Nifty snaps 3-day fall, Sensex gains 196 points; Midcap, Smallcap indices outshine
01 Mar 2019
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Market Closing
The market snapped its three-day losing streak and closed half a percent higher, but the broader markets staged smart show on strong breadth.
The 30-share BSE Sensex rallied 196.37 points to 36,063.81 and the Nifty50 gained 71 points at 10,863.50.
About three shares advanced for every share falling on the BSE.
IndusInd Bank, ICICI Bank, HDFC, L&T and Infosys were leading contributors while Bharti Airtel, Axis Bank, UPL and Bajaj Auto were under pressure.
Among broader space, TVS Motor Company, Jet Airways, NALCO, Union Bank, Vijaya Bank, SAIL, RCF, Wockhardt, Dish TV, Meghmani Organics and OBC rallied 4-11 percent.
Marico, Motherson Sumi and Havells India were under pressure.
Monthly Technical Outlook by ICICI Securities
Nifty Midcap index has bounced from long term 200 weeks EMA which was held on multiple occasions off 2008. Since its inception in 2004, corrective cycles in Nifty Mid cap and Small cap indices have not lasted for more than 14 months, which makes us believe both indices have approached maturity of price-wise and time-wise correction
Going ahead, we expect Nifty resolve out of upper band of consolidation (10,900), unfolding next leg of up move towards 11,400 in coming months. Meanwhile volatility would remain high in the run up to election, which should be capitalized as an incremental buying opportunity in the range of 10,750-10,600. In the process, we expect Banking, consumption and metals to outperform.
However, despite host of negative news, index managed to form a sequential trough (10,585), indicating buying demand at elevated support levels underpinned by improving market breadth, in turn signifying market resilience.
Mindtree Stake Sale
Private equity firm Baring and infrastructure major L&T are said to lead bidding for major stake in Mindtree, the IT company, reports CNBC-TV18 quoting Agencies.
Bidders are said to offer upto Rs 1,000 per shares.
Earnings
ABB India has reported profit at Rs 128.64 crore for the quarter ended December 2018, registering a 58 percent growth compared to Rs 81.63 crore in same period last year.
Revenue during the quarter grew by 15 percent to Rs 1,966.3 crore, compared to Rs 1,709 crore in corresponding period last fiscal.
At operating level, EBITDA (earnings before interest, tax, depreciation and amortisation) shot up 48 percent to Rs 215.4 crore and margin expanded by 250 bps to 11 percent
CIMB Upgrades Yes Bank:
CIMB has upgraded Yes Bank to add and also raised price target to Rs 300 (from Rs 230 earlier) as concerns abated on asset quality and the top management of the bank.
These were the biggest overhangs on the stock.
The global research house said the nil divergence report of RBI and appointment of MD & CEO will result in a rerating of the stock as valuations remain attractive at 1.5x FY20F P/BV.
The fundamentals of the bank remain strong with robust loan growth, stable NIMs and asset quality, it added.
Market Off Day's High:
Benchmark indices were off their day's high in afternoon with the Sensex hovering around 36,000 levels.
Infosys, SBI, Adani Ports, L&T, HDFC, IndusInd Bank, ICICI Bank and Yes Bank were positive contributors while Reliance Industries, Axis Bank, Bharti Airtel, Asian Paints, Titan Company and Cipla were under pressure.
The 30-share BSE Sensex gained 119.95 points at 35,987.39 and the Nifty50 rose 41.20 points to 10,833.70.
The broader markets remained strong with the Nifty Midcap index rising over a percent and Smallcap index climbing 2 percent amid strong breadth.
February Auto Sales
Mahindra & Mahindra said its auto sales for February 2019 at 56,005 vehicles increased 10 percent, compared to 51,127 units sold during February 2018.
Domestic sales grew by 9 percent year-on-year to 52,915 vehicles in month gone by.
The passenger vehicles segment (which includes UVs, Cars and Vans) registered a 17 percent YoY growth at 26,109 vehicles and commercial vehicles segment showed a marginal growth at 21,154 vehicles against 20,946 vehicles in February 2018.
NCL Industries on Buyers' Radar:
Company said installation of the readymade doors plant set up at Malkapur (V) near Hyderabad with a capacity to produce 1000 doors per day in technical collaboration with AGT (Turkey) has been successfully completed.
"We are scheduled to inaugurate the plant on March 13, 2019," it added.
Shriram Transport Finance Company said it is considering raising of funds through various options of borrowings including by way of issue of securities in onshore/offshore market by public issue and private placement basis.
