Nifty ends below 7700, Sensex rises 424 points; HUL falls 2%

08 Sep 2015

3:30 pm Market closing: After six days the market has managed to end on strong note. The  Sensex was up 424.06 points or 1.7 percent at 25317.87 and the Nifty gained 129.45 points or 1.7 percent at 7688.25. About 1439 shares advanced, 1211 shares declined and 127 shares were unchanged. Banks gave a major philip to the benchmark indices.

GAIL, BHEL, Tata Steel, ICICI Bank and Axis Bank were top gainers while HUL, Bharti, Cipla and Infosys  were major laggards.

3:15 pm: Chief Economic Advisor, addressing the media, said that India is less vulnerable to changes made by China to its growth Model and the country will remain one Of the most attractive investment destination. He also added that cheap oil will help India to maintain macro-economic stability.

3:05 pm FM's media interaction post PM-India Inc meet: Reiterating that India's economic fundamental is reasonably strong, Finance Minister Arun Jaitley has said that India Inc, in the meeting with PM Modi, analysed recent global events and their impact on India. He also added that participants in the meeting asked for monetary easing. PM has asked private sector to increase investments in India.

2:50 pm Oil update: Oil prices stabilized at low levels on Tuesday as strong German economic data countered Asia's darkening outlook that continues to clash with a global supply glut.

German exports and imports hit record highs in July despite a slowdown in China. Exports climbed by 2.4 percent on the month to 103.4 billion euros (USD 115.58 billion) while imports grew 2.2 percent to 80.6 billion euros, the highest values on record.

Traders said that the strong German data had helped counter a further darkening of Asia's economic outlook.

2:40 pm India Inc meets PM: For the first time since the Narendra Modi government took charge at the Centre 15 months ago, he along with Finance Minister Arun Jaitley and other Cabinet ministers met India Inc. The contours of the meeting primarily include deliberating on the recent global developments and the opportunities it presents for India.

The who's who of India Inc attended the meeting, along with vice-chairman of Niti Aayog of India - Arvind Panagariya and the Chief Economic Advisor Arvind Subramanian. Industry bigwigs such as Sunil Mittal, YC Deveshwar, Mukesh Ambani, KM Birla and Arundhati Bhattacharya, among others, were present at the meeting.

India Inc too stressed on the need for greater monetary easing atleast to the extent of 75 basis points and that the rupee must be allowed to depreciate to preserve domestic price competitiveness in global trade.

2:30 pm Market check: Here it is again! The Nifty reclaims 7700, up 145.05 points or 1.9 percent at 7703.85. The Sensex is up 436.36 points or 1.7 percent at 25330.17.About 1394 shares have advanced, 1147 shares declined, and 118 shares are unchanged.

Tata Steel gains 7 percent while BHEL and GAIL are up 6 percent each. Other gainers are Axis Bank and Vedanta. HUL is still down 3 percent while Dr Reddy's Labs, Bharti Airtel and Cipla slip.

2:20 pm FY16 fiscal deficit target: Sluggish direct tax collection, likely shortfall in disinvestment proceeds and OROP scheme pay out will add to the government's fiscal burden but it will "adhere to" fiscal deficit target by reducing expenditure, says a Standard Chartered report.

It cautioned however that a decision to reduce capital expenditure more than recurrent expenditure could dampen the government's efforts to kick-start the investment cycle.

"A consumption boost resulting from pay revisions could support economic activity in the near term. However, lower government capex in an environment where private-sector investment is likely to remain weak could mean that such growth is unsustainable," the report said, adding that the recent improvement in investment has been primarily driven by government expenditure.

The benchmark indices have extended gains led by surge in banks. The Sensex is up 362.58 points or 1.5 percent at 25256.39 and the Nifty is up 112.90 points or 1.5 percent at 7671.70. About 1243 shares have advanced, 1264 shares declined, and 113 shares are unchanged.

Bank Nifty is up 3.6 percent with gainers like HDFC twins, SBI and ICICI Bank. Tata Steel, GAIL, BHEL, Vedanta and ICICI Bank are top gainers.

In the currency space, rupee has bounced back from a two-year low as the US dollar retreated against major world currencies. Rupee trading at 66.54 vs a close of 66.82 yesterday.

Meanwhile, Prime Minister Narendra Modi today met captains of india inc and leading economists will take stock of the global crisis. He encouraged industry to invest while acknowledging that more needs to be done to improve the ease of doing business.

