Sensex, Nifty Fall For Second Day As Rate Sensitives Sell-Off
U.S. shares rebound on an unexpected pickup in services sector activity, oil prices gain
Closing Bell
Indian shares dropped for a second day as banks, autos and drugmakers sold off while oil and gas stocks bucked the market trend.
The S&P BSE Sensex declined 0.4 percent to 28,106 while the NSE Nifty fell 0.4 percent as well to 8,709. The market breadth was skewed in favour of the sellers at 939 declines, 552 advances and 49 stocks remaining unchanged on the NSE.
Market slipped on profit taking as investors are bit nervous due to the ECB minutes later today. They are looking to get insights on any trajectory of taper in stimulus. U.S. payroll and employment data are lined up for tomorrow, which will shape up the expectation for Fed rate hike scenario this year. Additionally, the focus will shift to quarter earnings, which start next week.Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services
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Commodity Prices Are Headed Higher, Says Anil Agarwal
“No Plans Of Listing Bajaj Life Insurance Anytime Soon”
Sudden SellOff
Indian equity benchmarks dropped to their day’s lows as a sudden bout of selling engulfed shares of rate sensitives like banks, autos and real estate.
Top Sensex Losers
- M&M (-2.1%)
- ICICI Bank (-1.8%)
- Axis Bank (-1.7%)
- NTPC (-1.6%)
- ITC (-1.6%)
- Dr. Reddy’s Labs (-1.4%)
- SBI (-1.2%)
Jindal Steel Falls After Default on Debenture Interest Payments
The steelmaker slid as much as 5.3 percent to Rs 79 after saying it didn’t pay interest due on September 30 on non-convertible debentures, a sign that cash flows are falling short of liabilities. (More details HERE)
Goodyear Soars on Goldman Sachs Boost
Shares of the tyre maker rose as much as 18 percent after Goldman Sachs bought a stake in the company via an open market purchase.
According to BSE data, on Wednesday, the Goldman Sachs India Fund bought 123,895 shares of Goodyear India in a bulk deal. The stock is among the top performers on the S&P BSE SmallCap index.
The stock is currently trading 14.6 percent higher at Rs 892 apiece.
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S&P BSE Oil & Gas Index Hits New 52-Week High
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“Oil marketing companies have moved up because of healthy refining margins and things will remain good for them until oil prices move up to $60 a barrel,” Satish Mishra, analyst at HDFC Securities told Bloomberg News.
LIC Housing Finance Gets Thumbs-Up From Jefferies
Shares of the housing finance firm rose as much as 1.7 percent to Rs 602. The stock is up four out of the last five trading sessions.
Brokerage house Jefferies has initiated coverage on the stock with a “Buy” rating. It has a target price of Rs 698 on the stock.
We believe net interest margins at LIC HF should expand as falling bond yields should reduce borrowing costs. Loan growth should be steady as structural drivers remain in place and as core home loan growth improves due to recent government measures.Jefferies Research Note
Jefferies expects FY16-18E earnings CAGR of 19 percent and ROE to exceed 20 percent.
Yes Bank Drops On Report Of SEBI Probe Findings
Shares of the private sector lender dropped as much as 3.9 percent, the most since September 16, after Mint reported that market regulator SEBI's initial probe found Yes Bank violated norms in its attempt to raise $1 billion through QIP.
In a clarification to the BSE, Yes Bank said it does not comment on such speculative stories.It also denied receiving any correspondence from the market regulator.
The Bank is not privy to any such communication as being referred to in the Mint article.Yes Bank clarification to BSE
RBL Bank Gains After Citi Labels ‘Buy’
Shares of the Kolhapur-based private lender rose as much as 1.1 percent to Rs 299, making it among the few banks that are gaining today.
Foreign broking and financial services firm Citi initiated coverage on the stock with a “Buy” rating and a target price of Rs 350.
