Sensex, Nifty gain 5th day; Tata Motors, Coal India, TCS up 3-4%
30 May 2016
3:30 pm Market close: The Sensex is up 72.00 points or 0.3 percent at 26725.60, and the Nifty is up 21.85 points or 0.3 percent at 8178.50. About 1229 shares have advanced, 1377 shares declined, and 188 shares are unchanged.
Tata Motors, Coal India, NTPC, Hero MotoCorp and TCS are top gainers in the Sensex while BHEL, HDFC, Tata Steel, Maruti and Sun Pharma are losers. 3:10 pm Maruti halts production: The country's largest carmaker Maruti Suzuki India today announced temporary suspension of production following fire at the factory of its component supplier Subros Ltd.
The fire on Sunday at the Manesar facilities of Subros Ltd, which provides airconditioning compressors to Maruti Suzuki, has led to disruption of supplies.
"As a consequence, Maruti Suzuki India Ltd will have to temporarily suspend manufacture of cars at its facilities in Manesar and Gurgaon, starting second half Monday (May 30)," MSI said in a statement.
The company said MSI and Subros are jointly assessing the extent of damage to essential equipment.
2:59 pm Market Update: The Sensex rose 70.93 points to 26724.53 and the Nifty increased 21.70 points to 8178.35. The market breadth was negative as about 1322 shares declined against 1201 advancing shares on BSE.
2:40 pm ONGC in news: ONGC Videsh (OVL) is set to make a foray into oil trading and has signed an initial pact with the trading arm of Azerbaijan's state energy company SOCAR, a source privy to the agreement said.
OVL, the overseas acquisition arm of India's biggest explorer Oil and Natural Gas Corp , plans to initially sell its share of oil from the large Azeri, Chirag and Guneshli (ACG) group of fields in Azerbaijan through the new venture, the source said.
"At a later stage, OVL will look at opportunities to market its oil from other assets through the planned trading company with SOCAR," the source added.
2:20 pm Gold Update: The slide in both gold and silver continued unabated for the third day largely in tune with a weakening trend overseas amid tepid demand from jewellers and retailers in the domestic spot markets.
While gold dropped to Rs 28,665, silver dipped below the Rs 39,000-mark by falling Rs 500 to Rs 38,500 per kg due to reduced offtake by industrial units and coin makers.
Marketmen said sentiments remained weak largely in line with a weakening global trend as the prospect of higher borrowing costs in the US damped the appeal for the precious metals, strengthening the dollar.
Globally, gold fell 0.90 percent to USD 1,201.90 an ounce in Singapore, a level last seen in February.
2:00 pm Market Check
Equity benchmarks remained marginally higher in afternoon trade, driven by technology, auto and select banks. The broader markets also gained 0.4 percent each.
The 30-share BSE Sensex rose 86.24 points to 26739.84 and the 50-share NSE Nifty advanced 24.25 points to 8180.90.
Mahindra & Mahindra rebounded after pricing in lower-than-expected earnings in Q4. Profit increased 6 percent and revenue grew by 14.5 percent.
Infosys, Tata Motors, TCS, SBI, ICICI Bank, Hero Motocorp, Coal India and Dr Reddy's Labs gained 1-4 percent while HDFC, ITC, Asian Paints, Sun Pharma and Adani Ports fell 1-1.5 percent. BHEL plunged 4.5 percent.
1:45 pm Market outlook: The Indian markets have a lot of things going for it from the macro perspective but valuations may not be cheap once a stock investor gets done to researching ideas, says Sanjeev Prasad, Senior Executive Director and Co-Head Strategy, Kotak Institutional Equities. In an interview with CNBC-TV18, Prasad said earnings are likely to pick up going forward, thanks to an expected economic recovery in the second half of the fiscal and low base, but said cheap valuations were difficult to come across stocks and sectors. He picked out consumer discretionary and autos as offering moderate value but said most of the market's recent favourites -- investment cycle pick-up beneficiaries, NBFCs, oil marketing companies -- as stocks that had already run up. In the interview, Prasad also talked about changes that Kotak Insitutional Equities had carried out to its model portfolio.
