Sensex Posts Longest Losing Spree In Three Months As FMCG Shares Drag

India's Sensex fell for a fifth day in a row, posting its longest losing streak since May 21, as losses in FMCG and banking shares outpaced gains in IT stocks.

The S&P BSE Sensex fell 0.4 percent or 155 points to 38,158 and the NSE Nifty 50 index dropped 0.5 percent or 62 points to 11,520.

Seventeen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Basic Materials index's 2.5 percent drop. On the other hand, the S&P BSE IT index was top gainer, up 1.9 percent.

The mid- and small-cap shares underperformed larger peers as the S&P BSE MidCap index plunged 2.6 percent and the S&P BSE SmallCap index fell 2 percent.

The rupee closed at a record low of Rs 71.57 against the dollar, down 0.5 percent compared to Monday’s close. The rupee has fallen 2 percent in the last five days alone. This is, however, not out of line with peer currencies like the Indonesian rupiah, which has also seen a 2 percent depreciation.

• Government unlikely to cut excise duty on petrol, diesel
• Current account deficit to widen on external factors
• Government cannot let fiscal deficit breach target

Source: Government official to Bloomberg

The bank will look forward to capitalise on promising inorganic opportunities, including acquisition and resolution of stressed assets; and additional avenues of organic growth through digital expansion, domestic lending, international lending and investments, for growth of the bank and its subsidiaries, Kotak Mahindra Bank said in an exchange filing.

Kotak Mahindra Bank fell as much as 1.4 percent to Rs 1,251.05.

• Rupee hits fresh record low of 71.42 against the dollar after Brent crude jumped above $79 per barrel.

Indian equity benchmarks extended decline as losses in FMCG and banking shares outpaced gains in IT stocks.

The S&P BSE Sensex declined 0.5 percent or 200 points to 38,110 and the NSE Nifty 50 index fell 0.7 percent or 81 points to 11,500.

Top Five Sensex Losers

• Asian Paints down 3.4 percent
• Hindustan Unilever down 3.3 percent
• State Bank of India down 2.9 percent
• Coal India down 2.6 percent
• Adani Ports down 2.6 percent

Top Five Sensex gainers

• Infosys up 3 percent
• TCS up 1.9 percent
• Wipro up 0.8 percent
• HDFC up 0.5 percent
• Reliance Industries up 0.4 percent

Shares of the Pune-based insurance and consumer finance company fell for a ninth day in a row.

The stock fell as much as 1.87 percent to Rs 6,528.70 on heavy trading volumes. Trading volume was three times its 20-day average. In the last nine trading sessions, the stock has fallen 8.3 percent.

Shares of the Chennai-based television channel operator fell as much as 7.12 percent, the most since Aug. 13, to Rs 722.75 on heavy volumes.

Trading volume was 1.3 times its 20-day average.

Shares of the Mumbai-based cable television service provider rose as much as 20 percent, the most in nearly nine months, to Rs 22.

Netflix said that it has partnered Hathway Broadband to offer video streaming services to the Hathway Broadband's eight lakh subscribers, news agency Press Trust of India reported.

Under the alliance, Netflix will be offered through Hathway's set-top box that includes a remote with a dedicated Netflix button to allow users to launch the service directly. The cable broadband provider's subscribers will also be able to pay for their Netflix subscription using their Hathway bill, the report added.

• Indian equity benchmarks swung in a narrow band as gains in IT stocks were offset by losses in FMCG shares.
• The S&P BSE Sensex rose 0.2 percent to 38,381 and the NSE Nifty 50 index was little changed at 11,586.
• All sector gauges barring the Nifty IT index were trading lower led by the Nifty FMCG index's 2 percent drop.
• The mid- and small-cap shares were underperforming their larger peers as the Nifty Midcap 100 index dropped 1.2 percent and the Nifty Smallcap 100 index fell 0.8 percent.
• The overall breadth was negative as 1,563 shares were declining while 1,020 were advancing on the BSE.

Click here for more stock market statistics

FMCG shares fell for a second day in a row dragged by Jubilant FoodWorks, Dabur India and Hindustan Unilever.

