Nifty ends tad below 7850, Sensex flat; ITC, Hindalco fall

23 Nov 2015

3:30 pm Market ends: The market has ended marginally lower.The Sensex was down 49.15 points or 0.2 percent at 25819.34. The Nifty slipped 7.30 points at 7849.25. About 1477 shares  advanced, 1183 shares declined, and 180 shares were unchanged.

GAIL, Hero MotoCorp, Bajaj Auto, Dr Reddy's Labs and Lupin were top gainers while Hindalco, Vedanta, Tata Steel, ITC and Sun Pharma were losers in the Sensex.

3:10 pm Divestment: India will sell shares in some state-run companies when market conditions improve, Finance Minister Arun Jaitley said, as the government struggles to meet its asset sales target that is crucial to help plug its deficit.

India has raised just about USD 2 billion, or less than 20 percent of its divestment target, so far this year.

Jaitley also said he expected recent steps taken by the government and the central bank to improve asset quality of state-run banks in a "reasonable" time. Indian banks have been burdened with their highest bad loan ratio in a decade.

3:00 pm Market Update: Equity benchmarks trimmed losses. The BSE Sensex fell 25.80 points to 25842.69 and the NSE Nifty declined 1.40 points to 7855.15.

About 1440 shares have advanced, 1128 shares declined, and 184 shares are unchanged on the BSE.

2:55 pm Buzzing: Shares of Brigade Enterprises gained 6.4 percent intraday on launch of real estate project Plumeria at Brigade Meadows in Bangalore.

Plumeria at Brigade Meadows, a part of 60 acre integrated enclave, offers 2 & 3 bedroom luxury homes with sizes ranging from 1110 to 1630 square feet, the company said in its filing.

The company expects revenue of Rs 450-500 crore from this project.

2:40 pm Europe Update: European equities traded lower as traders watch a continued slide in oil prices and other commodities.

The pan-European STOXX 600 was off by 0.5 percent with all major indices in negative territory.

In Asia overnight, markets traded in the green following a rally on Wall Street last week as investors continue to look out for comments from central bankers on the trajectory of US monetary policy.

2:20 pm Interview: Global generic crop protection, chemicals and seeds company,  UPL (formerly known as United Phosphorous) said board members on Monday have approved amalgamation of  Advanta with itself. Post merger, seed company Advanta's every shareholder will get one equity share and three preference shares of UPL for every share held in the company.

Jai Shroff, CEO, UPL, said Advanta is projected to see healthy growth in the coming years. Both UPL and Advanta have been outperforming industry growth rate.

According to him, UPL will benefit from Advanta's major international presence and Advanta will benefit from the company's rich customer accessibility. He said UPL is likely to see 10-15 percent growth going ahead.

2:00 pm Market Check
The market extended losses in afternoon trade with the Sensex falling 90.57 points to 25777.92 and the Nifty down 23.05 points to 7833.50. The broader markets continued to outperform benchmarks as the BSE Midcap and Smallcap indices gained 0.3-0.5 percent.

Asian Paints and Adani Ports rallied 2 percent each as the Bombay Stock Exchange will add both stocks to Sensex with effect from December 21. Vedanta and Hindalco Industries, which will be removed from the index, fell 3 percent and 4 percent, respectively.

The market breadth remained positive as about 1366 shares advanced against 1144 declining shares on the BSE.

1:55 pm Spectrum auction: Spectrum auction is unlikely to be held this fiscal due to delay in recommendations over pricing from the regulator Trai, official sources said. The government had pegged revenue from communication services, that include upfront realisation from spectrum sale and licence fee, at Rs 42,865.62 crore for the current fiscal. "The Department of Telecom needs between 120-180 days to prepare for auction after spectrum pricing recommendations are received from the Telecom Regulatory Authority of India (Trai)," a DoT official said.

1:45 pm GST: Sources in the Finance Ministry say the Goods and Services Tax (GST) rate could be lower than 18 percent. The Chief Economic Adviser Arvind Subramanian will be presenting a recommendation by the GST panel to Finance Minister Arun Jaitley on the GST rate which was earlier stated to be anything between the 18-20 percent range. The panel was set up to prescribe a GST rate that wouldn't be too high for the industry and simultaneously high enough, so that states do not suffer any revenue losses. If the GST rate is lower than 18 percent then the FinMin believes there's a good chance of the Bill being passed in the Winter Session as the Oppostion won't have any reason to stall it further.

