Nifty ends at 8709, Sensex gains 102 points; ONGC, Coal India up
24 October 2016
3:30 pm Market closing: The market has ended higher with the Sensex up 101.90 points or 0.4 percent at 28179.08. The Nifty was up 15.90 points or 0.2 percent at 8708.95. About 1674 shares advanced, 1179 shares declined, and 220 shares were unchanged.
ONGC, Coal India, Tata Motors, ICICI Bank and Lupin were top gainers while Wipro, Asian Paints, Axis Bank, Bharti Airtel and Hero MotoCorp.
2:59 pm Market Update: Equity benchmarks remained higher with the Sensex rising 113.99 points to 28191.17 and the Nifty climbing 26.05 points to 8719.10.
About 1687 shares advanced against 1094 declining shares on the BSE.
2:45 pm Interview: "We expect the price rise to be reasonable. We don't expect any arbitrary and high increased price though election in Uttar Pradesh (UP) are around the corner", Vijay Banka, Wholetime Director & CFO of Dwarikesh Sugar Industries said.
Talking about sugar prices, he mentioned, "In India also, we expect lower production in the coming season mainly on the account of unfortunate drought that state of Maharashtra and Karnataka suffered last year. We expect sugar prices to be firm".
2:35 pm Further rate cut?: There is room for a 50 basis point rate cut by the Reserve Bank over the next few months with 25 bps each likely in February and April, says Bank of America Merrill Lynch.
RBI is expected to pause on the December 7 monetary policy review that rate cut would be a "bullet wasted".
According to the global financial services major, the "dovish" RBI MPC minutes released last week, signal towards a more accommodative policy stance in the coming months.
"We add a 25 bps RBI rate cut in April in addition to the 25 bps penciled on February 7 after dovish RBI MPC minutes were released last week," BofA-ML said in a research note.
2:20 pm Stake sale: The finance ministry is likely to propose to the Cabinet at least five different methods, including relative peer review and discounted cash flow, for valuation of over a dozen PSUs across sectors identified for strategic stake sale.
With privatisation of PSUs being considered after a gap of over 12 years, the ministry feels that valuation of equity becomes important in the case of strategic sale of companies that are not listed or in cases where capital markets may not fully reflect the intrinsic worth of a share disinvested earlier.
"The use of a particular method of valuation will depend on health of the company, the sector in which it operates and the company's intrinsic strength," an official told PTI.
For this, the ministry has proposed at least five different valuation methodologies, including balance sheet method, transaction multiple, and asset valuation procedure, for these PSUs which will be up for outright sale or involves lowering of government equity below 50 percent.
2:00 pm Market Check
Equity benchmarks extended gains in afternoon trade with the Sensex rising more than 150 points, driven by ICICI Bank, ONGC and Tata Motors. Positive European cues also supported the market.
The 30-share BSE Sensex was up 154.04 points at 28231.22 and the 50-share NSE Nifty rose 38.25 points to 8731.30. The market breadth remained positive as about 1717 shares advanced against 1036 declining shares on the BSE.
ONGC gained rallied more than 4 percent as the board of directors will consider a proposal for declaration of bonus issue, if any, in its meeting, scheduled on October 27.
ICICI Bank, Tata Motors, Lupin, SBI, Adani Ports and Coal India gained more than 2 percent whereas Wipro fell 3 percent on lower than expected guidance for Q3.
European stocks were higher with investors focused on fresh economic data and corporate earnings. The pan-European STOXX 600 was 0.44 percent higher as an important week for earnings begun in Europe.
1:50 pm Hungry for food & agri business: Investors' appetite for food and agri businesses got dampened significantly this year with just 62 private equity deals worth USD 250 million, the lowest in value terms over the last five years, says a report.
The fall in food tech and online grocery deal value has resulted in the decline in transactions in this space, according to a report by News CorpVCCEdge, the financial research platform of News Corp VCCircle.
So far this year, there were 62 PE deals worth USD 250 million in the food and agri space, while in the previous year a total of 153 deals worth USD 1154 million were inked.
1:30 pm New IPO norms: A proposed crackdown on algorithmic trading in India could hurt the earnings of the country's two main stock exchanges just as both bourses prepare to make their much-awaited stock market debuts.
The Securities and Exchange Board of India (SEBI) in August outlined new proposals aimed at curbing high frequency trading (HFT) in the country, amid fears that retail investors would be disadvantaged against such advanced and expensive systems.
