Anand James, Chief Market Strategist, Geojit Financial Services
With global equity markets in risk-off mode over Korean tensions, the ongoing weakness has gained momentum. Approaching F&O expiry has also added to liquidation pressure. With the FIIs continuing to be net sellers, investors are also fretting on the impact on fiscal deficit targets if government were to go overdrive on with economic revival plans.
3:49 PM Sectoral trend
3:46 PM Top Sensex losers and gainers
Broader markets underperform
The BSE Midcap and the BSE Smallcap indices tanked nearly 3% each.
Markets at close
The S&P BSE Sensex ended 447 points down at 31,922, while the broader Nifty50 settled at 9,964, down 157 points.
Economy booster package should stimulate pvt investment: Ex-RBI chief
Former Reserve Bank of India Governor C. Rangarajan on Friday said the package the government is looking at to revive the economy should be partly to raise capital expenditure and look at problems preventing private investments from rising. READ FULL REPORT
3:20 PM Volatility index
India VIX rose over 10% to 12.86.
3:14 PM European markets
European shares steadied on Friday amid fresh tensions over North Korea but remained near recent highs ahead of this weekend’s general election in Germany, where conservative Chancellor Angela Merkel is expected to win a fourth term. The pan-European STOXX 600 index fell 0.1%.
Debt-laden banks 'concern' for economy: Jaitley
India will make efforts to find resources to support debt-laden banks to help them fund economic growth, Finance Minister Arun Jaitley told a meeting of bankers on Friday. Jaitley said stressed bank assets have become a "concern" for the economy. Bad loans have crimped the ability of Indian lenders to offer new credit. READ FULL REPORT
Dena Bank gained nearly 3% to Rs 31.80 on news reports that Vijaya Bank and Dena Bank have expressed interest in a merger and are discussing synergies. READ MORE
Adhunik Industries hits 52-week low
Adhunik Industries hits 52-week low of Rs 83.55, tanked 20% on BSE after the Securities Appellate Tribunal (SAT) directed the market regulator and stock exchanges to reverse their decisions all dated August 7, 2017 qua the appellant forthwith. READ MORE
2:17 PM Nifty slips below 9,900 mark
2:06 PM Broader markets underperform
The BSE Midcap and the BSE Smallcap indices underperformed to lose 2% each.
At 2:00 pm, the S&P BSE Sensex was trading at 31,994, down 375 points, while the broader Nifty50 was ruling at 9,987, down 134 points.
Kotak Securities on VIP Industries
We initiate coverage on VIP Industries (VIP) which is the market leader in the organized luggage industry in India with more than 50% market share, manufacturing and supplying a wide range of hard sided and soft-sided luggage. We expect the company to maintain a strong growth momentum with increasing penetration of luggage bags and back-packs, healthy GDP growth, improving disposable income, increased air and rail travel and with increased use of luggage as a gifting tool. We estimate revenue CAGR of 17% and earnings CAGR of 28% over FY17 to FY20E with improvement in operating margins and return ratios. We believe VIP would be one of the major beneficiaries of healthy GDP growth, rising income level, changing life style and implementation of GST. We initiate coverage on the stock with a TP of Rs 325 valued at 30x FY19 earnings.
Shares of ITI and Orchid Pharma rallied up to 19% for the second straight day in an otherwise weak market on the back of positive corporate announcements.
ITI has surged 19% to Rs 146, extending its Thursday’s 20% rally on the National Stock Exchange (NSE), after the company announced that it has won Rs 7,000 crore-phase IV tender of Army (Army Static Switched Communication Network-ASCON) for deploying and maintaining its strategic communication network across the country.
Orchid Pharma soared 16% to Rs 25, after yesterday’s 20% gain as the company received an establishment inspection report (EIR) from U.S. Food and Drug Administration (US-FDA) on the successful inspection of the active pharmaceutical (API) manufacturing facility in Tamil Nadu. This facility was inspected by USFDA in May 2017. READ MORE
Nifty's 15-year journey: Financials lord over the index
Nifty constituents, over the last 15 years, have undergone a sea change to reflect the underlying changes in the economy. In a recent report, Gautam Duggad and Deven Mistry of Motilal Oswal Research (MOSL) suggest that the weight of financials has seen a secular rise in the benchmark indices, with banking & financial services and insurance (BFSI) now contributing 35.6% (+3.1x in 15 years) weightage in the Nifty-50.
