Expectations of slower GDP numbers for September quarter (Q2FY20) due later in the day and weak global cues weighed on investor sentiment on Friday with the benchmark indices sliding nearly a per cent.
It is widely expected that the second quarter GDP print will slip below 5 per cent on subdued consumer demand, weakening private investment and falling exports courtesy global slowdown.
The S&P BSE Sensex lost 336 points or 0.82 per cent to settle at 40,794 with YES Bank (down 2.50 per cent) being the top loser and Bharti Airtel (up over a per cent) the biggest gainer. During the day, the index hit a low of 40,664.18 levels. Reliance Industries (RIL), ICICI Bank, Hindustan Unilever (HUL), and State Bank of India (SBI) contributed the most to the index's fall.
NSE's Nifty50 index closed the session at 12,056, down 95 points or 0.78 per cent.
On a weekly basis, Sensex gained 0.54 per cent and Nifty added 0.66 per cent.
In the broader market, Nifty Midcap 100 index ended flat at 17,222, up 0.06 per cent while Nifty SmallCap 100 index outperformed the benchmarks by settling nearly a per cent higher.
Sectorally, except realty stocks, all the counters ended in the red. Media stocks tumbled the most, followed by PSU banks, metals and auto stocks. The Nifty Realty index ended a per cent higher at 282 levels.
Zee Entertainment slipped nearly 6 per cent to end at Rs 293.55 apiece on the BSE. The stock has been under pressure on series of developments such as Subhash Chandra's resignation as chairman of the company and then stepping down of three directors.
Shares of Future Group companies rallied in the trade a day after the Competition Commission of India (CCI) said it has approved Amazon.com NV Investment Holdings' proposal to acquire about 49 per cent share in Future Coupons (FCL) - a subsidiary of Future Group. READ MORE
Indiabulls Housing Finance rallied 13 per cent to Rs 377 during the day on the National Stock Exchange (NSE) after foreign portfolio investors (FPIs) bought nearly one percentage points stake in the company through open market. The stock of the housing finance company had zoomed 25 per cent on Thursday. However, the stock reversed gains in the intra-day deals to end at Rs 290, down over 13 per cent on the BSE.
Asian shares slipped on Friday, knocking a global stock index off its path to hitting an all-time peak as investors turned cautious, fearing a new US law backing Hong Kong protesters could torpedo efforts to end the US-China trade war. MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 per cent. Hong Kong led the dip with losses of 2 per cent. South Korean shares lost 1.4 per cent and Japan's Nikkei eased 0.5 per cent.China's blue-chips gave up 1.3 per cent a day before the country reports manufacturing activity.
In Europe, shares edged lower.
In commodities, oil prices were mixed. Investors awaited a meeting of OPEC and its allies next week that may result in the extension of an output cut agreement to support the market.
MARKET COMMENT :: Vinod Nair, Head of Research, Geojit Financial Services
Profit-booking ahead of economic data and selling pressure in Asian peers due to risk of retaliation from China add volatility in the market. The recent rally has lifted the market valuation, which may limit the headroom of key indices to perform well in the short-term. Consequently, investors are likely to shift focus for quality mid & small-caps, which are likely to out-perform in the near-term
Banks, metals, autos drag
HUL, Tata Motors, YES Bank among top Sensex losers
Sensex ends over 300 points lower
Markets this week
The Sensex gained 1.1% in the week to reach a new life-time high. Markets were buoyed by progress on phase-1 of the US-China trade deal, resolution of stress in financial sectors and multiple government initiatives to arrest the ongoing economic slowdown.
L&T, TCS and Mahindra & Mahindra were the top losers in the BSE-30 Index, while Tata Steel, YES Bank and IndusInd Bank were the top gainers. FPIs bought equities worth US$1.5 bn over the past five trading sessions while DIIs bought US$192 mn worth of equities in the same period.
(Source: Kotak Securities note)
The S&P BSE Sensex slipped 336 points or 0.82 per cent to end at 40,794 while NSE's Nifty50 index ended at 12,056, down 95 points or 0.78 per cent.
MARKET COMMENT :: Chris Wood of Jefferies
It remains remarkable how polarised the political debate in America and the related media coverage is. Reports suggest that the strategy of the 45th president is to go on the offensive when the impeachment proceedings reach the Senate, which will probably be in January, with the Republican head of the Senate Judiciary Committee, Lindsey Graham, acting as the Donald’s pit bull. This is likely to lead to intense focus on the activities of Joe Biden’s son Hunter in Ukraine.
