Sensex lower, Nifty closes at 8082; ICICI Bank, SBI, Lupin drag
20 December 2016
3:30 pm Market Closing: Equity benchmarks fell for the fifth consecutive session, dragged by banks, oil and pharma stocks.
The 30-share BSE Sensex was down 66.72 points at 26307.98 and the 50-share NSE Nifty declined 21.95 points to 8082.40.
About two shares declined for every share rising on the BSE.
3:12 pm Interview: The US-subsidiary of 8K Miles has entered into a definitive agreement to acquire Cornerstone Advisors Group LLC for USD 10.25 miilion inclusive of earn-out payments as a combination of cash and stock.
Speaking to CNBC-TV18, Suresh Venkatachari, Chairman & CEO, 8K Miles said Cornerstone's margins are close to 20 percent and he hopes that the company meets the expectation of 34-35 percent margins after combining with 8K Miles.
Cornerstone Advisors Group is an executive level healthcare company which advises large hospitals in terms of entire information technology planning which is in the healthcare space or electronic medical record (EMR) selection or even the overall planning of the healthcare direction.
Venkatachari added that Cornerstone's earnings per share (EPS) will be positive from the first year itself.
3:00 pm Action against errant officials: Finance Minister Arun Jaitley today said the Axis Bank management has assured the government that it is taking action against erring officials who are involved in irregularities post demonetisation.
The minister further said the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) are keeping a watch on the activities on bankers, and the top management of banks has been advised to take action against delinquent officials.
"The chairperson (CEO Shikha Sharma) of the bank has given details... the bank has identified the officers who the investigative agencies could not catch and... they have sacked the suspected officials. (It) has taken action against its officials," Jaitley said after a pre-budget meeting with bankers where Axis Bank CEO and MD Shikha Sharma was present.
2:40 pm Buzzing: Shares of Visa Steel gained 13.5 percent intraday as it has resumed operations at its DRI plant in Odisha.
The company has resumed operations at its DRI plant for production of sponge iron and two sub-merged arc furnaces of ferro alloy plant for production of ferro chrome after getting necessary clearances from in State Pollution Control Board, Odisha.
With the improvement in raw material availability, the operational performance at Visa Steel had significantly improved during Q2 of FY2016-17. The production of ferro chrome has increased from 17,008 MT to 24,274 MT in Q2FY2017, a year-on-year growth of 43 percent, as per company release.
2:20 pm MF industry growth: Helped by growing interest from retail investors and aggressive buying of stocks, mutual fund industry grew at a rapid pace in 2016 with addition of almost Rs 4 lakh crore, or 28 per cent, to its asset base and is looking to cross Rs 20-trillion mark in the new year.
Having already attained a record asset under management (AUM) of Rs 16.5 lakh crore in November, the fund houses are looking to end the year 2016 with a total kitty of Rs 17.3 trillion, industry experts said.
Fund houses are also upbeat about the industry performance in the new year while expecting investment from new investors to fuel the growth of the sector.
Also, demonetisation of high-value currency notes could have a positive impact, with the industry betting big on conversion of cash assets into financial investments.
2:00 pm Market Check
Equity benchmarks as well as broader markets extended losses in afternoon trade with the Sensex falling over 100 points, dragged by banking & financials and oil stocks.
The 30-share BSE Sensex was down 102.68 points at 26272.02 and the 50-share NSE Nifty fell 33.20 points to 8071.15. The BSE Midcap and Smallcap indices were down around 1 percent each as market breadth weakened further.
More than two shares declined for every share rising on the Bombay Stock Exchange.
Banks as well as non-banking finance stocks continued to reel under selling pressure on fears of likely farm loan waiver. Even the collection efficiency of non-banking finance companies, after demonetisation, is still low, though it improved in last 3-4 weeks. Bharat Financial, M&M Financial and Bajaj Finance lost 4-8 percent.
European stocks were edging higher in spite of two separate attacks in the German and Turkish capitals. Germany's DAX and France's CAC gained 0.3 percent each.
1:20 pm SEBI nod for IPOs: Avenue Supermarts and Continental Warehousing Corporation have received markets regulator Sebi's approval to float initial public offerings.
These firms had filed their draft offer documents with Securities and Exchange Board of India (Sebi) in September.
Avenue Supermarts, which owns and operates supermarkets retail chain D-Mart, is looking to raise Rs 1,870 crore through the public issue.
The public issue of Continental Warehousing comprises fresh issue of shares worth Rs 418.80 crore and an offer for sale of up to one crore shares by Warburg Pincus and 36,76,820 shares by Abraaj, according to Draft Red Herring Prospectus.
1:00 pm Market Check
The market continued to reel under selling pressure, heading towards its fifth straight session of losses amid thin trading volumes at FIIs desk.
The 30-share BSE Sensex was down 85.22 points at 26289.48 and the 50-share NSE Nifty declined 26.30 points to 8078.05 while the broader markets extended losses in afternoon trade, underperforming benchmarks.
