Sensex, Nifty Erase Day's Gains, End Lower Dragged By Auto, IT Stocks

India's stock benchmarks fell, dragged by losses in information technology, auto and FMCG stocks. This is the fifth time in the last six sessions that the benchmarks have declined, with yesterday being the only exception.

The S&P BSE Sensex shed 0.55% to 58,340.9. The 30-stock gauge rose as much as 0.51% in intraday trade before erasing the gains. The NSE Nifty 50 index also declined by similar magnitude to 17,415.05.

The S&P BSE Midcap index almost mirrored its larger peer's decline while S&P BSE SmallCap index outperformed, adding nearly 0.5%.

Fourteen of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Information Technology, S&P BSE Auto and S&P BSE Tech shedding over 1%.

The market breadth was skewed in the favour of bulls at close. About 1,932 stocks advanced, 1,358 declined and 140 remained unchanged.

The Cabinet has approved the repeal of three farm laws, days after PM Narendra Modi announced the government's decision in a televised address.

The Cabinet also approved the extension of Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY) for another four months up to March 2022. The estimated food subsidy will cost Rs 53,344.5 crore for a total out go of food grains of 163 lakh metric tonnes.

Shares of HDFC Bank Ltd. rose marginally to Rs 1,519.35 apiece after over 16 lakh shares of the company were exchanged in a bunch trade.

Source: Bloomberg

Benchmark indices S&P BSE Sensex and NSE Nifty 50 pared gains of as much as 0.5% and fell 0.1%, led by a decline in Reliance Industries Ltd. and Infosys Ltd.

NSE Nifty 50 fell as much as 0.27% to 17,458.05, while S&P BSE Sensex fell about the same to a low of 58,472.45.

Shares of Crompton Greaves Ltd. and Muthoot Finance Ltd. were trading in the red for the sixth day in a row. This is the longest loss streak for Crompton in two years.

ICICI Prudential Ltd. too is lower for the seventh straight day, on track for the longest losing streak since the period ended Nov. 22, 2019.

ICICI Prudential has lost a total of 8.6% during the streak while the S&P BSE Sensex Index fell 3.2%. Today, the stock fell 0.3% to Rs 614.65.

In an exchange filing, state-run Indian Overseas Bank Ltd. said that it has not received any communication regarding privatization from the government. "We are unaware of the reasons for the sudden movement in stock price. It may be due to speculation," it said.

IOB's stock had hit the upper price band, gaining 20% to Rs 23.8 apiece.

India is mulling proposal to treat cryptocurrencies as a financial asset while safeguarding small investors, reported Bloomberg citing people familiar with the matter.

The law could still ban use of crypto as legal tender.

• Rakesh Jhunjhunwala’s share will not be trimmed in the upcoming initial public offering of Star Health and Allied Insurance Co.

• Jhunjhunwala and his wife together hold a 17.2% stake in the firm currently.

Source: Bloomberg citing Star Health’s press conference

India's stock benchmarks continued their upward trajectory, with the S&P BSE Sensex gaining 0.4% to 58,906.54 and NSE Nifty 50 rising by a similar magnitude to 17,518.65. ICICI Bank Ltd. contributed the most to the index gain, increasing 2.3% and ONGC Ltd. had the largest increase, rising 4.8%. In mid-day trading, 32 of 50 shares gained, while 18 fell.

The broader indices outpaced gains in their larger peers with the S&P BSE MidCap gaining 0.49% and S&P BSE SmallCap too furthering about 1.26%. Barring S&P BSE Auto, IT and FMCG, all 16 OTHER sectoral indices compiled by the BSE Ltd. gained with S&P BSE Oil and Gas index up more than 1.5%.

The market breadth was skewed in the favour of bulls. About 2,355 stocks advanced, 807 declined and 160 remained unchanged.

Zee Entertainment Enterprises Ltd. rose 8%. Trading in the company's call options was triple the average. Trading volume was triple the average for this time of day.

• The shares increased to Rs 337.5, higher than any close since Nov. 25, 2019, from Rs 312.4.

• The stock was the best performer among its peers.

• The Sensex rose 0.4%, while the MSCI AC Asia Pacific Index lost 0.3%.

Zee Entertainment shares rose 12% in past two trading session after Punit Goenka said at the APOS India summit during market hours Tuesday that Zee, Sony merger is in final stages.