Donald Trump clearly thinks he has done nothing wrong, which is why he was so quick to release the original transcript of his July telephone call with Ukraine President Volodymyr Zelenskyy. This is why, if there is a smoking gun, it has not in GREED & fear’s view been revealed as yet.
If the impeachment proceedings are likely to liven up, assuming they reach the Senate, the stock market continues to grind higher amidst continuing hopes of a US-China trade deal, with the renewed inflows into equities supported by the knowledge that the Fed has renewed balance sheet expansion.
(Source: Wood's weekly newsletter, GREED & fear)
CD Equisearch on Can Fin Homes
The stock currently trades at 2.5x FY20e BV (13.2x FY20e EPS of Rs 29.72) and 2x FY21e BV (11.2x FY21e EPS of Rs 34.84). Majority of the customer profile consists of salaried individuals which do not put pressure on the quality of loan book. As of March 2019, over 70% of the loan book comprised of salaried individuals. Karnataka remains a dominant contributor with almost 40% share of the loan book.
Fee income currently is mainly contributed by the processing fee component while the contribution from third party business remains negligible since the company just last year started cross-selling insurance products. This is a lucrative avenue for the company to explore going forward. Weighing odds, we assign ‘buy’ rating on the stock with target price of Rs 478 (previous target Rs 417) based on 2.5x FY21e BV for a period of 9-12 months
Jefferies on two-wheeler segment
Sharp price escalation post BS-6 is likely to be a headwind to demand recovery at least initially. However, the extent of impact remains to be seen especially given sharp slowdown & inventory de-stocking in FY20E. The next few quarters will likely remain fuzzy for 2w as various themes like continued BS-4 de-stocking & BS-6 re-stocking in wholesales, retail pre-buying, consumer preference for upgraded models, use of higher financing & discounts, adverse impact of BS-6 models on margins and gradual normalization play out. We note though that fuel availability should not be an issue in 2w as BS-6 models can use BS-4 gasoline.
Rolls for Nifty/BankNifty stood at 79% (1.46cr shrs)/70% (18.08lakh shrs) vs 84% (1.49cr shrs)/63% (8.08lakh shrs) previous month, as aggressive long buildup along with sharp increase in OI base seen on BankNifty led by ICICI Bank, Market-wide rolls better than previous month at 93% vs 3months avg. of 92%. FII’s positioning on index futures long to short ratio starts at 1.54x, FII’s long index rollovers stood at 75% vs 3months avg of 67% along with unwinding on short positions also seen. Max. call/put OI on Nifty for December monthly series stands at 12,500 calls (1.7mn) and 12,000 puts (OI 3mn). We expect continuation of the rally with mild periodic profit booking
(Source: YES Securities)
IPO watch :: ICICI Securities on Ujjivan SFB
Ujjivan SFB, led by the promoter business, started with a substantial proportion of MFI loans. However, there has been a continuous focus on increasing share of non-MFI segment via introduction of new products including affordable loans, MSE loans, auto loans. Share of MFI has declined from 97.5% in FY17 to 79.2% in H1FY20. Such a shift into non-MFI book provides the required product diversification, which will entail growth as well enable asset quality management.
The company had a steady ride in terms of advances growth along with maintaining asset quality. There was continued focus on garnering retail liability along with building CASA base. We have a SUBSCRIBE recommendation on the stock. Further, at the IPO price band of | 36-37, the stock is available at a P/BV of ~2.2x (post issue) at the upper band on H1FY20 basis
Top 5 losers on the BSE at present
It will need more than a rate cut to salvage India's sputtering economy
For Das to even contemplate taking his foot off the monetary pedal now would be a mistake. He should look past the recent uptick in inflation last month, largely attributed to vegetables such as onions, a staple of Indian cooking. Those price gains helped push the measure beyond the RBI's 4 per cent medium-term target. More important is the slide in core inflation, which strips out volatile commodity prices. READ MORE
BUZZING STOCK:: Bharti Infratel zooms over 7% in an otherwise weak market
Global markets check
Asian shares slipped on Friday, knocking a global stock index off its path to hitting an all-time peak as investors turned cautious, fearing a new US law backing Hong Kong protesters could torpedo efforts to end the US-China trade war.
