The domestic indices pared early morning gains to end over 1% lower on Tuesday.
The S&P BSE Sensex ended the day at 33,317, down 430 points, while the broader Nifty50 index settled at 10,249, down 110 points.
Banking shares were under pressure with Nifty PSU bank index hitting 52-week low of 2,917 on the National Stock Exchange (NSE). The index fell below its earlier low of 2,928 recorded in October 19, 2017 in intra-day trade.
Bank of India, Canara Bank, Union Bank of India, Allahabad Bank and Andhra Bank from the Nifty PSU Bank index touched their respective 52-week lows on the NSE in intra-day trade.
As a part of investigation into the PNB scam, ICICI Bank chief Chanda Kochhar and Axis Bank's Shikha Sharma have been summoned by an anti-fraud agency in the bank fraud case involving jeweller Nirav Modi and his partner and uncle Mehul Choksi. ICICI Bank is believed to have extended a loan of Rs 10 billion and Axis Bank Rs 7 billion last year to Gitanjali Gems of Choksi.
Asian share regained some ground on Tuesday after US President Donald Trump faced growing pressure from political allies to pull back from proposed steel and aluminum tariffs, easing investor worries about an imminent trade war.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5 per cent, snapping five straight days of losses, while Japan’s Nikkei jumped 1.8 per cent from a five-month low.
(with inputs from Reuters) Read More
Market Analysis for Tuesday, 6th March 2018 by Jayant Manglik, President, Religare Broking
The equity benchmark indices started the day on a strong note, following positive global cues. However, it failed to sustain at higher levels, as the Nifty index slipped from an intra-day high of 10,441 to end the session sharply lower at 10,249 levels, down 1.1%. The broader market indices ‘BSE- Midcap and Smallcap’ also registered a sharp fall, closing the session with losses of 0.8% and 1.3% respectively. Barring Consumer durables, which closed marginally higher, all the other sectoral indices closed on a negative note with Auto, Banks, Capital Goods, FMCG and IT being the major losers.
Market rundown by Vinod Nair, Head of Research, Geojit Financial Services:
Market gave up gains despite positive trade in global market. Consolidation continues led by broad selling across all sector. Market has broken yesterday’s low while banks continue to struggle due to NPA issue, higher bond yield & cost of funds. Investors are little nervous to start accumulating and are waiting for major triggers to get direction."
Nifty Bank index drags, falls for fifth straight session
Nifty Realty index falls over 2%
Markets at Close
The S&P BSE Sensex ended the day at 33,317, down 429 points, while the broader Nifty50 index settled at 10,249, down 109 points
MARKET STRATEGY Time to buy dividend yield stocks, says Centrum Broking
As markets are somewhat under the weather, and as we are in the middle of fourth quarter of the financial year, Q4FY18, it’s good time to look at “Dividend” yielding stocks. In the current economy, where bank fixed deposits offer interest rates to the tune of 6-7%, there are stocks which are giving dividend yields similar to that. Further, the interest on bank fixed deposits is taxable whereas the dividend from equity is completely exempt from tax (except when the dividend income in a financial year exceeds Rs 1 million). In that context, post-tax dividend yields of some of the stocks is way higher than the post-tax interest yield on bank fixed deposits. So, investors can consider some of the high dividend yield stocks to bring in regular inflows.
Nifty Auto slips over 1%, M&M, TVS Motors drag
Nifty PSU Bank index slips over 2%
Economy watch: Nomura on PMI numbers
The sudden dip in the services PMI back into contractionary territory is a negative surprise. The drop could be a data quirk – there have been many times in the past when the services PMI has fallen only to recover the following month. Or, it could reflect something more fundamental due to tighter lending standards (especially for trade financing) due to recent banking sector developments.
We currently expect the cyclical growth recovery to continue, including in services, and will wait for the March PMI data and other leading indicators for services to assess whether this is a blip or not
Asia's biggest currency gain in 20 years may be about to end
Asian currencies may be on the verge of a correction after completing the best year in at least two decades. The warning sign? Indonesia’s rupiah slumped to a two-year low last week.
