FMCG & auto stocks gain; Sensex, Nifty end flat
06 Feb 2014
03:40 pm Market closing
The market ended slightly higher. The Sensex closed up 49.71 points at 20310.74, and the Nifty ended at 6036.30, up 13.90 points. About 1247 shares advanced, 1279 shares declined, and 169 shares were unchanged.
03:30 pm Market outlook
Bhuvnesh Singh, MD & Head of India Research, Barclays sees the Nifty trading around 6,500 over the next 12 months. In an interview to CNBC-TV18, he said that investors should expect sub 10 percent returns from the Nifty over next one year. Continuing his bullish tone, he said foreign inflows are likely to be positive for India in 2014 and investor sentiment for Indian equities should continue to remain bullish.
Sharing views on India Inc's performance, he expects earnings to grow by 15 percent in FY15. However, downgrades are likely to continue in most sectors barring IT. Singh is not very optimistic about midcap IT player Tech Mahindra in the long-term given its huge exposure to the telecom sector. From the pharma space, Lupin remains his top pick. Meanwhile, he remains underweight on financials.
3:20 pm Result
Private sector lender City Union Bank's third quarter (October-December) net profit increased 4.5 percent year-on-year to Rs 89 crore due to lower provisions and higher net interest income, but asset quality weakened.
Net interest income jumped 21 percent to Rs 197.5 crore from Rs 163.4 crore during the same period while other income or non-interest income declined to Rs 64.76 crore from Rs 65.89 crore.
Gross non-performing assets (NPAs) climbed to 1.70 percent as against 1.66 percent in September quarter and 1.23 percent in a year-ago period. Net NPAs rose to 0.89 percent as against Rs 0.83 percent quarter-on-quarter and 0.63 percent year-on-year.
03:10 pm Pharma update
Global pharmaceutical firms are pressuring the United States to act against India to stop more local companies producing up to a dozen new varieties of cheap generic drugs still on-patent, sources with direct knowledge of the matter said.
An Indian government committee is reviewing patented drugs of foreign firms to see if so-called compulsory licences, which in effect break exclusivity rights, can be issued for some of them to bring down costs, two senior government officials told Reuters.
The drugs that are part of the review process are used for treating cancer, diabetes, hepatitis and HIV, said the sources, declining to give details. No timeline has been given for completion of the review process.
Emerging markets, from South Africa to China and India, are battling to bring down healthcare costs and boost access to drugs to treat diseases such as cancer, HIV/AIDS and hepatitis.
02:59pm Persistent talks to CNBC-TV18
Persistent Systems enters into a definitive agreement to acquire privately-held CloudSquads , an innovative consultancy that has created social communities for over 70 global companies. Speaking to CNBC-TV18's Ekta Batra and Anuj Singhal, Mritunjay Singh, COO of Persistent Systems says it is a very small, but niche acquisition as the company is heavily going into its social collaboration space as a corporate strategy.
Singh says the funding will primarily be done through internal accruals and is therefore, completely a cash deal which is upfront payment and is very niche. ''It not just builds communities outside, it also has an IP which will connect these communities to the company's internal system,'' he adds.
02:52pm The market continued to be rangebound in last hour of trade today as FMCG, auto and power stocks gained ground while banks, technology and capital goods are under pressure.
The Sensex rose 41.94 points to 20,302.97 and the Nifty added 10.05 points to 6,032.45. About 1167 shares have advanced, 1238 shares declined, and 165 shares are unchanged.
Auto stocks like Maruti Suzuki and Mahindra & Mahindra rose over 2 percent while FMCG majors ITC and Hindustan Unilever gained 1 percent and 2.6 percent, respectively.
Coal India and Tata Power maintained top position in the buying list, rising 3-4 percent.
Private sector lender HDFC Bank climbed 1.7 percent while its rival ICICI Bank , State Bank of India and Axis Bank slip around a percent.
State-run BHEL fell 2.5 percent on concerns over slow order book. The management in a conference call said the execution continued to remain slow for number of company's orders.
Larsen & Toubro, TCS , HDFC, Infosys , GAIL , ONGC and Sun Pharma too are under pressure.
1:50 pm Big deal: The governmentis only likely to complete a USD 15 billion deal with France's Dassault Aviation to buy 126 fighter jets in the next fiscal year, its defence minister said, reports Reuters.
"Major procurement can only be possible in the next financial year," AK Antony said at a defence sector trade fair.
As of February 1, Antony said, the country has already spent 92 percent of its defence capital budget for the current fiscal year that ends in March.
Dassault Aviation's chief executive Eric Trappier said in December that he was optimistic about finalising the fighter jet deal within a few months, though he was unsure whether it would be sealed before or after the national elections in India, which must completed by May.
