Anand James, Chief Market Strategist, Geojit Financial Services says: Domestic indices traded in a range during the early hours as the investors kept a cautious stance as tensions over Korea brewed. However the positivity from European peers reinstated buying interest during in the second half and with few domestic signals, markets will look up to global cues, especially central bank announcements.
3:42 PM Nifty IT was one of the top sectoral gainers on NSE led by gains in Tech Mahindra, Just Dial, TCS and Tata Elxsi
3:40 PM Nifty Realty up 1%
3:38 PM Sectoral Trend
3:36 PM Top gainers and losers on BSE Sensex
3:34 PM Broader Markets
Broader markets outperformed benchmark indices with BSE Midcap and BSE Smallcap indices up 0.6% and 1% respectively
3:33 PM Markets at Close
Benchmark indices ended higher as the Street shrugged off lingering concerns about the escalating North Korea crisis. The S&P BSE Sensex ended at 31,809, up 107 points while the broader Nifty50 index settled at 9,951, up 39 points
Bank of Baroda keeps MCLR unchanged
Bank of Baroda rose 1.10% to Rs 138.25 on BSE after the bank said that it has decided to keep marginal cost of funds based lending rates unchanged. The stock had hit a high of Rs 138.65 and a low of Rs 136.05 so far during the day.
In commodity markets, US WTI oil prices edged higher, while US gasoline prices slumped to pre-Hurricane Harvey levels, as oil refineries and pipelines in the US Gulf Coast slowly resumed activity, easing supply concerns.
US West Texas Intermediate (WTI) crude futures ticked up 0.2% to trade at $47.38 per barrel, though global benchmark Brent prices barely budged at $52.37.
Hotel Leela's clarification
Hotel Leelaventure today said there is no final agreement with any party to sell its Chennai hotel, though negotiations are on to sell the property in coordination with JM Financial.
The company has already received shareholders' nod for the 'sale of hotels in Delhi/Chennai' in September 2016, Hotel Leelaventure said in a filing to BSE.
The hospitality chain was reacting to a media report that Marigold Capital and Investments has agreed to buy the company's Chennai property.
2:52 PM Dewan Housing gains
Dewan Housing rose 3.55% to hit its record high on sustained buying interest. On the BSE, 1.57 lakh shares were traded on the counter so far as against the average daily volumes of 2.36 lakh shares in the past one quarter. The stock had hit a high of Rs 539 so far during the day, which is a record high.
Equity benchmarks continued to trade higher with moderate gains, backed by Reliance Industries and realty, banking & financials stocks.
At 2:38 pm, the S&P BSE Sensex was trading at 31,854, up 151 points while teh broader NIfty50 index was ruling at 9,959, up 47 points
IDBI moves SC against stay of insolvency proceedings against Jaypee
The Supreme Court on Tuesday agreed to hear IDBI Bank's plea seeking modification of its order staying insolvency proceedings against embattled real estate firm Jaypee Infratech on September 11.
A bench comprising Chief Justice Dipak Misra and Justices Amitava Roy and A M Khanwilkar considered the submission of the bank that staying the order of the National Company Law Tribunal (NCLT) in Allahabad had reversed the position and, as a consequence, the company had gone back to defaulting promoters.
2:04 PM RIL gains
Reliance Industries advanced 1.16% to Rs 1,630.05 on BSE after a foreign brokerage reportedly stated that it expects the company's gross refining margins to gain on a global supply glut concerns.
1:39 PM Europe Check
European markets were mixed, as geopolitical tension concerning North Korea kept investors at bay while markets lacked overnight guidance due to a Labor Day holiday in North America.
The pan-European Stoxx 600 edged marginally higher shortly after the opening bell, with sectors and major bourses pointing in opposite directions.
1:20 PM BUZZING STOCK
D-Link (India) rose 3.16% to Rs 93.05 on BSE, with the stock recovering on bargain hunting after Monday's slide triggered by company's weak Q1 results.
It reported net loss of Rs 10.59 crore in Q1 June 2017 as against net profit of Rs 0.51 crore in Q1 June 2016. Net sales declined 39% to Rs 92.17 crore in Q1 June 2017 over Q1 June 2016.
