Sensex falls 160 points; HUL, ONGC, ICICI Bank laggards
13 Jan 2015
03:30 pm Market close: The market ended lower. The Sensex ended down 159.54 points at 27425.73 and the Nifty slipped 23.60 points at 8299.40. About 1389 shares have advanced, 1535 shares declined, and 332 shares were unchanged.
Top gainers are M&M, Wipro, Coal India, Cipla and Dr Reddys Labs. Major losers are ONGC, ICICI Bank, Hero Motocorp, Tata Steel and Tata Power.
03:10 pm RBI buying dollars?
The RBI was likely buying dollars via state-run banks starting at around 62.02 levels to prevent a further appreciation in the rupee, four traders said.
The partially convertible rupee was trading after moments earlier hitting as much as 61.0175, its strongest level since December 10.
Traders estimated the central bank likely bought USD 200 million to USD 500 million so far in the day.
02:50pm Market Update
The market saw selling pressure in last hour of trade on profit booking. The Sensex lost 241.36 points to 27343.91 and the Nifty dropped 48.35 points to 8274.65 weighed by technology, banks and oil stocks.
About 1275 shares have advanced, 1551 shares declined, and 335 shares are unchanged on the BSE.
02:25pm Fall in oil prices a boon?
RBI Deputy Governor Urjit Patel says "dramatic" fall in global oil prices a "boon" for Indian economy, may help save USD 50 billion on import bill.
RBI deputy says fall in oil prices to increase disposable incomes, reduce input cost of businesses and bring down energy subsidy burden
Both Brent and US. crude are at their weakest since early 2009 after dropping for seven straight weeks as oversupply clashes with slowing demand. They have plunged almost 60 percent since June last year, reports Reuters.
"It (oil fall) saves, on an annualised basis, around USD 50 billion, roughly, one-third of our annual gross POL (petroleum, oil and lubricants) imports of about USD 160 billion ... But our external situation undoubtedly improves."
02:00pm Market Check
The market gained marginal strength amid consolidation in afternoon trade with the Nifty rising above 8350 supported by banks, cement and paint stocks. The broader markets outperformed frontline indices with market breadth positive. The BSE Midcap index gained 0.7 percent and Smallcap rose 0.5 percent.
The 30-share BSE Sensex advanced 9 points to 27594.27 and the 50-share NSE Nifty rose 28.70 points to 8351.70. About 1524 shares have advanced while 1212 shares declined on the Bombay Stock Exchange.
Veteran investor Ramesh Damani says all indications are good for bull market to continue. It would be a mistake to short or exit this market, says Damani, adding he will continue to be bullish on HUL as it never dilutes its equity and represents good investment.
Private sector lender IndusInd Bank matched street expectations by reporting a 28.8 percent growth in profit at Rs 447 crore for the quarter ended December 2014. The profit was supported by higher other income & net interest income and lower provisions. Net in the year-ago period was Rs 347 crore.
The rupee strengthened against the dollar for the fifth consecutive trading session, appreciating marginally to 62.05 versus a close of 62.16 in previous session while bond yields fell to 7.76 percent, the lowest since July 15, 2013.
Global markets are buoyant today, Asian markets like Hong Kong gained almost 1 percent while European markets like FTSE and DAX also turned positive after initial losses. In commodities, oil extended its fall despite record China imports, Brent Crude fell 4 percent to USD 45.5 a barrel.
1:30 pm Interview: Most FMCG companies have a fairly decent proportion of their cost structure based on crude oil be it paraffin oil, detergent inputs or packaging material. So there will be gains definitely on the basis of falling prices, but it will vary on company's cost structure and product portfolio, says Harsh Mariwala, Chairman of Marico.
However, he expects the benefits to show in margins by Q1FY16 because of inventory stocks. Mariwala hopes to see some positive rub-off effect of falling crude oil prices on other commodities also, like coconut oil. The company had marginally raised price of 175-ml Parachute pack by 0.8 percent. ''In our case, we are very clear that if there is a price drop, then we will not hesitate to pass on the benefits to consumers,'' Mariwala said.
The market is still flat. The Sensex is down 52.08 points at 27533.19 and the Nifty is up 9.45 points at 8332.45. About 1420 shares have advanced, 1224 shares declined, and 345 shares are unchanged.
BHEL, Cipla, Axis Bank, Wipro and M&M are top gainers while ONGC, HUL, Infosys and GAIL are among the losers in the Sensex.
Oil prices continued their rout with Brent crude and US. WTI both falling to their lowest in almost six years, as a persistent global supply glut offset data showing record high imports by key consumer China.
The benchmark prices have plunged 60 percent from their 2014 peaks hit in June, dragged down by losses of more than 36 percent seen in the past seven weeks. Overseas investors bought Indian shares worth of Rs 245 crore on Monday, provisional exchange data showed, after selling shares worth USD 517.57 million in the past four consecutive sessions.
