Sensex sinks 257 points, Nifty ends at 8204; Infosys drags, RIL up

09 Jun 2016

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3:30 pm Market closing: Equity benchmarks fell 1 percent on profit booking and global growth worries. The Sensex fell 257.20 points to 26763.46 and the Nifty lost 69.45 points to 8203.60.

The market breadth was marginally negative as about 1325 shares declined against 1236 advancing shares on Bombay Stock Exchange.

Infosys topped selling list, down over 4 percent followed by ITC, HDFC, ICICI Bank, TCS, L&T and HUL with 1-2 percent loss. However, Reliance Industries, ONGC, NTPC, Coal India and Cipla outperformed, up 1.5-2 percent.

3:00 pm Market Update: Equity benchmarks continued to bleed in afternoon trade. The Sensex plunged 253.16 points or 0.94 percent to 26767.50 and the Nifty fell 67.85 points or 0.82 percent to 8205.20.

Infosys (-5 percent), Ambuja Cements (-3 percent), ITC (-2 percent) and Dr Reddy's Labs (-2 percent) were the big losers in the Nifty. Other laggards in the index were Kotak Mahindra Bank (-1 percent), Aurobindo Pharma (-1 percent), L&T (-1 percent) and Yes Bank (-1 percent).

Gainers included Reliance (2 percent), BPCL (2 percent), Hindalco (2 percent) and NTPC (2 percent).

In sectoral performance as reflected by the respective indices, IT (-2.4 percent), FMCG (-1.5 percent), capital goods (-0.8 percent) and auto (-0.5 percent) were under pressure, while oil & gas (1.3 percent), metals (1.1 percent), power (0.4 percent) and consumer durables (0.4 percent) gained.    

European shares were trading weak with Germany's DAX down 119 points or 1.2 percent at 10097, France's CAC down 38 points at 4410, and UK's FTSE down 49 points at 6252.

2:45 pm Buzzing: State-run oil marketing company Bharat Petroleum Corporation (BPCL) shares rallied 2.5 percent intraday as foreign institutional investors can invest upto 49 percent in the company against 24 percent earlier.

The Reserve Bank of India on Wednesday notified that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 49 percent of the paid up capital of BPCL under the portfolio investment scheme.

The company had passed resolutions at its board of directors' level on April 11 and a special resolution by the shareholders on June 2, agreeing for enhancing the limit for the purchase of its equity shares by FIIs/RFPIs.

2:35 pm Infosys sinks 4.5%: An increase in visa and compensation costs is likely to impact margins by 200 basis points in the first quarter of FY17, UB Pravin Rao, COO of  Infosys   said.

Speaking to CNBC-TV18, Rao said he expects margins will likely stay pressured in the near term given the "commoditisation" that has taken place in the industry, and said they would pick up once investments into machine learning and automation fructify.

The Infosys COO, however, was confident of the company achieving its FY17 FY17 revenue growth guidance of 11.5-13.5 percent despite conceding that the overall revenue environment remains pressured too.

2:25 pm Europe Update: European stocks traded lower as Asian markets traded mostly weaker with sentiment hit by concerns over the health of the global economy.

The pan-European STOXX 600 was down 1.03 percent.

The World Bank cut its 2016 global growth forecast on Wednesday to 2.4 percent from the 2.9 percent estimated in January.

2:00 pm Market Check
Selling pressure intensified on Dalal Street taking the Nifty below 8200. The 50-share index is down 77.70 points or 0.9 percent at 8195.35 and the Sensex is down 290.82 points or 1 percent at 26729.84. About 1149 shares have advanced, 1264 shares declined, and 183 shares are unchanged.

FMCG, IT, Auto and Bank index are falling sharply. OIL & Gas index has outperformed. ONGC, Reliance, NTPC, Cipla and GAIL are top gainers while Infosys, ITC, Dr Reddy's, HUL and Hero MotoCorp are losers in the Sensex.

An economic recovery is firmly underway and finally showed in March quarter numbers but that a lot of it is already in the price, says Neelkanth Mishra, Head - Equity Strategy, India, Credit Suisse.

In an interview with CNBC-TV18, Mishra said economic recovery had proceeded from being "green shoots" to "shrubs" now and this would show up in about 15 percent growth in earnings for fiscal year 2016-17.

"But is this the roaring bull market that people have been waiting for where you could buy the public sector banks and industrials and junk stocks? We are not there yet. It is quite a while away," he said.

1:45 pm Interview: UFO Moviez is targeting a 3-4 percent growth in screen numbers in FY17, said Kapil Agarwal, Joint MD of the company.

Moreover, a 30 percent ad revenue growth is expected for the company in the same period, he told CNBC-TV18. The real growth in advertising sector will come from increase in advertising minutes and prices. Further, he believes the company can grow 6 times in the long term if the growth is volumes-lead.

