Sensex recovers, Nifty reclaims 8200; auto stocks shine, RIL up

2:57 pm Market Update: Benchmark indices remained flat after recovery from day's low. The Sensex was down 19.62 points at 26606.84 and the Nifty declined 1 point to 8184.80.

About 1816 shares advanced against 804 declining shares on the BSE.

2:50 pm Auto sales: Farm equipment maker Escorts today reported 15.8 percent increase in tractor sales at 3,187 units in December 2016.

The company had posted tractor sales of 2,751 units in the same month previous year, Escorts Ltd said in a BSE filing.

Domestic sales last month were at 3,043 units as against 2,727 units in December 2015, up 11.6 percent.

During the month, exports stood at 144 units, compared to 24 units in the year-ago period, the company added.

2:30 pm Drug launch: Natco Pharma has launched a generic Hepatitis C treatment drug in Nepal under the brand name 'Velpanat.' The product is the first generic version of Sofosbuvir 400mg/Velpatasvir 100mg fixed dose combination sold by Gilead Sciences Inc under brand name Epclusa.

The Hyderabad-based firm has signed a non-exclusive licensing agreement with Gilead Sciences Inc, to manufacture and sell generic versions of its chronic hepatitis C medicines in 101 developing countries.

2:15 pm Rate cut: A day after SBI slashed its rate offering steeply, country's fourth biggest private sector lender Kotak Mahindra Bank today announced a cut of up to 0.45 percent in its lending rates.

The bank has cut marginal cost of funds based lending rate by 0.20 to 0.45 percent across tenors, it said in a statement.

The one year MCLR, which is used as the benchmark for a bulk of long-term consumer loans, has been reduced by 0.20 percent while the maximum cut of 0.45 percent has been effected in the one month and three month MCLRs.

After revision, the one-year MCLR comes down to 9 percent, while the one month and three month MCLRs will be 8.25 percent and 8.40 percent, respectively.

2:00 pm Market Check
Benchmark indices recouped losses in afternoon trade with the Nifty reclaiming 8200, driven by auto and pharma stocks.

The 30-share BSE Sensex was up 28.71 points at 26655.17 and the 50-share NSE Nifty gained 13.45 points at 8199.25.

About 1800 shares advanced against 778 declining shares on the BSE.

Nifty Auto index gained nearly 2 percent as analysts do not expect major impact of demonetisation on earnings, especially after considering December auto sales. Tata Motors, Mahindra & Mahindra and Maruti Suzuki gained 2-3.5 percent.

Tata Steel climbed nearly 4 percent followed by Adani Ports while HDFC and SBI retained top position in the selling list, down 3.5 percent and 2 percent, respectively.

1:40 pm Auto sales: Automobile sales have taken a hit in December due to the demonetisation scheme that was implemented on November 9 across the country.

Speaking on specific companies, Ashwin Patil of LKP Securities believe that Maruti Suzuki will see momentum returning in future with a line-up of new models. Maruti saw a 1 percent decline in sales in December.

In two-wheelers, Bajaj has been performing better than other two-wheeler companies, he said. However, in the last two years, it has seen a decline in exports. Now, with demonetisation, domestic sales, too, are getting crippled.

1:30 pm European markets: European markets started the new year on a negative footing.

The pan-European Stoxx 600 was 0.11 percent lower on Monday morning.

The German DAX opened 0.42 percent lower and the French CAC was 0.29 percent lower. The FTSE 100 returns to trading after the New Year weekend only on Tuesday. Markets are also closed in the US

The new year could significantly change the European landscape, as the U.K. prepares to the leave the EU and key elections take place across the continent. The head of the German Ifo Institute told Reuters that Italian voters will eventually demand to quit the euro area.

In the UK Prime Minister May asked for unity during her New Year's address on Sunday as the country gets closer to negotiating its terms to exit the EU.

The market has made some recovery intraday as auto, infra, pharma and metal stocks lead. The Sensex is down 22.96 points at 26603.50 and the Nifty is down 6.25 points or  at 8179.55. About 1654 shares have advanced, 825 shares declined, and 1155 shares are unchanged.

Tata Steel, Bharti Airtel, M&M, Dr Reddy's Labs and BHEL are top gainers whule HDFC, SBI, Bajaj Auto, ICICI Bank and Axis Bank are losers in the Sensex.

Meanwhile, DK Joshi, Chief Economist at Crisil Ratings said demonetisation has shaved off growth of two quarters, but the situation will normalise by March.

A good Budget and interest rate cuts can drive the growth in the next quarter, he said. While growth has been impacted, same can't be said for the growth trend.

The central bank is likely to cut rates by another 25 basis points and no more if it wants to stick to its 4 percent inflation target.

Nagarjan Narasimhan, Business head at Crisil said that investment will continue to drive up the public sector. Corporate topline growth is expected to be in range of 9-10 percent for FY17.

Sectors like real estate where cash component is large will see stress as far as earnings are concerned, said Narasimhan. For next year, infrastructure linked sectors will do relatively better. Sectors like IT, pharmaceutical and telecom will see slightly muted growth next fiscal.

