MARKET WRAP: Sensex ends 224 pts lower on global cues, fall in bank stocks

Banks were the top losers on Monday, with Nifty PSU Bank index falling over 3%, while Nifty Bank index slipped over 1%

3:49 PM

Nifty PSU Bank index ends 3.22% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
ALLAHABAD BANK	42.75	44.80	-2.05	-4.58
CANARA BANK	269.90	282.35	-12.45	-4.41
ANDHRA BANK	32.60	34.05	-1.45	-4.26
SYNDICATE BANK	39.55	41.30	-1.75	-4.24
BANK OF INDIA	90.00	93.60	-3.60	-3.85

3:39 PM

Sectoral Trend

3:38 PM

Top Sensex gainers and losers

3:33 PM

Markets at Close

The S&P BSE Sensex ended the day at 37,645, down 224 points while the broadr Nifty50 index setted at 11,356, down 74 points

3:00 PM

Outlook on Indian banks to stay negative over weak core capital: Fitch

Fitch Ratings on Monday said its outlook on Indian banking sector is likely to remain negative until banks, especially the public sector ones, address their weak core capital positions.

 

They need to improve capital base against mounting bad debt and poor financial performance, Fitch said. READ MORE

2:49 PM

Gold prices fall further on dollar strength

Gold prices extended declines into a third session on Monday, as the U.S. dollar climbed to a 13-month high against major peers amid financial crisis in Turkey.

Spot gold had dropped 0.2 percent to $1,208.50 an ounce by 0655 GMT, hovering not far from a 17-month low of $1,204 hit earlier in August. U.S. gold futures were down 0.3 percent at $1,215.7 an ounce. READ MORE

2:39 PM

Oil dips as emerging market woes dim demand outlook

Oil prices slipped on Monday as trade tensions and troubled emerging markets dented the outlook for fuel demand, but U.S. sanctions against Iran pointed towards tighter supply ahead.

 

Benchmark Brent crude oil was down 25 cents at $72.56 per barrel. U.S. light crude was 25 cents lower at $67.38 a barrel. READ MORE

2:20 PM

Apollo Hospitals surges 15% on strong Q1 results

Shares of Apollo Hospital Enterprises (AHEL) have surged 15% to Rs 1,087 per share on the BSE after the company posted a strong 70.86% year on year growth in net profit at Rs 601.6 million during the quarter ended June 30, 2018 (Q1FY19). It had a profit of Rs 352.1 million during the same period last year. READ MORE

2:07 PM

Nifty sectoral trend

2:01 PM

BSE Sensex gainers and losers

1:57 PM

Antique Stock Broking on Future Retail

We expect margin expansion to continue, led by improvement in business mix, reduction in losses, and attaining of profitability in HyperCity, post restructuring. Further improvement in profitability of the small store business will aid margins in the coming years. In view of the underperformance on the earnings front, we cut our EPS estimates for FY19E and FY20E by 26% and 17% respectively to INR14.1 and INR15.0. Our target price stands revised to Rs 596. We maintain BUY

1:44 PM

IT STOCKS ON A ROLL

COMPANY	LATEST( )	CHG( )	CHG(%)	VOLUME
FIRSTSOUR.SOLU.	64.10	3.35	5.51	1494188
TECH MAHINDRA	658.20	12.40	1.92	659827
INFIBEAM INCORP.	195.85	0.90	0.46	556049
TCS	2001.90	8.05	0.40	285026
INFOSYS	1408.00	22.80	1.65	191666

1:43 PM

MUTUAL FUNDS Why you should not exit funds based on a year's underperformance

Large-cap funds have underperformed their benchmarks by a wide margin over the past year. Even funds in the large- and mid-cap category and the multi-cap category (most funds in these categories currently have high exposure to large-cap stocks) are also underperforming their benchmarks by wide margins READ MORE

1:42 PM

MARKET CHECK

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	37,766.26	-102.97	-0.27
S&P BSE SENSEX 50	11,931.27	-28.16	-0.24
S&P BSE SENSEX Next 50	33,801.43	-32.06	-0.09
S&P BSE 100	11,672.03	-25.09	-0.21
S&P BSE Bharat 22 Index	3,607.53	-5.25	-0.15

1:40 PM

Here's why the US sanctions on Iran oil will hurt India more than you think

The first US sanctions have been reimposed on Iran with little sign of either side softening its position. Curbs on oil exports will follow in early November and the effect will be bigger and swifter than last time around. Oil forecasters don't seem to have grasped that yet.

