Nifty ends above 8500, Sensex up 518 points; PSU banks lead

14 Aug 2015

Ahead of Independence day, the market ended with a bang with great support from banks, auto, IT, pharma and infra stocks. The midcaps did even better with the index rallying over 2 percent.

The Sensex was up 517.78 points or 1.9 percent at 28067.31 and the Nifty was up 162.70 points or 1.9 percent at 8518.55. About 1795 shares have advanced, 1057 shares declined, and 129 shares are unchanged.

Vedanta, ICICI Bank, SBI, Reliance and HDFC were top gainers while Dr Reddy's Labs and Infosys were losers in the Sensex.

PSU banks lead the rally on Dalal Street as the Finance Minister Arun Jaitley is expected to announce a slew of measures including capital infusion details, new appointments and ways to tackle bad loans.

Wholesale prices contracted for the ninth straight month. July WPI declines faster-than-expected to minus 4.05 percent due to weak food and fuel prices. This is the lowest level since June, 1976.

International markets may have been thrown into a turmoil after China's sudden move to devalue the yuan but the Chinese currency could not have been sustaining itself at such high levels says Marc Faber, author of Gloom Boom & Doom report. The move could just give the US Federal Reserve another opportunity to hold on to all key rates for now.

For the whole week, the Sensex was down 0.6 percent, Nifty slipped 0.5%. Midcap index was down 1.4 percent, BSE Smallcap index was down 2.8 percent. Among the other indices, Metals was down 10 percent, Oil & Gas was down 5 percent while IT was up 4 percent, Pharma gained 3.1 percent.

3:30 pm Market close: After a stellar rally throughout the day, the market ended with huge gains. The Sensex was up 517.78 points or 1.9 percent at 28067.31 and the Nifty ended up 162.70 points or 1.9 percent at 8518.55. About 1794 shares advanced, 1060 shares declined, and 127 shares were unchanged.

Vedanta, ICICI Bank and HDFC rallied 4 percent while SBI and Reliance were other top gainers in the Sensex. Infosys and Dr Reddy's Labs were among top losers.

2:55 pm Big booster: Jet Airways has posted a net profit of Rs 221.7 crore in April-June quarter against loss of Rs 218 crore in corresponding quarter last fiscal. The aviation company earned an exceptional gain of Rs 128 crore. Stock is up 9 percent

Its total income rose 11 percent at Rs 5220 crore in Q1 versus Rs 4685.6 crore in year-ago period. Other income also rose 189 percent at Rs 159.3 crore versus Rs 55 crore year-on-year.

EBITDA of the company four-fold to Rs 351 crore from Rs 69 in the same quarter last fiscal. The company's EBITDA margin rose 520 basis points at 6.7 percent against 1.5 percent.

2:45 pm Result: BPCL has posted net profit at Rs 2376 crore in April-June quarter, up 95.3 percent from Rs 1216.3 crore in corresponding quarter last fiscal. During the quarter, total income was down 22.2 percent at Rs 51966 crore compared to Rs 66794 crore in year-ago period.

According to CNBC-TV18, BPCL was expected to report net profit at Rs 1700 crore in April-June quarter while EBITDA was seen at Rs 2800 crore in Q1.

The oil marketing company (OMC) saw a strong gross refining margins (GRMs) in the quarter. Its GRMs were at USD 8.55 per barrel versus USD 3.38 per barrel year-on-year. 
 Its other Income fell to Rs 330 crore against Rs 1020 crore (Y-o-Y) while tax expenses were at Rs 1120 crore against Rs 575.1 crore (YoY).   

2:30 pm Bank rates: State-owned Oriental Bank of Commerce (OBC) slashed minimum lending rate-the base rate-by 0.1 percent to 9.90 percent, a move which will lower EMIs for borrowers of the bank.

The bank has reduced base rate to 9.90 percent from 10 percent with effect from August 17, OBC said in a statement.

With the reduction in base rate, all loans linked to the base rate will become cheaper by 0.1 percent. The reduction in base rate by the bank comes even after RBI kept benchmark rate unchanged in the monetary policy review on August 4.

RBI kept repo rate-the short-term lending rate-cash reserve ratio (CRR) and statutory liquidity ratio (SLR) unchanged at 7.25 percent, 4 percent and 21.5 percent, respectively.

