MARKET WRAP: Sensex up 1,075 pts, reclaims 39K-mark; Nifty ends at 11,603

Photo: Shutterstock.com
The breathtaking rally in markets continued on Monday with the benchmark indices ending nearly 3 per cent higher, thus logging their best ever two-day gains. Equities have been on fire since Friday after Finance Minister Nirmala Sitharaman announced reduction in effective corporation tax rates to 25 per cent from 35 per cent, earlier.

The benchmark S&P BSE Sensex rallied 1,075 points or 2.83 per cent to settle at 39,090.03, with Bajaj Finance (up nearly 9 per cent) being the biggest gainer and Infosys (down 5 per cent) the worst performer. HDFC duos, ICICI Bank, L&T, ITC and Axis Bank contributed the most to the index's gains. 

On NSE, the Nifty50 index ended at 11,603.40, up 329 points or 2.92 per cent. The Nifty Bank index gained 1,566.90 points or 5.41 per cent to end at 30,548.45 levels. 

Volatility index India VIX zoomed nearly 11 per cent to 17.05 levels. 

Both the frontline indices -- Sensex and Nifty -- have surged 8 per cent in two trading sessions. 

Sectorally, IT and pharma counters bled in an otherwise strong market. The Nifty IT index dropped 2.88 per cent to 15,044.70 levels. Similarly, the Nifty Pharma index lost over 2 per cent to settle at 7,810.65 levels.

In the broader market, the S&P BSE MidCap index gained 434 points or 3 per cent to close at 14,554.46 and the S&P BSE SmallCap index added 361 points or 2.73 per cent to end at 13,565. 

GLOBAL MARKETS

Most Asian share markets slipped on Monday as investors waited for more clarity on Sino-US trade talks, while oil gained more than 1 per cent as Middle East tensions remained elevated. Chinese shares were in the red, with Shanghai’s SSE Composite stumbling 1.5% while the blue-chip index was down 1.65 per cent. Hong Kong’s Hang Seng index was 0.8 per cent weaker while South Korea’s KOSPI ended flat. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2 per cent at 510.04 points.

In Europe, pan-region Euro Stoxx 50 futures easing 0.3 per cent in early European trade and Germany’s DAX futures off 0.2 per cent. London’s FTSE futures were, however, a tad higher. E-mini futures for US S&P 500 and the Dow climbed nearly 0.4 per cent each.

(With inputs from Reuters)


3:54 PM IST Markets for the second day in a row, after the historic decision to cut corporate tax, witnessed a stellar rally. Lot of buoyancy has come from the fact that these measures will boost the profitability of a number of companies, which will either be used to stimulate demand by lowering prices, payouts to shareholders in the form of dividends or using it for capital expenditure. Along with short covering, a lot of pent up demand to buy good businesses was also visible. Market is also sensing a meaningful rate cut from the RBI in its bimonthly monetary policy due in the first week of October

3:48 PM IST

3:46 PM IST Contribute most to Sensex's gain

3:43 PM IST (Image source: NSE)

3:42 PM IST

3:41 PM IST

3:40 PM IST The S&P BSE Sensex jumped 1,075 points or 2.83 per cent to end at 39,090.03 while NSE's Nifty50 index ended at 11,603, up 329 points or 2.92 per cent. 

3:23 PM IST In the past three days, the stock of Essel Group Company has plunged 19 per cent on reports that promoter Subhash Chandra was asked by a court to not sell his unpledged stake in the company till next month. READ MORE  

3:04 PM IST

3:03 PM IST --  PMO is looking for investment by foreign companies in PSUs under current norms -- PMO expresses reservations on sale of PSUs to other PSUs -- PMO wants BPCL, Concor, Air India's stake sale to be completed in FY20

3:00 PM IST -- Poor growth, demand slowdown, coporate tax cut some of the reasons for shortfall

LIVE UPDATES

MARKET COMMENT :: Devang Mehta, Head – Equity Advisory, Centrum Wealth Management

