Nifty ends below 11,500 for 1st time since May 17, Sensex loses 174 points

10 Jul 2019

Market Closing

Benchmark indices ended volatile session sharply lower with the Nifty falling below 11,500 at close for first time since May 17 this year.

The BSE Sensex was down 173.78 points at 38,557.04 and the Nifty50 fell 57 points to 11,498.90.

The market breadth remained in favour of bears as about three shares declined for every two shares rising on the BSE.

Nifty Midcap, Auto, Metal, PSU Bank and Realty indices slipped a percent each.

Gainers & Losers among Sensex 30 stocks

Market Update

Benchmark indices are trading in the red with Nifty near 11,500 levels and Sensex down more than 100 points.

Sensex is down 133.84 points or 0.35 percent at 38596.98, and the Nifty is down 47.00 points or 0.41 percent at 11508.90. About 866 shares have advanced, 1427 shares have declined, and 117 shares are unchanged.

Yes Bank, Coal India and Sun Pharma are the top gainers, while Bajaj Finance, Tata Motors and Tata Steel are the biggest losers.

On the sectoral front, all but Pvt bank stocks are trading in the red. Nifty Realty is the biggest loser, down 1.71 percent.

Indian Acrylics Q1 Earnings

Indian Acrylics said its net profit in quarter ended June 2019 jumped to Rs 10.5 crore compared to Rs 3.5 crore in same period last fiscal.

Revenue from operations also shot up 38.5 percent to Rs 221.1 crore in Q1, from Rs 159.6 crore in corresponding quarter last year.

Crude Spikes

Oil prices rose on Wednesday, led by US crude after an industry group reported that US stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions.

West Texas Intermediate (WTI) crude had climbed 1.94 percent, to $58.95. Brent was up 1.62 percent, at $65.20 a barrel. Source: Reuters.

Nifty Bank Rebounds

Benchmark indices were off their day's low on recovery in banks, FMCG and IT stocks in afternoon.

The BSE Sensex was down 109.03 points at 38,621.79 and the Nifty50 fell 34.70 points to 11,521.20.

About three shares declined for every two shares rising on the BSE.

Nifty Bank turned higher, rising 0.05 percent to trade at 30,584.20.

KRBL Shares Dip 4%

Shares of basmati rice processing company KRBL fell 3.7 percent intraday after ICRA downgraded credit rating of company's long term bank facilities.

Company, on July 9 said ICRA revised rating on company's long term bank facilities worth Rs 1,700 crore to AA- (under rating watch with negative implications).

TCS Recognised with an overall positive vendor rating by Gartner lnc

Tata Consultancy Services said it has been recognised with an overall positive rating in the recent Vendor Ratingl report by Gartner lnc, based on a holistic evaluation covering the company's strategy, product/ service, pricing structure, technology/ methodology, support/ account management and corporate viability.

TCS reported a revenue of $20.93 billion in FY 2019, growing 11.4 percent in organic, constant currency terms. Growth has been particularly strong in the United Kingdom and in Europe, where it grew 22 percent and 17.8 percent, respectively.

Fitch Ratings on Budget 2019

India's new budget outlined some economic reforms that could support the economy, but its fiscal stance was left broadly unchanged, with no plans for meaningful consolidation, says Fitch Ratings.

The budget targets a slight narrowing in the fiscal deficit target, to 3.3 percent of GDP, from an estimated 3.4 percent in FY19 and in the FY20 interim budget.

Fitch thinks the fiscal targets are broadly credible, although projected revenue growth, at 13.5 percent, may prove optimistic as it is based on the government's higher 7.0 percent real GDP growth forecast and disinvestment targets might not be met.

The rating agency believes off-budget spending is likely to increase due to, for instance, the additional banking-sector recapitalisation, which is equivalent to 0.3 percent of GDP. "This should not affect the deficit, but it will raise the debt level."

Sadak Yojana

Cabinet is likely to consider approval of Phase 3 of Pradhan Mantri Gramin Sadak Yojana, reports CNBC-TV18 quoting unnamed sources.

Government plans to build 1.25 lakh km of rural roads under Phase 3 of PMGSY and the estimated cost of implementing Phase 3 of PMGSY in 5 years at Rs 80,250 crore, sources said.

Market Update:

Benchmark indices extended losses in afternoon with the Sensex falling 197.19 points to 38,533.63 and the Nifty50 declining 59.90 points to 11,496.

About three shares declined for every two shares rising on the BSE.

IndiGo CEO to Employees

IndiGo CEO, Ronojoy Dutta told employees that issues between promoters will eventually get sorted out and have nothing to do with the airline.

"Mission, direction & growth strategy remains unchanged & firmly in place. It is very important that we remain focussed on running a high-performance airline," he said.

PV Sales Drop in 18% in June

Domestic passenger vehicle (PV) sales declined by 17.54 percent to 2,25,732 units in June from 2,73,748 units in the year-ago period.

