MARKET WRAP: Sensex cracks 468 pts, Nifty at 11,438 as rupee hits fresh low

The benchmark indices settled over 1 per cent lower on Monday as the rupee slipped to a new lifetime low of 72.67 per dollar in intra-day trade.

The S&P BSE Sensex ended at 37,922, down 468 points while the broader Nifty50 index settled at 11,438, down 151 points.

In the broader markets, the S&P BSE MidCap index fell 1.7 per cent, while the S&P BSE SmallCap index ended down 1.1 per cent.

Among stocks, Reliance Industries (RIL) and ITC ended over 1.5 per cent lower.

Rupee hits fresh low

The rupee also extended weakness to hit 72.50 per dollar for the first time ever earlier in the day. The domestic currency fell to a fresh record low of Rs 72.67 against the greenback, contributing to the weak sentiment.

The Indian rupee and bonds sunk after the current-account deficit widened to the most in five years, as an emerging-market rout raises investor scrutiny of countries with worsening balance of payments.

Global Markets

A sell-off in Chinese shares pulled Asian equities to a 14-month trough on Monday as investors braced for a potentially damaging escalation in the Sino-US tariff row after US President Donald Trump raised the stakes in the dispute with Beijing.

MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 0.9 per cent to the lowest since July 2017, extending losses from last week when it dropped 3.5 per cent for its worst weekly showing since mid-March.

Chinese shares were battered with the blue-chip index off 1.4 per cent while Shanghai’s SSE Composite stumbled 1.2 per cent. Hong Kong’s Hang Seng index slipped 1.3 per cent.

Japan’s Nikkei, which had opened lower, ended 0.3 per cent higher after revised second-quarter gross domestic product data showed the world’s third-biggest economy grew at its fastest pace since 2016.

(with Reuters inputs)


MARKET COMMENT Jayant Manglik, president, Religare Broking

Markets started the week on feeble note and lost over a percent. Weak global cues combined with widening trade deficit, due to continuous fall in rupee against the dollar, dampened the sentiment. Selling pressure was witnessed across the board and almost all the sectoral indices ended lower. 
The fall was evident, citing deteriorating local cues and continuous threat of trade war escalation. We feel it's a normal correction, considering the rise that we had in Nifty in recent past. Indications are in the favour of further decline ahead and we expect Nifty to find support around 11,300. Trades have no option but to align their position accordingly and avoid naked longs
Nifty sectoral losers of the day

BSE Sensex: Sun Pharma, M&M, Vedanta among top losers of the day

Market at close

The S&P BSE Sensex ended at 37,922, down 468 points while the broader Nifty50 index settled at 11,438, down 151 points.
Manappuram Finance, Century Plyboards, Gujarat Gas hit 52-week lows

Shares of Manappuram Finance, Century Plyboards, Greenply Industries, Gujarat Gas and Shankara Building Products were among 34 stocks from the S&P BSE Smallcap index hitting their respective 52-week lows on Monday. READ MORE

India becomes latest epicenter of nervousness sweeping emerging markets

India became the latest epicenter of the nervousness sweeping emerging markets as better-than-forecast current-account data failed to stem the slide in the rupee. The currency sank as much as 1.3 per cent, while stocks dropped the most since August and bonds tumbled to the lowest level since 2014. READ MORE

Gold glitters on jewellers' buying; weak rupee

Gold overcame a sluggish global trend by surging Rs 200 to trade at Rs 31,550 per 10 gram on Monday on increased buying by local jewellers. Furthermore, a depreciating rupee which plunged to a fresh record low of 72.67 against the dollar, making imports costlier, fuelled the upmove, traders said. READ MORE

Investors should tender in case PSUs buyback shares, say analysts

After a bumper listing of Rites Limited – a state-owned railway consultancy firm – that has seen the stock rise 26 per cent since its debut on July 2, 2018, the government seems to have changed its mind in favour of buying back shares of public sector enterprises (PSEs) given the volatile markets. READ MORE
Top losers in BSE Sensex:

