Sensex tanks 554 pts, biggest one-day fall in 2019, despite RBI rate cut

Benchmark indices posted their biggest one-day loss in 2019, dragged down by financials and bank stocks even though the monetary policy committee (MPC) of the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (bps) to 5.75 per cent in the second bi-monthly monetary policy meet of the financial year 2019-20 (FY20).

Financials drop post DHFL crisis, liquidity issues, and trimmed GDP growth projections were among the major factors that dragged the markets lower on Thursday. READ THE FULL REPORT HERE

The benchmark S&P BSE Sensex slipped 554 points, or 1.38 per cent, to 39,530, with IndusInd Bank, Tata Steel, YES Bank, Larsen & Toubro, and State Bank of India were among the top losers. Only eight of the 30 BSE Sensex constituents ended the day in the green. The broader Nifty50 index tumbled 178 points, or 1.48 per cent, to 11,844.

All the Nifty sectoral indices ended Thursday's session with losses, led by Nifty PSU Bank, down 4.9 per cent, and followed by Nifty Private Bank, down 2.29 per cent.

In the broader market, the S&P BSE MidCap index tumbled 269 points, or 1.77 per cent, to 14,931, while the S&P BSE SmallCap index settled at 14,673, down 238 points, or 1.6 per cent.

Buzzing stocks

Shares of Dewan Housing Finance Corporation (DHFL) tanked 15.86 per cent to Rs 93.90, hitting an over five-year low on the BSE after rating agencies downgraded its commercial papers (CP), citing delays in debt servicing. The stock was trading at its lowest level since December 23, 2013 on the BSE. READ MORE

Shares of Eros International Media were hammered by heavy selling during the early morning deals on Thursday after ratings company CARE cut its long-term loan facilities ratings from 'BBB-' to 'D'. The stock was locked in the lower circuit of 20 per cent at Rs 53.10 per share on the BSE, which was also its lifetime low. READ MORE

Shares of GAIL (India) hit an over three-month low of Rs 316.3, down 11.77 per cent, on the BSE on the back of heavy volumes. The stock was quoting at its lowest level since February 26, 2019. READ MORE

4:04 PM IST COMPANY PRICE(rs) 52 WK LOW CHG(rs) CHG(%) BAYER CROP SCI. 3680.00 3601.00 -21.15 -0.57 CENTRAL BANK 24.75 24.50 -0.55 -2.17 DEWAN HSG. FIN. 93.90 91.50 -17.70 -15.86 ERIS LIFESCIENCE 510.10 500.00 4.15 0.82 FORTIS HEALTH. 121.90 121.90 -2.25 -1.81 » More on 52 Week Low

4:03 PM IST COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME DEWAN HSG. FIN. 93.90 -17.70 -15.86 6582147 HIMATSING. SEIDE 167.00 -26.65 -13.76 255664 RELIANCE INFRA. 84.95 -12.05 -12.42 3451026 GAIL (INDIA) 316.30 -42.20 -11.77 1681262 FDC 183.65 -19.75 -9.71 22610 » More on Top Losers

4:02 PM IST

4:01 PM IST

4:01 PM IST

3:33 PM IST The S&P BSE Sensex ended at 39,530, down 554 points while the broader Nifty50 index settled at 11,847, down 175 points.

3:13 PM IST "RBI carried out the third successive rate cut. Low inflation and subdued growth are the drivers of the move. Yet, the real concern is lack of transmission of rate cuts into effective lending rate. Liquidity conditions also remain tight for large part of the corporate sector. Effective transmission and adequate liquidity remain key challenges."   -- Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers

2:58 PM IST The Reserve Bank will issue a revised circular on bad loan recognition within the next three-four days, replacing the February 12 circular that was struck down by the apex court.   On April 2, the Supreme Court had declared as "ultra vires" the February 12 circular that mandated banks to label even a day's default as NPA. READ MORE

2:53 PM IST - Revises the outlook to positive from stable

2:52 PM IST

LIVE UPDATES

Stocks that hit 52-week low on S&P BSE Sensex

COMPANY PRICE(rs) 52 WK LOW CHG(rs) CHG(%)
BAYER CROP SCI. 3680.00 3601.00 -21.15 -0.57
CENTRAL BANK 24.75 24.50 -0.55 -2.17
DEWAN HSG. FIN. 93.90 91.50 -17.70 -15.86
ERIS LIFESCIENCE 510.10 500.00 4.15 0.82
FORTIS HEALTH. 121.90 121.90 -2.25 -1.81
» More on 52 Week Low

Top losers on BSE500

COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME
DEWAN HSG. FIN. 93.90 -17.70 -15.86 6582147
HIMATSING. SEIDE 167.00 -26.65 -13.76 255664
RELIANCE INFRA. 84.95 -12.05 -12.42 3451026
GAIL (INDIA) 316.30 -42.20 -11.77 1681262
FDC 183.65 -19.75 -9.71 22610
» More on Top Losers

Heatmap: S&P BSE Sensex


Nifty sectoral indices at close


Market at close


Market at close

The S&P BSE Sensex ended at 39,530, down 554 points while the broader Nifty50 index settled at 11,847, down 175 points.

Anand Rathi on RBI rate cut

"RBI carried out the third successive rate cut. Low inflation and subdued growth are the drivers of the move. Yet, the real concern is lack of transmission of rate cuts into effective lending rate. Liquidity conditions also remain tight for large part of the corporate sector. Effective transmission and adequate liquidity remain key challenges."
 
-- Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers

RBI to issue revised circular on NPA resolution norms in 3-4 days: Das

The Reserve Bank will issue a revised circular on bad loan recognition within the next three-four days, replacing the February 12 circular that was struck down by the apex court.
 
