Sensex falls 167 points, Nifty ends below 11,000; RIL, IT, auto stocks drag

CNBC

Market Outlook

"Market had done well in the last one-week and bounced back from the oversold region which was heavily impacted last month by poor economic data. Today it is waiting for the next set of updated data to understand whether the worst for the economy is over or if this slowdown will continue in the short-term. The outlook on these upcoming data is weak which is likely to be supported by more rate cut by RBI in the next month’s policy meet," Vinod Nair, Head of Research, Geojit Financial Services said.
Technical View
"The index has formed a probable inverse Head & Shoulder pattern and has its neckline at 11,150 levels. There will be support around the 10,850-10,800 levels which is likely to act as a cushion on the lower side in case of a decline," Manav Chopra, CMT, Head Research - Equity, Indiabulls Ventures said.
"Nifty has been witnessing consolidation since past few sessions but market breadth continues to remain on the positive side. Undertone is positive and the index should head up going forward. We expect the index to test 11,300-11,500 zone on the upside and we continue to remain bullish on the indices," he added.
Gold View
"Gold prices after making six-year high in international market shows some correction from the high levels. Even in domestic market after touching life time high around Rs 40,000 per 10 gm are corrected around Rs 2,000. Withdrawal of extradition bill from Hong Kong by China, hopes of resumption of US-China trade talk and strength in rupee puts pressure on prices," Manoj Jain, Director & Head of Commodities, IndiaNivesh Securities said.
He expects gold future at Comex division to test crucial support of $1,480 an ounce before any further upside move. In domestic market gold is expected to test Rs 37,500, he said, adding however, long term trend of gold is still bullish due to Brexit worry, global economic slowdown and currency war.
Today's ECB meeting outcome will give further direction to the prices, he said.
Nifty Ends Below 11,000:
Benchmark indices ended lower after five-day gains. The BSE Sensex was down 166.54 points at 37,104.28 and the Nifty fell 52.90 points to 10,982.80, but the market breadth was positive.
About 1,346 shares advanced against 1,112 declining shares on the BSE.
Khadim India gains over 30% in two days
Shares of Khadim India have seen huge buying interest for the second consecutive session on September 12 after the company announced opening up of an arm in Bangladesh. This incidentally coincides with the resignation of independent director.
Khadim has incorporated a wholly owned subsidiary in Bangladesh in the name of "Khadim Shoe Bangladesh Limited", to expand existing line of business activities in Bangladesh.
Expect some economic recovery next year: 
HSBC has downgraded India's economic growth forecast to 5.7 percent in the fiscal year 2019-2020 and 6.4 percent in the FY21 after the nation's first-quarter GDP growth slumped to 5 percent. Pranjul Bhandari, HSBC's chief India economist, said the situation has not really changed in the first two months of the second quarter since last quarter.
"When we look at July and August, the next 2 months of the new quarter, things are not vastly improved; there are some improvements in services so Purchasing Managers' Index (PMI) services is up, bank credit for personal loans is up, some government spending has picked up," she said in an interview to CNBC-TV18.
"However, there is a lot of stuff which is not picking up; PMI manufacturing has come in lower, PMI core prices are lower, banks loans to industrial credit is lower. So we are not seeing much improvement and if you factor all of this in, it will be tough to see growth to be much higher than 5.7 percent in FY20 and that’s why we had to bring it down," Bhandari added.
Rupee continues to rise against dollar, IT stocks down
The rupee continued its rally against the US dollar on September 12, rising to one-month high of 71.27 against the dollar. The Indian currency had dropped to its year's low of 72.40 last week.
A strong rupee pushed IT stocks in the red. The Nifty IT was down close to a percent in the afternoon session. Oracle Financial Services, which shed 2 percent, followed by Tata Consultancy Services, Wipro and Mindtree were among the top losers.
From the BSE IT space, 3i Infotech slumped more than 4 percent, followed by Genesys International down 4 percent and D-Link India down 2 percent. Other big losers included, L&T Infotech, Trigyn Tech and Zensar Technologies.
Market Rangebound:
Benchmark indices remained rangebound in afternoon with the Nifty holding 11,000 levels as traders turned cautious ahead of European Central Bank's policy meeting later in the day.
The BSE Sensex was down 13.72 points at 37,257.10 and the Nifty50 fell 11.20 points to 11,024.50, but the market breadth was positive.
About 1,344 shares advanced against 950 declining shares on the BSE.
European Markets Trade Higher
France's CAC, Germany's DAX and Britain's FTSE gained 0.2-0.4 percent on delay in tariffs on Chinese goods by US and hope of stimulus from ECB.
