Anand James, Chief Market Strategist, Geojit Financial Services
A tinge of caution held investors back ahead of F&O expiry, but expectations of better GDP numbers kept market buoyant especially as last quarter numbers were trampled down by the demonetisation impact. Short covering was also quite visible swinging indices, especially after Wednesday’s rollovers came in at six months low.
3:46 PM Sensex heatmap at close
3:40 PM Market breadth
The breadth, indicating the overall health of the market, was positive. On the BSE, 1,510 shares rose and 1,062 shares fell. A total of 136 shares were unchanged.
3:39 PM Broader markets
The BSE Midcap index added 0.2%, while the BSE Smallcap index outperformed to rise 0.8%.
3:35 PM Markets at close
The Sensex ended at 31,730, up 84 points, while the broader Nifty50 settled at 9,917, up 33 points. Both the indices lost over 2% for the month.
3:28 PM Volatility index
India VIX slips 7% to 11.94
3:24 PM Earnings impact
Ajmera Realty & Infra India spurted over 9% to Rs 213.35 on BSE after the company's consolidated net profit rose 107.96% to Rs 14.10 crore for the June quarter on 101.70% increase in total income from operations to Rs 90.36 crore.
Nifty reclaims 9,900 in last leg of trade
Here are top five gainers:
3:06 PM Asian markets update
Asian markets settled mixed. Japan’s Nikkei closed up 0.7%, its best level in two weeks, helped by a pullback in the yen. MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.1% on the day but was a modest 0.3% firmer for the month. China's Shanghai Composite ended little changed and Hong Kong's Hang Seng shed 0.4%.
Europe’s shares extended their relief bounce on Thursday but were unlikely to avoid a third straight month of losses as they entered the last trading day of an unusually turbulent August, and a profit warning from Carrefour sank the retail sector.
the Eurostoxx 600 up 0.3% and London’s FTSE, Germany’s DAX and France’s CAC40 gained between 0.25% and 0.4%.
3:01 PM Markets check
At 3:00 am, the Sensex was trading at 31,678, up 32 points, while the broader Nifty50 was ruling at 9,901, up 17 points.
Demonetization dents RBI's finances: Kotak Economics Research
RBI’s balance sheet showed negligible direct gains from demonetisation given that 99% of the banned notes have been returned to it. RBI’s earnings were negatively affected from rupee appreciation and domestic liquidity mop-up. Expenditure side increased due to higher printing and freight charges for notes and higher provisions for the contingency fund. The report highlighted that FY17 financial savings improved on the back of higher allocations to deposits, shares and debentures, and insurance funds.
2:26 PM Nifty Auto sees mild gains a day after Cabinet approved cess hike on large cars
Bombay Dyeing zooms 49% in six sessions
High volumes were witnessed on the counter in today's trade. On the BSE, 25.10 lakh shares exchanged hands so far against the average daily volumes of 15.34 lakh shares in the past two weeks. READ MORE
Lots of black money back in the system, says Jaitley
A day after the Reserve Bank of India’s annual report stated that 99 per cent of high-value demonetised notes had come back into the system, Finance Minister Arun Jaitley reiterated his note ban defence and said that illegitimate, unaccounted wealth had also found its way back. READ MORE
Reliance Securities on HDFC Bank
Despite adverse operating environment, HDFC Bank continued to deliver strong performance on business growth as well as operating fronts. Its gross NPA and net NPA increased by 23.1% QoQ and 37.1% QoQ, respectively in 1QFY18. However, we are not much concerned over this marginal rise in gross NPA, as the headline NPA and PCR continue to remain best-in-class in the industry.
We have upwardly revised our earnings estimates by 1.9% and 3.1% for FY18E & FY19E, respectively. We maintain our BUY recommendation on the stock with an upwardly revised Target Price of Rs 1,940 (from Rs 1,833 earlier) based on 4x FY19E Adjusted Book Value.
Jaitley puts debtors on notice
Finance Minister Arun Jaitley on Thursday put private sector debtors on notice saying they will have to pay their dues to banks or allow somebody else to step in and take control of the business. READ FULL REPORT
1:01 PM Buzzing Stock
Aksh Optifibre rose 4.88% to Rs 26.85 on BSE after the company announced that its services division has bagged a national level banking correspondent contract from Bank of Baroda.
Outlook for Indian banking system stable: Moody's
Global rating agency Moody’s on Thursday said its outlook for the Indian banking system is stable on improved prospects for asset quality.
The progress in tackling the system’s legacy asset issues (stressed assets) offsets the significant capital shortfalls some banks continue to face.
