Sensex, Nifty close lower; banks drag but FMCG stocks support

The 30-share BSE Sensex was down 63.38 points at 34,331.68 and the 50-share NSE Nifty fell 22.50 points to 10,526.20.

ITC and Wipro were biggest gainers.

Axis Bank, Tech Mahindra, Lupin, M&M, Titan Company and IndusInd Bank were down between 1 percent and 2.5 percent.

Godrej Consumer Products, Godrej Industries, Bombay Burmah, Kaya, Jaiprakash Associates, Parag Milk Foods, Mishra Dhatu, Delta Corp, Dabur India, V-Guard Industries, Indian Hotels, EIH Associated Hotels and Amara Raja Batteries gained up to 9 percent.

Kamat Hotels, Jet Airways, Andhra Bank, Bank of Baroda, Jaypee Infratech, Bhushan Steel, OBC, Balrampur Chini, Alok Industries fell up to 5 percent.

3:15 pm Market Update: Benchmark indices remained under pressure, with the Sensex falling 53.13 points to 34,341.93 and the Nifty declining 17.50 points to 10,531.20.

About three shares declined for every two shares rising on the BSE.

3:10 pm AC Industry Growth: With the Indian Meteorological Division (IMD) warning of above-normal temperatures in the calendar year 2018, this summer season (April to June) across most parts of the country is set to be scorching.

This, could boost a 15 per cent growth in the room air-conditioner (AC) sales, as per a research report by Motilal Oswal.

“The soaring temperatures are likely to drive demand for air conditioners in CY18. A low base of the previous year (demonetisation impact) may also provide support. We expect India’s room AC industry to grow at a 15% CAGR over FY18-20,” said the report.

3:05 pm NSE launches new index: Leading stock exchange NSE's arm IISL launched Nifty 200 Quality 30 index, which will track the performance of select firms based on profitability and earnings growth variability.

The new index includes top 30 companies from its parent Nifty 200 index, selected on the basis of their quality' scores, India Index Services & Products Limited (IISL) said in a statement.

The quality score for each company will be determined based on return on equity, financial leverage (debt-equity ratio) and earning growth variability analysed during the previous five years.

The weight of each stock in the index will be based on a combination of stock's quality score and its free float market capitalisation.

2:55 pm Earnings: Mastek's Q4 consolidated net profit increased to Rs 19.4 crore from Rs 18.4 crore and revenue grew by 6.8 percent to Rs 223.7 crore on sequential basis.

Operating profit increased 8.4 percent quarter-on-quarter to Rs 27.8 crore and margin expanded by 10 basis points to 12.4 percent in Q4.

2:45 pm Market Update: The market erased gains amid volatility in afternoon, weighed by banking and financials after RBI circular.

The 30-share BSE Sensex was down 27.77 points at 34,367.29 and the 50-share NSE Nifty fell 7.30 points to 10,541.40.

PSU Bank index fell over a percent after RBI Deputy Governor NS Vishwanathan has defended 1-day default clause of February 12 circular, saying default is a lagging indicator and not a leading indicator of financial stress.

Mastek was under pressure after Q4 earnings, falling 2 percent.

2:35 pm Asia Update: Markets in Asia closed higher, as investor confidence firmed on the back of Wall Street's advance following strong earnings. The gains also came amid lingering concerns over trade-related developments, reports CNBC.

In Japan, the Nikkei 225 rose by 1.42 percent and South Korea's Kospi was up 1.07 percent. Australia's S&P/ASX 200 edged up by 0.34 percent while China's Shanghai Composite gained 0.8 percent and Hong Kong's Hang Seng increased 0.74 percent.

2:25 pm Market Update: Benchmark indices came off their day's high amid volatility in afternoon, weighed by banks after RBI circular.

The 30-share BSE Sensex was up 29.53 points at 34,424.59 while the 50-share NSE Nifty failed to reclaim 10,600 levels, rising 9.70 points to 10,558.40.

Nifty PSU Bank fell 0.8 percent on fall in almost all stocks. Bank of Baroda, Indian Bank, Andhra Bank, OBC, Syndicate Bank, Union Bank, IDBI Bank and SBI declined up to 3 percent.

