Sensex ends in red, Nifty at 8400; TCS, Infosys drag 3-4%

13 Jan 2017

3:30 pm Market closing: The Sensex closed down 9.10 points at 27238.06, and the Nifty down 6.85 points at 8400.35. About 1215 shares have advanced, 1494 shares declined, and 346 shares were unchanged.

Axis Bank, ITC, GAIL, HDFC and Sun Pharma were top gainers while TCS, Infosys, NTPC, Maruti Suzuki and Dr Reddy's Labs were losers.

3:10 pm Interview: With fuel burn at 20 percent less than the existing fleet, the new airplane range will help reduce costs, said Ajay Singh, CMD of SpiceJet. The low-cost carrier, on January 13, announced a mammoth deal worth Rs 1,50,000 crore to purchase 205 aircraft from the US-based aircraft maker Boeing. The move is a part of the airline's expansion plans to domestic and international destinations.

The order was upgraded to additional 100 aircraft and purchase rights of over 50 planes of 737-8 MAX models and wide-body aircraft.

Singh noted the improved efficiency in fuel consumption due to the new fleet will open up new markets for SpiceJet both internationally and domestically.

3:00 pm Market update:

Sensex update as on 2:59PM 13 Jan 2017 pic.twitter.com/lgAW25DNHe

- BSE India (@BSEIndia) January 13, 2017

2:35 pm BSE IPO: BSE has set its initial public offering for January 23-25, according to a filing from India's second-biggest exchange, in a listing that bankers say could raise around Rs 13.5 billion (USD 198 million).

More than 300 shareholders in BSE, including Singapore Exchange and a Citigroup unit, will sell up to 15.4 million shares with a face value of Rs 2 each, according to its red herring prospectus filed with regulators.

The shares are expected to list on rival National Stock Exchange, on or around February 3, BSE said in the filing.

BSE's listing would come ahead of the National Stock Exchange, which filed for an IPO late last month with bankers saying it could raise as much as USD 1 billion.

2:20 pm Sikka on US policies: Stating that any "discernible pattern" of clients worrying about adverse visa policies is yet to be seen, Infosys CEO Vishal Sikka today expressed hope that policies of the new Trump administration would be friendly towards business, innovation and entrepreneurship.

"In terms of the new administration, the new President is going to take office next week. President-elect Trump himself is an entrepreneur and has a very business-friendly, innovation-oriented background. So, I expect that the policies of the administration are going to be friendly towards business, innovation and entrepreneurship," he said.

He added that if companies continue to focus on delivering value and innovation, "things will be okay".

2:00 pm Market Check
Benchmark indices extended losses amid volatility in afternoon trade with the Nifty struggling below 8400 level, dragged by further fall in technology stocks. Infosys cracked 3 percent and TCS 4 percent on profit booking after third quarter earnings.

The 30-share BSE Sensex was down 85.06 points at 27162.10 and the 50-share NSE Nifty fell 32.40 points to 8374.80. The BSE Midcap and Smallcap indices were down 0.3 percent each on negative breadth.

About 1478 shares declined against 1113 advancing shares on the BSE.

Markets in Europe were higher as investors digested data from China and waited for corporate earnings from the US later in the session. France's CAC, Germany's DAX and Britain's FTSE were up 0.4 percent each.

Tata Motors, Maruti Suzuki, NTPC, Hero Motocorp and Bajaj Auto were down more than 1 percent while HDFC, Axis Bank, ITC, ONGC, Sun Pharma and GAIL gained 1-3.5 percent.

1:30 pm Infosys boardroom: Though the H1-B visa policy is still unclear, expect US President-elect Donald Trump to be business-friendly in the long term, says Vishal Sikka, MD and CEO of Infosys. Pravin Rao, COO of the company, said that they remain positive on the Banking, Financial services and Insurance (BFSI) space and expect the manufacturing vertical to bounceback. He further said that the retail sector is likely to remain volatile in the days to come. The company's CFO, MD Ranganath told CNBC-TV18 that rupee depreciation gave a 30 bps advantage in margin terms for Q3 and the management is keeping a close eye on developments pertaining to the H1-B visa issue.

