Sensex, Nifty Break Three-Day Winning Streak As Private Banks Drag

Indian equity benchmarks halted their three-day gaining streak, their longest in over three weeks.

The benchmark indices were weighed by the private banks—HDFC Bank Ltd., Kotak Mahindra Bank Ltd. and ICICI Bank Ltd.

The S&P BSE Sensex closed 194 points or 0.48 percent lower at 39,756.81. The NSE Nifty 50 closed 0.5 percent lower but managed to end above 11,900. The broader market index represented by the NSE Nifty 500 Index ended 0.56 percent lower.

“The Indian markets are highly overvalued compared to their historical trends and emerging market peers,” Jagannadham Thunuguntla, senior vice president and head of research (Wealth) at Centrum Broking said.

“The markets will find it difficult to have a sustained rally until the valuations are settled down,” Thunuguntla told BloombergQuint in an interaction, adding that the upside for Nifty, if any, is limited.

The market breadth was tilted in favour of sellers. About 1047 stocks declined and 695 shares advanced on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE declined, led by the NSE Nifty Realty Index’s 2 percent decline. On the flipside, the NSE Nifty Metal Index was the top sectoral gainer, up 0.39 percent.

BASF India

• Stock rose as much as 6.3 percent to Rs 1,472.95.
• Trading volume was more than six times its 20-day average.

Bharat Dynamics

• Stock rose as much as 8.8 percent to Rs 317.80.
• Trading volume as triple its 20-day average.

Indiabulls Housing Finance

• Stock fell as much as 9.8 percent to Rs 608.75.
• Trading volume was more than triple its 20-day average.

Jammu & Kashmir Bank

• Stock fell as much as 12.9 percent to Rs 42.30.
• Trading volume was more than double its 20-day average.

The mid-cap index represented by the NSE Nifty MidCap 100 fell 0.82 percent, led by the declines in Indiabulls Ventures Ltd. and Reliance Capital Ltd.

Sintex Industries defaulted in payment of interest, repayment of principal amount on non-convertible debenture, according to its statement on the exchanges.

The company has defaulted on the seven-year 10.7 percent bond maturing in 2021to the tune of Rs 89 crore, the statement added.

DHFL

• Stock rose as much as 6.4 percent to Rs 91.60.
• The company paid Rs 962 crore in interest payments that were overdue on non-convertible debentures, it said in a statement.

Adani Green Energy

• Stock rose as much as 2.7 percent.
• Promoter groups plan to sell cumulatively 6 percent stake in the company at a floor price of Rs 43 per share. This is the second share offering to public in three weeks.

Sobha

• Stock rose as much as 2.3 percent to Rs 583.90, the highest in over 16 months.
• The Relative Strength Index was above 70, indicating that the stock may be overbought.

Just Dial

• Stock rose as much as 3.6 percent to Rs 768.40.
• The stock is witnessing fresh longs with higher open interest of 16 percent.

Indian equity benchmarks are set to halt three-day gaining streak, their longest in over two weeks.

The S&P BSE Sensex fell over 220 points to 39,729as of 3 p.m. and the NSE Nifty 50 traded below 11,897, down 0.56 percent. The mid-cap index represented by the NSE Nifty MidCap 100 Index underperformed benchmark indices after it fell 0.8 percent.

India’s benchmark bond yield fell below the 7 percent mark after declining nearly 5 basis points intraday.

The global slowdown witnessed in the banking, financial services and insurance space is likely to impact the growth trajectory of India’s information technology sector, according to Morgan Stanley’s India Technology, Media and Telecom Analyst Parag Gupta.

“The volatility issues in the capital markets and banking space in the U.S., along with the caution coming in from the BFSI segment in India, could soften spending in the IT sector,” Gupta told BloombergQuint.

Read the complete story here or watch the full interaction here:

The Supreme Court today said that the plea against Indiabulls Housing Finance will not to be heard before July. The plea sought action against Indiabulls Housing for allegedly misappropriating public money.

Brent crude fell 2.3 percent intraday to $60.85 per barrel. The Asian crude benchmark declined 5.5 percent so far this month and slumped 11.4 percent in May.

Indian equity benchmarks were off day’s low.

The S&P BSE Sensex traded 240 points lower at 39,710 as of 2 p.m. after falling over 300 points intraday. The NSE Nifty 50 hovered around 11,900. The broader market index represented by the NSE Nifty 500 Index fell 0.6 percent.

The market breadth was tilted in favour of sellers. About 1,070 stocks declined and 647 shares advanced on National Stock Exchange.

European stocks fell on Wednesday as traders assessed recent gains that sent shares to a three-week high.

