Sensex Clocks Longest Losing Streak In Nearly Eight Years

Indian equity benchmark S&P BSE Sensex Index ended lower for the ninth consecutive trading session, registering its longest losing streak since May 2011.

The 31-share index fell over 400 points from day’s high and ended 0.41 percent lower today at 35,352.61.

The NSE Nifty 50 Index ended at 10,604.35, down 0.34 percent. The 50-stock index ended lower for the eighth day, clocking its longest losing streak since March 2015.

The market breadth, however, was tilted in favour of buyers. About 992 stocks advanced and 705 shares declined on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Realty Index’s 1.7 percent gain. On the flipside, the NSE Nifty IT Index was the top sectoral loser, down 2.08 percent.

Prestige Estates

• Stock rose as much as 8.1 percent to Rs 221.80.
• Trading volume was more than triple its 20-day average.

Aster DM healthcare

• Stock rose as much as 3.8 percent
• Trading volume was more than quadruple its 20-day average.

IFB Industries

• Stock fell as much as 5.7 percent to Rs 728.25.
• Trading volume was more than double its 20-day average.

Indian equity benchmarks erased gains. The S&P BSE Sensex Index fell over 400 points from day’s high and the NSE Nifty 50 traded near 10,600.

European equities declined at the open as profits misses dragged on miners and banking stocks.

Shares of Kaveri Seed fell as much as 13.7 percent, the most since Aug. 5, 2015, to Rs 403. The stock has declined for the fourth straight trading session.

Trading volume was almost 11 times its 20-day average, Bloomberg data showed. Kaveri Seed traded at 13 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of the state-run lenders halted a two-day decline. Bank of Baroda and Indian Bank were the top performers among the PSU banks.

• Indian equity benchmarks traded at day’s high.
• The S&P BSE Sensex Index jumped over 200 points to 35,715.21 and the NSE Nifty 50 Index traded above 10,700.
• About 1,109 stocks advanced and 553 shares declined on NSE.

Shares of Graphite India fell for the third consecutive trading session and declined as much as 3.5 percent to Rs 397.40.

“The Karnataka State Pollution Control Board issued directions to close the operations of Graphite India’s Whitefield Plant in Bengaluru forthwith and until final orders,” it said in a statement on the exchanges.

The Relative Strength Index was at 25, indicating that the stock may be oversold, Bloomberg data showed.

Nifty’s 10,700 option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract rose 6.47 percent to Rs 53.50. Over 3.35 lakh shares were added to the open interest which stood at over 16.19 lakh shares.

Palladium prices surged as much as 1.2 percent to hit a record at $1,475 an ounce.

The NSE Nifty Realty Index extended gains for the second day, led by Prestige Estate Projects’ 5.8 percent advance.

Shares of Zensar Technologies rose as much as 7.9 percent, the most since Oct. 30, 2018, to Rs 222.

The stock traded at 15 times its estimated earnings per share for the coming year, Bloomberg data showed. The scrip advanced 17 percent in the past 12 months compared to a 5.6 percent gain in the Sensex.

Shares of Emami extended gains for the third consecutive trading session and rose as much as 14.9 percent, the most in over eight years, to Rs 373.70.

The company’s promoters sold 10 percent stake in Emami for around Rs 1,600 crore to pare debt. After the divestment, the promoters’ stake in the maker of Boro Plus antiseptic cream will come down to 62.74 percent from 72.74 percent, according to its media statement.

Trading volume was more than 14 times its 20-day average, Bloomberg data showed. The stock rose 3.2 percent in the past five days and fell 23 percent in the past 30 days.

Here’s what analysts had to say about Emami after promoters sold stake:

Citi

• Maintained ‘Buy’ with a price target of Rs 480.
• Proceeds should help pare debt at the group level due to stake sale.
• Event reduces the overhang on the stock to some extent due to pledge concerns.
• Promoters indicate that they don’t have any further stake sale.

