Sensex ends 151 points lower, Nifty below 7850; HUL gains 1%

3:30 pm Market closing: After a sleepy day, the market ended with deep cuts. The Sensex closed down 150.77 points or 0.6 percent at 25705.93. The Nifty slipped 43.15 points or 0.5 percent at 7829.10. About 1101 shares have advanced, 1518 shares declined, and 104 shares are unchanged.

HUL, Sun Pharma, ITC, Reliance and NTPC were top gainers while Tata Steel, Vedanta, Tata Motors, Hindalco and L&T were among losers.

3:10 pm Slew of upgrades: Goldman Sachs has upgraded ICICI Bank to buy from neutral following recent underperformance, with the stock having fallen 7-20 percent over the last 3-6 months and underperforming the Sensex. It has set a target price of Rs 340 indicating 27 percent upside potential.

The brokerage expects the private lender to grow its retail loan book by 21.4 percent CAGR FY15-FY18, and loan growth by 16.6 percent, higher than industry. "It continues to focus on margin which will likely remain stable as the bank increases its retail book proportion and sees the benefit of deposit re-pricing
of the last year reflect in its average cost of funds," Goldman Sachs says in a note.

Goldman Sachs has also upgraded other private banks Axis Bank, YES Bank and Kotak Mahindra Bank.

3:00 pm Market under pressure: The Sensex fell 30.31 points to 25735.01 and the Nifty declined 41.80 points to 7830.45. About 1026 shares have advanced, 1499 shares declined, and 96 shares are unchanged on the BSE.

2:55 pm Market Expert: Despite volatility and fall, Girish Pai Head-Research, Nirmal Bang Institutional Equity is convinced that the market in undergoing a correction in a bull market. According to him, a high volatility phase in the market is part and parcel of any asset class.

However, he envisages a slow growth both for the global markets and Indian market because of what is happening in China. He expects India to grow in a 7-7.5 percent range.

"We do not think it is the end of the bull market because our base case view is that we will probably see some slower global growth  because of some bit of collateral damage from what is happening in China. So, if that is the base case scenario from a global growth standpoint and in India, we will probably grow a little slower than what probably people anticipated six months back," says Pai.

2:40 pm ONGC firm on capex: Global oil majors have slashed spending and cut jobs in response to plunging oil prices but state-owned ONGC is using the slump to build assets.

Oil majors including Shell, Total and BP have cut capital spending by at least USD 14 billion this year in response to the plummeting oil price. Addressing company shareholders, ONGC Chairman and Managing Director Dinesh K Sarraf said energy industry, particularly the oil and gas sector, was facing challenging times due to the collapse of crude prices.

Oil prices, he said, have collapsed from USD 110 per barrel to sub-50 dollars a barrel due to lower growth in demand than expected from China, slow recovery in some of the developed economies and steady build-up of new supplies backed by strong North American output.

"While many of the global E&P companies have responded to this situation by cutting down their investments, ONGC takes this as an opportunity to build its assets in this environment of lower costs as well," he said.

ONGC, he said, remains "steadfastly committed to the quest of energy security, a national priority endorsed by none other than our Prime Minister." Sarraf said ONGC has stepped up ongoing development efforts to bring new hydrocarbon volumes into the country's energy basket.

2:25 pm Asian Paints in focus: Government is likely to extend till June 2018 the validity of environment clearance (EC) given to Asian Paints - the country's largest paint maker -- for expansion of its Patancheru unit in Telangana.

The EC, granted to Asian Paints in 2008 for expansion of its Patancheru plant, expired in 2013. During this period, the company could not expand the capacity due to some restrictions imposed by the state government.

"Asian Paints' proposal seeking extension of the validity of EC for its expansion project in Telangana was examined by the Expert Appraisal Committee (EAC) in a recent meeting. It suggested for extension of the EC validity till June 2018. The final EC is expected to be issued soon," a senior Environment Ministry official said.

Asian Paints informed the EAC that the state government has lifted restrictions and the company is keen to start the expansion work, the official added.