Talking on Caravan Talkies, he said the business will take time as only 91 of their vans are operational and with advancing monsoons, there could be a drag in profitability in the second quarter. This may turn put to be EBITDA positive in FY17 and EPS accretive next year.

1:30 pm Concern for IT? The state of Tamil Nadu has allowed employees of IT companies to form trade unions, by bringing the sector under the ambit of the Industrial Disputes Act, 1947. The move is unlikely to result in significant costs for IT companies immediately, said Rahul Jain of Systematix Shares & Stocks. But former Infosys board member TV Mohandas Pai criticised the move, saying that an industry that has 15-20 percent attrition levels -- where employees can move out if they are not satisfied -- such a law was not required. "The IT industry caters to the global marketplace and there we need certainty, we need 24x7 service because we do very critical work," he said. "If you don't have proper legal protection for work to be done in 24 hours and you are susceptible to several demands from employees, then, it is going to be troublesome."

The Sensex is down 212.58 points or 0.8 percent at 26808.08, and the Nifty down 55.65 points or 0.7 percent at 8217.40. About 1214 shares have advanced, 1118 shares declined, and 170 shares are unchanged.

Reliance, NTPC, ONGC, Cipla and Tata Steel are gainers in the Sensex while Infosys, HUL, Hero MotoCorp, ITC and Dr Reddy's are losers in the Sensex.

Domestic passenger car sales dipped marginally by 0.86 percent to 1,58,996 units in May from 1,60,371 units in the year-ago month.

Motorcycle sales last month rose 3.34 percent to 9,85,158 units from 9,53,311 units a year earlier, according to the data released by the Society of Indian Automobile Manufacturers (SIAM).

Total two-wheeler sales in May rose 9.75 percent to 15,15,556 units. Sales of commercial vehicles rose 16.89 percent to 57,089 units in May, SIAM said.

12:59 pm Market Update: The Sensex extended losses, down 226.11 points or 0.84 percent to 26794.55 and the Nifty falling 56.55 points or 0.68 percent to 8216.50.

12:40 pm Europe opens: European stocks opened lower as Asian markets traded mostly weaker.

The pan-European STOXX 600 was down 0.44 percent.

European shares did not emulate modest gains seen in the US on Wednesday and followed the cautious tone set in Asia's trading session. Markets in the region traded mostly lower as a weaker dollar weighed on Japan's shares and South Korean stocks failed to get a boost from a surprise interest rate cut.

12:20 pm Credit Suisse on economy: An economic recovery is firmly underway and finally showed in March quarter numbers but that a lot of it is already in the price, says Neelkanth Mishra, Head - Equity Strategy, India, Credit Suisse.

In an interview with CNBC-TV18, Mishra said economic recovery had proceeded from being "green shoots" to "shrubs" now and this would show up in about 15 percent growth in earnings for fiscal year 2016-17.

"But is this the roaring bull market that people have been waiting for where you could buy the public sector banks and industrials and junk stocks? We are not there yet. It is quite a while away," he said.

12:00 pm Market Check
The market continued to fall in noon trade due to selling pressure in technology, FMCG and HDFC Group stocks but energy, metals and PSU banks outperformed.

The Sensex plunged 181.34 points to 26839.32 and the Nifty fell 46.20 points to 8226.85 while the broader markets outperformed. The BSE Midcap and Smallcap indices were up 0.05 percent and 0.4 percent, respectively.

The market breadth remained positive as about 1195 shares advanced against 1009 declining shares on Bombay Stock Exchange.

With the market convincingly crossing 8,250, it is poised to close Nifty June expiry above 8,350 levels, says Vineet Bhatnagar, MD of PhillipCapital.

NSE FMCG and IT indices fell over a percent while Energy and Metal gained 1.6 percent each. Nifty PSU Bank rose over a percent as OBC, PNB, IOB, Bank of India, Andhra Bank, Syndicate Bank, Allahabad Bank, Union Bank and Canara Bank rallied 2-4 percent. State Bank of India gained 0.5 percent.

11:55 am FII view: An economic recovery is firmly underway and finally showed in March quarter numbers but that a lot of it is already in the price, says Neelkanth Mishra, Head - Equity Strategy, India, Credit Suisse.

In an interview with CNBC-TV18, Mishra said economic recovery had proceeded from being "green shoots" to "shrubs" now and this would show up in about 15 percent growth in earnings for fiscal year 2016-17.

"But is this the roaring bull market that people have been waiting for where you could buy the public sector banks and industrials and junk stocks? We are not there yet. It is quite a while away," he said.

11:45 am Buzzing: Shares of Eros International Media rallied 8 percent intrday. Shareholders are cheering up its suceess of Housefull 3 and expansion of its digital distribution. The stock gained 24 percent in last 15 days but lost 57 percent in last one year period.

The company's digital over-the-top distribution service, Eros Now, has now expanded availability of the service to the Apple TV media platform.

