Sensex Posts Longest Losing Streak In Six Months On Rupee Woes

India's Sensex posted its longest losing streak in nearly six months as rupee weakened to an all-time low of 71.96 per dollar.

The Sensex fell 0.37 percent or 140 points to 38,018 and the Nifty 50 index declined 0.4 percent or 43 points to 11,477.

Thirteen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Telecom index's 2.2 percent drop. On the other hand, the S&P BSE Metal index was top gainer, up 1.1 percent.

Mid- and small-cap shares also declined in line with larger peers. The S&P BSE MidCap index fell 0.6 percent and the S&P BSE SmallCap index slipped 0.5 percent.

• Bandhan Bank has 98 lakh shares change hands in a single block. Stock up 1.8 percent at Rs 150.
• Bharti Airtel has 15 lakh shares change hands in a block deal. Stock down 1 percent at Rs 374.40.
• HDFC has 10.10 lakh shares change hands in a single block. Stock down 0.3 percent at Rs 1,948.85.
• Bharat Electronics has 11.7 lakh shares change hands in a single block. Stock down 8 percent at Rs 100.45.

Buyers and sellers were not immediately known

Source: Bloomberg

Sensex and Nifty came off intraday low levels as Yes Bank, ICICI Bank, Sun Pharma and Vedanta advanced helping the benchmarks to stage partial recovery.

• Muthoot Finance: The Koch-based non-banking finance company rose as much as 10 percent, the most in over a year, to Rs 440 after it reported strong June quarter earnings.
• Texmo Pipes: The Madhya Pradesh-based PVC pipe maker rose as much as 16.2 percent to Rs 28 after it won order for HDPE pipes worth Rs 81.30 crore from Larsen & Toubro Limited.
• Kirloskar Ferrous: The Pune-based iron and ferrous castings maker rose as much as 9.5 percent, the most in nearly five months, to Rs 100.50 after won rights for iron ore mining in Karnataka.
• Mcnally Bharat: The Kolkata-based infrastructure construction company rose as much as 8.9 percent, the most in nearly two months, to Rs 40.40 after it received a construction order worth Rs 108 crore from NLC India.

• India's S&P BSE Sensex extended decline and was on track to post its longest losing streak in six months as rupee depreciated to record lows.
• The Sensex fell 0.9 percent or 362 points to 37,797 and the NSE Nifty 50 index slumped 1.04 percent or 120 points to 11,400.
• The mid- and small-cap shares saw deep cuts as the respective indices on the BSE fell 1.6 percent.
• The overall market breadth was extremely bearish as over 1,900 stocks were declining while 713 were advancing on BSE.

Click here for more stock market statistics

Government official says power PSUs and banks will hold stake in asset reconstruction company under Pariwartan scheme.

• Asset Reconstruction Company to keep stressed power assets for 4-5 years.
• Process of registering ARCs has begun.
• Power PSUs, bankers to be part of ARCs.
• Pariwartan is for power projects without PPAs.
• Pariwartan is meant to keep commissioned projects operational.

Source: Government official to BloombergQuint

A deteriorating EM risk backdrop and pressure on current account deficit currencies has led USD/INR to multi-year highs. We see risk of continued INR depreciation in the near term and enter a short-dated long USD/ INR call spread position, Nomura said in a research report.

Stocks dropped in Europe and Asia as continued pressure in many emerging markets intensified concerns of contagion. With investors seeing no let-up in trade tensions, the dollar strengthened for a fifth session and commodities fell, led by oil.

Banking shares extended losses as the Nifty Bank index slipped below its 50-day moving average.

RBL Bank, IDFC Bank, Kotak Mahindra Bank and Punjab National Bank were among the top losers in the Nifty Bank index.