The new rules - expected to be finalised in coming months - come at an awkward time for India's two main bourse operators, National Stock Exchange (NSE) and BSE Ltd, which are both drumming up investor interest for their respective planned listings.
Continued rally in banks, auto, and oil & gas stocks is supporting market. The Sensex is up 116.68 points or 0.4 percent at 28193.86, and the Nifty is up 28.45 points or 0.3 percent at 8721.50. About 1702 shares have advanced, 941 shares declined, and 233 shares are unchanged.
ICICI Bank, Adani Ports, SBI, Lupin and Tata Motors are gainers in the Sensex while Wipro, Asian Paints, Bharti Airtel, Axis Bank and Infosys are losers in the Sensex.
European stocks opened slightly higher with investors focused on fresh economic data and corporate earnings. The pan-European STOXX 600 was 0.44 percent higher.
Meanwhile, the Bank of England will release its latest Asset Purchase Facility Quarterly Report on Monday. Media reports over the weekend said that small UK-based banks were preparing to leave the city before the end of the year, whereas international banks were planning its departure for the start of 2017.
12:59 pm Market Update: Benchmark indices gained strength in afternoon trade with the Sensex rising 105.35 points to 28182.53 and the Nifty climbing 25.60 points to 8718.65.
About 1667 shares advanced against 905 declining shares on the BSE.
12:43 pm Europe opens: European stocks opened slightly higher with investors focused on fresh economic data and corporate earnings.
The pan-European STOXX 600 was 0.44 percent higher.
Investors are focused on flash manufacturing and services PMIs for the euro zone.
12:30 pm CLSA on Oberoi Realty: The brokerage house continued to rate Oberoi Realty buy with a new target price of Rs 398 (Rs 360 earlier).
"Oberoi's 2Q presales increased 24 percent QoQ to Rs 500 crore, a positive surprise given subdued market conditions. The presale increase was seen both at its luxury Worli project (up 27 pe) and at other locations (up 21%). The 100k sf of new office leasing space was also encouraging. Its 2Q P&L was subdued, partly on higher rainfall activity. With Rs48bn in presales yet to enter its P&L, visibility on future revenue recognition and cash flow remains high," it explains.
12:15 pm Japan's data: Japanese manufacturing activity expanded in October at the fastest pace in nine months as new orders rose, a preliminary survey showed on Monday, suggesting domestic demand could lead to higher economic growth.
The Flash Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) rose to a seasonally adjusted 51.7 in October from a final 50.4 in the previous month.
The index remained above the 50 threshold that separates expansion from contraction for the second month and showed that activity expanded at the fastest since January.
The index for new orders rose to a preliminary 51.3 from 49.6 in the previous month, marking the first expansion in nine months.
The flash index for new export orders rose to 53.1 from a final 51.1 in September, indicating the second consecutive month of growth.
12:00 pm Market check
Equity benchmarks remained rangebound ahead of expiry of October derivative contracts this week while the broader markets outperformed.
The 30-share BSE Sensex was up 45.42 points at 28122.60 and the 50-share NSE Nifty rose 7.15 points to 8700.20 while the BSE Midcap and Smallcap indices gained 0.25 percent and 0.7 percent, respectively.
The market breadth continued to be strong as about 1569 shares advanced against 925 declining shares on the BSE.
ICICI Bank, Oberoi Realty, SBI, Jindal Steel, Tata Motors (DVR), Axis Bank, ITC and NCC were most active shares on exchanges.
Markets in Asia were mixed, as Japanese shares held steady as data showed the country's exports fell less than expected in September despite a relatively stronger yen.
11:55 am FII view: "As expected, many high frequency indicators we track have weakened since May, some of them weakening more than expected," Neelkanth Mishra of Credit Suisse says.
Oil demand fell 2 percent in September, the first decline in 22 months, taking the 3 months moving average to 6 percent YoY, the lowest since May 2015.
There can be benign explanations for this, like a high base for oil, and strong rainfall and sand shortage for cement, Mishra says, adding this period also has several festivals where a date falling in a different month can skew YoY comparisons.
But altogether, it does make it important that growth picks up November/December onwards as govt spending kicks in, he says.
He further says, "We are starting to be concerned about FY18 growth due to GST start."
