Market Live: Sensex, Nifty extend losses; banks, FMCG, IT stocks drag

2:01 pm United Spirits in focus: Global brokerage house Deutsche Bank has reiterated its Buy rating on United Spirits as premiumisation thesis played out and company gained from operational reorganisation.

The research firm raised target price for the stock to Rs 3,500 from Rs 3,275 per share.

According to Deutsche, price hikes in South India could potentially boost sentiment. The research firm does not expect any major volume backlash due to price hikes.

It expects price hikes in South India to drive industry revenue growth.

Regulatory risk w.r.t increased taxes on liquor is a key downside risk, Deutsche said.

1:47 pm Market Update: Sell-off continues in the market in afternoon. The Sensex is trading more than 150 points lower and Nifty continued to struggle below 10,300 on rising crude oil prices.

Private banks, Auto, FMCG and IT stocks were under pressure while select PSU banks, metals and pharma stocks gained.

The 30-share BSE Sensex was down 163.72 points at 33,292.07 and the 50-share NSE Nifty fell 55.80 points to 10,266.50.

About three shares declined for every two shares rising on the BSE.

1:31 pm Nandan Denim in focus: Nandan Denim posted steady Q2FY18 numbers with revenue jumping as capex kicks in though margins take a hit on the back of rising raw material prices.

In an interview to CNBC-TV18, Ashok Bothra, CFO of Nandan Denim said compared to other industry players, our result seems to be better-off despite facing headwinds like demonetisation and goods and services tax (GST).

He further said that post Diwali there was an impact on demand.

On margin front, he said it will be better-off than the existing margins.

1:20 pm Management Interview: “We will do better volumes in second half of FY18 due to medium density fiberboard (MDF) plant, Keshav Bhajanka, ED of Century Plyboards said in an interview to CNBC-TV18..

MDF capacity of the company is the largest in India at the moment and we are expecting to ramp up the capacity to close to more than 70 percent utilisation, he added.

In laminates, we have been doing a good growth in the first half, in second half our growth keeps on improving. Overall MDF should add about Rs 140-150 crore to our topline. We can look at more than 15 percent growth for FY18 and going forward it is going to increase, said Bhajanka.

1:10 pm Stake Sale: State-owned lender IDBI Bank today said it will sell 30 percent stake in NSDL e-Governance Infrastructure Ltd (NEGIL).

This is a part of exercise to exit from non-core business.

The “board of directors of IDBI Bank… have by way of circular resolution approved sale of 1,20,00,000 equity shares of NSDL e-Governance Infrastructure Ltd (NEGIL) constituting 30 per cent stake held by the bank”, it said in a filing to stock exchanges.

Last month, IDBI Bank’s board also approved sale of 1.5 per cent stake in the leading bourse National Stock Exchange (NSE).

The bank had sold 9 lakh equity shares constituting 2 per cent of the paid-up capital of the NSE to LIC on March 30, 2016.

12:57 pm Buzzing: Research firm Edelweiss has initiated coverage with a Buy rating on Asian Granito India and set a target price of Rs 720 per share, implying a 41.55 percent potential upside from Monday’s closing price. The stock gained 3 percent intraday.

“The company is well placed to leverage its vast distribution network and strong brand equity,” the research house said.
Asian Granito is prudently shifting focus to high-margin retail segment, it added.

12:45 pm Economic Growth: India’s economy is likely to expand by 7.2 per cent in 2018 and go up further to 7.4 per cent in the following year on the back of strong private consumption, public investment and the ongoing structural reforms, a United Nations (UN) report said.

Overall, economic outlook for South Asia is seen largely favourable and steady for the short term, notwithstanding significant medium-term challenges, said the ‘World Economic Situation and Prospects 2018′ report unveiled by United Nations Department of Economic and Social Affairs (UN DESA).

“The economic outlook remains steady and largely favourable in South Asia, driven by robust private consumption and sound macroeconomic policies.

12:35 pm Buzzing Stock: Century Plyboards is buzzing in trade after Edelweiss initiates coverage on the stock. In an interview with CNBC-TV18, Keshav Bhajanka, ED of the company discussed this and more.

Will do better volumes in H2 due to medium density fiberboard (MDF) plant, he said.

MDF capacity of the company is the largest in India at the moment and we are expecting to ramp up the capacity to close to more than 70 percent utilisation, he added.

12:10 pm Buzzing Stock: Alembic Pharmaceuticals shares gained 3 percent intraday Tuesday on receiving approval from the US health regulator for drug that treats overactive bladder.

The pharma company has received approval from the US Food and Drug Administration for its abbreviated new drug application (ANDA) Darifenacin extended-release tablets, 7.5 mg and 15 mg.

The drug is therapeutically equivalent to Enablex of Allergan Pharmaceuticals.
This drug is used for treatment of overactive bladder with symptoms of urge urinary incontinence, urgency and frequency.

11:45 am OMCs and aviation stocks: Oil marketing and aviation companies’ share prices fell 2-3 percent on Tuesday following sharp rise in crude oil prices in international market.

HPCL, BPCL and IOC declined 2-3 percent while Jet Airways, SpiceJet and InterGlobe Aviation (IndiGo) were down 2 percent each.

