Sensex, Nifty Fall For Second Day As Trade War Looms

Indian equity benchmarks fell for second straight day after trade tensions between U.S. and China escalated.

The S&P BSE Sensex fell 0.74 percent or 261 points to 35,287 and the NSE Nifty 50 index declined 0.83 percent or 89 points to 10,710.

Equities across the globe came under selling pressure after China vowed to retaliate 'forcefully' against President Donald Trump’s threatened tariffs on another $200 billion in Chinese imports.

"With China announcing retaliatory measures, global trade war appears to escalate," Shailendra Kumar, CIO at Narnolia Financial Advisors, told BloombergQuint in an email reply.

Rising trade-related worries will impact some sectors of the Indian market such as industrial, chemical, metal, auto and auto component... This surely is the time to reduce exposure to mid- and small-companies in these sectors, Kumar said.

In today's trade all sector gauges compiled by BSE ended lower led by the S&P BSE Metal index's 1.7 percent drop.

The mid- and small-cap stocks underperformed their larger peers as the S&P BSE MidCap index dropped 0.98 percent and the S&P BSE SmallCap index tumbled 1.3 percent.

India's domestic air passenger traffic rose 3 percent (MoM)

Airline-wise market share in May:

• SpiceJet market share at 12.3 percent
• Indigo market share at 40.9 percent
• Jet Airways market share at 15.2 percent
• Air India market share at 12.8 percent

Source: DGCA

• Rupee extended decline and fell 0.5 percent or 33 paise to 68.32 per U.S. dollar.

• Relaxo Footwear: The Delhi-based footwear maker rose 2.3 percent to Rs 729. Trading volume was 48.4 times its 20-day average.
• Blue Dart Express: The Mumbai-based courier service provider fell 1 percent to Rs 3,712. trading volume was 8.1 times its 20-day average.
• Solar Industries: The Nagpur-based explosives maker fell 3.2 percent to Rs 1,137. Trading volume was 5.5 times its 20-day average.
• Prestige Estates: The Bengaluru-based real estate developer fell 0.7 percent to Rs 267.25. Trading volume was 4.1 times its 20-day average.

Bharatiya Janata Party withdrew support from alliance with PDP government in Jammu & Kashmir.

BJP says:

• Press freedom and freedom of speech is at risk in the valley
• Shujaat Bukhari's killing is an example of fundamental right in danger
• Fundamental rights of the citizens are under danger in the valley
• Terrorism, violence and radicalisation have risen in the valley
• Untenable to continue in alliance with PDP in Jammu & Kashmir
• Party held a meeting earlier in the day over political situation in J&K

India will soon achieve fiscal deficit target of 3 percent of Gross Domestic Product, Subhash Chandra Garg, economic affairs secretary said while talking to media persons in New Delhi.

Key highlights:

• No mature system yet to find startups and allow easy exit.
• Very soon fiscal deficit will come down to 3 percent of GDP, next year itself or next to next year.
• Fiscal management will continue on the same path without being put to any risks.
• We are still capital positive, don't see widening of current account deficit as a risk.
• We are in a good shape; capital account should be good enough.
• Government needs to be vigilant on macro front.
• Current account deficit of 2-2.5 percent not a worry.
• Post demonetisation, there has been definite financialisation of economy which is visible
• Private banking is doing reasonably well, NBFCs have emerged as major players in financial space
• IBC has resolved 175 cases including big cases
• Regulatory system in the country is evolving soundly

Indian rupee fell as much as 0.39 percent or 26 paise to 68.25 per dollar, its lowest level since May 25.

Increased demand for the American currency from importers and banks amid persistent foreign fund outflows also weighed on the rupee.

Foreign portfolio investors (FPIs) sold shares worth Rs 754.43 crore yesterday, as per provisional data.

Forex dealers said the euro and yen rising against the greenback, however, capped the rupee's fall.

Source: Press Trust of India

The Stoxx Europe 600 retreated for a third day and U.S. equity futures slumped, tracking losses across Asia as Chinese shares plunged after reopening following a holiday.

