Nifty ends below 8200, Sensex steady; SBI, Tata Motors laggards

01 Jun 2016

3:30 pm Market closing: The Sensex ended up 45.97 points or 0.2 percent at 26713.93, and the Nifty was up 19.85 points or 0.2 percent at 8179.95. About 1324 shares have advanced, 1299 shares declined, and 158 shares are unchanged. Adani Ports, Asian Paints, Bharti Airtel, ITC and Coal India were top gainers while SBI, Tata Motors, ICICI Ban, Cipla and BHEL are major loser in the Sensex.

3:10 pm Buzzing: Shares of Gokaldas Exports jumped 20 percent, hitting 5-year high at Rs 103.30 per share intraday. The stock rallied 48 percent in last five days. Investors are riding high on its January-March quarter performance. Its net profit rose 17.2 percent at Rs 40.8 crore in Q4FY16 from Rs 34.8 crore in corresponding quarter last fiscal. So, is it time to book profits now? Analysts SP Tulsian says it is not advisable to buy it. He says because of the tax write back, Q4 earnings per share (EPS) is at double digit but challenge will be to sustain it in long term. "One has to wait for the results of Q1 to come in because continuously for the first time company has shown the operational turnaround and that must get sustained." Tulsian adds.

2:58 pm Market Update: Equity benchmarks continued to trade marginally higher with the Sensex rising 61.77 points to 26729.73 and the Nifty climbing 21.05 points to 8181.15.

2:50 pm M&M sales: Utility vehicles maker Mahindra and Mahindra (M&M) disappointed analysts on automotive sales front but tractors business beat expectations.

M&M has sold 40,656 vehicles in May, which increased by 11 percent compared to 36,706 units sold in same period last year, driven by domestic as well as exports.

Domestic sales grew by 10 percent year-on-year to 36,613 units and exports surged 21 percent to 4,043 units in month gone by.

Motilal Oswal had estimated auto sales growth of 23 percent and tractors at 17 percent while the same were estimated at 15.7 percent and 10 percent by Nomura, respectively.

2:40 pm Interview: Amtek Auto reported loss of Rs 529 crore in the fourth quarter of FY16 while the revenue fell 32 percent to Rs 651 crore year-on-year. The company had two exceptional losses related to write-offs and depreciation in the last quarter, says Vice Chairman and MD John Flintham.

The company has reached its lowest point, he says adding that recovery will happen once economy picks-up. The first quarter of FY17 did see uptick in demand.

However, overall "India market continues to be challenging," he says.

Flintham says the company is looking to pare its debt down by two-thirds over next two to three years via asset monetization, which has already begun. The company’s consolidated debt stands at Rs 14,800 crore.

Amtek has also shortlisted bidders for its Neumayer Tekfor subsidiary and hopes to close the deal in four to six weeks.

2:30 pm Transfer charges for captive mines: The government notified the charges for sale of non-auctioned captive mines, a move that will not only boost mergers and acquisitions in the space but will also unlock billions of dollars worth of assets.

"Whenever royalty is payable in terms of Second Schedule to the Act, the transferee shall in addition to royalty, pay to the State Government as transfer charges...," the notification said adding: "Transfer charges payable by the transferee shall be an amount equal to 80 per cent of royalty."

During the Budget Session that ended in April, the Mines and Minerals (Development and Regulation) Amendment Bill, 2016 was passed, which allows transfer of captive mines without auction and will enable banks and financial institutions to sell stressed assets to recover debts.

2:15 pm Ashok Leyland sales: India's second largest commercial vehicle maker Ashok Leyland said it has sold 9,875 units in May, a growth of 6 percent over 9,290 units sold in year-ago period.

The growth was entirely driven by medium & heavy commercial vehicle (MHCV) sales but fell short of expectations. Motilal Oswal had expected 11.5 percent growth and Nomura at 18.4 percent (with 20.4 percent in MHCV and 12.4 percent in LCV segment).

MHCV sales grew by 8 percent to 7,469 units from 6,888 units on yearly basis while light commercial vehicle sales remained flat at 2,406 units compared to year-ago period.

2:00 pm Market Check
The market has maintained its uptrend amid consolidation, supported by FMCG, technology and telecom stocks despite Europe weakness. The broader markets underperformed with the BSE Midcap index flat and Smallcap rising 0.4 percent.