2:15 pm Bidding starts for imported LNG subsidy: As many as 16 power companies including NTPC, GMR and GVK today began bidding to get government subsidy support to buy imported LNG for restarting their stranded electricity generating stations. For the auction of subsidy support, 16 bidders have been technically qualified, sources said. Power producers bidding for the lowest subsidy support, will get the first right over the fuel.

The auction started at a base price of Rs 1.45 per unit. "The plant load factor (PLF) for SGP will come at 35 percent which can go up to 50 percent in the increment of 2.5 percent per round," the source said. The auction for plants receiving Domestic Gas (DGP) will be held tomorrow and "11 bids have been technically qualified for it".

According to sources GMR, GVK, NTPC and Lanco were among the companies that had submitted bids earlier this month to be qualified for the second phase of auction of financial assistance of Rs 2,600 crore under Power System Development Fund set up by the government.

"The maximum bidding price under the reverse auction has been fixed at Rs 4.7 per unit for stranded gas based plant (SGP) and Rs 3.39 per unit for domestic gas plants (DGP)," the source had earlier said, adding that the firms will bid for a total of 15 Million Metric Standard Cubic Meter Per Day (MMSCMD).

Power Ministry had invited technical bids to undertake the reverse auction of the PSDF support to eligible gas-based power plants for a period from October 1, 2015 to March 31, 2016, as per the tender.

2:00 pm Market Check
Benchmark indices sank further over the last half an hour of trade, with the Sensex now at 25687, down 168 points or 0.7 percent over its previous close, and the Nifty at 7812, down 59 points or 0.8 percent over its previous close.

Tata Steel (-5 percent), Vedanta (-4 percent), Tata Motors (-4 percent) and Ambuja Cements (-3 percent) were the big losers in the Nifty. Other laggards in the index were Hero Motocorp (-2 percent), Tata Power (-2 percent), ICICI Bank (-2 percent) and Asian Paints (-2 percent).

However, gainers included Tech Mahindra (2 percent), Power Grid Corp (1 percent), NTPC (1 percent) and Sun Pharma (1 percent).

In sectoral performance as reflected by the respective indices, metals (-2.2 percent), capital goods (-1.9 percent), consumer durables (-1.4 percent) and auto (-1.4 percent) were under pressure, while FMCG (0.2 percent) gained.

Bharat Forge (-6 percent), Jaiprakash Associates (-4 percent), Jain Irrigation (-4 percent), Century Textiles (-3 percent) and Reliance Infrastructure (-3 percent) were the big losers in the midcap space. Other notable laggards included Strides Arcolab (-3 percent), Jindal Steel (-3 percent), IRB Infra (-3 percent), Ashok Leyland (-3 percent) and Max India (-3 percent).

The rupee was quoting at 66.43 to the dollar, down 11 paise over its previous close.

European shares were trading weak with UK's FTSE down 51 points at 6032, Germany's DAX down 28 points at 10103, and France's CAC down 5 points at 4512.

The trend in key Asian markets was broadly bearish. Singapore's Straits Times was down 27 points or 1 percent at 2843. China's Shanghai closed at down 110 points or 3.5 percent over its previous close, Taiwan's Taiwan Index closed at 8259, down 47 points, and Hong Kong's Hang Seng closed at 21455, down 106 points. In gainers, Japan's Nikkei 225 closed at 18026, up 60 points, and Korea's KOSPI closed at 1937, up 6 points.

1:55 pm Market check: The Sensex is down 160.43 points or 0.6 percent at 25696.27. The Nifty slips 57.35 points or 0.7 percent at 7814.90. About 1007 shares have advanced, 1410 shares declined, and 103 shares are unchanged.

1:50 pm Interview: Weak demand--both from the government as well as private sector--has impacted growth, Umesh Chowdhary, Vice Chairman (VC) & Managing Director (MD) of Titagarh Wagons told CNBC-TV18.

He, however, expects a new tender from the government in coming few days.

Chowdhary said the recent stand-off with Railways on differential pricing has been resolved mostly and the new tender is expected to have provision for 17,000 wagons. In the FY15 cancelled tender, there was provision for 8,000 wagons.

The company's current order book stands at Rs 2,500 crore, of which domestic orders account for Rs 600 crore. Execution of Railways orders from last year has begun and the revenues will reflect in the December quarter, Chowdhary said, adding that private orders will also be executed in this quarter and the next.

