Nifty ends above 8200, Sensex flat; HDFC up 5%, TCS dips 3%
15 December 2014
03:30 pm Market closing Continuing its sluggish mode, the market ended flat. The Sensex was down 31.12 points at 27319.56 and the Nifty was down 4.50 points at 8219.60. About 1178 shares advanced, 1728 shares declined, and 108 shares were unchanged. HDFC rose 5 percent while Coal India jumped 4 percent. ONGC, Hero and HDFC Bank were other top gainers in the Sensex. TCS losr 3.5 percent. Among other laggards were Sesa Sterlite, HUL, Tata Steel and Axis Bank.
03:10 pm Slump Tumbling oil, coal and iron ore prices are now all at levels last seen during or before the financial crisis of 2008/2009, signalling not only the impact of a glut of supplies but deeper weakness in parts of the global economy, analysts say.
The raw materials are among the most sensitive to economic health, with oil and coal the world's two most important energy sources and iron ore used to make steel. Brent crude prices have almost halved since June to slightly above USD 60 a barrel, a level last seen in early 2009 during the financial crisis.
In the coal market, the benchmark European futures contracts has dropped below $70 a tonne to levels comparable before the boom and bust of 2007-2009. Iron ore prices have halved to under USD 69 a tonne as demand growth in the biggest market, China, wanes. Analysts initially pointed to rising oil and mining output, as well as energy efficiency and alternative sources such as renewables, as the main factors behind the drops.
02:52pm Ranbaxy in News Drug firm Ranbaxy Laboratories has received regulatory nod to launch its indigenously developed anti-malarial drug Synriam in 7 African nations.
The company has received regulatory approval to launch its first New Chemical Entity (NCE) Synriam in seven African countries -- Nigeria, Uganda, Senegal, Cameroon, Guinea, Kenya and Ivory Coast, Ranbaxy Laboratories said in a statement.
The product has already been launched in Uganda and will be made available in other six countries towards the end of January 2015, it added.
Commenting on the development, Ranbaxy CEO and MD Arun Sawhney said: "Most malaria cases and deaths occur in sub-Saharan Africa... Synriam is among the best options available today as it is highly effective, affordable and a convenient therapy option, leading to better compliance." The company is confident that the drug will help the government and healthcare system in Africa to fight the menace of malaria, he added, reports PTI.
02:25pm Interview Farid Kazani, group chief financial officer and director-finance, Mastek says the company will list its insurance business on the New York Stock Exchange (NYSE) after the CoverAll merger gets completed. In an interview to CNBC-TV18, Kazani says the entire transaction will be earnings per share (EPS) accretive.
Kazani further adds that Mastek will be a solution company after demerging the insurance business. The decision to merge the two businesses is the latest step in the execution of Majesco's aggressive growth strategy to consolidate its global insurance business under a single and separate entity, Mastek said in a press release.
02:00pm Market Check The market remained in a consolidation mode in afternoon trade. The Sensex declined 12.92 points to 27337.76 and the Nifty fell 0.05 points to 8224.05. About 1103 shares have advanced, 1645 shares declined, and 107 shares are unchanged on the Bombay Stock Exchange. Sanjeev Prasad of Kotak Institutional Equities says one should not get perturbed by market fall.
Use every dip to buy this market, he advises. He is bullish and recommends a buy on banks and auto names. Case for a rate cut rises as November WPI came in at 0 percent, a five-year low, down from from its October level of 1.77 percent led by a drop in fuel prices. Fuel inflation went down 4.9 percent reflecting the sharp plunge in global crude prices.
The rupee weakened to a fresh ten-month low of 62.70 on the back of large corporate dollar demand. HDFC and Kotak Mahindra Bank topped the buying list, up 4-4.5 percent. Globally, Asia were mostly in the red reacting to the weak US close, continuing slide in oil prices and decline in manufacturing sentiment in Japan. Japan is also in focus on account of Prime Minister Shinzo Abe winning the snap election over the weekend.
1:50 pm Buzzing: Shares of Career Point are locked at 20 percent upper circuit after its subsidiary received licence from RBI for setting up non-banking financial institution. "Reserve Bank of India has granted certificate of registration to Srajan Capital (a wholly owned subsidiary company of Career Point) to commence/carry on business of non-banking financial institution," said the company in its filing. Career Point, which incorporated in 1993, provides education to students preparing for various competitive examinations.