• Indian equity benchmarks extended losses tracking a global selloff in stocks after trade tensions between the U.S. and China escalated.
• The S&P BSE Sensex fell 0.7 percent or 251 points to 35,297 and the NSE Nifty 50 index tumbled 0.8 percent or 88 points to 10,712.
• All sector gauges compiled by BSE were trading lower led by the S&P BSE Metal index's 2.2 percent drop.
• The mid- and small-cap shares were underperforming their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes dropped over a percent each.
• The overall market breadth was extremely bearish as 1,847 shares were declining while 598 were advancing on the BSE.

Click here for more stock market data

Shares of the Bengaluru-based communication equipment maker were locked in an upper circuit for seventeenth day in a row.

The stock was up 20 percent at Rs 59.75 on the National Stock Exchange. In the last seventeen sessions the stock has tripled from Rs 20.20 to Rs 59.75.

MRO-TEK's was removed from Graded Surveillance Measure (GSM) and shifted to to B group of shares with 20 percent circuit filter.

Shares of the Ahmedabad-based drugmaker rose as much as 2 percent to Rs 408.40 after Zydus Cadila received U.S. drug regulator's tetative approval for Tadalafil Tablets.

U.S. FDA has granted tentative approval to Zydu Cadila to market Tadalafil tablets. The drug is used to treat erectile dysfunction and symptoms of benign prostatic hypertrophy (enlarged prostate), Cadila Healthcare said in an exchange filing.

Shares of oil marketing companies were trading lower after Indian Oil cut petrol price by 8 paise per litre.

• Hindustan Petroleum fell 3.2 percent
• Indian Oil declined 2.9 percent
• Bharat Petroleum slipped 2.9 percent

• NBCC has 10 lakh shares change hands in a single block deal. Stock down 2.14 percent at Rs 84.40.

Buyers and sellers were not immediately known

Source: Bloomberg

Nifty 10,800 strike price call was among the most active option contracts on the National Stock Exchange.

The premium on the contract fell 35 percent to Rs 49.50. Over 12.4 lakh shares were added to the open interest which stood at over 47.89 lakh shares.

Click here to see the complete options chain

Shares of the Mumbai-based sugar manufacturer fell as much as 5.83 percent to Rs 14.60, its lowest level in over three months.

Chinese shares extended losses after China vowed to retaliate after President Donald Trump threatened tariffs on another $200 billion in Chinese imports, deepening a trade dispute between the world’s two biggest economies.

Shares of the Bengaluru-based drugmaker rose as much as 3.5 percent to Rs 419.75 after it received U.S. drug regulator’s approval for Ketoconazole Tablets.

Strides Pharma Global Pte. Ltd. has received final approval for Ketoconazole Tablets USP, 200 mg from the U.S. FDA, Strides Shasun said in an exchange filing.

Ketoconazole Tablets is a generic version of Nizoral Tablets, 200 mg, of Janssen Pharmaceuticals and is used to treat serious fungal infections in the body, the filing added.

Shares of the Vadodara-based fruit juice maker resumed decline after gaining for two consecutive sessions during the last week.

The stock was locked in a five percent lower circuit for third in a row at Rs 142.40.

Rural market has been stronger than urban market for Maruti Suzuki, RC Bhargava, chairman of Maruti Suzuki told BloombergQuint in an interview.

Key highlights of the conversation:

• Demand for cars to remain healthy moving forward.
• Production for Baleno, Brezza has been ramped up significantly.
• Waiting period for key models around 4-5 weeks.
• Rural market expectation for growth is better on the back of good monsoon forecast.
• NEXA Dealer Channel sales experience better than normal dealerships.
• Electric cars, technology costs are higher.
• Royalty on electric cars not yet finalised.
• Expect royalty on existing cars to come down.
• Diesel car sales are going down, petrol car sales higher.
• Cost of owning diesel car higher than petrol car; don't see shift to diesel cars.

Shares of the Noida-based cable and broadband service provider fell as much as 4.4 percent to Rs 14.20 after its promoter Digital Satellite Media and Broadband sold 0.8 percent stake in the company.

Digital Satellite Media and Broadband sold 70.58 lakh shares at Rs 14.5 each while JSGG Infra Developers LLP bought 70.58 lakh shares, according to information available on stock exchanges.