RBI Deputy Governor NS Vishwanathan has defended 1-day default clause of February 12 circular, saying default is a lagging indicator and not a leading indicator of financial stress.

"Bankers need to be proactive before borrowers become stressed. February 12 circular doesn't require unanimity among bankers to resolve stressed assets," he said.

He further said individual bankers can negotiate independently & with other banks to prevent default and he denies that February 12 framework mandated unanimity across lenders.

2:15 pm Gold Update: Gold prices went up by Rs 30 to Rs 32,380 per ten grams at the bullion market largely due to token buying by jewellers on the auspicious occasion of 'Akshaya Tritiya', but a subdued trend overseas capped the gains.

Silver strengthened by Rs 150 at Rs 40,450 per kg largely in step with gold.

Traders said, besides token purchases by consumers on the auspicious occasion of 'Akshaya Tritiya', depreciating rupee against the dollar helped gold prices to trade higher.

2:05 pm Europe Trade: European markets were slightly higher, as investors monitored a fresh batch of corporate earnings and economic data.

France's CAC was up 0.47 percent, Germany's DAX 0.33 percent and Britain's FTSE gained 0.82 percent.

1:55 pm Gold Snaps 3-session of Gain: Gold prices slipped after rising for three straight sessions as investors opted for riskier assets, with the dollar holding its gains on the back of upbeat US economic data.

"There was a general increase in risk appetite, which boosted equities ... Conversely, there was less demand for safe-haven assets such as gold," said John Sharma, an economist with National Australia Bank.

Spot gold was down 0.3 percent at USD 1,343.31 per ounce, US gold futures for June delivery fell 0.2 percent to USD 1,346.30 per ounce.

Gold prices had surged to USD 1,365.23 per ounce last week, their highest since Jan. 25, on heightened tensions over Syria and US sanctions on Russia, reports Reuters.

1:45 pm Asset Sale: The National Company Law Appellate Tribunal (NCLAT) recalled its previous order which allowed debt-ridden Reliance Communications to proceed with the sale of its tower and fibre assets.

The sale of these businesses form an important part of the overall Rs 25,000 crore asset monetisation blueprint of the troubled company.

The appellate tribunal would start its hearing on the plea of Reliance Infratel (RCom's subsidiary that runs the tower and fibre businesses) from April 23 over sale of its businesses.

"In view of the order passed by the Supreme Court, dated April 16, 2018...interim order dated April 6, 2018 is recalled," said NCLAT bench headed by Justice S J Mukhopadhaya.

NCLAT had on April 6 partially allowed sale of the businesses, which was challenged by HSBC Daisy Investments (Mauritius) Ltd.

The apex court on April 16 stayed the order allowing the sale.

1:31 pm Stake Sale: IFCI, the infrastructure term lender, has sought bids from merchant bankers for partial disinvestment of its stake in National Stock Exchange (NSE).

The last date for the submission of the bid is May 14, according to a public notice.

The infrastructure term lender has "invited bids from merchant bankers for disinvestment of its part stake, 12,09,991 equity shares, in NSE through a competitive bidding process".

Last month, IFCI offloaded 0.39 percent in the leading stock exchange for Rs 169 crore.

1:18 pm Market Update: Benchmark indices extended gains in afternoon trade, with the Nifty inching towards 10,600 levels on hopes of strong earnings growth.

FMCG stocks, especially ITC hogged the limelight, rising 3.7 percent on hopes of normal monsoon.

The 30-share BSE Sensex was up 119.30 points at 34,514.36 and the 50-share NSE Nifty gained 32.70 points at 10,581.40.

1:05 pm Normal Monsoon forecast impact: Following normal monsoon forecast, the Reserve Bank of India is expected to go for a 25 basis points rate cut in key rates in its policy review meet in August, says a report.

According to a Bank of America Merrill Lynch, normal rains should help to push rural demand, especially after a relatively poor rabi harvest.

"We grow more confident of our call of a 25 bps RBI rate cut on August 1 after the India Met forecast? a normal south-west monsoon at 97 percent of long period average," the global financial services major said in a research note.

