Sensex, Nifty end lower; NTPC tanks 6%, BHEL falls 4%

20 Mar 2015

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3:30 pm Market closing: The market ended lower dragged mostly by capital goods and FMCG stocks. The Sensex is down 208.59 points or 0.7 percent at 28261.08. The Nifty is down 63.75 points or 0.7 percent at 8570.90.

About 770 shares have advanced, 2104 shares declined, and 168 shares are unchanged.

Only IT index ended in green. Wipro, Infosys, Coal India, Dr Reddy's Labs and TCS are top gainers in the Sensex. Among the losers are NTPC, ICICI Bank, BHEL, M&M and GAIL.

3:15 pm RBI call: Amidst differences over regulation of money market between RBI and the government, the central bank today said there is a need to examine various related issues connected with issuance of public debt.

"Concern was expressed by.. I think, the (RBI) Governor had told about it that the timing (of issuance of G-Secs) and all related issues need to be examined.

That's the only thing. Ultimately, there are reflections, implications of both of these things on the monetary policy," RBI Deputy Governor SS Mundra said. The differences relate to proposal in the Finance Bill 2015 which seeks to shift money market regulation from RBI to Sebi.

The Sensex is down 222.50 points or 0.7 percent at 28247.17 and the Nifty is down 59.85 points or 0.7 percent at 8574.80. About 670 shares have advanced, 2052 shares declined, and 160 shares are unchanged.

Wipro, Infosys, Hindalco, HDFC and TCS are top gainers while NTPC, BHEL, GAIL, M&M and ICICI Bank are major losers.

After much controversy and procedural wrangles, the Mines and Minerals (Development and Regulation) Amendment Bill, 2015, was passed by the Rajya Sabha with all parties, barring Congress and the Left, supporting it.

JD-U members walked out before the voting saying they did not want to be part of the procedure. The Bill was passed by 117 members voting in favour and 69 against it, after Mines Minister Narendra Singh Tomar moved it for passage.

The House earlier saw a lot of discussion on a motion moved by P Rajeeve of CPI(M), which sought that the measure be re-sent to the Select Committee as it had not taken the views of all stakeholders including state governments.

1:30 pm Buzzing: Shares of LIC Housing Finance rose 3 percent intraday after CLSA initiated coverage with a buy rating. The brokerage has set a target price of Rs 580 per share stating that demand uptick and low cost are likely to drive earnings.

LIC HF has a 10 percent share in mortgage financing and CLSA expects the pick-up in housing demand and fall in cost of funds to drive 20 percent CAGR in profit over FY15-17.

''A high proportion of mortgage loans (over 90 percent) reduces asset quality risks, but we are concerned by aggressive growth in loan against properties (LAP) and commercial loans. Nevertheless, its healthy ROE of 20 percent makes it a good compounding story,'' it says in a report.

Bears are in full charge of Dalal Street. The Sensex is down 198.94 points at 28270.73 and the Nifty is down 57.65 points or 0.7 percent at 8577. About 616 shares have advanced, 1952 shares declined and 161 shares are unchanged.

NTPC, BHEL, ICICI Bank, HUL and GAIL are major losers in the Sensex. Among the gainers are Wipro, Infosys, Coal India, HDFC, Cairn India, Hindalco and IndusInd Bank.

China's economy is likely to grow around 7 percent this year and 6.9 percent in 2016 as the government pushes reforms on interest rates and currency and pursues slower but higher-quality growth, OECD said.

China can avoid an abrupt slowdown as long as the government ensures an orderly unwinding of economic imbalances, the Organisation for Economic Co-operation and Development said in its latest survey on the world's second-largest economy. OECD Secretary-general Angel Gurria said he also expected domestic demand will be strong enough to prevent deflation.

12:50 pm RBI rate cut: The central bank plans to talk with lenders about passing on interest rate cuts through lower lending rates, Reserve Bank of India Deputy Governor SS Mundra said.

Most banks have yet to lower their lending rates even after the RBI has cut the repo rate by a total of 50 basis points this year.

Mundra, addressing reporters on the sidelines of an event in New Delhi, also said the government and the RBI are still discussing issues related to the creation of an independent public debt management agency, including the timing.

He also reiterated that India is better prepared to deal with any impact from eventual US Fed rate hikes.

12:30 pm Breaking: The Upper House of Parliament passed the Mines and Minerals Development and Regulation (MMDR) Amendment Bill, 2015, on Friday. A select panel of 19 Rajya Sabha members had approved the bill with two amendments while four had a dissent note on it. However KTS Tulsi says the new Bill takes away the rights of states and may be challenged in the Supreme Court. Speaking to CNBC-TV18, mines secretary said the government will begin consulting the states with respect to certain norms of the Bill shortly.

