Nifty ends at 8509, Sensex in red; HUL falls 3%, ONGC down 5%

18 Jul 2016

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3:30 pm Market closing: The market has ended in red with the Nifty holding 8500. The 50-share index is down 32.70 points or 0.4 percent at 8508.70 and the Sensex is down 89.84 points or 0.3 percent at 27746.66. About 1114 shares have advanced, 1618 shares declined, and 179 shares are unchanged.

Bajaj Auto, Infosys, Sun Pharma, Axis Bank and Hero MotoCorp were top gainers while ONGC, Bharti, BHEL, HUL and Tata Steel are losers in the Sensex.

3:15 pm HUL Q1 result: Hindustan Unilver has posted disappointing June quarter results with muted volume growth. Its net profit was at Rs 1174 crore (up 9.8 percent) in the quarter ended June 2016. Its income stood at Rs 8128 crore up 3 percent in Q1 on annual basis, way below CNBC-TV18 poll.

During the period, its volume growth was below estimates at 4 percent year-on-year.

Profit was expected to increase 10 percent year-on-year to Rs 1,156 crore on margin expansion, according to average of estimates of analysts polled by CNBC-TV18. Revenue was seen rising 5.6 percent to Rs 8,557 crore in the quarter ended June 2016 from Rs 8,105 crore in year-ago period with volume growth around 4.5-5.5 percent.

2:59 pm Idea tanks 6%: The telecom operator Idea Cellular slashed rates of 4G and 3G big internet packs by upto 67 percent.

The stock declined 6 percent.

2:45 pm Market Update: Equity benchmarks turned lower in last hour of trade with the Sensex falling 19.35 points to 27817.15 and the Nifty declining 10.85 points to 8530.55.

2:40 pm ICICI Sec on Alembic Pharma: Alembic Pharmaceuticals shares gained 3 percent intraday as ICICI Securities has initiated coverage on the stock with an add rating and target price of Rs 654. The brokerage house is upbeat about company's long term growth outlook considering strong US and India business, increased focus on complex & niche R&D and track record of healthy return ratios.

However, high base of FY16 and ongoing heavy investment phase will impact growth in near term, it feels.

Alembic Pharma is a vertically integrated pharmaceutical company with major focus on formulations business in India and US. Alembic has successfully transformed its domestic formulation business towards high margin and fast growing specialty segments over past five years. US business is on strong footing now with 29 abbreviated new drug applications (ANDAs) pending for approval, high base of FY16 with generic Abilify would lead to significant US revenue decline in FY17.

2:20 pm FII View: Alexander Redman of Credit Suisse is bullish on emerging markets (EM).

"Flows into dedicated emerging market funds exhibited an interesting decouple last week. Net inflows into pan-emerging market funds at USD 2.5 billion were the strongest weekly inflows since July 2014. Emerging markets have since their late January trough now returned 25 percent in dollar terms, outperforming developed equities by 10.5 percent over the same period," Redman says.

He further says year-end target of 960 for the MSCI EM benchmark offers a further 11 percent potential upside for emerging equities.

2:00 pm Market Check
The market erased more than half of its gains in afternoon trade as Europe lost early gains to turn mixed. The broader markets also turned flat.

The 30-share BSE Sensex was up 70.09 points at 27906.59 and the 50-share NSE Nifty rose 14.75 points to 8556.15. About 1376 shares advanced against 1234 declining shares on the BSE.

Infosys, Reliance Industries, HDFC, Tata Motors, Axis Bank and Maruti were the most active shares on exchanges.

1:55 pm Market falls: The market has lost sharply with the Nifty below 8550. The 50-share index is down 3.35 points at 8538.05 and the Sensex is up 19.96 points at 27856.46. About 1370 shares have advanced, 1227 shares declined, and 162 shares are unchanged.