Markets for the second day in a row, after the historic decision to cut corporate tax, witnessed a stellar rally. Lot of buoyancy has come from the fact that these measures will boost the profitability of a number of companies, which will either be used to stimulate demand by lowering prices, payouts to shareholders in the form of dividends or using it for capital expenditure. Along with short covering, a lot of pent up demand to buy good businesses was also visible. Market is also sensing a meaningful rate cut from the RBI in its bimonthly monetary policy due in the first week of October

Nifty Pharma index slips nearly 2.2%


Financials among top gainers today

Contribute most to Sensex's gain





Oracle Financial, Infosys, TCS, Wipro among top IT losers

(Image source: NSE)



Pharma, IT stocks slip


Sensex heat map


CLOSING BELL

The S&P BSE Sensex jumped 1,075 points or 2.83 per cent to end at 39,090.03 while NSE's Nifty50 index ended at 11,603, up 329 points or 2.92 per cent. 

Zee Entertainment slips for sixth straight day, loses 10% to hit a 5-yr low

In the past three days, the stock of Essel Group Company has plunged 19 per cent on reports that promoter Subhash Chandra was asked by a court to not sell his unpledged stake in the company till next month. READ MORE  

BUZZING STOCK | Bajaj Finance gains nearly 9%


NEWS ALERT | Govt is aiming for Rs 50,000-60,000 cr revenue via privatisation in FY20: sources to Reuters

--  PMO is looking for investment by foreign companies in PSUs under current norms

-- PMO expresses reservations on sale of PSUs to other PSUs

-- PMO wants BPCL, Concor, Air India's stake sale to be completed in FY20

NEWS ALERT | Govt expects close to Rs 1.2 trillion direct tax collection shortfall: sources to CNBC TV18

-- Poor growth, demand slowdown, coporate tax cut some of the reasons for shortfall

NEWS ALERT | New Direct Tax report recommends major overhaul in income tax: sources to CNBC TV18

-- New Direct Tax Report recommends introducing 35% tax for income of Rs 2 cr and above
 
-- Recommends continuing exemptions under 80c with certain changes in types of concessions
 
-- Recommends dropping surcharge and cess
 
-- Recommends removing tax rebate on principal payment of home loan 
 
-- Increase in threshold of Rs 2.5 lakh income not suggested
 

NEWS ALERT | New Direct Tax report recommends major overhaul in income tax: sources to CNBC TV18

-- Income slab of Rs 5-20 lakh imp to revive consumption demand
 
-- Propose 10% tax rate (vs 20% rate) for Rs 5-10 lakh slab
 
-- Propose 20% tax rate (vs 30% rate) for Rs 10-20 lakh slab
 
-- Propose 30% tax rate for income of Rs 20 lakh and above

Alert: FM says Govt hasnt yet thought of rate rationalisation

Buzzing | Sagar Cements locked in 20% upper circuit band


NEWS ALERT | A lender has sold part of pledged shares of Zee Ent in open market: sources to CNBC TV18

-- Not clear if more shares could be sold
 
Alert: Lenders have received 50% dues from Zee

How're corporation tax cuts going to be financed? Is this helicopter money?

Slashing the government’s take from corporate profits to 25.2 per cent from 34.9 per cent has given a boost to stock-market sentiment, while simultaneously seeding fresh doubts about fiscal profligacy in the bond market. READ MORE  

Nirmala Sitharaman | Photo: ANI (Twitter)

MARKET CHECK | Stocks that hit 52-week low today

ADITYA ISPAT 3.27 3.27 3.27 20-SEP-2019 202
ADLABS ENTERT. 3.10 3.10 3.15 20-SEP-2019 14482
ADROIT INFO. 8.55 8.55 8.55 19-SEP-2019 50
ADVIK LABS. 0.85 0.85 0.88 16-AUG-2019 50
ALKA INDIA 0.19 0.19 0.19 18-SEP-2019 1
ALKA SECURITIES 0.19 0.19 0.19 16-SEP-2019 2000

(Click to view full list)

COMMENT :: HSBC on corporate tax rate cut impact

We believe the central government fiscal deficit could be around 3.7% of GDP in FY20, higher than the budgeted estimate of 3.3%, and our previous assumption of 3.5%. And, because India's states tend to get about a third of these taxes, their finances could also come under some pressure.
 
