Nifty below 8550, Sensex skids 238 points; Sun Pharma dips 15%

21 Jul 2015

03:30pm Market closing: After a choppy day, the market ended with heavy losses. The Sensex was down 237.98 points or 0.8 percent at 28182.14, and the Nifty slipped 74 points or 0.9 percent at 8529.45. About 966 shares advanced, 1863 shares declined, and 138 shares were unchanged.

Infosys was star of the day with 11 percent gains at end. Bharti, Wipro, Bajaj Auto and Hero MotoCorp are top gainers. Sun Pharma tanks 15 percent while Lupin, Vedanta, ONGC and Tata Steel were among major laggards.

03:00 pm Market Update: The Sensex fell 254.60 points or 0.90 percent to 28165.52 and the Nifty dropped 72.70 points or 0.85 percent to 8530.75.

About 908 shares have advanced, 1857 shares declined, and 139 shares are unchanged on the BSE.

02:30 pm Earnings: FMCG major Hindustan Unilever (HUL) disappointed street on Tuesday with the June quarter net profit growing 0.2 percent year-on-year to Rs 1,059 crore. The growth was impacted by one-time profit on sale of investments in the base quarter, higher tax rate and lower other income.

Total income from operations grew by 5 percent to Rs 8,105 crore in the quarter ended June compared to Rs 7,716.34 crore in the same quarter last year. Other income nearly halved to Rs 108.61 crore from Rs 202.11 crore during the same period.

The bottomline and topline was lower than analyst estimates, volume growth was in line and operational performance beat expectations. According to a CNBC-TV18 poll, profit was estimated at Rs 1,110 crore on revenue of Rs 8,323 crore for the quarter.

"The growth in the quarter was impacted by the phasing out of excise duty incentives and price de-growth, as the benefit of lower commodity costs was passed on to consumers," said the company in its filing.

During the quarter, the domestic consumer business grew 5 percent, with 6 percent underlying volume growth (against forecast of 5-7 percent range and 5 percent reported in the year-ago period).

Operating profit grew by 14.35 percent year-on-year to Rs 1,506 crore and margin expanded by 150 basis points to 18.6 percent in first quarter of FY16, which were ahead of estimates of Rs 1,495 crore and 17.9 percent, respectively.

Harish Manwani, Chairman said in a subdued market environment, the business delivered another quarter of healthy volume led growth and strong improvement in operating margin.

02:00 pm Market Check
The market is sinking in red after HUL posted disappointing April-June quarter results. The FMCG's net profit grew 0.2 percent year-on-year to Rs 1,059 crore with 6 percent underlying volume growth. The stock is down 2 percent.

The Sensex is down 66.10 points at 28354.02 and the Nifty is down 23.25 points at 8580.20. About 1064 shares have advanced, 1654 shares declined, and 141 shares are unchanged.

Infosys, Bharti, Wipro, BHEL and Bajaj Auto are top gainers while Sun Pharma, Lupin, Vedanta, Tata Steel and Cipla.

Gold stabilised holding just above a five-year low, but with investors still clinging to views of further price falls a day after the metal lost 4 percent.

Reflecting losing interest in gold, holdings in top gold fund SPDR Gold Trust fell to the lowest since 2008. Bullion, after falling on Monday by the most since September 2013, is trading just above the critical USD 1,100 an ounce support level, another breach of which could lead to another selloff, traders and analysts say.

1:30 pm Tax expert: The one percent tax on the inter-state supplies of goods, and exclusion of certain items from the Good and Services Tax (GST) are self defeating and will undermine the effectiveness of GST, says Satya Poddar, Partner-Tax & Regulatory Services, EY ''The one percent tax itself, is a punishment for trading with your own brothers and sisters within the confederation of India,'' Poddar tells CNBC-TV18. ''So if you buy goods locally then the one percent of tax applies but if you import the goods one percent tax does not apply; that will hurt industry's competitive position in the local markets as well as global markets,'' he says.

