Sensex, Nifty end lower amid volatility: Infosys rises 4%

14 Jan 2016

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3:30 pm Market closing: After a tumlutous ride the market ended lower. The Sensex ended down 81.14 points or 0.3 percent at 24772.97 and the Nifty closed down 25.60 points or 0.3 percent at 7536.80. About 829 shares have advanced, 1854 shares declined, and 171 shares are unchanged.

Infosys, Lupin, Dr Reddy's Labs, Cipla and Coal India were top gainers in the Sensex. Axis Bank, Tata Steel, BHEL, Tata Motirs and Hindalco are losers.

3:10 pm Earnings: Software services provider Mastek disappointed street with third quarter earnings on Thursday. Net profit plunged 70 percent to Rs 0.8 crore during October-December quarter compared to Rs 2.66 crore in preceding quarter, impacted by sluggish operational performance.

Revenue increased 4.7 percent to Rs 137.8 crore during the quarter against Rs 131.6 crore in quarter ended September 2015.

Operating profit (earnings before interest, tax, depreciation and amortisation) fell 95 percent sequentially to Rs 0.2 crore and margin contracted by 294 basis points to 0.16 percent in quarter gone by.

2:55 pm Market Update: Equity benchmarks continued to be volatile with the Sensex down 47.07 points to 24807.04 and the Nifty down 19.50 points to 7542.90.

Infosys open interest increased 13.4 percent and it has seen huge long build-up post strong earnings.

2:40 pm Europe extends losses: European markets traded lower amid a sell-off in Asian stocks and as oil prices fell to a 12-year low.

In addition, reports of explosions and gunfire in Jakarta in Indonesia have spooked markets in Asia and are weighing on investor sentiment.

France's CAC, Germany's DAX and Britain's FTSE declined 2 percent each.

2:20 pm ICICI Bank in news: ICICI Bank on Thursday said it has become the first lender in the private sector to cross the milestone of Rs 1 lakh crore mortgage loans.

"ICICI Bank today announced that it crossed the milestone of disbursing mortgage loans of over Rs 1 lakh crore, a first among private sector banks in the country," it said in a statement.

The bank has also launched two new digital initiatives to simplify and quicken the assessment for new home loans as well as disbursements linked to the construction stage of projects.

2:00 pm Market Check
The market continued to consolidate after sharp recovery from day's low. The Sensex gained 17.35 points at 24871.46 and the Nifty declined 3.40 points to 7559.

The next few months can be highly volatile for the Indian equity markets despite economy getting better domestically, says Amit Khurana, Co- Head Equities and Head of Research, Dolat Capital.

Khurana says his near-term stance on market remains cautious on the back of worsening global situations and prefers being more stock-specific rather than considering macro factors alone.

Shares of Tata Motors, Axis Bank, BHEL and Hindalco Industries topped selling list, down 2-3 percent. Tata Steel slumped 3.5 percent after the global rating agency S&P downgraded the company to BB-, a low investment grade rating, over persistent subdued operating performance amid subdued demand and low steel prices.

Infosys rallied 6 percent after its third quarter earnings surprised street. Profit increased 2 percent and dollar revenue guidance raised to 12.8-13.2 percent in constant currency from 10-12 percent earlier.

1:55 pm 1:52 pm Market check: The Sensex is up 9.11 points at 24863.22, and the Nifty slips 5.45 points at 7556.95. About 841 shares have advanced, 1704 shares declined, and 161 shares are unchanged. Infosys is still up 6 percent.

1:45 pm HUL Poll: Hindustan Unilever is likely to report tepid weak December quarter results. Its Q3 net profit is seen down 14 percent at Rs 1073 crore from Rs 1252 crore in corresponding quarter last fiscal. Reported net profit in comparable quarter had an exceptional gain. Adjusted profit after tax is seen up 8.3 percent at Rs 1073 crore in Q3 versus Rs 990 crore in year-ago period. Its profit is unlikely to grow in line with margins due to higher taxes and lower other income.

