Sensex, Nifty end marginally lower; Maruti, Tata Steel up

18 Aug 2015

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3:30 pm Market closing: The market ended with marginal losses as the Nifty was below 8500. The 50-share index was down 10.75 points or 0.1 percent at 8466.5 while the Sensex slipped 46.73 points or 0.1 percent at 27831.54.

Coal India, GAIL, Cipla, Vedanta and Lupin were among laggards. Maruti, Tata Steel, Infosys, TCS and SBI were top gainers in the Sensex.

03:10 pm Buzzing: Shares of Sharon Bio Medicine were locked at 20 percent upper circuit at Rs 21.30 on Tuesday after the US drug regulator audited company's formulation plant in Uttarakhand.

"In last week, the formulation plant at Dehradun in Uttarakhand has been inspected and audited by officials of US Food and Drug Administration (USFDA)," said the drug maker in its filing.

It was the company's second plant inspected and audited by USFDA officials in the last 2 months. The US drug regulator had inspected and audited its Navi Mumbai plant (the first plant) in the first week of July 2015.

02:59 pm Market Update: The Sensex declined 44.52 points to 27833.75 and the Nifty fell 11.10 points to 8466.20. About 1567 shares have advanced, 1228 shares declined, and 117 shares are unchanged on the BSE.

02:45 pm ICICI CEO on rate cut: With inflation under control, lending rates will gradually come down as India is moving towards softer interest rate environment, largest private sector lender ICICI Bank CEO Chanda Kochhar said today.

ICICI Bank was the first lender to start cutting base lending rates, she said adding "a lot of transmission" of monetary easing to borrowers has already happened.

"... directionally we can say that a lot of factors and parameters have come under control, whether it is in current account (deficit) or fiscal side. Inflation is coming under control. So overall we are moving towards a softening interest rate environment," she said.

Kochhar added "clearly a lot of transmission has happened because if you see when the monetary policy rates gets cut then the deposit rates fall and the deposit form a only part of cost of funds for the banks."

She said 30 basis points (0.30 percent) rate cut has already happened "which is quite in line with the reduction in the cost of funds."

The Reserve Bank of India has cut its benchmark rate by 75 basis points to 7.25 percent in three tranches so far this year.

02:25 pm Oil & gold forecast: The recent drop in crude oil was a result of OPEC deciding to increase its production, with a strong US dollar and Chinese economic weakness further adding to its woes, says commodity expert Mark Keenan of Societe Generale.

Keenan said he expects Brent crude prices to slide further in this quarter before bouncing back to trade higher from current levels.

For the next year, he sees crude averaging about USD 60 per barrel.

But he's got bad news for gold. "Gold's ability as a safe haven has disappointed. Last year, it fell despite a lot of uncertainty. It is likely to continue to fall," he said.

"We see gold at USD 1050 per ounce toward the end of the year. It may average USD 1,000 next year."

02:00 pm Market Check
Equity benchmarks recouped losses in afternoon trade, led by Infosys, TCS, State Bank of India and Larsen & Toubro. The Sensex gained 12.82 points at 27891.09 and the Nifty rose 3.65 points to 8480.95.

The broader markets continued to outperform benchmarks. The BSE Midcap and Smallcap indices climbed 0.7 percent each. About 1558 shares have advanced against 1185 shares declined on the Bombay Stock Exchange.

Technology stocks like Infosys and TCS rallied 2 percent each. BNP Paribas gave thumbs up to Infosys after investor meetings with the CFO. The brokerage maintained its buy rating with the target price raised to Rs 1,320 on the back of a Q1 beat and a weaker rupee. TCS, too, rallied 1.9 percent.

Coal India and GAIL topped the selling list on Sensex, down 4 percent each.

1:50 pm PM's Bihar fund: Shortly after returning from his two-day UAE trip, Prime Minister Narendra Modi on Tuesday returned to poll-bound Bihar to make a strong pitch for the Bharatiya Janata Party (BJP) in the state. His target was once against Bihar Chief Minister and JDU leader Nitish Kumar. In a big bang announcement during the rally, the Prime Minister announced a special package worth Rs 1.25 lakh crore, and an addition fund of Rs 40,000 crore for the poll-bound state.

1:30 pm Exclusive: The government's seven-step Indradhanush initiative announced last week to push through public sector bank (PSB) reform is a "comprehensive" one, says newly-appointed Punjab National Bank CMD Usha Ananthasubramanian. In an interview with CNBC-TV18, Ananthasubramanian said as chief of the country's second largest state lender, she was focused on tackling the thorny NPA issue that has troubled all PSBs by using "innovative ways". She also pitched for the need to professionalize bank boards and said the set up of a Bank Board Bureau was a positive step.

The market is sliding away as China plays havoc. The Sensex is down 69.52 points or 0.2 percent at 27808.75 and the Nifty is down 23.45 points or 0.3 percent at 8453.85. About 1424 shares have advanced, 1174 shares declined, and 124 shares are unchanged.

