MARKET WRAP: Sensex tumbles 416 pts, Nifty below 12,300; RIL declines 3%

After scaling fresh record highs during the early morning deals on Monday, equity markets slumped nearly a per cent as investors booked profit and sold equities across the board. The benchmark S&P BSE Sensex declined 760 points from record high level of 42,273.87 to hit an intra-day low of 41,503.37. On the NSE, the Nifty50 slipped below the crucial 12,250 mark in the intra-day trade. The 50-share index hit a record high of 12,430.50-mark in the opening deals, before slipping to intra-day low of 12,220.70.

At close, the S&P BSE Sensex was down 416.46 points, or 0.99 per cent, to end at 41,528.91 level. Heavyweights like Reliance Industries, HDFC Bank, TCS, Axis Bank and SBI were the top contributors towards today's fall. At the index level, Power Grid (up 3.7 per cent), Bharti Airtel, and Asian Paints were the top gainers on the Sensex, while RIL (down 3.2 per cent), NTPC, and TCS were the top laggards. 

The Nifty50, on the other hand, ended at 12,224.55-mark, down 127.80 points or 1.03 per cent. All the key sectoral indices closed the day in the negative territory, barring Nifty Realty and FMCG indices. Nifty Bank settled 494 points, or 1.6 per cent, lower at 31,096.35-mark, followed by Nifty Private Bank index (down 1.67 per cent).

The broader markets, too, gave up their 9-days gaining streak on Monday and settled the day in the negative territory. The S&P BSE mid-cap index declined 0.57 per cent to close at 15,618.86, while the S&P BSE small-cap index settled 0.43 per cent lower at 14,645.05.

GLOBAL MARKETS

World stocks held near record highs on Monday as generally better data and earnings bolstered sentiment, while oil prices hit their highest in over a week after two large crude production bases in Libya began shutting down following a blockade.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan was flat having risen to its highest since June 2018. Japan’s Nikkei added 0.2 per cent to be near its highest in 15 months.

European equities opened a touch lower, with the pan-European STOXX 600 index slipping 0.3 per cent, after gaining nearly 1per cent on Friday. US stock futures, meanwhile, were down marginally. 

In the commodities market, Brent Crude Futures were at $65.11 per barrel-mark, up 0.4 per cent at 3:30 pm. WTI Crude, on the other hand, was at $59.07 per barrel, up 0.84 per cent.

(With inputs from Reuters)


4:15 PM IST After showing a sideways range movement in the last four sessions, the Nifty witnessed a sharp profit booking today, from the new all time high of 12,430 levels and closed the day on a sharp negative note.   A large negative candle was formed today after opening gap up, this pattern indicates a formation of bearish engulfing of the last five trading sessions high low range. This is negative pattern and one may expect today's swing high to be a crucial top reversal pattern. Follow-through weakness could confirm the reversal.   The short term trend of Nifty seems to have turned down, more weakness could be in store in the short term. The next lower levels to be watched at 12,100, which could be reached in the next few sessions.

3:44 PM IST

3:43 PM IST

3:41 PM IST >> At close, the S&P BSE Sensex was down 416.46 points, or 0.99 per cent, to end at 41,528.91 level. Heavyweights like Reliance Industries, HDFC Bank, TCS, Axis Bank and SBI were the top contributors towards today's fall.  >> The Nifty50, on the other hand, ended at 12,224.55-mark, down 127.80 points or 1.03 per cent.

3:24 PM IST The worst slump in car sales in two decades has not discouraged global carmakers from entering the Indian market. Two years after SAIC-owned MG Motors and Hyundai’s affiliate Kia Motors established a presence here and tasted reasonable success, a clutch of automakers from China such as Great Wall Motors, FAW Haima Automobile, and Changan Automobile are set to firm up their India strategy. READ MORE

3:11 PM IST >> Govt likely to change applicability of Dividend Distribution Tax

3:06 PM IST >> Govt might do away with capital gains tax on selling of property

3:04 PM IST

2:57 PM IST In its FIR filed last week after a detailed preliminary enquiry in the matter, the CBI booked Adani Enterprises Ltd, the then NCCF chairman Virender Singh, the then managing director G P Gupta and senior advisor SC Singhal under IPC sections related to alleged criminal conspiracy, cheating under Indian Penal Code and Provisions of Prevention of Corruption Act, officials said on Thursday. READ MORE

