MARKET WRAP: Sensex loses 155 pts amid selling in banks; IBHFL tumbles 34%

Topics Markets | MARKET WRAP

Equity benchmark indices ended Monday's session in the negative territory owing to heavy selling in banking, pharma and realty counters. Further, lack of any catalysts and subdued global cues, too, restricted market participants from making fresh bets. 

The S&P BSE Sensex lost 155 points or 0.40 per cent to settle at 38,667, with YES Bank (down 15 per cent) being the biggest drag and Bharti Airtel (up 5 per cent) the top performer. During the day, the headline index of the BSE hit an intra-day high and low of 38,873.12 and 38,401.09, respectively. HDFC, ICICI Bank and HDFC Bank contributed the most to the index's loss while Infosys and Reliance Industries (RIL) gave the much-needed support. 

In the broader market, both small and mid-cap indices underperformed the frontline indices. The S&P BSE MidCap index ended at 14,104.13, down 162 points or 1.13 per cent while the S&P BSE SmallCap lost 161 points or 1.21 per cent to end at 13,171. 

On the NSE, the Nifty50 index closed at 11,477.25 levels, down 35 points or 0.31 per cent.

Among the sectoral indices, Nifty Bank lost nearly 800 points or 2.59 per cent to end at 29,103.85. Nifty PSU Bank index hit 52-week low in the intra-day session. The index closed at 2,293.85 levels, down 82.50 points or 3.47 per cent. Pharma stocks, too, bled in the session with the Nifty Pharma index ending at 7,549.20, down 146 points or 1.90 per cent. 

IT stocks, on the other hand, logged impressive gains with the Nifty IT index surging around 2 per cent to settle at 15,527.55 levels. The Nifty FMCG index also ended in the green.

BUZZING STOCKS

Shares of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance came under pressure after the Reserve Bank of India (RBI) initiated prompt corrective action (PCA) plan on the former. Both LVB and Indiabulls Housing Finance are proposed to merge.

That apart, stocks of Indiabulls Group lost in the trade after the Delhi High Court agreed to hear public interest litigation (PIL) seeking special investigation team (SIT) probe into Indiabulls Housing Finance. Indiabulls Housing Finance saw its sharpest intra-day fall since listing, plunging 38 per cent to Rs 240, also its 52-week low on the BSE. At close, Indiabulls Housing settled at Rs 255.50, down over 34 per cent while LVB was locked in the lower circuit band of Rs 34.75, down 5 per cent. 

YES Bank hit a 10-year low in the intra-day trade on the BSE. At close, shares of the bank stood at Rs 41.45, down 15 per cent.

GLOBAL MARKETS 

Asian stock markets, including China’s, were little changed on Monday, shrugging off news that the US administration is considering delisting Chinese companies from US stock exchanges. MSCI's broadest index of Asia-Pacific shares outside Japan was flat, while China's Shanghai stock index slipped 0.1 per cent. European shares were seen struggling when they open for trading. Pan-European Euro Stoxx 50 futures were down 0.11 per cent, German DAX futures down 0.08 per cent and FTSE futures 0.16 per cent lower.

(With inputs from Reuters)


4:02 PM IST Having factored the knee-jerk benefit from corporate rate cut, market is consolidating based on setbacks in weakening financial & economic progress. We feel that 11,100 to 11,300 will be a strong support for Nifty50 in the near to medium-term, which can develop going forward based on sustainability of post festival demand.  

4:01 PM IST

4:01 PM IST

3:41 PM IST The S&P BSE Sensex slipped 155 points or 0.40 per cent to end at 38,667.33, while NSE's Nifty50 index ended at 11,477.25, down 35 points or 0.31 per cent. 

3:08 PM IST -- Tax cuts have to be followed through by land and labour reforms;  -- Quick steps are needed to revive the real estate sector; 

3:06 PM IST Benefits of India’s renewed focus on developing water infrastructure should be multi-fold but largely back-ended over FY20-24. We believe companies in the E&C and pipes and pumps space should be the prime beneficiaries, within which, in our view, pipe/pump companies are a better way to play the theme over infrastructure players. L&T (Buy) is our preferred pick in the E&C space, while Jindal Saw, Tata Metalliks, and KSB are the key players (all unrated) active in pipes/pumps category.

