Sensex climbs 793 points on relief measures, likely US-China trade talks
26 Aug 2019
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Market Outlook
"The recent volatility indicates excessive pessimism among the participants and we do not see this fading away anytime soon. Besides, we’ve scheduled derivatives expiry on Thursday i.e. on August 29 and that would further add to choppiness. We advise using further rebound to reduce longs as Nifty has strong hurdle at 11,250-11,300 zone," Ajit Mishra Vice President, Research, Religare Broking said.
Technical Outlook
"After a super volatile session index closed a day at 11,058 with strong gains of 229 points and formed bullish pin bar candle on daily chart. Index managed to close above strong hurdle of 11,000 mark hinting bulls are trying to grab a grip from lower end, now index has immediate hurdle near 11,100-11,180 zone any decisive break above 11,180 can push index towards 11,350 zone in near term and support for index is coming near 11,000-10,930 zone," Rohit Singre, Senior Technical Analyst, LKP Securities told Moneycontrol.
Fitch Ratings on Auto
"Subdued demand conditions that led to weak performance by Indian automakers in the first quarter of the financial year ending 31 March 2020 (FY20) will likely persist, adding to the challenges from the implementation of stricter emission norms under BS6 from April 2020, Fitch Ratings said.
Most auto OEMs reported lower volumes and profitability in QQFY20 as domestic sales volumes of passenger vehicles and medium and heavy commercial vehicles fell by 18.4 percent and 16.6%, respectively, according to the Society of Indian Automobile Manufacturers.
Market Closing:
Benchmark indices ended near day's high with the Sensex climbing nearly 800 points after FM announced several measures to boost economy and rollback of FPI surcharge. The likely talks between US and China over trade deal also boosted sentiment.
The BSE Sensex rallied 792.96 points or 2.16 percent to 37,494.12 and the Nifty50 jumped 228.50 points or 2.11 percent to 11,057.90 driven by gains across sectors barring Metals.
More than two shares advanced for every share falling on the BSE.
Market On Fire:
Benchmark indices continued to trade sharply higher with the Sensex rising 755.67 points or 2.06 percent to 37,456.83 and the Nifty50 rising 217.90 points or 2.01 percent to 11,047.30.
About two shares advanced for every share falling on the BSE.
Kharif Crop Sowing after Healthy Rainfall
As rainfall activity continued to be healthy during last week kharif crop sowing has inched closer towards 1,000 lakh hectare, Kotak Securities said.
As per ministry of Agriculture, total kharif crop acreage has crossed 975 lakh hactare as on August 23, which is down by 2.3 percent from corresponding period last year.
Rice (down 6 percent), Sugarcane (6%) and groundnut (down 4 percent) acreage has dwindled the most this season, Kotak said, adding interestingly castor sowing has picked up pace considerably since the beginning of the month and crossed 5 lakh hactare levels already, which is up by 44 percent from last year.
Buzzing: Shares of Capacite Infraprojects rose more than 11 percent intraday on August 26 after no irregularities found during the I-T search operation.
NCL Industries in JV with Chinese firm: Shares of NCL Industries rose 6 percent August 26 as company signed agreement with Chinese firm to establish a joint venture company with Qingdao Xinguangzheng Steel Structure Company China for manufacture of pre-engineered steel structure in India.
Buzzing: Share price of PVR added 2.5 percent on August 26 after National Company Law Tribunal at New Delhi has approved the scheme of amalgamation of SPI Cinemas, the transferor company with PVR, the transferee company effective from the appointed date of August 17, 2018.
Pritam Kumar Patnaik, Head Commodities, Reliance Commodities:
The US-China trade war with new tariff announcement has pushed gold and silver prices to a new six-year high as investors rushed for safe-have assets. Depreciating Indian rupee also helped the rise in prices. We expect the current trend to continue for gold and silver.
On the MCX, the Gold is likely to move towards 39,900 to 40,000 levels. Saying that 38,800 and 39,000 act as a strong crucial support levels for gold on the downside. Similarly we expect positive trend to continue for silver with prices expected to move higher towards 48,000 levels in coming days with 45,900 and 46,200 as support levels on downside.
Buzzing: Share price of Dynamatic Technologies surges more than 19 percent on August 26 after India Ratings changed its outlook change to positive from stable.
India Ratings & Research has revised the outlook to positive from stable while affirming its long-term issuer rating at IND BBB+.
Market Recovers:
Benchmark indices recovered from day's low to trade flat amid global fall. Finance Minister Nirmala Sitharaman's announcements to boost economy failed to revive market sentiment.
The BSE Sensex was down 1.56 points at 36,699.60 and the Nifty50 fell 14.30 points to 10,815.10 but the market breadth was in favour of bulls.
About three shares advanced for every two shares falling on the BSE.
Nomura Upgrades India
Japanese brokerage house Nomura upgraded its India rating to overweight, saying it is the time to raise allocation on positive local developments amid rising global uncertainty.
According to the research house, reform measures and sectoral incentives could provide a much needed booster shot for the economy. "We expect recovery in economic growth to 6.6 percent in second half of FY20 from 5.8 percent in first half," it said.
