F&O expiry: Sensex slips 143 pts, Nifty ends at 11,633; pharma stocks gain

Image: iSTOCK
Fears of coronavirus turning into a pandemic owing to rapid spread of the deadly virus outside China unnerved market participants on Thursday, thus causing benchmark indices to end in the red for the fifth consecutive session. Further, expiry of futures & options (F&O) contracts for February series, too, added volatility to the stocks. 

The S&P BSE Sensex lost another 143 points or 0.36 per cent to settle at 39,746, with ONGC (down over 2.5 per cent) being the top loser and Sun Pharma (up over 3.5 per cent) the biggest gainer. Of 30 stocks in the index, 20 ended in the negative territory and rest 10 in the green. NSE's Nifty index ended at 11,633 levels, down 45 points or 0.39 per cent. 

Market breadth was tilted in favour of declines as out of 2,589 companies traded on the BSE, 1,578 declined and 849 advanced while 162 remained unchanged.

In the broader market, the S&P BSE MidCap index fell 0.65 per cent to close the session at 15,072 while the S&P BSE SmallCap index lost 120 points or 0.83 per cent to close at 14,209.

Among sectoral indices, barring Pharma and FMCG, all the other indices ended in the red with media and PSU Bank stocks taking the biggest knock. Nifty PSU Bank index dropped over 2 per cent to 2,049 levels. Nifty Pharma index gained over half a per cent to 7,885 levels while Nifty FMCG ended at 29,981, up 0.05 per cent. 

GLOBAL MARKETS

Stocks sunk deeper into the red on Thursday, oil prices fell and US Treasuries rallied into record territory as more signs of the global spread of the coronavirus heightened fears of a pandemic. E-mini futures for the S&P 500 were down 1.4 per cent and Europe appears set for a catch-up slump. EuroSTOXX 50 futures fell 2.7 per cent and FTSE futures skidded 2.3 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent and is down more than 4 per cent for the week.

In commodities, oil, sensitive to global growth given the vast energy consumption in a many countries, fell more than 1 per cent to its cheapest in over a year.

(With inputs from Reuters) 


3:58 PM IST Domestic and global equity market got impacted by weak expiry of monthly F&O and selling in the global market due to the spread of new coronavirus cases in some parts of the world. Till last wee,  the market was of the view that coronavirus is going to have only a minimum impact on global economy as situation in China was being contained. But an increase in the number of new cases is changing the view and there are fears of some slowdown in the economy.

3:44 PM IST

3:43 PM IST

3:35 PM IST The S&P BSE Sensex ended 143 points or 0.36 per cent lower at 39,746 while NSE's Nifty50 ended at 11,633, down 45 points or 0.39 per cent.

3:13 PM IST

3:11 PM IST Shares of IndusInd Bank have slipped 3 per cent to Rs 1,102 on the BSE on Thursday after the private sector said that the speculation around the name of Rajiv Sabharwal of Tata Capital as a contender for the bank’s top position is completely untrue. READ MORE 

3:00 PM IST

2:55 PM IST Cipla received warning letter at Goa plant from the US FDA. The plant was classified as OAI (Official action Indicated) in Jan 20, and as such we did not factor any product approvals in our estimates. As per the company, no limited launches are impacted and the guidance of one niche launch per quarter remains on track. Goa plant accounts for 2.5% of FY19 revenues (single sourced products) and ~6% of revenues (including products with alternate source). The resolution timeline remains uncertain and will be based on Cipla’s response to US FDA (mid March), completion of remediation activities and a successful re-inspection.

