Sensex, Nifty Snap Worst Losing Streak Of 2018

Indian equity benchmarks snapped their worst losing streak of 2018 led by HDFC twins, Kotak Mahindra Bank and Infosys.

The S&P BSE Sensex rose 1 percent or 347 points to 36,652 and the NSE Nifty 50 Index climbed 0.9 percent or 100 points to 11,067.

For most part of the day, the benchmarks were highly volatile as Nifty swung 20 times between gains and losses. However, the sentiment improved after the LIC Chairman VK Sharma said that LIC will ensure Infrastructure Leasing & Financial Services (IL&FS) doesn't collapse and did not rule out raising stake in the beleaguered company.

Eleven of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Healthcare Index's 1.75 percent gain. On the other hand, the S&P BSE Realty Index was top loser, down 1.7 percent.

Mid- and small-cap shares ended mixed as the S&P BSE MidCap Index rose 0.4 percent while the S&P BSE SmallCap Index fell 0.7 percent.

Nifty Bank Index rose as much as 1.3 percent or 321 points to 35,291 led by gains in Kotak Mahindra Bank, Axis Bank, State Bank of India and Bank of Baroda.

On the Relative Stock Index, Nifty Bank has slipped below 30, indicating it is highly oversold.

Shares of the Mumbai-based airline operator fell as much as 11.84 percent, the most in over a month, to Rs 188.40, its lowest level since January 2012 on heavy volumes.

Trading volume was more than double its 20-day average.

Life Insurance Corp. of India doesn’t rule out raising stake in the beleaguered Infrastructure Leasing & Financial Services Ltd., V.K. Sharma, chairman of the state-run insurer told reporters in New Delhi today.

As of March 31, LIC was the shadow lender’s biggest holder with 25.3 percent stake, followed by Japan’s Orix Corp. at 23.5 percent, according to a shareholding pattern on IL&FS’s website.

Shares of the Mumbai-based mortgage lender extended decline and slumped as much as 35 percent to Rs 256.05 on heavy volumes.

Trading volume was 10 times its 20-day average, data compiled by Bloomberg showed.

As many as 91 lakh shares changed hands on the BSE compared with an average of 29 lakh shares traded daily in the past two weeks.

• ICICI Lombard has 60 lakh shares (1.33 percent equity) change hands in three blocks. Stock down 1.6 percent at Rs 800.80
• NHPC has 10 lakh shares change hands in a block. Stock up 0.4 percent at Rs 23.35.

Buyers and sellers were not immediately known

Source: Bloomberg

• The Mumbai-based private sector lender erased gains and fell as much as 13 percent to Rs 197.25.

Indian equity benchmarks were highly volatile as gains in IT and healthcare stocks were offset by losses in telecom, realty and power stocks.

The Sensex rose 0.21 percent or 70 points to 36,377 and Nifty 50 Index fell 0.11 percent or 15 points to 10,952. In the intraday so far, the Nifty swung between gains and losses seven times.

Fourteen of 19 sector gauges compiled by BSE were trading lower led by S&P BSE Realty Index's 3.85 percent drop. On the other hand, the S&P BSE Healthcare Index was top gainer, up 1.2 percent.

The overall market breadth was negative as over 1,700 shares were declining while 800 were advancing on the BSE.

Shares of Indiabulls group companies plunged dragged by housing finance unit's 15.8 percent drop to Rs 826.

• Indiabulls Ventures slumped 5 percent to Rs 628.50
• Indiabulls Real Estate declined slumped 18 percent to Rs 96.40

Shares of sugar manufacturers rose as much as 15 percent after a report suggested that government may allow export of 50 lakh tonnes of sugar for 2018-19, ET Now reported citing sources.

• IL&FS has filed application with NCLT for scheme of arrangement under section 230 of the Companies Act, 2013.
• The scheme will cover IL&FS and 40 other group companies.
• The scheme will be subject to consent of board of directors, shareholders and creditors.

• Small Industrial Development Bank of India (SIDBI) is said to have filed for an insolvency petition against Investment Leasing and Financial Services (IL&FS).

Source: Bloomberg

Oyo Hotels is raising $1 billion to fund expansion into China and other global regions, Bloomberg reported.

Existing investors including SoftBank Vision Fund, Sequoia Capital and Lightspeed Venture Partners have put in $800 million, with commitments for another $200 million, the company said on Tuesday. About $600 million of the total will be plowed into China where Oyo began operations only 10 months ago. The funding values the startup at $5 billion, a person familiar with the matter who asked not to be identified because the matter is private told Bloomberg.

