Sensex ends 291 points higher, Nifty at 7435; Wipro, ITC fall
19 January 2016
3:30 pm Market closing: The market has ended higher snapping four-day of loss. The Sensex closed up 291.47 points or 1.2 percent at 24479.84, and the Nifty was up 84.10 points or 1.1 percent at 7435.10. About 1730 shares have advanced, 947 shares declined, and 146 shares are unchanged.
Axis Bank, Adani Ports, Tata Motors, L&T and ICICI Bank were top losers while Wipro, M&M, ITC, Coal India and Maruti.
2:51 pm Market Update: Equity benchmarks continued to see uptrend. The Sensex rose 255.39 points or 1.06 percent to 24443.76 and the Nifty climbed 72.45 points or 0.99 percent to 7423.45.
About 1632 shares have advanced, 969 shares declined, and 143 shares are unchanged on the BSE.
2:40 pm IEA sees oil fall: The International Energy Agency warned today that a further drop in oil prices is likely as supply continues to exceed demand, placing "enormous strain" on the ability of the oil system to absorb it efficiently.
Brent crude futures have fallen to a 13-year low, trading below USD 29 a barrel and US crude futures are also hovering around $29 a barrel. Standard Chartered has said prices could go as low as USD 10 a barrel while Goldman Sachs has said it could fall to USD 20.
2:20 pm ITC in News: Diversified group ITC 's instant noodles brand Yippee is inching closer to become a Rs 1,000- crore brand, making the most out of the controversy that hit rival Nestle's Maggi.
"Sunfeast YiPPee! as a brand is now in its fifth year post the national rollout... We are proud to say that Yippee Noodles is poised to enter the Rs 1,000 crore club in the ITC Foods stable," ITC, Divisional Chief Executive, Foods Division V L Rajesh told PTI.
Explaining Yippee's growth pre- and post-Maggi ban, he said it was "growing at more than 40 per cent before the controversy broke out... (in June 2015), with all the competitors in the market". "The controversy and confusion that prevailed adversely affected the whole industry.
2:00 pm Market Check
Equity benchmarks maintained strong uptrend in afternoon trade following rally in global peers, supported by index heavyweights Reliance Industries, L&T and ICICI Bank.
The 30-share BSE Sensex surged 282.00 points or 1.17 percent to 24470.37 and the 50-share NSE Nifty rose 81.50 points or 1.11 percent to 7432.50. The BSE Midcap and Smallcap indices spiked 1.5 percent each.
The market breadth was also positive as about two shares advanced for every share declining on the Bombay Stock Exchange.
Larsen & Toubro, Tata Motors, Axis Bank and Adani Ports topped buying list on Sensex, up more than 4 percent followed by ICICI Bank and Bharti Airtel with 3 percent upside.
Reliance Industries, the leading contributor on Sensex, went up 2 percent ahead of earnings (which are expected to be strong). A CNBC-TV18 poll sees 6 percent sequential growth in profit led by refining business.
1:50 pm Drug pricing: Drug prices may come down sharply in the coming days as government is likely to cap the trading margin on medicines at 35 percent.
Chemists and wholesalers are charging margins as high as 2000-3000 percent in some medicines. Therefore, there is a huge difference between the costing of medicine to retailer and its selling price.
It needs to be checked, a senior government official told PTI. "We have came to the conclusion that to check this irrational margin...we have to put a cap. Now we are looking at what levels it should be done. The committee under Department of Pharmaceuticals (DoP) has proposed to cap the margin at 35 percent. We are looking into that also," the official added.
