Market Live: Sensex, Nifty under pressure; Realty up 1%, NLC India top midcap gainer
1:50 pm Nomura on GDP: India’s GDP growth is expected to slow to 6.7 percent in the January-March quarter of this fiscal year as overall activity is yet to bounce back to levels seen prior to demonetisation, says a Nomura report.
Though the adverse growth effects of demonetisation are waning, the pace of improvement is gradual and not yet broad based, the Japanese financial services major said.
“We expect GDP growth to slow from 7 percent in October-December 2016 to 6.7 percent in January-March 2017 as activity is yet to recover to levels seen prior to demonetisation,” Nomura said in a research note.
1:35 pm Europe opening: European markets opened lower amid increasing concerns regarding US President Donald Trump’s economic growth agenda as investors chose to ditch riskier assets.
The pan-European STOXX 600 was 0.49 percent lower with almost all sectors and major bourses in negative territory.
1:20 pm CLSA on Vedanta: CLSA has maintained its buy call on the stock with an increased target price of Rs 340 from Rs 300. In fact, the company is its top pick in the sector. A completion its merger with Cairn and possible dividend are potential catalysts on the stock.
The brokerage house has highlighted the multiple growth projects on the company’s radar beyond FY19 and said that it is on track to completely ramp up new aluminium and power capacity over FY18-19. If all the projects materialise, it says, it would provide 25-30 percent boost to consolidated EBITDA. Furthermore, it feels that though the stock has risen, valuation still remains attractive.
1:00 pm Market Check: Weak global cues continued to keep market under pressure as the 30-share BSE Sensex was down 188.56 points at 29,296.89.
The 50-share NSE Nifty fell 58.25 points to 9,063.25. Among sectoral indices, Nifty Bank and Metal lost the most, down over 1 percent while Realty bucked the trend, up 1 percent.
Metals shares lost momentum due to fall in commodity prices globally. JSW Steel, SAIL, Hindalco, Tata Steel, Jindal Steel and Vedanta were down 1-3 percent.
The market breadth remained negative as about two shares slipped for every share rising on the BSE. The Nifty Midcap was down 0.8 percent.
NLC India was the biggest midcap gainer, up more than 8 percent after positive management commentary.
12:49 pm Hudco gets IPO nod from SEBI: State-run Hudco has received capital markets regulator Sebi’s approval to raise funds through an initial share sale as part of the government’s disinvestment drive.
Hudco had filed draft papers with the Securities and Exchange Boardof India (Sebi) in January and got the markets watchdog’s “observation” on March 10, which is necessary for any company to launch public offer.
The initial public offer will comprise sale of 200,190,000 equity shares –10 percent stake — by the central government through an offer for sale (OFS) route, as per the Draft Red Herring Prospectus (DRHP).
12:30 pm Management Speak: Satpal Arora, MD, Tourism Finance Corporation of India (TFCI) said the company is on track to reach Rs 1000 crore loan growth for FY17 but disbursements would be around Rs 500 crore as against expected Rs 600 crore.
Disbursement for the fourth quarter would be around Rs 250-275 crore which would be almost equal to the nine-month disbursement of Rs 225 crore, said Arora in an interview to CNBC-TV18.
The demonetisation mainly impacted the banquet and food and beverage (F&B) business to the tune of 5-10 percent of the total revenues, said Arora adding that now it is back on track now.
12:19 pm Jaitley hopeful on GST implementation by July 1: Two days after the Cabinet cleared four bills related to the Goods and Services Tax (GST), Finance Minister Arun Jaitey is hoping to implement GST beginning a July 1 rollout of the tax policy which he termed as “India’s biggest reform”.
The reform aims to transform the country’s complex tax system and make tax evasion difficult, Jaitley said on the sidelines of an event in New Delhi.
The Union Cabinet, chaired by Prime Minister Narendra Modi, on Monday cleared four GST bills – Central GST bill, Integrated GST bill, Union Territory GST Bill and State GST bill.
12:05 pm Market Check: Equity benchmarks extended their losses from the morning session, but recovered from the day’s lows on the back of negative global cues as well as likely profit booking by investors.
The Sensex was down 223.62 points at 29261.83, while the Nifty was down 69.35 points at 9052.15. The market breadth was negative as 829 shares advanced against decline of 1,592 shares, while 164 shares remain unchanged.
Heavyweights ITC and HDFC Bank dragged the indices lower with the latter contributing nearly 10 percent of the 30-share index’s fall.
