Closing bell: Sensex falls 113 pts, Nifty Bank loses 141 pts after RBI sounds hawkish

3:30 pm Market Closing: Benchmark indices fell for 7th consecutive session on Wednesday, dragged by banks after RBI sounded hawkish while keeping repo rate unchanged.

The 30-share BSE Sensex was down 113.23 points at 34,082.71 and the 50-share NSE Nifty fell 21.60 points to 10,476.70.

About 1,968 shares advanced against 793 declining shares on the BSE.

Nifty Bank index ended with 141 points loss after RBI policy.

HPCL, Aurobindo Pharma, Coal India and ONGC were gainers.

3:25 pm Buy calls in falling market: Mitesh Thakkar of miteshthacker.com

advises buying Ashok Leyalnd with a stoploss at Rs 128 and target of Rs 140 and Bharat Electronics with a stoploss at Rs 156.5 and target price at Rs 162-164.

Prakash Gaba of prakashgaba.com Prakash Gaba advises buying Apollo Tyres with a target price at Rs 270 and stoploss of Rs 250 and Tata Global with a target price at Rs 300 and stoploss at Rs 270.

3:20 pm Market Expert: Manish Gunwani, CIO – Equity Investments, Reliance MF said this is a short term reaction, market themselves in a corrective mode after strong run in last year.

We want to see economic growth, credit growth and bad asset resolution, he said, adding policy and Budget are small triggers.

He further said rotation of funds continued in mid and smallcap stocks. Flows seem to be okay, he added.

3:17 pm Market Update: Benchmark indices declined amid volatility in late trade, especially after the RBI policy, as banks slipped further.

3:15 pm Rupee Update: The Indian rupee was trading at 64.15 against the US dollar, up 10 paise compared to 64.25 in previous session.

3:12 pm RBI on Liquidity: “The liquidity in the system continues to be in surplus mode, but it is moving steadily towards neutrality,” RBI said.

On some days in December and January, the system turned into deficit due to slow down in government spending and large tax collections, which necessitated injection of liquidity by the Reserve Bank.

During the two weeks beginning December 16, 2017, the Reserve Bank injected average daily net liquidity of Rs 38,800 crore into the system.

For December as a whole, however, the Reserve Bank absorbed Rs 31,600 crore (on a net daily average basis). As the system turned into

deficit again in the fourth week of January, the Reserve Bank injected average net liquidity of Rs 14,500 crore. For January, on the whole, the Reserve Bank absorbed Rs 35,300 crore (on a net daily average basis).

3:10 pm FDI flows and Deficit: Even though the current account deficit narrowed sharply in Q2 of 2017-18 on a sequential basis, it was higher than its level a year ago, mainly due to widening of the trade deficit, the RBI said.

While net foreign direct investment (FDI) inflows moderated in April-October 2017 from their level a year ago, net foreign portfolio investment (FPI) inflows were buoyant in 2017-18 (up to February 1). India’s foreign exchange reserves were at USD 421.9 billion on February 2, 2018, it added.

3:05 pm Inflation Forecast:

3:01 pm RBI on Inflation: The MPC noted that the inflation outlook is clouded by several uncertainties on the upside.

“The staggered impact of HRA increases by various state governments; pick-up in global growth which may exert further pressure on crude oil and commodity prices; and revised guidelines for arriving at the minimum support prices (MSPs) for kharif crops, increase in customs duty on a number of items and fiscal slippage indicated in the Union Budget,” it reasoned.

There is, therefore, need for vigilance around the evolving inflation scenario in the coming months, it said.

RBI further said there are also mitigating factors. “First, capacity utilisation remains subdued. Second, oil prices have moved both ways in the recent period and can potentially soften from current levels based on production response. Third, rural real wage growth is moderate.”

2:59 pm Earnings: Eicher Motors’ Q3 earnings were largely in line with estimates.

Consolidated net profit growth of 24.5 percent year-on-year at Rs 520.5 crore was ahead of CNBC-TV18 poll of Rs 515.4 crore.

Revenue from operations grew by 23.7 percent to Rs 2,269 crore in Q3 compared to Rs 1,835 crore in year-ago.

