BSE Sensex ends 57 pts down; Jet up 17% on FIPB nod hopes

26 Jul 2013

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3:55 pm Market closing: The August series started off on a subdued note. The nifty ended a choppy day marginally in the red at 5886.20, down 21.30 points. The sensex also closed the day on an almost flat note down 56.57 points at 19748.19.

3:45 pm Hammered down: Most of the PSU banks were weak today, dragging down the indices. Bank of India, Punjab National Bank and Union Bank fell around 5-9 percent on the BSE.

3:40 pm Leader: Jet Airways stock saw significant buying today, ending the day with a gain of around 17 percent. Jet and Etihad have submitted a revised agreement to regulatory authorities making changes largely with respect to 'effective control'.  However, CNBC-TV18's sources say that the corporate affairs ministry has opposed the new definition of control.

3:35 pm Market this week: Nifty ended the weak down 2.3 percent while Sensex fell 2 percent. Wockhardt (down 35 percent, Jubilant Industries (down 33 percent), United Breweries (down 15 percent), YES Bank (down 13 percent) are midcap losers while Reliance Broadcast (up 14 percent) and Arvind (up 12 percent) are top midcap gainers.

3:30 pm Ahead of monetary policy: Amidst bankers and industry crying foul over RBI's move to squeeze liquidity, Reserve Bank Governor D Subbarao today met Finance Minister P Chidambaram ahead of first quarter policy review next week.

The meeting assumes importance in the backdrop of RBI taking a series of measures to tighten liquidity and check import of gold with a view to arrest rupee fall.

In its first quarterly review of monetary policy to be unveiled on July 30, RBI will have to take a call on interest rates and improvement of the liquidity situation.

3:20 pm Update: Abu Dhabi-based Etihad Airlines has agreed to halve the number of directors on the Jet Airways Board to two posts under the Rs 2,058 crore deal, giving the Indian promoters 'effective control' of the carrier, reports PTI.

This, alongwith other details of an amended shareholding agreement (SHA), has been forwarded to Finance Ministry ahead of the FIPB meeting on July 29 to consider the proposal. As per the revised shareholding agreement, Etihad would have two directors on the board after the deal, as against the earlier proposal of four directors in the 10-member board, sources said.

The market is extremely volatile even in the last trading hour of the day. The Nifty is still below 5900 and is at 5886.85, down 20.65 points while the Sensex is down 52.39 points 19752.37. About 763 shares have advanced, 1374 shares declined, and 159 shares are unchanged.

PNB slumps nearly 6 percent as asset quality deteriorates. April-June net NPAs rise by 50 bps to 2.98 percent. In a CNBC-TV18 boardroom, the management says majority of restructured book was from power sector.

Among the PSU banking stocks, Canara Bank tanks 9 percent on the BSE.

Sources say Tata Motors doubles margin for passenger vehicle dealers faced with massive exit of top dealers. Dealer margins doubled to about 5 percent per vehicle from around 2-2.5 percent earlier.

03:00pm JSW Energy said the first quarter forex loss was at Rs 187 crore, which had major impact on bottomline.

"Entire forex loss was on account of imported coal. We plan to hedge all import bill exposure and have reduced foreign exposure," the company said.

Sterlite Technologies' first quarter net profit jumped 23.5 percent year-on-year to Rs 22.6 crore, but revenue declined to Rs 758 crore from Rs 866 crore Y-o-Y.

02:50pm Boardroom
Jawahar Goel, MD of Dish TV said higher marketing costs impacted bottomline, adding average revenue per user and topline witnessed healthy trajectory in Q1.

EBITDA and margin were hit by high expenditure, programming & content cost, Goel adds.

"We intend to pare down debt by Rs 750 crore during the year and intend to make company debt free by FY14-end," he says.

He says that the company is expecting high depreciation for another 1 year time, which is not a big concern.

02:36pm Indian equity benchmarks are directionless in afternoon trade with the Sensex hovering around 19800 level and the Nifty around 5900.

The BSE Sensex is up 35.48 points at 19840.24, and the Nifty is up 6.60 points at 5914.10, but the broader markets underperformed benchmarks.

