Sensex ends 141 pts higher, Nifty settles at 10,397 levels; IT stocks rise

Photo: Shutterstock
The benchmark indices ended firm on Wednesday ahead of  the expiry of derivative contracts for February series on Thursday.

The S&P BSE Sensex ended at 33,845, up 141 points while the broader Nifty50 index settled at 10,397, up 37 points.

IT stocks ended 2.3% higher led by a over 4% rise in shares of HCL Technologies and Mindtree Ltd.

Stocks of pharmaceutical companies ended came under pressure, with the Nifty Pharma index settling nearly 2 per cent lower. Sun Pharma was the biggest loser of the day among the pharmaceutical companies, shedding 6.4% to settle at 523.90.

In global markets, Asian stocks gained on Wednesday, while the dollar advanced as traders near-term focus shifted to the minutes of the Federal Reserve’s last policy meeting for hints on the future pace of US monetary tightening. The Japanese Nikkei 225 ended at 21,971, up 0.2 per cent from the previous close.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent after slipping earlier in the session following the US market losses, which snapped a six-session winning streak..

(with wire inputs)


Top Sectoral loser: Nifty Pharma down nearly 2%

Top Sectoral gainer: Nifty IT up over 2%

Sectoral Trend

Sensex top losers and gainers

Market at close
The S&P BSE Sensex ended at 33,845, up 141 points while the broader Nifty50 index settled at 10,397 up 37 points.
MUST READ Gitanjali's Mehul Choksi and a London-Hong Kong cross connection

In 2010, Gitanjali promoter Mehul Choksi’s Hong Kong-based companies, Aston Luxury Group and Crown Aim Limited, invested in a London-based company called Alfred Terry Limited. Business Standard had reported earlier that Aston Luxury and Crown Aim were sharing the same office building and staff services with Aura Gems and Sunshine Gems. READ MORE

Mehul Choksi

News Watch PNB fraud: Centre opposes plea seeking independent probe in Nirav Modi case

The Centre on Wednesday opposed in the Supreme Court a PIL seeking an independent probe and deportation of billionaire jeweller Nirav Modi in the over Rs 110 billion PNB fraud case, saying an FIR has been lodged and a probe was on.
A bench comprising Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud said it would not say anything on the matter now and listed the PIL filed by lawyer Vineet Dhanda for further hearing on March 16. READ MORE
Market Check
S&P BSE Sensex 33,792.20 0.26%
Nifty 50 10,375.45 0.15%
S&P BSE 200 4,535.86 0.04%
Nifty 500 9,148.05 -0.03%
S&P BSE Mid-Cap 16,375.72 -0.27%
S&P BSE Small-Cap 17,782.35 -0.27%

News Watch South Korean government says will support 'normal' cryptocurrency trading
Bitcoin’s stunning rebound continued on Tuesday, with the world’s largest digital token extending February’s gains after South Korean regulators signaled they will actively support what they called “normal” cryptocurrency trading.
In a further shift from earlier rhetoric -- which hinted at an outright ban of cryptocurrency exchanges -- Choe Heungsik, governor of South Korea’s Financial Supervisory Service, told reporters he wants to see normalised trading of digital assets, and said the FSS is making efforts to do that. CLICK HERE FOR FULL STORY
Nomura on Motherson Sumi Systems (MSS)

We continue to like MSS as a play on premiumisation and value addition in cars for weight reduction, electronics and shift towards EVs. The ramp-up of new plants for SMP will be a key catalyst for the stock, in our view. We value the company using a 24x target P/E on March 2020F EPS (from Nov-17 earlier). Thus, we revise our target price to Rs 435 (Rs 442 previously). The stock trades at 27x/19.7x FY19/20F EPS. With strong 44% FY18-20F EPS CAGR, its outperformance should continue, in our view.
CLSA on Phoenix Mills

Phoenix reported strong 3Q earnings, up 46% YoY, as its core mall portfolio continued to do well. Lease income grew 10% YoY, driving 14% YoY Ebitda growth. Its lease income performance appears sustainable given underlying consumption growth continues to match the lease income increase. For the next leg of growth Phoenix is looking to tie-up sites under its mall development platform by 1HFY19 and scale-up its office portfolio. We maintain our BUY rating with a revised target price of Rs722 (previously (Rs597)