Paper stocks in Limelight
Balkrishna Paper Mills, Ballarpur Industries, Emami Paper, Genus Paper, Malu Paper, Pudumjee Paper, Star Paper etc gained 5-14 percent.
Tata Power Gains 3%
Citi has a buy call on Tata Power with a target price at Rs 76 per share as it does not expect consent on Mundra UMPP before Maharashtra and Haryana elections.
For tariff hike, approval from all the five states is necessary.
At current coal prices, the tariff hike could be Rs 0.40-0.50 per unit, Citi said, adding Tata Power expects Indonesian mining licence that expires in 2022 to be renewed.
No GST rate cut needed for automobiles: Rajiv Bajaj
The automobile sector does not need a goods and services tax (GST) rate cut, Rajiv Bajaj, the managing director of Bajaj Motors, told The Economic Times. The GST Council will meet on September 20 and decide on a rate cut for automobiles, currently at 28 percent.
“Every industry has its up and down cycles. It may take a year, maybe two, for it to correct,” Bajaj told the publication. “Nobody knows how long this will last, but it certainly doesn't deserve a GST cut.”
Greenlam Industries jumps 7% on expansion of laminates manufacturing capacity
Shares of Greenlam Industries rallied 7 percent intraday on September 12 after the manufacturing capacity of laminates was expanded.
The company expanded its manufacturing capacity of laminates at Nalagarh unit, Himachal Pradesh, to manufacture additional 1.6 million laminates sheets per annum. Now the expanded capacity is operational, it said.
Greenlam said the expansion has the potential to generate revenue of Rs 125 crore per annum on full capacity utilisation.
Greenlam Industries Jumps 7%
Shares of Greenlam Industries rallied 7 percent intraday after the expansion of manufacturing capacity of laminates.
Company expanded its manufacturing capacity of laminates at Nalagarh unit, Himachal Pradesh, to manufacture additional 1.6 million laminates sheets per annum.
Now the expanded capacity is operational, it said.
With this expansion, the installed capacity for laminates has become 15.62 million laminate sheets per annum, it added.
Gold Prices Fall
Gold prices dipped as hopes for a thaw in the US-China trade tensions lifted risk appetite, while some investors booked profits ahead of a meeting by the European Central Bank.
US gold futures fell 0.1 percent to $1,501.70 per ounce.
The United States on Wednesday agreed to delay increasing tariffs on $250 billion worth of Chinese imports to October 15 from October 1 "as a gesture of good will." (Source: Reuters).
Rupee Update:
The Indian rupee appreciated by 29 paise to 71.37 against the US dollar as gains in domestic equity market and fresh foreign fund inflows strengthened investor sentiments.
Forex traders said Trump delaying the increase in Chinese tariff by 15 days enthused investors.
US President Donald Trump has announced the delay of his proposed  massive increase in Chinese import tariffs by 15 days.
Mindtree Survey
Mindtree said it revealed the findings of its recent survey of AI usage across enterprises.
The study found most businesses are well underway with AI experimentation, but many still lack an understanding of the use cases to deliver business value and the data infrastructures for making AI a success across the enterprise on a sustainable basis, it added.
The survey, which gathered data from 650 global IT leaders from key business markets, found 85 percent of organisations have a data strategy and 77 percent have implemented some AI-related technologies in the workplace, with 31 percent already seeing major business value from their AI efforts, company said.
Analyst Worried About GDP Growth
Pranjul Bhandari, Chief India Economist at HSBC told CNBC-TV18 that it will be tough to see GDP much higher than 5.7 percent in FY20, but expects some recovery next year.
The Reserve Bank of India reduced its GDP growth forecast to 6.9 percent for current financial year from 7 percent earlier.
Pranjul expects 70 bps recovery next year with GDP at 6.4 percent in FY21. "We expect recovery to be led by low base and genuine recovery in banks. A lot of policy action has been focussed on banks. We are not seeing a pick up in private consumption numbers," she explained.
After seeing 110 bps of repo rate cut already, she expects rate cuts of another 50 bps in coming policy meetings.
Offer For Sale Opens
Shares of SBI Life Insurance Company fell 1.6 percent intraday after the two-day offer for sale to sell stake by SBI opened.
The insurance company, on September 11, said State Bank of India proposed to sell up to 3.5 crore equity shares (representing 3.50 percent of the total paid-up equity) on September 12-13.
Alkem Labs Gains
Shares of Alkem Laboratories gained a percent intraday after receiving Establishment Inspection Report for its US manufacturing facility.