1:30 pm Market outlook: In the past few weeks a lot of smart money has flown (back) to US treasury due to market concerns like deflation and growth crisis, which have taken hold of the entire world, says Nandita Parker of Karma Capital. Amidst the tensions, India does not remain untouched by the same. Despite the needful in terms of government spending and higher interest rates, investors are confused about the stimulus measures in both fiscal and monetary policies, Parker tells CNBC-TV18. Not just this, the market hasn't taken cognizance of the fact yet that India's nominal Gross Domestic Product (GDP) growth is lower than the real GDP growth. She is of the view that there is a need to recalibrate the earnings expectations and further expects a lower earnings cycle and a de-rating in fast moving consumer goods (FMCG) sector. Markets are due for a snap-back rally, she says.
The market continues to see some buying after severe cuts in January. The Sensex is up 299.74 points or 1.2 percent at 24488.11 and the Nifty is up 91.45 points or 1.2 percent at 7442.45.About 1642 shares have advanced, 829 shares declined, and 145 shares are unchanged.
Axis Bank, Adani Ports, Tata Motors, L&T and Bahrti Airtel are top gainers while Coal India, Maruti, Wipro, M&M and TCS are major losers in the Sensex.
Cheap oil has become too much of a good thing for global equities judging by the way the two markets have tanked since the start of the year, with investors becoming more alarmed by the deflationary effects of crude below USD 30 a barrel. Crude has been on a downward spiral for the last 1-1/2 years, losing 75 percent of its value, but the latest spin towards the plughole late last year has sucked stocks down with it.
The recovery in the United States is looking drawn out, and US corporates could have entered an earnings recession in the fourth quarter of 2015.
12:58 pm Market Update: Equity benchmarks gained further in afternoon trade following positive global cues. The Sensex rose 345.26 points or 1.43 percent to 24533.63 and the 50-share NSE Nifty climbed 103.90 points or 1.41 percent to 7454.90.
Reliance Industries, ICICI Bank, L&T, Axis Bank, Tata Motors, Adani Ports, SBI and Bharti Airtel topped buying list on Sensex, up 2-5 percent.
12:40 pm Boardroom: HCL Tech has recorded broad-based growth, is the word coming in from Anant Gupta, CEO of HCL Technologies; while Anil Chanana, the CFO says he continues to maintain EBIT margin band of 21-22 percent.
"If you see this quarter, there has been a significant improvement in margins. If you see our EBITDA margins, which are now at 21.5 percent - an increase of 90 basis points, and at an EBIT level too margin has increased. While revenue increased by 1.4 percent, our income at EBIT level increased by something like 5 percent," Gupta told CNBC-TV18.
HCL Technologies' second quarter profit beat analysts' expectations on Tuesday while revenue and operational numbers matched estimates.
12:20 pm Market Expert: In the past few weeks a lot of smart money has flown (back) to US treasury due to market concerns like deflation and growth crisis, which have taken hold of the entire world, says Nandita Parker of Karma Capital.
Amidst the tensions, India does not remain untouched by the same. Despite the needful in terms of government spending and higher interest rates, investors are confused about the stimulus measures in both fiscal and monetary policies, Parker tells CNBC-TV18.
Not just this, the market hasn't taken cognizance of the fact yet that India's nominal Gross Domestic Product (GDP) growth is lower than the real GDP growth. She is of the view that there is a need to recalibrate the earnings expectations and further expects a lower earnings cycle and a de-rating in fast moving consumer goods (FMCG) sector. Markets are due for a snap-back rally, she says.
12:00 pm Market Check
Bulls have taken a charge over Dalal Street today as short covering and value buying in banks & index heavyweights drove equity benchmarks nearly 1 percent higher. Asian markets also extended gains in their afternoon trade.
The 30-share BSE Sensex rallied 225.80 points to 24414.17 and the 50-share NSE Nifty rose 65.20 points to 7416.20. The BSE Midcap and Smallcap indices also gained strength, rising nearly 1 percent.
The market breadth was positive as about 1390 shares advanced against 925 declining shares on the Bombay Stock Exchange.
Asian markets extended rally with Shanghai rising nearly 3 percent followed by Hang Seng (up 1.4 percent). European markets are also expected to open strong, indicated by its futures trade. CAC, DAX and FTSE futures gained around 1-1.5 percent.
