Markets rundown by Jayant Manglik, President, Retail Distribution, Religare Securities
Markets ended almost flat in a volatile session today, pressurized by weak global cues. The news of another missile test by the North Korea led a feeble start but buying in select index majors pared losses completely in the middle. However, profit taking in last half an hour again pushed the bulls slightly on the back foot. Amid all, only IT index managed to close with the decent gain while majority ended flat.
3:46 PM Pharma falls
The Nifty Pharma Index was down 0.5%, breaking its three-day winning streak.
Dr. Reddy’s Laboratories and Aurobindo Pharma, which gained in the last three sessions, fell 2% and 1.3%, respectively.
State-owned Oil and Natural Gas Corp however rose over 4.4%, the top percentage gainer on the NSE index, snapping a three-session losing run on rising crude oil prices as demand outlook brightens.
3:38 PM Top Sensex gaienrs and losers for the day
3:36 PM Broader Markets
Among broader markets, BSE Midcap index underperformed the benchmarks indices, down 0.3% while BSE Smallcap index was up 0.4%
3:35 PM Markets at close
Equity benchmarks rebounded in last hour of trade, but ended flat supported by index heavyweights Reliance Industries, HDFC Bank and Infosys. The indices were up 1% for the week.
The S&P BSE Sensex settled at 32,272, up 30 points while the broader Nifty50 index ended at 10,085, down 1 point
Revival or just low base? FMCG volume sales grew 6% in July
The local fast-moving consumer goods (FMCG) market grew six per cent by volume in July, triggering hope of a revival in the sector that was struggling to grow. Data from consumer analytics firm Kantar Worldpanel, show that recent growth was aided by 12% expansion of the rural FMCG market and seven per cent growth in overall foods and beverages (F&B) category.
A detailed analysis of historical data, however, reveals that a low base may have played a key role in the recent uptick in the sale of chips, biscuits, shampoos, and soaps. READ MORE
MIRC hits upper circuit
MIRC Electronics has hit the upper circuit for the second straight day, up 20% at Rs 24.16 on BSE after the company on Wednesday reported nearly four-fold jump in net profit at Rs 4.50 crore in June quarter (Q1FY18).
The company engaged in consumer electronics business had reported a profit of Rs 1.16 crore in a year ago quarter.
Net sales during the quarter, however, declined by 14% to Rs 207 crore against Rs 240 crore in the corresponding quarter of previous fiscal.
2:57 PM Oil Check
Oil prices were lower on Friday but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone.
US West Texas Intermediate crude was down 17 cents, or 0.4%, at $49.72 a barrel. It briefly broke above $50 on Thursday, hitting a four-month high, and finished 1.2% higher at $49.89, its highest close since July 31.
2:49 PM Bombay Burmah gains
Bombay Burmah Trading Corporation gained 11% to Rs 1,188 on back of more than two-fold jump in trading volume. The company engaged in tea & coffee business has rallied 36% from Rs 871 on August 3, after it reported a good set of numbers for June quarter (Q1FY18). The company’s net losses narrowed to Rs 1.69 crore in Q1FY18 from Rs 3.67 crore in a year ago quarter.
Wipro bags 7-yr data centre services deal
India's third largest software services firm Wipro today said it has bagged a seven-year contract from European energy company, innogy SE.
The financial details of the contract, which will see Wipro managing the data centre and cloud services for innogy SE, were not disclosed.
As part of the agreement signed in November 2016, "innogy transferred its twin data centres in Neurath and Niederaussen in Germany to Wipro on February 1, 2017," Wipro said in a BSE filing on . READ MORE
Britannia hits a new high
Britannia Industries hit a new high of Rs 4,380 on BSE in intra-day trade, extending its 12% gain since August 3, post Q1FY18 results.
“Britannia is continuously investing in research and development facilities for new innovations and new range of products, which will accelerate product innovations in new categories and also help the company to pick up further growth,” according to analyst at Karvy Stock Broking.
