KEY HIGHLIGHTS
Closing Bell: Sensex, Nifty Extend Declines On Oil Concerns
Indian equity indices declined for the second-straight session after geopolitical tensions surrounding Saudi Arabian oil supplies triggered a selloff.
The S&P BSE Sensex ended 1.73 percent lower at 36,481.09 and the NSE Nifty 50 fell 1.69 percent to 10,817.60—wiping out this year’s gains. The broader markets represented by the NSE Nifty 500 Index closed 1.72 percent lower.
“There is also a possibility of a flare up due to retaliatory actions by U.S. or Saudi Arabia resulting in further instability and correction in the markets,” said Sudip Bandopadhyay, group chairman, Inditrade Capital, in an interview with BloombergQuint. However, the supply concerns will be temporarily contained by release of U.S. stockpile reserves, he added.
The attack and consequent fear seen in the oil prices does put a big question mark on India’s economic stability.Sudip Bandhopadhyay, Group Chairman, Inditrade Capital
On the technical front, Nifty may touch 10,300 “at least once” before the September’s monthly expiry. That’s according to Jai Bala, technical analyst, cashthechaos.com. "We may be done with selling for the day but not for the next few days," said Bala in an interview to BloombergQuint. One can make use of the 10,600 or 10,700 puts which are available at cheap levels, he said.
The market breadth was tilted in favour of sellers. About 1,264 shares declined and 517 stocks advanced on National Stock Exchange.
All 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Auto Index’s 3.83 percent fall.
Bayer CropScience Falls After Merger With Monsanto India
Shares of Bayer CropScience declined as much as 3.4 percent to Rs 3,180 apiece.
On Monday, German chemical and pharma maker Bayer AG said it has completed the integration of Monsanto's India business with itself.
The National Company Law Tribunal had last week approved the merger of Monsanto India Ltd. with Bayer CropScience. Monsanto India shareholders will now get two equity shares of Bayer CropScience for every three shares they hold in the company.
Monsanto India’s shares fell 2.3 percent intraday Rs 2,092.65 apiece.
Nifty May Touch 10,300 Levels Before Month-End, Says Jai Bala
Nifty may touch 10,300 “at least once” before the September’s monthly expiry. That’s according to Jai Bala, technical analyst, cashthechaos.com.
"We may be done with selling for the day but not for the next few days," said Bala in an interview to BloombergQuint. One can make use of the 10,600 or 10,700 put options which are available at cheap levels, he said.
Attack On Saudi Oil Facilities Have Spooked Markets, Says Inditrade Capital
Geopolitical sensitivities connected to oil supply due to Saudi-Iran tensions does not “augur well” for Indian capital markets. That’s according to Sudip Bandhopadhyay, group chairman, Inditrade Capital.
“There is also a possibility of a flare up due to retaliatory actions by U.S. or Saudi Arabia resulting in further instability and correction in the markets,” said Bandopadhyay in an interview with BloombergQuint. However, the supply concerns will be temporarily contained by release of U.S. stockpile reserves, he added.
The attack and consequent fear seen in the oil prices does put a big question mark on India’s economic stability.Sudip Bandhopadhyay, Group Chairman, Inditrade Capital
Markets Check: Sensex Drops Over 500 Points; Nifty Below 10,900
Indian equity benchmarks were trading at day’s low dragged down by losses in auto manufacturers.
The S&P BSE Sensex fell as much as 1.33 percent to 36,636.80 and the NSE Nifty 50 fell as much as 01.30 percent to 10.862.40. The broader markets represented by the NSE Nifty 500 Index fell as much as 1.17 percent.
Corporate earnings for India Inc. “may not be more than 5 percent” for the current financial year on account of liquidity issues and macro concerns. That’s according to Avinash Gorakshakar, head of research at Joindre Capital. Investors are anticipating stability in Saudi-Iran oil tensions, he said.
Also, on the foreign institution investors still indulging in sell-offs will compound the liquidity problem in the financial system.Avinash Gorakshakar, Head Of Research, Joindre Capital.
The market breadth was tilted in favour of sellers. About 1,157 shares declined and 569 stocks advanced on National Stock Exchange.
All 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty PSU Bank Index’s 2.22 percent fall.
Earnings Growth May Take A Hit For FY20, Says Joindre Capital
Corporate earnings for India Inc. “may not be more than 5 percent” for the current financial year on account of liquidity issues and macro concerns. That’s according to Avinash Gorakshakar, head of research at Joindre Capital.
Investors are anticipating stability in Saudi-Iran oil tensions and a rate cut from FOMC meet. “Also, on the foreign institution investors still indulging in sell-offs will compound the liquidity problem in the financial system,” he said in an interview to BloombergQuint.
SAIL Jumps The Most In Four Months
Shares of the state-owned steelmaker rose as much as 8.6 percent, its biggest intraday jump since May, to Rs 36.20 each.
The central government allowed the state-run producer of the alloy to sell 70 million tonnes of iron ore from its captive mines, according to a tweet by Ministry of Steel.
Trading in the company's call options jumped over four times its 20-day average to 7,702 contracts. Trading in the company's put options totaled 2,507 contracts, over thrice its average for the same period.
