Market Live: Sensex off day#39;s high, Nifty below 9850; PSU banks extend losses

2:30 pm Market Check: Benchmark indices continued to trade higher amid volatility ahead of outcome of two-day RBI monetary policy meeting due tomorrow afternoon.

Nifty Bank gained strength again while PSU Banks cut losses in afternoon trade.

The 30-share BSE Sensex was up 245.67 points at 31,529.39 and the 50-share NSE Nifty gained 71.05 points at 9,859.65.

About 1,332 shares advanced against 1,183 declining shares on the BSE.

2:25 pm IPOs: The initial public offerings (IPOs) of National Insurance, United India Insurance and Oriental Insurance may be pushed to the second half of the next financial year. While the government had given a go-ahead for the listing of state-owned general insurers, solvency dropping below 150 percent for two insurers has led to the delay. Sources said that the government is also looking to time them better and have an appropriate gap between the issues.

Among them, National Insurance which earlier had the minimum solvency drop below 150 percent pulled it back to 190 percent by the fourth quarter of last fiscal. As per regulatory norms, all insurers are required to maintain solvency capital of 150 percent at all times.

“Since these are large issues, adhering to the regulatory norms on capital will be crucial. They have been given time of three years before which they will have to bring it up. This is also to ensure that they get a proper valuation,” a source close to the development said.

2:15 pm Rupee Trade: The rupee fell sharply by 24 paise to 65.52 against the dollar today as the greenback took on more strength overseas.

Forex dealers said the greenback hit a one and a half month high overseas after US manufacturing activity in September rose to its highest level in 13 years, bolstering expectations of an interest rate hike.

However, they said, a higher opening in domestic equities kept the losses in check.

2:05 pm Pharma sector growth: Indian drug makers’ revenue growth in US may cool off to 7-10 percent over the next three years after mid- to high double-digit growth over the last five years owing to rising competition, fewer blockbuster drugs going off-patent, generic adoption reaching saturation levels and regulatory overhang, according to rating firm ICRA.

The overall aggregate revenues of 21 leading players declined 8.8 percent during the first quarter ended June compared to 0.2 percent growth in Q4 FY17, ICRA said.

1:55 pm Management Interview: The last shipment of alumina was at USD 440 per tonne, TK Chand, CMD of National Aluminium Company (NALCO) said in an interview to CNBC-TV18.

Talking about capacity, he said alumina capacity is at 2.1 million tonne and sales are around 1.1-1.2 million tonne.

He said that there has been an increase in input cost in Q2.

He further said that EBITDA per tonne was at USD 80-90 per tonne in Q1 of FY18, he added.

He expects net profit to grow by 45 percent in this fiscal.

There is a short supply of bauxite in the international market due to disruptions in Brazil, he mentioned.

1:45 pm Market Check: Equity benchmarks came off day’s highs in afternoon due to further fall in PSU banks. Investors awaited the outcome of two-day RBI monetary policy meeting due tomorrow afternoon.

The 30-share BSE Sensex was up 169.90 points at 31,453.62 and the 50-share NSE Nifty rose 48.40 points to 9,837.

About 1,309 shares advanced against 1,159 declining shares on the BSE.

1:40 pm Buzzing: Shares of Reliance Communications were lower by about 10 percent intraday after the company called off its deal talks with Aircel for merger. The stock touched a fresh 52-week low and an all-time low of Rs 17.35.

The Anil Ambani-owned telecom major will now hive off an alternate plan including monetising its spectrum bands and real estate assets.

In a meeting with Board of Directors, Reliance Communications reviewed the ongoing strategic transformation programme, and considered alternate plans for debt reduction.

1:32 pm More corporate activity likely: Morgan Stanley expects more IPOs and follow-on offerings in the coming months as companies raise growth and balance sheet repair capital.

Year to date, equity issuances stand at USD 8.7 billion (Jan to July) versus USD 5.6 billion for the same period last year.

“Also, we are arguing for an M&A cycle in the coming months, and combined with a continuing bid from domestic households, it appears to be an environment where demand for equities exceeds supply,” it said.

The research house said, “Domestic flows remain a key debate in the marketplace with several market participants continuing to be skeptics of the surge in domestic liquidity contrary to our view.”

