Sensex, Nifty end marginally higher; banks gain, IT falls

There was a sigh of relief on Dalal Street Friday after yesterday's steep fall but the Nifty remained below 8000-mark. Banking & financials, select auto and oil stocks led the market higher while the selling in IT and FMCG stocks capped the upside. After day's consolidation, the market ended with marginal gains. The 30-share Sensex was up 54.32 points at 26425.30 and the 50-share NSE Nifty gained 17.55 points at 7982.90.

Experts continued to see weakness in India due to local factors but they expect some recovery in second half of FY16.

In the short term, the market appears very soft with further room for correction, said Sunil Garg of JPMorgan.

"Monsoon is clearly causing disappointments but the fact remains despite a few rate cuts since the beginning of the year, credit growth has not responded and is languishing below 10 percent. In addition, the RBI commentary suggests there aren't going to be further cuts. This will mean India will continue to underperform China in the short term leading to fund reallocation favouring the dragon nation," he reasoned.

The volatility was also ahead of announcement of CPI data for May and industrial output for April later today.

In the broader space, the BSE Midcap gained 0.2 percent while Smallcap fell 0.5 percent. The market breadth was weak as about 1160 shares advanced against 1477 shares declined on the Bombay Stock Exchange.

For the week, the Sensex declined 1.3 percent and Nifty dropped 1.6 percent while the CNX Midcap plunged 2.4 percent and BSE Smallcap lost 2.6 percent. Worries like delay in monsoon, further rate cut, economy recovery etc caused the selling pressure during the week. Additionally, the Nifty's fall below important psychological 8000-mark and Greece concerns also triggered sell-off.

Meanwhile, Finance Minister Arun Jaitley met top bankers, urging them to pass on the RBI's rate cuts. He also said he's seriously looking at capital infusion into PSU banks.

It was a day of Reliance Industries that held its 41th annual general meeting. While addressing AGM, CMD Mukesh Ambani said Reliance Jio will launch commercial operations in December and aims to cover the entire nation within three years, adding 4G LTE devices will be sold at a price below Rs 4,000 by year-end.

He also said Reliance will also strengthen its core business, planning to pump in Rs 2 lakh crore in the next 18 months. As far as retail business is concerned, he said the company will expand retail presence to more than 900 cities by next year. The stock was up 1.4 percent.

However, technology stocks saw selling pressure after the media report said US government opened an investigation against two companies (TCS and Infosys) for possible violations of H1-B visa rules. TCS plunged 2.3 percent and Infosys was down 1.3 percent.

Vedanta declined 2 percent ahead of likely board members meeting (on June 14) to consider merger of Cairn India with the company.

Among others, Bajaj Auto and Tata Power topped the buying list, up 3.5 percent each followed by ICICI Bank, HDFC and BHEL with 2-2.5 percent rally. However, Tata Motors, L&T, Wipro and Hindalco Industries fell 1-2 percent.

3:30 pm Market close: It was a very tepid day at Dalal Street with the benchmark indices unable to make any significant move. The Sensex ended up 54.32 points at 26425.30 and the Nifty was up 17.55 points at 7982.90. About 1162 shares advanced, 1478 shares declined and 151 shares were unchanged. Tata Power, Bajaj Auto, ICICI Bank, BHEL and HDFC were top gainers in the Sensex. Among the losers were Hindalco, Vedanta, Wipro, TCS and Tata Motors.

02:58pm Market Update: The Sensex gained 46.59 points at 26417.57 and the Nifty rose 14.05 points to 7979.40.

About 1061 shares have advanced, 1517 shares declined, and 135 shares are unchanged on the BSE.

02:50pm ABG Shipyard up 8%: ABG Shipyard today said it's in talks with Privinvest Holding, a major player in global naval, commercial vessels and super yacht industry, for a strategic stake sale.

"We have received firm Expression of Interest from Privinvest... We are in discussion with them for a strategic stake sale," the country's largest private sector shipbuilding yard said in a regulatory filing to BSE.

Without disclosing any financial details, the flagship of the ABG Group said: "Privinvest owns Nobiskrug GMBH and ADM Kiel Shipyards in Germany, Hellenic Shipyards SA Greece, CMN Shipyard, France, and Logistics International SAL ADM Shipyards, UAE."

The company did not offer any clarity on the equity percentage to be sold, but Privinvest is expected to buy up to 49 percent through fresh equity worth Rs 1,000 crore.

02:30pm PVR in focus: Film exhibition firm PVR today said it will raise Rs 350 crore from Indian private equity firm Multiple Alternate Asset Management, which will pick up 10.7 percent stake in the company.

