Market bleeds: Sensex plunges 431 points, Nifty below 8050

23 Sep 2014

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03:30 Market closing
The market finally ended with deep cuts. The Sensex closed at 26775.69, down 431.05 points or 1.6 percent while the Nifty slipped 128.75 points or 1.6 percent at 8017.55. About 886 shares advanced, 2131 shares declined and 91 shares were unchanged.

Wipro gained 1 percent while other stocks ended in red in the Sensex. Cipla and Tata Motors were down 4 percent, Tata Steel, BHEL and Reliance fell 3 percent each.

03:00pm Market Check
The Sensex crashed 391.09 points or 1.44 percent to 26815.65 and the Nifty plunged 108.40 points or 1.33 percent to 8037.90  following weak European cues after the US announced it had launched airstrikes in Syria. France's CAC, Germany's DAX and Britain's FTSE fell 1-1.5 percent.

The United States and Arab allies hit Islamic State targets including training camps, headquarters and weapon supplies in northern and eastern Syria in dozens of air and missile strikes today, the US military and a monitoring group said.

US strikes also hit a separate group of al Qaeda-affiliated militants in northern Syria.

Back home, shares of Cipla, Tata Motors, Hindalco Industries, Gail India, Tata Steel and DLF tanked 3-7 percent while HCL Technologies outperformed, up 1.5 percent.

About 831 shares have advanced, 2100 shares declined, and 99 shares are unchanged on the BSE.

02:45pm GVK in Focus
Mumbai airport operator GVK is in talks with various private equity (PE) players to sell its stake in its airport business.

The company is in talks with PE players like KKR, Blackstone, GA, etc to divest its stake in a move to monetize its assets. The company is looking to raise USD 400 million through this stake sale, say sources.

Furthermore, the company is looking to list its airport business and is in talks with merchant bankers for the same. However, the listing is unlikely to take place before mid- FY15.

02:30pm Strong debut of Sharda Cropchem
It is a stellar listing for Sharda Cropchem on exchanges today. The stock opened with a premium of over 70 percent at Rs 262 per share. Currently it is trading at Rs 237.70, up 52 percent over issue price of Rs 156.

RV Bubna, CMD of the Mumbai-based crop protection chemical company, said they are looking at a 25-30 percent growth in revenues and margins next year. He said FY15 margins could even surpass the 25 percent levels.

The money that has been raised through the listing would be invested in registration of products, he added.

''All these agro chemicals that we are dealing with are required to be registered in any country that we export to. And this process of registration is highly capital-intensive and time-consuming,'' he explained.

02:15pm Tech Mahindra signs deal
Tech Mahindra signed a multi-year long-term contract with Finnish Company Ahlstrom, the fiber-based materials company, in Finland.

"Tech Mahindra has been selected by Ahlstrom to manage its information technology operations," said the company in its filing to BSE, adding approximately 50 Ahlstrom IT employees globally are planned to move to Tech Mahindra under a business transfer agreement.

In an interview to CNBC-TV18, Rajesh Chandiramani, head of sales for Continental Europe at Tech Mahindra, said the deal size exceeds USD 50 million.

Under the agreement, Tech Mahindra has got into a 5-year contract, along with a 2-year extension, with Ahlstrom. Chandiramani said the company may see some pressure on margins on the back of deal.

02:00pm Market Check
The market extended losses in afternoon trade with the Sensex falling 314.74 points or 1.16 percent to 26892 and the Nifty declining 89.95 points or 1.10 percent to 8056.35. The broader markets dropped too with the BSE Midcap and Smallcap indices losing 1.3 percent and 1.6 percent, respectively.

Declining shares outnumbered advancing ones by a ratio of 2006 to 859 on the Bombay Stock Exchange.

Shares of Tata Motors, Cipla and Hindalco Industries topped the selling list, falling 3 percent each followed by ICICI Bank, ONGC, M&M and Coal India with 2-2.5 percent loss.

Reliance Industries, Larsen and Toubro, HDFC, HDFC Bank, Axis Bank, Bharti Airtel, Tata Steel and Gail India were down 1-1.8 percent. However, Hindustan Unilever, ITC, Wipro, Maruti Suzuki, Hero Motocorp, NTPC and Dr Reddy's Labs bucked the trend, up 0.2-1 percent.

2:00 pm Exclusive: The Piramal Enterprises has been eyeing many road projects since the past few months. There have been talks of them signing six road assets valued for more than over USD 20 billion.

Piramal Enterprises is in discussion to buy two of Hindustan Construction Company's (HCC) road projects. The Group is likely to acquire these road assets via their infra arm, reports CNBC-TV18 quoting sources.

