A trader monitors financial data on computer screens a trading floor. (Photographer: Chris Ratcliffe/Bloomberg)

Sensex Ends Five-Day Losing Streak Led By Infosys, HDFC

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Closing Bell

Indian equity benchmark halted five-day losing streak, lead by the gain in index's heavyweights Infosys and HDFC.

The S&P BSE Sensex Index closed 0.2 percent higher at 32,996.76. On the other hand, NSE Nifty 50 Index closed at 10,124.35, up 0.3 percent.

The market breadth, however, was tilted in favour of sellers. Seven out of 11 sectoral gauges compiled by NSE Ltd. advanced, led by NSE Nifty 50 Index's 1.5 percent gain. On the flipside, NSE Nifty Realty Index was the top sectoral loser, down 0.4 percent.

Countdown

Pratt Is Said to Ship Spare Engines For Grounded IndiGo Jets Within 40 Days, Shares Surge

Shares of the budget carrier operator snapped four-day decline and rose as much as 2.7 percent to Rs 1,248.30.

Pratt & Whitney will provide spare engines within 40 days to get all grounded Airbus SE A320neo aircraft at India’s IndiGo flying again, with the first delivery scheduled for Wednesday, Bloomberg reported, quoting people familiar with the matter.

The stock has returned 38.3 percent in the past 12-months, compared to 13.2 percent advance in Sensex.

Stocks Moving On Heavy Volumes

Elpro International

  • Stock rose as much as 19.9 percent to Rs 49.55.
  • Trading volume was 11.7 times its 20-day average.

Gujarat State Petronet

  • Stock fell as much as 7.7 percent to Rs 173.65.
  • Trading volume was 6 times its 20-day average.

EIH Associated Hotels

  • Stock rose as much as 20 percent to Rs 552.60.
  • Trading volume was 5.1 times its 20-day average.

Dhanlaxmi Bank

  • Stock rose as much as 11.5 percent to Rs 23.85.
  • Trading volume ws 4.1 times its 20-day average.

Power Lunch

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Sugar Stocks Rally After Government Scraps Export Duty

Shares of sugar makers rallied in today's trade after the government scrapped export duty.

Cipla Says Eight Observations By U.S. FDA For Goa Unit Are Procedural

Cipla Ltd. received eight observations regarding manufacturing practices at its Goa plant that contributes a quarter of the drugmaker’s sales in the U.S.

The facility of India’s second-largest pharma company by market value was inspected from Jan. 22 -25, according to a Form 483 issued by the U.S. Food and Drug Administration, a copy of which was obtained by BloombergQuint (More details here).

Shares of Cipla declined 0.9 percent to Rs 555.60 apiece.

Hot Money

Ashni Biyani, Director At Future Consumer Group Speaks To BloombergQuint

Key highlights from the conversation:

  • Will close the year at 40 percent growth.
  • Expect growth story to continue for another year following operating leverage.
  • Expect cross margin efficiencies to go up.
  • Will turn cash positive in three years.
  • Will open multiple small format stores.
  • Brand tasty treat is a category that will help expand topline and margin growth.
  • Target 50-60 percent growth (YoY).
  • Hoping to reach a turnover of Rs 5000 crore next year.

Prakash Tulsiani, Executive Director and CEO At Allcargo Logistics Speaks To BloombergQuint

  • Looking at dedicated freight corridor for growth.
  • Have identified Hyderabad and Bengaluru as areas of growth.
  • Will look at M&A activity if its strategic fit.
  • To spend Rs 700 crore capex in next 3-5 years.
  • Have a capex plans in order to develop business.
  • Expect 20-25 percent growth from contract logistics space going ahead.
  • Will see highest growth from contract logistics space.
  • Order book in project logistics space is healthy.
  • Consumption cycle in India remains very strong.
  • investment cycle in India has picked up.
  • Looking at a multi-modal logistics park in Jhajjar.
  • Will be developing logistics parks in the future.
  • Mundra facility did not deliver the right RoCE or profitability.
  • Growing upwards of 10 percent in MTO segment.
  • Growth in MTO segment outpacing the market.

Trend Spotting

Videocon Industries Pares Loss After Selling Insurance Arm

Shares of Videocon Industries pared early losses and rallied as much as 3.8 percent to Rs 14.90. The company exited insurance business by selling its unit Videocon General Insurance Company Ltd.

Videocon Industries, which was holding 51.32 percent of the share capital of Liberty Videocon sold 26 percent to Diamond Dealtrade and the remaining 25.32 percent to Enam Securities, according to its stock exchange notification.

Block Deal Alert

  • Prism Cement: About 28 lakh shares changed hands in three block deals.

Buyers and sellers were not known immediately.

