BSE Sensex sheds 103 pts on profit booking; Fed meet eyed

Equity benchmarks shed more than 0.5 percent Tuesday amid volatility on profit booking and further depreciation in rupee. Investors seemed anxious ahead of the two-day Federal Reserve's policy meeting that will begin tonight.

BSE Sensex fell by 102.59 points to close at 19223.28, after 499 points rally seen in previous two sessions. The Nifty slipped 36.45 points to 5813.60.

Indian rupee depreciated by 91 paise to close at record low of 58.77 per dollar, continuing for the second consecutive session. Its record low was 58.98 per dollar on June 11.

Ashutosh Raina, head of FX Trading, HDFC Bank expects rupee to remain under pressure against the greenback till FOMC minutes are out. He believes rupee can touch its last time low of 59 against the dollar in the medium-term.

Raina says that outflows are likely to continue though there may not be fresh inflows during the period when Fed decides to taper off the quantitative easing.

Foreign institutional investors sold nearly Rs 2,900 crore worth of shares consecutively from June 11 to June 17.

Financials, healthcare, capital goods and oil & gas stocks led the fall in today's trade while metals shares gained.

Stock-specifically telecom operator Bharti Airtel dropped 1.7 percent in late trade, after its competitor Vodafone slashed data charges by upto 80 percent in three circles .

Country's largest lenders State Bank of India , ICICI Bank and HDFC Bank fell 1-1.5 percent.

Meanwhile, two-wheeler majors Hero Motocorp and Bajaj Auto gained 1-1.8 percent.

Tata Steel topped the buying list, rising nearly 3 percent while Infosys rose one percent on rupee depreciation.

On the global front, European markets were volatile ahead of Federal Reserve's meeting tonight.

Jeff Chowdhry, Head of Emerging Market Equities, F&C Investments says if Fed Chairman Ben Bernanke indicates continuity in stimulus then global markets could rally utmost 10 percent. ''At some point of time the Fed will have to start reducing QE and interest rates will have to go up, the current volatility is suggesting that global markets are trying to digest that inevitability.''

3:45 pm Update: IDFC board approves application to RBI for obtaining banking licence.

3:40 pm Gainers: Tata Steel , Bajaj Auto , Infosys , Sterlite Industries and Tata Power are top gainers in the Sensex.

3:30 pm Market closing: The Sensex ends the day down 97.58 points at 19228.29, and the Nifty closes at 5813.60, down 36.45 points.

3:15 pm Buzzing: Unichem Labs gains 2 percent after the foreign investment promotion board (FIPB) approved Mylan's FDI plan. Earlier, Mylan had proposed to acquire Unichem's manufacturing business.

3:12 pm Loser: Ranbaxy slumps 3.4 percent. The Supreme Court will hear a public interest litigation on the June 24 seeking directions to cancel the manufacturing license issued to Ranbaxy and prosecute its directors for allegedly selling adulterated medicines. Credit Suisse has a neutral rating. High cost of consent decree till 2014 is a key concern.

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The Nifty is hovering around 5830. While some metal names support, select rate sensitives and cement names drag. The Sensex is down 25.07 points at 19300.80, and the Nifty slips 13.40 points to be at 5836.65.

Tata Steel, Bajaj Auto, Tata Power, Hero MotoCorp and Sterlite Industries are gainers in the Sensex.

The midcap index is holding up with modest gains, JM Financial , Rel Comm and Hexaware are some of the gainers from that space.

02:55pm Equity benchmarks shed gains again, falling nearly 0.5 percent. Country's largest lenders State Bank of India , ICICI Bank and HDFC Bank fell more than one percent.

Even housing finance company HDFC lost over one percent.

Telecom operator Bharti Airtel slipped over one percent, after Vodafone slashed data charges by 80 percent.

02:50pm Unlisted telecom operator Vodafone India slashed data charges by 80 percent from 10 paise per  10kb to 2p/10kb.

According to the telecom operator, new rate is applicable to 2G pre-paid and post-paid customers. "New rates will be rolled out nationally in a phased manner," Vodafone said.

