Sensex tanks 427 points, sees biggest weekly loss in 2015

The market reversed all its gains on Friday, reacting to the fears that rate cut cycle may get stopped due to rise in CPI inflation. The Sensex shed more than 680 points from day's high. However, the index had climbed 253 points in morning trade today following clearance to Insurance Bill by Rajya Sabha.

The 30-share BSE Sensex fell 427.11 points or 1.48 percent to close at 28503.30 and the 50-share NSE Nifty dropped 128.25 points or 1.46 percent to 8647.75.

The broader markets plunged too, the BSE Midcap and Smallcap indices were down 1.4 percent and 1.5 percent, respectively. More than two shares declined for every share advancing on the Bombay Stock Exchange.

The consumer price index (CPI) rose to 5.37 percent in February against 5.11 percent in the previous month mainly due to a spike in food inflation (6.7 percent) with vegetables registering the sharpest rise. Even the CPI data for March is likely to increase further on the back of country-wide unseasonal rains that impacted Rabi crops.

"It is not such a comfortable number as to guarantee a rate cut in April specially since the Reserve Bank of India (RBI) has moved [recently]," JPMorgan economist Sajjid Chenoy said. The RBI cut repo rate by 50 basis points to 7.5 percent in 2015.

As far as the equity market is concerned, market expert, Anand Tandon says: "I don't know whether it will be a major negative but the fact that the trend is reversed a bit would certainly not be good news. This time when the market is looking for more positives than negatives this is one more drag on the market at least."

Meanwhile, the industry output data (IIP) for January came in at 2.6 percent against 3.2 percent in previous month.

Insurance companies got a further boost after the Rajya Sabha passed Insurance Laws (Amendment) Bill, 2015 yesterday. Foreign ownership limit in sector hiked to 49 percent from 26 percent. Experts believe this will attract more foreign money, may be more than Rs 50,000 crore in insurance sector. Max India and Reliance Capital fell 3-4 percent due to market sentiment.

For the week, the Sensex and Nifty tanked 3.2 percent each, the biggest weekly loss in the current calendar year. The sentiment dented by US rate hike fears and low hopes for further rate cut in India post February CPI inflation.

Today, the Indian rupee also saw major selling pressure following weakness in equity markets. The currenty declined 46 paise to 62.96 a dollar.

Banks, FMCG, capital goods, pharma and auto stocks pulled the market lower. Bank Nifty dropped 2 percent as ICICI Bank, Axis Bank and State Bank of India were down 2-2.5 percent while rival HDFC Bank fell over a percent.

Capital goods majors Larsen & Toubro and BHEL tanked over 3 percent. ITC was down 2 percent as Karnataka Government raised value added tax on cigarette and bidi between 17 to 24 percent.

Bajaj Auto lost 2.6 percent after brokerage house CLSA maintained underperform rating on the stock, citing structural as well as cyclical headwinds. Tata Motors slipped 1.2 percent on a 5.9 percent decline in Jaguar Land Rover February retail sales.

Among others, Reliance Industries, TCS, Sun Pharma, HUL, Wipro, Cipla, Hindalco, Tata Steel, Tata Power and Sesa Sterlite were down 1.5-2.6 percent. However, ONGC and Bharti Airtel advanced over half a percent.

DLF surged 6 percent as Securities Appellate Tribunal quashed SEBI's order on DLF. Managing Director Rajiv Talwar says it is a big relief. ''We will look to tap capital markets soon,'' he adds.

Asian markets were upbeat today. Japan's Nikkei gained 1.3 percent, closing above 19000-mark and Shanghai rose 0.7 percent. European markets traded flat (at 16 hours IST).

3:30 pm Market close: After just a day of gain, the market lost sharply today. The Sensex ended down 427.11 points or 1.5 percent at 28503.30. The Nifty also was down 128.25 points or 1.5 percent at 8647.75.  About 925 shares have advanced, 1949 shares declined, and 176 shares were unchanged.

L&T, BHEL, Bajaj Auto, Axis Bank and Hindalco were among losers in the Sensex. Gainers were ONGC, Bharti Airtel and NTPC.

03:00pm Market Update: The Sensex fell 397.93 points or 1.38 percent to 28532.48 and the Nifty lost 118.45 points or 1.35 percent to 8657.55.

About 842 shares have advanced, 1946 shares declined, and 174 shares are unchanged on the BSE. The Indian rupee too declined, down 30 paise to 62.80 a dollar.