SUN PHARMA.INDS. 642.75 664.20 -21.45 -3.23
VEDANTA 223.75 231.05 -7.30 -3.16
M & M 946.10 973.45 -27.35 -2.81
INDUSIND BANK 1826.30 1876.25 -49.95 -2.66
ST BK OF INDIA 285.40 291.85 -6.45 -2.21

COMMENT UBS on economic growth

While we expect the Indian economy to see a cyclical recovery in FY19, the pick-up in growth is likely front loaded. We expect real GDP growth to slow to 7.0-7.3% YoY in H2FY19 from 8.2% YoY in June 2018 quarter. We believe headwinds, including tighter financial conditions, high oil prices, slowing global growth and a still muted private corporate capex recovery on legacy issues of high debt and weakened balance sheets will weigh on India's growth momentum. For the full year, we forecast real GDP growth to pick up from 6.7%YoY in FY18 to 7.5% YoY in FY19/20.
Rupee plunges to record low as current account deficit widens to 5-yr high

The Indian rupee and bonds sunk after the current-account deficit widened to the most in five years, as an emerging-market rout raises investor scrutiny of countries with worsening balance of payments. READ MORE
Market Check

Index Current Pt. Change % Change
S&P BSE SENSEX 38,074.58 -315.24 -0.82
S&P BSE SENSEX 50 12,022.92 -106.19 -0.88
S&P BSE SENSEX Next 50 34,464.47 -462.30 -1.32
S&P BSE 100 11,782.54 -112.15 -0.94
S&P BSE Bharat 22 Index 3,639.98 -18.35 -0.50

(Source: BSE)
ICICI Lombard hits highest level since listing; up 14% in September

Shares of ICICI Lombard General Insurance Company were up 4% to Rs 909 per share on the BSE in intra-day trade, extending its 10% rally in past five trading days in an otherwise weak market. The stock of the country’s largest private sector general insurer was trading at its highest level since listing on September 28, 2017. READ MORE

Statsguru: Rupee slid as RBI didn't intervene as much as was expected

The rupee’s 11 per cent year-to-date decline against the US dollar should not come as a surprise, considering that other emerging market currencies (Chart 1) are also witnessing a rout. Investors are particularly harsh on countries that run current account deficits (CAD). READ MORE

MARKET COMMENT Gaurang Somaiya, currency analyst, Motilal Oswal Securities

Rupee fell to fresh record low levels against the US dollar as panic buying by importers triggered further sell-off in the currency. Escalating trade war concerns between US and China is a still a hanging sword after US President announced that he has tariffs ready to go on $267 billion worth of Chinese imports in addition to the $200 billion of its goods already facing the risk of duties.

After imposing import tariff on Chinese goods, US president now has an eye on Japan with whom he looks to take trade issues. Asian as well as the emerging currencies are under pressure and rupee is feeling the contagion effect of the same. On the domestic front, data showed India’s CAD widened to $15.8billion in April-June this year as against $15 billion in the same quarter of 2017-18.

We expect that rupee could continue to feel the pain in the short term and intervention could restrict the pace but bias for the rupee is still negative. Rupee, in the short term, could test levels of 73.20 and break above 72.15 could negate the view for short term weakness
Devangshu Datta FMCG may not be best bet

The rupee's fall has wider consequences than the negative impact on the current account and inflation from expensive crude and gas, and a beneficial impact on exports. In dollar terms, the equivalent of 10 per cent of national income has been wiped out in the calendar year.
Calculated in current dollars, India’s Gross Domestic Product (GDP) may contract in 2018-19, assuming its growth runs at the expected 7.5 per cent and the rupee doesn't stage a big recovery. READ MORE

Top losers in BSE 500:

IL&FS TRANSPORT 26.25 -3.85 -12.79
CENTURY PLY. 196.40 -10.65 -5.14
8K MILES 284.80 -14.95 -4.99
SHANKARA BUILD. 1291.00 -62.70 -4.63
MANAPPURAM FIN. 91.80 -4.20 -4.38
» More on Top Losers
Falling rupee credit negative for India Inc, impact to be limited: Moody's