Motherson Sumi Gains After Large Trade
Shares of the auto-parts maker rose 2.4 percent intraday to Rs 109.60 apiece.
Around 24.9 lakh shares changed hands in a large trade on National Stock Exchange. Buyers and sellers were not known immediately.
Source: Bloomberg
Automakers Top Losers
Nifty Auto Index was the top loser among the sectoral gauges compiled by National Stock Exchange, down 1.17 percent.
Titan Top Performer On Nifty Index
Shares of the country’s largest branded jewellery maker rose nearly 2.4 percent to Rs 1,176.20 apiece.
Brokerage firm Morgan Stanley upgraded its recommendation on the stock to 'Overweight' from 'Equal-weight'. It also hiked target price to Rs 1,300 from Rs 1,100, indicating a potential upside of 13.2 percent from previous close.
The trading volume was nearly three-times the 20-day average for this time of the day, according to Bloomberg data.
Markets Check: Sensex, Nifty At Day's Low
Indian equity benchmarks were trading at day’s low dragged down by losses in private lenders.
The S&P BSE Sensex fell as much as 0.64 percent to 36,884.10 and the NSE Nifty 50 fell as much as 0.65 percent to 10.935.20. The broader markets represented by the NSE Nifty 500 Index fell as much as 0.54 percent.
Markets to remain volatile in the near-term, said Karvy Stock Broking, in a research note and recommended a fresh entry for Nifty only at 11,000-levels. “Nifty is having a strong resistance around 11,060-11,100 zone. On the flipside, the support is pegged around 10,950 levels followed by the crucial 10,900 zone,” the note said.
The market breadth was tilted in favour of sellers. About 945 shares declined and 705 stocks advanced on National Stock Exchange.
Nine out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Financial Services Index’s 0.87 percent fall. On the flipside, the NSE Nifty FMCG Index was the top sectoral gainer, up 0.28 percent.
Tata Power To Exit South African JV
the Tata Group company plans to sell its entire stake in South African joint venture Cennergi for $106 million, according to an exchange filing.
The power generator’s shares reversed opening gains and declined 1.4 percent intraday to Rs 63.50 each. The stock has declined 18 percent in the last 12 months compared to a 1.7 percent fall in the Sensex.
Edelweiss Jumps After Large Trade
Shares of the financial services firm surged close to 8 percent to Rs 110.50 apiece.
Around 24.2 lakh shares changed hands in a large trade on National Stock Exchange. Buyers and sellers were not known immediately.
Source: Bloomberg
Kaveri Seed Gains On Buyback Plan
Shares of the Andhra Pradesh-based seeds seller rose nearly 3 percent to hit a three-month high of Rs 540.60 apiece.
The board is set to consider share buyback on Sept. 24, according to an exchange notification.
The stock traded 11 percent below the Bloomberg one-year target price.
CG Power Locked In Upper Circuit
Shares of the Mumbai-based power equipment maker rose 5 percent intraday to hit an upper circuit of Rs 15.65 each.
KKR Group acquired a 10 percent stake in the company for Rs 89 crore via open market transactions, according to an exchange filing. Seller for these shares for the company’s publish shareholder Vistara ITCL, which held a stake of 21.63 percent for June quarter.
The stock traded at 5.4 times its estimated earnings per share, Bloomberg data showed.
Opening Bell: Sensex, Nifty Open Lower
Indian equity benchmarks opened lower dragged down by losses in Indiabulls Housing Finance and software exporters.
The S&P BSE Sensex fell as much as 0.28 percent to 37,024.75 and the NSE Nifty 50 fell as much as 0.30 percent to 10.971.55. The broader markets represented by the NSE Nifty 500 Index fell as much as 0.21 percent.
Brokerage firm ICICI Securities expects the 50-stock index to inch towards 11,200 in coming weeks, according to its research report.
“Going ahead, we reiterate our bullish stance. We expect the index to extend the ongoing up move towards our earmarked target of 11,200 in coming weeks, underpinned by strong market breadth and outperformance in cyclical heavy weights, which contribute almost 65 percent weightage of the Nifty,” the research firm said in a note. “In the process, we expect any throwbacks to result into higher base formation wherein we do not expect Nifty to breach 10,850.”
The market breadth was tilted in favour of buyers. About 867 shares advanced and 635 stocks declined on National Stock Exchange.
Six out of 11 sectoral gauges compiled by NSE traded higer, led by the NSE Nifty PSU Bank Index’s 0.89 percent gain. On the flipside, the NSE Nifty Financial Services Index was the only sectoral loser, down 0.49 percent.
F&O Cues
September Futures
- Nifty Sept. futures closed at 11,017 premium of 13.7 points versus 29.6 points.
- Nifty futures open interest up 5 percent, adds 7.6 lakh shares in open interest.
- Bank Nifty Sept. futures closed at 27,889.9, premium of 34.9 points.
- Bank Nifty futures open interest down 5 percent, sheds 78,800 shares in open interest.
Options
- Nifty PCR at 1.16 versus 1.34 (across all series)
Nifty Weekly Expiry: Sept. 19
- Max open interest on call side at 11,100 (27.2 lakh shares).
