Sensex loses 115 points, Nifty ends below 10,750; ITC, L&T shares drag

21 Jun 2018

Global Update: Asian markets closed mixed as investors monitor trade developments between world's largest economies US and China. China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's Kospi closed down over a percent while Japan's Nikkei gained 0.6 percent and Australia's ASX 200 rose 1 percent.

European stocks were lower ahead of OPEC meeting and ECB rate decision. Germany's DAX was down 1 percent and France's CAC down half a percent at the time of writing this article.

Oil prices corrected sharply ahead of likely increase in crude output in the OPEC meeting. Brent crude futures, the international benchmark for oil prices, were down 1.65 percent at $73.51 a barrel.

Market Closing: Benchmark indices ended lower after consolidation, as investors monitor trade developments between US and China. The OPEC decision will also be closely watched.

The Sensex fell 114.94 points to 35,432.39 and the Nifty shed 30.90 points to 10,741.10. More than two shares declined for every share rising on the BSE.

IOC, HPCL and BPCL gained 3-4 percent on correction in crude oil prices.

ICICI Bank and Reliance Industries gained more than a percent while HDFC Bank rose half a percent.

SBI, L&T, ITC, Maruti, M&M, Dr Reddy's Labs and Axis Bank were under pressure.

Nifty Midcap index fell over 100 points.

Balrampur Chini, Dhampur Sugar, Union Bank, Indian Bank, PNB, Avanti Feeds, Strides Shasun, NCC, Just Dial, Indiabulls Real Estate, Adani Power, IDBI Bank, Equitas Holdings, Bata and Escorts slipped up to 7 percent.

VIP Industries, InterGlobe Aviation, Firstsource and Mphasis gained up to 5 percent.

Coal India commences Tranche IV of auction of coal linkages for non-regulated sector.

15:12 hrs Coal India was quoting at Rs 267.70, down Rs 2.90, or 1.07 percent.

The share touched its 52-week high Rs 316.55 and 52-week low Rs 234.00 on 27 February, 2018 and 11 August, 2017, respectively. Currently, it is trading 15.43 percent below its 52-week high and 14.4 percent above its 52-week low.

Market Update: The market is under pressure amid consolidation as investors monitor trade developments between US and China, and also await OPEC meeting decision.

The 30-share BSE Sensex fell 119.35 points to 35,427.98 and the 50-share NSE Nifty slipped 42.30 points to 10,729.70. About two shares declined for every share rising on the BSE.

The Nifty Midcap index dropped more than half a percent. Brent crude futures fell nearly 2 percent on likely increase in output.

Cipla get USFDA nod: Cipla has received final nod from the US health regulator for generic Testosterone Cypionate injection used for replacement therapy in males for deficiency or absence of endogenous testosterone.

The company has received final approval for its abbreviated new drug application (ANDA) for Testosterone Cypionate injection in the strengths of 100mg/ml and 200mg/ml from the US Food and Drug Administration (USFDA), Cipla said in a filing to BSE.

The product is generic version of Pharmacia and Upjohn's Depo-Testosterone injection, it added.

Crude Update: Oil prices dipped as Iran signaled it could be won over to a small rise in OPEC crude output, likely paving the road for the producer cartel to agree on a supply increase during a meeting on June 22.

However, prices were prevented from falling further by record refinery runs in the United States and a large decline in US crude inventories, a sign of strong fuel demand in the world's biggest economy.

Brent crude futures, the international benchmark for oil prices, were at $73.67 per barrel, down 1.43 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $65.04 a barrel, down 1.02 percent.

Iran, a major supplier within the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), signaled on Wednesday it could agree on a small increase in the group's output during a meeting at OPEC's headquarters in Vienna on June 22, reports Reuters.

Europe Update: European markets were mixed against a backdrop of growing tensions in the oil market ahead of an OPEC meeting that could expand crude production.

Britain's FTSE gained third of a percent whereas Germany's DAX fell 0.3 percent and France's CAC slipped 0.1 percent.

Market Update: The rangebound trade continued at Dalal Street after recent sharp up and down in the market caused by elevated trade tensions between world's largest economies US and China.