Global rating agency Moody's Investors Service on Monday said that a sustained weakening of the rupee would be credit negative for its rated Indian companies.
It will have an adverse impact particularly on those entities that generate revenue in rupees but rely on US dollar debt to fund their operations and have significant dollar-based costs, including capital expenses. READ MORE

India's 10-year bond yield highest since late-2014, rupee at record low

India's 10-year bond yield rose to its highest since late-2014 on Monday as worries of higher crude prices and weakening rupee bolstered inflation concerns. The 10-year benchmark bond yield rose to 8.12 percent, its highest since Nov. 28, 2014, while the rupee touched a record low of 72.32 to the dollar on Monday. READ MORE

Markets at noon

Index Current Pt. Change % Change
S&P BSE SENSEX 38,077.83 -311.99 -0.81
S&P BSE SENSEX 50 12,025.37 -103.74 -0.86
S&P BSE SENSEX Next 50 34,499.89 -426.88 -1.22
S&P BSE 100 11,786.40 -108.29 -0.91
S&P BSE Bharat 22 Index 3,627.96 -30.37 -0.83

Nifty Bank index falls nearly 1%

After striking off 70,000 shell firms, govt axe to fall on another 100,000
The Ministry of Corporate Affairs has started working on the second phase of weeding out shell companies. After sending show-cause notices to 225,000 companies, 70,000 have been struck off and another 100,000 will go soon, said a senior corporate affairs ministry official.
The first list of suspected shell companies had 300,000 entities. Apart from striking them off, their bank accounts have been frozen and the corporate affairs ministry has begun to scrutinise their transactions. READ MORE
Tata Global Beverages up 5% on restructuring of international operations
Shares of Tata Global Beverages (TGBL) was up 5% to Rs 235 on the BSE in intra-day trade after the company said it has restructured its international operations in order to unlock synergies for the business, optimize costs and streamline operations.
“The company has restructured its international operations by merging its businesses in Canada, America and Australia (CAA) and the UK, Europe, West Asia and Africa (EMEA) regions into a single unit called the International Business Division”, TGBL said in a regulatory filing. READ MORE
COMMENT Morgan Stanley on rupee, interest rates

The sell-off in INR has been mainly driven by the broad EM sell-off and the spillover from EMEA and LatAm, in our view, as the INR risk premium remains low. But we remain short INRJPY given our bearish view on EM and the risk of INR being used as a proxy hedge against volatility in other EM countries. We see value in the front-end rate and IGB should INR stabilise, given that the market already prices in another 100bp of rate hikes versus our economists' expectation of 25-50bp.
How Lehman collapse changed the way financial systems are governed globally
Lehman Brothers is significant not only because it turned out to be the only institution which was allowed to fail even as the others were merged or provided support by the US Federal Reserve, but also because the way the financial systems governed changed drastically after its fall.
In case of India, the Lehman impact has been different. To begin with while we did take pride in the fact that we were not affected by the sub-prime crisis, it was probably due to less global integration as well as conservatism on our side where the concept of securitisation was very much restricted and, more importantly, regulated, writes Madan Sabnavis.

Stock of the day: IL&FS Group shares hit 52-week low
Shares of all three listed companies of IL&FS have hit their respective 52-week lows on the BSE, falling by up to 15% in intra-day trade after rating agency ICRA on Sunday downgraded loans and debentures of infrastructure financing firm.
“Rating agency ICRA has effected a multi-notch rating downgrade for IL&FS, which is facing liquidity pressure and overleveraged. Its loans and debentures now carry “BB” (junk or non-investment status) as against the previous rating of "AA+". Also, the commercial paper carries "A4" rating against the previous rating of "A1+",” the Business Standard reported. READ MORE
SEC halts trading in two cryptocurrency products, citing market confusion
The US Securities and Exchange Commission said on Sunday it was immediately suspending trading in two investment products that track cryptocurrencies, citing confusion in the markets over whether the products are exchange-traded funds (ETFs).
The SEC said in a statement that trading in Bitcoin Tracker One CXBTF.PQ CXBTF.PK and Ether Tracker One CETHF.PQ CETHF.PK would be halted in the United States until at least Sept. 20. READ MORE
Interview of the day Appropriate level for Nifty is 10,500 pts: Maybank Kim Eng Securities CEO
The sliding rupee, concerns regarding know your customer (KYC) for foreign portfolio investors (FPI) and rising crude oil prices have kept the markets choppy last week. JIGAR SHAH, chief executive officer, Maybank Kim Eng Securities, tells Puneet Wadhwa that though India could fare better on the global trade war front, oil price rise is a risk. Hence, the pressure on currency – albeit gradual – might continue. READ MORE


