Nifty ends below 8600, Sensex consolidates; ITC slips 2%

The bulls maintained momentum on Dalal Street. After a sluggish day, the market geared up to rally at end.  However, Nifty's attempts to scale 8600 was not successful even though banks supported. Over all, it was a day of consolidation.

The Sensex was up 75.05 points or 0.3 percent at 28298.13 and the Nifty ended up 20.70 points or 0.2 percent at 8588.65. About 1392 shares have advanced, 1537 shares declined, and 143 shares were unchanged.

Midcaps cooled off after recent surge. The recent rally in midcap shares is just beginning of a sustained uptrend, and not a bubble waiting to burst, says Ratnesh Kumar, independent market expert. Fundamentally, midcaps are more leveraged to the recovery in the economy, says Kumar. He says traditionally, domestic investors have had more conviction about investing in midcap shares.

Adrian Mowat, Managing Director & Chief Strategist for Asian and Emerging Market Equity, JP Morgan, however, remains cautious of dramatic rise in midcaps and believes if the RBI keeps rates unchanges even in the second half of this year, market may react negatively. He advises investors to remain with largecap stocks.

Meanwhile, retirement fund body EPFO has kickstarted the process of investing in the stock market on Thursday with an initial corpus of around Rs 5,000 crore through ETFs in the current fiscal. The Ministry had notified new investment pattern for Employees' Provident Fund Organsiation (EPFO) in April allowing the body to invest minimum of 5 percent and up to 15 percent of its funds in equity or equity related schemes.

Buzzing stocks
L&T, Dr Reddy's Labs, Lupin, Tata Motors and SBI were leaders while ITC, Coal India, Vedanta, Reliance and Wipro were losers in the Sensex.

3:30 pm Market close: After a sluggish day, the market made some gains in the last hour of trade. The Sensex ended up 75.05 points or 0.3 percent at 28298.13 and the Nifty was up 20.70 points or 0.2 percent at 8588.65. About 1402 shares have advanced, 1525 shares declined, and 145 shares were unchanged.

L&T, Dr Reddy's Labs, Lupin, Tata Motors and SBI were leaders while ITC, Coal India, Vedanta, Reliance and Wipro were losers in the Sensex.

02:55 pm Coal India in focus: In a bid to ramp up coal evacuation capacity, state-owned Coal India is planning to procure wagons with an estimated investment of Rs 555 in the first phase.

"In order to facilitate coal evacuation and add to its evacuation capacity, keeping in view of the envisaged quantum jump in production, Coal India has planned to procure high-capacity wagons with an estimated investment of Rs 555 crore in the first phase," Minister of State for Coal and Power Piyush Goyal said in a written reply to Lok Sabha.

The minister further said that the fleet of wagons are for operation of railways and dedicated only for transport of coal from the specified coal subsidiaries and on specific routes.

02:40 pm Polaris falls post earnings: Polaris Consulting Services' first quarter consolidated profit grew by 2.7 percent sequentially to Rs 38.1 crore, driven by strong operational performance.

Revenue increased by 6.2 percent to Rs 496 crore and dollar revenue rose by 0.5 percent to USD 76 million compared to March quarter.

''With Q1 revenue and profit growth, we are on track in terms of growth path, " said NM Vaidyanathan, chief financial officer, Polaris. The company has initiated cost optimisation efforts, the benefits of which will be fully realised in Q4 of FY16, he added.

Consolidated operating profit (earnings before interest, tax, depreciation and amortisation) in Q1 jumped 27 percent to Rs 64 crore and margin expanded by 200 basis points to 12.9 percent on sequential basis.

It added 4 new clients in Q1FY16, reflecting client confidence in digital offerings, said Polaris which is looking at growth led by digital transformation capabilities in FY16.

02:20 pm FII View: Emerging markets as a whole is facing some challenges, but India most definitely is outperforming during tougher times, says Arnab Das, managing director, macro-strategy, Trusted Sources. India will also benefit from falling commodity prices, he says, while adding that the country is a lower beta market as compared to the world.

But for India to continue to outperform, the government needs to find a way to break the policy logjam. He says GST will be a game changer for the Indian market.

He also adds that the country is in a much better position to tackle US Federal Reserve rate hike.

