Sensex ends flat ahead of Fed meet outcome; metals shine
19 Jun 2013
Equity benchmark indices closed volatile session on a flat note Wednesday, as investors are eagerly waiting for the outcome of two-day Federal Reserve's policy meeting that will end today.
Back on the home turf, the BSE Sensex rose just 22.42 points to close at 19245.70, and the Nifty gained 8.65 points to finish at 5822.25, but the broader markets outperformed benchmarks throughout the session.
The BSE Midcap and Smallcap indices were up 0.5 percent each.
Media reports suggest that Fed Chairman Ben Bernanke is likely to repeat his recent comment in his speech at the FOMC meeting. The Fed is currently buying USD 45 billion in Treasuries and USD 40 billion in mortgage-backed securities each month.
Gautam Sinha Roy of Motilal Oswal Securities does not expect any major move from the Federal Reserve.
Adrian Mowat of JPMorgan says the market will need some reassuring statements from Bernanke, with regards to the bond markets and what they intend to do.
Meanwhile, the rupee was quite volatile today and hovered around 58.77 per dollar for the entire session.
Telecom, metals and HDFC pack led support to the market while healthcare, major technology and auto stocks alongwith ICICI Bank remained under pressure.
Shares of HDFC and HDFC Bank gained one percent whereas ICICI Bank slipped 0.4 percent.
The BSE Metal Index rose 1.28 percent as Tata Steel , Sterlite Industries, Hindalco Industries and Jindal Steel rallied 2-2.7 percent.
Shares of country's largest telecom operator Bharti Airtel rallied nearly 3 percent and its rival Idea Cellular closed at Rs 147.90, up 4.52 percent, which jumped to near 5 years high of Rs 150.65.
Both operators Airtel and Idea are likely to match Vodafone 2G data tariff cuts , reports CNBC-TV18, quoting unnamed sources. Airtel and Idea are likely to slash 2G data tariffs cuts by 60-80 percent in non-metro circles.
Dr Reddys Labs declined 1.5 percent after US-based drug maker AbbVie Inc, the spun-off entity of Abbott, has dragged the company to court for allegedly infringing the former's patented drug Zemplar on six counts concerning three patents.
Advancing shares outnumbered declining ones by 1263 to 1102 on the Bombay Stock Exchange.
3:40 pm The big event: The US Federal Reserve meets this week amid intense speculation over its massive bond-buying campaign, but most economists do not expect it to scale back purchases from their current USD 85 billion monthly pace, reports Reuters.
They do anticipate, however, that Fed Chairman Ben Bernanke will repeat his recent comment that they could be trimmed at one of the next few meetings, if the economy continues to improve. The Fed is currently buying USD 45 billion in Treasuries and USD 40 billion in mortgage-backed securities each month.
Bernanke will also likely emphasize that any reduction does not equate to a tightening of policy, or an earlier lift-off date for overnight interest rates, which the Fed has held near zero since December 2008.
3:30 pm Market closing: The Sensex ends up 17.04 points at 19240.32 while the Nifty closes 5822.25, up 8.65 points (provisional). About 1259 shares have advanced, 1106 shares declined, and 153 shares are unchanged.
3:25 pm Alert :EU antitrust regulators fined nine drugmakers, including Ranbaxy, a total of 146 million euros on Wednesday for blocking the supply of cheaper medicines on the market, with a penalty of 94 million euros imposed on Denmark's Lundbeck, reports Reuters.
3:17 pm Data update: Foreign institutional investors (FIIs) bought Rs 562 crore worth of stock futures on Tuesday, NSE data shows. Derivatives analysts say buying mainly concentrated on Reliance Communication futures.
Expert take: Rupee paying for govt mess; don't like gold NBFCs, says HDFC Sec
The market recovers a bit in the last trading hour of the day. The Sensex is up 41.76 points or 0.22% at 19265.04, and the Nifty up 13.25 points or 0.23% at 5826.85. About 1207 shares have advanced, 1065 shares declined, and 151 shares are unchanged.
