MARKET WRAP: Sensex ends 250 pts lower as RBI maintains status quo on rates

A share broker monitors market fluctuation
The benchmark indices settled over 0.5 per cent lower on Wednesday even as the Reserve Bank of India (RBI) kept the repo rate and reverse repo rate unchanged at 6.50 per cent and 6.25 per cent respectively, in its bi-monthly monetary policy.

The S&P BSE Sensex ended at 35,884, down 250 points or 0.7 per cent, while the broader Nifty50 index settled at 10,783, down 87 points or 0.8 per cent.

Among sectors, the Nifty Metal index settled 3.7 per cent lower weighed by Jindal Steel and Power Hindalco and Tata Steel. Nifty Auto index, too, slipped 2.3 per cent due to a fall in Bharat Forge and Tata Motors. The Nifty Bank fell 0.6 per cent dragged down by IndusInd Bank, YES Bank and ICICI Bank.

In the broader market, both the S&P BSE MidCap index and the S&P BSE SmallCap index fell 1.2 per cent each to settle at 14,914 and 14,338 respectively.

RBI Monetary Policy

As was widely expected, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Wednesday kept the key repo rate unchanged at 6.50 per cent. The reverse repo rate also stands unchanged, at 6.25 per cent. The statutory liquidity ratio (SLR), meanwhile, was cut by 25 basis points to 19.25 per cent from January 1, 2019. The central bank also said that SLR would be reduced by 25 basis points every quarter until it reaches the 18 per cent level. It was RBI's fifth bi-monthly monetary policy meet of the financial year 2018-19. READ MORE

Global Markets

Asian stocks slid on Wednesday, dragged down by Wall Street’s tumble as sharp declines in long-term U.S. Treasury yields and resurgent trade concerns stoked investor worries about global economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.35 per cent. Hong Kong’s Hang Seng retreated 1.55 per cent and the Shanghai Composite Index dipped 0.2 per cent. Japan’s Nikkei dropped 0.8 per cent and South Korea’s KOSPI shed 0.5 per cent. Australian stocks lost 1 per cent, pressured by global losses.

(with Reuters input)

3:37 PM IST Sectoral trend on NSE

3:36 PM IST S&P BSE Sensex top gainers and losers

3:34 PM IST Market at close   The S&P BSE Sensex fell 250 points or 0.69 per cent to settle at 35,884 while NSE's Nifty50 index dropped 87 points to close at 10,783.

3:22 PM IST Financials trade weak post RBI policy; DHFL, Reliance Capital down over 5% Shares of financial stocks led by non-banking finance companies (NBFC), housing finance companies (HFCs) and micro-finance institutions (MFIs) have fallen by up to 7% after the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 6.50%. The committee maintained the calibrated tightening stance.   Reliance Capital, Dewan Housing Finance Corporation (DHFL), IDFC, Equitas Holdings, Can Fin Home Finance, Mahindra & Mahindra (M&M) Financial Services and Ujjivan Financial Services were down in the range of 5% to 7% on the BSE. In comparison, the S&P BSE Sensex was down 0.94% or 341 points at 35,793 at 02:53 pm. READ MORE

3:07 PM IST RBI Deputy Governor NS Vishwanathan: Benchmarking retail loans with external benchmark will bring more transparency

3:07 PM IST RBI Deputy Governor NS Vishwanathan: Retail and MSME loans will be linked to internal benchmark rate

3:06 PM IST RBI Deputy Governor Viral Acharya: Measures undertaken by RBI have eased stress in NBFC sector

3:04 PM IST RBI Deputy Governor Viral Acharya says have relaxed concentration limits on banks from 15% to 10%

3:02 PM IST RBI Guv: Fiscal slippage at state and central level will impact inflation outlook

2:59 PM IST RBI Guv: Need more data to assess full impact of MSP hike on CPI

2:56 PM IST RBI Guv: Crude oil prices impart downwards bias to inflation trajectory

