Sensex sinks 184 points, Nifty ends at 8725; Auto, Realty drag

3:30 pm Market Closing: Benchmark indices closed lower on Wednesday despite positive global cues, weighed by auto, pharma, infra and metals stocks.

The 30-share BSE was down 183.75 points at 28155.56 and the 50-share NSE Nifty fell 67.60 points to 8724.70. About three shares declined for every share rising on the BSE.

Tata Motors plunged 10 percent and Sun Pharma was down 4 percent after earnings missed analysts' estimates. ICICI Bank, L&T, Adani Ports and Maruti Suzuki fell 1-2 percent while ITC, HDFC Bank, TCS, Reliance Industries and HDFC gained.

3:20 pm M&M production output: Home-grown auto major Mahindra and Mahindra is hiking production of its trucks with the introduction of a second shift at its Chakan plant to meet increased orders for the Blazo vehicles.

The company, which today introduced a service support initiative for its commercial vehicles on the Delhi-Mumbai service corridor, will sell trucks only under the Blazo range once the BS IV emission norms kick in from April 1 this year.

"We have been selling on an average around 500 units a month and last month we sold 616 units. Considering the orders for our Blazo trucks, we have added a second shift so that from this month and March we produce more vehicles," Nalin Mehta, CEO Mahindra Truck and Bus Division and Managing Director, Mahindra Truck and Bus Ltd told PTI.

3:15 pm Market Update: Equity benchmarks extend losses again, with the Sensex down 196.17 points at 28143.14 and the 50-share NSE Nifty falling 71.25 points to 8721.05.

More than three shares declined for every share rising on the BSE.

2:45 pm dividend : Power utility CESC today said its board has declared an interim dividend of Rs 10 per share (100 per cent) for the year ending March 31, 2017.

The dividend will be paid on and from March 6, 2017, the company said in a BSE filing.

CESC on February 10, 2017, had reported a 4.83 percent rise in standalone net profit at Rs 152 crore for the third quarter ended December 31, 2016.

The company is engaged in generation and distribution of electricity.

2:35 pm Drug recall: Drug firms Dr Reddy's Labs and Aurobindo Pharma have separately started recalling few quantities of two different drugs from the US market as they are found to be not up to the mark.

According to a notification issued by the US Food and Drug Authority, Dr Reddy's is recalling Olanzapine tablets USP of 2.5 mg while Aurobindo is recalling Pantoprazole Sodium for Injection, 40mg per vial from the market.

Both the recalls are voluntarily initiated by respective companies, the FDA said.

Dr Reddy's is recalling 5,904 bottles of Olanzapine 30-count bottles from the market. Aurobindo is recalling Pantoprazole Sodium for Injection, 40mg per vial, single-dose of 29,800 vials under Class-III classification.

2:20 pm Interview: KK Singh, Chairman and Managing Director of Rolta India, said that its conscious decision to decline contracts for third party-based projects had contributed to a flattish third quarter.

Speaking to CNBC-TV18, Singh said the company wanted to do more IP work and had been undertaking more system integration work in the third quarter, which it wanted to reduce it as it affected the bottomline.

In earnings reported earlier, net profit was down 22.5 percent at Rs 98.7 crore against Rs 127.3 crore quarter-on-quarter, while total income was up 0.2 percent at Rs 343.9 crore versus Rs 343.2 crore.

Singh said foreign exchange loss at Rs 16 crore was also a factor, while there was a lot of stress on financial costs because of a defence project.

He said discussions were still on among bondholders to negotiate a debt restructuring after the software services provider failed to make interest payments, but no solution had been arrived at as yet.

2:00 pm Market Check
The market has recovered from day's low in afternoon trade amid positive global cues. ITC shares led the recovery, up 1.5 percent followed by HDFC Bank, HDFC and Reliance Industries.

The 30-share BSE Sensex was down 131.11 points at 28208.20 and the 50-share NSE Nifty fell 48.55 points to 8743.75.

About 2126 shares declined against 621 advancing shares on the BSE.

Tata Motors crashed 9.5 percent as analysts worried over company's hedging losses that may continue for next 3-4 quarters.

Sun Pharma slipped nearly 4 percent after lower-than-expected earnings in Q3.

European bourses were higher after Janet Yellen, the chair of the US Federal Reserve, hinted at a possible rate hike next month.

