Nifty ends above 5900; Ranbaxy surges 6%, tech stocks gain

07 Oct 2013

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3:55 pm Market closing: After a tepid session on negative global cues, the market ended on a flat down. The Sensex closed down 20.85 points at 19895.10 while the Nifty managed to end above the 5900 at 5906.15, down 1.15 points.   About 1255 shares advanced, 1077 shares declined, and 150 shares were unchanged.   Tata Steel ended with a gain of 4 percent, followed by Hindalco , TCS , Jindal Steel and BHEL . Coal India , Bharti Airtel , ICICI Bank , Maruti Suzuki and L&T were major losers in the Sensex.

3:40 pm Mangement speaks: Despite the good monsoon, power generation in the second quarter will be slightly lower than the previous year, says ABL Srivastava, Director Finance at National Hydroelectric Power Corporation. This is due to the Dhauliganga plant not being operational because of the recent floods in Uttarakhand and secondly, some power stations will generate less in Q2 since they witnessed better power generation in the second half of 2012, he says.

On NHPC buyback issue, which has garnered so much interest, Srivastava told CNBC-TV18 the ministry of disinvestment and ministry of power have been working on offer-for-sale (OFS) and that also has not been finalised yet. He says except in case of one state electricity boards (SEB), there is no concern as far as receivables are concerned and the position is better than the previous quarter and the last six months.

3:20 pm Opinion on FMCG: The demand for the fast FMCG stocks will remain soft for the next six-eight quarters, says Sanjay Singh, Standard Chartered. He expects Q2 earnings to be in line with that of Q1 or maybe worsen a bit in terms of volume growth. Sales growth for the sector is likely to be in the range of 9-10 percent going forward for the next five to six quarters compared to current 12-13 percent, says Singh in an interview to CNBC-TV18. However, ITC and Britannia Industries remain his two preferred picks. Singh is neutral on Hindustan Unilever ( HUL ).

The market seemed to gather some strength in the last trading hour of the day. Erasing early losses, the Nifty hit 5900 but is down at 7.10 points. The Sensex is down 27.73 points at 19888.22. Index heavyweight ITC rebounded while financials are off day's low. Country's largest lender State Bank of India and its rival HDFC Bank fell 0.9 percent each. ICICI Bank trimmed its losses from 3.5 percent to 1.8 percent. Top gainers in the Nifty are Ranbaxy Labs (up 6.5 percent), Tata Steel (up 4 percent), BPCL , Hindalco and IDFC .

Meanwhile, Brent futures edged below USD 109 a barrel on Monday as oil production resumed in the Gulf of Mexico after a tropical storm, while lingering concerns over the US government shutdown clouded the outlook for demand, reports Reuters. Tropical Storm Karen had prompted producers to shut in nearly two-thirds of oil output in the Gulf of Mexico. But it was downgraded to a tropical depression late on Saturday, with production starting to return to normal by the end of the weekend.

02:59pm Expert on PSU Banks Investors are cautious as far as PSU banks are concerned because nothing good is happening to the lot, but they are getting pressurised from all fronts, says Jignesh Shial, IDBI Capital Markets. Even the Rs 14,000 crore earmarked by the government for capital infusion into banks may not help solve issues now, he says.

He does not advocate buying PSUs only on the basis of recapitalisation. According to him, right now it is more of a necessity rather than something advantageous happening for them.

Shial told CNBC-TV18, on asset quality, neither PSUs nor private sector banks are giving any positive kind of momentum.

02:50pm Buzzers TVS Motor Company shares rallied 6 percent on a media report that TVS group is planning to merge two TVS Investments subsidiaries with itself in order to strengthen the group's balance sheet.

Jubilant Life Sciences gained 0.5 percent as the board has approved consolidating its pharma business, under its Singapore subsidiary. The company will transfer API and dosage form businesses to its Singapore arm through a slump sale for Rs 1,145 crore.

Banking license aspirants like Bajaj Finserv , JM Financial and L&T Finance Holdings are up between 3-10 percent as finance minister P Chidambaram has said that the Reserve Bank will issue seven licences shortly.

02:40pm Sensex off day's low Equity benchmarks trimmed losses on further buying in technology and metals stocks. The Sensex is down 65.20 points at 19850.75, and the Nifty is down 17.75 points at 5889.55.

Index heavyweight ITC rebounded while financials are off day's low. Country's largest lender State Bank of India and its rival HDFC Bank fell 0.9 percent each. ICICI Bank trimmed its losses from 3.5 percent to 1.8 percent.

