Sensex, Nifty end flat post rangebound move; PSU banks underperform

27 Oct 2017

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3:30 pm Market at Close: Some selling pressure in the final hour of trade took the indices lower and made them close flat on the first day of November series.

The Sensex closed down 1.32 points at 33145.81, while the Nifty ended lower by 23.50 points at 10320.30. The market breadth was narrow as 1,312 shares advanced against a decline of 1,293 shares, while 135 shares were unchanged.

Midcaps ended flat, but the major drags were banks, OMCs and metals.

Adani Ports, Sun Pharma and Bajaj Finance gained the most on both indices, while Bharti Airtel, SBI and Yes Bank were the top losers.

3:15 pm Market Check: Benchmark indices gave up most of their gains and traded almost flat in the closing minutes of trade.

The Sensex was up 8.49 points at 33155.62, while the Nifty was down 22.80 points at 10321.00. The market breadth was narrow as 1336 shares advanced against a decline of 1255 shares, while 134 shares were unchanged.

Adani Ports, Sun Pharma and Bajaj Finance gained the most on both indices, while Bharti Airtel, SBI and Yes Bank were the top losers.

2:45 pm Market Check: Rangebound movement on the market continued through the afternoon session with the Sensex hovering above 33,200 mark.

The Sensex was up 81.18 points at 33228.31, while the Nifty was down 0.10 points at 10343.70. The market breadth was narrow as 1400 shares advanced against a decline of 1167 shares, while 134 shares were unchanged.

Sun Pharma, Adani Ports and Bajaj Finance gained the most on both indices, while Bharti Airtel, SBI and Yes Bank fell the most.

2:25 pm IOC results: State-run oil marketing major, Indian Oil, reported a fall of 18.7 percent in its net profit for September quarter at Rs 3,696 crore against Rs 4,548 crore during the previous quarter.

The number came in much lower than analysts' expectations, according to a CNBC-TV18 poll, of Rs 6,023 crore.

The revenue came in 13.7 percent lower at Rs 1.1 lakh crore against Rs 1.28 lakh crore quarter on quarter.

On an operating level, the standalone EBITDA dipped 7.8 percent of Rs 7,373 crore against Rs 8,000 crore quarter on quarter, while the operating margin came in at 8.1 percent against 7.6 percent.

2:00 pm Maruti Q2: Automobile major Maruti Suzuki on Friday reported 3.4 percent increase in its September quarter net profit at Rs 2,484.3 crore against R 2,401.5 crore posted during the same period last year.

The company's revenues rose 21.8 percent at Rs 21,768 crore against Rs 17,869 crore year on year.

On an operating level, the earnings before interest, taxes, depreciation and amortisation rose 21.1 percent at Rs 3,677 crore against Rs 3,036 crore year on year. The operating margin came in at 16.9 percent against 17 percent in the September quarter in 2016.

1.45 pm Result update: Shares of PVR fell nearly 6 percent intraday Friday on the back of poor Q2 numbers. The company's net profit was down 15.1 percent at Rs 24.7 crore against Rs 29.1 crore, Y-o-Y.

Revenue was up 2.1 percent at Rs 555.4 crore against Rs 543.8 crore.

EBITDA rose 12.6 percent at Rs 90.5 crore and EBITDA margin was up at 16.3 percent.

1:33 pm Management interview: Biocon on Thursday posted a 53 percent decline in net profit to Rs 68.8 crore in the second quarter ended September 30 on account of lower off-take of APIs, production disruption due to plant modifications and tender delays.

"We are very optimistic about our own entry into the generics market with our Rosuvastatin and that will pick up in terms of sales," Kiran Mazumdar Shaw, Chairperson & MD said in an interview to CNBC-TV18.

"We are also looking at certain tenders in emerging markets, certain delayed regulatory approvals in certain markets, which we hope will come into play for the rest of this year."

