Sensex ends below 29K, down 117 points; banks, cap goods drag

It was another lacklustre session for the market on Wednesday as the Sensex ended below the 29000-mark, weighed down by banks, capital goods and select auto stocks.

The 30-share BSE Sensex declined 117.03 points to 28883.11 and the 50-share NSE Nifty slipped 32.85 points to 8723.70, continuing weakness for the fourth consecutive session while the broader markets closed flat.

Investors started booking profits due to disappointing earnings from banks but every dip should be a buy, say experts.

There have been too many earnings disappointments for the December quarter, leading some investors to question if the India story has been hyped, says Manishi Raychaudhuri, MD and Asian Equity Strategist at BNP Securities.

He adds that the Indian economy had already bottomed out four quarters ago and that growth prospects look much better compared to other economies.

Axis Bank was the biggest loser on Sensex again, down 4.4 percent. Its rival State Bank of India was down 2.4 percent and ICICI Bank fell 0.5 percent while HDFC Bank wiped out all its gains in late trade to close flat with negative bias.

Public sector lender Canara Bank gained 3 percent on reporting 60 percent growth in profit due to higher other income and lower provisions.

BHEL shed 4 percent followed by L&T, TCS, Reliance Industries, HUL and Maruti Suzuki with 1-2 percent. Tata Motors lost 1.7 percent after disappointing Jaguar sales in US in January (also ahead of earnings tomorrow) while Bharti Airtel declined over a percent ahead of Q3 earnings that will be announced later in the day today.

However, ONGC was among the top gainers on the Nifty, up 2.55 percent. CNBC-TV18 learnt that the government is moving to iron out the subsidy sharing formula and fast track the ONGC divestment. Sources say, the oil ministry asked the government not to impose any subsidy burden on upstream companies if crude prices stayed at or less than USD 60 per barrel.

Cairn India gained 3.5 percent in addition to 4 percent rally in previous session post 19 percent jump in crude oil prices in last 4 sessions.

Metals & mining stocks like Tata Steel, Sesa Sterlite, Coal India and Hindalco Industries saw huge buying interest today, up 2-3 percent.

Tata Power spiked 3 percent after reporting profit at Rs 198 crore (led by forex gain of Rs 421 crore) during October-December quarter against loss of Rs 74.91 crore in the year-ago period.

Among others, Sun Pharma and Infosys were up 1-2 percent.

In the broader space, pharmaceutical firm Wockhardt surged 9 percent on showing a 14 percent increase in profit at Rs 347 crore led by strong operational income and other income. Revenue rose 11.8 percent (up 34.3 percent Q-o-Q) to Rs 1,382 crore, which indicated that numbers started stabilising despite USFDA issues in US.

Kirloskar Oil surged 15 percent on signing agreement with Rolls-Royce to build emergency gensets for nuclear plants in India. DB Realty gained 6 percent as real estate company commenced construction of Orchid Heights sale towers. Force Motors spiked 20 percent as BMW will partner with company for sourcing of components.

About 1344 shares advanced while 1563 shares declined on the Bombay Stock Exchange.

Meanwhile, global markets were a mixed bag today. Asian markets like Nikkei gained 2 percent while Shanghai fell 1 percent. European markets like Germany's DAX, Britain's FTSE, and France's CAC declined around 0.5 percent (at the time of closing of Indian equities).

In commodities, crude oil prices dropped on profit booking. Brent crude March futures lost 2 percent to USD 56.73 a barrel and WTI crude was down 2.87 percent to USD 51.53 a barrel (at 16 hours IST).

03:30 Market close
The market ended in red. The Sensex is down 117.03 points at 28883.11 and the Nifty slipped 32.85 points at 8723.70. About 1332 shares have advanced, 1573 shares declined, and 236 shares are unchanged.

Axis Bank was down over 4 percent while BHEL, SBI, L&T and TCS were down 2-4 percent. On the gaining side were Hindalco, Tata Power, ONGC, Sesa Sterlite and Coal India.

03:15 pm Brokerages on TVS Motor
Shares of TVS Motor rallied 4 percent intraday though it missed street expectations on bottomline and operational front but topline was in line during October-December quarter. The two-wheeler maker's net profit jumped 31.1 percent year-on-year to Rs 90.2 crore in Q3FY15 as against expected growth of 38 percent.

