Sensex, Nifty End Lower For Second Day

Indian equity benchmarks ended lower for the second day, erasing morning gains, after the tensions between India and Pakistan escalate.

The S&P BSE Sensex ended 68 points or 0.19 percent lower at 35,905 after rallying nearly 400 points intraday. The NSE Nifty 50 Index ended at 10,806.65, down 0.26 percent.

The market breadth was tilted in favour of sellers. About 942 stocks advanced and 792 shares declined on National Stock Exchange.

Seven out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Media Index’s 0.88 percent decline. On the flipside, the NSE Nifty PSU Bank Index was the top sectoral gainer, up 0.52 percent.

Rain Industries

• Stock fell as much as 10 percent to Rs 97.65.
• Trading volume was more than triple its 20-day average.

Bharat Dynamics

• Stock rose as much as 17.2 percent to Rs 294.80.
• Trading volume was almost 13 times its 20-day average.

Merck

• Stock rose as much as 16.9 percent to Rs 3,400.
• Trading volume was almost 10 times its 20-day average.

Rain Industries swung to loss during the three months ended December.

Key Earnings Highlights (Q4, CY18 YoY)

• Revenue up 9.5 percent to Rs 3444 crore.
• Net loss at Rs 139.1 crore versus net profit of Rs 307.2 crore.
• Ebitda down 82.3 percent to Rs 117.9 crore.
• Margin at 3.4 percent versus 21.9 percent.
• Other Expenses up 39 percent to Rs 906.6 crore.
• Raw materials as percent of sales to 51 percent versus 42 percent.

Rising tensions between India and Pakistan rippled across markets Wednesday, sending stocks and futures lower from Asia to Europe.

Shares of Max India halted a six-day gaining streak and declined as much as 8 percent to Rs 75.80.

Max India approved the divestment of entire stake of 51 percent in Max Bupa Health Insurance to True North Fund for Rs 511 crore, according to its exchange filing. The proposed transaction, subject to regulator and shareholder approvals, has valued Max Bupa at an enterprise value of Rs 1,001 crore.

The stock is trading 37 percent below the Bloomberg consensus one-year target price.

Indian equity benchmarks recovered after erasing morning gains.

Shares of Minda Corp rose as much as 10.8 percent, the most since Oct. 17, 2018, to Rs 139.50.

Trading volume was 14.3 times its 30-day average, Bloomberg data showed. Minda Corp traded at 17 times its earnings per share for the coming year.

Dolat Capital Market’s Head of Equities and Research, Amit Khurana said that he does not expect a major downside in the markets based on the current situation amid tensions between India and Pakistan.

“Based on the positioning for the market that we are at present, we don't see a major downside situation for the markets. These are just just momentary reactions to the news flow. There is not too much of a cause to worry,” Khurana told BloombergQuint in an interaction.

Khurana advised investors not to make very aggressive allocations and suggests investors wait and watch on how the situations turn out.

Indian equity benchmarks erased gains. Sensex fell nearly 600 points from day’s high and Nifty surrendered 10,800.

Pakistan’s equity benchmark KSE100 Index fell over 1,000 points 3.4 percent intraday, the most since Dec. 03, 2018.

• Indian equity benchmarks traded off day’s high.
• The S&P BSE Sensex Index traded nearly 200 points higher at 36,164 after jumping nearly 400 points intraday and the NSE Nifty 50 traded below 10,900.
• The market breadth, however, was tilted in favour of buyers. About 1,337 stocks advanced and 325 shares declined on NSE.

The Indian rupee reversed gains and depreciated as much as 0.26 percent to 71.25 against the U.S. dollar.

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

Premium on the contract fell 229.75 percent to Rs 19.95. Over 58,500 lakh shares were added to the open interest which stood at over 43.64 lakh shares.

Shares of BEML resumed rally after a one-day blip. The stock rose as much as 3.6 percent to Rs 852.95.

The company received contract for seven metro train sets of six cars configuration to augment the metro services in Bengaluru valued around Rs 400 crore, according to its stock exchange notification.

Trading volume was 1.3 times its 30-day average, Bloomberg data showed. The stock declined 30 percent over the past 12 months compared to a 6.9 percent gain in the Sensex.

About 18 lakh shares of Gujarat Pipavav changed hands in a single block, Bloomberg data showed. Buyers and sellers were not known immediately.

Shares of Wipro fell as much as 2.2 percent to Rs 379.15 after rallying for five consecutive trading sessions, its longest gaining streak in nearly a month.

Trading volume as more than triple its 20-day average, Bloomberg data showed. The stock traded at 19 times its estimated earnings per share for the coming year.

Shares of Allahabad Bank, Corporation Bank and Dhanlaxmi Bank gained after the Reserve Bank of India has decided to remove the lenders from the list of banks placed under its Prompt Corrective Action framework.

Indian equity benchmarks opened higher after declining in yesterday’s trade.