Source: Bloomberg

Here are the top picks from the mid-cap space by Geojit Financial Services’ Gaurang Shah:

• IT: NIIT Technologies, L&T Technologies, Mindtree
• Private banks: Kotak Mahindra Bank, IndusInd Bank, Bandhan Bank
• Pharma: Torrent Pharma, Alembic Pharma, Alkem Labs
• FMCG: Godrej Consumer Products, Dabur, Marico, Emami and Godrej Agrovet

The broader market index represented by the NSE Nifty 500 Index fell 0.6 percent, led by the declines in Indiabulls Integrated Services Ltd. and Jammu & Kashmir Bank.

The Indian rupee extended gains to trade at day’s high against the U.S. dollar. The home currency appreciated as much as 0.17 percent to 69.33 against the greenback.

Indian equity benchmarks continued to trade near day’s low, led by the declines in the private banks.

The S&P BSE Sensex traded 216 points lower at 39,735 as of 1 p.m. and the NSE Nifty 50 hovered around 11,900.

Pharma shares was under focus as the NSE Nifty Pharma Index fell over 1 percent, led by the declines in Biocon Ltd. and Aurobindo Pharma Ltd.

In the currency market, the Indian rupee traded at day’s high against the U.S. dollar.

Shares of BASF India extended gains for the fourth consecutive trading session, their longest gaining streak in over two weeks. The stock rose as much as 6.3 percent to Rs 1,472.95.

Trading volume was more than nine times its 20-day average, Bloomberg data showed. The stock traded at stock traded at 31 times its estimated earnings per share for the coming year.

Liquidity constraints faced by non-bank lenders and the new axle-loading norms have affected VE Commercial Vehicles Ltd.’s sales growth, according to its Managing Director and Chief Executive Officer Vinod Aggarwal.

“The drop in the heavy-duty trucks (sales) has been around 25 percent in the last two months,” said Aggarwal. “The high-risk profile customers, who tend to be 15-20 percent of our customers, are finding it hard to get finance from non-banking finance companies.”

Watch the full conversation here:

The NSE Nifty SmallCap Index fell 0.15 percent, led by the fall in Jain Irrigation Systems Ltd. and Suzlon Energy Ltd.

Stocks in Asia declined as U.S. and European futures slid amid signs of fatigue in the recent revival in risk appetite.

• Japan’s Topix index slid 0.5 percent.
• South Korea’s Kospi index fell 0.3 percent.
• Hang Seng Index dropped 1.8 percent.
• The Shanghai Composite Index slipped 0.5 percent.
• Australia’s S&P/ASX 200 Index was flat.
• Futures on the S&P 500 Index fell 0.2 percent.
• Euro Stoxx 50 futures slid 0.6 percent.

Source: Bloomberg
Catch all the global markets update here:

Indian equity benchmarks continued to trade near day’s low.

The S&P BSE Sensex traded 245 points lower at 39,704 as of noon and the NSE Nifty 50 traded below 11,900.

Among the 11 sectoral gauges compiled by NSE, the NSE Nifty Realty Index was the to sectoral loser, while the NSE Nifty Metal Index was the only sectoral gainer.

Indiabulls Housing Finance, Jammu & Kashmir Bank and Sadbhav Infratructure Project were among the stock in focus as they traded over 6 percent lower.

Meanwhile, shares of DHFL extended gains after the company said that it has cleared all its overdue payments on NCDs at Rs 961.9 crore due on June 6.

Mahindra & Mahindra plans to name Haigreve Khaitan and Shikha Sharma as the independent directors of the company, subject to shareholders approval, according to its stock exchange filing.

Shares of the tractor maker traded 0.6 percent lower at Rs 632 after the announcement.

Morgan Stanley’s Jonathan Garner expects the Indian local legal tender to appreciate to 65-levels against the U.S. dollar.

“India can well get quite lucky when the China-U.S. trade war tensions are putting question marks over capital flows between the U.S. and China. India can stand in the middle of these two competitors and use this situation to its own advantage,” Garner told BloombergQuint in an interaction. “The currency has been appreciating against some of the North Asian units which are caught up in these trade tensions.”

Read the full transcript of the interview here or watch the conversation here:

Ten out of 11 sectoral gauges compiled by National Stock Exchange fell, led by the NSE Nifty Realty Index’s 1.3 percent decline. On the flipside, the NSE Nifty Metal Index was the only sectoral gainer, up 0.86 percent.

Indian equity benchmarks continued to trade lower, taking cues from most of their Asian peers.