The rupiah is seen as a bellwether of sorts for Asia given the high foreign ownership of the nation’s bonds. The currency is typically among the first in the region to be sold when sentiment sours, and this often heralds a broader decline among its peers. READ MORE
RBI set to give govt Rs 100 billion interim dividend, say sources
Government expects to receive Rs 100 billion ($1.5 billion) as interim dividend from the Reserve Bank of India this month, people with knowledge of the matter said. The amount has been calculated for the six month through Dec 31, the people said asking not to be identified as the information is private. Reserve Bank of India’s financial year runs from July to June READ MORE
A woman walks past the Reserve Bank of India (RBI) head office in Mumbai | Photo: Reuters
Dilip Buildcon nears record high on strong order inflow
Shares of Dilip Buildcon moved up by 7% to Rs 1,030 on the BSE in noon deal, extending its 2% gain in past three trading sessions, after winning projects worth of about Rs 75.36 billion from the National Highways Authority of India (NHAI). The stock is trading close to its record high of Rs 1,059 touched on December 27, 2017 in intra-day trade. READ MORE
Reliance Infrastructure wins DMRC arbitration award in Delhi High Court
Reliance Infrastructure won its case against the Delhi Metro Rail Corporation (DMRC) in the Delhi High Court on Tuesday. Anil Ambani-promoted Reliance Infrastructure said the court has upheld its arbitration award of Rs 29.50 billion as compensation along with interest to Delhi Airport Metro Express Private Limited (DAMEPL), a subsidiary of Reliance Infrastructure Limited (RInfra). READ MORE
India's apparel exports may dip in FY18 over GST, global challenges
If the 10-month data from April 2017 to January 2018 is anything to go by, India's apparel industry may post a rare decline in exports for the current fiscal 2017-18, let alone meeting the $20 billion target. READ MORE
Govt might revise licence fee of Bt cotton seed for 2018-19 crop season
After a gap of two years, the central government might revise the ‘trait value’ (licence fee) of genetically modified (Bt) cotton seed for the 2018-19 crop season. The current price is Rs 800 for a 450g packet; this might also be changed. Of this, Rs 49 is the ‘trait fee’ and this could be cut by Rs 20-25. The Centre sets both rates. READ MORE
Nomura on KNR Constructions
We continue to value the company on a sum of parts basis, with KNR’s EPC business at 18.0x FY20EPS of Rs 18.7 (in line with sector) together with Rs 47/sh value for BOT assets (at 1x BV) to arrive at a target price of Rs 383. Key risks are aggressive competition, payment issues in state projects and worsening working capital metrics.
Gitanjali Gems downfall continues; tanks 71% in three weeks
Gitanjali Gems is locked in lower circuit for the 13th straight trading day, down 5% at Rs 18.35, its new low on the BSE, after the media report suggested that the Central Bureau of Investigation (CBI) arrested Vice President of the company in Punjab National Bank (PNB) case. READ MORE
Prabhudas Lilladher on Aurobindo Pharma
Aurobindo received nine observations (Form 483) post USFDA visit of Unit‐IV in February 2018 and as management suggested, none of the observations were related to data‐integrity issues and were mostly on procedural aspects. We believe that ARBP will be able to address the issues raised in the observations as none of those are serious in nature and mostly are about GMP.
We expect Aurobindo to achieve resolutions on these observations in FY19E and is unlikely that any new approval of ANDAs to be blocked till resolution achieved. Maintain our 'BUY’ recommendation and retain target price at Rs 909
Equinomics maintains buy rating on Bayer Cropscience
The company’s strong presence in key crops of fruits and vegetables, cotton, and rice, along with a growing product portfolio, provides us comfort on the long-term growth trajectory. We expect Bayer to outperform industry growth given its strong product portfolio and line-up of new launches over the next few years.
At the current market price the stock trades at 36.7x its FY2018E EPS of Rs.104 and at 32.6x its FY2019E EPS of Rs.117. We reiterate a BUY on the stock with a target price of Rs.5,000 (which is 42.7x its FY2019E EPS of Rs.117). This leading global player in the agri space mostly trades at substantial premium in the Indian equity markets and we believe that it would continue to enjoy such high premium in future as well
SITI Networks hits over four-year low; stock falls 14%
SITI Networks hit an over four-year low of Rs 15.70, down 14% on the BSE in intra-day trade, on back of heavy volumes. The stock is trading at its lowest level since September 2013. READ MORE
Stock in News
Shares of Gitanjali Gems cracked another 5% in morning trade on bourses today after CBI said that the PNB fraud was going on since 2010. The CBI yesterday said the violation of norms for issuance of Letters of Undertaking (LoUs) to benefit billionaire jeweller Nirav Modi and his uncle Mehul Choksi had been going on since 2010. Reacting to the development, Gitanjali Gems stocvk slumped 5 per cent, to hit its fresh 52-week low of Rs 18.35 on BSE.