According to a CNBC-TV18 poll, revenue is likely to grow 5.7 percent at Rs 8220 crore  from Rs 7774 crore (year-on-year) while volume growth is seen at 6-7 percent. HUL had taken a rural distribution clean up exercise during the quarter which may impact volume growth for the Q3. A 1.5 percent price deflation and promotion is also expected to be seen in the quarter.

1:30 pm Reaction to Infosys Q3: Against a particularly weak market backdrop, Infosys came out with a shimmer of hope, posting a stupendous set of third quarter results , only two days after rival Tata Consultancy Services (TCS) posted a weak set of earnings. The company beat analyst estimates on each of the key parameters: revenues, EBIT and net profit. Reacting to the numbers, Nilesh Shah, MD and CEO of Envision Capital, dubbed the performance as "industry leading, peer beating", something that has happened after a long time. "The company seems to have fixed its leadership issue and changes made by the management are taking effect," Shah told CNBC-TV18.

The market continues to rise marginally. The Sensex is up 68.30 points or 0.3 percent at 24922.41 and the Nifty is up 14.05 points or 0.2 percent at 7576.45. About 895 shares have advanced, 1588 shares declined, and 148 shares are unchanged.

Infosys, Lupin, Adani Ports, Dr Reddy's Labs and Bharti Airtel are top gainers while Tata Steel, Axis Bank, Tata Motors, Hindalco and Hero MotoCorp are losers in the Sensex.

Deflationary trend eased in December with WPI inflation moving up to (-)0.73 percent as food articles, mainly vegetables, turned costlier. The Wholesale Price Index-based inflation has been rising for the last four months and was (-)1.99 percent in November. In December 2014, it was (-)0.50 percent.

This is the 14th straight month since November 2014 when the wholesale inflation has remained in the negative zone. Food inflation, however, shot up to 8.17 percent in December as against 5.20 percent in the previous month. Inflation in pulses and onion stood at 55.64 percent and 25.98 percent, respectively.

12:59 pm Market recovers: Equity benchmarks rebounded with the Sensex rising 34.15 points to 24888.26 and the Nifty up 5.10 points to 7567.50 led by short covering.

Infosys jumped 6.5 percent followed by Lupin (up 2 percent) and Reliance Industries (up 0.15 percent).

The market breadth also turned better compared to morning. About two shares declined for every share advancing on the Bombay Stock Exchange, which was 1:10 (advance:decline) in morning.

12:50 pm Buzzing: Shares of Tata Steel slumped over 3 percent after the global rating agency S&P downgraded the company on weak operating performance.

Standard & Poor's (S&P) yesterday downgraded steel major Tata Steel to 'BB-', a low investment grade rating, over persistent subdued operating performance amid subdued demand and low steel prices.

12:40 pm RCom-Sistem deal: Reliance Communications (RCom) said stock exchanges BSE and NSE gave their go-ahead to its deal to acquire Russian conglomerate Sistema's Indian telecom unit, Sistema Shyam Teleservices Ltd (SSTL).

"We wish to inform you that we have received observation letter from BSE Ltd and National Stock Exchange of India Ltd (NSE)," Reliance Communications said in a BSE filing.

It further said, "The company and SSTL are proceeding to file necessary application with the Bombay High Court and Rajasthan High Court respectively for approval of the scheme."

In November, India's fourth-largest telecom operator RCom announced acquisition of Sistema's Indian telecom unit in an all-stock deal that will create an operator with 118 million subscribers.

12:20 pm Market Expert: One of the earliest analysts to turn cautious on equity markets, Saurabh Mukherjea, CEO - Institutional Equities at Ambit Capital, is still sticking out his neck and forecasting Sensex to grind lower to 22,000 -- a call that attracted some criticism when it was made last year.

"Sensex 22,000 is where we become constructive on India again," Mukherjea told CNBC-TV18 in an interview, adding that he expects GDP growth to slow in the third quarter, bogged down by slowing bank credit.

