MARKET WRAP: Sensex cracks 551 pts as rupee breaches 73/$; IT, autos fall

Among sectoral indices, the Nifty IT index settled 2 per cent lower led by a fall in the share prices of Tata Consultancy Services (TCS) and Infosys.

4:11 PM

MARKET COMMENT VK Sharma, Head Private Client Group & Capital Market Strategy at HDFC Securities

The RBI refused to open a special window for oil marketing companies, which impacted market sentiment. Rupee touched a new low of 73.40 to a dollar. The Sensex lost 550 points or 1.3% and hit the lowest level in the current downturn. Automobile stocks were battered, as fears of margin compression came to fore. Metal stocks, especially aluminum producers, were in limelight. World’s largest alumina refinery Norsk Hydro's closure buoyed aluminum players. Small-cap index bucked the trend and  managed to close in positive on back of value buying.

4:09 PM

MARKET COMMENT HDFC Securities on auto sector

The relentless surge in fuel prices over the past few months and devastating flood in Kerala dampened PVs(-3% YoY) demand. Inventory has piled up to 40-45 days and all eye now focusing on festive season to drive up PV demand. However, revival in rural demand and festive season inventory build-up aided decent growth (+6%) in 2Ws. Despite higher fuel prices, CV demand remains healthy (+23%, M&HCV-26% and LCV22%) led by healthy freight availability and pick up in Ecommerce, white goods and infra segment.

 

We believe good monsoon, improving rural demand and upcoming festive season will augur well for automotive Industry and recent correction in stocks price provides a good entry opportunity. Our top picks in OEMs space are MSIL (extensive distribution network and strong rural franchise), Ashok Leyland (leadership in high tonnage trucks) and Bajaj Auto (diversified product and geographical mix)

3:41 PM

Sectoral Losers at NSE

3:39 PM

Gainers and Losers in BSE Sensex

3:34 PM

Market at close

The S&P BSE Sensex ended at 35,976, down 551 points while the broader Nifty50 index settled at 10,858, down 150 points.

3:21 PM

India's Q4 gold imports to jump as investors seek safer bets than stocks

India's gold imports may rise in the fourth quarter as investors seek alternatives to faltering equity markets and a plunging rupee at the same time traditional buying will rise during the festival season, said multiple sources involved in the market. READ MORE

3:05 PM

Gold prices hit over one-week high on soft dollar, Italy woes

Gold hit highest in more than a week on Wednesday as the dollar softened and demand for the safe-haven metal got a boost on concerns surrounding Italy's plans to tackle budgetary deficit.

Spot gold was up 0.1 per cent at $1,203.31. Earlier in the session, the bullion touched the highest since Sept. 21 at $1208.31. It gained 1.3 percent on Tuesday in its biggest one-day percentage gain since Aug. 24. US gold futures were up 0.1 percent to $1,207.06 an ounce. READ MORE

2:49 PM

Mumbai Police seeks proof of trades from Sebi in Rs 55-bn NSEL scam probe

Hours after registering a First Information Report (FIR) in the Rs 56-billion National Spot Exchange (NSEL) scam, the economic offences wing (EOW) of the Mumbai Police wrote to the Securities and Exchange Board of India (Sebi) asking for proof of illegal trades. READ MORE

2:36 PM

Top losers at NSE

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
J KUMAR INFRA	146.35	-16.25	-9.99	1336964
M & M	803.10	-44.50	-5.25	3998164
ICICI SEC	265.90	-14.00	-5.00	206375
BOMBAY DYEING	151.45	-7.95	-4.99	570839
8K MILES	172.75	-9.05	-4.98	47109

2:15 PM

Auto stocks down; Eicher Motors hits 52-week low

Auto shares were in focus on Wednesday, with the Nifty Auto index slipping 1.5 per cent in intraday trade led by a fall in shares of Eicher Motors, Maruti Suzuki and Mahindra & Mahindra. Eicher Motors hit a 52-week low of Rs 23,072.75, down 6.8 per cent in intraday trade. The commercial vehicle sales by the company in September 2018 was up at 6,663 units against 6,083 units in the year-ago period. Royal Enfield sales also climbed 2 per cent at 71,662 units versus 70,431 units. READ MORE

1:59 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,254.17	-271.97	-0.74
S&P BSE SENSEX 50	11,436.62	-76.59	-0.67
S&P BSE SENSEX Next 50	31,761.27	-149.07	-0.47
S&P BSE 100	11,155.22	-71.40	-0.64
S&P BSE Bharat 22 Index	3,480.28	+5.23	+0.15

 

