MARKET WRAP: Banks, pharma send Sensex 202 pts lower; Nifty ends at 12,046

Topics Markets | MARKET WRAP

Benchmark indices ended around half a per cent lower on Monday, dragged down by banking stocks exposed to telecom operators after the government ordered mobile carriers to immediately pay the adjusted gross revenue (AGR) dues. 

The S&P BSE Sensex declined 202 points or 0.49 per cent to end at 41,056 levels. HDFC, Reliance Industries (RIL), ITC, SBI, and ICICI Bank emerged as the major contributors to the index's fall while TCS and Infosys gave the much-needed support. 

Vodafone Idea ended over half a per cent lower at Rs 3.42 after jumping around 19 per cent in the early trade. The stock reversed its gains after the Supreme Court rejected the telecom firm's proposal to pay Rs 2,500 crore by the end of the day and Rs 1,000 crore by Friday against AGR dues, while also refusing its plea that no coercive action be taken against it. READ MORE

NSE's Nifty ended the day at 12,046, down 68 points or 0.56 per cent. 

Volatility index India VIX advanced nearly 7 per cent to 14.54 levels.

On the sectoral front, Nifty PSU Bank index slumped the most - nearly 3 per cent to 2,146 levels. Bank of Baroda (BoB), Punjab National Bank (PNB), Oriental Bank of Commerce, Allahabad Bank and Union Bank of India (UBI) has hit their respective five-year lows on the National Stock Exchange (NSE) in the intra-day trade. Indian Bank and Jammu & Kashmir Bank from the Nifty PSU Bank index also hit their fresh 52-week lows. READ MORE


Global shares rose on Monday as the promise of further policy stimulus to counteract the economic hit from a coronavirus outbreak calmed nervous investors. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.17 per cent to near last week’s peak of 558.30, its highest since late January. Japan’s Nikkei fell 0.7 per cent after its economy shrank at the fastest pace in almost six years in the December quarter. The slowdown in the world’s third-largest economy came amid concern the coronavirus effects will hurt output and tourism, stoking fears Japan may slump into recession.

South Korea’s KOSPI index ended mostly flat. Australian, Singapore and Malaysian share indexes weakened.

In commodities, gold fell 0.25 per cent to $1,580 an ounce. Brent crude was higher at $57.41 a barrel and US crude added 0.25 per cent to $52.22.

(With inputs from Reuters)


MARKET OUTLOOK | Vinod Nair, Head of Research at Geojit Financial Services

Domestic growth concerns seem to be back in the market as indicated by a recent downgrade by Moody’s. Banks having significant exposure in Telecom players continue to be in the limelight as lack of funds could delay the payments and degrade the quality of banks balance sheet. Continuous rise in corona cases has forced major Asian peers to downgrade their growth outlook which could cause a ripple effect in other nations in the first quarter while recovery is expected from the second

SECTOR WATCH | All sectoral indices, except IT end in the red

MARKET AT CLOSE | Top losers and gainers on the S&P BSE Sensex


The S&P BSE Sensex slipped 202 points or 0.5 per cent to end at 41,056 while NSE's Nifty lost 68 points or 0.56 per cent to settle at 12,046 levels. 

MARKET CHECK | ITC hits fresh 52-week low

BUZZING STOCK | Lemon Tree jumps over 5%

BUZZING STOCK | Alphageo (India) zooms over 18%

- It bags orders worth Rs 128.6 crore from Oil India

BROKERAGE RADAR | HDFC Securities on KNR Constructions

We maintain BUY on KNR with SOTP-based TP of Rs 376/sh (valuing core EPC business 18x FY21EPS at Rs 317/sh, Subsidiaries Rs 60/sh). KNR delivered yet another steady quarter with Revenue/EBIDTA/APAT beat/(miss) of (0.4)/17/(12)% respectively.