1:30 pm Buzzing: Shares of Larsen and Toubro (L&T) fell 2.6 percent intraday after Deutsche Bank has downgraded the stock to hold and cut price target to Rs 1,560 apiece. The brokerage also slashed earnings estimates by 2 percent/16 percent for FY16/17 due to demand pushback expectations. "New orders are being deferred/pushed back in both India and the Middle East - barring a few state segments such as Andhra.

Consequently, with rising competitive intensity and estimating the company to be selective in bidding, we cut order inflow (core engineering & construction) FY16E/17E EPS by 20/18 percent, leading to earnings cuts of 2 percent/16 percent," it explains.

The market is still spiralling downwards. The Sensex is down 69.11 points or 0.3 percent at 25787.59 and the Nifty slips 29.70 points or 0.4 percent at 7842.55. About 1025 shares have advanced, 1298 shares declined, and 87 shares are unchanged.

NTPC, Maruti Suzuki, Sun Pharma, HUL and ITC are top gainers while Tata Steel, Tata Motors, Vedanta, Hindalco and L&T are major losers. Aviation stocks like SpiceJet and Jet Airways rally 5-8 percent.

Meanwhile, weak inflation figures in India have provided "elbow room" to the Reserve Bank to lower rates by 25 bps this month, say global brokerages.

Financial services majors like HSBC, DBS, Bank of America Merrill Lynch (BofA-ML) and State Bank of India expect RBI to go for a 25 basis points rate cut during its policy review meet later this month.

Retail as well as wholesale price based inflation dived to new lows in August on falling global commodity prices.

Consumer Price Index based inflation, which RBI considers as benchmark, eased to 3.66 percent in August from 3.69 percent the previous month, while the one based on Wholesale Price Index tumbled for the 10th straight month to (-)4.95 percent compared with a provisional (-)4.05 percent in July.

12:55 pm Market Update: Benchmark indices were little changed over the last half an hour of trade.The BSE Sensex fell 83 points to 25773 and the Nifty declined 32 points over its previous close.

Tata Steel (-4 percent), Vedanta (-3 percent), Tata Motors (-3 percent) and Hindalco (-3 percent) were the big losers in the Nifty.

Other laggards in the index were Bank of Baroda (-2 percent), Hero Motocorp (-2 percent), Idea Cellular (-1 percent) and PNB (-1 percent).

Gainers included Tech Mahindra (2 percent), NTPC (2 percent), Cairn India (2 percent) and Power Grid Corp (1 percent).

In sectoral performance as reflected by the respective indices, metals (-1.7 percent), capital goods (-1.4 percent), consumer durables (-1.1 percent) and auto (-0.9 percent) were under pressure, while FMCG (0.5 percent), IT (0.1 percent) and power (0.1 percent) gained.   

Bharat Forge (-6 percent), Jain Irrigation (-3 percent), Jaiprakash Asso (-3 percent), JSW Energy (-3 percent) and Reliance Infra (-2 percent) were the big losers in the midcap space. Other notable laggards included Rel Capital (-2 percent), CRISIL (-2 percent), Strides Arcolab (-2 percent), Reliance Power (-2 percent) and Century (-2 percent).

The rupee was quoting at 66.44 to the dollar, down 12 paise over its previous close.

In other asset classes, gold was trading at USD 1108.2/ounce, down USD 1.00 or 0.1 percent over its previous close.

Brent crude was trading at USD 46.35/barrel.

12:45 pm Europe Update: European equities opened higher today as investors keep an eye on the next policy meeting of the US Federal Reserve on Thursday at which it could decide to increase interest rates.

The London FTSE 100 index was roughly flat, while the German DAX and French CAC were both up around 0.3 percent.

Investors in Europe are awaiting the highly-anticipated policy meeting and interest rate decision of the Fed later this week. The central bank's Open Market Committee meets on Wednesday and will announce its rate decision Thursday.

According to a poll by Reuters in August, the US central bank is widely expected to raise short-term interest rates as early as September, having not raised rates since 2006 while maintaining them at near zero. However, volatility in global markets of late and renewed concerns about China have prompted some analysts to doubt that the Fed will go ahead this month.

