MARKET WRAP: Sensex trims losses, ends 362 pts lower; Nifty ends at 11,360

Topics Markets | MARKET WRAP

(Photo: Kamlesh Pednekar)
After tumbling around 2 per cent in the intra-day deals, the benchmark indices staged smart recovery in the fag-end of the session but still settled with nearly a per cent losses. 

The S&P BSE Sensex ended at 38,305.41, down 362 points or 0.94 per cent. The index recovered 376 points from day's low. YES Bank (down 23 per cent) emerged as the biggest drag on the index while HDFC Bank (up nearly 2 per cent) was the top performer. Out of 30 components, 23 ended in the red and rest seven advanced. 

In the broader market, the S&P BSE MidCap index lost 218 points or 1.54 per cent to end at 13,886.42 levels while the S&P BSE SmallCap index ended at 12,959, down 212 points or 1.61 per cent. 

On the NSE, the benchmark Nifty50 index ended at 11,359.90, down 115 points or 1 per cent. 

Volatility index India VIX rose 5.22 per cent to settle at 16.70 levels. 

On the sectoral front, all the indices on the NSE ended in the red. Media counters bled the most, followed by realty, PSU banks and metal stocks. The Nifty Media index ended at 1,722.15 levels, down 77.85 points or 4.32 per cent.


Shares of rate sensitive sectors like banking, real estate and automobile companies came under heavy selling pressure on Tuesday, falling by up to 30 per cent on the National Stock Exchange (NSE). READ MORE

Shares of Bharat Petroleum Corporation (BPCL), Shipping Corporation of India (SCI) and Container Corporation of India (Concor) rallied up to 14 per cent on the BSE in the intra-day deals  after group of secretaries cleared disinvestment proposal of these public sector companies. READ MORE  


Emerging market stocks held steady on Tuesday as weak business readings from major economies amid uncertainty related to trade ties between the United States and China kept investors in a cautious mood, while Turkey’s lira led a slide among currencies. MSCI’s index of developing world stocks traded flat to lower with stocks in India, South Africa and Turkey drifting down. Markets in China and Hong Kong were closed for a public holiday.

In commodities, oil prices rebounded on Tuesday on reports that output from the world’s largest oil producers fell during the third quarter, although a resumption in Saudi supply and demand concerns kept a lid on gains.

(With inputs from Reuters)


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

Contraction in core sector and concern on Govt’s plan to stick with original fiscal target of 3.3% in spite of huge cut in tax raised concern over spending. Investors are not expecting a meaningful recovery in festival season due to continued weakness in auto sales. Volatility in banks and fall in rupee also influenced profit booking tendency in the market.


MARKET AT CLOSE | Sectoral losers and gainers on the NSE

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


The S&P BSE Sensex ended at 38,305.41, down 362 points or 0.94 per cent while NSE's Nifty50 index ended at 11,359.90, down 115 points or 1 per cent. 

Why Sensex slipped over 700 pts during the day

Counters such as PSU banks, realty, and media fell like ninepins while the volatility guage India VIX jumped 14 per cent to 18.04 levels. The Nifty PSU Bank index slipped over 6 per cent to 2,154.30 levels with all the 12 constituents trading in the red. The broader market was no different as the S&P BSE MidCap index slipped around 2 per cent to 13,858.85 levels while the S&P BSE SmallCap index was quoting 1.90 per cent lower at 12,920.94 levels. READ MORE  


NEWS ALERT | Have no exposure to HDIL or PMC Bank: DHFL via BSE filing

-- Says, DHFL's promoter family had separated from HDIL promoters in 2008 and the separation was effected formally by a family-separation agreement in April 2010.

NEWS ALERT | Have asked lenders to give time till March 2020: Punit Goenka, CEO of ZEEL to CNBC TV18

-- Total dues to lenders at Rs 5,000 cr

-- No invocation by any lender this week

-- Oppenheimer deal took longer than anticipated

-- Engaged largely with financial investors; they would be happy to take larger portion in 10% stake 

STOCK ALERT | YES Bank's m-cap falls to Rs 8,000 cr

-- Shares of Yes Bank plunged 30 percent intra-day to touch an over 10 year low of Rs 29.05 -- its lowest level since July 20, 2009.

