Closing Bell: Sensex, Nifty end session on a subdued note, but midcaps end in green
3:30 pm Market at Close: Even as the Nifty touched a record high in opening tick, consolidation and range-bound moves continued on frontline indices on Tuesday.
The Sensex closed down 21.39 points at 32402.37, while the Nifty was down 4.05 points at 10149.05. The market breadth was negative as 1288 shares advanced, against a decline of 1311 shares, while 159 shares were unchanged.
Midcaps had a good day, outperforming the benchmark indices, while barring pharmaceuticals and PSU banks, all sectoral indices ended in the green.
Tata Motors, Tata Motors DVR and GAIL were the top gainers on both indices, while Coal India, Sun Pharma and Aurobindo Pharma were the top losers.
3:10 pm IPO subscription: ICICI Lombard General Insurance Company’s Rs 5,700-crore initial public offering has been oversubscribed 1.90 times, as per latest data available on the National Stock Exchange.
The IPO received bids for over 11.7 crore equity shares against issue size of 6.16 crore shares (excluding anchor investors’ portion).
The reserved portion of qualified institutional investors has oversubscribed 7.35 times while the retail category showed a subscription of 1.07 times and non-institutional investors 0.58 times.
2:59 pm Block deal: Tata Global Beverage stock price gained 3 percent intraday to hit a fresh 52-week high of Rs 220.25 after a big block deal.
Tata Group entity Tata Chemicals today sold 4,31,75,140 equity shares of Tata Global Beverages to Tata Sons through a block deal.
The chemical company sold these shares at a price of Rs 213.35 per share (excluding brokerage and STT).
2:47 pm Bharat Road Network falls: Bharat Road Network share price plunged more than 8 percent intraday as three big investors, who were allotted shares in IPO, sold nearly 25 percent of issue size.
Nomura Singapore and JM Financial Asset Management sold their entire lot of 26.7 lakh shares and 23.14 lakh shares (received in allotment) in open market on listing day, respectively.
JM Financial Equity also sold 4.4 lakh shares (out of 19.4 percent received in allotment), BNP Paribas Arbitrage 11.43 lakh shares (14.66) and JM Financial Balanced Fund offloaded 7.6 lakh shares on Monday.
Bharat Road Network made a tepid debut on exchanges on Monday and ended the session at Rs 208.45, up 1.7 percent over issue price of Rs 205.
2:39 pm Air India properties: State-run Air India returned its 2 Delhi properties worth Rs 6,500 crore to government, reports CNBC-TV18 quoting Cogencis.
2:28 pm Buzzing: Nomura has maintained its buy rating on Glenmark Pharma and raised target price to Rs 880, implying potential upside of 45 percent. The stock gained more than 2 percent.
The research house has increased its FY19/20 EPS estimates by 4/6 percent but cut FY18 EPS estimates by 5 percent.
It feels US launches and outlicensing deals will positively impact its earnings.
Approval of 4 key drugs will add USD 50 million with EPS impact of Rs 9/share in FY19, it said, adding outlicensing will generate upfront payments of more than USD 100 million.
2:14 pm JPMorgan ups HDFC target: JP Morgan has maintained an overweight rating on housing finance company HDFC and increased its target price for the stock to Rs 1,975, from Rs 1,720 per share earlier.
The research house expects steady earnings growth and minimal asset quality risk for Housing Development Finance Corporation.
Its earnings per share are expected to grow at CAGR of 15 percent over the next 3 years, JP Morgan feels.
It valued HDFC Life at Rs 55,000 crore; implying price/embedded value of 4.4x on FY17 basis.
The research house views HDFC as a very defensive stock.
2:05 pm Buzzing: Shares of Nila Infrastructures advanced 4.2 percent intraday on the back of order win from Adani group.
The company has received a work order pertaining to EPC contract worth Rs 51.11 crore from Adani group’s Shantigram Estate Management for construction of Inspire Business Park Project (Basement and Towers CH1 to CH9) at Shantigram, Ahmedabad.
The project envisages overall construction covering about 400,000 square feet built-up area and has to be completed by October 15, 2018.
