MARKET WRAP: Sensex snaps 6-day losing streak, jumps 646 pts; banks advance

Topics Markets | MARKET WRAP

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Snapping their six-day losing streak, the benchmark indices staged a smart comeback on Wednesday to end nearly 2 per cent higher, led by heavy buying in banking stocks. 

The S&P BSE Sensex added 646 points or 1.72 per cent to end at 38,177.95 levels with IndusInd Bank (up over 5 per cent) being the top gainer and YES Bank (down 5 per cent) the biggest loser. Out of 30 components in the index, 8 stocks ended in the red and rest 22 in the green. The broader Nifty50 index of the National Stock Exchange (NSE) ended at 11,313.30 levels, up 187 points or 1.68 per cent. 

Nifty Bank advanced a whopping 1,018.30 points or around 4 per cent to settle at 28,785.85 levels, with 11 out of 12 constituents ending in the green. 

India VIX, the volatility guage, dropped over 4 per cent to 17.09 levels. 

Among the sectoral indices on the NSE, barring IT, all the indices ended in the green. Nifty Private Bank index gained 3.47 per cent to 16,095 levels. Financial services, realty and metal counters, too, made merry in the trade.

In the broader market, the S&P BSE MidCap index rallied 189 points or 1.38 per cent to end at 13,869.35 levels, while the S&P BSE SmallCap index closed at 12,796.47, up 83 points or 0.66 per cent. 

BUZZING STOCKS

Shares of Titan Company slipped 6 per cent to Rs 1,178 on the BSE during the session after the Tata Group company said that its revenue from the jewellery business could decline for the first time in the past four years in the September quarter (Q2FY20). The stock eventually settled at Rs 1,229 apiece, down 2.41 per cent. READ MORE

Shares of IndiaMART InterMESH surged around 18 per cent to end at Rs 2,261.55. 

Shares of Dewan Housing Finance Corporation (DHFL) hit an over 10-year low and were locked in the lower circuit limit of 10 per cent at Rs 26.05 on the BSE on Wednesday after PTI report suggested that Central Depository Services (CDSL) has frozen the company’s promoter shareholding as the company has not filed results for the first quarter. READ MORE  

GLOBAL MARKETS

Asian stocks fell the most in a week on Wednesday as the United States and China’s broadening dispute over trade and foreign policy showed little sign of coming to an end, weighing on global economic growth. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.61 per cent. Chinese shares fell 0.32 per cent after briefly touching a five-week low. Pan-region Euro Stoxx 50 futures edged up 0.03 per cent, German DAX futures rose 0.03 per cent, while FTSE futures eased 0.08 per cent.

Oil prices traded flat in the trade. Brent crude was down 9 cents at $58.15 a barrel and US West Texas Intermediate crude was at $52.55, down 8 cents. 

(With inputs from Reuters)


LIVE UPDATES

COMMENT :: Ajit Mishra, vice-president (research), Religare Broking

The bulls staged a smart comeback led by short covering and stable global cues. The Nifty index ended higher by 1.7% at 11,313 levels. The broader markets underperformed with BSE Midcap and Smallcap ending with gains of 1.4% and 0.7%. Amongst the sectoral indices, except IT and Consumer Durables, all the other indices ended with gains wherein Banking, Metal and Realty were the top gainers.
 
Going forward, we believe the upcoming earnings season would dictate the trend for the Indian markets. We expect that more than the earnings announcement, investors and traders would focus on the outlook provided by the management especially for consumption driven companies. On the global front, market participants would keep a close watch on trade talks between US-China.