According to the India Meteorological Department, the country is likely to witness a normal monsoon this year. The monsoon will be 97 percent of long period average (LPA), which is normal for the season.

12:55 pm Earnings Outlook: "We are looking at Sensex earnings. In Q4, earnings will grow in the range of 13-14 percent, which will be double digit growth after a long time. Partially, this will be due to low base of Q4 last year and the other due to better earnings of global commodity companies, be it energy or metals. That will aid overall growth,” Gaurav Dua, Head of Research, Sharekhan told Moneycontrol.

12:50 pm Buzzing: Bharti Airtel gained nearly 2 percent and Bharti Infratel was up 0.6 percent.

Sources told CNBC-TV18 that Bharti Infratel and Indus Towers merger is in final stages and the announcement is likely soon.

Bharti Airtel and Vodafone are likely to be joint promoters of the merged company while Idea Cellular is likely to exit by selling its 11.15 percent stake in Indus for over USD 1 billion.

KKR will continue as a minority shareholder with close to 6 percent stake in merged company.

Sources said Bharti Infratel and Indus Towers merged company to be valued over USD 16 billion.

12:35 pm Market Update: The market continued to trade higher amid consolidation, heading towards positive closing for 10th consecutive session on hopes of strong quarterly results.

The FMCG index was up 2 percent on normal monsoon forecast. ITC was up nearly 4 percent while Godrej Consumer Products was up 5 percent. Dabur gained 3 percent.

12:25 pm Jet Fuel Demand: An Indian push to connect more cities via airports as an expanding middle class increasingly takes to the skies is set to help propel the country's demand for jet fuel to record highs this year.

That rapid growth in appetite for aviation fuel means the country's refiners are far less likely to send cargoes abroad, tightening markets from Asia to Europe.

Years of breakneck economic expansion have helped India become the world's fastest growing major domestic aviation market, according to the International Air Transport Association.

That has been underpinned by ambitious government plans to overhaul the nation's infrastructure, including a push to build airports and offer airlines incentives to fly to smaller cities, reports Reuters.

12:15 pm IMF on US-China Trade: The recent announcements by the US and China to impose import tariffs against each other is more of a "phony" trade war at this point, the IMF said but cautioned that the world would be impacted if it turns into a cycle of widespread actions and counteractions.

A potential trade war has been brewing between the two nations since April 2017 when Trump directed the Commerce Department to investigate whether imports of foreign steel from China and other countries could be a threat to national security.

12:01 pm Bank Fraud: In a joint operation, the CBI and the Gujarat Anti Terrorist Squad (ATS) have arrested three promoters of Vadodara-based Diamond Power Infrastructure Ltd. (DPIL), accused of defrauding a consortium of banks to the tune of Rs 2,654 crore, officials said today.

The three promoters - S N Bhatnagar and his sons Amit and Sumit - were held from a hotel in Udaipur last night, they said.

DPIL manufactures electric cables and other electrical equipment.

11:50 am Buzzing: Federal Bank gained more than a percent after Reliance Securities said it has a Buy rating on the stock with a target price of Rs 150, implying a 51 percent potential upside.

The research house said the bank is expected to deliver further improvement in operational performance led by improving loan book growth and improving assets liability mix. Advances grew by 5.3 percent QoQ to Rs 85,000 crore in Q3FY18, as SME, Wholesale and Retail (including Agri) book grew by 13.3 percent, 4.4 percent and 6.85 percent, QoQ respectively.

Further, continued moderation in SMA-2 balance clearly suggests fresh slippage will show declining trend in FY19. Notably, the Bank is gradually coming out of the scenario marked with higher provisioning and continued stress on asset quality for last few quarters. Management expects credit cost to remain in comfortable level of 60-70bps in FY19.

Looking ahead, the research house expects the strong traction in earnings to continue owing to robust growth in loan book, moderate credit cost and healthy margins.

Reliance Securities expects the bank’s earnings to witness 33 percent CAGR through FY17-20.

11:38 am Market Update: The market recovered to trade near day's high, with the Nifty inching towards 10,600 levels on positive global cues.

ITC was the top gainer among Nifty50 stocks, rising 3 percent and helping FMCG index rise over 1.5 percent while Zee Entertainment was up over 2 percent, taking Media index higher by 1.5 percent.

