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Last Updated : Aug 21, 2015 11:13 AM IST | Source: Moneycontrol.com

Nifty hits 2-month low; Infosys, TCS, Lupin outperform

Infosys and TCS bucked the trend, rising over a percent. Lupin also gained 0.7 percent as Bank of America Merrill Lynch raised target price to Rs 2020 from 1800 and also upped earnings per share FY16/17/18 estimates by 2 percent/2 percent/3 percent, to factor in higher INR/USD (Rs 64.5/Rs 64/Rs 64 against earlier estimates of Rs 62 each).


Moneycontrol Bureau

10:50 am Rupee weakens further:
The Indian rupee is moving towards 66 a dollar level, down 31 paise to 65.85 against dollar in morning trade.

The Sensex crashed 419.40 points or 1.52 percent to 27188.42 and the Nifty plunged 128.45 points or 1.53 percent to 8244.30. More than four shares declined for every share advancing on the Bombay Stock Exchange.

10:40 am Stocks in News:
Monnet Ispat is in discussion with Bhushan Steel to sell its entire 35 percent stake in Orissa Sponge Iron & Steel Ltd (OSISL), which owns iron ore reserves in the Odisha, Monnet's Group CFO Ajay Bhat told CNBC-TV18.

While refusing to divulge valuation details, Bhat said the stake sale would help the company cut its debt.

Alongside, Monnet has also finalized sale of its power business to JSW Steel, a deal that is expected to close in December and will take off that business' Rs 4,000-crore liability off Monnet's books, Bhat said.

Monnet's net debt, after the sale of the power business stands at Rs 7,000 crore, which will further reduce following stake sale in the Odisha mine company, he added.

Monnet is in talks with lenders to restructure part of its debt and does not foresee an immediate payments crisis, according to the CFO.

10:30 am Market Expert:
A mix of fundamental and technical factors are dragging the market down, Ajay Srivastava, CEO, Dimensions Consulting tells CNBC-TV18.

"It is not as though the fundamentals have given away overnight; it is also that the structure of the market has changed," he says.

"Lots of margin calls, lots of people getting out, lots of people failing to meet their obligations on the midcap stories that they have bought into," he says.

He says the perceived insularity of India has been tested over the last three days and found wanting. He says there are problems in the global economy and India cannot remain isolated from it.

"Indian investors must accept the fact that we are part of the global markets, no matter what the politicians tell you, what the central bank tells you," he says.

He says it is still not time to bottomfish and sees the Nifty falling below 8000. According to Srivastava, a GDP growth of 6-7 percent and a price earnings multiple of 30-40 times is just not sustainable.

10:20 Buzzing:
Shares of Tata Communications outperformed the equity market, rising 3.5 percent intraday as two big multinational companies are in race to buy the telecommunications and internet service provider's data centre business.


"Search engine giant Google Inc and ecommerce behemoth Amazon are among those in talks with the Tata Group to buy the data centre business of Tata Communications in a deal expected to fetch about Rs 4,261.4 crore to Rs 4,589.2 crore ($650-700 million)," said a media report.


10:10 am Rupee forecast: Nowithstanding the rupee's relative outperformance, the slide will conitnue a bit more in tandom with its emerging market peers, says Ju Wang of HSBC. She forecasts year-end target for rupee at 66 and can go all the way down to 67 next year.

On Friday, the Indian currency hit a fresh two-year low of 65.73 per dollar, down 19 paise compared to previous day's closing value of 65.54 per dollar.

Currencies in emerging market started correcting after China devalued its currency yuan unleasing some sort of currency war.

The rupee corrected the minimum compared to other emerging market currencies, down 4 percent against US dollar. Dollar Index gained 0.6 percent.

Brazilian Real depreciated 30 percent and Turkish Lira dropped 25.2 percent against dollar.

10:00 am Market Check

Close

The market remained under pressure, though it showed some bit of recovery in morning trade. The 30-share BSE Sensex fell 348.88 points or 1.26 percent to 27258.94 and the Nifty dropped 106.20 points or 1.27 percent to 8266.55, the lowest level in last two-month.


The broader markets too slipped in-line with benchmarks. The BSE Midcap and Smallcap indices declined 1.3 percent each. Nearly four shares declined for every share advancing on the Bombay Exchange.


Infosys and TCS bucked the trend, rising over a percent. Lupin also gained 0.7 percent as Bank of America Merrill Lynch raised target price to Rs 2020 from 1800 and also upped earnings per share FY16/17/18 estimates by 2 percent/2 percent/3 percent, to factor in higher INR/USD (Rs 64.5/Rs 64/Rs 64 against earlier estimates of Rs 62 each).


Shares of ICICI Bank, HDFC, Larsen & Toubro, SBI, Tata Motors, ITC, Axis Bank, Reliance Industries and Bharti Airtel were the biggest contributors to Sensex's fall, down 1-4 percent.


Responsive Industries (down 7 percent), Godrej Properties (down 5 percent), Page Industries (down 5 percent), Gujarat Pipavav (down 5 percent) and PC Jeweller (down 4 percent) were the big losers in the midcap space. Other notable laggards included Sintex Industries (down 4 percent), Bombay Dyeing (down 4 percent), BEML (down 4 percent), Central Bank (down 4 percent) and Allahabad Bank (down 4 percent).


The Indian rupee was quoting at 65.72 to the dollar, down 0.18 paise over its previous close.


In other asset classes, gold was trading at USD 1163.2/ounce, up 1 percent over its previous close. Brent crude was trading at USD 46.12/barrel, down 1.07 percent and Nymex crude declined 1.21 percent to USD 40.82/barrel.



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First Published on Aug 21, 2015 10:00 am
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