12:00 pm Market Check
The market trimmed losses in noon trade following short covering. The 30-share BSE Sensex fell 105.76 points to 24748.35 and the 50-share NSE Nifty declined 37.60 points to 7524.80.

The broader markets slipped 0.8 percent. The market breadth remained weak, though it turned better compared to opening. About three shares declined for every share advancing on the Bombay Stock Exchange.

WPI inflation for December stood at negative 0.73 percent compared to negative 1.9 percent in preceding month.

Infosys continued to support the market, trading with high volumes post strong numbers in third quarter. The stock surged 4.7 percent as quarterly profit increased 2 percent and full year dollar revenue guidance increased to 12.8-13.2 percent in constant currency from 10-12 percent earlier.

Among others, Lupin and Dr Reddy's Labs gained 1 percent each.

11:30 am Market outlook: While the future of global markets looks uncertain, one could see a relief rally in the short-term, believes CNBC-TV18's Consulting Editor Udyan Mukherjee. However, he doesn't expect a 2008-like situation in 2016. Despite the expected relief rally, Mukherjee advises not to be in a hurry to buy in the current scenario. He is bearish on market in the medium-term and says that the recent sell-off in midcaps, which have been a safe haven, is worrisome.

Mukherjee believes that Infosys is certainly a 'stock to own' in the IT sector in the near-term. While Infosys has managed to overcome its fundamental issues in past few quarter, its competitor TCS is currently struggling with cyclical issues, he says.

The market has picked up pace marginally. The Sensex is down 147.90 points or 0.6 percent at 24706.21, and the Nifty down 49.15 points or 0.6 percent at 7513.25. About 485 shares have advanced, 1775 shares declined, and 105 shares are unchanged.

Infosys, Lupin, Dr Reddy's and TCS are top gainers while Tata Steel, Tata Motors, Hindalco, Axis Bank and L&T are among losers in the Sensex.

The rupee fell to its weakest since September 2013, when the country was still in the midst of its worst market turmoil in more than two decades, tracking falls in most Asian currencies against the dollar as oil prices plunged.

The falls prompted the Reserve Bank of India to sell dollars through state-owned banks to curb the rupee's decline.

That was the weakest since the rupee hit a record low of 68.85 in August 2013 when the country was suffering from its worst market turmoil since the 1991 balance of payment crisis.

10:40 am Oil & gas projects: Oil and gas projects worth USD 380 billion have been postponed or cancelled since 2014 as firms slash costs to survive the oil price crash, including USD 170 billion of projects planned between 2016 and 2020, energy consultancy Wood Mackenzie said.

Crude oil prices have fallen by 70 percent since mid-2014 to just over USD 30 per barrel as soaring global production leaves hundreds of thousands of barrels a day without a buyer, while demand - especially in once-booming Asia - is slowing markedly.

Oil and gas firms were being forced into survival mode as oil prices fell to levels last seen in 2004, Wood Mackenzie (WoodMac) said in a report today.

10:20 am Asia update: Explosions and gunfire in central Jakarta sent Indonesia's stocks tumbling. Reuters said, citing eyewitnesses, at least six explosions were heard and an ongoing gunfight has left three dead.

The Jakarta composite fell to a session low of 4,477.67 before retracing some losses to trade down 1.28 percent. The dollar-rupiah pair went up 0.72 percent at 13,920 on news of the explosions.

Bank Indonesia is expected to announce its monetary policy decision later today.

10:00 am Market Check
There is no respite in market selling even after Infosys surprised street with a firm December quarter earnings. The Sensex is down 308.86 points or 1 percent at 24545.25 and the Nifty still is 101.15 points or 1 percent at 7461.25. About 253 shares have advanced, 1758 shares declined, and 82 shares are unchanged.

Infosys is up 5 percent and only green stock in the Sensex. Tata Steel, Tata Motors, Hindalco, Axis Bank and L&T are major laggards.

