Nifty fails to hit 8400, Sensex ends up 134 points; BHEL gains 5%
04 Jul 2016
3:30 pm Market closing: The Sensex closed up 133.85 points or 0.5 percent at 27278.76, and the Nifty ended up 42.35 points or 0.5 percent at 8370.70. About 1711 shares have advanced, 1018 shares declined, and 153 shares are unchanged.
BHEL, Adani Ports, ICICI Bank, ONGC and Coal India were top gainers while ITC, Dr Reddy', Bajaj Auto, HUL and TCS were losers in the Sensex.
2:55 pm Buzzing: Shares of Coal India rose over 2 percent intraday as Nomura has a buy rating with a target price of Rs 345 per share. Coal India's production and offtake in June 2016 was up 10 percent and 6.6 percent on annual basis respectively, sharply rising in past two months.
The robust production growth in June 2016 was led by Mahanadi Coalfields ( up 22 percent) and double-digit growth at Eastern Coalfields (ECL), Central Coalfields (CCL) and Northern Coalfields (NCL).
The brokerage firm states that the pick-up in growth in June 2016 was potentially driven by robust electricity demand seen in past few months implying higher demand for coal, moderated coal stock at power plants and cut in high-grade coal prices, effective from May 30.
2:45 pm Arvin's fundraising: Textile-to-retail conglomerate Arvind today said it plans to raise up to Rs 500 crore through issuance of non-convertible debentures (NCDs) on a private placement basis.
In a notice for annual general meeting scheduled to be held on August 4, the company said: "In order to meet the financial needs of the company, the company may make an offer of NCDs or invite subscription to NCDs on private placement basis in one or more tranches... for an aggregate amount not exceeding Rs 500 crore."
2:35 pm Hero's wage agreement: Country's largest two-wheeler maker Hero MotoCorp (HMCL) has inked a wage settlement pact with its permanent workers at Gurgaon plant, entailing an hike of Rs 12,500 spread over three years.
The three-year agreement will be implemented with retrospective effect starting from August 1, 2015 till July 31, 2018. The earlier wage settlement was effective from August 1, 2012 to July 31, 2015.
According to an industry source, the settlement between the company's management and workers union has been reached after months of negotiations.
"As per the settlement, the permanent workers of the Gurgaon facility have been given a hike of Rs 12,500 spread over the next three years," a source said.
While the workers' union had been demanding a hike of Rs 18,000 spread over three years, the company's management was able to close it at Rs 12,500, the source added.
2:20 pm Suzlon on tariffs: Terming India as a "promising" market for renewable energy, Suzlon group Chairman Tulsi Tanti said the sector is "demanding" too, with tariffs going below Rs 5 per unit that can impact economic viability of companies.
The founder of India's leading wind turbine maker said there is some reluctance from banks to finance projects as there are fears that lower tariffs can lead to payment delays.
"Tariffs have to be at a level so that internal rate of return (IRR) is minimum 14 percent and for that, I think tariff has to be a minimum Rs 5 per unit. There can be issues with the project's economic viability. They can become economically unviable," Tanti told reporters here.
His reply came in response to queries on declining tariffs in renewable energy (RE) projects -- solar and wind -- and their financial viability.
Suzlon has its rotor blades manufacturing facility in Bhuj and maintains sites for some of its clients.
2:00 pm Market Check: Equity benchmarks continued to trade higher in afternoon trade with the Nifty holding 8350 level. The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7 percent and 1 percent, respectively.
The 30-share BSE Sensex was up 167.68 points or 0.62 percent at 27312.59 and the 50-share NSE Nifty climbed 50.25 points or 0.60 percent to 8378.60. About 1681 shares advanced against 920 declining shares on Bombay Stock Exchange.
Upstream companies and oil marketing companies gained as kerosene prices saw a 25 paise hike after 5 years. J Ramaswamy, Director Finance of HPCL expects rightful steps to be taken by the government on the kerosene subsidy front. ONGC surged nearly 5 percent while IOC, BPCL and HPCL gained over a percent.
Meanwhile, CNBC-TV18 learnt from sources that the long-awaited cabinet reshuffle is expected on Tuesday where Uttar Pradesh is likely to be given more representation. Piyush Goyal and Dharmendra Pradhan are expected to be promoted but the top 4 spots are unlikely to be touched.
1:55 pm RBI Governor: Cautioning against expecting too much from central banks, RBI Governor Raghuram Rajan has said it is wrong on their part also to always claim a 'bazooka' left up their sleeves, even as he asserted that life is "very difficult" in emerging markets.
In a panel discussion here on lessons learnt by the central bankers from the global financial crisis, he also took on the industrial nations for expecting the emerging markets to be "orthodox" in their monetary and economic policies at a time when they themselves have "thrown out the orthodoxy out of the window".