The BSE Midcap and Smallcap indices fell 0.77 percent each as declining shares outpaced advancing ones by 1372 to 767.

Hindalco Industries and Sesa Goa topped the selling list, falling more than 5 percent.

JSW Energy shares fell one percent post its first quarter net profit rose lower-than-expected to Rs 214 crore as against Rs 3.4 crore in a year ago period and analysts' expectations of Rs 302 crore.

Ambuja Cements rebounded with 2 percent gains after losing 10.5 percent in previous session due to Holcim deal.

2:00 pm Earnings impact: Dish TV slumps around 4 percent on the BSE. The company has narrowed its loss in April-June quarter from Rs 32.3 crore year-on-year.  During the period, net sales increased to Rs 576.5 crore. Its subscription revenue increased 16 percent to Rs 528 crore (Y-o-Y) while average revenue per user was at Rs 165 in the first quarter.

1:55 pm Houseview: Citigroup downgrades property developer DLF to "sell" from "neutral" and cuts its target price to Rs 150 from Rs 209.

"High leverage and mounting interest costs combined with tough macro, slowing demand, and the possibility of tighter liquidity pose significant downside risks," Citigroup said in a note dated on Thursday.

1:50 pm Rupee stats: The rupee rose to a five-week high as the RBI's aggressive defence of the currency showed some signs of success, but investors were again set to demand the government pay them handsomely to buy its bonds at an auction on Friday, reports Reuters.

The central bank has tightened money supply and pushed up short-term interest rates to try to generate demand for the rupee, which hit a record low on July 8, but that has forced the government to pay abnormally high yields to sell its debt -- including 11 percent on three-month paper earlier this week.

1:45 pm Losers: Hindalco , Coal India , Sterlite, HUL and Maruti Suzuki are top losers in the Sensex.

1:40 pm Boardroom: Biocon raised concerns about confusion in India's drug pricing policy, which has impacted the growth of pharma-biotech sector.

"We are still seeing very challenging environmental condition in India especially around regulatory aspects of the pharma-biotech sector. We hope that the government will really address this with the sense of urgency," Kiran Mazumdar Shaw, CMD, Biocon said in a earnings press conference .

She alleged that due to confusion in pricing policies stockists have been reluctant to take stock on hand until the pricing issues are resolved. She added that although clinical trials are resuming now, India needed a regulatory robustness. ''We don't want more layers being put in to approvals but have expertise and the knowledge with which to approve clinical trials expeditiously,'' she stressed.

The Nifty has fallen below 5900. The Sensex is down 66.69 points at 19738.07, and the Nifty is down 30.05 at 5877.45. About 701 shares have advanced, 1337 shares declined, and 158 shares are unchanged.

The cuts are much deeper in the mid and small cap space. The midcap index is down over a percent.

It is a mixed bag from HUL as the topline disappoints, but profits beats street boosted by Rs 177 crore other income. Volumes growth too below estimate at 4 percent.

Banking sources indicate that DLF's  Rs 1600 crore with Adrian Zecha for Aman Resorts may not go through, ends exclusivity clause with Adrian Zecha to sell Aman Resorts. Zecha missed two deadlines for management buyout of Aman Resorts.

12:45pm Earning
Hindustan Unilever shares plunged more than 5 percent after it reported lower-than-expected 6.7 percent growth in total income at Rs 6,809 crore, though net profit came in higher-than-expected at Rs 1019 crore.

Analysts had expected it to report net profit at Rs 860 crore on total income of Rs 7025 crore for the quarter.

Volume growth, which was expected in the range of 5-6 percent, came in at 4 percent, much lower compared to 6 percent reported in a year ago period.

12:30pm Earning
Heidelberg Cement shares dropped three percent after it posted a net loss at Rs 8 crore in second quarter as against profit of Rs 19.2 crore in a year ago period. Net sales, however, increased 17.6 percent Y-o-Y to Rs 358.6 crore during June quarter.

Management rejig at HUL
Hindustan Unilever, the largest fast moving consumer goods maker in India, on Friday said, Nitin Paranjpe, its current CEO and MD, is joining Anglo-Dutch parent Unilever as President, Home Care, effective October 1.

