Sensex falls 793 points, Nifty ends below 11,600; Bajaj Fin twins top losers

CNBC

Market Closing

The market completely caught in bear trap after Budget 2019 proposed to increase surcharge on super-rich people and raise minimum public shareholding to 35 percent from 25 percent earlier.
The BSE Sensex fell 792.82 points or 2.01 percent to 38,720.57 and the Nifty50 plunged 247.20 points or 2.09 percent to 11,564. About three shares declined for every share rising on the BSE.
The broader markets also fell sharply as the Nifty Midcap and Smallcap indices dropped over 2 percent.
Bajaj Finserv was biggest loser among Nifty50 stocks, falling 10 percent followed by Bajaj Finance, ONGC, NTPC, Hero Motocorp, IOC, Indiabulls Housing Finance, Maruti, L&T, Grasim Industries and SBI which dropped 4-8 percent. However, Yes Bank and HCL Technologies bucked the trend.
Yes Bank Management's Clarification
Clarifying on the reports of instability in the management, Yes Bank managing director and CEO Ravneet Gill on Monday said that the claims were completely baseless and that they indicated a "concerted effort to try and cause a bit of instability.”
Over the last few weeks, there have been a lot of speculations about the board and management stability, asset portfolio and future growth prospects. Source: CNBC-TV18. 
Cox & Kings Slips 5%
lATA has suspended company's license for selling tickets, but company will continue to issue tickets on cash and carry basis, Cox & Kings said in its BSE filing.
The travel service company is Member of International Air Transport Association (lATA). lATA is entity which oversees the credit lines and settlements for the airline tickets being sold to company/travel agencies and the payment to these airlines are made via a system called Billing & Settlement Plan (BSP). The company/travel agencies need to settle value of airlines tickets issued on weekly basis.
Market Extends losses
Benchmark indices extended selling pressure with the Sensex falling 868.76 points or 2.20 percent to 38,644.63 and the Nifty50 declining 275.80 points or 2.34 percent to 11,535.40.
About five shares declined for every share rising on the BSE.
Bajaj Finance and Bajaj Finserv Plunge 9% Each
Sanjiv Bajaj, Managing Director at Bajaj Finance told CNBC-TV18 that large NBFCs playing same role as some banks need to be treated differently and the stress in NBFC space is not because of quality of loans.
IL&FS caused loss in confidence in the NBFC sector, he said, adding RBI should take a cue from government to strengthen liquidity support to NBFCs. We have not seen a rise of NPLs in NBFCs during the liquidity crisis." 
Market Update
Benchmark indices reeled under heavy selling pressure in afternoon as the BSE Sensex fell down 687.95 points or 1.74 percent to 38,825.44 and the Nifty50 plunged 219.30 points or 1.86 percent to 11,591.90.
Gold Rises on Global Growth Concerns
Gold prices rose, shaking off early losses to consolidate above the $1,400 pivot, as focus shifted to global growth concerns and interest rate cuts by major central banks.
Spot gold was up 0.5 percent at $1,408.90 per ounce. US gold futures climbed 0.6 percent to $1,408.90 an ounce.
Also helping gold, the dollar eased from multi-week highs and global stock markets were in red, helping the metal reverse course following a more than 1 percent fall on Friday after strong US jobs data lowered the likelihood of an aggressive rate cut by the US Federal Reserve. Source: Reuters. 
Earnings Impact
Goa Carbon shares plunged 8 percent after posting loss of Rs 5 crore in quarter ending June 2019 against profit of Rs 7.4 crore in same period last year though revenue came in 11.4 percent higher at Rs 139 crore YoY.
Operationally, numbers were weak with EBITDA loss at Rs 2.3 crore against EBITDA of Rs 14.6 crore in the same quarter last year. 
Surcharge on Super-Rich Not For All
Government sources told CNBC-TV18 that all non-corporate entities will not be covered under higher surcharge.
