Sensex, Nifty Stage Worst Fall Since Cash Ban, Day After Budget

Indian equity benchmarks fell the most since demonetisation week a day after government announced to tax equity investments held for more than a year to boost its revenue.

The S&P BSE Sensex fell 2.3 percent or 840 points, the most since November 2016 to 35,067 and the NSE Nifty 50 Index slumped 2.3 percent or 256 points to 10,760.

The mid-cap and small-cap shares saw their worst selling in over a year as the S&P BSE MidCap Index slumped 4 percent and the S&P BSE SmallCap Index tumbled 4.6 percent.

All sector gauges compiled by BSE ended lower dragged down by the S&P BSE Realty Index’s 6.3 percent fall.

The overall breadth was extremely bearish as 1,525 stocks declined while 81 ended higher on the BSE.

• Losses in Reliance Industries, HDFC, HDFC Bank, ICICI Bank and Maruti Suzuki collectively wipe out 420 points from the S&P BSE Sensex.
• Sensex and Nifty are headed for their worst fall since November 2016.
• All sector gauges compiled by BSE were trading lower weighed down by S&P BSE Realty Index's 5.7 percent drop.

Shares of the Haryana-based home improvement products maker declined 1.8 percent to Rs 1,475 after its net profit declined in October-December quarter.

Key earnings highlights:

• Net profit down 4 percent at Rs 53 crore versus Rs 55.4 crore (YoY).
• Revenue up 17 percent at Rs 958 crore versus Rs 810 crore (YoY).
• EBITDA at Rs 89.1 crore versus 84.3 crore (YoY).

Shares of the Pune-based two-wheeler maker extended losses after its net profit missed consensus analyst estimates compiled by Bloomberg.

Key earnings highlights:

• Net profit up 3.7 percent at Rs 1,013.16 crore versus Rs 976.82 crore (YoY).
• Net at Rs 1,013 crore versus Bloomberg estimate of Rs 1,072 crore.
• Revenue at Rs 6.369.3 crore versus Bloomberg estimate of Rs 6235 crore.
• Margin at 19.3 percent versus Bloomberg estimate of 20 percent.
• EBITDA at Rs 1,231 crore versus Bloomberg estimate of Rs 1,250 crore.
• EBITDA up 18 percent at Rs 1,231 crore versus Rs 1,044 crore (YoY).

Shares of the Aditya Birla Group aluminum and copper producer declined after it reported earnings for October-December quarter earnings.

Key earnings highlights:

• Standalone net profit at Rs 375.5 crore versus Bloomberg estimate Of Rs 501.62 crore.
• Standalone net sales up 18.4 percent at Rs 11,022.8 crore versus Bloomberg estimate Of Rs 10,953 crore.
• Standalone EBITDA at Rs 1,311.7 crore versus Bloomberg estimate Of Rs 1,385.31 crore.
• Standalone margin at 11.9 percent versus 12.7 percent (YoY).
• Standalone net profit up 17.6 percent at Rs 375.5 crore versus Rs 320.5 crore (YoY).
• One-time loss at Rs 115.2 crore.

Shares of the Mangalore-based crude oil refiner came off day's low after its net profit came in better than consensus analyst estimates compiled by Bloomberg.

Key earnings highlights:

• Net profit at Rs 970 crore versus Bloomberg estimate of Rs 612 crore.
• Revenue at Rs 17,420 crore versus Bloomberg estimate of Rs 14,420 crore.
• Total costs at Rs 15,960 crore.

• Indian equity benchmarks held on to losses and fell most in over a month dragged down by weakness in Reliance Industries, HDFC twins and ICICI Bank.
• The S&P BSE Sensex fell 1.4 percent or 522 points to 35,385 and the NSE Nifty 50 Index tumbled 156 points or 1.4 percent to 10,860.
• The broader markets were also facing the heat of selling pressure with the S&P BSE MidCap and S&P BSE SmallCap Indices down over 2 percent each.
• All sector gauges compiled by BSE were trading lower weighed down by the S&P BSE Realty Index's 3.6 percent drop.

Shares of the private sector lenders extended losses weighed down by ICICI Bank and Axis Bank's over 2.5 percent drop. The gauge of private banks compiled by National Stock Exchange — Nifty Private Bank Index fell over 2 percent, the most in over a month, to 14,966.

PC Jewller in a stock exchange clarification said that none of its promoters have not sold any share in the company and its fundamentals remain strong with good footfalls and sales this quarter.

Shares of the Mumbai-based real estate developer fell as much as 3.3 percent to Rs 780.85 after its net profit declined sharply in December quarter.