Macquarie

• Maintained ‘Neutral’ with a price target Rs 430.
• Right strategy to resolve the funding issues of the other promoter businesses.
• Do not believe the stake sale indicates lower confidence in the business.
• Believe the stake sale removes the overhang related to the pledged shares.

Shares of Dilip Buildon extended gains for the tenth straight trading session. The stock is set for its longest ever rally on NSE. The scrip rose as much as 3.6 percent to Rs 476.80.

Trading volume was almost quadruple its 20-day average, Bloomberg data showed. The Relative Strength Index was above 70, indicating that the stock may be overbought.

Shares of Edelweiss Financial Services resumed rally after a one-day blip. The stock rose as much as 3.2 percent to Rs 140.40.

About 15 lakh shares of the company traded in a block on NSE, Bloomberg data showed. Buyers and sellers were not known immediately.

The scrip declined 48 percent in the past 12 months compared to a 4.4 percent advance in the Sensex.

Shares of Ambuja Cements rose as much as 2.4 percent to Rs 202.80 after the December quarter results announcement.

Key Earnings Highlights (Q4 CY18, YoY)

• Revenue up 5.5 percent to Rs 2,863.3 crore.
• Net profit up 58.8 percent to Rs 537.4 crore.
• Ebitda down 25.3 percent to Rs 403.6 crore.
• Margin at 14.1 percent versus 19.9 percent.
• Other income up 77 percent to Rs 85 crore.
• Inventory loss of Rs 130.8 crore in base quarter.
• Tax credit of Rs 333.2 crore.

Here’s what analysts had to say after the quarterly results announcement:

BofAML

• Maintained ‘Neutral’, raised price target to Rs 255 from Rs 233.
• December quarter missed estimates due to lower realisation and higher power and fuel cost.
• Cost savings from lower fuel costs to realise in the first half of 2019.
• Price decline in East and West led to decline in realisation.

Deutsche Bank

• Maintained ‘Hold’ with a price target of Rs 220
• December quarter disappointed again on weak margin.
• Higher-than-industry cost inflation dents margin.

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 218.
• High exposure to the western region dragged down margin.
• Volume growth of 4.4 percent year-on-year was lower than industry growth of 8-10 percent.
• Cost deflation to benefit in 2019 as Diesel and Pet coke prices have corrected.

Indian equity benchmarks traded higher after fluctuating between gains and losses in the open.

The S&P BSE Sensex Index traded 0.2 percent higher at 35,570 as of 9:17 a.m. and the NSE Nifty 50 Index traded at 10,658.40, up 0.19 percent.

The market breadth was tilted in favour of buyers. About 755 stocks advanced and 604 shares declined on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Realty Index’s 1.9 percent rally. On the flipside, the NSE Nifty IT Index was the top sectoral loser, down 0.28 percent.

F&O Cues

• Nifty February futures closed trading at 10,662, premium of 21 points.
• Max open interest for Feb. 28 series at 11,000 call (open interest at 40.9 lakh shares)
• Max open interest for Feb. 28 series at 10,700 put (open interest at 31.4 lakh shares)

Stocks In F&O Ban

In Ban

• Adani Enterprises
• CG Power
• Jain Irrigation
• Jet Airways
• Reliance Power
• PC Jeweller

New in Ban

• IDBI
• Reliance Infrastructure

Put-Call Ratio

• Nifty PCR at 1.13 versus 1.3.
• Bank Nifty PCR at 0.94 versus 1.06.

Macquarie on Nestle

• Maintained ‘Outperform’ with a price target of Rs 12,994.
• Management has indicated 24-36 new product launches in 2019.
• Management expects greater acceleration in key brands growth in 2019.

