Sensex falls 314 points; weak Q4 nos drag Nifty below 8400

The market fell more than 1 percent on Monday, reacting to the disappointing March quarter earnings of ITC and SBI. The broader markets outperformed benchmarks marginally. The 30-share BSE Sensex fell 313.62 points to 27643.88 and the 50-share NSE Nifty closed below the 8400-mark, down 88.70 points to 8370.25. The BSE Midcap and Smallcap indices closed flat with negative bias.

Experts believe the market may remain rangebound for the next couple of months.

Tushar Pradhan of HSBC Global Asset Management believes there is no consensus on whether the economy has turned.

Meanwhile, the negative news in the market, in terms of poor quarterly earnings, has now been taken care of and it will now take cues from positive global sentiments and the RBI policy on June 2, said Dipan Mehta, member, BSE & NSE.

The market breadth was in favour of declines with the advance:decline ratio of 1153: 1532 on the Bombay Stock Exchange.

FMCG, capital goods, banking & financials, healthcare, metals and select technology stocks saw selling pressure.

ITC dropped 3.3 percent after posting a dismal set of earnings in the fourth quarter. Most brokerages maintained their ratings, but cut target price and the FY16-17 EPS estimates on the stock.

CLSA has downgraded Tata Steel to sell with a target price of Rs 290 per share after it reported dismal March quarter earnings. The brokerage also slashed FY16-17 EBITDA by 9-19 percent. Shares of the steel conglomerate fell 2.5 percent.

Tata Motors plunged 2 percent and BHEL declined 0.2 percent ahead of March quarter earnings on May 26. A CNBC-TV18 poll expects Tata Motors to report 0.3 percent growth in Q4 profit and BHEL to register 57.5 percent decline in profit.

Shares of HDFC, Infosys, L&T, Reliance Industries, State Bank of India, Axis Bank, Vedanta and HUL dropped 1-3 percent. However, ONGC bucked the trend, up 1.9 percent followed by Bharti Airtel with 1.25 percent gains and Wipro with 0.6 percent upside.

Lupin gained 1 percent while Tata Power fell 1.2 percent on news that Lupin will replace Tata Power in the BSE Sensex 30 list with effect from June 22.

Public sector lender Canara Bank was down 3.7 percent after its asset quality weakened in Q4. Profit grew by 0.3 percent while net interest income fell 1.9 percent.

Asian markets outperformed Indian equities today. Shanghai surged 3.35 percent, closing at its highest level since 2008 after China Government announced a list of more than 1000 infra projects that it is inviting private investors to help fund and build.

03:30 pm Market closing: After a weak trading session, the market ended on lower note. The Sensex was down 310.58 points or 1 percent at 27646.92 and the Nifty ended down 91.30 points or 1 percent at 8367.65. About 1163 shares advanced, 1521 shares declined and 163 shares were unchanged. Vedanta, ITC, Tata Steel, HDFC and GAIL were major laggards in the Sensex. Among the gainers were ONGC, Bharti Airtel and Wipro.

03:00 pm Result: JK Cement reported 8.5 percent drop in standalone net profit at Rs 69.84 crore for the quarter ended March 31, 2015.

The company had posted a net profit of Rs 76.38 crore in corresponding quarter of previous fiscal (2013-14), JK Cement said in a BSE filing.

The company's standalone total income from operations increased to Rs 916.05 crore in the fourth quarter of last fiscal, over Rs 832.71 crore in corresponding period.

02:45pm Market Update: The Sensex tanked 325.60 points or 1.16 percent to 27631.90 and the Nifty dropped 88.60 points or 1.05 percent to 8370.35.

About 1079 shares have advanced, 1465 shares declined, and 171 shares are unchanged on the BSE.

02:30pm Tata Motors Q4 nos may be muted: Tata Motors will announce its fourth quarter earnings on Tuesday. Consolidated numbers are expected to be a muted because of JLR's product transition phase while standalone business (domestic) is seen some improvement during the quarter due to rebound in passenger vehicle and medium & heavy commercial vehicle sales.

