Nifty ends above 10,800 after slipping below this level for the 1st time since Feb 27
05 August 2019
Market Close: Indian indices ended on negative note but off day's low on August 5 amid government decided to withdraw Article 370 from J&K.
Jammu and Kashmir will be a Union Territory with a legislature, while Ladakh region will be a Union Territory without a legislature, according to the government's plan for J&K, said Amit Shah.
At close, the Sensex was down 418.38 points at 36,699.84, while Nifty was down 134.80 points at 10,862.60. About 742 shares have advanced, 1659 shares declined, and 138 shares are unchanged.
Bharti Airtel, Tech Mahindra, Coal India, TCS and Bajaj Auto were among major gainers on the Nifty, while losers include Yes Bank, UPL, Tata Motors, Power Grid Corp and Grasim Industries.
Among sectors, except IT other indices are ended in the red led by energy (down 2.7 percent) followed by metal, bank, auto, FMCG, infra and pharma. BSE Smallcap and Midcap index down over 1 percent.
Gold hits six-year high: Gold prices jumped more than 1% to their highest in more than six years on Monday, as the escalating trade war between the United States and China along with global growth worries drove investors towards safe-haven assets.
IIFL Finance To Raise up to Rs. 1,000 crore via bonds
IIFL Finance said it would open its public issue of bonds on August 6 and would raise up to Rs 1,000 crore, for the purpose of business growth and expansion.
The IIFL bonds offer yield of 10.50 percent per annum for tenor of 69 months. It also offers 10 percent per annum for short tenor of 15 months for the secured category. The bonds have monthly, quarterly and annual payment frequency along with zero coupon bonds. The other tenor offered is 39 months for secured category, it added.
Nifty below 11,850:
Benchmark indices remained under selling pressure with the Sensex falling 536.58 points to 36,581.64 and the Nifty50 declining 161.40 points to 10,836.
The market breadth remained largely in favour of bears as about three shares declined for every share rising on the BSE.
While the move on "one nation, one law" has a short term negative impact on the market, there are larger reasons for the decline today. Asian markets have declined sharply, largely because of the Chinese currency depreciating past the important mark of 7 to the Dollar, S&P 500 futures declined 1 percent.
However, Rajiv Singh, CEO, Karvy Stock Broking believes that the downside is now limited and the Nifty will stay in the range of 10,500 to 11,200 in the near term.
Expert's Take on Govt's Bold Move
"The government has displayed strong political will and decisiveness to take difficult decisions, in order to fulfil one of its poll promises related to J&K. We hope that the government will display similar commitment while acting on the economy to improve both its short term as well as long term prospects. We expect that Government will take similar bold moves in case of addressing economic slowdown, recent taxation measures which have dampened sentiment and go ahead with difficult legislations on land reforms , labour reforms and privatisation of PSUs," Rajiv Singh, CEO, Karvy Stock Broking said.
Buzzing: Shares of Trident rose 4.5 percent on Monday after company posted strong numbers in the quarter ended June 2019.
The company's Q1FY20 net profit jumped to Rs 122.4 crore against Rs 58.9 crore in the same quarter last year. Revenue rose 15.5 percent to Rs 1,312.1 crore versus Rs 1,136.4 crore.
Rupee extends losses:
The Indian rupee has extended morning losses and trading near day's low on the back of selling seen in the domestic equity market and foreign fund outflows.
It is trading lower by 87 paise at 70.46 per dollar against Friday's close 69.59 per dollar.
It the morning trade it opened at the lowest level since May 17 against the US dollar. It opened lower by 55 paise at 70.14 per dollar against Friday's close 69.59.
India Services Activity Reverses Course in July
India's services activity bounced back in July and expanded at the fastest pace in a year after contracting the previous month, driven largely by strong growth in international demand, a private survey showed on Monday.
The IHS Markit Services Purchasing Managers' Index rose to a one year high of 53.8 in July, up from 49.6 in June and comfortably above the 50-mark that separates growth from contraction.
"India's service economy showed renewed vigor in July as businesses and households welcome the recent government budget announcement," Pollyanna De Lima, principal economist at IHS Markit, said. Source: Reuters.