Brokerages remain bullish on the stock and suggest buying. Goldman Sachs reiterates buy rating with a target of Rs 345 per share. It reasons that Q3 margins were impacted by provisioning of Rs 16 crore pending government's clarification on possible restriction on input VAT credit and the management is confident of 14-14.5 percent market share in Q4 (13.6 percent in Q3).

Macquarie maintains outperform rating with a target price of Rs 340 per share and expects it to register a 54 percent EPS CAGR over FY14-17E. It feels TVS Motor is well placed, given its high exposure to fast-growing segments like scooters (25 percent of revenues), premium motorcycles (11 percent), and exports (21 percent), along with a strong launch pipeline.

03:00 pm Result
Tata Power has turned profitable with consolidated net at Rs 198 crore during October-December quarter aganist loss of Rs 74.91 crore in the year-ago period.

The profit beat street expectations supported by forex gain while topline was in line. Profit was expected at Rs 134 crore for the quarter. Net sales increased 1.2 percent to Rs 8,806.6 crore in the quarter ended December 2014 from Rs 8,700 crore in same quarter last fiscal.

"Power business grew 9.8 percent year-on-year to Rs 6,545.7 crore with EBIT rising 5 percent but coal revenue fell 18 percent to Rs 2,104 crore with EBIT surging 17.4 times in Q3FY15," said the company in its filing.

02:30pm Raghuram Rajan says
Reserve Bank of India Governor Raghuram Rajan said that inflation was still a concern but added the deflationary global environment gave the central bank some elbow room with monetary policy.

"We still have concerns about inflation. Given the deflationary environment elsewhere, it's actually easier for us because we are not fighting inflation in an environment where inflation is picking up elsewhere," Rajan said in a conference call with analysts.

"So I think we are still in conventional monetary policy territory."

The comments come a day after the central bank held interest rates steady at 7.75 percent, leaving its next move probably until after the government presents its annual budget at the end of this month, reports Reuters.

02:00pm Market Check
The market remained lacklustre in afternoon trade as the Sensex hovered around 29000 level. HDFC twins, metals, healthcare and PSU oil stocks gained while banks, capital goods and auto stocks were under pressure.

The Sensex rose 7.09 points to 29007.23 and the Nifty fell 0.60 points to 8755.95. About 1372 shares have advanced, 1410 shares declined, and 239 shares are unchanged on the BSE.

There have been too many earnings disappointments for the December quarter, leading some investors to question if the India story has been hyped, says Manishi Raychaudhuri, MD and Asian Equity Strategist at BNP Securities.

In an interview to CNBC-TV18, he says the Indian economy had already bottomed out four quarters ago and that growth prospects look much better compared to other economies. Falling commodity prices is one of the key cushions for the Indian economy, says Raychaudhuri.

ONGC was among the top gainers on the Nifty today, up 3 percent. CNBC-TV18 learnt that the government is moving to iron out the subsidy sharing formula and fast track the ONGC divestment. Sources say, the oil ministry asked the government not to impose any subsidy burden on upstream companies if crude prices stayed at or less than USD 60 per barrel.

Cairn India gained 4 percent today in addition to 4 percent rally in previous session post 19 percent jump in crude oil prices in last 4 sessions. Canara Bank and Wockhardt rallied 3 percent and 7.5 percent post good third quarter earnings.

Global markets were a mixed bag today. Asian markets like Japan gained almost 2 percent while European markets like Germany fell 0.5 percent. In commodities, crude prices dropped around 2 percent after 4-day rally.

1:55 pm Result: Pharmaceutical firm Wockhardt's third consolidated net profit increased 14 percent year-on-year to Rs 347 crore led by strong operational income and other income.

Consolidated total income rose 11.8 percent to Rs 1,382 crore during October-December quarter from Rs 1,236.4 crore in the year-ago period.

Operating profit (EBITDA) surged 92.4 percent on yearly basis to Rs 463 crore and operating profit margin spiked a whopping 1400 basis points to 33.5 percent in the quarter ended December 2014.

Other income jumped 4.5 times year-on-year to Rs 28.5 crore while finance cost declined to Rs 12 crore from Rs 30.5 crore during the same period.

1:45 pm Growth: India needs to grow at 7-8 percent a year to create more job opportunities for young people and double the size of the economy in 10 years, Minister of State for Finance Jayant Sinha said.

