Nifty ends above 8650 ahead of Aug F&O expiry; Aurobindo up 7%
24 August 2016
Equity benchmarks ended marginally higher in a choppy trade on Wednesday ahead of expiry of Nifty August futures and options contracts. Investors also waited for cues from the Federal Reserve Janet Yellen's speech at Jackson Hole on Friday.
Volatility on Dalal Street continued for the third consecutive session today. The 30-share BSE Sensex was up 69.73 points at 28059.94 and the 50-share NSE Nifty gained 17.70 points at 8650.30.
Narrow range for the last few sessions indicates that there could be a breakout most likely on the upside soon, Ashwani Gujral of ashwanigujral.com says.
On Friday after (Federal Reserve Chief) Yellen's speech, the market can see fresh range expansion, he feels.
Global markets were mixed as investors remained cautious ahead of a key speech by US Federal Reserve Chair Janet Yellen on Friday at Jackson Hole, Wyoming at a global central banking conference, a platform traditionally used by Fed chiefs to hint monetary policy direction.
The broader markets outperformed benchmarks as the BSE Midcap and Smallcap indices rose 0.6 percent each on positive market breadth. About 1538 shares advanced against 1176 declining shares on the exchange.
3:30 pm Market closing: After another day of volatility, the market has ended flat. The Sensex was up 69.73 points or 0.2 percent at 28059.94, and the Nifty closed up 17.70 points or 0.2 percent at 8650.30. About 1522 shares advanced, 1191 shares declined, and 204 shares were unchanged.
Maruti, Cipla, NTPC, Infosys and Sun Pharma were top gainers while Lupin, Tata Steel, TCS, Tata Motors and Coal India were losers in the Sensex.
3:15 pm Upgrade: Shares of Maruti rose over 3 percent intraday after CLSA upgraded it to buy with a target of Rs 5850 per share. It feels success of new products in personal vehicle segment and reduced exposure to yen works in favour of Maruti.
"These factors, combined with higher free cash flow (FCF( generation post-Gujarat plant deal, justify a higher valuation multiple than the stock's historical average. The operational outlook is strong given improving PV industry growth andabating margin concerns," CLSA says in a note.
Success of Baleno (a premium small car), Ciaz (a sedan) and Vitara Brezza (an urban SUV) has taken the company to leadership position in all segments except rural SUVs and significantly improved Maruti's long-term market share outlook.
3:00 pm Exclusive: Citibank is in initial stages of launching a USD 1 billion digital contract for end-to-end transformation of its global operations, reports CNBC-TV18.
The contract, which will be one of the largest digital contracts being launched so far, will focus on mobility, big data, analytics and multiple areas of digital transformation, as part of Citibank's consolidation drive for its global operations.
Citibank may send expression of interest for the contract by January 2017.
Sources say bidding might begin by March 2017 and top information technology (IT) vendors like TCS, Infosys, Wipro and HCL Technologies are expected to bid.
2:45 pm Welspun India corrects further: Global retail giant Walmart is reviewing cotton certification records of Welspun India in the wake of Target Corporation's decision to terminate contract with the Gujarat-based textiles maker over alleged lapses in products supplied to it.
Confirming that Welspun supplies a number of products to Walmart, a spokesperson of the US retail major said: "We are currently reviewing Welspun cotton certification records and plan to have additional conversations with Welspun. If we discover an issue, we will handle it appropriately."
The development follows Target Corp, which had after an extensive investigation, confirmed that Welspun that uses Egyptian cotton to make bedsheets and pillowcases sold by the retailer, substituted another type of non-Egyptian cotton when producing these sheets between August 2014 and July 2016.
The stock fell 42 percent in three consecutive sessions.
2:35 pm Market Outlook: Ahead of the expiry of monthly future and options (F&O) contracts later this week, Nifty has seen a 61 percent rollover for the month of August, the highest over the last few months.
In an interview with CNBC-TV18, Yogesh Radke, Head of Quantitative Research at Edelweiss Securities, said: "Looking at the rollovers and the way the positions have been made in the market looks like we would be heading upwards from these levels for the September series."