The S&P BSE Sensex fell 290 points to 39,657 as of 11:10 a.m. and the NSE Nifty 50 traded below 11,900. The mid- and small-cap indices represented by the NSE Nifty MidCap 100 Index and the NSE Nifty SmallCap 100 Index fell 0.45 percent and 0.16 percent respectively.

Indiabulls housing finance was the worst performer on Nifty aft the stock extended declines for the second consecutive trading session. The stock fell 13.9 percent so far this week.

Shares of Yes Bank fell as much as 3.9 percent to Rs 134.05. The stock was the worst performer on Sensex and second worst performer on Nifty.

On Tuesday, Mukesh Sabharwal resigned from post of non-executive director with effect from June 10. On Monday, the bank had disclosed that Ajai Kumar, who was a non-executive, non-independent director on the board, stepped down.

The resignation of two directors comes after a reshuffle of the bank’s top management with founder chief executive Rana Kapoor stepping down after being denied an extension by the Reserve Bank of India. Kapoor, who continues to hold 10 percent in the bank, was replaced by Ravneet Gill as CEO in March.

Shares of Indiabulls Housing Finance extended decline for the second consecutive trading session and fell as much as 7 percent to Rs 627.10, the lowest in nearly four months.

On Monday, Indiabulls Housing refuted the allegation of siphoning Rs 98,000-crore, terming it as “bizarre” and made by a “racket of blackmailers”, in an exchange filing. The original complaint (of Rs 55,000-crore alleged fraud) by the blackmailers was dated May 6, 2019, the statement said. After that the company filed a first information report on June 4.

The stock was the worst performer on Nifty. Trading volume was 3.6 times its 30-day average, Bloomberg data showed. The scrip traded at 5.5 times its estimated forward earnings per share compared to a 10.1 times for the two-year historical average.

The NBFC liquidity crisis during the last six months have hurt the consumption and that was reflected in the fourth quarter results, Marcellus Investment Managers' Co-Founder Pramod Gubbi said.

"It is time to recognise the bad assets and get the rest of the economy moving ahead. A delay could lead to more issues because performing assets can turn nonperforming due to the liquidity issues," Gubbi told BloombergQuint in an interaction.

From an investment perspective, Gubbi said that it is 'too much of a gamble' to look at the NBFC stocks at this stage.

Watch the full conversation here:

India Cements expects its volume to grow after it was impacted due to the elections, its Vice Chairman and Managing Director N Srinivasan told BloombergQuint in an interaction.

Here are the key highlights from the conversation:

• Cement prices have risen in the last three-to-four months
• Expect cement prices to remain firm in the near period
• Cement prices not yet around the peak seen in the last three-to-four years.
• See no cartelisation; prices have firmed up due to higher demand.
• Fuel prices have softened but will be passed only after two-to-three months.

Watch the full conversation here:

Nifty’s 12,00 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the weekly contract, which is set to expire tomorrow fell 66.54 percent to Rs 8.70. Over 13.59 lakh shares were added to the open interest which stood at over 33.19 lakh shares.

Indian equity benchmarks extended declines from the opening trade.

The S&P BSE Sensex fell over 200 points and the NSE Nifty 50 traded near 11,900.

The declines in the benchmarks indices were led by the losses in HDFC Ltd., ICICI Bank Ltd. and Tata Consultancy Services Ltd.

Reliance Capital and Reliance Home Finance were in focus during today’s trade as the stocks fell after Price Waterhouse & Co Chartered Accountants LLP resigned as one of the statutory auditors.

Besides, DHFL extended gains after the company said that it has paid out Rs 962 crore in overdue interest payments on its non-convertible debentures.

Shares of Central Bank Of India extended declines for the sixth consecutive trading session, its longest losing streak in over a month. The stock fell as much as 1.7 percent to hit a record low a Rs 23.60.

The Relative Strength Index was at 23, indicating that the stock may be oversold, Bloomberg data showed.

Shares of Reliance Capital fell as much as 6.7 percent to Rs 87.40, while shares of Reliance Home Finance fell as much as 9.8 percent to Rs 16.05.

This after Price Waterhouse & Co Chartered Accountants LLP resigned as one of the statutory auditors of the two firms citing certain "observations or transactions" in its assessment which if not resolved satisfactorily might be significant or material to their financial results. (Read the full story here)

Shares of the non-banking lender gained for the third-straight session and rose 6.5 percent to Rs 96.

Dewan Housing Finance, in an exchange filing, said that it has cleared all its overdue payments on NCDs at Rs 961.9 crore due on June 6. The company said in a media statement that it confirms full payment and will seek rating upgrades from agencies, coupled with more asset monetisation by on boarding a strategic partner.