Gauge of FMCG shares on the National Stock Exchange — Nifty FMCG index fell 1.8 percent.

Shares of the Mumbai-based mortgage lender rose as much as 6.45 percent to Rs 68.50 after it informed exchanges that it is in talks with an overseas institutional investor for a potential equity investment in the company.

The discussions are subject to confirmatory due diligence, definitive documentation, and necessary approvals, Reliance Home Finance added.

• JM Financial: The Mumbai-based brokerage firm rose as much as 1.6 percent to Rs 124. Trading volume was 33 times its 20-day average.
• Larsen & Toubro Infotech: The Mumbai-based IT company rose as much as 6.5 percent, the most in over a month, to Rs 1,887.80. Trading volume was 20 times its 20-day average.
• Gillette India: The Mumbai-based shaving equipment maker rose as much as 4.25 percent, the most in over six months, to record high of Rs 7,100. Trading volume was 11.3 times its 20-day average.
• Gujarat State Petronet: The Gandhinagar-based natural gas transmission company fell as much as 1.8 percent to Rs 188.30. Trading volume was 10 times its 20-day average.

• Dish TV has 10 lakh shares change hands in a block deal. Stock 4.65 percent at Rs 67.60.
• Bajaj Finance has 28.4 lakh shares change hands in two blocks. Stock down 0.15 percent at Rs 2,719.
• Magma Fincorp has 12 lakh shares change hands in a block deal. Stock down 2.5 percent at Rs 144.15.
• Balrampur Chini Mills has 11 lakh shares change hands in a single block. Stock down 3.5 percent at Rs 73.85.
• ITC has 10 lakh shares change hands in a block. Stock down 1.5 percent at Rs 308.55.
• Unitech has 10 lakh shares change hands in a single block. Stock down 1.3 percent at Rs 3.80.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Bengaluru-based hydraulic equipment maker rose as much as 3.15 percent to Rs 3,700 after it fixed Sep. 14 as record date for bonus issue in ratio of three bonus shares for every one share held by existing shareholders.

Shares of the Delhi-based infrastructure construction company rose as much as 4.85 percent to Rs 27 after its joint venture named 'ARSS - Technocom - Priyashi Aashi (JV)' won two contracts from Northeast Frontier Railway Construction Organisation.

Shares of the country's largest IT company rose as much as 2 percent to record high of Rs 2,094.

With today's surge in share price, TCS crossed Rs 8 lakh crore in market capitalistion for the first time.

Shares of the Mumbai-based drugmaker fell as much as 1.65 percent to Rs 920.35 after the company said that the U.S. drug regulator issued one observation for its Tarapur facility.

Tarapur facility was inspected by U.S. FDA between Aug. 27-31 and issued an observation which was for 'procedural deficiency'. The FDA found no presence of probable human carcinogen, Lupin said.

Nifty Bank's 28,000 strike price call option was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 80 percent to Rs 22.25. Over 10,74 lakh shares were added to the open interest which stood at 18.27 lakh shares.

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Shares of the Mumbai-based auto maker pared gains, to trade 0.6 percent higher at Rs 268, after it announced voluntary recall of diesel Tigor, Tata Motors said.

Tata Motors has recalled Tigor cars made between March 6-Dec. 1, 2017.

Rajeev Thakkar, director and chief investment officer at PPFAS Mutual Fund told BloombergQuint that market has become less attractive foreigners tracking weakness in rupee versus U.S. dollar.

Key highlights of the conversation:

• Cautious view on the market due to stretched valuations.
• Market becomes less attractive for foreigners with rupee weakness.
• Turning cautious on some of the financial stocks.
• Consumer stock valuations looking exuberant at the moment.

Shares of the Mumbai-based specialty pharma company rose as much as 3.9 percent to Rs 192.4 after well-known investor Ashish Kacholia acquired 20 lakh shares (1.62 percent equity) at Rs 166.5 each.

Meanwhile, the International Finance Corporation sold 39.8 lakh shares (3.23 percent) at Rs 166.51 each.

Shares of the country's second largest IT company rose as much as 2.3 percent to record high of Rs 733.50 after it went ex-bonus.

Infosys had announced issuing bonus shares in ratio of one bonus share for every one share held when it announced June quarter earnings in July.

