Sensex Sheds Over 500 Points After Goldman Downgrade, Trade Woes Resurface

• REC: The Delhi-based state-run financial assistance provider to state and central power utilities rose as much as 5.1 percent to Rs 116.25 after its net profit rose 36.5 percent to Rs 1,468.7 crore from Rs 1,076 crore.
• KEC International: The Mumbai-based power transmission company rose as much as 4.25 percent to Rs 306.50 after Macquarie maintained outperform on KEC International for target price of Rs 443. The brokerage in a report said it will be a beneficiary of 100 percent electrification of railways by FY22.
• DLF: The Delhi-based real estate developer rose as much as 2.4 percent to Rs 214.20 after a report suggested that the company is working towards making housing business debt free by March 2019.
• Avadh Sugar: The Kolkata-based sugar maker was locked in a 20 percent upper circuit at Rs 565.40 as sugar stocks extended rally to a third day.

Shares of the Mangalore-based oil refining company rose as much as 7.22 percent, the most since July 17, to Rs 79.40 on the back of heavy volumes.

Trading volume was more than triple its 20-day average for this of the day, data compiled by Bloomberg showed.

Indian equity benchmarks plunged weighed down by weakness in financial heavyweights such as HDFC twins, Axis Bank and State Bank of India.

The Sensex fell 1 percent or 380 points to 37,709 and the Nifty 50 Index tumbled 0.9 percent or 103 points to 11,412.

Seven of 11 sector gauges compiled by National Stock Exchange fell dragged by Nifty Financial Services Index's 1.5 percent drop. On the flipside, the Nifty Realty Index was top gainer, up 0.7 percent.

• Shree Renuka Sugars: The Mumbai-based sugar maker rose as much as 18.6 percent, the most in over three months, to Rs 17.55. Trading volume was 33.4 times its 20-day average.
• EID Parry: The Chennai-based agricultural chemicals maker rose as much as 8 percent to Rs 235.35. Trading volume was 30.3 times its 20-day average.
• DCM Shriram: The Delhi-based packaged food company rose as much as 5.85 percent to Rs 413.50. Trading volume was 13.3 times its 20-day average.
• Kiocl: The Bengaluru-based iron ore mining services provider rose as much as 14.22 percent to Rs 258.70. Trading volume was 10 times its 20-day average.

UR Bhat, managing director at Dalton Capital Advisors expects rupee to stabilise near current levels against dollar,

Key highlights of the interview with BloombergQuint:

• Do not see any fundamental reason for rupee to weaken further.
• Expect rupee to stabilise near current levels against the dollar.
• Expect $1 billion inflow by domestic participants every month.
• India impacted more by global factors, short term volatility to persist.

Shares of the Apple retailer in India swung between gains and losses after its board approved shares buyback proposal.

Redington India will buy back 1.11 crore shares or 12.78 percent equity at Rs 125 per share for an aggregate amount of Rs 139 crore, the company said in an exchange notification.

Shares of sugar manufacturers extended their rally to third day and rose as much as 20 percent after the government hiked the procurement price for ethanol by nearly 25 percent.

Indian equity benchmarks extended decline dragged by Reliance Industries, HDFC twins, ITC and State Bank of India.

The Sensex fell 1.2 percent or 452 points to 37,639 and the Nifty 50 Index dropped 1.12 percent or 129 points to 11,386.

Seventeen of 19 sector gauges compiled by BSE fell, dragged by S&P BSE Finance Index's 1.5 percent decline.

The overall market breadth was negative as 1,284 shares were declining while 875 were advancing on BSE.

Nifty Bank's 27,000 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 69 percent to Rs 82.70. Over 6.21 lakh shares were added to the open interest which stood at over 10.84 lakh shares.

Click here to see the complete options chain

Shares of banking and finance companies were among the worst performers in trade so far with Nifty Bank, Nifty Financial Services, Nifty PSU Bank and Nifty Private Bank Indexes falling over 1 percent.

Nifty Bank Index fell as much as 1.34 percent to 26,801, below 100-day moving average placed at 26,835, dragged by weakness in Bank of Baroda, State Bank of India, Punjab National Bank and HDFC Bank.

Shares of the Pune-based optical fibre c able maker rose as much as 3 percent to Rs 346.65 after board approved capacity expansion plan of Rs 320 crore which will be financed through a mix of internal accruals and debt, the company said in an exchange filing.

Sterlite Technologies will be adding 15 million fibre kms to its optical fibre cabling capacity, doubling it to 33 million fibre kms by June 2020, the exchange filing added.

• Fortis Healthcare has 15.8 lakh shares change hands in a single block on the BSE. Stock up 0.07 percent at Rs 144.95.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Rural Electrification Corporation fell as much as 3.62 percent to Rs 114.60 after it reported June quarter earnings.

