Sensex, Nifty end higher; Midcap, Smallcap underperform
13 August 2015
03:30 pm Market closing: The market closed higher for the first time in last five sessions. In a big setback for the government's reform drive, the parliament's turbulent and largely unproductive monsoon session ended without the GST Bill getting passed.
The Sensex gained 37.27 points at 27549.53 and the Nifty rose 6.40 points to 8355.85. However, the broader markets underperforming. The BSE Midcap lost 0.2 percent and Smallcap fell 0.8 percent. About 1053 shares advanced against 1800 shares declined on the BSE.
M&M, Cipla, Lupin, Sun Pharma, Axis Bank and Tata Power rallied 2-4 percent. BPCL rose 1.75 percent ahead of Q1 earnings on Friday.
However, Vedanta plunged 8.6 percent. Tata Steel and Hindalco were down 5-6 percent. Bharti Airtel, GAIL and NMDC lost 2-3 percent.
02:50 pm Earnings: State-run oil retailer Indian Oil Corporation (IOC) surpassed analysts' estimates on Thursday by reporting first quarter net profit at Rs 6,436 crore, up 2.5-fold over Rs 2,523 crore in the same quarter last year.
Gross refining margin climbed 4.8 times to USD 10.77 a barrel during the quarter compared to USD 2.25 a barrel in same quarter last year.
02:30 pm Interview: Unseasonal rains in summer led to drop in demandof air coolers, Achal Bakeri, Chairman & Managing Director (CMD) of Symphony told CNBC-TV18.
The company's total income fell 13 percent to Rs 133.4 crore and sales slumped 20.9 percent in the June quarter. Net profit came at Rs 22.3 crore against Rs 32.7 crore year-on-year.
Bakeri does not expect adverse impact of irregular monsoon. Symphony's sales will improve by 10-15 percent from current quarter onwards.
The company's recent acquisition of an air-cooler Chinese company, Munters Keruilai will aid its expansion plans. The acquisition, worth over Rs 50 crore, will open up global markets and add more customers, Bakeri said.
02:00 pm Market Check
The market continued to be in consolidation mode with the Sensex rising 87.77 points to 27600.03 and the Nifty up 27 points at 8376.45. About 1147 shares have advanced, 1533 shares declined, and 136 shares are unchanged on the BSE.
Tata Power jumped nearly 4 percent after strong earnings in Q1. It turned profitable during the quarter, reporting net at Rs 241.3 crore against loss of Rs 111.3 crore in same quarter last year. Revenue jumped 6 percent year-on-year to Rs 9,234.6 crore.
Metals stocks extended losses in afternoon trade with the Vedanta falling nearly 6 percent followed by Tata Steel with 5 percent loss.
The recent market weakness can be attributed to China, policy logjam (GST) and the slow pickup in the earnings cycle, says Vikas Khemani, CEO, Edelweiss Securities.
However, he says India has a unique story and these kinds of falls or dips should be used definitely as an opportunity to build equity play portfolio from a medium-to-long-term perspective.
01:45 pm Earnings: Tata Power's first quarter earnings beat analysts' expectations on every front Thursday. It turned profitable during the quarter, reporting net at Rs 241.3 crore against loss of Rs 111.3 crore in same quarter last year.
Revenue jumped 6 percent year-on-year to Rs 9,234.6 crore compared to Rs 8,707.5 crore during the quarter.
According to average of estimates of analysts polled by CNBC-TV18, profit was estimated at Rs 203 crore on revenue of Rs 8,637 crore for the quarter.
Operating profit (earnings before interest, tax, depreciation and amortisation) jumped 31 percent year-on-year to Rs 2,181 crore and margin expanded by 450 basis points to 23.6 percent in June quarter, supported by power business. Analysts had expected operating profit of Rs 1,876 crore and margin of 21.7 percent for the quarter.
01:25 pm GVK Power in focus: GVK Power & Infrastructure's first quarter consolidated net loss reduced to Rs 124 crore from Rs 281.3 crore in the year-ago period on better operational performance and revenue growth.
