Nifty ends above 9,950, up 1% for the week; Sensex settles 161 pts higher

Catch all that happened in the market here

3:49 PM

Analyst View

 

Vinod Nair, Head of Research, Geojit Financial Services: Despite weak Q1 GDP growth of 5.7% the market continued to stay on a positive terrain due to better auto sales and encouraging manufacturing data for the month of August. On the other hand, investors are expecting knee jerk reaction from government to uplift the growth and they are largely focusing on long term benefit from GST than transitory hiccups.

3:45 PM

Realty Index gained 2.6%

Source: NSE

3:38 PM

Sectoral Trend

Source: NSE

3:37 PM

Top gainers and losers on BSE Sensex

Source: BSE

3:35 PM

Broader Markets

Broader markets outperformed tjhe benchmark indices with BSE Midcap and BSE Smallcap up 0.9% and 0.8% respectively

3:33 PM

Markets at close

Benchmark indices rose on Friday and gaining for a third straight week after much weaker-than-expected economic growth data raised hopes the central bank would cut interest rates at its next policy meeting in October.

 

The S&P BSE Sensex ended at 31,892 up 161 points while the broader Nifty50 index settled at 9,974, up 56 points. Bothe the indices were up 1% for the week.

3:23 PM

GDP to grow?

NITI Aayog's new Vice-Chairman Rajiv Kumar pegged gross domestic product (GDP) expansion at 7-7.5% in the second quarter of the current financial year, a day after the country's economic growth in the first quarter fell to its lowest at 5.7 per cent in the three years of the Modi government.  

 

Attributing subdued GDP growth in the first quarter to destocking in the pre-goods and services tax period, higher WPI deflator, and base effect, Kumar said a turnaround in corporate investments was already happening. He stressed that the first quarter GDP figures were not a trend.

3:16 PM

Buzzing Stock

 

Shares of Gravita India touched 52-week high of Rs 134.65, rising 11% intraday on the back of strong Q1 numbers.

 

The company’s Q1FY18 consolidated net profit increased 47.3% at Rs 10.9 crore against Rs 7.4 crore, in a year ago period.

3:09 PM

Strides Shasun gains

Drug firm Strides Shasun gains 2% after the pharma firm received an Establishment Inspection Report (EIR) from the US health regulator for its formulations facility at Bengaluru.

 

"The company's formulations facility (KRSG Gardens) in Bengaluru which was inspected by the USFDA in May 2017 has received the EIR, thereby confirming the closure of the inspection," Strides said in a BSE filing.

2:56 PM

Oil Check

Oil prices fell on Friday in the wake of Hurricane Harvey, which has killed more than 40 people and brought record flooding to the oil heartland of Texas, paralyzing over a quarter of the US refining industry.

 

Benchmark Brent crude for November was down 40 cents at $52.46 a barrel. The Brent contract for October, which expired on Thursday, closed up $1.52, or 2.99%, at $52.38.

2:46 PM

Nifty IT was the biggest sectoral laggard, down 0.7%, deagged by TCS, Tech Mahindra and Wipro.

Source: NSE

2:36 PM

HSBC on GDP data

 

April-June (1Q FY18) GDP growth came in at a three-year low. Manufacturing, at a five-year low, stood out most. Thursday's weak data can be attributed to some specific factors such as GST related destocking, auto-correction in growth prints as prices normalize, rupee appreciation, weaker agriculture and higher subsidy payout. While some of these could reverse over the next few quarters, others may not. Growth has been moderating since the middle of 2016 and we see downside risks to our below consensus growth forecast of 7.1% for FY18

2:32 PM

Asia Check

Asian equities followed Wall Street’s gains overnight and edged higher on Friday while the dollar’s advance slowed ahead of the US jobs report due later in the session.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%.

Australian shares added 0.2% while South Korea’s KOSPI and Japan’s Nikkei were little changed.

 

Shanghai was up 0.5% and Hong Kong’s Hang Seng rose 0.3%.

2:15 PM

Auto sales

 

Escorts continued to post solid growth in tractors sales in August, following a 34.3% growth in July YoY.

 

The Faridabad-based tractor maker sold 4,587 units in month gone by, a growth of 23.2% compared with 3,722 units in same month last year.

2:03 PM

Among other gainers

Shankara Building Products rose 4.81% to Rs 1,242 on BSE after the company announced that it has started new processing facility in Secunderabad.

2:01 PM

COMMENT: Christopher Wood of CLSA

 

The attention of investors will again switch to Washington next week when Congress returns from summer holidays on 5 September. The immediate focus will be on the debt ceiling and the risk of a potential government shutdown given the looming deadlines at the end of September.

 

GREED & fear’s base case is that these deadlines will be successfully navigated, though there appears to be greater nervousness on this score than normal. The Trump administration will then be free to refocus its energies on tax reform, an effort likely to be led by National Economic Council Director Gary Cohn and Treasury Secretary Steven Mnuchin.

 

The issue will remain whether fiscally conservative Republicans in Congress will continue to insist on a “revenue neutral” tax reform in which case meaningful tax reform becomes very difficult. GREED & fear’s guess is that Cohn and Mnuchin will be arguing for a dilution, if not abandonment, of this revenue principle. 

 

GREED & fear would certainly not abandon all hope of tax reform, nor should investors, given that markets have now effectively given up on the Trumponomics trade. This is primarily because both the Trump administration and Congressional Republicans need to see some concrete tax reform implemented ahead of the November 2018 congressional elections.