1:19 pm Auto sales: Auto major Mahindra and Mahindra today reported a 16 percent increase in total sales at 53,663 units in September.

The company had sold 46,130 units in the same month last year, the company said in a statement.

In the domestic market, sales were up 19 percent at 50,456 units last month compared to 42,545 in September 2016.

Exports declined by 11 percent to 3,207 units in September against 3,585 in the year-ago month.

Sales of passenger vehicles, including Scorpio, XUV500, Xylo, Bolero and Verito, were up 23 per cent at 25,327 units compared to 20,537 in the same month last year.

Commercial vehicle sales grew 19 percent to 19,201 units in September against 16,081 in the year-ago period, M&M said.

1:07 pm M&M into new biz: Mahindra and Mahindra (M&M) today announced foray into construction equipment business by launching its first motor grader.

The Mumbai-based company today rolled out its first motor grader — Mahindra RoadMaster G75 — under the business vertical.

“We are targeting to sell around 200 units over the next one year. We already have orders for 50 motor graders as of now,” M&M President Automotive Sector Rajan Wadhera told PTI.

The company’s motor grader is priced at Rs 34.99 lakh and around one-third of the cost of big ones being sold by other companies, he added.

The company would introduce other products after establishing the product in the market, Wadhera said.

12:58 pm Deposit rate cut: State Bank of India (SBI), country’s largest bank, revises its one-year retail fixed deposit rates up to Rs 1 crore to 6.50 percent, down by 25 basis points (bps).

Revision in interest rates on retail domestic term deposits (below Rs 1 crore) with effect from 01.10.2017, SBI said on its website.

Senior citizens will get an interest rate of 7 percent, down from 7.25 percent.

From October 1, SBI also reduced its base rate to 8.95 percent p.a. (from 9 percent) while its MCLR or marginal cost based lending rate continued to be at 8 percent on one-year tenure loans.

12:45 pm Earnings Estimates: Earnings growth in September quarter could be spotty for domestic sectors given the impact of GST-related inventory changes, Morgan Stanley said.

Demand, according to the research house, is seeing signs of recovery.

Improved exports and stable commodity prices may result in better performance for global or globally linked businesses, it feels.

QoQ earnings are likely to be better, albeit earnings revisions breadth has remained negative, suggesting that sell-side estimates have been too high, Morgan Stanley said.

12:37 pm Europe trade: European stocks opened higher as political concerns ease slightly and investors focus on data releases.

The pan-European Stoxx 600 was 0.07 percent up with most sectors higher in early trading.

Spanish stocks opened slightly lower, after falling sharply on Monday. The government in Madrid has said that it wants to work with other parties to resolve the issue of Catalonian independence.

12:31 pm IPO: Hindustan Aeronautics (HAL) has filed for an initial public offering of shares that will see the government selling a tenth of the military aircraft maker.

The government, which fully owns HAL, is seeking to sell about 36.2 million shares in the IPO, according to a company filing with the capital markets regulator.

HAL had revenue of Rs 17,952 crore (USD 2.74 billion) and a net profit of Rs 2,625 crore for the year ended last March, the filing showed.

SBI Capital Markets and Axis Capital are managing the IPO, which was first approved by the government in 2012.

12:22 pm Management interview: TeamLease Services is on the radar after a 10 percent upmove this month and a 90 percent rally this year.

Over the next five years, we should definitely look at compounded annual growth rate (CAGR) of 20-25 percent, N Ravi Vishwanath, CFO of TeamLease Services said in an interview to CNBC-TV18.

Government has taken a lot of initiatives to convert the informal to formal to the more organised sector, that is where the opportunity lies for players like us. The growth of 22 percent should be achievable for us, he added.

Witnessed soft demand in July and August. We will have a clearer picture of how September looks, we do believe that the market should bounce back between Q3 and Q4, said Vishwanath.

It is too early for us to see the benefits of goods and services tax (GST). It is very early stages. It will take at least about three-four quarters for the benefits to start kicking-in, he further mentioned.

12:10 pm New listing update: SBI Life Insurance Company corrected a bit from its opening high but was still trading above its issue price.