Surcharge is only on individuals, Hindu Undivided Family (HUF), Association Of Persons (AOP), Body Of Individuals (BOI), Artificial Juridical Person (AJP) but there is no increase in surcharge for companies, LLP, firms, co-operatives, sources said.
Finance Minister, on July 5, proposed to enhance surcharge on individuals having taxable income from Rs 2 crore to Rs 5 crore and Rs 5 crore and above so that effective tax rates for these two categories would increase around 3 percent and 7 percent, respectively.
Market Update:
Benchmark indices fell in line with Asian peers after strong US jobs data which indicated the moderate expectations for rate cut by Federal Reserve in coming policy meetings, as bears retained their tight control over Dalal Street in afternoon.
The government's proposal to tax share buybacks, increase minimum public shareholding in listed companies and increase in tax burden on super rich dampened investors sentiment.
The BSE Sensex dipped 643.53 points or 1.63 percent to 38,869.86 and the Nifty50 plunged 194.90 points or 1.65 percent to 11,616.30.
Technical Chart Suggests More Fall in Market
Nifty failed to push above 12,000 levels and 11,650 was the level around elections lows and so that is a focus point for short-term traders, Atul Suri, chief executive officer of Marathon Trends-PMS said.
"There is a gap for Nifty between 11400 and 11600 and so in case the pressure continues, we could see these levels but do not see a massive sell-off in the Nifty," said Suri. "The sentiment is much worse than actually, it is going to pan out in the markets."
According to him, the market can fall another 2-3 percent to 11 400 levels but the risk-reward ratio is better for the upside. 
Europe Opens Marginally Lower
European markets started off first session of the week on a negative note with the Britain's FTSE, Germany's DAX and France's CAC falling 0.2-0.4 percent, followed weak trend in Asian peers as interest rate cut by Federal Reserve may be delayed due strong US jobs data.  
Expert's Take on Falling Markets
Indian shares fell after the Budget as the stock market was looking for short-term boosts, while the government's budget was actually a long-term vision, said Shankar Sharma, vice chairman and joint MD of First Global.
"Markets being markets. If you were management coming up on an investor call and giving a 12-year plan or vision, I am sure your stock will tank too because markets are driven by immediate concerns. So, I think that is the reason why the markets fell because it wanted something right now, in the next few months or at least the next 12 months,” he added. 
Bank of Japan Warns of A Trade Risk
The Bank of Japan maintained its view that regional economies were expanding or recovering, but warned that more companies were feeling the pinch from the US-China trade war.
In a quarterly report on regional Japan, the central bank kept intact its economic assessment of all nine areas as solid domestic demand offset some weak signs in exports and output. But it acknowledged heightening risks to the export-reliant economy.
Markets are watching for any change in the central bank's tone on the economy to gauge whether it could ease policy further as early as this month's rate review. Source: Reuters.
FII View on Market Fall
Samir Arora of Helios Capital told CNBC-TV18 that additional surcharge has been applied to FPIs & AIF-III.
"The flows were impacted last year due to capital gains tax. Capital gains tax might negatively impact net return on India ETFs and might have long-term negative implications," he said.
The proposed tax might widen India's underperformance versus other economies, said Arora who believes the focus on NBFCs was good in the budget but no 'mega positives' in the budget was a negative factor.
He feels the minimum public shareholding would be raised in a staggered manner. Finance Minister Nirmala Sitharaman proposed to increase minimum public shareholding to 35 percent from 25 percent earlier.
CLSA on Market Technicals
Laurence Balanco, technical analyst, CLSA said in the near-term, the brokerage firm expects weakness for the Nifty to be back to 11,200-11,400 levels. It expects the Nifty to break above 12,000 levels but in the short-term investors should expect more volatility and downside risk, he said.
