Sensex ends down 1%, Nifty below 7800 ahead of RBI policy

3:30 pm Market Closing: Equity benchmarks closed 1 percent lower Monday as investors cautious ahead of RBI policy. The Sensex lost 246.66 points to 25616.84 and the Nifty fell 72.80 points to 7795.70.

About 1149 shares have advanced, 1579 shares declined, and 127 shares are unchanged on the BSE.

Tata Motors, Vedanta, Sun Pharma, Infosys, Coal India and UltraTech Cement plunged 3-6 percent. However, Dr Reddy's Labs outperformed, up 5.5 percent. Lupin, HUL, Idea Cellular, Adani Ports and YES Bank gained 1-2 percent.

3:05 pm Nifty breaks 7800: Equity benchmarks extended losses in late trade with the Nifty breaking 7800, dragged by metals and select banks stocks. Tata Motors extended fall, down more than 5 percent.

The Sensex lost 240.82 points or 0.93 percent to 25622.68 and the Nifty fell 70.95 points or 0.90 percent to 7797.55. About 1167 shares have advanced, 1477 shares declined, and 129 shares are unchanged on the BSE.

2:55 pm India-US trade: With India emerging as the most sought after developing market and an important partner for the US, the bilateral trade between the two countries is likely to touch USD 500 billion by 2025, a recent survey said.

According to a survey conducted by PwC and Indo American Chamber of Commerce (IACC), trade between the two countries has the potential to grow up to USD 500 billion through concerned efforts from all stakeholders -- government leaders and investors, corporates, businesses and entrepreneurs.

"India continues to emerge as one of the most important markets in the developing world and an important trading partner for the US. This is evident by the four-fold growth in the India-US trade since 2006 to 100 billion USD in 2014," PwC India Strategy Consulting Leader Shashank Tripathi said.

He said the drivers to achieve this trade growth would be the five key sectors including aerospace and defence (A&D), infrastructure and logistics, energy, manufacturing and services.

2:50 pm Market Update: The Sensex fell 197.87 points or 0.77 percent to 25665.63 and the Nifty lost 55.30 points or 0.70 percent to 7813.20.

About 1256 shares have advanced, 1337 shares declined, and 143 shares are unchanged on the BSE.

2:40 pm Asia Update: Asian equity markets were mixed today, with data from the world's second largest economy in focus. But volumes in the region were light with Hong Kong, Taiwan and South Korea shut for the Mid-Autumn Festival.

Chinese industrial profits declined 8.8 percent on year in August, their sharpest pace since 2011, according to the National Statistics Bureau. Analysts said the report wasn't surprising given the string of recent weak economic indicators, such as tumbling producer price inflation and factory activity.

Attention now falls on China's official September purchasing manufacturing managers' index (PMI) and the final Caixin/Markit PMI, both due on Thursday.

2:20 pm Sugar output: India's sugar output is likely to fall 5 percent to 27 million tonnes in the upcoming 2015/16 crop season due to poor monsoon rains in states such as Maharashtra, an industry body said on Monday, which could prop up prices amid a global glut.

India's sugar stocks, however, are likely to rise to 9.6 million tonnes at the start of the season on October 1, from 7.5 million last year, said Abinash Verma, director general of the Indian Sugar Mills Association.

After a string of bumper harvests created an Indian sugar glut, drought could cut supply in the marketing year starting in October, and there is a risk production will drop below consumption for the first time in seven years in the following 2016/17 season.

2:00 pm Market Check
Equity benchmarks remained choppy with the Sensex falling 23.10 points to 25840.40 and the Nifty declining 0.90 points to 7867.60. The market breadth remained positive as about 1332 shares have advanced against 1211 shares declined on the Bombay Stock Exchange.

Main gainers in the Nifty were Dr Reddy's Labs (6 percent), Idea Cellular (4 percent), Lupin (3 percent) and HUL (3 percent),Laggards were Tata Motors (-3 percent), Sun Pharma (-3 percent), UltraTech Cement (-3 percent) and Infosys (-3 percent).

IDBI Bank (9 percent), RCF (up 7.4 percent) DLF (5 percent), Wockhardt (4 percent), Reliance Power (3 percent) and GMR Infra (3 percent) were the big winners in the midcap space. Other notable gainers included Unitech (3 percent), Jain Irrigation (3 percent), Emami (3 percent), Petronet LNG (3 percent) and Dewan Housing (3 percent).

The rupee appreciated by 4 paise to 66.11 a dollar. Brent crude was trading at USD 48.54/barrel, down USD 0.38 or 0.8 percent over its previous close.