We are raising our estimate of FY20 GDP growth from 5.7% y-o-y to 5.9% on the back of improved sentiment that could enhance growth. We are also raising our FY21 GDP growth estimate from 6.4% to 6.5% y-o-y, as corporate tax cuts pave the way for a slight improvement in the investment outlook


COMMENT :: Suyash Choudhary, Head – Fixed Income, IDFC AMC

With the prospects of monetary easing somewhat diminishing in incremental intensity, and accounting for the somewhat higher bond supply, we may expect some amount of curve steepening going forward. This may likely happen as market participants anchor themselves to three thoughts: One, liquidity will remain abundantly surplus. Two, repo rate is here or modestly lower. Three, prospects of a very large bond rally are somewhat diminished (although this view will evolve going forward depending also on how much net additional supply actually manifests for local absorption) . This will likely increase appeal for the front end of the curve versus the longer duration, hence creating steepening pressure. 
 
Reflecting the above thought, we have cut our recent duration elongation into the 10 – 14 year segment and are now refocussing on being overweight 5 – 7 year for government bonds in our active duration funds. For AAA corporate bonds, the relative value continues in up to 5 years. These segments could better align to what remains an environment of abundant surplus liquidity, a very attractive term spread, still general lack of credit growth, and continued global monetary easing.
 

News you can use :: Franklin Templeton announces dividend in Templeton India Equity Income Fund

Franklin Templeton (India) has announced dividend in Templeton India Equity Income Fund (TIEIF) as given below. All investors registered in the Dividend Plan as on September 27, 2019 shall be entitled to receive this dividend



IT shares trade weak in a strong market; TCS, Infosys down over 3%

Infosys tanked 8 per cent to Rs 742 on the National Stock Exchange (NSE) in early morning deal, logging the biggest single-day fall in two years. Currently, the stock was trading 4 per cent lower at Rs 773. Meanwhile, Tata Consultancy Services (TCS) was down 3 per cent at Rs 2,000, after hitting a low of Rs 1,975 in the intra-day trade so far. HCL Technologies, Wipro and Tech Mahindra, on the other hand, from the Nifty IT index were down in the range of 1 to 3 per cent. READ MORE  


Why Petronet LNG slipped over 7% after hitting 52-week high in early trade

After hitting a 52-week high of Rs 302 apiece on the BSE, shares of Petronet LNG slipped over 7 per cent in the intra-day deals on Monday. The company on Sunday announced it will invest $2.5 billion for nearly 20 per cent equity stake in US energy major Tellurian Inc's Driftwood project to negotiate the purchase of 5 million tonnes of gas per annum. READ MORE  


NEWS ALERT | New tariff Policy proposes phasing out of cross-subsidy, says Power Min

-- New Tariff Policy recommends Direct Subsidy Transfer

(As reported by CNBC TV18)
 
              

Market check | Sensex trims gains


Stocks that contributed most to Sensex's gains today

(Image source: BSE)



STOCK ALERT :: Infosys dips nearly 8%; sees biggest ever single-day fall in 2 years


NEWS ALERT | Essel Group chairman Subhash Chandra reaches Fin Min to meet officials: CNBC TV18


MARKET ALERT | Nifty up nearly 1,000 pts in two sessions; sees biggest ever 2-day gain

-- Sensex adds 3,300 points in two sessions

-- Nifty Bank jumps more than 4,000 pts in two sessions

-- Nifty Midcap index up nearly 1,500 points in 2 days

NEWS ALERT | US FDA issues 1 observation for Alembic Pharma's JV Aleor Derma's Gujarat unit: BSE Filing

-- US FDA had inspected the unit from September 16-20


Market check | Sensex extends rally


NEWS ALERT | Promoters of Apollo Hospitals release pledge on 79.4 lakh (5.7% equity) shares: CNBC TV18


Phillip Capital on HUL

In our view, HUL has all the right ingredients – (1) management focus on premiumization, (2) strengthening core categories, (3) focus on improving distribution productivity using digital means, and (4) foray into under-penetrated fast-growing categories to sustain mid to high-single-digit volume growth in the medium term. The GSK Consumer acquisition is a step in the right direction.