Indian equity benchmarks were trading flat as gains in Tata Motors, TCS and Infosys were offset by losses in Hindustan Unilever, Sun Pharma and ITC.

The S&P BSE Sensex rose 30 points to 38,340 while the Nifty was little changed at 11,583.

Eleven of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE FMCG Index's 0.5 percent drop. On the flipside, the S&P BSE IT Index was the top gainer, up 1.12 percent.

The mid- and small-cap shares were mixed as the S&P BSE MidCap index fell 0.2 percent while the S&P BSE SmallCap index was little changed.

• Commenting on its April circular SEBI said it is 'preposterous' to say FPI rules will lead to outflows.

• Indian rupee extended decline and fell to a new all-time low of 71.28 per dollar compared with yesterday's close of 71.22.

More pain for the rupee is in the offing as most regional currencies are trading in the red. The currency hit a new record low of 71.2225 on Monday. The rupee so far has lost 10.3 percent to the dollar and is Asia's worst performer. The implied opening suggests the pair may open at 71.44 a dollar.

Bonds too are now facing the brunt of the currency problems. The yield on the 10-year note surged 5 basis points in the last session to 8 percent.

Importantly, this was the sixth consecutive session of gains in the yield, which is the longest since September 2017. For today, the yield may stay in a range of 7.95-8.05 percent in the session.

IDBI Capital on Mold-Tek Packaging

• Initiated ‘Buy’ with target price of Rs 377; Potential upside of 18 percent.
• In-Mold labelling and in-house backward operation integration key catalysts for future growth.
• Timely capacity addition to cater to growing demand.
• Strong foothold in paints and lube segment, entry in food and FMCG to be revenue accretive.
• Expect sales/EBITDA/net profit to grow at a CAGR of 21 percent/27 percent/31 percent respectively over FY18-20.

Kotak on City Union Bank

• Downgraded to ‘Reduce’ From ‘Add’; Raised target price to Rs 200 from Rs 190; Potential upside of 2 percent.
• Rise in stock price could be due to receding concerns.
• Rising interest rates and inability to pass on the costs to lead to weaker NII growth.
• RoE contraction and valuation expansion do not bode well.

Brokerages on Mahindra & Mahindra

UBS

• Maintained Buy; Raised target price to Rs 1,200 from Rs 1,000; Potential upside of 27 percent.
• New SUV launch could drive re-rating.
• Expect tractor growth to remain robust.
• S201 a key potential trigger; Ford alliance a long-term positive.

Deutsche Bank

• Maintained ‘Buy’; Raised target price to Rs 1,050 from Rs 1,005; Potential upside of 11 percent.
• Marazzo pricing is right in middle of two largest selling models in the segment.
• Expect Marazzo to achieve monthly run-rate of 2,500-3,000/month in H2FY19.
• Mahindra planning a capacity of 8,000-9,000/month between Marazzo and S201.

Citi

• Maintained ‘Buy’ with target price of Rs 1,060; Potential upside of 12 percent.
• Utility vehicle growth continues to be modest; Market share softens.
• Tractors report a steady month.
• New SUV models critical; All eyes on Marazzo.

Brokerages on Mindtree

Credit Suisse

• Maintained ‘Neutral’ with target price of Rs 925; Potential downside of 16 percent.
• Management reiterated target of better-than-industry growth and continued margin expansion.
• Continued focus on larger deals; Near-term business momentum remains solid.
• Fundamentals look attractive for the medium term, but valuations leave no upside.

Macquarie

• Maintained ‘Underperform’ with target price of Rs 820; Potential downside of 25 percent.
• High emphasis on platform-led delivery; Investments in digital to continue.
• EPS growth to be faster than revenue due to margin benefits.
• To improve payout ratio by a mix of dividends and buy-backs.

Credit Suisse on CG Consumer

• Maintained ‘Outperform’; Cut target price to Rs 320 from Rs 330; Potential upside of 28 percent.
• Near-term pain point is price-led competition in LED market.
• Go-to market changes are progressing; Overall process to take 18 months.
• Cut FY19-21 EPS estimates to factor in margin pressure in lighting business.