1:55 pm Management interview: In an interview to CNBC-TV18, MK Dhanuka, MD of Dhanuka Agritech said, “We expect around 10-12 percent growth by year-end instead of 15 percent because the rainfall was erratic and there was no deficit of rainfall in Andhra Pradesh, Karnataka, Tamil Nadu.”
“Because of the recent rain in south and Maharashtra, we are hopeful that we will be able to deliver this growth. Because of the moisture and the water availability in the reservoirs, we hope rabi to remain good and we will be able to deliver double digit growth,” he said.
1:45 pm Market Check: The broader markets continued to outperform equity benchmarks in afternoon. Investors will closely watch the two-day US Federal Reserve meeting that will begin tonight.
The rate hike is unlikely but the key thing to watch out for would be its plan, if any, to trim balance sheet.
The 30-share BSE Sensex was up 23.64 points at 32,447.40 and the 50-share NSE Nifty gained 3.40 points at 10,156.50.
1:31 pm Gold trade: Gold inched up from its lowest in over two weeks as the dollar shed some gains, while the market’s focus turned to a two-day Federal Reserve meeting that kicks off later in the day.
US gold futures for December delivery edged up 0.11 percent to USD 1,312.20 an ounce.
1:20 pm BEML in focus: In an exclusive interview to CNBC-TV18, L&T’s executive chairman, AM Naik said the company can actively consider buying stake in state-run BEML.
He further said the company will take 1-2 years to complete planned divestment of non-core business.
9-10 businesses will either be sold or closed, he added.
1:01 pm Exclusive agreement: Cadila Healthcare has entered into an exclusive agreement for the technology know-how for varicella vaccine production in the Russian Federation with Pharm Aid Limited, headquartered in Russia.
“Through this agreement, Zydus gains access to public and private market segments in the Russian Federation, Belarus, Uzbekistan, Kazakhstan, Armenia and Kyrgyzstan,” it said.
12:51 pm Tata Group stocks in action: Tata Group stocks like Tata Motors, Tata Global Beverage and Tata Chemicals are most active on the BSE, especially after big block deals.
About 3.7 crore Tata Motors’ shares worth Rs 1,554.1 crore traded on exchanges through block deals, at an average price of Rs 421 apiece.
Tata Global Beverage’s 4.3 crore shares worth Rs 924 crore also traded on the BSE at an average price of Rs 214 apiece.
Sources told CNBC-TV18 that promoter Tata Sons raised its stake in Tata Motors by 1.7 percent through share purchases in open market.
Tata Motors gained 4.93 percent, Tata Chemicals 2.8 percent, Tata Global 2 percent and Tinplate surged 16 percent.
12:39 pm Europe trade: European markets opened slightly lower, as investors paused for breath ahead of a Federal Reserve meeting.
The pan-European Stoxx 600 edged down by around 0.19 percent shortly after the opening bell, with almost all sectors and major bourses in negative territory.
12:31 pm Management interview: Insurance growth trends have been very strong across the life insurance sector. Private players are gaining market share and LIC is showing signs of slowdown.
In an interview to CNBC-TV18, Arijit Basu, MD & CEO of SBI Life Insurance Company said the entire FY17-18 has been good and August numbers have continued in that way. For SBI Life also the numbers have been very good and we are continuing on the growth path that we have been seeing for the last three years, he added.
“SBI Life is uniquely positioned in the sense we are doing well in both the major channels that we have-the agency distribution or individual agency where we are growing at around 20 percent which is double of the general industry growth in this channel and in bancassurance the potential that is available in State Bank Group is immense,” said Basu.
Price to embedded value as on March ’17 basis is over 4x, he further mentioned.
12:24 pm Sebi approval: State-owned New India Assurance Company Ltd has received Sebi approval to float initial public offer (IPO), as per the latest update by the capital markets regulator.
The country’s largest non-life insurer had filed draft prospectus with Sebi in August and received ‘observations’ from it on September 15 that are necessary for an IPO.
According to the draft papers, the government will be selling 9.6 crore shares, whereas the company itself will be selling 2.4 crore shares through the IPO.
Thus a total of 12 crore shares of the non-life insurer would be sold through the share sale offer, constituting around 14.56 percent of the company’s post issue share capital.
