Nifty ends above 7900, Sensex gains 190 points; Infosys zooms 6%
18 April 2016
3:30 pm Market closing: The Nifty has ended above 7900, first time after January 1. The 50-share index was up 64.25 points or 0.8 percent at 7914.70 and the Sensex closed up 189.61 points or 0.7 percent at 25816.36.
Infosys, Cipla, Bharti Airtel, HDFC and Lupin were top gainers while GAIL, SBI, Hero, ONGC and ICICI Bank were losers in the Sensex.
3:20 pm e-auction to begin: Next week, Coal India will hold the first phase of special e-auction for the ongoing fiscal to provide coal to power producers as part of the government's efforts to ensure round-the-clock electricity to all.
The special forward e-auction for 2016-17 for power producers including captive power plants (CPP)-Phase I would be held on April 27-28, Coal India (CIL) said in a notice.
The reserve price for power sector consumers will remain at 10 percent over the notified price of coal for power sector and for CPPs it will remain at 10 percent over the notified price for non-power sector, CIL said in another notice.
3:00 pm Market Update: The Sensex climbed 198.04 points or 0.77 percent to 25824.79 and the Nifty advanced 65.45 points or 0.83 percent to 7915.90.
2:50 pm Drug launch: Pharma major Lupin's US subsidiary, Lupin Pharmaceuticals Inc has launched its FyavolvTM tablets (Norethindrone Acetate and Ethinyl Estradiol tablets USP, 0.5 mg/0.0025 mg and 1 mg/0.005 mg) having received an approval from the United States Food and Drug Administration (FDA) earlier to market a generic version of Warner Chilcott's Femhrt tablets.
It is indicated for the treatment of moderate to severe vasomotor symptoms due to menopause and prevention of postmenopausal osteoporosis.
2:40 pm Earnings: LIC Housing Finance's fourth quarter profit missed analysts expectations, rising 18.5 percent to Rs 448 crore compared to Rs 378.2 crore in year-ago period, impacted by higher tax expenses and provisions.
Net interest income, the difference between interest earned and interest expended, grew by 26.5 percent to Rs 822 crore from Rs 650 crore in same period, which was in line.
According to analysts polled by CNBC-TV18, profit was estimated at Rs 475.2 crore and net interest income at Rs 840 crore for the quarter.
LIC Housing Finance said the board members approved recommendation of dividend for financial year 2015-2016 at Rs 5.50 per share, adding dividend will be paid on or after August 20, 2016.
2:20 pm Acquisition: JK Tyre & Industries has completed the Rs 2,195 crore acquisition of Cavendish Industries, a Kesoram Industries unit, enhancing its position in the domestic market, especially the truck and bus radial segment.
"With the completion of the acquisition of Cavendish Industries we have further strengthened our position in the truck and bus radial segment. It has also given us entry into two and three wheeler vertical," JK Tyre & Industries Chairman and MD Raghupati Singhania told reporters here.
The acquisition is in line with strategic vision of JK Tyre to become one of the leading tyre companies of the world having a well rounded portfolio of product offerings, he added.
The acquisition brings an additional capacity of 100 lakh tyres to the JK Tyre, he added.
2:00 pm Market Check
Equity benchmarks gained further in afternoon trade with the Sensex rising 162.48 points to 25789.23 and the Nifty climbing 48.95 points to 7899.40, aided by index heavyweights.
The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising around a percent each but the market breadth was slightly positive. About 1351 shares advanced against 1133 declining shares on Bombay Stock Exchange.
Oil prices pared some of the over 5 percent losses seen in early Asian hours, after the world's largest oil-producing countries failed to strike a deal to freeze output. US crude futures were down 4.6 percent at USD 38.49 a barrel, after falling over 5.7 percent in early morning trade. Global benchmark Brent was down 4.34 percent at USD 41.23, retracing some of its more than 5 percent loss from earlier.
European stocks also slipped today with sentiment curbed by falling oil prices. London's FTSE 100 index was off 0.5 percent lower, while France's CAC slipped 0.7 percent, and Germany's DAX fell 0.5 percent.
1:55 pm PSU bank outlook: Cautioning against higher capex by state-owned companies, Standard & Poor's today said poor returns on such investments and increase in leverage could weaken their credit profiles in the long term and increase their dependence on the government for support.
In its report titled 'Indian government-owned companies' credit quality will deteriorate in the long run', S&P Ratings Services said increasing capital spending may have its short-term benefits, but may not be desirable over the long term.