The 30-share BSE Sensex was up 86.33 points at 34,481.39 and the 50-share NSE Nifty rose 21.90 points to 10,570.60.

11:28 am Stake Sale: Amtek Auto said pursuant to the approval granted by the committee of creditors of Amtek Auto (AAL) under the relevant provisions of the Insolvency and Bankruptcy Code for sale of all equity shares and preference shares held by AAL in its joint venture company, SMI Amtek Crankshaft Private Limited (SMI) to Nippon Steel and Sumitomo Metal Corporation (NSSMC), AAL has signed and executed share purchase agreement (SPA) with NSSMC to sell all equity shares and preference shares held by AAL in SMI to NSSMC.

Consequent to the approval of the resolution plan of AAL by the National Company Law Tribunal and on the coming into the effect of sale of AAL's 50 percent stake in accordance with terms of SPA, SMI Amtek Crankshafts Private Limited shall cease to be Joint Venture Company of AAL.

11:15 am Crude Oil Update: Oil prices edged up, lifted by a reported fall in US crude inventories and by the ongoing risk of supply disruptions.

Brent crude oil futures were at USD 72.17 per barrel, up 0.82 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were up 0.90 percent, at USD 67.12 a barrel.

In the United States, crude inventories fell by 1 million barrels last week, to 428 million barrels, according to a weekly report by the American Petroleum Institute (API) on Tuesday, reports Reuters.

11:05 am Maruti's UV market share: Maruti Suzuki India said it attained leadership position in utility vehicles sales in the domestic market in 2017-18, with over 27.5 percent market share.

Riding on the success of models like Vitara Brezza, Ertiga and S-Cross, Maruti Suzuki's sale of utility vehicles reached 253,759 units in 2017-18, growing 29.6 percent over previous year sales of 195,741 units.

"Sales of Vitara Brezza increased by 36.7 percent in 2017-18, while it jumped by 44.4 percent for S-Cross and 4.1 percent for Ertiga," RS Kalsi, Senior Executive Director (Marketing & Sales), Maruti Suzuki said.

10:55 am Should gold be a part of your portfolio?: Akash Jain, Vice President - Equity Research, Ajcon Global said gold is better as a short to medium-term investment, as long-term returns on the yellow metal are often as low as 10 percent per annum. We would suggest investors not to make too heavy or long-term investments in gold.

Allotting 5 percent to 10 percent of your investment portfolio to gold ETFs is a wise idea. This will also help keep your portfolio robust and the returns stable.

Always keep an eye on the gold price trends before you start transacting. Just like with stocks, you may want to buy gold ETFs at low prices and sell them as prices go up. It would be advisable to use gold ETFs as safe assets and hedge investment rather than as a daily profit-trading tool.

10:42 am Market Update: The market continued to be in a tight range of 30 points on the Nifty after rallying for previous nine consecutive sessions, as investors look for corporate earnings to get further market direction.

The 30-share BSE Sensex was up 26.55 points at 34,421.61 and the 50-share NSE Nifty rose 8 points to 10,556.70.

Hotels stocks extended previous day's rally. Taj GVK, Lemon Tree Hotels, Royal Orchid, Oriental Hotels, Indian Hotels Company etc gained up to 17 percent.

10:36 am Results Date: Bajaj Holdings & Investment said the board of directors of the company will meet on May 18 to consider the audited financial results for the year ended March 31, 2018 and recommendation of dividend on equity shares, if any, for the said year.

10:30 am Resolution Plan for Electrosteel Steels: Electrosteel Steels said the National Company Law Tribunal (NCLT) has approved the resolution plan submitted by Vedanta to acquire the company pursuant to Corporate Insolvency Resolution Process implemented as per provisions of Insolvency and Bankruptcy Code.

As per the resolution plan, a wholly-owned subsidiary of Vendata, will subscribe for the share capital of the company for an aggregate amount of Rs 1,805 crore and provide additional funds aggregating of Rs 3,515 crore by way of debt.

Upon implementation of the resolution plan, Vedanta will hold approximately 90 percent of the paid up share capital of the company. The remaining 10 percent of the company's share capital will be held by the company's existing shareholders and the financial creditors who receive shares in exchange for the debt owed to them.