12:21 pm IPO subscription: ICICI Lombard General Insurance Company’s initial public offering worth Rs 5,700 crore has been fully subscribed on final day.
The issue has been oversubscribed 1.14 times, as per latest data available on the National Stock Exchange.
The IPO received bids for 7 crore equity shares against issue size of 6.16 crore shares (excluding anchor investors’ portion).
The company’s two main shareholders – ICICI Bank and Canada’s Fairfax Financial Holdings – are selling a combined 8.62 crore shares (representing a 19 percent post paid-up equity) through offer for sale.
It would be the first non-life insurer to list on exchanges.
12:11 pm Driverless tractor: Mahindra & Mahindra today displayed its first ever driverless tractor.
“Developed at the Mahindra Research Valley, the Group’s hub of innovation and technology located in Chennai, the driverless tractor is all set to redefine the mechanization process for the global farmer,” it said.
It further said no product is being currently launched but the company is voluntarily furnishing details in this regard.
M&M is expected to launch this product commercially in the year 2018 in a phased manner.
The company said this technology would be deployed across Mahindra tractor platforms in due course of time. It will also be deployed across international markets such as USA and Japan, it added.
Yesterday, the Company and Ford Motor announced their intent of exploring a strategic alliance, designed to leverage the benefits of Ford’s global reach and expertise and Mahindra’s scale in India and its successful operating model.
12:04 pm Fuel price fall likely?: Amidst mounting criticism from all corners against the rise in the oil prices, petroleum and natural gas minister Dharmendra Pradhan has said that the prices may come down by Diwali.
Pradhan said that the price of oil which had increased due to floods in the US will likely come down by the next month.
The minister who was recently elevated to the cabinet rank with an additional charge of the Ministry of Skill Development and Entrepreneurship said that the recent price rise was due to the fact that production of oil had dropped by 13 percent in the US because of the floods.
12:00 pm Market check: Equity benchmarks continued to consolidate in noon trade as investors looked for cues from Federal Reserve’s two-day monetary policy meeting that will start tonight.
The 30-share BSE Sensex was up 10.63 points at 32,434.39 and the 50-share NSE Nifty rose 2.30 points to 10,155.40.
The market breadth remained positive as about 1,191 shares advanced against 1,077 declining shares on the BSE.
Investors shifted their attention to the Fed as the Federal Open Market Committee will begin a two-day policy meeting today. The central bank is widely expected to leave interest rates unchanged when it announces its decision on September 20, but investors are awaiting details on its reduction of USD 3.7 trillion in Treasury and mortgage-backed securities bought during the financial crisis.
11:55 am Buzzing: Riding high on the rally in overall oil and gas stocks, Gas Authority of India Limited gained over 4 percent intraday after Morgan Stanley rerated the stock. The stock also hit its 3.5-month high mark.
In its report, the global research firm upgraded the rating on the stock from underweight to overweight and increased target price to Rs 522.
The broking firm also expects an earnings CAGR of 16 percent over FY17-20 from the company.
11:44 am IIFL on Somany Ceramics: Shares of Somany Ceramics rose 1.3 percent intraday as the brokerage house IIFL Securities has initiated coverage on the stock with a buy rating.
The research house expects the stock to hit a target of Rs 967, implying a potential upside 20 percent.
The firm expects revenue growth of the company will bounce back to 18 percent in FY19 and sees acceleration in tile segment & ramp-up of brownfield capacity.
It also expects consistent strong performance, healthy balance sheet and low leverage.
It believes that the company’s net profit is likely to grow at 18 percent CAGR over FY17-19 which will be mainly driven by volume growth and margin expansion.
11:29 am Interview: “Jet Airwyas has been fundamentally focused on the domestic and international market. We have seen that the domestic market continue to improve whereas faced challenges in international market especially in Gulf area in terms of volumes and yields,” Amit Agarwal, CFO said in an interview to CNBC-TV18.
We have increased our flights from Bengaluru-Amsterdam-Chennai and from Mumbai-London, said Agarwal.