MSCI All Country world index, whichtracks shares in 49 countries, was down 0.39 per cent at 548.48, less than 0.4 per cent away from all-time peak hit in January last year before the start of US-China trade war.
European stocks look set to start Friday lower with pan-region Euro Stoxx 50 futures down 0.3 per cent in early trade, following a bleak Asian morning session.
MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 per cent. Hong Kong led the dip with losses of 2 per cent. South Korean shares lost 1.4 per cent and Japan's Nikkei eased 0.5 per cent.
Ujjivan Financial gains for sixth straight day ahead of Ujjivan SFB IPO
Shares of Ujjivan Financial Services (UFSL) were trading higher for the sixth straight day, up 6 per cent at Rs 346 on the BSE on Friday ahead of the subsidiary company’s Ujjivan Small Finance Bank (USFB) initial public offer (IPO) due next week. In the past six trading days, the share price of UFSL has appreciated by 19 per cent, as compared to one per cent rise in the S&P BSE Sensex. The stock is trading close to its 52-week high of Rs 372, touched on June 4, 2019. READ MORE
NEWS ALERT | Indiabulls group stocks erase early morning gains; Indiabulls Housing down 14%, down 25% from intra-day high
NEWS ALERT | Delhi High Court adjourns the Indiabulls Housing case to February 28: CNBC TV18
-- Delhi HC refuses to psas interim order on company's plea
-- Company's plea was that normal business should not be affected due to PIL
Sectoral indices at this hour
Likely fall in Q2 GDP, profit booking: 5 factors that dragged markets lower
After scaling record highs in the previous session, stock market came under pressure on Friday with across-the-board selling in metals, fast moving consumer goods (FMCG) and auto counters. The S&P BSE Sensex slipped as much as 366 points, or 0.9 per cent, in intra-day trade to hit a low of 40,763.83 during the day. NSE's Nifty50 index slipped below the crucial 12,100-mark to hit a low of 12,049.70 levels, down 101 points or 0.83 per cent during the day. READ MORE
PNB Housing Finance dips 3%
Cut in corporate tax rate important for investments: CEA Subramanian
Chief Economic Adviser KV Subramanian on Friday said that the government recognised the need to cut the corporate tax to boost investments. For the last few quarters the cycle of growth has not been as it was earlier, he said at an event here and added that "corporate tax rate is important for investments". READ MORE
DLF's inventory sales key to gains, firm to breach FY20 sales guidance
DLF has been on an uptrend over the past two months (up by 51 per cent since October), on expectations that monetisation of its inventory, steady gains from the rental business, and new projects will lead to higher cash flows and improve growth visibility. Strong September quarter results and the inclusion in the MSCI India Domestic Index also helped boost its stock returns. READ MORE
Sensex down over 400 pts now
Heatmap: S&P BSE Sensex
YES Bank off day's high
Tata Steel extends fall
Contribution to Sensex's fall today
Nifty slumps over 90 pts
Sensex slides over 300 pts ahead of Q2 GDP nos
Adani Group shares rally; Adani Gas, Adani Transmission surge 12%
Shares of Adani Group companies were in focus on Friday and rallied up to 12 per cent intra-day on the back of heavy volumes on the BSE in an otherwise weak market. Adani Gas (Rs 168) and Adani Transmission (Rs 315) rallied 12 per cent each on the BSE. Adani Power (up 8 per cent at Rs 66.60), Adani Green Energy (5 per cent at Rs 139), Adani Enterprises (4 per cent at Rs 221) and Adani Ports and Special Economic Zone (3 per cent at Rs 384) were up in the range of 3-8 per cent on the BSE. READ MORE
Govt may announce UPA-style bailout of stressed NBFCs in Budget 2020
The government has strongly advocated direct intervention by the Centre in stressed non-banking financial companies (NBFCs) on the lines of the model followed by the United Progressive Alliance (UPA) government under then finance minister Pranab Mukherjee in 2009. READ MORE
BROKERAGE RADAR | Edelweiss Securities on Persistent Systems
We expect Persistent to regain growth momentum as sales issues are addressed. Dimmed focus on Accelerite business is also a positive. We also perceive a huge client-mining opportunity, which can further boost growth. The stock trades at 14.3x FY20E EPS. We retain ‘BUY/SP’ with TP of Rs 739 (14x Q4FY21E EPS).
