Nifty ends below 8100, Sensex flat; DRL up 3%, TCS falls 3%

27 Jun 2016

3:30 pm Market closing: The market has ended flat with the Sensex up 5.25 points at 26402.96. The Nifty was up 6.10 points  at 8094.70. About 1822 shares have advanced, 791 shares declined, and 177 shares are unchanged.

Dr Reddy's Labs, Cipla, SBI, Sun Pharma and L&T were top gainers while TCS, Infosys, Wipro, Asian Paints and Bajaj Auto were losers in the Sensex.

3:10 pm Buzzing: Shares of Manpasand Beverages rallied 10 percent intraday on Monday after Motilal Oswal inititated coverage on the stock. The brokerage firm has a buy rating on the stock with a target price of Rs 750 per share, indicating 44 percent.

According to Motilal Oswal, Manpasand on the cusp of a high growth cycle, led by capacity expansion, new product launches and increases in distribution network, which should lead to market share gains from 5 percent in 2016 to 7.5 percent in 2018. It expects Manpasand to grow at 49 percent CAGR driven by new product launches, increased distribution reach and increased capacities leading to increase its market share to 7.5 percent by 2018 from 5 percent in 2016.

New product launch like Fruits Up and coconut water under brand Coco Sip is also likely to boost growth.

2:59 pm Market Update: The Sensex rose 21.58 points to 26419.29 and the Nifty gained 12.60 points at 8101.20.

About 1809 shares advanced against 733 declining shares on BSE.

2:45 pm Kotak on Maruti: Kotak Securities has downgraded Maruti Suzuki, the country's largest car maker, to add from buy earlier and maintained target price at Rs 4,300, citing fair valuations.

The brokerage believes positive earnings surprise is unlikely, given the sharp appreciation of Japanese yen against Indian rupee and capacity constraints.

It also believes pricing power of the company will improve once industry recovers to double digit growth which is likely once the Seventh Pay Commission is implemented. The full impact is likely in FY2018, says the brokerage.

2:35 pm FII View: The biggest risk for Indian equities is its high correlation with global markets and Nilesh Jasani Head of Research (Asia Pacific) at Jefferies feels in case of a global risk-off situation likely due to events following Brexit, India could be under pressure.

In an interview to CNBC-TV18, Jasani says, it is unclear how post-Brexit economic and financial markets dominos will fall globally, but market risks have certainly climbed.  ''Valuations in India are a concern,'' he says. 

However, he also believes India's economic connect with global economies in 2016 is materially different from 2008 and this time there is a higher chance of India being insulated.

2:20 pm Oil Update: Oil prices stabilised today as market participants better absorbed the shock of last week's vote in Great Britain to leave the European Union and recognised the referendum would have little effect on global fuel demand.

Brent crude futures were trading at USD 48.67 a barrel, up 26 cents from their last settlement. US crude was up 7 cents at USD 47.71 a barrel.

2:00 pm Market Check
The market continued to be volatile in afternoon trade with the Nifty hovering around 8100 level. Healthcare, FMCG, infra and select banks stocks gained while technology, auto and HDFC group stocks declined.

The Sensex fell 50.56 points to 26347.15 and the Nifty slipped 8.05 points to 8080.55 while the broader markets continued to outperform.

The BSE Midcap index gained 0.8 percent and Smallcap was up 1.4 percent as more than two shares advanced for every share falling on the Bombay Stock Exchange.

Aurobindo Pharma, UltraTech Cement, SBI, BPCL, Bank of Baroda, Sun Pharma, L&T, ITC and Lupin gained 1-3 percent while TCS, Infosys, Asian Paints, Wipro, Maruti Suzuki, Power Grid Corporation and IndusInd Bank fell 1-3 percent.

1:55 pm Baba Ramdev in troubles: Baba Ramdev's Patanjali Ayurved seems to be in the crosshairs of ad regulator Advertising Standards Council of India (ASCI). The company claims to be receiving one notice a day from ASCI over misleading ads.

The company on its part has been submitting supporting data and facts to the ad regulator on a regular basis, say CNBC-TV18 sources.