The company has diversified business operations with multiple product offerings including Test Preparation, Schools (Pre-schools and K12), Technical Campuses, and Private Universities in multiple geographies.
1:30 pm Tower sale: Bharti Airtel, through its subsidiary is going to sell and lease back over 1100 towers in Zambia and Rwanda to African company IHS, under a 10-year renewable contract. According to Bharti, the agreement will allow the telecom major to focus on its core business and customers, enable it to deleverage through debt reduction, and will significantly reduce its on-going capital expenditure on passive infrastructure in these African markets. The agreements are subject to statutory and regulatory approvals.
The market does not seem to be out of the slumber mode. The Sensex is down 67.88 points at 27282.80, and the Nifty is down 16.85 points at 8207.25. About 1035 shares have advanced, 1585 shares declined, and 109 shares are unchanged. HDFC is still up 4 percent while Coal India, ONGC, Hero MotoCorp and Sun Pharma are top gainers in the Sensex. TCS, Sesa Sterlite, Cipla, GAIL and Infosys are among the laggards.
Wholesale price inflation hit a zero level in November, the lowest in about five and half years, on account of decline in prices of food, fuel and manufactured items. The Wholesale Price Index (WPI) based inflation was at 1.77 percent in October and 7.52 per cent in November 2013. As per data released by the government today, the food inflation fell to nearly three year low of 0.63 percent. Food inflation is on decline since May.
This is probably the first time when WPI inflation has hit exact zero level. The last time WPI was lower than this was (-)0.3 per cent in July 2009.
12:55pm Career Point shares in demand Shares of Career Point are locked at 20 percent upper circuit today after its subsidiary received licence from RBI for setting up non banking financial institution. "Reserve Bank of India has granted certificate of registration to Srajan Capital (a wholly owned subsidiary company of Career Point) to commence/carry on business of non banking financial institution," said the company in its filing.
12:40pm Nikkei Update Japanese stocks fell to their lowest in four weeks today as oil prices tumbled to a new 5-1/2 year low, hitting Wall Street shares and stoking fears of weak global growth. The Nikkei benchmark lost 1.6 percent to close at 17,099.40 points, its lowest since Nov. 17. Prime Minister Shinzo Abe's ruling coalition scored a landslide in Sunday's general election, as expected.
But The victory, which gives the Japanese premier a fresh mandate for market-friendly growth policies, failed to cheer investors as his reflationary strategy to end 15 years of deflation has had only modest success so far. Exporter shares suffered, with Toyota Motor Co and Mitsubishi Motors Corp losing 2.5 percent and 4.0 percent, respectively. The broader Topix slipped 1.5 percent to 1,379.29, while the JPX-Nikkei Index 400 also lost 1.4 percent to 12,518.29, reports Reuters.
12:20pm Brent crude Update Brent crude gave up some of its gains and dropped toward USD 62 a barrel today in volatile trading, which saw prices fall to a 5-1/2 year low after the IEA cut its outlook and then rise more than a dollar on hopes of improving manufacturing data. Brent for January delivery LCOc1 was at USD 62.05 a barrel at 0425 GMT (11:25 p.m. EST), up 20 cents from its Friday's settlement but 90 cents below the intra-day high of USD 62.95 a barrel. Earlier, Brent fell to near USD 60 after the International Energy Agency forecast further price falls and OPEC's chief defended the group's decision not to cut its output target.
US crude for January delivery CLc1 was trading at 57.88 a barrel, almost flat with its last settlement, after hitting a low of USD 56.25 earlier in the day - the lowest since May 2009. The volatile trading was a result of conflicting factors, with economic indicators supporting prices while supply factors acted as price breaks, reports Reuters.
12:00pm Market Check Equity benchmarks gained marginal strength in noon trade following sharp fall in WPI inflation at 0 percent in November compared to 1.77 percent in October. The Sensex rose 22.94 points to 27373.62 and the Nifty climbed 11.05 points to 8235.15, supported by banking & financials stocks. About 1081 shares have advanced, 1372 shares declined, and 84 shares are unchanged on the Bombay Stock Exchange.
