Nifty ends August series below 10,950, Sensex falls 382 points; banks underperform
29 August 2019
Nagaraj Shetti – Technical & Derivative Analyst, HDFC securities:
Nifty slipped into a follow-through weakness today amidst a volatility and closed the day lower. We observe a formation of long bear candle, which is back to back for the second session. We also observe a formation of relatively smaller negative candles in the last couple of sessions, as compared to its previous decline from the resistance in the mid part of August month. This pattern indicates a weak trend, with a possibility of an upside bounce from the lower levels.
Technically, the short term trend of Nifty continues to be negative. But, there is a possibility of an upside bounce from the lower levels in the next 1-2 sessions. Immediate supports to be watched at 10,900-860 levels. A confirmation of an upside bounce is likely to pull Nifty towards the key overhead resistance of 11,150 levels in the near term.
Ajit Mishra, Vice President, Research, Religare Broking:
Nifty settled with a cut of over half a percent on the F&O expiry day, after failed attempts to cross hurdle at 11,150 in the last two sessions. It opened lower; tracking mixed global cues and remained range-bound thereafter. Volatility remained high especially in F&O counters due to unwinding and rollover of the positions, while the broader indices remained under pressure.
In the absence of any major domestic event, global cues will continue to dictate the market trend. Indications are in the favour of further consolidation in Nifty thus traders should focus more on stocks selection and trade management.
Market Close: Benchmark indices remained volatile ahead of August F&O expiry with Nifty ended below 10,950 level.
At close, the Sensex was down 382.91 points at 37,068.93, while Nifty was down 97.80 points at 10,948.30. About 906 shares have advanced, 1550 shares declined, and 154 shares are unchanged.
SBI, HDFC, Yes Bank, Axis Bank and Kotak Mahindra Bank were among top losers on the Nifty, while gainers were Sun Pharma, Bharti Infratel, Vedanta, JSW Steel and NTPC.
Among sectors, bank, FMCG and Auto witnessed selling pressure, while pharma, metal and infra ended higher.
Gold Update: Gold prices eked out gains on Thursday as recession fears dented risk sentiment, with traders tracking the latest on a bruising U.S.-China trade war as well as global central banks for direction on interest rates.
The benchmark indices are trading at day's low level ahead of August F&O expiry with Nifty below 10,950.
The Sensex is down 418.03 points or 1.12% at 37,033.81, while Nifty is down 108.90 points at 10,937.20. About 805 shares have advanced, 1521 shares declined, and 142 shares are unchanged.
Rupee recovers: The Indian rupee has recovered from the low and trading flat at 71.77 per dollar. It touched a low 72.08 per dollar during the day.
Spring Fields Infra touches 52-week high: Spring Fields Infraventure locked at 5 percent upper circuit as company received purchase order worth Rs 1.93 crore from G Narayanamma Institute of Technology & Science, G Pulla Reddy Degree and PG College, and G Pulla Reddy Engineering College.
ONGC set up euro medium term note programme of USD 2bn:
Oil and Natural Gas Corporation has set up a euro medium term note (EMTN) programme of USD 2 billion which will be listed on Singapore Stock Exchange.
An EMTN Programme is an uncommitted facility and any drawdown thereof under this document would be subject to funding requirements.
Buzzing: Muthoot Finance employees unable to open branches due to threats or forcible closure. Staff is being threatened for life if they open branches in Kerala.
Out of 623 branches in Kerala, only 265 were open for transaction today. Stock down more than 2 percent.
Buzzing: Share price of JMC Projects declined 5 percent on August 29 after its parent company received a notice from the World Bank.
The company's holding company Kalpataru Power Transmission (KPTL) has received a notice from the World Bank alleging process violations in bids submitted by its transmission business on two projects in Africa more than 7 years ago, as per company release.
Granules India to divest its stake in JV:
Granules India announced its intention to divest its entire equity shareholding in Granules OmniChem (GOC) by selling its stake to its joint venture partner.
GOC is an equal joint venture between Granules lndia and S.A. Ajinomoto Omnichem N.V., an integrated contract development and manufacturing organization.
The manufacturing facility of this joint venture entity is located in Visakhapatnam, India.
Market slips further:
Benchmark indices extended the losses and trading at day's low level with Nifty below 10,950.
The Sensex is down 358.91 points at 37092.93, while Nifty is down 105.20 points at 10940.90. About 651 shares have advanced, 1334 shares declined, and 110 shares are unchanged.
Yes Bank falls for 2nd day in a row: Shares of Yes Bank continued their downward march for the second straight session after the stock cracked over 7 percent on August 29.
The stock, which has been on a bumpy track of late, came under fresh pressure on August 28 after rating agency Moody's downgraded its credit rating with a negative outlook, citing lower-than-expected capital raising.
Romesh Tiwari, Head of Research, CapitalAim:
YES Bank witnessed a selloff on Wednesday after Moody's downgraded lender's credit rating with a negative outlook, citing lower-than-expected capital raising.
The stock has been falling for some time now and hit a fresh lifetime low at Rs 53.2 on 22 August last week. On the charts, it is weak with RSI placed at 37.2 and with negative divergence indication by MACD is not encouraging for buyers.
But, with STOCHRSI(14) is indicating it to be in the oversold zone, and the high volatility witnessed in the recent past makes it a risky stock to short at these levels. I would suggest short-term traders to avoid this for now.
Crude Update: Oil prices fell on Thursday for the first time in three days after San Francisco Federal Reserve President Mary Daly sounded a note of concern about the strength of US economy.
