Sensex, Nifty Snap Four-Day Winning Streak As Banks Drag

Indian equity benchmarks snapped their four-day winning streak dragged by banking heavyweights like ICICI Bank, Yes Bank and IndusInd Bank.

The S&P BSE Sensex fell 0.2 percent or 85 points to 38,252 and the NSE Nifty 50 index declined 0.2 percent 26 points to 11,557.

Benchmarks logged in their fifth weekly gain this week, their longest stretch of weekly gains in two months. The Sensex rose 0.75 percent and Nifty climbed 0.8 percent.

In today's trade, twelve out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Bankex index's 0.8 percent drop. On the other hand, the S&P BSE Metal index was top gainer, up 1.9 percent.

Shares of the Ahmedabad-based drugmaker rose as much as 2.8 percent to Rs 402.50 after U.S. FDA successfully completed inspection of its biologics manufacturing facility (Zydus Biologics) located at Zydus Biotech Park in Ahmedabad, the company said in an exchange notification.

Shares of the Anil Ambani-led company recovered from intraday lows and rose as much as 5.6 percent to Rs 19.90 after holders of its $300 million bonds approved the monetisation and exchange offer, RCom said in an exchange filing.

Pursuant to the exchange offer, the bond holders will receive monetisation proceeds up to $118 million. The balance amount of $182 million will be exchanged with $55 million bonds to be issued by Global Cloud Xchange (GCX), a foreign subsidiary of Reliance Communications, added the filing.

Stocks in Europe rose on Friday alongside U.S. equity-index futures after a mixed session in Asia as trade negotiations with China drew a blank. The dollar slipped before an address from Federal Reserve Chairman Jerome Powell.

Shares of the Chandigarh-based wheel rim maker rose as much as 0.85 percent to Rs 1,205 after it bagged an export order worth $3.5 million from the U.S. aftermarket for steel truck wheels, Steel Strips Wheels said in an exchange notification.

The order is for supply of 76,000 truck wheels which will be manufactured at its Chennai plant, the notification added.

Shares of the Mumbai-based drugmaker rose as much as 1.3 percent to Rs 914.70 after U.S. FDA cleared its Nagpur facility.

The U.S. FDA gave its Establishment Inspection Report (EIR) after successfully completing inspection at Nagpur facility, Lupin said in an exchange notification.

Shares of the country's largest lender fell 0.46 percent to Rs 301.05. The bank's MD Ajit Basu said that SBI is working on resolving 7-8 power accounts.

• State Bank of India FY19 recoveries to be higher by 80-90 percent versus FY18
• The bank has found interested bidders for power accounts.

Indian equity benchmarks extended losses as banking heavyweights ICICI Bank, Yes Bank, IndusInd Bank and State Bank of India came under selling pressure.

The S&P BSE Sensex fell 0.4 percent or 155 points to 38,182 and the NSE Nifty 50 index declined 0.42 percent or 47 points to 11,535.

Fourteen out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Bankex index’s 0.94 percent drop. On the flipside, S&P BSE Basic Materials index was the top gainer, up 0.15 percent.

The mid- and small-cap shares were also witnessing selling pressure as the S&P BSE MidCap index fell 0.5 percent and the S&P BSE SmallCap index declined 0.4 percent.

The overall breadth was negative as 1,520 shares were declining while 1,001 were advancing on the BSE.

Click here for more stock market statistics

Shares of the Mumbai-based edible oil maker were locked in a five percent upper circuit at Rs 9.45 after lenders approved Adani Wilmar's takeover of insolvent Ruchi Soya, two unidentified bankers told BloombergQuint.

At the end of a 24-hour voting process, more than 96 percent members of the committee of creditors for Ruchi Soya approved the resolution plan submitted by the Adani Group company, the bankers said.

Shares of the Hyderabad-based infrastructure construction company rose as much as 5 percent to Rs 193.20 on report that it is in advanced talks to sell two access-controlled road assets for around Rs 3,450 crore, The Economic Times reported citing two people close to negotiations.

The company is looking to sell NAM Expressway and Srinagar-Banihal Expressway, the report added.

• Sudarshan Chemicals: The Pune-based chemical maker rose as much as 8.15 percent to Rs 475.95. Trading volume was 17 times its 20-day average.
• Bombay Burmah Trading Company: The Mumbai-based owner of tea and coffee plantations rose as much as 8.2 percent to record high of Rs 2,115. Trading volume was 16 times its 20-day average.
• Kajaria Ceramics: The Delhi-based tiles maker rose as much as 5.6 percent to Rs 512. Trading volume was 9 times its 20-day average.
• GHCL: The Noida-based chemical maker fell as much as 3.35 percent to Rs 251.30. Trading volume was 6.4 times its 20-day average.