Sanjiv Mehta, currently Unilever's Chairman for North Africa and Middle East region, will replace Paranjpe as HUL's new MD and CEO from Oct 1, the company said.

12:20pm The market is completely listless in noon trade today with the Nifty hovering around the 5900 level. Public sector lender Punjab National Bank ( PNB ) disappointed the street with the non-performing asset rising further during April-June quarter, though the net profit increased higher-than-expected 2.3 percent year-on-year to Rs 1,275 crore.

Gross non-performing asset (NPA) jumped 57 bps quarter-on-quarter (up 1.5 percent Y-o-Y) to 4.84 percent while net NPA increased 63 bps Q-o-Q (up 1.3 percent Y-o-Y) to 2.98 percent during June quarter. Gross NPA of the state-owned lender surged 12 percent Q-o-Q to Rs 15,090 crore and net NPA soared 25 percent Q-o-Q to Rs 9,060 crore in first quarter of FY14. The stock slumps 6%. The stock touched a 4-year low of Rs 585.95, which fell more than 5 percent.

The BSE Sensex is down 20.97 points at 19783.79, and the Nifty is down 10.40 points at 5897.10. The broader markets declined 0.4-0.8 percent as declining shares outnumbered advancing ones by 1158 to 757 on the BSE.

11:50 am Results impact: Public sector lender Punjab National Bank ( PNB ) disappointed the street with the non-performing asset rising further during April-June quarter, though the net profit increased higher-than-expected 2.3 percent year-on-year to Rs 1,275 crore.

Net interest income grew by 5.7 percent Y-o-Y to Rs 3,907 crore in first quarter, which too was above expectations.

Analysts on an average had expected the bank to report net profit at Rs 1,196 crore and net interest income at Rs 3,829 crore.

Gross non-performing asset (NPA) jumped 57 bps quarter-on-quarter (up 1.5 percent Y-o-Y) to 4.84 percent while net NPA increased 63 bps Q-o-Q (up 1.3 percent Y-o-Y) to 2.98 percent during June quarter. Gross NPA of the state-owned lender surged 12 percent Q-o-Q to Rs 15,090 crore and net NPA soared 25 percent Q-o-Q to Rs 9,060 crore in first quarter of FY14. The stock slumps 6%.

11:40 am Update: Oil Minister says India's dependence on imports to be 90 percent by 2013-end. He said that it is necessary to step up domestic oil and gas production.

11:30 am Opinion: Bond yields, which shot up after Reserve Bank of India announced series of measures on Tuesday to curtail liquidity in the economy are seen coming back to normalcy in around one and half months once rupee stabilises, A Balasubramanian, CEO, Birla SunLife AMC told CNBC-TV18 .

Once rupee stabilises, he expects portfolios to get adjusted in a way that money would flow from longer duration to the short durations and also a larger allocation to the money market funds.

He is underweight on FMCG and cement sector but prefers private banks over publics sector banks on strong fundamentals. He said that AMC would have a larger allocation for the private banks as the fear of non-performing assets, capital adequacy ratio, return on assets and return on equity is not there.

11:25 pm Wipro AGM: Wipro is poised for double-digit growth in the coming years as the US market is recovering and consumer spending improving, Chairman Azim Premji said. Wipro can achieve growth levels in double-digits of at least 15 percent in US dollar terms in the coming years as the US market is on path to recovery and there is an uptick in consumer sentiment, he said while addressing the AGM.

11:30 pm Exclusive: The Finance Ministry is looking into Life Insurance Corporation's investment in Gitanjali Gems , reports CNBC-TV18, quoting an unnamed official in the ministry.
 According to the official, there is no formal enquiry at this stage; only the details of the investment have been sought from the financial institution. As on June 30, LIC held 4.89 percent in the jewellery firm.

LIC's investment has drawn attention most likely since the financial institution was among the handful of institutions that increased stake in the company during the June quarter, buying 4.84 lakh shares.

The insurer had started building a position in Gitanjali Gems since mid-2012. In the July-September quarter last year, LIC bought 1.95 percent, increased the stake to 2.93 percent in the December quarter and to 4.36 percent in the March quarter. It then added some more shares last quarter.

