Market Live: Sensex, Nifty rebound at open; Sun TV, Bharat Financial gain
10:10 am Demerger: Reliance Capital shares fell more than 17 percent in pre-opening trade due to hiving off home finance business.
Today is the ex-date for demerger and the record date for the same is fixed as September 6, which means person who holds shares of Reliance Capital on September 6 will get shares of Reliance Home Finance.
Reliance Capital shareholders will receive one share of Reliance Home Finance for every share held. Post demerger, Reliance Capital will continue to hold a 51 percent stake in Reliance Home Finance.
Reliance Home Finance (RHF) is expected to be listed in the second half of September.
10:02 am Chart of the day: Over the last 12 months, midcaps have delivered 19% return and over the last 5 years, midcaps have outperformed the Nifty by 70%
9:57 am HDFC Bank ‘too big to fail’: The Reserve Bank of India on Monday included HDFC Bank in the list of ‘too big to fail’ lenders, referred to as D-SIB or domestic systemically important bank.
India’s largest lender SBI and private sector major ICICI Bank were classified as D-SIBs in 2015.
With the inclusion of HDFC Bank in the list, there will now be three ‘too big to fail’ financial entities in the country.
9:35 am Market Outlook: Dhananjay Sinha of Emkay Global said the concerns on market valuation has been persisting with markets trading at boom time. The valuations across both benchmark and broader indices while the fundamentals reflect earnings recession.
Over the past three years, corporate India has seen virtually no growth at an aggregate level. Such a scenario naturally generate worries about the sustainability of market exuberance.
The situation is similar across the world with equity markets both emerging and developed are trading at peak levels even as earnings have remained stagnant since 2011. Few countries like China, Japan are undervalued.
Hence, it is pertinent to worry about global risk factors in such a scenario. The risk of geopolitical disruptions and protectionism etc. remains.
Importantly, with volatility measures still very depressed, markets appear to be complacent. Clearly, there is a possibility of a correction if any of this event go out of hand.
9:29 am FII View: Jonathan Garner of Morgan Stanley said the research house sees further upside in regional equity markets.
“We continue to be overweight on China, India and Japan versus the broader Asia Pacific Ex-Japan/EM universe,” he added.
Within sectors, the research house stayed overweight on IT and financials across the region.
“While we are cognizant of geopolitical risks, we don’t let it drive the portfolio,” he said.
India’s structural reduction in inflation and improved current account are leading to a secular reduction in interest rates, driving domestic flows towards equities, he feels.
9:15 am Market Check: Equity benchmarks rebounded with moderate gains amid volatility on Tuesday as investors remained cautious due to geopolitical tensions surrounding around North Korea.
The 30-share BSE Sensex was up 73.36 points at 31,775.61 and the 50-share NSE Nifty gained 20.65 points at 9,933.50.
Tech Mahindra, Tata Motors and HDFC Bank were early gainers while TCS, HCL Technologies, Bharti Airtel, ITC and HDFC were under pressure.
Nifty Midcap gained half a percent as about five shares advanced for every share falling on the NSE.
Tourism Finance Corporation of India gained 6.5 percent. Thomas Cook and IFCI gained more than 3 percent.
Sun TV added another 3 percent after CLSA raised target price to Rs 965 while Bharat Financial was up 2 percent as Credit Suisse raised target price to Rs 1,055.
Indraprastha Gas, Nandan Denim, Arvind, Sintex Industries, IRB Infrastructure, JM Financial, Manappuram Finance and Suzlon Energy gained up to 3 percent. Castrol India, Kwality, InterGlobe and Repco Home fell up to 14 percent
The Indian rupee depreciated further in opening trade on dollar demand. It started off trade at 64.10 a dollar, down 6 paise compared to previous day’s closing of 64.02.
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