BSE Sensex falls 167 pts; banks shares slump on NPL woes

It was a weak start to the October series with the 50-share NSE benchmark falling 0.8 percent on Friday at close, largely dragged by rate sensitives. Even the week was quite bad for the market as both benchmarks shed all its previous week's gains owing to rate hike concerns and profit booking. The Sensex fell 166.58 points to close at 19727.27, and the Nifty lost 49.05 points to 5833.20, after breaking the consolidation phase in afternoon trade. It had been in a tight range around 5900 since Tuesday. Experts believe this rangebound trade will continue going ahead. In the near-term (3-6 months), there will be fairly sideways movement in the market , says Saurabh Mukherjea, head - equities, Ambit Capital. It is difficult to see very strong positive catalyst for India over the next 3-6 months, he adds. Meanwhile, Deven Choksey, MD, KR Choksey Shares & Securities expects the Nifty to trade in the range of 5750-6050 for the time being. Banks, metals, realty, capital goods and power stocks dragged the market down today; these sectoral indices fell between 1-2 percent. Banks shares have fallen since morning trade on concerns over their non-performing loans. India's largest lenders State Bank of India and ICICI Bank tumbled 2 percent each followed by HDFC Bank with 1.8 percent loss. Ratings agency Fitch said non-performing loans of Indian banks are expected to peak as late as March 2016, compared with its earlier estimate of the middle of current fiscal year that started in April. Shares of Bharti Airtel slipped 3 percent on reports that the telecom department may slap a fine of Rs 725 crore on the company for offering 3G services in the circles where it does not have spectrum. BHEL and Tata Steel were the biggest losers, falling 4 percent each. BHEL was down due to profit booking as it had rallied 13 percent in previous two sessions. However, BPCL outperformed, rising more than 6 percent on reports that a drilling campaign off Brazil's northeastern coast showed that an area controlled by Petrobras and the Indian companies (BPCL & Videocon) likely holds more than a billion barrels of oil. Videocon Industries gained 6 percent. Sun Pharma shares touched a record high of Rs 597.30 on the BSE, which closed with 1.5 percent gains. CLSA today advises buying the stock with a target price of Rs 675 apiece. The brokerage house sees benefit from Doxil (to treat cancer) shortage in the US and expect the company to make more than USD 150 million from this product in FY14. Meanwhile, the rupee closed at 62.51 against the US dollar, down 44 paise from previous close. It was strong since morning trade, but gains wiped out in afternoon trade.

3:45 pm Market closing: The market ended the day on a very weak note. the Sensex down 166.58 points or 0.84 percent down at 19727.27. The Nifty closed at 5833.20, down 49.05 points or 0.83 percent. About 1140 shares have advanced, 1200 shares declined, and 141 shares are unchanged. Hero MotoCorp, Sun Pharma , Coal India , TCS and Jindal Steel are the top gainers in the Sensex. Among the laggards are BHEL , Tata Steel , Bharti Airtel , Hindalco and ICICI Bank . 3:30 pm Update: Kirit S Parikh, former member of the Planning Commission says the committee formed to take a decision on the export parity will give its recommendations on Saturday. The government has extended by one month the time given to a panel headed by Kirit S Parikh to suggest a methodology for pricing of diesel and cooking fuel. ''…it is more a political decision (diesel pricing) than an economic decision. The kind of decisions the government has announced recently might have surprised people and yet the government has taken that. So, one does not know which way the government will go,'' he told CNBC-TV18 in an interview. 3:20 pm Market outlook: Though Raghuram Rajan's policy had send shockwaves across Dalal Street and dragged the indices lower, Chokani feels a rate cut at this point would have been an irresponsible step. In a war against soaring inflation, last week, Reserve Bank of India (RBI) hiked repo rate by 25 bps . Tackling inflation should be our priority and given the current macro-economic scenario, it would be wishful thinking to believe RBI will soften rates, he added. However, he agrees that in long-term, rates must be lower to kick-start a bull trend. Meanwhile, he highlighted that sectors which have benefitted from rupee's steep fall like pharma, IT and FMCG are in a bull market now. Also, cement and auto have been the best performing sectors. On the other hand, lack of policy revival on key sectors like power and oil & gas has been a major hurdle.

