MARKET WRAP: Sensex slips 82 pts, Nifty gives up 11,800; pharma stocks fall

Topics Markets | MARKET WRAP

Stocks witnessed a lacklustre trade on Tuesday amid lack of any positive triggers and fears of spreading coronavirus. According to a Reuters poll, India's GDP (gross domestic product) grew 4.7 per cent in the October-December period of the financial year 2019-20 (FY20). 

The S&P BSE Sensex ended at 40,281, down 82 points or 0.2 per cent. Sun Pharma (down over 2 per cent) emerged as the biggest loser on the index while TCS (up 2 per cent) gained the most. 

Market breadth remained in favour of sellers as out of 2,616 companies traded on the BSE, 964 advanced and 1,469 declined while 183 remained unchanged. As many as 58 securities hit their 52-week high on the BSE while 183 securities fell to 52-week low. 

On the NSE, the 50-share Nifty index slipped below the key level of 11,800 to end at 11,798, down 31.5 points or 0.27 per cent. 

In the broader market, the S&P BSE MidCap index lost 68 points or 0.4 per cent to settle at 15,376 while the S&P BSE SmallCap index ended at 14,448, down 65 points or 0.45 per cent. 

On the sectoral front, Nifty Pharma index dropped over 2 per cent to end as the biggest sectoral index loser. The index closed at 7,937 levels. On the other hand, realty and IT stocks made decent gains. 

GLOBAL MARKETS 

Global stock markets stabilised on Tuesday after a wave of early selling petered out and Wall Street futures managed a solid bounce after the previous day’s sharp selloff on fears about the spreading coronavirus. MSCI’s All Country World index, which tracks shares across 47 countries, was down 0.16 per cent, paring some earlier losses when Asian markets were trading. The index suffered its biggest daily drop in two years on Monday.

In commodities, oil steadied after shedding nearly 4 per cent on Monday. US crude was up 0.2 per cent at $51.55, while Brent crude firmed 0.4 per cent to $56.51.

(With inputs from Reuters)

3:58 PM IST Markets steadied after a steep selloff yesterday as investors assessed the economic impact of coronavirus which has spread to other nations. Trump-Modi meet failed to provide any sentiment boost for the domestic market as there were no key deals . Virus concerns could remain in the limelight as any further supply disruption could hurt global economic growth in 2020.

3:43 PM IST

3:42 PM IST

3:36 PM IST The S&P BSE Sensex ended 82 points or 0.2 per cent lower at 40,281 levels while the NSE's Nifty50 ended at 11,798, down 31.5 points or 0.27 per cent.

3:19 PM IST

3:06 PM IST The report titled "India: Growth and inflation targeting review", Radhika Rao, Economist at DBS Bank noted that the impact on India is felt through supply chain disruptions from China as well as regional players, who in turn are net importers from China. "Temporary price increases are likely to be accompanied by production delays if the pain spills over into 2Q20 (April-June)," the report said adding that "the MPC is also likely to consider developments around COVID-19". READ MORE  

3:03 PM IST >> Bank plans to hold 19.9% stake in Max Life post deal, up from 2%  >> Post deal, Max Fin likely to own 54.5% stake in max Life >> Axis, Max Fin have signed for exclusive engagement for 90 days Alert: Axis Bank will buy stake in Max Life from Max Fin

3:00 PM IST >> Working with an adviser on the partial divestment of Fullerton India Credit Company >> Aims to raise $350 mn via sale

2:44 PM IST

2:32 PM IST The stock of the fluorochemical maker hit a new high today. It has rallied 26 per cent in the past two weeks, as compared to a 2.5 per cent decline in the S&P BSE Sensex. In the past six months, the stock has more than doubled from level of Rs 686, against a 10 per cent rise in the benchmark index. READ MORE

2:22 PM IST

2:20 PM IST Management laid out the road map at the CIT (Center of Innovation) visit. CIT is gradually ramping up (since its commencement in 2016) and has helped reduce lead times for new product development by 25%. Hero has invested $600mn in R&D over the last few years, which is now bearing fruit. With the launch of the Xtreme 160cc bike, Hero will now address 96% of the Indian 2W market and compete effectively in the premium segment. While the customer acceptance of the new products in the ‘white spaces’ will be gradual, we re-iterate BUY as Hero has successfully defended market share in the 2W segment in the current downturn. We value the stock at 16x Dec-21 EPS, in-line with its average trading multiple.

