Sensex Ends Over 700 Points Off Day’s High After MPC Decision; Nifty Closes Below 11,200

Indian equity benchmarks extended declines for the fifth consecutive trading session after RBI’s 25 basis-point cut in the policy rate. The benchmark indices registered their longest losing streak since July 25.

The S&P BSE Sensex closed 1.14 percent or 434 points lower at 37,673 after gaining 297 points intraday. The NSE Nifty 50 ended 1.23 percent lower to close at 11,174.75. The broader markets represented by the NSE Nifty 500 Index fell 1.16 percent.

The market breadth was tilted in favour of sellers. About 1,121 stocks declined and 657 shares advanced on National Stock Exchange.

Ten out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Bank Index’s 2.4 percent decline. On the flipside, the NSE Nifty IT Index was the top sectoral gainer, up 0.4 percent.

The 25 basis-point cut in the policy rate by the country’s central bank will have little impact as stocks had priced in the quantum of reduction, Bloomberg reported quoting Dharmesh Kant, head of retail research.

However, RBI lowering its growth forecast for the current fiscal is a key negative, Kant told Bloomberg.

India’s monetary policy committee on Friday cut interest rates for the fifth time this year to support growth in the economy. Rates have now been cut by 135 basis points since the start of the year.

The monetary policy stance has been maintained at ‘accommodative’, suggesting the next move in rates will either be another cut or a status quo.

Read to get up to speed:

• ‘RBI would not allow a cooperative bank to collapse’ – Governor Shaktikanta Das on PMC Bank crisis.
• RBI eases norms for microfinance lenders, hikes loan limit to Rs 1.25 lakh.
• Not aware of government demand for interim dividend, Shaktikanta Das says.
• RBI top team faces fire on financial stability risks.
• Here’s what brokerages made of RBI’s repo rate cut

U.S. equity futures drifted lower and European stocks pared a gain as investors awaited jobs numbers for clues on whether the Federal Reserve will cut rates this month to bolster the world’s largest economy.

• Futures on the S&P 500 Index fell 0.2 percent.
• The Stoxx Europe 600 Index increased 0.1 percent.
• The MSCI Asia Pacific Index climbed 0.1 percent.
• The MSCI Emerging Market Index gained 0.2 percent.

Get your daily fix of global markets here.
Source: Bloomberg

The yield on the 10-year note rose as much as five basis points to 6.66 percent.

The 10-year yield is expected to fall further going forward as RBI’s policy is bullish for bonds, Bloomberg reported quoting Vijay Sharma, executive vice president for fixed-income at PNB Gilts.

“As disappointment wanes, traders will come back to the markets and yields will go down with the new 10-year bond starts trading,” Sharma told Bloomberg.

Spandana Sphoorthy

• Stock rose as much as 5.2 percent to Rs 939.85.
• Axis Capital initiated coverage with ‘Buy’ rating and a price target of Rs 1,200.

UCO Bank

• Stock rose as much as 13.9 percent to Rs 13.10.
• Board approved proposal to issue equity shares worth Rs 2130 crore to government of India.

National Fertilizers

• Stock rose as much as 6 percent to Rs 25.50.
• Fertilisers sale for April-September (kharif season) up 25 percent on a yearly basis to 27 lakh MT.

Alembic Pharma

• Stock rose as much as 7.1 percent to Rs 563.
• JV (Aleor Dermaceutical) received U.S. FDA nod for ANDA spray to for treatment of skin diseases

The Indian rupee struggled to recover against the U.S. dollar.

The home currency depreciated 0.05 percent to 70.93 against the greenback.

Indian equity benchmarks extended declines for the fifth consecutive trading session after RBI’s 25 basis-point cut.

The S&P BSE Sensex fell 0.79 percent or 300 points to 37,794 as of 3 p.m. and the NSE Nifty 50 fell 0.94 percent to 11,207. The broader markets represented by the NSE Nifty 500 fell 0.87 percent.

India’s monetary policy committee on Friday cut interest rates for the fifth time this year to support growth in the economy.

• The committee decided to pare the benchmark repo rate by 25 basis points to 5.15 percent.
• Rates have now been cut by 135 basis points since the start of the year.
• The monetary policy stance has been maintained at ‘accommodative’, suggesting the next move in rates will either be another cut or a status quo.

Other Highlights:

• ‘RBI would not allow a cooperative bank to collapse’ – Governor Shaktikanta Das on PMC Bank crisis.
• RBI eases norms for microfinance lenders, hikes loan limit to Rs 1.25 lakh.
• Not aware of government demand for interim dividend, Shaktikanta Das says.

