Nifty ends below 8150, Sensex slumps 351 points; ITC sinks 5%
03 June 2015
03:30pm Market closing: The Sensex ended down 351.18 points or 1.3 percent at 26837.20 and the Nifty slipped 101.35 points or 1.2 percent at 8135.10. About 622 shares advanced, 2111 shares declined and 121 shares were unchanged. NTPC, Infosys, Coal India, Bharti Airtel and HDFC Bank were top gainers in the Sensex. Among the losers are Tata Power, ITC, ONGC, SBI and GAIL.
03:05pm Market outlook: Independent market expert Anand Tandon believes things changed fundamentally for the market in RBI Governor's statement yesterday.
Tandon said, The growth data is not what we are seeing currently, but what we can't to see. If the government doesn't have place to cut Rates and at the same time if the economy is going to slow down, then why would one hold on to stocks that are dependent on interest rates
He says the sell-off in private banks is justified as they too are over-valued. He believes there's only so much the banks can push in terms of retail lending if credit growth is not seeing an uptick.
The steep fall is still not good enough believes Tandon as most stocks are anyway overvalued.
02:45pm Cipla in News: Cipla has received USFDA approval for an innovative formulation - Lopinavir/ ritonavir (LPV/r) 40mg/ 10 mg oral pellets - for paediatric specific treatment for infants.
Cipla has long recognised the lack of access to life saving child-friendly formulations for the treatment of HIV, which prompted it to develop an innovative formulation of LPV/r oral pellets. The pellets are to be sprinkled on sweetened porridge for infants and administered to them.
Commenting on the development, Subhanu Saxena, MD and Global CEO, Cipla said, We are extremely proud to have developed this innovative formulation of LPV/r oral pellets for infants and young children. Cipla has been committed to the cause of HIV/AIDS for over two decade."
02:25pm GDP forecast cut: Ambit Capital has lowered its gross domestic product (GDP) forecast to 6.7 percent from 7 percent on the back of a drought year, Ritika Mankar Mukherjee, Economist and Associate Vice President at Ambit Capital told CNCB-TV18.
With respect to agriculture, GDP might fall to 2 percent from 3.2 percent, if a drought year comes, which will correspond to my headline number from 7 percent to 6.7 percent GDP, she said.
Ambit expected a negative earnings surprise this year. We expect 9 percent growth rate for sensex earnings vis-à-vis 19 percent, she said.
Currency overshoot and turbulence won't be as dramatic as it was last year, she said. Overshoot is a situation when fundamental and actual value have nothing to do with each other, she explained. "Fundamental range of the rupee based on the CAD number should be 62 to 64," Mukherjee said.
Within the broader emerging markets, India was better placed from the perspective of growth, inflation and CAD, she said.
Ambit expected fiscal year 2017 to be a better and an accelerated year, she said.
02:00pm Market Check
Equity benchmarks as well as broader markets continued to reel under selling pressure. The Indian rupee too breached 64 a dollar, 23 paise to 64.05 a dollar in afternoon trade following weakness in equity market and high dollar demand.
The 30-share BSE Sensex plunged 415.73 points or 1.53 percent to 26772.65 and the 50-share NSE Nifty fell 122.05 points or 1.48 percent to 8114.40. The BSE Midcap and Smallcap indices underperformed, falling 2.2 percent and 2.8 percent, respectively.
The market breadth, too, remained weak as about 2145 shares have declined against 462 shares advanced on the Bombay Stock Exchange.
CLSA lowered its December 15 Sensex target by 3 percent to 28,500 based on forward multiple of 15.5x PE multiple in line with the 10-year average. "The prospects of a meaningful economic recovery in 2HFY16 are fading and we remain cautious near-term," said the brokerage in its note.
1:30 pm Outlook: Surprised at negative reaction on the Reserve Bank's 25 basis points rate cut on Tuesday, Hartmut Issel, Head Equity & Credit-Asia Pacific, UBS told CNBC-TV18 he expects more cuts in the coming quarters. It is not only about inflation, but also about growth and especially investment growth which is quite weak. Therefore, I see this as a much more mix statement than just outright hawkish Issel said. Further, he said it is important to look out for minimum support prices (MSPs) in June than monsoon predications. MSPs are controllable by government and they must stop it from increasing, he said. ADVERTISING Issel is expecting MSPs to be lower than current inflation numbers, which could help in lowering inflation over next year.
The market is still under pressure as the Sensex is down 347.25 points or 1.3 percent at 26841.13. The Nifty is down 98.95 points or 1.2 percent at 8137.50. About 420 shares have advanced, 2104 shares declined, and 111 shares are unchanged.
TCS, Coal India, NTPC, Infosys and HDFC Bank are top gainers in the Sensex. Among the losers are ITC, Tata Motors, Vedanta, ICICI Bank and SBI.
