Sensex, Nifty end 1.5% lower; Adani Ports up 5%, BHEL tanks
16 February 2016
3:30 pm Market ending: The Sensex was down 362.15 points or 1.5 percent at 23191.97 and the Nifty slipped 114.70 points or 1.6 percent at 7048.25. About 623 shares have advanced, 1993 shares declined, and 109 shares are unchanged. Adani Ports, NTPC, Dr Reddy's Labs, Wipro and Hero MotoCorp are top gainers while SBI, BHEL, Tata Motors, L&T and GAIL are top losers in the Sensex.
3:00 pm Europe check: European markets rallied at the open earlier after European Central Bank (ECB) President Mario Draghi hinted at further monetary policy easing. Draghi said on Monday that the ECB is "ready to do its part" to make "the euro area more resilient", hinting at further stimulus measures to come.
Markets were also helped by comments out of China. Investors shrugged off poor Chinese trade data that saw exports and imports plunge, after People's Bank of China (PBOC) governor Zhou Xiaochuan dismissed the ideas of capital controls and said he saw no basis for a continuing depreciation of the yuan.
But not all analysts are convinced that central banks have much more room for maneuver, especially since many of the underlying factors behind the recent volatility in stocks remain the same.
2:50 pm Deal: Country's fourth-largest software services firm HCL Technologies today said it has acquired Volvo group's external IT business and has signed a five-year outsourcing deal with the commercial vehicles maker. The acquisition, for which the companies signed a letter of intent in October, will add 40 new customers in the Nordic and France regions and 2,500 highly skilled employees from 11 countries to HCL's portfolio. Sources said cumulatively, the transaction will bring in revenue upwards of USD 1.8 billion over the next five years to the Indian firm.
HCL declined to comment on the deal size. The Noida-based firm had agreed to buy the external IT business of Sweden's Volvo group for USD 138 million (around Rs 895 crore) in an all-cash deal. Volvo's IT business is an important addition of HCL's portfolio as it brings in an annual billing of about USD 200 million, sources added.
2:40 pm Market selling rout: The Sensex is down 348.19 points or 1.5 percent at 23205.93, and the Nifty slips 112.80 points or 1.6 percent at 7050.15. Nifty had About 579 shares have advanced, 1953 shares declined, and 99 shares are unchanged.
2:30 pm Oil splash: As per reports, big oil producers agreed to freeze oil output to Jan 11, 2016 levels after closed-door meet. The closed-door meeting, which started in Doha, comes after more than 18 months of declining oil prices that has knocked two thirds off benchmark crude futures, indicating the mood may be finally shifting among producers that until now have been determined to defend market share and not prices.
Heavy selling in remaining hours of trade drags market sharply. The Sensex is down 239.77 points or 1 percent at 23314.35 and the Nifty slips 81.65 points or 1.1 percent at 7081.30. About 648 shares have advanced, 1846 shares declined, and 110 shares are unchanged.
SBI, BHEL, Cipla, L&T and Tata Motors are major losers while Adani Ports, NTPC, ONGC, Dr Reddy's and Hero MotoCorp are top gainers in the Sensex.
Dipen Sheth, head of institutional research at HDFC Securities feels that maintaining fiscal discipline is critical for the government despite the current pain.
Sheth says there is a storm brewing outside as well as inside India and this year is going to be volatile. Times are tough and the temptation to take few liberties on fiscal targets is high, but it would not be a good option, he adds.
Pointing out the decline in savings rate in our economy to 30 percent from 35 percent, he says it is more like punishing savers, adding, "The more you punish savers, the more you postpone your pains into the future."
1:55 pm Indian companies raised more than Rs 27,000 crore through retail issuance of non-convertible debentures (NCDs) in the ongoing financial year to meet business requirement.
This is much higher than Rs 9,713 crore garnered by firms in the entire last fiscal.
Most of the funds have been mobilised for expansion, to support working capital requirements and other general corporate purposes.
NCDs are loan-linked bonds that cannot be converted into stock and usually offer higher interest rates than convertible debentures.
1:45 pm M&A deals: The year 2016 started on a rather subdued note for mergers and acquisitions in the country as M&A deal value in January declined by nearly 50 percent, largely because of lesser big-ticket deals.
According to assurance, tax and advisory firm Grant Thornton, there were 44 M&A transactions worth USD 1.7 billion in January this year as against 48 deals worth USD 3.4 billion in January 2015.
The decline in M&A deal tally was largely because of decreased cross-border activity and fewer big-ticket transactions. January saw only one deal valued above USD 500 million compared with three such deals in January 2015.
1:30 pm Breaking: The Supreme Court has directed the Reserve Bank of india to furnish details of entities in default of loans in excess of Rs 500 crore restructured in the last 5 years, reports CNBC-TV18
The SC has impleaded RBI and issued notice to provide write-off details in a sealed envelope.
