What Did You Miss
Closing Bell
Indian equity benchmarks posted their biggest drop of this year, while the rupee fell to over 5-month low amid concerns the government is mulling steps to boost the economy that may lead to fiscal deficit widening.
The S&P BSE Sensex fell 1.4 percent to 31,914 and the NSE Nifty 50 declined 1.6 percent to 9,964. For the week, the Sensex slipped 1 percent while the Nifty declined 1.2 percent.
Policy makers are studying economic indicators and appropriate action will be taken at the right time, the Finance Ministry wrote on Twitter Thursday, citing Finance Minister Arun Jaitley’s speech at an event.
Concerns about India’s public finances heightened as the ET Now television channel wrote in Twitter posts that the government was weighing a stimulus package of Rs 40,000 crore.
All 19 sector gauges compiled by the BSE Ltd. declined led by the S&P BSE Realty Index’s 4.3 percent drop.
Rising valuations deterred investors from buying, which triggered a correction, said Dipan Mehta, member of BSE. “I will not be too perturbed as there is enough liquidity on the sidelines willing to be invested.”
Underlying fundamentals are intact and the economy is recovering after GST and demonetisation, which will be reflected in corporate profitability, Deven said.
Realty Stocks Crack
Shares of the real estate companies saw heavy selling pressure. The S&P BSE Realty Index plunged as much as 3.6 percent, the most in over one month, to 2,085.
Market Check
- Nifty trades with a negative bias for the fourth straight session
- Nifty drops below the 10,000 mark in trade
- ICICI Bank, HDFC Bank and L&T top contributors to Nifty fall
- Nifty Metal Index performs the worst amongst the sectors; drops 3.5 percent
- Nifty Realty Index drops over 3 percent; down for third session
- 15 F&O stocks trade with a negative bias
- Nifty PCR cracks from 1.52 to 1.23 on call writing
Hindalco Falls Most In Over One Month
Shares of the metal maker fell as much as 4.5 percent, the most in over one month, to Rs 233. The trading volume was 30 percent more than the 30-day average of 66.4 lakh shares for this time of day.
Dena Bank Surges On Report Of Possible Merger With Vijaya Bank
Shares of the government-owned bank jumped as much as 9 percent, the most in over three months, to Rs 33.6. Vijaya Bank and Dena Bank are in early stage of discussion for a possible merger, ET Now reported citing unidentified people familiar with the matter.
Mid-Cap And Small-Cap Shares Underperform
The broader markets were also facing selling pressure. The S&P BSE MidCap Index fell as much as 1.7 percent, the most in over a month to 15.765 and the S&P BSE SmallCap Index fell 1.6 percent.
Power Lunch
European Shares Decline
#Ask BQ
Market Check
Indian equity benchmarks extended losses on the back of broad-based selling pressure.
- The NSE Nifty 50 Index slipped below 10,000 for first time since September 11.
- The S&P BSE Sensex fell as much as 345 points.
- All sector gauges were trading lower led by the S&P BSE Metal Index's 2.7 percent drop
- Capital goods, banking, oil & gas and industrial indices also fell between 1.5 and 2.5 percent
Yes Bank Falls Most In Over 4 Months
Shares of the private sector lender fell as much as 4.7 percent, the most in over four months, to Rs 359.45.
The bank has cut about 12 percent of its workforce to lower expenses and push technology amid an industrywide lending slump, people familiar with the matter told Bloomberg.
Ashapura Intimates Fashion Hits Record On Product Launch
Shares of the Mumbai-based apparel maker jumped as much as 4.6 percent to record high of Rs 500 after it launched new brand 'TRICCI' for men, boys and toddlers.
“The launch will improve the company's overall revenues and margins over a long term period,” it said in an exchange filing.
Metal Index Falls Most In Over One Month
The S&P BSE Metal Index fell for fourth day in a row, staging its longest losing streak in over two months.
SBI Life IPO Update
The SBI Life Insurance Company's Rs 8,400-crore initial public offer was fully subscribed.
- Overall IPO subscribed 1.16 times
- Portion reserved for qualified institutional buyers was subscribed 3.8 times
- Retail portion subscribed 46 percent
- Portion reserved for high net-worth individuals subscribed 9 percent
ITI Extends Gains To Second Day, Surges 17%
Shares of the Bangalore-based communication equipment maker jumped as much as 17 percent, the most in over 23 years, to Rs 143.5.
Aban Offshore Sees Sudden Spike
Shares of the Chennai-based company jumped as much as 5.6 percent, the most since September 20, to Rs 194.8.
Market Check
- Nifty fell more than 100 points and Sensex declined as much as 0.9 percent
- Nifty was trading only 13 points above 10,000 level
- Nifty mid-cap and small-cap index fall for third day in a row
- All Sectoral Indices trading in the red
NDTV Gains After Report SpiceJet Chairman Singh To Own Majority Stake
Shares of the Delhi-based news broadcaster rose as much as 5.5 percent, the most since September 13, to Rs 53.1.
Ajay Singh, co-founder of SpiceJet has picked up majority stake in the company, The Indian Express newspaper reported, citing sources.
