Sensex falls 400 points, Nifty breaks 8550; DRL, Bajaj Auto up
09 February 2015
03:30 pm Market close
The market fall for seven consecutive day. The Nifty ended below 8550-level, down 134.70 points or 1.6 percent at 8526.35. The Sensex was down 490.52 points or 1.7 percent at 28227.39.
L&T lost 8 percent post disappointing December quarter results. Tata Steel was down 6 percent.
03:10 pm Results
Larsen and Toubro (L&T) disappointed street on Monday with the third quarter profit falling 14.6 percent year-on-year to Rs 1,060 crore on standalone basis.
Profit was expected at Rs 1,255 crore on revenue of Rs 15,973 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
Net sales grew 4.2 percent to Rs 14,995 crore during October-December quarter from Rs 14,388 crore in same quarter last year.
02:55 pm Nibbling India
Global investors are showing strong interest in India with more inquiries for investment portfolios, a Singapore-based top corporate official has said.
"We have multiple conversations with pension funds, insurance companies, private banks and family offices of the rich people with trust-type of investment outfits," said the UTI International CEO Praveen Jagwani. Jagwani sees investors' interest further improving as the Indian economic growth picks up and the rupee stabilises.
UTI International has USD 2.15 billion worth of assets under its management, a significant built-up as its Singapore business started seven years ago. "We are educating global investors about opportunities in India," he said, underlining UTI's ongoing engagement with global investors. "Our role as an international business of UTI is completely aligned with that of the Indian government." UTI is 74 percent owned by state-owned Enterprises.
02:35pm Corporation Bank in News
Corporation Bank's third quarter net profit climbed 16 percent year-on-year to Rs 147 crore, largely driven by lower provisions.
Net interest income of the public sector lender rose 2.7 percent to Rs 1,029 crore during October-December quarter from Rs 1,002 crore in same quarter last year. However, other income (non-interest income) declined 3 percent to Rs 328.3 crore and operating profit fell 2.3 percent to Rs 726.5 crore during the same period.
Provisions for bad loans dropped 21.8 percent year-on-year (up 24.2 percent sequentially) to Rs 646 crore during the quarter with provision coverage ratio at 52.47 percent as on December 31, 2014.
Capital adequacy ratio (as per Basel III norms) stood at 11.26 percent in the quarter gone by, declined compared to 11.28 percent in previous quarter and 11.89 percent in the year-ago period.
Asset quality weakened as gross non-performing assets (NPA) climbed 180 basis points on yearly basis (up 63 bps sequentially) to 4.88 percent during October-December quarter. Net NPA rose 112 bps Y-o-Y (up 35 bps Q-o-Q) to 3.27 percent during the same period.
02:00pm Market Check
The market remained under pressure in afternoon trade as exit polls have indicated Aam Aadmi Party could make a dramatic comeback in Delhi. This could be the first election defeat for the BJP after coming into power in May 2014.
The 30-share BSE Sensex dropped 425.82 points or 1.48 percent to 28292.09 and the 50-share NSE Nifty fell 105.45 points or 1.22 percent to 8555.60. The BSE Midcap and Smallcap indices dropped 0.8 percent each.
Nearly two shares declined for every share advancing on the Bombay Stock Exchange.
Sandeep Bhatia of Kotak Institutional Equities told CNBC-TV18 that the market correction ahead will be led by earnings miss, not elections. There are still no signs of pick up in capex cycle, he says.
The market sentiment today is also hit by weak earnings from Tata Steel, GAIL and midcaps like Apollo Tyres and J&K Bank.
Cipla, GAIL, Tata Steel, ICICI Bank, Bharti Airtel and Sesa Sterlite fell 3-5 percent. L&T extended losses, down 3.5 percent ahead of Q3 earnings.
The rupee plunged past 62 a dollar due to fresh demand for the dollar from importers, falling 50 paise to 62.19 a dollar.
