Shanghai Shares Extend Sell Off Plunge More Than 4%

China's benchmark Shanghai stock index slumped 4.09 per cent at the open on Tuesday, despite a renewed government vow to support the market following the biggest single-day fall in eight years a day earlier.

The Shanghai Composite Index -- which plunged 8.48 per cent on Monday -- dropped 152.42 points to 3,573.14. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 4.67 per cent, or 100.85 points, to 2,059.24.        

Sensex Likely to Witness Flat Start; Asian Markets Fall

8:45 a.m.
HDFC: India's largest mortgage lender HDFC will be reporting its first quarter numbers later in the day. HDFC's net interest income is expected to come in at Rs 1,985cr compared to Rs 1,744.9 crore during the same period last fiscal. Net profit is expected to come in at Rs 1,375 crore compared to Rs 1,344 crore. Q1 profits will be flat due to no dividend income from HDFC Bank.

8:30 a.m.: Below are the stocks which will be in focus today:

Tech Mahindra: Tech Mahindra reported net profit of Rs 676 crore compared to Rs 472 crore in the previous quarter. Company's dollar revenue grew by 0.5 per cent to $989 million (QoQ). The results were better than what the analysts had anticipated.

Just Dial: Just Dial's net profit jumped 18 per cent to Rs 33.2 crore compared to Rs 28.1 crore during the same period last year. The results were below what the analysts had anticipated.

Power Grid: Power Grid's board has approved investment proposal worth Rs 307.2 crore.

Axis Bank: Axis Bank has signed $200 million bilateral loan with Asian Development Bank.

IFCI: IFCI has cut its benchmark rate from 12.20 per cent to 12 per cent per annum. Rate cut will be effective from July 27.

8:15 a.m.: ONGC, Tata Motors, GAIL, NMDC, Tata Steel, Vedanta, JSW Steel, OBC and Bank of India registered their 52-week low price on Monday.

8:10 a.m.: The foreign institutional investors (FII) sold Indian shares worth Rs 859.9 crore on Monday while the domestic institutional investors bought shares worth Rs 238.9 crore.

In the derivative segment, the FIIs sold index futures worth Rs 1,414 crore and also sold stock futures worth Rs 800 crore.

8:00 a.m.: The Sensex and Nifty are likely to witness a flat opening tracking subdued trading on Nifty on the Singapore Stock Exchange. Nifty futures traded on the Singapore Stock Exchange also known as the SGX Nifty was down 0.07 per cent at 8,350.

Meanwhile, Asian stocks fell to three-week lows on Tuesday as a deepening rout in Chinese stocks erased risk appetite - sending investors flocking to safe-haven instruments such as government bonds and the Japanese yen.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 per cent in early deals, its lowest level since July 9 as mainland Chinese indexes opened 2-5 per cent lower.

China's benchmark Shanghai stock index slumped 4.09 per cent at the open on Tuesday, despite a renewed government vow to support the market following the biggest single-day fall in eight years a day earlier.

Investor sentiment was also cautious ahead of a two-day U.S. Federal Reserve meeting beginning later today where some investors believe the Fed's rate-setting Open Market Committee will make its case for hiking rates as early as September.

Sensex Slumps 450 Points Over P-Note, China Jitters. Don't Panic, Says Government

The Sensex fell more than 450 points on Monday amid jitters over the P-note (participatory note) issue and an 8 per cent plunge in China markets. The government issued a clarification on P-notes, with Revenue Secretary Shaktikanta Das saying there is no need for markets to panic just yet.

The Supreme Court-appointed Special Investigation Team on Friday recommended tighter norms on a popular investment route called P-notes into Indian markets. The recommendations were part of a report from the Supreme Court-appointed panel, detailing the need for greater oversight across a variety of activities to tackle the menace of black money.

Revenue Secretary Shaktikanta Das told NDTV, "At this point of time there is no need to rush to any conclusion. The government has not yet decided. There is no reason for the market to panic." He said the government will consult stakeholders like market regulator Securities and Exchange Board of India (Sebi), the Reserve Bank of India and other market players before deciding on the P-note issue.

Finance Minister Arun Jaitley chipped in, saying that the government will not take any step which will affect the investment climate negatively.

What are P-notes?

P-notes are investment vehicles that offer foreign high net worth individuals, hedge funds and other investors exposure to Indian markets without being registered with Sebi. While norms have been tightened considerably for P-notes over the years, they remain popular among foreign investors because through this investment route, they are able to save time and costs associated with direct registrations with Indian authorities.

Why is the market worried?

Investments through participatory notes (P-notes) into India's capital market were at a whopping Rs 2.75 lakh crore (about $43 billion) at the end of June. This was 11.5 per cent of total foreign institutional investment (FII) into the Indian markets.