The stock price was trading at Rs 722.80, up 3.25 percent over issue price of Rs 700.

12:00 pm Market Check: Equity benchmarks extended gains in noon, backed by Reliance Industries, FMCG, auto, metals, pharma stocks..

The 30-share BSE Sensex was up 250.23 points at 31,533.95 and the 50-sahre NSE Nifty gained 74.75 points at 9,863.35.

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

11:55 am Buzzing: Share price of Peninsula Land rose 11 percent intraday as the company is going to sale its property.

The company has entered into an agreement to sell, for sale of the property of the company situated at village Mamurdi, Taluka haveli, district Pune, Maharashtra.

The company is likely to receive Rs 226 crore from the sale.

The sale proceed will be completed within the period of 7 working days from the date of purchaser issuing a condition precedent satisfaction letter to the company, subject to other terms set out in the agreement to sell or within such period, as set out in the agreement and other terms stated therein.

11:45 am Order win: Lypsa Gems and Jewellery today said the company has got an order worth Rs 17.5 crore to supply diamond and diamond-studded jewellery to the UAE.

In a BSE filing, the company informed about its latest order from the Middle East.

The company has plans to launch new diamond studded jewellery collection targeting the UAE market.

11:32 am Key events to watch out for: A pickup in domestic growth and global cues are probably the two crucial factors for equity markets in Q4CY17, Morgan Stanley said.

Key news flow to watch for this quarter include GST collections and the impact on growth; earnings season; issuances; domestic mutual fund flows; global cues; and monetary policy.

“The recent spike in volatility still leaves it well below historical averages, and we expect it to remain elevated relative to recent months,” the research house said.

India has underperformed emerging markets in recent months given the weakness in growth, but Morgan Stanley expects growth to turn stronger in the months ahead.

Indeed, from an absolute perspective, the market is still dependent on global equity markets, the research house feels.

11:16 am Auto stocks in focus: Auto stocks except Maruti Suzuki traded sharply higher today, following good September sales data on festive demand.

Tata Motors share price rallied 6.7 percent intraday as its domestic passenger and commercial vehicle sales grew by 25 percent to 53,965 units while Bajaj Auto soared 3.2 percent to hit a fresh high of Rs 3,208.40 as it registered a 14 percent growth in September sales at 4.28 lakh units.

Maruti Suzuki fell over a percent on profit booking after it reported a 9.3 percent growth in September sales at 1.63 lakh units YoY, driven by compact cars (Ignis, Baleno etc) and utility vehicles (Vitara Brezza, Ertiga).

11:05 am Buzzing: Shares of MOIL gained 5.5 percent intraday on the back of revision of manganese ore and other products prices.

The company has fixed/revised prices of different grades of manganese ore and other products, effective from October 01, 2017.

The prices of various grade of manganese ore have been increased by 7.25 percent on the existing prices prevailing since July 01, 2017.

The price of electrolytic manganese dioxide (EMD) has been increased by 2.36 percent.

Meanwhile, the ferro manganese/ferro manganese slag and some identified grades of manganese ore continue to be sold on e-auction basis through MSTC.

11:00 am Market Check: Equity benchmarks remained higher in morning after nearly 3 percent fall seen in previous two weeks. The rally was driven by Reliance Industries, Tata Motors and ITC.

HDFC Bank recouped early losses to trade mildly higher.

The 30-share BSE Sensex was up 231.34 points at 31,515.06 and the 50-share NSE Nifty gained 65.10 points at 9,853.70.

About 1,481 shares advanced against 662 declining shares on the BSE.

10:55 am Weekly market outlook: Vinod Nair, Head Of Research at Geojit Financial Services said the tail winds enjoyed by domestic economy due to benign commodity prices and falling inflation has currently started to reverse.

He further said, “On the backdrop of lackluster domestic macros, likelihood of extension of GST disruption and continued impact on corporate earnings, the current domestic premium valuation will not sustain and we expect consolidation to continue in near term.”

RBI policy meet is the key event to watch out for next week and the expectation is that RBI will maintain status quo, Nair said.

10:50 am Tractor sales: Farm equipment manufacturer Escorts Agri Machinery (EAM) saw a rise of 34 percent in its tractor sales in September at 10,353 units.

