Sensex, Nifty end flat; oil stocks drag, SBI & BHEL up 1-2%

30 Dec 2014

03:30 pm Market close Due to thin trade volume in festive season, the market has once again ended flat. The Sensex was up 7.81 points at 27403.54, and the Nifty ended up 1.95 points at 8248.25.  About 1456 shares advanced, 1414 shares declined, and 130 shares were unchanged. BHEL, Dr Reddy's Labs, Axis Bank, NTPC and SBI were gainers while Hero, Tata Steel, Reliance, ONGC and Bajaj Auto.

03:00 Woes fpr SpiceJet The state-run airport operator has asked troubled budget carrier SpiceJet to deposit Rs 200 crore by December 31, failing which the airline could be put in the so-called cash-and-carry mode, a senior government official said. SpiceJet has so far given a bank guarantee of Rs 82.5 crore of the total due, the official, who declined to be named, told reporters in New Delhi.

He said the aviation ministry would decide the next course of action in case the airline didn't pay by the deadline. Cash-strapped SpiceJet needs urgent funding to continue operations smoothly. It was forced to briefly ground its aircraft this month as suppliers refused to fuel them. Co-founder Ajay Singh is leading a rescue plan for the airline and could team up with private-equity players to infuse funds, government officials have said previously.

02:30pm Aban gains further P Sudhakar, additional general manager, CARE Rating said the firm upgraded credit rating of Aban Offshore from a 'D' rating to 'BB-' Sudhakar says there have been numerous positives in the industry as well as the company that has led to this upgrade. What seems to have worked for the company is the steps it has taken to improve its balancesheet by raising equity and its refinancing of overseas liabilities of USD 2 billion. The stock rallied 4 percent today in addition to 17 percent upside in previous session.

02:00pm Market Check Equity benchmarks remained choppy in afternoon trade amid low volumes while the broader markets outperformed. The Sensex dipped 14.08 points to 27381.65 and the Nifty slipped 5.20 points to 8241.10. The BSE Midcap and Smallcap indices gained 0.4 percent and 0.2 percent, respectively. About 1320 shares have advanced, 1344 shares declined, and 118 shares are unchanged on the Bombay Stock Exchange.

Sanjay Dutt, director, Quantum Securities does not foresee a Budget-rally and neither does he think there will be new highs for the Indian equity market in 2015 because the macro issues for India still persists. He thinks 2015 could be a struggle for the market and a year of consolidation contrary to street expectations.

However, individual stock opportunities do exist. Reliance Industries, ONGC, Hero Motocorp and Sesa Sterlite were top losers on the Sensex, down 1-2 percent. Tata Steel dropped 1.4 percent as the company warned of a hit to its profitability in the third quarter because of the closure of its captive iron-ore mines in Jharkhand and Odisha.

The closure of mines forced the company to operate below capacity for more than a month during the quarter. Cairn India was down 1.7 percent as Brent crude hit fresh 5 and a half-year low of USD 57, down 1.12 percent to USD 57.23 a barrel and US crude declined 1 percent to USD 53.10 a barrel as persistent worries about a global supply glut offset concerns about output disruptions in Libya. However, Dr Reddy's Labs, BHEL and NTPC gained 1 percent each followed by SBI, ICICI Bank, Infosys, Axis Bank, L&T and M&M with marginal gains.

1:50 pm Industry growth in 2015? Post the conclusion of the workshop on 'Make in India' on Monday, DIPP secretary Amitabh Kant says specific sector-wise action plan will be implemented, while adding that the industry raised issues on predictable tax regime, infrastructure deficit, inverted duty structure and land availability. Secretaries finalised one year and three year action plan on Make in India. This is the first time ever that the prime minister and his Cabinet interacted with India Inc to discuss manufacturing issues.

He says there is no reason why India should not increase its share in global exports. There is a need to grow exports at 25 percent to push manufacturing growth to 15-16 percent. He says the government as well as the industry cannot allow export pessimisn in manufacturing strategy.     The industry also raised several issues regarding clearances from the environment ministry. The ministry on its part assured industry on steps being taken and that it is convinced that manufacturing needs impetus.

1:30 pm Market outlook: Sanjay Dutt, director, Quantum Securities does not foresee a Budget-rally and neither does he think there will be new highs for the Indian equity market in 2015 because the macro issues for India still persists. He thinks 2015 could be a struggle for the market and a year of consolidation contrary to street expectations. However, individual stock opportunities do exist.

According to him the Modi-rally or the sentiment driven rally is now over and so the market is vulnerable to correction to sub- 8000 levels. So, one now needs to focus on fundamentals and structural changes on the ground. Meanwhile, he is also not upbeat on the upcoming third quarter results and globally too thinks fifty percent of the markets are going through their own set of problems.