Domestic car sales were down 24.97 percent to 1,39,628 units as against 1,83,885 units in June 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM) Wednesday.

Motorcycle sales last month declined 9.57 percent to 10,84,598 units as against 11,99,332 units a year earlier.

Total two-wheeler sales in June declined 11.69 percent to 16,49,477 units compared to 18,67,884 units in the year-ago month.

OBC Cuts MCLR

State-owned Oriental Bank of Commerce (OBC) has cut the marginal cost of funds-based lending rate (MCLR) by up to 10 basis points (bps) for various tenors with effect from Thursday.

MCLR for overnight and one-month loan tenor has been reduced by 10 bps to 8.20 percent and 8.25 percent, respectively.

Earlier, MCLR for overnight and one-month tenor was 8.30 percent and 8.35 percent, respectively.

Ingersoll Rand's CFO Resigned

Company said Vikas Goel, Chief Financial Officer of the company has voluntarily resigned from the services.

The board will appoint his successor in due course and intimate the stock exchanges of the same, it added.

JM Financial's Results Preview on Financial Sector

"In Q1FY20, for the 167 companies under the coverage we expect a profit growth of 19.6 percent YoY, revenue growth of 7.3 percent YoY and EBITDA growth of 6 percent YoY. Excluding financials, we expect an almost zero PAT growth YoY while excluding corporate banks (SBI, Axis, ICICI and Yes) and Tata Motors the growth is expected to be 7.7 percent YoY. Excluding financials, profitability is expected to decline with overall EBITDA margin contraction of 86bps YoY driven by chemicals, metals and auto and auto ancillary companies," JM Financial said.

For the Nifty50, EPS is likely to grow by 21.5 percent aided by strong growth in financials even as telecom and consumer discretionary remain a drag, it said, adding financials is likely to be the main driver of earnings growth thereby offseting the weakness in other sectors.

Market Outlook

"Nifty may head below 11,500 in the next few days. We do not see market making new highs anytime soon," Rohit Srivastava, Fund Manager PMS at Sharekhan said in an interview to CNBC-TV18.

"We need to look at selective pockets for asset allocation and we see multiple possible triggers for oil & gas sector," he said.

Wirecard Partners with Yes Bank

Wirecard, the global innovation leader for digital financial technology, announced partnership with Yes Bank to continue driving financial inclusion in the country. T

he partnership will expand the scope of India's Aadhaar Enabled Payment System, a biometric digital payment system developed by the National Payments Corporation of India. As a result, digital payments and banking transactions will be more readily accessible to Indian residents, including those living in remote areas.

NCLAT Dismisses HDFC's Insolvency Plea Against RHC Holding

The National Company Law Appellate Tribunal (NCLAT) dismissed a petition by HDFC to initiate insolvency proceedings against RHC Holding, an entity promoted by billionaire brothers Malvinder Mohan Singh and Shivinder Mohan Singh.

A two-member bench headed by Chairman Justice S J Mukhopadhaya upheld the order of the principal bench of the National Company Law Tribunal (NCLT) which had rejected HDFC's plea.

The appellate tribunal said it found "no merits" in HDFC's petition and said that non-bank financial lenders come under the purview of the Reserve Bank of India (RBI) and should seek remedies from the central bank, not the bankruptcy court.

Relief for Singh Bros

NCLAT disallows HDFC plea seeking to initiate IBC proceedings against RHC Holdings.

NCLAT order says: Cannot permit IBC proceedings against a provider of financial services, NBFC. Any claims of illegal receipt of deposits by RHC Holdings should be placed before RBI.

HDFC had moved NCLAT seeking to initiate IBC proceedings against RHC Holdings. RHC Holdings is the holding company of Singh Bros. HDFC had sought IBC proceedings against RHC Holdings for unpaid dues of Rs 41 crore

Richard Branson's Virgin Galactic to go public by year-end

British billionaire Richard Branson will take Virgin Galactic public by year-end, giving it the much-needed funds to take on Jeff Bezos' Blue Origin in the race to space.

The company will list its shares as part of a merger with Social Capital Hedosophia Holdings Corp , a special purpose acquisition company (SPAC), which will also take a 49% stake in Virgin Galactic for about $800 million, a source who worked on the deal told Reuters. Read more

Gold Update:

Gold prices slipped as higher Treasury yields lifted the dollar, while markets awaited testimony from Federal Reserve Chair Jerome Powellfor clarity on an expected US rate cut.

US gold futures slipped 0.44 percent to $1,394.30 an ounce.

The dollar index edged toward a three-week high against a basket of major currencies, as easing bets of deep US interest rate cuts pushed Treasury yields higher. Source: Reuters.

Rupee Falls

The rupee declined 7 paise to trade at 68.62 against the US dollar in morning amid unabated foreign fund outflows and rising crude oil prices.