1:40 pm Nomura on inflation: WPI inflation is expected to rise in the next three months and is likely to average around 4.4 percent in 2017, much higher than 2 percent in 2016, says a Nomura report.

India's WPI inflation rose to a 30-month high of 5.2 percent in January from 3.4 percent in December. WPI inflation, which reflects the annual rate of price rise, has risen for the second straight month, notwithstanding the cash crunch following demonetisation.

"The (WPI) acceleration was entirely supply-push led by higher commodity prices rather than demand-pull; but it also suggests rising pressure on profit margins," Nomura India chief economist Sonal Varma said in the note.

1:20 pm Mining auction: Government has chalked out a plan to put as many as 280 mines with a mineral wealth of over Rs 10 lakh crore to auction in the next fiscal, a senior official said.

"The 280 mines planned for auction next fiscal have the mineral wealth of over Rs 10 lakh crore. Besides, there are 83 mines under litigation," Mines Secretary Balvinder Kumar told reporters here.

He said that the auction of the 83 mines under litigation depend upon the outcome of legal process.

Kumar also told that soon the drone technology will be used for preparing topography maps and inspection of mines.

1:00 pm Market check
The market extended losses in afternoon trade, weighed by auto, metals, infra and select banks stocks after pricing in quarterly earnings.

Market valuations are slightly beyond comfort and with no big macro events lined up, a runaway rally is unlikely, says Mahesh Patil of Birla Sun Life AMC. He feels it is better to wait-and-watch on investments as earnings recovery is likely to be slow and the implementation of Goods and Services Tax (GST) is round the corner.

The 30-share BSE Sensex slipped 196.80 points or 0.69 percent to 28142.51 and the 50-share NSE Nifty fell 66.60 points or 0.76 percent to 8725.70.

The fall in broader markets was more compared with benchmarks. The BSE Midcap index shed 1.3 percent and Smallcap lost 1.5 percent on weak breadth.

About four shares declined for every share rising on bourses.

Nestle India shares fell nearly a percent ahead of earnings later today. The packaged food maker's fourth quarter earnings are expected to good year-on-year due to low base but sequential performance may be impacted by demonetisation. Profit is seen rising 24 percent year-on-year to Rs 227.5 crore and revenue may increase 15.5 percent to Rs 2,263 crore in the quarter ended December 2016, according to average of estimates of analysts polled by CNBC-TV18.

Tata Motors fell further, down nearly 10 percent as hedging losses are likely to continue for next 3-4 quarters. Edelweiss downgraded the stock to hold from buy, with reduced target price at Rs 501 (from Rs 604) after lowering FY17/18 EBIDTA estimates by 35/25 percent to Rs 29,500/38,500 crore to reflect weaker margins.

ICICI Bank, Sun Pharma, Infosys, Maruti Suzuki, Adani Ports and Tata Steel were down 1-4 percent while HDFC Bank, ITC, Reliance Industries and HDFC continued to support the market, up 0.3-0.9 percent.

12:55 pm Earnings estimates: Packaged food maker Nestle India's fourth quarter earnings are expected to good year-on-year due to low base but sequential performance may be impacted by demonetisation.

Analysts say demonetisation impact may be seen most on chocolates, confectionary & discretionary part of portfolio (contributes around 25-30 percent to total revenue). However, impact may be offset by higher presence in urban areas.

Profit is seen rising 24 percent year-on-year to Rs 227.5 crore and revenue may increase 15.5 percent to Rs 2,263 crore in the quarter ended December 2016, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit during the quarter is likely to jump 16.2 percent to Rs 451 crore and margin may expand by 10 basis points to 19.9 percent compared with year-ago period.

12:33 pm Economic growth: Sources told CNBC-TV18 that Central Statistical Organisation may project FY17 GDP growth at 6.8-6.9 percent in second advance estimates as crude oil, pace of capital formation are big worries for FY18.

The government may not consider further public sector bank recapitalisation for FY17, say sources.

12:20 pm Interview: Ravi Uppal, Managing Director and Chief Executive Officer of JSPL, said the company was committed to reducing its huge debt pile, but it would need to be done progressively and the immediate priority was to steady earnings.

Speaking to CNBC-TV18, Uppal said that one way of getting rid of its last reported consolidated gross debt of Rs 46,816 crore was to sell disposable assets, even as the company actively looks to sell stakes in its units.