2:54 PM IST RBI Guv: Fall in crudes prices may boost private consumption

LIVE UPDATES

Sectoral trend on NSE


S&P BSE Sensex top gainers and losers


Market at close
 
The S&P BSE Sensex fell 250 points or 0.69 per cent to settle at 35,884 while NSE's Nifty50 index dropped 87 points to close at 10,783.
Financials trade weak post RBI policy; DHFL, Reliance Capital down over 5%

Shares of financial stocks led by non-banking finance companies (NBFC), housing finance companies (HFCs) and micro-finance institutions (MFIs) have fallen by up to 7% after the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Wednesday kept the repo rate unchanged at 6.50%. The committee maintained the calibrated tightening stance.
 
Reliance Capital, Dewan Housing Finance Corporation (DHFL), IDFC, Equitas Holdings, Can Fin Home Finance, Mahindra & Mahindra (M&M) Financial Services and Ujjivan Financial Services were down in the range of 5% to 7% on the BSE. In comparison, the S&P BSE Sensex was down 0.94% or 341 points at 35,793 at 02:53 pm. READ MORE

RBI Deputy Governor NS Vishwanathan: Benchmarking retail loans with external benchmark will bring more transparency
RBI Deputy Governor NS Vishwanathan: Retail and MSME loans will be linked to internal benchmark rate
RBI Deputy Governor Viral Acharya: Measures undertaken by RBI have eased stress in NBFC sector
RBI Deputy Governor Viral Acharya says have relaxed concentration limits on banks from 15% to 10%
RBI Guv: Fiscal slippage at state and central level will impact inflation outlook
RBI Guv: Need more data to assess full impact of MSP hike on CPI
RBI Guv: Crude oil prices impart downwards bias to inflation trajectory
RBI Guv: Fall in crudes prices may boost private consumption
RBI POLICY STATEMENT

The MPC also noted that even as escalating trade tensions, tightening of global financial conditions and slowing down of global demand pose some downside risks to the domestic economy, the decline in oil prices in recent weeks, if sustained, will provide tailwinds. The acceleration in investment activity also bodes well for the medium-term growth potential of the economy. The time is apposite to further strengthen domestic macroeconomic fundamentals. In this context, fiscal discipline is critical to create space for and crowd in private investment activity.
RBI Guv: Retail Loans to be pegged to external benchmarks like repo rate w.e.f Apr1
RBI POLICY STATEMENT

While the decision on keeping the policy rate unchanged was unanimous, Dr. Ravindra H. Dholakia voted to change the stance to neutral. The MPC reiterates its commitment to achieving the medium-term target for headline inflation of 4 per cent on a durable basis. The minutes of the MPC’s meeting will be published by December 19, 2018.
RBI POLICY STATEMENT :: 7 factors that will impact inflation
 
First, inflation projections incorporate benign food prices based on the realised outcomes of food inflation in recent months. The prices of several food items are at unusually low levels and there is a risk of sudden reversal, especially of volatile perishable items. 
 
Second, available data suggest that the effect of revision in minimum support prices (MSPs) announced in July on prices has been subdued so far. However, uncertainty continues about the exact impact of MSP on inflation, going forward. 
 
Third, the medium-term outlook for crude oil prices is still uncertain due to global demand conditions, geo-political tensions and decision of OPEC which could impinge on supplies. 
 
Fourth, global financial markets continue to be volatile. 
 
Fifth, though households’ near-term inflation expectations have moderated in the latest round of the Reserve Bank’s survey, one-year ahead expectations remain elevated and unchanged. 
 
Sixth, fiscal slippages, if any, at the centre/state levels, will influence the inflation outlook, heighten market volatility and crowd out private investment. 
 
Seventh, the staggered impact of HRA revision by State Governments may push up headline inflation. While the MPC will look through the statistical impact of HRA revisions, it will be watchful of any second-round effects on inflation.



