Sensex, Nifty fall for 3rd day; HUL, TCS, Tata Motors drag
14 October 2015
It was another consolidation session for the market. Equity benchmarks declined for third consecutive session Wednesday, dragged by technology, auto and FMCG stocks. The Nifty managed to hold 8100-mark, supported by banking & financials, oil and metals stocks. The 30-share BSE Sensex fell 66.87 points to 26779.66 and the 50-share NSE Nifty slipped 23.80 points to 8107.90. The BSE Midcap also declined 0.3 percent but Smallcap outperformed, up 0.3 percent.
Analysts remained positive on Indian equities despite current weakness due to Chinese growth concerns.
Adrian Mowat, JP Morgan says India remains the preferred market in a survey at brokerage's Emerging Markets Credit and Equity conference. There was much delight with the RBI's 50 bps repo rate cut, he says, adding the hope is that this is the start of a more sustained monetary stimulus.
HUL lost 1.85 percent after profit in September quarter falling 2.6 percent and slower growth in revenue (4.1 percent) despite good volume growth of 7 percent. "Environment continues to remain challenging. We saw negative price growth during the quarter," Harish Manwani, chairman says.
TCS also reacted to its earnings, falling 4.4 percent. Dollar revenue missed street expectations, growing 3 percent compared to forecast of 3.6 percent. CEO N Chandrasekaran says the company was witnessing 'weak spots' in the business and its constant currency growth could see a "gap of 1.5-2 percent...explained by softness" in certain areas of the business.
Tata Motors declined 2.4 percent. Jaguar Land Rover announced September auto sales after market hours today. Retail sales grew by 3 percent to 47,634 units year-on-year with China down 29 percent.
Lupin gained 2 percent after the pharma company has formed joint strategic alliance with Boehringer Ingelheim for co-marketing Linagliptin, a novel Dipeptidylpeptidase-4 (DPP-4) inhibitor in India.
Among others, HDFC, Reliance Industries, Hindalco and Tata Steel advanced 1-3 percent while ICICI Bank, Hero Motocorp, Coal India, NTPC and BHEL declined more than 1 percent.
In the broader space, DCB Bank plunged 20 percent after brokerages downgraded stock to sell due to new business strategy. Kotak says the strategy of doubling branches to 300 and increasing employees by 50-60 percent in next 12-14 months appears to be a very dangerous, unexpected and disappointing shift in their strategy of steady improvement in cost ratios, focusing on risk and improving return ratios. September quarter profit of the bank fell 10 percent.
Bharat Forge lost 4.6 percent after CLSA has downgraded the stock to sell from buy, citing weak operational outlook. It also slashed target price by 49 percent to Rs 745 from Rs 1,465 apiece as it feels valuations are unlikely to sustain. Despite recent stock correction, it still sees 20 percent downside.
The market breadth remained in favour of advances with ratio of 1502:1261 on the Bombay Stock Exchange.
IIFL launched a new app on Wednesday in an attempt to make trading easier for investors.
While many downloads were expected from metro cities, it were the non-metro regions which proved encouraging for the firm, says Aniruddha Dange, Chief Strategy Officer of IIFL.
The free-of-cost app makes the minutest market-related information accessible, he adds.
IIFL expects a million downloads by the year-end and hopes to convert significant users to loyal customers, he says.
On the market, he says street expectations have been very high from the earnings season and that monetary policy has benefited the market. He is positive on the market in the medium-term.
3:30 Market closing: The market has ended at lower levels as corporate India continues to report September quarter earnings. The Sensex closed down 66.87 points or 0.2 percent at 26779.66 and the Nifty was down 23.80 points or 0.3 percent at 8107.90. About 1506 shares have advanced, 1261 shares declined, and 126 shares are unchanged.
Hindalco, Lupin, HDFC, Tata Steel and Axis Bank were top gainers in the Sensex. Among the losers are TCS, HUL, Tata Motors, BHEL and ICICI Bank. 3:10 pm Import duty hike on wheat: The Centre may raise import duty on wheat to 25 percent from the current 10 percent to restrict overseas purchases when domestic stocks are surplus.
Last month, the government imposed a 10 percent import duty on wheat -- for the first time since 2006 -- after private flour millers started importing from Australia amid sluggish supply of high-protein wheat varieties used to make pasta and pizzas.
Millers are resorting to imports despite surplus stocks of other varieties of wheat with FCI, the nodal agency for foodgrain procurement and distribution.
"The Food Ministry has proposed raising import duty on wheat to 25 percent from 10 percent to cut imports and protect the domestic market. The matter will be discussed at a meeting with the revenue department tomorrow," a senior government official told agency.