“The Indian market will perform in line with the majority of markets across the region in Asia. We have seen rebounds of the early June lows for a number of markets and stall at resistance areas. So expect more volatility and a pullback coming through in weeks ahead,” he said, in an interview with CNBC-TV18, adding that for the regional markets the period from July to September historically has been weakest holding periods for these markets.
Rupee Slips 28 Paise
The rupee depreciated by 28 paise to 68.70 against the US dollar, mainly due to heavy selling in domestic equities and foreign fund outflows.
However, weakening of the American currency in the overseas market, and easing crude oil prices restricted the rupee's decline, forex traders said.
The rupee came under pressure following heavy selling in domestic equities amid outflow of foreign funds, they added. 
Market Extends Losses:
Increase in tax for foreign portfolio investors and weak Asian markets hit Dalal Street. The BSE Sensex plunged 605.11 points or 1.53 percent to 38,908.28 and the Nifty50 fell 190.30 points or 1.61 percent to 11,620.90.
About four shares declined for every share rising on the BSE.
S&P's Take on Rs 70,000-cr Capital Infusion in PSBs
The proposed Rs 70,000-crore capital infusion into public sector banks (PSBs) will provide a timely booster to these lenders, S&P Global Ratings has said.
The move, announced in the Budget, is likely to be credit positive for the banking sector and the economy, S&P said in a note titled 'India's Budget attempts to address trust deficit in the financial sector.
"We believe the capital infusion will help PSBs make necessary haircuts on their weak corporate loans and shore up their capital adequacy," said S&P Global rating credit analyst Geeta Chugh. Source: PTI
Market Update:
The market extended losses on selling across sectors after Budget 2019 which proposed to increase minimum public shareholding to 35 percent from 25 percent earlier and did not announce any measures to boost auto sector.
The BSE Sensex fell 484.80 points to 39,028.59 and the Nifty50 dropped 152.70 points to 11,658.50. More than three shares declined for every share rising on the BSE.
Maruti Suzuki Lobbies Banks To Ease Lending Norms for Dealers
Maruti Suzuki India is in talks with banks to nudge them to ease their strict lending norms and offer retail financing to dealers of the country’s largest carmaker, a senior company executive said.
The move by the Suzuki Motor Corp. unit underscores a squeeze on dealer cash flow with passenger vehicle sales staying muted for several months while banks have cut financing for dealers due to worries whether the loans would be repaid.
Bad loans have risen in the auto sector as weak retail sales have forced the closure of several dealerships. This has led major banks such as the State Bank of India, HDFC Bank and others to tighten credit norms for automobile dealers. The liquidity stress at non-banking financial companies (NBFCs) which emerged last September with defaults on debt repayments at Infrastructure Leasing & Financial Services Ltd (IL&FS) has worsened the situation.
Credit Suisse on IndusInd Bank
Global brokerage house Credit Suisse has overweight call on IndusInd Bank with a target price at Rs 1,800.
"We re-instated coverage on bank & built-in Bharat Financial merger," the investment firm said, adding 10 percent of company's loan book will now be micro finance institutionss (MFIs) and MFI will drive NIM expansion on lower funding cost.
JSPL Steel Production
Jindal Steel & Power in its BSE filing said the company recorded steel & related products production of 1.57 MT (million tonnes) and sales of 1.51 MT during the quarter of April – June 2019.
"The quarterly steel & related products production & sales saw a robust 17 percent and 16 percent growth respectively during Q1 FY20 on a year-on-year basis. The quarterly production and sales of steel & related products stood at 1.35 MT and 1.30 MT respectively in Q1FY19," it added.
Crude Update:
Crude prices were little changed as traders weighed geopolitical risks against the impact of the Sino-US trade war on the global economy, although last week's better-than-expected US jobs data offered some support.
Brent crude futures were down 3 cents at $64.25. US West Texas Intermediate (WTI) was up 12 cents at $57.58 a barrel. 
Market Update
Benchmark indices extended losses in morning with the Sensex falling 411.90 points to 39,101.49 and the Nifty50 declining 124 points to 11,687.20.