On April 2, the Supreme Court had declared as "ultra vires" the February 12 circular that mandated banks to label even a day's default as NPA. READ MORE

NEWS ALERT | Crisil reaffirms Tata Power's long-term loan rating at AA-

- Revises the outlook to positive from stable

NEWS ALERT | Bank Rate is revised downwards by 25 bps from 6.25% to 6.00% with immediate effect: RBI


Nifty PSU Bank index slips 5% post RBI policy outcome


NEWS ALERT |New cabinet committee readying plan for revival of MTNL, BSNL, reports CNBC TV18 quoting DoT official

- The revivial is being planned through proposed equity infusion of 4G spectrum.

Nifty Bank index slips over 2% on concerns over DHFL


Biggest losers of the day

Security LTP (₹) Change % Change
SYNDIBANK 33.75 -2.95 -8.04
 
GHCL 242.00 -21.50 -8.16
 
GAIL 320.70 -37.80 -10.54
 
RELINFRA 86.20 -10.80 -11.13
 
DHFL 93.25 -18.35 -16.44
 
 

COMMENT ON RBI POLICY :: Ajay Bodke, CEO and chief portfolio manager, Prabhudas Lilladher

NEWS ALERT | Jindal Stainless eyeing a revenue of Rs 200 cr in the e-rickshaw market, reports CNBC TV18

- Forecast highest demand in Uttar Pradesh

Market breadth in favour of decline as Sensex slips over 500 points


Nifty sectoral indices at this hour


Sensex sheds 500 pts after RBI cuts GDP growth forecast for FY20

Index Current Pt. Change % Change
 
S&P BSE SENSEX 39,581.67 -501.87 -1.25
 
S&P BSE SENSEX 50 12,360.27 -163.35 -1.30
 
S&P BSE SENSEX Next 50 32,589.54 -640.96 -1.93
 
S&P BSE 100 11,975.90 -168.60 -1.39
 
S&P BSE Bharat 22 Index 3,719.75 -79.75 -2.10
 
 

Repo rate at lowest level in 9 years. Key takeaways from RBI's policy meet

As expected, the six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) unanimously voted to lower the repo rate by 0.25 per cent in its three-day monetary policy meet, which ended on Thursday. The repo rate that stands at 5.75 per cent post the Thursday’s review is the lowest in nine years. This the first time in 2019 when all members of the MPC (Dr. Chetan Ghate, Dr. Pami Dua, Dr. Ravindra H. Dholakia, Dr. Michael Debabrata Patra, Dr. Viral V. Acharya and Shri Shaktikanta Das) unanimously decided to reduce the policy repo rate by 25 basis and change the stance of monetary policy from neutral to accommodative. READ MORE



YES Bank falls 3.8%


Nifty Bank slips under 31,000


COMMENT ON RBI POLICY :: R. K. Gurumurthy - Head Treasury, Lakshmi Vilas Bank

Bond prices have seen a broad based rally on the day, post policy.  With system liquidity close to 1 lac crore on the back of government spending and an OMO of 15k Cr to happen next week, the bond rally may have legs. One would however tread with caution as the budget is slated for early july 2019 where the fiscal road map would be key to bond-supply dynamics. Also, many expected direct measures/announcements on NBFC issues. RBI may wait and achieve that possibly with the recommendations of the working group on liquidity management

Bank, auto, realty stocks trade lower despite 25 bps repo rate cut by RBI

Shares of interest rate sensitive sectors such as automobiles, real estate, and banking were trading weak despite the monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Thursday reducing the repo rate by 25 basis points (bps) from 6 per cent to 5.75 per cent in the second bi-monthly monetary policy meet of the financial year 2019-20 (FY20). The policy stance was also changed to 'accommodative' from 'neutral'. READ MORE


Illustration by Binay Sinha

COMMENT ON RBI POLICY :: Arvind Chari, Head – Fixed Income & Alternatives , Quantum Advisors

That the Repo rate has been cut below 6% and the stance has changed to accommodative has happened only twice in the last 20 years; Once post the Lehman crisis, 2008-2009 and the other post the dot com, global slowdown in 2002-2003 period. So it is not a common occurrence in India. We should also note that growth levels and prospects was way lower during those times to justify Repo rates well below 6%.

Bond yields may have further room to drop as the markets will except further rate cuts especially another 25 bps in August to take the Repo rate to 5.5%. 10 year bond government bond yield at around 6.9%, is still attractively valued as more rate cuts gets priced in. We expect another rate cut in August but will caution against too much exuberance.

Market check


Market check


COMMENT ON RBI POLICY :: Naveen Kulkarni, head of research, Reliance Securities

While the rate cut of 25 basis points was in line with our expectation, concerns over growth and challenges regarding liquidity continue to linger. The market is not necessarily cheering the rate cut as it had already factored in and something more was expected

NEWS ALERT | DB Realty to increase stake in associate co MMPL to 40%: CNBC TV18

- Stake hike from current 33.3% after settlement of dispute

Syndicate Bank tumbles over 5%


IndusInd Bank slips over 5%


Lowering rates may not really lead to the push required for growth

With the monetary policy committee (MPC) already indicating in the last two policies that inflation would not be the only factor that would drive the decision on interest rate changes, it is not really a surprise that the Reserve Bank of India (RBI) has gone in for a rate cut, especially after rather disappointing numbers have come out on GDP (gross domestic product) growth in Q4 and unemployment rate. The extent of rate cut was debatable – and settling for 25 basis points (bps) would be something that the market has buffered in. The important question is whether or not this will work? READ MORE



DIL surges 52% in 8 days, nears all-time high on strong Q4 results

DIL shares rallied 10 per cent at Rs 954 in intra-day trade on the BSE in an otherwise weak market on Thursday. It was trading close to its all-time high level of Rs 1,125 touched January 10 this year.
 
