Sensex, Nifty Resume Decline Weighed Down By Tata Motors

Indian equity benchmarks resumed decline paced by losses in Tata Motors after the luxury carmaker said it was closing production because of weak demand in China.

The S&P BSE Sensex fell 0.51 percent or 175 points to 34,299 and the NSE Nifty 50 Index declined 0.45 percent or 47 points to 10,301.

The benchmarks were highly volatile as the Nifty 50 index swung 14 times between gains and losses.

Six of 11 sector gauges compiled by the National Stock Exchange ended lower dragged by the Nifty Auto Index's 2.6 percent drop. On the other hand, the Nifty Media Index was top gainer, up 2.1 percent.

Mid- and small-cap shares declined as the Nifty Midcap 100 Index fell 0.3 percent and the Nifty Smallcap 100 Index declined 0.2 percent.

Nifty witnessed highly volatile trading session as the benchmark swung 14 times between gains and losses.

• Tata Motors has 11 lakh shares change hands in a single block. Stock down 12.5 percent at Rs 186.

Buyers and sellers were not immediately known

Source: Bloomberg

Fuel duty cut poses downside risk to India's fiscal deficit target of 3.3 percent of GDP, according to credit ratings agency Moodys.

The excise cuts will reduce government revenue by Rs 10,500 crore or 0.05 percent for the remainder of fiscal 2018.

These measures create material downside risks to the central government’s fiscal deficit target of 3.3 percent of GDP for fiscal 2018. Because the government had already met 94.7 percent of the budgeted annual deficit by August 2018, to achieve its deficit target it will likely need to compress capital expenditure.

Consequently, we expect the central government deficit target to slip modestly to 3.4 percent of GDP, while the combined general government deficit (central and state) should remain at about 6.3 percent of GDP, Moody’s said in a press release.

Shares of the Bengaluru-based coffee chain operator fell for twelfth day in a row and were headed for longest slumps since IPO.

The stock has plunged 20 percent in last 12 sessions to Rs 250.90.

JSW Steel, which had partnered VTB Capital-led consortium Numetal to bid for Essar Steel, is seeking legal opinion if company can bid solo for the stressed mill, JSW’s joint managing director Seshagiri Rao said in New Delhi.

• Not clear if creditors, resolution professionals will allow fresh bid after India’s top court verdict: Rao
• Company wanted to bid solo in second round but was not allowed by creditors as they had not expressed interest in the initial round: Rao
• Earlier, the Times of India newspaper reported Russia’s VTB plans to make solo bid for Essar Steel

Source: Bloomberg

• Rupee extended decline and depreciated 0.26 percent or 19 paise, to record low, of 74.26 per dollar.

Shares of the Bengaluru-based watch and jewellery retailer fell as much as 6.52 percent, the most in over 10 months, to Rs 760 on the back of heavy volumes.

Trading volume was 1.7 times its 20-day average, data compiled by Bloomberg showed. Over 45 lakh shares changed hands on the National Stock Exchange, according to data on the NSE website.

Indian equity benchmarks extended decline paced by losses in auto makers like Tata Motors, Maruti Suzuki and Eicher Motors.

The S&P BSE Sensex fell 0.4 percent or 146 points to 34,333 and the NSE Nifty 50 Index declined 0.46 percent or 47 points to 10,301.

Eight of 11 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty Auto Index's 3.1 percent drop. On the flipside, the Nifty Metal Index was top gainer, up 0.4 percent.

Mid- and small-cap shares were underperforming their larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 Indices fell over a percent each.

The overall breath was negative as 1,574 shares were declining while 832 were advancing on the BSE.

Shares of the Mumbai-based automobile maker fell as much as 18 percent, the most in over six years, to Rs 173.20.

Today's fall in the stock price wiped out over Rs 10,000 crore from the market value of Tata Motors.

Meanwhile, 70.7 percent of analysts who track Tata Motors have a ‘buy’ call on the stock, 22 percent have ‘hold’ while only 7.3 percent have ‘sell’ on the stock, according to data compiled by Bloomberg.

Calciners can import up to 1.4 million tonnes of petcoke per year.

• Rain Industries up 1.7 percent at Rs 154
• Goa Carbon up 4.4 percent at Rs 509

Shares of budget airline operator — IndiGo fell below IPO price of Rs 765.

The stock slumped as much as 11.62 percent, the most in over five months, to Rs 691, its lowest level since listing.