Net sales or income from operations climbed 40 percent to Rs 999 crore compared to Rs 713 crore in same quarter last year, said the company in its filing to the exchange.
Consolidated operating profit stood at Rs 359 crore against loss of Rs 68.7 crore in the corresponding period of previous year as in Q1FY15, it had a loss on disposal (write off) of assets of Rs 286.8 crore.
Interest cost during the quarter jumped 28 percent year-on-year to Rs 410.9 crore while it has tax write-back of Rs 15.6 crore compared to write-back of Rs 119.5 crore during the same period.
01:00 pm Market Check
The market gained strength amid consolidation in afternoon trade, supported by banks, FMCG, healthcare and oil stocks. European markets opened higher as investors are eyeing Greek's third bailout. France's CAC, Germany's DAX and Britain's FTSE climbed 0.6-1.8 percent.
The Sensex rose 158.21 points or 0.58 percent to 27670.47 and the Nifty gained 49.95 points or 0.60 percent at 8399.40. About 1246 shares have advanced, 1343 shares declined, and 129 shares are unchanged on the BSE.
Lupin, Bharti Airtel and Cipla topped the buying list on Sensex, up more than 2 percent.
The rupee breached 65 a dollar, the weakest level since September 2013 on heavy dollar buying by corporates and FIIs. However, exporters sold dollars at the 65 mark, helping the currency pull back slightly from day's low to trade at 64.91 a dollar, down 14 paise. RBI intervention may also have supported rupee.
The monsoon session is a total washout after all. Both houses of parliament adjourned sine die without any discussion on either the Constitutional Ammendment Bill for GST or the Land Acquisition Bill. However, the government still has the option of recalling a special session of parliament before the winter session.
In a major relief to Nestle India, Bombay High Court set aside the ban on Maggi saying FSSAI will have to justify ban on 6 variants by testing them in three specific labs. Nestle counsel told CNBC-TV18 that they have agreed to High Court's order. The stock gained 4 percent.
12:50 pm Gold: Gold demand hit a six-year low in the second quarter, a World Gold Council report showed on Thursday, as sluggish price movement and the prospect of better returns in equities curbed interest in the metal.
Demand fell 12 percent to 914.9 tonnes, with declines in China and India accounting for nearly half of the drop, the WGC said.
Globally, jewellery buying fell 14 percent, investment slid 11 percent, and central bank buying was 13 percent lower.
"Jewellery demand came under pressure from negative consumer sentiment, while investment was a casualty of directionless prices and stock market gains," the WGC said.
12:30 pm Rupee outlook: The devaluation of the yuan should not be seen as a sign of China wanting to wage a currency war, but it is more to do with China's ambitions to facilitate yuan's inclusion in Special Drawing Rights (SDR), says Dennis Tan, Fx Strategist, Barclays. He adds that it should be seen more as a liberalisation or a reform measure to improve he fixing mechanism so that it reflects the market rates.
"We do not think it's a currency war. We think it is more in line with China's ambition to facilitate the yuan's inclusion in special drawing rights (SDR). So this should be more seen as liberalisation or a reform measure to improve the fixing mechanism so that flex the market rates," he says
The market is still steady even though rupee has weakened. The Sensex is up 94.63 points or 0.3 percent at 27606.89 and the Nifty is up 31.50 points or 0.4 percent at 8380.95.About 1309 shares have advanced, 1160 shares declined, and 133 shares are unchanged.
Rupee slipped close to the 65 mark on big dollar buying by corporates and by FIIs. RBI is suspected to have sold at 64.99. Finance Secretary, Rajiv Mehrishi says rate cut will help credit flows, exports and industry.
Cipla, Lupin, Bharti, M&M and Hero are top gainers while Tata Steel, Vedanta, Hindalco abd GAIL are among losers.
Meanwhile, setting aside the Food Safety and Standards Authority of India (FSSAI) ban order on Nestle's Maggi noodles, the Bombay High Court today told the food authority to justify the ban on six variants of the product.
