Sensex, Nifty end in red; Infosys, BHEL, Tata Power up 2%

16 Mar 2015

03:30 pm Market close: The Sensex ended down 65.59 points at 28437.71 and the Nifty slipped 14.60 points at 8633.15. About 1045 shares advanced, 1846 shares declined and 191 shares were unchanged.

Infosys, Tata Power, BHEL were up 2 percent. On the losing side were Sesa Sterlite, Hindalco, BHarti Airtel, NTPC and GAIL.

03:10 pm Euro check: The euro struck a fresh 12-year low and euro zone stocks reached new peaks on bets that the currency's relentless fall will boost corporate earning prospects just as the rising dollar hits those of US firms.

German stocks powered above 12,000 points for the first time, while the main pan-euro zone benchmark indices hit new seven-year highs.

The euro rebounded as European trading got underway, however, while U.S. oil prices recovered after slipping to a fresh six-year low, although they were still down on the day.

This week's focal point for global financial markets is the US Federal Reserve's policy decision on Wednesday, with the euro/dollar exchange rate likely to remain the dominant driver for major equity, currency and bond markets until then.

02:50pm Interview: Speaking about the company's plans to demerge the seed business into a different entity, Santosh Nair, CEO of Camson Bio Technologies in an interview to CNBC-TV18 said the demerger process would take two-three months.

The company has already got an approval from Sebi and stock exchanges, he added.

The company basically had two verticals; the biocides business and hybrid seeds business. Since both the businesses now are growing rapidly, it was time to unlock value both for shareholders and focus on driving the businesses differently, said Nair. So the decision to demerge, he added.

02:30pm Suven Life in News: Drug firm Suven Life Sciences has been granted a patent each by the US and New Zealand for a drug used in the treatment of neuro-degenerative diseases. The patents are valid until 2030 and 2031, respectively, Suven Life Sciences said in a filing to the BSE.

Commenting on the development, Suven Life CEO Venkat Jasti said: "We are very pleased by the grant of these patents to Suven for our pipeline of molecules in CNS arena that are being developed for cognitive disorders with high unmet medical need with huge market potential globally."

The company has "secured patents in USA and New Zealand to one of their new chemical entity (NCE) for CNS therapy through new mechanism of action H3 Inverse agonist...," Suven Life Sciences said.

With these new patents, Suven has a total of 20 granted patents from US and 23 granted patents from New Zealand.

02:00pm Market Update
The market continued to see selling pressure amid consolidation. The sensex fell 83.25 points to 28420.05 and the Nifty declined 25.15 points to 8622.60.

More than two shares declined for every share advancing on the Bombay Stock Exchange.
 
Saurabh Mukherjea of Ambit Capital says the bullishness in the market is abating and there is a great deal of unwarranted optimism now. He will moderate his Sensex targets as he expects a pullback in Sensex earnings next year.

In macro data, WPI inflation fell sharply, came in at negative 2.06 percent in February against negative 0.39 percent in previous month. A sharp fall in manufacturing goods triggered growth concerns. Experts believe that despite sharp fall in WPI, a rising CPI may keep RBI wary of rate cuts.

Hindalco and Usha Martin lost 4-5 percent. CNBC-TV18 learnt that the government will re-examine bids for 5 more coal blocks auctioned in schedule 3. Government is also likely to skip signing agreement with the 5 coal block allottees.

Sesa Sterlite extended losses to over 5 percent followed by HDFC, ITC, Reliance Industries, ICICI Bank, Axis Bank, Bharti Airtel, NTPC, M&M, Cipla and Dr Reddy's Labs with 1-2 percent loss. However, Infosys, HDFC Bank, Sun Pharma, Wipro and Bajaj Auto gained 1-2 percent.

On the global front, Shanghai closed with a gain of more than 2 percent, hitting 5-year highs after comments from Premier over the weekend heightened expectations for a stimulus. Europe too traded in the green. All eyes are on the 2 day FOMC policy that will begin on Tuesday.

1:50 pm DLF: Following a favourable verdict from the Securities Appellate Tribunal (SAT), DLF is now looking at options to raise fund, says Ashok Tyagi, group CFO. The SAT quashed Sebi's order barring DLF and its promoters from raising capital for alleged disclosure lapses in its initial public offering in 2007.

