Nifty surges 2% on F&O expiry, cracks 5.6% in August series
27 August 2015
Bulls gained complete control over bears on Thursday, the last day of August series, as equity benchmarks climbed 2 percent, taking cues from the Wall Street post temporary easing of China-led turmoil. Short covering and value buying in major heavyweights like HDFC, ITC and Infosys helped the Nifty close August expiry above 7900-mark.
The 30-share BSE Sensex surged 516.53 points to 26231.19 and the 50-share NSE Nifty rallied 157.10 points to 7948.95. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising around 2.5 percent each, largely driven by short covering. The market breadth remained strong as about 1993 shares advanced against 686 shares declined on the Bombay Stock Exchange.
Experts are not sure that the market has bottomed out after around 1600 points fall on the Sensex in previous three consecutive sessions. According to them, global factors (especially China-led) may play key role in near term, though India's fundamentals remain strong.
Nitin Jain of Kotak UK MF said India remained a bright spot among peers. According to him, this is the time to increase allocation to markets.
"There has been monetary prudence after Raghuram Rajan took over, there has been political ability [after the government change] and oil is now a semi-permanent gain for consumers," he reasoned.
August was the worst series for market in the last two years. The Nifty crashed 5.3 percent (Sensex lost 5.6 percent), the biggest fall in absolute terms since August 2013 due to global factors, especially China-led. Bank Nifty shed 6.6 percent while CNX Midcap lost 3.4 percent and BSE Smallcap fell 6.3 percent.
Traders said the rollover has picked up on short side, which indicated that there may be one big fall in September series.
Sahaj Agrawal, associate vice president- derivatives, Kotak Securities expects Nifty to find support at 7750 level and buying support if lower levels are tested.
3:30 pm Market closing: August has been worst series for market in last two years. The market records biggest fall in absolute terms in August series since August 2013. The Nifty fell 473 points in August series, Sensex loses 1,478 points.
However, after brutal slaughter the market ended with some gains on Thursday. The Sensex was up 516.53 points or 2 percent at 26231.1 and the Nifty gained157.10 points or 2 percent at 7948.95. About 1993 shares advanced, 689 shares declined, and 96 shares were unchanged.
HDFC, Vedanta, Tata Steel, Lupin and Cipla were top gainers while BHEL, Bajaj Auto, GAIL, Hero and Hindalco were major laggards.
3:10 pm SEBI to push corporate bond sales: The Securities and Exchange Board of India (SEBI) plans to overhaul the corporate debt market by pushing all issuance onto an electronic platform as early as November, sources with direct knowledge of the plan told Reuters, in a bid to boost market activity.
The markets regulator will announce the proposal drafted by an internal regulatory panel within a few weeks, and seek market feedback, said the sources, who declined to be named as the plan is not yet public.
India would be among the first countries to move online, one of the sources said, in a radical shift that comes after investors called for increased supervision of a USD 225 billion market dominated by a handful of heavyweight issuers.
2:50 pm Buzzing: Shares of Reliance Communications increased 2.5 percent after the telecom services provider partnered with Jasper to get business under government's 'Digital India' initiative.
"Reliance Communications and Jasper, a global Internet of Things (IoT) platform leader, today announced a partnership to enable enterprises throughout India to launch, manage and monetise next-generation IoT businesses," it said in a filing to the exchange.
This partnership pairs the capabilities of Reliance's 11 data center facilities and its Global Cloud Exchange (Cloud X) platform with Jasper's global IoT services platform to enable enterprises to capitalise on IoT services, it added.
Reliance is Jasper's sole telecom partner in India. Reliance Group companies will be the anchor clients for the IoT rollout in India.
2:40 pm More road projects on card: The government is moving quickly when it comes to upgrading the country's infrastructure and a lot of initiatives have been taken with respect to getting road and port projects to take off, Union Transport Minister Nitin Gadkari has said.
In an interview with CNBC-TV18, Gadkari said the government hopes to award highway projects worth Rs 3 lakh crore by March 2016, pointing out that his ministry has awarded nine build-operate-transfer projects and may award another 20 under a hybrid model.
"We hope move forward in 15-16 of the 26 stalled road projects," he said.
Among other initiatives, Gadkari said the government would launch a Rs 4,000-crore mass rapid transport system pilot in Delhi, was talking to unions to work out a port corporatisation scheme and will come out with a Road Safety Bill soon.