Over the last two to two-and-a-half years, the company has been able to reduce the debt by more than Rs 2,800 crore. That continues to be focus, he said.
We could not pass the fuel increases to the customers in the Gulf region and we are working hard on the aspects of how to improvise on the revenue generating opportunities into Gulf market to stabilise further, he further mentioned.
He expects to see these movements but cannot give any guidance about the next quarter’s profitability.
11:15 am Buzzing: Tata Motors share price surged nearly 5 percent intraday. Sources told CNBC-TV18 the company’s promoter Tata Sons purchased its shares worth Rs 2,000 crore through reverse book building.
They have bought shares at around Rs 421 apiece, a 4 percent premium over Monday’s closing price.
The promoter’s strategy to buy shares through reverse book building could be to win investor confidence as the stock underperformed other auto stocks in the last one year. Even its financials have been under pressure.
Tata Motors share price fell more than 25 percent in last one year against a 10-percent rally in the Nifty Auto index and 16 percent gain in the Nifty50 index.
This reverse book building helped promoters raise stake in the auto company by around 1.7 percent. Tata Sons and other promoters held 34.7 percent stake in Tata Motors as of June 2017.
11:00 am Gas stocks in action: Oil and gas companies were on investors’ radar after a global research firm presented a positive view on the sector.
Petronet LNG, GAIL India, Gujarat Gas, Indraprastha Gas and Gujarat State Petronet, among others, gained 2-6 percent intraday.
Morgan Stanley has turned more bullish on gas utilities as it sees a multi-year growth cycle ahead. The growth path was supported by benign gas prices and favourable government policies. This view, it said, bodes well for oil refiners as well.
In this sector, the research firm’s key picks include Reliance Industries, IOC, Petronet LNG, GAIL and BPCL. It also highlighted that OMCs have the balance sheet, scale and an intent to support gas in many ways. In fact, it estimates gas to replace half of fuel oil consumption in the industries by 2021.
On oil and gas companies, the company also sees OMCs as key enablers in raising India’s gas demand by 50 percent by FY22. It added that the OMCs were leading and have the capability to support USD 30 billion gas investment need.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
10:42 am Buzzing: Shares of Swan Energy added 6.3 percent intraday as it has entered in to agreements with Japanese firm.
The company through its fully-owned subsidiaries i.e, Swan LNG and Triumph Offshore have physically entered into agreements with Mitsui OSK Lines, Tokyo, Japan, for its India’s first LNG dedicated FSRU port project at Jafrabad, Gujarat.
“The LNG port project is first of its kind, all weather green field port project being developed by Swan LNG, company said.
10:35 am PSU Banks extend gains: Among sectoral indices, Nifty PSU Bank index fell the most, down nearly 1 percent.
Syndicate Bank, OBC, Andhra Bank, Bank of India, IDBI Bank, PNB, Bank of Baroda, Canara Bank, Allahabad Bank and Union Bank were down 1-2 percent.
10:25 am Market Outlook: Avendus Capital Alternate Strategies said that surging liquidity has been the reason for the current market rally.
“It (liquidity) will continue to push markets higher than we thought, while we can just sit around and look at negatives,” Andrew Holland, CEO, Avendus Capital Alternate Strategies told CNBC-TV18 in an interview.
He also highlighted how the Street chose to look over disappointing macroeconomic data and “…whatever has to be swept under the carpet, has been done”.
Holland also highlighted the extra gush of liquidity in several IPOs.
“Bankers are probably underpricing them. The situation actually reminded him about the scenario in 2007, where companies were getting a huge premium for no reason. “Insurance IPOs are priced high and it will be difficult for the market to absorb them,” he told the channel.
10:15 am Market Check: Equity benchmarks saw some selling pressure amid consolidation in morning trade as investors looked for cues from Federal Reserve’s monetary policy meeting that will begin tonight.
The 30-share BSE Sensex was down 24.75 points at 32,399.01 and the 50-share NSE Nifty fell 10.15 points to 10,142.95.
The broader markets outperformed benchmarks as the BSE Midcap and Smallcap indices gained 0.3 percent each on positive breadth. About 1,066 shares advanced against 915 declining shares on the BSE.