The 30-share BSE Sensex rose 95.18 points to 26763.14 and the 50-share NSE Nifty climbed 28.50 points to 8188.60.

Shares of ITC, TCS, Adani Ports, Asian Paints, Bharti Airtel and Coal India rallied 2-5 percent while SBI, ICICI Bank, Tata Motors and BHEL fell 1-2 percent.

European stocks traded lower as investors digested China's latest purchasing managers' index (PMI) readings and look ahead to key policy events later this week. The pan-European STOXX 600 was down 0.37 percent.

1:30 pm Buzzing: Shares of airline companies Jet Airways and InterGlobe Aviation were under pressure as government has decided to increase aviation turbine fuel (ATF) steeply by 9.2 percent to Rs 46,729.48/kl. Low fuel cost and expenses were aiding business of aviation companies. In January-March quarter of FY16, Jet Airways fuel expenses fell 25 percent at Rs 999 crore against Rs 1334 crore in year-ago period. It turned profitable in Q4 aided by low fuel costs.

The airline company's net profit zoomed to Rs 397 crore in fourth quarter of FY16 from a loss of Rs 1729 crore in corresponding quarter last fiscal. Its total income, in Q4, rose 3.6 percent at Rs 5245.3 crore compared to Rs 5064 crore year-on-year. Other income in the period was at Rs 206 crore versus Rs 225 crore (YoY).

Bulls seem to be pausing a bit as benchmark indcies cool off a bit. The Sensex is up 84.55 points or 0.3 percent at 26752.51, and the Nifty is up 23.30 points or 0.3 percent at 8183.40. About 1343 shares have advanced, 1054 shares declined, and 126 shares are unchanged.

Tata Motors, SBI, ICICI Bank, BHEL and HDFC Bank are losers while Adani Ports, Asian Paints, Bharti Airtel, TCS and ITC are gainers in the Sensex.

The government today hiked the minimum support price (MSP) of paddy by Rs 60 to Rs 1,470 per quintal for the 2016-17 kharif season. A decision in this regard was taken in the meeting of the Cabinet Committee of Economic Affairs (CCEA).

The cabinet also approved a substantial increase in the MSP of pulses for the 2016-17 kharif season. The government had fixed the MSP of common variety paddy at Rs 1,410 and grade A variety grain at Rs 1,450 per quintal for 2015-16 kharif (summer) season.

MSP is the rate at which the government buys the grain from farmers. Sowing of kharif crops will begin with the onset of southwest monsoon this month. Paddy is the main crop grown in the season.

12:58 pm Market Update: Equity benchmarks remained higher in afternoon trade. The Sensex rose 94.95 points to 26762.91 and the Nifty advanced 26 points to 8186.10. About 1337 shares advanced against 1060 declining shares on BSE. Main gainers in the Nifty were Adani Ports (5 percent), Asian Paints (3 percent), Bharti Infratel (3 percent) and TCS (2 percent),Laggards were Yes Bank (-2 percent), Hindalco (-2 percent), Tata Motors (-2 percent) and Bank of Baroda (-1 percent). 

In sectoral performance as reflected by the respective indices, FMCG (1.3 percent), IT (0.7 percent), healthcare (0.2 percent) and oil & gas (0.1 percent) gained, while metals (-0.7 percent), capital goods (-0.2 percent), auto (-0.2 percent) and power (-0.1 percent) were under pressure.

12:45 pm Europe opens: European stocks opened lower as investors digested China's latest purchasing managers' index (PMI) readings.

The pan-European STOXX 600 was down 0.3 percent.

Meanwhile in Asia, markets failed to find a common thread today after mixed signals from China's PMI data. The official PMI came in at 50.1 for May, steady with April's level and a tick above a Reuters poll forecast for 50.0. The 50-point mark separates expansion from contraction.

12:25 pm Eicher May sales: Eicher Motors continued to show smart growth in commercial vehicle (CV) as well as two-wheeler sales. New Delhi-based company has sold 5,771 vehicles in May, a growth of 43 percent over 4,035 units sold in year-ago period. The month-on-month growth in sales was 7 percent.

Domestic sales grew by 29 percent to 4,766 units and exports increased nearly 3-fold to 1,005 units compared to corresponding period of last fiscal.

