Sensex slips 134 points, Nifty ends below 8600; Lupin tanks 5%

03:30 pm Market closing: The Sensex is down 134.09 points or 0.5 percent at 28370.84, and the Nifty is down 43.70 points or 0.5 percent at 8589.80. About 1525 shares have advanced, 1316 shares declined, and 167 shares are unchanged.

Tata Motors, Dr Reddy's Labs, M&M, Maruti Suzuki and NTPC are top gainers in the Sensex. Among the losers are Lupin, Bajaj Auto, Tata Steel, Bhart Airtel and HUL.

03:10 pm Update: In what may come as a huge boost for iron ore production from Karnataka and a big plus for steel companies, sources say the Karnataka government is likely to move the Supreme Court to relax the cap on iron ore mining from the state.

The government is likely to file a case to seek a partial or complete relaxation on capping of iron ore mining in three four months time.

The Supreme Court had ordered a mining cap of 30 million tonne per annum on iron ore.

02:45 pm Earnings: Drug major Lupin disappointed street on every parameter with the first quarter profit falling 16 percent year-on-year to Rs 525 crore, impacted by lower US sales. Even its higher other income failed to boost bottomline.

Revenue slipped 5.7 percent to Rs 3,150 crore in the quarter ended June compared to Rs 3,340.82 crore in the year-ago period.

"Slowdown in approvals in the US dampened growth during the quarter, even as the company continues to improve on gross margins," said Nilesh Gupta, Managing Director, Lupin.

Other income increased by 161.43 percent to Rs 75.58 crore in first quarter of FY15 from Rs 28.91 crore in the corresponding quarter of last fiscal.

Operating profit (earnings before interest, tax, depreciation and amortisation) plunged 26.8 percent year-on-year to Rs 816 crore and margin declined 750 basis points to 25.9 percent in the quarter gone by. Analysts had estimated EBITDA at Rs 878 crore and margin at 26.6 percent for the quarter.

02:25 pm Rate cut possible?: The Reserve Bank is likely to keep interest rates on hold in the next month's monetary policy meet, but may slash the key lending rate by a 50-75 basis points by March 2016, Morgan Stanley today said.

The investment firm believes that the RBI will leave the interest rates unchanged in its August 4 policy review meet given the acceleration in June headline CPI inflation and increase in core CPI for the third consecutive month.

"We believe the RBI is likely to wait and watch how the monsoon season pans out and keep rates on hold in the August monetary policy meeting," Morgan Stanley said.

02:00 pm Market Check
The markets succumbed to selling pressure in afternoon trade with the Nifty falling below 8600. Bank Nifty continued to feel the heat, falling more than half a percent.

The Sensex dropped 130.44 points to 28374.49 and the Nifty declined 42.95 points to 8590.55. About 1469 shares have advanced, 1225 shares declined, and 156 shares are unchanged on the Bombay Stock Exchange.

Saurabh Mukherjea of Ambit Capital said the market will find support as long as domestic flows are intact. Domestic investor sentiment is the most positive seen in last 3-4 years, he added.

Bajaj Auto disappointed street as the company's topline missed estimates. Profit jumped 37 percent, boosted by other income. The stock lost nearly 5 percent.

Lupin crashed nearly 6 percent ahead of earnings. Sources told CNBC-TV18 US Food & Drug Administration has inspected company's manufacturing unit in Goa last week and handed out Form 483 with 9 observations post inspection. The US drug regulator has noted observations on compliance of manufacturing & quality controls. Observations related to cross contamination & free movement and stock locations & test records. Lupin will have 15 days to respond to US FDA on Form 483. Lupin's Goa unit makes formulations for supplies to US, EU and Japan.

12:55 pm Market recover: The Sensex fell 2.44 points to 28502.49 and the Nifty declined 6.05 points to 8627.45. About 1503 shares have advanced, 1085 shares declined, and 142 shares are unchanged on the BSE.

12:40 pm Earnings: State-run public sector lender Indian Bank disappointed street with first quarter profit growing 3.9 percent year-on-year to Rs 215 crore and net interest income rising 4.5 percent to Rs 1,120.3 crore. Net interest income is the difference between interest earned and interest expended.

Profit was supported by other income and operating profit but higher provisions year-on-year restricted growth (though provisions declined sequentially). Even its asset quality remained elevated on yearly basis as well as sequentially.

Other income (non-interest income) grew by 74.35 percent to Rs 375.6 crore in the quarter ended June from Rs 215.2 crore in the corresponding quarter of last fiscal. Operating profit rose by 11.2 percent to Rs 708.64 crore from Rs 637 crore during the same period.