1:45 PM

Govt considers special deposit scheme for NRIs to boost dollar inflows

India is considering a special deposit scheme for non-resident Indians to boost dollar inflows, news agency NewsRise reported on Wednesday, citing an unnamed finance ministry official. Economic Affairs Secretary Subhash Chandra Garg had said in June, if needed, the government could raise funds through foreign currency non-repatriable (FCNR) deposits, sovereign bonds or other routes to increase forex reserves. READ MORE

 

1:29 PM

IOB seeks shareholders' approval to issue preferential shares to govt

Indian Overseas Bank on Wednesday informed stock exchanges that it had sought its shareholders’ approval to issue equity shares of face value of Rs 10 each to the Government of India on a preferential basis, subject to applicable regulatory provisions. These would aggregate to Rs 21.57 billion, including share premium. READ MORE

 

1:15 PM

MFs scout for foreign investment opportunities as domestic markets teeter

Domestic mutual funds are getting ready to launch schemes that will take exposure to foreign economies as strong global headwinds take a toll on the country’s economy. Experts say given the current economic conditions, investors must have at least 5-10 per cent exposure to foreign economies. They point out that a substantial level of investor exposure has been concentrated on domestic equities following the market rally seen in the last two years. READ MORE

12:58 PM

Debt-free companies perform better in bellwether market: Analysis

Companies that are able to finance their growth from internal accruals are doing significantly better than those depending on debt, shows an analysis of returns of companies that are part of the National Stock Exchange’s (NSE) bellwether Nifty50 index.

Business Standard looked at companies shortlisted on the basis of their cash flows, debt levels and proportion of assets funded internally, rather than through debt. READ MORE

 

12:42 PM

Rupee recovers after report of talks on special dollar window for oil firms

The rupee recovered sharply from record low levels on Wednesday after NewsRise reported that the government was in talks with the central bank for a special dollar swap window with some state-run fuel retailers.

 

The partially convertible rupee briefly traded stronger on the day at 72.90 per dollar against its previous close of 72.91 after the news report. It had touched a life low of 73.42 earlier in the session. READ MORE

 

12:27 PM

YES Bank extends recovery; stock rises 21% in two sessions

Shares of YES Bank have risen for the second consecutive day, gaining over 10 per cent to Rs 223 levels on the National Stock Exchange (NSE) in intraday trade today, after the private bank said that it is fully prepared for the succession plan for its managing director and chief executive officer and will finalise two external experts for the search committee by October 7. The stock has risen over 21 per cent in the past two sessions after it hit a 28-month low last week. READ MORE

12:13 PM

Interview of the day We are cautions now, markets are fully valued: S Naren of ICICI Pru AMC

Rising crude oil prices, sliding rupee and the crisis at IL&FS have kept the markets on tenterhooks since the past few weeks. S Naren, executive director & chief investment officer (CIO), ICICI Prudential AMC tells Puneet Wadhwa that on a valuation basis, large-caps continue to remain attractive over mid/small-caps. Click here to read more

S Naren, Executive director & chief investment officer, ICICI Prudential Mutual Fund

12:00 PM

Market at Noon

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	36,379.63	-146.51	-0.40
S&P BSE SENSEX 50	11,459.23	-53.98	-0.47
S&P BSE SENSEX Next 50	31,730.06	-180.28	-0.56
S&P BSE 100	11,172.53	-54.09	-0.48
S&P BSE Bharat 22 Index	3,470.46	-4.59	-0.13

(Source: BSE)

11:47 AM

ONGC stock: Natural gas price revision, higher volumes are positives

India’s largest gas producer ONGC will be a key beneficiary of the Centre’s decision to hike natural gas prices by 10 per cent from October 1. The price of natural gas has been fixed at $3.36 per million British thermal unit (mmbtu) and will improve revenues on the back of rising gas volumes.

 

Given that ONGC is an oil exploration company, a rise in crude oil prices fetches it higher net realisations, while the rupee depreciation helps its subsidiary OVL (ONGC Videsh) earn higher revenues from overseas crude oil production. READ MORE

11:34 AM

MARKET COMMENT Rushabh Maru, Research Analyst, Anand Rathi Shares

The rupee has made a new record low today on back of consistent rise in the crude oil prices. Sharp rise in the crude oil prices along with steep depreciation in the rupee might push inflation higher in coming months.  Sharp volatility in the domestic equities and steep FIIs outflows from equity and debt segments keeping sentiments bearish for the rupee.

The dollar index is hovering around multi-months high as the Federal Reserve continues to raise interest rates aggressively. Focus would now shift to the RBI monetary policy meeting. There is a buzz of repo rate hike by 25 bps and possible change in the monetary policy stance by the RBI. More importantly, its guidance will be crucial. Market will also keenly watch whether the RBI announces any crucial measures to stabilize the rupee. In the near term, the rupee might trade in 72.50 and 73.80 range

11:33 AM

India Inc chooses deleveraging over growth; net debt-equity ratio improves

For the third year in a row last fiscal year, corporate India stayed focused on deleveraging its balance sheet and not pushing for growth, in spite of the recent pick-up in revenue growth. Corporate India’s net debt-equity ratio improved for the third consecutive year in FY18 while investments in new projects hit a 10-year low.