02:26pm The market stayed in bear grip in afternoon trade as traders continued selling in financials and oil & gas stocks. On the global front, European markets too are weak as the government shutdown in the US continues from the beginning of October.

The Sensex is down 129.75 points at 19786.20, and the Nifty is down 38.65 points at 5868.65, but the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining 0.3 percent each.

Coal India shares lost 3 percent on news that the 5 percent follow on public offer is likely in December. The FPO is expected to fetch nearly Rs 10,000 crore to government. Coal minister Shri Prakash Jaiswal told CNBC-TV18 that the groundwork is in place for the coal india divestment and now the final call lies with the cabinet.

ICICI Bank slumped over 2 percent after the bank raised an alarm over possible loan default by the Dabhol power plant. The plant has been rendered idle due to dwindling fuel supplies, raising concerns that billion of rupees given to gas-fired generation projects may turn into bad debt.

Meanwhile, the rupee slipped 48 paise to 61.98 against the US dollar.

2:00 pm Opinion on commodity: David Lennox, Fat Prophets sees international gold price hovering around USD 1,300 to USD 1,325 per ounce for now and says that any development relating to withdrawal of quantitative easing by the US Federal Reserve will be key to determine gold price movement.  "We are also watching closely what is happening in India in terms of imports coming into your country. At this stage, it looks as the government's actions to stem the flows of gold coming into India are probably having some of an impact. We are expecting that demand in India is perhaps slowing and that could put some pressure on the downside," he said in an interview to CNBC-TV18.

1:45 pm Buzzer: Traders are selling shares of Power Grid Corporation of India with the stock falling more than a percent on Monday. The follow-on public offer is likely to take place in November, reports CNBC-TV18 quoting sources. It is learnt that ICICI Securities, UBS, Kotak, Citibank and SBI Capital have been appointed as merchant bankers for the issue. Sources say the government is planning a 13 percent offer-for-sale and 4 percent divestment in the company. The government holds 69.42 percent stake in the company as of June 2013.

1:30 pm Exclusive interview: State Bank of India is looking at a festival plan for offering loans for offtake of consumer durables, says its managing director A Krishna Kumar. He expects the bank to be ready with the offerings in a couple of days. The bank is also looking to push the automobile financing sector. SBI has asked for Rs 4,000 crore, out of the Rs 14,000 crore earmarked by the government for capital infusion into banks. Kumar says there has been a secular upward movement in the cost of funds, cost of deposits over the last quarter, but it is not enough to affect the margins or the net interest income (NII) because the advances also have grown in the last quarter. SBI raised interest rates on deposits towards the end of September at the maximum 9 percent from 8.75 percent.

Dragged by profit booking in selected counters like banking, oil & gas and realty, the market continued its downtrend. The Sensex is down 191.64 points at 19724.31 while the Nifty slips 59.15 points at 5848.15. About 942 shares have advanced, 1049 shares declined, and 141 shares are unchanged. Guest editor Aditya Narain of Citi tells CNBC-TV18 that the brokerage has a neutral view on banks but slow growth and asset quality pressures remain major headwinds. He also adds that PSU banks offer a better investment opportunity. Coal India is down over 3 percent on news that the 5 percent follow-on-public offer is likely in December. The FPO is expected to fetch nearly Rs 10,000 crore.

The government intends to sell 31.6 lakh shares via the offer. Coal minister Shri Prakash Jaiswal tells CNBC-TV18 that the groundwork is in place for the Coal India divestment and now the final call lies with the cabinet. ICICI Bank , HDFC twins and L&T are other losers in the Sensex. On the gaining side are Hindalco , Tata Steel , Jindal Steel , Sesa Sterlite and HUL . Among the midcaps, shares of Bombay Dyeing jumped over 13 percent on the BSE.

Investors are excited about the stock on buzz that at least three global private equity firms are likely to acquire up to 24 percent stake jointly in Bombay Dyeing. The deal is valued at over Rs 500 crore. According to PTI sources, WL Ross, Sequoia Capital and JC Flowers are in the fray for the acquisition. Meanwhile, banking license aspirants like Bajaj Finserv , JM Financial and L&T Financial Holdings are up between 3-10 percent in trade as Finance Minister P Chidambaram has said that the Reserve Bank will issue seven licenses shortly.