02:00 pm Market Check
The market gained strength in afternoon trade after a consolidation. The Sensex rallied 113.84 points to 28336.92 and the Nifty hit 8600 level, up 33.25 points to 8601.20 supported by banking & financials, capital goods and healthcare stocks.

Shares of L&T, Tata Motors, SBI, Lupin, Dr Reddy's Labs, M&M and BHEL gained 1.5-2 percent followed by HDFC Bank, TCS and HDFC with 0.5-1 percent upside.

However, ITC and Coal India topped the selling list on Sensex, down 1.5 percent each followed by Reliance Industries, Wipro, Infosys, Wipro and Maruti with marginal losses.

1:50 pm Midcap talk: The recent rally in midcap shares is just the beginning of a sustained uptrend, and not a bubble waiting to burst, says Ratnesh Kumar, independent market expert. Year-on-year, the CNX Midcap has risen 79 percent compared to a 38 percent rise in the Nifty index during the same period. In an interview to CNBC-TV18, Kumar says both fundamental and technical factors are in favour of midcaps outperforming. "To my mind, this is just the beginning, and there will be more opportunities to pick from; I don't see it as a bubble waiting to burst," he says.

1:30 pm Buzzing: Shares of Nestle India tumbled nearly 6 percent after food safety watchdog FSSAI said it has not given any clean chit to the company's banned Maggi noodles as it rubbished all-clear reports from two of its empaneled labs, citing lapses in tests.

The stock reacted, plunging 5.42 percent to Rs 6,461.15 on BSE. On NSE, it slumped 5.67 percent to Rs 6,450.

The stock had rallied 8 percent yesterday following reports that the FSSAI-approved laboratory of Central Food Technological Research Institute (CFTRI) found Maggi noodles in compliance with the country's food safety standards.

The market has been sluggish with no major trigger seen today.  The Sensex is up 9.61 points at 28232.69, and the Nifty is up 2.90 points at 8570.85. About 1290 shares have advanced, 1400 shares declined, and 150 shares are unchanged.

Dr Reddy's Labs, Lupin, L&T, Hindalco and TCS are top  gainers while ITC, Coal India, ICICI Bank, GAIL and Reliance. Bharti Airtel is in focus as the telecom operator has commercially launched its 4G services pan India. It has an exclusive alliance with Samsung to roll out 4G.

Meanwhile, Arnab Das, managing director, macro-strategy, Trusted Sources says emerging markets as a whole is facing some challenges, but India most definitely is outperforming during tougher times . India will also benefit from falling commodity prices, he says, while adding that the country is a lower beta market as compared to the world.

12:40 pm Motherson Sumi loses ground: Auto ancillary company Motherson Sumi Systems has registered a whopping 62.5 percent growth in net profit at Rs 266 crore compared to Rs 163.7 crore in same quarter last fiscal. However, the stock lost nearly 5 percent as it missed analysts' expectations on every count.

According to average of estimates of analysts polled by CNBC-TV18, profit was expected at Rs 306 crore (up 87 percent) on revenue of Rs 9,534 crore (up 13.6 percent) for the quarter.

Revenue increased by 11.8 percent to Rs 9,384.8 crore in June quarter compared to Rs 8,391.5 crore in the year-ago period.

Operating profit (earnings before interest, tax, depreciation and amortisation) climbed 14.6 percent year-on-year to Rs 833 crore with margin expansion of 24 basis points at 8.9 percent. Analysts had estimated operating profit of Rs 900 crore and margin at 9.4 percent.

12:20 pm Bajaj Electricals on fire: Bajaj Electricals surpassed analysts' expectations Thursday with first quarter net profit at Rs 20.3 crore, up 3.6 times over Rs 5.6 crore in the year-ago period, driven by strong operational performance. The stock price rallied 7 percent intraday post earnings.

Net profit was estimated at Rs 16.5 crore on revenue of Rs 977 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Revenue grew by 13.7 percent Rs 1,009 crore compared to Rs 887.6 crore in the corresponding quarter of last fiscal.

Operating profit (earnings before interest, tax, depreciation and amortisation) shot up 63.6 percent year-on-year to Rs 60 crore and margin expanded by 190 basis points to 6 percent in the quarter gone by. Analysts had expected operating profit of Rs 53.8 crore and margin at 5.5 percent for the quarter.

