Closing Bell: Sensex closes below 31,000, Nifty holds 9500; banks crack

3:30 pm Market at Close: Benchmark indices trimmed some of its losses from the afternoon session, with the Nifty ending just a notch above 9500-mark while the Sensex ended below 31,000 for the first time since May 25.

The Sensex closed down 179.96 points at 30958.25, while the Nifty ended down 63.55 points at 9511.40. The market breadth was negative as 725 shares advanced against a decline of 1,896 shares, while 161 shares were unchanged.

State Bank of India, Axis Bank, Bank of Baroda and Zee Entertainment lost the most on both indices, while Bharti Airtel, ONGC, IOC and GAIL gained the most.

3:01 pm Stake sale: Mafatlal Industries shares rallied more than 11 percent intraday on approval from board of directors for stake sale in Navin Fluorine.

“The board of directors, on June 23, approved the sell of 1,18,389 equity shares of Navin Fluorine at appropriate market price at BSE and/or NSE,” the company said in its filing.

At Friday’s closing price, the transaction is valued at more than Rs 35 crore.

Hence, the textile company said trading window for dealing in equity shares will remain closed for all directors and designated employees, with effect from June 24-28.

The deal is related to restructuring of shareholding in Navin and reclassification of that shareholding from promoters to public/non-promoter category.

2:40 pm Monsoon: Met Department feels monsoon may cover most parts of the country in 2-3 days, reports CNBC-TV18 quoting Cogencis.

2:29 pm Market Outlook: In times when the market is going through a bit of consolidation, with spells of surge in between, Kotak Mahindra Asset Management Company (AMC) believes that this is the right time to build a portfolio from a long-term view.

The mutual fund house believes that this phase could last a little longer, but its long term bullish view on the market remains intact.

“Unlike in the past, liquidity in the market is coming in with a lot of hope and maturity… people will go into stock rotation-based performance,” Nilesh Shah, managing director of Kotak Mahindra AMC told CNBC-TV18 in an interview. This is one phase where the market could consolidate, but will break for the top later, he added.

2:05 pm Market Check: The market, in the afternoon session, continued to see heavy selling pressure, with the Nifty breaching 9500-mark.

The Sensex was down 271.50 points at 30866.71, while the Nifty was down 94.00 points at 9480.95. The market breadth was negative as 614 shares advanced against a decline of 1,884 shares, while 129 shares were unchanged.

State Bank of India (SBI), Axis Bank, Bank of Baroda and BPCL were the top losers on both indices, while Bharti Airtel, Adani Ports, and GAIL gained the most.

Also Read: A likely rise in provisioning cost could derail 50% rally seen in PSU banks

1:50 pm Buzzing: Sterlite Technologies shares rallied 4.5 percent intraday on selection for the implementation of smart city solutions in Kakinada, Andhra Pradesh.

“Kakinada Smart City Corporation selected the company as its implementation partner to deliver various Smart City related ICT solutions that include command control centre, CCTV surveillance, wi-fi, automatic number-plate recognition, face detection, waste and disaster management, among other platforms,” the company said in its filing.

Kakinada was chosen among the first 20 cities in the first phase of the Smart City Mission.

As part of the project, the company will design, build and manage the Kakinada Smart City for the next six years.

“We are delighted to partner with Kakinada Smart City Corporation to design, build and manage Smart City solutions over a strong web scale, smarter optical transport network with optical fibre backbone,” K S Rao, COO – Telecom Products and Services, Sterlite Tech said.

1:23 pm Market Check: Benchmark indices as well as broader markets extended losses in afternoon trade, with the Nifty testing 9500 level intraday. Weak global cues also weighed.

The 30-share BSE Sensex was down 184.38 points at 30,953.83 and the 50-share NSE Nifty slipped 67.75 points to 9,507.20. About three shares declined for every share rising on the BSE.

Axis Bank, BPCL, Bank of Baroda and SBI were top losers among largecaps, down 3-4 percent.

