A trader works at the BFAM Partners Ltd. office in Hong Kong, China. (Photographer: Justin Chin/Bloomberg)

Sensex, Nifty Halt Longest Losing Streak In A Month

Closing Bell

Indian equity benchmarks snapped their longest losing streak in a month, as easing concerns over trade tensions drove stocks across Asia higher.

The S&P BSE Sensex Index closed 0.9 percent higher at 33,338.78, while the NSE Nifty 50 Index closed at 10,235.95, up 0.8 percent.

However, the market breadth was tilted in favour of sellers. Fifteen out of 19 sectoral gauges compiled by BSE rose led by S&P BSE Realty Index’s 1.6 percent gain. On the flipside, S&P BSE Metal Index was the top sectoral loser, down 0.5 percent.

Countdown

Block Deal Alert

  • Dabur India: About 29 lakh shares changed hands in a separate block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg.

European Stocks Gain

Most European equity benchmarks traded higher amid mixed earnings reports.

Money Market Update

The Indian rupee slid further from the morning lows. The currency declined by 20 paise to at 64.91 against U.S. dollar as of 2:50 p.m.

Block Deal Alert

  • Dabur India: About 17 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg.

Abinash Verma, Director General At ISMA Speaks To BloombergQuint

  • Already getting 25 percent hike on sugarcane price than earlier.
  • Farmers producing sugarcane are assured of fair price, making it a lucrative crop.
  • Government doesn't compensate with the subsidy if company fails to pay fair remunerative price.
  • Saw higher sugarcane yields from Maharashtra, Karnataka this season.
  • Sugarcane cost in India is the highest in the world making exports difficult.
  • Sugarcane production in coming season will decide the future of industry.
  • Individual quota allotment to every sugar company will help the industry.

L&T Moves NCLT Seeking Dues From Bhushan Steel On Priority

Larsen & Toubro today moved the NCLT seeking higher priority in getting its dues from debt-laden Bhushan Steel which is undergoing insolvency proceedings.

Counsels appearing for L&T submitted before the bench that the company owes it Rs 900 crore in dues for the supply of capital goods.

Source: PTI

BQ Poll: Will Sensex, Nifty Snap Six-Day Losing Streak?

Ashoka Buildcon Swings After Winning Road Projects

Shares of the construction company swung between gains and losses and traded at Rs 266.90. The company won three road projects in Karnataka worth Rs.2,991.70 crore.

Ashoka Buildcon trades at 90 times its earnings per share for the coming year. The stock is 21 percent below the Bloomberg consensus one-year price target.

KEC International Gains After Order Win

Shares of the power transmitter snapped two-day decline and rose as much as 3.3 percent to Rs 418.70. The company won orders worth Rs. 1,378 crore, according to its stock exchange notification.

KEC International trades at 34.5 times its trailing 12-month earnings per share and 25 times its estimates for the coming year, Bloomberg data showed. The stock returned 151 percent in the last 12 months.

BQ Exclusive: Mehul Choksi Writes To ED, Says Will Join Probe When Passport Is Restored

Mehul Choksi wrote to the Enforcement Directorate on Feb. 26 that he has been communicating with passport authorities to have the passport restored. BloombergQuint obtained a copy of the letter he sent in response to ED’s summons. (More details here.)

Stocks Moving On Heavy Volumes

Uniphos Enterprises

  • Stock rose as much as 4.6 percent to Rs 84.50.
  • Trading volume was 13.9 times its 20-day average.

Fertilisers & Chemicals Travancore

  • Stock rose as much as 5 percent to Rs 54.60.
  • Trading volume was 9.5 times its 20-day average.

PTC India

  • Stock fell as much as 6.5 percent to Rs 92.15.
  • Trading volume was 7.2 times its 20-day average.

Power Lunch

NCLT Kolkata directs Binani Cement's Resolution Professional to file a reply on UltraTech's application.

#AskBQ

Aviation Stocks Fluctuate After CCI Imposes Penalty

Shares of Jet Airways, SpiceJet and InterGlobe Aviation fluctuated between gains and losses after the Competition Commission of India imposed penalties for concerted action in fixing and revising fuel surcharge on cargo transport.

Block Deal Alert

  • Delta Corp: About 10 lakh shares changed hands in a block deal.
  • Navin Fluorine: About 12.8 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg.