"We want to put India on sustainable non-inflationary growth trajectory of 7-8 percent growth. We need to have 7-8 percent growth to provide employment to young people that join workforce every year," Sinha said at 15th Delhi Sustainable Development Summit today.

"7-8 percent growth will double size of economy in the next 10 years. For this we need to build our productive capacity, but also need to ensure that our growth is sustainable," he added. The minister also stressed upon need to protect the environment.

1:30 pm Result: Canara Bank's third quarter net profit climbed 60.4 percent year-on-year to Rs 656 crore boosted by higher other income and lower provisions.

Net interest income, the difference between interest earned and interest expended, grew 6.9 percent to Rs 2,380.5 crore during October-December quarter compared to Rs 2,227 crore in same quarter last fiscal.

Provisions for bad loans declined 20 percent year-on-year (up 3.4 percent sequentially) to Rs 841.3 crore during the quarter with the provision coverage ratio at 59.44 percent at the end of December 2014.

Asset quality weakened a bit during the quarter as gross non-performing assets (NPA) increased 56 basis points Y-o-Y (up 43 bps Q-o-Q to 3.35 percent and net NPA rose 3 bps year-on-year (up 11 bps sequentially) to 2.42 percent.

The market is still flat with the Nifty managing to hold above 8750 marginally. The 50-share index is up 5.20 points at 8761.75. The Sensex is up 25.39 points at 29025.53, and the Nifty About 1323 shares have advanced, 1319 shares declined, and 242 shares are unchanged.

Sesa Sterlite is up 4 percent while ONGC gain 4 percent, Hindalco, Coal India and Tata Steel are other gainers in the Sensex. Among the losers are Axis Bank, BHEL, TCS, Bharti and Tata Motors.

Crude oil futures prices rose 0.96 percent to Rs 3,257 per barrel today as speculators engaged in enlarging positions, tracking a firming trend in Asian cues. At the Multi Commodity Exchange, crude oil for delivery in February traded Rs 31, or 0.96 percent, higher at Rs 3,257 per barrel, with a business turnover of 19,103 lots. The oil for March also moved up by Rs 30, or 0.90 per cent, to Rs 3.334 per barrel, with a business volume of 1,040 lots.

Analysts attributed the rise in crude oil futures to a firming trend in Asia, extending gains from the previous day due to a significant decline in US drilling activity. Crude also gained strength with the dollar dropping to a one week low after some weak US factory orders data in December.

12:30pm Force Motors shares in demand
The Indian arm of German luxury auto maker BMW Group on Wednesday said it will partner with seven domestic suppliers to source components for local production of cars at its Chennai plant in south India.

With the addition of the partners, which include Force Motors Ltd, Tenneco Automotive India and Lear India, the level of localisation at the company's Chennai plant will increase to about 50 percent, BMW Group India said in a statement.

Shares of Pune-based Force Motors, from which BMW will source engines and gearboxes, rose as much as 18 percent on news of the partnership.

BMW Group India said it will also source axles, door panels, wiring harness, exhaust systems, air conditioning and cooling modules and seats from the domestic suppliers.

The local partnerships will help the company optimise costs and set higher quality standards, it said. The company raised prices across its range of vehicles by up to 5 percent from January 1, reports Reuters.

The stock rallied 13 percent.

12:00pm Market Check
The market traded in a choppy range today. The Nifty hovered around the 8,750 level as metal, realty estate and HDFC twins led gains while auto and banking stocks lost ground.

The 30-share BSE Sensex declined 1.71 points to 28998.43 and the 50-share NSE Nifty slipped 2.90 points to 8753.65. About 1254 shares have advanced, 1234 shares declined, and 225 shares are unchanged on the BSE.

Asian markets traded mostly higher as they digested a slew of corporate earnings in Japan and Australia. Oil prices, however, fell on the back of renewed concerns over global demand and as high stock levels halted a rally that had lifted prices by about 19 percent over the past four sessions.

ONGC was among the top gainers on the Nifty today. CNBC-TV18 learnt that the government is moving to iron out the subsidy sharing formula and fast track the ONGC divestment. Sources say, the oil ministry asked the government not to impose any subsidy burden on upstream companies if crude prices stayed at or less than USD 60 per barrel.