Centrum on Marksans Pharma (MPL)

We have revised our FY18E and FY19E EPS downwards by 3% and 19% respectively. We upgrade MPL to Buy from Hold rating, with a target price of Rs55 based on 18x March’20E EPS of Rs3.0, and a 45.3% upside from CMP. Key positive upsides would be additional ANDA approvals from US FDA and key negative would be regulatory issue with US FDA for its Goa facility
Kotak Securities on IT sector

Nasscom has guided for IT services exports growth of 7-9% in c/c for FY2019 as against 7% likely to be achieved in FY2018. Nasscom expects a better economic environment and deals signed by the industry to help elevate growth trajectory especially towards the second half. We believe that FY2019 growth will be better than FY2018 though not as steep as the Street is building in estimates. Our recommendation bias is towards companies that have low implied growth acceleration baked into stock prices; Infosys and Tech Mahindra fit the bill
Sectoral Trend

Strong volumes buoy Ambuja Cements; better cost controls boost performance

The stellar performance of Ambuja Cements in the December quarter has surprised the Street. The impressive show came mainly on the back of higher-than-expected cement volumes and better cost control measures. Ambuja follows the January-December financial year.
A growth of 17.4% in cement volumes pulled up revenues, which grew 19.4% year-on-year (y-o-y) to Rs 26.12 billion (up 14.5% sequentially). Realisations, however, remained subdued as expected. These were up 3% y-o-y at Rs 4,427 a tonne, but were 2.2% lower sequentially. READ MORE
ONGC extends gain on interim dividend plan

Oil and Natural Gas Corporation (ONGC) was trading 2% higher at Rs 191, extending its Tuesday’s 1.1% gain on the BSE, after the company announced that its board will meet next week to consider the second interim dividend.

ONGC on Monday after market hours said, a meeting of the board of directors of the Company is scheduled to be held on February 27, 2018, to consider, the declaration of 'Second Interim' Dividend, if any. READ MORE
Yes Bank gets committee nod for raising Rs 30 billion via Basel-III bonds

Private sector lender Yes Bank today said its capital-raising committee has approved issue of Rs 30 billion Basel III compliant tier 2 bonds. "The capital raising committee of the board of the bank...has approved the issue of rated, listed, non-convertible, redeemable, unsecured, Basel III compliant tier 2 bonds, in the nature of debentures, of Rs 1 million each aggregating to Rs 30 billion," Yes Bank said in a BSE filing. READ MORE
Market Check

S&P BSE Sensex 33,754.12 0.15%
Nifty 50 10,364.30 0.04%
S&P BSE 200 4,531.12 -0.06%
Nifty 500 9,138.65 -0.14%
S&P BSE Mid-Cap 16,354.15 -0.40%
S&P BSE Small-Cap 17,765.70 -0.37%

Idea Cellular fixes Rs 82.50 per share to raise Rs 35-bn through QIP

Idea Cellular today said its capital raising committee has approved an issue price of Rs 82.50 per share for sale of shares through a qualified institutional placement (QIP) to raise as much as Rs 35 billion.
"The capital raising committee of the company at its meeting today approved the closure of the issue for the QIP," Idea said in a regulatory filing. READ MORE
Sectoral Watch: Nifty Metal down 2%
TATA STEEL 636.55 655.55 635.30 -14.75 -2.26
VEDANTA 322.85 331.00 320.90 -5.85 -1.78
HINDALCO INDS. 240.15 250.80 238.75 -8.65 -3.48
JINDAL STEEL 244.10 254.80 244.00 -7.90 -3.13
COAL INDIA 310.20 311.75 305.15 -0.20 -0.06
JSW STEEL 298.40 308.15 298.15 -7.20 -2.36

PNB fraud, SBI result: Why good earning season may not boost Indian stocks

An otherwise strong earnings season for India’s companies is proving just not good enough for some, after a surprise loss by the country’s biggest bank renewed worries over credit quality.
State Bank of India’s December-quarter results spurred Motilal Oswal Securities Ltd. to pare its earnings per share estimate for NSE Nifty 50 Index firms by 3 per cent for the current fiscal and by 0.6 per cent for the financial year starting April 1. CLICK HERE FOR FULL STORY