Traders continued to sell in the last trading hour of the day. The Sensex is down 164.19 points at 19729.66, and the Nifty slips 48.45 points at 5833.80. About 1064 shares have advanced, 1152 shares declined, and 150 shares are unchanged. BHEL topped the selling list, falling more than 4 percent on account of profit booking. The stock had rallied 13 percent in previous two sessions. Tata Steel is the second largest loser, slipping 3.6 percent. India's largest private sector lenders ICICI Bank and HDFC Bank lost more than 2 percent followed by its rival State Bank of India with 1.2 percent loss. Among others, HDFC, Hindustan Unilever , Bharti Airtel , L&T, Tata Motors and ONGC declined 1-2.5 percent. Meanwhile, Barclays has lowered India's FY14 GDP forecast for the current fiscal to 4.7 percent, saying the growth and fiscal health of the country are likely to remain under pressure, with 2014 election dynamics adding to uncertainties. India's economic growth had slumped to decade low of 5 percent in 2012-13. It had slid to 4.4 percent during April-June quarter, the lowest in past several years, pulled down by drop in mining and manufacturing output.

Equity benchmarks slipped further amid choppy trade. The Sensex is down 141.32 points at 19752.53, and the Nifty is down 38.35 points at 5843.90. BHEL topped the selling list, falling more than 4 percent on account of profit booking. The stock had rallied 13 percent in previous two sessions. Tata Steel is the second largest loser, slipping 3.6 percent. India's largest private sector lenders ICICI Bank and HDFC Bank lost more than 2 percent followed by its rival State Bank of India with 1.2 percent loss. Among others, HDFC, Hindustan Unilever , Bharti Airtel , L&T, Tata Motors and ONGC declined 1-2.5 percent.

The rupee extended losses, falling 32 paise or 0.5 percent to 62.39 against the US dollar. The currency has seen an appreciation of around 8-9 percent since the start of September. Jayesh Mehta of Bank of America expects it to be in the 62-64/USD range. 02:19pm The volatility continues in the market due to lack of trigger on Friday. In the currency space, the rupee erased all its gains, falling 1 paise to 62.08 against the dollar. The Sensex is down 46 points at 19847.85, and the Nifty is down 9.50 points at 5872.75. Looking at the way the September series has panned out and the movement in the last four trading sessions, Shardul Kulkarni of Angel Broking expects the market to correct going forward. From a technical perspective, there is a clear channel pattern breakdown which we see on the daily charts of the Nifty, he adds. "About 60-65 percent of the index heavyweights have already confirmed a reversal signal. So yes, we are bearish on the market, we are not bullish. We feel that the market is likely to move towards 5,500 or lower levels in October," Kulkarni explained. Oil & gas explorer Reliance Industries and healthcare major Sun Pharma gained 1.6 percent while Hero Motocorp is the top gainer, rising 2.7 percent.

2:00 pm Market outlook: According to Tirthankar Patnaik of Religare Capital Markets, earnings will get downgraded. He adds that until there is earnings support, markets would remain range bound. That range has been around 5500 to about 6100, with just temporary overshoots, he adds. He feels market may see some correction in second half of October. On specific sectors, Patnaik feels banks will see earnings downgrades going forward, IT and pharma on the other hand may see earnings upgrades. He tells investors to remain cautious while putting in fresh money into IT and pharma, though he is not worried about run-up in the two sectors. On domestic data, he expects IIP to stabilise at 1.5 percent level and FY14 GDP growth to be in range of 4.5-4.7 percent. According to him, July IIP number is not sustainable. 1:45 pm Another price hike in auto sector: Motorcycle manufacturer Bajaj Auto is likely to raise prices of its vehicles in the near term to offset the impact of high input costs and a weak rupee, its Managing Director Rajiv Bajaj said, reports Reuters. "It seems likely that we have to raise prices because commodity prices have gone up significantly, partly owing also to the way forex has moved," Bajaj told reporters on the sidelines of a business conference. 1:30 pm Downgrade: Barclays has lowered India's FY14 GDP forecast for the current fiscal to 4.7 percent, saying the growth and fiscal health of the country are likely to remain under pressure, with 2014 election dynamics adding to uncertainties, reports PTI. India's economic growth had slumped to decade low of 5 percent in 2012-13. It had slid to 4.4 percent during April-June quarter, the lowest in past several years, pulled down by drop in mining and manufacturing output. 1:20 pm Buzzer: Investors are buying shares of Havells India with the stock rising 3 percent in afternoon trade Friday. Bank of America Merrill Lynch says that the electrical equipment manufacturer is likely to see better second quarter earnings. The brokerage house sees increased visibility of expected 25 percent EPS growth in FY14 and 16 percent growth in FY15. It has a neutral view on the stock and raised target price by 3 percent to Rs 710.

