MARKET WRAP: Sensex slips 45 pts, RIL falls 2.75%; Rupee hits all-time low

Markets, Stocks, BSE, NSE
The benchmark indices ended flat on Friday amid weakness in the rupee, which hit a new low breaching 71 per dollar mark for the first time earlier in the day.

The S&P BSE Sensex ended at 38,645, down 45 points while the broader Nifty50 index settled at 11,680, up 4 points.

Oil-to-telecom heavyweight Reliance Industries (RIL) settled 2.75 per cent lower at Rs 1,239 on the BSE.

Among sectoral indices, the Nifty Pharma index rose 2.7 per cent led by a rise in Lupin and Dr. Reddy's Laboratories. The Nifty IT index, too, settled 1.8 per cent higher led by Tech Mahindra and MindTree. However, Nifty Bank index slipped 0.15 per cent due to a fall in YES Bank's shares.

Rupee hits 71 per dollar

The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices.

At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 70.95 a dollar and slipped further to hit its lifetime low of 71 from its previous close of 70.74.

Global Markets

Asian shares came under renewed pressure on Friday as a report US President Donald Trump was preparing to step up a trade war with Beijing sent Chinese stocks lower and partially erased gains made in this week's global rally.

Many emerging market currencies were also frail after Argentina's peso sank on Thursday despite the central bank's interest rate hike.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.7 per cent, for monthly drop of 1.5 per cent. Japan's Nikkei closed down 0.02 per cent. 

(with wire inputs)


Nifty sectoral gainers and losers of the day

BSE Sensex: YES Bank, RIL among top losers of the day, Tata Motors top gainer

Market at close

The S&P BSE Sensex ended at 38,645, down 45 points while the broader Nifty50 index settled at 11,680, up 4 points.
J B Chemicals gains as board approves buyback

J B Chemicals & Pharmaceuticals rose 1.51% to Rs 342.20 on BSE after the company's board of directors the buy-back of equity shares. The announcement was made during market hours today, 31 August 2018. READ MORE

Equirus on Century Plyboards

We expect CPBI to post a 18%/21% CAGR in both EBITDA/PAT over FY18-FY21E led by higher contribution from the Laminate and MDF segments. However, we
expect some margin pressure due to higher chemical (RM) costs in laminates, and realization pressure in MDF as competition heats up in North India. We currently have an ADD rating on the stock with a Dec’19 target price of Rs 283.
Top losers on BSE today

YES BANK 343.50 -18.40 -5.08 4233891
KIRLOSKAR OIL 297.80 -15.65 -4.99 7919
KWALITY 19.95 -1.04 -4.95 50184
J KUMAR INFRA 259.85 -10.15 -3.76 24828
TATA COMM 538.00 -20.50 -3.67 21605
» More on Top Losers
MUST READ ​Why India's world-beating growth is not enough to end its deep jobs drought

The world’s fastest growing major economy isn’t growing nearly fast enough. That may seem like an absurd description for India, an economy the International Monetary Fund expects to expand 7.3 percent in the fiscal year through March 2019 and 7.5 percent in the next. Yet the reality is that even at its current pace, India is having trouble creating enough new jobs for its massive workforce or enough wealth to broaden its middle class READ MORE HERE
Kotak Securities on Phoenix Mills

JM Financial on textiles sector

In Jun’18, India’s market share in home textile exports to the US (sum of all products) decreased 5ppt YoY to 29%. In the same month, India’s market share in cotton sheets exports to the US (in USD terms) increased 2ppt YoY to 49%, while market share in terry towels declined significantly by 13ppt YoY to 33%.

India’s exports to the US (in USD terms) in terry towels and cotton sheets declined 16.5%/7.2% YoY YTD, respectively. a) Extension of MEIS (4% export benefit), b) INR depreciation (10% YTD-CY18) and c) settling of market place disruption in the US are a welcome relief to the home textile exporters. High cotton prices (INR 134/kg) remain a key concern.

