Market ends at 2015 lows, Sensex falls 245 points; HDFC drags

The market continued its southward journey for the fifth consecutive session on Monday, dragged by banking & financials, FMCG, auto and pharma stocks. Equity benchmarks ended at lowest closing levels in 2015. The 30-share BSE Sensex fell 245.40 points or 0.92 percent to 26523.09 and the 50-share NSE Nifty declined 70.55 points or 0.87 percent to 8044.15.

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

Experts said though the market can fall further from here on, the bull market is not over yet.

Nilesh Shah of Envision capital said the bull market hypothesis is not being challenged despite fall. This market will spend one more quarter trying to find a bottom, he added.

Meanwhile, the rupee weakened to 64.08 a dollar against a close of 63.74 on Friday on the back of strong dollar strength. Furthermore, increased demand for dollar from importers and banks weighed on the local currency.

Housing finance company HDFC's board of directors approved fund raising of about Rs 5,000 crore via debentures and warrants. Sources told CNBC-TV18 that the company will use the proceeds to hike its stake in HDFC Bank. HDFC lost 1.8 percent and HDFC Bank declined 0.9 percent.

Petrochemical major Reliance Industries was the biggest contributor to Sensex's fall, down more than 2 percent. Sun Pharma also declined 2 percent as Nomura has maintained its cautious stance on the stock.

Vedanta topped the selling list on Sensex, down 3 percent followed by Tata Motors, HUL, SBI, Tata Steel, Hero Motocorp, Maruti Suzuki and Bharti Airtel with 1-2.6 percent loss. However, Axis Bank, Bajaj Auto and Tata Power bucked the trend, down around a percent.

In the broader space, Sun TV Network was in focus today, the stock ended at Rs 278.90, down 21.73 after seeing an intraday fall of 28 percent as the home ministry has denied security clearance to 33 channels of the company. However, in some relief to Sun TV, CNBC-TV18 learnt that the information and broadcasting ministry is not in favour of revoking the company's licences and is yet to take a final call on the licence issue.

Nestle India lost 7.6 percent as analysts are negative on the stock over health scare and feel that the negative sentiment may spill over to other brands of the company. Maggi noodles contribute around 20-25 percent to its revenue in India.

After Maggi, the central food regulator FSSAI ordered testing of various noodles, pasta and macaroni brands, including Top Ramen, Yipee, Foodles and Wai Wai, manufactured by seven companies to check compliance of norms in the wake of Maggi controversy.

Shanghai continued to outperform India, rising 2.17 percent today, hitting a fresh 7-year peak as traders interpreted the mixed bag of trade data as an impetus for further policy easing. The Shanghai market gained 60 percent in 2015 against a 3 percent fall in the Nifty this year.

3:30 pm Market closing: The market ended on a dismal note as the Sensex was down 245.40 points or 0.9 percent at 26523.09. The Nifty slipped 70.55 points or 0.9 percent at 8044.15. About 788 shares advanced, 1850 shares declined, and 176 shares were unchanged. Tata Power, Bajaj Auto, Axis Bank, M&M and TCS were top gainers while Vedanta, Tata Steel, Sun Pharma, Reliance and Hero MotoCorp were laggards in the Sensex.

02:58pm Market Update: The market is heading towards weak closing for the fifth consecutive session. The Sensex lost 161.47 points to 26607.02 and the Nifty declined 50.40 points to 8064.30.

About 793 shares have advanced, 1761 shares declined, and 163 shares are unchanged on the BSE.

02:40pm Opto Circuits in demand: Opto Circuits' arm Cardiac Science has won USD 23 milion from Zoli in a legal case involving Wearable Defibrillator Technology patent, Vinod Ramnani, Chairman and Managing Director, Opto Circuits told CNBC-TV18.

This one time payment would be used to reduce the debt of the company, he said.

The company is also going to use the proceeds to launch a new product line up, Ramnani added.