1:40 pm Nod: Fair trade regulator CCI has cleared Essar Steel's proposed sale of a gas plant in Gujarat to Inox Air Products, saying the deal does not raise adverse competition concerns in the country. As per the deal, Ruias-promoted Essar Steel will transfer its gas plant located at Hazira, Gujarat to Inox on a slump sale basis.
In an order dated January 30, the Competition Commission of India (CCI) said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India". The Commission noted that in terms of a agreement between Essar Steel and Inox, a guaranteed quantity of the industrial gases produced at the Hazira gas plant Essar Steel "on job work and long term basis, would be provided to Essar Steel, by Inox AP, post combination".
1:30 pm Analysis: Amol Rao, research analyst, Anand Rathi believes BHEL 's challenging receivables, that stand at Rs 20,000- 25,000 crore will have a deep impact on its valuations.
''Although this does not pose too much of a problem for the company's financial stability or existence, it is a problem nevertheless which manifests itself in terms of valuations. So, FY14 is going to be very soft in terms of revenues and cash flows,'' explains Rao who expects the company to revive in FY15.
Slow execution of projects, Rao adds, too will take a toll on the company's cash flows.
1:20 pm Results: Public sector lender Bank of Baroda beat street expectations with the third quarter (October-December) net profit rising 3.6 percent to Rs 1,047.84 crore compared to same quarter last year due to lower provisions and higher other income, but that was squeezed by deferred tax liability. However, pressure continued on its asset quality.
According to CNBC-TV18 poll, analysts had expected profit after tax at Rs 967 crore (down 4 percent) and net interest income at Rs 3,004.6 crore (6 percent growth) for the quarter.
Net interest income too came in higher-than-expected at Rs 3,057 crore, a growth of 7.6 percent compared to corresponding quarter of previous year.
The Indian market is succumbing to selling pressure dragged down by capital goods and realty. The Sensex is down 78.11 points at 20182.92, and the Nifty is down 25.30 points at 5997.10. About 1023 shares have advanced, 1245 shares declined, and 157 shares are unchanged.
Coal India , Tata Power , HUL , Hindalco and Wipro are the top gainers in the Sensex. Among the losers are BHEL, ICICI Bank , Axis Bank , GAIL and HDFC .
Brent crude held steady above USD 106 a barrel as worries over global economic growth dented the demand outlook, with its premium to US crude continuing to narrow as more cold weather hit the United States, reports Reuters.
The oil market has mostly escaped the recent selloff in risky assets, which was sparked by emerging markets turmoil and a mixed picture on global economic growth.
"Commodities have largely been unaffected by the emerging market turmoil so far. Industrial metals are likely to be most affected, while the energy market is getting support from the fact that the global economy presumably is back on the right track," said Mark Keenan, head of commodities research in Asia at Societe Generale.
Brent crude was trading 2 cents higher at $106.27 per barrel at 0658 GMT, having settled up 47 cents the session before.
U.S. crude rose 14 cents to $97.64 a barrel, after closing up 19 cents. The benchmark was supported as severe snow and ice storms in the Northeastern states boosted demand for heating fuels.
12:59pm City Union Bank gains over a percent post Q3 earnings
City Union Bank's third quarter (October-December) net profit increased to Rs 89 crore from Rs 85.2 crore due to lower provisions, but asset quality weakened.
Net interest income jumped to Rs 197.5 crore from Rs 163.4 crore during the same period.
Gross non-performing assets (NPAs) climbed to 1.70 percent versus 1.66 percent and net NPAs rose to 0.89 percent versus Rs 0.83 percent on sequential basis.
12:50pm Kolte-Patil talks to CNBC-TV18 after buying land Pune
Kolte-Patil is all gung-ho about its latest venture in the Pune realty space. Speaking to CNBC-TV18, chief executive officer, Sujay Kalele, says the company is only awaiting the environmental clearance before launching its project on the newly acquired 34 acres land in Wakad, Pune.
In an interview to CNBC-TV18, Kalele says the project to develop 2.3 million square feet has a revenue potential of Rs 1600 crore.
The project that cost the company Rs 350 crore has been accrued by taking a loan of Rs 60 crore. However, all of it has been factored in the earlier quarters and hence, there is no incremental loan for the company, explains Kalele.
The project will be launched in H1FY15 and its revenues will be recognised once it hits the threshold of 25 percent, adds Kalele.
As the project is mix of retail and commercial plans in a very prime loaction, the average realisation, Kalele expects will be higher than the current rates, thereby pushing margins.
