Sensex gripped by volatility; Moody's cuts 2018 GDP growth forecast
30 May 2018
Stock Reaction: Shares of RPP Infra Projects rose nearly 4 percent as company bagged order from Kerala Infrastructure and Technology.
The company has bagged an order for education infrastructure division (government of Kerala undertaking) worth of Rs 318 million and Central Public Works
Department, Trichy, Tamilnadu worth of Rs 67.9 crore.
The orders include, modernization of schools as centers of excellence and metterment of infrastructure facilities in other schools (Thrissur District) for worth of
Rs 31.8 crore. The said work to be completed within 9 months.
Market Closing: Benchmark indices closed lower for the second consecutive session amid political turmoil in Italy.
The 30-share BSE Sensex declined 43.13 points to 34,906.11 and the 50-share NSE Nifty slipped 18.90 points to 10,614.40.
About 1,444 shares declined against 1,222 advancing shares on the BSE.
Nava Bharat Ventures, Info Edge, Torrent Power and Satin Creditcare gained up to 20 percent while Vakrangee, Just Dial, South Indian Bank and Adani Power fell up to 5 percent.
Buzzing : Satin Creditcare share price rallied 10 percent after the company posted March quarter profit at Rs 44 crore against loss of Rs 43 crore YoY.
Buzzing: CRISIL stock price is locked at 20 percent upper circuit after 6.33 lakh equity shares (representing 0.9 percent of total equity) exchanged hands on the National Stock Exchange at Rs 1851.05 per share.
Fuel Price in Kerala: Kerala Government says will reduce the prices of petrol & diesel by Re 1 per litre in state effective June 1.
Earnings Reaction: Hotel Leela Venture share price declined nearly 2 percent after the company reported net loss at Rs 15.8 crore for March quarter due to one-time loss of Rs 32.9 crore.
Profit in the year-ago quarter stood at Rs 52.1 crore, it said.
Revenue from operations during the quarter grew by 5.1 percent to Rs 206.4 crore compared to Rs 196.4 crore in corresponding period last fiscal.
Buzzing: Borosil Glass Works share price rallied 5 percent after March quarter profit shot up 66 percent year-on-year to Rs 14.8 crore and revenue grew by 16.3 percent to Rs 87.5 crore.
Earnings: Aban Offshore has increased its losses in the quarter ended March 2018 on the back of weak operating numbers.
The company has reported net loss of Rs 1,780 crore, which include an impairment loss of goodwill of Rs 1,003 crore.
It had posted net loss of Rs 332.6 crore in December 2017.
Revenue of the company was down 12 percent at Rs 328.4 crore against Rs 376 crore. EBITDA loss was at Rs 1,110 crore versus profit of Rs 113 crore.
Marke Update: The market remains under pressure amid political turmoil in euro zone's third-largest economy Italy. The cut in India's 2018 GDP growth forecast by Moody's also weighed.
HDFC, ICICI Bank, ITC, L&T and Infosys are pulling the market lower while the buying in HDFC Bank and Reliance Industries capped losses.
The rupee gains past 67.50 against the US dollar, up 37 paise on sustained bouts of dollar-selling from banks and exporters.
The 30-share BSE Sensex fell 97.22 points at 34,852.02 and the 50-share NSE Nifty slipped 32.10 points to 10,601.20.
Earnings: ?Alkem Laboratories' March quarter consolidated profit fell sharply by 51.6 percent year-on-year to Rs 66.3 crore, impacted by weak operational performance and tax expenses.
Profit in corresponding quarter of last fiscal stood at Rs 137 crore, the company said.
Consolidated revenue from operations increased 20.9 percent to Rs 1,513.2 crore compared to Rs 1,251.4 crore in March quarter 2017.
EBITDA (earnings before interest, tax, depreciation and amortisation) slipped 23.8 percent to Rs 113.7 crore and margin contracted 440 basis points to 7.5 percent compared to same period last fiscal.
GDP Forecast: The credit rating agency Moody's on Wednesday slashed India's GDP growth forecast for 2018 from 7.5 percent to 7.3 percent.
