Closing Bell: Sensex closes down 145 pts ahead of earnings season, macro data

3:20 pm UBS downgrades Ipca: UBS has downgraded pharmaceutical firm Ipca Laboratories from buy to neutral as it believes the potential earnings growth recovery in FY18/19 is largely priced-in at current levels.

The stock has outperformed the Nifty and NSE Pharma indices by 5 percent and 16 percent, respectively, over the past three months, based on investors' expectations of an early resolution to import alerts, according to the research house.

However, UBS expects the resolution of import alerts to materialise in early 2018, given the risk-based inspection mechanism followed by the US FDA and resumption in the US business by H2FY19.

Remediation at the two formulation facilities under import alert is complete and management guides for completion of remediation work at the API site by July 2017.

3:05 pm CLSA on Yes Bank: Yes Bank share price continued to hit fresh record high, up 1.25 percent intraday at Rs 1,634 as CLSA raised profit estimates by 6-7 percent and target price to Rs 1,920 (from Rs 1,780 earlier) after its recent fund raising.

With maintaining buy rating on the stock, the brokerage house says the recent capital raise of USD 750 million will drive 6-7 percent upside to FY18-19 profit estimates, but rise in shares will limit upside to EPS and return on equity may compress a bit as balance sheet is under-leveraged.

Over FY16-19, the research house expects Yes Bank to deliver 27 percent profit/23 percent EPS CAGR led by topline growth and steady asset quality.

2:52 pm Market Update: Benchmark indices extended losses again, with the Sensex falling 178.59 points to 29609.76 and the Nifty down 47.15 points at 9189.85. Investors maintained cautious stance ahead of earnings season that will kick off by Infosys on Thursday.

2:49 pm EIR from USFDA: Shilpa Medicare said the US health regulator has issued an Establishment Inspection Report (EIR) for its manufacturing facilities located at Raichur in Karnataka.

"The USFDA has issued an EIR for the company's Active Pharmaceutical Ingredient (API) manufacturing facilities located at Raichur, Karnataka which was inspected between December 12-16, 2016. The inspection has now been closed by the USFDA," Shilpa Medicare said in a BSE filing.

USFDA releases a copy of the EIR to the establishment that was the subject of an FDA or FDA-contracted inspection when the agency determines the inspection to be closed.

Form 483 is issued when an investigator observes any possible violation of the laid-down rules.

2:25 pm KKR bullish on India: Marquee private equity player KKR which has USD 130 billion of asset under management worldwide is bullish on India and thinks it attractive for investments, reports CNBC-TV18's Nisha Poddar who met with its founder Henry Kravis to know about their
India strategy.

Kravis thinks there are many opportunities in the mid-sized companies for investments. KKR wants to be seen as capital solutions provider than pure play private equity.

2:10 pm Market Check: Benchmark indices continued to trim losses from the morning session, but were off day's high points.

The Sensex was down 68.86 points at 29719.49, while the Nifty was down 15.70 points at 9221.30. The market breadth was recovering, but was still in the negative zone as 1,069 shares advanced against a fall of 1,680 shares, while 136 shares were unchanged.

Adani Ports, Tata Steel and Tech Mahindra were top losers, while Bajaj Auto, Hero MotoCorp, Bharti Infratel and Eicher Motors were top gainers.

1:44 pm HSBC on RBI: The Reserve Bank "killed several birds with one stone" in its policy meet on April 6 by not sucking out excess liquidity with its permanent tool like open market operations (OMO) and CRR hike, an HSBC report says.

According to the global financial services major, the RBI's decision to narrow the policy rate corridor by raising the reverse repo rate and lowering the MSF rate killed several birds with one stone.

"The RBI seized the day on April 6 by not sucking out the excess liquidity via a permanent and blunt tool (like OMO sales or CRR hike). Instead, by outlining its inclination for 'variable reverse repo auctions with a preference for longer term tenors'....," HSBC said in a research note.

1:25 pm R&D capex: Aarti Industries, a specialty and pharmaceuticals chemical company plans to invest Rs 75 crore in their third research and development (R&D) complex in Gujarat.

Chairman and Managing Director Rajendra V Gogri said the capital expenditure planned for FY18 would be similar to that of FY17 which was around Rs 350-400 crore.

With an eye on volume expansion, the company has so far planned its investments, said Gogri. The focus is on value added products in the chain and on standalone basis.

The capex will done through a mix of internal accruals and borrowings, he said.

1:20 pm Buzzing: Shares of Muthoot Capital Services touched 52-week high of Rs 429, rises 17.6 percent intraday as it is going to consider bonus issue.

The company's board meeting is scheduled to be held on April 18 to consider an item regarding the issue of bonus shares to its members.

1:00 pm Market Check: Equity benchmarks trimmed losses in afternoon, with the Nifty getting back above the 9200 level, backed by Infosys, HDFC and ITC. Investors remained cautious ahead of Infosys earnings due tomorrow.