12:40pm Experts raise concern on BHEL post Q3 earnings
Sanjeev Zarbade, capital goods analyst, Kotak Securities believes it will be difficult to see a turnaround in BHEL without revival in utility.
He expects BHEL margins to bottom out around 11-12 percent going ahead. According to him, management indicated that BHEL is favourably placed for orders worth 3.2 GW.
12:30pm Market Expert
Bhuvnesh Singh, MD & Head of India Research, Barclays sees the Nifty trading around 6,500 over the next 12 months. In an interview to CNBC-TV18, he said that investors should expect sub 10 percent returns from the Nifty over next one year.
Continuing his bullish tone, he said foreign inflows are likely to be positive for India in 2014 and investor sentiment for Indian equities should continue to remain bullish. Overseas investors made nearly net inflow of over Rs 1.13 lakh crore in the Indian equity market in 2013, even as they turned net sellers in the debt securities.
Sharing views on India Inc's performance, he expects earnings to grow by 15 percent in FY15. However, downgrades are likely to continue in most sectors barring IT. Singh is not very optimistic about midcap IT player Tech Mahindra in the long-term given its huge exposure to the telecom sector. From the pharma space, Lupin remains his top pick. Meanwhile, he remains underweight on financials.
12:20pm Aban hits 52-week high ahead of Q3 earnings
Analysts expect consolidated net profit of Aban Offshore to grow 190 percent year-on-year at Rs 93 crore due to lower interest cost and lower tax rates.
Net sales may increase 13 percent to Rs 1,030 crore from Rs 909 crore during the same period as majority of the assets remain deployed in the quarter.
The stock rose 1.6 percent to Rs 531.20 after hitting a 52-week high of Rs 549.
12:10pm Equity benchmarks remain under pressure in noon trade with the Nifty struggling at 6000 level weighed down by banks, capital goods and technology stocks.
The Sensex fell 86.63 points to 20,174.40, and the Nifty declined 28.75 points to 5,993.65. Even the broader markets too lost ground.
Aban Offshore and Aurobindo Pharma are among the most active shares on exchanges ahead of December quarter earnings today. Jet Airways topped the most active list after Etihad received aproval from CCI to buy 50.1 percent stake in Jet Privilege; the stock surged 10 percent.
Bank of Baroda too joined the most active list after reporting better-than-expected profit and net interest income during October-December quarter earnings.
Just Dial, Hindalco Industries , ICICI Bank , SBI and Tata Steel are other most active stocks.
Shares of ICICI Bank, TCS , HDFC , Larsen & Toubro and Bajaj Auto declined over a percent while Infosys , ONGC , Tata Motors and State Bank of India fell over 0.5 percent.
BHEL lost 3 percent on order book concerns. The management said that nearly 24 percent of the order backlog is now "non-moving".
However, Coal India and Tata Power bucked the trend, rising more than 3 percent followed by HUL with a 2 percent upmove.
11:50 am Result poll: Ambuja Cements and ACC will announce fourth quarter (October-December) earnings today. According to CNBC-TV18 poll, analysts expect Ambuja's profit after tax to decline 8 percent year-on-year to Rs 195 crore and revenue may slip 5 percent to Rs 2,190 crore.
Meanwhile, ACC amy consider consolidated numbers due to the merger of RMC subsidiary. ACC consolidated the loss-making RMC business in Q4CY12.
11:40 am Udayan's outlook: The key local cue investors, would be closely watching out for, is general elections scheduled in May. Chances of a pre-election rally is still quite high, CNBC-TV18's Udayan Mukherjee said . ''There are talks of all other parties coming together to do a third front conglomeration, but the market will stick to its basic view that its favourite party, which we all know who it is will come to power, so we well see a little bit of a pre-result rally,'' he added. However, it is difficult to predict market's movement post election; it would depend on election result.
If the market forms a range of 5,950-6,300 in the next few weeks then midcaps and interesting largecaps will be the place to be in, he said. But if the market starts correcting after this pullback rally and violates 5,950 then the call for a bigger downtrend would get more pronounced and then midcaps will probably start to underperform again, he cautioned.
11:30 am Result: Public sector lender Bank of Baroda beat street expectations with the third quarter (October-December) net profit rising 3.6 percent to Rs 1,047.84 crore compared to same quarter last year on account of lower provisions and higher other income, but that was squeezed by deferred tax liability. However, the pressure continued on its asset quality.
Gross non-performing assets (NPA) expanded 91 basis points (17 bps sequentially) to 3.32 percent and net NPAs rose 76 bps (4 bps) to 1.88 percent compared to a year ago period. In absolute term, gross NPAs jumped 63 percent year-on-year (9.5 percent quarter-on-quarter) to Rs 11,925.76 crore and net NPAs doubled (up 5 percent on sequential basis) to Rs 6,623.60 crore in the quarter gone by.
