Profit booking drags Sensex, Nifty; Tata Motors, banks weak

It was a day of consolidation on Dalal Street with the benchmark indices closing in red Tuesday after rising more than a percent in previous session on Greece bailout package. Banking & financials, metals and select oil stocks pulled the market down whereas healthcare stocks supported.

The 30-share BSE Sensex declined 28.29 points to 27932.90 and the 50-share NSE Nifty slipped 5.55 points to 8454.10. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising marginally. About 1560 shares advanced against 1281 shares declined on the Bombay Stock Exchange.

Experts feel the market may continue to be rangebound in near term. According to them, the broader range for the market would be 7800-8800. It needs strong reasons like good earnings, further rate cut, any positive global news etc to move up further, said analysts.

Brokerage Credit Suisse downgraded India from 1 percent overweight to 1 percent underweight. Brokerage's Asia-Pacific strategy head, Sakthi Siva citied high valuations behind the downgrade call. "Tata Motors has been dropped from the Credit Suisse regional portfolio while the top picks include Axis Bank and HCL Technologies," she said.

Meanwhile, in macro data, WPI inflation for June came in at negative 2.4 percent against negative 2.36 percent in May. The contraction, which has been for the seventh consecutive month, was led by lower steel and metal prices while vegetable and pulses prices saw a spike.

03:30 pm Market close: It was a day of consolidation on Dalal Street with benchmark indices ending flat. The Sensex was down 28.29 points at 27932.90, and the Nifty slipped 5.55 points at 8454.10. About 1547 shares advanced, 1295 shares declined, and 150 shares were unchanged.

Tata Motors fell over 4 percent while Hindalco, SBI, Vedanta and Reliance were among laggards. Coal India, HUL, Hero MotoCorp, Infosys and Lupin were other gainers.

02:59 pm Market Update:  The Sensex dropped 5.11 points to 27956.08 and the Nifty rose 1.25 points to 8460.90. About 1535 shares have advanced, 1219 shares declined, and 163 shares are unchanged on the BSE.

02:50 pm Tata Motors under pressure: Tata Motors plunged more than 5 percent today and more than 20 percent year-to-date after its subsidiary and luxury car maker Jaguar Land Rover reduced its China sales target to stabilise price.

Worries of a slowdown in China's luxury car market hurting Jaguar Land Rover sales, weighing on Tata Motors' stock, say analysts.

After witnessing a strong growth of 47 percent CAGR over FY10-15, JLR has been reporting weak headline retail sales in China since January 2015, says Ambit Capital.

Brokerage Credit Suisse removed Tata Motors from its Asian portfolio.

02:45 pm Hindustan Media on buyers' radar: Hindustan Media Ventures reported a 23.11 percent increase in its standalone net profit at Rs 41.71 crore for the first quarter of 2015-16.

The company had posted a standalone net profit of Rs 33.88 crore in the same quarter of 2014-15, Hindustan Media Ventures Ltd (HMVL) said in a filing to the BSE.

Net sales during the quarter increased by 6.93 percent to Rs 221.51 crore from Rs 207.14 crore in the year-ago period.

During the three months ended June 30, total expenses stood at Rs 174.72 crore compared with Rs 173.32 crore a year earlier, it added. HMVL is in the business of printing and publication of newspapers and periodicals including Hindi daily Hindustan.

02:25 pm Marc Faber on China: Famously bearish investor Marc Faber says he wouldn't touch Chinese stocks even after their precipitous decline, instead pushing the investment case for Vietnam equities, Hong Kong-listed Macau gaming stocks and gold mining shares.

"I am a buyer when markets are undervalued and attractive and then I get out relatively early. So we were buyers a year ago in June/July of 2014," Faber, the author of the "Gloom, Boom and Doom Report", said, referring to Chinese equities. "Now, I don't think that Chinese stocks are attractive and I would just stand aside."

Chinese equities have taken a severe beating in the recent weeks as panic selling gripped the market, but stability appears to have returned after a series of series of government measures to shore up investor confidence. The benchmark Shanghai Composite is down 24 percent from its June 12 peak, but up 21 percent on a year-to-date basis.

Faber contends that growth in world's second largest economy has "slowed down to trickle", adding that 6-7 percent growth is a "pipe dream."

China, which has set its own growth target at about 7 percent for 2015, is due to publish its latest gross domestic product (GDP) report on Wednesday . The release is expected to show growth dipped below 7 percent in the second quarter, following 7 percent expansion in the first quarter of 2015 - the weakest showing since the global financial crisis.

02:00 pm Market Check
The market remained lacklustre in afternoon trade. The Sensex rose 38.80 points to 27999.99 and the Nifty gained 13.15 points at 8472.80. The broader markets continued to outperform with the BSE Midcap and Smallcap indices rising 0.5-0.8 percent.