The Indian rupee fell 36 paise to 62.67 per dollar. Housing finance company HDFC extended gains, up 4 percent. A media report suggested that Standard Life is planning to increase its stake in joint venture HDFC Standard Life Insurance company to 33 percent from 26 percent. HDFC holds 72.4 percent in JV. Private sector lender HDFC Bank and its rival State Bank of India gained 1 percent each.
Coal India surged 2.5 percent while two-wheeler majors Hero Motocorp and Bajaj Auto climbed over half a percent. However, technology stocks remained under pressure post TCS provided bearish Q3 outlook. The stock fell more than 3 percent as the software services provider says it expects a weak quarter from BFSI and sees negative 220 basis points impact due to cross currency. Infosys slipped nearly a percent while Wipro trimmed losses from 2 percent to 0.4 percent.
11:50 am Interview: KV Kamath, non-executive chairman, ICICI Bank says that government signals are not transmitting to the ground and to get growth back the country will need much deeper rate cuts. According to him, the twin deficits are now under control and there is no worry on that front.
''I think inflation is also on a downward trend and now you have growth which is also negative which ought not to have been. So I would think all the ingredients for a rate cut are there,'' Kamath adds. He further says that the call is entirely on the Reserve Bank of India now, and if the economy has to really get back to 10 percent trajectory, rate cut will have to be much deeper than what has being discussed so far.
11:30 am Market outlook: Sanjeev Prasad of Kotak Securities feels macro-economic recovery and impending interest rate cuts are the two key themes that investors should look to play. He says good quality names in auto and banking sectors should be bought. He is bullish on IT despite December quarter earnings likely to be impacted by adverse cross currency movements.
He says there is value emerging in stocks like Wipro and Tech Mahindra . He says investors should not read negatively into the stake sale by Infosys promoters. Prasad says India is a good growth story and that banks would be the best stocks to play the cyclical recovery. He is advising clients to look at stocks like Havells India and TTK Prestige from a medium term perspective.
The market continues to be sluggish as the Sensex is down 30.48 points at 27320.20. The Nifty is down 3.60 points at 8220.50. About 1014 shares have advanced, 1212 shares declined, and 79 shares are unchanged. HDFC, Coal India, BHEL, SBI and NTPC are top gainers in teh Sensex. Among the losers are TCS, GAIL, Cipla, Wipro and HUL. Crude oil futures fell by 0.32 percent to Rs 3,669 per barrel today as traders trimmed positions amid a weakening trend in Asian trade where it sank to a fresh five-year low.
The trading sentiment eased at futures trade after crude oil prices dipped to a fresh five-year low in Asian trade today, analysts said. Gold futures fell 0.50 percent to Rs 27,024 per 10 grams today as participants indulged in reducing exposures, largely in line with a global trend. Analysts said a weakening trend overseas ahead of Federal Reserve meets to assess a pledge to keep borrowing costs low for a considerable time and provide guidance on the outlook for monetary policy, weighed on gold prices at futures trade.
10:45am Interview The recent market correction is in small parts a year-end profit-taking activity but mostly a sell-off on concerns over global crude demand, says Nitin Jain, principle investment manager, Kotak Mahindra Bank. Oil prices hit five-and-a-half-year lows after the International Energy Agency (IEA) predicted demand next year would be lower than expected. Speaking to CNBC-TV18, Jain says the fall in oil prices will benefit India and that we must capitalize on the same.
Furthermore, Jain adds India's growth will improve only if the government takes necessary policy action soon. ''Coal auction should go through by March. That will lead to a significant demand. If strong policy actions are taken, then we can see 15-20 percent earnings growth,'' adds Jain. Jain prefers buying paint stocks given the fall in oil prices as well as consumer durables.
10:30am Market Expert CK Narayan, managing director, Growth Avenues says the Nifty has a good support at 8250 and it is likely to head back to 8,500-8,600 by expiry-end. In an interview to CNBC-TV18, Narayan says investors should use the current fall in market to buy quality stocks on dips.
10:15am Reliance Capital in focus Anil Dhirubhai Ambani Group company Reliance MediaWorks has sold multiplex business to south-based Carnival Cinemas. This transaction will reduce Reliance Capital's debt by Rs 700 crore. Real estate owned by company at IMAX Wadala and properties worth Rs 200 crore are not included in the deal.
