Nifty below 8000, Sensex slips 324 points; Small & midcap bleed

03:40 pm Global stocks: Global shares slipped to a one-month low as markets braced for a Federal Reserve meeting, when investors will be looking for clues on whether the US central bank could raise interest rates sooner than previously expected.

The MSCI world equity index, which tracks shares in 45 countries, was down 0.2 percent after hitting its lowest level since mid-August earlier in the session. In Europe, the benchmark FTSEurofirst 300 was down 0.4 percent.

Speculation that the Fed could raise interest rates sooner and faster than previously expected has rattled share markets around the globe and supported the US dollar.

03:30 pm Market closing: Heavy selling dragged benchmark indices as investors are cautious on a possible hawkish shift in the US Federal Reserve's policy stance as the Fed begins a two-day policy meeting later in the day. The Nifty ended 109.10 points down or 1.4 percent at 7932.90. The Sensex was down 324.05 points or 1.2 percent at 26492.51. About 780 shares advanced, 2235 shares declined, and 103 shares were unchanged.

03:20 pm RBI norms: Final guidelines for on tap universal banking licences will be issued in the current fiscal, Reserve Bank Deputy Governor R Gandhi said here today.

"We are working towards issuing guidelines for full service banks on tap. I cannot give you a timeline, but it will be in this financial year," Gandhi told reporters on the sidelines of an annual banking event organised by FICCI and the Indian Banks' Association (IBA) here.

The Reserve Bank had earlier issued draft guidelines for payment and small banks and is in the process of finalising the final norms. "Now the public comments (on small and payment banks) have been received and we are factoring in them. Soon we will come out with the final guidelines on these two," Gandhi said.

03:10 pm Market outlook: HSBC has turned neutral from underweight on India after the clear outcome of the Lok Sabha elections on May 16. According to Jitendra Sriram, MD and head of Research, HSBC India, the clear mandate with BJP coming to power is expected to turnaround India's growth story.

He believes the catalysts are falling well in place for earnings recovery but the market may take a little breather now. Speaking to CNBC-TV18 from the sidelines of HSBC Global Connection Conference, Sriram says the industrial recovery is still some time away. He, however, believes the domestic mutual fund industry is seeing flows after many years of slump.

02:55pm Market Check
The market fell more than a percent weighed down oil & gas, banks, capital goods, power and metals stocks. The Sensex tumbled 284.07 points to 26532.49 and the Nifty lost 94.90 points to 7947.10.

About 780 shares have advanced, 2158 shares declined, and 110 shares are unchanged. The BSE Midcap and Smallcap indices crashed 3-3.5 percent.

Tata Power topped the selling list, falling more than 6 percent followed by Reliance Industries, Tata Motors, ONGC, State Bank of India, Axis Bank, Tata Steel, NTPC and Gail India with 2-3 percent.

Shares of L&T, HDFC Bank, HDFC, ICICI Bank, Cipla, Maruti, Coal India, Bajaj Auto, Hindalco Industries and BHEL declined 1-1.8 percent.

02:50pm Lupin In focus
Lupin said it has entered into a long term strategic partnership with Merck Serono, the  biopharmaceutical division of Merck. Lupin will support Merck Serono in the implementation of the company's general medicines portfolio expansion initiative in emerging markets thus addressing local needs for affordable, high quality medicines, it added.

The agreement builds on an established working relationship between the two companies, and could add up to 20 new products to the current portfolio. The first launches are expected in 2016.

02:40pm Marico at record high
Shares of Marico hit a new high of Rs 300 after Credit Suisse increased target price and earnings forecast.

The brokerage maintains outperform rating on the stock saying it is the top pick among FMCG midcaps. It raised target price to Rs 350 apiece and earnings estimates by 2-3 percent.

"The near-term trigger for earnings upgrades will be a correction in copra prices over the next 6-12 months. The company is also structurally shifting its portfolio towards value-added products," it reasoned.

Copra prices have moved up sharply by 150 percent over the past 18 months. Credit Suisse expects copra prices to correct from February 2015, and Marico to witness strong gross margin tailwinds in April-September period of FY16 which is not built in estimates.