PVR has signed definitive agreements with funds managed by Multiple Alternate Asset Management (Multiples), under which the PE firm through its funds would subscribe 50 lakh equity shares of the multiplex chain operator for a 10.7 percent fully diluted stake, the company said in a statement. The company's board today approved issuing the equity shares at a price of Rs 700 apiece on a preferential basis, it added.

The board has also convened an extra-ordinary general meeting on July 10 to seek shareholders' approval for the same. Commenting on the development, PVR Managing Director Ajay Bijli said the partnership was testimony to the faith that Multiples PR team reposed in the business model, promoters and the management of PVR team.

02:00pm Market Check
The market continued to be lacklustre in afternoon trade after its steep fall in previous session. The Sensex declined 14.88 points to 26356.10 and the Nifty fell 8.35 points to 7957. The market breadth was weak as about 969 shares have advanced against 1515 shares declined on the Bombay Stock Exchange.

Select buying was seen in blue chips like HDFC, ICICI Bank and Reliance Industries whereas technology stocks caught in bear grip after the media report said US government opened an investigation against two companies for possible violations of H1-B visa rules.

Shares of TCS, Infosys, Tata Motors, L&T, Wipro, Vedanta and Hindalco slipped 1-3.5 percent.

Sunil Garg of JP Morgan said weakness in India is purely due to domestic factors. He expects more downside. According to him, India will continue to underperform China.

Reliance Industries seems to be on the verge of transforming from a petrochemical giant to telecom media giant. At its 41st AGM, Reliance's CMD, Mukesh Ambani said the company will launch Reliance Jio's 4G services by December this year and is aiming at 100 percent national coverage within the next 3 years.

Global markets were mixed. While Hang Seng and Shanghai closed with gains of 1-1.5 percent, European markets traded with cuts of 1-1.5 percent. Meanwhile Greece dropped more than 3 percent today as Grexit fears rise after the IMF walked out on Greece's bailout talks.

CPI for the month of May is expected at 4.99 percent against 4.87 percent in previous month. Core CPI is seen rising to 4.6 percent and IIP for April is expected to be muted at 1.6 percent due to weak core sector data.

1:45 pm Market outlook: Market masters say there is a super sale going on in Indian equities and retail investors should jump the bandwagon or repent later for missing the bus. However, the velocity of uptrend, which is based on monetary, fiscal and currency stimuli, is capped as of today, says Manish Gunwani, Senior Fund Manager at ICICI Pru AMC.

In an interview to CNBC-TV18, he says holding up of the stimuli is actually setting up base for a strong bull run ahead. In the short run, the macros may look tough, but long term is undoubtedly good. However, a big meltdown from here is unlikely and banks, capital goods and cement are looking quite attractive from medium term perspective. Since we have growth at cyclical lows, there's a lot of scope for rate cuts which should happen to boost economy, he said. He suggests looking at good quality private sector banks, which have been growing faster than nominal GDP. .

1:30 pm Rupee fall: The Indian currency has weakened to 64 per dollar. The Indian rupee opened flat at 63.96 per dollar against previous day's closing value of 63.97 a dollar. Pramit Brahmbhatt of Veracity said, "Investors likely to trade cautiously in the market as indices are trading in bearish mode. They are also expected to trade watchfully ahead of macro data due for the day."

The market is consolidating as the Sensex is up 56.73 points at 26427.71 and the Nifty is up 13.35 points at 7978.70. About 976 shares have advanced, 1359 shares declined, and 138 shares are unchanged.

Bajaj Auto, Tata Power, HDFC, Cipla and Reliance are top gainers in the Sensex. Among major losers in Tata Motors, Vedanta, Hindalco, Wipro and TCS.

The US government has opened an investigation against two of the biggest Indian outsourcing companies for possible violations of H1-B visa rules, according to a media report.

The Department of Labour has opened the investigation against Tata Consultancy Services and Infosys for "possible violations of rules for visas for foreign technology workers under contracts they held with an electric utility Southern California Edison," the New York Times said.

12:45pm Market Update: Equity benchmarks erased gains. The Sensex gained 4.84 points at 26375.82 and the Nifty declined 1.80 points to 7963.55. About 939 shares have advanced, 1382 shares declined, and 130 shares are unchanged on the BSE.

TCS and Infosys dragged the market, down 1-2 percent as media reports suggested that the US government has opened an investigation against two of the biggest Indian outsourcing companies for possible violations of H1-B visa rules.

12:25pm FII View: India specific factors, rather than global factors are weighing in on Indian equities at the moment, says Sunil Garg of JPMorgan in an exclusive interview to CNBC-TV18.