However, Nestle will not be able to sell its marquee product just yet. The court has ruled that preserved samples will now have to be tested in three different labs located in Jaipur, Mohali and Hyderabad in a span of 6 weeks.
The company will have to send five samples of each batch to three food testing labs and will not be allowed to either manufacture or sell until the tests are completed.
11:50 am Rupee outlook: The devaluation of the yuan should not be seen as a sign of China wanting to wage a currency war, but it is more to do with China's ambitions to facilitate yuan's inclusion in Special Drawing Rights (SDR), says Dennis Tan, Fx Strategist, Barclays. He adds that it should be seen more as a liberalisation or a reform measure to improve he fixing mechanism so that it reflects the market rates.
11:40 am Market check: The Sensex is up 144.42 points or 0.5 percent at 27656.68 and the Nifty is up 44.05 points or 0.5 percent at 8393.50. About 1347 shares have advanced, 1073 shares declined, and 127 shares are unchanged.
Cipla, Bharti Airtel, Lupin, Cipla, SBI and Coal India are top gainers in the Sensex. Among the losers are Vedanta, Tata Steel, Hindalco, GAIL and Wipro.
11:30 am Nestle India: Bombay High Court has set aside FSSAI order banning Maggi noodles. However, Nestle will not manufacture or sell Maggi till testing is completed. The stock is up 5 percent.
The market has bounced back after four days of losses led higher by the bank Nifty as global markets stabilised and sentiment is boosted by the CPI data for July that came in much better than estimates at 3.78 percent versus 5.4 percent in June. Rupee, however, slipped to the day's low after a decent start.
The Sensex is up 129.66 points or 0.5 percent at 27641.92, and the Nifty up 38.25 points or 0.5 percent at 8387.70. About 1311 shares have advanced, 980 shares declined, and 117 shares are unchanged.
Bharti Airtel, Cipla, Lupin, SBI and Hero MotoCorp are top gainers in the Sensex. Among the losers are Tata Steel, Vedanta, GAIL, Hindalco and Wipro.
China's central bank said that there was no basis for further depreciation in the yuan given strong economic fundamentals, in a bid to reassure jittery global markets after it devalued the currency earlier in the week.
As the yuan fell for the third straight day, the People's Bank of China (PBOC) said the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provided "strong support" to the exchange rate.
China's decision to devalue the currency on Tuesday by pushing its official guidance rate down 2 percent sparked fears of a "currency war" and roiled global financial markets, dragging other Asian currencies to multi-year lows.
10:50 am FDA alert: Detergent and frozen fat have been found by the Kolkata-based Central Laboratory during re-tests of milk samples collected by district Food and Drugs Administration (FDA) department from Mother Dairy booths here. Ghaziabad FDA yesterday received the re-test reports, from the Kolkata-based laboratory, according to which both samples of "full cream" and "toned" milk were found containing frozen fat and detergent, FDA official Vineet Kumar said.
10:30 am Market outlook: With each passing day, the Chinese administered devaluation is decreasing. And while China wants to move towards a market mechanism with yuan, it won't be easy, says Arvind Sanger of Geosphere Capital Management. "If they do move to a market-based pricing and don't intervene, then yuan has more bets against it, than for it. So, there will be a lot of PBoC intervention as they would want to limit the fall of the yuan," he told CNBC-TV18. However, shocks from yuan devaluation will reduce in the near term, he adds.
The market has cooled off a bit dragged by metal stocks. The Sensex is up 121.54 points or 0.4 percent at 27633.80 and the Nifty is up 37.30 points or 0.4 percent at 8386.75. About 1335 shares have advanced, 812 shares declined, and 110 shares are unchanged.
Tata Steel, Vedanta, Hindalco, GAIL and Coal India are down 1-4 percent while Bharti Airtel, Lupin, Infosys, Cipla and HDFC Bank are top gainers in the Sensex.
Oil prices are mixed in Asia as lingering worries over the crude supply glut held down gains sparked by stronger US demand and a falling dollar, analysts said.
US benchmark West Texas Intermediate for September delivery dropped three cents to USD 43.27 and Brent crude for September gained six cents to USD 49.72 in midday trade. Prices had edged higher from six-year lows yesterday on news that US crude supplies fell a sign of stronger demand and the dollar declined.