The market continues to drag as the Sensex is down 29.78 points or 0.1 percent at 27217.38, and the Nifty down 18.20 points or 0.2 percent at 8389. About 1153 shares have advanced, 1356 shares declined, and 326 shares are unchanged.

Axis Bank, HDFC, GAIL, Sun Pharma and ONGC are top gainers while TCS, Infosys, Tata Motors, NTPC and Maruti are losers in the Sensex.

Shares of SpiceJet rose over 4 percent after the company announced a deal worth Rs 1,50,000 crore with Boeing to purchase up to 205 new aircraft.

 With the earlier order for 55 planes and additional 100 new 737-8 MAX aircraft, the no-frills carrier now has firmed up order for a total of 155 planes, besides purchase rights for 50 B737-8 MAX and wide body aircraft.

Tracking a weak trend overseas, gold prices traded lower by 0.23 percent to Rs 28,328 per 10 grams in futures trade today as participants cut down their
bets.

Analysts attributed the slide in gold futures to a weak trend overseas. Meanwhile, gold declined 0.18 per cent, to USD 1,192.80 an ounce in Singapore.

12:59 pm Market Update: Benchmark indices remained listless in afternoon trade. The Sensex was down 30.21 points at 27216.95 and the Nifty fell 15 points to 8392.20.

12:45 pm Drug launch: Pharma major Lupin today said it has launched in the US market its generic version of morphine sulfate ER tablets used for management of severe pain.

The company said it has launched the morphine sulfate ER Tablets in strengths of 15 mg, 30 mg, 60 mg, 100 mg and 200 mg having received an approval from the US Food and Drug Administration (USFDA).

"Lupin's morphine sulfate ER tablets 15 mg, 30 mg, 60 mg, 100 mg and 200 mg are the AB rated generic equivalent of Purdue Pharma's MS Contin ER Tablets 15 mg, 30 mg, 60 mg, 100 mg and 200 mg," Lupin said in a statement.

12:33 pm New TCS CEO: Newly appointed Rajesh Gopinathan as CEO and MD of TCS, who replaces N Chandrasekaran, has big shoes to fill in.

Exuding confidence, the former TCS chief says his successor will take the country's largest IT services firm to "greater heights" and said that he has been groomed for the leadership role. And, Gopinathan hopes to continue with what the company has been doing in the past and also come up with new ideas.

Gopinathan, who has taken greater roles at the company, from CFO to CEO, joined TCS from Tata Industries in the year 2001. He worked across different geographies and units before being appointed CFO in 2013. Gopinathan is an alumni of Regional Engineering College, Trichy (now National Institute of Technology), and the Indian Institute of Management, Ahmedabad.

At a time when profits of competitiors of TCS were eroding, Gopinathan ensured that the company managed to retain its profitability.

12:20 pm Management change: Country's second biggest IT firm Infosys has elevated its President and Chief Delivery Officer, Ravikumar S, as the Deputy Chief Operating Officer.

He will report to Infosys COO U B Pravin Rao with immediate effect.

In addition to his current responsibility of heading the global delivery organisation, Ravikumar S will oversee certain strategic business enabling functions and will be based in India.

Infosys CEO Vishal Sikka said the appointment will provide "more bandwidth".

"Ravi is just amazing, he is an extraordinary colleague. Just look at the scale at which we operate, it is massive. So, Pravin and I both need more bandwidth," he said.

12:00 pm Market Check
Benchmark indices remained volatile in noon with the Nifty hovering around 8400 level, especially after three-day rally. Expected fall in December CPI inflation and unexpected growth in factory data despite currency demonetisation seems already priced in.

The 30-share BSE Sensex was down 11.71 points at 27235.45 and the 50-share NSE Nifty fell 6.70 points to 8400.50.

