Nifty Eyes 8150; SBI Tanks 5%, Auto & Oil Stocks Lead

Bussing stocks11:55 am Exclusive: Speaking to CNBC-TV18 from the sidelines of Pune Inc Conclave Power Minister Piyush Goyal said demonetization has huge advantages. It will take India to digital banking and make it a cashless society.

He said the government will use the money from demonetization to pump prime economy.

When asked what one should expect from the Union Budget on February 1, Goyal said ‘Good things’. He said: “The Finance Minister over the last three Budgets – July’14, Feb’15 and Feb’16 has consistently worked on a series of measures. He focused on a sustainable framework for India’s development.”

FM Arun Jaitley never tinkered with rates, minor changes but looked at structural improvements, so that India could move towards and economy, which like China sees 2-3 decades of high-level growth, said Goyal.

11:45 am Sameer Nair Group CEO of Balaji Telefilms says that new shows have a much lower margin and hopes to have 10 shows on air by FY17 end.

TV business gross margin is likely to be up 25 percent by this fiscal year, he believes.

The plan now is to get next releases of movies in the next fiscal year, he says, adding that film business will likely book profit in FY18.

Balaji Telefilms will look to air new shows on Sony, Sun TV and Doordarshan.

11:30 am Exclusive: The demonetization move by the government on November 8 seems to have put the buzzing FMCG sector on a pause mode.

Industry sources told CNBC-TV18 that top FMCG companies like HUL , Nestle India , ITC, as well as Dabur are adopting a ‘wait and watch’ mode with regards to new product launches and may defer new launches of high-end, premium products by one-two quarters.

They would look at geography specific launches to minimise the impact of demonetization, say sources, adding that the worst hit categories are luxury chocolates, premium cookies and ice-creams.

Nestle, ITC may defer launches in premium chocolate, confectionery & cookies space, and HUL, Dabur may defer product launches in premium personal care space, say industry sources.

The market has recovered from early weakness but the Nifty is almost nearing 8150. The 50-share index is up 6.80 points at 8121.10 and the Sensex is up 21.34 points at 26337.68. About 1457 shares have advanced, 652 shares declined, and 112 shares are unchanged.

Bharti Airtel, Cipla, Hero MotoCorp, BHEL and Bajaj Auto are top gainers while ICICI Bank, Wipro, TCS and Axis Bank are losers in the Sensex. SBI is down 5 percent intraday on Monday after RBI increased cash reserve ratio (CRR).

India is proving to be immune from the heavy selling in global emerging market debt, as Prime Minister Narendra Modi’s clampdown on undeclared cash has sparked expectations of a rate cut and pushed issuers to take advantage of low yields.

Indian Railways Finance Corporation, NTPC, Vedanta Resources, Exim India and Axis Bank all rushed to print rupee notes last week to access cheaper funding.

“The debt market is very compelling,” said Killol Pandya, head of fixed income at Peerless Funds Management. “Issuers that were otherwise going to banks are approaching the bond market as banks are yet to cut lending rates.”

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Impact on Output Won’t Last Beyond This Quarter, Says Sitharaman

demonetizationThe impact of government’s demonetization move is too early to be determined as has been done by various institutions, believes the Commerce Minister Nirmala Sitharaman.

Speaking to CNBC-TV18, Sitharaman said that stress in the economy has reduced with currencies now reaching people. “Entire output [industry production] speculation, even if impact is there, it won’t be beyond this quarter,” she added.

Unaccounted money is getting extinguished and in turn, the government’s liability too, is getting extinguished.

Replying to opposition, she said that “government would not want to do something like this so blatantly.”

Sitharaman emphasized that the money collected will be used for India’s higher growth. Development of infrastructure and housing for all will continue to be on the government’s agenda.

Speaking over the weakening rupee, she said that currencies all over have taken a beating in last 1-1.5 years. “Volatility is now becoming a new normal,” she said, adding that factors other than currencies are also impacting trade globally.

Below is the verbatim transcript of Nirmala Sitharaman’s interview to Shereen Bhan on CNBC-TV18.

