Market Live: Nifty breaks 9700 on FO expiry day, Sensex mildly lower
9:30 am IPO: Newgen Software Technologies has filed preliminary papers with markets regulator Sebi to raise an estimated Rs 400 crore through an initial share-sale offering.
The IPO comprises fresh issue of shares aggregating up to Rs 95 crore and an offer for sale of 1,34,53,932 scrips by existing shareholders, including Ascent Capital and Pandara Trust, according to draft red herring prospectus (DRHP) filed with Securities and Exchange Board of India (Sebi).
Proceeds from the fresh issue will be utilised towards purchase and furnishing of office premises near Noida-Greater Noida Expressway in Uttar Pradesh and for other general corporate purposes.
According to merchant banking sources, the company’s initial public offer (IPO) is expected to fetch Rs 400 crore.
9:25 am 5G Technology: Sterlite Technologies has launched a high-speed 5G ready network solution named FlashFWD at India Mobile Congress (IMC) 2017, being held in New Delhi, India.
Globally, as data consumption continues to grow exponentially, there is a need for new, dense networks that enable extremely high data speeds and low response times. 5G is expected to generate about eight times more data traffic than an average 4G connection, with 15 percent global population expected to have 5G subscriptions by 2021-22.
10:20 am Bad loans: The battle against bad loans shows no signs of abating, with another state-run bank now offloading its exposure in the beleaguered Essar Steel, reports CNBC-TV18.
Indian Overseas Bank has offloaded its exposure in Essar Steel to Edelweiss Asset Reconstruction Company for Rs 1,900 crore. Sources said Edelweiss ARC is likely believed to have bought IOB’s stake at a 50 percent discount to its book value.
10:15 am Stake sale: State-run ONGC yesterday said it may sell its holding in Indian Oil Corporation (IOC) and GAIL to fund the Rs 33,000 crore acquisition of HPCL.
The company is debt free and has got the shareholders’ approval to raise Rs 25,000 crore through borrowing, ONGC Chairman and Managing Director Dinesh K Sarraf said. “We have several options to fund the acquisition. On a standalone basis we are debt free so we can borrow from the market. Also, we have certain investments which can be sold,” Sarraf said.
ONGC has about 13.77 percent stake in IOC, which is worth around Rs 26,450 crore and 4.87 percent stake in GAIL, which is worth Rs 1,640 crore. Sarraf said no decision on selling stake has been taken but the option is available for the company.
10:06 am Tax woes for telecom sector: Large telecom operators including Bharti Airtel and Idea Cellular today lamented the high taxes, and spectrum costs being faced by the industry, and asked the government for immediate relief to mitigate the woes of the stressed sector.
While most of the speakers at India Mobile Congress inaugural eluded to India’s digital vision and technological prowess, Idea Cellular MD and CEO Himanshu Kapania minced no words in highlighting the “severe financial and mental stress” that the industry is going through.
He went on to red flag the industry’s woes ranging from introduction and proliferation of bundled unlimited usage plans to “lack of effective regulatory intervention”, all of which had bearing on the industry’s realisations.
Bharti Airtel MD and CEO for India and South Asia, Gopal Vittal too rued the high taxes in the industry.
10:01 am Modi on GST: Prime Minister Narendra Modi yesterday said traders across the country are “positive” about GST and accepting the new taxation arrangement but they need “handholding” so that their problems can be resolved.
He urged the chief secretaries to use the district administration in this regard, so that small traders are facilitated to access and adopt the new system, according to a PMO statement.
At the meeting, the prime minister reiterated that small businesses must register with the GST network to take advantage of business opportunities, the PMO statement said.
9:59 am Govt plans to dilute stake in O&G fields: India plans to offer stakes of up to 60 percent in oil and gas fields owned by state energy companies that are already under production to private firms, Reuters said quoting five government and company sources with knowledge of the matter.
The government is making the decision after failing to draw investment from global oil majors in new fields. The plan would boost India’s domestic oil and gas output and would meet Prime Minister Narendra Modi’s target to reduce oil imports by 10 percent by 2022. However, the plan could reduce profits of state-owned companies.
India is the world’s third-largest crude importer, buying 80 percent of its supplies from overseas.
