Sensex, Nifty End At Two-Month Low As Foreign Investors Continue Selling

Indian equity benchmarks ended lower after a one-day breather on Friday as foreign investors continued to sell.

The S&P BSE Sensex ended 0.52 percent lower at 37,686.37 and the NSE Nifty 50 ended at 11,189.20, down 0.84 percent. The broader market represented by the NSE Nifty 500 Index ended 0.91 percent lower.

Markets are getting "severely punished" due to continued selling from foreign portfolio investors, said Parthiv Shah, director, Tracom Stock Brokers, in an interview to BloombergQuint. "It is no longer a polarised market as stronger stocks are falling too. This is because most of these stocks are over-owned by foreign investors."

Foreign institutional investors have sold Rs 11,369 crore-worth equities so far this month, according to National Securities Depository Limited data. This is the worst monthly sell off in 2019.

The market breadth was tilted in favour of sellers. About 504 stocks advanced and 1,274 shares declined on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Media Index’s 3.28 percent fall. On the flipside, the NSE Nifty IT Index was the only sectoral loser, up 0.34 percent.

Shares of the Gujarat-based drugmaker rose 4.5 percent intraday to Rs 543.20 apiece. The company reported its June quarter results today.

Key Highlights (YoY)

• Revenue up 10 percent to Rs 948.9 crore.
• Net profit shot up 30.9 percent to Rs 118.5 crore.
• Ebitda up 48.9 percent at Rs 224.9 crore.
• Margin at 23.7 percent versus 17.5 percent.
• Raw materials as percentage of sales at 21.5 percent.

The stock traded 19 times its estimated earnings per share for the coming year, Bloomberg data showed. The company’s annual general meeting is scheduled today.

Markets are getting "severely punished" due to continued selling from foreign portfolio investors, said Parthiv Shah, director, TRACOM Stock Brokers, in an interview to BloombergQuint. "It is no longer a polarised market as stronger stocks are falling too. This is because most of these stocks are over-owned by foreign investors."

Shah said the markets will stay tepid for the next 3-6 months but will offer new investing opportunities.

Shares of the paint maker jumped as much as 4.5 percent to Rs 422 each. The company announced its results today.

Key Highlights (YoY):

• Revenue rose 9 percent to Rs 1,542 crore.
• Net profit up 5 percent to Rs 146 crore.
• Ebitda up 14 percent to Rs 254 crore.
• Margins at 16.5 percent versus 15.8 percent.

The stock traded at 41 times its estimated earnings per share for coming year, Bloomberg data showed.

Shares of the country’s largest state-owned bank pared losses and was trading at Rs 340.70 each, down 0.55 percent. The stock fell as much as 1.7 percent intraday.

SBI lowered deposit interest interest rates in the view of falling interest rate scenario and surplus liquidity in the system. reported Bloomberg citing the bank’s statement.

Interest rates were lowered by up to 20 basis points in retail segment and 35 basis points in the bulk segment, Bloomberg said. For term deposits with shorter tenors of up to 179 days, the interest rate was slashed by 50-75 basis points.

The stock has gained 20 percent in the past 12 months compared to a 0.7 gain in the Sensex.

Indian equity benchmarks witnessed a sharp fall in the afternoon trade led by losses in Indiabulls Housing and Grasim Industries.

The S&P BSE Sensex fell as much as 1 percent to 37,540.60 and the NSE Nifty 50 fell as much as 1.13 percent to 11,156.55. The broader market index represented by the NSE Nifty 500 Index fell as much as 1.15 percent.

There is a possibility of a rally in Nifty Index towards 11,300 by the end of this week, said Jignesh Mehta, technical analyst at kiranjadhav.com, in an interview with BloombergQuint. However, the rally could happen only if the index survives the key support level of 11,150, he said.

The market breadth was tilted in favour of sellers. About 1,255 stocks declined and 457 shares advanced on National Stock Exchange.

All sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Auto Index’s 2.75 percent fall.

Shares of the Karnataka-based specialty pharma company erased opening losses and gained as much as 0.6 percent to Rs 354 each.

The company received five observations after U.S. FDA inspected its Raichur plant last week, according to an exchange filing. However, these did not include any repeat or data integrity observations, the filing said.

The stock traded 15 percent below the Bloomberg consensus one year target price, according to Bloomberg data.

Shares of Sleepwell mattress maker Sheela Foam Ltd. declined for a third straight session, falling as much as 1.18 percent to Rs 1,260.05.

