Sensex, Nifty End At Over One-Month Low As Rupee Slide Continues

Indian equity benchmarks fell for second consecutive day to their lowest level in over a month after rupee weakened to a new low against the U.S. dollar.

The Sensex fell 1.34 percent or 509 points to 37,413 and the Nifty 50 Index slumped 1.32 percent or 164 points to 11,287.

All 19 sector gauges compiled by BSE ended lower led by the S&P BSE Consumer Durables index's 2.5 percent drop.

The mid- and small-cap shares fell in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indexes fell 1.3 percent each.

The Sensex slumped over 500 points and the Nifty 50 Index broke below important psychological level of 11,300 as heavyweights like HDFC Bank, ITC and Reliance Industries under heavy selling pressure.

• ITC has 13.1 lakh shares change hands in a block. Stock down 3 percent at Rs 297.

Buyers and sellers were not immediately known

Source: Bloomberg

• Indian rupee fell 0.4 percent or 29 paise to new low of 72.74 per dollar.

Shares of the country's largest private sector lender fell as much as 2.36 percent, the most in over three months, to Rs 1,993 on heavy trading volumes. Trading volume was 1.7 times its 20-day average.

On the Relative Strength Index (RSI), the stock fell to level of 28 indicating that it may be oversold.

A reading below 30 on the RSI indicates a stock may be oversold while above 70 indicates to be overbought.

• Indian rupee erased gains and fell 0.2 percent or 18 paise to 72.6413 per dollar.

Indian equity benchmarks extended losses dragged by heavyweights like ITC, HDFC twins, Reliance Industries and TCS. The rupee also gave up gains to trade 0.2 percent lower at 72.64 per dollar.

The S&P BSE Sensex fell 1 percent or 385 points to 37,535 and the NSE Nifty 50 index slumped 1.04 percent or 120 points to 11,317.

All 19 sector gauges compiled by BSE were trading lower led by the S&P BSE FMCG Index's 2.2 percent drop. As many as eight sector gauges cracked over a percent.

Mid- and small-cap shares also came under the selling pressure as S&P BSE MidCap and S&P BSE SmallCap index plunged over one percent.

• Stays RBI's February 12 circular w.r.t to power, shipping, sugar companies.
• Stay granted for companies which have proceedings pending before High Courts.

Shares of the fast-moving consumer goods (FMCG) companies were among the worst hit in trade today.

The Nifty FMCG index fell over 2 percent, the most since Sept. 4, led by Godrej Consumer Products, ITC, Marico and Godrej Industries.

Shares of the Chennai-based diversified chemical maker rose as much as 4.3 percent to Rs 39 after it launched products from its U.K. arm, Notedome Ltd, in India.

The U.K. arm is a manufacturer of high-performance polyurethanes and was acquired by Manali Petrochemicals’ subsidiary in Sept. 2016.

Indian equity benchmarks were trading with a negative bias weighed down by weakness in FMCG, telecom and consumer durables.

The S&P BSE Sensex fell 0.11 percent or 42 points to 37,879 and the NSE Nifty 50 Index declined 0.15 percent to 16 points to 11,422.

Thirteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Bankex index's 0.4 percent gain. On the flipside, the S&P BSE FMCG index was top loser, down 1.5 percent.

The market breadth was neutral as 1,211 shares were advancing while 1,250 were declining on the BSE.

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The market regulator is confident of completing the processes for extending trading time for derivatives by Oct. 1, Ajay Tyagi, chairman of Securities & Exchange Board of India, says in Mumbai.

Source: Bloomberg

• Dredging Corp: The Vishakhapatnam-based dredging activities provider rose as 11.5 percent, the most in nearly three months, to Rs 524.70. Trading volume was 26 times its 20-day average.
• ITDC: The Delhi-based state-run tourism development company rose as much as 14 percent, the most in over two months, to Rs 430.50. Trading volume was 25 times its 20-day average.
• Shipping Corp: The Mumbai-based shipping company rose as much as 7 percent, the most in three months, to Rs 56.90. Trading volume was 13.4 times its 20-day average.
• Greenply Industries: The Kolkata-based plywood maker fell as much as 1.2 percent to Rs 191. Trading volume was 12.2 times its 20-day average.

Finance Ministry officials have asked Reserve Bank of India to do more open market operations to maintain adequate liquidity in the banking system.

• RBI will take a decision on open-market operations after assessing the scenario, the people said, asking not to be identified as they are not authorized to speak to media.
• Government has asked state-controlled lenders to be more active investors in the sovereign debt market, the people said.

Source: People With Knowledge Of The Matter To Bloomberg

Car sales declined while trick and bus sales rose over 29 percent in August, data compiled by Society of Indian Automobile Manufacturers showed.

