Sensex ends 354 points lower, Nifty below 8400; Sun Pharma up

12 Aug 2015

03:30 pm Market close: The market has ended with sharp loses. The Sensex was down 353.83 points or 1.3 percent at 27512.26, and the Nifty slipped 108.55 points or 1.3 percent at 8353.80. About 711 shares have advanced, 2124 shares declined, and 160 shares were unchanged.

Infosys, Sun Pharma, TCS, Wipro and Lupin were top gainers while Vedanta, Hindalco, Coal India, SBI and Tata Motors.

03:15 pm Gold check: Gold prices soared by Rs 600, its biggest one-day surge this year, to trade at its highest level in more than three weeks at Rs 26,000 per ten grams today, tracking uptrend in the global bullion market and on a seasonal pick up in demand from jewellers and retailers.

The precious metal again topped USD 1,100 an ounce mark in the global market. The depreciation in rupee, which plunged to almost two-year low against the dollar, also supported the upside in the global prices as it would make imports costlier.

In the forex market, rupee was trading 75 paise lower at 64.94 (intra-day) against the American currency. Silver also rose sharply by Rs 640 to Rs 35,700 per kg on increased offtake by industrial units and coin makers.

03:00 pm Market Update: The Sensex plunged 352.58 points or 1.27 percent to 27513.51 and the Nifty tanked 118.10 points or 1.40 percent to 8344.25.

About 651 shares have advanced, 2132 shares declined, and 153 shares are unchanged on the BSE.

02:45 pm Earnings: Ashok Leyland surpassed analysts' expectations on every parameter on Wednesday. The country's second largest commercial vehicle maker turned profitable with first quarter net at Rs 159.3 crore against loss of Rs 47.9 crore in the year-ago period. Strong operational performance & revenue and lower interest cost helped the company post strong bottomline.

"Investments in many new products and continued strict discipline on cost have helped boost results," said Vinod K Dasari, managing director.

Profit was expected at Rs 122 crore on revenue of Rs 3,724 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Revenue grew by 55 percent year-on-year to Rs 3,841.2 crore, driven by strong volume growth. Realisation increased 9.7 percent to Rs 13.6 lakh per unit in June quarter compared to Rs 12.42 lakh per unit.

The company sold 28,190 vehicles in Q1FY16, a growth of 41.7 percent over 19,940 vehicles sold in the same quarter last fiscal. Medium and heavy commercial vehicles sales rose by 44.1 percent to 21,489 units and light commercial vehicles volumes (Dost) jumped 33.2 percent to 6,701 units.

Operating profit (earnings before interest, tax, depreciation and amortisation) spiked 3.8 times year-on-year to Rs 389 crore and margin expanded by 610 basis points to 10.2 percent in June quarter against forecast of 3.2-fold rise in operating profit and 470 basis points margin expansion.

02:25 pm Will interest rate fall?: The government on Wednesday said the macro-economic scenario has improved significantly on account of revival of growth and subdued inflation and exuded confidence that interest rates will decline in coming years.

In his Medium-Term Expenditure Framework Statement tabled in Parliament, Finance Minister Arun Jaitley also expressed commitment of the government to cut fiscal deficit and push subsidy reforms.

"Macro-economic outcomes have improved significantly, primarily with the revival of economic growth and subsidence of inflationary tendencies," Jaitley said.

GDP has improved from 6.9 percent in 2013-14 to 7.3 percent in 2014-15. It's expected to be 8-8.5 percent in the current financial year. On the price situation, he said the headline WPI inflation averaged (-)2.4 percent during April-June 2015.

The retail inflation, measured by CPI, declined to 6 percent in 2014-15 from 9.5 percent in 2013-14 and averaged 5.1 percent in April-June 2015.

"With fiscal deficit coming down, and easing of inflationary pressure, it's expected that interest rates would be falling in years to come," he said.

RBI, since January 2015, has loosened key benchmark rates by a total of 0.75 percent in three tranches and may reduce it further depending on macro-economic data and monsoon.

The government, Jaitley said, is committed to bringing down the fiscal deficit to 3.5 percent in 2016-17, and 3 percent in 2017-18.

02:00 pm Market Check
The market saw further selling pressure in afternoon trade due to China currency devaluation fears. The Sensex plunged 293.93 points or 1.05 percent to 27572.16 and the Nifty fell 95.05 points or 1.12 percent to 8367.30, dragged by banking & financials, capital goods, auto and oil stocks. However, technology and healthcare stocks bucked the trend on sharp fall in rupee.

The rupee fell to a two-year low against the dollar after yuan devaluation extended a sell-off in most Asian and Emerging market currencies, down 64 paise to 64.84 a dollar. Ananth Narayan of Standard Chartered says that rupee depreciation to 65-65.50 level will be good for economy.