The US Department of Energy yesterday said the estimated amount of crude oil in the country's commercial storage tanks tumbled 1.7 million barrels to 453.6 million barrels in the week ending August 7.
9:55 am Results: State-run National Aluminium Company (Nalco) reported a 40 percent decline in its net profit at Rs 163.44 crore for the quarter ended June 30, 2015.
The company had posted a net profit of Rs 270.99 crore in the year-ago period, it said in a BSE filing.
Total income of the aluminium producer fell by 16 percent to Rs 1,491.27 crore in April-June quarter of this fiscal against Rs 1,680.04 crore in the same quarter of 2014-15.
Total expenses of the company fell to Rs 1,366.55 crore from Rs 1,499.06 crore in the reported quarter. Net sales the Bhubaneswar-based firm from aluminium fell to 1,042.26 crore in the June quarter of 2015-16 from Rs 1,042.62 crore in the same quarter in 2014-15.
9:35 am Divestment: The government is aiming to sell a 10 percent stake valued at around USD 3.7 billion in top coal miner Coal India through a stock market auction, as part of the government's drive to raise money from reducing its holdings in companies.
The government, which owns 78.65 percent of Coal India, has sought bids from banks by September 2 to manage the share offering, according to a notice issued by the Department of Disinvestment, which oversees stake sales in state companies.
Five banks will be selected for the offering, it said. The notice did not mention the timetable for the share sale. The government is seeking to raise as much as USD 11 billion by selling stakes in state-run companies this fiscal year, crucial to narrowing the fiscal deficit to a planned 3.9 percent of gross domestic product in 2015-16.
9:25 am Market check: Supported by surge in banks, the market is holding its early gains. The Sensex is up 233.43 points or 0.8 percent at 27745.69 and the Nifty is up 62.60 points or 0.7 percent at 8412.05. About 1193 shares have advanced, 340 shares declined, and 65 shares are unchanged.
Bharti and SBI are up 2-3 percent while ICICI Bank, Vedanta and Hindalco are other top gainers.
After severe cut yesterday, the market has opened higher Thursday on strong macro data. The Sensex is up 204.94 points or 0.7 percent at 27717.20, and the Nifty is up 58.50 points or 0.7 percent at 8407.95. About 654 shares have advanced, 205 shares declined, and 71 shares are unchanged.
Bharti Airtel, Cipla, ICICI Bank, Tata Steel and ONGC are top gainers in the Sensex. Among the losers are TCS, ITC and GAIL.
Consumer price index (CPI) for the month of July came in at 3.78 percent, helped by the base effect and a major slump in food prices. There was another set of good news as industial output rose to a four-month high of 3.8 percent, compared to 2.7 percent in the previous month, and an expectation of 2.93 percent.
With industrial production hitting a 4-month high of 3.8 percent in June, India Inc on Wednesday said it indicates revival in industrial activity on the back of improved performance of manufacturing, and should motivate the RBI to slash interest rates. Terming the the outcomes of the recent RBI policy review as "slightly disappointing", Assocham said the central bank should have reduced the rates a bit to provide a fillip to the industrial growth.
The rupee opened marginally higher at 64.72 per dollar against 64.77 Wednesday.
Mohan Shenoi of Kotak Mahindra Bank said, "The devaluation of yuan on the back of weak exports from China has resulted in unwinding of yuan carry trades in particular against the euro. Asian currencies have come under pressure due to yuan depreciation."
Global markets are mixed with the US market seeing a sharp recovery led by rising energy shares. The Nasdaq Composite turned positive, ending mildly higher after earlier falling 1.5 percent.
Asian markets are trading with a mild positive bias. Nikkei has bounced off two- week lows; the index though is still down more than 1 percent for the week. The German DAX and French CAC both faced heavy selling tumbling over 3 percent, while London's FTSE ended around 1.4 percent lower.
In other asset classes, crude prices saw modest recovery following a weaker dollar and lower US crude stockpiles.