Punit Goenka reiterated that the consolidated will benefit the industry as well as the two companies. He also added that growth capital to be infused by Sony will help the company in investing in premium content including sports.

Of the 23 analysts tracking the company, 17 maintained 'buy', five maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 11.3%

The virtual coins slumped more than 12% in the local currency trading on WazirX, one of India’s leading crypto currency exchanges, steeper than a 1.8% fall globally on growing concerns of a complete ban on digital currency trading in the country.

• India will present a cryptocurrency bill in the parliament next week to regulate trading

• India had earlier proposed a ban in crypto trading

• Reserve Bank of India has expressed its concerns over allowing crypto trading in India; the government is yet to take a final decision

Shares of Paytm climbed for a second day on Wednesday, easing a selloff that wiped out about a third of the digital payments startup’s value in its first two trading sessions.

The payments firm advanced as much as 12.7% on Wednesday, but is still down more than 20% from its offer price. Paytm’s parent company, One 97 Communications Ltd., raised $2.5 billion in India’s biggest-ever IPO that had global institutions such as BlackRock Inc. and Canada Pension Plan Investment Board as cornerstone investors.

Shares sank 27% last Thursday, marking one of the worst debuts by a major technology company globally.

The S&P BSE Auto and Information Technology indices were the only two sectoral indices trading in the red. They were down 0.32% and 0.07% respectively.

On the NSE, as well automobile and IT sectoral indices were lagging by 0.43% and 0.31% respectively.

Maturities across the India sovereign yield curve were little changed in Wednesday morning trading.

• The 5-year yield rose 0.6bps to 5.703%

• The 10-year yield rose 0.8bps to 6.373%

• The 30-year yield remained unchanged at 6.89%

• The 5-year-10-year yield spread was 67bps, vs previous close 66.8bps

Source: Bloomberg

Natco Pharma Ltd. rose as much as 4.2%.

• The shares increased to Rs 843.95 from Rs 809.55.

• The stock was the best performer among its peers.

• The Sensex rose 0.2%, while the MSCI AC Asia Pacific Index lost 0.6%.

Indian Overseas Bank Ltd. led a rally in state-run banks after the government listed a bill to be considered for privatization of two public sector banks.

• Indian Overseas Bank Ltd. jumped as much as 20%, most since Sept. 30.

• Central Bank of India Ltd. gained over 15%, Bank of Maharashtra Ltd. rose +10%.

• The banking laws amendment bill will be presented to parliament in the session starting Nov. 29, according to a description of the bill, posted on parliament’s website on Tuesday.

• Finance Minister Nirmala Sitharaman had announced a plan to privatize two state-run lenders during presentation of federal budget for 2021-22.

Indian stocks rose, set for a second day of gains, after data suggested a pick up in business activity is likely to support a faster economic recovery.

The S&P BSE Sensex rose 0.3% to 58,825.43 as of 9:55 a.m. in Mumbai, while the NSE Nifty 50 Index advanced by a similar magnitude. Bharti Airtel was the biggest boosts to both gauges and climbed 2.5%. Of 30 shares in the Sensex, 21 gained and nine fell.

“High frequency key indicators for October remained upbeat and continue to reflect sustained economic activities and sustainable earnings growth,” Binod Modi, head of strategy at Reliance Securities Ltd. said in a note.

All except one of 19 sub-indexes compiled by BSE Ltd. gained, led by a measure of telecom companies. Mobile service provider Vodafone Idea climbed as much as 5.2% after saying it will raise its plans tariffs by at least 20%. Larger rival Bharti made a similar move earlier this week.

India’s economy showed steady signs of strengthening in October as services, manufacturing and exports kept it on course to post the world’s fastest growth.

Gainers

• Bharti Airtel +1.4%

• NTPC +1.2%

• Sun Pharmaceutical Industries +1.1%

Decliners

• Asian Paints -0.6%

• Bajaj Finserv -0.6%

• Tech Mahindra -0.6%

Shares of Indian telecom companies rose after Vodafone Idea raised prices of its mobile plans by at least 20%. Vodafone Idea's decision to hike tariffs comes after a similar move by larger rival Bharti Airtel earlier in the week.