2:50 PM IST

2:38 PM IST High iron ore premiums for new mine owners (both captive and merchant) could alter input costs for steel mills, it said.   The slowing economic activity as reflected in Ind-Ra’s GDP estimates of 5 per cent and 5.5 per cent for FY20 and FY21, respectively, would continue to affect demand growth in the sector and any significant pick-up is unlikely. READ MORE

2:19 PM IST ACC said one of its lines in its Wadi II plant has the company’s largest kiln with a capacity of 12,500 tpd. Sources suggested that ACC's Wadi-II plant so long had held the distinction of being the largest cement kiln globally which now has been overtaken by Shree Cement, albeit in the UAE. READ MORE

LIVE UPDATES

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

Domestic and global equity market got impacted by weak expiry of monthly F&O and selling in the global market due to the spread of new coronavirus cases in some parts of the world. Till last wee,  the market was of the view that coronavirus is going to have only a minimum impact on global economy as situation in China was being contained. But an increase in the number of new cases is changing the view and there are fears of some slowdown in the economy.

SECTOR WATCH | Pharma and FMCG indices end in the green


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


CLOSING BELL

The S&P BSE Sensex ended 143 points or 0.36 per cent lower at 39,746 while NSE's Nifty50 ended at 11,633, down 45 points or 0.39 per cent.

BUZZING STOCK | Mishra Dhatu surges 20%


IndusInd Bank hits fresh 3-year low after clarification on new CEO

Shares of IndusInd Bank have slipped 3 per cent to Rs 1,102 on the BSE on Thursday after the private sector said that the speculation around the name of Rajiv Sabharwal of Tata Capital as a contender for the bank’s top position is completely untrue. READ MORE 


MARKET CHECK:: Sensex down 100 pts now


BROKERAGE RADAR | HDFC Securities on Cipla

Cipla received warning letter at Goa plant from the US FDA. The plant was classified as OAI (Official action Indicated) in Jan 20, and as such we did not factor any product approvals in our estimates. As per the company, no limited launches are impacted and the guidance of one niche launch per quarter remains on track. Goa plant accounts for 2.5% of FY19 revenues (single sourced products) and ~6% of revenues (including products with alternate source). The resolution timeline remains uncertain and will be based on Cipla’s response to US FDA (mid March), completion of remediation activities and a successful re-inspection.

BUZZING STOCK | Sumitomo Chemical jumps 9%


India Ratings lowers domestic steel sector outlook for FY21 to negative

High iron ore premiums for new mine owners (both captive and merchant) could alter input costs for steel mills, it said.
 
The slowing economic activity as reflected in Ind-Ra’s GDP estimates of 5 per cent and 5.5 per cent for FY20 and FY21, respectively, would continue to affect demand growth in the sector and any significant pick-up is unlikely. READ MORE

Shree Cement overtakes ACC to commission world's largest kiln in UAE

ACC said one of its lines in its Wadi II plant has the company’s largest kiln with a capacity of 12,500 tpd. Sources suggested that ACC's Wadi-II plant so long had held the distinction of being the largest cement kiln globally which now has been overtaken by Shree Cement, albeit in the UAE. READ MORE

Index Contributors at this hour


BSE500 stocks that hit 52-week low today

COMPANY PRICE(rs) 52 WK LOW CHG(%)
ALLAHABAD BANK 13.00 12.90 -4.06
ANDHRA BANK 14.70 14.50 -0.34
B H E L 32.65 32.10 -1.80
BALMER LAWRIE 104.55 102.65 -1.37
BANDHAN BANK 395.90 387.50 0.42
» More on 52 Week Low

Merger of public sector banks on schedule, says Nirmala Sitharaman

“There are no uncertainties about bank mergers. I am also conscious about the extra work related to core banking… I have asked bankers to do (it). But on merger, we are going as per the schedule. There are no uncertainties and I am on course. There needn’t be any speculation,” Sitharaman said during a press briefing on Wednesday. READ MORE

NEWS ALERT | Sadbhav Infra receives Rs 833 cr in connection with six Operational Road Projects: BSE filing


SECTOR WATCH :: PSBs trade lower; PNB, BoB, Indian Bk, 4 others hit 52-week lows


NEWS ALERT | DCC to consider if any relief can be given to telcos: sources to CNBC TV18