Key earnings highlights:

• Net interest income down 10.5 percent at Rs 2,041 crore.
• Net profit up 36.5 percent at Rs 1,468.7 crore.
• NIM at 3.72 percent versus 4.63 percent.
• Gross NPA at 8.12 percent.
• Net NPA at 4.27 percent.

Shares of the Bengaluru-based IT company rose as much as 1.76 percent to Rs 336 after its arm signed an agreement with Mercury Network to jointly offer loan appraisal management platform.

As a part of the agreement Mercury Network’s appraisal order management system will be integrated with company’s NetOxygen Loan Origination System platform.

Indian equity benchmarks fell sharply mirroring losses in other Asian markets as trade worries resurfaced after U.S. moved to place a further tranche of tariffs on Chinese goods.

The S&P BSE Sensex fell 0.8 percent or 306 points to 37,784 and the NSE Nifty 50 Index slumped 0.85 percent or 97 points to 11,417.

Sixteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Bankex Index's 1.14 percent fall. On the flipside, the S&P BSE IT Index was top gainer up 0.4 percent.

The mid- and small-cap shares also witnessed selling pressure as the S&P BSE MidCap Index fell 0.7 percent and the S&P BSE SmallCap Index declined 0.4 percent.

CLSA on Indian Pharma

• Improving fundamentals and forex drive outperformance.
• Still see certain levers for the rally to sustain.
• Positives: low correlation to electoral outcomes, underweight position in FII portfolios and potential earnings upgrade in near term.
• Like Sun Pharma for its specialty focus in the U.S. and good execution in key specialty products.
• Cipla is well-placed to grow its U.S. business and has strong domestic portfolio.
• Downgrade Cadila Healthcare to Outperform from Buy on valuations.

CLSA on PVR

• Maintained ‘Buy’; raise price target to Rs 1,690 from Rs 1,450, implying a potential upside of 22.5 percent from the last regular trade.
• Deal with ticketing aggregators reassures multiplexes’ bargaining power.
• Acquisition of SPI Cinemas fortifies southern India presence.
• Raise valuation multiple as uncertainty around F&B prices is now waning.

Citi on Jindal Steel & Power

• Maintained ‘Buy’; cut price target to Rs 400 from Rs 401, implying a potential upside of 71 percent from the last regular trade.
• Previous financial year’s annual report shows growth in cash flow; Debt pay-down started.
• Favorable steel market dynamics to help capacity ramp-up.
• Valuations are still very attractive.

Citi on India Paints

• Remain positive on revenue growth prospects of Indian paints industry
• Negatives: weak rupee and price hardening of raw materials
• Think paint companies would take price hikes in October or November.
• Could see downside risks to earnings if cost push sustains or price hikes are delayed.

Deutsche Bank on REC

• Maintained ‘Buy’ with a price target of Rs 155.
• Book value impact negative but coverage ratios improve.
• Loan growth steady at 16 percent; share of renewables picking up.
• Expect sharply lower credit costs in 2018-19 as coverage ratios now comfortable.

Macquarie on KEC International

• Maintained ‘Outperform’ with a price target of Rs 443.
• Beneficiary of 100 percent railway electrification by March 2022.
• KEC’s market share in railway electrification stands at above 40 percent.
• Estimate 7 percent upside risk to order inflow estimate over FY19-21.

• Nifty September futures closed trading at 11,547, with a premium of 32 points.
• Nifty September open interest down 1.9 percent; Nifty Bank September open interest down 17 percent.
• Max open interest for September series call at 11,800 strike price call option, open interest at 40.8 lakh shares.
• Max open interest for September series put at 11,500 strike price put option, open interest at 38.5 lakh shares.

Bulk Deals

• IRB Invit Fund: Promoter Virendra D Mhaiskar acquired 75 lakh shares at Rs 75.6 each.
• Fortis Healthcare: Goldman Sachs Singapore Pte acquired 26 lakh shares or 0.50 percent equity at Rs 144.73 each.
• J Kumar Infraprojects: Well Management Co LLP A/C The WTC Nam Coll Invst FDS TR Opportunistic EQ Portfolio acquired 4.9 lakh shares or 0.64 percent at Rs 242 each.

Balrampur Chini Mills

• Norges Bank A/C Norges Bank on account of the government sold 19.2 lakh shares or 0.82 percent equity at Rs 84.44 each.
• Aequitas Investment Consultancy Pvt Ltd sold 11.7 lakh shares or 0.50 percent equity at Rs 90.24 each.

Insider Trades

• Apollo Tyres promoter group PTL Enterprises acquired 2.25 lakh shares on Sept. 12.
• UPL promoter Nerka Chemicals Pvt acquired 1 lakh shares on Sept. 11.
• Nava Bharat Ventures promoter group acquired 8k shares on Sept. 12.

(As reported on Sept. 14)

The Indian rupee is poised to open weaker on speculation government measures announced Friday to boost Asia’s worst-performing currency may be inadequate.