RBI Guv: PMI for manufacturing and Services has remained in expansion mode in November
RBI Guv: Flow bank credit has become broad-based
RBI Guv: Recent retreat in energy prices has led to decline in inflation
RBI POLICY IMPACT Bank, auto stocks slip (Source: NSE)



NEWS ALERT The next meeting of the MPC is scheduled from February 5 to 7, 2019
GDP growth projection (Source: RBI policy document)



Inflation projection (Source: RBI policy document)



RBI POLICY STATEMENT

Based on an overall assessment, GDP growth for 2018-19 has been projected at 7.4 per cent (7.2-7.3 per cent in H2) as in the October policy, and for H1:2019-20 at 7.5 per cent, with risks somewhat to the downside

RBI POLICY STATEMENT

In the fourth bi-monthly resolution of October 2018, CPI inflation was projected at 4.0 per cent in Q2:2018-19, 3.9-4.5 per cent in H2 and 4.8 per cent in Q1:2019-20, with risks somewhat to the upside.

Excluding the HRA impact, CPI inflation was projected at 3.7 per cent in Q2:2018-19, 3.8-4.5 per cent in H2 and 4.8 per cent in Q1:2019-20. The actual inflation outcome in Q2 at 3.9 per cent was marginally lower than the projection of 4.0 per cent. However, the October inflation print at 3.3 per cent turned out to be unexpectedly low.
NEWS ALERT SLR to go down by 25bps every quarter from January to March
Reverse Repo rate unchanged at 6.25%
MPC votes 5:1 to retain stance to 'Calibrated Tightening'
Oct-March CPI inflation target projected at 2.7%-3.2%
NEWS ALERT SLR cut by 25 bps; currently stands at 19.5%
NEWS ALERT FY19 GDP growth target maintained at 7.4%
NEWS ALERT MPC maintains stance to Calibrated Tightening
NEWS ALERT RBI leaves repo rate unchanged at 6.50%
Sebi to issue fresh notices to NSE, other entities in co-location case soon
 
The Securities and Exchange Board of India (Sebi) is in the process of issuing a fresh set of show-cause notices to the National Stock Exchange (NSE) and over a dozen other entities in the co-location (colo) case. According to people in the know, these notices are part of the adjudication proceedings, and seek an explanation from alleged wrongdoers as to why a monetary penalty should not be imposed on them. Earlier, Sebi had issued two sets of show-cause notices to the exchange and others. Read more
NEWS ALERT Novartis India Vice Chairman & MD, Milan Paleja to step down effective May 31, 2019
Market check
Index Current Pt. Change % Change
 
S&P BSE SENSEX 35,879.14 -255.17 -0.71
 
S&P BSE SENSEX 50 11,280.28 -89.20 -0.78
 
S&P BSE SENSEX Next 50 31,834.70 -460.84 -1.43
 
S&P BSE 100 11,028.90 -97.95 -0.88
 
S&P BSE Bharat 22 Index 3,380.84 -50.39 -1.47

Stocks near 52-week lows on BSE500

COMPANY LATEST 52 WK LOW PREV LOW PREV DATE VOLUME
RELIANCE CAPITAL 222.25 221.85 221.10 26-OCT-2018 637700
ASHOK LEYLAND 103.85 103.20 103.25 05-OCT-2018 2562052
MAHINDRA LIFE. 389.00 386.40 388.00 26-NOV-2018 784
NILKAMAL LTD 1506.55 1495.00 1491.95 11-OCT-2018 693
ELGI EQUIPMENT 226.80 225.00 226.80 28-NOV-2018 127
FORCE MOTORS 1665.00 1650.00 1650.00 25-OCT-2018 8409

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MARKET COMMENT :: Dhananjay Sinha of Emkay Global

We believe that the short-term shift in market views may reverse. The market is still above the fair value and the likelihood of global liquidity relapsing into a significant surplus is low. Our base-case for the Nifty stands at 10400-11000 over the next 12 months vs. 10900 currently.

