Sensex sheds 155 points ahead of RBI policy; Jet Airways up 4%

The market fell for the fourth consecutive session Monday with the Sensex shedding 155 points ahead of RBI's first quarter review of monetary policy on July 30.

The BSE Sensex closed at 19593.28 while the NSE Nifty fell 54.55 points or 0.93 percent to finish at 5831.65, but the cut was deeper in midcaps as the BSE Midcap Index fell 1.3 percent.

Experts do not see any major action from the much-awaited monetary policy review as the central bank had already taken liquidity measures in past one month to curb rupee depreciation.

Rahul Chadha, head of India investment, Mirae Asset Global Investments (HK) believes the RBI is unlikely to change rates in its monetary policy on Tuesday. "They will maintain the status quo. Whatever had to be done, they did over last one month," he adds.

"Recent government and RBI actions highlight that protecting the rupee now takes precedence over growth revival. While we see lower probability of extreme actions from the RBI, quick reversal of the new policies is unlikely," says Mahesh Nandurkar of CLSA.

The BSE Bankex lost more than 5 percent from last week. Disappointing earnings from public sector banks was another reason for sharp fall in banks.

The credit rating agency CRISIL in its recent report has warned that Reserve Bank of India 's recent liquidity tightening measures to curb exchange volatility would worsen non-performing asset of banks as the sectors like power, construction, engineering and steel will find it difficult to repay loans.

Country's largest private sector lender ICICI Bank , which will announce its earnings on Wednesday, declined just 0.26 percent while its rivals State Bank of India and HDFC Bank slipped 1-1.7 percent.

Vijaya Bank , Allahabad Bank , Syndicate Bank and Indian Bank dropped 3-7 percent on asset quality concerns in the first quarter.

Jet Airways shares rallied 3.7 percent to Rs 411 today. (News after market hours) Foreign Investment Promotion Board has cleared the Jet-Etihad deal , according to CNBC-TV18 quoting sources. It is learnt that the FIPB gave conditional nod to that deal.

Ahead of first quarter earnings on Tuesday, Dr Reddys Labs lost nearly 4 percent while Jindal Steel gained close to 5 percent.

Wipro shares surged nearly 7 percent post earnings that were in-line with analysts' forecast. India's third largest software service exporter is fairly confident of growth in upcoming quarters given the pick up in large deal closures in first quarter and recovery in key markets like US and Europe.

Metals stocks remained under pressure; Sterlite Industries, Hindalco Industries and Coal India were down 3-4 percent.

FMCG stocks also dropped further with the Hindustan Unilever ( HUL ) and ITC falling nearly 3-4 percent. Among others, Tata Motors and Sun Pharma gained 2 percent.

CLSA has a sell call on HUL with a target price of Rs 500 while JP Morgan has downgraded it to underweight and expects earnings downgrades given slowing revenue growth trends and waning tailwinds on the margin front.

Natco Pharma was the biggest gainer today, rising 20 percent after the pharmaceutical firm received favorable US ruling on Copaxone patent case.

Declining shares outnumbered advancing ones by 1393 to 817 on the Bombay Stock Exchange.

Indian rupee depreciated by 37 paise to close at 59.41 against the US dollar.

Globally, Asian markets closed lower with the Japan's Nikkei falling 3.3 percent on stronger Yen and China's Shanghai losing 1.7 percent.

4:00 pm Movers and losers: Wipro (up 7 percent), Jindal Steel (5 percent), Tata Motors (2 percent), Sun Pharma , Hero Motocorp are big gainers in the Sensex. Meanwhile, Hindalco , HUL , Sterlite Industries, Dr Reddys Lab, Coal India are major losers.

3:50 pm Midcap losers: Core Education, Hanung Toys , JK Cements, BGR Energy, Wockhart, Jubilant Industries , Delta Corp are top midcap losers.

3:45 pm Market closing: The market started the week with a big slump as the Nifty dropped almost 1 percent while midcaps cracked further due to earnings weakness. The Sensex closed down 154.91 points at 19593.28, and the Nifty slipped 54.55 points to end at 5831.65. About 817 shares have advanced, 1393 shares declined, and 164 shares are unchanged.