2:20 pm Interview: Engineers India 's bet on the international sector is paying off, with about Rs 100 crore revenue accruing from there and margins coming back up to 20 percent.
In an interview with CNBC-TV18, the company's chairman Sanjay Gupta said the company has a strong order book and he is also seeing a lot of demand from hydrocarbon sector and projects like 'Namami Gange'.
International order pipeline is very strong and EIL has seen a major breakthrough in orders from Bangladesh territory, he said.
2:00 pm Market Check
Volatility continued on Dalal Street for the third consecutive session ahead of expiry of August futures & contracts.
The Sensex declined 14.36 points to 27975.85 and the Nifty slipped 5.50 points to 8627.10 whereas the broader markets remained positive as the BSE Midcap and Smallcap indices gained half a percent each.
European stocks are lacking direction this week as investors await cues from Federal Reserve Chief Janet Yellen, who is set to deliver a speech at the annual gathering of central bankers at Jackson Hole, Wyoming, in which hints on the timing of a US interest rate rise could emerge.
Oil prices fell as an unexpected build in US crude inventories weighed on markets, along with concerns that Chinese crude demand could falter as Beijing clamps down on alleged tax evasion in the oil industry. International Brent crude oil futures were trading at USD 49.34 a barrel, down 1.2 percent, from their last close. US West Texas Intermediate (WTI) crude was down 1.68 percent, at USD 47.29 a barrel.
1:50 pm Market outlook: While the equity investors continue to remain largely bullish, the global bond markets suggest a recession is at hand. Going by earnings report of companies and recent employment and wages data, something seems amiss, says Manishi Raychaudhuri, Asian Regional Equity Strategist, BNP Paribas.
The global economy might be somewhere in between and the two markets may have to converge sooner or later, he says. Thus, equity investors need to take up a defensive stance and be a cautious as Raychaudhuri feels a correction is going to hit markets soon.
He still feels Sensex will end the calendar year 2016 above 29,000 points and may remain flat till the last leg of 2016 when it may rise another 1,000 points.
The market is still sluggish with the Sensex up 24.88 pointsat 28015.09. The Nifty is up 5.25 points at 8637.85. About 1449 shares have advanced, 1086 shares declined, and 193 shares are unchanged.
Maruti, Cipla, NTPC, Infosys and Sun Pharma are top gainers while Lupin, Tata Motors, Tata Steel, Coal India and Adani Ports are losers in the Sensex.
IndiGo Airlines owner InterGlobe Aviation fell 2 percent as media reports suggest that Tigerair may take back 11 jets subleased to IndiGo. Tigerair says it will grow capacity via the returning aircraft subleased to IndiGo.
Country's largest lender State Bank of India (SBI) said it will raise up to Rs 11,000 crore through Basel III compliant debt instruments on a private placement basis.
The bank has informed the BSE that "the Committee of Directors for Capital Raising at its meeting held on August 24, 2016 authorised the bank to raise up to Rs 11,100 crore additional tier 1 capital, by way of issue of Basel III compliant perpetual debt instrument in USD and/or INR, at par, through private placement to overseas and/or Indian investors".
12:40 pm Europe opens: European stocks opened lower in a choppy week of trade so far, as investors tread cautiously ahead of a key speech by US Federal Reserve Chair Janet Yellen on Friday.
The pan-European STOXX 600 was down 0.55 percent in early trade.
Yellen is set to deliver a speech at the annual gathering of central bankers at Jackson Hole, Wyoming, in which investors will be listening for hints on the timing of a US interest rate rise.
12:20 pm USFDA nod: Jubilant Life Sciences today said it has received approval from the US health regulator for Telmisartan Tablets, used for the treatment of hypertension, in the American market.
In a BSE filing, the company said "it has received Abbreviated New Drug Application (ANDA) final approval for Telmisartan Tablets, USP 20,40 and 80mg, the generic version of Micardis Tablets of Boehringer Ingelheim Pharmaceuticals Inc".
As on June 30, 2016, Jubilant Life Sciences had a total of 770 filings for Oral Solids of which 578 have been approved in various regions globally.
"This includes 70 ANDAs filed in the US, of which 44 have been approved and 104 filings in Europe," it said.
