Sensex gains for 3rd day, Nifty ends above 11,100; Tata Motors climbs 9%
27 Aug 2019
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Rupee Closing
The Indian rupee closed at 71.48 against the US dollar on Tuesday, higher by 54 paise compared to Monday’s close of 72.02 a dollar.
Technical View
"On higher side index has strong resistance near 11,180 zone until trading below said levels we may see profit booking on every rise and any decisive breakout above 11,180 can push index towards 11,350 zone, support for index is coming near 11,000-10,960 zone," Rohit Singre, Senior Technical Analyst, LKP Securities said.
Technical Outlook
"In next trading session, if the Nifty sustains above 11,049 kinds of levels it can be expected to initially head towards 11,181 kinds of levels. Contrary to this a close below 11,049 may kick off profit booking as index swiftly added around 500 points in last three trading sessions from the lows of 10,637 but as tide tilted in favour of bulls traders are advised to adopt a buy on dips kind of strategy," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
Market Closing
Benchmark indices gained for third day in a row with the BSE Sensex rising 147.15 points to 37,641.27 on easing fiscal deficit worries after RBI decided to transfer Rs 1.76 lakh crore to government. The Nifty50 closed above 11,100 for first time since August 9 this year, up 47.50 points at 11,105.40.
The market breadth remained in favour of bulls throughout session as about two shares gained for every share falling on the BSE.
Market Volatile:
Benchmark indices continued to be volatile with a positive bias in late trade. The BSE Sensex was up 115.44 points at 37,609.56 and the Nifty50 climbed 40.50 points to 11,098.40.
Sensex near day's high:
Benchmark indices traded near day's high with the Sensex rising 206.06 points to 37,700.18 and the Nifty50 climbing 72.30 points to 11,130.20.
About two shares advanced for every share falling on the BSE.
Sensex Gains 150 pts:
Benchmark indices continued to trade in the green as the BSE Sensex rallied 154.14 points to 37,648.26 and the Nifty50 rose 57.90 points to 11,115.80.
About two shares advanced for every share falling on the BSE.
Strides Pharma Science To Stop trading in NSE Derivative Segment from Nov 1
"Members are requested to note that the contracts for new expiry months in the following security will not be issued on expiry of existing contract months. Accordingly, no contracts shall be available for trading in the above-mentioned security with effect from November 1, 2019," the exchange said in its circular.
The existing unexpired contracts of expiry months August 2019, September 2019 and October 2019 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months, it added.
Credit Rating
Tamilnadu Petroproducts said CRISIL reaffirmed its credit rating on company's long term bank facilities at BBB+ with stable outlook and upgraded its short term rating to A2 from A3+.
Monsoon Woes Continue for Cement
"After witnessing subdued demand in Q1FY20, we believe Q2FY20 will be another weak quarter, given Monsoon-led seasonality weakness. However, post monsoon recovery in demand at retail as well as institutional levels would drive demand growth for the sector in second half of FY20," Elara said.
The brokeage prefers firms with a higher presence in North & Central India and the Northeast (such as JK Lakshmi Cement, Heidelberg Cement, Prism Johnson and Star Cement), considering a better demand-supply scenario.
IndiGo AGM
IndiGo CEO Rahul Bhatia in company's AGM said Q2 is weak and Q3 will be strong. He expects the whole year to be good for the company. "We have a long way to go in value creation."
He said, "Not a single whistleblower complaint has come to the chairman till now. We have a robust whistleblower mechanism."
"Half of capacity growth will go in international and rest domestic. We are looking at A321XLR aircraft to expand range to reach new destinations," Bhatia added. (Reports CNBC-TV18)
Maruti Suzuki Cuts 3,000 Contract Jobs
Maruti Suzuki India Chairman RC Bhargava said the company had not renewed the contracts of 3,000 temporary employees, as the automaker battled rising inventory amid a slowdown in demand.
Safety norms and higher taxes have "added substantially" to the cost of cars, affecting their affordability, Bhargava told shareholders at the company's annual general meeting. (Source: PTI)
Nifty Holds 11,100:
Benchmark indices continued to trade higher. The BSE Sensex was up 139.40 points at 37,633.52 and the Nifty50 rose 55.30 points to 11,113.20.
About two shares advanced for every share falling on the BSE.
German Economy Contracts
Weaker exports were the main reason for Germany's shrinking economy in the second quarter, detailed data showed today, confirming a preliminary reading of a 0.1 percent contraction on the quarter.
The Federal Statistics Office said exports fell more strongly than imports from April to June which meant that net trade deducted 0.5 percentage points from overall economic expansion. (Source: Reuters)
Kotak on RBI transfer
Based on the Jalan Committee’s recommendation, the RBI will transfer Rs 52,600 crore as per the revised ECF.
"This is in addition to the surplus transfer of Rs 1.23 lakh crore (including Rs 28,000 crore of interim dividend for FY2019) in FY2020. The government will gain around Rs 58,000 crore from the RBI compared to FY2020 budget estimates. This will help to some extent in bridging an estimated Rs 1.5 lakh crore of shortfall in GST revenues even as the fiscal continues to be strained due to weak tax revenues," Kotak said.
Macquarie on Auto
Global brokerage Macquarie believes the steps will have a small positive impact on the near-term demand and the steps to improve liquidity and lower auto loan rates will benefit all segments.
Gold Prices Steady
Gold prices were largely steady, retreating from an over six-year peak hit in the previous session, as US President Donald Trump signalled a possible reconciliation with China, calming worries about an escalation in their trade war.