2:57 PM IST -- Says, We are committed to grow our portfolio in the renewable energy space, making Reliance Power a “Future Green” company

2:55 PM IST Reiterating its commitment to cleaner and greener power by reducing emissions, Reliance Power is undertaking a capex of nearly Rs. 4,000 Crores to install FGDs in its coal based plants: Anil Ambani #RelianceAGMs2019— Reliance Power (@reliancepower) September 30, 2019

2:54 PM IST (Source: NSE)

2:48 PM IST The problem at PMC Bank only became apparent when the Reserve Bank of India last week banned depositors from taking out more than Rs 1,000 for six months without offering any explanation. That was a mistake.   Tiny and unlisted as it is, PMC is a popular option for small savers in the state of Maharashtra, whose capital Mumbai is the nation’s financial hub. With public and media pressure building, the RBI relaxed the withdrawal limit to Rs 10,000. In doing so, the regulator also gave a reason for the withdrawal curbs. These “were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposure,” it said. READ MORE

2:40 PM IST

LIVE UPDATES

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

Having factored the knee-jerk benefit from corporate rate cut, market is consolidating based on setbacks in weakening financial & economic progress. We feel that 11,100 to 11,300 will be a strong support for Nifty50 in the near to medium-term, which can develop going forward based on sustainability of post festival demand.
 

Sectoral losers and gainers on the NSE


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


CLOSING BELL

The S&P BSE Sensex slipped 155 points or 0.40 per cent to end at 38,667.33, while NSE's Nifty50 index ended at 11,477.25, down 35 points or 0.31 per cent. 

Corporate India is catious: Ashok Wadhwa, Ambit to CNBC-TV18

-- Tax cuts have to be followed through by land and labour reforms; 

-- Quick steps are needed to revive the real estate sector; 

Emkay Global on Water Sector

Benefits of India’s renewed focus on developing water infrastructure should be multi-fold but largely back-ended over FY20-24. We believe companies in the E&C and pipes and pumps space should be the prime beneficiaries, within which, in our view, pipe/pump companies are a better way to play the theme over infrastructure players. L&T (Buy) is our preferred pick in the E&C space, while Jindal Saw, Tata Metalliks, and KSB are the key players (all unrated) active in pipes/pumps category.

NEWS ALERT | Committed to grow our portfolio with solar, wind, bio-mass, bio-gas: Anil Ambani at 33rd Reliance Group AGM

-- Says, We are committed to grow our portfolio in the renewable energy space, making Reliance Power a “Future Green” company

Reliance Group AGMs | Reliance Power

IPO WATCH | IRCTC offer subscribed 58% so far on Day 1 of the bidding process

(Source: NSE)

PMC Bank doesn't pose a systemic threat but it is a canary in the coal mine

The problem at PMC Bank only became apparent when the Reserve Bank of India last week banned depositors from taking out more than Rs 1,000 for six months without offering any explanation. That was a mistake.
 
Tiny and unlisted as it is, PMC is a popular option for small savers in the state of Maharashtra, whose capital Mumbai is the nation’s financial hub. With public and media pressure building, the RBI relaxed the withdrawal limit to Rs 10,000. In doing so, the regulator also gave a reason for the withdrawal curbs. These “were necessitated on account of major financial irregularities, failure of internal control and systems of the bank and wrong/under-reporting of its exposure,” it said. READ MORE

Buzzing | L&T Finance Holdings trading near day's low


NEWS ALERT | Steel Ministry seeks deferment of demerger/divestment of NMDC's Nagarnar steel plant: sources to CNBC TV18

-- Writes to DIPAM on Nagarnar steel plant

-- Says, demerger could impact project completion work

-- Divestment nod in 2016 had affected commissioning work; expect commissioning by June 2020

-- NMDC says, demerger could affect cash flows

Market check


NEWS ALERT | 1.1 % equity exchanged for Bharat Dalmia

-- 20.16 lakh shares (1.01% eq) worth Rs 169.23 cr trade at an average of Rs 825.50/sh

Second wave of NPAs? SBI, BoB, YES Bank could be hit, Jefferies says

Given the elevated debt serviceability ratio (the higher the ratio the poorer the ability to sustain debt levels), the 'A' rated corporate are the most prone to further credit rating downgrades. The report, however, points out that debt or interest repayment abilities of 'BBB' and below rated companies have seen an improvement. READ MORE  

Illustration by Binay Sinha

YES Bank continues to bleed, slips 15% to hit a 10-year low

In the past four days, the share price of YES Bank has tanked 26 per cent after YES Capital, one of the promoter entities of the private lender, sold nearly 2 per cent stake in the bank. In comparison, the S&P BSE Sensex was down 1 per cent during the same period. READ MORE  