The market remains in bear trap as the Sensex is down 136.67 points or 0.6 percent at 23417.45. The Nifty slips 50.40 points or 0.7 percent at 7112.55. About 711 shares have advanced, 1674 shares declined, and 106 shares are unchanged.
Adani Ports, NTPC, ONGC, Hero MotoCorp and Dr Reddy's Labs are top gainers while SBI, L&T, Axis Bank, Sun Pharma and Lupin are major losers in the Sensex.
Asian shares extended gains as a combination of stabilising Chinese markets, rebounding oil prices and solid US consumption data prompted investors to look for bargains after last week's rout. European shares were also expected to build on Monday's strong start, with spreadbetters seeing both Germany's DAX and France's CAC 40 rising up to 0.7 percent and Britain's FTSE 0.4 percent.
Concerns over the health of European banks, the pain of cheap oil prices on energy producers and worries about slowdowns in the US and Chinese economies pushed the world's share prices to 2-2.5-year lows last week.
1:55 pm Tax trouble: Tax woes seem to continue for Vodafone as government sources have indicated that the Income Tax Department is likely to pursue the demand notice issued to the company.
CNBC-TV18 learns that the IT Department has issued a notice to Vodafone with respect to USD 2.1 billion tax demand and IT officials have been instructed to collect the amount demanded.
Earlier in 2015, government had made attempts to frame terms of reference for negotiation with the company. However, these terms have not materialized yet.
1:30 pm Interview: In an interview with CNBC-TV18, Vir Advani, ED and President of Blue Star says the company expects a revenue growth of 20-25 percent and aims to grow market share to 12 percent in fiscal year 2017. Blue Star had reported its quarterly earnings on January 29. Revenue grew 12.4 percent to Rs 686 crore year-on-year (YoY) and EBITDA margins rose 260 basis points to 4.1 percent (YoY).
"For the quarter the market grew about 10 percent. We at Blue Star grew twice as fast and about 20 percent. We had a good festival season and that is a second season for buying air-conditioner. It was much stronger than last year. Moving into the Q4, January has been strong and we are looking at positive quarter end as well. So, things are looking a lot better than they were last year for us," he says.
The market is struggling to go in green territory as the Nifty is still below 7150. The 50-share is down 44.75 points or 0.6 percent at 7118.20. The Sensex is down 114.16 points or 0.5 percent at 23439.96. About 756 shares have advanced, 1549 shares declined, and 111 shares are unchanged.
Adani Ports, NTPC, ONGC, Bharti Airtel and Dr Reddy's Labs are top gaienrs while SBI, L&T, Sun Pharma, Hindalco and GAIL are major losers in the Sensex.
Crude oil futures spurted by Rs 74 to Rs 2,276 per barrel today after participants widened their bets, tracking a firming trend in Asia. Marketmen attributed the rise in crude oil futures to a firming trend in Asian trade where Brent breaking past USD 34 a barrel on expectations that energy heavyweights Russia and Saudi Arabia will discuss the global oversupply issue in a Doha meeting.
11:45 am Interview: The National Highways Authority of India is confident of awarding 5000 kilometers of road projects in FY16, its Chairman Raghav Chandra tells CNBC-TV18. He expects the government to increase budgetary allocation to roads by 10 percent the coming year, and says the process of project approvals has improved. NHAI spent Rs 33,000 crore on road projects this year so far, an increase of 60 percent year-on-year. NHAI plans to issue another Rs 5000 crore worth of bonds in FY16, Chandra says. He says NHAI has acquired around 9000 hectares so far in FY16, adding that the land acquisition cost has gone up.
11:30 am Budget 2016: Dipen Sheth, head of institutional research at HDFC Securities feels that maintaining fiscal discipline is critical for the government despite the current pain. Sheth says there is a storm brewing outside as well as inside India and this year is going to be volatile. Times are tough and the temptation to take few liberties on fiscal targets is high, but it would not be a good option, he adds. Pointing out the decline in savings rate in our economy to 30 percent from 35 percent, he says it is more like punishing savers, adding, "The more you punish savers, the more you postpone your pains into the future."
The market is flat as the Sensex is down 39.26 points or 0.2 percent at 23514.86. The Nifty is down 20.45 points or 0.3 percent at 7142.50.
About 955 shares have advanced, 1215 shares declined, and 101 shares are unchanged.
Adani Ports, NTPC, ONGC, Dr Reddy's Labs and Bharti Airtel are top gainers while L&T, SBI, ICICI Bank, M&M and Sun Pharma are losers in the Sensex.
Gold stretched its losses into a third session and tumbled below USD 1,200 an ounce on Tuesday, as easing concerns over the global economy buoyed stocks and hurt safe-haven demand for the metal. Bullion's three-day loss of more than 4 percent, its biggest such drop in seven months, takes the precious metal further away from a one-year high reached last week and threatens to undo a rally that has seen prices gain 13 percent so far this year.
Goldman Sachs's recommendation to short gold, prompted by the bank's belief that the recent fear-induced rally has been overdone, added to the bearish sentiment in the market.