The company’s board has approved acquisition of Spain-based company Interplasp SL for €42 million, it said in an exchange filing. The company is engaged in manufacturing and marketing of polyurethane foam for mattresses. The acquisition will give Sheela Foam a presence in Europe, the world's largest polyurethane foam market, the company added.

The company trades at 35 times its estimated earnings per share for the coming year.

Indian equity benchmarks were trading lower during the forenoon trade. ICICI Bank emerged as the top gainer after its June quarter earnings were announced on Saturday.

The S&P BSE Sensex fell as much as 0.43 percent to 37,720.60 and the NSE Nifty 50 fell as much as 0.66 percent to 11,210.80. The broader market index represented by the NSE Nifty 500 Index fell as much as 0.53 percent.

The market breadth was tilted in favour of sellers. About 1,193 stocks declined and 508 shares advanced on National Stock Exchange.

Nine out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Auto Index’s 2.96 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.16 percent.

Shares of the country’s largest telecom operator fell as much as 26.5 percent to trade at a lifetime low of Rs 8.05 apiece. The company announced its first quarter earnings on Friday.

Vodafone Idea Q1 (QoQ)

• Revenue down 4.3 percent to Rs 11,269.9 crore (Est Rs 11,741 crore)
• Net loss at Rs 4,873.9 crore versus Net loss of Rs 4,881.9 crore (Est Net loss to Rs 3,557 crore)
• Ebitda up 2 times to Rs 3,650 crore (Est Rs 1,925 crore)
• Margin at 32.4 percent versus 15.2 percent (Est 16.4 percent)
• Depreciation up 31 percent, finance cost up 26 percent.
• ARPU up 3.9 percent to Rs 108 versus Rs 104.

The trading volume was 16 times the 20-day average for this time of the day, Bloomberg data showed.

Shares of the private lender gained for the third-straight session and rose 4.7 percent intraday to Rs 435.35 each.

Also, around 27 lakh shares changed hands in multiple block deals on the stock exchanges, according to Bloomberg data. The company also reported its first quarter results on Saturday.

ICICI Bank Q1 (YoY)

• NII up 27 percent to Rs 7,737.43 crore
• PPoP stood at Rs 6288.46 crore up 8 percent (YoY), 1 percent (QoQ)
• PAT at Rs 1908.03 versus loss of Rs 119.55 crore
• Gross NPAs at 6.49 percent versus 6.70 percent (QoQ)
• Net NPAs at 1.77 percent versus 2.06 percent (QoQ)

Out of the 53 analysts tracked by Bloomberg, 50 recommended ‘Buy’ while three analysts had a ‘hold’ rating.

Shares of the company slumped 7.90 percent intraday to Rs 575.

Indiabulls Housing Finance Ltd. rejected Subramanian Swamy's allegations that the company has embezzled more than Rs 1 lakh crore from the National Housing Bank. Loans outstanding as on date from NHB to Indiabulls Housing is zero, it said in an exchange filing. The company, in its history, has never taken any loan or refinancing facility from NHB, it added.

The stock trades 62 percent below Bloomberg consensus one-year target price. It trades 5.5 times its estimated earnings per share for the coming year.

Shares of the carmaker fell as much as 3 percent to Rs 5,630.25 apiece, its lowest since January 2017.

The shares have fallen 40 percent in the past 12 months compared with a 1.6 percent gain in the Sensex. The stock traded at 23 times below its estimated earnings per share for the coming year.

Here’s what brokerages had to say on the stock:

Kotak Securities

• Maintained ‘Reduce’ and cut target price to Rs 5,200 from Rs 6,000.
• Q1 Ebitda higher than estimates led by lower other expenses and higher ASP.
• Volume trajectory to remain challenging in FY20.
• Cut earnings estimates by 10-18 percent over FY20-22, mainly driven by 6-9 percent cut in volume estimates.

Nomura

• Maintained ‘Neutral’ and cut target price to Rs 6,290 from Rs 6,717.
• Demand conditions remain tough, regulatory costs adding to margin pressure.
• Company gave no volume guidance given the severe slowdown in the sector and no signs of improvement.
• Lower our volume growth estimates to -3 percent to 9 percent for FY20-21.

Indian equity benchmarks were off to a tepid start after they closed higher on Friday.

The S&P BSE Sensex and the NSE Nifty traded little changed at 37,874.30 and 11,269.70 as of 9:20 am. The broader market index represented by the NSE Nifty 500 Index declined 0.17 percent.