12:00 pm Market Check
The market fell marginally amid consolidation in noon trade. The 50-share NSE Nifty held 8550 level led by support from pharma and cement stocks, down 12.75 points to 8555.

The 30-share BSE Sensex declined 46.36 points to 28176.72, dragged by banking & financials and FMCG stocks. The broader markets, too, remained under pressure with modest losses.

Global investors remained bullish on India story. Adrian Lim of Aberdeen said India is relatively attractive among other emerging markets. Adrian Mowat of JP Morgan feels Indian market can sustain high valuations.

Dr Reddy's Labs topped the buying list, up more than 2 percent to hit a new high. Brokerage CLSA has reiterated its buy rating on the stock with a target of Rs 4,875. Additionally, the company announced a strategic collaboration with Amgen in India.

Lupin rallies 1.6 percent while ICICI Bank lost nearly 1 percent. ITC plunged 2 percent and Coal India declined 1.6 percent.

11:50 am FII view: India is the fastest growing large economy with benign inflation that will allow it to endure high valuations, says Adrian Mowat, Managing Director & Chief Strategist for Asian and Emerging Market Equity at JP Morgan. Mowat, a firm believer in India story, says growing auto sales, softer inflation, and a relatively dovish statement by the Reserve Bank (RBI) are some of the positives that makes him relatively confident of India. He sees the possibility of a pick up in earnings from 2016.

In an interview to CNBC-TV18, he said investments in Indian infrastructure will continue and so will ongoing inflow in domestic mutual funds .

He, however, remains cautious of dramatic rise in midcaps and believes if the RBI keeps rates unchanges even in the second half of this year, market may react negatively. He advises investors to remain with largecap stocks.

11:30 am Buzzing: Shares of Rolta India surged 8 percent intraday as it has been awarded Smart City and 3D Mapping with city modelling projects in Middle East. The deal is pegged at around USD 15 million.

KK Singh, CMD of the company said, "Through our deep expertise with hundreds of Smart Cities client engagements, Rolta is helping cities around the world transform how they deliver services and engage with citizens leveraging innovative technologies such as Big Data, Analytics, GIS, 3D Mapping, Mobility and Social Media."

After some rally yesterday the market has started to consolidate on Thursday. The Sensex is up 0.29 points at 28223.37 and the Nifty is up 1.30 points at 8569.25.
About 1336 shares have advanced, 1009 shares declined, and 143 shares are unchanged.

Pharma index is up over 1 percent while FMCG is down 1 percent. Dr Reddy's Labs, Lupin, Cipla, Hindalco and Bajaj Auto are top gainers while ITC, Coal India, Wipro, ICICI Bank and Maruti are among laggards in the Sensex.

Asian shares mostly rose while the dollar held firm after strong service-sector data and comments from a Fed policymaker boosted optimism about the United State economy and fanned expectations of a US rate hike in September.

Investors are worried that weaning off decade-long zero interest rates on the dollar could prove tough for some emerging economies and companies that have taken cheap dollar funding for granted.

10:55 am FII View: India is the fastest growing large economy with benign inflation that will allow it to endure high valuations, says Adrian Mowat, Managing Director & Chief Strategist for Asian and Emerging Market Equity at JP Morgan. Mowat, a firm believer in India story, says growing auto sales, softer inflation, and a relatively dovish statement by the Reserve Bank (RBI) are some of the positives that makes him relatively confident of India. He sees the possibility of a pick up in earnings from 2016.

In an interview to CNBC-TV18, he said investments in Indian infrastructure will continue and so will ongoing inflow in domestic mutual funds .

He, however, remains cautious of dramatic rise in midcaps and believes if the RBI keeps rates unchanges even in the second half of this year, market may react negatively. He advises investors to remain with largecap stocks.

10:30 am Dr Reddy's hits new high: Dr Reddy's Laboratories has entered into a strategic collaboration with Amgen, the biotechnology company, to market and distribute three Amgen medicines in India in the area of oncology and cardiology.

