An Electronic Ticker Board Indicates the Closing Figures of the BSE Sensex at the Bombay Stock Exchange (Photographer: Prashanth Vishwanathan/Bloomberg)

Sensex, Nifty Post Third Weekly Loss Amid Setback For Ruling BJP

Closing Bell

Indian equity benchmarks extended decline to post their third weekly loss after a Modi government ally exited the ruling coalition.

Andhra Pradesh's Telugu Desam Party moved a no-confidence motion against the government in the Lok Sabha today, hours after party president N Chandrababu Naidu announced in Amaravati that the party was exiting the National Democratic Alliance.

This came as another blow for the Bhartiya Janata Party which lost key by-polls in Uttar Pradesh and Bihar earlier this week.

The S&P BSE Sensex fell 1.51 percent or 509.54 points to 33,176 and the NSE Nifty 50 index plunged 1.59 percent or 165 points to 10,195.

For the week, the Sensex declined 0.39 percent and the Nifty fell 0.31 percent.

All sector gauges compiled by BSE ended lower led by the S&P BSE Metal index's 2.3 percent drop.

Losses were broad-based as the S&P BSE MidCap and S&P BSE SmallCap indices fell 1 percent each.

Countdown

Ramky Infra Gains On Order Win

Shares of the Hyderabad-based construction company rose as much as 4.57 percent, the most since March 13, to Rs 205 after it won road construction project worth Rs 940 crore in Jammu & Kashmir.

Market Check

  • Indian equity benchmarks fell sharply in the last hour of trade on the back of a broad-based selloff after political uncertainties grew after Telegu Desam Party (TDP) decided to quit the ruling NDA government.
  • The S&P BSE Sensex fell 1.57 percent or 522 points to 33,162 and the NSE Nifty 50 index broke below its important psychological level of 10,200, down 1.58 percent or 166 points to 10,195.

GHCL Surges After Block Deal

Shares of the Noida-based chemical maker rose as much as 5.95 percent to Rs 284.90 after 29.4 lakh shares change hands in a block deal.

Steel Strips Wheels Gains On Repeat Order For Caravan Wheels

Shares of the Chandigarh-based steel wheel rim maker rose as much as 3.45 percent to Rs 1,070 after it won a repeat order from European Union for 1,30,000 caravan wheels, SSWL said in an exchange filing.

The wheels will be shipped from its manufacturing unit in Chennai.

Gravita India Gains On Order Win

Shares of the Jaipur based maker of metal and lead products rose as much as 6.2 percent to Rs 185 after it won orders worth Rs 300 crore for supplying pure lead and lead bullion from Kyen Resources, Singapore.

Power Lunch

Stocks Moving On Heavy Volumes

  • ITDC: The government-owned tourism service provider rose as much as 17 percent to Rs 526.80. Trading volume was 78.6 times its 20-day average.
  • Procter & Gamble: The Mumbai-based personal and beauty care products maker fell 0.98 percent to Rs 9,356.20. Trading volume was 11.5 times its 20-day average.
  • Navneet Education: The Mumbai-based book publisher rose as much as 17 percent to Rs 161.45. Trading volume was 9 times its 20-day average.
  • TV Today Network: The Delhi-based news broadcaster rose as much as 9 percent to record high of Rs 558. Trading volume was 14.7 times its 20-day average.

#Ask BQ

Energy Stocks Lead Decline On BSE

Shares of energy companies were among the worst hit in today's session. Gauge of energy shares compiled by BSE — the S&P BSE Energy index fell over 2 percent dragged by weakness in state-run oil marketing companies.

Hot Money

Market Check

  • Indian equity benchmarks extended decline dragged by weakness in metal and oil & gas shares.
  • The S&P BSE Sensex fell 0.7 percent or 242 points to 33,442 and the NSE Nifty 50 index slipped below its crucial psychological level of 10,300, down 0.7 percent or 73 points to 10,287.
  • Seventeen out of 19 sector gauges compiled by BSE were trading dragged by the S&P BSE Energy index's 1.8 percent drop.