1:55 pm Market check: The Sensex is up 302.64 points or 1.2 percent at 25196.45, and the Nifty gains 93.65 points or 1.2 percent at 7652.45. About 1214 shares have advanced, 1285 shares declined, and 112 shares are unchanged. Tata Steel is up 6 percent, GAIL and BHEL are up 5 percent. Other gainers are ICICI Bank and Vedanta. HUL is down 3 percent, Cipla, Dr Reddy's Labs, Lupin and Bharti Airtel are major losers in the Sensex.

1:40 pm Interview: N Kamakodi, MD & CEO of City Union Bank is very optimistic of growth for the bank going forward too. In an interview to CNBC-TV18 he said the credit growth for FY16 would be around 12-15 percent although things have to yet improve on the ground.

City Union Bank has been a standout performer amongst the banking space. While most banks year to date have given up gains, City Union has lost only one percent.

According to him the net interest income growth rate will also follow credit growth and would be in tune of 15 percent for FY16.

On the non-performing assets (NPA) front although, the stress is reducing but is still higher than previous decade and so, he envisages the slippages in FY16 to be around 2-2.25 percent.

1:30 pm Debt cut measures: In a move to reduce its debt, Jaiprakash Power Ventures has concluded the sale of its two hydro-power plants to JSW Energy. The two plants include Himachal Baspa Power Company Limited (HBPCL) assets, i) 300 MW Baspa- II HEP, ii) 1092 MW Karcham Wangtoo HEP. They have been sold at an Enterprise Value (EV) of Rs 9,700 crore.

Further, JPVL has also paid a compensation of Rs 150 crores to HBPCL, with profit and loss from these plants accruing to it from 1st September 2015.

In addition, the two companies have entered into a binding Memorandum of Understanding (MoU) for JP Power Ventures 500 MW Bina Thermal Power Plant.

1:20 pm Buzzing: Shares of GAIL jumped 7 percent. Nomura maintains buy rating on the stock but slashed target price by 8-10 percent to Rs 410 per share. However, the brokerage is still convinced of sharp growth ahead warning July-September likely to be lacklustre. Nomura also adds that second half will be good for all segments.

In a August report, Credit Suisse, had warned that profit and loss impact of petchem expansion may keep earnings depressed. According to its estimates, GAIL's take-or-pay liability can be USD 0.9 billion by December 2015.

The state-run gas transmission company's first quarter net profit fell 17 percent sequentially to Rs 424.14 crore, dented by loss in petchem business and lower other income.

The market is surging ahead. The Sensex is up 277.94 points or 1.1 percent at 25171.75 and the Nifty is up 87.55 points or 1.1 percent at 7646.35. About 1109 shares have advanced, 1323 shares declined, and 106 shares are unchanged.

GAIL, Tata Steel, BHEL, Vedanta and ICICI Bank are top gainers while HUL, Cipla, Lupin, Bharti Airtel and Dr Reddy's Labs are major losers.

Mark Matthews of Bank Julius Baer says a relief rally is on the cards and the immediate trigger will be the US Federal Reserve's decision on interest rates next week. However, he is not sure if the relief rally can sustain. Factors like the macro data in China, and for India, the impending Bihar elections will influence sentiment, he says.

12:45 pm Interview: Petronet LNG's 7.5-million-tonne long-term contract with Qatar's RasGas for import of gas is a cause of distress to many under the current depressed global prices. As prices of natural gas prices have halved in line with fall in crude prices, end-users are in the receiving end. Under the take-or-pay commitment, these end-users are under pressure to lift re-gasified LNG at over USD12/MMBTU at the Dahej terminal.

Speaking to CNBC-TV18, RK Garg, Acting MD & CEO of Petronas LNG said there has been a shortfall in offtake due to unprecedented fall in prices. Long-term prices have fallen by 30 percent in Q1 and Garg says the company is trying to make up the "drop" by buying spot volume from the "attractive" spot market.

12:30 pm MF call: BP Singh of Pramerica Mutual Fund in an interview to CNBC-TV18 said it is not yet time to deploy cash and buy. Wait for the sell off to taper and then start buying. Selling and redemptions could continue for a fortnight more. So do not rush to buy now but wait for bounce backs, said Singh. Today is not a time to buy, he added. Although there have been redemptions seen by funds globally since investors have been booking profits, Singh said their fund on the contrary has seen inflows. In fact they have told investors that the house would deploy aggressively once the market stops selling.