12:40 pm Rate cut possible?: Weak inflation figures in India have provided "elbow room" to the Reserve Bank to lower rates by 25 bps this month, say global brokerages.

Financial services majors like HSBC, DBS, Bank of America Merrill Lynch (BofA-ML) and State Bank of India expect RBI to go for a 25 basis points rate cut during its policy review meet later this month.

Retail as well as wholesale price based inflation dived to new lows in August on falling global commodity prices.

Consumer Price Index based inflation, which RBI considers as benchmark, eased to 3.66 percent in August from 3.69 percent the previous month, while the one based on Wholesale Price Index tumbled for the 10th straight month to (-)4.95 percent compared with a provisional (-)4.05 percent in July.

"These weak inflation numbers give RBI the elbow room to lower rates by 25 bps this month," DBS said in a note. BofA-ML in a research note said "We grow more confident of our September 29, 25 bps RBI rate cut call after August CPI inflation came in at 3.66 percent and July CPI inflation was revised down to 3.69 percent from 3.78 percent earlier."

It further added that the CPI inflation remains well on track to the RBI's "under 6 percent" January 2016 forecast, notwithstanding a second consecutive poor monsoon.

"We continue to believe that the Modi government will use supply-side measures rather than the RBI to fight a rain shock. On balance, we continue to expect the RBI to cut 25 bps each on September 29 and February 2," BofA-ML said.

12:20 pm Interview: With the Indian tyre industry facing Chinese dumping, Koshy Varghese, Executive VP-Marketing at MRF says the government must impose a safeguard duty on tyre imports as an urgent protection step. Right now, a Chinese radial tyre costs Rs 14,000 compared to Rs 20,000 for an Indian tyre, says Varghese in an interview to CNBC-TV18.

In April-June quarter, the truck-tyre imports rose nearly 75 percent year on year

He expects domestic tyre industry to grow at single digit on weak demand and soft raw material prices. Rural demand in unlikely to lift in next 6-8 months, however, some greenshoots are visible on the commercial vehicle side, says Varghese. The company has already cut prices to the tune of 8 percent in the last one year. Owing to the slowdown, the company would now review the price cut decision periodically, he adds.

Also read - China steps on the gas to spark eco, Aug fiscal up by 26%

12:00 pm Market Check
The market continued to trade half a percent lower. The 30-share BSE Sensex fell 123.17 points to 25733.53 and the 50-share NSE Nifty declined 47.55 points to 7824.70.

The broader markets, too, caught in bear grip with the BSE Midcap and Smallcap indices falling 0.6 percent and 0.3 percent, respectively. About 970 shares have advanced, 1279 shares declined, and 89 shares are unchanged on the BSE.

Asian markets traded mixed as cautious sentiment ahead of the Fed meet prevails. Japan's Nikkei pared gains after Bank of Japan maintained its expansionary monetary policy at an annual pace of 80 trillion yen.

Maruti gained over 1 percent after RBI gave a nod for FIIs to invest upto 40 percent in the company against 24 percent earlier. Analysts say this will now pave way for additional free float, and hence inclusion in the MSCI.

Power Finance Corporation rose over 1 percent after Power Minister Piyush Goyal says that the government is working on a structure to reduce discom debt and is committed to bringing down discom losses in next 2-3 years.

Gujarat Gas re-listed on the exchnages today after amalgamation of its various subsidiaries with itself. The stock re-listed at a discount but Deutsche Bank sees any sharp decline in the stock as a buying opportunity.

L&T, ICICI Bank, Tata Motors, Axis Bank, Tata Steel, Hero Motocorp, Vedanta and Hindalco Industries dropped 1-4 percent.

11:55 am Interview: The newly listed arm of Biocon , Syngene International is targeting a growth of USD 250 million by FY2018, says the Chief Executive Officer (CEO) of the company, Peter Bains. Syngene has managed to maintain its margin in the range of 31 to 34 percent and will continue to do so, he says adding that the company is aiming for compounded annual growth rate (CAGR) of 20 percent. In an interview with CNBC-TV18, Bain says that the company is looking to expand its manufacturing services and turn it into a commercial venture in the future.

