MARKET WRAP: Banks lead recovery; Sensex ends 113 pts up, Nifty at 10,912

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3:39 PM

Sectoral gainers and losers of the day on NSE

3:35 PM

Gainers and losers of the day on S&P BSE Sensex

3:33 PM

Market at close

The S&P BSE Sensex ended at 36,583, up 113 points or 0.31 per cent, while the broader Nifty50 index settled at 10,909, up 15 points or 0.14 per cent.

3:24 PM

Tejas Networks, Shankara Building, RCom, RPower, Punj Lloyd hit new lows

Shares of Tejas Networks, Shankara Building Products, Tata Teleservices (Maharashtra), Jaiprakash Associates, Punj Lloyd, Religare Enterprises and Prabhat Dairy among 29 stocks that hit new lows on BSE in the intra-day trade on Monday. Anil Ambani Group (ADAG) five companies – Reliance Communications (down 48 per cent at Rs 6), Reliance Power (down 32 per cent at Rs 17.80), Reliance Naval and Engineering (down 15 per cent at Rs 10.07), Reliance Home Finance (down 15 per cent at Rs 29.50) and Reliance Nippon Life Asset Management (down 5 per cent at Rs 129) – hit all-time lows in the intra-day deal today. READ MORE

3:22 PM

ALERT

Reliance Industries nears record high of Rs 1329, touched on August 29, 2018. stock up 4% at Rs 1,297 on BSE

3:15 PM

FDI declines 11% to $22.66 billion during April-Sept; may impact rupee

Foreign direct investment (FDI) into India has declined 11 per cent to $ 22.66 billion during April-September period of the current fiscal, according to commerce and industry ministry data.

 

The foreign fund inflows during April-September 2017-18 stood at $ 25.35 billion. READ MORE

2:57 PM

FY20 fiscal deficit to overshoot target, slip to 3.6%: Fitch Solutions

Fitch Solutions, the research arm of Fitch Group, Monday projected the government's fiscal deficit to overshoot the budgeted target by 0.2 per cent to 3.6 per cent of GDP in 2019-20 fiscal. It said that 2019-20 Budget appears to show a strong populist bent in the run up to the General election due by May 2019. READ MORE

2:52 PM

Top gainers on BSE500

COMPANY	PRICE(rupees)	CHG(rupees)	CHG(%)	VOLUME
BLISS GVS PHARMA	159.60	15.15	10.49	361176
FUTURE CONSUMER	46.20	2.65	6.08	493302
FUTURE RETAIL	448.35	21.70	5.09	23367
AARTI INDS.	1710.20	81.60	5.01	8222
ENDURANCE TECH.	1182.65	51.65	4.57	1046

2:41 PM

ICICI Securities on Oriental Carbon

We value OCCL at Rs 1,300 i.e. 16x P/E on FY20E EPS of Rs 81.2/share and assign a HOLD rating to the stock. We draw comfort from healthy cash flow generation at OCCL with present CFO yield at ~8%. We also build in successful closure of buyback amounting to ~Rs 35 crore in FY19E.

 

2:34 PM

Cairn India-Volcan Investment transaction met govt standards, says Vedanta

Clarifying the Cairn India-Volcan Investment transaction, Anil Agarwal-led Vedanta on Monday said the structure provides significantly higher returns compared to other overseas cash management investments that would typically return around two per cent.

 

Last week, Vedanta announced that Cairn India Holdings Limited, would invest $0.5 billion in Volcano Investment Limited, the parent company of Vedanta Limited, as part of the structured investment representing the economic interest in the upside potential of 24.71 million shares or 1.8 per cent outstanding shares of Anglo American PLC. READ MORE