The S&P BSE Sensex rose as much as 0.65 percent to 36,206 and the NSE Nifty 50 Index rose as much as 0.53 percent to 10,892.20.

The market breadth was tilted in faovur of buyers. About 991 stocks advanced and 357 shares declined on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index’s 1.01 percent gain. On the flipside, the NSE Nifty IT Index was the only sectoral loser, down 0.36 percent.

The Indian rupee traded a little changed at 71.10 against the U.S. dollar.

The home currency fell on Tuesday after tensions escalated between India and Pakistan after the former said its jets destroyed a major terrorist camp in Pakistan.

Sovereign bond trades will access the Reserve Bank's announcement of open market debt purchases for March.

The central bank has decided to buy bonds under open market operations for an aggregate Rs 25,000 crore during the first fortnight of March via two auctions of Rs 12,500 crore each, it said in a statement late on Tuesday.

The liquidity conditions will continue to be monitored and depending on the assessment, RBI will consider further liquidity operations and the choice of instruments, the central bank added. The yield on the new 10-year bonds ended one basis point higher on Tuesday to 7.42 percent.

F&O Cues

• Nifty February futures closed trading at 10828, discount of 7 points.
• Max open interest for Feb. 28 series at 11,000 Call, open interest at 43 lakh shares.
• Max open interest for Feb. 28 series at 10,400 Put, open interest at 29.2 lakh shares.

Stocks In F&O Ban

In Ban:

• Adani Enterprises
• Adani Power
• IDBI Bank
• Jet Airways
• Reliance Power

Out of Ban:

• Allahabad Bank

Put-Call Ratio

• Nifty PCR at 1.4 versus 1.46.
• Bank Nifty PCR at 1.18 versus 1.37.

Credit Suisse on Wipro

• Downgraded to ‘Underperform’ from ‘Neutral’; cut price target to Rs 320 from Rs 370.
• Recent rally captures margin improvement story; Margins to remain a bit of volatile.
• Slowest growing IT company for the last ten years.
• Wipro deserves to trade at reasonable discount to peers given slower growth and lower margins.

Motilal Oswal on Sanofi India

• Maintained ‘Buy’; hiked price target to Rs 7,000 from Rs 6,850.
• Revenue blip a function of high base; traction in key therapies intact.
• Secondary sales reflect strong outperformance in anti-diabetic portfolio.
• Remain positive on the back of volume-led better-than-industry growth.

HSBC on Kajaria

• Maintained ‘Buy’; hiked price target to Rs 630 from Rs 600.
• Market share gains to continue as unorganised players face liquidity issues.
• Expect strong performance to continue.
• Softer gas prices should be a tailwind on margins from March quarter.

Edelweiss on Jindal Steel and Power

• Maintained ‘Buy’ with a price target of Rs 200.
• Spotted clear difference in the operating environment in Angul plant.
• Cost efficiencies likely to result in savings of up to Rs 2,000 per tonne in 2019-20.
• Expect JSPL to fare better than peers on the back of volume growth.

Deutsche Bank Research on TVS Motor

• Upgraded to ‘Hold’ from ‘Sell’; cut price target to Rs 455 from Rs 485.
• Upgrade rating on underperformance; Cut EPS estimates to factor change in accounting standards.
• Believe TVS is approaching a sweet spot which could lead to margin expansion.
• Stronger market share is the key to margin expansion.

Deutsche Bank on Cement Makers

• Ramco Cements: Upgraded to ‘Buy’ from ‘Hold’, hiked price target to Rs 750 from Rs 630.
• Ramco the preferred play on South India followed by ACC.
• Margin cycle turning favorable in South India.
• High stress levels for South Indian capacities to drive up prices.
• Outlook for other regions is subdued near term, positive longer term.

Antique on Oberoi Realty

• Initiated ‘Buy’ with a price target of Rs 630
• Dominant Player in Mumbai, with healthy rental income and strong balance sheet.
• Diversified product portfolio; good mix of residential/annuity assets in pipeline.
• Debt can easily be serviced; cost of debt is quite low.
• See significant upside with NAV of Rs 525 per share and potential volume growth.

• Indiabulls Integrated Services price band revised to 5 percent.

Stocks Moving Into Shot-Term ASM Framework

• G Petrochemicals
• Zee Media Corporation
• IFB Agro Industries
• IIFL Holdings
• JBF Industries
• Mercator
• AXISCADES Engineering Technologies
• MT Educare
• Skipper
• Manpasand Beverages
• Spencer's Retail
• GVK Power & Infrastructure

Earnings To Watch

• Merck India
• KSB
• Rain Industries
• Vesuvius India

Earnings Reaction To Watch

Sanofi India (Q4CY18, YoY)

• Revenue up 8.4 percent to Rs 726.4 crore.
• Net profit up 4.3 percent to Rs 79.3 crore.
• Ebitda up 2.2 percent to Rs 137.3 crore.
• Margin at 18.97 percent versus 20 percent.
• Declares dividend of Rs 66 per share.