02:30pm Midcap, Smallcap performance
In the midcap space, Cox & Kings shot up 12 percent amid fall in markets. CARE, Triveni Turbine, Gujarat Flourochem and Bhushan Steel gained 3-4.5 percent while GMR Infra, Delta Corp, Chennai Petroleum, GSFC and Amtek India lost 7-9 percent.

Among smallcaps, Mastek extended gains for the second consecutive session, up another 15 percent (in addition to 15 percent rally in previous session) after the company decided to demerge insurance products and services business into a separate listed company.

Visagar Polytex, Spice Mobility, Rain Industries and Sharda Motor spiked 6-10 percent whereas Venus Remedies tanked 19 percent after Crisil downgraded the company's long-term rating to D from BB+ due to to delay in repayment of term loan.

BS Limited, Himadri Chemical, Genus Power and HFCL were down 12-14 percent.

02:20pm Interview
NCC is planning a Rs 600 crore (Rs 598.7 crore to be precise) rights issue, allotting 29.93 crore shares at Rs 20 per share. It will issue 7 shares issued on rights basis for every 6 shares held. The company's board has approved raising upto Rs 650 crore in April 2014.

YD Murthy, executive vice president of finance at NCC says the rights issue will most likely open on September 29, and close on October 7.

The funds raised from the company's proposed rights issue will be used to repay its short-term debts, de-stress the balance sheet, raise the company's ratings that can in turn help lower finance cost, says Murthy. At the moment, the company is working with Crisil for its ratings.

NCC has a consolidated debt of Rs 3700 crore. Its debt has been increasing due to an increase in working capital. Murthy says the rights issue will help lower working capital concerns. He adds that post the rights issue, the company's net worth will go up to Rs 3000 crore and debt will come down to Rs 2000 crore from Rs 2,600 crore on a standalone basis. He expects to see debt reduction by this October end or November.

02:10pm Elections
BJP suffered a jolt in Rajasthan winning just one of the four seats and was losing ground in Uttar Pradesh where Samajwadi Party (SP) was ahead during counting of votes in the bypolls today exactly four months after it swept the two states in Lok Sabha elections.

In Gujarat, ruling BJP could retain only six of the nine seats while Congress bagged two and was ahead in one. All the nine seats were earlier held by BJP and were vacated after their sitting MLAs were elected as MPs.

The BJP, however, had a reason to smile in West Bengal where it made its debut in the state assembly on its own by winning the Basirhat Dakshin seat. The bypolls for 33 seats spread over 10 states were held on September 13.

02:00pm Equity benchmarks extended losses ahead of FOMC two-day meet that will begin today. Investors will closely watch the outcome of this meeting as they expect some hint about interest rate hike.

The Sensex dropped 207.66 points to 26608.90 and the Nifty fell 73.25 points to 7968.75 while the BSE Midcap tumbled close to 3 percent and Smallcap plunged 3.2 percent.

About three shares declined for every share advancing on the Bombay Stock Exchange.

Despite the slip in the Nifty and the Sensex, Mehraboon Irani of Nirmal Bang Securities does not think it is going to be a deep correction.

He with the US Federal Reserve meet round the corner, markets tend to become volatile. But he does not see the Fed hiking rates anytime soon. ''It is going to be many quarters away according to me,'' he told CNBC-TV18.

He believes the next positive triggers for the market will be the state elections, divestment dues and the gas price hike.

Bharti Airtel and Dr Reddy's Labs bucked the trend, up over a percent followed by ITC, Infosys, TCS, Sun Pharma and Hero Motocorp with 0.3-0.6 percent.

1:50 pm PSUs to be shut? Government officials will meet on Tuesday to discuss proposals to shut down some loss-making state-owned companies, risking a conflict with powerful trade unions. After two decades of halting privatisations, the Central government still owns about 260 firms and thousands more at the state level, involved in activities ranging from generating nuclear power to making condoms.

Cabinet Secretary Ajit Seth has called a meeting of top officials to consider what to do with the 10 firms that make the biggest losses. They had a combined net loss of Rs 245 billion (USD 4 billion) in 2012/13. The list includes Bharat Sanchar Nigam, Mahanagar Telephone Nigam , Air India, Hindustan Photofilms and Hindustan Fertilisers Corporation, according to a note prepared by the Department of Public Enterprises.