• Galaxy Surfactants: The Navi Mumbai-based drugmaker fell as much as 1.2 percent to Rs 1,181.20. Trading volume was 15.3 times its 20-day average.
• Inox Leisure: The Vadodara-based movie theatre operator fell as much as 5 percent to Rs 188. Trading volume was 34.5 times its 20-day average.
• Minda Corp: The Noida-based auto parts maker rose as much as 5.5 percent to Rs 123. Trading volume was 9 times its 20-day average.
• DB Corp: The Gujarat-based newspaper publishing company rose as much as 7.13 percent to Rs 205. Trading volume was 6 times its 20-day average.

Nifty Bank's 25,000 call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 33 percent to Rs 69. Over 4.23 lakh shares were added to the open interest which stood at over 12.52 lakh shares.

Equity mutual fund inflows have shown a positive trend in September and liquid category saw redemption due to market tightness, NS Venkatesh, Chief Executive of AMFI told BloombergQuint.

Key highlights of the conversation:

• Equity inflow has shown a positive trend in September
• Steady SIP book shows investor maturity
• Liquid category saw redemption due to quarter end and market tightness
• Believe impact to be one off for the liquid category
• SIP books stand at nearly Rs 7,700 crore
• Would suggest staying invested for the long term and ignore volatility

Tata Motors extended decline and fell as much as 13.47 percent, the most since June 2016, to Rs 183.75.

Shares of the sugar manufacturers rose in an otherwise subdued session led by gains in Dhampur Sugar's 14 percent rally.

Shares of the Kolkata-based beauty and healthcare products maker fell as much as 11.7 percent to Rs 399.95, also its lowest level in over three years on heavy trading volumes.

Trading volume was 10 times its 20-day average, according to data compiled by Bloomberg.

As many as 24,000 shares changed hands on the BSE compared with an average of 19,000 shares traded daily in the past two weeks.

Shares of the Investment Leasing and Financial Services (IL&FS) group companies were locked in lower circuit after its parent defaulted on debt obligations.

IL&FS defaulted on interest and principal payments of inter corporate deposit of Rs 20.18 crore due yesterday, it said in an exchange notification.

• IL&FS Transportation Network locked in 10 percent lower circuit
• IL&FS Engineering and Construction hit 10 percent lower circuit
• IL&FS Investment Managers locked in 5 percent lower circuit

Shares of the parent of luxury carmaker Jaguar Land Rover fell as much as 5.62 percent, the most since Sept. 21, to Rs 200.80 after JLR sales fell in September.

JLR’s September sales fell 12.3 percent to 57,114 units on a year-on-year basis. The monthly sales were impacted by the ongoing uncertainty in Chinese market as sales in China slumped 46.2 percent resulting from import duty changes and continued trade tensions which held back the consumer demand, Tata Motors said in an exchange notification.

Strong sales for new models were seen for Range Rover Velar and Jaguar I-Pace and E-Pace.

Indian equity benchmarks edged higher paced by gains in Yes Bank, UltraTech Cement, Hero MotoCorp and Zee Entertainment.

The S&P BSE Sensex rose 0.5 percent or 170 points to 34,640 and the NSE Nifty 50 Index advanced 0.35 percent or 36 points to 10,385.

Fourteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy Index's 0.8 percent gain. On the flipside, the S&P Auto Index was top loser, down 0.4 percent.

Mid- and small-cap shares rebounded after yesterday's selloff as the S&P BSE MidCap and S&P BSE SmallCap Indices advanced 0.3 percent each.

• Rupee opened higher at 73.85 per dollar against yesterday's close of 74.07.

The rupee will be in focus after the IMF lowered global growth forecasts but retained its optimism about India. The International Monetary Fund on Tuesday forecast a growth rate of 7.3 percent in the current year of 2018 and that of 7.4 percent in 2019.

The rupee weakened past 74 a dollar to end at 74.07 on Monday, having hit a record low of 74.2225 on Friday. The implied opening from forwards suggest spot may start trading around 73.92.

In the bond market, focus will be on a sale of 140.32 billion rupees of state-government bonds. The sale will test investor appetite for debt after benchmark sovereign yields plunged over the last two sessions following the central bank’s surprise decision to stay put on rates.

India’s 10-year yield fell five basis points to 7.98 percent on Monday, adding to its 13 basis points decline on Friday, when RBI’s panel left its repurchase rate at 6.5% while changing its policy stance to “calibrated tightening” from “neutral”.

F&O Cues

• Nifty October futures closed trading at 10,379 with a premium of 31 points.
• Nifty October open interest up 0.6 percent; Nifty Bank October open interest down 4 percent.
• Max open interest for October series at 10,500 strike value call option (open interest at 32.6 lakh shares).
• Max open interest for October series at 10,000 strike value put option (open interest at 39.4 lakh shares).

Put-Call Ratio

• Nifty PCR at 1.12 versus 1.07.
• Nifty Bank PCR at 0.79 versus 0.71.