CLSA on Pharma

• Dr. Reddy’s Laboratories: Upgraded to ‘Buy’ from ‘Outperform’ with a price target of Rs 3,200.
• The U.S. recovery and cost control are the key drivers for Dr. Reddy’s Laboratories.
• Like Sun Pharma for its improving fundamentals and differentiated product pipeline.
• Like Torrent Pharma for its India positioning.
• Aurobindo’s acquisition-led strategy is likely to provide scale benefits.

On Ambuja Cement

BofAML

• Maintained ‘Neutral’, raised price target to Rs 255 from Rs 233.
• December quarter missed estimates due to lower realisation and higher power and fuel cost.
• Cost savings from lower fuel costs to realise in the first half of 2019.
• Price decline in East and West led to decline in realisation.

Deutsche Bank

• Maintained ‘Hold’ with a price target of Rs 220
• December quarter disappointed again on weak margin.
• Higher-than-industry cost inflation dents margin.

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 218.
• High exposure to the western region dragged down margin.
• Volume growth of 4.4 percent year-on-year was lower than industry growth of 8-10 percent.
• Cost deflation to benefit in 2019 as Diesel and Pet coke prices have corrected.

On Emami

Citi

• Maintained ‘Buy’ with a price target of Rs 480.
• Proceeds should help pare debt at the group level due to stake sale.
• Event reduces the overhang on the stock to some extent due to pledge concerns.
• Promoters indicate that they don’t have any further stake sale.

Macquarie

• Maintained ‘Neutral’ with a price target Rs 430.
• Right strategy to resolve the funding issues of the other promoter businesses.
• Do not believe the stake sale indicates lower confidence in the business.
• Believe the stake sale removes the overhang related to the pledged shares.

• Mangalam Organics price band revised to 5 percent.

Stocks Moving Into ASM Framework

• Asahi Songwon Colors
• Rushil Décor
• RSWM
• IFB Agro Industries
• Monnet Ispat & Energy
• Indo Count Industries
• Mercator
• JBF Industries
• IIFL Holdings
• Indiabulls Integrated Services
• MT Educare
• Skipper
• Nagarjuna Fertilizers and Chemicals
• A2Z Infra Engineering
• Spencer's Retail
• Manpasand Beverages

• SBI Mutual Fund acquired 2.04 crore shares or 4.49 percent equity at Rs 355 per share.
• PI Opportunities Fund acquired 56.3 lakh shares or 1.24 percent equity at Rs 355 per share.
• Pioneer Investment Fund acquired 1.13 crore shares or 2.48 percent equity at Rs 355 per share.
• Promoter Raviraj Viniyog, Amitabh Goenka and other promoters sold 3.27 crore shares or 7.21 percent equity at Rs 355 per share.

(Alert: PI Opportunities Fund and Pioneer Investment Fund are promoted by Azim Premji)

Earnings To Watch

• Linde India

Earnings Reaction To Watch

Ambuja Cement (Q4 CY18, YoY)

• Revenue up 5.5 percent to Rs 2,863.3 crore.
• Net profit up 58.8 percent to Rs 537.4 crore.
• Ebitda down 25.3 percent to Rs 403.6 crore.
• Margin at 14.1 percent versus 19.9 percent.
• Other income up 77 percent to Rs 85 crore.
• Inventory loss of Rs 130.8 crore in base quarter.
• Tax credit of Rs 333.2 crore.

Huhtamaki PPL (Q4 CY18, YoY)

• Revenue up 9.1 percent to Rs 613.1 crore.
• Net profit down 13.9 percent to Rs 18 crore.
• Ebitda up 7.6 percent to Rs 66.9 crore.
• Margin at 10.9 percent versus 11.1 percent.