Sharekhan on Grasim
Grasim is on a strong growth trajectory, with ongoing restructuring through trimming down its
loss-making businesses (fertiliser and telecom) and expanding its profit-making divisions (viscose, chemical and cement). Better earningsgrowth would also significantly improve return ratios at a consolidated level and trigger re-rating of the stock.
Tactically, the inclusion of Grasim in Nifty 50 Index with effect from April 2, 2018, is also a re-rating trigger. We maintain our Buy recommendation with a revised price target of Rs. 1,480 (upward revision driven by lower share of Idea losses and strong demand in standalone VSF business).
NEWS IMPACT: Axis Bank trades flat; SFIO summons Shikha Sharma in PNB scam
NEWS IMPACT: ICICI Bank slips as SFIO summons Chanda Kochhar in PNB scam (Image source: NSE)
NEWS ALERT SFIO summons ICICI Bank's Kochhar and Axis Bank's Shikha Sharma in PNB case: TV Report
Closed-end funds gain traction: Since 2017, 47 such schemes launched
After two consecutive years of lull, the launch of closed-end funds has gained traction in the past year.
In 2017, 47 closed-end schemes were launched, which collectively mopped up Rs 175 billion. This is more than the combined amount collected in 2014, 2015, and 2016. This year so far, 11 funds have hit the market. READ MORE
Canara Bank, Bank of India, Andhra Bank hit 52-week lows
Shares of four state-owned banks - Canara Bank, Bank of India, Andhra Bank and Bank of Maharashtra – hit their respective 52-week lows on the National Stock Exchange (NSE) in otherwise firm market.
Five public sector banks (PSBs), including Canara Bank and Andhra Bank, are on the brink of being put under the Reserve Bank of India’s (RBI’s) prompt corrective action (PCA) plan. READ MORE
Offshore India funds, ETFs register $1.1 billion inflow in January
India-focused offshore funds, as well as Exchange Traded Funds (ETFs), witnessed a net inflow of $1.1 billion (over Rs 7,100 crore) in January, making it the highest inflow in 10 months, according to a report by Morningstar.
This comes following an inflow of $ 6.5 billion in these funds in 2017. READ MORE
Rural boost for two-wheeler companies; risk-reward favourable for Hero
Aided by a recovery in rural markets and a low base, the two-wheeler segment posted a 25 per cent-plus growth for the second month in a row. The growth was led by TVS Motor, which sold 36 per cent more two-wheelers in February over the year-ago period.
Sales of Hero MotoCorp, Bajaj Auto and Royal Enfield also grew at 20-25 per cent year-on-year. READ MORE
Dilip Buildcon stock gains traction: Rising orders point to better outlook
Shares of Dilip Buildcon have gained a lot of traction recently, rising over 18 per cent to nearly Rs 962 from the closing low of Rs 812 in the first fortnight of February, after consolidating since October last year. And, there could be more gains in store. READ MORE
Nifty 10,275 a critical support level; short-term trend is hard to judge
The market appears to be stuck inside a narrow trading zone and the background signals are a little negative. The Nifty has been unable to break out above 10,600. But it has managed to stay above a key support 10,275. Any move that closes outside this 10,300-10,600 zone is likely to result in a further three per cent swing, till either 10,000 or till 10,900. READ MORE
Bank of Baroda leaves MCLR unchanged for March.
RBI imposes Rs 3 crore penalty on Axis Bank and Rs 2 crore penalty on Indian Overseas Bank for non-compliance of NPA classification norms.
SBI Hong Kong confirms it has no exposure in PNB fraud case.
HDFC QIP closes today. It has issued 1.03 crore equity shares at Rs 1,825 per share.
Ramco Cements to acquire clinker grinding unit from Ramco Industries for Rs 17 crore.
IndusInd Bank invoked 4.3 percent Jaypee Infra stake pledged by Jaiprakash Associates.
Global Offshore defaults on unsecured demand loan from Axis Bank. The principal amount of Rs 11.26 crore plus interest is outstanding.
