Sensex, Nifty Fall For Second Straight Session On Weak Global Cues

Indian equity benchmarks fell over a percent for second day in a row mirroring loss in other Asian and European markets on worries over slowing global economic growth.

The S&P BSE Sensex fell 1.05 percent or 378 points to 35,514 and the NSE Nifty 50 Index dropped 1.11 percent or 120 points to 10,672.

Worries over global growth grew after the iPhone maker cut its first-quarter guidance for the first time in almost two decades, citing an unforeseen slowdown in China and fewer upgrades to its flagship mobile device. U.S. equity futures slumped over 1.5 percent while European markets — DAX, CAC40 and FTSE 100 dropped up to 1 percent.

Back home, seventeen of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Metal Index's 2.35 percent decline. On the flipside, S&P BSE Telecom Index was top gainer, up 0.6 percent.

Mid- and small-cap shares also faced selling pressure as the S&P BSE MidCap Index tumbled 1 percent and the S&P BSE SmallCap Index declined 0.6 percent.

• Tube Investments of India: The Chennai-based fabricate metal products maker rose as much as 11 percent to Rs 392. Trading volume was more than 19 times its 20-day average.
• Hatsun Agro: The Chennai-based dairy products maker rose as much as 10 percent, the most in over a month, to Rs 695. Trading volume was more than 14 times its 20-day average.
• Sheela Foam: The Ghaziabad-based mattress maker fell as much as 3.81 percent to Rs 1,410. Trading volume was more than seven times its 20-day average.
• KNR Constructions: The Hyderabad-based construction company rose as much as 7 percent to Rs 229.50. Trading volume was more than six times its 20-day average.

Indian equity benchmarks extended decline led by HDFC twins, Larsen & Toubro, Reliance Industries and TCS.

The Sensex fell 0.90 percent or 328 points to 35,563 and the NSE Nifty 50 Index dropped 1 percent or 106 points to 10,686.

Sixteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal Index's 1.85 percent decline. On the flipside, S&P BSE Realty Index was top gainer, up 0.21 percent.

Mid- and small-cap shares were also witnessing selling pressure as the S&P BSE MidCap Index fell 0.64 percent and the S&P BSE SmallCap Index declined 0.2 percent.

The overall market breadth was negative as 1,421 stocks were declining while 947 were advancing on the BSE.

More than Rs 190 crore notionally wagered on TCS February 1,700 put option contract at an average premium of Rs 22.90.

The strike level is more than 10 percent below the last traded price of Rs 1,905.

Over 10 lakh shares were added to the open interest which stood at 10.02 lakh shares on the National Stock Exchange, according to exchange data.

• Aditya Birla Capital has 30 lakh shares change hands in a block. Stock down 1.2 percent at Rs 98.10.
• Gujarat State Petronet has 14.30 lakh shares change hands in a block. Stock down 0.43 percent at Rs 175.30.
• ONGC has 30 lakh shares change hands in two block deals. Stock down 2.79 percent at Rs 142.95.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Delhi-based company declined for second day in a row and fell as much as 4 percent to Rs 20,305 after Royal Enfield reported a 13 percent slump in sales on a yearly basis to 58,278 units in December, according to its stock exchange filing.

The stock has slumped 12.46 percent in two days posting its biggest two-day decline since Oct. 5.

Trading volume was almost six times its 20-day average, according to data compiled by Bloomberg.

As many as 8,525 shares changed hands on BSE compared with an average of 4,700 shares traded daily in the past two weeks, according to information on BSE's website.

Indian equity benchmarks extended losses led by declines in HDFC twins, ONGC, Larsen & Toubro and Reliance Industries.

The S&P BSE Sensex fell 0.4 percent or 145 points to 35,747 and the NSE Nifty 50 Index dropped 0.53 percent or 57 points to 10,736.

Fifteen of 19 sector gauges compiled by BSE were trading lower led by losses in S&P BSE Oil & Gas Index's 1.4 percent decline. On the flipside, S&P BSE Fast Moving Consumer Goods Index was top gainer, up 0.5 percent.

Overall market breadth was negative as 1,169 stocks were declining while 928 were advancing on the BSE.