Key earnings highlights:

• Consolidated net profit at Rs 25.94 crore versus Bloomberg estimate of Rs 56 crore.
• Net profit down 66.4 percent at Rs 25.94 crore versus Rs 77.2 crore (YoY).
• Revenue at Rs 627 crore versus Bloomberg estimate of Rs 432.7 crore.
• Revenue up 21 percent at Rs 627 crore versus Rs 518.2 crore (YoY).
• EBITDA at Rs 46.2 crore versus Rs 120.7 crore (YoY).
• Margin at 7.4 percent versus 23.3 percent (YoY).

Shares of the Delhi-based jeweller which fell as much as 60 percent came off day's low but were still down 17 percent at Rs 400.

Shares of real estate developers were trading lower dragged down by weakness in DLF and Indiabulls Real Estate. The S&P BSE Realty Index fell as much as 8.48 percent, the most in over a year.

Indian equity benchmarks fell most in over a month dragged down by HDFC twins, Reliance Industries, Larsen & Toubro and Kotak Mahindra Bank.

The S&P BSE Sensex fell as much as 1.65 percent or 591.69 points, the most in over a month, to 35,315 and the NSE Nifty 50 Index slumped 1.7 percent or 190 points to 10,826.

The mid-cap and small-cap shares were among the worst hit in trade today as the S&P BSE MidCap Index and the S&P BSE SmallCap Indices fell the most in over a year.

The overall market breadth was extremely bearish as 1,584 stocks were falling while 84 were advancing.

Shares of the information technology services firm fell for the fifth straight session today, by 10 percent, to Rs 236.1.

Securities and Exchange Board of India is investigating Vakrangee Ltd. for alleged share price and trading volume manipulation. According to a report on Mumbai Mirror last week, SEBI is investigating a surge in the company’s share price and volume which may have been a result of manipulation.

Trading volume was 13 percent of the 20-day average. The relative strength index of the stock is 23, which indicates the stock may have been oversold.

Shares of the Delhi-based gold jewellery retailer fell as much as 39 percent, the most since its listing day, to Rs 294.70.

• We need to consolidate on fiscal front is a reality.
• Must commend government for increasing tax compliance.
• Capital expenditure may end up a lot lower than budgeted expenditure.
• Quality of consolidation may suffer.
• Capital expenditure could take an axe.
• Significant increase in revenues from GST positive in Budget.
• MSP increase could be 10 percent or a bit higher.
• Key concerns, 3 percent target is pushed out to two years by 2021.
• Government has not clarified on costs of MSP increase.

Shares of the country's largest cigarette maker rose for second day in a row, rising as much as 3.76 percent to Rs 285.65 after the government kept the cess on cigarettes unchanged.

Shares of other cigarette makers

• Godfrey Phillips rose 1.46 percent
• VST Industries rose 3.14 percent

• JM Financial has 11.9 lakh shares change hands in a single block.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Pune-based two-wheeler maker rose as much as 1.6 percent to record high of Rs 3,468 after its sales rose 46 percent in January to 3,53,147 units.

• Commercial vehicle sales grew 113 percent to 64,211 units.
• Motorcycle sales rose 36 percent to 2,88,936 units.
• Exports rose 41 percent to 1,50,954 units.

Indian equity benchmarks fell dragged down by selling pressure in private and public-sector lenders amid a selloff in Asian markets.

The S&P BSE Sensex fell as much 0.84 percent or 304 points to 35,604 and the NSE Nifty 50 Index tumbled 0.76 percent or 84 points to 10,930.

The losses were broad-based as the S&P BSE MidCap Index fell 1.14 percent and the S&P BSE SmallCap Index slumped 1.3 percent.

Nine out of 11 sector gauges compiled by the National Stock Exchange were trading lower weighed down by the Nifty PSU Bank Index’s 2 percent drop. On the other hand, the Nifty FMCG Index was the top sectoral gainer, up 0.4 percent.

