Sensex up 219 points, Nifty ends at 8286; banks outperform
28 April 2015
3:30 pm Market close: The market made a strong closing on late buying. The Sensex ended up 219.39 points or 0.8 percent at 27396.38 and the Nifty was up 71.80 points or 0.9 percent at 8285.60. About 1650 shares advanced, 1086 shares declined and 146 shares were unchanged.
Banks made a superub comeback led by ICICI Bank (up 8 percent), Axis Bank and SBI (both up 2 percent). Maruti, BHEL, NTPC and Tata Motors are top gainers in the Sensex. Among the losers were ITC, Coal India, Infoys, Reliance and HUL.
3:15 pm Bullish World Bank: In a major boost to the market, World Bank estimates India's GDP growth at 7.5 percent in FY16 and 7.9 percent in FY17. It says that India needs to further rationalise subsidies. World Bank thinks tax-to-GDP ratio may rise after India implements GST but land acquisition remains hurdle in the country's efforts to boost infrastructure.
3:00 pm Market check: The market does a somersault and surges ahead. The Sensex is up 285.89 points or 1 percent at 27462.88, and the Nifty is up 89.60 points or 1 percent at 8303.40. About 1565 shares have advanced, 1069 shares declined, and 148 shares are unchanged.
Bank Nifty soars 3 percent on short covering. Pull back seen in select mid cap stocks after recent sell off.
2:30 pm Economy outlook: Rural India has been a growth driver for auto industry, but sales are under pressure currently, said Saurabh Mukherjea of Ambit Capital. He sees an increase in corporate bad debts for private banks. Mukherjea expects sluggish economic growth for next 6-7 months, and advises investors to buy companies with strong balance sheets. He recommends avoiding stocks dependent on rural consumption and investment cycle. Ambit has cut GDP growth forecast for FY16 from 7.9 percent YoY to 7.5 percent YoY. It sees FY16 GDP to be at same levels as in FY15. Expecting next 6-7 months to be a weak economic phase for the country, the brokerage firm advises investment into companies having strong balance sheets, while recommending investors to cut exposure to rural consumption-dependent companies and to stocks that are plays on the investment cycle.
The market is still struggling with the Sensex is down 18.16 points at 27158.83. The Nifty is up 1.20 points at 8215.00. About 1357 shares have advanced, 1185 shares declined, and 145 shares are unchanged.
ICICI Bank is still up 6 percent while Maruti, Axis Bank, Tata Motors and BHEL are top gainers in the Sensex. ITC, GAIL, L&T, HUL and Infosys are major losers.
Sugar stocks like Bajaj Hindusthan, Mawana Sugars, Sakthi Sugars are rallying as the government may announce package for sugar sector in a day or two. According to CNBC-TV18 sources in the food ministry, the package will address issues related to buffer stock. It may even include decision to hike import duty, increase ethanol blending limit and sugar release mechanism.
Meanwhile, drug major Mylan has rejected a USD 40 billion unsolicited merger offer from Israel's Teva Pharmaceutical Industries saying the bid "grossly undervalues" the company considering its best-in-class assets, including a strong foothold in India.
1:55 pm Buzzing: Shares of oil market companies like HPCL and BPCL jumped 4 percent each intraday Tuesday on hopes to get subsidy compensation. According to CNBC-TV18 sources, the finance ministry will pay full subsidy compensation of Rs 8600 crore to the OMCs for the fourth quarter. In the fourth quarter, government compensation for kerosene and LPG under direct benefit transfer (DBT) stands at Rs 5300 crore, while under non-DBT it stands at Rs 3300 crore, which was to be incurred by OMCs. This Rs 3300 crore will be paid by the government after a loss audit. OMCs will absorb losses of Rs 2200 crore in the nine months in fiscal year 2015. With this, upstream companies will have to face no subsidy burden in the fourth quarter.
1:30 pm Economy: The underlying reason for the weakness in Indian equities of late is that global fund managers are shifting their emerging Asia portfolio towards China, says Arnab Das, Managing Director, macro-strategy, Trusted Sources. "This reflects on performance of both governments on the reforms front," he told CNBC-TV18. According to Das, India had created enormous expectations of higher growth, better reforms and better governance. "Those things are still there on the table, but reality is: growth is disappointing, earnings are disappointing. The pick up in (corporate) activity or performance is less than expectations," Das says.
The market is still under pressure. The Sensex is down 56.25 points at 27120.74 and the Nifty is down 12.50 points at 8201.30. About 1264 shares have advanced, 1192 shares declined, and 157 shares are unchanged.
