Sensex, Nifty end lower; UltraTech up 4%, HUL & Infosys dip
20 July 2015
03:30 pm Market closing: Equity benchmarks fell on profit booking. The Sensex lost 43.19 points to 28420.12 and the Nifty dropped 6.40 points to 8603.45. About 1547 shares have advanced, 1277 shares declined, and 146 shares are unchanged on the BSE.
UltraTechCement rallied 4.04 percent after better than expected earnings in Q1. Asian Paints jumped 3.26 percent ahead of Q1 numbers on Tuesday. BPCL, Hindalco and Grasim rose 2-2.5 percent.
However, Tata Motors, SBI, Vedanta, BHEL, HUL, PNB, Bank of Baroda, ACC, Cairn India and Tata Power dropped 1-2 percent.
02:55 pm Market Update: Equity benchmarks recovered with the Nifty reclaiming 8600.
The Sensex fell 4.45 points to 28458.86 while the Nifty gained 5.65 points at 8615.50. About 1520 shares have advanced, 1235 shares declined, and 146 shares are unchanged on the BSE.
02:45 pm Greek market remains shut: Greeks queued outside banks on Monday as they reopened three weeks after closing to stop the system collapsing, the first cautious sign of a return to normal after a deal to start talks on a new package of bailout reforms.
However limits on withdrawals will remain and payments and wire transfers abroad will still not be possible - a situation which German Chancellor Angela Merkel said on Sunday was "not a normal life" and warranted swift negotiations on a new bailout, expected to be worth up to 86 billion euros.
The stock market will also remain closed until further notice. Increases in value added tax agreed under the bailout terms have also taken effect with VAT on food and public transport jumping to 23 percent from 13 percent.
02:25 pm Blackstone eyes UB tower: Private equity player Blackstone is eyeing a 50 percent stake in UB Tower in Bengaluru. The offer has been made for Rs 700-800 crore, reports CNBC-TV18's Kritika Saxena quoting sources.
UB Tower is owned by UB Group and consists of commercial spaces. The deal if it goes through is expected to be most high profile deal in the real estate space for the city because so far there haven't been any significant real estate deals, especially by private equity players.
Earlier Vijay Mallya had refused to sell any stake in the property although several PE players had made the offer.
Blackstone and Embassy Group had made offer of Rs 420-430 crore in 2012.
Blackstone values UB Tower at Rs 1400 crore, say sources.
02:00 pm Market Check
The market remained weak due to consistent selling pressure in FMCG, banking & financials and capital goods stocks. The Sensex went down 85.98 points to 28377.33 and the Nifty slipped 22.85 points to 8587.00.
About 1448 shares have advanced, 1226 shares declined, and 163 shares are unchanged on the Bombay Stock Exchange.
Infosys gained 0.5 percent ahead of Q1 earnings on Tuesday. Earnings are expected to be steady after reporting lower than expected numbers in March quarter. According to a CNBC-TV18 poll, profit after tax is expected to fall 2.5 percent sequentially to Rs 3,017 crore while dollar revenue may grow 3 percent to USD 2,224 million during April-June quarter compared to USD 2,159 million in March quarter.
UltraTech Cement rebounded with marginal gains after June quarter earnings.
01:30 pm SIAM on auto: President of Society of Indian Automobile Manufacturers (SIAM), Vikram Kirloskar is bullish on the automobile sector and said companies are working on improving efficiency, quality and maintaining global standards.
He expects sales of cars and commercial vehicle sales to be in single digits this year.
With stalled infrastructure projects moving, demand for heavy vehicles segment will also start improving, Kirloskar said, adding that medium and heavy vehicles capacity have not been fully utilised.
The sluggish trend in two wheeler sales--rural and urban--could persist for a while, he said.
Kirloskar said multiple new launches shows investors' faith in the auto industry. It not only stimulates the market, but benefits all players, he said.
The upcoming used car sales business and new launches will help in creating a dynamic market with multiple choices for consumers.
