Nifty ends below 8850, Sensex tanks 499 points; ICICI falls 5%

The 10-day market rally has come to a grinding halt as volatility continued to haunt Dalal Street. The markets hit new records in early trade with the Nifty almost touching the 9000-mark but then took a turn to end with sharp losses as corporate earnings of PSU banks spooked investors.

The 50-share index ended first day of February F&O series at 8808.90, down 143.45 points or 1.6 percent. The Sensex which was within striking distance of the 30,000 mark tanked nearly 500 points. The Sensex slumped 498.82 points or 1.7 percent at 29182.95. About 1258 shares have advanced, 1609 shares declined, and 246 shares were unchanged.

The market is technically overbought and unlikely to rise much in the near term, feels Sanjay Dutt of Quantum Securities. He expects liquidity flows to be strong, but the supply of share offerings is expected to cap market gains.

Kunal Saraogi, CEO, Equityrush believes market is heading into a choppy session and may move somewhere around 8700 over the next few days.

Gainers & losers
In a big boost for the Modi government's divestment drive, the Coal India offer-for-sale (OFS) has already been fully subscribed. The OFS comprises a divestment of 5 percent stake in the company, with a green-shoe option of an additional 5 percent. The government had set Rs 358 per share as the floor price which could turn out to be India's largest capital market issue to date.

Coal India ended the day with 4 percent loss.

Banking major ICICI Bank took a big knock in trade today on the back of disappointing December quarter earnings. While net interest income and net profit were marginally below estimates, spike in bad loans and high provisions took their toll on the stock. It fell 5 percent in trade today.

Bank of Baroda's December quarter asset quality also takes a significant knock. Dragged by PSU banks, the Bank Nifty fell 3.4 percent while Bank of Baroda (down 11 percent), SBI, PNB and HDFC were top losers in the Nifty.

Meanwhile Tata Power (up 4 percent), BHEL, NTPC, Sesa Sterlite and Wipro were top gainers in the Sensex.

Only the IT and Realty index ended in green today. Boosted by bumper December quarter results, HCL Tech beat street with dollar revenue jumping 4 percent sequentially and net profit up 2.3 percent.

Tech Mahindra also reported better-than-expected December quarter results. Consolidated profit jumped 11.9 percent sequentially to Rs 805 crore during Octber-December quarter.

Shares of realty companies were up as residential property prices seem to be on an uptrend. Consultancy firm Knight Frank has said that that despite sluggish demand seen in residential property markets over the last year, residential property prices are going higher.

Meanwhile, SpiceJet also saw a gain of 2 percent as Kalanithi Maran and Kal Airways plan to sell their entire equity to its new promoter Ajay Singh. The low-cost airline plans to allot 37 lakh non-convertible preference shares to Marans and Kal Airways. These shares will be issued at Rs 1000 per share. SpiceJet also plans to raise up to Rs 1,500 crore through issues of various securities.

3:30 pm Market closing:
It was a difficult day for traders as bears rampaged the street with blood. Snapping 10-day of winning streak, the Nifty retreated from a kissing distance of 9000. The 50-share index ended first day of February F&O series at 8808.90, down 143.45 points or 1.6 percent. The Sensex slumped 498.82 points or 1.7 percent at 29182.95. About 1258 shares have advanced, 1609 shares declined, and 246 shares were unchanged.

Banks played spoilsport as Bank Nifty lost over 3 percent, dragged by ICICI Bank, SBI, HDFC twins and Axis Bank. Other losers in the Sensex were Dr Reddy's Labs and Coal India.

Tata Power remianed big gainer of the day (up 4 percent), while BHEL, NTPC, Sesa Sterlite and Wipro lead the Sensex.

3:20 pm Result: Dabur India matched street expectations on Friday with the third quarter consolidated net profit rising 16.4 percent year-on-year to Rs 282.8 crore.

"Dabur India ended the third quarter of 2014-15 with strong growth in its key categories of health supplements, hair care, toothpastes and home care. The growth was despite a challenging business environment and continued softer consumption trend across the industry," said the FMCG major in its filing.

Consolidated net sales grew 9.2 percent to Rs 2,074 crore during October-December quarter from Rs 1,899.6 crore in the year-ago period.

Toothpaste business for Dabur grew 19 percent during the quarter and home care business reported an over 16 percent growth while health supplements business grew 13.5 percent.

