Sensex drops 360 points, Nifty closes below 10,400; PSU Bank down 4%
07 November 2017
3:30 pm Market Closing: Benchmark indices as well as broader markets closed sharply lower on Tuesday as rising crude oil prices may impact fiscal deficit and raw material cost of companies which are dependent upon oil.
The 30-share BSE Sensex was down 360.43 points or 1.07 percent at 33,370.76 and the 50-share NSE Nifty fell 101.60 points or 0.97 percent to 10,350.20.
About 1,869 shares declined against 877 advancing shares on the BSE.
3:22 pm Merger: State-run MMTC share price rallied 17 percent intraday and State Trading Corporation of India gained 10 percent on hope of merger. Both stocks surged 19 percent in previous session.
According to CNBC-TV18 report, the Cabinet will take final call on commerce ministry proposal for STC-MMTC merger.
If it happens, then it could take 6-8 months for STC-MMTC merger process to be completed.
3:15 pm Buzzing: FMCG firm Jyothy Laboratories share price fell 14 percent despite the company reported a 46.93 percent increase in its consolidated net profit at Rs 45.71 crore for the September quarter YoY.
Total income during the quarter under review stood at Rs 433.83 crore as against Rs 435.01 crore in the year-ago period.
Revenue from personal care segment grew 46.7 percent at Rs 50.7 crore as against Rs 34.6 crore in the year-ago period, the company said.
On the outlook, Ramachandran said: "We hope that increased ad spend and concentration on marketing activities will help us to achieve a better share of voice ensuring further growth across categories."
3:05 pm Expansion: Suzuki Motorcycle India Pvt Ltd (SMIPL), the wholly-owned two-wheeler arm of Suzuki Motor Corp, is considering setting up a new plant in the country that could entail a minimum investment of Rs 500 crore, said a top company official.
SMIPL, which today launched its new 155cc cruiser model Intruder priced at Rs 98,340 (ex-showroom Delhi), will also exit from commuter segment motorcycle to focus on premium bikes and scooters as it chases one million unit sales annually by 2020 in India.
"Our target is to sell one million units by 2020. Up to one million we can use the existing plant (at Gurugram) but beyond that we have to consider a new plant. We expect to take a decision on it by next year," SMIPL Managing Director Satoshi Uchida told PTI.
2:58 pm Buzzing: VIP Industries gained 8 percent after its consolidated net profit in Q2 grew by 27.4 percent year-on-year to Rs 23.83 crore and revenue increased 10.4 percent to Rs 309.2 crore.
Operating profit jumped 38.2 percent to Rs 36.63 crore and margin surged 238 basis points to 11.85 percent in September quarter YoY.
2:44 pm New telecom policy: The telecom department (DoT) looks to finalise the new telecom policy by February and would release its draft by December-end for public comments, Union minister Manoj Sinha said today.
"We are trying to bring new telecom policy by February. For this the working group has started the process. We expect to finalise draft by end of December and place it for public comments," the Communications Minister told reporters.
He said that the government expects to complete the first phase of Bharat net project to connect 1 lakh village panchayats with high-speed broadband by the end of November.
2:35 pm Market Check: Benchmark indices fell further, with the Sensex declining 356.79 points or 1.06 percent to 33,374.40.
The Nifty tested 10,350 level also, falling 100.50 points or 0.96 percent to 10,351.30.
About three shares declined for every share rising on the BSE.
The rupee also fell sharply by 26 paise to trade at 64.93 against the US dollar on correction in equity market and rising crude oil prices.
2:28 pm Earnings: Healthcare firm Cipla has reported better-than-expected consolidated profit growth of 17.7 percent for the quarter ended September 2017, year-on-year, driven by strong operational performance and other income.
Consolidated profit during the quarter increased to Rs 435 crore from Rs 370 crore in year-ago, the company said.
Revenue from operations rose 8.8 percent to Rs 4,082 crore in July-September quarter, compared with Rs 3,751 crore in corresponding period, it added.
EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 18.2 percent year-on-year to Rs 804 crore and margin expanded 160 basis points to 19.7 percent in quarter ended September 2017.
2:15 pm Market Check: Benchmark indices fell sharply in afternoon, dragged by banking & financials, oil & gas, metals and pharma stocks. However, technology stocks continued to support the market.
The 30-share BSE Sensex was down 316.77 points or 0.94 percent at 33,414.42 and the 50-share NSE Nifty fell 91.80 points to 10,360.
Nifty Pharma, Metal and PSU Bank indices declined 2-5 percent while IT index gained 2 percent.
2:08 pm Auto sales: Tata Motors-owned Jaguar Land Rover (JLR) today reported 0.2 percent increase in retail sales at 46,418 units in October compared to the same month last year.
Jaguar retail sales were down 14.3 percent at 12,336 vehicles in October compared to October 2016, primarily reflecting lower sales of the Jaguar XE.
The company said the results reflect growing sales of the Range Rover Velar and the new Discovery model.
Retail sales in October were up year-on-year in markets such as China. H
owever, markets such as the UK, North America and Europe witnessed decline in sales, JLR said in a statement.
1:58 pm Results: Luggage maker VIP Industries today reported a 27.43 percent increase in consolidated net profit at Rs 23.83 crore for the July-September quarter.
The company had posted a net profit of Rs 18.70 crore during the same period of previous fiscal, VIP Industries said in a regulatory filing.
Total income during the quarter under review stood at Rs 311.95 crore as against Rs 288.10 crore in the year ago period.
1:48 pm Earnings: State-owned power equipment maker Bharat Heavy Electricals's September quarter earnings missed analyst expectations on Tuesday as profit increased 5.9 percent year-on-year despite operational loss, aided by other income.
Profit during quarter increased to Rs 115.4 crore, compared with Rs 109 crore in year-ago. On sequential basis, bottomline reported a 42.5 percent growth.
Revenue from operations in Q2 fell 5.8 percent year-on-year to Rs 6,168.36 crore, but grew by 15.2 percent from previous quarter, the company said.
At operational level (EBITDA - earnings before interest, tax, depreciation and amortisation), BHEL has reported a loss of Rs 95 crore in Q2FY18 against income of Rs 155 crore in year-ago and loss of Rs 88 crore in previous quarter.
1:38 pm Market Check: Equity benchmarks extended losses in afternoon trade, with the Nifty testing 10,400 level and the Sensex falling around 200 points.
Lupin was the biggest loser among Nifty 50 stocks, falling 17 percent after the US FDA has issued combined warning letter to Goa & Pithampur Unit-II sites. Nifty Pharma index was down 3.7 percent.
IT index continued to outperform, rising 2.5 percent led by HCL Technologies (up 3.7 percent), Tech Mahindra (3.3 percent), Infosys (2.7 percent) and TCS (2.2 percent).
The 30-share BSE Sensex was down 185.72 points at 33,545.47 and the 50-share NSE Nifty fell 51.50 points to 10,400.30, weighed by Reliance Industries, HDFC and ICICI Bank.
About two shares declined for every share rising on the BSE.
1:36 pm List of items under GST to be cut? Finance Minister Arun Jaitley today hinted at pruning the list of items in the highest GST tax bracket of 28 per cent after revenue in the new regime equalise collections previously.
Under the Goods and Services Tax (GST) regime implemented from July, over 1,200 products and services have been fitted into one of the 5, 12, 18 and 28 per cent tax slabs based on the principle of keeping the total tax incidence at almost the same level as previously as well as keeping revenue collections neutral.
Jaitley said some of the items should never have been in the 28 per cent slab and the GST Council in the last 3-4 meetings has slashed rates on over 100 items, thereby bringing them down either from 28 per cent to 18 per cent or from 18 per cent to 12 per cent.