He was speaking at a panel discussion after the Per Jacobsson Foundation Lecture, delivered by JPMorgan Chase International Chairman Jacob Frenkel, on the occasion of the Bank for International Settlements (BIS) Annual General Meeting.
1:45 pm Energy tariff: Terming India as a "promising" market for renewable energy, Suzlon group Chairman Tulsi Tanti said the sector is "demanding" too, with tariffs going below Rs 5 per unit that can impact economic viability of companies.
The founder of India's leading wind turbine maker said there is some reluctance from banks to finance projects as there are fears that lower tariffs can lead to payment delays.
"Tariffs have to be at a level so that internal rate of return (IRR) is minimum 14 percent and for that, I think tariff has to be a minimum Rs 5 per unit. There can be issues with the project's economic viability. They can become economically unviable," Tanti told reporters here.
1:30 pm Debt: Banks may initiate debt recast programme for Electrosteel, Visa Steel , Bhushan Steel, learns CNBC-TV18 from sources. Bhushan Steel, which has a debt of about Rs 40,000 crore, seems to be the most likely contender for the S4A or Scheme for Sustainable Structuring of Stressed Assets. Electrosteel has a debt of Rs 10,000 crore, while Visa Steel has debt of Rs 4,000 crore. Sources further inform that banks have started the techno economic viability study for these three companies. They have to establish that 50 percent of their debt as mentioned under the scheme is sustainable and can be serviced under the current situation and the unsustainable part of the debt can be converted into preference shares.
The market continues to maintain uptrend as PSU bank stocks lead while oil and gas stocks are in focus. The Sensex is up 185.87 points or 0.7 percent at 27330.78, and the Nifty is up 55.10 points or 0.7 percent at 8383.45. About 1720 shares have advanced, 813 shares declined, and 131 shares are unchanged.
ONGC, BHEL, Adani Ports, Tata Motors and ICICI Bank are top gainers while ITC, Dr Reddy's, NTPC, Hero MotoCorp and HUL are losers in the Sensex.
Continuing its upward journey, gold prices rose by another Rs 260 to Rs 32,040 per 10 gram in futures trade today as participants created more bets amid a firm global trend At the Multi Commodity Exchange, gold for delivery in far-month October was trading higher by Rs 260 or 0.82 percent to trade at Rs 32,040 per 10 gram in a business turnover 102 lots.
Analysts attributed persistent rise in gold prices at futures trade to a firming trend overseas where gold surged for a fourth day as investors sought precious metals as safe-haven assets.
12:59 pm Market Update: The Sensex rose 185.87 points or 0.68 percent to 27330.78 and the Nifty was up 53.80 points or 0.65 percent at 8382.15.
The market remained positive as about two shares advanced for every share falling on the Bombay Stock Exchange.
12:50 pm FII View: The monsoon looks good, Chetan Ahya of Morgan Stanley said. He is focussing on private capital expenditure which is connected to the capacity utilisation in the manufacturing sector. "It will be around 12 months before we see private capex recovery."
He is also watching closely the state-owned banks which are under a huge mountain of debt.
He sees India growing at 7.5 percent this fiscal year. If monsoons are better than normal, then we have upside risks to it, he said.
Considering food and headline inflation are high, he sees the Reserve Bank of India cutting rates only when they come down. He sees a rate cut only in October, and not in August.
12:40 pm Europe opens: European stocks opened slightly higher amid a continuing recovery in global stocks after the Brexit vote.
The pan-European STOXX 600 was up 0.3 percent.
European markets followed gains in Asia where markets traded higher today, continuing a post-Brexit global recovery, with major indexes in Australia and Japan reversing early losses.
The Australian federal election over the weekend failed to produce a clear winner, with major parities failing to gain an outright majority, raising the prospect of prolonged political uncertainty. US markets are closed on Monday for the July 4th Independence Day holiday.
12:30 pm Oil Update: Oil futures were steady today following comments from the Saudi energy minister that the market was heading towards balance, although signs of slowing demand in Asia weighed.
Brent crude futures were trading at USD 50.64 per barrel, up 0.58 percent. US crude was up 0.5 percent at USD 49.24.
There will be no West Texas Intermediate crude settlement on Monday as US financial and commodity markets are closed for the US Independence Day holiday.
12:15 pm Auto sales: Bajaj Auto today reported four percent decline in total sales in June at 3,16,969 units against 3,31,317 in the same month of 2015.
Motorcycle sales during the month fell 5 percent to 2,73,298 units from 2,87,582 in June last year, the company said in a BSE filing.
Bajaj Auto's commercial vehicles sales during the month remained flat at 43,671 units compared with 43,735 in the year-ago period.
Exports in June this year were at 1,23,252 units against 1,56,074 a year earlier, down 21 percent.