Royal Enfield sales growth remained strong but run rate stagnated at 48,000 units per month for last two consecutive months.

12:00 pm Market Check: Equity benchmarks halved gains in afternoon trade due to selling banking & financials and auto stocks. The broader markets also came off day's high with the BSE Midcap index flat and Smallcap rising 0.4 percent.

The Sensex gained 88.37 points at 26756.33 and the Nifty rose 20.20 points to 8180.30. The market breadth remained positive as about 1343 shares advanced against 932 declining shares on Bombay Stock Exchange.

Asian markets failed to find a common thread today after mixed signals from China's purchasing managers' index (PMI) data and better-than-expected Australian economic growth. Australia's gross domestic product (GDP) came in well above expectations, rising 3.1 percent on-year in the first quarter, compared with a Reuters poll forecast for 2.8 percent growth. Shanghai and Hang Seng were flat in trade while Nikkei declined 1.6 percent.

Oil prices fell as production from the major Middle East exporters was expected to remain high or even increase just as concerns over the state of China's economy weighed on its fuel demand outlook. International benchmark Brent crude oil futures were trading at USD 49.35 per barrel, down 54 cents, or 1.08 percent, from their last settlement. US West Texas Intermediate crude futures were down 48 cents, or 0.98 percent, at USD 48.62 a barrel.

11:45 am Outlook: Earnings trajectory is now moving into a positive territory and the pace of downgrades has receded, says Anish Damania, CEO & Head- Institutional Equities at IDFC Securities. Speaking from the sidelines of IDFC’s London Conference, Damania says global interest continues to be on Indian companies, he says. Earnings, except from banks, have improved by 13 percent in the fourth quarter, above analyst estimates. “Fund flows are likely to follow the upmove in earnings,” he says. While large caps have performed decently in last few days, midcaps have been subdued. Damania expects midcaps to rally if market remains steady. Volumes are now visible in midcaps, he adds.

11:30 am PMI: Manufacturing output in India grew at its slowest pace in five months in May, suggesting that the sector is "barely improving" and adding to the clamour for further interest rate cuts by the Reserve Bank. The Nikkei/Markit India Manufacturing Purchasing Managers' Index (PMI) - a composite indicator of manufacturing sector performance, stood at 50.7 in May as against 50.5 in April - one of its lowest readings since the end of 2013. A reading above 50 represents expansion while one below this level means contraction.

The market is gaining strength as the Nigty reclaims 8200. The 50-share index is up 48.65 points or 0.6 percent at 8208.75. The Sensex is up 163.30 points or 0.6 percent at 26831.26.

Asian Paints, Adani Ports, Bharti Airtel, TCS and ITC are gainers while Tata Motors, ICICI Bank, HDFC Bank, Coal India and Sun Pharma are losers in the Sensex.

Gold futures today fell by Rs 119 to Rs 28508 per 10 grams as participants indulged in cutting their bets amid a weak trend at the domestic spot markets. However, a firm trend in the precious metal in global market capped the losses. Analysts attributed decline in gold prices at futures trade to weak trend at the domestic spot markets due to muted demand from jewellers as well as retailers but metal's gain in overseas market limited the losses.

10:58 am Market Update: The Sensex rose 157.08 points to 26825.04 and the Nifty climbed 47 points to 8207.10.

About 1343 shares advanced against 717 declining shares on BSE.

10:35 am Interview: Ramky Infrastructure has had a good March quarter with its revenue increasing 150 percent to Rs 867 crore and Ramky Group Managing Director Goutham Reddy is hopeful of maintaining the earnings momentum in FY17.

Reddy told CNBC-TV18 the company's revenues were boosted by two large road projects in Andhra Pradesh and Jammu and Kashmir. He expects the Srinagar-Bannihal road project to be operational next quarter which will further prop up the company's performance.

Reddy said the company's order book stands at Rs 4,500 crore and the company has added Rs 500-600 crore worth projects in the past few months.

Improved cash flows helped the company repay debt, bringing it down by Rs 160 crore to Rs 1,500 crore. 

10:15 am ONGC in news: Russia's largest oil producer Rosneft said on Tuesday it has completed the deal to sell a 15 percent stake in Vankor oilfield in East Siberia to ONGC for USD1.27 billion. The deal was initially signed in September 2015.

