Sensex sinks 234 points, Nifty at 7-mth closing low; Midcap down 2%

3:30 pm Market Closing: Equity benchmarks started off the week with a 1 percent loss on fears of likely increase in long term capital gains tax.

The 30-share BSE Sensex was down 233.60 points or 0.90 percent at 25807.10.

The 50-share NSE ended at 7-month closing low as well as below the Brexit day low of 7927. The index dropped 77.50 points or 0.97 percent to 7908.25.

The broader markets underperformed benchmarks as the BSE Midcap and Smallcap indices shed 2 percent each. About four shares declined for every share rising on the BSE.

ICICI Bank, HDFC Bank, Reliance Industries, Tata Motors, Lupin and SBI were top contributors to Sensex's fall, down 1-3 percent. Cipla was the biggest loser, down 5 percent.

2:59 pm Market Update: Benchmark indices remained under pressure. The Sensex was down 216.39 points at 25824.31 and the Nifty fell 69.80 points to 7915.95.

About four shares declined for every share rising on the BSE.

2:40 pm Board nod: Gayatri Projects said in a meeting on December 26, the board of directors approved sub-division of nominal value of equity shares of Rs 10 per share to Rs 2 per share.

2:35 pm IPO: Surgical products manufacturer Sutures India is eyeing Rs 700 to 800 crore IPO in the first half of calendar-year 2017.

The company is looking at a combination of offer-for-sale and fresh issuance of shares, reports Priya Sheth quoting sources.

The issue will likely see part exit of private equity investors. TPG Growth holds 52 percent stake and promotes hold close to 30 percent and remaining is held by CX Partners and Keadaara Capital.

The company is into making surgical and wound-closure products and is eyeing strategic opportunities to expand in South East Asian Countries.

2:20 pm Global M&A deals: Global merger and acquisition activity has soared to USD 3.1 trillion so far this year -- its third highest since 2007 -- even as deal value saw over 22 per cent decline over last year, says a report.

According to global deal tracking firm Mergermarket, despite a series of "political shockwaves", global M&A activity till date amounted to USD 3.1 trillion, through 16,194 deals.

The M&A deal tally so far this year registered a 22 per cent decline in value terms and 10 per cent fall in number of transactions over last year. Last year, the global deal tally stood at USD 3.9 trillion.

However, global M&A activity till date of USD 3.1 trillion managed to reach its third highest deal value since 2007, when transactions worth USD 3.7 trillion were announced.

2:00 pm Market Check
Equity benchmarks recovered a bit from day's low with the Nifty trading above 7900 amid volatility. Fears of likely increase in long term capital gains tax weighed on market sentiment.

Market veteran Ramesh Damani said there would definitely be some tinkering of taxes in this Budget while tax expert Dinesh Kanabar said given the government's current mindset, anti-avoidance could be applied generally on practices like dividend stripping.

The 30-share BSE Sensex was down 168.56 points at 25872.14 and the 50-share NSE Nifty fell 59.80 points to 7925.95. About four shares declined for every rising on the BSE.

Shares of Divis Labs fell over 11 percent, hitting 28-month low at Rs 768.45 per share intraday on regulatory concerns. The stock fell 22 percent on Friday, losing 33 percent in last three days. Analysts say recent US Food and Drug Administration (USFDA) Form 483 shows some serious observations which could potentially escalate to warning letter/import alert.

Reliance Communications slipped nearly 5 percent, continuing downtrend for third consecutive session, especially after Moody's Investors Service last week said that RComm's ratings would "remain on review for downgrade" despite the company signing an agreement with Canada-based Brookfield Infrastructure to sell its tower assets.

1:55 pm Fun raising: Srei Infrastructure Finance said its subsidiary plans to raise up to Rs 500 crore through public issue of non-convertible debentures (NCDs).

"Srei Equipment Finance, a wholly-owned subsidiary of Srei Infrastructure Finance, is proposing a public issue of secured redeemable NCDs of face value of Rs 1,000 each aggregating up to Rs 500 crore," the Kolkata-based company said in a BSE filing today.

The issue, which is proposed to be listed with the exchanges NSE and BSE, will open on January 3 and close on January 20, 2017.

1:45 pm IPO news: Surgical Products Manufacturer Sutures India is eyeing Rs 700 to 800 crore IPO in the first half of calendar-year 2017.

The company is looking at a combination of offer-for-sale and fresh issuance of shares, reports Priya Sheth quoting sources.

The issue will likely see part exit of private equity investors. TPG Growth holds 52 percent stake and promotes hold close to 30 percent and remaining is held by CX Partners and Keadaara Capital.

1:30 pm M&A deals: Global merger and acquisition activity has soared to USD 3.1 trillion so far this year -- its third highest deal value since 2007, even as deal value saw over 22 percent decline over last year, says a report.

According to global deal tracking firm Mergermarket, despite a series of "political shockwaves", global M&A activity till date amounted to USD 3.1 trillion, through 16,194 deals.

The M&A deal tally so far this year registered a 22 percent decline in value terms and 10 percent fall in number of transactions over last year. Last year, the global deal tally stood at USD 3.9 trillion.