12:50pm Market Update The market continued its southward journey in afternoon trade. The Sensex is down 202.75 points or 1.02 percent at 19713.20, and the Nifty is down 62.45 points or 1.06 percent at 5844.85. Financials lost the most today with the BSE Bankex falling more than 300 points. ICICI Bank fell over 3 percent and its rival State Bank of India is down 1.5 percent. HDFC and HDFC Bank declined 2.2 percent and 2.8 percent, respectively. On the global front, European markets slipped 0.5-1 percent in early trade Monday as the government shutdown in the US continues from the start of October month.

12:40pm Outperformers Hindalco Industries shares topped the buying list among largecaps, rising 3.5 percent followed by Tata Steel and Jindal Steel with 1-2 percent gains. Healthcare stocks too are on buyers' radar. Sun Pharma, Dr Reddys Labs and Cipal gained between 0.5-0.7 percent. TCS, the country's largest software services exporter, advanced nearly 7 percent in four consecutive sessions. It today rose 0.7 percent.

12:30pm Stocks In News Bombay Dyeing shares surged 13 percent on a media report that at least three global private equity firms are in talks to acquire up to 24 percent stake jointly in the company. The deal could be valued at over Rs 500 crore. However, the company has denied any such move. TVS Motor Company jumped nearly 8 percent on a media report that a restructuring of Sundaram Clayton - the holding company of TVS Motor - is on the cards. Also the group is planning to merge two TVS Investments subsidiaries with itself in order to strengthen the group's balance sheet. Jubilant Life Sciences' board has approved consolidating its pharma business, under its Singapore subsidiary. The company will transfer API and dosage form to its Singapore arm through a slump sale for Rs 1145 crore. The stock gained nearly 3 percent.

12:14pm The market remained under pressure in noon trade with the Sensex falling nearly a percent on weakness in Asian equities and profit booking in financials, capital goods, power, oil & gas and auto stocks. The Sensex is down 188.21 points or 0.95 percent at 19727.74, and the Nifty is down 56.30 points or 0.95 percent at 5851. The Nifty cracked below its 200-day moving avergae of 5840. Banking stocks are the big laggards with the Bank Nifty losing 250 points. Aditya Narain of Citi is having a neutral view on banks. According to him, slow growth and asset quality pressures remain major headwinds.

Top private sector lenders ICICI Bank and HDFC Bank plunged 2.5-3 percent while their rival State Bank of India declined over 1 percent. In case of ICICI Bank, investors are concerned on reports that the bank has raised alarm over loan default by the Dabhol power plant. Coal India is down over 3 percent on news that the 5 percent follow-on public offer is likely in December. The government intends to sell 31.6 lakh shares via the offer.

Coal minister Shri Prakash Jaiswal told CNBC-TV18 that the groundwork is in place for the Coal India divestment and now the final call lies with the cabinet. Meanwhile, the rupee fell 41 paise to 61.85 against the US dollar, in-line with Asian peers. Dollar purchases by foreign and private banks also weighed on sentiment. Bond prices ranged ahead of RBI's Rs 10,000 crore open market operation today.

12:00 am Brokerage rating: BNP Paribas has upgraded Infosys to "buy" from "hold" and raised its target price to Rs 3,550 from Rs 2,450 ahead of the company's September quarter earnings on Friday. "Despite Infosys's recent struggles, we believe an uptick in demand, renewed focus on traditional service lines and cost initiatives will lead to revenue growth stabilising and currently depressed quarterly margins recovering. This in turn should lead the stock to re-rate," BNP said in a note.

11:50 am Macro measures: The RBI will look at easing restrictions on the forex futures market once the rupee stabilises, Deputy Governor HR Khan said, reports Reuters. The Reserve Bank of India is also in talks with stock market regulator Securities and Exchange Board of India (SEBI) on making the dollar-rupee over-the-counter and futures market trades on a delivery basis, Khan said on the sidelines of an event. The central bank will look at the "whole gamut of futures market" once stability improves in the forex market, Khan added.

11:45 am Buzzer: Investors are nervous about Coal India with the stock falling more than 3 percent. The government is likely to dilute 5 percent stake in the company via follow-on pubilc offer in December, reports CNBC-TV18 quoting sources. The five percent dilution will fetch nearly Rs 10,000 crore to government exchequer. The Government of India, which currently holds 90 percent stake in the world's largest coal producer, intends to sell 31.6 lakh shares via follow-on pubilc offer, says sources.