>> DoT unlikely to consider revising or reducing the AGR amount

Raining dividends on Street: Firms loosen purse strings to help promoters

Market experts say that based on profit projections for the next few quarters, companies are paying higher interim dividends. More companies are likely to dole out dividends before the end of March, they add. Typically, the final dividend payout gets spilled over to the next financial year. READ MORE

MARKET CHECK:: Sensex off day's low


Graphite India hits 30-month low, tanks 25% in 5 weeks on weak Q3 results

Shares of Graphite India continued to remain under pressure and slipped 5 per cent on Thursday to hit a 30-month low of Rs 242 on the BSE on concerns of weak earnings going forward. The stock of the graphite electrode maker was trading at its lowest level since August 22, 2017. In the past five weeks, it has tanked 25 per cent after reporting a consolidated net loss of Rs 353 crore in the December quarter (Q3FY20), due to steep fall in electrode prices. READ MORE

BROKERAGE RADAR | Edelweiss Securities on Federal Bank

Federal Bank’s performance over the last few years has been characterised by soft revenue growth and volatile asset quality. Management strategy, which is centred on leveraging distribution and digital franchise and building new capabilities, is credible. We estimate the bank would clock RoA/RoE of 1.1 per cent / 13–14 per cent by FY21. Maintain ‘BUY/SO’.

BUZZING STOCK:: Titan rises 2% in a weak market


BROKERAGE RADAR | ICICI Securities on Apollo Tyres

RATING: HOLD

Target: Rs 165 (10%)

Target Period: 12 months


Apollo Tyres (ATL) has unveiled plans to raise equity worth | 1,080 crore (pending shareholder approval) via issue of 10.8 crore compulsorily convertible preference shares (CCPS) of Rs 100 each. The shares would be placed preferentially to Emerald Sage Investment, an arm of private equity firm Warburg Pincus.

Currently, we do not alter our estimates or target price for ATL and continue valuing it at Rs 165 i.e. 5.3x FY22E EV/EBITDA. As far as financials are concerned, the situation stays same on the operating matrix front i.e. sales, EBITDA and operating margins while PAT will adjust for the change in interest outgo pursuant to a decline in debt levels. On the B/S front, leverage ratios improve with nearly no change on the RoCE front, which remains muted at <10%. RoE, however, will reduce as the base gets bloated.

Double whammy: Power brands give Sanofi revenues and an edge over peers

The Sanofi India stock hit fresh highs on Wednesday, after it posted a better-than-expected December quarter (Q3) performance. Revenue growth continues to be driven by a large branded portfolio in the high-growth chronic segment. The tilt towards the more-profitable chronic segment, coupled with a leadership position in diabetes therapy, gives it an edge over its peers. READ MORE

Cipla down 8% in 5 days, nears 52-week low on warning letter for Goa plant

The stock of the pharmaceutical company was trading close to its 52-week low of Rs 390 touched on October 11, 2019. In the past five trading days, Cipla slipped 8.5 per cent, as compared to a 4 per cent decline in the benchmark S&P BSE Sensex and 3 per cent fall in the S&P BSE Healthcare index. READ MORE

Is it a good time to buy gold as a safe-haven bet amid coronavirus fears?

For an asset class that has already seen an appreciation of around 25 per cent in a year, analysts expect the onset of coronavirus (Covid-19) to fuel a further upside in gold prices over the long-term should the panic spread. In the short-term (six months), however, they expect the upside to be limited given the rally since the past year. READ MORE

SECTOR WATCH:: PSU banks trade lower


NEWS ALERT | L&T Construction wins significant contracts for its various businesses


TVS Motor partners with Motomundo SA for expansion in Honduras

As a part of this association, Motomundo SA will facilitate the sales and service of TVS products across all Motomundo stores in the country in a phased manner. Motomundo stores will start with an exclusive outlet for TVS Motor Company and will expand it to three stores in the country within a year. READ MORE

Will Q3FY20 GDP numbers surprise on Friday? Here's what analysts expect

Analysts at Nomura, for instance, had expected the GDP growth to slow further to 4.3 per cent in Q4 2019 from 4.5 per cent in Q3, and predicted a below-trend growth of 5.7 per cent in FY21 from 4.7 per cent in FY20. READ MORE