(Source: Chris Wood's weekly newsletter, GREED & fear)

1:57 PM

Nomura on manufacturing PMI

 

India’s manufacturing PMI moved back into the expansion zone in August, led by a rise in domestic orders and output, suggesting that disruptions related to the new good and services tax (GST) seen in June and July appear to be getting resolved. 

 

Given that the Q2 GDP disappointment was mainly due to GST-effects on the manufacturing sector, this is good news as cash-intensive services sectors have already started to recover. We remain comfortable with our view that growth is headed higher and we expect real GDP growth to average 7.4% y-o-y in H2 2017 from 5.9% in H1 2017, as the economy recovers from the last nine months of disruptions

1:49 PM

Economy will grow 7% despite lower GDP growth in Q1: T V Mohandas Pai

 

Former Infosys CFO T V Mohandas Pai on Wednesday shared optimism with Finance Minister Arun Jaitley's remarks that the economy would grow at seven per cent, despite lower GDP growth in Q1, 'due to pre-GST destocking of goods.'

 

"I share the optimism (of Jaitley's remarks that the Indian economy will grow seven per cent, inspite of lower GDP growth in Q1. Q1 was impacted by GST destocking," he told PTI.

 

Pai, who is now Managing Director of Aarin Capital, said India has seen a positive GST impact in the first month of the second quarter. READ MORE

1:28 PM

Buzzing Stock

Shares of IRB Infrastructure Developers rose 3% intraday as the company has decided to sale of its special purpose vehicle to IRB InvIT Fund.

 

"The InvIT Committee of the company at its meeting held on August 31, has approved the proposed sale of IRB Pathankot Amritsar Toll Road (IPATRL) to the IRB InvIT Fund (Trust), at an enterprise value of Rs 1569.33 crore, as per company release.

1:14 PM

Europe check

 

European markets started slightly higher as investors geared up for more data releases, while taking note of the positive trading seen overseas.

 

The pan-European Stoxx 600 was 0.37% higher with every sector moving in positive territory.

 

Sentiment appears to have been boosted somewhat, following a positive close on Wall Street on Thursday, and a upbeat session from Asia.

12:59 PM

Risk aversion halts surge in EMs

 

Risk aversion among global fund managers due to geopolitical tensions has applied brakes on the stellar run seen in the emerging markets (EMs) this year. Foreign funds pulled out over $4 billion from EMs, weighing on the performance of key markets such as India and South Korea. READ FULL REPORT

12:48 PM

Buzzing stock

 

Ashok Leyland rose over 4% to Rs 112 on BSE after the company's total sales rose 25% to 13,634 units in August 2017 over August 2016. 

12:30 PM

CRISIL downgrades Union Bank, Corp Bank's tier I, II bonds

 

Ratings agency CRISIL has downgraded the rating on Union Bank of India and Corporation Bank’s tier I and II bonds. The asset quality and income profile and profitability of public sector lenders are expected to remain under pressure. READ REPORT

12:14 PM

Kotak Securities on GDP

 

We believe growth has likely bottomed out in 1QFY18. We expect the economy to gradually show signs of recovery on the back of continued remonetization, expected restocking, easy financial conditions and improving rural demand from higher wages and good monsoons. 

 

But there are enough lingering factors which may keep overall FY2018 outlook sober: (1) possibly lower general government expenditure growth, (2) GST-led transient disruptions, (3) sluggish urban wage growth, (4) lack of private sector investment growth amid excess slack and overleveraged corporate balance sheet and (5) relatively weak external sector dynamics. 

 

We maintain our FY2018 real GVA growth estimate at 6.8% and maintain a watch on the extent of buoyancy across sectors in 2QFY18 for any downward revisions to our estimates

12:11 PM

Wipro sets share buyback price

Wipro has announced its buyback plan at Rs 320 a share. The company said it would buyback up to 343.75 million fully paid-up equity shares representing 7.06 per cent  of the total paid-up equity share capital at a price of Rs 320 totalling up to Rs 11000 crore. READ MORE

12:10 PM

UBS on Indian economy

 

We are revising down our forecasts for India's GDP growth to 6.6% YoY and 7.4% YoY in FY18 and FY19, respectively (vs. our earlier estimates of 7.2% and 7.7%). We expect growth to pick up in the coming quarters as economic activity normalises post GST implementation. 

 

That said, we continue to see a lopsided growth recovery in India largely led by consumption as exports stabilise. We do not expect an investment cycle recovery led by the private corporate sector before FY19, as capacity utilization in key industries is currently at a multi-year low.

 

11:52 AM

R Seshasayee issues statement against Murthy

Rebutting allegations made by Infosys co-founder N R Narayana Murthy, former company chairman R Seshasayee in a statement on Friday said he could not understand the reason behind the persistent vendetta against him. 

In his statement, Seshasayee said it was patently offensive to quote unnamed whistle blowers, adding that he had always been candid and truthful in his communications about Infosys. 

 

11:36 AM

A disappointing growth story

 

The gross domestic product (GDP) growth number for April-June quarter of FY18 comes in as a disappointment, with a low of 5.7% being recorded against expectations of growth in the region of 6.5%. Curiously, some of the key reforms that have been implemented by the government in the last 9 months or so have left their shadows on this performance. READ FULL ANALYSIS

11:17 AM

Auto stocks trade higher 

Auto stocks were buzzing in trade with the Nifty Auto index gaining 1% against a marginal 0.4% rise on the benchmark Nifty50 index after two auto majors Maruti Suzuki and Bajaj Auto reported robust sales in August. READ MORE

Source: NSE

11:03 AM

Markets check

At 11:00 am, the Sensex was trading at 31,868, up 138 points, while the broader Nifty50 was ruling at 9,959, up 41 points.