From frontline earnings, JSPL gained 2 percent after posting its Q3 numbers yesterday. Citi says it was tough quarter but they maintained a buy as valuations look cheap and they are comfortable with cash flows. Hero Motocorp lost 1 percent, reacting to weak Q3 numbers. UBS maintains neutral rating but reduced its target price to Rs 3200 per share and Goldman Sachs maintains a sell.

Bharti Airtel traded with marginal weakness ahead of Q3 numbers today. A CNBC-TV18 poll sees a 2.6 percent revenue growth while profit is expected to decline by 8.5 percent. Analysts say dollar revenue growth in Africa could be very disappointing due to cross currency headwinds.

Axis Bank plunged 4 percent followed by TCS, Tata Motors, State Bank of India, HUL, BHEL, Bharti Airtel, Hero Motocorp and NTPC with 1-1.8 percent loss.

However, Infosys, HDFC Bank, HDFC, Sun Pharma, Sesa Sterlite, Tata Steel, M&M, Coal India, Hindalco and Tata Power gained 1-3 percent.

11:55 am Exclusive: Close on the heels of quarterly results of oil companies and a possible 5 percent divestment in ONGC , the Oil Ministry has proposed a new subsidy sharing proposal with the Finance Minister. Sources say as recently as last week, Oil Minister Dharmendra Pradhan has proposed upstream companies ONGC and Oil India should not make any contributions towards subsidy burden if crude prices are at or below USD 60 per barrel. They will, however, take upon 85 percent of the burden if crude ranged between USD 60 and 100 and 90 percent if oil stays above USD 100. Sources told CNBC-TV18 that the Oil Ministry has also sent North Block supplementary demand for grants for FY15 based on the new proposal.

11:45 am Poll: Bharti Airtel , the largest telecom operator (by subscriber base) in India, will announce its third quarter earnings on Wednesday. Profit after tax is expected to decline 8.5 percent sequentially to Rs 1,266 crore during the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Revenue is seen rising 2.6 percent to Rs 23,440 crore during October-December quarter compared to Rs 22,845.2 crore in previous quarter. Operating profit (EBITDA) may increase 2.7 percent quarter-on-quarter to Rs 7,910 crore and marign may remain unchanged at 33.7 percent during the same period.

11:30 am Market outlook: There have been too many earnings disappointments for the December quarter, leading some investors to question if the India story has been hyped, says Manishi Raychaudhuri, MD and Asian Equity Strategist at BNP Securities. In an interview to CNBC-TV18, he says the Indian economy had already bottomed out four quarters ago and that growth prospects look much better compared to other economies. Falling commodity prices is one of the key cushions for the Indian economy, says Raychaudhuri. And while there have been foreign fund outflows from India of late, they are not very large, he says.

The market is in a tight range with broader markets underperforming. Sentiment is dampened by Brent crude that has spiked 6 percent to above USD 57 per barrel and FIIs are selling for third consecutive session.

The Sensex is down 19.78 points at 28980.36 and the Nifty slips 7.85 points at 8748.70. About 1119 shares have advanced, 1126 shares declined, and 237 shares are unchanged.

Sesa Sterlite, ONGC, Tata Steel, Sun Pharma and Coal India are top gainers in the Sensex. Among the losers are Axis Bank, TCS, SBI and HUL.

Oil prices fell as renewed concerns over global demand and high stock levels halted a rally that pushed up prices by about 19 percent over the past four sessions.

The recent rebound was driven by hopes that prices may have hit a bottom after a seven-month rout slashed oil futures by nearly 60 percent and prompted major energy firms to cut spending on new production. But weak data from key consumer China has rekindled demand concerns, dragging on oil prices.

Globally, Asian markets are higher reacting to the strong us close and spike up in crude prices.

10:30am Market Expert
There have been too many earnings disappointments for the December, leading some investors to question if the India story has been hyped, says Manishi Raychaudhuri, MD and Asian Equity Strategist at BNP Securities.

In an interview to CNBC-TV18, he says the Indian economy had already bottomed out four quarters ago and that growth prospects look much better compared to other economies. Falling commodity prices is one of the key cushions for the Indian economy, says Raychaudhuri.

And while there have been foreign fund outflows from India of late, they are not very large.

