Market Live: Sensex, Nifty, Midcap off day#39;s highs; HPCL, BPCL, IOC erase gains

12:06 pm Inflation: Wholesale price index inflation increased to 3.24 percent in August from 1.8 percent in previous month.

12:05 pm Reliance Comm in focus: Reliance Communications said it will challenge equipment maker Ericsson’s petition against it under the insolvency and bankruptcy code for recovery of about Rs 1,155 crore.

“We wish to inform you that Ericsson India Private Limited (Ericsson), an unsecured operational creditor, has filed petition under IBC provisions against the company in… National Company Law Tribunal, Mumbai Bench (NCLT)… for recovery of an amount of Rs 491.41 crore,” RCom said in a BSE filing.

Ericsson has also filed similar petitions against RCom subsidiaries, Reliance Infratel and Reliance Telecom, for recovery of Rs 534.75 crore and Rs 129.34 crore, respectively, the filing added.

“Today, after hearing the parties, the NCLT has adjourned the matter to 26th September, 2017. The company intends to challenge the said petitions,” RCom said.

The debt-ridden telecom operator has been given time till December 31 by the lenders to service its debt obligation. It has been reeling under a financial crisis following cut-throat competition over tariff.

Reliance Communications share price fell over 2 percent.

12:02 pm Buzzing: Shares of Axis Bank gained around 4 percent intraday after global financial services firm upgraded its rating on the stock.

Deutsche Bank, in its report, upgraded the rating on the stock from hold to buy with an increased target price of Rs 600.

Further, it said that the risk reward is favourable and the company could have stronger tailwinds than the headwinds.

Moreover, a long cycle of non-performing loans (NPLs) is seemingly peaking now, it said, adding that the next fiscal will be the year of change.

11:55 am Market Outlook: Indian market is on the cusp of breaking its record milestones.

The rally is due to the gush of liquidity. The market did not seem to be in a bubble, Sridhar Sivaram, Investment Director, Enam Holdings said in an interview to CNBC-TV18.

“This is a part of a global rally…emerging markets are at a 3-year high, US markets are up,” Sivaram said.

11:50 am Buzzing: Graphite India share price rallied 8.4 percent intraday Thursday after Jefferies has initiated coverage with buy rating.

The research house set a target price of Rs 342 for Graphite, implying a potential upside of 31 percent as it feels earnings will grow at CAGR of 116 percent over FY17-20.

It also expects improvement in realisation to drive revenue CAGR of 32 percent over FY17-20 and cash conversion cycle to improve to 27/20 days in FY18/19.

Company’s German subsidiaries will turnaround with revival in graphite demand, the research house said.

11:43 am Rupee trims early losses: The rupee trimmed its early losses against the dollar and was trading 8 paise down at 64.07 in late morning deals.

A sustained bouts of dollar demand from banks and importers kept the rupee under pressure, currency traders said.

The rupee resumed sharply lower by 17 paise at 64.17 per dollar against Wednesday’s closing level of 64.00 per dollar at the interbank foreign exchange market.

At overseas, the dollar held steady near a four-week high against the yen, with traders looking to US consumer inflation data later in the day for clues on the possible timing of the Federal Reserve’s next rate rise.

11:40 am Oil retailers under pressure: Oil marketing companies wiped out early gains on profit booking.

IOC, HPCL and BPCL were down up to 1.5 percent after rising 4-5 percent in early trade as the government ruled out intervention in daily revision of fuel prices.

11:20 am Market Check: Equity benchmarks as well as broader markets were off day’s highs in morning as HDFC Group, auto and technology stocks were under pressure.

Oil stocks were also off day’s highs on profit booking.

The 30-share BSE Sensex was up 41.21 points at 32,227.62 and the 50-share NSE Nifty rose 7.90 points to 10,087.20.

The BSE Midcap and Smallcap indices trimmed gains to half a percent from 1 percent in early trade. About 1,341 shares advanced against 847 declining shares on the BSE.

11:10 am Buzzing: Sun Pharmaceutical Industries share price rallied for third consecutive session today, up 4 percent intraday after Credit Suisse has upgraded rating on the stock to outperform from neutral, citing strong growth trajectory.

The stock surged more than 10 percent in three consecutive sessions.

