Market ends flat, even as midcaps outperform & banks dip; RIL up

3:30 pm Closing Bell: The market recovered from the day's lows and closed almost flat. The Nifty regained its 8900-mark. However, the index posted its first weekly loss since January 22. Midcap stocks outperformed.

The Sensex was down 7.34 points at 28832.45, while the Nifty was down 2.20 points at 8897.55. However, the market breadth was still marginally in the negative zone. About 1,389 shares had advanced, 1,442 shares had declined, and 174 shares remained unchanged.

3:18 pm Market Update: Benchmark indices recouped losses in last hour trade, with the Nifty getting back above 8900 level, supported by Infosys and Reliance Industries.

The Sensex was down 3.64 points at 28836.15 and the Nifty gained 0.75 points at 8900.50.

3:08 pm Tata-DoCoMo truce: Tata Sons will split a dispute settlement payment of USD 1.18 billion owed to NTT DoCoMo over the Japanese firm's exit from a telecoms joint venture, leaving it with about two-thirds of the amount to invest in India, a source said.

Both companies are likely to approach India's central bank within 15 days with a plan that will offer to split the payment into two parts, the source, who has direct knowledge of the matter, said.

While Tata Sons will pay the fair value of DoCoMo's 26 percent stake outside India, or roughly USD 390 million according to Reuters calculations, DoCoMo would need to invest the balance of USD 790 million in India, either for expansion or other joint ventures, the source added.

It was not immediately clear how DoCoMo would use the money if the plan were formalised.

2:56 pm Sugar deficit: India's sugar deficit has risen to 18.54 percent in the space of a fortnight from about 15 percent in the middle of February, according to the industry body Indian Sugar Mills Association (ISMA).

"Between October 1, 2016 and February 28, 2017, sugar mills have produced 162.45 lakh tonnes of sugar, as against 199.43 lakh tonnes produced last year in the corresponding period," ISMA said. "As on February 28, 2017, 257 sugar mills are continuing their crushing operations, whereas in 2015-16, 390 mills were in operation on the same date."'

Abinash Verma, Director General of ISMA, said that the yield in Maharashtra and Karnataka had dropped by more 40 percent following a drought in the west and in the south. He said that there will be a review of the numbers on Monday.

Verma said he does not expect production to be below 200 lakh tonnes and that a global surplus is expected next year.

2:35 pm Unions oppose raising EPFO equity investment limit: The Labour Ministry is again facing resistance from the trade unions as it seeks to raise Employees Provident Fund Organisation (EPFO) minimum equity limit to 15 percent, say sources to CNBC-TV18.

In the Central Board of Trustees (CBT) meet, which is likely to happen in the last week of March, the ministry will propose this idea. It also feels introduction of new exchange-traded funds (ETFs) requires wider participation from EPFO.

The trade unions are not on the same page as the ministry and do not want the equity investment limit to be increased. The union has also urged for a safety net to secure their equity investments.

2:25 pm Buzzing stock: Biocon soared over 5 percent intraday on Friday as investors cheered Delhi High Court's verdict on the cancer drug.

The court allowed Biocon to make and sell a cancer drug-Canmab. It also gave a similar nod to Mylan for its cancer drug-Hertraz.

The court also observed there was no restraint on sale of biosimilar drugs, which have approvals from competent authority, according to a report on CNBC-TV18.

Continuing its sluggish trend, the market remained lower in the noon session, but held on to the losses and pushing the indices higher than the day's lows. The Nifty hovered around 8900-mark.

The Sensex was down 41.15 points at 28798.64, while the Nifty was down 14.80 points at 8884.95. The market breadth was on the negative side, with about 1,230 shares having advanced, 1,495 shares having declined, and 163 shares were unchanged.

GAIL

  • Reliance Industries
  • Bharti Infratel
  • Hindalco

Were the top gainers on both the indices, while HDFC, Asian Paints, BPCL and Bosch were a drag on the indices.

Reliance gained following positive brokerage outlook to Jio's prospects going forward. Meanwhile, Hindalco rose on the back fund raising plans through a qualified institutional placement (QIP).

1:50 pm Buzzing: Biocon shares rallied 5 percent after Delhi Court allowed the company and Mylan to make and sell cancer drug.

Biocon named its cancer drug Canmab, which has been sold by Mylan under the name of Hertraz.

1:45 pm El Nino likely?: According to the Australian Bureau of Meteorology (ABM), the likelihood of an El Nino forming in 2017 has risen. The Southern Oscillation Index (SOI) is currently neutral (-2.2 in Feb), but six (out of eight) models surveyed by ABM suggest that El Nino thresholds may be reached by July 2017. It places the probability of El Niņo forming in 2017 at around 50 percent.