"The outlook for the system is also in line with the stable outlooks for 10 of the 15 banks we rate in this system. It reflects a stable operating environment and improved prospects for asset quality, among other factors," said Srikanth Vadlamani, a Moody's Vice President and Senior Credit Officer. READ MORE
Demonetisation demistified: Emkay Global on RBI's annual report
The fact that the total currency in circulation at Rs15.7tn (as on Aug 18, 2017) is still short of the Rs 17.3-lakh crore total supply of currency that existed before demonetization was announced in Nov’16 shows that despite the expediency shown by the central bank, the remonetisation process is incomplete even after 10 months of the demonetisation shock.
The impact on the wider economy has been stark and has lingered on for more than 10 months. It reflects in GDP growth decelerating to an average of 6.2% in Q4FY17-Q1FY18E from an average 7.7% in H1FY17 (prior to demonetization announcement).
Credit growth slumped to a 6-decade low near 4.6% YoY in Mar’17, consumer durables growth has been negative since Dec’16 and shock to the Agriculture sector has culminated in widespread farm loan waivers
12:20 PM Oil & Gas sector gains
The BSE Oil & Gas index witnessed an upward momentum during early morning hours on Thursday as the index advanced 0.7%. Indian Oil Corporation was contributing most to the index, gaining over 2%.
Among others, Indraprastha Gas was up 1.3%, Reliance Industries rose 1.2% and BPCL advanced 1%.
Fortis Healthcare tanks 6%
Shares of Fortis Healthcare tanked nearly 6% on Thursday following news reports that the Supreme Court has refused to grant permission to the company's promoters to sell their shares that they have pledged with banks and financial institutions.
Reacting to the development the stock slipped as much as 5.85 to Rs 145 on the BSE.
Reaffirming status quo order against promoters Malvinder and Shivinder Singh, SC reaffirmed that Singh brothers cannot sell both encumbered and non-encumbered assets in the company. The apex court also refused permission to banks seeking to sell pledged shares. READ MORE
Defence stocks gained
Reliance Defence and Engineering was trading up by nearly 7% at Rs 57.70 per share on BSE while Walchandnagar Industries was also trading up by 4.22% at Rs 146 per share on BSE.
11:31 AM Majestic Auto hits upper circuit
Majestic Auto hits its upper circuit, up 20% at Rs 122.4 after the company said it will consider sales of assets for an amount not exceeding Rs 300 crore.
Schaeffler India rose 13.07% to Rs 4,820 on BSE after the company said its board approved scheme of amalgamation of INA Bearing and LuK India with the company.
On the BSE, 2,592 shares were traded in the counter so far, compared with average daily volumes of 397 shares in the past one quarter. The stock had hit a high of Rs 4,998.85 and a low of Rs 4,719 so far during the day.
11:00 AM Central bank sees no bubble in stock markets
The central bank does not see a bubble in the stock market despite high valuations.
“No bubble is detected currently when stock prices have reached historical highs. The current rally in stock prices seems to reflect the strong macro fundamentals of the Indian economy, easy liquidity conditions prevailing in the system and buoyancy in global markets. Nonetheless, a constant vigil of stock prices may be warranted at this juncture, keeping in view the ramifications for financial and price stability,” said the Reserve Bank of India (RBI) in its annual report for FY17. READ MORE
Q1FY18 earnings a disappointment but equities still best investment bet
The latest earnings season (first quarter of the financial year 2018 - Q1FY18) was a disappointment. The results suggest that the underlying conditions in several sectors and the broader economy continue to be weak. Q1FY18 net profits of the Nifty-50 Index declined by about 10% Y-o-Y, much worse than consensus expectations. There have been downgrades in full year expectations for FY18 post first quarter results, but we believe that the expectations are still elevated.
Overall earnings growth in 1QFY18 was muted due to GST-related destocking and discounts in a couple of consumption related sectors and export/global oriented businesses continuing with the sluggish trend. READ MORE
Delisted firms to contest BSE order
The promoters of at least two dozen of the 200 companies that have been compulsorily delisted by the BSE plan to file a writ petition against the Securities and Exchange Board of India (Sebi) and the stock exchange. Their contention is that they are under liquidation and therefore not liable to follow the delisting process, which entails payout to minority shareholders.