The market continues to drag its feet in the afternoon trade on weakness in banks, metals and realty stocks. The Sensex is down 118.43 points or 0.60 percent at 19775.42, and the Nifty down 33.30 points or 0.57 percent at 5848.95. About 1021 shares have advanced, 1010 shares declined, and 139 shares are unchanged. Stock specifically, pharma pack is buzzing in trade. Wockhardt is locked in lower circuit as reports indicate that the US FDA has made about 16 observations in form 483 related to the company's Chikalthana plant. Dr Reddy's is under pressure after losing the Lunesta patent case in the US court of appeals. Meanwhile, Mylan received conditional approval from the US to acquire Agila from Strides Arcolab . The rupee rises against the dollar on expectations of improved balance of payments data on Monday. Dollar sales by exporters are also lending support. Infact the rupee has outperformed all emerging market currencies this week. Bond prices though are falling ahead of the Rs 14,000 crore auction.

Videocon Industries shares rallied 7 percent after a drilling campaign off Brazil's northeastern coast showed that an area controlled by Petrobras and the Indian companies ( BPCL and Videocon) likely holds more than a billion barrels of oil. BPCL surged 9 percent. MRF , Aurobindo Pharma , Dish TV and Britannia gained 3-5 percent while among smallcaps, ABG Shipyard , Suprajit Engineering , Shree Ganesh Jewellery, Kewal Kiran and Texmaco Infrastructure jumped 7-13 percent.

Shares of Bharti Airtel lost 1.7 percent on reports that the telecom department may impose an additional fine of Rs 204 crore on the company for offering 3G services, through intra-circle roaming pacts in the circles where it does not have spectrum. Wockhardt is locked in 5 percent lower circuit as reports indicated that the USFDA has made about 16 observations in form 483 related to the company's Chikalthana plant. The observations include unhygienic toilets and mold growing in the storage area of the plant. Also Read - Mkt's climb to get tough, FY14 Sensex EPS to fall: Religare 12:35pm Market Expert The market is sideways for the fourth consecutive session today. Saurabh Mukherjea of Ambit Capital is cautious on the market and expects sideways trading for 3-6 months. He does not see market touching new life-time highs soon. Meanwhile, the rupee rose against the dollar on expectations of improved balance of payments data on Monday. Dollar sales by exporters is also lending support. Infact, the rupee has outperformed all emerging market currencies this week. The rupee gained 21 paise to 61.85 per dollar.

The market is sideways for the fourth consecutive session today. Saurabh Mukherjea of Ambit Capital is cautious on the market and expects sideways trading for 3-6 months. He does not see market touching new life-time highs soon. Meanwhile, the rupee rose against the dollar on expectations of improved balance of payments data on Monday. Dollar sales by exporters is also lending support. Infact, the rupee has outperformed all emerging market currencies this week. The rupee gained 21 paise to 61.85 per dollar.

12:18pm The market remained under pressure in noon trade, but the broader markets outperformed equity benchmarks with the BSE Midcap and Smallcap indices rising 0.4-0.7 percent. The Sensex is down 105.94 points at 19787.91, and the Nifty is down 25.70 points at 5856.55. Advancing shares outnumbered declining ones by 1065 to 800 on the Bombay Stock Exchange. Deven Choksey, MD, KR Choksey Shares & Securities does not see fear of a major sell-off by foreign investors unless rupee depreciates significantly. According to him, the Nifty is likely to trade in the range of 5750-6050 for the time being. ICICI Bank is the biggest loser in the Sensex, falling 2.6 percent followed by BHEL with 2.3 percent loss. HDFC Bank , HDFC, Hindustan Unilever , Bharti Airtel, State Bank of India and Tata Steel lost 1-2 percent. However, Hero MotoCorp and Sun Pharma are major gainers, rising 1.5-2 percent. Reliance Industries and TCS gained 0.6 percent each.

