Nifty ends below 8000; Sensex at 8-month low, tanks 470 points

It was a rude shock for the market on Thursday after the relief rally on Dalal Street in previous session (Previous day's rally was after seven consecutive sessions of losses earlier). Benchmark indices plunged to 8-months lows with the Nifty closing below the 8000-mark as selling pressure intensified in banking & financials, oil and auto stocks.

The 30-share BSE Sensex tanked 469.52 points or 1.75 percent to 26370.98, the lowest closing level since October 2014. The 50-share NSE fell 159.10 points or 1.96 percent to end at 7965.35 after hitting an intraday low of 7958.25.

With this fall, the Nifty plunged 12.7 percent and Sensex lost 12.2 percent from record highs of 9119.20 and 30024.74 (touched on March 4), respectively.

Delay in monsoon, build up of fresh shorts after breaking 8000 level on the Nifty and likely FIIs selling in heavyweights could be the reasons behind today's fall, feel experts.

Dhiraj Agarwal, Independent Market Expert said the market is not out of woods yet, although a few data points have turned positive. The risk of monsoon is something one should take cognizance of, Agarwal warns.

Gautam Chhaochharia, head of India research at UBS Securities said he has lowered its year-end Nifty target to 8600 from 9600. According to him, deflation is hurting corporate earnings.

Despite this, Chhaochharia said interest for India remains high among investors (foreign), almost at the same level as last year this time.

The broader markets, too, caught in bear grip. The BSE Midcap and Smallcap indices were down 1.8 percent and 1.55 percent, respectively. About 784 shares advanced against 1862 shares declined on the Bombay Stock Exchange.

The rupee (during late trade of equity markets) started falling, which indicated that foreign investors may be sellers in heavyweights. The currency was down 13 paise to 63.97 a dollar.

Meanwhile, cyclone in the Arabian sea delayed the onset of the south-west monsoon. MET department said rains will arrive in Mumbai by June 15 but also added that El-Nino continued to gather strength.

All sectoral indices ended in the red today. Reliance Industries and HDFC were the biggest contributors to the Sensex fall, down 3.2 percent and 2 percent, respectively.

Tata Power was the biggest loser on Sensex, down 4.9 percent followed by Tata Motors with 3.6 percent loss. CLSA has reduced target price on Tata Motors to Rs 600 from Rs 650 per share but reiterated a buy rating. The brokerage also cut FY17-18 earnings per share (EPS) by 11 percent factoring in lower China volume growth and a 50 percent contraction in JLR's China margin premium over other regions.

PSU bank stocks were in focus today as CNBC-TV18 learnt that the RBI has written to the finance ministry seeking more capital for PSU banks, urging for more than double capital infusion. The Finance Minister Arun Jaitley will hold a meeting with public sector bank heads on June 12 to review their performance. State Bank of India plunged 2.4 percent. PNB and Bank of Baroda were down over 3.5 percent.

Among private sector lenders, Axis Bank shed 3 percent while ICICI Bank and HDFC Bank were down more than 1 percent.

Larsen & Toubro, ITC, Infosys, TCS, ONGC, BHEL, Wipro and NTPC were other prominent losers, down 1-3 percent. However, Vedanta bucked the trend, was the only gainer in Sensex, up 1.54 percent ahead of likely board members meeting on June 14 for considering merger of Cairn India with the company.

In the broader space, Nestle India gained further, up 1.9 percent as it has approached Bombay High Court against the Food Safety and Standards Authority of India (FSSAI) and the Maharashtra FDA. The High Court will hear Nestle's plea on June 12. Meanwhile, the US Food and Drug Administration began scrutiny into the Maggi mess, saying it is not yet clear if US products will be affected by the product recall in India.

AstraZeneca Pharma was locked at 20 percent upper circuit after the company launched FORXIGA (dapaglifozin), a treatment for Type 2 diabetes mellitus.

NALCO gained 3.5 percent as Credit Suisse initiated coverage on the stock with an outperform rating and a target price of Rs 57. The brokerage believes even as the company embarked on USD 900 million refinery expansion, healthy operating cash flows will keep it debt free in otherwise a debt laden industry.

Novartis India shot up 15.7 percent as media reports suggested that parent company may explore delisting of Indian unit. Novartis AG holds 75 percent stake in the company, as of March 2015.

