Sensex, Nifty Snap Three-Day Decline Led By HDFC Twins, Infosys

Indian equity benchmarks snapped their three-day losing streak led by HDFC twins, ICICI Bank and TCS.

The S&P BSE Sensex rose 0.8 percent or 299 points to 36,526 and the NSE Nifty 50 Index climbed 0.7 percent or 78 points to 11,008.

For most part of the day, the benchmarks traded with a negative bias but sentiment improved after the government sought to take over the troubled shadow banker IL&FS by replacing all its board members.

Twelve of 19 sector gauges compiled by BSE ended higher led by the S&P BSE IT Index's 2.4 percent gain. On the flipside, the S&P BSE Realty Index was top loser, down 1.4 percent.

The broader markets ended mixed as the S&P BSE MidCap Index rose 0.5 percent while the S&P BSE SmallCap Index fell 0.25 percent.

Shares of the Mumbai-based private sector lender extended gains and rose as much as 14 percent to Rs 210 after disclosed NPA numbers for the September quarter ahead of its earnings.

• IL&FS Transportation Network: The Noida-based road developer rose as much as 20 percent to Rs 27 after the government sought to takeover the parent IL&FS by replacing all existing board members.
• Infibeam Avenues: The Gandhinagar-based e-commerce website operator rose 18 percent after it clarified that promoters Have not sold any pledged shares.
• Gayatri Projects: The Hyderabad-based construction company advanced 7 percent to Rs 179 after it received additional orders worth Rs 550 crore.
• Eros International: The Mumbai-based movie producer snapped its 6-day losing streak on heavy volumes. Trading volume was 13.1 times its 20-day average.

• The benchmarks rebounded from intraday low levels led by TCS, HDFC twins and Infosys.
• The Sensex rose 0.4 percent or 175 points to 36,402 and Nifty 50 Index climbed 0.3 percent or 33 points to 10,963.

Shares of the Mumbai-based car and commercial vehicle maker rose as much as 3 percent to Rs 230.50 after its domestic sales rose 20 percent to 64,250 units in September, Tata motors said in an exchange filing.

Key sales highlights:

• Domestic sales rose 20 percent to 64,250 units versus 53,964 units (YoY)
• Commercial vehicle sales rose 26 percent to 46,169 units versus 36,578 units (YoY)
• Medium and heavy commercial vehicle truck sales rose 32 percent to 16,239 units versus 12,259 units (YoY)
• Passenger vehicle sales rose 7 percent to 18,429 units versus 17,286 units (YoY)
• Exports rose 35 percent to 5,250 units versus 3,887 units (YoY)
• Cumulative domestic sales for April-September rose 40 percent to 339,186 units versus 242,787 units during the same period last year

Shares of the Mumbai-based airline operator fell for a tenth day in row, its longest losing streak in over five years, to Rs 162.80.

The stock has been facing selling pressure after the Income Tax Department began inspecting the books of crisis-hit Jet Airways for alleged falsification of accounts and suspicious transactions.

In last the ten trading sessions the stock has slumped 39 percent.

Yes Bank's Rajat Monga told BloombergQuint that 85 percent of exposure to NBFCs is AA rated or better and there is no connection/dealings between Yes Bank and the family office.

Key highlights of conversation:

• Credit issues in corporate are all known at this stage
• It is the best time to build opportunity in the corporate book
• Exposure of total loan book to NBFCs is at 5.0-5.5 percent
• 85 percent of our exposure to NBFCs is AA rated or better. There is no connection/dealings between Yes Bank and the family office
• On the ground review for FY18 divergence audit has taken place, we do not have the audit report yet
• There is no bank which does not have divergence.
• Despite divergence, we are not losing our money

• Schaeffler India: The Mumbai-based metal ball and bearings maker fell as much as 2.34 percent to Rs 5,269. Trading volume was 22 times its 20-day average.
• Eros International: The Mumbai-based movie producer fell 2.22 percent to Rs 70.75. Trading volume was 17 times its 20-day average.
• KNR Construction: The Hyderabad-based construction company fell as much as 6.8 percent to Rs 166.10. Trading volume was 14 times its 20-day average.
• Astral Poly Technik: The Ahmedabad-based PVC plumbing systems maker fell as much as 5.3 percent to Rs 954. Trading volume was 10.1 times its 20-day average.

