Sensex, Nifty end flat ahead of RBI policy, Nov auto sales

The market closed rangebound session on a flat note Monday as investors turned cautious ahead of RBI monetary policy and November auto sales data. Today's consolidation was after its rally in previous two trading sessions.

The 30-share BSE Sensex rose 17.47 points to 26145.67 and the 50-share NSE Nifty declined 7.45 points to 7935.25 but the BSE Smallcap index outperformed benchmarks, rising 0.8 percent. Even the market breadth was positive as about 1626 shares advanced against 1078 declining shares on the BSE.

The much-awaited RBI monetary policy will be announced on Tuesday, which will be important event for the market ahead of two-day Federal Reserve meeting (on December 15-16). Analysts expect the central bank to hold rates.

DBS Group expects the RBI to hold repo rate steady at 6.75 percent. "A combination of pending wage adjustments, uptick in CPI inflation readings, delay in supply-side fixes and external event risks (US Fed rate hikes) will leave the central bank on a cautious footing," it says.

The market will also closely watch GDP for July-September quarter and October industrial output data due later today.

Auto stocks like Tata Motors, Bajaj Auto and Mahindra & Mahindra gained more than 1 percent ahead of automobile sales for November. Motilal Oswal says overall industry growth momentum may remain healthy, adding passenger vehicle industry growth may be at 13 percent Y-o-Y. The brokerage expects new launches to drive growth in passenger vehicles.

Bharti Airtel slipped 2 percent. The telecom operator today announced the launch of a massive network transformation program - "Project Leap". Aimed at improving network quality, this project will see an investment of Rs 60,000 crore in the next 3 years.

Infosys topped the buying list on Sensex, up 2 percent followed by ICICI Bank with 1.7 percent while selling HDFC (down 1 percent), Reliance Industries (down 1.1 percent), Lupin (down 1.3 percent), Sun Pharma (down 1.3 percent), NTPC (down 1.8 percent), Coal India (down 1.7 percent) and Vedanta (down 2 percent) limited upside of the market.

In the broader space, IVRCL was locked at 20 percent upper circuit amid high volumes after it alloted 2.4 crore equity shares to CDR lenders (at a huge premium over current market price) towards conversion of funded interest term loan into equity. Media report also indicated that the company is likely to consider demerger of its property development and EPC business soon.

Amtek Auto lost more than 4 percent after it reporting a loss of Rs 158.6 crore in July-September quarter against profit of Rs 74.37 crore in year-ago period. IDBI Bank rallied over 8 percent on a media report that International Finance Corporation is likely to pick up 15 percent stake in the bank.

Monnet Ispat Energy was up 7 percent as its CDR lenders will convert loans into equity.

3:30 pm Market close: The Sensex ended up 17.47 points at 26145.67 and the Nifty slipped 7.45 points at 7935.25. About 1620 shares have advanced, 1085 shares declined, and 209 shares are unchanged.

Bajaj Auto, M&M, Infosys, Tata Motors and ICICI Bank were top gainers while Bharti Airtel, NTPC, Vedanta, Coal India and Sun Pharma were losers in the Sensex.

3:00 pm Houseview: Bank of America Merill Lynch has upgraded IDFC to buy with a target price of Rs 65 per share. IDFC is the holding company which owns 53 stake stake in IDFC Bank. IDFC's share of the bank is worth (USD 1.8 billion) is 30 percent higher than its market cap (USD 1.3 billion). However, BoAML thinks there is a valuation anamoly as the market appears to be assigning negative value to non-bank business or the market is giving a 50 percent discount to underlying constituents. According to the brokerage, the anamoly should correct.

2:50 pm Rupee's weakness: Heavy sales in equity and debt by foreign investors ahead of an expected Fed rate hike triggered a 2.4 percent fall in the Indian rupee this month, the worst performer among emerging Asia currencies, pushing it to its weakest level in more than two years.

Foreign funds have sold a net USD 1.5 billion in bonds and shares so far this month, their biggest since August, marking a reversal from big purchases since early 2014 that had seen India outperform many emerging markets rivals.