• Indian equity benchmarks extended decline after rupee depreciated to record low of 71.96 per dollar.
• The Sensex fell 0.7 percent or 287 points to 37,868 and the Nifty 50 index declined 0.88 percent or 100 points to 11,418.
• All 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Consumer Durables index's 2.5 percent drop.
• Mid- and small-cap shares were underperforming larger peers as the S&P BSE MidCap index fell 1.5 percent and the S&P BSE SmallCap index tumbled 1.4 percent.
• The overall market breadth was extremely negative as 1,875 shares were declining while 656 were advancing on the BSE.

Shares of the Mumbai-based airline fell as much as 3.2 percent to Rs 263 after Financial Times reported that Jet Airways has failed to pay salary to thousands of staff in August.

• Thyrocare: The Mumbai-based diagnostic lab operator rose as much as 2.1 percent to Rs 694.80. Trading volume was 30 times its 20-day average.
• Advanced Enzyme Technologies: The Mumbai-based specialty chemicals company rose as much as 11.2 percent to Rs 229.20. Trading volume was 18.3 times its 20-day average.
• Alembic Pharma: The Vadodara-based drugmaker rose as much as 5.8 percent to Rs 638. Trading volume was 9 times its 20-day average.
• Cyient: The Hyderabad-based IT services company rose as much as 6.3 percent to Rs 775. Trading volume was 6.7 times its 20-day average.

Nifty Bank's 27,600 call option was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 64 percent to Rs 30.85. Over 7.12 lakh shares were added to the open interest which stood at over 11.02 lakh shares.

Click here to see the complete options chain

• Indian rupee continues to depreciate, falls 23 paise to an all-time low of 71.79 per dollar.

The Nikkei India services Purchasing Managers' Index, or PMI, fell to 51.9 in August from July’s 21-month high of 54.1, indicating slower rise.

A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

The slowdown was driven by the weakest growth in new work in 3 months, although business confidence rose to the highest level since May.

Source: Nikkei

• Indian rupee gave up early gains to depreciate to record low of 71.65 per dollar.

Banking shares were trading mixed with IndusInd Bank, RBL Bank and Bank of Baroda among laggards while Yes Bank, IDFC Bank and Kotak Mahindra Bank among the gainers.

The Nifty Bank index was hovering around its 50-day moving average which is placed at 27,371.

Shares of the fast-moving consumer goods (FMCG) companies fell for third day in a row.

The gauge of FMCG of shares on the NSE — Nifty FMCG index fell 0.8 percent led by losses in Godrej Consumer Products, GSK Consumer Healthcare and Britannia Industries.

In the last three trading sessions, the index has declined over five percent.

Shares of the Delhi-based steel maker and power producer fell as much as 4.75 percent to Rs 14.20 after JSW Steel and its promoters acquired around 88 percent stake in the company following completion of the insolvency resolution proceedings, Monnet Ispat said in an exchange filing.

The National Company Law Tribunal (NCLT) had earlier approved a Rs 2,875-crore bid by a consortium of Aion Investments and JSW Steel to acquire the bankrupt Monnet Ispat & Energy, which owes over Rs 11,000 crore to a clutch of lenders.

The Aion-JSW consortium was the sole bidder for the 1.5-million-tonne asset in Chhattisgrah.

Shares of the Kochi-based non-banking finance company rose as much as 5.5 percent, the most in over a month, to Rs 422 after it beat Bloomberg consensus estimates in June quarter.

Key earnings highlights:

• Interest income up 18 percent at Rs 1605.3 crore.
• Net Profit up 43 percent (YoY) at Rs 492 crore versus Rs 458 crore.
• Provisions down 79 percent at Rs 2.7 crore.
• Gross loan assets up 11 percent at Rs 30,997 crore.
• Gold loan outstanding up 10 percent at Rs 30,562 crore.

Shares of the Mumbai-based advanced pharmaceutical ingredients and generic drugmaker rose as much as 4.86 percent to Rs 404.95.

Sun Pharma Advanced Research Company (SPARC) will file new drug application for cancer drug Taclantis in the fourth quarter of current financial year, the company said in an exchange notification.

