MARKET WRAP: Sensex dips 218 pts as WPI rises to 5.77%; Tata Steel down 7%

The Sensex and Nifty fell on Monday, dented by losses in energy, realty and healthcare stocks

3:40 PM

Nifty Pharma index ends 4.12% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
DR REDDY'S LABS	2091.10	2319.85	-228.75	-9.86
LUPIN	815.75	865.60	-49.85	-5.76
SUN PHARMA.INDS.	533.00	559.75	-26.75	-4.78
CADILA HEALTH.	349.75	366.10	-16.35	-4.47
AUROBINDO PHARMA	575.25	602.15	-26.90	-4.47

3:37 PM

Nifty sectoral losers of the day

3:35 PM

BSE Sensex: Infosys ends over 2% higher, Tata Steel declines 7%

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 36,324, down 218 points while the broader Nifty50 index settled at 10,937, down 82 points.

3:20 PM

Motilal Oswal Securities on Infosys

 

With the quarter largely in-line, our EPS estimates have changed little. Although it looks like INFO will achieve the lower end of its guidance in FY19, we continue to reckon the margin band is conservative, with the share of Digital inching up, recent rupee depreciation, and investments already defined internally. Our price target of Rs 1,550 discounts forward earnings by 17x, based on our thesis of a narrowing gap with TCS. We maintain Buy.

3:10 PM

IFCI plans to offload 1.21 million shares in NSE, invites merchant bankers

 

Government-controlled development finance company IFCI Ltd has invited merchant bankers to help it offload stake in the National Stock Exchange (NSE).

 

The company is looking to sell 1.21 million of NSE shares (0.24 per cent stake). The deal is likely to be valued at Rs 1.05 billion to Rs 1.11 billion, based on the price-band of Rs 870-920 mentioned in the tender. READ MORE

3:00 PM

BSE Midcap, Smallcap indices hit over 10-month low

 

Shares of mid and smallcap companies were under pressure with the S&P BSE Midcap and Smallcap index falling 2% each, hitting over 10-month low on the BSE in intra-day trade on Monday.

 

The S&P Midcap index touched a low of 15,097, its lowest level since August 23, 2017, while the S&P Smallcap index hit low of 15,832, its lowest level since August 30, 2017. READ MORE

2:45 PM

Bharti Airtel hits 52-week low; stock falls 35% in thus far 2018

 

Shares of Bharti Airtel hit 52-week low of Rs 345, down 4% on the BSE, on concerns of weak earnings for the quarter ended June 2018 (Q1FY19).

 

The stock of telecom services provider was trading at its lowest level since May 10, 2017. Thus far in the calendar year 2018, Bharti Airtel underperforming the market by falling 35% as compared to 7.3% rise in the S&P BSE Sensex. READ MORE

2:30 PM

LIC board gives nod to acquisition of up to 51% stake in IDBI Bank: Garg

 

Life Insurance Corporation of India's (LIC's) board has approved raising its stake in state-run IDBI Bank to 51 per cent, Economic Affairs Secretary Subhash Chandra Garg told reporters on Monday.

 

Garg, who is on the board of state-run LIC, said the additional stake buy would be most likely through a preferential shares issue, enabling injection of funds to IDBI Bank. READ MORE

2:17 PM

Transfer of shares of listed firms must be in demat mode from Dec 5: Sebi

 

Transfer of shares of listed companies has to essentially be in dematerialised mode from December 5, according to markets regulator Sebi.

 

In a recent notification, the regulator announced the amendment to the LODR (Listing Obligations and Disclosure Requirements) Regulations pertaining to share transfer agent. READ MORE

1:59 PM

Market Check

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	36511.32	36541.63	-30.31	-0.08
	14746.34	14826.58	-80.24	-0.54
	15233.84	15431.47	-197.63	-1.28
	15937.27	16196.33	-259.06	-1.60
	4251.47	4263.19	-11.72	-0.27

1:50 PM

NEWS ALERT LIC board approves IDBI Bank buyout

Stock Impact

1:43 PM

WEB EXCLUSIVE Rising inflation among key risks to Indian equity market: Morgan Stanley

 

A likely rise in crude oil prices that could put pressure on growth, an election cycle that brings its own set of uncertainties and an upward pressure on inflation from food price hikes that sees the Reserve Bank of India (RBI) hike rates further are among the top risks to the Indian equities, according to a recent Morgan Stanley India Equity Strategy Almanac: The Uphill Climb.