ICICI Bank and Maruti are up 3-4 percent while BHEL, Hero Motocorp and Tata Motors are top gainers in the Sensex. Among the losers are ITC, GAIL, ONGC, L&T and Bharti Airtel.
Japan's Nikkei share average rose helped by hopes of better shareholder returns after Fanuc Corp doubled its dividend payout ratio, but gains were limited ahead of a two-day US Federal Reserve's policy meeting. The Nikkei 225 ended 0.4 percent higher to 20,058.95. Oil fell more than 1 percent ahead of weekly US crude inventory data that is expected to hit another high and as Saudi Arabia pledged to supply more oil to China if needed.
US commercial crude stockpiles were expected to have risen last week for the 16th straight week, up from a record 489 million barrels, even though drilling activity fell, a preliminary survey by Reuters showed on Monday.
Comments from top Saudi oil officials on Monday reiterated the country's position of keeping production high to meet demand as it maintains its market share.
12:58pm Market Expert: Now that the correction has set in, Nifty's real range of trade is seen between 7600 and 9000, says Sushil Kedia, President Association of Technical Market Analysts (ATMA). He says the market is at an inflection point and warns investors from taking any position today or tomorrow.
In an interview to CNBC-TV18, he emphasizes that Nifty has higher chances of plunging to 7700 before moving up. Although a rebound to 8500 is a possibility, breaching of which could actually signal a trend reversal, Kedia cautions that Nifty can throw a nasty surprise by hitting 7700 first in near to mid-term.
On the brighter side, Kedia sees Nifty going up to 13000 in next couple of years . ''I place a 99 percent odd for Nifty to go to 13000 before taking out 6700.''
12:40pm Nikkei update: Japan's Nikkei share average rose today helped by hopes of better shareholder returns after Fanuc Corp doubled its dividend payout ratio, but gains were limited ahead of a two-day US Federal Reserve's policy meeting.
The Nikkei 225 ended 0.4 percent higher to 20,058.95.
The broader Topix gained 0.5 percent to 1,627.43 and the JPX-Nikkei Index 400 advanced 0.6 percent to 14,771.19.
12:20pm Wockhardt off day's low: Wockhardt trimmed losses to 3.5 percent from 10 percent. The company recalled some drugs manufactured at its two plants in Waluj and Chikalthana before the USFDA banned those sites due to quality concerns.
12:00pm Market Check
The market gave up morning gains but the Nifty managed to hold the 8200-mark. Technology, FMCG, pharma, oil and HDFC twins dropped while auto and select banks gained.
The Sensex fell 7.53 points to 27169.46 and the Nifty gained 0.10 points at 8213.90. About 1231 shares have advanced, 1033 shares declined, and 149 shares are unchanged on the BSE.
Globally, Asian markets remained mixed as investors are cautious ahead of a two-day policy meeting by the US Federal Reserve that begins later today. Brent crude prices fell to near USD 64 per barrel.
In earnings today, telecom majors Bharti Airtel and Idea Cellular traded flat ahead of their Q4 earnings. For Bharti Airtel, analysts expect a steady quarter for India wireless while Africa business may continue to see a lackluster quarter. CNBC-TV18 poll indicated that consolidated profits may rise 9 percent sequentially. Idea Cellular's revenue growth is seen at 4.5-5 percent due to volume growth.
ICICI Bank climbed more than 5 percent, retaining its top position in the buying list on Sensex as the management guidance provided some relief. They said fresh impairments and slippages from the restructured loans will be lower as compared to FY15.
IOC, HPCL and BPCL gained anywhere between 2-4 percent. In a major boost for the oil marketing companies, the finance ministry agreed to fully compensate the Rs 8,600 crore of under-recoveries incurred in the fourth quarter of FY15. Goldman Sachs believes that OMCs are set for a strong earnings given full compensation of losses.
11:50am Market Update: The Sensex rose 45.21 points to 27222.20 and the Nifty advanced 14.45 points to 8228.25.
About 1261 shares have advanced, 991 shares declined, and 137 shares are unchanged on the BSE.
11:45am Sun Pharma may go for more acquisitions: Sun Pharmaceuticals Industries, emboldened by its takeover of domestic rival Ranbaxy Laboratories, is willing to spend as much as USD 7 billion on further acquisitions, bankers familiar with the generic drugmaker's strategy said.
The just completed Ranbaxy deal, its biggest to date at USD 3.2 billion, has given India's biggest drugmaker sufficient scale in generics and emerging markets to think about its next step - beefing up expertise in higher margin products and gaining a bigger global presence.