Oil retailers are allowed to make changes in petrol and diesel prices on daily basis, tracking international crude oil prices but it won’t be possible for them to increase it sharply when oil prices, like today, are trading at highest level since 2015.

As the state elections lined up before general elections 2019, it is difficult for the government also to allow oil marketing companies hike petrol and diesel prices sharply. So these PSU companies have to bear that burden and that is why stocks are correcting.

11:30 am Shale reserves: Private players may be able to explore their shale reserves soon as the government plans to alter the definition of petroleum to include shale, reports The Economic Times.

The move will help companies like Essar, Reliance Industries and Vedanta to explore and exploit their shale reserves.

At present, only government-owned Oil & Natural Gas Corporation (ONGC) and Oil India are allowed to exploit shale reserves after

11:15 am Crude impact: Oil marketing and aviation companies’ share prices fell 2-3 percent on Tuesday following sharp rise in crude oil prices in international market.

HPCL, BPCL and IOC declined 2-3 percent while Jet Airways, SpiceJet and InterGlobe Aviation (IndiGo) were down 2 percent each.

Oil retailers are allowed to make changes in petrol and diesel prices on daily basis, tracking international crude oil prices but it won’t possible for them to increase it sharply when oil prices, like today, are trading at highest level since 2015.

11:00 am Market Check: Equity benchmarks remained under pressure on profit booking after rallying 850 points in previous three consecutive sessions. Investors await Federal Reserve policy meeting that will start tonight and the second phase of Gujarat assembly elections on Thursday.

The 30-share BSE Sensex was down 122.85 points at 33,332.94 and the 50-share NSE Nifty fell 48.70 points to 10,273.60.

HPCL, BPCL and IOC declined 2-3 percent after crude oil prices crossed USD 65 a barrel level.

10:40 am USFDA approval: Alembic Pharmaceuticals has received approval from the US Food and Drug Administration for its abbreviated new drug application (ANDA) Darifenacin extended-release tablets, 7.5 mg and 15 mg.

The drug is therapeutically equivalent to Enablex of Allergan Pharmaceuticals.

This drug is used for treatment of overactive bladder with symptoms of urge urinary incontinence, urgency and frequency.

10:30 am Market Check: Frontline indices continued to trade lower, with the Sensex down over 100 points, while the Nifty was firmly below 10,300-mark.

The Sensex is down 112.54 points or 0.34% at 33343.25, and the Nifty down 46.10 points or 0.45% at 10276.20. The market breadth is negative as 987 shares have advanced, 1174 shares declined, and 104 shares are unchanged.

10:10 am Health in Union Budget: With eye on Universal Health Coverage, the Centre will increase its healthcare expenditure from the current 1.15 percent to 2.5 percent of the gross domestic product (GDP) by 2025.

According to a Mint report, the announcement was made by Union Health Minister JP Nadda.

Close to 150,000 sub-health centres will be converted to health and wellness centres for providing more improved, comprehensive health care.

Here are the top headlines at 10 am from Moneycontrol News’ Anchal Pathak

9:48 am Buzzing Stock: Dr Reddy’s Laboratories shares rallied as much as 6 percent in morning Tuesday on getting clearance to Bachupally plant.

The pharma major informed exchanges that it has received an establishment inspection report from the US Food and Drug Administration on Monday after closure of audit of Bachupally unit, Hyderabad.

In April, the USFDA conducted an audit of this formulation manufacturing plant 3 and issued a form 483 with 11 observations.

9:31 am Rupee opening and outlook: The Indian rupee opened lower by 5 paise at 64.41 per dollar on Tuesday versus previous close 64.36.

Bhaskar Panda of HDFC Bank said, “The focus is now on FOMC decision on upcoming interest rate hike in US. However, USD-INR has got wing from the probable outcome on elections.”

“Given this background, expect USD-INR to trade within a range of 64.30-64.50 for today.”

9:15 am Market Opens: Equity benchmarks began the day on a flattish note with a hint of negative bias. Soon after the opening, indices moved in the red zone, with the Nifty giving up 10,300.

The Sensex was down 67.71 points at 33388.08, while the Nifty was down 26.60 points at 10295.70. The market breadth was narrow as 611 shares advanced against a decline of 577 shares, while 43 shares are unchanged.

Among sectors, banks have taken a hit, while midcaps are in tandem with benchmarks.

Dr Reddy’s Labs, ONGC, and GAIL were the top gainers on both indices, while Asian Paints, Coal India and HPCL lost the most.

On the global front, Asian shares were trying to string together a fourth session of gains on Tuesday as optimism about global growth looked set to outlast an almost certain hike in US borrowing costs this week.

The latest upbeat news came from China where banks doled out a surprisingly generous dose of credit in November, which could bode well for a pick up in retail sales and industrial output due later in the week.

US stocks closed higher on Monday as investors prepared for an expected Federal Reserve rate hike later in the week, while stocks rose around the world on continued solid global economic growth indicators.
The Dow Jones Industrial Average and the S&P 500 opened flat after news of an explosion in New York’s busy Port Authority commuter hub which New York Mayor Bill de Blasio described as an “attempted terrorist attack.”