11:45 am BoJ monetary policy: The Bank of Japan kept monetary policy steady but warned that the country's exports and output were feeling the pinch from slowing demand in emerging markets. As widely expected, the BOJ reiterated its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen (USD 664 billion) through purchases of government bonds and risky assets. The policy board decision was made by an 8-1 vote.

11:30 am Buzzing: Shares of Bharat Forge slipped 5 percent intraday. Bank of America Merill Lynch has slashed target price by 16 percent to Rs 900 per share as weaker demand drives de-rating. The brokerage has also cut FY17 earnings per share (EPS) by 6 percent stating weaker exports and non-auto will hurt mix and margin. BoAML says weaker non-auto demand led by oil & gas sector and cyclical slowdown in the US heavy truck market in 2016 are key concerns for the company. In 1QFY16, non-auto declined 15 percent Q-o-Q and grew only 4 percent Y-o-Y, substantially lower than the 52 percent growth in FY15.

It also adds that reduction in volume growth to only 5.8 percent annually in Q1FY16 compared to 21 percent in FY15 has started hurting Bharat Forge stock's performance.

The market continues to struggle as capital goods, metals and auto stocks are down. The Sensex is down 63.88 points at 25792.82. The Nifty is down 27.80 points at 7844.45. About 967 shares have advanced, 1011 shares declined, and 95 shares are unchanged.

Tata Steel, Hindalco, Vedanta, Tata Motors and L&T are major laggards while Maruti, Sun Pharma, NTPC, HUL and ITC are top gainers in the Sensex.

Gold edged down to just above a one-month low, as European stocks rose ahead of a Federal Reserve policy meeting that will be scrutinized for clarity on when the US central bank will raise interest rates.

The Fed will kick off a two-day policy meet on Wednesday. Though some in the market still reckon a "lift-off" could come this week, the view is gathering steam that faltering global growth could push that back even into next year.

10:59 am Market Expert: Even if the Fed rate hike happens this week, Indian market is not going to see a major shake up as the worst bout of volatility is behind us, says Ajay Srivastava, CEO at Dimensions Consulting. However, there is not much enthusiasm among retail investors who are supporting the market this time round, he says.

He points out that the retail investors are far more circumspect and if this rally gets sold into, it will be very difficult to get them back.

He strongly believes there is one more leg of downsizing due during which market will test fresh lows. Srivastava is worried by the lack of visibility in capex cycle. The distress is far more glaring in rural India.

10:40 am Gujarat Gas relists: Shares of Gujarat Gas relisted on exchanges today. The stock has opened at Rs 680, down 8.5 percent compared to Rs 743.10 on May 26, when it got delisted.

It was trading at intraday low of Rs 646 on the National Stock Exchange, down 13 percent (at 10:31 hours IST). According to exchange, it is locked at 5 percent lower circuit at Rs 646 against opening price of Rs 680.

Currently the scrip is available in trade-for-trade segment for 10 trading days. The settlement of scrips available in this segment is done on a trade for trade basis and no netting off is allowed. The scrip should be in 5 percent price band for atleast 22 trading days, said the exchange.

The gas distributor was delisted in May for merger of various companies with itself. According to its composite scheme of arrangement, GSPC Gas Company, Gujarat Gas Company, Gujarat Gas Financial Services and Gujarat Gas Trading Company had merged with Gujarat Gas (formerly known as GSPC Distribution Networks).

With this merger, new entity - Gujarat Gas is largest city gas distributor with volumes of around 6.5 mmscmd (around 1.7 times higher compared to Indraprastha Gas).

10:20 am Buzzing: Shares of Nava Bharat Ventures gained 7 percent intraday as the company has entered into an agreement with Tata Steel for conversion of chrome ore into ferro chrome.

The arrangement will commence upon the receipt of ore and reductant from Tata Steel during this month.

This agreement is initially up to the end of March 2016 and extendable on mutually agreed terms for a further period of 4 years.

The agreement postulates that the entire smelting capacity of the Odisha plant is dedicated for Tata Steel to produce up to 70,000 MT of high carbon ferro chrome per annum.

10:00 am Market Check
The market is still flat with no immediate major triggers. The Sensex is up 13.56 points at 25778.88 and the Nifty slips 32 points at 7840.25.About 862 shares have advanced, 759 shares declined, and 74 shares are unchanged.