Q: I will come to demonetization in just a bit but let me ask you about the matter which has been creating headline it is not really a call for concern at this point of in time but that has to do with the volatility that we have seen in the rupee. Now if I were to take a look at the emerging market currency basket and the rupee actually hasn’t depreciated very much, the lira, the peso have depreciated significantly more. I know that the commerce ministries view’s has been weaker rupee in fact would be perhaps beneficial not just for export but for the Indian economy, so what is your view currently on the depreciation on the rupee?

A: It was just a rupee that we are talking about, about depreciated value, yes, going by the principle of economics you would say that will help our exports. However, in the last one and a half year, we have seen globally most currencies fluctuate and the rupee’s fluctuation in a way the point that you have by implication meant, has not really been all that much. That has also been something on which many economists are writing and speaking about the fluctuation of currencies.

The rate at which fluctuation have affected one or the other currency in comparison with the rupee, so eventually the sum and substance of this currency story is the volatility is now becoming a new normal. Not just talking about rupee, of any currency globally, depressed demand, contracting economies, traditional markets being attracted, newer markets slow to rise, so that is the picture in which our exports are trying to find their feet.

Q: Given the fact that you are seeing this currency volatility and you believe that this is not going to be the new normal what is the way that you look at the rupee because if I were to look at estimates and I am just quoting to you one estimate that Deutsche Bank for instance has put out saying that the rupee is likely to breach 70 next year and head to 72.50 by December end to 2017 and I said this is just one estimate what would be the comfort zone for the government what would be beyond the comfort zone of the government. What is the picture as far as you are concerned?

A: Currency is one of the factors on which we will be looking at, but in general when you are trying to rave the export performance, rave it, up you are looking not just at the currency but you are looking whole lot of things.

So, it is going to be combination of factors which will have to work on simultaneously to have any plans for keeping the pace of the revival of exports as it were. So, it is not going to be just rupee which is going to pre-occupy me I will also have to talk about many other ways of supporting our exports so that they become competitive and in a market of this kind of a nature.

Q: The Finance Ministry has said that the RBI will intervene as and when it is appropriate. Would 70 for instance make the government feel uncomfortable? Anything beyond 69 makes the government feel uncomfortable? Do you believe that the RBI would need to step in at that point in time?

A: That is the point. Whether it is 69, whether it is 70, all this is happening with good lot of uncertainty other than on behalf of the currency. So, demand itself is not reviving. So, even if rupee depreciates, will it really give it enough of a headway when you are talking about exports?

So that is the reason why I repeat, it is not just the currency, not just the Indian rupee, but it is also the current phase where the floating is significantly palpable, measurable, gaugeable and therefore, of all countries and also at the rate at which economies and their revivals are happening.

Q: Let me ask you about demonetization. Once again, we have seen parliament being adjourned on account of the oppositions demands as the Prime Minister addressed the Rajya Sabha. But keeping the politics aside, if I were to ask you about the economic impact and once again, whether it is Citi, it is Morgan Stanley, bunch of people have put out various kinds of estimates, the former Prime Minister said that it could impact the GDP to the tune of 2 percent. Let me quote what the Centre For Monitoring Indian Economy (CMIE) had said. They say that the cost of demonetization during the 50-day window till December 30 will be about Rs 1.28 lakh crore. Businesses are expected to pay the biggest price for the demonetization exercise and the immediate impact could be around Rs 61,500 crore. This is just one estimate that has been put out by the CMIE. Does the government have any broad estimates that you can share with us because it has been over a fortnight. The problem that people are faced with is that there is a lack of data from the government in terms of what this exercise could actually cost the economy.

A: At this stage, I would think that it would be too early for me to speak about any figures or numbers with which I can say this is what it is going to be on trade. This is what it is going to be in terms of GDP. But what I would certainly, with a responsibility, be able to say is these 10 days between November 10 and November 20 have seen two different developments.

One is where sectors where there is labour intensive production and difficult to admit, but post Jan Dhan mission of the government, we still hear some exporters tell us that a lot of labourers, migrant workers do not have accounts. As a result of which, payments are still being made in cash and they would want more withdrawal facility over and above what government has put as a ceiling for a week. So that production is not going to be affected.

For me, it is a situation where I have to immediately respond just so that payments are not affected, just so that production is not affected, just so that eventually output does not suffer, export does not suffer.