BPCL may set up another petrochem unit at Kochi with ONGC , reports cogencis quoting sources. It is learnt that ONGC chairman wrote to BPCL chairman to form joint venture for petrochem unit.

02:40pm Expert talks on global markets ahead of Federal Reserve meeting

Global markets could rally utmost 10 percent if Fed Chairman Ben Bernanke indicates continuity in stimulus , says Jeff Chowdhry, Head of Emerging Market Equities, F&C Investments. At some point of time the Fed will have to start reducing QE and interest rates will have to go up, the current volatility is suggesting that global markets are trying to digest that inevitability, he said in an interview to CNBC-TV18.

Given this uncertainty and nervousness, one should be cautious while investing in equities as the markets are likely to remain choppy, he cautions.

02:30pm Indian equities are hovering around their previous closing values, after a recovery seen from day's low. BSE Sensex is up 18.16 points at 19344.03, and the Nifty is flat at 5850.05.

Among midcaps, Zydus Wellness , Linde India , BGR Energy and Educomp Solutions rallied 5-6 percent.

Voith Paper Fab, Deepak Nitrite and Zandu Realty , Kilitch Drugs and Arihant Capital surged 20 percent each.

Unichem Labs gained 1.5 percent amid high volumes, after the Foreign Investment Promotion Board has approved Mylan's FDI plan. Mylan had proposed to acquire Unichem's manufacturing business.

Tata Power  soared 1.6 percent as brokerage house CLSA upgraded the stock to buy and set a target price at Rs 105 a piece.

JSW Energy rose 0.8 percent, after CLSA upgraded the stock to an outperformer with a target price at Rs 59 a piece.

02:25pm Promoter released 1.11 crore pledged shares of Nitesh Estates, which pushed the stock 7.4 percent higher amid large volumes.

VA Tech Wabag shares jumped 4 percent amid hefty volumes, as its joint venture received order worth Rs 262 crore from Nepal.

02:20pm Metals shares are on buyers' radar. Tata Steel surged 3.56 percent while Hindalco , Jindal Steel and Sterlite Industries gained around one percent.

Infosys extended its upmove to 1.5 percent and Tata Power soared nearly 2 percent.

Commercial vehicle maker Tata Motors trimmed losses to 0.6 percent from 1.9 percent.

02:10pm Equity benchmarks rebounded and broader markets extended gains in afternoon trade, after a recovery seen in European markets and Indian rupee.

BSE Sensex is up 24.03 points at 19349.90, and the Nifty is up 2.35 points at 5852.40 while BSE Midcap and Smallcap indices gained 0.5 percent each.

Indian rupee fell 58 paise to 58.45 per dollar, but recovered from day's low of 58.59 per dollar.

European markets too recovered; Britain's FTSE rose 25 points and France's CAC turned flat after recouping early losses.

1:53 pm Market Update: The Sensex is down 3.98 points at 19321.89, and the Nifty slips 9.25 points to be at 5840.80. Tata Steel is up 2.3 percent while Tata Power is up 1.5 percent on the BSE.

1:45 pm Expert views: Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services expects market to remain narrow and earnings growth to be in the range of 7-9% in FY14. First quarter earnings of FY14 is expected to be dull with only few companies reporting good numbers, he said.

Furthermore he expects gold demand to rise again.

1:40 pm Market outlook: Battered Indian stocks will bounce back in the second half of 2013, according to a Reuters poll of leading equity strategists who cited hopes of economic recovery and further fiscal reforms.

Despite share prices taking a beating in recent weeks, the median of 22 strategists polled from June 11-17 predicted the benchmark BSE Sensex would gain almost 9 percent from Monday's close of 19,325.87 points, reaching 21,000 by the end of the year.

1:35 pm Commodity update: Gold futures are seen falling this week due to lower domestic demand with investors awaiting the outcome of a US Federal Reserve meeting for directions, reports Reuters.

Investors are closely watching the Fed's two-day policy-setting meeting that begins later on Tuesday as a string of healthy US data has increased speculations the bank could scale back its bond-buying programme, hurting gold's appeal as a hedge against inflation.