"Poor returns on capital investments and increase in leverage could weaken the stand-alone credit profiles of India's government-owned companies in the long term. It will also increase these companies' dependence on the government for support," S&P credit analyst Mehul Sukkawala said.
1:30 pm IPO line-up: The IPO lane is getting increasingly crowded as companies have lined up offers worth more than Rs 15,000 crore in the current fiscal to fund their business expansion, meet working capital requirements and make loan repayments. Dilip Buildcon, New Delhi Centre for Sight, Ujjivan Financial Services, Quess Corp, Hinduja Leyland Finance and Seaways Shipping and Logistics are among the ones that plan to launch share-sale offers in the coming months. At present, 25 companies plan to raise Rs 12,500 crore and have secured approval of the Securities and Exchange Board of India (Sebi), Prime Database Managing Director Pranav Haldea said.
The market has managed to sustain rally supported by IT stocks. The Sensex is up 166.38 points or 0.6 percent at 25793.13, and the Nifty is up 49.10 points or 0.6 percent at 7899.55. About 1323 shares have advanced, 1084 shares declined, and 151 shares are unchanged.
Infosys, Lupin, NTPC, Cipla and ITC are top gainers while ONGC, SBI, Hero MotoCorp, ICICI Bank and Bajaj Auto are losers in the Sensex.
Meanwhile, amid rising political differences between Iran and Saudi Arabia, Brent crude prices may further dip to USD 27 per barrel, says Juerg Kiener, MD & CIO, Swiss Asia Capital.
Speaking to CNBC-TV18, Kiener says credit issues may return if inventory remains unused and production cycle is uncontrolled. He is of the view that the yield structure does not make sense just as yet. However, oil price may rebound to current levels going forward.
12:55 pm Market Update: Equity benchmarks maintained uptrend in afternoon trade with the Sensex rising 128.05 points to 25754.80 and the Nifty climbing 39.85 points to 7890.30.
About 1313 shares advanced against 1078 declining shares on Bombay Stock Exchange.
12:45 pm Europe opens: European stocks opened lower after no deal was reached between major oil producers over the weekend, to freeze oil output in order to support global oil prices.
London's FTSE 100 index opened 1.3 percent lower, while France's CAC slipped 1.4 percent, and Germany's DAX fell 1.2 percent, around the open.
12:40 pm Rate cut likely?: The Reserve Bank is likely to cut key rates by 25 basis points in its policy review meeting on August 9, largely owing to benign inflation, low IIP growth and good monsoon forecast, a report says.
According to the global financial services major Bank of America Merrill Lynch (BofA-ML), a further easing of 25 bps is likely as CPI inflation came in at a below-expected 4.8 percent for March, and February IIP grew an anemic 2 percent.
"We have grown more confident of our call for the RBI to cut policy rates 25 bps on August 9," it said in a research note.
Earlier this month, RBI reduced its policy rate by 0.25 percent to 6.5 percent -- its lowest level in more than five years. While this was the first rate cut after a gap of six months, RBI has lowered its rate by 1.5 percent cumulatively since January 2015.
However, the industry still wants further rate cuts from RBI to boost investment.
12:17 pm Buzzing: Shares of Alkem Lab plunged nearly 8 percent amid concerns that the European Medicines Agency (EMA) is reviewing some of its drugs following a red flag over clinical trial studies.
The review of the drugs, which include anti-biotics cefuroxime and rulizole used to treat neurological disorder amyotrophic lateral sclerosis and sold both by Alkem and Slovenia's Krka, has been ordered after the German drug regulator raised concerns about trial study data.
Alkem conducted trials on the drugs at its Taloja facility in Maharashtra for Krka.
12:00 pm Market Check
The market continued to see buying interest amid weak global cues, supported by index heavyweights Infosys, HDFC Bank and ITC. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent each.
The 30-share BSE Sensex advanced 111.93 points to 25738.68 and the 50-share NSE Nifty rose 31.90 points to 7882.35.
Infosys remained its top position in the buying list on Sensex, up 6.5 percent after reporting better-than-expected profit and operating profit performance. Even its FY17 guidance (11.8-13.8 percent dollar revenue growth) is ahead of Nasscom's industry growth forecast of 10-13 percent.
TCS was down 1.5 percent after the company has been slapped a fine in a trade secret lawsuit by US grand Jury.