Recovery in export volumes, increase in export subsidy (ROSL) and cotton price movement in the new season starting Oct’18 are the key monitorables. We remain positive on the space

Sector watch: Automobiles

India Ratings and Research (Ind-Ra) has maintained a stable outlook for the auto sector for the remainder of FY19. This is in line with Ind-Ra’s earlier expectations of moderate sales volume growth in the passenger vehicle (PV) segment, double-digit growth in the commercial vehicle (CV) segment and steady growth in the two-wheeler segment (2W) on a year-on-year basis.
While the growth momentum in CVs is likely to continue, thanks to improved economic activity, increased infrastructure development and improved mining activities, the growth rate is likely to moderate in 2HFY19 due to a higher base. Amid several regulatory changes undergoing in the industry, CV growth would remain susceptible to clarity regarding the new axle load norms and vehicle scrappage policy.
L&T hits over two-month high; stock up 11% in two weeks

Shares of Larsen & Toubro (L&T) hit an over two-month high of Rs 1,374 per share, up 2%, gaining 11% in the past two weeks after the company announced a share buyback proposal. In comparison, the S&P BSE Sensex was up 2% during the same period. The stock was trading at its highest level since June 4, 2018, on the BSE. READ MORE

RInfra's Mumbai power biz sale a positive; analysts cautiously optimistic

Completion of its Mumbai power business sale to Adani Transmission and the plan to cut debt sharply from the earlier Rs 220 billion to Rs 75 billion and become a debt-free company by next year pushed the Reliance Infra (RInfra) stock higher by over 7 per cent to Rs 477 levels on the Bombay Stock Exchange (BSE) in intra-day deals on Thursday in an otherwise weak market. READ MORE

Market Check

Index Current Pt. Change % Change
S&P BSE SENSEX 38,601.57 -88.53 -0.23
S&P BSE SENSEX 50 12,214.58 -10.49 -0.09
S&P BSE SENSEX Next 50 35,534.15 +37.54 +0.11
S&P BSE 100 11,997.17 -6.77 -0.06
S&P BSE Bharat 22 Index 3,748.23 +13.15 +0.35

(Source: BSE)
Nifty Pharma index set to post sharpest monthly rally in 9 years

Shares of pharmaceutical companies were on a roll with the Nifty Pharma index set to post its sharpest rally in past nine years on the back of a strong rally in Sun Pharmaceutical Industries, Aurobindo Pharma, Glenmark Pharma and Dr Reddy’s Laboratories.
The pharma index hit a fresh 52-week high of 10,390 in intra-day on Friday, rallied 13% thus far in the month of August. In comparison, the Nifty 50 index was up 2.6% during the month. During the month of June, the pharma index had soared 11.6% against a 0.2% decline in the benchmark index. READ MORE
Gold rises, but set for longest monthly losing streak in 5-1/2 years

Gold rose on Friday as investors hedged against risks stemming from the ongoing trade dispute, with $1,200 acting as a strong support, but the bullion was headed for its longest monthly losing streak since 2013.
Spot gold was up 0.6 per cent at $1,207.06 an ounce, after touching a near one-week low of $1,195.95 on Thursday. Prices are down 1.3 per cent so far this month, on track for a fifth straight monthly decline. US gold futures were up 0.7 per cent at $1,212.80 an ounce. READ MORE

Amid green shoots, economy to grow 7.6% in Q1 on low-base effect: Report

The economic growth is expected to rise to 7.6 per cent in the April-June quarter of 2018-19 from a sub-six per cent figure in the year-ago period mainly due to a low-base effect, says a report by HDFC Bank.

According to a HDFC Bank research report, growth numbers across sectors in the first quarter are likely to get a boost from a favourable base effect even as there are some genuine signs of revival in the economy. READ MORE

Crude oil prices may rise further in 2018, remain above $75 a barrel: IEA

In what could be the bad news for consuming countries like India, the International Energy Agency (IEA) has said crude oil prices are likely to rise further in 2018 and may remain above $75 a barrel for some time, owing to the geo-political situations across the world — including Iran sanctions and drop in Venezuela production. READ MORE

NEWS ALERT: LIC's 7.9% investment in IDBI Bank not subject to HC directive
NEWS ALERT: IDBI board concludes discussion on LIC's investment
Top gainers in BSE 500:

WELSPUN INDIA 75.45 6.15 8.87
JAI CORP 169.45 11.65 7.38
INDO COUNT INDS. 79.50 4.50 6.00
HIMATSING. SEIDE 295.10 15.95 5.71
PNC INFRATECH 168.45 8.50 5.31
» More on Top Gainers
Uncertainty over Rana Kapoor's reappointment is 'big negative' for YES Bank