The market is under pressure as the Nifty skid below 6000. The Sensex is down 93.20 points at 20167.83, and the Nifty down is 30.25 points at 5992.15. About 1004 shares have advanced, 931 shares declined, and 117 shares are unchanged.
Tata Power , Coal India are up 3 percent each. HUL , Tata Steel and Wipro are other big gainers in the Sensex. Among the laggards are BHEL , TCS , ICICI Bank , HDFC and L&T.
The rupee is trading slightly higher tracking the firmness in the euro and Asian currencies. Indian bonds rise as the RBI says it switched gilts worth Rs 27,000 crore last week and on news of the government cancelling the Rs 15,000 crore tender deferred earlier.
The euro is trading slightly higher against the dollar but is mostly near its 11-week lows. Most Asian currencies such as the Korean won, Malaysian ringgit and Taiwanese dollar are rising against the dollar today.
Nymex is firm at USD 97/bbl and Brent is at USD 106/bbl.
Asian equities rebound on stronger regional earnings and bargain hunting but caution prevails ahead of key risk events.
10:59am Cognizant talks to CNBC-TV18
Cognizant India is on target with its fourth quarter profit rising 16 percent and revenues were also up 2.5 percent.
But what caught the eyes of investors is the company's growth guidance, which has been pegged at 16.5 percent for this fiscal. Ramakrishnan Chandrasekaran, Executive VC, Cognizant India says there are a number of factors both internal and external driving this bullish growth guidance. ''If I look at the external factors, this is actually a once in a decade sort of technology shift that creates lot of opportunities that we are experiencing,'' he says.
Internally, he says the company has been making investments ahead of the curve. Going ahead, he does not see any significant change in demand and neither does he see any significant shift in pricing.
10:54am Bank of Baroda to announce earnings today
Brokerage house Motilal Oswal expects Bank of Baroda (BoB) to report a 16.4 percent degrowth quarter-on-quarter (down 3.5 percent Y-o-Y) in net profit at Rs 976.2 crore.
Net interest income of the bank is expected to increase by 4.1 percent Q-o-Q (up 6.1 percent Y-o-Y) to Rs 3013.6 crore.
Loan and deposit each is expected to grow 5 percent Q-o-Q. However, on a Y-o-Y basis, deposit growth is expected to be higher at 23 percent, compared to 19 percent YoY loan growth, the brokerage house said.
Net interest margin is expected to be stable Q-o-Q at 2.2 percent. Fee income growth picked up in 2QFY14 and Motilal Oswal expects the trend to remain healthy.
10:44am Market Update
The market is not getting any relief as it caught into bear grip. The Sensex slipped 145.45 points to 20,115.58, and the Nifty declined 46.20 points to 5,976.20. About 897 shares have advanced, 779 shares declined, and 102 shares are unchanged.
BSE Bankex lost a percent as country's largest lenders State Bank of India , ICICI Bank and HDFC Bank too fell over a percent.
Housing finance company HDFC tumbled 1.4 percent while TCS and Tata Motors extended fall, down over 1.5 percent.
10:34am Jet Airways flies 11%
Shares of Jet Airways soars 11 percent intraday as Abu Dhabi-based Etihad Airways got Competition Commission's approval for purchase of 50.1 percent stake in Jet Privilege Private Ltd (JPPL), a customer loyalty programme unit of Jet Airways.
Clearing the transaction by majority, CCI said that the deal was unlikely to have any adverse impact on market competition, as Etihad's purchase of 24 percent stake in Naresh Goyal-led Jet Airways has already been approved and the two carriers were already partners in their respective frequent flyer programmes.
10:24am Market Expert
Ambareesh Baliga, Edelweiss Financial Services is positive on the market. According to him, there was a scare in the last couple of days which was shorting opportunity for traders, but for investors it was definitely a buying opportunity especially those who missed out in the last couple of months due to negative cues.
Baliga suggests referring to positive cues like Purchasing Managers' Index (PMI) data which is futuristic and shows positive sentiment going ahead. He does not see much of a downside from the current levels.
''I am not saying that 5,900-5,925 may not be touched; it is possible in case there are any negative news flows but I do not see very much below that. Therefore, any sort of correction should be utilised to buy,'' he says in an interview to CNBC-TV18.
10:14am Losers
BHEL remained under pressure, falling 3 percent on order book concerns. The management in a conference call said the execution continued to remain slow for number of companies' orders and nearly 24% of the order backlog is now "non-moving". So the sentiment effect is also seeing in Larsen and Toubro that fell 0.7 percent.
