Nifty ends below 8450, Sensex falls over 150 points; pharma bleeds
04 Nov 2016
3:30 pm Market closing: The market has ended in red for 5th consecutive day. The Sensex was down 156.13 points or 0.6 percent at 27274.15, and the Nifty slipped 51.20 points or 0.6 percent at 8433.75. About 698 shares have advanced, 2205 shares declined, and 119 shares are unchanged.
Sun Pharma, Dr Reddy's Labs, Lupin, Hero and Coal India were top losers while ITC, Wipro, M&M, HUL and ICICI Bank were losers in the Sensex.
2:59 pm Market Update: Benchmarks indices fell further with the Sensex down 207.11 points at 27223.17 and the Nifty down 76.40 points at 8408.55.
2:56 pm Earnings: Watch and jewellery maker Titan Company missed analysts' expectations on topline and bottomline front but margin was ahead of estimates. Profit grew by 23.5 percent year-on-year to Rs 180.7 crore in the quarter ended September 2016.
Revenue during the quarter fell 0.2 percent to Rs 2,675.7 crore on yearly basis, impacted by degrowth in watch business and muted growth in jewellery segment.
EBITDA (earnings before interest, tax, depreciation and amortisation) surged 36.8 percent to Rs 276.3 crore and margin expanded by 280 basis points to 10.3 percent compared with year-ago period.
2:45 pm Interview: At a time when the automotive world is bullish on self driving cars, Maruti Suzuki Chairman R C Bhargava says such autonomous vehicles will not work in India as "nobody obeys any of the driving rules".
"I would love to see people try and put that technology to use in the Indian driving conditions," Bhargava said.
At an interaction here late last evening, he was asked about his views on self driving cars and how were they likely to impact the traditional automobile industry.
"I think no technology will work here when nobody obeys any of the driving rules, no nobody obeys any of the systems which are there. How will you devise a technology that will predict customer behaviour, nobody can predict customer behaviour?" he said.
Asked about the impact of taxi aggregators like Ola and Uber on the automobile manufacturers, Bhargava said they were good for the industry.
2:35 pm Budget on Feb 1?: Finance Ministry is gearing up to present the Budget for next fiscal around February 1, advancing the scheduled date by a month so as to complete the entire process by March 31, and preparations for it are "very much under control", says a top official.
"There are three major changes that we are undertaking for the next year (Budget). First presentation of Budget is advanced by about a month. We expect Budget to be presented around February 1," Economic Affairs Secretary Shaktikanta Das said in an interview to DD News.
Besides, doing away with the plan and non-plan expenditure and replacing it with the new classification would be revenue and expenditure, he said, adding that the third is merger of Railway Budget with the General Budget.
The pre-Budget meetings for the current year's for revised expenditure estimates as well as for the next Budget's estimates have already started, he said.
2:20 pm Europe update: European stocks were lower, following declines overnight on Wall Street as the closeness of the US elections continues to rattle nerves in the market. France's CAC, Germany's DAX and Britain's FTSE were down 0.6-1 percent.
Investors had largely priced in a Hillary Clinton win in the election, but nerves creeped in when news broke last week that the FBI was investigating new emails linked to the Democratic candidate.
Investors globally will also be keeping a keen eye on the October nonfarm payrolls number released Friday which will give another indication on the health of the U.S. economy. It could also create some clarity about whether the Federal Reserve could raise rates later this year.
2:00 pm Market Check: Benchmark indices as well as broader markets extended losses in afternoon trade with the Sensex shedding more than 200 points intraday ahead of crucial event next week. The US presidential elections will be scheduled for November 8. Foreign investors have also been reducing their exposure to emerging markets, including India ahead of this event.
The 30-share BSE Sensex was down 188.70 points at 27241.58 and the 50-share NSE Nifty dropped 74.10 points to 8410.85. The BSE Midcap index shed 1.6 percent and Smallcap lost 2.4 percent on weak breadth. About four shares declined for every share rising on the BSE.
Sun Pharma, Dr Reddy's Labs and Lupin continued to tumble, losing 4.5-6 percent on fears of US probe in price collusion. Reliance Industries, HDFC Bank, HDFC, Maruti and Hero Motocorp were down 1-3.6 percent.
Larsen & Toubro dropped 2 percent after the government offloaded 1.6 percent stake in early trade.