In an interview to CNBC-TV18, Tyagi says DLF is considering issuance of commercial mortgage backed securities, which will help reduce its cost of borrowing by 1.5-2.0 percentage points. The company pays roughly Rs 750 crore interest every month, including dividend on

preference shares, on its debt. Tyagi says the lower borrowing rate should help the company save around Rs 175 crore on dividend payouts. He says there is good demand in the luxury residential property segment, while the mid-market segment remains sluggish.

1:30 pm Asian market: Japan's Nikkei share average ended almost flat as profit-taking set in after it had hit a 15-year high earlier ahead of central bank policy meetings in Japan and the United States later this week. The Nikkei share average closed at 19,246.06, having

peaked at 19,349.20 in early trade as investors bought banks and other domestic demand oriented shares. Investors took profits in recent gainers such as drugmakers, rubber product makers and railway and truck companies.

The market is still under selling pressure. The Sensex is down 57.96 points at 28445.34, and the Nifty is down 17.50 points at 8630.25. About 915 shares have advanced, 1765 shares declined, and 170 shares are unchanged.

Infosys, Bajaj Auto, Wipro, HDFC Bank and Sun Pharma are top gainers in the Sensex while Sesa Sterlite, NTPC, HDFC, Hindalco and Bharti Airtel are laggards.

Meanwhile, International Monetary Fund chief Christine Lagarde said the global economic recovery remains "too slow, too brittle and too lopsided", singling out divergences in monetary policy as a risk that could cause financial market volatility.

Christine Lagarde reiterated the IMF's forecast that, more than six years after the global financial crisis, the world economy would grow by just 3.5 percent this year and 3.7 percent in 2016.

12:55pm Lupin acquires Pharma Dynamics: Lupin entered into an agreement to acquire the balance 40 percent equity stake in South African generics major, Pharma Dynamics (PD) from its founders. "As per the agreement, the founders will exercise their put option before

March 31, 2015, for 40 percent stake it currently holds. On completion of this transaction, PD will become a wholly owned subsidiary of Lupin," said the company in its filing.

Pharma Dynamics's basket of products includes SA market leaders like Amloc (hypertensive drug), Fedaloc (Nifedipine), Bilocor (Bisoprolol), Texa Allergy (Cetirizine) and Lancap (Lansoprazole).

12:45pm Asian markets Update: Asian shares drifted higher today after a downbeat session on Wall Street kept sentiment in check, while the euro recovered from a fresh 12-year low touched on the divergent monetary policy paths between the United States and the euro zone.

Oil prices continued to tumble, with US crude dropping more than 2 percent at one point to a six-year low amid oversupply fears. The International Energy Agency said on Friday that the global supply glut is growing and US production shows no sign of slowing.

US crude shed about 1.2 percent to USD 44.31 a barrel, while Brent crude lost about 0.6 percent to USD 54.32.

MSCI's broadest index of Asia-Pacific shares outside Japan was a few ticks higher, erasing early losses and remaining above last week's seven-week trough.

12:25pm Interview: Rajesh Shah, Co-Chairman & MD, Mukand said the new subsidiary was created so that there would be greater focus on alloy steel business, while the stainless steel and engineering business would remain with the main company, said Shah. It would be 99 percent owned subsidiary of Mukand Limited.

However, in future they would surely look at listing the company but as of now they have not yet made those plans, he added.

The company would currently focus on enlarging the business and make it a global business. He also clarified that the Rs 1590 crore transfer price was based on various assets and there was no opposition from shareholders for this transfer.

12:00pm Market Check
The market continued to be volatile amid marginal selling pressure in noon trade. The Sensex fell 36.80 points to 28466.50 and the Nifty declined 8.50 points to 8639.25. Metals, oil and FMCG stocks saw selling pressure while technology and auto stocks gained.

The BSE Midcap and Smallcap indices slipped 0.2 percent and 0.5 percent, respectively. Declining shares outnumbered advancing ones by a ratio of 1553 to 934 on the Bombay Stock Exchange.
 