This has led to some worries about India's monsoon season, which runs from June to September, as El Nino conditions are typically associated with below-normal rains, Nomura says.

If conditions develop early in the monsoon season just after sowing is completed (around July as the ABM predicts), then the impact on food production will be adverse, it feels. However, if they develop late (end-August), then the impact may not be as negative, it says.

Overall, Nomura says it does appear that the probability of a below-normal monsoon year in 2017 is higher than the probability of an above-normal year.

1:35 pm FPI investment limit ups: Aditya Birla Group Company Grasim Industries has received approval, in its extraordinary general meeting today, for increasing limit for investment in equity share capital of the company by registered foreign portfolio investors including foreign institutional investors.

1:30 pm GAIL deal: State-run gas company GAIL (India) has signed a time-swap deal with Swiss trader Gunvor to sell some of its US liquefied natural gas (LNG), sources said, as the Indian firm tries to ease the burden of its costly foreign LNG supplies.

It is the first time-swap agreement by GAIL, which is trying to juggle its LNG portfolio to cut costs for price-sensitive Indian customers after a sharp fall in Asian spot prices made its US gas unattractive.

Under the agreement, Gunvor will supply 15 cargoes or about 0.8 million tonnes of LNG to GAIL on India's west cost between April and December this year in oil-linked prices on a delivered basis in India, two sources with knowledge of the deal said.

1:20 pm Drug launch: Drug firm Alembic Pharmaceuticals said its partner Breckenridge Pharma has launched desvenlafaxine succinate extended release tablets used in treatment of major depressive disorder.

Alembic Pharma had received approval of its ANDA of desvenlafaxine succinate extended release tablets of strengths 50 mg and 100 mg in June 2015.

These are therapeutically equivalent to Pristiq of Pfizer.

"The ANDA was filed as a Paragraph IV on the first-to file date and will share 180 day exclusivity with other ANDA first fillers," Alembic Pharma said in a regulatory filing.

"The paragraph IV litigation was settled on terms that are confidential," it added.

1:00 pm Market Check
Equity benchmarks extended losses amid consolidation in afternoon trade, with the Sensex falling 100 points, dragged by banking & financials, FMCG, auto and technology stocks. Investors maintained cautious stance ahead of assembly elections results next week.

The 30-share BSE Sensex was down 107.65 points at 28732.14 and the 50-share NSE Nifty declined 35.60 points to 8864.15. About three shares declined for every two shares rising on the BSE.

Bharti Infratel jumped over 5 percent after CLSA has upgraded the stock to buy from outperform with a DCF-derived target price of Rs 356. The brokerage house feels with recent sharp correction in stock, risks related to tenancy impact due to likely Vodafone-Idea merger are overdone now.

Reliance Industries retained its upside, rising 2.66 percent. CLSA has retained its buy call on the stock, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio's FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21.

Hindalco Industries shares gained nearly 4 percent on value buying. FTSE Russell added Hindalco in its largecap index.

Asia markets remained under pressure, following an overnight decline in US equities, as the market priced in increasing chances the Federal Reserve might hike interest rates later this month.

Oil markets rose as the dollar edged away from a multi-week high, but prices are being held in check by unchanged Russian output for February, a sign of its weak compliance on a global deal to cut supplies.

12:44 pm Reliance Jio's grand plan: After garnering over 100 million subscribers in just six months of launch, Reliance Jio plans to overhaul the telecom industry's revenue structure and is banking upon India's mobile data consumption opportunity to drive up revenues in the next five years.

The company expects to corner a 50 percent revenue market share by FY21 and operating margins of over 50 percent. At an analyst meet on Thursday, the company demonstrated that there is a strong demand for data in India.

According to Jio's estimates, about 400 million Indians can pay Rs 500 a month for data services. This would have a commensurate impact on its financials as well, as the company has invested nearly Rs 1.8 lakh crore into its ambitious telecom project.

12:25 pm Experts cheer D-Mart IPO: Market experts are already gung-ho about the Radhakishan Damani-promoted company's IPO. Amnish Aggarwal, Senior VP-Research at Prabhudas Lilladher, likened D-Mart's go-to-market strategy with global retailer Walmart.

Avenue Supermarts owns the D-Mart chain of around 120 retail stores, most of them in Maharashtra and Karnataka. ''D-Mart has been trying to do what Walmart did in the US - enter a territory, saturate it and achieve profitability,'' he told CNBC-TV18.

Overall, the dynamics on which the business model of D-Mart is built seem to be very positive and improving sales mix and financials bode well for the company, he said. Avenue Supermarts RHP (red herring prospectus) for the IPO makes a classic case of study for business schools, said market expert SP Tulsian of sptulsian.com, adding, the price band makes Avenue Supermarts IPO "very attractive".