Our sectoral position: Overweight on IT services, Pharmaceuticals, BFSI (primarily private banks) and Speciality Chemicals; Equal weight on Auto & Auto Ancillaries, Consumers, Oil & Gas and Metals & Mining; and Underweight on Capital Goods, Construction & Infra, Cement, Telecom, and Fertilizers & Agro Chem
Prabhudas Lilladher on S Chand & Co

S Chand is trading at 6.6x FY19E and 5.5x FY20E, in comparison to Navneet which is trading at 15.4x FY19E and 13.2x FY20E. We believe the current valuation gap should narrow given expected improvement in return ratios, margins and working capital cycle. Maintain BUY with a target price of Rs400
MARKET COMMENT :: Morgan Stanley

We think what matters is our economists forecasts of the growth differential between EM and US widening in EM's favour from here on out. What we have in mind is not a US recession as the base case for next year. If that were our case, we would not be forecasting modestupside for EM of around 5% from current levels and a flat S&P 500.

As GDP differential widens, we think S&P earnings growth decelerates from 23% in 2018 to 4% in 2019 while EM earnings growth accelerates from 3% to 7%. Hence, there is a leadership transition both in momentum in economic growth and in earnings growth. EM moves from last to first in terms of EPS growth while the US moves from first to last.

MSCI EM has already outperformed DM by 830 bps since the trough and outperformed S&P by 890 bps reversing around 35% to 40% of the prior underperformance. As this change in performance begins to be better understood we expect asset allocation flows to move towards EM in the December / January reallocation period.

The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in New York, New York January 20, 2015. REUTERS

Sudhir Valia's Sun Pharma stake helps ARC, realty business raise debt
 
Sudhir Valia, brother-in-law of Sun Pharmaceutical Industries’ founder Dilip Shanghvi, has got a helping hand in running his own businesses due to the family’s stake in India’s largest drug maker by sales. At least two of Valias' entities, Suraksha Realty and Suraksha Asset Reconstruction Company (ARC), have the backing of Lakshdeep Investments and Finance, which holds Valias' stake in Sun Pharma. Read more
Kotak Securities on real estate

Residential real estate sales in September 2018 held the momentum of preceding months with sales of 31.6 mn sq. ft, with declining launch activity (13.1 mn sq. ft in September 2018) helping steadily absorb the legacy build-up of inventories. Sales trends were stronger in the top three cities. Real estate prices remain in a narrow range with all-India prices at Rs5,381/sq. ft. However, a 37% yoy growth in sales for our coverage universe for 2QFY19 against 6% yoy growth for the industry reflects the continued impact of consolidation in a post-RERA regime.
Nomura on Sun Pharma

Management believes the transactions like sales through AML, and providing loans and advances is in the interest of Sun Pharma. However, management is willing to reconsider the structures and reverse the transactions in case it satisfies the minority shareholders. We find the comment incongruous as to how a transaction deemed good for SUNP by the promoter/CEO could be judged unacceptable to the other shareholders at large.
 
We value Sun Pharma based on 22.5x FY20F EPS to arrive at our unchanged target price of INR513/sh. We have a Neutral rating on the stock; we prefer Lupin (LPC IN), Dr Reddy’s (DRRD IN) and Glenmark (GNP IN) in the space, all rated Buy.
Sun Pharma hits lowest level since April 2013; falls 33% from 52-week high
 
Shares of Sun Pharmaceutical Industries continued to be under pressure, hitting an over five-year low of Rs 433 per share, down 2%. The stock has fallen 12% in three days, even though the company made a clarification related to corporate governance and whistleblower issues. Brokerages are concerned about an increase in unsecured loans and advances to employees, domestic super-stockist distribution structure, as well as lack of clarity on a whistle-blower case. Read more
Web Exclusive Chart Check: How to trade banking stocks ahead of RBI policy
 
The Nifty Bank is witnessing higher volatility ahead of Monetary Policy announcement by the Reserve Bank of India (RBI) later today. The current level on technical chart indicates upper band resistance around 26,860 – 26,920 levels. The index has gained strength over the past few sessions. The 100-day exponential average (DEA) is hovering around 26,050 levels, which the index has been honouring since the last four – six sessions. The outlook for Nifty Bank index remains stable, though the impact of monetary policy could adversely affect the rising trend for the December series, as the technical chart suggests. Read more
 

Policy Preview RBI likely to hold rates, keep liquidity easy to boost bank lending
 
Analysts expect India's central bank to support an economy that is losing momentum by leaving interest rates unchanged at a policy meeting on Wednesday when just over a month ago most of them had predicted a hike.
 
