Sensex, Nifty Fall Most In Two Weeks Amid Rising U.S.-China Trade Tensions

Indian equity benchmarks fell most since March 23 dragged by banking and metal shares after China imposed reciprocal tariffs on the U.S. imports.

The S&P BSE Sensex fell 1.05 percent or 351.56 points to 33,019.07 and the NSE Nifty 50 index tumbled 1.14 percent or 116.60 points to 10,128.40.

All but one of the 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Metal index’s 2.6 percent drop. On the flipside, the Nifty Auto index was the lone gainer, up 0.4 percent.

Losses were broad-based as the S&P BSE MidCap fell 0.9 percent and the S&P BSE SmallCap index declined 1 percent.

Banking shares extended losses dragged down by weakness in Bank of Baroda, Kotak Mahindra Bank and Yes Bank. Gauge of banking shares on the National Stock Exchange — Nifty Bank index slumped 1.5 percent to 24,147.

• Tata Motors: The Mumbai-based auto maker rose as much as 6 percent, the most in six months, to Rs 363.70 on the back of strong JLR volume growth and new launches.
• Zensar Technologies: The Pune-based IT firm rose as much as 9.13 percent, the most in five months, to Rs 986.80 after it won a four-year multi-million-dollar contract from the City of San Diego for network services, Zensar said in an exchange filing.
• Akzo Nobel: The Gurgaon-based paint maker rose as much as 10 percent, the most since March 23, to Rs 1,979, its highest level in nearly three months after it informed exchanges that its board will meet on April 6 to discuss proposal to buy back its own shares.
• GNA Axles: The Hoshiarpur-based rose as much as 10.47 percent to record high of Rs 504.40 after North America Class 8 Truck orders jumped 103 percent to 46,300 units in March compared with 22,765 units during the same month last year.

Shares of the Delhi-based Royal Enfield bike maker rose as much as 4.5 percent, the most in over two months, to Rs 29,250 after global brokerage houses CLSA and Jefferies maintained their buy call on the stock.

CLSA in a note said:

• Maintained ‘Buy’ with a price target of Rs 39,300.
• Announcement of capacity expansion indicates good growth visibility.
• New capacity to come on-line by H2FY20; Full ramp-up in FY21.
• Expect 15 percent compounded growth rate in volume through the financial years till March 2021.
• Expansion indicate strong demand growth outlook for next 2-3 years.

Jefferies said:

• Maintained ‘Buy’ with a price target of Rs 31,880.
• Production guidance for the current fiscal raised to 950k units versus 900k.
• Vallam Phase 2 will take capacity to over 1.2 million units.
• Reiterates strong demand environment.

Even as global stocks slump due to the escalation of trade tensions between the U.S. and China, investors are flocking to safe-haven assets like gold. The precious metal rose as much as 0.92 percent to $ 1,345.06 per ounce.

Trade tensions once again were the central focus for global markets on Wednesday, with Asian and European equities turning lower amid an escalation of protectionist rhetoric between the world’s top two economies. U.S. share futures also fell and the dollar drifted with Treasuries.

• Indian equity benchmarks fell sharply dragged by weakness in banking and metal shares after global trade wars intensified as China plans to impose reciprocal tariffs of $50 billion on U.S. imports, Bloomberg reported.
• The S&P BSE Sensex fell 0.7 percent or 235 points to 33,139 and the NSE Nifty 50 index declined 0.8 percent or 85 points to 10,160.
• Seventeen out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Consumer Durables index's 2 percent drop. On the flipside, the S&P BSE Auto index was the top sectoral gainer, up 0.8 percent.

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Shares of the graphite electrode makers Graphite India and HEG fell as much as 5 percent and 14 percent each respectively after Nomura report suggested that some larger Chinese companies with proper measure in place plan to increase graphite electrode production capacity.

Shares of the stock market debutant continued to trade below its issue price of Rs 520.

The stock opened for trading at Rs 435 on the National Stock Exchange. The stock thereafter stabilised a bit to hit high of of Rs 463.

Shares of the Mumbai-based airline operator rose as much as 3.2 percent to Rs 632.55 after it agreed to buy 75 Boeing 737 Max aircraft to help meet growing demand in the world’s fastest growing major aviation market, according to a Bloomberg report.

The order is valued at $7.2 billion to $9.7 billion, the report added.

Tata Motors, Yes Bank and Adani Enterprises were among the most active stock options on the National Stock Exchange.

Tata Motors' 360 strike price call was the most active call option. The premium on the contract surged 135.58 percent to Rs 12.25. As many as 6,156 contracts were last seen in the open interest.