Source: Bloomberg

The F&O Show

Aviation Stocks Take Off After Domestic Passenger Traffic Grows The Fastest In 13 Months

Airline stocks, today gained after the domestic passenger traffic grew 24 percent over the year-ago period, according to data released by the Directorate General of Civil Aviation, on the back of improving affordability, low penetration and favourable government policies.

Binani Industries Gains After UltraTech Signs Pact

Shares of the Binani Cement's parent were locked in upper circuit. UltraTech Cement, yesterday, agreed to issue a letter of comfort for its increased bid to the cement maker’s lenders for termination of insolvency proceedings at the Kolkata bench of the NCLT, according to its exchange filing.

Trading volume was 7.8 times its 30-day average. The stock declined 29.4 percent so far this year, compared to 3.1 percent decline in Sensex.

Future Retail Gains After RBI Increases FII Limit

Shares of the hypermarket operator rose as much as 2.9 percent to Rs 544.95

The country’s central bank increased the company’s FII/FPI limit to 49 percent from 24 percent, according to its media statement.

The stock has returned 107 percent in the past 12 months, compared to 26.7 percent gain in Sensex.

Canara Bank Declines After Former Chairman Named In Fraud Case

Shares of the state-run lender extended decline for the second day and fell as much as 5.4 percent, the most in nearly two weeks to Rs 250.

The CBI today charged former Chairman and Managing Director RK Dubey and two of the then executive directors of the Canara Bank of cheating and forgery in the alleged loan default of over Rs 68 crore sanctioned in 2013, officials told PTI.

Trading volume was three times its 20-day average. The stock is 30 percent below the Bloomberg consensus one-year target price.

Indian Open

Opening Bell

Indian equity benchmarks opened lower after the indices were weighed by Kotak Mahindra Bank, Axis Bank and SBI.

The S&P BSE Sensex Index fell as much as 0.3 percent to 32,810.86, while the NSE Nifty 50 Index fell as much as 0.5 percent to 10,049.10.

The Market breadth was tilted in favour of sellers. All the 11 sectoral gauges, compiled by NSE Ltd fell, led by NSE Nifty Metal index's 2.5 percent decline.

Money Market Update

Sovereign bonds may gain today on a report that the government and RBI will meet next week to review raising foreign investment cap in government bonds. FII limit could be increased to 6-8 percent of total outstanding over about five years, and the increase is likely in phases, BTVI reported.

Later in the day, RBI will hold 220 billion rupees of 14-day term repo auction and 300 billion rupees of 7-day reverse repo auction.

Technicals, on the other hand, show that the dollar-rupee pair could trade toward the top of February range after the bullish close. The implied opening of forwards suggests onshore rupee may start trading around 65.23 today.

BQ Heads Up

Brokerage Radar

Morgan Stanley on Metals

  • Hindalco: Downgraded to ‘Equalweight’ from ‘Overweight’; cut price target to Rs 256 from Rs 292.
  • Vedanta: Maintained ‘Overweight’; cut price target to Rs 386 from Rs 395.
  • Coal India: Maintained ‘Underweight’; raised price target to Rs 245 from Rs 221.
  • Vedanta benefits from strong volume growth in aluminium and zinc.
  • Hindalco’s earnings are geared to aluminium prices; Volumes have peaked.
  • Upside risk to Coal India’s earnings is less likely.

Motilal Oswal on Shilpa Medicare

  • Maintained ‘Buy’ with a price target of Rs 749; implying a potential upside of 53 percent from the last regular trade.
  • Issuance of EIR by U.S. FDA comforting.
  • EIR lowers regulatory risk over medium term.
  • Strong oncology ANDA pipeline pending for approval.
  • Oncology API and CRAMS on steady track.
  • Expect revenue and net profit to compound at a rate of 16 percent and 35 percent respectively over the fiscal 2017-2020.

Credit Suisse on Zee Entertainment

  • Maintained ‘Outperform’ with a price target of Rs 650.
  • Digital platform Zee5 launched with differentiated content.
  • Await response to Zee5.
  • Advertising growth remains strong.
  • Subscription income should grow mid-teens.
  • Regional remains a key focus area.
  • Operating margins to remain strong.

CLSA on SBI Subsidiaries Meet

  • Subsidiaries scaling up well.
  • Potential listing can unlock value.
  • Subsidiaries are seeing healthy growth – better than parent.
  • Listing of AMC/others can unlock value.
  • Insurance – Large in life, but smaller in general.
  • SBI Card – among the fastest-growing companies.
  • SBI Funds – Growing, but lags on profitability.

CLSA on HCL Tech

  • Maintained ‘Buy’ with a price target of Rs 1,170.
  • Building HCL into a next gen IT services business.
  • Revenue trajectory to remain robust.
  • Organisational structure aids agility.
  • Strategic bet on IP licensing in the creation of its own IP.
  • Valuations attractive; Top pick in sector.