12:00 am Stock view: SP Tulsian of sptulsian.com is not too enthused on shipping stocks upmoves because of surge in Dry Baltic Index. "Generally you will not find the rally sustainable in those stocks. If somebody can keep a view of couple of months, the stock may see a price target of Rs 350 on the basis of financial performance. I am not going by Q1 numbers because the performance of a shipbuilder is never linear," he said in an interview to CNBC-TV18. 11:45 am Update: Generic drugmaker Mylan Inc has won US antitrust approval to buy Agila, a unit of India's Strides Arcolab , subject to divesting some products, the Federal Trade Commission said on Thursday, reports Reuters. The cabinet approved the deal on September 3. The companies will have to divest assets needed to make 11 generic injectable drugs as a condition of approving the deal, the FTC said. The deal for Agila, which is based in Bangalore, was valued at USD 1.6 billion when it was announced in February. 11:30 am FII view:  Bhuvnesh Singh, Barclays Capital says that macro concerns will impact few parts of the market, largely financials, industrials and materials, he says. But on the other hand, rupee depreciation will help export-oriented sectors like IT, healthcare or import parity sectors like petrochemicals and energy, which could show an upmove, he adds. According to him, FIIs are significantly overweight on India. One reason behind that is India's correction has been largely on the back of currency over the past few months, he says. Second is the reasonable diversity between sectors, he adds. "All companies listed in India are not only oriented to Indian domestic economy, but have a significant part of the market which is more leveraged to external economy," Singh told CNBC-TV18. 11:20 am Buzzer: Shares of Bharti Airtel slipped around 3 percent in early morning trade on Friday on reports that the telecom department may slap a fine of Rs 725 crore on the company for offering 3G services in the circles where it does not have spectrum. Bharti entered into intra-circle roaming pacts with other operators and used 3G airwaves without paying spectrum usage charges. Last year, the department of telecom (DoT) had issued a notice to Bharti Airtel asking it to stop offering 3G service through intra-circle roaming pacts with other operators. It had imposed a penalty of Rs 350 crore (Rs 50 crore for each circle). DoT had asked the operator to stop 3G services in seven circles,

Selling pressure drags down the market pulling Nifty way below the 5900-mark. The Nifty is down 16.35 points at 5865.90. The Sensex is 5865.90, down 66.03 points. About 908 shares have advanced, 661 shares declined, and 115 shares are unchanged. ICICI Bank (down 3 percent), BHEL (down 2.3 percent), Bharti Airtel and HDFC twins are among the losers in the Sensex.  Meanwhile, Hero MotoCorp, Sun Pharma , Sesa Goa , ONGC and Bajaj Auto are leading the Sensex. Asian markets are mildly higher tracking the US markets. However a firmer yen and Japan's August inflation reading weighs on Nikkei.The dollar held on to modest overnight gains but on to track the end the week flat as uncertainty over the debt negotiations looms. Commodities saw gold headed for its fifth straight weekly decline. Brent crude was stable between USD 108 -109/bbl.

Bharti Airtel shares lost 1.8 percent on reports that Department of Telecommunication is likely to impose an additional penalty of Rs 204 crore for offering 3G services in seven service areas, through intra-circle roaming pacts where it does not have required spectrum. Dr Reddys Labs (DRL) declined nearly 1 percent after the company lost the Lunesta patent case in the US court of appeals. DRL hadn't launched the drug, so its more of a lost opportunity for the company. Wipro replaced Reliance Infrastructure in the Nifty with effect from today. Wipro will have nearly 1.8 percent weightage in index. Both stocks gained around 0.5 percent. Wockhardt is locked at 5 percent lower circuit as reports indicated that the USFDA also found soiled uniforms and mold growing in raw material storage area at Wockhardt's Chikalthana plant.

Shares in Bharat Petroleum Corporation (up 9 percent) and Videocon Industries (up 4.5 percent) gained after a drilling campaign off Brazil's northeastern coast showed that an area controlled by Petrobras and the Indian companies likely holds more than a billion barrels of oil. Petroleo Brasileiro SA, as Brazil's state-run oil company is formally known, and IBV Brasil, a 50-50 joint venture between BPCL and Videocon Industries, have determined the SEAL-11 exploration block contains very large amounts of high-quality light crude oil and natural gas, according to five government and industry sources with direct knowledge of the drilling results, reported Reuters.

Omaxe shares slipped 3 percent on the day of its offer for sale that opened on a separate window provided by exchanges to sale shares. Constellation Capital, Kautilya Monetary Services and S A Finvest, which are the part of promoter group, will sell up to 75 lakh shares, 12.5 lakh and 65 equity shares (representing 8.79 percent of the total paid up capital) through offer for sale (OFS). The floor price for the offer is fixed at Rs 135 per share. The selling of shares via OFS route is to comply with minimum public shareholding norms. SEBI mandated that every private sector listed company has to have minimum 25 percent public shareholding in the company. Post this OFS, the stake of Constellation Capital, Kautilya Monetary Services and S A Finvest will be reduced to 13.27 percent, 17.7 percent and 14.17 percent from the current 17.6 percent, 18.42 percent and 17.92 percent, respectively.