1:30 pm Market update: The Sensex is down 31.28 points at 19294.59, and the Nifty slips 16.35 points to be at 5833.70. Tata Steel, Infosys , Tata Power, Hindalco and Bajaj Auto are top gainers in the Sensex.

1:20 pm Brokerage report: JP Morgan downgrades Maruti Suzuki to "underweight" from "neutral" and cut its target price to Rs 1,510 from Rs 1,750, citing muted passenger car demand in India and increasing competition in higher value segments, reports Reuters.

"We believe the current FY12-14E downturn in the Indian automobile industry is similar to the '01-02-03 slowdown, when passenger car sales growth was weak for three years (vs trend growth of 12-14 percent)," JP Morgan said in a report on Monday.

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The cuts increase in afternoon trade as the Nifty is drifting lower towards the 5800 mark pulled down by cement and rate sensitives. The Sensex is down 75.14 points at 19250.73, and the Nifty down 27.80 points at 5822.25.  About 944 shares have advanced, 913 shares declined, and 264 shares are unchanged.

Rupee is falling further and is currently at 58.50 per dollar. Its is going in sync with other Asian currencies following the rise in US bond yields ahead of position adjustments before the FOMC reveals its mind on roll back of quantitative easing tomorrow.

12:55pm Persistent Systems shares gained one percent amid hefty volumes, as 2.2 lakh equity shares changed hands at Rs 508 a piece on exchanges via two block deals.

BSE Sensex is down 85.70 points at 19240.17, and the Nifty is down 32.90 points at 5817.15. Even the market breadth turned flat; about 937 shares have advanced while 915 shares declined.

12:50pm Ipca Labs rose 2.5 percent now, and touched a new 52-week high of Rs 691 today. 1.48 lakh equity shares changed hands at Rs 685 a piece on the National Stock Exchange.

Madras Cements gained 1.5 percent amid large volumes as 6.75 lakh shares changed hands at Rs 238 a piece on the NSE in late morning trade.

Mahindra & Mahindra Financial Services hit a new 52-week high of Rs 271.90, which gained 2.16 percent now. Nearly 2.83 lakh shares changed hands at Rs 268.50 a piece on the NSE.

12:40pm Expert talks on market

Tushar Mahajan, head of listed futures & options at Nomura India sees Nifty touching 6,000 in June despite the market not performing too well in the first two weeks of the series.

All eyes are now on outcome of the two-day Federal Open Market Committee (FOMC) meeting. Foreign institutional investors have been building shorts ahead of this event. If Fed delivers then one can expect a short covering bounce, he said.

12:30pm BSE Sensex slipped more than 70 points to 19255.95 on weak European cues and further depreciation in rupee. The Nifty is down 25.55 points or 0.44 percent at 5824.50.

Indian rupee depreciated by 70 paise to 58.57 per dollar. It had touched a record low of 58.98 per dollar.

On the global front, France's CAC, Germany's DAX and Britain's FTSE declined 0.3-0.8 percent in early trade. Federal Reserve's policy meeting will be closely watched today.

12:25pm Reliance Communications shares soared more than 4 percent, after the telecom regulator, TRAI reduced ceilings for national roaming calls on Monday. Analysts say the financial impact is largely immaterial, but the step removes regulatory risk - the overhang of full free roaming.

Gurdeep Singh, President & CEO - Wireless Business of Reliance Communications says he welcomes first step towards reduction in roaming charges.

He expects telecom regulator will accelerate shift to free roaming by October, adding that will help grow company's overal revenue.

12:20pm S Kumars Nationwide dropped over 3 percent on reports that loans taken by S Kumars and Reid & Taylor are marked as non-performing asset by Indian Overseas Bank, cogencis said quoting sources.

Also Read - Bullish on India, will buy if market falls: Morgan Stanley

12:10pm BSE Sensex continues to trade flat amid selling pressure in afternoon trade, but the broader markets outperformed benchmarks.

The Sensex is down 32.95 points at 19292.92, and the Nifty is down 14.60 points at 5835.45.

