Market Live: Sensex remains under pressure on North Korea tensions; RIL most active
11:25 am What’s driving gold prices up? Despite many claims to the contrary, North Korea tensions aren’t actually what’s driving the rally in gold, Goldman Sachs said in a Tuesday note.
Instead, the bank said, uncertainty inspired by President Donald Trump has boosted the yellow metal — but that’s set to fade.
Spot gold has certainly rallied of late, climbing from levels under $ 1,212 an ounce in July to as high as $ 1,342.90 this week, touching its highest levels in around a year, according to Reuters data.
Gold, which traditionally acts as a safe-haven play when investors turn nervous, was at $ 1,338.50 an ounce at 9:41 a.m. HK/SIN on Wednesday. You can read the full report here.
11:05 am Market Check: Dragged by weak global cues on the back of geopolitical tensions, benchmark indices in India too fell around half a percent in the past hour, with the Nifty looking to breach 9900-mark.
The Sensex was down 171.72 points at 31637.83, while the Nifty was down 47.85 points at 9904.35. The market breadth was negative as 986 shares advanced against a decline of 1106 shares, while 104 shares were unchanged.
Kotak Mahindra Bank, Reliance Industries, GAIL and Ambuja Cements were the top gainers, while Sun Pharma and ITC lost the most.
10:58 am Market Outlook: Consolidation gripped the Indian market after a stellar, one-way rally since February. Between August and now, geopolitical tensions, lower than expected earnings growth pushed returns from frontline indices to a negative of 2 percent.
Should an investor be worried in such a scenario or treat this as a routing protocol on the market?
“On a year-to-date basis, we are up about 20 percent and India is one of the best performers. Certain phases of consolidation are quite natural in such a scenario,” Ratnesh Kumar, MD & CEO, BOBCAPS told CNBC-TV18. Further, he added that the gross domestic product (GDP) numbers and Q1 earnings growth were weaker as well.
Having said that, Kumar reiterated that there is nothing to worry about on a broader and structural basis. “On a 12-month basis, we could look at upside of 12-15 percent in broader market from these levels,” he said.
Kumar also said that earnings may see some recovery now. “As restocking comes back, you could have earnings growth in early teens in this fiscal that will drive the overall market performance,” he told the channel.
10:50 am Kotak Mahindra Bank rebounds: JP Morgan upgraded Kotak Mahindra Bank to overweight as it feels the private sector lender is well positioned for strong growth in coming quarters.
Subsidiaries provide diversified exposure to high growth segments, the research house believes.
The brokerage firm also increased target price of the stock to Rs 1,100 from Rs 875.
10:42 am Aviation sector in focus: Jet Airways shares gained around a percent in morning after a media report indicated that InterGlobe Aviation-run IndiGo is considering investing in company to attain a marked international footprint if it fails to acquire a stake in the debt-laden Air India.
As of now, IndiGo flies to 7 foreign destinations — Bangkok, Doha, Singapore, Kathmandu, Muscat, Dubai and Sharjah. Jet Airways and Air India, on the other hand, have flights which cross the Asian continent.
10:35 am Buzzing: Bharat Financial Inclusion recouped early losses and gained more than 1 percent to hit fresh 52-week high of Rs 935.45.
The stock fell 2.5 percent in opening after RBI notified on Tuesday that foreign shareholding through FIIs/FPIs in Bharat Financial Inclusion has reached the trigger limit.
Hence, further purchases of equity shares of this company would be allowed only after obtaining prior approval of RBI, RBI said.
10:28 am Most active shares: Reliance Industries, Just Dial, Bharat Financial, Reliance Capital and Infosys were most active shares on the NSE.
10:24 am Market Check: Equity benchmarks remained under pressure, following negative lead from Asia and Wall Street, as investors remained cautious about North Korea tensions.
The 30-share BSE Sensex was down 174.98 points at 31,634.57 and the 50-share NSE Nifty fell 49.10 points to 9,903.10.
The broader markets outperformed benchmarks as the BSE Midcap and Smallcap indices were flat with negative bias. About 1,054 shares declined against 875 advancing shares on the BSE.