1:30 pm Interview: Global generic crop protection, chemicals and seeds company, UPL (formerly known as United Phosphorous) said board members have approved amalgamation of Advanta with itself. Post merger, seed company Advanta's every shareholder will get one equity share and three preference shares of UPL for every share held in the company. Jai Shroff, CEO, UPL, said Advanta is projected to see healthy growth in the coming years. Both UPL and Advanta have been outperforming industry growth rate. According to him, UPL will benefit from Advanta's major international presence and Advanta will benefit from the company's rich customer accessibility. He said UPL is likely to see 10-15 percent growth going ahead.

The market has slipped into red as the Sensex is down 20.67 points at25847.82 and the Nifty is down 2.45 points at 7854.10. About 1424 shares have advanced, 959 shares declined, and 171 shares are unchanged.

Hero MotoCorp, Bajaj Auto, Dr Reddy's Labs, Lupin and BHEL are top gainers while Hindalco, Vedanta, ITC, Tata Steel and Cipla are among losers.

Adrian Mowat, JP Morgan says Indian equities have performed in-line with the Asian peers but it remains the best structural growth story in emerging markets (EMs). This is reflected in that it is a consensus overweight, he adds.

He says the government is spending money on roads and has large plans for railway investment.

According to him, 2016 median EPS growth is optimistic at 22 percent but even with downgrades growth will be high relative to the region.

12:58 pm Market Update: Equity benchmarks continued to be flat. The Sensex fell 33.70 points to 25834.79 and the Nifty declined 2.45 points to 7854.10.

About 1430 shares have advanced, 962 shares declined, and 169 shares are unchanged on the BSE.

12:45 pm Masala Bonds: Some of India's most indebted infrastructure and steel groups are considering so-called masala bonds to diversify their funding options as local banks tighten lending, investment banking sources with direct knowledge of the situation said.

The government last month clarified how income from the rupee-denominated offshore bonds would be taxed, removing one uncertainty for firms at a time when India's banks - usually the first port of call for corporates - are reluctant to lend to sectors facing weak demand and heavy debt.

The global rupee bonds would be used to refinance costly loans or raise capital for new projects with little currency risk. Indian companies had previously issued bonds abroad, but these were in dollars and other currency.

12:30 pm Buzzing: Shares of SeQuent Scientific rallied 6.6 percent intraday on acquisition of Turkey-based company by its subsidiary.

"Subsidiary Alivira Animal Health will acquire Topkim llac Premiks San ve Tic AS of Turkey. Acquisition will be made through Provet Veterinary Products, a subsidiary of Alivira," the company said in its filing.

12:15 pm Rupee outlook: Ray Farris, director, Credit Suisse says he expects the euro-dollar falling over the next three months and believes it can see parity over the next year. On the rupee front, he expects the currency to go to levels of 67 against the dollar in the next three months and 68.50 over the next year.

Equity benchmarks continued to be volatile but the broader markets maintained their outperformance. Infrastructure, technology, oil and select banks stocks gained strength while FMCG, metals and HDFC twins dragged.

The 30-share BSE Sensex rose 13.73 points to 25882.22 and the 50-share NSE Nifty gained 8 points at 7864.55. The BSE Midcap index climbed half a percent and Smallcap advanced 0.7 percent.

The market breadth remained positive as about 1434 shares advanced against 859 declining shares on the BSE.

Bajaj Auto and Hero Motocorp topped buying list on Sensex, up 2-3 percent while ITC, Hindalco Industries and Vedanta dropped 2-3 percent.

11:55 am Market outlook: While the market is trading in a narrow range, the downside is limited, says Harsha Upadhyaya, CIO-equity at Kotak Mutual Fund. He advises investors to place bets where earnings growth is more visible than the overall market. However, he is not investing aggressively at the moment and has a cautious stance on the market in the near-term. Upadhyaya says there is buying interest at lower levels and domestic institutions are getting good money, also EPFO money is getting invested. According to him, the second quarter numbers were disappointing, but a gradual recovery in earnings on account of a favourable base is likely.