Meanwhile, Bharti Airtel and BHEL were the top losers on both the indices, while Axis Bank, Dr. Reddy’s and HCL Technologies were the top gainers.
Shares of Axis Bank rallied 3 percent intraday on Wednesday following the bank’s clarification on its MD’s resignation as well as Kotak Mahindra Bank founder’s comments on Tuesday.
“… (The rumour) is false, speculative and is being circulated with the malafide intention of misleading the investors and the general public,” the lender clarified in a notification to the exchanges.
11:51 am FII View: Sakthi Siva of Credit Suisse says the Asia-Pacific ex-Japan return on equity which has been declining for six years finally appears to be bottoming.
She feels return on equity appears to have edged higher to 10.2 percent currently from a low of 10 percent last November.
“We are reviewing MSCI Asia ex-Japan year-end target of 580 as we have just passed it. We continue to suggest buying the dips,” Siva says.
11:40 am Interview: Magma Fincorp, one of India’s leading non-banking financial companies (NBFCs), has seen some fund action as two Mauritius-based funds — Laurus Mauritius sold 3.33 percent stake and Indium V (Mauritius) sold 2.03 cr shares.
Speaking to CNBC-TV18, Kailash Behati, CFO of Magma Fincorp said that there was a significant drop in collections post demonetisation, in the months of November and December. However, January onwards it has been improving.
“Demonetisation problem is over and the company has returned to near normal,” he said.
Since the rural economy was impacted a bit more due to demonetisation, there were delays in payments in the tractor segment, he said. Tractor segment forms 20 percent of the company’s overall portfolio.
On the loan growth, he said “Loan book for the current quarter will remain flat but we expect the loan book to grow between 7 and 10 percent for the next quarter”, he further added.
11:20 am Fed rate hikes: With the US workforce nearly fully employed and inflation heading toward 2 percent, the Federal Reserve should raise interest rates two more times this year and continue work on a plan to gradually trim its massive balance sheet, Dallas Federal Reserve Bank President Robert Kaplan said.
But, Kaplan was careful to emphasize in an interview with Reuters late Tuesday, there is little rush on either score.
“I think we are moving toward a period where we should begin allowing the balance sheet to gradually and patiently run off,” said Kaplan, a voter this year on the Fed’s policy-setting panel. “But I think we have work to do, probably, to get to that point.”
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11:00 am Market Check: Benchmark indices extended losses in morning, with Sensex falling 250 points, weighed by banks, auto, FMCG and metals stocks.
Global cues caused selling pressure as Asian markets like Nikkei, Shanghai, Hong Song, Australia and Kospi fell 0.5-2 percent after an apparent North Korea missile test that reports said failed.
The 30-share BSE Sensex fell 246.38 points to 29,239.07 and the 50-share NSE Nifty declined 79.05 points to 9,042.45. More than two shares declined for every share rising on the BSE.
Hindalco Industries lost 3 percent on fall in commodity prices while HCL Technologies and Axis Bank were only gainers among Nifty stocks.
Delta Corp shares surged 6 percent as Motilal Oswal has initiated coverage with a buy rating and has set a target price at Rs 229. It cites the approval of a casino in Daman as a key upside trigger and sees gaming capacity to double.
10:45 am Expert Speak: Inderjeet Singh Bhatia, Associate Director, Macquarie Research has placed his bets on domestic cyclicals. This is one space where the market is underweight and there are many opportunities available with a rural focus as incomes in those areas will improve, he said.
But are high valuations a concern? Definitely, he says. “The market is continuing to ignore short-term earnings pain against long-term reforms and earnings coming through,” he told CNBC-TV18 in an interview. Any disappointment on that front could lead to a correction, he added.
The market may see downside risks arising out of “concerns on political scenario in Europe, effectiveness of policies of the US administration,” he said.
10:25 am Buzzing stock: Shares of Mawana Sugars rose 4.6 percent intraday Wednesday as it has agreed to enter into one time settlement with Punjab National Bank.
“The board of directors of Mawana Sugars vide resolution dated March 21, has agreed to enter into one time settlement with Punjab National Bank (PNB) Muzaffarnagar, Uttar Pradesh,” as per company press release.
10:15 am FII View: Abhay Laijawala of Deutsche Bank says following the landmark UP election verdict, investor expectations have risen that the BJP will move ahead on vital reforms that jumpstart the animal spirits of the Indian corporate sector.
