Sensex falls for 6th day; PSU banks, oil, cap goods drag
25 March 2015
03:30pm Market Closing: The market continued to fall for the sixth consecutive session today. The Sensex fell 49.89 points to 28111.83 while the Nifty lost 12.15 points to 8530.80 ahead of expiry of March derivative contracts.
The broader markets underperformed benchmarks; the BSE Midcap and Smallcap indices slipped 0.5 percent and 0.7 percent, respectively.
Capital goods, power, oil, PSU banks and HDFC group stocks were under pressure. NTPC, GAIL, Larsen & Toubro, Coal India, SBI, PNB and NMDC dropped 2-4 percent while ICICI Bank, Wipro, Tata Motors, Sun Pharma, Sesa Sterlite, HCL Tech, DLF and Cairn India gained 1.5-4 percent.
About 980 shares have advanced, 1861 shares declined, and 198 shares are unchanged on the BSE.
03:12pm Airline JV: Sources told CNBC-TV18 that Qatar Airways is in talks with Indigo to explore possible joint venture. The company is also in talks with SpiceJet, said sources.
03:10pm AXISCADES up 10%: Alchemy Capital Management Private Limited bought 2.90 lakh shares of AXISCADES Engineering Technologies (formerly known as Axis IT&T) at Rs 235 apiece. Alchemy India Long Term Fund purchased 4.25 lakh shares at Rs 235 while Jupiter Capital Private Limited sold 9.57 lakh shares of the company at Rs 235/share
AXISCADES is engaged in the provision of engineering services.
02:50pm Oil at USD 100/bbl in 2016: Oil prices could hit USD 100 a barrel by the end of next year, US oil magnate T Boone Pickens said, revising his previous forecast which said they would reach that level as early as this year.
"I think you could very well be at USD 100 a barrel by the end of 2016," the 86-year-old billionaire and chair of BP Capital told an audience of about 100 at the Commonwealth Club of California in San Francisco.
Oil prices have fallen sharply amid weaker Asian and European demand and a boom in North American production. US crude futures have dropped more than 60 percent since highs last summer and were at around USD 47.40 a barrel on Tuesday.
Pickens said the idea of "peak oil" - the point in time at which oil production will go into an irreversible decline - shouldn't be dismissed on account of the increase in US production. Other regions are seeing their output decline, he said.
02:30pm Sun Pharma open to large acquisitions: Sun Pharmaceutical Industries, India's largest drugmaker by sales, said its USD 3.2 billion acquisition of smaller rival Ranbaxy Laboratories will not restrict it from making further large acquisitions.
The company will look to invest more than USD 300 million in research and development and is not considering any job cuts post the close of the deal, Managing Director Dilip Shanghvi told reporters in Mumbai.
Shanghvi, who founded Sun Pharma and is one of the country's richest men, added that the company's "most important focus" would be to win confidence of regulators.
Sun Pharma's third-quarter profit was hit by costs incurred to address observations raised by the US Food and Drug Administration after an inspection of the company's manufacturing plant in western India.
"Every investment I have made outside of Sun is financial, I have no interest in running those businesses," said Shanghvi, who invested USD 290 million for a 23 percent stake in wind turbine maker Suzlon Energy last month.
02:00pm Market Check
The market remained directionless in afternoon trade with the Sensex hovering around 28200 level, up 29.69 points at 28191.41. The Nifty rose 6 points to 8548.95 while the broader markets also continued to be rangebound.
Nearly two shares declined for every share advancing on the Bombay Stock Exchange.
NTPC topped the selling list on Sensex down 3 percent. The company bagged five mines -- Chhatti Bariatu, Chatti Bariatu (South), Kerandari, Talaipalli amd Dulanga.
Shares of Larsen & Toubro, TCS, ONGC, State Bank of India, GAIL and Coal India declined 1-2 percent whereas ICICI Bank extended gains, up 2 percent. Axis Bank and M&M rose 1.5 percent each.
Tata Motors has been among the top Nifty gainers today, up 1.7 percent. The board approved rights issue of 6 shares for every 109 shares held at Rs 450 per share. The company proposed to raise up to Rs 7,500 crore via the rights issue. Tata Motors DVR approved rights issue at Rs 271 per share.
