Sensex up 376 points, Nifty tad below 7950; Infy, ITC, RIL lead

30 Sep 2015

3:30 pm Market Closing: Equity benchmarks rallied smartly on Wednesday, following strong lead from global peers.

The Sensex jumped 376.17 points or 1.46 percent to 26154.83 and the Nifty rallied 105.60 points or 1.35 percent to 7948.90.

About 1668 shares have advanced, 988 shares declined, and 116 shares are unchanged on the BSE.

Tata Steel, Bharti Airtel, BHEL, GAIL, Coal India, Idea Cellular, Cairn India and Asian Paints topped the buying list, up 4-7 percent. However, SBI, Axis Bank, Vedanta, Tech Mahindra and Bank of Baroda underperformed, down 1-2 percent.

3:10 am Interview: Post Reserve Bank's 50 basis points (bps) repo rate cut on Tuesday, Axis Bank today cut its base rate by 35 bps to 9.5 percent effective from October 5. The bank has passed on 65 bps rate cut since April this year.

Srinivasan Varadarajan, Executive Director - Corporate Banking, Axis Bank told CNBC-TV18 that as bank's cost of funds reduces, transmission of rate cuts will happen. ''35 bps cut reflects our lower cost of funds,'' he added.

Varadarajan said that the bank would have cut rates even if RBI hadn't cut repo rate in its monetary policy meet on Tuesday. Margins will not be impacted post this base rate cut, he said.

The bank is awaiting RBI's policy on marginal cost of funds, which is expected to be released next week.

3:05 pm Market Update: Equity benchmarks extended rally in late trade with the Sensex rising 352.38 points or 1.37 percent to 26131.04 and the Nifty climbing 103.25 points or 1.32 percent to 7946.55.

About 1582 shares have advanced, 985 shares declined, and 122 shares are unchanged on the BSE.

3:00 pm Federal Bank on startups: Private lender Federal Bank today said it has created a corpus exclusively for investment in startups.

"The primary objective is to provide long-term capital to startup companies with innovative ideas, potential for high growth and ability to bring socio-economic impact," the Kerala-based private sector lender said in a statement.

The fund will be used for supporting small ticket projects in diverse sectors like digital financial services, biotechnology, hi-tech farming, healthcare, logistics, e-commerce and e-markets.

"The initial corpus is of Rs 25 crore which is scalable. To start with, the bank will focus on projects in Kerala and Gujarat," it said.

2:45 pm Auto sales forecast: Nomura says MHCV volumes should grow 35 percent Y-o-Y in September as this is the last month before the anti-lock braking system (ABS) become mandatory in India (October 1, 2015 onwards), driving prices higher.

For passenger vehicles, it forecasts that the industry to sustain a modest around 5 percent Y-o-Y growth; key players like Maruti Suzuki and Hyundai should deliver stronger growth benefitting from new launches.

The brokerage feels with monsoon rainfall deficit continuing at around 13 percent to date, rural demand remains weak. As well, with the festive season being delayed by around 18 days (starts with Dussehra on October 22, 2015 versus October 4, 2014), Nomura expects overall 2-wheeler industry volumes to fall around 8 percent Y-o-Y in September.

2:25 pm China loses 25% in Q3CY15: Global stock markets are headed for their weakest quarterly performance in four years after a torrid summer that saw investor sentiment rocked by developments in the world's two largest economies.

A sustained collapse in commodity prices, China's stunning market rout followed by its shocking currency devaluation as well as fears of a Greek default and a September US interest rate hike were some of the numerous factors that made the past three months a summer to remember (or forget) for investors.

China's benchmark Shanghai Composite appeared to be one of the world's worst performers with a 25 percent loss, its weakest performance since 2008.

In comparison, the S&P 500, Dow Jones Industrial Average and Nasdaq were all headed for a 9 percent loss. In Europe, Germany's Dax was set for a 15 decline, 11 percent for the French CAC, 8 percent for Italy and 13 percent for the Ibex.

2:15 pm Cairn India up 4%: Government is going to join Cairn arbitration to resolve Rs 10,247 crore tax dispute. It will appoint arbitrator soon.

2:00 pm Market Check
The market continued to hover around psychological levels amid strong momentum, led by rally in global peers. The Sensex spiked 256.60 points or 1 percent to 26035.26 and the Nifty climbed 64.40 points or 0.82 percent to 7907.70. However, Bank Nifty underperformed with cut of nearly 1 percent.