3:40 pm Earnings: Sesa Goa's consolidated net profit fell to Rs 414 crore in April-June quarter from Rs 964 crore year-on-year. During the period, net sales fell dismally to Rs 361 crore annually (from Rs 1725 crore in Q1 FY13). Its forex loss shrunk to Rs 99.2 crore from Rs 232 crore Y-o-Y. The stock closed down 4.4 percent on the BSE.

3:30 pm Boardroom: Public sector lender Allahabad Bank is making an effort to curb its non-performing liabilities. In this quarter, the bank managed NPA recovery of Rs 837 crore and reduced fresh addition to Rs 1,694 crore from Rs 2,586 crore, says CMD Shubhalakshmi Panse.

She told CNBC-TV18 that its total restructured book stands now at Rs 13,595 crore against Rs 14,874 crore (March 31, 2013). The bank also has an exposure to Lanco Infratech, which has filed for corporate debt restructuring, she adds.

3:25 pm Earnings impact: Colgate -Palmolive (India) shares are down around 2 percent on the BSE. The toothpaste maker  reported a 58 percent year-on-year jump in first quarter net profit at Rs 185 crore, helped by exceptional gains.

The company had a one-time gain of Rs 71 crore in the April-June quarter, which included sale of its Global Shared Services Organisation to Colgate Global Business Services, a subsidiary of Colgate-Palmolive Co, USA.

Colgate's net sales for the quarter were up 15 percent from a year ago to Rs 845 crore.

The market is unable to find ground today as banking, FMCG, metals and oil & gas stocks dragged indices. The Sensex is down 159.01 points at 19589.18, and the Nifty slips 57.35 points to 5828.85.  About 783 shares have advanced, 1353 shares declined, and 143 shares are unchanged.

In a network18 exclusive interaction, Finance Minister Chidambaram assures the nation that RBI's latest moves will not translate into an interest rate hike. Speaking on the government's ambitious direct cash transfer plan, the FM says the benefits will begin to show in the next six months.

JP Associates sulks in trade after earnings for both its cement and construction business come in below consensus expectations. On an adjusted basis, the company reports a loss of Rs 60 crore. Interest cost goes up significantly to Rs 590 crore.

The big boy from FMCG, HUL slides another 5 percent after brokerages give a thumbs down to the stock. CLSA has a sell call with a target of Rs 500. JP Morgan has downgraded it to underweight, as it expects earnings downgrades for HUL given slowing revenue growth trends and waning tailwinds on the margin front.

Arvind shares declined one percent despite strong earnings. Consolidated net profit of the textile company more than doubled to Rs 67.6 crore in April-June quarter from Rs 32.5 crore in a year ago period.

Consolidated net sales rose by 27.5 percent Y-o-Y to Rs 1,501 crore and EBITDA margin jumped 150 bps year-on-year to 14.2 percent from 12.7 percent.

Monsanto rose more than 2 percent after the company's first quarter net profit grew by 15.6 percent Y-o-Y to Rs 56.2 crore and net sales soared 11.55 percent Y-o-Y to Rs 223.1 crore during June quarter.

Dr Reddys Labs slipped 2.6 percent ahead of earnings on Tuesday. Motilal Oswal expects the healthcare firm to report a 17.1 percent growth year-on-year in net profit at Rs 290.7 crore. EBITDA margin or operating profit margin is likely to be at 31.7 percent in June quarter as against 26.1 percent in March quarter and 21.7 percent in a year ago period.

Reliance Capital's consolidated net profit soared nearly 3 times year-on-year to Rs 133 crore and revenues grew by 16 percent Y-o-Y to Rs 1,914 crore in April-June quarter. The stock declined 2.3 percent.

02:25pm Equity benchmarks continued to trade lower with the Nifty falling below the 5850 level, weighed down by FMCG, banks, oil & gas and metals stocks.

Bankex declined one percent ahead of Reserve Bank of India 's monetary policy review that scheduled to be announced on Tuesday.

Rahul Chadha, head of India investment, Mirae Asset Global Investments (HK) expects a downside in the banking sector on the back of rate hikes seen over the last two-three weeks.