But the quantum in percentage terms of FII investments through P-notes has been steadily decreasing over the years. Till a few years ago, P-notes used to account for more than 50 per cent of total FII investment, but their share has fallen over the years after Sebi tightened disclosure norms and other related regulations.

Earlier in 2007, when a crackdown on P-notes had taken place, the Sensex plunged around 10 per cent within minutes of the market opening. Trading had to be halted and then finance minister P Chidambaram had to make statements to calm the markets.

What analysts say

TS Harihar of HRBV Client Solutions says that the SIT's recommendations on tightening P-note norms could make foreign investors jittery.

Prabhat Awasthi, managing director and head of equity at Nomura India, however, says that the P-note issue will be just a "passing phase" for the Indian markets. "Typically these issues have tended to get resolved because the government tends to be sensible about not disrupting the market."

"Besides, many global banks have tightened their KYC norms. So bulk of P-notes, specially coming through issuance done through global investors, will all be genuine guys," he adds.

Revenue Secretary Shaktikanta Das said, "Over the years, market regulator Sebi has tightened the P-note regime. And once India moves to automatic exchange of information with other countries, a lot of tax related information will come. Internationally, the system is correcting itself."

However, Mr Awasthi of Nomura warns that if there are additional norms in the wake of SIT recommendations that make it difficult for foreign investors to invest in Indian markets, it would be a cause of concern.         

Government targeting Rs. 1600 crore from PFC divestment

A stake of 5 per cent will be sold by the government in Power Finance Corporation (PFC) via auction on the stock exchanges, with base price as Rs 254 per share, says PFC in a notice to the stock exchanges.

A stake of 5 per cent will be sold by the government in Power Finance Corporation (PFC) via auction on the stock exchanges, with base price as Rs 254 per share, says PFC in a notice to the stock exchanges.

The move is intended to raise around Rs 1,660 crore. Retail investors will get a reservation of 20 per cent out of the 6.6 crore shares offered, with an allotment at a 5 per cent discount, as per the notice.

Post selling a 5 per cent stake in Rural Electrification Corporation (REC), PFC would be the second company for the government to sell stake in. The government stake would abate to 67.8 per cent in the same after the sale, said reports.

Ten public sector companies have been classified into two groups by the government namely Oil India, Container Corporation, NMDC, MMTC and ITDC forming the first group. The second bloc has NTPC, Engineers India, Bharat Electronics, Nalco and Hindustan Copper. The government has told merchant bankers to bid for managing share sales of all the companies in a particular group, as per reports.

The step is aimed at allaying the chances of share price manipulation since it would keep the market guessing on which issue would come first. Additionally, this would also reduce time taken for each share sale, the reports mention.

Rajesh Exports hits 52-week high

Rajesh Exports has jumped almost 4 percent to register a fresh 52-week high at Rs. 550 after acquiring Valcambi - world's largest Gold refining company headquartered at Switzerland.

Valcambi has processed and sold 945 tons of Gold and 325 tons of Silver on an average per year during the last three financial years which is more than the annual consumption of Gold in India.

The stock is now up 3.2 percent at Rs. 546. The BSE counter has seen trades of around 321,000 shares, as against two-week daily average volume of 577,000 shares.

RIL Shares Volatile After Q1 Results, Brokerages Bullish

Reliance Industries (RIL) shares were volatile on Monday. The oil & gas major announced its first quarter results on Friday after market hours. RIL shares made a low of Rs 1,013.5 and a high of Rs 1,035 in the morning trade compared to its closing price of Rs 1,025.05 on Friday.
  Reliance Industries reported strong earnings for the April-June quarter on Friday driven by better- than-estimated gross refining margins. RIL reported a standalone net profit of Rs 6,318 crore in the first quarter of FY15 compared to Rs 5,649 crore a year earlier, an annual growth of 12 per cent.

Analysts on average were expecting the company, which runs the world's largest refinery complex, to report a net profit of Rs 6,308 crore, according to Thomson Reuters data.

RIL's gross refining margin, or the profit it makes from each barrel of crude oil refined, rose to a six-year high of $10.40 in the June quarter, compared with $8.7 in the same period a year earlier and expectations of $9.5.

Analysts remain positive on RIL. Sushil Choksey, director of Rosy Blue Securities, said that in Q1, the performance of RIL's core business was "brilliant". A GRM of $10 for this year looks achievable, he said.

RIL's operating margin in its petrochemical business grew 390 basis points year-on-year to 11.2 per cent in the June quarter.

Mr Choksey also said that RIL's telecom business is not yet factored into the stock price. RIL has reiterated that it will launch its ambitious 4G telecom venture by the end of this year. Mr Choksey sees RIL a good long-term bet.