The magnitude of the selling, and the impact on the rupee, raise the stakes for the Reserve Bank of India (RBI), which is widely expected to hold rates on Tuesday, as central banks across emerging markets gear up for the US Federal Reserve to tighten monetary policy as early as December.

2:40 pm Interview: Intellect Design plans to double its revenues to USD 200 million in the next two to three years, says S Swaminathan, CFO, Intellect Design. In FY15, they had stayed consistent to their promise and had reported a USD 100 million in revenues.

Intellect also expects an increase in the gross margins over eight to ten quarters to 60 percent. This they plan to do with increased revenue share from advance markets, increasing the license in aims share in the total revenue and finally with help of some  execution efficiency improvements.

S Swaminathan also tells CNBC TV18, that Intellect over the years intends to mainly invest in its infrastructure, R&D and sales and marketing.

2:20 pm Fitch on discoms: Terming the new restructuring package offered to state discoms as a positive, Fitch said states opting for the package and delivering on loss reductions over the medium-term is essential for the success of the programme.

"The agency sees the new restructuring package offered to the state discoms in November 2015 as a positive," the rating agency said in a statement. Successfully addressing the weak financial positions of state distribution companies (discoms) is key to improving the health of India's power sector, it added.

The weak fiscal position of these entities has led to sustained delays in payment to market participants and weak offtake from power generators, in addition to increasing the risks associated with much-needed investment in the sector, it further said.

2:00 pm Market Check
The market remained lacklustre in afternoon trade ahead of GDP data for September quarter due later today and RBI policy due on Tuesday. The Sensex rose 19.91 points to 26148.11 and the Nifty declined 2.30 points to 7940.40.

According to a CNBC-TV18 poll, the second quarter FY16 gross domestic product (GDP) is expected to come in at around 7.5 percent, compared to around 7 percent in June quarter and 8.4 percent in same quarter last year. The gross value added (GVA) is also expected to come in at around 7.5 percent versus 7.1 percent Q-o-Q. In terms of sectors, agriculture is expected to see a slowdown on a Q-o-Q basis possibly because of the lesser or deficit monsoon.

The broader markets continued to outperform benchmarks; the BSE Midcap rose 0.4 percent and Smallcap jumped 0.9 percent. The market breadth remained positive as about 1602 shares advanced against 966 declining shares on the BSE.

ICICI Bank (up 2.5 percent), Tata Motors (2.35 percent) and Bajaj Auto (2.16 percent) extended rally while Reliance Industries, HDFC, Sun Pharma, Bharti Airtel, ONGC, Coal India, Vedanta and NTPC fell more than 1 percent.

1:55 pm New Order: Hinduja Group flagship firm Ashok Leyland has bagged order for 3,600 vehicles worth USD 200million (about Rs 1,335 crore) from Cote D'Ivoire.

Ashok Leyland has signed a contract with the government of the West African nation, also know as the Ivory Coast, for supply of the vehicles which include trucks and buses and will be delivered over the next 12 months, the company said in a statement.
    
Ashok Leyland Managing Director Vinod K Dasari said: "This is the largest contract for this country with any firm in India, and also represents the largest such contract till date for the company."

1:45 pm Currency in IMF basket: The impact of yuan inclusion in IMF reserve currency will be a lot more gradual than what perhaps investors envisage, says Brijen Puri of JPMorgan. The International Monetary Fund (IMF) is likely to give the yuan a historic vote of confidence on Monday when it includes it in its elite club of major currencies.

In terms of flows too, the inclusion -if it happens- may not be material as China would want to demonstrate that its currency is relatively stable, he says. China is looking at a more structural shift there.

However, despite the chances of the yuan being included in the IMF basket of major currencies, the Chinese market is falling. Shane Oliver, head of investment strategies and chief economist at AMP Capital, says the fall is because several Chinese brokerages are under investigations and "..the Chinese market is very much a momentum-driven market."

1:30 pm Expansion plans: Private telecom company Bharti Airtel announced the launch of a massive network transformation program -"Project Leap." Aimed at improving network quality, this project will see an investment of Rs 60,000 crore in the next 3 years, stated the company.

