Sensex, Nifty Slide To 4-Week Low; Real Estate Shares Worst Hit

Indian equity benchmarks declined for fifth straight day to near four-week low and the rupee breached its crucial psychological level of 65 against the U.S. dollar.

The S&P BSE Sensex fell 0.93 percent to 31,626.63 and the NSE Nifty 50 Index declined 0.92 percent to 9,872.60. The losses were broad-based as the S&P BSE MidCap Index fell 1.14 percent and the SmallCap Index declined 2 percent.

All the sector gauges compiled by BSE ended lower led by the S&P BSE Realty Index's 3.46 percent fall.

Market valuations have become expensive and earnings will take time to catch up because of GST rollout, said Avinnash Gorakssakar, head of research at Joindre Capital Services.

“If 9,500 does not hold on Nifty, then there can be a deeper correction in the market,” Gorakssakar told BloombergQuint.

The NSE Nifty Bank index fell to over 1-month low, declining as much as 1.45 percent, to 24,015. The index fell for fifth day in a row, posting its longest losing streak since November 2016.

• Greenply Industries: The Kolkata-based plywood maker fell as much as 4.2 percent, the most in over a month, to Rs 258. Trading volume was 11.8 times its 20-day average.
• GE Power India: The power generation company fell as much as 5.3 percent, the most in over a month, to Rs 629. Trading volume was 6.6 times its 20-day average.
• Zee Learn: The Mumbai-based pre-school chain rose as much as 6.45 percent, the most in over two months, to Rs 44.55. Trading volume was 8.2 times its 20-day average.
• Nitin Fire Protection: The Mumbai-based fire protection system provider rose as much as 4.76 percent, the most since September 22, to Rs 7.70. Trading volume was 6.5 times its 20-day average.

• Prataap Snacks IPO fully subscribed on second day of offer

Shares of the Delhi-based news broadcaster rallied for ninth session in a row, surging as much as 58 percent, to record high of Rs 416.

The stock staged its longest winning streak in over 13 years.

• Ashok Leyland has 59.4 lakh shares worth Rs 67 crore change hands at Rs 112.05 per share
• Zee Entertainment has 11 lakh shares worth Rs 67 crore change hands in two blocks at Rs 52.90 per share on BSE
• Marico has 27 lakh shares worth Rs 86 crore change hands at Rs 316.5 per share
• JK Lakshmi Cement has 13.6 lakh shares worth Rs 53 crore change hands in two blocks at Rs 387.5 per share
• BPCL has 14 lakh shares change
• ITC has 10 lakh shares change hands

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of SMS Lifesciences India Ltd. hit upper circuit, the maximum possible gain in a day, in each of the 26 trading sessions since it debuted on stock markets on August 17.

The stock nearly quadrupled during the period, making it the best performer over the last one month among Indian companies. The active pharmaceutical ingredients and intermediaries maker’s market capitalisation has grown from Rs 41 crore to Rs 158 crore during the period.

Shares of the real estate companies were trading lower for fourth day in a row. The S&P BSE Realty Index fell as much as 4.4 percent to 1980.

The Hyderabad-based infrastructure developer jumped as much as 2.6 percent to Rs 191.9 after it won an order worth Rs 1,483 crore.

Key order Highlights:

• Company's joint venture with NCC and HES won contract for construction of Sir Komarvelli Mallanna Sagar Reservoir in Telangana
• The project is part of Kaleshwaram Lift Irrigation Project which aims to irrigate 18.5 lakh acres of land

Shares of the Mumbai-based real estate developer jumped as much as 7.7 percent to record high of Rs 439.90.

The company emerged as the successful buyer for a land parcel measuring 60 acres in Thane for Rs 555 crore which is being sold by GlaxoSmithKline Pharma.

The Chennai-based online matchmaker fell as much as 4.6 percent to Rs 784, extending its slide to a third day, after BNP Paribas Arbitrage sold 1.40 lakh shares at Rs 817.73 each on Thursday.

Prataap Snack Ltd's Rs 482 crore IPO was subscribed 55 percent as of 10:30 a.m. on second day of subscription.

• Portion reserved for qualified institutional buyers was subscribed 99 percent
• Retail portion was subscribed 53 percent
• Portion reserved for high net-worth individuals was subscribed 2 percent

Shares of the Bangalore-based cafe chain fell as much as 10 percent, the most in nearly two years, to Rs 207.

The income-tax department conducted raids at company’s and its subsidiaries offices between September 21-24 , the Coffee Day Enterprises informed the stock exchanges.