The market is still reeling under selling pressure as the Sensex is down 120.13 points at 28349.54. The Nifty is down 41.95 points at 8592.70. About 649 shares have advanced, 1763 shares declined, and 154 shares are unchanged.

IT stocks are on buyer's radar while Coal India and Bharti Airtel are top gainers in the Sensex. Among the losers are NTPC, GAIL, ICICI Bank, HUL and Tata Motors.

Meanwhile, Greek Prime Minister Alexis Tsipras assured European Union creditors at late-night crisis talks in Brussels that his leftist-led coalition would present soon a full set of economic reforms in order to unlock cash to stave off bankruptcy.

After two months of mounting frustration on both sides since Tsipras was elected with a mandate to end years of austerity imposed by creditors' conditions, the three-hour meeting on the sidelines of an EU summit was requested by Tsipras to break an impasse that risks seeing Athens stumble out of the euro zone.

But while a joint statement by the EU institutions spoke of a "spirit of mutual trust" and Tsipras said he left feeling more optimistic, German Chancellor Angela Merkel stressed no money would be released before Athens implements budget measures and other reforms that it has so far been reluctant to consent to.

11:50 am Need to worry? Hopeful that the Real Estate Investment Trusts (REITs) will eventually make it big in India, regulator Sebi's Chairman U K Sinha said there is a need to look into the reasons why there has been "very little enthusiasm" so far in this market.

Striking a positive note, Sinha said REITs took a long time even in the US to take off in a big way and the growth started only after 5-6 years. "I find that even after the regulations have come through, there is very little enthusiasm in the market for REITs.

"I hope that we discover, we analyse and we find out why it is so. I'm not discouraged, because even if I look at data from US, first few years were areas of learning. The growth started happening only after 5-6 years, Sinha said here at a Sebi-organised conference on REITs.

Sebi had last year put in place a separate regulatory regime for REITs, while Finance Minister Arun Jaitley also announced a tax-friendly regime for these investment instruments in the Budget last month.

11:30 am Macro outlook: Barring the resurgent US dollar, the Indian rupee set to rise against most currencies, says Avinash Persaud, senior fellow, Peterson Institute for International Economics and non-executive chairman of London-based investment banker Elara Capital.

''The steps that the government is taking to tackle ease of doing business and boost manufacturing will lead to [an upward] revaluation of the rupee,'' Persaud, a top economist who is seen as a leading global voice on issues such as risk, liquidity and currencies, told CNBC-TV18's Latha Venkatesh and Sonia Shenoy from the sidelines of an Elara investment conference.

On the issue of when the Federal Reserve would raise rates for the first time in about nine years, Persaud said the question should not be when the US central bank would hike but what would the pace of tightening. ''And the Fed would be behind the curve on inflation and growth,'' he said.

The market is under pressure following weakness in global peers. Power, PSU Banks and FMCG weigh on the market. The Sensex is down 93.12 points at 28376.55 and the Nifty is down 36.40 points at 8598.25.

About 594 shares have advanced, 1591 shares declined, and 141 shares are unchanged.

NTPC drags 7 percent while GAIL is down 3 percent. BHEL, ICICI Bank and Tata Motors are top losers in the Sensex. Among top gainers are Wipro, Infosys, HDFC, Sun Pharma and Dr Reddy's Labs.

Oil prices were mixed in Asia, with analysts warning of further downward pressure owing to a global oversupply and a strong dollar. US benchmark West Texas Intermediate for April delivery eased 10 cents to USD 43.86 and Brent for May climbed 13 cents to USD 54.56 in late-morning trade.

OPEC's decision in November to keep production unchanged sent oil prices plunging. The OPEC crude oversupply is being exacerbated by strong oil production in the US, the world's biggest economy. Data from the US Department of Energy showed stockpiles jumped 9.6 million barrels for the week ending March 13, higher than expected.

10:50 am The Delhi High Court on Thursday ordered de-registration of six aircraft leased to SpiceJet after its lessors filed a suit alleging non-payment of dues.

In an interview with CNBC-TV18, the carrier's chief operating officer, Sanjiv Kapoor, termed the issue a legacy of the crisis that took place prior to a takeover by new management.

''We will take whatever actions that are required to protect ourselves in terms of appeals, etc,'' he said. ''In the meantime, we have been in discussion with these lessors. We are eminently closed to announcing a settlement with one of them already and we are in very advanced discussions with the other.''