Telecom operators Bharti Airtel and Idea Cellular are likely to match Vodafone 2G data tariff cuts. CNBC-TV18 learns from sources that 2G data tariffs cuts are likely between 60-80 percent and cuts are likely in non-metro circles.
On Monday, Vodafone India slashed 2G data tariffs by 80 percent in four circles namely Madhya Pradesh, Karnataka, Chhattisgarh and Uttar Pradesh West.
Its rival Idea is likely to slash tariffs on GPRS 199 and GPRS 299 post-paid plans. Its data tariff cut is likely on recharge coupon of Rs 148 and Rs 73.
Jindal Steel , Sterlite Industries, Tata Steel and Hindalco are other gainers.
3:40 pm The big event: The US Federal Reserve meets this week amid intense speculation over its massive bond-buying campaign, but most economists do not expect it to scale back purchases from their current USD 85 billion monthly pace, reports Reuters.
They do anticipate, however, that Fed Chairman Ben Bernanke will repeat his recent comment that they could be trimmed at one of the next few meetings, if the economy continues to improve. The Fed is currently buying USD 45 billion in Treasuries and USD 40 billion in mortgage-backed securities each month.
Bernanke will also likely emphasize that any reduction does not equate to a tightening of policy, or an earlier lift-off date for overnight interest rates, which the Fed has held near zero since December 2008.
3:30 pm Market closing: The Sensex ends up 17.04 points at 19240.32 while the Nifty closes 5822.25, up 8.65 points (provisional). About 1259 shares have advanced, 1106 shares declined, and 153 shares are unchanged.
3:25 pm Alert :EU antitrust regulators fined nine drugmakers, including Ranbaxy, a total of 146 million euros on Wednesday for blocking the supply of cheaper medicines on the market, with a penalty of 94 million euros imposed on Denmark's Lundbeck, reports Reuters.
3:17 pm Data update: Foreign institutional investors (FIIs) bought Rs 562 crore worth of stock futures on Tuesday, NSE data shows. Derivatives analysts say buying mainly concentrated on Reliance Communication futures.
Expert take: Rupee paying for govt mess; don't like gold NBFCs, says HDFC Sec
The market recovers a bit in the last trading hour of the day. The Sensex is up 41.76 points or 0.22% at 19265.04, and the Nifty up 13.25 points or 0.23% at 5826.85. About 1207 shares have advanced, 1065 shares declined, and 151 shares are unchanged.
Telecom operators Bharti Airtel and Idea Cellular are likely to match Vodafone 2G data tariff cuts. CNBC-TV18 learns from sources that 2G data tariffs cuts are likely between 60-80 percent and cuts are likely in non-metro circles.
On Monday, Vodafone India slashed 2G data tariffs by 80 percent in four circles namely Madhya Pradesh, Karnataka, Chhattisgarh and Uttar Pradesh West.
Its rival Idea is likely to slash tariffs on GPRS 199 and GPRS 299 post-paid plans. Its data tariff cut is likely on recharge coupon of Rs 148 and Rs 73.
Jindal Steel , Sterlite Industries, Tata Steel and Hindalco are other gainers.
02:55pm Development Credit Bank rallied 10 percent after a big block deal on the Bombay Stock Exchange.
About 73.91 lakh equity shares changed hands at Rs 46 a piece. CNBC-TV18 reports that Al Bateen Investment Company is likely to have exited DCB .
Al Bateen Investment Company held 73.9 lakh shares in DCB as on March 2013.
02:40pm Telecom operators Bharti Airtel and Idea Cellular are likely to match Vodafone 2G data tariff cuts, reports CNBC-TV18 quoting sources.
CNBC-TV18 reports that 2G data tariffs cuts are likely between 60-80 percent and cuts are likely in non-metro circles.
On Monday, Vodafone India slashed 2G data tariffs by 80 percent in four circles namely Madhya Pradesh, Karnataka, Chhattisgarh and Uttar Pradesh West.
Idea Cellular shares touched more than 4.5 years high of Rs 150.65, rising over 5 percent today. Bharti Airtel gained nearly 2 percent.
02:10pm Indian equity benchmarks are completely listless as investors are eagarly waiting for the outcome of two-day US Federal Reserve's policy meeting that will end on Wednesday.