03:30 pm Market close: It is another dismal day at Dalal Street. The Sensex shed 469.52 points or 1.7 percent at 26370.98 and the Nifty plunged 159.10 points or 1.9 percent at 7965.35. Both the indices ended at 8-month lowest closing level. About 792 shares advanced, 1852 shares declined, and 152 shares were unchanged.

Tata Power, Tata Motors, Axis Bank, Cipla and Reliance were big losers in the Sensex.

03:10 Growth outlook: India's GDP growth is likely to revive to 7.9 percent in the current financial year and then further up to 8.1 percent in 2016-17, driven by structural reforms and cyclical easing of the monetary policy, says a Citigroup report.

According to the global financial services major, investment and consumption uptick is likely to result in a growth pick-up from 7.3 percent in 2014-15.

"Going forward, given the ongoing trends of structural reforms, coupled with cyclical easing of the monetary policy by further 25 basis points in the current fiscal and range-bound commodity prices, India's growth is likely to revive to 7.9 percent in 2015-16 and towards 8.1 percent in 2016-17," Citigroup said in a research note.

The report, however, cautioned that the recent spell of unseasonal rains - impacting around 10 percent of standing winter crops - and the forecast of a "deficient" monsoon pose a challenge to the ongoing improvement in growth inflation dynamics.

02:55pm F&O buzz: The Nifty 8000 Put's premium increased by 75 percent to Rs 115 with addition of 2 lakh shares in open interest that jumped 4 percent.. Nifty 7900 Put premium rose by 83 percent to Rs 74 and it added 6 lakh shares in open interest that went up 15 percent.

Nifty 7800 Put's premium jumped 90 percent to Rs 45 with addition of 4.6 lakh shares in open interest that increased 9 percent.

02:50pm Rupee update: The sudden rupee weakness indicated that foreign investors or global traders may be offloading their portfolios for profit taking. The fell 13 paise to 63.97 a dollar in afternoon trade after seeing flat-to-higher trade from early trade.

02:40pm Market Update: The Sensex tanked 414.07 points or 1.54 percent to 26426.43, and the Nifty fell 137.65 points or 1.69 percent to 7986.80. Bank Nifty cracked 2 percent.

About 741 shares have advanced, 1774 shares declined, and 163 shares are unchanged on the BSE.

02:30pm Interview: Auto component manufacturing company Motherson Sumi, at its meeting held on June 10, 2015, recommended the issue of bonus shares in the ratio of one bonus share against two existing shares (1:2) subject to the approval of the shareholders.

Speaking to CNBC-TV18, chairman Vivek Chaand Sehgal said the company is capable of achieving its revenue target of  USD 18 billion by 2020. Sehgal said the company intends to push 2-3 plants onstream in FY16. The company has recently won orders worth euro 4.4 billion.

02:15pm PSU banks need fund: A planned USD 1.2 billion capital infusion by the government into state-run lenders during the fiscal year to March 2016 will not be enough, Reserve Bank of India (RBI) Deputy Governor SS Mundra said today.

Mundra said the RBI was in talks with the India's Finance Ministry over the bank capitalisation issue, but did not mention how much infusion would be required.

"We've been taking it up with the finance ministry. This is the time when many of the banks are in need of higher capital," he said.

The government had budgeted a smaller-than-expected infusion of Rs 7,940 crore (USD 1.24 billion) to shore up the capital of the state-run banks at the federal budget unveiled in February.

02:00pm Market Check
The selling pressure intensified in afternoon trade as the Nifty breached 8000-mark intraday, impacted by further selling pressure in heavyweights like Reliance Industries, Tata Motors and ICICI Bank. However, the broader markets outperformed benchmarks, falling 0.6 percent.

The Sensex fell 327.32 points or 1.22 percent to 26513.18 and the Nifty dropped 109.20 points or 1.34 percent to 8015.25. About 762 shares have advanced, 1722 shares declined, and 162 shares are unchanged on the BSE.

Adrian Mowat of JP Morgan said India looks weak on technical parameters. According to him, 10-12 percent correction is routine in emerging markets. Despite weakness, however, India remains one of the fastest growing emerging market economies, he believes, adding he will be a buyer in case markets show signs of further weakness.

Reliance Industries extended losses, falling 3 percent. Tata Motors topped the selling list on Sensex, down 3.6 percent after CLSA has reduced target price on the stock to Rs 600 from Rs 650 per share but reiterated a buy rating with a view that current weakness is an opportunity to enter. It has also cut FY17-18 earnings per share (EPS) by 11 percent factoring in lower China volume growth and a 50 percent contraction in JLR's China margin premium over other regions.

