Sensex up 263 points ahead of FM presser


Impact of Merger on PSU Banks

"By consolidating 10 major banks into 4 and bringing the total count of PSB to 12 will help in credit up tick and will help revive the economy. Diligence in selection of entities, regional inclusion, usage of technological platform, NPA’s and allocation of funds to these entities will make sure of availability of liquidity in the system. Moreover, it will help these merged entities to aspire to be competitive on account of their All India presence besides cutting down on duplication of overheads," Rajiv Singh, CEO, Karvy Stock Broking said.
"Recruitment of chief risk officers and linking their performance will bridge the discount in valuations between private and public banks. Encouragement of individual development plan will ensure smooth transition and succession plans for these merged entities which will also ensure proper functioning of these banks. She has commented that after Asset Quality review framework from RBI loan recoveries have improved over last one year which will help bring down NPAs," he added.
Analyst View on PSB Merger
"The banking sector is one of the major beneficiaries. The Public sector banks consolidation was majorly needed and with banks number coming down from 27 to 12 is a major reform. The integration will provide further liquidity and help in organic growth. Since we have had a long time hearing of Bank's NPA this move will make sure the consolidation brings synergy in banking space," Mustafa Nadeem CEO Epic Research said.
"The risk management committee is going to further transparency to bank's balance sheet and its health. The aim is focused on two points. firstly the growth, as many of the banks are in profit but there are constraints on capital. So this may address some leaks that re aiding to a liquidity crisis in the medium term to long term.  We believe the major benefit will be to banking space. Post that we believe NBFC and other allied spaces should get ripple effects out of it," he added.
Stock Call
"We continue to remain positive for long term on JSW Steel and maintain buy rating on the stock with a revised target price of Rs 283 per share," Anand Rathi said.
JSW Steel has reported a de growth of 3.4 percent in its consolidated revenues at Rs 19,812 crore in Q1-FY20 as against Rs 20,519 crore in same quarter previous year. The decline was mainly driven by subdued domestic market demand and a weaker sentiment as reflected in slow automotive and consumer durables momentum leading to lower volumes and inventory buildup.
PSU Bank Recapitalisation Money Allocation
Punjab National Bank will get approximately Rs 16,000 crore, Union Bank of India Rs 11,700 crore, Bank of Baroda Rs 7,000 crore, Canara Bank Rs 6,500 crore and Indian Bank Rs 2,500 crore, FM said.
Indian Overseas Bank will also get approximately Rs 3,800 crore, Central Bank of India Rs 3,300 crore, UCO Bank Rs 2,100 crore, United Bank of India Rs 1,600 crore and Punjab & Sind Bank Rs 750 crore, she added. The total is around Rs 55,250 crore.
Technical View
"Nifty index has support near 10,950-10,880 levels, if it holds above these levels we may see index to march towards 11,200 levels," Rohit Singre, Senior Technical Analyst, LKP Securities said.
Merger Plan
Government will amalgamate 10 PSU banks into 4 entities and total 27 PSBs in 2017 brought down to 12 banks, said FM.
Bank of India (business size Rs 9.03 lakh crore), Central Bank of India (Rs 4.68 lakh crore), Indian Overseas Bank (Rs 3.75 lakh crore), UCO Bank (Rs 3.17 lakh crore), Bank of Maharashtra (Rs 2.34 lakh crore) and Punjab & Sind Bank (Rs 1.71 lakh crore) will continue with their business.
PSB Merger Plan
Canara Bank: Syndicate Bank to be merged into Canara Bank, to become fourth largest public sector lender with business of Rs 15.20 lakh crore.
Union Bank of India: Corporate Bank and Andhra Bank to be merged into Union Bank, to become 5th largest PSB with Rs 14.59 lakh crore business.
Indian Bank and Allahabad Bank: Both banks will be merged with total business size of Rs 8.08 lakh crore.
PSB Merger Plan
Oriental Bank of Commerce and United Bank of India will be merged into Punjab National Bank, to become second largest public sector lender with Rs 17.95 lakh crore business, Finance Minister Nirmala Sitharaman said.