12:00 pm Market Check
Equity benchmarks remained rangebound in noon trade ahead of expiry of August derivative contracts. Investors globally also waited for the speech by Federal Reserve Chief Janet Yellen at Jackson Hole.
The 30-share BSE Sensex was down 2.25 points at 27987.96 and the Nifty fell 2.40 points to 8630.20 whereas the broader markets continued to outperform by rising half a percent. About 1424 shares advanced against 1006 declining shares on the BSE.
Infosys, Maruti, NTPC, Aurobindo and Cipla gained 1-4 percent while Lupin, HUL and Tata Steel fell over a percent.
Markets in Asia finished mixed, as traders remained in a wait-and-see mode ahead of Federal Reserve Chair Janet Yellen's speech at Jackson Hole on Friday. Japanese shares rose, with the Nikkei 225 finishing up 99.94 points, or 0.61 percent, at 16,597.30, while across the Korean Strait, the Kospi closed down 6.17 points, or 0.3 percent, at 2,043.76.
11:50 am Market outlook: Consolidation in the Indian telecom market is immiment and is an interesting theme to play for in the sector, Suresh Mahadevan, ?Managing Director - Head of Asian Telecom and Media research at UBS AG tells CNBC-TV18. Mahadevan says his firm is bullish on the telecom space. He cites potential for strong growth in the data segment as a key trigger. Both globally and in Asia, regulators and telcos are realising it will be helpful to have a lot of spectrum in the data segment, he said. He added that he is positive on stocks such as Bharti Airtel and Idea , and is waiting for Reliance Jio's commercial operations to begin.
11:30 am Buzzer: Share price of Jubilant Life Sciences touched a 52-week high of Rs 519.50, gains 3 percent intraday as it has received ANDA approval for Telmisartan tablets. "The company has received abbreviated new drug application (ANDA) final approval for Telmisartan tablets, USP 20, 40 and 80mg, the generic version of Micardis tablets of Boehringer Ingelheim Pharmaceuticals Inc., which is used for the treatment of hypertension," as per BSE Release. "As on June 30, 2016, Jubilant Life Sciences had a total of 770 filings for Oral Solids of which 578 have been approved in various regions globally. This includes 70 ANDAs filed in the US, of which 44 have been approved and 104 filings in Europe," it added.
The market is rangebound as investors are on wait and watch mode ahead of F&O expiry. The Sensex is up 46.89 points or 0.2 at 28037.10, and the Nifty up 9.50 points or 0.1 percent at 8642.10. About 1392 shares have advanced, 815 shares declined, and 145 shares are unchanged.
Lupin, TCS, HUL, Coal India and ITC are laggards while Maruti, NTPC, Cipla, Infosys and Sun Pharma are gainers in the Sensex.
Oil fell after industry data showing an increase in US crude stocks added to oversupply worries and traders took advantage of a recent rally to book profits.
Prices had closed higher on news that Iran was willing to join calls by OPEC and Russia for production curbs after scuttling previous efforts to reach a deal in April.
But the gains were reversed in Asian trade after data from the American Petroleum Institute (API) overnight showed US crude inventories rose by 4.5 million barrels in the week ending August 19, after falling by one million barrels the week before.
10:50 am Buzzing: Welspun India fell for the third consecutive session today, especially after supply of wrong products. The stock shed 42 percent since Monday.
The US-based retailer Target Corp has decided to terminate its contract with the company for alleged lapses in products supplied to it.
The Indian textiles manufacturer said it is investigating the root cause and in the process of appointing an external auditor to audit its supply systems and processes.
Target Corporation is the second largest retailer in the US after Walmart and is a major customer for Welspun.
Now Walmart will also review Welspun India's supply record.
10:25 am Goldman on GDP: Goldman Sachs continues to maintain its GDP growth forecast of 7.9 percent for this fiscal. The on-going second quarter is expected to grow at 7.8 percent level backed by higher government spend and rise in consumption activity, a note by the broking firm says.
It expects robust consumption trends to offset weak private investment in the economy.