02:20pm ITC, GSK in focus: Central food safety regulator FSSAI today ordered testing of various noodles, pasta and macaroni brands, including Top Ramen, Foodles and Wai Wai, manufactured by seven companies to check compliance of norms in the wake of Maggi controversy.

Food Safety and Standards Authority of India (FSSAI) has also asked for testing of four variants of "Maggi Nutilicious Pazzta with tastemakers".

"Various test results on Maggi and some other similar products have raised serious health concerns. In view of the same, it would be advisable to draw regulatory samples for similar products for which product approvals have been granted by the FSSAI...These samples should be sent to the authorised labs for testing," FSSAI CEO YS Malik said in letter to Commissioners of Food Safety in all states and UTs.

As per FSSAI order, the companies whose products have been listed for testing are Nestle India, ITC, Indo Nissin Food Ltd, GSK Consumer Helathcare, CG Foods India, Ruchi International and AA Nutrition Ltd. The regulator has ordered the testing of products registered with it.

02:00pm Market Check
The market continued to slide in afternoon trade with the Sensex falling 220 points to 26549.12 after the almost 4 percent falls last week. The Nifty declined 67.25 points to 8047.45.

The broader markets saw deepest cuts, down nearly 1.5 percent while market breadth remained weak with the advance:decline ratio of 1:2.

Nilesh Shah of Envision capital said the bull market hypothesis is not being challenged despite fall. This market will spend one more quarter trying to find a bottom, he added.

Shanghai continued to outperform India, rising 2 percent today, hitting a fresh 7-year peak as traders interpreted the mixed bag of trade data as an impetus for further policy easing. The Shanghai market gained 60 percent in 2015 against a 3 percent fall in the Nifty this year.

The rupee weakened to 64.14 a dollar against a close of 63.74 on Friday on the back of strong dollar strength. Furthermore, increased demand for dollar from importers and banks weighed on the local currency.

In some relief to Sun TV, CNBC-TV18 learnt that the information and broadcasting ministry is not in favour of revoking the company's licences and is yet to take a final call on the licence issue. The stock recovered but is still down 18 percent as the home ministry has denied security clearance to 33 channels of the Sun TV Network. Management said that they will seek legal recourse if licence is revoked.

1:50 pm Market outlook: There is no risk to the bull market hypothesis despite the bloodbath across board, says Nilesh Shah of Envision Capital. Terming the behavior as "breather" and "a correction," he said the market is likely to trade sideways till September until we have overcome the Monsoon and fed hike scares. It is unlikely that the EPS estimates will be scaled down further from the current level. "The Q4 was the last nail in the downward journey and our own sense is that the corporate India will surprise in the second half of the fiscal."

1:40 pm Market check: The market is slipping further. The Sensex is down 248.92 points or 0.9 percent at 26519.57, and the Nifty is down 76.05 points or 0.9 percent at 8038.65. About 702 shares have advanced, 1748 shares declined, and 151 shares are unchanged.

M&M, Tata Power, Coal India, Axis Bank and Bajaj Auto are top gainers while Vedanta, Tata Steel, Tata Motors and HDFC are major laggards in the Sensex.

1:30 pm Buzzing: Shares of HUL slipped 2 percent intraday. Brokerage CLSA retains a sell rating on the stock. After a single digit earnings per stock (EPS) growth in FY14-15, partially due to fiscal headwinds it expect HUL's earnings growth to now accelerate to 16 percent CAGR in FY15-18.

"We however find stock fully valued at 40xFY16CL earnings and retain sell," it reiterates in a report. 

CLSA says that company's annual report indicates that consumer confidence has increased but has not yet translated into significant improvement in FMCG market conditions. Also strong return on equity (RoE) at 110 percent though lower asset led to a 10 ppt annual drop, decline in operating cash flow and free cash flow, negative working capital (rose Y-o-Y) and continued high focus on product innovations, distribution expansion, cost savings are some of key highlights of HUL's performance in FY15.

