Sensex hits 3-wk low, down 215 points; Nifty below 7550; HDFC drags

Equity benchmarks hit three-week low on Thursday, falling nearly a percent led by heavyweights HDFC, ITC, Infosys and Larsen & Toubro. Weakness in European markets and oil prices also added fuel to the fire. Profit booking could be another reason for sell-off as foreign institutional started selling in April after buying of shares worth Rs 23,620 crore in March.

The 30-share BSE Sensex tanked 215.21 points or 0.86 percent to 24685.42 and the 50-share NSE Nifty declined 67.90 points or 0.89 percent to 7546.45. The broader markets were also under pressure with the BSE Midcap and Smallcap indices falling over 0.4 percent.

Market is giving signals that investors need to take money off the table across sectors regularly, says Ajay Srivastava of Dimensions Consulting.

According to him, fundamentals of the economy are still weak, though strong global liquidity could take stocks higher in the short term. He says there has not been much of fresh investments into Indian equities based on conviction about fundamentals.

The market breadth was weak today as about 1448 shares declined against 1112 advancing shares on Bombay Stock Exchange.

3:30 pm Market Update: Equity benchmarks ended sharply lower by 1 percent today, dragged by index heavyweights HDFC, Infosys, ITC and L&T.

The Sensex dropped 215.21 points to 24685.42 and the Nifty fell 67.90 points to 7546.45. The market breadth also turned negative in last hour of trade as about 1448 shares declined against 1107 advancing shares on Bombay Stock Exchange.

European markets were down marginally on fall in oil prices and ahead of European Central Bank meeting.

3:18 pm Tata's UK sale: Sources told CNBC-TV18 that Tata Steel is planning to sell its UK arm in one go, rather than in parts.

Already, three strategic buyers are said to be keenly interested in the Tata asset.

Liberty House's Sanjeev Gupta is in the fray of potential buyers. It is understood the valuation of the deal will be clear only by next week.

Greybull Capital may also explore options to buy the entire plant. No formal bid, however, has been submitted yet. Talks are believed to be at an exploratory stage.

Formal expressions of interest for Tata Steel's UK biz are likely to be sent next week.

3:05 pm Market Update: Equity benchmarks extended losses again. The Sensex plunged 238.71 points or 0.96 percent to 24661.92 and the Nifty fell 74.05 points or 0.97 percent to 7540.30.

2:45 pm Torrent Pharma in news: Torrent Pharma has teamed with private-equity firm Apax Partners to emerge as the frontrunner to buy Hyderabad-based Gland Pharma, sources have told CNBC-TV18.

It is learnt that as part of the deal, Gland's promoters may sell their 60 percent stake in the firm for a valuation of a little above USD 1 billion while PE firm KKR may also sell its remnant 40 stake.

Sources say Dr Reddy's is also in fray for the acquisition and is looking to tie up with PE firms.

2:25 pm FII View: The underperformance by emerging markets in general over the past three years looks set to reverse, says emerging markets guru Mark Mobius.

In an interview with CNBC-TV18, Mobius said that outflows one had seen in emerging market funds seem to be ceasing and now money is coming back not just in EM equities but also in debt.

Mobius, credited as a pioneer in emerging market investing, said that going forward, India is likely to outperform other EMs by 20-30 percent over the medium term.

2:00 pm Market Check
Equity benchmarks have not still shown any sign of complete recovery in afternoon trade. The Sensex declined 127.01 points to 24773.62 and the Nifty fell 39.05 points to 7575.30.

Oil and pharma stocks continued to trade higher while technology, FMCG and select banks remained under pressure.

Shares of BHEL gained 5 percent after the state-run power equipment maker has posted a loss of Rs 877 crore in financial year 2015-16 against profit of Rs 1,419 crore in previous year, as per provisional data provided by the company to exchanges.

Revenue declined 13.7 percent to Rs 26,700 crore during the year compared to Rs 30,947 crore in earlier year. However, order inflows increased sharply by 41.9 percent to Rs 43,727 crore from Rs 30,814 crore in same period.

1:45 pm BHEL earnings: State-run power equipment maker  Bharat Heavy Electricals (BHEL) has posted a loss of Rs 877 crore in financial year 2015-16 against profit of Rs 1,419 crore in previous year, as per provisional data provided by the company to exchanges.

Revenue declined 13.7 percent to Rs 26,700 crore during the year compared to Rs 30,947 crore in earlier year.

However, order inflows increased sharply by 41.9 percent to Rs 43,727 crore from Rs 30,814 crore in same period.

1:35 pm ITC in news: Diversified Group ITC and Starwood Hotels and Resorts today extended their existing partnership for 11 ITC Luxury Collection hotels and one hotel under the Sheraton brand.

