Sensex ends down, Nifty below 8300; HUL soars 5%, ITC falls
14 January 2015
03:30 pm Market close
After a wild swing, the market ended lower. The Sensex ended down 78.91 points at 27346.82 and the Nifty slipped 21.85 points at 8277.55. About 1262 shares have advanced, 1602 shares declined, and 342 shares were unchanged.
HUL was up 5 percent while, BHEL, Infosys, Bajaj Auto and Maruti were top gainers in the Sensex. Among the losers were Sesa Sterlite, Hindalco, Tata Steel and ITC.
03:10 pm Infosys Sikka's fund for India
Infosys CEO Vishal Sikka today met Prime Minister Narendra Modi and disclosed that his company will spend USD 250 million (over Rs 1,500 crore) to fund innovations in software and services in India. The chief of India's second largest IT services firm also discussed with Modi ways in which the company can participate in the Prime Minister's vision of smart and digitally empowered India. Infosys will develop software for managing the kumbh mela scheduled in Ujjain (Madhya Pradesh) in 2016, he told PTI in an interview.
Sikka, the first non-founder CEO of Infosys, said Modi has agreed to dedicate the company's Mysore campus as the first model smart city in the country in April this year. "Today, I had a meeting with the Prime Minister. We had a talk on smart cities, smart infrastructure, which is close to his heart. And the other big area is innovation. PM has a vision for innovation. As announced last week, we have a USD 500 million Innovation Fund," he said.
02:50pm Market Update
The market slipped again in late trade. The Sensex lost 158.86 points to 27266.87 and the Nifty fell 45.75 points to 8253.65. Metals extended losses; Sesa Sterlite tanked 7.5 percent and Hindalco Industries plunged 7 percent. Tata Steel shed nearly 4 percent and ITC lost 3.5 percent.
About 1143 shares have advanced, 1649 shares declined, and 325 shares are unchanged on the BSE.
02:30pm Tata Teleservices in focus
The Reserve Bank of India has allowed conglomerate Tata Sons Ltd to buy Japanese telecom firm NTT DoCoMo Inc's stake in their struggling Indian venture, paving the way for the completion of the long-delayed USD 1.1 billion deal.
In a memo to the finance ministry dated December 22 seen by Reuters, the Reserve Bank of India (RBI) said it was "inclined to accept" the proposal from Tata to buy DoCoMo's stake of around 26 percent in Tata Teleservices Ltd at half the price DoCoMo originally paid for the investment. The RBI has requested for the finance ministry's view.
The RBI approval, also confirmed by a source directly involved in the process, is part of the government's bid to simplify and scrap some of the more obscure rules that have curbed foreign investment.
A rule change brought in last year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
"The larger issue here is of a fair commitment in the contracts in relation to an investment and a downside protection of an investment, rather than assured return," the central bank said in the memo.
"Besides, our strategic relationship with Japan in recent times in relation to FDI (foreign direct investment) flows is also a matter to be kept in view," it said.
DoCoMo said in July last year that it would sell its stake in Tata Teleservices. The seventh-biggest mobile phone carrier in India has been losing money in a hugely crowded market for years.
02:00pm Market Check
Equity benchmarks recouped losses. The Sensex fell 34.83 points to 27390.90 and the Nifty declined 18.95 points to 8280.45. About 1165 shares have advanced, 1542 shares declined, and 348 shares are unchanged on the BSE.
Shares of Infosys, HUL, ONGC and BHEL topped the buying list on Sensex, up 1-3 percent. Bajaj Auto gained 1.5 percent ahead of third quarter earnings, which is scheduled to be announced on Thursday. The two-wheeler maker's third quarter profit is expected to fall 6 percent Y-o-Y to Rs 850 crore for the quarter ended December 2014, according to CNBC-TV18 poll. Profit in the year-ago quarter was Rs 904 crore.
However, Hindalco Industries and Sesa Sterlite tanked 6 percent each followed by Tata Steel and ITC with 3 percent loss. Reliance Industries, ICICI Bank, Sun Pharma and Wipro fell over 1 percent.
1:55 pm Buzzing: Shares of Snowman Logistics jumped 9 percent intraday on Wednesday as investors are excited about its expansion plans. A media report suggests that the newly-listed cold storage company is in advanced talks to buy out two Bengaluru-based startups.
As part of its expansion plans, Snowman is going to acquire the start-ups which specialises in chopping vegetables, assembling sandwiches and burgers before sending them off to quick service restaurants (QSR).
The largest cold chain solutions provider raised Rs 197 crore through the IPO issue in September, which will be used for setting up new temperature controlled and ambient warehouses, and long term working capital.
1:30 pm Results: Yes Bank's third quarter (October-December period) profit climbed 30 percent to Rs 540.3 crore, driven by strong net interest income and other income. However, rise in provision limited profits to some extent. Net in the year-ago period was Rs 415.60 crore. Numbers were marginally higher than analysts' expectations. Profit was expected at Rs 516 crore and net interest income at 887 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
Net interest income, the difference between interest earned and interest expended, surged 36.6 percent on yearly basis to Rs 909 crore during October-December quarter. Other income (non-interest income) grew by whopping 38.4 percent to Rs 536.81 crore for the quarter.