European shares were trading weak with France's CAC down 22 points at 4458, Germany's DAX down 46 points at 9642, and UK's FTSE down 20 points at 6088.

1:20 pm Rate cut possible?: The Reserve Bank of India (RBI) is expected to cut its key repo rate to a four-year low on Tuesday to help support the domestic economy at a time when consumer inflation is at a record low, but may express caution about easing further as price risks still loom.

A agency poll last week showed 45 of 51 economists expect the RBI to cut the repo rate by 25 basis points to 7.00 percent, its lowest since May 2011. The RBI has already eased the policy rate by 75 bps so far this year.

But another rate cut may depend on how food prices impact consumer inflation starting in September, given India could be facing its driest year since 2009 as monsoon rains have fallen below their long-term average.

A favourable base effect seen in the previous two months is also expected to wane.

The RBI is also likely to err on the side of caution as US interest rates are expected to rise by the end of this year for the first time since 2006, potentially putting pressure on emerging market currencies, including the rupee.

1:00 pm Market Check
The 30-share BSE Sensex dropped 57.10 points to 25806.40 and the 50-share NSE Nifty declined 10.50 points to 7858. The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising 0.2 percent and 0.6 percent, respectively.

Tata Motors (-4 percent), Vedanta (-3 percent), Sun Pharma (-3 percent) and Infosys (-3 percent) were the big losers in the Nifty. Gainers included Dr Reddys Labs (5 percent), Idea Cellular (3 percent), Lupin (3 percent) and HUL (2 percent).

In sectoral performance as reflected by the respective indices, metals (-1.9 percent), IT (-0.9 percent), auto (-0.7 percent) and capital goods (-0.5 percent) were under pressure, while consumer durables (1.7 percent), healthcare (0.8 percent), bank (0.6 percent) and FMCG (0.4 percent) gained.

IDBI Bank (5 percent), DLF (5 percent), GMR Infra (3 percent), Wockhardt (3 percent) and Dewan Housing (3 percent) were the big winners in the midcap space. Other notable gainers included Bharat Electronics (2 percent), Petronet LNG (2 percent), Unitech (3 percent), Cadila Health (3 percent) and Jain Irrigation (3 percent).

European shares were weak in early trade. France's CAC was down 34 points at 4446, Germany's DAX was down 54 points at 9634, and UK's FTSE was down 32 points at 6076.

12:55 pm Market Update: The Sensex declined 82.22 points to 25781.28 and the Nifty fell 22.60 points to 7845.90. About 1281 shares have advanced, 1147 shares declined, and 123 shares are unchanged on the BSE.

12:40 pm Sebi on Commodities market: Taking charge of regulating the commodities derivatives trading, Sebi Chairman UK Sinha on Monday favoured allowing foreign portfolio investors in this market.

Without giving any specific timeframe, Sinha said Sebi's first priority would be to develop trust in the commodities market, after which it would focus on its development by allowing participation by banks and foreign portfolio investors (FPIs), among others, over a period of time.

"Sebi will focus on how prices and benchmark rates are fixed in commodity markets and also look at the possibility of having products like options and futures," he said at an event to formalise the merger of commodities markets regulator FMC (Forward Markets Commission) with the Securities and Exchange Board of India (Sebi).

12:20 pm Strides in News: Drug firm Strides Arcolab plans to raise up to Rs 1,500 crore through various market instruments.

"The Board of Directors of the company have approved the proposal to raise long term funds by way of issue of GDRs/ADRs /FCCBs/QIP or such other equity linked instruments as may be permissible for an amount up to Rs 1,500 crore including a green shoe option," Strides Arcolab said in a BSE filing.

It added: "The fund raising is subject to shareholders' approval and such other statutory approvals as may be required including that of Foreign Investment Promotion Board."

The market remained volatile in noon trade with the Nifty hovering around 7850 level. The Sensex slipped 26.54 points to 25836.96 and the Nifty dropped 1.05 points to 7867.45.

The broader markets consistently outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.5-0.8 percent. About 1312 shares have advanced against 970 shares declined on the BSE.

From the pharma pack, Dr Reddy's Labs surged over 5 percent after the company launched Nexium generic in the US. However, Sun Pharma slipped over 2 percent after the USFDA revoked its earlier approval of anti-epilepsy drug to SPARC on account of compliance issues at the Halol plant.

UltraTech Cement lost 2 percent after CREDAI NCR said they will not buy cement from the company as they alleged that cement companies have increased prices by 40 percent in the recent past. CREDAI NCR president said the region consumes 12 to 15 million tonnes of cement annually.