11:45 am Tax exemptions: The Finance Ministry has recently proposed a roadmap for the phasing out of all tax exemptions by the industry. According to proposal sunset clauses with regards to tax exemptions will be renewed and no weighted deduction will be allowed for any specified business activity from April 1, 2017 onwards. This is in-line with finance minister's budget proposal to phase out these exemptions and bring the corporate tax rate to 25 percent by financial year 2018. Gokul Chaudhri, Leader-Direct Tax, BMR & Associates explains what the finance minister has actually proposed.

11:30 am Rajan's moves: India's Sisyphean system for bankruptcy is in the sights of the country's central bank governor, who says reform is desperately needed to protect state-owned banks. "We want to bring pure capitalism back, which is a contract is a contract," Raghuram Rajan, governor of the Reserve Bank of India (RBI), told CNBC in an exclusive interview. "That's what we're in the process of doing by giving the banks a few more powers and asking them to enforce their contracts." Without that, companies don't fear resolution and instead put the squeeze on banks to bail them out, he said.

The market is still flat with auto stocks riding high while metals and FMCG are in red. The Sensex is up 14.86 points at 25883.35 and the Nifty is up 6.45 points at 7863. About 1358 shares have advanced, 766 shares declined, and 128 shares are unchanged.

Hero MotoCorp, Bajaj Auto, Dr Reddy's Labs, BHEL and Lupin are top gainers while Hindalco, Vedanta, ITC, Tata Steel and Cipla are losers in the Sensex.

Rupee is at 2-week low, at 66.39 per dollar. The Indian currency opened with a marginal gain of 3 paise at 66.15 per dollar versus 66.18 Friday but it could not sustain early gains.  Agam Gupta of StanChart said, "The local government banks will probably buy dollar on dips towards 66.10 limiting the downside there. We expect exporters to sell dollar above 66.30 to hedge their forward receivables."

Gold languished close to a near-six-year low, hurt by a robust dollar and upbeat comments by Federal Reserve officials regarding a US rate hike next month.

10:50 am Buzzing: Shares of Vakrangee surged 15 percent intraday as it has entered into an alliance with Ricoh India . As per the agreement, the midcap IT company will provide managed print services on pay per unit model to the un-served and under-served geographies in India.

"Through this alliance, Ricoh initially proposes to deploy multi-functional printers (MFPs) at various kendras located pan India," it says in a statement to exchanges.

Vakrangee is India's largest network of last-mile retail touch points to deliver real-time banking, insurance, e-governance, e-commerce and ATM services to the unserved rural, semi-urban and urban markets.

10:40 am FII View: Adrian Mowat, JP Morgan says Indian equities have performed in-line with the Asian peers but it remains the best structural growth story in emerging markets (EMs). This is reflected in that it is a consensus overweight, he adds.

He says the government is spending money on roads and has large plans for railway investment.

According to him, 2016 median EPS growth is optimistic at 22 percent but even with downgrades growth will be high relative to the region.

Mowat says the big swing factor is RBI policy. "Monetary policy is too tight with rising real interest rates suppressing corporate capex and increasing non-performing loans (NPLs). Our economist's forecast is an RBI on hold. If this is correct, growth will disappoint," he explained.

10:20 am Gold Update: Gold languished close to a near-six-year low today, hurt by a robust dollar and upbeat comments by Federal Reserve officials regarding a US rate hike next month.

Spot gold had fallen 0.3 percent to USD 1,074.91 an ounce, extending Friday's 0.4-percent drop. The metal declined to USD 1,064.95 last week, the lowest since February 2010.

Speculation that the Fed will lift interest rates for the first time in nearly a decade this year has intensified since the release of strong US jobs data earlier this month, which triggered a sharp drop in gold prices.

Higher rates tend to weigh on gold, as they lift the opportunity cost of holding non-yielding assets, while boosting the dollar.