3:10 pm  3G spectrum auction: Government has issued details for auctioning 5 Mhz of 3G spectrum across 17 out of 22 service area at a pan-India base price of Rs 3,705 crore per megahertz. The quantum of spectrum in 2100 Mhz band (3G) being put for auction is 75 percent less than the quantum recommended by telecom regulator TRAI and demanded by industry. In the latest amendment to notice inviting application for spectrum auction set to start from March 4, the DoT has said that only one entity will be able to win 3G spectrum in one service area.

One block of 5 MHz has been put for auction in all service areas except Jammu & Kashmir, Bihar, Himachal Pradesh, West Bengal and Punjab. This amounts to a total of 85 MHz from which government estimates to garner Rs 17,555 crore. Of this a sum of Rs 5,793 crore is expected to be realised in the current financial year.

3:00 pm Restructing: Adani Enterprises,  the flagship of the USD 9.4 billion Adani Group announced a complex restructuring of its various businesses.

Under the terms of the recast, Adani Enetrprises port business will be transferred to subsidiary Adani Ports and Special Economic Zone, its power businesses to Adani Power(APL), and transmission business to unlisted Adani Transmissions, which will subsequently be listed.

Also, Adani Mining Private Limited (AMPL), a wholly owned subsidiary of AEL is proposed to be merged into AEL. The scheme is subject to approvals from the stock exchanges, Sebi, shareholders, creditors and the Gujarat High Court.

2:50 pm Market check: The market is under tremendous pressure with the Sensex falling over 500 points. The 30-share index is down 554.86 points or 1.9 percent at 29126.91 and the Nifty slips 159.75 points or 1.8 percent at 8792.60. About 1113 shares have advanced, 1663 shares declined, and 246 shares are unchanged.

NTPC, Tata Power, Sesa Sterlite, BHEL and Hero MotoCorp are top gainers in the Sensex. Among the losers are ICICI Bank, SBI, Coal India, Dr Reddy's Labs and HDFC.

2:30 pm Coal India OFS update: Coal India offer-for-sale (OFS) is fully subscribed. The floor price of OFS was fixed at Rs 358/share, a discount of around 4.5 percent from Thursday closing price. The government will divest upto 10 percent stake via OFS, by selling 31.58 crore shares with an option to sell additional 31.58 crore share.

Till 1:55 PM , the PSU had recieved bid for 18.8 crore  (59.6 percent) of 31.58 crore base size

The Nifty snapped 10-day winning streak today, falling below the 8800-mark weighed by banking & financials post disappointing set of earnings from the ICICI Bank and Bank of Baroda.

The Sensex dropped 518.47 points or 1.75 percent to 29163.30 and the Nifty lost 157.50 points or 1.76 percent to 8794.85. About 1161 shares have advanced, 1580 shares declined, and 242 shares are unchanged on the BSE.

ICICI Bank missed street expectations on Friday with the third quarter net profit rising 14 percent year-on-year to Rs 2,889 crore, impacted by higher provisions. Net interest income (NII ) grew 13.9 percent to Rs 4,812 crore during October-December quarter from Rs 4,225 crore in the year-ago period. The stock fell 6 percent.

Bank Of Baroda disappointed street on Friday by reporting a 68 percent (Y-o-Y) decline in profit at Rs 334 crore for quarter ended December 2014. Higher provisions and tax rate impacted the bottomline. The stock tanked 11 percent.

1:50 pm Market outlook: A combination of low inflation, declining interest rates and strong corporate earnings growth will support the ongoing rally, feels Jeff Chowdhry, Senior Portfolio Manager, LGM.

In an interview with CNBC-TV18, Chowdhry says India's macro economic fundamentals have improved significantly over the last year.

He says he is not worried about the market levels and basis his investment decisions on whether the outlook on fundamentals is positive and what are the other alternatives?

Art this point, very few emerging market stories are as good as that of India, Chowdhry says. He is bullish on private sector banks and select consumer names, and sees the rupee strengthening as the outlook on corporate earnings improves.