Subdued trade on the market continued ahead of key event of assembly election results next week. Profit booking too dragged the indices, but the fall was limited as compared to the previous session's correction. The Nifty was still shy of 8900.

The Sensex was down 93.18 points at 28746.61, while the Nifty was down 29.25 points at 8870.50. The market breadth indicated strain with about 1,098 shares having advanced, 1,397 shares declined. Meanwhile, 138 shares were unchanged.

Reliance and Bharti Infratel rallied on the back of positive feedback from brokerages, while Asian Paints and HDFC were the top losers.

India's dominant services industry returned to growth in February for the first time in four months as demand slowly recovers after the government's cash crackdown late last year, a private business survey showed on Friday. The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction.

Shares of Reliance Industries clocked its fresh 52-week high, driven by positive observations by analysts about the company's prospects as well as the stock. The scrip rose over 4 percent intraday. Analysts are upbeat on the stock for a variety of reasons ranging from high-average revenue per user (ARPU) users target to cut in glitches.

A2Z Infra Engineering gained 6.7 percent intraday as it has been awarded a contract worth USD 70,66,613.41. The contract has been awarded by Grid Solar and Energy Efficiency Project, Nepal Electricity Authority for design, supply, delivery, installation, testing and commissioning of 33/11 KV substations and 33 KV lines, for the contract price aggregating to USD 7,066,613.41.

11:42 am FII View: Laurence Balanco of CLSA says most global markets are at a new 52-week highs and any short-term pullback in these markets are likely to be followed by further gains.

The Nifty has traced out an impressive long-term uptrend with the index set to extend its trend as price action tests overhead resistance provided by the March/September 2015 all-time highs at the 8,994-9,191 area, he adds.

A break above this resistance zone would extend the bullish uptrend channel which has been unfolding off the December 2011 lows and would open the door for a move up to the following target levels seen between 10,350 and 12,000, Balanco feels.

At the sector level, the NSE Nifty Bank index looks set to lead the Nifty's breakout, he says.

11:30 am CLSA on Bharti Infratel: CLSA says risks for Bharti Infratel are overdone and rising tower merger & acquisition (M&A) is a positive catalyst for it. The stock is now pricing in a pessimistic scenario on growth, it adds.

Hence, the brokerage house has upgraded its recommendation to buy from outperform.

11:20 am Services PMI: India's dominant services industry returned to growth in February for the first time in four months as demand slowly recovers after the government's cash crackdown late last year, a private business survey showed on Friday.

The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction.

The index slumped to a near-three year low in November after Prime Minister Narendra Modi's surprise decision to outlaw old 500 and 1,000 rupee banknotes to crack down on "black money" and tax evasion.

The decision sucked 86 percent of cash out of circulation, and everyone from street hawkers to big consumer goods firms suffered a slump in sales.

A sister survey on Wednesday showed manufacturing activity also expanded further in February, though at a lackluster pace.

11:00 am Market Check
Benchmark indices continued to trade lower in morning as investors tread with caution ahead of assembly elections results due next week. Banking & financials, FMCG and technology stocks weighed but Reliance restricted losses.

The 30-share BSE Sensex was down 89.23 points at 28750.56 and the 50-share NSE Nifty fell 31.50 points to 8868.25. The market breadth was negative too, as about 1224 shares declined against 1069 advancing shares on the BSE.

Equities are poised for a breather following a breathtaking rally recently even as a sharp decline is unlikely, Nitin Jain of Kotak UK said.

Infosys slipped nearly 1 percent after Goldman Sachs has initiated its coverage on the stock with a sell call and target of Rs 829 as application services is shrinking led by swift contraction in BFSI.

Reliance Industries maintained its run up, rising 2.7 percent to trade near 52-week high after analysts meet. CLSA has retained its buy call on the stock, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio's FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21.

Index heavyweights HDFC and ITC fell 1.7 percent each followed by HDFC Bank, L&T, ICICI Bank and TCS.

11:42 am FII View: Laurence Balanco of CLSA says most global markets are at a new 52-week highs and any short-term pullback in these markets are likely to be followed by further gains.

The Nifty has traced out an impressive long-term uptrend with the index set to extend its trend as price action tests overhead resistance provided by the March/September 2015 all-time highs at the 8,994-9,191 area, he adds.

A break above this resistance zone would extend the bullish uptrend channel which has been unfolding off the December 2011 lows and would open the door for a move up to the following target levels seen between 10,350 and 12,000, Balanco feels.

At the sector level, the NSE Nifty Bank index looks set to lead the Nifty's breakout, he says.

11:30 am CLSA on Bharti Infratel: CLSA says risks for Bharti Infratel are overdone and rising tower merger & acquisition (M&A) is a positive catalyst for it. The stock is now pricing in a pessimistic scenario on growth, it adds.

