Sensex, Nifty End Lower For Third Day

Indian equity benchmarks ended lower for the third straight day, after a volatile trading session. The S&P BSE Index closed 0.2 percent lower at 33,703.59, while the NSE Nifty 50 Index ended at 10,360.40, down 0.2 percent.

The market breadth was tilted in favour of buyers. Eleven out of 19 sectoral gauges compiled by BSE declined, led by S&P BSE Realty Index’s 0.6 percent fall. On the flipside, S&P BSE Consumer Durables Index was the top sectoral gainer, up 1.7 percent.

Shares of the cement maker rose as much as 2.1 percent to Rs 262.95 after the company’s net profit jumped 89 percent on a yearly basis during October December period.

Key Earnings Highlights Q4 CY, (YoY):

• Net profit up 89 percent to Rs 338.98 crore (YoY).
• Revenue up 21.9 percent to Rs 2,712.61 crore (YoY).
• Ebitda up 61.5 percent to Rs Rs 540.64 crore (YoY).
• Margin expanded to 19.93 percent from 15.04 percent (YoY).

Rupee slumps as much as 0.9 percent to 64.7950 per dollar, lowest since Nov. 27, after RBI is said to tighten approval for corporate offshore borrowing, Bloomberg reported quoting unnamed sources.

• Punjab National Bank: About 22.4 lakh shares changed hands in a block deal.
• Federal Bank: About 52 lakh shares changed hands in a block deal.
• Fortis Healthcare: About 10 Lakh shares changed hands in a block deal.
• ICICI Bank: About 11.7 lakh shares changed hands in a block deal.
• Motherson Sumi: About 11 lakh shares changed hands in a block deal.
• NTPC: About 15 lakh shares changed hands in a block deal.

Buyers and sellers were immediately not known

Source: Bloomberg

European stocks are little changed as investors assess earnings from heavyweights including HSBC and eye U.S. Treasury yields climbing back toward recent highs.

The research arm of Deutsche Bank said it expects robust sales volume trend to continue for tyre companies. It said the growth will be backed by three factors:

• Cyclical uptick in truck tyres
• Stable growth in passenger vehicles
• Pick up in two-wheeler tyre sales

Deutsche Bank forecasts a 8-12 percent sales volume growth moving forward.

MRF

• Stock Rating: Buy
• Price Target: Rs 85,000

Apollo Tyres

• Stock Rating: Buy
• Price Target: Rs 325

Ceat

• Stock Rating
• Price Target: Rs 2,100

India will allow private and foreign companies to mine coal without any end-use or price restrictions as the government cleared new auction guidelines to boost supply of the fossil fuel that powers over three-quarters of the nation’s electricity plants. (Click here to read more).

Coal India Holds Gain

• Magnanimity of PNB fraud and the time it went unnoticed raises serious questions on those areas.
• Difficult to opine on eventual impact before clarity.
• Bank has said will honour bonafide claims.

India’s software services industry expects growth of as much as 9 percent in fiscal 2019 as Tata Consultancy Services Ltd. and its peers strengthen automation and adapt to the rapid onset of digital technologies. (Click here to read more).

Source: Bloomberg

Indian stocks have extended a slump that began late January and short sellers are betting record amounts that more declines are in store. (Click here to read more).

Source: Bloomberg

Indian equity benchmarks hold gians after advancing for the first time in three days.

The S&P BSE Sensex Index rose 0.2 percent to 33,826, while the NSE Nifty 50 Index rose 0.1 percent to 10,385 as of 12:15 p.m.

Shares of Fortis Healthcare Ltd. and Religare Enterprises Ltd. fell by 2.1 percent and 4.7 percent respectively after a report that the Serious Fraud Investigation Office had been ordered to investigate possible siphoning off of cash from the two entities by Malvinder Singh and Shivinder Singh.

The two stocks had gained in the previous 10 consecutive sessions.

