Nifty ends above 8700, Sensex up 271 points; BHEL gains 5%

12 Feb 2015

3:30 pm Market close
The market ended higher with some last minute buying. The Nifty closed above 8700-level. The 50-share index was up 84.15 points or 0.9 percent at 8711.55. The Sensex ended up 271.13 points or 0.9 percent at 28805.10

3:20 pm Big deal?
Pipavav Defence & Offshore Engineering Co denied it was in talks to sell a stake to Mahindra & Mahindra Ltd, after a media report said it was close to clinching a deal.

A media report said techonology-to-automative conglomerate Mahindra would purchase a stake in Pipavav for about Rs 3000 crore (USD 481.15 million), in a phased transaction that would eventually see it own a majority share.

"There are no negotiations/agreements which the company has entered into which requires disclosure under clause 36 of the listing agreement," Pipavav said in a regulatory statement.

03:10 pm Market check
The market is clenching back its gains. The Nifty is above 8700-level. The 50-share index is up 87.35 points or 1 percent at 8714.75. The Sensex is up 241.93 points or 0.8 percent at 28775.90. About 1582 shares have advanced, 1190 shares declined, and 233 shares are unchanged.

Dr Reddy's Labs, BHEL, Cipla, GAIL and Maruti are up 2-5 percent each while HUL, Bajaj Auto, Bharti Airtel, Coal India and SBI are losers.

02:40pm Interview
Escorts posted a 21.5 percent decline in its third quarter net profit to Rs 35.7 crore impacted by lower revenue and operating income in tractor business. Total income fell 9.8 percent to Rs 1,046.4 crore during October-December quarter from Rs 1,159.6 crore in the year-ago period due to 16.6 percent drop in tractor sales volumes.

Discussing the earnings, Bharat Madan, Group Financial Controller at Escorts, said some cost-cutting exercises in the company have been bearing fruit. He feels a normal monsoon prediction this year will be positive for the industry. However, he does not see major jump in tractor sales in the near-term.

Escorts is bullish on construction. The company is hopeful that a revival in the infrastructure sector will actually push demand. ''We are expecting the topline to grow on the construction side definitely,'' Madan said.

02:20pm FII View
Dismissing the recent market correction as a ''bit of a reality check'', Richard Gibbs of Macquarie said the India economy had several positives going for it and added that foreign investors were now looking for strong leadership in the Union Budget that takes later this month.

In an interview with CNBC-TV18's Sumaira Abidi, Gibbs said he was not worried by the recent defeat of the BJP and said the central government still had a lot of political capital left with which to push its reforms agenda.

02:00pm Market Check
The market picked up pace in the last half hour as the Nifty climbed over 8650 level again led by gains in select pharma and auto stocks. The broader markets continued to outperform with the BSE Midcap and Smallcap indices rising 0.9 percent and 1.2 percent, respectively.

The Sensex rose 151.14 points to 28685.11 and the Nifty advanced 49.75 points to 8677.15. About 1537 shares have advanced, 1197 shares declined, and 244 shares are unchanged on the BSE.

Geoffrey Dennis of UBS is betting on India and China in 2015. As UBS moves to a more defensive position in Europe due to Grexit fears, he says the most secure EPS forecasts over 2015 are likely to be in India and China.

Global markets traded mixed. Investors remain cautious as concerns over Greece linger after euro zone finance ministers failed to reach a deal with Greece yesterday.

The rupee continued to trade above 62 a dollar and is headed for a fourth consecutive fall against the dollar. Bond yields remained largely unchanged ahead of the January CPI and December IIP data later today.

Dr Reddy's Labs and Cipla topped the buying list, up over 3 percent followed by Maruti Suzuki with 2.5 percent gains. Hindalco Industries climbed 2 percent after the company maintained its operating performance in Q3. Operating profit jumped 46.7 percent to Rs 923 crore and margin expanded 200 basis points to 10.7 percent in Q3 on yearly basis.

HDFC Bank, L&T, Axis Bank, Hero Motocorp, NTPC, GAIL, BHEL and Tata Power gained more than percent. However, ITC, State Bank of India, HUL, Bharti Airtel, Sun Pharma, Coal India and Tata Steel were down 0.4-1.4 percent.

ONGC lost 1.5 percent on news that the company will have to pay a fuel subsidy of Rs 8,700 crore for the December quarter. CNBC-TV18 learnt that ONGC and oil PSUs may have to pay Rs 10,900 crore in subsidy as the finance ministry has agreed to pay only Rs 5,085 crore subsidy in Q3.