Shares of Just Dial extended declines for the second consecutive trading session.

The stock fell as much as 7.3 percent, the most since Aug. 13, to Rs 613.75, their lowest since May 17.

Trading in the company's call options totalled 722 contracts, compared with the average of 899 over the past 20 days, according to Bloomberg data. Trading in the company's put options totalled 1,109 contracts, compared with the average of 515 over the same period.

Essel Propack

• Stock rose as much as 2.1 percent to Rs 116.70.
• Trading volume was more than 15 times its 20-day average.

Triveni Turbine

• Stock fell as much as 1.6 percent to Rs 99.90.
• Trading volume was more than 20 times its 20-day average.

Bajaj Holdings

• Stock rose as much as 3 percent to Rs 3,630.
• Trading volume was more than 14 times its 20-day average.

Alembic Pharma

• Stock rose as much as 7 percent to Rs 563.
• Trading volume was almost 13 times its 20-day average.

The NSE Nifty Bank Index, which rose over 300 points intraday fell as much as 746 points to 37,668.25.

Indian equity benchmarks, which erased gains after RBI’s 25 basis-point cut in the policy rate, were trading at day’s low.

The S&P BSE Sensex fell over 600 points from day’s high to trade at 37,819 as of 2 p.m. and the NSE Nifty 50 fell 0.8 percent to 11,223. The broader markets represented by the NSE Nifty 500 Index fell 0.7 percent.

The market breadth was tilted in favour of sellers. About 1,040 stocks declined and 681 shares advanced on National Stock Exchange.

India’s monetary policy committee on Friday cut interest rates for the fifth time this year to support growth in the economy.

• The committee decided to pare the benchmark repo rate by 25 basis points to 5.15 percent.
• Rates have now been cut by 135 basis points since the start of the year.
• The monetary policy stance has been maintained at ‘accommodative’, suggesting the next move in rates will either be another cut or a status quo.

Other Highlights:

• ‘RBI would not allow a cooperative bank to collapse’ – Governor Shaktikanta Das on PMC Bank crisis.
• RBI eases norms for microfinance lenders, hikes loan limit to Rs 1.25 lakh.
• Not aware of government demand for interim dividend, Shaktikanta Das says.
• RBI top team faces fire on financial stability risks.
• Here’s what brokerages made of RBI’s repo rate cut

Shares of the micro-finance lender snapped its four-day fall and rose 5.2 percent intraday to a record of Rs 939.85.

Brokerage firm Axis Capital initiated coverage on the stock with a ‘Buy’ rating with a target price of Rs 1,200 each. That’s a potential upside of 34.3 percent from previous close.

Here’s what else Axis Capital had to say on the stock:

• Tapping into under-served rural opportunity; market attractive due to under-penetration.
• Rural market provides better market opportunity with lower competition.
• High degree of client engagement and robust risk management.
• Lowest operating expense ratio among peers.

The stock has risen 10 percent since its listing in late August this year.

Indian equity benchmarks, which erased gains after RBI’s 25 basis-point cut in the policy rate, were trading at day’s low.

The S&P BSE Sensex fell 0.5 percent after advancing 0.78 percent intraday and the NSE Nifty 50 fell 0.63 percent to 11,237. The broader markets represented by the NSE Nifty 500 Index fell 0.65 percent.

The Reserve Bank of India will remain accommodative as long as it is necessary to revive growth, its Governor Shaktikanta Das said.

“The Indian banking sector remains sound and stable and that there is no reason for unnecessary panic, RBI governor Shaktikanta Das said.

Shares of UCO Bank rose as much as 13.9 percent, the most since Aug. 30, to Rs 13.10.

The lender’s board approved the proposal to issue equity shares worth Rs 2,130 crore to Government of India.

Trading volume was 10 times its 20-day average, Bloomberg data showed. Of the shares traded, 44 percent were at the ask price and 38 percent were at the bid.

The yield on the 10-year note is expected to fall further going forward as RBI’s policy is bullish for bonds, Bloomberg reported quoting Vijay Sharma, executive vice president for fixed-income at PNB Gilts.

“As disappointment wanes, traders will come back to the markets and yields will go down with the new 10-year bond starts trading,” Sharma told Bloomberg.

The 25 basis-point cut in the policy rate by the country’s central bank will have little impact as stocks had priced in the quantum of reduction, Bloomberg reported quoting Dharmesh Kant, head of retail research.

However, RBI lowering its growth forecast for the current fiscal is a key negative, Kant told Bloomberg.