The market is still under selling pressure. The Sensex is down 178.77 points or 0.6 percent at 27246.96 and the Nifty is down 48.30 points or 0.6 percent at 8251.10. About 1075 shares have advanced, 1535 shares declined, and 337 shares are unchanged.
What fails to cheer the market is better than estimated WPI data for December. Lower food and manufacturing products inflation support the data while clamour for a rate cut before the February RBI policy rises.
Hindalco, Sesa Sterlite, ITC, Tata Steel and GAIL are among the laggards while BHEL, HUL, Bajaj Auto, Infosys and Maruti Suzuki.
Commodity rout drags Asian markets lower today. Oil continues to trade near 6-year lows. Copper too slips to levels not seen since mid-2009. Gold slips from 12-week highsas concerns over a supply glut in oil and slowing consumption in China dampens sentiment.
11:45 am FII view: Investors should brace for lower returns this year after a heady 2014, as the high base effect will temper gains, says Gautam Chhaochharia, Head of Research, UBS Securities. He expects a few earnings downgrades near term, but sees strong earnings growth as the key trigger during the latter part of the year. He estimates an average earnings growth of 15 percent in FY16. According to Chhaochharia, economic growth could be gradual even as there are likely to be positive surprises on interest rates and inflation.
He says economic growth could even be lower than consensus estimates. He is positive on the banking sector in general, with a positive bias for state-owned banks. He sees banks as the best plays on coal and power sector reforms. Chhaochharia is overweight on oil and gas as he sees the sector to be a major beneficiary of reforms. His top picks in this space includes ONGC.
11:30 am Buzzing: Shares of ITC slipped 4 percent intraday as the government may ban sale of loose cigarettes. The government on Tuesday moved to amend the anti-smoking law and proposed radical changes, including a ban on the sale of loose cigarettes and raising the minimum age of a person buying tobacco products to 21 years from the existing 18.
It has also proposed raising of fine to Rs 1,000 from Rs 200 on smoking in public places as well as recommending removal of designated smoking zones in hotels and restaurants.
Health minister JP Nadda had told Rajya Sabha during the winter session that his ministry had accepted the recommendations of the committee formed to review the existing Act, and a draft note for the cabinet was circulated for inter-ministerial consultation.
The market is still flat waiting for some positive trigger by December quarter corporate earnings. The Sensex is down 45.03 points at 27380.70 and the Nifty slips 8.35 points at 8291.05. About 1251 shares have advanced, 1052 shares declined, and 327 shares are unchanged.
Cement stocks continue to gain today. Sanjay Ladiwala, in an interview to CNBC-TV18, said cement price increases are seen with logistics rather than demand being the reason for the price hike. Current capacity utilisation stands at 68 percent for Indian cement industry.
HUL, BHEL, Bajaj Auto, and HDFC twins are top gainers in the Sensex. Among the losers are Sesa Sterlite, Hindalco, ITC, Tata Steel and GAIL.
Globally, Asian markets are mixed as oil continues to trade at multi year lows. Gold slips from 12-week highs.
10:58am WPI inflation today
Inflation based on the Wholesale Price Index is estimated to come in at 0.3 percent in December as against zero in November, according to a CNBC-TV18 poll.
The range is expected to be between decline of 0.1 percent to a growth of 0.8 percent, which is extremely benign. Even core WPI estimate is around 2-2.2 percent which compares to 2.2 percent on month-on-month basis.
For WPI, as seen in case of CPI, too the base effect will begin wearing off as well. WPI in November 2013 was 7.5 percent, but it fell to 6.4 percent in December 2013, which signifies a favourable base effect.
The commodity impact also is more in case of WPI than CPI. Hence, WPI would see a softer stand on the fact that weightage of crude is 0.9 percent in total WPI, mineral oil is 9.3 percent which is crude derivative. So this will basically see a higher softening and because of crude oil price as oppose to what we saw in terms of CPI.
10:30am Oil dips further
Oil prices slipped further toward six-year lows in Asia after major crude producers stressed they will maintain output levels despite an oversupply.
US benchmark West Texas Intermediate (WTI) for February delivery was down 34 cents at USD 45.55 a barrel in late morning trade and Brent crude for February dropped 43 cents to USD 46.16.
Crude prices were already on the decline after peaking above USD 100 a barrel in June, but the fall accelerated from November 27 when the Organization of the Petroleum Exporting Countries decided to maintain output levels, reports PTI.
OPEC member United Arab Emirates yesterday underscored the cartel's resolve not to slash output in the face of the price rout and waning demand and urged the United States to cut its production of shale oil, which has been largely credited for the supply glut. "We cannot continue to be protecting a certain price," UAE Energy Minister Suhail al-Mazrouei said.
10:00am Market Check
The market remained in a consolidation mode in morning trade with the benchmark Nifty hovering around 8300 level while the broader markets marginally outperformed frontline indices.
The Sensex rose 3.31 points to 27429.04 and the Nifty advanced 1.75 points to 8301.15 while the BSE Midcap and Smallcap indices gained 0.4 percent each.