Maruti, ONGC, ITC, HUL and Coal India are top gainers while Vedanta, Hindalco, Tata Steel, HDFC and Hero MotoCorp are major losers in the Sensex.

Oil prices steadied early as traders closed short positions and took on new longs after markets tumbled in the previous session. Crude prices fell on Monday with the onset of lower demand autumn trading and as weak economic data out of China and soft gasoline prices RBc1 pressured the market.

There has even been growing competition amongst the lowest cost producers in the Middle East, such as Kuwait and Saudi Arabia, to undercut each other with discounts for supplies to their core markets in Asia.

On the demand side, Japanese manufacturers' confidence slumped the most in a year in September to an eight-month low and is forecast to worsen further as fears of a China-led global economic slowdown grow, a Reuters poll showed.

9:55 am Market outlook: Nandan Chakraborty, Axis Capital feels the market now is marginally lower than long-term average valuations as India remains an island of hope in a cloudy world.
 
According to him, exports and capex are vulnerable while consumption is expensive. Thus invest selectively, he advises.

He says top buys in the financial space are large private banks like HDFC Bank, ICICI Bank while HPCL will be key beneficiary of low crude prices. Within the infrastructure space, he likes L&T, Power Grid, NTPC and Tata Motors & Eicher Motors within the auto space.

9:45 am Buzzing: Shares of Maruti Suzuki India gained 2.2 percent in after the Reserve Bank of India has allowed foreign institutional investors to buy shares of the company.

The Reserve Bank of India on Monday notified that foreign institutional investors/registered foreign portfolios investors/qualified foreign investors can now invest up to 40 percent of the paid up capital of Maruti under the portfolio investment scheme.

Earlier FII investment limit was 24 percent. With this rise in limit, chances of inclusion in MSCI has increased.

9:30 am View on Fed: As the financial world turns its eyes toward the Federal Reserve and awaits the decision on interest rates, JPMorgan Chase's Adrian Mowat said that he believes a hike will be something positive for Asian markets. "I think it will mean a great sense of relief. Just get on with it," the company's chief emerging market and Asian equity strategist said in a CNBC "Squawk on the Street" interview. "I think the psychology of the central bank not moving ... when the marco-economic data is very strong, in particular when we look at those vacancy data points from last week, is a problem," Mowat added.

The market has opened marginally lower in early trade on profit booking after yesterday's rally. The Sensex declined 36.53 points to 25820.17 and the Nifty fell 20.40 points to 7851.85. About 361 shares have advanced, 292 shares declined, and 28 shares are unchanged on the BSE.

M&M, Vedanta, Bharti Airtel, Hero Motocorp, HDFC, Cairn India, Bosch and Power Grid Corp were early losers. Maruti Suzuki gained 1.90 percent. Sun Pharma, Cipla, Infosys, HDFC Bank, Tech Mahindra and BPCL were marginally in green.

The Indian rupee has opened marginally lower at 66.35 per dollar today against previous day's close of 66.33.

Ashutosh Raina of HDFC Bank said, "The market is keenly awaiting the outcome of FOMC meeting later this week. Markets expect Fed to keep rates on hold in this meeting in the face of global growth concerns."

"The USD-INR pair continues to trade in the 66-66.50/dollar range and should continue to trade this range till some clarity on policy action from central banks," he added.

The dollar remained close to a three-week low against a basket of major currencies ahead of this week's Federal Reserve meeting.

Asian markets are mixed. Japan and Korea are higher but the Taiwanese and Singapore markets are trading with mild cuts. 

The Nikkei has headed north this morning ahead of the Bank of Japan's policy decision.Consensus is for the central bank to maintain its expansionary monetary policy but some analysts are not ruling out the possibility of additional stimulus given recent growth concerns.

However, in the US stocks closed lower as investors eyed the Federal Reserve meeting later in the week.

In Europe too, stocks closed mostly lower as investors are cautious ahead of the US Federal Reserve's interest rate decision on Thursday.

From other asset class, the dollar held close to a three-week low against a basket of major currencies ahead of this week's Federal Reserve meeting.