Highlights From RBI’s Monetary Policy Report

On Growth

• For 2020-21, structural model estimates GDP growth at 7 percent.
• Slowdown in consumption amplified by slowdown in labour intensive export sectors.
• Gross fixed capital formation decelerated due to slowdown in private investment, underlined by corporate deleveraging.

On Fiscal Pressures For Centre & States

• In order to meet expenditure commitments, revenue generation critical.
• Revenue expenditure picked up in July-August 2019 following general election result.
• Slowdown in state revenue expenditure seen in the first quarter of the previous fiscal; some pick up seen in July 2019.
• Combined gross fiscal deficit of centre and states seen at 5.9 percent in the current fiscal.

On developmental and regulatory policies

• RBI to permit domestic banks to offer foreign exchange prices to non-residents
• RBI to permit rupee derivatives with settlement in foreign currency to be traded in the International Financial Services Centres.

Other key highlights

• RBI acknowledged that bank credit growth has slowed and overall fund flows to the commercial sector have declined.
• The recent recapitalisation of public sector banks augurs well for improving credit flow, which are important for reviving private investment activity.
• A major challenge for government finances in FY20 will be to stick to budgeted spending and revenue targets.

Indian equity indices erased gains after the country’s central bank cut interest rates for the fifth time this year.

The S&P BSE Sensex and the NSE Nifty 50 traded little changed at 38,108 and 11,301 respectively as of noon. The broader markets represented by the NSE Nifty 500 fell 0.14 percent.

The NSE Nifty Bank Index, which rose as much as 1.1 percent or 316 points, erased gains and fell as much as 0.7 percent.

The Indian rupee traded little changed at 70.80 against the U.S. dollar, while the yield on the 10-year note rose as much as five basis points to 6.6 percent.

Stark polarisation in the Indian market - where investors see value in a handful of large cap companies - is not sustainable and can’t last for a long time.

That’s according to Samir Arora, veteran investor and Fund Manager of Helios Capital, who believes in a more “mix-and-match strategy”. "If you believe that the market in the end is going to be okay, then it has to broaden," he said.

Watch the full interaction here:

Shares of Essel Propack fluctuated between gains and losses to trade 0.4 percent higher at Rs 114.80.

About 30 lakh shares of the company changed hands in three large trades, Bloomberg data showed. Buyers and sellers were not known immediately.

Trading volume was more than 20 times its 20-day average, Bloomberg data showed.

Shares of Alembic Pharmaceuticals rose 2.1 percent to Rs 537. The stock had advanced 3.1 percent intraday.

The company's joint venture, Aleor Dermaceuticals Ltd., has received U.S. Food and Drug Administration approval for clobetasol propionate spray, the drugmaker said in a stock exchange filing.

The stock traded at 18 times its estimated earnings per share for the coming year, according to Bloomberg data.

Shares of Godrej Consumer Products rose as much as 3.8 percent to Rs 685.

The company received a ‘relatively mixed demand’ during September quarter, according to its statement on the exchanges.

“The demand in India continued to be challenging, impacted by a general consumption slowdown. Despite sluggish demand conditions, we recorded higher than mid-single-digit volume growth. The uplift in volume growth was led by recovery in household insecticides, new product launches, effective marketing campaigns and tactical consumer offers,” the statement said, adding that the sales growth in during the period will be very close to the June quarter.

Nine out of 11 sectoral gauges compiled by NSE traded higher led by the NSE Nifty PSU Bank Index’s 1.25 percent gain. On the flipside, the NSE Nifty Media Index was the worst sectoral performer, down 1.7 percent.

Indian equity indices continued to trade higher.

The S&P BSE Sensex rose 0.6 percent to 38,333 as of 11 a.m. and the NSE Nifty 50 rose 11,363. The broader markets represented by the NSE Nifty 500 Index rose 0.36 percent.

Nifty’s 11,400 call option contract was among the most active Nifty option contracts on National Stock Exchange.

Premium on the contract, which is set to expire on Oct. 10, rose 13.80 percent to Rs 93.20. Over 3.4 lakh shares were added to the open interest which stood at over 15.13 lakh shares.

The Markit India Services Business Activity Index fell to 48.7 last month from 52.4 in August. A reading below 50 indicates contraction in activity, while a number above it signals expansion.

The Nikkei India Composite PMI Output Index also fell to 49.8 in Septeber from 52.6 in the previous month.

Shares of Housing Development & Infrastructure fell for the thirteenth consecutive trading session and were locked in lower circuit of 5 percent at Rs 3.50.