Market Check

Index Current Pt. Change % Change
S&P BSE SENSEX 38,196.07 -193.75 -0.50
S&P BSE SENSEX 50 12,070.95 -58.16 -0.48
S&P BSE SENSEX Next 50 34,895.33 -31.44 -0.09
S&P BSE 100 11,844.61 -50.08 -0.42
S&P BSE Bharat 22 Index 3,652.37 -5.96 -0.16

Sebi may delay extending trading hours at derivatives markets till 11.55 pm
The Securities and Exchange Board of India (Sebi) may delay extending the trading hours at the derivatives markets till 11.55 pm because it hasn’t been able to resolve a few issues, according to sources.
Starting October 1, the derivatives markets were supposed to remain open till 11.55 pm. “The detailed framework for the settlement process, risk management systems, monitoring trade positions, and surveillance mechanism is yet to finalised,” said a person privy to the development. READ MORE

Sebi. (Photo: Kamlesh Pednekar)

10 years of Lehman crisis: The world has changed, but not enough
The fall of big-bulge investment bank Lehman Brothers and the global financial chaos that followed after defaults in subprime debt have had a major impact on the world economy and the financial system. Regulators across the world, led by the US Federal Reserve (Fed), came out with bond-buying programmes, thereby supplying easy money and also made drastic cuts in interest rates. READ MORE

HDFC Life's Amitabh Chaudhry appointed as CEO & MD of Axis Bank

Amitabh Chaudhry has been appointed managing director and chief executive of Axis Bank for a three-year term. He will take charge on January 1, 2019. Chaudhry, 54, will succeed the current MD & CEO Shikha Sharma, whose term ends on December 31. Chaudhry, who’s MD & CEO at HDFC Life Insurance, has resigned from the post. READ MORE

Stock reaction:

Nifty sectoral trend

BSE Sensex opening gainers and losers

Market at open
At 9:15 AM, the S&P BSE Sensex was trading at 38,265, down 125 points while the broader Nifty50 was ruling at 11,555, down 34 points.
Markets at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 38,428.62 +38.80 +0.10
S&P BSE SENSEX 50 12,165.41 +36.30 +0.30
S&P BSE SENSEX Next 50 35,106.06 +179.29 +0.51
S&P BSE 100 11,934.15 +39.46 +0.33
S&P BSE Bharat 22 Index 3,671.45 +13.12 +0.36

Rupee Alert Rupee at fresh record low, opens 41 paise lower at 72.18
Trading ideas by Devang Shah
CLOSE – Rs 598.40
TARGET – Rs 635-650
VOLTAS closed the day in positive territory. It looks like the end of short-term correction. Its weekly momentum indicators are in BUY. It’s trading above 20DMA. One can BUY with a stop loss of Rs-562 for the target of Rs 635-650 levels in short-term.