So with backdrop of this kind of a landscape, the fundamentals for the Indian market may not change rapidly, says Dutt. Even the US market is set for a correction now, he thinks.

The Sensex is down 43. 55 points at 27352.18, and the Nifty is down 9.75 points at 8236.55. About 1221 shares have advanced, 1362 shares declined, and 107 shares are unchanged.

Oil stocks slipped as Reliance, Tata Steel, Sesa Sterlite, Bharti Airtel and Hero MotoCorp are among the losers while BHEL, NTPC, Dr Reddy's Labs, HUL and L&T. Gold ticked higher on weaker equities, but gains were limited as the dollar was perched at a near-nine-year high versus a basket of major currencies, undermining the metal's appeal as a hedge.

For the year, gold is down about 1.5 percent, hurt by a stronger dollar and expectations of an interest rate hike in the United States. The recent plunge in oil prices have also hurt bullion's appeal as a hedge against oil-led inflation. Gold slumped 28 percent in 2013 as investor demand waned on the back of a robust US economy and better-yielding stocks. Many analysts have forecast more declines in gold prices.

12:55pm Interview Malay Mukherjee, MD and CEO of  IFCI in an interview to CNBC-TV18 clarified that the government infusing Rs 60 crore in the company would not bring in cash into the company books but in fact government would be buying preference shares from some banks or existing shareholders to increase their stake in IFCI. The government would now hold 51 percent stake in IFICI, he added. The Union Cabinet yesterday approved infusion of Rs 60 crore in Industrial Finance Corporation of India (IFCI) Ltd to make it a government company by way of acquisition of preference shares from existing shareholder(s). 

Mukherjee also clarified that the company as of now is adequately capitalised and is not looking for any further capital infusion. Commenting on the 2.5 percent National Stock Exchange (NSE) stake sale, he said the company is currently in negotiations with a foreign fund and expects to close the deal in fourth quarter by January end or February. The company had got 2-3 bids earlier but the price was below their expectations.

12:40pm Stocks in Focus Heavy electrical equipment companies - ABB and Siemens gained 6 percent and 2 percent, respectively. Transformer makers - Voltamp Transformers surged 17 percent. Transformers and Rectifiers rallied 10 percent while Indo Tech Transformers,  Bharat Bijlee and Alstom T&D gained 2-8 percent.

12:30pm Market Expert Sanjay Dutt, director, Quantum Securities does not foresee a Budget-rally and neither does he think there will be new highs for the Indian equity market in 2015 because the macro issues for India still persists. He thinks 2015 could be a struggle for the market and a year of consolidation contrary to street expectations. However, individual stock opportunities do exist.

According to him, the Modi-rally or the sentiment driven rally is now over and so the market is vulnerable to correction to sub-8000 levels. So, one now needs to focus on fundamentals and structural changes on the ground. Meanwhile, he is also not upbeat on the upcoming third quarter results and globally too thinks fifty percent of the markets are going through their own set of problems. So with backdrop of this kind of a landscape, the fundamentals for the Indian market may not change rapidly, says Dutt.

12:00pm Market Check The market continued to move in a tight range today with the Nifty consolidating around 8250 level. Sectorally, metals and energy stocks were under pressure while real estate and IT stocks gained. The Sensex slipped 43.87 points to 27351.86 and the Nifty declined 14.35 points to 8231.95. About 1243 shares have advanced, 1200 shares declined, and 114 shares are unchanged on the Bombay Stock Exchange.

The rupee dipped to a fresh 2-week low as the dollar gained on Greece concerns and month end dollar demand. Sectors such as power and housing will benefit as the government approved ordinance to amend the Land Acquisition Act. Goldman Sachs says L&T will gain as execution of PPP projects picked up pace. Religare is positive on logistic players such as Container Corporation. Tata Steel remained subdued, down 2 percent as reports suggested that the company warned of a hit to its profitability in the third quarter because of the closure of its captive iron-ore mines in Jharkhand and Odisha. The closure of mines forced the company to operate below capacity for more than a month during the quarter.

IDBI Bank gained a percent as the board approved sale of part of entire stake in CARE Ratings. The bank told CNBC-TV18 that the time seems right to monetize its stake in CARE and could receive Rs 600-700 crore for the entire shareholding at current market price. Edelweiss Financial, Aban Offshore, Biocon, Adani Ports, Reliance Industries, YES Bank and Infosys were most active shares on exchanges. Fresh anxiety over the turmoil in oil markets and political uncertainty in Greece dragged most Asian indices lower. Nikkei and Hang Seng lost 1-1.6 percent. Brent oil extended losses into a fourth session, as worries over a global supply glut offset concerns about output disruptions in Libya. US crude declined 0.8 percent to USD 53.17 a barrel and Brent crude fell 0.93 percent to USD 57.34 a barrel.