Shares of the Kolkata-based non-banking finance company rose as much as 11.7 percent to Rs 52.

SREI Infrastructure Finance’s wholly owned subsidiary, Quippo Oil and Gas Infrastructure has proposed to sell 2,600 equity shares constituting 26 percent shareholding in Quippo Drilling Private Limited (QDIPL) to an overseas entity, the company said in an exchange notification.

Consequently, QDIPL shall also cease to be a wholly owned step-down subsidiary of the company but shall continue to be a step-down subsidiary of the company.

• Indian Oil has 12.2 lakh shares change hands in a single block. Stock down 0.1 percent at Rs 153.20.
• Ashok Leyland has 12.5 lakh shares change hands in a single block. Stock down 1.9 percent at Rs 129.85.

Buyers and sellers were not immediately known

Source: Bloomberg

Nifty 11,600 strike price call was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 7 percent to Rs 55. Over 3.9 lakh shares were added to the open interest which stood at over 39.22 lakh shares.

Click here to see the complete options chain

Shares of the budget airline operator fell as much as 1.9 percent to Rs 1,034 after it proactively grounded a few Airbus A320 Neo planes due to “non-availability” of spare engines from the manufacturer.

Shares of the Delhi-based steel maker were locked in a five percent lower circuit at Rs 15.50 after stock exchanges informed members that trading will be suspended with effect from Aug. 29 on account of reduction and consolidation of share capital.

• Indiabulls Real Estate has 24.4 lakh shares change hands in two blocks. Stock up 0.45 percent at Rs 146.20.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based IT company fell as much as 19.25 percent, the most in three years, to Rs 401.10 after 2.33 crore shares changed hands on the National Stock Exchange.

In one of the largest block deals, 7.8 percent equity changed hands, according to Bloomberg data.

Hexaware Technologies promoters’ were expected to raise Rs 1,120 crore via 2.5-crore shares sale at a floor price of Rs 447.5 apiece, according to the offer seen by Bloomberg News.

Indian equity benchmarks edged lower dragged by weakness in ICICI Bank, Reliance Industries and ITC.

The S&P BSE Sensex fell 0.16 percent to 38,277 and the NSE Nifty 50 index declined 0.2 percent to 11,558.

Eight out of 11 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Pharma index’s 0.5 percent drop. On the other hand, the Nifty IT index was top gainer, up 0.2 percent.

The mid- and small-cap shares were mixed as the Nifty Midcap 100 index fell 0.13 percent while the Nifty Smallcap 100 index rose 0.17 percent.

Indian rupee opened lower at 70.21 per dollar against yesterday's close 70.11 as dollar was trading higher overseas ahead of an address by Fed Reserve chair Jerome Powell at Jackson Hole.

• Traders should go long as there are no signs of bearishness on charts, one can buy Bank Nifty with stop loss at 27,950 for target of 28,400-28,500, Vishal Malkan of Malkansview told BloombergQuint.

Indian bond traders will be focusing on the Rs 12,000 crore debt sale by the central government after benchmark yields closed at a six-week high. The government will sell Rs 5,000 crore of benchmark 2028 bond; Rs 2,000 crore each of 2023 and 2035 debt, and Rs 3,000 crore of 2046 securities later in the day.

The sales will test investor appetite after the 10-year yield rose 5 basis points on Thursday to end at 7.88 percent -- the highest close for the benchmark bond since July 10.

Meanwhile, the rupee may start trading lower along with other emerging Asian currencies.

The dollar was trading higher overseas ahead of an address by Fed Reserve chair Jerome Powell at Jackson Hole. The rupee fell 0.4 percent on Thursday to end at 70.1150 with the implied opening from the forwards, suggesting it will start trading at 70.21 on Friday.

IIFL on Hexaware

• Initiated ‘Add’ with a price target of Rs 520.
• Hexaware uniquely positioned to participate in structural trend of IT spend.
• Positives: healthy deal wins, steady growth in top accounts and stable margins.
• Expect dollar revenue and EPS to grow at a compounded annual growth rate of 14 percent and 20 percent respectively over 2017-2020.
• An attractive long term story, margin expansion key for re-rating.

UBS on ONGC

• Maintained ‘Buy’ with a price target of Rs 245.
• Deleveraging through potential listing of OVL and non-core asset sales.
• Upside risk as stock currently discounting less than $50 a barrel of net realisation.
• Strong earnings trajectory and potential of stake sales would be positive for ONGC.

Macquarie on Bandhan Bank

• Maintained ‘Outperform’ with a price target of Rs 560.
• Bidding for PNB Housing Finance may not be an ideal move.
• Deal would significantly dilute RoE and introduce several integration risks.
• RBI mandate of taking down promoter stake would have been a bigger motivator.

