Nifty Ends At Six-Month Low; Sensex Drops Over 550 Points

Indian equity benchmarks declined for the third-straight session driven by losses in private lenders led by Yes Bank. The Nifty slipped to a six-month low as investors anticipated stimulus to support businesses currently facing a slowdown.

The S&P BSE Sensex fell as much as 1.59 percent to 36,472.93 and the NSE Nifty 50 declined as much as 1.62 percent to 10,741.35. The broader markets represented by the NSE Nifty 500 Index fell 1.64 percent.

“The market is getting impatient with regards to the prospects of a stimulus package from the government and the comments made by some government officials have dimmed hopes,” said Vivek Ranjan Mishra, head (Fundamental Research) at Karvy Stock Broking, in an emailed statement. However, Misra expects the economy to stabilise in September quarter and recover in the second half.

Agreed, UR Bhat, director at Dalton Capital Advisors, adding that positive news was necessary come to ensure a directional change in the markets. “The general expectation is that the government will announce some stimulus package as there are so many opinions collected from various market participants,” he said in an interview to BloombergQuint.

The market breadth was tilted in favour of sellers. About 1,433 stocks declined and 368 shares advanced on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Realty Index’s 6.73 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.23 percent.

The government can step in for a brief period to mend investor sentiment,. That’s according to UR Bhat, director at Dalton Capital Advisors.

“The general expectation is that the government will announce some stimulus package as there is so many opinions collected from various market participants,” said UR Bhat in an interview with BloombergQuint.

Here are the other highlights from the conversation:

• No big turnaround expected in September-quarter earnings.
• Earnings has been very disappointing and global concerns such as trade war, Brexit have fueled woes.
• The non-banking and financial companies crisis continues to pester.
• Financial sector is battling with pile up of bad loans and resolutions under NCLT are not fast enough.
• Only the government can step in and support for a brief period to change market sentiment as there is no positive from anywhere.

Shares of the private lender slumped over 18 percent to Rs 53.20 each, its lowest price in since September 2013.

The trading volume was over three times the 20-day average for this time of the day, according to Bloomberg data. The relative strength index was below 30, indicating the stock may be oversold.

Recently, Yes Bank Ltd. invoked pledged shares of CG Power, acquiring 12.79 percent ownership in the company from the promoter Avantha Holdings Ltd.

CG Power hit the lower circuit for third day after a probe by a legal firm revealed that the Gautam Thapar-founded Avantha Group flagship understated its liabilities and advances made to related and unrelated parties.

Indian equity benchmarks extended their declines for the third day in a row led by losses in Yes Bank slipping to a six-year low.

The S&P BSE Sensex fell as much as 1.48 percent to 36,512.73 and the NSE Nifty 50 declined as much as 1.53 percent to 10,751.40. The broader markets represented by the NSE Nifty 500 Index fell 1.58 percent.

“The market is getting impatient with regards to the prospects of a stimulus package from the government and the comments made by some government officials have dimmed hopes,” said Vivek Ranjan Mishra, head (Fundamental Research) at Karvy Stock Broking, in an emailed statement. However, Misra expects the economy to stabilise in September quarter and recover in the second half.

The market breadth was tilted in favour of sellers. About 1,462 stocks declined and 334 shares advanced on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Realty Index’s 6.25 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.47 percent.

Shares of the oil retailers declined as oil prices extended their gains for the fifth-straight day. Brent crude rose 0.6 percent to $60.65 per barrel.

• Indian Oil fell 3.8 percent intraday to Rs 116.40 each.
• BPCL slumped 5.3 percent to Rs 310.50 apiece.
• HPCL declined 5.6 percent to Rs 225.50 each.

Shares of the media company extended decline for the third day after it fell nearly 6.2 percent to Rs 34 each.

The company’s interim Chief Executive Officer Suparna Singh stepped down, according to an exchange filing.

The Central Bureau of Investigation, on Wednesday, booked New Delhi Television Ltd. promoters Prannoy Roy and Radhika Roy and others for allegedly violating India’s foreign direct investment rules in a 2007-09 deal. The allegation has been denied by the media firm.

The Indian rupee fell 0.5 percent against the U.S. dollar. The home currency weakened to Rs 71.92 against the greenback—lowest level since December 2018.

Shares of the consumer staples company rose 3.9 percent, the most since December 2018, to Rs 2,477 each.

The company options tripled its 20-day average to 3,608 contracts, while put options rose 50 percent to 1,313 contracts.

This comes as its rival Parle Products said it may be forced to lay off up to 10,000 workers over the next one year due to slowdown in demand coupled with impact of high Goods and Service Tax rate on low-priced products meant for common man.

Shares of the country’s largest power generator extended losses for the third day after it fell 2.4 percent intraday to Rs 115.05 each.

