Market rundwn by Anand James, Chief Market Strategist of Geojit Financial Services
Updates of military action in the Eastern border impelled the market to hasten the market’s falls which was already in a slippery slope ahead of F&O expiry. Sharp weakness in rupee and a rise in VIX also meant that risk takers were few. FII being reluctant buyer in Indian equities this month, and a volley of IPOs had earlier meant that the secondary market was finding hard to sustain at the 20 month peaks.
3:45 PM Pharma was one of the biggest sectoral loser, down nearly 3% with Divi's Lab down over 10% for the day.
3:43 PM Markets Check
Nifty ended the day at 1.5 month low while the BSE Sensex settled at 3-month low. In broader markets, the BSE Midcap and BSE Smallcap indices shuts at 5-week low
3:42 PM Sectoral Trend
3:39 PM Nifty PSU Bank index ends at 2.5 month low
Nifty PSU Bank index fell over 3% with all constituents trading in red.
3:36 PM Top Sensex gainers and losers
3:35 PM Broader Markets
The broader markets underperformed the benchmark indices with the BSE Midcap and BSE Smallcap indices down 2% each
3:34 PM Markets at close
Benchmark indices fell over 1% on Wednesday, losing for seventh straight session, their longest losing streak in over nine months, after army conducted operation along India-Myanmar border.
The S&P BSE Sensex settled at 31,159, down 439 points while the broader Nifty50 index ended at 9,735, down 135 points
Army conducts operation along India-Myanmar border
The Army today inflicted "heavy casualties" on NSCN(K) cadre during an operation along the India-Myanmar border, the Eastern Command said today. READ MORE
3:14 PM Buzzing Stock
Alstom shares rose nearly 5% following confirmation that the French firm will merge with Siemens.
The companies will merge their rail operations and have decided to make Alstom's Henri Poupart-Lafarge their chief executive.
3:06 PM Market Check
The benchmark indices extended losses amid Indo-Myanmar border tensions. At 3:06 pm, the S&P BSE Sensex was trading at 31,191, down 408 points while the broader Nifty50 index was ruling at 9,744, down 127 points.
Over 700 new FPIs registered with Sebi in April-July
More than 700 fresh foreign portfolio investors (FPIs) were registered with Sebi in the first four months of 2017-18, indicating that India remains an attractive destination, latest data from the regulator showed.
This comes on top of close to 3,500 new FPIs registering with Sebi in the previous financial year.
According to Sebi data, the number of FPIs with the regulator's approval rose to 8,511 at the end of July 2017, from 7,807 at March-end, an addition of 704. READ MORE
Nifty PSU Bank index hits 8-month low; down 7% in one week
Shares of public sector banks (PSBs) continued to trade under pressure with Nifty PSU Bank index falling 7% in the past one week on concerns of the growth slowdown.
Nifty PSU Bank index hit its eight-month low of 3,030 on the National Stock Exchange (NSE) in intra-day trade. The index was trading at its lowest level since January 23, 2017.
State Bank of India (SBI), Andhra Bank, Union Bank of India, Bank of India, Oriental Bank of Commerce and Bank of Baroda from the Nifty PSU Bank index were down in the range of 2% to 3%. READ MORE
2:47 PM Sectoral Trend
Poor gross domestic product (GDP) growth in two successive quarters - 4QFY17 and 1QFY18 - has changed the growth prospects for FY18, says India Ratings and Research (Ind-Ra). The combined effect of demonetisation and introduction of goods and services tax (GST) is proving to be more disruptive for the economy than was expected earlier. While the introduction of GST cannot be faulted on account of its eventual benefit to the economy, the same cannot be said about the impact of demonetisation.
Ind-Ra believes GDP growth will recover quarter-on-quarter in 2QFY18 with impact of demonetisation waning, teething problem arising out of GST implementation being looked into by the government and the festival season round the corner. However, it is unlikely to meet the agency’s earlier projection of 7.4% and will come down to 6.7% during FY18.
