Gains In Auto Stocks Fail To Drive Sensex, Nifty Higher

Indian equity benchmarks snapped their three-day gaining streak despite a recovery for automakers.

The S&P BSE Sensex fell 0.20 percent to close at 37,328.01 and the NSE Nifty 50 declined as much as 0.33 percent to 11,017. The broader markets represented by the NSE Nifty 500 Index fell as much as 0.45 percent.

For this week, 10,970 is a crucial support level for the Nifty, according to Aditya Agarwalla, technical analyst at Yes Securities. “If the Nifty breaks that level (10,970), then the further downside to 10,900 levels is expected,” he said in an interaction with BoombergQuint.

The market breadth was tilted in favour of sellers. About 1,129 stocks declined and 645 shares advanced on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty PSU Bank Index’s 2.35 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 1.18 percent.

Nifty: Top Gainers And Losers

Nifty index to be range bound between 10,950 and 11,150 with short-term momentum tilting towards the buy side. That's according to Amar Singh, Head Advisory, Angel Broking.

"Any dips in current levels should be used as a buying opportunity," said Singh in an interaction with BloombergQuint.

The auto slowdown isn’t reflective of underlying problems with the Indian economy. That’s according to Maruti Suzuki’s Chairman RC Bhargava.

Automakers are now banking on good monsoon to boost rural demand, the upcoming festive season to increase consumer spend and a combined push from the central and state governments to revive the sector, he said.

Watch the full interview here:

The Gujarat-based company has won Rs 10.2 crore worth purchase orders to supply heat exchangers and tube bundles, according to its exchange filing.

The shares traded flat at Rs 32.90 each. The stock has declined 31 percent in the past 12 months.

For this week, 10,970 is a crucial support level for the Nifty, according to Aditya Agarwalla, technical analyst at Yes Securities. “If the Nifty breaks that level (10,970), then the further downside to 10,900 levels is expected.”

Veteran investor Mark Mobius gave a blanket endorsement to buying gold, saying that accumulating bullion will reap rewards over the long term as leading central banks loosen monetary policy and the rise of cryptocurrencies serves only to reinforce demand for genuinely hard assets.

Indian equity indices were trading at their intraday lows in the afternoon trade, led by losses in private lenders.

The S&P BSE Sensex fell close to 0.40 percent to 37,257.61 and the NSE Nifty 50 declined as much as 0.54 percent to 10,993.80, as of 12:25 p.m.

For this week, 10,970 is a crucial support level for the Nifty, according to Aditya Agarwalla, technical analyst at Yes Securities. “If the Nifty breaks that level (10,970), then the further downside to 10,900 levels is expected,” he said, in an interaction to BloombergQuint.

The non-banking lender has agreed to acquire 58.2 percent stake in Sri Lanka-based Ideal Finance, according to a bourse notification. The targetted company will be classified as an associate company post the deal which is expected to be completed by 2021, the notification said.

Shares of the company declined for the second-straight session after it fell nearly 3 percent to Rs 308.35 apiece.

The shares trade at 11 times their estimated earnings per share for the coming year, Bloomberg data showed.

Shares of the private lender declined close to 6.7 percent to Rs 71.50 apiece.

Around 12.9 lakh shares changed hands on National Stock Exchange in a block deal. Buyers and sellers were not known immediately.

Source: Bloomberg

Investors need to remain cautious and invest methodically over 12 months in case they plan to enter small-cap stocks. That’s according to Rahul Singh, chief investment officer (Equities), Tata Mutual Fund.

“I'm not advising investors to immediately go to small caps,” said Singh in an interview with BloombergQuint. “Even if they do, they should spread out their investments over 6-12 months.” Singh also said emergence of the next big sector which could build alpha to investors remained a challenge.

Other Highlights:

• Within financials, insurance has looked good for some time now. remains a structural story and there are options available.
• Investors should look at multi-cap and large-cap and mid-cap stocks as options as that is where vaulations have corrected.
• One has to look at companies at the individual level and what management is doing to increase market share.

Shares of the Shapoorji Pallonji Group company made its stock debut at Rs 700 each, at 10.2 percent lower to its IPO price.

The Rs 3,125-crore offering received 92 percent demand in the first week of August. The stock fell 11.5 percent thereafter.

Shares of the telecom equipment maker rose as much as 8.8 percent to Rs 20.50 apiece.

The company received purchase orders worth Rs 2,467 crore from Bharat Sanchar Nigam Ltd. for defence communication network, according to an exchange filing. Project is to be completed in the next 18 months, the filing said.

The stock declined 24 percent in the past 12 months compared to 2.3 percent fall in the Sensex.

Shares of the natural gas distributor rose 12.1 percent, its biggest intraday gain since July 2016, to Rs 882.10 each.