Advancing shares outnumbered declining ones by 939 to 776 on the Bombay Stock Exchange that drove BSE Midcap and Smallcap Indices 0.4 percent higher.

Ranbaxy Labs remains top loser among largecaps on Nifty 50, losing nearly 4 percent followed by UltraTech Cement with 2.5 percent losses.

11:55 am Alert: BHEL receives order worth Rs 450 crore. The stock is currently at Rs 183.75, up Rs 1.40, or 0.77 percent on the BSE.

11:50 am Rupee burden: Burgeoning under-recoveries or loss on sale of petroleum products has become a bigger worry for upstream companies than oil marketers. In FY13 oil explorers including GAIL , Oil India and ONGC together shared subsidy burden of Rs 60,000 crore.

Independent analysts SP Tulsian has recently told CNBC-TV18 that upstream companies may have to shell out a larger portion in FY14 as under-recoveries will be higher on constantly weakening rupee.

11:40 am Expert views: Jitendra Sriram, MD & Head of Research, HSBC India said that vulnerable rupee was impacting returns in dollar terms for Indian market . "When we homogenise the currency and look at it across all markets, India does not shape up too well given the persistent problems on the twin deficits, the fiscal and the current account. So from that perspective, India in relative context within Asia is underweight for us," he explained in an interview to CNBC-TV18. HSBC India has downgraded India to underweight from neutral.

Indian market is sure to focus on the outlook painted by Federal Reserve regarding the beginning of QE tapering process. We are likely to see some tapering in bond purchasing going forward, said Sriram .

Although valuation for some of the small and midcap names look attractive, they are not going to rally in a hurry because they may find it difficult to attract capital going forward, feels Sriram.

11:35 am Buzzing: Venus Remedies is up 3.8 percent on receiving a Mexico patent for its antibiotic Potentox. Potentox Is an antibiotic drug used to cure pneumonia. The global bacterial infections market was estimated to be worth US USD 9 billion in 2010.

11:30 am Losers: Tata Motors , ICICI Bank , Cipla , Hindalco and HDFC Bank are top losers in the Sensex.

11:27 am Brokerage view on telecom outlook: TRAI has come out with final notification on the national roaming issue, with the rules having little impact on operators (vs negative impact feared). For the first time in a long while the regulator has taken a pro-industry stance. Credit Suisse says news will be seen positively by the market and it reiterates positive stance with outperform on Bharti and Idea stocks.

UBS says TRAI's order is positive as it removes uncertainty regarding the imposition of free national roaming, a thought which gained prominence post government's policy statement on 'One nation free roaming' in NTP 2012. UBS believe the reduction in ceilings will have minimal impact on operators' financials as current prevailing tariffs in the market are largely inline with updated ceilings.

11:20 am Macro outlook: The March quarter earnings did not see much change over the performances of previous quarters, and since overall situation appears grim, Bank of America Merrill Lynch (BoAML) pegs FY14 earnings growth at 8 percent .

Speaking to CNBC-TV18, Jyotivardhan Jaipuria of BoAML said India is slightly better placed than other emerging market economies although it is a fact that a recovery in the economy is going to be sluggish and capex will get increasingly scarce. Until elections are over, one should not expect major spurt in capex cycle, he said. At the moment, BoAML is overweight on rate sensitives and defensives like autos, banks, telecom and pharma.

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The market is extremely volatile with the Nifty still below 5850-level. The Nifty is down 17.10 points to be at 5832.95 while the Sensex slips 42.62 points to19283.25.

Banking, Auto and FMCG are growing weak, while most of the other indices are in green. Hero Motocorp , Infosys , Jindal Steel , Tata Steel and Tata Power are key gainers in the Sensex.

Asian stocks are mostly lower in cautious trade, as investors await greater clarity on US monetary policy. Crude market  is rallying ahead of Fed meet. WTI Crude hits 9-month high of USD 99, closes at USD 98. Gold has changed little at USD 1385 an ounce.

It is a stable session for currencies, dollar index changed at 80.7, euro firm at USD 1.336 and yen hovers around 94.80/dollar.

Indian government bonds are little changed in trade. The market was settling very light before the policy but after the buying yesterday dealers are wary of adding positions especially ahead of the FOMC meeting later today.

