Nifty ends below 8950; Sun Pharma, HUL top gainers

05 Mar 2015

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03:30 pm Market closing: After a volatile day, the Sensex ended up 68.22 points at 29448.95, and the Nifty was up 15.10 points at 8937.75. About 1417 shares have advanced, 1450 shares declined, and 190 shares are unchanged. Sun Pharma, HUL, HDFC twins and Cipla were top gainers in the Sensex. Hindalco, Coal India, GAIL, TCS and Sesa Sterlite are major laggards.

03:10 pm ECB's growth plan: Keen to keep a low profile over the Greek crisis, the European Central Bank will focus on improved growth prospects when it meets on Thursday and unveil some but not all the details of its 1 trillion euros-plus bond buying plan.

Meeting in Cyprus, the ECB will keep rates on hold, likely lift growth forecasts to reflect a string of positive data surprises but cut inflation projections as it incorporates the full effect of a dramatic oil price fall, backing its case to buy 60 billion euros worth of bonds a month from March to spur inflation.

The bank has a long way to go to convince markets. Only half of the economists polled by Reuters think bond buying will help inflation rise towards the target of close to but below two percent and half think the purchases will be extended beyond September 2016.

02:50pm GMR rights issue: GMR Infrastructure today said its Rs 1,400 crore rights issue will open on March 24.

"The management committee of the board of directors of the company has approved and adopted the letter of offer (LOF) and issue schedule, for the issue of equity shares having face value of Re 1 each by the company on a rights basis to its existing shareholders," GMR Infrastructure informed BSE. The closing date for the rights issue is April 8, 2015.

The issue seeks to mobilise over Rs 1,400 crore consisting of 93.45 crore fully paid up equity shares of face value of Re 1 each. The equity shares are being offered on a rights basis to the eligible equity shareholders in the ratio of 3 equity shares for every 14 equity shares held on the record date of March 12.

02:25pm Bupa on insurance biz: British private healthcare group Bupa is eager to expand quickly in India's fast-growing health insurance market, once a rule change on foreign investment is implemented, the firm's chief executive said on Thursday.

Bupa, which operates globally and gets 70 percent of its revenue from health insurance, said in January it planned to raise its stake to a new maximum of 49 percent in its joint venture with Max India, from the current maximum for a foreign investor in insurance of 26 percent.

Bupa was the first foreign company to announce plans to raise its holding in an insurance venture after the rule change was announced in late 2014. The bill was passed in India's lower house of parliament on Wednesday.

"The health insurance market is still quite a nascent market, there is tonnes of headroom for growth," Stuart Fletcher told Reuters by telephone.

"We are doing all the preparatory work to be able to move quickly as soon as the ordinance is turned into statute."

02:00pm Market Check
The market gets hit by another bout of volatility today. The 30-share BSE Sensex fell more than 200 points before showing a marginal recovery while the midcap and smallcap traded mildly in the green.

The Sensex declined 41.91 points to 29338.82 and the Nifty slipped 22.50 points to 8900.15. The market breadth is weak as about 1203 shares have advanced and 1487 shares declined on the BSE.

Aditya Narain of Citi expects the market to move higher from here. FIIs are overweight on India by 400-600 basis points, he says, adding a December 2015 Sensex target is 33000.

Globally, China and Hong Kong markets took a beating after China lowered growth target to 7 percent for 2015. This will be the lowest growth target in 11 years, down from the 7.5 percent last year. European markets are flat today.

In an ongoing spectrum auction, the government is assured of mopping up more than Rs 60,000 crore from the bids in the first day itself. The 900 mhz spectrum saw intense bidding with all spectrum assured of getting sold at prices on an average 30 percent higher than reserve price.

Pipavav Defence tanked 10 percent while Reliance Infrastructure gained nearly 3 percent. Both the stocks are in the news after Anil Ambani's Reliance Defence Systems along with Reliance Infra announced acquiring Pipavav Defense in an all cash deal last evening. Reliance Infra will first invest Rs 819 crore for 17.66 percent stake at Rs 63 per share and subsequently launch an open offer for an additional 26 percent stake at Rs 66 a share.