The market is still sluggish with investors nervous on tax woes. The Sensex is down 220.60 points or 0.8 percent at 25820.10, and the Nifty down 72.55 points or 0.9 percent at 7913.20. About 478 shares have advanced, 1889 shares declined, and 122 shares are unchanged.

Cipla, Tata Motors, Tata Steel, Hero MotoCorp and ONGC are top losers in the Sensex while HUL, Reliance and Dr Reddy's Labs are top gainers.

Leading stock exchange BSE will introduce new interest rate futures (IRF) contracts from December 30 on 6-year government bonds maturing in 2022. The IRF contract is based on 6.84 per cent central government security maturing on December 19, 2022, and will be available for trading from December 30 this year, BSE said in a circular.
 
An IRF contract is an agreement to buy or sell a debt instrument at a specified future date at a pre-determined price.
 
The cash-settled IRFs provide market participants an option to hedge risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.

12:59 pm Market Update: Benchmark indices continued to fall. The 30-share BSE Sensex was down 226.30 points at 25814.40 and the 50-share NSE Nifty dropped 74.60 points to 7911.15.

About 1882 shares declined against 484 advancing shares on the BSE.

12:40 pm Buzzing: Shares of Panacea Biotec surged more than 10 percent intraday as the company launched world's first fully liquid tetravalent vaccine Easyfour-TT in India to protect children from vaccine-preventable diseases.

The tetravalent vaccine is used for active primary immunisation and booster dose against diphtheria, tetanus and pertussis (DTP) and haemophilus influenza type B (Hib).

Easyfour-TT is a sterile and uniform suspension, manufactured using CDAP technology with WHO pre-qualified antigens which ensures good quality, high immunogenicity and less reactogenicity.

12:20 pm Market Expert: The fall in the market is also largely because of unwinding of the position, which people have been carrying. The momentum broke in November and people are now finding pains because the market is not recovering. That is where the desperate selling is taking place,  Deven Choksey of KRChoksey Investment Managers says.

According to him, this could be the last leg of selling which may have started happening and whether it could break it down below to 7,750 or even beyond that. Difficult to predict this point of time because volume is very low.

12:00 pm Market Check
The market remained under pressure with the Sensex shedding more than 250 points, weighed by banking & financials, auto, metals and pharma stocks.

The 30-share BSE Sensex was down 263.79 points at 25776.91 and the 50-share NSE Nifty slipped 87.15 points to 7898.60. About four shares declined for every share rising on the BSE.

Cipla, Tata Steel, Hero Motocorp, Tata Motors, Hindalco, Aurobindo Pharma, Bharti Infratel, Yes Bank and ONGC are the top losers while HUL was the top gainer.

The market could go lower, but it is not the time to panic yet, believes Dipan Mehta, member NSE and BSE.

January will be closely watched before taking any call on the market, he says.

11:45 am Market views: Krishna Kumar, investment director of Eastspring Investments and began by asking him what he thinks of the year gone by.

Kumar said that China which kicked off measures to root out black money in 2014 took three years to complete it.

Talking about GST, he mentioned that it is an equally disruptive measure, which will see a lot of informal business coming into the formal fold.

The dollar trade is turning out to be a consensus trade. It is a safe haven trade and the key point is investors are reluctant to buy country funds. They want to look at broad-based investing styles, he mentioned.

11:30 am Market outlook: Market expert, Nilesh Shah of Kotak Mahindra AMC, said there could be many events impacting the market – issues like US yields rising, short-term demonetisation pain impacting consumption and SMEs etc. It is very difficult to gauge the bottom levels for the market but it has become more of a stock-specific market than sector-specific, said Shah, so if you get stocks at your prices then it is a good opportunity to buy. ''At every price there are stocks to buy and stocks to sell,'' he said. According to him, market will not decline, forever, so it is time to accumulate stocks that you always wanted to have in the portfolio. It is a pendulum market, so look for companies with good management, good governance.

The market is still under pressure as the Nifty struggles below 7950. The 50-share index is down 64.40 points or 0.8 percent at 7921.35 and the Sensex is down 195.60 points or 0.7 percent at 25845.10.

Lupin, Dr Reddy's Labs, Maruti and Reliance are top gainers while Cipla, Axis Bank, Tata Steel, Coal India and BHEL are losers in the Sensex.

With the overall environment not looking good, only the upcoming Budget can bring some cheer to the market, believes UR Bhat, director of Dalton Capital Advisors.  Bhat said that market has to find a new low from here. Some positive commentary from the government is needed to bring cheer to market.

IT and automobile are the sectors to hide in at this time, Bhat said. Any bet on banks can be taken after December quarter results only.

10:55 am USFDA nod: Pharma Major Lupin has received tentative approval for its Olmesartan Medoximil tablets, 5 mg, 20 mg and 40 mg from the United States Food and Drug Administration (FDA) to market a generic version of Daiichi Sankyo Inc's Benicar tablets.

This drug is indicated for the treatment of hypertension, along or with other antihypertensive agents to lower blood pressure.

Benicar tablets had US sales of USD 1.06 billion, as per IMS MAT September 2016.