However, ITC retained its top position in the buying list, up 4 percent after the GST panel fixed rates.
1:55 pm IT sector: In a setback for the Information Technology companies (IT), Nasscom is likely to revise the sector's revenue growth guidance downwards, reports CNBC-TV18, quoting sources. CNBC-TV18 further reported that the revision will be in the range of 8-10 percent as compared to 10-12 percent projected in the beginning of this financial year. The revision in growth guidance is due to uncertain global environment and softening of Banking, Financial services and Insurance (BFSI) sector. Nasscom is likely to hold a CEO rountable meeting before November 15 to discuss mid-year performance.
1:45 pm Market outlook: Speaking to CNBC-TV18 Nilesh Shah, MD of Kotak Mahindra AMC advises investors to stock up on pharma stocks over the next 6-12 months as he believes they will outperform in 3-4 years. The US is the largest market going forward. It is a country where population is ageing and the cost of medicine is going up and India is a formidable player in the market. This is the opportunity for long-term investors,'' he said. On GST tax slabs, he said that it will bring in more efficiency, reduce logistics costs. However, there are a few contentious issues that need to be sorted out, he said.
1:30 pm New listing: PNB Housing Finance, the subsidiary of public sector lender Punjab National Bank, is set to debut its shares on November 7. The issue, which was opened for subscription during October 25-27, received an overwhelming response from investors as it was oversubscribed by 29.55 times. The reserved portion of qualified institutional buyers was oversubscribed 37.33 times, non-institutional investors 86.17 times and retail investors 1.35 times.
The market is still sluggish as the Sensex is down 59.57 points or 0.2 percent at 27370.71. The Nifty is down 27.95 points or 0.3 percent at 8457.
About 635 shares have advanced, 2105 shares declined, and 117 shares are unchanged.
ITC, M&M, HUL, Axis Bank and Asian Paints are top gainers while Sun Pharma, Dr Reddy's Labs, Lupin, Coal India and Hero MotoCorp arlosers in the Sensex.
Gold eased on Friday as the dollar firmed ahead of US jobs data, but looked set for a weekly gain of 2 percent, while investor appetite for the safe-haven asset stayed intact over signs of a close-run US presidential election.
The dollar index, inched up about 0.1 percent to 97.259, but remained captive to uncertainty around the election race.
The Fed kept interest rates unchanged after a two-day policy meeting earlier in the week and signalled it could hike rates in December.
Ever since the FBI announced investigation into Democratic candidate Hillary Clinton's emails, uncertainty over the outcome of the election has peaked, with markets not ruling out the possibility of Republican Donald Trump bagging a victory.
12:59 pm Market Update: Equity benchmarks remained under pressure as the Sensex was down 83.64 points at 27346.64 and the Nifty down 34.30 points at 8450.65.
About 2116 shares declined against 592 advancing shares on the BSE.
12:50 pm Listing: PNB Housing Finance, the subsidiary of public sector lender Punjab National Bank, is set to debut its shares on November 7. It has fixed the issue price at higher end of price band of Rs 750-775 per share.
The issue, which was opened for subscription during October 25-27, received an overwhelming response from investors as it was oversubscribed by 29.55 times.
The reserved portion of qualified institutional buyers was oversubscribed 37.33 times, non-institutional investors 86.17 times and retail investors 1.35 times.
PNB Housing Finance has raised Rs 3,000 crore through this issue, including Rs 894 crore raised from anchor investors.
The company will use issue proceeds from share sale mainly towards augmenting its capital base to meet future capital requirements.
12:40 pm Oil steady: Oil prices edged up, stabilising after five straight days of falls, although a surge in US crude inventories and doubts over the ability of producers to coordinate output cuts continued to keep a lid on the market.
Brent crude was up 1 cent at USD 46.36 per barrel. US West Texas Intermediate (WTI) futures rose 3 cents to USD 44.67 a barrel.
12:20 pm CLSA on GST: Mahesh Nandurkar of CLSA says with another important step taken on November 3, India moves a step closer to GST implementation.
The GST council has agreed on a five-slab structure. This is a huge simplification from the nearly 100+ tax rates that exist today, he feels.
He says the council has moved product categories to the nearest tax slabs and hence the positive and negative impact will likely be limited to 3-4 percent.