MARKET CHECK | Voda Idea erases all its morning gains, trades flat

Global Markets check

European shares inched higher on Monday as fresh attempts by China to limit the economic impact of the coronavirus outbreak helped calm investor nerves.
The pan-European STOXX 600 index rose 0.3 per cent in early trade, staying slightly below a record high of 432.26 touched last week. Market activity is expected to be light through the rest of the day on account of a US holiday.
Asian shares reversed losses on Monday and moved back toward a three-week top as China’s persistent efforts to cushion the blow from a coronavirus outbreak calmed nervous investors, although Japanese stocks faltered on growing recession risks.MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.3 per cent to be within kissing distance of last week’s peak of 558.30, which was the highest since late January.

Japan’s Nikkei stumbled 0.7 per cent after the country’s economy shrank at the fastest pace in almost six years in the December quarter. South Korea’s KOSPI index ended mostly flat while Australian, Singapore and Malaysian share indexes were a tad weaker.

NEWS ALERT | Promoters of NCC created pledge on 11 lakh shares (0.2% equity) on Feb 13

Bank of Baroda falls 4% as Calcutta HC asks RBI to take action against it

Shares of public sector lender Bank of Baroda (BoB) declined over 4 per cent on Monday after the Calcutta High Court directed the Reserve Bank of India (RBI) to consider appropriate steps against it, including revoking its licence or authority to carry on with banking business, if necessary, for failing to honour a bank guarantee given by a third party to Indian Oil Corporation (IOCL). READ MORE

BROKERAGE RADAR | Centrum Broking on SpiceJet

Led by lower than expected yields and elevated cost structure due to delay in return of Max aircrafts, we have lowered our FY21 earnings sharply by 59.4%. We maintain our Reduce rating on the stock with a revised TP of Rs 97 (based on 7x FY22E EBITDAR).

SECTOR WATCH:: Metal stocks under pressure

Muthoot Finance soars 15%, hits new high on strong December quarter results

Shares of Muthoot Finance soared 15 per cent to Rs 867 on the BSE on Monday in an otherwise weak market after the company reported 66 per cent year on year (YoY) growth in net profit at Rs 803 crore in December quarter (Q3FY20). It had profit of Rs 485 crore in the year-ago quarter. The stock of the non-banking finance company (NBFC) hit a new high, surpassing its previous high of Rs 800 recorded on January 17, 2020. The trading volumes on the counter jumped 9-fold with a combined 11.7 million shares changing hands on the NSE and BSE till 01:51 pm. READ MORE

HDFC slips 2%

Rupee check

NEWS ALERT | Voda Idea writes to DoT, tax dept seeking adjustment of Rs 7,000 cr owed to it by the Tax department: CNBC TV18

-- Refund from tax dept for multiple assessment: Voda Idea
-- Co. of the view total payment of Rs 9,500 cr possible after tax adjustment: Voda Idea

MARKET UPDATE:: Broader indices underperform; India VIX up 6%

NEWS ALERT | Lenders get 8 EoIs for DHFL ahead of deadline expiry; expect 16 by the end of day: CNBC TV18

-- KKR, Welspun group, Adani group submit EOIs for takeover of entire businesss

BUZZING STOCK:: Glenmark slips 7%

SC refuses to accept Vodafone Idea's proposal to pay Rs 2,500 cr by today

The Supreme Court on Monday refused to accept telecom firm Vodafone Idea's proposal to pay Rs 2,500 crore by Monday and Rs 1,000 crore by Friday against adjusted gross revenue (AGR) dues and that no coercive action be taken against it. A bench headed by Justice Arun Mishra declined to accept the proposal given by senior advocate Mukul Rohatgi, appearing for Vodafone, after he mentioned the matter. READ MORE  

Nifty sectoral indices at this hour

Moody's cuts India's 2020 growth forecast to 5.4% amid coronavirus fears

Global rating agency Moody’s said on Monday that India’s economic recovery is likely to be shallow and expand at a lower pace of 5.4 per cent in Calendar 2020 than the earlier estimate of 6.6 per cent. In a review of the global economy to asses likely to impact on Coronavirus outbreak, Moody’s said it (virus and its spread) has diminished optimism about prospects of an incipient stabilisation of global growth this year. READ MORE