• Economy is on a solid footing but markets will be less assured because it is global.
• Inflation targeting is a great achievement of this government, very good for bond market.
• Hope to see rural demand recover this year.
• Rural growth is a long-term challenge; landless labour is leaving rural India.
• Remain constructive on consumption sector.
• Like discretionary consumption especially rural ones.
• Like corporate banks, infrastructure owners, domestic materials and software stocks.
• Earnings so far have surprised analysts this time.
• Nifty's 80-85 percent performance in next 3 months will depend on global markets.
• Tax issues haven't stopped FPIs to buy in India, don't think it'll happen even now.
• Tax issues on FPIs is not a new thing, this has been there for years.
• 90 percent of stt comes in from day traders.
• Not rolling back STT is certainly a disappointment for market players.
• Don't think that there was any need to increase defence budget.
• Was not expecting LTCG in this budget.
• This budget is hawkish on social spending and bullish on investment boosting.
• Health plan scale-up in the 1st year could be an execution disaster budget seems neutral for equities but near-term headwinds for bonds will remain.
• Budget's overall impact on macro stability will be manageable.
• National Health Insurance Scheme looks promising if scaled up.
• Education, health sector received long overdue focus.
• Focus on health and education in budget is very promising but not an agenda this year.
• Earnings growth this year will be in double-digits.
• Bond market is currently expecting some slippage.
• Biggest worry for market is increasing oil prices.
• Protecting inflation is good for markets.
• This was not a populist or growth budget, this was to protect inflation.
• Expect oil to come under GST net.
• Some food inflation can come towards the end of year.
• Budget is done to protect inflation next year.
• No intention to tax retrospectively is positive.

Sovereign bonds are set to remain under pressure as a proposed hike in minimum support prices for farmers is likely to fan inflation and spur RBI to maintain a hawkish stance. Also, the fiscal deficit at 3.3 percent of GDP compared to consensus of 3.2 percent for 2019 has hurt sentiment.

Of course, gross bond issuance estimate of Rs 6.06 lakh crore was lower than expectations, but analysts at Morgan Stanley say it is optimistic and expect the number to be close to Rs 6.4 lakh crore eventually. The benchmark 10-year yield rose 18 basis points to 7.61 percent on Thursday and today the RBI will sell Rs 11,000 crore worth of bonds.

Meanwhile, the rupee is likely to trade with a weak bias, slugged by the government's decision to impose long term capital gains tax on stock market profits. That could impact foreign fund inflows into booming equity markets. The rupee weakened by 0.7 percent on Thursday at 64.0225 and forwards indicate the currency should open around those levels.

The Pune-based two-wheeler maker's sales rose 46 percent in January to 3,53,147 units compared with 2,41,917 units during the same period last year.

• Commercial vehicle sales grew 113 percent to 64,211 units.
• Motorcycle sales rose 36 percent to 2,88,936 units.
• Exports rose 41 percent to 1,50,954 units.

• Bajaj Auto
• Hindalco Industries

Other Earnings To Watch

• Bajaj Holdings & Investment
• Bayer Cropscience
• BSE
• Glaxosmithkline Pharmaceuticals
• Godrej Properties
• Gujarat Gas
• IEX
• Info Edge
• Inox Wind
• MRPL
• Whirlpool

Ashok Leyland Q3 (YoY)

• Revenue up 57.5 percent at Rs 7,113 crore.
• Net profit up 178 percent at Rs 450 crore.
• EBITDA up 74 percent at Rs 788.5 crore.
• Margin at 11.1 percent versus 10 percent.

Ceat Q3 (YoY)

• Revenue up 13 percent at Rs 1,574 crore.
• Net profit down 2 percent at Rs 82.6 crore.
• EBITDA up 22 percent at Rs 186 crore.
• Margin at 11.8 percent versus 11 percent.

Zee Media Q3 (YoY)

• Revenue up 44.5 percent at Rs 159 crore.
• Net profit of Rs 10.3 crore versus net loss of Rs 6.2 crore.
• EBITDA up 81 percent at Rs 38 crore.
• Margin at 23.9 percent versus 19.1 percent.

Bajaj Finserv Q3 (YoY)

• Revenue up 21 percent at Rs 7,666 crore.
• Net profit up 22 percent at Rs 748.6 crore.
• Net interest income up 38 percent at Rs 2,372.4 crore.
• Net NPA at 0.53 percent versus 0.51 percent (QoQ).

Khadim Q3 (YoY)

• Revenue up 47.5 percent at Rs 205 crore.
• Net profit up 89 percent at Rs 8.9 crore.
• EBITDA up 48 percent at Rs 20 crore.
• Margins at 9.8 percent versus 9.7 percent.

UCAL Fuel System Q3 (YoY)

• Revenue up 0.5 percent at Rs 149.2 crore.
• Net profit up 98 percent at Rs 11.7 crore.
• EBITDA up 45 percent at Rs 27.2 crore.
• Margin at 18.2 percent versus 12.7 percent.