• Emami promoters sold 10 percent stake in Emami Ltd. for around Rs 1,600 crore to pare debt. After the divestment, the promoters’ stake in the maker of Boro Plus antiseptic cream will come down to 62.74 percent from 72.74 percent, according to its media statement.
• Cipla’s arm said it will acquire 11.7 percent stake in Wellthy Therapeutics for Rs 10.5 crore. The deal is expected to be completed before March 10. The company also stated that its South Africa arm has been awarded a share of South African government’s tender for four drugs whose contract will start from July for a period of three years.
• Grasim Industries said it will acquire Chlor-Alkali business of KPR Industries for Rs 253 crore. This transaction is subject to regulatory approvals. The plant to be acquired has a capacity of 200TPD and located in Andhra Pradesh.
• Tata Steel arm entered into an agreement with IMR Asia Holdings to divest its entire stake in Black Ginger.
• The tax department withdrew provincial attachment of shares of Mindtree, which was held by Coffee Day Enterprises and VG Siddhartha.
• Power Grid Corporation of India approved the investment approval of Rs 573 crore for ‘Northern Region System Strengthening’.
• Future Consumer entered into an arrangement with UAE-based T Choithrams & Sons. Under this agreement the middle-east based company will market. distribute and retail Future Consumer brand products for sale through its own stores.
• Dewan Housing Finance Ltd. said that the company had received a notice from the tax department seeking evidence on certain aspects of books of accounts. The company also stated in the press release that the notice does not refer to any suspicious transactions.
• Divi’s Labs clarified that search enquiry proceedings were being conducted at the company’s head office and manufacturing sites by the tax department.
• NLC signed an MoU with NHPC on power trading. With this agreement, both power generating public sector undertakings will offer surplus power available in northern and north-east region to the bulk consumers in southern region at an affordable tariff, as stated in the company’s press release.
• Page Industries clarified on media reports stating that company’s strong growth in revenue has been due to change in accounting standard policy stating that the company has not changed accounting policy and have not recognised revenue of Rs 36.5 crore for the December quarter, and will record this amount as revenue for the last quarter of financial year 2019.
• Wipro launched its cloud solution platform for the organisations to migrate into Oracle Cloud. The tech company said that this platform will reduce migration time and costs by up to 30 percent for the enterprises.
• Bodal Chemicals said that the remainder of dye intermediate operations had restarted. On Oct. 22, 2018, the company had closed these operations due to partial disruption in certain categories of Dye Intermediates.
• Arcelor Mittal made a non-binding offer of $672 million to buy Essar Power’s 1200MW plant in Madhya Pradesh. (Bloomberg News)
• Jindal Stainless sets up arm in Chennai to supply stainless steel components to Integral Coach Factory. This will be the Jindal Group’s first dedicated facility for the Railways.
• Cyient launched digital service solutions for original equipment manufacturers and equipment owners and operators.
• Mangalam Cement approved amalgamation of Mangalam Timber Products with self.

• The Federal Reserve will on Wednesday publish minutes from its recent meeting.
• Bank of Canada Governor Stephen Poloz speaks on Thursday; ECB President Mario Draghi speaks on Friday, the same day Reserve Bank of Australia Governor Philip Lowe gives parliamentary testimony.
• Australia’s central bank releases meeting minutes on Tuesday.
• Indonesia rate decision is due Thursday.

• West Texas Intermediate crude advanced 0.5 percent to $55.87 a barrel.
• Brent crude traded 0.75 percent lower at $66 per barrel. The Asian crude benchmark had rallied for five days in a row.

London Metal Exchange

• Aluminium resumed declines after a one-day rally, ended 0.16 percent lower.
• Nickel ended higher for the second day, up 0.44 percent.
• Copper ended higher for the fourth day, up 1.4 percent.
• Lead halted a two-day rally, ended 2.3 percent lower.
• Tin ended 0.3 percent lower.
• Zinc resumed declines after a one-day rally, ended 0.57 percent lower.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.21 percent to 10,675.50 as of 8:30 a.m.

Asian stocks traded mixed Tuesday with little direction after a muted session in Europe and a holiday in the U.S.

Shares in Japan and Korea were little changed, while Chinese, Australian and Hong Kong equities posted modest gains.

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