The company sold 7,725 tractors in the corresponding month a year ago.

Domestic tractor sales stood at 10,144 units as against 7,664 units in September last year, up 32.4 percent, Escorts Ltd said in a BSE filing.

Exports also grew to 206 units from 61 tractor units sold in September last year.

10:45 am Jefferies on ONGC: While retaining a buy call on ONGC with a target price of Rs 200 per share, Jefferies said gradual rise in oil prices would underpin buy rating.

Gas prices should rise 10-15 percent in a year, the research house feels.

According to Jefferies, higher output may drive natural gas EBITDA by 39 percent over FY17-21.

10:40 am Change in GST slabs possible?: Finance Minister Arun Jaitley last week hinted that there is scope for lesser slabs under the Goods and Services Tax (GST) once there is revenue buoyancy.

“We have almost by the day, space and scope for improvement. We have space for improvement and need for improvement to reduce compliance burden as far as small taxpayers are concerned,” he said.

“We have space for improvement, eventually once we become revenue neutral, to think in terms of bigger reforms such as lesser slabs, but for that we have to become revenue neutral…,” he added.

Currently, GST has four slabs, with rates ranging from 0 to 28 percent.

10:33 am Manufacturing PMI: September saw a sustained expansion in the Indian manufacturing sector, supported by increases in both output and new orders. However, the rates of expansion eased slightly in both cases.

At 51.2 in September, the Nikkei India Manufacturing Purchasing Managers’ Index was unchanged from August. The reading was indicative of a modest improvement in manufacturing sector business conditions in September, and one that was below the long-run trend (54.1), Nikkei IHS Markit survey said.

10:26 am Expectations for RBI policy: Global brokerage house JP Morgan feels the RBI is likely to adopt “wait and watch” strategy due to increased macroeconomic and inflation uncertainty.

Markets are likely to focus on the tone and guidance of policy, and how RBI looks at the various moving parts, it said.

Edelweiss expects RBI to leave rates unchanged while maintaining a dovish bias. “We continue to expect another 25 basis points rate cut in FY18, although more may be warranted, it said.

10:18 am Auto sales: The country’s largest two-wheeler maker Hero MotoCorp has sold over a million units in the festive season so far, a senior company executive said.

The company has achieved the milestone with still around three weeks remaining in the current festive season.

“The customer response has been so massive that we have already crossed a million units in retail sales in the ongoing festival season, with a double-digit growth over the previous year,” the official told PTI.

10:10 am Adani’s Australia project faces risk: Adani group’s Abbot Point Coal Terminal in Australia faces the risk of becoming a stranded asset if its proposed Carmichael mine fails to get 1 billion Australian dollar (AUD) subsidy, according to a report by US- based institute IEEFA.

The Institute for Energy Economics and Financial Analysis (IEEFA), which conducts research and analyses on financial and economic issues related to energy and environment, has found that Adani’s Abbot Point Coal Terminal (AAPCT) is excessively leveraged and promises negative shareholders equity. The Abbot Point terminal, IEEFA said, also “runs the risk of becoming a stranded asset if Adani’s proposed Carmichael mine does not get the AUD 1 billion Australian taxpayer subsidy it seeks.”

The IEEFA further said the analysis finds more broadly that “Adani’s entire AUD 3.5 billion debt-funded investment in Australia is at grave risk.”

Currently operating at just over 50 percent capacity, the AAPCT needs the Carmichael mine to fill the gap created as its current take-or-pay contracts progressively expire.

10:00 am Listing: SBI Life Insurance Company has listed at Rs 735 per share on the National Stock Exchange, up 5 percent over issue price.

9:55 am DLF in focus: Singapore’s sovereign wealth fund GIC has approached fair trade regulator CCI seeking approval for its deal to acquire stakes in DLF rental arm for Rs 8,900 crore and form a joint venture with the realty firm.

GIC had in late August agreed to buy 33.34 percent stake in DLF’s rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 8,900 crore. GIC will buy shares in DCCDL from DLF promoters.

According to sources, GIC has approached the Competition Commission of India (CCI) to get approval for this deal.

