Sensex, Nifty Decline For Second Day As Tech Stocks Slump On U.S. Visa Woes

Indian shares declined for a second straight session with a gauge of the country’s top technology companies falling the most in nearly 3 months amid concerns that Donald Trump may follow through with isolationist policies.

The S&P BSE Sensex dropped 0.7 percent to 27,655 while the NSE Nifty lost 0.8 percent to end at 8,561. The market breadth firmly skewed in favour of the sellers. About 1,252 stocks declined, 372 advances and 286 remained unchanged.

Software stocks slumped, with Nifty IT Index dropping the most since the November U.S. election, on Donald Trump’s plan to double the H-1B minimum wage will probably raise cost for exporters.

“Yes, there could be some near-term pain for the technology companies but that is all it is likely to be,” said Hemen Kapadia, senior VP (institutional equity), KR Choksey Securities. He was confident about the Indian IT’s ability to adapt, but added that the focus may shift to smaller firms.

The S&P BSE FMCG Index was the only sectoral gauge that remained unscathed in trade today.

“Consumer stocks are rallying on expectation that the federal budget presentation on Wednesday will trigger a revival in demand by giving more cash in the hands of people,” Purvesh Shelatkar, senior vice president of institutional sales at Centrum Broking Ltd. told Bloomberg News. “We will see a very strong foreign inflow into Indian stocks after the budget for few months.”

Kapadia, meanwhile, said the budget has become more of a non-event for the market. He advised investors to their research before buying stocks. “If you can’t figure that part out, it would be better for you to buy an SIP instead and stick with it for at least five-years,” he told BloombergQuint in a phone conversation.

• Akzo Nobel Q3 net profit Rs 68.57 crore versus Rs 70.60 crore YoY; stock up 0.7 percent
• Manali Petrochem Q3 net profit Rs 12.54 crore versus Rs 4.14 crore; stock little changed after rising as much as 8.6 percent
• Century Plyboard Q3 net profit Rs 37.31 crore versus Rs 41.16 crore YoY; stock down 1.5 percent.
• Mahindra Holidays Q3 net profit Rs 35.72 crore versus Rs 31 crore YoY; stock up 1.6 percent
• Subros Q3 profit Rs 3.27 crore versus Rs 6 crore YoY; stock down 1.8 percent
• Shriram Transport Q3 net profit Rs 346 crore; estimate Rs 382 crore; stock extend losses to as much as 2.4 percent

Dabur India Ltd. posted a drop of 7.5 percent in net profit for the October-December quarter. Net profit fell to Rs 293.76 crore from Rs 317.58 crore during the same quarter last year, the company said in a stock exchange filing. The figure was in-line with the Bloomberg consensus estimate of Rs 300 crore.

Read more details on Dabur’s Q3 performance HERE

Shares of the oil marketing company slipped 1.4 percent after it reported reported third quarter profit of Rs 455 crore, according to a statement on exchanges. A Bloomberg poll of analysts had estimated the profit to come in at Rs 580 crore.

• Q3 revenue Rs 2,450 crore; estimate Rs 2,490 crore
• Total costs Rs 1,990 crore versus Rs 1,840 crore; other income Rs 254 crore versus Rs 247 crore
• Interim dividend Rs 9.5 a share

Indian Oil third quarter profit rises 28 percent to Rs 3,994.91 crore, compared to Rs 5450 crore estimated by analysts in a Bloomberg poll.

• Total income grew 15.32 percent to Rs 1,15,645 crore; est. Rs 95,960 crore
• Total cost Rs 1.09 lakh crore versus Rs 92,910 crore; excise duty payout rises 57 percent YoY to Rs 22,530 crore
• GRMs for the April-December period was at $7.36 per barrel compared to $5.83 per barrel last year.
• To pay Rs 13.5 a share as interim dividend

Shares drop as much as 7.1 percent, the most since Nov. 15.

The company reported third quarter net profit rose to Rs 80.54 crore versus Rs 66.49 crore year earlier, according to a statement on exchanges. Shares erase losses to gain as much as 1.4 percent intraday, having fallen 2.1 percent earlier.

• Q3 revenue Rs 660 crore versus Rs 705 crore
• Approves share buyback at up to Rs 315 per share
• Approves Rs 1.5 a share dividend

Shares of the state-owned lender fluctuated between gains and losses after reporting third quarter earnings.

The bank posted a net profit of Rs 93.56 crore for the quarter-ended December 31, compared to a loss of Rs 120 crore same period year ago.