11:45 am Buzzer: Investors are nervous about Coal India with the stock falling more than 3 percent. The government is likely to dilute 5 percent stake in the company via follow-on pubilc offer in December, reports CNBC-TV18 quoting sources. The five percent dilution will fetch nearly Rs 10,000 crore to government exchequer. The Government of India, which currently holds 90 percent stake in the world's largest coal producer, intends to sell 31.6 lakh shares via follow-on pubilc offer, says sources.

11:30 am Guest editor's take: Investors should take advantage of the relief provided by the US Federal Reserve's decision to postpone the QE tapering and not become complacent about it, says Aditya Narain, MD & India Strategis at Citi. In a research note, authored by Narain, Citi expects India to go back to its old normal i.e. trading at 12.5x PE as opposed to 14.5x currently. It has revised its Sensex year-end target to 18,900 versus the 20,800 earlier. In its model portfolio, Citi has raised IT to "overweight", along with pharma, telecom and energy. Meanwhile, it has cut its rating on Indian banks to "neutral". It is also neutral on real estate and capital goods. It is "underweight" on consumers, materials, utilities and autos.

The market seems to be losing ground quickly as banking, capital goods and oil & gas stocks are dragging indices. The Sensex is down 201.59 points or 1.01 percent at 19714.36, and the Nifty is down 62.50 points or 1.06 percent at 5844.80. About 778 shares have advanced, 830 shares declined, and 96 shares are unchanged. Coal India, ICICI Bank , HDFC twins and Bharti Airtel are laggards while Tata Steel , Jindal Steel , Hindalco and TCS are seeing buying interest. Asian markets appear nervous over the budget deadlock in the US. Commodities saw gold slide closer to USD 1300 per ounce, Nymex slipped to below USD 104/bbl  and Brent at USD 109/bbl as the US gridlock continued to dampen trading. Currencies saw the dollar index rebound from the 8-month lows rising for first time in six sessions.

Back home, rupee opened slightly soft against the dollar today. Other emerging market currencies such as the Malaysian ringgit and Indonesian rupiah were marginally weaker as well. Bonds too opened a tad softer versus Friday's closing ahead of the RBI's Rs 10,000 crore open market operations (OMO) today.

10:55am Buzzers Shares of Bombay Dyeing jumped over 16 percent in early morning trade on Monday. Investors are excited about the stock on buzz that at least three global private equity firms are likely to acquire up to 24 percent stake jointly in Bombay Dyeing. Shares of Jubilant Life Sciences rallied 5.7 percent in early trade Monday after the healthcare firm decided to consolidate its pharma business under its Singapore subsidiary.

10:45am Gold update Gold nudged up in Asian trading on Monday as the near-week long US government shutdown raised fears Congress may struggle to raise the debt ceiling in time, burnishing bullion's safe-haven appeal, reports Reuters. Failure to raise the US borrowing limit by October 17 will push the world's biggest economy into an unprecedented debt default. Congress is already divided on a spending bill, resulting in a partial government shutdown that is hurting the economy and delaying key data releases.

10:15am Movers & Shakers India's largest private sector lender ICICI Bank topped the selling list, falling 3.5 percent followed by ITC , HDFC Bank , Reliance Industries , HDFC and Bharti Airtel with 1.5-2.5 percent loss. State-run coal mining company Coal India fell 3 percent on likely follow-on public offer in December. The government is likely to dilute 5 percent through FPO and that will fetch nearly Rs 10,000 crore to government. Capital Goods major Larsen & Toubro and top lender State Bank of India declined 1 percent each. However, Infosys shares gained 0.2 percent ahead of its September quarter earnings on Friday. In fact, all largecap technology stocks see buying interest. TCS rallied 1 percent and Wipro rose 0.5 percent. Metals too are on buyers' radar with the Tata Steel , Sesa Sterlite, Jindal Steel and Hindalco gaining between 0.7-1.4 percent.

10:00am The market extended losses in morning trade with both the equity benchmarks surging more than one percent higher, weighed down by financials and index heavyweights ITC & Reliance Industries. The Sensex is down 219.44 points at 19696.51, and the Nifty is down 63.50 points at 5843.80. The performance of our market has nothing to do with India's fundamentals, says Viktor Shvets of Macquarie, adding, it's more to do with bond yields in the US. "If bond yields were to fall lower, around 2.2-2.3 percent, carry trade may restart and funds flow may come back. On the other hand, a reversal back to above 3 will kill markets like Indonesia, India, Brazil, South Africa, and Turkey - anybody who is capital hungry," he says.

