Market Live: Sensex erases opening gains, Nifty holds 10,050; Midcap outperforms

11:01 am Market Check: Equity benchmarks continued to be volatile in morning, with the Nifty trading in a tight range of 30 points.

The 30-share BSE Sensex was up 52.37 points at 32,377.78 and the 50-share NSE Nifty rose 14.10 points to 10,080.50.

About 1,350 shares advanced against 808 declining shares on the BSE.

10:58 am Market Outlook: As the strong momentum in the market continued, with the Nifty clocking levels of above 10,100, several participants have pointed out the pace of earnings growth does not commensurate with the rally.

Having said that, Kotak Mahindra Asset Management Company (AMC) believes the earnings scenario in case of Nifty companies is divided into half and is a matter of perception.

Given that 25 companies saw poor earnings, while the rest posted strong numbers, one should look at sectors and companies with strong profit growth, Nilesh Shah, Managing Director of Kotak AMC told CNBC-TV18 in an interview.

In such a scenario, what should be an investor’s approach? Shah added that the market is divided into four components and one must choose the strategy accordingly.

10:45 am FIIs investment: The foreign institutional investors (FIIs) have remained gung-ho on Indian stocks which is now getting reflected in their ownership pattern. As of end-Jun FII ownership of the BSE500 was back near all-time highs, at 21.2 percent, rising 0.5 pp on a year-to-date (YTD) basis, Credit Suisse said in a report.

Domestic MF holding increased 0.6 pp YTD to 5.6 percent, another record high; other domestic institutional investors (DIIs) saw a decline though. “We believe both P/E multiples for the BSE500 and overall market flows still have strong global linkages, even though the cash pile and inflows for domestic MFs provide a buffer to the downside,” said the report.

As of end-Jun FII ownership of the BSE500 was back near all-time highs. Domestic MF holding increased 0.6 pp YTD to 5.6 percent – another record high.

On YTD basis DIIs net buying of USUSD 3.3 billion has been USUSD 5.2 billion lower than FIIs, as strong MF buying has been offset by selling by insurance and banks.

The foreign investors continue to focus on large caps as their share of Nifty is now at all-time high 26.2 percent, but their share of non-Nifty stocks is still at Dec-14 levels.

10:25 am Acquisition: Shares of Adani Transmission added 5.8 percent in morning as it has acquired 100 percent equity capital in two SPV companies.

The company has acquired 100 percent equity capital of two SPV companies namely Barmer Power Transmission Service and Thar Power Transmission Service from Rajasthan Rajya Vidyut Prasaran Nigam (RVPN) on August 4, 2017.
The said SPV companies were incorporated in June 2016 by RVPN.

The companies were incorporated for the development of 132 KV grid sub-stations along with associated transmission lines and associated schemes/work on PPP mode and the company has acquired it from RVPN pursuant to competitive bidding process carried out by Rajya Vidyut Prasaran Nigam.

10:15 am Buzzing: Tata Steel shares touched a fresh 52-week high of Rs 594.70, up 3.3 percent intraday ahead of June quarter earnings due later today.

Analysts feel earnings are expected to be strong on year-on-year basis, though sequentially numbers may be weak.

Consolidated profit in April-June quarter is likely to be at Rs 1,100 crore against loss of Rs 3,183 crore in year-ago quarter, according to average of estimates of analysts polled by CNBC-TV18.

Sale of investment in Tata Motors will aid profitability during the quarter. The company sold stake in Tata Motors at a price of Rs 453 per share to Tata Sons and that will realise income to the tune of Rs 3,700 crore.

Revenue from operations may increase 9.5 percent to Rs 28,902 crore compared with Rs 26,406 crore in same quarter last year.

Operating profit (earnings before interest, tax, depreciation and amortisation – EBITDA) is seen rising 30 percent year-on-year to Rs 4,200 crore and margin may expand 220 basis points to 14.5 percent in the quarter ended June 2017.

9:55 am Market Check: Equity benchmarks erased early gains, with the Sensex down 27.38 points at 32,298.03 and the Nifty down 3.45 points at 10,062.95.

TCS, Infosys, HUL, Reliance Industries, HCL Technologies, Yes Bank and ONGC were under pressure while ICICI Bank, Tata Steel, Maruti Suzuki, Hero Motocorp and Vedanta gained strength.

The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising half a percent each. About two shares advanced for every share falling on the BSE.

9:40 am Earnings Estimates: Amara Raja Batteries’ first quarter profit is seen falling 9 percent year-on-year to Rs 118 crore on weak operational performance.

Revenue during the quarter is likely to fall 3 percent to Rs 1,424 crore on year-on-year basis but it may be supported by increased prices in the OEM segment. Telecom segment is expected to post flattish revenues in Q1.

Operating profit may decline 7 percent to Rs 212 crore and margin may contract by 60 basis points to 14.8 percent compared with same quarter last year due to increase in raw material prices, according to average of estimates of analysts polled by CNBC-TV18.

Lead prices increased more than 25 percent since January 2017.

9:27 am: FII View: With foreigners turning net sellers in eight of the last nine days, Sakthi Siva of Credit Suisse the research house highlighted net foreign selling in Emerging Asia ex-China ex-Malaysia of USD 2.6 billion.

While MSCI Asia ex-Japan recently hit the year-end target of 640 and Credit Suisse has highlighted poor seasonals in August, the silver lining from this foreign selling is that on a rolling 12-month basis net foreign buying has dropped from a recent high of 0.7 percent to 0.3 percent in August.

9:15 am Market Check: Equity benchmarks opened moderately higher on Monday, with the Nifty inching towards 10,100 level following positive global cues.

The 30-share BSE Sensex was up 51.89 points at 32,377.30 and the 50-share NSE Nifty gained 14.10 points at 10,080.50.

Tata Steel gained 2 percent ahead of Q1 earnings. Tata Motors rose 1 percent despite weak JLR’s UK sales.

Nifty Midcap was up 0.5 percent as about two shares advanced for every share falling on the BSE.

L&T Finance Holdings, Jaiprakash Associates, Sarda Energy, Apollo Tyres, Bhushan Steel, Wockhardt, Sintex, Eros International, Cadila Healthcare and Torrent Power rallied up to 10 percent.

Repco Home Finance, GSFC, HPCL and SPARC were down up to 5 percent.
Asia markets were mostly higher, with investors’ risk sentiment likely improving from Friday’s better-than-expected US jobs number as they await to hear Pyongyang’s response to UN sanctions over the weekend.