3:05 pm ZEEL results: Zee Entertainment Enterprises (ZEEL) has posted a net profit of Rs 246.3 crore in the July-September quarter. Revenue, during the quarter, was at Rs 1384.9 crore.
This is below-street estimates as net profit of ZEEL was seen up 11.1 percent at Rs 253 crore in September quarter compared to Rs 227.6 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, the media firm was expected to see net revenue up 22.1 percent to Rs 1364 crore from Rs 1117.8 crore on annual basis.
However, advertising revenue has come in better-than-expected, jumping 35 percent to Rs 843.3 crore on annual basis. According to analysts polled by CNBC-TV18, ad revenue was expected to gain 26.5 percent on an annual basis due to sales traction in new channel &TV.
2:58 pm HUL earnings: Hindustan Unilever (HUL) has disappointed street with second quarter profit falling 12.8 percent year-on-year to Rs 862 crore from Rs 988 crore.
Revenue increased 4.1 percent to Rs 7,955 crore from Rs 7639 crore during the same period. Volume growth came in at 7 percent.
CNBC-TV18 poll had expected profit at Rs 1038 crore on revenue of Rs 8031 crore.
2:40 pm Govt's MoU with Mozambique: Government today approved an agreement between India and Mozambique for technical bilateral cooperation and investment promotion in the area of new and renewable energy.
"The Union Cabinet chaired by Prime Minister Narendra Modi has approved MoU between the Ministry of New and Renewable Energy, India and Mozambique," an official press release said.
According to the statement, the MoU was signed between the Ministry of New and Renewable Energy and Mozambique's Ministry of Mineral Resources and Energy on August 5 during the visit of Mozambique President Filipe Nyusi to India.
The Memorandum of Understanding (MoU) will help in strengthening bilateral cooperation between the two countries. India has set a target of 175 GW of renewable energy capacity by 2022, which includes 100 GW of solar power, 60 GW of wind power, 10 GW of biomass-fired power and 5 GW of small hydro power.
2:30 pm CCEA on NH projects: Government today approved one-time financial assistance for "physically incomplete and languishing" national highway (NH) projects in the country.
"The Cabinet Committee on Economic Affairs (CCEA) today approved a one time fund infusion to revive and physically complete languishing NH projects," Communications and IT Minister Ravi Shankar Prasad said after the Cabinet meeting.
The NH projects where construction has been 50 percent completed till November 2014 will be eligible for this one time financial assistance, the Minister said.
"This will be a tripartite agreement between the funding agency, the NHAI and the builder," he added. The highways sector is struggling to roll out stuck projects worth Rs 3.8 lakh crore but the developers in many cases are now shying away.
Road Transport and Highways Secretary Vijay Chhibber has said last week that banks which have been "happily over- financing" road projects without necessary due-diligence were also to be blamed for this problem and there are nearly 70 projects that have got funding at escalated costs.
After steel sector, roads account for the second largest amount of bad loans for the banking sector. Chhibber had said that the problem compounded because banks released large upfront amounts to the developers who used the money in other sectors without worrying about delays in the road projects.
2:15 pm Diageo in news: Drinks group Diageo has agreed the USD 552 million sale of its major wine interests to Treasury Wine Estates, it said on Wednesday, as part of its drive to shed non-core assets.
It said the deal is for its United States based Chateau and Estate Wines and the British based Percy Fox businesses.
Diageo plans to use net proceeds of about 320 million pounds (USD 489 million) after tax and transaction costs to repay borrowings.
The deal, which is subject to regulatory approval, is expected to complete around the end of the calendar year.
2:00 pm Market Check
The market continued to be rangebound in afternoon trade despite weakness in European markets. France's CAC, Germany's DAX and Britain's FTSE fell 0.6-1 percent on concerns over Chinese economy.
The Sensex gained 11.24 points at 26857.77 and the Nifty rose 0.95 points to 8132.65. The market breadth remained positive as about 1481 shares have advanced against 1123 declining shares on the BSE.
The rupee gained further, appreciating 14 paise to 65.04 a dollar after falling 43 paise in previous session.
HDFC, Reliance Industries, Lupin, Axis Bank, ONGC, GAIL, Tata Steel, Vedanta and Hindalco were biggest gainers on Sensex, up 1-4 percent.
TCS remained under pressure, down 4 percent after missed expectations on dollar revenue that increased 3 percent in Q2 against forecast of 3.6 percent. ICICI Bank, Tata Motors, Hero Motocorp and Coal India lost over a percent.
1:55 pm Results: TTK Prestige, the kitchen appliances manufacturer, has beat analysts' expectations on Wednesday with second quarter profit rising 21.4 percent to Rs 34 crore from Rs 28 crore in the year-ago period. In corresponding quarter, profit was boosted by exceptional gains of Rs 1.85 crore.