The market kicks off the August series on a quiet note. The Nifty holds above 5900 led by capital goods and select rate sensitives. The Nifty is up 5.20 points at 5912.70 and the Sensex is up 24.59 points at 19829.35. About 771 shares have advanced, 867 shares declined, and 119 shares are unchanged.

Sun Pharma , Hero MotoCorp and M&M are supporting the indices. The midcap and small caps are also in positive territory.

In commodities, Brent holds above USD 107/barrel and Nymex is at USD 105.5. Gold is sideways at USD 1335 an ounce

In currencies, dollar index weakens to sub 82 on weak job data. Yen strengthens to 99.2 and euro surges to 1.327.

The rupee opened higher partly because of the global dollar weakness and partly because FIIs are rumoured to have bought at yesterday's treasury bill auction. Exporters were also noted selling dollars for the third consecutive day after the RBI's second round of tightening.

Bonds leaped higher and the yield on the 1-year fell to 8.1 percent from 8.2 overnight. The market is encouraged by the continued stability in the rupee and by Raghuram Rajan's assertion that the recent moves are not intended to kill growth.

0:59am Buzzer
Tata Motors shares lost nearly one percent after the rating agency S&P affirmed its long-term rating on the stock at BB, but cut long-term rating outlook to stable from positive on likely hike in leverage.

Bata India gained more than 3 percent after its second quarter net profit increased to Rs 61.9 crore from Rs 52.7 crore year-on-year.

Kalpataru Power shares rose over 1 percent. First quarter net profit of the company jumped to Rs 34.7 crore from Rs 27.3 crore Y-o-Y.

Shares in Jet Airways India surged as much as 19.7 percent after traders said India's Foreign Investment Promotion Board was likely to approve a planned stake sale to Etihad Airways, reports Reuters.

10:50am Ahead of Earnings
JSW Energy gained more than 2 percent ahead of its June quarter earnings. Analysts expect the company's PAT to grow to Rs 302 crore from Rs 3.4 crore Y-o-Y. In a year ago period, it had an exceptional of Rs 232.5 crore, adjusting for which the profit growth is expected to look better.

Sajjan Jindal at AGM says that 240 MW hydro electric project in Himachal Pradesh has received MoEF approval.

10:40am Management
After good set of numbers in Q1, Dilli Raj, CFO of SKS Microfinance says that provisions were only on account of standard assets. "We have managed to sustain profitability since Q3FY13 and average maturities of company's liabilities were at 6.2 months," he adds.

Earnings
Edelweiss Financial Services gained 0.6 percent after first quarter consolidated net profit increased to Rs 55.7 crore from Rs 39.8 crore and net interest income jumped to Rs 310 crore from Rs 233 crore year-on-year.

10:20am It is a positive start to the August series; the market continued to trade higher with marginal gains after a sharp fall in previous two sessions, aided by oil & gas, healthcare and metals stocks.

The BSE Sensex is up 48 points at 19852.76, and the Nifty is up 20 points at 5927.50.

Major bluechips like Reliance Industries , Larsen & Toubro and ICICI Bank gained between 1.2 percent and 1.8 percent.

Sun Pharma shares topped the buying list, rising more than 2 percent followed by Cipla with 1 percent gains.

However, Hindustan Unilever dropped 3 percent again, ahead of first quarter earnings today. The result will be closely watched by the street after its parent company Unilever PLC said growth was slowing in emerging markets like India.

Maruti Suzuki dropped nearly 2 percent. Nomura Financial Advisory and Securities India maintained its "buy" rating on the stock , but cut its target price on the stock to Rs 1,805 from Rs 2,259, saying the overall outlook for the rest of the year has "toughened" with a slower GDP growth and higher fuel prices than previously expected.

Biocon shares gained more than 5 percent after strong Q1 numbers while SKS Microfinance rallied 7 percent after the turnaround continued for the company with the third consecutive quarter of profits post the Andhra Pradesh profile being written off. Net interest income rose by 71 percent to Rs 70.6 crore while profits have come in at Rs 5 crore as against loss of Rs 38.8 crore Y-o-Y.