Mahesh Nandurkar of CLSA says uncertainty in the market will continue till the Union Budget 2017. The preference for India has reduced due to concerns over the taxation of foreign portfolio investors. He adds that India is expensive at current levels.

He feels government's focus in the upcoming Budget is expected to be on social infrastructure sector.

HDFC, Axis Bank and GAIL were top gainers, up 2-3 percent followed by Reliance Industries, ITC, ONGC, Sun Pharma and HUL while TCS and Infosys remained under pressure on profit booking post earnings.

11:40 am Coal scam: The CBI today filed the final report in further probe directed by special court in the coal scam case against Congress leader and industrialist Naveen Jindal, ex-Minister of State for Coal Dasari Narayan Rao and others.

Special Judge Bharat Parashar, however, took strong objection to the IO not filing the report in a proper format and asked him to do so by January 23.

The report filed before the court today contains CFSL reports, list of witnesses and their statements recorded by the CBI.

The court had earlier pulled up the CBI for delay in filing the report, saying it was affecting the progress of trial.

11:15 am Unemployment in India: Unemployment in India is projected to witness marginal increase between 2017 and 2018, signalling stagnation in job creation in the country, according to a UN labour report.

The United Nations International Labour Organisation (ILO) released its 2017 World Employment and Social Outlook report yesterday, which finds economic growth trends lagging behind employment needs and predicts both rising unemployment and worsening social inequality throughout 2017.

Job creation in India is not expected to pick up pace in 2017 and 2018 as unemployment rises slightly, representing a near stagnation in percentage terms.

11:00 am Market Check
Benchmark indices remained under pressure with the Nifty struggling below 8400 level, weighed by banks, technology and auto stocks. The broader markets also declined moderately on weak breadth.

The 30-share BSE Sensex was down 47.53 points at 27199.63 and the 50-share NSE Nifty fell 17.60 points to 8389.60. About 1229 shares declined against 933 advancing shares on the BSE.

Infosys and TCS shares plunged 2-3 percent after third quarter earnings that overall were in line with analysts' expectations.

However, index heavyweights HDFC, Reliance Industries and ITC continued to support the market,  up 0.6-1.6 percent.

Asian markets were mixed as investors digested China's full-year trade figures in yuan-terms and waited for more dollar-denominated data to be released.

Mainland Chinese shares were lower after official data showed that Chinese exports dropped 2 percent on-year in yuan terms in 2016, while imports picked up 0.6 percent.

10:15 am Expansion: Adani Ports and SEZ will invest Rs 6,000 crore for the development of third phase of Mundra Port.

The upcoming capacity expansion of Mundra Port, touted as one of the top multi-purpose ports in the country in terms of traffic held, would lead to employment generation for 600 people, sources said.

A token MoU to this effect was signed in the presence of Gujarat Deputy Chief Minister Nitin Patel at the Vibrant Gujarat Global Summit.

Essar Ports too plans to develop port facilities along the Gujarat coast at an investment of about Rs 10,600 crore, a move that is expected to result in employment generation opportunities for 1,000 people.

10:00 am Market Check
After a initial spurt in early trade, the market has slipped into red dragged mostly by Tata Group stocks. The Sensex is down 12.27 points at 27234.89 and the Nifty is down 13.40 points at 8393.80. About 835 shares have advanced, 931 shares declined, and 271 shares are unchanged.

Tata group stocks TCS, Tata Steel and Tata Motors are down 1-2 percent. Natarajan Chandrasekaran, the CEO and Managing Director of Tata Consultancy Services , has been named the new Chairman of Tata Sons, roughly three months after the former Chairman Cyrus Mistry was unceremoniously ousted.The new chairman will take charge from February 21.

Infosys is down 1 percent and Dr Reddy's Labs are losers in the Sensex. Among gainers are ONGC, Coal India, HDFC, GAIL and HUL.

Meanwhile, oil prices edged up, supported by reports on details of OPEC output cuts, although lingering doubts over producer compliance with supply reduction targets weighed on the market.