Strengthening their partnership further, the two partners also announced three upcoming ITC hotels under Starwood's 'The Luxury Collection' brand in India, the company said in a statement.

"The association with Starwood Hotels and Resorts for close to four decades, bears testimony to this commitment and we are pleased to further strengthen our alliance with three upcoming ITC luxury hotels in Kolkata,Hyderabad and Ahmedabad, which will be an archetype of the culture and region they are located in," ITC Ltd Executive Director Nakul Anand said.

The addition of ITC Kohinoor in Hyderabad, ITC Narmada in Ahmedabad and ITC Royal Bengal in Kolkata will take the inventory up to 15 hotels, over the next four years, the statement added.

1:15 pm Gainers & Losers: HDFC, Infosys, ITC, L&T, Maruti Suzuki, Adani Ports and Hindalco Industries were biggest losers on Sensex, down 1.5-3 percent while Lupin, Sun Pharma, Axis Bank and Dr Reddy's Labs gained more than 1 percent.

1:00 pm Market Check
Equity benchmarks continued to see downtrend in afternoon trade while the broader markets maintained outperformance with the BSE Midcap and Smallcap indices rising 0.2 percent.

The 30-share BSE Sensex slipped 125.28 points to 24775.35 and the 50-share NSE Nifty declined 33.70 points to 7580.65.

Tata Power and Adani Power fell 3 percent each after the Appellate Tribunal for Electricity (APTEL) today struck down a 2014 order by the Central Electricity Regulatory Commission (CERC) that granted compensatory for both companies, holding that the central regulator did not have the power to allow for it.

The CERC had in February 2014 ruled that Tata and Adani will be allowed to increase tariffs temporarily to compensate for additional fuel costs that they were incurring due to expensive coal imports in their plants in Mundra, Gujarat.

The news is a rude shock for both companies, says Murtuza Arsiwalla of Kotak Institutional Equities, adding that stocks were already pricing in the order. Benefit of Rs 15-20 per share was expected from CERC order, which now reversed, will weigh on the stock price. He expects Rs 50-60 crore loss for Tata Power post the decision.

12:25 pm Adani in News: Adani group today said it will restart talks with stakeholders to take forward its plans to build one of the world's largest coal mines in Australia, days after the Indian mining giant's controversy-hit 21.7 billion dollars project won three mining leases.

"The granting of Mining Leases (MLs) means discussions can now re-commence with contractors and stakeholders on prospective people, logistics and mining services hubs to service Adani's Carmichael Mine, North Galilee Basin Rail and Abbott Point Port Expansion projects," Adani Australia CEO Jeyakumar Janakaraj said at the Queensland-based Bowen Basin Mining Club (BBMC).

"In conjunction with our valued partners such as Downer, we have been considering our preferred options for hubs to not only ensure we get the best value for this significant investment but, consistent with our undertakings, ensure local workforces and suppliers have the opportunity to benefit" Janakaraj said.

12:00 pm Market Check
Equity benchmarks remained under pressure, though recovered a bit from day's low. Technology, FMCG and auto stocks were under pressure while oil, pharma and select banks stocks gained.

The 30-share BSE Sensex declined 116.39 points to 24784.24 and the 50-share NSE Nifty slipped 30.75 points to 7583.60 while the BSE Midcap and Smallcap indices outperformed, rising 0.2 percent each.

The market breadth was positive too, about 1159 shares advanced against 1015 declining shares on Bombay Stock Exchange.

11:45 am Market recovers: The Sensex declined 81.11 points to 24819.52 after recovering 180 points from day's low. The Nifty fell 22.40 points to 7591.95 after hitting an intraday low of 7542.

However, the market breadth was positive as about 1149 shares advanced against 978 declining shares on BSE.

11:25 am Buzzing: Maruti Suzuki shares lost 3.4 percent intraday on worries of rising Japanese yen against US dollar that may hurt company's margin performance.

Yen touched a fresh 17-month high against the US dollar today. It fell more than 10 percent in more than three months time to 108.80 (at 11:11 hours IST) a dollar from 121.68 a dollar on January 29.

In three months, Maruti shares lost 15 percent. Analysts say every 10 percent appreciation in yen have 200 basis points negative impact on company margins.

The country's largest car manufacturer has exposure to the yen in form of royalty paid to Suzuki Corporation (the parent company) and import of raw material. Its about 25 percent cost is yen denominated, out of which 20 percent comes from yen denominated imports and 5 percent of sales from royalty outgo.

11:00 am Market Check
The market continued to see selling pressure with the Sensex falling 171.76 points to 24728.87 and the Nifty declining 43.25 points to 7571.10.

Market is likely to remain rangebound in 2016, says Rahul Chadha of Mirae Asset Global Investments, adding that tails risks are unlikely to materialize this year. Chadha, however, continues to remain overweight on India.

