Nifty hovers around 8150.....!

 Sensex weak; ICICI, Bajaj Auto decline Equity benchmarks continued to reel under selling pressure in noon, dragged by banking & financials and FMCG stocks. Oil, telecom, infra and pharma stocks outperformed. Market Update: Benchmark indices remained under pressure in afternoon trade. The Sensex declined 97.15 points to 26529.31 and the Nifty fell 25.85 points to 8159.95. About 1572 shares advanced against 853 declining shares on the BSE. Auto sales: : Mahindra & 

Mahindra announced its auto sales performance for December 2016 which stood at 36,363 vehicles compared to 37,915 vehicles during December 2015. The passenger vehicles segment (which includes UVs, cars and vans) sold 16,698 vehicles in December 2016 as against 18,197 vehicles during December 2015. The company’s domestic sales stood at 34,310 vehicles during December 2016, as against 34,839 vehicles during December 2015. Exports for December 2016 stood at 2,053 vehicles. For the nine months period ending December 31, 2016, the company sold 3,68,577 vehicles, against 3,53,589 vehicles for the same period last year, representing a growth of 4%. Market Expert: 

The current year is looking tougher for the market, Atul Suri of Rare Enterprises said adding that 7900-8000 will be the most crucial levels for the market. If 7900 breaks, Nifty could test levels of 7500. Full recovery in market can happen only from 8600. “Make or break for this market will be banking index,” Suri said. However, the sector is not showing much buoyancy or leadership in current times. Market trends are determined by the foreign flows and not domestic flows. DIIs will continue to grow via the systematic investment plan (SIP) on back of structural changes.USFDA nod: Drug firm Lupin has received final approval from the US health regulator to market cevimeline hydrochloride capsules, used for treatment of symptoms of dry mouth in patients with Sjogren's syndrome, in the US market. The company has received final approval from the United States Food and Drug Administration (USFDA) to market its cevimeline hydrochloride capsules 30 mg, Lupin said in a filing to BSE today. 

The company's product is a generic version of Daiichi Sankyo Inc's Evoxac capsules, it added. The company further said that it will commence promoting the product immediately. Evoxac capsules had US sales of USD 40.8 million as per IMS MAT September 2016 data, it added. Also read - Buy, sell, hold: How to trade 5 auto & bank stocks?  Market Check Equity benchmarks continued to reel under selling pressure in noon, dragged by banking & 

Financials and FMCG  stocks. Oil, telecom, infra and pharma stocks outperformed. The 30-share BSE Sensex was down 128.24 points at 26498.22 and the 50-share NSE Nifty fell 35.60 points to 8150.20 while the broader markets continued to outperform benchmarks. The BSE Midcap index gained 0.2 percent and Smallcap was up 0.6 percent on positive breadth. About 1499 shares advanced against 809 declining shares on the exchange. HDFC was the biggest loser among Sensex 30 stocks, down 3.5 percent followed by SBI, ICICI Bank and Bajaj Auto with 2 percent loss. However, Reliance Industries, Lupin, Bharti Airtel, Sun Pharma, Dr Reddy's Labs and Maruti continued to support the market.

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Sensex rebounds, Nifty reclaims 8200; 

Auto stocks shine, RIL up Benchmark indices recouped losses in afternoon trade with the Nifty reclaiming 8200, driven by auto and pharma stocks. Drug launch: Natco Pharma has launched a generic Hepatitis C treatment drug in Nepal under the brand name 'Velpanat.' The product is the first generic version of Sofosbuvir 400mg/Velpatasvir 100mg fixed dose combination sold by Gilead Sciences Inc under brand name Epclusa. The Hyderabad-based firm has signed a non-exclusive licensing agreement with Gilead Sciences Inc, to manufacture and sell generic versions of its chronic hepatitis C medicines in 101 developing countries. 

 Rate cut: A day after SBI slashed its rate offering steeply, country's fourth biggest private sector lender Kotak Mahindra Bank today announced a cut of up to 0.45 percent in its lending rates. The bank has cut marginal cost of funds based lending rate by 0.20 to 0.45 percent across tenors, it said in a statement. The one year MCLR, which is used as the benchmark for a bulk of long-term consumer loans, has been reduced by 0.20 percent while the maximum cut of 0.45 percent has been effected in the one month and three month MCLRs. After revision, the one-year MCLR comes down to 9 percent, while the one month and three month MCLRs will be 8.25 percent and 8.40 percent, respectively. 

SBI, PNB fall but analysts say base lending rate to boost growth Market Check Benchmark indices recouped losses in afternoon trade with the Nifty reclaiming 8200, driven by auto and pharma stocks. The 30-share BSE Sensex was up 28.71 points at 26655.17 and the 50-share NSE Nifty gained 13.45 points at 8199.25. About 1800 shares advanced against 778 declining shares on the BSE. Nifty Auto index gained nearly 2 percent as analysts do not expect major impact of demonetisation on earnings, especially after considering December auto sales. Tata Motors, Mahindra & Mahindra and Maruti Suzuki gained 2-3.5 percent. Tata Steel climbed nearly 4 percent followed by Adani Ports while HDFC and SBI retained top position in the selling list, down 3.5 percent and 2 percent, respectively.

