Sensex ends below 26000; banks, oil & gas drag; HUL up 3.7%

Equity benchmarks started off the week on negative note, falling for the second consecutive session on Monday weighed down by banks and oil & gas stocks but FMCG major Hindustan Unilever bucked the trend post strong Q1 earnings.

The 30-share BSE Sensex closed below 26000 level, down 135.52 points to 25991.23 and the 50-share NSE Nifty dropped 41.75 points to 7748.70 while the BSE Midcap and Smallcap indices were down 0.4-0.7 percent.

Experts advise buying on such dips as they continued to be positive on Indian equity market on account of improvement in economic data and hopes of proper implementation of Budget announcements.

Rakesh Arora, Macquarie said though the reporting season has been mixed so far, macro has been more upbeat with monsoon picking up, oil prices retreating, inflation easing and IIP improving.

''The government too has been actively following up on its budget announcements, something we expect will continue in the coming months,'' he added. He said the brokerage reiterates its positive stance and continues to remain buyers on dips.

The market will be shut on Tuesday for Ramzan holiday.

Coal India, India's largest coal mining company, was the biggest loser in Sensex, down 3 percent after media report suggested that the government is looking to lower the e-auction volumes by more than half to 25 million tonne, which will impact profitability of the company.

Shares of Reliance Industries, ICICI Bank, Tata Motors, ONGC, Tata Steel and Hindalco Industries were prominent losers, down 1.4-2 percent. TCS and HDFC Bank fell over 0.6 percent.

Engineering and construction major Larsen & Toubro, which announced earnings post market hours, declined 0.7 percent. It reported a consolidated net profit of Rs 967 crore for the June quarter, up 110 percent over the same period last year.

However, Sun Pharma and BHEL gained more than a percent followed by Infosys, Wipro and HDFC with 0.2-0.9 percent.

On the earnings front, personal care products manufacturer Hindustan Unilever topped the buying list, up 3.7 percent post outstanding performance in April-June quarter . Net profit grew 3.7 percent year-on-year at Rs 1,056.9 crore as against expectations of 6 percent fall while revenue shot up 13.3 percent as against forecast of 9.8 percent driven by double digit growth across all segments.

Another FMCC company Dabur India reported 12.7 percent growth in bottomline and 13.1 percent in revenue; the stock was down 0.65 percent.

Bank of Baroda was up 0.5 percent after net profit in Q1 rose 16.6 percent year-on-year to Rs 1,362 crore on account of lower provisions but impacted by lower other income and higher tax expenses.

In the broader space, Godrej Consumer Products missed street estimates with the first quarter consolidated net profit rising 8 percent year-on-year and total income from operations increasing 9.4 percent as against expectations of 29 percent and 13 percent, respectively. The stock closed flat

Among others, electrical products manufacturer Havells India fell 2 percent and healthcare company Alembic Pharmaceuticals gained 2 percent post earnings.

Jaiprakash Power Ventures rallied 3 percent after Reliance Power signed memorandum of understanding to acquire 100 percent of company's 1800 MW hydro power portfolio. Reliance Power gained 3.5 percent.

About 1194 shares advanced while 1656 shares declined on the BSE.

03:30pm Market closing
The market fell for the second consecutive session on Monday with the Sensex falling 135.52 points to 25991.23 and the Nifty shedding 41.75 points to 7748.70.

About 1194 shares have advanced, 1656 shares declined, and 120 shares are unchanged.

03:20pm Dabur India under pressure post Q1 no
Dabur India's Q1FY15 consolidated net profit increased to Rs 211 crore from Rs 186 crore and total income from operations rose to Rs 1,869 crore from Rs 1,652 crore, missing expectations.

According to CNBC-TV18 poll estimates, analysts had expected net profit at Rs 221 crore on revenue of Rs 1,902 crore for the quarter.

03:10pm Interview
Gujarat Pipavav Port (APM Terminals Pipavav) beat street expectations by reporting 128 percent net profit Year-on-Year (Y-o-Y) jump to Rs 80.50 crore for the quarter ended June 30, 2014 ( Q2 ), due to strong revenue and operational performance, as against Rs 35 crore in the same quarter last fiscal.