On Sun Pharma's radar are US and European companies that develop biosimilars - cheaper copies of biotech drugs which have become some of world's hottest selling medicines, investment bankers say.
"What has changed after the Ranbaxy acquisition is that their ambition has grown and now they want to become a global company which is more innovation-oriented," said a banker at a foreign bank with knowledge of Sun Pharma's plans.
11:20am Reliance Power in focus: Reliance Power said its wholly owned subsidiary Jharkhand Integrated Power has terminated the power purchase agreement of its 3,960 MW Tilaiya Ultra Mega Power Project in district Hazaribagh, in the state of Jharkhand.
Based on tariff-based bidding managed by Power Finance Corporation, Reliance Power was awarded the Tilaiya UMPP in February 2009. JIPL, the special purpose vehicle for implementing project, was handed over to Reliance Power by PFC in August 2009.
11:00am Market Check
The market maintained its uptrend with the Nifty hovering around the 8250-mark supported by banks, autos and oil & gas stocks while the BSE Midcap and Smallcap outperformed.
The Sensex rose 112.31 points to 27289.30 and the Nifty advanced 29.25 points to 8243.05. About 1276 shares have advanced, 821 shares declined, and 141 shares are unchanged on the BSE.
Globally, Asian markets remained mixed as investors eyed a slew of corporate earnings due in the region and a two-day meeting by the US Federal Reserve. Brent crude prices fell to near USD 64 a barrel.
ICICI Bank topped the buying list, up 6 percent as the management guidance provided some relief. They say fresh impairments and slippages from the restructured loans will be lower as compared to FY15.
Oil marketing companies like BPCL & HPCL rallied 4 percent each and IOC gained 1.6 percent. Sources told CNBC-TV18 that the finance ministry will pay the full subsidy compensation of Rs 8,600 crore to the OMCs for the fourth quarter.
Amtek Auto climbed 2 percent after entering into a share purchase agreement with Japanese company Asahi Tec Corporation to acquire six companies. The management says that the acquired company has revenue of Rs 1,500 crore and will be EPS accretive.
Geometric tanked 10 percent on reporting very weak results. Profit after tax came in 80 percent lower quarter-on-quarter on a revenue decline of 7.9 percent.
Wockhardt fell 8 percent as the company informed exchanges that during the last USFDA inspection of the Chikalthana and Waluj facilities, some observations were reported pertaining to batches of some products manufactured prior to the USFDA import alerts. As a precautionary measure the company has now decided to recall all the remaining batches in the US market that were manufactured prior to the import alerts.
10:45am Idea & Bharti in focus: Both telecom operators will announce their earnings today.
Bharti Airtel's March quarter profit after tax is expected to rise 8.9 percent sequentially to Rs 1,565 crore from Rs 1,436.5 crore in December quarter, according to a CNBC-TV18 poll. Revenue is seen going up by 1.5 percent to Rs 23,552 crore in the quarter ended March 2015 from Rs 23,217.1 crore in previous quarter.
Idea Cellular's fourth quarter profit after tax may climb 9.5 percent sequentially to Rs 840 crore compared to Rs 767.1 crore in December quarter.
Revenue is seen rising 4.7 percent to Rs 8,396 crore during January-March quarter from Rs 8,017.5 crore in the previous quarter. Operating profit may increase 5.2 percent quarter-on-quarter to Rs 2,895 crore and margin may expand by 17 basis points to 34.5 percent in the quarter gone by.
10:20am Wockhardt in News: Pharma major Wockhardt continued its downtrend today as the company decided to recall its remaining batches of drugs from the US market, which was manufactured prior to the USFDA import alerts.
On Monday, the share plunged 18.31 percent to close at Rs 1,330.05 on the BSE.
The company in its filing said as a measure of preparedness and as an abundant precaution, the company has now decided to recall, as a part of remedial measure all the remaining batches in the US market that were manufactured prior to the US FDA import alerts even though there is no evidence of risk to patient safety from the products currently available in the US market.
During the last USFDA cGMP inspection of the facilities at L1- Chikalthana and Waluj in Aurangabad, Maharashtra, some observations were reported pertaining to batches of some products manufactured prior to the USFDA import alerts.
Whereas the company continued to supply some of the products in the US market manufactured in the same facilities, several batches of other products, manufactured prior to the import alerts may still be in the US market.
10:10am IPO opens: UFO Moviez India has opened its public issue of Rs 600 crore worth of equity shares for subscription today. The price band is fixed at Rs 615-625 per equity share.