(Source: India Ratings note)
2:31 PM Markets Check
The benchmark indices fell further, heading towards seventh straight session of losses after the rupee sank to a more than six-month low on foreign fund outflows.
At 2:33 pm, the S&P BSE Sensex was trading at 31,257, down 341 points while the broader Nifty50 index was ruling at 9,752, down 118 points
Sector watch: Tea
Global tea production is likely to record a decline in CY2017, primarily on the back of crop losses in Kenya, which accounts for around 16% of the total black tea production globally. Given Kenya’s status as one of the world’s largest exporters of black tea, production levels from the country are likely to have a considerable impact on global demand-supply dynamics for the year.
The Sri Lankan crop levels, which contribute to around 10% of global tea production, are also low. According to ICRA, the reduced global availability of tea is likely to result in the continuation of an upward price trajectory across most international auction centres, which, in turn, would support Indian price trends going forward.
The likely increase in realisations over the near term is expected to have some favourable impact on the performance of Indian bulk tea players in FY2018, notwithstanding the continuing cost pressures, mainly attributable to increasing wage rates.
(Source: ICRA note)
Prabhudas Lilladher on Persistent Systems
Persistent is showing waning margin trajectory over the past few quarters which is a concern. IBM's IoT deal led to a ~220bps YoY EBITDA margin drop in FY17 (EBITDA margin at 15.8% for FY17). We note that Q1FY18 EBITDA margin at 14.3% is at a multi-quarter low. Traction in Digital-led offerings might also necessitate higher onsite-led delivery which could be a margin headwind. Management guided that margins could expand sequentially over the next three quarters of FY18.
We model Persistent's USD revenues to grow by 11.3/13.1% for FY18/FY19E and EBITDA margins to 15.5/16.5% for FY18/FY19E (v/s 15.8% EBITDA margin in FY17). Our EPS estimates are at Rs41.1/47.5/sh for FY18/FY19E. Stock trades at 13.4x FY19E EPS, which is at premium to select large cap stocks. While Persistent is showing revenue growth momentum, margin discipline is key in our view. Our target price is retained at Rs710/sh (14x June19E EPS).
Prabhudas Lilladher on BEL
We attended BEL's analyst meet and returned confident of maintaining our bullish stance on the company as the prospects remain firm in the near/medium term. BEL is a key beneficiary of increasing focus in modernization of current fleet and procurement of new capital equipment by government. We continue to believe BEL offers good investment opportunities to investors who want to invest in the Indian Defence sector with a long-term view. We expect stock to deliver earnings CAGR of 14.5% over FY16-19E. Maintain 'BUY' with a target price of Rs214.
Largely as a result of an upgrade to the eurozone, we have revised up our global growth forecast by 0.1% to 2.8% in each of 2017 and 2018. This compares with a 2.5% average between 2011 and 2016 so is good news but much less spectacular than the recent stellar financial market performance. Our global inflation forecasts have ticked down fractionally - to 2.6% in 2017 and 2.5% in 2018
2:22 PM Divi's Labs dips 9%
Divis Laboratories fell 9% to Rs 872 on BSE after media reports suggested that the company's Vizag unit 2 received six observations from the US drug regulator.
2:12 PM Slips in trade
Hindustan Unilever (HUL) was down 2.4% to Rs 1,189 in intra-day trade, extending Tuesday’s 2.3% fall on the BSE. The fast moving consumer goods company (FMCG) on Monday, in investor presentation said that the early part of September quarter was affected by various myths in trade.
But, the trade situation improving gradually with wholesale channel now stabilizing, it added.
The stock has fallen 7.5% from its record high of Rs 1,286 touched on September 19, 2017. On comparison, the S&P BSE Sensex was down 3% during the same period.
2:03 PM Europe Check
European markets opened higher on growing expectations of another rate hike in the United States before the year-end.