Shares of the country's second largest private sector lender fell as much as 1.35 percent to Rs 289.05.

The bank's board has made changes to its top management and appointed ICICI Pru Life's Sandeep Bakshi as COO while its Managing Director and Chief Executive Officer Chanda Kochhar will go on leave till an independent probe into allegations of impropriety against her is completed.

Shares of the Hyderabad-based power infrastructure service company erased losses and rose as much as 2.65 percent to Rs 965.

The company has received work orders worth Rs 500 crore, Power Mech Projects said in an exchange filing.

Shares of the Mumbai-based glass products maker surged as much as 20 percent, the most in over 21 months, to Rs 1,064.15 after its board approved bonus issue of shares.

The board of directors approved bonus issue of shares in ratio of 3:1 that is its sharesholders will be issued three equity shares for every equity one share held, Borosil Glass Works said in an exchange filing.

The bonus shares are expected to be credited to shareholders' accounts by August 10.

Shares of the Goa-based chemical maker fell as much as 2.72 percent to Rs 654.80 after operations at its Paradeep facility were temporarily halted due to labour issues.

The stock has so far this year fallen 25 percent.

Shares of the Mumbai-based drugmaker rose as much as 3 percent to Rs 599.40 after the U.S. drug regulator approved its manufacturing facility in Monroe, North Carolina.

U.S. Food & Drug Administration provided its first supplemental Abbreviated New Drug Application (sANDA) approval for the company’s manufacturing facility in Monroe, North Carolina, the company said in an exchange filing.

The approval covers Atovaquone and Proguanil Hydrochloride Tablets, 250 MG/100 MG and 62.5 MG/25 MG, a generic version of GlaxoSmithKline’s Malarone, the exchange filing added.

Rally in midcap stocks has been put on hold by issue of auditors resigning from some companies, Jinesh Gopani of Axis Mutual Fund told BloombergQuint in an interview.

Key highlights of the conversation:

• Deploying money at a slower rate in select pockets of the market
• Midcap rally put on hold by issue of auditor resignation of some companies
• Expect another rate hike and then decide based on inflation
• Stated investing in technology stocks 6-7 months ago

Indian equity benchmarks edged lower mirroring weak global cues after U.S. President Donald Trump threatened to place tariffs on another $200 billion in Chinese imports, escalating the trade dispute between U.S. and China.

The S&P BSE Sensex fell 0.3 percent or 100 points to 35,448 and the NSE Nifty 50 index declined 0.35 percent or 38 points to 10,762.

All sector gauges compiled by National Stock Exchange were trading lower led by the Nifty Metal index's 1 percent drop.

The mid- and small-cap shares were underperforming their larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 index tumbled 0.6 percent each.

Saswata Guha of Fitch ratings told BloombergQuint in an interview that appointing Sandeep Bakshi as the COO of ICICI Bank is a positive move.

Key highlights of the conversation:

• Will wait for outcome of investigations.
• New appointment is a positive move.
• We were not happy with the ICICI Bank's board's management of the issue.
• May not change much in terms of operational performance.

Who's Meeting Whom

• PSP Projects to meet Wellington Management Co LLP and Redwood Investments LLC on June 19.
• Shriram Commercial Vehicle Finance to meet Reliance Life, TCG Management and others on June 19.
• Tata Steel to meet Anvil Wealth Management on June 19.

Insider Trades

• Everest Kanto Cylinders promoter Puneet Khurana acquired 1.75 lakh shares on June 14.
• Centrum Capital promoter BG Advisory Services LLP acquired 51,000 shares on June 14.
• Mercator promoter Harish Kumar Mittal acquired 22,000 shares on June 15.
• Vikas Eco Tech promoter Ketav Multicorp Pvt Ltd acquired 5 lakh shares on June 15.

(As reported on June 18)

Bulk Deals

Siti Networks

• Promoter Digital Satellite Media and Broadband sold 70.58 lakh shares or 0.8 percent equity at Rs 14.5 each.
• JSGG Infra Developers LLP bought 70.58 lakh shares or 0.8 percent equity at Rs 14.5 each.