Global markets are also under pressure today. European markets like Germany, Britain, France fell almost 1-1.5 percent as Greece and Russia problems persisted while the crisis in Ukraine escalated without a peace deal. In Asia, Hang Seng closed down 160 points.
1:55 pm Result poll: Larsen and Toubro (L&T) is expected to report a 1.1 percent (year-on-year) decline in standalone profit at Rs 1,255 crore for Q3FY15, according to a CNBC-TV18 poll. Adjusted profit after tax may jump 10.4 percent. Net sales are seen going up 11 percent to Rs 15,973 crore during October-December quarter from Rs 14,388 crore in the year-ago period. Operating profit may climb 9 percent year-on-year to Rs 1,826 crore, but margin may slip 20 basis points to 11.4 percent in the quarter gone by. The pressure in margin may be due to lower margins in the metallurgy and power segments.
1:45 pm Divestment: The success of Coal India offer-for-sale (OFS) that helped government garner close to Rs 26,000 crore by divesting 10 percent share is positive and the government may have another two-three divestments before the end of this fiscal, says C Jayaram, Joint MD, Kotak Mahindra Bank . Speaking to CNBC-TV18 from the sidelines of the three-day Kotak Conference, Jayaram says broadly, market sentiment remains positive and a possible victory of Aam Aadmi Party (AAP) in Delhi elections is unlikely to cause much uproar in the market.
1:30 pm Upgrade: Shares of Wockhardt rose 5 percent intraday after Citi upgraded the stock to buy from sell. The brokerage has also revised its target price to Rs 1880 per share following firm December quarter results.
Citi has even increased its FY16-17 core EPS by 2/10 percent based on progress on regulatory front and stated that resolution of 483s at Morton Grove is positive. It also adds that risk-reward looks reasonable for Wockhardt.
Meanwhile, last week Macquarie also had upgraded Wockhardt to outperform from neutral with a revised one-year target of Rs 1700 (from Rs 410) per share.
The market is still under pressure dragged mostly by metals, auto and infra stocks. The Sensex is down 287.96 points or 1 percent at 28429.95. The Nifty is down 80.65 points at 8580.40. About 915 shares have advanced, 1664 shares declined, and 208 shares are unchanged.
ONGC, Bajaj Auto, Sun Pharma, Dr Reddy's Labs and Axis Bank are top gainers in the Sensex. Among the losers are GAIL, Tata Steel, Cipla, Bharti Airtel and Sesa Sterlite.
Japan's Nikkei share average edged up as the yen weakened against the dollar after strong US jobs data, but gains were limited as weak Chinese trade numbers capped risk appetite.
The Nikkei ended up 0.4 percent at 17,711.93, but off an intraday high of 17,799.49, the highest since Jan. 30.
The broader Topix added 0.6 percent to 1,424.92, and the JPX-Nikkei Index 400 gained 0.5 percent to 12,916.95. Analysts said that while some investors took heart from the weakening yen after the US data, others were concerned that liquidity may shrink in the global market if the US Federal Reserve increases rates too soon.
12:55pm Market Update
The Sensex declined 275.61 points or 0.96 percent to 28442.30 and the Nifty fell 76.65 points or 0.88 percent to 8584.40.
About 897 shares have advanced, 1648 shares declined, and 224 shares are unchanged on the BSE.
12:45pm Nikkei gains
Japan's Nikkei share average edged up today as the yen weakened against the dollar after strong US jobs data, but gains were limited as weak Chinese trade numbers capped risk appetite.
The Nikkei ended up 0.4 percent at 17,711.93, but off an intraday high of 17,799.49, the highest since Jan. 30.
The broader Topix added 0.6 percent to 1,424.92, and the JPX-Nikkei Index 400 gained 0.5 percent to 12,916.95.
Analysts said that while some investors took heart from the weakening yen after the US data, others were concerned that liquidity may shrink in the global market if the US Federal Reserve increases rates too soon.