11:45 am Market outlook: India stands out amongst emerging markets in the long-term and is less vulnerable to global factors, says Navneet Munot, CIO of SBI MF. In an interview with CNBC-TV18, Munot outlined his market and sectoral outlook. He said that globally the investor psyche is changing and they see financial assets delivering better returns than real assets. On the geopolitical uncertainty arising due to the US Presidential election, Munot said that he will not discard a Donald Trump presidency and sees his victory leading to significant volatility in the market. Giving his outlook on the domestic market he said that India is a stock picker's paradise and sees higher margin of safety in large cap stocks.
11:30 am Result impact: Mindtree shares hit fresh 52-week low of Rs 452.10, down 5.6 percent intraday Monday. Analysts remained negative on the stock and slashed target price as numbers were quite disappointing, though it had already issued profit warning in September for second quarter. Macquarie has cut its FY17-19 EPS (earnings per share) estimates for Mindtree by around 15 percent and lowerd target multiple to 12x (from 14x earlier due to uncertainties). Consequently, it downgraded the stock to underperform with a lower target price of Rs 400 (against Rs 550 earlier). The brokerage house expects margins also to remain soft because of slow revenue growth and continued pricing pressure.
Benchmark indices are volatile as IT stocks are under pressure post September earnings while auto and banks are gaining. The Sensex is up 35.26 points or 0.1 percent at 28112.44, and the Nifty up 4.15 points at 8697.20. About 1516 shares have advanced, 844 shares declined, and 169 shares are unchanged.
ICICI Bank, Adani Ports, SBI, Tata Motors and Maruti are top gainers while Wipro, Asain Paints, Bharti Airtel, Axis Bank and TCS are losers in the Sensex.
Gold prices were broadly stable after locking in their first weekly gain in four last week, with markets waiting for further clues on the timing of any interest rate hike.
Disappointing growth in the world's largest economy might make it less likely the US Federal Reserve will raise interest rates in December. Markets now put the chances the Fed will act at about 70 percent. Gold is highly sensitive to increases in US interest rates, which can lift the opportunity cost of holding non-interest-bearing gold.
10:59 am Market Update: Equity benchmarks remained volatile. The Sensex was up 42.93 points at 28120.11 and the Nifty gained 5.25 points at 8698.30.
About 1517 shares advanced against 809 declining shares on the BSE.
10:50 am Boardroom: Jayant Agro reported a 21 percent rise in revenue to Rs 385 crore and the earnings before interest, tax, depreciation and amortization (EBITDA) grew 68 percent to Rs 32.4 crore year-on-year in the second quarter.
Speaking to CNBC-TV18, Vikram Udeshi of Jayant Agro, said that the growth and margins momentum is expected to continue in the next quarter. The company has buffer castor stock which will suffice till the new crop comes in January-February.
Udeshi expects revenue to be in range of 15-20 percent for FY17.
10:35 am Mindtree falls: Mindtree shares hit fresh 52-week low of Rs 452.10, down 5.6 percent intraday as analysts remained negative on the stock and slashed target price after disappointing quarterly earnings.
Macquarie cut its FY17-19 EPS (earnings per share) estimates for Mindtree by around 15 percent and lowerd target multiple to 12x (from 14x earlier due to uncertainties). Consequently, it downgraded the stock to underperform with a lower target price of Rs 400 (against Rs 550 earlier).
The software services provider reported a 23.2 percent fall in profit at Rs 94.8 crore, and dollar revenue degrowth of 3 percent due to execution challenges and cross-currency headwinds, which were significantly below estimates, the brokerage house says.
10:16 am Poll: Adani Power's second quarter loss may narrow sharply to Rs 8 crore from Rs 369 crore in a year-ago period, according to average of estimates of analysts polled by CNBC-TV18.
Improvement in financial performance may be due to healthy capacity utilisation and accrual of compensatory tariff while lower coal cost may support margin, feel analysts.
Revenue during the quarter is seen rising 3 percent to Rs 5,930 crore from Rs 5,751 crore in same period last fiscal.
Analysts expect Adani Power's overall plant load factor (ex-Udupi) to improve by 440 basis points in September 2016.
Operating profit or EBITDA (earnings before interest, tax, depreciation and amortisation) is likely to jump 10.7 percent year-on-year to Rs 1,983 crore and margin may expand 226 basis points to 33.4 percent in July-September quarter.
10:00 am Market Check
Benchmark indices continued to consolidate in morning trade with the Nifty hovering around 8700 level. Banking & financials, oil and select auto stocks gained whereas IT and infra stocks were under pressure.
