Sensex, Nifty Resume Decline After A Day’s Breather As ITC Drags

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Indian equity benchmarks resumed decline after a day’s breather dragged by bluechips like ITC and Mahindra & Mahindra.

The S&P BSE Sensex fell 0.32 percent or 115 points to 35,432 and the NSE Nifty 50 index declined 0.29 percent or 31 points to 10,741.

“A trade war is taking shape, leading to a correction globally. That’s taking a toll on India as well,” AK Prabhakar, head of research at IDBI Capital, told BloombergQuint over the phone.

Foreign funds have sold $19 billion in emerging market equities and they continue to remain sellers, according to him. “2018 will be a washout year with mid and small caps eroding more. I expect a 10-15 percent downside for benchmarks in the current year.”

In today’s trade, seventeen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Telecom index’s 1.6 percent drop. On the other hand, the S&P BSE Energy index was the top gainer, up 0.85 percent.

The mid- and small-cap shares underperformed their larger peers as the S&P BSE MidCap index fell 0.5 percent and S&P BSE SmallCap index tumbled 0.8 percent.

Fab Four Stocks Of The Day

  • Mphasis: The Bengaluru-based IT company rose as much as 5.23 percent to Rs 1,116 after JP Morgan initiated coverage on the stock with a ‘overweight’ rating for target price of Rs 1,285, indicating an upside of 21 percent.
  • InterGlobe Aviation: The Gurugram-based budget airline operator rose as much as 6 percent to Rs 1,205 after it clarified that it has not received any summons from Enforcement Directorate for FEMA violations.
  • Axiscades Engineering Technologies: The Bengaluru-based technology solutions provider rose as much as 5.56 percent to Rs 122.50 after it signed joint venture with Assystem for engineering services in energy sector.
  • Lakshmi Vilas Bank: The Tamil Nadu-based private lender rose as much as 6.74 percent on heavy volumes. Trading volume was 4.2 times its 20-day average.

Steel Strips Wheels Rises After SMC Global Initiates Coverage

Shares of the Chandigarh-based steel wheel rim maker rose as much as 3.23 percent to Rs 1,252 after SMC Global initiated coverage on the stock with a buy.

SMC Global in a note said:

  • SSWL over last two years has laid a strong foundation by expanding its capacities in key product segments.
  • SSWL makes a healthy investment proposition given the multi-year opportunity for its alloy wheels and current uptick in CV cycle.
  • Trades at significant discount to other listed peer Wheels India, valuation gap may narrow down if SSWL continues to deliver stronger performance.

Investors Should Look To Exit IT Shares In Current Rally: Dipan Mehta

ICICI Bank's performance has been disappointing as it has lost market share to peers like HDFC Bank, IndusInd Bank and others, Dipan Mehta, member of BSE told BloombergQuint in an interview.

Key highlights of the conversation:

  • ICICI Bank is not a great long-term investment bet
  • There are better opportunities in private banks like HDFC Bank, IndusInd Bank, RBL Bank and Kotak Mahindra Bank
  • RBL Bank may be slightly riskier than HDFC Bank but bank is growing on qualitative parameters
  • RBL Bank is focusing on retail banking considering growth
  • RBL Bank is nice compounding story and returns can be phenomenal
  • In capital goods space, positive on companies which have good order book
  • Positive on transmission towers companies
  • Bharat Electronics is a good play on defence sector
  • Selective capital goods stocks are in a cyclical upswing
  • Have been great fans of IT companies but hold negative for two to three years
  • Current rally has taken us by surprise
  • For large cap IT companies maintaining single digit growth rate will be challenging
  • Maintaining low double-digit growth will be tough for mid-cap IT companies
  • Investors who are stuck in IT should use the current rally to exit this space

Zee Entertainment Holds Gains After Block Deal

  • Zee Entertainment has 22 lakh shares change hands in a block on BSE. Stock up 1.3 percent at Rs 568.40.

Buyers and sellers were not immediately known

Source: Bloomberg