1:30 pm Interview: A one-time employee stock ownership plan (ESOP) impacted margins slightly in the fourth quarter of FY16, says Dilip Bidani, CFO of Dr Lal PathLabs . The company’s margins contracted 110 basis points (bps) for the full year. Dr Lal PathLabs reported strong fourth quarter numbers with 15.1 percent jump in revenue to Rs 1197.7 crore and 23.6 percent rise in operational efficiency (EBITDA) to Rs 54.13 crore. Margins in Q4 expanded by 200 bps. Bidani expects margins to further dilute by 200-300 bps in coming two to three years. However, growth of the company will be better than the expected industry growth of 16-17 percent in FY17, he says. The debt-free company has a cash balance of Rs 294 crore in its books as of March 31, 2016 and hence, is no hurry to raise cash in the near-term.
The market is still rangebound as the Sensex is up 76.43 points or 0.3 percent at 26730.03, and the Nifty is up 20.70 points or 0.2 percent at 8177.35. About 1207 shares have advanced, 1220 shares declined, and 188 shares are unchanged.
Coal India, Tata Motors, Hero MotoCorp, SBI and Dr Reddy's Labs are top gainers while BHEL, HDFC, Asian Paints, Adani Ports and Tata Steel are losers in the Sensex.
Indian companies raised a record Rs 4.92 lakh crore last fiscal through private placement of corporate bonds to meet business needs, a surge of six percent from the preceding year.
Firms raked in Rs 4,92,047 crore in 2015-16 through private placement of corporate bonds, higher than Rs 4.66 lakh crore garnered in the preceding financial year ended March 2015, as per a report by Prime Database. This was the highest ever fund raising by companies in a financial year since 2001-02, when the firms had raked in Rs 45,427 crore.
12:59 pm Market Update: Equity benchmarks continued to trade with modest gains. The Sensex advanced 48.26 points to 26701.86 and the Nifty rose 10.60 points to 8167.25 amid consolidation.
12:50 pm IPO: GoAir is likely to file draft red herring prospectus for its IPO in Q3FY17 and enterprise valuation is pegged at about Rs 4,000 crore, reports CNBC-TV18 quoting unnamed sources. GoAir is likely to raise Rs 1,000-1,200 crore via IPO and may dilute around 24 percent stake.
Sources say GoAir has appointed 3 bankers to finalise IPO contours.
12:40 pm Europe opens: European markets opened mixed today as investors digest comments from Federal Reserve Chair Janet Yellen who suggested a rate hike in the next few months is appropriate.
The pan-European STOXX 600 was flat. Germany's DAX index was around 0.16 percent higher while the French CAC 40 was down 0.14 percent. London's FTSE 100 is closed today due to a public holiday.
12:20 pm Buzzing: Claris Lifesciences shares are locked at 20 percent upper circuit at Rs 201.90 on Monday after getting establishment inspection report (EIR) from the US health regulator for manufacturing facility in Ahmedabad.
"The US Food & Drug Administration has concluded that the inspection stands closed and facility was found to be acceptable," the pharma company said in its filing.
The USFDA had conducted audit at Claris' manufacturing facility in May 2015 and the company had undertaken appropriate steps to address observations it had received from these audits.
Having received EIR from the USFDA potentially clears path for the company to receive product approvals (ANDAs) for the US, the company said.
12:00 pm Market Check
Equity benchmarks were off day's high after last week's stellar rally. The Sensex rose 66.03 points to 26719.63 and the Nifty gained 14.30 points at 8170.95.
The BSE Midcap and Smallcap indices also gained quarter of a percent but the market breadth remained flat.
Hindalco Industries was the biggest gainer on the Nifty, up 11 percent as its aluminum business delivered a strong performance on both the volume and EBIT front. However, BHEL lost 4 percent after reporting a disappointing quarter with EBITDA margin of 3.64 percent and management said Rs 50,000 crore of orders are stressed.
Tech Mahindra gained nearly 4 percent after it acquired UK based BFSI company Target for around Rs 1,100 crore. Analysts say it is a small but synergistic acquisition. Coal India surged 4 percent after the board of directors approved revision of coal prices by approximately 6.29 percent over current price but fourth quarter numbers were a miss.
Sun Pharma declined 1.5 percent ahead of fourth quarter earnings. A CNBC-TV18 poll expects strong quarter with exclusivity sales from Gleevec generic boosting margins. Tata Motors gained 4 percent as analysts expect a stable quarter for the company with improvement in commercial vehicle segment driving standalone revenues. Steady growth in UK & China is expected to boost JLR volumes.