We have increased our EPS estimates for FY20-22e by 4-6% to account for 1) recent tax changes and 2) better competitive positioning vs peers who are paying lower taxes in key competing categories and maintain our high-conviction BUY with a target of Rs 2,330 (50x FY22 EPS)

COMMENT :: Motilal Oswal Securities on corporate rate cut impact

The measures announced are substantive and have the potential to kick-start the moribund investment cycle over a period of time. As our economist has been highlighting in his multiple reports since 2016, the declining savings rate has hurt investments, and therefore, a probable rise in the corporate savings rate after the latest announcement augurs well for private capex cycle.

The sentiment boost provided by these measures, coupled with the transmission of the 110bps of rate cuts already done by the RBI, can also at the margin provide a push to consumption in the midst of an all-important festive season. The significant recovery in monsoon should also aid rural consumption, albeit with a lag.

COMMENT :: Nomura on corporate tax rate cut

The government policy thus far (including the NDA government of 2014-2019) focussed on infrastructure buildout and the implementation of schemes/projects targeting the less affluent and rural India. The infrastructure build-out was largely driven by the government with little participation from the private sector. The slower pace of economic growth and lack of incentives from the government failed to kick start the private investment cycle.

There was limited progress in the “Make in India” objective. The corporate sector, particularly manufacturing, felt alienated. In this backdrop, we believe the corporate tax cut is a clear change of stance as the government intends to enhance the participation of corporates in the broader economic growth. This was also necessitated by the government’s limitation on the financial and administrative front, in our view.

NEWS ALERT | YES BANK clarifies regarding reports w.r.t bank approaching fund houses for additional capital

-- Says the report is factually incorrect

-- The very fact that YES Bank has raised capital to the tune of Rs. 1930 crores clearly indicates that the bank has support from marquee institutional investors, including domestic fund houses. 

-- Since the last capital raise, the Bank has had no discussions with any domestic mutual fund houses to raise the additional capital

Via BSE filing

MARKET OUTLOOK :: Morgan Stanley

We think that the corporate tax cuts create room for improved earnings growth. We raise our earnings growth estimates for the BSE Sensex to 25% in F2020 and 23% in F2021 and raise our BSE Sensex target to 45,000 by Jun-20.

The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in New York, New York January 20, 2015. REUTERS

MARKET COMMENT :: Prabhudas Lilladher on IT sector

We continue to remain Cautious on IT sector as we believe that growth in Tech spends in BFS clients in US & European geography will be muted as compared to last year due to trade war concerns, uncertainty on central bank policy & interest rates, Brexit related uncertainty & Rupee advantage will also weaken now. The new taxation rule will be neutral event for Indian IT companies the consolidate level, tax rates will be lower than 25% as US and UK rates are at 21% and 18% respectively. We prefer HCLT among our IT services pack on GARP (growth at a reasonable price)

MARKET OUTLOOK :: Antique Stock Broking

Overall, we remain cautiously constructive on the market. After factoring in a lower corporate tax rate of 25.2% (earlier effective tax rate of ~35%), our
FY20/21 Nifty EPS estimate is upgraded by around 6.5% (Revised EPS stands at 607/727 for FY20/21). Accordingly, our year end Nifty target is revised upwards
to 13,100 (Earlier Nifty target of 12,300) based on 1 year forward multiple of 18x.

COMMENT :: Kotak Securities on corporation tax cut

In a major positive move, the government cut corporate tax rate to 22% from 30% (before surcharges). We see this as a huge boost to private sector investment, particularly domestic manufacturing. Automobiles, banks, consumer staples and global commodity sectors will see large earnings upgrades while electric utilities, IT and pharmaceutical sectors will see little or no earnings changes. Our FY2020E EPS for the Nifty-50 Index will increase by 10% from previous estimates.

Consumer stocks extend rally on tax cut; HUL, Asian Paints hit new high

Shares of consumer companies extended their gains logged on Friday, and jumped up to 11 per cent on the BSE on Monday, on expectation of an improved consumer demand after the government announced sharp cuts in corporate tax rates.