The company sees improved container volumes and stable bulk volumes amongst peers, says Prakash Tulsiani, Managing Director, Gujarat Pipavav Port adding that tariff revision in August 2013 has helped improve their margins.

In addition, the company has an outstanding debt of Rs 330 crore that Tulsiani expects to repay by the end of this week.

03:00pm Equity benchmarks remained under pressure with the Sensex falling 114.73 points to 26012.02 and the Nifty losing 30.60 points to 7759.85.

About 1118 shares have advanced, 1665 shares declined, and 115 shares are unchanged.

Hindustan Unilever surged 4 percent after reporting stellar performance in Q1FY15. HUL surpassed street expectations on every parameter with the first quarter (April-June) net profit growing 3.7 percent year-on-year at Rs 1,056.9 crore driven by strong revenue and operating performance. Profit in the year-ago period was Rs 1,019.3 crore.

According to CNBC-TV18 poll estimates, analysts had estimated profit at Rs 960 crore on revenue of Rs 7,474 crore for the quarter.

Total income from operations surged 13.3 percent at Rs 7,716 crore in the quarter ended June 2014 compared to Rs 6,809 crore in same quarter last year led by growth in across segments and strong volume growth of 6 percent as against forecast of 4-5 percent.

Infosys, Sun Pharma, HDFC, Wipro, Dr Reddy's Labs, BHEL, NTPC and Maruti gained 0.2-1.2 percent.

01:55pm Orbit Corporation under pressure
IFCI took possession of 4 Orbit Corporation's properties in Mumbai to to recover loans. Asset possession will recover loans worth Rs 58 crore, reports CNBC-TV18 quoting sources. The stock fell 5 percent.

01:50pm Punjab National Bank up 1.6%
Citi maintains buy on the stock post Q1 earnings.

"PNB has reported a decent quarter – it's well ahead (+18 percent versus expectations), the balance sheet has shown some stability and management talk is more upbeat. While PNB's gains are broad-based (growth, deterioration, margins and costs), they do come off lows and modest expectations. It's better, but still very much a relative rather than an absolute show," said the brokerage in its note.

01:40pm Alembic Pharma earnings
Alembic Pharmaceuticals reported healthy growth in April-June quarter with the consolidated net profit growing 38.8 percent year-on-year to Rs 64.7 crore on account of strong growth in international generic business and operating performance.

Consolidated net sales grew 15.7 percent to Rs 493.6 crore in the quarter ended June 2014 from Rs 426.6 crore in same quarter last year.

''International generic formulation posted growth of 33 percent at Rs 113.8 crore compared to Rs 85.5 crore in corresponding quarter of previous year and India branded formulations business grew 16 percent to Rs 223.3 crore year-on-year but India generics business slipped 5 percent to Rs 25.22 crore,'' said the company in its filing.

Operating profit (EBITDA) of the company jumped 33.75 percent at Rs 107 crore in first quarter of current financial year compared to Rs 80 crore in the year-ago period and margin expanded by 280 basis points to 21.6 percent from 18.8 percent during the same period.

01:25pm Nikkei Update
The Nikkei share average hit a six-month closing high on Monday, buoyed by hopes for improvement in domestic corporate earnings, while casino-related plays outperformed on a media report that new casinos could be opened in Japan before the 2020 Summer Olympics.

The benchmark Nikkei gained 0.5 percent to 15,529.40 points, its highest closing level since Jan. 23.

Since mid-June, the index has tried a few times to rise above the 15,500 level but in vain. Still, the Nikkei is down 4.7 percent since the start of this year, reports Reuters.

01:10pm United Bank in focus
Top banking sources told CNBC-TV18 that IDBI Bank has been asked to merge United Bank with itself.

However, today IDBI Bank said there is no proposal discussed for merger with United Bank of India and also it did not receive any communication from the government w.r.t this merger.

United Bank also said there is no negotiations w.r.t merger of bank with any other bank.