2:23 PM

STOCK IMPACT

2:18 PM

NEWS ALERT

IDBI Bank reported Q3 net loss at Rs 4,185 cr vs loss of Rs 1,524 cr YoY

2:12 PM

Market check

1:59 PM

This speciality chemicals stock zoomed 1700% in 5-years; hits new high

Shares of Aarti Industries hit a new high of Rs 1,714 apiece, gaining 5 per cent on the BSE in an otherwise weak market after the company posted strong growth of 47 per cent in net profit at Rs 132 crore in December quarter (Q3FY19). The company, one of the most competitive benzene‐based speciality chemical companies in the world, had a profit of Rs 90 crore in the year-ago quarter. READ MORE

1:45 PM

WEB EXCLUSIVE Disinvestment target achievable; PSU stocks to remain subdued, say analysts

The government has set itself an ambitious disinvestment target of Rs 90,000 crore for the financial year 2019 – 20 (FY20), which, analysts believe, can be achieved but is likely to keep the gains in PSU stocks capped going ahead. The government has already short-listed 10 central public sector enterprises (CPSEs), including RailTel, TCIL and Tehri Hydro Development Corporation (THDCL) for disinvestment in FY20. Thus far in FY19, Rs 36,000 crore has already been raised through stake sale in CPSEs, as well as tranches of Exchange Traded Funds (ETFs) and share buybacks and faces an uphill task of garnering another Rs 44,000 crore if the target of Rs 80,000 crore has to be met by March-end. READ MORE
 

1:43 PM

Motilal Oswal on State Bank of India

Credit cycle is clearly showing recovery signs, as evident in the declining NPL formation (3QFY19 slippage was the lowest in the past 13 quarters). The size of SMA-1&2 accounts at INR170.5b (<1% of advances) and the steady trends in core portfolio will drive a further improvement in asset quality over FY20/21. Pick-up in loan growth, along with a further improvement in margins, is likely keep revenue growth buoyant. This, coupled with stable opex (as one-off provisions are largely done away with), will drive healthy growth in operating profits. We cut our FY20/21 estimate by 8%/2%, and revise our PT to Rs 340 (from Rs 360), which corresponds to 1.2x Sep’20E ABV. Resolution of stressed power assets and select NCLT-referred accounts remains the key near-term monitorable. Maintain Buy.

1:40 PM

Anand Rathi on Emami

To factor in the lower growth in its winter range than expected (47% of revenue), we lower our FY19e/20e/21e revenue 1.6%/1.9%/ 2.1%. Also, to account for the lower-than-expected 9M FY19 earnings we lower our FY19e/20e/21e EPS 3.4%/4.0%/7.7%. We retain our Buy, with a TP of Rs 595, assigning a 35x multiple to FY21e EPS. 

 

Risks: Longer-than-expected for the wholesale channel to stabilise, steep rise in menthol prices, failure to scale up the new products.

1:28 PM

Panasonic posts 19 percent drop in third-quarter profit, lowers full-year outlook

Japan's Panasonic Corp reported on Monday a 19 percent drop in third-quarter operating profit and lowered its full-year earnings outlook, even though investment in its battery business with U.S. electric vehicle maker Tesla Inc began to pay off. READ MORE

1:18 PM

Nifty Metal index is trading over 2% lower

1:07 PM

Stocks that touched 52-week low on BSE500

COMPANY	PRICE(rupees)	52 WK LOW	CHG(rupees)	CHG(%)
ANDHRA BANK	25.00	25.00	-0.50	-1.96
BALKRISHNA INDS	801.05	794.65	-21.70	-2.64
BHARAT DYNAMICS	254.40	252.30	-2.80	-1.09
BIRLA CORPN.	485.00	485.00	-4.55	-0.93
DEWAN HSG. FIN.	116.30	97.00	4.85	4.35

12:52 PM

Indian banks dallying on RCom's $7 bn debt may spell trouble for Modi govt

For a capital-starved economy, India shows little urgency to extricate good money stuck in failed businesses. That was going to change after the adoption of a modern bankruptcy regime in May 2016. Alas, legal improvements notwithstanding, the culture of extending the life of bad loans to big businesses and pretending nothing is wrong with them is proving too hard to end. READ MORE