10:00am Equity benchmarks are under pressure amid volatility in morning trade, weighed down by financials, telecom and FMCG stocks. State-run capital goods major BHEL fell 1.76 percent on profit booking after rising more than 13 percent in previous two sessions. The Sensex is down 52.45 points at 19841.40, and the Nifty is down 15.25 points at 5867. Investors should play the differential between stocks to make money in the current market, says Bhuvnesh Singh, Barclays Capital. Macro concerns will impact few parts of the market, largely financials, industrials and materials, he says. But on the other hand, rupee depreciation will help export-oriented sectors like IT, healthcare or import parity sectors like petrochemicals and energy, which could show an upmove, he adds. According to him, FIIs are significantly overweight on India. One reason behind that is India's correction has been largely on the back of currency over the past few months, he says. Second is the reasonable diversity between sectors, he adds. "All companies listed in India are not only oriented to Indian domestic economy, but have a significant part of the market which is more leveraged to external economy," Singh told CNBC-TV18. Though there is a risk that the Indian markets might not go anywhere, remain in consolidation phase or actually decline going forward, he says. There is also reasonable risk coming because of currency, he adds. Because of which FIIs overweight position on India is a risk for the market, he explains. Country's largest private sector lenders ICICI Bank and HDFC Bank lost more than 2 percent on the first day of October series while their rival State Bank of India declined 0.7 percent. Housing finance major HDFC slipped 1.5 percent. Meanwhile, the rupee gained strength today, rising above the 62 level. It rose 15 paise to 61.92 against the US dollar.

10:00 am Brokerage view: HSBC has started coverage on Asian Paints with an "overweight" rating and a price target of Rs 600, implying a 25 percent upside from current levels. India's paints market is set to double every 6-7 years by volume and market leader Asian Paints is well placed to leverage growth, HSBC said in a note on Friday. 9:45 am Update: Australia's new government has ordered 47 major coal and coal seam gas projects to seek national environmental approval, including the controversial Kevin's Corner project proposed by the country's richest person Gina Rinehart, reports Reuters. The projects include Adani Enterprises . Developments referred for assessment include the A$4.5 billion Carmichael Coal and Rail Project, proposed by billionaire Gautam Adani and Rinehart's Hancock Prospecting Ltd's Kevin's Corner Project. Environment Minister Greg Hunt said they needed to be assessed for their impact on water supplies, adding the move showed the new conservative government was providing certainty for the mining industry and protecting environmental standards. 9:30 am  FII View: Chris Wood of CLSA feels that after months of worrying about the threat of normalisation of US monetary policy, investors have become a little less neurotic about the threat posed by tapering. "However, uncertainty on the direction of US monetary policy lingers with Obama still mum on his nominee for Fed chairmanship. The most important issue now facing world financial markets remains the decision on who will replace Ben Bernanke," he warns. 9:20 am Movers and losers: Bajaj Auto , Bharti Airtel , HUL , Sun Pharma and Wipro are lead gainers in the Sensex. ABG Shipyard surges another 11 percent on the BSE. On the losing side are Jindal Steel , BHEL , Coal India , Dr Reddy's Lab and Tata Power .

The market kick-started October F&O series in the green territory. The Nifty is up 23.30 points at 5905.55 while the Sensex is up 52.62 points at 19946.47, and the About 211 shares have advanced, 51 shares declined, and 18 shares are unchanged. The rupee started a day below the 62-mark on Friday at 61.89 per dollar, up 18 paise from previous close. Himanshu Arora of Religare feels the rupee may trade slightly strong against the dollar on steps taken by RBI to assure liquidity in the market. "Moreover sentiment for the rupee remains positive as foreign banks are currently selling dollars, instead of rolling-on their long outstanding positions. Strong Asian currencies are also providing positive cues," he adds. According to him, the range for the day is seen between 61.70-62.20/USD. In the global markets front, US closed modestly higher in a choppy trading session on Thursday with major averages avoiding a six-day losing streak. European markets close mixed weighed down by political uncertainty in Italy. Asian markets opened on a cautious note today morning. In Japan, the nationwide core inflation rose an annual 0.8 percent, its biggest gain since November 2008. Data is likely to support Prime Minister Abe's decision to raise the consumption sales tax, but investors remain skeptical that the government can reach its two percent inflation target within two years. Oil prices firmed a bit, as bargain-hunting by traders and relief over geopolitics helped provide a modest boost to crude after days of selling. From precious metals space, gold prices inched lower as the dollar held firm after weekly jobless claims data showed an improving US labor market, which could support a wind-down of the federal reserve's bond buying later this year.