The share of private banks / NBFC in the index, they believe, has gone up led by: a) better earnings performance, coupled with capital raising from the markets (this boosted the free float of Financials), b) sub-par earnings growth witnessed in other sections of the market over the last eight years and c) index moving to a free float basis from June 2009. READ MORE
S&P says downgraded China as credit growth still too fast
China's attempts to reduce risks from its rapid buildup in debt are not working as quickly as expected and credit growth is still too fast, S&P Global Ratings said on Friday, a day after it downgraded the country's sovereign credit rating.
"Despite the fact that the government has shown greater resolve to implement the deleveraging policy, we continue to see overall credit in the corporate sector to stay at a 9 percent point", Kim Eng Tan, an S&P senior director of sovereign ratings, said in a conference call to discuss the one-notch downgrade to A+ from AA-.
While S&P warned months ago that a cut may be on the cards, it said it decided to make the call after concluding that China's "de-risking" drive that started early this year was having less of an impact on credit growth than initially expected. READ MORE
12:43 PM Rupee at 5-1/2month low
Rupee fell past 65/$, lowest since April 6, in the morning after dollar strengthened post Fed policy review. The Indian currency is currently trading at 64.8/$, down 53 paise
Sebi allows unified licence for stock and commodity broking
The Securities & Exchange Board of India (Sebi) has allowed brokers of stock and commodity exchanges to do both businesses under one entity.
This was a major demand of brokers after commodity derivatives regulations came under Sebi, from the erstwhile Forward Markets Commission.
The change was notified in July, by amending the Securities Contracts (Regulation) Rules and Sebi (Stock Brokers and Sub-Brokers) (Amendment) Regulations. On Thursday, a circular was issued to give effect to these. READ MORE
ICICI Pru Balanced Fund: Diversified portfolio, consistent outperformance
The fund has managed to consistently outperform the benchmark (CRISIL Balanced Fund - Aggressive Index) and its category (funds ranked under the balanced category in June 2017 CRISIL Mutual Fund Ranking) in all the periods under analysis.
Given the fund's extensive track record, it has experienced various market phases, and has outperformed the benchmark across all phases under analysis and its peers in three phases.
An investment of Rs 1,000 in the fund on March 30, 2002 (since inception of the benchmark) would have grown to Rs 13,203 on September 18, 2017 at an annualised rate of 18.14% against the benchmark which would have grown to Rs 6,397 (12.73%).
ITI hits 52-week high
ITI surged 10.23% to Rs 134.70 on BSE, with the stock extending yesterday's rally after the company was declared as lowest bidder for a large project worth approximately Rs 7000 crore.
Matrimony.com extends fall after weak listing; down 14% against IPO price
Matrimony.com has dipped 6% to Rs 843, extending its previous day’s 8% decline against its initial public offer (IPO) price of Rs 985 per share on the National Stock Exchange (NSE).
The company, the first pure-play Indian matchmaking website, on Thursday had made a quite debut by listing at par against its issue price on NSE and BSE. READ MORE
11:37 AM Sectoral Trend: All indices were trading in red dragged mainly by metal, realty and bnaking indices
11:24 AM Market Check
Benchmark indices extended losses in the late morning deals as North Korea tensions escalate. At 11:23 am, the S&P BSE Sensex was trading at 32,083, down 286 points while the broader Nifty50 index was ruling at 10,008, down 113 points.
Reliance Home Finance locked in upper circuit
Reliance Home Finance, the demerged home business of Reliance Capital, got locked in 5% upper circuit at Rs 109 on BSE on the first day of its debut in an otherwise weak market. The stock listed at Rs 104 on the BSE.
On the National Stock Exchange (NSE), the stock too frozen at maximum upper limit of 5% at Rs 107 after listing at Rs 102. READ MORE
IPOs of IRCTC, IRFC may be deferred
The listing of two public sector undertakings under the Railways Ministry — Indian Railway Finance Corporation (IRFC) and Indian Railway Catering and Tourism Corporation (IRCTC) — may get delayed, as the government now wants to sort out the financial issues facing the companies.
Officials close to the developments said that new railways minister, Piyush Goyal, wanted to resolve these issues in order to get a better valuation before going for listing.
Click for more
IPO Note on Prataap Snacks by Geojit Financial Services
Rating – Subscribe
Price Range Rs 930 - Rs 938
With current utilisation rates, Prataap has the capability to grow organically. Current Indian organised snacks market is estimated at Rs 22000 crore and is estimated to grow at ~14.6% CAGR, over 2016-21E.
Prataap's story should be considered on its new product launch plans, strong, sustained revenue growth and strengthening market position in the last few years.
