Nifty ends below 10,500, Sensex down nearly 300 pts; PSU bank index dips 2%

All that happened in the markets today.

3:48 PM

Sectoral trend (Image source: NSE)

3:46 PM

Market watch (Image source: BSE)

3:34 PM

Market at close

 

The S&P BSE Sensex ended at 34,010, down 286 points while the broader Nifty50 index settled at 10,452, down 93 points.

3:23 PM

PNB scam won't affect recap plan, bank can take Rs 114-bn hit: Govt sources

 

The Finance Ministry sources on Friday said that Punjab National Bank (PNB) is fully capable of taking the entire hit of Rs 114 billion fraud.

 

The state-owned corporation, which had earlier detected a $1.77 billion scam including jeweller Nirav Modi acquired fraudulent letters said that the role of other 4 banks will be probed, and the will have to bear consequences if found to have defaulted the norms. CLICK HERE FOR FULL STORY

3:05 PM

MUST READ Bank vulnerabilities: PNB fraud exposes failure of systems and oversight

Punjab National Bank, owned by the Union government, has admitted that fraud of Rs 114 billion has occurred within a Mumbai branch. False letters of undertaking were used as a basis for branches abroad of other Indian banks to transfer funds in dollars on behalf of PNB. The letters were issued for accounts related to gems and jewellery companies controlled by Nirav Modi and his relatives. It has been revealed that Mr Modi left India in early January, well before the original first information report in this case was filed with the police. READ MORE

3:00 PM

Market Check

S&P BSE Sensex	33,978.78		-0.93%
Nifty 50	10,447.15		-0.93%
S&P BSE 200	4,568.18		-1.07%
Nifty 500	9,223.15		-1.08%
S&P BSE Mid-Cap	16,568.10		-1.40%
S&P BSE Small-Cap	17,976.14		-1.54%

2:45 PM

PNB's FY17 fund-based exposure to jewellery sector at 0.6% of loan book

Punjab National Bank (PNB) that has been at the centre of the Rs 114 billion fraud perpetrated by Nirav Modi had a fund and non-fund based exposure (as a percentage of loan book) at 0.6% and 0.1% respectively in FY17, suggests a recent Edelweiss Securities report on the sector co-authored by Kunal Shah and Prakhar Agarwal.

 

Bank of India (BoI), State Bank of India (SBI), Canara Bank and IDBI Bank are among those that highest fund-based exposure to the sector as a percentage of total loan book among the public sector (PSU) during this period. READ MORE

2:37 PM

After Nirav Modi scam at PNB, fear of sweetheart deals at other banks too

These are early days in the Nirav Modi saga, but top financial sector officials are not ruling out more such sweetheart deals at other banks, given that the overseas bill discounting business that traders deal in is highly porous.
 

The present case has surfaced because an innocuous rule change by the Reserve Bank of India (RBI) in early January forced Punjab National Bank (PNB) to tap Nirav Modi and other importers for more margin money. Another trigger, it would seem, was an alleged query from RBI seeking the bank’s response over one of its officials allegedly demanding favours from Modi’s company in return for issuing the next Letter of Undertaking, or buyer’s credit. CLICK HERE FOR FULL STORY
 

2:21 PM

Ending licences anti-competitive: Index provider MSCI slams Indian bourses

Global index provider MSCI has slammed Indian exchanges’ decision to terminate licensing and data-feed agreements with their global counterparts.

