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Monday 5 January 2015

Sensex, Nifty end down; Bharti falls 3%, IT stocks drag

03:30 pm Market close: The market has ended at lower level. The Sensex was down 45.58 points at 27842.32, and the Nifty slipped 17.05 points at 8378.40. About 1587 shares have advanced, 1394 shares declined, and 577 shares were unchanged.

Maruti was the biggest gainer, up 3 percent. Other major gainers were Tata Motors, L&T, Tata Steel and ONGC. Among the losers were Bahrti Airtel, Dr Reddy's Labs, Hindalco, HDFC and Coal India.

03:15 pm Sugar output

The country's sugar production increased by 27.3 per cent to 7.46 million tonnes in the first three months of the current 2014-15 season, but continuous fall in prices is a cause of concern for millers, industry body ISMA said today.

Sugar output stood at 5.86 million tonnes in the October-December period of the 2013-14 season. Sugar season runs from October to September.

Expressing concern over falling ex-mill prices of sugar, Indian Sugar Mills Association (ISMA) said that the rates are "substantially below the cost of production" and it has become difficult for mills to even pay the cane price to farmers within stipulated period.

03:00 pm Coal India update

Coal India is transporting extra volumes of coal to power plants ahead of a five-day worker union strike that threatens to cut much of its per-day output of 1.6 million tonnes, two company officials told Reuters on Monday.

The company accounts for about 80 percent of India's total output and worker strikes have previously crippled power plants. Coal fuels 60 percent of the country's power production.

The five worker unions of Coal India will go on a strike from Tuesday against the government's plan to allow private companies mine and sell coal, said Jibon Roy, general secretary of the All India Coal Workers Federation.

The unions might again go on strike on January 13, Roy said.

02:45pm IT earnings to kick start soon

A double whammy of seasonal weakness and cross-currency headwinds may have hurt dollar revenues of frontline IT services firms during the December quarter, according to a Deutsche Bank report.

"We expect Infosys to be affected the least and TCS the most by the adverse currency movements. Tech Mahindra continues to gain share and we expect it to deliver USD revenue growth of 3.8 percent quarter on quarter, significantly higher than peers at 0.4-1.2 percent Q-o-Q," Deutsche said, adding that Tech Mahindra and TCS continue to remain its top picks.

According to Deutsche, the cross-currency headwinds faced by tech companies in December were the most severe quarterly movements of the past four years.

"This is likely to negatively affect the dollar revenue growth rates of the top-tier Indian vendors by 130-220bps," the report said. However, staying bullish on Tech Mahindra, Deutsche said it expects the tech major to continue to gain share and deliver sector-leading dollar revenue growth of 3.8 percent Q-o-Q (against 2.8 percent [organic]) during the quarter on the back of strong deal wins in both telecom and enterprise businesses.

"Despite the severe cross-currency headwinds, the weak rupee will cause the operating margins of the vendors to remain in a narrow band on a Q-o-Q basis," the report added.

02:25pm Interview

Debt-laden Unity Infraprojects received an approval for their CDR scheme to aid cash flows. Currently, the company has restructured debt of Rs 3,550 crore.

In an interview  Madhav Nadkarni, CFO, Unity Infraprojects says the interest rate will now come down by 2 percent, as CDR interest rate is 12 percent versus actual rate of 13.75-14 percent.

The company hopes to realise approximately Rs 500 crore from real estate and BoT by FY20-21, he adds. Furthermore, its indirect costs have come down due to fall in crude oil price.

02:00pm Market Check

The market remained in a consolidation mode in afternoon trade with the Nifty struggling at 8400 level. HDFC group, technology and PSU banks were under pressure whereas auto, FMCG and select metals stocks gained.

The Sensex advanced 22.32 points to 27910.22 and the Nifty rose 6.35 points to 8401.80. The BSE Midcap and Smallcap indices climbed over 0.3 percent.

About 1587 shares have advanced, 1263 shares declined, and 589 shares are unchanged on the Bombay Stock Exchange.

Micheal Kurtz, global head of equity strategy at Nomura is highly optimistic on India in 2015. According to him, much of the good news is yet to play out. "India is the largest overweight in the Asia portfolio and the brokerage is bullish on L&T, Axis Bank and SBI," he says.

Maruti Suzuki was one of the top gainers on the Nifty after CLSA retains the auto major as one of its top picks in 2015 with a target of Rs 4,400 per share. The stock gained 3 percent.

Tata Motors, Tata Steel, Larsen and Toubro, ONGC and Jindal Steel topped the buying list, up 2-3 percent whereas Dr Reddy's Labs, Bharti Airtel, Hindalco Industries, HDFC, BHEL, DLF and HCL Technologies were down 1-2 percent.

In the midcap space, HSIL, Ashok Leyland, Orient Cement, Va Tech Wabag and Symphony surged 6-9 percent while Sulabh Engineer, Tilak Finance, Persistent Systems, PMC Fincorp and Bayer CropScience lost 3-20 percent.

Among smallcaps, Hanung Toys, Lloyd Electric, Indraprastha Gas, Everest Industries and Elantas Beck climbed 11-20 percent.

Global markets were subdued. European markets declined 0.5 percent while the euro fell to a 9-year low versus the dollar as speculation grew about ECB getting closer to launching a bond buying program.

In commodities, crude resumed its downtick, hit a five-and-half-year low of USD 55.73 a  barrel as worries about a surplus of global supplies amid weak demand continued to drag demand. More information please visit this site www.bigprofitbuzz.com

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