Sensex ends below 24K for 1st time since May 2014, down 100 points
21 January 2016
The sell-off in equity benchmarks continued for second consecutive session on Thursday with the Sensex closing below psychological 24000-mark for first time since May 15, 2014. Weak Asian cues and fall in crude oil prices dampened sentiment but recovery in Europe helped Indian equities trim losses in later part of the trading session.
Overall it was a volatile session as the Sensex gained more than 250 points in early trade but could not sustain those gains for long. Oil, pharma, FMCG and auto stocks dragged while banks and select technology stocks limited downside.
The 30-share BSE Sensex fell 99.83 points to 23962.21 and the 50-share NSE Nifty declined 32.50 points to 7276.80. The broader markets were mixed as the BSE Midcap index lost 0.3 percent and Smallcap gained 0.5 percent.
Hiren Ved of Alchemy Capital Management says it will take a while for the market to bottom out, but it is trading at an attractive level for long-term investors.
Asian markets extended losses in their afternoon trade with Shanghai sinking 3.2 percent followed by Hang Seng (down 1.8 percent to 3-year low) and Nikkei (down 2.4 percent) after Brent crude slipped below USD 28 a barrel, down half a percent to USD 27.74. However, European markets managed to recoup early losses ahead of first European Central Bank meeting of the year. France's CAC, Germany's DAX and Britain's FTSE gained 0.5-1 percent (at 16 hours IST).
On home turf, Dr Reddy's Labs was down nearly 4 percent due to sharp depreciation in Russian ruble against US dollar. Glenmark Pharma also lost 6 percent on same reason despite getting USFDA approvals for two generic drugs.
Banks stocks rebounded today on short covering with HDFC Bank, ICICI Bank and SBI up 0.6-1.2 percent. Axis Bank topped buying list on Sensex, up 5.2 percent after better-than-expected earnings in Q3, though asset quality worsened.
In IT space, Infosys gained 1.2 percent and Wipro was up 1.8 percent following depreciation in rupee while TCS lost 0.7 percent.
Among others, Reliance Industries, Tata Motors, Maruti Suzuki, Sun Pharma, HUL, ONGC, Cipla and Coal India were down 2-4 percent.
In broader space, Alembic Pharma rallied 5.5 percent on solid growth in Q3 earnings. Profit shot up 281 percent on strong US business, with revenue rising 81 percent year-on-year.
Exide Industries fell 4 percent after the company missed revenue estimates in December quarter, which fell 2 percent. Bottomline and operational performance was ahead of estimates. PK Kataky, MD & CEO said there was no significant improvement in demand for automotive OEM (original equipment manufacturer) and industrial battery.
Mahindra & Mahindra Financial Services plunged nearly 7 percent as its Q3 standalone profit halved to Rs 67.2 crore compared to year-ago period.
3:30 pm Market closing: The market has ended lower once again. The Sensex ended below 24000 for first time since May 2014. The 30-share index was down 99.83 points or 0.4 percent at 23962.21 and the Nifty slipped 32.50 points or 0.4 percent at 7276.80. About 1289 shares advanced, 1301 shares declined and 184 shares were unchanged. Axis Bank, Tata Steel, Wipro, SBI and Infosys were top gainers while Tata Motors, Dr Reddy's Labs, Maruti, Coal India and ONGC were losers in the Sensex.
2:59 pm Market Update: The Sensex declined 64.05 points to 23997.99 and the Nifty fell 21 points to 7288.30.
About 1306 shares have advanced, 1236 shares declined, and 180 shares are unchanged on the BSE.
2:50 pm Earnings: Automotive battery manufacturer Exide Industries' third quarter profit shot up 37.9 percent year-on-year to Rs 134 crore on strong operational performance but sequentially it fell 14 percent.
Revenue declined 2.1 percent to Rs 1,524.7 crore in quarter ended December 2015 compared to Rs 1,557.5 crore in year-ago period and also slipped 12.3 percent compared to preceding quarter.
"There was no significant improvement in demand for automotive OEM (original equipment manufacturer) and industrial battery, including demand for inverter battery as well as for power, telecom and solar battery during third quarter," said PK Kataky, MD & CEO, Exide.