Hot Money

Smaller PSU Banks Take A Larger Hit

M Manickam, Chairman At Sakthi Sugars Speaks To BloombergQuint

Key highlights from the conversation:

  • Will see a lot of pressure mostly because of high cane prices.
  • We are sending signals that sugarcane prices need to be reduced. Otherwise, this problem cannot be solved.
  • The central government feels an increase in MSP will solve all the farmers’ problems, which is not true.
  • Rs 5000 crore arrears were already announced.
  • Seeing record arrears on the back of good production.
  • Don't see prices will slip too much lower.
  • Expect that the ethanol offtake will also rise.
  • Debt currently on books stands at Rs 700 crore.
  • Have restructured some debt through ARCs.

Trend Spotting

Lupin Pares Losses After Signing Pact

Shares of the pharmaceutical company parred early losses and rose as much as 0.8 percent to Rs 768.

The drugmaker today entered into an agreement with CSIR-National Chemical Laboratory, Pune and Department of Science and Technology, Delhi for researching a continuous purification process development of a biosimilar monoclonal antibody therapeutic, according to its stock exchange notification.

The stock trades at 19.3 times its estimated forward earnings per share and 20.6 times for its two-year historical average, Bloomberg data showed.

Amtek Auto Rise Liberty House Says It Is Preferred Bidder

Shares of the Gurugram-based auto parts maker rose as much as 5.3 percent to Rs 23.8. The stock rose after falling for five consecutive sessions.

The U.K.-based Liberty House says it is a preferred bidder for Amtek Auto Ltd., according to Bloomberg. Amtek Auto is among the distressed companies that the Indian government has put for sale.

The stock has fallen more than 20 percent this year.

Block Deal Alert

  • Wipro: About 13.3 lakh shares changed hands in a single block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg.

Sugar Makers Slide On Record Production Outlook

Shares of leading sugar manufacturers fall after Indian Sugar Mills Association said yesterday that the country’s output of the sweetener might climb to a record this year.

India produced 23.05 million metric tonnes of sugar in the current season compared with 16.26 million a year ago, according Indian Sugar Mills Association. That’s because crushing operations started much earlier and at full capacity compared with last year on higher cane production. (more details here.)

The F&O Show

Block Deal Alert

  • Dabur India: About 43.2 lakh shares changed hands in two block deals.

Buyers and sellers were not known immediately

Source: Bloomberg

Jaiprakash Associates Declines After Government Terminates Contracts

Shares of the Noida-based industrial conglomerate firm fell as much as 6.8 percent to Rs 13.75, dropping for the sixth straight day.

The coal ministry ordered for the termination of a development pact for a coal mine in Madhya Pradesh for violating contract terms by Jaypee Cement, according to Bloomberg.

The stock fell almost 47 percent so far this year compared to the benchmark index, Sensex’s 2.7 percent decline.

Aegis Logistics Halts Six-Day Decline After Receiving Its Most Bullish Price Target Yet

Shares of the LPG distributor halted six-day decline and rose as much as 9.1 percent to Rs 249.20.

Homegrown brokerage Motilal Oswal expects its shares to reach Rs 342 in the next 12 months in best case scenario, according to its research report, the price target implies a potential upside of 50 percent form the last regular trade.

This is the highest price target that Aegis Logistics has received so far, among the analysts tracked by Bloomberg.

Key highlights from the research report:

  • Attractive play on India’s rising LPG consumption.
  • Continue to believe in Aegis’ structural growth story.
  • Aegis to be the biggest beneficiary of rising LPG imports.
  • Ramp-up of Haldia and Pipavav terminals to drive throughput.
  • Gas sourcing and retail & distribution segment to grow at steady pace.
  • Liquids division remains a cash cow.
  • Expect LPG throughput, operating income and earnings per share to compound at 51 percent, 42 percent and 51 percent respectively over fiscal 2017-2020.
  • Expect strong free cash flow as major capex behind.
  • Expect return on equity and return on capital employed to improve to 35 percent and 31 percent respectively by March 2020.
  • Management expected to announce new gas terminal in coming days.
  • Further capacity expansion by March 2019 will pose an upside risk.

Telecom Shares Rally After Government Extends Timeline For Spectrum Payment

The S&P BSE Telecom Index snapped five-day decline and rose as much as 2.04 percent to 1,378.50, after the shares in the index rallied, as the Cabinet yesterday allowed extending the time for payment of spectrum liabilities and relaxing spectrum holding limits.

