Nifty ends below 8550, Sensex tanks 284 points; ITC, BHEL down 3-4%

03 Aug 2016

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3:30 pm Market closing: After a lot of struggle the market ended in deep red. The Sensex closed down 284.20 points or 1 percent at 27697.51 and the Nifty slipped down 78.05 points or 0.9 percent at 8544.85. About 913 shares have advanced, 1812 shares declined, and 142 shares are unchanged.

Asian Paints, Cipla, Sun Pharma, Coal India and Bharti Airtel were top gainers while ITC, Tata Motors, BHEL, Maruti and Reliance were losers in the Sensex.

3:15 pm Buzzing: Shares of Wockhardt gained 5 percent intraday as it has not received Form 483 for its Chikalthana plant.

The US Food & Drug Administration (FDA) has inspected the company's plant, which has lasted for five days and ended on June 10, 2016.

2:59 pm Market Update: Equity benchmarks continued to trade lower. The Sensex was down 180.36 points or 0.64 percent to 27801.35 and the Nifty declined 47.55 points to 8575.35.

About 1722 shares declined against 920 advancing shares on the BSE.

2:55 pm Earnings: Titan's first quarter profit and revenue missed analysts' expectations but operational performance was strong. Net profit at Rs 126.6 crore against forecast of Rs 184 crore, hit by exceptional loss of Rs 97 crore.

Revenue stood at Rs 2,791 crore against forecast of Rs 3,111 crore by analysts.

Operating profit was at Rs 292.2 crore and margin at 10.44 percent against estimates of Rs 283 crore and 9 percent.

2:50 pm P Chidambaram says I want assurance from the FM that ruling party will bring as GST bill as Financial bill and not as money bill.

2:45 pm P Chidambaram says the services tax rate should not be increased from 14.5 percent to 22-24 percent, because that will be inflationary.

2:40 pm P Chidambaram says standard tax rate should be 18 percent and should not be exceeded that level, for 70 percent of goods and services tax, which will be the non inflationary, efficient way of tax rate and acceptable by public. Then demerit or lower rate will be worked out on that rate.

2:35 pm PFRDA to launch new schemes: Pension fund regulator PFRDA will launch two new schemes with aggressive and conservative options of investing up to 75 percent of funds in equity by subscribers in a months' time.

"We will launch two life coverage schemes with aggressive and conservation investment options in equity in a months time," Pension Fund Regulatory and Development Authority Chairman Hemant Contractor said.

Under aggressive investment options, the subscribers would be allowed to start with up to 75 percent investments of their deposits into equity which will be reduced over a period of time as their age increases, he said.

In the other option or scheme, the subscribers will start with investing 25 percent of their deposits into equity which will too decrease subsequently over a period of time, he added.

2:30 pm While discussion, P Chidambram advises to keep tax rate as low as possible.

Emerging markets average GST rate stood at 14.1 percent and rich countries has 16.8 percent.

2:25 pm Market Expert: If the Bill is implemented, then over the longer term, it is sure to be a GDP and Budget booster, believes Vallabh Bhanshali of Enam Securities.

According to him, the full impact and the benefits will only be understood over a passage of time.

From a market point of view, he said if the GST is passed unanimously then he would be more bullish on India once it is implemented. In the process of its implementation market is sure to face some worry, and there could be some administrative confusion along the way, said Bhanshali.

Globally too the event has been built-in into the prices.

2:20 pm P Chidambaram says many issues with respect to GST still need to be resolved.

Congress party has never opposed to the idea of GST. Country is now readty to to embrace the ida of GST.

GST Bill should be passed based on arguments, not on strength of numbers.

2:15 pm FM on GST: Finance minister, Arun Jaitley has introduced the GST Constitutional Amendment Bill in the Rajya Sabha, saying GST was first mentioned in 2006 Budget by former finance minister P Chidambaram.

Large consensus was needed for a bill like this; all parties have been taken into confidence, he further says.