Brent futures edged down towards USD 109 a barrel on Monday as oil production resumed in the Gulf of Mexico after a tropical storm, while lingering concerns over the US government shutdown clouded the outlook for demand. Tropical Storm Karen had prompted producers to shut in nearly two-thirds of oil output in the Gulf of Mexico. But it was downgraded to a tropical depression late on Saturday, with production starting to return to normal by the end of the weekend, reported Reuters.

10:00 am Market outlook: Second quarter earnings season will kick off this week with IT giant Infosys announcing its numbers. Sangeeta Purushottam, founder, Cogito Advisors expects export oriented sectors to post positive earnings. However, negative surprises are likely from companies which have not hedged sharp currency movements, she told CNBC-TV18 in an interview. Meanwhile, she added that the Nifty is likely to see the psychological 6000 level going ahead. "A range of 5,500 to 6,000 is something we have seen time and again. So saying that the market could go down to 5,500 is a fairly safe bet but if one looks at it from valuation perspective, if the market were to go to 12 times P/E multiples- it could easily see a level of 5,000 or 4,800 levels," she adds.

9:55 am Stock in news: Shares of Jubilant Life Sciences rallied 5.7 percent in early trade Monday after the healthcare firm decided to consolidate its pharma business under its Singapore subsidiary. The company accorded approval from board of directors to transfer two business undertakings namely active pharmaceuticals ingredients (API) and dosage forms businesses of the company, together with all assets and liabilities on a going concern basis to its Singapore arm.

9:45 am Buzzer: Shares of Bombay Dyeing jumped over 16 percent in early morning trade on Monday. Investors are excited about the stock on buzz that at least three global private equity firms are likely to acquire up to 24 percent stake jointly in Bombay Dyeing. The deal is valued at over Rs 500 crore. According to PTI sources, WL Ross, Sequoia Capital and JC Flowers are in the fray for the acquisition. "Sources said, however, that the due diligence process is in advanced stage and Wadias plan to use the sale proceeds for its realty arm Bombay Realty, which has a couple of posh projects underway and owns a huge land-bank in Mumbai," the report quoted.

9:30 am FII view: Abhay Laijawala of Deutsche Equities says India may be on course to deliver a strong September quarter. "We expect Sensex companies to post a rebound in revenue growth at 12.4 percent YoY, the highest in the past five quarters. We expect revenue growth recovery in Sensex to be led by IT services, pharma and autos," he said in an interview to CNBC-TV18. Rakesh Arora of Macquarie feels that the market is geared up for a wash out quarter but may be in for a surprise. He elaborates, "IT sector is expected to be a standout performer while cement is expected to be the worst." Arora's top picks are HCL Tech, Ranbaxy, Tata Steel and Reliance while Ambuja Cement, Ultratech and SBI are on selling radar.

The market opened the week on a tepid note. The Sensex is down 60.33 points at 19855.62, and while the Nifty is down 18.25 points at 5889.05. About 294 shares have advanced, 192 shares declined, and 26 shares are unchanged. Indian rupee fell marginally to 61.49 per dollar in early trade Monday as against Friday's closing of 61.43 per dollar. Banking stocks are dargging the indices while midacps are outperforming.

ICICI Bank, Coal India, Bharti Airtel, BHEL and HDFC are major losers in the Sensex. Meanwhile, Sesa Sterlite, Dr Reddy's Labs, Hero MotoCorp, Tata Steel and Cipla are top gainers. According to Agam Gupta of Standard Chartered, while the US government shutdown will continue to weigh on sentiment, SEBI's decision to ease and rationalise the rules around FIIs will act as a positive cue for the currency markets. "The range for the day is seen betwen 61.25-61.75/USD," Gupta says. Meanwhile, Asian indices erased opening gains on Monday on concerns about US default escalated after the latest comments from politicians showed no signs of progress to resolve the budget standoff.

In the currency space, the dollar continued to trade above 80 levels after it rose for the first time in six sessions on Friday but was still within striking distance of a recent eight-month low as the US Government closure and fears about a debt default kept investors cautious. The euro slipped to 1.35/USD and the yen trades at 97/USD. In commodities, crude trends lower this morning - with Brent holding USD 109/barrel and Nymex near USD 103.5/barrel. From precious metals space, gold prices are a tad soft this morning weighed down by the rebound in the dollar. Gold is currently trading near USD 1315/ounce.

 


 

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