The merger deal between Sun Pharma and Ranbaxy Labs is finally sealed. Sun and Ranbaxy gained more than 1 percent after Sun announced the completion of the merger process. Shareholders will get 0.8 shares of Sun Pharma for each share held in Ranbaxy. Sun MD, Dilip Shanghvi says they are looking to expand in the US markets and will invest around USD 300 million for research and development.
01:25pm Market Expert: Even as the market may continue to consolidate for a little more while, investors should use this time to ''build a quality portfolio'', Nitin Jain, principal investment manager at Kotak UK, told CNBC-TV18.
While some investors have talked about shifting back to consumer stocks in the wake of earnings for cyclical companies appearing to require more time than was previously expected, Jain said he would not look to tweak to portfolio as yet.
01:00pm Market Check
The market continued to be choppy ahead of expiry of March derivative contracts (on Thursday). The Sensex gained 12.16 points at 28173.88 while the Nifty fell 1.15 points to 8541.80.
The broader markets underperformed with the BSE Midcap and Smallcap indices falling 0.2-0.5 percent. Declining shares outnumbered advancing ones by a ratio of 1649 to 913 on the Bombay Stock Exchange.
Tata Motors has been among the top Nifty gainers today. The board approved rights issue of 6 shares for every 109 shares held at Rs 450 per share. The company proposed to raise up to Rs 7,500 crore via the rights issue. Tata Motors DVR approved rights issue at Rs 271 per share.
The merger deal between Sun Pharma and Ranbaxy Labs is finally sealed. Sun and Ranbaxy gained 1 percent after Sun announced the completion of the merger process. Shareholders will get 0.8 shares of Sun Pharma for each share held in Ranbaxy. Sun MD, Dilip Shanghvi says they are looking to expand in the US markets and will invest around USD 300 million for research and development.
Cipla has launched generic drug Sofosbuvir in India under the brand name Hepcvir. Following the non-exclusive licensing agreement signed with Gilead Sciences in September last year, to manufacture and market chronic hepatitis C medicines, Cipla is now all set to make the drug Sofosbuvir available to Indian patients in a week's time.
However, Ipca Labs tumbled 13 percent on import alert for its Pithampur & Silvassa units, which is in addition to import alert imposed on Ratlam facility in January. The management says they are taking necessary corrective action.
12:20pm Daiichi Sankyo on Sun-Ranbaxy merger: Through this merger completion, Ranbaxy will be delisted from the Indian stock exchanges, with Ranbaxy shareholders receiving 0.8 shares of Sun Pharma for each share of Ranbaxy.
Daiichi Sankyo currently holds about 63.4 percent of Ranbaxy shares, which at the current rate equates to an estimated profit around 340 billion yen. This profit margin is due to be included as profit/loss related to discontinued operation in the consolidated results of Daiichi Sankyo for March 2015.
The full earnings for this fiscal year are only forecasts for the Daiichi Sankyo Group, so this profit margin will not be included in the profits of consolidated result forecasts for March 2015.
Through the merger, Sun Pharma becomes the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.
12:00pm Market Check
The market continued to consolidate in noon trade with the Nifty hovering around the 8,550 mark supported by pharma and banking stocks. The broader markets were in-line with the frontliners.
Tata Motors rose over a percent as the board today is expected to consider detailed terms of proposed rights issue of upto 7500 crore and will also mull buy-back of secured non-convertible debentures with face value of Rs 1,250 crore.
Shares of ICICI Bank, HDFC and Mahindra & Mahindra gained more than 1 percent while L&T, ONGC, NTPC, GAIL, Coal India and BHEL declined 1-2.5 percent.
Sun Pharma rallied 2 percent ahead of a press meet today. Most likely the company may highlight the regulatory nods for merger with Ranbaxy. The stock has been active since CCI gave its nod for the Sun-Ranbaxy merger.
Ipca Labs tumbled 13 percent on import alert for its Pithampur and Silvassa units, which is in addition to import alert imposed on Ratlam facility in January.