1:16 pm Buzzing stock: Shares of Lupin touched 52-week low of Rs 890.10, slipping 15 percent intraday as company has received warning letter from USFDA.
The company's formulation manufacturing facilities at Goa and Indore (Pithampur Unit II) has received warning letter from USFDA.
The company earlier had received 3 Form 483 observations in Goa on April 7, 2017 and 6 Form 483 observations in Pithampur (Unit II) on May 19, 2017.
12:55 pm Buzzing: Shares of aviation companies, Jet Airways, SpiceJet, and InterGlobe Aviation, fell 3-5 percent on the back of surge in crude oil prices on a global scale.
Oil prices on Monday hit their highest since July 2015 as Saudi Arabia's crown prince cemented his power over the weekend through an anti-corruption crackdown, while markets continued to tighten.
A surge in these crude prices is generally seen as increase in fuel costs for aviation companies.
Brent crude futures were trading flat at USD 64.23 per barrel, down 0.06 percent.
Saudi Crown Prince Mohammed bin Salman tightened his grip with the arrest of royals, ministers and investors including prominent billionaire Alwaleed bin Talal and the powerful head of the National Guard, Prince Miteb bin Abdullah.
12:45 pm Stake Sale: ICICI Bank said the board of directors today approved the sale of a part of its shareholding in ICICI Securities in an initial public offering, subject to requisite approvals and market conditions.
The size and other details of the offer would be determined in due course, it added.
12:35 pm Order Win: Shares of Himachal Futuristic Communication (HFCL) were locked at 5 percent upper circuit as it has bagged an order worth Rs 1,248 crore.
The company has bagged an order from Bharat Sanchar Nigam for defence communication network for DWDM equipments to be installed on pan India basis for the defence forces (under network for spectrum programme).
The order value for material and services is Rs 935 crore and Rs 313 crore is for annual maintenance contract. The contract is to be executed in 15 months.
12:28 pm Buzzing: AXISCADES Engineering Technologies share price rallied 6 percent intraday on acquisition of Mistral, a specialised embedded technology company, in Bengaluru.
"The acquisition to be completed in a phased manner will add significantly to AXISCADES' embedded practice and Make-in-India opportunities," the company said in its filing.
Mistral was co-founded by Anees Ahmed and Rajeev Ramachandra in 1997 as a niche technology company clocking Rs 132 crore in revenue last year.
The current founders and management team will continue to run the operations, AXISCADES said.
12:20 pm Crude impact: "India needs to keep a cautious eye on the surge in global crude prices as every USD 1 per barrel rise in crude prices leads to its import bill rising by USD 1.33 billion. Also, a rising import bill can put downward pressure on Rupee. India's import bill rises by USD 1.03 billion for every 1 Rupee weakening in Rupee vis-a-vis US dollar," Ajay Bodke, CEO & Chief Portfolio Manager PMS at Prabhudas Lilladher said.
He feels in a fiscally constrained environment a weakening Rupee can also lead to higher fiscal deficit if the government decides not to allow oil marketing companies to hike petrol & diesel prices for consumers and decides to absorb the increased fuel import bill.
Increased crude prices can also lead to prices of crude derivatives moving up impacting the raw material costs of companies across the sectors and leading to margin pressure. An exuberant Indian equity market needs to digest the far-reaching implications of the grave geo-political developments unfolding in the Middle-East seriously, Bodke said.
12:12 pm Market Check: Benchmark indices remained under pressure in noon on bouts of profit-booking in banks, oil & gas, banking & financials, metals and auto stocks. However, technology stocks capped losses.
The 30-share BSE Sensex was down 85.38 points at 33,645.81 and the 50-share NSE Nifty fell 26.60 points to 10,425.20 as investors continued to focus on corporate earnings.
The broader markets were alos under pressure, dragged by PSU banks. About two shares declined for every share rising on the BSE.
Major losers were Reliance Industries (down 2 percent), IOC (2.5 percent), ICICI Bank (1.1 percent), Yes Bank (2.2 percent), Axis Bank (1.1 percent), SBI (1.14 percent) and HDFC (0.74 percent).