Citi on Tata Motors

• Maintained ‘Buy’ with target price of Rs 410; Potential upside of 54 percent.
• Another strong month for commercial vehicle sales.
• UV sales reflects a better showing.
• Expect October growth to taper off to 5 percent.

HSBC on Quess Corp

• Maintained ‘Buy’ with target price of Rs 1,400; Potential upside of 43 percent.
• Company confident of growing at 20 percent organically and meeting 8 percent margin target in medium term.
• Company to continue to make acquisitions in all segments except its people and services business.
• Company assumes flat pricing, driven by mix, which is too conservative.

Kotak on BHEL

• Maintained ‘Reduce’; Raised target price to Rs 89 from Rs 78; Potential upside of 9 percent.
• Expect EPS to grow meaningfully over FY18-21.
• Weak cash flow performance limits ability to ascribe value to incremental profits.
• Industry scenario to remain unrelenting.

BofAML on Telecom

• Vodafone-Idea may take 1-2 months for network integration to start.
• Believe communication from new management on company strategy is key.
• Consider next 6-9 months as an opportunity for Airtel and Jio to grab market share.
• Expect Infratel to quantify tenancy cancellation number in upcoming quarter.

Brokerages on Cement Sector

Citi

• If construction ban stays for a prolonged period, then it would hurt cement volumes and pricing.
• Ultratech’s 20-25 percent volumes are from regions that are banned.
• ACC/Ambuja have 20/40 percent of their capacity in these regions.
• Shree Cement and Dalmia Bharat have negligible volumes from banned regions.

Morgan Stanley

• Earnings are at an inflection point.
• Saw price hikes in June ended quarter, which should sustain in second half of current financial year.
• Costs should see a modest near-term rise.
• Top Pick: ACC.

Deutsche Bank Research on Indian Banks

• Banks getting aggressive on rate hikes.
• See loan growth improving with non-retail picking up.
• Expect improvement in net interest margins.

Who's Meeting Whom

• PI Industries to meet New Mark Advisors and Franklin Templeton India from Sept. 4-6.
• Eicher Motors to meet Enam Asset Management on Sept. 4.
• Greaves Cotton to meet Birla Sunlife Asset Management Company on Sept. 4.
• IIFL Holdings to meet Elara Capital, JP Morgan Asset Management and other investors from Sept. 4-7.

Insider Trades

• Kirloskar Brothers promoters acquired 3.08 lakh shares from Aug. 30-31.
• Ceat promoter group acquired 56,300 shares from Aug. 29-30.
• UPL promoter acquired 2.23 lakh shares from Aug. 29-30.
• Nava Bharat Ventures promoter acquired 26,000 shares from Aug. 28-30.
• Skipper promoter Rashmi Bansal acquired 88,000 shares on Aug. 31.

(As reported on Sep. 3)

• Nifty September Futures ended at 11,641.7, with a premium of 59.4 points versus 54.8 points.
• September series-Nifty open interest up 0.5 percent; Bank Nifty open interest up 4.4 percent.
• India VIX ended at 13.9, up 6.3 percent.
• Max open interest for the September series call at 11,800 strike price call option, (open interest at 34.7 lakh share, up 26 percent).
• Max open interest for September series put at 11,600 strike price put option (open interest at 34.4 lakh shares, up 6 percent)

Bulk Deals

Hikal Limited

• Ashish Kacholia acquired 20 lakh shares (1.62 percent) at Rs 166.5 each
• The International Finance Corporation sold 39.8 lakh shares (3.23 percent) at Rs 166.51 each.

IG Petrochemicals

• Birla Mutual Fund acquired 5 lakh shares (1.62 percent) at Rs 480 each.
• Birla Sun Life Long Term Advantage Fund acquired 5 lakh shares (1.62 percent) at Rs 480 each.

Mahindra Lifespace Developers

• First State Investment acquired 3.05 lakh shares (0.59 percent) at Rs 440.25 each.
• American Fund Insurance sold 7.1 lakh shares (1.39 percent) at Rs 440.42 each.

Trading Tweaks

• Infosys' ex date date for 1:1 bonus. F&O lot size revised to 1,200 shares.