Gold prices on August 26 surged to their highest in more than six years, surpassing the $1,550 mark in early trade, before paring gains after Washington and Beijing indicated a possible thaw in their trade spat.
Nifty Holds 11,100:
Benchmark indices continued to trade higher for second consecutive day as the BSE Sensex was up 164.73 points at 37,658.85 and the Nifty50 climbed 62.40 points to 11,120.30.
About 1,389 shares advanced against 569 declining shares on the BSE.
SBI expects Q1FY20 GDP at 5.6% with a downward bias
"There is indeed evidence that economy is undergoing a slowdown. We believe the most crucial factor that is reinforcing is that rural wage growth (in real terms) is now barely expanding. Also, the weighted contribution of clothing (a non-discretionary item) in rural CPI has plunged from 39 bps in Jun’18 to almost zero in Jul’19. We also expect Q1FYGDP to be at 5.6 percent with a downward bias," Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI said.
He further said if we go beyond the macro picture interesting trends appear. "First, the auto sector slowdown in India is a part of the global crisis that is unfolding. Studies done in the sector show that Auto sales in Asia-Pacific are expected to fall 2-3.5 percent this year after declining roughly 1 percent in 2018. Second, it’s not all doom and gloom in the FMCG sector, where the volume growth decline of listed companies in Q1 FY20 in single digits is now being quoted universally to justify the abundance of growth slowdown," he explained.
Downside Risks for Infosys are Developed
"CY19 has seen earnings downgrades for Indian IT, a stark contrast to CY18. Infosys and Tech Mahindra have seen the sharpest cut in EPS estimates in CY19," Credit Suisse said
Cuts have been margin-led over the last two quarters and EPS estimates cut going forward is likely to be growth-led, it added.
The global brokerage said miss on earnings has led valuations of most stocks to correct over the past year. In case of Infosys, the downside risks are ripe, though the stock is trading at 52-week high, it added.
Concerns on global macro and client spending posed risks to growth estimates, hence the rupee weakness may not help much, said Credit Suisse which prefers HCL Technologies, Tech Mahindra and L&T Infotech.
Market Update:
Benchmark indices were off their day's high as the Sensex gained 74.10 points at 37,568.22 and the Nifty50 rose 31.10 points to 11,089.
The market breadth remained in favour bulls as about 2.5 shares gained for every share falling on the BSE.
HSBC Upgrades BHEL to Buy
HSBC said it continued to see near-term weakness in business fundamentals of state-owned power equipment maker BHEL.
But the brokerage house upgraded the stock to buy due to steep correction and balance sheet strength & long-term potential.
However, HSBC slashed price target to Rs 60 from Rs 62 per share after lowering earnings estimate by 1-5 percent on lowered order inflow expectations.
"Downside risks include a continued increase in receivables & lower margins," it said.
Citi downgrades NMDC
Citi downgraded NMDC to neutral from buy and also cut target price sharply to Rs 80 from Rs 120 per share earlier, saying uncertainty w.r.t mines can linger for long.
"The delay in the ruling leaves us with little confidence. Hence we lowered FY21 volume estimates as Chhattisgarh volumes may be disrupted for some time," it explained.
Future Lifestyle get shareholders nod to raise Rs 300 crore
Future Lifestyle Fashions has received shareholders' approval to raise Rs 300 crore by issuing equity shares to Apollo India Private Equity IV (Mauritius) on a preferential basis.
The company has received approval to issue 64.79 lakh equity shares of face value of Rs 2 each at an "issue price of Rs 463/- per Equity Share (including premium of Rs 461 per Equity Share) on preferential basis" to Apollo India, in an Extra ordinary general meeting held on August 26. (Source: PTI)
Market Opening:
Benchmark indices started off trade on a positive note with the Sensex rising 138.98 points to 37,633.10 and the Nifty climbing 44.70 points to 11,102.60.
Government to Get Big Amount from RBI
The Reserve Bank of India (RBI) will transfer a surplus of Rs 1.76 lakh crore to the government as it has approved the recommendations of Bimal Jalan committee at the central board meet held in Mumbai on August 26.
The transfer sum comprises of Rs 1.23 lakh crore of surplus for the financial year 2018-19 and Rs 52,637 crore of excess provisions identified under the revised Economic Capital Framework (ECF) that was adopted at the central board meet.
Asia Update
Asian stocks tracked global peers higher while safe-haven bonds sold off as signs Sino-US trade hostilities might be easing helped restore investor confidence after the previous session’s rout.
Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believe Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world’s two largest economies.
Japan's Nikkei and China's Shanghai Composite gained more than 1 percent.
Infosys board considers closure of Rs 8,260 crore buyback offer
IT major Infosys on August 26 said a board committee is considering closure of the Rs 8,260 crore buyback offer with the company utilising almost full size of the issue approved.
The company in January had announced that it would buy back shares of the company for an amount aggregating up to Rs 8,260 crore (maximum buyback size) at a price not exceeding Rs 800 per equity share.
Rupee Opening:
The Indian rupee opened sharply higher at 71.70 against the US dollar, up 32 paise compared to previous close on easing fiscal deficit concerns after RBI decided to give Rs 1.76 lakh crore to government.
Market Pre-Opening Trade:
Benchmark indices rallied smartly in pre-opening trade. The BSE Sensex was up 279.74 points at 37,773.86 and the Nifty50 rose 49.90 points to 11,107.80.
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," Mishra Vice President, Research at Religare Broking said.
Vadilal Industries will be in focus
CARE downgraded the credit rating of the company's long term bank facilities to BBB from BBB+, under credit watch with negative implications.
