November 2009, signalling persistent weakness in the world's second-largest economy and giving policymakers more room to ease policy to support growth.

The China's consumer price index fell 0.2 percent in November from October while the producer price index in November declined 2.7 percent from a year earlier, its 33rd consecutive monthly decline, as sluggish demand curbed the pricing power of companies.

Media reports suggest that the 2015 target for gross domestic product (to be set by policymakers soon) is expected to be around 7 percent, the lowest in a last decade.

Experts feel if the slowdown in China continues in 2015 then the companies exposed to the world's second largest economy may get affected.

10:20am FII View
Bharat Iyer, JPMorgan says equity markets are in consolidation mode, adding trading volumes and values, delivery volumes and outstanding positions in the derivatives segment picked up a tad over the last month.

''Investor sentiment remains positive, as reflected in net buying by FIIs and local MFs. But insiders were sellers and the breadth was negative too,'' he adds.

According to him, separately, implied volatility is at an all-time low level suggest complacency. ''Money market liquidity continues to improve, and interest rates across the yield curve have declined 20-30 bps over the last month,'' says Iyer.

10:00am Market Check
Equity benchmarks remained in a consolidation mode after seeing more than a percent fall in previous session. The Sensex rose 2.43 points to 27799.44 while the Nifty declined 2.20 points to 8338.50.

However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.6 percent each. More than two shares advanced for every share declining on the Bombay Stock Exchange.

Shares of ITC, Sun Pharma and Hindustan Unilever topped the selling list, falling 1-2 percent followed by HDFC, Tata Motors, Reliance Industries and Bajaj Auto with marginal loss.

However, Infosys, ONGC, State Bank of India, Hero Motocorp, ICICI Bank, Axis Bank, Bharti Airtel, HDFC Bank, TCS and BHEL rose 0.2-1 percent.

Metal stocks like Tata Steel, Hindalco Industries and Sesa Sterlite gained nearly a percent as Cabinet may decide coal auction floor price today. Cabinet may decide to fix floor price of Rs 150 per tonne, reports CNBC-TV18.

Tata Power climbed over 2 percent.

9:50 am Lending rate cut: State Bank of India chief Arundhati Bhattacharya said the cut in lending rates can only happen when credit picks up. "What the banks are waiting for is a little bit more of a sign of a credit pick-up.

Whatever we say, when we cut the lending rates our income comes down and we need some other ways of making up that income to keep paying interest on deposits. That can always happen if the credit growth is quite robust and volume picks up. But when the volumes are very thin and if you are not seeing that kind of a clear pipeline, then it is very difficult to cut lending rates. So, I think most of us are waiting to see a little bit more of a pick-up in credit," Bhattacharya said on the sidelines of the bank launching the country's first economic indicator, SBI Composite Index today.

The credit growth is slowly inching up and is definitely better than the growth up to September, she said. "Retail growth is alright. On the corporate side also we are seeing a little bit growth now, though new projects are still a challenge," she added.

9:30 am Market outlook: Anand Tandon believes the fall may continue through the month of December. At the moment, the environment is such that valuations are still high and no economic recovery has been seen on the growth. At the same time, fund flows are good, but earnings growth assumptions need to be more realistic, he adds.

According to him, all this combined makes for a bearish position on the market. He believes it will be a good idea to bet on domestic or economic play, but not too much. However, he is not in a hurry to buy any sector or companies. He says if an investor or trader is planning to bet on the domestic consumption theme, then one must remember that the rupee has been weakening.

The market has opened in red amid global turmoil. The Sensex is down 25.40 points at 27771.61 and the Nifty is down 22.65 points at 8318.05. About 284 shares have advanced, 267 shares declined, and 31 shares are unchanged.

Bharti is up 2 percent while Dr Reddy's Labs, Wipro, Hero and ITC are top gainers in the Sensex. Among the losers are Tata Motors, SBI, Sesa Sterlite, GAIL and BHEL.

The Indian rupee opened with marginal loss of 8 paise at 61.96 per dollar versus previous day's closing value of 61.88 a dollar.

The dollar nursed hefty losses following a brutal shakeout of bullish positions. Spooking markets, political uncertainty in Greece appeared to have reignited worries about Europe, prompting a flight to safety into US treasuries. That drove yields lower, which in turn knocked the dollar index off a near six-year perch.

NS Venkatesh of IDBI Bank expects the rupee to take the cues from the equity markets and also the external developments on dollar vis-a-vis other currencies. "The rupee is expected to trade within a narrow range of 61.70-61.95/dollar," he says.

Among global markets, US stocks ended mixed, with the Nasdaq composite rallying after stiff losses. In Europe, shares were hard hit, closing sharply lower as a slide in Chinese and Greek equities weighed on investor sentiment.

Greek stocks closed nearly 13 percent lower, after the country's Prime Minister shocked investors by announcing a snap presidential vote for next week. Greece's bank stocks were among the worst hit by the rout, with the National Bank of Greece closing down around 20 percent and Attica Bank, down 26 percent.

Asian markets, too, extended yesterday's sell-off to trade at one-week lows, taking cues from an uninspiring finish on Wall Street.

In commodities, crude prices remain choppy after industry data showed an unexpected rise in crude stockpiles in the US.

From precious metals space, gold rose nearly 3 percent, hitting its highest since late October, as cautious comments from the US Federal Reserve policymakers prompted a sharp pullback in the dollar.