Closing Bell: Sensex, Nifty end in the red on midcap correction, cross border tension
Sat May 27 2017
Ramesh Sridharan (877 articles)

Closing Bell: Sensex, Nifty end in the red on midcap correction, cross border tension

3:30 pm Market at Close: Benchmark indices ended the session on a negative note, dragged by fall in midcaps as well as escalating cross border tensions.

The Sensex closed down 63.61 points at 30301.64, while the Nifty ended 16.40 points lower at 9369.75. The market breadth was negative as just 697 shares advanced against a decline of 2,022 shares, while 151 shares were unchanged.

Tata Motors was the stock of the day, which was the top gainer, along with Tata Motors DVR and GAIL on both indices. Meanwhile, BHEL, Larsen and Toubro, Bank of Baroda and Bharti Infratel lost the most.

3:15 pm Earnings: Drug maker Lupin on Wednesday posted 49.2 percent drop in net profit in the fourth quarter ended March 2017 due to erosion of base business in US.

The company posted a net profit of Rs 380 crore in Q4, compared to Rs 748 crore in the same period previous year. Total revenues of the company declined 5.1 percent to Rs 4,253 crore .

The results were below analyst expectations. An analyst poll of CNBC-TV18 estimated the net profit at Rs 653 crore and revenues at Rs 4,454 crore.

3:05 pm Midcaps correct: The broader market led the decline on D-Street with both S&P BSE Midcap and Smallcap indices falling over 1 percent each. The benchmark indices gave up gains after media reports highlighted cross-border tension with Pakistan across LoC.

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2:59 pm Earnings: Auto components major Bharat Forge today reported a 25.32 per cent increase in standalone net profit at Rs 207.50 crore for the fourth quarter ended March 31, 2017.

The company had posted a net profit of Rs 165.57 crore during the same period of previous fiscal, Bharat Forge said in a regulatory filing.

Total income from operations stood at Rs 1,205.37 crore as against Rs 1,089.07 crore in the year-ago period, up 10.67 per cent.

2:45 pm Market Outlook: The market is near record high, but it has to be seen in the context of time lapsed, the level of interest rates and the returns on alternate asset classes, Miten Lathia – Fund Manager – Equities – HDFC Asset Management Co. Ltd, said in an exclusive interview with Kshitij Anand of Moneycontrol. You can read the full interview here.

2:30 pm NSE co-location update: The Securities Exchange Board of India (SEBI) has appointed an enquiry officer in the on-going case of National Stock Exchange’s (NSE) co-location facility.

The officer will examine the forensic audit conducted by Deloitte India and has been asked to verify Deloitte’s findings with SEBI’s internal data, says a Business Standard report.

NSE had appointed Deloitte to conduct an audit after SEBI said that the stock exchange’s systems – unicast architecture used at its co-location facility – were susceptible to manipulation. Deloitte’s report has not found any individual involvement or error, the report said.

2:10 pm Market Check: After seeing a sharp decline post cross border tensions developments, the market was off the day’s low points.

The Sensex was down 35.68 points at 30329.57, while the Nifty was down 18.80 points at 9367.35. The market breadth was firmly placed in the negative zone as just 649 shares advanced against a decline of 1,942 shares, while 139 shares were unchanged.

Tata Motors, GAIL and Tata Motors DVR were the top gainers, while BHEL, Cipla, Bank of Baroda and Bharti Infratel lost the most.

1:10 pm Market Check: Selling pressure intensified on the D-Street in the afternoon session after media reports surfaced that tensions across the LoC intensified after Pakistan Air Force’s jet fighter planes made flights near the Siachen glacier during the day.

The report, quoting Pakistani media, also suggested that forward operating bases were made operational. The development is seen as a response to a video released by the Indian Army on Tuesday which showed punitive fire being conducted on Pakistani camps in Noushera in Jammu & Kashmir.

The Sensex was down 25.72 points or at 30339.53, while the Nifty was down 12.90 points at 9373.25. The market breadth slipped further into the negative zone as 859 shares advanced against a decline of 1,626 shares, while 133 shares were unchanged.

BHEL, Cipla and Bharti Infratel lost the most, while Tata Motors, GAIL and Tata Motors DVR were the top gainers.

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12:50 pm Buzzing Stock: Shares of Videocon Industries extended its freefall on Wednesday after the stock hit lower circuit of 20 percent on Tuesday. The stock hit the lower circuit again on Wednesday after falling 10 percent on Wednesday.

