India snubs Greece; Nifty ends above 8500, Sensex up 116 points

06 Jul 2015

03:30 pm Market closing: The market has ended with high returns as global markets are reeling under Greece crisis. The Nifty has closed above 8500 for first time since April 17. The 50-share index was up 37.25 points or 0.4 percent at 8522.15. The Sensex ended up 115.97 points or 0.4 percent at 28208.76. About 1784 shares have advanced, 1014 shares declined, and 185 shares are unchanged. 

Dr Reddy's Labs, Cipla, Lupin, Reliance and Hero MotoCorp are top gainers in the Sensex. Among the losers are Vedanta, Hindalco, NTPC, Infosys and Tata Steel.

03:10 pm RBI note: The Reserve Bank of India today fixed the reference rate of rupee at 63.5785 against the US dollar and at 70.2924 for the euro as against 63.3963 and 70.3319 respectively as on 3rd July 2015. According to an RBI statement, the exchange rates for the pound and the yen against the rupee were quoted at 99.1062 and 51.89 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-rupee rate would be based on this rate, the statement added.

03:00 pm Buzzing: There is some relief for  HCL Infosystems as the Supreme Court has stayed trial against the company in the National Rural Health Mission (NRHM) case.  NRHM scam was first being probed by the Central investigating agency (CBI), which had filed the first chargesheet in 2012. However, the second chargesheet in the November 2014 had named HCL Infosystems as the co-accused in a criminal conspiracy. Shares are up 6 percent now.

02:50 pm Nifty hits 8500: The market recovered all its early morning losses with the Sensex rising 21.23 points to 28114.02 and the Nifty climbing 9.70 points to 8494.60. About 1698 shares have advanced, 1035 shares declined, and 173 shares are unchanged on the BSE.

02:40 pm Gold Check: Gold prices advanced by Rs 20 to Rs 26,570 per ten grams at the bullion market on Monday on increased buying by jewellers amid a firm global trend. Silver, however, met with resistance and fell by Rs 200 to Rs 36,000 per kg.

Traders said pickup in buying by jewellers and a firm global trend on safe-haven demand after Greek voters have rejected more austerity demands from creditors, influenced gold prices.

Gold in Singapore, which normally sets price trend at the domestic front, surged 0.6 per cent to USD 1,175.45 an ounce. In the national capital, gold of 99.9 and 99.5 per cent purity advanced by Rs 20 each to Rs 26,570 and Rs 26,420 per ten grams, respectively. It had gained Rs 50 on Saturday.

Sovereign, however, continued to be traded at last level of Rs 23,300 per piece of eight gram.

02:30 pm Market Update: The Sensex gained 26.73 points at 28119.52 and the Nifty rose 13.70 points to 8498.60. About 1639 shares have advanced, 1068 shares declined, and 173 shares are unchanged on the BSE.

02:20 pm Vedanta under pressure: Life Insurance Corporation of India (LIC) is expected to give its final decision on the Vedanta- Cairn merger on July 11. LIC, a minority shareholder in Cairn India (having 9.06 percent stake), had sought a better offer as part of the planned merger.

The corporation had demanded a better swap ratio from Vedanta. According to the deal, each Cairn India shareholder would be offered an equity share of Vedanta Ltd apart from a 7.5 percent redeemable preference share of Rs 10 face value.

While LIC is doing its due diligence, sources say Vedanta may not change any contours of the deal, but it is open to rework the coupon rate.

02:10 pm Greece FM resigns: Greece's outspoken finance minister resigned on Monday, removing a major obstacle to any deal to keep Athens in the euro zone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout.

Yanis Varoufakis, a self-proclaimed "erratic Marxist" economist who infuriated euro zone partners with his unconventional style and hectoring lectures, had campaigned for Sunday's sweeping 'No' vote, accusing Greece' creditors of "terrorism".

"I was made aware of a certain 'preference' by some Eurogroup participants, and assorted 'partners', for my... 'absence' from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement," Varoufakis said in a statement.

