Sensex ends higher; Rel Cap, Jain Irrigation top F&O gainers
14 September 2016
3:30 pm Market Closing: Equity benchmarks recovered in late trade as the Sensex gained 18.69 points at 28372.23 and the Nifty up 11 points at 8726.60.
The broader markets outperformed smartly, rising over a percent. About 1742 shares advanced against 965 declining shares on the BSE.
Banking stocks contributed the most to index recovery. Reliance Capital and Jain Irrigation were top F&O gainers whereas Castrol and Just Dial were top losers.
3:15 pm IPO: As ICICI Prudential Life prepares for public offer on September 19, ICICI Bank Managing Director and Chief Executive Chanda Kochhar said that the company will maintain market leadership among private players even without an acquisition. The company plans to raise Rs 6,000 crore from the IPO, the utilisation of the proceeds of which will be decided by the company's board, she said.
The company has been a market leader since 2002 and has been consistent with it strategy, Kochhar told CNBC-TV18, adding that it believes in customer-centric proposition with a focus on cost efficiency.
Kochhar said the protection market is widely under-penetrated in India at the moment and the company will look to tap the opportunity to grow market share further.
3:04 pm Market Update: Equity benchmarks continued to be volatile with the Sensex trading in 150 points range.
The BSE Sensex was down 29.18 points at 28324.36 and the Nifty down 0.80 points at 8714.80. About 1697 shares advanced against 958 declining shares on the BSE.
2:58 pm Interview: GNA Axles is a leading manufacturer of rear axle shafts and spindles with domestic market share of 50 percent. The products are used in light commercial vehicles (LCVs), medium and heavy commercial vehicle (M&HCVs), tractors and construction equipments.
The company has opened its Rs 130 crore public issue with a price band of Rs 205-207 per share.
"We are having a good visibility for next five years so we are going for IPO", Ranbir Singh, CEO of GNA Axles told CNBC-TV18.
He further mentioned, "By 2020 market will be double the size. So, definitely we will grow double in three to four years time".
2:40 pm SBI bonds issue: The dollar denominated bond issuance by the SBI will provide Indian banks with an alternative funding option and would be positive for the sector, rating agencies today said.
The bond issuance by the bank is the first cross-border deal in the dollar AT1 market from an Indian bank and would open up a new source of much-needed regulatory capital and provide a pricing benchmark for other banks keen to access the dollar AT1 market, they said.
"Issuance of Additional Tier 1 (AT1), Basel III- compliance capital securities will set a pricing benchmark for other issuers, and provide Indian banks with an alternative funding option," Moody's Investors Service said.
Fitch Ratings said a successful cross-border AT1 issue by SBI would be a "positive development for India's banking system".
2:20 pm Current account surplus likely?: India is likely to post its first current account surplus in nine years in the latest quarter, which should bolster the rupee though it is not a good sign for the economy as it reflects weak investment demand at home and subdued exports, analysts said.
Forecasts given by investment houses' research notes and from analysts that Reuters spoke to showed expectations centering on a surplus of USD 4 billion, or 0.8 percent of GDP, in April-June quarter.
That compared with a deficit of USD6.2 billion, equivalent to 1.2 percent of GDP, in the same quarter a year ago. And, if the forecasts prove correct it will be the first surplus since January-March 2007, though India is unlikely to keep the surpluses coming.
For the full year ending in March 2017, India is likely to post a deficit even lower than last year's 1.1 percent of GDP, as foreign investment inflows remain steady - and that should be broadly supportive for the rupee.
2:00 pm Market Check
The market remained lackluster in afternoon trade on mixed global cues. The Sensex was down 14.93 points at 28338.61 and the Nifty up 3.45 points at 8719.05.
The broader markets extended upside with Midcap and Smallcap indices rising a percent. About 1691 shares advanced against 910 declining shares on the BSE.
Reliance Capital was the top gainer among midcap stocks, up nearly 8 percent after the board of directors approved plan to independently list home finance business on stock exchanges.
European stocks were higher, shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices. The pan-European STOXX 600 was up 0.31 percent.
European bucked the negative trade trend seen in Asia and the US on Tuesday, where uncertainty over central banks' next moves worried investors.
Oil prices rebounded after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in US crude stocks. Brent crude futures were trading at USD 47.35 per barrel, up 0.53 percent and US West Texas Intermediate futures were up 0.78 percent, at USD 45.25 a barrel.
1:30 pm Rate cut likely?: The RBI may consider chopping interest rate in the coming three months as inflation may slip below 5 percent during September-December period, before inching up in the following quarter, says a report.