The stock has been under pressure after Dena Bank classified Videocon as a non-performing asset, when it reported its results for the quarter ended March 9. The stock hit its lower circuit filter of 20 percent to hit its multi-year low.
“We would like to submit that Dena Bank has recently announced that it had classified Videocon’s loan amounting to Rs 520 crore as a non-performing asset (NPA). This has resulted into some negative publicity of the company and accordingly impacted the

stock price,” the company said in a clarification note to the exchanges on Tuesday.

12:30 pm Earnings Poll: Amara Raja Batteries will announce its fourth quarter (Q4FY17) numbers today. The company’s Q4 net profit is expected to increase by 8.6 percent at Rs 118 crore versus Rs 108.6 crore, reported in a year ago period.

Revenue of the company is likely to go up 15 percent at Rs 1345 crore versus Rs 1169.6 crore, according to analysts polled by CNBC-TV18.

The operating profit (EBITDA) is seen up 10.5 percent at Rs 210 crore, while margin seen down at 15.6 percent.

12:15 pm Market Check: Benchmark indices trimmed its gains, reflecting a tough battle between the bulls and the bears on the Street on Wednesday. The Nifty was on the verge of breaking 9400 again.

The Sensex was up 82.52 points at 30447.77, while the Nifty was up 17.35 points at 9403.50. The market breadth, however, was back in the negative as 1,112 shares advanced against a decline of 1,290 shares, while 151 shares were unchanged.

Tata Motors, Tata Motors DVR and GAIL were among the top gainers, while Cipla, Dr. Reddy’s Laboratories, Bharti Infratel and Hindalco lost the most.

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12:10 pm Buzzing Stock: Shares of Jubilant Life Sciences gained 12 percent intraday Wednesday as it has reported 14-fold increase in its March quarter numbers.

The company has reported Q4FY17 consolidated net profit at Rs 149 crore against profit of Rs 10.9 crore, in the same period last fiscal.

Revenue of the company rose 8 percent at Rs 1,641.4 crore versus Rs 1,515.8 crore.

The company’s EBITDA was up 4.1 percent at Rs 305 crore and EBITDA margin was at 19.1 percent.

The other income of the company was up at Rs 10.5 crore versus Rs 2.2 crore.

11:45 am Product approval: Drug major Sun Pharmaceutical Industries said the US health regulator has accepted biologics licence application (BLA) for tildrakizumab for the treatment of psoriasis.
“The FDA filing acceptance follows the acceptance of the regulatory filing of tildrakizumab by the European Medicines Agency (EMA) in March 2017. Tildrakizumab is an investigational IL-23p19 inhibitor being evaluated for the treatment of moderate-to-

severe plaque psoriasis,” Sun Pharma said in a regulatory filing.

Sun Pharma CEO -North America Business Abhay Gandhi said: “The acceptance of the regulatory filing by the US FDA marks a significant milestone as we seek to advance for tildrakizumab as a potential new treatment option for people who continue to struggle everyday with the chronic nature of psoriasis”.

11:30 am Buzzing Stock: Shares of JHS Svendgaard Labs were higher by 5 percent intraday as investors cheered the conversion of warrants.

The company on Tuesday converted 4,40,000 Warrants allotted on January 5, 2016 and January 8, 2016, into equivalent number of Equity Shares of face value of Rs. 10/- each, at an Issue Price of Rs. 11./- each.

The stock had seen weak movements in the past, losing around 18 percent in the past one month. However, in the recent past, it has traded positively, gaining 5 percent in the past one week, while its three-day gain stood at 4.6 percent. At 11:26 hrs, the stock was quoting at Rs 48.45, up Rs 2.30, or 4.98 percent on the BSE. It touched an intraday high of Rs 48.45 and an intraday low of Rs 48.45.

11:05 am Market Check: Benchmark indices extended their gains from the morning session, with the Nifty trading above 9400 mark.

The Sensex was up 149.65 points at 30514.90, while the Nifty was up 38.75 points at 9424.90. The market breadth was back in the positive zone as 1,211 shares advanced against a decline of 970 shares, while 114 shares were unchanged.

Midcaps were back in the green along with FMCG, banks and infra indices on the Nifty.

Tata Motors, Tata Motors DVR and HDFC were the top gainers on both the indices, while Dr Reddy’s Laboratories, HCL Tech, Asian Paints and Bharti Infratel lost the most.