Having resisted any temptation to jack up rates in October when the rupee was sliding to a record low against the dollar, the Reserve Bank of India has been vindicated by the currency's subsequent recovery, and by waning inflationary pressures thanks to falling food and oil prices. READ MORE

Metal stocks under pressure; JSPL, SAIL, Prakash Industries hit 52-week low
 
Shares of metal companies, mainly the steelmakers, were under pressure with Jindal Steel & Power (JSPL), Steel Authority of India (SAIL) and Prakash Industries hitting their 52-week lows on concerns of a slowdown in demand. Nifty Metal index, the largest loser among sectoral indices, was down 3.4% at 3,124 points, as compared to 0.77% decline in the Nifty 50 index. The metal index erased its entire 2% gain recorded in past two trading days after US and Chinese leaders brokered a truce in their trade conflict. Read more
Prabhudas Lilladher on S Chand and Company
 
Rating: BUY 
CMP: Rs 221 
TARGET PRICE: Rs 400
 
In our recent interaction with S Chand Ltd (S Chand) management highlighted that 1) top-line growth guidance of 13-14% for FY19E remains intact 2) EBITDA margin expansion is on the cards as paper prices are locked in at just 4-5% increase over last sourcing cycle by preponing purchase contracts 3) working capital cycle is expected to ease out by 15-20 days on renegotiation of credit terms for certain best sellers and launch of dealer finance program 4) no incremental investment (Rs~1.43bn so far) in digital space is lined up with break-even expected in 3-4 years 5) collectively the company will have to shell out Rs~1-1.2bn in FY19E for Chetana’s acquisition and buying out balance 26% stake in Chhaya Prakashini 6) tax rate will be lower by 100-200bps in FY19E due to lower tax on few subsidiaries (<Rs2.5bn in revenues) and tax break in impending restructuring exercise.
Market check
Index Current Pt. Change % Change
 
S&P BSE SENSEX 35,909.58 -224.73 -0.62
 
S&P BSE SENSEX 50 11,291.28 -78.20 -0.69
 
S&P BSE SENSEX Next 50 31,850.69 -444.85 -1.38
 
S&P BSE 100 11,038.97 -87.88 -0.79
 
S&P BSE Bharat 22 Index 3,381.39 -49.84 -1.45

Auto stocks skid ahead of RBI policy outcome, Nifty Auto index slips 1.6%
 
Shares of rate sensitive automobile stocks were in focus on Wednesday ahead of the outcome of Reserve Bank of India's (RBI) bi-monthly monetary policy, with the Nifty Auto index falling as much as 1.64 per cent to 9061 levels so far in intra-day trade, weighed by shares of Bharat Forge, Tata Motors and Ashok Leyland. Tata Motors fell as much as 3.15 per cent to Rs 170 in intra-day trade on the BSE after S&P Global Ratings lowered the credit rating of Tata Motors and its luxury car unit Jaguar Land Rover Automotive Plc (JLR), citing weaker-than-expected profitability at JLR. Read more
Top losers in BSE500
COMPANY PRICE() CHG() CHG(%) VOLUME
BHARAT FORGE 532.00 -49.05 -8.44 393467
JINDAL STEEL 147.10 -9.55 -6.10 727874
RELIANCE INFRA. 309.85 -19.45 -5.91 301042
IFB INDS. 830.00 -48.10 -5.48 2083
INFIBEAM AVENUES 47.70 -2.75 -5.45 997007
» More on Top Losers
HUL presents good opportunity to GSK shareholders; to add value in long run
 