"The recent correction has been driven by various factors viz., the global weakness, selling by FPIs along with signs of a slowdown in the domestic economy. Having breached the psychologically crucial levels, the markets are expected to be volatile in the near term," Arun Thukral, MD & CEO at Axis Securities told Moneycontrol.
He said a large part of the market is currently trading at valuations which were not seen in past 2-3 years probably factoring in no-growth or de-growth for long which looks to be unlikely though near term concerns persist.
It makes sense for the investor to weigh on the option of averaging in the stocks he had earlier invested or accumulating the new stocks he had earlier missed out due to rich valuations in a staggered fashion to benefit if the market continues to weaken further, he advised.
Nestle India rises 4%:
Share price of Nestle India rose more than 4 percent on August 5 after company reported better numbers for the quarter ended June 2019 (Q2FY20).
The company's Q2 net profit jumped 10.8 percent to Rs 437.8 crore versus Rs 395 crore in the same quarter last fiscal.
Nifty below 10,800; Sensex tumbles 650:
The benchmark indices have extended their morning losses as Nifty fell below 10,800 level
The Sensex is down 642.10 points or 1.73% at 36476.12, and the Nifty down 199.60 points or 1.81% at 10797.80. About 294 shares have advanced, 1233 shares declined, and 49 shares are unchanged.
Oil prices drop: Oil prices fell on Monday amid concerns about weaker crude demand after U.S. President Donald Trump said he would impose tariffs on more Chinese imports, potentially ramping up a trade war between the world’s two largest economies.
Market Opens: It is a negative start for the Indian indices on the first day of the week as Nifty slipped below 10,850.
At 09:16 hrs IST, the Sensex is down 465.38 points or 1.25% at 36652.84, and the Nifty down 141.90 points or 1.29% at 10855.50. About 183 shares have advanced, 720 shares declined, and 36 shares are unchanged.
HDFC, TCS, NTPC, HCL Tech, are some of the major gainers on the indices, while losers include ICICI Bank, Axis Bank, Britannia, Bajaj Finance, Hero Motocorp, DHFL, Equitas Holding, LIC Housing, Union Bank of India and Indiabulls Housing.
All the sectoral indices are trading in the red led by the PSU bank, metal, auto, enenrgy, FMCG, infra and IT.
Rupee opens at lowest level since May 17: The Indian rupee slipped in the early trade on August 5 as it opened at the lowest level since May 17 against the US dollar.
IT opened lower by 55 paise at 70.14 per dollar on Monday against Friday's close 69.59.
Market at pre-opening: Benchmark indices are trading weak in the pre-opening session.
At 09:01 hrs IST, the Sensex is up 46.70 points or 0.13% at 37164.92, and the Nifty down 66.40 points or 0.60% at 10931.
CLSA on SBI
Buy call, target cut to Rs 380 from Rs 420 per share
Higher slippage disappoints; Q1 net profit below expectations due on higher credit cost
Key disappointment was rise in its delinquency ratio to 3.4% of the past year’s loans
Jefferies on SBI
Buy call but cut target to Rs 370 from Rs 375 per share
Quarter did not have much to cheer about
Cut our EPS estimate for FY20 by 7.8% & FY21/22 by 3.2/5.5%
Kotak Institutional Equities on SBI
Maintain buy call on the stock; cut target to Rs 390 from Rs 410 per share
Reported a weak start to fy20 with slippages at 3% of loans
Higher slippage from agriculture & SME is seasonal in nature & less worrying
IDFC Securities on SBI
Management has revised guidance of core RoA to 0.5%-.6% from 0.6-0.7%
Cut earnings & target to Rs 365 per share; maintains outperform on inexpensive valuation
See downside risks to earnings from a weak macro, High Pension Costs & a larger watchlist
Citi on SBI
Maintain buy call with target cut to Rs 400 from Rs 415 per share
Healthy loan growth, slippages increase in Q1
Q1 net profit below our/consensus estimates
Morgan Stanley on ITC
Overweight on the stock with target at Rs 360 per share
Q1 results were weaker than we expected
Except for FMCG, EBIT growth across all business segments missed our estimate
HSBC on ITC