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Shares of the Gurgaon-based paint maker rose as much as 10 percent, the most since March 23, to Rs 1,979, its highest level in nearly three months.

The company informed exchanges that its board will meet on April 6 to discuss proposal to buy back its own shares.

• Expect market to trade in a range with important support for Nifty at 10,150
• Expected earnings growth may not give impetus to the market
• Would steer clear from companies under investigation
• Expect higher valuation banks to grab the opportunity and grow at more than 20-25% going forward
• Should be size agnostic in aviation and look at profitability
• Tyre stocks have become a commodity play, important to watch rubber prices

• Would stay away from telecom stocks due to destructive competition

Shares of the Delhi-based real estate developer rose as much as 19.33 percent to Rs 7.10 on the back of heavy volumes.

As many as 13.2 million shares changed hands on the BSE compared with an average of 4.8 million shares traded daily in the past two weeks.

Nifty 10,300 strike price call option was among the most active call options contracts. The premium on the contract rose 3.3 percent to Rs 139.30.

More than 5.11 lakh shares were added to open interest of over 33 lakh shares.

On the other hand, Nifty 10,000 strike price put option was among the most active put options contracts. The premium on the contract fell 9.1 percent to Rs 54.45.

More than 4.39 lakh shares were added to open interest of 48 lakh shares.

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Shares of the Pune-based IT firm rose as much as 9.13 percent, the most in five months, to Rs 986.80 after it won a four-year multi-million-dollar contract from the City of San Diego for network services, Zensar said in an exchange filing.

Mishra Dhatu Nigam (MIDHANI) shares were listed at a discount of 3.3 percent at Rs 87 per share on the BSE, compared to its issue price of Rs 90. The stock recovered from its discovery price low and was trading at Rs 89.65 down 0.38 percent from its issue price.

ICICI Securities shares began trading at a discount of 17 percent at Rs 431 per share on the BSE, compared to its issue price of Rs 520. The stock recovered from its discovery price low and was trading at Rs 455, down 12.5 percent from its issue price.

ICICI Securities Rs 3,500 crore initial public offer was subscribed 0.78 times on the final day of bidding.

Shares of Ramkrishna Forgings surged as much as 4 percent to Rs 810.55 and Bharat Forge climbed 2.4 percent to Rs 734.

North America Class 8 Truck orders jumped 103 percent to 46,300 units in March compared with 22,765 units during the same month last year.

Both the companies make auto components for Class 8 trucks.

Shares of the Mumbai-based car and commercial vehicle maker rose as much as 4.18 percent, the most in nearly five months, to Rs 357.70 after it said that JLR volumes jumped 83 percent (YoY).

Meanwhile, the company's Jaguar Land Rover is planning to launch 10 new products for Indian market in the current financial year.

Indian equity benchmarks were little changed as gains in Eicher Motors, Tata Motors and Reliance Industries were offset by losses in ICICI Bank, Bharti Airtel and Coal India.

The S&P BSE Sensex was little changed at 33,390 and the NSE Nifty 50 index was also little changed at 10,250.

Sixteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Auto index's 1 percent gain. On the flipside, the S&P BSE Telecom index was the top sectoral loser, down 0.4 percent.

The mid- and small-cap shares were outperforming their large-cap counterparts. The S&P BSE MidCap index rose 0.4 percent and the S&P BSE SmallCap index gained 0.5 percent.

• Rupee opens higher at 64.97 per U.S. dollar against yesterday's close of 65.01.

Indian bonds are likely to consolidate after posting strong gains on Tuesday. Bonds rallied after the central bank allowed lenders to spread their bond-trading losses, incurred in the past six months, over four quarters.

The yield on the 10-year bond fell 7 basis points to 7.33 percent. The focus will now turn to the RBI's two-day monetary policy meeting. The RBI's MPC will keep rates unchanged at 6 percent, according to all 26 economists surveyed by Bloomberg.

Traders will also watch out for whether the central bank allows foreigners to up their investments in government bonds, a move which is likely to fuel a further rally in the market.

Meanwhile, the rupee is expected to open at 64.97 per dollar having closed higher at 65.01 on Tuesday when bunched up inflows accumulated over five days hit the market.

BofAML on BHEL

• Maintained ‘Underperform’; cut price target to Rs 67 from Rs 80.
• Receivable write-offs remains a possibility.
• Outlook subdued as L1 pipeline is low.
• Aggressive pricing to impact margins.
• Expect 14 percent compounded growth rate in revenue over the fiscal 2018-2020 given higher executable order book.