On the other hand HCC has plans to raise around Rs 1000 crore by selling some of their non-core assets and some of these road projects could be one of them. This will help reduce their debt which currently stands at Rs 4000 crore plus.

Both Piramal Group and HCC refused to comment on market speculation.

1:45 pm Buzzing: Shares of Marksans Pharma surged 11 percent intraday after Edelweiss' positive report on the stock. Though the brokerage has not rated the stock, it feels that the company led by Mark Saldanha is now well poised to ride the growth super highway over coming years. The stock is up 250 percent year-to-date.

The management expects 30 percent plus revenue CAGR and 300-400 basis points margin surge over FY14-17 with triggers like US ramp up on ANDA approvals, steady UK business on more launches and high margin softgel capsules basket spreading out globally.

The brokerage feels Marksans Pharma is likely to be a debt free company by FY16 as management is planning to pare debt further riding rising cash. The stock trades at 34xFY14 trailing EPS.

1:23 pm Market check: The market has slipped further. The Sensex is down 168.70 points at 27038.04 and the Nifty is down 49.95 points at 8096.35. About 1029 shares have advanced, 1762 shares declined, and 122 shares are unchanged.

Except IT and FMCG stocks almost all indices are in red. Wipro, HUL and ITC are up 1-2 percent each.

The market is still struggling with the Sensex down 121.04 points at 27085.70. The Nifty is down 35.45 points at 8110.85. About 1090 shares have advanced, 1657 shares declined, and 116 shares are unchanged.

Wipro, HUL, Maruti, ITC and Dr Reddy's are top gainers in the Sensex. Among the losers are Hindalco, Cipla, Tata Motors, Axis Bank and M&M.

Following the footsteps of Moody's, now Credit Suisse has upgraded Tata Motors from "neutral" to "outperform".  Reuters reported, in a report, Credit Suisse said that the concerns regarding volumes are now abating.

It said that Tata Motors, in recent times, have under-performed the other auto stocks but the long term story remains promising. Tata Motors has returned 22.72% in last 3 months.

Crude oil futures prices rose by 0.29 per cent to Rs 5,593 per barrel today as speculators created fresh positions, tracking a firming trend in Asia. Market analysts attributed the rise in crude oil futures to a firming trend in Asia in response to better-than-expected Chinese manufacturing data and after the US said it had led bombing raids against jihadists in crude producer Syria.

12:55pm M&M under pressure
The Sensex declined 78 points while shares of Mahindra and Mahindra (M&M) fell 1.7 percent after Credit Suisse downgraded the stock to neutral, citing valuations are no longer attractive. However, the stock outperformed the market in the last three months (M&M up 18 percent versus Sensex up 8 percent in last three months).

The brokerage cut its earnings estimates by 5 percent, but raised target price to Rs 1,470 as the value of subsidiaries has gone up in line with the rest of the market.

Whilst volumes for the passenger vehicle (PV) industry are year-to-date up 5 percent YoY, Mahindra's PV volumes are down 13 percent Y-o-Y as the company has suffered from a lack of new launches. The company hopes to correct that with the launch of the Scorpio refresh (on September 25), says the brokerage.

The company has two new compact SUV launches in FY16 on the basis of which Credit Suisse is expecting M&M's utility vehicle (UV) volumes to grow at more than 20 percent in FY16. However with UV competition set to intensify significantly with players such as Maruti, Hyundai, Honda planning to enter the space, Mahindra will have to move up a notch on product quality, it adds.

12:30pm Interview
The Sensex dropped 111.31 points to 27095.43 and the Nifty slipped 31.60 points to 8114.70.

Hemant Kanoria, chairman and managing director, SREI Infrastructure Finance says the company is looking to divest its assets worth Rs 500-1000 crore and expects them to monetized by this fiscal year-end.

Speaking to CNBC-TV18, Kanoria says the company is working on various routes, including initial public offer (IPO) to monetize telecom tower operator Viom Network.SREI Infra has an 18 percent stake in the company that is a joint venture (JV) with Tata Group

The company may opt to list on either New York Stock Exchange (NYSE) or the London Stock Exchange (LSE), he further adds.

Furthermore, Kanoria expects a better FY15 than the earlier year buoyed by the new government's sincere intent at reviving the infrastructure sector.

12:00pm Equity benchmarks remained under pressure amid consolidation. The 30-share BSE Sensex declined 82.42 points to 27124.32 and the Nifty fell 22.30 points to 8124.

About 1165 shares have advanced, 1441 shares declined, and 129 shares are unchanged.