1:30 pm Result: Bank of Baroda disappointed street on Friday by reporting a 68 percent (Y-o-Y) decline in profit at Rs 334 crore for quarter ended December 2014. Higher provisions and tax rate impacted the bottomline. Profit of the public sector lender was expected at Rs 1,243.6 crore and net interest income at Rs 3,501 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Net interest income grew 7.5 percent to Rs 3,286 crore in the quarter ended December 2014 from Rs 3,057.1 crore in same quarter last fiscal. Net interest income is the difference between interest earned and interest expended.

The market continues to be under sharp selling pressure. The Sensex is down 413.87 points or 1.4 percent at 29267.90, and the Nifty slips 118.35 points or 1.3 percent at 8834.
About 1139 shares have advanced, 1501 shares declined, and 251 shares are unchanged.

NTPC is up 2 percent while BHEL, Tata Power, Wipro and Hero are top gainers in the Sensex. Among the losers are SBI, HDFC, Coal India, Dr Reddy's Labs and TCS.

Overseas investors have remained the backbone of the rally, with net purchases of USD 2.1 billion so far this month till Thursday, provisional exchange and regulatory data showed.

Gold prices rose by Rs 73 to Rs 27,482 per 10 gram in futures trade as speculators engaged in enlarging positions amid a better trend overseas. Analysts said the rise in gold prices at futures trade was mostly in line with a firming trend overseas where the precious metals advanced from a two-week low on easing of selling pressure. Meanwhile, gold rose as much as 0.4 per cent to USD 1,262.07 an ounce in Singapore

12:30pm ICICI Bank in focus
ICICI Bank, the largest private sector lender in India, is expected to report 15 percent (each) growth in profit and net interest income of the third quarter, according to the average of estimates of analysts polled by CNBC-TV18. Numbers will be announced today.

Profit is likely to increase to Rs 2,923 crore in the quarter ended December 2014 from Rs 2,532 crore in same quarter last year while net interest income (NII) may climb to Rs 4,874 crore from Rs 4,225 crore during the same period. NII is the difference between interest earned and interest expended.

After the second quarter earnings, Chanda Kochhar, MD & CEO of the private sector lender had said the stressed assets additions peaked. Hence, whether the bank is able to maintain that guidance or not is the key factor to watch out for.

Within asset quality, restructured loans and slippages from restructured book will be closely watched. Restructured loans were lower sequentially at over Rs 820-830 crore against Rs 1,394 crore, but restructuring pipeline is estimated at around Rs 1800 crore after Q2 earnings.

Also slippages from restructured book will be watched. In Q2FY15, 50 percent of slippages were from the restructured book (Rs 800 crore of Rs 1,670 crore odd).

The street will watch the commentary of the bank on likes of Dabhol, coal auction, Bhushan Steel loans.

12:00pm Market Check
The market failed to take positive cues from the global markets. The Nifty hit an intraday high of 8,996, but retraced more than 150 points from there. The index lost 116.25 points or 1.30 percent to trade at 8836.10.

The Sensex tanked 398.52 points or 1.34 percent to 29283.25 while the BSE Midcap and Smallcap indices declined 0.5 percent each.

About 1043 shares have advanced, 1433 shares declined, and 237 shares are unchanged on the Bombay Stock Exchange.

Bank Nifty was the biggest loser among sectoral indices, falling more than 500 points (or 2.6 percent) following disappointing performance from Bank of Baroda. PSU Bank index lost more than 5 percent.

Bank Of Baroda crashed 12 percent as net profit of the PSU lender fell 68 percent (Y-o-Y) to Rs 334 crore for quarter ended December 2014. Higher provisions and tax rate impacted the bottomline.

"We don't expect NPA accretions to come down much in 1-2 quarter. Pressure on debt recasts and asset quality will continue in Q4 as we have major issues w.r.t 2-3 accounts," Ranjan Dhawan, executive director of the bank.

State Bank of India slipped 4 percent. ICICI Bank, HDFC, HDFC Bank and Axis Bank declined 1-2.5 percent.

HCL Technologies topped the buying list on Nifty, up 8 percent after the company reported a strong quarter with broad-based growth. It reported a dollar revenue growth of 4 percent leading its peers such as Infosys, TCS and Wipro. Constant currency growth of 6.2 percent was the highest in 16 quarters.

Coal India shed 3 percent as the offer for sale for 5 percent stake in company is underway. The government plans to sell 31.58 crore shares today with a greenshoe option of an additional 5 percent stake.

