Sensex slips 114 points, Nifty ends below 8350; TCS falls 2%
09 July 2015
03:30 Market closing: Though the market recovered intraday, it ended in red. The Sensex slipped 114.06 points or 0.4 percent at 27573.66 and the Nifty was down 34.50 points or 0.4 percent at 8328.55. About 1529 shares advanced, 1283 shares declined, and 153 shares were unchanged.
Vedanta, TCS, Bajaj Auto, Infosys and Tata Motors were maong major laggards in the Sensex. Among the gainers are BHEL, Hindalco, L&T, Hero and Lupin.
03:10 pm Dollar-rupee: The Reserve Bank of India on Thursday fixed the reference rate of rupee at 63.5065 against the US dollar and at 70.4986 for the euro as against 63.5690 and 69.9323, respectively yesterday.
According to an RBI statement, the exchange rates for the pound and the yen against the rupee were quoted at 97.8508 and 52.30 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon.
The SDR-rupee rate would be based on this rate, the statement added.
02:55 pm Market Update: The Sensex fell 75.41 points to 27612.31 and the Nifty declined 24.30 points to 8338.75. About 1534 shares have advanced, 1180 shares declined, and 162 shares are unchanged on the BSE.
02:45 pm Bajaj Corp Q1 earnings: FMCG firm Bajaj Corp reported a 19.94 percent increase in its standalone net profit at Rs 47.51 crore for the first quarter of the 2015-16 fiscal. It had reported a net profit of Rs 39.61 crore in the year-ago period, the company said in a BSE filing.
Bajaj Corp's net sales in the quarter under review stood at Rs 218.37 crore, up 14.29 percent as against Rs 191.06 crore in the same period last year.
During the quarter, overall expenses were at Rs 153.75 crore compared with Rs 138.47 crore.
Bajaj Corp has several products in the hair care segment such as Bajaj Almond Drops, Bajaj Kailash Parbat and Bajaj Brahmi Amla.
02:35 pm Premier Explosives on fire: Premier Explosives has received an industrial license from Department of Industrial Policy and Promotion (DIPP). The stock gained more than 17 percent.
The company has received license for 1] military fuses of all types including filling and assembling, 2] munition 20 mm and above including filling and assembling and 3] war heads of all types.
AN Gupta, Chairman & Managing Director of Premier Explosives said: "It is a big opportunity. This will require a facility to be set up so it will take another 1-2 years time to start earning revenue".
02:20 pm Oil Update: Crude oil prices bounced on strong economic data from Japan and Germany, and as Chinese shares picked up after the government launched new steps to halt a rout in its stock markets.
Brent crude was 70 cents higher at USD 57.75 a barrel, though still 4 percent below last Friday.
Chinese stocks rallied after the securities regulator banned shareholders with large stakes in listed firms from selling, in Beijing's most drastic step yet to stem a sell-off that has roiled global financial markets.
Chinese police were investigating clues pointing to potentially "malicious" short-selling of Chinese shares, state news agency Xinhua said on Thursday.
02:00 pm Market Check
The market remained under pressure with the Nifty struggling below 8350, dragged by technology, FMCG, oil and auto stocks. However, the global markets gained following measures taken by China and on hopes of Greek proposals.
The Sensex declined 69.68 points to 27618.04 and the Nifty slipped 24.35 points to 8338.70. About 1590 shares have advanced, 1078 shares declined, and 160 shares are unchanged on the BSE.
Prabhat Awasthi of Nomura said there is a significant sequential improvement expected in earnings this quarter. If Nomura's forecast is correct, June quarter will have the best sequential growth in past four years for sales, EBITDA and net profit, it added.
Globally, major European markets gained 0.6-1 percent on hopes of solid greek proposals. Asian markets, too, saw a smart rebound with the China ending the day with almost 6 percent gains on the back of fresh regulatory support.
TCS fell over 2 percent ahead of Q1 earnings today. A CNBC-TV18 poll sees a 4.2 percent uptick in revenue but higher wages and visa costs may weigh on profit.
Mango juice manufacturer Manpasand Beverages had a tepid listing in morning, but the stock reversed losses to now trade 5.5 percent higher at Rs 337.35.
1:50 pm Monsoon woes: Monsoon rains are continuing to wreak havoc across the country with incessant rains triggering landslides in Himachal Pradesh.
Several homes have been left damaged in Shimla and Kullu districts due to landslides.
A high alert has been sounded with major rivers like The Beas and Parvati flowing above the danger mark.
The MET department has predicted heavy rains and thundershowers to continue across the state for the next two days.