• Prestige Estates: The Bengaluru-based real estate developer fell as much as 20 percent, the most in nearly over 20 months, to Rs 173.80. Trading volume was 23 times its 20-day average.
• Time Technoplast: The polymer products maker fell as much as 3.8 percent to Rs 144.55. Trading volume was 8.5 times its 20-day average.
• Bharat Financial Inclusion: The Hyderabad-based consumer finance company rose as much as 3.5 percent to Rs 1,067. Trading volume was 10.2 times its 20-day average.
• NLC India: the Cuddalore-based mining company fell as much as 2 percent to Rs 67.65. Trading volume was 6 times its 20-day average.

Nestle India recovered from intraday low levels and rose as much as 0.9 percent to Rs 9,745 after it forayed it announced foray into dips segment with launch of Maggi Dip & Spread.

The low fat yogurt based dip and spread from Nestle has been conceptualized basis in-depth consumer research. Maggi Dip & Spread contains almost 80 percent yogurt with less than 3 percent fat making it a very healthy and tasty option for variety of food pairings, Nestle said in a press release.

• Gujarat Pipavav has 12.5 lakh shares change hands in a single block. Stock down 0.5 percent at Rs 101.65.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Hyderabad-based pharmaceutical products maker rose as much as 6.8 percent to Rs 284.60.

Suven Life Sciences secured two product patents one from Canada and one from Sri Lanka corresponding to the new chemical entity for the treatment of disorders associated with Neurodegenerative diseases and patents are valid through 2034 and 2026 respectively, the company said in a press release.

Nifty 10,900 strike price put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 34 percent to Rs 32.40. Over 7.12 lakh shares were added to the open interest which stood at 26.98 lakh shares.

Indian equity benchmarks reversed losses and rose led by gains in Infosys, HDFC twins, Axis Bank and Reliance Industries.

The S&P BSE Sensex rose 0.3 percent or 112 points to 36,418 and the NSE Nifty 50 Index advanced 0.3 or 37 points to 11,005.

Eleven of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Healthcare Index's 1.5 percent gain. On the flipside, the S&P BSE Telecom Index was top loser, down 1.6 percent.

The mid- and small-cap shares were mixed as the S&P BSE MidCap Index rose 0.3 percent while the S&P BSE SmallCap Index declined 0.4 percent.

Shares of the Delhi-based Royal Enfield bike maker fell for a fifth straight day to Rs 25,565.20.

In the last five sessions, the stock has declined 13.76 percent.

Shares of the country's second largest IT company rose as much as 1.6 percent to Rs 729.50 after it received an IT digitisation solution order worth CAD $80.3 million from Public Services and Procurement Canada to modernize and automate their procurement processes.

The company will be working with Ernst & Young and SAP Canada for this project, Infosys said in an exchange notification.

Shares of the Mumbai-based mortgage lender resumed decline after a day's breather and fell as much as 23 percent to Rs 302.40.

Shares of the oil marketing companies fell after Brent Crude rose above $80 per barrel. Higher crude oil price impacts margins of oil retailers say analysts.

Brent Crude rose 0.3 percent to $81.46, also its highest level in nearly four years.

• Hindustan Petroleum fell 2.56 percent
• Bharat Petroleum declined 2.42 percent
• Indian Oil slipped 1.55 percent

Shares of the Mumbai-based drugmaker were locked in a five percent upper circuit at Rs 80.90 after it received World Health Organisation's approval for Efavirenz.

Efavirenz is used to treat human immunodeficiency virus (HIV) infection.

Shares of the Bhopal-based construction company rose as much as 4.41 percent to Rs 750 after it emerged as lowest bidder for a new EPC project Navnera Barrage (Dam) valued at Rs. 601.02 crore by the Water Resource Department of Rajasthan, the company said in an exchange notification.

Shares of the Mumbai-based life insurer fell as much as 5.8 percent to Rs 552.75, also its lowest level since it started trading after it said that BNP Paribas Cardiff may cut stake in the company to comply with minimum shareholding norms.

The company also said that BNP Paribas Cardiff had confirmed that it was yet to make any firm decision regarding the size, timing or nature of such potential reduction in their shareholding of the company. The foreign institution held 22 percent stake in SBI Life Insurance as reported to the exchanges for the June quarter.