Operating profit growth of 22.6 percent year-on-year at Rs 707.2 crore was in line with estimates of Rs 706.8 crore but margin contraction of 20 basis points at 31.2 percent missed expectations of 31.7 percent.

2:55 pm Market Reaction:

2:51 pm RBI on Economic Growth: “The MPC noted that the economy is on a recovery path, including early signs of a revival of investment activity. Global demand is improving, which should help strengthen domestic investment activity,” RBI said its statement.

It further said the focus of the Union Budget on the rural and infrastructure sectors is also a welcome development as it would support rural incomes and investment, and in turn provide a further push to aggregate demand and economic activity. On the downside, the deterioration in public finances risks crowding out of private financing and investment.

“The Committee is of the view that the nascent recovery needs to be carefully nurtured and growth put on a sustainably higher path through conducive and stable macro-financial management,” RBI said.

2:48 pm Minutes and Next Policy Date: The minutes of the MPC’s meeting will be published by February 21, 2018.

The next meeting of the MPC is scheduled on April 4 and 5, 2018.

2:46 pm Banks stocks performance:

2:43 pm Market Update: Benchmark indices remained flat, which suggested that the Monetary Policy Committee outcome seems already priced in.

The 30-share BSE Sensex was down 41.61 points at 34,154.33 and the 50-share NSE Nifty fell 3.90 points to 10,494.40.

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

2:41 pm GVA Growth: RBI said GVA growth for 2018-19 is projected at 7.2 percent overall – in the range of 7.3-7.4 percent in first half of FY18 and 7.1-7.2 percent in second half of FY18 – with risks evenly balanced.

2:39 pm Inflation Outlook: RBI feels the inflation outlook beyond the current year is likely to be shaped by several factors. “First, international crude oil prices have firmed up sharply since August 2017, driven by both demand and supply side factors. Second, non-oil industrial raw material prices have also witnessed a global uptick,” it detailed.

2:37 pm RBI said it sees October 2018-March 2019 GVA growth at 7.1-7.2 percent.

Base rate loan pricing to be linked to marginal cost of funds based lending rate (MCLR) from April 1, 2018, it added.

2:36 pm Monetary Policy Committee’s five members voted in favour of status quo policy.

“Chetan Ghate, Pami Dua, Ravindra H Dholakia, Viral V Acharya and

Urjit R. Patel voted in favour of the monetary policy decision. Michael Debabrata Patra voted for an increase in the policy rate of 25 basis points,” RBI said.

2:35 pm RBI revised its FY18 GVA forecast downwards to 6.6 percent from 6.7 percent earlier.

2:34 pm Inflation forecast: RBI sees CPI inflation for April-September period of 2018 at 5.1 -5.6 percent.

2:30 pm MPC decision: At its bi-monthly monetary policy statement, the Reserve Bank of India (RBI) left the benchmark repurchase rate unchanged at 6 percent, reverse-repo rate at 5.75 percent and cash reserve ratio at 4 percent.

2:28 pm Earnings: Voltas’ Q3 profit grew by 23.1 percent year-on-year to Rs 100.4 crore and revenue increased 16.5 percent to Rs 1,375 crore.

Operating profit increased 43 percent to Rs 118.6 crore and margin expanded by 150 basis points in Q3 YoY.

2:15 pm Market Update: Benchmark indices turned more volatile in afternoon ahead of outcome of the Monetary Policy Meeting outcome due shortly.

The 30-share BSE Sensex was down 40.61 points at 34,155.33 and the 50-share NSE Nifty fell 4.80 points to 10,493.50.

About 1,963 shares advanced against 660 declining shares on the BSE.

2:05 pm Earnings Performance: Pharma firm Cipla has reported a 4.8 percent growth year-on-year in profit at Rs 403.5 crore in Q3FY18 was slightly lower with CNBC-TV18 poll of Rs Rs 425.5 crore.

The growth was largely supported by better-than-expected operational performance and tax reversal. Profit in year-ago quarter stood at Rs 384.91 crore.