About two shares advanced for every share declining on the Bombay Stock Exchange.
According to Sandeep Shenoy of Pioneer Investcorp, new highs are not far away for the market but for the year, it could be flat or marginally negative as capital flow towards India is not seeing much improvement.
Hindustan Unilever, which snapped six-day rally in previous session, resumed rally again. The stock gained 2.4 percent followed by BHEL and Bajaj Auto with 1-2 percent gain. HDFC, Tata Motors, Infosys, HDFC Bank, TCS, L&T, M&M, SBI, Hero Motocorp and Maruti were up 0.4-0.9 percent.
However, ITC fell 2 percent on reports of likely ban on sale of loose cigarettes. Metals stocks lost shine with the Sesa Sterlite, Hindalco Industries and Tata Steel falling 2-3 percent.
9:55 am FII view: Adrian Mowat, JPMorgan says investors' fears entering 2015 include a sharp fall in oil prices signaling deflation and increasing the risk of defaults/fiscal stress, slowing growth in China, plus event risks such as Greek exit from the euro and Venezuelan EMBI spreads above 20 percent.
''Investors are less focused on lower energy prices driving faster real income growth. Countries that suffer from lower oil are just 22 percent of MSCI EM. This, combined with our call that correlation will remain low between countries, means we see more upside than downside in emerging markets (EM). We see current weakness as an opportunity to buy our overweight markets,'' he adds.
9:45 am Growth? India's consumer finance market is expected to grow at a compounded rate of 18 percent and become a USD 1.2 trillion opportunity by 2020, says brokerage house Credit Suisse.
''While the experience of the last consumer loan cycle (2004-07) was bitter, we believe that a number of structural changes in the market could allow for a steady, profitable growth in the next few years. In addition, the expected fall in rates should spur growth in rate-sensitive segments such as mortgages and auto loans,'' said the Credit Suisse note to clients.
''While the market still remains underpenetrated (70 percent + of households have no liabilities of any sort), the organised players (banks + NBFCs) have developed diverse products targeted at all segments of the income pyramid, across multiple secured/unsecured loan types,'' the note said.
9:30 am Big slump: Shares of Jet Airways slumped 6 percent intraday as investors concerns after Naresh Goyal pledged his shares. The main promoter and chairman has pledged his entire shareholding in the carrier of 51 percent, valued at over Rs 2,600 crore, to state-run Punjab National Bank.
The airline said Goyal has pledged his entire 57,933,665 shares constituting 51 percent holding in the airline effective January 8 to PNB with a "non-disposal undertaking". The reason for pledging of shares was not disclosed. UAE based Etihad holds 24 percent stake in Jet as a strategic partner while the remaining shares are owned by institutional and retail investors.
The carrier has a total market value of Rs 5,274 crore. The loss-making airline is saddled with a debt of Rs 9,794 crore as of the September quarter, down 7 percent from Rs 10,576 crore as of March 2014. This has helped it cut its interest burden 15 percent to Rs 212.27 crore during the second quarter of the fiscal, the report said.
The market has opened flat. The Sensex is up 16.24 points 27441.97 and the Nifty is up 7.85 points at 8307.25. About 398 shares have advanced, 165 shares declined, and 273 shares are unchanged.
TCS, Tata Motors, BHEL, Wipro and Hero are top gainers while ITC, ICICI Bank, Sesa Sterlite, Dr Reddy's Labs and Hindalco are among the laggards.
The Indian rupee has gained further ground. It has opened higher by 6 paise at 62.08 per dollar versus 62.14 Tuesday.
The dollar nears one-month lows against the yen as US yields continued to shrink, but it scaled a nine-year peak on the euro as bolder stimulus from the European Central Bank seemed imminent.
NS Venkatesh of IDBI Bank said, "The rupee movement today is expected to be in a narrow range aided by dollar sales by the custodian banks and exporters. The rupee is expected to take cues from the equity markets. The range for today is seen between 62.09-62.20/dollar."
Among global markets, stocks in the US closed modestly lower, after a near 300-point rally on the Dow evaporated amid falling commodity prices and worries that Germany would throw cold water on the European Central Bank taking additional steps to bolster the region's economy.
In Europe, equities closed sharply higher, with a surge in retail stocks helping in boosting investor sentiment. Rate of inflation in the UK fell to 0.5 percent in December year-on-year, according to new data on Tuesday morning. This was its lowest level in 14 years.The Asian stock markets are trading mixed this morning due to global growth concerns. Nikkei is lower as yen is still below 118.
Meanwhile, World Bank lowers its global growth forecast for 2015 and 2016.The global development leader predicted the global economy would grow 3 percent this year, lower than the 3.4 percent forecast it made in June, with disappointing economic prospects in the euro zone, Japan and some major emerging economies likely to offset the benefit of lower oil prices.In commodities, crude edges above USD 46 per barrel, helped by a flurry of short-covering as the prices remain six-year lows
From precious metals space, gold hits a 12-week high as investors seek refuge from turbulence in stock and currency markets.