The funds received by the company as debt and equity will be used to fully settle the debts owed to the existing financial creditors of the company, by payment of Rs 5,320 crore.

10:20 am Is Gold really a safe bet?: Ashwani Kumar Harit, Commodity Research Analyst at Share India said in global turmoil situation especially when geopolitical tension is going on, gold becomes hot destination for investment than the equity market because investors pull out their money from the stock market due to negative flows and rush to pour their money into the yellow metal that can sustain in such negative situations.

Whenever such situations arise, bullion becomes the safe haven investments due to its negative correlation with the equity markets and as a hedge against inflation.

Presently gold have already been benefitted from the US-China trade war and along with that prices are also getting support to push on the higher side from the ongoing escalation of tension between US-Syria.

10:15 am Rupee Trade: The rupee weakened by another 14 paise, nearing a fresh seven-month low of 65.78, against the US dollar at the interbank forex market today on fresh demand for the greenback from importers and banks.

It recovered a bit to trade 7 paise down at 65.71 against the US dollar now.

Dealers attributed the rupee's persistent fall to increased demand for the US currency from importers and foreign fund outflows.

Yesterday, the rupee had lost 15 paise to end at a near 7-month low of 65.64 against the US dollar amid persistent capital outflows and a fresh ripple of geopolitical tensions.

Concerns over oil prices, a global trade war threat, and the widening current account deficit have also weighed on the domestic unit.

10:05 am Earnings Date: Bajaj Auto informed exchanges that the board of directors will meet on May 18 to consider the audited financial results for the year ended 31 March 2018 and recommendation of dividend on equity shares, if any, for the said year.

9:55 am Buzzing: Simmonds Marshall share price rallied 10 percent after ICICI Research said the company has a capital efficient business model where it realises around 3x asset turnover, realises around 12-13 percent EBITDA margins and has a working capital cycle of around 130 days.

Consequent return ratios are in excess of 15 percent. SML also realises healthy cash flows, with present CFO yield at around 8 percent. It has controlled leverage with FY17 debt: equity at 0.6x, the research house said.

With robust demand prospects and impressive expansion under way, ICICI Research expects sales, PAT to grow at a CAGR of 22.5 percent, 36.5 percent, respectively, in FY18-20E. "We ascribe a fair value of Rs 165-180 to SML, valuing it at 11x & 12x P/E on FY20E EPS of | 14.9. We assign a Buy rating to the stock."

Simmonds Marshall (SML) is the leading manufacturer of industrial fasteners (nuts, bolts, stud, etc) catering mainly to the automobile industry. It is among the market leaders in the nuts category, especially in the 2-W segment that accounts for around 50 percent of sales with one of the leading 2-W player as its key client, contributing around 25 percent of sales.

9:45 am Results Date: Maharashtra Scooters informed exchanges that a meeting of the board of directors will be held on May 16 to consider the audited financial results for the quarter and financial year ended March 31, 2018 and for recommendation of dividend, if any, on equity shares.

9:38 am Market Update: The market was off its opening highs, as investors look for corporate earnings due later in the day.

The Nifty Midcap outperformed frontliners, rising 0.3 percent on positive market breadth. About two shares advanced for every share falling on the BSE

Mindtree, HDFC Life and ACC were trading higher ahead of earnings later in the day.

The 30-share BSE Sensex was up 36.37 points at 34,431.43 and the Nifty gained 11.20 points at 10,559.90.

9:27 am Earnings: Tata Sponge said its Q4 net sales grew by 45.7 percent to Rs 243.5 crore, operating profit rose by 139 percent to Rs 61.6 crore, margins expanded to 25.3 percent (versus 13.95 percent) and profit increased 120 percent to Rs 46.7 crore compared to year-ago.

It also recommended a dividend of Rs 20 per share of Rs 10 each to the shareholders for the financial year ended March 31, 2018.

9:22 am Drug Approval: Glenmark Pharmaceuticals Inc, USA has received final approval from the United States Food & Drug Administration for Tacrolimus Ointment, 0.1 percent, the generic version of Protopic Ointment of Leo Pharma AS.