Key sales highlights:

• August car sales fell 1 percent to 1,96,847 units versus 1,98,892 units (YoY)
• Local passenger vehicle sales fell 2.4 percent to 2,86,186 units versus 2,94,416 units (YoY)
• Two-wheeler sales rose 2.9 percent to 19,46,811 versus 18,91,685 units (YoY)
• Truck and bus sales rose 29.56 percent to 84,668 units versus 65,350 units (YoY)

ArcelorMittal has sought time to deposit Rs 7,000 crore as ordered by the court to stay in race to acquire debt-ridden Essar Steel. The Supreme Court will hear ArcelorMittal's plea tomorrow, Bloomberg reported.

Nifty Bank's 27,400 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Over 3.82 lakh shares were added to the open interest which stood at over 11.93 lakh shares.

Click here to see the complete options chain

Shares of the Mumbai-based brokerage firm rose as much as 3 percent to Rs 337.45 after it initiated coverage on the stock with a buy for target price of Rs 425.

Citi in a note said that it expects ICICI Securities to be a beneficiary of a shift to financial avenues of savings and client franchise can benefit from ICICI group.

Expect revenue and net profit to grow at a compounded annual growth rate of 16 percent and 21 percent respectively over FY18-21, Citi added.

Shares of the country's largest lender rose as much as 1.5 percent to Rs 289.15 after it sought bids from asset reconstruction companies (ARCs) and NBFCs to sell eight non-performing asset (NPA) accounts of Rs 3,948 crore, Bloomberg reported.

Shares of the Kolkata-based sugar manufacturer fell as much as 2.9 percent to Rs 76.70 after Morgan Stanley France SAS sold 14.8 lakh shares or 0.63 percent equity at Rs 78.32 per share.

Shares of the Anil Ambani-led mortgage lender gained as much as 4.4 percent, to a seven-month high, of Rs 76.90.

Abu Dhabi Investment Authority, Singapore's sovereign wealth fund GIC and Public Sector Pension Investment Board of Canada are in race to pick 25 percent stake in Reliance Home Finance for Rs 1,500-2,000 crore, news agency Press Trust of India reported.

The funds will be used for expansion of the company, which is focusing on affordable housing for future growth.

Meanwhile, the company reported earnings post market hours yesterday.

• Revenue from operations grew 5.5 percent to Rs 404 crore.
• Net profit rose 41 percent to Rs 48 crore.
• AUM growth at 21 percent at Rs 15,640 crore.
• Gross NPA unchanged at 0.8 percent (YoY).
• NIM at 3.2 percent versus 3.8 percent (YoY).

Shares of the Mumbai-based drugmaker rose as much as 1.76 percent to Rs 649.20 after its arm acquired 18.75 percent stake in Israel based Tarsius Pharma for $3 million.

Tarsius Pharma is an early-stage research and development company focusing on development of drug candidates in the field of ophthalmology.

Indian equity benchmarks pared opening gains as buying in drugmakers and Infosys was offset by selling pressure in financials and ITC.

The S&P BSE Sensex, which rose over 100 points, gave up gains to fall 0.1 percent or 50 points to 37,872 and the NSE Nifty 50 Index declined 0.12 percent or 14 points to 11,422.

Nine of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE FMCG Index's over 1 percent drop. On the flipside, the S&P BSE IT Index was the top gainer, up 0.65 percent.

The broader markets were muted as the S&P BSE MidCap and S&P BSE SmallCap indexes were little changed.

Indian rupee came off record low levels and opened higher at 72.30 per dollar against yesterday's close of 72.44.

The local unit rose as much as 0.2 percent or 17 paise to 72.2763 amid government expressing concern about the rupee’s decline for the first time and said it’s considering a plan to tap its citizens overseas, a government official said on Monday.

Below are top trading ideas for today from market experts:

Shrikant Chouhan, technical analyst at Kotak Securities

• Sell Nifty with stop loss at 11,500 for target of 11,300.
• Buy GAIL India with stop loss at Rs 373 for target of Rs 385.
• Sell IGL with stop loss at Rs 273 for target of Rs 263.

Brijesh Singh, senior technical analyst at Stockaxis

• Buy Max Financial Services with stop loss at Rs 488 for target of Rs 520.
• Buy Hexware with stop loss at Rs 442 for target of Rs 462.
• Sell Sun Pharma with stop loss at Rs 651 for target of Rs 620.
• Sell Dabur with stop loss at Rs 462 for target of Rs 433.

The focus will be on the battered rupee after the currency fell to a record low on Monday as traders wait to see whether the authorities will roll out any measures to halt the currency’s decline.

India expressed concern about the rupee’s decline for the first time and said it’s considering a plan to tap its citizens overseas, a government official said on Monday.

