Nifty ends below 8150, Sensex up 122 points; FMCG stocks gain
28 June 2016
3:30 pm Market close: The market ended with gains but the Nifty ended below 8150. The 50-share closed up 33.15 points or 0.4 percent at 8127.85 and the Sensex is up 121.59 points or 0.5 percent at 26524.55. About 1579 shares have advanced, 1020 shares declined, and 189 shares are unchanged.
Lupin, HUL, ITC, M&M and Bharti Airtel were top gainers while Tata Motors, Wipro, Sun Pharma, TCS and Adani Ports were top losers in the Sensex.
3:10 pm Fund raising: State-owned Bank of Maharashtra said it has raised Rs 500 crore by issuing bonds that are compliant with global capital adequacy norms.
"The Bank has raised Rs 500 crore by issue of Basel III compliant unsecured redeemable non-convertible Tier II bonds," it said in a BSE filing.
The bonds have been rated as 'AA hyb' by ICRA and 'AA' by CARE, it added.
The bonds bear the coupon rate of 9.20 percent per annum. Earlier this month, the Pune-based bank had informed about raising capital up to Rs 1,000 crore through various means including of FPO, rights issue or Qualified Institutional Placement.
2:57 pm Market Update: The Sensex gained 123.03 points at 26525.99 and the Nifty rose 31.70 points to 8126.40. About 1594 shares advanced against 933 declining shares on BSE.
2:45 pm Economic Affairs Secy on economy: India is posed for a "big leap" in growth which could touch 8 percent in the current fiscal on the back of normal monsoon, Economic Affairs Secretary Shaktikanta Das said today.
"India today is poised for a big leap in terms of growth. Last year we recorded a growth of 7.6 percent. This year with the monsoon, which I hope will be normal, I think we are looking at touching 8 per cent," Das said at a CNBC TV18 event here.
In 2015-16, the country's economy expanded at 7.6 percent. The Finance Ministry's Economic Survey had projected a growth rate of 7-7.75 percent for the current fiscal while RBI has forecast it at 7.6 percent.
As regards volatility in currency and equity markets on account of Britain's exit from the European Union (commonly referred to as Brexit), Das said it would continue for sometime, but India is "well placed" to deal with the situation.
2:35 pm Cabinet meeting: The Cabinet Committee on Parliamentary Affairs chaired by Home Minister Rajnath Singh, will meet tomorrow to decide the schedule of the Monsoon session, which is expected to start in the third week of July.
The session comes at a time when the ruling BJP's morale is high after its maiden victory in Assam Assembly polls and its performance in Kerala and West Bengal elections.
The session is also taking place a month after the Modi government completed two years in power, saying that the country is changing under the dispensation.
There are indications that the session will start on July 18 and continue till August 13 but a final decision on the dates will be taken tomorrow.
45 bills are pending in Rajya Sabha. Lok Sabha has 5 bills pending before it.
2:20 pm FII View: Almost a week after the Brexit vote, there is a degree of concern among global markets over its implications, but the full impact of the vote will be known in about 2-3 years' time, according to Ambit Capital.
Saurabh Mukherjea of Ambit Capital says that it is too early to prognosticate on the impact of Brexit. The key sensitivity areas to look at include whether China uses this opening to significantly devalue the RMB, he said. This can put pressure on other emerging market currencies to move downwards and can export deflation into the Western world, he said.
He said that European banks are operating with negative CPI and a Brexit-led recession in Europe and UK can slide into global contagion.
2:00 pm Market Check: The market has maintained uptrend in afternoon trade, tracking upside in European peers after two-day sell-off. The Sensex gained 128.82 points at 26531.78 and the Nifty rose 34.35 points to 8129.05.
The broader markets also gained with the BSE Midcap and Smallcap indices rising 0.4-0.8 percent. About two shares advanced for every share falling on the Bombay Stock Exchange.
European stocks traded higher after two days of heavy losses amid continued volatility on global markets as a result of the UK vote to leave the European Union (EU). Britain's FTSE and Germany's DAX rallied over 2 percent.
1:55 pm GST hopes: Adi Godrej of Godrej Industries is hopeful of seeing a boost to consumption on the back of Seventh Pay Commission getting implemented, and the Goods and Services Tax bill being passed. For his own company, he sees revenues growing by 5 percentage points with good monsoon and the GST. He believes the monsoon is progressing well, and has stuck to the weather forecasters' script. Although for the entire group, operational margins have been under 6 percent, Godrej Consumer Products has seen good margins. "Value growth has been low, but volume growth has been good," he said.