2:48 PM IST Commenting on the 2019 data, a senior official of the Directorate General of Civil Aviation said, "A bit disappointing. In 2019, we faced headwinds on account of Jet Airways but 2020 is going to be different and the double digit growth should be back sooner rather than later." READ MORE

2:39 PM IST “The upgrade in long-term rating of Fine Organic Industries favourably factors in the healthy improvement in scale of operations and cash accruals in FY2019 and H1 FY2020 which are expected to increase further driven by the ramp up in the capacity utilisation of the newly commissioned capacity at Ambernath (Mumbai) and the positive demand outlook for the company’s products in the domestic as well as export markets,” ICRA said in a rating rationale. READ MORE

LIVE UPDATES

Market Closing Comment :: Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sideways range movement in the last four sessions, the Nifty witnessed a sharp profit booking today, from the new all time high of 12,430 levels and closed the day on a sharp negative note.
 
A large negative candle was formed today after opening gap up, this pattern indicates a formation of bearish engulfing of the last five trading sessions high low range. This is negative pattern and one may expect today's swing high to be a crucial top reversal pattern. Follow-through weakness could confirm the reversal.
 
The short term trend of Nifty seems to have turned down, more weakness could be in store in the short term. The next lower levels to be watched at 12,100, which could be reached in the next few sessions.

Nifty snapshot at close


Sensex heatmap at close


Closing Bell

>> At close, the S&P BSE Sensex was down 416.46 points, or 0.99 per cent, to end at 41,528.91 level. Heavyweights like Reliance Industries, HDFC Bank, TCS, Axis Bank and SBI were the top contributors towards today's fall. 

>> The Nifty50, on the other hand, ended at 12,224.55-mark, down 127.80 points or 1.03 per cent.

Global carmakers set to firm up India strategy amid auto sales slump

The worst slump in car sales in two decades has not discouraged global carmakers from entering the Indian market. Two years after SAIC-owned MG Motors and Hyundai’s affiliate Kia Motors established a presence here and tasted reasonable success, a clutch of automakers from China such as Great Wall Motors, FAW Haima Automobile, and Changan Automobile are set to firm up their India strategy. READ MORE

NEWS ALERT | Govt likely to extend timeline of LTCG from 12 months to 24 months: sources to CNBC TV18

>> Govt likely to change applicability of Dividend Distribution Tax

NEWS ALERT | Govt considering rationalisation of key equity taxes under Budget 2020: sources to CNBC TV18

>> Govt might do away with capital gains tax on selling of property



Market check


Adani Enterprises denies wrongdoing in coal supply contracts case

In its FIR filed last week after a detailed preliminary enquiry in the matter, the CBI booked Adani Enterprises Ltd, the then NCCF chairman Virender Singh, the then managing director G P Gupta and senior advisor SC Singhal under IPC sections related to alleged criminal conspiracy, cheating under Indian Penal Code and Provisions of Prevention of Corruption Act, officials said on Thursday. READ MORE

Domestic air passenger traffic grows to 144 mn at 3.74% in 2019: DGCA

Commenting on the 2019 data, a senior official of the Directorate General of Civil Aviation said, "A bit disappointing. In 2019, we faced headwinds on account of Jet Airways but 2020 is going to be different and the double digit growth should be back sooner rather than later." READ MORE

Fine Organic soars 6%, hits new high after ICRA upgrades credit rating

“The upgrade in long-term rating of Fine Organic Industries favourably factors in the healthy improvement in scale of operations and cash accruals in FY2019 and H1 FY2020 which are expected to increase further driven by the ramp up in the capacity utilisation of the newly commissioned capacity at Ambernath (Mumbai) and the positive demand outlook for the company’s products in the domestic as well as export markets,” ICRA said in a rating rationale. READ MORE

Stocks that hit 52-week high on BSE today

COMPANY PRICE(rs) 52 WK HIGH CHG(rs) CHG(%)
ADANI ENTERP. 227.25 232.00 -1.10 -0.48
AJANTA PHARMA 1192.00 1197.95 58.25 5.14
APOLLO HOSPITALS 1640.25 1658.50 21.10 1.30
ASIAN PAINTS 1855.95 1861.95 24.75 1.35
ATUL 4365.95 4444.00 18.90 0.43
» More on 52 Week High