This investment will be over and above the Rs 1,60,000 crore the company Airtel has already invested in its active and passive network, spectrum, fiber, submarine cables and systems till date.

Announcing the launch, Gopal Vittal, MD & CEO, Bharti Airtel (India & South Asia) said, "...Today we are excited to launch "Project Leap" which will catapult the Airtel network to be a world class network in the coming three years. We are confident that this new initiative will deliver a truly differentiated customer experience and reinforce our commitment to build a future ready network''.

The market is still down as investor seem cautious ahead of GDP data announcement. The Sensex is down 34.08 points at 26094.12. The Nifty is down 13.80 points at 7928.90. About 1540 shares have advanced, 937 shares declined, and 214 shares are unchanged.

Bajaj Auto, Tata Motors, ICICI Bank, Maruti and Cipla are top gainers and HDFC, Bharti Airtel, Vedanta, Sun Pharma and Lupin are major losers in the Sensex.

Sakthi Siva, Credit Suisse says, "While expensive markets can stay overvalued, we highlight the 6-11 percent underperformance of MSCI India, MSCI Philippines & MSCI Japan from their highs about two months ago.

For India, she believes the catalysts are continued EPS misses, potential stabilisation in China macro and/or more China stimulus. "In India, with the return on equity (RoE) gap between cyclicals and defensives stabilising, we highlight staples and healthcare as the two most overvalued sectors coupled with EPS cuts," Siva says.

12:55 pm Market Update: Equity benchmarks remained choppy in trade. The Sensex rose 11.73 points to 26139.93 and the Nifty fell 4.30 points to 7938.40.

About 1529 shares have advanced, 921 shares declined, and 205 shares are unchanged on the BSE.

12:50 pm Interview: Troubled auto maker Amtek Auto reported a consolidated net loss of Rs 987 crore for the year ended September against a net profit of Rs 848.21 crore last year. In an interview to CNBC-TV18, John Flintham, Vice Chairman and Managing Director, says the company is likely to see a depressed domestic market in the days ahead too.

Flintham says while the overseas business is doing well, he doesn't see much activity in India and expects H12016 to be similar to the current market situation.

The company has plans to monetise its assets to pare its Rs 14,000 crore debt to something closer to Rs 7,000 crore.

12:40 pm Rajesh Exports bags order: Jewellery firm Rajesh Exports said it has bagged an export order worth Rs 1,122 crore for gold and diamond studded jewellery and medallions from the UAE. The order is to be completed by March 31 next year and it will be executed at the company's manufacturing facility at Bengaluru.

"Rajesh Exports has bagged an export order worth Rs 1,122 crore of designer range of gold and diamond studded jewellery and medallions from the UAE," the company said in a BSE filing.

12:20 pm Cipla in News: Drug major Cipla said it is ready to launch low dose 'Efavirenz' used in treatment of HIV infection.

On the eve of World AIDS day, the company announced "its readiness to supply its combinations Tenofovir/Emtricitabine/ Efavirenz and Tenofovir/Lamivudine/Efavirenz with a dose of 400 mg of Efavirenz as a first-line initial therapy for HIV infection", Cipla said in a BSE filing.

"Studies now support the use of Efavirenz 400 mg as a substitute for Efavirenz 600 mg in cases where there is no co-infection with tuberculosis. Efavirenz 600 mg is currently used in antiretroviral therapy (ART) and is highly effective. "However, it is known to have significant side effects, which can be very distressing for those taking it for treatment of HIV infection," it added.

12:00 pm Market Check
The market remained rangebound with the Nifty hovering around 7950 level but the broader markets continued to outperform benchmarks.

The 30-share BSE Sensex gained 34.82 points at 26163.02 and the 50-share NSE Nifty rose 4.90 points to 7947.60.

The BSE Midcap and Smallcap indices were up 0.3 percent and 0.8 percent, respectively. The market breadth was positive as about 1537 shares advanced against 879 declining shares on the Bombay Stock Exchange.

11:55 am Nestle India: Nestle India said it has resumed production of Maggi noodles at all five facilities in India. Nestle, which relaunched Maggi noodles on November 9 after a five-months ban, has started production of Maggi noodles from its Tahliwal plant in Himachal Pradesh.