Market is watching out the fiscal deficit post the tax cuts: Nilesh Shah, Kotak AMC to CNBC-TV18

-- Market is expecting some follow-up steps from the govt; 

-- Removing LTCG at this stage may not lead to losses for the govt; 

-- Govt has taken a 'Bazooka' step w.r.t corporate tax cuts
 
 

These stocks from BSE500 hit 52-week high today


MARKET CHECK


ICICI Securities on Adani Gas

AGL has the potential to emerge as one of the key players over the long term in the CGD business in India. With newly acquired GAs, the company, along with its JV partner, covers 8% of India’s population. This will drive volume growth on a sustainable basis. However, higher front loaded capex to set up a huge infrastructure network would limit profitability growth to 8.7 per cent CAGR in FY19-21E due to higher depreciation and interest expenses in our opinion. Hence, we have a HOLD rating on the stock with a target price of Rs 140/share. 

Mid, small-caps underperform in H1FY20; metals, pharma, autos worst-hit

While the Sensex has lost a marginal 0.3 per cent since the beginning of this fiscal, Nifty has slipped 1.1 per cent during this period. S&P BSE Small-cap index, however, tanked nearly 11 per cent and the S&P BSE Midcap index has shed 8 per cent. The BSE500 index, which accounts 95 per cent of the total BSE listed companies market capitalisation, has lost 2.8 per cent in H1FY20. READ MORE 


Reliance Securities on SRF

We foresee near-term stress for SRF owing to persistent pressure in technical textiles business and short-term disruption in demand-supply dynamics of BOPET. However, the chemicals business is expected to hold ground and the stress would partly ease once the demand growth covers incremental supply of BOPET by year end. We value chemicals business at 14x FY21 EBITDA, packaging film, technical textiles and other business at 6x FY21 EBITDA. The stock has been trading at a 1yr forward EV/EBITDA of 10.4x over the last 3 years, which is in-line with our implied EV/EBITDA. We initiate coverage on SRF with HOLD recommendation and an SOTP-based Target Price of Rs 2,710.

Essel Group is strong. Will sail through the difficult times, says Subhash Chandra: CNBC -TV18

- Rumours coming from vested interestes: Chandra

Indiabulls Group shares tumble; Indiabulls Housing tanks 38%

Indiabulls Housing Finance saw its sharpest intra-day fall since listing, plunging 38 per cent to Rs 240, also its 52-week low on the BSE. The trading volumes on the counter jumped four-fold with a combined 59 million equity shares changed hands on the NSE and BSE till 12:06 pm. READ MORE 
 

FPIs withdraw $3 billion between July-September; highest in 11 quarters

Overseas investors have pulled out over Rs 20,000 crore ($3 billion) from Indian equities during the third quarter of the calendar year 2019 (Q3CY19), the steepest quarterly outflow since the October –December 2016 quarter, when they had pulled out Rs 31,222 crore ($4.6 billion) from the equity market. READ MORE  


IPO WATCH | IRCTC offer subscribed 25% so far on Day 1 of the bidding process

(Source: NSE)

MARKET CHECK | Top gainers on the BSE at this hour


ICRA on Cement sector

“Cement demand remained subdued in 4M FY2020 and witnessed a modest increase of mere 2.7% as against the healthy 15.0% Y-o-Y in the corresponding period previous year. This resulted in the correction in prices since June 2019 across various markets. However, the average prices in the current year are still higher than the previous year. The price hikes undertaken in March-April 2019 sustained until June 2019. Even after some correction in the cement prices, they continue to remain higher in July-August 2019 on a Y-o-Y basis in the northern and western markets. We believe for the prices to increase from the current levels would have to be backed by the revival in the cement demand, says Sabyasachi Majumdar, Senior Vice President & Group Head – Corporate Ratings, ICRA. 