Globally, Asian markets fell on the back of an uninspiring lead from Wall Street. Shanghai took a breather, down 1 percent after a 10-day winning streak.
11:45am Angel on Ipca import alert: The USFDA has imposed import alerts on Silvassa and Indore (formulation facilities for US) for IPCA.
"Hydroxychloroquine Sulfate and Propanolol Hydrochloride, which accounted for around 45 percent of its total US sales in FY2014, are exempted from the ban. With this all the key US facilities of the company are under USFDA import alert. In FY2014 US contributed sales of Rs 419.6 crore (12 percent of total sales and 20 percent of exports, with Formulation: API mix of around 61:39). Now on back of the ban, around Rs 231 crore worth of sales will be impacted," said Sarabjit Kour Nangra, VP Research - Pharma, Angel Broking.
"Whilst we are negatively surprised by the import alerts, we believe that now IPCA will have to follow the measures laid out by the US FDA to resolve the issue. We have cut the FY2016 EPS numbers by 20 percent. Though the timelines of the resolve are uncertain, we believe the size of the company, and low dependence on US, along with Indian geographies outperforming the market growth, the company can easily sustain a 15-18 percent growth in sales and hence a significant downside is limited. Any downside can be used by investors to buy into the stock, with a long term view on the stock. We remain neutral on the stock," she added.
11:30am HCC bags order: Hindustan Construction Company won arbitration award of Rs 217.18 crore for extension of time (EOT) cost claim in Lucknow-Muzaffarpur National Highway Project after 20 momths of hearing.
Speaking about the project, Praveen Sood, CFO at HCC said a major component of the award is the interest component. The construction company's order book, including L1 projects, stands at approx Rs 18,000 crore, he said.
He informed a few EPC contracts of the company in the past were delayed due to land clearance issues adding that there exists outstanding claims of approximately Rs 4,000 crore with various govt authorities.
HCC has secured Rs 217.18 crore as an arbitration award in the Lucknow-Muzaffarpur National Highway Project case.
11:00am Market Check
The market remained rangebound with the Nifty hovering around 8540-8600 levels. Private banking & financials, FMCG and healthcare stocks supported the market whereas oil & gas, capital goods, metals and power stocks were under pressure.
The Sensex advanced 51.75 points to 28213.47 and the Nifty went up 10.45 points to 8553.40. The market breadth turned in favour of declines with a ratio of 1318:921.
Asian equity markets traded weak, struggling for direction on the back of an uninspiring lead from Wall Street overnight. Brent hovered near USD 55 a barrel while gold traded near 2 and half weeks highs.
Sun Pharma gained 2 percent ahead of a press meet today at 12, which will be most likely to highlight the regulatory nods for merger with Ranbaxy. The stock has been active since CCI gave its final nod for the Sun-Ranbaxy merger.
Tata Motors recovered yesterday's losses, up 1.4 percent ahead of a board meet today to consider detailed terms of proposed Rs 7,500 crore rights issue and consider buy-back of secured non-convertible debentures with face value of Rs 1,250 crore.
NTPC remained in focus as the company has been re-allotted five mines out of the total 43 mines, which were to be allocated to PSUs. CLSA highlighted the re-allocation of these mines is a positive event but key is the execution, which has lagged historically. Also these mines will have limited impact on earnings in the near term.
IPCA Labs tanked 10 percent as the company received an import alert for Pithampur and Silvassa units, which is in addition to import alert imposed on Ratlam facility in January.
Rolta India gained 3.4 percent as the company and Hitachi India establish partnership to explore new business opportunities. The management said that they will do certain projects exclusively with Hitachi and will bid for smart city projects along with them.
10:50am Interview: Talking about the Rolta & Hitachi India partnership to explore new opportunities, KK Singh, CMD, Rolta India said the partnership would give the company access to international markets like Japan and also exposure to Hitachi clients.
According to Singh, the partnership would bring together the cutting edge hardware technology of Hitachi and Rolta's software expertise and would help to bid aggressively for infra projects related to smart cities.
The partnership with Hitachi is for big data analytics, said Singh.