- Max open interest on put side at 11,000 (19.5 lakh shares).
- open interest addition seen at 11,100C (+9.2 lakh shares), 11,000C (+8.8 lakh shares).
- open interest shedding seen at 11000P (7.3 lakh shares).
Nifty Monthly Expiry: Sept. 26
- Max open interest on call side at 11,200 (31 lakh shares).
- Max open interest on put side at 10,800 (30.2 lakh shares).
Money Market Update: Rupee Opens Lower
The Indian rupee opened lower against the U.S. dollar. The home currency depreciated 0.32 percent to 71.83 against the greenback.
Stocks To Watch: CG Power, State Bank of India, TCS
Stocks To Watch
- KKR Group acquired a 10 percent stake in CG Power & Industrial Solutions for Rs 89 crore via open market transactions. Seller for these shares for the company’s publish shareholder Vistara ITCL, which held a stake of 21.63 percent for June quarter. In March, CG Power said that creditors invoked 6.76 crore pledged equity shares held by one its promoters Avantha Holdings. Vistara ITCL on behalf of debenture holders BOI AXA Credit Risk Fund, KKR India Financial Services and KKR India Debt Opportunities Fund II - had invoked the shares.
- Tata Consultancy Services and General Motors have launched a new partnership with General Motors for Global Vehicle Engineering. The information technology company will acquire GM’s technical center in Bengaluru and partner with General Motors over the next five years.
- DLF has sold nine acres of land to American Express for building its office campus for Rs 288 crore.
- GVK Power & Infra’s transportation arm has terminated concession agreement with NHAI on account of material breach and defaults on the part of the road authority. The company has handed over the toll operations of Deoli Kata Project to NHAI.
- State Bank of India: Staff Unions have called for a strike by Bank Employees from Sept. 26-27. Bank’s work maybe impacted to some extent because of the strike.
- Kaveri Seed: Board to consider share buyback on Sept. 24.
- NBCC signed a memorandum of understanding with Utkal University, Odisha for a construction contract worth Rs 390 crore.
- Glenmark Pharma received orphan drug designation from the U.S. Food and Drug Administration for bispecific antibody for the treatment of multiple myeloma. (Bloomberg News)
- Rico Auto Industries has closed a joint venture with Singapore’s Ultra Fairwood to manufacture different variants of e-vehicles due to lack of clear policies of the Government.
- SMS Pharmaceuticals: U.S. FDA has issued design for manufacturing information request to the company and requested to prove information to demonstrate that company’s Ranitidine API manufacturing process does not contain N-Nitrosodimethylamine impurity.
- Bayer Cropscience: Group has closed Monsanto integration in India. Monsanto products will retain their brand names and become a part of Bayer’s product portfolio. Shareholders of Monsanto India will get two equity shares of Bayer CropScience for every three equity shares held by them.
- NACL: Arbitrator has pronounced the order of Rs 24 crore to the company pertaining to company’s insurance claim to a fire accident at its Srikakulam Plant in 2012 against Oriental Insurance.
- Pharma Stocks: Allergan said proposed generic versions of treatment for irritable bowel syndrome with diarrhea by Aurobindo Pharma, Alkem Labs, Hetero, MSN Laboratories, Sun Pharmaceutical and Zydus Cadila infringe as many as six patents for Viberzi. Allergan is seeking a court order blocking copies until after the patents have expired, and to collect cash compensation if copies are made before then, according to complaint filed Friday in federal court in Wilmington, Delaware. (Bloomberg News).
- Lemon Tree Hotels has signed a license agreement for a 80 room hotel in Durgapur. Hotel is expected to be operational by January 2023.
- Morepen Laboratories to consider raising funds on Sept. 19.
- IL&FS Transportation Networks defaulted in payment of non-convertible debentures interest worth Rs 3.4 crore, which were due on Sept. 2016.
- Wipro has inked a strategic partnership with German based company Industrie 4.0 Maturity Centre for digital solutions.
- Allahabad Bank: Board has approved amalgamation of the Bank into Indian Bank.
- Corporation Bank: Board has given in-principle approval for amalgamation of the Bank into Union Bank of India.
- Aavas Financiers: Board has approved allotment of NCDs up to Rs 345 crore to International Finance Corporation.
- Syndicate Bank: S&P Rating Agency has revised the Long-Term Issuer Credit Rating to Positive from Stable.
- Quess Corp: EGM for approval of shareholders for amalgamation of 4 wholly owned arms into the company to be held on Oct. 10.
- Pidilite Industries has incorporated an arm to carry in business of manufacturing materials used in the construction industry.
Nifty Futures Suggest Tepid Start; Asian Stocks Decline
Good morning!
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.13 percent to 10,992.50 as of 8 a.m.
Asian stocks slipped at the open as investors assessed heightened geopolitical risks in the aftermath of the strike on Saudi Arabia’s crude production that sent oil prices soaring. Benchmarks were modestly lower in Japan, Australia and South Korea. S&P 500 futures were flat after U.S. stocks slipped on Monday.
Oil pulled back slightly after soaring 15 percent the previous session. The dollar maintained gains against peers.
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