Shares of the Mumbai-based private sector lender rose as much as 3.09 percent to Rs 233.25 after its board re-appointed Rana Kapoor as the MD and the CEO.

The bank also gave the credit cost guidance for financial year 2019 at 50-70 basis points and said that it was committed to protect shareholder’s interests. The board meet of the company is scheduled today to decide the course of action post RBI curtailing term of Rana Kapoor.

Indian equity benchmarks edged lower paced by losses in non-banking financial companies.

The S&P BSE Sensex fell 0.17 percent or 59 points to 36,244 and the NSE Nifty 50 Index declined 0.22 percent or 24 points to 10,934.

Fifteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Telecom Index’s 1.2 percent decline. On the flipside, the S&P BSE Energy index was top gainer, up 0.5 percent.

The mid- and small-cap shares were also facing the selling pressure as the S&P BSE MidCap Index fell 0.5 percent and the S&P BSE SmallCap Index tumbled 0.7 percent.

• Indian rupee opened lower at 72.91 per dollar against yesterday's close of 72.63.

The RBI announced another open market operations (OMO) to buy back up to Rs 10,000 crore of bonds on Thursday after the liquidity deficit in the banking system rose to highest in two years, as per data compiled by Bloomberg.

The OMO is likely to help calm nerves given that advance tax outflows too would create a hole in the liquidity situation. Yield on the 10-year note should trade between 8.05-8.10 percent in the day. Also, market is expecting government borrowing numbers to be announced on Sept. 28.

In the rupee market, implied opening suggests the rupee may start trading at around 73 and dealers expect a range of 72.70-73.30 in the day. Today markets in Korea and Hong Kong are shut for trading.

Macquarie on Metals

• Expect zinc, lead and silver prices to be lower, while aluminium and alumina prices to be higher.
• Believe fundamentals are intact and see attractive value in select metal equities.
• Expect global demand to remain supportive at least through 2019; Weak rupee is an added tailwind.
• Hindustan Zinc: Downgraded to ‘Underperform’ on earnings headwinds and premium valuation.
• JSW Steel: Downgrade to ‘Neutral’ as it is trading at fair valuation.
• Top Buys: Hindalco, Coal India, Nalco and Graphite India.

Goldman Sachs on Eicher Motors

• Maintained ‘Buy’ with a price target of Rs 37,358, implying a potential upside of 44 percent from the last regular trade.
• The company will launch two new motorcycles in foreign and domestic market.
• New launches a key catalyst for the stock.
• New launches a huge leap in terms of engineering, quality and design.
• Watch out for: Launch price, initial feedback and export volume expectations.

CLSA on ITC

• Maintained ‘Buy’ with a price target of Rs 390, implying potential upside of 31 percent from the last regular trade.
• Proposal for an additional ‘disaster cess’ to help Kerala post the floods.
• Proposal is likely to come up for discussion at the GST Council meet on Sept. 28.
• Effective tax hike of 5-6 percent is manageable for ITC to meet earnings estimate.

BofA ML on Cummins India

• Maintained ‘Buy’ with a price target of Rs 864, implying a potential upside of 25 percent from the last regular trade.
• Demand revival, cost optimisation to drive margin expansion.
• Domestic gensets likely to revive; Exports have likely bottomed.
• Industrials to remain a key growth driver.

CLSA on Real Estate

• Property stocks down on higher interest rates, accounting changes and liquidity issues of lenders.
• Weak performance comes even as sales have started to pick-up.
• Visible value stocks should be easy buys.
• Stay positive on the sector with Godrej Properties our top pick.
• See Oberoi Realty and Prestige Estates as high value stocks.

Kotak on Consumer Sector

• Sector still expensive; search for value still a futile exercise.
• Earnings prognosis a mixed bag with volume prognosis improving a tad.
• Risks to margin improvement thesis rising as well.
• Remain cautious overall; ITC, Britannia, Nestle, Jubilant Foodworks and Colgate are preferred picks.

• Nifty September futures ended at 10,998, with a premium of 31 points versus 23 points.
• September series: Nifty open interest down 11.8 percent; Bank Nifty open interest down 8 percent.
• Nifty rollovers at 18 percent; Nifty Bank Rollovers at 16 percent.
• India VIX ended at 17.4, up 12.2 percent.
• Max open interest for September series call at 11,500 strike price call option (open interest at 30.6 lakh shares, 9 percent)
• Max OI for September series put at 11,000 strike price put option (open interest at 34 lakh shares, down 11.4 percent)

Bulk Deals

• Care Ratings: The Pabrai Investment Fund II LP acquired 5.12 lakh shares or 1.74 percent at Rs 1,224.93 apiece.

