Nifty ends at 8102, Sensex drags 79 points; HUL gains 3%
07 January 2015
03:30 pm Market close
After a volatile day, the market ended with marginal losses. The Sensex was down 78.64 points at 26908.82 and the Nifty slipped 25.25 points at 8102.10. About 1360 shares have advanced, 1500 shares declined, and 439 shares were unchanged.
HUL was up 3.5 percent while Reliance, NTPC, Maruti and ONGC were other gainers in the Sensex. Hindalco, ICICI Bank, GAIL, BHEL and ITC were among major losers.
03:00 pm Oil Price
Oil prices will continue to drop as high production meets weak demand and a strong U.S. dollar pressures crude, and markets will only pick up once major manufacturing economies particularly in Asia feel the benefit of cheaper energy.
Oil prices have halved since last June to near 6-year lows as economic growth stutters, and analysts say that a building supply glut means prices are set to fall further before any rebound.
On the supply side, downward pressure on oil has come from a boom in U.S. shale oil output and, more recently, by the Organization of the Petroleum Exporting Countries' (OPEC) decision not to cut output in support of prices, and instead try to defend market share against North American shale by offering discounts.
02:30pm Coal India in Focus
Coal India struggled to produce and ship less than half of its daily target on the first day of a five-day worker strike that began on Tuesday, hampering government efforts to reform the country's coal industry and ease its power crisis.
Unionized miners at the world's top coal producer are protesting Prime Minister Narendra Modi's move to allow private companies to mine and sell the fuel for the first time in 42 years. Modi's ministers have said that increasing competition is key to ending India's power shortage.
But miners fear this will lead to pay and job cuts at Coal India, which has come to be seen as an exemplar for deep-rooted inefficiency in state enterprise.
Union leaders met top Coal Ministry officials for three hours on Tuesday evening but did not reach an agreement, said S.Q. Zama, secretary general of the Indian National Mineworkers Federation.
Zama said unions would end the strike if the government assured them that private companies would not be allowed to do any commercial mining for at least the next six months and that more talks would take place before the industry was opened up.
The leaders of Coal India's five trade unions are in New Delhi for more "political" talks, Zama said, reports PTI.
02:00pm Market Check
The market remained volatile today after a 3 percent cut in previous session. In fact, there has not been any recovery after that yesterday's carnage. Indices trimmed losses in afternoon trade after seeing a 211 points intraday fall.
The 30-share BSE Sensex declined 17.72 points to 26969.74 and the 50-share NSE Nifty declined 4.15 points to 8123.20. About 1168 shares have advanced, 1491 shares declined, and 462 shares are unchanged on the Bombay Stock Exchange.
Market experts are not too worried about the correction. Ridham Desai of Morgan Stanley expects more volatility ahead but expects earnings to pick up in the next two quarters. Geoff Lewis of JPMorgan too continues to be positive on Indian market. Arvind Sanger of Geosphere, though sounds a cautious note, says will buy into India on dips.
The biggest talking point of the today is Brent crude that fell below USD 50 a barrel for the first time since May 2009 on supply glut worries. Seth Kleinman of Citi says crude will find a bottom at these levels and that crude demand is fine, not a big worry. Brent crude currently declined 1.86 percent to USD 50.15 a barrel and US crude lost 1.42 percent to USD 47.25 a barrel.
The rupee gained strength, rising 22 paise to 63.34 a dollar on fresh selling of dollar by banks on hopes of resumption of capital inflows.
HUL extended gains in afternoon trade, up nearly 4 percent as Credit Suisse and JP Morgan upgraded the stock after a fresh upgrade from Deutsche Bank yesterday.
1:50 pm Market outlook: Pankaj Pandey, Head of Research at ICICI Direct expects earnings to grow at about 17 percent CAGR in 2015 and has set the Nifty target at 9750.
However, in a bear case scenario he feels the Nifty can correct up to 6900 kind of levels if freefall in crude prices continue. ''That may pose challenges to oil exporting economies and probably might sort of culminate into some kind of financial crisis,'' he told CNBC-TV18.
Pandey expects a 17-18 percent kind of market returns this year compared to 30 percent last year. ''In shorter term, markets may oscillate in the range of 8000-8150 to 8626,'' he said.
1:30 pm Upgrades: Shares of HUL has extended its gain from yesterday after a slew of upgrades following Deutsche Bank. The stock was up 4 percent intraday and gained 6 percent year-to-date.
Credit Suisse upgraded the FMCG major to outperform from neutral rating. It has increased its target price to Rs 915 from Rs 800 earlier. Earnings is revised by 4 percent to build in lower input costs and hopes to see 21 percent CAGR over Fy15-17.
