Nifty ends below 8450, Sensex flat; Sun Pharma plunges 9%
01 June 2015
03:30 pm Market closing: The market has ended flat ahead of RBI monetary policy review tomorrow. The Sensex was up 20.55 points at 27848.99 and the Nifty was down 0.25 points at 8433.40. About 1223 shares advanced, 1516 shares declined, and 166 shares were unchanged. Reliance, L&T, Maruti, HUL and Cipla were top gainers whilr Sun Pharma, Bharti, Tata Motors, ONGC and HDFC Bank were major laggards in the Sensex.
03:00pm M&M sales data: Mahindra & Mahindra said domestic tractor sales fell 21 percent to 18,245 units in May against 23,132 units in the same month last year while tractor exports grew by 25 percent to 1,012 units during the same period.
"For the tractor industry, the upcoming monsoon will be the primary trigger and we are hopeful of a good monsoon, which will have a positive impact on pent up demand thereby leading to improved market sentiments," said Harish Chavan, chief operating officer, farm division, M&M.
Apart from tractors, M&M sold 36,706 units of passenger & commercial vehicles and three-wheelers in May, down 3 percent compared to 37,869 units in the year-ago period.
02:50pm Global markets Update: European stock markets inched higher today, putting aside concerns over Greece that unsettled the euro after Chinese stocks rallied almost 5 percent.
An at times dramatic sell-off over the past week in Shanghai, where stocks are still up almost 50 percent this year, has again focused global attention on financial risks in the world's second largest economy.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 4.9 percent, its biggest one-day rise since December 2012.
The FTSE Eurofirst index of 300 leading European companies was up 0.6 percent, reflecting gains in all of its major markets. MSCI's broadest index of Asia-Pacific shares outside Japan was a touch lower after earlier dropping to its lowest intraday level since April 7.
02:40pm Boardroom: Speaking to CNBC-TV18, Uday Baldota, CFO, Sun Pharma said the decline in sales, integration costs impacted the margins in Q4. According to him, it is difficult to indicate FY16 integration costs at this point. The company is making all efforts to resolve issues with respect to its Halol facility, he added.
With regards to Ranbaxy acquisition, Baldota said given the complexity of the merger, it is difficult to give guidance for FY16, adding that the company is undertaking remediation plans for all Ranbaxy facilities.
02:30pm ATF prices rise: Jet fuel price was hiked by a steep 7.5 percent today and rates of non-subsidised cooking gas (LPG) by Rs 10.50 per cylinder in step with global firming of rates.
Price of aviation turbine fuel (ATF), or jet fuel, in Delhi was raised by Rs 3,744.08 per kilolitre (kl), or 7.54 percent, to Rs 53,353.92, oil companies announced today. On May 1, ATF price was hiked by a marginal Rs 272 per kl or 0.5 per cent to Rs 49,609.84.
Following global trends, the price of non-subsidised or market-priced domestic cooking gas (LPG) was hiked to Rs 626.50 per 14.2-kg cylinder in Delhi from Rs 616 till yesterday. The price hike comes on the back of a Rs 5 per 14.2-kg cut in rates effected from May 1. Non-domestic LPG, which consumers buy after exhausting their quota of 12 bottles of 14.2-kg each at subsidised rates, will cost Rs 626.50 as against Rs 616 per 14.2-kg cylinder.
02:00pm Market Check
The market continued to consolidate ahead of the RBI credit policy tomorrow. The 30-share BSE Sensex gained 48 points at 27876.48 and the 50-share NSE Nifty rose 3.80 points to 8437.45. FMCG, capital goods, power, technology and select oil stocks supported the market while private banks and Sun Pharma remained under pressure.
Madhu Kela of Reliance Capital said there is not too much room left for further earnings disappointment. He expects 15 percent earnings growth in FY16. According to him, equities are still the best asset class with a three year horizon.
In global markets, Shanghai surged almost 5 percent today despite China manufacturing data contracting for third straight month, an indication that investors are expecting further stimulus from the Chinese government to pump prime the economy.
The month of May was a good one for the auto sector. Sales data indicated strong growth for companies like Maruti Suzuki, Eicher Motors and Ashok Leyland. Maruti reported a 14 percent growth in sales while Ashok Leyland saw handsome 40 percent growth in commercial vehicle sales this month.
All eyes are on the RBI credit policy tomorrow as the clamour for a rate cut intensified. A CNBC-TV18 poll showed that 70 percent of the bankers, bond dealers and economists expect a 25 basis-point repo rate cut while SLR and CRR rates are expected to be kept unchanged.