From the share-swap ratio angle, the Hindustan Unilever (HUL)-Glaxosmithkline Consumer Healthcare (GSKCH) deal augurs well for the latter’s shareholders. However, given the premium valuations of HUL, which may cap near-term returns from the stock, should GSKCH’s shareholders stay invested? Analysts believe that growth prospects for HUL opens up a good opportunity for GSKCH’s shareholders and they should check in to the country’s largest FMCG player. Read more
Nifty Metal index is trading over 3% lower weighed by Jindal Steel and Power


Bharat Forge hits 52-week low; stock falls 9%
 
Shares of Bharat Forge slipped 9.5% to Rs 526, also hit its 52-week low on the BSE on back of heavy volumes, on concerns of near-term demand challenges persisting for domestic commercial vehicles (CV) due to emerging concerns on tighter liquidity. The stock of a leading auto ancillary metal forging company was trading at its lowest level since May 24, 2017. Sales of medium and heavy commercial vehicles (MHCV) for most of the manufacturers fell sharply in November after advancing at a brisk pace for over a year, reflecting a sluggishness in the overall economy. Read more
S&P BSE Sensex top gainers and losers


NEWS ALERT :: PMI data

The seasonally adjusted Nikkei India Services Business Activity Index rose from 52.2 in October to 53.7 in November, signalling a solid upturn in output that was the strongest since July. Firms highlighted greater client numbers, favourable market conditions and sales growth as factors boosting activity. 
 
Not only did new business increase for the ninth month in a row, but also to the joint-strongest extent in over two years. Underlying data indicated that the upturn reflected robust demand in the domestic market, as newly-launched export business data showed a renewed decline in new work from abroad.

(Source: Nikkei PMI release)
Motilal Oswal Financial Services on Titan Company
 
Jewelry business growth prospects remain robust, and now Watches and even Eyewear segments have raised their hands to contribute to growth. We believe that premium valuations are fully deserved for a business that has perhaps the best revenue growth potential in the large cap FMCG/retail space (20 per cent CAGR in Jewelry business over the next five years) and also operating leverage-led margins support. We maintain our Buy rating on the stock with a target price of Rs 1,105, based on 47x Dec’20 EPS (nearly 10 per cent premium to three-year average P/E). 
NEWS ALERT India Nikkei/IHS Markit November services PMI at 53.7 vs 52.2 (MoM) 
Equirus Securities on IndusInd Bank
 
Rating: Overweight
Price: Rs 1,661
Target Price: Rs 1960
 
As non-food credit growth has inched up to 15.6% yoy, IIB is set to be a key beneficiary given that NBFCs and select private peers likely go slow on incremental business growth. With banks like HDFC Bank, ICICI Bank, Axis Bank and SBIN likely to have good penetration in most large corporate accounts, we believe IndusInd Bank can further increase its wallet share in such accounts despite having 75bps-100bps higher MCLR rates. Maintain LONG.
S&P cuts Tata Motors credit rating on weak JLR profit, stock falls 3%
 
Shares of Tata Motors fell as much as 3.15 per cent to Rs 170.15 apiece in early trade on BSE after S&P Global Ratings lowered the credit rating of Tata Motors and its luxury car unit Jaguar Land Rover Automotive Plc (JLR), citing weaker-than-expected profitability at JLR. On Tuesday, S&P cut its rating on Tata Motors’ issuer credit and senior unsecured notes to ‘BB-’ from ‘BB’. Read more
Market check
Index Current Pt. Change % Change
 
S&P BSE SENSEX 35,897.76 -236.55 -0.65
 
S&P BSE SENSEX 50 11,293.27 -76.21 -0.67
 
S&P BSE SENSEX Next 50 32,021.61 -273.93 -0.85
 
S&P BSE 100 11,049.05 -77.80 -0.70
 
S&P BSE Bharat 22 Index 3,416.88 -14.35 -0.42

Demerger impact Kesoram Industries slides 8% on profit booking as co hives off tyre biz