12:00 pm Market Check
Equity benchmarks as well as broader markets maintained morning gains with the Sensex rising more than 200 points, continuing uptrend for the sixth consecutive session, especially after absorbing Brexit impact.
The 30-share BSE Sensex rose 214.61 points or 0.79 percent to 27359.52 and the 50-share NSE Nifty was up 62.00 points or 0.74 percent at 8390.35. The BSE Midcap index gained 0.8 percent and Smallcap rose 1.1 percent.
The market remained positive as about 1713 shares advanced against 729 declining shares on the Bombay Stock Exchange.
ONGC, Adani Ports, BHEL, Tata Motors, ICICI Bank and Tata Motors (DVR) were top gainers, up 2-4.6 percent while Bosch fell 2 percent after approving buyback proposal. ITC, Hero Motocorp, NTPC and Grasim slipped 1-2 percent.
11:55 am Kerosene price hike: Retail prices of kerosene have been increased by 25 paise per litre as of now and J Ramaswamy, Director Finance of HPCL is hopeful the government will take the right pricing action in future as well.
While oil marketing companies have pricing freedom on petrol, diesel, aviation turbine fuel and non-subsidised LPG, so far they require government's permission to take any pricing action on kerosene and subsidized LPG.
The under-recoveries on kerosene for the month of July 2016 is expected around Rs 13.12 per litre (Rs 11.73 per litre in last month), of which roughly Rs 12 is compensated for by the government.
11:45 am Interview: S Ravikumar of Bajaj Auto said while the industry grew 7 percent in the motorcycle segment, the company's grew 9 percent.
He is hopeful that new launches like the V15 and the Avenger portfolio will clock better sales figures once the monsoon is over.
In August, he expects sales for the company to be in the range of 3.5 lakh in August. In July, he predicts domestic sales and exports put together will be around 3.25 lakh units.
Nigeria had recently said that it would let its currency naira float and weaken next week.
11:30 am Macro-economy: Speaking to CNBC-TV18 Chetan Ahya of Morgan Stanley said that Brexit will be a long-drawn affair in Europe. "This could drag on," he said, adding that the impact could be on global trades.
Admitting that there is less systemic risk from Brexit, he believes that the US Fed won't probably be hiking rates in the current scenario.
As for the economic triggers for India, the monsoon looks good, he said. He is focussing on private capital expenditure which is connected to the capacity utilisation in the manufacturing sector. "It will be around 12 months before we see private capex recovery."
The market continues to gain with strong support from index heavyweight while FMCG stocks are playing party poopers. The Sensex is up 212.31 points or 0.8 percent at 27357.22, and the Nifty is up 61.50 points or 0.7 percent at 8389.85. About 1677 shares have advanced, 602 shares declined, and 99 shares are unchanged.
ONGC, Tata Motors, ICICI Bank, BHEL and SBI are gainers in the Sensex while ITC, HUL, Hero MotoCorp, Bajaj Auto and NTPC are losers in the Sensex.
Crude prices edged up in Asia, building on recent gains with Brent holding above USD 50 after Nigerian militants claimed fresh attacks on the country's oil infrastructure.
Prices see-sawed last week, plunging in the immediate aftermath of Britain's shock decision to leave the European Union but rallying after central banks worldwide vowed support to financial markets.
The commodity rallied at the end of last week as news filtered through of an attack on a restaurant in Dhaka, which compounded worries about terrorism days after suicide bombers launched an attack on Istanbul airport.
10:45 am Buzzing: Tata Motors shares rallied 3.7 percent intraday after strong growth in Jaguar Land Rover's US sales and India's passenger vehicles business in June.
Jaguar Land Rover, the luxury car maker, sold 8,448 units in June, registering a whopping 44.2 percent growth compared with 5,860 units sold in a year-ago period.
Jaguar sales increased 125.4 percent to 2,743 units and Land Rover rose 22.9 percent to 5,705 units compared with corresponding period of last fiscal.
Overall JLR sales continued to be strong as in May also, it reported a solid 18 percent growth year-on-year by selling 44,946 units. That was largely supported by Jaguar sales (up 90 percent against 49 percent in April), largely driven by F-Pace and XE sales in the US. Land Rover registered a 6 percent growth.
10:30 am China's Yuan at multi-year low: China's yuan touched a new 5-1/2 year low against the dollar for the second consecutive session today on concerns that the central bank would tolerate a further weakening of the currency, as the bank appeared to have stood aside, traders said.
The yuan hit 6.6642 soon after the open due to a heavy bout of dollar buying in the market. That level was the weakest since December 2010.
Despite the yuan's continued slide, there were no signs of state banks' intervention on behalf of the central bank, with some traders saying "this is a tacit approval from the central bank to let the yuan slide further."
"The market remains calm as usual," said a trader from a Chinese commercial bank in Shanghai. "We all know that the yuan will weaken further. And the central bank got things under control."
