Sensex tanks 255 points, Nifty ends below below 8650; Axis dives 8%
26 Oct 2016
3:30 pm Market closing: Dragged by weak earnings the market has ended lower. The Sensex closed down 254.91 points or 0.9 percent at 27836.51 and the Nifty slipped 76.05 points or 0.9 percent at 8615.25. About 1187 shares have advanced, 1587 shares declined, and 240 shares are unchanged.
Hero MotoCorp, Bharti Airtel, Maruti, HUL and Dr Reddy's Labs weere gainers while Axis Bank, Tata Steel, Tata Motors, ICICI Bank and Adani Ports were losers in the Sensex.
2:56 pm Market Update: Benchmark indices extended losses with the Sensex falling 284.44 points or 1.01 percent to 27806.98 and the Nifty down 80.55 points or 0.93 percent at 8610.75.
2:40 pm Results: Public sector lender Canara Bank's second quarter earnings met analysts' expectations. Performance on yearly basis continued to be weak but the bank improved it on sequential basis. Profit fell 32.5 percent year-on-year to Rs 356.91 crore on higher provisions but increased 56 percent quarter-on-quarter.
Net interest income during the quarter declined 7.7 percent to Rs 2,442.35 crore compared with year-ago period but was up 5.8 percent compared with previous quarter.
Worst is almost over and the bank should control NPA at 9 percent by March 2017, Rakesh Sharma, MD and CEO said in an interview with CNBC-TV18.
Non-interest income jumped 47.2 percent to Rs 1,781.77 crore and operating profit grew by 10.1 percent to Rs 2,140.77 crore on yearly basis.
2:30 pm Inflows in MFs: Investors pumped in over Rs 16,000 crore into various mutual fund schemes in September, with liquid or money market segment contributing the most to the inflow.
With this, the total net inflow in mutual fund schemes has reached Rs 2.34 lakh crore in the April-September period of the current fiscal. In comparison, MFs had witnessed an inflow of Rs 80,895 crore in the year-ago period.
According to the data from the Association of Mutual Funds in India (Amfi), investors have poured in a net Rs 16,071 crore in MF schemes last month as compared to Rs 25,332 crore in the preceding month.
Prior to that, mutual fund schemes had witnessed an inflow of Rs 1.03 lakh crore.
2:20 pm Earnings: Jubilant Foodworks, which operates Dominos Pizza and Dunkin Donuts chains in India, today reported a 1.46 percent decline in standalone net profit at Rs 21.56 crore for the second quarter ended September 30.
The company had reported a net profit of Rs 21.88 crore in the July-September quarter last fiscal.
Its net sales, however, grew by 13.27 percent to Rs 665.54 crore during the quarter under review as against Rs 587.53 crore in the year-ago period, the company said in a BSE filing.
For the six months ended September 30, JFL's standalone net profit dipped 17.96 percent to Rs 40.56 crore compared with Rs 49.44 crore in the same period last fiscal.
2:00 pm Market Check
Equity benchmarks continued to fall in afternoon trade with the Sensex declining 217.42 points to 27874 and the Nifty down 56.05 points at 8635.25. Banking & financials and technology stocks remained under pressure whereas FMCG and auto stocks gained.
Axis Bank retained its top position in the selling list, down 8 percent on disappointing earnings. ICICI Bank, Tata Motors, HDFC Bank, Asian Paints and Adani Ports were down 1-3 percent.
ITC shares rebounded after reporting better-than-expected cigarette volume growth of 7 percent in Q2. Bharti Airtel gained 2.6 percent after strong margin performance while Maruti Suzuki and Hero Motocorp climbed around 2 percent ahead of earnings.
European stocks were lower following lacklustre trade on Wall Street and in Asia amid a slide in the oil price. France's CAC, Germany's DAX and Britain's FTSE were down 0.7-1 percent.
Oil prices fell more than a percent as a report showing a surge in US crude stocks, rising production in Nigeria and squabbling among producers about a planned output cut re-ignited concerns about a global supply glut.
1:45 pm Market outlook: Global events like the US Presidential elections and Federal Reserve rate hike are important for foreign inflows and the effect lasts for 2-3 days, says Krishna Kumar Karwa, Managing Director and Chief Financial Officer Of Emkay Global Financial Services. But he says what matters the most are local factors for the market with recent rise in local inflows into the market. In the long-term, he sees the banks' non-performing assets' (NPA) situation and the implementation of the Goods and Services Tax as the biggest long-term triggers for the market. The Indian economy may have improved considerably following a good monsoon, but Karwa says the earnings may only improve in the second half of current fiscal and will hold strong till the end of FY18.