Consolidated profit after tax may increase 2.85 percent year-on-year to Rs 4,030 crore and revenue is seen rising 3.2 percent to Rs 67,446 crore during January-March quarter, according to a CNBC-TV18 poll.

Operating profit in March quarter is expected to rise 1.6 percent to Rs 10,163 crore while margin may decline 27 basis points to 15.03 percent compared to a year ago period.

02:00pm Market Check
The market extended losses in afternoon trade with the Sensex falling close to 300 points, dragged by banking & financials, capital goods, technology and FMCG stocks.

The 30-share BSE Sensex fell 268.67 points or 0.96 percent to 27688.83 and the Nifty declined 73.80 points or 0.87 percent to 8385.15. However, the broader markets continued to outperformed benchmarks, trading flat.

About 1068 shares have advanced, 1422 shares declined, and 150 shares are unchanged on the Bombay Stock Exchange.

Tushar Pradhan of HSBC Global Asset Management feels the market will be choppy for the next two months. There is no consensus on whether the economy has turned, he believes.

HDFC, ITC, Vedanta and Tata Steel topped the selling list on Sensex, down 2-3 percent followed by L&T, Reliance Industries, SBI, Axis Bank, HUL, Infosys, ITC and Tata Motors with around a 1 percent loss.

The rupee traded marginally weaker today, down 9 paise at 63.61 a dollar against a close of 63.52 on Friday on the back of sustained dollar buying by FIIs and weakness in local equities.

Asian markets have outperformed Indian equities today. Shanghai surged more than 3 percent, closing at highest level since 2008 after China government announced a list of more than 1000 infra projects that it is inviting private investors to help fund and build. Shanghai is now up almost 50 percent this year against Indian market returns of 2 percent.

12:50pm Market Update: The market extended losses in afternoon trade with the Sensex falling 230.02 points to 27727.48 and the Nifty declining 61.90 points to 8397.05, dragged by index heavyweights like ITC, HDFC, Reliance Industries, Infosys and L&T. About 1084 shares have advanced, 1288 shares declined, and 154 shares are unchanged on the BSE.

12:40pm Vodafone IPO: UK-based Vodafone Group Plc has revived its plans to list its local wholly-owned subsidiary Vodafone India at the domestic bourses, sources have told CNBC-TV18.

Following several reported attempts to list India's second-largest telecoms carrier, it is learnt that Vodafone has now appointed NM Rothschild to work on the contours of a public listing, which is expected to be among the largest ever in India at USD 3-4 billion.

The report, which is expected to help the parent company arrive at the subsidiarys valuation, is expected to be submitted by August 2015. Vodafone is planning to complete the IPO process by the last (March) quarter of the current fiscal (2015-16).

Sources said Vodafone India's enterprise value (expected market value plus debt minus cash) is seen at over USD 30 billion (about Rs 1.90 lakh crore), after accounting for the company's USD 11 billion debt.

Rival Bharti Airtel's market capitalization currently stands at about Rs 1.63 lakh crore (about USD 25.6 billion).

12:20pm Market Expert: All negative news in the market, in terms of poor earnings, has now been taken care of and the market must move higher from hereon, says Dipan Mehta, member, BSE & NSE.

According to him, the market will now take cues from global events and the Reserve Bank of India's monetary policy on June 2. Experts will focus on every move by the RBI on rate action now given that inflation is cooling off, he added.

12:00pm Market Check
The market continued to be rangebound in noon trade with the frontliners falling half a percent each. However, the broader markets outperformed marginally.

The Sensex declined 126.46 points to 27831.04 and the Nifty fell 30.10 points to 8428.85. About 1117 shares have advanced, 1159 shares declined, and 139 shares are unchanged on the BSE.