In the midcap space, eClerx Services, AstraZeneca, Sun Pharma Advanced, Info Edge and Strides Arcolab rallied 7-14 percent while Fortis Healthcare, Parsvnath, Chambal Fertilisers and Sobha fell 3-4 percent.

1:30 pm Buzzing: Shares of Cairn India fell 3.4 percent intraday as the oil major cut its capital expenditure (capex) plan for the next financial year post fall in oil prices.

"With close to USD 1.1 billion of capex invested in FY15, the company is revising the capex for FY16 from the projected USD 1.2 billion to 500 million, while deferring the rest," said the company in its filing to the exchange.

Cairn India has taken a proactive approach to capital allocation and shareholder returns due to sharp fall in oil prices. Brent crude fell to USD 60 a barrel from USD 115 a barrel in June 2014.

The company will be undertaking projects that are economically viable at current oil prices. Additionally, the management focus is on re-engineering projects and re-negotiating contracts to improve project economics.

The market is succumbing to profit booking as the Sensex is down 139.71 points at 29241.02. The Nifty slips 51.45 points at 8871.20.

HUL is up 2.5 percent while Wipro, Dr Reddy's Labs, ITC and Sun Pharma are top gainers in the Sensex. Among the losers are Hindalco, Coal India, ICICI Bank, L&T and TCS.

Crude oil futures prices rose by 1.85 percent to Rs 3,359 per barrel today as speculators created positions amid a firm trend in Asia. Marketmen said the rise in crude oil futures was largely in tandem with a firming trend in Asian trade, as signs that refineries' strike in the US is weakening, overshadowed a rise in US crude stocks.

Meanwhile, West Texas Intermediate crude prices advanced by 29 cents to USD 51.82, while Brent gained six cents to USD 60.61 a barrel respectively in late morning trade on the New York Mercantile Exchange.

12:50pm Market extends losses; Equity benchmarks extended losses in afternoon trade with the Sensex falling 155.18 points to 29225.55 and the Nifty shedding 53 points to 8869.65.

About 1112 shares have advanced, 1450 shares declined, and 203 shares are unchanged on the BSE.

ICICI Bank, L&T, TCS, Infosys, SBI, Axis Bank, Tata Motors, Bharti Airtel, Hindalco, Tata Steel, BHEL and Coal India went down 0.6-3 percent.

12:20pm Spectrum Auction: The spectrum auction resumed today with seven rounds of bidding for all fours bands by telecom operators in first few hours, after bids worth over Rs 60,000 crore on first day yesterday.

"Seven rounds have been completed as of now with bidding in all the four bands," a source said. The biggest ever spectrum auction of 2G and 3G airwaves began on Wednesday on a high note with operators making bids worth an estimated Rs 60,000 crore after six rounds of bidding in all the four bands.

The government is expecting about Rs 1 lakh crore from the auction. The value of spectrum put on sale is Rs 82,000 crore at the base price.

Asian brokerage firm CLSA in a report said that at the end of day one, the spectrum in 900 MHz is already 32 percent above the reserve price and there was excess demand in 5 out of 17 circles, reports PTI.

12:00pm Market Check
The market continued to consolidate after yesterday's losses with the Nifty hovering around 8,900 level. Capital goods, metals, technology and select banks remained under pressure while FMCG, healthcare and HDFC group stocks provided support.

The Sensex fell 44.36 points to 29336.37 and the Nifty declined 23.30 points to 8899.35. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.4 percent each.

Pipavav Defence lost 10 percent after Anil Ambani's Reliance Infrastructure announced an open offer for the company which is at a 15 percent discount to yesterday's closing price. Reliance Defence announced acquisition of Pipavav in an all-cash deal last evening.