However, growth in automotive and motorcycle battery replacement sales has continued during the quarter, he added.
2:40 pm Citi on India: India is likely to remain an attractive destination for investors given its relative macro outperformance and the country is likely to clock a GDP growth rate of 7.5 percent this fiscal, a Citigroup report said.
According to the global financial services major, the structural drivers of growth are likely to benefit from reforms but external headwinds remain strong.
"Overall a period of consolidation would see GDP growth at 7.7 percent in FY17, only marginally higher than 7.5 percent growth in FY16," Citigroup said in a research note.
As per government estimates, the economy will grow by 7-7.5 percent during financial year 2015-16. On prices, the report said, the output gap is not closing fast enough to reverse the disinflationary momentum and hence Reserve Bank could continue with an accommodative stance.
2:20 pm IOC doubles oil import from Nigeria: State-owned Indian Oil Corp has nearly doubled the crude oil it buys from Nigeria on a term or fixed contract as it looks to diversify sources of supplies.
The nation's largest refiner, IOC buys some 8 million tons a year of crude oil from Nigeria. Most of it is bought from spot or current markets where prices are subject to extreme volatilities.
"Nigeria has now agreed to increase the term contract from 1.7 million tons per annum to 3 million tons in 2016," Oil Minister Dharmendra Pradhan said. A term contract offers not just assured supplies but also cheaper price as the rate is based on official selling price of exporting country.
2:00 pm Market Check
The market recovered amid volatility in afternoon trade with the Sensex rising 3.90 points to 24065.94 and the Nifty up 4.35 points to 7313.65.
The market is clearly sentiment driven and it is still very much in the risk-off mode globally, says Hans Goetti of Banque Internationale.
As far as India is concerned, purely looking at technical indicators, there is a downside risk of 6850 level - that is the 200 DMA, he adds.
Reliance Industries cut losses to 0.7 percent from 3.5 percent. Tata Motors and Maruti Suzuki plunged 3 percent each followed by ONGC, Dr Reddy's Labs, HUL and Sun Pharma.
Axis Bank surged 4.6 percent post better-than-expected earnings though asset quality worsened. ICICI Bank, Infosys, SBI, Wipro, NTPC, Tata Steel, Hindalco and BHEL gained 1-2 percent.
1:50 pm Market expert: Amid tumbling global markets and a spike in volatility, some more concerns are taking shape. In an interview to CNBC-TV18, David Mann, Head, Asia Economic Research, Standard Chartered, says there can be a dramatic increase in crude prices in H2CY16. This may ofcourse mean bad news for India. Organization of the Petroleum Exporting Countries (OPEC) has given up on regulating oil price, which is a sign of weakness in the global economy.
A surge in oil prices will lead to new risks as OPEC is not controlling supply, he says, adding, if output from the US drops, it will drastically impact the world and India in particular, he explains. Not just this, policy makers losing control on some variables and worrisome Chinese exchange rate add to the pain of global weakness.
1:30 pm Market view: The market is clearly sentiment driven and it is still very much in the risk-off mode globally, says Hans Goetti of Banque Internationale. Refusing to get into a debate on how long this can continue, he says fundamentals will ultimately prevail. As far as India is concerned, purely looking at technical indicators, there is a downside risk of 6850 level - that is the 200 DMA.
He says the bigger issue is there is a view that the US Federal Reserve has raised rates prematurely. And as long as the dollar continues to remain strong, emerging market currencies will continue to suffer and only if the Fed reverses policy and the dollar weakens, then once again buying opportunity will emerge in EM equities and currencies — everything that has been hammered so far.
The market has slipped away as the Sensex is down 108.09 points or 0.45% at 23953.95. The Nifty is down 37.40 points or 0.5 percent at 7271.90. About 1009 shares have advanced, 1389 shares declined, and 186 shares are unchanged.
Axis Bank, Wipro, ICICI Bank, NTPC and BHEL are top gainers in the Sensex while Tata Motors, Maruti Suzuki, Dr Reddy's Labs, HUL and Reliance are major losers.
