MARKET WRAP: Global cues, K'taka result drag Sensex 156 pts; PNB down 12%

Benchmark indices fell on Wednesday on doubts over the composition of the next government in Karnataka

4:02 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

The Indian equity benchmark indices ended Wednesday’s session on a weak note, led by muted global cues and weak domestic sentiments. The Nifty index fell by 61 points or 0.6% to close at 10,741. The broader markets outperformed, with BSE Smallcap reporting marginal gains. The sectoral indices ended on a mix note. Realty, FMCG & IT ended the session with healthy gains, while Oil & Gas & Banks were the top losers. Amongst the global markets, most of the Asian indices ended lower, while European markets were trading flat to marginally in the green.

 

With lack of any fresh positive triggers globally and on the domestic bourses, we expect the markets to consolidate in the near term. Corporate earnings, global developments, behaviour of crude oil prices and movement of INR vs USD will dictate the market trend in the coming sessions. Stock specific volatility will remain high. Investors should continue to focus on quality stocks on dips

3:41 PM

Nifty PSU Bank index ends 3.05% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
SYNDICATE BANK	43.95	50.20	-6.25	-12.45
PUNJAB NATL.BANK	75.60	85.95	-10.35	-12.04
BANK OF BARODA	132.05	139.65	-7.60	-5.44
ALLAHABAD BANK	38.95	40.35	-1.40	-3.47
ORIENTAL BANK	78.90	81.70	-2.80	-3.43

3:41 PM

Nifty FMCG index gains nearly 2%: Top gainers in the pack

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)	VOLUME
HIND. UNILEVER	1574.10	1515.50	58.60	3.87	2420398
P & G HYGIENE	9396.55	9131.20	265.35	2.91	7029
JUBILANT FOOD.	2457.25	2400.45	56.80	2.37	812235
COLGATE-PALM.	1178.20	1151.50	26.70	2.32	981591
MARICO	318.20	312.35	5.85	1.87	3139526

3:39 PM

PNB falls 12% on poor Q4 results

3:38 PM

Sectoral Trend

3:35 PM

BSE Sensex: gainers and losers of the day

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 35,388, down 156 points while the broader Nifty50 index settled at 10,741, down 61 points.

3:27 PM

Jyothy Laboratories gains 7% as board approves 1:1 bonus issue

Shares of Jyothy Laboratories have moved higher by 7% to Rs 398 per share on the BSE after the company said the board has recommended issue of bonus shares in the ratio of 1:1 i.e. one bonus share for every one share held on the record date. READ MORE
 

3:20 PM

RCom's insolvency jeopardises $3.7 bn deal

 

Shares and bonds of Reliance Communications Ltd. tumbled after an Indian tribunal ordered that the wireless carrier be placed in insolvency proceedings, jeopardizing its proposed $3.7 billion asset sale to Reliance Jio Infocomm Ltd.

 

The Mumbai bench of the National Company Law Tribunal on Tuesday accepted a petition from the Indian unit of network-equipment maker Ericsson AB, which is seeking to recover 11.6 billion rupees ($170 million) in unpaid dues from the telco controlled by billionaire Anil Ambani. READ MORE

3:10 PM

Rupee bounces back from 15-month low of 68.11 a dollar on RBI intervention

 

The rupee recovered smartly on Wednesday from the 15-month low reached a day before, as the Reserve Bank of India (RBI) stepped in with heavy dollar sales.

 

Besides, trade data for April, released after market hours on Tuesday, showed that non-oil imports fell and exports made a robust recovery, despite rising global crude oil prices. READ MORE

3:00 PM

FMCG shares in focus; HUL hits new high, ITC up 2% post Q4 results

 

Shares of fast moving consumer goods (FMCG) companies were trading higher with Nifty FMCG and the S&P BSE FMCG index gaining 2% in otherwise weak market. 

 

Hindustan Unilever (HUL), Britannia Industries and Colgate-Palmolive (India) hit their respective new highs on the BSE. READ MORE

2:50 PM

ITC fourth-quarter profit rises 10%; beats estimates

 

India's biggest cigarette maker ITC posted a better-than-expected quarterly profit on Wednesday, helped by a fall in excise duty.

 

Profit for the quarter ended March 31 came in at Rs 29.33 billion ($432.44 million) from Rs 26.69 billion reported last year, the company, which also makes biscuits and noodles under the Sunfeast brand, said.