Declaring its third quarter earnings on Tuesday evening, JSPL said it had managed to cut down its consolidated net loss by almost half to Rs 455 crore against a loss of Rs 882 crore in the same quarter last year. The company's consolidated revenue went up 25 percent to Rs 5,408 crore during the quarter while EBIDTA went up to Rs 1,277 crore against Rs 542 crore in the third quarter of the previous financial year.

12:00 pm Market Check: Equity benchmarks as well as broader markets extended losses in later morning trade, with the Nifty breaking 8750 after investors digested third quarter earnings.

The 30-share BSE Sensex dropped 157.30 points to 28182.01 and the 50-share NSE Nifty fell 54.40 points to 8737.90.

The BSE Midcap and Smallcap indices plunged 1 percent each on weak breadth. About three shares declined for every share rising on the exchange.

ICICI Bank and Infosys declined more than 1 percent. L&T also lost morning gains, down 0.2 percent. Reliance Industries also came off day's high a bit.

Tata Motors shares continued to be under pressure, down 8 percent after disappointing earnings. Edelweiss downgraded to hold from buy, with reduced target price at Rs 501 (from Rs 604) after lowering FY17/18 EBIDTA estimates by 35/25 percent to Rs 29,500/38,500 crore to reflect weaker margins.

Sun Pharma slipped 3 percent after gross margin in Q3 contracted 560 basis points QoQ (440 bps YoY), primarily led by higher contribution from Olmesartan AG sales and Japan business consolidation. Hence, Motilal Oswal cuts FY18/19 EPS estimates by around 8 percent, building slower ramp-up in sales and margin expansion. However, it believes the current stock price does not reflect key positives like Ranbaxy integration benefits, Halol/Mohali plant resolution and investments in specialty business. It remains an attractive Indian play on specialty business in the US, the brokerage house says while retaining buy on the stock with target price of Rs 850.

11:30 am Technical outlook: Technical analyst, Ashwani Gujaral says it is a very sad market currently. Weak breadth market indicates selling in the entire market.

He feels in case 8750 level breaks on the Nifty, then people who are holding long positions may start cutting their positions. He sees stronger deeper correction. Unable to hold 8800 level means the market is going to fall, he says.

11:23 am Buyback: Public sector NLC India (Neyveli Lignite Corporation) launched its buyback offer for over 15 crore shares worth Rs 1,491 crore.

In the draft letter of offer, the company said: "Cash offer for buyback of not exceeding 15.06 crore fully paid-up equity shares...representing 8.98 percent of the total number of equity shares in the issued, subscribed and paid-up equity share capital of the company...from all the existing shareholders... through the 'tender offer' process."

The buyback will happen "at a price of Rs 99 per equity share payable in cash for an aggregate consideration not exceeding Rs 1,491 crore," the filing said.

The buyback offer size is not exceeding 10 percent of the aggregate of the company's fully paid-up equity share capital and free reserves, as per the audited accounts of the company for the financial year ended March 31, 2016.

11:00 am Market check: The market remained under pressure amid choppy trade in morning, dragged by Tata Motors that lost 8 percent as brokerage houses slashed their target price sharply on the stock after disappointing earnings on domestic business and JLR front.

The 30-share BSE Sensex was down 59.18 points at 28280.13 and the 50-share NSE Nifty fell 15.50 points to 8776.80.

The broader markets also lost ground, with the BSE Midcap and Smallcap indices falling 0.4 percent and 0.6 percent, respectively. More than two shares declined for every share rising on the exchange.

Jindal Steel was the top midcap gainer, up more than 4 percent after better-than-expected earnings in Q3. Consolidated loss of the company narrowed to Rs 407.4 crore during the quarter, from Rs 869.7 crore in corresponding period of last fiscal on strong operational performance. Operating profit margin expanded sharply by 1110 basis points to 23.6 percent.

Sun Pharma cut some losses to 2.7 percent from 3.6 percent in early trade. Earnings missed analysts' expectations.

ICICI Bank, Infosys, HDFC, Hero Motocorp, Adani Ports and Dr Reddy's Labs were down 0.2-1 percent while HDFC Bank, ITC, Reliance Industries and L&T continued to support the market, up over half a percent.