1:55 pm Coal auction: Clarifying there is no setback to coal auction process, despite the Delhi High Court order to remove two Jindal Steel & Power Ltd ( JSPL ) blocks from auction, coal secretary Anil Swarup told mediapersons that the removed blocks were not part of the 23 being bid out in the first phase. A total of 5 blocks will be excluded from the auction process due to HC orders, he said. On Wednesday, the Delhi High Court prevented the sale of two mines of JSPL which were previously reserved for non-regulated industries (steel and cement) but later shifted to the regulated sector (power).

The committee handling the auction process had changed the end use of about 20 coal blocks to the power sector, which straightaway barred previous owners from bidding for the blocks. JSPL had challenged the decision to alter the end use of its Gare Palma IV/6 and Utkal B1 and B2 mines in Chhattisgarh and Odisha, saying it had invested more than over USD 4.80 billion in setting up plants fed by the mines.

1:45 pm Market outlook: Independent market expert Dhiraj Agarwal sees a high risk of correction post-Budget. According to him, the Nifty may even break 8000 support, slipping to 7500 level, if the Budget disappoints. However, on the upside he sees the index breaking 9000 on a satisfactory verdict. The market needs public spending at this point, said Agarwal, adding that India looks solid from a 3-year horizon, but the investment cycle needs to pick up. He remains bullish on IT.

1:30 pm Result: Aluminium major Hindalco Industries missed street expectations on all counts on Thursday. Net profit grew 7.5 percent year-on-year to Rs 359 crore, impacted by higher expenses.

Profit was expected at Rs 420 crore on revenue of Rs 8,730 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Revenue grew 17.7 percent to Rs 8,472 crore during October-December quarter from Rs 7,201 crore in same quarter last year, driven largely by aluminium business.

Revenue from its aluminium business climbed 47 percent year-on-year to Rs 3,636 crore with EBIT margin rising 370 basis points while copper business reported a 3 percent growth in revenue at Rs 4,975 crore with EBIT margin improving 180 basis points.

The market is under pressure as the Sensex is down 82.78 points at 28451.19. The Nifty slips 15.45 points at 8611.95. About 1416 shares have advanced, 1183 shares declined, and 243 shares are unchanged.

Cipla is up 4 percent while Maruti, Dr Reddy's Labs, Hindalco and Hero MotoCorp are top gainers in the Sensex. Among the losers are Tata Steel, Bharti Airtel, SBI, Sesa Sterlite and ITC.

Japan's Nikkei share average ended at its highest level in more than 7.5 years as the weak yen boosted exporters such as Toyota Motor Corp and Sony Corp, while investors awaited the outcome of Greek debt negotiations.

The Nikkei benchmark gained 1.9 percent to 17,979.72, the highest closing level since July 2007.

Meanwhile, global gold demand in 2014 declined marginally by 4 percent to 3,924 tonnes compared to the previous year even though 2013 was an outstanding year where the consumer demand had reached a record high, says the World Gold Council (WGC).

The overall gold demand stood at 4,087.6 tonnes in 2013, according to WGC 'Gold Demand Trend 2014' report. "The year 2014 was a year of stabilisation and innovation in the gold market with annual gold demand down by just 4 percent at 3,924 tonnes after the record-breaking level of buying seen in 2013.

12:30pm Bank of India disappoints
Bank Of India's third quarter net profit fell 70.4 percent year-on-year to Rs 173.4 crore. Higher provisions, slow growth in net interest income and lower other income & operating profit impacted the profitability during the quarter.

The public sector lender missed street expectations on all parameters. Profit was expected at Rs 818.6 crore and net interest income of Rs 3,148.3 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.

Net interest income increased 2.3 percent to Rs 2,780.2 crore during October-December quarter from Rs 2,719 crore in same quarter last year. Net interest income is the difference between interest earned and interest expended.

Other income (non-interest income) slipped 1.6 percent Y-o-Y to Rs 1,079.7 crore and operating profit declined 13 percent to Rs 1,865.4 crore in the quarter gone by.

Provisions for bad loans jumped 12.6 percent year-on-year (up 64 percent quarter-on-quarter) to Rs 1,580.7 crore during the quarter with the provision coverage ratio at 56.62 percent as on December, 2015. The stock declined 5.5 percent.

12:00pm Market Check
The market remained under pressure in noon trade. The Sensex fell 80.97 points to 28453 and the Nifty declined 16.75 points to 8610.65 as banking, FMCG and metal stocks lost ground.

