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Monday 8 December 2014

Sensex, Nifty fall 1%; ITC, ONGC, Sun Pharma outperform

03:00pm ONGC in News

The Sensex fell 325.43 points or 1.14 percent to 28132.67 and the Nifty dropped 96.35 points or 1.13 percent to 8441.95. About 1052 shares have advanced, 1815 shares declined, and 119 shares are unchanged.

In a big boost to ONGC, the Oil Ministry is reworking the fuel subsidy sharing formula to cut its payout by a quarter through adjustment of statutory oil cess against its share.

According to a new subsidy sharing formula, the payout of upstream oil producers like ONGC is to be reduced to the extent of Rs 4,500 per tonne oil development cess they pay to the government, sources privy to the development said.

The move to lessen the subsidy burden will give a flip to government's plan to sell 5 percent stake in Oil and Natural Gas Corp (ONGC) to garner about Rs 17,000 crore.

The cess in current fiscal will total Rs 10,500 crore and after accounting for Rs 31,926 crore that upstream firms ONGC and Oil India (OIL) have already paid in fuel subsidy in first half, their payout in remainder of the current fiscal will be no more than Rs 8,000 crore, reports PTI.

02:45pm CAD to be announced today

Current account deficit for Q2FY15 will be announced later in the day today. According to the estimates of economists polled by CNBC-TV18, CAD could widen to around USD 10 billion in Q2 compared to USD 7.8 billion in previous quarter.

This is assuming widening of the trade deficit sequentially to USD 37.3 bilion in Q2FY15 from USD 33.1 billion, along with accounting for trade surplus in services at USD 17.8 billion and assuming remittances and investment came in unchanged Q-o-Q. 

02:30pm Sesa Sterlite under pressure

Brokerage house Bank of America Merrill Lynch has cut its earnings estimates for metal and mining major Sesa Sterlite, and also the price target, citing falling crude and iron ore prices.

The brokerage has lowered earnings estimates for FY15-FY16 by 10-33 percent, and price target to Rs 268 from Rs 283 earlier.

“Sesa Sterlite offers leverage to our positive zinc and aluminium view. It should also gain from stronger zinc volume sequentially in second half (vs. first half) and the ramp-up of unproductive power and aluminium assets,” said the BofA note to clients.

“However, the weaker Cairn earnings outlook and coal cost pressure will dampen group profits, in our view. if oil stays at USD70/bbl, we estimate that there could be a further 11 percent downside to our FY16E EBITDA and 28 percent downside to our FY16e EPS (for Cairn),” the report said.

02:00pm Market Check

The market remained under pressure with the Sensex falling 281.74 points or 0.99 percent to 28176.36 and the Nifty losing 90.45 points or 1.06 percent to 8447.85, dragged by banks, technology, auto, metals and capital goods stocks.

The BSE Midcap and Smallcap indices fell nearly 0.9 percent. The market breadth was negative with the 1750 shares declining for 1075 shares advancing on the Bombay Stock Exchange.

Infosys slipped nearly 5 percent as 3.3 crore shares were traded in multiple blocks this morning in the price range of Rs 1,988 to Rs 2014. Reports indicated that the founders offloaded stake worth USD 1.1 billion in the company for personal, philanthropic reasons.

Shares of TCS, ICICI Bank, HDFC Bank, Larsen & Toubro, Mahindra & Mahindra, State Bank of India, Sesa Sterlite, Dr Reddy's Labs, Wipro, Tata Steel, Hindalco Industries and BHEL were down 1-3 percent. However, ITC, ONGC, Sun Pharma and Coal India bucked the trend, up 1-2 percent. More information please visit this site www.bigprofitbuzz.com

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