Sensex, Nifty Recover On Likely Tax Relief For FPIs

Indian equity benchmarks closed higher for the first time this week as government may soon roll back of superrich tax on foreign investors announced in the Budget last month.

The S&P BSE Sensex rose 0.63 percent to close at 36,701.16 and the NSE Nifty 50 gained 0.82 percent to 10,829.35. The broader markets represented by the NSE Nifty 500 Index advanced 0.82 percent.

“The expectation is the surcharge on foreign portfolio investors may be ruled out,” said Dharmesh Kant, head of retail research at Indianivesh Securities, told Bloomberg, “Investors who were sitting on short positions have squared it off to play it safe for Monday.”

The market breadth was tilted in favour of buyers. About 1,019 stocks advanced and 768 shares declined on National Stock Exchange.

Eight of the 11 sectoral gauges compiled by NSE ended higher, led by the NSE Nifty Metal Index’s 4.18 percent gain. Nifty FMCG Index was the top sectoral loser, down 0.49 percent.

Shares of the cable TV operator gained for the fifth straight session, rising as much as 9.8 percent intraday to Rs 97.70 apiece. The stock has risen 38.5 percent so far this week.

Den Networks' stock has gained 37 percent since Aug. 12, when Reliance Industries announced that Jio Fiber broadband service will be launched pan-India on Sept. 5.

The relative strength index on the stock was over 70, indicating it may be overbought.

Den Networks’ shares have risen 46 percent since Oct. 17, 2018, when Reliance Jio Infocomm Ltd. said it would acquire a majority stake in the company and GTPL Hathway Ltd. to expand its broadband reach and pool of cable subscribers.

Indian equity benchmarks traded higher as government mulled a rollback of superrich tax on foreign investors announced in the Budget last month.

The government is working on steps to give cushion to the economy, a Bloomberg report said, citing an official.

The S&P BSE Sensex rose 0.66 percent to 36,717.40 and the NSE Nifty 50 rose 0.84 percent to 10,822 as of 2:20 pm. The broader markets represented by the NSE Nifty 500 Index advanced 0.80 percent.

The market breadth was tilted in favour of buyers. About 996 stocks advanced and 761 shares declined on National Stock Exchange.

Nine of the 11 sectoral gauges compiled by NSE traded higher, led by the NSE Nifty Metal Index’s 3.27 percent gain. Nifty FMCG Index was the top sectoral loser, down 0.45 percent.

Shares of the mining conglomerate snapped its three-day fall and rose as much as 5.9 percent to Rs 136.60 apiece.

Zambian Minister Richard Musukwa, in an emailed statement, said the government was open to any progressive talks that will facilitate amicable exit of Vedanta from Konkola Copper Mines.

The stocks fell 37 percent in the past 12 months compared to a 5 percent fall in the Nifty Index.

Good quality stocks are also falling as investors are now selling "jewels" to make up for the losses made in the other parts of their portfolio. That’s according to Deven Choksey, managing director, KRChoksey Investment Managers.

"Unfortunately, the victims of the market sell-off are good quality mid-cap stocks," said Choksey in an interview to BloombergQuint. "The fund managers and investors are compelled to sell these stocks for liquidating and generating cash in their portfolio."

Shares of the state-owned railway cargo services provider rose 5.75 percent, the most in five months, to Rs 510.05 each.

Brokerage firm Morgan Stanley started coverage on the stock with an ‘Overweight’ rating. It also fixed the target price at Rs 566 apiece, indicating a potential upside of 13.4 percent from last close.

Here’s what the brokerage firm had to say on the stock:

• Dedicated Freight Corridor initiative should benefit Container Corp – a dominant player.
• Rail to gain share post DFC commissioning, fostering quicker and more predictable movement of goods.
• Expect 12 percent earnings compounded annual growth rate over financial years 2019-22.

The stock traded 17 percent below the Bloomberg consensus one-year target price.

State Bank of India had lowered interest rates of bulk term deposits by 30-70 basis points across tenors, while retail deposit rates were cut by 10-50 basis points, according its press statement.

Shares of the largest state-run lender rose as much as 1.4 percent to Rs 272.35 each.

Indian equity benchmarks reversed losses as government may soon rollback the plan to levy additional levy on foreign investors, according to a Bloomberg report citing an unidentified official.

The government is working on steps to give cushion to the economy, the report said, adding that the measures may include an exemption to foreign portfolio investors from tax on superrich announced in the budget.

The S&P BSE Sensex rose 0.35 percent to 36,601 and the NSE Nifty 50 rose 0.50 percent to 10,794.70 as of 10:40 am. The broader markets represented by the NSE Nifty 500 Index advanced 0.40 percent.

The market breadth was tilted in favour of sellers. About 872 stocks declined and 788 shares advanced on National Stock Exchange.