Technical View
Nifty index remained highly volatile throughout the session and traded in wider range of 150 points. It drifted towards 10,880 levels in first half of the day but recovered sharply from lower zones to extend its gains towards 11,040 levels and managed to close above 11,000 levels.
"It formed a Hammer candle on daily scale. Now it has to continue to hold above 11,000 levels to witness an upmove towards 11,111 then 11,141 levels while on the downside supports are seen at 10,950 then 10,880 levels," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Market Outlook
"The market will react to GDP data and outcome of the FM conference, which is scheduled post-market today. We reiterate our positive yet cautious view on markets and suggest focusing on stock selection," Ajit Mishra Vice President, Research, Religare Broking said.
Market Close: Benchmark indices ended the volatile session on the higher note on the first day of the September series with Nifty above 11,000.
At close, the Sensex was up 263.86 points at 37,332.79, while Nifty was up 85.60 points at 11,033.90. About 1384 shares have advanced, 1122 shares declined, and 166 shares are unchanged. 
Bharti Infratel, Coal India, Power Grid, Eicher Motors and ONGC were among major losers on the Nifty, while gainers were Yes Bank, Sun Pharma, IndusInd Bank, Zee Entertainment and Tata Steel.
Among sectors, except energy and infra, other indices ended higher led by the pharma, metal, PSU banks, auto, FMCG and IT.
Market Update:
Benchmark indices are trading higher in the afternoon trade on August 30 with Nifty near 11,000 ahead of GDP data and government announcement on PSB consolidation plan.
The Sensex is up 129.32 points at 37,198.25, while Nifty is up 32.30 points at 10,980.60.  About 1202 shares have advanced, 1082 shares declined, and 124 shares are unchanged. 
TTK Prestige subsidiary to acquire biz of Ecolife International:
Horwood Homewares, subsidiary of TTK Prestige is entering into definitive agreements for acquisition of the business of Ecolife International Pty, an Australian outfit trading under the brand EcoSoullife.
On completion of legal formalities Horwood will own 51% of a new subsidiary which will house the Ecolife business.
Market Update:
Indian indices erased all its morning gains and trading at day's low level with Nifty below 11,000 mark
The Sensex is down 199.49 points at 36869.44, while Nifty is down 58.80 points at 10889.50. About 966 shares have advanced, 1011 shares declined, and 90 shares are unchanged. 
Wipro expands partnership with Google Cloud: Shares of Wipro added 1 percent on August 30 after company expanded its strategic partnership with Google Cloud to accelerate cloud adoption and digital transformation for global enterprises.
Premier Explosives gets license: 
The company has received the license from chief controller of explosives, Nagpur for manufacture of solid propellant at its factory situated at Katepally, near Hyderabad, company said in BSE release.
This new license will enable the company to manufacture solid propellants of larger size at our greenfield project.
Morgan Stanley on Reliance Industries
Overweight call, target at Rs 1,349 per share
Recovery oil-to-chemical business is getting more evident 
Refining margin has risen as we approach IMO with diesel showing strength 
CLSA on Dr Reddy's Laboratories
Buy call, target cut to Rs 3,200 from Rs 3,330 per share
Earnings trajectory could become more predictable 
FY20-22 EPS estimates cut by 2-4%
Citi on Maruti Suzuki
Buy call, target at Rs 7,400 per share
Previous assumptions looked too optimistic 
EPS estimates are 6-10% below consensus for FY20-22
Morgan Stanley on Sun Pharma
Overweight call, target at Rs 505 per share
Morgan Stanley on Shree Cement
Equal-weight rating, target at Rs 19,270 per share
Believe share price will fall relative to industry over the next 60 days
Expect volume growth to slow down to low single digits in FY20
Morgan Stanley on UltraTech Cement
Overweight rating, target at Rs 4,760 per share
Believe share price will rise relative to industry over the next 60 days
Well positioned to benefit whenever industry sees a recovery