Somany Ceramics board approved plan to merge three units of promoter group with itself.
Arman Financial to raise Rs 50 crore through issue of 16.66 lakh compulsory convertible debentures at Rs 300 each to Saif Partners India.
JSW Energy acquires JSW Electric Vehicles.
Wanbury says U.S. FDA completes inspection of API facility with five observations.
(Source: IIFL report)
Eris Lifesciences trades higher for fifth straight trading day
Eris Lifesciences was up 3% at Rs 817 on the BSE in early morning trade, trading higher for the fifth straight trading day.
The stock of pharmaceutical company outperformed the market by gaining 12% from Rs 732 on February 26, 2018, as compared to 1.3% decline in the S&P BSE Sensex. It is trading close to its highest level at Rs 831, touched on November 30, 2017 in intra-day trade. READ MORE
Promoter pledging: Value of shares falls to 7 per cent in February
The value of shares pledged by promoters of the BSE-listed companies reached over Rs 2.54 trillion at February-end, a decline of 7 per cent compared to the previous month, according to exchange data. READ MORE
Donald Trump's trade war will only produce losers, warns auto industry
Carmakers and US auto dealers are using a similar refrain to push back against US President Donald Trump’s talk of a trade war: Everyone will suffer if the rhetoric keeps ratcheting up.
“Only losers” will emerge from the U. S. and European Union battling one another with tariffs, said Bernhard Mattes, the president of German auto-industry lobby VDA, which represents carmakers including Volkswagen AG and BMW AG. READ MORE
Turnaround in retail, strong y-o-y growth in other verticals (except BFS) and robust outlook in digital indicate FY2019E will be better compared to FY2018, reflecting in the stock price run-up of around 22% in the past six months. However, pick-up in the BFS segment remains the key trigger to double-digit revenue growth in FY2019/FY2020E.
The stock trades at 19x FY2020E earnings, factoring in the near-to-medium term positives. We maintain our Hold rating on the stock with a revised price target of Rs 3,200.
RBI imposes penalty of Rs 30 mn on Axis Bank and Rs 20 mn on IOB
RBI slapped Rs 30-million fine on Axis Bank for flouting NPA norms and Indian Overseas Bank was fined Rs 20 million for KYC breach
The Reserve Bank of India (RBI) has fined private lender Axis Bank for violating RBI’s regulations for assessment of Non-Performing Assets (NPAs). READ MORE
BSE Smallcap: PG Electroplast, Kirloskar Ferrous Industries among top gainers, Gitanjali top loser
BSE Midcap: Vakrangee, Jindal Steel, SAIL among top gainers
Metal stocks rebound (Image source: NSE)
Technical view on the Nifty
Technically, Nifty is taking a strong support at 10320-10270 levels. Any closing below the same may drag the Nifty towards 10200/10100. On the flip side, resistance lies at 10420/10500 range
(Source: Nirmal Bang)
Stocks in News
The Indian Energy Exchange is looking at launching a spot gas exchange for trading of natural gas produced by marginal fields.
Fortis Health: Singh family control drops to 0.14%
HDFC Bank hikes bulk deposits rates upto 175bps
Arvind plans apparel parks, textile unit in AP
DLF, HDIL - Land prices rise by 40% along proposed Delhi-Jaipur expressway
Ramco Cements to acquire clinker grinding unit from Ramco Industries for Rs 17 crore.
Somany Ceramics board approved plan to merge three units of promoter group with itself.