2:20 pm HDFC raises funds: Country's largest mortgage lender HDFC has raised Rs 2,000 crore through sale of bonds in order to boost lending operations and meet its future capital needs. The bonds, which has a tenure of five years, attracted a a coupon rate of 8.5 per cent. HDFC Bank is the lead arranger of the issue.
According to sources, HDFC has successfully garnered Rs 2,000 crore by selling the bonds. The proceeds from the issue would be utilised to boost HDFC's lending operations and meet its future capital needs. Earlier, HDFC had announced plans to raise up to Rs 5,000 crore through non-convertible debentures (NCDs).
2:00 pm Market Check
Bulls have wrestled back into control as equity benchmarks rallied 2 percent each followed by broader markets with 2.5 percent upside. Wall Street recovery overnight has boosted sentiment across the globe.
The 30-share BSE Sensex rallied 505.24 points to 26219.90 and the 50-share NSE Nifty jumped 154.10 points to 7945.95 on the last day of August series. About three shares advanced for every share declining on the Bombay Stock Exchange.
Nitin Jain of Kotak UK MF said India remains a bright spot among peers. According to him, this is the time to increase allocation to markets. The fund house recently increased allocation to PSU banks.
On the global front, Asian markets like Shanghai surged 5.5 percent after seeing 25 percent loss over last five days while European markets gained almost 3 percent. Crude prices also rebounded 4 percent with NYMEX trading at USD 40 a barrel.
HDFC extended rally, up 8 percent, the leading contributor to benchmark indices' gains. Infosys, Reliance Industries, HDFC Bank, ITC, ICICI Bank, Lupin, Sun Pharma, L&T, SBI, ONGC, Cipla and Dr Reddy's Labs gained 1-4 percent. However, BHEL tanked 4 percent. GAIL, Hindalco and Bajaj Auto lost 1-1.6 percent.
1:50 pm Buzzing: Shares of Aurobindo Pharma rose 3.7 percent intraday on getting approval from the US Food & Drug Administration (USFDA) for hepatitis B drug.
"The company has received the final approval from the USFDA to manufacture and market Entecavir Tablets, 0.5mg and 1mg," it said in a filing to the exchange.
The approved ANDA (abbreviated new drug application) is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Baraclude tablets, 0.5mg and 1mg, of Bristol-Myers Squibb.
Entecavir tablets are indicated for treatment of chronic hepatitis B virus infection of the liver. The product has an estimated market size of USD 294 million for the twelve months ending June 2015, according to IMS.
1:30 pm Market outlook: Swati Kulkarni, Executive Vice President and Fund Manager, UTI MF does not see market correcting big time, and expects it to be range bound in the near-term. The house would continue with the business of investing even in current volatile scenario and in fact would take this as an opportunity to do some bargain hunting, says Kulkarni They would now look at adding sectors they have been under weight on, while continue to be overweight on cyclicals like autos, cement and industrial manufacturing. They would also look at defensives like IT and pharma now, she adds.
However, retail investors need to have a diversified portfolio, says Kulkarni. According to her, given the overall macro improvement in the economy, cyclical upturn and earnings recovery is likely to come through in the second half of FY16. However, it is unlikely that valuations will expand until earnings pick up, says Kulkarni in an interview to CNBC-TV18.
The market is surging ahead as European markets are up 2-3 percent following strong US and Asia. the Sensex is up 483.98 points or 1.9 percent at 26198.64. The Nifty is up 147.85 points or 1.9 percent at 7939.70. About 1806 shares have advanced, 636 shares declined, and 71 shares are unchanged.
HDFC, Vedanta, Cipla, Lupin and Dr Reddy's Labs are top gainers in the Sensex. Among the losers are BHEL, Bajaj Auto, NTPC, Hindalco and Hero MotoCorp.
Gold steadied after suffering its biggest fall in five weeks in the prior session as stock markets recovered, but indications that a US rate hike might happen later than expected kept a floor under prices.
Cheered by Wall Street's rebound, Asian stocks rose led by Chinese markets whose deep tumble this week fed a global rout. Providing some support to gold were comments by New York Fed President William Dudley that the prospect of a September rate increase looks "less compelling" given the threat posed to the US economy by recent market turmoil.
12:58 pm Market Update: Equity benchmarks rallied further following strong Europe opening. The Sensex surged 384.22 points or 1.49 percent to 26098.88 and the Nifty rose 122.05 points or 1.57 percent to 7913.90.