The 30-share BSE Sensex was up 46.14 points at 28123.32 and the 50-share NSE Nifty rose 8.65 points to 8701.70. The broader markets outperformed benchmarks.
The BSE Midcap index gained 0.16 percent and Smallcap climbed 0.6 percent on positive breadth. About two shares advanced for every share declining on the exchange.
Wipro fell nearly 4 percent after the company's lower-than-expected guidance for October-December quarter. The company expects 0-2 percent growth in Q3 over Q2 while analysts expected it at 1-3 percent.
Idea Cellular fell nearly 2 percent and Bharti Infratel gained 2.6 percent ahead of quarterly earnings.
9:55 am Foreign money increases: Foreign Portfolio Investors (FPIs) raised their exposure in 17 Sensex companies in July-September quarter, buying shares for nearly Rs 34,000 crore at the current valuation.
However, the holding of FPIs declined in 12 other blue-chips in the second quarter of the current fiscal compared to preceding three months and data of one company was not available, showed an analysis of shareholding pattern of the Sensex constituents.
Overseas investors have picked up maximum stake in Axis Bank during the quarter under review increasing their holding by 4.94 percent. FPIs' stake in Axis Bank rose to 50.75 percent during three months ended September 30 from 45.81 percent in June quarter.
9:45 am Result poll: Telecom operator Idea Cellular's July-September quarter is expected to be weak as profit is likely to fall sharply by 40 percent sequentially to Rs 130 crore.
According to average of estimates of analysts polled by CNBC-TV18, revenue is also seen declining 1.3 percent to Rs 9,360 crore on sequential basis.
This is a seasonally weak quarter for Idea as it has a higher percentage of rural subscribers which results in a greater impact of negative seasonality.
EBITDA (earnings before interest, tax, depreciation and amortisation) in Q2 is likely to dip 2.4 percent to Rs 3,000 crore and margin may shrink 40 basis points to 32 percent compared with previous quarter. Higher churn and pricing pressure can put pressure on margin, feel analysts.
9:30 am Market oulook: The second quarter earnings season has not been a directional change for markets, believes Harendra Kumar of Elara Capital.
Currently, we are in a bounce and the bull market will begin after Nifty touches 9100, which will happen next year, Kumar said adding that new bets on the market will be placed then.
''We are entering decadal bull market,'' he told CNBC-TV18.
The biggest opportunity exists in corporate banking side, especially beaten names that haven't rallied yet. In financial space, housing and microfinance companies can be looked at. The bull trade for NBFCs is in its last stage, he added.
The market has opened flat with positive bias Monday. The Sensex is up 57.69 points or 0.2 percent at 28134.87 and the Nifty is up 14.35 points or 0.2 percent at 8707.40. About 238 shares have advanced, 49 shares declined, and 14 shares are unchanged.
Sun Pharma, ITC, ICICI Bank, SBI and GAIL are top gainers while Wipro, Bharti Airtel, TCS and Hero MotoCorp are losers in the Sensex.
The Indian rupee opened flat at 66.90 per dollar on Monday versus 66.89 Friday.
Pramit Brahmbhatt of Veracity said, "Expectation of rate hike by US Fed is clearly reflecting in a stronger dollar index, which will continue to put its peers under pressure. Thus rupee too will remain under pressure."
"The USD-INR pair is expected to trade in a range of 66.80-67.20/dollar," he said.
The dollar rose to its highest level since early February against a basket of currencies, boosted by higher expectations of a Federal Reserve interest rate hike this year and by the euro weakening to seven-month lows.
Hawkish comments from Fed officials including New York Fed President William Dudley and higher expectations that Hillary Clinton will win the US presidential election have increased bets that the US central bank will raise rates in December.
Global cues are tepid this morning. Asian stocks were subdued early after Wall Street's sluggish performance at the end of last week, while the dollar hovered near nine-month highs as fresh comments from a Federal Reserve official boosted bets of a rate hike by year-end.
Japan's Nikkei stood little changed, while South Korea's Kospi gained 0.4 percent.
On Friday in Wall Street, the S&P 500 .SPX and the Dow were little changed and the Nasdaq advanced as a record day for Microsoft and earnings from McDonald's helped offset a fall in energy and healthcare shares.
Crude oil prices settled slightly higher on Friday to put up a fifth straight weekly gain for US crude as bullish comments from Russia contended with a resurgent dollar and a rising oil rig count.