In the past eight trading days, the stock has surged 52 per cent after the pharmaceutical company reported strong earnings for March quarter (Q4FY19). In comparison, the S&P BSE Sensex was up 1.5 per cent during the same period. READ MORE

Lowering rates may not really lead to the push required for growth

From the monetary standpoint, a rate cut helps companies and individuals that borrow as it lowers cost of loans provided banks pass it on. Banks would be in a position to lower lending rates in case they can lower the deposit rates. This may not always be feasible, given that growth in deposits has tended to lag that in credit, which had created a virtually permanent liquidity deficit.  READ MORE

Will send our suggestions to Finance Ministry on Budget 2019: Shaktikanta Das

- It's upto the govt to take those recommendations or not

RBI removes charges on RTGS/NEFT transactions; banks to pass on benefits

The Reserve Bank of India Thursday said it has done away with charges on fund transfers through RTGS and NEFT routes to boost digital transactions and asked banks to pass on the benefits to customers.
 
The Real Time Gross Settlement System (RTGS) is meant for large-value instantaneous fund transfers while the National Electronic Funds Transfer (NEFT) System is used for fund transfers up to Rs 2 lakh. READ MORE

Rate cut translation has been faster than in the past: RBI Guv

- Historically, it has taken 4-6 months for rate cut translation

Nifty Private Bank index slips over 1.2%


We need to address high interest, tax rates to boost exports: Piyush Goyal

Indian exporters and manufacturers are facing a cost disadvantage due to higher borrowing costs and tax rates, the trade minister said on Thursday, after economic growth slipped to a more than four-year low of 5.8% in the January-March quarter.
 
"We need to address the root cause of problems hurting the exporters and industry," said Commerce and Industry Minister Piyush Goyal, while speaking at the first meeting of exporters and government officials to discuss plans to promote exports after he took charge last week. READ MORE



COMMENT ON RBI POLICY :: Deepthi Mathew, economist, Geojit Financial Services

It was not a surprising move, as there was a lot of pressure on the RBI for a rate cut, with the  GDP growth registering one of the lowest rates in the last quarter of FY 2018-19. The market has even expected a rate cut by even 50 basis points. The Central Bank has also revised the CPI inflation to 3.0-3.1 percent from the earlier 2.9-3 percent for H1FY20.

The rising food prices are one of the major factors for the upward revisions in the CPI inflation rate. Food and beverages registered a growth rate of 1.38 percent in April, with vegetables prices registering a growth rate of 2.87 percent in April from a negative growth rate of 1.49 percent in March

Jalan Committee is working independently, will bring report shortly: Shatikanta Das

- Jalan committee is entrusted to formulate report on RBI's capital framework

COMMENT ON RBI POLICY :: Mustafa Nadeem, CEO, Epic Research

This is a welcome move for the market which was widely expected. The RBI is now keen on looking to improve growth trajectory since the ongoing liquidity crisis has hurt the cost of borrowings, and further stressed the system. The distress in rural demand and near-monsoon prediction has also put some stress since it can push inflation a bit higher. The trajectory stated by RBI is at 3 - 3.1%.

The accommodative stance is now focused on the liquidity and concerns over it. The cost of borrowing is now one concern that needs to be stressed and banks would /should likely to pass the benefit to end consumer. RBI has also put a stance further that it may take necessary actions that will help to keep financial stability.  

COMMENT ON RBI POLICY :: Garima Kapoor, Economist, Elara Capital

Drawing comfort from consistent softness in inflation trajectory, MPC cut policy repo rate for the third time this year to support benign growth conditions. A shift in the stance to accommodative is welcome as it will pave way for transmission to lending rates, which so far have been inadequate. We expect MPC to cut rates by an additional 50 bps through the year while continuing to fine tune liquidity support through a combination of OMO purchases, forex swap and CRR cut

Revised circular on debt resolution will be issued in 2-3 days: RBI Guv

Alert: Supreme Court had scrapped Feb 12 circular of the RBI pertaining to bad loan resolution

NEWS ALERT | RBI has decided to do away with charges levied on RTGS and NEFT transactions

- Banks will be required to pass this benefit to their customers.

RBI Governor on financial stability

Nifty sectoral indices post RBI rate cut


Markets fall further after RBI policy outcome


Nifty PSU Bank index extends losses despite RBI's 25 bps rate cut


Decided to set up committee to examine ATM charges: RBI

RBI has been decided to set up a Committee involving all stakeholders, under the chairmanship of CEO Indian Banks’ Association (IBA), to examine the entire gamut of ATM charges and fees. Committee to submit its recommendations within two months of its first meeting.

NEWS ALERT | Reverse repo rate under the LAF stands adjusted to 5.5%

- Marginal standing facility (MSF) rate and the Bank Rate to 6%

COMMENT ON RBI POLICY :: Dr. Joseph Thomas, Head Research- Emkay Wealth Management

The RBI policy announcement is exactly on the same lines as expected by most of the market participants. The repo rate cut of 0.25 % and the change of stance from neutral to accommodative is key to supporting the sagging economic growth. The projected growth has been lowered to 7%. The policy also has broad indications of more action on the liquidity front from the RBI in the coming days. This also confirms the commitment of the central bank to better transmission of the rate cut effects through liquidity

Risks around the baseline inflation trajectory emanate from six domestic and global factors: RBI

- uncertainties relating to the monsoon,

- unseasonal spikes in vegetable prices,

- international fuel prices and their pass-through to domestic prices,

- geo-political tensions,

- financial market volatility, and

- fiscal scenario

Nifty Auto index slips into the green after RBI rate cut


Broad-based pick-up in prices in several food items is expected: RBI

- This has imparted an upward bias to the near-term trajectory of food inflation.