1:20 pm Buzzing: Car maker Maruti Suzuki India share price touched a fresh record high of Rs 8,209, rising 1.6 percent intraday and cigarette major ITC rallied nearly 3 percent ahead of earnings for the quarter ended September 2017.

1:15 pm Earnings Estimates: Automobile major Maruti Suzuki is likely to post lower profit at Rs 2,217.5 crore in July-September quarter against Rs 2,398 crore in same quarter last fiscal, a CNBC-TV18 poll has revealed. Higher tax outgo and lower other income are likely to impact profits.

The company's net sales though is likely to be up 23.4 percent at Rs 22,014.1 crore against Rs 17,842.8 crore.

On an operating level, the EBITDA is likely to be higher by 6 percent at Rs 3,216 crore against Rs 3,037 crore, while the margins are seen at 14.6 percent against 17 percent.

Among the key things to watch are operating margins, which could be impacted by lower gross margins due to rise in commodity prices. In fact, the ramp ups of Gujarat plans could also impact the margins, along with higher offers due to GST and festive season.

1:04 pm Market Check: Equity benchmarks continued to consolidate in afternoon after hitting record highs. Investors looked for more earnings for further cues.

The 30-share BSE Sensex was up 84.32 points at 33,231.45 and the 50-share NSE Nifty fell 0.60 points to 10,343.20.

About 1,390 shares advanced against 1,065 declining shares on the BSE.

ITC rallied 2.5 percent, ICICI Bank gained 0.7 percent and Maruti Suzuki was up 1.5 percent ahead of earnings later today.

12:56 pm Forensic audit: Markets regulator Sebi has ordered forensic audit of Pacific Finstock Ltd (PFL) after finding prima facie evidence of misrepresentation of financials by it.

PFL is among the firms against which Sebi initiated action on August 7 by ordering trading restrictions, following receipt of a list of 331 suspected shell companies from the government.

In an order dated October 26, the regulator has ordered appointment of independent forensic auditor to verify any misuse of the books of accounts or funds as well as any misrepresentation including of financials and business of the firm.

12:46 pm Green Nod: Private sector lender HDFC Bank has been given green signal for setting up of a call centre cum residential training centre in Mohali district, Punjab at a cost of Rs 194 crore, a government official said today.

The proposed commercial project, to come up in a build up area of 38,406.27 square meter in SAS Nagar in Mohali, is expected to provide direct and indirect jobs in the area.

"The Union Environment Ministry has given the environment clearance to HDFC Bank's proposal to set up a call centre and residential training centre in Mohali," the official said.

12:36 pm Europe Trade: European stocks opened higher, supported by upbeat earnings from US tech giants and the prospect of continuing stimulus in Europe.

The pan-European Stoxx 600 opened up around 0.33 percent shortly after the opening bell, with almost all sectors and major bourses in positive territory.

12:26 pm Rupee to get boost from govt's PSU bank recap: The rupee is likely to get a boost from the government's PSU bank recapitalisation
programme which is expected to support private capex recovery and increase foreign investor interest in domestic equity markets, says a report.

According to the global financial services major, "stronger growth and INR correlations with equities are supportive of further currency gains".

Besides reviving credit growth after a period of weakness post demonetisation, the recap plan will help banks wind down their Non Performing Assets (NPAs) or bad loans and take up fresh credit, which should help boost a private capex recovery in India, the report noted.

According to Morgan Stanley economists, the announcement is not expected to impact fiscal deficit position of the country and inflation number, but is likely to have a positive impact on the economic growth parameter.

12:16 pm Buzzing: Biocon share price fell more than 2 percent as consolidated net profit in July-September quarter declined 53.1 percent year-on-year to Rs 68.8 crore but revenue increased 2.4 percent to Rs 968.6 crore YoY.

EBITDA (earnings before interest, tax, depreciation and amortisation) was down 21.3 percent at Rs 182.3 crore and margin contracted to 18.82 percent versus 24.5 percent YoY.

