Sensex, Nifty Close At Record High; NSE Apologises For Trade Disruption

Indian shares closed at fresh record high despite a three-hour long trade disruption on the country’s largest stock exchange.

The S&P BSE Sensex gained 1.13 percent to 31,715 while the NSE Nifty 50 climbed 1 percent to 9,771. Both the benchmarks posted their best one-day performance since May 25. The market breadth was firmly skewed in favour of the buyers. About 4 stocks gained to every 2 that declined on the BSE.

The Securities and Exchange Board of India late Friday banned holders of offshore derivatives tied to the nation’s equities from taking unhedged exposure and said existing bets must be liquidated by the end of 2020 or by the date of maturity of the instruments.

The beaten down stocks from the I.T. and pharma sectors are now getting picked up, said G Chokkalingam, founder and managing director of Equinomics Research & Advisory.

He said the Nifty can easily take out the 10,000 level in the next couple of weeks if these index movers start contributing more.

However, he advised investors to guard against complacency and stick with the largecaps. “One should buy the beaten down largecaps as they provide more security and room for gains,” he told BloombergQuint in a phone interview.

The National Stock Exchange apologised to market participants for a technical glitch that resulted in a three-hour trading halt.

Shares of the information technology firm hit upper circuit for the first time since December 12, 2016, after it made restructuring proposal to ad hoc committee of holders to its bonds.

The proposal contemplates extension of maturities of relevant debt instruments as well as relief from company’s debt service obligations.

The restructuring will effectively provide company will a “liquidity” bridge until it can return to more normal operations.

Bharat Heavy Electricals Ltd. had 30 lakh shares change hands in a single block deal.

Buyers and sellers were not immediately known.

Source: Bloomberg

The rise in the stock is the highest in more than three months.

The S&P BSE Sensex gained 1 percent or over 340 points to 31,711 – a new all-time high for the 31-share index, led by a rally in technology shares after SEBI tightened rules for offshore derivatives and banned so-called “naked” bets.

Top Gainers

• TCS +4.5%
• Bharti Airtel +4.4%
• Wipro +3.6%
• Sun Pharma +3.3%
• Lupin +3.2%

Top Losers

• ITC -0.6%
• M&M -0.4%
• HUL -0.1%

Foreign and domestic funds have purchased more than $14 billion of Indian shares so far this year, according to data compiled by Bloomberg.

Drugmaker Lupin Ltd. gained for the second straight day after it received a final approval for its Flucytosine Capsules USP, 250 mg and 500 mg from the U.S. FDA.

The approval is to market a generic version of Valeant Pharmaceuticals International Inc’s Ancoban Capsule, 250 mg and 500 mg. Flucytosine Capsules are rated generic equivalent of the Ancoban Capsules.

The capsules are used for the treatment of serious infections caused by susceptible strains of candida or cryptococcus, the company said in an exchange filing.

Shares gained as much as 3.42 percent to Rs 1,154.90 on the Bombay Stock Exchange.

Almost 40 minutes into resumption of trade on the National Stock Exchange, a notice on the exchange website says that it is facing a display issue.

While the display issue is being addressed, both the cash and derivatives market are functioning normally.

The central government has taken note of the glitch that halted trade at the National Stock Exchange for over three hours.

The government has asked for a report from capital market regulator Securities and Exchange Board of India (SEBI) on the issue, a government official told BloombergQuint.

The NSE will submit its report to the regulator post which it will be forwarded to the government.

SEBI will also take a call on any loss incurred by traders due to this glitch, the official added.

Trading resumed in both cash as well as the futures and options segment of the National Stock Exchange after a technical glitch halted operations at India's largest stock exchange for over three hours.

The 51-stock benchmark resumed trading at 9,727.65. Most sectoral indices traded with gains with PSU Banks and Pharmaceutical stocks leading the way.

The National Stock Exchange will make its fourth attempt at resuming trade post a technical glitch. A notice on the exchange website says that the pre-open session will be held from 12:15-12:22 p.m. While normal trade in cash as well as the Futures and Options segment will resume at 12:30 p.m.

For the Futures and Options segment, members will be given a 15 minute window to cancel their outstanding orders. The cancellation window shall be available from 12:15 p.m. to 12:29 p.m., the notice said.

Shares of Divi's Laboratories Ltd. hit upper circuit for the first time ever after the U.S. FDA decided to lift import alert 99-32 on the company's Unit-II at Visakhapatnam.

The drug regulator had issued an import alert in March 2017 under clauses 99-32 and 66-40 and a warning letter in May 2017.

The company in an exchange filing has said that it has taken appropriate remediation measures to address the concerns raised by the U.S. FDA.

Shares were trading higher by 17.2 percent to Rs 796 on the Bombay Stock Exchange.

Trading came to a halt at the National Stock Exchange again after technical issues continued in the cash and futures market.

On the other hand, BSE CEO Ashish Kumar Chauhan told Bloomberg over phone that trading volume on the exchange has surged as much as 250 percent post the technical snag on the National Stock Exchange.

The exchange said it will make its third attempt at restarting trade with a pre-market session at 11:00 a.m. This will be followed by normal cash market operations at 11:15 a.m.

The exchange issued this notice brokers on its Bolt platform.

The exchange continued to face technical issues as it attempted to restart trading operations via a pre-market session. The derivatives segment on the NSE will not open at 10:45 a.m., according to Bloomberg.

The National Stock Exchange is set to resume trade after a technical glitch brought activities to a halt for more than 90 minutes. The exchange will start pre-open trade at 10:30 a.m. while it will open for trade at 10:45 a.m.

Trading came to a halt on the National Stock Exchange after a technical glitch, with the exchange having to halt trade in its futures and options segment as well. Efforts are being made to address and resolve the issue as soon as possible, exchange officials told BloombergQuint.