These expectations may be belied as the government is focused more on longer term, bottom-up structural reform than any short-term stimulus that shifts the domestic narrative on either corporate earnings or the broader economy, he feels.
Among some of the landmark reforms beyond the GST, he sees a high probability of FDI in multi-brand retail, agricultural marketing reforms and amendments to the Prevention of Corruption Act.
Laijawala further sees the consumer staples sector being a standout beneficiary of FDI in retail and agri reforms while the capex/materials sectors and PSU banks will be beneficiaries of faster approvals following the amendments to the corruption act.
10:00 am Market Check: Benchmark indices as well as broader markets continued to trade lower in morning following weakness in global peers, dragged by banks, auto, metals and FMCG stocks.
The 30-share BSE Sensex was down 221.38 points at 29,264.07 and the 50-share NSE Nifty fell 74.10 points to 9047.40 while the BSE Midcap declined nearly 0.9 percent on weak market breadth.
About two shares declined for every share rising on the BSE.
ICICI Bank, HDFC, Reliance Industries, HDFC Bank and Tata Motors were top five contributors to Sensex’s fall while Axis Bank bucked the trend, up 1 percent.
9:55 am MOSt on Delta Corp: Motilal Oswal has initiated coverage with a buy rating on Delta Corp and has set a target price at Rs 229.
It cites the approval of a casino in Daman as a key upside trigger and sees gaming capacity to double.
The brokerage house expects net profit CAGR of 62 percent, EBITDA CAGR of 45 percent over FY17-19. Furthermore, it expects this EBITDA to be driven by strong operating leverage.
9:45 am Fund raising: Mortgage firm HDFC said it plans to raise about USD 750 million (around Rs 5,000 crore) through rupee denominated bonds to fund its business expansion.
HDFC Ltd has established a medium term note programme for amount of up to USD 750 million.
“…The Corporation is now contemplating subject to market conditions, undertaking an issuance of rupee denominated bonds under the said MTN programme to overseas investors,” HDFC Ltd said in a regulatory filing to stock exchanges.
9:29 am FII View: The Trump rally seems to be fading away but the dips are temporary and the bull market argument still remains intact at least in the short term for the US markets, Richard Harris, CEO, Port Shelter Investment Management said in an exclusive interview with CNBC-TV 18.
Harris who is bearish on US markets on long-term basis said that India does look attractive on a relative basis when compared with other emerging markets (EMs), but the reform process has to pick up which would really boost the sentiment.
“For India, we have seen two steps forward and one step back and I don’t think the sort of reforms which westerners want to see are not particularly happening and if they would, it will be extremely positive for India,” he said.
“The emerging markets are at the stage where they are looking more interesting especially at a time when western markets are looking slight expensive, this often leads to rotational trade,” said Harris.
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9:15 am Market Check: Equity benchmarks extended losses for third consecutive session Wednesday, tracking global weakness on North Korea missile test and concerns over Donald Trump’s tax promises.
The 30-share BSE Sensex was down 192.06 points at 29,293.39 and the 50-share NSE Nifty fell 79.35 points to 9,042.15.
Bharti Airtel was biggest gainer in early trade, down 5 percent followed by M&M, ICICI Bank, Dr Reddy’s Labs, BHEL, Idea Cellular and Hindalco.
Axis Bank, Cipla, Infosys, HUL, Power Grid Corporation and Bharti Infratel were losers.
The Indian rupee slipped in the early trade. It has opened lower by 27 paise at 65.56 per dollar versus 65.29 Tuesday.
NS Venkatesh of Lakshmi Vilas Bank said, “The USD-INR pair is expected to take cues from the equity market and how the dollar behaves against other major currencies. The dollar weakness is expected to continue.”
He expects the USD-INR pair to trade in a range of 65.15-65.40/dollar for the day.
The dollar dipped to a near-four month low as concerns over Trump’s policy implementations grew. The greenback has been under pressure after comments from the US Federal Reserve last week disappointed dollar bulls.
Meanwhile, the euro gained to a 6-week high with analysts attributing the rally to centrist candidate Emmanuel Macron performing well in France’s first televised presidential debate.
Japanese stocks sold off today, after an apparent North Korea missile test that reports said failed.
Wall Street fell sharply on Tuesday as investors worried that President Donald Trump will struggle to deliver promised tax cuts that propelled the market to record highs in recent months, with nervousness deepening ahead of a key healthcare vote.