There seems to be no stopping for the bulls today with huge gains in trade. The Sensex is up 538.16 points or 1.9 percent at 28087.69 and the Nifty is up 169.25 points or 2 percent at 8525.10. About 1722 shares have advanced, 966 shares declined, and 131 shares are unchanged.

Hindalco, Vedanta, Reliance, HDFC and ICICI Bank are top gainers while Dr Reddy's Labs and Coal India are major losers in the Sensex.

Reserve Bank of India  fixed the reference rate of rupee at 65.12 against the USD and 72.55 for the euro as against 64.92 and 72.25, respectively, yesterday. According to an RBI statement, the exchange rates for the pound and the yen against the rupee were quoted at 101.61 and 52.35 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-rupee rate will be based on this rate, the statement added.

1:55 pm Result: BPCL has posted net profit at Rs 2376 crore in April-June quarter, up 95.3 percent from Rs 1216.3 crore in corresponding quarter last fiscal.  During the quarter, total income was down 22.2 percent at Rs 51966 crore compared to Rs 66794 crore in year-ago period.

According to CNBC-TV18, BPCL was expected to report net profit at Rs 1700 crore in April-June quarter while EBITDA was seen at Rs 2800 crore in Q1.

The oil marketing company (OMC) saw a strong gross refining margins (GRMs) in the quarter. Its GRMs were at USD 8.55 per barrel versus USD 3.38 per barrel year-on-year. 

1:40 pm Rupee check:  The rupee recovered from initial losses against the American currency quoting at 65.15 on fresh selling of dollars by banks and exporters on the back of smart recovery in the equity market.

The rupee resumed lower at 65.19 as against yesterday's closing level of 65.10 and dropped further to 65.34 on initial dollar demand from banks and importers in view of a firm dollar in the overseas market. However, it recovered from initial losses to 65.05 before quoting at 65.15 at 1218 hours.

It moved in a range of 65.05 and 65.34. Overseas, the dollar edged higher yesterday, extending its gains earlier in the session and snapping a six-session losing streak against the euro after a spate of strong economic data in the US. Oil prices looked set for their seventh weekly fall in Asia today, with US crude tumbling to fresh six-year lows as investors are worried a global supply glut is set to last.

1:30 pm Stake hike:  In a significant move, Tata Sons will hike its stake to 41.06 percent in low cost carrier AirAsia India. The airline, which is facing stiff competition, is also set for top management reshuffle with CEO Mittu Chandilya expected to be elevated as Managing Director in addition to his current responsibility.

"We are in the process of subscribing to the capital of AirAsia India which will take up our stake to 41.06 percent from the current 30 percent," a Tata Sons spokesperson said.

While specific details could not be immediately ascertained, Tata Sons is likely to acquire the additional stake from Arun Bhatia's Telestra Tradeplace which currently holds 21 percent stake in AirAsia India. The no-frills carrier is a three-way joint venture in which Malaysia's AirAsia Berhard owns 49 percent. AirAsia India is expected to soon effect its first management revamp since commencing operations in June last year.

On expectations of some reform announcement, PSU bank are driving the market. The Sensex is up 461.71 points or 1.7 percent at 28011.24 and the Nifty is up 149 points or 1.8 percent at 8504.85. About 1680 shares have advanced, 911 shares declined, and 115 shares are unchanged.

The Finance Minister and the Financial Services Secretary are expected to address the media today. The market is expecting captial infusion details and names of PSU bank chiefs. Any concrete steps for reduction of non-performing loans (NPLs) will be the icing on the cake.

Vedanta, Reliance, Bajaj Auto, Sun Pharma and HDFC are top gainers while Dr Reddy's Labs, Axis Bank and Coal India are among losers in the Sensex. Midcap and Smallcap indices are also rallying.

The Wholesale Price Index (WPI) contracted sharply year-on-year in July to touch -4.05 percent against a drop to -2.4 percent in June, therby worsening deflationary trend on account of easing commodity and food prices. The July number, which marks the ninth straight month of fall, was greeted by the street as out-of-turn rate cut expectations strengthened.

The consumer price index (CPI) data, which was much better than what the street was expecting had already raised expectations that the Reserve Bank of India (RBI) could move even before the policy date of September 29.