12:20 pm FII View: Mahesh Nandurkar, CLSA said the brokerage's recent meetings with investors in Singapore & Hong Kong reveal that India continues to be a 'favoured' market among regional investors.

While some investors have reduced India's weightage, most investors believe in a sharp H2FY16 earnings recovery & focus on the long-term structural positives, retaining their overweight, he added.

According to him, downside risks to the market largely pertain to under-appreciation of the property sector slowdown & it's potential economy wide impact.

Nandurkar said the brokerage continued to stay cautious in the near-term on earnings downgrade possibilities. "Our top picks are Infosys, Maruti, HDFC Bank, Bharti Airtel, Coal India, Zee Entertainment, ICICI Bank, Sun Pharma & Tata Motors," he added.

12:00 pm Market Check
The market slipped into red in noon trade, dragged by FMCG and banks stocks. The Sensex declined 34.90 points to 28470.03 and the Nifty fell 15.55 points to 8617.95.

The broader markets outperformed benchmarks, though they are off the day's high. About 1467 shares have advanced, 1035 shares declined, and 139 shares are unchanged on the BSE.

Cairn India surged 7 percent after a media report indicated that Cairn Energy will vote against Vedanta's Cairn India offer. CLSA said the rejection of merger may drive 50 percent upside in Cairn.

In earnings action, Bajaj Auto topped the selling list on Sensex, down more than 3 percent as the company's topline missed estimates. Profit grew by 37 percent boosted by other income. Wipro, Lupin & GAIL remained in focus ahead of June quarter earnings.

Eicher Motors slipped 1 percent post downgraded by a few brokerages. Deutsche Bank downgraded stock to hold while Goldman Sachs removed it from Asia Pacific buy list.

Shares of ICICI Bank, ONGC, HUL, Bharti Airtel and Tata Steel declined 1-3 percent while Tata Motors, Infosys, M&M, Dr Reddy's Labs and Maruti gained 1-2.5 percent.

11:30 am Boardroom: Parthasarathy NS, chief operating officer of Mindtree believes there are opportunities in digital sector, but transparency and payment promise from government is needed to make it a success in the IT industry. ''Opportunities are phenomenal, but government has to do more in terms of giving confidence in terms of it will be fair, transparent and payments should be made on time,'' he said. On the company's two recent acquisitions, Parthasarathy said the goal was not just higher revenues, but also diversification .

The market is consolidating as the Nifty holds above 8600-level. The 50-share index is up 4.80 points at 8638.30. The Sensex is up 31.30 points at 28536.23. About 1519 shares have advanced, 705 shares declined, and 134 shares are unchanged.

Dr Reddy's Labs, Maruti Suzuki, Infosys, M&M and GAIL are top gainers in the Sensex. Among the losers are Tata Steel, HUL, ONGC, Bharti Airtel and Hindalco.

Oil prices were mixed in Asia, with WTI stuck below USD 50 a barrel after a rise in US stockpiles added to concerns over a supply glut, analysts said.

The US Department of Energy yesterday said the country's commercial crude stockpiles rose 2.5 million barrels last week, while supplies at the closely watched Cushing, Oklahoma, hub were up 800,000 barrels.

The report also showed US production staying at near- record levels of about 9.6 million barrels per day, bad news for a market already awash with crude from the Organization of the Petroleum Exporting Countries (OPEC).

10:45 am Earnings Poll: Bajaj Auto is likely to see a stable April-June quarter. According to a CNBC-TV18 poll, the auto major is expected to post Q1 net profit growth at 27.7 percent at Rs 945 crore from Rs 740 crore in corresponding quarter last fiscal. Revenue, during the quarter, may jump 13.3 percent at Rs 5952 crore versus Rs 5252.4 crore in year-ago period. EBITDA is seen up 30.6 percent at Rs 1209 crore against Rs 925.2 crore year-on-year while operating profit margin may come in at 20.3 percent from 17.6 percent. EBITDA margins may improve 270 basis points (bps) due to richer product mix.

10:30 am Interview: KPIT Technologies is aiming for double digit margin and revenue growth by the end of this fiscal, CEO and managing director of the company told CNBC-TV18.

KPIT's dollar revenue decreased 3.3 percent to USD 118.32 million in the June quarter. Services business grew 3 percent, and there was a decline in products segment due to seasonality, Patil said. The company had warned of lower profit after a dismal performance in last quarter of FY15.

Patil expects the engineering service business to be a key driver of growth.

He sees improvement in various segments of the company's digital business – internet of things (IOT), analytics and cloud. 

10:15 am FII View: Mahesh Nandurkar, CLSA said the brokerage's recent meetings with investors in Singapore & Hong Kong reveal that India continues to be a 'favoured' market among regional investors.

