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LIVE: Sensex, Nifty rebound; European mkts, US fut strong


TheNewsInternational Team

01:05 pm Market Expert:

Speaking straight from the dealing room Dilip Bhat, Joint MD, Prabhudas Liladher told CNBC-TV18’s Mangalam Maloo that it looks like investor confidence has been rattled and selling could continue but this is only an aberration and a opportunity to buy on dips.

These type of events happen every year for a couple of times and the entire market gets routed but if you look at India in specific, there is not much downward scope from these levels,” said Bhat.

12:55 pm Rupee turns strong:
The Indian currency recovered from its day’s low, up 12 paise to 66.51 against dollar.

It touched an intraday low of 66.76 a dollar.

12.45 pm Market rebounds: Equity benchmarks rebounded amid volatility, tracking strong opening of European markets.

The Sensex gained 24.95 points at 25766.51 after seeing more than 400 points fall intraday. The Nifty rose 6.20 points to 7815.20 after falling below the 7700 level intraday.

The market breadth slightly improved. About 653 shares have advanced against 1848 shares declined on the Bombay Stock Exchange.

12:40 pm Global Update: China’s Shanghai Composite index crashed to 2965 at close, the lowest level in 2015, down 7.6 percent (in addition to 8.5 percent fall in previous session).

US futures recovered sharply from day’s low with the Dow Jones and S&P 500 futures trading 2 percent higher each.

European markets also opened strong. France CAC and Britain’s FTSE gained 1.7 percent each after yesterday’s mayhem.

12:35 pm IPO Analysis: Considering the healthy balance sheet, strong growth prospects and improving profitability, Nirmal Bank recommends subscribing the issue Shree Pushkar Chemicals and Fertilisers for listing as well long term gains.

“Between FY11-15 SIL?s revenues grew at CAGR of 19.5% while EBIDTA grew at a CAGR of 35.3% and PAT by impressive 61.3%. We expect SPCFL to maintain 25-30% growth going forward, on the back of expansion. On the valuation front, at the upper price of band of Rs 61-Rs 65, SPCFL is commanding at PE of 10.5x of FY15, which we believe is attractive,” it reasoned.

12:30 pm Fundamental weakness?:
The U-Turn in late morning trade that took Nifty below 7690 does not signal any fundamental weakness, says Ridham Desai, managing director at Morgan Stanley and refuted that panicking FIIs are in a hurry to exit India.

Instead, he said most FIIs are still overweight India. “I hesitate to think that this is the beginning of a bear market and would call it a bull market correction.”

He also added that this is not the time to turn bearish since India has more or less rebalanced its economy. Desai said India got impacted because emerging market got hit by China issues.

In this scenario, he finds banks have turned very attractive. He also believes industrials, technology and consumption plays will reward investors in the coming months.

12:20 pm Movers & Shakers:
NTPC bounced back very rapidly, up more than 4 percent after seeing more than 6 percent fall in morning session.

ICICI Bank, Reliance Industries, Axis Bank, SBI, Tata Motors, M&M, Coal India, Vedanta, Tata Steel and GAIL gained 1-3 percent.

However, Infosys, ITC, L&T, HDFC, Maruti Suzuki, Lupin, Sun Pharma, BHEL, Bharti Airtel, Hero Motocorp and Bajaj Auto dropped 1-3 percent.

12:10 pm Market trims losses: Equity benchmarks cut down losses in noon trade with the Sensex falling 155.93 points to 25585.63.

The Nifty clawed back above the 7700 level, down 47.95 points to 7761.05.

The market breadth remained weak as about 438 shares have advanced against 2032 shares declined on the Bombay Stock Exchange.

12:03 pm BoAML on India: The equity market should continue to be rangebound in the near term, given the global uncertainty and weak earnings, said Bank of America Merrill Lynch.

It believes valuations have moderated but are still above average.

“Based on current earnings forecasts, the BSE Sensex is now trading at 15.3x 12-month estimated forward earnings, which is largely in-line with historical average of 14.5x. However, adjusting for earnings downgrades to consensus Sensex EPS estimates, index is trading at ~16.1x 12-month estimated forward earnings which is still ~12% premium to long term averages,” it explained.