The 30-share BSE Sensex was down 56.42 points at 29,731.93 and the 50-share NSE Nifty fell 15.20 points to 9,221.80, dragged by Reliance Industries and HDFC.

The broader markets were also lower on weak breadth. About two shares declined for every share rising on the BSE.

European markets were slightly higher despite investor concern over a drumbeat of geopolitical news which had fueled the buying of safe-haven assets such as gold. France's CAC, Germany's DAX and Britain's FTSE were up more than 0.5 percent.

12:49 pm Non-bailable warrant against Vijay Mallya: A Delhi court today issued an open ended non-bailable warrant against beleaguered businessman Vijay Mallya in a case of allegedly evading summons in a FERA violation matter.

Chief Metropolitan Magistrate Sumit Dass passed the order after the Enforcement Directorate submitted that non-bailable warrant issued on November 4 last year by the court has not been executed and it needs more time to do so.

12:35 pm Mutual Fund view: Large-cap companies will outperform its midcap counterparts in the medium term. However, over a long-term period midcaps will have an advantage over large-caps, as chances of finding fast-growing emerging companies are more in midcaps, believes Siddharth Bothra, Senior Vice President, Fund Manager, Motilal Oswal Mutual Fund.

In an interview to Moneycontrol, Bothra said that market earnings growth in FY18 could face challenges from supply chain rejig due to GST ?which is seen as impacting short-term demand.

12:10 Market Check: Benchmark indices trimmed some of its losses from the morning fall, amid muted global cues.

The Sensex was down 148.55 points at 29639.80, while the Nifty was down 44.05 points at 9192.95. The market breadth was in the negative region as 784 shares advanced against a decline of 1,823 shares, while 103 shares are unchanged.

Hero MotoCorp, Eicher Motors, HDFC Bank and Ambuja Cements were top gainers, while Tata Steel, Maruti Suzuki, Tech Mahindra and Hindalco were top losers.

11:55 am Management Speak: With the improved outlook of the power sector, most the power generation and power finance companies are in focus. Rural Electrification Corporation (REC), which is a leading public infrastructure finance company has seen improvement in valuations and is currently trading at 52 weeks high.

PV Ramesh, CMD of the company is very confident of the business outlook going forward with major transformation seen in the power sector and with signs of improvement in power consumption.

He said the Ujwal Discom Assurance Yojana (UDAY) scheme is having a positive impact on the health of power distribution (Discoms) companies.

11:25 am Fuel price revision: India's state-owned fuel retailers plan to implement daily revision of fuel price in five cities from May 1 ahead of a nationwide roll out of the scheme, industry sources said.

To begin with, daily revision of fuel prices will be implemented in Puducherry and Vizag in southern India, Udaipur in the West, Jamshedpur in the East and Chandigarh in the North, they said.

State refiners currently revise fuel prices every fortnight to reflect volatility in the currency and global oil markets.

State refiners - Indian Oil Corp , Bharat Petroleum Corp and Hindustan Petroleum Corp - operate 90 percent of the retail outlets in the country.

The three have upto 200 fuel stations in the five cities, the sources said.

No immediate comment was available from the state refiners.

11:05 am Market Check: Equity benchmarks continued to be in the red, dragged by a fall in index heavyweights and weak global cues, with the Nifty breaching 9200-mark.

The Sensex was down 162.96 points at 29625.39, while the Nifty was down 51.40 points at 9185.60. The market breadth was negative as 659 shares advanced against a decline of 1,786 shares, while 77 shares were unchanged.

Tata Steel, Maruti Suzuki, Hindalco and Grasim were the top losers on both indices, while Coal India, Hero MotoCorp and Eicher Motors were in the green.

Reacting negatively to the Supreme Court’s order on compensatory tariff, shares of Tata Power and Adani Power took a hit on the Street on Wednesday.

Adani Power and Tata Power had an intraday fall of 5.7 percent and 1.7 percent, respectively and brokerages too had cautious views on the stocks.

10:52 am Interview: Real Estate Regulatory Authority (RERA) act is expected to be implemented in Maharashtra by May 1, 2017. Rajeev Talwar, Group ED, DLF spoke about how much could the organised players in the space stand to benefit by this act.

He said the industry has taken up RERA very positively.

"Any regulation in any sector is well intentioned. With all due respect, any regulation is better than no regulation but subsequently licensing needs to go otherwise it would be an over-regulated sector", he further added.

10:26 am Merger: The merger of cash-rich oil producer Cairn India into its debt-ridden parent Vedanta has become operational starting Tuesday.

"This merger consolidates Vedanta's position as one of the world's largest diversified natural resources companies, with world-class, low-cost assets in metals and mining and oil and gas," the companies said in a joint statement a joint statement by the two firms said.

After absorbing its cash-rich subsidiary, Vedanta will have a larger pro forma market cap of USD 15.6 billion and higher free float of 49.9 percent.