Sanjeev Prasad of Kotak Institutional Equities says interest in emerging markets is low currently. He expects FII redemptions from India to continue and expects Nifty EPS to be cut by another 5-6 percent for the year.

It is a good day for global markets. Asian stocks recovered from global rout, ended in the green with Nikkei up almost 3 percent. European markets, too, started the day with almost 2 percent gains. However most markets ended the quarter with deep cuts, Japan down 14 percent in July-September quarter.

The government cut local gas prices from USD 5.50 to USD 4.24 per mmbtu. The gas price revision will be valid till March 2016. ONGC said its revenue will fall by over Rs 2,000 crore and PAT will drop by over Rs 1,000 crore in the second half of FY16 due to the price cut. Edelweiss Securities said the drop in gas prices will boost Indraprastha Gas's profit by 5 percent.

Godrej Properties sold 4.35 lakh square feet of its BKC project to Abbott for consideration of Rs 1,479 crore. The stock spiked 7 percent.

Bharti Airtel (4.1 percent), Tata Steel (3.9 percent), BHEL (3.6 percent) and Coal India (2.9 percent) were the top gainers in Nifty. Among the losers, SBI, Axis Bank and Vedanta fell more than 2 percent.

In sectoral performance as reflected by the respective indices, metals (2.4 percent), FMCG (1.6 percent), healthcare (1.5 percent) and power (1.4 percent) gained, while bank (-1.0 percent) were under pressure.

In second line shares, investors were partial to midcaps than small caps, with the BSE Midcap Index up 1.2 percent compared to a 0.8 percent increase in the BSE Small Cap Index.   

JSW Energy (7 percent), Wockhardt (7 percent), Container Corporation (7 percent), Reliance Communications (6 percent) and Torrent Pharma (6 percent) were the big winners in midcap space. Other notable gainers included Voltas (4 percent), Natco Pharma (4 percent), IRB Infra (4 percent), Shree Cements (5 percent) and JSW Steel (5 percent).

The rupee was quoting at 65.73 to the dollar, up 23 paise over its previous close.

1:40 pm Gas price to dent govt revenues: Natural gas prices were today cut by a steep 18 percent to USD 3.82 per unit, the biggest reduction in rates ever, that will dent government revenues by about Rs 800 crore and hit profits of producers like ONGC.

Natural gas prices, as per the formula approved by the government in October last year, will fall to USD 3.82 per million British thermal unit (mmBtu) on gross calorific value (GCV) basis for six months, beginning October 1, from the current USD 4.66 per mmBtu, according to the Oil Ministry.

On net calorific value (NCV) basis, the new gas price for October 1 to March 31, 2016 would be USD 4.24 per mmBtu as compared to USD 5.18 currently.
 
The reduction, the steepest ever, will hit producers like state-owned Oil and Natural Gas Corp (ONGC) as well as central government whose earnings from royalty and income tax will dip by about Rs 800 crore during the remainder of the fiscal, according to industry estimates. State government earnings from VAT on gas sales will also fall by over Rs 250 crore. For ONGC, the move will results in a hit of Rs 1,059 crore on its net profit, its Director (Finance) A K Srinivasan said.

1:15 pm Nestle in News: There seems to be no respite for Nestle 's Maggi as the National Consumer Disputes Redressal Commission today issued a notice to the company. The notice is based on  food regulator FSSAI's plea seeking further testing of Maggi samples.

After a nation-wide ban on Nestle's marquee product Maggi in June, the Bombay High Court in August in favour of the company once more safety tests were passed.

Nestle is embroiled in a government class action suit seeking damages to the extent of Rs 640 crore from the company on account of misrepresentation to customers and potential damage caused.

But that's not all. The redressal commission has also issued a notice to the government over a Nestle' application, seeking a dismissal of class action suit with respect to the Bombay High Court order that gave some relief to Nestle.

The company said it has suffered huge reputational loss and has been singled out with no action being taken against other manufacturers.

1:00 pm Market Check
The rally continued in equity markets for the second consecutive session today, which was further strengthend after strong European cues. France's CAC and Germany's DAX gained 2 percent each followed by Britain's FTSE with 1.7 percent upside on a positive lead from Asia and Wall Street.

The Sensex rallied 268.17 points or 1.04 percent to 26046.83 and the Nifty rose 77.70 points or 0.99 percent to 7921. The BSE Midcap and Smallcap indices gained 1 percent each too.