Hence, the brokerage house has upgraded its recommendation to buy from outperform.

11:20 am Services PMI: India's dominant services industry returned to growth in February for the first time in four months as demand slowly recovers after the government's cash crackdown late last year, a private business survey showed on Friday.

The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 50.3 in February from 48.7 in January, marginally above the 50-mark that separates growth from contraction.

The index slumped to a near-three year low in November after Prime Minister Narendra Modi's surprise decision to outlaw old 500 and 1,000 rupee banknotes to crack down on "black money" and tax evasion.

The decision sucked 86 percent of cash out of circulation, and everyone from street hawkers to big consumer goods firms suffered a slump in sales.

A sister survey on Wednesday showed manufacturing activity also expanded further in February, though at a lackluster pace.

11:00 am Market Check
Benchmark indices continued to trade lower in morning as investors tread with caution ahead of assembly elections results due next week. Banking & financials, FMCG and technology stocks weighed but Reliance restricted losses.

The 30-share BSE Sensex was down 89.23 points at 28750.56 and the 50-share NSE Nifty fell 31.50 points to 8868.25. The market breadth was negative too, as about 1224 shares declined against 1069 advancing shares on the BSE.

Equities are poised for a breather following a breathtaking rally recently even as a sharp decline is unlikely, Nitin Jain of Kotak UK said.

Infosys slipped nearly 1 percent after Goldman Sachs has initiated its coverage on the stock with a sell call and target of Rs 829 as application services is shrinking led by swift contraction in BFSI.

Reliance Industries maintained its run up, rising 2.7 percent to trade near 52-week high after analysts meet. CLSA has retained its buy call on the stock, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio's FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21.

Index heavyweights HDFC and ITC fell 1.7 percent each followed by HDFC Bank, L&T, ICICI Bank and TCS.

9:55 am CLSA on Reliance: CLSA has retained its buy call on Reliance Industries, with increased target price at Rs 1,500 (from Rs 1,350) after the company guided on Jio's FY21 EBITDA of over USD 11 billion and expects 50 percent rise in industry revenue to USD 45 billion by FY21.
 
According to management, Jio's 4G capacity is nearly 5x of the remaining industry. Jio expects to be able to handle 4 billion GB of data per month by end of 2017.

CLSA says Jio is hopeful of fully sorting out interconnection issues in this month and Jio's capacity may warrant a higher EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) multiple of 7.5x.

The brokerage house has raised its multiple for refining to 6.5x EV/EBITDA and retail to 1x EV/sales.

Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 that publishes Moneycontrol.com.

9:35 am Goldman on Infosys: Goldman Sachs has initiated its coverage on Infosys with a sell call and target of Rs 829 as application services is shrinking led by swift contraction in BFSI.

It says the company lagged peers in terms of penetration of new digital areas. The company is more exposed to H-1B/L1 visa changes, it feels.

According to Goldman, frequent management changes may make it harder to achieve stable growth and growth model is not well-suited to its DNA.

9:25 am Buzzing: Shares of A2Z Infra Engineering gained 6.7 percent intraday as it has been awarded a contract worth USD 70,66,613.41.

The contract has been awarded by Grid Solar and Energy Efficiency Project, Nepal Electricity Authority for design, supply, delivery, installation, testing and commissioning of 33/11 KV substations and 33 KV lines, for the contract price aggregating to USD 7,066,613.41.

9:15 am Market Check
Equity benchmarks continued downtrend amid consolidation as investors awaited assembly elections results due next week, tracking weak global cues. The 30-share BSE Sensex was down 63.46 points at 28776.33 and the 50-share NSE Nifty fell 20.05 points to 8879.70.

Infosys, ITC, Asian Paints, Tata Steel, TCS, Kotak Mahindra Bank, Bosch and Bank of Baroda were under pressure while Reliance Industries, Tata Motors, Bharti Airtel, Axis Bank, Dr Reddy's Labs, Hindalco, Bharti Infratel, Grasim and UltraTech Cement were gainers.

The Indian rupee slipped in the early trade on Friday. It has opened lower by 17 paise at 66.87 per dollar versus previous close of 66.70.

Ashutosh Raina of HDFC Bank says the increasing probability of Federal Reserve rate hike in March has resulted in dollar index soaring above the 102 level.

However, the USD-INR pair continues to defy the overall dollar strength, but the gains have been capped by strong intervention, he adds.

He expects the pair to trade in a 66.70-67 dollar range today.

The dollar gained to seven-week highs against a basket of currencies, after hawkish comments by a Federal Reserve official encouraged investors to expect a near-term interest rate hike.

Asia markets traded lower today, following an overnight decline in US equities but the Dow Jones industrial average still closed a touch above the 21,000 level.