The broader markets slipped 2 percent as about 706 shares have advanced against 2026 shares declined on the Bombay Stock Exchange.

Ajay Srivastava of Dimensions Consulting says capital goods and bulk drugs companies will be impacted by China currency devaluation and inflow of cheaper goods from China. The technology sector is the safest bet at this point, he adds.

Global markets continued to reel under pressure on yuan devaluation fears. European markets down almost 2.5 percent while markets like Hang Seng closed with cut of almost 600 points.

With 2 days of the monsoon session left, Parliamentary affairs minister Venkaiah Naidu condemned the opposition for not allowing parliament to function. But with an adamant congress, government is unlikely to succeed in getting the GST Bill through.

Meanwhile, India Inc started an online drive urging parliamentarians to legislate, saying the logjam is hurting the economy.

1:55 pm Buzzing: Shares of Claris Lifesciences climbed more than 5 percent on getting prior approval supplement (PAS) for Furosemide injection in the US. This drug is used for the treatment of fluid retention (edema) and swelling caused by congestive heart failure, liver disease, kidney disease etc.

The company had received original approval for this ANDA in January 2014 and was selling products in the US. However, since January 2015, it has been facing supply issues from its raw material supplier and has not been able to supply its product in the US.

1:45 pm Interview: High interest and depreciation cost of two new projects weighed on the June quarter earnings, Paresh Mehta, Chief Financial Officer (CFO) of Ashoka Buildcon told CNBC-TV18. The company reported consolidated income of Rs 630.2 crore and its net profit decreased to Rs 12.38 crore from Rs 36.58 crore during same period last year.

"We being primarily a road engineering, procurement & construction (EPC) player, our road order book looks lower because of the low bidding, which has happened in the past two years," Mehta said. However, he expects order inflows from third quarter onwards. Toll revenue grew nearly 60 percent in the June quarter. Traffic grew 5-6 percent. Mehta expects further increase by 5 percent to 7 percent this year.

1:30 pm Terming GST as one of the most promising reforms on anvil, global giant HSBC on Wednesday said the bill has been "watered down" but can still add a "sizeable" 60 basis points to India's GDP growth rate.

The Goods and Services Tax (GST) seeks to replace all indirect taxes with a uniform nationwide levy.

 The bill has been approved by the Lok Sabha and it was referred to a Rajya Sabha Select Committee during the last Parliament session.

HSBC said the benefits of the country's "watered down but still powerful GST reform" could be immense.

The market is falling further with the Sensex down 179.38 points or 0.6 percent at 27686.71. The Nifty is down 62.55 points or 0.7 percent at 8399.80. About 755 shares have advanced, 1894 shares declined, and 152 shares are unchanged.

Sun Pharma, Infosys, Tata Steel, TCS and Wipro are top gainers in the Sensex. Among the losers are Hindalco, Coal India, Tata Motors, Vedanta and Bharti Airtel.

The rupee is slipping away, touching 65 per dollar.

It is a good thing if the rupee depreciates to 65.0-65.50 to the US dollar, as our currency is still over valued in REER (real effective exchange rate) terms, says Ananth Narayan, Head, Financial Markets, Standard Chartered Bank.

"The reality is India is the most over valued currency over the last two years," he tells CNBC-TV18. "Earlier, China was leading the pack. Now that China has moved, India stands out as a sore thumb as the most over valued currency among all major currencies," he says.

12:55 pm Market Update: Equity benchmarks remained under pressure. The Sensex declined 168.32 points to 27697.77 and the Nifty fell 61.20 points to 8401.15. About 807 shares have advanced, 1777 shares declined, and 148 shares are unchanged on the BSE.

12:45 pm Earnings: Private sector lender City Union Bank's first quarter net profit increased 12 percent year-on-year to Rs 111.5 crore, driven by strong net interest income and operating profit despite fall in other income.

Net interest income, the difference between interest earned and interest expended, grew by 19.8 percent to Rs 223.6 crore compared to Rs 186.7 crore in the same quarter last fiscal.

Non-interest income (other income) dropped 5.2 percent year-on-year to Rs 104.9 crore while operating profit climbed 14.2 percent to Rs 197.2 crore in the quarter ended June.

Provisions for bad loans in Q1 increased 5.6 percent to Rs 45.1 crore compared to Rs 42.7 crore in the year-ago period but sequentially declined 22.4 percent from Rs 58.1 crore.

Asset quality weakened a bit with the gross non-performing assets (NPA) rising 15 basis points sequentially and 10 bps year-on-year to 2.01 percent. Net NPA increased to 1.32 percent in June quarter from 1.30 percent in March quarter and 1.28 percent in same quarter last year.

