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Nifty ends below 8800; Axis up 5%, ITC HUL fall 2%

14:00

The News International Team

03:30pm Market close

The market succumbed to profit booking pressures as the Nifty could not retain holding above the 8800-level. The 50-share index was down 11.50 points at 8797.40 while the Sensex slipped 60.68 points at 29122.27. About 1618 shares have advanced, 1298 shares declined, and 256 shares are unchanged.

Axis Bank gained over 5 percent, while Hindalco was 4 percent. Among the gainers were Wipro, L&T and GAIL. Bharti Airtel lost over 3 percent, Dr Reddy’s Labs, HUL, ICICI and ITC were other laggards.

03:00pm Cut in sugare prices

Sugar prices eased by Rs 10 per quintal at the wholesale sugar market in the national capital today due to huge stocks position following ample supplies from mills against on subdued demand. Marketmen said besides falling demand from bulk consumers despite ongoing wedding season, mounting stocks in the market following persistent supplies from mills mainly put pressure on sweetener prices. Sugar ready M-30 and S-30 prices were lower by Rs 10 each to Rs 2,780-3,010 and Rs 2,770-2,990 per quintal.

02:50pm Will RBI cut repo rate tomorrow?

The Reserve Bank of India will announce its credit policy on February 3 after governor Raghuram Rajan surprised the street with an out of turn repo rate cut of 25 bps on January 15, 2015 on the premise that inflation number has come down and would remain largely range bound in the next few months.

Against this backdrop, is there a scope of further rate cut tomorrow?

A CNBC-TV18 poll of the bankers and economists suggests only 10 percent of the respondents are still looking forward to another rate cut of 25 bps, but the majority believes the rates will remain unchanged this time, but the governor may act post the Union Budget.

A 55 percent respondents expect the RBI to announce three more rate cuts in 2015 taking repo to 7 percent by the end of the year; 35 percent expect only two more cuts this year while 10 percent see only one more cut coming their way.

A majority also said the RBI will lower its CPI forecast for March to under 6 percent while 35 percent expect RBI to keep March CPI forecast unchanged at 6 percent; only 20 percent see RBI cutting it to below 5.5 percent.

02:30pm Payment bank licence

Telecom investor Aditya Birla Nuvo and retailer Future Group were among the first big names to apply for licenses to run so-called payments banks, under rules meant to put basic banking within the reach of hundreds of millions.

Monday is the deadline for applications to run payments banks – which cannot lend – but also for permits to run small finance banks.

Indian authorities, including the RBI which will award the licenses, hope the permits will further financial inclusion, in a country where nearly half the population does not have access to formal banking.

Aditya Birla Nuvo, which is the biggest shareholder in India’s third-biggest cellular carrier Idea Cellular Ltd , said it plans to own 51 percent of the payments bank, while Idea will own the remainder. Idea can later raise its holding to 60 percent.

Future Group, one of India’s biggest retailers, also said it had applied on Monday for a payments bank permit.

Top Indian telecommunications carrier Bharti Airtel Ltd has said it would apply, reports Reuters.

02:00pm Market Check
 
The market remained volatile with a negative bias in afternoon trade while midcaps outperformed. The Sensex fell 107.51 points to 29075.44 and the Nifty declined 26.05 points to 8782.85.

However, the BSE Midcap Index gained 0.5 percent and Smallcap climbed 1 percent. About 1555 shares have advanced, 1231 shares declined, and 246 shares are unchanged on the BSE.

Ajay Argal of Barings Asset Management says he remains positive on Indian equities at current levels. Market is not very expensive from a 3-4 years time horizon, he adds.

Shares of ICICI Bank, ITC, HUL, Bharti Airtel and Dr Reddy’s Labs slipped 2-4 percent whereas Axis Bank, L&T, Wipro and Hindalco gained 2-4 percent.

Auto sales for January showed weakness for 2-wheeler sector. Bajaj Auto reported a 9 percent drop in January auto sales while TVS Motor posted just a 1.1 percent Y-o-Y growth in sales. On the other hand, Maruti recorded a 14 percent jump in total sales led by the near doubling in export sales. Eicher Motors too gained post a 25 percent rise in total sales.

HCL Technologies added another 5 percent to Friday’s rally as brokerages appeared bullish on the stock. CLSA raised target price to Rs 2,200 and expects to see continued earnings surprises & re-rating potential. Citi too raised the target to Rs 2,175 on their sole ‘buy ‘ call in the Indian IT services space.

Sun Pharma and Ranbaxy traded at all-time highs. The US Federal Trade Commission has given a conditional nod to the USD 4 billion merger based on divestment of anti-bacterial drug. The merger now just needs approval from Punjab and Haryana High Court which will be hearing on the merger today.

In macro data, HSBC manufacturing PMI indicated the economy is expanding but at a slower pace with the figure slowing to a 3-month low of 52.9 in January 2015 against 54.5 in December 2014.

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