Another of the sources, an ONGC executive, said the government’s move to invite private firms in the mature oil fields will impact their long-term plans.
9:55 am Stake sale: Carrier International (Mauritius) Limited, a subsidiary of UTC, has executed a trade on Wednesday, to divest its balance equity shareholding in Cyient, according to information available on the NSE.
Cyient said this is the second tranche of divestment, the first being done earlier on 7th June 2017. UTC first invested in Cyient in 2002 when the company was establishing itself as a global engineering services company. Since that time, Cyient has grown considerably and remains a trusted service provider to UTC with over 1,600 engineers engaged on UTC projects worldwide.
“UTC has been a strategic customer and investor in the company,” reiterated Cyient CEO Krishna Bodanapu. “Their decision to divest stood testimony to the growth of the company over the years and justified the prudence of the investment made therein.”
9:50 am Technical Outlook: See Nifty support in the range of 9,710-9,755, said Laurence Balanco of CLSA in an interview to CNBC-TV18. He still has a long-term target of 12,000 on Nifty.
According to him, Nifty at 9,710 is a good buying opportunity.
Nifty can attain 10,300 mark by end of current calendar year, he said.
He see downside target for the rupee at 62 against the US dollar.
Talking about crude, he said for Brent crude USD 58 per barrel looks like the top of its trading range.
9:41 am Rupee at over 6-month low: The rupee took more blows today as
it slipped 16 paise to a fresh six and a half month low of 65.88 against the dollar that gained clout overseas on talk of a US rate hike and the prospect of monetary stimulus pullout.
The US Fed’s policy decision and commentary led to foreign investors heading to the exit door here.
Month-end demand from importers for the US currency is at work, forex dealers said.
9:37 am Market Check: Benchmark indices extended losses in morning as the Nifty breached 9,700 level, down 36.95 points at 9,698.80.
The Sensex was down 45.50 points at 31,114.31. The market breadth was balanced as about 779 shares declined against 752 advancing shares on the BSE.
9:25 am Rollovers: Nifty rollovers were at 45.99 percent versus the lower than 3-month average of 48.78 percent, ICICIdirect said.
Market wide rollover was at 55.26 percent, lower than 3-month average of 57.34 percent.
Highest rollover was observed in DHFL (80 percent), JSW Steel (76 percent), Indiabulls Real Estate (74 percent), Bharat Forge (71 percent) and Bharat Finance (71 percent).
Roll activities have found some momentum in the last session across sectors due to high closure of positions in the September series. Nifty October series has added close to 39 lakh shares against closure of 34 lakh shares in the September series. The roll spread in Nifty remained largely range bound near 32 points (excluding dividend of almost 10 points in the September series). Data suggests continued short aggression getting rolled into the next series especially in the sectors like PSU Banks and cement, ICICIdirect said.
9:20 am FII View: Andrew Garthwaite of Credit Suisse said according to the research house, low volatility has some fundamental underpinnings like low GDP growth and inflation volatility, low default rates and the low real Fed Funds rate.
Previous instances of very low volatility have not necessarily preceded a significant sell-off, he added.
Credit Suisse believes that low volatility, by boosting the relative risk-adjusted return of equities, could encourage an asset allocation shift towards equities.
9:15 am Market Check: Equity benchmarks opened marginally lower on the day of expiry of September derivative contracts.
The 30-share BSE Sensex was down 36.73 points at 31,123.08 and the 50-share NSE Nifty fell 12.25 points to 9,723.50.
ONGC, Aurobindo Pharma, Bharti Infratel and Dr Reddy’s Labs were early losers while Tech Mahindra, Wipro, TCS, HCL Technologies and Axis Bank were early gainers.
Nifty Midcap was down 0.14 percent.
In broader space, Ipca Labs, DHFL, Reliance Home Finance, ICICI Lombard General and Titan Company were under pressure.
Goa Carbon, Divis Labs, Indo Count, Edelweiss Financial and Cyient gained 1-3 percent.
Meanwhile, the Indian rupee extended losses today, opening lower by 11 paise at 65.82 against the US dollar. In previous session, it closed at 65.71 a dollar.
Asian indexes were narrowly mixed today, after US equities advanced and the greenback rose following the unveiling of a long-awaited tax reform plan stateside.
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