Mahindra & Mahindra Ltd.’s farm equipment sales fell 18 percent on a yearly basis in September, after it sold 37,581 units during the period, according to its exchange filing.

Key sales highlights (year on year):

• Total domestic sales fell 19 percent to 35,983 units.
• Total exports rose 10 percent to 1,628 units.
• Shares of M&M fell 1.3 percent to Rs 850.30 as of 12:55 p.m.

Shares of IL&FS Transportation Network rose as much as 13 percent to Rs 25.50 after the government sought to control of its parent by replacing all board members.

Government has sought for suspension of IL&FS board in NCLT Mumbai today.

Key highlights from NCLT:

• Government proposes Uday Kotak as chairman and non-executive director on the IL&FS board.
• Government seeks suspension of IL&FS’s board of directors at the interim stage
• Government proposes to appoint 10 nominee directors who will report to NCLT for relevant plans for the way forward
• Government has identified few prominent persons who are proposed to head the board
• NCLT appreciates the urgency of government action in this matter
• Department of economic affairs passed an order to start investigation yesterday

Shares of the country's largest IT outsourcing company rose as much as 4.2 percent to record high of Rs 2,275.

With today's surge in stock price, TCS' market capitalisation topped Rs 8.7 lakh crore for the first time, data compiled by Bloomberg showed.

Shares of the Delhi-based agricultural chemicals maker fell as much as 7.2 percent to Rs 377 after a fire broke out at its Keshwana plant in Rajasthan, Dhanuka Agritech said in an exchange filing.

There was no casualty at the plant and expected damage is not yet estimated, the filing added.

Shares of the Uday Kotak-led private sector lender fell as much as 12.2 percent, the most in six years, to Rs 1,002 after the Reserve Bank of India stopped Bandhan Bank from opening new branches without seeking its approval as India’s central bank penalized it for failing to comply with shareholding requirements.

Kotak Mahindra Bank also needs to dilute its promoter's stake to 20 percent by December 2018 and to 15 percent by March 2020 from 30 percent currently. Stringent steps by RBI against Bandhan Bank implies that RBI may not provide more time to Kotak Mahindra Bank, Nomura said in a note.

The Mumbai bench of the National Company Law Tribunal will hear a ministry of corporate affairs case against Infrastructure Leasing & Financial Services (IL&FS) and others today, according to a cause list on its website.

• Indian equity benchmarks extended decline led by weakness in Kotak Mahindra Bank, Reliance Industries, Larsen & Toubro and Axis Bank.
• The S&P BSE Sensex fell 200 points or 0.55 percent to 36,027 and the NSE Nifty 50 Index declined 95 points or 0.85 percent to 10,835.
• Seventeen of 19 sector gauges compiled by BSE fell led by the S&P BSE Capital Goods Index's 2.9 percent drop. On the flipside, the S&P BSE IT Index was top gainer, up 1.6 percent.
• The mid- and small-cap shares were underperforming larger peers as the S&P BSE MidCap Index slumped 1.9 percent and the S&P BSE SmallCap Index plunged 2.4 percent.
• The market breadth was extremely negative as over 1,900 shares were declining against 480 stocks advancing on the BSE.

Click here for more stock market statistics

Shares of the Chennai-based commercial vehicle maker swung after it reported sales figures for the month of September.

Key sales highlights:

• Medium and heavy commercial vehicle sales rose 21 percent to 14,232 units versus 11,805 units (YoY)
• Light commercial vehicle sales rose 44 percent to Rs 5,141 units versus 3,566 units (YoY)
• Total sales up 26 percent at 19,373 units versus 15,371 units (YoY)

Shares of the Gandhinagar-based e-commerce website operator rose 13 percent to Rs 66 as it rebounded after falling over 70 percent on Friday.

The company's management told BloombergQuint that its fundamentals remain strong and some WhatsApp group carrying erroneous messages have caused panic.