1:30 pm Buzzing: Shares of Sun Pharma tanked 10 percent intraday as its March quarter results missed street expectations. Its fourth quarter consolidated profit shot up 124.63 percent sequentially (down 44 percent year-on-year) to Rs 888 crore. Weak operational performance dented bottomline on year-on-year basis. This was the first quarter when combined earnings was reported (Sun Pharma and Ranbaxy). Total income declined by 11.1 percent quarter-on-quarter (up 51.7 percent on yearly basis) to Rs 6,157 crore during January-March quarter, the company said in its filing.
However, analysts do not seem to be perturbed. Macquaire has an outperform rating with a target price of Rs 1100 per share. With strong execution, free cash flow and a niche pipeline, Sun Pharma should sustain the upper-end of its historical premium valuation, says the brokerage. Ranbaxy integration provides an additional lever for growth, over the medium-term, it adds.
The market is still holding up gains. The Sensex is up 91.49 points at 27919.93 and the Nifty is up 23.00 points at 8456.65. About 1225 shares have advanced, 1228 shares declined, and 156 shares are unchanged.
Reliance, Cipla, Maruti, L&T and HUL are top gainers while Sun Pharma, Bharti, ONGC, Tata Motors and HDFC Bank are major laggards in the Sensex.
Asian shares pared earlier steep losses on Monday after Chinese markets rallied as investors focused on some of the bright spots in separate surveys of Chinese factory activity. Persistent fears about Greece's financial situation is likely to limit gains, and last week's downbeat US data is seen making investors wary. MSCI's broadest index of Asia-Pacific shares outside Japan was nearly flat in late afternoon trading, after early dropping to its lowest intraday level since April 7.
12:55pm Market Update: The Sensex gained 94.67 points at 27923.11 and the Nifty advanced 20.95 points to 8454.60. About 1230 shares have advanced, 1225 shares declined, and 153 shares are unchanged on the BSE. 12:40pm Eicher in news: Iconic bike-maker Royal Enfield reported a 41.35 percent jump in total sales in May at 35,354 units as against 25,010 units in the same period last year.
Domestic sales also surged 41.23 percent to 34,615 units last month from 24,509 units in May 2014, the company's parent Eicher Motors said in a filing to the BSE.
Exports during the month stood at 739 units compared with 501 units in May last year, up 47.5 percent.
12:20pm Interview: Having reported a not-so-good fourth quarter, Glenmark is now expecting FY16 to be better than FY15. According to CMD Glenn Saldanha, emerging markets will see positive growth for the company in FY16. The company continues to invest in emerging markets.
The pharma major reported EBITDA margins of around 26 percent to Rs 281 crore against Rs 382 crore from a year ago period. The company is expecting 18-20 percent growth in the US market in FY16, said Saldanha, adding that Glenmark continues to be a serious player in the diabetes space.
The company also expects 10-12 product launches in the US going ahead, Saldanha told CNBC-TV18, in an interview.
12:00pm Market Check
The market gained marginal strength in noon trade, buoyed by a good upmove in the Shanghai market that rallied 4.2 percent. The Sensex climbed 46.57 points to 27875.01 and the Nifty rose 10.25 points to 8443.90. About 1155 shares have advanced, 1200 shares declined, and 153 shares are unchanged on the BSE.
Market veterans are betting on equities in the long term. Ace investor Rakesh Jhunjhunwala said the market is in a consolidation phase and it may revisit 7900-8000 levels on the Nifty. Madhu Kela of Reliance Capital expects earnings recovery in FY16. He said equities are still the best asset class over a 3-year period.
Sun Pharma crashed 8 percent after reporting disappointing set of earnings in Q4. The company said a decline in sales and higher integration costs impacted margins in Q4.
Bharti Airtel, Tata Motors and ONGC declined 1-2.5 percent while Reliance Industries, ITC, Infosys, L&T, HUL and BHEL gained 1-3 percent.
Maruti Suzuki advanced 1.5 percent after posting strong sales for the month of May. The company saw a good jump in exports. Double-digit growth of 13.8 percent was driven by new models like Ciaz, Celerio and Alto k-10. For Eicher Motors, Royal Enfield sales continued to be strong, up by 4.2 percent month-on-month.