The BSE Midcap slipped 0.6 percent and Smallcap lost 1 percent on weak breadth. About two shares declined for every share rising on the exchange.
HDFC, ICICI Bank, SBI, ONGC and Bajaj Auto were top contributors to Sensex losses, down 1-2.5 percent while TCS, Infosys and ITC maintained the lead, up 1-2 percent.
Asian shares traded mostly higher with the exception of China and Hong Kong as continued capital outflows from the mainland weighed on sentiment.
Japan's Nikkei 225 closed up 0.53 percent or 102.93 points at 19,494.53 after wavering near flat for most of the session. The Bank of Japan (BOJ) announced its decision to hold interest rates in negative territory and kept the 10-year government bond yield target at around zero percent.
12:58 pm Market expert: Nischal Maheshwari of Edelweiss Securities said that he was more worried about what is happening around the world as India's pain from demonetisation is a short-lived affair.
Given what US Fed has guided for three more rate hikes next year, there is a worry as this is negative for all emerging markets, he said. Although India is better positioned than other EMs, challenge of the appreciating dollar always remains, he said.
Although FIIs have been selling, he said, it has been well countered by domestic buying. He doesn't see any big fall in markets.
He doesn't believe that Nifty will trend back to its March lows. Yes, there may be a challenge in the next quarter because of cash ban, but in the longer term he doesn't see the macros deteriorating.
12:36 pm Withdrawal of USFDA approvals: Drug major Sun Pharma today said one of its subsidiaries has voluntarily requested the US health regulator to withdraw approval for 28 Abbreviated New Drug Applications belonging to Ranbaxy Laboratories.
It further said: "These older drug products belong to erstwhile Ranbaxy Laboratories and are not being marketed in the US since 2008."
In April 2014, Sun Pharma had announced the acquisition of the troubled rival Ranbaxy in an all-stock transaction worth USD 4 billion.
12:25 pm Tax exemption likely?: Brokerages and analysts are pinning their hopes on Union Budget 2017 to deliver income tax sops to help reduce pain induced by the government's demonetisation drive.
CLSA's Senior Economist Rajeev Malik made no bones about the implementation of the currency swap drive and said that the government will look to address those issues in the Budget with a ''feel-good approach''. That approach may come in the form of a raise in income tax exemption limit in the Budget, he said.
The Budget may offer a change in individual tax slabs and give sops for rural India, he added.
While the near-term impact of the currency recall exercise was expected to be negative, December earnings for corporates will reflect the real impact, said Malik, adding that the impact of demonetisation is likely to span over two quarters.
12:00 pm Market Check
Equity benchmarks fell further with the Nifty trading below the 8100 level, weighed by banking & financials and NBFCs. However, the buying in technology stocks arrested the fall.
The 30-share BSE Sensex was down 65.93 points at 26308.77 and the 50-share NSE Nifty slipped 21.60 points to 8082.75. About two shares declined for every share rising on the BSE.
The correction in banks as well as non-banking finance stocks may be on fears of likely farm loan waiver. PSU Bank index fell the most, down 2.7 percent while Bank index declined over a percent.
Country's largest lenders State Bank of India, ICICI Bank, Punjab National Bank and Bank of Baroda dropped more than 2 percent. NBFCs like Bharat Financial, Equitas Holdings, M&M Financial and Shriram Transport etc fell 1-4 percent.
HDFC, Bajaj Auto, Adani Ports, HUL, Axis Bank and Tata Steel were down 1-2.5 percent while Infosys, TCS and ITC gained 1-2 percent.
11:41 am Market Update: Equity bencmarks lost ground in late morning trade with the Nifty breaking 8100 level, dragged by banks.
The 30-share BSE Sensex was down 66.12 points at 26308.58 and the 50-share NSE Nifty fell 22.80 points to 8081.55.
The market breadth also weakened further as about 1355 shares declined against 836 advancing shares on the BSE.
11:33 am Buzzing: Mumbai-based pharma company Wockhardt shares advanced more than 3 percent intraday after the UK healthcare regulator said company's Chikalthana facility complied with good manufacturing practice norms.
"UK Medicines and Healthcare products Regulatory Agency has confirmed that general compliance with the principles and guidelines of good manufacturing practice of the company's manufacturing unit at L-1, Chikalthana, Aurangabad," the company said in its filing.
In view of this, the approval status of the said unit continues, it added.
In addition, UK MHRA has considered this manufacturing facility suitable for risk based inspection with reduced inspection frequency of 2 years from the existing inspection frequency of 1 year.
11:20 am Order win: HPL Electric & Power has received orders of over Rs 100 crore, which include Rs 70 crore for Bhopal Smart City Lighting project and Rs 33 crore for energy meters from Southern Power Distribution.
For Bhopal Smart city lighting order, HPL has earlier entered as part of a consortium with Bharti Infratel and Ericsson.