02:55pm Edelweiss on Essel Propack: Shares of Essel Propack gained further, up 4 percent after Edelweiss initiated coverage with buy on it and set a target price of Rs 184, implying 57 percent upside.

EPL is the largest laminated tubes packaging firm globally and a force to reckon with in the global packaging industry. Adhering to the growth cornerstones of innovation and customer-driven R&D, the company has captured one-third market share in laminated tubes.

The brokerage expects return on equity to exceed 21 percent in FY17 from 13.5 percent in FY14 as penetration in non-oral care segment is on the rise; and subsidiaries in Europe & America are turning profitable

02:50pm Gujarat Pipavav Port in Focus: Gujarat Pipavav Port today said its Managing Director Prakash Tulsiani has stepped down from the post to pursue other career opportunities and the company has identified his successor.

The company also said Tulsiani's successor has been identified by Gujarat Pipavav's promoter APM Terminals and the details would be made public on completion of appointment formalities.

Tulsiani had joined APM Terminals Organisation as Chief Operating Officer of Gateway Terminals India Private Ltd in 2005. Gujarat Pipavav Port is operated by APM Terminals, a global container terminal operator.

02:40pm ITC tumbles: Karnataka Government raised value added tax on cigarette and bidi between 17 to 24 percent.

The government also hiked tax on petrol and diesel by 1 percent. Apart from cigarettes, bidis and betel, liquor will also be costlier, and so also property registration in the Karnataka.

02:30pm Inflation data drags market: The February consumer price index (CPI) rose to 5.37 percent versus 5.11 percent in the previous month, which raised doubts over RBI's further rate cut. The rise in inflation was mainly due to a spike in food inflation (6.7 percent) with vegetables registering the sharpest rise.

The Reserve Bank of India reduced repo rate by 50 basis points in 2015 to 7.5 percent.

However, the industry output data (IIP) for January came in at 2.6 percent, higher than the CNBC-TV18 poll estimates of 0.47 percent although consumer goods and electricity continue to see contraction.

The CPI data for March is likely to increase further on the back of country-wide unseasonal rains that impacted Rabi crops. February also saw hike in petrol and diesel prices which is reflected in transport inflation.

Rural inflation too inched up month-on-month at 5.79 percent versus 5.34 percent.

Experts now say an April rate cut is most unlikely now and the earliest one can expect the RBI to slash rate can't be before July.

"It is not such a comfortable number as to guarantee a rate cut in April specially since the Reserve Bank of India (RBI) has moved [recently]," JPMorgan economist Sajjid Chenoy said.

02:00pm Market Check: The market extended losses in afternoon trade with the Sensex falling more than 400 points led by banks, FMCG and capital goods stocks. The broader markets fell more than 1 percent too.

The 30-share BSE Sensex plunged 403.26 points or 1.39 percent to 28527.15 and the 50-share NSE Nifty shed 124.20 points or 1.42 percent to 8651.80.

More than two shares declined for every share advancing on the Bombay Stock Exchange.

Shares of ICICI Bank, ITC, Larsen & Toubro, Axis Bank, Reliance Industries, HDFC Bank, TCS, Sun Pharma, State Bank of India and Tata Motors were the 10 biggest contributors to the Sensex fall.

However, HDFC, Bharti Airtel, ONGC and Coal India bucked the trend with marginal gains. DLF rallied 6 percent as the Securities Appellate Tribunal (SAT) has quashed the SEBI order against DLF in capital markets case.

SAT says SEBI has not justified condemning DLF in conducting its business. "We have not found shortcoming in DLF's IPO prospectus and saw adequate disclosures made by DLF in 2007 IPO," says SAT.

"We saw over-regulation by SEBI on DLF. SEBI should not be influenced by whistleblowers," it adds.

1:45 pm Interview: The company will be opening a new plant in Chennai having capacity of 40,000 metric tonnes (mt) annually and would need capex of around Rs 150 crore, said Ravi Chawla, MD, Gulf Oil Lubricants India in an interview to CNBC-TV18.

The plant is likely to come on stream in early part of 2017.

The company is also looking at upping its capacity at the Silvassa facility from 75000 mt to go up to 90000 mt for which Rs 40 has already been put in, said Chawla.

The capex funding would be partly internal and partly external sources.

1:30 pm Exclusive: DIPP gave clarification of foreign direct investment (FDI) norms on construction. The clarifications came on two counts; one on exit clause related norms and second on minimum capitalisation.