Foreign portfolio investors (FPIs) bought shares worth a net Rs 576.27 crore yesterday, as per provisional data released by stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 263.84 crore.
Most Asian markets were trading higher, tracking positive lead from Wall Street that ended at record levels and turmoil in Saudi Arabia sent crude prices to two-year highs. Japan's Nikkei, China's Shanghai Composite, Hong Kong's Hang Seng and Australia's ASX 200 were up 0.6-1.7 percent.
11:48 am Buzzing: Global brokerage house Bank of America Merrill Lynch has initiated coverage with a buy rating on NBCC, the state-owned building construction company. The stock rallied 10 percent intraday Tuesday.
The research firm has set a target price at Rs 330 per share, implying 25 percent upside from Monday's closing price.
According to BoAML, premium valuations are expected to sustain driven by strong growth visibility and free cash flow.
The brokerage house expects 36 percent EPS CAGR in FY18-20 and sees NBCC winning orders worth Rs 35,000 crore in FY18-20.
11:36 am BHEL's Outlook: The state-owned power equipment major, Bharat Heavy Electricals (BHEL) is aiming at doubling the non-power revenue by 2022 and the projects will be executed on a turnkey basis.
The areas like municipal water, Ganga mission, solar, aerospace, defense and metro and high speed rail projects have been identified as growth drivers.
"Currently, our non-power business is 20 percent and we are aiming at doubling it to 40 percent by 2022," BHEL Director Amitabh Mathur told PTI.
"Unless, we take turnkey projects like we do in power, topline will not be high," he said.
Currently, power and associated business contribute 80 percent of the revenue for the company, while the rest 20 percent have been generated by the Railways and other electrical products.
11:25 am Market Outlook: "We are of the opinion that Nifty is likely to end the calendar year 2017 with more than 25 percent gain for the year," Devarsh Vakil, Head – Advisory (Private Client Group), HDFC Securities said in an interview to Moneycontrol.
"It is our thesis that FY19 and FY20 earnings will grow at 20 percent CAGR. The Nifty may post EPS of Rs 693 for FY20, based upon that 15x earnings. If numbers fructify market doesn't look that expensive," he said.
"If earnings do not come through we may see a larger correction otherwise we rise in earnings will make markets look reasonable again," he added.
11:15 am IPO subscription: The Rs 8,695-crore IPO of HDFC Standard Life Insurance Company has been subscribed 4 percent so far on first day Tuesday.
As per data available on NSE, the issue has received bids for 79.74 lakh equity shares against IPO size of 21.97 crore shares, excluding anchor investors' portion.
The insurance major on Monday raised Rs 2,322 crore from anchor investors through allocation of 8.0686 crore equity shares at Rs 290 per equity share (upper end of the price band).
Anchors investors include Blackrock Global Funds, ICICI Prudential, TVF Fund, Kuwait Investment, Eastspring, First State Asia, Dragon Peacock, Umbrella Fund, Carnegie, Pfa Kapitalforening Afdeling, Investeringsforeningen Danske Invest, Prince Street (India) Fund Pte Ltd, The Master Trust Bank Of Japan - Alliancebernstein Emerging Markets Growth Stock Mother Fund, and Ab Fcp I - Emerging Markets Growth.
11:00 am Rupee Trade: The rupee fell by 14 paise to trade at 64.81 against the dollar in late morning deals, following correction in equity market.
The Sensex was down 87.81 points at 33,643.38 and the Nifty declined 30.60 points to 10,421.20.
Yesterday, the rupee had slipped from the six-week high level to close at 64.68 a dollar, down 13 paise on fresh demand for the American currency from banks and importers.
10:52 am Tower biz sale: Debt-laden Reliance Communications today said it is renegotiating the tower business deal with all interested parties, including Brookfield Infrastructure Group.