Religare Enterprises subsequently asked the SEBI to remove the Singh brothers as promoters after they stepped down from the board following the, a senior company executive told BloombergQuint requesting anonymity. (Read more on this story here.)

Fortis’ trading volume in the first hour of trade was more than thrice the 20-day trading moving average.

Shares of the thermal power plant operator snapped four day losing streak and rose as much as 2.5 percent to Rs 81.

The company has signed a memorandum of understanding (MoU) with Maharashtra state for setting up facilities to manufacture electric vehicles and energy storage systems, according to its stock exchange notification.

Trading volume was 1.5 times the 20-day average. JSW Energy trades at 20.7 times trailing 12-month earnings per share and 18 times its estimates for the coming year.

Weizmann Forex

• Stock rose as much as 14.9 percent to Rs 1,137
• Trading volume was 12.8 times its 20-day average.

Aptech

• Stock rose as much as 10.9 percent to Rs 329.85.
• Trading volume was 4.8 times its 20-day average.

Alankit

• Stock fell as much as 5 percent to Rs 46.50.
• Trading volume was 2.3 times its 20-day average.

Shares of the country’s second-largest lender extended declines for the fifth trading session and fell 3.4 percent to Rs 112.60, the lowest in over 13 months 2016 after the lender reported a nearly $1.8 billion scam last week.

Besides, Fitch Ratings has placed PNB Viability Rating of 'BB' on Rating Watch Negative (RWN), following the large fraud, according to its media statement. Fitch said will resolve the Rating Watch once more clarity emerges on the extent of control failures and the impact on PNB's financial position.

The Relative Strength Index was 22, indicating that the stock may be oversold. Trading volume was 4.2 times 30-day average.

Key highlights form the conversation:

• Q3 was a turnaround quarter in terms of the botttomline.
• Expect double digit growth in Q4.
• Realisations have been lower because of GST set-off.
• Expect 15-20 percent volume growth in Q4 as distribution is in place.
• Have seen 29 percent volumes in January.
• Have to gain back our lost market share.
• Our fixed costs will not go up as fast as our sales growth will take place in future.
• In Q3 cost went up due to investment in improving distribution process.
• See 15-20 percent CAGR For EPC space.

Watch the full conversation here:

Key highlights form the conversation:

• Aim to redesign restructure Religare
• Currently looking for the right leadership for the company.
• Looking for a right person for CEO position, will take 90-120 days.
• Hope to pick the correct leader for the company with restructured board.
• Would like to continue with NBFC business.
• Expect to raise more capital in near future.
• Do not expect quick profits and fast recovery immediately after new board takes up.
• Operational companies need capital to grow.
• Will be able to recapitalise the NBFC, which has a shortage on regulatory front.
• Businesses are in good shape but need capital.
• Will move ahead with growth as soon as possible.
• Hope to infuse capital into operational companies by March.
• Will not spare any effort to “go after” borrowers who have not repaid.
• Have instructed outside auditors to review loan book.

Watch the full conversation here:

Shares of the real estate developer extended gains for the second day and rose as much as 3 percent to Rs 40.10.

The company entered into an agreement with Lina Ashar Foundation for construction in their real estate property at Pune, according to its stock exchange notification. The stock has declined 15.3 percent so far this year, compared to 0.6 percent decline in Sensex.

• Seeing genuine recovery in rural economy.
• Seeing pickup in consumer demand, govt expenditure.
• Expect good recovery in rural economy in next 12 months.
• Will see significant consolidation in real estate space.
• Demand pick up in realty space will take some time.
• Expect demand pick up in realty estate space in next 12-18 months.
• Recommend to stay away from PSU banks till governance practices are set right.

Indian equity benchmarks swung between gains and losses as Tata Steel rose while Adani Ports fell the most. The S&P BSE Sensex Index was flat at 33,800, while the NSE Nifty 50 Index also remained flat at 10,380.25.