The research house also hiked its target price to Rs 595 (from Rs 490 earlier), implying potential upside of 23 percent due to higher specialty valuation (net present value Rs 35 per share), FY19 EPS up by 5 percent, separating specialty loss of 15 percent from core profits.

“EPS for FY19/20 is 10 percent higher than consensus due to our view of lower erosion on generics and constructive stance on specialty,” it said.

Key risks according to Credit Suisse are Halol resolution delay, Dadra Form 483, and Department of Justice (DOJ) penalty.

10:59 am Market Expert: Ridham Desai of Morgan Stanley said, “This is a bull market and, therefore, we continue to be a buyer, especially on any dips, albeit we expect a moderation in returns in the months ahead. Midcap valuations look stretched. Additionally, stocks of some high-quality companies look rich too.”

“Cyclically adjusted valuations are now nudging 5-year highs, as is the market cap to GDP. Most other valuation metrics look reasonable, though valuations on their own – unless at extreme points – rarely give a clue of where stocks are heading.”

“We also don’t think the market is pricing in a multi-year growth cycle, implying meaningful upside potential to stocks over the next 3-5 years,” he added.

10:45 am FII View: Equity markets across the world have performed very well as most markets in Asia have given a return of 20 to 25 percent in dollar terms. India is up 30 percent in dollar terms.

“I am positive on emerging markets for about a year relative to the US,” Marc Faber, the editor and publisher of The Gloom, Boom & Doom Report, said on CNBC’s “Squawk Box.”

“If I look back, after 2014, emerging markets grossly underperformed the S&P 500. If we look at major markets in Asia, India rose 30 percent in USD and Chin hasn’t gone up that much which bring me to conclude that some money will move from India to Chinese markets,” he said.

Why will the money move from Indian markets to China? “Sentiments around China were very negative in the past six months to a year but that is now turning positive,” added Faber.

10:32 am Buzzing: BHEL shares gained 3 percent as BHEL and Kawasaki will make rolling stock for bullet train.

10:23 am Bullet train: Prime Minister Narendra Modi and Japan PM Shinzo Abe laid the foundation for 508-km bullet train project.

Abe said today is a historic day; India and Japan formed a new partnership. “We feel privileged to be a partner in India’s first bullet train project,” he said.

The bullet train project is expected to be completed within 2023, after which the train will be capable of running at the high speed of 350 km per hour.

The project, funded 80 percent by the Japan Investment Cooperation Agency (JICA) as a soft loan spread over 50 years at minimal interest rate, will reduce travel time between Mumbai and Ahmedabad from seven to two hours. The rest of the funding, amounting to Rs 9,800 crore, is borne by the Indian Railways, making the project one of its costliest.

For this project, the new Shinkansen Technology from Japan will come to India and be developed under Make in India scheme, as per Railway minister Piyush Goyal.

10:17 am Telecom subscribers: India’s telecom subscriber base dipped marginally by 1.3 lakh to 121.07 crore in July, as per latest data published by regulator Trai.

Only three operators — Reliance Jio, Bharti Airtel and state-run BSNL — reported subscriber additions in the month, while eight other operators including Idea Cellular and Vodafone, saw a decline.

“The number of telephone subscribers in India slightly declined from 1,210.84 million at the end of June 2017 to 1,210.71 million at the end of July 2017,” the Telecom Regulatory Authority of India (Trai) said in its monthly subscribers report.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

10:13 am Buzzing: Bharti Airtel rebounded with 0.6 percent gains today after falling a percent in previous session.

On Wednesday, the telecom operator announced strategic partnership with South Korean telecom operator SK Telecom, known for using latest technologies, to build the most advanced telecom network in India.

The two companies will also collaborate on an on-going basis to evolve standards for 5G and advanced technologies like network functions virtualisation (NFV), software-defined networking (SDN) and Internet of Things (IoT), Bharti Airtel said in a statement.

The companies will jointly work towards building an enabling ecosystem for the introduction of these technologies in the Indian context.

10:08 am Mini-Budgets: When finance minister Arun Jaitley stands up in Lok Sabha early next year to present the budget for 2018-19, it will mark the beginning of a new course in India’s annual accounting process. The National Democratic Alliance (NDA) government’s fifth and, possibly the last full budget in this term, will also be a breakout financial plan.

The roll out of Goods and Services Tax (GST) from July 1 has meant that the central finance minister will have very little discretionary powers in changing a jumble of indirect levies.