CIL Nova Petrochemicals

• Asia Investment Corporation Mauritius Ltd bought 1.70 lakh shares or 0.6 percent equity at Rs 29.94 each.

Trading Tweaks

• McLeod Russel India buyback up to Rs 100 crore starts today.
• Essel Propack last trading day before going ex-bonus.

F&O Cues

• Nifty June futures ended at 10,789.6, with a discount of 10 points versus 3 points.
• June series Nifty open interest (OI) up 1 percent and Bank Nifty OI up 3 percent.
• India VIX ended at 12.3, up 2.5 percent.
• Max OI for June series call at 11,000 strike price call option, OI at 46.8 lakh shares, up 8 percent.
• Max OI for June series put shifts to 10,700 strike price put option, OI at 49.6 lakh shares, up 3 percent.

Auto component maker Varroc Engineering is looking to raise Rs 3,000 crore via share sale through initial public offering (IPO).

• England beat Tunisia 2-1
• Belgium beat Panama 3-0
• Sweden beat South Korea 1-0

Today’s match schedule

• Columbia versus Japan at 5:30 PM IST
• Poland versus Senegal at 8:30 PM IST

Click here for full coverage of FIFA World Cup

• Goa Carbon says operations at Paradeep unit temporarily halted due to labour issues.
• Glenmark: FDA approves first sANDA for Atovaquone and Proguanil tablets.
• M&M says Gipp Aero, Aerostaff Australia cease to be units.
• TCS: Reaffirms commitment to France with new Paris delivery centre.
• ICICI Prudential Life: Names NS Kannan MD and CEO.
• Titan sells its entire stake in Titan Time Products to Danlaw Technologies for Rs 18.5 crore.
• Borosil Glass Work approves 3:1 bonus issue.
• IDBI Bank hikes MCLR by 20 basis points across tenors.

• How India and Ratan Tata helped Xiaomi set up biggest IPO since Alibaba
• India will discuss ‘reasonable’ pricing at OPEC meet, says oil minister
• OPEC aims for modest output hike
• History's not on the market's side in a trade war
• Second tranche of Bharat-22 ETF opens today; Government eyes up to Rs 8,400 crore
• Kraft Heinz is said to consider $1 billion Complan sale in India
• Jaitley hints at no cut in excise duty on petrol and diesel
• Nirav Modi travelled on revoked passport despite Interpol alert: CBI
• Patanjali seeks more information on Adani Wilmar’s bid for Ruchi Soya
• Up to Rs 4 lakh crore in credit may face refinancing risk, cautions India Ratings
• Government plans to sell stake in Coal India
• Audi CEO Stadler taken into custody in diesel probe
• World’s number one auto-parts maker to get boost from regulation

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.40 percent to 10,748 as of 6:52 a.m.

The yen jumped Asian stocks dropped alongside U.S. equity futures after President Donald Trump threatened to slap tariffs on more Chinese goods. Gold and Treasuries climbed.

S&P 500 Index futures declined after Trump said he has directed the U.S. Trade Representative to identify $200 billion worth of China goods for additional tariffs.

Commodities

• Gold rose 0.3 percent to $1,281.64 an ounce.
• WTI oil slipped 0.4 percent to $65.60 a barrel after rising 1.2 percent on Monday.

Currencies

• The Bloomberg Dollar Spot Index slipped 0.1 percent.
• The yen gained 0.4 percent to 110.11 per dollar.
• The Aussie dollar tumbled 0.3 percent to 74.03 U.S. cents.
• The euro held at $1.1632.
• The pound traded at $1.3257 after slipping 0.3 percent on Monday.

Here are some key events to watch for this week:

• European Central Bank President Mario Draghi speaks at ECB’s Forum on Central Banking on Tuesday.
• U.S. housing starts probably rose in May, data out Tuesday is expected to show.
• Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday.
• Thailand, Philippines and Brazil central bank decisions due Wednesday.
• Bank of England rate decision on Thursday.
• Also on Thursday: U.S. jobless claims, New Zealand GDP, South Korea export data.
• The Organization of Petroleum Exporting Countries meets in Vienna on Friday.