JP Morgan has also hiked its rating to neutral and target price to Rs 790 per share on expectation of gradual volume growth recovery over Fy16 and better margin outlook aided by moderating input costs.
The market is still sluggish as the Nifty is somehow managing to hold above the 8100-level. The 50-share index is down 10.50 points at 8116.85. The Sensex is down 34.49 points at 26952.97. About 1067 shares have advanced, 1512 shares declined, and 467 shares are unchanged.
HUL is still up 3 percent folowed by other gainers like Reliance, NTPC, Bajaj Auto and M&M. Losers include BHEL, GAIL, ICICI Bank, Hindalco and Tata Steel. Oil & gas index is up 1 percent.
Crude oil futures prices today fell by another 0.46 percent to Rs 3,055 per barrel, as speculators engaged in reducing exposures amidst a mixed trend in the Asian trade. The trading sentiment turned weak in futures trade here with crude prices lingering at their lowest levels in five and a half years on fears of fresh global turmoil over a political crisis in Greece, analysts said.
12:45pm Market Recovers
The market recouped losses in afternoon trade with the Nifty clawing back above the 8100 level supported by Reliance Industries, HDFC and HDFC Bank The Sensex declined 48.73 points to 26938.73 and the Nifty slipped 8.55 points to 8118.80.
About 968 shares have advanced, 1602 shares declined, and 455 shares are unchanged on the BSE.
12:35pm TC sends back TRAI recommendations
Inter-ministerial panel Telecom Commission (TC) has decided to send back TRAI's recommendations on 3G spectrum pricing for a reconsideration.
According to sources, TC today discussed Trai's proposals on 2100 MHz band base price, used for 3G services, in its meeting and decided to send back the recommendations for a review.
The Telecom Regulatory Authority of India (TRAI) on December 31 had recommended a base price at Rs 2,720 crore per megahertz.
An internal committee of the Department of Telecom (DoT) is believed to have suggested fixing base price of 3G spectrum at Rs 3,899 crore per megahertz, about 43 per cent higher than the rate recommended by TRAI.
"The committee is of the view that market determined price of 2010 should be indexed using SBI PLR and 80 percent of that price can be fixed as reserve price for 2100 Mhz band (used for 3G services)," a source said, reports PTI.
12:20pm Market Expert
Contrary to the widely held view that sees a fall in crude prices to be a negative for the global markets, Geoff Lewis, ED, JPMorgan Asset Management believes lower oil prices are very good for energy importers like India. According to him, the fall in crude price does not signal lower global growth.
Germany is making contingency plans for the possible departure of Greece from the euro zone. Speaking to CNBC-TV18, Lewis says the probability of Greek exit is low and is around sub-10 percent.
Going ahead, Lewis continues to remain bullish on the Indian market. Money seems to be coming to India on a fairly regular basis and there is solid growth opportunity, he concludes.
12:00pm Market Check
The market remained under pressure with the Nifty struggling below 8100 level as capital goods, healthcare, select oil & gas and metal stocks took a hit. The broader markets too gave up all their early gains, trading 0.5 percent lower.
The Sensex declined 174.22 points to 26813.24 and the Nifty fell 49 points to 8078.35. About 893 shares have advanced, 1600 shares declined, and 454 shares are unchanged on the Bombay Stock Exchange.
Market experts are not too worried about the correction. Ridham Desai of Morgan Stanley expects more volatility ahead but expects earnings to pick up in the next two quarters. Geoff Lewis of JPMorgan too continues to be positive on Indian market. Arvind Sanger of Geosphere, though sounds a cautios note, says will buy into India on dips.
Asian markets are mixed amid choppy trade as concerns over lower oil prices persist. Brent crude continued to trade around USD 50 a barrel on supply glut worries.
Indian crude basket fell by USD 2.31 to USD 49.22 a barrel yesterday.
Lower oil prices continued to impact stocks like GAIL and Cairn, down 3 percent each. Media report suggested that gas transmission company GAIL postponed LNG tender date as it found no takers.
HUL continued its gains from yesterday, up 3 percent. Infact it is the top gainer today as brokerage upgrades pour in. In previous session, Deutsche Bank upgraded the stock to buy with a target price of Rs 900 and today Credit Suisse and JP Morgan followed suit. Credit Suisse upgraded the stock to outperform from neutral with an increased target price at Rs 915 from Rs 800 earlier and also upgraded earnings by 4 percent to build in lower input costs. JP Morgan upgraded the stock to neutral with a December 2015 target price of Rs 790.
Kotak Mahindra Bank and ING Vysya Bank are in focus. Both banks will hold their extraordinary general meeting today for approving the USD 2.5 billion all stock deal between the two. Both stocks gained 2 percent each.