PowerGrid Q3 (YoY)

• Revenue up 13 percent at Rs 7,507 crore.
• Net profit up 6 percent at Rs 2,041 crore.
• EBITDA up 13 percent at Rs 6,738.5 crore.
• Margin at 89.8 percent versus 89.9 percent.

Akzo Nobel Q3 (YoY)

• Revenue up 6 percent at Rs 712 crore.
• Net profit up 20 percent at Rs 82.6 crore.
• EBITDA down 2 percent at Rs 98 crore.
• Margin at 13.8 percent versus 14.9 percent.

Pricol Q3 (YoY)

• Revenue up 8 percent at Rs 327 crore.
• Net profit down 17 percent at Rs 8.7 crore.
• EBITDA up 6.5 percent at Rs 33 crore.
• Margin at 10.1 percent versus 10.2 percent.

Cummins Q3 (YoY)

• Revenue flat at Rs 1,354 crore.
• Net profit down 13 percent at Rs 172 crore.
• EBITDA down 13 percent at Rs 196 crore.
• Margin at 14.5 percent versus 16.7 percent.

CCL Products Q3 (YoY)

• Revenue down 5 percent at Rs 274 crore.
• Net profit down 11 percent at Rs 40.4 crore.
• EBITDA down 17 percent at Rs 64 crore.
• Margin at 23.4 percent versus 26.8 percent.

PNB Gilts Q3 (YoY)

• Revenue down 59 percent at Rs 68 crore.
• Net loss of Rs 14 crore versus net profit of Rs 66 crore.

• TVS Motors Jan. sales up 31 percent at 2.71 lakh units.
• SML Isuzu Jan. sales down 6.4 percent at 938 units.
• VST Tillers Jan. sales up 32 percent at 2,822 units.

• Novelis posts strong third quarter with its full year EBITDA at the higher end of its forecast.
• Lupin launches generic Clobex Lotion in the U.S., which has annual sales of approx $12.6 million.
• Zee Media Board approves acquiring balance 40 percent in Zee Akaash News for Rs 49 crore
• Gammon Infra-led consortium received EPC order worth Rs 577 crore from NHAI.
• Hinduja Ventures acquires 10.32lk shares of Hinduja Leyland Finance on rights basis
• Info Edge to sell 32,629 shares (6.66 percent) in Zomato to Ant Small and Micro for $50 million
• Grasim Industries to raise production capacity of VFS business to 46,300 tonne per annum from 21,300 tonne per annum

• Nifty February futures trade at 11,031 premium of 14 points versus 27.7 points.
• February series: Nifty open interest down 3 percent, Bank Nifty open interest unchanged.
• India VIX ended at 14.4, down 11 percent.
• Max open interest for February series at 11,500 call strike (open interest at 61.2 lakh, up 49 percent).
• Max open interest for February series at 10,500 put (open interest at 59.2 lakh, up 2 percent).

Trading Tweaks

Vakrangee circuit filter revised to 10 percent.

• Jain Irrigation: Societe Generale bought 30.96 lakh shares or 0.6 percent equity at Rs 135.01 each.
• Fortis Healthcare: Societe Generale sold 34.56 lakh shares or 0.7 percent equity at Rs 130.26 each.

V-Mart:

• Bottom Billion Fund bought 1.05 lakh shares or 0.6 percent equity at Rs 1,515 each.
• Citigroup Global Markets Mauritius Private Limited sold 1.05 lakh shares or 0.6 percent equity at Rs 1,515 each.

• Modi trains sight on farmers before election battle
• A budget short on details and lacking a growth push, says India Inc
• Government gives itself a fiscal long rope
• 10% tax on long-term equity gains of over Rs 1 lakh
• Government expects more in dividend from RBI
• Salaried class left wishing for more
• Government to raise support price for kharif crops
• India Budget 2018: Winners and losers
• India to curb cryptocurrency use while embracing blockchain

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 1.05 percent to 10,932 as of 7:58 a.m.

Asian shares dipped, with technology stocks leading declines after some disappointment with U.S. corporate earnings. Rising pressure on bond yields round the world stirred the Bank of Japan into action to keep rates from getting out of whack with policy targets.

The MSCI Asia Pacific Index dropped, set for the worst weekly performance since September 2016 after Google parent Alphabet Inc. missed earnings estimates and Apple Inc. forecast lower-than-expected revenue.

Commodities

West Texas Intermediate oil traded near its highest level since 2015 as forecasters paint a rosier picture for supply and demand.

• West Texas Intermediate crude rose 0.4 percent to $66.06 a barrel.
• Gold was flat at $1348.53 an ounce.
• LME copper was little changed at $7,117 per metric ton.