According to the company, its new film Housefull 3 has collected over Rs 100.03 crore across the globe in the opening weekend with Rs 73.02 crore in India and Rs 27.01 crore overseas. Produced by Sajid Nadiadwala and Eros International, directed by Farhad-Sajid, the film starring Akshay Kumar, Riteish Deshmukh and Abhishek Bachchan opened worldwide on June 3.

11:30 am Market outlook: Even as global markets have been fairly unperturbed by the upcoming referendum in Britain, which will decide the country's future in the Eurozone, Udayan Mukherjee believes it is a risk the market may be underpricing.

The CNBC-TV18 Consulting Editor is in London, where he is talking to a number of investors and fund managers, regarding the market outlook, global events and 'Brexit'.

"If you read the press here and you talk to people, they are very concerned about the kind of growing momentum over the last few days particularly that this whole Brexit campaign has assumed," he said, but added that equities were drawing comfort from betting markets, which point to a no vote.

The market is struggling as IT stocks exert pressure.  The Sensex is down 168.41 points or 0.6 percent at 26852.25, and the Nifty down 44.30 points or 0.5 percent at 8228.75. About 1107 shares have advanced, 925 shares declined, and 138 shares are unchanged.

NTPC, Reliance, ONGC, Tata Steel and GAIL are top gainers while Infosys, Dr Reddy's Labs, HUL, ITC and Bajaj Auto are losers in the Sensex.

Gold prices spurted by Rs 118 to Rs 29,964 per 10 gram in futures trade as speculators widened their bets taking positive cues from the global market. Analysts said fresh positions created by participants following a better trend in global market where the precious metal climbed to a three-week high as the dollar retreated on bets the Federal Reserve will keep interest rates on hold in the coming months, supported the upside in gold futures here.

9:55 am Market outlook: The Nifty is likely to see a sharp upmove to 8,700-8,800 levels if two key events -- the monsoon session of Parliament (in which the GST bill is widely expected to pass) and Brexit referendum -- see a positive outcome, says Ajay Bodke, CEO and Chief Portfolio Mananger (PMS), Prabhudas Lilladher.

In an interview with CNBC-TV18, Bodke said he is constructive on the markets in medium term even as it is exhibiting signs of tiredness [in the near term].

"Largecap stocks are finding it difficult to rapidly move up and some consolidation is expected to happen," he said.

9:45 am Interview: DP Maheshwari, MD & CEO of Jayshree Tea and Industries said that prices are going up only for the quality tea production. Common and medium tea prices are struggling.

"The reason is demand-supply. March had a fantastic crop though the year started on a very good note, Rs 20-25 higher than last year and because of excessive March crop there was dampening in sentiment and prices came down but April and May because of over rain especially in north east India, basically Assam; there was no rain in west Bengal, so drought situation is there. So the crop position ending May, is my perception, it is more or less same as last year. So definitely, prices will go up and will remain firm throughout the year, he said in an interview to CNBC-TV18.

9:30 am Monsoon updates:  Heavy monsoon showers are expected to lash Kerala over the next 48 hours. South west monsoon had hit the state on Wednesday marking the official commencement of rainy season in the country.

"Southwest monsoon has set in over Kerala and Lakshadweep," said K Santosh, IMD Thiruvananthapuram head on Wednesday.

According to IMD, it has also advanced to most parts of Tamil Nadu, some parts of south interior Karnataka and remaining parts of south Bay of Bengal.

Met department had earlier predicted that the monsoon will be delayed this year and will be setting in only by June 7.

The market has opened in red on Thursday. The Sensex is down 75.70 points or 0.3 percent at 26944.96, and the Nifty is down 19.45 points or 0.2 percent at 8253.60. About 474 shares have advanced, 241 shares declined, and 34 shares are unchanged.

ONGC, NTPC, Bharti Airtel, Reliance and Tata Motors are gainers while Lupin, Infosys, Dr Reddy's, Asian Paints and HUL are losers in the Sensex.

The Indian rupee opened higher by 7 paise at 66.58 per dollar versus 66.65 Wednesday. The dollar at a five-week low against a basket of currencies as traders reduced bets of an imminent US interest rate increase.

Ashutosh Khajuria of Federal Bank said, "Expect rupee to appreciate marginally due to increase in capital flows and trade in the range of 66.50- 66.75/dollar."

Asia markets traded mostly lower, as a weaker dollar weighed on Japan's shares and South Korean stocks failed to get a boost from a surprise interest rate cut.

The Bank of Korea surprised markets by cutting its policy rate by 25 basis points to a record-low of 1.25 percent. A Reuters poll of analysts showed markets expected the central bank to keep rates steady at 1.5 percent.

The Dow ended above 18,000 for the first time since April on Wednesday as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals.

The S&P 500 materials index climbed 0.6 percent following gains in copper and gold prices. Energy shares were lower despite a jump in oil prices.

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