Shares of ICICI Bank, HDFC, Infosys, HDFC Bank, Larsen & Toubro, SBI, ITC, BHEL, Axis Bank and NTPC declined 1-3 percent while Vedanta outperformed, up 2.5 percent ahead of likely meeting for considering of merger of Cairn with itself on June 14. HUL was up 0.9 percent and Sun Pharma gained 0.4 percent.

2:00 pm Market slips again: The Sensex is down 329.92 points or 1 percent at 26510.5. After testing 8000-level, the Nifty is down 111.70 points or 1.4 percent at 8012.75. About 761 shares have advanced, 1715 shares declined, and 151 shares are unchanged.

Tata Motors, Reliance, BHEL , Wipro and SBI are major losers in the Sensex. Among the gainers are Vedanta, HUL and Sun Pharma.

1:30 pm Buzzing: Shares of Sun Pharmaceutical Industries climbed on getting the approval from US Food and Drug Administration for Donepezil hydrochloride. Donepezil hydrochloride is used in treatment for alzheimer. Additionally, brokerage Credit Suisse has maintained outperform rating on the stock, thought it believes Xelpros may not be meaningful for the company. ADVERTISING "Sales potential is low at USD 25-50 million, SPARC gets USD 16 million milestones, and SPARC gets royalties and milestones linked to sales of Xelpros," it reasoned in its note.

The market is succumbing to pressure dragged sharply by auto and bank stocks. The Sensex is down 268.90 points or 1 percent at 26571.60, and the Nifty is down 89.40 points or 1.1 percent at 8035.05. About 798 shares have advanced, 1552 shares declined, and 145 shares are unchanged.

Tata Motors, Reliance, SBI, NTPC and Wipro are major losers while Vedanta, HUL and Sun Pharma are top gainers in the Sensex.

Meanwhile, Reserve Bank Governor Raghuram Rajan met Finance Minister Arun Jaitley and discussed macroeconomic issues.

"We have voiced whatever we had to say at the monetary policy," Rajan added. On June 2, RBI reduced the short term lending rate (repo) from 7.5 per cent to 7.25 per cent. It has cut rate by 0.75 per cent since January in three instalments, but not all the banks have passed on the benefit to customers.

Besides, Jaitley is scheduled to meet the heads of public sector banks tomorrow to review the banks' annual performance and bad loan situation as also to persuade them to pass on RBI's rate cut benefit to borrowers for propping growth.

12:55pm Market Update: The Sensex dropped 269.01 points or 1 percent to 26571.49 and the Nifty declined 88.25 points or 1.09 percent to 8036.20.

About 791 shares have advanced, 1549 shares declined, and 146 shares are unchanged on the BSE.

12:50pm FII View: Bharat Iyer, JPMorgan said the brokerage has been pointing out for some time now that price action in Indian Equities has been worrying. The market has subsequently corrected in absolute terms by over 10 percent & underperformed the peer group meaningfully, he added.

From a fundamental perspective, the medium to long-term appeal of Indian equities remains healthy, given structural factors & a much improved policy environment, Iyer said, adding but in the near term, investors will have to continue to contend with positioning, valuations & a feeble recovery.

According to him, policy support will likely have to play a crucial role in arresting the decline and putting a bottom in place. We remain wary of chasing beta as also rural discretionary consumption plays, he said.

12:25pm Mercedes-Benz begins production: Mercedes-Benz India inaugurated the phase II production at its facility in Chakan, Pune. The Mercedes Chakan plant can now produce 20,000 cars per annum.

Along with the inauguration of the plant, Mercedes-Benz also announced local assembly of the GLA. The new price forthe Mercedes-Benz GLA CDI is Rs 31.31 lakhfor the Style trim and Rs 34.25 lakhfor the Sport, ex-Pune respectively.

Mercedes says that they have installed state of the art equipment to assemble the MFA platform-based GLA SUV.Mercedes-Benz may also start local.

12:00pm Market Check
The selling pressure mounted on Dalal Street in noon trade but the Nifty threatened to break the crucial 8,000-mark. Banking & financials, technology, oil and capital goods dragged the market.

The Sensex declined 274.35 points or 1.02 percent to 26566.15 and the Nifty fell 89.20 points or 1.10 percent to 8035.25. The broader markets, too, slipped more than half a percent. More than two shares declined for every share advancing on the Bombay Stock Exchange.
 