MCX gained 3 percent as Sebi formally taked over commodities segment post the merger of FMC with Sebi.

Banking stocks gained ahead of the crucial credit policy tomorrow.. In a CNBC-TV18 poll, 85 percent of respondents expect RBI governor Raghuram Rajan to cut rates by 25 bps.

Lupin, TCS, HUL, SBI and Axis Bank rose 1-3 percent while Infosys, Tata Motors, Wipro, Coal India, ONGC, Hero Motocorp, Tata Steel and Vedanta fell 1-3 percent.

11:40 am Market Expert: The market is expecting the Reserve Bank of India (RBI) to cut interest rates by 25 basis points tomorrow, and even if the RBI were to deliver that, any resulting rally will be short lived, says Pramod Gubbi, VP, Institutional Equities at Ambit Capital.

On the possible upside for the market from these levels, Gubbi says much will depend on the global factors at play.

If one were to leave aside global factors, corporate earnings are estimated to grow 5-8 percent this fiscal, and theoretically that will be the potential upside for the market, Gubbi says.

However, given the aversion of global investors to emerging markets in general, the price earning multiple they are willing to pay for Indian equities could shrink, and that may cap upsides.

11:20 am China growth woes: Profits earned by Chinese industrial companies declined 8.8 percent in August from a year earlier due to rising costs and persistent falling prices, official data showed today, adding to signs of weakness in the world's second largest economy

Also hurting firms was the stock market slump, which pushed down their investment returns while yuan fluctuation increased companies' financial costs in August, the National Bureau of Statistics (NBS) said.

During August, profits of industrial companies suffered the biggest annual fall since the NBS began monitoring such data in 2011.

For the first eight months of this year, profits were down 1.9 percent from the year-earlier period, according to the NBS.

11:00 am Market Check
The market continued to see rangebound trade with the Nifty moving in tight range of 7840-7880. Banking and select pharma stocks gained strength while index heavyweights like Infosys, Reliance Industries & HDFC declined.

The Sensex fell 25.47 points to 25838.03 and the Nifty plummeted 5.90 points to 7862.60. The market breadth was positive as about 1304 shares have advanced against 786 shares declined on the Bombay Stock Exchange.

Sun Pharma (-3 percent), Coal India (-3 percent), UltraTechCement (-2 percent) and Infosys (-2 percent) were the big losers in the Nifty. Other laggards in the index were HDFC (-1 percent),Reliance (-1 percent),ONGC (-1 percent) and BHEL (-1 percent).

Gainers included Dr Reddy's Labs (5 percent), Idea Cellular (3 percent), Lupin (3 percent) and Adani Ports (3 percent).

In sectoral performance as reflected by the respective indices, metals (-1.3 percent), IT (-0.4 percent), auto (-0.2 percent) and capital goods (-0.1 percent) were under pressure, while consumer durables (1.5 percent), bank (0.7 percent), healthcare (0.7 percent) and FMCG (0.4 percent) gained.   

IDBI Bank (6 percent), Dewan Housing (5 percent), DLF (4 percent), Unitech (3 percent) and Oriental Bank (3 percent) were the big winners in the midcap space. Other notable gainers included GMR Infra (3 percent), Reliance Infra (3 percent), Wockhardt (3 percent), Petronet LNG (3 percent) and Cadila Health (3 percent).   

The rupee was quoting at 66.05 to the dollar, up 10 paise over its previous close. Brent crude was trading at USD 48.54/barrel, down USD 0.38 or 0.8 percent over its previous close.

10:55 am Market Update: The Sensex rose 3.92 points to 25867.42 and the Nifty climbed 5.35 points to 7873.85. About 1299 shares have advanced, 723 shares declined, and 80 shares are unchanged on the BSE.

10:45 am Buzzing: Shares of Dr Reddy's Laboratories rallied more than 6 percent intraday on launching gastric ulcer drug in the US market.

"Dr Reddy's has launched Esomeprazole magnesium delayed-release capsules USP, 20 mg and 40 mg in the US market on September 25 following approval from US Food and Drug Administration," the drug major said in its filing.

Esomeprazole is therapeutic equivalent generic version of Nexium (owned by Astrazeneca AB Corporation).

The company said Nexium and generic had US sales of approximately USD 5.2 billion for most of recent 12 months ending in July 2015 according to IMS Health.

Esomeprazole is used in the treatment of gastroesophageal reflux disease (GERD) in adults and children ages 1 & older.