01:20 pm SpiceJet in News: Shares of Spicejet today surged over 5 percent amid reports that two Gulf airlines have approached the company for buying a stake in the domestic firm.
Following the buzz, the stock rose by 5.22 percent to Rs 23.15 on BSE.
According to media reports, two big Gulf airlines have approached Ajay Singh-promoted SpiceJet for buying a stake in the airline.
01:00 pm Market Check
The market remained in a negative terrain with the Nifty struggling below 8600, dragged banking & financials, FMCG and capital goods stocks. The broader markets continued to outperform benchmarks marginally and the market breadth remained in favour of advances with the ratio of 1339:1187.
The Sensex declined 132.07 points to 28331.24 and the Nifty fell 43.40 points to 8566.45.
ICICI Bank, HDFC, Axis Bank, State Bank of India, Tata Motors, HUL, BHEL, Coal India and Vedanta dropped 1-2 percent. However, Mahindra & Mahindra, Bharti Airtel, Dr Reddy's Labs and Hindalco Industries gained 1 percent each.
Oil prices edged lower today as data showed Saudi Arabian exports fell to the lowest in five months despite record output, while a resurgence in US drilling activity seen earlier this month seemed to fizzle out. Both international and US crude futures posted their third consecutive weekly losses last week on expectations of increased exports from Iran following a deal to ease sanctions against the OPEC producer. Brent September crude declined 0.16 percent to USD 57.01 a barrel.
12:55 pm Earnings Poll: Infosys's Q1 earnings, which will be announced on July 21, are expected to be steady after reporting lower than expected numbers in March quarter. The company has been reiterating that it will meet guidance and the street is also encouraged by MD & CEO Vishal Sikka's vision & roadmap for Infosys, but analysts said the execution is important.
According to a CNBC-TV18 poll, profit after tax is expected to fall 2.5 percent sequentially to Rs 3,017 crore while revenue is seen rising 5 percent to Rs 14,097 crore in the quarter ended June.
Dollar revenue may grow 3 percent to USD 2,224 million during April-June quarter compared to USD 2,159 million in March quarter. Constant currency revenue growth may be around 3.5 percent.
Analysts believe the topline may get benefitted from acquisitions. They see two months contribution from Panaya (acquired in February) and small contribution from Skava (acquired in June) to revenue.
12:25 pm Mohandas Pai in IT industry: Indian IT industry is the victim of its own success, says TV Mohandas Pai, Chairman of Manipal Global Education and former director on Infosys board.
Making an appearance on CNBC-TV18 special edition from Begaluru, Pai said the world has changed as it has got a very stable IT platform. IT companies could grow at low teens in the near term because of large base.
With enterprises facing a challemge of digital economy, which is releasing large number of start-ups funded by venture capitalists, over a period of time, the larger part of the work they do will become much more digital, Pai said adding "these will morph into large enterprises providing services to the digital giants."
With India becoming the world's fastest growing start-up ecosystem, Pai says Bengaluru is a hotbed of such enterprises. Of the 4000 start-ups that come up in India every year, nearly half can be traced back to Bengaluru. "In Bangalore, I see three or four start-ups a day. I am seeing it for the last few years," he says. He aims to see 100,000 start-ups in India over the next 10 years, valued at USD 500 billion and employiing three million people.
12:00 pm Market Check
The profit booking in banking & financials, FMCG and capital goods continued in noon trade. The 30-share BSE Sensex declined 109.91 points to 28353.40 and the 50-share NSE Nifty fell 40.05 points to 8569.80. The broader markets outperformed marginally.
Advancing share outnumbered declining ones by a ratio of 1312 to 1118 on the Bombay Stock Exchange.
Punjab National Bank, Bank of Baroda, ICICI Bank, HDFC Bank, State Bank of India and HDFC dragged the indices lower, down 1-3 percent. Bank Nifty lost almost a percent.
ACC shed more than 2 percent after reporting weak set of earnings. CLSA cuts CY15-17 estimates by 10-16 percent. UltraTech Cement, too, lost nearly 3 percent ahead of its earnings today.