Midcap index underperformed frontliners, falling third of a percent whlie PSU Bank index remains lower by a percent.

Reliance Industries continued to trade near its record high, which is up over a percent while ICICI Bank extended gains to nearly 2 percent on reports of likely appointment of new chairman.

The 30-share BSE Sensex rose 32.29 points to 35,579.62 and the 50-share NSE Nifty gained 4 points at 10,776. The market breadth remained in favour of bears as about two shares declined for every share rising on the BSE.

RITES IPO: The public issue of RITES was fully subscribed on the second day its initial public offering (IPO) on Thursday.

The issue received bids for 2.75 crore shares against the issue size of 2.52 crore shares, as of 12:45 PM on June 21, 2018. The total issue was subscribed 1.09 times.

On the first day of issue, June 20, the IPO had received bids for 1.5 crore shares against the total issue size of 2.52 shares, data available with the NSE till 5 pm showed.

The segment meant for qualified institutional buyers (QIBs) has subscribed 0.0242 times, non-institutional investors 0.30 times and retail investors 3.23 times.

Market Veteran Rakesh Jhunjhunwala on Pharma space:

"I am pretty sure that worst is behind for pharma sector as generic competition in the US is leveling off," Jhunjhunwala said.

He is positive on the domestic branded pharma businesses. "Indian pharma industry is entering unknown, but exciting space."

Healthcare majors Sun Pharma & Lupin entered into speciality generics, the next leg of growth.

Buzzing: Shares of Bank of Maharashtra continued to fall for the second straight session today, dropping over 7 percent intraday to hit a 52-week low, following the arrest of its serving and a former CMD in a cheating case.

The Economic Offences Wing of Pune police yesterday arrested six people, including the serving and a former CMD of Bank of Maharashtra in a cheating case lodged against real estate developer D S Kulkarni and his wife, an official said.

The bank's present Chairman and Managing Director Ravindra Marathe, Executive Director Rajendra Gupta, Zonal Manager Nityanand Deshpande, and bank's former CMD Sushil Muhnot, were arrested yesterday.

Meanwhile in a statement, Bank of Maharashtra said its exposure to D S Kulkarni Developers was around Rs 94.52 crore, which was fully secured, reports PTI.

"Our total outstanding exposure to DS Kulkarni Developers is to the tune of Rs 94.52 crore which is fully secured with primary and collateral securities," it said.

KNR in focus: In a clarification note to the exchanges regarding "Promoters of Company taking large interest free loan from the Company", KNR Constructions said the promoters have extended unsecured loan of Rs 214.08 crore to the company, at the interest rate of 8.45 percent per annum to defray the term loan of one of the SPV. "There are no loans and advances given by the Company to promoters."

Market Veteran Rakesh Jhunjhunwala views on banking: He feels there is unprecedented growth opportunity in the banking sector. "Once provisioning normalises for banks, earnings & multiples will expand. Banks with legacy problems will show strong growth," he said.

He is extremely bullish on troubled banks. "ICICI Bank carries characteristics of HDFC Bank in terms of CASA. For ICICI Bank, FY19 will see repair & FY20 will be a year of clean growth."

Return on assets and return on equity of private banks with legacy problems will improve in FY19 & FY20, he feels.

Jhunjhunwala said NCLT (National Company Law Tribunal) & IBC (Insolvency & Bankruptcy Code) will inculcate a sense of credit discipline. "People are underestimating long-term benefits of IBC & NCLT."

Buzzing: Shares of Manpasand Beverages rose 4 percent intraday ahead of board meeting to consider audited financial results for quarter ended March 2018.

The meeting of board of directors of the company is scheduled to be held on June 27, to consider and approve audited financial results along with audited report for the fourth quarter and year ended on March 31, 2018.

The board will also consider and recommend dividend, if any, on equity shares of the company for the FY2017-18, subject to approval of members of the company.

Market Outlook: Market Veteran Rakesh Jhunjhunwala told CNBC-TV18 that 2018 will be the year of consolidation after stellar gains in 2017.

Market has had a tremendous run since August 2013 and the current correction is post that big rally, he said.

He feels the flow of local money in the market is just beginning. "Influence of local flows will far outweigh foreign flows that are restricted to just individual companies."