11:55 am Taxation: The Income Tax Department has extended till March 31 the bar on UK's Cairn Energy plc selling its residual stake in erstwhile subsidiary Cairn India as the Rs 10,247 crore tax dispute lingers on. The I-T Department had on January 22, 2014 issued a notice of Cairn Energy over alleged Rs 10,247 crore capital gains it made in 2006 when it reorganised its India business and raised money through an initial public offer (IPO). Pending that it barred the company from selling 9.8 per cent stake in Cairn India.
11:45 am Budget 2016: Solar power industry wants the government to give tax incentives and financial support to make 'solar' an attractive and viable option, ahead of the Union Budget. The government has ambitious plans for deployment of 175 GW renewable power capacities by 2022, including 100 GW of solar. "The solar rooftop industry will certainly need better non-recourse financing options by increasing power sector exposure limits of domestic banks," one of the players in the solar industry said.
11:30 am Market outlook: Even though share prices have seen a bruising decline since the beginning of the calendar, there could be more pain in store, especially in midcap and small shares, say market experts Gautam Shah of JM Financial and Atul Suri. In an interview to CNBC-TV18, Suri says 12,000 is a critical technical level for the CNX Midcap index. After holding above that level for a long time, the index has slipped during the recent sell off. Suri says technical charts indicate that the index could slide all the way to 10,000 in the short term. And while the downside in the Nifty may not be as severe, there could be a rub off effect of the downtrend, Suri says.
The market is still down with capital goods, pharma, IT, banks and metals dragging. The Sensex is down 107.75 points or 0.5 percent at 23446.37, and the Nifty slips 34.60 points or 0.5 percent at 7128.35. About 831 shares have advanced, 1004 shares declined, and 93 shares are unchanged.
Adani Ports, NTPC, ONGC, Hero MotoCorp and Bharti Airtel are top gainers while HDFC twins, L&T, Infosys and TCS are losers in the Sensex.
Oil prices surged to their highest levels in more than a week as news of a meeting of top officials from the world's biggest oil producers spurred speculation of an eventual deal to tackle a deep supply glut.
Oil has dropped over the past year due to booming US supplies and OPEC's decision, led by the group's biggest producer Saudi Arabia, to ramp up exports and drive higher-cost producers out of the market.
9:55 am Infra companies: The Income Tax Department today said infrastructure companies will have the option to choose the year from which they desire to claim tax benefits for ten consecutive years, a move aimed at reducing litigations. Issuing clarification, the Central Board of Direct Taxes (CBDT) said 'initial assessment year' in the Section 80IA (5) of the Income Tax Act, dealing with tax holiday, would mean the first year on which a company would claim for tax benefit. Companies engaged in sectors like infrastructure, road and power get tax holiday under the Section 80 IA of the Act.
9:45 am Pre-Budget meet: In a bid to reach out to the Opposition, Prime Minister Narendra Modi is expected to meet leaders of major political parties on Tuesday to discuss major issues ahead of Budget Session of Parliament.
This comes even as the ongoing JNU row has given fresh ammunition to the Opposition to target the government.
Congress, JDU and Left have demanded proof from Union Home Minister Rajnath Singh for claims of Hafiz Saeed backing the JNU protests. The government is worried that Key bills like GST will be stuck amid Opposition's protests.
9:35 am Market in red: The market has slipped into red. The Sensex is down 69.95 points or 0.3 percent at 23484.17 and the Nifty is down 18.40 points or 0.3 percent at 7144.55. About 795 shares have advanced, 685 shares declined, and 74 shares are unchanged.
Adani Ports, ONGC, NTPC, Bharti Airtel and Hero MotoCorp are top gainers while Lupin, Coal India, M&T, Maruti and ICICI Bank are major losers in the Sensex.
The market extended rally further as equity benchmarks opened higher amid volatility. The Sensex rose 87.23 points to 23641.35 and the Nifty climbed 24.90 points to 7187.85.
ONGC, Tata Motors, Adani Ports, Tata Steel, Cipla, Cairn India and Idea Cellular were early gainers while Infosys, TCS, HDFC, Bank of Baroda and Asian Paints were under pressure.
The Indian rupee erased some previous day's gains in early trade Tuesday. The currency has opened at 68.13 a dollar, down 7 paise compared to 68.06 a dollar in previous session.
Ashutosh Raina, HDFC Bank says the return of risk sentiment after some signs of stability in Chinese currency coupled with oil cementing its recent gains resulted in global equities rallying from recent lows and US dollar gaining against most currencies.
According to him, the USD-INR pair continues to trade in a Rs 67.50-68.50/USD range, with the central bank support coming in at lower levels.
Meanwhile, bonds continue to trade weak as tight liquidity conditions continue, he feels. Raina expects the 10-year benchmark yield to trade in a range of 7.8-7.9 percent in the near term.
On the global front, Asian markets traded higher with the Shanghai rising nearly 3 percent and Hang Seng up 1.8 percent.