Bharti  Airtel, ONGC, BHEL, HDFC and Cipla are losers while Bajaj Auto, Axis Bank, Asian Paints, Maruti and Hero are losers

1:30 pm International market view: Betting that the liquidity rush will continue in the short term, Geoff Lewis of Manulife Asset Management expects the US economy to pick up in the second half on the year. Strong jobs data is keeping the US markets in a good shape, he told CNBC-TV18. Lewis, however, said that he doesn't expect an interest rate hike by the US Federal Reserve until December. A rate hike in September would come too close to the US Presidential election in November, he said. Lewis said he's bullish on emerging markets with strong domestic growth. In Asia, his picks include India, Indonesia and Philippines.

The market is still gaining but the Nifty is unable to scale 8600. The 50-share index is up 30.70 points or 0.4 percent at 8572.10 and the Sensex is up 121.54 points or 0.4 percent at 27958.04. About 1563 shares have advanced, 988 shares declined, and 152 shares are unchanged.

Bajaj Auto, Tata Motors, Axis Bank, ICICI Bank and Maruti are top gainers while ONGC, Bharti, Wipro, HUL and HDFC are losers in the Sensex.

Gold fell one percent before paring losses as the demand for safe-haven assets waned with a coup attempt in Turkey failing to deter risk sentiments.
The US dollar gained on the yen in Asia on Monday as investors unwound safe-haven trades in the wake of the attempted coup in Turkey, while better US economic news and the promise of central bank stimulus lent support to equities.

Turkey widened a crackdown on suspected supporters of the failed military coup, taking the number of people rounded up in the armed forces and judiciary to 6,000, and the government said it was in control of the country and economy.

12:59 pm Market Update: Equity benchmarks remained strong in afternoon trade. The Sensex rose 155.10 points to 27991.60, and the Nifty was up 40.15 points at 8581.55.

About 1564 shares advanced against 971 declining shares on BSE.

12:50 pm Asia Update: Markets in Asia traded mostly up today, ahead of a relatively data-light week in the region, with just a muted reaction to the failed military coup in Turkey.

South Korea's Kospi index was up 0.2 percent, wavering between gains and losses. Hong Kong's Hang Seng index gained 0.6 percent. Chinese mainland markets fell behind their regional peers, with the Shanghai composite off 0.35 percent.

Markets in Japan were closed for the Marine Day public holiday.

12:40 pm Europe opens: European stocks opened flat as investors digest a number of geopolitical events including the failed coup in Turkey and attacks in Nice as well as a number of major corporate deals.

The pan-European STOXX 600 was hovering around the flatline.

12:20 pm SPARC Deal:  Sun Pharma Advanced Research Company (SPARC) and its parent Sun Pharma have entered into a licensing arrangement for its Elepsia tablets, used in the treatment of epilepsy, in the US market for an up-front payment of USD 10 million.

"As per the agreement, SPARC will license Elepsia XRTM (Levetiracetam Extended Release tablets) to a wholly-owned subsidiary of Sun Pharma for the US market. SPARC will receive an up-front payment of USD 10 million from Sun Pharma," SPARC said in a BSE filing.

It is also eligible for certain additional milestone payments and defined royalties linked to any future sales of Elepsia XRTM, the company added.

Elepsia XRTM was approved by the USFDA in March 2015.

12:00 pm Market Check: Equity benchmarks maintained morning gains with the Nifty holding 8550 level, supported by banks and auto stocks. Reliance Industries gained over a percent following better-than-expected bottomline and gross refining margin in Q1.

The 30-share BSE Sensex was up 148.00 points at 27984.50 and the 50-share NSE Nifty rose 37.20 points to 8578.60. The BSE Midcap and Smallcap indices gained 0.3 percent and 0.7 percent, respectively.

The market breadth remained positive as about 1545 shares advanced against 877 declining shares on Bombay Stock Exchange.

State Bank of Travancore, State Bank of Mysore and State Bank of Bikaner & Jaipur surged 4-5 percent after the government official says merger of five associates with State Bank of India will be completed in 2 months. State Bank of India is currently working on integrating technology platforms of merger targets.