The sovereign bonds may find some support from the RBI's announcement of a planned open-market bond purchase and Finance Minister Arun Jaitley’s commitment to fiscal prudence. The OMO purchase of Rs 10,000 crore is scheduled for the Sept. 19

India on Friday unveiled a number of steps to support the flagging rupee including relaxing overseas borrowing restrictions on manufacturers and easing the cap that limits foreign ownership of individual company bonds.

The finance ministry's response is appropriate but given the build-up of expectations and the role of global push factors in driving capital inflows, the measures will likely underwhelm expectations, Nomura said.

• KEI Industries to meet ICICI Securities on Sept. 18.
• Shriram City Union Finance to meet Laburnum Capital Advisors and SAIF Partners on Sept. 17-19.
• Crompton Greaves Consumer Electricals to meet Kotak Mahindra AMC, GIC Private and other investors from Sept. 17-19.
• Shriram Transport Finance to meet Evenstar Capital, Fred Alger Management and other investors from Sept. 18-19.
• Tata Motors to meet Reliance MF, AIA Hongkong and other investors from Sept. 17-20.
• Voltas to meet AXA Investment Managers U.K. on Sept. 17.
• Chola Mandalam Investment and Finance to meet Emkay Global Financial Services on Sept. 17.
• Indraprastha Gas to meet HSBC Securities and Capital Markets (India) Pvt Ltd on Sept. 19.

Rural Electrification Corp. (Q1, YoY)

• Net interest income down 10.5 percent at Rs 2,041 crore.
• Net profit up 36.5 percent at Rs 1,468.7 crore.
• NIM at 3.72 percent versus 4.63 percent.
• Gross NPA at 8.12 percent.
• Net NPA at 4.27 percent.

• MEP Infrastructure Developers: Toll tax department asked the company to extend suspension of collection of toll tax from any specified commercial vehicle till Sept. 30 (from Sept. 13) pending completion of installation of RFID work. Any settlement of claims will be dealt as per the Contract Agreement executed with the authority.
• Kwality Ltd. QIP issue opened on Sept. 17. The company plans to raise upto Rs 80 crores via QIP.
• Sterlite Technologies will be making an addition of 15 million fibre km to its optical fibre cabling capacity, doubling it to 33 million fibre km. The enhanced capacity is expected to come on-line by June 2020 in a phased manner. Board approved the expansion plan and capital expenditure of Rs 320 crores which will be financed through a mix of internal accruals and debt.
• Infosys to acquire 100 percent stake in cloud consulting and training services company Fluido for Euro 65 million. The company said that this acquisition will strengthen its presence in the Nordic region.
• Cipla’s Uganda arm raised 16,646.8 crore shillings (UGX) from its IPO listing in the East African country. The market capitalisation will be around UGX 937 billion ($250 million), according to Bloomberg report.
• Wipro’s arm signed an agreement with Mercury Network to jointly offer loan appraisal management platform. As a part of the agreement Mercury Network’s appraisal order management system will be integrated with company’s NetOxygen Loan Origination System platform.
• Future Supply Chain Solutions signed an agreement with Voltbek (a JV of Voltas and Turkey based appliance company Arcelik). The company is appointed as the logistics partner for the brand “Voltas Beko”.
• Videocon Industries clarified that the income tax department has not given any notice to the company regarding news reports of sale of an ICICI Bank building in Mumbai.
• Rashtriya Chemicals and Fertilizers clarified that it has put up a proposal to Department of Fertilizers (Government of India) for post-defacto cabinet approval for transfer of Mumbai’s eastern express highway land parcel and also for sale of transfer of development rights certificates already received and likely to be received in future.
• Kirloskar Pneumatic fixed Sept. 27 as its share-split record date.
• Corporation Bank revised its overnight MCLR to 8.1 percent and the one-year rate to 8.95 percent. The changes will be effective from Sept. 15.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.37 percent to 11,501 as of 7:32 a.m.

Stocks in Asia kicked off the week under pressure after the latest U.S. move to place a further tranche of tariffs on Chinese goods. Shares in South Korea and Australia edged lower, while futures on equity indexes in Hong Kong and China signaled declines.

Currencies

• The yen was steady at 112.03 per dollar.
• China’s offshore yuan was little changed at 6.8787 per dollar.
• The Bloomberg Dollar Spot Index increased 0.3 percent Friday.
• The euro bought $1.1627.

Commodities

• West Texas Intermediate crude fell 0.3 percent to $68.82 a barrel.
• Gold dropped 0.1 percent to $1,193.59 an ounce.

Here are some key events coming up this week:

• Indonesia trade data comes Monday.
• The Bank of Japan holds its policy meeting.
• South Korean President Moon Jae-in visits Pyongyang for a summit with Kim Jong Un Tuesday.