The deal is expected to be approved by next month, they added.

9:50 am Pre-opening: SBI Life Insurance Company share price settled at Rs 735 in pre-opening trade, up 5 percent over issue price of Rs 700 on the National Stock Exchange.

9:45 am Market Check: Equity benchmarks came off opening high in morning trade due to selling in index heavyweights HDFC Bank and HDFC.

The 30-share BSE Sensex was up 181.76 points at 31465.48 and the 50-share NSE Nifty rose 61.50 points to 9,850.10.

The market breadth remained strong as about three shares advanced for every share falling on the BSE.

Reliance Industries gained 2 percent while Tata Motors surged 4.5 percent.

9:40 am Drug launch: Dr Reddy’s Laboratories has launched Sevelamer Carbonate tablets (generic version of Renvela) in the US market.

“This is the company’s eighth overall and fourth limited-competition launch this fiscal year,” Alok Sonig, Executive Vice President and Head of North America Generics business said.

For the last 12 months ending in July 2017, the drug had US sales of approximately USD 1.88 billion, according to IMS Health.

Sevelamer is used to lower high blood phosphorus (phosphate) levels in patients.

9:35 am SBI Life to debut: SBI Life Insurance Company, which recently completed its initial share sale offer, will make its stock market debut today.

The initial public offer (IPO) of Rs 8,400 crore was oversubscribed 3.58 times on September 20-22. The portion meant for qualified institutional buyers (QIBs) was oversubscribed 12.56 times while that of non- institutional investors received 70 per cent subscriptions and retail investors 85 per cent, data available with the NSE showed.

SBI Life is a joint venture between India’s largest lender State Bank of India (SBI) and BNP Paribas Cardif (BNPPC), the insurance holding company of France.

9:30 am Merger called off: The merger of Anil Ambani-owned telecom major Reliance Communications (RCom) with its peer Aircel has been called off and the former will hive off an alternate plan including monetising its spectrum bands and real estate assets.

In a meeting with Board of Directors, RCom reviewed the ongoing strategic transformation programme, and considered alternate plans for debt reduction.

The merger of mobile business of RCom and Aircel lapses with mutual consent Rcom and Aircel Limited (Aircel) had signed binding agreements in September 2016 for the merger of Rcom’s mobile businesses with Aircel, the company said in a filing to stock exchange.

It said, “Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction.

9:25 am Idea-Voda merger: Vodafone India and Idea Cellular merger deal is expected to be completed by March next year, as all regulatory approvals are likely to be obtained by that time, a source privy to the deal said.

“There are only two permissions left in the amalgamation scheme of the Idea and Vodafone. It should be completed by end of the current financial year,” an industry source, who did not wish to be named, told PTI.

Both the companies are before National Company Law Tribunal (NCLT) for seeking its nod after which they will need final approval from the Department of Telecom.

9:20 am Buzzing: Shares of PNC Infratech added nearly 12 percent intraday on the back of contract win worth Rs 2159 crore.

The company has declared the lowest bidder for the project of 145 km long six laning of Chakeri to Allahabad section of NH – 2 from in the state of Uttar Pradesh under NHDP Phase-V.

This is the fifth hybrid annuity project won by the company has having construction period of two and half years and operation period of 15 years, company said.

9:15 am Market Check: Equity benchmarks opened sharply higher, tracking positive global cues and strong auto sales data.

The 30-share BSE Sensex was up 301.40 points or 0.96 percent at 31,585.12 and the 50-share NSE Nifty gained 84 points or 0.86 percent at 9,872.60.

Tata Motors, Eicher Motors, Hero Motocorp, Dr Reddy’s Labs, Bank of Baroda and BPCL rallied 1-6 percent.

Nifty Midcap rallied 1 percent on strong breadth. About five shares advanced for every share falling on the NSE.

Jaiprakash Associates, Jaypee Infratech, Peninsula Land, PNC Infratech, L&T Finance, TVS Motor, VIP Industries, Havells and Manappuram Finance rallied 2-10 percent.

Reliance Communications plunged 6 percent and Tourism Finance fell nearly 3 percent.
Asia markets were mostly higher post US equities closing at record highs overnight.