The market breadth was tilted in favour of sellers. About 739 stocks declined and 688 shares advanced on National Stock Exchange.

Six out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Auto Index’s 2.18 percent fall. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.50 percent.

The Indian rupee opens lower against the U.S. dollar. The home currency depreciates 0.03 percent to 68.93 against the greenback.

It is important to note that foreign funds sold a net Rs 3,300 of Indian assets -- stocks, government and corporate bonds, on Friday, provisional NSE data show.

While mutual funds were biggest buyers of sovereign debt on Friday, foreign banks were biggest sellers, according to CCIL data.

August Futures

• Nifty August futures closed at 11,327, premium of 43 points versus 49 points.
• Nifty Aug futures across open interest down 1.5 percent, sheds 2.6 lakh shares in open interest.
• Bank Nifty August futures closed at 29,465, premium of 140 points versus 158 points.

Options

• Nifty PCR at 1.36 (across all series)

Nifty Weekly Expiry 1-Aug

• Max open interest on call side at 11,400 (18.5 lakh shares)
• Max open interest on put side at 11,200 (21.5 lakh shares)
• Max open interest addition seen in 11,200P (+11.5 lakh shares), 11,100P (+5.8 lakh shares), 11,300C (+4.8 lakh shares)

Nifty Monthly Expiry 29 -Aug

• Max open interest on call side at 12,000 (13.9 lakh shares)
• Max open interest on put side at 11,000 (29 lakh shares)

Nifty Earnings Reaction To Watch

Vedanta Q1 (YoY)

• Revenue down 3.7 percent to Rs 21,374 crore (Est Rs 20917 crore)
• Net profit down 11.9 percent to Rs 1,351 crore (Est Rs 1333.5 crore)
• Ebitda down 16 percent to Rs 5,198 crore versus Rs 6,190 crore (Est Rs 5,521.8 crore)
• Margin at 24.3 percent versus 27.9 percent (Est 26.4 percent)

Vodafone Idea Q1 (QoQ)

• Revenue down 4.3 percent to Rs 11,269.9 crore (Est Rs 11,741 crore)
• Net loss at Rs 4,873.9 crore versus Net loss of Rs 4,881.9 crore (Est Net loss to Rs 3,557 crore)
• Ebitda up 2 times to Rs 3,650 crore (Est Rs 1,925 crore)
• Margin at 32.4 percent versus 15.2 percent (Est 16.4 percent)
• Depreciation up 31 percent, finance cost up 26 percent.
• ARPU up 3.9 percent to Rs 108 versus Rs 104.

ICICI Bank Q1 (YoY)

• NII up 27 percent to Rs 7,737.43 crore
• PPoP stood at Rs 6288.46 crore up 8 percent (YoY), 1 percent (QoQ)
• PAT at Rs 1908.03 versus loss of Rs 119.55 crore
• Gross NPAs at 6.49 percent versus 6.70 percent (QoQ)
• Net NPAs at 1.77 percent versus 2.06 percent (QoQ)

Teamlease Services Q1 (YoY)

• Revenue up 22.5 percent to Rs 1,251.2 crore.
• Net profit down 13.8 percent to Rs 18.8 crore.
• Ebitda up 9.9 percent to Rs 22.2 crore.
• Margin at 1.8 percent versus 2 percent.

ABB Q2 (YoY)

• Revenue up 3.6 percent to Rs 1,725.8 crore.
• Net profit up 27.6 percent to Rs 130.4 crore.
• Ebitda up 38.6 percent to Rs 123.9 crore versus Rs 89.4 crore.
• Margin at 7.2 percent versus 5.4 percent.
• Employee Expenses down 6 percent, subcontracting expenses down 14 percent aid margin expansion.

Music Broadcast Q1 (YoY)

• Revenue down 7.8 percent to Rs 69.8 crore.
• Net profit down 37.8 percent to Rs 8.4 crore.
• Ebitda down 14.2 percent to Rs 22.4 crore.
• Margin at 32.1 percent versus 34.5 percent.

Polycab Q1 (YoY)

• Revenue up 14.9 percent to Rs 1933 crore.
• Net profit up 75.7 percent to Rs 135.3 crore.
• Ebitda up 19.2 percent to Rs 205.3 crore.
• Margin at 10.6 percent versus 10.2 percent.
• Other Income of Rs 52 crore in current quarter.

