Nifty ends above 8400, Sensex flat; Tata Steel down 5%

Equity benchmarks drifted lower in dull trade Wednesday, as the market awaits fresh triggers. The 30-share Sensex closed the day at 27809.35, down 27.86 points or 0.10 percent over the previous close. The Nifty closed at 8421, down 2.25 points over the previous close.

Sentiment has improved over the last week as the main indices have recouped much of the losses suffered earlier this month.

However, foreign funds have not been big buyers in the recent rally, and that is causing many to doubt its durability.

Also, the mood in corporate India is pretty much bleak one year into the NDA government, with the investment cycle yet to show signs of revival.

The best case situation is that we consolidate plus-minus 100-200 points on the Nifty at the current levels but the downward bias still remains because by design as far as the government and the RBI policy is concerned, the currency will depreciate and as soon as we see that big tick coming in on the rupee, we will see the market getting jittery, Sanjay Dutt of Quantum Securities said in an interview to CNBC-TV18 today.

Power, oil & gas, metal and FMCG shares were among the key laggards, while capital goods, auto and realty shares mostly fared well.

According to Sebi data, foreign institutional investors have net sold about Rs 4350 crore worth of shares so far this month.

"I think in a way it (FII selling) is good because it puts more of an onus on Indian policy makers, not to just count on foreign money showing up without questions asked, but foreign money showing up with expectations, Sanger said in an interview to CNBC-TV18.

Mutual funds have net bought around Rs 2500 crore so far this month, but brokers say domestic institutions by themselves will not be able to take the market higher. At best, they may be able to provide a floor for the market.

The Life Insurance Corporation of India has net bought roughly Rs 8000 crore of stocks since April this year, the Mint newspaper reported on Tuesday.

Quarterly earnings continue to be more of misses than hits. Bajaj Auto today reported an 18.5 percent year-on-year decline in its March quarter net profit to Rs 622 crore.

The stock closed with 7 percent gain. Other top gainers in the Sensex were Coal India, Axis Bank, Sun Pharma and L&T. Reeling under its Q4FY15 disappointing results, Tata Steel lost 5 percent. Vedanta, Cipla, ICICI Bank and ITC were other laggards.

3:30 pm Market close: The market ended on a tepid note. The Sensex ended down 27.86 points or at 27809.35 and the Nifty slipped 2.25 points at 8421.00. About 1180 shares advanced, 1513 shares declined and 182 shares were unchanged. Tata Steel ended with 5 percent loss. Vedanta fell 3 percent while Cipla, ICICI Bank and ITC were major laggards. Bajaj Auto was up 7 percent while Coal India, Axis Bank, L&T and HUL were gainers.

2:50 pm Interview: The founder and executive vice chairman of Kotak Mahindra Bank said technological innovation does offer huge business opportunities for India's banking sector. But it could also change the face of the industry. "I am excited, but very challenged. I keep wondering at night, will I have a bank the next morning, or will some technology company be doing banking without needing a bank?" he told CNBC. Indian consumers are quickly moving online and local banks will have to do more, to ride the digital trend, Kotak said.

2:30 pm Buy: Vehicle maker Mahindra and Mahindra said it would buy a 33 percent voting stake in the agricultural machinery-making unit of Mitsubishi Heavy Industries Ltd for USD 25 million.

The investment is being made through the issue of common shares and class A non-voting shares of Japan's Mitsubishi Agricultural Machinery Co Ltd, and the deal is expected to close by Oct. 1, the companies said in a joint statement.

Mitsubishi Agricultural makes farm equipment such as tractors, power tillers, rice planters and combine harvesters for sale globally. It brought in about USD 408 million in revenue for the fiscal year 2015.

Mahindra, which is the world's largest maker of tractors by volume, said the deal would help both companies cut cost and improve their supply chain.

The Sensex is down 29.78 points at 27807.43 and the Nifty is down 13 points at 8410.25. About 1065 shares have advanced, 1477 shares declined, and 176 shares are unchanged.

Bajaj Auto is up 5 percent, Coal India, Axis Bank, Sun Pharma and L&T are top gainers in the Sensex. Among the losers are Tata Steel, Vedanta, Cipla, Tata Power and ITC.