Contribution to S&P BSE Sensex's fall today

ONGC hits lowest level since Oct 2008 on weak operational performance in Q3

Shares of Oil and Natural Gas Corporation (ONGC) slipped over 3 per cent to hit an over 11-year low of Rs 99.35 on the BSE on Monday after reporting a weak operational performance for the quarter ended December 2019 (Q3FY20). The stock of the state-owned oil exploration & production firm was trading at its lowest level since October 27, 2008, when it touched Rs 89.68 in intra-day trade. READ MORE

BROKERAGE RADAR | Edelweiss Securities on CRISIL

While outperformance in Ratings is strong, we await sustenance of growth and green shoots in research. Hence, we maintain ‘REDUCE’ with a revised TP of Rs 1,138 (Rs 1,121 earlier) based on DCF. We have built in 6% sales CAGR and 14% PAT CAGR over CY19-21E. The stock is trading at 28.6x CY20E EPS.

Dr Reddy's, Divi's Lab, Torrent Pharma: What lies ahead for pharma stocks?

Most pharma companies have underperformed the benchmark indices in the past one year. Barring Divi's Labs (up over 32 per cent) and Dr Reddy's (up 29 per cent), rest of the pharma stocks from the Nifty Pharma index have given negative returns in the last one year as compared to nearly 13 per cent gain in the Nifty50 index (as of Friday's close). READ MORE

MARKET UPDATE:: Sensex falls over 100 pts

PSU banks not out of the woods yet

State Bank of India (SBI) chairman Rajnish Kumar has every reason to feel happy. The aggressive recovery of bad loans helped India’s largest lender record Rs 5,583 crore net profit last December, its highest ever quarterly profit. What could make him grin is the improvement in the bank’s quality of assets. Its gross non-performing assets (NPAs) as a percentage of loans dropped to 6.94 per cent, down from 8.71 per cent a year ago and 7.19 per cent in September 2019. READ MORE  

Custodians to call on Sebi to clear haze around new CAF norms for FPIs

The key issue vexing the custodians is the requirement to fill in tax details on behalf of FPIs, an area where they lack expertise and which is currently handled by tax consultants. As of today, forms are filled by the tax consultants as well as custodians and provided to the FPIs to review, amend and sign, keeping them almost error-free. READ MORE  

Mishra Dhatu Nigam zooms 20%, hits new lifetime high on robust Q3 results

Shares of Mishra Dhatu Nigam Limited (MIDHANI) rallied 20 per cent and hit a new high of Rs 216 on the BSE on Monday in an otherwise subdued market, on the back of heavy volumes. The stock of the state-owned manufacturers of special steels superalloys and titanium alloys surpassed its previous high of Rs 187, recorded on Friday, February 14, 2020. READ MORE


BUZZING STOCK:: Mishra Dhatu Nigam hits 20% upper circuit

BROKERAGE RADAR | Anand Rathi Shares on Aarti Industries

The coming capex, commencement of many-year deals and greater share of high-margin products are expected to drive future revenue and profit. We recommend a Buy rating with a target price of Rs 1,200. At the TP, the stock is valued at a PE of 31.5x FY21e and 25.5x FY22e. On an EV/EBITDA multiple, it is valued at 18.8x FY21e and 15.8x FY22e.

Risks: Extension of plant closures in China supplying raw materials, delay in capex implementation, delay in long-term contracts.