He believes the Reserve Bank of India is unlikely to change rates in its monetary policy on Tuesday.

The BSE Sensex is down 142.64 points at 19605.55, and the Nifty is down 50 points at 5836.20. Declining shares outnumbered advancing ones by 1371 to 743 on the BSE.

Among metals, Sterlite Industries and Hindalco Industries dropped more than 4 percent, while Jindal Steel gains 5.5 percent ahead of Q1 earnings on Tuesday.

FMCG majors ITC and Hindustan Unilever plunged 3-4 percent.

1:55 pm Weakling:  JK Cement tanks 17 percent on the BSE. Higher input costs and subdued sales pulled down JK Cement's April-June standalone net profit to Rs 30.88 crore, down 55 per cent over the same period last fiscal.

1:50 pm Rupee stats: The rupee extended losses as shares headed for a fourth consecutive session of declines and on month-end dollar demand from importers. The pair was at 59.32/33 versus last close at 59.04/05, reports Reuters.

Dealers also cited outflows to the tune of USD 250 million related to dividend payments by ITC . For the year ending March 2013, ITC has declared an equity dividend of R 5.25 per share.

1:45 pm Market outlook: When investing in markets one should not chase momentum instead diversify portfolio, says Nilesh Shah of Axis Direct .

"Diversification is very critical, it comes from asset allocation, never put all your eggs in one basket. There has been a correction in gold, fixed income market and realty will be no different. So the option of not putting money across various segments such as debt, equity, currency, commodity and offshore assets is non-existent," he told CNBC-TV18.

1:40 pm Macro outlook: India needs to relax rules to attract more foreign investments, Finance Minister P Chidambaram said on Monday.

The government is seeking higher foreign investments to fund the current account deficit, which hit 4.8 percent of the GDP in the fiscal year that ended in March.

A swollen deficit has helped make the rupee the worst performing emerging Asian currency, which has been down over 9 percent since the beginning of May.

1:35 pm Boardroom: Higher input cost and sluggish demand dented cement sector growth during June quarter.

While explaining what went wrong during the quarter, Shailendra Chouksey, Wholetime Director, JK Lakshmi Cement told CNBC-TV18 that the firm saw a steep drop in volume in the quarter gone by. He further blamed a slowdown in construction and infrastructure activities which led to muted demand.

1:30 pm India Inc update: In a crucial high level meeting, Prime Minister Manmohan Singh will brainstorm with industry leaders today. CNBC-TV18 learns that the PM will seek ideas from industry to revive growth and investments. The meeting is likely to be attended by CII President Kris Gopalakrishnan, Chanda Kochhar, Deepak Parekh and Sunil Mittal besides several others.

It is a weak Monday for the market as the Nifty is trading close to 5850, weighed down by commodities, FMCG  and capital goods. The Sensex is down 100.96 points at 19647.23, and the Nifty is down 36.35 points at 5849.85. About 758 shares have advanced, 1237 shares declined, and 124 shares are unchanged.

The cuts are deeper in the midcap index. Banks like Syndicate, Allahabad, Dena and Indian Bank are being punished the most.

Globally, Japan's Nikkei collapses 3 percent on a stronger yen.

JP Associates recovers nearly 8 percent from the day's low after bottomline comes in higher than estimates at almost Rs 335 crore, boosted by an exceptional gain on account of sales of JP Infra shares. The topline too is marginally better than expectations.

The Jet Airways stock is excited in trade ahead of the FIPB meet today to consider the deal with Etihad. FIPB had sought more clarity on the ownership structure of Jet Airways and effective control by Etihad.

Jet Airways stock is excited in trade (up 8 percent) ahead of the FIPB meet today to consider the deal with Etihad. FIPB had sought more clarity on the ownership structure of Jet Airways and effective control by Etihad.

Spicejet is flying high today, up 9 percent. Reports suggest that it is in advanced stage of talks with an investor for a stake sale and expects the negotiations to be concluded soon.

Natco Pharma is locked at 20 percent upper circuit after it received a favorable US ruling on the Copaxone patent case. It may launch Copaxone, used in the treatment of multiple Sclerosis, through Mylan in May 2014.

