Sensex, Nifty Fall For Second Day After RBI Holds Rates

Indian equity benchmarks extended declines for second day in a row after the Reserve Bank of India maintained status quo on policy rates and stance.

The S&P BSE Sensex fell 0.7 percent or 250 points to 35,884 and the NSE Nifty 50 Index declined 0.8 percent or 87 points to 10,783. Negative global cues also added to the weak sentiment in India following yesterday’s biggest slide on Wall Street since mid-October.

After raising interest rates twice this year, the RBI kept its repurchase rate unchanged at 6.5 percent as predicted by economists surveyed by Bloomberg. The monetary policy stance also remained unchanged at 'calibrated tightening' even though it cut the inflation projections for the second half of the current fiscal.

All 19 sector gauges compiled by BSE ended lower led by the S&P BSE Metal Index's 3.8 percent loss.

Mid- and small-cap shares underperformed their larger peers as both the indices on BSE slumped 1.2 percent each.

• Dish TV has 30 lakh shares change hands in two blocks. Stock down 3.95 percent at Rs 35.45.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the country's largest drugmaker fell as much as 7.37 percent to Rs 410.

The stock has been falling since Monday after news agency PTI, citing sources, reported that the Securities and Exchange Board of India (SEBI) is likely to reopen an insider trading case against Sun Pharma.

With today’s fall in stock price Sun Pharma’s market capitalization dropped below Rs 1 lakh crore for the first time since August 2013.

Banking shares extended losses after the Reserve Bank of India's monetary policy committee kept rates unchanged.

Indian rupee extended gains and rose 0.17 percent or 12 paise to 70.38 per dollar after the Reserve Bank of India’s Monetary Policy Committee kept rates unchanged.

Reserve Bank of India's Monetary Policy Committee took a unanimous decision and kept repo rate unchanged at 6.5 percent.

Key highlights from RBI's policy decision:

• MPC keeps repo rate unchanged at 6.5 percent
• MPC keeps stance at 'calibrated tightening'
• MPC votes 6-0 to keep repo rate on hold
• MPC voted 5-1 to keep stance at 'calibrated tightening'; Dholakia voted for neutral stance
• MPC cuts H2 FY19 inflation forecast to 2.7-3.2 percent from 3.9-4.5 percent earlier
• MPC pegs H1 FY20 inflation at 3.8-4.2 percent
• MPC retains FY19 GDP growth projection at 7.4 percent
• RBI approves linking floating rate loans to external benchmark
• MPC maintains status quo on rates; cuts inflation forecast

Indian rupee recovered from intraday low levels and was little changed at 71.48 per dollar ahead of the Reserve Bank of India's monetary policy decision.

Earlier in the day, the local unit fell as much as 0.34 percent or 24 paise to 70.7450 against yesterday's close of 70.50.

European equities fell in early Wednesday trading after the carnage on Wall Street spooked traders and as banking and mining shares slid.

Interest rate sensitive banking, auto and real ty shares were trading with a negative bias ahead of the Reserve Bank of India's monetary policy decision.

The Reserve Bank of India will probably keep interest rates unchanged on Wednesday. After raising interest rates twice this year, the RBI will probably keep its repurchase rate unchanged at 6.5 percent, according to 48 of 52 economists surveyed by Bloomberg.

• Nifty Bank traded 0.54 percent lower.
• Nifty PSU Bank fell 0.39 percent.
• Nifty Private Bank traded 0.74 percent lower.
• Nifty Realty traded 0.49 percent lower.
• Nifty Auto fell 1.86 percent.

Indian rupee erases an earlier decline amid speculation banks sold dollars on behalf of a local financing company, two Mumbai-based traders say.

• USD/INR little changed at 70.53 after rising as much as 0.3 percent.
• Some information comes from FX traders familiar with the transactions, who asked not to be identified because they aren’t authorized to speak publicly.

Source: Bloomberg

The country's largest carmaker will raise prices of its vehicles across models from January citing higher commodity prices and foreign exchange rates, Maruti Suzuki said in an exchange notification.

Shares of the Mumbai-based drugmaker extended losses and fell as much as 4.47 percent to Rs 848 after the U.S. drug regulator completed inspection of its Mandideep facility with 10 observations.

The observations are largely procedural in nature with some gaps identified in the aseptic processing areas of the Cephalosporin API block and the company is confident of addressing them satisfactorily, Lupin said in an exchange notification.

Indian equity benchmarks were trading near intraday low levels on the back of broad-based selling pressure ahead of Reserve Bank of India's monetary policy decision.

The S&P BSE Sensex fell 0.63 percent or 226 points to 35,905 and the NSE Nifty 50 Index 0.7 percent or 76 points to 10,793.

All 19 sector gauges compiled by BSE were trading lower dragged by the S&P BSE Metal Index's 3 percent drop. Rate sensitive — realty, banking and auto indices were also down between 0.7-1.65 percent.

Mid- and small-cap shares were underperforming larger peers as both the S&P BSE MidCap and S&P BSE SmallCap Indices fell over a percent each.