 

On Monday, the wholesale price inflation (WPI) for June rose to a four-and-a-half year high of 5.77 per cent, rising from 4.43 per cent recorded in May 2018. READ MORE

Photo: Shutterstock

1:30 PM

Top BSE500 losers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
PC JEWELLER	93.25	-26.70	-22.26	4278381
DR REDDY'S LABS	2105.30	-212.15	-9.15	193989
JP ASSOCIATES	14.10	-1.40	-9.03	4043842
JINDAL STAIN .HI	127.70	-11.90	-8.52	219727
DCB BANK	164.75	-14.70	-8.19	343365

1:15 PM

DCB Bank falls 11% post June quarter results

 

DCB Bank dipped 11% to Rs 160 on the BSE in intra-day trade after net interest margin (NIM) of the private sector lender declined 33 bps year on year (yoy) at 3.9% in June quarter. NIMs were stood at 4.23% for Q1FY18 and 4.09% for Q4FY18.

 

“Margins are under pressure especially in mortgage and corporate loan book. We continue to be watchful of NPAs,” said Murali M. Natrajan, Managing Director & CEO, DCB Bank. READ MORE

1:00 PM

Axis Focused 25 Fund: Sharp focus delivers rich returns, AUM rises 14 times

 

Axis Focused 25 Fund, launched in June 2012, was ranked second in the ‘focused funds’ category of CRISIL Mutual Fund Ranking (CMFR) in the quarter ended March 2018. Jinesh Gopani has been managing it since June 2016.

 

The scheme’s investment objective is to generate long-term capital appreciation by investing in a concentrated portfolio of equity and equity-related instruments of up to 25 companies. Its month-end assets under management (AUM) increased over 14 times from Rs 2.96 billion in June 2015 to Rs 42.17 billion in May 2018. READ MORE

12:44 PM

Infosys trails TCS in Q1 on muted BFSI performance, but outlook is strong

 

Even as there was no surprise in store during the June quarter performance of Infosys compared to Tata Consultancy Services, it was a study in contrasts. The key difference was in the performance in the banking and financial services (BFSI) segment, which accounts for over 30 per cent of revenues for both companies.

 

While Infosys registered a sequential fall in revenues by 0.2 per cent, the same for TCS was a growth of 3.7 per cent. The commentary on the financial services space also differed between the two companies. READ MORE

12:31 PM

Hindustan Unilever hits new high ahead of Q1 results

 

Shares of Hindustan Unilever (HUL) hit a new high of Rs 1,770 per share, up 1.6% on the BSE in intra-day trade so far on Monday, ahead of its results for the June quarter (Q1FY19) later in the day.

 

Since May 14, 2018, after March quarter (Q4FY18) results, HUL has outperformed the market by surging 17.5% as compared to 2.8% rise in the S&P BSE Sensex. Thus far in the calendar year 2018, the stock of fast moving consumer goods (FMCG) company has rallied 29% against 7.3% gain in the benchmark index. READ MORE

12:18 PM

After hitting a new high in 2017, corporates cut back on bonds in 2018

 

After scaling a new high in 2017, there has been a slowdown in corporate borrowing through bonds as yields rise and corporate capital expenditure (capex) is yet to pick up in the country.

 

The total bond borrowings by corporates (companies, excluding banks and financial services) are down 25 per cent during the first six months of the current calendar year, compared to the same period in 2017. READ MORE

12:09 PM

NEWS ALERT June WPI inflation at 5.77% vs 4.43% in May

12:00 PM

Markets at Noon

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,459.72	-81.91	-0.22
S&P BSE SENSEX 50	11,502.57	-34.66	-0.30
S&P BSE SENSEX Next 50	31,565.35	-345.67	-1.08
S&P BSE 100	11,200.54	-46.55	-0.41
S&P BSE Bharat 22 Index	3,309.24	-14.60	-0.44

(Source: BSE)

11:46 AM

Equity fund managers load Reliance Industries, TCS ahead of big jump

Equity fund managers loaded shares of Reliance Industries (RIL) ahead of a big up move in the stock. According to data, equity schemes added 15.2 million shares worth Rs 15 billion in June. The stock has gained 13 per cent this month, with the Mukesh Ambani-led company’s market capitalisation breaching the coveted $100-billion mark. READ MORE

11:28 AM

Trade war makes emerging markets trickier, investors face volatility

 

It may be starting to sound like a broken record for emerging markets, with the twists and turns of U. S.-China trade tensions likely to dominate investor concerns this week.