Hindustan Unilever (HUL), Nestle India, Asian Paints, Avenue Supermarts (D-Mart), Bata India, Berger Paints, Titan Company, Voltas and Colgate-Palmolive India were among the notable stocks that hit their respective fresh all-time highs on the BSE today. READ MORE

Market check


NEWS ALERT | Cadila gets EIR for its API manufacturing facility at Ankleshwar (Unit 1) from the US FDA: BSE filing

-- Company's API manufacturing facility located at Ankleshwar (Unit 1), Gujarat has received an Establishment Inspection Report (EIR).

-- The USFDA had conducted an inspection at the facility from 22nd to 26th July 2019.

-- The EIR report stated that the classification of the facility is 'No Action Indicated (NAI)'


Market check


Repo rate to be external benchmark for floating rate loans from Oct 1: SBI

On September 4, the Reserve Bank of India (RBI) had mandated all banks to link all new floating rate personal or retail loans and floating rate loans to micro, small and medium enterprises (MSMEs) to an external benchmark from October 1 onwards. We have decided to adopt repo rate as the external benchmark for all floating rate loans for MSME, housing and retail loans effective October 1, 2019, the bank said in a release. READ MORE 


MARKET CHECK | Pharma stocks slip over 1%


Sensex zooms over 3,000 points in two days. Is it time to book profit?

S&P BSE SENSEX: The index has gained over 3,000 points in the past two sessions. The rally comes on the back of a sharp cut in corporation tax announced by the government during market hours on Friday. On the techncial charts,the trend line breakout with huge volumes suggests a strong upward momentum for the index. The index had witnessed 10 per cent correction from June, 2019 and an upside of over 5 per cent in the past two sessions has strengthened the positive view. The level of 39,750 stays as an immediate resistance with support coming at 38,100 and 37,800. READ MORE

NEWS ALERT | Should have cut income tax rather than corporate tax: Viktor Shvets of Macquarie to CNBC TV18

-- Evidence shows corporate tax cut doesn't help to boost economy

-- Variables like regulatory clarity, corruption more imp than tax cut

Britannia gains in trade as analysts expect corporate tax cut to boost FMCG firms


NEWS ALERT | UK MHRA concludes inspection at Indoco Remedies' Goa unit: BSE Filing

-- Two observations issued

Alert: Inspection was done between Sep 16-20


NEWS ALERT | BlackRock sells 0.35% equity in Escorts: CNBC TV18

-- Stake reduced to 2.84% vs 3.20% earlier
 

India VIX up 8%


Market check


Market check


Buzzing | HUL trades at record high


Reliance Capital dips 9%, hits over 20-year low on ratings downgrade

The stock was trading at its lowest level since March 19, 1999. It touched an all-time low of Rs 14.28 on August 17, 1990.
 
“The coupon was subsequently serviced with a delay of one working day. The liquidity profile of the group continues to be under stress on account of delay in raising funds from the asset monetisation plan and impending debt payments,” Care Ratings said in its rating rational. READ MORE HERE

Tata Motors dips 4%


Nifty PSU Bank index slips in trade


Edelweiss Securities on Apar Industries

We remain positive on Apar Industries as it is well placed to capitalise on the uptick in transmission and distribution (T&D) with improved product mix leading to a strong 36% PAT CAGR over FY19–21E. We maintain ‘BUY’ with TP of Rs 698 (11x Q3FY21E EPS). At CMP, the stock trades at 10.5x FY20E/8.7x FY21E EPS.

NEWS ALERT | IndusInd bank cuts lending rate by 10 bps across tenors: CNBC TV18


Momentum picks by ICICI Securities


NEWS ALERT | The effect of increase in GST rates for caffeinated drinks is expected to be minimal; Varun Bev via BSE filing

-- This is so because the incremental volumes that will come under the higher GST bracket was approximately 0.7 million cases out of 340 million cases of sales volume based upon CY 2018. The corresponding volume of HI of CY2019 is 0.6 million cases out of 285.8 million cases.
 
 

Hotel stocks up on GST rate cut; Royal Orchid, Lemon Tree soar up to 16%

Shares of hotel companies rallied up to 16 per cent on the BSE in the early morning deals on Monday after the Goods and Services Tax (GST) Council approved proposal to cut tax rates on hotel tariffs.
 