European markets were lower after the president of the European Central Bank, Mario Draghi, defended the bank’s loose monetary policy and said a premature ending to easing could lead to another recession. France’s CAC, Germany’s DAX and Britain’s FTSE were down 0.2-0.5 percent.

1:05 pm Buzzing stocks: Aurobindo Pharma shares gained more than 3 percent intraday after sources told CNBC-TV18 that the US health regulator cleared company’s unit 7.

According to sources, the US Food and Drug Administration has completed inspection of company’s unit 7 based in Hyderabad.

It issued zero observations to this formulation manufacturing facility located in special economic zone.

It is one of the important and largest facilities for the company. As per company’s presentation to investors on June 26, it has, so far, filed 158 ANDAs (abbreviated new drug application) from this facility, of which 88 drugs received final approvals and 20 drugs have tentative approvals from the USFDA as of March 2017.

12:40 pm Interview: As the economy gears up for the goods and services tax (GST), this change is expected to be a welcome one for the tiles industry by creating a seamless national market for the organised players resulting in the removal of interest rate barriers and an improvement in supply chain.

Ashok Kajaria, CMD of Kajaria Ceramics said that Q1 numbers will take a hit especially in the month of June.

He further said that Kajaria Ceramics is projecting a double-digit growth in FY18.

He also expects strong recovery in demand from Q2 onwards.

Will gain market share from unorganised players, said Kajaria.

Sanjay Agarwal of Century Plyboard said that shift from unorganised market will accelerate after introduction of e-way bill.

He said that 80 percent of the plywood industry is unorganised.

Actual effect of GST will be visible after a year, added Agarwal.

12.12 pm Market Check: Equity benchmarks remained under pressure, with the Nifty struggling below 9550 level on consistent selling in banks, auto, technology and infra stocks.

The 30-share BSE Sensex was down 95.42 points at 31,042.79 and the 50-share NSE Nifty fell 41.85 points to 9,533.10.

About 1,652 shares declined against 694 advancing shares on the BSE.

Infosys, SBI, Axis Bank, Tata Motors, L&T and Asian Paints were down 1-3 percent while Bharti Airtel extended gains to 2 percent.

11:50 am Interview: According to Habil F Khorakiwala, Founder, Chairman & Group CEO of Wockhardt, Indian generic companies have been very competitive in the US markets. Indian pharma industry will hold its ground when it comes to US market.

He said that pricing pressure exists in the US. Pricing pressure should be between 7 percent and 9 percent, depending on portfolio.

On business front, he said Wockhardt will continue to do well in UK and Indian markets.

“As far as debt is concerned, we have not taken any action for the time being,” said Khorakiwala.

Wockhardt is taking effective steps to solve problems with regards to the US market.

11.30 am Market Check: Benchmark indices extended losses in morning trade, with the Nifty breaking 9550 level on further correction in banks.

The 30-share BSE Sensex was down 94.36 points at 31,043.85 and the 50-share NSE Nifty fell 43.45 points to 9,531.50. About 1,600 shares declined against 636 advancing shares on the BSE.

11:00 am Morgan Stanley on materials: Giving its view on aluminium stocks, Morgan Stanley said that it prefers, among the materials pack, Vedanta over Hindalco.

On aluminium stocks, it said that the Street is not fully incorporating strength in global aluminium price to levels that we believe are sustainable.

“Our overweight rating on Vedanta factors robust volume growth in key commodities as new capacities ramp up, stable / improving price outlooks for key commodities, and a strong balance sheet with net debt/EBITDA at 0.7x (F18),” its report added.

Meanwhile, on Hindalco, it said that the positive outlook factored in improved free cash flow driven by price-led upstream EBITDA growth and stable downstream earnings and management’s focus on deleveraging.

10:30 am Buzzing Stock: United Spirits gained over 3 percent intraday on Tuesday, following a ratings upgrade by Goldman Sachs.