About 1577 shares have advanced, 1093 shares declined, and 154 shares are unchanged on the Bombay Stock Exchange.

Iran & six major countries reached a historic nuclear deal, which will grant Iran sanctions relief in exchange for curbs on its nuclear program. Crude slid 2 percent on fears of more Iranian oil hitting the market.

In macro data today, WPI for June came in at minus 2.4 percent. The contraction was led by lower steel and metal prices while vegetable and pulses prices saw a spike.

In important news outside the market, a Supreme Court appointed panel suspended former champions Chennai Super Kings and Rajasthan Royals from the Indian Premier League for two years as it presented its verdict on the IPL spot fixing and betting scandal. Analysts see no impact on India Cements that lost 3.6 percent.

Tata Motors extended fall, losing nearly 3 percent followed by SBI, Hindalco and Vedanta with 1-1.7 percent loss. However, Infosys, HUL, Lupin, Coal India, Cipla, Hero Motocorp and BHEL gained 1-2 percent.

1:50 pm Result: NIIT Technologies has turned profitable during the quarter ended June 2015. The software services provider has reported a profit after tax of Rs 58.5 crore in first quarter as against loss of Rs 17.5 crore in March quarter. Adjusted profit after tax stood at Rs 58.5 crore during the quarter compared to Rs 62.5 crore in previous quarter.

In Q4FY15, it had an exceptional item of Rs 80 crore due to the dispute between one of the company's subsidiaries and its client in the APAC region. Later on the dispute was resolved by concluding a settlement agreement.

1:30 pm IPL betting verdict: Former Chennai Super Kings team official Meiyappan and co-owner of Rajasthan Royals Kundra were found guilty of betting and bringing the game into disrepute by the Supreme Court-appointed Justice RM Lodha Committee.

Both Meiyappan and Kundra have been banned for life for taking part in any cricket-related activities in future. The high-level committee also suspended CSK and RR from taking part in IPL for 2 years. The panel said that further investigations were needed to probe the role of IPL COO Sundar Raman.

The apex-appointed committee headed by former Chief Justice of India RM Lodha pronounced the quantum of punishment against Meiyappan for betting during season six of the Indian Premier League.

The market is sluggish with the Nifty hovering around 8450. The Nifty is down 13.25 points at 8446.40. The Sensex is down 43.47 points at 27917.72. About 1481 shares have advanced, 1101 shares declined, and 146 shares are unchanged.

India Cements fell 5 percent after the IPL verdict. The company had demerged CSK team, to  another wholly owned subsidiary of India Cements. Tata Motors, Hindalco, SBI, ITC and Vedanta are top losers in the Sensex. Among the gainers are Coal India, Hero, Cipla, Lupin and BHEL.

Oil prices tumbled further in Asia on signs of an imminent deal between Iran and Western powers that would allow Iranian crude to flow back into the already saturated global market.A strong US currency has also made the dollar-priced commodity more expensive, denting demand, analysts said.

12:58 pm Earnings: NIIT Technologies has turned profitable during the quarter ended June 2015. The software services provider has reported a profit after tax of Rs 58.5 crore in first quarter as against loss of Rs 17.5 crore in March quarter.

Adjusted profit after tax stood at Rs 58.5 crore during the quarter compared to Rs 62.5 crore in previous quarter.

Revenue during the same period grew by 4.9 percent sequentially to Rs 641.1 crore.

''The quarter witnessed robust 8.9 percent sequential growth in international geographies which helped maintain operating margins at 16.3 percent despite wage hikes'' said Arvind Thakur, CEO and Joint MD, NIIT Technologies.

Operating profit increased to Rs 104.2 crore in the quarter ended June 2015 from Rs 99.7 crore in March quarter and margin remained unchanged at 16.3 percent.

Order intake during the quarter was USD 97 million resulting in USD 300 million of order book executable over the next 12 months. order intake during March quarter was USD 89 million.

12:40 pm Buzzing: Shares of Thomas Cook gained 3 percent intraday on getting approval from the Bombay High Court for merger of Sterling Holiday Resorts with itself.

The shareholer approval had earlier been obtained by way of a postal ballot and a court convened meeting.

"The High Court of Bombay has sanctioned the composite scheme of arrangement and amalgamation between Sterling Holiday Resorts India, Thomas Cook Insurance Services India and Thomas Cook India and their respective shareholders and creditors under the court process," said the company in its filing.

Once the High Court order is filed with and approved by the relevant authorities, Thomas Cook will initiate the process for issue of shares to shareholders of Sterling Holiday Resorts India, it added.