-- Market cap of the private lender tumbled to Rs 8,033 cr

RUPEE ALERT| Domestic currency trading near day's low

Value of downgraded debt trebles to Rs 1.38 trn in H1 of FY20: Crisil

The value of debt downgraded more than trebled to Rs 1.38 trillion in the first half of fiscal 2020 (ended September 2019) from Rs 39,000 crore in the first half of fiscal 2019. That’s the highest for any half since fiscal 2016, rating agency Crisil said in the review of rating action in April-September 2019.
Constrained access to funding affected the credit profiles of entities across sectors, especially non-banks and real estate. READ MORE

Index Contributors at this hour

Volatility Index jumps 12%

Market check | Sensex slipped 980 points from day's high

-- Index touched intra-day low of 37,941.20

Sector watch | Nifty PSU Banks' index slide, down 5%

-- Syndicate Bank, Canara Bank, Bank of India, Union Bank of India, Bank of Baroda and Punjab National Bank hit 52-week low

Bank stocks tumble, S&P BSE BANKEX drops nearly 3%

MARKET CHECK | Sensex extends losses; 28 stocks in the red

NEWS ALERT | Govt amends Mineral (Mining by Government Company) Rules, 2015: CNBC TV18

-- Replaces the word ‘may’ with ‘shall’ in Mining Policy

-- Will remove ambiguity over mining renewables

Market check | Sensex slips nearly 690 points from day's high

Indiabulls group stocks extend decline; Indiabulls Hsg falls 48% in 1 week

Shares of Indiabulls group companies continued to reel under pressure on the BSE on Tuesday, taking total losses at Indiabulls Housing Finance (IBHFL), for the past one week, at 48 per cent. IBHFL extended Monday's slide on concern over merger with Lakshmi Vilas Bank (LVB). The Reserve Bank of India (RBI) on Saturday initiated prompt corrective action (PCA) against LVB. READ MORE

Buzzing | DHFL tanks 18%

Margin pressure, global factors to impact copper industry's financials

According to a report by 'Care Ratings', the dip in domestic production, largely due to the permanent closure of Vedanta's copper smelter plant in Thoothukkudi, will force India to remain a net importer of copper while the global copper prices will remain suppressed, and in the range of $ 5,500-5,900/tonne, until a constructive trade deal is reached between the US and China. READ MORE

NEWS ALERT | MOIL enters into JV with GMDC to take up project of joint exploration of manganese bearing areas in Gujarat

-- MOIL has signed a detailed MoU with GMDC for joint exploration, etc., to take up the above project.

-- JVC will have shareholding pattern of 51% and 49% for MOIL and GMDC respectively

Sept Auto Sales Data | Eicher Motors

-- Total domestic sales down 44.8%, at 3,140 units

-- Total exports down 41%, at 533 units

-- Total trucks and buses sales decline 44.2%, at 3,673 units

Sept Auto Sales Data | Escorts

-- Total domestic sales up 1.2% YoY, at 10,521 units

-- Total exports rise 51.1% YoY, at 334 units

-- Total sales up 2.2% YoY, at 10,855 units

Sept Auto Sales Data | M&M

-- Total domestic sales down 21% YoY, at 40,692 units

-- Total exports down 29% YoY, at 2,651 units

-- Total passenger vehicle sales down 33% YoY

-- Total commercial vehicle sales down 18% YoY

-- Total 3-wheeler sales up 8% YoY

Bharti Airtel plans to raise up to $1 bn via bond issue to reduce debt

Telecom major Bharti Airtel is planning to raise funds up to $1 billion (about Rs 7,000 crore) via a bond issue by its subsidiary Network i2i, the proceeds of which will be used to reduce debt.
"...offering of USD denominated Guaranteed Subordinated Perpetual Securities by Network i2i Limited (a direct 100 per cent subsidiary of Bharti Airtel) expected to be rated BB by both S&P and Fitch may follow, subject to market conditions," Bharti Airtel said in a regulatory filing. READ MORE

DGCA orders check for cracks in 23 SpiceJet Boeing 737-NG aircrafts

Indian aviation regulatory body, Directorate General of Civil Aviation (DGCA), has ordered checks of the joining areas of wings and body of all Boeing 737 Next-Generation (NG) aircraft in India for those which have completed over 26,000 flight cycles (FC).
Recently, cracks were found in three Boeing 737 NG planes having more than 36000 flight cycle at the wing to body frame fitting during a check. Boeing has been apprised about the cracks. READ MORE

Sector watch | Nifty Realty index top loser at this hour

Sept Auto Sales Data | Ashok Leyland

-- Total domestic sales decline 57% YoY, at 7,851 units

-- Total sales (domestic and exports) decline 55% YoY, at 8,780 units

-- Total domestic sales of medium and heavy weight CVs down 69% YoY, at 4,035 units