ONGC managed to gain, up 0.9 percent. UBS says ONGC is relatively better positioned than global emerging market upstream oil state owned entities. Valuations are at trough levels on enterprise value/EBITDA and price to book value, according to the brokerage. UBS has a buy rating on the stock. "It is among our top picks with a target price of Rs 480," it adds.
11:55 am P&E deals: Although global investors have a long-term positive outlook for India, Renuka Ramnath, Founder and CEO, Multiples Alternate Asset Management is not very optimistic on capital markets, as she does not see same enthusiasm in private equity (PE) deals as seen in 2005.
However, the asset management company anticipates an opportunistic strategy in 2-3 years backed by window of opportunity seen in corporate restructuring. Sectorally, they currently do not see any opportunities in the infrastructure space as the sector is yet to see a revival, Ramnath says in an interview to CNBC-TV18. Even as balance sheet re-engineering may attract fresh capital, recalibrating balance sheet might be an issue for infrastructure companies, she adds.
11:45 am Market outlook: India's macro economic environment is improving, but it is still not past the point where it can ignore the developments in global markets, feels Ridham Desai of Morgan Stanley.
In an interview to CNBC-TV18, he says there is a deflation scare globally and that could hurt India in the short term. But the medium term outlook on India remains solid, and that investors should look at corrections as a buying opportunity. Overall, the mood about India is positive and foreign investors are looking to add to their India portfolio, says Desai. He expects corporate earnings growth to pick up after the next couple of quarters. He is bullish on capital goods, banks and consumer discretionary stocks like autos. He says the positives from an imporving economy has still not been priced in capital goods and bank stocks.
11:32 am Market check: The Sensex is down 150.30 points or 0.6 percent at 26837.16 and the Nifty is down 42.40 points or 0.5 percent at 8084.95. About 1015 shares have advanced, 1341 shares declined, and 466 shares are unchanged.
11:30 am Buzzing: Shares of GAIL slipped 3 percent intraday as it failed to find any takers for its Rs 42,370 crore tender to hire newly-built LNG ships. The state-owned gas utility GAIL has for the third time postponed the last date of bidding.
Earlier in August, GAIL floated a global tender to charter nine newly built ships for transportation of natural gas in its liquid form at sub-zero temperature from the US. The tender, however, required bidders to build one-third of the ships in India, a condition that has found no takers.
The company first postponed the last date of bidding from October 30 to December 4 and then to January 6. Now it had put it off till February 17, according to a notice issued by GAIL.
GAIL had originally not been in favour of the condition but fell to oil ministry's dictate once it was threatened with a Presidential directive. The company board had on April 4, last year, approved hiring of up to 11 new build LNG ships.
11:22 am Market check: The market is again falling prey to selling pressure.The Sensex is down 72.69 points at 26914.77 and the Nifty is down 18.70 points at 8108.65. About 1150 shares have advanced, 1175 shares declined, and 458 shares are unchanged.
The market recovers after the steep fall on Tuesday. The Nifty is up 2.05 points at 8129.40. The Sensex is down 5.43 points at 26982.03. About 1251 shares have advanced, 977 shares declined, and 465 shares are unchanged.
HUL continues its gains from yesterday as brokerage upgrades continue. After Deutsche Bank upgraded the stock to buy with a target price of Rs 900 and Credit Suisse and JP Morgan followed suit. Credit Suisse upgraded the stock to outperform from neutral with a target price raised to Rs 915 versus Rs 800 earlier. JP Morgan upgraded the stock to neutral with a December 2015 target of Rs 790.
Other gainers in the Sensex are NTPC, M&M, Reliance and ONGC. GAIL is down 3 percent, ICICI Bank, BHEL, Tata Motors and Dr Reddy's Labs are losers.
Globally, Asian markets recover intraday in choppy trade as markets are still concerned on lower oil prices. The Nikkei bounced back on a weaker yen. Brent crude continues to trades around USD 50 on supply glut.
10:30am Market Expert
The market will continue to do reasonably well in 2015 and there is no reason to worry despite the bloodbath seen in the market yesterday, says Dhirendra Tiwari, head of research, Antique Institutional Equities.
According to Tiwari, the huge sell-off in the market on Tuesday was way too dramatic and such things do happen over the period of time so there is no reason to worry about this fall. With macros improving and government reforms on track, global turmoil is the only concern.
In an interview to CNBC-TV18, Tiwari says cyclicals will outperform defensives and export sectors now. In the next two-three months market might see some correction but that must be used as a buying opportunity. He also expects good opportunities in sectors like banks, capital goods and automobiles in 2015.
10:00am Market Check
The market entered into a consolidation mode after a 3 percent cut seen in previous session. Metals and healthcare stocks were under pressure while oil & gas, select banks and technology shares gained.