Ten of the 11 sectoral gauges compiled by NSE traded higher, led by the NSE Nifty PSU Index’s 2.11 percent gain. Nifty FMCG Index was the only sectoral loser, down 0.33 percent.

Domestic equity investors must diversify their investments across the globe, especially the U.S., instead of just "sticking" to India. That's according to Ajay Srivastava of Dimension Corporate Finance.

Shares of the Bengaluru-based company hit upper circuit for the fifth day this week after it rose 5 percent to Rs 79.90 each.

ITC is considering a bid to buy a stake in Coffee Day Enterprises as the nation’s biggest cigarette maker seeks to diversify its businesses, reported Bloomberg citing people familiar with the matter.

ITC received an inquiry from an intermediary on Coffee Day and there has been no progress, its spokesman said in response to Bloomberg’s query. The news is incorrect and Coffee Day is unaware of any such developments, Coffee Day said in a filing.

The stock trade at 14 times its estimated earnings per share for the coming year, according to Bloomberg data.

Indian equity indices extended losses for the fourth day in a row led by declines in ICICI Bank and Bharti Infratel. Negative sentiments continued to fuel sell-offs as investors were expecting a stimulus package to support businesses facing a slowdown.

The S&P BSE Sensex fell 0.69 percent to 36,217.98 and the NSE Nifty 50 fell 0.67 percent to 11,662 as of 9:20 am. The broader markets represented by the NSE Nifty 500 Index fell 0.68 percent.

The market breadth was tilted in favour of buyers. About 1098 stocks declined and 385 shares advanced on National Stock Exchange.

Nine of the 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Realty Index’s 1.98 percent fall. Nifty IT Index was the top sectoral gainer, up 0.57 percent.

The Indian rupee fell to its lowest in nine months against the U.S. dollar as the country’s benchmark indices tumbled and foreign investors continue to selloff.

The domestic currency depreciated 22 paise to trade at 72.03 against the greenback—its lowest since December.

August Futures

• Nifty futures closed at 10,732, discount of 8.9 points versus premium of 13.9 points.
• Nifty futures open interest up 0.3 percent, adds 47,000 shares in open interest.
• Bank Nifty futures closed at 27,021.8, discount of 12 points versus premium of 20.8 points.
• Bank Nifty futures open interest up 11 percent, adds 1.6 lakh shares in open interest.

Options

• Nifty PCR at 1.02 versus 0.94 (across all series).

Nifty Monthly Expiry Aug. 29

• Max open interest on call side at 11,000 (44.9 lakh shares).
• Max open interest on put side at 11,000 (27.3 lakh shares).
• Open interest addition seen at 11,000C (+11.6 lakh shares), 10,800C (+9.6 lakh shares).
• Open interest shedding seen at 11,000P (-7.9 lakh shares), 10.800P (-4 lakh shares).

• Sun Pharma’s ANDA for Dapagliflozin gets U.S. Food and Drug Administration approval.
• HDFC Bank: Board appointed Srinivasan Vaidyanathan as the Chief Financial Officer of the bank.
• Pidilite Industries commissioned a manufacturing plant in Bangladesh. The is the second addition to already existing plant in Munshigonj, Bangladesh.
• DLF clarified that allegations are in media are false and matter referred in the articles pertains to a notice issued by Supreme Court on July 22. Aforesaid litigation did not meet materiality threshold and the company will respond to Supreme Court’s notice in due time.
• Dabur’s arm acquired management control of Excel Investments.
• Infosys entered into a strategic partnership with University of Illinois Urbana-Champaign to develop new technologies and systems in precision medicine.
• Capacite Infraprojects clarified that IT Authorities are carrying out search proceedings at company premises from Aug. 20 and no impact is there on routine operations.
• 63 Moons Technologies has won Maharashtra Protection of Interest of Depositors case in Bombay High Court, attachment of the properties of the company will be vacated. (Press Release)
• BHEL: Crisil revised outlook on long term bank facilities to ‘Negative’ from ‘Stable’, while re-affirmed the rating at ‘AA+’.
• Gujarat State Petronet: Dr. T Natarajan, Joint Managing Director has resigned from the Board with effect from Aug. 22.
• Somany Ceramics: Board approved merger of Schablona with the company.
• Amazon will acquire 49 percent stake in Future Coupons, a Future Group entity that holds minority stake in Future Retail. As part of the agreement, Amazon has been granted a call option which allows it to acquire all or part of the promoters' shareholding in Future Retail. It is exercisable between the third and tenth years, in certain circumstances, subject to applicable law, the company said.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 10,715 as of 8:30 a.m.

Stocks in Asia were mixed as traders adopted a cautious stance before Federal Reserve Chair Jerome Powell’s address at the Jackson Hole summit. Shares in Japan and Australia were flat, while equities in South Korea dipped.

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