STOCK IN NEWS | Indiabulls Housing Finance extends losses, slumps 35%


MARKET CHECK | Top 5 losers on the BSE at this hour


Why the festival season may not bring much cheer despite tax cuts by govt

Indians typically buy everything from new cars to shoes for themselves and as gifts during celebrations steeped in religion and tradition. Yet the slowest economic growth in six years, unemployment at a 45-year high and tepid private consumption may see sales fall short of recent years, even after the government’s $20 billion tax break to companies earlier this month. READ MORE 

Prabhudas Lilladher on IRCTC IPO

We recommend a SUBSCRIBE on Indian Railway Catering & Tourism Corporation Ltd (IRCTC) given monopoly position in providing packaged drinking water, catering, online ticket booking services to passengers travelling by Indian Railways (IRs), strong business visibility amid re-introduction of service charge (Rs 15 per ticket for non-AC and Rs 30 per ticket for AC from 01 Sep 2019) for online ticket booking and plans to double the number of Rail Neer plants to 20 by FY21E 3) debt free & cash rich BS (Rs 11.4bn of cash as of FY19; ~23% of post money market cap) with healthy return ratios (RoE/RoCE of 26%/33% respectively as of FY19) and healthy dividend pay-outs (~41% over the last 3 years). 
 
Over FY17-19, IRCTC's sales/EBITDA/PAT have grown at a CAGR of 10.3%/9.1%/9.1% respectively. At the upper end of the price band, the issue is priced at 19x FY19 EPS of Rs17 (no listed peer available to facilitate comparison), and looks attractive due to limited competitive risks, and expected margin swing from revenue windfall with re-introduction of service charge.
 

NEWS ALERT | One-time excess payment by RBI, not a bar for Govt to seek interim dividend: sources to CNBC TV18

Alert: Reports said, Govt is mulling seeking Rs 30,000 cr as interim dividemd from RBI

Lakshmi Vilas Bank under pressure as RBI initiates PCA, IBHFL tanks 14%

Shares of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance came under pressure in the early trade on Monday after the Reserve Bank of India (RBI) initiated prompt corrective action (PCA) plan on the former. Both LVB and Indiabulls Housing Finance are proposed to merge. Last month, Indiabulls Housing Finance said it expects the regulator to take a decision on its merger plan with Lakshmi Vilas Bank in the next two months. READ MORE  


IDBI Bank declines 4% after Board approves 19.18% stake sale in APCIL

"The Board of Directors, at its meeting held on Friday, September 27, 2019, (have) granted in-principle approval to divest --partly or wholly-- 6,23,23,800 equity shares (19.18 per cent) of Asset Reconstruction Company (India) Ltd. (ARCIL) held by IDBI Bank," the bank said in an exchange filing.
 
The divestment would be subject to compliance with all applicable laws, regulations and guidelines, the bank added.READ HERE

NEWS ALERT | Reliance Capital clears Rs 73 crore in NCD payments: BSE filing

Reliance Capital Ltd has made interest and principal repayments of Rs 72.65 crore on Friday, September 27 and Monday, September 30 on a range of instruments including non-convertible debentures, term loans and inter corporate deposits. 
 

NEWS ALERT | RBI approves bank's proposal to increase authorized share capital: YES Bank via BSE filing

ALERT: The bank has sought RBI's approval for the move earlier, on September 25

NEWS ALERT

NEWS ALERT | Reliance Capital will no longer be in lending business: Anil Ambani at 33rd Reliance Group AGM, reports ET Now


NEWS ALERT | In the last 6 mths, RCapital has suffered collateral damage due to combination of factors: Anil Ambani at Rel Group AGM

-- Factors are crisis in the Financial Services sector, irrational action by Auditors & Rating Agencies, or now recognized temporary slowdown of Indian economy.

NEWS ALERT | Anil Ambani at 33rd AGM of Reliance Group

HDIL hits 52-wk low

-- PMC Bank helped real estate developer Housing Development & Infrastructure (HDIL) pay off loans of other public sector banks (PSBs) under one-time settlement schemes, so that the promoters could retain control over the real estate company.


YES Bank tanks 10%; slips to a 10-year low


Sector watch | Nifty PSU banks decline


Market check


Momentum picks by ICICI Securities


BUZZING STOCKS | Most IT stocks gain,S&P BSE Information Technology up over 1%


MARKET CHECK | Cipla slips nearly 3.50%


MARKET CHECK | Indiabulls Housing Finance down over 10%


SECTOR WATCH | Top gainers and losers on the NSE


Top gainers and losers on the S&P BSE Sensex


OPENING DEALS

At 09:20 am, the S&P BSE Sensex was trading 86 points or 0.22 per cent lower at 38,736.80, while the NSE's Nifty50 index was quoting 28 points or 0.24 per cent lower at 11,484.55 levels. 