The market continues to consolidate as technology stocks rally. The Sensex is down 21.02 points at 28399.10, and the Nifty is down 2.90 points at 8600.55. About 1096 shares have advanced, 1461 shares declined, and 148 shares are unchanged.

Infosys, Bharti Airtel, Wipro, Bajaj Auto and Hindalco are top gainers in the Sensex. Among the losers are Sun Pharma, Lupin, Vedanta, Tata Steel and HUL. Dragged by Sun Pharma, Healthcare index is down over 5 percent.

As Parliament Monsoon session begins, Prime Minister Narendra Modi hopes that it will be fruitful and that promises made by "some political parties" during the last session to allow work on priority will be kept. Underlining that the all-party meeting yesterday was held in a "good atmposphere", he said the government's effort has always been to take collective decisions to push the country ahead in the path of development. "In the last session, some political parties had given the assurance that in the next session, some work will be done on priority.

''I am hopeful that good decisions and more decisions will be taken in this session," he told reporters in the Parliament complex on the first day of the Monsoon Session.

12:40 pm Earnings Poll: Hindustan Unilever (HUL) first quarter net profit is seen rising 5.1 percent year-on-year to Rs 1,110 crore, according to the average of estimates of analysts polled by CNBC-TV18. Net profit growth may not match operating profit growth due to higher taxes and lower other income.

Overall, analysts expect another decent quarter for the FMCG major. Revenue in the quarter ended June may grow 7.9 percent Y-o-Y to Rs 8,323 crore amid consumer sector growth at 10-year low.

Volume growth may be on the higher side of 5-7 percent range.

Gross margin may expand considerably around 180-250 basis points on the back of lower raw material costs, which in turn may boost operating profit margin. Operating profit is seen rising 13.5 percent year-on-year to Rs 1,495 crore and margin may expand 80 basis points to 17.9 percent in the quarter gone by.

Analysts feel higher advertising spends may marginally counter gross margin expansion. Fourth quarter saw 150 basis points hike in ad-spends/revenues ratio at 13.6 percent.

12:20 pm Market Expert: This is not a market to short, says Siddharth Bhamre of Angel Broking and is willing to go long on stocks. Speaking to CNBC-TV18, he said it is advisable to go long despite warnings of global weakness and earnings fears because there is enough evidence of strong hands continuing in the market.

Good news on gold and crude front will also not allow unwinding of this market.

12:00 pm Market Check
The market continued to consolidate, getting support from Infosys though HUL and Sun Pharma dragged. The Sensex gained 10.20 points at 28430.32 and the Nifty rose 9.30 points to 8612.75. About 1081 shares have advanced, 1393 shares declined, and 143 shares are unchanged on the BSE.

Infosys surged almost 10 percent after stellar Q1 earnings. Dollar revenue grew by 4.5 percent, beating street estimates. The company raised its FY16 revenue guidance to 7.2-9.2 percent in dollar terms and Vishal Sikka, CEO & MD said Infosys is on track for USD 20 billion revenue target by 2020.

Capping gains for the market is Sun Pharma, down more than 13 percent. Company raised the red flag, saying consolidated revenue could remain flat or show decline this fiscal on Ranbaxy integration issues.

Bharti Airtel gained 5 percent after company entered into exclusive agreement with Orange to explore the sale of Airtel's 4 African subsidiaries. Bank of America Merrill Lynch sees this as a directional positive and added that a successful exit out of the Africa market may lead to a re-rating of stock.

HDFC Bank posted 20.7 percent rise in profit to Rs 2,696 crore, in line with street estimates. Net interest income beat street to rise 23.5 percent. The stock took a mild knock as net NPAs rose 14 percent and gross NPAs 6.5 percent.

HUL extended fall, down nearly 3 percent ahead of earnings. Among others, Lupin, ITC, ONGC, Dr Reddy's Labs, Vedanta, Tata Steel and GAIL lost 1-3.5 percent. However, Wipro, Bajaj Auto, Hinalco and Hero Motocorp gained 1-3 percent.

Globally, Asian markets rose with Shanghai index rising over 1 percent.