SPARC also released deadlines for FDA to review its two new drugs Xelpros and Elepsia in November 2018 and January 2019, respectively.

Indian equity benchmarks edged higher led by gains in pharma shares. However, the gains were capped due to weakness in metal and banking stocks.

The S&P BSE Sensex rose 0.2 percent to 38,242 and the NSE Nifty 50 index rose 0.14 percent to 11,537.

Sixteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal index's 1 percent drop. On the flipside, the S&P BSE Healthcare index was top gainer, up 0.6 percent.

Mid- and small-cap shares were underperforming their larger peers as the S&P BSE MidCap index fell 0.3 percent and the S&P BSE SmallCap index declined 0.25 percent.

• Indian rupee recovered from record low to open at 71.38 per dollar against yesterday's close of 71.57.

BloombergQuint spoke to Chandan Taparia, derivatives and technical analyst at Motilal Oswal and below are hist trading strategies for the day.

• Buy HDFC with stop loss at Rs 1,920 for target price of Rs 1,990.
• Buy HCL Technologies with stop loss at Rs 1,058 for target price of Rs 1,118.
• Sell Escorts with stop loss at Rs 820 for target price of Rs 770.
• Buy Nifty 11,500 strike price put option near Rs 100 with stop loss at Rs 75 for target price of Rs 150.

Nomura on Cochin Shipyard

• Initiated ‘Buy’ with a price target of Rs 534, implying a potential upside of 28 percent from the last regular trade.
• See strong medium-term visibility from defence orders and ship repair ramp-up.
• Expect Revenue and operating income to grow at a compounded annual growth rate of 15 percent and 18 percent over FY18-21.
• See an addressable defence opportunity worth Rs 1.15 lakh crore over next five years.
• Expect Cochin to bag Rs 24,400 crore of orders extending revenue visibility well until March 2030.

HDFC Securities on HG Infra

• Initiated ‘Buy’ with a price target of Rs 386, implying a potential upside of 61.5 percent from the last regular trade.
• Further pickup in NHAI orders in the second half to address longevity concerns on earnings up-cycle.
• Positives: healthy balance sheet, stable working capital cycle and entry into HAM.
• Sub-contracting projects to boost margins.
• Expect Order Book, revenue and net profit to grow at a compounded annual growth rate of 32 percent, 35 percent and 38 percent respectively over FY18-20.

Edelweiss on ITC

• Upgraded to ‘Buy’ from ‘Hold’; raised price target to Rs 405 from Rs 328, implying a poterntial upside of 31 percent from the last regular trade.
• Expect cyclical improvement in volume trajectory.
• cigarette EBIT growth riding structural levers - limited cess hike & ban of e-cigarettes.
• Believe ITC’s other businesses too are ripe for re-rating.

Credit Suisse on FMCG

• Britannia: Downgraded to ‘Neutral’ from ‘Outperform’; raised price target to Rs 6,900 from Rs 6,000, implying a potential upside of 9 percent from the last regular trade.
• HUL: Downgraded to ‘Neutral’ from ‘Outperform’; cut price target to Rs 1,770 from Rs 1,850, implying a potential upside of 7 percent from the last regular trade.
• Last stock move has taken valuations to unprecedented territory.
• Downgrade Britannia and HUL as there is no scope for earnings upgrades and see margin risks in the next financial year.
• Prefer Dabur, Nestle and Colgate.

Deutsche Bank on Grasim Industries

• Maintained ‘Buy’ with a price target of Rs 1430, implying a potential upside of 40 percent from the last regular trade.
• Robust earnings growth outlook not yet discounted.
• Expect margins to remain strong based on global demand-supply dynamics.
• Volume growth should also improve substantially as VSF capacity is expanding.