ITC drops 2.5 percent after posting a dismal set of earnings in the fourth quarter. Most brokerages maintained their ratings but cut target price and the FY16-17 EPS estimates on the stock.

SBI recovered from the day's low to trade flat. Goldman Sachs retained its buy rating, but cut target to Rs 360 versus Rs 370 per share while Citi maintained its buy with a target of Rs 415 per share on the stock.

Among the midcaps, Mphasis rallied 3.5 percent after the company beat street estimates on the revenue and profit front. And some other stocks in news today, Lupin gained 2 percent while Tata Power fell almost 1 percent on news that Lupin will replace Tata Power in the BSE Sensex 30 list with effect from June 22.

11:50 am Buzzing: Shares of Somany Ceramics gained 5 percent and Ipca Laboratories rallied 3.5 percent intraday as foreign investors can invest more in both companies. Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 40 percent of the paid up capital of Somany Ceramics Limited under the Portfolio Investment Scheme (PIS), RBI said in a notification.

As per data available on BSE, FIIs held 5.79 percent in Somany Ceramics, the tiles maker, as of March 31, 2015.

Also, RBI has removed Ipca Laboratories from its ban list for further investment by foreign investors, raising such limit to up to 35 percent.

11:30 am FII view: Given the lack of cues that can push markets higher from current levels, Indian equities are likely to continue on their consolidation path they have treaded so far this year, believes Tushar Pradhan, CIO, HSBC Global Asset Management. In an interview with CNBC-TV18, Pradhan said that till as long as earnings picked up in a few quarters, markets could remain choppy. This will not be a unilateral market. It will be a stock-pickers market, he said. He added that FY16 and FY17 looked solid from an earnings standpoint.

The market is still under pressure as the Sensex is down 132.56 points or 0.5 percent at 27824.94, and the Nifty is down 32.40 points or 0.4 percent at 8426.55. About 1044 shares have advanced, 983 shares declined, and 150 shares are unchanged.

Oil & gas stocks are in green while midcaps are outperforming. Bharti Airtel, ONGC, M&M, Reliance and HDFC Bank are top gainers in the Sensex. Among the major losers in the Sensex are ITC, Vedanta, HUL, Coal India and Tata Steel.

Crude oil futures edged up, buoyed by healthy Asian appetite and demand from the US driving season. Front-month Brent crude prices had gained 2 cents to USD 65.39 per barrel by 0312 GMT. US crude prices were up 14 cents at USD 59.86 a barrel.

In China, crude imports hit a record 7.4 million barrels per day in April despite a slowing economy, driven largely by healthy car sales.

10:40am Interview: Ceat'sMD Anant Goenka said the tractor and motorcycle segment continue to see slowdown. According to him, the auto market remains sluggish. The company is facing lot of pressure from Chinese Tyre makers in export market, he added. Ceat is expecting big challenges in exports in March quarter.

Goenka, however, is confident of a pick up in growth from hereon. He believes mining sector is beginning to show some activity now. Expect FY16 to be better than FY15, he added.

The import of Chinese tyres has increased substantially in India especially in passenger vehicle and truck segments. The company is planning a two-wheeler expansion in Nagpur, adding almost 10 lakh tyres per month. Ceat is targeting a revenue growth of 5-7 percent in FY16. 

10:15am Gold Update
Gold was trading close to its lowest level in over a week today after Federal Reserve Chair Janet Yellen indicated the US central bank was likely to raise interest rates this year and as the dollar strengthened to its highest in a month.

Yellen was clearer than ever on Friday that the central bank was poised to raise interest rates this year, as the US economy was set to bounce back from an early-year slump and headwinds at home and abroad waned.

In a speech to a business group, Yellen said she expected the world's largest economy to strengthen after a slowdown due to "transitory factors" in recent months and noted that some of the weakness might be due to "statistical noise".

Bullion investors believe higher US interest rates would dent demand for non-interest-paying gold.