According to him, GST implementation by April-July 2017 appears more certain now.
Nandurkar says on the basis of limited information released by the Government, preliminary analysis suggests that consumer staples such as HUL and Colgate, consumer durables like Havells and Crompton and multiplex players should benefit. Services like airlines, telecom, insurance; textiles and Titan should be negatively impacted. ITC could see a relief rally.
12:00 pm Market Check: Equity benchmarks continued to consolidate as investors maintained cautious stance ahead of crucial event - the US presidential elections that scheduled for November 8, especially after the polling gap between Hillary Clinton and Donald Trump narrowed. However, the GST rate decision failed to revive sentiment.
The 30-share BSE Sensex was down 56.96 points at 27373.32 and the 50-share NSE Nifty fell 28.25 points to 8456.70 while the broader markets underperformed benchmarks for third consecutive session today.
The BSE Midcap and Smallcap indices were down 1-2 percent on weak market breadth. More than four shares declined for every share rising on the exchange.
11:55 am IT in soup? In a setback for the Information Technology companies (IT), Nasscom is likely to revise the sector's revenue growth guidance downwards, reports CNBC-TV18, quoting sources.
It is learnt that the revision will be in the range of 8-10 percent as compared to 10-12 percent projected in the beginning of this financial year.
The revision in growth guidance is due to uncertain global environment and softening of Banking, Financial services and Insurance (BFSI) sector.
11:45 am Outlook on banks: Banks are actively addressing the problem of non-performing loans and even corporates have realised the issue and are actively addressing the problem, according to Ambit. The worst in banking sector is over and collaboration between banks and the corporates will ensure that the issue of stressed assets is addressed, said Ashok Wadhwa, Group CEO, Ambit. He said that the brokerage has a positive bias on the consumer durables space in terms of growth. Two-wheelers showing a positive bias over a three-month period indicates the start of a positive consumption cycle and the broking house thinks that process may have begun, he added.
11:30 am Buzzing: Shares of ITC rose over 6 percent intraday as fears of goods and service tax (GST) overhang has subsided after GST council has finalised four-tier tax structure. Earlier, there were uncertainties about charging higher tax on tobacco post GST. ITC gets over 45 percent of its revenue from tobacco products.
The sin or demerits products (tobacco, aerated drinks, pan masala and luxury cars will be taxed at 28 percent with additional cess, quantum of which has not been stated/finalised. However, the government has indicated that overall tax incidence on these categories will remain broadly unchanged.
The Sensex is down 81.65 points or 0.3 percent at 27348.63 and the Nifty is down 36.20 points or 0.4 percent at 8448.75. About 509 shares have advanced, 1919 shares declined, and 83 shares are unchanged. Metals and pharma stocks are bleeding.
ITC, HUL, ONGC, NTPC and Axis Bank are top gainers while Sun Pharma, Dr Reddy's Labs, Lupin, Coal India and SBI are losers in the Sensex.
Oil prices edged up in early trading, stabilising after five straight days of falls triggered by a surge in US crude inventories and doubts over the ability of oil producers to coordinate an output cuts.
Despite the slight increases, traders said market sentiment was bearish. Brent futures fell for the past five straight trading sessions and is down about 13.5 percent since its most recent peak in mid-October.
10:20 am India Inc on GST rates: India Inc suggested the government to gradually come down to "one or two" rates of the Goods and Services Tax (GST).
"GST rates structure can be absolute limit of four rates as suggested by the government, and over time, the Government should commit to converge to one or two rates," CII said in a statement.
It is also important that the bulk of goods and services should fall within the standard rate of 18 percent and only as exception to go to the higher rate of 28 percent and a lower rate for essential goods such as unprocessed food items, CII President Naushad Forbes said.
Ficci complimented the GST Council for reaching a consensus and finalising the four-tier rate structure.
"The rate structure will achieve the twin objective of protecting the revenues of the central and the state governments and further containing the inflationary pressures that may arise consequent upon the change of the taxation system," Ficci President Harshavardhan Neotia said.
10:00 am Market Check: Equity benchmarks continued to fall amid consolidation and mixed Asian cues. FMCG stocks rallied after GST panel fixed rates yesterday while pharma stocks were under pressure on reports of US probe in drug pricing.