He said it is too early to predict the outcome of the general elections 2019 but he believes BJP will form the government in 2019 despite uncertainty. "I don't think political uncertainty will take market lower beyond a point."

Lakshmi Vilas Bank board meet on June 26: A meeting of board of directors of the Lakshmi Vilas Bank is scheduled to be held on June 26, 2018. The board will consider the fund raising by issue of bonds / debentures / or other debt securities of the bank on private placement basis.

Market Update: The market remained rangebound as investors monitor developments over trade tariffs between the world's largest economies US and China.

Index heavyweights Reliance Industries, Infosys, ICICI Bank and HDFC continued to support the market while FMCG and select banks stocks are under pressure

The sectoral trend remained mixed with the PSU Bank index falling over a percent.

Market Outlook by Manish Hathiramani, proprietary trader & technical analyst at manishhathiramani.com

The Nifty continues to remain in a range - the broader range for the overall direction of the markets is about 350 points. The support is at 10,550 and the resistance is at 10,900. We are vacillating within this range since the beginning of this month.

From a trading perspective the trimmed version of this range would be 10,700 - 10,850, a 150 points. This is usually not really a task for the index. However, these are testing times and a trader must be cautious on these levels being respected.

The good news however is that a one sided move would be expected if either levels are crossed which would then promise a delightful trade.

India signs MOUs for early adoption of 5G: India signed three memoranda of understanding with three top UK academic institutions to facilitate meaningful exploration and early adoption of 5G technology.

The MOUs were signed between representatives of King's College, University of Surrey, University of Bristol and Vipin Tyagi, Executive Director of C-DOT, a government-owned body engaged in research and development in the field of telecommunications in India.

The agreements were signed at the India House in presence of India's minister of state for communications Manoj Sinha and High Commissioner to the UK Y K Sinha.

SEBI Board Meet Agenda: The Securities and Exchange Board of India (SEBI) is likely to discuss proposed overhaul of governance norms for market infrastructure institutions as well as amendments to buyback and takeover norms tomorrow, a senior official said.

Other proposals, including reducing the cooling off period for former employees to one year and review of the watchdog's recruitment policy, are also on the agenda.

SEBI board will meet today in Mumbai where the proposal for overhauling regulations for ownership and governance of market infrastructure institutions (MIIs), including capping the tenure of chief executives of stock exchanges, are expected to be discussed, the official said.

The watchdog has been working on ways to deepen the capital market as well as attract more investors.

Market Update: The market continued to consolidate amid rising fears of a global trade war started by the world's largest two economies US and China.

The Nifty Midcap index underperformed frontliners, falling mildly while the sectoral trend remained mixed.

The 30-share BSE Sensex rose 23.19 points to 35,570.52 and the 50-share NSE Nifty gained 4.20 points at 10,776.20.

The market breadth is in favour of declines as about 1,069 shares slipped against 823 advancing shares on the BSE.

Import Duty: India has increased import duties on some agricultural and steel products that are imported from the US in retaliation against Washington's new global tariffs on steel and aluminium, according to a government note seen on Thursday.

Last month, India had given a list of products to the WTO that it said could incur higher tariffs, reports Reuters.

Rupee Update: The rupee slipped 12 paise to 68.20 against the US dollar due to fresh buying of the American currency by importers amid sustained foreign fund outflows.

Forex dealers said the dollar hovering near an 11-month high against a basket of currencies overseas, supported by a rise in US yields, also weighed on the rupee but a higher opening of the domestic equity markets limited the fall.

Foreign portfolio investors (FPIs) sold shares worth Rs 2,442.61 crore yesterday, as per provisional data issued by stock exchanges.

Yesterday, the local currency had staged a good comeback to end with a sharp gain of 30 paise at 68.08 against the US currency on heavy bouts of dollar selling by banks and exporters with equities gaining ground, reports PTI.

Technical Outlook by Dharmesh Shah of ICICIDirect.

The lack of faster retracement on either side makes us believe that Nifty would extend ongoing consolidation in the range of 10,930-10,650 over the next couple of weeks.