12:40pm Globally European markets opened higher. France's CAC, Germany's DAX and Britain's FTSE gained 0.6 percent each.

Asian markets remained under pressure with the Japan's Nikkei falling over 3 percent and China's Shanghai slipping 1.75 percent.

Back home, Hindustan Unilever shares slid another 4 percent after brokerages gave thumbs down to the stock. CLSA has a sell call on the stock with a target price of Rs 500. JP Morgan has downgraded it to underweight and expects earnings downgrades for HUL given slowing revenue growth trends and waning tailwinds on the margin front.

Wipro is buzzing today after the company guided for 2 percent to 4 percent dollar revenue growth for the second quarter, much better than consensus expectations and the highest in many quarters. Nomura has raised its target on the stock to Rs 455 from Rs 400, while Standard Chartered feels the risk-reward looks attractive. The stock gained 6 percent.

12:30pm It is a shade of red for the market, the Nifty is trading at 5850, weighed down by FMCG, capital goods and rate sensitives.

The BSE Sensex is down 88.75 points at 19659.44, and the NSE Nifty is down 31.85 points at 5854.35, but the cuts are deeper for the midcap index that dropped one percent.

The market breadth is also weak; about 754 shares have advanced while 1175 shares declined on the BSE.

Banks like Syndicate Bank , Allahabad Bank , Dena Bank and Indian Bank are being punished the most, falling 2-6 percent while infrastructure too is reeling under pressure.

Jaiprakash Associates recovered nearly 4 percent from day's low after bottomline grew higher than estimates at almost Rs 335 crore, boosted by an exceptional gain on account of sales of Jaypee Infra shares via offer for sale. The topline too is marginally better-than-expectations at Rs 3,283 crore. The stock declined 2.5 percent.

Sun Pharma is quoting ex-bonus today. The stock gained 2 percent after adjustment with the ratio of 1:1.

11:50 am Earnings: Vijaya Bank 's first quarter net profit grew by 19.4 percent year-on-year to Rs 132.5 crore on higher other income and lower provisions.

Net interest income of the bank increased 5.7 percent to Rs 481 crore in April-June quarter from Rs 455 crore in a year ago period.

Other income surged 118 percent year-on-year to Rs 267 crore from Rs 122.6 crore.

11:40 am Earnings: State-run lender Indian Bank disappointed the street (down 6.4 percent on the BSE) with the first quarter net profit falling higher-than-expected 31.2 percent year-on-year to Rs 317.4 crore.

Net interest income dropped 4.9 percent to Rs 1,097 crore in April-June quarter from Rs 1,153 crore in a year ago period, which was below forecast.

Analysts on an average had expected the bank to report net profit at Rs 356 crore and net interest income at Rs 1,148 crore.

11:35 am Houseview: Goldman Sachs adds Tata Motors to its Asia-Pacific "conviction buy list" and raises its sum-of-the-parts target price on the stock to Rs 368 from Rs 361.

Goldman says it sees three key catalysts for Tata Motors shares, including improving market confidence on the auto maker's cash flow and profitability. The stock is up 2.4 percent on the BSE.

11:30 am Market outlook: Rahul Chadha, head of India investment, Mirae Asset Global Investments (HK) expects a downside in the banking sector on the back of rate hikes seen over the last two-three weeks. The consumer stocks are also likely to fall due to steep valuations.

He believes the IT sector would relatively hold on in this market and will provide the safe haven at least for the near-term after the companies posted good earnings due to fall in the rupee.

With regards to the market, he expects it to fall by another 5-7 percent, but if the government continues doing right things, there could be more flows from longer-term investors into the market.

The market is still weak pulled lower by banking and FMCG stocks. The Nifty is struggling below the 5900-mark at 5848.75, down 37.45 points while the Sensex slips 107.51 points to 19640.68. About 643 shares have advanced, 1099 shares declined, and 92 shares are unchanged.

The Asian markets slump as Nikkei is down over 2 percent, weakening for the fourth day in a row, ahead of a speech by Governor Kuroda. As the yen hit a month high against the dollar hurting exporter stocks, shanghai is down 1.5 percent.