Over 200 BSE-500 stocks under-perform since August
As the markets remain in a consolidation mode after the S&P BSE Sensex fell 2.6% (873 points) from its closing high of 32,575, hit on August 1, 2017, there are over 200 stocks in the BSE500 index that underperformed the indices and fell up to 58% during this period. Meanwhile, Nifty50 index also cracked 1.9% (201 points) from its closing high of 10,114. READ FULL REPORT HERE
IPO Review: Bharat Road Network Ltd
Incorporated in 2006, BRNL is a BOT company focused on development, operation & maintenance of road projects. Currently, it has six BOT projects. Out of these, five are complete/partially complete. Residual concession period for its BOT projects is 18.5 years.
Key concerns for BRNL:- i) all subsidiaries, associates companies made losses in last two years ii) delay in project construction may lead to cost overrun for under construction/new projects and ii) it has pledged a portion of its shares in subsidiaries and associates.
The company is looking to raise around Rs 601 crore (at Rs 205/share) with a fresh issue of nearly 2.93 crore shares. Post IPO, promoter & promoter group’s stake would be reduced to 65.1%.
At the higher end of IPO price band of Rs 205, the stock is valued at 1.4x FY17 P/BV (post issue), which appears to be at par with other established player such as IRB Infrastructure (1.4x FY17 P/BV). Looking at the quality of projects (most projects commissioned in the past few years), we believe it should be at a discount to IRB
Source: ICICI Securities
Reliance Securities on Coal India
We believe that CIL’s current stock price has discounted decline in e-auction coal prices. We expect volume and realisations to recover in FY18E. Moreover, valuations of 11.5x FY19E EPS seem to be inexpensive.
Improvement in the policy environment and infrastructure spend coupled with manufacturing activities will aid in reviving the demand environment for the power sector thereby higher coal demand. Reiterate our BUY recommendation on the stock with a Target Price of Rs 301
12:43 PM Nifty nears 9,900
Top five losers on the index
Markets turn flat
At 12:30 pm, the Sensex was trading at 31,702, down 0.24 points, while the Nifty50 was ruling at 9,911, down 1 points.
Jaypee Infratech erases gains, slips 5%
After witnessing a relief rally on Monday post Supreme Court stayed National Company Law Tribunal's (NCLT) order initiating insolvency proceedings against Jaypee Infratech, the company erased all its gains to fall as much as 4.8% to Rs 17.60 in intra-day on Tuesday. The stock gained 4.8% on Monday after the Apex Court ruling came out. READ MORE
Japan Aug services PMI
Japan's services sector expanded in August at the slowest rate in six months as the pace of new orders eased, a private survey showed on Tuesday in a sign the economy is losing some momentum after this year's solid gains.
The Markit/Nikkei Japan Services Purchasing Managers Index (PMI) fell to a seasonally adjusted 51.6 from 52.0 in July.
Edelweiss Securities on Sun TV
Star India has bagged the Indian Premier League’s (IPL) digital and television media rights for the next five years for a whopping Rs 16300 crore. Moreover, Vivo also retained the IPL title sponsorship at bid price of Rs 2200 crore for 5 years. It is debatable whether IPL will be profitable for Star India (media rights), Sun TV (owner of Sunrisers Hyderabad) has emerged clear winner as higher media and sponsorship rights will bolster its revenues. Sun TV also stands to benefit from decline in franchise cost with the change in fee structure from fixed (Rs 85. 5 crore) to 20% of revenues (lower cost during bad years), leading to upside of Rs 50 crore (pari passu). Maintain ‘BUY’.
11:20 AM Buzzing stock
Hotel Leelaventure rallied over 8% to Rs 25, its highest level in three months, following news reports that US private equity fund Marigold Capital & Investments is looking to buy company’s hotel in Chennai. BSE has sought clarification from the company with reference to the same news. The reply is awaited.