Globally, however, Asian markets except Shanghai gained even as China's retail sales and industrial production matched analysts' expectations. Kospi remained flat as Bank of Korea cut rates by 25-basis-points.

Back home, PSU banking stocks underperformed with the SBI falling more than 2 percent. CNBC-TV18 learnt from sources that the RBI has written to finance ministry seeking more capital for PSU banks urging for more than double capital infusion. The finance minister will hold a meeting with public sector bank heads tomorrow to review performance.

Nestle India gained 0.7 percent. Sources told CNBC-TV18 that USFDA is looking into the Maggi issue and the company is not clear if US products will be affected by recall in India. Additionally, the company has approached the Bombay High Court against the FSSAI order on Maggi.

NALCO rallied 7 percent amid weak market condition as Credit Suisse initiated coverage on the stock with an outperform rating and a target price of Rs 57. The brokerage believes even as the company embarked on USD 900 million refinery expansion, healthy operating cash flows will keep it debt free in otherwise a debt laden industry.

11:50 am Market check: The market is reeling under extreme pressure. The Sensex fell 300 pts and recovered a bit to  26570.57 down 269.93 points or 1 percent. the Nifty down 90.55 points or 1.1 percent at 8033.90. About 717 shares  advanced, 1501 shares declined, and 126 shares are unchanged.

11:45 am Buzzing: Pharma major Glenmark Pharma gained 1.6 percent intraday on getting final approval from United States Food & Drug Administration for psoriasis drug. "Glenmark Pharmaceuticals Inc. USA has been granted final approval by the USFDA for Calcipotriene Cream, 0.005 percent, the therapeutic equivalent of Dovonex Cream, 0.005 percent of Leo Pharma A/S, said the company in its filing. Glenmark will commence shipping of Calcipotriene cream immediately, it added.

11:30 am Market outlook: Dhiraj Agarwal, independent market expert is convinced the market is not out of woods yet, although a few data points have turned positive. The risk of monsoon is something one should take cognizance of, Agarwal warns. He rubbishes the ongoing assertions that a recovery is round the corner saying "nobody has any concrete points to make."

Speaking to CNBC-TV18, Agarwal said the quarterly earnings show the topline has taken a sharp beating, which remains a cause of concern. The other risks include rising bond yields and rising crude prices. All put together establish the theory that the stress in economy is far from over and it is tough to find shield in largecaps at this stage, Agarwal summarises.

The market is slipping away quickly. The Sensex is down 263.88 points or 0.9 percent at 26576.62 and the Nifty is down 83.25 points or 1 percent at 8041.20. About 748 shares have advanced, 1303 shares declined, and 129 shares are unchanged.

HUL, Sun Pharma, Vedanta, Coal India and GAIL are top gainers while Tata Motors, SBI, Tata Steel, Reliance and M&M are among laggards in the Sensex.

Manoj Murlidharan of Religare Securities says, ''As of now, we would not be buying Nifty at this level but if the Nifty corrects to 8,100-8,103 on the futures, that is when it is a buy, the stop loss should be 8,064 and the upside is at the weighted average price which is 8,220. So we are expecting the Nifty to find the resistance close to 8,220. If it goes to 8,220 first, it becomes a sell at 8,100, it is a buy for 120 points.''

10:55am Market Expert: Dhiraj Agarwal, Independent Market Expert is convinced the market is not out of woods yet, although a few data points have turned positive. The risk of monsoon is something one should take cognizance of, Agarwal warns. He rubbishes the ongoing assertions that a recovery is round the corner saying "nobody has any concrete points to make."

Speaking to CNBC-TV18, Agarwal said the quarterly earnings show the topline has taken a sharp beating, which remains a cause of concern. The other risks include rising bond yields and rising crude prices. All put together establish the theory that the stress in economy is far from over and it is tough to find shield in largecaps at this stage, Agarwal summarises.

10:40am Market Update: The market wiped out early gains with the Sensex falling 149.41 points to 26691.09 and the Nifty declining 47 points to 8077.45. About 889 shares have advanced, 1044 shares declined, and 116 shares are unchanged on the BSE.

Banking and financials, auto, technology, capital goods and auto stocks saw profit booking.

10:25am AstraZeneca locked at 20% upper circuit: AstraZeneca Pharma India today announced the launch of FORXIGA (dapaglifozin), a treatment for Type 2 diabetes mellitus. "It has an unique insulin independent mode of action that helps remove excess glucose from the body via urine which is associated with reductions in glycated haemoglobin, weight and systolic blood pressure," explained the company in its filing.