Net profit of Bajaj Auto slipped 18.5 percent in quarter ended March 2015 to Rs 621.6 crore from Rs 762.6 crore in corresponding quarter last fiscal. During the quarter, its total income fell 3.9 percent at Rs 4,739 crore compared to Rs 4,932.3 crore year-on-year (Y-o-Y). Weak volumes dragged the companys growth. Volumes declined 16.3 percent at 7.8 lakh units (Y-o-Y).

Hit by other expenses, its reported margins decreased 120 basis points on yearly basis. Other expenses, rising 15 percent (Y-o-Y) to Rs 463.4 crore, also impacted profits.

Midcap index is down 0.6 percent from previous close.

1:30 pm Boardroom: Bharat Forge is expecting revenues of USD 100 million from its aerospace vertical over the next 2-3 years, the companys Executive Director Amit Kalyani told CNBC-TV18. He expects a double digit growth in overall revenues this year given strong order book in North America and back home, robust growth in the passenger car segment. Kalyani expects the companys local operations to generate Rs Rs 7000 crore of revenues by FY17-18, an increase of around 50 percent.

The market is flat as the Sensex is down 34.20 points at 27803.01. The Nifty is down 9.85 points at 8413.40. About 995 shares have advanced, 1433 shares declined, and 141 shares are unchanged.

Coal India and Bajaj Auto are up 4 percent each. Axis Bank, Tata Motors and HUL are top gainers in the Sensex. Among the losers are Tata Steel, Vedanta, Cipla, ITC and Tata Power.

India is not going to be the only game in emerging markets forever, in fact last year was an unusual situation, says Arvind Sanger of Geosphere Capital Management.

The recent volatility seen in the market with FII outflows is more normal, he says. "I think in a way it's good because it puts more of an onus on Indian policy makers, not to just count on foreign money showing up without questions asked, but foreign money showing up with expectations," he told CNBC-TV18.

On the policy front, he does not expect GST to be transformational in the short-term. According to Sanger, it will probably take over 3-4 years for GST to have a meaningful effect.

12:50 pm Nod: Glenmark Pharmaceuticals said it has been granted tentative approval by the US health regulator to sell Rufinamide, which is used to treat seizures caused by Lennox-Gastaut syndrome. Lennox-Gastaut syndrome is a form of childhood-onset epilepsy. "Glenmark has been granted tentative approval last week by the United States Food and Drug Administration (USFDA) for its Rufinamide tablets," the company said in a BSE filing.

The approval has been granted for the tablets in 200 mg and 400 mg strengths. Rufinamide is a therapeutic equivalent of Banzel tablets of Eisai. Glenmark further said: "Under the terms of a settlement agreement between Glenmark and Eisai, Glenmark will be permitted to market this product in the US on May 30, 2022 or potentially earlier under certain circumstances."

12:30 pm Brokerage view: Analysts are disappointed on Tata Steel and have reduced target price on the stock.

Credit Suisse maintains underperfom rating with a lower target price of Rs 210 per share on the stock stating precipitous drop in Indian profitability is alarming. It has cut EBITDA per tonne estimates for FY16-17 to USD 135 per tonne to reflect the rise in costs and lower pricing. 

Macquarie also maintains underperform rating with a target of Rs 307 per share. It feels weak domestic steel prices and declining global spreads will keep steel margins under pressure. "Complete impairment of long steel assets is a precursor to asset sale and will be a positive step even at token value," it adds.

The market has recovered slightly but is still under pressure. The Sensex is down 58.46 points at 27778.75 and the Nifty is down 15.40 points at 8407.85. About 931 shares have advanced, 1385 shares declined, and 146 shares are unchanged.

After announcing its March quarter results, Bajaj Auto is up 4 percent. Net profit of Bajaj Auto slipped 18.5 percent in March 2015 to Rs 621.6 crore from Rs 762.6 crore in corresponding quarter last fiscal. During the quarter, its total income fell 3.9 percent at Rs 4,739 crore compared to Rs 4,932.3 crore year-on-year (Y-o-Y).

EBITDA was down 10.1 percent at Rs 838 crore versus Rs 931 crore (Y-o-Y). Operating margin was a big disappointment as it fell 17.7 percent against 18.9 percent on yearly basis. 