Among the individual stocks, Indian Hotels rallied 10 per cent to Rs 163, while ITC surged 9 per cent to Rs 260 in the intra-day trade. Furthermore, Royal Orchid Hotels and Lemon Tree Hotels, too, soared 16 per cent and 13 per cent, respectively on the BSE. READ MORE

Tax rate cut: Brokerages rejig index targets; Chris Wood ups India exposure

Christopher Wood, global head of equity strategy at Jefferies has hiked his exposure to Indian equities by 3 percentage points (ppt) following the government’s announcement to slash corporation tax to an effective 25.2 per cent from the earlier 35 per cent.
 
The move, Wood wrote in GREED & fear – his note to investors, came as a total surprise and shows the benefits of one political party dominating the legislature. It also highlights the Modi government finally responding in earnest to the extreme slowdown in growth in recent months. READ MORE

NEWS ALERT | SBI announces repo rate as external benchmark for all floating rate loans

Arvind trades 0.9% higher


Jet Airways trades mildly higher


Axis Bank gains 3%

-- The private sector lender has raised Rs 12,500 crore through its qualified institutional placement (QIP) from large foreign and local investors, news reports said.

Coffee Day Ent falls 5%

-- The GST panel has approved proposal to hike rates on caffeinated drinks from 18 per cent to 28 per cent, plus additional 12 per cent compensation cess.


Dr. Reddy Labs slips over 3%

Dr. Reddy’s Laboratories Ltd on Sunday said that it is suspending supply of its drug Ranitidine worldwide as a precautionary measure, following the ongoing probe by the US Food and Drug Administration (FDA) into the reported impurity N-nitrosodimethylamine in it at low levels.


Petronet LNG dips over 2%


Infisys declines 6%


ITC trades over 7% higher


MARKET CHECK | S&P BSE MidCap index rallies nearly 2.50%


Reliance Capital falls over 4%


MARKET CHECK | Top losers on the BSE at this hour


MARKET CHECK | Top gainers on the BSE at this hour


SECTOR WATCH | IT stocks only loser on the NSE


MARKET CHECK | Gainers and losers on the S&P BSE Sensex


FIRST TRADE

The S&P BSE Sensex was trading 1,293 points or 3.40 per cent higher at 39,307.79, while NSE's Nifty50 index was ruling at 11,589.20, up 315 points or 2.79 per cent. 

Tax windfall: India Inc to increase capex spending, retire high-cost loans

With a surprise tax windfall in its kitty, Corporate India is redrawing its capital allocation strategy, plans to retire high-cost bank loans and, in a few cases, even giving the green signal to capacity expansion projects. While the tax cut will help companies across most sectors, energy, financials, metals, and mining are going to see major improvement in their 2019-20 (FY20) bottom line. READ MORE

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


Market at Pre-open


Rupee Opening Alert

Rupee opens mildly weaker at 71.04/$ vs Friday's close of Rs 70.94/$


Market at Pre-open


NEWS ALERT | US FDA completes inspection of Lupin's Torapur manufacturing (API) facility: BSE filing

--  The inspection was carried out between September 16 to September 20, 2019

-- The inspection at the Tarapur facility closed with three observations.

178-yr-old company, Thomas Cook files for bankruptcy as bailout talks fail

The company filed for administration early Monday at the High Court in London after talks to raise additional funding failed, Thomas Cook said in a statement. AlixPartners LLP was named an adviser and will work with the country’s Civil Aviation Authority to get holidaymakers back home over the next two weeks. The government called it the “largest repatriation in peacetime history.” READ REPORT HERE

Petronet to invest $2.5 bn in Houston's Tellurian Inc for 5 mn tonnes gas

The Houston-based Tellurian and Petronet LNG Ltd (PLL) signed an MOU on Saturday under which the Indian company and its affiliates will import 5 million tons of LNG from America over a 40-year period.
 