The market breadth was tilted in favour of buyers. Thirteen out of 19 sectoral gauges compiled by BSE fell, led by S&P BSE Healthcare Index’s 0.3 percent decline. On the flipside, S&P BSE Telecom Index was the top sectoral gainer, up 0.7 percent.

• Ambuja Cements

Bonds are expected to start weaker after an extended weekend, tailing rising U.S. yields. At the end of last week, sovereign bonds posted a fifth weekly decline in six as shrinking banking-system liquidity, and higher U.S. yields weighed on sentiment. The yield on the 10-year bond rose one basis point to 7.58 percent on Friday.

Traders said they would also eye crude oil prices which rose towards the $62 a barrel mark. Besides oil, the focus will be on a bond sale by state governments. States are scheduled to sell 139.8 billion rupees of debt on Tuesday.

Meanwhile, the rupee is expected to start weaker against a rising dollar. The greenback gained 0.5 percent on Friday to end at 64.2150 while forwards indicate that it will begin trading at 64.57 per dollar when trading resumes on Tuesday.

CLSA on Varun Beverages

• Maintained ‘Buy’ with price target of Rs 885.
• December quarter was ahead of estimates but not relevant quarter.
• Contributes close to 5 percent of full year Ebitda.
• Outlook strong for 2018 as it has secured rights for more territories.
• New territories and products provide opportunity to expand volume and market share.
• Recent correction in sugar price improve margin visibility.

Macquarie on Adani Ports

• Maintained ‘Neutral’ with price target of Rs 395.
• JV route for expansion to limit capex.
• Eyeing exponential growth in logistics business.
• Committed to increase dividend payout.
• Profitability growth likely to lag the volume growth in JV model.

CLSA on Adani Ports

• Maintained ‘Buy’ with price target of Rs 505.
• Announced fresh CAPEX of $1.2-1.4 billion to set-up LNG and LPG facilities.
• Strategic asset to grow its port’s operating income at a compounded growth rate of 16 percent over the financial years through March 2020.
• Fresh Capex shall be self-financing if the company is able to seal JV deals in-time.
• Still expect company to triple its dividend.

HSBC on Gateway Distriparks

• Maintained ‘Buy’; cut price target to Rs 230 from Rs 290.
• Rail business performance in December quarter was affected by Indian Railways’ track maintenance work.
• With leasing of additional rakes, performance set to improve from the previous quarter.
• CFS profitability per container improved as impact of direct port delivery scheme is normalising.
• Expect earnings to grow at a compounded rate of 23 percent through the financial years till March 2020.

Macquarie on Indian Banks

• Yes Bank - no exposure to Nirav Modi and Gitanjali.
• IndusInd - nil exposure to Nirav Modi and small double-digit exposure to Gitanjali Gems.
• IndusInd doesn’t have single NPL on book related to diamond financing.
• Maintain our cautious stance on PSU banks.

• Nifty February futures closed trade flat to spot at 10,378.5 versus premium of 1.3 points.
• Nifty March Futures at 10,416, a premium of 37 points.
• All series-Nifty Open Interest up 1 percent , Bank Nifty Open Interest down 5 percent.
• Rollovers: Nifty at 22 percent, Bank Nifty at 12 percent.
• India VIX ended at 16.6, up 1.7 percent.
• Maximum OI for February series at 11,100 call strike , OI at 49.1 lakh, Open Interest down 4 percent.
• Max OI for February series at 10,000 Put, OI at 47.7 lakh, up 3 percent.

F&O Ban

• In Ban: Balrampur Chini, Dish TV, Fortis Healthcare, GMR Infra, HDIL, Jain Irrigation, JP Associates, Oriental Bank.
• New In Ban: None.
• Out Of Ban: None.

Alert: Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

• Nifty PCR at 1.06 versus 1.07.
• Nifty Bank PCR at 0.89 versus 1.01.

• Aarti Industries buyback period from Feb. 20 to Mar. 06.