On minimum capitalisation, Department of Industrial Policy and Promotion (DIPP) has said that no new foreign direct investment (FDI) will be allowed if the minimum cap of USD 5 million is not achieved within six months. After the minimum capitalisation norms are achieved then FDI can be brought in for a period of 10 years or to the period upto which the project is completed. It also said that minimum capitalisation would be project specific and not company specific.

On exit clause there are several clarifications - Foreign Investment Promotion Board (FIPB) nod would be needed for exit of foreign partner if the project is on-going. However, if the project is complete then it can be on an automatic basis.

The market continues to slide in afternoon trade. The Sensex is down 273.61 points or 0.9 percent at 28656.80 and the Nifty is down 80.25 points or 0.9 percent at 8695.75. About 940 shares have advanced, 1655 shares declined, and 182 shares are unchanged.

Sun Pharma, Axis Bank, Wipro, BHEL and Bajaj Auto are among losers in the Sensex. Gainers include ONGC, Coal India, NTPC and HDFC.

Securities Appellate Tribunal (SAT) has quashed Securities and Exchange Board of India's (SEBI) order against DLF's three-year ban from capital markets, stating that the market is not justified in condemning the real estate developer in conducting its business. Shares of DLF soared 9 percent after the tribunal's order.

Meanwhile, demand for gold picked up across Asia this week as bullion prices dropped to their lowest level in three months after the longest losing streak in more than 40 years, but caution still prevailed, traders said.

Gold, trading at about USD 1,158 an ounce, touched USD 1,147.10 on Wednesday, the lowest since December 1. The metal fell for nine straight sessions to Thursday, the longest losing streak since 1973.

The lower prices attracted bargain-hunters across Asia, the top consuming region, although wariness over the price outlook kept a lid on purchases.

12:58pm Market Update: Equity benchmarks continued to see selling pressure in afternoon trade with the Sensex falling 284.23 points or 0.98 percent to 28646.18. The Nifty also struggled at 8700, down 81.95 points or 0.93 percent to 8694.05.

12:45pm DLF in News: The Securities Appellate Tribunal (SAT) has quashed the SEBI order against DLF in capital markets case. The tribunal has reduced 3-year ban for trading in capital markets to 6 months.

SAT says SEBI has not justified condemning DLF in conducting its business. "We have not found shortcoming in DLF's IPO prospectus and saw adequate disclosures made by DLF in 2007 IPO," says SAT.

"We saw over-regulation by SEBI on DLF. SEBI should not be influenced by whistleblowers," it adds.

12:20pm FII inflows to increase: Following the passage of the Insurance Bill in Rajya Sabha late on Thursday - which raises the FDI cap in the sector to 49 percent from 26 percent - hopes are up that foreign partners of insurance companies will make a beeline to raise stake in existing JVs.

Speaking about the possible capital inflows into the country, Suresh Ganapathy of Macquarie Capital said he expects Rs 20,000 crore from foreign insurance partners in the coming days. Ganapathy says the move will help give clarity on valuations of insurance companies as well. However, regulatory changes are likely to hamper valuations of those banks that sell insurance products. The house has underperform rating on SBI with a target price of Rs 250 per share.

12:00pm Market Check
The market took a U-turn today, giving up morning gains as the Nifty fell more than 150 points from the day's high. The broader markets showed some resilience but traded in the red, down 0.4 percent.

The Sensex lost 327.95 points or 1.13 percent to 28602.46 and the Nifty plunged 97.30 points or 1.11 percent to 8678.70 due to selling in banks, FMCG, capital goods, auto and technology stocks.

Nearly two shares declined for every share advancing on the Bombay Stock Exchange.
 
Insurance companies got a further boost as the Insurance Bill passed in Rajya Sabha yesterday. Industry voices gave it a thumbs up. SBI Life Insurance told CNBC-TV18 that the company is in preliminary talks with BNP Paribas. Brokerages too sound bullish.

Jindal Steel and DLF traded weak ahead of key court orders. JSPL fell over 2 percent as hearing on coal blocks Gare Palma IV 2 & 3 likely is today while DLF remained in focus as the Securities Appellate Tribunal is likely to give its final order in the DLF against SEBI case.

Tata Motors fell more than 1 percent as JLR's total retail sales declined 5.9 percent year on year due to product transition phase. Bajaj Auto plunged 2.6 percent after brokerage house CLSA maintained underperform rating on the stock, citing structural as well as cyclical headwinds.

Shares of HDFC Bank, L&T, ITC, Axis Bank, ICICI Bank, Reliance Industries, Sun Pharma, HUL and Wipro slipped 1-2.5 percent.

