Sensex falls 244 points, Nifty ends below 8050; pharma steady

03:30 Market closing: After a tough struggle, the market ended on a lower note. The Sensex was down 244.48 points or 0.9 percent at 26816.56 and the Nifty slipped 63.50 points or 0.8 percent at 8042.00. About 1750 shares advanced, 1310 shares declined, and 96 shares were unchanged.

Cipla, Hero, Dr Reddy's Labs, HDFC Bank and Infosys were top gainers while Hindalco, Tata Steel, ONGC, Sesa Sterlite and Coal India were among the laggards.

02:55pm Atlas Cycle in demand
Atlas Cycle rallied 8 percent after Uttar Pradesh Chief Minister Akhilesh Yadav announced exemption of VAT for bicycles costing less than Rs 3,500.

"A large number of population in the state uses bicycles as their mode of conveyance specially farmers, labourers, students and the poor people and is used in both urban and rural areas," a press release quoting the Chief Minister said here.

"It is most necessary to give impetus to the economic growth of poor and weaker sections of society", he said while deciding to remove VAT on bicycles costing less than Rs 3,500.

Therefore, keeping in view the welfare of these sections, the state government has decided to lower the cost of bicycles", he said.

The Chief Minister said bicycle is also a mode of travel which is pollution free and helps in fitness, reports PTI.

02:40pm Shipping stocks on buyers' radar
ABG Shipyard, Essar Shipping and GE Shipping rallied more than 7 percent followed by Bharati Shipyard, Shipping Corporation, Shreyas Shipping and Varun Shipping with 3.5-5 percent.

Transport Minister Nitin Gadkari says the cabinet note on shipbuilding policy is ready.

02:30pm Lupin at record high
Shares of Lupin hit a record high of Rs 1,386 on the Bombay Stock Exchange on a media report that the company is in advanced talks to sign a blockbuster deal with Merck Serono.

As part of the deal, Lupin will manufacture Merck Serono's USD 1.5 billion worth branded mature drugs at its facilities, a media report said quoting unnamed sources.

Meanwhile, Citi says business development remains a core part of Lupin's growth strategy, with the latest deal (Salix) providing it a good foothold in Canada.

Lupin on last Friday entered into a definitive agreement with Salix Pharmaceuticals. Under this agreement, Salix granted Lupin the exclusive right to market, distribute and sell certain Salix products in Canada.

02:20pm Rupee weakens further
Indian rupee is trading at 61.10 a dollar, down 45 paise compared to Friday's close.

Brokerage house Emkay Share & Stock Brokers feels a combination of global events, slower-than-expected GDP growth and a fairly valued rupee could drag the currency down to 63-64 to the dollar over the next six months.

In the last few months, the dollar has strengthened against developing market currencies, mainly the Euro, due to the diverging monetary policies being followed by the US Fed and the ECB.

The dollar index has been now climbing for 9 weeks in a row and is currently trading above 84, with the US dollar quoting close to a six-year high against the Japanese.

But the strength in emerging market currencies is unlikely to sustain, and a trend reversal is on the cards, feels Dhananjay Sinha, Head of Research, Emkay.

02:10pm Inflation at 5-year low
Inflation data based on wholesale price index (WPI) for August hit a five-year low at 3.74 percent courtesy declining vegetable prices and other food articles. August WPI inflation stood at 5.19 percent in July. A CNBC-TV18 poll estimated it to be at 4.1 percent.

Food inflation in August hit a lowest level since January 2012. It eased to 5.15 percent versus 8.43 percent on a month-on-month (MoM) basis. Vegetable prices contracted 4.88 percent.

Further, August fuel inflation also hit a five-year low with the fuel and power group inflation declining to 4.54 percent versus 7.40 percent (MoM).

02:00pm Equity benchmarks continued to reel under selling pressure with the Sensex declining 194.86 points to 26866.18 and the Nifty falling 54.45 points to 8051.05 despite fall in inflation but the broader markets outperform.

The BSE Midcap and Smallcap indices gained 0.4 percent and 0.77 percent, respectively. Advancing shares outnumbered declining ones by a ratio of 1707 to 1223 on the BSE.

Shares of TCS, HDFC, ITC, Reliance Industries, ONGC, Infosys, Larsen and Toubro, ICICI Bank, Mahindra and Mahindra, Tata Motors and Axis Bank rallied 0.7-1.8 percent.