Key highlights of the conversation:

• Fundamentals of the company remain strong as ever
• Some WhatsApp group carrying erroneous messages have caused panic
• Rumours floating on WhatsApp are baseless
• Will remain transparent in terms of information sharing with investors
• Concerned over rumours spreading over WhatsApp
• Neither promoter nor promoter group has sold or liquidated any shares
• Processed transactions worth more than Rs 10,000 crore last quarter
• None of the pledged shares have been liquidated

Shares of the Tamil Nadu-based private sector lender rose as much as 20 percent, the most in nearly five years, to Rs 86.15 on heavy volumes. Trading volume was 57 times its 20-day average, according to data compiled by Bloomberg.

Over 44 lakh shares changed hands on the National Stock Exchange, according to information on NSE's website.

Shares of the Mumbai-based road developer rose as much as 9.31 percent to Rs 24.65 after it said in an exchange notification that it made interest payment on a non-convertible debenture.

Shares of the Mumbai-based infrastructure development company was locked in a 20 percent lower circuit at Rs 162.60 after the market regulator directed the National Stock Exchange of India Ltd. to appoint an independent auditor for the forensic audit of J.Kumar Infraprojects, which figured among the 331 “suspected shell companies”.

The auditor will verify misrepresentation, including financials and business activities of the company, as well as look into the role of key management personnel, directors and promoters, according to the Securities and Exchange Board of India’s interim order on its website.

Shares of the country's largest carmaker fell as much as 1.9 percent to Rs 7,206 after its sales declined for third month in a row.

Key sales highlights:

• Mini segment (WagonR, Alto) sales fell 9 percent to 34,971 units (YoY)
• Compact (Swift, Celerio, Ignis, Baleno, Dzire) sales rose 1.7 percent to 74,011 units
• Mid-size (Ciaz) sales rose 11.5 percent to 6,246 units
• Utility vehicles (S-Cross, Vitara Brezza, Ertiga, Gypsy) sales rose 8.7 percent to 21,639 units
• Total domestic sales up 1.4 percent at 1,53,550 units versus 1,51,400 units (YoY)
• Total exports down 25.1 percent to 8,740 units versus 11,671 units (YoY)
• Total sales down 0.5 percent at 1,62,290 units versus 1,63,071 units (YoY)

Shares of the country's second largest two-wheeler maker swung between gains and losses after its sales rose 17 percent to 5.02 lakh unites (YoY).

Key sales highlights (YoY):

• Domestic motorcycle sales rose 12 percent to 2.73 lakh units.
• Motorcycle exports rose 29 percent to 1.58 lakh units.
• Overall Motorcycle sales rose 17 percent to 4.31 lakh units.
• Domestic commercial vehicle sales rose 12 percent to 38,474 units.
• Commercial vehicle exports rose 32 percent to 32,596 units.
• Overall commercial vehicle sales rose 20 percent to 71,070 units.
• Overall domestic sales rose 11 percent to 3.12 lakh units.
• Overall exports rose 30 percent to 1.91 lakh units.

Shares of the Mumbai-based private sector lender recovered and rose as much as 6.5 percent, the most in over five months, to Rs 195.55 after it disclosed NPA numbers for the September quarter.

• Gross NPA at 1.35 percent for Q2FY19 versus 1.82 percent as of Q2FY18
• Loans and advances grew by 61.5 percent (YoY)
• Deposits grew 41.0 percent (YoY) aggregating to Rs 2.23 lakh crores as on September 30, 2018.
• CASA Ratio stood at 33.8 percent.
• Bank has a liquidity coverage ratio of 101 percent as on September 30, 2018

Shares of the country's newest bank fell as much as 20.2 percent to record low of Rs 451.20 after the Reserve Bank of India placed restrictions on the bank to open new branches as it failed to lower promoter holding to meet the cap prescribed by the regulator.

Bandhan Bank was unable to bring down the shareholding of the non-operative financial holding company to 40 percent within three years of starting operations. The condition was mentioned in the RBI’s February 2013 licensing guidelines. The bank was granted in-principle approval in April 2014 and began operations a few months later.

Indian equity benchmarks declined dragged by private lenders like Kotak Mahindra Bank and Yes Bank.