Q: Has there been and you have had a meeting with the Export Promotion Council. The sense that we get when we talk to textile workers from Surat to Tirupur etc is that there is pain at this point in time. Do you have a sense of whether there has been retrenchment and layoffs across these labour intensive sectors in this past fortnight?

A: That is where I am coming to say that even during that interaction the employers went only that far to say one, please ensure that cash is given to us, greater withdrawal right is given to us and in some sectors particularly textile, weaving and carpet weaving and so on they said because we fear we may not have adequate cash in hand to disperse temporarily we might want not to have the production activity because we may not at the end of the day be able to give the payment.

But, then after meeting with them and soon after a few days we also know the inputs that we are getting from various quarters is that the stress has eased out. Currency is reaching them and therefore equally the worry that was there in the mind should not be any longer going to the extent of having to shut down businesses but even if there is a level of stress they would still be able to pay and keep the workers onboard.

So, I don’t think beyond the 10 days about which we are talking there should be any impact on production itself. So, the pain and the stress recognised, taken onboard and with the easing of currency gradually things will have found a way out by the end of this quarter.

Q: So, you are saying it will last at least a quarter the pain that we are talking about?

A: I am not talking about the pain. The entire output speculation that we are engaging in if output is going to be affected at all even if there is any impact on the output I don’t think it will be beyond this quarter and as regards people who have voiced to me about concerns about having more limits more cash is also going in now and therefore whether we increase the limit or not I know by now there is more currency reaching people.

Q: But have you got some sense from the finance ministry on whether we could expect a relaxation as far as the withdrawal limit is concerned?

A: I have kept giving a lot of inputs and many of them have been responded to. We will see what happens on this.

Q: You said that you can’t give us a number at this point in time but is this two percent an exaggeration, is two percent of an impact on gross domestic product (GDP) an overestimation. This is the former Prime Minister who spoke in parliament and consensus at this point in time if I look at all the reports that are coming from various economists, from brokerages etc is between 1 percent and on the extreme of 3 percent. So, where would you think the impact could be?

Q: You said that you can’t give us a number at this point in time but is this two percent an exaggeration, is two percent of an impact on gross domestic product (GDP) an overestimation. This is the former Prime Minister who spoke in parliament and consensus at this point in time if I look at all the reports that are coming from various economists, from brokerages etc is between 1 percent and on the extreme of 3 percent. So, where would you think the impact could be?

Therefore, for us to conclude on the basis of this 13 because progressively the situation is improving. So, factoring in all that and only after that I would think genuinely can anyone give us an impression of what it will be rather than for us at this time risk a number and that is where I had very clearly said former Prime Minister Dr Manmohan Singh who was a Governor once in RBI, Finance Minister, Prime Minister and he speak on the floor of the house. So, I feel it is too early for anyone to conclude on what will be the number.

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Fantastic Friday! Nifty reclaims 8,100 mark, Sensex surges 456 points

nifty-upThe Sensex, Nifty kickstarted the December series on a positive note. Positive global indices, rupee appreciation and also steel makers extended gains after the government imposed anti-dumping duties on some imports lifted the Indian stock markets on Friday.

The key benchmarks traded at high point as traders opted to buy beaten-down but fundamentally strong stocks amid firm global cues. The benchmark indices Sensex and Nifty reclaimed their psychological 26,300 and 8,100 levels respectively.

On the economy front, PM Narendra Modi pushed for the need to move towards a digital economy, emphasizing that people have the right to use their money, but that can also be done digitally.

The BSE Sensex which opened at 25,953.24 points, closed at 26,316, up 456 points or 1.76% from the previous close at 25,860.17 points. The Sensex touched a high of 26,244 points and a low of 25,874.45 points during the intra-day trade so far.

The NSE Nifty closed with a gain of 142 points at 8,107. The NSE Nifty opened at 8,008 hitting a high of 8,122 and low of 7,977.

The NSE market breadth was skewed in favour of the bulls – with 1,344 advances and 293 declines.

Fitch Ratings said Demonetization will have a “negative” impact on growth in the short run but for the full fiscal, the GDP decline would be “relatively moderate”. However, it expects India’s GDP growth to trend higher than China’s in the medium term, adding that it would accelerate next fiscal on the back of reforms and monetary policy easing.