There’s no doubt that President Donald Trump will be tougher on Iran than Barack Obama was, with no gradual ratcheting-up of pressure. Importers are expected to have tapered off oil purchases by November 5, when the curbs come into effect. READ MORE

1:28 PM

Sun TV Network dips 6% after June quarter results

Shares of Sun TV Network have slipped 6% to Rs 776 per share on the BSE, after the company reported 63% year-on-year (YoY) growth in net profit at Rs 4.09 billion in June quarter (Q1FY19) driven by strong performance from its IPL franchise. The revenue was up 42% at Rs 11.20 billion on YoY basis. READ MORE

1:11 PM

FUND PICK UTI Regular Savings Fund: Conservative on risk, superior on return

The fund was launched in December 2003 as UTI-MIS Advantage Plan. Subsequent to the re-categorisation of mutual fund (MF) schemes by the Securities and Exchange Board of India (Sebi), it was renamed UTI Regular Savings Fund in May this year.

 

The fund has featured in the top 30 percentile in the conservative hybrid funds category of CRISIL Mutual Fund Rankings (CMFR) for the two quarters ended June 2018. READ MORE

12:58 PM

United Breweries rallies 7% on strong Q1 results

United Breweries (UBL) rallied 7% to Rs 1,286 on the BSE in intra-day trade after the company reported healthy 37% year-on-year (YoY) increased in net profit at Rs 2,219 million in June quarter (Q1FY19). Revenue grew 11.2% at Rs 18.66 billion on YoY basis.
 

The company reported 12% volume growth compared with industry average growth of 9% during the quarter. READ MORE

12:43 PM

MARKET COMMENT Rushabh Maru - Research Analyst , Anand Rathi Share on rupee

Emerging market currencies have declined sharply as Turkish lira has fallen to all time low level after US president Donald Trump imposed sanctions and tariffs on Turkey. The crisis is unlikely to resolve anytime soon. An absence of aggressive intervention by the RBI has also hurt the rupee.

Market is nervous ahead of India’s CPI data due later today. The dollar has strengthened to multi-month high on expectations of aggressive interest rate hikes by the Federal Reserve in coming months as the US economy is experiencing strong growth momentum. Hence, due to all these factors, the rupee has declined to all time low level today

12:31 PM

HDFC Securities on Jamna Auto

We  have  cut  EPS estimates by 6% for FY19/20 factoring in margin pressure and  increase  in depreciation and interest cost. Expect revenue/EPS growth of  17/27%  over  FY18-20E.Given  the superior return ratios, ROE(+30%),and phenomenal  growth,  JAMNA  will  continue  to  trade  at  premium  vs  its historical  multiple(15x).  We  value the stock at Rs 100 (20xFY20E) vs 107 earlier. Maintain BUY.

12:31 PM

HDFC Securities on Jamna Auto

We  have  cut  EPS estimates by 6% for FY19/20 factoring in margin pressure and  increase  in depreciation and interest cost. Expect revenue/EPS growth of  17/27%  over  FY18-20E.Given  the superior return ratios, ROE(+30%),and phenomenal  growth,  JAMNA  will  continue  to  trade  at  premium  vs  its historical  multiple(15x).  We  value the stock at Rs 100 (20xFY20E) vs 107 earlier. Maintain BUY.

12:24 PM

MARKET COMMENT Rabobank International on developments in Turkey

Turkey is almost certain to need a bail-out ahead: the key issue is, in which currency? If it is via the IMF it will be in USD, as usual, and with all the usual strings attached: austerity, privatisation, reforms, and pro-US foreign policy.

If it is from ‘new friends’ Russia or China, things will look very different. Loans would be in RUB or CNY, and would be a huge step towards de-dollarization and Turkey’s financial, economic, political, and yes, military reorientation eastwards. That is Great Power and Great Currency hand in hand - and Turkey is neither

12:14 PM

KR Choksey Institutional Equities on Suzlon

The prolonged timeline for settling grime has impacted Suzlon’s financial performance since last few quarters. We believe commissioning can ramp up post Q3FY19 and hence one can expect FY19 to be washout year as FY18.