The company intends to foray into relatively untapped high margin chocolate-based confectionary, the market for which is estimated to grow at 15-18% annually over the next four to five years. We recommend 'Subscribe' to the issue, with a long term perspective.
Tata Sons' shareholders vote for going private
Tata Sons’ shareholders have voted in favour of going private, overruling objections raised by the Mistry family. “All resolutions placed before the annual general meeting were passed with a requisite majority,” a Tata Sons source said.
The new structure, approved by the shareholders during the group’s AGM at Bombay House on Thursday, would mean significant changes. For one, as a private limited firm, the Tata group holding company, headed by N Chandrasekaran, would not need to make as many disclosures as it has made until now.
Secondly, if it defaults in paying dividend for two or more years, its preference shareholders would get voting rights, with Chairman Emeritus Ratan Tata getting a bigger say. READ MORE
N Chandrasekaran, chairman, Tata Sons
10:16 AM NDTV hits upper circuit
New Delhi Television (NDTV) is locked in upper circuit of 5% at Rs 53.10 on the Bombay Stock Exchange (BSE) in otherwise weak market, after media reports suggested that the SpiceJet’s co-founder Ajay Singh has picked up majority holding in the news channel. READ MORE
9:55 AM Buzzing Stock
KNR Constructions surged 5.54% to Rs 223.80 on BSE after the company's joint venture bagged an order worth Rs 884.47 crore from Government of Telangana.
Gold outperforms stock market so far this century
Gold prices have outperformed the markets – S&P 500 – thus far in this century (i.e. since 2000), returning 86% more than the market if both asset classes were indexed at 100 levels starting December 31, 1999, suggests the latest World Gold Council’s ‘Gold Investor’ report for September 2017.
“The current equity bull market, now in its eighth year, is one of the longest in US history – it could very well become the longest. Even so, gold has outperformed the S&P 500 so far this century, returning 86% more than the market if we index both asset classes at 100 on 31 December 1999,” the WGC report says.
to find our if there is a compelling case for investing in gold
9:30 AM Nifty Pharma wa the biggest sectoral gainer, up 0.7% led by Dr Reddy's, Glenmark and Sun Pharma
9:26 AM Nifty Bank index fell almost 1% dragged mainly by private banks like ICICI Bank, Yes Bank, IndusInd Bank and Axis Bank
9:23 AM Sectoral Trend
9:22 AM Top Sensex gainers and losers
9:18 AM Broader Markets
Broader markets were trading in line with the benchmark indices with BSE Midcap and BSE Smallcap down 0.6% each
9:17 AM Markets at open
Markets open on a cautious note with Nifty below 10,100 levels following negative global cues. Asian stocks fell and the Japanese yen and Swiss franc gained on the mooted possibility of North Korea conducting another hydrogen bomb test, this time in the Pacific Ocean.
At 9:17 am, the S&P BSE Sensex was trading at 32,180, down 189 points while the broader Nifty50 index was ruling at 10,075, down 46 points
Derivative Strategy by HDFC securities:
Buy Tech Mahindra Sept Future at Rs 462
Stop loss: Rs 455
Target: Rs 475
1. We have seen long positions being built in Tech Mahindra futures today where their open interest rising by 7% with price rise of 3%.
2. It has given breakout on the daily chart by closing above the crucial resistance level of 450 with higher volumes.
3. Price has also broken out from the long term downward sloping trendline, adjoining the high of 02-August-2015 and 23-Feb-2017.
4. Momentum Indicators and oscillators are Indicating strength in the stocks
Stock recos for today's trade from MOSL
L&T Finance Holdings - BUY
Last Close: Rs 211
Stop Loss: Rs 205
Target: Rs 220
BIOCON - BUY
Last Close: Rs 364
Stop Loss: Rs 352
Nifty outlook from Chandan Taparia of MOSL
Index started to form lower highs from last two sessions and absence of follow up buying is restricting its upside momentum. It respected to its rising support trend line by connecting swing lows of 9,783, 9,913 and 10,050 zones. Now if it manages to hold above 10,138 zones then it may head towards 10,178 and 10,200 zones while on the downside supports are seen at 10,080 and 10,050 zones.