NEWS ALERT | CPI inflation revised to 3.0-3.1% for H1FY20 and to 3.4-3.7% for H2FY20

- In April policy, CPI inflation was projected at 2.4%t for Q4:2018-19, 2.9-3.0% for H1:2019-20 and 3.5-3.8% for H2:2019-20

NEWS ALERT | H2FY20 GDP forecast revise to 7.2-7.5 per cent

-- In April, it was in the range of 7.3-7.4 per cent for H2

Nifty Bank index is trading 0.7 per cent lower


NEWS ALERT | H1FY20 GDP forecast revised to 6.4-6.7 per cent

- In April policy, the forecast was in the range of 6.8-7.1 per cent for H1

Reliance Infrastructure slips over 6%


NEWS ALERT | USFDA issues 9 observations for Natco Pharma's Kothur unit: CNBC TV18

Alert: The Kothur unit was inspected from May 30 to June 5

Buzzing | Inox gains 4% in trade


Anand Rathi Financial Services on Voltamp Transformers

Rating: Buy
 
Target Price: Rs 1,716
 
Share Price: Rs 1,017
 
On the higher order execution, Voltamp’s FY19 net sales grew 30% y/y to Rs 8.3bn. Its order book galloped 26% y/y to Rs 5bn. Plants are running at ~85% capacity; hence scope exists for higher utilisation, which we expect would lead to better margins. Thus, we believe earnings would clock a 23% CAGR over FY19-21. Voltamp’s efforts to strengthen its balance sheet and maintain financial discipline enable it to stand out amongst its peers. Thus, we retain our Buy rating and raise our target to Rs 1,716 (11x FY21e EV/EBITDA) earlier Rs 1,551.

GAIL hits three-month low; stock slips 10% on heavy volumes

Shares of GAIL (India) hit an over three-month low of Rs 323, down 10 per cent, in intra-day trade on the BSE on the back of heavy volumes. The stock was quoting at its lowest level since February 26, 2019. The trading volumes on the counter jumped over three-fold with a combined 14.7 million shares changing hands on the NSE and BSE till 10:50 am. READ MORE



JM Financial on Banking Sector

Media reports indicate that Dewan Housing Finance Limited (DHFL) has missed a payment of c.INR 11.5bn to bondholders, due on June 4, 2019. System-level borrowings for DHFL (as of Dec-18), stand at c.INR 1trn, with banks (loans + debt instruments) accounting for c.60-65% (SBI, Yes, BOB and BOI being the larger ones) of the overall exposure, in our view. Additionally, rating agencies CRISIL, ICRA and CARE have downgraded the credit rating for DHFL to D (from BBB- / A4+ earlier). As on Apr-19, AMCs had a total exposure of c.INR 53bn (5% of system exposure) to DHFL. Following the default, MFs took a haircut of 75% on NCDs and 100% on CPs of DHFL.

As per recent AMFI guidelines, for securities downgraded to ‘D’ rating, MFs have to take a haircut of 75% on senior-secured securities and 100% on subordinated/unsecured debt. In case DHFL makes good the default, as per SEBI guidelines, rating agencies will have to wait for a minimum period of 3 months (curing period) before upgrading the rating from ‘D’ level. We believe that risk aversion may persist in the banking space in the near term – especially on lending to stressed names in the HFC / NBFC segment and to real estate.

Sectoral trends on NSE at this hour


Market breadth in favour of decline


Market check


Market check


Sector Update :: Kotak Institutional Equities on consumer staples

4QFY19 review: weak prints with select exceptions

4QFY19 was a weak quarter for most names under our coverage. TTAN, ITC and paints names (on volume growth) were the only bright spots; HUVR’s UVG looked respectable by the time all companies in the sector reported. The narrative has moved on to stimulus-led revival, crude correction and monsoons. Premium for quality earnings yield is going up in tandem with falling bond yields and this would likely keep fair value, as also sector fundamentals, discussions irrelevant for some time, again!

Bharat Electronics slips over 3%


Trading ideas from Prabhudas Lilladher

FDC down 10% as stock trades ex-date for share buyback.

The board of directors at its meeting held on May 24, 2019 had approved the buyback of 3.43 million shares at a price of Rs 350 per equity share for an aggregate amount not exceeding Rs 120 crore on a proportionate basis through the "Tender Offer" route.

Hyderabad-based Penna Cement gets Sebi nod for Rs 1,550 crore IPO

Hyderabad-headquartered Penna Cement Industries Limited has received approval from Securities and Exchange Board of India (Sebi) to go ahead with its Rs 1,550-crore initial public offering (IPO).
 
The proposed IPO consists of a fresh issue of up to Rs 1,300 crore and an offer for sale of up to Rs 250 crore by company's promoter PR Cement Holdings Limited. READ MORE

Eros International tanks 20% on CARE ratings downgrade, hits record low

Shares of Eros International Media were hammered by heavy selling during the early morning deals on Thursday after ratings company CARE cut its long-term loan facilities ratings from 'BBB-' to 'D'. The stock was locked in the lower circuit of 20 per cent at Rs 53.10 per share on the BSE, which was also its lifetime low. The ratings agency cited delays or likely defaults in serving the debt availed from banks as reasons for the downgrade. READ MORE



Eveready Industries slips over 3% in trade


RBI could make it three cuts in a row on subdued growth, benign inflation

The six-member monetary policy committee led by Governor Shaktikanta Das will reduce the repurchase rate by 25 basis points to 5.75% on Thursday, say 31 of 43 economists surveyed by Bloomberg, while three are penciling in a 50 basis points cut. The RBI may also switch its stance to accommodative from neutral, given that expectations are growing for the Federal Reserve to slash rates this year. READ MORE

Nifty Pharma index is trading over 1% lower


Asian Paints gains 2%


SECTOR WATCH :: Emkay Global on cement

fter a series of downgrades, EBITDA estimates for most companies under our coverage universe increased in Q4FY19. Cement prices started to improve from mid-Feb'19 in South region (a 5-6% increase in Q4FY19). Other regions witnessed steep price hikes in Apr'19 and May'19 (Rs60/bag hike in North, East except Chhattisgarh, and West regions).