News watch Rotomac Pens Rs 37 bn-fraud: CBI questions Vikram Kothari, son in Delhi

The CBI on Wednesday started questioning of Rotomac owner Vikram Kothari and his son, Rahul, at its headquarters in New Delhi in connection with alleged loan default of Rs 36.95 billion (Rs 3,695 crore) towards a consortium of seven nationalised banks, officials said. Earlier, Kothari was being questioned in Kanpur, where his company and residence is located, they said. READ MORE
Promoters of companies pledging at two-year low on market rally

A rally in equities and a gradual improvement in the macroeconomy have led to a sharp decline in shares pledged by promoters of companies. According to data compiled by Prime Database, the percentage of pledged shares across listed companies is 14%, the lowest since March 2015. During the December quarter alone, the share of pledging went down by 75 basis points, thanks to a 9% rally in the broader Sensex. READ MORE
Market tailwinds help Tata Motors arrest decline in key CV segments

Tata Motors, the country’s biggest commercial vehicle maker, has largely arrested the declining market share in most segments of the business. In fact, the company has increased its share in light commercial vehicles (LCV) while maintaining the share in medium and heavy commercial vehicles (M&HCV) or trucks. This has helped its domestic business turn profitable during the October-December quarter after five successive loss-making quarters.
The company reported a standalone profit of Rs 1.83 billion in third quarter of FY18 against losses of Rs 10.46 billion in the corresponding quarter of the previous year. READ MORE
BSE Sensex top gainers and losers

Sectoral Trend

Domestic insurers play contra as mutual funds lap up shares

Domestic insurers have largely remained on the sidelines even as mutual funds (MFs) have stepped up their purchase of shares in the past two years. MFs have bought shares worth Rs 1.8 trillion from January 2016 to date. Domestic institutional investors (DIIs) as a category, which mainly comprise MFs and insurance companies, have purchased less than Rs 1.3 trillion. This means insurers have remained net sellers during this time, with estimated sales of more than Rs 400 billion. READ MORE
Reliance Securities on Ahluwalia Contracts

We maintain our positive stance on Ahluwalia Contracts (ACIL) mainly on the back of: (1) asset light business model; (2) strong balance-sheet (D/E at 0.2x); (3) best-in-class return ratios; and (4) no equity commitment unlike several other construction companies. Further, with strong pedigree in projects execution and superior expertise, we expect ACIL to add more quality projects to its kitty, going forward. Marginally tweaking our earnings estimates for forward years and introducing our FY20 estimates, we reiterate our BUY rating on the stock with a revised Target Price of Rs405.

(Source: Reliance Securities report)
Sector watch: Prabhudas Lilladher on capital goods sector

Corporate believe awarding activity is likely to stay robust for next 2-3 quarters as government tries achieving various laid out targets. The fact that government is entering last 15 months of its current term in our view will expedite execution to show case their achievement. Most corporates continue to be confident of medium-term growth prospects, given the various initiatives taken by the government. Being on the cusp of a change, we prefer companies with sustainable competitive advantage and those which can deliver sustained earnings growth over the next few years. Our preferred picks are L&T, Sadbhav Engineering, Cummins India, Bharat Electronics and KEC International.

(Source: Prabhudas Lilladher report)
Sector watch: Prabhudas Lilladher on autos

Growth drivers like a second consecutive year of normal monsoon, government focus on infrastructure and a rural focused budget 2018-19 should help the sector report good volume growth going ahead. However, volume growth for Q4FY18 might be impacted by the high base, given the BS IV related pre-buying over Q4FY17, particularly for two/three-wheelers and M&HCVs. Also, it would be interesting to see if companies can pass on the recent input cost pressures. Our preferred picks are M&M and Maruti Suzuki. Also, we remain positive on Ashok Leyland and Motherson Sumi from a longer-term perspective.

(Source: Prabhudas Lilladher report)
Reliance Securities on Ambuja Cements

We moderately tone down our EBITDA estimates by 6% and 3% for CY18E and CY19E, respectively to factor in higher fuel prices and realisation pressure in the quarter, we continue to believe that Ambuja Cements (ACL) is on a firm footing to witness a traction, going forward on the back of likely recovery in realisation, sound demand environment and improvement in operational efficiencies.