The agreement also includes PLL making investment in the equity of USD 28 billion Driftwood project in Louisiana to secure the LNG. READ MORE

FPIs withdraw Rs 4,193 crore from capital markets in September so far

Foreign investors have pulled out a net sum of Rs 4,193 crore from the Indian capital markets in September so far, but the trend is expected to reverse on the back of fiscal relief measures announced by the government, experts said. The Centre on Friday slashed corporate tax rates by around 10 percentage points and said the enhanced tax surcharge will not to apply on capital gains arising from sale of any security including derivatives in the hands of FPIs. READ MORE HERE

Arvind to raise Rs 490 cr in long-term loans, restrict capital expenditure

Arvind Ltd, the Ahmedabad-based textile major, is planning to raise long-term credit worth Rs 490 crore to replace short-term loans as part of plans to improve its financial profile. It will also lower capital expenditure to Rs 300 crore from the earlier plan of Rs 500 crore. READ MORE

RCap's $5-bn debt at risk on default rating, revives India's credit scare

Mumbai-based Care cut Reliance Capital’s bonds by eight notches to D from BB, citing a delay in coupon payments on several of the lender’s non-convertible debentures, the rating company said in a Sept. 20 statement. Reliance Capital group’s debt stood at about $5 billion as of September, according to a company’s spokesman. READ FULL REPORT HERE

A 10% jump for India Inc earnings after Modi govt cut taxes, say analysts

Here is what analysts are saying:
 
Bank of America
 
Calculations suggest the Nifty index’s 1-year forward consensus earnings estimate for FY20 could rise by 7 per cent Capital expenditure may only pick up with some lag.
 
Prefers bank stocks on hopes of improved businesses. READ MORE

Stocks to watch: Dr Reddy's, Petronet LNG, Biocon, Cipla, Alkem Labs, autos

Dr Reddy's: Dr. Reddy’s Laboratories Ltd on Sunday said that it is suspending supply of its drug Ranitidine worldwide as a precautionary measure, following the ongoing probe by the US Food and Drug Administration (FDA) into the reported impurity N-nitrosodimethylamine in it at low levels.
 
Auto: Auto stocks may hog the limelight today as the GST Council, which met in Goa on Friday, did not cut tax rates on automobiles. The industry had been demanding a GST rate cut from the current 28 per cent to 18 per cent in order to revive sales which have been facing a prolonged slowdown. READ MORE 


FM Sitharaman rules out any immediate plan for expenditure reduction

Union Finance Minister Nirmala Sitharaman on Sunday said she hoped steep cuts in corporation tax rates would increase compliance, prompting her to stick to the fiscal deficit target for now.
 
“A call will be taken at the RE (Revised Estimates) stage,” Sitharaman told mediapersons, two days after she announced big-bang tax reductions for companies.
 
The cuts would cost the exchequer Rs 1.45 trillion a year. READ MORE HERE

Companies undergoing financial turmoil miss the Dalal Street party

The stock markets witnessed one of its biggest-ever celebrations on Friday. However, not all were invited. Companies undergoing financial turmoil or are loss-making had little to cheer.
 
Sample this: In the BSE 500 universe, there are 48 companies that reported losses for the financial year 2018-19. Shares of these companies rose an average 2 per cent, even as the benchmark Sensex jumped more than 5 per cent, in what was its biggest ever gain in a decade. READ MORE

Top business promoters richer by Rs 1.33 trn after Friday's market rally

The combined net worth of promoters of top listed firms was up Rs 1.33 trillion on Friday, which is 69 per cent of the Rs 1.94 trillion that they lost between June-end and September 19, 2019. Data also suggests that many billionaires are better off than on the eve of the Union Budget that was presented on July 5, 2019.
 
Reliance Industries (RIL) Chairman Mukesh Ambani tops the list of gainers with nearly Rs 22,000 crore addition to his net worth post the tax-cut, thanks to a six per cent rally in the company’s stock price on Friday. Promoters’ stake in RIL is now worth Rs 3.67 trillion slightly up from Rs 3.66 trillion at the end of June this year. READ MORE

Mutual funds deploy dry powder as corporate tax cut boosts sentiment

The spectacular run-up in Indian equities on Friday would have caught many fund managers off guard, especially those sitting on a sizeable amount of cash. Five of the top 10 mutual funds by equity value are holding cash in the range of 8-11 per cent, a reasonably high number. READ FULL REPORT HERE

Top 1,000 listed firms may see tax savings of Rs 37k cr on tax cut: Crisil

CRISIL Research on Sunday said top 1,000 listed companies could see tax savings of Rs 37,000 crore on account of the corporate tax cut.
 