Bombay Dyeing & Manufacturing Company has appreciated over 100% in the past one month on the BSE.
Bombay Dyeing is locked in upper circuit of 5% at Rs 175 on the BSE. The stock has no sellers on the counter. A combined 1.86 million shares changed hands and there were pending buy orders for 1.36 million shares on BSE and NSE.
The company’s net loss had narrowed to Rs 33 crore in Q1FY18, against loss of Rs 44 crore in a year ago quarter. Its revenue for the Q1FY18 came in at Rs 623 crore, registering 31% Year on Year (YoY) increase. This was primarily driven by 137% YoY increase in revenues from real estate segment. Earlier, this month, it sold 48.457 acres of freehold land situated at district Pune, Maharashtra for Rs 13.57 crore.
Chris Wood of CLSA on mutual fund flows & portfolio strategy
Net inflows into Indian equity mutual funds surged to a record high in August. This was prompted by locals “buying the dip” after a 4.2% decline in the Sensex last month. GREED & fear’s base case is that these inflows continue.
The investment in BDO Unibank in the Asia ex-Japan long-only portfolio will be removed and replaced by an investment in H-share listed China Construction Bank. A 3% investment will be initiated in Indian consumer finance play Indiabulls Ventures. This will be paid for by shaving the existing investments in HDFC Bank, Indiabulls Housing Finance and Bajaj Finance by 1ppt each
(Source: GREED & fear, a weekly note to investors)
Nomura on bullet train project moving ahead
The Governments of Japan and India have agreed to implement the Mumbai Ahmedabad bullet train system at a total cost of $17 billion and targets to complete it by 2023. We believe the 2023 timeline will be extremely difficult to meet given the complexities involved in constructing the project. Nevertheless, the project could bring in opportunities for both equipment manufacturers as well as construction companies. Larsen & Toubro is a key play on this story, in our view, especially given its success in dealing with Japanese companies for JVs during construction contracts for the Dedicated Freight Corridor project
Angel Broking on markets
The kind of activity we are observing since last couple of days is quite obvious as traders seemed a bit unsure whether the market has the strength to cross record highs or not. Hence, the next round of momentum in the upward direction is possible only after surpassing this hurdle. Until then we are likely to witness similar kind of uncertainly in a range of 10000 – 10138 (Nifty) with slightly higher volatility. At present, one needs to closely keep a track of these important levels on the index and meanwhile, keep focusing on individual stocks in order to obtain better trading opportunities
Reliance Securities on Axis Bank
Axis Bank has started FY18 with positive surprise on asset quality front led by sequentially lower fresh slippages, moderation in credit cost along with stable overall asset quality. Its Watch List has substantially declined to 2.1% of total loan book from the level of 6.7% in Mar’16, which clearly indicates that the Bank is approaching the end of recognition of stressed loan.
This along with PCR (including technical W/O) at 65% and specific PCR at 56% gives comfort to credit cost outlook for next 4-6 quarters. Further, we expect sharp moderation in credit cost from FY19 onwards. We continue our BUY recommendation on the stock with a target price of Rs 600 based on 2.3x FY19 Adjusted book value.
1:44 PM Shares of Wadia Group Companies are on roll with Britannia Industries and Bombay Burmah Trading Corporation hitting their respective record highs, while Bombay Dyeing & Manufacturing Company has appreciated over 100% in the past one month on the BSE. CLICK HERE FOR THE FULL STORY
Mistrys to vote against Tata Sons move to become a private limited company
Cyrus Investments, one of Shapoorji Pallonji family's holding companies, has objected to Tata Sons’ attempt to convert the primary holding company of the $104-billion Tata Group to a private limited company from a public limited one, saying it amounts to oppression of minority shareholders.
The Mistry family holds 18.4 per cent equity stake in Tata Sons. READ MORE
1:28 PM Europe Check
European stocks opened lower after North Korea sent another missile over Japan into the Pacific Ocean.