Our recent channel checks indicate discounts of Rs10-15/bag in few North region markets, sustenance of only Rs20-25/bag increase in East markets and discounts of Rs20-25/bag in few South/West region markets. We expect more correction in cement prices after improvements in non-trade demand in Jun'19 and pricing behavior of cement companies would remain the key monitorable. We believe that stocks could come under pressure due to this in the near term.
 
Preferred picks in the sector are UltraTech, ACC and JK Cement. We have EW stance on ACC/UltraTech/Shree/Ramco Cements; OW on JK Cement and UW position on Ambuja Cements/Grasim in sector EAP. Key risks could be sustenance of higher cement prices and a decline in energy/freight costs.

Eros Media plunges 20% on CARE ratings downgrade

- Rating company has cut the creditworthiness of Eros International Media citing delays or likely defaults in serving debt availed from banks. 

- It has lowered the long-term loan facilities to ‘D’ or default from BBB- 
 
 

Jefferies on Eicher Motors

Eicher articulated its vision to make RE a global brand over the next decade as it embarks on the 3rd phase of its journey. It will focus on 7 developed & 6 developing markets. In India, RE believes there is still significant potential for growth as premiumization continues. Greater focus on under-penetrated states & markets including addition of 350 smaller format studio stores in FY20E and distinct marketing strategies across different states will be key

POLICY PREVIEW :: RBI could make it three cuts in a row on subdued growth, benign inflation

The Reserve Bank of India is likely to cement its position as Asia’s most dovish central bank with a third straight interest-rate cut Thursday. The six-member monetary policy committee led by Governor Shaktikanta Das will reduce the repurchase rate by 25 basis points to 5.75% on Thursday, say 31 of 43 economists surveyed by Bloomberg, while three are penciling in a 50 basis points cut. The RBI may also switch its stance to accommodative from neutral, given that expectations are growing for the Federal Reserve to slash rates this year. READ MORE HERE

 

NEWS ALERT | SBI chairman, Aviation secy, Corp Affairs secy meet to finalise Jet Airways resolution: sources to BTVi

- Intends to take decision on Jet Airways Resolution By June 10

- Etihad Airways keen to have one more partner besides Hinduja Group
 

Balrampur Chini Mills tumbles over 4%


MARKET CHECK


Piramal Ent becomes the biggest loser among sliding pharma stocks, down over 3%


Hindalco slips in trade, falls over 1%


DHFL tanks 15% on credit rating downgrade; stock hits over 5-year low

Shares of Dewan Housing Finance Corporation (DHFL) tanked 15 per cent to Rs 95, hitting an over five-year low on the BSE in early morning trade after rating agencies downgraded its commercial papers (CP), citing delays in debt servicing. The stock was trading at its lowest level since December 23, 2013 on the BSE. READ MORE



SAIL is trading nearly 2% lower


Cement firms drag

COMPANY NAME LATEST HIGH LOW CHG
(rs)
CHG(%) VALUE
(rs CR)
VOLUME
INDIA CEMENTS 100.90 102.30 100.20 -1.00 -0.98 0.51 50451
AMBUJA CEM. 224.60 227.70 223.50 -2.40 -1.06 1.09 48598
PRISM JOHNSON 95.00 97.00 94.95 -1.65 -1.71 0.06 6062
CENTURY TEXTILES 1015.40 1026.65 1011.00 -8.90 -0.87 0.50 4936
SHIVA CEMENT 14.19 14.19 13.95 0.04 0.28 0.01 4417
UDAIPUR CEMENT 15.70 16.25 15.70 0.20 1.29 0.01 4101
ACC 1649.05 1685.00 1644.80 -8.95 -0.54 0.57 3446

Power Grid rises over 2%


Sensex slips 100 pts to trade below 40k | Top index contributors


ICICI Securities on Timken India

CMP: Rs 690 
 
Target: Rs 830 (up 20%) 
 
Target Period: 12 months
 
Going forward, we expect both its segments, domestic, exports to grow at a CAGR of 11%, 15.5%, in FY19-21E, respectively. We expect revenue, EBITDA, PAT to grow at 12.1%, 14.5%, 18.5%, respectively, in FY19-21E. We expect strong EBITDA growth as we estimated higher utilisation in FY20-21E. We value the company at 30x FY21E EPS to arrive at a target price of Rs 830. We maintain BUY recommendation on the stock.

IT stocks trade under pressure

COMPANY NAME LATEST HIGH LOW CHG
(rs)
CHG(%)
WIPRO 293.05 294.50 292.55 -0.85 -0.29
INFOSYS 736.00 737.45 734.70 1.30 0.18
TANLA SOLUTIONS 58.30 61.40 57.00 -0.35 -0.60
INFIBEAM AVENUES 45.30 46.00 45.15 -0.45 -0.98
SUBEX 6.94 6.94 6.90 0.09 1.31
FIRSTSOUR.SOLU. 52.80 54.25 52.75 -0.70 -1.31
TECH MAHINDRA 738.15 749.95 733.90 -10.40 -1.39
TCS 2175.00 2199.00 2165.25 -7.45 -0.34
HOV SERVICES 141.00 142.60 137.90 6.20 4.60
INTELLECT DESIGN 268.90 275.05 267.05 -0.60 -0.22

Power Grid Corp rises nearly 2%


Stocks that hit 52-week low on S&P BSE Sensex

COMPANY PRICE(rs) 52 WK LOW CHG(rs) CHG(%)
CENTRAL BANK 25.05 24.50 -0.25 -0.99
DEWAN HSG. FIN. 98.65 94.90 -12.95 -11.60
ERIS LIFESCIENCE 511.35 504.00 5.40 1.07
FORTIS HEALTH. 123.65 123.45 -0.50 -0.40
ISGEC HEAVY 457.00 457.00 -10.00 -2.14
» More on 52 Week Low