NEWS ALERT | Federal Bank slips 1.7% post Q3 result

>> Net profit up 32.1% YoY at Rs 440.6 crore; 

>> NII comes up 7.2% YoY at Rs 1,154.9 crore

Earnings Alert | Bank of Maharashtra Q3 results

>> Net profit at Rs 135.3 crore

>> NII at Rs 1,186 crore, up 36% YoY

>> Gross NPA at Rs 15,745 cr, up 2.2% QoQ

>> Net NPA at Rs 4,506.8, up 2.3% QoQ


MARKET CHECK | Asian Paints hits 52-week high


BROKERAGE RADAR | Centrum Broking on Karnataka Bank

RECO: BUY

TARGET PRICE: Rs 117


Karnataka bank (KBL) Q3FY20 results were in-line on the loan growth and NII front though higher trading gains at Rs1.8 bn provided some cushion to the PPoP (at Rs 5.02 bn was a beat) and asset quality blip. Slippages spiked to Rs 6.37bn driven by four large accounts marring asset quality. Due to the Bank’s focus on retail / SME its share has risen to 47% which provided some comfort to NIM despite higher slippages. Over FY19-22E we see NIM to expand by 20bps to 3.0% while provision costs to decline by 29bps over FY20-22E to 104bps. Hence RoA/RoE might scale up to 0.8%/11.3% by FY22E (vs 0.6% / 8.0% in FY20E). We raise our TP to Rs117 though maintain our multiple at 0.7x as we roll forward to FY22ABV. 

Three telcos to seek urgent SC hearing as deadline to pay dues nears

Bharti Airtel, Vodafone Idea Ltd and the Tata group will request the court to hear their petition urgently by Tuesday as the deadline for them to pay Rs 147,000 crore as Adjusted Gross Revenue (AGR) ends on January 24. READ MORE  


Polycab India hits new high ahead of Q3 results, rallies 58% in 3 months

In the last three months, the stock of the fast-moving electric goods (FMEG) company has rallied 58 per cent after its net profit more-than-doubled to Rs 194 crore in the September quarter (Q2FY20) on the back of strong revenue growth. It had logged a profit of Rs 90 crore in the year-ago quarter. In comparison, the S&P BSE Sensex was up 6.5 per cent during the same period. READ MORE

Market check


Govt likely to abolish dividend distribution tax in upcoming Budget

The government is likely to abolish dividend distribution tax (DDT) in the upcoming Budget and may instead tax the shareholders receiving dividends, in a bid to help improve investor sentiment by addressing the multiplicity of taxes and bring down the effective tax rates for companies. The move will need changes in Section 115 (O) of the Income-tax Act. READ MORE

Market check


India's GDP growth premium over EMs to hit 7-year low of 1.1%: IMF

The relative attractiveness of India’s growth story is fast fading as the pace of economic slowdown in India exceeds the rest of the world (RoW). According to the latest data from the International Monetary Fund, India’s growth premium over the emerging economies (EMs) will hit a seven-year low in 2019-20 (FY20) and an 18-year low against the developed economy, including the US. READ MORE

Reliance Industries declines 2% as investors book profit post Q3 results

The stock has fallen 4 per cent from its early morning high of Rs 1,610 on profit-booking. During the past four months, RIL has outperformed the market by surging 32 per cent, as compared to a 15 per cent rise in the S&P BSE Sensex till Friday. It touched an all-time high of Rs 1,618 on December 20, 2019. READ MORE

BROKERAGE RADAR | ICICI Securities on TCS

Weaker-than-expected execution on the revenue front in 9MFY20 and subdued outlook for banking financial services and retail (its two largest verticals) in the near term leads us to maintain our stance on the company. Further, continued investments and pricing pressure could play spoilsport for margins. This, coupled with fully priced valuations prompt us to maintain our HOLD recommendation on the stock. We value the stock at 20x FY22E EPS with a revised target price of Rs 2,120.

BROKERAGE RADAR | HDFC Securities on Cyient

Reco: NEUTRAL
 
Target Price: Rs 490
 
We maintain NEUTRAL on Cyient post weak 3Q. Services revenue was below estimate while margin performance was inline. Some margin improvement is expected in FY21E but growth in core verticals remains challenged. We have increased EPS est. by 1.0/0.8% for FY21/22E and our TP of Rs 490 is based on 11x Dec-21E EPS.