Adani Enterprises is in focus ahead of its board meeting today. The company is expected to announce a corporate restructuring to create a cleaner entity. The stock gained 4 percent.

11:50 am Earnings
Ridham Desai, Morgan Stanley says industrials is the best sector to buy on declining short rates. "Financials and consumer discretionary are other ways to play this theme. We are overweight these three sectors," he says. "Chetan Ahya, our India economist, believes that 2015 marks the beginning of a big rate cut cycle with a cumulative rate cuts of 150 basis points. This will likely mark the start of a new earnings cycle," says Desai. He says the brokerage expects an earnings CAGR of 24 percent from FY15-17. "In our view, the forthcoming rate cut cycle mirrors the cycle of 2000-04. Industrials, banks and consumer discretionary were the best-performing sectors in that period as well.

11:40 am Market outlook
A combination of low inflation, declining interest rates and strong corporate earnings growth will support the ongoing rally, feels Jeff Chowdhry, Senior Portfolio Manager, LGM. In an interview with CNBC-TV18, Chowdhry says India's macro economic fundamentals have improved significantly over the last year.

He says he is not worried about the market levels and basis his investment decisions on whether the outlook on fundamentals is positive and what are the other alternatives? Art this point, very few emerging market stories are as good as that of India, Chowdhry says. He is bullish on private sector banks and select consumer names, and sees the rupee strengthening as the outlook on corporate earnings improves.

11:30 am Market Update
The Sensex lost 353.25 points or 1.19 percent to 29328.52 and the Nifty tanked 99.05 points or 1.11 percent to 8853.30.

About 1129 shares have advanced, 1265 shares declined, and 232 shares are unchanged.

11:15 am Bank of Baroda plunges 13%
Bank Of Baroda disappointed street on Friday by reporting a 68 percent (Y-o-Y) decline in profit at Rs 334 crore for quarter ended December 2014. Higher provisions and tax rate impacted the bottomline.

Profit of the public sector lender was expected at Rs 1,243.6 crore and net interest income at Rs 3,501 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Net interest income grew 7.5 percent to Rs 3,286 crore in the quarter ended Deceber 2014 from Rs 3,057.1 crore in same quarter last fiscal. Net interest income is the difference between interest earned and interest expended.

Other income (non-interest income) increased marginally to Rs 1,090.35 crore from Rs 932 crore during the same period.

11:00am Market Check
The 9000-mark remains elusive for the Nifty that retraces after hitting an intraday high off 8996. The 50-share is down 47.20 points at 8905.15. The Sensex is down 211.80 points at 29469.97. About 1330 shares have advanced, 950 shares declined, and 215 shares are unchanged.

Coal India, Dr Reddy's Labs, HDFC twins and TCS are losers in the Sensex. Among the gainers are NTPC, BHEL, Hero, Tata Power and SBI.

Brokers said apart from beginning of February series in the derivatives segment, continued buying by foreign funds as well as retail investors supported by improving macro economic data amid optimism over upcoming Budget and encouraging Q3 earnings by some bluechip companies, lifted the key indices to new highs.

Crude prices were mixed in Asia today, after the US Senate approved a bill to build an oil pipeline from Canada to refineries in the US Gulf Coast, adding to concerns over a supply glut.

Gold rises after a slide and is poised to close the best monthly performance in a year. Globally, markets are mostly higher in Asia on firmer oil prices.

10:30am FII View
Ridham Desai, Morgan Stanley says industrials is the best sector to buy on declining short rates.

"Financials and consumer discretionary are other ways to play this theme. We are overweight these three sectors," he says.

"Chetan Ahya, our India economist, believes that 2015 marks the beginning of a big rate cut cycle with a cumulative rate cuts of 150 basis points. This will likely mark the start of a new earnings cycle," says Desai.

He says the brokerage expects an earnings CAGR of 24 percent from FY15-17. "In our view, the forthcoming rate cut cycle mirrors the cycle of 2000-04. Industrials, banks and consumer discretionary were the best-performing sectors in that period as well. Further, we believe that companies with high operating and financial leverage will benefit as growth recovers and interest rates fall," he adds.

10:00am Market Check
Equity benchmarks erased all its early gains to trade lower amid consolidation. Indices had touched record highs in opening trade but could not sustain. The 30-share BSE Sensex fell 94.23 points to 29587.54 and the 50-share NSE Nifty declined 22.25 points to 8930.10.