Maruti Suzuki reports 24% decline in sales in September

The country's largest carmaker Maruti Suzuki India (MSI) on Tuesday reported a 24.4 per cent decline in sales at 1,22,640 units in September. The company had sold 1,62,290 units in September last year, MSI said in a statement. Domestic sales declined by 26.7 per cent at 1,12,500 units last month as against 1,53,550 units in September 2018, it added. READ MORE 

NEWS ALERT | Achieved resolution of stressed loan account in Prayagraj Power Generation Company: PTC Ind Fin via BSE filing

-- Says, PTC India Financial services (PFS) has achieved resolution of one of its stressed loan account in the thermal segment namely 3x660 MW Prayagraj Power Generation Company Limited. 

-- The resolution was achieved under the open bidding process initiated by the Consortium Lenders led by State Bank of India, wherein, One Time Settlement (OTS) Offer submitted by Resurgent Power Ventures Pte Limited emerged as the H1 Bidder

-- The resolution entailed transfer of 75.01% of the shares of PPGCL to the H1 bidder for a total consideration of Rs 6000 Cr

Sept Auto Sales Data | Atul Auto

-- Total sales up 3.9% YoY, at 5,306 units

NEWS ALERT | Govt plans road-show to garner international interest in BPCL: sources to ET Now

-- Govt wants to attract interest of Exxon, BP Plc, Kuwait Petro, Shell

-- Planning road-show in US-Houston, Middle-East

-- Govt may not need Parliament's approval for stake sale in BPCL

-- Govt expects to complete NEEPCO sale to NHPC, and THDC's sale to NTPC by Feb

-- Govt expects to get Rs 10,000-Rs 15,000 cr from power sector consolidation

NEWS ALERT | Three directors resign from Manpasand Beverages with immediate effect: BSE filing

-- Bipin Rathod, Uday Kamath, Jitendra Dhivare have resigned

NEWS ALERT | Manpasand Beverages CMD files FIR against six individuals, alleging hostile takeover: BSE filing

Alert: Manpasand Bev's CMD is Dhirendra Singh

IRCTC IPO fully subscribed; sees strong demand from retail investors

The total bids received stood at 2,25,24,720 shares while the total issue size stands at 2,01,60,000 shares. The retail investors' portion was subscribed a total of 3.23 times while NII (Non Institutional Investors) quota saw a subscription of 0.42 times, data available with BSE and NSE showed. READ MORE

NEWS ALERT | Adani Group mulls buying Govt's stake in Concor: sources to CNBC TV18

Alert: Group of Secretaries approved divestment of 30%, out of 54.8%, of government's stake in Concor yesterday

IndusInd Bank slips 16% in three days despite clarification on HFC exposure

In the past three trading days, the stock of private sector lender has slipped16 per cent, as compared to a per cent fall in the S&P BSE Sensex. At the time of writing of this report, it was trading close to its 52-week low of Rs 1,268 touched on August 26. READ MORE

NEWS ALERT | MCA issues request for look out circular against HDIL MD & whole time director: Sources to CNBC TV18

Alert: MCA is Ministry of Corporate Affairs

       : HDIL MD is Sarang Wadhawan, whole time director is Rakesh Wadhawan

       : Request for LOC is issued to MHA to process it

NEWS ALERT | Received Establishment Inspection Report for Mekaguda's API facility in Hyderabad: Natco via BSE filing

Alert: Unit was inspected from August 5-9

Sept Auto Sales Data | Maruti Suzuki India

-- Total slaes down 24.4% YoY, at 1.22 lakh units

-- Total domestic sales down 24.8% YoY, at 1.15 lakh units

-- Total exports down 17.8% YoY

-- Passenger sales (including utility vehicles) down 27.1% YoY 

Upasna Bhardwaj, senior economist at Kotak Mahindra Bank on govt's borrowing programme

While the market will heave a brief sigh of relief on the back of no additional borrowing announcement, we note that fiscal slippage fears still remain. The shortfall arising from corporate tax cuts, lower run rate of income tax and GST are expected to only partly be offset by higher RBI dividend and lower expenditure. We believe the fiscal slippage could amount to ~0.4% of GDP. Higher disinvestment proceeds, interim RBI dividend and PSU dividends if materialized could offset part of the shortfall. However, we do not expect any clarity on these contours before the beginning of 4QFY20

IRCTC IPO :: Motilal Oswal Research view

Based on FY19 consolidated numbers, the issue is priced at a P/E of 19x. The company is likely to benefit from i) monopolistic nature of business, ii) significant growth over FY19-21 iii) an asset-light business model with healthy dividend payouts, and iv) strong parentage. Thus, investors can Subscribe to the IPO.