Supported by buying interest in banks, capital goods, metals, IT and auto, the market is rallying ahead. The Sensex is up 180.87 points or 0.7 percent at 25074.68 and the Nifty is up 61.10 points or 0.8 percent at 7619.90. About 786 shares have advanced, 1519 shares declined, and 96 shares are unchanged.

GAIL, ICICI Bank, Tata Steel, NTPC and Axis Bank are top gainers while HUL, Cipla, lupin, Sun Pharma and Bharti Airtel are major losers in the Sensex.

The anatomy of the fall in the stock market is macro-driven and hence all are going down together, says Nandita Parker of Karma Capital. It is, therefore, a good time to buy, she says.

According to her, once the US Federal Reserve meeting is out of the way, a lot of the uncertainty in the market will abate. She also says that India is a big beneficiary of everything that has gone wrong with China and the fall in energy prices.

Post the Fed meet, as more clarity emerges on the global scenario, the Reserve Bank governor Raghuram Rajan will also have the liberty to lower rates.

11:50 am Market check: The market has risen once again as the Sensex is up 75.02 points or 0.3 percent at 24968.83. The Nifty is up 28.90 points or 0.4 percent at 7587.70. About 694 shares have advanced, 1581 shares declined, and 98 shares are unchanged.

GAIL, ICICI Bank, NTPC, Tata Steel and Wipro are top gainers while Cipla, HUL, Lupin, Sun Pharma and Bharti Airtel are major losers in the Sensex.

11:30 am Buzzing: Shares of Info Edge rose 2 percent intraday. Zomato (Info Edge holds majority share) has signed definitive agreements to raise close to Rs 390 crore led by Singapor investment company Temasek with participation from existing sharholder Vy Capital.

Info Edge did not participate in the latest round of funding, as a result its holding in Zomato has declined to 47 percent from 50.1 percent.

Bank of America Merill Lynch has increased target price to Rs 1094 from Rs 1050 per share. "Though the valuation at which the fund raising has taken place has not been revealed, the brokerage estimates the funding to be at a valuation of USD 1 billion, which adds Rs 44 to Info Edge SOTP valuation,'' it says in a report.

Nomura, too, is bullish on the stock with a buy rating and a target price of Rs 950 per share. The brokerage believes that its flagship brand Naukri will largely sustain annual revenue growth of 20 percent and expects EBITDA margins to inch up over the next two years by 140 basis points (bps) to 52.6 percent levels.

The market has again slipped into red after comfortably placed in green for sometime in early trade. The Sensex is down 40.55 points or 0.2 percent at 24853.26 and the Nifty is down 8.20 points or 0.1 percent at 7550.60. About 661 shares have advanced, 1457 shares declined, and 90 shares are unchanged.

GAIL, NTPC, ICICI Bank, Hindalco and Tata Steel are top gainers in the Sensex. Among the losers are HUL, Cipla, Dr Reddy's Labs and Bharti Airtel.

Oil prices remained weak as the global economic outlook darkened further and cooperation between oil producing countries to curb oversupply looked unlikely. Oil prices have fallen almost 60 percent since June 2014 on a global supply glut, with prices seesawing in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.

10:50 am Market check: Trading gathers steam. The Sensex is up 58.73 points or 0.2 percent at 24952.54 and the Nifty is up 17.65 points or 0.2 percent at 7576.45. About 747 shares have advanced, 1304 shares declined, and 82 shares are unchanged.

10:45 am Costly OROP: One Rank One Pension (OROP) will have a significant impact on the country's fiscal bill and the overall cost will be around Rs 16,000 crore in the current financial year, says an HSBC report.

The government has "in principle" accepted OROP - a demand by India's defence personnel that uniform pension should be paid to armed force retirees with the same rank and same length of service.

"This would mean higher current pension payments as well as paying off arrears (retrospectively from July 2014), it will have a significant impact on the fiscal bill. We estimate the overall cost to be Rs 16,000 crore (USD 2.5 billion or 0.1 per cent of GDP) in FY16," HSBC said in a research note.

10:30 am FII view: Emerging markets are looking oversold after the bruising slide over the last couple of weeks, says Mark Matthews of Bank Julius Baer.

He says a relief rally is on the cards and the immediate trigger will be the US Federal Reserve's decision on interest rates next week.

Matthews says he is not sure if the relief rally can sustain. Factors like the macro data in China, and for India, the impending Bihar elections will influence sentiment, he says.

The market is completely flat with the Sensex down 1.34 points  at 24892.47. The Nifty is up 2.65 points at 7561.45. About 667 shares have advanced, 1104 shares declined, and 60 shares are unchanged.