(Source: Reliance Securities report)
Biocon gets 6 USFDA observations for Malaysia facility, shares down 2%

Biotechnology major Biocon on Wednesday said the US health regulator has made six observations after inspecting its Malaysia manufacturing facility. 'The USFDA has completed a pre-approval inspection of our manufacturing facility in Malaysia and issued a Form 483 with six observations," Biocon said in a regulatory filing. READ MORE
Ad revenues, digitisation to drive Sun TV's earnings in next 2 years

The Sun TV Network stock may have come off its all-time high of Rs 1,077 reached in January this year, but a revival in advertisement revenue growth, coupled with digitisation in Tamil Nadu, points to higher growth rates for the company in the next two years.
According to analysts, given the improving business outlook and promoters, including Kalanithi Maran, managing to clear legal issues, the stock correction could be a good entry point for investors. CLICK HERE FOR FULL STORY
Markets at noon

S&P BSE Sensex 33,819.53 0.34%
Nifty 50 10,385.30 0.24%
S&P BSE 200 4,541.12 0.16%
Nifty 500 9,157.90 0.07%
S&P BSE Mid-Cap 16,384.91 -0.21%
S&P BSE Small-Cap 17,814.62 -0.09%

Schneider Electric surges 12% after block deals

Shares of Schneider Electric Infrastructure surged 12% to Rs 115 on the BSE in intra-day trade after nearly three percent stake of the company changed hands through block deals. A combined 6.3 million shares representing 2.6% of total equity of the company were traded on the BSE and NSE. READ MORE
Pharma stocks trade weak

SUN PHARMA.INDS. 525.55 559.50 -33.95 -6.07 9435694
AUROBINDO PHARMA 565.05 574.80 -9.75 -1.70 1596066
CIPLA 596.30 603.45 -7.15 -1.18 400098
DIVI'S LAB. 1003.80 1013.90 -10.10 -1.00 234104
GLAXOSMI. PHARMA 2397.90 2419.05 -21.15 -0.87 2102
PIRAMAL ENTERP. 2620.00 2633.60 -13.60 -0.52 19781
LUPIN 814.45 815.80 -1.35 -0.17 477800
CADILA HEALTH. 409.00 409.05 -0.05 -0.01 256149

Hem Securities on JK Paper

With the strong demand outlook from paper sector & company's thrust towards organic & inorganic growth coupled with deleveraging its balance sheet , stock is all set to deliver strong performance going forward. Hence , we recommend “Buy” on the stock with price target of Rs 180(appreciation of almost 30%) for long-term investment.
Equirus on Sadbhav Engineering

Streamlining of verticals like mining and EPC, smooth HAM execution and WC improvements are inevitable re-rating triggers from current levels. After netting off our target BOT valuations of Rs 185/share, the EPC business is trading at ~1.9x/1.8x FY18E/FY19E P/B with RoEs of 14%/16% and 15.9x/12.7x FY18E/FY19E P/E at a 22%/18% 2/3-year EPS CAGR. Weak order inflows and lower execution are key downside risks to our estimates.
MARKET COMMENT: Amar Ambani, partnet and head of research at IIFL
Growing headwinds are likely to make Public Sector Banks (PSBs) more lending averse. The popular perception of their higher exposure to corporate frauds makes the deposit market wary of their association. Consequently, Private Banks may see a flurry of growth opportunities knocking their doors, more pronounced in the wholesale lending segment where PSBs seem to bear a blanket aversion below a certain rating threshold.