India is in the midst of overhauling its tax system by consolidating an untidy patchwork of local and central duties such as VAT, central excise, special additional duties, cesses and service tax into a single levy –GST—that seeks to make tax administration more efficient, bring in transparency, remove red tape and turn India into a common national market by removing fiscal barriers among states.

The GST council, chaired by the Union finance minister and ministers from states as its members, now decides on GST rates, implying that `Part B’ central budget speeches from 2018 onwards will not contain the long list of indirect taxes that the finance minister presents every year.

10:05 am Market Check: Equity benchmarks extended gains in morning trade, with the Nifty inching towards its previous record high.

The 30-share BSE Sensex was up 115.84 points at 32302.25 and the 50-share NSE Nifty gained 40.65 points at 10,119.95.

The broader markets continued to outperform benchmarks as the BSE Midcap index rallied 1 percent and Smallcap index rose 0.9 percent on strong breadth.

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

9:55 am Asia weak: Major indexes in Asia were mostly flat with a negative bias after the release of softer-than-expected China data. Markets also digested the rise in US Treasury yields overnight following tax reform headlines out of Washington, although the dollar’s advance paused.

Japan’s Nikkei 225 edged down 0.12 percent after three straight days of gains. Across the Korean Strait, the Kospi rose 0.24 percent.

The S&P/ASX 200 slipped 0.16 percent while the Hang Seng Index declined 0.42 percent. The Shanghai Composite traded 0.17 percent lower.

9:45 am Order win: Share price of Thermax gained 3.5 percent on the back of first EPC order in the GCC region.

The Thermax Group has won a USD 43 million contract from a leading cement company in the UAE for a turnkey captive power plant.

MS Unnikrishnan, MD & CEO of Thermax said, “This is the first EPC order that Thermax will be executing for a GCC (Gulf Co-operation Council) country. We intend to expand our footprint in this region where we have been providing business solutions.”

9:35 am Oil Minister: Oil Minister Dharmendra Pradhan on Wednesday ruled out government intervention to disrupt the daily revision in petrol and diesel prices despite Rs 7.3 per litre spike in rates since July, saying the reform will continue.

He however remained non-committal on cutting taxes to soften the blow of relentless rise in prices since July 3, the government need to finance huge infrastructure and social projects has to be balanced with consumer needs.

Terming the criticism of spike in rates as unfair, he said the drop in prices for over a fortnight after the daily price revision was introduced on June 16 has been ignored and only “temporary” phenomenon of rising trend is being highlighted.

India relies on imports to meet 80 per cent of its needs and so domestic fuel rates have been aligned to movement of equivalent product prices in the international market since April 2002.

9:25 am Buzzing: Shares of Godrej Properties rose more than 3 percent in the early trade as it has bagged a residential project in Thane.

The company has entered into a joint venture with Nirmal Ventures for developing a residential project located on the Lal Bahadur Shastri Marg, Thane West.

This project will be developed under a development management agreement.

“The project spread over 14 acres and will offer approximately 1,95,000 square metres (2.1 million square feet) of saleable area and will be developed as a residential development comprising of modern residential apartments of various configurations along with a small retail component to support this residential development,” company said.

9:15 am Market Check: Equity benchmarks opened higher amid consolidation Thursday, with the Nifty reclaiming 10,100 level despite weakness in Asian peers.

The 30-share BSE Sensex was up 81.95 points at 32,268.36 and the 50-share NSE Nifty gained 23.70 points at 10,103.

Sun Pharma rallied nearly 4 percent, followed by Dr Reddy’s Labs, Lupin, Reliance Industries, Tata Motors, GAIL and Aurobindo Pharm.

Wipro plunged 3.5 percent. Kotak Mahindra Bank, HDFC Bank, HDFC, TCS, HUL, Tech Mahindra and Power Grid were also under pressure.

HPCL, BPCL and IOC rallied 3 percent each as the government ruled out oil price cut.

Thermax, Jubilant Foodworks, Tata Chemicals, Cyient and Deepak Fertilisers gained up to 4 percent.

The Indian rupee opened lower by 17 paise at 64.17 per dollar today against previous close of 64.
“In the absence of any major triggers, the rupee is expected to stay in a tight range with trading range for the day at 64-64.30,” Mohan Shenoi of Kotak Mahindra Bank said.