10:15 am Earnings estimates: Infosys, the country's second largest software services exporter, is expected to show subdued bottomline growth for January-March quarter but the key factor to watch out for would be its guidance for FY18 and whether the company will meet its FY17 dollar revenue guidance or not.

Profit during the quarter is likely to decline 3.7 percent to Rs 3,570 crore and revenue may fall 0.2 percent to Rs 17,235 crore compared with previous quarter, according to average of estimates of analysts polled by CNBC-TV18.

However, dollar revenue may see some pick up against 1.4 percent degrowth in previous quarter due to RBS deal cancellation and weakness in top clients. It may increase 1.3 percent sequentially to USD 2,584 million as analysts expect some forex tailwind of around 30 basis points from cross currencies.

Implied Q4 dollar revenue guidance range is -0.2-1.3 percent and 0.3-1.8 percent in constant currency. Analysts say revenue recognition from GST is the wild card for further growth.

10:00 am Duty free imports: Duty-free import of raw sugar till June is unlikely to bring down retail prices in the near-term, says a report.

Recently government allowed duty-free import of raw sugar to the tune of 0.5 million tonne till June 12.

"Duty-free import is unlikely to have any significant negative impact on the prices or profitability of sugar mills in the near-term. While raw sugar imports are unlikely to negatively impact domestic sugar prices, this may dampen prospects of a further price rise," Icra said in a report.

But import beyond June may lead to pressure on stock position and may lead to a price correction in the forthcoming sugar year, it added.

9:50 am Market Update: Equity benchmarks extended losses, tracking weakness in global peers. Investors also turned cautious ahead of Infosys earnings due on April 13.

The 30-share BSE Sensex was down 125.73 points at 29,662.62 and the 50-share NSE Nifty fell 39.40 points to 9,197.60, dragged by ITC, ICICI Bank, Reliance Industries and HDFC.

The market breadth was negative as about two shares declined for every share rising on the BSE.

Equity benchmarks extended losses, tracking weakness in global peers. Investors also turned cautious ahead of Infosys earnings due on April 13.

The 30-share BSE Sensex was down 125.73 points at 29,662.62 and the 50-share NSE Nifty fell 39.40 points to 9,197.60, dragged by ITC, ICICI Bank, Reliance Industries and HDFC.

The market breadth was negative as about two shares declined for every share rising on the BSE.

9:40 am FII View: Sanjay Mookim of Bank of America Merrill Lynch says on the back of a favourable base and modest recovery in macro, he expects aggregate profit growth for the Sensex to recover in FY18/19 to 12/14 percent.

However, consensus forecasts of 16/20 percent growth for FY18/19 seem too optimistic implying further earnings cuts, he adds.

This coupled with high valuations suggests the current risk-reward is unfavourable, he feels. Mookim reiterated his December 2017 Sensex target of 29,000.

9:33 am Solar power tariff: The levelised solar power tariff has dropped to all time low of Rs 3.15 per unit in an auction of a 250 MW project at Kadapa in Andhra Pradesh.

Earlier in February, the lower capital expenditure and cheaper credit had pulled down solar tariff to a new low of Rs 2.97 per unit for the first year in an auction conducted for 750 MW capacity in Rewa Solar Park in Madhya Pradesh.

However, the levelised tariff for Rewa project worked out to be Rs 3.30 per unit.

Also read - Buy, Sell, Hold: 2 sectors and 6 stocks on analysts' radar today

9:15 am Market Check: Equity benchmarks opened flat on Wednesday after a rally in previous session, as investors turned cautious ahead of Infosys earnings due tomorrow.

The 30-share BSE Sensex was up 0.38 points at 29,788.73 and the 50-share NSE Nifty fell 1.90 points to 9,235.10. About 420 shares advanced against 181 declining shares on the BSE.

Reliance Industries was the biggest gainer among Sensex stocks after the company unveiled new plan for subscribers.

(Disclosure: Reliance Industries, the parent company of Reliance Jio, owns Network 18 and Moneycontrol.com.)

Axis Bank, ONGC, ICICI Bank, Sun Pharma, Eicher Motors, IOC, Ambuja Cements and Yes Bank were other early gainers while Wipro, Bharti Airtel, Tata Motors, Cipla, M&M, HDFC and Tata Motors were losers.

The Indian rupee slipped in the early trade today. The rupee has opened lower by 13 paise at 64.62 per dollar versus 64.49 Tuesday.

Pramit Brahmbhatt of Veracity expects the rupee to trade with a negative bias on the back of negative cues from domestic as well as global equity markets.

He expects the USD-INR pair to trade in a range of 64.20-64.70/dollar.

The dollar languished at a five-month low versus the yen as simmering geopolitical tensions checked risk appetite and put the safe-haven Japanese currency in favor.

Asian markets were mostly lower today, as tensions continue to ratchet up on the Korean Peninsula following a warning from North Korea of a nuclear attack on the US.