IT major, Infosys is expected to report a steady set of earnings for the first quarter on Tuesday. A CNBC-TV18 poll sees dollar revenue growth 3 percent and FY16 guidance is likely to be maintained.
NR Narayana Murthy, the founder of Infosys, said Digital India will become important for job creation, adding that it will succeed if government were to accept international standards of contracts.
11:20 am Gold prices in India: Gold prices fell below Rs 25,000 per 10 grams today by tumbling Rs 524 in futures trade after the precious metal sank to over five-year lows in global market.
At the MCX, the gold contract for delivery in August crashed by Rs 524, or 2.06 percent, to Rs 24,974 per 10 grams in a business volume of 597 lots at the Multi Commodity Exchange.
Also, the metal for delivery in far-month October was trading Rs 519, or 2.02 percent, down at Rs 25,200 per ten grams in 30 lots.
Analysts said a weak trend in the overseas markets where gold slumped to the lowest in more than five years amid prospects for higher US rates dragged gold futures below Rs 25,000 level here.
Globally, gold was trading lower at USD 1,086.18 an ounce in Singapore today, the lowest since March 2010. Prices sank 2.5 per cent last week, the most since March.
11:00 am Market Check: The market continued to see profit booking after three-day of gains. The Sensex dropped 59.24 points to 28404.07 and the Nifty declined 27.15 points to 8582.70.
However, the broader markets outperformed benchmarks, rising 0.3 percent. The market breadth remained positive as about 1292 shares have advanced against 897 shares declined on the Bombay Stock Exchange.
Gold slumped to five-year lows as a lack of global inflation left little to hedge against. Gitanjali Gems, TBZ, Shree Ganesh Jewellery, Renaissance Jewellery, PC Jeweller and Rajesh Exports rallied 2-15 percent.
Orient Green Power spiked 5 percent as the company is looking to divest not less than 26 percent in subsidiary Green Power Private Limited while Dishman Pharma plunged more than 6 percent as the company deferred releasing its Q1 earnings on difference with auditors.
Tata Teleservices (Maharashtra) rallied 20 percent as media report said Tata Group has offered to buy out NTT Docomo's 26.5 percent stake at Rs 23.3 apiece in company. This is at 60 percent discount to pre-agreed valuation of Rs 58/share. Tata Teleservices or TTSL is the unlisted parent company of TTML.
CESC gained more than 4 percent as media report suggested that fuel supply agreement for company's Chandrapur plant has been restored by the ministry of coal, though a formal order on the same is yet to be received.
10:45 am CLSA on Tata Motors: CLSA has maintained its buy rating on Tata Motors, the country's largest commercial vehicle maker and the owner of luxury car maker Jaguar Land Rover (JLR).
The brokerage believes the stock is pricing in a 10 percent compound annual rate of decline for JLR's China volume over FY15-17 and margins there contracting to 390 basis points below those in other regions, as well as zero value for the India business.
It sees this scenario as extremely pessimistic and unlikely, especially since JLR has strong buffers for superior volume/pricing resilience in China.
China contributes 20 percent to total revenue of JLR. In last few months, JLR's China monthly sales growth has been falling due to lower demand and fears of slowdown in luxury car market.
CLSA expects the share price to improve once volume and quarterly net-profit growth recover in 2H16 (October 2015-March 2016).
It sees strong returns in stock even if it assumes conservative China scenarios.
10:15 am Oil Update: Oil prices edged lower as data showed Saudi Arabian exports fell to the lowest in five months despite record output, while a resurgence in US drilling activity seen earlier this month seemed to fizzle out.
Both international and US crude futures posted their third consecutive weekly losses last week on expectations of increased exports from Iran following a deal to ease sanctions against the OPEC producer.
Saudi Arabia's crude oil exports fell in May to their lowest since December, with official data showing daily shipments stood at 6.935 million barrels a day (bpd) compared to 7.737 million bpd in April.