That’s precisely why private corporate lenders with strong underwriting process for corporate loans stand to benefit. More so, players with low or negligible baggage of stressed loans should be quick to latch on to the opportunities. Efficient and well-governed mid and small sized private banks are thus staring at enhanced growth prospects
MUST READ Nifty unlikely to deliver positive returns for two years
An interesting "top-down" approach to assessing the likely long-term return from the Nifty would be as follows. The economy is expected to grow at between 7 per cent to 7.5 per cent of GDP in real terms in 2018-19. Inflation is expected to run at about 5 per cent to 5.5 per cent. That means nominal GDP growth will be about 12.5 per cent. Equity earnings normally grow at a premium over nominal GDP growth CLICK HERE TO READ MORE
NEWS WATCH PNB fraud: Not all banks have SWIFT integrated with CBS, say bankers

The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is just one of the processes that sits outside the core banking system (CBS) in banks.
According to technology experts, depending on the bank, anything between 68 and 169 processes are from third-party providers and banks don’t integrate most of them. READ MORE
BSE sensex top gainers and losers

Oil marketing companies trade weak; Indian Oil hits 52-week low

Shares of state-owned oil marketing companies (OMC) were trading weak with the Indian Oil Corporation (IOCL) hitting a 52-week low of Rs 363.60 on the National Stock Exchange (NSE) in intra-day trade on Wednesday.
Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) were down 1% to 2%, as compared to 0.07% rise in the Nifty 50 index. READ MORE
Sectoral Trend

Fortis Healthcare: The faint-hearted can wait for more clarity

Fortis Healthcare caught the street’s attention after one of India’s prominent investors, Radhakishan Damani’s firm picked half a per cent stake in the healthcare services provider. On Tuesday, its share price surged five per cent, adding to the 40 per cent gains since its three-year low in early February. READ MORE
MARKET COMMENT: Pragnesh Jain, AVP Technical Research - Institutional Equities, Systematix Shares & Stocks
For the second consecutive day, Nifty closed below 100 Days SMA after more than 3 months on Tuesday. In line with expectations, it slipped after facing resistance near mentioned Resistance is at 10435 & started drifting lower. Support is seen at 10300 followed by 10250 levels from where intermediate bounce back is possible. However, further weakness likely if breaks below 10250 decisively. Resistance remains at 10435, above which it can extend up-to 10500-10520 zone from where it can drift lower again
Nifty unlikely to deliver positive returns for two years

An interesting "top-down" approach to assessing the likely long-term return from the Nifty would be as follows. The economy is expected to grow at between 7 per cent to 7.5 per cent of GDP in real terms in 2018-19. Inflation is expected to run at about 5 per cent to 5.5 per cent.
That means nominal GDP growth will be about 12.5 per cent. Equity earnings normally grow at a premium over nominal GDP growth. READ MORE
Commodity watch (Image source: Kedia Securities report)

Trading Idea: Turmeric (Image source: Kedia Securities report)

Edelweiss on Titagarh Wagons

Titagarh Wagons’ (TWL) Q3FY18 top line dipped 28% YoY due to falling order book (~INR19bn at Q2FY18 end versus ~Rs 29bn at Q2FY17 end). Execution of low-margin orders in overseas subsidiaries led to the company posting an Rs 387mn loss at the net level. Post Indian Railways’ (IR) wagon tendering, domestic business’ (TWL+Cimmco) order book has improved; in addition, upcoming opportunities in coaches, defence/ship building and propulsion system segments augur well for TWL. While overseas businesses may face near-term challenges due to dwindling order book and execution of legacy contracts, we believe the company’s domestic segment is primed for strong growth. Maintain ‘BUY’ with SOTP-based target price of Rs 154 as we roll over to FY20E.
IDBI Caital on Ambuja Cements

We forecast 12% CAGR in EBITDA over the next two calendar years. But at the current valuations, the EBITDA/t or the absolute EBITDA woefully falls short. Perhaps, with strong monsoon and affordable housing in Northern and Western markets could deliver. Should the speed be higher, we may revise our numbers. However, even after valuing CY19 at 12x EBITDA and ACC’s stake at the current market price, we see limited upside. On CY19, we conclude a target price of Rs260 with a hold recommendation
Bank stocks trade firm

DENA BANK 20.50 20.30 0.20 0.99 82670
UCO BANK 27.00 26.75 0.25 0.93 10543
KOTAK MAH. BANK 1054.25 1045.00 9.25 0.89 5639
J & K BANK 68.00 67.45 0.55 0.82 5775
DCB BANK 165.55 164.30 1.25 0.76 49405
FEDERAL BANK 92.40 91.70 0.70 0.76 67829
IDFC BANK 52.50 52.20 0.30 0.57 46314
ICICI BANK 318.55 317.65 0.90 0.28 106084
SOUTH IND.BANK 26.90 26.85 0.05 0.19 121599
KARNATAKA BANK 133.25 133.00 0.25 0.19 31399
CENTRAL BANK 66.45 66.35 0.10 0.15 2879
ORIENTAL BANK 106.35 106.25 0.10 0.09 126688
PUNJAB NATL.BANK 116.60 116.55 0.05 0.04 1817245