Aviation stocks are on buyers' radar today. Jet Airways surged nearly 14 percent and SpiceJet gained 6 percent.

9:55 am: Maruti Suzuki is down 2 percent on the BSE. The car manufacturer beat street expectations with first quarter net profit surging 49 percent year-on-year to Rs 632 crore, helped by favourable foreign exchange rates, which boosted export realisations, apart from synergies from the merger of Suzuki Powertrain India.

9:45 am Exclusive: Finance Ministry is looking into LIC investments in Gitanjali Gems , reports CNBC-TV18 quoitng sources. FinMin officials have said that there is no enquiry at this stage and at first it needs to ascertain details.  The ministry has asked LIC for report in this regard. LIC investments in Gitanjali has been down by over 3/4th in value. The stock has been beaten down and hitting lower circuit consecutively.

9:40 am Pick on HUL : Sanjeev Prasad of Kotak Institutional Equities expresses dismay at the bizarre valuations of top FMCG stock Hindustan Unilever (HUL) and expects it to correct 15-20 percent. There is no point owning this stock at current levels.  According to him most investors had a sell on HUL until it came out with the open offer. From then on the stock zoomed and the valuations now belie any justifications, he said adding there is not much to recommend in these market.

Prasad was also disappointed with the entire Ambuja-Holcim restructuring and found the synergy talks baloney. These types of transactions should not go through and Sebi or some other authority must raise a stink.

9:35 am Movers and losers: Sun Pharma , Strelite Industries, Jindal Steel , L&T and ONGC are top gainers in the Sensex. Besides HUL, other losers in the Sensex include ITC , Maruti Suzuki, Coal India and Wipro .

9:30 am Weakling: HUL is down another 4 percent on the BSE ahead of announcing its April-June quarter earnings. A CNBC-TV18 poll sees its total income rising over 10 percent. While the reported profit after tax is seen down 35 percent at Rs 860 crore. Q1 will see the full impact of royalty increase, lower other income from treasury and a higher tax rate.

Margins are seen flat at 15.2 percent. The stock already took a beating on Thursday after Unilever's numbers were out and the parent company said that growth is slowing in emerging markets.

9:25 am Market outlook: Based on valuations, banks may be heading towards a bottom and hence, a little bounce can be expected, says professional investor Sangeeta Purushottam . So investing in beaten down banking stocks, from a long term perspective, makes sense.

When very large correction happens in banks, like in case of Yes Bank , it is advisable to wait till the dirt is settled.

Talking about IT pocket, she said expectations from Wipro  are muted. HCL Tech and TCS are alright to hold because of lack of safety in other IT stocks.

9:20 am Leader: Biocon surges 4.4 percent on the back of  April-June quarter earnings.

The market has opened August series on a stable note. The Sensex is up 96.00 points at 19900.76 while the Nifty is up 30.45 points or 0.52% at 5937.95. About 208 shares have advanced, 61 shares declined, and 19 shares are unchanged.

The Indian rupee opened with a gain of 30 paise at 58.81 per dollar against 59.11 Thursday. Pramit Brahmbhatt, Alpari India said, "The rupee is likely to trade strong owing to the liquidity squeeze post the RBI measures and a weak dollar. However, a weak equity market and high dollar demand by oil importers may cap rupee gains. The range for the day is seen between 58.70-59.50/USD."

Meanwhile, Japan's Nikkei share average fell to a two-week low on Friday morning, as selling accelerated on the back of a firmer yen and disappointing quarterly earnings from the likes of Canon Inc and Advantest Corp.

The Nikkei fell 1.9 percent to 14,288.92 in mid-morning trade after slipping to a low of 14,236.46 earlier, the lowest level since July 9.

US markets eked out gains in a choppy session as investors digested the latest round of corporate earnings. Among earnings, Facebook surged nearly 30 percent after the social-networking giant posted stellar quarterly results and nearly 20 brokerages raised their price targets on the stock. The stock traded at its best level since last may and is about 10 percent from hitting its IPO price of USD 38.

The US 10-year treasury yields remained soft in trade.

Brent crude was hovering around 107 dollars a barrel. Nymex stood at USD 105. From precious metals space, gold was trading above USD 1330 an ounce.

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