Shares of the Noida-based job posting website operator snapped its seven-day losing streak and rose as much as 5 percent to Rs 1,503.

Trading volume was almost triple its 20-day average, according to data compiled by Bloomberg.

Over 9,432 shares changed hands on the BSE compared with an average of 5,009 shares traded daily in the past two weeks, according to information on BSE's website.

Nifty's 10,500 put option contract was among the most active put option contracts on the National Stock Exchange.

Over 2.32 lakh shares were reduced from the open interest which stood at over 38.40 lakh shares.

Shares of the Vadodara-based drugmaker rose as much as 2.2 percent to Rs 593.15 after it received U.S. drug regulator's nod for Pramipexole Dihydrochloride extended-release tablets in several strengths.

Alembic Pharma in an exchange filing said:

• The drug is therapeutically equivalent to reference listed drug product (RLD) Mirapex ER Tablets.
• Drug is indicated for treatment of Parkinson's disease
• The tablet had estimated market size of $38.6 million for twelve months ending December 2017 according to IQVIA
• Alembic has a cumulative total of 84 ANDA approvals

Shares of the country's largest wireless telecom services provider fell as much as 5.2 percent, the most since Nov. 30, to Rs 34.85 after Telecom Regulatory Authority of India’s (TRAI) subscriber data showed loss of 73.6 lakh users in October.

FY19 can see significant improvement in profitability for Corporate banks can see significant improvement in profitability in FY19, Mahesh Patil, co-chief investment officer at Aditya Birla Sun Life AMC told BloombergQuint in an interview.

Key highlights of the conversation:

• Emerging market outlook looking better than U.S.
• Fall in U.S. markets will impact emerging markets including India.
• From earnings point of view we are coming from a very low base.
• Slower U.S growth, earnings and elections to impact Indian markets.
• Fall in bond yields can help boost profits this quarter.
• Credit cost seen decreasing in FY19.
• Banks with stronger management and balance sheets to do well.
• Banking and financials will continue to show steady growth.
• Consumption sector to do well before elections.
• Consumption growth in India will continue to be steady for some time.
• Consumer durables look reasonable at current valuations.
• Like selective names in capital goods sector.
• Infrastructure sector has shown improvement, Capex recovery seen going ahead.
• Global growth to be slightly weaker than expected earlier.
• Overall expectations in IT sector should be steady; Not have a negative view on the sector.
• Factors which were impacting growth have improved and are correcting.
• Four-wheeler and two-wheeler growth to come back after few months.

Shares of oil retailers fell after Brent crude surged as much as 5.13 percent to $56.56 per barrel in yesterday's session.

• Indian Oil fell as much as 2.61 percent to Rs 134.10
• Bharat Petroleum declined 5.57 percent to Rs 346.75
• Hindustan Petroleum slipped 4.67 percent to Rs 244.70

Shares of Dena Bank slumped 19.38 percent, the most in over ten years, to Rs 14.35 and Vijaya Bank shares dropped 7.54 percent to Rs 47.20 while Bank of Baroda gained 3.39 percent to Rs 123.40 after the government announced share swap ratio for the merger of three banks.

For every 1,000 shares of Dena Bank worth Rs 10 each, Bank of Baroda will issue 110 shares of Rs 2 each, the lender said in a stock exchange notice. Also, Vijaya Bank’s shareholders will get Bank of Baroda’s 402 shares of Rs 2 each for every 1,000 shares of Rs 10.

As per yesterday's closing price, the swap ratio implies that Dena Bank has been valued at a discount of 27 percent and Vijaya Bank has been valued at a discount of 6 percent.

Indian equity benchmarks edged lower led by declines in HDFC Bank, Larsen & Toubro and ONGC.

The S&P BSE Sensex fell 0.30 percent or 108 points to 35,784 and the Nifty 50 Index dropped 0.35 percent or 37 points to 10,755.

Thirteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Oil & Gas Index's 1 percent decline. On the flipside, S&P BSE Realty Index was top gainer, up 0.3 percent.

Mid- and small-cap shares were trading flat as both the S&P BSE MidCap and S&P BSE SmallCap Indices were trading little changed.