Markets, for one, do not like uncertainty – and that’s exactly what’s driving down YES Bank at the bourses. On Thursday, the Reserve Bank of India (RBI) approved the continuation of Rana Kapoor as their managing director and chief executive till further notice.
This, analysts believe, has triggered one of the catalysts that can trigger a correction in the stock. On Friday, the stock slipped 7 per cent in intra-day deals to hit an eight-week low of Rs 338 levels. READ MORE
A fall in Indian stock mkt will be a buying opportunity: CLSA's Chris Wood

The rally in Indian equity markets thus far in calendar year 2018 (CY18) amid a weakening rupee has surprised CLSA’s Christopher Wood, their managing director and equity strategist.
One reason why the Indian stock market has been so resilient, Wood says, is that India is primarily a domestic-driven economy and is less exposed to Trump-driven trade concerns. He believes a correction in the Indian equities will be a good buying opportunity. READ MORE
Christopher Wood, Managing Director & Equity Strategist, CLSA

Sensex set for new highs even though rated expensive: Reuters poll

Indian shares will hit a new record high by year-end despite being rated as expensive, strategists polled by Reuters said, citing high oil prices and election uncertainty as the biggest downside risks to the BSE Sensex. READ MORE
Market at Noon

Index Current Pt. Change % Change
S&P BSE SENSEX 38,636.29 -53.81 -0.14
S&P BSE SENSEX 50 12,222.99 -2.08 -0.02
S&P BSE SENSEX Next 50 35,525.33 +28.72 +0.08
S&P BSE 100 12,003.70 -0.24 0.00
S&P BSE Bharat 22 Index 3,746.86 +11.78 +0.32

(Source: BSE)
Top contributors to Sensex today

INFOSYS 1437.00 19.50 1.38 269361.00 41.99
ITC 321.75 2.55 0.80 390423.10 35.28
LARSEN & TOUBRO 1362.75 13.20 0.98 189206.91 20.97
INDUSIND BANK 1902.00 25.80 1.38 95831.32 14.92
SUN PHARMA.INDS. 650.65 11.15 1.74 70580.21 13.95

Commodity derivatives: NCDEX's clearing corporation set to go live in Sept

The markets regulator is working to expand the width and depth of the commodity derivatives market.
Among the measures are a clearing corporation which is separate from an exchange’s trading function, allowing equity and commodity exchanges to enter each other’s area, inviting proposals for commodity index futures and rules for entry of foreign traders. READ MORE

ICICI Securities recommends Security and Intelligence Services (SIS) 

We initiate coverage on SIS with an ADD rating and DCF based Jun’19 target price of Rs1240. Market leadership across underpenetrated market segments (especially India Security Services and Facilities management), favourable policy framework, active inorganic strategy and potential for scale-driven operating leverage are the key components of our positive rating on the stock.
IT stocks gain ground

FIRSTSOUR.SOLU. 74.80 0.65 0.88 387904
WIPRO 302.85 4.00 1.34 164102
INFIBEAM AVENUES 228.50 0.45 0.20 155668
HEXAWARE TECH. 437.00 4.30 0.99 133050
INFOSYS 1435.30 17.80 1.26 109166
» More
Sector watch: Metals & mining

The July production volume for non-ferrous companies has come along expected lines. Key highlights: 1) HZL’s zinc and lead volumes were both down owing to operational issues at the Rampur Agucha mine and maintenance at the Dariba smelter, respectively. 2) Hindalco reported stable aluminium (Al) production while copper (Cu) volumes were crumbled by major maintenance activity in July. 3) Vedanta’s Al volume remained stable though the Cu division was impacted by the ongoing shutdown.