Globally, FORXIGA is the first medicine in the new sodium-glucose cotransporter 2 inhibitor class to gain regulatory approval for the treatment of Type 2 diabetes mellitus, it said.

FORXIGA is currently approved in more than 40 countries while in India, it approved by the Drugs Controller General of India on February 25, 2015.

The company said FORXIGA is available in the markets from May 2015.

10:00am Market Check
The market is flat after initial early gains. The Sensex is up 56.45 points at 26896.95, and the Nifty is up 14.50 points at 8138.95. About 1094 shares have advanced, 592 shares declined, and 107 shares are unchanged.

Vedanta, HUL, Sun Pharma, GAIL and Coal India are top gainers while Tata Steel, Tata Motors, NTPC, Wipro and BHEL are among laggards in the Sensex.

Meanwhile, oil prices rose solidly for a second day in a row today after US data showed declines in crude and gasoline inventories.

The US Department of Energy's inventory report for the week ending June 5 showed US crude stocks fell 6.8 million barrels and gasoline supplies dropped 2.9 million barrels.

However, analysts noted that US oil production edged up 24,000 barrels to an average 9.61 million barrels a day during the week, the highest level on record. Gene McGillian, broker and analyst at Tradition Energy said he was "a little puzzled" at the market's bullish response to the data.

9:55 am Brokerage view: Antique has upgraded ONGC to buy with a target price of Rs 375 per share, indicating a 23 percent upside. Its earnings per share (EPS) is at Rs 31-35 per share based on new subsidy mechanism.

According to the brokerage, acceptance of the new formula for FY16, short-term upside in Brent and return of Ratna/R-Series block are the near-term triggers for the stock. However, a sharp fall in oil price may be a potential risk.

As per estimates, ONGC's earnings are likely to recover a sharp 74 percent on sequential basis and 40 percent annually.

9:30 am Market outlook: UBS Securities has lowered its year-end Nifty target to 8600 from 9600. UBS's research note states market expectations in terms of pace of growth recovery needs to further reset downwards. Gautam Chhaochharia, head of India research at UBS Securities, says it just reflects revision in earnings estimates. The lower Nifty target, however, continues to be based on 17x one-year forward PE, he adds. According to him, deflation is hurting corporate earnings.

Chhaochharia says interest for India remains high among investors (foreign), almost at the same level as last year this time.

The market gained further on Thursday morning with the Sensex rising 118.08 points to 26958.58 and the Nifty climbing 28.30 points to 8152.75. About 512 shares have advanced, 102 shares declined, and 66 shares are unchanged on the BSE.
 
ICICI Bank, Sun Pharma, Vedanta, Axis Bank, Hero Motocorp and Ambuja Cements gained 1-1.5 percent while Tata Motors, Tata Steel, NTPC, HDFC Bank, GAIL, Cairn India, HCL Technologies, Tech Mahindra and Dr Reddy's Labs were top losers in early trade.

Meanwhile, the Indian economy has improved on all fronts and the government's coffers are ringing. The indirect tax collections jumped by a whopping 40 percent in just the first 2 months of this fiscal and the reserve bank made the highest ever quarterly reserves of over USD 30 billion in just the first three months of this calendar year.

The Indian rupee has opened higher at 63.81 per dollar today against previous day's closing value of 63.84 a dollar.

Mohan Shenoi of Kotak Mahindra Bank said, "Global currency markets are experiencing high levels of volatility with uncertainty in Greece continuing. The June 16 FOMC meeting is the next key trigger for the currency markets."

"The USD-INR pair is also trading in a range with Reserve Bank of India (RBI) intervention on both sides of the market. The USD-INR pair is expected to trade today in a range of 63.70-64/dollar," he added.

The dollar slipped to two-week lows against the yen yesterday after Japan's chief central banker said the yen was "very weak" and unlikely to fall further.

The dollar eased broadly and also fell against the euro, which benefited from a rise in benchmark german 10-year bund yields to more than 1 percent for the first time since september.

Globally, US markets bounced back closing up more than 1 percent amid signs of encouraging developments in the Greece debt talks. European market too ended higher.

Asian markets were higher with South Korean shares holding on to gains after the Bank of Korea lowered its base rate by 25 basis points to 1.50 percent. Japan's Nikkei rebounded as the yen weakened 0.3 percent versus the USD in early Asian trade.