1:40 pm Diesel deregulation: According to top level government sources one should not expect change in diesel prices till October 15, which is voting day in Maharashtra and Haryana. The government is also saying that because of the moral code of conduct they are not able to provide relief to the consumers reports CNBC-TV18 quoting sources. Moreover, there was expectation of cut in petrol prices to around Rs 2 per litre but the sources say that oil marketing companies (OMCs) refrained from cutting prices yesterday in their fortnightly review because while the Brent crude prices have come down, internationally there was not much changes in petrol prices, and if at all there was a change it would have been very miniscule. Also because of the moral code of conduct it was not warranted to revise petrol prices.

1:30 pm Market outlook: HSBC has turned neutral from underweight on India after the clear outcome of the Lok Sabha elections on May 16. According to Jitendra Sriram, MD and head of Research, HSBC India, the clear mandate with BJP coming to power is expected to turnaround India's growth story.

He believes the catalysts are falling well in place for earnings recovery but the market may take a little breather now. Speaking to CNBC-TV18 from the sidelines of HSBC Global Connection Conference, Sriram says the industrial recovery is still some time away. He, however, believes the domestic mutual fund industry is seeing flows after many years of slump.

1:20 pm Buzzing: Shares of Cadila Healthcare rallied as much as 2.8 percent intraday on getting tentative USFDA approval for anti-diabetic drug.

"Zydus Cadila has received tentative approval from the US Food and Drug Administration (US FDA) to market (anti-diabetic drug) Glipizide extended release tablets in the strength of 2.5 mg, 5 mg and 10 mg," said the company in its filing.

The estimated sales in 2014 for Glipizide extended release tablets is USD 90.1 million, as per IMS.

The group now has 97 approvals and has so far filed 249 ANDAs since 2003-04, it added.

The market is slipping further as investors are cautious on a possible hawkish shift in the US Federal Reserve's policy stance as the Fed begins a two-day policy meeting later in the day. The Nifty is down 53.45 points or 0.6 percent at 7988.55 and the Sensex slips 150 points at 26666.56. About 977 shares have advanced, 1824 shares declined, and 95 shares are unchanged.

Oil, bank and auto stocks are dragging the indices. Axis Bank, ONGC, SBI, Tata Motors and Coal India are major laggards in the Sensex. Both midcap and smallcaps are slaughtered, down 3 and 2 percent respectively.

Britain promised to guarantee Scotland's high levels of state funding, granting Scots control over healthcare spending in a last-ditch attempt to shore up support for the United Kingdom before Thursday's vote on independence.

With polls showing the decision on the fate of the United Kingdom is too close to call, welfare spending and the future of Britain's revered National Health System have formed a central part of nationalist Alex Salmond's case for secession.

In a deal brokered by former Labour Prime Minister Gordon Brown, the leaders of Britain's three main political parties said they would retain the funding equation that sustains a higher level of public spending north of the border.

01:00pm Cadila Healthcare in News
Zydus Cadila has received tentative approval from the US Food and Drug Administration (US FDA) to market (anti-diabetic drug) Glipizide extended release tablets in the strength of 2.5 mg, 5 mg and 10 mg.

The estimated sales in 2014 for Glipizide extended release tablets is USD 90.1 million, as per IMS.

The group now has 97 approvals and has so far filed 249 ANDAs since 2003-04.

12:45pm Rate hike signal possible from FOMC?
Sean Darby, Jefferies says the combination of flattening global yield curves, a strong dollar and falling commodity prices ought to be forcing investors into significant asset allocation shifts.

"Paradoxically, equity volumes remain tepid despite the disinflationary conditions. We expect the FOMC meeting this week to signal the end of QE in October. We would, however, highlight that global liquidity measures have been much more dependent on China's money supply changes," he adds.

12:25pm RBI Governor on foreign debt
The Reserve Bank of India (RBI) is limiting the country's reliance on foreign debt and will continue to do so, governor Raghuram Rajan said.

"We are limiting our reliance on foreign debt. It's important we keep it this way," he said during a speech to university students.

Rajan's comments came at a time when foreign institutional investors have nearly exhausted their USD 25 billion allocation in government debt, leading to expectations that India would raise limits soon.

Rajan also said the RBI had reduced the current account deficit "substantially".