S&P BSE Telecom index rose over 2% with Tata Teleservices Maharashtra Ltd. and Vodafone Idea Ltd. leading the gains.

• Larsen & Toubro Ltd. has signed an MoU with Tamil Nadu Government to establish 90 Mega Watt capacity data centres and associated units in Kanchipuram over the next five years.

• L&T expects to employ around 1,100 people in the project. Tamil Nadu government will provide uninterrupted power supply and other infrastructure support

Source: Exchange Filing

India's stock benchmarks opened marginally higher, pushed by energy stocks.

The S&P BSE Sensex and NSE Nifty 50 indices gained 0.9% each to 58,675.8 and 17,518.65 respectively. ONGC Ltd. had the largest move, rising 3.2%. In early trading, 38 of 50 shares gained, while 12 fell.

The broader indices outperformed their larger peers with the S&P BSE MidCap gaining 0.47% and S&P BSE SmallCap too furthering about 1.07%. Barring S&P BSE Metal, all the other 18 sectoral indices compiled by the BSE Ltd. gained with S&P BSE Utilities index up more than 1.5%.

The market breadth was skewed in the favour of bulls. About 1,954 stocks advanced, 501 declined and 95 remained unchanged.

• Indian bonds may drop after an overnight surge in crude prices as the co-ordinated release of strategic reserves with other countries fell short of expectations.

• Traders will also await a sale of Treasury bills to gauge the direction of shorter-term rates.

• USD/INR little changed at 74.4212 on Tuesday.

India’s mobile service providers will be in focus after Vodafone Idea increased prices of its mobile plans by at least 20%, following a similar move by larger rival Bharti Airtel earlier this week.

STOCKS TO WATCH

• Vodafone Idea, Bharti Airtel, Reliance Industries

• Sector’s suppliers such as Tejas Networks and Sterlite Technologies

Shares of One 97 Communications, the firm which operates payment solutions company Paytm, may plunge to a level of 1,000 rupees over the next one year, according to G. Chokkalingam, a strategist with Equinomics Research & Advisory Pvt.

• Chokkalingam’s target implies about 33% fall for Paytm from its Tuesday’s close

• Paytm has a valuation of about 1 trillion rupees ($13.4b) but for a company that makes considerable losses, it is a ‘ridiculous valuation’, he said via phone

• Paytm is not a technology company like Google or Apple, it is a simple payment solution company and we are seeing traditional lending switching to digital platforms even some small finance companies are starting payment banks

• “Competition will intensify and therefore valuation for Paytm will come down ultimately”

• Stock closed 9.9% higher on Tuesday after slumping 37% over two sessions; it is still about 30% down from its issue price of 2,150 rupees

Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Co. will raise up to Rs 7,500 crore in its three-day initial public offering that will open on Nov. 30 and close on Dec. 2, according to terms of the deal obtained by Bloomberg.

The offer comprises of a fresh issue of Rs 2,000 crore and Rs 5,500 crore-worth existing shares being sold.

The price band as been set at Rs 870-900.

Asian stocks were steady on Wednesday and Treasury yields held a climb as traders weighed the prospect of tighter monetary policy to curb inflation.

Shares fell in Japan and fluctuated in South Korea and Australia. U.S. futures wavered after energy and financials helped the S&P 500 eke out a gain, while the Nasdaq 100 extended a drop.

India’s SGX Nifty 50 Index futures for November delivery rose 0.3% to 17,555.50, while MSCI Asia Pacific Index shed 0.5%. The NSE Nifty 50 Index gained 0.5% on Tuesday to 17,503.35.

The Treasury yield curve steepened overnight and the dollar ticked higher. Bond market inflation expectations have retreated from mid-November highs on bets the Federal Reserve will speed up the withdrawal of monetary stimulus.

Curbing inflation is now center-stage for policy makers, building up a test for markets as ultra-loose, pandemic-era monetary stimulus is scaled back. A deluge of U.S. data and the latest Fed minutes, all due Wednesday, will give investors a read on price pressures and the economic recovery.

Elsewhere, oil pared a rally sparked by a smaller-than-expected move from consumer nations to tap strategic reserves. Gold is being pressured by higher yields.

Back home, Siemens is scheduled to report Q4 earnings on Wednesday. Foreign investors sold net Rs 2,110 crore of stocks on Monday, according to NSDL website.