Under the terms of collaboration, the drug major will perform a full range of regulatory and commercial services to seek approval and launch Kyprolis (carfilzomib), Blincyto (blinatumomab) and Repatha (evolocumab) in India.

Kyprolis was approved by the US Food and Drug Administration in July 2015, in combination with lenalidomide and dexamethasone, for the treatment of patients with relapsed multiple myeloma who have received one to three prior lines of therapy.

Blincyto is an example of immunotherapy, a treatment that uses certain parts of a person's immune system to fight diseases such as cancer. Repatha got approval from European Commission for marketing in July, which is used for the treatment of patients with uncontrolled cholesterol.

The market is flat with the Sensex up 37.58 points at 28260.66. The Nifty is up 8.65 points at 8576.60. About 1156 shares have advanced, 841 shares declined, and 112 shares are unchanged.

Dr Reddy's Labs, Lupin, Sun Pharma, Cipla and Infosys are top gainers while ITC, Tata Steel, ICICI Bank, Hero and HDFC Bank are among laggards in the Sensex.

Gold struggled to pull away from a 5-1/2-year low after more upbeat US economic data bolstered prospects that the Federal Reserve could lift interest rates as soon as next month.

A surge in US services industry activity to a near-decade high suggested solid economic momentum that strengthens the case for a US interest rate hike this year, the first since 2006.

Investors will be eyeing US nonfarm payrolls data due on Friday, with economists polled by Reuters predicting employment in July to have increased at the same pace as June's 223,000 rise.

9:50 am Buzzing: Shares of MTNL jumped 6 percent intraday as government is firming up plans for its survival. The Cabinet also approved an extension of financial support Rs 458.04 crore to MTNL on surrender of 800 MHz CDMA carriers in few of their circles. MTNL had surrendered spectrum in Delhi and Mumbai (two carriers of 1.25 MHz each).

9:30 am FM views: Citing slowdown in China, Finance Minister Arun Jaitley today said India has a chance to become a global manufacturing hub but regretted that Congress was not allowing GST rollout which alone could push GDP by 1 to 2 per cent.
 
The minister said in Lok Sabha that India can see 8 per cent growth as the government is taking a host of steps to boost investment besides reviving stalled projects and pumping in more funds into PSU banks. In addition, "rain Gods have been kinder this year which is expected result in a good harvest," he said.

Jaitley, who was replying to a debate on Supplementary Demand for Grants amid a boycott by Congress and a number of other opposition parties, said the government will infuse Rs 70,000 crore in PSU banks in the four years and they will raise another Rs 1.10 lakh crore from the market, making them healthier to finance economic growth.

The market has opened flat with a positive bias. The Sensex gained 23.31 points at 28246.39 and the Nifty rose 5.75 points to 8573.70. About 690 shares have advanced, 271 shares declined, and 65 shares are unchanged on the BSE.

Infosys, Dr Reddy's Labs, TCS, Lupin, Sun Pharma, BPCL and HCL Tech gained 0.7-1.6 percent while Tata Steel fell 2 percent on profit booking. ITC, M&M, GAIL, HUL, Bank of Baroda, PNB and Asian Paints lost 0.5-1.6 percent.

The Indian rupee opened flat at 63.77 per dollar today against previous close of 63.75.

Mohan Shenoi of Kotak Mahindra Bank said, "Dollar continues to rally versus commodity currencies and other major currencies on the back of strong US data and expectations of September Fed rate hike."

"Rupee has been trading in a tight range as custodial flows are offsetting the impact of strengthening dollar trend globally. Dollar-rupee is expected to trade today in a range of 63.70 to 64/dollar," he added.

The dollar traded little changed as data shows the US services sector expanded at its fastest pace in 10 years, supporting the view the Federal Reserve would raise interest rates in September.

Meanwhile, global cues were positive with the US stocks closing off session highs as a renewed decline in oil and disappointment on Disney earnings pressured stocks.

Asian stocks rose in early trade, tracking modest gains in the US. Japan's Nikkei traded over a two-week high, as the Bank of Japan kicked off its monthly two-day policy meeting. In commodities, Brent crude slips below 50 dollars per barrel.

Crude prices were at fresh 5-month lows after a surge in US gasoline stockpiles while precious metal gold remained under pressure on expectations of a September US rate hike.