Rally In Global Stocks Help Sensex Rebound From Worst Drop In 11 Months

Indian equity benchmark—S&P BSE Sensex rebounded from its worst fall in 11 months after a rally in its global stocks after on hopes for a return to calm in Hong Kong.

The 31-share index closed 0.44 percent higher at 36,724.24.

The NSE Nifty 50 ended 0.43 percent higher at 10,844.65. The broader markets represented by the NSE Nifty 500 Index ended 0.35 percent higher.

Elsewhere, shares in Hong Kong surged the most since 2011, buoying markets across Asia, after reports that the city’s chief executive will withdraw a contentious extradition bill that sparked mass protests. (Get your daily fix of global markets here.)

Indian markets will witness a turnaround only after foreign portfolio investors turn substantial buyers, according to Dimensions Corporate Finance Services’ Managing Director Ajay Srivastava.

“The markets will not witness a turnaround by any upcoming government policies. Besides, domestic investors are already overinvested,” Srivastava told BloombergQuint in an interaction. “The investors need to wait for ‘buying trigger’ by the overseas investors. That will give confidence to re-balance portfolio,” he added.

Srivastava suggested investors to have a large-cap stock in the sectors they are interested and was cautious of mid- and small-cap stocks.

“Mid and small caps are not looking good fundamentally and economically. Investors need to stick to large caps as they are the only ones which will grow,” he said.

The market breadth was tilted in favour of buyers. About 914 stocks advanced and 845 shares declined on National Stock Exchange.

Six out of 11 sectoral gauges compiled by NSE ended higher, led by the NSE Nifty Metal Index’s 1.6 percent advance. On the flipside, the NSE Nifty Auto Index was the top sectoral loser, down 1.12 percent.

Lupin

• Stock rose as much as 1.3 percent to Rs 744.80.
• Company partners with Boehringer for new drug discovery.
• Potential milestones of more than $700 million.

BEML

• Stock rose as much as 5.4 percent to Rs 807.
• Seeks nod for stake sale in unit Vignyan Inds (into steel casting foundry business)

Vascon Engineers

• Stock rose as much as 19.8 percent to Rs 12.40.
• Company won Rs 465 crore worth constructions orders.

Dr. Lal Pathlabs

• Stock rose as much as 7.6 percent to Rs 1,273.90.
• Stock hits fresh 52-week high.

The foreign portfolio investments will continue to remain under the pressure over the near-to-medium term despite the rollback of higher surcharge and the benign global monetary policy stance, according to India Ratings and Research.

“Notwithstanding the periodic reversals in FPI flows that lead to net inflows, the headwinds to global FPI flows are arising from unstable global monetary policy conditions and burgeoning geopolitical tensions, and hence, are likely to persist over the near-to-medium term,” the rating agency said in a statement.

“Besides, tepid FPI flows could put pressure on the domestic yield curve over the medium term, especially on account of large central and state government borrowings in the second half of the year,” it added.

The markets will witness a turnaround only after foreign portfolio investors turn substantial buyers, according to Dimensions Corporate Finance Services’ Managing Director Ajay Srivastava.

“The markets will not witness a turnaround by any upcoming government policies. Besides, domestic investors are already overinvested,” Srivastava told BloombergQuint in an interaction. “The investors need to wait for ‘buying trigger’ by the overseas investors. That will give confidence to rebalance portfolio,” he added.

Srivastava suggested investors to have a large-cap stock in the sectors they are interested and was cautious of mid- and small-cap stocks.

“Mid and small caps are not looking good fundamentally and economically. Investors need to stick to large caps as they are the only ones which will grow,” he said.

Indian equity benchmarks continued to trade higher in the past hour.

The S&P BSE Sensex rose 0.34 percent to 36,686 as of 2 p.m. and the NSE Nifty 50 rose 0.29 percent to 10,829. The broader markets represented by the NSE Nifty 500 Index rose 0.15 percent.

The market breadth, however, was tilted in favour of sellers. About 866 stocks declined and 849 shares advanced on National Stock Exchange.

The Indian rupee extended gains to trade at day’s high against the U.S dollar. The home currency appreciated as much as 0.6 percent to strengthen past 72 against the greenback.

About 20 lakh shares of Bharat Heavy Electricals Ltd. changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Maruti Suzuki India Ltd. said in an exchange notification that the company has decided to shut down its passenger vehicle manufacturing operations at Gurugram Plant and Manesar Plant in Haryana for two days on Sept 7 and Sept 9.

"Both the days will be observed as no production days," the company said.

Shares of India's largest carmaker traded 2.36 percent lower at Rs 5,892.45. The stock fell 3.8 percent intraday.

Indian equity benchmarks traded edged higher in the afternoon trade after fluctuating between gains and losses in the morning.