Rupee opened lower at 70.29 per dollar against yesterday's close of 70.17.

The local unit fell as much as 0.24 percent or 17 paise to 70.34 against the greenback.

The Indian rupee is likely to extend Wednesday's fall on concerns that global growth is slowing down after Apple Inc cut its revenue forecast for the first time in two decades.

Implied opening from forwards suggest the spot may start trading at 70.25 a dollar. Dealers expect the pair to be in a range of 70.15-70.65 a dollar.

In the sovereign bond market, the up to Rs 10,000 crore debt purchase via open market operation will be in close focus.

The assurance of liquidity is helping keep the sentiment calm. Yield on the 10-year note fell six basis points in the last session. For today, dealers see the benchmark note yield in the range of 7.30-7.40 percent.

Stewart & Mackertich on Federal Bank

• Initiated ‘Buy’ with a price target of Rs 121.
• Expanding reach beyond Kerala, to give bank the much-needed growth and diversification.
• Increase in Net Banking to further reduce cost to income ratio.
• Positives: clean books, RoE improvement and focus on various verticals.

HSBC on Indian Tractor Industry

• Tractor growth is slowing down, but still remains healthy led by few key states.
• Channel inventory is even lower than previous year and EMI collections robust.
• Contrary to market fears, rural demand remains robust.
• Escorts: Maintained ‘Buy’; hiked price target to Rs 980 from Rs 950.
• M&M: Maintained ‘Buy’; cut price target to Rs 960 from Rs 980.

Morgan Stanley on Bank of Baroda

• Maintained ‘Underweight’ with a price target of Rs 95.
• Announced swap ratios implies 27 percent and 6 percent lower valuation for Dena Bank and Vijaya Bank respectively.
• Expect 30 percent dilution for BoB and trailing BVPS accretion of around 15 percent.
• Expect BoB to see material moderation in credit costs, but PPoP (pre-provisioning operating profit) margin recovery will be relatively.

JPMorgan on Bank Of Baroda

• Maintained ‘Neutral’ with a price target of Rs 100.
• Merger swap ratio alleviates pricing concerns.
• Merger synergies will take a long time to play out.
• Believe next round of PSB mergers is likely to follow only post-elections.

Citi on Godrej Consumer

• Maintained ‘Neutral’ with a price target of Rs 785.
• Company is taking steps to regain earnings momentum.
• Expect slight improvement in the second half; business volatility should continue.
• Innovation segment to contribute 10-11 percent of total sales given aggressive moves by company.

Morgan Stanley on Telecom

• Jio continued to garner disproportionate share in industry additions.
• As smaller operators are left with no subs it will be interesting to see market share shifts.

• Nifty January futures closed trading at 10831, premium of 38 points.
• Max open interest for January series at 11,200 strike value call (open interest at 32 lakh shares)
• Max open interest for January series at 10,500 strike value put (open interest at 40.7 lakh shares)

Who’s Meeting Whom

• JMC Projects to meet Sundaram AMC on Jan. 3.

Bulk Deals

Triveni Turbine

• Nalanda India Fund sold 51.5 lakh shares or 1.56 percent equity at Rs 103 each.
• SBI MF acquired 51.3 lakh shares or 1.55 percent equity at Rs 1,030 each.

Trading Tweaks

• ONGC ex-date for share buy back.
• Techno Electric & Engineering Company record date for share buy back.
• Kellton Tech Solutions, Axtel Industries to move in to ASM Framework.
• Kellton Tech Solutions price band revised to 10 percent.

Insider Trading

• Confidence Petroleum India promoter Confidence LPG Bottling acquired 1.33 lakh shares from Dec. 28-31.
• Jindal Stainless promoter Abhuday Jindal sold 24,000 shares from Dec. 31-Jan. 1.

• Reliance Jio’s active subscribers increased by 84.6 lakh – lowest since June 2018.
• Airtel’s active subscribers increased for the first time in four months by 33.7 lakh.
• Vodafone Idea’s active subscribers fell by 30.1 lakh – for sixth straight month.
• Reliance Jio was the only private player to add Rural Subscribers in October
• Rural Subscribers of Jio increased by 64 lakh, i.e., 61 percent of net additions.
• Telecom operators yet to see the impact of minimum recharge pack introduction and new KYC process. Impact to be visible from the month of Nov’18.