Garg says monsoon is clearly causing disappointments but the fact remains despite a few rate cuts since the beginning of the year, credit growth has not reponded and is languishing below 10 percent. In addition, the RBI commentary suggests there aren't going to be further cuts. So in the short term the market appears very soft with further room room for correction, he says. This will mean India will continue to underperform China in the short term leading to fund reallocation favouring the dragon nation.

12:00pm Market Check
The market gained strength in noon trade with the Sensex rising 101.07 points to26472.05 and the Nifty climbing 27.40 points to 7992.75.

However, the market breadth remained negative as about 885 shares have advanced against 1332 shares declined on the Bombay Stock Exchange.

Bajaj Auto topped the buying list on Sensex, up 4 percent followed by Tata Power with 2.6 percent rally. HDFC surged 2 percent. Cipla, BHEL and ICICI Bank gained over 1 percent.

Reliance Industries remained firm, up more than 1 percent after the company's chairman and managing director, Mukesh Ambani (in Annual General Meeting) said Reliance will invest Rs 2 lakh crore over next 12-18 months. He believes full benefits of investments will be realised from FY17.

While talking on Reliance Jio, he said, "We aim to have 100 percent national coverage within 3 years with Reliance Jio and are expanding Reliance Jio to cover 80 percent of country's population by year-end." He added that FY17 will be the first full year of commercial operations for Reliance Jio that will launch commercial operations in December.

However, Tata Motors, Vedanta and Hindalco shed more than 2 percent.

11:50 am: IndusInd Bank approved a preferential equity issue of up to 1.5 percent to its promoters IIHL to ensure their holding does not fall below 15 percent, after an upcoming institutional placement of shares, in which it is planning to raise Rs 4,800 crore. The bank's board approved a preferential allotment of equity shares to promoters IndusInd International Holdings (IIHL), a Hinduja Group company, of up to 1.5 percent of the authorised equity share capital, the private lender said in a BSE filing.

This is being done to ensure the aggregate holding of the promoters is retained at 15 percent after the proposed share sale, it added.

11:30 am Buzzing: Shares of Jubilant Foodworks rose 6 percent intraday. CLSA feels Jubilant will be a key beneficiary of urban recovery in the food service industry while its same-store-sales growth (SSG) may touch even double digits in next 2-4 quarters.

"The substantial investments made in its backend and strong store expansion would also help. Every 1 percent change in SSG impacts FY16 EPS by 5 percent and Ebitda margins by 40 basis points (bps)," it says in a report.

Jubilant management is cautiously optimistic on its near-term demand outlook as consumer sentiments are yet to improve meaningfully. However, the brokerage feels that lower input cost inflation has provided greater disposable income and hence SSG is likely to stay positive. It adds that near-term margins will be largely be determined by SSG.

The market is still flat ahead of April IIP and May CPI data to be announced today. The Sensex is up 46.47 points at 26417.45. The Nifty is up 8.20 points at 7973.55. About 872 shares have advanced, 1113 shares declined, and 126 shares are unchanged.

Tata Power, Bajaj Auto, Reliance, HDFC and BHEL are top gainers in the Sensex. Among the losers are Vedanta, Hindalco, Tata Motors, Coal India and Sun Pharma.

April IIP data first for this fiscal is expected to come in at around 1.16 percent versus 2.1 percent on a month-on-month basis. Weak core sector data and contraction in core sector data for the second consecutive month are reasons behind the low expectation. Six out of eight constituents of the core sector data, which is 38 percent of the IIP figure, was in the red. Only steel and coal managed to eke out some gains.

May CPI may possibly come in at around 4.99 percent versus 4.87 percent on a month-on-month basis.

Meanwhile, crude oil futures today fell 0.54 percent to Rs 3,874 per barrel as speculators cut down bets amid a weak trend in Asian trade.

The fall in crude prices in futures trade was primarily because of a stronger dollar as traders were concerned about Greece's troubled debt negotiations while the International Energy Agency's prediction of demand softening added to the downward pressure, analysts said.

10:57am Market update: The Sensex gained 50.89 points at 26421.87 and the Nifty rose 8.95 points to 7974.30. About 900 shares have advanced, 1077 shares declined, and 120 shares are unchanged on the BSE. 10:45am IIP and CPI forecast: A CNBC-TV18 poll expects the IIP data to come in at around 1.16 percent versus 2.1 percent on a month-on-month basis and the range is quite important  which is a broad 0.3 percent to 1.8 percent.

The reason behind the low expectation is because of the weak core sector data, the contraction in core sector data was for the second consecutive month. Six out of eight constituents of the core sector data, which is 38 percent of the IIP figure, was in the red. Only steel and coal managed to eke out some gains.