Revenue from operations during the quarter grew by 7.3 percent to Rs 3,913.8  crore compared to Rs 3,647.2 crore in same quarter last year, the company said. It was estimated at Rs 4,099.4 crore for the quarter.

Operating profit at Rs 818.7 crore and margin at 20.9 percent were ahead of estimates of Rs 791 crore and 19.3 percent, respectively.

1:55 pm PM Modi on NPA issue: While addressing Lok Sabha, Prime Minister Narendra Modi said the UPA government was 100 percent responsible for NPA issue.

NDA government has not lent a single penny that has turned into an NPA and there were 82 percent NPAs when we took over in 2014, he added.

1:45 pm Earnings: Fiberweb India shares rallied 15 percent as profit in Q3 more than doubled to Rs 10.3 crore from Rs 4 crore and revenue grew more than three-fold to Rs 81.8 crore from Rs 26.5 crore YoY.

1:32 pm Idea suspends interconnect services: Idea Cellular said today that it

has suspended interconnect services with Aircel for non-payment of dues “despite several reminders”.

Idea said it will restore interconnect services immediately after Aircel makes the payment, but did not specify the outstanding amount.

“Idea Cellular has suspended interconnect services with Aircel Ltd, due to non-payment of dues,” Idea said in a statement.

It further said that despite multiple reminders since November 2017, the operator had failed to meet its payment commitments forcing Idea to suspend interconnect services, as per the terms of interconnect agreement.

1:28 pm Buzzing: SpiceJet spiked 6 percent after strong set of earnings in Q3.

Consolidated profit during October-December quarter grew by 32.5 percent to Rs 239.4 crore compared to Rs 180.7 crore in previous year.

Revenue from operations surged 26.7 percent to Rs 2,080.4 crore for quarter ended December 2017, compared to Rs 1,642.4 crore in year-ago.

On operational front, consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 73 percent year-on-year to Rs 302.1 crore and margin expanded by 390 basis points to 14.5 percent in December quarter 2017.

1:22 pm Earnings: Ipca Labs shares gained 5 percent after reporting strong growth in earnings.

Profit in Q3 jumped to Rs 105.6 crore from Rs 41.4 crore in year-ago and revenue increased 14.5 percent to Rs 859.2 crore from Rs 750.2 crore YoY.

Operating profit in Q3 shot up 52.2 percent to Rs 161.2 crore and margin expanded 470 basis points to 18.8 percent YoY.

1:12 pm Buzzing: Dredging Corporation shares rallied more than 4 percent after CNBC-TV18 reports quoting Cogencis that the government has shortlisted 3 consultants to  advise on divestment in the company.

1:04 pm Auto Sales Target: Suzuki Motorcycle India (SMIPL), the wholly-owned two-wheeler arm of Suzuki Motor Corp, is aiming to achieve one million units annual sales by 2020.

Suzuki Motor Corp, which is witnessing fastest growth globally in the segment here, would continue to invest and strengthen its product portfolio in the Indian market.

SMIPL is witnessing a year-on-year growth of 40 percent in the Indian market and would strengthen its portfolio in scooter and 150 CC motorcycle segments every year.

“We now have growth drivers to help us achieve our target of clocking one million sales by 2020,” said SMIPL Managing Director Satoshi Uchida.

Here are the top headlines at 1 pm from Moneycontrol News’ Sakshi Batra

12:54 pm Banks Stocks Mixed:

12:46 pm Earnings: Private sector City Union Bank has recorded a 22.2 percent rise in its third quarter net profits ending December 31, 2017 at Rs 154.79 crore.

The Tamil Nadu-based bank had recorded net profits at Rs 126.62 crore during corresponding period of previous year.

Total income of the bank for the October-December 31, 2017 period rose to Rs 987.04 crore from Rs 953.80 crore registered during corresponding period of last year.

12:40 pm Market Update: Benchmark indices traded flat, as investors await the outcome of Monetary Policy Committee meeting due later today.

Rate sensitive like banks were under pressure, with the PNB, HDFC Bank and Yes Bank losing over a percent.