Meanwhile, shares of SpiceJet declined as much as 2.7 percent to Rs 141.65.
The F&O Show
Reliance Home Finance Lists On Stock Exchanges
- Reliance Home Finance, the demerged entity from Reliance Capital got listed at Rs 107.20 on the National Stock Exchange.
Indian Open
Luis Oganes Of JP Morgan To BloombergQuint
- Trend of dollar weakness to continue
- Emerging market fundamentals are getting better
- No dollar impact seen on emerging market currencies
- GDP growth for India to slowdown
- GST has prospects of bringing growth back
- India does not have room for fiscal stimulus
KNR Construction Gains On Order Win
Shares of the Hyderabad-based road construction company jumped as much as 12 percent, the most in over nine months, to record high of Rs 237.
KNR-HES-ACPL joint venture has won an order worth Rs 884.7 crore from the Government of Telangana.
Opening Bell
Indian equity benchmarks declined with the rupee extending its slide to over 5-month low and falling below psychologically important level of 65 against the U.S. dollar.
The S&P BSE Sensex fell 0.6 percent to 32,171 and the NSE Nifty 50 Index declined 0.7 percent to 10,050.
All the sector gauges barring the S&P BSE Healthcare Index were trading lower led by the S&P BSE Metal Index's 1.5 percent decline.
F&O Cues
- Nifty September futures closed with a premium of 16.9 points versus 21 points
- September Nifty futures open interest (OI) down 1 percent & Bank Nifty OI down 2 percent
- India VIX closed flat at 11.6 after surging to 12.18 in the session
- September series highest Call base at 10,200 (OI at 51.6 lakh, down 8 percent )
- September series highest Put base shifts to 9,900 (OI at 54.1) from 10,000
- Call strike 10,100 sees OI addition & unwinding seen for 10,200 & 10,250
- Put strikes 10,000, 10,150, 10,100 & 10,200 sees OI unwinding
IPO Watch
- Prataap Snacks IPO opens today. Issue price of Rs 930 - Rs 938 per share
- SBI Life Insurance IPO day three. Issue subscribed 0.6 times
Listing Today
- Reliance Home Finance, carved out of Anil Ambani-promoted Reliance Capital Ltd., will list on exchanges on Friday.
- The mid-sized housing finance is 51 percent owned by Reliance Capital, after completing demerger from the Ambani’s financial services arm on September 6.
Bulk Deals
A2Z Infra Engineering Ltd.
- IL&FS Financial Services Limited sold 18.34 lakh shares or 1.3 percent stake at Rs 42.13 each
Matrimony.com
- BNP Paribas Arbitrage sold 1.34 lakh shares at Rs 957.47 each
IOL Chemicals and Pharma
- IndiaStar (Mauritius) Ltd sold 14 lakh shares or 2.5 percent stake at an average of Rs 51.1 a piece
- Had sold 11 lakh shares or 2 percent stake on Sept 20
- Stock ended the day down 9.77 percent
GOCL Corporation Ltd
- Promoter Hinduja Power Ltd bought 8 lakh shares or 1.6 percent at Rs 500 each
- Manish Lakhi sold 2.53 lakh shares or 0.5 percent at Rs 500 each. Held 5.13 lakh shares or 1.04 percent stake as per June filing
- Dilipkumar Lakhi sold 4.19 lakh shares or 0.8 percent at Rs 500 each. Held 15.76 lakh shares or 3.18 percent as per June filing
Singer
- Promoter Singer (India) B.V. sold 1.82 lakh shares or 1.7 percent at Rs 261.19 each
Brokerage Radar
BoFA-ML on Godrej Properties
- Initiate Buy with price target of Rs 756; Potential Upside of 26 percent
- Robust sales completion of legacy projects to drive 44 percent EPS CAGR over FY17-20
- 'Godrej' brand + JV model = GPL best placed to gain share
- Return on equity to expand by 907 basis points to 20 percent in FY20
- Ability to add new projects not priced in by consensus
BoFA-ML on Oberoi Realty
- Initiate Neutral with price target of Rs 432
- Revenue recognition of projects launched in FY15-16 to grow EPS at 77 percent CAGR over FY17-19
- Key triggers:- launches of new projects in Mumbai and robust outlook for office/retail
- Expect rental income from office space to witness 33 percent CAGR over FY17-20
BoFA-ML on Prestige Estates
- Initiate Buy with price target of Rs 334
- Rental income to double in 4 years given renewal of existing contracts and upcoming lease assets
- EPS to grow at CAGR of 40 percent over FY17-19; Return on equity to rise to 10 percent in FY19
- Triggers:- foray into affordable housing and potential strategic sale of commercial assets
BoFA-ML on DLF
- Initiate Underperform with price target of Rs 163
- Sales expected to remain weak over FY17-20 as it plans to launch projects only after obtaining occupancy certificate
- This will lead to negative free cash flows of Rs 2,000 crore over FY18-20
- Potential risk of 6 percent equity issuance; Valuations look expensive for 3 percent FY19 return on equity
Morgan Stanley on Future Retail
- Maintain Overweight; Hiked price target to Rs 660 from Rs 500
- Implementation of GST, continuing strong SSSG and private label brands offer good opportunity for margin expansion