TS Harihar of HRBV Client Solutions does not see much upside in RIL shares in the short term after its recent run-up.

RIL shares have rallied 17 per cent in last three months compared to nearly 3 per cent gain in the broader Nifty.

What Brokerages Say on RIL Post Q1

CLSA has maintained a "buy" rating on RIL with a target price of Rs 1,300 per share, indicating a potential upside of 27 per cent from Friday's closing price. CLSA says RIL is trading within 15 per cent of its March 2017 bear-case valuation.

Credit Suisse has maintained "outperform" rating on RIL with a target price of Rs 1,180. The brokerage increased its target price on the stock from Rs 1,040 to Rs 1,180, citing its refining strength.

Citi has maintained "buy" rating on the stock with a target price of Rs 1,176 per share. Any weakness in the stock is an enhanced buying opportunity, said Citi.

As of 10.21 a.m. RIL shares traded flat at Rs 1,025 compared to 1.03 per cent fall in the broader Nifty.

Power Finance Corporation Falls 2% on FPO

Power Finance Corporation shares fell as much as 2 per cent to intraday low of Rs 255.90 on Monday. The government is selling 5 per cent stake in Power Finance Corporation to the public as part of its divestment programme. The follow-on public offer in Power Finance Corporation opened today.
 
The government has set a floor price of Rs 254 in the Power Finance Corporation follow-on offer, a discount of 2.7 per cent from Friday's closing price of Rs 261 on the Bombay Stock Exchange.

The government currently holds 72.8 per cent stake in Power Finance Corporation. At the floor price of Rs 254, the government is expected to mobilise around Rs 1,676 crore. Post the FPO, the government's stake in the company will come down to 67.8 per cent.

The Department of Disinvestment has an Rs 69,500 crore target from PSU disinvestment in the current fiscal.

Power Finance Corporation's offer for sale opened at 9.15 a.m.

As of 11 a.m., shares in PFC traded 0.3 per cent lower at Rs 258.80 apiece, compared to 0.90 per cent fall in the broader Nifty.

Rajesh Exports Buys World's Largest Gold Refining Firm for $400 Million

 Rajesh Exports Ltd said on Monday it bought Valcambi, the world's largest gold refining company, in an all-cash deal worth $400 million (Rs 2,540 crore at $1 = Rs 63.5).

The company was selected after a global search by Valcambi's existing owners led by Newmont Mining Corp, the world's largest gold jewellery maker said.

The deal will help it secure raw material supplies and will add to earnings per share, the company said.

India is the world's biggest consumer of gold, with annual demand hovering around 900 tonnes per year. 

ICICI Bank Shares Slump 6% in 2 Days

Shares of ICICI Bank fell as much as 2.5 per cent on Monday, extending its 2-day slump to over 6 per cent.

ICICI Bank fell nearly 4 per cent on Friday on concerns over its exposure to debt-laden Jaiprakash Group. Rating agency CARE had downgraded Jaiprakash Associates debt.

Rohit Srivastava, fund manager of Sharekhan, says that the outlook for banking stocks remain weak in the near term and they could come under further pressure.

"The banking sector had peaked earlier in January. In market bounce-backs, the rebound in banking stocks has been less and less," he added.

At 9:56 a.m., ICICI Bank was down 2.4 per cent as against a 1 per cent fall in Nifty and 1.56 per cent slump in Bank Nifty.        

Sensex Falls Nearly 300 Points on P-Note Jitters

10:02 a.m.: TS Harihar of HRBV Client Solutions says that SIT's recommendations on tightening P-Note norms could make foreign investors jittery.

9:57 a.m.: The Sensex fell 283 points to 27,830 and the Nifty plunged 85 points to 8,436 on the back of broad-based selling due to fears of regulating investment via participatory notes in stock markets.

9:54 a.m.: Syngene International initial public offer (IPO) opened for subscription on Monday. The company plans to garner around Rs 550 crore at the higher end of the price band of Rs 250 through this offer. The issue will close on Wednesday (July29).

9:47 a.m.: Rohit Srivastava of Sharekhan says that banking stocks look weak and could come under further pressure in the short term.

9:40 a.m.: Indian Overseas Bank shares fall 7.6 per cent to hit 52-week low of Rs 35.10 after the state-run lender reported that its net profit declined 95 per cent year on year to Rs 14.76 crore. The bad loans or gross NPAs of the bank jumped to 9.4 per cent of its total advances.

9:32 a.m.: Reliance Industries witness highly volatile trading post the first quarter results which were announced post the market hours on Friday. The stock touched high of Rs 1,035 and low of Rs 1,013 so far. Meanwhile, brokerages are bullish on the stock as it surprised the Street by posting better than expected first quarter numbers.