Aarti Drugs nears 5-year high; stock rallies 26% in 5 days in a weak market

Shares of Aarti Drugs rallied 9 per cent to near five-year high of Rs 813 on the BSE on Thursday in an otherwise weak market on expectation of strong volume growth to continue and reflect in revenue and earnings. The pharmaceutical firm's stock was trading at its highest level since April 15, 2015. In the past five days, the stock has surged 26 per cent, as compared to 4.4 per cent decline in the benchmark S&P BSE Sensex. The stock hit an all-time high of Rs 874 in April 2015. READ MORE

GOLD OUTLOOK | Hareesh V, Head of Commodity, at Geojit financial services

Gold’s haven demand may edge higher, as investors sought safety in precious metals on rising fears of a pandemic. Weak global equities and a correction in US Dollar would add further support to prices. At the same time, moderate physical market activities and chances of higher level profit booking may dent major upsides.
 
Technical outlook: While prices stay above $1620 expect rallies to continue with stiff resistance seen at $1662 followed by $1695 levels. A close below $1595 is required to negate the bullish outlook.

BROKERAGE RADAR | Sharekhan on Divi's Lab

Maintain Buy with a revised PT of Rs 2,430: Divis is one of the few pharma companies which is in a sweet spot to capitalize on the opportunities in the API space. A strong run up in the API prices in the recent past is attributable to likely supply disruption from China (due to outbreak of the Corona Virus), a leading supplier of API’s globally and accounting for 20% of the global output.

BROKERAGE RADAR | Motilal Oswal Financial Services on Federal Bank

Federal Bank (FB) is well placed to deliver RoA expansion led by moderating slippage trends, which will facilitate controlled credit costs. Margin prospects appear
promising with the asset mix change toward high-yield segments. Also, the strong liability franchise will enable lower cost of funds. The bank will add branches in a
calibrated manner and thus the C/I ratio is expected to improve to ~48% by FY22 from 50% in FY19. We slightly tweak our estimates and project earnings CAGR of
25% over FY20-22 with RoA/RoE of 1.2%/15.5% by FY22. We believe that the stock is trading at inexpensive valuations (1.1x Sep’21E ABV) and thus offers ample scope of re-rating. Maintain Buy with a TP of Rs 115 (1.4x for Sep’21E ABV).

Momentum picks by ICICI Securities


Five basic tools to spot bearish reversals or downtrend in trading

Markets move in waves, thus forming peaks and troughs. From a long-term perspective, corrective moves are said to be healthier and effective for a smoother trend. While one can capitalise on an upward rally by going long, identifying corrective moves can help in booking profits and entering short trades. READ MORE

Mahindra CIE Automotive slips over 8% post December quarter results

Shares of Mahindra CIE Automotive, the automotive components supplier, declined 8.5 per cent to Rs 129 apiece on the BSE on Thursday after the company reported 91 per cent year-on-year (YoY) fall in its consolidated net profit at Rs 12.6 crore for the quarter ended December 31, 2019 (Q3FY19). The company had posted profit of Rs 142 crore in the year-ago period. READ MORE

Market check


Analysts turn cautious on metal stocks as coronavirus fears escalate

Most analysts now have turned cautious on the sector – at least till the time there is clarity on the damage caused due to the health scare. In this backdrop, most analysts have started revising downward their growth forecasts for China and the world economy. READ MORE

Market check


Why LIC's present governance culture makes it a poor investment bet

India does not have a sovereign wealth fund but if it did, it could look like the Life Insurance Corporation (LIC). This did not happen by design, but the combination of a government-run life insurance business operating in a monopoly market until 2000 has made LIC a de facto one.
 