EXPERT'S TAKE :: Vinod Nair, head of research at Geojit Financial Services

Market recovered after many days of fall and rose comfortably above 11,300 level. Banks outperformed as sharp fall in bond yield is indicating further room for rate cuts which will improve liquidity and consumption story. Further, a 5% hike in DA by govt will add impetus to the festival demand. Going forward, the result season will dictate the market direction and investors are expecting some green shoots on account of festival demand and good monsoon

MARKET COMMENT :: S Ranganathan, Head of Research at LKP Securities

The 5% hike in Dearness Allowance (DA) puts more money in the hands of over one crore government employees and pushed several heavyweight stocks higher in trade today

MARKET OUTLOOK :: Sahaj Agarwal, head of derivatives, Kotak Securities

Markets have witnessed massive volatility in the previous few weeks. Nifty50 has strong supportat 11000-11050. With this support in place, we expect the index to attempt to test 12,000-12,200 levels in the next few weeks. 
 
Momentums is seen across sectors with broad-based participation. A breach of 11,000 on the downside can lead to selling pressure towards 10,500-10,600 – chances of this though remain low. Positive global developments can further boost the sentiment. Investors should remain selective, while traders can remain long with broader market level of 11,000

Nifty Bank rallies over 3%

YES Bank only Nifty Bank constituient to end weak



Nifty snapshot


Contribution to Sensex today

Financials fuel market rally



Sensex heat map


CLOSING BELL

The S&P BSE Sensex ended at 38,177.95 levels, up 646 points or 1.72 per cent while NSE's Nifty50 index ended at 11,313.30, up 187 points or 1.68 per cent. 

COMMENT :: Edelweiss on IT sector

Healthy momentum in digital and robust deal pipeline across verticals are likely to underpin strong management commentaries in Q2FY20. We will keep an eye out for: i) increase in deal sizes and tenures in digital; ii) demand commentary by industry, specifically BFSI and retail; and iii) commentary on margin outlook for H2FY20. Maintain ‘BUY’ on Infosys, TECHM and HCLT, and ‘HOLD’ on TCS and Wipro.

COMMENT :: IDBI Capital on banks

Corporate banks to report lower slippages in Q2FY20 and the ongoing resolutions to provide comfort to the asset quality. However outlook on new stressed entities like Indiabulls, Altico, CG Power etc has to be keenly watched. Resolutions through the IBC framework have been slower than expected, but FY20 is expected to end with resolutions in a couple of cases.

Edelweiss Securities on Pharmaceuticals

Regulatory hurdles continue to impact as the sector received six warning letters YTD. Margins are expected to remain stable YoY and QoQ led by tight control on cost and rupee depreciation. Overall, while we expect Dr Reddy's and Ipca to surprise on the upside, Sun Pharma and Cadila Healthcare are likely to report soft numbers. During the quarter, consensus estimates for FY20/FY21 were revised down 3 per cent/4 per cent, except for Dr Reddy's wherein FY20 estimates were revised up 8 per cent. Valuations continue to dwindle — now at 15.6x (from 16.8x at the end of Q1FY20). Maintain Dr Reddy's and Cipla as our top ‘BUY’ and Sun Pharma as top ‘REDUCE’.

Antique Stock Broking on financial sector

For banks, 2QFY20 is expected to be a soft quarter with systemic loan growth (till 13th Sep-19), moderating to 10% YoY (vs. 12% in 1QFY20) and deposit growth being steady at 10% YoY. We expect stable to marginal decline in NIMs QoQ but with new Repo linked lending rates being better than expected, fear of NIMs compression is likely to ease

COMMENT :: Emkay Global on financial sector

We maintain our positive bias toward private banks, with our top picks being ICICI, HDFCB, City Union, Federal Bank and Bandhan Bank. Reiterate Sell rating on Yes Bank with a revised TP of Rs38 amid rising corporate stress leading to weak return ratios and sub-par capital position with incremental capital raise at lower valuations. Amid the NBFC crisis, we prefer high-quality and relatively resilient players. We believe that insurance companies remain a safe haven amid the NBFC crisis, which is reflected in their strong stock performance. Our top picks are IPRU and SBI.