About 1770 shares have advanced, 647 shares declined, and 72 shares are unchanged on the BSE.
12:55 pm Smart City projects: The parliamentary affairs minister Venkaiah Naidu announced nominations of 98 cities for its ambitious Smart Cities project. As per the five-year plan, the government will allocate Rs 200 crore this year and follow up with Rs 100 crore every year for remaining four years. The cities will be developed to provide world class infrastructure, sustainable environment and smart solutions.
Twenty-four of the 98 cities selected are capital cities, while 8 have population of 1 lakh or below. UP, Tamil Nadu and Maharashtra have got maximum nominations.
12:50 pm Buzzing: Bosch gained 2 percent after the company has inaugurated its new manufacturing facility at Bidadi, Bengaluru in the state of Karnataka at a built up area of approximately 38,000 square meters with an investment of around Rs 340 crore.
The construction of the Bidadi plant spans over two phases, with the second phase scheduled to be completed by 2018, it said in its filing.
"This new state-of-the-art manufacturing facility will produce Diesel products that were previously manufactured at the Adugodi plant, and would have over 2,600 associates working at the facility. The new plant in Bidadi will produce common rail pumps & rails in the first phase & conventional fuel injection pumps production will start in the second phase," it detailed.
12:45 pm Europe Update: European markets opened higher today following a sharp selloff yesterday, after US stocks made a stunning rebound to post the biggest one day gain since 2011.
London's FTSE 100 was up 2.4 percent, Germany's DAX index was 2.7 percent higher, while France's CAC saw a 2.5 percent pop.
Analysts attributed the bounce in US stocks to New York Federal Reserve President William Dudley, who said an interest rate hike in September looked less compelling. Dudley is a voting member of the Federal Open Market Committee (FOMC).
12:35 pm Asia Update: China's Shanghai Composite index closed higher for the first time in last six sessions and posted biggest single day percentage gains since July 9.
The index rose 5.3 percent to close at 3,083.59.
Hang Seng rallied 3 percent. Nikkei rose 1 percent and Straits Times was up 2 percent.
12:30 pm Hindalco in News: Hindalco Industries seeks its shareholders' approval to raise up to Rs 6,000 crore through issuance of non convertible debentures (NCDs) on private placement basis.
"Consent is sought to offer or invite subscription to non convertible debentures up to an amount not exceeding Rs 6,000 crore on private placement basis from time to time until September 15, 2016," Hindalco said in a BSE filing.
Hindalco said its Board will consider raising funds in one or more series/ tranches.
The company's AGM will be held on September 16.
12:15 pm Gold Update: Gold steadied today after suffering its biggest fall in five weeks in the prior session as stock markets recovered, but indications that a US rate hike might happen later than expected kept a floor under prices.
Cheered by Wall Street's rebound, Asian stocks rose led by Chinese markets whose deep tumble this week fed a global rout.
Spot gold was up 0.1 percent at USD 1,126.65 an ounce, after dropping 1.3 percent on Wednesday, its steepest decline since July 20.
Bullion fell to a one-week low of USD 1,117.35 overnight, taking its losses this week to nearly 3 percent.
US gold for December delivery edged up 0.2 percent to USD 1,126.40 an ounce.
12:00 pm Market Check
The market continued to see strong upmove in noon trade with the Sensex holding 26000 level led by banking & financials, pharma and oil & gas stocks. The broader markets outperformed benchmarks as the BSE Midcap gained 1.6 percent and Smallcap rose 1.8 percent.
The Sensex climbed 289.51 points or 1.13 percent to 26004.17 and the Nifty rose 97.45 points or 1.25 percent to 7889.30. About 1727 shares have advanced against 576 shares declined on the Bombay Stock Exchange.
Housing finance company HDFC rally, up 6.4 percent and Cairn India, too, climbed further to 8 percent on short covering and value buying. Vedanta, Cipla, Lupin, Infosys, Ambuja Cements and Kotak Mahindra Bank jumped 2-5 percent.
However, BHEL plunged 4 percent followed by Bajaj Auto, Hero Motocorp and Yes Bank with 1-2 percent losses.
Asian markets traded in positive though they were off day's high. Nikkei gained over 1 percent while Shanghai slipped into the red.
11:55 am Exclusive: The washout of the Monsoon session of Parliament saw the country suffer two crucial setbacks: there was no progress on the Land Bill and the GST Bill too failed to pass muster, putting its April 1, 2016, rollout under question.