10:00am Market Check
The market remained under pressure in morning trade due to selling in FMCG, auto, technology and select financials. The Sensex fell 116.20 points to 27841.30 and the Nifty slipped 33.05 points to 8425.90.

Amisha Vora, Owner and Joint Managing Director, Prabhudas Lilladher expects the market to consolidate for a while, and says equities will continue to return 16-18 percent annually.

She believes this is a good time for retail investors to invest with a three-year time frame.

ITC lost 2 percent post lower than expected earnings in Q4. Tata Motors, HDFC, L&T, Infosys, HUL, ICICI Bank and Axis Bank declined 0.4-1 percent. However, ONGC, M&M and Bharti Airtel gained around a percent.

Crude oil futures edged up today, buoyed by healthy Asian appetite and demand from the US driving season.

Japan's customs-cleared crude oil imports rose 9.1 percent to 3.62 million barrels per day (17.28 million kilolitres) in April from the same month a year earlier, the Ministry of Finance said today. In China, crude imports hit a record 7.4 million barrels per day in April despite a slowing economy, driven largely by healthy car sales.

9:50 am Buzzing: Shares of ITC slipped 3 percent intraday after its March quarter earnings were disappointing in all parameters. However, not all analysts are bearish on the stock. Credit Suisse maintains underperform rating on the stock with a reduced target of Rs 310 per share. The brokerage expects ITC to underperform till the next Budget, only when the street will get a sense of government's taxation approach. It has also slashed earnings estimates by 2 percent stating that Q4 performance does not augur well for H1FY16 volumes, when additional 12-13 percent price hikes hit the market. The March quarter earnings were the weakest in many years as cigarette business suffered a volume shock for second consecutive quarter.

CLSA retains sell on the stock with a revised target price of Rs 310. It see no respite for ITC during H1FY16 as volumes are likely to remain under pressure and says that base will also be tough during this period. It expects a 15 percent annual volume drop in first half of FY16 and slahes FY16-17 earnings per share (EPS) estimates by 2-3 percent.

9:30 am Sensex rejig: Private sector electricity producer Tata Power will move out of the stock market benchmark index Sensex and will be replaced by drugmaker Lupin . Besides, Adani Power would be dropped from the S&P BSE 100 index, while various changes have been made to a host of other BSE indices as well. The S&P BSE-100, an index of the top 100 listed companies in the country, would see Aurobindo Pharma and Tata Motors (DVR) coming in, while the S&P BSE-200 would get five new entries -- Ajanta Pharma , Suzlon Energy , Dewan Housing , NCC India and Tata Motors (DVR).

The market has opened in red as the Sensex is down 98.35 points at 27859.15. The Nifty is down 20.80 points at 8438.15. About 298 shares have advanced, 176 shares declined, and 80 shares are unchanged.

Wipro is up 3 percent while Sun Pharma, Infosys, Dr Reddy's Labs and Cipla are top gainers in the Sensex. ITC is down over 2 percent. SBI, Vedanta, Tata Power and Bajaj Auto are among the major laggards.

The Indian rupee has opened lower at 63.62 a dollar, down 10 paise compared to Friday's closing value of 63.52 per dollar.

Agam Gupta, Standard Chartered expects the rupee to see a range of 63.50-63.75/USD for the day as any downtick to 63.50/ USD will attract dollar demand from the local government banks.

He also expects to see some selling from FPIs on upticks to 63.75/USD. The US dollar was trading stronger against peers.

Asian shares got off to a lacklustre start, after rising inflation and a hawkish tone from the US Federal Reserve Chair rekindled expectations that the Fed is on track to hike interest rates.

Activity was likely to be thin this session, as UK and US markets are shut on Monday for the Spring Bank Holiday and Memorial Day respectively. European centres such as Germany will be observing the Whit Monday holiday.

US shares fell and Treasury yields and the dollar rose on Friday, after the US Labor Department's gauge on core consumer goods prices rose by 0.3 percent last month, bringing the year-on-year rise to 1.8 percent, the highest since October.