The Economic Offences Wing of the Mumbai Police has arrested realty firm Housing Development & Infrastructure Ltd. directors Rakesh and Sarang Wadhawan in the PMC Bank case.

The EOW also attached Rs 3,500 crore worth of properties belonging to the Wadhawans and the company, a senior official at the EOW told BloombergQuint. Sarang Wadhawan is the managing director, while his father Rakesh Wadhawan is the chairman at the Mumbai-based slum redeveloper.

Shares of Coffee Day Enterprises halted a thirteen-day losing streak and hit an upper circuit of 5 percent at Rs 45.55.

About 10.5 lakh shares f the company changed hands in a large trade, Bloomberg data showed. Buyers and sellers were not known immediately.

Trading volume was more than 20 times its 20-day average, according to Bloomberg data. Of the shares traded, 97 percent were at the ask price and 1 percent were at the bid.

Shares of Yes Bank swung to a fall of as much as 2.4 percent after rising as much as 8 percent.

About 10 lakh shares of the Mumbai-based lender changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

The stock settled 32.97 percent higher at Rs 42.55 on Thursday after Rajat Monga, group president and former chief financial officer resigned amid continued restructuring at the lender under a new management that took charge earlier this year.

Shares of HDFC rose as much as 1.6 percent to Rs 2,007.

The company’s profit on sale of investments rose 83 percent on a yearly basis to Rs 1,632 crore in September quarter. The profit included profit on sale of part stake of equity shares in Gruh Finance. The income from dividend stood at Rs 1,074 crore during the period versus Rs 6 crore clocked in the same quarter last year. Last year income from dividend was received in the first quarter.

The stock was the top gainer on Sensex and Nifty. Of the shares traded, 45 percent were at the ask price and 36 percent were at the bid, according to Bloomberg data.

• Coffee Day Enterprises: About 10.5 lakh shares changed hands in a large trade
• Jagran Prakashan: About 10.2 lakh shares changed hands in a large trade

Buyers and sellers were not known immediately
Source: Bloomberg

Shares of Manpasand Beverages were locked in lower circuit of 5 percent for the ninteenth consecutive trading session, their longest ever losing streak.

Batliboi & Purohit resigned as statutory auditor to Manpasand Beverages Ltd., citing its inability to audit because of lack of cooperation from the maker of MangoSip juice.

“The firm has considered recent developments of an ongoing litigation among the board of directors and subsequent resignation of the directors along with the company secretary. Also, our audit team members were not allowed to enter the Vadodara factory for conducting the statutory audit,” according to the auditor’s resignation letter uploaded by Manpasand Beverages on the bourses.

The stock has declined nearly 94 percent in the last 12 months. The Relative Strength 11, indicating that the stock may be oversold, according to Bloomberg data.

The NSE Nifty PSU Bank Index advanced over 1 percent, led by the rally in Syndicate Bank, Allahabad Bank and State Bank of India.

Indian equity benchmarks opened higher ahead of RBI policy. The benchmark indices had declined for four consecutive trading session.

The S&P BSE Sensex rose 0.58 percent to 38,337 and the NSE Nifty 50 rose 0.56 percent to 11,376.80. The broader markets represented by the NSE Nifty 500 Index rose 0.5 percent.

The market breadth was tilted in favour of buyers. About 924 stocks advanced and 412 shares declined on National Stock Exchange.

Ten out of 11 sctoral gauges compiled by NSE traded higher, led by the NSE Nifty PSU Bank Index’s 1.23 percent gain. On the flipside, the NSE Nifty Media Index was the top sectoral loser, down 0.57 percent.

The yield on the 10-year note fell as much as one basis point to 6.6 percent.

Futures

• Nifty October futures closed at 11,361.8, premium of 47.8 points versus 69.9 points.
• Nifty October futures up 2 percent, adds 3.5 lakh shares in open interest.
• Nifty Bank futures closed at 28,570.8, premium of 156.8 points versus 149 points.
• Nifty Bank Oct futures open interest up 5 percent, adds 73,000 shares in open interest.

Options

• Nifty PCR at 1.17 versus 0.96 (across all series)

Nifty Monthly Expiry: Oct. 10

• Maximum open interest on call side at 11,500 (13 lakh shares)
• Maximum open interest on put side at 11,200 (8.7 lakh shares)
• Open interest addition seen at 11,400C (+9.4 lakh shares), 11,500C (8 lakh shares)

Nifty Monthly Expiry: Oct. 31

• Maximum open interest on call side at 12,000 (22.3 lakh shares)
• Maximum open interest on put side at 11,000 (22.1 lakh shares)

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.11 percent to 70.81 against the greenback.

