Sensex crashes 630 points, Nifty ends 2.4% down; Dr Reddy's up

12 May 2015

3:30 pm Market close: Another bloody day on Dalal Street as the most stocks were hammered out of shape. The Sensex ended down 629.82 points or 2.2 percent at 26877.48, and the Nifty was down 198.30 points or 2.4 percent at 8126.95. About 772 shares have advanced, 1943 shares declined, and 147 shares are unchanged.

Tata Steel, Vedanta, BHEL, ICICI Bank and Tata Power were top losers in the Sensex. Among the gainers were Dr Reddy's Labs and Hero Motocorp.

3:15 pm Sharp sell-off: The Sensex is down 651.79 points or 2.4 percent at 26855.51, and the Nifty is down 207.15 points or 2.5 percent at 8118.10. About 705 shares have advanced, 1963 shares declined, and 150 shares are unchanged.

Tata Steel, BHEL, Vedanta, ICICI Bank and Tata Power are top losers in the Sensex. Both Dr Reddy's Labs and Hero Motocorp are up 3 percent.

2:50 pm World stocks: Low-risk bonds sold off again driving down stocks and helping push the euro higher against the dollar.

Ten-year US treasury yields, the benchmark for global borrowing costs, hit their highest since early December, while German 10-year yields added 8 basis points to 0.67 percent.

Volatility in the bond markets weighed on stocks, adding to existing investor anxiety over the perilous state of Greece's finances. Shares in Europe and followed Wall Street lower. Less than a month ago German 10-year yields hit a record low of 0.05 percent, driven down by a 1 trillion euro European Central Bank bond-purchase scheme intended to kick-start inflation.

Traders, who struggle to fully explain the recent yield surge, blame it on a rise in inflation expectations, higher oil prices, and restricted liquidity, caused by ECB purchases, as investors sought to exit a crowded trade.

2:30 pm Result: Dr Reddy's Labs has posted a consolidated net profit of Rs 519 crore in the quarter ended March 2015 up 7.8 percent from Rs 481.6 crore in the corresponding quarter last fiscal. During the period, total income was up 11.2 percent at Rs 3870 crore versus Rs 3481 crore (Y-o-Y) on consolidated basis.

According to a CNBC-TV18 poll, revenue was seen rising 8.3 percent year-on-year Rs 3770 crore and profit was expected to increase 14 percent to Rs 548 crore. Fourth quarter profit was below estimates mainly due to one-off forex loss of Rs 84.3 crore in Venezuela.  The loss was incurred due to net monetary assets in Venezuela as the Government had modified its currency exchange systems. Overall, the company faced currency volatility in some emerging markets.

However, it had to bear lower tax expense at Rs 74.2 crore in the quarter against Rs 125.2 crore year-on-year.

The market continues to fall sharply. The Sensex is down 573.27 points or 2 percent at 26934.03 and the Nifty is down 182.40 points or 2 percent at 8142.85. About 628 shares have advanced, 1915 shares declined, and 142 shares are unchanged.

Hero Moto is up 4 percent. Dr Reddy's Lab gains 3 percent after it posted March quarter results. Cipla and Coal India are top gainers in the Sensex. Among the losers are Tata Steel, Vedanta, BHEL, ICICI Bank and Tata Power.

Even news of timely arrival of monsoon could not calm sentiments. The monsoon is expected to be on time and would be at 102 percent of the long-term average said GP Sharma, vice president-meteorology, Skymet Weather Services in an interview to CNBC-TV18. According to him so far there have been no distress signals and rain bearing monsoon clouds would reach the Andaman region in the Bay of Bengal by May 25, and hit Kerala thereafter.

"Between May 27 and June 1, the monsoon should hit the coast of Kerala. South India is in the thick of pre-monsoon showers and this will pick up in next three days - more widespread and intense," said GP Sharma, vice president-meteorology, Skymet.

1:30 pm Monsoon update: The arrival of monsoon is expected to be on time and would be at 102 percent of the long-term average said GP Sharma, vice president-meteorology, Skymet Weather Services in an interview to CNBC-TV18. According to him so far there have been no distress signals and rain bearing monsoon clouds would reach the Andaman region in the Bay of Bengal by May 25, and hit Kerala thereafter. "Between May 27 and June 1, the monsoon should hit the coast of Kerala. South India is in the thick of pre-monsoon showers and this will pick up in next three days - more widespread and intense," said GP Sharma, vice president-meteorology, Skymet. Around May 15, Skymet will come out with a report on the progress of the monsoon, he said. Meanwhile, Nino Index an indicator of El Nino gravity is at its lowest around 0.6 as of now, so the impact is not expected to be alarming, said Sharma.

The market is under huge pressure as the Sensex is down 529.43 points or 1.9 percent at 26977.87. The Nifty is down 172.30 points or 2 percent at 8152.95. About 614 shares have advanced, 1787 shares declined, and 140 shares are unchanged.