In a letter exclusively reviewed by CNBC-TV18, Patanjali told ASCI that these complaints could be coming from the competitors rather than consumers. Competitors are intentionally complaining to ad regulator with an aim to stall the company's growth, said Patanjali.

1:45 pm FII view: Speaking to CNBC-TV18, Credit Suisse's Robert Parker said that the impact of Brexit on the UK will be negative.

"I won't be surprised with low levels of capital investment and further sterling weakness," he added. The pound sterling at the time of publishing this article was under 1.35 to a dollar.

The contagion risk arising out of the Brexit is small for India and other emerging markets, he said.

The US Fed will watch the impact of Brexit on the rest of the world before it undertakes a policy move. "I stick to my view the Fed will cut 75 bps by this year," he said.

1:30 pm IT stocks under pressure: As Britain has decided to break the European Union further de-valuing pound analysts are concerned that Indian technology companies will feel the heat. Few analysts are even warning of a recession in the European region. The UK accounts for 9-15 percent of revenues for Indian IT firms, with the highest exposure at TCS and the lowest at Infosys . IT stocks are reeling under pressure on Monday with TCS, Infosys, HCL Tech and Tech Mahindra losing around 1 percent each. Bank of America Merrill Lynch feels that Indian IT companies' earnings may be hurt due to weakening of GBP and euro versus Indian rupee, partially offset by stronger USD and growth slowdown in UK. It says that IT companies with financial services vertical are more likely at risk.

The market continues to rally after weakness in morning trade. The Sensex is up 51.79 points or 0.2 percent at 26449.50, and the Nifty is up 21.00 points or 0.3 percent at 8109.60. About 1761 shares have advanced, 608 shares declined, and 142 shares are unchanged.

SBI is biggest gainer (3 percent) followed by L&T, ITC, Sun Pharma and Adani Ports. TCS, Infosys, Maruti, Wipro and Asian Paints are losers in the Sensex.

Crude oil futures fell 1.11 percent to Rs 3,292 per barrel today, in line with a weak trend in Asian trade. Analysts said fall in crude oil futures is mostly in tune with a weak trend in Asian trade where prices suffered fresh losses today as the fallout from last week's decision by Britain to leave the European Union batters confidence and ushers in a period of uncertainty.

Global markets took a beating Friday, with some USD 2.1 trillion wiped off valuations and the British pound plunging to 31-year lows against the dollar, while oil prices slumped more than five percent.

12:59 pm Market Update: Equity benchmarks extended upside in afternoon trade. The Sensex gained 86.40 points at 26484.11 and the Nifty rose 29.05 points to 8117.65.

The market breadth remained strong as about three shares advanced for every share declining on BSE.

12:45 pm Europe opens: European stocks opened sharply lower as the fallout from Britain's decision to leave the European Union (EU) continues, sending the pound falling as well.

The pan-European STOXX 600 was down 1.12 percent.

London's FTSE 100 index was down 0.82 percent despite futures earlier trading a lot lower.

Investor sentiment was hard-hit on Friday when results of the UK referendum on EU membership went the way of the Brexit camp. Uncertainty over what this meant for Britain's future led to turmoil in global financial markets, with the pound slumping and stocks around the world tanking.

12:35 pm Interview: While sowing season is in its full swing in Maharashtra, Kerala and Karnataka State, Gujarat and Rajasthan are still waiting for a full monsoon to play, says PH Ravikumar, Non-Executive Chairman, Bharat Financial Inclusion . The company is on track to grow 5 percent this fiscal year, Ravikumar tells CNBC-TV18.

He believes Brexit will not impact the rural economy but inflation and growth momentum will, he said.

Meanwhile, the company's cost of borrowing is at 9.2 percent currently, same as quarter four, Ravikumar said, adding, it can decline by 25-50 basis points (bps) going ahead.

12:20 pm Asia Update: Asia markets traded mixed, as traders continued to digest the UK's unexpected vote to leave the European Union (EU).