Tata Steel (4.4 percent), Bharti Airtel (3.9 percent), Hindalco (3.2 percent) and Tata Motors (3.1 percent) are the top gainers in Nifty.

In sectoral performance as reflected by the respective indices, metals (2.9 percent), healthcare (1.7 percent), FMCG (1.5 percent) and IT (1.3 percent) gained, while bank (-0.2 percent) were under pressure.   

Wockhardt (8 percent), JSW Energy (6 percent), Container Corp (6 percent), JSW Steel (5 percent) and Torrent Pharma (5 percent) were the big winners in the midcap space. Other notable gainers included Voltas (4 percent), Shree Cements (4 percent), IRB Infra (4 percent), SKS Microfinance (5 percent) and IGL (5 percent).

The rupee was quoting at 65.73 to the dollar, up 23 paise over its previous close. Brent crude was trading at USD 48.26/barrel, down USD 0.34 or 0.7 percent over its previous close.

12:50 pm Buzzing: Shares of New Delhi Television (NDTV) have climbed 8 percent intraday after its digital company has signed with content discovery platform Taboola.

"NDTV Convergence, the digital arm of NDTV group, today signed with Taboola to power content recommendations across their entire network of desktop and mobile sites," the media company says in its filing.

The deal is estimated to be worth Rs 90-100 crore for NDTV over the course of agreement based on traffic projections across web and mobile, it adds.

12:40 pm Europe Update: European stocks opened higher today following a positive lead from Asia and Wall Street overnight.

London's FTSE 100 index was up over 1.5 percent, the German DAX surged 2.4 percent while the French CAC saw a 2.1 percent pop.

Europe looks set to follow Asian stocks which largely advanced on Wednesday, recovering from the carnage in the previous session. Commodities will remain in focus for investors in Europe, however, with the mining and oil sector a cause for concern.

Crude oil futures fell in early Asian trade on Wednesday after US inventories showed a weekly buildup in crude oil stockpiles that far exceeded analyst expectations, Reuters reported.

12:31 pm ADAG AGM: Bullish on growth prospects of his group's financial services businesses, industrialist Anil Ambani on Wednesday said Japanese major Nippon Life is in an advanced stage of talks to hike stake in Reliance Life Insurance and Reliance Mutual Fund units within this financial year.

In Reliance Life, Nippon plans to hike the stake from 26 percent to 49 percent, while it would increase its holding in Reliance Capital Asset Management Company from 35 percent to 49 percent.

Besides, Reliance Capital is targetting to more than double its housing finance business loan book to Rs 10,000 crore this fiscal and is aiming to become one of the top three players from the private sector in this business, he said.

Addressing the shareholders at its Annual General Meeting here, the Reliance Capital Chairman also reiterated that the company would set up a new bank in India in collaboration with Japan's Sumitomo Mitsui Trust Bank as and when RBI's policy permits.

He further said that the company would continue to unlock value at appropriate stages through stake sales in different businesses and also liquidate its financial investments in non-core areas, such as media, to book attractive returns.

12:14 pm FII View: India is still better placed compared to other emerging markets though the pace of reforms has been disappointing, says Ian Hui, Global Market Strategist at JP Morgan Asset Management.

In an interview with CNBC-TV18, Hui says sentiment for emerging markets in general could be downbeat for a while, but is generally positive on the prospects for India.

"I would probably consider India one of the more manufacturing oriented countries; they are set to do a lot better," he says.

12:00 pm Market Check
The market has maintained its strong momentum in noon trade, supported by FMCG, pharma, select auto, tech and oil stocks. The Sensex rallied 207.18 points or 0.80 percent to 25985.84 and the Nifty rose 55.10 points or 0.70 percent to 7898.40. About 1513 shares have advanced, 810 shares declined, and 107 shares are unchanged on the BSE.

Infosys, Tata Motors, Bharti Airtel, Dr Reddy's Labs, Tata Steel, Coal India, Hindalco Industries and BHEL topped the buying list, up 2-4 percent.

However, Axis Bank, SBI and Vedanta fell more than 1 percent.

11:45 am Buzzing: L&T climbed over a percent intraday today on getting order by its power transmission & distribution business.

"The power transmission & distribution business of L&T Construction has won orders worth Rs 1,376 crore in both the domestic and international markets in September 2015," the engineering and construction major said in its filing.