But amid reports that the government is moving on both fronts, Union Transport Minister Nitin Gadkari expressed hope that progress would be made soon.
In an interview with CNBC-TV18, Gadkari said the government would take a decision on the Land Ordinance before it lapses (on August 31).
The Land Ordinance has been floated thrice by the government to dilute what it said were strict, growth-hampering restrictions laid out in the 2013 Land Act of the UPA government.
11:40 am Buzzing: Shares of Apollo Tyres jumped over 3 percent intraday Thursday on raising funds. The tyre company has closed a €300 million or Rs 2260 crore financing for its upcoming manufacturing plant in Hungary.
An international consortium of banks comprising ABN AMRO Bank NV, Magyar Export-Import Bank, Raiffeisen Bank, Standard Chartered Bank and UniCredit Bank Hungary, supported the company and provided the debt financing, it added.
The company began construction of the plant earlier this year with a total investment outlay of €475 million. ''We thank our consortium partners who provided appropriate solutions to the specific financing needs for the project and facilitated a smooth execution,'' said K Prabhakar, managing director, Apollo Tyres Hungary
11:30 am Rupee outlook: Speaking about the global macros and its impact currencies world over, Sameer Goel, Head-Asia Rates & Currency Research, Deutsche Bank in an interview to CNBC-TV18 said although the Indian rupee cannot completely delink from global trends, it is much more insulated than other emerging market currencies.
The Reserve Bank of India too has built up reserves which help dampen over volatility in currency market, said Goel.
According to him the current financial crisis is not reminiscent of the 1997 Asian crisis because the fundamental picture is vastly different in the EMs now although the price action did look similar to the one seen in earlier crisis.
The market has made a smart recovery led by pharma and oil stocks. The Sensex is up 360.03 points or 1.4 percent at 26074.69 and the Nifty is up 115.50 points or 1.5 percent at 7907.35. About 1653 shares have advanced, 467 shares declined, and 61 shares are unchanged.
HDFC, Vedanta, Lupin, Cipla and Tata Steel are top gainers while BHEL, Bajaj Auto, Hero MotoCorp, Coal India and TCS are among laggards.
Brent crude climbed by more than USD 1 a barrel on Thursday on an unexpected fall in US crude inventories and a rally in global equity markets, but a stronger dollar capped gains. In other financial markets, a rebound on Wall Street helped soothe investors' tattered nerves, while the dollar rallied as risk aversion eased.
Regaining confidence after a sharp rebound on Wall Street where investors had been hit by worries over China's faltering economy, London copper futures also strengthened on Thursday.
Data released on Wednesday showed US non-defense capital goods orders excluding aircraft, which is a proxy for business investment, increased 2.2 percent in July, the biggest rise since June last year and handily beating expectations.
10:55 am Market Expert: Stating it was difficult to ascertain for sure whether the worst of the recent China-led market turmoil was behind or whether there is a bigger crisis brewing, Kotak UK's Nitin Jain said investors should buy stocks regardless.
"Flows have been very strong [recently]. So it will be difficult to say if this is the market's bottom," he told CNBC-TV18's Latha Venkatesh and Sonia Shenoy in an interview. But he added that amid the crisis, India stands tall when it comes to fundamentals.
"There has been monetary prudence after Raghuram Rajan took over, there has been political ability [after the government change] and oil is now a semi-permanent gain for consumers," he said.
10:40 am Fed rate hike in September? A Federal Reserve interest rate hike next month seems less appropriate given the threat posed to the US economy by recent market turmoil, an influential Fed official said in the clearest sign that fears of a Chinese slowdown are influencing US monetary policy.
New York Fed President William Dudley said the prospect of a September rate hike "seems less compelling" than it was only weeks ago. However he warned about overreacting to "short-term" market moves, and left the door ajar to raising rates when the US central bank holds a policy meeting on September 16-17.
10:25 am Expiry below 8000?: Manoj Murlidharan of Religare said the weighted average price of the Nifty Futures in the last 3-4 days comes to 7,956. Now, precisely, we feel the expiry would be more or less 10-12 points away from that level. So, I am expecting the expiry to be 7,956.
10:10 am Crude gains: Brent crude climbed by more than USD 1 a barrel today on an unexpected fall in US crude inventories and a rally in global equity markets, but a stronger dollar capped gains.
