Nifty ends below 8650, Sensex in red; ICICI, L&T fall 4-5%
01 August 2016
3:30 pm Market closing: The market has ended flat with the Nifty below 8650. The 50-share was down 1.95 points at 8636.55 and the Sensex was down 48.74 points or 0.2 percent at 28003.12. About 1185 shares have advanced, 1564 shares declined, and 148 shares are unchanged.
TCS, Tata Steel, Maruti Suzuki, Wipro and Bajaj Auto were top gainers while ICICI Bank, L&T, BHEL, Adani Ports and GAIL were losers in the Sensex.
2:59 pm Market Update: Equity benchmarks remained flat with a negative bias. The Sensex was down 42.98 points at 28008.88 and the Nifty down 6.40 points at 8632.10.
About 1566 shares declined against 1113 advancing shares on the BSE.
2:50 pm FII View: Bharat Iyer of JP Morgan said the Nifty has reached his base case target of 8,600 for CY2016. Broad market valuations at about 18x forward earnings are now one standard deviation higher than mean.
He believes bull case target of 9,000 for the Nifty remains in play, particularly if the Goods and Services Tax (GST) legislation is cleared in the monsoon session of Parliament.
He remains positive on a 12-month timeframe and believes any correction would be a buying opportunity.
2:40 pm Auto sales: Homegrown auto major Mahindra and Mahindra today reported a 13.53 percent increase in total tractor sales at 17,553 units in July.
The company had sold 15,460 units in the same month last year.
Domestic tractor sales rose 15.26 percent to 16,452 units in July as against 14,273 units in the year-ago month, the company said in a BSE filing.
Exports during the month declined by 7.25 percent to 1,101 units compared with 1,187 units in the same month a year ago, it added.
2:20 pm Poll: Software services provider Tech Mahindra 's first quarter (April-June) profit is seen falling 20 percent sequentially to Rs 717 crore but revenue may grow 0.3 percent to Rs 6,903 crore, according to average of estimates of analysts polled by CNBC-TV18.
Dollar revenue may increase 0.6 percent to USD 1,028.5 million in the quarter ended June 2016 compared with USD 1,022.6 million in preceding period.
Dollar revenue growth may be aided by 1 month contribution of Pininfarina acquisition (which closed in May) and enterprise business but that will be offset by telecom vertical hit by seasonal weakness in Comviva and LCC.
Earnings before interest and tax may decline 3.5 percent to Rs 911 crore and margin may contract by 50 basis points to 13.2 percent on sequential basis due to seasonal weakness in Comviva and visa cost.
2:00 pm Market Check
Equity benchmarks continued to consolidate in afternoon trade, especially after the Nifty hit fresh 52-week high.
The Sensex was down 42.33 points at 28009.53 and the Nifty fell 2.10 points to 8636.40. The market breadth also remained weak as about 1539 shares declined against 1107 advancing shares on the BSE.
Mitesh Thacker of miteshthacker.com said if Nifty breaks below 8580, there could be some more corrections going ahead.
Dipan Mehta, Member, NSE and BSE, said positive events like Good and Services Tax (GST) and good monsoon, on which market had been rallying, have been completely discounted.
The market is 'entering into a no-news kind of trade' and that is what has caused market taking a break from its rally mode, Mehta added.
TCS, Maruti Suzuki, Wipro, Dr Reddy's Labs and Tata Steel gained more than 2 percent while L&T and ICICI Bank fell nearly 4 percent.
1:50 pm Downgrade: Goldman Sachs has cut its three-month rating on equities to "underweight", saying its risk appetite indicator has turned neutral, which suggests that markets are more vulnerable to growth and policy disappointments.
The downgrade follows a recent rally in risk assets which Goldman said has been driven by a combination of light positioning into Britain's vote to leave the European Union and a search for yield.
"Given equities remain expensive and earnings growth is poor, in our view equities are now just at the upper end of their 'fat and flat' range," Goldman strategists said in a note.
1:30 pm Market outlook: Nilesh Parikh of Edelweiss Securities is not too perturbed with the disappointing first quarter ICICI Bank numbers and still has a buy rating on the stock. ICICI Bank missed street estimates with a sharp fall in standalone profits by 25 percent year-on-year to Rs 2,232.4 crore, dented by jump in provisions, but was ahead of estimates. The net interest income too grew only by 0.9 percent to Rs 5,158.5 crore on year-on-year basis. The slippages too stood at Rs 8,249 crore (against Rs 7,003 crore in Q4FY16) and bad loan watchlist at Rs 38,723 crore for the quarter ended June 2016 (against Rs 44,000 crore QoQ), ICICI Bank said.