 

Combined fixed assets or investments in plant and equipment, including projects under implementation of companies (excluding those from the oil and gas sector), was up three per cent in FY18, growing at the slowest pace in at least 10 years. READ MORE

11:30 AM

Dr Reddy's Lab rises after sale of Cloderm Cream

Dr Reddy's Laboratories rose 0.41% to Rs 2,521.45 at 09:32 IST on BSE after the company announced the sale of Cloderm Cream to EPI Health, LLC. The announcement was made on Tuesday, 2 October 2018, when the market was closed for local holiday. READ MORE

11:08 AM

Top losers in BSE500:

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
J KUMAR INFRA	149.00	-15.40	-9.37	139377
MAX FINANCIAL	375.80	-30.10	-7.42	64130
EICHER MOTORS	23333.85	-1504.85	-6.06	16451
INDIABULLS VENT.	484.40	-25.45	-4.99	2984
KWALITY	12.01	-0.63	-4.98	92737

11:03 AM

Prabhudas Lilladher on auto sector

With all players pumping in inventory before the start of the festive season, retails in October would be key for both 4Ws & 2Ws to ascertain consumer sentiment and demand.  We expect growth momentum for the CV and Tractor segment to continue over the festive season. For that reason, M&M and Ashok Leyland remain our top pick

10:45 AM

Standoff between Opec, traders on oil outlook fuelling price rise: Analyst

Opec and oil traders are now in fundamental disagreement about the market outlook and the standoff is fuelling a sharp rise in prices that could spell trouble for the global economy over the next 18 months.

 

The overall balance between supply and demand is “healthy” according to a statement from the Joint Ministerial Monitoring Committee of Opec and non-Opec producers last month. READ MORE

10:27 AM

Auto stocks trade mixed

COMPANY NAME	LATEST	HIGH	LOW	CHG ( )	CHG(%)	VALUE (  CR)	VOLUME
ASHOK LEYLAND	120.20	121.50	118.90	0.35	0.29	4.07	338671
TATA MOTORS	228.90	230.50	226.00	-0.35	-0.15	4.23	184805
TVS MOTOR CO.	547.80	569.90	544.20	-7.80	-1.40	2.88	52619
TATA MOTORS-DVR	121.65	122.15	119.50	0.65	0.54	0.55	45346
M & M	825.00	847.00	823.90	-22.60	-2.67	3.18	38562

10:26 AM

HSBC on YES Bank

YES Bank management hosted a conference call after market close on 1 October. Overall, the call provided a sneak peak of Q2FY19 performance, more clarity on near-term strategic priorities in relation to growth and capital, roadmap for succession planning, and also reiterated a stable outlook for asset quality.

The bank has maintained growth momentum in Q2FY19, with stable asset quality. However, in the coming 3-6 months we expect the focus will be on CEO succession and capital preservation. At 1.6x (FY19 BVPS) the stock is inexpensive, in our view. We maintain our Buy rating and target price of Rs 378.

10:24 AM

Jefferies on BHEL

We met BHEL management and came back impressed with the initiatives taken to contain costs. FY18 import content has dropped to a seven-year low of 9% of sales. Employee reduction continues and addition is restricted to critical requirements. The first two phases of its 'Survive-Revive-Thrive' strategy is complete, with focus now on 'Thrive'. Non-power is also a growth area. We are watching for triggers of debtor monetisation and reducing fixed costs for upside

10:24 AM

RESULT PREVIEW Information technology sector

We estimate the top-five Indian IT players – Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies (HCLT) and Tech Mahindra (TECHM) – will deliver QoQ constant currency (cc) top-line growth of   0.7–4.5% in Q1FY19. Depreciation of the EUR, GBP and AUD against the USD is likely to hurt revenue growth by 90–120bp QoQ.

At the same time, a sharp depreciation of the INR against the USD would lift margins 80–110bp QoQ. Considering positive macros, the rising proportion of high-growth digital business and large transformational wins, we expect revenue growth to accelerate along with a notable improvement in management commentaries.

In our view, TCS will lead the pack with 4.5% QoQ USD revenue growth, followed by Infosys at 3.4%. We will monitor: i) growth rates and deal sizes in the digital business; ii) TCV of large deal-wins in the legacy business; iii) demand commentary by industry, especially in BFSI and retail; iv) Europe revenue growth rates; and v) changes in employee matrix, viz., hirings and attrition. Maintain ‘BUY’ on Infosys, TECHM and HCLT, and ‘HOLD’ on TCS and Wipro.

(Source: Edelweiss Securities report)