GAIL, Axis Bank, Tata Steel, NTPC and ICICI Bank are top gainers in the Sensex. Among the losers are Cipla, Lupin, Dr Reddy's Labs, Vedanta and Bharti Airtel.

Both Midcap and Smallcap index are under selling pressure.

Gold steadied after a four-day losing streak, but the metal wasn't too far from a 2.5-week low as it struggled to find direction amid uncertainty over a looming U.S interest rate hike. Investors had been awaiting Friday's US jobs report to gauge the strength of the economic recovery and whether it would prompt the Federal Reserve to hike rates at its policy meet later this month. But the data failed to provide adequate clarity regarding a Fed move amid volatility in financial markets.

9:55 am Steel imports: An Indian government body has found evidence that rising imports of some hot-rolled steel products from China, Japan, South Korea and Russia pose a threat to the domestic industry, potentially paving the way for an import levy known as a safeguard duty.

The Directorate General of Safeguards said on Monday it would look into whether a duty was needed after the Steel Authority of India (SAIL), JSW Steel and Essar Steel filed an application in July seeking safeguard measures for a four-year period.

The steel makers have been pushing for a safeguard duty instead of an increase in an existing import tax because a safeguard duty would also apply to companies in Japan and South Korea. India has free trade agreements with these countries and gives them import duty concessions.

9:45 am Rating slashed: Global rating agency Moody's Investors Service has lowered its GDP growth forecasts for quite a few Asia Pacific (APAC) countries, citing subdued global growth, "exacerbated by weaker demand".

In its just-released report titled ''Asia Pacific Sovereigns: Credit Profiles Resilient to Slowing Exports, Subdued Domestic Demand, Moody's said that domestic demand in most APAC countries is unlikely to offset the effect of slower global growth, partly because an anticipated investment boost from government infrastructure spending has not materialized in some cases.

The report also talks of a sharp revision to Australia's economic growth forecast,
from 2.6 percent to 2 percent in 2016. It had already lowered India's growth projection to 7 percent in 2015 from 7.5 percent, and to 7.5 percent in 2016 from earlier estimate of 7.6 percent.

9:35 am Market check: The Sensex is up 34.69 points at 24928.50, and the Nifty is up 14.30 points at 7573.10. About 658 shares have advanced, 780 shares declined, and 55 shares are unchanged.

HDFC, Tata Steel, Axis Bank, GAIL and ICICI Bank are top gainers while Vedanta, Cipla, HUL, Lupin and Bharti are among losers in the Sensex.

9:30 am FII View: Hartmut Issel of UBS believes we are within reach of the 'great financial crisis', which has made investors negative on equities. 

However, he does not think it is time to sell equities. He in fact thinks it is a good time to buy. "Best time to get healthy returns from equities is to buy during the crisis," says Issel in an interview to CNBC-TV18.

Going forward, the house would be keenly watching further data out of China to see how the economy is doing but more important the upcoming Fed meet. He expects the Fed to hike in September. The hike would be good because it would provide certainty to the markets, he says.

Just after a slight uptick, the market soon turned flat. The Sensex is down 35.81 points or 0.1 percent at 24858.00, and the Nifty is down 13.35 points or 0.2 percent at 7545.45. About 419 shares have advanced, 388 shares declined, and 34 shares are unchanged.

GAIL, HDFC, Tata Steel, Tata Motors and NTPC are top gainers in the Sensex. Among the losers are Lupin, Vedanta, Dr Reddy's Labs, Cipla and HUL are among losers.

After hitting two-year low, the Indian rupee opened marginally higher by 5 paise at 66.77 per dollar versus 66.82 Monday.

Ashutosh Raina of HDFC Bank said, "The USD-INR currency pair has been under pressure, close to touching the psychological level of 67/dollar, tracking weakness in other EM currencies." The dollar firm against the yen and other currencies as equities stabilise.

Asian stocks traded mixed, as investors awaited fresh data due out of the world's second-biggest economy.

China releases trade figures for August and economists polled by Reuters expect exports to have declined 6 percent on-year, after an 8.3 percent plunge in July. Imports are seen dropping 8.2 percent in August, following a fall of 8.1 percent in the previous month.

From other asset class, the dollar firmed against the yen and other currencies as equities stabilised. However, crude prices fell as a firmer dollar and global oversupply fears weighed on prices. Gold prices continued to trade around USD 1120 an ounce.