Zee Learn surged 5 percent while Tree House tanked 7 percent after Zee Learn said Tree House numbers require careful evaluation and they need to evaluate potential impact of Tree House merger on the company.
11:55 am Buzzing: Shares of Hindalco rallied 11 percent intraday, riding high on its March quarter results. Boosted by strong aluminium business, the company's net profit zoomed 124 percent to Rs 356.3 crore in January-March quarter from Rs 159 crore in year-ago period. During the quarter, its total turnover slipped 8 percent at Rs 8667.9 crore compared to Rs 9371.6 crore year-on-year. Revenue in Q4 was lower due to a sharp decline in aluminium and copper realisations. However, a strong increase in aluminium volumes following increased production and value addition across businesses helped it to partially offset the impact of sharp fall in realisations.
11:45 am Moody's view on banks: Global rating agency Moody’s expects banks in the Asia-Pacific region (excluding Japan) to feel the ripple effects of the problems in commodities-related sector.
The asset quality and profitability of banks in Mongolia, Singapore, Korea, Indonesia and India are exposed to the more vulnerable parts of the energy/commodity sectors, such as oil services, offshore marine, shipping and shipbuilders, and metals & mining and steel, says the Moody’s report.
“For metals and mining, banks in Mongolia, India, Indonesia and China are
more exposed,” says the report. Moody’s expects 2016 to be another challenging year for metals and mining firms, leading to higher problem loans and weak recoveries for existing problem and restructured loans.
11:30 am FRBM: The panel appointed by the central government to review the 12-year-old Fiscal Responsibility and Budget Management (FRBM) Act will likely go into the subject of central as well as state finances, its Chairman NK Singh says. In an exclusive interview with CNBC-TV18's Shereen Bhan, Singh, a former revenue secretary and Rajya Sabha MP, said the panel held its first meeting on Saturday to discuss its terms of reference. The FRBM Act, enacted in 2003, deals with the subject of fiscal policy, and seeks to curb the country's fiscal deficit. Its targets, to bring down fiscal deficit to 3 percent by March 2008 were suspended by the UPA government in the aftermath of the global financial crisis, but it has seen several complaints regarding the rigidity of constraints it lays down on spending. In the Union Budget speech, Finance Minister Arun Jaitley had called for the need to review the FRBM Act, even consider the possibility of having a fiscal deficit range, as opposed to a single target.
Don't miss: Hindalco rallies 11% as aluminium volumes drive Q4 profit
After briefly touching 8200, the Nifty has given up its gains a bit. The 50-share index is up 22.80 points or 0.3 percent at 8179.45 and the Sensex is up 69.63 points or 0.3 percent at 26723.23.
Coal India, Tata Motors, Infosys, TCS and Dr Reddy's Labs are top gainers while BHEL, HDFC, Adani Ports, NTPC and Lupin are major losers in the Sensex.
Gold prices fell by Rs 115 to Rs 28,726 per 10 gram in futures trading today as participants cut down their bets after the precious metal fell for the ninth day in overseas market.
Analysts attributed the fall in gold futures to trimming of positions by traders, tracking a weak trend in global market as the prospect of higher borrowing costs in the US damped the appeal for the precious metals, strengthening the dollar.
10:58 am Market Update: Equity benchmarks continued to trade higher. The Sensex rose 67.28 points to 26720.88 and the Nifty advanced 21.65 points to 8178.30.
10:50 am Interview: A one-time employee stock ownership plan (ESOP) impacted margins slightly in the fourth quarter of FY16, says Dilip Bidani, CFO of Dr Lal PathLabs . The company’s margins contracted 110 basis points (bps) for the full year.
Dr Lal PathLabs reported strong fourth quarter numbers with 15.1 percent jump in revenue to Rs 1197.7 crore and 23.6 percent rise in operational efficiency (EBITDA) to Rs 54.13 crore. Margins in Q4 expanded by 200 bps.
Bidani expects margins to further dilute by 200-300 bps in coming two to three years. However, growth of the company will be better than the expected industry growth of 16-17 percent in FY17, he says.
The debt-free company has a cash balance of Rs 294 crore in its books as of March 31, 2016 and hence, is no hurry to raise cash in the near-term.
10:35 am Earnings Estimates: NTPC 's fourth quarter earnings are expected to be tepid as profit is seen falling 15 percent year-on-year to Rs 2,490 crore and revenue may decline 5 percent to Rs 18,322 crore, according to average of estimates of analysts polled by CNBC-TV18. Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) is likely to increase 5 percent to Rs 4,895 crore and margin may expand 263 basis points to 26.7 percent compared to year-ago period.