MARKET UPDATE | Nifty Bank advances 1,000 pts


BUZZING STOCK | Century Textiles jumps 8%


MARKET CHECK | Sudden surge in markets; Sensex up nearly 600 pts


NEWS ALERT | Around 209 securities hit 52-week low on the NSE

(Source: NSE)

MARKET CHECK | Top 5 losers on the BSE at present


NEWS ALERT | Sept MF data

-- Total net equity inflow down by 28.6% MoM at Rs 6,489 crore
 
-- Credit Risk Outflow at Rs 2,351 crore vs outflow of Rs 2,270 crore MoM
 
-- Balanced Fund Outflow at Rs 1,931 crore vs Rs 879 crore MoM
 
-- Liquid Fund Outflow at Rs 1.4 lakh crore vs inflow of Rs 79,428 crore MoM

(As reported by CNBC TV18)

NEWS ALERT | HDIL Directors Former Chairman of PMC Bank, sent to police custody till October 14: CNBC TV18

  Alert: Sarang & Rakesh Wadhwan, Waryam Singh sent to custody by Mumbai's Esplanade Court

NEWS ALERT | Dearness allowance increased by 5%; total expense at Rs 16,000 cr: Prakash Javadekar

- Dearness allowance now stands at 17% vs 12% earlier

Market check


Indiabulls Ventures, IBREL surge up to 10% on share buyback plan

Shares of Indiabulls Ventures and Indiabulls Real Estate rallied up to 10 per cent after the two announced their respective share buy-back plans, in a likely bid to arrest steep fall in the share prices. The market value of their share has fallen sharply in the past one month.
 
Individually, Indiabulls Ventures gained 10 per cent to Rs 110, while Indiabulls Real Estate was locked in the upper circuit band of 5 per cent at Rs 43 on the BSE. READ MORE

NEWS ALERT | Cadila Health's Zydus gets US FDA nod for cholesterol drug, Colesevelam Hydrochloride tablet: BSE Filing


MARKET CHECK | Industrial stocks gain; S&P BSE Industrials index up 1.30%


DHFL hits over 10-year low after CDSL freezes promoters' shareholding

In the past one month, the share price of DHFL has tanked 47 per cent, after the company reported a fresh case of default amounting to Rs 196.65 crore on bond repayment obligation. In comparison, the S&P BSE Sensex has gained 2 per cent during the same period. READ MORE  


 

Market check


After 42% rally in 2 months, here's why analysts are now cautious on BPCL

Last week, international credit rating agency Moody's warned of downgrading Bharat Petroleum Corporation (BPCL) to Ba1, if the government goes ahead with privatisation by selling its stake to private entity, which would remove the company's links and prompt bond redemption, a credit negative. On September 30, the group of secretaries on disinvestment gave its approval for to sell government's entire 53.29 per cent stake in BPCL, which is likely to be completed by March 31, 2020. READ MORE  


NEWS ALERT | Bilaspur Plant & Paradeep Plant were shut for 8 & 33 days, respectively in Q2: Goa Carbon

Due to the absence of viable export and domestic orders, the plants of the Company were shut down during the quarter ended Sept 30, 2019 

Q2 Earnings Alert | Goa Carbon

-- revenue down 10.6% YoY at Rs 101.5 crore

-- Net loss at Rs 13.8 crore

-- EBITDA loss at Rs 9.7 crore

NEWS ALERT | Govt may bring a revised Financial Resolution & Deposit Insurance Bill: sources to CNBC TV18

-- Centre may also consider a new law on financial sector bankruptcies to cover systematically important insurance companies, banks, NBFCs

-- Revised/new Bill may propose higher deposite insurance cap

-- Fresh view likely on 'Bail-in clause' of revised/new FRDI Bill

NEWS ALERT | SBI cuts interest rate on savings deposits with balance of upto Rs 1 lakh by 25 bps to 3.25% w.e.f November 1: CNBC TV18