In December last year, Reliance Communications had inked binding agreements to sell 51 percent stake in its tower business to Canada-based Brookfield Infrastructure and its institutional partners for Rs 11,000 crore but the deal fell through after the company called off its merger with Aircel.
"The deal with Brookfield Infrastructure Group for tower transaction was condition precedent based on the demerger of wireless division of the company with Aircel, which was called off by the company and Aircel on mutual consent on October 1, 2017," Reliance Communications said in a BSE filing.
It further said: "In view of above, the company is renegotiating the tower transactions with all the interested parties including Brookfield Infrastructure Group".
10:45 am Earnings Estimates: State-run power equipment maker BHEL's second quarter profit is seen rising 64 percent year-on-year to Rs 268 crore, led by operational performance.
Revenue during the quarter is expected to increase 2.6 percent to Rs 6,841 crore, compared with Rs 6,664 crore in same quarter last fiscal.
The movement of orders from non-execution to execution category; continued constraint on execution due to operational issues; and trends in provisions, particularly for liquidated damages on project completion would be key to watch out for.
EBITDA (earnings before interest, tax, depreciation and amortisation) may grow 81 percent to Rs 281 crore and margin may double to 4 percent from 2 percent YoY.
10:38 am Market Check: Benchmark indices turned lower on profit booking, with the Sensex falling 65.96 points to 33,665.23 after hitting a record high in opening.
The Nifty fell 24.90 points to 10,426.90.
The market breadth also turned negative. About two shares declined for every share rising on the BSE.
10:32 am Midcap underperforms: Nifty Midcap and Smallcap indices extended losses in morning, falling 1.4 percent each.
Just Dial, Adani Power, Union Bank, Bank of India, Bata India, IOC, HPCL, DLF, IDBI Bank, IRB Infrastructure, Canara Bank, L&T, Finance, Wockhardt, JSW Energy, Tata Global, HDIL and Reliance Infrastructure were down 2-6 percent.
10:20 am Cement price hike: Cement makers increased cement prices in Mumbai, reports CNBC-TV18 quoting Cogencis.
In Mumbai, India Cements raised November cement prices by 7-8 percent; ACC & Ambuja Cement by 4 percent; JK Lakshmi Cement by 2 percent; and Dalmia Bharat by 7-8 percent.
10:10 am Earnings Reaction: Shares of Just Dial declined 6 percent in morning as foreign brokerage Morgan Stanley has maintained its underweight rating on the stock with a target of Rs 360 per share.
According to Morgan Stanley, the Q2 revenue didn't show signs of pick up while margin beat was cost-led. Further, it highlighted that the firm reported first half revenue growth of 7.8 percent year on year against FY18 estimate of 10.7 percent.
A stronger-than-expected traction in search plus business is a key upside risk.
10:00 am Market Check: Equity benchmarks erase some opening gains to trade near the flat line as investors focussed on corporate earnings and developments related to PSUs.
The 30-share BSE Sensex was up 45.87 points at 33,777.06 and the 50-share NSE Nifty fell 0.10 points to 10,451.70.
About 1,231 shares advanced against 789 declining shares on the BSE.
9:55 am Management Interview: LTI, formerly known as Larsen & Toubro Infotech, continued to pave its way forward through growth in its digital business revenue in the second quarter of this fiscal, even as the company expects a strong pipeline in the current quarter.
On Monday, LTI reported revenue of Rs 1,750.8 crore, a growth of 4.8 percent from the last quarter, and net income of Rs 273 crore, a growth of 2.2 percent from the previous quarter.
''We delivered strong performance this quarter because of a disciplined execution of our digital strategy. Digital revenue now stands at 32 percent,'' Sanjay Jalona, chief executive of LTI, said in a telephonic interaction with Moneycontrol.
The company had said last quarter that digital business accounted for 29 percent of its revenue. Jalona continues to see digital driving growth at the company.
9:42 am Buzzing: Shares of Biocon added 1.5 percent in morning as its partner Mylan has resubmitted marketing authorization applications to European Medicines Agency (EMA).