10:50 am Buzzing Stock: Voltas rallied as much as 8.5 percent in morning trade on Wednesday, a day after the company reported 22.06 percent increase in consolidated net profit at Rs 200.47 crore for the fourth quarter ended March 31.

The company had posted a net profit of Rs 164.23 crore in the January-March quarter a year ago, Voltas said in a BSE filing.

In separate news, the Air-conditioner maker, Voltas, and Turkey’s Ardutch have agreed to set up a joint venture company in India with equity capital of USD 100 million.

10:30 am Job cuts: Tata Motors said it has reduced its managerial workforce by up to 1,500 people domestically as part of an organisational restructuring exercise.

“The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000…we do see as far as the white collar population is concerned, an overall reduction in the vicinity of 10-12 percent (up to 1,500),” managing director and chief executive Guenter Butschek told reporters here.

He was speaking after announcing the company’s earnings for the fiscal 2016-17.

The company joins a growing number of organisations adopting such strategies for a variety of reasons, ranging from cutting the flab to automation. These job cuts, which have led to concerns on ‘jobless economic growth’ in various quarters, have been across multiple sectors, including capital goods, banking & finance, and information technology.

10:05 am Market Check: Equity benchmark indices were trading steady after opening in the green zone, with the Nifty hovering around 9400-mark.

The Sensex was up 99.43 points at 30464.68, while the Nifty was up 18.80 points at 9404.95. The market breadth was negative as 856 shares advanced against a decline of 1,064 shares, while 88 shares were unchanged.

Midcaps, PSU banks as well as pharma were the top losers, while the auto index gained.

Tata Motors, Tata Motors DVR and HDFC gained the most, while Asian Paints, Dr Reddy’s Laboratories, HCL Tech and Bank of Baroda lost the most.

9:45 am IIFL on Tata Motors: In an interview to CNBC-TV18, Prayesh Jain, AVP-Research at IIFL shared his readings and outlook on the Q4 numbers of Tata Motors.

He said that the numbers are ahead of estimate. There are also tailwinds coming in from operating leverage with new models coming in so the volume growth should be higher.

He expects Jaguar Land Rover (JLR) margins in the range of 13.5-14 percent for FY18.

9:30 am Buzzing Stock: Shares of Cerebra Integrated Technologies gained 5 percent intraday Wednesday as it received permission from Karnataka State Pollution Control Board to start its E-Waste recycling plant in Bangalore.

Karnataka State Pollution Control Board has issued its consent to the company to start production for its E-Waste recycling plant setup on a 12 acre land at Narsapura Industrial Area, Old Madras Road.

9:15 am Market Opens: Benchmark indices opened on a positive note on Wednesday, with the Nifty reclaiming 9400-mark in the first tick.

The Sensex was up 71.86 points at 30437.11, while the Nifty was up 22.65 points at 9408.80. The market breadth was positive, but narrow, as 267 shares advanced against a decline of 145 shares, while 36 shares were unchanged.

Tata Motors gained around 4 percent on the back of stellar results, followed by Adani Ports and Tata Motors DVR. Meanwhile, Bharti Airtel, Lupin and Bharti Airtel lost the most.

The Indian rupee on Wednesday opened at 64.91 to the dollar, 2 paise weaker than its previous close of 64.89.

Pramit Brahmbhatt of Veracity said, “Pessimism which persists in the domestic equity market will be the reason for rupee to depreciate. The spot USD-INR pair will trade in a range of 64.80-65.20/dollar today.”

Globally, major indexes in Asia opened higher on Wednesday as investors looked ahead to US Federal Reserve views on interest rate hike prospects and await an upcoming OPEC meeting widely expected to extend production cuts for nine months to March 2018.

Markets are awaiting the release of minutes from the Fed’s for its last meeting on Wednesday in the US for details on the probability of a rate hike in June. More information from the Fed on how it intends to unwind its balance sheet is also expected.

Meanwhile, Wall Street edged higher on Tuesday as investors digested President Donald Trump’s budget plan, but a drop in consumer discretionary stocks offset a boost from the financial sector.

While Tuesday’s economic data was weak, investors appeared relieved that President Donald Trump’s first full budget plan was largely as expected.
“There were no large surprises. The market is pleased with that,” said Wade Balliet, Chief Investment Strategist at Bank of the West.

Ramesh Sridharan

Ramesh Sridharan

Ramesh Sridharan is our Stock Market Correspondent covering events and daily movements of stock markets in Asia. He is based in Mumbai

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