Elara Capital on Brigade Enterprises

The company has a growing annuity income portfolio, which is likely to post a 25% CAGR over FY19-21E to INR 4.5bn, as Tech Garden and WTC Chennai may be commercialized. Strong brand equity, rich launch pipeline (~6.0mn sqft) and stable Bangalore market (high affordability) would lift residential pre-sales.

The completed annuity assets account for ~50% of its existing EV, implying attractive valuation for the residual business. Further, timely monetization in the hospitalization segment will unlock value. We retain Buy with a revised target price of Rs 252 from INR 213 based on 1x (unchanged) NAV

Nomura on economy

High frequency indicators so far in Q3 (July/August) suggest continued slowdown across consumption, investment, external and services sectors. This implies some downside risk to our Q3 GDP growth projection of 5.6% y-o-y (vs 5% in Q2).

Given a weak Q3, we are retaining our FY20 real GDP growth projection at 6% y-o-y (vs the RBI’s 6.9% with downside risk), despite corporate tax cuts. Lower corporate taxes are good for profits, but their multiplier effect on growth is likely to be limited at around 0.1-0.2pp, which will be offset by a weaker Q3 GDP growth.

NEWS ALERT :: IHS Markit India Manufacturing PMI

The headline seasonally adjusted IHS Markit India Manufacturing PMI was at 51.4 in September, unchanged from August and thereby posting its joint-lowest reading since May 2018. The figure still showed an improvement in the health of the sector, although one that was historically subdued.

Looking at the second quarter of fiscal year 2019/20 as a whole, the PMI pointed to the joint-weakest quarterly performance since the same period in 2017. Consumer goods producers saw a strong improvement in operating conditions during the quarter, with a modest strengthening evident at intermediate goods makers and contraction in the capital goods segment

Over Rs 1.6 trillion debt downgraded by credit rating agencies in August

This was the highest number in this fiscal. The value of issuances that have lost credit ratings stood at Rs 66,120 crore in August, taking the tally to Rs 1.6 trillion for this financial year. Sharp downgrades can adversely impact the returns of investors exposed to debt schemes which make large allocation to risk-assets, said a fund manager. READ MORE

Sectoral trends at NSE at this hour

Market check

NEWS ALERT | Facing temporary cash flow issues due to the external environment in the Real Estate sector: HDIL

-- Due to the same, the company has been admitted under IBC 2016

-- Says, have already issued letters requesting an appointment with the Administrator in charge of the Bank to put forth the true and correct picture as also to
discuss a strategy hereby the interest of all stakeholders and in particular PMC Bank and its depositors is protected

-- We shall also take all necessary steps and extend our full cooperation with any and all agencies/ authorities during this period

NEWS ALERT | Adequate security cover in favour of the banks including PMC Bank have been created: HDIL via BSE filing

-- Security created over the assets of the company for these facilities in due compliance with all banking regulations 

-- All the books of the company are audited and reflect a hue and fair picture

Momentum picks by ICICI Securities

Sept Auto Sales Data | Bajaj Auto

-- Total sales down 20% YoY, at 4.02 lakh units

-- Domestic sales down 31% YoY, at 2.1 lakh units

-- Exports down 2% YoY, at 1.86 lakh units

-- Total 2-wheeler sales down 22% YoY; total CV sales down 8% YoY

Rupee opens 14 paise higher against US dollar amid rebound in oil prices

The rupee on Tuesday opened 14 paise higher against the US dollar amid steady global shares and rebound in crude oil prices. The domestic unit declined 31 paise to close at 70.87 on Monday amid rising demand for the greenback vis-a-vis other currencies overseas. Forex traders said globally risk appetite has plunged as US-China trade concerns continue to linger. Besides, selling in domestic equities and unabated foreign fund outflows also weighed on the local unit. READ MORE  

Top 5 losers on the BSE at present

Top 5 gainers on the BSE at present

Tata Communications gains nearly 2%


SECTOR WATCH | Gainers and losers on the NSE

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


At 09:21 am, the S&P BSE Sensex was trading 202.69 points or 0.52 per cent higher at 38,870.02 while NSE's Nifty50 index was quoting 64 points or 0.56 per cent higher at 11,538.15 levels. 