Dollar index hits a 5-week low as traders get cautious ahead of fed meeting. Dollar index is down 0.4 percent to 81.64 , lowest since June 20 and the euro rose to 5-week high of 1.32 to the dollar.

Commodities are slightly lower, Brent is down to USD 1007 per barrel on amid concerns over falling Chinese demand. China's industry minister ordered companies across 19 industries to close outdated capacity by the end of September. Gold hovers around USD 1326 an ounce mark.

The rupee opened slightly weaker in trade today on heavy demand for dollars from PSU banks, probably on behalf of oil companies. Flows haven't been forthcoming from exporters as markets watch for the RBI policy tomorrow and the FOMC statement on Wednesday.

Torrent Pharma shares rallied 5.5 percent after its consolidated net profit jumped 46 percent year-on-year to Rs 149 crore in first quarter.

JK Cement plunged 7 percent post the cement firm's first quarter net profit dropped to Rs 30.9 crore from Rs 68.9 crore Y-o-Y.

JK Lakshmi Cement crashed 8 percent. The first quarter net profit fell to Rs 15.7 crore from Rs 50.3 crore Y-o-Y.

Natco Pharma shares are locked at 20 percent upper circuit Monday after the healthcare firm received favorable US ruling on Copaxone patent case.

Bharti Airtel and Jindal Steel rallied 2 percent each while ITC , Maruti, Hindalco and Sterlite Industries dropped 2-3 percent.

10:20am The BSE FMCG Index dropped nearly 3 percent. Hindustan Unilever crashed more than 5 percent after CLSA has a sell call on the stock with a target price of Rs 500.

"The three key near-term concerns for the management are slowing market, volatility and media inflation," CLSA report said.

Wipro shares gained over 7 percent after the software services exporter posted in-line with expected numbers in Q1.

Wipro, India's third largest software service exporter, is fairly confident of growth in upcoming quarters given the pick up in large deal closures in first quarter and recovery in key markets like US and Europe.

10:05am The market slipped further in morning trade Monday with the benchmarks falling 0.5 percent, weighed down by FMCG and capital goods stocks.

Country's largest lender State Bank of India and its rival HDFC Bank lost 1-1.6 percent ahead of RBI monetary policy review on Tuesday.

The BSE Sensex is down 90.13 points at 19658.06, and the Nifty is down 31.35 points at 5854.85. Declining shares outnumbered advancing ones by 729 to 440 on the BSE.

Jet Airways shares gained nearly 7 percent. The Foreign Investment Promotion Board or FIPB will meet today to consider the Jet-Etihad deal. Remember, FIPB had sought more clarity on ownership structure of Jet Airways and effective control by Etihad.

SpiceJet surged close to 8 percent on reports that the aviation company is in talks with potential buyers for stake sale.

9:55 am Booster: Natco Pharma surges 20 percent as it received favourable US ruling on Copaxone patent case. The company says that it may now launch generic Copaxone via Mylan in May 2014, subject to US FDA nod.

9:50 am Opinion: Sanjay Sinha, founder, Citrus Advisors cautions that the fast moving consumer goods (FMCG) stocks are likely to see a major sell-off, which will take the market to a reasonable levels. "The nominal level of the market that you see through the Sensex or Nifty levels is not really telling the full story that we have a bipolar market which is capitulating both with a lot of people selling at one end and at the other end we have people who are either buying mindlessly or are not selling at all," he told CNBC- TV18 in an interview.

Meanwhile, Sinha said that IT has been one sector that saw a late rally, but is now seeing a buying due to strong rally in its stock prices. Therefore, he added that more buying in the IT, less selling in FMCG and some of the stray performers from the infrastructure or the real sectors may take the nominal level of the index somewhere closer to its previous high.

9:45 am Jet soars: Jet Airways is up around 7 percent on the BSE. The Foreign Investment Promotion Board (FIPB) is scheduled to meet today to study Jet-Etihad deal. They had sought more clarity on ownership structure of Jet Airways and on 'effective control' by Etihad in Jet. Meanwhile CNBC-TV18's sources indicate that Jet-Etihad could have submitted revised agreement to regulatory bodies including FIPB.

