Markets pare entire gains; Sensex down 90 points, Nifty ends below 10,000

All that happened in Wednesday's trade

3:57 PM

Vinod Nair, Head of Research, Geojit Financial Services 

 

The Market failed to hold the opening positive momentum as profit-booking emerged towards close due to caution ahead of CPI & IIP data. September CPI inflation is expected to surge to 3.52% from 3.36% while the rising crude oil price and volatility in rupee may limit RBI interference on key rate. Additionally, earnings season will kick-start tomorrow with the result of IT heavyweight and market will take direction from the expectations and the actual numbers. 

3:55 PM

Nifty IT sole sectoral gainer 

Source: NSE

3:52 PM

Top Sensex gainers and losers at close

Source: BSE

3:46 PM

Market breadth

Market breadth, indicating the overall health of the market, turned negative. There were at least two losers for every gainer on the BSE. 1,806 shares declined, while 938 shares rose. 106 shares remained unchanged. 

3:44 PM

Broader markets

 

After hitting its fresh high, the BSE Smallcap index pared all its gains to end over 1% lower. The BSE Midcap index shed 0.8%.

3:40 PM

Markets at close

The S&P BSE Sensex ended at 31,833, down 90 points, while the broader Nifty50 settled at 9,984, down 32 points.

3:25 PM

Outlook on auto sector

 

We  continue  to  believe that the stage is set for strong demand for automobiles across segments on the back of (1) An increase in the government’s  capital  spending  and  focus on the rural economy, (2) Higher  rural  income with well-spread normal monsoon, (3) Increasing per  capita  income  and  growing  urbanisation, (4) Falling interest costs and (5) Low base effect. In  our coverage universe, Maruti Suzuki, Hero Motocorp, M&M and Tata Motors are our top picks. This is owing to the fact that they have an extensive  distribution network and strong rural franchise, and would  be  major  beneficiaries  of demand revival in the next two years. We also  prefer Eicher and Force Motors, given the increasing preference for  premium,  stylish  and  differentiated  vehicles. We continue to maintain  our  positive stance on Tata Motors, as JLR’s volume growth momentum is likely to continue with its healthy new product cycle and margin trajectory.

(Source: HDFC Securities)

3:22 PM

Edelweiss Securities downgrades Coal India to 'HOLD' 

 

Our target price of Rs 285 has been achieved and we see limited upside hereon as even price hikes of 6% (if taken) would merely nullify the adverse impact on EBITDA due to higher than expected wage increase. We have lowered our dividend yield estimate from 8% to 4-6% now in light of constrained cash accretion. The stock trades at top end of its peers and its own historical trading range. Hence, we downgrade to ‘HOLD/SP’ with revised TP of Rs 275, implying an exit multiple of 14.5x FY19E EPS. 

3:16 PM

Buzzing stock

Sical Logistics rose over 5% to Rs 213.45 on BSE after the company's board approved a proposal to initiate the buying of 26% stake held by MMTC in the company's subsidiary Sical Iron Ore Terminals.

3:11 PM

Global markets

Spanish stocks and bonds rallied and the euro hit a two-week high on Wednesday as European markets took relief from Catalonia stopping short of declaring immediate independence from Madrid.

 

MSCI’s 47-country world stocks index briefly hit a fresh record high in opening European trading as a 1.5 percent jump in Spain’s IBEX added to a 10-year high set by Asian shares overnight.

 

The biggest surge came from Spanish banks which rallied as much as 4 percent, while the country’s government bond yields - which gauge political tension levels - saw their second biggest fall in a month.

3:07 PM

Volatility index

India VIX rose over 4% to 12 in intraday trade.

Source: NSE

3:04 PM

India to lose fastest-growing economy tag? 

 

Demonetisation and Goods and Services Tax (GST) seem set to hamper India's growth in 2017-18. The International Monetary Fund (IMF) is the latest to trim its 2017-18 economic growth forecast for India. Even as IMF raised its economic growth projections for most major economies, it did the opposite for India. Also, its projection of 6/& per cent growth for India is lower the 6.8 per cent for China. That means, IMF sees India losing its tag of the fastest-growing major economy. READ FULL REPORT

3:03 PM

TCS trades firm ahead of Q2 results

 

Tata Consultancy Services (TCS) was trading 2% higher at Rs 2,510 on the BSE in an otherwise subdued market ahead of July-September quarter (Q2FY18) results on Thursday, October 12, 2017. READ MORE

2:46 PM

Markets check 

At 2:45 pm, the S&P BSE Sensex was trading at 31,862, down 67 points, while the broader Nifty50 was ruling at 9,998, down 18 points.

2:32 PM

IPO watch: GIC Re

GIC subscription update at 2pm on day 1: Subscribed: Overall 0.72x, Retail 0.03x, QIB 1.41x and Employee 0.05x
 

2:30 PM

Sept retail inflation at 6-month high on GST, public sector pay rise: Poll

 

India's retail inflation edged up in September, driven by higher salaries of government employees as well as the impact of the Goods and Services Tax (GST), a Reuters poll found, a development that would make further monetary policy easing unlikely. Consumer inflation is forecast to have risen to 3.60% in September from a year ago, above August's 3.36%, the poll of 36 economists showed. The data is due to be released on Oct. 12 at 1200 GMT. CLICK HERE FOR THE FULL STORY

A vegetable vendor counts currency notes as he waits for customers at a wholesale vegetable market in Ahmedabad (Photo: Reuters)

2:14 PM

Buzzing stock 

Shares of Prakash Industries surged over 3% in intraday trade after ace investor Rakesh Jhunjhunwala increased stake in the integrated steel and power company. 