Top five Nifty losers

  • Bharat Petroleum down 3.11 percent
  • Indian Oil down 2.99 percent
  • Tata Motors down 2.19 percent
  • HPCL down 1.95 percent
  • UltraTech Cement down 1.80 percent

Top five Nifty gainers

  • Aurobindo Pharma up 1.78 percent
  • Mahindra & Mahindra up 1.65 percent
  • Bharti Infratel up 1.15 percent
  • UPL up 0.94 percent
  • Yes Bank up 0.88 percent

Zensar Technologies Gains On Extending Partnership With Microsoft

Shares of the Pune-based technology firm rose as much as 2.57 percent to Rs 949 after it extended strategic partnership with Microsoft in South Africa for Global Systems Integrator market, Zensar said in a press release.

Trend Spotting

MMTC Surges For Second Day On Heavy Volumes

Shares of the Delhi-based state-run trading company rose as much as 12.56 percent to Rs 69.90 on top of yesterday's 20 percent gain as trading volumes surged.

Trading volume was 15.4 times its 20-day average for this time of the day.

Meanwhile, MMTC's board will meet on March 19 to discuss and consider proposal to issue bonus shares.

Adani Transmission Gains On Acquiring Fatehgarh-Bhadla Transmission SPV

Shares of the Ahmedabad-based electricity transmission company rose as much as 2.45 percent to Rs 188 after it acquired 100 percent stake in Fatehgarh-Bhadla Transmission special purpose vehicle (SPV) from PFC Consulting.

The F&O Show

Media Shares Outperform In Weak Session

Shares of the media companies were trading higher in an otherwise weak session. Gauge of media companies compiled by the National Stock Exchange — Nifty Media index rose as much as 1.2 percent led by gains in TV Today Network and TV18 Broadcast.

Religare Enterprises Falls 5% After Edelweiss Calls Off Deal

Shares of the Delhi-based diversified financial services company fell as much as 5 percent, the most since Feb. 28, to Rs 55.25 after Edelweiss Financial Services called off deal to acquire Religare's securities business after Religare failed to obtain the requisite clearances within the agreed timeline, Edelweiss said in an exchange filing.

Neuland Laboratories Surges After HDFC Securities Initiates Coverage

Shares of the Hyderabad-based drug maker rose as much as 5 percent to Rs 738 after HDFC Securities initiated coverage on the stock with a 'buy' for target price of Rs 1,065.

The brokerage in a note said:

  • Neuland likely to report a strong recovery in the next fiscal.
  • Expect 19 percent compounded growth rate in revenue and 800 basis point margin expansion and seven times earnings over the fiscal 2018-2020.
  • Growth driven by volumes in niche API and CMS business segments.
  • CMS and niche segment likely to contributed more than 55 percent of top line in the financial year-ending March 2020.
  • CMS - At inflection point; Business to grow at 16 percent compounded growth rate over the fiscal 2018-2020.
  • Niche APIs – low volume, quality products.
  • Expect surprise launches in CMS segment which has not been factored in.
  • Return ratios to recover fully by March 2020.
  • Current price offers an attractive opportunity for investors to entry.

ITDC Surges For Second Day On Heavy Volumes

Shares of the government owned tourism service provider rose as much as 14.17 percent to Rs 514.95 on top of yesterday's 20 percent surge on the back of heavy volumes.

Trading volume was 396.3 times its 20-day average for this time of the day.

JP Associates Surges After Rakesh Jhunjhunwala's Rare Enterprises Buys Stake

Shares of the Noida-based real estate and construction company rose as much as 14.84 percent, the most since March 15, to Rs 22.05 after ace investor — Rakesh Jhunjhunwala's Rare Enterprises bought stake in the company.

Rare Enterprises bought 3 crore shares or 1.2 percent equity stake in the company at Rs 18.37 per share valuing the deal at Rs 55 crore.

Opening Bell

Indian equity benchmarks edged lower dragged by weakness in Reliance Industries, Bharat Petroleum, Kotak Mahindra Bank and Tata Motors.