01:00pm Equity benchmarks remained under selling pressure in afternoon trade weighed down by oil & gas, banking & financials, FMCG and metals stocks. The Sensex dropped 209.14 points to 25917.61 and the Nifty fell 62.10 points to 7728.35 while the BSE Midcap and Smallcap indices declined 0.4-0.7 percent.

About 1107 shares have advanced, 1462 shares declined, and 107 shares are unchanged.

Major largecaps like Reliance Industries, ICICI Bank, HDFC, TCS and Tata Motors tumbled more than 1.5 percent followed by ITC, HDFC Bank and ONGC with over 0.5 percent. Coal India kept its top position in the selling list, down 3 percent.

However, Axis Bank outperformed, up 1.5 percent. Dr Reddy's Labs, BHEL, Maruti Suzuki and Tata Power gained 0.2-0.6 percent.

Rakesh Arora, Macquarie said though the reporting season has been mixed so far, macro has been more upbeat with monsoon picking up, oil prices retreating, inflation easing and IIP improving.

''The government too has been actively following up on its budget announcements, something we expect will continue in the coming months. We reiterate our positive stance and continue to remain buyers on dips,'' he added.

12:55pm Moody's on India
India's measures to raise the investment limit for foreign institutional investors (FIIs) in government bonds is a positive for the country's credit profile since it will help stabilise domestic interest and currency rates, Moody's Investors Service said on Monday.

The credit rating agency added the revised investment limit was also small enough to limit impact on India from changes in overseas demand for debt, according to a weekly report.

"Raising the limit for foreign institutional investors is credit positive for the Government of India because it will increase foreign investment in government securities over the next several months," Moody's said.

The Reserve Bank of India last week increased the limit available for foreign institutional investors by USD 5 billion to USD 25 billion but kept the overall limit intact by lowering the limits for long-term foreign investors such as sovereign wealth funds.

Moody's rates India with a "Baa3" rating, the lowest investment-grade rating, and a "stable" outlook, reports Reuters.

12:40pm Havells Earnings
Electrical products manufacturer Havells India's first quarter (April-June) standalone net profit grew 13 percent at Rs 107 crore compared to Rs 94.7 crore in same quarter last year on account of strong revenue.

Total income from operations jumped 21.5 percent to Rs 1,277 crore from Rs 1,051.3 crore during the same period on growth across segments.

The bottomline was slightly lower than analysts expectations of Rs 118 crore while topline was tad above estimates of Rs 1,211 crore for the quarter.

12:25pm Godrej Consumer Products falls 4%
Godrej Consumer Products missed street estimates with the first quarter (April-June) consolidated net profit rising 8 percent year-on-year to Rs 143.5 crore and total income from operations increasing 9.4 percent to Rs 1,888.5 crore.

According to CNBC-TV18 poll estimates, analysts had expected the company to report net profit of Rs 171 crore on revenue of Rs 1,951 crore for the quarter.

Consolidated operating profit (EBITDA) grew 7.5 percent at Rs 242 crore and margin declined 30 basis points at 12.8 percent compared to same quarter last year, which were lower than analysts' expectations of Rs 267 crore and 13.7 percent, respectively.

12:10pm RBI policy next week
Bank of America Merrill Lynch expects the RBI to pause in its next monetary policy. We expect the first cut in December and early 2015 in case of drought.

After all, CPI inflation will dip to 5.7 percent in November and settle at 7 percent levels thereafter if the monsoon normalizes. Drought poses a 250 bps risk to CPI inflation in the near term," said the brokerage in its note.

At the same time, it continues to expect the Modi government to focus much more on supply side measures than RBI tightening to combat drought.

12:00pm The market fell further on profit booking with the Sensex losing 151.09 points to 25975.66 and the Nifty declining 44.80 points to 7745.65. The market breadth remained weak with the decliners outshining advancers by a ratio of 1418 to 1023 on the BSE.

Realty major DLF and top coal mining company Coal India plunged 3.5 percent each followed by Reliance Industries, ICICI Bank, TCS, Kotak Mahindra Bank, Sesa Sterlite and Bajaj Auto with 1-1.6 percent.