Q1 cigarette volume growth of 3-4% slightly below expectations
While valuation undemanding, taxation path remains a key risk
Maintain buy call, cut target to Rs 320 from Rs 330 per share
CLSA on ITC
Remain buyers on the stock with target at Rs 365 per share
Double-digit growth remained elusive for company’s cigarette biz which grew 8% in Q1
FMCG business reported strong EBITDA growth despite moderate topline show
Stock provides attractive risk-reward
IDFC Securities on ITC
Results in-line with 3% YoY volume growth on a base of 2%
From Q2FY20e onwards base becomes further unfavourable
Downgrade to neutral with target at Rs 275 per share
Kotak Institutional Equities on ITC
Cigarette volume growth was modest at 3% (Our Estimate) despite stable taxation
See a likely leg down in EBIT growth potential to 7-9% from 9-11%
FMCG sales growth moderated to 8% (From 11-12%)
Add rating on the stock, cut target to Rs 315 from Rs 335 per share
Citi on HDFC
Buy call, raise target to Rs 2,570 from Rs 2,360 per share
Q1 AUM growth moderates further; spreads stable
Liability side should benefit from falling wholesale costs
Raise FY20 net profit estimate by 8% to factor Gruh stake sale
CLSA on HDFC
Maintains buy call with target at Rs 2,770 per share
Q1 net profit boosted by gain on Gruh Fin’s stake sale
Asset quality faced some pressure with downgraded exposure to Jet Airways
HDFC remains our top pick
Kotak Institutional Equities on HDFC
Retain add with target at Rs 2,325 per share
Q1 moderate on account of muted growth on non-retail book & higher funding cost
Expect its affordable housing business to drive medium-term growth
Jefferies on HDFC
Buy call, increase target to Rs 2,435 from Rs 2,310 per share
Bottomline was boosted by Gruh stake sale, though growth slowed
Cut FY21/22e EPS estimate by 7-9%, forecast AUM CAGR of 13.4%
Kotak Institutional Equities on Nestle India
Maintain reduce with target at Rs 10,700 per share
Earnings weighed down by weak gross margins mainly due to sharp rise in milk prices
Domestic revenues grew a strong 13% YoY
CLSA on Nestle India
Outperform stays, raise target to Rs 12,415 from Rs 11,750 per share
Q2 clearly indicates management rising obsession with growth, which is the key positive
Announcement on capex also points to its growth ambition
Cut EPS by 2-5%, but this is due to a special dividend, which warrants a cut in other income
Citi on Exide
Buy call with target cut To Rs 265 from Rs 290 per share
Cut revenue estimates by 7% over FY20-22, primarily due to cuts in our auto segment revenues
May see a rebound in FY22 if cycle revives
Increase margin estimates slightly given weak lead prices & fructifying cost-reduction moves
Citi on Ceat
Buy call with target cut to Rs 1,280 from Rs 1,400 per share
Q1 steady replacement demand, weak OEM offtake
OEM demand has been very weak & reflected in sharp correction in stock price
Cut FY20-22 earnings estimates by 3-10%
CLSA on GSPL
Buy call; target raised to Rs 285 from Rs 270 per share
Q1 net profit stood in-line with our estimate
EBITDA/EBIT in-line as 3% beat on volume offset by a miss on tariffs
Volumes for Gujarat Gas could lead to earnings upgrades
CLSA on Inox Leisure
Retain buy call with target raised to Rs 402 from Rs 394 per share
Q1 revenue grew by 19% YoY driven by healthy screen additions
Cut FY20/21 estimates by 26% to incorporate the impact of Ind-As
Wall Street ends lower on Friday: Wall Street extended its sell-off on Friday on renewed trade fears as the benchmark S&P 500 index and Nasdaq saw their worst weekly percentage plunges since December, when investors were spooked by the prospect of a looming recession.
Asian shares hit two-month lows: Asian shares extended their losses on Monday as a sharp escalation in the Sino-US trade war kept finiancial markets on edge, while the Japanese yen and bonds held near recent peaks as nervous investors stuck with perceived safe havens.
SGX Nifty: Trends on SGX Nifty indicate a negative opening for the broader indices in India, a fall of 62.50 points or 0.57 percent. Nifty futures were trading around 10,952.50-level on the Singaporean Exchange.