"With a clear roadmap, Sterling has taken strong, confident strides this year with upgrades of 6 existing resorts and opening of 4 new resorts (at Corbett, Daman, Shirdi and Dindi), to bring its network to a total of 24 resorts across India," said Madhavan Menon, managing director, Thomas Cook.

12:15 pm Oil Update: Oil prices tumbled further in Asia today on signs of an imminent deal between Iran and Western powers that would allow Iranian crude to flow back into the already saturated global market.

A strong US currency has also made the dollar-priced commodity more expensive, denting demand, analysts said.

US benchmark West Texas Intermediate for August delivery fell 75 cents to USD 51.45 and Brent crude for August eased 60 cents to USD 57.25 in afternoon Asian trade.

Foreign ministers of the six powers were to hold what is expected to be the final meeting this morning ahead of a planned announcement that would bring to a close an 18-day push to strike an accord.

The agreement seeks to curb what the West suspects are Iranian attempts to build a nuclear bomb and lead to a lifting of punishing economic sanctions, which have choked Tehran's oil exports.

Analysts say that a return of Iranian crude to the market will worsen the current oversupply and further depress prices.

12:00 pm Market Check
The market remained marginally lower in noon trade with the Sensex falling 47.95 points to 27913.24 and the Nifty declining 15.20 points to 8444.45. About 1394 shares have advanced, 1040 shares declined, and 141 shares are unchanged on the BSE.

June WPI inflation has been negative for the seventh consecutive month, coming in at negative 2.4 percent in June against negative 2.36 percent in May. April WPI inflation is revised to (2.43 percent) from (2.65 percent) earlier.

Food articles inflation slipped to 2.88 percent from 3.8 percent and manufactured products inflation came in at negative 0.77 percent against negative 0.64 percent during the same period.

11:50 am Breaking: Iran, India nuclear deal: Iran and six major powers have reached a historic nuclear deal, which will grant Tehran sanctions relief in exchange for curbs on its nuclear programme, an Iranian diplomat said on Tuesday.

"All the hard work has paid off and we sealed a deal. God bless our people," the diplomat told agency on condition of anonymity. Another Iranian official confirmed the agreement.

11:30 am FII view: While she is bullish on the Indian equity market, Noriko Kuroki of JP Morgan Asset Management says corporate valuations need to be disciplined. In an interview to CNBC-TV18, Kuroki says India is a prime growth market in emerging markets and seems to be far well-prepared for the US Federal Reserve's rate normalisation. Kuroki is betting big on China-H shares and technology companies in Taiwan, but also expects the prolonged dismal earnings season in India to revive in H2FY16.

The market is still in red. The Sensex is down 82.84 points at 27878.35 and the Nifty is down 24.65 points at 8435.00. About 1378 shares have advanced, 889 shares declined, and 126 shares are unchanged.

Tata Motors, Hindalco, HDFC, SBI and Vedanta are top losers in the Sensex. Coal India, Lupin, BHEL, Dr Reddy's Labs and Hero MotoCorp are top gainers in the Sensex.

Barclays is not concerned about the pick-up in food inflation seen in June retail inflation figures since the broader picture is much more promosing. Rahul Bajoria of Barclays says the decline in crude prices is the biggest postive right now. "If the trend continues, government will find sufficient scope to spend money on subdued sectors like infra. So from a five-year perspective, infra story is quite compelling, he insists.

Total amount of incremental investment in infra should be around 8.5 percent of GDP.

At 10:58 am Market Update: The Sensex declined 20.01 points to 27941.18 and the Nifty dropped 8.55 points to 8451.10. About 1437 shares have advanced, 799 shares declined, and 117 shares are unchanged on the BSE.

Sakhti Siva of Credit Suisse says the brokerage is now trimming from 1 percent overweight to a modest 1 percent underweight. "We emphasise that this is more of a tactical call based on valuations and we still believe India's return on equity is likely to rise in 2016," she reasoned.

Credit Suisse downgraded four mid-cap Indian stocks on valuations while their top picks from the CS regional portfolio are Axis Bank and HCL Technologies.

10:45 am June inflation forecast: The wholesale price index (WPI) inflation for June is expected to be a negative number for the seventh month in a row. The macro figure, that will be announced today, is expected to come in between - 2.3 and -2.5 percent.

Food inflation is expected to be an improved figure this month but food makes for only about 17 percent of the WPI basket. About 63 percent of the basket is formed by the manufacturing sector, which is expected to be a very dismal number. Hence, core WPI is likely to contract.

However, much depends on when the data is taken. If it was taken on the last day of June, ie June 30, then there was a significant crash in steel prices that fell from USD 360 to USD 340. The rupee, meanwhile, was fairly stable.