"Biocon's partner Mylan has resubmitted the marketing authorization applications (MAAs) for its proposed biosimilar trastuzumab and pegfilgrastim with the EMA as per the administrative protocol, as per company release.
"This follows the earlier withdrawal of both applications in response to the audit of our aseptic drug product facility by the designated European authority," it added.
Biocon has completed the corrective and preventive actions, including the facility modifications, in response to the audit observations and expects these to be verified during re-inspection.
9:32 am IPO opens: HDFC Standard Life Insurance Company, the part of housing finance major HDFC, has opened its Rs 8,695-crore initial public offering for subscription today, with a price band of Rs 275-290 per share.
It would be the third life insurance company getting listed on bourses; and is the first initial public offering by a company promoted by HDFC, since the initial public offering of HDFC Bank in 1995.
The initial public offering up to 29,98,27,818 equity shares of HDFC Standard Life Insurance, which will close on November 9, comprises of an offer for sale of 19,12,46,050 shares by Housing Development Finance Corporation and up to 10,85,81,768 shares by Standard Life (Mauritius Holdings) 2006 Limited.
The offer comprises of a reservation of up to 21,44,520 shares for purchase by HDFC Life Employees, reservation of up to 8,05,000 shares for eligible HDFC Employees and reservation of up to 2,99,82,781 shares for HDFC shareholders.
Bids can be made for a minimum of 50 equity shares and in multiples of 50 shares thereafter.
9:25 am Buzzing: Tata Chemicals gained over a percent as board has approved the sale of its Haldia fertiliser unit in West Bengal to Netherlands-based Indorama Holdings BV for Rs 375 crore.
In a regulatory filing, the company said its board approved the sale of the Phosphatic fertiliser business by way of slump sale on a going concern basis to IRC Agrochemicals, a wholly-owned subsidiary of Indorama Holdings BV.
"The transaction would involve transfer of Haldia plant, trading business of bulk and non-bulk fertilisers along with immovable, movable properties, working capital and product brands but excluding outstanding subsidy amounts," it said.
9:20 am DTH biz sale: Billionaire Anil Ambani-led Reliance Communications (RCom) has signed an agreement to sell its DTH business to Veecon Media and Television, in a bid to lower its debt.
The sale is part of a debt repayment plan that RCom had announced on October 30, under which it had promised to raise up to Rs 17,000 crore by selling assets like spectrum, towers and fibre. The company is laden with about Rs 44,300 crore debt.
"RCom entered into a binding memorandum of understanding (MoU) with Veecon Media and Television Ltd, for sale of its subsidiary Reliance BIG TV Ltd, engaged in the business of direct-to-home (DTH) services across India," the company said in a statement.
It, however, did not disclose the value of the deal.
9:15 am Market Check: Equity benchmarks opened higher on Tuesday, with the Sensex hitting fresh record high, tracking positive global cues.
The 30-share BSE Sensex was up 112.99 points at 33,844.18 and the 50-share NSE Nifty rose 31.40 points to 10,483.20.
About three shares advanced for every share falling on the BSE.
ONGC gained 2 percent on higher crude oil prices. Brent crude oil futures climbed USD 64 per barrel.
GAIL, Vedanta, Aurobindo Pharma, Bharti Airtel and Bajaj Finance were early gainers while HPCL, BPCL, Yes Bank, Coal India and Wipro were losers.
Biocon, Reliance Communications and Tata Chemicals gained 1-4 percent.
PSU companies continued to be in focus after MMTC and STC merger news. MMTC rallied 17 percent and STC gained 8 percent on hopes of merger. Hindustan Copper, FACT, RCF, Engineers India and MTNL were up 2-4 percent.
After earnings, Bharat Seats, GTPL Hathway, AstraZeneca, Thomas Cook, GIPCL and KEC International rallied 2-15 percent while Jaiprakash Power Ventures and Just Dial fell around 2 percent.