NEWS ALERT | Cholamandalam Invt & Fin Co to consider fund raising by way of preferential issue: BSE filing

>> Board meeting for the same to be held on Jan 23

Prestige Estates up 10% as arm acquires 50% stake in Lokhandwala DB Realty

Shares of Prestige Estates Projects moved higher by 10 per cent to Rs 413 on the BSE on Monday, in an otherwise weak market, after the company's wholly owned subsidiary acquired 50 per cent stake in Lokhandwala DB Realty LLP. The stock of the Bengaluru-based real estate developer was trading at its all-time high level. READ MORE

Budget 2020 | RITES, Titagarh: How to trade rail-related stocks

Thus far in the financial year 2019-20 (FY20), shares of rail-related stocks have given mixed performance at the bourses. RITES, for instance, has outperformed the market by surging around 54 per cent as compared to over 6 per cent rise in the benchmark Nifty50 index. READ MORE

NEWS ALERT | I-T Dept raids 8 properties of Bharat Hotel MD Jyotsna Suri: sources to CNBC TV18

>> I-T Dept raids Bharat Hotel (Lalit Suri Group) MD, Jyotsna Suri & Her Associates 

>> Lalit Suri Group owns hotels like The Lalit in New Delhi

>> Dept suspects case of big tax evasion

>> Along with Suri, her associate Jayant Nanda is also being raided 

Alert: I-T Dept stands for Income Tax Dept 

NEWS ALERT | Ceat promoter reduces stake to 46.68% from 50.52% (September): BSE filing

Click here for latest shareholding pattern


Sector watch | Nifty Realty Index holding up in a weak market


Piramal Enterprises' Rs 3,650-cr rights issue subscribed 8% ahead of close

According to the data provided by the BSE, the rights issue — where existing shareholders are entitled to buy more shares in a company typically at a discount to the prevailing market price — has garnered bids for 2.22 million shares, just 8 per cent of the total issue size of nearly 28 million shares. The issue closes on Tuesday. To be sure, bulk of the subscription for rights issue takes place closer to the end date. READ MORE

HDFC Bank slips over 1% as Q3 provisions rise; analysts maintain 'Buy'

The bank's provisions, including those for bad loans and contingencies, grew a whopping 37.6 per cent to Rs 3,043.6 crore in Q3FY20, from Rs 2,211.5 crore reported in the year ago quarter. The increase in specific loan loss provisions jumped by 66.2 per cent to Rs 2,883.6 crore in the quarter from Rs 1,734.6 crore the previous year. READ MORE

Lupin falls 3% as USFDA issues 5 observations for Vizag facility

“The United States Food and Drug Administration (USFDA) carried out the inspection of the company’s Vizag API manufacturing facility between January 13, 2020 and January 17, 2020. The inspection for the API facility at Vizag closed with five 483 observations,” Lupin said in an exchange filing on Saturday. READ MORE  


NEWS ALERT

Market check | Sensex extends decline


HCL Tech falls 5% from day's high on profit booking post Q3 results

In the past one month, HCL Technologies has outperformed the market by gaining 8 per cent, as compared to 1 per cent rise in the S&P BSE Sensex. READ MORE  

Market check


Don't put your money in last year's winners while investing in debt funds

Investing in the past year’s winner is a loser’s strategy in any category of mutual funds, but it can be especially harmful in debt funds. Long-duration funds were the best-performing category on the debt side over the past year with an average return of 12.13 per cent. However, if you are thinking of investing in this category to partake of those returns, perish the thought. READ MORE

Market check


Market check | Indices erase gains


GNA Axles plunges 11% post Q3 nos

>> Revenue slips 13% in Q3, while EBIT down 39%


Prestige Estates gains over 1% after acquiring stake in Lokhandwala DB Realty LLP


Fine Organic Industries gains over 3% after ICRA upgrades rating

>> Upgrades Long-term rating from A+ (positive) to AA- (stable)

>> Retains Short-term rating at A1+


JSPL slips in the red post Q3 nos


Page Industries hits 52-week high; surpasses Rs 26K-mark


NMDC surges 6%


Result impact | HCL Tech gains 1%

>> IT major HCL Technologies on Friday posted a 13 per cent rise in its consolidated net profit at Rs 2,944 crore for the December 2019 quarter. The management raised FY20 revenue guidance in CC terms to 16.5 - 17 per cent (from 15-17 per cent).