LIVE UPDATES

MARKET COMMENT | Vinod Nair, Head of Research, Geojit Financial Services

Markets steadied after a steep selloff yesterday as investors assessed the economic impact of coronavirus which has spread to other nations. Trump-Modi meet failed to provide any sentiment boost for the domestic market as there were no key deals . Virus concerns could remain in the limelight as any further supply disruption could hurt global economic growth in 2020.

SECTOR WATCH | Nifty Pharma index bleeds the most


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


CLOSING BELL

The S&P BSE Sensex ended 82 points or 0.2 per cent lower at 40,281 levels while the NSE's Nifty50 ended at 11,798, down 31.5 points or 0.27 per cent.

MARKET CHECK


RBI MPC may consider coronavirus impact on Indian economy: Report

The report titled "India: Growth and inflation targeting review", Radhika Rao, Economist at DBS Bank noted that the impact on India is felt through supply chain disruptions from China as well as regional players, who in turn are net importers from China. "Temporary price increases are likely to be accompanied by production delays if the pain spills over into 2Q20 (April-June)," the report said adding that "the MPC is also likely to consider developments around COVID-19". READ MORE  



NEWS ALERT | Axis Bk to pick 17.9% stake in Max Life for Rs 550 cr: sources to CNBC TV18

>> Bank plans to hold 19.9% stake in Max Life post deal, up from 2% 

>> Post deal, Max Fin likely to own 54.5% stake in max Life

>> Axis, Max Fin have signed for exclusive engagement for 90 days

Alert: Axis Bank will buy stake in Max Life from Max Fin

NEWS ALERT | Fullerton Financial considering stake sale in its Indian NBFC: Bloomberg

>> Working with an adviser on the partial divestment of Fullerton India Credit Company

>> Aims to raise $350 mn via sale

Aditya Birla Fashion extends decline


Navin Fluorine surges 17% on multi-year contract with a global company

The stock of the fluorochemical maker hit a new high today. It has rallied 26 per cent in the past two weeks, as compared to a 2.5 per cent decline in the S&P BSE Sensex. In the past six months, the stock has more than doubled from level of Rs 686, against a 10 per cent rise in the benchmark index. READ MORE

Rupee check


BROKERAGE RADAR | HDFC Securities on Hero MotoCorp

Management laid out the road map at the CIT (Center of Innovation) visit. CIT is gradually ramping up (since its commencement in 2016) and has helped reduce lead times for new product development by 25%. Hero has invested $600mn in R&D over the last few years, which is now bearing fruit. With the launch of the Xtreme 160cc bike, Hero will now address 96% of the Indian 2W market and compete effectively in the premium segment. While the customer acceptance of the new products in the ‘white spaces’ will be gradual, we re-iterate BUY as Hero has successfully defended market share in the 2W segment in the current downturn. We value the stock at 16x Dec-21 EPS, in-line with its average trading multiple.

MARKET UPDATE:: Nifty slips below 11,800


MARKET UDATE:: Sensex at day's low


IndiGo slides 6%


IRCTC enters top-100 m-cap league; stock zooms 99% in one month

Currently, IRCTC's m-cap is more than two of the Nifty 50 companies -- Zee Entertainment Enterprises (Rs 24,329 crore) and YES Bank (Rs 8,990 crore). The company has also surpassed 27 companies from the S&P BSE 100 index including MRF, Lupin, Aurobindo Pharma, Page Industries, Apollo Hospitals Enterprises, ACC, Ashok Leyland, Bharat Forge and TVS Motor Company during the period. READ MORE

Auto stocks edge lower

COMPANY LATEST(rs) CHG(%) VOLUME
TATA MOTORS 150.25 -0.23 1265183
ASHOK LEYLAND 85.05 0.12 463037
TVS MOTOR CO. 429.40 -1.85 159476
TATA MOTORS-DVR 61.40 -0.32 95711
ESCORTS 836.50 -0.02 65593
» More

