Vinod Nair, Head of Research, Geojit Financial Services
Market faced the heat of selling pressure and finally ended below 10,000 as the Sebi's call to put restrictions on shell companies raised concern in investor’s mind. In the meantime, the metal stocks stole the show which outperformed the major indices and countered the slid to some extent.
SEBI Order: VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services
The Sebi action against shell companies is part of the government's grand design to reset Indian economy. Demonetisation, GST, the crackdown on black money, and many more measures that will follow, will ultimately lead to a cleaner, healthier and faster growing economy. This is a highly desirable and welcome move.
3:58 PM Sintex Plastics makes a tepid debut, closes in lower circuit of 5%. READ FULL REPORT HERE
3:47 PM Nifty Realty index leading sectoral loser
Shares of real estate companies were under pressure with Nifty Realty index losing nearly 5% intraday. Housing Development and Infrastructure Limited (HDIL), Indiabulls Real Estate, DLF and Unitech from Nifty Realty index were down more than 5% each.
3:43 PM Sensex heatmap at close
3:40 PM Adavance-decline ratio
The market breadth depicted weakness. There were more than three losers against every gainer on BSE. 1,982 shares declined and 603 shares rose. A total of 122 shares were unchanged.
3:39 PM Broader markets underperform
Broader indices underperformed with the BSE Midcap and the BSE Smallcap indices losing over 1% each.
3:38 PM Markets at close
The Sensex settled the day 259 points lower at 32,014, while the broader Nifty50 ended below its crucial 10,000-mark. The 50-share index quoted 9,978, down 78 points.
3:28 PM Suspected shell company Prakash Industries zooms 208% in 2017. CLICK HERE FOR DETAILS
3:25 PM Century Textiles hits lifetime high
Century Textiles & Industries surged 5% to hit its all-time high of Rs 1291 after the company's net profit spurted 1761.3% to Rs 120.24 crore for the June quarter.
3:10 PM European markets
European markets were trading lower. The pan-European STOXX 600 index was down 0.2%, while blue chips also fell 0.2%. Britain's FTSE 100 was also down 0.2%, as was Germany's DAX.
3:08 PM Markets check
At 3:05 am, the Sensex was trading at 32,015, down 258 points, while the broader Nifty50 was ruling at 9,980, down 77 points.
3:02 PM Nifty PSU Bank index, which has risen nearly 23% this year, lost as much as 2.8% with Bank of India and Punjab National Bank leading the fall. Nifty PVT Bank index was down 1.2%.
Nifty Bank underperforms Nifty50
Nifty Bank slips over 1%, led by losses in HDFC Bank, IndusInd Bank, Axis Bank and Kotak Bank
2:48 PM Nifty Metal top sectoral gainer led by gains in Vedanta, Hindalco and Tata Steel
JM Financial on Hindalco
Cost competitiveness in Hindalco's India operations driven by higher coal security, quick ramp–up of new capacities and stable margins at Novelis with higher proportion of automotive products in the mix continues to drive an upward earnings trajectory for the consolidated entity. Consistent earnings delivery, deleveraging of Balance Sheet via FCF generation and stable aluminium prices remain triggers for further re-rating.
We ascribe a multiple of 6.5x FY19 EV/EBITDA to Indian aluminium business to arrive at SOTP (sum of the parts) fair value of Rs 300 per share. Maintain BUY.
1:54 PM Top Sensex gainers and losers in noon deals
Bajaj Auto rallied over 3% to Rs 2988 after the country’s fourth biggest two-wheeler maker announced a partnership with UK’s Triumph Motorcycles to jointly make mid-capacity motorcycles for Indian and global markets.
"We hope to bring to bear upon global markets the individual strengths of the partners including brand position and perception, design and development technology, quality and cost competitiveness and worldwide distribution," Bajaj Auto said in statement.
1:08 PM Markets check
At 1:00 pm, the Sensex was trading at 32,091, down 181 points, while the broader Nifty50 was ruling at 10,004, down 53 points.
Sebi bans trade in suspected shell companies
Market regulator Securities and Exchange Board of India (Sebi) has directed stock exchanges to initiate action against 331 firms that it suspects are shell companies and are listed on the bourses. HERE IS THE FULL LIST
Bharti Infratel was the top Nifty loser and dipped over 5% after more than 3% of the total equity of telecom services provider changed hands in multiple block deals. CLICK HERE TO READ MORE
Should you opt for Bharat 22 ETF?
what Mayuresh Joshi of Angel Broking has to advise.