Meanwhile, the Indian rupee also declined following weakness in equity markets, down 20 paise to 62.70 a dollar.

However, Asian markets remained strong. Japan's Nikkei hit a fresh multi-year high, breaching the 19,000 level. Brent crude held USD 57 a barrel on a weaker dollar.

11:55 am Gold: Gold prices rose by Rs 131 to Rs 25,950 per 10 grams in futures trade on Friday as speculators created fresh positions after the precious metal recovered in the global markets.

The metal for delivery in April moved up by Rs 114, or 0.44 percent, to Rs 25,769 per 10 grams in a turnover of 774 lots. Analysts said recovery in the precious metal in global markets mainly helped gold to trade higher at futures trade here. Globally, gold rose as much as 0.7 percent to USD 1,161.855 an ounce in Singapore.

11:45 am Market in deep red: The market is slipping away. After tumbling around 300 points, the Sensex is at 28646.52, down 283.89 points or 0.9 percent. The Nifty is down 84.40 points or 0.9 percent at 8691.60. About 905 shares have advanced, 1503 shares declined, and 166 shares are unchanged.

11:30 am Buzzing: Shares of Tata Motors declined 0.7 percent intraday Friday following sluggish retail sales reported by Jaguar Land Rover (JLR) in February.

Jaguar Land Rover, the UK-based premium luxury vehicles manufacturer and subsidiary of Tata Motors, retailed 28,689 vehicles in the month of February, down 5.9 percent compared to 30,487 vehicles sold in February 2014.

"This expected change in sales is largely due to the run out of the Land Rover Freelander model and the company's product launch plans, which will see the introduction of new models in the coming months," says the company.

Land Rover delivered 24,185 vehicles in February, down 7.65 percent and Jaguar retailed 4,504 vehicles, down 15 percent compared to same period last year.

Gainers & losers: Stocks to buy after FII hike in insurance

Sharp sell-off drags the market further. The Sensex is down 132.42 points at 28797.99, and the Nifty is down 40.05 points at 8735.95. About 1031 shares have advanced, 1282 shares declined, and 164 shares are unchanged.

HDFC, Coal India, NTPC, Bharti Airtel and ICICI Bank are top gainers in the Sensex. Among the losers are Bajaj Auto, Axis Bank, Sun Pharma, BHEL and GAIL.

Meanwhile, Income Tax Department has slapped a Rs 20,495 crore tax demand on Cairn India  for failing to deduct withholding tax on alleged capital gains made by its erstwhile promoter, Cairn Energy Plc. Cairn India is down 1 percent.

Cairn India said it does not agree with the tax demand and will pursue all possible options to protect its interest.

Earlier this week, the I-T Department had slapped a Rs 10,247 crore tax demand on Cairn Energy Plc for an alleged Rs 24,500 crore worth capital gains it made in 2006 while transferring all its India assets to a new company, Cairn India, and getting it listed on the stock exchanges.

11:00 am Market Update: TheSensex is down 141.61 points or 0.49 percent at 28788.80, and the Nifty declined 42.20 points or 0.48 percent at 8733.80.

10:50 am Interview: Now with the passage of the Insurance Bill, BNP Paribas Cardif would definitely like to hike stake in the company but at present the discussions are at preliminary stages and the final numbers haven't been decided, said Arijit Basu, MD & CEO, SBI Life Insurance.

The discussions had already commenced post the insurance Ordinance, he added in an interview to CNBC-TV18.

On the listing of SBI Life per se, he said it is unlikely to happen in FY15-16 but the process could begin in the next fiscal because of various regulatory approvals.

SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74 percent of the total capital and BNP Paribas Cardif the remaining 26 percent. SBI Life Insurance has an authorized capital of Rs. 2,000 crores and a paid up capital of Rs 1,000 crores.

According to him, the growth trajectory of SBI Life is on track and the company is confident of delivering upto 25 percent growth in FY15 and similar growth for the next two years at least. He aslo added that the company at present was adequately capitalised and did not need capital for the next two years, he added.

10:25 am Tata Motors under pressure: Jaguar Land Rover's (JLR - subsidiary of Tata Motors) retail sales in February fell to 28,689 units, down 5.9 percent compared to 30,487 units sold in the year-ago period.

Land Rover retail sales declined 7.65 percent to 24,185 units and Jaguar sales dropped 15 percent to 4,504 units during the same period.