12:25 pm Further Yuan fall possible?: The People's Bank of China (PBOC) on Tuesday morning allowed its currency yuan to depreciate close to 2 percent against the dollar. The development sent most global markets into a tizzy with all of them closing significantly in the red.

US' Dow index, European markets and German shares saw strong hammering on the yuan devaluation as it raised concerns about the Chinese economy and the likelihood of a currency war.

Eshwar Prasad, former IMF China chief says the Chinese central bank is using every tool in its arsenal to crop up growth, but other monetary measures such as cuts in banks' reserve ratios, interest rates are not seeing enough traction.

With the Chinese government's focus on restricting outflows, there will be a significant pressure on the yuan to depreciate further, suspects Prasad.

He expects the PBOC to allow yuan to fall further 3- 4 percent, but in a more gradual way.

12:00 pm Market Check
The market continued to be weak in noon trade with the Sensex falling more than 100 points weighed down by metals, auto and cement stocks. The BSE Midcap underperformed benchmarks, down 1 percent.

The 30-share BSE Sensex declined 114.42 points to 27751.67 and the 40-share NSE Nifty slipped 44.85 points to 8417.50. About 847 shares have advanced, 1692 shares declined, and 139 shares are unchanged on the BSE.

Yuan devaluation weighed on global equities. Asian markets declined with Japan's Nikkei down over 1 percent. Former IMF China chief Eswar Prasad says that the PBOC may allow yuan to depreciate 3-4 percent from current levels. Chief economic advisor Arvind Subramaniam believes that devaluation of yuan is aimed at reducing spreads between onshore & offshore rates.

The rupee fell to a two-year low against the dollar after yuan devaluation extended a sell-off in most Asian and emerging market currencies. Ananth Narayan, Standard Chartered Bank says that rupee depreciation to 65-65.50 levels will be good for economy.

Coal India plunged more than 4 percent as sources say the finance ministry will seek the cabinet's nod for the 10 percent stake sale which could fetch nearly Rs 25,000 crore. Also the company will report its numbers today.

Steel stocks gained after reports indicated that the government will raise import duty on some base metals including iron & steel by 2.5 percent, though there has been no official confirmation yet.

11:50 am Indirect tax: The Finance Ministry said a steady 37 percent growth in indirect tax collections in four months to July reflects that underlying momentum in the economy is improving.

"These collections indicate that the underlying momentum in the economy continues to improve across all sectors," Chief Economic Advisor Arvind Subramanian told reporters here.

Indirect tax revenue jumped over 37 percent to over Rs 2.1 lakh crore in April-July of the current fiscal on the back of higher excise duty mop-up.

11:30 am Monsoon session: Just two days left for the Monsoon session of Parliament to end and it seems unlikely that the government will able to pass the much-awaited Goods and Services Tax Bill in this session.

Amidst uproar by opposition parties, Finance Minister Arun Jaitley on Tuesday introduced the GST Bill in the Rajya Sabha. However, discussions could not be held on the same due to the pandemonium forcing the Speaker to adjourn of the House for the day.

Congress President Sonia Gandhi has told her MPs that they must not budge from the party's stance-- on not allowing house to function over the row surrounding former Indian Premier League chief Lalit Modi and Vyapam scam.

The market has recovered a bit with the Nifty over 8400 level. The 50-share index is at 8423.70, down 38.65 points or 0.5 percent. The Sensex is down 98.29 points or 0.3 percent at 27767.80. About 744 shares have advanced, 1519 shares declined, and 132 shares are unchanged.

Sun Pharma, Infosys, Tata Steel, TCS and Lupin are top gainers while Hindalco, Coal India, Tata Motors, Vedanta and Bharti Airtel are among losers in the Sensex.

Crude oil prices fell again as China allowed its currency to fall sharply for a second day, triggering concerns over the country's economic health just as oil production hit multi-year highs.

Brent futures initially edged up before continuing their slide of the last two months as China's yuan hit a four-year low, slipping further a day after authorities devalued the yuan in a move to support its struggling economy and which sparked fears of a global currency war.

A lower yuan erodes Chinese purchasing power for dollar-denominated imports like oil, potentially hitting fuel demand.

10:55 am Market outlook: China using devaluation of currency as a constant policy tool is a big worry for India and a government response is needed to counter the impact on Capital Goods sector, bulk drug businesses, Consumer Durables, Tyres, and Indian exporters to Europe, says Ajay Srivastava, CEO of Dimensions Consulting.