The S&P BSE Sensex fell 0.3 percent or 103 points to 33,584 and the NSE Nifty 50 index declined 0.3 percent or 33 points to 10,327.

Eleven out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal index's 1 percent drop. On the other hand, the S&P BSE Realty index was the top sectoral gainer, up 0.3 percent.

The broader markets were trading on a muted note as the S&P BSE MidCap and S&P BSE SmallCap indices were little changed.

IndianOpen

Money Market Heads Up!

Indian sovereign bonds are set for a second weekly gain after reports showed the government is in talks with the Reserve Bank of India to raise FII limit in government debt.

Easing inflation and ample liquidity is also supporting the sentiment. Yield on the 10-year note fell 5 basis points in the last session on the news. It may trade in a range of 6.58-6.65 percent in the session. Just to recap, yields are down 4 basis points this week.

In the currency market, implied opening from forwards suggest rupee will start trading slightly weaker from the last close of 64.93 a dollar.

The currency meanwhile is headed for its best week since end January. The rupee has gained 0.4 percent in the last four days. Traders see it trading between 64.80-65.10 a dollar in the day.

BQ Heads Up!

Brokerage Radar

Citi on Dish TV

  • Maintained ‘Buy’ with price target of Rs 90.
  • Merger effective around March 22.
  • New shares to commence trading early April.
  • Videocon will then put out time-table for its ADS holders.
  • Possible promoter transactions in focus.
  • Stock is attractively priced post the underperformance.
  • Target price assumes no synergy benefits.

Deutsche Bank on Power Finance Corp

  • Maintained ‘Buy’; cut price target to Rs 140 from Rs 160.
  • Stress from private sector likely.
  • Rs 17,000 crore of private assets poses risk of NPL classification and likely haircuts.
  • Management does not expect elevated haircuts from probable NCLT accounts.
  • Management guides 10 percent loan growth in the next fiscal.
  • Management says spreads/NIMs will be softer.
  • Adjusted price-to-book value post haircut will be 0.6 times, which is comforting.

Edelweiss on Berger Paints

  • Maintained ‘Buy’ with price target of Rs 293.
  • Remain positive on Berger .
  • Expect revival in volume growth as paint penetration is low.
  • Positive correlation between sector volumes and GDP growth..
  • Prudent portfolio premiumisation and innovation to spur gross margins
  • Expect revenue, operating income and net profit to compound at 16 percent, 19 percent and 20 percent respectively over the fiscal 2017-2020.

Kotak on Kaveri Seeds

  • Maintained ‘Sell’; cut price target to Rs 470 from Rs 535.
  • Cut in cap on Bt cotton seed prices by Rs 60 per packet to impact profitability.
  • Expect realisation to decline by Rs 20 per packet.
  • Concerns remain on further cuts in coming years.
  • Cut EPS estimates by 12-16 percent for FY19-20.
  • Retain negative stance given high dependence on Bt cotton seeds.

JPMorgan on Hindalco Industries

  • Maintained ‘Overweight’ with price target of Rs 335.
  • YTD stock price correction driven by aluminum price fall and worries about U.S. Section 232 impact.
  • Upstream impact minimal; Stock not pricing in even current LME prices.
  • Expect cost pressures to moderate as coal supplies have picked up.
  • See upside risks to India aluminum forecasts.
  • Novelis - Steady state EBITDA profile remains intact.
  • Hindalco to deliver Rs 20-25 per share as free cash flow.
  • Expect re-rating as downstream portfolio continues to grow.
  • Stock price correction versus steady business outlook is an opportunity to add.

HDFC Securities on Neuland Labs

  • Initiated ‘Buy’ with a price target of Rs 1,065.
  • Neuland likely to report a strong recovery in the next fiscal.
  • Expect 19 percent compounded growth rate in revenue and 800 basis point margin expansion and seven times earnings over the fiscal 2018-2020.
  • Growth driven by volumes in niche API and CMS business segments.
  • CMS and niche segment likely to contributed more than 55 percent of top line in the financial year-ending March 2020.
  • CMS - At inflection point; Business to grow at 16 percent compounded growth rate over the fiscal 2018-2020.
  • Niche APIs – low volume, quality products.
  • Expect surprise launches in CMS segment which has not been factored in.
  • Return ratios to recover fully by March 2020.
  • Current price offers an attractive opportunity for investors to entry.