12:59 pm Market Update: Benchmark indices remained under pressure in afternoon trade. The Sensex declined 97.15 points to 26529.31 and the Nifty fell 25.85 points to 8159.95.

About 1572 shares advanced against 853 declining shares on the BSE.

12:45 pm Auto sales: Mahindra & Mahindra announced its auto sales performance for December 2016 which stood at 36,363 vehicles compared to
37,915 vehicles during December 2015.

The passenger vehicles segment (which includes UVs, cars and vans) sold 16,698 vehicles in December 2016 as against 18,197 vehicles during December 2015. The company's domestic sales stood at 34,310 vehicles during December 2016, as against 34,839 vehicles during December 2015.

Exports for December 2016 stood at 2,053 vehicles. For the nine months period ending December 31, 2016, the company sold 3,68,577 vehicles, against
3,53,589 vehicles for the same period last year, representing a growth of 4%.

12:25 pm Market Expert: The current year is looking tougher for the market, Atul Suri of Rare Enterprises said adding that 7900-8000 will be the most crucial levels for the market. If 7900 breaks, Nifty could test levels of 7500.

Full recovery in market can happen only from 8600.

''Make or break for this market will be banking index,'' Suri said. However, the sector is not showing much buoyancy or leadership in current times.

Market trends are determined by the foreign flows and not domestic flows. DIIs will continue to grow via the systematic investment plan (SIP) on back of structural changes.

12:15 pm USFDA nod: Drug firm Lupin has received final approval from the US health regulator to market cevimeline hydrochloride capsules, used for treatment of symptoms of dry mouth in patients with Sjogren's syndrome, in the US market.

The company has received final approval from the United States Food and Drug Administration (USFDA) to market its cevimeline hydrochloride capsules 30 mg, Lupin said in a filing to BSE today.

The company's product is a generic version of Daiichi Sankyo Inc's Evoxac capsules, it added.

The company further said that it will commence promoting the product immediately. Evoxac capsules had US sales of USD 40.8 million as per IMS MAT September 2016 data, it added.

12:00 pm Market Check
Equity benchmarks continued to reel under selling pressure in noon, dragged by banking & financials and FMCG stocks. Oil, telecom, infra and pharma stocks outperformed.

The 30-share BSE Sensex was down 128.24 points at 26498.22 and the 50-share NSE Nifty fell 35.60 points to 8150.20 while the broader markets continued to outperform benchmarks.

The BSE Midcap index gained 0.2 percent and Smallcap was up 0.6 percent on positive breadth. About 1499 shares advanced against 809 declining shares on the exchange.

HDFC was the biggest loser among Sensex 30 stocks, down 3.5 percent followed by SBI, ICICI Bank and Bajaj Auto with 2 percent loss. However, Reliance Industries, Lupin, Bharti Airtel, Sun Pharma, Dr Reddy's Labs and Maruti continued to support the market.

11:55 am IPO review: The primary market emerged as the 'cash cow' for investors in 2016, amid high volatility in the secondary market, as 70 per cent of new entrants are trading well above their issue price, giving investors returns of up to two times. Out of 26 companies that came out with IPOs in 2016, 18 have registered smart gains, ranging 2-170 per cent against the price at which they had issued shares to investors and the rest eight firms have however failed to attract investors and are quoting below their issue price. These 18 companies have rewarded investors with returns in the range of 2-170 per cent, with three of them hitting it over 100 per cent till date, an analysis of the stock performance of the newly-listed firms showed.

11:45 am Market outlook: The current year is looking tougher for the market, Atul Suri of Rare Enterprises said adding that 7900-8000 will be the most crucial levels for the market. If 7900 breaks, Nifty could test levels of 7500. Full recovery in market can happen only from 8600. ''Make or break for this market will be banking index,'' Suri said. However, the sector is not showing much buoyancy or leadership in current times. The next leg of opportunity for the market will come from consumption stocks. While consumption theme is still intact, Suri recommends staying away from banks.

11:30 am PE valuation: Global private equity (PE) players made good a sudden jump in valuation of their investments in 2016 and chose to pull out a record USD 10.3 billion from domestic markets.

The value of PE investment was stagnant, or even in some cases declined, over the past one decade.

This time, they mostly shied away from pumping in more dollars after their investment in a slew of start-ups hit an all-time high in 2015. It translated into a 30 per cent decline at USD 16 billion in 2016, down from USD 23 billion in 2015.

The total PE exits rose 1 per cent to USD 10.3 billion, from USD 9.4 billion in 2015. This is the highest-ever pullout from the country, according to brokerage house Bain and Co.

Benchmark indices continue to reel under selling pressure on first trading day of 2017. The Sensex is down 144.73 points or 0.5 percent at 26481.73, and the Nifty down 44.80 points or 0.5 percent at 8141. About 1387 shares have advanced, 793 shares declined, and 1450 shares are unchanged.

BHEL, Dr Reddy's Labs, Maruti, Lupin and Bharti Airtel are top gainers while HDFc, SBI, Bajaj Auto, ICICI Bank and Axis Bank are losers in the Sensex.