On the other side, it is expected that SECI VI will open in Aug’18 and Suzlon historically garnered 25% market share in terms of overall order wins. Thus, this improves order backlog visibility in the coming period. Apart from this, the company is already into advance negotiation with few IPPs for 20% of the earlier 7.5GW auctioned orders; any positive surprise can augur well for the company going ahead.
 

We have lowered FY19E estimates, while maintained FY20E estimates. We valued the company on SOTP basis and arrived a target price of Rs 15.8, upside potential of 119%. We retain BUY rating on the stock.

12:09 PM

TOP GAINERS & LOSERS IN THE FINANCIAL SECTOR (BSE)

COMPANY	LATEST( )	CHG( )	CHG(%)	VOLUME
PUNJAB NATL.BANK	82.10	-1.05	-1.26	1636205
ST BK OF INDIA	296.25	-8.20	-2.69	1289253
IDFC BANK	44.35	1.05	2.42	619101
IDBI BANK	61.55	-0.30	-0.49	458254
BANK OF INDIA	91.65	-1.85	-1.98	425399

12:08 PM

Anand Rathi on Hinduja Global

In line with estimates, HGS’ Q1 revenue was $165m (down 2% q/q, up 6% y/y, adj for acquisition) but the 6.6% margin (down q/q, 416bps y/y) disappointed. The acquired entities saw a sharper decline in revenue ($17m/qtr disclosed on acquisition but the current rate is only $12m).

Consequently, EBITDA loss in the acquired entity was $3.6m, adjusting for which HGS had 9.5% EBITDA margins. Recovery will be slow and contingent on revenues scaling up. We cut our FY19e and FY20e ~15-16%, leading to a revised target of Rs 990 (9x FY20 EPS)

12:06 PM

Investec Securities on Sun TV

Sun reported strong 1Q rev growth of 42% yoy and EBIT growth of 70% yoy, beat on consensus, led by IPL franchise (Rs2.2bn EBIT vs our expectation of Rs1bn). Core broadcast BU weak with 14% rev growth and flat EBIT (margin declined 690bps) – all the cost lines were elevated, especially film costs (D&A expenses up 42% yoy). The company noted one-off costs of Rs0.5bn related to its 25th anniversary.

To us, the deal-breaker (or maker) remains declining shares across key markets (Tamil/Telugu). Factoring in IPL gains in FY19E and beyond, we increase estimates 2-3%; new target price Rs880 (Rs870 earlier)

12:05 PM

Emkay on Aurobindo Pharma

Q1FY19 was marred by write-offs relating to shelf stock adjustment, which is largely non-recurring in nature. Adjusted for the same, numbers are strong, especially given the current challenging business environment.  Return ratios for ARBP are the highest among its comparable peers. We maintain BUY rating with a Target Price (TP) of Rs690, valuing it at 15x on FY20E EPS of Rs46

12:00 PM

Markets at noon 

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	11360.05	11429.50	-69.45	-0.61
	9666.05	9724.45	-58.40	-0.60
	19049.60	19135.95	-86.35	-0.45
	7466.25	7537.30	-71.05	-0.94
	13.42	12.85	0.57	4.44

11:45 AM

Investors should avoid MFs with high expense ratios: All you need to know

 

Avoid paying a high expense ratio in categories where the scope for generating high outperformance doesn't exist Former Sebi chief U K Sinha recently said that India's mutual fund industry is among the most expensive globally and there is scope for bringing down costs The bottomline, according to experts, is that a high expense ratio is justified only in products that manage to generate high alpha Actively-managed equity funds in India have traditionally generated high alpha. READ MORE

11:31 AM

Tata Motors, Tata Motors DVR hit 52-week low on drop in global sales

 

Shares of Tata Motors and Tata Motors (DVR) have hit their respective 52-week lows after the company reported 5% drop in global sales, including that of Jaguar Land Rover (JLR), to 92,639 units in July.

 

“Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range in July 2018 were at 40,443 units, higher by 29%, over July 2017,” the company said in a regulatory filing. READ MORE