Adjusted profit may decline on lower efficiency gains and other income. Year-ago period base was higher due to Q4 fixed cost recovery being higher.
Other income is expected to be plunge 33 percent YoY as change in CERC's regulations has reduced incentives earned by NTPC.
10:20 am Market Expert: The Indian markets have a lot of things going for it from the macro perspective but valuations may not be cheap once a stock investor gets done to researching ideas, says Sanjeev Prasad, Senior Executive Director and Co-Head Strategy, Kotak Institutional Equities.
In an interview with CNBC-TV18, Prasad said earnings are likely to pick up going forward, thanks to an expected economic recovery in the second half of the fiscal and low base, but said cheap valuations were difficult to come across stocks and sectors.
10:00 am Market Check
Equity benchmarks were marginally higher in morning trade with the Nifty reclaiming 8200, supported by technology, select banks and auto stocks.
The 30-share BSE Sensex rose 72.40 points to 26726 and the 50-share NSE Nifty advanced 21.30 points to 8177.95. The market breadth remained positive as about 1060 shares advanced against 762 declining shares on Bombay Stock Exchange.
Hindalco shot up 11 percent after stellar performance in Q4. Profit more than doubled to Rs 356.3 crore during the quarter from Rs 159.5 crore YoY with operating profit margin rising 450 basis points at 13.5 percent.
Coal India also gained 4.5 percent as the board of directors approved revision of coal prices by approximately 6.29 percent over current price.
9:55 am Gold: Gold fell to its lowest in over three months early as the dollar hit a one-month high against the yen after US Federal Reserve chief Janet Yellen said the central bank could raise interest rates in the coming months. The Fed should raise interest rates "in the coming months" if the economy picks up as expected and jobs continue to be generated, Yellen said on Friday, bolstering the case for a rate increase in June or July.
9:45 am Result poll: Drug major Sun Pharmaceutical Industries is expected to report strong earnings in January-March quarter with profit surging 112.6 percent to Rs 1,888.4 crore, according to average of estimates of analysts polled by CNBC-TV18. Earnings will be announced on May 30. Revenue is seen rising 29 percent year-on-year to Rs 7,925.3 crore in Q4, driven by Gleevec generic drug (anti-cancer) sales that may be around USD 150 million during the quarter. Sun Pharma launched Gleevec generic on February 1, 2016 with 180-day exclusivity and it has already captured around 40-50 percent market share.
9:30 am Interview: State Bank of India ’s guidance on potential slippages of Rs 40,000 crore or 2.7 percent takes into account loans other than those to large and mid-sized corporate accounted for in the stated watchlist of Rs 31,000 crore, clarifies B Sriram, MD & Group Executive-National Banking, on the confusion between the two numbers given out by the bank in a conference call post its quarter earnings announcement. In an interview to CNBC-TV18, Sriram says 70-75 percent of the watchlist amount could become non-performing assets (NPAs). The bank has exposure of over Rs 1.36 lakh crore to the power sector with nearly Rs 60,000-70,000 crore to good companies, he says. Non-performing loans from the sector would be only 2 percent of total exposure.
The marlet has opened strong supported by index heavyweights. The Sensex is up 111.59 points or 0.4 percent at 26765.19, and the Nifty is up 35 points or 0.4 percent at 8191.65. About 661 shares have advanced, 281 shares declined, and 35 shares are unchanged.
Coal India, SBI, Tata Steel, Adani Ports and Sun Pharma are top gainers while BHEL, ITC, Asian Paints, L&T and HDFC are losers in the Sensex.
The Indian rupee opened lower by 18 paise at 67.21 per dollar versus 67.03 Friday.
Himanshu Arora of Religare said, "The rupee is expected to strengthen against the dollar today. The rupee has weakened around 1.5 percent this year, while FIIs have bought USD 2.03 billion from the local equity market and sold USD 1.16 billionn in debt markets."
The US dollar index hit two-month highs on Friday after US Federal Reserve Chair Janet Yellen left the door open to an interest rate increase in the coming months.
Asian stocks trading mixed, despite futures pointing to a higher open. Over the weekend, a Japanese government source told news media that Prime Minister Shinzo Abe would most likely postpone the consumption tax hike for fear of upsetting the fragile economy.