Going ahead, we believe that HZL’s mined metal (MM) production volume would be restored and thus do not see a risk to our full-year estimate. Al volumes at both Vedanta and Hindalco are expected to remain robust and Cu volumes at Hindalco are likely to spring back. Maintain ‘BUY’ on Hindalco, Vedanta and HZL

(Source: Edelweiss Securities)
Elara on L&T Technology Services

We assign a new target multiple of 26x, higher than the 25x we have assigned for TCS, given broad revenue momentum, depth of management team and positive industry outlook that lead us to expect a very long runway of growth beyond the USD1bn targeted in FY21. We arrive at a new target price of Rs 1,840 on 26x (vs 21x earlier) March 2021E P/E (vs INR 1,490 earlier). We reiterate our Accumulate rating on the stock.
HDFC Securities on rupee

Indian Rupee has depreciated around 11% year to date. Higher crude oil prices, demand from defense and oil marketing firms have contributed to the latest bout of weakness. Rupee was overvalued on trade weighted real effective exchange rate. We are not overly concerned about the rupee beyond 72 level. Robust FDI flows in e-commerce companies, healthy forex reserves may limit the downside
Morgan Stanley on markets

Our core view remains risk and EM bearish. The US yield curve has diverged from US equities, which is inherently unsustainable. "Low quality" flows out of EM and into US money markets where high risk-adjusted returns are increasingly attractive have created a concentration of liquidity in the US at the expense of the RoW, explaining diverging global volatility trends and the continued bid for USD-denominated assets.
Improving outlook leads to re-rating for Balkrishna Industries, stock gains

The stock of Balkrishna Industries has gained over 37 per cent in the last two months, on strong June quarter results and expectations of an uptick in global demand for off-the-road tyres. Brokerages have re-rated the stock after the quarterly results, given they expect robust volume growth and low-cost operations to reflect both on revenue and earnings trajectory over the next two years. READ MORE

IPO market comes to a temporary standstill as firms rush to update results

The initial public offering (IPO) market has come to temporary a standstill despite improvement in market liquidity and buoyancy in equities. Investment banking sources said a rule pertaining to disclosure of quarterly numbers has put several IPOs on hold.
According to the regulatory framework, a company cannot launch an IPO if the quarterly results disclosed in the offer document are more than two quarters old. READ MORE

IT indices hit new high on weak rupee; TCS, Infosys hit fresh highs

Shares of information technology (IT) companies continued their upward journey with Nifty IT and the S&P BSE IT index hitting their respective new highs on weak rupee against the US dollar.
Nifty IT index (15,796) and the S&P BSE IT index (15,578), up nearly 2% each have touched new high on Friday. READ MORE

Asian Paints: Rural demand revival, new capacities should drive volumes

There is little doubt that consumer firms are in a sweet spot, with improving demand. But with reviving rural demand, some companies will perform even better.
Asian Paints, for instance, which has underperformed its smaller peer Berger Paints in the past due to subdued rural environment, is one of those expected to regain its charm. While Asian Paints’ stock has risen 19 per cent in the last two years, Berger Paints is up 29 per cent, narrowing the valuation gap with the paints’ leader. READ MORE

Analysts cautious on road construction stocks despite govt's infra push

Construction of roads across the country has yet again assumed importance, with the latest Reserve Bank of India’s (RBI) annual report for 2017–18 expecting the economy to look up further, aided partly by infrastructure expenditure. READ MORE

YES Bank hits 8-week low; stock falls 14% in 8 days

Shares of YES Bank hit an 8-week low of Rs 338 per share, down 7% in early morning trade on the BSE on the back of heavy volumes. READ MORE

Market Check

Index Current Pt. Change % Change
S&P BSE SENSEX 38,825.24 +135.14 +0.35
S&P BSE SENSEX 50 12,276.82 +51.75 +0.42
S&P BSE SENSEX Next 50 35,793.98 +297.37 +0.84
S&P BSE 100 12,062.21 +58.27 +0.49
S&P BSE Bharat 22 Index 3,762.01 +26.93 +0.72

(Source: BSE)
Rupee hits 71-mark for first time ever, drops 26 paise against US dollar

The rupee slumped to a fresh record low of 71 against the dollar for the first time ever by falling 26 paise on persistent demand for the US currency amid rising crude prices.
At the Interbank Foreign Exchange (Forex) market, the local currency opened lower at 70.95 a dollar and slipped further to hit its lifetime low of 71 from its previous close of 70.74. READ MORE

INTERVIEW OF THE DAY Market breadth has been really weak: Avendus Capital's Andrew Holland

It is time to be cautious as markets are ignoring risks on the horizon, says Andrew Holland, chief executive officer (CEO), Avendus CapitalAlternate Strategies. In an interview to Samie Modak, on the occasion of the launch of India’s first ESG (environment, social and governance)-based fund, Holland explains his investment strategy. READ MORE
Avendus Capital CEO Andrew Holland