12:35 pm Poll: Healthcare company Aurobindo Pharma is expected to report a 18 percent growth year-on-year in third quarter profit at Rs 682 crore compared to Rs 578.6 crore in year-ago.

Revenue growth and steady margins may lead to YoY profit growth.

Revenue from operations in Q3 may increase 11 percent to Rs 4,328.4 crore from Rs 3,906.2 crore in corresponding quarter of last fiscal, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is seen rising 13 percent year-on-year to Rs 1,009 crore and margin may expand 30 basis points to 23.3 percent YoY.

Its US business, which contributed 47 percent to total revenue, is expected to grow 10-12 percent YoY in rupee terms led by sales from kidney drug Renvela generic and ramp up in injectable segment.

12:26 pm Buzzing: Jayshree Tea share price was locked at 5 percent upper circuit after strong set of earnings.

Profit in Q3 shot up multi-fold to Rs 16.5 crore compared to Rs 0.8 crore in year-ago and revenue increased 18.6 percent to Rs 202.3 crore YoY.

Operating profit more than doubled to Rs 23.4 crore from Rs 10.6 crore and margin expanded sharply to 11.6 percent from 6.2 percent YoY.

12:10 pm Earnings: NELCO said Q3 net profit grew by 49.8 percent year-on-year to Rs 3.4 crore and revenue increased 2.1 percent to Rs 37.2 crore.

Operating profit jumped 58.2 percent to Rs 7.2 crore and margin expanded by 680 basis points to 19.3 percent compared to year-ago.

12:04 pm Poll: Royal Enfield maker Eicher Motors’ third quarter consolidated profit is seen rising 23 percent year-on-year to Rs 515.4 crore and revenue may increase 20 percent to Rs 2,219 crore.

Analysts expect Royal Enfield to post decent performance in Q3 and commercial vehicles business may be strong.

Operating profit is expected to increase 22 percent to Rs 706.8 crore and margin may expand 30 basis points compared to year-ago, according to average of estimates of analysts polled by CNBC-TV18.

Here are the top headlines at 12 pm from Moneycontrol News’ Anchal Pathak

11:56 am RBI Policy Expectations: LKP Securities said the RBI is widely expected to keep its key rate on hold, but toughen its rhetoric as inflation has accelerated sharply.

11:40 am Buzzing: PI Industries gained nearly 2 percent post earnings.

Edelweiss said it has maintained Buy rating on the stock with increased target price at Rs 1,000 (from Rs 944 earlier).

PI Industries’ Q3FY18 revenue, at Rs 540 crore, rose 10 percent YoY (7 percent below estimate) driven by 14 percent YoY surge in CSM. However, domestic segment’s growth at 3 percent belied estimate. EBITDA margin also contracted around 170bps YoY due to adverse product mix in the domestic segment and higher raw material costs.

Factoring in the domestic segment’s muted performance, Edelweiss revised down FY18 and FY19 EPS 7 percent each. “As we roll forward to FY20, we estimate 15% revenue growth riding spurt in CSM driven by global agrochemicals turnaround and new product launches driving growth in domestic segment,” Edelweiss said.

11:30 am Market Update: The 30-share BSE Sensex wiped out all early gains, trading down 15.58 points at 34,180.36, dragged by banking & financials and IT stocks.

The 50-share NSE Nifty rose 3.70 points to 10,502 while the Nifty Midcap came off day’s high, rising 0.7 percent.

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

11:20 am Auto Sales: Tata Motors-owned Jaguar Land Rover (JLR) today reported a 3 per cent increase in global sales at 49,066 units in January. Sales of Jaguar brand of vehicles in January were at 14,066 units, a growth of 1 per cent, the company said in a statement.

Land Rover range posted sales of 35,000 units in the month, an increase of 4 percent, it added.

Jaguar Land Rover Group Sales Operations Director Andy Goss said, the continued demand in China is encouraging, however “we are still facing challenges because of tough trading conditions in our key UK and Europe markets”.

The company said challenging market conditions led to fall in sales in the UK by 4 percent and in Europe by 9 percent.

However, overseas markets such as Mexico, India and Brazil, saw more positive results, with sales up by 9 percent to 6,551 units, it added.