Around 45 companies in the list of 200 are undergoing liquidation. These include Alpic Finance, Blue Bird, CFL Capital Financial Services, Dhanus Technologies, Koutons Retail India and DSQ Biotech. READ MORE
Experts expect growth at 6%
Gross domestic product (GDP) numbers for the April-June 2017 quarter will be released later in the day today. Sandwiched between the government’s demonetisation programme and the implementation of the goods and services tax (GST), most experts expect the GDP print to be around six per cent.
The economy clocked a 6.1 per cent growth rate in the January–March period — its lowest pace of growth in the past nine quarters, mainly due to demonetisation.
for a quick compilation of what the leading brokerages and research houses expect
Shareholders approve buyback
Wipro gains 1.5%, becoming the top gainer on BSE Sensex after the Board of Directors and shreholders approved the Rs 11,000-crore buyback of equity shares by the company
"The company has fixed Sept 15, 2017 as the record date for the purpose of detemining the entitlement and the names of shareholders who are eligible to participate in the buyback," the IT major said in a regulatory filing.
Drop in bank deposit rates to make mutual funds attractive
The reduction in interest rates on savings deposits is an opportunity for mutual funds (MFs) to popularise their low-risk debt offerings, says rating agency Icra.
A month ago, State Bank of India (SBI) announced a 50 basis points (bps) reduction in the interest rate on savings deposits, of less than Rs 1 crore million to 3.5%. Following SBI's lead, many other public and private sector banks have reduced the interest rates on saving deposits.
"This is expected to create an opportunity for liquid mutual funds to tap into retail savings, by providing an avenue for parking surplus liquidity while earning a premium over savings rate," said Icra in a release. READ MORE
9:41 AM RIL gains
Reliance Industries gained 1% after the company said it will make an offer for issuing nonconvertible debentures (NCDs) worth Rs 2,500 crore next week. The net proceeds of the issue will be utilised inter-alia for refinancing of existing borrowings and for any other purpose in the ordinary course of business, the company said.
NTPC fell 1.6% making it the top loser on BSE Sensex after the investor demand for the offer for sale (OFS) fell short as the govt raising only Rs 9,100 cr. The centre had put on block a total of Rs 13,800 crore worth of shares.
NTPC (NTPC IN): 31% positions have been rolled on the D-1 which is on the lower side. The near month OI of around 42 million shares is 7-day average daily volume in cash market. Roll levels during the day were ~ 59bps (profit to short roller adjusted to dividend). On the back of OFS, fresh arbitrage positions have been set up. As we expect these positions to get unwound resulting in selling action in the volume weighted average price (VWAP).
(Source: Edelweiss Research)
With a session left in August series, market-wide rollovers moved to 53% compared to average rollovers of 57% (last three series). Market wide futures open interest (OI) is around Rs 1.36-lakh crore as compared to Rs 1.4-lakh crore on the D-1 of July expiry. Average roll levels across stock futures were ~48-50bps (cost to long rollers) in most of the names. Nifty has rolled 37% as compared to average rollovers of 58% (last three series). Although roll levels have been under pressure, we believe most of the short aggression is nearing an end.
(Source: Edelweiss Research)
9:26 AM Sectoral trend
9:25 AM Realty index was the top sectoral gainers led by gains in Delta Corp, Godrej Properties, Oberoi Realty and Unitech
9:22 AM Top gainers and losers on BSE Sensex
9:19 AM Broader Markets
In broader markets, while BSE Midcap index was in line with the benchmark indices, down 0.06%, the BSE Smallcap index underperformed. It was trading 0.3% lower.
9:18 AM Markets at open
Benchmark indices open flat as investors stay on egde ahead of the expiry of August series F&O contracts.
At 9:17 am, the S&P BSE Sensex was trading at 31,630, down 15 points while the broader Nifty50 index was ruling at 9,875, down 9 points.
9:05 AM Stocks to watch
NTPC, ONGC, RIL, Maruti Suzuki, Tata Motors, DHFL, Fortis Health, Biocon and Ajanta Pharma are few of the stocks to watch out for in today's trade
Current price: Rs 280
Target price: Rs 285
Keep a stop at Rs 277 and go long. Add to the position between Rs 282 and Rs 283. Book profits at Rs 285.
Current price: Rs 236
Target price: Rs 240
Keep a stop at Rs 234 and go long. Add to the position between Rs 238 and Rs 239. Book profits at Rs 240.
Harvey floods US refineries, roils global fuel markets
Tropical Storm Harvey further damaged the heart of the US energy industry on Wednesday, churning into Louisiana after flooding the biggest US refinery in Texas, forcing major pipelines to halt operations and threatening a supply squeeze for weeks.