HDFC Bank trades flat after logging gains in early deals


Reliance Industries off opening highs


Sectoral trends at NSE during Opening trade


Market at Open | Nifty hits record high of 12,430.50


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


Market at Open | Sensex hits record high of 42,273.87


NEWS ALERT | Cipla gets EIR from US FDA for Patalganga manufacturing facility: BSE Filing

>> Alert: EIR received after inspection from November 4-13, 2019.

             :Establishment Inspection Report indicates closure of the inspection

NEWS ALERT | Biocon arm's oral solid dosage mfg unit in Bengaluru gets zero observations by US FDA: BSE Filing

>> US FDA conducted a Pre-Approval Inspection (PAI) of the Oral Solid Dosage Manufacturing Facility of Biocon Pharma Ltd, a subsidiary of Biocon Ltd, which was triggered by the submission of an Abbreviated New Drug Application (ANDA).
 
>> The inspection of the Bengaluru facility, which took place between January 13 and January 17, 2020, concluded with zero observations and no Form 483 was issued.

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 flat at 71.09, as against Friday's close of Rs 71.08/$

NEWS ALERT | Strides Pharma receives EIR from US FDA for its Florida unit: BSE filing

Alert: EIR issued as an outcome of inspection in December 2019

         EIR is Establishment Inspection Report

Investment in equity MFs dips 41% to Rs 75,000 cr on volatility, slowdown

"While volatility in the market may continue for some more time going forward, we believe investors will want to benefit from this volatility and use it to create and growth their wealth. As we expect industry inflows to rise, we believe that all categories of mutual funds including equity funds to see a steady rise in flows," said Ashwani Bhatia, MD and CEO at SBI Mutual Fund. READ MORE

Stocks to watch: TCS, RIL, HDFC Bank, HCL Tech, JSPL, Piramal Enterprises

Here's a look at the top stocks that may trade actively in today's trading session -
 
 
Earnings today: A total of 26 companies, including Just Dial, KEI Industries, and ICICI Securities, are scheduled to announce their quarterly earnings later in the day.
 
Piramal Enterprises: Ajay Piramal-led Piramal Enterprises’ Rs 3,650-crore rights issue will have to do all the heavy lifting in the final two days, with the offering subscribed less than 10 per cent until Friday. READ MORE

Indian Hotels to VIP: 10 small and midcaps that may perform well in 2020

After underperforming the benchmark indices for the last two years, the Nifty Midcap hit a seven-month high last week. The Nifty Smallcap index, too, has recovered, gaining over 10 per cent over the past month after ending CY2019 in the red. READ MORE

Nifty view & two stocks that Sameet Chavan of Angel Broking is bullish on

Alembic Pharma
 
View – Bullish
 
Last Close – Rs. 601.65
 
Justification – The Pharma space has finally joined the bull’s party as we can see this index confirming a bullish reversal ‘Inverse Head N Shoulder’ breakout along with prices crossing above 200SMA with some authority. This stock, too, has broken above its hurdle of 590 levels which thrice acted as stiff resistance in the last few months confirming a Cup N Handle bullish breakout. In addition, in the last few sessions, the up move has been supported by a sizeable increase in volume, indicating strong buying interest at multi-month highs. Thus, we recommend buying this stock on a minor decline for a target of Rs.690 over the next days. The stop loss should be fixed at Rs.551. READ MORE

Stock ideas from Prabhudas Lilladher: Buy Bharat Electronics, Castrol

NIFTY VIEW
 
Nifty once again faced resistance near the 12,390 level, indicating a tough barrier, and, as said earlier, has to decisively give a breakout to have further fresh upward move. BankNifty has been under-performing and witnessing a gradual slide which should halt near 31,000 levels where a crucial support exists. However, the support for the week is seen at 41,250/12,120 while resistance is seen at 42,550/12,550. Bank Nifty would have a range of 30,880-32,200 levels. Mid-caps continue with their strong up-trend and is anticipated to do so till the budget time. 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

>> Oil prices jumped on Monday after two large crude production bases in Libya began shutting down amid a military blockade, reported Reuters.

>> At 8:29 am, Brent Crude Futures were at $65.56 per barrel-mark, up 1.09 per cent. WTI Crude, meanwhile, was at $59.14 per barrel, up 0.96 per cent.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


TRADE SET UP | SGX Nifty trades higher


Good morning

Welcome to Business Standard live market blog

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