Jindal Steel and Hindalco Industries remained top losers, down 3-4 percent while Cipla kept its top position in the buying list, up 2.5 percent followed by Hero Motocorp with 1.5 percent. HDFC Bank, SBI, BHEL, and Dr Reddy's Labs advanced 0.4-0.6 percent.
 
In the midcap space, GSFC, Trent, Zydus Wellness, Fortis Healthcare and ABG Shipyard surged 8-11 percent while HMT, Tilak Finance, Kaveri Seed, Bhushan Steel and Jaypee Infra lost 4-7 percent.

Among smallcaps, NDTV, Minda Industries, MBL Infra, Hubtown and Zensar Tech jumped 11-20 percent whereas PFL Infotech, Signet Industries, Pearl Agri, Swadeshi Industries and Sanghi Industries slipped 5-20 percent.

1:55 pm Interview: Bajaj Electricals has secured fresh orders worth Rs 518 crore in the Engineering and Projects (E&P) division. In an interview to CNBC-TV18, Shekhar Bajaj, CMD of Bajaj Electricals , said the company has received eight orders for rural electrification in the Madhya Pradesh region. The company's order book stands at Rs 3,178 crore as on September 13, which is at the highest-ever level.

Bajaj said that orders have been coming too fast for the company, hence the management has consciously decided on slowing down on the order intake as it wants to focus more on the execution aspect. Bajaj Electricals is targetting Rs 1,500 crore of revenues in FY15 and may earn Rs 500 crore (revenue) from the E&P project in H1FY15. Bajaj said the company is not participating in any low-margin orders currently.

1:30 pm Market outlook: Mahantesh Sabarad, Deputy Head of Research at SBI Cap Securities says it is unlikely that Nifty will go beyond 8300 in a hurry because the macro triggers are not in place yet to propel the market higher. Would wait for a correction to buy into, he adds. According to him the Gross Domestic Product (GDP) for the year could be just below 6 percent.

Answering a query on pharma sector, he says the house is overweight on the pharma sector. Although the healthcare in US is set to growth only by 4-5 percent in value terms, Indian companies are likely to get much bigger market in the US. The house prefers Dr Reddy's over Cipla because the stock has been a lagging its peers in terms of valuations but has a very strong ANDA pipe lines, says Sabarad.

Amongst midcap stocks, the house is bullish on Eicher Motors with a target price of Rs 13,150. 

The market fails to take cues from positive WPI data as August data comes in at a 5-year low at 3.74 percent august fuel inflation also comes in at a 5-year low at 4.54 percent.

The Sensex is down 197.57 points or 0.7 percent at 26863.47 and the Nifty slips 53.25 points or 0.66 percent at 8052.25. About 1621 shares have advanced, 1200 shares declined, and 99 shares are unchanged.

Hindalco, Tata Steel, HDFC, Wipro and GAIL are top laggards while Cipla, Hero, HDFC Bank, Dr Reddy's Labs and SBI are major gainers in the Sensex.

RBI Governor Raghuram Rajan roots for market prices of fuel. He says government must use current juncture to eliminate fuel subsidies. The RBI governor also says IIP data shows that recovery is evident and inflation is on the RBI's trajectory.

Crude oil futures fell by 1.82 percent to Rs 5,569 per barrel today as speculators trimmed
positions amid a weakening trend in Asian trade after a sharp slowdown in Chinese industrial production.

The trading sentiment eased at futures trade after crude oil prices fell in Asian trade today after a sharp slowdown in Chinese industrial production raised concerns about slackening demand in the world's top energy consumer, analysts said.

12:50pm FII View
Prabhat Awasthi, Nomura says a stronger dollar, driven by expectations of divergent monetary policies of the Fed and other major developed world central banks is positive for Indian equities on an overall basis.

Historically, broad dollar strength typically begins 6-9 months ahead of a rate tightening cycle, a phase we believe India is now entering, he adds.

12:40pm Transport Minister says
Transport Minister Nitin Gadkari said Gail will get three LNG carriers from domestic manufacturers. "Rs 4000 crore will be invested in JNPT," he added.

He said, "We target developing 30 km of road per day."

12:30pm Interview
The Sensex tumbled 212.98 points to 26848.06 and the Nifty fell 58.95 points to 8046.55 while TRF is locked at 5 percent upper circuit.

TRF, a Tata Enterprise, has bagged an order worth Rs 354 crore from BHEL, Bangalore for design, engineering, manufacturing, supply, commissioning of a conveying and crushing system with associated equipment for ore, flux, coal and coke handling system for NMDC's iron and steel plant in Nagarnar, Chattisgarh.