Shares of HDFC, ITC, HDFC Bank, Larsen & Toubro, Tata Motors and ONGC declined over 0.5 percent. However, HCL Technologies, Dr Reddy's Labs, Cairn India, Axis Bank and Punjab National Bank bucked the trend, up 1-2 percent.

In the midcap space, Central Bank of India, Bayer Crop Science, ESS DEE Aluminium, Bajaj Electricals and EIH rallied 3-8 percent while HT Media, VST Industries, Arvind, Jaypee Infra and BF Utilities slipped 3.5-5 percent.

11:55am Adani group in News
The Australian government on Monday approved Gujarat-based Adani Mining Pty Ltd's USD 15.5 billion Carmichael coal and rail project in Queensland, subject to strict conditions to protect groundwater.

The Carmichael mine, which could become Australia's largest coal mine producing 60 million tonne a year, has sparked protests from green groups and marine tour operators concerned about export of the coal from a port near the Great Barrier Reef.

"The strict conditions will ensure the protection of the environment as a paramount concern," Australia's environment minister, Greg Hunt, said in a statement.

The coal from the Carmichael mine will be transported via a 400-km railway line to Abbot Port, where the company owns a shipping terminal, and from there it will be exported to India. Adani says the coal will help meet the country's rising power demands.

Adani acquired the port, which is near the Great Barrier Reef, in 2011 and will have to expand it in order to ship the coal.

11:40am Corporate earnings  key going ahead
Corporate earnings growth will be the key trigger for the market over the next 3-6 months, feels Bhuvnesh Singh MD & Head-India Research. He is positive on state-owned banks, and feels the non-performing assets (NPA) cycle may have peaked.

In an interview to CNBC-TV18, he says corporate earnings growth for this year could be 17 percent and could rise another 16-18 percent next year.

He sees earnings upgrades in consumption-driven spaces like auto, and expects FMCG stocks to give steady returns. He says he will hold on to oil and gas stocks and is bullish on cement stocks as well.

He expects the RBI to cut interest rates over the next six months.

11:25am Bank of Baroda beats estimates
Public sector lender Bank of Baroda suprassed street expectations with the first quarter (April-June) net profit rising 16.6 percent at Rs 1,362 crore compared to Rs 1,167.9 crore in same quarter last year on account of lower provisions but impacted by lower other income and higher tax expenses.

According to CNBC-TV18 poll estimates, analysts had expected the bank to report net profit at Rs 1,195 crore and net interest income of Rs 3,240 crore for the quarter.

Net interest income, the difference between interest earned and interest expended, grew 15.2 percent, higher-than-expected, to Rs 3,328.3 crore during the same period while other income (non-interest income) declined 16.7 percent on yearly basis to Rs 1,024.54 crore in the quarter gone by.

Asset quality deteriorated with the gross non-performing assets (gross NPA) rising sequentially (up 12 basis points year-on-year) to 3.11 percent in June quarter from 2.94 percent in March quarter and net NPA increasing quarter-on-quarter (down 11 bps Y-o-Y) to 1.58 percent from 1.52 percent during the same period.

11:15am Tata Global earnings expectations
Tata Global Beverage, one of the largest tea companies in the world, will announce its first quarter (April-June) earnings today. According to CNBC-TV18 poll estimates, analysts expect reported profit after tax to fall by 15.2 percent to Rs 94.7 crore in June quarter from Rs 112 crore in same quarter last year.

Adjusted profit after tax of the company may increase by 2.8 percent year-on-year to Rs 94.7 crore. In Q1FY14, the company reported an exceptional income of Rs 21.6 crore, adjusting for which PAT stood at Rs 92 crore for Q1FY14.

Total income is likely to increase by 4.5 percent to Rs 1,895 crore during the same period. Operating profit may fall 3 percent year-on-year to Rs 201 crore and margin may decline by 80 basis points to 10.6 percent in the quarter gone by.

Analysts say shrinking volumes and mounting advertising and promotion spends pose challenges to profitability in company's international tea and coffee operations.