The broader markets outperformed yet again, the BSE Midcap and Smallcap indices gained 0.9 percent each. About 1431 shares have advanced, 1065 shares declined, and 217 shares are unchanged on the Bombay Stock Exchange.

ONGC declined 0.5 percent on news that the company will have to pay a fuel subsidy of Rs 8,700 crores for the December quarter. Media reports suggested that ONGC and oil PSUs may have to pay Rs 10,900 crore in subsidy as the finance ministry has agreed to pay only Rs 5,085 crore subsidy for the December quarter.

Mahindra & Mahindra gained 0.2 percent along with Pipavav Defence (up 9 percent) on reports that Mahindra group is planning to pick up 25-30 percent stake in the defence company at Rs 66 per share, valuing the deal at Rs 3000 crores. Pipavav Defence board meet is slated for tomorrow.

India Cements jumped 14 percent after the company approved the proposal for re-organisation of Chennai Super Kings franchise. N Srinivasan says the ownership of Chennai Super Kings will go to shareholders now.

11:55 am Result: Bank Of India's third quarter net profit fell 70.4 percent year-on-year to Rs 173.4 crore. Higher provisions, slow growth in net interest income and lower other income & operating profit impacted the profitability during the quarter.

11:45 am Poll: Coal India's third quarter profit after tax is expected to fall 6.5 percent year-on-year to Rs 3,640 crore, according to the average of estimates of analysts polled by CNBC-TV18.

Net sales is seen rising 4.3 percent to Rs 17,650 crore during October-December quarter from Rs 16,928 crore in the year-ago period. Operating profit may slip 4.9 percent on yearly basis to Rs 3,902 crore and margin may decline 210 basis points to 22.1 percent in the quarter gone by.

11:30 am Buzzing: Shares of Bosch surged 7 percent intraday on addition to MSCI India and the MSCI emerging market index. Meanwhile, Hathway Cable is under pressure as it is deleted from the MSCI Small Cap India Index.

India's weight in the MSCI emerging market index has been increased by 8-10 basis points (bps) post MSCI's quarterly index review, said analysts. The changes in constituents of the MSCI indices will take place on February 27.

Experts believe that India can expect an incremental inflow of USD 150-200 million due to the likely increased weightage. Weight of ACC, Coal India and Hero MotoCorp could also rise in MSCI India index, they said.

The market is in the red as the Sensex is down 15.84 points at 28518.13. The Nifty is up 5.30 points at 8632.70. About 1407 shares have advanced, 828 shares declined, and 203 shares are unchanged.

Maruti, Hindalco, Dr Reddy's Labs, Hero Motocorp and GAIL are top gainers in the Sensex. Among the losers are ITC, SBI, Bharti, Coal India and Sesa Sterlite.

Oil prices edged higher but gains were capped owing to concerns about surging stockpiles in the United States, the world's top consumer, analysts said. US benchmark West Texas Intermediate for March delivery rose 64 cents to USD 49.48 while Brent crude for March gained 34 cents to USD 55.00 in mid-morning trade.

Oil prices have been under pressure for months, plunging about 60 per cent to just over USD 40 a barrel between June and the end of January.

Globally, Asian markets are mixed today as investors continue to monitor negotiations between Greece and its Euro zone creditors.

10:59am Market Expert
Independent market expert Dhiraj Agarwal sees a high risk of correction post-Budget. According to him, the Nifty may even break 8000 support, slipping to 7500 level, if the Budget disappoints. However, on the upside he sees the index breaking 9000 on a satisfactory verdict.

The market needs public spending at this point, said Agarwal, adding that India looks solid from a 3-year horizon, but the investment cycle needs to pick up. He remains bullish on IT.

10:30am Buzzing Stocks
Power Grid gained 1.5 percent after reporting strong numbers with total income up 18.2 percent at Rs 4,354 crore, margin up 170 basis points to 85.9 percent while PAT up 17.9 percent at Rs 1,229 crore. The company continues to deliver strong execution and strong commissioning of assets during last 1 year.

Zee Entertainment rallied 3.5 percent after a large trade was seen on the NSE in which 22 lakh shares changed hands in 6 block deals.

India Cements gained 11 percent after they delivered a good operational performance with margins expanding 170 basis points to 15.7 percent in Q3. Additionally they have approved a proposal for reorganisation of Chennai Super Kings Cricket limited and the ownership of the franchise will be held by shareholders of the India Cements.