Revenue increased 10.2 percent to Rs 421 crore during July-September quarter compared to Rs 382 crore in same period last year. Profit was estimated at Rs 30 crore on revenue of Rs 407 crore for the quarter, according to a CNBC-TV18 poll.
1:45 pm Bet on India? Despite the global slowdown, India can benefit from the low commodity prices to improve manufacturing and imports, Thomas White, Chairman and Chief Information Officer (CIO) at Thomas White International said.
In an interview with CNBC-TV18, White said increased exports and foreign investments will add to the Indian growth story.
White believes Make in India will benefit the manufacturing sector. He sees entry of Foxconn into the country a positive sign for growth. Foxconn will help develop the manufacturing sector, he said adding that China's growth was mainly driven by manufacturing.
White prefers developing markets like Europe, Japan and US over India and China.
1:30 pm Buzzing: After Jubilant Foodworks was knocked off as a sentimental downmove rising on Yum! Brands weak September quarter earnings, GOldman Sachs is bullish on the stock. The brokerage says recent correction offers attractive entry point while tailwinds continue. It retains buy rating on the company which operates Domino's Pizza and Dunkin' Donuts has an unchanged target price
of Rs 1958 per share.
Shares of Jubilant Foodworks jumped over 1 percent intraday.
The market continues to remain sluggish as the Sensex is down 45.30 points or 0.2 percent at 26801.23. The Nifty is down 17.80 points or 0.2 percent at 8113.90. About 1382 shares have advanced, 1153 shares declined, and 126 shares are unchanged.
Hindalco, Tata Steel, ONGC, GAIL and Lupin are top gainers while TCS, Hero MotoCorp, ICICI Bank, Tata Motors amd Coal India are among losers in the Sensex.
HUL is down ahead of announcing Q2 results.
Gold extended gains to a fourth straight session on Wednesday, hitting a fresh three-month high, bolstered by a weaker dollar and comments from Federal Reserve officials cautioning against a rate hike this year.
The bullion has gotten a boost since the weak US nonfarm payrolls report earlier this month that prompted the market to shift expectations of a US rate hike to 2016 and sell the dollar.
12:58 pm Market Update: Benchmark indices were little changed over the last half an hour of trade. The Sensex fell 50.15 points to 26796.38 and the Nifty declined 17.80 points to 8113.90.
TCS (-4 percent), Cairn India (-2 percent), Zee Entertain (-2 percent) and Tech Mahindra (-2 percent) were the big losers in the Nifty. Other laggards in the index were PNB (-1 percent), BHEL (-1 percent), HUL (-1 percent) and Dr Reddy's Labs (-1 percent). Gainers included Hindalco (4 percent), Vedanta (2 percent), Tata Steel (2 percent) and ACC (1 percent).
DCB Bank (-20 percent), JSW Energy (-3 percent), Shree Cements (-3 percent), Power Finance (-3 percent) and Emami (-3 percent) were the big losers in midcap space. Other notable laggards included Glenmark (-2 percent), IDBI Bank (-2 percent), Union Bank (-2 percent), Havells India (-2 percent) and Divis Labs (-2 percent).
The rupee was quoting at 65.07 to the dollar, up 11 paise over its previous close.
12:50 pm Earnings: TTK Prestige, the kitchen appliances manufacturer, has beat analysts' expectations on Wednesday with second quarter profit rising 21.4 percent to Rs 34 crore from Rs 28 crore in the year-ago period. In corresponding quarter, profit was boosted by exceptional gains of Rs 1.85 crore.
Revenue increased 10.2 percent to Rs 421 crore during July-September quarter compared to Rs 382 crore in same period last year.
Profit was estimated at Rs 30 crore on revenue of Rs 407 crore for the quarter, according to a CNBC-TV18 poll.
During the same period, other income doubled to Rs 2.17 crore from Rs 1.11 crore while finance cost declined to Rs 0.7 crore from Rs 1.05 crore.
12:45 pm Lupin's tie up: Drug majors Lupin and Boehringer Ingelheim announced a strategic alliance to co-market anti-diabetes drug linagliptin in India.
"According to the agreement, Lupin will market and sell linagliptin under a separate brand name Ondero (monotherapy) and Ondero Met (fixed-dose combination with metformin) which will be promoted by Lupin's 400 strong dedicated Diabetes speciality field force," Lupin said in a BSE filing. Linagliptin, is a novel Dipeptidylpeptidase-4 (DPP-4) inhibitor.
Boehringer Ingelheim will continue to sell its linagliptin under the brand names Trajenta (monotherapy) and TrajentaDuo (fixed-dose combination with metformin) through their existing sales force and network.