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Short-term outlook for Nifty remains positive: Devang Shah
The short-term outlook for the market remains positive till Nifty trades above 11,171 levels and expecting targets in the range of 11,800- 12,000 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 9,951 levels and expecting targets in the range of 12,500-12,800 levels in the medium term. READ MORE
Stock calls by Angel Broking:
Tata Motors
View – Bullish
Last Close – Rs 277.40
The stock has been a laggard since the last couple of years and despite benchmark seeing massive appreciation in this period, the stock is trading around its five-year low, which is certainly a disaster for so many investors. Now, recently, prices consolidated and has formed some near-term base for the stock. On Friday, we witnessed a breakout from this congestion zone along with considerably higher volumes. Hence, we expect the stock to give some relief rally in days to come. One can look to go long for a positional target of Rs 394 in coming weeks. The stop loss can be placed at Rs 269.
11,640-11,700 are the levels to watch out: Angel Broking
The index will have to convincingly traverse the strong resistance zone of 11,640 – 11,700, if it has to gain some real strength in the near term. It looks possible considering the broader market participation; but as a trader, one needs to be closely tracking how index behaves around those important levels. On the lower side, 11,484 followed by 11,436 would now be seen as immediate and crucial supports. READ MORE
Top trading ideas by Prabhudas Lilladher:
CMP: Rs 973.70
TARGET: Rs 1,060
The stock has made a higher bottom formation pattern in the daily chart at around 915 levels and has given a positive bullish candle to signify tremendous strength and has got potential to rise further in the coming days. The RSI also has given a trend reversal with a steep rise and has signaled a buy. With good volume participation witnessed, we recommend a buy in this stock for an upside target of 1,060 keeping a stop loss of 930.
Nifty outlook by Prabhudas Lilladher:
Nifty has managed to hold its weekly trend in positive above 11,583 while Bank Nifty has turned down its weekly trend after 8 weeks. The weightage amongst the Nifty 50 stocks is equally distributed between the positive & negative. The support for the week is seen at 37,800/11,400 while resistance is seen at 38,950/11,770. Bank Nifty would have a range of 26,880-28,050. RIL looks very promising at these levels for a target of 1,350, along with Auto stocks like Bajaj Auto, Hero and TVS.
CAD eases marginally to 2.4% of GDP in Q1 FY19 : RBI
India's current account deficit (CAD) as a percentage of GDP declined marginally to 2.4 per cent in the April-June quarter of 2018-19 against 2.5 per cent in the year-ago period, the RBI data released Friday showed.
In value terms, the CAD was higher at $15.8 billion in April-June this year as against $15 billion in the same quarter of 2017-18 mainly due to a higher trade deficit. READ MORE
SGX Nifty
Trends on SGX Nifty indicate a negative opening for the broader index in India, a fall of 47 points or 0.4 per cent. Nifty futures were trading around 11,588-level on the Singaporean Exchange.
Oil prices climb as US energy firms cut rigs, Iran sanctions loom
Oil prices rose on Monday as the number of US rigs drilling for new production was cut last week and as the market is expected to tighten once US sanctions against Iran’s crude exports kick in from November.
US West Texas Intermediate (WTI) crude futures were at $68.09 per barrel at 0055 GMT, up 34 cents, or 0.5 percent, from their last settlement. Brent crude futures climbed 42 cents, or 0.6 percent, to $77.25 a barrel.
Asian shares on slippery slope as trade tensions take toll
Asian shares started the week in the red again on Monday, faltering for the eighth straight day and the dollar climbed against major currencies after US President Donald Trump raised the stakes in the heated trade dispute with China.
MSCI’s broadest index of Asia-Pacific shares outside Japan were last down 0.2 per cent after dropping 3.5 per cent last week for their worst weekly showing since mid-March. Japan's Nikkei opened lower but quickly pared losses. Australia's benchmark share index slipped 0.2 per cent, while South Korea's KOSPI index eased 0.1 per cent.
Wall Street drops on tariff worries
Wall Street's major indexes fell on Friday as US President Donald Trump raised the possibility of additional tariffs on Chinese imports and Apple Inc indicated that some of its products could be subjected to such levies.
The Dow Jones Industrial Average fell 79.33 points, or 0.31 per cent, to 25,916.54, the S&P 500 lost 6.37 points, or 0.22 per cent, to 2,871.68 and the Nasdaq Composite dropped 20.19 points, or 0.25 per cent, to 7,902.54.
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