Insider Trades

• PPAP Automotive promoter group acquired 1,600 shares on Sept.12.
• Man Infraconstruction promoter Parag Shah acquired 2 lakh shares on Sept. 21.
• PSP Projects promoter and director Prahaladhbhai Patel acquired 11,000 shares from Sept. 19-21.

(As reported on Sept. 24)

Trading Tweaks

• Central Bank of India's circuit filter revised to 10 percent.
• HDIL's circuit filter revised to 5 percent.
• Granules and HCC to be excluded from F&O with effect from December contracts.
• Kirloskar Pneumatic last trading day before stock split to Rs 2 from Rs 10 each.

Who’s Meeting Whom

• Greaves Cotton to meet LIC Mutual Fund, Enam Holdings and other investors from Sept. 25-27.
• Bharat Forge to meet SBI MF, Mitsubishi UFJ and Morgan Stanley Investment Management from Sept. 25-28.
• PI Industries to meet Cholamandala Securities, Emkay Global and other investors from Sept. 25-28.

• Yes Bank re-appointed Rana Kapoor as the MD and the CEO. The bank also gave the credit cost guidance for financial year 2019 at 50-70 basis points and said that it was committed to protect shareholder’s interests. The board meet of the company is scheduled today to decide the course of action post RBI curtailing term of Rana Kapoor.
• SBI Life Insurance said that BNP Paribas Cardiff may cut stake in the company to comply with minimum shareholding norms. The company also said that BNP Paribas Cardiff had confirmed that it was yet to make any firm decision regarding the size, timing or nature of such potential reduction in their shareholding of the company. The foreign institution held 22 percent stake in SBI Life Insurance as reported to the exchanges for the June quarter.
• Infosys received IT digitisation solution order worth CAD $80.3 million from Public Services and Procurement Canada to modernize and automate their procurement processes. The company will be working with Ernst & Young and SAP Canada for this project.
• Mangalam Drugs and Organics received approval from World Health Organization for its drug Efavirenz.
• Dilip Buildcon declared L1 bidder for an EPC project worth Rs 601.02 crore by Water Resource Department (Kota), Rajasthan.
• IndusInd Bank said IL&FS Securities & Services transaction was progressing and that the deal completion is on track. All regulatory approvals barring one are in place for this transaction. On June 26 the bank had announced the signing of definitive agreements with IL&FS and other minority shareholders to acquire 100 percent stake in ISSL.
• Zensar Technologies was chosen by U.K. based investment company Ruffer LLP to manage its end to end infrastructure requirements. The company also announced the launch of its insurance model which will help in digitisation across the insurance vertical.
• Adlabs Entertainment signed a memorandum of undertaking with Riverbay Group to operate a new entertainment park in Andhra Pradesh’s Amaravathi. The company said that the new park will expand Imagica’s brand presence in South India.
• Dena Bank’s board approved the proposed merger with Bank of Baroda and Vijaya Bank.
• Canara Bank filed insolvency application against GTL Infrastructure.
• Himachal Futuristic Communications received purchase orders for Rs 558.36 crores from BSNL for PAN Indian defence communication network.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,997 as of 7:52 a.m.

Asian stocks traded mixed Tuesday as investors pondered concerns about the outlook for global trade and American politics. The dollar held recent gains as 10-year Treasury yields consolidated above 3 percent, and oil traded at a four-year high.

Equities climbed in Japan as traders returned from a holiday, though Chinese shares headed in the opposite direction after a long weekend.

Currencies

• The yen fell 0.1 percent to 112.90 per dollar.
• The offshore yuan held at 6.8612 per dollar.
• Bloomberg Dollar Spot Index was flat after rising 0.2 percent in each of the past two sessions.
• The euro was little changed at $1.1752.
• The British pound traded at $1.3118.

Commodities

• West Texas Intermediate crude was little changed at $72.13 a barrel after jumping 2.2 percent Monday.

• Gold was flat at $1,198.88 an ounce.
• LME copper slid 2 percent to $6,227 a metric ton.

Here are some key events coming up this week:

• Japanese Prime Minister Shinzo Abe meets with President Donald Trump in New York to discuss trade.
• The Fed decision on Wednesday will be followed by a press conference with Chairman Jerome Powell.
• Thursday sees durable goods, GDP data and jobless claims for the U.S.