Gopal Sarda, CEO At Kolte Patil Speaks To BloombergQuint

Key highlights from the conversation:

  • Recorded highest collection in 18 quarters.
  • Prices have been stable for last 6-8 quarters.
  • Price discount applicable to only certain periods of time like festivals.
  • Realisation impacted due to GST.
  • Will close the year with around 2.2 million square feet in sales.
  • Have around 12-14 redevelopment projects in Mumbai.
  • Expect Mumbai and Bangalore to contribute 25 percent by 2020 and 45 percent by 2022.
  • Working with 14 percent ROCE and 13 percent ROE.
  • Expect ROCE to expand to 18-20 percent by 2020.

Mohammed Apabhai, Head Of Asia-Pacific Trading Strategies At Citi Speaks To BloombergQuint

Key highlights from the conversation:

  • Impact of imposing tariffs will be significant.
  • More interesting to see what other trade partners do if the tariff is imposed.
  • Difficult to differentiate reality from a bluff.
  • Equity markets are not concerned about a potential trade war.
  • Volatility continues to be at elevated levels.
  • Volatility is keeping investors at bay.
  • A break below the start of the year levels for the U.S. market would result in further liquidation.
  • Seeing currency and bond markets weakening in India and Philippines.

Bhushan Steel Surges After Tata Steel Emerges Highest Bidder

Shares of the debt-ridden steelmaker rose as much as 20 percent to Rs 48.70 after Tata steel emerged as its highest bidder

The steelmaker is currently in discussions with the resolution professional and advisors to the Committee of Creditors on the resolution plan it had submitted, it said in an exchange filing today.

Tata Steel is currently in discussions with the resolution professional and advisors to the Committee of Creditors on the resolution plan it had submitted, according to its stock exchange notification. (more details here).

Bhushan Steel’s trading volume was 7.3 times its 20-day average. The stock declined 14 percent since the beginning of the year.

Opening Bell

Indian equity benchmarks snapped six day losing streak, led by Bharti Airtel and select private lenders.

The S&P BSE Sensex Index opened 0.6 percent higher at 33,244.52, while the NSE Nifty 50 Index opened at 10,216.25, up 0.7 percent.

The market breadth was tilted in favour of buyers. All the 19 sectoral gauges compiled by BSE traded higher, led by S&P BSE Realty Index’s 1.5 percent gain.

Indian Open

Rupee Snaps Four-Day Gains

The Rupee snapped four day gains after sliding down by 3 paise to open at 64.91 against U.S. dollar in today’s trade.

The american currency index strengthened after White House spokesperson Sarah Sanders said "there are potential carve outs” for the northern nation in the coming tariffs.

Besides, the 10-year bond yield slid 0.2 percent to trade at 7.66 levels.

BQ Heads Up!

Money Market Update

Traders got some relief yesterday with sovereign bonds gaining by the most in nearly two months as buying interest returned. Gains were bolstered after the government made a pitch for a ratings upgrade to Fitch Ratings.

The benchmark 10-year yield fell 10 basis points to 7.68 percent. Sustainability of bond gains is the key question as has been the case with such recent rallies, Edelweiss Securities said in a note late Wednesday

“Bonds are still very much susceptible to global and domestic triggers, and so the rally needs to be backed by continued position-building momentum via the large investors,” Edelweiss said. “The market's focus will turn today to global factors like U.S. yields and crude oil prices.”

Concern on both these fronts has helped drive yield gains for seven straight months.

The rupee gained 0.1 percent Wednesday to 64.89 against the dollar for the fourth day of losses. Forward imply the currency will start trading around 64.94.

Bandhan Bank Sets Price Range For IPO

Bandhan Bank Ltd. has set the price range for its initial public offering in India, which could raise as much as Rs 4,473 crore, according to terms for the deal obtained by Bloomberg.

  • Company to offers shares at Rs 370-375 apiece
  • Anchor books open/close on March 14
  • Bid/issue opening date is March 15, closing date March 19

According to the terms, company aims to finalize basis of allotment around March 22, start trading around March 27. The proceeds will be used to augment bank’s Tier 1 capital base.

JPMorgan, Kotak Mahindra Capital, Axis Capital, Goldman Sachs, JM Financial are book-running lead managers

F&O Cues

  • Nifty March futures closed trading at 10,171.5 premium of 17.3 points versus discount of 0.6 points.
  • All series: Nifty open interest down 2 percent , Bank Nifty open interest down 2 percent.
  • India VIX ended at 15.7, down 3.3 percent.
  • Max open interest for March series at 10,600 call strike (open interest at 51.3 lakh, up 34 percent).
  • Max open interest for March series at 10,000 Put (open interest at 40.8 lakh, up 10 percent).