Nestle manufacturers Maggi noodles at its plants in Nanjangud (Karnataka), Moga (Punjab) Bicholim (Goa) and Tahliwal and Pantnagar in Himachal Pradesh.

"The company has resumed manufacturing of Maggi noodles at its Tahliwal (Himachal Pradesh) factory. With this, the company has resumed manufacture of Maggi noodles at all five noodle manufacturing facilities," Nestle said in a BSE filing.

Last week, the Swiss food major had started production of Maggi noodles from its fourth plant at Pantnagar in Uttarakhand.

11:45 am FPI outflow: Foreign investors pulled out more than USD 1.5 billion from the country's capital markets this month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve.

The sell-off came after Foreign Portfolio Investor (FPI) inflow in the capital markets (equity and debt) hit a seven-month high in October.

As per the data compiled by the depositories, net outflow in equities stood at Rs 6,616 crore in November, while it was Rs 3,207 crore from debt, translating into a total of Rs 9,823 crore (USD 1.5 billion).

11:30 am FII view: Sakthi Siva, Credit Suisse says, "While expensive markets can stay overvalued, we highlight the 6-11 percent underperformance of MSCI India, MSCI Philippines & MSCI Japan from their highs about two months ago.

She believes there is more room for underperformance, as investors have been 'hiding' in India and the Philippines.

For India, she believes the catalysts are continued EPS misses, potential stabilisation in China macro and/or more China stimulus. "In India, with the return on equity (RoE) gap between cyclicals and defensives stabilising, we highlight staples and healthcare as the two most overvalued sectors coupled with EPS cuts," Siva says.

Impact of yuan inclusion to IMF reserve may be gradual: JPM 

The market is very sluggish ahead of Q2 gross domestic product data to be announced today. The Sensex is up 0.80 points at 26129.00 and the Nifty is down 7.20 points at 7935.50. About 1396 shares have advanced, 724 shares declined, and 156 shares are unchanged.

Maruti, ICICI Bank, Tata Motors, Bajaj Auto and L&T are top gainers while Sun Pharma, HDFC, Bharti Airtel, ONGC and GAIL are major losers in the Sensex.

Crude oil prices rose in early Asian trade, although gains were limited as investors look ahead to an OPEC meeting where ministers from the oil producing group will set policy in the face of a market still in glut.

Oil prices are heading for declines of as much as 10 percent this month as optimistic assessments that the overhang in the market would ease have proved wrong.

10:58 am Market Update: Equity benchmarks remained in consolidation mode. The Sensex rose 12.73 points to 26140.93 and the Nifty declined 2.80 points to 7939.90.

About 1412 shares have advanced, 716 shares declined, and 159 shares are unchanged on the BSE.

10:45 am FPIs outflow: Foreign investors pulled out more than USD 1.5 billion from the country's capital markets this month due to lacklustre quarterly earnings and concerns over a possible rate hike by the US Federal Reserve.

The sell-off came after Foreign Portfolio Investor (FPI) inflow in the capital markets (equity and debt) hit a seven-month high in October.

As per the data compiled by the depositories, net outflow in equities stood at Rs 6,616 crore in November, while it was Rs 3,207 crore from debt, translating into a total of Rs 9,823 crore (USD 1.5 billion).

One day trading session is still left for the month.

10:30 am Impact of yuan inclusion in IMF: The impact of yuan inclusion in IMF reserve currency will be a lot more gradual than what perhaps investors envisage, says Brijen Puri of JPMorgan. The International Monetary Fund (IMF) is likely to give the yuan a historic vote of confidence on Monday when it includes it in its elite club of major currencies.

In terms of flows too, the inclusion - if it happens - may not be material as China would want to demonstrate that its currency is relatively stable, he says. China is looking at a more structural shift there.

Puri also believes India is likely to remain relatively attractive in the emerging markets (EM) space.

10:20 am FII View: Sakthi Siva, Credit Suisse says, "While expensive markets can stay overvalued, we highlight the 6-11 percent underperformance of MSCI India, MSCI Philippines & MSCI Japan from their highs about two months ago.