In domestic market, solar business has bagged multiple orders for engineering, procurement and construction of 115 MWp solar installations in southern part of the country. Upon completion, total installed capacity of solar plants by the company would be 643MWp.

It has also received an order from West Bengal State Electricity Transmission Company for engineering, procurement and construction of 132 kV double circuit transmission lines.

In international market, it has made a strategic breakthrough in Malawi, Africa, by bagging an order for construction of two 400/132kV substations on EPC basis. It has bagged another order in the Middle East of a 220kV substation.

11:30 am Gas price cut: Sources told CNBC-TV18 that the government has reduced local gas prices to USD 3.82 per mmBtu for October-December period from USD 4.66 per mmBtu earlier.

It is learnt that October-December local gas prices will cost USD 4.24 per mmBtu based on net calorific value. Gas price revision will be valid till March 2016.

Brokerages feel Indraprastha Gas may benefit the most as lower gas price may boost CNG and domestic PNG business (which is more than 80 percent of its volumes. They see some impact on ONGC as its earnings per share may decline.

11:15 am Market Expert: There is a need for more follow-on action on reforms from the central government, is the word coming in from Sanjeev Prasad of Kotak Institutional Equities. As far as the macroeconomic situation is concerned, India is in a very safe spot, he says. The only missing piece, according to him, is growth.

"Consumption at the moment is weak, private sector investments are nearly dead and net exports is suffering as a consequence of whatever is happening globally," he told CNBC-TV18. Based on this, he is taking the 7.5-8 percent GDP growth figures with a pinch of salt.

Also, Prasad says interest in emerging markets is low and India too will get impacted because of FII redemption pressures. However, he believes external sectors such as IT and pharma are doing well at the moment. It may also be a good idea to play themes linked to macroeconomic development, he adds.

Going ahead, he expects Nifty EPS to be cut by another 5-6 percent for this year.

11:00 am Market Check
Benchmark indices remained strong with the Sensex rising 181.04 points to 25959.70 and the Nifty climbing 40.60 points to 7883.90. The Indian rupee appreciated further, up 20 paise to 65.76 a dollar in morning trade.

The BSE Midcap and Smallcap indices increased more than 0.8 percent as market breadth was positive. About 1415 shares have advanced against 640 shares declined on the Bombay Stock Exchange.

Shares of Infosys, ITC, Lupin, Tata Motors, HUL, Sun Pharma, Bharti Airtel, Dr Reddy's Labs and Wipro gained 1-3 percent.

Tata Steel climbed 3.7 percent after a media report indicated that steel producers are likely to hike prices by up to Rs 1,500 per tonne.

However, Bank Nifty saw profit booking, falling 100 points as ICICI Bank, Axis Bank and State Bank of India declined 0.9-1.7 percent.

IGL (5 percent), Container Corp (5 percent), Torrent Pharma (5 percent), SKS Microfinance (4 percent) and JSW Steel (4 percent) were the big winners in midcap space. Other notable gainers included JSW Energy (3 percent), Jindal Steel (3 percent), Amara Raja Batteries (3 percent), IRB Infra (3 percent) and Wockhardt (4 percent).

10:40 am FII View: Anand Kumar, Bank of America Merrill Lynch says while this higher than expected cut in policy rates is a positive for the markets at the margin, the impact on earnings will likely be felt with a lag of around two quarters after the transmission into lending rate cuts.

This sets up a case for earnings recovery in FY17, he feels. According to Kumar, key gainers would be Yes Bank, Indiabulls Housing Finance, Sobha and UltraTech Cement.

10:30 am Sandhar Technologies files IPO papers: Automotive OEM component supplier Sandhar Technologies on Tuesday has filed its draft red herring prospectus (DRHP) with market regulator SEBI seeking permission for its initial public offer (IPO)

The issue consists of a fresh issue of equity shares aggregating up to Rs 300 crore and offer for sale of upto 51,15,456 equity shares by GTI Capital Beta Pvt Ltd.

Fresh issue proceeds will be utilised for establishment of a new manufacturing facility at Hosur (Tamil Nadu), repayment/pre-payment of loans and general corporate purposes, said the company.

ICICI Securities Limited, IDFC Securities Limited, IIFL Holdings Limited & Jefferies India Private Limited are book running lead managers and Link Intime India Private Limited is registrar to the issue.

10:15 am Buzzing: Shares of Blue Star Infotech (BSIL) have declined 20 percent as the company has sold its IT business to Infogain.