Monsoon fury has also hit Haridwar in Uttarakhand. Flood waters entered villages along the banks of the Ganga. This after one of the dams broke due to incessant rains in Garhwal all through the week. The villagers along the banks are at a risk of being washed away.
1:30 pm Poll: Tata Consultancy Services (TCS) is expected to report a 7.5 percent decline sequentially in profit after tax at Rs 5,466 crore in April-June quarter, according to a CNBC-TV18 poll. However, it is likely to lead industry on revenue front (which had missed expectations for three quarters). The country's largest IT company will announce its quarterly earnings on July 9.
Revenue is likely to increase by 6.36 percent quarter-on-quarter to Rs 25,759 crore and dollar revenue may inch up by 4.2 percent to USD 4,065 million in the quarter ended June 2015.
Analysts do not see significant cross currency impact in Q1FY16 (against 200-300 basis points in Q4FY15), saying dollar revenue growth in Q1 and Q2 is generally strong. Dollar revenue increased by 5.45 percent in Q1FY15 and 4.11 percent in Q1FY14.
Note that the Q4FY15 numbers of TCS are adjusted for one-time employee bonus of Rs 2,628 crore.
The market is struggling with the Nifty below 8350 level. The 50-share index is down 21.65 points at 8341.40. The Sensex is down 74.08 points or 0.3 percent at 27613.64. About 1588 shares have advanced, 980 shares declined, and 148 shares are unchanged.
BHEL, L&T, Hero, Bharti Airtel and Hindalco are top gainers in the Sensex. Among the losers are Vedanta, Infosys, Tata Motors, TCS and Bajaj Auto.
Tracking a weak global trend, gold prices were down by Rs 128 to Rs 26,085 per 10 grams in futures market on Thursday as speculators indulged in trimming positions. Similarly, the yellow metal for delivery in far-month October lost Rs 105, or 0.40 percent, to Rs 26,354 per 10 grams in 19 lots.
Market analysts said the fall in gold futures was mostly due to a weakening trend in the global market.
12:55 pm Market Update: The Sensex declined 24.34 points to 27663.38 and the Nifty fell 8.05 points to 8355.00. About 1603 shares have advanced, 926 shares declined, and 131 shares are unchanged on the BSE.
12:50 pm Anil Dhirubhai Ambani Group stocks in focus: Reliance Infrastructure, Reliance Power, Reliance Communications and Reliance Capital gained 2-3.5 percent.
12:40 pm Europe opens higher: France's CAC, Germany's DAX and Britain's FTSE gained 0.5 percent each on the hope that Greece will come up with concrete proposals for creditors this week.
Euro zone leaders have given Greece until Friday to produce a detailed reform plan ahead of a summit of all 28 members of the European Union (EU) on Sunday, at which the leaders will decide whether to accept the plans and negotiate a third aid program for Greece.
Greece is expected to submit its proposals Thursday and has already requested a three-year loan from the European Stability Mechanism (ESM) bailout in order to stave off bankruptcy. Failure to reach a deal on reforms with Europe by Sunday would make a "Grexit" - Greece's exit from the euro zone - more likely.
12:20 pm FII View on China: Post Wednesday's meltdown, the Chinese market rallied over 6 percent today. But the question is whether it is just a one day rebound or whether the sell-off in Chinese stocks is over.
Kevin Lai, chief economist, Asia ex-Japan, Daiwa Capital Markets, says from a macro perspective, China continues to remain weak. Market participants are expecting a monetary stimulus and for it to help, but hasn't happened, he says. Further, according to him, those investors who have taken massive risks in the Chinese market are under pressure. This in turn will result in more selling, he told CNBC-TV18.
Lai says over the last six months, the big picture in China has been deteriorating. The country is fighting against money outflow, deflation, etc.
He expects the US dollar to strengthen more leading to a further fall in commodity prices.
12:00 pm Market Check
The market remained rangebound in noon trade while the broader markets outperformed benchmarks, gaining 0.34 percent each. Technology, FMCG and auto stocks lost ground whereas capital goods, healthcare and select metal stocks gained.
The Sensex declined 18.88 points to 27668.84 and the Nifty slipped 7.15 points to 8355.90. About 1559 shares have advanced, 890 shares declined, and 128 shares are unchanged on the BSE.
The recent slew of negative news from Greece and China will impact the Indian equity market as investors will become more risk averse, said independent expert Ambareesh Baliga.
Asian markets pared early morning losses. Shanghai Composite index saw a sharp recovery, up over 7 percent now on the back of fresh regulatory support. Hang Seng gained more than 4 percent.
TCS lost 1.5 percent ahead of Q1 earnings today. A CNBC-TV18 poll sees a 4.2 percent uptick in revenue but higher wages and visa costs may weigh on profit.