11:00am Equity benchmarks slipped further with the Sensex breaking 26000 level weighed down by private banks, oil & gas, FMCG and metal stocks.

The Sensex fell 110.21 points to 26016.54 and the Nifty lost 32.25 points to 7758.20. About 966 shares have advanced, 1185 shares declined, and 96 shares are unchanged.

Coal India topped the selling list, falling 2.6 percent followed by Reliance Industries, HDFC, TCS and Bajaj Auto with over a percent. ICICI Bank, HDFC Bank, ITC, Sun Pharma, Hindalco, Tata Steel and ONGC declined 0.3-0.9 percent.

However, Axis Bank bucked the trend, up nearly 2 percent post stock split. State Bank of India, L&T, Infosys, Tata Motors, BHEL, Dr Reddy's Labs, Maruti and Hero Motocorp gained 0.2-0.8 percent.

10:55am Market Check
The market extended losses with the Sensex falling 127.97 points to 25998.78 and the Nifty losing 36.35 points to 7754.10 weighed down by private banks, metals and oil & gas stocks.

About 951 shares have advanced, 1146 shares declined, and 92 shares are unchanged.

10:45am Hexaware in News
Hexaware Technologies said R Srikrishna has been appointed as the chief executive officer (CEO) of the company effective from July 28, 2014.

PRChandrasekar who has served as the vice chairman and CEO, retired from the role of CEO effective from July 28, 2014 and continued as vice chairman, it added.

10:30am Reliance Power, JP Power in focus
Anil Ambani-led Reliance Power has acquired the 1800 MW hydroelectric power assets of Manoj Gaur led Jaypee Group worth over Rs 10,000 crore.

On Sunday, a MoU was signed between Reliance CleanGen (RCL), a 100 percent subsidiary of Reliance Power, and Jaiprakash Power Ventures (JPVL), a subsidiary of Jaiprakash Associates (JAL), for the 100 percent acquisition by RCL of the entire hydroelectric power portfolio of JPVL.

If this deal goes through, Reliance Power will become one of the largest providers of hydroelectric power in the private sector in India with 7,800 MW operating capacity by end of FY15.

JPVL's portfolio comprises of 3 plants, with an asset life of over 50 years, each using run-of-the-river technology to convert natural water flow to electricity, eliminating the need for a large reservoir. These plants include 300 MW Baspa stage two plant in Kinnaur, Himachal Pradesh, a 400 MW Vishnuprayagn plant Chamoli District, Uttarakhand and 1091 MW Karcham Wangtoo plant in Himachal Pradesh.

10:20am Havells Q1 numbers may be strong
Electrical products manufacturer Havells India will announce its first quarter (April-June) earnings today. According to CNBC-TV18 poll estimates, analysts expect standalone profit after tax to rise 24.6 percent on yearly basis to Rs 118 crore and total income from operations to grow 15.2 percent to Rs 1,211 crore during the quarter.

Core operating profit (EBITDA) may increase 17.3 percent at Rs 165 crore and margin may jump 30 basis points at 13.7 percent compared to the year-ago period.

Analysts feel demand for consumer electric durables is likely to remain strong over the next 2-3 years, benefiting cos like Havells India

10:10am Interview
Raymond's c onsolidated net loss narrowed to Rs 32.85 crore in the Q1FY15 from Rs 49.68 crore, year-on-year, on the back of improved performance of its lifestyle business.

M ShivKumar CFO said that Q1 is generally a loss-making quarter for the textile sector, but he expects to see improvement in the performance of the company in Q2 due to festive season.

Its total consolidated income from operations rose to Rs 1,096.09 crore in the first quarter as against Rs 873.79 crore during the same period of last financial year.

10:00am Equity benchmarks remained rangebound with the Sensex falling 10.05 points to 26116.70 and the Nifty declining 2.60 points to 7787.85. About 980 shares have advanced, 834 shares declined, and 76 shares are unchanged.