 

MSCI, whose indices, widely used by passive investors, help channel billions of dollars into Indian markets, said the concerted announcement by three domestic exchanges was “anti-completive” and would restrict access to the Indian market. READ MORE

2:07 PM

Market Check

S&P BSE Sensex	34,038.69		-0.75%
Nifty 50	10,469.60		-0.72%
S&P BSE 200	4,575.43		-0.91%
Nifty 500	9,241.70		-0.88%
S&P BSE Mid-Cap	16,594.55		-1.24%
S&P BSE Small-Cap	17,993.28		-1.45%

1:52 PM

Shareholders okay RCom asset monetisation plan for servicing Rs 450-bn debt

Debt-ridden telecom operator RCom on Friday said its shareholders have approved an asset monetisation plan which will be used to repay dues. READ MORE

A man opens the shutter of a shop painted with an advertisement of Reliance Communications in Mumbai. Photo: Reuters

1:43 PM

Fortis Healthcare under pressure after SC allows FIs to sell pledged shares

 

Fortis Healthcare has slipped 20% to Rs 115 in noon deal trade, falling 24% from its intra-day high on BSE on back of heavy volumes after the Supreme Court (SC) allowed financial institutions to sell pledged shares of the company. CLICK HERE FOR MORE

1:24 PM

Nifty PSU Bank hits over three-month low; down 26% from 52-week high

Shares of public sector banks continues to trade lower for the fifth straight trading session with the Nifty PSU Bank index hitting an over three-month low after the Reserve Bank of India (RBI’s) revised framework on resolution of stressed assets and the detection of about Rs 144 billion fraudulent and unauthorised transactions by the Punjab National Bank (PNB) at one of its branches in Mumbai. READ MORE

1:13 PM

Axis AMC to venture into realty funds, hires Balaji Rao as business head

Axis Asset Management Company (AMC), a unit of Axis Bank, is padding up to foray into the real estate funds business through the alternative investment fund (AIF) route.
 

It has hired real estate funds veteran Balaji Rao to head the business and build a core team of eight to 10 people in the investment and asset management verticals. READ MORE

1:02 PM

Market Check

S&P BSE Sensex	34,186.98		-0.32%
Nifty 50	10,507.20		-0.36%
S&P BSE 200	4,596.45		-0.46%
Nifty 500	9,279.90		-0.47%
S&P BSE Mid-Cap	16,666.27		-0.82%
S&P BSE Small-Cap	18,094.43		-0.90%

12:45 PM

Ending licences anti-competitive: Index provider MSCI slams Indian bourses

Global index provider MSCI has slammed Indian exchanges’ decision to terminate licensing and data-feed agreements with their global counterparts.
 

MSCI, whose indices, widely used by passive investors, help channel billions of dollars into Indian markets, said the concerted announcement by three domestic exchanges was “anti-completive” and would restrict access to the Indian market. READ MORE

12:19 PM

Motherson Sumi falls 12% in three days post December quarter results

Motherson Sumi Systems has fallen 6% to Rs 321 on BSE in intra-day trade, extending its past two days 6% decline after the auto ancillary company reported a weak operational performance in December 2017 (Q3FY18) quarter.
 

The company’s consolidated net profit grew 5% to Rs 4.37 billion due to higher depreciation and tax outgo. Total sales during the quarter rose 36% to Rs 143 billion over the previous year quarter. READ MORE

12:01 PM

Nifty PSU Banks crack: PNB slips nearly 6%

11:58 AM

Sensex gainers and losers

11:55 AM

Market Check

S&P BSE Sensex	34,288.26		-0.03%
Nifty 50	10,555.85		0.10%
S&P BSE 200	4,612.64		-0.11%
Nifty 500	9,321.20		-0.03%
S&P BSE Mid-Cap	16,735.44		-0.40%
S&P BSE Small-Cap	18,182.29		-0.42%

11:54 AM

PNB scam: How Nirav Modi, one of India's richest men executed a $2 bn fraud

On Valentine’s Day, one of India’s biggest banks disclosed an almost $2 billion fraud allegedly by one of the country’s richest men, who deals in pearls and diamonds.

Shares of the lender, Punjab National Bank, plunged on the news, dragging down other lenders when it said the scam may extend to multiple banks.