Nifty sectoral trend

BSE Sensex: gainers and losers in opening trade

Market at open
At 9:16 AM, the S&P BSE Sensex was trading at 38,644, down 46 points while the broader Nifty50 was ruling at 11,664, down 13 points.
NEWS ALERT Rupee opens to new low of 70.92 per dollar
Markets at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 38,842.77 +152.67 +0.39
S&P BSE SENSEX 50 12,278.95 +53.88 +0.44
S&P BSE SENSEX Next 50 35,534.95 +38.34 +0.11
S&P BSE 100 12,050.73 +46.79 +0.39
S&P BSE Bharat 22 Index 3,757.53 +22.45 +0.60

(Source: BSE)
Oil dips on Sino-US trade conflict, but looming Iran sanctions support

Oil prices dipped on Friday amid concerns the trade war between the United States and China could intensify, although looming U.S. sanctions against Iran's oil exports prevented markets from falling further.
International Brent crude oil futures were at $77.70 per barrel, down 7 cents from their last close. US West Texas Intermediate (WTI) crude futures were down 3 cents at $70.22 a barrel. READ MORE

Commodity outlook by Tradebulls Securities

Gold failed at $1,220 on Tuesday, falling $13 from that level to close at $1,207. The sell-off was no surprise, with gold reaching one of our resistance levels. With record short position, gold needed to sustain above $1200 for short covering and we saw gold shooting till $1220 before retracing back on strong US GDP numbers. Now support level for Gold again comes at $1195. If gold does break below $1195, then we can again expect underperformance from gold till $1180. The news of US-Canada resuming trade negotiations also is proving to be a headwind for gold. Gold can still rally but needs dollar index to weaken. Unfortunately, we don’t see DXY weakening right now. Gold needs to sustain above Rs.30000 in MCX to give bulls upper hand, otherwise, bears will gain upper hand below Rs. 29980 in MCX and below $1195 in COMEX. READ MORE
Derivatives strategy on Tata Steel by HDFC Securities

Buy Tata Steel September 620 CALL @ Rs 18.8
Stop loss of Rs 14
Target Rs 28
Rationale: We have seen Long positions being rolled over to the September series in Tata Steel with Open Interest rising by 5% with Price moving up by 2%.
We have seen healthy rollover of 94% as against last three series average rollover of 76%
The stock price is trading above its important short-term moving averages Indicating a bullish trend for the short term
Momentum Indicators and Oscillators like RSI and MACD are also Indicating strength in the stock for the short to medium term. READ MORE

Nifty outlook by Prabhudas Lilladher for today

The daily trend of Nifty has turned down after 7 days, with a close below 11700, implying some sideways consolidation to see some profit booking but the bias still continues to be intact now with the near-term support of 11600-11400. The support for the day is seen at 38440/11600 while resistance is seen at 38900/11730. Bank Nifty would have a range of 27840-28320. Pharma index has once again got into the new round of momentum and we anticipate a target of 10500. ITC too looks very positive for long-term BUY. READ MORE
Today's picks: From Sun Pharma to HPCL, hot stocks to watch on Friday

Current price: Rs 253
Target price: Rs 247
Keep a stop at Rs 256 and go short. Add to the position between Rs 248 and Rs 249 Book profits at Rs 247

Sun Pharma
Current price: Rs 640
Target price: Rs 650
Keep a stop at Rs 635 and go long Add to the position between Rs 646 and Rs 648 Book profits at Rs 650 READ MORE

SGX Nifty

The SGX Nifty was at 11,713, down 0.20 per cent from the previous close.
Asian Markets

Asian shares came under renewed pressure on Friday after reports US President Donald Trump was preparing to step up a trade war with Beijing and ready to impose more tariffs on Chinese imports.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.2 per cent in early trade while Japan's Nikkei dropped 0.8 per cent.
Wall Street

The rally in US stocks came to a halt on Thursday on new concerns that the US-Chinese trade dispute will intensify, while economic turmoil in Argentina and Turkey sent those countries' currencies tumbling.
The Dow Jones Industrial Average fell 137.65 points, or 0.53 per cent, to 25,986.92, the S&P 500 lost 12.91 points, or 0.44 per cent, to 2,901.13 and the Nasdaq Composite dropped 21.32 points, or 0.26 per cent, to 8,088.36.
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