• Max India approved the divestment of entire stake of 51 percent in Max Bupa Health Insurance to True North Fund for Rs 511 crore. The proposed transaction has valued Max Bupa at an enterprise value of Rs 1001 crore. Transaction is subject to approval from both parties, IRDAI and shareholders of the company.
• The Reserve Bank of India removed Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from the Prompt Corrective Action Framework subject to certain conditions. Allahabad Bank and Corporation Bank apprised RBI of structural and systemic improvements while Dhanlaxmi Bank found to not be breaching any risk threshold under PCA framework. (Source: RBI)
• ONGC’s foreign arm, along with its joint venture partners of Mozambique Project, has entered into a long term LNG Sale and Purchase Agreement with four international players and BPCL arm. The company says these deals will take the long-term sales to more than 9.5 MMTPA of Liquified Natural Gas.
• Fitch affirmed JSW Steel’s long-term issuer default rating at ‘BB’ with a stable outlook. The affirmation follows an improvement in the company’s Ebitda and leverage in the first nine months of the financial year 2019. (Bloomberg News)
• Reliance Industries clarified on the news that company is a front-runner to take over Garden Vareli Brand as merely speculation in the media space.
• Tata Steel board approved raising Rs 4,000 crore via NCDs (with greenshoe option of up to Rs 1,000 crore).
• CG Power and Industrial Solutions clarified on the news of promoters in talks to selling their stake that they are just rumors and the company has no information on the aforementioned issue.
• MRF said that the strike has been called off in its Chennai plant. The company had stated that a large number of workmen had gone on a strike with effect from Feb. 9 and the strike was of illegal in nature.
• Unichem Lab said it will appeal against General Court’s judgement before the European Court of Justice stating that company did not conclude an anti-competitive settlement agreement with Servier. In July 2014 the commission had imposed a fine of 14 million euros.
• Time Technoplast entered into an agreement with Confidence Group to retail blast proof LPG cylinders.
• HDFC AMC board approved interim dividend of Rs 12 per share.
• NALCO said it will consider payment of interim dividend for financial year 2019 on March 1. The record date has been fixed at March 12.
• MCX recommended PS Reddy as CMD of the exchange. He will take the place of Mrugank Paranjape who will not continue his second term as the CMD of MCX and the appointment will be effective subjected to approval from the SEBI.
• IDBI Bank board appointed Hemant Bhargava as non-executive, non-wholetime chairman of the bank for a period of three years or till he continues as the CMD of LIC.
• S Chand and Company acquired remaining 26 percent stake in Chhaya Prakashani for Rs 64.24 crore. In December 2016 the company had acquired 74 percent stake in the aforementioned target company for Rs 170 crore. The company said that the rational for this investment is to expand its presence in Eastern India.
• Bharat Financial Inclusion completed eight direct assignment transaction of Rs 1,217.8 crore. With this transaction, the company has completed direct assignment transactions worth Rs 6,666.2 crore in financial year 2019.
• Panacea Biotech board approved a one-time settlement with consortium of lenders and raising Rs 864 crore via NCDs. The company also announced that it will demerge its real estate operations.
• GMR Infra arm became the highest bidder for Greenfield Airport at Bhogapuram in Andhra Pradesh on a private-public partnership basis. The initial capacity of the airport will be to operate for six million passengers per annum with the initial investment pegged at Rs 2,300 crore.

• Feb. 28: India eight infrastructure industries data for January.
• Feb. 28: India Q4 GDP data. (Bloomberg estimates at 6.7 percent; prior 7.1 percent)
• Feb. 28: India Q4 GVA data. (Bloomberg estimates at 6.5 percent; prior 6.9 percent)
• Feb. 28: India fiscal deficit data for January.
• March 1: Nikkei India Manufacturing PMI for January. (Prior 53.9)
• March 1: Automakers to announce monthly sales data for January.
• Powell delivers the second half of his semiannual testimony on monetary policy and the state of the economy to a House committee Wednesday.
• President Donald Trump and North Korea leader Kim Jong Un meet for a second summit on Wednesday.
• Thursday brings fourth quarter U.S. GDP.

• Brent crude ended 0.7 percent higher at $65.21 per barrel.
• West Texas Intermediate rose 1 percent to $56.03 a barrel.
• Gold held at $1,329.43 an ounce.

London Metal Exchange

• Nickel ended 0.12 percent lower for the second day.
• Copper ended higher for the third day, up 0.2 percent.
• Aluminium resumed rally after a one-day blip, ended 0.26 percent higher.
• Lead ended higher for the fifth day, up 0.24 percent.
• Tin halted a five-day rally, ended 0.6 percent lower.
• Zinc ended 0.77 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.36 percent to 10,862.50 as of 8:05 a.m.

Asian stocks edged higher Wednesday, with positive sentiment kept in check after a Wall Street advance fizzled as investors found little in Federal Reserve Chairman Jerome Powell’s Congress testimony to extend the recent rally.

Equities posted modest gains in Japan, Australia, Hong Kong and China.

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