Meanwhile, Coal India, Axis Bank, Tata Motors and HUL are other top gainers in the Sensex. Among the losers are Tata Steel, Vedanta, Cipla, ITC and Tata Power.

11:50 am Result poll: Voltas is expected to report net profit at Rs 91 crore, down 9.4 percent in the qaurter ended March 2015 from Rs 100.4 crore in year-ago period. Adjusted net profit is seen up 8.8 percent at Rs 91 crore versus Rs 83.6 crore in year-ago period, according to a CNBC-TV18 poll. Total income, during the quarter, is seen marginally down 0.8 percent at Rs 1,451 crore compared to Rs 1,463 crore (Y-o-Y). 11:30 am Buzzing: Real estate developer, Godrej Properties gained more than 4 percent intraday as it sold its entire launched inventory at Godrej Icon in Gurgaon.

The company has sold over 200 apartments, with an area over 400,000 sq. ft. in just three weeks at the launch of its residential project, Godrej Icon, in Sector 89A/88A, Gurgaon.

Spread over 9 acres, Godrej Icon consists of 9 towers including a 32 storey Iconic tower. Godrej Icon is being developed as a joint venture with Oasis Build home Private Limited.

The market is still in red as the Sensex is down 53.89 points at 27783.32 and the Nifty is down 16.00 points at 8407.25. About 857 shares have advanced, 1189 shares declined, and 151 shares are unchanged.

FMCG and metal stocks are dragging the market. Tata Steel is down 5 percent while Vedanta, Cipla, ITC and GAIl are major laggards in the Sensex. Among the gainers are Coal India, Axis Bank, Bajaj Auto, Tata Motors and L&T.

Oil prices rose in Asia after a decline in US petroleum stockpiles and production boosted hopes of an easing in the global supply glut, analysts said. US benchmark West Texas Intermediate (WTI) for July deliver rose 10 cents to USD 59.08 while Brent crude for July gained 16 cents to USD 65.19 in late-morning trade.

Daily production dropped 112,000 barrels a day to 9.26 million barrels a day, after a 5,000-barrel increase in the previous week. Dealers have been hoping that a slowdown in US output could help ease the build up of global crude reserves, which was a key reason for the collapse in prices of more than 50 percent between June and January.

10:50 am Poll: Britannia is likely to report consolidated net profit at Rs 148 crore, rising 37.8 percent in Q4 from Rs 107.7 crore in corresponding quarter last fiscal. According to a CNBC-TV18 poll, total income is likely to be up 12.5 percent at Rs 2,040 crore compared to Rs 1,812 crore on yearly basis. Analysts polled by CNBC-TV18 expect EBITDA to be up 32.3 percent at Rs 223 crore versus Rs 168 crore year-on-year while operating profit margins may jump 160 basis points (bps) at 10.9 percent against 9.3 percent.

10:30 am Interview: If there's one thing that keeps Indian banker Uday Kotak awake at night, it is the threat of disruptive digital technology. The founder and executive vice chairman of Kotak Mahindra Bank said technological innovation does offer huge business opportunities for India's banking sector. But it could also change the face of the industry. "I am excited, but very challenged. I keep wondering at night, will I have a bank the next morning, or will some technology company be doing banking without needing a bank?" he told CNBC. Indian consumers are quickly moving online and local banks will have to do more, to ride the digital trend, Kotak said.

10:10 am Market check: The Sensex is down 90.78 points at 27746.43, and the Nifty is down 34.40 points at 8388.85. About 778 shares have advanced, 979 shares declined, and 108 shares are unchanged.

The market is flat with negative bias. The Sensex is down 26.33 points at 27810.88 and the Nifty is down 9.60 points at 8413.65. About 827 shares have advanced, 827 shares declined, and 106 shares are unchanged.

Coal India, Tata Motors, Axis Bank, L&T and TCS are top gainers in the Sensex. Among the losers are Tata Steel, Cipla, Vedanta, Tata Power and ITC.

Asian stocks treaded water early, with overnight Wall Street losses acting as a drag, while the dollar held to broad gains after minutes from the Federal Reserve's April minutes contained no major surprises.

The closely-watched Fed meeting minutes showed many officials saw it as premature to hike interest rates in June, which did not take the markets by surprise.