11:58 am Stocks break 200 DMA: Hindustan Unilever, Bosch, HCL Technologies, Infosys, Mahindra & Mahindra, UltraTech Cement and TCS breached its 200-day moving average.

11:50 am Rout continues: The panic selling continued in late morning trade. The Sensex crashed 415.82 points or 1.62 percent to 25325.74 and the Nifty cracked 128.60 points or 1.65 percent to 7680.40.

The broader markets saw major fall compared to benchmarks; the CNX Midcap dropped 2.6 percent and BSE Smallcap tanked 3.9 percent. More than 2000 shares have declined against 350 shares advanced on the BSE.

11:45 am Arvind arm to list: Arvind Infrastructure, the subsidiary of textile and apparel maker Arvind, will list its equity shares on Wednesday (August 26).

Arvind had transferred its real estate business to Arvind Infra that issued 1 share for every 10 shares held by the shareholders of Arvind.

11:35 am Buy on dips?: Echoing expert sentiments, Sachin Shah, fund manager at Emkay Investment Managers says that lower valuations are making the market more attractive.

With the sell-off witnessed in last two days, the valuations have become reasonable, Shah told CNBC-TV18. He says there is possibility of further fall in market. 

11:25 am Rupee Outlook: It is sentiment that is driving the current market and not the fundamentals, says Divya Devesh, ASIA FX strategist at Standard Chartered Bank.

In an interview with CNBC-TV18, Devesh says: “the fundamental problem still has not been solved, which means that the INR could still remain under pressure in the near-term.”

He says this will continue till some fiscal or monetary measures are announced by the Chinese government.  Devesh believes that “India is more insulated than the other Asian markets” and will bounce back in the long run.

“66-67 per dollar looks like a reasonable range at least for this week,” says Devesh. He added that “if this equity turmoil continues, we could see a break of 67 per dollar.”

With low commodity prices and reduced chances of US Federal Reserve rate hike, the year-end dollar INR forecast remains stable at 65, he says.

11:15 am Market Extends Losses: Equity benchmarks extended losses with the Nifty falling below 7700, down 110 points or 1.39 percent to 7698. The Sensex plunged 353.14 points or 1.37 percent to 25388.42.

The broader markets, too, were under pressure as the BSE Midcap lost 1.5 percent and Smallcap tumbled 2.6 percent. About five shares declined for every share advancing on the Bombay Stock Exchange.

The rupee erased all its morning gains, down 2 paise to 66.66 a dollar.

11:05 am FII View: Ben Luk, Global Market Strategist, JP Morgan Asset Management in an interview to CNBC-TV18 said it is important that investors stay composed in these volatile periods and long-term focus on fundamentals.

Most equity markets, according to him, have already priced in the concerns with regards to slowdown in China because the economy has been weakening for many months now and not just last couple of weeks.

From a 6-12 months perspective, he is overweight on developed market equities like US and Europe and underweight on emerging market (EM) equities. However, amongst the EMs, he is still positive on India and China.

While for India although the earnings season wasn’t so good, but that has been factored in. The country is also likely to see further structural reforms and cleaner current account deficit, which makes it a positive story. With regards to China although it is seeing slower growth, the structurally concerns are improving, property prices are picking up and consumption is at higher levels now.

Foreing investors are keenly watching if PM Modi can go through key reforms to lift private investments, which will give a boost to the Indian economy, said Luk.

10:55 am Market Check: The market wiped out gains again amid choppy trade. The Sensex dropped 74.36 points to 25667.20 and the Nifty fell 28.85 points to 7780.15, dragged by technology, pharma and capital goods stocks.

The broader markets continued to see selling pressure as the BSE Midcap lost 0.6 percent and Smallcap declined 1.3 percent. About 608 shares have advanced against 1604 shares declined on the Bombay Stock Exchange.

10:40 am Moody’s on India: Moody’s Investors Service today said it could upgrade India’s rating if the government’s reform agenda is implemented and key macroeconomic indicators like inflation remain under control over the next year.