JPMorgan on Grasim

• Maintained ‘Overweight’ with a price target of Rs 1,450.
• Standalone earnings are more resilient now.
• Strong growth outlook for both VSF/Chemical segments.
• Expect capacity addition beyond ongoing projects.
• Capital allocation concerns appear misplaced.
• Backward integration in VSF & better handling of chlorine are key competitive advantages.

Credit Suisse on Voltas

• Maintained ‘Outperform’ with a price target of Rs 700.
• AC prices move up 10 percent; Can hold back demand.
• Inverter ACs continue to account for majority share in metros.
• Samsung seem to lose market share, while Blue Star is gaining.
• Positive on Voltas' upcoming durable products launch in festive season.

Jefferies on Eicher

• Maintained ‘Buy’ with a price target of Rs 31,880.
• Production guidance for the current fiscal raised to 950k units versus 900k.
• Vallam Phase 2 will take capacity to over 1.2 million units.
• Reiterates strong demand environment.

CLSA on Eicher

• Maintained ‘Buy’ with a price target of Rs 39,300.
• Announcement of capacity expansion indicates good growth visibility.
• New capacity to come on-line by H2FY20; Full ramp-up in FY21.
• Expect 15 percent compounded growth rate in volume through the financial years till March 2021.
• Expansion indicate strong demand growth outlook for next 2-3 years.

Macquarie on Info Edge

• Maintained ‘Neutral’ with a price target of Rs 1,300
• Zomato reveals surge in food delivery revenues and reduction in cash burn over the financial year-ended March 2017.
• Expect steady increase in shareholder payout.
• Effective utilisation of cash is imperative and remains a key monitorable.
• Any medium-term recovery in both recruitment and real estate appears priced in.

Credit Suisse on Info Edge

• Maintained ‘Neutral’ with a price target of Rs 1,310.
• Decent growth in Zomato; Recent momentum has been strong.
• Business mix continues to shift from advertising to food delivery.
• Zomato Gold numbers are attractive.
• Cash burn has increased in the past two months.

Macquarie on Britannia

• Initiated ‘Underperform’ with a price target of Rs 4,210.
• Expect higher competition in cookies; GST gains limited.
• Non-biscuits and international business to not impact earnings.
• Expect pressure on gross margin and advertising spend.
• Street ignoring pressure on market share gains and margins due to competition.
• Expect volume, revenue and net profit to compound at 8.5 percent, 12 percent and 12 percent respectively for the next two years.
• Expect further dilution of return ratios on sustained high capex.
• Expect premium valuations to narrow, with a shortfall in earnings delivery.

Jefferies on ICICI Bank

• Maintained ‘Buy’; cut price target to Rs 370 from Rs 410.
• Change estimates to factor in new RBI guidelines on stressed assets.
• ICICI Bank faces allegations of malpractice & conflict of interest.
• Overhang to continue until a speedy investigation & closure is reached.

Citi on Mindtree

• Maintained ‘Neutral’; raised price target to Rs 820 from Rs 660.
• Expect 12 percent compounded growth rate in $ revenues term over the fiscal 2018-2020.
• Mindtree should be one of the beneficiaries as deal sizes scale up.
• Client specific issues seems to be behind, as reflected in December quarter.
• Margins have room to improve.
• Premium valuations price in good outlook.

Motilal Oswal on BSE

• Upgraded to ‘Buy’ from ‘Neutral’; raised price target to Rs 1,070 from Rs 950.
• Monetisation of the Star MF platform underway.
• Reduced dependency on lagging area of equities.
• Expect core earnings to grow to Rs 12.3 per share by March 2020.
• Expect excess cash to be prudently disbursed to shareholders.
• Risk reward attractive.
• Potential triggers: Monetisation of INX, Interoperability of clearing corporation and Commodity derivatives.

• Bharat Forge, RK Forgings: North America Class 8 Truck orders jump 103 percent to 46,300 units in March compared with 22,765 units during the same month last year
• Jet Airways agrees to buy 75 Boeing 737 Max planes (Bloomberg)
• I-T dept issues notice to Deepak Kochhar, husband of ICICI Bank CEO Chanda Kochhar, in connection with the Videocon bank loan (PTI)
• Reliance Jio Payments Bank commences operations: RBI
• JSW Steel buys 26 percent in Numetal’s India arm to facilitate Essar Steel bid
• Jaguar Land Rover India lines up 10 new products for FY19
• Akzo Nobel to consider share buyback on April 6
• Jubilant FoodWorks says passed on full benefit of GST rate cut
• Zensar Technologies wins multi-year contract with City of San Diego
• AU Small Finance in pact with Future Generali India to act as corporate agent for life insurance business
• Bigbloc Construction to issue 8 lakh convertible warrants to promoters
• Tayo Rolls to issue 2 lakh preference shares to promoter Tata Steel
• Ferro Alloys says lenders’ panel have rejected the debt resolution plans and decided to liquidate the company
• Infibeam Corporation enters into agreement with TV18 for advertising products, services and brands in print and non-print media