Macquarie on Financials

• September 2018 saw Rs 2.1 lakh crore of net outflows from liquid mutual funds.
• Covered NBFCs are well placed to withstand potential restrictions on commercial papers.
• Think troubles are temporary; Time to take action.
• Recommend buying HDFC, Indiabulls Housing Finance, Ujjivan.

Morgan Stanley on Cement

• Channel checks suggest cement prices in Sep-18 were flattish to marginally lower on a monthly basis.
• Demand moderated in September, but was strong in the second quarter.
• Pace of cost increase has moderated significantly.
• Key to track: Price commentary in the next few months and input cost trend.

CLSA on AMFI Data

• Large outflow seen from liquid scheme; Incremental flow to chase quality.
• Expect flows to stabilise but risk aversion to stay.
• Encouragingly, inflow into equity funds was at a four-month high.
• NBFCs with higher credit ratings and strong ALM profiles are better placed.

JPMorgan on L&T

• Maintained ‘Overweight’; cut price target to Rs 1,570 from Rs 1,600.
• On track to meet 2018-19 inflow and revenue growth guidance.
• Recommend buying ahead of second quarter results.
• Expect 50 percent order inflow growth in the second quarter; Service businesses to drive P&L growth in the second quarter.

JPMorgan on Tech Mahindra

• Upgraded to ‘Overweight’ from ‘Neutral’; raised price target to Rs 925 from Rs 835.
• Tech Mahindra is nicely putting in place the building blocks to win in 5G.
• Expect 5G spending to pick up 2019, with Tech Mahindra getting its share by 2020.
• Reasonably good 5G deployment even with couple of large carriers should suffice for robust growth.

HSBC on NTPC

• Maintained ‘Buy’ with a price target of Rs 210.
• Loss on coal non-availability and loss of GCV of coal to reduce.
• Blending renewable energy and national merit order dispatch to provide additional earnings.
• Strong commissioning to drive 13 percent and 15 percent growth in regulated equity and earnings respectively over FY18-20.

• Edelweiss Financial Services circuit filter revised to 10 percent.
• J.Kumar Infraprojects circuit filter revised to 5 percent.

• Infibeam Avenues: Nomura Singapore sold 88 lakh shares or 1.33 percent equity at Rs 60.09 each.

• Tata Motors: JLR’s September sales were down 12.3 percent at 57,114 units, year-on-year basis. The company said that the monthly sales were impacted by the ongoing uncertainty in Chinese market as sales in China declined by 46.2 percent resulting from import duty changes and continued trade tensions which held back the consumer demand. Strong sales for new models were seen for Range Rover Velar and Jaguar I-Pace and E-Pace.
• Usha Martin union raised concerns about irregular payment of salaries and has sought government intervention for sale of the company's wire rope manufacturing facility in Jharkhand to Tata Steel. The union also urged the government that the company should be acquired by Tata Steel so that the future of the employees remains secure. (PTI)
• NBCC executed an MoU with Rajasthan government for redevelopment of old MREC campus in Jaipur for Rs 250 crore.
• Britannia Industries announced it will give one free debenture worth Rs 30 in face value for one fully paid-up equity share. The company will utilise its accumulated profits of Rs 869 crore for the debenture issue. However, the record date has not been fixed yet.
• NCL Industries’ September Quarter Updates: Cement dispatches were up by 31 percent at 4.88 lakh MT versus 3.72 lakh MT. Cement boards dispatches were up 7 percent at 16,700 MT versus 15,700 MT. RMC Production and Sales were up 50 percent at 45,800 cubic metre versus 30.6 cubic metre.
• Coal India and NLC India signed an MoU for formation of joint venture for solar power generation of 3,000 MW and thermal projects of 2,000 MW capacity.
• Sadbhav Infra Project arm won an arbitration award against NHAI for Rs 110.5 crore.

• West Texas Intermediate crude was little changed at $74.20 a barrel.
• Brent crude traded a little changed at $83.90 a barrel.
• Gold gained 0.2 percent to $1,190.09 an ounce.

Shanghai Exchange:

• Aluminium snapped five-day decline, up 1.4 percent.
• Steel snapped seven-day decline, up 1.8 percent.
• Zinc extended gains for the third day, up 2.7 percent.
• Copper snapped a three-day decline, up 0.5 percent.
• Rubber snapped a three-day decline, up 2.7 percent.

Asian stocks opened lower on Tuesday following a mixed U.S. session as investors took stock of a friction-filled visit by the American secretary of state to Beijing.

Japanese shares declined as traders came back after a long weekend, hurt by a strengthening in the yen. Australian stocks dropped, while Hong Kong futures were also lower.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses and rose 0.1 percent as to 10,377 as of 7:55 a.m.

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