• Q3 gross bad loans 8.69% end-Dec. vs 7.72% end-Sept., according to a statement on exchanges.
• Q3 provision Rs 785 crore versus Rs 860 crore
• Q3 interest income Rs 5,570 crore versus Rs 5,640 crore; interest expense Rs 4,180 crore versus Rs 4,120 crore

Shares of the two-wheeler maker pared losses and rose 2.6 percent after reporting third quarter earnings that beat street estimates.

The Pune-based auto major reported a net profit of Rs 925 crore for quarter-ended December 31, compared to Rs 851 crore estimated by analysts in a Bloomberg poll.

• Sales Rs 5,350 crore versus est. Rs 5,060 crore
• Total costs Rs 4,39 crore versus Rs 4,790 crore
• Other income Rs 319 crore versus Rs 242 crore
• Q3 operating Ebitda Margin 22 percent; unchanged YoY
• Overall local bike market share 18.5 percent in Q3
• Cash, equivalents at Rs 10,932 crore end-Dec.

A legislation has been introduced in the U.S. House of Representatives, which among other things, calls for more than doubling the minimum salary of H-1B visa holders to $130,000, making it difficult for firms to use the programme to replace American employees with foreign workers, including from India.

The legislation tightens employee protection by stipulating that employers may not reduce beneficiary wages, regardless of whether the deduction is in accordance with a voluntary authorisation by the employee.

PTI

Shares of the textile maker pared losses after reporting its third quarter earnings. The company managed a net profit of Rs 13.89 crore for the quarter-ended December 31, compared to a loss of Rs 8.5 crore same period a year ago.

It clocked net sales of Rs 1,960 crore versus Rs 2,110 crore year-on-year ago.

• Q3 total cost Rs 1,820 crore versus Rs 2,020 crore

Shares of the drug maker dropped as much as 6.3 percent to Rs 352 after its third quarter earnings disappointed missed the mark.

The pharma firm reported a net profit of Rs 282 crore for quarter-ended December, compared to Rs 353 crore estimated by analysts in Bloomberg poll. It clocked net sales of Rs 2,360 crore versus estimate of Rs 2,430 crore.

• Q3 total cost Rs 2,050 versus Rs 1,890 crore YoY

While the country’s third largest telecom operator has gained over 40 percent since January 27, on talks of merger discussions with Vodafone Plc, the stock of Bharti Infratel has actually dropped over 15 percent.

According to research firm CLSA, the proposed merger of Idea Cellular and Vodafone India is likely to impact Bharti Infratel’s tenancies as the combined company would look to reduce an overlap in tower infrastructure.

India’s Finance Ministry will recommend bold tax reform to ensure that Prime Minister Narendra Modi’s growth-crimping cash ban wasn’t in vain, people familiar with the matter said.

Suggestions include a national sales tax that covers various sectors, lower income tax rates and more tax payers, faster cuts to corporate taxes, and more accountable tax officers, the people said, asking not to be identified as the information isn’t public. The government must use filing data to ensure scrutiny is backed by evidence rather than harassment, they said, citing a report prepared by the Finance Ministry.

Read the full article HERE

Rising for the fifth straight day, the rupee advanced by another 11 paise to 67.84 against the dollar in early trade today on increased selling of the U.S. currency by banks and exporters.

Forex dealers said, a weakening dollar against other currencies overseas supported the rupee but a lower opening in the domestic equity market capped the gains.

Yesterday, the rupee had hit its two-week high of 67.95, appreciating by 8 paise on sustained unwinding of American currency by exporters and banks.

PTI

Shares of the drug maker rose as much as 6.4 percent to highest since August 25 after Teva Pharmaceutical lost a ruling that invalidated four patents on its top-selling multiple sclerosis drug Copaxone.

• Mylan and Natco had applied to the FDA for approval of generic Copaxone in 2014.
• Mylan and Natco may be entitled to a six-month period of exclusivity where later-filing generic-drug makers are barred from entering the market.
• The patents, which expire in 2030, cover ways to administer Copaxone in a 40-mg dosage three times a week
• Copaxone had about $3.3 billion in U.S. sales in the 12 months ended Nov. 30, Mylan says, citing IMS Health data

Movers & Shakers: Idea Cellular, ICICI Bank, V-Gaurd Industries And More

The Bank of Japan kept stimulus unchanged and left its inflation forecasts largely untouched as it waits to see the impacts of a recent decline in the yen and the polices of Donald Trump’s administration.

Governor Haruhiko Kuroda and his board will continue to buy bonds and other securities at the same pace while keeping unchanged the two policy rates controlling yield curve, as forecast by all economists surveyed by Bloomberg.