All You Need To Know

Stocks To Watch

  • Yes Bank sells 1.12 crore shares or 2.17 percent stake in Fortis Healthcare on March 15.
  • Bharat Financial Inclusion completes third securitization transaction in FY18 for Rs 451 crore.
  • NCLT approves Brigade Enterprises’ scheme of arrangement.
  • Future Consumer Signs 50:50 joint venture pact with Bin Ablan Group.
  • Puravankara unit to invest Rs 500 crore for Goa Housing Project.
  • SpiceJet to shift 22 domestic flights to Delhi International Terminal 2.
  • Wipro invests $2.02 million to acquire 20 percent stake in Avaamo Inc.
  • IDFC Bank’s board approves scheme of amalgamation with Capital First.
  • Adani Transmission acquires 100 percent stake in Fatehgarh-Bhadla Transmission SPV from PFC Consulting.
  • PFC sais that Rs 17,000 crore or about 6 percent of loans of private power assets poses risk of NPL classification and likely haircuts (Concall).

IPO Watch

  • Bharat Dynamics IPO subscribed 1.3 times on final day.
  • Bandhan Bank IPO IPO continues on day 2. The issue is subscribed 0.4 times.
  • Hindustan Aeronautics IPO opens at an issue price of Rs 1,215- 1,240 apiece.
  • Karda Construction IPO opens at an issue price of Rs 175- 180 apiece.

F&O Cues

  • Nifty March Futures closed trading at 10,372 premium of 12 points versus 14.4 points.
  • March series: Nifty open interest up 3 percent, Bank Nifty open interest down 5 percent.
  • India VIX ended at 14.3, down 0.2 percent.
  • Max open interest for March series at 10,500 call strike (open interest at 50.9 lakh, up 13 percent).
  • Max open interest for March series at 10,000 Put (open interest at 46.3 lakh, down 6 percent).

Trading Tweaks

  • KPR Mill buy back period from March 16- April 2.
  • Future Market Networks circuit filter revised to 10 percent.

Bulk Deals

JP Associates

  • Rare Enterprises buys 3 crore shares at Rs 18.37 per share.

Jaypee Infratech

  • Indusind Bank Client Account sells 1.3 crore shares at Rs 10.12 per share.

Arvind

  • Nordea Fund sells 24.7 lakh shares at Rs 400.03 per share.

Indian Hotels

  • Tata Sons buys 7.9 crore shares at Rs 130.4 per share; Ratan Tata Trust, Dorabji Tata Trust and Tata Memorial Trust were among the sellers.

Bajaj Electricals

  • Bajaj Trading Company sells 25.4 lakh shares at Rs 625 per share.
  • Rahulkumar Bajaj buys 12.7 lakh shares at Rs 625 per share.

DayBreak

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 10,332 as of 6:51 a.m.

This week’s rally in Asian stocks petered out on Friday as weak volumes in the U.S. session overnight gave little impetus for traders ahead of next week’s Federal Reserve meeting. The dollar held on to gains.

Japanese and South Korean stocks were flat to down, while Australian equities climbed and Hong Kong futures pointed lower.

Here are some of the key things happening this week:

  • Revised Japanese industrial production data are out on Friday.
  • EU27 government officials discuss the European Union’s Brexit position.

Bonds

  • The yield on 10-year Treasuries slid about one basis point to 2.82 percent.
  • Australia’s 10-year yield dropped two basis points to 2.68 percent.

Commodities

  • West Texas Intermediate crude climbed 0.1 percent to $61.24 a barrel.
  • Gold was steady at $1,316.40 an ounce after falling 0.7 percent on Thursday.
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