“India’s rating could be upgraded if Moody’s expectations of gradual but credit positive reforms are realised in actual policy implementation and if the recent improvement in inflation, fiscal and current account ratios is sustained,” it said. Moody’s has a ‘Baa3’ rating on India with a positive outlook.

Since 2004, Moody’s has rated India at ‘Baa3’, the lowest investment grade just a notch above ‘junk’ status.

“The rating could be upgraded if the above expectations are reflected in policy progress and macroeconomic indicators over the next year, and if we view this progress as sustainable,” it said in a report on the Indian Government.

Moody’s said the positive outlook is based on the expectation of implemented policies which are likely to lower sovereign credit risk by stabilising inflation, improving the regulatory environment, increasing infrastructure investment while maintaining the ongoing improvement in fiscal ratios.

10:30 am IPO opens: The Rs 70-crore initial public offer of Shree Pushkar Chemicals & Fertilisers (SPCFL) has opened for subscription today (August 25). The price band is fixed at Rs 61-65 per equity share for the issue, which will close on August 27.

The issue comprises of 20,26,589 shares for offer for sale. IFCI Venture Capital Fund, which infused growth capital of around Rs 15 crore, will reduce its stake from the current 11.30 percent via offer for sale.

The Mumbai-based manufacturer of dye intermediates, acids, fertilisers and cattle feed supplements said the funds raised through fresh issue shares are proposed to be utilised for enhancing existing capacities and forward integration plan of manufacturing reactive dyes.

10:20 am Nomura on Coal India: The brokerage has retained buy rating on the stock but lowered target price to Rs 407 from Rs 417 earlier. It says the implied 12-month total return (including dividend yield) is 22 percent.

Larger-than-expected magnitude of target disinvestment by the GOI together with management’s cautious commentary on near-term coal demand led to the 21 percent drop in Coal India’s stock price in the past fortnight.

Nomura believes 7-8 percent year-on-year growth in offtake should materialise in FY16F, as coal demand picks up in the second-half of the year; fuel supply agreement realisation will remain steady and operational expenses will remain in check.

Beyond FY16F, it believes that the sustained impetus to augment production & rail infrastructure should enable a FY16-20F offtake CAGR of 8.5 percent and a sizeable hike in notified coal prices in Q1FY17 together with higher third-party contracting + benign diesel prices will cushion pressure on margins.

10:10 am Market Expert: India has things going for it which is why it is definitely not a market to sell, says Vibhav Kapoor of IL&FS. He lists soft commodity prices and deflationary trends as immediate positives that will benefit India. He sees 7500-7600 as good support level in the short term and says in 15-18 months all sectors, except commodities, will look good.

Kapoor also sees the Reserve Bank cutting rates by 50-75 bps this year.

However, he warned that Nifty can go down in the short run mirroring global pain with China as the epicentre of trouble (despite outperforming in relative term). He  expects S&P 500 to fall to 1700 in the near term and emerging market to correct further 10-15 percent.

Despite the uncertainty, he sees India as one of the best placed markets.  “From here onwards, investors should look at every decline as a buying opportunity,” he said.

10:00 am Market Update:
Equity benchmarks clawed back again amid volatility ahead of expiry of August Nifty derivative contracts (on Thursday). The Sensex gained 142.48 points at 25884.04 and the Nifty rose 41.35 points to 7850.35.

The BSE Midcap also recovered, up half a percent but Smallcap remained under pressure, down 0.4 percent. The market breadth was weak as about 718 shares have advanced against 1237 shares declined on the Bombay Stock Exchange.

Coal India, Axis Bank, Vedanta, Tata Steel, Bajaj Auto, Cairn India, Yes Bank and BPCL topped the buying list, up 2-5 percent. However, NTPC, GAIL, HDFC, Ambuja Cements, Bharti Airtel and Hero Motocorp lost 2-5 percent.

9:55 am L&T wins order: L&T Construction, the brand of Larsen & Toubro, has bagged orders worth Rs 1,563 crore, including breadthrough order in Malaysia.

“The power transmission and distribution business of L&T Construction has won orders worth Rs 1563 crore in both international and domestic markets in July and August 2015,” said L&T in its filing.