10:59am Equity benchmarks recouped half of early losses, helped by Reliance Industries that gained 0.7 percent. Even State Bank of India turned positive with 0.3 percent gains while its rivals ICICI Bank and HDFC Bank trimmed losses.

BSE Sensex is down 20.66 points at 19305.21, and the Nifty is down 9.70 points at 5840.35.

Tata Motors shares too cut losses from 1.9 percent to 1.4 percent. Even healthcare firms Sun Pharma and Dr Reddys Labs recovered from day's low.

About 858 shares have advanced while 618 shares declined on the Bombay Stock Exchange.

10:55am Jagran Prakashan lost one percent amid large volumes; 10 lakh equity shares changed hands at Rs 92 a piece via block deal on the National Stock Exchange.

HT Media rose over 2 percent as 5 lakh equity shares changed hands at Rs 98 a piece on the Bombay Stock Exchange.

Info Edge India shares are flat amid hefty volumes; more than 2.14 lakh shares changed hands at Rs 312 a piece on the National Stock Exchange.

3M India is up 0.6 percent and its trading volumes surged over 48 times compared to 5-day average. 25,000 equity shares changed hands at Rs 3,550 a piece on the NSE.

10:45am Promoter Reliance Infrastructure sold 4.5 lakh shares of Reliance Power in open market.

Mahindra Ugine shares are locked at 10 percent upper circuit again today, hitting a new 52-week high of Rs 78.85 after the Mahindra Group's auto component business deal with Spain's CIE Automotive SA .

10:40am Markus Rosgen of Citi finds valuations of emerging market equities quite attractive now. However, he remains underweight on India .

In an interview to CNBC-TV18 he explained, given the twin deficit issue, India is unlikely to outperform its peers. Also, the Indian rupee is likely to remain volatile for some more time. From, a valuation and earnings growth perspective, it is not well placed than other EMs.

Indian rupee lost 55 paise to 58.42 per dollar, continuing depreciation for the second consecutive day today.

10:30am Indian equity benchmarks remain under pressure due to weakness in major Asian markets. Hang Seng, Nikkei and Shanghai Composite slip between 0.2 percent and 0.6 percent.

BSE Sensex is down 73.19 points at 19252.68, and the Nifty is down 25.85 points at 5824.20, but the broader markets outperformed benchmarks.

BSE Midcap and Smallcap indices gained 0.2-0.3 percent. Advancing shares outpaced declining ones by 729 to 595 on the Bombay Stock Exchange.

Orchid Chemicals shares gained another 7 percent on top of previous day's 10 percent gains, after the US FDA gave clean chit to company's Chennai facility.

Panacea Biotec surged another 5.6 percent after yesterday's 20 percent rally.

Among midcaps, Zydus Wellness , BGR Energy, Educomp Solutions ,
Hexaware Tech and HT Media jumped 3-6 percent.

10:20am Country's largest private sector lender ICICI Bank and housing finance company HDFC lost more than one percent while commercial vehicle maker Tata Motors topped the selling list, losing 1.9 percent.

Ranbaxy Labs shares crashed nearly 4 percent. The supreme court will hear  a public interest litigation on June 24 seeking directions to cancel the manufacturing licence issued to Ranbaxy and prosecute its directors for allegedly selling adulterated medicines.

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Infosys , Bharti Airtel , Bajaj Auto , Tata Steel and Hero Motocorp outperformed, rising 0.5-0.9 percent.

10:15am Venus Remedies surged more than 6 percent on receiving a Mexico patent for its antibiotic Potentox. Potentox is an antibiotic drug used to cure pneumonia, The global bacterial infections market was estimated to be worth USD 9 billion in 2010.

Jet Airways gained nearly one percent on media reports that Etihad Airways may be set to get clearance from SEBI for the purchase of a 24 percent stake in Jet Airways without making an open offer.

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10:05am Equity benchmarks continue to trade lower, weighed down by financials, oil & gas, capital goods, auto (4-wheeler) and healthcare stocks.