Grasim Industries rose 0.9 percent and Aditya Birla Chemicals rallied 3.7 percent after Grasim proposed the acquisition of Aditya Birla Chemicals with a swap ratio of 1 share of Grasim for every 16 shares of Aditya Birla Chemicals held. The swap ratio is favouable for AB Chemicals shareholders. Edelweiss says they are positive on the merger.

Fortis Healthcare climbed 0.9 percent after Rakesh Jhunjhunwala bought over 34 lakh shares in the company yesterday while Claris Lifesciences gained 20 percent on reports of many Indian companies such as Zydus Cadila, Lupin and Cipla along with global majors such as Pfizer being interested in the company's sterile injectibles business.

10:00am Market Check
The market remained in a consolidation mode ahead of December industrial output and January CPI data (to be announced later today). The broader markets outperformed equity benchmarks with the BSE Midcap and Smallcap indices gained 0.8 percent each.

The Sensex fell 22.71 points to 28511.26 and the Nifty rose 3.35 points to 8630.75. More than two shares advanced for every share declining on the Bombay Stock Exchange.

The January consumer price index (CPI) data will be the first CPI data on a new base. The government has revised the CPI data base year from 2010 to 2012 couple of weeks ago due to which there are varied expectations. The CPI data for January is likely to be in the range of 5.3 to 5.8 percent on the upside against 5 percent reported in December.

The index of industrial production (IIP) data for December may come in at around 1.8 to 2 percent against 3.8 percent on a month-on-month basis, according to a CNBC-TV18 poll.

9:55 am Poll: Coal India's third quarter profit after tax is expected to fall 6.5 percent year-on-year to Rs 3,640 crore, according to the average of estimates of analysts polled by CNBC-TV18.

9:45 am Market check: The market has gone flat now. TheSensex is up 14.40 points at 28548.37 and the Nifty is up 14.70 points at 8642.10. About 1105 shares have advanced, 582 shares declined, and 154 shares are unchanged.

Hero Motocorp, Cipla, Dr Reddy's Labs, Hindalco and MAruti are top gainers in the Sensex. Among the losers are BHEL, Bharti Airtel, SBI, ITC and Axis Bank.

9:30 am Big boost: Shares of Pipavav Defence rallied over 15 percent intraday as reports suggest that Mahindra & Mahindra is eyeing a stake in the company. According to media reports, M&M is likely to purchase around stake in Pipavav Defence for around Rs 3000 crore at Rs 66 a share in a three-phase deal.

The deal may value Pipavav at an enterprise value of Rs 12000 crore ( with a debt of Rs 6800 crore) and the promoters own 45 percent stake in the company. It is learnt that board of Pipavav Defence is expected to meet on February 13 to take a decision on the deal.

Pipavav Defence is India's first private company to get license and contracts to build warships for the Indian Navy. It also has a joint venture with Mazagon dock, which is largest defence shipyard. Its current order book stands at Rs 9,000 crore and has further bid for orders worth Rs 30,000 crore from India's defence.

The market is showing strength in early trade. The Sensex is up 126.55 points at 28660.52 and the Nifty is up 49.55 points at 8676.95. About 450 shares have advanced, 116 shares declined, and 124 shares are unchanged.

Hindalco, M&M, ICICI Bank, SBI and Dr Reddy's Labs are top gainers while BHEL, Infosys, ITC and Bajaj Auto are losers in the Sensex.

The Indian rupee slipped in the early trade. It has opened lower by 14 paise at 62.39 per dollar versus 62.25 Wednesday. Euro declines led by a barrage of conflicting headlines that left investors no clearer on whether Greece may yet secure a new debt agreement with its European lenders.

Mohan Shenoi of Kotak Mahindra Bank said, "Strong US data suggests that the odds of a Fed rate hike in June is increasing. Consequently dollar is rallying against major currencies Rupee is also headed towards gradual depreciation. USD-INR is likely to trade today in a range of 62.20-62.50/dollar.''

Stocks in US closed narrowly mixed following a choppy day of trading with the Dow recovering from a triple-digit loss. Europe closed in the red, while Asia was mixed in morning trade with Japan up nearly 2 percent as dollar-yen hit a near six-week high.

Greece's finance minister is expected to unveil new reform proposals to make up for the ones that the New Greek government wants to scrap

Athex finished down around 4 percent. In stocks, Thomas Cook shares closed down 5.5 percent after the leisure tourism group reported tougher trading conditions in Europe in the first quarter.

In other asset classes, Brent crude slipped to USD 55 per barrel pressured by an industry report saying US crude stocks rose from a record high.

Meanwhile, from precious metals space, gold prices slipped to USD 1220 an ounce.