10:11 am IPO: Footwear retailer Khadim India has received capital markets regulator Sebi’s approval to raise an estimated Rs 550-650 crore through an initial public offering.
The company had approached Securities and Exchange Board of India (Sebi) with its draft red herring prospectus in July and received its ‘observations’ on September 13, which is necessary for any company to launch their public offer.
Khadim India’s initial public offer (IPO) comprises fresh issue of equity shares aggregating up to Rs 50 crore and an offer for sale of up to 6,574,093 equity shares by the existing shareholders.
Net proceeds from the issue would be utilised towards payment of loans and for general corporate purposes.
10:05 am Rupee trade: The rupee dropped marginally against the US currency to 64.14 in early trade today on some dollar demand from importers and banks.
The rupee opened lower by 5 paise at 64.18 against the last close of 64.13 at the interbank foreign exchange. It moved in a range of 64.18 to 64.13 in early trade before quoting at 64.14, down by 1 paise, at 0930hrs.
Forex dealers said dollar demand from banks and importers weighed on the rupee.
A weakness in the US dollar against some currencies in the global market and a higher opening of the domestic equity market, however, limited the fall.
9:55 am Buzzing: Shares of Biocon rose 3.6 percent intraday on zero observation from USFDA for Visakhapatnam facility.
United States Food & Drug Administration (USFDA) has completed the audit of active pharmaceutical ingredients facility at Visakhapatnam, Andhra Pradesh without any observations, and so not issued form 483.
The USFDA has inspected the said facility from September 11 to 15.
The company had acquired the above unit from Acacia Lifesciences in October 2015.
The successful audit of this facility reflects our strong commitment to cGMP compliance at our manufacturing facilities, company spokesperson said.
9:45 am Market Outlook: Going forward, Aditya Agarwal of Way2Wealth Brokers expects Nifty to rally towards 10,200-10,250.
Any weekly closing above 10,200 will confirm that the current trend is still up, he said.
In the short term, 10,200 level will act as resistance for Nifty, he added.
“We saw Call writing in 10,200 and 10,300 strike options. However, on the positive side, put writing was seen at 10,100-10,000 which will prove as a strong support zone for indices,” he said.
Overall, the outlook for broader indices remains bullish and the current technical setup suggests buy on dips, he feels.
9:35 am USFDA approval: Shares of Glenmark Pharma gained 2 percent intraday on the back of final approval for Desonide Ointment from USFDA.
Glenmark Pharmaceuticals Inc, USA has been granted final approval by the United States Food & Drug Administration (USFDA) for Desonide Ointment, 0.05%, the generic version of Desonide Ointment, 0.05%, of Perrigo New York Inc.
The Desonide Ointment has achieved annual sales of approximately USD 23.4 million, as per IMS Health sales data for the 12 month period ending July 2017.
9:25 am FII View: Mahesh Nandurkar of CLSA said meetings with investors at the CLSA Investors’ Forum revealed that India has not remained as much of an overweight market today as it used to be 12-24 months ago.
Foreign flows have been weak and continued strong domestic flows have helped market performance and valuations, which he believes will continue to be the case in the visible future.
He said a process of slow normalisation post GST is now underway and should partially help the September quarter results.
Low base should help YoY performance in the subsequent three quarters, he added.
Nandurkar said the research house remained optimistic that housing-led capex recovery is around the corner.
9:15 am Market Check: The NSE Nifty turned flat after opening at fresh record high on Tuesday as investors looked for cues from two-day monetary policy meeting of Federal Reserve that will begin tonight.
The 30-share BSE Sensex was up 8.83 points at 32,432.59 and the 50-share NSE Nifty gained 6.20 points at 10,159.30.
Gas stocks like GAIL, Gujarat Gas and Indraprastha Gas gained 2-4 percent after Morgan Stanley said gas demand is on secular growth path supported by benign gas prices and favourable government policies.
Biocon, Bharat Gears, Divis Labs, Dixon Technologies, Autolite, TVS Electronics, Graphite India, HEG and ADF Foods rallied up to 10 percent.
InterGlobe Aviation, Bharat Road Network and Mirc Electronics fell up to 6 percent.
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