02:00 pm Market Check
The market recovered smartly in afternoon trade after early morning sell off on account of Grexit fears. The broader markets rebounded with gains of more than half a percent.

The 30-share BSE Sensex dropped 82.99 points to 28009.80 and the 50-share NSE Nifty fell 18.60 points to 8466.30. However, the market breadth turned positive as about 1537 shares have advanced against 1137 shares declined on the Bombay Stock Exchange.

Samir Arora of Helios Capital says Greece developments will not have major impact on global markets in the short term. He remains bullish on Indian markets. Market corrections have given investors enough opportunities to buy, he believes.

Grexit fears triggered a sell-off in most global markets. However, the losses are contained. European markets declined 1-1.5 percent while peripheral markets dropped 1-2 percent. China, however, bucked the trend, rising 2.4 percent amid volatile trade.

2:00 pm Asian markets: Chinese stocks rose, as an unprecedented series of support measures unleashed by Beijing brought some relief to a market whose headlong slide over the past three weeks had raised fears about the stability of the world's second-biggest economy.

In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank.

1:50 pm Exclusive: Following the pan-India recall of Nestle Maggi noodles, consumers are getting caution and hence demand for noodles has fallen. Other noodle makers are now reducing their orders and mills have flour surplus to the tune of 1 million tonne. This is likely bring price cut by Rs 15-16 per kg in the northern areas and by Rs 18-19 in the south. 

1:40 pm Vedanta-Cairn merger: Life Insurance Corporation of India (LIC) is expected to give its final decision on the Vedanta- Cairn merger on July 11. LIC, a minority shareholder in Cairn India (having 9.06 percent stake), had sought a better offer as part of the planned merger.

The corporation had demanded a better swap ratio from Vedanta. According to the deal, each Cairn India shareholder would be offered an equity share of Vedanta Ltd apart from a 7.5 percent redeemable preference share of Rs 10 face value. While LIC is doing its due diligence, sources say Vedanta may not change any contours of the deal, but it is open to rework the coupon rate.

1:30 pm Monsoon: Below-normal rains over the last week have raised a question mark on Skymet's predictions for a 'bumper harvest in July'. Speaking to CNBC-TV18, G P Sharma, Vice President, Meteorology at Skymet Weather says below-normal rainfall in the past one week has consumed the 16 percent surplus the country had received in the month of June.

He expects the second half of July to be crucial for recovering the deficit rainfall, given monsoon is a developing situation and it does not remain active throughout the states simultaneously.

"I expect not only the second half of the month to be good but the next few days commencing today itself, the rainfall activity is going to pick up over most parts of the country," he says.

1:20 pm FII view:  The no vote in Greece referendum may result in risk-off trade which can impact equities globally, says Hans Goetti of Banque Internationale. He expects market to remain volatile for the next 48 hours.

On Greek finance minister Yanis Varoufakis stepping down from his post, he says the Greek FM was a polarising figure.

On the brighter side, he says risk of a contagion is not as high as it was a few years ago and a 'no' outcome does not immediately imply a Grexit.

1:10 pm Big buzzing: Shares of Tilaknagar Industries were locked in 20 percent upper circuit at Rs 21.20 per share intraday on Monday. The beverage company is outperforming market on a day when most indices are reeling under Greece crisis and possibility of a weak euro.

What is driving the stock is a buzz that Kishore Chhabria-controlled Allied Blenders & Distillers are in talks to acquire a controlling stake in the company.

According to the report, Chhabria and Amit Dahanukar, CMD of Tilaknagar Industries which owns the brand Mansion House brandy are likely to meet in London.

Bit by bit the market is gradually inching ahead with major support from pharma stocks. The Sensex is down 119.48 points or 0.4 percent at 27973.31 and the Nifty is down 28.80 points or 0.3 percent at 8456.10.

Dr Reddy's Labs, Cipla, Hero, Coal India and Bajaj Auto are top gainers while Vedanta, Tata Steel, Tata Motors, Hindalco and ICICI Bank are among laggards in the Sensex.

Asian stocks hit a six-month trough and the euro stumbled after a Greek vote against austerity measures endangered its future in the single currency and raised the risk of a full-blown crisis in the euro zone.