Macquarie on ICICI Lombard General Insurance

• Maintained ‘Underperform’ with a price target of Rs 585.
• Kerala floods: Impact on P&L to be insignificant.
• Premiums from Kerala form a very small proportion of overall premiums.
• Worst case impact could be 3-4 percent of profits.

CLSA on M&M

• Maintained ‘Buy’ with a price target of Rs 1,120.
• Success of new MPV and SUV could boost growth and lift valuations.
• Expectations low from new SUV; Success can boost franchise in a key segment.
• Expect M&M’s vole and earnings per share to grow at a compounded annual growth rate of 13 percent and 21 percent respectively over the current and the next financial year.

Citi on Sun Pharma

• Maintained ‘Neutral’ with a price target of Rs 600.
• Positive CHMP opinion for Tildrakizumab has played out.
• This to translate into EMA approval soon, which is priced in.
• Sun has made good progress in transitioning to a specialty play.

Citi on Eris Lifesciences

• Maintained ‘Buy’ with a price target of Rs 850.
• ERIS believes that the Indian market has a long growth runway.
• Company intends to keep its focus on specialty segments.
• ERIS maintains that it can grow at 30-40 percent higher than industry growth.

CLSA on Colgate

• Colgate’s acquisition of Bombay Shaving Co. raises concerns on governance due to category overlap.
• Acquisition by listed Colgate India would have made more sense.
• Marico and Emami have acquired stake to augment their understanding of evolving business.

Brokerages On L&T

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 1,600.
• If everyone participate in buyback, then ratio would be 4.29:100 for tendering shares.
• Buyback to reduce FY19 EPS by 2% and increase net debt-to-equity to 2.1 times.
• RoE would improve to 15.0 percent and 2018-19 yield could be 6 percent.

BofAML

• Maintained ‘Buy’; raised price target to Rs 1,589 from Rs 1,528.
• Buyback marginally EPS dilutive; leverage not a concern.
• Buyback re-affirms company's strategy of returning excess cash.
• RoEs to expand; Divestments provide upside risk.

CLSA

• India’s fourth largest buyback ever to boost RoE and support stock.
• Buyback to lower EPS but improve quality of earnings.
• Believe L&T is a good proxy for domestic Capex.

Brokerages On Indian Steel Industry

JPMorgan

• Prices could move higher post October on China and domestic environment.
• Demand driven by combination of local and global factors.
• Strong pricing environment creates upside risks for TATA, JSW and SAIL.

Credit Suisse

• Stabilising raw material costs drive steel price rebound.
• Indian steel price to rebound with rising China domestic prices and export.
• Steel spreads may widen further from here.
• Brokerages On Indian Non-Life Insurance Industry

HSBC

• Non-life insurers are keenly awaiting the insurance regulator’s response to Supreme Court ruling.
• Insurers expect the regulator to allow comprehensive long-term policies.
• Vehicle OEM’s and banks could benefit whereas agents and online distributors could be negatively affected.

Who’s Meeting Whom

• Great Eastern Shipping to meet Ambit Capital on Aug. 24.
• Magma Fincorp to meet investors on Aug. 24.

Insider Trades

• Confidence Petroleum promoters acquired 28,200 shares on Aug. 13-21.
• Man Infra promoter and director Parag K Shah acquired 4.82 lakh shares on Aug. 21.

• Nifty August Futures ended at 11,595.4, with a premium of 12.7 points versus 15.6 points.
• August series- Nifty open interest (OI) up 0.3 percent and Bank Nifty (OI) down 14 percent.
• India VIX ended at 12.7, down 1.1 percent.
• Maximum open interest for August series call at Nifty 11,600 strike price call. OI at 35.3 lakh shares, up 3.5 percent.
• Maximum open interest for August series put at 11,500 strike price put. OI at 45.8 lakh shares, up 9 percent.

Bulk Deals

• Goa Carbon: Ajo Emerging Markets Small-Cap Master Fund Ltd. acquired 50,000 shares or 0.55 percent equity at Rs 793.51 each.
• Liberty Shoes: India Nivesh Limited acquired 1.3 lakh shares or 0.76 percent at Rs 217.55 each.
• Sequent Scientific: Dvi Fund Mauritius Ltd sold 35.8 lakh shares or 1.47 percent equity at Rs 66.02 each.

