A Stock Broker Talks on a Telephone While Working on his Computer. (Photographer: Chris Ratcliffe/Bloomberg)

Sensex, Nifty End At 4-Month Low As Drugmakers Selloff And Investors Fret Over U.S. Election

Good Morning!

The Nifty Futures on the Singapore Exchange, an early indicator of Nifty’s performance in India, declined 0.3 percent to 8,492.

Asian stocks extended their losses, tracking trade in the U.S. markets, as crude oil held near a one-month low and investors shunned riskier assets ahead of next week’s U.S. presidential election.

The MSCI Asia Pacific Index fell to a seven-week low after an eighth day of losses for the S&P 500 Index, the U.S. benchmark’s longest losing streak since 2008. The pound traded near a four-week high after the Bank of England said it’s no longer expecting to cut interest rates this year and a court ruled the U.K. must hold a vote in Parliament before starting the countdown to Brexit.

The yen, gold and sovereign bonds were all headed for their biggest weekly gains since at least July, spurred by demand for safe havens.

Talking Points

  • GST Council sets rates, four main tax slabs ranging from 5 percent to 28 percent (Full report HERE)

Want to read more GST stuff? Here goes:

*A Common Man-Friendly GST Rate Structure

*GST Compensation To States Not To Squeeze Government Finances: Finance Secretary

*Compensation Cess A Step Backward From True GST Structure: Rajeev Dimri

*GST Rate Structure To Be More Than Revenue Neutral: Chief Economic Advisor

  • Tata Motors, Tata Steel, Tata Power, Tata Tele: The Tata Group companies may revalue assets by March-end (Economic Times)
  • Indian Hotels: No plans to eject Cyrus Mistry from board (Business Standard)
  • Ratan Tata may go with move to hold back Nano investment (Economic Times)
  • U.S. charges in generic-drug probe said to be filed in 2016
  • Reliance Jio charges Airtel of violating licence pact
  • Indian banks can sell rupee bonds overseas, says RBI
  • Global automakers face mounting credit risks, S&P Says
  • Suzuki to spend 100 billion yen on new India plant expansion: Nikkei
  • India, Japan finished negotiations on civil nuclear pact: Swarup
  • India rejects Pakistan’s allegation against its diplomats
  • India’s IAF lands C-17 plane in Arunachal Pradesh airstrip

Analyst Ratings/Research

  • Colgate Palmolive India raised to outperform versus neutral at Credit Suisse
  • Mahindra & Mahindra raised to buy versus neutral at Nomura
  • Maruti Suzuki raised to buy versus hold at Maybank Kim Eng

Earnings to Watch

  • Allahabad Bank
  • Titan
  • Union Bank of India
  • United Breweries

Stocks to Watch

  • Bharti Airtel: Unit to get around $129 million from Zain for settling disputes
  • Biocon: EMA to review Mylan’s submission for insulin
  • InterGlobe Aviation: Air Lease has seen some engine issues with Indigo
  • Tata Motors: Signs accord with Indonesia’s Pindad
  • GVK Power: Buyout firms in race for up to 49 percent in airport operator; company denies development (Economic Times)
  • ONGC, Cairn Indian: To face Rs 1,922 crore service tax on royalty payments (PTI)
  • Ashok Leyland: Gets CCI nod to buy out Nissan's stake in LCV business (Business Standard)

For a complete list of stocks to watch, click HERE

Also Read: Government To Start Exiting Larsen & Toubro Stake After 13 Years

Opening Bell

Indian shares fluctuated between gains and losses as a selloff in drug makers was countered by rally in FMCG companies.

The S&P BSE Sensex declined 0.1 percent to 27,387 while the NSE Nifty lost 0.2 percent to 8,469. The market breadth was skewed in favour of the buyers at 777 advances, 656 declines and 425 stocks remaining unchanged.

Movers & Shakers: Sun Pharma, ITC, Larsen & Toubro, Cairn India And More

FMGC Stocks Gain On GST Boost

Shares of the FMGC companies perked up after the GST council decided on a four tier tax rate structure. The tax rate slabs have been fixed at 5 percent, 12 percent, 18 percent and 28 percent, Finance Minister Arun Jaitley said in a press conference in New Delhi.

Shriram EPC Jumps 40% in 2-Days

Shares of the Chennai-based firm jumped 16.7 percent to Rs 36, extending its two-day gains to nearly 40 percent. The momentum indicator Relative Strength Index (or RSI) has climbed to 82.4, its highest level since 2012.

A RSI reading above 70 usually indicates that investors feel the stock is an overbought zone and is due for a correction.

Titan Extends Losses After Q2 Misses Estimates

Shares of the watch maker slumped 4 percent to Rs 366 after its second quarter earnings disappointed the street.

It reported a net profit of Rs 181 crore for the September quarter, compared to Rs 192 crore estimated by analysts in a Bloomberg poll. Net sales came in at Rs 2,680 crore, unchanged from what it managed to sell a year ago period.

L&T Hits 5-Month Low As Govt Plans Stake Sale

Shares of the country’s largest construction firm dropped 3.2 percent intraday, after the government sold a 1.63 percent stake in the company.

The transaction took place through block deals with private institutional buyers picking up the entire chunk on offer, leaving no headroom for state-run LIC to participate, sources said.

SUUTI, which was created to take over part of the assets and liabilities of the now-defunct Unit Trust of India, held 8.16 percent stake in L&T. According to a report in the Mint quoting unidentified government official, the Centre may look to sell up to 3 percent of its stake.

The stock, which is down near a five-month low, has fallen for nine out of the last 10 trading sessions.

Pharma Stocks Selloff On U.S. Probe

Pharma stocks dropped like nine pins after reports suggested that U.S. prosecutors are bearing down on generic pharmaceutical companies in a sweeping criminal investigation into suspected price collusion.

Read the full report HERE

Also Read: U.S. Generic Drug Probe Takes Pharma Stocks Lower; Analysts Say Time To Buy

Sensex Drops 250 Points from Day’s High; Nifty Tests 8,400

Indian shares extended their three-day decline after a weak opening in European equities increased anxiety among investors ahead of next week’s U.S. presidential elections.

The main laggards in trade remained the pharma stocks amid mounting concerns about potential pressures on U.S. drug prices after revelations of a Justice Department probe into industry collusion.

Closing Bell

Indian shares declined to a four-month low, after closing lower for a fourth straight session this week, as healthcare companies tumbled amid a U.S. probe on producers of generic drugs.

The S&P BSE Sensex, after swinging in a 300-point range, managed to claw back some of its losses to close 0.5 percent lower at 27,274. While the NSE Nifty tested the 8,400-mark briefly before ending trade at 8,433, down 0.6 percent.

Both the indices ended the truncated week down 2.5 percent. It is their biggest weekly decline since October 2.

The broader markets too remained under pressure as investors indulged in cutting down their position with the small-cap index falling by 2.20 per cent and the mid-cap index shedding 1.34 per cent.

Also Read: Tata Sons Unveils A New Leadership Team Full Of Old-Timers

MARKET WRAP

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