11:00 am Market Check
Benchmark indices remained steady amid low volumes in morning, supported by technology, infra and FMCG stocks. Banks stocks remained under pressure.
The 30-share BSE Sensex was up 23.06 points at 26397.76 and the 50-share NSE Nifty gained 4.85 points at 8109.20.
Nifty IT index climbed 1 percent as TCS and Infosys rallied 1-2 percent. ITC and L&T continued to support the market with a percent upside.
Shares ICICI Bank, SBI, ONGC, Bajaj Auto and Axis Bank remained lower by 1-2 percent.
Non-banking finance company Bharat Financial was the most active stock on the NSE, falling more than 3 percent.
10:45 am Buzzing: Hyderabad-based pharma company Granules India shares fell nearly 4 percent intraday after the US health regulator completed inspection of Vizag facility with seven observations.
The joint venture company said it would respond to these observations within the stipulated time period.
Granules OmniChem facility, a 50:50 joint venture company of Granules India and Ajinimoto OmniChem NV, is located at Vizag, Andhra Pradesh.
This facility currently manufactures API intermediates.
10:25 am FII View: Caesar Maasry of Goldman Sachs says the historical pattern of emerging markets returns, which suggests there is a moderate 'window of opportunity' for emerging markets to perform dependent upon the pace of higher rates and stronger US dollar.
The macro vulnerability of major emerging markets has come down in recent years as reserves have built up again and current account balances have improved and the balancesheets of most emerging markets corporates are relatively healthy and interest coverage ratios are now improving from their depressed levels.
10:00 am Market Check
The volatility continued in equity benchmarks amid thin trading volumes as FIIs activity remained low due to Christmas vacation.
The 30-share BSE Sensex was up 14.97 points at 26389.67 and the 50-share NSE Nifty gained 5.45 points at 8109.80. The market breadth was positive as about 971 shares advanced against 807 declining shares on the BSE.
Bajaj Auto was the biggest loser among Sensex 30 stocks, down 2 percent followed by ICICI Bank, HDFC, Axis Bank, Hero Motocorp, ONGC and HUL while GAIL extended its previous day's rally, up nearly 2 percent on top of 2 percent upside yesterday. ITC, Infosys, TCS, L&T, NTPC and Coal India gained 0.7-1.3 percent. HDFC Bank rebounded after weak early trade.
Oil prices also moved very little, with liquidity fading in the run-up to the Christmas weekend. US West Texas Intermediate crude oil futures were trading at USD 51.95 per barrel, virtually unchanged from their last settlement.
Gold prices too were steady after deadly incidents in Germany and Turkey failed to spur safe-haven buying, with markets focused on the possibility of further US interest rate hikes next year.
9:40 am BoJ meet: The Bank of Japan (BOJ) left policy unchanged today at the conclusion of its two-day policy meeting, as widely expected.
The central bank maintained the negative 0.1 percent interest rate imposed on banks for some excess reserves, left the 10-year Japanese government bond (JGB) yield target at around zero, and kept annual rises in JGB holdings at 80 trillion yen ($676.9 billion).
The BOJ also upgraded its economic assessment, noting that the economy continued to recover moderately. It also revised up its view on exports and output.
9:25 am Jefferies on NTPC: Jefferies has a buy call on the stock with a target price of Rs 195 as earnings should rise at 16 percent CAGR between FY16-19.
The company's efforts focused on raising profit from internal efficiencies & PLF (plant load factor) improvements, the brokerage house says, adding confidence remains in adding 3-5 GW in FY17 against expectation of 2 GW.
9:15 am Market Check
Equity benchmarks started off day on a flat note with positive bias Tuesday, with the Nifty holding 8100 level, supported by ITC and Infosys. HDFC, Reliance Industries, HDFC Bank, ICICI Bank and Tata Motors were under pressure.
The 30-share BSE Sensex was up 24.51 points at 26399.21 and the 50-share NSE Nifty rose 6.25 points to 8110.60.
The Indian rupee has opened higher today at 67.86 per dollar against previous close of 67.87 a dollar.
Ashutosh Raina of HDFC Bank says the dollar index continues to move higher, currently above 103 level, after the hawkish FOMC meeting and some recent geopolitical concerns.
The USD-INR pair has also slid from recent highs with continuing portfolio outflows and overall dollar strength, he adds.
Raina expects the pair to trade in the 67.60-68/dollar range today.
The dollar regained some momentum, with the dollar index up at 103 compared with levels around 102 yesterday.
The Turkish Lira and Russian Ruble fell to session lows against the greenback on Monday after the Russian ambassador to Turkey was shot by an off-duty police officer in Ankara.
Asian shares traded mixed, with the Nikkei wavering despite the Bank of Japan sounding a positive note on Japan's economic outlook as it kept monetary policy steady.
Wall Street extended a recent rally on Monday but finished the session short of earlier highs after several people were killed by a truck driven into a Christmas market in Germany.