The Sensex rose 58.09 points to 27045.55 and the Nifty climbed 23.15 points to 8150.50. The BSE Midcap and Smallcap indices outperformed benchmarks, rising half a percent each. About 1147 shares have advanced, 709 shares declined, and 445 shares are unchanged on the Bombay Stock Exchange.
Arvind Sanger of Geosphere Capital feels the Nifty easily has room to slide another 5-7 percent because of adverse Nifty cues. He sees elections in Greece, a likely exit of that country from the European Union and concerns over a possible rate hike in the US as the major factors weighing down global markets in the short term.
In an interview to CNBC-TV18, Sanger says a failure on the part of the European Central Bank to deliver on quantitive easing (QE) and a possible victory for the opposition part in Greece could undermine sentiment further. He says the market will be closely watching the minutes of the last Fed meeting, to be released on Thursday.
Sanger sees the Nifty slipping below 8000, and says he will use the opportunity to selectively buy stocks he is bullish on.
Reliance Industries gained 1.5 percent as media report suggested that the company is in race to supply diesel to Indian Railways. HUL gained another 3 percent in addition to 2 percent upside in previous session.
TCS, Infosys, HDFC Bank and State Bank of India rebounded with half a percent gains while GAIL topped the selling list after media report suggested that the state-run gas transmission company postponed LNG tender date as it finds no takers. ICICI Bank, Tata Motors and BHEL declined 1.5 percent each.
9:55 am Buzzing: Shares of Dena Bank were up 1.5 percent intraday as it is planning to raise funds.The state-owned bank is looking to raise Rs 1,000 crore from bonds to fund its growth plans.
The bank is planning to raise Basel-III compliant Additional Tier 1 (AT1) bonds for an amount of Rs 1,000 crore, through private placement, Dena Bank said in a statement.
Under the Basel-III norms, AT-1 bonds come with loss absorbency features, which means in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI.
9:35 am FII view: Arvind Sanger of Geosphere Capital feels the Nifty easily has room to slide another 5-7 percent because of adverse Nifty cues. He sees elections in Greece, a likely exit of that country from the European Union and concerns over a possible rate hike in the US as the major factors weighing down global markets in the short term.
In an interview to CNBC-TV18, Sanger says a failure on the part of the European Central Bank to deliver on Quantitive Easing (QE) and a possible victory for the opposition part in Greece could undermine sentiment further.
He says the market will be closely watching the minutes of the last Fed meeting, to be released on Thursday. Sanger sees the Nifty slipping below 8000, and says he will use the opportunity to selectively buy stocks he is bullish on.
9:22 pm Market check: The Sensex is up 16.67 points at 27004.13 and the Nifty is up 6.65 points at 8134.00. About 808 shares have advanced, 403 shares declined, and 430 shares are unchanged.
HUL is up 2 percent, Coal India, TCS, Sesa Sterlite and Reliance are top gainers in the Sensex. BHEL is down 1.5 percent.
After the carnage seen on Tuesday, the market has opened with marginal loss today. The Sensex is down 30.23 points at 26957.23 and the Nifty is down 8.70 points at 8118.65.
About 355 shares have advanced, 217 shares declined, and 416 shares are unchanged.
NTPC, Sesa Sterlite, TCS, SBI and Infosys are top gainers in the Sensex. Tata Motors, GAIL, L&T, BHEL and Tata Power are among the major losers.
The Indian rupee opened marginally higher at 63.51 per dollar against previous close of 63.57.
The euro slips to a nine-year low against the dollar early as investors brace for Eurozone inflation data. The data due later in the day is expected to show consumer prices in the euro zone fell in December year on year, the first such drop since 2009.
Himanshu Arora of Religare Commodities said, "USD-INT pair is expected to trade higher today amid consistent strength in dollar against basket of currencies along with unrelenting slide in oil prices and ongoing political uncertainty in Greece."
"UK Services PMI witnessed its largest plunge in more than three years in December. This may also contribute towards weakness in rupee against the dollar. USDINR may remain in 63.40-63.76 range," he added.
In the US, stocks recovered a portion of their losses but still closed lower. The S&P 500 closed above 2,000 after falling below the level for the first time in nearly four weeks. The CBOE volatility index climbed 6 percent to 21.12. Meanwhile the 10-year treasury yield fell 9 basis points to 1.94 percent.
Meanwhile, falling prices of crude oil put pressure on European markets with commodities continuing to be a main driver of global markets. In the UK, Markit's PMI index for just the services sector hit a 19-month low and suffered its biggest decline in more than three years.
In commodities, Nymex crude futures held little changed near 5.5-year lows amid continued worries over a supply glut. Brent too traded around USD 50 per barrel.
From precious metals space, gold jumped more than 1 percent to a three-week high, extending gains on safe-haven buying as stock markets slid.