Nifty ends above 8000, Sensex rises 196 points; BHEL, L&T laggards

22 Nov 2016

3:30 pm Market closes: The Sensex ended up 195.64 points or 0.7 percent at 25960.78 and the Nifty was up 73.20 points or 0.9 percent at 8002.30. About 1475 shares advanced, 1083 shares declined and 189 shares were unchanged.

Maruti, Bajaj Auto, HUL, Hero MotoCorp and M&M were gainers while BHEL, L&T, GAIL, NTPC and Dr Reddy's Labs.

2:57 pm Market Update: Equity benchmarks regained strength in afternoon trade. The Sensex was up 198.22 points at 25963.36 and the Nifty gained 72.15 points at 8001.25.

The market breadth also turned positive as about 1310 shares advanced against 1183 declining shares on the BSE.

2:55 pm Fund raising: Mining conglomerate Vedanta said it will raise up to Rs 300 crore through private placement of non-convertible debentures (NCDs).

A committee constituted by Vedanta's Board today approved offering for subscription, on a private placement basis, up to 3,000 secured, rated, listed, redeemable, NCDs of face value Rs 10 lakh each aggregating up to Rs 300 crore, it said in a regulatory filing.

The NCDs will be listed on the BSE and will mature on April 22, 2020, it added.

In a separate filing, the company said its CFO GR Arun Kumar has been appointed whole-time director (Additional Director) on the Board for a period of three years with effect from November 22, 2016, subject to approval of the members at the next general meeting.

2:43 pm Earnings: Mumbai-based road developer IRB Infrastructure said consolidated profit in July-September quarter declined 5 percent to Rs 142.2 crore compared with Rs 149.67 crore in year-ago period. Higher finance cost dented bottomline.

Revenue during the quarter increased 12.3 percent year-on-year to Rs 1,290.6 crore while other income was up by 11 percent at Rs 33.63 crore.

Earnings except margin missed analysts' expectations. Profit was estimated at Rs 161 crore on revenue of Rs 1,372 crore and EBITDA was expected at Rs 751 crore with margin at 54.7 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 17.2 percent year-on-year to Rs 709 crore and margin expanded by 220 basis points to 54.9 percent in the quarter ended September 2016.

Finance cost jumped 41.6 percent to Rs 339.6 crore in Q2 on yearly basis.

2:30 pm Market Expert: Anish Damania of IDFC says demonetisation is expected to be positive for inflation, bond yields and rupee, but it would have a negative impact on GDP and money supply.

Also given the high correlation of sales with M3, sales are expected to be weak in Q3 and receivables are expected to rise, he feels.

Unorganised sectors where business is largely transacted in cash and organised sectors with high cash transactions (real estate) and/or retail facing will see the highest impact in the short term, according to him.

Given the near term uncertainty on how liquidity will flow into the system, Damania cut his Nifty target tactically to 8100.

2:23 pm Crop yields: India's crop yields are lower than those in the US, Europe and China and the government is implementing several schemes to address this issue, Agriculture Minister Radha Mohan Singh said today.

He however noted that the low crop yields cannot be attributed to "non-availability" of improved technologies but several factors including short growing season, varied agro-climatic conditions and weather extremities.

"The productivity of various crops and legumes in the country is less as compared to that of some countries in Europe, the US and China," Singh said during the Question Hour in the Lok Sabha.

Large areas being under-rainfed and harsh environment also accounted for non-realisation of productivity potential of improved technologies, he said.

Singh said that in countries with high productivity, crops are largely grown in high input management conditions of long growing period without any stress of moisture and temperature.

2:12 pm Order inflow: Bliss GVS Pharma's Kenyan arm has won a three-year contract worth USD 111.40 million (around Rs 760 crore) from Aon Kenya Insurance Brokers.

"Bliss GVS Healthcare, the Kenyan step down subsidiary of the company has won a three-year contract worth USD 111.40 million from Aon Kenya Insurance Brokers Ltd for provision of medical healthcare services in Kenya," Bliss GVS Pharma said in a BSE filing.

This contract covers outpatient services for over 3,04,060 members, it added.

"Service payments will be received by the company from Aon, in advance, on a quarterly basis. Part payment for the first quarter has been received form the company," Bliss GVS Pharma said.

Bliss GVS Healthcare runs chain of outpatient medical services clinics in Kenya.

2:00 pm Market Check
Equity benchmarks continued to consolidate in afternoon trade with the Nifty hovering around 7950 level after reclaiming 8000 level in early trade.

The 30-share BSE Sensex was up 67.08 points at 25832.22 and the 50-share NSE Nifty gained 31.55 points at 7960.65 while the market breadth was positive. About 1356 shares advanced against 1080 declining shares on the BSE.

L&T, BHEL, NTPC and GAIL were down 1-3.5 percent while HDFC, HUL, Maruti, Hero Motocorp, Bajaj Auto and Tata Steel rallied 1-2 percent.

Stock markets in Europe started higher, following record highs on Wall Street and expectations that OPEC members will reach an agreement over an output cut. France's CAC, Germany's DAX and Britain's FTSE were up 0.6-0.8 percent.