• Fortis Healthcare: Derive Investments bought 26.58 lakh shares or 0.5 percent equity at Rs 144.5 each.
• Electrosteel Steels: SCIIL Steel Cast Iron Investments (Cyprus) sold 1.50 crore shares or 0.6 percent equity at Rs 2.82 each.
• Punjab Alkalies & Chemicals: IFCI sold 2.67 lakh shares or 1 percent equity at Rs 23.08 each.

Vakrangee

• Martin Currie Global Emerging Markets Fund bought 71.33 lakh shares or 0.7 percent equity at Rs 257.3 each.
• New World Fund sold 1.06 crore shares or 1 percent equity at Rs 253.27 each.
• SmallCap World Fund sold 53.12 lakh shares or 0.5 percent equity at Rs 253.27 each.

RPG Lifesciences

• Nucleus Life Trust bought 24.49 lakh shares or 14.8 percent stake at Rs 452.85 each.
• Instant Holdings sold 24.49 lakh shares or 14.8 percent stake at Rs 452.85 each.

Laxmi Machine Works

• Samyaktva Constructions bought 70,000 shares 0.6 percent equity at Rs 5,825 each.
• Shamyak Investment bought 1.8 lakh shares or 1.6 percent equity at Rs 5,824.93 each.
• HDFC MF sold 3.68 lakh shares or 3.4 percent equity at Rs 5,825.07 each.

KEC International

• Instant Holdings bought 28.05 lakh shares or 1.1 percent equity at Rs 395.95 each.
• Stellar Energy Trust sold 28.05 lakh shares or 1.1 percent equity at Rs 395.95 each.

Mohini Health & Hygiene

• IA Diversified Fund sold 4.05 lakh shares at Rs 57.06 each.
• IIFL Wealth Finance sold 5.19 lakh shares at Rs 60.15 each.

• HDFC in M&A talks with Apollo Munich (Times of India).
• 2017 EY report red-flagged flaws in Gitanjali Gems (Economic Times).
• Binani Industries wants to take part in cement arm’s resolution process (Economic Times).
• Deccan Value is the top bidder for Amtek Auto (Economic Times).

• Vardhman Special Steels’ QIP closes today; Issue price fixed at Rs 140 apiece.
• Vascon Engineers signs pact with Lina Ashar Foundation to develop Pune land parcel.
• Advanced Enzyme Board approves additional investment of 300,000 ringgit in Malaysian unit.
• Gayatri Projects announces reorganisation of its energy business.
• Pratibha Industries says the lenders are advised to submit a resolution plan.
• Godawari Power & Ispat board approves amalgamation of Jagdamba Power & Alloys with self.
• UCO Bank seeks shareholders’ nod to issue shares worth up to Rs 6,510 crore on a preferential basis to the government.
• Fortis Healthcare clarifies that it hasn’t gotten any communication about an SFIO probe into the company. (Note: India’s serious fraud office is said to probe Fortis, Religare for alleged irregularities)
• Religare Enterprises approves raising funds through the issue of warrants worth Rs 916 crore.
• M&M to make an additional investment of over Rs 500 crore for electric vehicles and electric components at its Chakan plant.
• Sun Pharma unit's holding in Ranbaxy Malaysia to rise to 90.7 percent.

• West Texas Intermediate crude rose 1.6 percent to $62.64 a barrel.
• Gold was steady at $1,345.95 an ounce.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 10,344 as of 8:01 a.m.

Asian stocks declined with U.S. futures and the dollar rose as Treasury yields climbed back toward recent four-year highs. Traders return to their desks in Hong Kong on Tuesday, while Chinese markets reopen on Thursday.

In Asia, investors will be watching Bank of Japan Governor Haruhiko Kuroda’s appearance in parliament on Tuesday for any hints about tweaks to the central bank’s huge monetary stimulus program.

Speculation has been swirling about the possibility the BOJ is scaling back its stimulus since the central bank reduced its purchases of government bonds in January.