Morgan Stanley on Dalmia Bharat
Equal-weight rating, target at Rs 945 per share
Believe share price will fall relative to industry over the next 60 days
See downside risk to earnings, given the sharp correction in cement prices
Morgan Stanley on SBI
CUT EPS estimate by 30% & 17% for FY20-21
Co has corrected as concerns on credit costs have picked up
It has been a key lender in some of recent defaults, driving us to lift credit costs 
Morgan Stanley on Axis Bank 
Overweight call, target cut to Rs 975 from Rs 1,100 per share
Cut FY20 & FY21 EPS estimates by 8% & 10% respectively
Co should see some rise in bad loans & credit costs 
CLSA on Autos
Expect auto cos under our coverage to report weak wholesale volumes for August
Expect 6- 10% YoY declines for Bajaj, Mahindra & TVS
Expect 13-16% fall in volumes for Hero & Eicher (Royal Enfield)
Ashok, Maruti & Tata Motors may report a decline of 24-28% 
JLR wholesale volumes expected to decline 2% YoY
PNC Infratech rises 4% on project win:
Shares of PNC Infratech advanced 4 percent on August 30 after company has been declared the lowest bidder for National Highways Authority of India’s project of construction of 31.7 km long four lane bypass connecting NH-56 at km 17.400 and terminating near Behta Village Road under NHDP Phase-VII on EPC mode for a quoted price of Rs 1062 crore.
Market Update:
Benchmark indices extended morning gains with Nifty trading above 11,000.
The Sensex is up 219.17 points at 37288.10, while Nifty is up 65.50 points at 11013.80. About 974 shares have advanced, 404 shares declined, and 45 shares are unchanged. 
L&T bags order from THDC India: L&T-MHPS Boilers, a joint venture company of L&T and Mitsubishi Hitachi Power Systems of Japan, has secured a large order from THDC India, which is a joint venture of Government of India and Government of Uttar Pradesh. 
Adani Green Energy gains 10%: Share price of Adani Green Energy added more than 10 percent in the early trade on August 30 after company is going to acquire 205 MW operating solar assets of Essel Green Energy.
Market Opens: It is a positive start for the Indian indices on August 30 with Nifty around 11,000 level.
At 09:16 hrs IST, the Sensex is up 173.59 points or 0.47% at 37242.52, and the Nifty up 48.50 points or 0.44% at 10996.80. About 364 shares have advanced, 146 shares declined, and 22 shares are unchanged. 
JSW Steel, Vedanta, Tata Motors, Indiabulls Housing, Adani Green Gruh Finance, Power Grid, Yes Bank, Bajaj Finserv, Hero Moto, ITC are among major gainers on the indices in the early trade, while losers are Bharti Infratel, HCL Tech, Coal India, Cipla, BPCL and Sun Pharma.
Among sectors, except pharma and IT, other indices are trading higher led by the FMCG, metal, auto and infra
Rupee Opens: The Indian rupee opened flat at 71.78 per dollar on Friday versus Thursday's close 71.80.
Market at pre-open: Benchmark indices are trading higher in the pre-opening trade with Nifty above 10,950.
At 09:01 hrs IST, the Sensex is up 138.29 points or 0.37% at 37207.22, and the Nifty up 36.80 points or 0.34% at 10985.10.
Crude Update: Oil prices eased on Friday after three days of gains, with concerns about the state of the global economy amid the US-China trade war keeping prices in check.
Gold Update: Gold fell on Thursday as the dollar rose and stock markets gained confidence with the latest positive development in the US-China trade deal, but concerns over decelerating global economy kept prices hemmed near a multiyear peak.
Asian markets trade higher: Asian shares ticked higher on Friday as China struck a hopeful tone on trade with the United States but continued fears about a global growth slowdown, or even a recession, capped sharp rallies.
SGX Nifty: Trends on SGX Nifty indicate a flat opening for the broader indices in India, a fall of 16.50 points or 0.15 percent. Nifty futures were trading around 10,991.50-level on the Singaporean Exchange.
Wall Street ends higher: US stocks rallied more than 1% on Thursday, buoyed by gains in the trade-sensitive technology and industrial sectors as China expressed hope on trade negotiations with the United States, easing concerns that rising tensions could stoke a recession.