Hero Motocorp is up 4 percent while Dr Reddy's Labs and Coal India are top gainers in the Sensex. Among the losers are Vedanta, Tata Steel, BHEL, ICICI Bank and Hindalco.

Bank Nifty is down 3 percent while infra, metals and realty fall over 2 percent.

India is at a cyclical low and investors need to be patient as the policies of the new government will take to show results, says Ajay Kapur, Asia Pacific Equity Strategist and Global Emerging Markets Strategist at BofA Merrill Lynch. He sees weak earnings as a major concern for Indian markets. Rising crude oil prices, likely rate hike by the US Federal Reserve, and a strong dollar are major hurdles for emerging markets in general, says Kapur.

12:45 pm Earthquake again: Strong tremors were felt across North India at around 12:40 PM. Initial reports suggest the magnitude of the earthquake is 6.9 on Richter scale. Afghanistan is the likely epicentre of the earthquake.

There has been no report of any casualty or damage.

12:30 pm Boardroom: Despite the significant fall posted in NPAs, in an interview to CNBC-TV18, Ranjan Dhawan, managing director and chief executive officer of Union Bank, says the issue of bad loans is not yet over. In a previous interview to CNBC-TV18 , Dhawan had said: Not withstanding (the positive surprise on NPA levels) there is considerable pain still left in the economy. Most of our major clients are still not out of the woods. They have serious liquidity issues.''

He says increasingly restructured assets are slipping into NPAs and he expects this trend to continue until the economy starts picking pace significantly. Citing the issue of dumping in the steel industry, issues in the coal mine auctions, etc Dhawan says there's a dire need to resolve these major woes for the economy to revive.

There is no respite in selling pressure as the Sensex is down 516.55 points or 1.9 percent at 26990.75. The Nifty is down 172.10 points or 2 percent at 8153.15. About 590 shares have advanced, 1691 shares declined, and 135 shares are unchanged.

Vedanta, Tata Steel, BHEL, ICICI Bank and Reliance are major losers in the Sensex. Among the gainers are Hero, Dr Reddy's and Coal India.

A CNBC-TV18 Poll expects the consumer price index (CPI) data for April to soften on a month-on-month (M-o-M). The poll expects the inflation to come in at 5.04 percent versus 5.17 percent on the M-o-M basis. The CPI data for March was at the lowest level since December 2014. The range is more important for the CPI data because the expectation is that it could vary all the way from 4.72 percent to around 5.3 percent. Economists are expecting a softening on two main points. The first one is that it could be a commonality between the expectation that it could increase as well as it could decrease.

The dollar firmed against major counterparts, as ongoing anxiety over Greece's debt crisis helped push the euro toward a one-week low. As euro zone finance ministers met in Brussels to discuss a cash-for-reforms deal with Athens, Greek Finance Minister Yanis Varoufakis said on Monday that a referendum on Greece's bailout is not planned for the time being, and that capital controls have not been considered for the country.

11:30 am Buzzing: Shares of JustDial rose over 2 percent intraday. Credit Suisse has upgraded it to outperform but slashed target to Rs 1,400 from Rs 1,625. The brokerage estimates a 28 percent CAGR over FY15-18 and states that earnings and target price cuts are due to ad spend and absence of benefits from 'Search Plus'.

In a separate development, private equity Tiger Global has offloaded 2.1 percent stake in the company yesterday at Rs 1088 per share. Tiger Global was a pre-IPO investor and held 11.28 percent stake as on March 31.

The market is spiraling down with the Nifty struggling below the 8200-mark. The 50-share index is down 140.50 points or 1.7 percent at 8184.75. The Sensex is down 429.22 points or 1.6 percent at 27078.08. About 498 shares have advanced, 1549 shares declined, and 120 shares are unchanged.

The Bank Nifty leads declines with Axis Bank, SBI, ICICI Bank and Axis Bank as major laggards.

Hero is up 3 percent while Dr Reddy's Labs gains 2 percent ahead of announcing its March quarter earnings. Vedanta, Tata Steel, ICICI Bank, Hindalco and Reliance are among major losers in the Sensex.

The rupee breaches 64 as the dollar gains against most Asian and emerging market currencies. Bonds harden tracking the sell off in US treasuries.

Globally, Asia is mixed taking cue from the weaker US close and worries over Greece's financial conditions, slowing growth in China and hardening global bond yields. The US 10 year rose to 2.27 percent with German bunds at 0.62 percent.

Oil prices eased as the market remained oversupplied and the dollar gained on fears that Greece would not be able to repay its debts. Greece paid about 750 million to the International Monetary Fund late on Monday, a day before it was due.

10:55 am Market check: The Sensex is down 451.27 points or 1.6 percent at 27056.03, and the Nifty is down 153.30 points or 1.8 percent at 8171.95. About 504 shares have advanced, 1512 shares declined, and 121 shares are unchanged.