Oil prices dipped over concerns that producer club OPEC would not be able to maintain its high compliance so far with output cuts aimed at reining in a global fuel supply overhang. Brent crude futures were trading at USD 55.61 per barrel, down 0.64 percent from their last close.

Benchmark indices as well as broader markets were moderately under pressure amid consolidation, with the Nifty consistently struggling below 8800 level as investors shifted their focus to states elections from earnings. Assembly elections in five states will end on March 8 and results will be announced on March 11.

The 30-share BSE Sensex was down 47.66 points at 28291.65 and the 50-share NSE Nifty fell 7.70 points to 8784.60. About 1207 shares declined against 848 advancing shares on the BSE.

Market valuations are slightly beyond comfort and with no big macro events lined up, a runaway rally is unlikely, says Mahesh Patil of Birla Sun Life AMC.

He feels it is better to wait-and-watch on investments as earnings recovery is likely to be slow and the implementation of Goods and Services Tax (GST) is round the corner.

Tata Motors retained its top position in selling list, down nearly 8 percent as CLSA downgraded the stock to sell from buy and slashed target price to Rs 405 from Rs 650 after cutting FY18-19 EPS estimates by 25-31 percent after dismal performance in Q3FY17.

Sun Pharma was also down more than 3 percent after earnings missed analysts' expectations. Nomura cut FY17 earnings estimates for the company by 9 percent, FY18 by 5 percent & FY19 by 3 percent. It sees 11 percent revenue growth & 10 percent earnings growth over next 2 years.

Adani Ports gained 1.6 percent. While assigning a buy call on the stock, with a target price of Rs 375, CLSA says strategic asset should deliver 54 percent growth in port EBITDA over FY16-19 and new corporate structure could lower taxes & boost EPS growth.

9:56 am FII View: Michael Hartnett of Bank of America Merrill Lynch says Fund Manager Survey's cash level has dipped in February to 4.9 percent from 5.1 percent, but is still higher than the 10-year average.

"Our Bull & Bear indicator moves up to 6.3 and we remain long stocks & commodities until the 'sell' signal is triggered, it says.

Hartnett further says Fund Manager Survey shows macro optimism surging - 23 percent say 'boom' versus 1 percent one year ago and 18 percent say 'goldilocks' against 6 percent one year ago. Meanwhile 15 percent say 'stagflation' and while 43 percent expect 'secular stagnation', it is down sharply from 88 percent one year ago, he adds.

9:30 am Analysts on Tata Motors: CLSA has downgraded the stock to sell and lowered target price to Rs 405 from Rs 650 after cutting FY18-19 EPS estimates by 25-31 percent after dismal performance in Q3FY17.

Management commentary on JLR margins has weakened significantly, it says, adding hedging losses are likely to continue at high levels for longer.

JPMorgan also reduced its target price on the stock to Rs 570 from Rs 610 after cutting FY17/18 JLR EBIT estimates by 26 percent/17 percent and consolidated earnings estimates by 33 percent/23 percent. It advises buying on dip as margin miss was not as bad as it seems.

9:15 am Market Check
Equity benchmarks continued to consolidate in early trade Wednesday after investors digested third quarter earnings.

The 30-share BSE Sensex was up 35.23 points at 28374.54 and the 50-share NSE Nifty gained 12.50 points at 8804.80.

Adani Ports, ITC, Infosys, Larsen & Toubro, ONGC, Tech Mahindra and Grasim were early gainers while Tata Motors tanked 7.5 percent after CLSA downgraded the stock to sell from buy due to weak earnings.

NTPC, Sun Pharma, Maruti Suzuki, Dr Reddy's Labs and BHEL were other losers.

The Indian rupee has opened flat at 66.92 per dollar against previous close of 66.93.

NS Venkatesh of Lakshmi Vilas Bank says the Janet Yellen testimony shows a higher probability of a rate increase sooner than later and hence will impact both the equity and currency markets.

The USD-INR is expected to trade in a range of 66.78-67.08/dollar today, he feels.

The dollar rose to a three-week peak against a basket of major currencies as investors raised their outlook on a faster pace of us interest rate increases.
 Asian markets traded mostly higher today, tracking US gains following remarks from Federal Reserve Chair Janet Yellen.

Major US stock indexes established record highs on Tuesday, led by bank stocks after Federal Reserve Chair Janet Yellen said it would be unwise to wait too long to raise interest rates.