New kid on the block
Sintex Plastics Technology hits upper circuit of 5% on debut. READ MORE
10:30 AM Volatility index
India VIX rose over 6% to its one-month high of 13-mark.
10:07 AM Broader markets underperform
The BSE Midcap and the BSE Smallcap indices shed morning gains to slip 0.8% each.
10:04 AM Markets check
Benchmark indices wiped off early gains. At 10:00 am, the Sensex was trading at 32,111, down 162 points, while the broader Nifty50 was ruling at 10,007, down 42 points.
L&T and ITC were trading flat in today's trade.
Hindalco hits 52-week high
Hindalco has gained 7% to Rs 245, also its 52-week high on BSE in early morning trade, after its overseas subsidiary, Novelis Inc reported a four-fold jump in net income at $101 million for the first quarter of FY18 (Q1FY18). The company had posted net income of $24 million in the corresponding period of previous year. CLICK HERE FOR FULL REPORT
9:33 AM Sectoral trend: Banking stocks trade in red
EDELWEISS RESEARCH ON TATA STEEL
We remain upbeat on the stock as: 1) consolidated EBITDA/t is likely to sustain at Rs 8,000-8,500 on higher share of domestic shipments and improved profitability in TSE post restructuring; 2) better probability of resolution of pension liabilities; and 3) Rs 40-45bn free cash flow accretion over FY18-19.
Factoring in Q1FY18 performance, we revise up FY18/19E EBITDA by 9%/4%. Maintain ‘BUY’ with revised SoTP-based TP of Rs 720 (Rs 650 earlier), implying an exit multiple of 6.5x FY19E EBITDA — at a discount to peers’ 7.0x average
9:29 AM Top Sensex gainers and losers
COMMENT: EDELWEISS ON HINDALCO
We believe, in ensuing quarters, the company should be able to maintain both high spread and EBITDA margin between 10% and 11% driven by higher auto shipments in the product mix, sustained operating cost efficiencies and benign LME aluminium (Al) prices.
Taking cognizance of robust Q1FY18 numbers, we revise up FY18/FY19E EBITDA 3%/2%, respectively. Retain ‘BUY’ with revised target price of Rs 267 (earlier Rs 250), implying an exit multiple of 6.5x FY19E EBITDA, which is at a discount to global peer average.
Broader markets mirrored gains in the frontline indices. The BSE Midcap and the BSE Smallcap indices were up 0.2% each.
9:24 AM Earnings impact
Tata Steel extended gains for the second straight day rising over 3% to Rs 619 after the company came back to the black by reporting a consolidated net profit of Rs 921 crore in the April-June quarter, as strong performance of domestic operations continued to lead the show followed by improved earnings scenario from European operations. The stock was the top Sensex gainer.
9:20 AM Markets at open
At 9:18 am, the Sensex was trading at 32,353, up 79 points, while the broader Nifty50 was trading at 10,082, up 24 points.
STOCKS TO WATCH
Tata Steel, Jindal Steel, Bharti Airtel, ITC, Larsen & Toubro, GAIL (India) and ONGC etc
9:09 AM MERKET TRENDS: Watch Anand Radhakrishnan, CIO (Equity) at Franklin Templeton talk on equity valuations, earnings growth, impact of GST and more https://youtu.be/AyG672EJ5W8
Nifty outlook by Angel Broking
We expect the index to remain within a range of 10,150-9,944 for a while and hence, one should ideally continue focusing on individual stocks that are offering much better trading opportunities. Within this range, intraday support and resistance is seen at 10,020 and 10,090, respectively.
The S&P BSE Sensex added over 100 points to trade above 32,350, while the broader Nifty50 was up about 20 points at 10,075
9:06 AM MARKET STRATEGY: Watch Santosh Kamath, CIO for Fixed Income at Franklin Templeton on the road ahead for the fixed income market https://youtu.be/nIcmIgbTfsY
Investor categorywise turnover
On Monday, foreign institutional investors sold equities worth Rs 199 crore, while the domestic institutional investors bought equities worth Rs 308 crore, provisional data vailable with BSE showed.