Chinese mainland markets traded in positive territory, with the Shanghai composite up 1.18 percent. Japan's Nikkei also gained 2.4 percent while Hang Seng fell 0.4 percent.

12:00 pm Market Check
The market rebounded in afternoon trade with the Nifty reclaiming 8100 amid consolidation. The broader markets extended upside with the BSE Midcap and Smallcap indices gaining 0.8 percent and 1.4 percent, respectively.

The 30-share BSE Sensex rose 27.34 points to 26425.05 and the 50-share NSE Nifty climbed 12.15 points to 8100.75. The market breadth remained positive as about three shares advanced for every share falling on Bombay Stock Exchange.

Tanvee Gupta Jain, Economist, Macquarie Capital Research is of the view that with the Indian macro environment looking good, it will be least impacted from the Brexit event amongst its peers.

Currently, there are three things playing out for India – macros are good, growth is recovering and consumption too is improving, although the recovery is not yet broadbased, says Gupta.

ITC, L&T, SBI, ICICI Bank, Axis Bank, HUL, Adani Ports, Dr Reddy's Labs and NTPC gained 1-2 percent while TCS, Infosys and Wipro fell 1-3 percent.

11:45 am Exclusive: Essar Steel's stake sale plan is likely to have hit a roadblock with Tata Steel, Liberty House and JSW Steel possibly having backed out after initial talks, reports CNBC-TV18.

Essar Steel, part of Essar Group controlled by billionaire brothers Shashi and Ravi Ruia, is under debt of nearly Rs 40,000 crore following a recent slump in commodity prices, weak demand and lower capacity usage at its units. Currently, capacity utilisation is around 70 percent.

Tata Steel, Liberty House and JSW Steel are believed to have begun talks with Essar's lenders in May to restructure debt, consider fresh fund infusion and an increase in the moratorium period.

ICICI Bank, State Bank of India (SBI), Punjab National Bank (PNB), IDBI Bank and Axis Bank are bankers to the stake sale process.

11:30 am Interview: Maruti is used to dealing with a strong yen, is the word coming from the company's chairman RC Bhargava. Yen rose almost 7.2 percent on Friday post the Brexit. Speaking to CNBC-TV18, Bhargava said that Maruti is taking measures to mitigate the strong impact of yen especially on its import side. ''Export of cars to Japan provides a hedge against import impact of stronger yen,'' Bhargava said adding that it only hedges a part of the exposure. Maruti Suzuki, early this year, started exporting the India-made Baleno to Japan.

The market seems to be stuck in a range with the Nifty attempting to draw closer to 8100. The 50-share index is down 1.50 points at 8087.10 and Sensex is down 15.53 points at 26382.18. About 1597 shares have advanced, 499 shares declined, and 124 shares are unchanged.

SBI, NTPC, GAIL, HUL and L&T are top gainers while TCS, Infosys, Maruti, Tata Steel and Bharti are losers in the Sensex.

Oil prices suffered fresh losses today as the fallout from last week's decision by Britain to leave the European Union batters confidence and ushers in a period of uncertainty.

Global markets took a beating Friday, with some USD 2.1 trillion wiped off valuations and the British pound plunging to 31-year lows against the dollar, while oil prices slumped more than five percent.

10:35 am Moody's on FDI relaxation: India's decision to relax foreign direct investment in sectors including defence, aviation, and retail is a positive development for the country's sovereign ratings, said Moody's Investors Service on Monday.

"The announcement is credit positive because it demonstrates a continuation of reform momentum and paves the way for private investment and a boost in productivity," said Moody's.

India announced last week sweeping reforms to rules on foreign direct investment and easier terms for investors in sectors ranging from civil aviation to pharmaceuticals.

But Moody's warned reforms have stalled in passing a revamped goods and services tax and land acquisition rules.

"We expect that political division will keep the reform process uneven and slow-moving," Moody's said.

10:15 am FII View: Brokerage house Deutsche Bank has trimmed its Sensex target to 27,000 from 29,000 earlier, citing global uncertainty in the wake of 'Brexit.'