The pan-European Stoxx 600 was 0.16% higher with most sectors trading in positive territory.
Janet Yellen, the chair of the US Federal Reserve said Tuesday that it would be "imprudent" to keep monetary policy on hold waiting for inflation to reach 2 percent and that moving "too gradually" could be risky. The US dollar and bond yields jumped Wednesday on such remarks.
RBI to keep rates unchanged in October, cut growth forecast: Poll
The Reserve Bank of India will hold policy steady at its Oct. 4 meeting, and well past next year, amid weak economic growth and signs inflation may soon overshoot its target, a Reuters poll found.
Asia's third-largest economy started losing momentum after the government scrapped 86 percent of currency in circulation late last year, hurting demand in India's cash-reliant economy, and the slowdown was compounded by the implementation of a new tax system.
The latest poll of 60 economists showed although the RBI will hold its key repo rate at a seven-year low of 6 percent next week, it will downgrade its growth forecast again following disruptions caused by the new tax. READ MORE
1:37 PM Buzzing stock
Shriram Transport Finance Company jumped 5.63% to Rs 1,064 on BSE on reports that the company and IDFC decided to abandon the merger plan worked out in July this year.
1:22 PM Nifty Bank falls over 1%: All constituents trade in red
At 1:00 pm, the Sensex was trading at 31,366, down 232 points, while the broader Nifty50 was ruling at 9,799, down 71 points.
Mukesh Ambani at India Mobile Congress
India has potential to lead 4th industrial revolution
Mukesh Ambani at India Mobile Congress
In next 10 years, Indian economy will grow to over $7 trillion
Mukesh Ambani at India Mobile Congress
4G coverage in India will become larger than 2G in next 12 months
Shares of cable television companies Den Networks and Hathway Cable & Datacom rallied by upto 13% on BSE in an otherwise weak market on back of heavy volumes.
Den Networks surged 13% to Rs 99.15 on BSE on back of seven-fold jump in trading volumes after media report suggests that Reliance Industries in talks to acquire the company. READ MORE
Use arbitrage funds to park short-term money
Arbitrage funds are gaining in popularity among investors, as is evident from the growing assets under management (AUM) of this category. Seventeen funds had a cumulative AUM of Rs 43,651 crore at the end of August, an increase of 36 per cent over a year. In a declining interest rate environment, knowledgeable retail investors might consider investing in these. READ FULL ANALYSIS
12:01 PM Buzzing stocks
MOIL and Manpasand Beverages were down 3% each on the BSE after the two stocks traded at their adjusted price of 1:1 bonus shares. READ MORE
Soon, trade in commodities at a nearby bank
Soon, your neighbourhood banker would be able to offer you trading in derivatives of gold, crude oil or even some of the agricultural commodities. The Reserve Bank of India (RBI) has opened the way for large banks to enter commodity broking services, through subsidiaries. The move could help substantially expand the client base of the commodity derivatives market, at a time it is bringing in new products such as options. READ FULL REPORT
Broader markets pare gains
BSE Midcap and the BSE Smallcap indices pared morning gains to slip 0.5% and 0.1%, respectively.
11:05 AM Markets check
At 11:00 am, the S&P BSE Sensex was trading at 31,399, down 200 points, while the broader Nifty50 was ruling at 9,807, down 64 points.
Petron Engineering Construction is locked in upper circuit for the third straight session, up 5% at Rs 147 on BSE, extending its past two days 9% gain, after the company said it has received purchased order worth of Rs 280 crore from JSW Steel. READ MORE
Trading strategies for a falling rupee
There are fundamental reasons why the rupee might slide more versus euro, pound and above all, the dollar. Real rupee interest rates would reduce if domestic inflation rises and the Reserve Bank of India (RBI) doesn’t raise policy rates. CLICK HERE TO READ MORE
New kid on the block
ICICI Lombard General Insurance Company listed at Rs 650, 2% lower that its initial public offer (IPO) price of Rs 661 per share on the BSE. The stock listed at Rs 651 on the National Stock Exchange (NSE). Post listing, the stock hit a high of Rs 655 and a low of Rs 638 on BSE so far. CLICK HERE FOR FULL REPORT
Rupee extends weakness
After opening higher, rupee depreciated 10 paise to 65.54 against Tuesday's closing of 65.45 against dollar.