RBL is a new ‘old’ bank that has re-invented itself over the past 6 years, and while small (Rs 21,000 crore loans), is now ready for take-off.Citi Research Note.
Opening Bell
Indian shares climbed higher after a rebound in U.S. equities. Energy producers gained while lenders continued to drag. The S&P BSE Sensex gained 0.3 percent to 28,324 while the NSE Nifty advanced 0.3 percent as well to 8,768.
The market breadth was also encouraging at 1,013 advances, 408 declines and 413 stocks remaining unchanged on the NSE.
Movers & Shakers: Jaiprakash Associates, NDMC, Indian Oil, And More
Money Market Heads Up
Stocks to Watch
- Indian Oil Corporation: Fixes October 19, 2016, as a record date for issue of bonus shares in the ratio of 1:1.
- IIFL Holdings: Unit India Infoline Finance to consider plans to raise Rs 500 crore through NCDs
- NMDC: Prices of lump iron ore has been fixed at Rs 2,100 per wet metric tonne and that of fines at Rs 1,760 per wet metric tonnes.
- Indian Overseas Bank: Cuts 1-year MCLR to 9.5 percent from 9.55 percent
- Jaiprakash Power: To consider selling stakes in one or more units, progress on debt reduction
- Jindal Steel: Misses interest payment on debentures
- McLeod Russel: Merrill Lynch buys 572,500 shares (NSE)
- Suzlon: Shrugs off rating suspension on $1.2 billion bank debt
- Yes Bank: SEBI’s initial probe finds bank violated norm in its attempt to raise $1 billion through QIP. Adjudication proceeding to be launched against lender. (Mint)
- Monnet Ispat: Former group CFO under insider trading scanner. (Financial Express)
- Bharti Airtel: Starts offering 1 GB data at Rs 25. (Financial Express)
- Grasim: Trades ex stock split
For a complete list of stocks to watch, click HERE
Analyst Ratings/Research
- LIC Housing: Rated new buy at Jefferies
- Asian Paints: Cut to sell from hold at Maybank Kim Eng
- Britannia Industries: Cut to hold at Axis Capital
IPO Watch
- Endurance Technologies: IPO subscribed 12 percent on day 1. Offer to close October 7.
- Hindustan Aeronautics: Planned IPO values company at Rs 20,000 crore (Financial Express)
Talking Points
- Pakistan wants talks to resolve disputes with India: PM Sharif
- India to discuss LNG, oil imports from Russia during Putin visit
- India to buy land for Westinghouse Nuclear Project
- Sugar rally, normal monsoon rain seen trimming India imports
* Sugar may move into surplus of 1.2m tons in 2017-18: ADMISI
- India sets up technical panel to study Cauvery Basin issue
- Government rules out wheat imports on adequate supplies
- Softbank in talks to invest in Snapdeal digital payment unit (Economic Times)
- Global funds buy Rs 243 crore of local stocks; domestic funds sell Rs 350 crore yesterday: Provisional data
Good Morning!
The Nifty Futures on the Singapore Exchange, an early indicator of Nifty performance in India, climbed 0.1 percent to 8,785.
U.S. shared snapped a two-day losing streak courtesy an unexpected pickup in services sector activity and rising oil prices. The ISM's purchasing managers index for the service sector, the key engine of the American economy, jumped to 57.1, the highest level in nearly a year, after slumping to 51.4 in August.
The odds for a Fed rate hike in December rose to 62 percent, according to futures rates tracked by Bloomberg.
Crude oil declined 0.6 percent to $49.53 a barrel in New York, after advancing 2.3 percent on Wednesday to its highest close in more than three months. U.S. stockpiles fell below 500 million barrels last week for the first time since January, official data show.
This morning Asian stocks rose as the yen’s slide to a one-month low boosted Japanese exporters and energy companies rallied following a pickup in oil prices.
The MSCI Asia Pacific Index climbed to a one-week high, while the Bloomberg Dollar Spot Index held near a two-week high.