WPI inflation came in at negative 2.06 percent in February against negative 0.39 percent in previous month due to fall in manufactured products and food prices. Fuel, power group inflation stood at negative 14.72 percent against negative 10.69 percent during the same period.

DLF climbed 3 percent as the company deferred conversion of compulsory convertible preference share for 1 year.. Also it reduced dividend coupon rate of 9 percent to 0.01 percent for extended period. Company told CNBC-TV18 that the savings from the reduced dividend coupon rate will be around Rs 175 crore.

Hindalco, JSPL and Usha Martin lost 2-4 percent as CNBC-TV18 learnt that the government will re-examine bids for five more coal blocks auctioned in schedule 3. It is also likely to skip signing agreement with the 5 coal block allottees, say sources.

Globally, Asian markets remained higher with Shanghai touching a more than five-year high on rising stimulus bet. Brent crude slipped further to USD 54 a barrel.

11:45 am Coal auction: The government has decided to re-examine bids for five more coal blocks auctioned in Schedule 3 on the grounds of bid timing and amount. These bids closed just Rs 2 above the opening bid prices. The government is likely to skip signing

agreement with respect to the five block allottees. It was to sign the allotment letter today. The government has the right to re-auction coal blocks to derive greater valuation. The five coal blocks and allotments under scanner are Tara Coal Block won by Jindal Power at Rs

126 per tonne, Brinda and Sasai Block won by Usha Martin at Rs 1804 per tonne, Meral Coal Block won by Tirumala Industries at Rs 727 per tonne, Dumri Coal Block won by Hindalco at Rs 2,127 per tonne and Mandla South won by Jaypee Cements at Rs 1,852 per tonne.

11:30 am Interview: With the forthcoming over Rs 2900-crore preferential issue to government as part of its capital infusion plan this fiscal, the capital adequacy ratio (CAR) of the bank will go up from 10.66% to 11.1 percent is the word coming in from VG Kannan, MD, State

Bank of India . SBI on Saturday fixed Rs 295.59 per share as price for its forthcoming over Rs 2900-crore preferential issue to government as part of its capital infusion plan this fiscal. Last month, the government had announced to infuse Rs 2,970 crore into India's biggest

bank under its Rs 11,200- crore capital infusion plan for nine large public lenders. According to him, the ratio of allotment to the government will be as per Sebi formula.

The market is still in red as the Sensex is down 26.12 points at 28477.18. The Nifty is down 8.65 points at 8639.10. About 870 shares have advanced, 1405 shares declined, and 163 shares are unchanged.

Bajaj Auto, Infosys, Sun Pharma, HDFC Bank and HUL are top gainers in the Sensex. Among the losers are Sesa Sterlite, NTPC, Bharti Airtel, Cipla and Hindalco. Metal stocks are falling sharply.

DLF is the top gainer on the Nifty reacting to the compulsory convertible preference share of CCPS conversion being postponed by one-year until March 18, 2016. Management says the saving from the reduced dividend coupon rate will be around Rs 175 crore. Macquarie

maintains an outperform rating on stock with a target price of Rs 149 saying removal of capital ban a big relief, UBS has raised its target to Rs190 versus Rs 175 earlier saying the sharp cut in coupon rate is a positive.

Meanwhile, growth in China's fiscal revenue cooled to its slowest in at least a year between January and February as China's foundering economy dampened tax collection and other key sources of government income.

Fiscal revenue rose 3.2 percent to 2.57 trillion yuan (USD 410.5 billion) in the first two months of the year, data from the Finance Ministry showed on Monday. That was far less than an average 8.6 percent gain in fiscal income seen in 2014, and the slackest pace seen in at least a year.

Indeed, a breakdown of the figures showed taxes collected from the real estate sector fell 1.6 percent to 96.5 billion yuan in the first two months of the year as China's housing industry stumbled.

10:30am Inflation: Despite the CPI numbers coming in marginally worse than expected, Sonal Varma of Nomura expects inflation to stabilize over the next 3-6 months. But the path to inflation stabilization may be bumpy, she warns.

Core CPI, ex-fuel is closer to 5 percent versus the current 4 percent, she adds. Based on this and a few other factors, she believes the Reserve Bank is likely to stay on hold, going forward. According to her, the RBI has frontloaded rate cuts.