Axis Bank rallied 2.5 percent post the stock's face value adjusted for 5:1 ratio. Punjab National Bank and Cairn India gained 2 percent each followed by HCL Technologies, Tata Motors, BHEL, Tata Motors, M&M and SBI with 1-1.7 percent.

However, Coal India, TCS, HDFC, Reliance Industries, Kotak Mahindra Bank and ACC fell 0.7-2 percent.

Bajaj Finserv, Wockhardt, Tata Sponge, Axis Bank, Bajaj Auto, Tata Motors, Jaiprakash Associates and SBI were most active shares on exchanges.

09:55am L&T Earnings expectations
Engineering and construction major Larsen and Toubro (L&T) will announce its first quarter (April-June) earnings today. According to CNBC-TV18 poll estimates, analysts expect profit after tax to rise by 11.4 percent year-on-year to Rs 740 crore and net sales to increase by 12.4 percent to Rs 11,046 crore during the quarter.

Operating profit (EBITDA) may jump 27.4 percent at Rs 1,136 crore in the quarter ended March 2014 compared to Rs 892 crore in same quarter last year and margin may expand by 120 basis points to 10.3 percent during June quarter.

09:40am FII View
Rakesh Arora, Macquarie said though the reporting season has been mixed so far, macro has been more upbeat with monsoon picking up, oil prices retreating, inflation easing and IIP improving.

''The government too has been actively following up on its budget announcements, something we expect will continue in the coming months. We reiterate our positive stance and continue to remain buyers on dips,'' he added.

09:25am Sintex in News
Sintex Industries has announced the acquisition of 100 percent equity in SIMONIN Group, a manufacturer of metal and plastic sub-assemblies and technical components in France.

The French company's acquisition has been done from a strategic perspective to widen company's product offerings adding new and prestigious client base, says Sunil Kanojia, Group CEO, Sintex in an interview with CNBC-TV18.

In 2013, SIMONIN's revenue stood at 48 million euros while its EBITDA margin stood at 8 percent. Kanojia believes this acquisition will be value-accretive for company's moulding business. The stock rallied nearly 4 percent.

09:15am The market opened on a flat note on Monday despite positive Asian cues. The Sensex fell 9.87 points to 26116.88 and the Nifty declined 5.40 points to 7785.05.

About 536 shares have advanced, 363 shares declined, and 39 shares are unchanged.

TCS, Tata Motors, Ambuja Cements, ACC, BPCL, Coal India and Bharti Airtel declined 0.7-1.8 percent whereas Sun Pharma, Hero Motocorp, PNB, Sesa Sterlite, Tata Steel, Infosys, Cairn India and Axis Bank gained 0.5-1.8 percent.

Reliance Power gained 1.8 percent on signing memorandum of understanding (MoU) to acquire 100 percent of Jaiprakash Power's 1800 MW hydro power portfolio, which include 3 operating units at Baspa, Karcham Wangtoo and Vishnuprayag. Jaiprakash Power rallied 5 percent.

The Indian rupee opened flat at 60.09 per dollar on Monday as against Friday's closing value of 60.10 a dollar.

The dollar is stronger versus the euro and the Swiss Franc, while flat versus the yen.  The dollar index is higher at the 81 mark.

Agam Gupta of Standard Chartered said, "Rupee will continue to see government owned banks mop up dollars between 60.05-60.10 levels which can cause a move upto 60.20/dollar where we should see small exporter selling. Rupee is expected to trade in a range of 60.05-60.25/dollar."

Asian markets remained positive with the Shanghai rising 2 percent and Nikkei & Hang Seng gaining 0.5-1 percent.

US stocks finished lower on Friday weighed by Amazon's weak earnings and visa's disappointing outlook, in addition to ongoing worries over geopolitical unrest. Also weighing on sentiment Goldman Sachs cuts its global equity allocation to neutral forecasting that a rise in interest rates will drive stocks lower over the next three months

In Europe, shares ended the day lower on Friday, as concerns about the impact of tougher sanctions against Russia weighed amid ongoing unrest in Ukraine. Also, the German DAX closed down around 1.6 percent after business sentiment in the country fell for the third consecutive month.