The pan-European Stoxx 600 was 0.14% lower with most sectors moving south.
1:12 PM Market check
At 1:12 pm, the Sensex was trading at 32,192, down 49 points, while the broader Nifty50 was ruling at 10,060, down 26 points.
Markets rule out war at this stage, say analysts
Most Asian markets have given a muted response to North Korea firing another ballistic missile over Japan on Friday. While the Nikkei 225 and Hang Seng indices posted modest gains – up 0.3% - 0.5%, Straits Times, Kospi and the Shanghai Composite slipped up to 0.3%. Back home, the S&P BSE Sensex and the Nifty50 were also trading lower by around 0.2% each. READ FULL REPORT
ONGC, Oil India trade firm
Shares of Oil and Natural Gas Corporation (ONGC) and Oil India were trading higher by up to 4% on BSE in an otherwise subdued market on rising crude oil prices as demand outlook brightens. ONGC was the top gainer on Sensex and Nifty. READ MORE
Equirus on Sun Pharma
Sun Pharmaceutical’s (SUNP) FY17 Annual Report emphasizes the company’s efforts on building its specialty pipeline; while this is encouraging, SUNP’s high initial investments (development costs, sales force build-up) would keep its near-term earnings muted. Meanwhile, management commentary suggests no medium-term respite from
competitive pressures in the US.
We retain REDUCE on the stock with a Dec’18 target price of Rs 472, derived by assigning 23x P/E (unchanged) and valuing the Tildrakizumab opportunity at Rs 25/share.
12:02 PM Buzzing stock
Manpasand Beverages touched a record high of Rs 1,024, up 13% on BSE in intra-day trade, extending its eight-session long rally, after the company entered into an exclusive tie-up with Parle Products. In past nine trading sessions, the stock has rallied 29% from Rs 796 as compared to 1.5% rise in the S&P BSE Sensex. READ MORE
Higher metal prices to erode India Inc's margins
The recent rise in metal prices in the international market could deal a double whammy to corporate India, which is struggling with poor volumes and revenue growth after demonetisation and the economic disruption caused by the roll-out of the goods and services tax in July.
Metal prices are up nearly 22 per cent on average during the year so far, pushing up manufacturing costs for Indian companies. The raw materials cost as a proportion of net sales is up around 50 basis points in the last two quarters and 230 basis points above the lows of the March 2015 quarter. READ FULL ANALYSIS
Broader markets underperform
The BSE Midcap and the BSE Smallcap indices shed 0.6% and 0.3%, respectively, in the late morning deals.
Nifty slips below 10,050
At 11:15 am, the Sensex was trading at 32,140, down 101 points, while the broader Nifty50 was ruling at 10,045, down 41 points.
Commodity derivatives markets caught in a downturn
The commodity derivatives markets are caught in a severe downturn. Annual aggregate volumes in commodity derivatives have fallen to their lowest level since 2010 and, at Rs 178.5 trillion (Rs 1 trillion = Rs 1 lakh crore), are a third of the peak seen in 2011-12. READ FULL REPORT HERE
10:49 AM Buzzing stock
JBM Auto hit a new high of Rs 624, up 6%, extending its Thursday’s 7% rally on BSE on back of heavy volumes. The stock of auto ancillary Company has more than doubled in past five weeks. It zoomed 101% from Rs 310 on August 8, 2017 as compared to 3% rise in the S&P BSE Sensex. READ MORE
10:30 AM What mutual funds bought and sold in August
India’s equity fund managers went all out buying in August. Backed by robust investor flows, equity mutual funds (MFs) used market weakness as an opportunity to deploy more cash. Power utility NTPC topped the most-bought list. READ MORE HERE
Wipro nudges higher
Wipro rose marginally to Rs 285 after the company announced that it has been awarded a seven year contract by innogy SE, an European energy company, to manage their data center and cloud services.