"Over the past few days, a slew of measures have been introduced to address the slowdown in the Indian economy. Friday's announcement, however, is the most material...Our analysis indicates these 1,000 companies could see tax savings of Rs 37,000 crore, or nearly a fourth of the total savings anticipated by the government," it said in a statement. READ MORE

Commodity picks: September 23, 2019

Soy bean
 
Soy bean prices at the Indore markets are trading at Rs 4,020 per quintal. Prices are expected to surge till Rs 4,060 per quintal as new crop arrivals are delayed. Persistent rains in Madhya Pradesh and Maharashtra have delayed the new crop harvest. READ MORE

Tax cuts a booster for consumer companies ahead of festive season: Analysts

The major tax relief to India Inc announced last Friday came in as a great festive surprise and also led to a 4.4 per cent jump in the Nifty FMCG (fast-moving consumer goods) index. However, the Street is awaiting how FMCG players would utilise the expected tax savings — to propel volumes or gain market share amid slower demand.
 
Nonetheless, lower tax rates mean a direct push to earnings and so to their return ratios, and hence more room for valuation re-rating, if companies decide to retain all the benefits, as some analysts are currently assuming. READ MORE

Won't be surprised to see Nifty at 12,000: Aditya Birla Sun Life AMC CEO

The record single-day gains posted by the markets following the slew of tax cuts announced by Finance Minister Nirmala Sitharaman have made market participants hopeful of a sustainable rally.
 
In an interaction with Jash Kriplani, A Balasubramanian, managing director and chief executive officer, Aditya Birla Sun Life Asset Management Company, shares his optimism on what makes him believe that these cuts can help in addressing multiple issues plaguing the economy, without letting fiscal deficit pose any major risk. READ FULL INTERVIEW HERE
A Balasubramanian, MD and CEO, Aditya Birla Sun Life Asset Management Company

Corporate earnings boost could give more legs to market rally: Experts

The Indian markets will add to the historic gains made on Friday with most analysts revising upwards the Sensex targets as they see the tax cuts boosting corporate earnings significantly. Over the weekend, most of the brokerages have hiked the earnings estimates for the top-tier companies by an average 10 per cent and also revised upwards the index targets by a similar quantum. READ MORE

Two stocks that Vaishali Parekh of Prabhudas Lilladher is bullish on

BUY LARSEN TOUBRO
 
CMP: Rs 1,411
 
TARGET: Rs 1,580
 
STOP LOSS: Rs 1,280
 
The stock has witnessed a decent correction from the levels of 1,600 to take support and bottom out near 1,280 levels and has currently given a huge positive candle to signify strength and has potential to rise further with a positive bias in the coming days. The RSI also has indicated strength with a steep rise and has signaled a buy. With consistent volume participation witnessed, we recommend a buy in this stock for an upside target of Rs 1,550 – 1,580 levels, keeping a stop loss of Rs 1,280. READ MORE

Nifty view and top trading ideas by CapitalVia: Buy Cadila Healthcare, IGL

Markets zooms as FM Nirmala Sitharaman cuts corporate tax: Nifty gains the most in 10 years
 
Markets took announcements by FM Nirmala Sitharaman of slashing corporate tax from effective tax rate of 34.94per cent to 25.17 per cent extremely positively, which took markets to breach all important moving average of 50 and 200 days in a single trading session.
 
Banking, Automobile, NBFC’s and FMCG companies surged most which led Nifty to close at 11,274.20, adding 569.20 points. IT was the only sector which closed in red whereas, banks witnessed most traction which led Niftybank to close at 28,981.55, adding 2,223.90 points. 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 rose on Monday after the Pentagon ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s air and missile defenses following an attack on Saudi oil facilities.

-- At 7:50 am, Brent Crude Futures were up 0.92% at $63.78 per barrel.

SGX Nifty

At 7:45 am, the Singaporean Exchange for Nifty Futures were trading 123 points higher at 11,463 level.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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