1:45 pm Interview: India has greater resilience than other economies and should stabilise much sooner from the volatility post Brexit, said Economic Affairs Secretary Shaktikanta Das in an interview to CNBC-TV18. Volatility and uncertainty have become a new norm in global markets, he says, but also points out that we are well-placed with reasonably strong macro-economic fundamentals to handle the situation. Although he prefers not rushing into an opinion, he believes there are few positives for the Indian economy from the exit of UK from EU like possibility of oil prices staying benign, faster progress on Free Trade and bilateral agreement negotiations with UK, and enhanced services-related work opportunities into the country.
1:30 pm FII view: Speaking to CNBC-TV18 Morgan Stanley's Ruchir Sharma said we live in a world that is madly disrupted by the crisis of 2008. A few trends have been playing out since then. Brexit has been a big manifestation of that trend, said Sharma. "There has been a revolt that has been taking place against the establishment everywhere," he said. Earlier 2 out of 3 incumbents were getting re-elected, but now only 1 out of 3 are getting re-elected. It was a big miscalculation on the part of the British Prime Minister to call for a vote on the EU membership, he said. On the possible Brexit impact on countries like Netherlands, France and Germany, he said incumbents rae likely to keep losing rounds. But it is not always for the worse. As in Latin America, a regime change has resulted in business-friendly people coming in place of leftwing politicians, he said.
The market has made some smart gain with the Nifty inching closer to 8150. The 50-share is up 45.80 points or 0.6 percent at 8140.50. The Sensex is up 158.27 points or 0.6 percent at 26561.23.
Lupin, ITC, HUL, Bharti Airtel and L&T are top gainers in the Sensex. Among losers are Tata Motors, Wipro, NTPC, TCS and GAIL.
Gold prices drifted Rs 245 to Rs 31,303 per 10 gram in futures trade today as participants lightened their positions, largely in tandem with a weak trend overseas.
Analysts said a weak trend in the overseas markets where gold dropped after posting the biggest two-day gain in more than seven years following the UK's vote to exit from the European Union and profit-booking by speculators, weighed on gold futures.
The Cabinet tomorrow is likely to approve higher increase in basic pay than the nearly 15 percent recommended by the 7th Pay Commission for over 1 crore
government employees and pensioners.
The pay panel had in November last year recommended 14.27 percent hike in basic pay at junior levels, the lowest in 70 years. The previous 6th Pay Commission had recommended a 20 percent hike which the government doubled while implementing it in 2008. After considering the increase proposed in allowances, the hike in remunerations comes to 23.55 percent.
12:59 pm Market Update: Equity benchmarks extended rally following positive European cues.
The Sensex rose 158.27 points or 0.60 percent to 26561.23 and the Nifty advanced 50.50 points or 0.62 percent to 8145.20.
About 1586 shares advanced against 773 declining shares on BSE.
12:50 pm Interview: March and April have seen good demand pick-up against the same period last year, although May has been a letdown, says Gurmeet Singh, Executive Director at Hitachi Home and Life Solutions (India) .
Speaking to CNBC-TV18, Singh says events like Seventh Pay Commission implementation which lead to higher disposable income levels tend to add at least 10 percent to the industry's normal growth rate. He expects the upcoming 7th pay commission to boost sales.
"We witnessed strong tailwind, particularly in the room air conditioning segment, when the last pay commission was implemented. We expect a similar fillip this time around also," he says.
Considering the recovery in demand, he does not expect much pile-up of inventory this year.
12:40 pm Europe opens: European stocks traded higher after two days of heavy losses amid continued volatility on global markets as a result of the UK vote to leave the European Union (EU).
The pan-European STOXX 600 was up 2.25 percent.
London FTSE index was up 1.55 percent while the FTSE 250 – which is mainly made of domestic-focused stocks – rallied.
Markets appear to becautiously optimistic despite sharp losses on Monday as investors digested the full implications of the UK's vote to leave the EU.
12:20 pm Indiabulls Housing's fundraising: Indiabulls Housing Finance is planning to raise Rs 625 crore through issuance of non-convertible redeemable debentures, the company said today.
"The company proposes to issue 6,250 secured non- convertible redeemable debentures with a face value of Rs 10 lakh each aggregating Rs 625 crore (plus greenshoe option) on a private placement basis," the company said in a BSE filing.