Coal India, GAIL, Hindalco, Cipla and Vedanta are losers in the Sensex. Infosys, TCS, SBI, M&M and L&T are top gainers in the Sensex. BPCL is top gainer on the Nifty.

Oil prices dipped again in as traders expected lower refinery consumption after the US summer, while Asia's weakening economies and high global production raised concerns about oversupply.

Both crude oil benchmarks are now almost a third below their last peak from May, and analysts say more falls could lie ahead.Underscoring the bearish sentiment, money managers and hedge funds cut their net long holdings of Brent crude futures for a fourth straight week and have raised their bearish bets on gasoil as prices have fallen, exchange data showed on Monday.

12:25 pm Market Expert: With the micro and corporate newsflow now out of the way, the market is clearly going to take cues from what is likely to happen in terms of goods and services tax (GST) and interest rates is the word coming in from Dipan Mehta, member of BSE & NSE.

For several months now global cues have become less important especially with regards to its impact on domestic market, says Mehta. The market is now more focused on if the government will be able to hold a special parliament session for GST and if there is a case now for RBI to cut interest rates etc.

He is not very excited with prospect of government mulling in 100 percent FDI in rubber and coffee as such because government seems to have liberalized whole host of sectors but it is not really making any difference albeit improving sentiment a bit.

12:00 pm Market Check
The market lost its early momentum as banking & financials and metals & mining saw profit taking after sudden fall in Chinese market. However, technology stocks gained.

The 30-share BSE Sensex fell 88.56 points to 27789.71 and the 50-share NSE Nifty declined 30.20 points to 8447.10. About 1362 shares have advanced, 1084 shares declined, and 155 shares are unchanged on the BSE.

China's Shanghai Composite index tanked 6 percent, leading led losses in Asia as nerves over China's struggling economy and a deadly bomb explosion in Thailand sent investors scrambling for safety.

Infosys gained 1.9 percent as BNP Paribas gave thumbs up to the company after investor meetings with the CFO. The brokerage maintained its buy rating with the target price raised to Rs 1,320 on the back of a Q1 beat and a weaker rupee. TCS, too, rallied 1.9 percent.

Moody's cut India's 2015 GDP forecast to 7 percent in light of a drier than average monsoon. The agency, however, retained its 2016 GDP forecast to 7.5 percent.

Among second line shares, small caps fared better than midcaps, with the BSE Small Cap Index up 0.6% compared to a 0.2% increase in the BSE Midcap Index.   

Eros International (7 percent), Kaveri Seed (6 percent), MMTC (5 percent), Gujarat Pipavav (5 percent) and Rajesh Exports (4 percent) were the big winners in the midcap space. Other notable gainers included Apollo Tyres (4 percent), BASF (4 percent), Triveni Turbine (4 percent), JK Tyre & Ind (4 percent) and Jubilant Life (4 percent).

11:50 am Infra lending: In what will provide a huge comfort to lenders and infra firms and give a significant boost in revival of stalled projects, sources say that after months of consultations with stakeholders, the government has formed a drafting committee to expedite the revision of model concession agreements (MCAs).

The drafting committee is expected to comprise of officials from the Department of Economic Affairs, Department of Financial Services and the Law Ministry, along with members of NHAI.

The committee is expected to provide lenders may be given more role in the new concession agreements by giving them charge on receivables and making them co-insurers to a project along with the concessionare.

11:30 am FII view: Lack of any overt measures to solve the problem of non-performing assets in the banking industry, is a disappointment, feels Suresh Ganapathy, banking analyst at Macquarie. In an interview with CNBC-TV18, he says it remains to be seen how the proposed Bank Board Bureau is different from the current selection panel. He says the reforms proposed in the Indradhanush package for state-owned banks need to be taken with a pinch of salt, and is skeptical if the appointment of private sector personnel in leadership positions will make a big difference.

The market is holding gains. The Sensex is up 93.55 points at 27971.82 and the Nifty is up 26 points or 0.3 percent at 8503.30. About 1543 shares have advanced, 696 shares declined, and 124 shares are unchanged.

Infosys, TCS, SBI, Wipro and Tata Steel are top gainers in the Sensex. Among losers are GAIL, Cipla, Coal India, Lupin and Vedanta.

The much-talked about relief for PSU Banks appear convincing, says Gautam Chhaochharia, Head-India Research at UBS Securities. He admits it is difficult to predict if private sector best practices will be replicated by the PSU Banks five years down the line, but the direction is definitely positive. UBS remains overweight on the sector and advises buying SBI. 

IT, the other talked about space, he believes the transformation of businesses to meet current needs will make it tough for IT companies to achieve double digit growth.

10:55 am Market Update: The Sensex gained 100.55 points at 27978.82, and the Nifty rose 30.60 points to 8507.90. About 1549 shares have advanced, 690 shares declined, and 115 shares are unchanged on the BSE.

10:45 am Gold Update: Gold firmed today, building on its biggest weekly rise in three months, buoyed by weaker-than-expected US data and lingering uncertainty over the implications of China's yuan devaluation.