11:50 am Buzzing: Shares of Godrej Properties rallied as much as 7.7 percent intradayafter its subsidiary raised stake in another subsidiary of the company. The real estate company said Godrej Projects Development Private Limited (GPDPL) acquired 49 percent of the paid-up share capital and entire debentures of Godrej Premium Builders Private Limited (GPBPL) from Madhavi SA Investments LLC and Madhavi Ventures Limited (the investors). GPDPL and GPBPL both are subsidiaries of the Mumbai-based real estate developer.

11:30 am Market outlook: Nifty is likely to remain fairly rangebound in the very near future, is the word coming in from Taher Badshah of Motilal Oswal AMC. The result or earnings season too will perhaps see just about double digit growth or maybe a little less than that, he adds. He believes there could be some sector surprises, maybe even negative surprises going ahead. Policy-driven measures and stocks benefiting from them are likely to be in focus, he adds. From a one-year perspective, earnings will have to grow upward of 15 percent to push the market ahead. So the government reforms will have to fall into place for the 15 percent upward push to earnings, he adds.

The market is extremely flat. The Sensex is down 11.90 points at 27383.83 and the Nifty is down 3.25 points at 8243.05. About 1171 shares have advanced, 1022 shares declined, and 93 shares are unchanged. Metals and banks are pressured while infra and IT stocks gain.BHEL, Sun Pharma, HUL, Cipla and NTPC are top gainers in the Sensex. Among the losers are Reliance, Sesa Sterlite, Tata Steel, Hindalco and ONGC.

The government has approved ordinance to amend the Land Acquisition Act. Sectors such as power and housing benefit. Goldman Sachs says L&T to gain as execution of PPP projects picks up pace and power grid will find it easier to get right of way. The rupee slips to a fresh two-week low as the dollar gains on Greece concerns and month end dollar demand. Bonds are at 2-week highs.  Globally, Asian shares are lower as lower oil prices & Greece uncertainty weigh.

10:58am Market Update The Sensex declined 7.67 points to 27388.06 and the Nifty fell 3.65 points to 8242.65. About 1170 shares have advanced, 1036 shares declined, and 86 shares are unchanged on the BSE.

10:40am Rohit Ferro Tech shares in demand "The board of directors of the company on Monday approved the proposal to sell, transfer or otherwise dispose of the Jaipur manufacturing unit of the company located at Kalinganagar industrial Complex, District: Jajpur, Orissa as going concern by way of slump sale or otherwise, subject to the such approvals and permission as may be required for such sale," said the company in its filing to the exchange.

Rohit Patni, managing director and Suresh Kumar Patni, director of the company has been authorized to negotiate the proposed deal with the prospective acceptable purchasers.

10:20am Market Expert Sanjeev Prasad, Kotak Institutional Equities says the Street has largely focused on economic reforms, pace of economy recovery linked to economic reforms and decline in interest rates as the most important drivers for the Indian market for 2015. ''We broadly agree with the drivers and our Model Portfolio largely reflects the same. Our large positions in banks and automobiles reflect our positive views on economic recovery and lower interest rates,'' he adds. ''We have taken the opportunity to remove Idea Cellular from the portfolio and add 100 basis points each to Infosys and Tech Mahindra. We have also removed GAIL from the Model Portfolio and allocated the 200 basis points weight to Reliance Industries,'' says Prasad.

10:00am Market Check Equity benchmarks remained in a consolidation mode due to lack of volumes at institutional desk. The Sensex rose 3.28 points to 27399.01 and the Nifty advanced 1.65 points to 8247.95. Technology and healthcare stocks gained while metals, oil & gas and select banks stocks were under pressure.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.5 percent each. About 1018 shares have advanced, 686 shares declined, and 57 shares are unchanged on the Bombay Stock Exchange.

Larsen and Toubro gained 1 percent as the government approved ordinance to amend the Land Acquisition Act to remove barriers in a range of sectors like power, housing, defense to kick start stalled projects, there by making the procedure to acquire land faster. Subsidiary L&T Construction bagged orders worth Rs 2,521 crore in December.

Container Corporation is expected to be a big beneficiary of Land Acquisition Amendment, as the implementation of Dedicated Freight Corridor/Industrial Corridor would get a boost. Company is planning to develop several multimodal logistics parks/private freight terminals (PFT) across India and along the DFC. The stock gained 0.6 percent.