HDFC Bank, ITC, HDFC and Sun Pharma gained more than half a percent while ICICI Bank, SBI, ONGC, Adani Ports and Hero Motocorp declined around 2 percent.
WPI inflation in March came in at negative 0.85 percent against negative 0.91 percent in previous month.
11:55 am Interview: The board of Suprajit Engineering has approved amalgamation of Phoenix Lamps with the company. The merger ratio is set at 4 shares of the company for every 5 shares of Phoenix, says Ajith Rai, CMD, Suprajit Engineering.
Speaking to CNBC-TV18, Rai says the merger price of Phoenix at Rs 110 per share represents a premium of 23.5 percent.
The company expects consolidated growth to be 5-10 percent better than industry, post merger on the back of easier cross-selling of products, he says. With a strong pan-India presence, Rai believes that the consolidated sales of the combined entity for FY17 is likely to be over Rs 1,100 crore and the deal will be a win-win for both the companies involved.
11:30 am Boardroom: Murali M Natrajan, MD & CEO, DCB Bank , is very hopeful that the growth momentum of the bank will continue to be supported by stable asset quality and branch expansions, said Natrajan in an interview to CNBC-TV18. "If you continue to remain faithful to our strategy of retail and SME banking and small ticket, then asset quality should remain stable," he said. The bank, in April, opened its 200th branch. The bank's profit in January-March quarter increased 10.4 percent year-on-year to Rs 69.5 crore, driven by net interest income and other income but higher provisions limited growth.
Pumped up by good Q4 results, Infosys is adding fuel to the market. IT index is up almost 3 percent from previous close. The Sensex is up 123.40 points or 0.5 percenr at 25750.15, and the Nifty is up 37 points or 0.5 percent at 7887.45. About 1255 shares have advanced, 875 shares declined, and 125 shares are unchanged.
Infosys, Cipla, Lupin, Hindalco and HDFC Bank are top gainers while ONGC, TCS, SBI, ICICI Bank and GAIL are losers in the Sensex.
Gold rose by Rs 119 to Rs 29,282 per ten gram in futures trading today as speculators raised their bets, tracking a firming trend overseas. The precious metal has risen 16 percent this year amid financial-market tumult and concerns over the outlook for global economic growth at the start of the year.
Crude tumbled by the most in two months, while Asian equities slumped from the highest close in four months, after the talks on Sunday between the world's oil biggest producers in Doha ended without any agreement.
10:59 am Market Update: The Sensex rose 126.36 points to 25753.11 and the Nifty advanced 37.90 points to 7888.35, led by Infosys and ITC.
About 1227 shares advanced against 865 declining shares on Bombay Stock Exchange.
10:55 am Buzzing: Shares of Gravita India rose 4.3 percent intraday as it has started commercial production of aluminium alloys.
The company has made an entry into aluminium recycling at its new recycling plant at Phagi, Jaipur with an initial capacity of 6000 MTPA of aluminium alloy production.
The company will be manufacturing aluminium automobile alloy by recycling aluminium scrap.
"This entry into aluminium recycling will not only help in reducing India's carbon foot prints but will also enhance the recycling DNA of the group," company said in release.
10:40 am Oil Update: Crude oil futures fell sharply by Rs 129 to Rs 2,569 per barrel today as speculators cut down their bets amid weak cues from the Asian markets after Doha output talks failed.
Analysts said trading sentiment dampened after the world's top producers failed to reach an agreement on capping output aimed at easing a global supply glut during a meeting in Doha. Hopes the world's main producer cartel, OPEC and other major exporters like Russia would agree to freeze output has helped scrape oil prices off the 13-year lows they touched in February. But, crude tanked after top producer Saudi Arabia walked away from the talks, which many hoped would ease a huge surplus in world supplies, because of a boycott by its rival Iran.
Oil tumbled in early Asian trade after the collapse of Sunday's talk, with prices dropping as much as seven per cent in opening deals.
10:20 am Interview: Murali M Natrajan, MD & CEO, DCB Bank , is very hopeful that the growth momentum of the bank will continue to be supported by stable asset quality and branch expansions, said Natrajan in an interview to CNBC-TV18.
The bank, in April, opened its 200th branch.
The bank's profit in January-March quarter increased 10.4 percent year-on-year to Rs 69.5 crore, driven by net interest income and other income but higher provisions limited growth.