Shares of Kesoram Industries dropped as much as 7.8 per cent to Rs 89.60 in the early morning trade on BSE as the investors booked profit after the company said it will spin off its tyre business into a separate entity, which will then become a publicly-traded company. READ MORE
Sebi panel bats for direct listing of Indian firms on foreign exchanges

In a move that could open up a fresh source of funding for domestic unicorns and new-age companies, an expert committee constituted by the Securities and Exchange Board of India (Sebi) has endorsed direct listing of Indian firms on foreign exchanges. The panel has also proposed measures to encourage global companies to list in India. READ MORE

Interview of the Day Focus to be back on fundamentals once poll season is over: Krishna Sanghavi

Expectations around the 2019 election outcome may influence sentiment and cause volatility, says Krishna Sanghavi, head (equity), Canara Robeco Mutual Fund. In an interview with Ashley Coutinho, he says the next six months may offer select buying opportunities in mid- and small-cap stocks that have corrected significantly over the past few months. READ MORE
Krishna Sanghavi

Edelweiss on Havells India

Despite limited near-term triggers, we remain enthused by Havells focus on its strategic business unit structure. With management strategy on track, we are keeping tabs on initiatives pertaining to distribution penetration and innovative products. Maintain ‘BUY’ with target price of Rs 835 (48x FY20E EPS).
Antique Stock Broking on banks

from the medium-term perspective, we are still wary of the rising gap between growth opportunities and capacity in the banking system, i.e. banks with growth capital are low on deposits and vice versa. We continue to maintain our positive stance on banks with strong liability franchise and maintain HDFC Bank, SBI and ICICI Bank as our top picks. Among smaller names, we like KVB and Federal Bank.
Edelweiss on Nestle

India’s consumer space has few examples wherein a brand with negligible market share has successfully gained 20% plus share in a segment dominated by a player with 50% plus share. For example, new entrant Patanjali, which had gained decent traction across many categories initially, is now facing a big slowdown.

On the other hand, we have ITC’s Sunfeast Yippee! noodles in the instant noodle market. It gained sizeable share aided by a ban on market leader Maggi three years ago; Yippee! now has ~22% market share versus Maggi’s ~60%. Thus, in our view, with Nestle losing the battle for GSK’s HFD portfolio, its scale up journey in the segment has been delayed by a few more years.


MARKET COMMENT :: ICICI Securities

Over the past four weeks, Nifty midcap index has retraced just 23.6% of earlier one week’s sharp up move of 10%. The shallow nature of price retracement along with elongated time consolidation signifies a robust price structure. Also, the daily stochastic oscillator recorded a bullish crossover and is now pointing upward. This makes us believe the index will outperform benchmarks in coming weeks. Hence, any dip from here on should be used to accumulate quality stocks
Tata Motors slips in early trade


Sectoral trend on NSE


Opening losers in BSE Sensex


Market at open
 
At 9:15 AM, the S&P BSE Sensex was trading at 35,927, down 207 points, while the broader Nifty50 was ruling at 10,806, down 63 points.
Bond Alert: 10-year Govt Bond Yield opens at 7.56% vs previous close of 7.57%
Market at pre-open
Index Current Pt. Change % Change
 
S&P BSE SENSEX 36,219.58 +85.27 +0.24
 
S&P BSE SENSEX 50 11,393.30 +23.82 +0.21
 
S&P BSE SENSEX Next 50 32,253.72 -41.82 -0.13
 
S&P BSE 100 11,144.54 +17.69 +0.16
 
S&P BSE Bharat 22 Index 3,434.20 +2.97 +0.09

Rupee opening
 
Rupee opens at 70.64/$ vs its previous close of 70.49 against the US dollar.
Today's picks
 
Wipro
Current price: Rs 335
Target price: Rs 341
 
Keep a stop at Rs 332 and go long. Add to the position between Rs 339 and Rs 340. Book profits at Rs 341.
 