Hence, a worse WPI reading can be expected if the month-end numbers were taken. But the range is likely to be between - 2.3 and - 2.5.

10:25 am Buzzing: IT software company Ramco System rose nearly 13 percent intraday on signing multi-million dollar tech transformation deal with Cobham Aviation Services.

The company announced the signing of a multi-year global mandate with Cobham Aviation Services, aviation solution specialist to defence, government and commercial customers, to implement a company-wide engineering transformation programme.
 
With the addition of Cobham Aviation Services, the total number of aircraft served by Ramco will be over 3000 worldwide.
 
Virender Aggarwal, CEO- Ramco Systems said, "This is a strategic break-through for us which will give a boost to our focus for specialist aviation service establishments, many of which grapple with legacy applications and can benefit from postmodern systems."
 
Earlier in this month, the company has bagged an order from Australian coffer manufacturer and supplier, FreshFood.

10:00 am Market Check
The market continued to consolidate with the Nifty hovering around 8450 level. Capital goods, select auto and pharma stocks gained while oil, FMCG and select banking & financials stocks lost ground.

The 30-share BSE Sensex fell 12.93 points to 27948.26 and the 50-share NSE Nifty declined 5.10 points to 8454.55. However, the broader markets outperformed benchmarks. The BSE Midcap and Smallcap indices gained more than half a percent.

About two shares have advanced for every share declining on the Bombay Stock Exchange.

Dr Reddy's Labs rallied 1.5 percent as the company launched its Memantine hydrochloride tablets (a generic version of Namenda) in the US while Sun Pharma slipped half a percent as sources told CNBC-TV18 that USFDA has audited company's API facility in Ahmednagar, Maharashtra.

9:45 am Buzzing: Investors are buying shares of IIFL Holdings (formerly India Infoline) on Tuesday after Fairfax India has decided to buy 26 percent equity stake in the company via open offer. The stock shot up 20 percent intraday.

"FIH Mauritius Investments with HWIC Asia Fund (class A shares), I Investments Limited and FIH Private Investments make an open offer to the shareholders of IIFL to acquire up to 8,31,28,852 fully paid up equity shares of face value of Rs 2 each of the company constituting 26 percent of the post-offer equity share capital," said IIFL in its filing to the exchange.

9:30 am Poll: DCB Bank 's net profit is likely to see a marginal growth of 4 percent at Rs 46.40 crore in April-June quarter from Rs 44.60 crore in corresponding quarter last fiscal. The bank will announce its Q1 results on July 14. According to a CNBC-TV18 poll, its net interest income (NII) may rise 6 percent to Rs 147.4 crore versus Rs 139 crore in year-ago period. In Q4FY15 profit was up 61 percent year-on-year mainly due to tax writeback of Rs 9.3 crore. NII growth, analysts say, may come off on an annual basis mainly due to high base which contained one off income. In Q1FY15, there was one off interest income of Rs 30.4 crore resulting in NII rising 67 percent (YoY) to Rs 139 crore.

The market has opened on a flat note. The Sensex is up 26.32 points at 27987.51, and the Nifty is up 10.95 points at 8470.60. About 457 shares have advanced, 107 shares declined, and 68 shares are unchanged.

Dr Reddy's Labs, L&T, Vedanta, Cipla and ICICI Bank are top gainers. HDFC Bank, BHEL, ONGC, Wipro and Lupin are among losers. In the midcap space, IIFL is up 18 percent as Fairfax India will acquire 26 percent for Rs1,621 crore.

The Indian rupee opened with a gap down of 7 paise at 63.57 per dollar against previous close of 63.50.

Ashutosh Raina of HDFC Bank said, "The positive developments around Greece have resulted in the dollar gaining against most of the major currencies and increasing the prospects of a US Fed rate hike this year."

Asian shares were mixed following long-awaited deals in Greece and Iran, while attention also fell on China's recent stock rebound.

US stocks closed more than 1 percent higher in light volume trade, following gains overseas on news of a bailout agreement between Greece and its creditors.

Both the Dow and Nasdaq closed above their 50-day moving averages for the first time since June.

European equities ended sharply higher on Monday after European negotiators reached a deal over a third bailout for Greece. News of the deal raised hopes that a so-called Grexit or Greece leaving the euro zone - is off the table, but will need to be approved by the Greek parliament.

The dollar rallies against the euro after a debt deal between Greece and its international lenders renewed focus on the possibility that the US Fed may hike interest rates in September.

The dollar index inched towards the 97-mark. Crude prices continue to decline after reports indicated that an Iran nuclear agreement has finally been reached.

The draft deal allows the United Nations access to all suspect Iranian sites, including military ones.  Gold prices decline as dollar rises.