Alarmed over the situation, Srivastava said one must pare down expctations unless the government takes some steps. Inspite of the downturn, investors in good quality stock will not get butchered. There are fundamental stocks that will perform and the advise is to "avoid speculation and return to fundamentals," Srivastava said.

10:45 am Market check: The Sensex is down 111.47 points or 0.4 percent at 27754.62, and the Nifty is down 42.90 points or 0.5 percent at 8419.45.
About 687 shares have advanced, 1534 shares declined, and 120 shares are unchanged.

10:30 am Result poll: Domino's pizza franchise owner Jubilant Foodworks is expected to post a strong April-June quarter. Its Q1 net profit is seen up 26 percent at Rs 35 crore against Rs 27.7 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, it is likely to see revenue growth at 25 percent, rising to Rs 597 crore compared to Rs 477 crore on yearly basis. EBITDA is seen up 31 percent at Rs 78 crore against Rs 59.3 crore while EBITDA margins may stand at 13.1 percent versus 12.4 percent, year-on-year.

The market is still dragging. The Sensex is down 222.81 points or 0.8 percent at 27643.28 and the Nifty is down 74.80 points or 0.9 percent at 8387.55. About 479 shares have advanced, 1416 shares declined, and 106 shares are unchanged.

Hindalco, Coal India, Tata Motors, Vedanta and Bharti Airtel are major laggards while Sun Pharma, Infosys, TCS, Tata Steel and Wirp are top gainers.

Gold gained for a fifth session in a row to trade near a three-week high, benefiting from weaker equities after China's devaluation of the yuan stoked fears of a currency war.

China's surprise 2 percent devaluation of the yuan on Tuesday, seen as a move to bolster a flagging economy, was condemned by US lawmakers as a grab for an unfair export advantage. The move hit global equities, prompting some investors to seek safe-haven assets such as gold which has now recovered around 3 percent from a 5-1/2-year low of USD 1,077 during a late July rout.

09:45 am Market Update: The Sensex fell 202.41 points to 27663.68 and the Nifty dropped 64.30 points to 8398.05. About 505 shares have advanced, 1290 shares declined, and 101 shares are unchanged on the BSE.

09:35 am Oil Update: Crude oil prices fell again as China allowed its currency to fall sharply for a second day, triggering concerns over the country's economic health just as oil production hit multi-year highs.

Brent futures initially edged up before continuing their slide of the last two months as China's yuan hit a four-year low, slipping further a day after authorities devalued the yuan in a move to support its struggling economy and which sparked fears of a global currency war.

A lower yuan erodes Chinese purchasing power for dollar-denominated imports like oil, potentially hitting fuel demand.

Benchmark Brent futures were down 31 cents at USD 48.87 per barrel. US crude was trading at USD 43.02 per barrel, down 6 cents from Tuesday when it marked it lowest settlement since March 2009.

09:15 am Market Check
The market has opened lower on global weakness, tracking China's yuan devaluation. The Sensex fell 115.03 points to 27751.06 and the Nifty declined 39.35 points to 8423. About 345 shares have advanced, 669 shares declined, and 73 shares are unchanged on the BSE.

Coal India lost 3 percent as sources said the Finance Ministry will seek the cabinet's nod for the 10 percent stake sale which could fetch nearly Rs 20,000 crore. The company is also expected to report numbers today.

Hindalco, too, fell 3 percent after Novelis posting loss of USD 60 million in June quarter.

Tata Motors, SBI, ICICI Bank, NMDC (post weak earnings) and HDFC lost 1-3 percent.

However, Tata Steel rallied 2.63 percent and Sun Pharma gained 2.43 percent after Q1 earnings. Infosys, TCS, Wipro and Tech Mahindra rallied on sharp fall in rupee.

The rupee fell sharply in early trade on China's yuan devaluation. The currency has opened at 64.55 a dollar, the lowest level since September 2013, down 36 paise compared to 64.19 per dollar in previous session.

Ashutosh Raina, HDFC Bank said the depreciation of the Chinese Yuan has sent global markets into a tizzy.

The entire Asian currency basket has been impacted and the USD-INR currency pair has been no exception with the pair nearing near-term lows, he added.

Raina expects the pair to trade weak in a range of Rs 64.20-64.50/USD for the day.

The yuan is under pressure after Chinese central bank surprised markets by devaluing it. The dollar index was trading above the 97 mark.

US markets closed in the red and the Asian markets too are trading lower as the impact from China's surprise yuan devaluation lingered.European equities too tumbled to close sharply lower.

In other asset classes, crude oil fell over 4 percent china devalued its currency while a new projection showed non-opec producers were more resilient than expected to keeping output high amid low prices

Precious metal gold remained above USD 1100 an ounce.