Most active stocks by volume

COMPANY PRICE(rs) CHG(rs) CHG(%) VOLUME
DEWAN HSG. FIN. 97.20 -14.40 -12.90 559011
YES BANK 147.65 -5.10 -3.34 556030
BANK OF BARODA 128.60 -4.00 -3.02 223771
RELIANCE POWER 6.87 -0.17 -2.41 220314
ZEE ENTERTAINMEN 335.10 -11.05 -3.19 132427
» More on Most Active Volume

Nifty Realty index is trading lower


Paint stocks trade mixed

COMPANY NAME LATEST HIGH LOW CHG
(rs)
CHG(%)
ASIAN PAINTS 1428.00 1444.45 1428.00 6.75 0.47
BERGER PAINTS 328.60 330.00 326.15 5.05 1.56
SHALIMAR PAINTS 86.00 87.25 86.00 -0.90 -1.04
KANSAI NEROLAC 457.80 457.85 456.10 -0.05 -0.01
AKZO NOBEL 1790.00 1790.00 1789.75 4.95 0.28

Escorts slips over 2%


IndusInd Bank slips 2%


Broader markets take deeper cuts


SBI slips nearly 2% on exposure to DHFL


Ashok Leyland slips over 1%


Momentum picks by ICICI Securities


Nifty PSU Bank index slips over 2%


Federal Bank trades over 3% lower


BSE Oil & gas index is trading in the red, dragged by GAIL

- Index down 167.23 points (1.06%) to trade at 15,575.07 levels



Berger Paints hovers around day's high, up over 1%


Indiabulls Housing Fin drops 4%


DHFL tanks over 12%


YES Bank slips over 4% in trade


GAIL (India) slides over 7% as pipeline tariff hike lower-than-expected


Sectoral trends on NSE


Top gainers and losers on S&P BSE Sensex


Market at open


Market at open


RBI Policy expectations | Motilal Oswal Group

Assessing recent developments with shareholders: Dhirendra Singh, CMD, Manpasand Bev informs exchanges

-  Says willing to step down from daily ops if required

Top gainers and losers on S&P BSE Sensex during Pre-open trade


DHFL plummets 10% in pre-opening


Market at pre-open


Market at pre-open


Rupee opening

Rupee opens weaker at 69.40/$ vs Tuesday's close of 69.25 against the US dollar

NEWS ALERT | Finance Ministry gives deadline to ministries for Budget 2019 allocation: BTVi

- Sets June 7 as the last date to raise demand for allocation

- Asks for "suitable justification" for raised demand

Nifty outlook | Prakashh Gaba

BS Primer | What are policy rates and how do they impact you?

Reserve Bank of India is scheduled to announces its bi-monthly policy review decisions later today.
 
Watch what are the key indicators that RBU considers and how do they impact you. WATCH HERE

NEWS ALERT | DHFL says will honour all obligations, reports CNBC TV18

- Says, ratings downgrade is a surprising move

- Speculative rating rationale is not adequate

NEWS ALERT | DHFL to meet bankers' consortium today: CNBC TV18

- May look to sell part of portfolio to banks for Rs 1,500 crore to make up for shortfall 

NEWS ALERT | DHFL gets RBI's approval for sale of Avanse Fin to Warburg Pincus: CNBC TV18

- Divestment of stake to be completed shortly

Sector Update :: Elara Capital on Capital Goods

After volume growth of 14% YoY in 9MFY19, the Electrical Equipment Industry (EEI) Index volume slowed to 12% YoY in 11MFY19, as per the Indian Electrical & Electronics Manufacturers' Association (IEEMA). This was because volume growth in January 2019 was a mere 1% and February was at 12%. Healthy growth continues to be driven by industries, such as energy meters, cables & wires, transformers and switchgears while transmission line towers & conductors fell.

In 11MFY19, cables & wires, the largest weightage in the EEI at 42%, jumped by 24%. Within cables & wires, power cables grew the fastest at 28%, driven by the rise in transmission & distribution (T&D), renewables and metro. Control cables grew 20%, led by railways and industrial activities. Energy meters (3%) volume grew the fastest at 31%, due to smart & prepaid meters tenders by Energy Efficiency Services (EESL).

Top picks: KEC International and KEI Industries
 
We believe the ongoing electrification program and T&D capex (Central & State) along with growth in infra & metros and pickup in industrial activities will continue to fuel growth for the EEI. We recommend Buy on CG Power & Solutions and KEC International, Accumulate on KEI Industries, ABB India & Siemens and Reduce on Havells India & V-Guard Industries.

Nifty outlook by HDFC Securities | Nagaraj Shetti – Senior Technical & Derivative Analyst, HDFC securities

The Nifty witnessed high volatility near all- time high on Tuesday and closed lower. A long negative candle was formed with upper shadow which signals an emergence of selling pressure near the all- time highs. Though, Nifty declined today still there is no indications of any significant reversal pattern as per smaller timeframe chart. The buying is still emerging from near the supports.
 
Nifty formed a small bull candle as per weekly timeframe chart. Formation of upper shadow around 12,040 levels in the last couple of weeks signals an emergence of selling pressure near the new highs. This pattern could possibly result in a minor weakness or a range movement for the next week. Immediate supports to be watched at 11,830.

Better realisations keep NMDC's prospects bright, volume challenges remain

The stock of NMDC (previously known as National Mineral Development Corporation) is up 15 per cent since its lows last month. Rising international prices, coupled with robust domestic demand for iron ore, is positive for the overall price trend. READ MORE

CII comes out with new index to assess quality of Central, state budgets

Industry body CII Wednesday said it has come out with a 'Fiscal Performance Index' to assess quality of budgets presented by the Centre and state governments.
 