KPIT Technologies Q1 (QoQ)

• Revenue up 1 percent to Rs 505.8 crore.
• Net profit at Rs 31 crore versus Rs 30.9 crore.
• Ebitda up 7.3 percent to Rs 40.9 crore.
• Margin at 8.1 percent versus 7.6 percent.
• Exceptional Loss of Rs 24.2 crore in base quarter.

Havells Q1 (YoY)

• Net sales up 4.5 percent to Rs 2,711.97 crore.
• PAT down 17 percent to Rs 174 crore.
• Ebitda down 14 percent to Rs 276 crore.
• Margin at 10.2 percent versus 12.4 percent.

MOIL Q1 (YoY)

• Net sales down 11 percent to Rs 280 crore.
• PAT down 20 percent to Rs 90.67 crore.
• Ebitda down 14 percent to 159.45 crore.
• Margin at 57 percent versus 58.8 percent.

Nifty Earnings To Watch

• Dr. Reddy's Laboratories

Other Earnings To Watch

• DLF
• Alembic Pharmaceuticals
• Kansai Nerolac Paints
• Muthoot Capital Services
• Navin Fluorine
• Orient Cement
• Rane Engine Valve
• Bank of Maharashtra
• Bharat Electronics
• Castrol India
• Century Enka
• Sun Pharma Advanced Research Company
• Supreme Industries
• Tata Sponge Iron
• Transport Corporation of India
• V2 Retail
• Chennai Petroleum Corporation
• Cochin Shipyard
• Dalmia Bharat Sugar and Industries
• EID Parry
• General Insurance Corporation of India
• GHCL
• Gujarat Borosil
• IFB Agro Industries
• India Grid Trust
• JMC Projects (India)
• Sanofi India
• Shriram City Union Finance
• Strides Pharma Science

• Maruti Suzuki announces sale of over 61,000 units of Next Gen Ertiga, since its launch in November 2018. This is a 60 percent growth compared to the same months in the previous year. The company achieved over 8,000 units average monthly sales in the last four months.
• Cadila Healthcare received a Form 483 with zero observations from the U.S. FDA, for its API manufacturing facility at Ankleshwar.
• Sheela Foam: Board approved acquisition of Spain-based company Interplasp SL for €42 million. The target company is engaged in manufacturing and marketing of polyurethane foam for bedding.
• Manpasand Beverages: Three members of the management were granted bail by the Gujarat High Court on July 25. They were taken on judicial custody on May 24.
• Granules India received a Form 483 with one observation from the U.S. FDA, for its API manufacturing facility at Hyderabad. The company stated that this observation was procedural in nature.
• IDFC has decided that it will not proceed with selling its entire stake in IDFC Securities to the Chatterjee Group. The corporation stated that it will continue to look at others option to sell its securities business.
• Welspun Corp: Srinivasan Krishnan resigned from post of chief executive officer with effect from July 31, due to personal reasons.
• NHPC: Resolution Plan submitted by the company for its Lanco Testa Hydro Project has been approved by Hyderabad’s NCLT bench.
• Dhanuka Agritech: Catalyst Trusteeship acquired a 30 percent stake in the company via pledge of shares given by the company’s promoter Triveni Trust.
• Future Lifestyles Fashion: Board approved issuance of 64.8 lakh equity shares at Rs 461 per share, aggregating to Rs 300 crore via preferential basis to AION Capital Partners.
• Uflex has entered into an agreement to sell 82 percent stake of its arm Utech Developers to Montage Enterprises for Rs 125.05 crore.
• Supreme Petrochem to shut down its gas-based captive power plant at its Nagothane factory.
• Allahabad Bank: Board to meet on July 31 to consider raising Rs 4,000 crore via various modes of financing.
• KPIT Technologies: Board approved merger of arm Impact Automotive Solutions with the company.
• GTPL Hathway: Viren Thakker resigned from his post as chief financial officer with effect from July 31.
• Power Mech Projects: Andhra Pradesh government cancelled an order worth Rs 572 crore given to the company. The company stated that since no construction activity had commenced, there is no implications on its financials.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.20 percent lower at 11,306.50 as of 8:40 a.m.

Asian stocks dipped at the start of an event-filled week that features the resumption of U.S.-China trade talks, an expected Federal Reserve interest-rate cut, further corporate-earnings releases and the monthly American payrolls report.

The biggest decline was in South Korea on earnings concerns, with equity benchmarks also slipping in Japan and Hong Kong. China was little changed. Australian shares 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.