• Mishra Dhatu Nigam Limited (MIDHANI) to list on exchanges. IPO issue price Rs 90 per share.
• ICICI Securities to list on exchanges. IPO issue price Rs 520 per share.

• Nifty April Futures closed trading at 10,285 with a premium of 40 points versus 52.2 points.
• April series: Nifty open interest (OI) up 2 percent, Bank Nifty OI up 1 percent.
• India VIX ended at 15.1, down 1 percent.
• Max OI for April series call at 11,000 strike price call option, OI at 34.9 lakh shares.
• Max OI for April series put at 10,000 strike price put option, OI at 44 lakh shares, up 10 percent.

Stocks Seeing High Open Interest Change

Infibeam Corporation

• Smaller Cap World Fund bought 1.07 crore shares or 2 percent equity at Rs 152 each.

Indiabulls Housing Finance

• TreeTop Convertible SICAV - TreeTop Convertible International bought 75.97 lakh shares or 1.8 percent equity at Rs 1292.5 each.
• Merrill Lynch Markets Singapore Pte. Ltd sold 75.97 lakh shares or 1.8 percent equity at Rs 1292.5 each.

WPIL

• Promoter V N Enterprises bought 76,884 shares or 0.8 percent equity at Rs 508.02 each.

RPG Life Sciences

• Ektara Enterprises LLP bought 20.76 lakh shares or 12.6 percent equity at Rs 394.1 each.
• Promoter Sudarshan Electronics sold 17.91 lakh shares or 10.8 percent equity at Rs 394.1 each.
• Promoter Instant Holdings sold 2.84 lakh shares or 1.7 percent equity at Rs 394.1 each.

Corporate Actions

• Sandhar Technologies Limited added to BSE IPO index.
• Marathon Nextgen last trading day before stock split from Rs 10 to Rs 5 per share.
• Adani Enterprises last trading day before de-merger.

• Spotify climbs after going public in unusual direct listing
• Deepak Kochhar firm gets taxman’s notice in Videocon loan case
• Five state-run units bought 58% of shares in Mishra Dhatu Nigam’s IPO
• Ambani’s Jio payments bank is now live
• BCCI media rights: First day of e-auction stops at Rs 4,442 crore
• Aadhaar law is just, fair and reasonable: Centre to supreme court
• India needs $125 billion in four years to meet renewable energy target
• I&B Ministry cancels fake news norms after Modi’s order
• Ola buys navigation and ticketing app Ridlr
• The top seven recommendations of the insolvency law panel
• This is what a buyer will have to pay for Air India
• India spends record $18 billion to develop roads as polls loom
• The two ends of India’s inflation debate
• ArcelorMittal heads to court in battle over India’s steel market

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,284 as of 7:48 a.m.

Asian stocks were mixed at the open as traders awaited China’s response to the latest step in an escalation of trade tensions between the world’s top two economies. The yen pared losses as the U.S. issued its list of Chinese products proposed for tariffs.

Equity benchmarks fluctuated in Tokyo, Sydney and Seoul. A recovery in U.S. equities from a technology-fueled drubbing on Monday seemed to be largely overshadowed by the Trump administration’s announcement that came after the close of stock trading in New York.

Here are some key events coming up this week:

• Australian building approvals and retail sales are due Wednesday.
• The Caixin services PMI for China probably gained to 54.5 in March from 54.2 in February.
• The composite index is also due on Wednesday.
• U.S. employment data are due Friday; the jobless rate probably fell in March after holding at 4.1 percent for five straight months.
• The Reserve Bank of India decides on policy Thursday.

Bonds

• The yield on 10-year Treasuries was steady at 2.77 percent, the highest in a week. It increased five basis points Tuesday.
• Australia’s 10-year bond yield rose almost one basis point to 2.61 percent.

Commodities

• West Texas Intermediate crude fell 0.1 percent to $63.42 a barrel after gaining 0.8 percent.
• Gold was at $1,332.23 an ounce after falling 0.6 percent.