Deter Iran, or oil prices can spike unimaginably: Saudi crown prince

Saudi Arabia's King Salman told an emergency Arab summit on Friday that decisive action was needed to stop Iranian "escalations" following attacks on Gulf oil assets, as US officials said a military deployment had deterred Tehran. The right of Saudi Arabia and the United Arab Emirates to defend their interests after the attacks on oil pumping stations in the kingdom and tankers off the UAE were supported in a Gulf Arab statement and a separate communique issued after the wider summit. READ MORE

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 higher at 70.73 vs Monday's close of Rs 70.87

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

In a note on Indian banks and financial institutions co-authored by Nilanjan Karfa and Harshit Toshniwal, Jefferies suggests there is a potential “meaningful divergence” between the ratings and the debt repayment ability. YES Bank, Bank of Baroda, SBI, IndusInd Bank, and RBL Bank are amongst the banks, Jefferies says, that are most prone to “high risk” emanating from Anil Dhirubhai Ambani Group (ADAG), Cox & Kings, CG Power, DHFL and Essar Shipping. READ MORE HERE

Stocks to watch: Auto cos, Bharti Airtel, RIL, Tata Comm, CG Power, BPCL

Here's a look at the top stocks that may remain in focus today -
Auto stocks: Shares of automobile companies may remain in focus as they are slated to release their sales numbers for August starting today.
CG Power: Fraud-hit CG Power Chief Executive Officer K N Neelkant resigned on Monday as the company begins a clean-up of its operations.
Reliance Infrastructure: Reliance Infrastructure (RInfra) which is sitting on a debt of Rs 6,000 crore, is on track to reduce leverage even further as it focuses to be an asset-and capital-light entity, the company said on Monday. READ MORE

Why do credit rating agencies keep missing big Indian company defaults?

Defaults at companies including Dewan Housing Finance Corp., Cox & Kings Ltd. and Altico Capital India Ltd. have occurred even as their long-term ratings indicated very low to moderate risk of non-payment.
“Raters have not been able to detect stress in time,” said Ashutosh Khajuria, chief financial officer at Federal Bank Ltd. “Cutting credit profiles after the defaults is no rocket science.” READ MORE

IRCTC's IPO subscribed about 81% on the opening day of bidding

IRCTC's public offer to raise about Rs 645 crore received bids for 1.63 crore shares as against the total issue size of two crore shares, according to exchanges' data.
The non-institutional investors category was subscribed 21 per cent and that of retail individual investors 2.23 times. READ MORE

Sebi, Ministry of Corporate Affairs plan to turn up heat on rating firms

The Securities and Exchange Board of India (Sebi) and the Ministry of Corporate Affairs (MCA) are planning to change ownership and governance structures in credit rating agencies (CRAs), entities that provide an insight into the financial health of a company. The regulatory bodies are considering whether CRAs should be classified as market infrastructure institutions (MIIs), sources in the know of the matter said. READ REPORT HERE

Has Modi govt put foreign sovereign bonds scheme on back burner for now?

The government has accounted for only rupee-denominated bonds for borrowings this fiscal year, Economic Affairs Secretary Atanu Chakraborty said on Monday. This indicated the government will not go for overseas markets mop up this year. “Sovereign bonds — bonds to be raised in external currencies — are decided on the basis of current price, market appetite, market conditions, and related issue and structuring of the bond itself. READ MORE

Indian banks are most vulnerable in Asia-Pacific economies, says Moody's

A prolonged period of low interest rates has resulted in companies building up leverage, which is hurting them now, in times of low economic growth coupled with growing trade and geopolitical tensions.
Most banks in the region have a good capital buffer, but those in India and Indonesia. READ MORE HERE

Top stock recommendations by Anand Rathi: Buy Divis Labs, Godfrey Phillips

TARGET: Rs 1,770
STOP LOSS: Rs 1,619
The stock has provided a breakout from the downtrend line resistance and with that it seems to have completed wave 4 consolidations. The stock has completed the retest of the trend line, hence wave 5 up from here on should ensue, and hence we recommend buying it for the target of Rs 1,770 with a stop loss of Rs 1,619. 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

-- Oil prices were under pressure, wiping out all of their gains after attacks on Saudi Arabian oil facilities last month, on fading concerns of supply shortfalls and conflicts in the Middle East, Reuters reported.

-- At 7:59 am, Brent Crude Futures were at $59.71 per barrel

SGX Nifty

At 7:55 am, the Singaporean Exchange for Nifty Futures were at 11,553-mark, up 15 points.

Asian Market Check

Source: Reuters

US Market Check

Source: Reuters

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