YES Bank gains 6% ahead of board meet today to consider fundraising
YES Bank shares climbed 6 per cent to Rs 74 on the BSE on Friday ahead of the board meet today to consider fundraising plan. The stock of the private sector lender rallied 17 per cent after the Bank, on Tuesday, said its board will meet on Friday, November 29, 2019, to discuss and consider fundraising by issue of equity/equity linked securities through permissible modes. READ MORE
Experts see 25 bps rate cut by RBI in December, FY20 GDP forecast at 6%
When the Reserve Bank of India’s (RBI) monetary policy committee (MPC) meets between December 3 and December 5 to review the interest rates, it will face the dilemma of strengthening a dwindling economy while keeping a check on inflation at around 4 per cent. Analysts, however, see the MPC slashing rates by up to 25 basis points (bps), along with a marginal cut in FY20 gross domestic product (GDP) growth forecast. READ MORE
Dr Reddy's Labs dipped over 1%
BUZZING STOCK:: Adani Transmission zooms 10%
Future Retail zooms up to 18% on CCI approval to Amazon-Future Coupon deal
Shares of Future Group companies gained big in the early morning deals on Friday, a day after the Competition Commission of India (CCI) said it has approved Amazon.com NV Investment Holdings' proposal to acquire about 49 per cent share in Future Coupons (FCL) - a subsidiary of Future Group. Future Coupons own 7.3 per cent shares in Future Retail, and with this transaction, Amazon would acquire around 3.58 per cent stake in Future Group. READ MORE
Indiabulls Housing extends rally on buying by FPIs, zooms 40% in two days
Shares of Indiabulls Housing Finance rallied 13 per cent to Rs 377 in early morning deals on Friday on the National Stock Exchange (NSE) after foreign portfolio investors (FPIs) bought nearly one percentage points stake in the company through open market. The stock of the housing finance company had zoomed 25 per cent on Thursday. READ MORE
Sensex extends fall
Bharti Airtel up 2%
Ashoka Buildcon gains
Aurobindo Pharma up 1%
Bharti Infratel recovers from opening lows
Tata Steel dips in early trade
L&T Finance Holdings climbs over 4%
YES Bank gains ahead of board meet today to consider fundraising
Momnetum picks by ICICI Securities
Future Retail jumps over 14%
Indiabulls Housing Finance jumps over 8.5%
Sectoral gainers and losers on the NSE
Top gainers and losers on the S&P BSE Sensex
At 09:16 am, the S&P BSE Sensex was trading 86 points or 0.21 per cent lower at 41,044 while NSE's Nifty50 index was quoting 22 points or 0.18 per cent lower at 12,129.
Stocks to watch: NBFCs, Aurobindo Pharma, YES Bank, Ashoka Buildcon, Airtel
NBFCs: The government has strongly advocated direct intervention by the Centre in stressed non-banking financial companies (NBFCs) on the lines of the model followed by the United Progressive Alliance (UPA) government under then finance minister Pranab Mukherjee in 2009.
Aurobindo Pharma: Aurobindo Pharma on Thursday said its subsidiary Auro Vaccines LLC has entered into a pact to acquire certain business assets from Profectus BioSciences Inc USA for an upfront cash consideration of USD 11.29 million (around Rs 80 crore) with potential earn-outs on achieving certain milestones. READ MORE
Nifty in pre-open
Market at pre-open
Rupee opens unchanged at 71.61/$ against previous day's close
Commodity outlook by Tradebulls Securities
Buy Natural Gas | TGT: Rs 190 | Stoploss: Rs 170
Natural Gas is near its support zone of 177 where 200 DMA is. The approaching cold will be beneficial for natural gas prices. Historically, Natural Gas have thrived around Nov-Dec period. RSI_14 has started curving upwards and after two days of selling pressure, Natural Gas has made doji candle indicating pause in selling. So we recommend buy with expected target of Rs 190 and stoploss of Rs 170 on a closing basis.
Derivatives strategy on IDFC First Bank by HDFC Securities
Bull Spread strategy on IDFCFIRST BANK
Buy IDFC FIRST BANK December 45 Call at Rs 1.50 & simultaneously sell 48 call at Rs 0.6
Lot Size: 12,000.
Cost of the strategy Rs 0.90 (Rs 10,800 per strategy)
Maximum profit Rs 25,200 if IDFC First Bank closes at or above 48 on December expiry.