InterGlobe Aviation trades lower


NEWS ALERT | Vodafone Idea rallies 21% from days's low


MARKET UPDATE:: Contribution to S&P BSE Sensex today


NEWS ALERT | SpiceJet introduces dedicated freighter services to boost India's shrimp farming

>> Dedicated freighter services from Chennai & Vishakhapatnam to Surat & Kolkata

>> SpiceXpress, the dedicated air cargo arm of SpiceJet, will deploy its Boeing 737 freighter on these routes with an approximate carrying capacity of 21 tonnes.

MARKET UPDATE:: Sensex regains momentum


Mindtree stock hits fresh 52-week high, rallies 16% in 10 days

Shares of Mindtree continued their northward march and jumped 5 per cent on Tuesday to hit a 52-week high of Rs 1,062 on the BSE in an otherwise range-bound market. The stock of the IT consulting & software firm outpaced the market by surging 16 per cent in the past 10 trading days, as compared to 2 per cent decline in the S&P BSE Sensex. It hit an all-time high of Rs 1,182 on September 11, 2018. READ MORE

Mauritius joins Pakistan on FATF's 'grey list'; questions over FPI inflows

Mauritius has joined Pakistan on the “grey list” of the Financial Action Task Force (FATF), an inter-governmental body which sets anti-money laundering standards. The development is a body blow to the country, which has been trying hard to shed its image as a quasi-tax haven in the recent past. The move also puts a question mark on the existing, as well as new investments flowing into India from the country. READ MORE

Nifty sectoral indices at this hour


HCL Tech slips 3%


Hindustan Unilever gains 2% as board approves formation of a new subsidiary

Hindustan Unilever (HUL) shares climbed over 2 per cent to Rs 2,279 on the BSE on Tuesday after the company's board approved the formation of a new wholly-owned subsidiary with an authorised share capital of Rs 2,000 crore. The stock was trading close to its lifetime high of Rs 2,307.20, hit on February 19, 2020 "This new subsidiary has been formed to leverage the growth opportunities in a fast-changing business environment and will help HUL in becoming more agile and customer-focused," the firm said in an exchange filing. READ MORE

Larsen & Toubro trades lower for fourth straight day, hits new 52-week low

Shares of Larsen & Toubro (L&T) were trading lower for the fourth straight day, slipping 1.3 per cent on Tuesday to hit 52-week low of Rs 1,244 on the BSE. The construction & engineering company's stock was trading at its lowest level since February 18, 2019. In the last nine months, L&T has underperformed the market by falling 22 per cent, as compared to 2 per cent rise in the benchmark S&P BSE Sensex during the period. READ MORE

Slowdown in IT and real estate sectors a pain point for Info Edge

Info Edge’s December quarter (Q3) earnings clearly indicate that weakness in the overall economy has started catching up with it. The company, which had been an outlier before the third quarter, has been hit by a slowdown in the two key sectors of IT and real estate. Subdued hiring in the IT sector and prolonged stress in the real estate sector are likely to keep growth of Info Edge’s recruitment (Naukri) and real estate (99acres) business under pressure at least in the near term.  READ MORE

Telecom companies to submit self-assessment documents on AGR maths

Once substantiating documents are filed by the companies, the telecom department will initiate random ‘test checks’ on the AGR calculation in a time-bound manner.
 
The ‘test checks’ will be done for any one year (of telcos’ dues) to examine the deviation between telecom companies’ assessment and the government calculation of AGR liabilities. READ MORE

Biocon slips 4%


TVS Motor slides 6% as coronavirus outbreak set to impact February output

Shares of TVS Motor Company slipped 6 per cent to Rs 410 on the BSE on Tuesday after the two and three-wheelers manufacturer said the outbreak of pandemic Coronavirus (COVID-19) in China will lead to 10 per cent drop in its planned production in February. The stock was trading at its lowest level since October 17, 2019. In the past one month, TVS Motor has underperformed the market by falling 12 per cent, as compared to 3 per cent decline in the S&P BSE Sensex. READ MORE