Coal India: There's good news finally
For Coal India, which has lost almost a third of its market value from the highs seen in August last year and having touched its all-time intra-day low of Rs 234 on August 11, 2017, things may be turning around. READ MORE
Consumer stocks and premium valuations
The reality is that disruption is underway even in the consumer space. Be it packaged food or consumer products, the moats around these businesses are under threat. Current valuations and investor thinking do not seem to be adjusting for this oncoming disruption. READ FULL VIEW HERE
Morgan Stanley on ECB meeting
The ECB is unlikely to announce QE tapering at this week's meeting. We think that it'll likely do so at the following one in late October. The upcoming meeting should see a change in the QE easing bias. We expect the inflation projections to come down, but to still show an upward trend in core
EDELWEISS ON AUTO SECTOR
The robust growth momentum seen in July extended across segments in August as well. Inventory re-stocking post GST rollout and early festive season lent impetus to PVs, 2Ws and tractors, while M&HCVs sprung biggest surprise. We attribute the zest to normalising production post BS-IV and replacement led demand. We expect tonnage growth in M&HCVs to sustain higher than volumes (similar to July – refer chart 2).
Key takeaways: a) YoY PVs grew 17%, 2W volumes moved up 14% (scooter led) and M&HCV grew 34% YoY; b) higher ticket segments (PVs and premium bikes) maintained strong demand traction; c) Maruti Suzuki (MSIL) and Tata Motors (TTMT) gained share in PVs and M&HCVs, respectively, while Hero MotoCorp (HMCL) lost share in 2Ws.
Our pecking order in auto space remains - Ashok Leyland (AL; profitable market share gains), Eicher Motors (EIM; structural premiumisation play) and MSIL (widening gap with peers)
Nikkei India Services PMI
Registering 47.5 in August, the seasonally adjusted Nikkei India Services PMI Business Activity Index pointed to a second successive decline in output. Rising from 45.9 in July, however, the latest figure was indicative of a softer rate of reduction that was moderate overall. The downturn was often associated with the implementation of the GST, though there were also mentions of shortages of inputs
Gold hits one-year high
Gold prices shot up on Monday to their highest in close to a year as investors bought safe-haven assets on worries that North Korea might launch more missiles after its sixth and largest nuclear test. READ MORE
Interview of the day
Country’s gross domestic product (GDP) will take at least two quarters to recover with consumption making up for the low government expenditure and private investment, says Ankur Varman, AVP - Institutional Equity sales at SBI Capital Markets. READ FULL INTERVIEW HERE
BSE imposes trading curbs
Leading stock exchange BSE on Monday imposed trading restrictions on two more firms - Sancia Global Infraprojects and Koa Tools India - on regulator Sebi's directives regarding a clampdown on suspected shell companies. READ MORE
9:49 AM Buzzing stock
Sun TV extended gains for the third straight session by rising over 3% to Rs 839 after STAR India on Monday won media rights for the IPL for a period of five years on a bid of Rs 16,347 crore.
A record bid will help Sun TV, owner of the Sunrisers Hyderabad team, as revenues from media rights and sponsorships are shared between the IPL and its franchisees. CLICK HERE FOR FULL STORY
Nifty outlook by Angel Broking
We have been quite vocal on the fact the index has slipped into a consolidation mode and hence, we are likely to see such kind of surprises in the market going forward. Despite this corrective move, the Nifty has managed to defend the important support of 9,855. Thus, 9,855-10,000 would now be seen as immediate range for the Nifty and we would see selling pressure coming in at higher levels.
Nifty outlook by Devangshu Datta
Nifty has not been able to break out above resistance between 9,925 and 9,975. A move beyond those limits could mean a test of support at 9,450-9,500 or a target of 10,200 (a new high). READ MORE
Market breadth remained impressive. There were four gainers against one loser on the BSE. 990 stocks rallied, 259 stocks fell, while 41 stocks remained unchanged.
9:23 AM Top Sensex gainers and losers
Market valuation races ahead of growth
The lower-than-expected growth of the economy during the April-June quarter has widened the differential with equity valuations to an all-time high.
The benchmark Nifty50 index is trading at 24.2 times its trailing 12-months earnings per share, which is over four times economic growth in terms of gross value added (GVA) of 5.6 per cent during the first quarter of the current fiscal year (FY18) CLICK HERE TO READ THE FULL STORY
9:21 AM Broader markets
The BSE Midcap and the BSE Smallcap indices were trading 0.4% and 0.5% higher.
9:20 AM Markets at open
At 9:18 am, the Sensex was trading at 31,744, up 41 points, while the Nifty50 was ruling at 9,920, up 7 points.
At 9:05 am, the Sensex was trading at 31,755, up 52 points, while the Nifty50 was ruling at 9,933, up 20 points.