After a brief recovery, the rupee once again breached the 68-mark in late morning deals, depreciating by 10 paise to 68.05 on heavy bouts of demand for the American currency from banks and importers amid higher dollar overseas.
Overseas, the US dollar was higher against the major rivals in early Asian trade, breaking off from one-year low against the yen yesterday as crude oil prices bounced, while the euro awaited a policy decision from the European Central Bank for near-term cues.
12:58 pm Market Extends Losses: Equity benchmarks fell further on weak global growth worries. The 30-share BSE Sensex declined 181.62 points or 0.75 percent to 23880.42 and the 50-share NSE Nifty slipped 45.05 points or 0.62 percent to 7264.25.
The market breadth was weak as about 1376 shares declined for 988 advancing shares on the BSE.
12:50 pm Buzzing: Shares of Granules India rallied more than 5 percent intraday Thursday as its US subsidiary is going to market anti-acid drug in North America.
"Granules USA, the wholly owned subsidiary of Granules India, entered into an agreement with Par Pharmaceutical Inc (a subsidiary of Endo International Plc) to market generic version of OTC omeprazole and sodium bicarbonate in North America," said Hyderabad-based pharma company.
Omeprazole is a proton pump inhibitor that decreases production of stomach acid. Sodium bicarbonate is an anti-acid that raises stomach pH to keep omeprazole from breaking down in stomach acid.
12:45 pm Earnings Poll: Pharmceutical firm Biocon 's third quarter profit is likely to increase 15.5 percent year-on-year to Rs 105.05 crore and revenue is seen rising 14 percent to Rs 867 crore, according to analysts polled by CNBC-TV18.
Profit growth may be led by higher revenue and margin improvement but revenue growth may get impacted by biopharma segment. Slow recovery in Middle East market and Fidaxomicin supplies may pressure Biopharma.
Biopharma is around 70 percent of sales includes APIs, branded formulations, biosimilars etc. It also includes generics like statins + fidaxomicin (anti-infectives). Biopharma business reported a 4 percent year-on-year growth at Rs 459 crore in Q2FY16.
Key factors to watch out for would be branded formulations (India domestic formulations) and R&D spend. In Q2FY16, branded formulations in India was up only 3 percent year-on-year to Rs 119 crore.
12:35 pm Glenmark in News: Glenmark Pharma today said it has received final approval from the USFDA to manufacture and market Potassium Chloride extended release capsules and oral contraceptive Norethindrone Acetate and Ethinyl Estradiol tablets in the American market.
"Glenmark Pharmaceuticals Inc has been granted final approval by the US Food and Drug Administration (US FDA) for Potassium Chloride extended release capsules USP, 10mEq, of Actavis Laboratories FL, Inc," the company said in a BSE filing.
Quoting IMS data, Glenmark Pharma said the approved product has an estimated market size of USD 74.1 million for the 12 months ended November 2015.
The company has also received approval for Norethindrone Acetate and Ethinyl Estradiol tablets. It is a generic version of US-based Warner Chilcott's oral contraceptive drug 'Leostrin21'.
12:20 pm Rupee breaches 68/$ again: After a brief recovery, the rupee once again breached the 68-mark, depreciating by 10 paise to 68.05 on heavy bouts of demand for the American currency from banks and importers amid higher dollar overseas.
The domestic unit resumed higher at 67.88 per dollar as against Wednesday's closing level of 67.95 at the Interbank Foreign Exchange (Forex) market.
Later, it slid to 68.06 before quoting at 68.07 at 12:20 hours IST.
12:00 pm Market Check: Equity benchmarks wiped out all morning gains, falling half a percent dragged by auto, FMCG, healthcare and oil stocks. The BSE Midcap also slipped into red and even market breadth was negative as about 1262 shares declined against 1042 advancing shares on the BSE.
The 30-share BSE Sensex fell 130.30 points to 23931.74 and the 50-share NSE Nifty declined 39.75 points to 7269.55.
Reliance Industries, Tata Motors, Maruti Suzuki, HUL, ONGC and Dr Reddy's Labs were top gainers on Sensex, up 2-4 percent while Axis Bank continued to be leading contributor in Sensex's gains, up 3.5 percent. ICICI Bank gained 1.6 percent.