10:40 am Market Expert: With the overall environment not looking good, only the upcoming Budget can bring some cheer to the market, believes UR Bhat, director of Dalton Capital Advisors.

The Nifty today broke its Brexit day low of 7950. Demonetisation is expected to have an extended impact on the market and December quarter earnings will be low. Also, the US President-elect Donald Trump will take charge on January 20, which is adding to market's worry.

Bhat said that market has to find a new low from here. Some positive commentary from the government is needed to bring cheer to market.

10:20 am Buzzing: Shares of Welspun Enterprises advanced 6.5 percent intraday as it is going to divest its stake in Welspun Energy.

The company has, subject to the approval of the members of the company, approved sale of its entire investment of 6,04,93,342 equity shares (15.49 percent) in the paid up equity share capital of Welspun Energy.

"As against its investment of Rs 91.1 crore, the stake is proposed to be sold to Welshop Trading, for a consideration of approximately Rs 290 crore plus contingent consideration, thereby implying more than 3x returns to the company on its investment," as per company release.

In addition to buying out Welspun Enterprises' stake, Welshop Trading, part of Welspun Group, has agreed to buy out the stake of other shareholders in Welspun Energy at equivalent consideration.

10:00 am Market Check
Equity benchmarks continued to reel under selling pressure on fears of hike in long term capital gains tax after PM comments. Banking & financial stocks hit hardest with Nifty Bank falling over a percent.

The 30-share BSE Sensex was down 208.20 points at 25832.50 and the 50-share NSE Nifty fell 66.90 points to 7918.85. The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices shedding over 1.3 percent on weak breadth.

About five shares declined for every share rising on the BSE.

ICICI Bank, HDFC, HDFC Bank, Tata Motors, Axis Bank and SBI were down 1-2 percent while Maruti Suzuki, Asian Paints and Dr Reddy's Labs outperformed, rising 0.5-1 percent.

All eyes are on December quarter earnings that will begin from next month.

Sanjay Kadam of Nomura says the consolidated FY17 consensus earnings estimates for Sensex stocks were down by 0.5 percent over the past month, combined with a 2.1 percent increase in the Index, from 25,765 on November 21, 2016 to 26,308 on December 20.

The market earnings multiple has increased to 15.54x vs 15.34x a month ago, the market is trading at a 9.3 percent discount to its five-year average.

9:55 am Market outlook: Speaking to Ramesh Damani, Member of BSE said that they do pay their share of taxes in the form Securities Transaction Tax. "Everytime we buy a share, whether we sell it a loss or profit, we pay a tax,'' he said, adding that the government makes Rs 7000 crore by way of this tax on a dull year. Commenting on how it is painless, and fair the tax is, he said it is not fair to say the stock market isn't paying its fair amount of taxes.

To assuage market fears, Finance Minister Arun Jaitley on Sunday said there is no move to impose long-term capital gains tax on share transactions, an issue investors are hugely touchy about. The statement came a day after Prime Minister Narendra Modi reportedly dropped a hint on increasing taxes on capital markets and the need for all sections, including market players, to contribute to the national exchequer.

9:45 am Breaking away: Shares of Divis Labs fell over 11 percent, hitting low at Rs 768.45 per share intraday on regulatory concerns. Analysts say recent US Food and Drug Administration (USFDA) Form 483 shows some serious observations
which could potentially escalate to warning letter/import alert.

On December 7, 2016, the US Food and Drug Administration (USFDA) had issued form 483 with five observations against Divi's Laboratories' unit at Chippada Village in Visakhapatnam of Andhra Pradesh. The USFDA inspected the company's unit from November 29, 2016 to December 6, 2016.

9:35 am Market check: The Nifty is at over 7-month low threatening to break the 7900-level. The 50-share index is down 79.90 points or 1 percent at 7905.85 and the Sensex is down 250.17 points or 0.9 percent at 25790.53.

The market seems to be getting nervous as Prime Minister Narendra Modi suggested that people earning from financial markets must make a "fair contribution" to nation building. However, Finance Minister Arun Jaitley rejected possibilities of any hike in long-term capital gains tax on market participation and said Modi's speech has been wrongly interpreted.

Cipla, Axis Bank, Adani Ports, ONGC and SBI are losers in the Sensex.

The market has opened weak. After initial hiccups, the Nifty slipped below 7950. The 50-share index is down 39.05 points or 0.5 percent. The Sensex is down 117.85 points or 0.4 percent at 25922.85. About 246 shares have advanced, 572 shares declined, and 46 shares are unchanged.

Axis Bank, Adani Ports, Cipla, SBI and HDFC are losers in the Sensex.

The Indian rupee opened flat at 67.82 per dollar on Monday versus Friday's closing 67.82. Dollar index slipped below the 103 mark. The dollar dipped against the yen, edging lower down after US treasury yields dipped on mixed economic data.

Crude prices hold steady as the market waits to see how OPEC would manage its planned output cuts with Libya expecting to boost production.

Gold gained marginally as the dollar retreats from 14-year high and some buyers were tempted to take advantage of prices near a 10-month low after six weeks of decline.