Crude oil prices fell as oversupply weighed on markets, with OPEC not expected to announce a production cut at its meeting. High production by OPEC, but also from other regions like US shale producers and Russia, has contributed to oversupply and left tankers filled with millions of barrels of oil without buyers.
Some analysts said there was a chance OPEC could increase its production target.
12:59pm Market Update: The Sensex declined 347.25 points or 1.28 percent to 26841.13 and the Nifty fell 98.95 points or 1.20 percent to 8137.50. About 420 shares have advanced, 2104 shares declined, and 111 shares are unchanged on the BSE. 12:55pm Nestle India in focus: In a reply to exchanges with respect to news - Lab testing report shows Maggi samples found unsafe in Delhi - Nestle India said it has not received any official communication from the authorities so far.
"We wish to state that we have till now not received any orders from any State/Centre FDA authorities to recall MAGGI Noodle products in the market except an order from the Uttar Pradesh FDA dated April 30, 2015 asking us to recall a batch of MAGGI Noodles manufactured in February, 2014 which had already reached the 'Best Before date in November, 2014. We are co-operating with the authorities who are conducting tests and awaiting their results," Nestle explained.
Meanwhile, Future Group has removed Maggi Noodles from all its stores. Nestle share price lost 9 percent.
12:40pm Biggest losers: Unitech shares fell more than 40 percent in trade today. The company has net debt of Rs 6,300 crore as of March 2015 while its market capitalisation stood at Rs 2,200 crore, which meant nearly three times over market cap.
Promoter shareholding was 45.54 percent as of March 2015 and 90.32 percent of promoter's stake has been pledged.
Orbit Corporation and DB Realty were down 20 percent each. Orbit Corporation's net debt stood at Rs 764 crore while its market cap is Rs 100 corre. Promoter shareholding of Orbit was 24.76 percent and 78 percent of this holding has been pledged.
DB Realty's promoter holds 62 percent stake and 85 percent of that holding has been pledged.
12:20pm Bharti Airtel in News: Country's largest private telecom operator Bharti Airtel today said it has approached investors for issuance of 10-year US dollar bonds.
"Bharti Airtel has approached investors for issuance of debt instruments in the form of USD-denominated Senior Unsecured Notes," it said in a filing to BSE.
The notes are expected to be rated BBB- (Fitch) / BBB- (S&P) / Baa3 (Moody's), it added.
"The proceeds will be used for capital expenditure in compliance with end-use guidelines set forth in the Master Circular by RBI and all laws and regulations of India applicable to the Company," it said.
It added that the expected tenure is 10 years and the likely listing would be on the Singapore Stock Exchange.
12:00pm Market Check
The market cracked further in noon trade, weighed by major selling in banks, FMCG, capital goods and auto stocks. Inflation and monsoon worries may be hurting the sentiment on Dalal Street.
The Sensex fell 456.71 points or 1.68 percent to 26731.67 and the Nifty dropped 123.90 points or 1.50 percent to 8112.55. Five shares declined for every share advancing on the Bombay Stock Exchange.
Mahantesh Sabarad, Deputy VP, Research, SBI Cap Securities, expects only a small correction in the market.
He told CNBC-TV18 that the current market mood reflected expectations of low corporate earnings. He said the expectations could well turn out to be true.
ITC and Tata Motors topped the selling list on Sensex, down 4.6 percent each followed by ICICI Bank and Tata Power with 4 percent loss.
11:30 am Market outlook: Arvind Sanger of Geosphere Capital Management doesn't expect the Indian equity market to see any steep losses, but he says the market's coveted flavour of the month or year status is now lost. In an interview to CNBC-TV18, Sanger says the Nifty will be rangebound between 8000-8500. However, there is a larger cause of concern worrying the market- economic revival. Sanger says the poor Q4 earnings season hints at the dismal condition of the economy as there was virtually no topline growth in the quarter.
The market is still struggling dragged by FMCG and banks majorly. The Sensex is down 140.40 points or 0.5 percent at 27047.98 and the Nifty is down 47.60 points or 0.6 percent at 8188.85. About 589 shares have advanced, 1504 shares declined, and 112 shares are unchanged.
Coal India is up 2 percent while Wipro, Reliance, HDFC and NTPC are top gainers in the Sensex. Among the losers are Tata Motors, ITC, HUL, Axis Bank and Sun Pharma.
Gold eased even as the dollar nursed sharp losses on expectations of a Greek debt deal, with investor sentiment remaining bearish due to outflows from bullion-backed funds. Traders said gold's overnight jump was underwhelming given the sharp drop in dollar and weak US factory data, which should have typically triggered strong safe-have bids.