According to global financial services major DBS, the softening trend in inflation leaves the door open for a rate cut in the fourth quarter of this calender year "with odds of a move in October on the rise".
"A benign inflation path going forward and likelihood of a dovish policy committee leaves the door open for further easing but this needs to be balanced off with firmer demand dynamics and risks of US rate normalisation as the September Federal Open Market Committee (FOMC) meeting approaches," DBS said in a research note.
The next RBI policy review meet is scheduled for October 4. It would also be the first review under the new RBI Governor Urjit Patel, who assumed charge on September 4, after the end of Raghuram Rajan's three-year tenure.
1:00 pm Market Check
Equity benchmarks remained directionless in afternoon trade after falling more than 2 percent in previous two consecutive sessions on fears of Fed rate hike soon.
The 30-share BSE Sensex was down 37.41 points at 28316.13 and the 50-share NSE Nifty declined 4.45 points to 8711.1.
However, the broader markets maintained outperformance with the BSE Midcap and Smallcap indices rising 0.6 percent and 0.85 percent, respectively on positive breadth.
About two shares advanced for every share falling on the exchange.
Nifty PSU Bank climbed over 1.5 percent on hopes of rate cut by RBI after fall in retail inflation to near 5 percent in August from 6.07 percent in July.
Yes Bank rebounded 2 percent after falling 16.3 percent in previous four consecutive sessions due to company deferred its USD 1 billion QIP issue.
12:50 am Buzzing: HCL Technologies shares climbed 1.5 percent intraday on bagging a contract to provide application management services for the Western Australia-based company.
"HCL will transform and support Synergy's digital and business applications landscape enabling consolidation and rationalisation in the changing energy environment," the IT company said in its filing.
Synergy is Western Australia's largest electricity generator and retailer of gas and electricity.
At the same time, HCL said it would partner with Ignia, an insight company, to implement next generation digital services.
12:40 pm Europe opens: European stocks opened higher shrugging off market jitters over central bank uncertainty and a renewed drop in oil prices.
The pan-European STOXX 600 was up 0.41 percent.
European bucked the negative trade seen in Asia and the US on Tuesday where uncertainty over central banks' next moves worried investors.
The US Federal Reserve meets next week on September 20 although the chances of a rate hike remain slim. Market expectations for a Fed rate hike next week were 15 percent Tuesday, according to the CME Group's FedWatch tool.
12:12 pm FII View: While there has been weakness in the trend momentum for the US market, Nifty might reach its highest level in months, said Daryl Guppy, CEO, guppytraders.com.
Speaking to CNBC-TV18, he said Nifty is the strongest and the most stable of all global charts.
He advises investors to trade the Nifty index itself rather than its constituents as he sees too much volatility in Nifty constituents. Further, banks are a trading opportunity rather than investment opportunity, Guppy added.
12:00 pm Market Check
The volatility in equity benchmarks continued in noon trade with the Nifty hovering in a range of 8695-8720 as investors remained cautious ahead of central banks' meeting.
The Sensex was down 31.36 points at 28322.18 and the Nifty down 3.70 points at 8711.90 whereas the BSE Midcap and Smallcap indices continued to outperform, rising over 0.6 percent.
About 1485 shares advanced against 872 declining shares on the exchange.
Wholesale Price Index inflation increased to 3.74 percent in the month of August compared with 3.55 percent in preceding month.
11:27 am Buzzing: Share price of Sicagen advanced 5.2 percent intraday as it is going to acquire 100 percent equity stake in Danish Steel Cluster from its existing promoters.
The said acquisition will propel the company to capitalise the opportunities in steel and metal fabrication business and is also likely to provide significant long term benefits to the company.
Danish Steel is a Bengaluru based company which specializes in working with stainless steel along with carbon steel, mild steel and aluminum and is also involved in fabricating structure.
11:00 am Market Check: Equity benchmarks remained marginally under pressure amid consolidation whereas the broader markets outperformed with the Midcap & Smallcap rising 0.4-0.6 percent.
The 30-share BSE Sensex was down 59.93 points at 28293.61 and the Nifty down 14.45 points at 8701.15. About 1389 shares advanced against 798 declining shares on the Bombay Stock Exchange.
Tata Steel was down 2 percent after the net loss in Q1 widened 10-fold, though operational performance was very strong. Credit Suisse has maintained outperform rating on the stock with unchanged target price of Rs 440 per share post strong Q1 performance as UK business turned profitable after sale of Scunthorpe. It raised FY18-19 EBITDA estimates by 9-13 percent and said at USD 790 per tonne of enterprise value looks reasonable.