Top gainers: BSE 500

SCHNEIDER ELECT. 109.80 102.55 7.25 7.07 23500
L&T TECHNOLOGY 1352.50 1267.45 85.05 6.71 20274
EROS INTL.MEDIA 208.45 197.70 10.75 5.44 347624
NIIT TECH. 791.00 758.70 32.30 4.26 46623
MINDTREE 725.95 696.75 29.20 4.19 29595
MPHASIS 897.35 865.50 31.85 3.68 3554
PERSISTENT SYS 768.05 742.50 25.55 3.44 799
L & T INFOTECH 1461.75 1416.10 45.65 3.22 16150
TECH MAHINDRA 591.40 573.05 18.35 3.20 94018

Edelweiss on Adani Ports
Our recent visit to Adani Ports SEZ’s (APSEZ) flagship ‘Mundra’ port where we interacted with top management left us enthused about the company’s long-term growth prospects. Our confidence was bolstered by: 1) APSEZ’s potential to ramp up capacity 5x hereon along with highly efficient operations at par with global standards; 2) The preparedness to take on emerging competition (PSA terminal); and 3) Logistics business (ALL) that is set to be a significant growth driver. We believe APSEZ’s strong fundamentals will accelerate volume growth and cement strategic customer relations. Maintain ‘BUY’ with SoTP based TP of INR490
Sensex losers and gainers

Market Check

S&P BSE Sensex 33,806.10 0.30%
Nifty 50 10,369.80 0.09%
S&P BSE 200 4,542.57 0.19%
Nifty 500 9,148.55 -0.03%
S&P BSE Mid-Cap 16,417.26 -0.01%
S&P BSE Small-Cap 17,858.79 0.16%

Gitanjali Gems hits all-time low; stock tanks 56% in six trading days

Gitanjali Gems hits an all-time low of Rs 27.45, down 10% on the BSE with only sellers were seen on the counter. The stock is frozen maximum lower circuit of the day in past five straight trading sessions. It fallen below its earlier low of Rs 29.95 recorded in March 1, 2016 on BSE in intra-day trade. READ MORE
News Watch PNB scam: Nirav Modi lawyer sees no fraud in this case

Nirav Modi might have so far escaped legal consequences in the Rs 114-billion Punjab National Bank (PNB) fraud case, but the first high-profile arrest in connection with the episode took place on Tuesday when the Central Bureau of Investigation (CBI) arrested Vipul Ambani, president (finance) at Modi's Fire Star Diamond. According to officials quoted in a previous report, four other senior executives were also arrested by the agency in connection with two FIRs registered by it in the scam.
Further, the Income tax (I-T) department on Tuesday questioned PNB Managing Director and Chief Executive Officer Sunil Mehta in connection with the scam allegedly involving companies promoted by Nirav Modi and his uncle Mehul Choksi. CLICK HERE FOR TOP 10 DEVELOPMENTS
Goldman Sachs on India
From a macro perspective, India today is in the same position China was in 2000 with similar GDP per capita profiles and nearly identical share of total global output, although India lags China by internet penetration and online consumption. India is also young in its investment cycle and also in its demographic profile. More than 65 percent of India's population is under the age of 35. And despite contributing only 3 percent of global GDP, India holds 18 percent of the world's working population. 
We continue to see great potential for India, with opportunities to generate strong return on equity, particularly in sectors where India is trying to solve domestic challenges, like employment, education and healthcare for the 150 million of new workers that will come into the economy in the next 10 years.
Goldman Sachs on India
We have a bullish outlook for emerging markets more broadly, but India really stands out. For one, we've had a long-standing presence in India -- it is a country where favorable demographics are driving economic growth. The domestic consumer stands at an incredible inflection point as we expect GDP per capita to double in less than 10 years. While the country took a short-term economic hit from demonetization and GST in 2016, the country and companies are now transitioning to a phase where the economy can reap the gains of structural reforms.
More pain for PM Modi's debt plan as bonds find few takers, yields harden