Board members also updated their economic projections. The median estimates are as follows:

• Inflation forecast for fiscal 2016 cut to -0.2 percent, from -0.1 percent
• Inflation forecast for fiscal 2017 kept at 1.5 percent.
• Inflation forecast for fiscal 2018 kept at 1.7 percent.
• GDP projection for fiscal 2016 raised to 1.4 percent, from 1.0 percent.
• GDP projection for fiscal 2017 raised to 1.5 percent, from 1.3 percent.
• GDP projection for fiscal 2018 raised to 1.1 percent, from 0.9 percent.

Indian shares dropped for second straight session amid weak global cues as investors brace for a barrage of key policy decisions both locally and globally.

The S&P BSE Sensex declined 0.3 percent to 27,747 while the NSE Nifty slid 0.4 percent 8,597. The market breadth was skewed in favour of the sellers. About 705 stocks declined, 682 advanced and 484 remained unchanged.

• Dilip Buildcon: Contract for Andhra Pradesh road widening recalled
• IRB Infra: Said toll collection at Mumbai-Pune Expressway in line with prevailing concession pact
• Pioneer Distilleries: Restarts operations at Nanded plant
• Poly Medicure: To consider free share issue on Feb. 6

For a complete list of stocks to watch, click HERE

Offerings

• SREI Infrastructure public issue of NCDs gets 58% demand first day sale; offer scheduled to close on Feb. 23

• Dish TV India
• Shree Cement
• Bajaj Finserv
• Emami
• Emkay Global
• Pfizer

Earnings To Watch Today

• Bajaj Auto
• Dabur
• ICICI Bank
• Interglobe Aviation
• Indian Oil Corporation
• ONGC
• JSW Steel
• Oil India
• Bank of Maharashtra
• Kansai Nerolac Paints
• Mphasis
• Bharat Gears
• Cadila Healthcare
• Capital First
• UCO Bank
• Welspun India
• TTK Prestige
• Narayana Hrudayalaya

• India plans sugar stockpile monitoring to prevent price surges
• Citigroup says sugar prices have upside bias amid Asia crop woes
• Modi urges political parties to enable smooth budget session
• RBI scraps cash withdrawals limit from ATMs effective Feb. 1
• India top court names panel to administer cricket body BCCI
• Indian Oil Corp. may consider mid-year dividend
• GHCL to consider mid-year dividend, buy-back of shares
• Mphasis to consider buy-back of shares
• ONGC may consider mid-yr dividend
• Global funds buy Rs 607 crore of local stocks; domestic funds buy Rs 40.04 crore yesterday: Provisional data
• Emerging market ETF inflows top $1.5 billion, most since August
• Airbus said to plan MRO facility for EC 725 in Goa, India (PTI)

• Pre-budget India Economic Survey to be presented in Parliament
• 1pm: Chief Economic Adviser to brief on Economic Survey
• 2pm: Revenue secretary and CBDT chairman to brief media
• 4:30pm: India fiscal deficit in rupees for April-Dec. period
• 5:30pm: India GDP FY16 revised estimates through March 31 YoY (Prior 7.1 percent)
• Eight infrastructure industries index for Dec. (Prior +4.9 percent)

Investors will be watching for key data points from the Economic Survey 2017 and India's revised GDP estimates for the last financial year. Both are due later today.

In the survey, Finance Ministry may forecast FY18 GDP growth at 6.75 percent to 7.5 percent, according to people familiar. The Government also expects higher oil prices in 2017 to potentially drag growth lower by 0.5 percentage points.

Borrowing costs may fall as much as 100 basis points this year compared to 2016.

Any update on the impact of demonetisation will also be keenly watched.

Another key data is the gross government borrowing for fiscal 2018. Borrowing via bonds is seen at a record of Rs 6.25 lakh crore versus Rs 6 lakh crore budgeted for this fiscal. The number will be known in the union budget tomorrow.

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, was little changed at 8,648.

Asian stocks declined this morning, while gold and yen extended gains on concern that Donald Trump may follow through with isolationist policies. Bank and exporters led declines in Japanese shares before a Bank of Japan policy decision.

The dollar maintained Monday’s losses against most its peers, while oil slumped. China, Hong Kong and Vietnam markets will be closed for holidays.

U.S. stocks fell the most since the November election, with the S&P 500 Index posting its biggest loss of the year, as Trump’s order to banning immigrants from seven predominantly Muslim counters drew a rebuke from some Republican lawmakers.

Oil prices declined to $55.13 a barrel, after losing more than a 1 percent during each of the previous two sessions. Drilling in the U.S. rose to the highest in more than a year, countering OPEC’s efforts to clear a supply glut.

Watch Out For

the Bank of Japan is expected to leave policy unchanged Tuesday as it concludes its first meeting of 2017. The Federal Reserve announces a policy decision on Wednesday. Like the BOJ, it is expected to leave lending rates where they are, though the Fed’s statement will be parsed for any reading on Trump’s impact on the world’s largest economy.