Infogain Inc, a ChrysCapital portfolio company, is going to acquired company's IT business and its subsidiaries in USA, UK & Singapore for Rs 180.80 crore, which is payable upon completion of the sale.

The sale of subsidiaries includes, Blue Star Infotech America Inc for Rs 36.50 crore,  Blue Star Infotech (UK) for Rs 21.80 crore and Blue Star Infotech (Singapore) for Rs 40.80 crore.

Meanwhile, the company would retain its real estate undertaking. The fair value of these net assets is expected to be around Rs 96.7 crore.

The board also approved the amalgamation of the company and its wholly owned subsidiary Blue Star Infotech Business Intelligence and Analytics Pvt Ltd. with Blue Star.

10:00 am Market Check
The market continued to see buying interest in morning trade led by FMCG, auto, metals, capital goods and pharma stocks. The Sensex rose 178.67 points to 25957.33 and the Nifty gained 44.25 points at 7887.55.

The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7 percent and 0.9 percent, respectively. The market breadth was also strong with three shares advancing for every share declining on the BSE.

Maruti Suzuki hit a record high of Rs 4,762.90, up more than 1 percent as CLSA believes the car maker will get benefitted from falling rate environment. On Tuesday, the Reserve Bank of India slashed repo rate by 50 basis points to 6.75 percent. CLSA believes that over the next 12-18 months, lending rates will likely reduce by about 150 bps.

9:50 am Buzzing: Shares of Eveready Industries rallied 7 percent after the Reserve Bank of India has raised FII investment limit in the battery manufacturer.
 
The Reserve Bank of India on Tuesday notified that foreign institutional investors/registered foreign portfolios investors can now invest up to 49 percent of paid up capital of Eveready Industries India under the portfolio investment scheme.

The company had already passed this resolution at its board of directors' level and a special resolution by shareholders, agreeing for enhancing the limit for purchase of its equity shares and convertible debentures by FIIs/RFPIs.

As of June 2015, FIIs shareholding in the company stood at 16.29 percent, which has been increased consistently from 10.47 percent in March 2015, 7.47 percent in December 2014 and 3.43 percent in September 2014.

9:35 am FII View: Mahesh Nandurkar, CLSA believes that over the next 12-18 months, lending rates will likely reduce by about 150 bps. The RBI policy rate cut of 50 basis points yesterday paves the way for this, he feels. He says a slight tweak by the RBI in its language towards an easier real interest rate methodology has raised hopes of more rate cuts in certain sections of the market. While corporate capex should be slow to react due to demand issues, rate reductions should help to stabilise property markets, he adds.

Nandurkar believes key beneficiaries of falling rate environment in his coverage universe will be IndusInd Bank, HDFC, Maruti, property companies, Power Grid and leveraged companies, including IRB Infra and PVR.

9:15 am Market Check
The market extended previous day's rally further in early trade Wednesday. The Sensex surged 225.78 points or 0.88 percent to 26004.44 and the Nifty climbed 71.35 points or 0.91 percent to 7914.65.

Tata Steel, Vedanta, TCS, Hindalco Industries, SBI, HDFC and IndusInd Bank rallied 1.5-2.5 percent.

The Indian rupee gained 9 paise in early trade today. It has opened at 65.87 per dollar against previous close of 65.96.

Pramit Brahmbhatt of Veracity feels reduction in FII inflows coupled with profit booking in local equities may pressure the rupee to trade weak.

He sees range for today between 65.40-66.40/dollar.

Globally, the markets are mixed with the US markets ending mixed as the market stabilised after a steep sell-off. The Dow and S&P closed higher while the Nasdaq closed lower.

European equities closed in the red as investors' sentiment turned negative despite recoveries in mining, autos and oil prices. London-listed commodity firm Glencore staged a rebound, climbing as much as 18 percent during trade after a note from Citi said that the selloff has been "overdone." The broker maintained its "buy" rating for Glencore.

Asian markets, meanwhile, are a mixed bag early Wednesday morning. The Nikkei has bounced back from eight-month lows. Lower than expected data released before the market open did little to dampen sentiment. Kospi is playing catch up after being shut for holidays. The market is currently trading near three-week lows.

In other asset classes, the US Dollar slipped as commodity currencies steady on Glencore shares rebound. Crude prices slipped with Nymex Crude hovering around the USD 44 mark while Brent slipped below USD 48 per barrel.