Bhushan Steel is locked at 20 percent upper circuit after the company received lenders' approval for restructuring of loans.
11:50 am Earnings outlook: Ravi Menon, Analyst-IT services, Elara says he is little more negative on TCS as he expects visa costs and wage hike to impact margins for the quarter. He says an attrition number below 10000 is good and above 13000 is a worry. Menon prefers Infosys over TCS as he feels valuations are cheaper. He expects Infosys's dollar revenues to grow 3.2 percent and sees its growth and margins to converge with TCS's.
11:30 am Buzzing: Shares of Eros International Media surged 11 percent intraday on Thursday. Media reports suggest that Eros may be planning to hive off a partial stake or around 10 percent in Eros Now to ingapore-based Fullerton Fund Management. Eros Now is Eros International's streaming platform while Fullerton is a unit of Singapore state investor Temasek Holdings.
The media report adds that if the deal is sealed, valuation of Eros Now will be pegged at USD 800 million, which is much higher than the market values the business now.
"The Eros Now unit would remain unlisted within the parent company. Fullerton, which already owns about 10 percent of Eros International, wouldn't increase its investment in the parent company through the Eros Now investment," the report says.
The market continues its consolidation as corporate India kick starts first quarter earnings today. The Sensex is up 33.24 points at 27720.96 and the Nifty is up 7.20 points at 8370.25. About 1488 shares have advanced, 687 shares declined, and 117 shares are unchanged.
BHEL and Bharti are up 3 percent while L&T, Hero and Hindalco are top gainers in the Sensex. Among the losers are TCS, Bajaj Auto, Tata Motors, Infosys and Vedanta.
Oil prices rose in Asia but remain subdued by concerns about the impact on demand from the stock market rout in China and Greece's debt crisis. Chinese stocks have taken a severe beating after government measures failed to staunch the bloodletting that has wiped out around a third of China's main share market in under a month.
Shanghai stocks traded wildly this morning, as the government beefed up the measures to arrest the stock market slump in the world's top energy consumer.
10:58 am Market Update: The Sensex gained 39.30 points at 27727.02 and the Nifty rose 9 points to 8372.05. About 1478 shares have advanced, 675 shares declined, and 119 shares are unchanged on the BSE.
10:50 am Rupee Update: After falling for two straight days, the rupee strengthened by 7 paise to 63.53 against the dollar in today at the Interbank Foreign Exchange market on fresh selling of the American currency by exporters.
Besides, a higher opening in the domestic equity market and the dollar's weakness against other currencies overseas, supported the rupee, forex dealers said.
The rupee had depreciated by 14 paise to close at an over one-week low of 63.60 against the American currency in yesterday's trade on steady dollar demand from state-owned banks and importers.
10:40 am Interview: A BoA-ML recently reported that when there is a demand surge in quick service industry, it shows more people are eating pizzas. Ajay Kaul, CEO of Jubilant Foodworks says the case is not so on the ground.
"The numbers in the previous quarters may have looked better, but the industry is seeing an insignificant rise statistically. It is not only that people are getting bored of pizzas but all kind of foods eaten outside of one's home."
Speaking about poor growth in consumption demand, Kaul says big players are seeing competition from smaller regional players who have become active in the spae. He gives example of Ammi's Biryani and the likes that are trying to fit in this space. But numbers are not at all positive for all players put together, Kaul explains.
Talking of costs, he said food inflation is giving a bit of relief, but rest all ingeredients like labour costs are skyrocketting. The state governments raise minimum wage rates sudenly, sometimes even twice a year, and "you just have to oblige," Kaul rues.
Jubilant's growth stategy remains that of expansion. Kaul wants to open 150 new stores of Dominos and 70 Dunkin Donuts in this fiscal with a payback period of 2-3 years.
10:20 am China rebounds: Chinese stocks bounced, after the securities regulator banned shareholders with large stakes in listed firms from selling, in Beijing's most drastic step yet to stem the dramatic plunges that have roiled global financial markets.
As the daily drumbeat of official announcements aimed at propping up the sinking equity market continued, state news agency Xinhua said police would investigate "malicious" short selling of stocks, and the banking regulator said it would allow lenders to roll over loans backed by stocks.
The Shanghai Composite Index gained 1 percent. It had tumbled around 5.9 percent on Wednesday.
More than 30 percent has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China's market turmoil will destabilise the financial system is now a bigger risk than the crisis in Greece.
10:00 am Market Check: The market entered into a consolidation mode after pricing in China equity rout and Greece crisis. It is eagarly waiting April-June quarter earnings that will be kicked off by TCS today evening. The stock lost nearly 2 percent as a CNBC-TV18 poll sees 7.5 percent sequential fall in profit and more than 4 percent rise in dollar revenue. Its rival Infosys fell 1.5 percent.