Indian market with less than average leverage to global growth could do relatively better, it feels.
Market Update: Benchmark indices erased all its morning gains and turns negative with Nifty around 10,750.
The Sensex is down 187.60 points at 36,513.56, while Nifty was down 68.10 points at 10,761.30. About 965 shares have advanced, 759 shares declined, and 73 shares are unchanged.
Gold Update: Gold touches over 6-year peak:##old touches over 6-year peak: Gold prices jumped to a fresh six-year high on Monday as the announcement of new tariffs in the escalating Sino-U.S. trade war sent equity markets tumbling, and investors rushing for safe-have assets, said Reuters.
Oil Update: Oil prices fell on Monday, pushing U.S. crude to its lowest in more than two weeks, as a ratcheting up of tensions in the US-China war knocked confidence in the global economy.
Market Opens: It is a strong start for the indices on August 26 on the back of stimulus measure announcement by the Finance Minister Nirmala Sitharaman on August 23.
At 09:16 hrs IST, the Sensex is up 355.21 points at 37,056.37, while Nifty is up 108.60 points at 10,938. About 683 shares have advanced, 113 shares declined, and 32 shares are unchanged.
HDFC, HDFC Bank, UCO Bank, Canara Bank, IndusInd Bank, Indiabulls Housing, Yes Bank, Adani Port, Eicher Motors , are among major gainers on the indices, while losers are Infosys, Tata Steel Vedanta, Hindalco and TCS.
Among sectors, except IT and metal all indices are trading in the green led by the PSU bank, auto, energy, infra and FMCG.
Jefferies India Strategy
Several measures announced for higher economic growth including a few for autos
Higher depreciation benefit is likely the most material but even this is at best a 5% benefit
No GST rate cuts a disappointment particularly for 2-wheelers
It was more of a sentiment positive than a material boost to auto demand
Scrappage policy is the next policy catalyst to watch for
Stay cautious overall with financials
Lower rates boost sentiment for industrials & discretionary
Macquarie on autos
Steps to improve liquidity & lower auto loan rates should benefit all segments
Higher depreciation rate & replacement of old vehicles by government departments will benefit CV & PV
Govt measures will have a small positive impact on the near-term demand
Mkt likely to be disappointed with steps taken by government, particularly 2-wheelers
Nomura on India Strategy
Upgrade India to overweight
Time to raise allocation on positive local developments amid rising global uncertainty
Reform measures & sectoral incentives could provide a much needed booster shot
Expect H2CY19 recovery in growth to 6.6% from 5.8% in H1
Indian mkt with less than average leverage to global growth could do relatively better
Top picks are ICICI Bank, ICICI Pru, L&T , SBI & CONCOR
Kotak Institutional Equities on India Strategy
Government’s measures will help improve market sentiment & demand to some extent
Absence of fiscal stimulus in the form of GST cuts may disappoint a section of mkt
Escalation in China-US trade issues to weigh on global investment sentiment
Government would do well to follow up the recent measures with structural reforms
CLSA on India Strategy
Government measures will improve investor sentiment & drive at least a short-term bounce
Government has given a clear signal that it acknowledges an eco slowdown
Eco outlook will depend on how big measures to boost housing turn out to be
Morgan Stanley on India Strategy
India's under performance YTD to EM may reverse in the weeks ahead
From a portfolio perspective, like financials, cons discretionary & industrials
Key risk is that our view on global equities is cautious
BNP Paribas on India Strategy
Government’s flexibility & focus on ensuring confidence-boosting measures a short-term postive
See Autos, PSU Bks, Housing Fin Cos & Infra reacting positively
December 2019 Sensex target is 40,500
Escalation in US-China trade tensions have turned more unfavourable
Credit Suisse on Cipla
Maintain neutral call, target cut to Rs 445 from Rs 515 per share
High competition in gVoltaren gel a key risk in near term
Cut FY20/FY21 EPS estimates by 10%/14%
Credit Suisse on Metropolis Health
Initiate coverage at neutral, target at Rs 1,000 per share
Superior growth vs peers is already priced in
Low entry barriers & ramp-up of epharmacies can impact growth
Market at pre-open: Benchmark indices are trading higher with Nifty above 11,100 level.
At 09:01 hrs IST, the Sensex is up 900.49 points or 2.45% at 37601.65, and the Nifty up 294.50 points or 2.72% at 11123.90.
SGX Nifty: Trends on SGX Nifty indicate a positive start for the broader indices in India, a gain of 73.50 points or 0.68 percent. Nifty futures were trading around 10,903-level on the Singaporean Exchange.
Wall Street ends mixed: The benchmark S&P 500 ended little changed on Thursday as a fall in US jobless claims offset data showing a contraction in US manufacturing activity while investors awaited Federal Reserve Chair Jerome Powell's speech on Friday for clues on the central bank's monetary policy.
Asian markets plunge: Asian shares sank on Monday as the latest salvo in the Sino-US trade war shook confidence in the world economy and sent investors steaming to the safe harbors of sovereign bonds and gold, while slugging emerging market currencies.