The overall market breadth was extremely negative as 1,558 shares were declining while 666 were advancing on the BSE.

Shares of the Vadodara-based drugmaker rose as much as 3.09 percent to Rs 635 after it received U.S drug regulator nod for hypertension drug.

Alembic Pharmaceuticals received approval from the U.S. Food and Drug Administration for its Abbreviated New Drug Application (ANDA) Candesartan Cilexetil Tablets USP, 4 mg, 8 mg, and 16 mg, the company said in an exchange filing.

Candesartan Cilexetil Tablets USP, 4 mg, 8 mg, and 16 mg, have an estimated market size of $22 million for twelve months ending December 2017 according to IQVIA, the filing added.

Shares of the country's largest carmaker extended decline and fell as much as 1.32 percent to Rs 7,620 after its total production declined 12.6 percent to 1,35,946 units (YoY) in November, Maruti Suzuki said in an exchange filing.

Segment-wise production figures:

• Alto, WagonR production declined 23 percent to 31,147 units
• Dzire, Baleno, Swift, Celerio and Ignis production fell 11.5 percent to 65,736 units
• S-Cross, Vitara Brezza, Ertiga and Gypsy production rose 0.5 percent to 23,038 units

Nifty's 11,000 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 29 percent to Rs 66.50. Over 3.87 lakh shares were added to the open interest which stood at over 19.48 lakh shares.

Shares of the Mumbai-based steel products maker rose as much as 10.40 percent, the most in over two weeks, to Rs 52 after its arm won contract worth Rs 105 crore.

Vijay Nirman Company, Kridhan Infra's associate company has been awarded contract for construction of major and minor bridges on Mumbai-Nagpur Super Communication Expressway, the company said in an exchange notification.

Shares of the Kolkata-based maker of tyres, cement and iron pipes fell as much as 7.87 percent, the most in two months, to Rs 89.60.

The company's board has decided to demerge its tyre business into a separate entity — Birla Tyres. Birla Tyres will remain listed and Jan. 1, 2019 has been fixed as appointment date for the business spin-off. Birla Tyres will issue 1:1 equity share to Kesoram Industries at nominal value of Rs 10 per share, Kesoram Industries said in an exchange filing.

Shares of the Mumbai-based cash-strapped airline operator rose as much as 2.8 percent to Rs 311.75 apiece.

Jet Airways would bring on board a new investor in two-three months to help fund the cash-strapped airline, the company’s CEO Vinay Dube told its pilots, Mint reported citing unnamed sources.

The stock declined has 63 percent so far this year compared with 6.6 percent gain in the BSE Sensex Index, according to Bloomberg data.

Shares of the Delhi-based steel maker fell as much as 10.31 percent, the most in over two months, to Rs 83.10.

The Enforcement Directorate has attached its properties worth Rs 117 crore in an ongoing investigation related to coal block allotment case.

• Axis Bank has 27 lakh shares change hands in a block deal. Stock down 0.6 percent at Rs 619.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based parent of luxury car maker Jaguar Land Rover fell as much as 3.21 percent to Rs 170 after S&P Global Ratings cut Tata Motors’s long-term rating deeper into junk.

Tata Motor’s leverage may deteriorate over the next 12 to 18 months due to the weaker-than-expected performance of Jaguar Land Rover Automotive Plc, S&P said in a statement on Tuesday. The automaker’s rating remains on credit watch with negative implications given uncertainties around Brexit and will be revisited once the outcome for the U.K. is clearer, it said.

Indian equity benchmarks fell sharply ahead of Reserve Bank of India's monetary policy decision amid weak global cues.

The S&P BSE Sensex fell 0.55 percent or 195 points to 35,938 and the NSE Nifty 50 Index declined 0.65 percent or 70 points to 10,798.

All 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal Index's 1.2 percent fall.

The mid- and small-cap shares were in line with larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indices fell 0.4 percent each.

Rupee opened lower at 70.66 per dollar against yesterday's close of 70.50 ahead of Reserve Bank of India's monetary policy decision.

The local unit fell as much as 0.34 percent or 24 paise to 70.74 against the greenback.

ICICI Direct on Phoenix Mills

• Initiated ‘Buy’ with a price target of Rs 775.
• Phoenix to double retail portfolio over next 4-5 years.
• Well-funded for current expansion plans through CPPIB alliance and strong internal accruals.
• Current valuation does not value its expanded portfolio.

UBS on Arvind

• Maintained ‘Buy’ with a price target of Rs 130.
• Demerger offers opportunity to ride on garmenting capacity ramp-up.
• Success of textile lies in project execution and efficient capital allocation.
• Advanced materials and water business can drive a rerating.

CLSA on ICICI Securities

• Maintained ‘Buy’ with a price target of Rs 380
• Management to focus on customer growth and engagement; Target to double customer base in 3-4 years.
• See near-term pressure from lower mutual fund fees and competition.
• Expect earnings to be under pressure in FY19 due to weaker markets/lower cash-broking volumes.