• Jet Airways’ long-term rating cut to ‘BB’ from ‘BB+’ at ICRA. The rating agency gives a negative outlook citing significant rise in jet fuel prices and no corresponding increase in air fares, which impacted the financial performance of the company. Even the short-term rating stands revised to ‘A4’ from ‘A4+’. This is the second time in less than four months where the rating agency has downgraded the credit rating on Jet Airways citing the same reasons.
• State Bank of India to offer loans for repairs and renovation of homes in Kerala at 8.45 percent. The scheme is applicable for loans up to Rs 10 lakh, up to November 3. Even the processing fee for these loans will be waived off.
• MTNL's plans to seek approval of shareholders for raising authorised share capital from Rs 800 crore to Rs 10,000 crore and borrowing powers by almost 40 percent will aid the state-owned corporation's 4G plans and provide it the firepower to compete in the market, its chairman PK Purwar has said. This is being done with anticipation of 4G spectrum allocations by the government. (PTI)
• Hotel Leela Ventures clarifies that is evaluating various options to reduce debt. The management says the company is in discussion with three to four investors including Brookfield.
• VST Tillers August sales data: Power tillers sales up 1.1 percent at 1,646 units versus 1,628 units and tractors sales down 49.7 percent at 517 units versus 1,028 units.
• Yuken India fixes September 14 as the record date for its bonus issue. The ratio for this issue is set at 3:1.
• Persistent Systems’ U.S. arm acquires 100 percent stake in Herald Technologies for $5.2 million. The acquired business will strengthen the company’s intellectual property led offerings in the healthcare domain and create cross-selling opportunities.
• GTL Infrastructure’s certain distressed loans have been bought by Bank of America Merrill Lynch and Edelweiss Asset Reconstruction Co. for about Rs 1,400 crore ($197 million). Banks led by Union Bank are said to take more than 40 percent haircut in getting their loans back, according to Bloomberg.
• Muthoot Finance to consider raising Rs 5,000 crore via non-convertible debentures.
• Maruti Suzuki: Parent Suzuki aims to treble sales volume by 2030 in India, retain 50 percent of Indian car market (Business Standard).

• Fund managers fear foreign outflows after SEBI’s new rules
• JPMorgan Asset buys defensive stocks on faster Asian value cycle
• NITI Aayog chief blames Rajan-era bad loan review for slowdown
• IndiGo puts 10 lakh seats on sale with fares starting Rs 999
• Lehman Brothers former chief economist on the lessons from 2008
• JSPL studying breakup plan, says Naveen Jindal
• De Beers will allow buyers to reject cheap diamonds
• A social media test for Congress ticket aspirants in Madhya Pradesh
• Mattis and Pompeo to seek India accord amid threat of sanctions
• Three years into the bad loan clean-up, resolution remains a distant dream

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 11,631 as of 7:31 a.m.

Asian stocks were mixed Tuesday amid continuing concerns about stability in emerging markets and prospects for escalating U.S.-China trade tensions. The dollar and Treasury yields were steady.

Equity benchmarks swung between gains and losses with little direction after American exchanges were closed Monday for a holiday. The yen fluctuated after the Bank of Japan increased purchases of shorter-term bonds in its regular operations Tuesday, compensating for a reduction in the number of days on which it plans to buy them.

Currencies

• The Japanese yen was steady at 111.14 per dollar.
• The offshore yuan traded flat at 6.8289 per dollar.
• The Bloomberg Dollar Spot Index rose 0.1 percent.
• The euro lost 0.2 percent to $1.1602.

Commodities

• West Texas Intermediate crude advanced 0.3 percent to $70.04 a barrel.
• Gold was little changed at $1,200.43 an ounce.
• LME copper fell 0.1 percent to $5,959 a metric ton.

Here are some key events coming up this week:

• Reserve Bank of Australia meets Tuesday and is expected to leave rates on hold.
• Bank of England Governor Mark Carney on Tuesday testifies on the August inflation report and policy decision.
• Executives from Facebook, Twitter and Google on Wednesday testify on social media, Russia meddling.
• U.S. PMI data is due Tuesday, and employment reports for August are set to follow Friday.