11:55 am Steel output: China's crude steel output fell 2.3 percent to 803.8 million tonnes in 2015 from the previous year, government data showed on Tuesday, the first drop in more than three decades as the economy of the world's top producer slows.
Production also declined 5.2 percent to 64.37 million tonnes in December from the year before, according to the numbers from the National Bureau of Statistics, dented by faltering demand.
China's government is pushing to erode overcapacity in the steel industry, as the country aims to shift economic growth towards more consumption rather than heavy investment. The nation's massive steel sector is said to have a surplus capacity of about 300 million tonnes.
11:45 am Buzzing: Shares of Maruti Suzuki India fell over 1 percent intraday. The auto maker has slashed price of its premium crossover S-Cross by over Rs 2 lakh after failing to gain traction in the market. The company had introduced the S-Cross in two options of 1.6 litre and 1.3 litre engines last year coinciding with the launch of its premium retail outlet chain Nexa. However, sales of the vehicle were hindered by pricing issues.
As per the latest price list on the company's website, the slashing of price is also applicable on the 1.3 litre variant. The cut in the price of 1.6 litre variant is Rs 2,05,000 for all the three trims, while that of 1.3 litre variant ranges from Rs 40,000 to Rs 66,000.
11:30 am Market outlook: The ongoing correction in small and midcap shares could continue for a while, says Dhananjay Sinha of Emkay Global.
In an interview to CNBC-TV18, he says retail investors--particularly high networth individuals--do not have the strength to put in fresh money. He says waning retail interest is also evident from the tapering of inflows into mutual funds.
"People are not willing to put in fresh money," says Sinha, adding that lack of buying support more than selling was adding to the weakness in share prices. He says the recovery will be led by large caps, as investors will wait for signs of the market stabilising before commiting money.
The market has managed to extend its early gains. The Nifty is up 53.50 points or 0.7 percent at 7404.50 and the Sensex is up 186.82 points or 0.8 percent at 24375.19. About 1258 shares have advanced, 975 shares declined, and 120 shares are unchanged.
Axis Bank, ICICI Bank, SBI, Tata Motors and Relinace are top gainers while BHEL, Coal India, M&M, Tata Steel and Cipla are major losers in the Sensex.
Oil futures remained under pressure in early trading, following a slide that has seen prices fall by more than a quarter since the beginning of the year, as the full return of Iran to oil markets adds to an already huge supply overhang.
Oil prices had briefly stabilized in the previous session, but only after hitting the lowest since 2003 as western sanctions against Iran were lifted, allowing the country with the world's fourth-largest oil and gas reserves to return in full to the market.
Prices came under pressure as Iran ordered a sharp increase in oil output to take immediate advantage of the lifting of sanctions.
10:55 am Market Update: Equity benchmarks remained strong. The Sensex rose 201.44 points or 0.83 percent to 24389.81 and the Nifty climbed 58.05 points or 0.79 percent to 7409.05.
About 1207 shares have advanced, 949 shares declined, and 98 shares are unchanged on the BSE.
10:40 am Buzzings: Delta Corp gained nearly 3 percent after it reported consolidated net profit at Rs 7.7 crore in Q3 against loss of Rs 0.42 crore in year-ago period. Total income increased 23.73 percent year-on-year to Rs 100.1 crore in same period.
Tata Metaliks surged 4 percent as consolidated net profit increased to Rs 28 crore in December quarter compared to Rs 19.3 crore in corresponding quarter of last fiscal.
Bharat Bijlee surged nearly 17 percent after reporting profit at Rs 8.9 crore in Q3 against loss of Rs 4.1 crore in same quarter last fiscal.
10:20 am Asia Update: Asian equities bounced back after having a mixed, but volatile reaction to a slew of data released by Beijing showing major economic growth indicators were mostly in line with expectations.
Major markets saw knee-jerk reactions, round-tripping by rising immediately after the release of data before slipping into negative territory and then recovering.