The market continues to struggle but technology stocks are outperforming. The Sensex is down 97.11 points or 0.3 percent at 27954.75, and the Nifty down 23.35 points or 0.3 percent at 8615.15. About 1039 shares have advanced, 1524 shares declined, and 132 shares are unchanged.
TCS, Wipro, Maruti, Bajaj Auto and Dr Reddy's Labs are top gainers while ICICI Bank, L&T, Adani Ports, BHEL and Lupin are losers in the Sensex.
European stocks opened higher despite growing concerns about China's economy after the country's official manufacturing gauge unexpectedly slumped in July. European markets will be digesting the latest slowdown in manufacturing activity in China where the official manufacturing purchasing managers' index (PMI), which tracks the health of large and state-owned enterprises, came in at 49.9 in July versus a Reuters poll that predicted a 50.0 reading. The 50-point mark separates expansion from contraction.
12:57 pm Market Update: The Sensex was down 35.48 points at 28016.38, and the Nifty down 5.80 points at 8632.70.
About 1458 shares declined against 1083 advancing shares on the BSE.
12:45 pm Europe opens: European stocks opened higher despite growing concerns about China's economy after the country's official manufacturing gauge unexpectedly slumped in July.
The pan-European STOXX 600 was up 0.33 percent.
European markets on Monday will be digesting the latest slowdown in manufacturing activity in China where the official manufacturing purchasing managers' index (PMI), which tracks the health of large and state-owned enterprises, came in at 49.9 in July versus a Reuters poll that predicted a 50.0 reading. The 50-point mark separates expansion from contraction.
12:35 pm Market Update: Equity benchmarks washed out all gains in afternoon trade, dragged by banks and infra stocks.
The 30-share BSE Sensex was down 47.09 points at 28004.77 and the 50-share NSE Nifty rose 0.75 points to 8639.25.
12:25 pm Interview: Dilip Buildcon, a Madhya Pradesh-based road construction company, opened its Rs 650 crore initial public offer (IPO) for subscription on Monday at a price band of Rs 214-219 per share.
Speaking to CNBC-TV18, Devendra Jain, CEO of the company, said that of the total IPO funds, Rs 200 crore will utilised for reducing current debt of Rs 2,400 crore and the rest will be used as working capital.
The company, which has presence in 12 states, will continue to focus on its road business. Its on-going projects include a road order in the south and a Rs 1,600 crore cable suspension order in Goa.
Going forward, the focus will be on debt reduction and maintaining overall growth at 10-15 percent level, Jain said.
12:15 pm Asia update: Asia markets traded mixed, with Chinese mainland shares falling behind their regional peers as traders digested a slowdown in manufacturing activity in China.
In Japan, the benchmark Nikkei 225 traded up 0.40 percent, reversing earlier losses of 1.2 percent.
Chinese mainland shares, however, sold off, with the Shanghai composite lower by 0.9 percent.
12:00 pm Market Check
Equity benchmarks came off day's high with the Nifty trading below the 8700 level, weighed down by ICICI Bank and Larsen & Toubro that fell 3 percent each post earnings.
The 30-share BSE Sensex was up 60.56 points at 28112.42 and the 50-share NSE Nifty gained 20.85 points at 8659.35. The market breadth was also marginally positive as about 1279 shares advanced against 1135 declining shares on the BSE.
11:50 am Auto sales: India's second largest commercial vehicle maker Ashok Leyland disappointed on Monday by reporting tepid sales growth in July.
Total sales during the month declined 5 percent year-on-year to 10,492 vehicles, impacted by MHCV segment, the major contributor to sales.
Medium & heavy commercial vehicle sales declined 7 percent to 8,182 units while light commercial vehicle sales grew by 4 percent to 2,310 units compared with year-ago period.
11:30 am Result poll: Software services provider Tech Mahindra 's first quarter (April-June) profit is seen falling 20 percent sequentially to Rs 717 crore but revenue may grow 0.3 percent to Rs 6,903 crore, according to average of estimates of analysts polled by CNBC-TV18. Dollar revenue may increase 0.6 percent to USD 1,028.5 million in the quarter ended June 2016 compared with USD 1,022.6 million in preceding period. Earnings before interest and tax may decline 3.5 percent to Rs 911 crore and margin may contract by 50 basis points to 13.2 percent on sequential basis.
The market continues to rally with support from auto, IT and metal stocks. The Nifty is up 59.60 points or 0.7 percent at 8698.10 and the Sensex is up 183.10 points or 0.6 percent at 28234.96. About 1464 shares have advanced, 779 shares declined, and 97 shares are unchanged.
TCS, Bajaj Auto, Wipro, Maruti and Tata Motors are top gainers while ICICI Bank, L&T, Lupin and Coal India are losers in the Sensex.