• Tata Power: Maharashtra Electricity Regulatory Commission gave the green signal to Mumbai Transport Undertaking ‘BEST’ to extend its existing 667MW power purchase agreement with the company for five years till March 2024. This power will be supplied from Tata’s Trombay Thermal and Hydro Plants.
• Asian Granito clarified that it has already paid Rs 3.5 crore differential duty under protest based on the findings of Directorate of Revenue Intelligence and cannot assess the impact of such default at this stage.
• Advanced Enzymes Technologies: Piyush Rathi resigned from Chief Business Ofiicer’s post with effect from Jan. 2.
• Equitas Holdings: Equitas Small Finance Bank hiked its interest rate across various tenors with effect from January 1. For deposits from Rs 30-50 crore the rate stands at 7.5 percent.
• Bank of India’s board approved increasing authorized capital from Rs 3,000 crore to Rs 6,000 crore and capital raising plans via equity shares and tier-I and tier-II capital bonds, while the shareholders have given their nod in respect issue of preferential shares to the government for Rs 10,086 crores.
• Autoline Industries entered into an investment contract with IndiaNivesh Renaissance Fund wherein the fund will invest Rs 35 crore in the company.
• Jindal Steel and Power named Sudanshu Saraf as CEO of steel operations with effect from Jan. 1.
• S Chand and Company extended its first tranche investment from Dec. 31 to Jan. 31 due to certain precedent conditions not yet completed by its target company Chetna Publications LLP.
• ICRA revised its outlook for Motherson Sumi Systems from ‘Positive’ to ‘Stable’ across various rated instruments worth Rs 1,808 crore.
• Indian Oil Corporation said it did not plan to recover the losses incurred due the government’s decision in October asking the fuel retailers to cut gasoline and diesel prices by Rs 1 per liter says Chairman Sanjiv Singh. (Bloomberg News)

• Bank of Baroda announces swap ratios for three-way merger
• Reliance Jio adds over 1 crore customers in October even as rivals struggle
• Oil jumps as Saudis cut exports, U.S. equities regain ground
• RBI forms expert committee for MSME sector led by UK Sinha
• War of words between government, opposition in Lok Sabha over Rafale
• RBI blinks on MSME debt, allows restructuring
• Apple’s iPhone warning comes years too late
• Auditor seeks details of probe into Infibeam’s merger with Avenues India
• What to expect from oil in 2019
• District courts: Another new tool for an age-old problem?
• A bad loan farce gets another rerun in India

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.32 percent or 35 points to 10,867 as of 7:31 a.m.

U.S. stock-index futures tumbled and Asian stocks looked set to decline after Apple Inc. added to global growth concerns by cutting its guidance. The yen surged as investors flocked to safe havens.

Apple suppliers will come under pressure after the iPhone maker cut its first-quarter guidance citing an unforeseen slowdown in China and fewer upgrades to iPhone models.

Australian shares gained at the open as oil producers rallied after a report that Saudi Arabia lowered oil exports, fueling a surge in the price of crude and lifting U.S. energy shares. Treasuries advanced and won’t trade in Asia Thursday as Japanese markets are shut.

Stocks

• Australia’s S&P/ASX 200 Index rose 0.9 percent.
• Futures on Hong Kong’s Hang Seng Index rose 1.3 percent.
• S&P 500 futures dropped 1.2 percent. The S&P 500 rose 0.1 percent.

Currencies

• The yen gained 1.6 percent to 107.14 per dollar.
• The offshore yuan was stable at 6.8851 per dollar.
• The Bloomberg Dollar Spot Index climbed 0.3 percent Wednesday.
• The euro was at $1.1346.
• The British pound traded at $1.2539, down 0.5 percent.

Commodities

• West Texas Intermediate crude fell 1 percent to $46.10 a barrel, trimming a 2.5 percent advance.
• Gold futures rose 0.4 percent to $1,289.27 an ounce.

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