According to IQVIATM sales data for the 12 month period ending February 2018, the Protopic Ointment market2 achieved annual sales of approximately USD 109.0 million.

9:20 am Results Date: Bajaj Finserv said the board of directors will meet on May 17, 2018 to consider the audited financial results for the financial year ended March 31, 2018 and recommendation of dividend on equity shares, if any, for the said year.

9:18 am IRB Infra in focus: IRB Infrastructure said it has now received a copy of the closure report filed by the CBI before the Session Court Pune after conducting further investigation in the matter pertaining to the murder of the RTI activist in Maharashtra, India.

"The report once again clearly exonerates the Company officials from any involvement in the matter."

9:15 am Market Check: Benchmark indices opened higher on Wednesday, following positive lead from global stocks.

The 30-share BSE Sensex was up 105.17 points at 34,500.23 and the 50-share NSE Nifty rose 23.50 points to 10,572.20.

Vedanta, Tata Steel, Wipro, TCS, Yes Bank, Bharti Airtel, Adani Ports, Eicher Motors, UltraTech Cement and GAIL were early gainers.

Infosys, BPCL, Titan Company, HPCL and Coal India were under pressure.

Nifty Midcap was up 68 points. IRB Infrastructure, Tata Sponge, Fortis Healthcare, Jagran Prakashan, Dabur India, Indian Hume Pipe and VIP Industries gained up to 5 percent.

Mindtree and ACC gained ahead of earnings later in the day.

9:10 am Settlement in Pre-Opening: The Sensex was up 48.36 points at 34,443.42 and the Nifty gained 30.20 points at 10,578.90.

9:07 am Technical Recommendations: We spoke to SMC Global Securities and here’s what they have to recommend:

NOCIL: BUY| Target Rs260| Stop Loss Rs205| Return 15%

NRB Bearings Ltd: BUY| Target Rs188| Stop Loss Rs154| Return 13%

Supreme Industries Ltd: BUY| Target Rs1450| Stop Loss Rs1180| Return 13%

9:05 am Stocks in news: Indian Hume Pipe: It has bagged order of Rs 108.19 crore from Narmada Water Resources, Water Supply & Kalpsar Dept, Gujarat.

Indian Hotels: Company enters Saudi with first Taj hotel in Makkah

NHPC: Company's 50 MW solar project synced with grid, Hindu Business Line reported.

China’s Fosun enters race to buy Fortis Healthcare

Aditya Birla Group in talks to raise USD 1 billion for Idea Cellular, Mint reported.

Lupin: Company receives tentative US FDA approval for generic AndroGel.

AstraZeneca: Company to invest USD 90 million over the next five years in India.

9:03 am Rupee Update: The rupee extended fall after opening flat, depreciating 12 points or 0.2 percent to 65.76 against the US dollar.

9:01 am Market Check: Benchmark indices were higher in pre-opening trade, following positive lead from global peers.

The 30-share BSE Sensex was up 95.28 points at 34,490.34 and the 50-share NSE Nifty rose 81.70 points to 10,630.40.

Tata Steel, Yes Bank, Vedant and ICICI Bank were higher in trade.

Jaypee Infratech was down 5 percent. TBZ, PC Jeweller gained up to 3 percent.

Trends on SGX Nifty also indicated a positive opening for the broader index in India, a rise of 35 points. Nifty futures were trading around 10,590-level on the Singapore Stock Exchange.

US stock indexes rallied on Tuesday on broad-based gains while Netflix and UnitedHealth earnings impressed investors and boosted optimism about the U.S. corporate reporting season.

The Dow Jones Industrial Average rose 213.59 points, or 0.87 percent, to 24,786.63, the S&P 500 gained 28.55 points, or 1.07 percent, to 2,706.39 and the Nasdaq Composite added 124.81 points, or 1.74 percent, to 7,281.10, Reuters reported.

Asian shares crept ahead on Wednesday after Wall Street took heart from upbeat corporate earnings, though nagging concerns about trade barriers and the global growth outlook kept currencies and bonds subdued.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent in early trade. Japan’s Nikkei added 0.6 percent, Reuters reported.