9:48 AM Buzzing stock
Sun Pharma slipped over 2% to Rs 490 after the pharma major's 25th Annual General Meeting held on Tuesday. The stock was the top loser on Sensex and Nifty.
India's share in global m-cap at 7-month low
Recent fall in rupee and stocks pushes down ranking; Nifty is down around 5% in dollar terms so far this month. CLICK HERE FOR FULL REPORT
Broader markets outperform
The BSE Smallcap index added nearly 1%, while the BSE Midcap index was up 0.4%.
9:26 AM Nifty Pharma index leading sectoral loser
The index was down nearly 1%, led by losses in Divi's Labs and Sun Pharma.
9:22 AM Sensex heatmap at open
9:20 AM Markets at open
At 9:18 am, the S&P BSE Sensex was trading at 31,634, up 34 points, while the broader Nifty50 was ruling at 9,876, up 4 points.
Stocks in news
ICICI Lombard, YES Bank, Coal India, Reliance Power, Reliance Securities, Divi's Labs, Dr Reddy's, Aurobindo Pharma and Den Networks
Nifty outlook by Angel Broking
The kind of activity that we saw yesterday provides a lot of credence to the 9,800 mark. This was evident as the expiry factor came into picture and it seems the Nifty is reluctant to slip below this support level in the current expiry.
The overall trend remains weak but we believe that the index is likely to consolidate in a range of 9,800-9,950 before resuming its corrective move. For the coming session, 9,890-9,950 would be seen as a resistance zone.
9:06 AM Pre-open trade
At 9:05 am, the S&P BSE Sensex was trading 178 points higher at 31,778, while the Nifty50 was ruling at 9,923, up 52 points.
Rupee opens stronger
Rupee appreciated by 10 paise to 65.35 against Tuesday's closing on 65.45 against dollar.
Buy Atul Auto
CMP: Rs 471
Stoploss: Rs 448
Target: Rs 520
Nifty outlook by HDFC Securities
Next support for the Nifty is seen at around its 100-DMA, which is placed around 9,730. Previous bottom on the daily chart is seen at 9,685, which can also act as a support. Primary trend of the Nifty is bullish, but short term trend has turned negative. It would be advisable for traders not to initiate aggressive longs unless Nifty surpasses the resistance of 10,000.
Market-wide rollover of September F&O contracts came in at 37% till Tuesday, which was in line with the average rollovers of 36% seen in last three series. Nifty rollovers stood at 31% and were also in line with the average rollovers of last three months.
8:50 AM Asian markets
Asian stocks hovered near multi-week lows as tensions in the Korean peninsula remain elevated. MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.1% at three-week lows following bellicose statements by Trump and North Korean leader Kim Jong Un.
Even a softer yen could not stop Japan's Nikkei slipping 0.5%, while Australia's main index eased 0.1%. Hong Kong's Hang Seng index gained 0.4%, while China's Shanghai Composite remained little changed.
Wall Street on Tuesday
The S&P 500 ended flat on Tuesday and the Nasdaq posted modest gains as technology shares bounced from sharp losses in the prior session and comments from Fed Chair Janet Yellen boosted expectations of a December rate hike.
The Dow Jones Industrial Average fell 10.05 points, or 0.05% to 22,286.04, the S&P 500 gained 0.23 points, or 0.01% to 2,496.89 and the Nasdaq Composite added 9.57 points, or 0.15% to 6,380.16.
At 8:40 am, SGX Nifty was trading at 9,899, up 43 points or 0.43%.
8:40 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Wed, September 27 2017. 15:30 IST