9:40 am Macro outlook: Noting that India continued to be the second fastest growing economy in the world after China, Finance Minister P Chidambaram today said people should not be worried about the current slowdown and expressed hope of achieving six per cent growth this fiscal.

People should remember India continues to be the second fastest growing economy after China. Even China's growth which was at 10 per cent has come down to seven per cent now, while our growth has slid to five per cent from nine per cent," he said at a bank function.

9:35 am Buzzing: India Cements shares gained 8.6 percent in early trade Monday as President-in-exile N Srinivasan's may return to the BCCI top post. N Srinivasan is also the vice chairman and managing director of India Cements.

Meanwhile, on Sunday the two-member panel, comprising former High Court Judges T Jayaram Chouta and R Balasubramanian, found no evidence against Srinivasan's team Chennai Super Kings in the IPL spot-fixing and betting scandal which rocked the sixth edition of the event.

9:30 am Loser: Investors are selling off HUL shares (down around 5 percent on the BSE) on the back of April-June quarter earnings. There was nothing to cheer up in the Hindustan Unilever's April-June quarter results announced on Friday. Total income in the Q1 grew lower-than-expected 7 percent year-on-year to Rs 6809 crore. Net profit, however, was higher-than-expected at Rs 1019 crore, compared with Rs 1331 crore in a year ago period.

In the year ago quarter, the net profit included one-off gain of Rs 120 crore.

9:20 am Big buzzer: Wipro surges around 4 percent on the BSE as it delivered inline results for the April-July quarter. However, the dollar revenue was almost flat at 0.2 percent is lagging peers quite significantly. Margins are slightly lower than street estimates but that shouldn't worry the street because Wipro's margins have been very stable around 20-21 percent. The first dollar revenue guidance is a big positive. It is higher than consensus estimates at 2- 3.88 percent. It is also the highest it has given in the last few quarters.

The market kickstarts the week's trading on a quiet note. The Sensex is down 11.01 points at 19737.18, and the Nifty down 13.30 points or 0.23% at 5872.90. About 243 shares have advanced, 205 shares declined, and 41 shares are unchanged.

It is a very important week for the market with the macro events lined up with the Fed meeting tomorrow and RBI monetary policy review on July 30.

The Fed's two-day policy meeting kicking off on Tuesday is likely to decide on how best to prepare financial markets for a reduction of their bond-buying programme.

CNBC-TV18 Managing Editor Udayan Mukherjee says that influence of the Fed meeting results will be most on Indian market than what RBI decides in its monetary policy review.

In key earnings today, expect a disappointing quarter from Jaiprakash Associates . According to CNBC-TV18 poll, profits may slip 36 percent to Rs 89 crore year-on-year. Meanwhile realisations may come flat sequentially.

Other companies that are expected to announce April-June quarter earnings are Sesa Goa , J P Associates, UltraTech Cement , IDFC , Reliance Capital , Bharti Infratel , MCX , JP Infratech, City Union Bank , Vijaya Bank , Sundaram Finance , Syndicate Bank , Colgate Palmolive, Geometric , Indian Bank , Arvind , Allahabad Bank , Madras Cement, Mahindra Holiday, Prestige Estate, TV18, Network18, Zuari Agro, Subros , Ajanta Pharma , BASF and Noida Toll .

The prime minister is expected to meet industry leaders today to discuss the reform agenda given India's economic concerns. The government may re-iterate commitment to economic reforms. The PM could address concerns on current account deficit and announcements on infra measures on cards.

Asian markets were trading weak. China's Shanghai Composite shed 1.21 percent or 24.25 points at 1,986.60. Hong Kong's Hang Seng fell 0.46 percent or 101.50 points at 21,867.45.  Japan's Nikkei plunged 2.54 percent or 358.85 points at 13,771.13. 
Singapore's Straits Times declined 0.52 percent or 16.82 points at 3,219.28.

In the currency space- the euro is above 1.32 to the dollar. The dollar index is around 81.50 levels. The dollar yen is around 98 levels.

In commodities, Brent crude prices slip marginally to USD 107 and Nymex slips to sub USD 105 per barrel. From precious metals space, gold is hovering around USD 1328 per ounce.