Benchmark indices are trading lower on August 29 with Nifty below 11,000 led by the selling in the IT, infra, auto and banking stocks.
The Sensex is down 197.80 points at 37,254.04, while Nifty is down 57.10 points or 0.52% at 10,989. About 735 shares have advanced, 849 shares declined, and 77 shares are unchanged.
Buzzing: Shares of Lakshmi Vilas Bank locked at 5 percent lower circuit on August 29 after resignation of company's managing director and chief executive officer.
Market Opens: It is a weak start for the Indian indices on August 29 with Nifty below 11,000 level.
The Sensex is down 151.90 points or 0.41% at 37299.94, while the Nifty is down 47.60 points or 0.43% at 10998.50. About 286 shares have advanced, 489 shares declined, and 28 shares are unchanged.
Indiabulls Housing, Balrampur Chini, Dwarikesh Sugar, Dhampur Sugar, Yes Bank, JSW Steel, Tata Steel, Coal India, ICIC Bank, Cipla, Power Grid, DRL, Sun Pharma are among major gainers on the indices, while losers are Wipro, Lakshmi Vilkas Bank, TCS, Infosys, DHFL, Coffee Day, JMC projects, Wockhardt and Piramal Enterprises and Redington.
Among sectors, except pharma all other indices are trading lower led by the metal, bank, IT, infra, FMCG and energy.
Rupee Opens lower: The Indian rupee opened lower by 14 paise at 71.90 per dollar on Thursday versus previous close 71.77.
Market at pre-open: Benchmark indices are trading mixed in the pre-opening session on August 29.
At 09:02 hrs IST, the Sensex is up 16.75 points or 0.04% at 37468.59, and the Nifty down 46 points or 0.42% at 11000.10.
Market at pre-open: Benchmark indices are trading mixed in the pre-opening session on August 29.
At 09:02 hrs IST, the Sensex is up 16.75 points or 0.04% at 37468.59, and the Nifty down 46.00 points or 0.42% at 11000.10.
Gold Update: Gold eased on Wednesday as the US dollar strengthened and as investors locked in profit following a more than 1% jump in the last session, but uncertainty over the US-China trade dispute and the global economy kept safe-haven bullion near a multi-year peak, reported Reuters.
Jefferies on SBI
Maintain buy rating with a target of Rs 370 per share
Valuations are below historical average & attractive
Expect co to grow its market share but perhaps at lower NIM & fee
Credit Suisse on IndiGo
Outperform rating, target at Rs 1,900 per share
Several factors can drive further upside
Flat industry capacity & strong yields should help
HSBC on Grasim
Maintain buy, target cut to Rs 790 from Rs 910 per share
Softening prices & mkt cap erosion for Idea widens holdco disc to 75%
Despite price weakness, 1Q results were resilient
Citi on Polycabs
Initiate at buy, target at Rs 736 per share
Target supported by an EPS CAGR of 15% over FY19-21
Expect RoE of 18% over FY19-21.
Morgan Stanley on Oberoi Realty
Overweight call, target at Rs 633 per share
Share price will rise in absolute terms over the next 60 days
Short-term valuation much more compelling
Morgan Stanley on RBL Bank
Underweight call, target at Rs 400 per share
Underweight rating driven by concerns about asset quality
Key to track would be clarity on & timing of capital raising
Citi on India Equity Strategy
Market sentiment has turned quite bearish in the past few months
Extent of negativity suggests downside is limited, but no upside catalysts in sight
Maintain our March 2020 Sensex target at 39,000
India premium to EM is now at 45% (near the 10-year mean of 40%)
Overweight on financials, healthcare, cement
Underweight on consumer (Staples, Auto) & commodities (Energy, Metals)
CLSA on India strategy
Weak activity trends in July; Government, RBI action could help
Contraction deepened in auto volumes, credit growth weakened
Small positives were steady petrol consumption growth, improved monsoon rainfall
Surplus liquidity gradually driving rate transmission
Government seems to be adopting a more interventionist approach to revive growth
RBI helping on the monetary & fiscal sides can be a good support
Sustained improvement in housing could drive economic revival
UBS India Strategy
Domestic pull & global push factors for FDI flow to India remain favourable
Gross FDI flow to pick up from 1.6% in FY19 to 2.5% of GDP over 5 years
Expect further cuts ahead for FY20 nifty earnings
Nifty December 2019 target is 11,000
Upside/downside scenario of 12,400/9,400, implying unattractive risk-reward
Earnings risks are still skewed to the downside
Expect a ‘narrow’ market & remain UW on small/midcaps, autos & non-banks
Given the scale of China's manufacturing, India's scale gives it an edge to gain from a shift
Morgan Stanley on Cement
Expect industry demand growth to slow to 4% in FY20
Utilisation to fall YoY & prices to correct over coming quarters
Valuations could find support because of better relative profitability
Risk-reward appears favourable for UltraTech
Bond yields near record lows: Global bond yields flirted with record low levels while stocks struggled to recover on Thursday as economic turbulence from intensifying US China frictions and the spectre of a no-deal Brexit drove investors to safer harbours, reported Reuters.
Wall Street ends higher: US stocks climbed on Wednesday, recovering from early declines on gains in energy and financial shares, but investors remained leery about the potential for another flare-up in the US-China trade war, reported Reuters.
SGX Nifty: Trends on SGX Nifty indicate a negative opening for the broader indices in India, a fall of 33 points or 0.33 percent. Nifty futures were trading around 11,015-level on the Singaporean Exchange.