"The composite Fiscal Performance Index (FPI) developed by CII is an innovative tool using multiple indicators to examine quality of Budgets at the Central and State levels," CII said in a statement. READ MORE

RBI needs to go for larger rate cut in June monetary policy: SBI report

The Reserve Bank needs to go for a larger rate cut, of more than 25 basis points, in its June monetary policy review to reverse the current economic slowdown, said an SBI research report.
 
The RBI had cut the key short-term lending rate (repo) by 25 basis points each in its last two policy reviews. The central bank is slated to announce its next bi-monthly policy decision on June 6. READ MORE

Stocks to watch today: DHFL, OMCs, rate-sensitive stocks and Tata Motors

Here's a list of companies whose shares are expected to trade actively in Thursday's session -
 
DHFL: Rating agencies CRISIL and Icra have assigned ‘D’ rating to DHFL’s commercial papers, anticipating a default, while CARE Ratings marked D, or default, the housing finance firm’s all long-term facilities, including public NCDs of Rs 29,000 crore and fixed deposits of Rs 8,940 crore.
 
Rate-sensitive stocks: Stocks of auto, financials and realty firms are likely to be in focus today as the RBI will release its monetary policy decision later in the day. The central bank is widely expected to go for a 25 basis point (bps) rate cut amid dismal GDP growth, consumption slowdown and liquidity crisis. READ MORE

Ircon's top agenda: Rs 13,000-crore rail projects to better coal traffic

State-run Ircon International has said it would complete four railway projects by March 2023 to boost coal evacuation from states like Odisha, Jharkhand and Chhattisgarh. These projects are worth over Rs 13,200 crore.
 
“Priority is being given to completion of these rail projects. Some of these projects for which we are representing the railways will be completed by 2020 itself. For some projects like Chhattisgarh East West Railway, we are in an advance stage of financial closure,” said S K Chaudhary, chairman and managing director of Ircon, a railway subsidiary. READ MORE

Looking to invest in MNC funds? Weigh risks properly before doing so

The MNC (multinational companies) category of thematic funds is currently in the spotlight as ICICI Prudential Mutual Fund has launched a new fund offer (NFO) for a fund in this category (NFO closes on June 11). Three funds—from Aditya Birla Sun Life, UTI and SBI—already exist in this category. Though the MNC category has been underperforming over the past year—the Nifty MNC Index has given a return of -6.21 per cent compared to the Nifty 50’s 13.11 per cent—these funds have sound long-term track records. READ MORE

Economists caution govt over fiscal stimulus, call for RBI rate cut

Arvind Panagariya, former NITI Aayog vice-chairman and professor of economics at Columbia University, said: “Any talk of fiscal stimulus is ill-advised. The government must stay the course on fiscal consolidation.”

Instead, he advised that the RBI must seriously consider knocking down the interest rate by 50 basis points. READ MORE

RBI policy review: Rate cut a certainty after weak GDP data, say Experts

Although an overwhelming majority of Reserve Bank of India (RBI) watchers were pencilling in a rate cut on June 6, it seems the 5.8 per cent growth in gross domestic product (GDP) for the fourth quarter has now solidified that view even among those who advised caution. Now there is a near consensus that at least a 25 basis points cut, if not 50, can be expected in the June policy. READ MORE

Interest rate cut in monetary policy unlikely to stimulate growth: Ind-Ra

India Ratings and Research (Ind-Ra) said on Wednesday that an interest rate cut by the Reserve Bank of India (RBI), which is almost certain in the second bi-monthly monetary policy statement for 2019-20, is unlikely to stimulate demand in the near-term due to absence of quick resonance in financial market. READ MORE

Tax officials may ask for 6% reduction in collection target in Budget 2019

Tax officials are likely to ask for a reduction up to 6 per cent in their collection target in the full Union Budget for 2019-20, compared to what was given in the interim Budget. That 6 per cent would translate into a reduction of Rs 1.5 trillion.
 
The new finance minister, Nirmala Sitharaman, has already expressed concern over revenue collection at interactions with officials. READ MORE

Tipping Point: With gold prices rising, should you increase exposure?

The central banks of Russia, China and several other major economies have purchased gold. Maintain a 10-15 per cent exposure to the yellow metal, in view of growing global uncertainty. READ MORE

No threat of global recession by trade war, says IMF chief Lagarde

Lagarde told Reuters in an interview, however, that such tariff threats were sapping business and market confidence, and could slow growth that is currently expected to improve next year. READ MORE

How to play the markets ahead of RBI's policy review

BSE Sensex: Although the index gave a close above the trend line resistance at 40,140, but could not give a confirmed breakout as per charts. As the Sensex moves up from the current levels, there can be some selling pressure / profit booking, charts suggest. READ MORE

Monetary Policy: RBI may cut rates, turn 'accommodative' after dismal GDP

Beginning a three day review on Tuesday, the RBI’s six-member monetary policy committee (MPC) can draw comfort from subdued inflation. Running at 2.92 % annually in April, it has stayed below the medium term target of 4% for the past nine months. READ MORE

EXPERT VIEW | Expectations from MPC meet by Parth Mehta, MD, Paradigm Realty

The GDP rate in Q4FY2019 nose-dived to 5.8% against 6.6% (in Q3FY2019) and 8.1% (IN Q4FY2018) resulting in overall GDP growth rate to trickle down to 6.6% (FY2019) primarily due to the domino effect of NBFC crisis. The consumption finance has taken a beating with NBFC’s struggling to raise money via Banks or Commercial papers thus accentuating the liquidity freeze. Private investments, too, were lackluster because of election putting breaks to investment cycles. Fiscal deficit, too, is at 3.4% of GDP giving thin headroom for any great fiscal impetus like lower corporate tax rates.