11:04 am Rate Sensitive: Banks came off their highs in late morning deals, especially ahead of the outcome of Monetary Policy Committee meeting due later today.

Punjab National Bank, HDFC Bank, Bank of Baroda, Yes Bank and Canara Bank were under pressure while Axis Bank, Kotak Mahindra Bank, ICICI Bank, IndusInd Bank and SBI were off day’s high.

Here are the top headlines at 11 am from Moneycontrol News’ Sakshi Batra

10:53 am Market Update: Benchmark indices continued to be volatile after wiping out some early gains, as investors await the outcome of Monetary Policy Committee meeting due later today.

The 30-share BSE Sensex was up 62.08 points at 34,258.02 and the 50-share NSE Nifty gained 31.20 points at 10,529.50.

Midcaps remained strong, with the Nifty Midcap rising over a percent on strong breadth. About five shares advances for every share falling.

After two days of deliberations, the Reserve Bank of India’s six-member monetary policy committee is scheduled to announce its policy decision later today. What are the expectations from the last bi-monthly policy review of FY18? Sakshi Batra finds out in conversation with Gaurav Choudhury, Economy Editor, Moneycontrol.

10:36 am Market Outlook: Volatility has returned and money is moving from one asset class to another are some of the highlights of the massive fall which we witnessed in the last one week, Andrew Holland, CEO, Avendus Capital Alternate Strategies said in an interview with CNBC-TV18.

But, there is one thing which stood out. If we look at the history, whenever market has fallen in a big way most of the asset classes have also witnessed the impact.

However, the interesting thing about the fall is that none of the asset classes reacted. Whenever markets slip, we usually see a flight to safety to other assets classes such as gold or bonds, said Holland.

The bond yields didn’t fall that much, the gold price fell etc. This is unusual to happen considering the turmoil seen in the markets. The volatility is likely to remain in markets, but the risk across asset classes is reflected in markets.

10:25 am Top Gainers:

10:15 am Buzzing: Shares of Mcnally Bharat Engineering rose 4 percent on bagging order worth Rs 68.3 crore.

The company received work of design & engineering, supply of equipment, civil & structural work, of debottlenecking and capacity expansion of existing lead zinc ore of benefication plant at Hindustan Zinc’s Zawar mine, Rajasthan, India for a value of Rs 65 crore.

The other order include, supply of spares for benefication plant at Zawar mine of Hindustan, Rajasthan, India for a value of Rs 3.3 crore.

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

10:07 am Rupee Trade: The rupee strengthened by 6 paise to 64.18 against the dollar at the interbank forex market today on fresh selling of the American currency by exporters and banks ahead of the announcement of RBI’s monetary policy.

Dealers said dollar’s weakness against other currencies overseas and early gains in domestic equity markets supported the rupee.

Yesterday, the rupee had tumbled 17 paise to end at a fresh seven-week low of 64.24 against the US dollar.

According to the provisional exchange data, foreign investors sold shares worth Rs 2,326.10 crore on net basis yesterday.

9:58 am Losers: HDFC, HDFC Bank, TCS, HUL, HCL Technologies, Bajaj Finance, NTPC and Lupin were under pressure.

9:56 am Buzzing: Shares of KEC International added 7 percent on orders win worth Rs 2,035 crore across its businesses.

The company’s railways business secured three composite orders aggregating to Rs 1,769 crore for tripling of railway lines, including laying of tracks, civil engineering, electrification, signalling and telecommunication works, in North and East India.

The T&D business has secured an order of Rs 161 crore for turnkey construction of 132 kV and 220 kV Transmission Lines in West Bengal.

ITs civil Business has secured an order of Rs 30 crore for the construction of residential buildings and workshop for a Metals &Mining company.

The cables business has received orders of Rs 63 crore for various types of cables and solar business has received orders of Rs 12 crore for the construction of rooftop and ground-mount PV Systems.

9:42 am Prabhudas Lilladher on Hero: Hero MotoCorp’s Q3FY18 performance was on expected lines, with operating margins at 15.9 percent, lower 110bps YoY and 150bps QoQ, but in-line with expectations of 16 percent.