The government will announce GDP data for the quarter ended March on Thursday at 05:30 PM. The Economic Affairs Secretary Subhash Chandra Garg said on Monday it was expected that annual growth was between 7.3 and 7.5 percent in the March quarter.
India’s GDP grew by 7.2 percent in the third quarter which put helped the country to reclaim the tag of the fastest growing economy from China. China grew 6.8 percent in the quarter, the data showed.
AirAsia in focus: AirAsia Group Bhd shares plunged after federal police in India filed a case against the airline accusing it of corruption - a probe that threatens to delay its India unit's IPO plans and international expansion.
The case, also filed against Chief Executive Tony Fernandes and unit AirAsia India, is a fresh blow to the airline's embattled leader, who has been under fire for supporting Malaysia's former prime minister and is being investigated over the cancellation of flights during the general election period.
India's Central Bureau of Investigation (CBI) accused the airline, some of its employees and third parties of violating foreign direct investment rules while obtaining its licence to fly, and of bribing government officials in an attempt to get regulations relaxed to allow AirAsia India to fly international routes, reports Reuters.
Market Update: The past one hour has seen volatile moves on the market, with the Sensex trading over 100 points lower. The Nifty is trading below 10,600-mark. Selling pressure is visible in pharmaceutical names, dragged by losses in Glenmark, Aurobindo Pharma and Cipla, among others. Midcaps, meanwhile, are trading in the red, at par with benchmarks. M&M and Coal India are the top gainers, while ICICI Bank, Tata Motors and HPCL have lost the most.
Earnings: Marksans Pharma has reported profit in the quarter ended March 2018. The company's Q4 net profit was at Rs 4.3 crore against loss of Rs 2.4 crore in a year ago period.
Revenue of the company was up 61 percent at Rs 87 crore versus Rs 54 crore.
EBITDA or the operating profit was at Rs 10.7 crore and margin was up at 12.3 percent.
Market Update: Equity benchmarks have erased all of its losses and is currently trading flat. The Street could be keeping in mind positive trends in Dow Jones Futures, which is trading almost 100 points higher, following the sharp fall seen by the cash market there on Tuesday. European markets, meanwhile, were trading mixed amid a political crisis in Italy. Back home, the rupee has recovered around 40 paise from the day’s low points. Reliance Communications continued its uptrend from Tuesday as shares soared up to 15 percent intraday and is now up 11 percent. Investors continued to be betting on the company’s settlement plan for Reliance Infratel.
Results: Ganesh Benzoplast has reported massive 18-fold rise year-on-year in its March quarter profit at Rs 58.2 crore, backed by one-time gain and operational income.
Profit in corresponding period last fiscal was at Rs 3.2 crore.
The company said exceptional income of Rs 51.25 crore is on account of effect of write back as per the sanctioned DRS of the company.
Revenue from operations in Q4 grew by 53.1 percent to Rs 47.8 crore compared to Rs 31.2 crore in same period last fiscal.
Market Update: Benchmark indices recouped all morning losses, with the 30-share BSE Sensex rising 21.89 points to 34,971.13 and the 50-share NSE Nifty gaining 2.20 points at 10,635.50.
HDFC Bank, Bajaj Finance, M&M, Kotak Mahindra Bank, Yes Bank, Bajaj Finserv, Reliance Industries and SBI are top contributors to Nifty's gains.
ICICI Bank, ITC, HDFC and L&T are off the day's lows.
Results Reaction: Marksans Pharma share price gained 3 percent after the company posted profit at Rs 4.3 crore for March quarter against loss of Rs 2.4 crore in same period last year.
Revenue from operations grew by 61 percent to Rs 87 crore while EBITDA (earnings before interest, tax, depreciation and amortisation) jumped sharply to Rs 10.7 crore and margin expanded to 12.3 percent from 1.4 percent YoY.
Earnings: Pharma company Indoco Remedies has reported a 14.3 percent growth year-on-year in profit at Rs 20.5 crore for March quarter, driven by operational performance.
Profit in the year-ago period stood at Rs 17.9 crore.