Jefferies on GAIL (India)

• Maintained ‘Buy’ with a price target of Rs 450, implying a potential upside of 25 percent from the last regular trade.
• See robust earnings outlook with strong momentum in LPG/Petchem.
• Winter may bring materially higher trading EBIT.
• Most of the segments should fare better in coming quarters skewing EPS risks to the upside.

Citi on ICICI Bank

• Maintained ‘Buy’ with a price target of Rs 390, implying a potential upside of 19 percent from the last regular trade.
• Focusing on delivering growth in risk-adjusted operating profit.
• Bank minimising exposure to riskier loans while aiming for 15 percent consolidated RoE by June 2020.
• Believe that NPA recognition is in last leg and focus will shift to recoveries.

Macquarie on Graphite India

• Maintained ‘Outperform’ with a price target of Rs 1,410, implying a potential upside of 41 percent from the last regular trade.
• Needle coke market to remain tight and restrict GE supply.
• Management confident it can pass on cost pressures.
• Increasing comfort on longevity of current up-cycle and prudent capital allocation to re-rate stock.

CLSA on Media

• Expect digital ad revenue to jump four times led by explosive growth of digital video.
• Print ad share will be hit hard but TV ad revenue will continue to grow.
• Zee Entertainment is set up for success in both TV and digital.

Who’s Meeting Whom

• Prism Johnson to meet ARGA Investment Management on Sept. 5.
• Voltas to meet Marshall Wace, Blackrock Advisors and other investors from Sept. 5-6.
• Inox Leisure to meet ICICI Securities on Sept. 5.
• Shriram City Union Finance to meet Dolat Capital Markets and Reliance MF from Sept. 5-7.
• Finolex Industries to meet Edelweiss Asset Management and Reliance MF from Sept. 5-12.

Insider Trades

• Maharashtra Seamless promoter acquired 1 lakh shares on Aug. 30.
• Kitex Garments promoter Sabu Jacob sold 16,800 shares on Aug. 30.
• Fairchem Speciality promoter and director Utkarsh Shah sold 45,000 shares on August 31.

(As reported on Sep. 4)

• Nifty September Futures ended at 11,573.1, with a premium of 52.8 points versus 59.4 points.
• September series: Nifty open interest up 0.3 percent; Bank Nifty open interest up 3.4 percent.
• India VIX ended at 13.7, up 2.9 percent.
• Max open interest for the September series call at 11,800 strike price call option (open interest at 41.6 lakh shares, open interest up 20 percent).
• Max open interest for September series put at 11,500 strike price put option (open interest at 36.7 lakh shares, open interest up 17 percent).

Bulk Deals

• MEP Infrastructure Developers: Promoter Sudha Dattatray Mhaiskar acquired 9.4 lakh shares or 0.51 percent equity at Rs 50.99 each.
• JM Financial: Saif India Holdings acquired 53 lakh shares or 0.63 percent equity at Rs 121.96 apiece.

Dynamatic Technologies

• Goldman Sachs India Limited sold 83,000 shares or 1.31 percent equity at Rs 1625.01 apiece.
• Girish Gulati Huf acquired 83,000 shares or 1.31 percent equity at Rs 1625.04 apiece.

Trading Tweaks

• TCS last trading day before start of buyback.
• Adani Enterprises last trading day before demerger.

• 10:30am: Nikkei India Services PMI for August, prior 54.2.
• 10:30am: Nikkei India Composite PMI for August, prior 54.1.
• 09/05-09/28: India 2Q BoP Current Account Balance, est. $17.0b deficit, prior $13.0b deficit.

• HUDCO
• SREI Infrastructure
• Varroc Engineering

Muthoot Finance Q1 (Standalone, YoY)

• Interest income up 18 percent at Rs 1605.3 crore.
• Net Profit up 43 percent at Rs 492 crore.
• Provisions down 79 percent at Rs 2.7 crore.
• Gross loan assets up 11 percent at Rs 30,997 crore.
• Gold loan outstanding up 10 percent at Rs 30,562 crore.