F&O Ban

  • In ban: Dewan Housing, HDIL, IDBI, Oriental Bank
  • Out of ban: Fortis Healthcare

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 1.08 versus 1.13.
  • Nifty Bank PCR at 0.59 versus 0.66.

Brokerage Radar

Motilal Oswal On Aegis Logistics

  • Initiated ‘Buy’ with price target of Rs 303.
  • Attractive play on India’s rising LPG consumption.
  • Continue to believe in Aegis’ structural growth story.
  • Aegis to be biggest beneficiary of rising LPG imports.
  • Ramp-up of Haldia and Pipavav terminals to drive throughput.
  • Gas sourcing and retail & distribution segment to grow at steady pace.
  • Liquids division remains a cash cow.
  • Expect LPG throughput, operating income and earnings per share to compound at 51 percent, 42 percent and 51 percent respectively over the fiscal 2017-2020.
  • Expect strong free cash flow as major capex behind.
  • Expect return on equity and return on capital eomployed to improve to 35 percent and 31 percent respectively by March 2020.
  • Management expected to announce new gas terminal in coming days.
  • Further capacity expansion by March 2019 will pose an upside risk.
  • Bull case price target of Rs 342.

Angel Broking on Ashok Leyland

  • Initiated ‘Buy’ with price target of Rs 163.
  • Vehicle scrappage policy to trigger growth.
  • Ashok Leyland set to capture additional growth opportunity.
  • GST, improved rural demand and boom in e-commerce to drive LCV demand.
  • To launch one product every six months.
  • Targeting to capture new export markets.
  • Expect net profit to compound at 19 percent over the fiscal 2017-2020 due to improvement in replacement demand.

INDSEC on Time Technoplast

  • Initiated ‘Buy’ with price target of Rs 224.
  • Dominant player in Industrial Packaging.
  • Established products to maintain steady growth.
  • Value added products-catalyst to margin expansion.
  • Composite Cylinders– enormous opportunity for the company to capitalize.
  • Company to Capitalize on huge demand for DWC Pipes.
  • Mox Films – New product offering to benefit in the long run.
  • Remain positive on prospects of Time Techno, given dominant position and nature of products.

JP Morgan on Grasim Industries

  • Maintained overweight; revised price target to Rs 1450 from Rs 1375 per share, implying a potential upside of 30 percent from the last regular trade.
  • Grasim offers attractive risk-reward at current levels.
  • Trading at a 52 percent Hold Co discount -near all-time high levels.
  • Discount despite strong operating performance, receding capital allocation concerns.
  • Standalone biz i.e. VSF & caustic business offers steady growth.
  • Large capex plan of Rs 6500 crore over three years in high ROCE business a positive.
  • Idea’s recent capital rasing plan allays investors’ concerns of meaningful investments.

Bulk Deals

  • Punjab Alkalies and Chemicals: IDBI Bank sold 8 lakh shares or 3 percent equity at Rs 30.7 each.

TeamLease Services

  • Heineken bought 3.71 lakh shares or 2.2 percent equity at Rs 2,150.04 each.
  • Indus India Fund (Sv) bought 1.06 lakh shares or 0.6 percent equity at Rs 2,150.04 each.
  • HDFC Prudence fund sold 6 lakh shares or 3.5 percent equity at Rs 2,150.02 each.

Harrisons Malayalam

  • Promoter Carniwal Investment sold 13 lakh shares or 7 percent equity at Rs 77.75 each.
  • Vayu Udaan Aircroaft bought 13 lakh shares or 7 percent equity at Rs 77.75 each.

Foods Inn

  • Shital P Dalal sold 10,000 shares or 0.6 percent equity at Rs 1,450 each.
  • Salim Mohammed Hussein Punjani bought 11,043 shares or 0.7 percent equity at Rs 1,449.56 each.

Media Reports

  • Heineken looks to buy ED seized Mallya shares in United Breweries to up stake to 58.2 percent from 44 percent now (Economic Times).
  • Dalmia Bharat Cement acquisition of Binani Cement approved (Mint).
  • India is said likely to cut Monsanto GM Cotton Seed Royalty (Economic Times).