While state-owned banks have reported a steep rise in bad loans in the December quarter, it may already have been discounted by the market, he says.

10:00am Market Check
The market remained listless in morning trade. The Sensex rose 21.32 points to 29021.46 and the Nifty advanced 5.85 points to 8762.40. The broader markets too are flat in trade.

About 1083 shares have advanced, 808 shares declined, and 200 shares are unchanged on the Bombay Stock Exchange.

State-run oil & gas explorer ONGC rallied nearly 3 percent as government moves to iron-out the subsidy sharing formula and fast-track ONGC divestment. Oil ministry asked government not to impose any subsidy burden on upstream companies if crude prices stay at or less than USD 60 a barrel.

Sun Pharma climbed over 2 percent followed by HDFC, Infosys, Bharti Airtel, Sesa Sterlite, Tata Steel and GAIL with more than 1 percent gain.

However, Axis Bank fell another 3 percent after lossing 5 percent in previous session. Its rivals ICICI Bank and State Bank of India lost further, down 1-1.6 percent. TCS declined 1 percent.

Hero Motocorp shed more than a percent on earnings miss. Revenue in Q3 fell 0.5 percent with margins contracting 100 basis points to 12 percent on higher promotion/branding costs. Goldman Sachs cut FY15-18 EPS by 5-14 percent and target price lowered to Rs 2529.

Crompton Greaves tanked 6 percent on disappointing results, both standalone and consolidated results show year-on-year pressure on the topline and there was continued weakness in subsidiaries. JP Morgan cut FY16/17e earnings by around 11 percent and lowered target price to Rs 195 from Rs 215.

9:55 am Bank of Japan: Bank of Japan Deputy Governor Kikuo Iwata said on Wednesday the recent collapse in oil prices has not hampered a broad uptrend in consumer prices, stressing that the effect of the bank's monetary stimulus is working its way through the economy.

Iwata, one of the BOJ's two deputy governors and an architect of the bank's radical stimulus programme, said monetary policy cannot immediately fix short-term fluctuations in inflation driven by external factors such as oil price falls.

The BOJ stunned markets by expanding its stimulus in October last year as it attempted to prevent slumping oil prices, and a subsequent slowdown in price growth, from hurting sentiment.

9:30 am Big slide: Shares of Jubilant Life Sciences  plunged 7 percent intraday on Wednesday as it posted a consolidated net loss of Rs 11.16 crore for the third quarter ended December 31, 2014. The company had a net profit of Rs 143.43 crore during the same period of previous fiscal.

Its net sales for the quarter under review stood at Rs 1,430.25 crore during the period, marginal increase of 0.18 percent per cent compared to Rs 1,427.65 crore in the same period previous fiscal.

However, Nomura has a buy rating on the stock with a target of Rs 238 per share stating that it saw an one-off expense of Rs 53 crore related to CMO (contract manufacturing) operations. It says the company expects some expense on correct CMO operations in Q4 but should become zero from Q1FY16.

The market has opened firmed with support from oil & metal stocks. The Sensex is up 107.73 points at 29107.87 and the Nifty is up 32.30 points at 8788.85. About 492 shares have advanced, 101 shares declined, and 137 shares are unchanged.

ONGC, Tata Power, Cipla, Axis Bank and SBI are top gainers while Hero, ICICI Bank, NTPC, HDFC Bank and Coal India are major losers in the Sensex.

The Indian rupee opened flat at 61.66 per dollar against 61.67 Tuesday.

The dollar nurses broad losses, having suffered its biggest one-day fall in over a year as investors cut long positions. The market instead snapped up commodity currencies on a further recovery in oil prices and a surge in copper.

Himanshu Arora of Religare said, "Rupee is expected to depreciate against dollar today as RBI kept key rates unchanged and reduced the SLR. Steep surge in oil prices may also hammer rupee as the same constitutes the major portion of our import bill."

Global markets are positive with the US markets rallying more than a percent boosted by a surge in oil prices and alleviation of concerns in the euro zone. European markets too gained with the Greek market trading up 11 percent. Asian markets are in the green with the positive handover.

In other asset classes, nymex crude surged 7 percent to USD 53 dollars per barrel, brent crude surged to USD 57.Gold struggled around USD 1260 per ounce as Greece's plan to end a standoff with creditors lifted the appetite for risky assets such as equities.