Tata Steel fell 0.6 percent as reports suggest that the company has warned of a hit to its profitability in the third quarter of the current fiscal year because of the closure of its captive iron-ore mines in Jharkhand and Odisha, which forced the company to operate below capacity for more than a month during the quarter.

Jindal Stainless climbed 3.6 percent as company will demerge business into three verticals namely ferro-alloys, coke oven & stainless steel businesses via slump sale route. Shareholders of Jindal Stainless will get shares by the resulting de-merged company, Jindal Stainless (Hisar), under the ratio of 1:1. IDBI Bank surged 2 percent. The bank told CNBC-TV18 that the timing seems right to monetise stake in CARE, and will look to monetise a part of or whole stake in CARE.

The bank believes it could receive between Rs 600-700 crore for entire shareholding at current market price. It also indicated it is looking to sell stake in NSE at right price with right buyer. Blue Star jumped 3 percent as the company forayed into in-built water purifier segment by collaborating with Eureka forbes. Rohit Ferro-Tech surged 19 percent as the board approved proposal to sell, transfer Jaipur manufacturing unit.

9:50 am Buzzing: Shares of Industrial Finance Corporation of India (IFCI) rose 3 percent intraday on Tuesday as government is planning to pump in more funds into it. The government has approved raising its stake in IFCI to 51 percent by infusing Rs 60 crore in the country's oldest financial institution.

"The Union Cabinet chaired by Prime Minister, Narendra Modi, approved infusion of Rs 60 crore in IFCI to make it a government company by way of acquisition of preference shares from existing shareholder(s)," an official statement said. IFCI was set up in 1948 as a statutory corporation under the Industrial Finance Corporation Act, 1948. The Act has since been repealed by the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993 and IFCI Ltd was registered under the Companies Act, 1956 on March 31, 1993, it said. The current shareholding of Government of India in IFCI after inclusion of the preference share capital was 47.93 percent, it said.

9:30 am In news: Concor is expected to be a big beneficiary of Land Acquisition Amendment, as the implementation of Dedicated Freight Corridor/Industrial Corridor would get a boost , and remember co plans to develop several multimodal logistics parks/private freight terminals (PFT) across India and along the DFC. Government today recommended promulgation of an ordinance making significant changes in the Land Acquisition Act including removal of consent clause for acquiring land for five areas of industrial corridors, PPP projects, rural infrastructure, affordable housing and defence.

The Union Cabinet, chaired by Prime Minister Narendra Modi, decided to amend the Act to bring under its purview 13 central legislations, including those relating to defence and national security, to provide higher compensation and rehabilitation and resettlement benefits to farmers whose land is being acquired.

The market has opened with some mild gains. The Sensex is up 37.03 points at 27432.76, and the Nifty is up 14.00 points at 8260.30. About 412 shares have advanced, 125 shares declined, and 18 shares are unchanged. HUL, L&T, Tata Motors, Hindalco and ICICI Bank are top gainers in the Sensex. GAIL, Hero, HDFC Bank, Wipro and ONGC are among the laggards. The Indian rupee opened marginally lower at 63.72 per dollar as against previous day's closing value of 63.67 a dollar.

Ashutosh Raina of HDFC Bank said, "The USD/INR pair has been fairly rangebound consolidating around the 63.50/dollar levels, with year-end demand and global dollar strength coupled with suspected intervention keeping it in a tight range." The euro remains rooted close to a 28-month trough against the dollar, but did not dip beneath that low. Greek bond yields shot higher after the vote as investors took fright, with the borrowing costs on 10-year bonds rising to 9.7 percent. In the US stocks closed narrowly mixed, amid fresh lows on oil prices and earlier pressure on European stocks from Greece's failure to elect a president.

The CBoE volatility index traded above 15. In Europe, shares closed mixed, with Greece struck by renewed political uncertainty after its politicians failed to agree on a new president. France's cac and the UK's FTSE both posted modest gains, while the German DAX closed flat. However, stock indexes in "peripheral" Europe underperformed, led by Greece.

The Athens index closed down around 3.9 percent, with the Italian FTSE MIB down 1.1 percent and the Spanish IBEX lower by roughly 1 percent. Greek stocks and bonds were hit after politicians in the country failed for a third time to endorse Prime Minister Antonis Samaras' preferred candidate.

This means that general elections will occur early next year, potentially jeopardizing Greece's hard-won economic recovery. In commodities, crude oil prices tumble, with Brent and NYMEX crude hitting their lowest levels since may 2009 on selling by investors convinced that supply disruptions in Libya would not offset a global supply glut. In the precious metals space gold prices fell, as a strong US dollar and bearish chart signal offset uncertainty over the prospect of fresh elections in Greece.