About three shares declined for every share rising on the BSE.
Market Opening:
Benchmark indices fell sharply in opening tick in morning after Budget 2019 and amid weak Asian cues. The Sensex fell 250.45 points to 39,262.94 and the Nifty50 plunged 85.60 points to 11,725.60.
Nifty Midcap was down 200 points.
Mindtree, Biocon, Yes Bank, Jain Irrigation, PC Jeweller, Suzlon Energy, Motherson Sumi, Adani Enterprises and Apollo Tyres fell 2-6 percent.
Expert Advise
Ajit Mishra Vice President, Research at Religare Broking advises continuing with stock specific trading approach and keeping positions on both sides. "Also, avoid averaging loss making positions and bottom fishing in the stocks which are in the news for negative reasons."
Morgan Stanley on ICICI Prudential
While having overweight call on ICICI Pruduential Life Insurance with a target price at Rs 450 per share, Morgan Stanley said premium growth was 3 percent YoY in June 2019 against 5 percent YoY in May and on an individual retail-weighted received basis, premium rose 1 percent YoY.
Market Outlook
"We expect excitement to continue in the coming week as the earnings season would kick in and IT heavyweights, TCS and Infosys, will announce their results on July 9 and July 12 respectively. On the macroeconomic front, IIP and CPI inflation will be unveiled on July 12. Besides, progress of monsoon and global developments will also be on participants’ radar," Ajit Mishra Vice President, Research, Religare Broking told Moneycontrol.
He said indications are in the favour of further profit taking in Nifty. "It has immediate support at 11,800 and its breakdown could trigger fresh fall towards 11,650-11,500 levels. In case of any rebound, 11,900-12,000 zone would act as hurdle.
Market Pre-Opening
Benchmark indices traded flat in pre-opening with the Sensex falling 0.02 points to 39,513.37 and the Nifty50 slipping 25 points to 11,786.20.
Deutsche Bank To Slash 18,000 Jobs By 2022
Germany's biggest lender Deutsche Bank said Sunday it would cut 18,000 jobs by 2022, as the former leading light of the country's financial sector looks to escape years of turmoil.
The slashing of around one in five of its workforce, to 74,000 employees, is an unprecedented round of departures for Deutsche.
The bank said the layoffs would reduce annual costs by six billion euros ($6.7 billion) over the same period. 
BofAML Downgrades L&T
Global brokerage house Bank of America Merrill Lynch downgraded Larsen & Toubro to neutral with a target price at Rs 1,719, implying 10 percent potential upside from current levels.
"The stock priced well for mid-cycle and there is limited scope for positive surprises," said the investment firm which does not expect acceleration to capex cycle in near term.
Bank of America Merrill Lynch said government capex as a percentage of GDP has peaked at 6 percent while growth in real estate & private capex are likely to remain muted.
DHFL in Focus
Banking sources told CNBC-TV18 that banks may have to mark 35-40 percent of their exposure to DHFL as unsustainable. SBICAP is working on a draft resolution plan for DHFL.
USFDA Issues 12 Observations to Biocon's 3 Malaysian Units
Biocon Sdn Bhd's Insulin Glargine Drug Substance, Drug Product and Device assembly facilities in Malaysia underwent a pre-approval inspection by the US FDA between June 24 and July 5, 2019, the company said in its BSE filling.
The inspection across these 3 units concluded with 12 observations issued on the Form 483, it added.
Biocon said it would respond to the FDA with a corrective and preventive action plan and is confident of addressing these observations expeditiously.
Asia Update:
Stocks in Asia were trading lower in morning after a strong US jobs report lowered expectations of a rate cut by Federal Reserve in coming policy meetings.
China's Shanghai Composite fell 3 percent while Hong Kong's Hang Seng, Japan's Nikkei and South Korea's Kospi declined 1-2 percent.