12:55pm Lakshmi Vilas Bank shares in demand
Private sector lender Lakshmi Vilas Bank has reported a profit of Rs 32.5 crore for the quarter ended December 2014, a growth 4.4 times compared to Rs 7.4 crore in the year-ago period. The growth in profit was largely led by higher other income and lower provisions while asset quality also improved significantly.
Net interest income, the difference between interest earned and interest expended, climbed 9.7 percent year-on-year to Rs 137.51 crore and other income (non-interest income) grew by whopping 59 percent to Rs 73.36 crore in the quarter gone by.
Provisions and contingencies declined 9.5 percent on yearly basis (up 20 percent sequentially) to Rs 61.2 crore during October-December 2014.
The bank has reported strong improvement in asset quality with the gross non-performing assets (NPA) falling 220 basis points year-on-year (down 32 bps quarter-on-quarter) to 3.40 percent in the third quarter of current financial year 2014-15.
12:30pm Interview
Forging and engineering player Bharat Forge has signed Memorandum of Understanding (MoU) to manufacture defence products, after Defence Minister promised quick 3-month clearances in defence projects.
Seeing a lot of potential in the defence sector, Amit Kalyani, Executive Director, Bharat Forge said the company is set to invest Rs 600 crore in Gujarat plant, as Gujarat goverment is focusing on defence manufacturing. Given that the plant will be funded via internal accruals, the investment will happen over a phased period, based on order, he added.
12:00pm Market Check
Equity benchmarks continued to trade choppy in a tight range. The Sensex fell 30.81 points to 27554.46, but the Nifty rose 15.35 points to 8338.35 buoyed by some stocks like Asian Paints, UltraTech Cements.
The broader markets outperformed frontline indices with the BSE Midcap and Smallcap indices climbing half a percent each. The market breadth was also positive as about 1414 shares have advanced and 1072 shares declined on the Bombay Stock Exchange.
Asian Paints surged nearly 4 percent and Jet Airways gained 5 percent on lower crude prices. Also news of Air India recording profit for the month of December also boded well for the aviation industry.
ONGC lost 2 percent and Cairn India declined 1 percent due to fear of lower realisations. Hindustan Unilever snapped six-day gains, down nearly 2 percent.
UltraTech Cement topped the buying list on Nifty, up 5 percent after media report suggested that the cement maker dropped out of race for Holcim-Lafarge assets. The company hasn't participated in the final round of bidding, the report says.
Globally, Asian markets trimd losses after China trade data came in-line with estimates but the slump in oil prices weighed on sentiment. Brent continued to trade around 6-year lows, falling below USD 47 per barrel.
11:50 am Market outlook: There will always be corrections in any bull market, but investors would be better off not selling or going short for now, feels BSE broker Ramesh Damani. In an interview to CNBC-TV18, Damani said the market is entering a sweet spot. He says growth is picking up, interest rates are falling, and the government is pushing through reforms.
"There is lot of underlying strength in the market when one looks at the screen," Damani said. According to him, the breadth in the market (advancing stocks minus declining stocks), the quality of stocks making new highs and the kind of returns that investors have made reflect the strength. Damani said there are global concerns, but investors in India will reap the benefits of sitting through the pain of any likely corrections.
11:30 pm FII view: Things are improving at the macro level, but it could take some time for it to translate into corporate earnings, feels Vibhav Kapoor, Group Chief Investment Officer of IL&FS. In an interview to CNBC-TV18, Kapoor says he expects marginal earnings downgrades. This in turn could keep the market upswing in check, he says, adding that the medium term outlook remains positive.
Part of it is because of the steep fall in crude and metal prices, which will hurt earnings of the companies in both sectors. The other reason is because of too much expectations of a recovery at the ground level, which is not playing out as expected. Kapoor feels the investment cycle could take longer to pick up, also because of the government cutting down on expenditure to meet its fiscal deficit target.
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The market is almost in a slumber mode. The Sensex is down 4.46 points at 27580.81 and the Nifty is up 17.30 points at 8340.30. About 1446 shares have advanced, 883 shares declined, and 327 shares are unchanged.
BHEL, Cipla, Axis Bank, Hindalco, and Maruti are top gainers in the Sensex. Among the losers are ONGC, Infosys, HUL, Tata Motors and Tata Power.
Crude oil futures fell sharply by 22.28 percent to Rs 2,824 per barrel today as speculators engaged in trimming positions amid a weak trend in Asian markets. The trading sentiment remained weak in futures trade as oil extended its disconcerting plunge towards six-year lows in Asian trade today after Wall Street giant Goldman Sachs lowered its price forecast, adding to concerns about a supply glut and weak demand, analysts said.
Meanwhile, Brent yesterday plunged more than five per cent to close below USD 50 for the first time since April 2009, and WTI fell 4.7 percent to its weakest since March 2009.
10:30am Gold at 12-week high
Gold extended gains today to climb to its highest since October, boosted by safe-haven demand triggered by a continued slump in oil prices and weakness in some equities markets.
Asian stocks were mostly firmer on Tuesday after benign Chinese economic data, but concerns lingered, with oil trading close to its lowest in nearly six years.