The rupee lost nearly 1 percent to end at 72.4575 per dollar, having fallen to as low as 72.67. The implied opening from the forwards suggest that the rupee will start trading at 72.67 on Tuesday, down nearly 11 percent on the year so far.

The sour sentiment in the currency market is of course spilling onto the bond market. The yield on the 10-year bond climbed 13 basis points to 8.16 percent on Monday with traders increasingly worried that high oil prices and a weakening rupee would force the central bank to raise rates sooner rather than later. Later on Tuesday, 10 states will sell Rs 8,650 crore of bonds.

Citi on ICICI Securities

• Initiated ‘Buy’ with a price target of Rs 425, implying a potential upside of 30 percent from the last regular trade.
• Expect it to be a key beneficiary of a shift to financial avenues of savings.
• Leading retail broking franchise; Growing in distribution.
• Client franchise can benefit from ICICI group.
• Expect revenue and net profit to grow at a compounded annual growth rate of 16 percent and 21 percent respectively over FY18-21.

Edelweiss on Sheela Foam

• Initiated ‘Buy’ with a price target of Rs 2,010, implying a potential upside of 20 percent from the last regular trade.
• Superior brand with strong distribution and pricing power.
• Positives: Broad-based growth, easing raw material prices and improving mix.
• Expect revenue, Ebitda and net profit to grow at a compounded annual growth rate of 14 percent 30 percent and 35 percent respectively over FY18–20.
• Sheela Foam trades at high valuations, but EPS reflects the opportunity size.

UBS on Infosys

• Maintained ‘Buy’; raised price target to Rs 865 from Rs 737, implying a potential upside of 18 percent from the last regular trade.
• Currency gains create opportunity to accelerate investments.
• Attrition remains a challenge; Senior management retention is key.
• Upgrade estimates and TP to reflect recent currency moves.

BofAML on Glenmark Pharma

• Maintained ‘Neutral’; raised price target Rs 715 from Rs 600, implying a potential upside of 4 percent from the last regular trade.
• Respiratory drivers in EU intact for double digit growth.
• U.S. pipeline in generics is lacking visibility.
• Big launches in 2019-2020, but see near-term risk in mupirocin competition.
• Debt reduction expectations on back of recent deals led to stock re-rating.

Citi on Cummins India

• Maintained ‘Buy’; raised price target to Rs 844 from Rs 779, implying a potential upside of 13 percent from the last regular trade.
• Exports guidance could get revised up post September.
• Positive on a potential business rebound.
• Increase in price target to factor in higher sales and higher operating margins.

Macquarie on Indian IT Services

• Currency boost in improving growth environment.
• Industry trends continue to point at growth acceleration.
• Upgrade Wipro and Hexaware to Outperform on valuations.
• In large cap preference is HCL Tech > TCS > Infosys > Wipro and Tech Mahindra.
• In mid-caps, preferred pick is L&T Infotech.

Macquarie on Ujjivan Financial

• Maintained ‘Outperform’; cut price target to Rs 460 from Rs 490, implying a potential upside of 40 percent from the last regular trade.
• Rising bond yield concerns overdone; Changing liability mix being overlooked.
• Ujjivan on track to deliver 35 percent loan CAGR and 16 percent RoE by March 2021.
• Correction in the past three months provides attractive entry price.

Citi on BHEL

• Maintained ‘Neutral’; raised price target to Rs 84 from Rs 78, implying a potential upside of 8 percent from the last regular trade.
• NTPC Talcher 1320MW likely to fructify soon.
• Of the total order Rs 19000 crore orders are slow moving.
• Increase EPS estimates by 7-8 percent based on trends in the latest annual report.

Deutsche Bank on Tata Global

• Maintained ‘Hold’ with a price target of Rs 285, implying a potential upside of 28 percent from the last regular trade.
• Integration of international business to drive cost optimization.
• Increased focus on Indian business, entry into branded coffee and profitable Starbucks augurs well.
• Expect 14 percent earnings CAGR over FY18-21.

CLSA on HDFC Life

• Maintained ‘Buy’ with a price target of Rs 600, implying a potential upside of 33 percent from the last regular trade.
• Management sees healthy growth in insurance industry as it remains preferred pool of household savings.
• HDFC Life is banking on expanding distribution and product innovation.
• Believe HDFC Life is well placed to deliver a 24 percent CAGR in new premiums.

• Nifty September futures ended at 11,493, with a premium of 53 points versus 44 points.
• September series: Nifty open interest down 0.6 percent and Bank Nifty open interest up 11 percent.
• India VIX ended at 15.2, up 9.5 percent.
• Max open interest for September series call at 11,800 strike price call option (open interest at 45 lakh shares, open interest up 13 percent).
• Max open interest for September series at 11,400 strike price put option (open interest at 44.3 lakh shares, open interest down 6.6 percent).