GDP to grow at 7% in fiscal 2018: Crisil
CRISIL has trimmed its fiscal 2018 growth forecast for India by 40 basis points to 7% from 7.4% earlier, after data for the first quarter showed GDP growth at 5.7%, the slowest in the past three years. The 7% growth forecast implies a GDP growth of 7.4% on average in the remaining three quarters. We believe the sharp decline in growth in the first quarter is transitory and the economy will grind up slowly over the next few quarters as the impact of demonetisation and destocking fades. The Purchasing Manager’s Index (PMI) for August already signals a pick-up in manufacturing activity.
Dr. Reddy’s Laboratories- BUY- Company Update- Suboxone Generic Opportunity To Be Lucrative, Can Sustain For Longer Time
The district court of Delaware in the US has ruled that Dr. Reddy’s Laboratories’ (DRL) generic version of Suboxone film does not infringe upon the US patents (8017150, 8603514 , 8900497) as asserted by the innovator, Indivior.
Suboxone film is indicated for the treatment of opioid dependence and generates around $720 million in annual sales in the US. DRL’s launch timeline is now contingent on Actavis’ 180-day marketing exclusivity status and approval timeline for its generic version by the US Food and Drug Administration or USFDA. We have retained Buy rating on DRL with a target price of Rs 3,020.
(Source: Nirmal Bang)
Buy Coal India with a target of Rs 1,180, says Vaishali Parekh of Prabhudas Lilladher. READ DETAILS HERE
Morgan Stanley's top bets
Within our countrycoverage we are overweight Japan, China and India (underweight Australia and South Africa): Japan will deliver the strongest earnings growth of any major region this year (+38%) but is the only major region to have de-rated in forward P/E terms (13.7x on consensus).
China and Hong Kong earnings beat is much stronger than APxJ EM average, prompting investors to continue to reduce their Underweight position. India's structural reduction in inflation and improved current account are leading to a secular reduction in interest rates, driving domestic flows towards equities.
Devangshu Datta on Bank Nifty
Emkay Global on SUN TV
Star India has won IPL rights including India broadcast, India digital and the rest of the world broadcast and digital for Rs16,300 crore with total 5 year tenure (2018-2022).
As per our calculations, IPL teams will get Rs 116.3 crore incremental revenues with higher value of rights. Adding impact of VIVO's sponsorship rights, the incremental annual EBITDA stands Rs96.5 crore for the franchisee. SUN TV would see EPS accretion of Rs1.6 after assuming player cost cap increase of 30%. We are ascribing 26x to the incremental EPS to arrive at per share value of Rs42.
Recent up move of 15% is attributable to start of digitization process in Tamil Nadu and Monday's IPL bidding result. The company has to deliver healthy advertisement revenue growth from Q2FY18 onwards and rebound in viewership share of Tamil and Telugu GEC's for sustained re-rating. Maintain ACCUMULATE with revised price target of Rs 990.
Jefferies on Federal Bank
A revival in loan growth accompanied by cost-controls and aided by a better asset-quality has fired up the long desired turnaround, reflected in the re-rating of Federal Bank (FB). A sales approach to business transformation is currently underway, but the outcomes are showing up. As always, turnarounds are great stories but risky; a few gaps need to be addressed, but we like the new energy in the bank. We initiate at BUY and price target of Rs 140
Asian markets were under pressure. MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.05% having shed 0.8% the previous day, with South Korea’s Kospi was off 0.1% after sliding to three-week lows on Monday.
Japan’s Nikkei ticked down 0.2%.
At 8:45 am, the SGX Nifty, Nifty future being traded on Singapore Stock Exchange was trading at 9,937, up 10 points or 0.11%.
Technical check on the markets
Nifty has closed deep into the negative territory in yesterday’s trading session; however, the daily momentum indicator is still in buy mode which means there can be one more leg on the way till 10000 mark wherein it will complete a rising wedge pattern.
However, on the lower side, if 9783 levels get broken and if the Index close below those levels then the up move will not come. Below 9783 the Index is likely to break its previous lows of 9685 levels. The short term support for the Index is 9835 levels whereas 10000 is a clear resistance; hence the immediate range is 9835 to 10000 levels.
(Source: Anand Rathi Research)
First Published: Tue, September 05 2017. 15:30 IST