Indian equity benchmarks are set to open higher.

The S&P BSE Sensex rose 0.55 percent to 38,321 during the pre-market trade and the NSE Nifty 50 rose 0.83 percent to 11,405.

• Maharashtra Seamless promoter group Sudha Apparels acquired 1 lakh shares on Sept. 30.
• Aarti Industries promoters sold 25,000 shares on Sept. 30.

• Dewan Housing Finance Corporation, Refex Industries, Unitech to move into ASM Framework
• Gyscoal Alloys, KSK Energy Ventures, MIRC Electronics to move into short term ASM Framework
• IIFL Wealth Management price band revised to 20 percent.

• IRCTC IPO subscribed 112 times on final day.

• HDFC Q2 Update: Profit on sale of investments rose 83 percent on a yearly basis to Rs 1,632 crore. Profit included profit on sale of part stake of equity shares in Gruh Finance. Income from dividend at Rs 1,074 crore versus Rs 6 crore. Last year income from dividend was received in the first quarter.
• Sun Pharma Advanced Research: U.S. FDA designated company’s drug as an orphan treatment for neonatal seizures. U.S. FDA awarded designation to the treatment, which has generic name Phenobarbital, on Oct. 2.
• Tata Steel is weighing a sale of its stake in an e-commerce joint venture as India’s largest steel manufacturer looks to offload non-core assets to pare debt, Bloomberg reported quoting people familiar with the matter.
• Manpasand Beverages: Batliboi & Purohit have resigned from the post of the statutory auditor of the company with immediate effect. The firm said that it has resigned due to recent developments of ongoing litigation amongst board of directors and subsequent resignation of the directors along with the company secretary. The firm also stated in their resignation letter that their audit team members were not allowed to enter the Vadodara factory for conducting the statutory audit.
• Magma Fincorp said that it remains well-capitalised and has capital adequacy ratio of 24.4 percent. The company has liquidity cushion of Rs 1,800 crore as on Sept. 30, which is three times of all the debt repayments amounting to Rs 650 crore due till March 2020.
• Entertainment Network to hold 49 percent stake in Global Entertainment Network, a unit of Qatar’s Marhaba FM channel. Services to be offered under the brand name of “MirchiOne” in Qatar.
• Dhampur Sugar Mills launched country liquor at its distillery unit at Dhampur.
• UCO Bank: Board approved the proposal to issue equity shares worth Rs 2,130 crore to Government of India.
• National Fertilizers: Fertilisers sale for April-September (kharif season) up 25 percent on a yearly basis to 27 lakh million tonnes.
• New India Assurance: Signed deed for entering into the Inter Creditor Agreements for the company's exposure to the debt instruments of Reliance Home Finance and Dewan Housing Finance.
• Ujjivan Financial Services: Sundaram MF decreased its stake to 3.02 percent from 5.12 percent in the company.
• HDIL: EOW has arrested Rakesh and Sarang Wadhawan, to be produced before court on Oct. 4.
• Engineers India’s bid for the acquisition of Projects and Development India has not been accepted.
• Punjab & Sind Bank to link all new floating rate for personal, retail and MSMEs to the repo rate with effect from Oct. 1.

• India’s Monetary Policy Committee is seen cutting rates once again as demand in the economy remains weak.
• A Bloomberg poll of 25 economists shows that the repo rate will be cut by another 25 basis points to 5.15 percent when the committee meets today.
• Few economists also see the possibility of a larger cut in rates of up to 40 basis points.
• So far this year, the MPC has cut rates by 110 basis points.

Read to get up to speed:

• How low can rates go?
• With rate cut a given, RBI communication key to market recovery
• Banking woes add to RBI worries as it moves to cut rates
• Another rate cut may not help India

• The S&P 500 rose the most in a month after climbing back from a drop of more than 1 percent sparked by the weakest reading on the U.S. services sector in three years.
• Oil extended its longest losing streak in 10 months. Futures in New York settled lower for the eighth straight session on Thursday, and remained on track for the largest weekly loss since July.

Get your daily fix of global markets here.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.23 percent to 11,385 as of 8:10 a.m.

Stocks in Asia were mixed on Friday as investors awaited the key monthly American employment report and subsequent comments due from Federal Reserve Chairman Jerome Powell.

Japanese shares edged lower, with the Topix index at risk of capping its biggest weekly decline since May. Equities in Hong Kong, South Korea and Australia were little changed.

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