A rush from risk took MSCI's broadest index of Asia-Pacific shares outside Japan down 2.8 percent in the steepest daily drop in two years.

Japan's Nikkei shed 2.4 percent, while US equity futures dropped 1.3 percent. Early signs were the major European bourses would open down at least 2 percent. China's stock market tried to buck the trend following a salvo of rapid-fire support measures from Beijing over the weekend.

12:55 pm Market recovers: Equity benchmarks recovered from day's low after European markets did not react harshly to Greek referendum outcome.

The Sensex declined 110.57 points to 27982.22 and the Nifty fell 27.55 points to 8457.35. The market breadth also turned positive as about 1360 shares have advanced against 1157 shares declined on the Bombay Stock Exchange.

The BSE Midcap and Smallcap indices gained 0.3 percent.

12:45 pm Europe update: France's CAC and Germany's DAX fell 1.5 percent each after Greek vote against austerity measures endangered its future in the single currency and raised the risk of a full-blown crisis in the euro zone. Britain's FTSE dropped 0.8 percent.

12:30 pm Fitch on banks: Fitch Ratings' today said challenges for state-owned banks remain despite improving macro picture. "The performance of India's state bank sector remained challenged in FY15 (to end-March 2015), with continued pressure on asset quality and weak capital," according to Fitch Ratings' Indian Banks Report Card FY15.

Capital needs are likely to increase substantially each year up until FY19, it said adding there were few indications of a meaningful recovery in earnings in the short-term, though stressed assets are likely to have peaked and NPL (non-performing loan) accretion is easing.

"A difficult year for Indian banks in FY15 was characterised by weak credit demand despite a gradually improving macro picture. State banks in particular continued to face asset-quality pressures, falling profitability and weakened capitalisation on an adjusted basis," it said.

12:15 pm Interview: Maruti Suzuki is hopeful of meeting its 10 percent growth target for this year, R C Bhargava, Chairman of Maruti Suzuki told CNBC-Tv18.

He said reduced steel prices, weaker yen and various cost-reduction measures would boost operating margins

Bhargava said the domestic market is more hurt than the export market and the company may exceed its export target this year.

''Things are being difficult as the company faces resistance on the back of customers deferring purchases untill the monsoon is over,'' he says.

Even in the domestic market, rural is not as adversely affected as is urban market he says, adding that he expected higher growth in rural market compared to the urban market.

However, if overall demand weakens, it will affect the growth of the company and capacity utilisation, he said

On company's upcoming launches, Bhargava said: "The preliminary run up for S-Cross has already started and the launch is scheduled for next month".

12:00 pm Market Check
There is no panic selling on Dalal Street even as Grexit fears exist. Equity benchmarks recovered from day's low while the broader markets outperformed marginally.

The 30-share BSE Sensex declined 222.89 points to 27869.90 and the 50-share NSE Nifty fell 60.40 points to 8424.50. However, the BSE Midcap index dropped 0.2 percent and Smallcap gained 0.09 percent.

Experts believe Greek developments will have limited impact on India. India continues to remain one of favourite markets, said Hartmut Issel, head of equity and credit - Asia Pacific, UBS. He sees the NPL situation of banks improving in India.

In the latest news on Greece, Finance Minister Yanis Varoufakis has resigned even as the country gave a resounding "no" to the bailout package in a referendum. ECB governing council will meet today to discuss emergency loans to Greek banks.

Grexit fears triggered a sell-off in most Asian markets. China rally too lost steam, trimming gains to 0.6 percent from 4 percent. Hang Seng, Nikkei and Kospi declined 2-4 percent.

Oil marketing companies bucked the trend to trade in the green on the back of a sharp dip in Brent crude prices. HPCL, BPCL and IOC rallied 1.5-3 percent. Currently, Brent crude fell below USD 60 a barrel. Lower crude prices will aid margins for the oil marketing companies.

Cairn India and Vedanta saw sharp 2-5 percent cuts as CNBC-TV18 learnt that LIC and minority shareholders may give final decision on the Cairn-Vedanta deal by July 11. LIC believes Vedanta-Cairn merger is unfavourable to cairn shareholders.