Markets in Asia lost early gains and slid into negative territory in afternoon trade, following another selloff on Wall Street overnight on global growth concerns, uncertainty in China and fresh lows in oil prices.
Nikkei shed 2.4 percent and Shanghai lost 2.6 percent. Hang Seng was down 1.4 percent. Even Dow futures lost over 100 points.
11:50 am FII view: While many market experts are worried about any further fall, UBS is of a different view. Speaking to CNBC-TV18, Geoffrey Dennis, Head-Global Emerging Market Strategy from the firm says global markets are very close to the end of selling. He believes that China is rebalancing its growth but the global economy is not in a decent shape.
Talking on the Indian markets, he says India is the best growth story amongst emerging markets (EMs) and will relatively outperform other EMs. The country's economy is in a good shape but crude oil prices will direct the future of India, Dennis adds. Further, he believes the next trigger for the market would be stabilisation of crude prices as emerging market growth is co-related to oil prices.
11:30 am Buzzing: Shares of Axis Bank gained 6 percent intraday. The bank has posted better-than-expected December quarter results. Profit increased 14.5 percent year-on-year to Rs 2175.30 crore from Rs 1899.76 crore, driven by other income and net interest income despite higher provisions. However, its asset quality has worsened even after a higher provisions. Most analayst have maintained neutral rating and few have cut target price. Macquarie has maintained neutral rating on the stock with a price target of Rs 438 per share.
The management indicated that FY16 credit costs will likely be 120-125 basis points. In addition, on certain restructured accounts worth Rs 2500 crore, RBI’s measures will drive an incremental provision of Rs 250 crore in FY17. "For our FY17/FY18 estimates, we assume elevated credit costs of 125 bps factoring in potential risks on restructured book and large corporate exposures," it adds.
The market has gone flat. The Sensex is up 18.12 points at 24080.16 and the Nifty is up 9 points or 0.1 percent at 7318.30. About 1282 shares have advanced, 837 shares declined, and 128 shares are unchanged.
Axis Bank, ICICI Bank, Tata Steel, BHEL and Hero MotoCorp are top gainers while ONGC, Tata Motors, HUL, Coal India and Maruti are losers.
Markets in Asia came off session highs, but mostly traded higher Thursday, despite another selloff on Wall Street overnight, with the region showing a mild recovery after concerns over China and fresh lows for oil prices spurred a global rout.
According to reports, Bank of Japan Governor Haruhiko Kuroda said the central bank will stick to its 2 percent inflation target, adding Japan's economic fundamentals remain firm.
10:50 am Market Update: Equity benchmarks erased early gains following correction in Asian markets. The Sensex fell 41.64 points to 24020.40 and the Nifty declined 5.75 points to 7303.55.
Nikkei and Hang Seng slipped half a percent while Shanghai was off day's high. The market breadth was positive as about 1233 shares advanced against 827 declining shares on the BSE.
10:40 am Earnings Poll: Aditya Birla Group company Idea Cellular is likely to report profit degrowth in October-December quarter but revenue and volume may rebound from seasonally weak second quarter. Profit is seen falling 6 percent sequentially to Rs 760 crore while revenue may grow 3.9 percent to Rs 9,030 crore in quarter gone by, according to analysts polled by CNBC-TV18. Analysts expect volume growth of 4.5 percent at 198 billion minutes during the quarter compared to 189.5 billion minutes in preceding quarter. In Q2FY16, revenue declined 1.2 percent and volume was down 3.2 percent on sequential basis.
Operating profit may rise 3.8 percent quarter-on-quarter to Rs 3,172 crore and margin may contract 6 basis points to 35.12 percent in Q3.
10:20 am Crude's sharp rebound possible?: Amid tumbling global markets and a spike in volatility, some more concerns are taking shape. In an interview to CNBC-TV18, David Mann, Head, Asia Economic Research, Standard Chartered, says there can be a dramatic increase in crude prices in H2CY16.