Front-month Brent LCOc1, the global oil benchmark, had gained USD 1.10 to USD 44.24 a barrel, having ended down 7 cents at USD 43.14 on Wednesday.
US crude's front-month contract CLc1 rose 91 cents to USD 39.51 a barrel, after settling down 71 cents, or 1.8 percent, at USD 38.60 a barrel.
US crude inventories USOILC=ECI fell 5.5 million barrels in the week to August 21, the biggest one-week decline since early June, data from the Energy Information Administration showed on Wednesday.
That was in line with the industry group the American Petroleum Institute's late-Tuesday report. Analysts had expected an increase of 1 million barrels.
10:00 am Market Check
The market has maintained its strong uptrend following relief rally across global peers post temporary easing of nervousness in China. The Sensex gained 315.61 points or 1.23 percent at 26030.27 and the Nifty climbed 98.05 points or 1.26 percent to 7889.90, aided by banking & financials, healthcare, oil and metals stocks.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.6-1.9 percent. About four shares advanced for every share declining on the Bombay Stock Exchange.
Vedanta and Cairn India topped the buying list on Sensex, up 6-7 percent followed by HDFC, Infosys, Lupin and Tata Steel with 2.5-3 percent.
ICICI Bank, Reliance Industries, SBI, Sun Pharma, Axis Bank and ONGC climbed 1.5-2 percent. However, Tata Motors, BHEL and Bajaj Auto saw selling pressure, down 1.6-3.5 percent.
9:50 am Buzzing: Shares of Bharti Airtel climbed 3 percent following acquisition of New Delhi-based wirless broadband internet service provider.
The top telecom operator with operations in 20 countries across Asia and Africa on Wednesday said it has signed a definitive agreement to acquire 100 percent equity stake in Augere Wireless Broadband India that incorporated in 2007.
Augere holds 20 MHz of BWA spectrum in Madhya Pradesh and Chhattisgarh circles (MPCG). Upon acquisition, it will become a wholly-owned unit of Airtel, said the company.
9:40 am Market check: After initial gush of gains, the market has cooled off a bit. The Sensex is up 252.23 points or 0.9 percent at 25966.89 and the Nifty is up 78.45 points or 1 percent at 7870.30. About 1326 shares have advanced, 283 shares declined, and 40 shares are unchanged.
Vedanta, HDFC, SBI, Lupin and Bharti are top gainers while BHEL, TCS, Tata Motors, Bajaj Auto and Hero Motocorp are among laggards in the Sensex.
9:30 am Market outlook: One person who believes that the recent moves in China are just a trigger and not the cause for the sell-off across global markets is the managing director of UTI Mutual Fund Leo Puri. He says the 'correction' was in fact long overdue and while the India growth story may still be intact, volatility in the short-term cannot be ruled out.
Puri says: "I don't think we will see deep trauma setting in for now. But I do think that we are going to see a period of stress. Volatility and stress, essentially and my advice to the extent that I would offer at this point to retail investors in India is that if you are fundamentally invested, don't panic, because we are a relative standout in the global economy. And I would actually say that stay purchased, it is actually not a bad thing at this point."
The market has opened higher riding high on strong global cues. The Sensex is up 392.57 points or 1.5 percent at 26107.23 and the Nifty is up 127.90 points or 1.6 percent at 7919.75. About 461 shares have advanced, 64 shares declined, and 14 shares are unchanged.
ONGC, M&M, Bharti Airtel, Hindalco and Bajaj Auto are top gainers in the Sensex.
The Indian rupee gained past 66 a dollar in early trade following rally in global equity markets. The currency appreciated by 20 paise to open at 65.94 per dollar against previous day's closing value of 66.14 a dollar.
Mohan Shenoi of Kotak Mahindra Bank said, "Due to volatility in global markets the likelihood of a Fed rate hike in the upcoming September meeting is fast receding. Following the PBoC action, Chinese equity sell-off has taken a breather. "
The yen fell as demand for the safe-haven currency drops after an abrupt turnaround in risk appetite saw Wall Street post its biggest one-day gain in four years. The dollar index rose above 95 mark.
Wall Street racked up its biggest one-day gain in four years on Wednesday as fears about China's economy gave way to bargain hunters emboldened by expectations the US Federal Reserve might not raise interest rates next month.
China's Shanghai Composite index fluctuated around the critical 3,000 mark early Thursday, tracking the positive sentiment across Asia underpinned by Wall Street's biggest one-day gain since 2011 overnight.