Market Live: Sensex, Nifty continue to fall only on correction in ITC, RIL

10:41 am Chart of the Day:10:35 am MF AUM performance: Overall, fund manager remains upbeat on markets as domestic mutual fund (MF) industry average AUM increased for the 15th consecutive quarter in 2QCY17 to a new high of Rs 19.6 lakh crore.

On a YoY basis, average AUM saw a 35 percent rise, primarily on account of inflows in growth (equity), income and liquid funds, backed by increased participation of domestic investors in equity schemes, said a Motilal Oswal report.

Equity AUM rose for the seventh consecutive month in June scaled to a new high of Rs 5.9 lakh crore (+1.3% MoM and +38% YoY). The increase in equity AUM was led by a rise in equity scheme sales while redemptions rose 38 percent on a MoM basis to Rs183 bn, it said.

10.15 am Market Check: The market continued to fall in morning trade, with the Nifty struggling below 9900 due to correction only in Reliance Industries and ITC.

The 30-share BSE Sensex was down 200.73 points at 31,874.05 and the 50-share NSE Nifty fell 42.95 points to 9,873 but the broader markets outperformed benchmarks, rising 0.2 percent on recovery in market breadth.

About 1039 shares advanced against 965 declining shares on the BSE.

Reliance Industries slipped 1.5 percent on profit booking after rising more than 12 percent in previous 11 consecutive sessions.

ITC shares lost 11 percent after the GST Council hiked cess on cigarettes that contributed more than 45 percent to total revenue. ITC alone contributed 335 points to Sensex’ fall followed by Reliance Industries with 47 points.

However, other stocks, including index heavyweights continued to support the market and helped benchmark indices trim losses.

10:00 am Earnings Estimates: FMCG major Hindustan Unilever, which is set to declare its June quarter earnings today, is expected to report flat growth in profit at Rs 1,175 crore against Rs 1,174 crore in same quarter last fiscal.

In June quarter 2016, the company had reported an exceptional gain of Rs 70.8 crore.

Topline and operational performance will be key to watch out for while the Street is divided on volume growth given uncertainty post GST rollout.

According to analysts polled by CNBC-TV18, revenue is seen rising 2.7 percent year-on-year to Rs 9,040 crore while operating profit may increase 4 percent to Rs 1,700 crore and margin may expand 20 basis points to 18.8 percent compared with year-ago quarter.

Underlying volume growth is seen in the range of 2 percent degrowth to 2 percent growth against 4 percent each in year-ago quarter and previous quarter.

9:45 am Buzzing: Share price of cement maker ACC touched 52-week high of Rs 1,798.85, rising nearly 3 percent intraday on robust numbers declared by the company for the quarter ended June 2017.

The company’s consolidated profit grew by 32.6 percent year-on-year to Rs 326.2 crore despite higher tax expenses. The growth was driven by strong operating income and revenue.

Revenue during the quarter increased 20.5 percent to Rs 3,959 crore compared with Rs 3,286 crore in same quarter last fiscal as cement sales volume increased 10.1 percent to 6.74 mt from 6.12 mt on year-on-year basis.

9:35 am MS downgrades ITC: Morgan Stanley downgraded the stock to equal-weight from overweight and reduced target price to Rs 285 from Rs 395.

According to the research house, the company will need 12-13 percent weighted average cigarette price hike hereon and will need 20 percent price increase in KSFT segment to offset tax increase.

Morgan Stanley expects 3 percent volume decline in FY18 versus earlier estimate of 5 percent growth and expects 6 percent cigarette business EBIT growth versus 20 percent earlier.

9:15 am Market Check: Equity benchmarks opened sharply lower on Tuesday, with the Nifty falling below 9900 level, dragged by ITC after cess on cigarette hiked by the GST Council.

The 30-share BSE Sensex was down 239.02 points at 31,835.76 and the 50-share NSE Nifty fell 56.55 points to 9,859.40.

ITC crumbled nearly 14 percent as brokerage houses downgraded the stock after the Goods and Services Tax (GST) Council decided to increase the cess on cigarettes. Other stocks like Godfrey Phillips (down 10 percent) and VST Industries (down 5 percent) also caught in bear grip.

HDFC, Infosys, TCS, Wipro and ACC gained up to 1.5 percent while Bharti Airtel surged 5 percent.

About two shares declined for every share rising on the NSE.

Shree Digvijay Cement, Linde India, Max Financial and Jubilant Foodwors lost up to 5 percent while Fortis Healthcare and Aditya Birla Nuvo gained up to 5 percent.