''As the long and complicated process of political and economic separation of the UK from the EU unfolds, financial market volatility will remain elevated,'' says the Deutsche Bank note, adding, ''until the dust settles, the risk of markets reacting irrationally will stay elevated.''

The brokerage has advised clients to invest in sectors that have the least exposure to global macro. The only exception is pharmaceuticals as a strong dollar will benefit companies having a sizeable exposure to the US market.

10:00 am Market Check
Equity benchmarks continued to see volatility in morning trade after investors digested Brexit in last Friday's trade. FMCG, infra, select banks and pharma stocks gained while technology, auto and metals stocks were under pressure

The 30-share BSE Sensex fell 50.49 points to 26347.22 and the 50-share NSE Nifty declined 14.40 points to 8074.20 while the broader markets outperformed benchmarks.

The BSE Midcap and Smallcap indices gained 0.4 and 1 percent, respectively. The market breadth was also positive as about three shares advanced for every share declining on Bombay Stock Exchange.

9:55 am FII view: Brokerage house Deutsche Bank has trimmed its Sensex target to 27,000 from 29,000 earlier, citing global uncertainty in the wake of 'Brexit.'

''As the long and complicated process of political and economic separation of the UK from the EU unfolds, financial market volatility will remain elevated,'' says the Deutsche Bank note, adding, ''until the dust settles, the risk of markets reacting irrationally will stay elevated.''

The brokerage has advised clients to invest in sectors that have the least exposure to global macro. The only exception is pharmaceuticals as a strong dollar will benefit companies having a sizeable exposure to the US market.

9:45 am FPI data: Foreign investors have pulled out close to Rs 6,200 crore from the country's stock markets so far this month, taking the total outflow to more than Rs 11,500 crore in 2016.

The outflow trend is expected to continue in the coming days following Britain's exit from the European Union.

"While there could be some outflows from FPIs in Indian bonds amid global risk-off environment, bond yields are likely to soften," SBI Mutual Fund Chief Investment Officer Navneet Munot said. The data sourced from the depositories showed Foreign Portfolio Investors (FPIs) have sold debt securities worth Rs 6,189 crore (USD 918 million) till June 24, following an outflow of Rs 4,409 crore in the preceding month.

9:30 am Market check: The Sensex is down 9.52 points at 26388.19, and the Nifty down 6.20 points at 8082.40. About 1057 shares have advanced, 339 shares declined, and 98 shares are unchanged. Dr Reddy's Labs, SBI, BHEL, Axis Banka and L&T are top gainers while TCS, Infosys, Wipro, Maruti and Reliance are down in the Sensex.

Sell-off continues on Dalal Street Monday. The Sensex is down 61.89 points or 0.2 percent at 26335.82, and the Nifty down 49.25 points or 0.6 percent at 8039.35. About 269 shares have advanced, 209 shares declined, and 40 shares are unchanged.

ITC, Lupin, Tata Motors, Sun Pharma and Cipla are top gainers while Infosys, Asian Paints, TCS, Hero and NTPC are losers in the Sensex.

The Indian rupee opened lower by 12 paise at 68.08 per dollar on Monday versus 67.96 Friday. Pound extended its sell-off near a 31-year low as the fallout from the UK's vote to exit the European Union stoked anxiety among investors around the world.

Pramit Brahmbhatt of Veracity said, "We expect the rupee to trade with negative bias. Brexit will put more pressure on the rupee."

Global cues are weak as US market tumbled over 3 percent with the Dow losing over 600 points on Friday. Asia markets opened mixed on Monday, as traders continued to digest the UK's unexpected vote. In Japan the Nikkei 225 saw a 1.61 percent gain in early trade

Japan's government and central bank will hold an emergency meeting on Monday to discuss how to respond to Brexit-related market turbulence, Reuters reported.
In the currency space pound extends its selloff near a 31-year low as the fallout from the UK's vote to exit the European Union stoked anxiety among investors around the world. Crude prices continued to decline after falling around 5 percent on Friday.

Gold prices gained around 1 percent as aftershocks from Britain's vote to leave the EU  pushed investors towards the safe-haven asset.