11:55 am Loser: Shares of the country's largest pharmaceuticals firm by sales and market capitalization, Sun Pharma , fell about 15 percent in early trade as analysts rushed to temper down their earnings expectations from the company after it warned last night its profit and revenue growth this year may be lower than estimates.

The Dilip Shanghvi-run company said yesterday its revenue in fiscal 2016 would be flat at best as it incurs further one-time costs to fix manufacturing problems at Ranbaxy Laboratories, which it bought last year. The company also said that issues at its own Halol plant, which was served an observation notice from the US FDA, would take "some more time" to be remedied. It added that it had decided to shed some low-margin businesses that it believes don't hold long-term value.

11:45 am Earnings: HDFC Bank, the country's second largest private sector lender, matched street expectations with the first quarter net profit rising 20.7 percent year-on-year to Rs 2,696 crore.

Net interest income, the difference between interest earned and interest expended, grew by 23.5 percent to Rs 6,389 crore in the quarter ended June compared to Rs 5,171.6 crore in the year-ago period.

11:30 am Buzzing: Tinplate Company of India surged more than 17 percent intraday Tuesday. The company has declared better numbers in its first quarter of FY2016. Net profit of the company rose 115 percent at Rs 22.8 crore against Rs 10.6 crore, in a year ago period. The company has reported exceptional gain of Rs 792.88 crore by way of selling its entire stake in Rujuvalika Investments. Total income also increased by 24.5 percent at Rs 229 crore versus Rs 184 crore.

The Sensex is up 47.07 points at 28467.19, and the Nifty is up 20.10 points at 8623.55. About 1119 shares have advanced, 1096 shares declined, and 122 shares are unchanged.

Infosys is still up 10 percent, while Bharti Airtel, Wipro, Hero and SBI are top gainers in the Sensex. Among the losers are Sun Pharma, Vedanta, Tata Steel, Hindalco and HUL.

Besides Infosys, HDFC Bank, Asian Paints, HUL, Cairn India and Idea will reporting April-June quarter today.

Globally, the commodity rout continues capping gains for Asian markets. Spot gold held near its lowest level in more than five years with Brent crude around 10 cents lower at USD 56.55 per barrel.

10:55 am Market Update: The Sensex rose 45.66 points to 28465.78 and the Nifty gained 17.60 points at 8621.05. About 1139 shares have advanced, 1028 shares declined, and 114 shares are unchanged on the BSE.

10:40 am Clean cold technology: A UK-based company has plans to roll out clean cold technology in India to move perishable goods efficiently from producer to consumer and help the country tackle its food crisis by reducing food loss.

Dearman is working on developing new technologies to achieve movement of perishable produce through an integrated chain of refrigerated transport and refrigerated storage, broadly referred to as a cold chain.

"At present, India has approximately 31 million tonnes of cold chain capacity, which is vast, but only approximately 9,000 refrigerated vehicles," said Dearman CEO Toby Peters.

"That imbalance has to be rectified because when looking to feed a population, to maximise the economic return for producers and to supply vital medicines, the objective is to move goods efficiently from production to consumer, and that requires a network of vehicles," he said.

10:20 am Oil Update: Oil prices edged lower today, dragged down by a firm dollar and ample supply of both crude and refined products.

Expectations of more Iranian supply following a nuclear deal and concerns that economic worries in China and Europe will weigh on demand have put pressure on oil prices this month.

Brent September crude was 14 cents lower at USD 56.51 a barrel, after settling 45 cents lower on Monday. The contract has shed about USD 7 so far this month.

US August crude, set to expire on Tuesday, fell 19 cents to 49.96 a barrel. The front-month contract fell below USD 50 a barrel on Monday for the first time since April and is down some USD 9 a barrel for the month.

10:00 am Market Check
The market remained marginally higher amid consolidation. The Sensex gained 92.65 points at 28512.77 and the Nifty rose 29.35 points to 8632.80. About 1112 shares have advanced, 905 shares declined, and 124 shares are unchanged on the BSE.

