Ukraine crisis drag Sensex 173 pts; ITC, Reliance gain

3:50 pm Auto sales: Auto giant Mahindra and Mahindra’s (M&M) tractor arm continues to see steady growth. Its cumulative domestic sales grew 23 percent year-to-date (YTD) due to favorable monsoon and higher MSP.

Bharatendu Kapoor, senior vice president, sales, channel and customer care, farm division at M&M is very optimistic about continuation of tractor growth.

In an interview to CNBC-TV18 he said he expects good harvest to aid growth in tractors and he is looking at industry growth of 17 percent for FY14 in tractors business.

The company saw 18 percent growth in sales at 17,592 units in February this year versus 14,861 units in the same month last year. The domestic sales grew 19 percent to 16,552 units as against 13,944 a year ago. The exports also registered a 13 percent growth at 1,040 units, compared with 917 units in February 2013.

Ukraine crisis spooked Indian market too as the Sensex shed 173 points to close below the 21000-level. The Sensex ended at 20946.65. The Nifty slipped 55.50 points at 6221.45. Among the laggards were Dr Reddy's Labs, BHEL, Sun Pharma,, M&M and Cipla.

The top gainers in the Sensex were Reliance, Tata Steel, Hindalco, ITC and Coal India.

Ukraine's new PM has accused Russia of declaring war on the country. This is after Russia moved troops to three bases in Crimea on Sunday. The G7 has condemned Russia’s intrusion into Ukraine and canceled preparations for the G8 summit that had been scheduled to take place in Sochi in June.

Meanwhile, Russia's central bank has raised interest rates from 5.5 percent to 7 percent, in an effort to stabilise its currency and offset inflation.

Prakash Agarwal, Equity Analyst - India Pharma & Property, CIMB India says the Indian pharma sector is likely to sustain 15-20 percent growth in the days to come.

Speaking to CNBC-TV18, Agarwal says that the rupee fall, increase in investment in US and a steady Indian business growth will provide a good support to the sector.

"There were some aberrations in the Indian domestic market, but it is coming back. So, the sense is that given the investments that they have done in the US in terms ANDA filings, getting into niches, we still believe the growth momentum of 15-20 percent should be sustainable going forward," he said

Engineering and construction giant Larsen & Toubro (L&T) has won a Rs 1,550 crore road project in Oman, the company said today.

"The Transportation Infrastructure Business of L&T has bagged  a prestigious international order worth Rs 1,550 crore from the Ministry of Transport and Communications, Sultanate of Oman, for the construction of a road between Bidbid-Sur Section," it said in a statement.

The scope of L&T's works involve widening of the existing 76 km two-lane road into three-lane dual carriageway, the construction of 10 arch type interchanges, 5 two-cell vehicular underpasses, 7 single-cell pedestrian underpasses and 15 kilometers of linked and service roads along the stretch, it said.

The project is scheduled to be completed in 38 months.

03:10 pm Buzzing: Shares of Natco Pharma hit a record high of Rs 876, up 4 percent intraday on Monday. The Hyderabad-based drug company got relief in drug dispute after Delhi High Court dismissed a suit filed by Israel-based Teva Pharma against Natco seeking an injunction over marketing of Copaxone in the US.

Natco commented, “We are very pleased with the decision by the High Court to dismiss and take no action in this matter. ...We are also pursuing other challenges against this patent."

Copaxone is used to treat multiple sclerosis.

After months of declining sales, the worst in the auto industry may be over and negative growth may be tapering off, believes Rajiv Bajaj, Managing Director at Bajaj Auto.

In an interview with CNBC-TV18, the Bajaj scion said the auto market is finally seeing signs of bottoming out and that the company is looking to add to its 19 percent market share with new models such as its recently-launched next-generation Discover 125cc.

Total sales for Bajaj Auto fell 7 percent to 3.18 lakh vehicles in the month of February, data released on Saturday showed. But exports remained strong, rising 7 percent.

Bajaj is now sitting on “near-normal four-five weeks” of inventory, he said, adding that pile-up is not a concern for the company anymore.

The MD also touched upon the issue of the massive excise cut that finance minister P Chidambaram had carried out in the February interim budget and said he did not believe the duty cut would address the fundamental weakness in the market. “Dealers have also not started passing on the excise duty benefits to customers yet.”

Bajaj also spoke about the recent turmoil in its export markets such as Egypt, where the previous government had banned imports soon before it fell. “The troubles in Egypt have been offset by growth in markets such as Nigeria where three-wheeler exports grew from 2,000 units in July last year to 6,000 in February.”