The BSE Sensex is up 8.24 points at 19231.52, and the Nifty is up 4 points at 5817.60.
KSK Energy Ventures shares rose nearly 8 percent as the company is looking to raise around Rs 1,000 crore via external commercial borrowing (ECB), reports CNBC-TV18 quoting sources.
CNBC-TV18 reports that the company will raise funds for Wardha and Mahanadi power projects. Debt for Wardha and Mahanadi power projects is around Rs 15,500 crore.
KSK Energy has not responded to CNBC-TV18's query.
Infinite Computer Solutions shares rallied 5 percent to Rs 84.15 amid hefty volumes as the company is commencing buyback offer on June 20. The buyback offer price is unlikely to exceed Rs 120 per share. The buyback offer is of up to 30 lakh equity shares.
1:50 pm Rupee outlook: According to Agam Gupta of Standard Chartered Bank , the Reserve Bank of India intervened in the currency market today by supplying dollars to meet FII demand and curb rupee's fall. The rupee opened at 58.82/USD on Wednesday.
However, he cautions that worst is not over for the Indian currency yet. On the upside, level to watch out for is 59/USD; on the downside 57.50/ dollar remains the key level.
Meanwhile, he expects the US Fed to start tapering off QE in September this year. Emerging Markets may see a relief rally in if Fed's statements about QE are dovish.
1:40 pm News update: Biotechnology company Biocon has planned a capital expenditure of Rs 1,200 crore over the next three years , according to a research report by Citigroup Global Markets. The capex will be funded by operating cash flows and funds left over from the terminated deal with Pfizer .
Biocon is expecting a revenue growth of 15-18 percent and margins to remain stable in the medium-term, Citi said, highlighting key takeaways from the Bangalore-based company's presentation at Citi India Investor Conference.
1:37 pm Oil update: Brent crude price is nearing a 10-month high as investors remain cautious ahead of Federal Reserve meet. Jonathan Barratt of Commodity Broking Services sees bleak chances of crude prices cooling off from current levels.
Infact he feels if the current resistance is broken then Brent Crude can retest level of USD 110 per barrel and WTI USD 102 per barrel.
According to him, the premium at which oil prices are currently trading could be justified based on the nervousness related to Fed meet outcome, but certainly not on account of the recent happenings in Middle East.
1:30 pm Buzzing: Infinite Computer Solutions is commencing buyback offer on June 20. The buyback offer price is unlikely to exceed Rs 120 per share. The buyback offer is of up to 30 lakh equity shares. The stock is quoting at Rs 84.00, up Rs 3.90, or 4.87 percent on the BSE.
FII view: US, Japan to outperform emerging mkt, says JP Morgan
The market is still under pressure as the Nifty is hovering around 5800. The Nifty is down 14.00 points at 5799.60 while Sensex is down 57.05 points or 0.30% at 19166.23.
In a CNBC-TV18 exclusive, sources say that the Indian Hotels open offer for Orient Express may lapse as Indian Hotels didn't modify offer price within the stipulated time. Indian hotels had booked a loss of Rs 305 crore for investment in orient express in the fourth quarter. The stock is up 3.6 percent on the BSE.
Crompton Greaves is under pressure, Jefferies maintains underperform rating and slashed its target price to Rs 75 from Rs 82 on subdued margin profile and return on equities.
Globally it is a mixed session across Asia. Japan closed with almost 2 percent gains on yen's relative weakness against the dollar. Europe is muted in early trade. All eyes are on the Fed's decision due later tonight.
The rupee fell in early trade in sync with emerging market currencies, but has since recovered on dollar selling by PSU banks, probably on behalf of the RBI. Dealers are not expecting the dollar to go past the 59/ dollar mark ahead of the FOMC decision.
12:55pm France's CAC, Germany's DAX and Britain's FTSE fell 0.7 percent each, after opening on a flat note.
12:50pm Agam Gupta Of Standard Chartered Bank expects gradual recovery in the US economic activity in H2CY13. He feels the US Federal Reserve will continue with quantitative easing (QE) till year-end.