Gold rallied to its highest since mid-July last week after Beijing's mini-devaluation of the yuan, as analysts speculated that a weakening Chinese currency could prompt the Federal Reserve to postpone an expected rise in US interest rates.

Spot gold was up 0.2 percent at USD 1,116.40 an ounce, while US gold futures for December delivery settled up 0.5 percent at USD 1,118.40 an ounce.

Expectations for a rise in US rates this year, which would lift the opportunity cost of holding gold while boosting the US dollar, pushed the metal to a 5-1/2-year low of USD 1,077 last month.

A rate increase will be dependent on the strength of US data. The dollar briefly retreated and gold strengthened after a report on Monday showed manufacturing activity in New York state plunged in August to its weakest since 2009.

10:25 am FII View: The much-talked about relief for PSU Banks appear convincing, says Gautam Chhaochharia, Head-India Research at UBS Securities. He admits it is difficult to predict if private sector best practices will be replicated by the PSU banks five years down the line, but the direction is definitely positive.

Earnings season, which by and large have been mixed in June quarters, he does not sees sharp growth ahead though chance of negative earnings surprises has diminished a little. On urban consumption, Chhaochharia said it is still remains muted.

Amid all these, Chhaochharia says the big positive surprise ahead remain softening of interest rates. He expects the Reserve Bank (RBI) to cut rates by 75 bps by March of 2016 as a step to beat deflation. He also sees a strong chance of US Fed hiking ates in September.

10:00 am Market Check
The market continued to see buying interest amid consolidation. The Sensex gained 118.88 points at 27997.15 and the Nifty rose 35.20 points to 8512.50, led by technology, pharma, capital goods and metals stocks. However, the selling in HDFC twins and ICICI Bank capped the upside.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.6 percent and 0.9 percent, respectively. About 1418 shares have advanced, 515 shares declined, and 83 shares are unchanged on the Bombay Stock Exchange.

Infosys, TCS, SBI and Tata Steel topped the buying list on Sensex, up 2 percent each while Cipla (down 1.3 percent) and GAIL (down 2.6 percent) topped the selling list. HDFC, HDFC Bank and ICICI Bank were marginally in red.

9:50 am Market check: The Sensex is up 113.13 points or 0.4 percent at 27991.40 and the Nifty is up 33.50 points or 0.4 percent at 8510.80. About 1357 shares have advanced, 479 shares declined, and 85 shares are unchanged.

Infosys, TCS, Tata Steel, Wipro and Vedanta are top gainers while GAIL, Coal India, Tata Motors and NTPC are among laggards in the Sensex.

9:40 am Moody's on India: Ratings agency Moody's has downgraded the country's 2015-16 gross domestic product (GDP) growth target to 7 percent, from 7.5 percent earlier. In its Global Macro Outlook report, the firm said it had slashed its growth outlook "in light of a drier than average monsoon" though it added that it expects GDP growth to go back to 7.5 percent in the next fiscal.

Moody's Atsi Sheth, however, said that the forecast wasn't entirely driven by the ongoing weakness in monsoon. "We've looked high frequency data and what we see is that industrial recovery is proceeding but very slowly," she said.

9:30 am Buzzing: Shares of coffee stocks are rallying on hopes of getting foreign funds. Tata Coffee, Tata Global Beverag CCL Products and Bombay Burmah jumped 3-9 percent.

The government may allow foreign direct investment (FDI) in rubber and coffee plantation sectors with an aim to attract more FDI into the country.  A proposal to this effect is under consultation of the commerce and industry ministry, sources said. Currently, 100 percent foreign investment is permitted through the government approval route in the tea plantation sector. However, FDI is not allowed in any other plantation sector or activity.

According to sources, foreign players could be allowed to engage in rubber and coffee plantation, engage labourers in plucking of coffee beans or collecting latex from rubber trees and processing of the raw material. Permitting foreign investment will also help India reduce import bill of rubber and boost India's coffee exports, they said.

The market has opened higher aided by global support. The Sensex is up 100.92 points or 0.4 percent at 27979.19 and the Nifty is up 28.55 points or 0.4 percent at 8505.85. About 402 shares have advanced, 110 shares declined, and 58 shares are unchanged.

Bharti Airtel, Hindalco, SBI, Bajaj Auto and BHEL are top gainers in the Sensex. Among the losers are Coal India and Vedanta.

Asian shares eked out marginal gains in early trade, buoyed by a positive handover from Wall Street overnight, and as investors digested China's latest home price data.

Wall Street advanced overnight on the back of positive homebuilder data. The tech-heavy Nasdaq led gains with a 0.9 percent rise, as investors scooped up battered biotech plays. The Dow Jones Industrial Average and the S&P 500 notched up 0.4 and 0.5 percent, respectively.

Among other asset classes, the US dollar was up against a basket of major currencies, crude continued to trade lower following continuing slowdown concerns in China while gold held steady.

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