AUTO SECTOR UPDATE: Shrikant Akolkar, Research Analyst - Automobiles, Angel Broking on cess hike for luxury vehicles
The likely hike in the cess rate from current 15% to 25% is not expected to see a materially negative impact on the demand for the premium automobiles. The underlying demand remains healthy which is the driving force for the automobile sector. We believe that companies will be able to pass on the cess hikes on luxury vehicle s/UVs to customers by price revision
FPI ownership in Indian equities hits a life-time high
The total ownership of foreign portfolio investors (FPIs) in Indian equities hit a record high during the quarter ending June (Q1) as overseas funds continued to invest aggressively. In total, FPIs own 27.5 per cent in the top 75 listed companies, data compiled by Morgan Stanley showed. The FPI ownership increased 59 basis points during the June quarter when these funds net purchased equities worth Rs 11,340 crore ($1.8 billion) from the Indian markets. READ THE FULL STORY HERE
Sebi may extend trading hours for derivatives market
In a bid to bring back some of the lost zing, the markets regulator, the Securities and Exchange Board of India (Sebi), is looking to extend the trading hours for the derivatives market. Sources said Sebi was considering if trading in index futures could be kept open even after the cash market closed. The move will provide investors the tool to price in news flow that comes after market hours. READ THE FULL STORY HERE
8:59 AM Asian markets
Asian shares neared decade peaks. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2% and to within a whisker of its recent high. South Korea's market rose 0.4%, while in Japan, the broad TOPIX held near its highest in two years and the Nikkei was flat. China's Shanghai Composite was down 0.2%, while Hong Kong's Hang Seng was trading flat.
8:59 AM CLICK HERE for top trading calls from Prabhudas Lilladher
MARKET TECHNICALS FROM ANAND RATHI RESEARCH
Momentum indicators are reversing from buy to sell, however, they haven’t still provided a sell crossover, hence we continue to maintain our short term bias sideways to positive. Last week was a fifth weekly positive close, hence there isn’t sign for reversal on weekly charts too.
A breakout or breakdown from the range of 9900-10150 levels will set the trend ahead wither for a target of 9700 or 10400 levels. In yesterday’s trading session, it closed mildly in the negative territory, hence there is indecisiveness among the market participants.
8:56 AM Wall Street
The Dow edged up to its ninth record closing high in a row while the S&P ended slightly higher on Monday, with consumer and technology sector gains offsetting losses in energy. The Dow Jones Industrial Average rose 25.61 points, or 0.12% to close at 22,118.42. The last time the Dow had nine straight record closes was in February when it boasted 12 in a row. The S&P 500 climbed 4.08 points, or 0.16% to 2,480.91 and the Nasdaq Composite added 32.21 points, or 0.51% to end at 6,383.77.
G Chokkalingam, founder, Equinomics Research recommends J B Chemicals
JB Chemicals' stock price has corrected 25% from its 52-week in line with the poor performance of the pharma sector (which got impacted mainly by the stringent practices of US FDA) and also due to subdued performance of the company in the last quarter. However JB Chem has the least exposure to the US markets in comparative terms. We reiterate our BUY recommendation with a target price of Rs 400
COMMENT: Emkay Global on Berger Paints
Berger Paints has been consistently gaining market share and benefiting from mix improvement. We maintain Hold rating with revised target price of Rs 255
COMMENT: Amar Ambani, head of research at IIFL on Tata Steel
Tata Steel Q1 FY18’s strong outperformance was led by European operations and forex gains. We maintain our positive view on the company post the Q1 FY18 performance as operating performance in Europe is expected to be robust on the back of restructuring measures taken by the company, revival in global steel prices and anti-dumping measures implemented in European region.
Domestic operations’ performance would improve from higher output from Kalinganagar and increase in share of exports. Debt levels are expected to decline led by selling of non-core assets, lower cash burn in Europe and strong cash flows in the domestic operations. We maintain our Buy recommendation on the stock with a revised target price of Rs 695.
8:48 AM Singapore Nifty
At 8:45 am, SGX Nifty, the Nifty50 futures on the Singapore Stock Exchange, were trading at 10,100, up 11 points of 0.11%.
8:46 AM Good Morning!
Welcome to Business Standard's market blog. Catch all live market action here.
First Published: Tue, August 08 2017. 15:36 IST