Aadhar Housing said that Blackstone has acquired a 97.7 percent stake in company for including the entire stake held by the existing controlling shareholders, Wadhawan Global Capital Ltd. and DHFL.

The trading volume was nearly three times the 20-day average for this time of the day, Bloomberg data showed.

Shares of the renewable energy producer snapped its four-day losing streak and rose as much as 2.4 percent to Rs 43.55 each.

Promoter group under name of Gautam S Adani plans to sell cumulatively 5.98 percent stake in the company at a floor price of Rs 43 per share, according to an exchange notification. This is the second share offering to public in three weeks. The overall stake of promoters will fall from 86.5 percent to 74.93 percent, to comply with SEBI norms on minimum shareholding.

The stock has advanced 35 percent in the past 12 months compared to a 13 percent gain in the Sensex Index.

Indian equity benchmarks opened lower after gaining for three consecutive trading sessions.

The S&P BSE Sensex fell as much as 0.41 percent to 39,785.36 and the NSE Nifty 50 fell as much as 0.39 percent to 11,918.75. The broader market index represented by the NSE Nifty 500 Index fell as much as 0.38 percent to 9,767.60.

The market breadth was tilted in favour f sellers. About 833 stocks fell and 572 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE fell, led by the NSE Nifty Realty Index’s 0.6 percent gain. On the flipside, the NSE Nifty Metal Index was the only sectoral gainer, up 0.35 percent.

Indian equity benchmarks are set for a mixed start. The S&P BSE Sensex reclaimed 40,000 market in the pre-market open while the NSE Nifty 50 was above 11,960.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.11 percent to 69.44 against the greenback.

UBS on Tech Mahindra

• Maintained ‘Neutral’ with a price target of Rs 830
• Meaningful revenue acceleration unlikely in 2019-20
• Attrition, supply tightness are key challenges to sustaining margin in 2019-20
• Risk-reward looks balanced post recent share price correction

Citi on SRF

• Maintained ‘Buy’ with a price target of Rs 3,370.
• Specialty chemical business remains on track to grow 40-50 percent in 2019-20.
• Flurochemicals business guided to grow 20-25 percent in 2019-20.

Morgan Stanley on Shriram Transport Finance

• Maintained ‘Overweight’ with a price target of Rs 1350
• Mgmt. expects H1FY20 to see muted growth and expects FY20 growth of 14-16%
• Could be some further margin compression of 10-20 bp in the near term
• Mgmt. was confident on asset quality as vehicle utilisation levels are good

Edelweiss on AU Small Finance

• Initiated ‘Buy’ with a price target of Rs 880
• Lucrative 30 percent-plus asset CAGR still remains plausible for an extended period
• Relatively low execution risk, uncharacteristic at such pace, is the icing on the cake
• Operating and financial leverage will continue to play through

June Futures

• Nifty futures closed at 11,976.9, premium of 11 points
• Nifty futures OI up 3.6 percent, adds 6.6 lakh shares in OI
• Bank Nifty futures closed at 31,246.9, discount of 18.5 points versus premium of 10.7 points
• Bank Nifty futures OI down 1 percent, sheds 23,000 shares in OI

Options

• Nifty PCR at 1.49 versus 1.36 (across all series)

Nifty Weekly Expiry 13 June

• Max OI on call side at 12,000 (19.5 lakh shares)
• Max OI on put side at 11,900 (20.7 lakh shares)
• OI addition seen at 11,900P (+7 lakh shares), 11,950P (+5.2 lakh shares)
• OI shedding seen at 11,900C (-5.6 lakh shares), 12,000C (-2.5 lakh shares)

Nifty Monthly Expiry 27 June

• Max OI on call side at 12,500 (25.3 lakh shares)
• Max OI on put side at 11,500 (28.2 lakh shares)
• Max OI addition seen at 11,700P (+3 lakh shares), 11,900P (+2.9 lakh shares)

• Savita Oil Technologies record date for share buyback
• Syngene International record date for bonus issue 1:1
• Manpasand Beverages, Kridhan Infra to move into ASM Framework
• Pricol, Tata Teleservices (Maharashtra) to move out of short term ASM Framework

• Eros International Media Promoter Eros Worldwide created pledge of 65.25 lakh shares from June 6-11
• India Cements promoter group EWS Finance and Investments revoked pledge of 85 lakh shares on June 7
• Hubtown promoter group Vyomesh Shah HUF revoked pledge of 1 lakh shares on June 10

• Repro India: Washington University sold 72,000 shares (0.63 percent) at Rs 504.28 each