"A policy statement from the US central bank will be released Wednesday, and investors expect the current level of purchases will be maintained despite strong recent data pointing to improvements in the economy. Fed Chairman Ben Bernanke recently said the program would be wound down when the economy is strong enough, causing a surge of volatility in financial markets," reports Reuters.
12:40pm European markets opened flat amid volatility, as investors are keenly waiting for the outcome of the US Federal Reserve's two-day policy meeting that will end today.
Reliance Communications remains in most active list of shares after the TRAI allowed telecom companies to charge customers for roaming services.
12:30pm Tata Teleservices (Maharashtra) shares are locked at 10 percent upper circuit at Rs 6.64 as the company said it would hold extra-ordinary general meeting to consider issue of bonus shares. There were pending buy orders of 18,63,965 shares, with no sellers available.
"...the board of directors proposes to issue bonus shares with the promoter/promoter group forgoing their entitlement to the bonus shares, call for an extra-ordinary general meeting of the members of the company and fix the record date for the purpose of the bonus issuance, in order to comply with the minimum public shareholding requirement," the company in its filing said.
The Sensex is down 32.96 points at 19190.32, and the Nifty is down 6.95 points at 5806.65, but the broader markets continue to outperform benchmarks.
BSE Midcap Index rose 0.6 percent and Smallcap Index gained 0.4 percent. Advancing shares outpaced declining ones by 1078 to 972 on the Bombay Stock Exchange.
12:25pm Coal India's official says the company is eyeing majority share in two Australian mining companies that will cost Rs 20,000-25,000 crore, reports CNBC-TV18 quoting cogencis.
"Combined output of two australian companies stands at 25 mtpa. We will finalise stake buy of two australian companies in 2-3 months," cogencis said, quoting company official.
12:15pm Jindal Steel and Power shares rallied nearly 8 percent, topped the buying list. It was the top loser among largecap last week, falling 13 percent after the Central Bureau of Investigation filed First Investigation Report against the company in the coal blocks allocation scam.
Indian rupee continues to hover around previous day's closing value of 58.77 per dollar ahead of outcome of the US Federal Reserve's two-day policy meeting that will end on Wednesday.
12:05pm The NSE Nifty continues to hover around 5800 level amid marginal selling pressure, as globally every market is waiting for the outcome of US Federal Reserve's two-day policy meeting that will end today.
"People will be looking at what Ben Bernanke says because although we do not expect him to say that this USD 85 billion bond buying will be stopped, but he might put some kind of conditions on that," Ashok Mittal, CEO of Emkay Commodities said.
The Sensex is down 35.62 points at 19187.66, and the Nifty is down 6.70 points at 5806.90.
IDFC and Religare Enterprises shares gained nearly 2 percent after both companies prepared plans to apply for banking licences.
11:50 am Asian market check: Japan's Nikkei hit a one-week high on Wednesday, with traders citing the launch of a near USD 780 million investment trust as a driver, while SoftBank Corp rose as it looked likely to win the battle for Sprint Nextel. The Nikkei ended 1.8 percent higher at 13,245.22, reaching its highest since June 12 and closing above the bottom of the Ichimoku cloud in a bullish sign.
The broader Topix index climbed 1.9 percent to 1,106.57, ahead of the outcome of the US Federal Reserve's two-day policy meeting, which will give further indication whether it will soon scale back its stimulus.
11:40 am Alert: India will auction Rs 42.02 crore in unused government debt limits to foreign investors on June 20, a source with direct knowledge of the plans said on Wednesday.
Market regulator Securities and Exchange Board of India (SEBI) had earlier announced it would auction unused debt limits on Thursday, but had not disclosed the exact amount.
These debt quotas give foreign investors the right to invest in debt up to the limit bought.
11:30 am Yellow metal update: Gold fell for a third straight session on Wednesday, hovering near the lowest level in four weeks, as a rally in stocks and investor caution over the Federal Reserve curbing its stimulus programme sapped support for bullion, reports Reuters.
Fed Chairman Ben Bernanke said last month the bank could scale back its USD 85 billion monthly bond purchases if the US economy strengthens, but a lack of clarity on the timing has unsettled markets. A policy statement from the central bank will be released on Wednesday after its meeting.