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India performing well as compared to other nations:

 The United Nations Economic and Social Survey for Asia and the Pacific-2016 report, released yesterday, said that the Indian economy is projected to expand by 7.6 percent in 2016-17 and grow further to 7.8 percent in 2017-18, mainly on the back of domestic consumption demand aided by steady employment and a relatively low inflation. Economic Affairs Officer in the UN Department of Economic and Social Affairs, Sebastian Vergara told reporters at the launch of the report here that several demographic and structural factors are responsible for India performing in a "relatively very good way" as compared to economic growth in other countries. 

 "The macro-economic policy in recent years has been cautious, especially in the fiscal side. This has been a positive development to provide a good framework to increase the sentiment of consumers," Vergara said. He added that monetary policy has also played an "important role" in reducing inflation in recent years. "That is also playing a positive role for the Indian economy." He however noted that the picture is "mixed" with respect to structural reforms being undertaken in the country. "In some areas, the Indian government has made important efforts and those efforts are starting to pay off in terms of increase in investment but there are some areas where structural reforms are having some slow progress," he said.

 The report projects inflation for India at 5.2 percent for the 2016-17 fiscal and 5.6 percent for the 2017-18 year. The report said that in South and South-West Asia, India's economy is gradually gaining growth momentum "amid making steady, albeit uneven, progress" on policy reforms to attract foreign investment and revive stalled infrastructure projects. "The positive spillovers of stronger growth in India into other major economies in the subregion are, however, small in view of the limited trade and financial interlinkages. Despite a recent increase, the subregion's economic growth rate remains below its potential," it said. For India, "the near-term growth outlook is positive", with the projected growth being 7.6 percent in 2016 and 7.8 percent in 2017, it said.

SBI, PNB fall but analysts 

Say base lending rate to boost growth impact on non-banks financiers is likely to be negative as financiers that were dependent on wholesale/bond market financing, could likely face a squeeze in spreads on incremental volume. Jefferies believes banks are likely to outperform non-banks. Shares of state-owned banks reacted negatively to the surprise benchmark lending rate cut on Sunday. PSU banks including State Bank of India , PNB , Union Bank and IDBI reduced marginal cost of funds based lending rate (MCLR) by up to 90 basis points. Shares of SBI and PNB fell 1-2 percent intraday on Monday. 

SBI has reduced MCLR by 0.9 percent from 8.90 percent to 8 percent for one-year tenure. This is said to be in one of the steepest cuts since the 2008 global economic crisis. Market analysts are cautious but feel the move may boost growth at lower margins. They feel non-banking financial companies (NBFCs) especially those in housing loans may have to cut rates to stay competitive but may benefit from a sharp fall in fund costs. CLSA thinks rate cut may compel other banks to follow suit which could help to lift growth. The cut in lending rates may help to stimulate credit demand at the margin, especially in retail segments such as housing loans, and also help to regain some share from bond markets, it adds. "With another 80-90bps cut in the banking sector’s MCLR, the premium of bank loan rates over bond markets (AAA corporate bonds) could halve to 70-80bps – the lowest since 2014 – and this may help to regain some share," CLSA says in a note. According to CLSA, banks may also lower their term deposit rates if a large portion of new money received during demonetisation is sought to be converted to term deposits. However, this may also bring in a bit of bad news as well. CLSA is worried that sharp rate cuts may be a drag on net interest margins (NIMs) - a 5bps lower NIM in FY18 could impact earnings by 4 percent, with a higher impact on PSU banks. It feels impact will be mitigated as the MCLRs will apply only to incremental loans. 

 Jefferies does not think MCLR cut will be margin dilutive for banks for 1-2 quarters. It says implication on corporate profitability and improvement in Interest Coverage Ratio (ICR) could be material for certain corporates given the extent of MCLR cut and hence non-performing loans (NPL) outlook could turn slightly better for the banks. It agrees that impact on non-banks financiers is likely to be negative as financiers that were dependent on wholesale/bond market financing, could likely face a squeeze in spreads on incremental volume. It believes banks are likely to outperform non-banks. Jefferies retains cautious stance on the sector and remain broadly positive on corporate banks over a medium term perspective given their cross-cycle valuation and outlook. Its top preferences are ICICI Bank, Axis Bank, HDFC Bank within private banks and State Bank of India among PSU banks. At 10:21 hrs State Bank of India was quoting at Rs 245.90, down Rs 3.85, or 1.54 percent, Punjab National Bank was quoting at Rs 114.50, down Rs 1.10, or 0.95 percent on the BSE.