Cairn India is among the top losers on Nifty, down 3 percent after it cut its capex guidance for FY16 by 60 percent to USD 500 million. The oil major also reduced its production guidance of 7-10 percent CAGR over FY14-17.

United Spirits gained 2 percent. Morgan Stanley says the long-term franchise for the company is 'solid'. It kept a target of Rs 4,850 on the stock. Morgan Stanley forecasts a 650 basis points of gross margin expansion for the domestic business over the next three years.

It's day 2 of the second phase of the coal auctions. The 2 coal blocks up for grabs today are Mandakini coal block in Odisha and the Meral block in Jharkhand.

Asian indices declined with the Shanghai market seeing a cut of almost 1.5 percent after China lowered its growth target to 7 percent for 2015, the lowest target in 11 years (lower than the 7.5 percent figure last year).

11:45 am Inflation: In a major boost to India's sovereign outlook, Moody's on Thursday said the new 'inflation targeting' mechanism is a "credit positive" move and it would make RBI's monetary policy tools much more effective.

Under the new 'inflation targeting' mechanism, the government has mandated RBI to bring down inflation to below 6 percent by January 2016 and then target a level of 4 percent by March next year. RBI will have to explain the reasons if such targets are not achieved.

Moody's said that the new mechanism would increase the predictability and effectiveness of RBI's monetary policy, while the effectiveness of its monetary tools would increase because 'inflation targeting' would take into account future -- rather than past-- price trends.

"Quantitative inflation targeting will foster transparency and predictability in monetary policy, as capital market participants, businesses and the public understand the drivers of central bank actions," Moody's Investors Service Associate Analyst Shirin Mohammadi said, adding that the move was "credit positive" for India.

11:30 am Buzzing:  Dewan Housing Finance Corporation (DHFL) said it has raised Rs 809.61 crore by issuing shares to institutional investors.

The company said it has issued and allotted 1,69,31,102 equity shares to the Qualified Institutional Buyers (QIBs) at a price of Rs 478.18 per equity share, including a premium, aggregating to Rs 809.61 crore.

In a regulatory filing, DHFL further said that its paid-up equity capital has increased to Rs 145.67 crore consequent to the allotment of shares to the QIBs. The finance committee of the company had approved the issue and allotment of shares to the QIBs at a meeting held yesterday.

The Sensex is up 36.68 points at 29417.41 and the Nifty is up 5.00 points at 8927.65.
About 1224 shares have advanced, 1083 shares declined, and 170 shares are unchanged.

HUL, Cipla, Sun Pharma, Wipro and Dr Reddy's Labs are top gainers in the Sensex. Among the losers are Hindalco, ICICI Bank, Tata Steel, GAIL and NTPC.

Globally, Shanghai markets trade lower as China lowered growth target to 7 percent for 2015 this will be the lowest growth target in 11 years down from the 7.5 percent last year. Crude oil futures prices rose by 1.85 percent to Rs 3,359 per barrel today as speculators created positions amid a firm trend in Asia.

Marketmen said the rise in crude oil futures was largely in tandem with a firming trend in Asian trade, as signs that refineries' strike in the US is weakening, overshadowed a rise in US crude stocks. Meanwhile, West Texas Intermediate crude prices advanced by 29 cents to USD 51.82, while Brent gained six cents to USD 60.61 a barrel respectively in late morning trade on the New York Mercantile Exchange.

10:40am TCS in News: Top software exporter TCS has introduced a new platform which will increase the level of automation in underwriting for insurance business.

"The solution automates the ability to capture, analyse and make use of data in order to determine risk exposure and risk aggregation," the Tata group company said in a statement here.

The solution, named 'Underwriting Workbench', combines dynamic case management, intelligent work flow and decision support systems with robust geospatial functions, it said.

It is designed to give underwriters full use of location-based technology and data in order to inform risk selection, the information gathering process, scoring, decision making and pricing.

10:20am FII View: Bharat Iyer, JPMorgan says the market responded enthusiastically to the rate cut announcement to start with, but subsequently sold off.