The Greek debt situation also put investors on edge as Athens reaffirmed its rejection of an international bailout programme, reports Reuters.
12:20pm Market Expert
With the AAP destined to win the Delhi assembly elections according to the newsflow, it could have some immediate reaction on market but post that the market would shift its attention to the upcoming Budget, says Deven Choksey, MD, KR Choksey Shares and Securities.
For the Nifty per se, he thinks 8500 is a good base and does not expect it to go down much further. However, in case it does then it would not be more than a couple of hundred points, he adds.
12:00pm Market Check
The market continued its streak of profit booking today with sentiment weighed down as exit polls have indicated an Aam Aadmi Party may win in Delhi. If that does come through then it would mean the first election defeat for the BJP government after coming into power in May 2014.
The 30-share BSE Sensex plunged 297.64 points or 1.04 percent to 28420.27 and the 50-share NSE Nifty went down 85.25 points or 0.98 percent to 8575.80.
About two shares advanced for every share declining on the Bombay Stock Exchange.
GAIL topped the selling list on Sensex, down more than 4 percent on weak Q3 earnings. Profit in the third quarter fell over 50 percent weighed down by an inventory loss of Rs 950 crore in natural gas trading. CLSA maintains a sell on the stock with a target of Rs 360 per share.
Another stock reacting negatively to earnings was Tata Steel, which also shed 4 percent. The company's India EBITDA per tonne came in at the lowest level since 2004. Credit Suisse maintains its underperform rating, cutting estimates on lower realisations and costlier iron ore.
L&T was another key drag on the Nifty ahead of its third quarter earnings today. Analysts expect a muted quarter for the heavyweight. A CNBC-TV18 poll sees standalone net sales rising by 11 percent while adjusted profit is seen up 10 percent. Growth is expected to be subdued as execution challenges continue.
Apollo Tyres, State Bank of India, Adani Ports, HDIL, Marico Kaya, ICICI Bank, Infosys and M&M were most active shares on exchanges.
Appollo Tyres tanked 13 percent as the stock reacted to weak earnings as its revenue fell 13 percent to Rs 3,104.8 crore while profit dropped 45 percent at Rs 184.2 crore. Results were also impacted by one time provision of Rs 79 crore on account of retrenchment expenses for South African business.
11:55 am Market outlook: The big challenge for the market near term is the weakness in corporate earnings, says Sandeep Bhatia, ED & Head of Sales, Kotak Institutional Equities. In an interview with CNBC-TV18, Bhatia says market correction near term will be driven by concerns over earnings growth and not so much by election results. He expects a pre-Budget rally, but does not se the market giving more than 10-12 percent returns over the next couple of quarters. Bhatia is not expecting any major tax incentives from the government in this Budget, given the weak fiscal situation. He says the government needs to do something quickly to stimulate growth as the capex cycle is still showing no signs of recovery.
11:40 am Budget expectations: Mahesh Nandurkar, CLSA says opinion polls suggest that the upcoming elections in Delhi might throw a negative surprise for Narendra Modi.
''If that happens, it will be a small negative for the market, though we do not believe that one small election loss will impact Mr Modi's policy making,'' he adds.
He says CLSA believes the upcoming Budget will give a boost to infrastructure spending and yet drive fiscal consolidation. The brokerage also believes that the translation of improving macro into better corporate results is a matter of time and a potential near-term weakness will be a buying opportunity.
11:30 am Result analysis: CLSA maintains sell rating on GAIL with a reduced target of Rs 360 per share as further inventory writedown, consensus EPS downgrades and falling crude remain key risks even as lack of improvement in gas transmission limits triggers.
The brokerage has also trimmed FY15-17 EPS by 2-7 percent . ''We see limited chances of recovery in its core gas transmission business where utilisation is sub- 50 percent. Rebound in domestic gas production and LNG regasification capacity expansions are at least two years away. A turnaround in this business will be crucial for Gail to sustain its high valuations,'' it says in a note.