- Small-format stores could drive further expansion in valuation multiples
- EPS estimates for FY18, FY19 and 20 hiked by 17 percent, 4 percent and15 percent
Deutsche Bank Markets Research On MRF
- Initiate Buy with price target of Rs 80,000; Potential Upside of 25 percent
- MRF commands a leadership position across key tyre segments
- Expect EPS to grow at CAGR of 16 percent over FY17-20
- Volumes to grow 10 percent per annum over FY17-20
- Expect free cash flow of Rs 2,500 crore over FY17-20
Deutsche Bank Markets Research On Ceat
- Initiate Buy with price target of Rs 2,150; Potential Upside of 22 percent
- Expect revenue and EPS to grow at 13 percent and 16 percent CAGR respectively over FY17-20
- Volumes to grow at CAGR of 9 percent over FY17-20
- Triggers:- strong growth in replacement and market-share gains in OEMs
Deutsche Bank Markets Research On Apollo Tyres
- Maintain Buy; Hiked price target to Rs 325 from Rs 275; Potential Upside 23 percent
- Apollo’s capacity expansion to drive volumes and EPS
- Volumes and EPS to grow at CAGR of 11 percent and 12 percent respectively over FY17-20
- FY18 earnings to be weak due to negative price/raw material mix and capacity ramp-up costs
Motilal Oswal on United Breweries
- Upgrade to Buy from Neutral; Hiked price target to Rs 980 from Rs 875
- Impact of alcohol ban on highway, GST, and alcohol prohibition in a few states not as bad as feared
- GST impact on margins to be 100 basis points versus earlier expectation of 200 basis points in FY18
- Demand appears to be on the cusp of revival
Nomura on GSK Consumer Healthcare
- Maintain Neutral; Cut price target to Rs 5,271 from Rs 5,538
- Cut on the back of slowing rural growth, GST and demonetisation
- Cut FY18-19 earnings estimates by 7-8 percent
- Building in revenue growth of 10.3 percent for FY18
- EDITDA margins to decline by 110 basis points for FY18
Stocks To Watch
- InterGlobe Aviation approves allotment of 3.35 crore shares pursuant to QIP of 2.23 crore shares are fresh issue and 1.11 crore shares are offer for sale
- KNR Construction JV bags order worth Rs 884.47 crore from Government of Telangana
- Cox and Kings owned Meininger Hotels signs agreement with a Swiss developer for the construction of a hotel in Geneva
- De Nora promoter Madhu Khanna sold her entire holding of 20,000 shares or 0.37 percent during last week
- Somany Ceramics acquires controlling stake in Sudha Somany Ceramics. To setup a vitrified tiles manufacturing unit in Andhra Pradesh
- REC to incorporate five project specific SPVs for the development of Intra-state transmission lines in Jharkhand
- A2Z Infra Engineering to issue 8 crore equity shares aggregating to Rs 850 crore (74 percent of the company’s total debt) towards one-time settlement to its lending banks
- Bharti Airtel gets shareholders nod for merger of Telenor with company
- Adani Power shareholders nod to Mundra plant hive-off plan to subsidiary
- Bhagyanagar India and Bhagiradha Chemicals & Industries: Circuit limit changed to 10 percent
- Ravi Uppal to step down as managing director and group CEO of JSPL
- Reliance Capital in focus as Reliance Home Finance will list today
- Infosys delays second quarter earnings announcement to 24 October
- To cut debt, Usha Martin to sell wire ropes business (PTI)
Talking Points
- Rana Kapoor’s Yes Bank cuts 12% of workforce
- China’s credit rating cut as S&P cites risk from debt growth
- SEBI provides clarity on ‘scheme of arrangement’ norms
- NPPA allows Abbott to withdraw ‘absorb’ stent in public interest
- Appellate tribunal allows Cyrus Mistry to challenge Tata Sons
- ItzCash parent Ebix buys third money transfer service business in a month
- Jio Payments Bank aims to time launch with JioPhone deliveries
- Fiscal stimulus has always ended in tears for India, says JPMorgan’s Jahangir Aziz
- Mining’s biggest mystery is what Anil Agarwal plans to do with Anglo
Good Morning!
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.45 percent to 10,095.
Stocks in Asia dropped with U.S. equity-index futures after a report that North Korea could respond to fresh sanctions with a hydrogen bomb in the Pacific. The yen and gold advanced.
Base metals extended their slide as North Korea’s latest invective added to investor jitters after China’s downgrade by a major ratings agency.
Commodities Check
- West Texas Intermediate crude was little changed at $50.61 a barrel.
- Gold rose 0.5 percent to $1,297.01 an ounce.
- Iron ore futures on SGX AsiaClear in Singapore were little changed at $62.80 a metric ton after plunging 6.3 percent on Thursday.
- Copper, aluminum, zinc, nickel and tin all fell on the London Metals Exchange.
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