The Sensex fell 32.07 points to 27655.65 and the Nifty declined 12.15 points to 8350.90. The market breadth remained strong as more than two shares advanced for every share declining on the Bombay Stock Exchange.
Tata Motors lost another 2 percent, in addition to 6 percent fall in previous session on fears of slowdown in China sales of its subsidiary Jaguar Land Rover. However, L&T, Bharti Airtel, Lupin, BHEL and Hero Motocorp gained 1-3 percent.
Manpasand Beverages disappointed investors, opening more than 6 percent lower. The stock listed at Rs 300 on the National Stock Exchange against issue price of Rs 320 apiece. It touched an intraday high of Rs Rs 318.45 and low of Rs 285.70. It lost as much as 10.7 percent intraday.
9:50 am Market outlook: The recent slew of negative news from Greece and China will impact the Indian equity market as investors will become more risk averse, says independent expert Ambareesh Baliga. In an interview, Baliga and Manoj Murlidharan of Religare Securities share their views on the market and stocks that could be invested into.
Baliga says investors should avoid public sector unit (PSU) companies but initiate coverage to metal stocks.
9:30 am Buzzing: Share of YES Bank rose 3 percent intraday, after the massive 8 percent fall yesterday on UBS downgrade. The stock is riding high on positive stance maintained by two brokerages. Both Bank of America Merill Lynch and Antique have reiterated buy rating on the stock citing attractive valuations.
With a target price of Rs 1100 per share, BoA ML says that 'what is on the books, in most instances it is very well collateralised and secured not only by cash flows, but also, shares, other assets, but also fixed deposits, which is not yet reported, as collateral cover'. According to brokerage,YES Bank has built a very strong contingent buffer to cushion any negative earnings impact which may come from sudden spikes in credit costs. It is optimistic that the private lender is well placed to capture faster growth in market share.
9:20 am Market check: The market recovers quickly after a slow start. The Sensex is up 101.27 points at 27788.99, and the Nifty up 35.15 points or 0.4 percent at 8398.20. About 815 shares have advanced, 198 shares declined, and 71 shares are unchanged.
Bharti Airtel, Sun Pharma, L&T, Coal India and Lupin are top gainers while Vedanta, Bajaj Auto, HDFC Bank, TCS and Tata Motors are down in the Sensex.
The market has opened flat on Thursday after massive sell-off in yesterday trade. The Sensex is up 5.30 points at 27693.02 and the Nifty is up 1.80 points at 8364.85. About 377 shares have advanced, 118 shares declined, and 66 shares are unchanged.
Hindalco, GAIL, Tata Steel, Infosys and Coal India are top gainers in the Sensex. Among the losers are Bajaj Auto, HDFC Bank, HUL and NTPC.
Asian shares reversed course and rose as a slide in battered Chinese stocks was stemmed, at least temporarily, while the safe-haven yen was nudged off highs scaled against the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan, often held hostage to volatile Chinese stocks, was down 0.9 percent early in the day, but then was up 0.8 percent. During Wednesday, it touched a 17-month low.
The country's stock markets have plunged roughly 30 percent over the last three weeks, with a series of increasingly aggressive attempts by authorities so far having failed to stem the massive exodus from a once-booming market.
The Indian rupee opened higher by 6 paise at 63.54 per dollar versus 63.60 Wednesday.
Mohan Shenoi of Kotak Mahindra Bank said, "Developments in China and Greece and its impact on commodities and stocks has resulted in risk-off scenario globally. In this turmoil USD-INR has remained resilient due to strong India macro and Reserve Bank of India (RBI) actions."
The yen rose to a seven-week high against the dollar as investors bought the Japanese currency for safety, spooked by plunging Chinese stocks and the still unresolved Greek debt crisis. The euro too rose to 1.10 versus the dollar.
US stocks closed lower by nearly 1.5 percent or more as continued concerns about Greece and the extended sell-off in the Chinese market weighed on investor sentiment. Stocks briefly trimmed losses as the New York Stock Exchange resumed floor trading after a near-4 hour halt. The Dow Jones industrial average and S&P 500 closed below their 200-day moving averages and are in negative territory for the year. The Nasdaq slipped 1.75 percent. The
Federal Open Market Committee (FOMC) minutes from the June meeting showed policymakers were concerned about the situation in Greece and China, with most judging that rate hike conditions were not yet achieved.
Nymex is below 52 dollars per barrel while Brent is trading above the 57 dollar mark. Gold prices trade around 1155 dollars an ounce.