The current account deficit for April-June stood at USD 7.8 billion, sharply higher than USD 1.3 billion in January-March but narrowing from USD 21.8 billion a year ago, reports Reuters.

12:00pm Equity benchmarks remained marginally under pressure with the Sensex falling 44.25 points to 26772.31 and the Nifty declining 16.50 points to 8025.50 but the outperformance in broader markets continued.

The BSE Midcap and Smallcap indices gained 0.2 percent and 0.6 percent, respectively. Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1470 to 1163.

ONGC topped the selling list, falling 2.5 percent and Oil India declined 1 percent. Oil marketing companies (OMCs) like BPCL, HPCL and IOC fell 1.5-3 percent. Diesel prices will not be touched till October 15, at least till Maharashtra and Haryana elections, reports CNBC-TV18 quoting unnamed government sources. OMCs didn't revise petrol price as revision unwarranted, sources add.

Shares of Axis Bank, Reliance Industries, Tata Motors, Sesa Sterlite and Coal India lost 0.7-2 percent. Top lenders State Bank of India, ICICI Bank and HDFC Bank slipped 0.2-0.5 percent.

However, Bharti Airtel, Sun Pharma and Dr Reddy's Labs bucked the trend, rising 1-1.7 percent followed by Infosys, HDFC, ITC, Wipro, Hero Motocorp and Hindalco with 0.3-0.7 percent.

11:50 am IPO: Hiren Gada, Wholetime Director & CFO, Shemaroo Entertainment, said the industry has been seeing a lot of changes in terms of monetisation of films. He expects growth to accelerate in digital medium. Shemaroo is one of the largest integrated film & entertainment content house, involved in aggregation, distribution, production and post-production.

The company's current debt stands at around Rs 175 crore. Gada said the bulk of the money from IPO proceed will be used to fund the working capital. Astha Jain, Sr Reasearch Analyst at Hem Securities, recommends subscribe on the issue as it has a de-risk business model. ''There are multiple platforms on which the company is distributing its content. And it is not limited to a single title,'' she said.

11:30 am Interview: With lower-than-expected credit offtake and the current state of liquidity generation, interest rates or cost of money can drop from current levels, says N Sivaraman, president and wholetime director of L&T Finance Holdings . Though inflation has cooled a bit, it continues to be a worry and hence it may take another 2-3 quarters to see a drop in interest rates, he adds.

L&T Finance Holdings is seeing good demand for bond-based issuances. Sivaraman also commented on L&T Finance Holdings current state of business. He says in terms of core competencies, it is either the number 2 or the number 3 player in every segment it is present in, except the commercial vehicles space.

The market seems to be consolidating with negative bias. The Sensex is down 33.16 points at 26783.40 and the Nifty slips 11.90 points at 8030.10.

About 1459 shares have advanced, 975 shares declined, and 128 shares are unchanged.

Oil & gas stocks are taking a toll on the benchark indices. The index is down 0.8 percent. ONGC, Axis Bank, Tata Motors, Sesa Strelite and Coal India are major laggards while Dr Reddy's Labs, Sun Pharma, Bharti Airtel, Wipro and Bajaj Auto are top gainers in the Sensex.

Globally, Asian markets trade mixed as markets are cautious ahead of the FOMC meet kicking off today. Gold futures traded a shade higher at Rs 27,030 per ten gram today as speculators indulged in building up fresh positions amid a firming trend overseas before the US Federal Reserve begins a two-day policy meeting today.
 
10:55 am Downgrade: Shares of Venus Remedies slumped over 15 percent intraday after Crisil downgraded its ratings on the bank facilities to D from BB+. The rating agency has stated that the downgrade reflects delays in repayment of term loan by the company driven by a stretched liquidity.

''Venus Remedies stretched liquidity is on account of the significant increase in total cost of the large debt-funded capital expenditure over the past one year and high working capital requirements. The company is undertaking capex towards setting up marketing office. The total cost of this capex is estimated to have increased by about Rs 10 to Rs 15 crore,'' Crisil said.

It also added that the company's liquidity has deteriorated due to high working capital requirements reflected by inventory of about 131 days as on March 31, 2014.