Management commentary has indicated that going ahead, with several new launches planned over the next few quarters, particularly in the premium (200cc) motorcycle and scooter (125cc) segments, the company should be able to fill the gap in its product portfolio and garner market share in the premium as well as scooter segment. The benefits of the rural recovery are likely to be further visible going ahead for HMCL.

With sustained recovery in rural demand, entry in the premium segments and increase in overall market share, the medium term outlook for HMCL looks promising. However, rising input costs adding to the impact of the Haridwar plant benefits expiring this fiscal, management has guided for margins being lower than current levels in FY19E.

The research house has cut FY19 margin estimates by 60bps to factor in the same. It maintained Accumulate rating with a price target of Rs 4,104.

9:32 am Market Check: Benchmark indices came off their opening highs, with the Sensex rising 181.40 points to 34,377.34 ahead of Monetary Policy Committee meet outcome due later today.

The Nifty was still trading above 10,500, rising 63.10 points or 0.60 percent to 10,561.40.

Market breadth continued to be strong as about eight shares advanced for every share falling on the BSE. Nifty Midcap index rallied 1.6 percent.

All sectoral indices traded in the green but HDFC twins remained under pressure, falling more than half a percent.

9:28 am Earnings Reaction: Direct-to-home operator DishTV gained nearly 4 percent despite the company reported a consolidated net loss of Rs 18.55 crore for the third quarter ended December 2017.

The company had posted a net profit of Rs 19.79 crore in the October-December quarter a year ago, Dish TV said in a BSE filing.

Total income from operations came down to Rs 756.57 crore during the quarter under review as against Rs 763.24 crore a year earlier.

9:20 am RBI Policy Expectations: In the last six odd months, the macro backdrop has changed due to the evolving global and domestic developments.

Edelweiss said the Monetary Policy Committee (MPC) board would take the following factors into calibration while setting its  policy stance & tone – rising crude oil prices, changing drivers of inflation, wider trade deficit in conjunction with a push back in the 3.0 percent fiscal deficit target by 2-year to FY21, increasing MSP to 1.5x of the cost of production and rising US yields.

“The current macro setting, higher inflation risks & increase in inflation expectations and a narrower output gap in FY19, would put the MPC on a cautious footing. While panel members are likely to have dissenting views and could recommend for monetary committee to be on a front-footing already, we anticipate that the MPC members will vote for a status-quo on rates with a neutral stance,” it added.

According to the research house, the interesting developments to watch for would be the MPC’s commentary on the Budget proposal of MSP price rise and the longevity of its impact on inflation and its inflation goalpost for FY19. In its view, the FY19 inflation goalpost is likely to be set higher than its medium-term target of 4.0 percent for Mar’19. Thus, higher inflation in conjunction with higher GVA growth in FY19, would call for neutral stance and with the upside risks to inflation, the commentary could be mildly hawkish.

9:15 am Market Check: Benchmark indices rebounded sharply on Wednesday after witnessing losses in previous six consecutive sessions when the Sensex shed more than 2,000 points, tracking global recovery.

The 30-share BSE Sensex was up 367.36 points or 1.07 percent at 34,563.30 and the 50-share NSE Nifty gained 97.70 points or 0.93 percent at 10,596.

SBI, Adani Ports, Dr Reddy’s Labs and Aurobindo Pharma were early gainers while NTPC, HDFC Bank and Lupin were under pressure.

Nifty Midcap index was up 1.6 percent as about nine shares advanced for every share falling on the BSE.

KEC International, Tata Chemicals, REC, Dish TV, Jaypee Infratech and Thermax gained 1-5 percent while Vakrangee remained in lower circuit, down 5 percent.

Wall Street stocks finished with solid gains on Tuesday after a rollercoaster session, winning back a good portion of the losses from the prior session’s rout.

After a swing of about 1,200 points during the session, the Dow Jones Industrial Average finished with a gain of almost 570 points, or 2.3 percent, at 24,912.77, near its session peak. Even with the rebound, the Dow has fallen 6.4 percent since the record set January 26.