Traders said that prices were also supported by comments from top crude exporter Saudi Arabia that its output had fallen below 10 million bpd, levels last seen in early 2015. That would also mean that the kingdom has cut production by more than the 486,000 bpd it agreed to under a global deal to stem a fall in oil prices.

9:55 am Earnings review: Girish Pai, Head of Research at Nirmal Bang Institutional Equities, said that the guidance revision is a definite positive in the short-term. However, he is more worried for medium and long-term growth on both structural and cyclical parameters.

Margins, too, will be a big worry, he said, adding that changes in the H1B visa hike could lead to 100-350 basis points margin cut for the IT companies.

Moshe Katri, MD of Wedbush Securities said that margins and performance in the financial services are the big positives from Infosys.

Infosys tightening its guidance for the ongoing fiscal was on expected lines. Moshe is neutral on the company.

9:45 am Macro data: India's retail inflation rate grew 3.41 percent in December from November's 3.63 percent, confirming fears of weak demand as households, hit by a demonetisation-induced cash crunch, put off spending. Low inflation levels can indicate poor demand and weak economic activity. The moderation is sharper on an annualised basis.

Factory output grew by a surprisingly robust 5.7 percent in November, running contrary to retail sales data showing slide in household spending and muted corporate investment hit by an economy-wide cash-crunch. Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country's business landscape.

9:30 am Results: Tata Consultancy Services , the country's largest IT services provider said its third quarter (October-December) profit increased 2.9 percent sequentially to Rs 6,778 crore, driven by the strong digital business and great execution work. It touched USD 1 billion-mark in profit for the first time. Revenue during the quarter increased 1.5 percent to Rs 29,735 crore and dollar revenue growth was 0.3 percent at Rs 4,387 crore compared with previous quarter. Constant currency revenue growth for the quarter was at 2 percent with volume growth of 1 percent on sequential basis.

The market has opened higher with a big push from Infosys. The Sensex is up 125.98 points or 0.5 percent at 27373.14, and the Nifty up 31.10 points or 0.4 percent at 8438.30. About 546 shares have advanced, 185 shares declined, and 219 shares are unchanged.

Infosys is up 3 percent on its Q3 results.Infosys has reported a 2.8 percent sequential growth in third quarter profit at Rs 3,708 crore and a 0.2 percent degrowth in revenue at Rs 17,273 crore. Dollar revenue declined 1.4 percent to USD 2,531 crore compared with previous quarter.

Infosys revised its full year revenue guidance to 8.4-8.8 percent from 8-9 percent in constant currency.

BHEL, ONGC, Coal India and L&T are gainers while ITC, TCS, Dr Reddy's Labs, Bahrti Airtel and Asian Paints are losers in the Sensex.

The Indian rupee opened lower by 7 paise at 68.16 per dollar on Friday against previous close 68.09.

Bhaskar Panda of HDFC Bank said, "This week saw the dollar Index come down to trade below 101 levels. Given the dollar weakness, we expect the USD-INR pair to trade in a range of 67.90-68.15/dollar today."

The dollar index recouped some of its losses but still trades lower as Trump trade loses steam. The yen traded at 114.8 per dollar, on course for a 2 percent gain this week.

Asian shares dipped but remained on track for weekly gains while the dollar was poised for a losing week, as investors weighed whether President-elect Donald Trump would stress growth-boosting steps when he takes office.

On Wall Street, major indexes finished lower a day after Trump failed to elaborate on his economic stimulus plans in his first news conference since his Nov. 8 election victory.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent, after rising to its highest levels since late October in the previous session. It was up 1.8 percent for the week.

Japan's Nikkei stock index rose 0.4 percent, on track to shed 1.2 percent for the week.

Many investors remained hopeful that markets will get a lift from a wave of financial deregulation that could follow Trump's inauguration, including a rollback of some of the Dodd-Frank financial reform that Congress enacted after the financial crisis and bank bailouts.