Vankor, launched in 2009, produces around 440,000 barrels of oil per day. The field is a source of Russian oil supply to China.

In March, ONGC also signed an initial deal to raise its stake in Vankor to 26 percent from 15 percent.

10:00 am Market Check
The market extended rally in morning trade with the Sensex rising 145.93 points to 26813.89 and the Nifty climbing 42.10 points to 8202.20. The broader markets also gained on strong market breadth.

The BSE Midcap and Smallcap indices rose 0.6 percent each as more than two shares advanced for every share falling on Bombay Stock Exchange.

Earnings trajectory is now moving into a positive territory and the pace of downgrades has receded, says Anish Damania of IDFC Securities.

Global interest continues to be on Indian companies and fund flows are likely to follow the upmove in earnings, he adds.

Maruti Suzuki shares came off day's high after May sales data, up 0.2 percent. It has sold 1.23 lakh units in May, up 7.1 percent YoY, which was completely driven by domestic business that grew by 10.6 percent. However, exports fell 20.8 percent to 9,872 units against 12,466 units in corresponding period of last fiscal.

ITC, TCS, Asian Paints, Axis Bank, Adani Ports, and Bharti Airtel were leading gainers, up 1-2 percent while Tata Motors, ICICI Bank, HDFC Bank, HDFC and NTPC were under pressure.

9:50 am Jet fuel price hike: Shares of airline companies Jet Airways and InterGlobe Aviation were under pressure as government has decided to increase aviation turbine fuel (ATF) by 9.2 percent to Rs 46,729.48/kl.

Low fuel cost and expenses were aiding business of aviation companies. In January-March quarter of FY16, Jet Airways fuel expenses fell 25 percent at Rs 999 crore against Rs 1334 crore in year-ago period. It turned profitable in Q4 aided by low fuel costs. 

9:40 am Auto sales: Maruti Suzuki has sold 1.2 lakh units in May, which increased by 7.1 percent compared to 1.15 lakh units sold in year-ago period. The growth was completely driven by domestic business while exports disappointed.

Domestic sales grew by 10.6 percent to 1.13 lakh units while exports fell 20.8 percent to 9,872 units against 12,466 units in corresponding period of last fiscal. 9:30 am FII view: Neelkanth Mishra of Credit Suisse (CS) says Q4 was better-than-expected with 46 percent of Nifty companies beating CS estimates, the highest in nearly three years and 34 percent missed CS estimates, the lowest since Q1FY15. "Beats were concentrated in consumer discretionary, materials, energy and staples; misses in financials, industrials, healthcare and IT," he adds.

He believes market confidence in a mid-teen index EPS growth for FY17 should improve.

Mishra says good Q4 numbers support his view that domestic growth is reviving and drag from global links should be lower.

The market bounced back with moderate gains amid mixed global cues on Wednesday. The Sensex rose 53.49 points to 26721.45 and the Nifty advanced 20.70 points to 8180.80.

Benchmarks also reacted positively to better-than-expected GDP data at 7.9 percent for the fourth quarter FY16 and five-year high of 7.6 percent for full year.

Axis Bank, ITC, M&M, BPCL and Tata Power were early gainers while Tata Motors, ICICI Bank, NTPC and SBI declined.

The Indian rupee opened flat at 67.24 per dollar against previous close of 67.26.

Bansi Madhvani of India Ratings feels prospects of Fed rate hike will keep global markets on tenterhooks, but is unlikely to be majorly disruptive for the rupee.

According to him, the rupee is likely to hold in the range of 67.05-67.75/dollar this week, with focus on US employment data.

The US dollar was mostly flat against a basket of major currencies after US economic data failed to support expectations for a June or July Federal Reserve interest rate hike.

Asian markets were mixed with Hang Seng higher by 0.06 percent, the Nikkei 225 down 0.69 percent and the Shanghai Composite trading flat.

Wall Street closed mixed on the last trading day of May, as investors eyed economic reports for indications on the timing of the next Fed rate hike.

Among commodity markets, crude oil closed lower, after UAE oil minister said he was happy with the oil market, noting that prices had been correcting higher ahead of the crucial OPEC meet in Vienna today.. That said, oil posted its fourth straight monthly gain, with investors betting on higher US fuel demand.