2:10 pm ITC falls 3%: ITC may face negative effects of the GST if the rate is set above the current expectation of 18 percent, says Amnish Aggarwal, Prabhudas Lilladher.

This is very likely, says Rahul Singh of Ampersand Capital Investment, as the Centre may want to hike the rate to compensate for agreeing to the various demands of the states.

2:00 pm Market Check: Equity benchmarks remained under pressure as the discussion started on GST Constitutional Amendment Bill in the Rajya Sabha.

The 30-share BSE Sensex was down 203.84 points at 27777.87 and the 50-share NSE Nifty fell 49.15 points to 8573.75. About two shares declined for every share advancing on the BSE.

The markets have already factored in the news of the Goods and Services Tax (GST), says Rahul Singh, Ampersand Capital Investment. Markets are already ahead of fundamentals. Markets may shift their gaze back to the fundamentals and earnings and a pull back is bound to happen. A shallow correction is expected in markets.

GST will not affect the markets for the next 3-6 months, he says, adding that the earnings will also not be affected till atleast the second half of next fiscal.

Manoj Bahety, Edelweiss Securities says government will benefit from the passage of the GST bill in terms of the unorganised sector which isn't paying any taxes. Also, many products are exempt even from the organised sector.

1:50 pm Results: Kitchen appliances firm TTK Prestige reported a 10.20 percent increase in its standalone net profit at Rs 24.20 crore for the first quarter ended June 30, 2016.

The company had posted a net profit of Rs 21.96 crore during the April-June quarter of the previous year, TTK Prestige said in a BSE filing.

Its net sales during the quarter under review stood at Rs 346.10 crore, up 1.66 percent, as against Rs 340.44 crore in the corresponding period a year ago.

1:30 pm FM speaks on GST: Union Finance Minister Arun Jaitley on Wednesday said he hopes for a rollout of the Goods and Services Tax (GST) by April 2017.

Speaking exclusively to CNN-NEWS18 the union minister said, "The one-nation, one-tax regime will reduce taxation levels. We have already addressed the concerns of the state governments and I am hopeful of a rollout early next year."

He further added, "It's a non partisan tax. The states will be getting compensation for five years and also get service tax."

The market is still struggling with the Nifty around 8550. The 50-share index is down 69.80 points or 0.8 percent at 8553.10 while the Sensex is down 266.25 points or 0.9 percent at 27715.46. About 785 shares have advanced, 1726 shares declined, and 126 shares are unchanged.

Cipla, Asian Paints, Coal India, Sun Pharma and Hero MotoCorp are top gainers while ITC, BHEL, Tata Motors, Maruti and L&T are losers in the Sensex.

With the much-awaited goods and service tax (GST) bill entering final lap today, the Parliament will discuss constitutional amendments that are necessary to facilitate the landmark GST.  At 2 pm, Rajya Sabha will begin a much-awaited debate on GST before voting on a bill that amends the constitution to implement a single national tax to replace the existing tax system.

Finance Minister Arun Jaitley has been meeting leaders of Congress and other parties, including SP, BJD, TMC and RJD, to build a consensus on the passage of the long pending indirect tax reform bill in the Rajya Sabha.

Meanwhile, S&P Global Ratings said supportive monetary and fiscal policies can help India achieve 8 per cent growth in the next three fiscals, but if reforms do not get further momentum then its economic "outperformance" could be short-lived.

It said India will have to address issues plaguing private investment, and banks will have to clean up their balance sheets, it said, adding the country lacks infrastructure.

12:58 pm Market Update: Equity benchmarks remained under pressure as the BSE Sensex tanked 258.26 points at 27,723.45 and the NSE Nifty fell 68.45 points to 8,554.45.

12:40 pm Europe opens: European stocks opened higher, as investors digest some more earnings and a fall in the oil price.

US crude futures remained below USD 40 per barrel and Brent was below USD 42 as ongoing fuel oversupply and stuttering economic growth weighed on markets.