In terms of sector stance, the brokerage believes the focus should remain on alpha, rather than beta, he adds.

"We would position for a potential recovery in the local economy through high quality financials with a strong liability franchise & manufacturing sectors with low financial leverage & high operating leverage - commercial vehicles & cement are key picks here. We would avoid chasing beta - particularly in segments like low quality financials & infrastructure conglomerates. Separately, we remain overweight on IT services & healthcare," says Iyer.

10:00am Market Check
The market is flat as the Sensex is up 34.16 points at 29414.89. The Nifty is at 8922.65.
About 1003 shares have advanced, 887 shares declined, and 149 shares are unchanged.

Cipla, Sun Pharma, HUL, Wipro and Dr Reddy's Labs are top gainers in the Sensex. Among the losers are GAIL, Bharti Airtel, ICICI Bank, Hindalco and Hero MotoCorp.

Gold edged above USD 1,200 an ounce as equities weakened, but the safe-haven metal retained most of its losses from a three-day decline on robust US economic data and strength in the dollar. The metal fell on Wednesday after data showed US private employers added 212,000 private-sector jobs in February. Separately, the Institute for Supply Management said its services index was 56.9 in February, up slightly from 56.7 in January.

9:45 am Interview: AB Volvo's decision to sell a part of its stake in Eicher Motors will not impact the joint venture between the two companies, said Vinod Aggarwal, CEO, Volvo Eicher Commercial Vehicles.

Earlier this week, Volvo said it would sell half its 8.4 percent stake in Eicher Motors.

Aggarwal said VECV was growing faster than industry in the bus, light and medium commercial vehicle segment.

9:30 am First day of telecom auction: The biggest ever auction of 2G and 3G airwaves Wednesday began on a high note with operators makingbids worth an estimated Rs 60,000 crore after six rounds of bidding in all four bands. The bidding will resume tomorrow morning in the auction through which the government was expecting to raise over Rs 82,000 crore. The final amount may go much higher if bids continue at such an aggressive pace.

"Six rounds of bidding were concluded today with bids worth Rs 60,000 crore coming in all the four bands on offer," a source privy to the development said. Incumbent Bharti Airtel and Vodafone are locked with upstart carrier Reliance Jio of billionaire Mukesh Ambani to protect their spectrum they need to carry voice and data in the world's second-biggest smartphone market. In all, eight bidders are in fray.

The market rebounded with marginal gains on Thursday. The Sensex rose 62.50 points to 29443.23 and the Nifty advanced 6.75 points to 8929.40.

About 365 shares have advanced, 140 shares declined, and 97 shares are unchanged on the BSE.
 
M&M, Sun Pharma, ITC, Cipla, Bajaj Auto, BHEL, Tata Motors and L&T are prominent gainers in early trade while ICICI Bank, NTPC, GAIL, Infosys, HUL and Jindal Steel are under pressure.

Reliance Infrastructure gained 2 percent and Pipavav Defence tanked 10 percent. Reliance Infrastructure has acquired 18 percent promoter's stake in Pipavav Defence for Rs 819 crore at Rs 63 apiece. Reliance Infra will make open offer for 26 percent stake in Pipavav at Rs 66/share.

The Indian rupee has opened lower, down 7 paise to 62.32 a dollar compared to 62.25 a dollar in previous session.

Mohan Shenoi, Kotak Mahindra Bank says the overnight dollar rally against major currencies and weak global equity markets is likely to exert pressure on rupee today.

He expects the rupee to trade in a range of Rs 62.20-62.50/USD today.

Meanwhile, in case of bond yields, he says despite the surprise 25 bps cut in policy rate by RBI, the bond yields rallied only by 7-8 basis points due to profit booking, comments by rating agencies and weakness in the stock and forex market.

"Bond yields are expected to remain rangebound for some time. 8.40 percent GOI 2024 is expected to trade in a range of 7.67-7.71 percent today," he adds.

 

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