Sudhir Deoras, Managing Director is confident of booking revenues and margins on this order from second half of this fiscal itself. With a turnaround on its bottomline, the firm aims to achieve revenues of Rs 1500 crore for FY15 on consolidated basis, he says in an interview with CNBC-TV18.

With an order book of Rs 1500 crore, its debt on book stands at Rs 500 crore on consolidated basis, he adds.

12:20pm RBI Governor
The Reserve Bank of India wants to make sure that the country's banking system is cleaned up so that there is no room for fraud during stressed times, Governor Raghuram Rajan told a banking conference.

The government's step to curtail fiscal deficit is helping the central bank's monetary policy, Rajan said. But one of the biggest concerns was that enough credit was not flowing to the agricultural sector, he said.

12:10pm Market Expert
Mahantesh Sabarad, Deputy Head of Research at SBI Cap Securities says it is unlikely that Nifty will go beyond 8300 in a hurry because the macro triggers are not in place yet to propel the market higher. Would wait for a correction to buy into, he adds.

According to him, the Gross Domestic Product (GDP) for the year could be just below 6 percent.

12:00pm Equity benchmarks did not show any kind of recovery in noon trade despite significant fall in WPI inflation. The Sensex fell 175.78 points to 26885.26 and the Nifty declined 49.10 points to 8056.40.

About 1560 shares have advanced, 1146 shares declined, and 89 shares are unchanged.

WPI inflation in August dropped to 3.74 percent, the lowest level in last five years, from 5.19 percent in previous month driven by food and fuel. However, June WPI inflation was revised upward to 5.66 percent from 5.43 percent earlier.

Metals stocks remained under pressure with Hindalco Industries, Tata Steel and Sesa Sterlite falling 1.5-3 percent after weak China data. China on Saturday said that industrial production grew 6.9 percent last month, its weakest rate since December 2008. The key indicator slumped from 9.0 percent growth in July.

Shares of HDFC, ITC, ICICI Bank, Reliance Industries, Infosys, ONGC, TCS, L&T and M&M dropped 1-2 percent. However, Cipla remained on buyers' radar, up 2.8 percent followed by HDFC Bank, Hero Motocorp and Dr Reddy's Labs with 0.7-0.9 percent.

11:55 am Inflation data:  The annual rate of inflation, based on monthly WPI, stood at 3.74 percent (provisional) for the month of August, 2014 (over August,2013) as compared to 5.19 percent (provisional) for the previous month and 6.99 percent during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 3 percent compared to a build up rate of 5.23 percent in the corresponding period of the previous year.

11:35 am RBI views: With crude oil prices falling globally, the Reserve Bank governor on Monday pitched in for eliminating diesel subsidies completely. However, he cautioned that geopolitical risks -Ukraine and Middle East - continue to remain and these low crude prices may be a temporary phenomenon.

On the macro-economic front, the IIP and CPI data released on Friday point to the fact that recovery is still some time away. But Rajan says India is on path to recovery. He says when compared to other emerging markets, what worked well for India is the emergence of a stable government.

11:20 am Buzzing: Shares of Mastek are roaring with hefty gains after it announced demerger of the insurance products and services business into a separate listed company. The stock soared 15 percent intraday, hitting 4.2 year high at Rs 269.50 per share.

''The board has approved the demerger of the insurance products and services business of into Minefields Computers to be renamed as Majesco followed by transfer of the offshore insurance operations by Majesco to Majesco Software and Solutions India, a wholly owned subsidiary of Majesco Mastek Insurance Software and Solutions,'' it said in a press statement issued to the exchanges.

As per the company, Mastek shareholders will get one equity share of Majesco for every equity share held in Mastek, in addition to their existing Mastek shares. It also said that Majesco is proposed to be listed on the BSE and NSE where Mastek is currently listed.

The market continues to slide further with the Nifty struggling below 8050. The 50-share index is down 59.30 points at 8046.20. The Sensex slips 206.23 points at 26854.81.

Brent crude is seeing further softening to 26-month lows. Globally, disappointing Chinese data weighs on Asian markets. Traders are also cautious ahead of the FOMC policy decision.

Data released on Saturday showed China's factory output grew at the weakest pace in nearly six years in August, while growth in other key sectors also cooled.Indeed, there are worries that Beijing may be reluctant to provide additional stimulus for now, although many suspect the Chinese authorities will be forced to do should growth threaten to undershoot the official 7.5 percent target significantly.