12:40 pm Europe opens: European equities opened lower, following a jittery lead set in Asia overnight and Wall Street on Tuesday as concerns over the Chinese economy continue to weigh on markets.
All major indices were in negative territory.
12:30 pm Buzzing: Shares of Intellect Design Arena climbed 4.6 percent to hit a record high of Rs 211.70 intraday after ace investor Rakesh Radheshyam Jhunjhunwala raised stake in the company.
Jhunjhunwala has purchased 2.24 percent equity stake in the company during July-September quarter. It was in addition to 3.73 percent stake already held in his wife's name Rekha Rakesh Jhunjhunwala, as per latest shareholding data available on exchanges. He also upped his stake in Polaris Consulting , a parent company of Intellect, to 4.99 percent from 4.74 percent during the quarter.
ICICI Prudential Balanced Advantage Fund also picked up 1.18 percent stake in the software company while LSV Emerging Market Equity Fund LP exited by selling 1.22 percent equity stake.
Reliance Capital through its three funds has 7.58 percent shareholding as of September 2015.
Promoter and promoter group have increased their shareholding marginally to 32.20 percent in Q3CY15 from 32.02 percent in Q2CY15.
12:15 pm Movers and Shakers: TCS topped the selling list on Sensex, down 4 percent post lower-than-expected revenue in Q2.
ICICI Bank, Tata Motors and Coal India were down more than 1 percent while Hindalco, Tata Steel and Vedanta surged 2.5-4 percent followed by Infosys and Lupin with 1 percent upside.
12:00 pm Market Check
The market remained lacklustre in noon trade. Metals, select banks and pharma stocks supported market while auto and FMCG stocks lost ground.
The 30-share BSE Sensex declined 13.04 points to 26833.49 and the 50-share NSE Nifty slipped 10.30 points to 8121.40. The BSE Midcap also fell 0.2 percent but Smallcap outperformed with half a percent gain.
The market breadth continued to be positive as about 1477 shares have advanced against 891 declining shares on the Bombay Stock Exchange.
The wholesale price index (WPI) came in at -4.54 percent, improving somewhat from -4.95 percent in August, government data released today showed. A CNBC-TV18 poll of economists had forecast WPI to come in at -4.4 percent. The September contraction was led by continuing weakness in prices of fuel and power (down 17.7 percent vessus 16.5 percent last month) as well as vegetable (down 9.45 percent versus 21.21 percent).
11:55 am Analysts on TCS: Shares of Tata Consultancy Services fell 4 percent intraday on Wednesday after it announced September quarter results last evening. It reported almost in-line Q2 earnings, with net profit jumping 6.1 percent to Rs 6055.2 crore while revenue grew by 5.8 percent quarter-on-quarter to Rs 27,165 crore. Profit and volume growth met analysts' expectations but revenue missed forecast for the fifth consecutive quarter. Lower other income and higher tax expenses capped bottomline growth.
Brokerages are still bullish on the stock. Most analysts are, however, concerned about its Japan business, insurance platform Diligenta and high hiring guidance.
11:45 am Buzzing: Shares of Bharat Forge (BFL) have fallen 6 percent intraday after CLSA has downgraded the stock to sell from buy, citing weak operational outlook. The brokerage also slashed target price 49 percent to Rs 745 from Rs 1,465 apiece as it feels valuations are unlikely to sustain. Despite recent stock correction, it still sees 20 percent downside. In last six months, the stock has corrected more than 30 percent, especially after consistent fall in new truck orders in the US.
11:30 am Result poll: Net profit of Zee Entertainment Enterprise is likely to rise 11.1 percent at Rs 253 crore in September quarter compared to Rs 227.6 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, the media firm, which will announce Q2 earnings on October 14, may see net revenue increasing 22.1 percent to Rs 1364 crore from Rs 1117.8 crore on annual basis. During the period, margins may decline 420 basis points at 24.5 percent against 28.7 percent year-on-year due to increased content and operational costs of the new channels. The management has indicated that it will improve sequentially.
The market is completly flat but the Nifty has managed to hold 8100 level. The 50-share index is up 1.55 points at 8133.25 and the Sensex is up 4.07 points at 26850.60, and the Nifty About 1356 shares have advanced, 773 shares declined, and 97 shares are unchanged.
Hindalco, Vedanta, Tata Steel, Lupin and Infosys are gainers while TCS, Tata Motors, ICICI Bank, Hero MotoCorp and Cipla are among losers.
Aviation stocks are seeing buying interest once again with both SpiceJet and Jet Airways gaining 3-5 percent.
Crude oil futures slipped, extending losses from the prior session when an International Energy Agency report said the market would stay oversupplied for at least another year. A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC members maintain near-record output, said the International Energy Agency, even as low prices curb supply outside the producer group.