Oil prices rebounded in Asian trade after falling by as much as 3 percent in the previous session, as data from an industry group showed a smaller-than-expected build in US crude stocks.
Brent crude futures were trading at USD 47.26 per barrel, up 0.34 percent, from the last settlement. US West Texas Intermediate futures were up 0.53 percent, at USD 45.14 a barrel.
10:20 am Monsoon: The Southwest Monsoon could start withdrawing in the next 3-4 days, the India Meteorological Department (IMD) today said even as the overall rainfall deficiency increased to 5 percent.
"Conditions are becoming favourable for withdrawal of Southwest monsoon from some parts of West Rajasthan during next 3-4 days," the IMD said.
The normal withdrawal of monsoon from West Rajasthan is September 1. Interestingly, it is also the frontiers where monsoon reaches last and withdraws first.
Cessation of rainfall activity over the area for continuous 5 days, establishment of anticyclone in the lower troposphere and considerable reduction in moisture content are three major factor that determine the withdrawal of the seasonal rainfall.
Meanwhile, the overall monsoon deficiency has reached to around 5 percent. From June 1 to September 13, the country as a whole has recorded 759.9 mm of rainfall as against 802 mm of precipitation, which is the normal level.
10:00 am Market Check
Equity benchmarks remained rangebound in morning trade while the broader markets marginally outperformed amid weak global cues.
The 30-share BSE Sensex was down 48.11 points at 28305.43 and the 50-share NSE Nifty fell 13.60 points to 8702. The market breadth was positive as about two shares advanced for every share falling on the Bombay Stock Exchange.
ICICI Bank, Asian Paints, SBI, Reliance Industries, Adani Ports, NTPC and Maruti were gainers whereas TCS, HDFC, HDFC Bank, Tata Motors, ITC, Tata Steel, and ONGC were under pressure.
Global markets were lower as uncertainty over central banks' moves spurred jitters.
'Favouring the doves', the poor US economic data does not make for a good case for the US Fed raising benchmark rates in September, said Geoff Lewis of Manulife Asset Management.
He said the Federal Reserve will not raise rates until December. However, he believes there is a major chance of the US Fed hiking the rate in 2017.
9:48 am IPO: Rear axle shafts manufacturer GNA Axles has opened its 63 lakh shares public issue for subscription today with a price band of Rs 205-207 per share.
The Jalandhar-based company aims to raise maximum Rs 130 crore through public issue. Of which, it already raised Rs 37.88 crore from three mutual fund houses under its anchor investors portion on September 12.
It issued 18.3 lakh equity shares at Rs 207 per share to 3 anchor investors Reliance Small Cap Fund, UTI MF and HDFC Trustee Company.
The company intends to utilise the net issue proceeds for purchase of plant & machinery; working capital requirements; and general corporate purposes.
9:25 am FII View: Sanjay Mookim of Bank of America Merrill Lynch says falling interest rates should act as a catalyst for a 'classic' economic recovery over time.
The effects of recently approved reforms should also be visible over a couple of years, he adds.
He says, however, Indian equity valuations have increased meaningfully on global cues, even as a recovery is tepid at best. "This drives our near-term caution. India will not be immune to global risk-off/volatility events," he says.
He advocates sticking with quality and avoiding operational uncertainty.
9:15 am Market Check
Equity benchmarks started off Wednesday's trade on a flat note after seeing correction in previous two consecutive sessions.
The Sensex was up 10.15 points at 28363.69 and the Nifty up 10.95 points at 8726.55.
ICICI Bank, Sun Pharma, Reliance Industries, NTPC, SBI, Hindalco, BPCL and Yes Bank were early gainers while Coal India, Adani Ports, ITC, Tata Motors, HDFC, Zee Entertainment and Bharti Infratel lost ground.
The Indian rupee opened at two weeks low at 66.99 per dollar, down 7 paise against 66.92 Monday.
Ashutosh Raina of HDFC Bank said the hawkish Federal Reserve speaks, increasing the probability of Fed hiking rates at its September FOMC, has sent the global markets into a tizzy.
He expects USD-INR pair to trade in the 67-67.50/dollar range in the near term.
The US dollar gained against the yen and riskier commodity currencies after the impact of dovish remarks from a top Federal Reserve official faded, boosting sentiment toward the greenback.
Asian markets were mostly lower in trade today following negative lead from Wall Street, with Shanghai down 0.6 percent as uncertainty over central banks' next moves spurred jitters.