Grasim
Current price: Rs 845
Target price: Rs 830
 
Keep a stop at Rs 855 and go short. Add to the position between Rs 832 and Rs 836. Book profits at Rs 830. Read more
Nifty outlook by Prabhudas Lilladher
 
The market continues to consolidate at these levels, however daily & weekly trend in Nifty is positive while Bank Nifty has got its daily trend turned down. The support for the day is seen at 35850/10800 while resistance is seen at 36400/10930. Bank Nifty would have a range of 26400-26980.market once again is clueless at this level, all eyes on RBI Policy. IT Sector has once again got in a new round of momentum, Wipro, Hexaware, TCS etc look promising. Read more
Buy Hero MotoCorp for a target of Rs 3,250, SL of Rs 2,910: HDFC Securities
 
Target: Rs 3,250
Stop Loss: Rs 2,910
 
The stock is placed around 26% lower than its all-time high of 4092, registered in Sep 2017. The stock price has nicely recovered from its recent low of 2648. The stock price has given bullish breakout from the inverse head and shoulder on the daily charts. The stock is maintaining higher tops and higher bottoms on the daily charts. Moving average and Oscillator setup seems bullish on the charts.
 
Considering the technical evidence discussed above, we recommend buying the stock at CMP for the target of 3250, keeping stop loss at 2910 on closing basis. Read more
Kesoram Industries, Tata Motors and Lupin among top stocks to track
 
BK Birla group firm Kesoram Industries said Tuesday it will spin off its tyre business into a separate entity, which will then become a publicly traded company.

S&P Global Ratings on Tuesday lowered the credit rating of Tata Motors and its luxury car unit Jaguar Land Rover Automotive Plc (JLR), citing weaker-than-expected profitability at JLR. S&P cut its rating on Tata Motors’ issuer credit and senior unsecured notes to ‘BB-’ from ‘BB’. The ratings remain on negative watch, reflecting the uncertainties for JLR from a fast-approaching Brexit deadline, Reuters reported quoting S&P as saying. Click here to read more
 
Policy Preview RBI likely to hold rates, keep liquidity easy to boost bank lending

Analysts expect India's central bank to support an economy that is losing momentum by leaving interest rates unchanged at a policy meeting on Wednesday when just over a month ago most of them had predicted a hike.
 
Having resisted any temptation to jack up rates in October when the rupee was sliding to a record low against the dollar, the Reserve Bank of India has been vindicated by the currency's subsequent recovery, and by waning inflationary pressures thanks to falling food and oil prices. READ MORE
Reserve Bank of India | File Photo

Rupee slips further 3 paise to 70.49 against dollar as crude pursue climb

The rupee slipped further by 3 paise to close at 70.49 against the US dollar Tuesday due to increased demand for the American currency from importers and firming global crude oil prices. Forex traders said the dollar strengthening against major global currencies overseas and losses in the domestic equity market also weighed on the local unit. READ MORE

Oil check
 
Crude oil prices were lower amid fears that demand would stall on the back of the trade war between the United States and China. US crude futures were down 0.8 per cent at $52.82 per barrel.
SGX Nifty

At 8.30 am, SGX Nifty is trading 52 points, or 0.48 per cent lower at 10,860.50-levels.
Asian stocks fall as declining US yields, trade woes knock sentiment
 
Asian stocks fell on Wednesday, dragged by Wall Street’s tumble as sharp declines in long-term US Treasury yields and resurgent trade concerns stoked investor worries about global economic growth.
 
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.6 per cent. Australian stocks lost 1.3 per cent after Australia's third quarter growth data fell short of expectations. The Australian dollar was down 0.5 per cent at $0.7307. Japan's Nikkei fell 1.15 per cent and South Korea's KOSPI shed 1 per cent.
 
Wall Street check
 
Wall Street tumbled more than 3 per cent on Tuesday, led lower by bank and industrial shares, as the US bond market sent unsettling signs about economic growth and investors worried anew about global trade.
 
The Dow Jones Industrial Average fell 799.36 points, or 3.1 per cent, to 25,027.07, the S&P 500 lost 90.31 points, or 3.24 per cent, to 2,700.06 and the Nasdaq Composite dropped 283.09 points, or 3.8 per cent, to 7,158.43.
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