The US Food and Drug Administration had inspected company's facility at St. Louis in USA during August 16-22, 2019. On August 23, company said it had received a Form 483 with four observations.
Alkem, on September 11, informed exchanges that US FDA has issued an Establishment Inspection Report (EIR) for its manufacturing facility located at St. Louis, Fenton Logistics Park, USA.
Market Outlook
Sanjay Dutt of Quantum Securities in an interview to CNBC-TV18 said broader market has bounced back from oversold levels seen last week and the market is expecting consolidation before moving higher.
Steps by government for PSU banks are short term and need to see more radical changes, he said, adding there is a big valuation mismatch between PSU and private sector banks.
At current levels, PSU banks could give a favourable risk-reward return, according to him.
He expects metal space to look up in the coming months as government action has been supportive for metal companies.
He said he would allocate less capital to underweight defensives like IT and pharma sectors, but he would advise investors to continue with SIPs.
Walchandnagar Industries Climbs 12%
Shares of Walchandnagar Industries rallied more than 12 percent intraday after bagging a contract from Indian Space Research Organization.
Walchandnagar Industries (WIL) in its BSE filing said it secured an order worth Rs 77.20 crore plus escalation from the Vikram Sarabhai Space Centre of ISRO located at Thiruvananthapuram.
The order istowards manufacturing and supply of head, middle and nozzle end segments (total 30 numbers) for the GSLV M KIII launch vehicle, it added.
Technical View
"Looking at the outperformance in midcap space along with Bank Nifty we sense the optimism is likely to continue and we are likely to retest 11,100-11,180 mark soon. On the flip side, the immediate supports for the index are placed around 10,950 and 10,880," Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking said.
Traders are advised to trade with a positive bias and to continue to focus on mid-cap space which are outperforming in percentage terms, he added.
Govt should bring trade margin rationalisation for medical devices sector: 
The medical devices sector wants the government to bring in the trade margin rationalisation for its products, as the industry also looks for a single regulatory authority, according to the medical technology division of the CII.
"We want sanity in trade margins for the medical devices sector, which should be between 40 to 60 per cent for the entire supply chain, that is from the first point of sale to the end user," CII Medical Technology Division Chairman Himanshu Baid told reporters on Wednesday here.
Govt ask banks to approach NCLT as last resort
The government asked banks to put in all efforts to resolve bad loans themselves and approach National Company Law Tribunal (NCLT) only in the absence of any alternative.
Minister of State for Finance and Corporate Affairs Anurag Thakur said NCLT route should not be used by bankers to resolving stressed accounts on a daily basis.
"I would request bankers to try and resolve stressed assets in the right earnest and refer cases to NCLT only if satisfied resolution outside the NCLT process is not available," Thakur said at the 72nd annual general meeting of Indian Banks' Association (IBA).
Schneider Electric hopes to complete Rs 14,000 cr L&T deal by early 2020
Schneider Electric expects to complete the Rs 14,000 crore acquisition of Larsen & Toubro's electrical and automation business by early 2020, its India head Anil Chaudhry said on September 11.
In May last year, Schneider Electric, a global player in energy management and automation, together with Singapore's state investment firm Temasek Holdings had announced an all-cash buyout of L&T's electrical and automation business.
"We expect the deal to close in the next few months... maybe end of the year or early next year," said Chaudhry, zone president and managing director of Schneider Electric India Pvt Ltd.
SBI to raise Rs 3,465 cr by selling up to 4.5% in SBI Life
SBI said it will raise up to Rs 3,465 crore by offloading up to 4.5 percent stake in SBI Life Insurance Co to bring down the promoter shareholding as per regulatory norms. The share sale process consists of a base issue of selling up to 3.5 percent with an option to additionally sell up to 1 percent of the total issued and paid up equity share of SBI Life.
The floor price for the share sale has been fixed at Rs 770 per equity share.
Asian stocks rise on hopes for US-China trade, monetary stimulus
Asian stocks rose on Thursday on hopes for a thaw in US-China trade frictions and expectations that the European Central Bank will kick off another wave of monetary easing by global central banks.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2% and Japan's Nikkei stock index rose 1%. Australian shares were up 0.41%.
Wall Street gains, buoyed by trade optimism
Wall Street was led higher by tariff-sensitive technology and industrial stocks on Wednesday after China extended an olive branch ahead of next month's trade negotiations with the United States.
The Dow Jones Industrial Average rose 226.6 points, or 0.84%, to 27,136.03, the S&P 500 gained 21.34 points, or 0.72%, to 3,000.73 and the Nasdaq Composite added 85.52 points, or 1.06%, to 8,169.68.