 

Following the development, the stock advanced 2.88% to Rs 134 on BSE. 

1:55 PM

Nifty slips below 10,050 in noon deals

Top five losers dragging the index down

Source: NSE

1:29 PM

Buzzing stock

State-run Dena Bank rose as much as 4.3 percent to its highest since September 26 after the bank sold shares to institutions to raise between Rs 2.75 billion rupees and 4.25 billion rupees.

1:17 PM

Economy watch

 

In the last one year, India has witnessed 3 important structural reforms (Demonetisation, GST, RERA) which are impacting Indian economy and the banking sector. Banking Sector, which is the key driver of Indian economy, is currently going through challenging times due to low credit growth, deterioration in asset quality and low profitability.

 

Measuring the quantitative impact of implemented/to be implemented structural reforms is always difficult to assess considering its relevance to short-term economic and fiscal costs. Past empirical studies suggest that structural reforms increases the efficiency and competitiveness of the economy, with beneficial effects for long-term fiscal sustainability. 

 

Studies shows that the short-term positive effects of some reforms are stronger during good economic times and weaker during bad times (exactly replicates Indian growth story now). However for benefits to realise, we have to have a little patience as experience of OECD and European countries show that the actual benefits on growth, unemployment and consumption begins to manifest after 2 years. In essence, there could be some postponement of immediate consumption leading to negative impact in short term

 

(Source: SBI Ecowrap report)

1:07 PM

Broader markets

The BSE Midcap and the BSE Smallcap indices pared some gains to trade 0.3% and 0.5% higher, respectively.

1:03 PM

Markets at 1pm

 

At 1:00 pm, the S&P BSE Sensex was trading at 32,036, up 111 points, while the broader Nifty50 was ruling at 10,055, up 38 points.

12:45 PM

Buzzing stocks

 

Shares of Bharti Infratel, Bharti Airtel and Idea Cellular advanced up to 4.5%, following media reports that the KKR-led consortium fund is in talks to buy the tower business. Bharti Airtel was the best performer on Sensex and Nifty.

12:30 PM

9 IPOs that gained over 100% against issue price in last one year

 

Avenue Supermarts, Shankara Building Products, Central Depository Services India (CDSL), PSP Projects, Sheela Foam, Apex Frozen and Endurance Technologies are among nine initial public offers (IPO) that have given healthy returns to the investors over the last one year. READ FULL REPORT

12:17 PM

Motilal Oswal on Tata Motors

 

The stock trades at 21.3x/6.9x FY18E/FY19E consolidated EPS. Maintain Buy with a target price of Rs 562 (Sep-19 SOTP-based) for ordinary shares and Rs 392 for DVR (~30% discount to TP for ordinary shares.

12:02 PM

MARKET COMMENT: Rakesh Tarway, Head of Research, Reliance Securities

 

India continues to remain a popular investment destination and is an overweight in most global portfolios. However, over the past one year, it has underperformed other Asian indices like Hang Seng (up 24%) and Nikkei (up 19%). 

 

Indian Equity markets are waiting for revival of corporate earnings after a very flattish performance over the last 4-5 years. Sub par performance on corporate earnings front coupled with rally in equity markets have taken the valuation to almost all time highs in India. There is a fundamental transition underway in the economy with several first time steps taken during the last one year.

12:00 PM

Bad loans hit record $146 billion

 

Indian banks’ sour loans hit a record Rs 9.5 lakh crore ($145.56 billion) at the end of June, unpublished data show, suggesting Asia’s third-largest economy is no nearer to bringing its bad debt problems under control.

 

A review of the Reserve Bank of India (RBI) data obtained through right-to-information requests shows banks’ total stressed loans, including non-performing and restructured or rolled over loans, rose 4.5 per cent in the six months to end-June. In the previous six months they had risen 5.8 per cent. READ FULL REPORT

12:00 PM

Sector watch: Cement

 

All-India cement prices declined by Rs8/bag mom in October 2017, maintaining the weak trend seen through the monsoon period. Price changes were marginal in North and West markets while South and East saw a sharp fall of Rs16-18/bag mom. Weak price trends threaten another year of earnings downgrades on the back of optimistic assumptions. Valuations for large-cap names are rich notwithstanding projected strong growth in earnings trajectory. We prefer Grasim Industries and select mid-cap names that offer relative valuation comfort.

 

(Source: Kotak Securities)

11:47 AM

Buzzing stock

Lumax Industries rallied 8% to Rs 1,575 on BSE in intra-day trade on Wednesday, extending its Tuesday’s 6% gain, after the investor Ashish Kacholia bought nearly one percentage point stake in the company through open market. READ MORE

11:30 AM

Motilal Oswal on Coal India

 

We expect the stock to get re-rated because of the many levers that can drive upside to our estimates. Currently, there is shortage of coal, as power plants have destocked heavily. We are raising the valuation multiple from 7.5x to 8x FY19E EV/EBITDA, and also increasing the target price to INR335 (from Rs 305), implying 17% upside. The stock is trading attractively at 7.2xEV/EBITDA, 13.6x P/E and 5.5% dividend yield. Maintain Buy.