US West Texas Intermediate (WTI) crude futures were trading at USD 39.50 per barrel, down 1 cent from their last settlement.

12:20 pm Earnings: Personal care and healthcare products manufacturer Emami said consolidated profit in April-June quarter fell 34.6 percent to Rs 56.6 crore on yearly basis. It was impacted by higher finance, tax & amortisation cost, and lower other income, though was supported by revenue and operational growth.

Total income from operations grew by 20 percent to Rs 644.4 crore in the quarter ended June 2016 compared with Rs 537.2 crore in corresponding period of last fiscal, which was a miss.

Revenue estimated at Rs 700 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

12:00 pm Market Check
Equity benchmarks remained sharply lower in noon trade with the Sensex falling 202.56 points to 27,779.15 ahead of likely discussion over GST bill in the Rajya Sabha.

RC Bhargava, Chairman of Maruti Suzuki , said that the GST is a good move, but the focus should be on implementing it once the legislation is passed. Legislation on paper won't be good unless there is implementation, he said.

The GST system should lead to a minimal avoidance of tax, he said, and the ability to control evasion will depend on the IT system.

The 50-share NSE Nifty was down 51.80 points at 8,571.10, weighed down by FMCG, infra, oil, auto and select banks stocks.

ITC, Reliance Industries, HDFC, Tata Motors, L&T and Maruti Suzuki were top contributors in Sensex's fall while Asian Paints, HDFC Bank, Cipla, Sun Pharma and Coal India outperformed.

11:45 am Steel: The health of over USD 100 billion domestic steel industry will depend on the continuation of minimum import price (MIP) beyond this month, among other factors, Icra said Tuesday. MIP failed to have a material impact on steel imports till April due to a lead time of about one-and-a-half to two months for the shipment to arrive in India, the credit rating agency said in a statement. However, the full effect of the MIP did set in from May, and as per initial trends, steel imports in April-May 2016-17 have declined by close to 30 percent year on year, it added.

11:30 am Boardroom: After three quarters of subdued performance, HCL Technologies reported a stellar first quarter performance with a 6.3 percent rise in net profit to Rs 2,047 crore while the rupee revenue grew 6 percent to Rs 11,336 crore. The company's operating margins (EBIT) rose to 5 percent to Rs 2,333 crore in Q1. Increased automation and offshoring, usually associated with large deals, helped margins in the last quarter, said Anil Chanana, CFO of HCL Tech. Anant Gupta, the company's CEO, speaking to CNBC-TV18, said that organic growth in the first quarter was higher on back of strong foundation in different sectors. Nearly 10 percent growth in infrastructure division came from organic business, he said.

The market is on a wait and watch mode as the most-awaited goods and service tax (GST) will be discuss in the Rajya Sabha today. The Nifty is at 8572.35, down 50.55 points or 0.6 percent while Sensex is at 27776.52, down 205 points or 0.7 percent.

Asian Paints, Adani Ports, Coal India, Cipla and Hero MotoCorp while ITC is down 3 percent. HDFC, BHEL, Tata Motors and HUL are down.

Gold rose to a three-week high as European and US shares fell and the dollar hit its lowest in over a month after last week's soft US growth data dented expectations for a near-term interest rate hike. Gold is highly sensitive to US interest rates, which lift the opportunity cost of holding non-yielding bullion.

10:45 am FII View: Mahesh Nandurkar of CLSA feels with the Nifty now trading at 16.7x 12-month forward earnings or 1 standard deviation above its last 10-year average, there are not that many value stocks left.

"Of the 125 stocks we cover, there are still 40 stocks that trade below average. Many of these are state-owned banks," he says.

Top value picks (below 10-year average valuation) are Reliance Industries, Power Grid, ICICI Bank, HCL Technologies, Hindalco Industries and Axis Bank.

Oil marketing companies (IOC, HPCL) though not trading at a discount to average still have undemanding valuations, Nandurkar says, adding expensive sell/underperform ideas are Havells, Motherson Sumi, TVS Motor, HUL, Asian Paints and Voltas.