With several questions still unanswered, click here’s to know about the case

11:26 AM

Sectoral Watch: Nifty PSU Banks down over 1%

11:21 AM

Market Comment

 

The recent small correction in the market notwithstanding, valuations of the Indian market are still quite stiff. The Nifty-50 Index trades at 17.9X FY2019E ‘EPS’ (free-float basis) and we build in 25.6% growth in the net profits of the Nifty-50 Index in FY2019. Notwithstanding the usual issues regarding the quantum of earnings growth, the quality of earnings growth is also quite poor with 60% of the incremental profits of the Nifty-50 Index for FY2019 coming from sectors such as PSU banks, metals & mining, oil & gas and utilities, which should logically trade at low multiples

 

(Source: Kotak Securities)

11:15 AM

INTERVIEW OF THE DAY: I am cautious on public sector banks now: Saibal Ghosh

Public sector banks have been in the limelight once again with the country’s second-largest public sector bank, Punjab National Bank unearthing fraudulent transactions. SAIBAL GHOSH, chief investment officer at Aegon Life Insurance in conversation with Puneet Wadhwa says he is remains cautious on the banking sector. Nifty earnings should grow at around 17% - 18% in FY19, he says. READ MORE

Saibal Ghosh, CIO, Aegon Life Insurance

11:02 AM

Sebi suspects price rigging by PSBs, examines stock trading pattern

The Securities and Exchange Board of India (Sebi) is examining the trading pattern in the stocks of state-run banks, following the announcement of the government’s recapitalisation programme on January 25.According to sources, the market regulator suspects price rigging by a group of investors.
 

On January 25, the Nifty PSU Bank index, a gauge of the public sector bank (PSB) shares’ performance, had declined 6 per cent. Sources said the government raised the issue of declining share prices of top PSBs, despite providing capital to revive growth. READ MORE

10:45 AM

NSE keen to buy 25% stake in Dhaka stock exchange to rival China

India’s biggest stock exchange is keen to buy a 25 per cent stake in Dhaka Stock Exchange, rivaling an offer from a Chinese bourse. READ MORE

10:32 AM

8K Miles surges 10% on launch of Blockchain Platform - 8K Health Edge

8K Miles Software Services has surged 10% to Rs 867 on BSE in intra-day trade in otherwise subdued session after the company announced that it is launching 8K Health Edge, a proprietary Blockchain platform which, may translate into solutions for some of the most complex problems in global healthcare. READ MORE

10:19 AM

Emkay Global on auto sector

 

We believe that the stage is set for strong growth in automobile demand in FY19, led by: 1) increase in Government infrastructure spending and focus on rural economy, 2) strong rural demand and higher disposable income in view of 7th Pay Commission awards, and 3) new launches. Our top picks are Ashok Leyland, Mahindra & Mahindra, Hero MotoCorp, Tata Motors and Exide Industries

10:15 AM

Edelweiss on Apollo Hospitals

 

Apollo Hospitals’ (APHS) Q3FY18 consolidated revenue grew 12%, EBITDA rose 17% YoY and margin improved 40bps YoY. 

 

Key highlights of the quarter were: 1) 6% YTD growth in Tamil Nadu region, which includes the Chennai cluster, where growth was subdued last year; 2) capex intensity down to Rs 3.8bn, but debt jumped by Rs 2bn in 9mFY18 on Rs 1bn dividend payment; 3) started oncology centre at the Navi Mumbai hospital leading to one-time advertising spend of Rs 15mn; overall losses at Rs 105mn; and 4) AHLL’s losses remained at Rs 250mn. 

 

We believe, capex peaked in FY17 and is likely to decline 50% from FY18. This, we estimate, to lead to ~200bps margin improvement over FY18-20. Maintain ‘BUY’ with TP of Rs 1,700

10:14 AM

Market Check

S&P BSE Sensex	34,351.55		0.16%
Nifty 50	10,568.40		0.22%
S&P BSE 200	4,620.75		0.07%
Nifty 500	9,334.10		0.11%
S&P BSE Mid-Cap	16,770.98		-0.19%
S&P BSE Small-Cap	18,243.22		-0.08%