10:45 am Market slumps: The Sensex is down 431.49 points or 1.6 percent at 27075.81, and the Nifty is down 146.65 points or 1.8 percent at 8178.60. About 496 shares have advanced, 1481 shares declined, and 123 shares are unchanged.

Vedanta and Tata Steel are down 4 percent while ICICI Bank, Hindalco and BHEL are among major laggards in the Sensex.

10:30 am Market outlook: Weak earnings, erratic rains and tax demand on FIIs are to be blamed for recent volatility, says Prabodh Agrawal, president and head of research at IIFL Institutional Equities. He, however, believes that Nifty valuations at current levels are reasonable, and a 10 percent correction predicted by many seems unlikely. Agrawal sees a reasonable chance of corporate earnings growing 18-19 percent this year, because of the low base last year. He expects engineering, capital goods and consumer discretionaries like auto and white goods clocking better margins due to low raw material prices. Agarwal says though FIIs are selling, the good news is local funds are buying. He expects earnings upgrades in cement, IT and auto sectors.

Pressure mounts on Dalal Street as banks, capital goods and metals see sharp selling. The the Sensex is down 328.00 points or 1.1 percent at 27179.30 and the Nifty is down 111.80 points or 1 percent at 8213.45. About 454 shares have advanced, 1198 shares declined, and 93 shares are unchanged.

Tata Steel, Vedanta, Hindalco, Tata Motors and SBI are among major laggards in the Sensex. Top gainers include Hero, Coal India, Dr Reddy's Labs and HUL.

IIP and inflation data will be released later in the day. Brokers said emergence of profit-booking by participants ahead of key economic data -- industrial production (IIP) numbers for March and inflation based on consumer price index (CPI) for April -- to be unveiled later in the day contributed to the fall. Besides, a weak trend at other Asian markets, weighed down by uncertainty over the Greek debt deal, too, dampened trading sentiment here, they said.

Crude prices edged lower in Asia on worries about a global oversupply after a veteran former energy minister in Qatar warned OPEC members against cutting output unilaterally. US benchmark West Texas Intermediate for June delivery fell eight cents to USD 59.17 while Brent crude for June eased 16 cents to USD 64.75 in late-morning trade.

9:53 Market slips again: Selling continues on Dalal Street dragging the indices sharply. The Sensex is down 361.30 points or 1.3 percent at 27146.00 and the Nifty is down 120.20 points or 1.4 percent at 8205.05.  About 434 shares have advanced, 1173 shares declined, and 92 shares are unchanged.

Vedanta, Tata Power, Tata Motors, Hindalco and Tata Steel are top losers in the Sensex.

9:45 am Buzzing: Shares of Jubilant Industries were locked at 10 percent circuit, hitting Rs 163.90 per share intraday on Tuesday.  Its wholly owned subsidiary Jubilant Agri and Consumer Products will transfer its retail hypermarket business including four hypermarket stores in Bengaluru to Aditya Birla Retail via slump sale.

The board of the company has approved the transaction earlier on May 12. The transaction is expected to be completed within four months months, subject to the necessary statutory, regulatory and other approvals, including approval of the Competition Commission of India and the shareholders.

9:30 am Market loses again: The Sensex is down 311.48 points or 1.1 percent at 27195.82 and the Nifty is down 113.95 points or 1.4 percent at 8211.30. About 377 shares have advanced, 950 shares declined, and 91 shares are unchanged.

Tata Power, Tata Motors, Vedanta, ICICI Bank and L&T are majors losers in the Sensex. Coal India and Hero are up 1 percent while Dr Reddy's Labs and HUL are gainers.

9:20 am Market falls: The Sensex is down 207.70 points or 0.8 percent at 27299.60 and the Nifty is down 71.35 points or 0.8 percent at 8253.90. About 327 shares have advanced, 626 shares declined, and 79 shares are unchanged.

Bank Nifty is down 1.6 percent from previous close.

The market has opened in red as the Sensex is down 169.81 points or 0.6 percent at 27337.49. The Nifty is down 59.25 points or 0.7 percent at 8266.00. About 332 shares have advanced, 465 shares declined, and 81 shares are unchanged.

GAIL, Coal India, Dr Reddy's Labs, Wipro and ITC are top gainers in the Sensex. Among the losers are Tata Motors, L&T, Vedanta, M&M and SBI.

The Indian rupee slipped in the early trade. It has opened lower by 26 paise at 64.11 per dollar versus 63.85 Monday. US dollar rose against the euro on renewed worries over a Greek exit from the Eurozone. The dollar index rises to 95-mark.

Ashutosh Raina of HDFC Bank said, "The USD-INR pair appears to have entered a bearish phase, hovering around the 64/dollar level, with very little FII inflows. The pair is expected to trade in the 63.75-64.25/dollar range today with likely support from the Central Bank at higher levels."

Globally, the US markets ended lower led by Greece's financial woes, slowing growth in China as well as gains in bond yields. Asian market, too, is trading lower following a lower finish on Wall Street, and as investors awaited the release of the federal budget in Sydney.