Asian markets declined. Japan’s Nikkei 225 declined 0.3 percent as the dollar remained soft. Across the Korean Strait, the Kospi slipped 0.36 percent.
Down Under, the S&P/ASX 200 fell 0.0.4 percent. Greater China markets were also pressured. The Hang Seng Index was down 1.03 percent. On the mainland, the Shanghai Composite shed 0.28 percent.
10:18 am Rajan on NPAs: Former RBI Governor Raghuram Rajan said the biggest challenge is cleaning up the balance sheets of public sector banks.
“RBI (during his tenure) issued lot of things to increase competition in the banking sector which include giving 23 bank licenses. There were new banks, payment banks, small finance banks,” he said at an event here to launch his book ‘I do What I do’.
Noting that work is still in progress to reform state- owned banks, he said, “I think at this point, the single biggest challenge is cleaning up the balance sheets of public sector banks.”
Before bringing more change in the public sector banking system, “it is extremely important that the banks get back into the business of lending. That is clearly holding up the economy at this point.”
10:10 am Infosys postpones results announcement date: Infosys will announce its quarter and half-year ended September 30, 2017 financial results on October 24, the company informed exchanges.
This will be a departure from the tradition where the IT bellwether is among the first companies to announce results in the second week of the month.
No reason was given for the delay.
The board of directors will meet on October 23-24, 2017 and will also consider payment of an interim dividend. The software exporter will hold investor/analyst calls on October 24 to discuss the results and business outlook.
These results will be the first after Nandan Nilekani’s return to the company as the non-executive chairman. Nilekani took charge last month after Vishal Sikka resigned as CEO of the company following an extended spat with founder NR Narayan Murthy.
10:07 am Oil prices fall: Oil prices dipped as crude demand remained subdued on the back of refinery closures following Hurricane Harvey which hit the US Gulf coast 10 days ago.
Market focus was also being drawn to Hurricane Irma, a record Category 5 storm, which is barrelling towards important shipping lanes in the Caribbean.
Although many refineries and pipelines which were knocked out by Harvey are now in the process of restarting, analysts say it will take some time before the US petroleum industry is back to full crude processing capacity.
US West Texas Intermediate (WTI) crude futures were at USD 48.55 barrel, 0.23 percent below their last settlement.
10:05 am IPO money: Consumer electronics manufacturer Dixon Technologies on Tuesday raised nearly Rs 180 crore from anchor investors, including Kuwait Investment Authority Fund and Goldman Sachs India. The issue opened for subscription today.
The shares would be allocated at the upper end of the Rs 1,760-1,766 IPO price band.
The company has finalised allocation of more than 10.18 equity shares at a price of Rs 1,766 apiece to the anchor investors, according to a filing submitted to the BSE.
At this price, the total amount is Rs 179.78 crore.
Apart from Kuwait Investment Authority Fund and Goldman Sachs India Fund, other anchor investors include DSP BlackRock Micro Cap Fund, Steadview Capital Mauritius, HDFC Small Cap Fund and HSBC Indian Equity Mother Fund.
Kotak Midcap, ICICI Prudential Growth Fund, SBI Life Insurance Company and Birla Sun Life Insurance Company are among the other anchor investors.
Dixon Technologies aims to raise up to Rs 600 crore from the IPO. The offer comprises fresh issue aggregating up to Rs 60 crore besides an offer for sale of up to 30,53,675 shares by certain existing shareholders.
10:02 am ITC under pressure: Macquarie has downgraded cigarette major ITC to neutral and preferred to switch to Hindustan Unilever, citing fall in cigarette volumes.
“Channel checks suggest that ITC cigarette volume has declined significantly in July-August,” the research house said.
The company increased cigarette prices by around 14 percent in the last 9 months.
The research house also slashed target price to Rs 304 from Rs 340, following cut in FY18/19 earnings by 2-5 percent on lower volume assumptions.
9:59 am Buzzing: Shares of Merck gained more than 5 percent in the early trade as the holding company is looking to sale its consumer health business.