11:20 am Rupee outlook: Fears of US Fed tapering off quantitative easing (QE) led to a sharp fall in the Indian currency on Tuesday, however it is likely to find support at 59/USD, says Arvind Narayanan, Head of Sales, Treasury & Markets, DBS Bank.
If the Fed is hawkish and hints at continuing the stimulus, then the rupee is likely to strengthen by at least 60-80 paise from the current level, he told CNBC-TV18 in an interview.
From a medium term perspective, Narayanan is fairly bearish on the rupee and expects the weakness to continue for some more time.
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The market is growing weak with the Nifty struggling below 5800 pulled lower by select commodity, rate sensitives and technology stocks. The Sensex is down 86.14 points at 19137.14 while the Nifty is down 24.05 points at 5789.55.
The mid and small caps see significant outperformance.
Reports indicate NTPC and Coal India may settle their coal quality row and sign an FSA soon.
Most of Asia is under pressure with Shanghai, Hang Seng, Korea down 1 percent each. Japan's Nikkei rose 1.1 percent, outperforming its regional peers on the back of a weaker yen, which is trading at 95.5.
Reliance Communications shares continued their gaining streak Wednesday, climbing to a near 29-month high of Rs 128.95.
Telecom shares in general rose during the latter half of Monday's session and the first half of yesterday's session following the TRAI decision allowing them to charge customers for roaming services. However, the stock retreated from their highs after Vodafone unleashed a fresh tariff war by dropping data charges by as much as 80 percent .
However, Reliance Communications has been gaining even as the company is calling for a complete abolition of roaming charges, and like other companies, will be hurt by Vodafone's move to slash data charges.
Dealers attributed the gain to technical and sentiment factors, following the recent agreement with Mukesh Ambani-promoted Reliance Infocomm Jio.
10:59am Tata Communications shares gained one percent, as the company is in talks to sell assets in Mumbai, reports CNBC-TV18 quoting sources.
CNBC-TV18 reports that the telecom company may sell land located in Mumbai for Rs 400 crore.
Tata Communications is planning to raise Rs 1,000 crore via asset sale. It had sold Chennai asset for Rs 192 crore in April.
The company declined to comment on the issue.
10:50am Telecom operator Bharti Airtel shares recouped some of losses seen in previous session, gaining 1.3 percent on short covering.
In fact, its peers Reliance Communications and Idea Cellular are trading at 29-month high and nearly 4.5-year high, rising 3 percent and 2 percent, respectively.
On Monday, TRAI allowed telecom service providers the option of either charging a flat upfront fee, or rates set by TRAI, for roaming services.
10:40am Jindal Steel topped the buying list, rising 3.65 percent. The stock had fallen around 20 percent in first two days of last week, on news of the Central Bureau of Investigation filing a First Information Report against the company in the coal blocks allocation scam.
10:30am Equity benchmarks continue to trade lower amid volatility. The Sensex is down 81.22 points at 19142.06, and the Nifty is down 22.80 points at 5790.80.
Investors are cautious ahead of the outcome of two-day Federal Reserve's policy meeting that will end today.
Amit Gupta, Head- Derivatives at ICICI Direct said upside for the Nifty capped at 6000 in near-term.
"If we look at India volatility index (VIX) it was at one year high around 19.5, but now it is around 18 level. So it has come down from those levels and in yesterday's trade also we did not see any kind of option buying before Federal Reserve's policy meeting. That suggests whatever event comes the downsides are likely to be arrested around 5,650-5,700 and on the higher side if we are going up, then 5,950-6,000 upsides also seems to be arrested in the near-term," Gupta reasoned.
10:20am Religare Enterprises gained 2.6 percent as promoters have agreed to dilute their shareholding to 49 percent to meet banking license norms. Promoters have appointed Axis capital as advisors for the stake sale.
Promoters hold 71.75 percent in the company as on March 2013.
RBI has asked for application of bank licenses after a long period of nine years. The final guidelines were announced by the central bank on February 22, 2013.