Based on the market conditions the meeting(s) of Banking and Finance Committee/Debt Issuance Committee - Public NCDs / Bond Issuance Committee will be held during the month ending March 31, 2019 to consider and approve the terms and conditions of issue of securities.
Welspun Enterprises Climbs 11%
Welspun Enterprises is an asset recycling infrastructure model, offering investors a margin of safety and growth opportunity at an attractive valuation, Antique Stock Broking said.
Unlike other companies in the road sector, where burgeoning order backlog and new project bids could possibly stretch balance sheets, WEL is a company that has developed assets, even beyond roads, sold them, and bid for new projects. And it has all happened with adequate cushion of cash in hand, it added.
Even better, WEL has an Rs 5,750 crore order backlog in hand. Further, between FY18 and FY21, the company can deliver a revenue/EBITDA/net profit growth of 59 /90 /48 percent CAGR respectively, said Antique which has initiated coverage with a buy.
Rollover in Nifty
Rollover in Nifty futures declined at 60 percent (last month 62 percent), below 6-month average of 71 percent, Aditya Birla Capital said.
Nifty was down 0.36 percent in February.
On other hand, market wide rollover stood at 86 percent (last month was 87 percent).
February Manufacturing PMI:
India's manufacturing activity expanded at the fastest pace in more than a year in February, as new orders and output grew solidly in a boost to employment, a private survey showed on Friday.
The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, increased to a 14-month high of 54.3 in February from January's 53.9, confounding a Reuters poll predicting a dip to 53.5.
The index has now been above the 50-mark threshold separating growth from contraction for 19 months. (Source: Reuters)
Yes Bank's New CEO & MD:
Yes Bank said Ravneet Gill has joined as bank's MD & CEO today.
His tenure as approved by RBI is 3 years from the date of his joining, i.e. March 1, 2019 to February 28, 2022.
"The appointment of Mr. Gill will be subject to approval of shareholders' at the ensuing Annual General Meeting of the Bank to be held in the month of June, 2019 on the terms and conditions including remuneration as approved by the Reserve Bank of India," the bank said.
Hence, Ajai Kumar ceased to be an interim MD & CEO of the bank.
Market Update:
Benchmark indices continued to trade higher with the Sensex rising 190.82 points to 36,058.26 and the Nifty climbing 56.40 points to 10,848.90.
The market breadth remained in favour of bulls. More than four shares advanced for every share falling on the BSE.
Management Interview
Rakesh Sharma, ED at Bajaj Auto told CNBC-TV18 that the product mix has altered favourably during the month.
"January & February saw 45 percent revenue contribution from premium motorcycles. We are focussing on expanding the premium motorcycle category," he said in an interview.
He believes April-May will see a better exchange realisation.
"Margin will be impacted positively if premium portfolio expands and will be aided by positive forex impact April onwards," he said, adding quantum of discounts have come down.
Reaction on GDP Data
GDP data showed that GDP growth has been on a declining trend in FY19 with Q3 GDP growth dipping to 6.6 percent. Based on the second advance estimate of 7.0 percent in FY19, GDP growth in Q4 is further expected to ease to 6.5 percent.
?Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI said growth in Agri GVA deflator is projected to turn positive in Q4, even as real Agri GVA is slated to degrow. This clearly indicates the stress in the farm sector is far from over.
Also, NPA in Agri sector remains elevated reflecting the spate of loan waivers in several states having a detrimental impact on credit culture, he added.
Bajaj Auto Sales Data:
Bajaj Auto showed strong growth in February sales, driven by exports.
The company sold 3.93 lakh units in month gone by, higher by 10 percent against 3.57 lakh units sold in same month last year.
Numbers were ahead of Nomura expectation of 3.88 lakh units.
Exports during the month increased 19 percent year-on-year to 1.71 lakh units and domestic sales rose 4 percent to 2.21 lakh units.
Market Opening:
Benchmark indices started off last day of the week on a strong note after three-day fall. Likely de-escalation between India and Pakistan after Pakistan Prime Minister announced that his country will release captured IAF Wing Commander lifted sentiment.
The 30-share BSE Sensex rallied 223.53 points to 36,090.97 and the Nifty50 rose 63.80 points to 10,856.30 on first day of March series.
Escorts Sales Strong
Tractor maker Escorts said its agri machinery segment (EAM) in February 2019 sold 7,240 tractors registering a growth of 12 percent against 6,462 tractors sold in February 2018.
Domestic tractor sales in February 2019 at 6,918 tractors increased 9.9 percent against 6,295 tractors in February 2018. Export grew by 92.8 percent to 322 tractors against 167 tractors sold in February 2018.
Market Pre-Opening
Benchmark indices were higher in pre-opening trade. The Sensex gained 76.79 points at 35,944.23 and the Nifty rose 52.50 points to 10,845.