BSE Sensex is down 77.52 points at 19248.35, and the Nifty is down 28.25 points at 5821.80. About 675 shares have advanced while 515 shares declined on the Bombay Stock Exchange.

Indian rupee depreciated further, losing more than 50 paise to 58.40 per dollar.

"The rupee remains a big concern and will continue to be a headwind, going forward. Although the currency crisis is an emerging market phenomenon, the current account deficit makes our situation worse,"Jyotivardhan Jaipuria of BoAML said.

9:55 am Brokerage views: CLSA upgrades Tata Power to buy with a target price of Rs 105 per share.

9:50 am Macro outlook: Brokerage house Kotak Securities feels the Reserve Bank of India is unlikely to cut interest rates at its July 30 policy review meet.

In the June policy announced Monday, RBI kept key rates unchanged and said that 'only a durable receding of inflation' would prompt it to cut interest rates. Kotak Securities is of the view that a meaningful decline in inflation is unlikely near term.

9:45 am Buzzing: Bharti Airtel shares gained more than one percent on a media report that the company is hiving off its data centres into a standalone business.

Reports also suggest that the company is also planning to induct a partner into the freshly carved out unit.

"The Bharti Airtel board has approved the process of making data centres, currently a part of its enterprise services, an independent 100 percent subsidiary. India's largest telecom company by subscriber base and revenue share will appoint a new CEO to scale up its data centre operations, currently present in 7-8 cities," The Times of India said, quoting sources.

9:42 am Market update: The Sensex is down 52.55 points at 19273.32, and the Nifty slips 22.65 points to be at 5827.40. About 582 shares have advanced, 438 shares declined, and 74 shares are unchanged.

9:40 am FII view: Brokerage house Morgan Stanley says the leading indicators for equity returns are in good shape, and that it would be a buyer in the event of a market fall.

According to Morgan Stanley, the three key concerns on Indian equities have been high FII ownership and positions especially in the context of any risk off, the market's complacency about tail risks; and adverse political developments.

The brokerage says that FII ownership and positions have reduced after the sell-off  on concerns over the Fed stimulus being scaled down.

"Both may have a bit more to fall before one can say that their overhang has completely gone away," said Morgan Stanley strategists Ridham Desai, Sheela Rathi, and Utkarsh Khandelwal in their note clients.

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9:22 am Midcap movers: Polaris , Hexaware, Idea, Reliance Comm , Orchid Chemicals, Educomp and Apollo Tyres are gainers among the midcap stocks

9:20 am Gainers: Bharti Airtel (up 1.54 percent), M&M, Infosys , Wipro and L&T are among the key gainers in Sensex.

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After making some smart moves on Monday, the market makes a quiet opening today. The Sensex is up 8.20 points at 19334.07, and the Nifty  is down 8.15 points to be at 5841.90. About 156 shares have advanced, 104 shares declined, and 32 shares are unchanged.

Share buybacks are set to get tougher -- Sebi board is likely to consider stricter buyback rules, learns CNBC-TV18.  It may include halving the buyback period to six months, keeping a portion of the funds in escrow, and a one-year cooling-off period between buybacks.

The rupee opened lower by 39 paise at 58.25 per dollar versus 57.86 yesterday. The euro stayed above 1.33 to the dollar. The dollar index was sub 81 mark. However, the yen slipped slightly against the dollar.

On the global front, US markets recovered from their lows to close higher on Monday following positive economic data and as investors await clarity on Fed's bond purchase programme. European markets also ended higher.

The Fed is also expected to provide an update on its economic projections for 2013-2015. The Fed's latest projections, made in March this year, saw real GDP growth at around 2.6 percent in 2013 and 3.2 percent in 2014. In terms of unemployment, the Fed projected a rate of around 7.4 percent in 2013, improving to around 6.9 percent in 2014.

In key data to watch out for in US, consumer price index is seen rising to 0.2 percent in May. Housing starts are seen at 0.955 million units.

Brent crude price stood around USD 105 a barrel after touching a 10-week high close to USD 107 a barrel. From precious metals space, gold price remained largely unchanged at USD 1384 an ounce.