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


Market at Pre-open


Market at Pre-open


Rupee Opening Alert

Rupee opens stronger at 70.42/$ vs Friday's close of Rs 70.56 per US dollar

India-dedicated funds pull out over $3 billion so far this year: EPFR data

India-dedicated funds saw outflows to the tune of $375 million in August, taking their year-to-date outflows to $3.2 billion, an EPFR data compiled by Kotak Institutional Equities shows. Global emerging market (GEM) funds saw outflows to the tune of $868 million, paring the 2019 inflows by these funds to about $181 million. READ MORE

Stocks to watch: Cipla, Bandhan Bank, LVB, IBHFL, DHFL, Reliance Nippon

Here's a look at the top stocks that may remain in focus today -
 
Peninsula Land: Brickwork has downgraded the rating for debentures of Peninsula Land, real estate unit of the Ashok Piramal Group, from “A” to “BBB-“. It also revised the outlook from “stable” to “negative”.
 
Reliance Anil Dhirubhai Ambani Group stocks may remain in focus today as the companies will hold their annual general meetings (AGMs) today in Mumbai starting 10 am. Anil Ambani will address the meetings of all the companies, except the bankrupt RCom which will be addressed by the resolution professional. READ MORE HERE

India is a highly promising macro-restructuring case: Christian Gattiker

It has been a choppy few sessions for the markets, which saw a runaway rally post the cut in corporation tax rates but later witnessed profit booking at higher levels.
 
Switzerland-based Christian Gattiker, chief strategist and global head of research Julius Baer, tells Puneet Wadhwa that he has a neutral view on the Indian equity market for now, given the rich valuation READ FULL INTERVIEW HERE
witzerland-based CHRISTIAN GATTIKER, chief strategist and global head of research Julius Baer

IRCTC IPO: A robust growth outlook, attractive valuations are key positives

Indian Railway Catering and Tourism Corporation’s (IRCTC’s) initial public offering (IPO) is a good bet for investors. The company, which is under the railway ministry, has a monopoly over e-ticketing, catering in trains and packaged drinking water at railway stations.
 
Reasonable valuation, a robust dividend track record, zero-debt status and a strong outlook for its three core services are the other triggers. READ MORE

NEWS ALERT | China's Manufacturing PMI came in at 49.8 in September: Reuters

-- China’s factory activity shrank for the fifth straight month in September

-- It was slightly higher than 49.5 in August

-- Services PMI came in at 53.7

Nifty outlook and stock pick by Angel Broking: Buy SBI Life, Sudarshan Chem

Market extends gains but momentum seems to have disappeared
 
On September 20, market took a giant leap after FM’s announcement on slashing corporation taxes. All of a sudden, the tide turned upwards and before anyone could realise, the Nifty was well above 11,200. Since it was predominantly a short squeezing move, markets were not done with such sharp one day spurt. Expectedly, we had a good bump up on Monday to kick start the week on a strong note. Participants were so ecstatic; the Nifty went on to almost kiss the 11,700 mark in the initial euphoric move. However, this seemed to be an overreaction and hence, throughout the remaining part of the week, market consolidated in a slender range to eventually conclude tad above 11,500. READ MORE

Top stock picks by CapitalVia: Buy Adani Green Energy, Torrent Pharma

Buy Torrent Power above Rs 295
 
Target: Rs 320
 
Stop loss: Rs 284
 
The stock is showing resistance breakout from the levels of 295 and meanwhile the stock is trading above its 50-day EMA and a breakout will result in good upside momentum. Considering this, we recommend buying the stock above Rs 295 for the target of Rs 320, keeping a stop loss at Rs 284 on closing basis. READ MORE

Market outlook and top two trading ideas by Prabhudas Lilladher

NIFTY VIEW
 
Nifty has been consolidating near 11,500 levels to maintain the bias and as of now only a breach above 11,700 levels would bring about further fresh upward movement whereas on the downside the level of around 11,350 would prove to be a crucial support zone which, if broken, can witness some further more downside slide. However, the support for the week is seen at 38,230/11,320 for Sensex and Nifty, respectively, while resistance is seen at 39,400/11,700. Bank Nifty would have a range of 29,260-30,470 levels. READ MORE

Bulk deals on BSE as on Friday

Bulk deals on NSE as on Friday

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


Rupee Check

Source: Bloomberg


Oil Check

At 8:09 am, Brent Crude Futures were at $61.22 per barrel mark

SGX Nifty

At 8:05 am, the Singaporean Exchange for Nifty Futures was trading 6 points lower at 11,578 mark.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


Good morning!

Welcome to the Business Standard live blog.

Catch all the live market updates here.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel