Banks, auto help Nifty hold 11,000 amid volatility; mid-smallcaps gain too

CNBC
Market Closing  
Benchmark indices reversed morning losses to close marginally higher with the Nifty decisively holding 11,000 level, backed by banks and auto stocks. 
The BSE Sensex rose 38.80 points to 37,350.33 and the Nifty50 gained 18.40 points at 11,047.80. However, for the week, indices lost more than half a percent. 
Fitch Revises RIL long term local currency issuer outlook to positive
Fitch Ratings said it has revised the outlook on Reliance Industries's (RIL) long-term local-currency Issuer Default Rating (IDR) to positive from stable and has affirmed the rating at 'BBB'.
At the same time, it has affirmed the long-term foreign-currency IDR at 'BBB-' with a stable outlook, as RIL's foreign-currency IDR is capped by India's (BBB-/Stable) country ceiling of 'BBB-', the agency added.
Fitch said the outlook on the local-currency IDR was revised to positive due to the potential for RIL to further deleverage.
The rating agency revised after Reliance's announcement that it would eliminate its net debt by the financial year ending March 2021 (FY21) and that it plans to sell a 20 percent stake in its oil-to-chemical division to Saudi Arabian Oil Company (Saudi Aramco).
ICICI Direct Bullish on Ashoka Buildcon
"We are positive on Ashoka Buildcon's long term prospects given its strong track record, comfortable orderbook position, financial closure for all HAM projects & huge opportunities ahead. ABL has started execution on three of the HAM projects as it received appointed date for these projects. Appointed Dated for two more HAM projects is expected in the next two to three months, which should further lead to ramp up in execution," ICICI Direct said.
Hence, the brokerage expects EPC revenues to grow robustly at 14.2 percent CAGR to Rs 4,980.8 crore. "We continue to maintain buy recommendation on the stock with an SoTP-based target price of Rs 150 per share," it said.
Technical Glitch At LSE
London Stock Exchange spokesperson said technical problems are affecting certain securities on the exchange and the exchange expects to update on the same to market shortly, reports CNBC-TV18.
Hence, London’s FTSE 100 index failed to open at the start of the European trading today.
Fitch Downgrades Macrotech Developers
Fitch Ratings said it has downgraded India-based real-estate developer Macrotech Developers Limited's (MDL), erstwhile Lodha Developers, Long-Term Issuer Default Rating (IDR) to 'B-' from 'B'.
It has also downgraded the rating on the company's $325 million 12% senior unsecured bond due March 2020, which was issued by Lodha Developers International Limited and guaranteed by MDL and certain subsidiaries, to 'B-' with a Recovery Rating of 'RR4' from 'B'/'RR4', it added.
Fitch said it has simultaneously placed all ratings on Rating Watch Negative (RWN).
Quant Pick
ICICI Direct advised buying Torrent Power in the range of Rs 285-292 with a target price at Rs 340 and stop loss at Rs 260. The time frame is three months.
"In the current volatile market conditions, only select few stocks have seen relative resilience and absorbed selling pressure. Torrent Power is among few stocks which is holding its gains of June series despite the Nifty correcting more than 10 percent from its peak and midcap and smallcap indices moving to fresh 52 weeks low," ICICI direct said.
On the F&O front, the current open interest in the stock is significantly high and is at almost two-year highs. The OI in the stock has increased more than double since the July series and despite ongoing market weakness, the OI in the stock has remained largely intact. The current OI of almost 5.2 million shares is 45 percent higher compared to the open interest seen in the early part of August series, it added.
The brokerage believes long positions are formed in the stock and it is likely to move higher in the coming weeks.
Steel Demand Likely To Increase
"The steel demand is expected to accelerate after the completion of monsoon season as construction activities will see a pickup in pace. India’s steel consumption is expected to grow by 5-6 percent on the back of government’s expenditure towards infrastructure and construction. With the same government coming to power, the focus will continue to remain on infrastructure development in the country," CARE said.
MF Top Buys and Sells in July
Top 5 buys of the mutual fund industry in July 2019 were IndusInd Bank, NTPC, Coal India, ONGC and IOC.
IndusInd Bank was the top 5 buy in June 2019 and NTPC & IOCL were among top 5 sells in June 2019, East  India Securities said.
Top 5 sells of the mutual fund industry in July 2019 were Infosys, REC, Shriram Transport, UPL and Mindtree.
Shriram Transport was among top 5 buys in June 2019, East India said.
NBFI Funding Squeeze to Hit Indian Property Developers Hardest
"Liquidity risk is increasing for Indian-based real-estate developers, as non-bank financial institutions (NBFIs; including housing finance companies) are shying away from lending to the sector, Fitch Ratings said.
Developers that rely on refinancing from NBFIs, particularly those with weak financial profiles, will be affected the most should conditions persist, it added.
The rating agency said the availability of unencumbered assets among large developers may be of limited use, as NBFIs are looking to shed their already-high exposure to the sector, especially to large borrowers.
Market Outlook
"The top-down valuations of the Indian market have become more reasonable after the severe correction in many names over the past 1-2 months. However, (1) threat of further earnings downgrades (large cuts in 1QFY20 results season), (2) uncertain global and domestic macroeconomic conditions and (3) super-high
multiples of consumption-related stocks reduce the investment appeal of the Indian market. Lastly, low global interest rates have sustained price-value distortions for long periods of time, thereby making investment decisions harder," Kotak Institutional Equities said.
ICICI Direct Downgrades NBCC
"While NBCC enjoys a unique business model and strong orderbook, delay in commencement of its redevelopment projects has impacted execution meaningfully. Hence, we cut our estimates sharply and now expect consolidated revenues and PAT to grow at a CAGR of 11.2 percent and 9.0 percent to Rs 12,290.4 crore and Rs 445.8 crore, respectively, in FY19-21E. Hence, we downgrade the stock to hold despite the attractive valuation with a target price of Rs 40 per share," ICICI Direct said.
NBCC’s consolidated topline grew 2 percent YoY to Rs 1,891.1 crore, lower than its estimate of Rs 2,544.1 crore. PAT degrew 33.2 percent YoY to Rs 48.9 crore mainly on account of lower topline growth and sharp EBITDA margin contraction.
Glenmark Pharma Tanks 5%
CLSA has maintained its sell call on the stock but slashed price target sharply to Rs 350 from Rs 500 earlier as earnings growth would remain under pressure.
The brokerage cut its FY20-21 EPS estimates by 15-18 percent.
"Debt reduction will depend upon divestment of API business and non-core assets. Weak revenue growth & high R&D spend phase should keep margin subdued," it said.
Indian Rupee Slips:
The Indian rupee recouped some losses and fell 4 paise to 71.31 against the US dollar amid rising crude oil prices and cautious opening in domestic equities.
Sensex Off Day's Low:
Benchmark indices cut down losses with the Sensex declining 122.61 points to 37,188.92 and the Nifty50 falling 43.50 points to 10,985.90.
The market breadth remained in favour of declines as about two shares declined for every share rising on the BSE.
Tata Motors Falls Nearly 3%
Shares of Tata Motors fell 2.6 percent intraday after CRISIL downgraded its long term rating amid weakening risk profile of Jaguar Land Rover.
The stock lost more than half of its value in last one year.
CRISIL in its release said it has downgraded rating on the long-term bank facilities of Tata Motors (TML) to 'AA-/Negative' from 'AA/Negative', but reaffirmed rating on short term bank facility, commercial paper and short-term debt at 'A1+'.
Technical Outlook
"Going ahead, the immediate support for the index is placed around 10,870 (78.6 percent retracement of recent pullback) whereas the resistance is seen at the swing high of 11,181. Traders are advised to trade with a stock specific approach with a tab on the above mentioned levels in the index," Sameet Chavan, Chief Analyst-Technical and Derivatives at  Angel Broking told Moneycontrol.
More Fed Rate Cuts likely?
Calling economic and financial market signals for the economic outlook "mixed," Minneapolis Federal Reserve Bank President Neel Kashkari signalled that he is likely to support further reductions in US interest rates to support growth.
Trade tensions are making businesses cautious, he said, and the inversion of the US yield curve that this week sent global stocks plummeting "is an indicator that people are nervous." At the same time, the jobs market is strong, and so is consumer spending.
As Fed policymakers gear up for their September rate-setting meeting, he said, they will be assessing all of the data to make a decision. "I am leaning towards the camp of, 'yes we need to give more stimulus to the economy, more support, we need to continue the expansion and not allow a recession to hit us,'" he said. Source: Reuters.
FM and PM Meeting
Finance Minister Nirmala Sitharaman met Prime Minister Narendra Modi on economy related issues on Thursday, the 73rd Independence Day, reports CNBC-TV18 quoting unnamed sources.
FM appraised PM about recent meetings with various sectoral representatives and informed about current challenges faced by auto & reality sector. She also informed about concerns shared by FPIs, sources said.
PM asked FM to come up with detailed analysis on reason for fall in market and economic slowdown, sources said, adding more PM-FM meetings will be held before government announces measures on economy.
Sources said PM is worried about job cuts & SME sector issues. He asked FM to streamline ideas to spur jobs & business sentiment.
CLSA on Indiabulls Real
-Buy rating, target cut to Rs 120 from Rs 150/sh
-Company aiming for net-debt-zero status by March 2020
-Company plans selling 50 percent stake in sky projects & other commercial assets
-Company will have a de-risked balance sheet
-Large land-bank in MMR & NCR offer good long-term prospects
-Valuations should become linked to visibility on faster asset turns
Market Opening:
Benchmark indices opened lower with the Sensex falling 234.77 points to 37,076.76 and the Nifty declining 74.20 points to 10,955.20.
CAR increases after QIP
Post QIP, bank's capital adequacy ratio increased to 16.2 percent and tier-I ratio increased to 11.3 percent and CET-I ratio to 8.6 percent, Yes Bank said.
Rupee Opening:
The Indian rupee opened at 71.36 against the US dollar, falling 9 paise compared to Wednesday's close of 71.27 a dollar.
Passenger Vehicles Production Falls
Passenger vehicles production in India was down 13.18 percent in April-July this fiscal with top manufacturers such as Maruti Suzuki, Mahindra & Mahindra, Tata Motors, Ford, Toyota and Honda reducing output massively. Hyundai Motor India Ltd (HMIL) and Volkswagen India were the only two main manufacturers which saw production grow marginally during the period, according to the latest data by the Society of Indian Automobile Manufacturers (SIAM).
Total Passenger vehicles (PV) production in the April-July period stood at 12,13,281 units as against 13,97,404 units in the same period last fiscal, down 13.18 per cent, SIAM said.
Market Outlook
Indian markets are expected to open marginally negative on the back of mixed global cues. Global economic growth and development on geopolitical tensions are expected to remain key monitorables ahead, ICICI direct said.
On August 14, domestic markets ended positive on the back of respite in US-China trade war concerns and soft wholesale inflation data. US markets ended mixed following mixed economic data releases.
PM Modi's Infrastructure Boost
In a speech on 73rd Independence Day, Prime Minister Narendra Modi said his government would invest a massive Rs 100 lakh crore on developing modern infrastructure that will aid in nearly doubling the size of the Indian economy to $5 trillion in the next five years.
Pre-opening Trade:
Benchmark indices were higher in pre-opening trade. The BSE Sensex was up 125.97 points at 37,437.50 and the Nifty50 fell 88.40 points to 10,941.