• Price Waterhouse & Co resigned as the statutory auditor Reliance Capital and Reliance Home Finance. PwC noted certain observations/transactions in its assessment which if not resolved satisfactorily might be significant or material to the financial statements. PwC further stated that the company did not convene an audit committee meeting within the expected time. The company does not agree with the reasons given by PwC for the resignation.
• Reliance Industries and BP sanctioned third phase of integrated KG-D6 development. Approved development of MJ deep-water gas field in India. Three KG-D6 projects under development expected produce 1 billion cubic feet a day of new domestic gas onstream, phased over 2020-2022. Total Investment of for three projects pegged at Rs 35,000 crore.
• Dewan Housing Finance said that it has cleared all its overdue payments on NCDs at Rs 961.9 crore due on June 6. The company said in a media statement that it confirms full payment and will seek rating upgrades from agencies, coupled with more asset monetisation by on boarding a strategic partner. Aadhar Housing said Blackstone has acquired a 97.7 percent stake in company for including the entire stake held by the existing controlling shareholders, Wadhawan Global Capital Ltd. and DHFL. As part of the transaction, Blackstone has also infused Rs 800 crore in primary equity capital into Aadhar to fund the company for future growth.
• Tata Steel: Thyssenkrupp AG and Tata Steel’s collapsed joint venture was formally blocked by the European Union, the sixth deal vetoed by antitrust chief Margrethe Vestager. Allowing the deal to proceed would have reduced the number of suppliers and increased prices for steel used in packaging and in the car industry, the EU said in an emailed statement to Bloomberg.
• Gujarat Pipavav Ports to suspend operations from midnight of June 11 till June 13, for a period of 48 hours based on directions by the state’s port regulatory authority, due to a cyclonic storm which will be crossing the coast of Gujarat.
• Adani Green Energy: Promoter group under name of Gautam S Adani plans to sell cumulatively 5.98 percent stake in the company at a floor price of Rs 43 per share. This is the second share offering to public in three weeks. The overall stake of promoters will fall from 86.5 percent to 74.93 percent, to comply with SEBI norms on minimum shareholding.
• Religare Enterprises: Milind Narendra Patel resigned from post of Group CEO with effect from June 10.
• Abbott said it has launched sensor enabled HD grid mapping catheter, a device that can be inserted in the body to treat diseases or perform surgical procedures, in India. The company has launched the product after receiving clearance from U.S. FDA last year.
• BHEL, Tata Power, Gujarat Borosil: India proposed up to 30 percent capital subsidy for solar module units, planning a capital subsidy program for solar cells and module manufacturers, a government official according to Bloomberg.
• Eros International Media: Moody's Investors Service downgraded corporate family rating for Eros International Plc to B2 from B1, outlook changes to negative from stable. “The rating downgrade reflects Eros Plc's strained liquidity profile, which led to delays in servicing the bank loans of its Indian subsidiary, Eros International Media India Limited,” Nidhi Dhruv, a Moody's Vice President and Senior Analyst, said according to Bloomberg.
• Vedanta: Smelter near northern town of Chingola has been idle pending availability of concentrate stocks and Konkola had planned to start up smelter on June 22, company said in emailed statement to Bloomberg.
• Yes Bank: Mukesh Sabharwal resigned from post of non-executive director with effect from June 10, citing pursuits in academia.
• Larsen & Toubro: LIC reduced stake by 2.83 crore shares (2 percent) from 18.3 percent to 16.3 percent, from July 2017 till June 2019.
• ITC to invest Rs 20,000 crore in India, FMCG, Paper and Backend Operations. New FMCG factory to be set up in West Bengal, Sanjiv Puri said according to Bloomberg.

• Brent crude ended lower for the third consecutive trading session, closed 1.3 percent lower at $61.50 per barrel.
• West Texas Intermediate crude dipped 1.1 percent to $52.68 a barrel.
• Gold held at $1,327.69 an ounce.

London Metal Exchange

• Copper ended higher for the second consecutive trading session, up 0.03 percent.
• Zinc halted a two-day fall, closed 1.23 percent higher.
• Aluminium ended higher for the second day, up 0.17 percent.
• Nickel ended higher for the second day, up 2.05 percent.
• Lead ended higher for the second consecutive trading session, up 1.3 percent.
• Tin closed 0.42 percent lower.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.14 percent to 11,964 as of 8 a.m.

Asian stocks were mixed after U.S. equities halted a five-day winning streak and Treasuries steadied amid signs of fatigue from the recent global revival in risk appetite.

Hong Kong shares declined, while equities rose in Australia and were flat in Korea and Japan.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.