Markets continue their streak of profit booking today with sentiment weighed down as exit polls have indicated an Aam Aadmi Party win in Delhi which if it does come through would mean the first election defeat for the BJP government after coming into power in May 2014.
The Sensex is down 354.08 points or 1.2 percent at 28363.83 and the Nifty slips 104.40 points or 1.2 percent at 8556.65. About 792 shares have advanced, 1528 shares declined, and 201 shares are unchanged.
Bajaj Auto, Sun Pharma, ONGC, Hindalco and Infosys are top gainers in the Sensex. Among the losers are Tata Steel, GAIL, Bharti Airtel, Tata Power and M&M.
Globally, Asia is mostly lower taking lead from the US close and weak Chinese trade data impacting sentiment. Chinese data released on Sunday showed exports fell 3.3 percent Y-o-Y while imports fell 19.9 percent Y-o-Y.
10:30am Market Expert
The big challenge for the market near term is the weakness in corporate earnings, says Sandeep Bhatia, ED & Head of Sales, Kotak Institutional Equities.
In an interview with CNBC-TV18, Bhatia says market correction near term will be driven by concerns over earnings growth and not so much by election results.
He expects a pre-Budget rally, but does not see the market giving more than 10-12 percent returns over the next couple of quarters.
Bhatia is not expecting any major tax incentives from the government in this Budget, given the weak fiscal situation.
He says the government needs to do something quickly to stimulate growth as the capex cycle is still showing no signs of recovery.
10:00am Market ChecK
The market fell more than 1 percent in morning trade on fall in rupee post exit polls indicated that BJP may not get majority in Delhi elections. Banks, capital goods, auto and metals drag.
The Sensex dropped 338.46 points to 28379.45 and the Nifty fell 101.40 points to 8559.65. The BSE Midcap and Smallcap indices declined nearly a percent.
More than two shares advanced for every share declining on the Bombay Stock Exchange.
Shares of ICICI Bank, HDFC Bank, HDFC, ITC, Tata Motors, M&M and Hero Motocorp were down 1.5-2.5 percent. Larsen & Toubro dropped 2 percent ahead of Q3 earnings today. A CNBC-TV18 poll expects muted earnings during the quarter with profit rising 1.1 percent and hydrocarbon business reporting losses.
Tata Power and Reliance Infrastructure lost 3-4.5 percent as AAP promised in its manifesto to reduce electricity bills by 50 percent.
Tata Steel shed 3 percent after their Indian and South East Asian operations had a weak quarter though European operationally showed improvement. Deutsche Bank maintains buy rating but cut FY15/16 earnings by 31 percent/24 percent and target price by 29 percent to Rs 480/share as India EBITDA per tonne is the lowest in 23 quarters and the steel price overhang persisted.
GAIL lost more than 4 percent as inventory losses weighed on Q3 earnings but siliver lining was that there was no subsidy paid in Q3. CLSA says GAIL is a conviction sell in Asian utility space with a target of Rs 360 as it is trading 35 percent above historical average PE and building USD 90 a barrel on Brent crude price.
Appollo Tyres tanked 15 percent as the stock reacted to weak earnings as its revenue fell 13 percent to Rs 3,104.8 crore while profit dropped 45 percent at Rs 184.2 crore. Results were also impacted by one time provision of Rs 79 crore on account of retrenchment expenses for South African business.
9:55 am Result poll: Larsen and Toubro (L&T) is expected to report a 1.1 percent (year-on-year) decline in standalone profit at Rs 1,255 crore for Q3FY15, according to a CNBC-TV18 poll. Adjusted profit after tax may jump 10.4 percent.
Net sales are seen going up 11 percent to Rs 15,973 crore during October-December quarter from Rs 14,388 crore in the year-ago period. Operating profit may climb 9 percent year-on-year to Rs 1,826 crore, but margin may slip 20 basis points to 11.4 percent in the quarter gone by.