Weaker oil prices tend to hurt gold as they reduce the need for the precious metal as a hedge against oil-led inflation. But as equity markets have been hit by the slump in oil prices and concerns have risen over its economic impact, flight-to-safety demand has bolstered the metal.
Gold, typically seen as an alternative investment to riskier assets such as stocks, rose as investors channelled money into the asset along with other safe havens such as the yen.
10:00am Market Check
The market remained in a consolidation mode from early trade today but the broader markets outperformed frontline indices with the BSE Midcap and Smallcap indices rising 0.6 percent each.
The 30-share BSE Sensex rose 12.23 points to 27597.50 and the 50-share NSE Nifty climbed 17.25 points to 8340.25. About 1248 shares have advanced, 700 shares declined, and 321 shares are unchanged on the BSE.
Things are improving at the macro level, but it could take some time for it to translate into corporate earnings, feels Vibhav Kapoor, Group Chief Investment Officer of IL&FS.
Kapoor says he expects marginal earnings downgrades. This in turn could keep the market upswing in check, he says, adding that the medium term outlook remains positive. Part of it is because of the steep fall in crude and metal prices, which will hurt earnings of the companies in both sectors. The other reason is because of too much expectations of a recovery at the ground level, which is not playing out as expected.
Shares of ITC, State Bank of India, Axis Bank, Cipla, Maruti Suzuki, Sesa Sterlite, Hindalco Industries, Bajaj Auto and Sun Pharma gained 0.5-2 percent. However, Infosys and ONGC fell more than 1 percent followed by Tata Motors, Reliance Industries, L&T and HUL with marginal loss.
9:50 am Share purchase: Hitherto unknown Kamlesh Auto has purchased shares of SpiceJet worth over Rs 6.3 crore through a bulk deal.
Kamlesh Auto acquired 35 lakh shares at a price of Rs 18.23 apiece. At that price, total value of the transaction is worth over Rs 6.3 crore, according to a filing by the carrier to the BSE.
The bulk deal comes at a time when the crisis-hit airline is expected to receive the first round of funding as part of an estimated USD 200 million investment plan.
SpiceJet had presented a revival plan to the Civil Aviation Ministry in late December but was asked to submit a revised plan with more details. he carrier's founding promoter Ajay Singh has also come to the rescue, with Singh and a US-based investment fund planning to invest in the airline.
9:30 am RBI rate cut? Rohini Malkani, Citi says both sets of macro data beat expectations. ''Going forward, while CPI will likely trend to 5.5 percent in January-March quarter as the base effects reverse, the outlook remains sanguine due to commodity prices, government measures on food inflation and deceleration in rural wages,'' she adds.
She expects CPI to undershoot RBI's 6 percent target through 2015 and average 5.5 percent, strengthening the case for monetary easing. ''On rates, while the fiscal deficit remains a challenge, given the growth-inflation dynamics, we maintain our view of the first rate cut in Q1CY15 and a cumulative 100bps cut till FY16... but wouldn't be surprised if RBI does cut before the February Budget,'' says Malkani.
It is another flat opening at Dalal Street. The Sensex is up 48.57 points at 27633.84 and the Nifty is up 23.15 points at 8346.15. About 465 shares have advanced, 133 shares declined, and 276 shares are unchanged.
Hindalco, Axis Bank, BHEL, L&T and ICICI Bank are top gainers. M&M, GAIL, ONGC, Cipla and NTPC are among the laggards.
The Indian rupee opened higher by 8 paise at 62.08 per dollar against previous day's closing value of 62.16 a dollar.
The dollar fell against the yen in volatile trading, pressured by weakness in US stocks as the currency's positive outlook was somewhat diminished by surprisingly weak US wage data on Friday.
Ashutosh Raina of HDFC Bank said, "The dollar index continues to hover near 92 and gained against most of major and EM currencies. The USD/INR currency pair is back in the 62-63 range and has defied global dollar strength. The pair can react positively to the IIP and inflation numbers."
Among global markets, stocks declined in the US, extending a two-week slide, as worries about the falling price of oil took hold before the start of quarterly earnings. The CBOE volatility index jumped nearly 12 percent to 19.60. Alcoa reported fourth-quarter results. The aluminum producer gained in after-hours trading after delivering earnings and revenue that beat estimates.
In Europe, shares regained some ground, ending in positive territory as speculation on further stimulus from the European Central Bank boost sentiment, even as the oil price continued to tank.
Asian stocks are seeing selling pressure this morning on weak US lead. Japanese markets are trading near one-week lows after being shut for a holiday on Monday.
In commodities, Brent dropped below USD 48 per barrel and Nymex crude slipped to trade at around USD 45 after analysts at Goldman's lowered their three-month price forecast for Brent to USD 42 per barrel from USD 80 and cut Nymex crude to USD 41 from USD 70 per barrel.
From precious metals space, gold gains as dollar slips with investor sentiment boosted by shifting expectations on when US interest rates may rise.