DHFL plunged 10 percent after ICRA has withdrawn its rating and CRISIL downgraded rating.
Technical Charts Indicate Consolidation in Market
Index stayed on volatile ground in narrow range of 10,850 to 10,780. Nifty has formed Shaven Top which implies that sellers were active from initial ticks but not stronger enough to pull prices on lower side, Emkay said.
In spite of being on volatile ground, index is operating within its 11-week range of 11,100 to 10,600, it added.
So going forward index seems to be cusp of sideways move, according to the research house.
Below 10,770 index can face more selling pressure and on higher side 10,880 seems immediate resistance point, it said.
Acquisition by Motherson Sumi
Auto components major Motherson Sumi Systems said it will acquire Bombardier's UK rolling stock electrical component and systems business in a transaction valued at 10.87 millions pounds (over Rs 100 crore).
The company's wholly-owned arm Motherson Rolling Stock Systems GB Ltd (MRSS) has signed a definitive agreement with Bombardier Transportation (Rolling Stock) UK Ltd to acquire the latter's assets in connection with production and installation of electrical components and systems for applications in the rail industry, Motherson Sumi Systems Ltd (MSSL) said in a statement.
These assets also includes manufacturing of wiring harnesses, panel and cabinet build and electromechanical assemblies in Derby, UK, it added.
SGX Nifty indicates Flat Opening
SGX Nifty futures, which were up 5 points, indicated that there could be flat market opening.
Most experts believe that geopoliticial tensions between India and Pakistan seem to have priced in and the focus will shift to general elections, which is likely to take place in April-May, 2019.
"We expect markets to remain volatile in the near term. On the domestic front, any escalation of tensions between India and Pakistan would keep the markets volatile," Jayant Manglik, President - Retail Distribution, Religare Broking told Moneycontrol.
He said globally, positive developments on US-China trade deal is good for the global markets, however progress on Brexit deal front, crude oil price and currency movement would be actively tracked by investors.
US Markets Close Lower on Earnings Concerns
Wall Street’s main indexes fell slightly on Thursday as support from better-than-feared US GDP data was countered by concerns about earnings and US-China trade relations.
Also on Thursday, President Donald Trump said he had walked out of his Vietnam summit with Kim Jong Un because of demands from the North Korean leader to lift US-led sanctions.
The Dow Jones Industrial Average fell 69.16 points, or 0.27 percent, to 25,916, the S&P 500 lost 7.89 points, or 0.28 percent, to 2,784.49 and the Nasdaq Composite dropped 21.98 points, or 0.29 percent, to 7,532.53.
Commerce Department data on Thursday showed that while the US economy missed a 3 percent annual growth target for 2018, a better-than-expected fourth quarter pushed gross domestic product up 2.9 percent for the year. (Source: Reuters)
Japan's Manufacturing Data:
Japanese manufacturing activity contracted in February at the fastest pace in two-and-a-half years as factories cut back output amid shrinking domestic and export orders, a revised survey showed today.
The survey highlighted the extent of the damage that the US-China trade war has already inflicted on Japan and other export-oriented countries in Asia.
The Final Markit/Nikkei Japan Manufacturing Purchasing Managers Index (PMI) was a seasonally adjusted 48.9, slightly above a flash reading of 48.5 but below January's final 50.3. (Source: Reuters)
Listing on BSE
Effective today, equity shares of The Anup Engineering will list on the Bombay Stock Exchange and admitted to dealings on the Exchange in the list of 'T' Group Securities.
Market Likely to Open Flat
The market is likely to see muted start on first day of March series amid positive Asian cues and weak US indices.
Asian markets traded higher despite weak Chinese manufacturing data. Japan's Nikkei gained 0.9 percent, Hong Kong's Hang Seng was up 0.4 percent and Australia's ASX 200 rose 0.5 percent.
South Korea's Kospi and Taiwan's Taiwan Weighted markets are shut for trading.
Jubilant Life Sciences in focus
Company's material wholly-owned subsidiary, Jubilant Pharma Limited (a company incorporated under the laws of Singapore) has successfully priced its rated unsecured bonds at 6.00% per annum issued at par for $200 million maturing in March, 2024.
S&P Global Ratings has affirmed BB-/positive rating and Fitch Ratings affirmed BB-/Stable rating for Jubilant Pharma (the issuer of the Notes). The Notes have been rated BB- by S&P and BB by Fitch.
The major portion of the net proceeds of the Notes shall be used to refinance existing indebtedness and pay associated fees and premiums over a period of time and the balance amount for working capital and general corporate purposes, company said.