The pressure in margin may be due to lower margins in the metallurgy and power segments.
On consolidated basis, analysts expect profit at Rs 1,075 crore on revenue of Rs 22,850 crore for the quarter.
9:45 am Result analysis: Shares of Tata Steel slipped 4 percent intraday after it announced disappointing results on Friday late evening. Its profits fell 68.7 percent to Rs 157.1 crore and revenues fell 8.4 percent year-on-year to Rs 33,633 crore.
However, brokerages are mixed on the stock. Barclays maintains overweight rating on Tata Steel with a 12-month price target at Rs 618 per share. It states that improved raw material availability, balance sheet de-leveraging, European business recovery and India volume growth visibility are key drivers for the stock. Deutsche Bank also holds buy rating but has reduced target price by 29 percent to Rs 480 per share and FY15/16 earnings by 31percent /24 percent.
Meanwhile, Kotak reiterates reduce rating and slashed FY2015-17 EBITDA by 9-16 percent with a reduced target price of Rs 400. According to the brokerage, Tata Steel's Indian operations may remain under pressure.
9:30 am Opinion: Sunil Jain, Managing Editor, Financial Express, says though the Delhi poll outcome will not be a referendum for the Narendra Modi government, but it would definitely be a reality check for BJP if the party fails to win in the capital. ''It will be interesting to see how AAP works with the Centre if comes in power,'' says Jain, who feels the party's manifesto has been more realistic this time around. He however expects AAP's reform promises to have an impact on companies like Reliance Infra and Tata Power.
9:22 am Market check: The Sensex is down 232.01 points or 0.8 percent at 28485.90 and the Nifty is down 70.30 points or 0.8 percent at 8590.75. GAIL is down 5 percent, Tata Steel and Tata Power are down 3 percent. Sesa Sterlite and M&M are other losers in the Sensex. ONGC and HUL are up 1 percent while SBI is among gainers in the Sensex.
The market has opened in red as exit polls of Delhi Assembly election indicate that BJP may not get majority to form government.. The Sensex is down 151.41 points or 0.5 percent at 28566.50. The Nifty slips 75.70 points or 0.9 percent at 8585.35. About 93 shares have advanced, 196 shares declined, and 127 shares are unchanged.
Tata Steel, Sesa Sterlite, Tata Power, BHEL and Tata Motors are losers in the Sensex.
The Indian rupee has breached 62 per dollar mark in early trade on Monday, down 31 paise compared to Friday's closing value of 61.69 a dollar.
Agam Gupta, Standard Chartered said, "The US Jobs data release on Friday was very strong which has led to a bout of Dollar strength against all currencies. We expect the USD-INR to trade in the range of Rs 61.80-62.20/USD. Local govt-owned banks will continue to buy dollars on any dips till Rs 61.80-61.85/USD. We expect selling to emerge from exporters on any upticks towards Rs 62.15-62.20/USD.
US markets too ended on a weak note on Friday despite a positive jobs report. The US ten year bond yields soared to 1.95 percent and the dollar index shot past the 94 mark.
Stocks closed down on Friday amid continued concerns over Greece and a strong jobs report that renewed the possibility of an earlier fed rate hike. The CBoE volatility index edged higher to trade near 18.
On the European front, the Greek government is under pressure to find a solution to its funding situation as its current bailout ends at the end of February and there is still a tranche of bailout funds it has not received
Lenders are not ready to release the funds until Greece makes a commitment to continue with the conditions of its bailout. Meanwhile the S&P downgraded its rating on Greece to "b-" from "b."
Asia too was mixed in morning trade as weak trade data from china weighs on sentiment.
Nikkei was trading with mild gains as the yen moved to four-week lows of 118.9 against the dollar. From precious metals space, gold gained for the first time in three sessions, boosted by safe-haven bids as Asian equity markets fell on disappointing Chinese trade data.