2:30 pm Interview: Speaking to CNBC-TV18 Mahesh Patil, Co-Chief Investment Officer at Birla Sun Life said that following the demonetisation move they have been relooking their portfolio. He is segregating their portfolio into companies which will face short-term pain for two months, a couple of quarters and a year. Low-ticket consumption items will see demand and will return to normalcy, he expressed hope. Long-term impact could be seen in high-ticket, premium consumption companies. It is positive for the real estate sector, he said. The currency ban will accelerate revival in the sector. Property prices have held up and with this move, distress sales will start to happen. Along with price correction, revival will be faster, he said. ''We expect 75-100 bps cut in policy rates over this cycle,'' he said.

The market is sluggish with the Nifty hovering around 7950. The 50-share index is up 28.25 points or 0.4 percent at 7957.35 and the Sensex is up 56.65 points or 0.2 percent at 25821.79. About 1048 shares have advanced, 1346 shares declined, and 169 shares are unchanged.

Auto stocks are rising with Bajaj Auto, Hero MotoCorp and Maruti leading the pack. HUL and Adani Ports are other gainers in the Sensex. Among losers are BHEL, SBI, L&T, GAIL and NTPC.

The rupee slipped from its initial recovery, dropping 7 paise to Rs 68.23 in late morning deals following bouts of dollar demand from importers despite higher domestic equities.

Overseas, the US dollar took a breather against basket currencies in early Asian trade, as investors consolidated the gains built on expectations of increased fiscal spending and higher inflation under a Trump administration.

12:59 pm Market Update: The Sensex was up 56.22 points at 25821.36 and the Nifty gained 29.30 points at 7958.40.

About 1318 shares declined against 1038 advancing shares on the BSE.

12:50 pm Oil prices rise: Oil prices rose to their highest level since October as the market priced in a potential output cut led by producer cartel OPEC, although analysts warned that a failure to agree a cut could lead to a ballooning supply overhang by early 2017.

International Brent crude oil futures rose as high as USD 49.43 per barrel early today, their highest since October 31, and they were trading at USD 49.30 per barrel, up 0.82 percent, from their last settlement.

US West Texas Intermediate (WTI) crude futures were up 0.85 percent, at USD 48.65 a barrel.

12:35 pm Asia update: Japanese shares turned slightly positive, up 0.3 percent as damage from an earthquake appeared moderate, and most other Asian markets rallied as the dollar retreated.

12:20 pm FII View: The December target for Sensex is cut to 25,000 from 27,000 due to global macro scenario and not on the back of demonetisation, says Abhay Laijawala, Head of India Research for Deutsche Equities.

Speaking to CNBC-TV18 he said the there will be a transition from monetary policy to fiscal policy for which the market is not prepared and expects the market to remain volatile with a downward bias for the near term.

12:00 pm Market Check
Equity benchmarks erased all morning gains with the Nifty falling below 7950, weighed by banks and infra stocks. However, Reliance Industries, HDFC and Infosys continued to support the market.

The 30-share BSE Sensex was up 9.49 points at 25774.63 and the 50-share NSE Nifty gained 13.40 points at 7942.50.

The market breadth also turned negative as about 1253 shares declined against 1047 advancing shares on the BSE.

Nifty PSU Bank fell nearly 2 percent as Canara Bank, Allahabad Bank, Syndicate Bank, Andhra Bank, Bank of India, IDBI Bank and SBI were down 2-3 percent.

L&T lost 2 percent ahead of quarterly earnings later today. BHEL plunged 3 percent while Reliance Industries, HDFC, Infosys, Maruti, HUL and Bajaj Auto gained 1-2 percent.

11:55 am Demonetisation: Post demonetisation India's booming non-banking financial companies (NBFCs) space took a major blow as repayments made to them were usually in cash. The first week of demonetisation saw no repayment at all but collection gradually picked post November 9, said Samit Ghosh, CEO and MD of Ujjivan . In an interview with CNBC-TV18 he said the compant has been disbursing loan from whatever repayments they are receiving post the cash ban. On the RBI's decision to relax loan repayment for banks and NBFCs, as they will get an additional 60 days to for recognizing certain loans as substandard, Ghosh said that this a positive circular in terms of provisioning but it should not be misinterpreted as a two month repayment holiday.

11:30 am Interview: Eric Vas, President of Motorcycle Business at Bajaj Auto , said that post demonetisation there has been a significant decline in the sales of 2-wheelers. It was 50 percent in rural India and 25 percent in urban areas. More importantly, decline in enquiries was down 80 percent across the country, he said. However, in the last four days, we have seen a revival in enquiries, and they have gone up by 30 percent, he added. Vas says it will be difficult to predict what will happen in the long-term, but the increase in enquires does indicate some liquidity is coming back into the market, he said. He stressed how most customers who buy two-wheelers do cash downpayments. He sees a decline of 25 percent this November in sales on a year-on-year basis. However, this currency ban won't affect its launches, he said.

The market is volatile but is still in green. The Sensex is up 101.77 points or 0.4 percent at 25866.91 and the Nifty is up 41.55 points or 0.5 percent at 7970.65. About 1181 shares have advanced, 932 shares declined, and 131 shares are unchanged.