12:05 pm Earnings Estimates: Cigarette-hotel-to-FMCG major ITC will announce its July-September quarter earnings later today. It is an important quarter to watch out for after the GST implementation with effect from July 1, especially for its cigarette division.

The GST Committee had set the tax rate lower for cigarette business but then revised higher to pre-GST levels. Hence, the stock had seen roller coaster ride, hitting a life high of Rs 353 on July 3 and then falling 13 percent on July 18. It fell 16.2 percent during the quarter.

Analysts expect cigarette volumes to decline 4-5 percent (against 1 percent growth in Q1FY18 and 4 percent in Q2FY17) and realisation growth at around 11-12 percent for the quarter ended September 2017.

In last nine months ended September 2017, ITC increased the price of cigarette portfolio by around 14 percent.

Profit after tax is expected to increase 6.1 percent year-on-year to Rs 2,652 crore and revenue may rise 6.7 percent to Rs 14,525 crore, according to average of estimates of analysts polled by CNBC-TV18.

12:00 pm Market Check: Equity benchmarks have seen consolidation after hitting record highs in early trade.

The 30-share BSE Sensex was up 88.15 points at 33,235.28 and the 50-share NSE Nifty rose 3 points to 10,346.80.

The recovery in Nifty was largely led by ICICI Bank that bounced back ahead of earnings later today.

11:55 am Management interview: L&T Finance Holdings posted a good set of earnings in the second quarter ended September 30,2017 on back of robust growth in disbursements, especially in the rural book along with scaling down of the de-focussed businesses.

New microfinance centres opened in Q4 of FY17 and Q1 of FY18 are now coming into play and are contributing to disbursements, he said, adding that the overall productivity of all people on ground is also going up. These two things led to growth in microfinance, said Dinanath Dubhashi, MD & CEO in an interview to CNBC-TV18.

Renewable energy and road re-financing segments are also doing pretty well, he added.

He is confident of healthy profit growth and expect FY18 loan growth to be at 25 percent.

11:40 am Buzzing: V-Guard Industries share price rallied 4.5 percent after Q2 earnings.

Edelweiss has maintained its hold rating on the stock due to rich valuations, but hiked price target to Rs 175 from Rs 163 per share as Q2 performance was robust, led by strong re-stocking, primarily in UPS, stabilisers & kitchen appliances.

"We are optimistic on growth path and sustained profitability," the research house said.

Management of the company is confident of 15 percent compound annual growth rate on revenue over FY17-19.

Edelweiss expects higher revenue via SKU ramp up with expanding non-South sales and restocking.

11:28 am Selling in banks: The Nifty Bank index extended losses, falling 176 points due to major correction in Yes Bank (down 8 percent), Punjab National Bank (down 5.6 percent), Bank of Baroda (4.3 percent), Canara Bank (2.3 percent), SBI (2 percent) and ICICI Bank (1.5 percent).

11:20 am Market Check: Equity benchmarks were mixed in late morning trade, with the Nifty falling after hitting a record high on first day of November series.

The 30-share BSE Sensex was up 27.56 points at 33174.69 while the 50-share NSE Nifty fell 16.30 points to 10,327.50.

The market breadth remained positive as about 1,403 shares advanced against 888 declining shares on the BSE.

Bharti Airtel and Bharti Infratel plunged 4-6 percent.

11:10 am IPO subscription: Reliance Nippon Life Asset Management's Rs 1,542-crore initial public offering has been subscribed 8.4 times, as per data available on NSE.

The reserved category of qualified institutional buyers has oversubscribed 10.1 times, non-institutional investors 19.4 times and retail 2.7 times.

10:58 am Bid for diamond project: Indian resources conglomerates Adani and Vedanta are considering bidding for a USD 9 billion diamond project in the country that was abandoned by global miner Rio Tinto this year, according to multiple sources with knowledge of the matter.

The central state of Madhya Pradesh was likely to invite bids in the first week of November to explore the deposit, which is estimated to hold around 32 million carats of diamonds, a senior state government official said.

