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Market Live : Sensex, Nifty under pressure but Midcap outperforms; Dr Reddy’s tanks 5%

11:30 am Market Check: Equity benchmarks continued to trade lower in morning trade, with the Sensex down 149.10 points at 32,234.20 but the broader markets outperformed.

The Nifty continued to struggle below 10,000 level, down 31.50 points at 9989.05 while the BSE Midcap and Smallcap indices gained 0.5 percent.

Dr Reddy’s Labs was biggest loser among Sensex stocks, down more than 5 percent after disappointing earnings. Lupin, ICICI Bank, HUL and Sun Pharma were down 2-4 percent.

HDFC, Infosys, ITC, Maruti Suzuki and Adani Power were only gainers.

11:17 am Buzzing: Panacea Biotec shares rallied nearly 10 percent intraday on joint collaboration with the US firm for development of 7 complex generics.

“… has entered into joint collaboration for development, license, manufacturing, supply and sales of 7 complex generic pharmaceutical products with Bionpharma Inc, a generic pharmaceutical company based in the United States,” the New Delhi-based pharma company said in its filing.

The seven abbreviated new drug applications are currently under development at Panacea Biotec, representing a total estimated market potential of more than USD 800 million.

11:02 am Porinju’s take on the Nifty:

10:44 am Goldman bearish on Blue Dart: Goldman Sachs remained bearish on Blue Dart Express and maintained sell rating after weak set of earnings for the quarter ended June 2017. The stock price fell more than 2 percent intraday.

The research house slashed its 12-month target price to Rs 4,160 (from Rs 4,500) after lowering FY17/18/19 EPS estimates by 27/13/6 percent on pricing pressure.

With continued pressure on pricing and the industry adjusting to prepare for GST, it expects near term profitability of the company to remain muted.

Blue Dart reported weak Q1FY18 earnings across parameters. Revenue growth remained subdued at 7 percent YoY (sixth straight quarter of less than 10 percent growth) at Rs 666.6 crore, which partially impacted by lower transportation activity in the June prior to the GST rollout.

A decline in margins resulted in consolidated profit declining by 52 percent YoY to Rs 21.1 crrore in June quarter.

10:28 am Market Check: Equity benchmarks remained under pressure in morning trade, with the Sensex falling over 100 points following weakness in global peers.

The 30-share BSE Sensex was down 127.08 points at 32,256.22 and the 50-share NSE Nifty fell 30.65 points to 9,989.90.

The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 0.35 percent each on positive breadth.

About 1,057 shares advanced against 949 declining shares on the BSE.

HDFC extended gains today, hitting fresh record high of Rs 1,776.20, up 2.4 percent on top of 5.83 percent rally in previous session after strong earnings.

10:10 am Market Expert: S Krishna Kumar of Sundaram Mutual Fund said that the earnings have been pretty good and that retail private banks have seen strong delivery.

Even as the market soared to fresh record highs, there are questions on the next step for them going forward.

Fund houses such as Sundaram Mutual Fund believes that the Street could go through a consolidation phase going forward.

“In a long term growth phase of the economy, the market does go through a consolidation phase. Markets would be more reactive to results that come out this season, along with monsoon progress and the impact of GST,” S Krishna Kumar, CIO-Equity, Sundaram Mutual Fund told CNBC-TV18 in an interview. These factors will now be the drivers for the market going forward, he added.

10:00 am Buzzing: Zenotech Laboratories shares rallied as much as 5 percent in morning trade after Sun Pharma raised its stake in the company to over 50 percent.

Sun Pharmaceutical Industries raised its stake in Zenotech Labs to 57.56 percent from 46.85 percent, reports CNBC-TV18.

As per June quarter’s shareholding pattern, Sun Pharma held 46.85 percent stake (representing 1.61 crore shares of total paid-up equity) and other promoter DaiiChi Sankyo had 20 percent stake in the company.

Meanwhile, on July 25, Zenotech Labs approved allotment of 2.66 crore shares at a price of Rs 45 per share issued on a rights basis, to all eligible applicants who have subscribed to the said issue.

9:54 am Deal: Shree Renuka Sugars announced a preferential issue of upto 50 crore 0.01 percent compulsorily convertible preference shares (CCPS) of Rs 16.27 each, at par, to Wilmar Sugar Holdings Pte. Ltd. (WSH), Singapore.

The investment is subject to the successful completion of a debt restructuring package which would entail, among other things:
(i) WSH making an additional investment of Rs 783.96 crore in SRSL (infusion) for the purpose of up-front repayment and settlement of part of the debts and to fund working capital requirements of SRSL;
(ii) lenders converting part of the debts into equity shares and convertible securities of SRSL;
(iii) waiver of part of the debts; and
(iv) restructuring of the remaining Debts through changes in the repayment terms on the terms of a restructuring package.

“The company hopes that this exercise, once completed, would significantly pare its debt burden and interest cost in India and would also free the company of all guarantees and obligations related to its overseas subsidiaries,” Shree Renuka said.

9:40 am Market Outlook: Though yet to face any unsettling events in 2017, rallying 27 percent till date, Nifty is likely to embark on a treacherous voyage from here on, grappling with multiple gann supply points, Pritesh Mehta, IIFL Private Wealth said.

Three-digit gann number of 101(00), four digit gann number of 1009(0) and multiplication of 360 degrees by applying a square of 9 from the significant low of 9,342 is also placed around 10,130.

On higher time frame charts, PRZ of potential ABCD pattern stands near 10,050 mark. So, the point of confluence is seen between 10,050-10,130.

9:25 am Earnings Impact: Cigarette-hotel-to-FMCG major ITC met analysts’ expectations on earnings front as profit grew by 7.4 percent year-on-year to Rs 2,560.5 crore in Q1FY18, driven largely by tobacco business. The stock gained 1 percent.

Revenue during the quarter increased 4.1 percent to Rs 13,800.4 crore compared with year-ago quarter, largely aided by cigarette as well as FMCG others businesses.

“Revenue from cigarettes segment (which contributed 63.6 percent to total revenue) grew by 6.6 percent to Rs 8,774.18 crore in quarter ended June 2017 from Rs 8,230.80 crore in same quarter last year,” ITC said in its filing.

Cigarettes’ earnings before interest and tax (EBIT) jumped 9 percent year-on-year to Rs 3,274.14 crore, with margin expansion of 80 basis points for the quarter. The company hiked cigarettes prices by 6-7 percent in Q1.

9:15 am Market Check: The NSE Nifty started off the August series on a negative note, falling below 10,000-mark on correction in banks and healthcare stocks.

The 30-share BSE Sensex was down 134.80 points at 32,248.50 and the 50-share NSE Nifty fell 33.45 points to 9,987.10.

ICICI Bank, Dr Reddy’s Labs, HUL, Lupin, Bharti Airtel, Hindalco, ONGC, Vedanta and Sun Pharma fell up to 5 percent while ITC and L&T gained.

Nifty Midcap was down 0.3 percent as about two shares declined for every share rising on the NSE.

Biocon, Idea Cellular, Redington, Balaji Amines, Blue Dart and Shree Renuka Sugars lost up to 4 percent.

Cineline India, Deccan Gold Mines, and Glenmark Pharma rallied up to 15 percent.

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