Oil prices started August trading with fresh falls after several bearish reports, including rising output from OPEC, a rise in US drilling and weak economic data from Asia. Overproduction of crude and a wave of refined products were the main factors weighing on oil.
Oil output from the Organization of the Petroleum Exporting Countries (OPEC) is likely in July to have reached its highest in recent history, at 33.41 million barrels per day (bpd) in July from a revised 33.31 million bpd in June, a Reuters survey found on Friday.
10:25 am Auto sales: Maruti Suzuki, the country's largest car maker, sold 1.37 lakh vehicles in August, higher by 12.7 percent compared with 1.21 lakh vehicles in year-ago period, aided by highest ever monthly sales in domestic market.
The company said domestic sales grew by 13.9 percent to 1.25 lakh units, supported by Ciaz, Baleno, Eeco and utility vehicles while exports turned higher, up 0.3 percent at 11,338 units.
10:00 am Market Check: Equity benchmarks maintained early gains with the Sensex rising more than 150 points ahead of meeting of BJP and Congress to discuss and solve issues related to Goods & Services Tax (GST) Bill.
The 30-share BSE Sensex was up 176.64 points at 28228.50 and the 50-share NSE Nifty gained 54.10 points at 8692.60. The market breadth remained positive as about 1365 shares advanced against 593 declining shares on the BSE.
Advanced Enzyme started off first day on a strong note, hitting an intraday high of Rs 1,238.70, up more than 38 percent over issue price of Rs 896 after opening at Rs 1,210.
TCS, HDFC, Tata Motors, HDFC Bank and ITC were top five contributors to Sensex's gains while ICICI Bank topped the selling list, down 2.4 percent after higher than expected slippages and provisions in Q1.
9:55 am View on earnings: Sanjeev Prasad of Kotak Securities says the current bull market is a 'weird' one, in which fundamentals don't matter at all.
Speaking to CNBC-TV18, Prasad says the rally is being fuelled by massive inflows into exchange traded funds and that actively traded funds are not getting any meaningful money.
He says broadly the quarterly earnings have been far from impressive. While some key companies have reported strong bottomline growth, in many cases the rise has been driven by change in accounting rules, other income and such one-off factors.
Prasad says the topline growth for most companies have been quite weak.
9:45 am Market outlook: Udayan Mukherjee said marquee companies have been disappointing so far in the first quarter of FY17.
Midcap companies' earnings are patchy, he said. Companies like Dr Reddy's and Bajaj Auto since the start of earnings have disappointed. They have led to EPS cuts, he said.
"When we start totalling up these companies, the earnings growth will have to go down unless there is a miraculous turn of events," he said. For Sensex and Nifty, the earnings season started off poorly.
9:22 am Market surges: After briefly touching 8700, the Nifty is at 8698.75, up 60.25 points or 0.7 percent. The Sensex is up 181.43 points or 0.6 percent at 28233.29. About 994 shares have advanced, 258 shares declined, and 43 shares are unchanged.
BHEL, Bajaj Auto, Tata Steel, L&T and ONGC are top gainers while ICICI Bank, Infosys and Lupin are major losers in the Sensex.
The market has opened on a strong note with the Nifty rushing towards 8700. The 50-share index is up 16.00 points or 0.2 percent at 8654.50. The Sensex is up 71.05 points or 0.3 percent at 28122.91. About 448 shares have advanced, 113 shares declined, and 45 shares are unchanged.
Hero MotoCorp is up 6 percent, Bharti Airtel, BHEL, Tata Steel and ONGC are top gainers. ICICI Bank is down 2 percent.
The Indian rupee gained in the early trade . It opened higher by 22 paise at 66.80 per dollar versus 67.02 Friday. The yen fell following a 3.1 percent surge on Friday as the Bank of Japan boosted purchases of exchange-traded funds.
It could be mixed bag for auto sector in July. Passenger car companies like Maruti may see growth slow down to single digits. However, two-wheeler companies like Hero Moto and TVS Motor may see more than 10 percent growth.
Advanced enzymes will make its stock market debut today. The issue oversubscribed nearly 116 times and expect a very strong listing today.
Among global peers, Asian shares ticked up slightly after disappointing US economic growth data reduced expectations of a rate hike by the US Federal Reserve in the next few months. MSCI's broadest index of Asia-Pacific shares outside Japan. Japan's Nikkei 1.5 percent as the yen had soared after the Bank of Japan's stimulus plans underwhelmed investors.
US gross domestic product increased at a 1.2 percent annual rate in the April-June period, less than a half of a 2.6 percent growth rate economists had expected.
Markets took the data to mean the Federal Reserve was nowhere near policy tightening, even after it had appeared last week to have opened the door to a rate hike later this year by saying near-term risks to the economy had diminished.