Shares of Infosys and TCS dropped 0.8 percent each. Auto stocks like Tata Motors, NTPC and Bajaj Auto declined on profit booking.
10:04am The market continued its consolidation due to lack of trigger. Traders are also cautious as foreign institutional investors (FIIs) have consistently been selling in Indian market. FIIs have net sold around Rs 1,800 crore worth of shares this week, in addition to more than Rs 3,000 crore worth of selling in last week.
The Sensex rose 64.07 points to 20,325.10, and the Nifty gained 17.90 points to 6,040.30 while the broader markets continued to outperform benchmarks. BSE Midcap and Smallcap indices climbed 0.8 percent each.
Shares of Hindustan Unilever and Tata Steel rallied 2 percent each on value buying. Wipro , Axis Bank and Tata Power rose over 1 percent.
Bharti Airtel too gained more than a percent as the company announced new structure across Asian and African businesses.
Top telecom operator said all operating countries will be clustered into four strategic business units (SBUs) and leaders of all SBUs will report to MD and CEO-Africa w.e.f April 1.
9:50 am Buzzing: Shares of Jet Airways soars 11 percent intraday on Thursday as Abu Dhabi-based Etihad Airways today got Competition Commission's approval for purchase of 50.1 per cent stake in Jet Privilege Private Ltd (JPPL), a customer loyalty programme unit of Jet Airways.
Clearing the transaction by majority, CCI said that the deal was unlikely to have any adverse impact on market competition, as Etihad's purchase of 24 per cent stake in Naresh Goyal-led Jet Airways has already been approved and the two carriers were already partners in their respective frequent flyer programmes.
9:40 am Results Poll: In key earnings today, ACC and Ambuja will report their December quarter numbers. According to a CNBC-TV18 poll, ACC may see a 28 percent drop in profits owing to weak demand. The cement major's margins too are seen lower at 10.9 percent
Ambuja Cements too may see a weak quarter with 8 percent degrowth in bottomline. The company's realisation is expected to decline 3 percent.
9:30 am FII view: Neelkanth Mishra of Credit Suisse feels the wage-price spiral in more labour-intensive animal products and fruits/vegetables is the root cause of sticky food inflation. "But this is unlikely to be broken soon. Hence, we are underweight on rate-sensitive sectors. We recommend selling L&T, SBI and Tata Steel ," he adds.
Michael Kurtz of Nomura feels the broad sell-off in emerging markets (EM) stocks has begun to open technical buying opportunities in Asia's better-positioned, structurally more sound equity markets. He continues to like Korea, Taiwan and Indian stocks best for the medium-term.
The market has once again opened on a flat note. The Sensex is up 20.52 points at 20281.55, and the Nifty up 5.95 points at 6028.35. About 260 shares have advanced, 61 shares declined, and 10 shares are unchanged.
Tata Steel, HDFC , Sun Pharma , Coal India and Axis India are top gainers in the Sensex. Among the laggards are BHEL , Tata Motors , Infosys , L&T and Baja Auto.
The rupee started off trade on a positive note. It rose 17 paise to 62.40 per dollar as against Wednesday's closing of 62.57.
Mohan Shenoi of Kotak Mahindra Bank said cancellation of the G-Sec auction deferred earlier in January and completion of switch of Rs 27000 crore by Government in a non-disruptive fashion will be perceived as bullish by bond market.
"The range for the 10-year yield is seen at 8.65-8.70 percent. Ahead of ECB rate setting meeting and US non farm payroll data the dollar-rupee is expected to stay in a tight range of 62.30-62.70/dollar," he added.
The yen hovers near multi-month highs against the dollar and euro early on Thursday, highlighting a cautious mood among investors still fretting about the recent selloff in emerging markets. Trading, however, was light and expected to remain so as key event risks loomed.
The outcome of the European Central Bank (ECB) policy review is due later on Thursday, followed by US jobs data on Friday.US markets closed marginally lower on Wednesday moved by corporate earnings and better-than-expected report on the service sector that balanced few payrolls addition. The Dow Jones erased its early losses to close at 15440 while the S&P 500 finished almost unchanged.
European markets on the contrary closed in the green buoyed by robust business activity that grew at its fastest pace since June 2011.A media report suggesting the extension of maturity of loans to Athens aided the market rally.
Asian markets too rebounded strongly in early trade on the back of positive US data.
Brent Crude prices are flat to mildly lower while Nymex gained in early Asian trade. Meanwhile, precious metal gold has held on to small overnight gains as global equities remained volatile amid lower risk appetite and concerns over economic growth.