Indian rupee is moving towards its record low of 58.98 per dollar that touched on June 11. It depreciated by 9 paise to 58.87 per dollar.
10:10am Equity benchmarks fell 0.5 percent in morning trade, weighed down by further profit booking in financials, FMCG and technology stocks.
BSE Sensex is down 109.85 points to 19113.43, and the Nifty is down 31.20 points to 5782.40, but the broader markets outperformed benchmarks.
BSE Midcap and Smallcap indices gained 0.3-0.4 percent. Advancing shares outnumbered declining ones by 820 to 539 on the Bombay Stock Exchange.
Country's largest lenders State Bank of India , ICICI Bank and HDFC Bank slipped 0.4-0.7 percent.
10:00 am Market check: The Nifty slips below 5800 and is currently at 5789, down 23.80 points while the Sensex is down 85.77 points at 19137. NTPC , ONGC , Coal India are major losers.
9:55 am FII view: Adrian Mowat, Chief Asian and Emerging Equity Strategist, JPMorgan expects US and Japanese equities to outperform emerging markets. However, among the emerging markets he likes India and Mexico. Mowat is concerned that vulnerability continues to be a concern for Indian economy.
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9:50 am Update: Domestic air travel surged around 5 percent year-on-year in May, reversing the 15-month long trend of declining traffic, according to the Directorate General of Civil Aviation
While Indigo retained numero uno position with a market share of 29.5 percent month-on-month, Jet Airways and subsidiary Jet Konnect duo secured second position with a combined 22.5 percent.
SpiceJet with 19.8 percent share overtook bigger rival Air India which secured 19.1 percent share. Wadia-Group promoted GoAir has 9 percent market share during the period.
9:42 am Buzzing: Promoter of Nitesh Estates has released 1,11,64,248 equity shares (7.66 percent) of the company from the pledge made with a financial institution by repaying the financial obligations. The stock is quoting at Rs 11.66, up Rs 0.23, or 2.01 percent on the BSE.
Expert talk: Close long positions if Nifty stays at low levels, says Sukhani
9:40 am Gainers: Jindal Steel (up 1.4 percent), Bharti Airtel (up 0.98 percent), Tata Steel , GAIL and BHEL are top gainers in the Sensex.
9:34 am Market check: The Sensex is down 71.18 points at 19152.10 while the Nifty slips 17.50 points to 5796.10. About 563 shares have advanced, 380 shares declined, and 72 shares are unchanged.
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The market opens on a mute note with the Nifty at 5805.75 down 7.85 points and the Sensex is up 7.62 points to be at 19230.90. About 141 shares have advanced, 111 shares declined, and 27 shares are unchanged.
Stock specifically, IDFC jumps 2.8 percent as the board has approved application to RBI for obtaining banking licence. TCS , Dr Reddys Labs , Hero Motocorp , BHEL and Tata Power are major gainers in the Sensex.
Meanwhile, in a path breaking move the Mayaram Panel recommended abolishing 26 percent cap for foreign direct investment (FDI). The panel wants the minimum limit for FDI across sectors to be set at 49 percent. Also, it has recommended fully opening up of sectors with a 74 percent FDI cap --Rangarajan welcomed the proposals.
The Indian rupee opened flat at 58.81 per dollar against 58.77 on Tuesday. The euro stayed above 1.33 to the dollar. The dollar index continued below the 81 mark. However, pressure on the yen continues.
Globally, US markets rallied and finished near session highs Tuesday, with the Dow surging nearly 150 points, as the Fed began their two-day meeting to discuss the future of the central bank's bond-buying program. The CBOE volatility index closed below 17.
On the economic data front, housing starts rose 6.8 percent in May to a seasonally adjusted annual rate of 914,000 units. Meanwhile, consumer prices edged up 0.1 percent in May.
US president Barack Obama has hinted that he could be looking for a new chairman for the US Federal Reserve. Obama said in an interview that Ben Bernanke has stayed longer than he wanted as the chairman of the Federal Reserve.
Asian markets mirrored Wall Street gains on in the morning trade on Wednesday; Japanese market was up almost 2 percent.