10:15 am Gold outlook: Gold prices may hit all-time highs in the next 18 months amid low to negative global bond yields, said a fund manager on Monday, joining a chorus of bullish calls on the safe haven commodity.
Despite being a non-interest bearing asset with holding costs, gold was attractive in the current climate where there was little trust in the establishment and its policies as demonstrated by the June 23 referendum in the UK when voters chose to leave the European Union, said Swiss Asia Capital's Singapore managing director and chief investment officer, Juerg Kiener.
The continued cratering of bond yields has also blunted the advantage fixed income instruments held over their shiny counterpart.
10:00 am Market Check
Equity benchmarks held early gains with the Nifty inching towards 8400, tracking positive Asian cues. Oil, auto, banks, infra and pharma stocks supported the market while FMCG was under pressure.
The Sensex rose 167.51 points or 0.62 percent to 27312.42 and the Nifty climbed 45.50 points or 0.55 percent to 8373.85. The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7 percent and 0.9 percent, respectively.
About three shares advanced for every share declining on Bombay Stock Exchange.
Tata Motors topped buying list, up more than 3 percent after strong JLR sales data in US while ITC fell nearly 2 percent on profit booking.
9:55 am ITC's choco plunge: FMCG major ITC plans to add 6-7 boutiques of luxury chocolate brand Fabelle at its hotels over the next 15 months.
"We have forayed in the luxury chocolate segment with Fabelle brand. Over the next 15 months, we plan to add 6-7 boutiques for Fabelle at our hotel properties in the country.
Our aim is to sell the best chocolate in the world," ITC Foods CEO V L Rajesh said. The company at present sells Fabelle through a boutique at its hotel ITC Gardenia, Bengaluru.
9:45 am Govt's boost for PSU insurance cos: Finance Ministry will soon issue a draft Cabinet note on listing of public sector general insurance companies in line with the announcement made in the Budget.
"Cabinet note for consultation on listing of four PSU general insurance companies will be issues in the next few weeks," sources said.
Final shape is being given to various issues including quantum of stake dilution, sources added. Listing of PSU general insurance was announced in Budget 2016-17 by Finance Minister Arun Jaitley.
9:30 am June review: Morgan Stanley says June was a good month for the broader market with BSE Small-cap index rising 6 percent month-on-month, while the narrow market was up 1 percent. MSCI
India's performance ranking in emerging market slipped to the 17 position from 3 in May.
Utilities and Materials were the best-performing sectors, while Technology and Telecoms were the worst. Eight out of the 10 sectors delivered positive monthly return. FPIs remained buyers in the cash market, while they remained sellers in the debt markets for the second month running. DIIs turned sellers during the month.
Commodity prices were up during the month with gold price gaining 6.7 percent (MoM) in Indian currency and 8.8 percent (MoM) in USD.
9:20 am Market jumps: The Sensex is up 199.95 points or 0.7 percent at 27344.86, and the Nifty up 57 points or 0.7 percent at 8385.35. About 996 shares have advanced, 194 shares declined, and 45 shares are unchanged.
The market has opened on a strong note Monday with the Nifty drawing close to 8400. The 50-share index is up 52.15 points or 0.6 percent at 8380.50 and the Sensex is up 179.96 points or 0.7 percent at 27324.87. About 703 shares have advanced, 171 shares declined, and 50 shares are unchanged.
ONGC, Tata Motors, BHEL, Dr Reddy's and Lupin are gainers while ITC is down on the Sensex.
The Indian rupee gained in the early trade. It has opened higher by 9 paise at 67.23 per dollar versus 67.32 Friday. Dollar fell against the euro on Friday due to reduced expectations of a US interest-rate hike this year.
Pramit Brahmbhatt of Veracity said, "Rupee to trade with positive bias and will continue to take cues from the domestic equity market where we will see optimism prevailing."
Asian markets traded higher, continuing a post-Brexit global recovery, with major indexes in Australia and Japan reversing early losses.
Australia's benchmark ASX 200 was up 0.3 percent, paring earlier losses of 0.38 percent. The heavily-weighted financials subindex fell 0.47 percent, dragging on the benchmark index.
Japan's Nikkei 225 was up 0.24 percent, retracing earlier declines of 0.44 percent, while across the Korean Strait, the Kospi added 0.38 percent. In Hong Kong, the Hang Seng index was up 1.25 percent. Chinese mainland markets were up, with the Shanghai composite up 0.52 percent and the Shenzhen composite up by 0.11 percent.
Among asset classes, crude prices are steady amid speculation that global policy makers will act to limit the fallout from Brexit. Dollar fell against the euro on Friday due to reduced expectations of an US interest-rate hike this year. Gold prices trade around 1340 dollars an ounce.