1:30 pm Result poll: Hindustan Unilever (HUL) is expected to report a 7.5 percent growth in second quarter profit at Rs 1,056 crore and 4 percent growth in revenue at Rs 8,036 crore on yearly basis, according to average of estimates of analysts polled by CNBC-TV18. Analysts do not expect any fireworks in Q2 as rural & urban demand is still weak. Raw material prices have been increasing but there is no big appetite for higher price hikes. Recovery is unlikely before H2FY17, feel analysts. Key things to watch out for would be volume and price-led growth that are expected to be around 2-3 percent and 1-2 percent, respectively. Slowdown in volume growth may be on account of high base in year-ago period (in Q2FY16, volume growth was 7 percent, the highest in at least 12-13 quarters) and price hikes in soaps & skincare products.
The market is still struggling under pressure as the Sensex is down 221.37 points or 0.8 percent at 27870.05. The Nifty is down 59.00 points or 0.7 percent at 8632.30. About 1341 shares have advanced, 1261 shares declined, and 225 shares are unchanged.
Bharti Airtel, Hero MotoCorp, Maruti, Bajaj Auto and M&M are top gainers while Axis Bank, ICICI Bank, Adani Ports, Tata Motors and Wipro are losers in the Sensex.
European stocks were lower on Wednesday following lackluster trade on Wall Street and in Asia amid a slide in the oil price.
In the US overnight, earnings disappointed investors, particularly Apple which posted its first full-year decline in revenue since 2001. Shares in the technology giant were down over 2.7 percent in after-hours trade.
Oil prices dipped in Asia trade after a rise in US crude inventories and as hopes that OPEC will find a deal to cut production fade.
12:56 pm Market Update: Benchmark indices fell further in afternoon trade with the Sensex down 277.81 points or 0.99 percent at 27813.61 and the Nifty down 73.60 points or 0.85 percent at 8617.70.
12:50 pm Earnings: Cadila Healthcare's second quarter earnings missed analysts' estimates on Wednesday with consolidated profit sinking 28.9 percent year-on-year to Rs 337.6 crore on slow revenue growth and operational pressure.
Revenue during the quarter increased 0.4 percent to Rs 2,403.5 crore in the quarter ended September 2016.
EBITDA (earnings before interest, tax, depreciation and amortisation) fell 15.5 percent year-on-year to Rs 516 crore and margin contracted by 400 basis points to 21.5 percent in Q2.
According to analysts polled by CNBC-TV18, profit was expected at Rs 399.8 crore on revenue of Rs 2,477.2 crore and EBITDA was estimated at Rs 577.1 crore with margin at 23.3 percent for the quarter.
12:40 pm Europe opens: European stocks opened slightly lower following lackluster trade on Wall Street and in Asia amid a slide in the oil price.
The pan-European STOXX 600 was 0.17 percent lower at the start of trading as investors digested a slew of earnings.
12:30 pm Boardroom: Granules India's Q2 net profit rose 26 percent to Rs 41 crore as compared to Rs 32 crore in the corresponding period a year ago. The company's revenue grew 3 percent to Rs 364 crore.
Speaking to CNBC-TV18, the company's MD C Krishna Prasad said that revenue was impacted due to a fall in raw material cost, floods in Hyderabad and use of some API for in-house production work.
The company's finished dosage (FD) segment currently has 37 percent share. Prasad expects FD share to go up to 60 percent in the next 3-4 years.
Granules has filed for 2 abbreviated new drug application (ANDAs) in US already and is hoping to file two more this year. In India, it has filed 3 already and will be filing 4 more. Prasad anticipates 30-40 percent bottomline growth in FY18.
12:20 pm Asia Update: Australian shares led widespread losses in Asia-Pacific, with shares of Ardent Leisure, operator of Dreamworld theme park, tumbling 14.89 percent to 2 Australian dollars a share after four people were killed due to an apparently malfunctioned ride on Tuesday.
12:00 pm Market Check
Benchmark indices continued to reel under pressure on concerns raised by asset quality of banks, especially after Axis Bank's earnings. Weakness in Asian peers also weighed.
The Sensex was down 224.17 points at 27867.25 and the Nifty down 55.05 points at 8636.25 while the broader markets outperformed benchmarks. The BSE Midcap index was flat and Smallcap gained 0.4 percent on positive breadth. About 1319 shares advanced against 1125 declining shares on the exchange.
Axis Bank plunged over 8 percent after the bank showed 81 percent degrowth in profit due to bad assets' clean up. Provisions increased over five-fold on sequential basis.
HDFC Bank remained under pressure, down half a percent in addition to over a percent fall in previous session after its net interest income missed analysts' expectations due to lower-than-expected loan growth. Now all eyes are on ICICI Bank earnings; the stock fell 2.75 percent, the second biggest loser on Sensex.