11:50 am FII view: Standard Chartered is structurally bullish on Indian stocks on the back of reforms which will significantly lead to softer inflation and a positive environment for the market says Steve Brice, Chief Investment Strategist at Standard Chartered Bank. Speaking to CNBC-TV18, Brice says Sensex may see some short term weakness in the immediate future and there exists a good buying opportunity for the investors. However, talking about the prefered markets, he picks Europe and Japan in the global markets and China and Taiwan, within Asian markets.

11:40 am Buzzing: CLSA has initiated coverage on Pidilite with a sell rating and a target price of Rs 455 per share. Shares of the company fell 2 percent in early trade. The brokerage thinks adhesives and industrial chemicals manufacturer's earnings growth will decelerate from FY17.

"Margins likely to peak in FY16; slightly come off in FY17 and tax rates will rise by 2-3 ppts; as a result  earnings per share (EPS) growth is to slow down from 26 percent  in FY16 to 12 percent  in FY17," CLSA says in a report.

The brokerage warns that valuations are at all time high and slowdown in earnings growth may lead to a share price de-rating.

11:30 am Exclusive: The Goods and Services Tax Bill is unlikely to be taken up in the coming monsoon session of Parliament, reports CNBC-TV18, quoting government sources. The Congress members on the joint parliamentary panel on GST are likely to submit dissent notes against the panel's report to be submitted on July 17. The Congress members have demanded a 'pure' GST, and asked for the additional 1 percent tax to be dropped. The Congres members also want revenue neutral rate to be part of the GST Bill. It is learnt that the government is not keen to push GST Bill through without Congress support and may consider a compromise on the 1 percent additional tax.

11:10 am Greece updates: Greek finance minister Yanis Varoufakis has stepped down.

"Soon after the announcement of the referendum results, I was made aware of a certain preference by some Eurogroup participants, and assorted 'partners', for my… 'absence' from its meetings; an idea that the Prime Minister judged to be potentially helpful to him in reaching an agreement. For this reason I am leaving the Ministry of Finance today.

I consider it my duty to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday's referendum.

And I shall wear the creditors' loathing with pride," he stated in his resignation letter.

The market, though, has recovered from day's low is still struggling with heavy losses. The Sensex is down 252.01 points or 0.9 percent at 27840.78 and the Nifty is down 66.95 points or 0.8 percent at 8417.95. About 1010 shares have advanced, 1087 shares declined, and 125 shares are unchanged.

Dr Reddy's Labs, Cipla, Coal India and Bajaj Auto are top gainers in the Sensex. Vedanta, Tata Motors, Tata Steel, ICICI Bank and Hindalco are major laggards.

Oil marketing companies buck the trend to trade in the green on the back of a sharp dip in Brent crude prices, currently below 60 dollars per barrel. Lower crude prices will aid margins for the OMCs.

Meanwhile a resounding 'no' from the greeks triggers a sell-off in most asian markets. Policy support helps the shanghai market buck the trend marginally. Experts however say, the sell-off may be short-lived.

10:59 am Market Update: The Sensex plunged 252.01 points or 0.90 percent to 27840.78 and the Nifty slipped 66.95 points or 0.79 percent to 8417.95. About 1010 shares have advanced, 1087 shares declined, and 125 shares are unchanged on the BSE.

The BSE Midcap index declined 0.3 percent while the Smallcap index rebounded.

10:50 am CLSA on Pidilite: CLSA has initiated coverage on Pidilite with a sell rating and a target price of Rs 455 per share. The brokerage thinks adhesives and industrial chemicals manufacturer's earnings growth will decelerate from FY17.

"Margins likely to peak in FY16; slightly come off in FY17 and tax rates will rise by 2-3 ppts; as a result  earnings per share (EPS) growth is to slow down from 26 percent  in FY16 to 12 percent  in FY17," CLSA says in a report.

The brokerage warns that valuations are at all time high and slowdown in earnings growth may lead to a share price de-rating.