-- Cuts retail & bulk term deposit interest rates by 10 & 30 bps respectively for 1 year to less than 2 year tenor

Market check | Sharp surge in Sensex


IndiaMART InterMESH hits fresh record high, surges 12% in a weak market

In the past two months, the stock of India's largest online business-to-business marketplace has zoomed 83 per cent, as compared to a per cent decline in the S&P BSE Sensex. The stock now trades at more than double the value of its issue price of Rs 973 per share. READ MORE

NEWS ALERT | SBI cuts lending rates by 10 bps across tenors

1-year MCLR to be 8.05% w.e.f Oct 10

NEWS ALERT | Raymond to sell Thane property of 78,310 sqm to Elpis Ventures


NEWS ALERT | JBM Auto bags orders to supply CNG buses in Delhi, electric buses in Mumbai: BSE filing

-- JBM Auto bags order to supply CNG buses to Delhi Integrated Multi-Modal Transit System Limited (DIMTS), SpiceJet & IndiGo.

-- The co will also supply electric buses through arm JBM Solaris Electric to Navi Mumbai Municipal Transport Corporation (NMMT)


Effects of global slowdown more pronounced in India: IMF Chief Georgieva

The global economy is witnessing "synchronized slowdown", which will result in slower growth for 90 per cent of the world this year, and the effect is even "more pronounced" in some of the largest emerging market economies like India, new IMF chief Kristalina Georgieva has warned.
 
The Managing Director of International Monetary Fund (IMF) pointed out that the widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade. READ MORE
Kristalina Georgieva, new IMF managing director

Titan slumps 6% as jewellery business sees sharp decline in sales in Q2

“The company’s jewellery division witnessed a sharp fall in sales after a sudden surge in gold prices dented the consumer demand from mid—June. The weakness continued during July too and resulted in considerable de-growth in sales during the month,” Titan Company said in quarterly update. READ MORE

Top 5 gainers on the BSE at present


Momentum Picks by ICICI Securities


YES Bank dips 8%


Q2 Preview | TCS results on Thursday: Will the IT major deliver a surprise?

Analysts at Nirmal Bang Securities have a completely different stance. The brokerage house terms the quarter under review as 'make or break period for TCS and Infosys'. According to the brokerage firm, there could be some modest disappointment in store on both revenue and margin fronts for IT companies, especially in the second half of FY20 (H2FY20). READ MORE  


Rupee opens 16 paise lower against US dollar amid weak global cues

The rupee on Wednesday opened 16 paise lower at 71.18 against the US dollar. The domestic unit on Monday depreciated by 14 paise to close at 71.02 as profit booking in domestic equities and unabated foreign fund outflows kept investors edgy. READ MORE 

Most consumer durable stocks slip; S&P Consumer Durables index down 2.60%


Infosys slips over 0.50%


BUZZING STOCK | Aurobindo Pharma gains over 3%


SECTOR WATCH | Top gainers and losers on the NSE


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


OPENING DEALS

At 09:18 am, the S&P BSE Sensex was ruling at 37,543.01 levels, up 11 points or 0.03 per cent while NSE's Nifty50 index was quoting over 6 points or 0.06 per cent higher at 11,132.70 levels. 

NEWS ALERT | India drops 10 positions in World Economic Forum's Global Competitiveness Report 2019: CNBC TV18

--  Now ranks 68th out of 141 economies

-- India lost 0.7 points

-- Colombia, South Africa, Turkey overtake India

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 weaker at 71.18/$ vs Monday's close of Rs 71.02/$

Maruti Suzuki cuts production for eighth straight month in September

Reeling under a prolonged slowdown, Maruti Suzuki India (MSI) reduced its production by 17.48 per cent in September, making it the eighth straight month when the country's largest car maker lowered its output.
 