This may ofcourse mean bad news for India. Organization of the Petroleum Exporting Countries (OPEC) has given up on regulating oil price, which is a sign of weakness in the global economy. A surge in oil prices will lead to new risks as OPEC is not controlling supply, he says, adding, if output from the US drops, it will drastically impact the world and India in particular, he explains.
Not just this, policy makers losing control on some variables and worrisome Chinese exchange rate add to the pain of global weakness.
10:00 am Market Check
The market is holding up gains as the Sensex is up 122.95 points or 0.5 percent at 24184.99. The Nifty is up 39.45 points or 0.5 percent at 7348.75. About 1354 shares have advanced, 522 shares declined, and 92 shares are unchanged.
Axis Bank, Tata Steel, ICICI Bank, BHEL and GAIL are top gainers in the Sensex and HUL, Tata Motors, Coal India, Maruti and M&M are major losers.
Gold dropped early on Thursday in Asia, slipping from a 1.5-week high, as battered stocks bounced back along with US crude.
Asian shares and the dollar edged higher, but investors remained cautious as another shakeout on Wall Street and oil prices suggested volatility in financial markets will continue to temper risk appetite. US crude oil stabilised after hitting fresh 2003 lows the session before, but analysts said a persistent global glut would keep pressuring prices.
9:55 am Market check: The market has cooled off early gains but is still in green. The Sensex is up 126.04 points or 0.5 percent at 24188.08 and the Nifty is up 38.10 points or 0.5 percent at 7347.40. About 1333 shares have advanced, 470 shares declined, and 88 shares are unchanged. Axis Bank, ICICI Bank, Tata Steel, BHEL and GAIL are top gainers and HUL, Tata Motors, Coal India, Maruti and M&M are losers in the Sensex.
9:45 am FII view: In an interview to CNBC-TV18, Michael Every of Rabobank says the macro deflationary conditions are exactly the same as 2008. However, central banks across the globe are attempting to do all they can, unlike then.
"We have been in a rot since 2008 crisis and it looks now that the market is understanding, we are never going to get out of it; it is going to involve major socio-political and socio-economic changes, which are just not on the cards at the moment," he says.
Despite the efforts, they may not be able to prevent the crash, while adding that it is equally hard to see how a recovery can come from here.
9:35 am FII View: While many market experts are worried about any further fall, UBS is of a different view. Speaking to CNBC-TV18, Geoffrey Dennis of the firm says global markets are very close to the end of selling. He believes that China is rebalancing its growth and that global economy is in a decent shape.
Talking on the Indian markets, he says India is the best growth story amongst emerging markets (EMs) and will relatively outperform other EMs. The country's economy is in a good shape but crude oil prices will direct the future of India, Dennis adds.
Further, he believes the next trigger for the market would be stabilisation of crude prices as emerging market growth is co-related to oil prices.
9:15 am Market Check
Bulls took charge of Dalal Street as the market rebounded on Thursday after hitting 20-month low in previous session. The Sensex rose 232.66 points or 0.97 percent to 24294.70 and the Nifty rallied 67.35 points or 0.92 percent to 7376.65.
Axis Bank, BHEL, SBI, Hindalco Industries, ICICI Bank, Adani Ports and Tata Steel were leading gainers in early trade.
The Indian rupee rebounded in early trade on Thursday after hitting a 28-month low in previous session.
The currency has opened higher by 7 paise at 67.88 per dollar against 67.95 Wednesday.
Mohan Shenoi, Kotak Mahindra Bank says current risk-off phase, concerns regarding Chinese slowdown, strong dollar, high dollar debts outside US and increased risk of dollar squeeze, widening credit spreads and plummeting oil and share prices could force the Federal Reserve not to implement another rate hike in March.
However, potential intervention from Bank of Japan and caution before European Central Bank meeting later today could temper the negative sentiment, he adds.
Shenoi expects USD-INR to trade today in a range of Rs 67.75-68.20/USD.
The dollar fell to a more than one-year low against the Japanese yen as crude oil prices dropped near 13-year lows and risk appetite waned.
Asian markets rebounded after sell-off in previous session. Nikkei gained 1 percent followed by Shanghai and Hang Seng with half a percent gain.