The full year growth will be benefited by a good monsoon, recently introduced 7th Pay Commission, clearance of key reforms, favorable fiscal monetary policy and continuation of foreign direct investment (FDI) inflows, says the note.
''Corporate leverage and bank NPL issues may constrain activity in heavily levered sectors, but are unlikely to trump the improvement elsewhere,'' says the note.
10:00 am Market Check
Equity benchmarks continued to consolidate for the third consecutive session with the Nifty hovering around 8650 level ahead of expiry of August derivative contracts.
The 30-share BSE Sensex was up 29.20 points at 28019.41 and the 50-share NSE Nifty gained 12.05 points at 8644.65 while the broader markets outperformed with the BSE Midcap and Smallcap indices rising 0.5 percent each.
About two shares advanced for every share falling on the exchange.
Infosys rallied for the second consecutive day, up 1.7 percent. Maruti Suzuki and NTPC gained 2 percent each while Lupin shed 1.7 percent.
9:50 am Result: Drug firm Aurobindo Pharma reported a 23.81 percent rise in consolidated net profit to Rs 584.96 crore for the first quarter ended June 30, 2016, mainly on account of robust sales.
The company had posted a net profit after taxes, minority interest and share of profit of joint ventures of Rs 472.45 crore for the corresponding period of the previous fiscal, Aurobindo Pharma said in a filing to BSE.
Consolidated total income from operations also rose to Rs 3,725.90 crore for the quarter under consideration as against Rs 3,298.93 crore for the same period a year ago.
9:40 am Foreign money: Foreign Investment Promotion Board (FIPB) has cleared seven FDI proposals worth Rs 290 crore, while it deferred decision on other seven applications including that of a wholly-owned subsidiary of Idea.
Tikona Digital Networks' Rs 267-crore proposal to increase foreign equity to 76.73 percent through issuance of CCDs was approved by the government.
According a Finance Ministry statement, an application to increase foreign investment in Idea Cellular Infrastructure Services Ltd (ICISL) to up to 67.5 percent was deferred by the panel, chaired by Economic Affairs Secretary Shaktikanta Das.
ICISL is a wholly-owned subsidiary of Idea, which has become a foreign-owned company with more that 50 percent overseas investment.
9:30 am FII view: Ridham Desai of Morgan Stanley expects upward earnings revisions, adding the Sensex target for June 2017 offers double-digit relative US dollar upside versus emerging markets (EM).
"India is currently 200 basis points overweight in our EM portfolio, second only to Taiwan," he says.
According to him, the best-performing styles are likely to shift from quality to growth. He feels cyclicals may outpace defensives, the market favourites since 2008.
He likes discretionary, private banks and industrials over staples and healthcare.
The market has opened firm ahead of August Futures and Options expiry tomorrow as global cues are supportive. The Sensex is up 103.55 points or 0.4 percent at 28093.76 and the Nifty is up 15.90 points or 0.2 percent at 8648.50. About 309 shares have advanced, 96 shares declined, and 28 shares are unchanged.
Maruti, Infosys, ONGC, NTPC and Adani Ports are top gainers while Lupin, TCS, Coal India, Hero MotoCorp and Tata Steel are losers in the Sensex.
The Indian rupee opened lower by 8 paise at 67.14 per dollar versus 67.06 Tuesday.
NS Venkatesh of Lakshmi Vilas Bank said, "The focus for the dollar trading remains on Yellen's speech on Friday at Jackson Hole, where it is expected that Fed might signal rates to stay substantially lower over a longer period."
The dollar index hold steady as investors reassess the outlook for US monetary tightening.
Asian stocks consolidated a recent run of gains, helped by Wall Street's rise overnight, even as oil prices slid on trade data showing a surprise build-up in US crude stocks.
The upbeat housing data prompted markets to extend their search for further clues to whether the Federal Reserve will raise US interest rates this year. Global central bankers will gather in Jackson Hole, Wyoming, later this week with investors focused on a speech by Fed Chair Janet Yellen on Friday.
Oil prices fell as an unexpected build in US crude stocks weighed on markets, along with concerns that Chinese crude demand could falter as Beijing clamps down on alleged tax evasion in the oil industry.