The NSE Nifty 50 Index fell 0.4 percent or 43 points to 10,888 and the S&P BSE Sensex declined 0.2 percent or 75 points to 36,140.

Eight of 11 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Private Bank Index's nearly 2 percent drop. On the other hand, the Nifty FMCG Index was top gainer, up 0.6 percent.

Mid- and small-cap shares were underperforming their larger peers as the Nifty Midcap 100 Index slumped 1.5 percent and the Nifty Smallcap 100 Index tumbled 1.8 percent.

Gross non-performing assets of the bank stood at 1.35 percent as a percentage of total advances compared with 1.82 percent in the same quarter last years, Yes Bank said in an exchange filing.

• Gross NPA at 1.35 percent for Q2FY19 versus 1.82 percent as of Q2FY18
• Loans and advances grew by 61.5 percent (YoY)
• Deposits grew 41.0 percent (YoY) aggregating to Rs 2.23 lakh crores as on September 30, 2018.
• CASA Ratio stood at 33.8 percent.
• Bank has a liquidity coverage ratio of 101 percent as on September 30, 2018

In the aftermath of Friday's 70 percent plunge in stock price, Infibeam's management spoke to BloombergQuint and said the company's fundamentals remain strong and some WhatsApp group carrying erroneous messages have caused panic.

Key highlights of the conversation:

• Fundamentals of the company remain strong as ever
• Some WhatsApp group carrying erroneous messages have caused panic
• Rumours floating on WhatsApp are baseless
• Will remain transparent in terms of information sharing with investors
• Concerned over rumours spreading over WhatsApp
• Neither promoter nor promoter group has sold or liquidated any shares
• Processed transactions worth more than Rs 10,000 crore last quarter
• None of the pledged shares have been liquidated

Indian rupee opened lower at 72.66 per dollar against Friday's close of 72.49 after the government reduced its borrowing for the second time in the current fiscal year.

Meanwhile, the Reserve Bank of India will infuse Rs 36,000 crore of liquidity through bond purchases in October. Bond purchases will be spread across three tranches in second, third and fourth week and will be based on liquidity assessment and expected pick up in currency in circulation.

• RBI to infuse Rs 36,000 crore through bond purchases in October
• Bond purchases spread across three tranches in second, third and fourth week
• Bond purchases based on liquidity assessment, expected pick up in currency in circulation

Government bonds may find support after the government reduced its borrowing for the second time in the current fiscal year. However, the surging oil prices could temper the good cheer.

Borrowing is just one part of the picture. There are genuine concerns on fiscal health right from GST collections, direct taxes, divestment targets etc. Kotak Mahindra Bank is calling for yield to stay in a range of 7.75-8.25 percent in the rest of the year.

In the currency market, implied opening from forwards suggest the pair may open at 72.70 a dollar. With high oil prices, there is little in terms of support for the rupee and it may trade in a range of 72.50-73 a dollar in the day.

Macquarie on ITC

• Upgrades to ‘Outperform’ from ‘Neutral’; Raises target price to Rs 367 from Rs 304.
• See improving cigarette volume trends based on channel checks.
• Expect higher visibility of margin improvement in FMCG business.
• Believe potential double-digit cigarette EBIT growth will lead to valuation re-rating.

JPMorgan on Bandhan Bank

• Maintains ‘Neutral’ for target price of Rs 670.
• RBI curbs new branch opening pending clarity on stake reduction plan.
• Promoter needs to take exception approval from regulators to reduce stake.
• Above regulation should not be a drag on operating growth near term.

PhillipCapital on Engineers India

• Maintains ‘Neutral’; Raises target price to Rs 150 from Rs 145.
• HPCL order much anticipated and far higher than estimates.
• Expect margins to be higher for the order as it is a greenfield project.
• Raise earnings estimate by 4 percent and 9 percent for FY19 and 20 respectively.

Brokerages On Indian Hotels

UBS

• Maintains ‘Buy’; Raises target price to Rs 175 from Rs 170.
• Taj Mansingh at higher bid but still strategically important.
• Increase earnings estimate to include Mansingh’s estimates.
• Core business generates superior operating RoCE.