Cipla, Maruti, HUL, Tata Steel and Hero MotoCorp are top gainers while BHEL, GAIL, L&T and M&M are losers in the Sensex.

Oil prices rose to their highest level since late October on Tuesday as the market priced in an expected output cut led by producer cartel OPEC, but analysts warned that a failure to agree a cut could lead to a depening supply glut by early 2017.

International Brent crude oil futures rose as high as USD 49.63 a barrel on Tuesday, up 1.5 percent from the last settlement and the highest since Oct. 31.

10:42 am Interview: Eric Vas, President of Motorcycle Business at Bajaj Auto, said that post demonetisation there has been a significant decline in the sales of 2-wheelers. It was 50 percent in rural India and 25 percent in urban areas.

More importantly, decline in enquiries was down 80 percent across the country, he said. However, in the last four days, we have seen a revival in enquiries, and they have gone up by 30 percent, he added.

Vas says it will be difficult to predict what will happen in the long-term, but the increase in enquires does indicate some liquidity is coming back into the market, he said. He stressed how most customers who buy two-wheelers do cash downpayments. He sees a decline of 25 percent this November in sales on a year-on-year basis. However, this currency ban won't affect its launches, he said.

10:22 am FII view: Eswar Prasad, Professor of Economics at Cornell University, said Narendra Modi hasn't solved the problem yet of black money. But he has created a momentum through his demonetisation drive.

The key question is whether he will follow through with it, he said.

Another major pain area Prasad highlighted as a result of the demonetisation move were technical problems that the common man faces. Resolving them, going forward, will be key, he said.

The key issue from his point of view is what this cleanup drive does on a broader reform effort. "If it turns out to be a building block to other broader economic reforms, it would push India in the right direction," he said.

10:15 am Expiry week: The NSE Nifty is expected to be volatile during the week as its futures and options contracts for the current month will expire on Thursday and investors &  traders will roll over their positions to December.

The index is expected to close at around 8000 level on expiry day as experts believe the market look oversold now after losing more  than 7 percent in last four weeks. Current fall indicated that the market may have priced in the impact of demonetisation.

10:00 am Market Check
Equity benchmarks as well as broader markets erased more than half of early gains as traders seem to be using 'sell on rally' strategy due to uncertainty after demonetisation and fears of likely Fed rate hike in December policy meet.

In opening, the Sensex surged more than 200 points after falling for six consecutive sessions but could not sustain all gains for long. The index was up 93.02 points at 25858.16.

The NSE Nifty also reclaimed 8000 level in early trade but failed to hold the same. It was up 32 points at 7961.10 at 10 am.

The market breadth was marginally positive as about 1066 shares advanced against 838 declining shares on the BSE.

Engineering and construction major Larsen & Toubro (L&T) fell half a percent ahead of quarterly earnings. A CNBC-TV18 poll expects profit to fall 11 percent and revenue to rise 8 percent year-on-year.

9:55 am Market check: The Sensex is up 116.59 points or 0.4 percent at 25881.73, and the Nifty up 36.75 points or 0.5 percent at 7965.85. About 1109 shares have advanced, 704 shares declined, and 77 shares are unchanged.

9:45 am Buzzing: Share price of Vedanta rose 4 percent intraday ahead of board meeting for fund raising plan.

A meeting of duly constituted committee of the board is scheduled to be hold on November 22, to consider a proposes to offer rated secured redeemable non-convertible debentures worth Rs 300 crore.

9:30 am Market rises: The Sensex is up 237.10 points or 0.9 percent at 26002.24 and the Nifty is up 75.25 points or 0.9 percent at 8004.35. About 1118 shares have advanced, 293 shares declined, and 40 shares are unchanged.

Tata Motors, Adani Ports, Maruti, ONGC and Tata Steel are top gainers while NTPC, Bharti Airtel, Dr Reddy's Labs, HDFC Bank and L&T are losers in the Sensex.

The market has opened on a strong note. The Sensex is up 177.55 points or 0.7 percent at 25942.69 and the Nifty is up 61.70 points or 0.8 percent at 7990.80. About 363 shares have advanced, 78 shares declined, and 17 shares are unchanged.

M&M, ONGC, Tata Motors, Bajaj Auto and SBI are top gainers.

The Indian rupee opened marginally higher at 68.13 per dollar versus previous close 68.16.

Jayesh Mehta of BofA ML said, "If equities remain flat today, we expect the rupee to trade in a range of 68.05-68.20/dollar."

The dollar slipped after rising 10 straight days. As investors consolidated gains fueled by the election of a new republican president who is expected to adopt fiscal policies leading to interest rate increases.

Among global peers, Asian stocks rose in the wake of solid gains in US markets overnight, while the Japanese yen briefly strengthened after a powerful earthquake rocked northern Japan.

US stocks climbed to close at a record and European equity markets also moved higher as a jump in oil prices helped spur gains in the energy sector.

Oil extended gains in Asian trading with US West Texas Intermediate (WTI) up 0.73 percent in early deals as the dollar pulled back. Prices surged 4 percent to a three-week high on Monday.