All the recent indicators have been dismal like Unemployment rate standing at 45 year high of 7.8% in urban and 5.3% in rural in FY18, auto industry undergoing 10th consecutive month of sales decline in 15.9% in April YOY worst in eight years. Only silver lining is 2.5% CPI and crude prices in desirable range which shall enable the MPC to undertake aggressive rate cuts to the tune of at least 50BPS to boost the investment cycle, consumer spending and revive the economy.

COMMENT :: Shishir Baijal, chairman & managing director, Knight Frank India

We hope that the MPC takes the decision to further reduce the REPO and reverse REPO rate by 50 BPS bringing it down to 5.5% and 5.25% respectively. This will help in liquidity injection in the economy and help revive the currently stalled credit cycle, increase broad-based investments, give a fillip to consumption expenditure, and the benefit will likely percolate from banks to the Non-Banking Financial Companies (NBFC). In turn, stalled sectors like real estate may be able to get better credit access.

Expectation from RBI Policy meeting | Elara Capital

We expect Monetary Policy Committee to cut repo rate by 50-75bp and CRR by 25-50bp in FY20E to address the growth slowdown while continuing to infuse liquidity through a mixture of open market bond purchases, cut in cash reserve ratio (CSR) and forex swaps.

ACC, Ambuja steadily losing market share on reluctance to diversify

The once formidable Holcim group’s ACC and Ambuja Cement are now caught in a market share-losing tailspin. Having failed to keep pace with the industry growth rate, the two cement companies have also shied away from infrastructure contracts, where demand is growing. READ MORE

India ETF adds most cash since 2015 as biz-friendly Modi's win lifts stocks

The $5.4 billion iShares MSCI India exchange-traded fund, ticker INDA, lured more than $182 million last week, the most in more than four years, data compiled by Bloomberg show. Investors also added the most since September to the $1.5 billion WisdomTree India Earnings Fund, or EPI, in the period through Friday. READ MORE

Technical calls by Religare Broking: Buy Voltas, Sell Biocon June Futures

Voltas
 
Recommendation: Buy
 
Last Close: Rs 598.60
 
Initiation range: Rs 589-594
 
Target: Rs 625
 
Stop loss: Rs 576
 
The stock has been consolidating in the broader market for last one year. Recently, it tested the support zone of 200 exponential moving average (EMA) on the daily chart and rebounded strongly thereafter. On June 3, it has completed the formation of a fresh buying pivot and likely to see fresh surge ahead. We advise initiating fresh longs position as per the levels. READ MORE

Nifty outlook and top trading ideas by HDFC Securities: Buy SBI, L&T

Utilize dips to go long
 
Nifty has formed bearish “Harami” candle-stick pattern on the daily charts dated 4th June 2019. This pattern could lead to some profit booking from the current levels. On the downside, however, 11,800 is a strong support and can be kept as a stop-loss in Nifty longs. A level of around 11,900 or level above 12,105, which ever reaches first should be utilized to initiate longs. Positional Resistance for Nifty is seen at 12,430. READ MORE
 

DHFL crisis: How the housing finance giant's fortunes took a downward turn

With CRISIL, Icra, and CARE downgrading the papers of Dewan Housing Finance (DHFL) to ‘D’, or default grade, India’s third-largest mortgage finance company is finding itself in an unenviable spot that it may not have imagined even a year ago. While CRISIL and Icra downgraded the short-term ratings, CARE also followed suit to downgrade DHFL's long-term ratings to D. READ MORE

SFIO probe shows IFIN's exposure to AAA borrowers dropped to zero by 2017

The Serious Fraud Investigation Office (SFIO) has found that IL&FS Financial Services (IFIN), a subsidiary of crisis-hit Infrastructure Leasing & Financial Services (IL&FS), did not have a single AAA borrower by 2017, even as its exposure to unrated borrowers rose to 25 per cent of the asset book. Since 2017, the company has not given the details with regard to the rating of the credit portfolio, categorisation of the exposure in infrastructure, promoter funding, real estate, corporate loans and others. READ MORE

Oil prices slide 4% on concerns of slowing demand, equity rally caps losses

Brent futures were down $1.77, or 2.9% at $60.20 a barrel by 10:54 a.m. EDT (1454 GMT), having briefly traded in positive territory early in the session. WTI was down $2.17, or 4%, at $51.31 a barrel.U.S. crude, gasoline and distillate stocks rose last week, the Energy Information Administration said on Wednesday. READ MORE

Market rally broad-based, riding on strength of govt mandate: Analysts

In May, the advance/decline ratio (ADR) remained a healthy 0.75. While more stocks declined than advanced last month, the ratio was remarkably better than any of the past 12 months, except March. READ MORE

Bharti Airtel stock unlikely to dial in gains despite reduction in debt

After raising Rs 25,000 crore from its rights issue, it announced that it will raise up to Rs 6,000 crore by listing its Africa subsidiary. This should help reduce current net debt levels of Rs 1.1 trillion and net debt-to-Ebidta of 4.2 times. READ MORE

DHFL assigned default rating; MFs with high exposure see 30-50% drop in NAV

Rating agencies on Wednesday categorised the Dewan Housing Finance Corporation (DHFL) instruments as ‘default’ a day after the company delayed its repayment obligations on non-convertible debentures (NCDs), potentially burning a deep hole in the portfolios of many mutual fund (MF) schemes. More than 160 MF schemes hold the firm’s debt papers. READ MORE

Bulk deal on NSE as on Tuesday

FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee check

Source: Bloomberg


Oil check

At 7:15 am, Brent Crude Futures were trading at $60.59 a barrel.

SGX Nifty

At 7:15 am, SGX Nifty was trading 30 points lower at 12,051 levels.

Asian Markets check

Source: Reuters


US Market check

Source: Reuters


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