In terms of the CPI data, the estimate is that it would possibly come in at around 4.99 percent versus 4.87 percent on a month-on-month basis and the range is seen again anywhere between 4.7 percent and 5.5 percent.

10:15am Market Expert: There is a distinct pattern to the sell-off in the market with investors selling only non-performing stocks, says Ajay Srivastava, CEO of Dimensions Consulting. However, he adds that good quality stocks at the moment are not at reasonable valuation.

He feels midcaps will take the brunt of selling whenever it happens. The next trigger for the markets will be the June earnings, when investors will get a clear picture on which stocks to buy, he adds.

According to him, the recent correction in the market is mainly on the back of HNI unwinding. Srivastava feels risks outweigh returns at this point. However, he adds that retail investors continue to feel confident about the market.

Sounding disappointed with the Reserve Bank, Srivastava says the government's move on fiscal consolidation does not match RBI's monetary policy stance.

10:00am Market Check
The market continued to consolidate below 8000 level on the Nifty after yesterday's deep fall. The Sensex gained 40.97 points at 26411.95 and the Nifty rose 1.95 points to 7967.30.

The broader markets declined margnially. About 681 shares have advanced, 970 shares declined, and 110 shares are unchanged on the Bombay Stock Exchange.

Mastek plunged 66 percent to Rs 148 as the stock adjusted for the demerger of its insurance business. Hence, listed entity will have the services business and insurance business transferred to its subsidiary Majesco. Every shareholder of Mastek will get equal shares in Majesco.

9:50 am Market outlook: There is a distinct pattern to the sell-off in the market with investors selling only non-performing stocks, says Ajay Srivastava, CEO of Dimensions Consulting. However, he adds that good quality stocks at the moment are not at reasonable valuation. He feels midcaps will take the brunt of selling whenever it happens. The next trigger for the markets will be the June earnings, when investors will get a clear picture on which stocks to buy, he adds.

According to him, the recent correction in the market is mainly on the back of HNI unwinding. Srivastava feels risks outweigh returns at this point. However, he adds that retail investors continue to feel confident about the market.

9:30 am Bankers meet with FM: Ahead of a meeting between Finance Minister Arun Jaitley and top bankers, private sector lender Yes Bank joined its peers in promising to deliver a rate cut soon.

"We have full visibility of a 25 bps base rate cut at Yes Bank very soon," the lender's managing director and chief executive Rana Kapoor told reporters here today.
The bank's larger rival HDFC Bank had yesterday said a majority of lenders will be cutting rates by Friday on deposit rate cuts and sluggish credit growth, which is leaving them with high liquidity.

According to reports, agenda for the meeting includes persuading the banks to pass the benefits of the rate cuts by RBI to the borrowers in a bid to give a fillip to economic growth.

The market has opened flat on Friday after sharp cut seen yesterday. The Sensex is down 15.84 points at 26355.14 and the Nifty is down 10.15 points at 7955.20. About 383 shares have advanced, 578 shares declined, and 75 shares are unchanged.

Reliance, Wipro, Infosys, Bajaj Auto and Bharti Airtel are top gainers in the Sensex. Among the losers are Tata Motors, Vedanta, Sun Pharma, Coal India and Axis Bank.

The Indian rupee has opened flat at 63.96 per dollar against previous day's closing value of 63.97 a dollar.

Dollar rose, helped by a surge in US retail sales in May that could push Federal Reserve policymakers toward raising US interest rates as early as September.

Pramit Brahmbhatt of Veracity said, "Investors likely to trade cautiously in the market as indices are trading in bearish mode. They are also expected to trade watchfully ahead of macro data due for the day."

He further added, "Expect rupee to trade rangebound to slightly weak taking cues from a strong dollar. The range for the rupee is seen between 63.60-64.30/dollar."

In Asia, Korea Composite Stock Price Index or Kospi lead the gains supported by the Bank of Korea's decision to cut interest rates to record lows, while the rest of the markets traded subdued.

The US markets, meanwhile, closed slightly higher on Thursday, extending the prior day's rebound, as negative news out of Greece counterbalanced a good retail sales report. Treasury yields extended losses after earlier trading just below recent multi-month highs, with the 10-year yield falling about 10 basis points to trade below 2.40 percent. On the economic data front, retail sales for May showed an increase of 1.2 percent, with the ex-autos figure up 1 percent. Weekly jobless claims totaled 279,000, slightly above expectations.

In Europe too equities closed slightly higher, after paring gains as hopes waned that a deal between Greece and its bailout supervisors was near. Greece continued to dominate the headlines.