10:00 am Market Check
The market remained marginally under pressure, dragged by banking & financials. The Sensex declined 46.91 points to 28416.40 and the Nifty fell 21.10 points to 8588.75.
However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.2 percent. About 1141 shares have advanced, 718 shares declined, and 97 shares are unchanged on the Bombay Stock Exchange.
Infosys, HDFC, ITC, Axis Bank, Tata Motors, SBI, BHEL and ICICI Bank dropped 0.2-1 percent.
ACC fell 2 percent, reacting negatively to its quarterly numbers released on Friday evening with EBIDTA per tonne down 28 percent Y-o-Y and 36 percent Q-o-Q. CLSA has cut CY15-17 estimates by 10-16 percent but continue to believe that the worst is over for the sector. UltraTech Cement also declined nearly 2 percent ahead of earnings today.
Federal Bank crashed 7 percent as the bank reported a 35 percent fall in profits Y-o-Y with provisions up over 5 times Y-o-Y. Gross non-performing assets worsened 55 basis points Q-o-Q primarily due to one account of over Rs 100 crore from the steel sector slipping.
Karnataka Bank also lost nearly 6 percent as profit in Q1 fell by 10 percent. Oberoi Realty and CRISIL gained 1.5 percent each while CARE Ratings fell 3 percent post earnings.
09:45 am Earnings Poll: UltraTech Cement's standalone profit after tax is expected to fall 12 percent year-on-year to Rs 549 crore in the quarter ended June, according to a CNBC-TV18 poll. Higher interest and depreciation cost associated with acquisition of Jaiprakash Associates' Gujarat plants may impact the bottomline. The company will announce its earnings on July 20.
Total income from operations is seen rising 7 percent to Rs 6,088 crore in the first quarter of financial year 2015-16 from Rs 5,692 crore in the year-ago period led by capacity growth.
Total volumes are expected to inch up nearly 3 percent to 12.3 million tonnes, supported by new capacity addition and acquired assets.
Operating profit may increase by 1 percent year-on-year to Rs 1,062 crore but margin may decline 110 basis points to 17.4 percent in the quarter gone by. Analysts feel weak pricing environment and lower international coal prices (against higher railway freight costs) may impact operating profit margin.
09:35 am FII View: Anand Kumar of Bank of America Merrill Lynch said benign crude prices would be a positive for India. He thinks a further decline could lead to a small rally in the Indian equity markets despite the near-term concerns of earnings and valuations.
Lower crude prices on the back of this higher supply should help Indian economy as it helps in managing the twin deficit as well as inflation and strengthens the case for rate cuts, he believes.
According to him, key beneficiaries of lower crude prices will be HPCL, Asian Paints, Jubilant, SBI, ICICI Bank, Adani Ports.
09:15 am Market Check
The market has opened marginally higher in early trade Monday led by private banks, auto and pharma stocks. However, it immediately erased gains to trade with losses. The Sensex declined 83.37 points to 28379.94 and the Nifty fell 34.40 points to 8575.45.
About 495 shares have advanced, 159 shares declined, and 75 shares are unchanged on the BSE.
Cipla, Hero Motocorp, Bajaj Auto, HDFC Bank, BPCL, NMDC and Idea Cellular gained 0.5-1 percent while ACC, UltraTechCement, Tata Power, Ambuja Cements and HDFC lost 1-3 percent.
Analysts suggest that in the near term, equities will take cues from the ongoing earnings season as well as the monsoon Parliament, which opens tomorrow.
The Indian rupee has opened with a marginal loss of 8 paise at 63.55 per dollar today against Friday's closing value of 63.47 a dollar.
Agam Gupta of Standard Chartered said, "We expect local government banks to provide a floor to the pair as they buy dollars around 63.45 levels."
"We expect the USD-INR pair to trade in the range of 63.40-63.60/dollar for the day," he added.
Asian markets are moving broadly higher, though Japan and Indonesia are closed for public holidays.
Dollar hit a three-month high against a basket of major currencies after solid US inflation and housing data supported expectations for the Federal Reserve to raise interest rates in coming months.