The monsoon session of Parliament has begun today. Important legislations like the land bill, the GST Bill and the real estate bill may be discussed.

Infosys rallied 10 percent, reaching sixth position in terms of market capitalisation after reporting healthy revenue and volume growth in Q1FY16.

Sun Pharma crashed 12 percent as slew of brokerages cut price target and earnings per share forecast after the company issued profit warning for FY16.

Ahead of earnings, Hindustan Unilever extended losses, down 1.8 percent while HDFC Bank rose further, up 1 percent.

Bharti Airtel rallied 4 percent after signing exclusive agreement with Orange for 4 Airtel subsidiaries in Africa. Orange may acquire company's arms in Burkina Faso, Chad, Congo, Sierra Leone.

Wipro rallied 3 percent while ITC, Lupin, ONGC, Vedanta, GAIL and Tata Steel lost 1-2 percent.

9:55 am BRICS Bank: Officials from the world's largest emerging nations launched the New Development Bank (NDB), the second of two new policy banks heavily backed by Beijing that are being pitched as alternatives to existing institutions such as the World Bank.

Also known as the BRICS bank, it follows soon after the establishment of the China-led Asian Investment Infrastructure Bank (AIIB). The new bank will fund infrastructure and development projects in BRICS countries - Brazil, Russia, India, China and South Africa.

The ceremony concludes a lengthy wait since the NDB was first proposed in 2012. Disagreements over the bank's funding, management and headquarters had slowed its launch.

9:45 am Market check: The Sensex is up 40.37 points at 28460.49, and the Nifty is up 11.30 points at 8614.75. About 937 shares have advanced, 755 shares declined, and 111 shares are unchanged.

Infosys is up 8 percent while Sun Pharma is down 11 percent.

9:30 am Trading tips: This is not a market to short, says Siddharth Bhamre of Angel Broking and is willing to go long on stocks. Speaking to CNBC-TV18, he said it is advisable to go long despite warnings of global weakness and earnings fears because there is enough evidence of strong hands continuing in the market. Good news on gold and crude front will also not allow unwinding of this market.

He is short on large public sector banks and advises shorting SBI to short-term traders.

He is also short on Hindustan Unilever. Since corrections have been frequent in this stock, Bhamre advises traders to short it on rise.

9:25 am Market check: The market has slipped into red. The Sensex is down 51.61 points at 28368.51, and the Nifty is down 13.40 points at 8590.05. About 695 shares have advanced, 574 shares declined, and 90 shares are unchanged.

Sun Pharma is down 14 percent while Vedanta, Tata Motors, ONGC and Axis Bank are major losers in the Sensex. Infosys is still up 5 percent, Bharti, Coal India, Wipro and HDFC are top gainers.

The market has opened in green territory. The Sensex is up 53.50 points at 28473.62, and the Nifty is up 20.65 points at 8624.10. About 538 shares have advanced, 201 shares declined, and 85 shares are unchanged.

Infosys is up 8 percent after it announced stellar Q1 earnings. Sun Pharma is down 14 percent after it issued earnings warnings. Bharti, Wipro, HDFC and TCS are other top gainers in the Sensex. Among the losers are Vedanta, Lupin, Axis Bank and Tata Steel.
The Indian rupee has opened lower at 63.70 per dollar against previous day's closing value of 63.66 a dollar. Ashutosh Raina of HDFC Bank said, "The somewhat stable situation in Greece and chances of a Fed rate hike sent dollar soaring with Gold hitting a 5-year low."

The dollar reached its highest in three months against a basket of currencies on a rise in US bond yields as traders built bets the Federal Reserve would raise interest rates later this year.

Wall Street finished little changed on Monday as a better-than-expected start to corporate earnings season boosted investor confidence, but gains were curbed by a drop in commodities.

Gold prices plunged to their lowest in more than five years while copper prices hit their lowest in nearly two weeks. Oil prices fell on signs of a growing glut in refined products to pull the S&P energy index down 1.3 percent.

Asian stocks traded mixed early Tuesday, as traders kept a wary eye on the drop in commodity prices.