As a strategic breakthrough in the ASEAN market, a key order has received from Tenaga Nasional Berhad for the design, manufacture, supply, installation, testing and commissioning of a 500 KV double circuit transmission line in Malaysia, it added.

9:50 am IPO opens: Pennar Engineered Building Systems has opened its initial public offer for subscription today (August 25). The issue consists of a fresh issue of Rs 58 crore and an offer for sale of up to 55,16,141 equity shares by the selling shareholders.

The price band is fixed at Rs 170-178 apiece for the issue, which is scheduled to be closed on August 27, 2015.

Pennar Engineered Building Systems, a subsidiary of Pennar Industries (manufacturer of engineering products), is a custom designed building systems solutions provider. Its capabilities include designing, manufacturing, supply and assembly of custom designed building systems.

The issue proceeds will be used for repayment in full or part of certain working capital facilities; financing the procurement of infrastructure (including software and hardware) for the expansion of design and engineering services; and general corporate purposes.

9:45 am Market down: The market gave up early gains on profit booking as investors may be preferring strategy of “sell of rallies”.

The Sensex rose 3.89 points to 25745.45 and the Nifty advanced 8.40 points to 7817.40 amid consolidation. About 760 shares have advanced, 977 shares declined, and 55 shares are unchanged on the BSE.

The broader markets slipped into red, down half a percent. 

9:40 am Asia Update:
Asian markets barring China recovered after seeing rout in previous session. Hang Seng, Straits Times, Kospi and Taiwan Weighted rallied 1.6-3 percent. Nikkei rose 0.5 percent.

However, Shanghai Composite Index shed another 4.3 percent, in addition to 8.5 percent fall seen in previous session.

9:35 am Gainers & Losers: Shares of ICICI Bank, Axis Bank, Sun Pharma, Tata Motors, SBI, HUL, Cipla, Coal India, Hindalco Industries and Vedanta rallied 2-3.5 percent.

However, HDFC, NTPC, HDFC Bank, Bharti Airtel, GAIL and Hero Motocorp continued to see selling pressure.

9:25 am Sell on rallies?: Sunil Garg, JPMorgan said most major markets were deeply oversold and in most cases nearly 3 standard deviation below 26-week moving average are suggesting a strong possibility of a rebound from these levels.

Given the weak set up on monthly charts, he sees any rallies as selling opportunities. Ultimately Asian market direction will be set by S&P moves and reversing bearish view will require a combination of S&P reversing course and momentum divergences, Garg said.

According to him, the Nifty support is seen around 7,600 on the downside.

9:15 am Market Opening: Equity benchmarks rebounded quite strongly, majorly led by short coverying after previous day’s rout. The Sensex climbed 308.79 points or 1.20 percent to 26050.35 and the Nifty rose 94.30 points or 1.21 percent to 7903.30.

About 488 shares have advanced, 371 shares declined, and 33 shares are unchanged on the BSE.

9:05 am Market in Pre-Opening: The Sensex gained 45 points at 25,787 and the Nifty rose 72 points to 7878 in pre-opening session after yesterday’s rout led by global fall.

The rupee also extended recovery to 66.41 a dollar, up 23 paise over 66.65 a dollar seen in previous session.

9:00 am Rupee recovers: The Indian rupee recouped some yesterday’s losses in early trade Tuesday. The currency has opened at 66.55 a dollar, up 10 paise compared to 66.65 a dollar in previous session.

8:59 am: Market Outlook: Indian markets signals gap up opening on back of moody comments on Indian economy and recover seen in the Asian markets. The positive outlook on the rating reflects Moody’s view that recent and proposed policies will stabilize inflation, improve the regulatory environment, increase infrastructure investment and lower government debt ratios. Tracking the momentum, the index may trade above level of 8000 in trade today, says Mehta Equities.

8.55 am: A lot of analysts are cautioning that if a bounceback comes through today, it may be short-lived and that the short-term trend has broken down. “This remains a sell-on-every-rise markets,” they say. 

8.50 am: Here’s some information for traders. “The Nifty has immediate support at 7,752,” says an expert from brokerage firm CLSA. If it breaks, he says the next support lies around 7,350.