The rupee opened weak at 68.61 at the interbank forex market and slipped further to 68.67 intraday, showing a decline of 16 paise against its previous close.

The domestic unit had rebounded 15 paise to close at 68.51 against the US dollar Tuesday on fag-end selling of the greenback by banks and importers in line with a late recovery in domestic equities. Source: PTI

InterGlobe Aviation Cracks 17%

Shares of InterGlobe Aviation, the operator of budget airline IndiGo, fell more than 17 percent intraday after the differences between two promoters Rahul Bhatia and Rakesh Gangwal over company's operation.

Rakesh Gangwal Group sent letter to SEBI alleging lack of compliance with corporate governance norms, global brokerage Credit Suisse said, adding the dispute between Rakesh Gangwal & InterGlobe Enterprises has potential of lingering on & becoming a significant headwind.

The investment firm further said dispute hasn't had an operational impact so far but can't rule out.

Market Outlook

"Long-term prospects of Indian market remain intact," said Vikas Khemani, Founder at Carnelian Capital Advisors LLP in an interview to CNBC-TV18.

He said would not buy Titan now, better to wait & watch and would see a shift from over-owned stocks to under-owned stocks.

IT will continue to remain a defensive sector, he said, adding investors will stay away from IndiGo until boardroom battle doesn't subside.

Market Update:

The market turned volatile as it is looking for firm direction on either side and hence is closely watching Q1 earnings season that started by TCS on a subdued note.

The BSE Sensex was down 22.81 points at 38,708.01 and the Nifty50 fell 2 points to 11,553.90.

Crude Update:

Oil prices rose, led by US crude after an industry group reported that US stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions.

West Texas Intermediate (WTI) crude had climbed 1.3 percent to $58.58. Brent was up 0.89 percent at $64.73.

The US and global benchmarks have gained this year as the Organization of the Petroleum Exporting Countries (OPEC) and big producers such as Russia have honored commitments to cut output. Source: Reuters.

Market Update:

Benchmark indices recouped all opening losses to trade marginally higher on further short covering. The BSE Sensex was up 41.55 points at 38,772.37 and the Nifty50 gained 13.40 points at 11,569.30.

The market breadth was in favour of bulls as about two shares advanced for every share falling on the BSE.

Market Opening

Benchmark indices fell moderately despite positive Asian cues, hit by TCS earnings which disappointed Street.

The BSE Sensex was down 103.77 points at 38,627.05 and the Nifty50 fell 38 points to 11,517.90.

Divestment in CPSE

Government official told CNBC-TV18 that Finance Ministry will shortly seek cabinet nod for lowering stake in CPSEs below 51 percent and may take list of CPSEs while seeking cabinet nod on going below 51 percent.

Government is open to aligning stake in CPSEs like other promoters in the market and is expected to retain management control while paring stake below 51 percent, sources said.

Sources further said 51 percent government stake includes current shareholding of public financial institutions & cross holdings.

Auto Preview

Nomura expects auto companies' Q1 to be one of the weakest quarters in recent times.

"For our coverage universe (ex-JLR), we forecast 5 percent YoY revenue decline and EBITDA/PAT are likely to decline 23 percent /34 percent YoY. Margin is likely to come off by 250 bps YoY on lower operating leverage," the brokerage explained.

However, lower commodity prices will support margin by 50-100 bps in Q1 & Q2. Nomura expects Ashok Leyland, Hero MotoCorp & Exide to surprise positively while Maruti, Bharat Forge & Motherson Sumi could disappoint.

TCS Management

After Q1 earnings, TCS management told CNBC-TV18 that currency will be a major factor in determining margin going ahead and temporary blips in currency can be baked into the model.

"We will moderate some investments if rupee appreciates significantly."

"We are building capabilities in tech & intellectual property, and we can do more," they said, adding board will discuss & take appropriate decision w.r.t buybacks.

Jefferies Bearish on Yes Bank

Jefferies is bearish on Yes Bank as it has underperform rating on the stock and slashed price target by nearly half to Rs 80 from Rs 155 earlier.

The global brokerage house cut EPS estimates by 82 percent, 24 percent & 22 percent & book-value by 30 percent, 20 percent and 15 percent for FY20-22.

"Below investment grade book has inched up materially. Any lumpy NPL will shave off its wafer thin capital below regulatory level," Jefferies said, adding upside rationale, if any, completely hinges on the bank's ability to raise capital.

Rupee Opening

The Indian rupee opened lower at 68.62 against the US dollar, down 8 paise compared to Tuesday's close of 68.54 a dollar.

Market Pre-opening

Benchmark indices were mixed in pre-opening trade, indicating another day of consolidation for the market.

The BSE Sensex was up 156.29 points at 38,887.11 while the Nifty50 fell 50.60 points to 11,505.30.