Gold prices rose by Rs 133 to Rs 27,500 per 10 grams in futures trading today as speculators created fresh positions.

Analysts said building up of positions by speculators led to rise in gold prices at futures trade here but absence of cues from global markets, which remained closed, capped the gains.

10:59 am Market Update: Benchmark indices extended losses with the Sensex down 160.63 points at 26465.83 and the Nifty down 43.90 points at 8141.90.

About 1330 shares advanced against 778 declining shares on the BSE.

10:53 am Buzzing: Shares of Eicher Motors gained nearly 5 percent intraday after reporting solid sales growth for Royal Enfield in December despite currency demonetisation.

Total Royal Enfield sales during the month grew by 42 percent to 57,398 units compared with 40,453 units sold in year-ago period while month-on-month growth was only 0.14 percent.

Exports also surged 160 percent year-on-year to 1,082 units but fell 26.4 percent compared with previous month.

10:37 am Interview: Sunil Munjal, Chairman of Hero Corporate Services said that demand in December for most consumer goods did suffer following demonetisation. The government, however, saw higher tax mop-up in November which shows that the economy has seen growth.

He believes liquidity will take another 2-3 months to come back into the system. Industry will take longer anywhere from 9 months to 12 or 18 months to revive.

He expects the government to widen the tax base. Particularly, for industry, he believes corporate tax rates need to come down. Some of the exemptions will need to go away and the plan is to bring it to 25 percent which won't be good enough, he said.

10:20 am FII View: Mixo Das of Nomura says he expects some weakness in Asian equities in H12017, as earnings and valuations both come under pressure, with some recovery later.

He is structurally overweight on Indonesia and India (top Overweight) on a combination of improving growth and progress on reforms, notwithstanding expected periods of consolidation.

"2017-end Sensex target is 31,340," Das says.

10:00 am Market Check: Equity benchmarks remained under pressure in morning trade but the broader markets outperformed with the BSE Midcap and Smallcap indices rising 0.1 percent and 0.6 percent, respectively.

The 30-share BSE Sensex was down 98.93 points at 26527.53 and the 50-share NSE Nifty fell 26.40 points to 8159.40.

The market breadth was strong as about two shares advanced for every share falling on the BSE.

HDFC, SBI and Bajaj Auto were the biggest losers, down 1.8-2.7 percent followed by ITC, ICICI Bank and Infosys.

Reliance Industries, TCS, L&T, Dr Reddy's Labs, Wipro, Lupin, NTPC and ONGC gained 0.4-1 percent.

9:45 am Market outlook: Sanjeev Prasad of Kotak Institutional Equities believes the global 'macro' factors may be less relevant in CY17.

With developed market yields starting to move towards normal levels on the back of anticipated economic recovery, attention will shift to fundamentals once again unless developed market economic growth were to falter in CY17, he says.

Given the disappointment in earnings over the past few years, Prasad feels investors would naturally be a bit wary about placing a great deal of confidence in consensus earnings estimates for FY17-19.

He says FY17 earnings growth of 13 percent (Nifty 50 Index basis) is largely back-ended and reflects the very low base of net profits in several stocks in H2FY16.

9:30 am Market slips: The Sensex is down 140.69 points or 0.5 percent at 26485.77 and the Nifty is down 43.45 points or 0.5 percent at 8142.35. About 898 shares have advanced, 549 shares declined, and 2181 shares are unchanged.

NTPC, Dr Reddy's Labs, Coal India, Wipro and BHEL are top gainers while SBI, HDFC, BAjaj Auto, ICICI Bank and Hero MotoCorp are losers in the Sensex.

The market has started 2017 on a flat note as the Sensex is up 55.14 points or 0.2 percent at 26681.60. The Nifty is up 19.10 points or 0.2 percent at 8204.90. About 334 shares have advanced, 72 shares declined, and 3221 shares are unchanged.

SBI, Wipro, Maruti, Dr Reddy's Labs and NTPC are top gainers while HDFC, Bharti, M&M, ITC and ICICI Bank are major losers in the Sensex.

The Indian rupee opened lower by 3 paise at 67.95 per dollar on Monday versus 67.92 Friday.

Pramit Brahmbhatt of Veracity said, "We expect the rupee to gain after finding support at 68/dollar. We expect the USD-INR pair to trade in a range of 67.80-68.20/dollar today." The dollar index slipped well below the 103 mark. The euro surged against the dollar, currently at 1.05.

Banks will be in focus as the markets wake up to giant rate cuts by two biggest public sector banks after the influx of low cost deposits since the demonetisation announcement. SBI slashed rate by 90 basis points and PNB by 70 basis points.

Auto sales for the month of December was a mixed bag. Maruti reported lowest sales since June 2016 while Royal Enfield continues to show strength in sales. Weakness in commercial vehicle sales continued.

Petrol price was hiked by Rs 1.29 a litre -- the third increase in a month, and diesel rate was raised by 97 paise a litre - the second hike in a fortnight. The increase in rates announced by oil firms is excluding state levies and the actual hike will be higher.