DLF topped the selling list, down 4 percent as property prices in Delhi are set to rise.  The Delhi government hiked circle rates - the minimum valuation at which properties have to be registered - by up to 20 percent with an aim to check black money component in sale and purchase transactions. The new rates will come into effect from today.

Shares of ICICI Bank, Reliance Industries, L&T, HDFC, M&M, Tata Motors, ONGC, Axis Bank, Cipla, Tata Steel, Hindalco, Bharti Airtel and Coal India dropped 0.8-1.9 percent.

However, Wipro, Maruti Suzuki and Bajaj Auto bucked the trend, up 1-1.5 percent followed by Infosys, HUL, Hero Motocorp, NTPC, Dr Reddy's Labs and BHEL with 0.5-0.9 percent.

11:50 am Market outlook: Gautam Chhaochharia, Head of India Research at UBS remains bullish in India and retains his official target of 8000 for Nifty by December 2014. From the next year perspective, UBS is comfortable that earnings momentum will be back to match the estimates, which has been missing over the last 3-4 years.

"We don't have forecast but we do remain constructive in that context," he said. UBS has high conviction on cyclical recovery in India and remains positive on Voltas , Crompton Greaves and Carborundum . Chhaochharia feels financial sector will be a big bet as valuations look attractive. In the segment, he is bullish on LIC Housing Finance and Shriram Transport . He also remains bullish on oil and gas over the next 6-12 months on macro triggers and reasonable valuations.

11:30 am Buzzing: Investors have consistently been buying shares of National Buildings Construction Corporation (NBCC) after Nomura initiated buy rating on the stock with a target price of Rs 1,049, implying a 49 percent upside. The stock rallied as much as 8 percent intraday to touch a record high of Rs 765 on the Bombay Stock Exchange. It surged 400 percent in 2014 (year-to-date).

The brokerage believes strong growth prospects with an asset light business model will drive further re-rating for the stock.

"NBCC enjoys negative working capital (and a cash-rich balance sheet) and passes on risks to subvendors on back-to-back contracts, thus remaining asset light," it explained.
 

The market is under pressure ahead of August F&O expiry. The Sensex is down 55.16 points at 27151.58 and the Nifty is down 17.15 points at 8129.15. About 1110 shares have advanced, 1295 shares declined, and 105 shares are unchanged.

Bajaj Auto, Maruti, BHEL, HUL and Wipro are top gainers in the Sensex. Among the losers are Hindalco, M&M, Cipla, Bharti Airtel and Tata Steel.

It's a welcoming reception for Sharda Cropchem that debuted on the bourses with a premium of over 70 percent.

Globally, Asian markets bounced back after the Chinese flash HSBC PMI came in better than estimates. China's manufacturing sector expanded at a slightly faster pace in September even as employment fell to a 5-1/2-year low, a preliminary HSBC survey showed. The HSBC/Markit Flash China Purchasing Managers' Index (PMI) rose to 50.5 in September from August's final reading of 50.2, beating a Reuters poll forecast of 50.

The employment sub-index fell to 46.9, a low not seen since February 2009. A hefty drop in employment could raise alarm bells for the Chinese government, which has indicated it will tolerate slower economic growth as long as employment is not affected.

11:00am JSW Steel in Focus
International iron ore and coking coal prices have seen a fall in recent times and JSW Steel is expected to benefit from the same. But Seshagiri Rao, joint MD and group CFO, JSW Steel says the same trend is not seen in India due to shortage of iron ore. He believes domestic iron ore production is likely to see a deficit of 30 million tonne this year.

He feels the company will have to increase iron ore import from 6 million tonne to 10 million tonne.

JSW Steel has a sales volume target at 12.4 MT for FY15.

Rao says the company is following a strategy of backward and forward integration and keeps scouting the market for such opportunities. Luchini is one such opportunity and JSW Steel has bid for its rolling plant.

10:40am Market Expert
The Sensex declined 79.49 points to 27127.25 and the Nifty fell 24.15 points to 8122.15.

Kunj Bansal of Centrum Wealth Management does not expect the market to correct sharply. He says a lot of negatives that could have had an impact on the market have cooled off – inflation is correcting, oil prices globally have fallen and the fear of less-than-needed monsoon has also abated. The three combine can result in WPI and CPI cooling. According to him, maximum there can be a 4-odd-percent correction in indices.

10:25am Realty stocks under pressure
Shares of real estate stocks are under pressure as property prices in Delhi are set to rise.  The Delhi government hiked circle rates- the minimum valuation at which properties have to be registered - by up to 20 percent with an aim to check black money component in sale and purchase transactions. The new rates will come into effect from today.