FY19 Budget likely on Feb 1
The finance ministry on Wednesday issued an official circular to begin the process of drafting the Union Budget for 2018-19. While no date was given as to when Finance Minister Arun Jaitley would table the Budget in Parliament, the document stated the final estimates for schemes and other expenditures should be decided by January 15, 2018. READ MORE
Tata Sons plans to go private limited
In a notice to its shareholders ahead of the annual general meeting (AGM) scheduled for September 21, Tata Sons has sought approval to amend its memorandum of association and articles of association to convert itself from a public limited company to a private limited one. It has also sought to change the name of the company from Tata Sons Limited to Tata Sons Private Limited. READ FULL REPORT HERE
9:44 AM Buzzing stock
Auto Parts and Equipment company Asahi India Glass rallied over 3% to Rs 419 after the company clarified to BSE that the news reports claiming that the Japanese promoter is likely to buy a controlling stake in th company are "completely untrue and baseless".
Nifty outlook by Angel Broking
The kind of activity we are observing since last couple of days is quite obvious as traders seemed a bit unsure whether the market has the strength to cross record highs or not. Hence, the next round of momentum in the upward direction is possible only after surpassing this hurdle. Until then we are likely to witness similar kind of uncertainty in a range of 10,000-10,138 with slightly higher volatility.
At present, one needs to closely keep a track of these important levels on the index and meanwhile, keep focusing on individual stocks in order to obtain better trading opportunities.
9:27 AM Sectoral trend
Among NSE indices, all but Nifty IT was trading in red.
9:25 AM Sensex heatmap at open
Broader markets flat
Broader markets remained little changed with the BSE Midcap and the BSE Smallcap indices trading on the flat line.
Markets at open
At 9:20 am, the Sensex was trading at 32,205, down 36 points, while the broader Nifty50 was ruling at 10,072, down 14 points.
Stocks in news
Tata Teleservices, HDFC, Wipro, ICICI Bank, Maruti Suzuki, Sun TV, Tata Steel etc
The Sensex was trading at 32,237, down 4 points, while the broader Nifty50 was ruling at 10,058, down 28 points in pre-open trade.
Devangshu Datta on Nifty, Bank Nifty, Infoys, Mahindra & Mahindra and Vedanta. READ MORE HERE
Technical calls by Prabhudas Lilladher
Derivative Strategy on IDFC
Gold prices rise
Gold prices rose to pull further away from a two-week low, after North Korea fired another missile over Japan, triggering the latest round of safe-haven buying in markets while weighing on the dollar.
Spot gold was up 0.3% to $1,333.06 an ounce after dropping to its lowest since August 31 at $1,315.71 in the previous session. U.S. gold futures for December delivery gained 0.6% to $1,337.40 an ounce.
Asian markets open lower
Asian markets were trading lower. Japan's Nikkei were almost flat while South Korea's Kospi and Australia's main index both dipped 0.3%. MSCI’s Asia-Pacific share index excluding Japan was down 0.1%. China's Shanghai Composite and Hong Kong's Hang Seng indices were down 0.3% and 0.5%, respectively.
US stock futures drop
US stock futures dipped and the yen rose after North Korea fired another missile over Japan into the Pacific Ocean on Friday. US stock futures fell 0.2% while the dollar fell to as low as 109.55 yen from around 110.20 in late US trade on Thursday. It last stood at 109.98 yen.
North Korea launches another missile over Japan
North Korea launched a missile that flew over northern Japan before plunging into the Pacific Ocean, the South Korean military said. The still-unidentified missile was launched around 6.30 a.m. (local time) from east of Pyongyang, the North Korean capital, according to South Korea's military Joint Chiefs of Staff. READ MORE
North Korea Supreme Leader Kim Jong-un
At 8:45 am, SGX Nifty, Nifty futures being traded on Singapore Stock Exchange, was trading at 10,072, down 51 points or 0.51%.
8:47 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Fri, September 15 2017. 15:31 IST