Speaking from sidelines of the Credit Suisse Annual Conference, Chadha says that when the economy revives and credit cycle picks up, banks are bound to do well. The recent rate cut of 25 basis points by the Reserve Bank will lead to an uptrend in the economy, he adds.

HDFC dropped 2.7 percent intraday Thursday on additional one-time provision for March quarter of FY16. Maruti Suzuki fell 3 percent on rally in Japanese Yen against US dollar.

Infosys, ITC, ICICI Bank, L&T and SBI were down 1-1.5 percent while Lupin and Dr Reddy's Labs topped buying list on Sensex, up over 1.5 percent.

10:35 am FII View: Ridham Desai of Morgan Stanley says the market has been entrenched in quality & growth and has disliked junk as well as value factors for most of the past 8 years.

According to him, recent market moves have produced some volatility in the performance of these factors and thus, volatility & poor headline market performance.

He thinks the market could beat the beginning of a transition into growth styles. "Our stock picking approach is to buy cyclicals and stocks with GARP (growth at a reasonable price) orientation, although, as usual, we avoid beta," Desai says.

10:15 am Nomura on further rate cut: Reserve Bank is likely to hold the pause button until the end of this year, largely owing to inflationary pressures, a Nomura report has said.

However, domestic ratings agency India Ratings has said the central bank will deliver another rate cut of 0.25 percent this fiscal.

Nomura in a research note today said that it "expects RBI to stand pat until end-2016, as we do not see inflation undershooting 5 percent on a sustained basis as the cyclical factors driving disinflation (oil price falls, a slowdown in rural wage growth and the large negative output gap) are behind us."

Though in its forward guidance, RBI had said the stance of monetary policy will remain accommodative, the Japanese brokerage firm expects rates to be on hold until year end.

10:00 am Market Check
Equity benchmarks extended losses with the Sensex falling over 200 points, weighed by banking & financials, FMCG, auto and technology stocks. The broader markets were flat.

The Sensex fell 206.96 points to 24693.67 and the Nifty declined 58.05 points to 7556.30.

HDFC dropped more than 2 percent on provisioning for the fourth quarter. Infosys, ITC, HDFC Bank, ICICI Bank, SBI and Maruti Suzuki declined 1-3 percent while Lupin, Axis Bank, Dr Reddy's Labs, ONGC, Cipla, Coal India and BHEL gained 1-2 percent.

Market is giving signals that investors need to take money off the table across sectors regularly, Ajay Srivastava of Dimensions Consulting tells CNBC-TV18.

He feels the recent rally has been driven by a combination of global liquidity flows and short covering if positions.

According to Srivastava, fundamentals of the economy are still weak, though strong global liquidity could take stocks higher in the short term.

9:35 am Interview: The Cabinet Committee on Economic Affairs (CCEA), on Wednesday, approved American Tower Corp's acquisition of 50 percent stake in Viom Network for Rs 5,856.5 crore.

The deal, which was announced in October 2015, includes SREI Infra 's entire stake of 18.5 percent.

SREI will get about Rs 3,000 crore from the Viom sale, says Sunil Kanoria, the company's Vice Chairman. The company is yet to receive the money from the deal, he adds.

Funds from the deal will help SREI deleverage and grow its core business, he adds. The company is involved in lending to companies in infrastructure space.

The total transaction deal for the Viom tower is Rs 22,000 crore with each tower valuing at around Rs 50 lakh, he says.

9:15 am Market Check
The market fell marginally amid consolidation in early trade, tracking weakness in Asian peers. The Sensex declined 65.96 points to 24834.67 and the Nifty slipped 17.75 points to 7596.60.

HDFC lost 1.6 percent after the company proposed to make additional one-time special provision of Rs 450 crore in Q4.

It said additional provisioning is to build buffer against future unexpected risks, adding Q4 profit on sale of investment will be at Rs 1,520 crore against Rs 225 crore in same quarter last year. HDFC Bank was also down 0.6 percent.

ITC, ICICI Bank, Maruti Suzuki, Tata Motors, Reliance Industries and L&T were other early losers while ONGC, Axis Bank and Lupin outperformed.

The Indian rupee declined further, opening at 66.72 a dollar, down 7 paise compared to 66.65 a dollar in previous session.

Mohan Shenoi, Kotak Mahindra Bank said, "As expected, minutes of the Fed meeting in March were dovish. Oil prices moved higher on fall in US inventory. However, impact of this on currency markets was muted and the Rupee appreciation was halted by weak stock market."

Shenoi expects the USD-INR pair to trade in a range of Rs 66.50-66.80/USD today.

Asian markets were trading lower with the Shanghai and Nikkei down 0.5-0.7 percent.