Infosys' third quarter earnings beat analysts' expectations with consolidated profit rising 1.94 percent sequentially to Rs 3,465 crore and revenue growing 1.7 percent to Rs 15,902 crore. Dollar revenue for the quarter increased 0.6 percent to USD 2,407 million from USD 2,392 million on sequential basis and 1.1 percent in constant currency. Infosys not only surprised analysts with October-December quarter earnings, but also with its full year guidance and attrition rate.

The software services exporter revised dollar revenue growth guidance upwards to 8.9-9.3 percent from 6.4-8.4 percent while maintained constant currency dollar revenue growth guidance at 10-12 percent for FY16.

9:55 am International market outlook: Despite the market focus on an oil supply surplus, demand side pressures are also hurting prices, as world trade growth slows, a top HSBC economist said on Thursday.

"You have a situation where emerging markets in general are extremely weak, that in turn is causing commodity prices to decline rapidly, including oil prices, so rather than saying lower oil prices are a stimulus for the commodity consuming parts of the world, I think you should see lower oil prices as a symptom of weakness in global demand," HSBC's senior economic advisor Stephen King told CNBC.

Oil prices, already at 12-year lows, extended their decline in Asian hours, with both US WTI around USD 30.50 a barrel while Brent crude has plunged to a fresh 12-year low below USD 30 a barrel.

9:45 am Market check: Even after strong Infosys results, the market seems to be unmoved. The Sensex is down 229.24 points or 0.9 percent at 24624.87 and the Nifty slips 80.75 points or 1 percent at 7481.65. About 252 shares have advanced, 1615 shares declined, and 65 shares are unchanged.

Infosys is up 4.5 percent. Tata Steel is down 5 percent while Tata Motors, Hindalco, Axis Bank and L&T.

9:35 am Buy-back? Homegrown auto major Tata Motors plans to buy back non-convertible debentures (NCDs) aggregating Rs 450 crore ahead of their scheduled maturity as part of its plans to restructure debt.

A meeting of the board of directors is scheduled to be held on January 18 to consider and approve buyback of unsecured NCDs of two tranches, the company said in a BSE filing.

 The first tranche of unsecured NCDs totaling Rs 200 crore is due to mature on November 30, 2018, while the second tranche of Rs 250 crore is due to mature on May 28, 2019, it added.

9:25 am Infosys Q3 surprises: Infosys' third quarter earnings beat analysts' expectations with profit rising 1.94 percent to Rs 3,465 crore and revenue growing 1.7 percent to Rs 15,902 crore Q-o-Q.

Dollar revenue for the quarter increased 0.6 percent to USD 2,407 million from USD 2,392 million on sequential basis.

Infosys revised dollar revenue growth guidance upwards to 8.9-9.3 percent from 6.4-8.4 percent while maintained constant currency dollar revenue growth guidance at 10-12 percent for FY16.

Volume growth stood at 3.1 percent quarter-on-quarter. Attrition rate declined to 18.1 percent during the quarter compared to 19.9 percent in preceding quarter

The market has opened sharply lower following global turmoil after crude fell below USD 30 a barrel. The 30-share BSE Sensex lost 266.93 points or 1.07 percent to 24587.18 and the 50-share NSE Nifty declined 85.90 points or 1.14 percent to 7476.50.

The market breadth was pathetic as about nine shares declined for every share advancing on the Bombay Stock Exchange.

Tata Steel plunged 4.57 percent after S&P downgraded the stock to 'BB-', a low investment grade rating, over persistent subdued operating performance amid subdued demand and low steel prices. Axis Bank, SBI, Tata Motors, BHEL, Bank of Baroda and PNB were down 2.5-3 percent. However, ITC gained.

The Indian rupee declined to 67.04 per dollar mark in the opening trade, the level it saw last on December 15, 2015. The euro regained its footing against the US dollar as risk aversion returns. The yen also trimmed its losses against the dollar. The US dollar gained against the commodity currencies.

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