The bearish Chinese data has added to worries about a 40-percent slide in iron ore prices this year and further soured sentiment for commodity currencies.

Metals stocks are under pressure. Hindalco and Tata Steel are major laggards.

Healthcare stocks are still gaining. Cipla is the top Nifty gainer as reports indicate Gilead Sciences is tying up Cipla and Strides for Hepatitis C drug.

11:00am FII View
The Sensex plunged 199.13 points to 26861.91 and the Nifty lost 55.35 points to 8050.15. However, technical analyst Chris Roberts of Asianomics believes India is a standout performer this year versus its Asian peers. He is comfortable on India's long-term potential though he feels Asia's third largest economy may pose some risk reward concerns in the short-term.

Roberts continues to be overweight on India and is quite confident that the market hasn't finished its bull run and there is a lot of potential to take it to a much higher level.

He expects Sensex to double from its current levels of around 27000 in the long-term. Nifty is likely to scale to higher levels even from current levels, he believes.

On the downside, Nifty may find support at 7700-7800 levels, he adds.

10:45am KS Oils in News
The Sensex fell 216.40 points to 26844.64 and the Nifty declined 62.05 points to 8043.45 whereas shares of KS Oils are locked at 5 percent upper circuit as lenders may sell company's businesses to get their money back.

Bankers shortlisted bidders to sell KS Oils' edible oil business and wind power assets, reports CNBC-TV18 quoting unnamed sources.

Currently the company has 78 MW of wind power assets. It is learnt that bankers shortlisted 10-15 players for wind power assets sale, through which they are likely to get Rs 200-250 crore.

Ruchi Soya is one of the players bidding for KS Oils' edible oil business, say sources, adding lenders appointed SBI Capital Markets to auction 92 windmills.

10:30am Oil slips further
The Sensex declined 193.64 points to 26867.40 and the Nifty dropped 55.40 points to 8050.10.

Oil prices fell in Asia today after a sharp slowdown in Chinese industrial production raised concerns about slackening demand in the world's top energy consumer, analysts said.

US benchmark West Texas Intermediate for October delivery eased USD 1.06 to USD 91.21, while Brent crude for October fell 63 cents to USD 96.48 in mid-morning trade.

China said on Saturday that industrial production grew 6.9 percent last month, its weakest rate since December 2008. The key indicator slumped from 9.0 percent growth in July, reports PTI.

10:20am Interview
The Sensex fell 211.13 points to 26849.91 but Info Edge India rose 1.04 percent to Rs 882.30.

Providers of online classifieds in recruitment, matrimonial, real estate and education Info Edge has raised Rs 750 crore through the qualified institutional placements or QIP route by selling 1.01 crore shares at Rs 740 per share.

Hitesh Oberoi, CEO and MD, Info Edge, says the company is raising funds to create a war chest for 99Acres, for acquisitions and for investing in existing companies.

He says the company keeps scouting the market for acquisitions all the time considering real estate - the online space - is such a hot sector. According to him, real estate will be a good sector for the medium term, even if it means clocking losses in the short term.

''The market has only just begun to recover, with continued recovery Naukri will bounce back and see profits too,'' Oberoi says about Naukri.com.

He says when investors look at Info Edge, they don't see past performances but look for future potential in all the businesses it has invested into.

10:10am Market Expert
Sanjay Dutt, director, Quantum Securities recommends selling at every single bounce now.

According to him, the global landscape is unclear right now and it is best to stay away from the market currently. Dutt expects market to correct in the short-term though the correction may not be more than 10 percent.

He does not see Nifty falling below 7700-7800. He, however, maintains a bullish stance on the Nifty from a longer-term perspective

10:00am Equity benchmarks extended losses in morning trade with the Sensex falling 216.31 points to 26844.73 and the Nifty losing 64.65 points to 8040.85 weighed down by oil & gas, banks, capital goods, auto and FMCG stocks.

However, the loss in broader markets was less compared to benchmarks. The BSE Midcap and Smallcap indices were down 0.5 percent and 0.2 percent, respectively. About 1030 shares have advanced, 1147 shares declined, and 70 shares are unchanged.

Gail, Tata Steel and Hindalco Industries tumbled over 2 percent followed by HDFC, ITC, ICICI Bank, L&T, Infosys, Reliance Industries, Tata Motors, ONGC, M&M, Axis Bank and SBI with 1-1.5 percent.