Varma sees business cycle recovery starting to come back. She says relative to manufacturing, it is the services side of the economy that is doing much better.

10:00am Market Check: The market fell further amid consolidation. The Sensex declined 62.13 points to 28441.17 and the Nifty dropped 21.10 points to 8626.65 led by index heavyweights HDFC, ICICI Bank and Reliance Industries.

The BSE Midcap and Smallcap indices lost 0.5 percent each. The market breadth was weak too. About 743 shares have advanced, 1208 shares declined, and 144 shares are unchanged on the Bombay Stock Exchange.

Rakesh Arora, Macquarie says interest rate easing cycle, government-led infrastructure build and consumption growth revival should be the dominant themes for 2015-16.

According to him, industrials, autos and real estate provide the best opportunity to gain from the emerging trend. he recommends building long positions on dips.
 
HDFC plunged 2.5 percent on profit booking. A media report says Standard Life may raise stake in HDFC JV to 35 percent.

Shares of NTPC, Cipla, Bharti Airtel, Mahindra & Mahindra, GAIL and Hindalco Industries slipped 1-2.5 percent. Sesa Sterlite dropped over 3 percent. Reliance Industries and ICICI Bank declined nearly a percent.

However, HUL and Wipro climbed over a percent. HDFC Bank, TCS, Infosys, Tata Motors, L&T and SBI gained 0.3-0.9 percent.

9:50 am Buzzing: Shares of aviation stocks are active on buyers' radar hoping that the Government is likely consider new norms for flying international. Jet Airways and SpiceJet were up 3-4 percent intraday on Monday as the government may move a Cabinet note soon on

scrapping the current regulations allowing international operations for domestic airlines and replacing them with "simple and clear" norms.

Official sources today said the existing norms, popularly known as 5/20 rule and which are part of the revised draft Civil Aviation Policy, allow only those domestic carriers fly abroad which have a fleet size of 20 aircraft and completed five years of operations.

"After the government released the draft rules, there has been further interaction with the airlines, the 5/20 (rule) has to now go to the Cabinet," a source said.

9:30 am FII view: Rakesh Arora, Macquarie says interest rate easing cycle, government-led infrastructure build and consumption growth revival should be the dominant themes for 2015-16.

According to him, industrials, autos and real estate provide the best opportunity to gain from the emerging trend. He recommends building long positions on dips.

The market has opened tepid following global cues. The Sensex is up 10.05 points at 28513.35 and the Nifty is down 1.85 points at 8645.90. About 478 shares have advanced, 224 shares declined, and 110 shares are unchanged.

Tata Power, Tata Motors, HDFC Bank, ITC and Dr Reddy's Labs are top gainers in the Sensex. Among the losers are Hindalco, NTPC, GAIL, Sesa Sterlite and Bharti Airtel.

In the US, Wall Street closed lower on Friday, as a week of mixed economic data, renewed dollar strength and sharply lower oil prices made traders cautious ahead of this week's fed meeting.

In Europe, equities closed slightly mixed on Friday, as the oil and gas sector took another hit from tumbling prices.

From the currency space, the euro sank to a fresh 12-year low after a recent bounce as investors were still very bearish on the common currency. Persistent weakness in the euro helped the dollar index stretch to a 12-year high of 100.42

In commodities, NYMEX crude prices tumbled almost 5 percent on Friday to USD 44 per barrel after the International Energy Agency said that a global oil glut is building and US oil production shows no signs of slowing. Brent crude slips to USD 53/bbl levels

Gold, from the precious metal space is trading near its lowest in over three months, pressured by a stronger dollar, ahead of a key Federal Reserve policy meet this week that could hint at the timing of any hike in US interest rates.

Amongst the BRIC markets, the Central Bank of Russia cut its key lending rate by 1 percentage point to 14 percent making it the second rate cut this year. The bank said it is more concerned about a recession than high inflation. The latest monetary policy decision came

after December's surprise hike in the key interest rate from 10.5 percent to 17 percent. That was when the central bank was trying to shore up a weakening ruble and combat inflation.