NEWS ALERT | Tata Elxsi enters into partnership with Green Hills for digital services: BSE Filing

>>  Partnership to deliver the next generation of software-driven, highly integrated automotive cockpit solutions

Bandhan Bank, HDFC Life, Info Edge jump 4% on inclusion in F&O segment

In a circular issued Monday, NSE said the futures and options contracts on the above mentioned securities would be available for trading w.e.f. February 28,2020. The market lot, scheme of strikes and quantity freeze limit of the above mentioned securities shall be informed to market players on February 27, 2020, it added.  READ MORE

Bharti Infratel extends deadline for merger with Indus Towers by 2 months

"The final decision to implement the scheme will be taken by the board keeping in mind the best interest of the company and its stakeholders including the assessment of the current crisis facing the telecom industry and the extent of its impact on the company's major customers," Bharti Infratel said in a regulatory filing. READ MORE

MARKET UPDATE:: Sensex off opening highs


SECTOR WATCH:: Pharma stocks under pressure


GMR Infra gains 3% in early deals


MARKET UPDATE:: Indices pare gains, Nifty gives up 11,850


TVS Motor slips 6%


Buoyed by US revenues, higher growth trajectory awaits Ajanta Pharma

A strong uptick in US revenues, traction in the Africa business, and consistent performance in the domestic market have led to brokerage upgrades for Ajanta Pharma. The stock is up 27 per cent since the start of February.
 
Analysts at SBICAP Research have upgraded the stock to a “buy” on improved growth visibility across businesses, sustained outperformance in India business, and structural margin expansion from leverage. READ MORE

Bharti Infratel slips over 2%


Tech M trades marginally lower

> IT company Tech Mahindra on Monday said it has signed an agreement to acquire 100 per cent stake in US-based Zen3 Infosolutions for $64 million (Rs 460 crore) in an all-cash deal. Besides, the company also announced an interim dividend of 200 per cent or Rs 10 per equity share.


HUL adds 2% on formation of a new wholly-owned subsidiary


Bandhan Bank gains 3% on inclusion in F&O segment


Sectoral trends at NSE during Opening trade


Top gainers and losers on S&P BSE Sensex during Opening trade


First Trade | Nifty still below 11,900


First Trade | Sensex begins with a green tick


Adani group joins race to buy Air India, plans to submit EoI by next month

The Adani group has ambitions to become India’s largest private airport operator with three airports already in its kitty – Lucknow, Ahmedabad and Mangalore. It has also won the race for three more airports – Thiruvananthapuram, Ahmedabad and Guwahati – but is awaiting government clearance. READ MORE

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


Market at Pre-open


Market at Pre-open


Rupee opening

Rupee opens stronger at 71.85/$ vs Monday's close of 71.92 against the US dollar

Sebi's review of margin framework expected to lower hedging costs

“Trading option strategies will now make business sense. Margins for hedged positions could drop by 70 per cent,” said Nithin Kamath, co-founder and chief executive officer at Zerodha.
 
The new margin requirements by Sebi were issued on Monday, after consultation with Sebi’s Risk Management Review Committee. READ MORE

Coronavirus-induced lockdown in China can put the brakes on pharma funds

"Domestic pharma companies, which are importing raw materials from China, have inventory for one or two months. But, if there is any prolonged impact, it can lead to some production disruptions," said Mahesh Patil, co-chief investment officer of Birla Sun Life Mutual Fund (MF). READ MORE

Stocks to watch

Tech Mahindra: IT company Tech Mahindra on Monday said it has signed an agreement to acquire 100 per cent stake in US-based Zen3 Infosolutions for $64 million (Rs 460 crore) in an all-cash deal. Besides, the company also announced an interim dividend of 200 per cent or Rs 10 per equity share.
 