The market does not seem to be in the mood to make any profit today. Bank, oil, auto and pharma stocks are dragging indices sharply. The Sensex is down 185.09 points or 0.7 percent at 26583.40, and the Nifty slips 58.80 points or 0.7 percent at 8055.90. About 754 shares have advanced, 1614 shares declined, and 142 shares are unchanged.

Coal India is up 2 percent while Tata Power, Axis Bank, Bajaj Auto and ITC are major gainers while Tata Motors, Vedanta, Tata Steel, Reliance and HDFC are among laggards in the Sensex.

Meanwhile, Finance Minister Arun Jaitley will meet the heads of public sector banks on June 12 to review the banks' annual performance and bad loans situation as also to persuade them to pass on RBI's rate cut benefit to borrowers for propping growth.

Besides, the meeting will review credit offtake and the progress made under the Jan Dhan Yojana and Prime Minister social security scheme among other things, PTI sources said.

The sources said Jaitley will also deliberate on the issue of non-performing assets (NPAs) and discuss ways to contain this. Gross NPAs of PSU banks have gone up to Rs 2,60,531 crore as on December 2014, as per the RBI data.

12:45pm Market Update: The Sensex slipped 191.10 points to 26577.39 and the Nifty dropped 60.50 points to 8054.20. About 755 shares have advanced, 1581 shares declined, and 138 shares are unchanged on the BSE. 12:40pm Infosys in focus: Infosys expects acquisitions to bring in additional revenues of about USD 1.5 billion as the IT services behemoth aims to achieve an aspirational goal of USD 20 billion in topline by 2020.

The country's second largest software services firm is also aiming to bring attrition levels down to the lowest in the industry in the same time frame.

"The mission of our management is to prepare the company to achieve an aspirational goal of USD 20 billion in revenue by calendar year 2020 with at least 30 percent operating margin with specific targets," Infosys CEO Vishal Sikka said in the company's annual report.

These targets include increasing revenue per FTE (Full Time Equivalent) to USD 80,000 by deploying automation and innovation in existing businesses and inorganic investment strategies influencing approximately USD 1.5 billion of new revenue.

The Bengaluru-headquartered company has been scouting for innovative companies in areas like automation and artificial intelligence.

In February, Infosys had announced its first major acquisition under Sikka, who had taken over as CEO in August last year, of New Jersey-based automation technology firm Panaya for USD 200 million.

12:20pm Market Expert: There is no risk to the bull market hypothesis despite the bloodbath across board, says Nilesh Shah of Envision Capital. Terming the behavior as "breather" and "a correction," he said the market is likely to trade sideways till September until we have overcome the Monsoon and fed hike scares.

It is unlikely that the EPS estimates will be scaled down further from the current level. "The Q4 was the last nail in the downward journey and our own sense is that the corporate India will surprise in the second half of the fiscal."

12:00pm Market Check
The market continued to see selling pressure, weighed by banking & financials, metals, pharma and oil stocks. The Sensex dropped 140.33 points to 26628.16 and the Nifty slipped 45.45 points to 8069.25.

The broader markets extended losses with the BSE Midcap and Smallcap indices falling 1.2 percent and 0.9 percent, respectively. About 776 shares have advanced, 1494 shares declined, and 144 shares are unchanged on the BSE.

The rupee, too, remained weak on the back of dollar demand post US jobs data. The currency fell 35 paise to 64.09 a dollar.

Shares of HDFC, Tata Motors, HDFC Bank, Sun Pharma, HUL, SBI, Vedanta, Tata Steel and Hero Motocorp dropped 1-2.5 percent.