Idea Cellular rebounded 4 percent after a 2 percent loss in previous session due to disappointing earnings.
11:45 am Results boardroam: India's third largest private sector lender Axis Bank reported a 83.1 percent fall in profit in the second quarter to Rs 319 crore on back of bad loans clean-up. Provisions rose to Rs 3,623 crore, more than 5-fold increase in comparison to year-ago. Over the last six quarters, not much improvement was seen on the operating side, said Jairam Sridharan, CFO of Axis adding that there now is more uncertainty over eventual number of slippages. The bank had guided for 60 percent of its watch list turning into non-performing loans, which could be higher going ahead. Sridharan said that slippages in Q2 were likely at their peak. Addition of slippages will continue to be higher in coming quarters for Axis. FY17, he said, will be the peak of credit cycle for the bank.
11:30 am India on a fast track: Underlining that India needs "transformative reforms" to boost its economy, the World Bank said the country has witnessed "fast-paced" reforms in past two years with the government encouraging digitisation, streamlining electricity supply and supporting manufacturing. "The country has embarked on a fast-paced reform path," the international lender's annual report on Ease of Doing Business 2017 Report said in a special India-specific box. The report "acknowledges several substantial improvements". Titled 'India has embarked on an ambitious reform path', the report said that the current Indian government was elected in 2014 on a platform of increasing job creation, mostly through encouraging investment in the manufacturing sector.
The market is reeling under pressure as banks continue to grapple with asset worries in September quarter. The Sensex is down 227.53 points or 0.8 percent at 27863.89 and the Nifty is down 55 points or 0.6 percent at 8636.30.
About 1277 shares have advanced, 1015 shares declined, and 178 shares are unchanged.
Bankex is down over 1 percent dragged by Axis Bank (down 8 percent) and ICICI Bank (down 3 percent). Other losers in the Sensex include are Tata Motors, Asian Paints and Adani Ports. Bharti, Hero, Bajaj Auto, Maruti and M&M are gainers in the Sensex.
Gold prices extended gains after touching nearly 3-week highs in the previous session, buoyed by rising physical demand ahead of India's late-October festival season.
Gold is a traditional gift during two of the most important Hindu festivals, Dhanteras and Diwali, which will be celebrated at the end of the month.
The European Central Bank is aware of the growing costs to the financial sector of its ultra-loose monetary policy and would rather not have to keep negative interest rates for too long, ECB President Mario Draghi said on Tuesday.
10:59 am Market Update: Benchmark indices remained under pressure with the Sensex falling 203.71 points to 27887.71 and the Nifty down 54.90 points at 8636.40.
However, the market breadth was positive as about 1259 shares advanced against 1002 declining shares on the BSE.
10:41 am Poll: Pharma company Cadila Healthcare is expected to report a 2.3 percent growth in second quarter profit at Rs 399.83 crore and 0.7 percent rise in revenue at Rs 2,477.2 crore on yearly basis, according to average of estimates of analysts polled by CNBC-TV18.
Operating profit is expected to fall 7.1 percent year-on-year to Rs Rs 577.1 crore and margin may contract 200 basis points to 23.3 percent due to adverse business mix.
Analysts expect sequential pick up in revenue on account of company launching ulcerative colitis drug Asacol HD during the quarter as an authorised generic in US markets.
Analysts are divided on growth in US formulations. Some analysts expect US business to grow around 3-5 percent YoY on account of sales of Asacol HD whereas some expect flat to decline YoY on lower sales of HCQS, an anti-malarial drug and slower US approvals.
10:20 am Outlook: Global events like the US Presidential elections and Federal Reserve rate hike are important for foreign inflows and the effect lasts for 2-3 days, says Krishna Kumar Karwa, Managing Director and Chief Financial Officer Of Emkay Global Financial Services.
But he says what matters the most are local factors for the market with recent rise in local inflows into the market. In the long-term, he sees the banks' non-performing assets' (NPA) situation and the implementation of the Goods and Services Tax as the biggest long-term triggers for the market.
The Indian economy may have improved considerably following a good monsoon, but Karwa says the earnings may only improve in the second half of current fiscal and will hold strong till the end of FY18.
The market is in a consolidation phase as it has already run ahead of company earnings, says Karwa.
10:00 am Market Check
Equity benchmarks fell further with the Sensex shedding more than 200 points on global weakness. Banking & financials drove the market lower whereas telecom and select auto stocks gained.
The 30-share BSE Sensex was down 208.90 points at 27882.52 and the 50-share NSE Nifty declined 56.20 points to 8635.10.
Bharti Airtel was the biggest gainer, up nearly 3 percent after its profit in Q2 beat analysts' expectations at Rs 1,461 crore and margin expansion continued for fourth consecutive quarter.