F&O Cues

  • Nifty March Futures closed trading at 10,122.8, premium of 28.8 points from 37 points.
  • March series: Nifty open interest down 3 percent, Bank Nifty open interest up 5 percent.
  • India VIX ended at 15.8, up 4 percent.
  • Max open interest for March series at 10,500 call strike (open interest at 66 lakh, up 13 percent).
  • Max open interest for March series at 10,000 Put (open interest at 62.9 lakh, up 36 percent).

F&O Ban

  • In ban: BEML, Dewan Housing, HDIL, IDBI Bank, JP Associates, Reliance Communications, SAIL.
  • New in ban: Reliance Communications.
  • Out of ban: Bank of India, TV18 Broadcast.

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 1.04 from 1.09.
  • Nifty Bank PCR at 0.99 from 1.02.

New Offerings

  • Bandhan Bank IPO subscribed 14.6 times on final day.
  • Hindustan Aeronautics IPO continues on day 3. The issue is subscribed 0.45 times.
  • Karda Construction IPO continues on day 3. The issue is subscribed 1.24 times.
  • Sandhar Technologies IPO continues on day 2. The issue is subscribed 0.02 times.

Trading Info

  • Igarashi Motors acquisition window for takeover from March 20 to April 4.

Bulk Deals

  • TD Power Systems: India Value Fund IV sold 6 lakh shares or 1.8 percent equity at Rs 201 each.
  • GSS Infotech: Elara India Opportunities Fund bought 1 lakh shares or 0.6 percent equity at Rs 67.5 each
  • Samtel Color: ICICI Bank Ltd A/c ICICI Treasury sold 4.29 lakh shares or 0.5 percent equity at Rs 0.45 each.
  • Punjab Alkalies & Chemicals: IDBI Bank sold 5.25 lakh shares or 1.9 percent equity at Rs 36.4 each.

Sintercom India:

  • India Max Investment Fund sold 8 lakh shares at Rs 73.97 each
  • Jagdish Master bought 7 lakh shares at Rs 74 each

Stocks To Watch

  • Binani Industries says Binani Cement will apply to NCLT for insolvency exit and sell assets to UltraTech.
  • BGR Energy Systems wins order worth Rs 87.68 crore from Tamil Nadu Transmission Corporation.
  • Granules gets ANDA approval for Metformin tablets.
  • Inox Wind offer for sale to non-retail gets 122 percent demand for shares offered.
  • Sona Koyo offer for sale to non-retail gets 28 percent demand for shares offered.
  • IndiGo market share at 39.9 percent versus 39.7 percent (MoM).
  • Jet Airways at 16.8 percent versus 16.6 percent (MoM).
  • SpiceJet at 12.4 percent versus 12.6 percent (MoM).
  • GAIL plans pipeline to link Northeast India to National Gas Grid (Bloomberg).
  • Nitesh Estates says discussions with investors for Pune Mall in advanced stage and is expected to conclude by April 30.
  • IFCI says Supreme Court has upheld the sale of the assets of Blue Coast Hotels for recovery of dues.
  • RBI allows raising FPI limit in Future Retail to 49 percent from 24 percent.
  • Religare Enterprises says India Horizon Fund has withdrawn its petition against the company.
  • Prism Cement's JV completes expansion of tiles capacity at Matel plant, Morbi.

Talking Points

  • Uttam Galva offers 51 percent of outstanding loan to avoid asset auction.
  • Technical glitches plague Air India, Jet Airways, SpiceJet Planes too
  • CBI charge sheet against former Canara Bank Chairman in loan default case.
  • Essar Steel re-bidding issue may be taken up on Wednesday.
  • SEBI exempts centre from open offers for six state-owned lenders post capital infusion.
  • What to expect from the Fed this week: El-Erian.
  • Uber is pausing autonomous car tests in U.S. after fatality.

Commodity Check

  • West Texas Intermediate crude for April delivery, which expires on Tuesday, dropped 28 cents to settle at $62.06 a barrel on the New York Mercantile Exchange.
  • Brent traded higher at $66.21 per barrel; up 0.2 percent.
  • Gold rose 0.2 percent to $1,317.06 an ounce.
  • Sugar snapped two-day losing streak, ends at 12.9 cents per pound; up 1.9 percent.

Shanghai Exchange

  • Steel trades lower for third day; down 0.4 percent.
  • Aluminium trades higher for second day; up 0.1 percent.
  • Zinc trades lower; down 0.2 percent.
  • Copper trades lower for third day; down 0.5 percent.
  • Rubber trades lower for third day; down 0.8 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 10,084 as of 6:55 a.m.

Stocks in Asia fell, following U.S. equities lower after a sell-off in technology shares bruised trader sentiment before a key Federal Reserve policy meeting. Equities fell from Japan to Australia and technology stocks were the biggest drag on the MSCI Asia Pacific Index.

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