The objects of the offer are to achieve the benefits of listing the equity shares on the stock exchanges and for the sale of equity shares by the selling shareholders.
The selling shareholders in the issue are 3i Research (Mauritius), P5 Asia Holding Investments (Mauritius), Sanjay Gaikwad (Managing Director), Narendra Hete, Valuable Media, Valuable Technologies, Raaja Kanwar, Prafulla Vaidya, Uday Gaikwad etc.
On Monday, the company has raised Rs 180 crore by allotting 2.88 million equity shares at Rs 625 per share to anchor investors like Reliance Capital, Reliance Mutual Fund, SBI Mutual Fund, Pinebridge Global Funds, Royal Bank of Scotland, Jupiter South Asia Investment Company, Amundi Funds, Ashmore SIC, Kotak Mutual Fund and Bharti Axa Life Insurance Company.
10:00am Market Check
The market extended its uptrend in morning trade, supported by banks, auto, oil and capital goods stocks. The Sensex rose 162.07 points to 27339.06 and the Nifty climbed 43.75 points to 8257.55 on short covering.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent each. Nearly two shares advanced for every share declining on the Bombay Stock Exchange.
Private sector lender ICICI Bank topped the buying list, up 6 percent as Kotak has maintained a buy rating on the stock with a revised target price of Rs 400 per share post Q4 earnings.
Maruti Suzuki also extended previous day's rally, up 2.5 percent as Barclays has maintained buy rating on the stock with a revised target price of Rs 4300 (from Rs 4150 earlier) post earnings. "Maruti remains one of our preferred picks in sector and company is set to outpace industry in FY16," the brokerage reasoned.
Tata Motors, Axis Bank, SBI, M&M, BHEL, Hero Motocorp, Vedanta, Tata Steel, NTPC and Hindalco gained 1-2.5 percent while TCS, HDFC Bank, HDFC, ITC, Infosys and HUL fell 0.5-1.5 percent.
9:55 am Result poll: Telecom operator Bharti Airtel 's March quarter profit after tax is expected to rise 8.9 percent sequentially to Rs 1,565 crore from Rs 1,436.5 crore in December quarter, according to a CNBC-TV18 poll. Revenue is seen going up by 1.5 percent to Rs 23,552 crore in the quarter ended March 2015 from Rs 23,217.1 crore in previous quarter. During January-March quarter, operating profit may grow by 2.5 percent to Rs 7,979 crore and margin may expand 33 basis points to 33.87 percent on sequential basis. Analysts say India performance has been steady while Africa performance has been subdued; this trend is likely to continue.
9:35 am Market check: The market has gone flat. The Sensex is up 40.16 points at 27217.15 and the Nifty is up 9.05 points at 8222.85. About 750 shares have advanced, 697 shares declined, and 112 shares are unchanged.
ICICI Bank is up 4 percent while Marruti gains 2 percent. Other gainers in the Sensex include NTPC, ONGC and Tata Motors. Among the losers are Vedanta, TCS, HDFC twins and Wipro.
The market has opened in negative terrain as the Nifty breaks the 8200-level. The 50-share index is down 25.95 points at 8187.85. The Sensex is up 10.10 points at 27187.09. About 217 shares have advanced, 226 shares declined, and 79 shares are unchanged.
Bharti, Cipla, Vedanta, M&M and Coal India are major losers while Maruti, ICICI, HDFC, ONGC and Tata Power are top gainers in the Sensex.
The Indian rupee has opened with marginal gains, up 13 paise at 63.35 per dollar against previous day's closing value of 63.48 a dollar.
Ashutosh Raina of HDFC Bank said, "The USD-INR currency pair appears to have entered a bearish phase after the trade deficit numbers and weak equity markets, supported by weak technicals. The trend may continue and the pair hitting near-term lows cannot be ruled out. The crucial FOMC meeting starts tonight, and outcome will be keenly awaited. We expect the pair to trade in a range of 63-63.9/dollar today."
In the US, stocks closed lower, failing to hold Friday's records, as investors eyed earnings and looked ahead to the beginning of the two-day Federal Reserve meeting later today. Some investors are betting the Fed will wait up until later this year, instead of June as previously expected, before raising rates from record lows
On the economic data front, Markit's Flash Purchasing Managers Index for the service sector dropped to 57.8 in April. That is almost three points lower compared to the previous month but a healthy number nevertheless.
In commodities, crude prices trade slightly lower as ample global supply kept market participants cautious after prices reached 2015 peaks last week
From precious metals space, gold saw its biggest one-day rise since January as some dealers scrambled to cover short positions and the May options expiry triggered more buying.