She believes there is more room for underperformance, as investors have been 'hiding' in India and the Philippines.

For India, she believes the catalysts are continued EPS misses, potential stabilisation in China macro and/or more China stimulus. "In India, with the return on equity (RoE) gap between cyclicals and defensives stabilising, we highlight staples and healthcare as the two most overvalued sectors coupled with EPS cuts," Siva says.

10:00 am Market Check
Equity benchmarks continued to consolidate in morning trade after rallying for previous two consecutive sessions. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices 0.3 percent and 0.6 percent, respectively.

The 30-share BSE Sensex rose 22.63 points to 26150.83 and the 50-share NSE Nifty fell 2.50 points to 7940.20. The market breadth was positive as about 1305 shares advanced against 548 declining shares on the BSE.

Banks, infrastructure and auto stocks continued to support market while oil and FMCG stocks lost ground.

ICICI Bank, Tata Motors, L&T, Maruti Suzuki, Mahindra & Mahindra and Bajaj Auto gained 1-2 percent while Sun Pharma lost over a percent.

9:50 am Market check: The Sensex is up 60.36 points or 0.2 percent at 26188.56 and the Nifty is up 8.15 points at 7950.85. About 1254 shares have advanced, 457 shares declined, and 107 shares are unchanged.

Bajaj Auto, Tata Motors, Maruti, ICICI Bank and M&M are top gainers in the Sensex. Among losers are Sun Pharma, GAIL, Hindalco, ITC and Vedanta.

9:45 am RBI monetary policy: India's economic growth likely picked up in the July-September quarter, outpacing China on improving domestic demand and manufacturing activity that could persuade the Reserve Bank of India to keep interest rates unchanged.

Asia's third-largest economy likely expanded 7.3 percent in the second quarter of the current financial year 2015/16 that ends in March, compared with 7 percent in April-June, according to analysts polled by Reuters.

Stronger growth would be a boost for Prime Minister Narendra Modi after a defeat in state elections of India's third-most populous state of Bihar. Modi is focussing on reforms to accelerate growth and hopes to convince his opponents to implement a much-delayed national sales tax in 2016.

9:30 am GDP poll: The second quarter FY16 gross domestic product (GDP) is expected to come in at around 7.5 percent compared to around 7 percent on a quarter-on-quarter (QoQ) basis. It compares to 8.4 percent same quarter last year. The range for the GDP figure is anywhere between 7.3 percent and 7.6 percent. The gross value added (GVA) is also expected to come in at around 7.5 percent versus 7.1 percent QoQ and the range is anywhere between 7.3 percent and 7.6 percent as well. In terms of sectors, agriculture is expected to see a slowdown on a QoQ basis possibly because of the lesser or deficit monsoon. It is hence expected to come in at around 1.1 percent and the range is anywhere between 0.5 percent and 2 percent this time.

The market has opened flat as the Sensex is down 5.40 points 26122.80. The Nifty is down 2.70 points at 7940.00. About 491 shares have advanced, 143 shares declined, and 77 shares are unchanged.

Dr Reddy's Labs, BHEL, Tata Motors, HDFC Bank and M&M are top gainers while HDFC, Sun Pharma, ONGC, Cipla and Lupin are amogn losers in the Sensex.

The Indian rupee has opened marginally lower at 66.78 per dollar compared to 66.76 a dollar in previous trading session.

Agam Gupta of StanChart says range for the day should be 66.65-67.10 a dollar and there could be a technical move up to 67.00-67.10 a dollar. He expects local government banks to supply dollar above 67 a dollar. "We also anticipate exporters to be active sellers of dollar on upticks as they hedge their dollar receivables," he says.

Asian equities were trading mixed on Monday morning as investors remained cautious following a mixed performance from Wall Street last Friday.

The International Monetary Fund's (IMF) Executive Board meets on Monday to discuss a staff proposal to include China's yuan, or renminbi as it's also known, in an exclusive group of currencies that make up the basket of the IMF's Special Drawing Rights (SDR).