Stocks To Watch

  • Cadila Health partners with Medicure to launch New Drug Application product, Zypitamag in U.S.
  • Canara Bank hikes marginal cost loan rates by 10-15 basis points.
  • Bharat Dynamics to raise around Rs 960 crore from IPO.
  • Hero MotoCorp launches new Super Splendor at Rs 57,190 (ex-showroom, Delhi).
  • JSW Steel clarifies it hasn't signed any memorandum of understanding to buy Italy's Aferpi.
  • RBI imposes Rs 40 lakh penalty on SBI for breach of norms on counterfeit notes.
  • CCI imposes penalties collectively worth Rs 55 crore on Jet Airways, IndiGo and SpiceJet for concerted action in fixing fuel surcharge on cargo transport.
  • Pidilite Industries partners with Germany’s Jowat SE for sale and distribution of Jowat adhesives in India and other neighbouring countries.
  • HDFC to sell 5.1 percent stake in Computer Age Management Services Pvt. Ltd..
  • 3i Infotech allots 21.05 lakh preferential shares to Bank of Baroda under DRS package.
  • Tata Steel says it is the highest bidder to acquire Bhushan Steel.
  • 63 Moons Technologies says Mauritius regulator terminated exchange license.
  • Strides Shasun to launch Ranitidine 75mg (OTC) tablets in U.S.
  • Reliance Infra seeks shareholder nod for raising up to Rs 2,000 crore via QIP.
  • Coal India defers meeting to consider interim dividend to March 19.
  • Torrent Power to commission 124.40 MW project for Maharashtra Electricity Distribution Company
  • Marico sells entire 45 percent stake in Bellezimo Professionale products for Rs 1.6 crore.
  • Gayatri Projects QIP opens today at a floor price of Rs 211.65 per share.
  • Telecom companies: Cabinet approves restructuring of deferred payment liabilities of telecom operators and raises spectrum limits.
  • Bharti Airtel to consider raising funds via local, foreign bonds.

Talking Points

  • TDP pulls out of NDA Government, ministers to resign.
  • CCI imposes penalties on airlines for cartelization.
  • Government allows telecom firms more time to pay spectrum dues.
  • India’s EESL will issue fresh tender for 10,000 EVs today.
  • NCLT to hear Liberty’s plea on Bhushan Power bid today.
  • India sugar exports may climb to four-year high on record output.
  • Air India to start Tel Aviv Flight from March 22, Spokesman to Bloomberg
  • Kia Plans India Push with small cars after China, U.S. sales dip.

Commodity Cues

  • West Texas Intermediate crude inched up 0.3 percent to $61.31 a barrel after dropping 2 percent.
  • Brent snapped three-day winning streak, ended lower at $64.3 per barrel, down 2.2 percent.
  • Gold was steady at $1,325.81 an ounce.
  • Sugar ends lower for second day at 12.8 cents per pound, down 4.9 percent.

Shanghai Exchange

  • Steel trades lower for fifth day; down 1.3 percent.
  • Aluminium trades lower for second day; down 1.1 percent.
  • Zinc trades lower; down 0.8 percent.
  • Copper snaps two-day winning streak; down 0.8 percent.
  • Rubber trades lower for third day; down 0.04 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,210 as of 8:05 a.m.

Asian stocks advanced as worries surrounding a trade war dissipated and U.S. equities recouped losses. Investors spooked by the departure of pro-trade adviser Gary Cohn took solace from suggestions that President Donald Trump’s tariff plan will spare select countries from much of the impact.

Attention now turns back to central banks with investors honing in first on the commentary emanating from the European Central Bank’s policy meeting Thursday, then to the Bank of Japan, which concludes its discussions Friday.

Here are some key events coming up this week:

  • The Chinese People’s Political Consultative Conference runs through March 15 and overlaps with the National People’s Congress meetings in Beijing, through March 20.
  • China reports on its trade balance on Thursday.
  • The ECB isn’t expected to change policy on Thursday, but the Governing Council may discuss a change to pave the way for the end of quantitative easing.
  • BOJ monetary policy decision and briefing on Friday.
  • U.S. monthly payrolls data come Friday.

Currencies

  • The Bloomberg Dollar Spot Index was up less than 0.1 percent.
  • The Japanese yen fell less 0.1 percent to 106.17 per dollar.
  • The euro lost 0.1 percent to $1.2399.
  • The British pound rose less than 0.1 percent to $1.3904.
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