All eyes are on the RBI credit policy tomorrow as the clamour for a rate cut intentsified. A CNBC-TV18 poll shows that 70 percent of the bankers, bond dealers and economists expect a 25 basis-point repo rate cut while SLR and CRR rates are expectd to be kept unchanged.
11:50 a Take-over battle: Close on the heels of end of takeover battle for MCFL, Vijay Mallya-led UB Group plans to hike its shareholding in the fertiliser firm by acquiring shares from Zuari Group which now holds over 53 percent stake. UB Group, the original promoter of Mangalore Chemicals and Fertilizers Ltd (MCFL), along with Zuari Group has successfully staved off a takeover bid by rival Deepak Fertilisers.
Amid the takeover battle, Saroj Poddar-led Zuari Group increased its stake in MCFL to little over 53 per cent while UB Group holds nearly 22 percent.
Now, United Breweries (Holdings) Ltd (UBHL) has decided to exercise its option whereby both the company and Zuari Group would have equal stakes in MCFL. As per the shareholding pattern on the BSE, both Zuari Group and UB Group are in the list of promoters. Together, they have 75 percent stake in MCFL.
11:30 am Maruti sales: India's largest car maker Maruti Suzuki sold 1,14,825 units in May, a growth of 13.8 percent compared to 1,00,925 units sold in the year-ago period, driven by exports as well as domestic sales growth. Export during the same period grew by 20.3 percent to 12,466 units and domestic sales rose by 13 percent to 1,02,359 units, Maruti said in its filing. Passenger cars business reported a 14.3 percent growth in May. Mini (Alto, WagonR), Super Compact (Dzire Tour) and mid size cars (SX4, Ciaz) supported domestic sales growth. Alto and WagonR sales increased by 20.6 percent in May compared to the corresponding period of last fiscal.
The market is still higher. The Sensex is up 96.09 points at 27924.53 and the Nifty is up 25.20 points at 8458.85. About 1162 shares have advanced, 1025 shares declined, and 134 shares are unchanged.
Reliance, Cipla, ITC, BHEL and Maruti are top gainers in the Sensex. Among the losers are Sun Pharma, Bharti Airtel, Tata Motors, Hero MotoCorp and ONGC.
Gold held firm near USD 1,190 an ounce, supported by uncertainty over the Greek debt crisis, but the metal was unable to build on small gains in the past three sessions due to a strong dollar and the prospect of higher US interest rates.
Spot gold was steady at USD 1,190.25 an ounce by 0322 GMT after earlier climbing to a session peak of USD 1,196.35, its highest since May 26.
Athens and its euro zone and International Monetary Fund creditors have been locked in talks for months on a reform programme.
Without a deal, Greece risks default or bankruptcy in weeks, a possibility that has supported gold prices to an extent.
10:58am May auto sales: India's largest car maker Maruti Suzuki sold 1,14,825 units in May, a growth of 13.8 percent compared to 1,00,925 units sold in the year-ago period, driven by exports as well as domestic sales growth. Export during the same period grew by 20.3 percent to 12,466 units and domestic sales rose by 13 percent to 1,02,359 units, Maruti said in its filing.
Passenger cars business reported a 14.3 percent growth in May. Mini (Alto, WagonR), Super Compact (Dzire Tour) and mid size cars (SX4, Ciaz) supported domestic sales growth. Alto and WagonR sales increased by 20.6 percent in May compared to the corresponding period of last fiscal.
Dzire Tour sales jumped 257.6 percent year-on-year to 3,190 units and SX4 & Ciaz (that launched in October 2014) saw 4042.1 percent increase in sales at 5,012 units. However, Compact cars (Swift, Ritz, Celerio and Dzire) sales degrew by 5.7 percent year-on-year to 41,926 units in the month gone by.
Utility vehicles and Vans sales went up by 6 percent and 7.7 percent in May compared to the year-ago period.
10:40am HCC sells stake: Hindustan Construction Company has sold its entire 26 percent stake in Vikhroli Corporate Park Pvt. Ltd. which owns the premium commercial building, 247 Corporate Park, located at Vikhroli West, in Mumbai.
The company has sold its stake to Blackstone Purchase Entities on Thursday, May 28, 2015.
While HCC owned 26 percent of the stake, the remaining 74 percent was owned by ILFS Milestone Fund and others. The deal was valued at over Rs 1000 crore, which includes assumed debt, resulting in a net cash inflow of approximately Rs 200 crore to HCC.
In FY 2010-11, HCC Group had raised approximately Rs 300 crore when it had sold its 74 percent stake to ILFS Milestone Fund.