9:04 AM Rupee at 5-month low
Rupee falls past 65/$, lowest since April 6, after dollar strengthened post Fed policy review. The Indian currency was currently trading at 65.04/$, down 24 paise
Few trading ideas from Prabhudas Lilladher:
CMP: Rs 364.15
TARGET: Rs 395
STOP LOSS: Rs 348
BUY CADILA HEALTH
CMP: Rs 504.45
TARGET: Rs 545
STOP LOSS: Rs 474
BUY AJANTA PHARMA
CMP: Rs 1256.60
TARGET: Rs 1400
STOP LOSS: Rs 1180
Click here for rationale
The market is seen opening lower tracking weakness in Asian stocks and lackluster trading on Wall Street overnight. Asian stocks dropped in early trade with U.S. equity-index futures after a report that North Korea could respond to fresh sanctions with a hydrogen bomb in the Pacific.
U.S. stocks were lower after the close on Thursday, as losses in the Consumer Goods, Telecoms and Technology sectors led shares down. European markets, however, ended higher on Thursday, after the Federal Reserve announced a plan to begin unwinding its balance sheet and signaled one more interest rate hike for this year.
As per provisional figures, foreign institutional investors (FIIs)/ Foreign Portfolio Investors (FPIs) sold shares worth net Rs 1204.95 crores on 21st September 2017. Domestic institutional investors bought shares worth Rs 1416.55 crores on that day.
(Source: SMC Global)
Nifty View by Prabhudas Lilladher:
The daily trend turns down in Nifty which implies resistance at 10,150 levels for now and a decisive break of 10050 would bring Nifty down to 9,950 levels. The support for the day is seen at 10,070 while resistance is seen at 10,160.
Stimulus package funding: Govt weighs fiscal push for growth
The government is considering increased spending in order to revive the economy and is open to allowing the fiscal deficit to widen beyond its target for the year. A stimulus package in the range of Rs 40,000-50,000 crore is being discussed in the government, though these figures could not be immediately confirmed.
Back-of-the-envelope calculations show that a Rs 40,000-crore increase in capital spending could lead to a fiscal deficit of 3.5% of the gross domestic product, against the Budget estimate of 3.2%.
Assuming the budgeted total revenue figure for 2017-18 remains constant, for each additional spending of Rs 10,000 crore, the fiscal deficit as a percentage of GDP roughly increases by a little less than 0.1%. READ MORE
S&P downgrades China, says rising debt is stoking economic, financial risks
S&P Global Ratings downgraded China’s long-term sovereign credit rating on Thursday, less than a month ahead of one of the country’s most sensitive political gatherings, citing increasing risks from its rapid build-up of debt.
S&P’s one-notch downgrade to A+ from AA- comes as Beijing grapples with the challenges of containing financial risks stemming from years of credit-fueled stimulus to meet ambitious government economic growth targets.
The Nifty50 futures on the Singapore Stock Exchange were trading 50 points lower at 10,090 indicating a negative opening for the domestic market.
8:51 AM Oil Check
Oil prices held steady in early Asian trade on Friday as the market waited to see whether major oil producers would extend supply cuts beyond March at a meeting in Vienna later in the day.
International benchmark Brent crude futures LCOc1 were at $56.40 a barrel, down 3 cents, or 0.05%, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 7 cents, or 0.14%, at $50.62 per barrel.
8:50 AM Gold prices rise
Gold edged up from a four-week low on Friday as the latest twist in tensions between the United States and North Korea prompted investors to seek out the safe-haven asset.
Asian stocks fall
Asian stocks fell and the Japanese yen and Swiss franc gained on the mooted possibility of North Korea conducting another hydrogen bomb test, this time in the Pacific Ocean.
MSCI’s broadest index of Asia-Pacific shares outside Japan handed back earlier gains and was down 0.4% after falling 0.7% the previous day.
The index had risen to a decade high on Tuesday, lifted as Wall Street advanced to record levels before faling back after the Fed heightened expectations for a third interest rate hike this year.
Japan’s Nikkei slipped 0.2% and Australian stocks advanced 0.2%. South Korea’s KOSPI fell 0.5% on the latest bout of geopolitical tensions.
Shanghai was down 0.5% after S&P Global Ratings downgraded China’s long-term sovereign credit rating on Thursday, less than a month ahead of one of the country’s most sensitive political gatherings, citing increasing risks from its rapid debt build-up.
Wall Street slips
US stock indexes slipped on Thursday as investors braced for a third interest rate hike this year and the United States ordered new sanctions against North Korea.
The Dow Jones Industrial Average fell 53.36 points, or 0.24%, to 22,359.23, the S&P 500 lost 7.64 points, or 0.30%, to 2,500.6 and the Nasdaq Composite dropped 33.35 points, or 0.52%, to 6,422.69.
8:28 AM Good morning. Welcome to Business Standard's live blog on the markets. Catch the market action here, all through the day!
First Published: Fri, September 22 2017. 15:39 IST