Revenue from operations fell 2.5 percent year-on-year to Rs 259 crore while EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 82.6 percent to Rs 38.7 crore and margin expanded 690 basis points to 14.9 percent in Q4.
Market Update: Benchmark indices are off the day's low, tracking positive trade in Dow Jones futures which indicating rebound in US markets after yesterday's sharp fall.
The Nifty clawed back above 10,600 levels while the Sensex is down more than 50 points. Bank index also cut down losses to trade flat.
The rupee recovered further, rising 32 paise to 67.55 against the US dollar on sustained bouts of dollar-selling from banks and exporters.
Manpasand Beverages continues to be in lower circuit: Manpasand Beverages continued its sharp downfall for the third consecutive day as investors could have chosen to be cautious of its auditor’s abrupt exit ahead of Board meeting.
The company’s shares clocked 20 percent lower circuit for the past two days as its auditor, Deloitte India, quit during the weekend. Further, what fuelled the downfall is the firm cancelling its Board meeting, which was scheduled on May 30, 2018.
On Monday evening, the company issued a statement to the exchanges, assuring investors that the situation involving Deloitte was ‘unfortunate’ but the decision was taken keeping in mind shareholders’ interest.
“Everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation. The board meeting has been postponed and the new date will be announced shortly,” the company said in a filing to the exchanges. “This is just a minor hiccup and doesn't represent any long term business impact.”
Fortis in focus: The healthcare company informed exchanges that the board meeting scheduled today to consider and approve the audited financial results for the quarter and financial year ended March 31, 2018 stands deferred to June 11, 2018.
The same is as a result of ongoing deliberations of the conclusions arising from the internal investigation, it said.
Rupee Update: The rupee recovered from its initial losses to trade higher by 29 paise at 67.58 against the greenback afternoon following sustained bouts of dollar-selling from banks and exporters despite lower equities.
Sebi seeks info from Jet Airways following complaint: Markets regulator Sebi has sought information from Jet Airways following a complaint of alleged fraudulent practices.
In a filing to the stock exchanges, the airline said last month the regulator sought views of the statutory auditors and the audit committee on certain allegations.
However, the carrier did not elaborate on the complaint.
The disclosure came in response to a clarification sought by the BSE on reports about alleged fraudulent practices by Jet Airways promoter Naresh Goyal and fall in its share prices.
Referring to the reports, the airline said similar allegations had earlier been communicated to it by Sebi in June 2016, based on a complaint received by the regulator, reports PTI.
Earnings Reaction: Shares of Bharat Heavy Electricals (BHEL) gained nearly 2 percent intraday as company has reported more than double growth in March quarter profit at Rs 457.2 crore, driven by strong operational income.
Profit in the same quarter last fiscal stood at Rs 215.5 crore, the company said in its filing.
Revenue from operations during the quarter grew by 3.7 percent to Rs 10,144 crore compared to Rs 9,779.5 crore in corresponding period last year.
BHEL said the outstanding orderbook stood at Rs 1.18 lakh crore at the end of March 2018, the highest in last five years.
The state-run company has booked orders worth Rs 40,932 crore in FY18, which grew by 74 percent compared to FY17,
Market Update: The market continued to trade lower on worries over Eurozone break-up risk due to political turmoil in Italy.
Mahindra & Mahindra gained 2 percent as global brokerage firm Credit Suisse maintains Outperform rating on the stock with increased target price to Rs 1,030 from Rs 970.
The 30-share BSE Sensex declined 142.34 points to 34,806.90 and the 50-share NSE Nifty slipped 48.70 points to 10,584.60. About six shares declined for every five share rising on the BSE.
All sectoral indices are in the red, falling up to 0.8 percent.
DBS Macro Strategy: Early week's respite to the Indian 10-year bond yields is unlikely to sustain as global risk aversion resurfaces and markets factor in political troubles in the Eurozone. This is likely to overshadow the relief from lower Brent prices, early monsoon onset and sharp decline in USTs (safe haven flows). Indian short-term rates are also elevated due to the ongoing domestic liquidity squeeze, notwithstanding a steady policy rate.