The automaker foresees export growth to be in double digits in the near term, Bajaj said, indicating its recent troubles with exports are behind.

BHEL, Asian Paints, Tata Elxsi, SBI, Tata Sponge, Infosys, ICICI Bank, HCL Technologies and Tata Motors are most active shares on exchanges.

Index heavyweights Reliance Industries and ITC bucked the trend, rising over 0.4 percent while HCL Technologies topped the selling list in the Nifty 50, falling 5 percent.

In the smallcap space, Jubilant Life is locked at 10 percent upper circuit in addition to 7 percent upmove in previous session after the announced successful resolution to FDA warning letter for montreal facility.

Abu Dhabi-based TAQA told CNBC-TV18 that the company's capacity will increase to 1800 MW in India post Jaiprakash Power Ventures deal.

TAQA-led consortium on March 1 said it would buy 2 hydropower units from JP Power. TAQA said it would complete JP transaction later this year.

"We are looking forward to expanding in Indian energy sector and want to invest in renewables & coal assets in India," TAQA added.

Rob Aspin of StandChart Bank is hopeful that leaders of both the West (US) and Europe will be able to negotiate and find a resolution for the Ukraine problems.

The house at present is underweight emerging market equities and Asian equities, and would rather focus more on US and European market at this juncture says Aspin.

However, with respect to India, he does see opportunities in the spaces like technology, healthcare and industrials although technology seems a bit richly valued at present. Among the financials they prefer the private banks over the public sector banks, says Aspin.

Answering a query on whether there could be outflows from emerging markets because the current geo political tensions, he said it depends on how the Ukrainian situations works out but if a resolution is found then the flows may return to European markets but they would take bit more time to return into Russia.

With regards to commodities like gold and crude rallying on back of the geo-political tensions, Aspin feels that it could be so because gold is a hedge for these tensions. He thinks if the tensions aggravate then it could provide support to gold prices but in case resolution is found then the prices could go back to normal.

Shares of AstraZeneca Pharma are locked at 20 percent upper circuit after the board members said it would consider parent's delisting offer on March 5.

"The board of directors of the company has, on March 01, received a letter from promoter AstraZeneca Pharmaceuticals AB (AZP AB) Sweden, proposing to make a voluntary delisting offer to the public shareholders of the company. The offer is with a view to delist the equity shares of the company from BSE, National Stock Exchange of India and Bangalore Stock Exchange," the company said in its filing.

AZP AB holds 1,87,50,000 equity shares representing 75 percent of the total paid-up share capital of AstraZeneca Pharma.

After this letter, a meeting of the board of the company has been scheduled on March 05, 2014 to consider the delisting proposal and matters incidental hereto.

AZP AB in its letter said, "We have requested the board of the company to convene a meeting of the board to consider and approve the delisting proposal, and take requisite steps to obtain the prior approval of the shareholders to the delisting proposal by a special resolution passed through postal ballot as per the delisting regulations."

Geopolitical tensions surrounding Ukraine weighed heavily on global markets. Key Asian indices ended lower except in China that gained 0.9 percent while Nikkei and Hang Seng fell 1-1.5 percent. European markets lost more than 2 percent.

Ukraine's new PM Arseniy Yatseniuk has accused Russia of declaring war on the country. This after Russia moved troops to three bases in Crimea on Sunday. Russia's central bank has raised interest rates from 5.5 percent to 7 percent, in an effort to stabilise its currency and offset inflation.

However, gold jumped to USD 1340 an ounce while crude prices rose as well due to the geopolitical premium.

Rupee declined 14 paise, tracking weakness in the Russian rubble and other global currencies. Gilts fell due to lack of buying support from state owned banks and subdued risk appetite due to tensions in Ukraine.

02:00pm The market fell nearly a percent in afternoon trade with the Sensex breaking the 21000 level weighed down by capital goods, healthcare, technology and bank stocks. The fall in global markets caused the selling pressure, tracking Ukraine crisis.

The Sensex declined 169.34 points to 20950.78 and the Nifty slipped 56.95 points to 6220. About 1111 shares have advanced, 1390 shares declined, and 131 shares are unchanged.

Healthcare stocks cracked further on profit booking. Sun Pharma and Dr Reddy's Labs plunged 2.5 percent each followed by Cipla with a 1.8 percent fall.

BHEL crashed 3 percent. CNBC-TV18 reports quoting government sources that Life Insurance Corporation of India (LIC) purchased government's 4.66 percent stake in the company at Rs 167.20 apiece through block deal in morning.

It is learnt that the government, which was holding 67.72 percent stake in the company as of December, raised Rs 1,889 crore through block deal with LIC.