10:30 am Market outlook: The US Federal Reserve event has only been postponed by 2-3 months and the dollar strength is here to stay, is the word coming in from Harendra Kumar, head of institutional broking and global economy at Elara Capital. He believes if the market continues to stay higher, long-term investors and traders will look to book profits and the market will go into a consolidation phase.

According to Kumar, the market will once again become a buy once the Nifty hits 8400-odd levels. He recommends investors to sell on every rally. Inflows into India can remain flattish, he says and hence is worried on financials in the interim. Kumar says the resumption of mining activity is a big positive for the Indian economy. He is bullish on Sesa Sterlite due to resumption on mining in Goa.

The Sensex is down 85.40 points at 28384.27, and the Nifty down 37.85 points at 8596.80. About 689 shares have advanced, 1215 shares declined, and 123 shares are unchanged.

Sun Pharma, Bharti Airtel, Wipro, Dr Reddy's Labs and Infosys are top gainers in the Sensex. NTPC, GAIL, BHEL, Tata Motors, Axis Bank are among losers in the Sensex.

Brent prices rebounded towards USD 55 a barrel as the dollar weakened slightly, but gains were limited by supply concerns after Kuwait said OPEC had no choice but to maintain output levels.

High inventory in the United States, the world's largest oil consumer, also dragged on prices.

Brent crude for May delivery had risen 28 cents to USD 54.71 a barrel. The contract is flat for the week, after dropping in the two previous weeks. US crude for April delivery fell 6 cents to USD 43.90 a barrel, headed for its fifth weekly loss. The contract expires on Friday.

09:55am Market Update: The Sensex is down 56.50 points at 28413.17, and the Nifty down 23.65 points at 8611.00.

About 688 shares have advanced, 1073 shares declined, and 116 shares are unchanged on the BSE.

09:50am Macquarie on BHEL: Macquarie has maintained an underperform rating on BHEL but increased target price to Rs 179 per share. It has also cut order inflow by 8 percent and earnings estimates on growing concerns that

given disappointing order inflows, execution should continue to remain lacklustre while fixed cost pressures especially staff costs beginning Q4FY16 may curtail any significant margin recovery.

''We believe street expectations of a 200 basis points margin recovery in FY17 will not come through as operating leverage on account of higher revenue would get negated by the sharp increase in employee cost (15 percent) due the 7th pay commission,'' it says in a report.

The brokerage has slashed earnings by 17-35 percent for FY15-16 mainly due to lower revenue growth and EBITDA margin.

09:35am Market Expert: The long funds are coming into the market and building positions, says Deven Choksey of KR Choksey Shares and Securities.

The market is facing discomfort on two counts – dollar gaining strength and bond yields moving in a direction opposite to rate cuts, which is resulting in a selloff in every rally, he says. Also, once the rupee starts depreciating against the dollar, the reading funds will start selling, he adds.

09:15am Market Check
The market opened lower on Friday following weakness in global peers. The Sensex fell 126.80 points to 28342.87 and the Nifty declined 43.30 points to 8591.35.

About 470 shares have advanced, 576 shares declined, and 107 shares are unchanged on the BSE.

Wipro, Sun Pharma, Tata Power, Coal India, Cipla, Lupin and Dr Reddy's Labs gained 0.5-1 percent. However, NTPC tanked 7 percent as the stock adjusted for debentures bonus issue.

Tata Motors, HDFC, M&M, GAIL and Grasim lost 0.7-1.5 percent.

The Indian rupee opened flat at 62.51 per dollar today against previous day's closing value of 62.52 a dollar.

The dollar rose broadly as investors remain bullish on the greenback, it is currently above the 99 mark.

Pramit Brahmbhatt of Veracity said, "Local equity market is likely to trade sideways today and will take cues from global markets for further directions. The ongoing strength in dollar may force rupee to depreciate. Range for the day is seen between 62.20-63/USD."

The Asian markets were lower on the back of a weak overnight handover. Kospi has shaved off a tad bit from six-month high.

In the US, stocks closed mixed as investors eyed options expirations and weighed the Federal Reserve statement that indicated a rate hike would come gradually.

European equities closed mixed as investors reacted to a dovish statement from the Fed. FTSE digested the annual UK Budget statement presented by finance minister George Osborne.

In the currency space, dollar rose broadly as investors remained bullish on the greenback. In commodities, crude slipped on a rebounding dollar and Kuwait's stance that OPEC had no choice but to keep producing in an oversupplied market.

From precious metals space, gold rose to 1170 dollars an ounce, following a more cautious than expected interest rate statement from the Fed.

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