Government accepted company’s request for surrendering coal block in Odisha. The mine was allotted for developing 1,320 MW Bilhaur thermal power plant at Uttar Pradesh, the company said in a statement adding, it’s now is being developed as a solar plant. Moreover, it has signed a power purchase agreement with the state government.

The relative strength index on the stock was below 30, indicating it may be oversold.

Shares of the cafe’-chain operator hit the upper circuit of 5 percent to Rs 76.10 each.

ITC is considering a bid to buy a stake in Coffee Day Enterprises as the nation’s biggest cigarette maker seeks to diversify its businesses, reported Bloomberg citing people familiar with the matter.

ITC received an inquiry from an intermediary on Coffee Day and there has been no progress, its spokesman said in response to Bloomberg’s query. The news is incorrect and Coffee Day is unaware of any such developments, Coffee Day said in a filing.

The stock trade at 14 times its estimated earnings per share for the coming year, according to Bloomberg data.

Shares of the specialty pharma company declined 2.8 percent intraday to a two-week low of Rs 89.05 apiece.

The company’s Virginia plant received two minor observations after U.S. Food and Drug Administration completed its inspection, according to an exchange notification.

The drugmaker’s annual general meeting is scheduled on Aug. 29. The insiders hold 42 percent stake and cut their holdings by 4.6 percent in the last six months, Bloomberg data showed.

“Investors are waiting for government to announce to some measures similar to SEBI relaxing (Foreign Portfolio Investors) norms on Wednesday,” said AK Prabhakar, research head at IDBI Capital, in an interview to BloombergQuint. However, a “major” correction from current levels is not expected from current levels, he said, adding that it was the right time to invest in quality stocks.

Prabhakar picked life insurance players, Reliance Industries, ICICI Bank and Axis Bank as his preferred bets for investing with a long-term time horizon.

Indian equity benchmarks extended their declines for the third day in a row led by losses in Yes Bank and Indiabulls Housing.

The S&P BSE Sensex fell as much as 0.62 percent to 36,832 and the NSE Nifty 50 declined as much as 0.73 percent to 10,839.10. The broader markets represented by the NSE Nifty 500 Index fell 1 percent.

“Investors are waiting for government to announce to some measures similar to SEBI relaxing (Foreign Portfolio Investors) norms on Wednesday,” said AK Prabhakar, research head at IDBI Capital, in an interview to BloombergQuint. However, a “major” correction from current levels is not expected from current levels, he said, adding that it was the right time to invest in quality stocks.

Prabhakar picked life insurance players, Reliance Industries, ICICI Bank and Axis Bank as his preferred bets for investing with a long-term time horizon.

The market breadth was tilted in favour of sellers. About 1,353 stocks declined and 330 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Realty Index’s 5.9 percent fall. On the flipside, the NSE Nifty FMCG Index was the only sectoral gainer, up 0.93 percent.

Shares of the electrical equipment maker was locked in the lower circuit after it slumped 10 to Rs 10.70 each.

Over 97 lakh shares changed hands in five bunched trades, according to Bloomberg data. Buyers and sellers were not known immediately.

The stock declined 82 percent in the past 12 months compared to a 3.6 percent fall in the Sensex.

Earlier this week, a probe by a legal firm revealed that the Gautam Thapar-founded Avantha Group flagship understated its liabilities and advances made to related and unrelated parties, among other financial irregularities.

Shares of the property developer plunged as much as 19.4 percent to Rs 138.30 each, its lowest price in over two years.

The Supreme Court has issued a notice to the company based on a petition that highlighted how DLF had suppressed key information from shareholders, according to a Businessline report. The notice was regarding judicial proceedings against DLF’s largest chunk of land-bank in Haryana, the report said.

The trading volume was more than 10 times the 20-day average for this time of the day, Bloomberg data showed.

Watch DLF Management’s response to the charges:

Shares of the engineering conglomerate snapped its two-day fall and rose 1.3 percent to Rs 1,327.45 each.

The company said a consortium including L&T Hydrocarbon Engineering bagged a ‘Large’ Engineering, Procurement, Construction and Installation order from Saudi Aramco, in an exchange filing. L&T classifies contracts worth Rs 2,500-5,000 crore as ‘Large’.

The stock traded 19 times its 20-day average for this time of the day, Bloomberg data showed.

Shares of the non-banking lender declined as much as 7.6 percent, its biggest intraday slide since September last year. to Rs 428.35 each.

Around 6.7 percent or 3.4 crore shares changed hands in seven block deals, according to Bloomberg data. Buyers and sellers were not known immediately.

Bloomberg earlier reported an undisclosed institutional shareholder of the company has sought to raise between $200-211 million through an offering of about 3.37 crore shares, according to terms for the deal obtained by Bloomberg. The offering will be at priced between Rs 425.15-449.50 per share, the report added.