• Sun Pharma Advanced Research Company (SPARC) released deadlines for FDA to review its two new drugs Xelpros and Elepsia in November 2018 and January 2019, respectively. The company also said that it will shift its research facility to Vadodara and file new drug application for cancer drug Taclantis in the fourth quarter of this financial year.
• Qatar Airways CEO Akbar Ali Baker says he won’t rule out any future opportunity for investing in IndiGo. He also said that if the airline approached them, they gulf-based carrier will show interest. He added that Qatar Airways is open for partnership with a local partner who is credible and financially sound. (Press Trust of India)
• LT Foods arm Nature Bio Foods secures equity funding of Rs 140 crores from Rabobank’s India Agri Business Fund II. This investment will facilitate further development of a retail consumer portfolio through the ‘EcoLife’ brand which offers rice, rice flour, staples, spices, nuts, etc.
• Emami Infrastructure mulls modifying its Memorandum of Association by entering into manufacturing of crude drugs and raw materials, pharmaceutical preparations, aerated and mineral waters and similar other preparation. The annual general meeting is scheduled on September 27.
• Jet Airways announces six-day global fare sales. The sale is effective till Sep. 7 and covers 2.5 million seats over its network. Will offer savings up to 30 percent on economy and premiere fares.
• NBCC gets direction from National Green Tribunal to provide a report on the revival of the iconic Purana Qila lake in Delhi after a plea alleged that the project was being undertaken in a manner which would damage the environment. The plea said that the method of concretization and laying down of the sheets will lead to damage of the lake.
• Texmo Pipes and Products received orders of HDPE Pipe worth Rs 81.30 crore from Larsen & Toubro. The execution period of the aforesaid order is nine months.
• McNally Bharat Engineering received construction order worth Rs 108 crores from NLC India. The project will be undertaken in Odisha.
• Hindustan Construction Company to consider fund raising via share sale. (Bloomberg)
• Karnataka Bank to consider proposal for augmenting the capital by Tiers II. (Bloomberg)

• Shivinder Singh sues brother Malvinder, breaks business partnership
• Contagion or not, these emerging markets hold key to selloff
• Mercedes unveils first Tesla rival in $12 billion attack
• Continued fall in rupee leads to rate hike fears
• Government rules out excise duty cut as petrol, diesel prices peak
• Rupee woes set to deepen as India braces for external headwinds
• SEBI panel may suggest easing ownership rules for foreign funds
• Lockheed Martin to produce F-16 fighter jet wings in India
• Amazon joins Apple in climb to $1 trillion market value
• Urjit Patel’s third year: Fighting ghosts of the past and the future
• India shoots the wrong general in lost war on cash
• Why SEBI’s new KYC norms have spooked some foreign investors

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.2 percent to 11,565 as of 7:08 a.m.

Asian stocks followed U.S. equities lower amid continued pressure in many emerging markets and as trade tensions persisted. The yen declined, while the dollar and Treasury yields steadied after gains.

Equities posted modest declines in Japan, Australia and South Korea, while futures on indexes in China and Hong Kong pointed to a weaker open.

Currencies

• The yen fell 0.2 percent to 111.66 per dollar.
• The offshore yuan held at 6.8537 per dollar.
• The Bloomberg Dollar Spot Index increased was flat after rising 0.4 percent Tuesday to the highest in almost three weeks.
• The euro bought $1.1583.
• The MSCI Emerging Markets Currency Index slipped 0.2 percent after sinking 0.5 percent Tuesday, the lowest since May 2017.

Commodities

• West Texas Intermediate crude dropped 0.7 percent to $69.38 a barrel.
• Gold was flat at $1,191.40 an ounce.
• The Bloomberg Commodity Index declined 0.7 percent.

Here are some key events coming up this week:

• Australian GDP data for the second quarter comes out Wednesday.
• Executives from Facebook, Twitter and Google on Wednesday testify on social media, Russia meddling.
• The monthly U.S. employment report for August is due Friday.