“Merck KGaA, Germany, the ultimate holding company of the company has announced that it is preparing for strategic options for its consumer health business globally including a potential full or partial sale of the business as well as strategic partnerships,” as per company release.
“This strategic initiative would involve the company’s consumer health business in India as well, the implementation of potential measures and their specific design are subject to further analysis and decision making by competent bodies,” it added.
9:55 am Earnings recovery: The mood is upbeat about the macros in India. Government policy outcome over the last few months is phenomenal, Susmit Patodiya, Associate Director, Head-Institutional Sales at MOSL said in an interview to CNBC-TV18.
He continues to believe that earnings will start picking up by second half of FY18.
He further added that growth in the Indian market is polarised currently.
On global front, he thinks geopolitical risks with regards to North Korea are huge.
9:52 am Caution on Fed rate hikes?: The Federal Reserve is getting more dovish in the face of weak inflation data, reducing the likelihood of a third rate hike this year, which traders already see as very unlikely.
Three Fed policymakers on Tuesday expressed doubts about further rate hikes, with one influential policymaker calling for a delay in raising US interest rates until the Fed is confident inflation will rebound.
A second Fed policymaker blamed the Fed’s rate hikes to date not only for weak inflation, but also for undermining the recovery in the labor market that many policymakers including Fed Chair Janet Yellen have cited as they have justified raising rates. Late Tuesday a third policymaker advocated patience on rate hikes, given slow growth and inflation.
Taken together, the comments from one third of the Fed’s current policy-setting panel suggest that months of falling or flat inflation readings could scuttle plans to raise rates once more this year and three times next year. Fed policymakers next meet September 19-20 and are due to release fresh economic forecasts that may envision a flatter path for rate hikes ahead.
9:48 am IPO: Bharat Road Network, the road and highways BOT company, opened its initial public offering for subscription today.
The public issue of up to 2.93 crore equity shares will constitute 34.90 percent of the post issue paid-up equity share capital.
The company is expected to raise Rs 571.35 crore at Rs 195 per share (the lower end of price band) and Rs 600.65 crore at Rs 205 per share, the higher end of price band.
The issue will close on September 8.
Incorporated in 2006, Bharat Road Network is a road BOT (build-operate-transfer) company, focused on development, operation and maintenance of roads & highways projects.
9:41 am Acquisition: Shares of HCL Technologies added 1.5 percent intraday as the company is going to acquire a UK based company.
The company has agreed to buy ETL Factory, a UK based company, which is doing business as Datawave.
ETL has created an innovative data automation platform which enables enterprise customers execute large scale, complex data-migration project at a leaner, faster and smarter way.
9:33 am Gainers & Losers: HDFC Bank, ITC, HDFC, IOC, ICICI Bank, TCS and Infosys were leading contributors to Sensex’ losses. However, Indiabulls Housing, HCL Technologies, HUL, UltraTech Cement and Asian Paints bucked trend.
9:29 am Buzzing: NDTV rallied 8 percent in early trade, taking total weekly gains to 57 percent.
The stock has been rallying on sentiment, especially may be after Star India bagged global media rights for IPL at more than Rs 16,000 crore for five years.
9:27 am FII View: Neelkanth Mishra of Credit Suisse said domestic growth may stay muted for a while.
Post Q1 GDP release, FY18 GDP growth estimates were cut sharply but not FY19, like for earnings after Q1 results, he added.
He feels global growth projections on the other hand are stabilising.
9:15 am Market Check: Equity benchmarks opened sharply lower on Wednesday and erased all its previous day’s gains, tracking weakness in global peers.
The 30-share BSE Sensex was down 201.91 points at 31,607.64 and the 50-share NSE Nifty fell 56.75 points to 9,895.45.
Nifty Midcap lost 0.7 percent as about three shares declined for every share rising.
Bharat Financial Inclusion, Divis Labs, Adani Enterprises, JP Associates, Adani Power, HCC, Indiabulls Real, DLF, Idea Cellular, Escorts, Ujjivan Financial, M&M Financial, InterGlobe Aviation were down up to 3 percent. However, Just Dial rallied 5 percent as HDFC MF picked up stake in company.
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