JPMorgan

• Maintains ‘Overweight’ for target price of Rs 150.
• Increased revenue share from Mansingh largely in line with expectations.
• Expect improving hotel cycle to drive strong earnings growth.

• Nifty futures end trade at 10,954, with a premium of 24 points.
• Maximum open interest on call side at 11,000 strike price call option, OI at 24.3 lakh shares.
• Maximum OI on put side at 11,200 strike put option, OI at 29.4 lakh shares.

Insider Trades

• Bajaj Holdings & Investment promoter Shekhar Bajaj acquired 66,400 shares from Sept. 25-26.
• Trident promoter group Lotus Global Foundation acquired 8.15 lakh shares from Sept. 26-27.
• Mannapuram Finance promoter and director VP Nandakumar acquired 14 lakh shares on Sept. 24.
• KEC International promoter acquired 50,000 shares from Sept. 26-27

(As reported on Sept. 28)

Trading Tweaks

• Indiabulls Real Estate Ltd. circuit filter revised to 10 percent
• ICRA buy back of worth Rs 84.5 crore at maximum price of Rs 3,800 per share starts today.

Bulk Deals

• Veto Switchgear Cable: Reliance Wealth Management Ltd. sold 1.15 lakh shares or 0.63 percent equity at Rs 118.92 each.

Rane Engine Valve

• TRW Automotive JV LLC sold 2.52 lakh shares or 3.54 percent equity at Rs 454 each.
• Promoter Rane Holdings acquired 2.52 lakh shares or 3.54 percent equity at Rs 454 each.

Who’s Meeting Whom

• Blue Star to meet Goldman Sachs, Aviva Life Insurance and other investors on Oct. 01.

• Automobile manufacturers will be in focus as companies will report their September sales data.
• Bandhan Bank said its promoters will look at various options, including acquisitions, to bring down shareholding in line with the Reserve Bank of India’s norms after the central bank placed restrictions on its operations.
• Infibeam Avenues says that it had given interest free unsecured loan to its wholly owned subsidiary NSI Infinium Global. These loans are short-term loans which are repayable on demand and have been utilized by the arm solely for its business and operations.
• Yes Bank’s debt instruments worth Rs 21,371 crore have been placed under ‘credit watch with developing implications’ by CARE Ratings. The instruments include infrastructure binds, tier-II bonds, additional tier-I bonds and perpetual bonds.
• Vakrangee has received an order from the Ministry of Corporate Affairs for inspection of books of accounts for three financial years.

The probe will include:

1. Resignation of its statutory auditors
2. Income tax orders
3. Tax reports for the last five years
4. Number of Vakrangee Kendras in India
5. Deposit amount, if any, collected from franchisees and
6. Shareholding structure of the company