• RERA Is good, but has created some turbulence in the short term
• Cost of borrowing has remained elevated
• Macro-economic condition should slightly worsen over the next 6-12 months
• Markets are little above fair value
• Direction of flows has shifted from pure equity to balanced funds
• There is little greedy money in the market at present
• Real interest rates should be brought down

Shares of the power companies jumped ahead of Prime Minister Narendra Modi's announcement of a scheme for providing round the clock electricity to all.

Shares of the Ahmedabad-based e-commerce company slumped as much as 38 percent, the most since listing, to Rs 88.85.

Shares of Mumbai-based construction company made a stellar opening on the stock exchanges.

The stock rose as much as 60 percent to Rs 399 compared to its issue price of Rs 250 per share.

Shares of the Mumbai-based fashion retailer jumped as much as 20 percent, the most in over eight years, Rs 501.7, also its highest level since February 2015.

Amazon.com's investment arm Amazon.com NV Investment Holding LLC is planning to buy 5 percent stake in the fashion retailer for Rs 179.26 crore at Rs 407.78 per share.

Indian equity benchmarks edged lower tracking weakness in heavyweights such as HDFC, Reliance Industries and Larsen & Toubro.

The S&P BSE Sensex declined 0.48 percent to 31,768 and the NSE Nifty 50 Index fell 0.48 percent to 9,916. The selling pressure was broad-based as the S&P BSE SmallCap Index declined 0.6 percent to 16,293 and the S&P BSE MidCap Index fell 0.65 percent to 15,609.

Fourteen out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Energy Index's 0.95 percent fall. On the other hand, the S&P BSE Utilities Index was the top gainer, up 0.7 percent.

There’s no need to panic even as India's economic growth decelerated to the slowest since 2014, that's the point Finance Minister Arun Jaitley tried to buttress while speaking to investors and corporates at Bloomberg Economic Forum on Friday. He said there was a need to find a balance between fiscal prudence and spending.

The statement may cheer money markets which suffered last week concerns that any stimulus would force the government to overshoot its fiscal deficit target. Rupee had the worst weekly decline since November.

Currencies in the Asia pacific region were mixed today with the New Zealand’s Kiwi falling the most followed by the yen. In other global news Angela Merkel won a fourth term as German chancellor. But it was not her best victory and below expectations.

In Bonds, the nation's benchmark sovereign bonds fell last week, with investors demanding higher yields. Global funds were net sellers of $31 million of bonds on Friday, while indian equities saw a net outflow of about $163 million on Thursday.

• Nifty September Futures closed with a premium of 18.5 points vs 16.9 points

• September Nifty Futures open interest down 1 percent & Bank Nifty open interest down 12 percent
• India VIX closed higher by 10 percent at 12.8
• September series highest Call base at 10200 (open interest at 64.4 lakh shares, up 25 percent)
• September series highest Put base shifts to 9900 (open interest at 42.1 lakh shares, down 22 percent)
• Call strike 10,000, 10,100, 10,200 sees open interest addition

• Put strikes 9900, 10,000, 10,100 and 10,200 sees open interest unwinding

• Prataap Snacks IPO subscribed 0.43 times at end of day 1.
• SBI Life Insurance IPO subscribed 3.6 times, with the HNI and retail portions not fully subscribed yet.
• Capacit'e Infraprojects to list on exchanges at a base price of Rs 250 per share. The issue was subscribed 183 times.

A2Z Infra Engineering

• IL&FS Financial Services sold 33.96 lakh shares (2.3 percent) at Rs 40.5 (average) each

Matrimony.com

• BNP Paribas Arbitrage sold 1.40 lakh shares at Rs 817.73 each

Bharat Road Network

• Corporation San Finance bought 8.77 lakh shares at Rs 189.81 each

Vipul Ltd

• Acme resources sold 6.50 lakh shares (0.5 percent) at Rs 89.6 each
• CEA Consultants Pvt ltd bought 6.50 lakh shares (0.5 percent) at Rs 89.6 each

CLSA on NTPC

• Maintain Buy; Hiked price target to Rs 200 from Rs 186
• Second largest plant of FY18 - Solapur unit 1 to commercialise; Unit 2 likely by H1FY19
• Expect pick-up in regulated equity growth to 21.4 percent by Q4FY18 on improved commercialisation of commissioned capacity
• Expect return on equity expansion by 220 basis points over FY17-19

JP Morgan on Oberoi Realty’s Land Deal in Thane

• Maintain Overweight with price target of Rs 440
• Deal has potential for a significant improvement in net asset value over time
• Oberoi's historical timing on land purchases has been impressive and this appears to be in similar lines

IIFL on Cadila Healthcare

• Downgrade to Reduce from Add; Cut price target to Rs 400 from Rs 460
• Stock priced in upside from big launches
• Cut FY18 EPS estimates and FY19 EPS estimates by 11 percent and 14 percent respectively to factor in the Lialda AG launch by the innovator
• Current valuations stretched and at significant premium to large cap peers