The issue will open on June 30 and close on the same day.
The non-convertible redeemable debentures will have a coupon rate of 9 per cent and are proposed to be listed on NSE and BSE.
12:00 pm Market Check
The market has maintained its uptrend in noon trade with the Nifty trading above 8100 level amid consolidation, supported by FMCG, infra, pharma and telecom stocks.
The Sensex rose 58.53 points to 26461.49 and the Nifty gained 16.60 points at 8111.30. The market breadth remained positive as about two shares advanced for every share declining on Bombay Stock Exchange.
Lupin, Hindustan Unilever, Idea Cellular, Eicher Motors and Bharti Infratel gained 2-4 percent while Tata Motors and Tata Motors (DVR) fell 2 percent each.
Oil prices rose in Asia as a looming strike in Norway threatened to cut output in western Europe's biggest producer, although Britain's vote to leave the European Union was still weighing on markets. Brent crude futures were trading at USD 47.79 a barrel, up 1.34 percent.
11:45 am Interview: Ramesh Abhishek, the Secretary of Department of Industrial Policy & Promotion (DIPP) said that there has been tremendous interest among foreign investors in India and that the government is doing active investment promotion to attract more inflows.
He said, "The climate for doing business has become simpler hence we expect FDI inflows to go up from here," he said, adding "India needs huge investments both through foreign and domestic investments," he said.
He added that there are areas that need Foreign Investment Promotion Board (FIPB) approval where FDI is banned, and DIPP is working towards shortening the list, by making the process for FIPB nod simpler.
11:30 am IT analysis: Post the Brexit, both short-term and long-term impact on the UK and Euro Zone will have to be closely watched, says Moshe Katri, independent IT expert.
The scenario for IT companies, post Brexit, looks pessimistic. The recovery in the second half for the sector could be challenging, Katri told CNBC-TV18.
In Indian context, three major IT firms - Accenture, Tata Consultancy Services and Cognizant - are likely to be most impacted as their exposure to UK is high, Katri says. However, it is too early to cut down earnings expectation for these firms.
''Investors will look at India as a safe heaven now,'' he says, adding that rupee will strengthen in such a scenario. He expects 2016 to be slower.
The market is climbing gradually with support from index heavyweights. The Sensex is up 69.70 points or 0.3 percent at 26472.66 and the Nifty is up 20.90 points or 0.3 percent at 8115.60. About 1439 shares have advanced, 620 shares declined, and 133 shares are unchanged.
HUL, Bharti and Lupin are up 2 percent while L&T and Maruri are other gainers in the Sensex. Tata Motors, NTPC, Wipro, ICICI Bank and Bajaj Auto are losers in the Sensex.
World oil prices rebounded in Asia today on bargain hunting but tremors from Britain's shock vote last week to leave the European Union continue to weigh on sentiment.
Financial markets are still reeling from Brexit's fallout as investors sell riskier assets and flock to safe bets amid global economic uncertainty. Asian stock markets resumed their losses early today, extending another sharp sell-off in Europe and New York.
10:40 am Tata Communications up 4%: Liquid Telecom, a pan-African telecom group has entered into an agreement to acquire Neotel, a Tata Communications subsidiary in South Africa, for Rs 2,900 crore.
Liquid Telecom will be partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30 percent stake in Neotel.
''Through a single access point, businesses across Africa will be able to access Liquid Africa's 24,000km of cross-border, metro and access fibre networks. These currently span 12 countries from South Africa to Kenya, with further expansion planned,'' the press release said.
Certain regulatory approvals for the deal in South Africa are still awaited by the companies.
10:15 am FII View: Viktor Shvets of Macquarie says global impact of Brexit will be mostly felt in the 2nd-3rd derivatives, adding the key transmission mechanism is through volatilities focused on global debt, liquidity and deflationary outcomes, rather than direct trade or services.
He expects coordinated central bank action from the Bank of Japan, European Central Bank and Bank of England, with the Federal Reserve taking away tightening to reduce volatility, weaken Yen & avoid a strong US dollar.
In Asia ex-Japan, he maintains a preference towards commodity consumers over producers such as Indonesia and prefers countries that have some degree of fiscal and monetary independence and political stability.
Whilst there are no good choices, key overweights are India and the Philippines, says Shvets, adding he maintains slight overweights on Taiwan and China.