As per the decision approved by Lt Governor Najeeb Jung, the circle rate has been increased to Rs 7.74 lakh per square metre of land from Rs 6.45 lakh in category A residential colonies like Greater Kailash, Defence Colony, Gulmohar Park, Panchsheel Enclave, Anandlok, Green Park, Golf Links and Hauz Khas.

This means nobody would be allowed to buy land and immovable properties in these colonies for less than Rs 6.45 lakh per sq metre. The circle rates in the city was last revised in November 2012. The rates were then hiked by a whopping 200 percent.

DLF and Unitech were down more than 2 percent.

10:00am Equity benchmarks as well as broader markets continued to consolidate with the Sensex declining 28.63 points to 27178.11 and the Nifty falling 11.90 points to 8134.40.

About 1160 shares have advanced, 991 shares declined, and 108 shares are unchanged.

The Indian market may correct around 2-4 percent but there are plenty of positive triggers in the near-term that must allow it to head in a positive terrain, believes Mehraboon Irani of Nirmal Bang Securities.

According to Irani, Prime Minister Narendra Modi's US visit, divestment news, achieving fiscal deficit target and state polls will optimism in the market for at least next 2-4 months.

Shares of Larsen and Toubro, ITC, HDFC Bank, Mahindra and Mahindra, HUL, Sesa Sterlite, Dr Reddy's Labs and Tata Steel lost 0.4-0.9 percent whereas TCS, ICICI Bank, Infosys, Wipro, Tata Motors, Wipro, Maruti Suzuki, Sun Pharma, Hindalco and NTPC gained 0.3-1 percent.

9:55 am Drug price control: The National Pharmaceutical Pricing Authority (NPPA) has withdrawn its disputed order for price control of 108 non-scheduled formulations. The order was to cap prices of a list of 108 cardiovascular and diabetes drugs, not part of NLEM (National List of Essential Medicines), and had created uproar from the industry leading to lawsuits contesting the order. Now with the withdrawal notification, the July 2014 order ceases to be valid. While it will be a disappointment for patients' waiting to see their pharmacy bills benefit from lower prices in these two mass market drug categories, the order withdrawal will come as a relief for the domestic drug industry.

NPPA's order had broadened the scope of price control even to drugs outside of NLEM, and the industry feared that the entire market was now susceptible to price control.

9:30 am Market outlook: Kunj Bansal of Centrum Wealth Management does not expect the market to correct sharply. He says a lot of negatives that could have had an impact on the market have cooled off – inflation is correcting, oil prices globally have fallen and the fear of less-than-needed monsoon has also abated. The three combine can result in WPI and CPI cooling. According to him, maximum there can be a 4-odd-percent correction in indices. Bansal feels cement continues to throw decent opportunities. He is bullish on Ramco Cement s on the belief that is will benefit from extra construction in Andhra Pradesh.

He also likes JK Lakshmi Cement within the space. He adds that despite the massive run up that pharma and auto ancillary stocks have seen, Torrent Pharma , Bharat Forge and Banco Products continue to offer good investment opportunities.

Equity benchmarks started off Tuesday's trade on a flat note with the Sensex rising 32.39 points to 27239.13 and the Nifty advancing 9.10 points to 8155.40.

About 1005 shares have advanced, 357 shares declined, and 52 shares are unchanged.

TCS, Infosys, ICICI Bank, Wipro, NTPC, HCL Technologies and Tech Mahindra gained 0.7-1.7 percent while M&M, ITC, L&T, ONGC, HDFC Bank, DLF and Jindal Steel fell 0.4-1.4 percent.

Indian rupee has opened lower by 13 paise at 60.94 per dollar on Tuesday compared to previous day's closing value of 60.81 a dollar.

Ashutosh Raina, HDFC Bank feels the focus now shifts to growth concerns in China. "Markets will be keenly awaiting the HSBC Manufacturing PMI today. The dollar strength has been the theme recently, with dollar index just shy of the psychological number of 85," he adds.

According to him, locally, the story of FII flows and Central Bank intervention continues. He expects the USD/INR pair to trade in 60.50-61.50/USD range.

Asian markets were trading in the red in early trade after China released better-than-expected factory activity. Trade, however, is quiet with Japanese markets being shut for Autumnal Equinox Day.

Brent crude slipped to USD 96 dollars per barrel as demand and supply fears outweighed expectations of a cut in oil output from the OPEC. Precious metal gold struggled around USD 1215 an ounce, hurt by outflows from the top bullion backed exchange-traded fund (ETF) as investors adjusted positions in anticipation of higher interest rates in the US and further strength in the dollar.

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