"This completes our first real estate development resulting in positive cash flow of over Rs 500 crore in total for the HCC Group over the lifecycle of this commercial property," said Rajgopal Nogja, Group Chief Operating Officer, HCC.
"This transaction is an integral part of our plans to monetize our non-core assets to further reduce our debts. The funds will be used to pare our debts," he added.
10:20am FII View: Bharat Iyer, JP Morgan said consensus now estimates earnings growth of 23 percent for FY16e and 19 percent for FY17e for MSCI India.
He believes these numbers are vulnerable to downgrades. That said, he expect earnings growth of 10-12 percent for FY16e, driven by a modest economic recovery & lower input costs.
"We continue to be selective in our choice of domestic cyclicals & recommend high quality financials with a strong capital & liability franchise and manufacturing sectors with low financial leverage as well as high operating leverage like commercial vehicles, cement & capital goods. We remain wary of chasing beta as also rural discretionary consumption plays. We also maintain overweight on IT services & healthcare," Iyer said.
10:00am Market Check
Equity benchmarks as well as broader markets continued to be rangebound. The Sensex rose 16.54 points to 27844.98 and the Nifty gained 5.55 points at 8439.20.
About 1084 shares have advanced, 931 shares declined, and 121 shares are unchanged on the Bombay Stock Exchange.
Valuations are not cheap, but they are not frothy either, Madhusudhan Kela, Chief Investment Strategist, Reliance Capital told CNBC-TV18.
Kela said he expected corporate earnings to grow around 15 percent this year on a combination of low base and better operating leverage. He said pharma and financial services were likely to see strong growth this year and that IT services firms could surprise positively.
Index heavyweights Reliance Industries, ITC and Infosys gained 1-2 percent followed by HDFC with 0.6 percent gain.
9:50 am May auto sales poll: Analysts expect four-wheeler sales to remain steady in May, with uptick in both passenger and commercial vehicles seen. In a report, Nomura said it expects passenger vehicles to grow 6-7 percent year-on-year while the medium and heavy commercial vehicles may surge 23 percent. Market leader Maruti Suzuki is expected to outperform the industry on the back of strength in its premium segment Ciaz, which has done brisk business in the past many months. However, Mahindra may be a picture of worry, as a rural growth slowdown may take a toll on tractor volumes. Sales for the firm are seen declining 20 percent for May. The rural slowdown is expected to take a toll on two-wheelers as well. Nomura said it expects sales to decline 2 percent year-on-year.
9:30 am Buzzing: Shares of Jet Airways tanked 8 percent intraday after aviation turbine fuel (ATF) prices are hiked by average Rs 3,844.09/k. Lower aviation fuel costs had helped the airline company narrow net loss in March quarter to Rs 1,728.99 crore in Q4FY15. Fall in expenses and higher income from operations also aided. The carrier, which has completed the first year of its strategic alliance with Etihad, had a net loss of Rs 2,513.57 crore in the year-ago period.
The carrier benefited from fall in ATF prices as the overall fuel costs in the latest quarter fell to Rs 1,334.47 crore.
However, total income from operations jumped to Rs 5,064.52 crore in the fourth quarter ended March 2015 from Rs 4,566.17 crore in the same period a year ago. Jet Airways said the improvement in performance is largely attributable to implementation of a single brand and full service strategy across the domestic operation.
The market has opened on a flat note. The Sensex is down 27.49 points at 27800.95 and the Nifty is down 16.40 points or at 8417.25. About 340 shares have advanced, 246 shares declined, and 86 shares are unchanged.
Sun Pharma is down 5 percent while Bharti, Cipla, Dr Reddy's Labs and BHEL are among laggards in the Sensex. Among the gainers are L&T, Vedanta, Infosys, HDFC and SBI.
The Indian rupee opened flat at 63.80 per dollar on Monday versus 63.81 Friday. The dollar index mixed with month-end selling after a recent rally - dollar index at around 97 levels.
Agam Gupta of Standard Chartered said, "The range for USD-INR pair is seen between 63.70-64.10/dollar. Dips to 63.70/dollar will see demand emerge from local government banks. Upticks to 64/dollar should see fresh exporter selling. We expect it to be a rangebound day ahead of the RBI monetary policy decision tomorrow.
In Asia, the Nikkei came off a 15-year high. While several other markets, such as Singapore and Thailand, are closed for public holidays.
Crude prices fell even as US shale rig count fell by 13, the biggest drop in four weeks. While gold was flat.