Earnings Impact
 

2:38 PM

Edelweiss on Tata Steel

The NCLT has approved Tata Steel’s (TSL) Resolution Plan (RP) for Bhushan Steel (BSL). While certain uncertainties remain, particularly w.r.t. lenders’ share in the equity, we believe the deal is better than what Street had estimated earlier: 1) EV/t pegged at USD1,060/t compared to our ~USD1,225/t initial estimate; 2) no additional equity infusion of INR90bn as previously estimated; and 3) financial creditors to release pledge on promoters’ shares (36.2% of BSL’s equity).

On the valuation front, assuming BSL’s steady-state EBITDA/t of INR11,500 and 95% capacity utilisation, TSL is likely to trade at 5.6x FY20E EBITDA, similar to the current level. Maintain ‘BUY’ with target price of Rs 903

2:37 PM

Sector watch: Air conditioners

The  air-conditioner  industry has witnessed several headwinds during FY18, led  by  GST  transition  and  the  change  in  energy  efficiency ratings. Additionally,  the  summer  of  2018  started  on  a weak note, despite IMD predicting  a harsh summer. Consumer offtake has thus been weak, as evident in Lloyd (Havells) and Blue Star’s Room Air Conditioner (RAC) volume growth in  4QFY18.  However,  value  growth  (19%  for Blue Star) was boosted by a richer  mix  (inverter  share  rising  and  rating  change in Jan-18) and a commodity-led price hike of 3-4%. Nevertheless, we stick to our longer term constructive  view  on  RAC volume growth, which will drive up value growth even higher in future.

 

Meanwhile,  Voltas  is  down  ~10%  over  the  last  month as the street is expecting  a  weak 4QFY18 show. However, given Blue Star’s show, Voltas can post  double  digit  value growth (despite possibly muted volumes). The mix improvement  is possibly being ignored by Voltas’ sellers. This throws open an  opportunity to buy Voltas on dips. At 25x Mar-20E EPS, our target price of Rs 710 offers an entry point

2:17 PM

Volume Toppers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
SH.RENUKA SUGAR	15.50	0.10	0.65	25136271
REL. COMM.	10.30	-2.15	-17.27	19593299
PUNJAB NATL.BANK	76.00	-10.00	-11.63	8166188
SUZLON ENERGY	9.08	0.30	3.42	4516688
JP ASSOCIATES	17.05	0.00	0.00	2990465

2:02 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,445.45	-98.49	-0.28
S&P BSE SENSEX 50	11,270.85	-35.96	-0.32
S&P BSE SENSEX Next 50	32,719.45	-156.79	-0.48
S&P BSE 100	11,066.39	-37.95	-0.34
S&P BSE Bharat 22 Index	3,575.96	-6.72	-0.19

1:45 PM

Europe Update

Shares in Europe opened mixed as investors monitor surging interest rates in the bond markets. The pan-European Stoxx 600 was 0.1% up with the various sectors moving in different directions

1:30 PM

V-Mart Retail hits new high; stock zooms 1400% in 5 years

 

Shares of V-Mart Retail hit a new high of Rs 2,405 per share, up 5% in intra-day trade on Wednesday, extending its previous day’s 8% surge on the BSE in otherwise weak market.

 

V-Mart primarily operate in Tier-II and Tier-III cities with a chain of value retail departmental stores offering apparels general merchandise and kirana catering to the entire family. Based in New Delhi its operations are spread across northern western and eastern parts of India. READ MORE

1:17 PM

Top BSE500 losers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
REL. COMM.	10.40	-2.05	-16.47	17622881
PUNJAB NATL.BANK	75.55	-10.45	-12.15	6584907
SYNDICATE BANK	44.70	-5.30	-10.60	859371
CORPORATION BANK	26.00	-1.50	-5.45	59676
VAKRANGEE	57.05	-3.00	-5.00	11719

12:59 PM

Fraud-hit PNB stock is a dud investment, caution analysts

Punjab National Bank (PNB) hit its lowest level since June 3, 2016 on Wednesday, falling nearly 12 per cent to Rs 75 levels, after reporting a record loss of Rs 134 billion in the January – March 2018 quarter (Q4FY18) – way higher than the Rs 26-27 billion loss expected by analysts. Operating loss during the recently concluded quarter stood Rs 4.5 billion – the first such instance in the bank’s history.

The results have made analysts cautious on public sector banks (PSBs) that are saddled with a large quantum of non-performing assets (NPAs), especially PNB, which they feel could remain under pressure. READ MORE

12:45 PM

Oil dips on signs of ample supply despite OPEC cuts, Iran sanctions

Oil prices fell on Wednesday, weighed down by ample supplies despite ongoing output cuts by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran.