11:30 am Brokerage view: Goldman Sachs recommends selling Nestle India with a target of Rs 4664 per share. It has lowered 2015-17 earnings per share (EPS) by 19 percent/10 percent /6 percent, reflecting lower Maggi noodles sales assumptions and higher advertising and promotions (A&P) expenses. "Our estimates revision are driven by order by the Central Food Safety and Standards Authority of India for Nestle to recall nine variants of its Maggi noodles, and voluntary product recall of Maggi noodles by Nestle until all regulatory issues are resolved," it says in a report. It thinks that Nestle may have to bear incremental marketing spend to restore consumer confidence and curtail potential reputational damage to other products under its flagship Maggi Brand.

The market is still reeling under pressure as the Sensex is down 112.64 points or 0.4 percent at 26655.85. The Nifty is down 38.20 points or 0.5 percent at 8076.50. About 809 shares have advanced, 1212 shares declined, and 129 shares are unchanged.

Coal India, L&T, Axis Bank, Tata Power and Bajaj Auto are top gainers while Vedanta, Tata Motors, Tata Steel, HDFC and HUL are among the losers in the Sensex.

Meanwhile, Crude oil prices fell as China's oil imports dropped sharply and markets were expected to be increasingly oversupplied following OPEC's decision to keep its production targets unchanged.

China, the world's biggest net oil importer, bought nearly a quarter less crude in May than it did in the previous month, according to data from China's General Administration of Customs. Its imports of oil products also fell just over six percent while product exports fell 10 percent. China's report of a fall in import demand came after the Organization of the Petroleum

Exporting Countries (OPEC) agreed on Friday to stick to its policy of not limiting its output, which currently stands above 30 million barrels per day. Both exacerbate worries about a glut in a market where millions of barrels of crude are stored in tankers without a buyer.

10.58am: Market Update: The Sensex declined 109.48 points to 26659.01 and the Nifty slipped 41.05 points to 8073.65. About 805 shares have advanced, 1216 shares declined, and 128 shares are unchanged on the BSE. The rupee extended losses, down 40 paise to 64.15 on dollar demand post US jobs data.

10:40am Interview: The Indian Home Ministry struck down a proposal by the Information and Broadcasting (I&B) Ministry for giving security clearance to 33 television channels of Kalanithi Maran-promoted Sun TV Network. This move could lead to cancellation of the company's broadcasting licence.

In an interview to CNBC-TV18, SL Narayanan, group chief financial officer, Sun Group, says the Home Ministry did not give security clearance only for some radio stations and the I&B ministry wrote to them to reconsider its decision.

Narayanan says the company has not received any notification from the Home Ministry and adds that revoking the licence, that expires in 2021-2023, will be an Armageddon event.

10:20am Chinese economy: Chinese imports fell for a seventh straight month in May while exports also sank, data showed today, as the world's second biggest economy shows protracted weakness in the face of government easing measures.

The disappointing figures also come as leaders try to transform the economy from one where growth is driven by consumer spending rather than government investment and exports. Imports slumped 17.6 per cent year on year to USD 131.26 billion, the General Administration of Customs said in a statement.

10:00am Market Check
The market remained under pressure on the first day of the week. The Sensex fell 120.22 points to 26648.27 and the Nifty declined 41 points to 8073.70, dragged by banking & financials, technology, pharma and select auto stocks.

The broader markets, too, declined marginally with the BSE Midcap and Smallcap indices falling 0.4 percent each. About 668 shares have advanced, 983 shares declined, and 118 shares are unchanged on the Bombay Stock Exchange.

The market is likely to fall another 5-6 percent from current levels, said Harendra Kumar of Elara Capital. The Indian macro negatives outweigh positives, he added.

Shares of HDFC, Tata Motors, HUL, Sun Pharma, State Bank of India, Bharti Airtel, Cipla, BHEL and Hero Motocorp declined 1-2 percent. ICICI Bank and HDFC Bank lost 0.8 percent each.

However, Coal India outperformed with more than 1 percent gains after Morgan Stanley added the stock to its focus list. The brokerage sees improving realisations and policy reforms driving earnings over the coming couple of years. It forecasts average realisation increases of 6.5 percent per annum in F2015-17.