While some investors have reduced India's weightage, most investors believe in a sharp H2FY16 earnings recovery & focus on the long-term structural positives, retaining their overweight, he added.

According to him, downside risks to the market largely pertain to under-appreciation of the property sector slowdown & it's potential economy wide impact.

Nandurkar said the brokerage continued to stay cautious in the near-term on earnings downgrade possibilities. "Our top picks are Infosys, Maruti, HDFC Bank, Bharti Airtel, Coal India, Zee Entertainment, ICICI Bank, Sun Pharma & Tata Motors," he added.

10:00 am Market Check
The market entered into consolidation mode after rallying mroe than 1 percent in previous session. The Sensex gained 30.98 points at 28535.91 and the Nifty advanced 8.55 points to 8642.05.

The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.35 percent and 0.8 percent, respectively. More than two shares advanced for every share declining on the Bombay Stock Exchange.

The recent stock market run -- the Sensex is up 18 percent since the Narendra Modi government came to power -- has largely been based on hopes the government's steps to kickstart the economy will boost corporate earnings, says Saurabh Mukherjea, CEO - Institutional Equities, Ambit Capital.

"The domestic investor sentiment has been the most positive in three-four years," he told CNBC-TV18's Latha Venkatesh and Sonia Shenoy, a belief that is borne out by inflows data into mutual funds .

Dr Reddy's Labs rallied more than 2 percent followed by GAIL and Vedanta with 1 percent upside. However, Tata Steel topped the selling list on Sensex, down 2.8 percent. HUL, Tata Motors and Bharti Airtel slipped 1-1.6 percent.

9:50 am Cairn-Vedanta saga: Britain's Cairn Energy Plc is set to vote against Vedanta Ltd's USD 2.3 billion buyout offer for Cairn India's minority shareholders, the Financial Times said on Wednesday, citing people familiar with the situation. Cairn Energy's objections were over "fundamental disagreements over valuations", and its preference for "holding an investment in an energy company rather than a distributed resources group," the newspaper said, citing one person with direct knowledge of the matter. News of Cairn Energy's objections comes a day after Cairn India chief Mayank Ashar said the merger was on track.

9:40 am Buzzing: Share of SKS Microfinance rose nearly 3 percent intraday. The company has reported a 23.9 percent growth in net profit at Rs 61.1 crore for the first quarter ended June 30 as compared to the corresponding period in the previous fiscal.

The company earned a net profit of Rs 49.3 crore in the April-June quarter of 2014-15.

The total income of the company rose to Rs 282.6 crore during the quarter under review compared with Rs 168.9 crore in the same period last year, SKS Microfinance said in a statement.

9:30 am Result poll: Wipro, the country's third largest IT company, is expected to meet its first quarter guidance with revenue and dollar revenue rising 0.8 percent and 0.7 percent sequentially, respectively. According to a CNBC-TV18 poll, revenue is seen rising to Rs 11,331 crore from Rs 11,242 crore and dollar revenue may inch up to USD 1,787.5 million from USD 1774.5 million.

The market has opened flat but quickly slipped into red. The Sensex is down 9.92 points at 28495.01, and the Nifty is down 5.20 points at 8628.30. About 639 shares have advanced, 209 shares declined, and 77 shares are unchanged.

GAIL, Dr Reddy's Labs, Bajaj Auto, Wipro and M&M are top gainers while Tata Steel, Vedanta, HUL, Hindalco and ITC are among laggards in the Sensex.

The Indian rupee slipped 6 paise in the early trade on Thursday at 63.64 per dollar versus 63.58 Wednesday.

Mohan Shenoi of Kotak Mahindra Bank said, "Global markets are witnessing a fall in gold prices as part of a broader slide in commodity prices. US Fed rate hike looks certain in 2015. However, dollar is still trading in a range against major currencies awaiting further triggers."

The dollar gained after its biggest fall in a month on Tuesday. Sterling too gained in response to minutes from the Bank Of England's last meeting that suggested some policymakers support higher interest rates.

Asian stocks mostly traded on the back foot, as investors digested a flurry of economic data amid dampened sentiment due to a weaker finish on Wall Street overnight.

The spotlight remains on the commodity space; spot gold edged up modestly to USD 1,092.90 an ounce in early Asian trade after chalking up its 10th straight day of losses, in the longest losing streak for the precious metal in almost 20 years.

Over in Europe, the Greek government secured enough votes in parliament to pass a second package of reforms for a bailout package. The euro appeared little changed at 1.0944 against the greenback after the news.

Wall Street declined for a second straight session due to disappointing tech earnings overnight. The Nasdaq Composite was the biggest loser, down 0.7 percent, while the blue-chip Dow and the S&P 500 shed 0.4 and 0.2 percent, respectively.