10:30 am Interview: With State Bank of India cutting deposit rates for 1-3 years to 8.75 percent from 9 percent, could other banks soon follow suit? Keki Mistry, vice-chairman and chief executive officer of HDFC sees more banks cutting deposit rates in the next two months. He believes SBI decided to cut rates on the back of lower-than-expected credit offtake.

According to him, in another quarter or two, credit growth will take off. He says traditionally, credit offtake is highest in the fourth quarter. "I would be surprised to see sub-15 percent credit growth by FY15 end," Mistry told CNBC-TV18. According to him, if deposit rate across the system is lowered, then HDFC too will have to lower it. However, he was unable to give a timeline for a cut in deposit rates.

The market is looking listless with the Nifty hanging below 8050, down 10.35 points at 8031.65. The Sensex slips 37.06 points at 26779.50. About 1363 shares have advanced, 589 shares declined, and 66 shares are unchanged.

ONGC, Tata Motors, HDFC, Axis Bank and Sesa Sterlite are major laggards in the Sensex. Among the gainers are Sun Pharma, Dr Reddy's Labs, Hindalco, Wipro and SBI.

Asian shares held near one-month lows as investors braced for a possible hawkish shift in the US Federal Reserve's policy stance as the Fed begins a two-day policy meeting later in the day.

Speculation that the Fed could raise interests sooner and faster than previously expected have rattled many share markets around the global and supported the US dollar.

The Fed's Open Market Committee will begin its regular two-day policy meeting later on Tuesday, and investors will be scanning the outcome for clues on the timing of the first US rate hike in more than eight years.

09:55am Shemaroo Entertainment IPO
Mumbai-based media and entertainment company Shemaroo Entertainment opened its initial public offering of Rs 120 crore for subscription today. The issue will close on September 18, 2014.

The company has fixed issue price band at Rs 155-170 a share. The objects of the issue are to fund working capital requirements and fund expenditure for general corporate purposes.

09:40am FII View
Neelkanth Mishra, Credit Suisse says a secular growth story in India remains consumption with years of catch up to even other emerging markets.

"Excluding ITC and United Spirits, the sector is up 22 percent since June 9 mostly due to re-rating. With earnings growth estimates surprisingly uniform across the sector, we prefer stocks that have lower PE and have lagged like ITC, Marico, GSK Consumer and Emami. Credit Suisse upgrades Colgate and downgrades Godrej Industries," he adds.

09:15am Equity benchmarks see consolidation in early trade after nearly a percent fall in previous session but the broader markets continued outperform with the BSE Midcap and Smallcap indices rising 0.4 percent and 0.5 percent, respectively.

The Sensex rose 3.62 points to 26820.18 while the Nifty declined 2.45 points to 8039.55. About 932 shares have advanced, 229 shares declined, and 28 shares are unchanged.

Shares of BHEL, Wipro, Sun Pharma, Dr Reddy's Labs, Larsen and Toubro, NMDC, Bank of Baroda and DLF gained 0.4-1 percent while Tata Motors, Sesa Sterlite, Coal India, Hindalco, HUL, IndusInd Bank, ACC and Tata Steel fell 0.5-1 percent.

The Indian rupee gains marginally in the early trade on Tuesday. It has opened at 61.03 per dollar versus previous day's closing of 61.13 a dollar.

Ashutosh Raina of HDFC Bank said, "Markets await the outcome of the crucial 2-day FOMC meet and the Scottish referendum.''

''We had poor IIP and CPI data but a better than expected WPI also failed to cheer the markets. Expect the rupee to trade in a narrow range of 60.80-61.50/dollar till the outcome of the FOMC meeting,'' he added.

The US dollar holds steady with investors reluctant to do much as they wait for fresh guidance on interest rates from the Fed, while the Australian dollar rebounded from a six-month trough. The dollar index is little changed at 84 mark.

Global cues, meanwhile, are mixed with the US markets closing mixed with Nasdaq slipping to a one-month low, as investors booked profits ahead of the crucial two-day FOMC meeting that begins today.

Asian markets too are trading in the red as all eyes stay glued on the start of the Federal Reserve's meeting. Europe closed lower over concerns on the Fed meet and the Scottish independence vote.

In other asset classes, brent crude is trading well below USD 97 per barrel, its lowest since July 2, 2012 as investors are concerned of a possible weakening oil demand.