Graphite India slips 5%, nears 52-week low on Rs 353 crore net loss in Q3

Shares of Graphite India slipped 5 per cent to Rs 268 on the BSE on Monday after it reported a consolidated net loss of Rs 353 crore in December quarter (Q3FY20), due to steep fall in electrode prices. The graphite electrode manufacturer had posted a consolidated net profit of Rs 764 crore in the same quarter last fiscal. The stock was trading close to its 52-week low level of Rs 255 touched on October 9, 2019. READ MORE

LIC Housing Finance tumbles 9%

Bharti Airtel makes payment of Rs 10,000 crore to DoT towards AGR dues

Bharti Airtel said on Monday that it had paid Rs 10,000 cr to the Department of Telecom (DoT) towards adjusted gross revenue (AGR) dues. The latest development comes after the Supreme Court on Friday came down heavily on the DoT for not taking steps to recover statutory dues, estimated to be around Rs 1.47 trillion from operators. READ MORE

NEWS ALERT | NCLAT says probe agency can't seize Bhushan Power's assets, reports Bloomberg

- Tribunal rejects  appeals against Bhushan Power's sale to JSW Steel

Vodafone Idea default can raise India's fiscal deficit by 40 bps

A possible default by Vodafone Idea (Voda-Idea) in paying its adjusted gross revenue (AGR) dues and the company shutting down operations will have serious repercussion on the telecom and banking sectors in particular and the economy in general with large magnitude of debt default, job losses and customer annoyance as the telco faces an imminent risk of shutdown. READ MORE  

Nifty PSU Bank index trades lower

Balkrishna Industries soars 9%, hits 52-week high on better outlook in FY21

Shares of Balkrishna Industries soared 9 per cent to Rs 1,258, also its 52-week high on the BSE on Monday, after the company said its business may see better growth in financial year 2020-21 (FY21) compared to the current financial year 2019-20 (FY20). The stock of the tyre manufacturer was trading at its highest level since September 4, 2018. In the past three months, it has rallied 46 per cent, as compared to a 2 per cent rise in the S&P BSE Sensex. READ MORE

NEWS ALERT | Bharti Airtel makes payment of Rs 10,000 cr to DoT: CNBC TV18

-- Will make balance payment after self-assessment exercise: Bharti Airtel, as per CNBC TV18

India is beginning to look like a tired proposition: Ashmore's Jan Dehn

Over the past few weeks, the coronavirus outbreak has tightened its grip over China, impacted world trade, and rattled global financial markets. London-based Jan Dehn, head of research at Ashmore Group, which has nearly $100 billion worth of assets under management, tells Puneet Wadhwa that investors should use this panic to add to positions in Asian equities. READ MORE

BROKERAGE RADAR | Centrum Broking on Financials

We prefer banks having a good retail franchise on the asset side and a strong CASA and retail term-deposit franchises on the liability front as the banking space is still plagued by asset quality challenges owing to a macroeconomic slowdown. We prefer SBI and ICICI Bank among larger banks and Federal Bank among mid-cap banks.

Titan Company gains 2%

Vodafone Idea leaps 19% on report the firm may part-pay AGR dues

Shares of Vodafone Idea surged 19 per cent to Rs 4.09 on the BSE on Monday as reports said the loss-making firm was likely to pay for adjusted gross revenue (AGR) dues today.

Telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices are likely to make payment for adjusted gross revenue (AGR) dues on Monday to avoid stringent punitive action from the Telecom Department, a report by the Press Trust of India said, quoting official sources. READ MORE  

MARKET CHECK | Top gainers on the BSE at this hour

BROKERAGE RADAR | Edelweiss Securities on GSPL

We are factoring in just 1.8% volume growth over FY19–22 with higher CGD (+4.1 mmscmd) and power volumes (+2.8) offsetting lower refining volumes (-7.6). However, this does not include volume upside from the NGT action while power upside can be much higher than currently estimated. Given its inexpensive valuation of 9.3x FY21E PER on a consolidated basis, GSPL offers significant upside potential. Maintain ‘BUY’ with a DCF-based TP of Rs 309/share.

BROKERAGE RADAR | Prabhudas Lilladher on Shree Cement

Shree Cement depicted strong maturity over last year with tight discipline on volumes and prices in its Northern operations. Based on our estimate, Northern operations (60% of its volumes) is operating at best ever margins of nearly Rs 1,700/t+. We see strong downside risk to the margins due to competition from new capacities and increased likelihood of leakage on volumes coupled with widening gap between A and C category brands. Stretched valuations with EV/EBITDA of 20x and P/E of 38x FY22E and flattening earnings growth leaves no scope for margin of safety. Hence, we maintain Reduce with TP of Rs 19,500 (earlier Rs18,000).