12:34 PM

DHFL turns volatile post conference call; stock rebounds 27% from day's low

Shares of Dewan Housing Finance Corporation (DHFL) rebounded 27 per cent from its intra-day low on Monday after the management in the conference call said that the company is seeking strategic partner to bring fresh equity. The stock has moved 11 per cent higher at Rs 123, bouncing back 27 per cent from its early morning low after the management said allegations of financial irregularities are false. READ MORE

12:28 PM

RBI may change stance; rate cut unlikely

Today, if we take a poll of Indian industrialists on their expectations from the Reserve Bank of India’s (RBI’s) last bi-monthly policy for the 2019 fiscal year, 10 out of 10 will pitch for a rate cut. They are also rooting for a cut in the banks’ cash reserve ratio (CRR) — or the portion of deposits kept with the RBI — to release money into the system.

 

Indisposed finance minister Arun Jaitley too has asked for a rate cut, albeit indirectly — saying, India cannot have a real rate of interest that's higher than anywhere else in the world. READ MORE

12:12 PM

NEWS ALERT

Fin Min official: Corporate Affairs Ministry looking into corporate governance issues at DHFL. Expect RBI, NHB lender banks to initiate audit inquiry into DHFL accounts. Company statement not enough against allegations of fund diversion, reports news agency NewsRise.

Impact: Stock gains 6.5%

12:11 PM

Top gainers and losers on S&P BSE Sensex

12:01 PM

MARKET CHECK

11:54 AM

RBI: Monetary policy meeting to held from Feb 5-7. Outcome at 11.45 am on Thursday

11:46 AM

Divi's Labs hits 52-week high on robust Q3 earnings; stock gains 5%

Shares of Divi’s Laboratories hit a new high of Rs 1,617, up 5 per cent on BSE in the intra-day trade on Monday after the company posted a robust growth of 69 per cent in net profit at Rs 379 crore in December quarter (Q3FY19). The pharmaceutical company had posted a profit of Rs 225 crore in a year-ago quarter. READ MORE

11:39 AM

Karvy Stock Broking on banking sector

NIFTY BANK (27085.95) underperformed the Nifty with a marginal loss of 0.11% during the week passed by while the broader index Nifty gained by 1.05%. During the week, the index took resistance at 27530 levels and could not surpass the previous swing high at  27620 levels. On the last trading day of the week, the index broke the crucial support at 27220 levels indicating weakness in the index. Considering the technical setup on the daily charts, the index may trade with a negative bias in the short term ahead until and unless 27530-40 levels are surpassed. On the stock front, AXISBANK and INDUSINDBK gained by 7.10% and 2.04% respectively during the week. Axis Bank surprised investors with earnings that beat estimates with a leg-up from its treasury operations and a recovery in profits in corporate lending as the new chief executive set a three-year agenda to re-orient the institution with higher profitability. On the other side, YESBANK lost by 15.62%  as the private sector lender announced that Pralay Mondal has tendered his resignation as Senior Group President and Head - Retail & Business Banking of the bank on January 31, 2019. Technically, Bank Nifty may face crucial resistance at 27630 and 27750 levels. For the week ahead, support for the index can be pegged at 26650 levels followed by 26450 levels.

11:22 AM

Angel Broking on Dewan Housing Finance

Over the last 4 months, there has been a broader correction in markets and especially midcap space & NBFC space, triggered by the IL&FS crisis amongst other things. DHFL had also corrected sharply, however being a 

 

1) “AAA” rated company with 

2) Deloitte as auditor, 

3) tightly regulated by RBI/NHB, 

4) public deposit taking company having large number of reputed banks/MFs as lenders 

5) major institutions as shareholder. Therefore the reasons for correction were uncertain.

 

Management had taken several steps to resolve liquidity issue post IL&FS event. However, before these measures could play out, the cobra post allegation has emerged and significantly increased the risk associated with DHFL. Hence, in our opinion, it will take long time for the dust to settle and for the company to regain investor confidence. Considering the above issues, we believe that the risk reward is not favourable at the current juncture. Thus, we recommend a Neutral rating on the stock.