''We're advertising only for that area in which (Rio Tinto) have prospected and established availability of diamonds,'' Manohar Lal Dubey, Madhya Pradesh's top mineral resources official, told Reuters by phone.

An auction would be held around 40 days after the notice inviting bids was published, he said.

10:40 am Buzzing: Shares of Crompton Greaves Consumer Electrical rose 6 percent in morning on the back of strong Q2 (July-September) numbers.

The company's Q2 net profit was up 23.3 percent at Rs 70.8 crore versus Rs 57.4 crore, in the same quarter last fiscal.

Revenue of the company was up 6.6 percent at Rs 959.7 crore versus Rs 899.9 crore. The operating profit (EBITDA) was down 18.1 percent at Rs 84.9 crore and EBITDA margin slipped 300 bps at 8.84 percent.

Credit Suisse has maintained outperform rating on stock with an increase in price target to Rs 290 from Rs 270.

10:30 am Oil Update: Oil prices inched higher, with Brent crude approaching USD 60 a barrel amid tightening market expectations, buoyed by comments from Saudi Arabia's Crown Prince backing the extension of OPEC-led output cuts.

International benchmark Brent crude futures were up 0.17 percent, at USD 59.40 a barrel.

Brent is now a third above 2017 lows touched in June and at levels last seen in mid-2015.

10:20 am Market Outlook: At a time when the market is set in the bull zone, several voices have spoken about the expensive valuations of the indices or stocks.

But HDFC Securities' Dipen Sheth wants to look at the bigger picture. ''Since the new government took over, many structural changes have been unleashed,'' Sheth, Head of Institutional Research at HDFC Securities told CNBC-TV18 in an interview.

While now may not be the right time to go and buy, he is hopeful of a churn in the economy and within the sectors too, there could be firms that could perform well.

In fact, the current situation where valuations are costly, 'Modi dream' coming under attack on the political front, among others, is all 'bad weather and climate change', he said. It means that the current situation could just be short-term noise and not long-term impact as structurally the country will perform a lot better.

10:10 am Market Check: Equity benchmarks remained higher in morning, with the Nifty hitting a record high of 10,366.15 on first day of November series.

The 30-share BSE Sensex also touched a fresh all-time high of 33,270.62 in opening today, trading 69.98 points higher at 33,217.11 while the 50-share NSE Nifty rose 5.20 points to 10,349.

The market breadth remained positive as about 1,272 shares advanced against 717 declining shares on the BSE.

10:05 am ECB holds rates: The European Central Bank took a major step towards weaning the euro zone off loose money but promised years of stimulus and even left the door open to backtracking.

It said it would cut its bond purchases in half from January but also extend the buying programme until the end of next September.

ECB President Mario Draghi said the euro zone economy was recovering but still needed support.

"Domestic price pressures are still muted overall and the economic outlook and the path of inflation remain conditional on continued support from monetary policy," he told a news conference. "Therefore, an ample degree of monetary stimulus remains necessary."

9:59 am Rupee trade: The rupee dropped sharply by 20 to 65.03 per dollar in early trade today amid gains in the US currency in global markets.

Forex dealers said the dollar strengthened against major global currencies which hit the rupee sentiment.

The euro dropped to three-month lows after the European Central Bank extended its bond purchases and reduced the chances that it would hike interest rates in 2018.

Yesterday, the rupee had gained 7 paise to end at over one-week high of 64.82 on sustained selling of the American currency by banks and exporters.

9:50 am Buzzing:Global brokerages turned cautions on Yes Bank as they maintain either sell, hold or neutral rating, a day after the private sector lender reported a divergence in gross bad loans of Rs 6,355 crore for FY17.

Reacting to the results, shares of Yes Bank plunged nearly 10 percent in opening trade. It hit a low of Rs 298.55. At 09:20 am, Yes Bank was trading 8 percent lower at Rs 304.