Silver prices declined 0.19 percent to Rs 35,937 per kg in futures trade today as speculators reduced their exposure amid a weak trend in global markets. In the international market, silver prices fell 0.30 per cent to 15.39 an ounce in Singapore.

12:50 pm Interview: Two-wheeler manufacturer TVS Srichakra reported strong Q1 numbers despite increased Chinese imports and this is because the imports are mostly truck and bus tyres, says P Vijayaraghavan, Director, TVS Srichakra . In an interview to CNBC-TV18, Vijayaraghavan says the company continues to be the number one supplier to auto companies like Hero Moto , Honda and Mahindra and Mahindra. The company reported nearly three-fold year on year (Y-o-Y) jump in net profit at Rs 48.97 crore for the quarter ended June 2015 (Q1), on account of higher sales and lower interest cost.

12:35 pm Market check: The market soars again as the Nifty hit 8500 mark. The 50-share index is up 136.05 points or 1.6 percent at 8491.90. The Sensex is up 414.04 points or 1.5 percent at 27963.57, and the Nifty About 1615 shares have advanced, 921 shares declined, and 118 shares are unchanged.

The market is surging ahead. The Sensex is up 359.19 points or 1.3 percent at 27908.72, and the Nifty is up 119.90 points or 1.4 percent at 8475.75. About 1568 shares have advanced, 888 shares declined, and 119 shares are unchanged.

Vedanta, Sun Pharma, Reliance, Bajaj Auto and HDFC are top gainers while GAIL, Dr Reddy's Labs, Axis Bank and Bharti are among laggards.

12:15 pm WPI inflation: The Wholesale Price Index (WPI) contracted sharply in July to touch -4.05 percent against -2.4% in June as an impact of lower commodity price. The July number, which marks the ninth straight week of fall, was greeted by the street as out-of-turn rate cut expectations strengthened.

The consumer price index (CPI) data, which was much better than what the street was expecting had already raised expectations that the Reserve Bank of India (RBI) could move even before the policy date of September 29.

Manufactured Products Inflation (the index has 65 percent weight on the WPI basket) saw further decline to -1.47 percent from 0.77 percent in the previous month. It is a key core inflation data that indicates how businesses are faring.

With a stock market crash in China, an imminent bailout deal in Greece and earnings season kicking off in the US, there's no shortage of concerns bouncing around global markets. And one of those has long-time bearish investor Marc Faber particularly worried.

"We have now hard evidence that the Chinese economy is hardly growing at the present time," the publisher of The Gloom, Boom & Doom Report said on CNBC's "Trading Nation."

It's a day of steady gains on Dalal Street. The Sensex is up 309.24 points or 1.1 percent at 27858.77, and the Nifty is up 111.30 points or 1.3 percent at 8467.15. About 1364 shares have advanced, 875 shares declined, and 106 shares are unchanged. Midcap index outperforms.

Vedanta, Sun Pharma, Bajaj Auto, Reliance and HDFC are top gainers while Axis Bank, GAIL, HUL and Tata Motors are losers in the Sensex.

MSCI in its review has added Glenmark Pharma and Indiabulls Housing to its indices. Both these stocks are higher as they are likely to see inflows of USD 130 million to USD 200 million.

10:50 am Reliance Communications poll: Reliance Communications' first quarter net profit is seen rising 22.8 percent sequentially to Rs 280 crore but revenue may dip 1 percent to Rs 5,644 crore as its subscriber additions remained weak compared to peers. The telecom operator will announce its earnings on August 14.

Analysts expect volume growth of around 2 percent compared to Idea Cellular's 5.8 percent in June quarter.

Key factors to watch out for would be its commentary on the progress of sale of non-core assets (towers etc.) to deleverage the balance sheet and merger with Sistema. It has debt of USD 6 billion at the of March quarter.

10:30 am July WPI poll: The real kicker has already come from the consumer price index (CPI) data which was much better than what the street was working with and hence there is heightened expectations that may be the Reserve Bank of India (RBI) could move even before the policy date of September 29.

Now, in terms of the wholesale price index (WPI) data, it is expected to increase in terms of deflation this time to 2.76 percent minus versus minus 2.4 percent and the range again is quite wide. It is minus 2.3 all the way to 3.46 percent minus.