HUL: Hindustan Unilever (HUL) on Monday said its board had approved the formation of a new wholly-owned subsidiary with an authorised share capital of Rs 2,000 crore. READ MORE

SBI stock basking in optimism; stakes too high to disappoint investors

In an environment where investors aren’t preferring to own state-owned entities, including banks, the stock of State Bank of India stands out as a stark exception. Not only is it analysts’ most preferred public sector bank (PSB), but it is also turning out to be the most-owned PSB as well. In fact, with 51 out of 54 analysts polled on Bloomberg recommending ‘buy’ (or 94 per cent of analysts polled), bets on the bank is higher than what it enjoyed in 2005, when 92 per cent of analysts tracking the stock were positive on it.  READ MORE

Coronavirus scare: Refiners to get rare oil cheap as demand slows in China

“Opportunity for Indian markets is more in the context of what is happening in China. In recent times, we received crudes which are appearing to be attractive as compared to their value earlier,” said R Ramachandran, head of refineries at Bharat Petroleum.
 
Refiners in India, the world’s third-biggest oil importer, rarely get the opportunity to buy suitable grades from areas like the Mediterranean and Latin America because of higher freight rates. READ MORE

BROKERAGE RADAR :: HDFC Securities on Ambuja Cements

Target Price Rs 245 | BUY

We like ACEM for its healthy margin profile and cashflows. Upcoming expansion will arrest market share loss. We maintain BUY with an SOTP based TP of Rs 245 (implies EV of USD 145/MT). We value ACEM’s standalone cement biz at 11x its Mar’22E EBITDA and its 50% stake in ACC at 20% holding disc. We value ACEM at 20% disc to its 5-yr mean EV/EBITDA (and in-line ACC’s val) for its continued market share loss amid lack of major expansions in past.

BROKERAGE RADAR :: Motilal Oswal Financial Services on Indian Hotels

CMP: Rs 138 | TP: Rs 189 (+37%) | Buy

>> Initiatives like rebranding of Ginger, monetizing of existing landbank, selling non-core assets, JV with GIC to add rooms and creating alternative revenue streams (like re-launching of Chambers, Ama) augers well for the stock.

>> More importantly, the underlying thesis of favorable demand-supply led growth in India’s hotels industry remains intact.

>> We maintain our estimates: revenue/EBITDA/PAT CAGR (FY20-22) of 9%/18%/30% to INR55.6b/INR15.8b/INR6.8b. We value the stock at 16x FY22E EV/EBITDA. On an SOTP (consol. and JV & associate) basis, we arrive at a target price of INR189. 

Morgan Stanley, Jefferies turn cautious on EMs amid coronavirus fears

On Monday, analyst at Morgan Stanley cut their December 2020 target for the MSCI Emerging Market Index (MSCI EM) from the earlier 1,150 to 1,100 now, translating into a negligible rise. Similarly, the targets for MSCI Asia Pacific index (ex-Japan) – MSCI APxJ, Hang Seng and MSCI China have also been slashed. The brokerage firm also lowered earnings growth forecasts below consensus estimates for all markets, except Japan, which remains the through-the-cycle overweight in their coverage, helped by bottom-up restructuring, improving capital management and governance improvement. READ MORE

Coronavirus impact on global economy and markets still uncertain: Experts

The risk emanating from the coronavirus (COVID-19) outbreak isn’t yet fully priced in by the markets and its economic implications remain unknown, say experts. Investors on Monday were caught off-guard by the sharp selloff in stocks amid an increase in COVID-19 cases in countries, such as South Korea, Italy, and Iran. “From a financial market standpoint, we think the tail risks of a more prolonged and higher magnitude disruption from COVID-19 remain underappreciated by the markets,” says a note by global money manager Franklin Templeton. READ MORE

NEWS ALERT | CARE downgrades rating on Yes Bank to ‘A-‘ from ‘A’: CNBC TV18

>>  Places bank on credit watch with negative implications

Bulk deals on BSE as on Monday

Bulk deals on NSE as on Monday

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


Rupee Check

Source: Bloomberg


Oil Check

>> Oil steadied after shedding nearly 4 per cent on Monday.

>> At 7:57 am, Brent Crude Futures were at $56.05 per barrel, up 0.5 per cent. WTI Crude, meanwhile, was at $51.65 per barrel, up 0.43 per cent.

SGX Nifty

>> At 7:57 am, SGX Nifty was at 11,878.5, up 57 points or 0.49 per cent.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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