10:40 am FII on Greece: The dreaded Grexit was always an option, but prior to the referendum vote outcome it seemed like an unlikely one, says Willem H Buiter, global chief economist at Citi, sounding caution on the feared outcome. Democracy has overruled finance, he says ruefully.

Despite fears of a "Grexit," Greek Prime Minister Alexis Tsipras said the result was not a mandate to clash with Europe. Greek citizens, meanwhile, celebrated despite uncertainty ahead. Buiter says this sense of euphoria will last only for a day.

However, according to him, the immediate financial consequences of a potential Grexit will be manageable by the ECB.

To him, what is happening in China is more important for global markets than what is happening in Greece. But Greece has the potential to derail or even ruin European recovery. For further help from creditor nations, Greece must undertake serious structural reforms though it has repeated proven itself incapable of it, Buiter adds.

10:30 am Modi on BRICS tour: Prime Minister Narendra Modi will leave for a five-nation tour today to attend the BRICS summit in Russia and the Shanghai Cooperation Organisation. Modi will visit five Central Asian nations including Uzbekistan, Kazakhstan and Tajikistan to deepen strategic footprints and energy cooperation.

With focus on enhancing strategic, economic and energy ties, Modi is scheduled to travel from July 6 to 13 to five Central Asian countries and Russia where he will attend the summits of BRICS and SCO.

The Prime Minister's visit will start with Uzbekistan from where he will go to Kazakhstan on July 7. He will then travel to Russia on July 8, before moving to Turkmenistan on July 10, Kyrgyzstan on July 11 and Tajikistan on July 12.

Finance Minister Arun Jaitley will also be leaving on a four-day visit to Russia to participate in the inaugural meeting of the BRICS backed New Development Bank.

10:20 am Buzzing: Shares of Petronet LNG lost more than 2 percent intraday after the Reserve Bank of India has frozen foreign investment in the state-owned liquefied natural gas importer.

The Reserve Bank of India on Friday notified that the foreign shareholding through foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) in Petronet has reached the trigger limit.

Therefore, further purchases of equity shares of this company would be allowed only after obtaining prior approval of the Reserve Bank of India, it added.

For the quarter ended June 2015, foreign institutional investors' shareholding in the company increased to 22.80 percent from 22.64 percent in March quarter.

10:15 am GST Bill in focus: The Goods and Services Tax Bill is unlikely to be taken up in the coming monsoon session of Parliament, reports CNBC-TV18, quoting government sources.

The Congress members on the joint parliamentary panel on GST is likely to submit dissent notes against the panel's report to be submitted on July 17.

The Congress members have demanded a 'pure' GST, and asked for the additional 1 percent tax to be dropped. The Congres members also want revenue neutral rate to be part of the GST Bill.

It is learnt that the government is not keen to push GST Bill through without Congress support and may consider a compromise on the 1 percent additional tax.

Sources said the government was anyway not hopeful of the Land Bill being taken up in the monsoon session, but the latest development on the GST Bill has come as a nasty surprise.

10:10 am Market Expert: Standard Chartered is structurally bullish on Indian stocks on the back of reforms which will significantly lead to softer inflation and a positive environment for the market says Steve Brice, Chief Investment Strategist at Standard Chartered Bank.

Speaking to CNBC-TV18, Brice says Sensex may see some short term weakness in the immediate future and there exists a good buying opportunity for the investors.

10:05 am Stocks under pressure
Banking and financials stocks took a big hit today due to Greece concerns. ICICI Bank, HDFC, State Bank of India and Axis Bank fell 1-2 percent. HDFC Bank declined 0.75 percent.

Vedanta topped the selling list, falling nearly 4 percent. ITC, Tata Motors, L&T, ONGC, Tata Steel, Hindalco and BHEL are other prominent losers in trade, down 1-2 percent.

However, Dr Reddy's Labs, Cipla and Coal India bucked the trend, up 1-2 percent.

10:00 am Market Check
Equity benchmarks remained under pressure amid fears of Greece exit from eurozone after the debt-laden country voted for 'no' in the referendum last night. However, the broader markets recovered significantly from day's low.