Benchmark US gasoline prices and margins surged to two-year highs as Colonial Pipeline, the biggest US fuel system, said it would shut its main lines to the Northeast by Thursday, hit by outages at pumping points and lack of supplies from refiners.
CLSA's top India bets
As the capex-cycle recovery sets in, earnings growth can improve materially for corporate banks ICICI and SBI), giant E&C player L&T and cement (Ambuja). The expected housing boom should augur well for housing-finance companies, buildingmaterials names (cement firms and Astral) and property developers (Godrej Properties). We also like IndusInd, Jubilant Foodworks and metals players (Vedanta and JSW Steel).
Govt mops up Rs 9,100 cr through NTPC share sale
The government has raised Rs 9,100 crore through a share sale in power utility NTPC. The investor demand for the offer for sale (OFS) fell short as the centre had put on block a total of Rs 13,800 crore worth of shares.
The OFS saw a total of 548 million bids against 824 million shares on offer, which includes the green-shoe portion. The retail portion of the share sale saw only 73 per cent subscription on Wednesday. Shares of NTPC closed at Rs 168, also the floor price for the OFS. Retail investors were offered an additional five per cent discount. READ MORE
NTPC Photo: Wikipedia
Top trading ideas from Prabhudas Lilladher:
INDIA CEMENTS - BUY
CMP: Rs 173.90
TARGET: Rs 192
STOP LOSS: Rs 165
SPECIALITY RESTAURANTS - BUY
CMP: Rs 121.55
TARGET: Rs 135
STOP LOSS: Rs 113
HINDUSTAN OIL EXPLORATION - BUY
CMP: Rs 82.40
TARGET: Rs 89
STOP LOSS: Rs 80
Nifty view from Prabhudas Lilladher:
Nifty technically continues to make lower top on daily chart, however after making a low at 9,700 levels the RSI is showing signs of bounce back, now having the near term resistance level of 9,950. However, the support for the day is seen at 9,840 while resistance is seen at 9,930.
Market outlook for the day
Nifty closed well in the positive territory in Wednesday's trading session reaching almost the upper end of the range. The range for the Index is 9950-9740 levels and in this process of consolidation it has formed a symmetrical triangular pattern. Now, since it has reversed from the upper end of the range it is likely to again fall towards the lower end of the range i.e. 9800 at least in the short term.
The momentum indicators on the weekly charts are well into the sell mode which indicates that the bears have an upper hand. However, if 9950 levels get taken off then a new high can be expected till then aggressive long positions should be avoided
(Source: Anand Rathi Research)
Almost all banned notes back in banking system
The Reserve Bank of India (RBI) on Wednesday said it estimated that people had returned almost 99 per cent of the scrapped Rs 1,000 and Rs 500 notes after demonetisation, effectively putting a question mark over the government gaining handsomely by the unreturned money turning into a special dividend by the central bank.
In its annual report, the RBI also said the face value of fake high-value notes was minuscule at Rs 41 crore.
The central bank said people had returned Rs 15.28 lakh crore of the Rs 15.44 lakh banned currency, or 98.96 per cent of the scrapped Rs 500 and Rs 1,000 notes, to the banking system. READ MORE
The Nifty50 futures on the Singapore Stock Exchange were trading 20 points lower at 9,860 indicating a flat opening for the domestic market.
8:44 AM Asian Markets
Investors rediscovered a taste for the dollar and Asian shares on Thursday as upbeat Chinese and U.S. economic news whetted appetite for riskier assets globally, even as tensions over North Korea simmered in the background.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%, leaving it a modest 0.7% firmer for the month so far.
Japan's Nikkei .N225 rose 0.6% to its best level in two weeks, helped by a pullback in the yen. The index was still down 1.5% on the month, however.
South Korea’s Kospi index fluctuated after a Twitter post on North Korea from US President Donald Trump.
Gross domestic product was revised higher to show a 3% annual growth rate in the second quarter, due partly to robust consumer spending as well as strong business investment.
Wall Street gains in overnight trade
US stocks rose on Wednesday after stronger-than-expected US economic growth outweighed concerns about escalating tensions between the United States and North Korea and uncertainty in the aftermath of Hurricane Harvey
The Dow Jones Industrial Average rose 27.06 points, or 0.12%, to end at 21,892.43, the S&P 500 gained 11.29 points, or 0.46%, to 2,457.59 and the Nasdaq Composite added 66.42 points, or 1.05%, to 6,368.31.
8:39 AM Good Morning and Welcome to market's live blog. Catch all the live market action here
First Published: Thu, August 31 2017. 15:34 IST