Indian equity indices extended their decline for the third day in a row after declines in Tata Steel and private banks.

The S&P BSE Sensex fell as much as 0.33 percent to 36,943.66 and the NSE Nifty 50 declined as much as 0.37 percent to 10,880. The broader markets represented by the NSE Nifty 500 Index fell 0.47 percent.

The market breadth was tilted in favour of sellers. About 1,008 stocks declined and 457 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Metal Index’s 1.31 percent fall. On the flipside, the NSE Nifty FMCG Index was the only sectoral gainer, up 0.38 percent.

August Futures

• Nifty futures closed at 10,932.6, premium of 13.9 points versus 11 points.
• Nifty futures open interest up 3 percent, adds 5 lakh shares in open interest.
• Bank Nifty futures closed at 27,739.8, premium of 20.8 points versus 12.6 points.
• Bank Nifty futures open interest up 9.5 percent, adds 1.3 lakh shares in open interest.

Options

• Nifty PCR at 0.94 versus 1.12 (across all series).

Nifty Weekly Expiry Aug. 22

• Max open interest on call side at 11,100 (30.9 lakh shares).
• Max open interest on put side at 10,900 (13 lakh shares).
• Max open interest addition seen in 11,000C (+13.6 lakh shares), 11,100C (+12.2 lakh shares).
• open interest shedding seen at 11,000P (-7.5 lakh shares), 10.950P (-3.5 lakh shares).

Nifty Monthly Expiry Aug. 22

• Max open interest on call side at 11,000 (33.2 lakh shares).
• Max open interest on put side at 11,000 (35.3 lakh shares).

The Indian rupee opened lower against the U.S. dollar. The home currency weakened as much as 0.13 percent to Rs 71.64 against the greenback.

• NTPC: Government accepted company’s request for surrendering coal block in Odisha. The mine was allotted for developing 1,320 MW Bilhaur thermal power plant at Uttar Pradesh, the company said in a statement adding, it’s now is being developed as a solar plant. Moreover, it has signed a power purchase agreement with the state government.
• NMDC cut its lump ore and fine prices by Rs 200 per tonne. Lump ore will be priced at Rs 2,900 per tonne and fine priced at Rs 2,660 per tonne effective since Aug. 20.
• Kansai Nerolac Paints enters a business transfer agreement with Polygel, Nerofix Promoters of Polygel. As per the arrangement, the adhesives, construction chemicals and sealants business of Polygel would be transferred to Nerofix as a going concern on slump sale basis upon payment of the proposed transfer consideration of Rs 20 crore by Nerofix.
• LIC Housing Finance: An undisclosed institutional shareholder of the company has sought to raise between $200-$211 million through an offering of about 3.37 crore shares, according to terms for the deal obtained by Bloomberg. The offering will be at priced between Rs 425.15-449.50 per share, the terms show.
• MSTC: Uttar Pradesh government has extended the agreement with for e-tendering cum e-auction of minor minerals blocks (sand and morrum) and insipu rocks blocks for another one year. Signed two selling agency agreements with Chhattisgarh State Power Generation and Jindal Power, with a combined projected volume of business estimated to be Rs 115 crore.
• Future Enterprises clarified that post the investigation Directorate of Revenue Intelligence has issued show cause notice in the matter. The company said that it is confident of no violation of any regulations for imports of garments under South Asian Free Trade Area Rules.
• HPCL: Chief Financial Officer R Kesavan said that the company will fund Rs 32,000 crore of its capital expenditure plan via debt and the debt ratio is expected to be below 2:1 at the peak of capex. He also stated that the state refiner plans to spend Rs 74,200 crore on capex for the next five years. (Bloomberg News)
• Coffee Day Enterprises clarified that news of ITC picking up stake in the company is factually incorrect. ITC stated that they received queries from an intermediary on Cafe Coffee Day. However, no progress has been made on the matter.
• BHEL: India Ratings & Research affirmed company’s long-term rating at ‘AA+’ but changed the outlook from ‘Stable’ to ‘Negative’.
• Dilip Buildcon: Board to consider the proposal of divestment of wholly owned arms to one or more potential investors on Aug. 26.
• DHFL defaulted in payment of non-convertible debentures interest worth Rs 50 lakh, which was due on Aug. 20.
• Infosys expanded its partnership with Google Cloud to become a Google Cloud Managed Service Provider.
• Redington India: ICICI Prudential Life Insurance decreased stake from 7.4 percent to 5.3 percent in the company.
• V-Mart has opened three new stores in Nagaland, Jharkhand and Rajasthan.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell nearly 0.15 percent to 10,916 as of 8:30 a.m.

Stocks in Asia drifted Thursday after minutes from the U.S. Federal Reserve’s latest meeting did little to alter expectations for more interest-rate cuts. Japanese shares nudged higher, along with gains in Australia. South Korea opened flat.

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