The S&P BSE Sensex rose 0.2 percent to 36,643 as of 1:10 p.m. and the NSE Nifty 50 rose 0.18 percent to 10,818. The broader markets represented by the NSE Nifty 500 Index rose 0.05 percent.

InterGlobe Aviation Says:

• Gangwal reiterated issues against IndiGo, IGE Group on Aug. 30
• Company received an email on Sept. 3 from SEBI
• Company to provide response to SEBI

Source: Bloomberg

U.S. and European futures climbed and Hong Kong shares surged after reports the city’s chief executive would withdraw a contentious extradition bill.

• The MSCI Asia Pacific Index rose 0.3 percent.
• Japan’s Topix index lost 0.3 percent.
• Hong Kong’s Hang Seng advanced 2.8 percent.
• The Shanghai Composite Index was up 0.1 percent.
• South Korea’s Kospi rose 0.6 percent.
• Futures on the S&P 500 Index advanced 0.7 percent.

Source: Bloomberg

About 14.6 lakh shares of Yes Bank changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Eight out of 11 sectoral gauges compiled by National Stock Exchange traded lower, led by the NSE Nifty Pharma Index’s 2.23 percent fall. On the flipside, the NSE Nifty Bank Index was the top sectoral gainer, up 0.14 percent.

Indian equity benchmarks traded lower after a shaky start.

The S&P BSE Sensex fell 0.3 percent to 36,446 as of 11 a.m. and the NSE Nifty 50 fell 0.38 percent to 10,757. The broader markets represented by the NSE Nifty 500 Index fell 0.45 percent.

The Markit India Services Business Activity Index fell to 52.4 last month from 53.8 in July. A reading below 50 indicates contraction in activity, while a number above it signals expansion.

Nifty’s 10,800 put option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract fell 26.42 percent to Rs 46.80. Over 7.68 lakh shares were added to the open interest which stood at over 21.86 lakh shares.

Shares of Balkrishna Industries extended declines for the third consecutive trading session. The stock fell as much as 6.6 percent to Rs 682.

Brokerage and research firm Macquarie initiated coverage on the stock with ‘Underperform’ rating and a price target of Rs 575.

Here’s what Macquarie had to say:

• Proven track record, but competition is getting more intense.
• Faces headwinds due to weakness in global agri and mining activities.
• Rise in CAPEX to weight on net profit and RoCE.
• Earnings decline and low return ratio to drive valuation de-rating.

Shares of IndiaMART InterMESH fluctuated between gains and losses to trade little changed at Rs 1,200.

The company plans to acquire 26 percent stake in in Simply Vyapar App for Rs 31.2 crore, according to its stock exchange filing.

The stock rose 2.2 percent in the past five days and returned 2.4 percent in the past 30 days, according to Blomberg data.

Shares of ICICI Lombard General Insurance Company Ltd. extended declines for the second consecutive trading session. The stock fell as much as 5.4 percent to Rs 1,125.65.

The Insurance Regulatory and Development Authority of India has waived off the earlier imposed lock in period on the equity shares held by Fairfax. Earlier the lock in period was till March 29, 2021 and currently Fairfax holds 10 percent stake in the company.

The scrip fell 10.5 percent in two trading sessions. Trading volume was almost 10 times its 20-day average, Bloomberg data showed. Of the shares traded, 51 percent were at the ask price and 34 percent were at the bid.

Shares of Sun Pharmaceutical Industries fell as much as 5.2 percent, the most since Aug. 14, to Rs 416.60.

“Market Regulator Securities and Exchange Board of India has ordered a forensic audit against Sun Pharma based on whistleblower’s allegations of financial irregularities and lapses in corporate governance standards,” Moneycontrol reported quoting two unnamed sources.

The stock was the worst performer on Sensex and Nifty. Trading volume was more than triple its 20-day average, according to Bloomberg data.

Indian equity benchmarks fluctuated in the opening trade as gains in Larsen & Toubro Ltd. and Infosys Ltd. were offset by the losses in Sun Pharmaceutical Industries Ltd. and Reliance Industries Ltd.

The S&P BSE Sensex rose 0.06 percent to 36,584 as of 9:20 a.m. and the NSE Nifty 50 rose 0.04 percent to 10,800. The broader markets represented by the NSE Nifty 500 Index fell 0.1 percent.

The market breadth was tilted in favour of buyers. About 819 stocks advanced and 605 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE traded lower led by the NSE Nifty Pharma Index’s 1.02 percent fall. On the Flipside, the NSE Nifty FMCG Index was the top sectoral gainer, up 0.62 percent.

September Futures

• Nifty Sep futures closed at 10,836.4, premium of 38.5 points versus 35.7 points.
• Nifty futures open interest up 2 percent, adds 3.8 lakh shares in open interest
• Bank Nifty Sep futures closed at 26,873.5, premium of 49 points versus 93 points.
• Bank Nifty futures open interest up 13 percent, adds 1.9 lakh shares in open interest.