The biggest holders of India’s sovereign debt are dumping them. State lenders have been selling Rs 4.7 billion ($73 million) of government bonds on average every day this year, hurt by deep portfolio losses, data from the Clearing Corp. of India show. Last year, their net daily inflows totaled Rs 368 million, and in 2016, the run rate was at Rs 3 billion a day. READ MORE
F&O watch
Textile, Cement, FMCG, Metals and Automobile sectors witnessed higher rollovers compared to same day of  previous expiry.
Realty, Fertilisers, Power, Infrastructure and Pharma sectors witnessed lower rollovers compared to same day of previous expiry.
Highest rollover in current expiry: Technology, Textile, Telecom, Metals and FMCG.
Lowest rollover in current expiry: Fertilisers, Media, Power, Capital_Goods and Realty.
(Source: Nirmalbang Retail Research)
BSE smallcap: Fedders Electric and Engineering Ltd, L&T Technology Services Ltd among top gainers, Gitanjali Gems Ltd. top loser

Eros International Media surges 11% on pact with RIL

Eros International Media has surged 11% to Rs 219 on the BSE in opening deal after the company announced that Reliance Industries (RIL) through a subsidiary, is acquiring 5% equity stake in the NYSE listed Eros International PLC (Eros). Eros is the promoter of Eros International Media.
“RIL, through a subsidiary, has agreed to subscribe to a 5% equity stake in NYSE listed Eros at a price of $15 per share, which represents an 18% premium to last closing price. READ MORE
BSE midcap: Larsen & Toubro Infotech Ltd, MPHASIS Ltd. among top gainers, Vakrangee Limited top loser

BSE Sensex top gainers and losers

Sectoral Trend

Market at open
At 9:17 am, the S&P BSE Sensex was trading at 33,816, up 112 points while the broader Nifty50 was ruling at 10,413, up 53 points.
Markets at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 33,902.98 +199.39 +0.59
S&P BSE SENSEX 50 10,881.13 +66.29 +0.61
S&P BSE SENSEX Next 50 33,908.56 +41.94 +0.12
S&P BSE 100 10,800.22 +57.56 +0.54
S&P BSE Bharat 22 Index 3,591.88 +16.77 +0.47

(Source: BSE)
F&O watch
Nifty rollovers stands at 30% compared to the average rollovers of 35% (last three series). Nifty future holds an OI of 29.16mn shares (INR 302bn) as compared to 36.1mn shares (INR 401bn) on D-2 of January expiry. One point worth noticing in FIIs are now net short in the index futures to the tune of Rs 42bn vs. Rs 89bn net long at the beginning of this expiry. 
Nifty futures roll levels were ~25-26bps (cost to long roller on screen levels). Around 18.6k Nifty contracts were rolled while ~15.7k contracts were added in the next month. Rollover activity saw pick up in FMCG (35%/18%), Cements (38%/21%) and Auto (36%/20%) on the D-2. Counters where rolls have picked up are Hindustan Unilever (43%/14%), Wipro (58%/29%) and IHFL (40%/15%).
(Source: Edelweiss Research)
Rollover stats
Market-wide rollovers at 35% are lower than the average rollovers of 37% (last three series). Market wide futures open interest (OI) stands at around Rs 1.68tn compared with an OI of around Rs 2tn on the D-2 of January expiry. 
With March being a lengthy expiry, participants (short rollers) are looking for higher levels to roll. Hence movement in roll levels will be crucial in the next two sessions as further weakness can become a cause of concern on the expiry day with a heavy open interest at the backdrop. 
(Source: Edelweiss Research)
INTERVIEW OF THE DAY: Within Asia, India is one of the markets we are overweight on: Raychaudhuri

Rising bond yields in the US and the Rs 114-billion fraud unearthed at Punjab National Bank have kept markets choppy over the past few weeks. Hong Kong-based Manishi Raychaudhuri, Asia Pacific Equity Strategist, BNP Paribas, tells Puneet Wadhwa that while the performance of global equity markets will be divergent, emerging markets (EMs) are likely to outperform the developed ones in 2018. CLICK HERE TO READ FULL INTERVIEW