In terms of core as well non-core WPI which also gives the trend in terms what manufacturing is doing at this point in time, what businesses are doing at this point is expected to decline 1.1 percent versus a decline of 0.9 percent. It is interesting because despite it giving an indication of manufacturing one of the key reasons why WPI or core inflation is declining is also because of lower global commodity price.

The market is going steady as the Sensex is up 140.10 points or 0.5 percent at 27689.63. The Nifty is up 46.65 points or 0.6 percent at 8402.50. About 1050 shares have advanced, 800 shares declined, and 105 shares are unchanged.

Bharti Airtel is up over 2 percent while Sun Pharma, Cipla, Lupin and Vedanta are top gainers in the Sensex. Among the losers are Axis Bank, GAIL, HUL, Tata Motors and Tata Steel.

Oil prices looked set for their seventh weekly fall in Asia today, with US crude tumbling to fresh six-year lows as investors worried a global supply glut is set to last.

Oil is traded in the US currency and any uptick in the dollar will make the commodity more expensive, hurting demand. Some analysts expect the US Federal Reserve to hike interest rates as early as next month, but others say China's sudden move to devalue the yuan this week could prompt the Fed to delay a rise.

9:50 am View on rupee The yuan devaluation by China's central bank suggests the slump in commodity market is likely to continue as the country is the world's largest commodity consumer. This, alongwith the fsall in global crude prices spells trouble for the Indian equity market, says Tirthankar Patnaik of Mizuho Bank.
 
In an interview to CNBC-TV18, Patnaik says Nifty and Sensex will be impacted by China's yuan devaluation for the short-term atleast.

But the weakening seen in the Indian rupee was expected, he says, due to its sustained outperformance in emerging markets (EMs) basket.

Patnaik is confident of a 25 basis points (bps) repo rate cut by the end of the year.

9:40 am Market check: The market is edging up supported by pharma, auto and IT stocks. The Sensex is up 146.39 points or 0.5 percent at 27695.92, and the Nifty is up 46.30 points or 0.6 percent at 8402.15.
 
About 1001 shares have advanced, 632 shares declined, and 82 shares are unchanged.

Sun Pharma, Cipla, Vedanta and Bharti Airtel are up around 2 percent each. Axis Bank, GAIL, HUL, Dr Reddy's Labs and ITC are among laggards.

9:30 am FII view: Chris Wood of CLSA says, "The potential for downside overshoot in Asian stock markets has grown with the PBoC's decision on Yuan devaluation. The risk is that investors will now assume the worst until proven otherwise, namely that China has abandoned its goal of building a consumption-driven economy and has joined the competitive devaluation race." "Greed & Fear's base case remains that China will only be prepared to see up to a 5 percent devaluation this year but after the moves of the past two days, it will take several days of the reference rate being left unchanged for the market to start to believe this," he adds.

The market has opened higher on the back of firm global cues. The Sensex was up 120 points at 27669.53, and the Nifty was up 35.30 points at 8391.15. About 762 shares have advanced, 351 shares declined, and 64 shares are unchanged.

Sun Pharma, Cipla, Lupin, Bharti Airtel, Bank of Baroda, Idea Cellular and Infosys are top gainers, while Tata Steel, Gail India, Axis Bank and Hindalco are the top losers on the indices.

The Indian rupee slipped further as it has opened lower by 15 paise at 65.25 per dollar versus 65.10 Thursday.

Pramit Brahmbhatt of Veracity said, "The rupee is expected to remain under pressure following Yuan devaluation and daily fall. Selling pressure on equity market will fuel further weakness in rupee. During the day we expect the rupee to trade in a range of 64.80-65.40/dollar."

The dollar gained back some ground after China's Central Bank said there was no basis for further depreciation of the yuan, refocusing attention on the likelihood of a Federal Reserve interest rate increase in September.

Asian shares eked out marginal gains early morning, as investors digested the People's Bank of China's (PBOC) decision to set the midpoint rate for the yuan at 6.3975, slightly lower than the previous day's close of 6.3990.

The move broke the central bank's devaluation pattern since Tuesday, and in line with the PBOC's announcement on Thursday that there was no basis for continued currency depreciation.

A nearly flat finish on Wall Street overnight and a renewed decline in oil prices also kept a lid on risk appetite. Major US indices pared gains and finished mostly lower on Thursday, as a fall in energy counters offset a rebound in July retail sales and easing concerns over the continued depreciation of the Chinese yuan.