10:30 am FII View: Ridham Desai, Morgan Stanley says save for recent underperformance, India has delivered handsome gains since the autumn of 2013 versus emerging markets. He sees forthcoming government and RBI action crucial to retaining this outperformance.

According to him, Indian policymakers need to shift their attention from caring for macro stability to striving for growth, for India to retain its outperformance versus its peer growth.

Stronger growth for India depends on how the government pursues its investment program especially in infrastructure and how quickly & how much the central bank cuts interest rates, Desai says.

10:15 am FMC merger: The merger of two regulators, the Forward Markets Commission (FMC) and the Securities and Exchange Board of India (Sebi) marks radical change while regulating commodity futures market. Finance Minister Arun Jaitley, in his Budget speech, had announced the merger of FMC with the capital market regulator Sebi to strengthen the commodity futures market.

A unified regulator for commodities and capital markets will help streamline monitoring of commodity futures trading and curb wild speculations. In the wake of a Rs 5,500-crore payment crisis at the National Spot Exchange, FMC was brought under Finance Ministry in 2013.

Starting September 29, commodity brokers will need to increase their net worth and come under direct Sebi oversight.

10:00 am Market Check: The market is in consolidation mode ahead of RBI monetary policy to be held on September 29. The Sensex declined 93.83 points to 25769.67 and the Nifty fell 25.30 points to 7843.20.

Sun Pharma lost 3.5 percent after the USFDA revoked approval given to its subsidiary Sun Pharma Advanced Research Company (SPARC) for Elepsia XR, an antiepileptic drug.

Infosys, HDFC, Tata Motors, Coal India, Hero Motocorp and Vedanta dropped 1-2.5 percent. However, ICICI Bank, Lupin, SBI, Axis Bank, Dr Reddy's Labs, HUL, M&M, Cipla and Hindalco gained 1-2 percent.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.5 percent each. About 1013 shares have advanced, 658 shares declined, and 61 shares are unchanged on the BSE.

9:50 am Buzzing: Shares of Indian Hume Pipe Company  surged 17.35 percent after the company has bagged an orders worth Rs 1230.77 crore.

The orders are for Telangana Water Grid project in respect of Telangana Drinking Water Supply Projects (TDWSP) of Mahabubnagar and Nizamabad districts from rural water supply and sanitation department, Government of Telangana.

The first order is of Rs 415.47 crore for providing drinking water to habitations in Gadwal and Alampur constituencies from Jurala Project, Mahabubnagar District, under Segment-ll including operation and maintenance for 10 years. The project is to be completed within 18 months from the date of commencement.

The second order is of Rs 815.30 crore for providing drinking water to Balkonda, Armoor, Nizamabad, Kamareddy and part of Yellareddy constituencies from SRSP reservoir, Nizamabad district including operation and maintenance for 10 years. The project is to be completed within 24 months from the date of commencement.

9:35 am SPARC in news: Sun Pharma Advanced Research Rate cut, govt investments key to growth: Morgan Stanley

9:15 am Market Check
The market has started October series on a flat note Monday after losing 1.4 percent last week. The Sensex rose 41.93 points to 25905.43 and the Nifty gained 10.45 points at 7878.95. About 627 shares have advanced, 204 shares declined, and 48 shares are unchanged on the BSE.

TCS, Lupin, SBI, Cipla, HDFC Bank, Tech Mahindra, Idea Cellular and Adani Ports gained 1-2 percent. However, Tata Motors, Sun Pharma, Wipro, UltraTech Cement and Cairn India fell 1-2 percent.

The Indian rupee has opened marginally higher by 5 paise at 66.11 per dollar today against 66.16 Thursday.

Agam Gupta of Standard Chartered said, "There should be interest from importers and local government banks to buy USD on dips to 65.90 levels. Any upticks to 66.30 will attract interest from exporters to hedge their future dollar receivables."

He further added, "The market participants will keenly await the Reserve Bank of India (RBI) policy announcement tomorrow and we expect trade to be rangebound ahead of the RBI meet."

Global cues are mixed as the US markets closed mixed on Friday, pressured by a plunge in biotechs, and as investors digested Nike earnings and Fed chair Janet Yellen's remarks on a possible rate hike later this year.

The S&P 500 closed marginally lower as a 2.7 percent decline in health-care more than offset a 1.45 percent gain in financials. The Nasdaq Composite too closed down 1 percent.

Asian trade, meanwhile, started the week on a subdued note ahead of data from China. Hong Kong, Taiwan and South Korean markets are shut for the mid-autumn festival.

The US dollar hit its highest in over five weeks against a basket of major currencies on expectations of a Fed rate hike this year.