China's gross domestic product data came mostly in line with market expectations though factory output and retail sales dipped slightly below expectations. Shanghai gained 1.6 percent followed by Hang Seng with 0.8 percent upside.
10:00 am Market Check
The market extended rally in morning trade with the Sensex rising 182.71 points to 24371.08 and the Nifty climbing above 7400, up 49.30 points to 7400.30.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.4 percent each. The market breadth was marginally positive as about 1034 shares advanced against 818 declining shares on the BSE.
Reliance Industries gained more than 1 percent ahead of third quarter earnings. A CNBC-TV18 poll sees a 6 percent sequential growth in profit supported by refining business.
Banking stocks saw short covering today as ICICI Bank and Axis Bank surged 3 percent each followed by SBI with a 2 percent upside.
Tata Motors, Bharti Airtel and NTPC rallied 2 percent each while Mahindra & Mahindra, ONGC, Wipro, BHEL and Tata Steel fell more than 1 percent.
9:55 am Visa woes: Country's third largest software services firm Wipro said the recent H1B visa fee hike by the US will have a "large impact running into multi-million dollars".
The company is looking to mitigate the impact by hiring more locals in the US. "It is a large impact running into multi-million dollars for Wipro and also I'm sure for similar such organisations, and it will have meaningful impact on our operating margins. Once we start applying for that, we will disclose those numbers," Wipro Chief Financial Officer Jatin Dalal told reporters.
He further said: "...this is certainly that was unexpected and we will have to work through it." The US, under under the 9/11 Health and Compensation Act, has imposed a special fee of USD 4,000 on certain categories of H-1B visas and USD 4,500 on L1 visas.
9:45 am FII view: The magnitude of selling in midcaps is surprising as it suggests that now even domestic money is in a risk-off mode, says Arvind Sanger, managing partner at Geosphere Capital. He is not sure whether the selling is done with for now, though he feels it is more panic-selling since India's macros are rather stable and it is earnings (including Q3) that is not showing enough momentum. In recent times, there have also been many a debates on whether the United States is entering into a recession. But Sanger says US is not the problem here, the economic situation in China is a bigger concern. "It is not about the GDP numbers coming out of China, every economic indicator is suggesting that China is in a serious slowdown mode," he told CNBC-TV18.
9:30 am Earnings: HCL Technologies' second quarter profit beat analysts' expectations on Tuesday while revenue and operational numbers matched estimates. Profit surged 11.2 percent quarter-on-quarter to Rs 1,920 crore and revenue increased 2.4 percent to Rs 10,341 crore during the quarter. Dollar revenue rose 1.39 percent sequentially to USD 1,566 million compared to USD 1,544.5 million in preceding quarter and 2.1 percent in constant currency.
The market bounced back on Tuesday despite mixed Asian cues. The 30-share BSE Sensex rose 106.84 points to 24295.21 and the 50-share NSE Nifty went up 37.70 points to 7388.70.
Axis Bank, ICICI Bank, Reliance Industries, NTPC, Adani Ports, Tata Steel and Bank of Baroda gained more than 1 percent while Cipla, Coal India, TCS, ITC, ONGC, Zee Entertainment, M&M, Cairn India and Grasim were losers.
The Indian rupee has opened flat at 67.67 per dollar today against previous close of 67.68.
Pramit Brahmbhatt of Veracity says in absence of clue from American market, USD to continue its march ahead thus by weakening rupee.
Yesterday, domestic equity market closed in a red. Benchmark index Nifty lost 87 points to end the day, keeping rupee under pressure.
According to him, rupee will remain under pressure and range for the day will be 67.6 - 68.10 a dollar.
Asian markets were trading mixed as China released its fourth quarter GDP data at 6.8 percent, marginally lower than expected, compared to 7.3 percent last year. Shanghai was up 1.6 percent while Nikkei was down about 0.5 percent.