11:55 am Rajanomics: Outgoing Reserve Bank of India Governor Raghuram Rajan attacked critics of his monetary policy stance saying the interest rates the central bank had set during his tenure were not too high. In a speech, Rajan challenged them to show how inflation is "very low" before accusing him of "being behind the curve" in his focus on containing price rise than on growth and debunked such criticism as mere 'dialogues'.

Paul Mackel, Managing Director - Head of Asian Currency Research at HSBC, agreed with Rajan's views, saying that he does not think the central banker had been behind the curve in cutting interest rates. Mackel told CNBC-TV18 that a final rate cut at Rajan's last monetary policy review is unlikely. "We think the RBI will cut interest rates in the fourth quarter of FY17," he said.

11:45 am Result poll: Midcap IT company Mindtree's first quarter profit is likely to fall 0.67 percent sequentially to Rs 155 crore on margin contraction, according to average of estimates of analysts polled by CNBC-TV18. Revenue in Q1 is seen rising 2 percent quarter-on-quarter to Rs 1,351 crore while revenue in dollar terms may increase 3.3 percent to USD 202 million and 3 percent in constant currency. Revenue growth may be driven by digital business that accounts for 39 percent of revenue and grew by 37.6 percent in FY16.

Operating profit (earnings before interest, tax, depreciation and amortisation) may grow marginally at Rs 227 crore in Q1FY17 against Rs 225.9 crore in Q4FY16 but margin may contract by 25 basis points to 16.8 percent in same period due to visa costs (seasonal) that partly offset by operating efficiencies. Margin declined from 20.8 percent in Q3FY15 to 17.06 percent in Q4FY16. Pricing pressure in traditional services is likely to weigh on margin in FY17, feel analysts.

11:30 pm Outlook: Harendra Kumar, MD and Head - Institutional Equities, Elara Capital, said he would continue to buy Infosys at lower levels. "Valuations continue to remain comfortable," he said. Reliance Industries, also posted a robust set of numbers but Kumar said its profits were powered by inventory gains and product regime and that the stock was fairly valued. "It may see immediate buying but I don't see much upside," he said. Investors should continue to hold private bank shares, as they will likely post decent returns over a period of 18-20 months, according to Kumar.

The market is on a surge with keen eyes on the monsoon session of Parliament that begins today. The Sensex is up 164.21 points or 0.6 percent at 28000.71 and the Nifty is up 40 points or 0.5 percent at 8581.40. About 1503 shares have advanced, 701 shares declined, and 117 shares are unchanged.
 
Bajaj Auto, Tata Motors, Maruti, Axis Bank and Reliance are top gainers in the Sensex while Bajaj Auto, Tata Motors, Maruti, Axis Bank and Reliance are laggards.

Oil prices extended their rise in Asia as robust economic data from the United States and China fuelled hopes of a pick-up in demand from the world's top two economies. While a sense of calm has returned to Turkey following a failed coup attempt over the weekend, analysts said the situation remains volatile as Turkish authorities press on with a ruthless crackdown against the plotters, detaining 6,000 people.

10:40 am Ashok Leyland to set up unit in Kenya: Hinduja Group flagship Ashok Leyland will be setting up a bus assembly plant in Kenya with an investment of Rs 70 crore as part of its global expansion plans.

The new plant in Kenya will serve at least three neighbouring countries, besides catering to local demand.

"We are setting up a bus assembly plant in Kenya through a wholly-owned subsidiary. This plant will have an annual capacity of 1,200 buses," Ashok Leyland Senior Vice-President (Global Buses), T Venkataraman told PTI.

He said the setting up of the Kenya plant will begin this quarter itself.

"This plant will also serve as an export hub for three neighbouring countries, besides meeting local demand in Kenya," he added.

10:20 am FII View: Alexander Redman of Credit Suisse is bullish on emerging markets (EM).

"Flows into dedicated emerging market funds exhibited an interesting decouple last week. Net inflows into pan-emerging market funds at USD 2.5 billion were the strongest weekly inflows since July 2014. Emerging markets have since their late January trough now returned 25 percent in dollar terms, outperforming developed equities by 10.5 percent over the same period," Redman says.