Options

• Nifty PCR at 1.03 versus 1.37 (across all series).

Nifty Weekly Expiry: Sept. 5

• Max open interest on call side at 11,000 (29.3 lakh shares).
• Max open interest on put side at 10,800 (14.1 lakh shares).
• open interest addition seen at 10,900C (+19.8 lakh shares), 11,000C (+17.4 lakh shares).
• open interest shedding seen at 11,000P (-12 lakh shares), 10,950P (-6.5 lakh shares).

Nifty Monthly Expiry: Sept. 26

• Max open interest on call side at 11,200 (21.2 lakh shares).
• Max open interest on put side at 10,800 (28.3 lakh shares).

• Future Supply Chain Solutions to meet Kotak MF on Sept. 4
• Cipla to meet Axis Capital, SBI Pension Fund and other investors from Sept. 4-11
• Tata Global Beverages to meet ICICI Pru MF and Kotak Life on Sept. 4.
• Sudarshan Chemical Industries to meet Malabar Investment on Sept. 5.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.29 percent to 72.18 against the greenback.

Indian equity benchmarks are set to open higher.

The S&P BSE Sensex rose 0.1 percent to 36,596.50 during the pre-market and the NSE Nifty 50 rose 0.2 percent to 10,808.

• Mangalam Cement promoter Vidula Consultancy Services acquired four lakh shares on Aug. 30.
• Anant Raj promoter Anil Sarin acquired 7.7 lakh shares from Aug. 28-29.

• 10:30am: Markit India PMI Services for Aug., prior 53.8
• 10:30am: Markit India PMI Composite for Aug., prior 53.9

• Bajaj Energy gets Securities and Exchange Board of India nod for Rs 5,450 crore IPO.

• ICICI Lombard General Insurance: Insurance Regulatory and Development Authority of India has waived off the earlier imposed lock in period on the equity shares held by Fairfax. Earlier the lock in period was till March 29, 2021 and currently Fairfax holds 10 percent stake in the company.
• Varun Beverages fixed floor price at Rs 644.08 for its QIP Issue. Floor Price is at premium of 2 percent to the closing prices. The issue opened on Sept. 3.
• Bank of Baroda will issue up to 15 crore shares under the ESOP scheme, with a proposed issue price at Rs 75.47 per share.
• VST Tillers Tractors August Sales: Power Tillers sales fell 13 percent to 1,437 units. Tractors sales jumped 57 percent to 813 units.
• MCX clarified whistle blower complaint is based on factually wrong premise and a clear attempt is made to tarnish the image of the exchange. The company said that none of the delivery failed on account of any quality parameter in cotton. “There is no overall storage capacity issue across warehouses for cotton and gold and the company may initiate appropriate legal actions as well,” it said.
• AstraZeneca Pharma stated that its diabetes drug dapagliflozin has shown significant benefits for the treatment of patients with heart failure.
• Steel companies in focus after India Ratings and Research cut steel demand growth estimate to 4 percent from 7 percent for the current financial year. The outlook was also been revised to ‘stable-to-negative’ from ‘stable’ for rest of 2019-20, given sluggish steel demand growth expectations owing to concerns in end-user sectors, primarily auto and real estate construction. (Bloomberg News)
• Tata Communications said that Neeco Global ICT Services has become a customer of the company, to market digital solutions for enterprises in Europe.
• Gas supply to Mahanagar Gas CNG stations in Mumbai restored. (Bloomberg News)
• Central Bank of India introduced repo-linked interest bank on home loans and vehicle loans with effect from Sept. 1.
• Future Market Networks: ESR arm has partnered with Future Group to invest Rs 300 crore to develop logistics infra assets in Nagpur and Jhajjar (NCR).
• Praj Industries’ proprietary technology to be deployed to produce ethanol and other co-products using sugarcane bagasse in the U.S.
• Gujarat Alkalies & Chemicals: Board to consider share-split on Sept. 27.
• IndiaMart InterMesh to acquire 26 percent stake in in Simply Vyapar App for Rs 31.2 crore.
• Indoco Remedies: ICRA revised long terms ratings to ‘A’ from ‘A+’
• Redington: Standard Chartered Private Equity reduced its stake in the company by 2.72 percent to nil.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.44 percent to 10,867 as of 8:20 a.m.

Asian stocks were mixed on Wednesday on low volumes after a disappointing U.S. manufacturing report reignited concerns about global economic growth.

Most Japanese shares dropped, along with those in Australia, while Chinese equities opened little changed. Stocks in Hong Kong, South Korea and Taiwan climbed. S&P 500 Futures, too, edged up.

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

Source: Bloomberg