The company produced a total of 1,32,199 units in September as against 1,60,219 units in the year-ago month, Maruti Suzuki India (MSI) said in a regulatory filing. READ MORE

Stocks to watch: Infosys, Minda Ind, Indiabulls Ventures, Aurobindo Pharma

Here's a look at the top stocks that may remain in focus today -
 
Titan: The company in its regulatory filing said that the retail sales (secondary sales) in jewellery division grew by 7 per cent in Q2'20 but revenues as per financials declined 2 per cent YoY in Q2'20 substantially due to adverse impact ofthe hedges matured during the quarter.
 
Infosys has been selected as one of the main suppliers to deliver digital transformation services to Volvo cars. READ MORE

NEWS ALERT | Glenmark Pharmaceuticals receives tentative ANDA approval for Dimethyl Fumarate Delayed‐Release Capsules: BSE Filing

-- Glenmark Pharmaceuticals Inc., USA (Glenmark) has been granted tentative approval by the United States Food & Drug Administration (U.S. FDA) for Dimethyl Fumarate Delayed‐Release Capsules, 120 mg and 240 mg, a generic version of Tecfidera®1 Capsules, 120 mg and 240 mg, of Biogen Inc. 

IL&FS case: CVC intervenes in Sebi's probe of credit rating agencies

The process followed in dealing with credit-rating agencies (CRAs) has come under the scanner of the Central Vigilance Commission (CVC), a body that probes corruption in government.
 
The commission has asked the Securities and Exchange Board of India (Sebi) to explain the role of CRAs and the status of its probe into the Infrastructure Leasing & Financial Services (IL&FS) fraud case. READ MORE

New fund offerings fetch 24 asset managers Rs 7,500 crore in CY19

In a room full of distributors, Motilal Oswal AMC’s (MOAMC) sales and distribution head Akhil Chaturvedi hard-sells the asset manager’s large & mid-cap scheme, a new fund offering (NFO).
 
Chaturvedi tries to convince the group of 100-odd distributors that the NFO can help create excitement among investors, especially those sitting on the sidelines, and get them to invest. READ MORE

Escorts scrip bounces back to register 19% rise on seasonal tractor demand

Even as auto stocks continue to feel the pressure of falling volumes and muted outlook, the Escorts scrip has bounced back over the past three weeks to register gains of 19 per cent. Led by seasonal demand for tractors, the company was the only one in the listed space to report year-on-year (YoY) volume growth in September. READ MORE

Valuations of banking stocks may come under pressure amid economic slowdown

Who would have envisaged a year back, when there were first signs of stress in the form of a liquidity squeeze, thanks to the IL&FS fiasco, that it would have a cascading impact on India’s financial system. That the count of public sector banks (PSBs) would further shrink and that there would be so much thrust on transmitting repo rate cuts that banks may have to work harder to protect their net interest margin (NIM). READ MORE

Slowdown blues: Q2 Nifty50 earnings may decline despite corporate tax cut

The July-September 2019 period could be one of the worst quarters for corporate earnings in recent years if the estimates by leading brokerages on Dalal Street are anything to go by.
 
Gains from the corporate tax cut last month are likely to be offset by lower sales volume and revenue contraction in key sectors such as automobiles, energy, metals, and mining. READ MORE HERE

Top stock recommendations by Anand Rathi: Buy Berger Paints, sell Sun TV

NIFTY: SELL
 
TARGET: 11,000
 
STOP LOSS: 11,220
 
Nifty closed in the negative territory in the last trading session and with that it has provided a sell crossover in its daily MACD which is a negative sign in the short term. The Index continues to form lower tops and lower bottoms; hence the bears have an upper hand.READ MORE

Bulk deals on BSE as on Monday

Bulk deals on NSE as on Monday

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


Rupee Check

Source Bloomberg


Oil Check

At 8:00 am, Brent Crude Futures were at $58.07 per barrel mark

SGX Nifty

At 7:55 am, the Singaporean Exchange for Nifty Futures were trading 37 points, or 0.33 per cent, at 11,134 level.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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