Insider Trades

• Confidence Petroleum India promoter Nitin Khara acquired 10,000 shares on Sept. 7.
• Laurus Labs promoter Naga Rani Chava acquired 16,000 shares on Sept. 5.

Trading Tweaks

• Hathway Cable & Datacom Ltd circuit filter revised to 10 percent.
• GlaxoSmithKline Pharmaceuticals ex-date for 1:1 bonus.
• J.B. Chemicals & Pharmaceuticals ex-date to determine buyback eligibility.
• Godrej Consumer Products’ last trading day before ex-date for 1:2 bonus.

• Galaxy Surfactants to meet investors between Sept. 11-14.
• PI Industries to meet JM Financial Services on Sept. 11.
• Finolex Industries to meet Reliance MF and other investors on Sept. 11.

• Balrampur Chini Mills: Morgan Stanley France SAS sold 14.8 lakh shares or 0.63 percent equity at Rs 78.32 apiece.

• PFC
• Reliance Capital

Earnings Reaction To Watch

Reliance Home Finance (Q1, YoY)

• Revenue from operations grew 5.5 percent to Rs 404 crore.
• Net profit rose 41 percent to Rs 48 crore.
• AUM growth at 21 percent at Rs 15,640 crore.
• Gross NPA unchanged at 0.8 percent (YoY).
• NIM at 3.2 percent versus 3.8 percent (YoY).

• Sun Pharma’s wholly owned subsidiary to acquire 18.75 percent stake in Israel based Tarsius Pharma for $3 million. The company is an early-stage research and development company focusing on development of drug candidates in the field of ophthalmology.
• NMDC production and sales of iron ore from April to August stood at 9.85 million tons and 11.04 million tonnes, respectively. The company has fixed iron ore price with effect from Sept. 7 with lump ore priced at Rs 3,550 per tonne and fines at Rs 3,110 per tonne.
• Abu Dhabi Investment Authority, Singapore's sovereign wealth fund GIC and Public Sector Pension Investment Board of Canada are in race to pick 25 percent stake in Reliance Home Finance for Rs 1,500-2,000 crore. The funds will be used for expansion of the Anil Ambani group company, which is focusing on affordable housing for future growth. (PTI)
• ICICI Bank filed bankruptcy petition against the Jaiprakash Associates. The company says it has seven days to reply to the bank’s petition.
• Manali Petrochemicals will launch its products from its U.K. arm, Notedome Ltd, in India. The U.K. arm is a manufacturer of high performance polyurethanes and was acquired by Manali Petrochemicals’ subsidiary in Sept. 2016.
• BSE along PTC India Limited and ICICI Bank Limited have filed a petition with the power market regulator Central Electricity Regulatory Commission for grant of license for setting up a new power exchange. This proposed institutional exchange, subject to necessary regulatory approvals, would leverage on the experience and expertise of its stakeholders in their fields, funding of power projects and associated infrastructure, setting-up and running various exchanges and platforms in India, and offer the market participants a credible power trading platform.
• Container Corporation of India signed an agreement to form joint working group with Central Warehousing Corporation, to operate its container freight station facility at Pipavav port. This agreement will help in fulfilling multi-modal transport requirements and meet the growing needs of exports, imports and domestic business situated in and around Pipavav port.
• Yes Bank’s board and shareholders approved raising Rs 30,000 crores via debt from domestics as well as foreign buyers. The Capital Raising Committee will consider this issue of tier 2 bonds on or after Sept. 14.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.11 percent to 11,474 as of 7:34 a.m.

Asian stocks traded mixed Tuesday after their U.S. counterparts eked out modest gains amid lingering concerns on trade tensions. The dollar edged higher and the yen slid.

Equity indexes gyrated early in the Asian session, with Japanese and Australian shares rising while Hong Kong and Chinese stocks fluctuated.

Currencies

• The Japanese yen lost 0.3 percent to 111.41 per dollar.
• The offshore yuan fell 0.2 percent to 6.8827 per dollar.
• The Bloomberg Dollar Spot Index rose more than 0.1 percent.
• The euro was at $1.1579, down 0.1 percent.
• The British pound held onto an 0.8 percent gain to $1.3027.

Commodities

• West Texas Intermediate crude was little changed at $67.58 a barrel.
• Gold fell 0.2 percent to $1,194.05 an ounce.

Here are some key events coming up this week:

• Policy decisions from the Bank of England and the European Central Bank on Thursday.
• Russian President Vladimir Putin and Japanese Prime Minister Shinzo Abe will meet.
• Apple unveils its latest iPhones on Wednesday.
• Australia employment is due Thursday.
• China releases August industrial production, retail sales data on Friday.
• U.S. retail sales, industrial production, consumer sentiment on Friday.