The US economy has shown signs of strength - the latest being this week's upbeat housing data - but overall recovery has not been as robust as expected. The economy grew by a modest 0.2 percent in the first quarter.

9:50 am Market outlook: The best case scenario for Nifty is to consolidate at 8300-8500 range, but there is a probability of it slipping to 7900 levels, says Sanjay Dutt, Director, Quantum Securities. Corporate balance sheets continue to remain under pressure and it will be the next big trigger for the market, he adds. According to him, a 25 basis points cut by the Reserve Bank in its June 2 policy is already priced in. Dutt feels even if RBI lowers rates, the market will sell into rally. He is sensing lack of investor interest in the market, which he adds will come back at around 7900-odd levels.

9:40 am Market check: The Sensex is down 28.78 points at 27808.43 and the Nifty is down 15.25 points at 8408.00. About 739 shares have advanced, 693 shares declined, and 115 shares are unchanged.

Tata Steel is still down 4 percent, Cipla, Tata Power, Vedanta and Bharti Airtel are major laggards in the Sensex. Among the gainers are Coal India, Axis Bank, Tata Motors, Infosys and L&T.

9:30 am Result poll: Bajaj Auto is expected to report net profit at Rs 652 crore in Q4 FY15, down 14.6 percent from Rs 764 crore in corresponding quarter last fiscal, according to a CNBC-TV18 poll. Revenue is also likely to decline, for the first time in many quarters, due to big drop in volumes across segments.

Analysts estimate, Bajaj Auto's Q4 revenue to fall 7.7 percent at Rs 4553 crore compared to Rs 4932.2 crore in year-ago period. In the last quarter, the auto manufacturer saw a revenue growth of 10.2 percent while it was 15.2 percent and 7 percent in Q2 and Q1 respectively. As per the poll, EBITDA is seen down 5 percent at Rs 887 crore versus Rs 931.7 crore year-on-year (Y-o-Y) while operating profit margin (OPM) may come in at 19.5 percent against 18.9 percent. (Y-o-Y). EBITDA margins may decline 60 basis points (bps) due to negative operating leverage on sequential basis.

The market has opened flat as the Sensex is up 53.47 points at 27890.68. The Nifty is up 11.25 points at 8434.50. About 320 shares have advanced, 126 shares declined, and 68 shares are unchanged.

Tata Steel tanks 4 percent after it posted a very disappointing March quarter results. Bajaj Auto, Hero, Vedanta and Tata Power are other losers in the Sensex. Gainers are Coal India, SBI, M&M, ONGC and Axis Bank.

The Indian rupee gained in the early trade. It has opened higher by 9 paise at 63.73 per dollar versus 63.82 Wednesday. Dollar hit a three-week high against the euro, extending a rebound rally supported by European Central Bank plans to front-load its bond buying program in a move to keep interest rates low. The dollar index holds above the 95 mark.

Mohan Shenoi of Kotak Mahindra Bank said, "April FOMC minutes were dovish casting doubts about Fed rate hike in June. Mixed data emanating from US is keeping dollar in a range against major currencies."

Meanwhile, Asian equities opened mixed. China flash Markit/HSBC purchasing managers' index (PMI) for May, is scheduled for release later in the day and is estimated to come in at 49.3, according to a Reuters poll, signalling that the Asian economic giant's massive factory sector remains in contraction.

Japan's Nikkei is trading at the highest level since end-June 2000, which is a 15 year high, while Korea's Kospi has come off from the three-week closing high that was witnessed on Wednesday. The Taiwanese index is the big underperformer today.

In the US, stocks closed narrowly mixed, failing to hold record levels, as the US Federal Reserve minutes mostly confirmed market expectations for a rate hike in the second half of the year.

The Fed minutes showed policymakers mostly brushed aside the wobbly start the US economy has had in 2015, attributing the lack of growth to "transitory" factors that will abate soon. Only a few policymakers supported a June rate hike.

European stocks, meanwhile, ended higher but struggled to gain momentum amid worried about cash-strapped Greece.

In commodities, oil prices pared gains after the US government data showed weekly oil inventories fell more than expected but not as much as a Tuesday industry report indicated.
From precious metals space, gold prices held steady around USD 1210 an ounce.