Citing it as a source of opportunity, the research firm upgraded United Spirits to buy from a neutral rating due to better prospects of margin expansion. This is due to an improvement in product mix as well as cost savings undertaken by the company, its report stated.

10.15 am Market check: Equity benchmarks erased early gains, with the Nifty breaking 9550 level on correction in banks, auto, infra and select technology stocks.

The 30-share BSE Sensex was down 41.90 points at 31,096.31 and the 50-share NSE Nifty slipped 29.70 points to 9,545.25.

The broader markets underperformed benchmarks, with the BSE Midcap and Smallcap indices falling 0.8 percent each on weak breadth.

More than two shares declined for every share rising on the BSE.

ICICI Bank, Infosys, SBI, Axis Bank, Tata Motors and ONGC were down 1-2 percent whereas ITC, HDFC Bank, HDFC, Adani Ports and M&M outperformed, up 0.6-1.2 percent.

10:02 am Listing: Tejas Networks has seen a tepid listing on Tuesday as the stock price opened at Rs 257.70 on the National Stock Exchange, up only 0.27 percent from its issue price of Rs 257.

It, so far, managed to hold its issue price. The stock touched a high of Rs 266.15 in early trade.

At 10:02 hours IST, the share price was quoting at Rs 262.90, up Rs 5.90, or 2.30 percent on the NSE.

9:46 am Credit Suisse on Bharat Financial: Credit Suisse has maintained outperform rating on the stock, saying loan waiver is a non-issue for the company.

After recently visiting company’s operations in the Vidarbha region in Central India—one of the worst affected regions on collections post demonetisation, its takeaway is that the peak of collections pain is behind us, with numbers improving week-on-week.

News flow on loan waivers should have negligible/nil impact on the business, according to the research house. Fresh loans are disbursed only to fully current borrower groups.

“We continue to see value in the Bharat Financial. While there could be 1-2 quarters of further high provisioning, this is well known to the markets. Looking beyond, we believe that the stock should re-rate as fresh slippages stay in check and growth/profitability improve,” it said.

9:32 am FII View: Naveen Kulkarni of Phillip Capital said GST would throw the system into chaos over the next three months, as the channel adapts.

Large companies have better prepared IT systems, which could translate into market share gains, he feels.

Primary sales in the B2C segments will be sluggish in the transition period, but he expects a pick-up from the festival season in Q3.

He said while the near-term impact on B2C categories will be negative, considering the productivity gains and possible market share gains, he remains optimistic on larger consumer-facing companies.

Key beneficiaries include HUL, Colgate, Havells, Asian Paints, Titan Industries, Bajaj Electricals, Crompton Greaves and V-Guard.

Also read – Bull’s Eye: Buy Cipla, Reliance Defence, Century Textiles, Mindtree; Sell Sun TV

9:15 am Market Check: Equity benchmarks started off truncated week on a positive note, with the Nifty reclaiming 9600 level after a meeting between US President Donald Trump and Prime Minister Narendra Modi in the US.

The 30-share BSE Sensex was up 56.47 points at 31,194.68 and the 50-share NSE Nifty rose 26.40 points to 9,601.35.

ITC, HDFC, HDFC Bank, Adani Ports, HUL and Asian Paints were early gainers while SBI, ICICI Bank, Axis Bank, Infosys and Tata Motors were under pressure.

About five shares advanced for every share falling on the BSE.

Jaiprakash Associates and Jaypee Infra rallied 10-20 percent. Sterlite Technologies, United Spirits, Max Financial, NOCIL and Videocon Industries gained 2-5 percent while REC, PFC, Union Bank, PNB, Canara Bank and Apollo Tyres fell 1-2 percent.

The Indian rupee opened marginally higher at 64.48 per dollar against 64.52 Friday.

Markets in Asia were mixed as traders watched for signals from central bankers’ speeches. The Nikkei 225 rose 0.37 percent, while South Korea’s benchmark Kospi index reversed earlier losses to trade 0.17 percent higher.