However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising half a percent each. About 1176 shares have advanced, 794 shares declined, and 207 shares are unchanged on the Bombay Stock Exchange.

Private banks, FMCG and oil stocks dragged the market down while technology and capital goods stocks led the support.

HCL Technologies rallied 9 percent following stellar performance of the company in Q2 earnings. Profit grew 2.3 percent sequentially to Rs 1,915 crore and dollar revenue rose 4 percent to USD 1.49 billion during October-December quarter.

Coal India plunged 3 percent as the government will sell up to 10 percent equity stake in the company via offer for sale today. It has fixed floor price at Rs 358 apiece as against Thursday's closing price of Rs 374.95.

9:50 am Market outlook: The market is technically overbought and unlikely to rise much in the near term, feels Sanjay Dutt of Quantum Securities. He compares the ongoing rally with the frenzied bull market of 2007-08, and says the recovery in corporate earnings has already been discounted.

In an interview to CNBC-TV18, Dutt says the market still looks from a medium term perspective, but the government needs to address the issues being faced by small and medium sized companies.

He expects liquidity flows to be strong, but the supply of share offerings is expected to cap market gains.

Dutt is bullish on financial services and banking stocks, and is betting on capital goods and EPC (engineering procurement and construction) companies to play the domestic recovery.

9:40 am Buzzing: Shares of HCL Tech surged 11 percent, hitting record high at Rs 1834 per share intraday after it posted stellar December quarter earnings.

The fourth largest software services exporter in India, surpassed street expectations on every parameter by reporting 2.3 percent sequential growth in profit after tax at Rs 1,915 crore. Profit was expected at Rs 1,770 crore on revenue of Rs 8,950 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Revenue grew 6.3 percent quarter-on-quarter to Rs 9,283 crore and dollar revenue rose 4 percent to USD 1.49 billion during October-December quarter (as against expected dollar revenue of USD 1.477 billion).

9:30 am Brokerages on OFS: Brokerages are mixed on Coal India with Edelweiss upgrading it to buy with a target price of Rs 442 per share. It feels that volumes push and government's sharp focus on doubling CIL's production by FY20 will bring cheer to the stock. Edelweiss also says that saving from low diesel prices to aid margin expansion as every Rs 1/litre drop in fuel cost saves Rs 100 crore for Coal India.

Nomura has a buy rating with a target of Rs 443 per share. "As has historically been the case, we believe Coal India may well consider declaring an interim dividend next month. As investors who buy stocks in the upcoming OFS would be allocated shares on February 2/3, prospects of an imminent interim dividend may well act as a sweetener,'' Nomura says.

However, JP Morgan is underweight on the stock with a price target of Rs 325 per share as given the stake sale there is less room for a repeat of last year's dividend. ''There is no explicit dividend policy in place and hence predicting dividend is difficult. However, the combination of a stake sale and potentially lower dividends should result in the stock being under pressure,'' it says in a note.

It is a record high opening as the Nifty approaches 9000-mark on first day of February F&O series. The 50-share index is up 44.20 points at 8996.55. The Sensex is up 140.11 points at 29821.88, and the Nifty About 497 shares have advanced, 115 shares declined, and 151 shares are unchanged.

Coal India is down 4 percent as its offer-for-sale opens today. Bharti Airtel, HDFC, Tata Motors, SBI and Sesa Sterlite are top gainers in the Sensex.

The Indian rupee has opened at 61.79 per dollar, up 7 paise compared to previous day's closing value of 61.86 a dollar.

Pramit Brahmbhatt, Veracity says continuation of FII inflows coupled with some profit booking in local equities may impact the rupee in trade today. He expects USD-INR to trade in the range of 61.40-62.40/USD.

US markets bounced back from a two-day rout, led by a reverse in the price of crude and strong job market data. European markets closed mixed on Thursday, with a sharp decline in Shell shares hitting the UK's FTSE 100 index and Asian markets were trading higher in morning trade on a positive US handover.

In commodities, Nymex Crude held steady around USD 44 dollars per barrel as US jobless data signaled further strength in economy. Brent crude was trading around USD 49. Gold edged higher after falling more than 2 percent to a two-week low overnight on concern over a looming increase in US interest rates.