CLSA on ONGC

• Maintained ‘Buy’ with a price target of Rs 225.
• Worries on subsidy burden may not play out.
• ONGC may be exempt from any subsidy burden in 2018-19; expect clarity on within two months.
• Mouth-watering valuations and near-term triggers suggest ONGC is a no-brainer BUY.

CLSA on Cadila Healthcare

• Upgraded to ‘Buy’ from ‘Outperform’; hiked price target to Rs 430 from Rs 410.
• Complex product approval cycle remains strong.
• Monetisation of vaccines and biosimilars in India/EMs to benefit.
• Upgrade to Buy as risk-reward favourable.

• Nifty December futures closed trading at 10,908, premium of 38 points.
• Max open interest for December series at 11,000 call option, (open interest at 27.3 lakh shares)
• Max open interest for December series at 10,000 put option, (open interest at 39.8 lakh shares)

Insider Trading

• Alembic promoter group Nirayu acquired 1.54 lakh shares between Nov. 30 and Dec. 3.
• Confidence Petroleum India promoters acquired 1.07 lakh shares on Dec. 3.
• Axis Bank promoter United India Insurance sold 60,000 shares between Nov. 28-30.
• Skipper promoters acquired 41,000 shares between Nov. 30 and Dec. 3.
• MEP Infra Developers promoter group AJ Tolls acquired 6 lakh shares between Nov. 30-Dec. 3.

(As reported on Dec. 4)

Trading Tweaks

• Hotel Leela Venture price band revised to 5 percent.

Who’s Meeting Whom

• Mahindra Lifepsace Developers to meet Wellington Management on Dec. 5.
• Tata Steel to meet Abu Dhabi Investment Authority on Dec.11.
• Astral Poly Technik to meet Edelweiss AMC, Tata AMC and other investors on Dec. 5.
• Tata Global Beverages to meet Habrok Capital Managment, Jupiter AMC and other investors from Dec. 5-6.

• Kesoram Industries board said it was demerging its tyre business. The separated business ‘Birla Tyres’ will remain listed. Jan. 1, 2019 has been fixed as appointment date for the business spin-off. Birla Tyres will issue 1:1 equity share to Kesoram Industries at nominal value of Rs 10 per share. Turnover of the de-merged business is Rs 1,453 crore which is 39 percent of the total revenues, as per the annual general report of financial year 2017-18. The rationale for this move is to revitalise the product portfolio and to leverage positive brand equity of ‘Birla’ name in for the new de-merged business.
• InterGlobe Aviation appointed Ronojoy Dutta as Principal Consultant to develop a five-year business plan for the airline company. He was the President for Air Sahara for two years, and advisor in restructuring of Air Canada and U.S. Airways.
• Oil India commissioned Cyclic Steam Simulation Technology in it’s well in Rajasthan, for extraction of heavy crude oil for the first time in India. This technology will be implemented in two more wells followed by field scale implementation and applied to assess the potential of other similar reservoirs.
• Lupin launched Silodosin Capsules after it received an approval from the U.S. FDA. This drug is used for treatment of benign prostatic hyperplasia.
• Hinduja Global Solutions said it was upgrading and investing in its facility in the U.K. within a year.
• ABB India board approved the re-appointment of Sanjeev Sharma as Managing Director of the company till January 2022.
• Kridhan Infra arm received order worth Rs 105 crore for highway project in Maharashtra.
• SKF India fixed Dec. 21 as record date for share buy-back.
• Vodafone Idea: India Ratings downgraded NCDs worth Rs 6,000 crore to IND AA- from IND AA+. Outlook continues to remain negative. Commercial paper rating maintained at IND A1+.

• A u-turn in oil, rupee sets the stage for a status quo policy
• HUL on buyout hunt to boost food category share in business
• Theresa May loses power over Brexit endgame in war with parliament
• India to allow business visa extension for up to 15 years
• Corporate tax cuts need to be backed by anti-evasion measures, says CBDT
• Stock market misery runs deeper than Trump and the Fed
• Why R Chandrashekhar quit Yes Bank’s board
• SEBI panel pitches for direct listing of Indian companies overseas
• Can money might ensure electoral victory?
• The first book written about a stock market is selling for $300,000
• Why auto sales remained subdued in the festival month

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.44 percent or 47 points to 10,867 as of 7:20 a.m.

Asian equities dropped in the wake of the biggest slide in stocks on Wall Street since the mid-October downdraft, though U.S. futures advanced after China officially echoed President Donald Trump’s optimism over bilateral trade talks.

Stocks in Hong Kong led the retreat, though regional declines from Sydney to Shanghai were less than the 3.2 percent tumble in the S&P 500 Index.

Currencies

• The yen was at 112.94 per dollar after rising 0.8 percent Tuesday.
• The offshore yuan added 0.1 percent to 6.8462 per dollar.
• The Bloomberg Dollar Spot Index was little changed.
• The euro traded little changed at $1.1337.
• The pound held at $1.2711.

Commodities

• West Texas Intermediate crude dropped 1.1 percent to $52.68 a barrel.
• Gold slid 0.1 percent to $1,237.24 an ounce following two days of gains.
• LME copper fell 0.2 percent to $6,195 per metric ton.

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