In all, India’s yield curve is likely to stay underpinned by domestic and exogenous drivers - 10-year yields are likely to inch towards the year's high of 7.9% before 8 percent, not helped by weak appetite for bonds from the dominant player – public sector banks, just as FPIs trim their holdings. 2Ys have surged from below 7% last month to nearly 7.6% in May (generic quote), with 7.7% marking our next target. On the supply end, Rs 15,000 crore T-bills will be auctioned today, and Rs 12,000 crore bonds on Friday.
Acquisition: Infosys has completed the acquisition of Wongdoody, a US-based, full-service creative and consumer insights agency.
Wongdoody, an award-winning creative agency with studios in Seattle and Los Angeles, brings to Infosys globally recognized creative talent and deep marketing and brand engagement expertise.
Through this acquisition, Infosys enhances its digital experience services ecosystem with services ranging from strategy, design and user experience, to creative and digital marketing across the customer experience value chain.
Infosys has concluded the acquisition for a consideration up to $75,040,000 including conditional deferred consideration and employee retention amounts.
Earnings Reaction: Battery manufacturer Eveready Industries India share price hit fresh 52-week low of Rs 225, falling more than 12 percent intraday on Wednesday after the company posted loss of Rs 16 crore for the quarter ended March 2018.
Profit in the corresponding period of last fiscal stood at Rs 10.4 crore.
Revenue from operations during the quarter grew by 15 percent year-on-year to Rs 350 crore, but at operational front, it posted EBITDA loss of Rs 3.88 crore in Q4FY18 against profit of Rs 17.6 crore in same period last fiscal.
Higher employee cost (up 18 percent YoY and advertising expenses (up 66 percent) hit profitability. Gross margin dipped by 200 basis points YoY during the quarter.
Market Update: The market remained under pressure, tracking correction in global peers on worries over Eurozone break-up risk due to political turmoil in Italy.
The 30-share BSE Sensex fell 161.53 points to 34,787.71 and the 50-share NSE Nifty declined 56.20 points to 10,577.10 while all sectoral indices are in the red.
CLARIFICATION: Prices of petrol and diesel have been cut by 1 paise and not 59 paise as mentioned earlier. Indian Oil (IOC) had published the wrong prices of the commodity earlier today.
Buzzing: Shares of Bharat Heavy Electricals gained nearly 2 percent as company has reported more than double growth in March quarter profit at Rs 457.2 crore, driven by strong operational income.
Profit in the same quarter last fiscal stood at Rs 215.5 crore, the company said in its filing.
Revenue from operations during the quarter grew by 3.7 percent to Rs 10,144 crore compared to Rs 9,779.5 crore in corresponding period last year
Market Update: Benchmark indices remained under pressure, with the Sensex falling 115.22 points to 34,834.02 and the Nifty declining 44.70 points to 10,588.60.
Earnings Reaction: Coal India’s shares gained over 3.5 percent. Investors reacted to the results for March quarter posted by the firm, which included a one-time gratuity payout.
Brokerage house Nomura has maintained its neutral call on the stock with a target of Rs 332 apiece. It observed that the company had a strong March quarter as price hikes in January materialized. Its realisation on fuel supply agreement front surprised and has driven the sizeable earnings beat. In fact, the revenue was 9 percent above consensus estimates.
Meanwhile, Jefferies has also maintained its buy call on the stock with a target of Rs 350 per share. It said that the operating profit, ex-gratuity provision) was up 124 percent year on year and 22 percent ahead of estimates.
The company reported a fall of over 52 percent in the net profit for March quarter at Rs 1,295 crore. The company had posted a profit of Rs 2,919 crore for the corresponding quarter of last year. Its revenues fell 16 percent at Rs 26,909 crore against Rs 23,243 crore year on year.
A steep increase in its gratuity payout/employee benefit expenses at Rs 16,654 crore dragged its results. Other income and expenses reported by the firm were at Rs 2,000 crore and Rs 1,261 crore, respectively.