The market continued to consolidate in morning trade due to lack of cues but the broader markets outperformed benchmarks. The BSE Midcap index gained 0.3 percent and Smallcap advanced 0.7 percent.

The 30-share BSE Sensex fell 11.49 points to 25857.00 and the 50-share NSE Nifty rose 0.55 points to 7857.10. The market breadth was positive as about two shares advanced for every share declining on the Bombay Stock Exchange.

Hindalco Industries and Vedanta topped selling list on Sensex, down more than 2 percent followed by ITC, Infosys, Sun Pharma, Cipla and Tata Steel with 0.5-1.6 percent. Hero Motocorp, Bajaj Auto, Wipro, Dr Reddy's Labs and BHEL gained 1-2 percent.

Advanta gained 4 percent but UPL lost 1 percent after the merger deal. UPL is going to merge Advanta with self, says the global generic crop protection, chemicals and seeds company, adding Advanta shareholders will get one equity share and three preference shares for every share held.

Among midcaps, Vakrangee, Godfrey Phillip, Responsive Industries, SpiceJet and HSIL rallied 5-10 percent while Sun Pharma Advanced, Whirlpool, Page Industries, Max India and Bombay Dyeing fell 2-2.5 percent.

9:55 am Pharma talk: Strides Shasun has received approval from the US health regulator to market Dutasteride capsules, used in treating enlarged prostate gland, in the American market.

The company has received approval from the US Food and Drug Administration (USFDA) to market Dutasteride capsules in the strength of 0.5 mg, Strides Shasun said in a regulatory filing.

According to IMS sales data, the US market for Dutasteride capsules is around USD 470 million.

9:45 am Fed moves: The Federal Reserve now looks set to raise rates in December, partially based on expectation that inflation is set to finally rise to its 2 percent target. There's only one potential problem. There's actually a way that markets can see where investors think inflation will go. And they do not exactly see eye to eye with America's central bank. Over the next five years, annual inflation is expected to run at less than 1.3 percent. Even over the next ten, investors are looking for no more than 1.6 percent per year.

9:30 am Done deal: Pfizer was due to secure formal board approval on Sunday for its acquisition of Botox maker Allergan for more than USD 150 billion, making it the healthcare sector's largest deal ever, according to people familiar with the matter.

The agreement is set to draw political ire in a US presidential election year for Pfizer's decision to use the transaction to redomicile in Ireland, where Allergan is registered, in a so-called "inversion," thereby reducing its corporate tax rate.

It will also reignite debate in the pharmaceutical industry over the role of research and development, with Allergan Chief Executive Brent Saunders, a prolific dealmaker and a skeptic of in-house drug discovery, joining the combined company in a position to influence its strategy.

The market has opened flat as the Sensex is up 17.51 points at 25886. The Nifty is up 14.60 points at 7871.15. About 456 shares have advanced, 119 shares declined, and 50 shares are unchanged.

Dr Reddy's Labs, ICICI Bank, Bajaj Auto, NTPC and TCS are top gainers while Tata Motors, Vedanta, Infosys, Maruti and Hindalco are losers.

Asian markets opened in green, following a rally on Wall Street last week as investors continue to look out for comments from central bankers on the trajectory of US monetary policy.

Major US indices ended last week with gains of more than 3 percent. The Dow Jones Industrial Average closed 91 points, or 0.51 percent, higher at 17,824, the S&P 500 ended 8 points, or 0.38 percent, up at 2,089, while the Nasdaq was 31 points, or 0.62 percent, higher to finish at 5,105.

The Indian rupee has opened with a marginal gain of 3 paise at 66.15 per dollar on Monday versus 66.18 Friday but it could not sustain early gains.

The currency fell to 66.29 a dollar, down 11 paise.

Agam Gupta of StanChart said, "The local government banks will probably buy dollar on dips towards 66.10 limiting the downside there. We expect exporters to sell dollar above 66.30 to hedge their forward receivables."

"The USD-INR pair should range between 66.10-66.35/dollar today," he added.

The euro fell against the dollar after two days of gains, pressured by comments from ECB chief Mario Draghi who expressed willingness to add more stimulus to the euro zone economy to raise inflation.