10:15 am Earnings: Country's fourth largest IT services exporter HCL Technologies started off financial year 2016-17 on a strong note by beating analysts' expectations on all parameters. Profit and revenue increased by 6.3 percent and 6 percent to Rs 2,047 crore and revenue at Rs 11,336 crore on sequential basis, respectively.

Profit was estimated at Rs 1,890 crore on revenue of Rs 11,255 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Dollar revenue grew by 6.5 percent to USD 1,691 million on QoQ basis, which was expected at USD 1,678.5 million.

HCL Technologies expects FY17 revenue growth in range of 12-14 percent in constant currency terms and operating margin (EBIT) in range of 19.5-20.5 percent.

10:00 am Market Check
Equity benchmarks extended losses after flat opening, dragged by FMCG, HDFC group, healthcare and select technology stocks. Investors eagerly waited for the GST bill that is likely to be tabled in the Rajya Sabha today.

The 30-share BSE Sensex was down 187.69 points at 27794.02 and the 50-share NSE Nifty fell 47.30 points to 8575.60. The broader markets also declined half a percent due to weak market breadth.

More than two shares declined for every share advancing on the Bombay Stock Exchange.

ITC fell more than 2 percent on profit booking after rising nearly 4 percent in previous session. HDFC, Infosys, Reliance Industries, HUL and Bharti Airtel slipped over a percent while Adani Ports gained 1 percent.

9:50 am Result: Country's fourth largest IT services exporter HCL Technologies started off financial year 2016-17 on a strong note by beating analysts' expectations on all parameters. Profit and revenue increased by 6.3 percent and 6 percent to Rs 2,047 crore and revenue at Rs 11,336 crore on sequential basis, respectively.

Profit was estimated at Rs 1,890 crore on revenue of Rs 11,255 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

"Growth momentum is broad–based, encompassing all sectors and service lines, propelled by our robust 21 Century Enterprise strategy and robust business model'', Anant Gupta, President & CEO, HCL Technologies said.

9:30 am Merger or de-merger? The Petroleum Ministry is not considering any proposal to merge 13 state-owned oil PSUs like ONGC , IOC and GAIL to create a behemoth, Oil Minister Dharmendra Pradhan said today. "Ministry is not considering any proposal (for merger). It is an idea which was reportedly mooted by a Director of a state-owned company and like all ideas have to be debated, we are debating it," he said here. His ministry has 13 PSUs ranging from upstream oil producers like ONGC and Oil India to downstream oil refining and fuel marketing firms IOC, BPCL and HPCL to gas transporter GAIL India Ltd to engineering firm Engineers India.

The market has opened flat with the Nifty still below 8650. The 50-share index is at 8617.35, down 6 points while the Sensex is at 27946.03, down 35.68 points.

Tata Motors, Asian Paints, L&T, Sun Pharma and Lupin are gainers while HDFC twins, TCS and ITC are major losers. HCL Tech is up 5 percent on its result.

The Indian rupee opened with marginal gain of 3 paise at 66.70 per dollar versus previous close of 66.73. Yen at a three-week high after Japanese government's fiscal plans underwhelmed investors.

Among global peers, Asian shares bowed lower while the yen lorded over a weakened US dollar as talk that Bank of Japan may retreat from its massive bond-buying campaign twigged a shakeout in debt markets globally. MSCI's broadest index of Asia-Pacific shares outside Japan. Japan's Nikkei lost 1.4 percent as the rising yen pressured exporter stocks while financials slid 2.7 percent.

Japanese bonds have suffered their worst sell-off in more than three years as investors feared the BoJ was out of easing ammunition and might leave it to fiscal policy to stimulate the economy.

Wall Street stocks fell on Tuesday, with each of the major indexes notching their worst day in about a month as economic data and weaker-than-expected auto sales spurred concerns about growth.

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