8.45 am: With 15 minutes to go for the Indian market’s pre-opening trade to start (and half an hour for actual trading), the Singapore-based SGX Nifty is now up 1.35 percent, or 106 points, to 7,902.

For those who may not know, the SGX Nifty reflects futures traded on the Indian Nifty in the Singapore market.

8.40 am: Glenmark Pharma, United Breweries, SpiceJet, Crompton Greaves and IOC will remain in news today. Here’s why .

8.35 am: A short covering is coming through in the very immediate term, says CNBC-TV18’s Anuj Singhal, “but don’t get trapped”. Watch his take .

8.30 am: Despite the brutal fall in Indian markets, most analysts have been positive on the medium term outlook for local shares, as they expect economy and earnings to gradually pick up.

They do make it clear that in the short run, stocks will not move along with global trends if an equity rout takes place everywhere else.

8.25 am: The recent developments in global financial markets have at least brought along some bit of good news for investors: the US Federal Reserve, which was likely to hike interest rates for the first time in eight years (at its September meeting) is unlikely to do so now, says legendary PE investor Wilbur Ross.

In an interview with CNBC-TV18, Ross said a lot of markets, such as Japan, are now looking cheap and that it was now a good time to add stocks to portfolio.

8.20 am: The Indian rupee closed at 66.65 per US dollar yesterday, bringing back memories of the brutal 2013 ‘taper tantrum’  that sank it beyond 68. (It must be mentioned that on both occasions, the currency performed better than post peers.)

Social media, of course, is abuzz with jokes.

But CNBC-TV18’s Banking Editor Latha Venkatesh says that the rupee fall could worsen if Asia’s selloff continues. Watch video here .

8.15 am: The sell-off in Indian equities has been rather brutal in the past few weeks, with the Nifty retracing from nearly 9,000 to about 7,800.

Here are 12 stocks that have fared the worst in 2015 .

8.10 am: We’ll also tune in to what the big voices have to see about yesterday’s sell-off and what can be expected ahead.

First, Allianz’s chief economic advisor, Mohamed El-Erian, who says the Monday will continue until one of two things happen: emerging markets put in place a policy circuit breaker or prices fall low enough to bring buyers back.

“Low enough means a lot lower than here because they’ve been inflated well beyond fundamentals by central bank policies, so in order to bring people back in you’ve got to overshoot the fundamentals on the down side to induce people back in,” he told CNBC’s Squawk Box.

Read more here .

8.05 am:
Some more cues coming in now. Dow futures have now opened up 2 percent, signalling the worst of global equities may be behind for now.

In other asset classes, the US dollar is up 0.4 percent. Gold and crude oil are up marginally. Base metals, too, are seeing some bounceback, according to Kitco.

8.00 am: The recovery seems it may show up in Indian shares as well. Singapore’s SGX Nifty, a widely-tracked bogey for Indian shares, is up 2 percent to 7,948. 

However, it remains to be seen if a positive start to Indian equities, if it does take place, will sustain. 

7.50 am: Appears to be some respite for the region’s equity investors: A lot of Asian markets are now recovering. China is now down 3.2 percent. Japan’s Nikkei is in the green (up 0.1 percent), South Korea’s KOSPI is up in the green too. Hong Kong’s Hang Seng is now up 2.5 percent.

7.45 am: So what exactly is going wrong in China? The country has been undergoing a major slowdown in the past few years, as exports remain muted in the face of weak global growth.

But to make matters worse, the country witnessed two major bubbles — in real estate followed by the stock market — which appear to be now bursting.

Between mid 2014 and mid 2015, the Chinese stock market had risen 150 percent, and has now given back more than half half of its gains.

7.40 am: Here’s some early bad news: China opened 6.5 percent lower again today but has recouped some losses to now trade 3.9 percent lower. Other Asian markets are, however, trading mixed.

7.30 am: Good morning and welcome to the coverage of latest developments in the global financial markets. After yesterday’s mammoth fall in China (8.5 percent down), all of Asian (India fell 6 percent), European and US markets (Dow Jones sank 3.6 percent) sank. It looks to be another bad day for markets today.

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