Sentiments remained up-beat from the start of the session with Finance Minister Arun Jaitley saying that the government’s demonetisation move is going to have a positive impact on the economy, including GDP.

The buying was so fierce that not a single sectoral index on the BSE ended with losses; IT, pharma, banking, finance, energy, media and metal stocks ended with the top gainers. Even the mid-cap and the small-cap stocks participated in today’s rally.

Among the 50-stocks of Nifty, Tech Mahindra, TCS, Infosys, HCL Tech and Sun Pharma were among the gainers on NSE, whereas ACC, Bharti Infratel, Bajaj Auto, Eicher Motors and Bharti Airtel were among the losers today.

The India VIX (Volatility) index was up 2.63% at 17.6125.

The rupee was trading marginally up by 32 paise at 68.41 per US dollar. Gold was trading at Rs 28,576 per per 10 gms and silver was trading at Rs 40,225 per kg.

On the global front, Asian stocks closed higher. The Shanghai Composite index and Hong Kong’s Hang Seng index closed higher by 1%. Nikkei 225 ended in green.

European stocks were trading mostly in red due to lack of cues from the U.S. Markets. CAC 40 is trading in green, while FTSE 100 and DAX are trading lower.

J Kumar Infraprojects rallied 9.6% on the BSE.  J Kumar Infraprojects, on behalf of the J. Kumar Infra – CRTG JV, signed an agreement with the Delhi Metro Rail Corporation (DMRC) worth of Rs 1,344.9 crore on Thursday, 24 November 2016, for Phase-2 of the Mumbai metro project and other projects worth Rs 449.19 crore.

Bata India soare 2.3%. The company has posted a net profit of Rs 35 crore for the quarter ended September 30, 2016 as compared to Rs 54 crore for the quarter ended September 30, 2015.

Talwalkars Better Value Fitness climbed 5% after the management has decided to demerge gym business, thereby transferring gym business of TBVFL to TLL, in the interest of maximising overall shareholder value.

LT Foods gained 1%. The company has inked a 51:49 joint venture with Kameda Seika, to sell rice-based snacks in India.

A total of 15 stocks registered a fresh 52-week high in trades today, whereas 13 stocks touched a new 52-week low on the NSE.

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Sensex Above 26000, Up Over 250pts; ICICI, L&T, SBI Underperform

sensex-26000-update-by-capitalheight12:59 pm Market Update: Equity benchmarks extended rally with the Sensex rising 287.04 points or 1.11 percent to 26147.21 and the Nifty climbing 102.45 points or 1.29 percent to 8067.95.

About 1845 shares advanced against 528 declining shares on the BSE.

12:50 pm Interview: Suven Life reported a flat set of numbers for the second quarter ended September 30. Profits were up 5.3 percent to Rs 26.5 crore versus Rs 25.2 crore reported same quarter last fiscal but revenues were down 1.2 percent at Rs 11.5 crore versus Rs 117 crore year on year (YoY).

Defending the revenue numbers, Venkat Jasti, Chairman and CEO, Suven Life Sciences told CNBC-TV18 that their numbers should not be compared quarter on quarter because the CRAMS is a lumpy business. Actually, the revenues were up, he said.

The profits for the quarter were up because of the product mix, said Jasti.

Jasti is confident of maintaining EBITDA margins at 32 percent or more. EBITDA margins for the quarter stood at 31.9 percent versus 26.7 percent YoY. margins,   product mix

He is also confident of 10-15 percent topline growth in FY17 and FY18.

12:35 pm Buzzing: RS Software shares surged more than 8 percent intraday after a media report indicated that the company has cancelled a restrictive deal with its key client Visa Inc.

“RS Software (India), an early bird in the payment solutions business, is parting ways with its key client, US financial services giant Visa Inc, from which it derived more than 90 percent of its revenue for years,” a media report said.

Chairman Raj Jain, in an interview to a media company said after 10 years of growth, RS Software is scaling back its engagement with Visa to tap into “multi-billion dollar opportunities” emerging in the digital payments solutions business.

12:20 pm PM on demonetization: Attacking political rivals and those opposed to the demonetization scheme, Prime Minister Narendra Modi today lashed out at them saying they would have lavished praise on him if he had given them time before announcing the move.