10:08 am Market check: The market slips into red. The Sensex is down 62.75 points or  at 28867.60 and the Nifty is down 23.10 points  at 8752.90. About 1035 shares have advanced, 837 shares declined, and 158 shares are unchanged.

The market is still holding up some portion of early gains. The Sensex is up 97.64 points at 29028.05, and the Nifty is up 24.55 points at 8800.55. About 1126 shares have advanced, 699 shares declined, and 141 shares are unchanged.

HDFC, ICICI Bank, Cipla, Sesa Sterlite and Tata Power are top gainers in the Sensex. Among the losers are Sun Pharma, Hindalco, Maruti, Hero and GAIL are laggards.

Oil prices climbed in Asia as news of a deal to end a strike at US refineries helped reverse losses that had been fuelled by another leap in US inventories. US benchmark West Texas Intermediate (WTI) rose 12 cents to USD 47.17 and Brent climbed 31 cents to USD 57.39 in late-morning trade. WTI sank USD 1.12 in New York and Brent tumbled 46 cents in London yesterday after a government report showed surging US stockpiles, adding to a global oversupply.

The US Department of Energy on Wednesday said inventories hit a fresh record high of 448.9 million barrels last week, while stockpiles at the Cushing terminal hub in Oklahoma --the price settlement point for WTI, also increased.

9:50 am Washing dirty linens in public? Sahara has publicly cited the malafides of the Mirach group for explaining why the USD 2 billion deal fell apart. However, a few hours to go before the next hearing in Supreme Court, more details are emerging about the claims of Sahara.

CNBC-TV18 managed to access emails that were exchanged between officials of the Sahara Pariwar, officials of the Mirach group as well as officials from the Bank of America.

Earlier, Mirach had offered to extend USD 2 billion lifeline to the Sahara Pariwar but those talks broke down and the primary reason that Sahara had blamed was that Mirach was acting in a mala fide nature. Sahara also claimed that they had forged documents with respect to the amount of money that was available with them and also claiming that Mirach did not have the necessary funds to pull through with the USD 2 billion transaction.

9:30 am Exclusive interview: Throwing more light on the passage of the Insurance (Amendment) Bill in the Rajya Sabha, Jayant Sinha, Minister of State for Finance said it was historic moment for the government's growth agenda. He also assured that the bill ensures insurance premiums will not leave the country. "Citizens in this country should be very reassured that their premiums will stay in the country and will be used to of course make payments on claims but also at the same time be used to build and strengthen the country," he assured.

The market rallied further in early trade on Friday with the Sensex reclaiming 29000-mark on positive global cues and after the Insurance Bill passed in Rajya Sabha. The Sensex is up 182.32 points or 0.6 percent at 29112.73, and the Nifty is up 48.85 points or 0.6 percent at 8824.85. About 638 shares have advanced, 94 shares declined, and 83 shares are unchanged.

Max India and Reliance Capital surged as foreign ownership limit in insurance sector has been hiked to 49 percent from 26 percent. HDFC, ICICI Bank, Sesa Sterlite, L&T and Tata Power are top gainers in the Sensex. Among the losers are Tata Motors, Reliance and Infosys.

Delight and despair for the macro-economy after the factory output in January accelerated by 2.6 percent raising hopes of a recovery. But inflation also spurts in February dashing hopes of a near-term rate cut.

The Indian rupee opened flat at 62.49 per dollar today against previous day's closing value of versus 62.50 a dollar.

The US dollar fell about half a percent, pausing its recent rally. The euro edged higher to 1.06 levels, up from 12-year lows

Pramit Brahmbhatt of Veracity said ,"Reduction in FII inflows coupled with profit booking in local equities pressurised rupee to depreciate. However today, gains in Asian equities may support the local unit. Range for the day is seen between 62.00-63.00/dollar."

Among global markets, the US stocks closed higher as mixed economic data indicated to some investors that the Federal Reserve will not raise interest rates as early as anticipated. The Dow and S&P gained more than 1 percent to trade moderately higher for the year. The Nasdaq extended gains for the year.

Retail sales for February fell 0.6 percent, missing expectations of a slight gain. Meanwhile, weekly jobless claims fell more than expected to 289,000, below the prior week's 320,000.

In Asia, the Nikkei is trading at a fresh 15-year high.

In commodities, crude prices weaken with both benchmark Brent and Nymex crude giving up gains. Brent crude trades around USD 57 per barrel levels. From precious metals space, gold prices remain largely unchanged at USD 1160 an ounce.