9:30 a.m.: Rohit Srivastava of Sharekhan says that Nifty has support at 8,400 and if this level is breached, it could slip to 8,280 levels.

9:25 a.m.: Selling pressure was visible across the board. Banking stocks were among the worst hit in the opening trades. The Bank Nifty fell 1 per cent. Metal, auto, capital goods, FMCG, IT and healthcare stocks were also facing selling pressure.

From the Nifty-50 basket of stocks, 42 stocks were declining while 8 were advancing.

HCL Technologies was the top Nifty loser, down 1.8 per cent at Rs 935. Ambuja Cements, ICICI Bank, Cairn India, Tata Motors, Yes Bank, Idea Cellular, Hindalco, Tata Steel, GAIL India, L&T and IndusInd Bank were also among the losers down over 1 per cent each.

9:20 a.m.: The Sensex fell 200 points to 27,913 and the Nifty was down 60 points at 8,460 in the opening deals on the back of broad-based selling pressure.

9:10 a.m.: Nifty falls 29 points to 8,492 and Sensex up 5 points at 28,117 in the pre-market session.

9:00 a.m.: Rupee opens lower at 64.07 per dollar against Friday's close of 64.03.

8:45 a.m.: Biocon's clinical research arm Syngene's IPO will open today. The price band for the issue is Rs 240-250 and there are 2.2 crore shares on offer.

8:40 a.m.: CLSA has maintained its buy rating on RIL for target price of Rs 1,300 per share.
Company confirmed key downstream expansions will start. The stock is within 15 per cent of the March 2017 bear-case value and is trading near its own historical average valuations.

8:35 a.m.: Reliance Industries will be in focus today after the company reported its first quarter numbers for financial year 2015-16 post the market hours on Friday.

Reliance Industries on Friday reported a consolidated net profit of Rs 6,222 crore in the June quarter, meeting estimates. Sales jumped to Rs 77,130 crore as compared to Rs 67,470 crore in the March quarter.

Analysts polled by NDTV expected RIL a net profit of Rs 6,214 crore on revenues of Rs 67,807 crore.

RIL's gross refining margins (GRM) in the June quarter stood at a six-year high of $10.4/barrel.

8:30 a.m.: Meanwhile, foreign institutional investors purchased shares worth $1.2 billion in July so-far.  While, domestic institutional investors have been subdued with $400 million net outflows in July so-far.

8:20 a.m.: Here's what analysts polled by NDTV expect from the companies reporting their quarterly numbers today:

Tech Mahindra: Tech Mahindra first quarter sales are expected to come in at Rs 6,251 crore compared to Rs 6,116 crore in the previous quarter. Profit is expected to come in at Rs 596 crore versus Rs 472 crore in the previous quarter.

Dollar revenue is expected to decline 0.1 per cent to $983 million. Company had issued a profit warning before Q1 and Visa costs during the quarter will keep margins under check.

Ambuja Cements: Ambuja Cements second quarter profit is expected to come in at Rs 270 crore compared to Rs 408 crore during the same quarter last year. Sales are expected at Rs 2,506 crore versus Rs 2,706 crore last year. EBITDA margins are likely to decline by 4.8 per cent to 14.6 per cent year on year.

Volume growth recovery and outlook will be key for the company.

Just Dial: First quarter sales of Just Dial are expected to come in at Rs 169 crore compared to Rs 156 crore in previous quarter. Net profit is expected at Rs 34.8 crore versus Rs 47.1 crore in the March quarter.

KEC International: KEC International's first quarter net profit is expected to come in at Rs 21.6 crore compared to Rs 11.3 crore. Net sales are expected to jump to 1,867 crore from Rs 1,694 crore in the same period last year.

MRF: MRF's sales are expected to come in at Rs 3,245 crore versus Rs 3,335 crore (YoY). PAT is expected at Rs 300 crore compared to Rs Rs 230 crore.

Torrent Pharma: Torrent Pharma's  Q1 sales are expected to come in at Rs 1,452 crore compared to Rs Rs 1,092cr (YoY). PAT is expected to come in at Rs 280 crore versus Rs 256 crore.

7:45 a.m.: The Sensex and Nifty is likely to open lower in trades on Monday tracking weak global cues. The Nifty futures traded on the Singapore Stock Exchange also known as the SGX Nifty fell 0.6 per cent or 50 points to 8,501.

The Asian markets were trading on a weak note tracking weak Chinese factory data and US home sales numbers.

Japan's Nikkei fell 0.75 per cent, Hong Kong's Hang Seng plunged 1.73 per cent, and China's Shanghai Composite and Shanghai Shenzen 300 indices were down 0.85 per cent each.

The Dow Jones Industrial Average shed 0.92 per cent, while the broad-based S&P 500 dropped 1.07 per cent on Friday.