10:00 am Market Check
Equity benchmarks as well as broader markets were marginally higher amid consolidation in morning trade, especially ahead of expiry of June derivative contracts due on Thursday.
The Sensex rose 37.86 points to 26440.82 and the Nifty gained 12.30 points at 8107 while the BSE Midcap and Smallcap indices advanced 0.3-0.6 percent. The market breadth remained positive as about 1242 shares advanced against 484 declining shares on Bombay Stock Exchange.
FMCG, infra, telecom, pharma and oil & gas stocks were trading higher while Tata Motors lost 2 percent. ICICI Bank, Wipro, TCS, Bajaj Auto and Tata Steel were down 0.2-0.8 percent.
L&T, Lupin, HUL and Bharti Airtel topped buying list on Sensex, up more than 1 percent.
9:55 am FII view: Laurence Balanco of CLSA said that Nifty is likely to trend up to 8700-9100 levels by year end.
He adds that India and Philippines are among the better Asian markets that are immune to shocks arising from Brexit. Neither of these markets will retest their January lows, he said. He warns there could be volatility in the next two months arising out of Brexit. The US dollar index has been stuck in a range since 2015, he said, adding that he sees an upside for the US currency.
9:45 am Analysts meet: With new entrants joining the telecom space, Idea Cellular feels that its revenue market share is unlikely to be effected. In an analysts meet, Idea Cellular management said that it is comfortable with revenue market share estimate being largely flat at 19.5 percent for next 3-4 years despite Jio launch as it is well-placed to consolidate tail at the low-end. Idea has 18.9 percent overall revenue market share and 31.1 percent market share in top 8 circles, gaining incremental market share of 33.5 percent and 51.6 percent respectively in last 12 quarters.
The management is confident that after Reliance Jio launch, top three telecom companies overall market share may not get impacted benefitting by adding low-end subs although they may lose some high-end subscribers. Idea considers low-end customer to be profitable and does not see margin dilution from this subscribers base.
9:30 am FII view: Market seems to be over-reacting to the Brexit event, feels James Glassman of JPMorgan although he does expect some short-term volatility and advises caution.
In an interview to CNBC-TV18, Glassman says Brexit does not change the outlook for global economy, adding, in fact, it offers an opportunity to jump back into the market.
"Britain is not going to cut off its links with the EU. It is not like it dies, it just disappears," Glassman says.
He believes global markets are adjusting to the new reality but are not freezing as was the case during the Lehman crisis. As long as global economy is on track, he does not see any reason for emerging markets to not perform well.
The market has opened flat but the Nifty managed to scale 8100. The 50-share index is up 9.30 points at 8104 and the Sensex is up 7.59 points at 26410.55. About 573 shares have advanced, 164 shares declined, and 40 shares are unchanged.
Bharti Airtel, Hero MotoCorp, Coal India, Asian Paints and BHEL are top gainers while Tata Motors, Wipro, ICICI Bank, Infosys and TCS are losers in the Sensex.
The Indian rupee gained in the early trade. It has opened higher by 18 paise at 67.77 per dollar against 67.95 Monday. The pound arrested its drop versus the dollar amid signs the market may be taking a breather following the UK's shock vote to leave the european union. All eyes on the two-day EU leaders summit commencing later today. The US dollar index above 96 levels.
Ashutosh Raina of HDFC Bank said, "The markets continue to be in a risk-off mode after the recent Brexit referendum. The dollar index has moved to recent highs with most of major and EM currencies touching their recent lows."
Asia markets opened lower with the Nikkei 225 down 1.32 percent, while across the Korean Strait, the Kospi dropped 0.48 percent. Australia's ASX 200 was down 1.37 percent. The pound took another tumble on Monday, falling to a fresh 31-year low against the dollar and extending losses to nearly 12 percent from levels before the Brexit results were announced.
US stocks closed about 1.5 percent lower yesterday, extending Friday's post-Brexit sell-off with materials leading decliners. The Dow Jones and S&P 500 ended at their lowest since mid-March.
Standard & Poor and Fitch downgraded United Kingdom's credit rating. S&P downgraded the nation by two notches, from "AAA" to "AA," citing last week's referendum that approved a British exit from the European Union.
In other asset classes, crude prices rebound after slipping over 3 percent overnight while Brent is above 47 dollars per barrel. Gold prices trimmed gains but continued to trade near the two-year high.