Shares of the rating agency jumped as much as 13.5 percent, the most since June 29, after a report suggested that U.S.-based Fitch is looking to buy a stake in the company.

Fitch, through its 100 percent subsidiary, India Ratings, has approached some of the large shareholders of CARE, according to an Economic Times report.

Last month, Crisil had purchased a 8.9 percent stake in its domestic rival from Canara Bank, calling it just a financial investment.

A creeping acquisition or a hostile takeover is very much on cards, the report said quoting an unnamed source close to the matter. “The timing is a matter of conjecture.”

Shares of Reliance Communications Ltd. surged as much as 7.24 percent, the most since May 30, 2017 to Rs 24.60 after it presented a long-term debt reduction plan to its lenders, according to reports in the Economic Times.

The plan included sale of real estate, under-sea cable assets as well as the company's DTH business.

Execution of the plan is likely to reduce the telecom operator's debt by as much as 80 percent by December. The company is looking to raise Rs 11,000 crore by monetising key properties in Mumbai and Delhi, the report added.

Shares of Satin Creditcare Network Ltd. gained as much as 5.2 percent to Rs 316.60 after it decided to issue 12.3 lakh optionally convertible redeemable preference shares to Capital First Ltd. at an issue price of Rs 284.53 per share.

The proposed offer to issue shares is a part of the company's strategic planning initiatives. Promoters currently hold 31.74 percent stake in the company.

Capital First, which does not hold any stake in Satin Creditcare currently, is making a strategic investment in the company for accessing its widespread distribution channel to offer its products.

If the shares issued are converted today, it results in a total investment of Rs 35 crore.

Shares of Biocon Ltd. fell as much as 9.4 percent, the most since November 9, 2016, after the company failed to comply with good manufacturing practices (GMP) for three of its products at its Bengaluru facility, according to France's health regulator ANSM.

The report following the inspection pointed out 35 deficiencies, including 11 major deficiencies at the plant.

Biocon has said it will work with the authorities to ensure the plant is cleared soon.

Indian shares opened positive in-line with Asian peers after strong U.S. jobs growth reinforced investor faith in global growth prospects.

Both S&P BSE Sensex and the NSE Nifty 50 index opened at a fresh record high before retreating from those levels. The NSE Nifty 50 index opened at 9,765.90 while the Sensex opened at 31,595.46.

Price quotes on the National Stock Exchange were not updating with deals not going through.

The RBI announced the sale of another OMO of Rs 10,000 crore late Friday evening. That's likely to further depress sentiments for the government bonds, which fell for a second week last week.

Going forward, Wednesday’s data on inflation and industrial production numbers will shape trading strategies for the week. Especially the CPI that’s likely to fall further after touching a record low last month, bolstering hands of the Reserve Bank of India to cut rates.

Overseas, U.S. Fed Chair Janet Yellen’s testimony before Congress will also be in focus midweek as investors look for guidance of when the Fed could start reducing its massive balance sheet. The country’s jobs data that the labor market remains healthy and should support continued increases in consumer spending.

On to the Rupee now, which is seen as the most resilient currency among emerging markets, according to a Bloomberg Survey of investors and strategists.

One important geopolitical reason that investors would be well advised to keep an eye on is the ongoing border standoff between India and China at the Sikkim border.

• Nifty futures correct after gaining for four days but manage to stay above the 9,650 level
• Both Nifty and Bank Nifty see low open interest buildup
• Nifty seeing very strong support between levels of 9,400-9,600
• 9,500 put has open interest concentration of 63.2 lakh shares
• 9,600 put has open interets concentration of 57 lakh shares
• Call writing between 9,700-10,000 levels indicates minor resistance
• There seems to be limited downside to the Nifty with trade likely to remain rangebound

Also Read: Foreign Funds Tread With Caution As Nifty Traders Near Record

IDFC Group, Shriram Group

• Groups enter into 90-day exclusive merger talks
• No transaction has been finalised yet
• Shriram Transport Finance to de-list post merger
• Shriram City Union will be absorbed into bank
• Shriram Transport will remain as a standalone NBFC
• Shriram Transport will become a wholly-owned subsidiary of IDFC

• Lupin: Annual report says Gavis Pharma’s networth still negative, may improve in the future
• Biocon: Three key products fail inspection of French Health Authority
• Bharat Financial Inclusion: Aditya Birla Capital in the fray to acquire the company
• Fortis Healthcare: FII investment limit hiked to 74 percent

For a complete list of stocks to watch, click HERE!

• RBI tweaks circular on 12 big stressed accounts
• Expect Q1 performance of I.T. companies to be muted, say experts
• Gold buyers fleeing a month after their most bullish bet of 2017
• Lenskart to launch IPO in 3 years, eyes Rs 600 crore business in 2017-18
• Defence ministry probe names two former army chiefs in Adarsh scam
• It may be a win for IDFC Bank but is the mega deal a win for Shriram Group companies?
• Forget Korea and China Risks, Asia currencies edge peers in poll
• Three key Biocon products fail French health authority Inspection

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, fell 0.21 percent to 9,653.

The Nifty futures pointed to weakness after the country’s capital market regulatory Securities and Exchange Board of India (SEBI) placed further restrictions on foreign portfolio investors (FPIs) issuing participatory notes where the underlying asset is a derivative. The regulator has warned that existing positions on un-hedged P-Note derivatives have to be liquidated by the end of the year 2020.

Meanwhile, stocks in Asia advanced after a stronger-than-expected U.S. jobs data reinstated confidence in global growth. Bond yields are rising worldwide as central banks stoke expectations for higher interest rates, while global stocks are close to all-time highs.

Oil rose 0.9 percent to $44.62 a barrel following its 2.8 percent slide last week.