The 30-share BSE Sensex was down 45.85 points at 27384.43 and the 50-share NSE Nifty fell 22.55 points to 8462.40 while the broader markets continued to underperform benchmarks.
The BSE Midcap and Smallcap indices were down around a percent each. About 1421 shares declined against 699 advancing shares on the exchange.
ITC, HUL and Colgate Palmolive gained 2-5 percent after the GST Panel fixed rates yesterday post market hours.
Largecaps like Sun Pharma, Lupin and Dr Reddy's Labs fell more than 4 percent after media reports indicated that US prosecutors are undertaking investigation into suspected price collusion.
Asia markets traded mixed, with Japanese shares leading losses and the Australian benchmark index slipping to a four-month low, as investors flocked to safe-haven assets amid worries about the US election.
9:55 am GST: India Inc suggested the government to gradually come down to "one or two" rates of the Goods and Services Tax (GST).
"GST rates structure can be absolute limit of four rates as suggested by the government, and over time, the Government should commit to converge to one or two rates," CII said in a statement.
It is also important that the bulk of goods and services should fall within the standard rate of 18 percent and only as exception to go to the higher rate of 28 percent and a lower rate for essential goods such as unprocessed food items, CII President Naushad Forbes said.
9:45 am Market outlook: Nilesh Shah, MD of Kotak Mahindra AMC advises investors to stock up on pharma stocks over the next 6-12 months as he believes they will outperform in 3-4 years.
The US is the largest market going forward. It is a country where population is ageing and the cost of medicine is going up and India is a formidable player in the market. This is the opportunity for long-term investors,'' he said.
On GST tax slabs, he said that it will bring in more efficiency, reduce logistics costs. However, there are a few contentious issues that need to be sorted out, he said.
9:30 am Buzzing: L&T is down 2 percent as government is expected to sell around 3 percent stake via offer for sale (OFS) route. L&T shares worth Rs 4040.41 crore as per Thursday's closing price are expected to be sold today. The Specified Undertaking of the United Trust of India (SUUTI) was formed back in 2003 as an extension of the UTI. It consists of 51 companies -- 8 unlisted and the rest 43 listed. Through SUUTI, the government holds minority stake in these companies and is planning to divest its shareholding. Citibank, Morgan Stanley and ICICI Securities are handling the divestment in the SUUTI stake sale.
The market has opened in green reacting driven by gains in FMCG , majorly in ITC. The Sensex is up 38.30 points or 0.1 percent at 27468.58 and the Nifty is up 14.45 points or 0.2 percent at 8499.40. About 352 shares have advanced, 156 shares declined, and 43 shares are unchanged.
ITC, Cipla, HUL, ONGC and ICICI Bank are top gainers while Sun Pharma, Dr Reddy's Labs, L&T, Lupin and TCS are losers in the Sensex.
The GST council has finalised a four-tier GST tax structure of 5, 12, 18 and 28 percent. Essential items are to be taxed at 5 percent while white goods like TV and refrigerators may see some tax relief. The GST panel has also approved cess on tobacco, luxury products and sin items. This cess will not be additional and won't add to states or consumers burden. Taxation on gold will be decided upon the revenue flexibility.
On earnings radar, Titan's Q2 profit is seen higher by 30 percent. Growth in jewellery division will be key. United Breweries is expected to post yet another strong quarter, volume growth seen at 8 percent.
Among global markets, Asian shares slipped and the dollar nursed losses in a week marked by growing uncertainty about the outcome of the US presidential election. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent in early trade, down 1.4 for the week.
Investors have been unnerved in recent days by signs that the US presidential race between Democrat Hillary Clinton and Republican Donald Trump was tightening just days before Tuesday's vote.
The S&P 500 fell for an eighth straight session, its longest losing streak since the 2008 financial crisis, as Facebook shares weighed and investors grappled with uncertainty over next week's US presidential election.
Facebook shares tumbled 5.7 percent as the world's largest online social media network warned that revenue growth would slow this quarter. The stock was the biggest drag on the S&P 500 as well as on the tech-heavy Nasdaq, which also posted its eighth straight day of losses.
Oil prices edged up in early trading, stabilising after five straight days of falls triggered by a surge in US crude inventories and doubts over the ability of oil producers to coordinate an output cuts.
Gold edged higher in response to a lower dollar and also uncertainty about the outcome of a tight US presidential race.