The Sensex declined 177.82 points or 0.63 percent to 27914.97 and the Nifty declined 48.40 points or 0.57 percent to 8436.50. The BSE Midcap and Smallcap indices are flat after seeing more than 1 percent fall in early trade.

About 831 shares have advanced, 1011 shares declined, and 98 shares are unchanged on the Bombay Stock Exchange.

9:50 am Buzzing: Shares of Bharat Forge slipped 5 percent intraday reeling under Greece uncertainty exiting the Euro Union. The auto company derives 25 percent of revenues from export to Europe and hence will be impacted by a weaker euro.

Bank of America Merill Lynch has an underperform rating in the stock stating slower earnings growth and earnings downgrade are likely to hurt stock price. It expects 15 percent net profit growth in H1FY16, lower than 21.5 percent growth seen in FY16.

Another concern that is negative for the stock is decline in orders. Preliminary order for heavy truck in North America declined 26 percent in June 2015. This is the fourth consecutive month of decline and is being driven by a combination of lack of build slot availability as well as slowing transportation sector data.

9:40 am Big bull: Samir Arora, Founder & Fund Manager, Helios Capital remains bullish on Indian market stating market corrections have given investors enough opportunities to buy. He reiterates that investors no longer worried about fund moving to China from India. Greece Developments won't have major impact on global markets in short-term, he says in an interview to CNBC-TV18. He continues to maintain exposure to IT, private sector banks and consumption themes.

9:30 am Brent below USD 60/bbl: Jonathan Barratt, CEO & Chief Economist of Barrattsbulletin.Com, says the pressure on brent is on the back of not just a sentiment change in terms of what will happen with Greece going ahead, it is also because of fundamental factors such as nuclear deal with Iran, which has the potential to affect supply. He adds that the pressure on crude oil is likely to stay as the geopolitical factors will continue to persist for some time.

9:20 am Market update: Soon after a bumpy opening, the market recovers a bit. The Nifty reclaims 8400 but still struggling in red. The 50-share index is down 50.60 points or 0.6 percent at 8434.30. The Sensex is down 159.73 points or 0.6 percent at 27933.06.

Cipla, Dr Reddy's Labs and M&M are top gainers while Vedanta, Tata Steel, Hindalco, SBI and ICICI Bank are still down around 2 percent.

As Greece voted for 'no' in the referendum last night, Indian market opened with some sharp losses. The Sensex is down 287.36 points or 1 percent at 27805.43 and the Nifty is down 98.75 points or 1 percent at 8386.15. About 170 shares have advanced, 532 shares declined, and 64 shares are unchanged.

Metal stocks are reeling under pressure with losers like Tata Steel and Hindalco. SBI, ICICI Bank and Axis Bank are other laggards in the Sensex. Kotak Mahindra is up over 1 percent.

The Indian rupee slipped in the early trade. It has opened lower by 18 paise at 63.62 per dollar against Friday's closing value of 63.44 a dollar.

Agam Gupta of Standard Chartered said, "The Greece 'No' vote will keep the risk appetite low for some time and market players will look to cut down risk positions. The USD-INR is expected to trade in a range of 63.50-63.80/dollar today."

Investors will be keenly watching monsoon and earnings season while 8200 is now a firm bottom for Nifty. With weak IT earnings already getting priced in and monsoon progress fading after strong start, it may be a difficult climb for the bulls though.

Greeks voted decisively in favour of the "no" option- asking their government to turn down a proposal from its creditors that would have included more austerity reforms. The government will now try to bring its creditors back to the table, with renewed confidence that it has a mandate from its people to press for more concessions.

The first area for concern is Greek banks, which are expected to remain closed until at least Tuesday, after a week where Greeks have been unable to withdraw more than 60 euros at a time.

Among the other asset classes, the euro fell around 1 percent amid fears of a Grexit. Dollar index was around the 96-levels. Brent crude slipped to sub 60 dollars per barrel while Nymex crude was also over 3.5 percent lower Gold rose above 1170 dollars an ounce.