Oil prices fell in Asia, reversing steep gains in the previous session as dealers awaited the latest US energy stockpiles report amid concerns about a sustained global supply glut, analysts said. But analysts said the surge was momentary, as dealers worried that there could be little change in the current crude oversupply situation for some time to come.
10:30am Services PMI: Activity in India's dominant services industry contracted last month as firms raised prices at their fastest pace in a year, sending demand tumbling, a business survey showed on Wednesday. The weak showing contrasted with a similar survey on Monday which showed robust manufacturing growth in May, and underscored the view of the central bank that Asia's third-largest economy is not doing as well as the latest rosy GDP numbers suggest.
The HSBC Services Purchasing Managers' Index, compiled by Markit, fell below the 50 level that separates growth from contraction, coming in at a 13-month low of 49.6 in May from April's 52.4.
10:00am Market Check
The market extended losses in morning trade as monsoon woes continued weighed. The Sensex fell 165.53 points to 27022.85 and the Nifty declined 58.70 points to 8177.75. The broader markets dropped too, down nearly 1 percent.
About 551 shares have advanced, 1113 shares declined, and 96 shares are unchanged on the BSE.
Adani Enterprises plunged more than 80 percent as the stock price adjusted for demerger of its port, power, transmission businesses. Port business will be transferred to Adani Ports, power business to Adani Power and transmission to Adani Transmission. Adani Mining Private Limited will be merged into Adani Enterprises.
Nestle India lost more than 6 percent after Delhi Government said lab testing report showed Maggi samples found unsafe in national capital.
9:50 am Economy: Hours after the prediction of deficient monsoon this year, domestic ratings agency Crisil on Tuesday cut its FY16 growth estimate by 0.5 percent to 7.4 percent , saying a second consecutive year of less rainfalls will hurt the economy. "We revise our GDP growth forecast downwards by 0.5 percent to 7.4 percent from 7.9 percent , and expect agriculture growth to be 1.5 percent on a weak base of 0.2 percent in FY15," it said in a late evening note.
The agency said a second straight year of deficiency in rainfalls can be "very damaging" as the efficacy of irrigation systems would have insufficient to due to last year's inadequate rains.
Stating that the monsoons will be "deficient" this year, the MeT department has revised its forecast from 93 percent to 88 percent of long period average (LPA), with the Northwest region expected to be hit the most.
9:35 am FII view: Mahesh Nandurkar, CLSA said earnings growth in Q4FY15 for their coverage universe was negative 13.6 percent and the worst since June 2012.
Domestic companies performed a tad better, with earnings expansion of 0.1 percent; still a 6-quarter low. With this, FY15 Sensex earnings growth has slipped into the negative territory; a 6-year low, he explained.
According to him, disconnect between GDP growth numbers and corporate performance is widening. EBITDA margins was the bright spot, rising more than 100 basis points Y-o-Y despite revenue deceleration, he feels.
He said few positive surprises were Maruti Suzuki, Bajaj Auto, ACC, oil-marketing firms, Idea Cellular and Dish TV. "We see further downside risk to the 19 percent earnings growth assumption for FY16," he said.
9:17 am Market check: The Sensex is down 109.75 points or 0.4 perceny at 27078.63 and the Nifty is down 36.95 points or 0.4 percent at 8199.50. About 348 shares have advanced, 392 shares declined, and 72 shares are unchanged.
ITC is down 2 percent while ICICI Bank, Axis Bank, Tata Motors and Sun Pharma are down 1-2 percent.
After sharp cuts yesterday, the market has opened on a weak note Wednesday. The Sensex was down 26.80 points at 27161.58 and the Nifty is down 2.05 points at 8234.40.
About 257 shares have advanced, 162 shares declined, and 71 shares are unchanged.
Wipro, BHEL, Hindalco, Tata Steel and Infosys are top gainers in the Sensex. Among the losers are ITC, Bajaj Auto, Hero MotoCorp, Maruti and Coal India.
The Indian rupee opened with marginal gains at 63.78 per dollar on Wednesday versus 63.82 Tuesday.
NS Venkatesh of IDBI Bank said, "Overnight we have seen a rally in the euro and the yen against the dollar. However, our own markets will continue to take cues from the domestic macros. As trade flows get skewed more towards imports than exports - this cut put pressure on the rupee.
Along with this, currency markets will keenly watch for cues from the equity markets. Expect USD - INR to trade between a narrow range of Rs 63.65 -63.95/dollar, he said.
Euro trades flat against the dollar after some strong gains in the previous session. The dollar index is around the 96 levels.
Globally, Greek debt concerns continued to weigh on the markets as US and European equities ended lower. Asian markets too are trading mixed with a negative bias.
The Nikkei is trading with a negative bias after breaking a 12-day winning streak. Kospi is under pressure on growing concerns over the outbreak of Middle East respiratory syndrome in South Korea.