DB Market Strategy

• Gas sector in India yet to see valuation re-rating
• Expect strong and compelling value creation opportunity in Indian gas sector
• Earnings and free cash flows for the domestic gas companies to grow at CAGR of 22 percent and 44 percent respectively over FY17-19
• Top picks:- Petronet LNG, Gujarat State Petronet and Gujarat Gas on rising global LNG glut

DB Model Portfolio

• Key themes:- Rural reflation, robust government spending and beneficiaries of global growth stabilization
• Overweight:- Energy, Materials, Utilities, IT Services and Consumer Discretionary
• Underweight:- Telecoms, Health Care, Financials and Consumer Staples
• Additions:- GSPL, Gujarat Gas, Tata Steel
• Deletion:- Idea, BHEL, Ultratech, Wipro
• Weightage Hike:- Reliance Industries, HUL, Infosys
• Weightage Cut:- ITC

Credit Suisse on Godrej Consumer

• Upgrades to Outperform from Neutral; Hiked target price to Rs 1,100 from Rs 1,000
• Competitive intensity in Indonesia eases; no further earnings cut
• To regain its position as the fastest growing company in India on the back of best innovation pipeline
• Expect strong bounce back in second quarter of FY18
• FY18 has seen ramping up of new products and entry into new categories despite multiple headwinds

• GlaxoSmithKline Pharma Board approves sale of 60 acre land in Thane to Oberoi Realty for Rs 555 crore
• Deepak Fertilizer and Petrochemicals to set up an Is Propyl Alcohol (IPA) plant at Taloja for an investment of Rs 450 crore
• Lakshmi Vilas Bank to approve fund raising via rights issue
• IG Petrochemicals board approves expansion of Phthalic Anhydride plant and foray into downstream products
• Indian Hotels Company rights issue to open on October 13. Issue price set at Rs 75 per share
• Shilpi Cables consolidates production unit of Hosur into Bhiwad for better control over production and quality
• NCL Industries to set up a unit for manufacture of readymade doors at a cost of Rs 38 crore
• MTNL staff protest over firm's revival, wage revision issues
• Martimony.com to be added to S&P BSE IPO Index
• Billionaire Kumar Mangalam Birla’s Aditya Birla Group is readying a bid for aluminium maker Aleris Corp (Mint)
• CCD founder admits to Rs 650 crore undisclosed income as per income tax statement
• Circuit limit to 10 percent: ITI, Orchid Pharma, Amsons Apparels
• Circuit limit to 5 percent: Sri Adhikari Brothers

For a complete list of stocks to watch, click here

• Merkel wins fourth term as far right gains foothold in Germany
• Government stimulus to boost economy in the works
• NASSCOM sees demand uptick in FY19
• GST network tweaked to make system robust, says GSTN CEO
• Finance ministry plans series of Mudra camps starting from Varanasi
• Cochin Shipyard to expand ship-building and repair facilities
• SEBI revokes trading ban on 14 entities
• New CAG Rajiv Mehrishi to take over on Monday
• Telangana weighs incentive package to woo electric vehicle players
• ‘Become a student of India’s diversity,’ says Prime Minister Modi
• Is retweeting a defamatory tweet a crime? Delhi High Court to decide on Monday
• ‘Significant’ tribunal order lays down grounds for waiver in Tata-Mistry Case

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, advanced 0.10 percent to 9,993.

Asian shares were mixed while yen declined on speculation Japan’s prime minister will press for a stimulus package alongside his expected call for a snap election. New Zealand’s vote kicked off what could be weeks of coalition-building talks, weighing on the currency amid disappointment the ruling party failed to get a majority.

The euro was modestly weaker against the dollar after Chancellor Angela Merkel won Germany’s election with a smaller share of the vote, with focus on a surprisingly strong result for a far-right party.

Commodities

• West Texas Intermediate crude lost 0.1 percent to $50.61 a barrel.
• Gold lost 0.4 percent to $1,292.32 an ounce.

What to watch out for this week:

• Draghi addresses EU lawmakers in Brussels on Monday. Federal Reserve Chair Janet Yellen is in Cleveland on Tuesday. Later in the week, Bank of England Governor Mark Carney speaks alongside Fed Vice Chairman Stanley Fischer.
• European Union chief Brexit negotiator Michel Barnier and U.K. counterpart David Davis begin their next round of negotiations.
• Household spending last month in the U.S. probably posted the smallest gain since February as motor-vehicle sales shifted into a lower gear, economists forecast government figures to show.