PSBs lose Rs 1 trn; PNB scam erodes investor interest spurred by recap plan

Over the last five months, it seemed like the Nifty PSU (public sector undertaking) Bank Index was gaining, with increased investor interest on account of the government's recapitalisation plan.
However, after the Punjab National Bank (PNB) scam, the indication of possible system-wide fraud has caused the index to fall 22% from its January high, erasing Rs 1 trillion in value. READ MORE
Today's picks: From L&T to Ambuja Cements, hot stocks to watch on Wednesday

Nifty Current: 10,360 (fut: 10,340) Target: NA Stop-long positions at 10,270. Stop-short positions at 10,410. Big moves could go till 10,450, 10,220. A long 10,300p (38), short 10,200p (17) could gain 15-20 if the futures breaks below 10,270. READ MORE
Nirav Modi scam: Fraud-hit PNB loses Rs 110 billion in m-cap in 5 days

Punjab National Bank's market valuation has slumped by Rs 109 billion in five days, which is nearly equal to the massive Rs 113.84billion fraud at the company, even as the stock made a marginal recovery on Tuesday. The stock had dropped in the previous four trading sessions. In the past one week, the stock has lost nearly 28%. READ MORE
Top picks for the day

CMP: Rs 2944.75
Stop Loss: Rs 2850
Target: Rs 3100

In the month of January 2018, TCS broke out on the long-term monthly charts, with a significant rise in volumes. From the bottom of 2,494, TCS rose to 3,259 in the period from 18 December 2017 to 24 January 2018. At present, TCS is placed 10% lower from its all-time high of 3,259. Stock has completed the 50% retracement of the entire 30% upswing. Short term moving averages have been trading above long-term moving averages.

Nifty Outlook by HDFC Securities

Nifty is currently hovering around the strong support of upward sloping trend line, adjoining the bottoms of 6 December 2017, 18 December 2017 and 6 February 2018. 200 DMA for the Nifty is currently placed at 10,075, which is expected to act as a far Support. Oscillators like MACD, RSI and KST all are in a bearish mode on the short-term charts. Nifty is trading below its 20, 50 and 100 days EMA, which indicates a positional bearish trend. Resistance for the same would remain in the range of 10,600-10,640. To conclude, It would be advisable to initiate fresh shorts only below 10,300 in Nifty, for the downside target of 10,100, keeping SL at 10,450.
PNB fraud: Govt to chase down those who cheat banking system, says Jaitley

Finance Minister Arun Jaitley on Tuesday blamed senior officials of public sector banks (PSBs), lenders’ auditors and the regulator for financial fraud.
The management at public sector banks has been found lacking in checking delinquent customers, auditors have “looked the other way”, and the regulator has to ensure that stray cases of financial fraud don’t become the norm, he said. READ MORE
Arun Jaitley

Markets on Tuesday by Jayant Manglik, President, Religare Broking Ltd
The imposition of LTCG tax, higher fiscal deficit target in Union Budget FY19 and the recent alleged PNB scam has clearly impacted the sentiments on the domestic bourses, as evident from the fact that the indices have corrected sharply by around 8-9% from their record highs over the last three weeks. This weakness could continue for a few more sessions, led by uncertain global cues and muted domestic sentiments. However, any further correction at this juncture should be considered as a healthy buying opportunity for investors in quality companies with strong financials and bright outlook. Meanwhile traders should remain cautious and keep their positions hedged, as volatility is likely to remain high.
Markets on Tuesday

S&P BSE Sensex 33,703.59 -0.21%
Nifty 50 10,360.40 -0.17%
S&P BSE 200 4,534.06 -0.07%
Nifty 500 9,151.05 -0.10%
S&P BSE Mid-Cap 16,419.51 -0.06%
S&P BSE Small-Cap 17,831.04 -0.15%

Wall Street

The Dow and S&P 500 fell on Tuesday to snap a six-session winning streak as a sharp decline in Walmart weighed heavily.
SGX Nifty

SGX Nifty was trading at 10,396.50, up 68 points from the previous close.
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