RBI’s Unprecedented Rate Cut Fails To Lift Sensex, Nifty
Closing Bell: Sensex, Nifty Resume Declines After RBI's Fourth Rate Cut This Year
Indian equity benchmarks ended lower after the Reserve Bank of India reduced growth forecast for the year even as it cut benchmark rate by an unprecedented 35 basis points.
The S&P BSE Sensex ended 0.77 percent lower at 36,690.50 and the NSE Nifty 50 fell 0.85 percent to 10,855.50. The broader market index represented by NSE Nifty 500 Index ended 0.72 percent lower.
Also, RBI trimming its growth projection below 7 percent for financial year ending 2020 may not “go down well” with the markets in the near term. That’s according to Rajiv Singh, chief executive officer at Karvy Stock Broking, in an emailed statement.
There could be further downside risk from a 6.9 percent growth projection in the coming quarters, said Shubhada Rao, group president & chief economist, Yes Bank, in an interview to BloombergQuint.
Particularly, we believe that the last quarter growth forecast (fourth quarter of FY20) is not likely to be met.Shubhada Rao, Group President & Chief Economist, Yes Bank
Nifty Index offers a buying opportunity at current level of 10,850, according to Ruchit Jain, technical analyst at Angel Broking told BloombergQuint. “One should expect the index to advance towards 11,000. Once that mark is breached post tomorrow’s weekly expiry, then expect a rally towards 11,120-levels,” The stop-loss should be placed at Monday’s low of 10,780, he said.
The market breadth was tilted in favour of sellers. About 945 stocks fell and 819 shares advanced on the National Stock Exchange.
Eight out of 11 sectoral gauges compiled by NSE fell, led by the NSE Nifty PSU Bank Index’s 3.36 percent decline. On the flipside, the NSE Nifty Media Index was the top sectoral gainer, up 1.89 percent.
Cipla Gains After Q1 Results
Shares of the drugmaker jumped over 5 percent to Rs 525.85 each. The company announced its results for the April-June period today.
Key Highlights (YoY)
- Revenue rose 1.3 percent to Rs 3989 crore.
- Net profit rose 6 percent to Rs 478.2 crore.
- Ebitda rose 24.5 percent to Rs 904.6 crore.
- Operating margin at 22.6 percent versus 18.4 percent.
The stock traded 15 percent below the Bloomberg consensus one-year target price.
Adani Ports Declines After Q1 Results
Shares of the Gautam Adani-led group company fell as much as 3 percent to 365.65 apiece. The company reported its first quarter results today.
Key Highlights (YoY)
- Revenue up 15.9 percent to Rs 2,794 crore
- Net profit jumped 48 percent to Rs 1,022 crore.
- Ebitda up 16 percent to Rs 1,843 crore.
- Operating margin at 65.95 percent versus 65.88 percent.
Twenty one out of 24 analysts tracked by Bloomberg had a ‘Buy’ recommendation on the stock, while two analysts recommended ‘Hold’. One analyst recommended ‘Sell’.
Indiabulls Housing Slumps To Over Four-Year Low
Shares of the non-banking lender declined close to 13 percent to Rs 447.40 apiece, its lowest price since December 2014.
Key Earnings Highlights (Q1, YoY)
- Net revenue fell 12 percent to Rs 1,522 crore. (estimate Rs 1,544 crore)
- Net interest income fell 12.7 percent to Rs 1,475 crore.
- Net Income fell 24 percent to Rs 801 crore. (estimate Rs 998 crore)
- Gross NPAs at 1.47 percent versus 0.88 percent (QoQ)
- Net NPAs at 1.1 percent versus 0.69 percent (QoQ)
The stock has fallen 65 percent in the past 12 months compared to a 2 percent fall in the Sensex.
Lupin Gains After Q1 Results
Shares of the drugmaker snapped its two-day fall and rose nearly 3.3 percent to Rs 775 each. The company announced its June quarter results today.
Key Highlights (YoY):
- Revenue up 14 percent to Rs 4,418 crore
- Net profit jumped 49 percent to Rs 303 crore.
- Ebitda up 63 percent to Rs 860 crore.
- Operating margin at 19.5 percent versus 13.7 percent.
Trading in the company's call options totaled 2,604 contracts, compared with the average of 1,462 over the past 20 days. Trading in the company's put options totaled 1,609 contracts, compared with the average of 522 over the same period.
Market Check: Sensex, Nifty Decline; Auto Stocks Drag
Indian equity benchmarks declined sharply in afternoon trade driven by losses in Indiabulls Housing and automakers.
The S&P BSE Sensex declined 0.34 percent to 36,860.45 and while the the NSE Nifty 50 traded 0.40 percent lower at 10,905.15 as of 1:50 pm. The broader market represented by the NSE Nifty 500 Index declined 0.22 percent.
Six of the 11 sectoral gauges compiled by National Stock Exchange fell, led by 1.83 percent decline in Nifty PSU Bank Index. On the flipside, Nifty Media Index was the top gainer, up 2.89 percent.