We believe that this consolidation would form a higher base which would set the stage for testing the upper band of the current consolidation levels placed around 10,930.

Structurally, Nifty midcap and small cap have approached their key value area, as both have filled the positive gap (recorded on 7th June) and retraced 61.8 percent of their respective recent up move along with oversold placement of stochastic indicator.

Thus, we believe the Nifty midcap and small cap are approaching their key value area being the placement of Hammer candle (witnessed on early June), signifying limited downside.

Thus investors should focus on accumulating quality beaten down stocks in a staggered manner.

Market Update: The market is off its opening highs following mixed trade in Asian peers amid elevated trade tensions between the US and China.

The sectoral indices are also mixed in trade while the Nifty Midcap is trading flat.

ICICI Bank gained a percent after a media report indicated that the bank may appoint former Bank of Baroda CMD MD Mallya as a sucessor to the current ICICI Bank Chairman MK Sharma when his term ends on June 30.

Brokerage Call: Credit Suisse has maintained a neutral call on L&T Finance with a target of Rs 200 on the back of heightened provisioning requirements.

The global research firm said that the withdrawal of February 18 circular by the Reserve bank of India has resulted in faster recognition of NPAs.

It also said that while the management is targeting 60 percent provisioning cover, but the requirement could be higher as well. Going forward, the provisioning requirement for wholesale sector will be a drag. Adding to the impact would be a transition to Ind-AS accounting system as well.

Further, the pain points are the fact that nearly half of the firm’s pre-2012 stressed book of under construction power projects.

Buzzing: ?Shares of InterGlobe Aviation gained around 6 percent in the morning trade as a relief rally was seen on the stock post the management’s clarification.

The company, in a filing to the exchanges, clarified that the management did not receive any summons from the Enforcement Directorate with respect to the FEMA violation case.

Its shares had fallen 8 percent to close at Rs 1,136.15 on Wednesday as investors turned cautious of summons by investigating agencies to its top management.

Source had told CNBC-TV18, the Enforcement Directorate has summoned the top management of the carrier in a case related to violations related to foreign exchange management act (FEMA).

Market Opening: Benchmark indices started off the day on a positive note Thursday, tracking positive Asian cues.

The 30-share BSE Sensex rose 92.13 points to 35,639.46 and the 50-share NSE Nifty gained 25.70 points at 10,797.70.

ICICI Bank gained 1 percent.

Nifty Midcap index rose 45 points.

InterGlobe Aviation, Adani Transmission, Adani Ports, Arvind, PFC, Havells, Jubilant Foodworks, NIIT Tech, PTC India Financial, CG Power, Delta Corp, Gruh Finance and Cummins India gained 1-3 percent.

Bank of Maharashtra, Opto Circuits, Ruchi Soya, Jindal Saw, Welspun Corp and Strides Shasun are under pressure.

Rupee Update: The Indian rupee opened lower by 12 paise at 68.19 per dollar today against previous close of 68.07.

Near-month dollar-rupee June contract on the NSE was at 68.13 in the previous session. June contract open interest declined 3.35% in the previous day, said ICICIdirect.

We expect the USD-INR to meet supply pressure at higher levels. Utilise upsides in the pair to initiate short positions, it added.

Stocks in News:

State Bank of India’s Managing Director B Sriram given additional charge of MD and CEO of IDBI Bank for three months.

International Finance Corporation to invest Rs 200 crore in Mahindra Lifespace Developers’ Jaipur Project.

InterGlobe Aviation clarified that it has not received summons from the Enforcement Directorate for FEMA violation.

Majesco selected by Singapore insurance company for distributing solutions.

Bayer-Monsanto takeover approved by Competition Commission of India.

Gayatri Projects’ EPC order worth Rs 1,111 crore cancelled by Uttar Pradesh government.

Adani Transmissions acquired 100 percent stake of REC subsidiary for Rs 17.93 crore.

Prabhat Telecom announced bonus issue at 1:5. Record date at June 29.

Axiscades Engineering Technologies signed joint venture pact with Assystem in energy and other sectors.

Market Pre-Opening: Benchmark indices were higher in pre-opening trade, tracking recovery in Asian peers from subdued trade.