The company plans to set up a joint venture with Hitach for manufacturing facility in India and do certain exclusive projects with Hitachi. The JV if established would bring in around Rs 50-100 crore, out of which around fifty percent share would be of Rolta, said Singh.
10:25am Market Expert: The market is running out of positive catalysts and there are more of downside risks over the next couple of quarters, says Pramod Gubbi, Director-Institutional Sales, Ambit Capital.
However, he does not see the Nifty falling below 8200 in the event of a correction, though he warns that individual stocks may fall sharply.
In an interview to CNBC-TV18, Gubbi says the possibility of a rate hike by the US Federal Reserve has already been discounted. Even otherwise, a rate hike is unlikely to act as a negative trigger for global markets, he says.
Gubbi is bullish on the pharma sector, and expects the Sensex to rise to 34,000 by the end of this calendar.
He does not see earnings growth recovering before the second half of next fiscal.
10:00am Market Check
The market continued to consolidate for the third consecutive session today ahead of expiry of March derivative contracts (on Thursday). The Sensex rose 48.30 points to 28210.02 and the Nifty advanced 10.50 points to 8553.45. The broader markets were flat too.
Taher Badshah of Motilal Oswal AMC says broad contours of the market haven't changed from a medium to long-term perspective and would continue to deploy money into stocks that the house has conviction in.
He is skeptical of the fourth quarter earnings but believes that market has already priced-in moderation in earnings.
Shares of HDFC, Tata Motors and Sun Pharma topped the buying list, up 1-1.6 percent followed by ICICI Bank, HDFC Bank, ITC, Infosys, HUL, Mahindra & Mahindra, Dr Reddy's Labs and Cipla with 0.3-0.9 percent upside.
However, NTPC and GAIL fell more than 2 percent. L&T, Reliance Industries, TCS, ONGC, Axis Bank, Sesa Sterlite, Bharti Airtel, Tata Steel and BHEL were down 0.3-1 percent.
In the broader space, Godrej Properties rallied 3 percent after the real estate company launched project in Pune and signed residential project deal in Kolkata.
09:40am Morgan Stanley on Jubilant: Brokerage house Morgan Stanley has retained its 'underweight' rating on Jubilant Foodworks, citing increased competition, lack of innovation and high prices of its pizzas as the key reasons.
Morgan Stanley's assessment is based on a consumer survey conducted by it.
"Moderation in SSG is not entirely macro driven--increased competition and lack of innovation are factors that may have contributed to the current trend of sluggish sales," said the Morgan Stanley note to clients.
The brokerage has trimmed its FY16 earnings per share forecast for the company to Rs 19.9 from Rs 20.6, and says this is 29 percent below consensus estimates in the broking industry.
09:15am Market Check
The market opened marginally higher on Wednesday, taking support from stocks like pharma, FMCG and banks. The Sensex rose 73.99 points to 28235.71 and the Nifty climbed 25.95 points to 8568.90.
About 312 shares have advanced, 99 shares declined, and 98 shares are unchanged on the BSE.
Sun Pharma and Ranbaxy Labs gained more than 1 percent as Sun said merger of Ranbaxy with company has been consummated.
Tata Motors, Dr Reddy's Labs, NTPC, BHEL, Lupin, Cairn India and Hindalco advanced more than 0.5 percent while Bharti Airtel, Wipro, GAIL, Coal India, Reliance Industries, NMDC, Jindal Steel, Power Grid Corp and Bank of Baroda declined.
The Indian rupee has opened marginally lower at 62.32 per dollar today against previous day's closing value of 62.26 a dollar.
The US dollar rebounded against the euro on persistent bullish sentiment toward the greenback. The euro slipped below 1.10 to the dollar.
NS Venkatesh of IDBI Bank said, "The currency market today is expected to take cues from the month-end demand from importers which could put some pressure on the rupee. The rupee is expected to trade between 62.20-62.40/dollar today."
Overnight, US indices closed weak for the second successive session Tuesday. Macro indicators like inflation and housing sales data pointed to further strengthening of the economy, and stoking expectations that the Fed may hike rates ahead of schedule.
Asian shares were mixed, with Japan, Singapore and Korea slightly higher, and Hong Kong and Taiwan trading down.