“Some people are criticising saying the government did not make ample preparation. I think that is not the issue that the government did not make ample preparation. I think the pain of such people is that the government did not give a chance to make any preparation,” he said at a book launch function .

“If these people had got 72 hours to make their preparation then they would have lavished praise that there is no one like Modi,” he stressed.

The Prime Minister’s remarks come amid a standoff in Parliament on the issue with the opposition stepping up their attack on the government. Former Prime Minister Manmohan Singh had yesterday said the step was “a case of organised loot and legalised plunder” and reflected a “monumental management failure”.

12:00 pm Market Check
The NSE Nifty started off December series on a strong note, rising more than 1 percent on short covering as well as value buying after losing more than 7 percent in November so far.

The 30-share BSE Sensex gained 276.55 points or 1.07 percent at 26136.72 and the 50-share NSE Nifty rose 102.25 points or 1.28 percent to 8067.75. The broader markets also traded in line with benchmarks as the BSE Midcap and Smallcap indices surged 1-1.5 percent.

Even the market breadth was strong as about 1777 shares advanced against 501 declining shares on the BSE.

Technology stocks were the biggest gainers, may be on account of recent rupee fall. Nifty IT index jumped over 4 percent as Infosys, Tech Mahindra, HCL Technologies and TCS gained more than 4 percent.

However, ICICI Bank, SBI, L&T, Reliance Industries and Bajaj Auto under performed, down 0.3-0.9 percent.

Asia markets were mostly positive today, amid a lack of cues from US markets, which were shut Thursday for the Thanksgiving holiday.

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Weak Rupee Drags Market, Traders Cautious Ahead of F&O Expiry

bear_nse_bse_sensex_down_chart_board_graph_red-traders_markets_sensex2:44 pm Interview: Biotech entrepreneur Kiran Mazumdar-Shaw has said the demonetization of high-value currency notes is an opportunity to leapfrog into a digital cashless economy, even as she called for a effective monitoring to prevent accumulation of fresh black money.

The CMD of Biocon Ltd, which was rated among the world’s top ten employers in the biotechnology industry by an international magazine recently, said she is confident that the demonetized currency would be replaced by the new notes reasonably soon

“The objectives of flushing out counterfeit currency, illicit funding of businesses and illicit activities including extremism and terrorism and ‘havala’ transactions will certainly be achieved,” Mazumdar-Shaw told PTI.

Demonetization would also serve to be a deterrent to corruption in the short-term. “However, what remains to be seen is for how long can we stave off the re-emergence of black money,” she said.

2:30 pm Demonetization risks: Economic risks faced by banks in India have increased amid deteriorating credit profile of corporate, while demonetization could hurt lenders’ asset quality in the short-term, S&P Global Ratings said today.

It said while the demonetization of 500 and 1,000 rupee notes would be positive in long-term, it will have a transitory impact on growth in the short-term and could hurt banks’ asset quality.

“Bank deposits would benefit due to demonetization, though not all inflows will remain in the banking system on a permanent basis,” S&P said in a report titled ‘Banking Industry Country Risk Assessment: India’.

“The economic risks facing financial institutions in India have increased amid structural and cyclical challenges that Indian companies face,” it added.

Economic risks faced by banks in India have increased amid deteriorating credit profile of corporate, while demonetization could hurt lenders’ asset quality in the short-term, S&P Global Ratings said today.

It said while the demonetization of 500 and 1,000 rupee notes would be positive in long-term, it will have a transitory impact on growth in the short-term and could hurt banks’ asset quality.

Bank deposits would benefit due to demonetization, though not all inflows will remain in the banking system on a permanent basis,” S&P said in a report titled ‘Banking Industry Country Risk Assessment: India’.

“The economic risks facing financial institutions in India have increased amid structural and cyclical challenges that Indian companies face,” it added.

Weak Indian currency is dragging the market but the Nifty is defending crucial 7950. Traders are also cautious ahead of November Futures and Options (F&O) expiry. The Sensex is down 160.84 points or 0.6 percent at 25890.97, and the Nifty down 53.35 points or 0.7 percent at 7979.95. About 1141 shares have advanced, 1246 shares declined, and 171 shares are unchanged.