Natrajan is confident of the bank further doubling its loan book in the next 3-4 years. The bank has been consistently growing at 20 percent-plus in its loan portfolio.
The bank is also ready to be part of the Unified Payment Bank (UPI), said Natrajan.
10:00 am Market Check
After an early morning gush, the market has cooled off a bit. The Sensex is up 80.73 points or 0.3 percent at 25707.48, and the Nifty up 19.50 points or 0.2 percent at 7869.95. About 978 shares have advanced, 849 shares declined, and 96 shares are unchanged.
Infosys, Lupin, TCS, SBI, ICICI Bank and GAIL are major losers while Infosys, Lupin, M&M, Bharti Airtel and Cipla are gainers in the Sensex.
Meanwhile, oil prices may be tanking in the wake of a failed attempt to freeze production, but Citi is betting on a recovery in prices. Citi is forecasting declining supply from some producers, such as Venezuela and Nigeria, while inventories may finally see some drawdowns. For the third quarter, Citi now forecasts Brent at USD 46 a barrel and WTI at USD 45, up from its previous forecasts of USD 41 and USD 40, respectively. For the fourth quarter, it held its forecasts steady at USD 52 a barrel for Brent and USD 50 for WTI.
9:55 am Mallya woes: Even as former liquor baron Vijay Mallya continues to face pressure from the Enforcement Directorate, UB Group has denied charges that he misappropriated nearly Rs 430 crore from a loan of Rs 900 crore extended to Kingfisher airlines by IDBI Bank to buy property abroad.
The UB Group said that the loan of Rs 900 crore was extended for legitimate business purposes and assured that it will provide full details of the foreign exchange remittances in the coming days.
"In order to explain foreign exchange remittances all of which have been fully accounted for, we will provide full details in the next few days," UB Group said in a statement. It said the audited accounts of Kingfisher Airlines show that the money was borrowed for legitimate business purpose and that the allegation was "shocking".
9:45 am Oil market: A meeting of oil-rich countries in Qatar that had been expected to boost crude prices by freezing production fell apart as Iran stayed home and vowed to increase its output despite threats by Saudi Arabia.
Oil prices, which hit a 12-year low in January by dipping under USD 30 a barrel, had risen above USD 40 in recent days, buoyed by the bullish talks surrounding the Doha summit.
But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling.
9:30 am Market outlook: It is not sensible yet to trade stocks only on hopes of a good monsoon, says Sandeep S Shenoy, Strategist at Pioneer Investcorp. "Do not jump in now for there will be several opportunities in months to come," he says.
Speaking to CNBC-TV18, Shenoy says though the monsoon may not be as bad as last year, it will take at least three quarters for the news [rain forecast] to actually translate into anything 'meaningful'.
He is of the view that fast-moving consumer goods (FMCG) and the auto sector would gain from the news and good valuations for these stocks will facilitate better trade.
The market has opened sharply higher on Monday with the Sensex rising more than 200 points following Infosys' Q4 earnings but could not sustain gains for long due to weakness in global peers.
The Sensex rose 10.39 points to 25637.14 while the Nifty fell 6.15 points to 7844.30.
Infosys surged 7 percent post Q4 earnings and FY17 guidance while TCS fell nearly 2 percent after US grand Jury slapped a fine of USD 940 million on two Tata group companies in a trade secret lawsuit. TCS will also deliver its Q4 earnings today later in the day.
ITC gained nearly 2 percent as the company will resume manufacturing of cigarettes at its factories soon following a favourable High Court order. Manufacturing had been suspended since April over the large pictorial warning issue.
The Indian rupee opened flat at 66.63 per dollar today against Wednesday's closing of 66.64.
According to Ashutosh Raina of HDFC, the failure of talks between the oil exporting countries in Doha can result in return of some risk off sentiment, in turn impacting currencies.
However, he expects the USD-INR currency pair will continue trading in 66-67/dollar range on the back of strong portfolio flows.
Commodity currencies slumped while the safe-haven yen soared after global oil producers fail to agree on an output freeze, sending oil prices tumbling anew.
Asian markets were trading weak as oil tumbled after a summit of top oil producers in Doha failed to reach an agreement to freeze production.
Brent crude slumped 5 percent to trade below USD 41 per barrel.
Japan shares took a hit from large earthquakes. Wall Street on Friday dipped as the oil price decline weighed on energy shares and Apple dragged on the market. But major indices still posted gains for the week.