Earnings Reaction: Shares of Glenmark Pharma touched 52-week low of Rs 483.60, falling 9 percent intraday on the back of poor fourth quarter numbers.
The company has reported 17.5 percent fall in its Q4 net profit at Rs 151.6 crore against Rs 183.7 crore in the same quarter last fiscal.
Revenue of the company was down 7 percent at Rs 2,279.8 crore against Rs 2,457.7 crore
The operating profit or EBITDA of the company was down 26 percent at Rs 326.8 crore and margin was at 14.3 percent.
US market will continue to remain a challenging environment for next 4 quarters, company said.
Glenn Saldanha, Chairman & MD, Glenmark Pharmaceuticals said, “While FY 2018 was a challenging year mainly on account of pricing pressure in the US, our other key markets like Europe and India performed well on the back of new product launches.”
“Even though we expect pricing pressure to persist, we are glad that FY 2019 has started on a positive note for us with approval s for some interesting products in the US,” he added.
Buzzing: Granules India share price declined over a percent after the promoter created pledge on 5.5 percent equity on May 28.
Market Update: The market extended previous day's losses with the Sensex falling more than 150 points following correction in global peers on political turmoil in Italy.
The Nifty50 has broken 10,600 levels while all sectoral indices are in the red barring IT.
Banking & financials pulled the market lower as Nifty Bank and Financial Services indices lost nearly a percent.
Oil retailers IOC, HPCL and BPCL fell up to 3 percent after cut in fuel prices.
M&M, Coal India and Power Grid gained 2 percent each following March quarter earnings.
The 30-share BSE Sensex declined 171.66 points to 34,777.58 and the 50-share NSE Nifty slipped 62.10 points to 10,571.20. shares have advanced, 895 shares declined, and 86 shares are unchanged.
Buzzing: Mahindra and Mahindra share price rallied 2.5 percent after Credit Suisse has maintained Outperform rating on the stock with increased target price at Rs 1,030 (from Rs 970) following better-than-expected earnings for March quarter.
Auto profitability continued to improve in Q4, and 15 percent beat on EBITDA was helped by operating leverage, product-mix & cost-control, it said.
The research house further said tractor outlook is promising, given positive factors like monsoons, government spend on infra/rural & financial availability.
Auto segment profitability could have been better but for Ssangyong losses, it feels. It sees scope for improvement in non-India farm business over medium term.
Credit Suisse raised FY19 tractor volumes & adjust auto volumes, leading to 1-4 percent rise in FY19-20 EPS. The stock traded at attractive valuation of less than 13x core FY20 EPS.
Earnings Reaction: Road construction company Dilip Buildcon share price fell 3 percent after contraction in operating margin for March quarter.
Net profit in Q4 grew by 11 percent year-on-year to Rs 217.4 crore and revenue from operations increased 46.1 percent to Rs 2,557.9 crore.
EBITDA (earnings before interest, tax, depreciation and amortisation) shot up 33.2 percent to Rs 472.6 crore, but margin fell 180 basis points to 18.5 percent compared to year-ago.
Dilip Buildcon posted one-time loss at Rs 15.2 crore and reported deferred tax expenses for the quarter at Rs 45.6 crore against write-back of Rs 0.7 crore.
Market Opening: Benchmark indices extended yesterday's losses on Wednesday, tracking weakness in global stocks on political turmoil in Italy.
The 30-share BSE Sensex dropped 151.57 points to 34,797.67 and the 50-share NSE Nifty slid 63.30 points to 10,570.
Vedanta, Tata Motors, SBI, ICICI Bank, Bharti Airtel, Axis Bank and Grasim Industries fell up to 2.5 percent.
M&M, BPCL and Infosys are gainers in opening.
Nifty Midcap lost 156 points. Nifty Bank declined 237 points.
Dilip Buildcon, Glenmark Pharma, BEL, Eveready Industries, Vakrangee, Jain Irrigation, Canara Bank, Allahabad Bank and LIC Housing Finance slipped up to 6 percent.
Greenply Industries, Reliance Communications, Dish TV and Power Grid are gainers.