9:55 am Market outlook: The market is likely to fall another 5-6 percent from current levels, is the word coming in from Harendra Kumar of Elara Capital. The Indian macro negatives outweigh positives, he adds. He says the Bankex at the moment is looking rather vulnerable and ICICI Bank may see further downside. According to him, the stress in ICICI Bank assets is higher than expected. He prefers Kotak and Axis Bank to ICICI Bank. In the auto space, Kumar says Maruti will benefit from yen weakening progressively. He prefers Maruti over Tata Motors.

9:45 am Oil decision: The Organization of Petroleum Exporting Countries (OPEC) has decided to maintain its production levels for at least another six months, Saudi Arabia's Oil Minister Ali al-Naimi told reporters Friday.

The price of oil has rebounded significantly since hitting lows of USD 45 a barrel in January, giving officials meeting in Vienna little reason to meddle with their target, which is likely to continue to hit the US shale oil industry.

One OPEC oil producer looking to increase production levels is Iran, however, which is due to return to the global stage as it finalizes a nuclear proliferation deal.

9:28 am Market check: The Sensex is down 120.01 points at 26648.48, and the Nifty is down 50.40 points or 0.6 percent at 8064.30. About 596 shares have advanced, 688 shares declined, and 101 shares are unchanged.

Sun TV is down 26 percent while Tata Motors, Cipla, BHEL, HDFC and HUL are major laggards in the Sensex.

The market has kickstarted the week on a flat note. The Sensex is down 22.23 points at 26746.26, and the Nifty is down 6.45 points at 8108.25. About 416 shares have advanced, 195 shares declined, and 81 shares are unchanged.

Coal India, Tata Steel, Maruti, Vedanta and Tata Power are top gainers in the Sensex. Among the losers are Tata Motors, M&M, HUL, Cipla and HDFC.

Sun TV is down 20 percent as the Home Ministry has struck down an Information and Broadcasting Ministry's proposal for giving security clearance to 33 television channels of Kalanithi Maran-promoted Sun TV Network, a move that could lead to cancellation of their broadcasting licence.

The Indian rupee slipped in the early trade. It has opened lower by 30 paise at 64.05 per dollar against 63.75 in Friday's session.

Agam Gupta of Standard Chartered Bank said rupee opening at around 64.05-64/dollar is due to strengthening of the dollar against most other currencies as a reaction to the strong US jobs data.

According to him, 64.25-64.30/dollar remains a strong resistance and he expects exporters to sell dollars on any upticks to that level.

On the downside 63.90/dollar should be a support and importers/local government banks should come in to buy dollars there, Gupta said. He expects a range of 63.90-64.25/dollar for the day.

The US dollar rallied to a 13-year peak against the yen and rises sharply against the euro after data showing US job growth accelerated in May, bolstering the case for an interest rate hike as early as September.

Meanwhile on Friday, the US markets ended in the red, partly on the back of the US jobs data and partly by the back and forth in Greece over a reforms deal. The German DAX and the French CAC lost more than a percent each. The British FTSE down eight tenths of a percent. The German ten-year bond yield rose sharply to 0.85 percent.

Asian markets opened mixed, with investors reacting to key economic data from the region's second-largest economy. Japan's revised first-quarter gross domestic product (GDP) expanded 3.9 percent, much higher than the preliminary reading of a 2.4 percent increase.

In other asset classes, crude oil prices fell in early Asian trade as markets were expected to be increasingly oversupplied following OPEC's decision last Friday to keep its production targets unchanged.

The US dollar rallied to a 13-year peak against the yen and rose sharply against the euro after data showed US job growth accelerated in May, bolstering the case for an interest rate hike as early as September.

Precious metal gold hit an 11-week low on Friday, heading for a third straight weekly slide, as the dollar extended its gains.