Royal Dutch Shell Plc’s unit is seeking Rs 724 crore from sale of its remaining stake in the company, according to terms of the deal obtained by Bloomberg. BG Asia Pacific is offering 98.8 lakh shares at a floor price of Rs 733.1, representing a discount of 6.9 percent to Mahanagar Gas’s last close.

The trading volume was 150 times its 20-day average for this time of the day, Bloomberg data showed.

Jefferies On Mahanagar Gas

• Maintained 'Buy'; price target fixed at Rs 786.10.
• Do not foresee the exit of Shell to have any negative fundamental impact.
• Margin expansion has already started to play out in June quarter.
• APM gas price is expected to go down by around 10 percent in October helping to maintain margins in CNG and domestic PNG.
• Free cash flow generation is robust with 6 percent free-cash flow yield creating room for higher dividends too, in the absence of new avenues for capex.

Indian equity benchmarks fluctuated between gains and losses in opening trade as businesses awaited stimulus to spur economic growth.

The S&P BSE Sensex rose as much as 0.16 percent to 37,460.63 and the NSE Nifty 50 rose as much as 0.07 percent to 11,063.50, as of 9:20 a.m. The broader markets represented by the NSE Nifty 500 Index rose as much as 0.07 percent.

The market breadth was tilted in favour of buyers. About 746 stocks advanced and 649 shares declined on National Stock Exchange.

However, seven out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Metal Index’s 0.54 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, down 1.05 percent.

The Indian rupee opened lower against the U.S. dollar. The home currency depreciated as much as 0.12 percent to Rs 71.52 against the greenback.

August Futures

• Nifty futures closed at 11,058.1, premium of 4.2 points versus 16.8 points.
• Nifty futures open interest down 2 percent, sheds 3.8 lakh shares in open interest.
• Bank Nifty futures closed at 28,203, premium of 16.9 points versus 43.5 points.
• Bank Nifty futures open interest down 7 percent, sheds 1 lakh shares in open interest.

Options

Nifty PCR at 1.17 versus 1.20 (across all series).

Nifty Weekly Expiry Aug. 22

• Max open interest on call side at 11,100 (15.2 lakh shares).
• Max open interest on put side at 11,000 (17 lakh shares).
• Max open interest addition seen in 11,100P (+5.7 lakh shares), 11,050P (+4 lakh shares), 11,300C (+3.6 lakh shares).
• open interest shedding seen at 10,900P (-4 lakh shares).

Nifty Monthly Expiry Aug. 29

• Max open interest on call side at 11,500 (27 lakh shares).
• Max open interest on put side at 11,000 (37.5 lakh shares).

• Sterling & Wilson Solar to be listed on bourses.
• Embassy Office Parks REIT ex-date for distribution.
• Seshasayee Paper and Boards record date for share split from Rs 10 to Rs 2.
• HSIL record date for demerger.
• S Chand & Company to move into ASM Framework.
• Shilpa Medicare, Saregama India to move into short term ASM Framework.
• Camlin Fine Sciences, New Delhi Television to move out of short term ASM Framework.

• Tata Motors: Care Ratings downgraded long term rating to ‘AA-’ from ‘AA’, with outlook changing from ‘Stable’ to ‘Negative’.
• Vodafone Idea: Chief Executive Officer Balesh Sharma stepped down from the role with immediate effect due to personal reason. Vodafone Group’s representative in India, Ravindar Takkar appointed as Managing Director and CEO for period of three years. Company stated that Balesh Sharma will be taking up a new role with Vodafone Group, which will be announced in due course.
• Mangalore Refinery and Petrochemicals stated that the refinery has been affected by a minor landslide due to monsoon. Due to the precaution, the company will shut down phase-III process units, but phase-I, phase-II and product dispatch facilities will operate normally.
• Himachal Futuristic Communications received purchase orders worth Rs 2,467 crores from Bharat Sanchar Nigam Ltd. for defence communication network. Project is to be completed in the next 18 months.
• Hero MotoCorp clarified that it has not participated in fund raising for e-mobility startup Blu Smart Mobility.
• DHFL defaulted in payment of non-convertible debentures and commercial papers worth Rs 1,571 crore, which were due on Aug. 19.
• IL&FS Transportation Networks defaulted in payment of NCDs interest worth Rs 4.74 crore, which was due on Aug. 19.
• Nestle launched its cocoa-malt beverage Milo.
• Sonata Software’s European arm completed the sale of its entire stake in Izara Aps.
• Crompton Greaves Consumer Electricals: Life Insurance Corporation of India reduced its stake in the company from 5.2 percent to 3.1 percent via open market sale.
• Hindalco: LIC increased its stake in the company from 8.3 percent to 10.4 percent via open market purchase.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.14 percent to 11,041 as of 8:15 a.m.

Asian stocks saw modest gains on Tuesday morning after some signs of progress on trade negotiations between the world’s two largest economies. Equities edged higher in Tokyo, Sydney and Seoul. Futures in Hong Kong were little changed.

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