BROKERAGE RADAR | ICICI Securities on Pfizer

We revise our rev/earnings estimates for FY20E-FY22E by 1-2%/3-5% reflecting the weak quarterly performance. Maintain BUY rating with a revised target price of Rs 4,961 based on 32xFY22E EPS (earlier: Rs 5,239/share).

Key downside risks are: addition of key drugs in NLEM, product concentration, government intervention, and presence of unlisted promoter company.


Momentum picks by ICICI Securities

WEB EXCLUSIVE | AGR verdict: Data could be the new Onion, Mr Ravi Shankar Prasad

The Hon. Supreme Court on Friday rapped the telecom operators and ordered them to pay the adjusted gross revenue (AGR) dues by the stroke of midnight on Friday. This is akin to a “Death Warrant” for Vodafone-Idea. The legal system has to follow the rule book and is bound by law. However, it’s the executive which has to “think on its feet” and figure out the best solution for this situation from a holistic viewpoint, vis-à-vis nailing a “culprit”. READ MORE  

BUZZING STOCK | Vodafone Idea jumps nearly 16%

SECTOR WATCH | Top gainers and losers on the NSE

FIRST TRADE | Top gainers and losers on the S&P BSE Sensex

Top gainers and losers on S&P BSE Sensex during Pre-open

Market at pre-open

Rupee opening

Rupee opens weaker at 71.47/$ vs Friday's close of 71.36 against the US dollar

Weekly commodity picks

Jeera is trading at Rs 14,260 per quintal in Unjha. Prices are expected to trade lower towards Rs 14,000 per quintal due to an expected increase in production and ample stocks from old crop. However, steady export demand would limit the price fall.  READ MORE  

Stock calls by Sameet Chavan of Angel Broking

View – Bullish
Last Close – Rs 497
Justification – This has been one of the underperforming stocks in last 10 – 12 months. However, recent price action looks quite encouraging. In the midst of all volatile moves early this month, the stock price has stabilized around 430 and from thereon, we witnessed a V-shaped recovery to confirm a ‘trend line’ breakout last week from the hurdle of 490. Importantly, in this recent up move, the volumes increased considerably, indicating strong buying interest in the stock. READ MORE

Two stocks that Vaishali Parekh of Prabhudas Lilladher is bullish on

CMP: Rs 717.65
TARGET: Rs 775
The stock has witnessed some erosion in recent times and has currently showed signs of bottoming out near Rs 695 levels, indicating a bounce back with a positive bullish candle pattern to improve the bias. The relative strength index (RSI) is also showing a trend reversal to signal a buy and with good volume activity, we suggest to buy and accumulate the stock for an upside target of Rs 775, keeping the stop loss of Rs 690. READ MORE

Nifty outlook and top stock picks by CapitalVia Global Research

Market ended lower for the second consecutive day as the Supreme Court's adjusted gross revenue (AGR) verdict over telecos was announced on Friday. Traders also turned cautious ahead of the weekend on uncertainty over coronavirus. Nifty closed at 12,113.50, shedding 61.20 points. All the major indices traded lower. PSU banks, FMCG and private bank stocks traded with negative sentiments throughout the day. READ MORE

FII/FPI & DII trading activity on NSE, BSE and MSEI

Bulk deals on BSE as on Friday

Bulk deals on NSE as on Friday

Oil check

Oil prices edged lower on Monday as investors brace for economic data in Asia due this week that should give a reading on how China’s coronavirus epidemic has affected oil demand.

Brent crude was at $56.99 a barrel, down 33 cents after rising 5.2 per cent last week, the biggest weekly gain since September 2019. US West Texas Intermediate crude fell 13 cents to $51.92 a barrel, after a 3.4 per cent gain last week.

Rupee check

Asian Markets check

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