Reliance Capital will retain option to buy pre-IPO stake in Carnival. The stock gained 0.4 percent. Reliance Capital held 18.76 percent stake and Reliance Land Private Limited 72.81 percent stake in Reliance Mediaworks (which got delisted), as of March 2014.
10:00am Market Check The market recovered its early losses with the Sensex falling just 19.84 points to 27330.84 and the Nifty getting back above the 8200, down 1.90 points. The Sensex was opened with more than 200 points losses. The broader markets pared losses too. The BSE Midcap turned positive and Smallcap was flat.
About 842 shares have advanced, 1046 shares declined, and 89 shares are unchanged on the Bombay Stock Exchange. Housing finance company HDFC gained nearly 2 percent after a media report suggested that Standard Life is planning to increase its stake in joint venture HDFC Standard Life Insurance company to 33 percent from 26 percent. HDFC holds 72.4 percent in JV. Shares of ONGC, State Bank of India, BHEL and Tata Power advanced more than a percent followed by ITC and ICICI Bank with 0.4 percent gains. However, technology stocks remained under pressure post TCS provided bearish Q3 outlook.
The stock fell more than 3 percent as the software services provider says it expects a weak quarter from BFSI and sees negative 220 basis points impact due to cross currency. Infosys slipped nearly a percent and Wipro lost 2 percent. Shares of Cipla, Dr Reddy's Labs and Sesa Sterlite declined over a percent followed by Reliance Industries, Bharti Airtel, Maruti Suzuki and HUL with 0.4-0.8 percent losses.
9:55 am Market check: The market pares down its earlier losses. The Sensex is down 54.83 points at 27295.85 and the Nifty is down 15.15 points at 8208.95. About 775 shares have advanced, 1073 shares declined, and 68 shares are unchanged. HDFC, ONGC, Tata Power, SBI and NTPC are top gainers while TCS, Wirpo, Cipla, Dr Reddy's Labs and Infosys are losers in the Sensex.
9:30 am Market outlook: Udayan Mukherjee feels the market has been trading at fairly important support levels right now around that 8200 level on the Nifty and it should have held out had it not been the ''additional burst of global turbulence''.
He sees Nifty under pressure from two heavyweights – upstream oil and IT. ''The serious medium term support is still between the 7700 and 7800, which we did not violate in the last correction,'' he said. He does not see the index breaking that level unless there is mayhem in global market. Udayan sees a bounce back in market from the current levels in the first quarter of next year and does not rule out Nifty at 9000 by the Union Budget if global markets stabilise.
The market has opened on a weak note, dragged by weak global cues. The Sensex is down 229.07 points or 0.8 percent at 27121.61 and the Nifty is down 63.35 points or 0.7 percent at 8160.75. About 189 shares have advanced, 484 shares declined, and 34 shares are unchanged.
TCS is down 3 percent while Infosys, Bharti, GAIL and Sesa Sterlite are among the laggards in the Sensex. NTPC is the only gainer in the Sensex. The Indian rupee declined in the opening trade. It has slipped by 21 paise at 62.50 per dollar against 62.29 Friday.
The dollar cut its losses against the euro, extended gains against the yen and reached an 11-year high against the Norwegian Crown on plunging oil prices. Agam Gupta of Standard Chartered said, "Expect capital inflows to remain muted as the market is moving into year-end mode. We can see some dollar buying from FIIs who have India exposure. Exporters are likely to sell into any upticks and demand for the dollar will emerge from local importers on any downticks to Rs 62.35/dollar." Asian stocks kick started the week on back foot, tracking sharp declines on Wall Street, as investors fretted about the relentless slide in oil prices and declining manufacturing sentiment in Japan.
The Dow and S&P ended Friday's session down over a percent and a half each. The Nasdaq also lost over a percent. European stock markets too closed sharply lower on Friday, posting their biggest weekly loss since august 2011, as commodity prices continued to fall and shares in oil-related firms came under renewed pressure from the weak price for crude. Brent crude futures fell as much as 2.5 percent to a new five-year low near USD 60 a barrel after the International Energy Agency forecasted further price falls and OPEC's chief defended the group's decision not to cut its output target. And gold held steady at around USD 1220 an ounce following a firm dollar.