However, HDFC Bank bucked the trend, up over 1 percent as Managing Director Aditya Puri is affirmative that the growth will get back to 25 percent and even 30 percent growth when the economy gets back to 6-7 percent growth, which he expects by FY16. While the bank had grown at 25 percent for the past around 76 quarters, growth in the last four quarters came down towards 20 percent.

Cipla extended gains to 3 percent in addition to 6 percent rally in previous session while Dr Reddy's Labs rose 0.8 percent. Sun Pharma climbed 0.5 percent on getting USFDA nod for Levonorgestrel oral tablets (a contraceptive drug).

9:50 am Market check: Global cues continue to drag Indian benchmark indices. The Sensex is down 238.76 points at 26822.28 and the Nifty slips 71.55 points at 8033.95. About 956 shares have advanced, 1094 shares declined, and 65 shares are unchanged.

Hindalco, Tata Steel, GAIL, M&M and HDFC are major laggards whlile healthcare stocks are holding up with Cipla, Dr Reddy's Labs and Sun Pharma as major gainers in the Sensex.

9:40 am FII view: Mahesh Nandurkar, CLSA says India is the best performing emerging market this year and the coming festive season should be a barometer of its economic recovery.

''Note that autos, cement and power are already showing signs of improvement. We like domestic cyclical recovery plays such as banks, autos and cement. Among exporters, we prefer IT,'' he adds.

Prabhat Awasthi, Nomura says a stronger dollar, driven by expectations of divergent monetary policies of the Fed and other major developed world central banks is positive for Indian equities on an overall basis.

Historically, broad dollar strength typically begins 6-9 months ahead of a rate tightening cycle, a phase we believe India is now entering, he adds.

9:30 am Buzzing: Shares of Fortis Healthcare are locked at 10 percent upper circuit, hitting Rs 134 per share intraday (three-year high). Investors are euphoric as its Singapore subsidiary sold its entire stake in RadLink-Asia SGD 137 million to Medi-Rad Associates (Medi-Rad).

Brokerages are bullish on it post the divestment. Macquarie maintains an outperform rating on the stock with target of Rs 140, stating that divestment in remaining international business would make it almost debt-free. After exiting from RadLink, net debt of Fortis is likely to fall to Rs 400 crore, significantly down from a peak of Rs 7000 crore at the start of FY13.

With a buy rating and a target of Rs 170 per share, Citi says that the move reiterates Fortis' focus on its Indian operations as International assets now contribute less than 2 percent to revenues and all its profits come from the Indian business. 

The market has started to slide in opening itself on weak global cues. The Sensex is down 127.53 points at 26933.51, and the Nifty slips 35.15 points at 8070.35. About 458 shares have advanced, 369 shares declined, and 38 shares are unchanged.

GAIL, ONGC, Sesa Sterlite, SBI, Reliance fall around 1 percent. Cipla, Bajaj Auto, TCS, Wipro and Dr Reddy's Labs are top gainers in the Sensex.

The Indian rupee slipped in early trade. It has opened lower by 27 paise at 60.92 per dollar against 60.65 Friday.In the currency markets, the dollar is flat against the yen, near a six-year peak. The euro is also steady at 1.29 to the dollar.

Agam Gupta of Standard Chartered said, "The FOMC meet this week could take a hawkish tone and will continue to play on the market sentiment. The rupee is likely to trade in the range of 60.75-61.15/dollar for the day."

In what came as a double whammy for the economy, retail inflation slowed only marginally coming in at 7.8 percent for August due to a spike in food prices. Growth too is crawling with the industrial production in July growing by a mere 0.5 percent.

Asian markets are in the red over weak Chinese data- August industrial output rose 6.9 percent on year, its slowest pace since 2008, while fixed-asset investment and retail sales both missed forecasts. However, overall trading volumes are light with Japan being closed for a holiday.Over the weekend, china released a raft of data that raised concerns about a weakening economy.

In other asset classes, the big news continues to be the slide of Brent Crude prices.Brent has now slipped below the USD 97 dollars per barrel mark pressured by a strong dollar, weak demand and ample supplies. The oil is its weakest in two years.

However, no relief seems to be in place for gold either in the commodity space. It has dropped to fresh eight-month lows on fears that the Fed may signal an early interest rate hike at this week's policy meeting, while the strength in the dollar and weak physical demand also weighed on bullion.