 

That’s not to say Federal Reserve Chairman Jerome Powell’s two-day Congressional testimony and even the outcome of Monday’s meeting between Donald Trump and Vladimir Putin in Finland won’t have a part to play in driving sentiment. READ MORE

11:17 AM

Indian market hits record high but only a few stocks rising from sell-off

India may be Asia’s best-performing major market this year, but not everyone is rejoicing the return of the nation’s benchmark gauges into record territory. A peek under the hood of the S&P BSE Sensex gauge’s 7.3 per cent gain this year shows it’s being dominated by three stocks -- Tata Consultancy Services Ltd., Reliance Industries Ltd. and HDFC Bank Ltd. A little over half of the 30 Sensex stocks are trading higher than their 200-day moving average price, down from 94 per cent in January when the gauge peaked. READ MORE

11:06 AM

HUL Q1FY19 preview: Double-digit volume growth expected, say analysts

Hindustan Unilever (HUL) is likely to announce its results for the June quarter (Q1FY19) later in the day today. In March 2018 quarter, HUL beat analyst expectations to post a 14.2% year-on-year (YoY) rise in March quarter net profit at Rs 13.51 billion, as against Rs 11.83 billion a year ago. READ MORE

HUL logo

10:56 AM

Top gainers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
MANPASAND BEVER.	136.15	6.45	4.97	244705
CENTURY PLY.	238.40	8.45	3.67	8710
L&T TECHNOLOGY	1334.05	46.30	3.60	62787
INFOSYS	1353.70	44.60	3.41	590381
INDRAPRASTHA GAS	258.00	4.90	1.94	20744

10:48 AM

Infosys surges 6% post Q1 results; market cap crosses Rs 3-trillion mark

Shares of Infosys hit a new high of Rs 1,384 per share, surging 6% on the BSE, in an otherwise subdued market after the company reported an in-line performance for the first quarter ended June 2018 (Q1FY19) and its board approved the issuance of one free share for every share held (that is a 1:1 bonus issue). The company announced its Q1FY19 results on Friday after the market hours. READ MORE

10:45 AM

Centrum on Karnataka Bank

We retain Buy on Karnataka Bank (KBL) with target price unchanged at Rs180. Q1’19 results, albeit lower to our estimates on revenue front, were inline on both operational and profitability end. Slippages came in lower (2.3% of loans); provisions included accelerated coverage on NCLT cases (76% vs. 48% QoQ).

Segments of MSME and corporate banking have shown signs of improvement; we expect traction therein to continue.  Stressed asset pool has reduced to 3.8% of loans; we see loan loss provisions to remain contained at 120bps. We expect earnings growth to accelerate and see RoA / RoE scale to 0.9% / 12.6% by end-FY20E. Valuations at 0.7x FY20E ABV remain attractive

10:43 AM

STOCK WATCH Nomura on Dr Reddy's Lab

The District Court in the gSuboxone case on 13 July 2018 granted a Preliminary Injunction (PI) in favour of Indivior and against Dr Reddy's. The PI decision stops Dr Reddy's from selling gSuboxone in the US market, until a final verdict is issued by the District Court of the patent litigation or the PI decision is reversed in Appeals court.

The PI would adversely impact the company, as it would have to await an Appeals Court decision. By that time, more competitors could gain approval. Currently, we have factored EPS contributions of Rs 10/sh and Rs 12/sh in FY19F and FY20F, respectively, into our estimates for DRRD from gSuboxone. These contributions are at risk. Our EPS estimate for FY19F and FY20F are Rs 109/sh and Rs 152/sh, respectively. We attribute Rs 60/sh for the gSuboxone opportunity in our target price Our target price of Rs 2,704/sh for Dr Reddy's is based on SOTP methodology

10:40 AM

COMMENT Nomura on economy

We continue to expect the current account deficit to widen to 2.7% of GDP in FY19 versus 1.9% in FY18. While currency depreciation is a tailwind, we also expect global growth to cyclically slow, which would weigh on exports; our Asian export leading index is pointing lower. 

Import growth, meanwhile, is likely to remain robust due to elevated oil prices and persisting cyclical recovery (for now). We expect balance of payment (BOP) funding to remain a challenge as the basic BOP (current account + net FDI) is negative.