TCS , Infosys, Bajaj Auto, Wipro and SBI are gainers while Tata Motors, NTPC, ICICI Bank, Axis Bank and GAIL are losers.

As weak rupee spreads panic on street, Khoon Goh of ANZ Research said rupee may depreciate another 2-4 percent. However, he does not expect it to weaken much further because the RBI has plenty of forex reserves.

NS Venkatesh, ED, Lakshmi Vilas Bank said the fundamentals of rupee are still intact and as equity market stabilises, rupee too will follow suit.

Bhaskar Panda of HDFC Bank does not see the rupee going past 69.25 to the dollar anytime soon because according to him the slide is overdone. He also does not expect the dollar index to rise further than 104 because it could impact American exports and jeopardise their Make in America programme.

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After Rs. 500 Note Launch, Withdrawal Limits At ATMs, Banks Raised: 10 Updates

bank-atm-currency-ban_650x400_51479052192NEW DELHI:  Within hours of launching the new Rs. 500 notes on Sunday, the government increased the daily limit of withdrawal from ATMs from Rs. 2000 to Rs. 2500 and exchange limit from Rs. 4,000 to Rs. 4,500. Prime Minister Narendra Modi held a meeting to review the withdrawal of Rs. 500 and Rs. 1000 notes that was announced on Tuesday in a bid to root out black money. Union minister Arun Jaitley and the Deputy Governor of the Reserve Bank of India attended the meeting.

Here are the latest developments:
1.The finance ministry has asked the banks to remove the daily withdrawal limit of Rs.10,000 and increase the weekly withdrawal limit of Rs. 20,000 to Rs. 24,000, so that the entire amount can be withdrawn at one time by cheque. The banks have also been advised to make arrangements for separate queues for senior citizens and people with disabilities.
2. After Sunday’s late night cabinet meeting – headed by PM Modi – the limit for exempted transactions was extended till November 24 midnight. Old Rs. 500 and 1,000 notes will be accepted at government hospitals, petrol pumps and toll booths till November 24, Economic Affairs Secretary Shaktikanta Das said.
3.PM Modi on Sunday said the nation had elected him to fight corruption and he was ready to do even though he faced a threat to his life. “I know the forces up against me, they may not let me live… they may ruin me because their loot of 70 years is in trouble, but am prepared,” he said at a function in Goa.
4.The Congress said PM Modi had insulted the people who are standing in queues. “Wage earners, farmers, weavers, construction workers… PM has said all these millions of Indians are scamsters. The PM should give up theatrics and think hard how to improve the country’s direction,” said party spokesperson Anand Sharma.
5.The Reserve Bank of India has urged people to not withdraw cash repeatedly and hoard it. Much to people’s dismay, only 60 per cent of ATMs got currency feed five days after PM Modi announced the surprise scrapping of notes. Of the 2 lakh ATMs across the nation, 1.2 lakh are running but they are out of cash within a few hours.
6.Bigger crowds were witnessed outside banks and ATMs this morning since most people are off work; the rush was also, in part, due to banks being closed on Monday in some parts of the country. In Delhi, to manage anxious crowds, 3,400 paramilitary personnel and Delhi Police along with 200 quick reaction teams were deployed at ATMs and banks.
7.Delhi chief minister Arvind Kejriwal, who has criticised the government’s move to ban the high denomination currency, told NDTV that those standing in long lines have no black money. The government, he said, had alerted its own people.
8.Bengal Chief Minister Mamata Banerjee called up arch rival CPM’s Sitaram Yechury, asking him to join hands in the fight the governemnt’s move and call on President Pranab Mukherjee together. According to sources, Mr Yechury said he would revert in a couple of days.
9.The nation’s largest bank, the State Bank of India, got deposits worth Rs. 75945 crore by Sunday evening.
10.The government had launched the new Rs. 2000 notes last week. But neither that, nor the Rs. 500 notes can be stacked in ATM machines due to a mismatch in tray size. “Recalibration of ATMs will be completed within two weeks,” Union finance minister Arun Jaitley had said on Saturday.The government has asked people to exchange old 500 and 1,000 rupees notes by December 30.

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