Brent crude futures were at $78.22 per barrel, down 21 cents, or 0.3 per cent, from their last close while US West Texas Intermediate (WTI) crude futures were at $71.03 a barrel, down 28 cents, or 0.4 per cent, from their last settlement. READ MORE

12:32 PM

Suspected RBI interventions stems rupee's fall

Suspected currency market intervention by the Reserve Bank of India (RBI) for a second consecutive day stemmed the rupee's fall, three dealers said after seeing heavy dollar selling from the outset of trade on Wednesday. The rupee had weakened to a 16-month closing low of 68.15 per dollar on Tuesday, but after the latest round of suspected central bank support it had bounced back to 67.80, despite the dollar's strength on international markets. READ MORE

 

12:16 PM

HEG, Graphite India extend gain after strong Q4 results

Shares of graphite electrode manufacturers HEG and Graphite India were trading higher for the fourth straight days after these companies reported a robust net profit growth in March quarter (Q4FY18).

HEG was up 4% to Rs 3,392, surging 16% in past seven trading days, after the company reported net profit of Rs 6.34 billion in March quarter (Q4FY18), on back of strong operational income. It had posted net loss of Rs 34 million in year ago quarter. READ MORE

12:00 PM

Market Check

 

S&P BSE Sensex	35,378.63		-0.47%
Nifty 50	10,743.80		-0.54%
S&P BSE 200	4,656.83		-0.46%
Nifty 500	9,324.10		-0.45%
S&P BSE Mid-Cap	16,022.33		-0.29%
S&P BSE Small-Cap	17,494.26		-0.18%

11:45 AM

Indiabulls Real Estate surges 9% as board mulls share buyback

 

Shares of Indiabulls Real Estate have surged 9% to Rs 202 per share on the BSE in early morning trade in otherwise weak market after the Mumbai-based real estate developer said that its board will meet on Friday, May 18, 2018, to consider the proposal of buy-back of equity shares of the company.

 

“A meeting of the Board of Directors of the Company will be held on Friday, May 18, 2018, to consider, inter alia, the proposal of Buy-back of equity shares of the Company,” Indiabulls Real Estate said in a BSE filing on Tuesday after market hours. READ MORE

11:30 AM

Interview of the day

Timely RBI intervention can help cap rupee slide at 72 levels: Nizam Idris

 

A steady rise in crude oil prices and the possibility of rate hikes by the US Federal Reserve pushed the rupee to a 16-month low on Wednesday. Singapore – based NIZAM IDRIS, managing director, head of strategy – fixed income and currencies at Macquarie Bank says that the rupee can easily hit 70.0 against the US dollar. Read full interview here

11:15 AM

ADAG shares hit 52-week lows; RCom falls 14%

Shares of Anil Dhirubhai Ambani Group (ADAG) companies were trading lower for the second straight day with Reliance Communications (RCom) falling 14% in intra-day trade on Wednesday after bankruptcy court admits Ericsson's plea against the company.
 

Besides, RCom, Reliance Naval and Engineering, Reliance Nippon Life Asset Management, Reliance Home Finance, Reliance Capital, Reliance Power and Reliance Infrastructure were down in the range of 2% to 6% on the BSE. All these stocks were trading at their respective 52-week lows. READ MORE

11:00 AM

Mainland China shares make it to New York-based MSCI

New York-based MSCI on Tuesday agreed to include the so-called China-A shares in its global indices. About 234 large-cap stocks listed in mainland China will be partially included in the MSCI global and regional indices from June 1.

 

Initially, the weight of the shares in the MSCI Emerging Markets (EM) Index will be only 0.39 per cent because of the 2.5 per cent partial inclusion factor. In September, this will increase to 0.78 per cent as MSCI increases the inclusion factor. READ MORE

10:46 AM

Star fund managers jump ship even as assets soar

The mutual fund (MF) industry has never had it better. Assets are growing at a scorching pace and investors are staying put despite bouts of market volatility. The good times, however, are causing an unintended side effect: Exodus of top fund managers.

 

DSP BlackRock Investment Managers may be on the verge of losing Anup Maheshwari, currently the chief investment officer (CIO)-equities, at the fund house. Maheshwari, formerly the head of equities and corporate strategy, has been with DSP BlackRock for more than two decades. READ MORE

10:28 AM

Q4 results: Tata Communications performance yet to match estimates

Tata Communications failed to live up to analysts’ expectations, missing their estimates and its guidance by a wide margin on the back of a muted March quarter performance. Revenues were down 2.4 per cent, sequentially, to Rs 41 billion largely because of a 14 per cent drop in voice revenues and flat data revenues. The data business accounts for about 72 per cent of its revenues, while voice and ATM businesses constitute the remaining 28 per cent. READ MORE

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