Yes Bank reported a 25 percent jump in net profit for the second quarter ended September 2017. It increased to Rs 1,002 crore from Rs 802 crore a year earlier, but the bank had to set aside Rs 447 crore as provisions which were one-and-a-half times higher than the Rs 162 crore reported a year earlier, said a report.

9:40 am Earnings Estimates: After bad asset quality performance of Axis Bank and Yes Bank, the Street will closely watch non-performing assets and slippages of ICICI Bank for the quarter ended September 2017.

The private sector lender's second quarter (July-September) profit is expected to decline 18.6 percent year-on-year to Rs 2,525.1 crore but may increase 23 percent sequentially, according to average of estimates of analysts polled by CNBC-TV18.

Net interest income during the quarter is seen rising 8.5 percent to Rs 5,697.4 crore, compared with Rs 5,253.3 crore in same quarter last fiscal.

9:30 am NDTV in focus: The Income Tax Department has attached the entire 29.12 percent shareholding of RRPR Holding Pvt Ltd in NDTV, the media house said in a regulatory filing.

RRPR is the largest promoter group company in New Delhi Television Ltd, the company that operates news channels NDTV 24x7, NDTV India and NDTV Profit.

"RRPR Holding Pvt Ltd, one the promoters of the company, has informed the company today that it has received an order dated October 25, 2017, issued by Deputy Commissioner of Income Tax under section 281B of the Income Tax Act, 1961, provisionally attaching the entire shareholding held by RRPR in the company comprising 1.88 crore equity shares," NDTV said in a filing to the stock exchanges.

It, however, did not give details of the dispute over which the I-T Department has attached the shares.

9:25 am IPO: HDFC Standard Life Insurance Company, a subsidiary of country's largest mortgage lender HDFC, fixed price band for its Rs 8,695-crore initial public offer (IPO).

"In this connection, we wish to inform you that the price band for the IPO has been fixed at Rs 275 to Rs 290 per equity share of Rs 10 each of HDFC Life," HDFC said in a regulatory filing on the stock exchanges.

The minimum bid lot for the IPO has been fixed at 50 equity shares and applications may be made in multiples of 50 equity shares, it said.

The company proposes to issue 29,98,27,818 shares. The issue opens on November 7 and will close on November 9.

9:20 am Buzzing: Shares of Cipla added 2.5 percent in morning on USFDA approval for Sevelamer Carbonate tablets.

The company's subsidiary InvaGen Pharmaceuticals Inc. has received final approval for its abbreviated new drug application (ANDA) for Sevelamer Carbonate Tablets, 800 mg, from the United States Food and Drug Administration (USFDA) to market a generic version of Genzyme's Renvela Tablets, 800 mg.

Sevelamer Carbonate Tablets, 800 mg is an AB-rated generic equivalent to the reference listed drug, Renvela tablets, 800 mg of Genzyme Corporation.

9:15 am Market Check: The market started off November series on a positive note as equity benchmarks hit fresh record highs but Nifty Bank fell over half a percent due to weak earnings from Yes Bank.

The 30-share BSE Sensex was up 83.71 points at 33,230.84 and the 50-share NSE Nifty rose 15.10 points or to 10,358.90.

Yes Bank plunged 10 percent post earnings while ICICI Bank was down 2.5 percent ahead of earnings later today.

ITC, Maruti and IOC gained ahead of earnings.

Cipla, BPCL, Sun Pharma, Kotak Mahindra Bank, Bajaj Finance, L&T, Bajaj Auto, Aurobindo, Infosys and Tata Motors gained 1-2 percent.

Nifty Midcap index was up 0.3 percent and Smallcap gained 0.6 percent as about 897 shares advanced against 337 declining shares on the NSE.

Union Bank, Syndicate Bank, Allahabad Bank and DHFL were down a percent each.

Can Fin Homes, LIC Housing Finance, Mastek, Jubilant Foodworks and Polaris Consulting rallied 1-8 percent.

After earnings, Biocon fell 5.5 percent while United Spirits was up 8.5 percent and Crompton Consumer rallied 5 percent.

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