He further says year-end target of 960 for the MSCI EM benchmark offers a further 11 percent potential upside for emerging equities.

10:00 am Market Check
Equity benchmarks extended last week's rally with the Sensex reclaiming 28000 level ahead of Monsoon Session of Parliament. GST Bill will be key factor to watch out for in near term.

The 30-share BSE Sensex was up 176.61 points or 0.63 percent at 28013.11 and the 50-share NSE Nifty rose 37.30 points or 0.44 percent ot 8578.70. The broader markets also gained in line with benchmarks as about two shares advanced for every share declining on the Bombay Stock Exchange.

Tata Motors and Maruti Suzuki topped buying list on Sensex, up 2 percent each followed by Reliance Industries, Axis Bank, Asian Paints and Sun Pharma while IT and FMCG stocks were under pressure.

Fundamentally speaking, though, he said, India remained in good stead, says Nirmal Jain of IIFL.

"We are seeing that a lot of policy reforms are taking place. Now there is direction to many things... hopefully if monsoon also is good, and GST can go through, all those things put together will put us on a very good sort of platform for a bull market."

9:55 am Rajanomics: Taking his critics head-on, RBI Governor Raghuram Rajan has challenged them to show how inflation is "very low" before accusing him of "being behind the curve" in his focus on containing price rise than on growth and debunked such criticism as mere 'dialogues'. Rajan, who has often been seen as being critical of the government and its policies, also said there is "lot of frustration" about the pace of economic recovery, but attributed it to the two successive droughts, weak global economy and external shocks like Brexit. Given these constraints, performance of Indian economy has been "quite creditable" and prospects of good monsoon as well as structural reforms and macroeconomic stability will accelerate the growth going forward, he added.

9:45 am Result poll: FMCG major Hindustan Unilever (HUL) announces its first quarter earnings on July 18, but analysts do not expect any fireworks due to muted urban and rural demand. Profit is expected to increase 10 percent year-on-year to Rs 1,156 crore on margin expansion, according to average of estimates of analysts polled by CNBC-TV18. Revenue is seen rising 5.6 percent to Rs 8,557 crore in the quarter ended June 2016 from Rs 8,105 crore in year-ago period with volume growth around 4.5-5.5 percent. Gross margin is likely to be at around 52.5-53 percent for the quarter but expansion may taper going ahead as commodity prices are bottoming out. According to analysts, benefits from monsoon & 7th Pay Commission may be seen October 2016 onwards.

9:30 am International market: Betting that the liquidity rush will continue in the short term, Geoff Lewis of Manulife Asset Management expects the US economy to pick up in the second half on the year. Strong jobs data is keeping the US markets in a good shape, he told CNBC-TV18.

Lewis, however, said that he doesn't expect an interest rate hike by the US Federal Reserve until December. A rate hike in September would come too close to the US Presidential election in November, he said.

Lewis said he's bullish on emerging markets with strong domestic growth. In Asia, his picks include India, Indonesia and Philippines.

The market has opened higher on Monday. The Sensex is up 118.21 points or 0.4 percent at 27954.71 and the Nifty is up 22.65 points or 0.3 percent at 8564.05. About 186 shares have advanced, 47 shares declined, and 22 shares are unchanged.

Asian Paints, Reliance, Axis Bank, Bajaj Auto and Infosys are top gainers while NTPC and ONGC aee losers in the Sensex.

The Indian rupee has opened lower by 9 paise at 67.15 per dollar against Friday's closing value of 67.06 a dollar. Turkey's Lira recouped losses as concern eased following a failed coup attempt in Turkey. The nation's currency plunged the most in eight years against the dollar on Friday. Meanwhile, the yen declines against the dollar.

Pramit Brahmbhatt of Veracity says he expects the rupee to trade sideways in absence of any strong cues from domestic as well as global market.

Asia opened near flat, seeking direction ahead of a relatively data-light week in the region, while investors had a muted reaction to the risks surrounding a failed military coup in Turkey.

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