Sun Pharma details of the 3 observations have come out. The observations looks not serious. The plant should get clearance in due course
(Source: Nirmal Bang)
Market at open
At 9:17 am, the S&P BSE Sensex was trading at 33,947, up 200 points while the broader Nifty50 index was ruling at 10,416, up 60 points
Indian Energy Exchange to launch spot gas exchange for marginal fields
The Indian Energy Exchange (IEX), the country’s largest power trading platform, is looking at launching a spot gas exchange for trading of natural gas produced by marginal fields. READ MORE
Bonanza Portfolio on Berger Paints
With second largest company in decorative paint segment, favourable Indian demographics and government’s initiatives, capacity expansion plans, focus shifted to premium products and foray into the home decor business, we value Berger Paints at 47.00x FY19E EPS of Rs.6.50 to arrive at target price of Rs.304.00, an upside of ~22%
MARKET COMMENT: Phillip Capital
A recent statement by BoJ governor, Kuroda, that monetary policy tightening may happen in FY19 if inflation stays at 2%, has rattled the financial and currency markets. We believe that it is still a while away, as inflation may not touch 2% by FY19, wage growth is muted, and the new deputy governors will mostly be doves supporting easy policy to revive growth. While liquidity tightening is likely to persist/accelerate, rate hike is unlikely until 2020
MARKET COMMENT: G. Chokkalingam, founder and managing director, Equinomics Research
The government gave its in-principle approval to sell 26% stake sale in BEML. The government holds 54.03% stake in the firm. BEML is a major defence and rail products manufacturer. Looking at the government’s move to divest stake from a company with such strategic importance, we firmly believe that the government may eventually divest its indirect stake in Balmer Lawrie Company as the company is focused mainly on commercial ventures without any strategic importance to the country’s defence
Nomura on Coal India
On our FY19F adjusted earnings (adding back OB removal provisioning to EPS and EBITDA), the stock trades at 10.9x P/E (EPS: Rs 27.2) and 6.4x EV/EBITDA (11.5x P/E and 6.6x EV/EBITDA on reported earnings); on our FY18F dividend of Rs 18/share, the stock offers a yield of 7.3%.Maintain Neutral
Tata stocks may take a beating over Donald Trump's protectionism talk
The Tata group could be affected the most among Indian business houses in the eventuality of a trade war between the US and the European Union (EU).
The group, through companies such as Tata Steel, Tata Motors, Tata Chemicals and Tata Global Beverages, has manufacturing operations on both sides of the Atlantic Ocean. Any trade war and reciprocal tariffs on each others’ exports will hit revenue and profitability for the group plants in the US and the EU. READ MORE
US Commodity Futures Trading Commission likely to okay NSE for derivatives
The National Stock Exchange (NSE) is close to receiving US regulator Commodity Futures Trading Commission's (CFTC's) approval that will enable a class of hedge funds deal on its derivatives platform.
Sources privy to the development said the exchange has already completed the formalities pertaining to the process and is expecting a 'no-action' letter from CFTC in the next few weeks. READ MORE
Today's Picks: From Tech Mahindra to Tata Motors hot stocks to watch
Current price: Rs 631
Target price: Rs 640
Keep a stop at Rs 625 and go long.
Add to the position between Rs 637 and Rs 639. Book profits at Rs 640.
RBI to infuse Rs 1 trn into banking system via special auctions in March
The Reserve Bank of India (RBI) will infuse up to Rs 1 trillion into the banking system through special auctions this month to manage additional demand for liquidity as activities of banks and corporate entities pick pace before the close of the financial year. READ MORE
Oil prices extended gains on Tuesday for the fifth straight day, underpinned by robust demand forecasts and prospects for informal contacts sought by OPEC with US shale oil producers at a key industry meeting in Houston this week.
International benchmark Brent crude futures LCOc1 climbed to $65.73 per barrel, up 19 cents, or 0.29 per cent.
USWest Texas Intermediate (WTI) crude futures CLc1 advanced to $62.74 a barrel, up 17 cents, or 0.27 per cent.
The stock has been consolidating for quite some time at around 510 levels and now it has indicated a breakout above that range to signify strength and a positive bias has been maintained.
The RSI is on the rise so also is the MACD to provide more support to our view of a buy. The stock is anticipated to rise further and can scale upto 600 levels in the coming days. With the volume activity consistent and improving, we recommend a buy in this stock for an upside target of 600 keeping a stop loss of 515.
Nifty tanked during the last session and indicating some support at the 10,324 levels and we maintain that the level of 10,280 would be crucial which if broken can test the 10,120 mark in the coming days which is also where the 200 DMA lies. The support for the day is seen at 10,300 while the resistance is seen at 10,400. With some pullback recovery anticipated, we advise to maintain a cautious view.
The Dow Jones Industrial Average rose 336.7 points, or 1.37%, to 24,874.76, the S&P 500 gained 29.69 points, or 1.10%, to 2,720.94 and the Nasdaq Composite added 72.84 points, or 1%, to 7,330.71.
The SGX Nifty was at 10,392 levels, up 0.31% from the previous close.
Welcome to Business Standard's live blog on markets. Have a nice day!