• Aurobindo Pharma is scouting for suitable acquisitions in the domestic market for Rs 3,000 - 4,000 crore. This is as per a report in the Business Standard.
• ONGC expects to break-even in its gas business after the price hike. Chairman Shashi Shanker says that the company hopes to decide a partner for its OpAL unit by February next year. ONGC Videsh’s Managing director NK Verma also added that ONGC Videsh expects Venezuela to clear its oil dues.
• Bharat Petroleum Corporation’s board has approved setting up of facilities for production of Polyols, Propylene Glycol and Mono Ethylene Glycol at its Kochi Refinery. The estimated investment for the same is pegged at Rs 11,130 crore.
• Tata Power’s subsidiary Coastal Gujarat Power has completed the refinancing of its outstanding ECB loans amounting to Rs 5,500 crores. The company’s interest costs post this refinancing will be lessened, according to their statement.
• NMDC has hiked the prices of lump iron ore by 8.45 percent to Rs 3,850 per tonne and for fines ore by 6.4 percent to Rs 3,310 per tonne. The above mentioned price revisions took effect on Sept 26.
• Kalpataru Power Transmission has secured infrastructure orders worth Rs 1,145 crore. The company says that the orders have come for transmission lines in Africa and CIS regions and a railway infra order from the Rail Vikas Nigam Ltd.
• Dilip Buildcon’s board has approved to take strategic initiatives by way of backward and forward integration which will add value addition to the company as well as to the stakeholders.
• Ajanta Pharma’s Ranitindine Hydrochloride has received ANDA approval from U.S. FDA.
• IRB Infrastructure Developer’s arm has achieved financial closure for its Rs 2,203 crore four-laning project on the Poondiyankuppam- Sattanathapuram stretch.
• Engineers India has received orders worth Rs 5,000 crore for execution of HPCL’s Rajasthan Refinery Project. The project’s mechanical completion will be completed by October 2022.
• ONGC, Oil India: India raises gas prices by 10 percent to $3.36 per mmBtu for H2FY19; prices hiked for third consecutive time and now at three-year high.
• InterGlobe Aviation, Jet Airways and SpiceJet: Aviation turbine fuel prices for October hiked by 7 percent to Rs 76,000 per kilolitre pan India; Prices hiked for third consecutive month and now at near 5-year high.
• ITI Ltd.: Board approves DRHP for proposed follow-on public offer by the company. It looks to issue 18 crore equity shares, according to its DRHP, to raise funds for working capital requirement and for debt repayment. As per Friday’s closing price, the company can raise Rs 1,470 crore, according to BloombergQuint’s calculation. Issuing 18 crore equity shares would dilute government holding to 78.1 percent from current 93.8 percent.
• Puravankara Ltd.: Joint venture Keppel Puravankara Development Pvt. Ltd. has entered into agreements to acquire 7.635 acres site in Bangalore, from Metro Cash & Carry India Pvt. Ltd. for Rs 405 crore. The total consideration includes the cost of Rs 80 crore to construct a 1.6 lakh square feet retail-cum-office facility on the land, which will be handed over to Metro Cash & Carry. The Grade A office tower will be managed by KPDL upon completion.

• Garden Reach IPO fully subscribed after offer was extended to Oct. 01.
• Dinesh Engineers IPO was subscribed 0.34 percent on Day 1.
• Neccon Power & Infra seeks SEBI approval for Rs 273 crore IPO.
• Stove Kraft files DRHP for IPO incluses new share of up to Rs 145 crore. Promoter to sell up to 72 lakh shares.

• IL&FS to raise Rs 15,000 crore, hike borrowing limit
• Here’s what will hurt sales of auto companies in September
• India’s monsoon falls short of forecasts for a second year
• More than 800 dead in Indonesia quake and tsunami
• Target iPhones instead of rates to support rupee, says Modi adviser
• What oil at $100 a barrel would mean for the world economy
• Chief Justice of India-to-be vows to fix legal system plagued by delays
• WTO, IMF and World Bank issue emergency call for trade reforms
• Elon Musk to quit as chairman of Tesla

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,961 as of 7:28 a.m.

Stocks in Asia kicked off the final quarter in muted fashion, in a holiday-affected start to the week. Volumes are likely to be thin Monday, with Labor Day in Australia, Hong Kong’s market shut and China’s closed through Oct. 7.

Japan’s two main equity benchmarks opened mixed, while holiday-hit Australian stocks started with small losses, and Korea’s benchmark was up.

Currencies

• The Japanese yen fell less than 0.05 percent to 113.78 per dollar.
• The offshore yuan fell less than 0.05 percent to 6.8838 per dollar.
• The euro rose less than 0.05 percent to $1.1605.
• The Bloomberg Dollar Spot Index rose less than 0.05 percent to 1,182.56.

Commodities

• West Texas Intermediate crude rose 0.3 percent to $73.45 a barrel.
• Gold is at $1,191.19.
• LME copper was little changed at $6,254.50 per metric ton.

Here are some key events coming up this week:

• U.K. Conservative Party opens second day of its annual conference Monday. Prime Minister Theresa May speaks Oct. 3. In Birmingham.
• Reserve Bank of Australia policy decision Tuesday
• Reserve Bank of India monetary policy decision Friday
• U.S. employment report for Sept. also due Friday
• 10:30am: Nikkei India Manufacturing PMI for Sept., prior 51.7
• India Aug. Eight Infrastructure Industries Index, prior 6.6 percent.