The institution still does not fully report to the insurance sector regulator, being governed by a separate Act. It is also one of India’s largest employment generators, its total agency force being just shy of 1.2 million. READ MORE

BUZZING STOCK:: Mphasis gains 2% in a weak market


MARKET UPDATE:: Nifty slips below 11,600


Market check | Weakness continues in the markets


Mahindra CIE Automotive dips over 5%


Nifty IT index slides in morning deals


Market check


TVS Motor declines in trade


Vodafone Idea jumps 4%

>> Co is seeking Rs 8,000 cr, due as GST refund, to be adjusted against AGR payment


Biocon slips 1.6%

>> Co received 2 observations for Bengaluru's API unit

Asian Paints dip 0.5%


The India Cements add 3%

>> Radhakishan Damani and his brother Gopikishan S Damani, bought 27,25,468 and 83,71,516 shares, respectively on Wednesday, NSE bulk deal data showed. Gopikishan bought shares at an average price of Rs 98.42 apiece while Radhakishan purchased at Rs 104.16.


Apollo Tyres trade marginally higher

>> Apollo Tyres on Wednesday said private equity firm Warburg Pincus will invest Rs 1,080 crore (around $150 million) in the company.


Sectoral trends at NSE during Opening trade


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


Opening Bell


Opening Bell


Exchanges can offer direct mutual fund plans after approval from Sebi

"In order to further increase the reach of this platform, it has been decided to allow investors to directly access infrastructure of the recognised stock exchanges to purchase and redeem mutual fund units directly from mutual fund and asset management companies," Sebi said in its circular on Wednesday. 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 flat at 71.65/$ vs Wednesday's close of 71.66 against the US dollar

Double whammy: Power brands give Sanofi revenues and an edge over peers

The Sanofi India stock hit fresh highs on Wednesday, after it posted a better-than-expected December quarter (Q3) performance. Revenue growth continues to be driven by a large branded portfolio in the high-growth chronic segment. The tilt towards the more-profitable chronic segment, coupled with a leadership position in diabetes therapy, gives it an edge over its peers READ MORE

Stocks to watch: Apollo Tyres, India Cements, HUL, GSK Consumer, IDBI Bank

Apollo Tyres: Apollo Tyres on Wednesday said private equity firm Warburg Pincus will invest Rs 1,080 crore (around $150 million) in the company.
 
India Cements: Radhakishan Damani and his brother Gopikishan S Damani, bought 27,25,468 and 83,71,516 shares, respectively on Wednesday, NSE bulk deal data showed. Gopikishan bought shares at an average price of Rs 98.42 apiece while Radhakishan purchased at Rs 104.16. READ MORE

With stellar returns, SBI Cards a good bet despite premium valuation

Following robust returns provided by SBI Life Insurance within three years of listing, the market is quite positive on SBI Cards and Payment Services (SBI Cards). Strong fundamentals, coupled with a healthy growth potential and an attractive return profile, makes the IPO — opening on March 2 — a good bet despite its premium valuation. READ MORE

NEWS ALERT | US FDA issues 2 observations to Biocon's API unit in Bengaluru: BSE filing

>> Co says, US FDA issued Form 483; Procedural in nature

>> Says, will respond to the observations with a Corrective and Preventive Action  Plan

Alert: US FDA conducted a post-approval and GMP inspection of Small Molecules API units b/w Feb 20-26.

From Hindalco to ITC, hot stocks to watch on Thursday

Bank Nifty
 
Current: 30,307 (30,377)
 
Target: NA
 
Stop long positions at 30225. Stop short positions at 30525. Big moves could go till 29950, 30800. Trend remains negative but shortcovering could trigger a rally. READ MORE

Bulk deals on BSE as on Wednesday

Bulk deals on NSE as on Wednesday

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


Rupee Check

Source: Bloomberg



Oil Check

>> At 8:08 am, Brent Crude Futures was at $52.08 per barrel-mark, down 1.4 per cent.

>> US Crude, meanwhile, hit a one-year low during the overnight trade.

SGX Nifty

>> At 8:05 am, the Singaporean Exchange for Nifty Futures was down 51 points at 11,674

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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