Hero Motocorp rose 2 percent ahead of quarterly earnings. A CNBC-TV18 poll expects second quarter to be strong one with profit rising 20 percent on strong operational and volume growth.
Axis Bank retained its top position in the selling list, down more than 7 percent on a 83 percent fall in profit in Q2 YoY due to big clean up bad loans. ICICI Bank was down 3 percent.
9:55 am Result poll: Cigarette-hotel-to-FMCG major ITC is expected to show good performance in quarterly earnings on Tuesday as profit is likely to increase 10 percent year-on-year to Rs 2,673 crore with likely cigarette volume growth of 3-4 percent in Q2. Volume growth may be boosted by modest price hike of 5-6 percent and higher proportion of sales from sub 65mm cigarettes (that attract lower excise duty). In Q2FY16, the company had a 15 percent decline in cigarette volume.
According to average of estimates of analysts polled by CNBC-TV18, revenue during the quarter is seen rising 9 percent to Rs 9,725 crore on yearly basis. Operating profit may grow 8 percent YoY to Rs 3,850 crore but margin may shrink 40 basis points to 39.6 percent in the quarter ended September 2016. Analysts expect cigarette revenue growth at 7-8 percent for the quarter. It contributes 60 percent to total revenue and 90 percent to EBIT (earnings before interest and tax).
9:45 am MFs on overdrive: Investors pumped in over Rs 16,000 crore into various mutual fund schemes in September, with liquid or money market segment contributing the most to the inflow.
With this, the total net inflow in mutual fund schemes has reached Rs 2.34 lakh crore in the April-September period of the current fiscal. In comparison, MFs had witnessed an inflow of Rs 80,895 crore in the year-ago period.
According to the data from the Association of Mutual Funds in India (Amfi), investors have poured in a net Rs 16,071 crore in MF schemes last month as compared to Rs 25,332 crore in the preceding month.
Prior to that, mutual fund schemes had witnessed an inflow of Rs 1.03 lakh crore. The latest inflow has been mainly driven by contribution from liquid or money market segment. Besides, equity schemes continued to witness positive inflow.
9:30 am Market outlook: Kapil Gupta of Edelweiss says Indian market rose 25 percent from February lows as strong domestic macros and global liquidity have converged to create a sweet spot for India.
However, the run up has also raised many questions on whether global liquidity is sustainable, he says.
He sees earnings are on a cyclical upswing, cost of capital is heading down, supply-side reforms are gaining pace.
This combination is occurring for the first time in past decade. Hence, even high valuations are sustainable, he believes.
Gupta's top midcap picks include Dewan Housing, Dr Lal Pathlabs, JK Cement, CARE, Max India, PNC Infra, Apar Industries and Prabhat Dairy.
The market has opened lower dragged by weak earnings. the Sensex is down 194.67 points or 0.7 percent at 27896.75 and the Nifty is down 60.15 points or 0.7 percent at 8631.15. About 430 shares have advanced, 604 shares declined, and 69 shares are unchanged.
Bharti Airtel, Hero MotoCorp, Adani Ports, Maruti and Dr Reddy's are top gainers while Axis Bank, ICICI Bank, Tata Motors, GAIL and Wipro are losers in the Sensex.
The Indian rupee opened marginally higher at 66.80 per dollar on Wednesday versus 66.82 Tuesday.
NS Venkatesh of Lakshmi Vilas Bank said, "The rupee fell against the dollar in afternoon trade and closed at 66.89/dollar. Month-end demand for dollar will weigh in on the rupee but exporters' dollar sales are likely to support the same."
The dollar hit its highest level in nearly eight months against the euro and a roughly three-month high against the yen on growing expectations that the Federal Reserve would raise interest rates in December, while the offshore yuan hit a record low.
Asian shares tumbled in early trade, following in the footsteps of Wall Street, which pulled back on disappointing earnings, while the dollar inched down from a seven-month high and oil prices slid. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.3 percent. Japan's Nikkei lost 0.2 percent, while South Korea's KOSPI dropped 0.8 percent and Australia fell 1.4 percent.
US stocks slipped from two-week highs on Tuesday as results and forecasts from companies in sectors including housing and consumer products failed to live up to expectations.
Apple, the largest US company by market capitalization, posted after the bell better-than-expected iPhone sales that however continued a declining trend and shares fell about 2 percent, briefly dragging S&P 500 futures to session lows.
Crude oil prices fell 1 percent, with US crude breaking below USD 50 per barrel for a second straight day ahead of weekly data that could show a build in domestic inventories.
Gold rose due to rising physical demand from India but growing expectations of a US interest rate hike kept a lid on prices. Gold closed at a three-week high as investors continued to stock up following a recent pullback.