Market Outlook: ICICI Securities said
Equity benchmarks snapped their three-day winning streak and settled marginally lower weighed down by subdued global cues. The Nifty settled at 10,633, down 55 points or 0.5 percent. Broader markets behaved in line with benchmarks as the Nifty midcap and small cap lost 0.3 percent, each.
The price action formed a sizable bear candle encompassing the previous session’s real body and filled Monday’s positive gap, indicating a pause in momentum post the 300-point rally (seen over last three sessions). Going ahead, we expect the Nifty to take a breather amid positive price structure and gradually head towards 10,850 in coming weeks.
In the coming session, the market is likely to open negative, tracking weak global cues. However, we believe it would hold the key support zone of 10,500 as it is the confluence of 61.8% retracement of last leg of up move (10,418–10717) at 10,530 and placement of upward sloping trend line (adjoining 9,952 – 10,418) around 10,500. Thus, we believe any dip towards 10,500 should be used as an incremental buying opportunity in quality stocks. Failure to hold 10,500 would lead to prolonging of ongoing consolidation towards 10,400.
Market Outlook: Stewart & Mackertich said
Taking global cues, Nifty is expected to open gap-down around 10,560 and likely to remain weak as long as it trades below 10,600. Next support is placed around 10,500.
The Nifty previous session ended 0.52% down at 10,633.30. It opened flat and touched the intraday high of 10717 before breaking down early morning low amid weak global cues. It failed to sustain above 10,700 for the second consecutive session towards ending the session with a bearish Marubzu candle nearer to day’s low 10616.10. Selling intensity may take the Benchmark Index below 30 EMA on daily chart placed around 10,600 and may test downside supports placed around 10,560 and 10,500.
On the Nifty hourly chart; breaking down 200 EMA placed around 10,605 may initiate further correction towards 10,560 and 10,500. In case of intraday pullback, 10,600 will act as the critical resistance.
Nifty patterns on multiple time frames show; it failed to sustain above the critical support placed around 10,700 for the second consecutive session and ended nearer to 30 daily EMA. Breaking down 30 daily EMA may leave the Nifty ending in deadlock for a few sessions. Hence, cautious trading is advised.
Market Pre-Opening: Benchmark indices are flat in pre-opening, which indicated that the market already priced in global weakness in previous session.
The 30-share BSE Sensex dipped 33.06 points to 34,916.18 and the 50-share NSE Nifty gained 1.20 points at 10,632.10.
Glenmark Pharma slipped 10 percent.
Wockhardt and Lupin fell 4 percent.
M&M gained 1.66 percent and Eveready Industries rose half a percent.
Crude Update: Oil prices were lower on worries that Saudi Arabia and Russia will pump more crude weighing on the market.
Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by 1 million barrels per day (bpd) to counter potential supply shortfalls from Venezuela and Iran.
Brent crude was down 0.62 percent at $74.92 a barrel.
US West Texas Intermediate crude was down 0.36 percent at $66.49 a barrel, reports CNBC.
Market Cues: The Nifty50 is expected to open gap down on Wednesday following muted trend seen in other Asian markets. The index closed 55 points lower at 10,633 on Monday.
Trends on SGX Nifty indicate a negative opening for the broader index in India, a fall of 71 points. Nifty futures were trading around 10,538-level on the Singaporean Stock Exchange.
The S&P 500 and the Dow Jones Industrial Average registered their biggest one-day percentage drops in a month on Tuesday as political turmoil in Italy sparked concerns about the stability of the euro zone and shares of US banks tumbled, said a Reuters report.
Asian shares extended a global sell-off. Japan's Nikkei, China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's Kospi are down 1.5-2 percent.
Market Outlook: Hemang Jani, Head - Advisory, Sharekhan feels that the fluctuating rupee, oil prices and Bond yields could keep equity markets volatile.
However he maintains bullish view on the markets and feels there are select buying opportunities in auto, private banking and consumer durables. "We like stocks such as Max Financials, ONGC and UPL, which are backed by strong earnings potential going ahead."