Mahanagar Gas

• Blackrock Emerging Frontiers Master Fund Limited acquired 6.5 lakh shares or 0.66 percent equity at Rs 851 each.
• L&T Emerging Businesses Fund acquired 6.5 lakh shares or 0.66 percent equity at Rs 851 each.
• Schroder International Selection Fund Emerging Asia acquired 5.17 lakh shares or 0.52 percent equity at Rs 851 each.
• BG Asia Pacific Holdings Pte Limited sold 1.38 crore shares or 14 percent equity between Rs 851.9-855 per share.

• LIC Housing Finance
• MAS Financial
• Pratibha Industries
• Sundaram Finance

• Hexaware Technologies promoters look to raise Rs 1,120 crore via 2.5-crore shares sale at a floor price of Rs 447.5 apiece, according to the offer seen by Bloomberg News. The deal size represents 8.4 percent of the company’s equity. Trade date is Aug. 24 and settlement date is Aug. 28.
• Britannia Industries’ board approved stock split in the ratio of 1:2. The company said that the rationale behind the split is that there had been a significant rise in the market price of the equity shares of the company over the last one year. In order to improve the liquidity of the company’s equity shares in the stock markets and to make them more affordable for the small retail investors, this move was made. Post the stock split, the authorised capital will be 50 crore shares as compared to 25 crore shares as of now.
• Reliance Industries to load 80,000 tonne of vacuum gas oil (feedstock for refining units) at Sikka, with estimated arrival date of Aug. 25. The vessel Aframax Desh Prem is also scheduled to discharge 80,000 tonne of crude between Aug. 23-24 with RIL being listed as a receiver. On Aug. 15, the company had reported shutdown of cracker unit at its Jamnagar refinery near Sikka. This news had been reported by Bloomberg.
• TVS Motor Company strengthened its commuter motorcycle portfolio with the launch of TVS Radeon. The new 110cc motorcycle boasts of segment leading features including synchronised braking technology and a high ground clearance with spacious and comfortable seating.
• InterGlobe Aviation’s which has been grappling with Pratt and Whitney engine issues, said that some of its Airbus A320 Neo planes had been grounded “proactively” due to “non-availability” of spare engines from the manufacturer. The airline’s response came to a query on reports that as many as nine of its Airbus A320 neo aircrafts were grounded on Aug. 20 because of engine issues.
• ICICI Bank Chairman GC Chaturvedi said that the decision on continuance of managing director and CEO Chanda Kochhar would be taken after the Justice BN Srikrishna panel report, probing certain allegations against her is finalised. The probe is likely to be concluded in two-and-a-half months. Kochhar and her family members are facing allegations of quid pro quo and conflict of interest with respect to a loan extended to certain entities, including the Videocon group.
• Aban Offshore’s board seeks shareholder’s approval to raise $400 million from foreign markets via debt or equity and to raise Rs 2,500 crore via qualified institutional placement. The annual general meeting is scheduled to be held on Sept. 24.
• SREI Infrastructure Finance’s wholly owned subsidiary, Quippo Oil and Gas Infrastructure proposed to sell 2,600 equity shares constituting 26 percent shareholding in Quippo Drilling Private Limited to an overseas entity. Consequently, QDIPL shall also cease to be a wholly owned step-down subsidiary of the company but shall continue to be a step-down subsidiary of the company.

• U.S., China trade talks yield no major progress as tariffs bite
• Tata Sons increases stake in Tata Motors
• What mutual funds bought and sold in July
• Kerala Finance Minister criticises Modi government for rejecting foreign aid
• India breaks a mental health taboo. But is that enough?
• Lenders approve Adani Wilmar’s bid for Ruchi Soya
• Meet the people helping Tim Cook run Apple
• Why some current account imbalances are fine but others are catastrophic
• SEBI plans to lower mutual fund expenses
• WhatsApp turns down India’s demand to build traceability software
• The rule that could threaten your green card
• Why Trump is pressuring the Fed on rates

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.37 percent to 11,561.

Asian stocks were mixed as U.S.-China trade negotiations produced no breakthrough, while the dollar retained gains ahead of an address from Federal Reserve chairman Jerome Powell.

Shares in Japan and Australia rose, while South Korean stocks declined. The yuan ticked up with Treasury yields after China said talks with the U.S. were “constructive, honest.” The dollar held gains, with attention now shifting to Powell’s scheduled comments at Jackson Hole later Friday.

Currencies

• The yen slid 0.1 percent to 111.42 per dollar after falling 0.7 percent.
• The offshore yuan rose 0.2 percent to 6.8796 per dollar after dropping 0.7 percent.
• The Bloomberg Dollar Spot Index gained 0.7 percent.
• The Australian dollar bought 72.44 U.S. cents following its 1.4 percent tumble.

Commodities

• West Texas Intermediate crude was up 0.3 percent to $68.06 a barrel.
• Gold was at $1,186.79 an ounce after sliding 0.9 percent.