MARKET WRAP: Sensex slides 336 pts ahead of Q2 GDP nos, Nifty holds 12,050

All that happened in markets today.

Expectations of slower GDP numbers for September quarter (Q2FY20) due later in the day and weak global cues weighed on investor sentiment on Friday with the benchmark indices sliding nearly a per cent.

It is widely expected that the second quarter GDP print will slip below 5 per cent on subdued consumer demand, weakening private investment and falling exports courtesy global slowdown.  

The S&P BSE Sensex lost 336 points or 0.82 per cent to settle at 40,794 with YES Bank (down 2.50 per cent) being the top loser and Bharti Airtel (up over a per cent) the biggest gainer. During the day, the index hit a low of 40,664.18 levels. Reliance Industries (RIL), ICICI Bank, Hindustan Unilever (HUL), and State Bank of India (SBI) contributed the most to the index's fall. 

NSE's Nifty50 index closed the session at 12,056, down 95 points or 0.78 per cent. 

On a weekly basis, Sensex gained 0.54 per cent and Nifty added 0.66 per cent. 

In the broader market, Nifty Midcap 100 index ended flat at 17,222, up 0.06 per cent while Nifty SmallCap 100 index outperformed the benchmarks by settling nearly a per cent higher. 

Sectorally, except realty stocks, all the counters ended in the red. Media stocks tumbled the most, followed by PSU banks, metals and auto stocks. The Nifty Realty index ended a per cent higher at 282 levels. 

BUZZING STOCKS

Zee Entertainment slipped nearly 6 per cent to end at Rs 293.55 apiece on the BSE. The stock has been under pressure on series of developments such as Subhash Chandra's resignation as chairman of the company and then stepping down of three directors.  

Shares of Future Group companies rallied in the trade a day after the Competition Commission of India (CCI) said it has approved Amazon.com NV Investment Holdings' proposal to acquire about 49 per cent share in Future Coupons (FCL) - a subsidiary of Future Group. READ MORE   

Indiabulls Housing Finance rallied 13 per cent to Rs 377 during the day on the National Stock Exchange (NSE) after foreign portfolio investors (FPIs) bought nearly one percentage points stake in the company through open market. The stock of the housing finance company had zoomed 25 per cent on Thursday. However, the stock reversed gains in the intra-day deals to end at Rs 290, down over 13 per cent on the BSE. 

GLOBAL MARKETS

Asian shares slipped on Friday, knocking a global stock index off its path to hitting an all-time peak as investors turned cautious, fearing a new US law backing Hong Kong protesters could torpedo efforts to end the US-China trade war. MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 per cent. Hong Kong  led the dip with losses of 2 per cent. South Korean shares lost 1.4 per cent and Japan's Nikkei eased 0.5 per cent.China's blue-chips gave up 1.3 per cent a day before the country reports manufacturing activity. 

In Europe, shares edged lower. 

In commodities, oil prices were mixed. Investors awaited a meeting of OPEC and its allies next week that may result in the extension of an output cut agreement to support the market.

(With inputs from Reuters)

3:44 PM

MARKET COMMENT :: Vinod Nair, Head of Research, Geojit Financial Services

Profit-booking ahead of economic data and selling pressure in Asian peers due to risk of retaliation from China add volatility in the market. The recent rally has lifted the market valuation, which may limit the headroom of key indices to perform well in the short-term. Consequently, investors are likely to shift focus for quality mid & small-caps, which are likely to out-perform in the near-term

3:40 PM

Nifty snapshot

Banks, metals, autos drag

3:39 PM

HUL, Tata Motors, YES Bank among top Sensex losers

3:38 PM

Sensex ends over 300 points lower

3:37 PM

Markets this week

The Sensex gained 1.1% in the week to reach a new life-time high. Markets were buoyed by progress on phase-1 of the US-China trade deal, resolution of stress in financial sectors and multiple government initiatives to arrest the ongoing economic slowdown.

L&T, TCS  and Mahindra & Mahindra were the top losers in the BSE-30 Index, while Tata Steel, YES Bank  and IndusInd Bank  were the top gainers. FPIs bought equities worth US$1.5 bn over the past five trading sessions while DIIs bought US$192 mn worth of equities in the same period.

(Source: Kotak Securities note)

3:36 PM

CLOSING BELL

The S&P BSE Sensex slipped 336 points or 0.82 per cent to end at 40,794 while NSE's Nifty50 index ended at 12,056, down 95 points or 0.78 per cent.

3:24 PM

MARKET COMMENT :: Chris Wood of Jefferies

It remains remarkable how polarised the political debate in America and the related media coverage is. Reports suggest that the strategy of the 45th president is to go on the offensive when the impeachment proceedings reach the Senate, which will probably be in January, with the Republican head of the Senate Judiciary Committee, Lindsey Graham, acting as the Donald’s pit bull. This is likely to lead to intense focus on the activities of Joe Biden’s son Hunter in Ukraine.

 

Donald Trump clearly thinks he has done nothing wrong, which is why he was so quick to release the original transcript of his July telephone call with Ukraine President Volodymyr Zelenskyy. This is why, if there is a smoking gun, it has not in GREED & fear’s view been revealed as yet.

 

If the impeachment proceedings are likely to liven up, assuming they reach the Senate, the stock market continues to grind higher amidst continuing hopes of a US-China trade deal, with the renewed inflows into equities supported by the knowledge that the Fed has renewed balance sheet expansion.

(Source: Wood's weekly newsletter, GREED & fear)

Chris Wood

3:21 PM

CD Equisearch on Can Fin Homes

The stock currently trades at 2.5x FY20e BV (13.2x FY20e EPS of Rs 29.72) and 2x FY21e BV (11.2x FY21e EPS of Rs 34.84). Majority of the customer profile consists of salaried individuals which do not put pressure on the quality of loan book. As of March 2019, over 70% of the loan book comprised of salaried individuals. Karnataka remains a dominant contributor with almost 40% share of the loan book.

Fee income currently is mainly contributed by the processing fee component while the contribution from third party business remains negligible since the company just last year started cross-selling insurance products. This is a lucrative avenue for the company to explore going forward. Weighing odds, we assign ‘buy’ rating on the stock with target price of Rs 478 (previous target Rs 417) based on 2.5x FY21e BV for a period of 9-12 months

3:21 PM

Jefferies on two-wheeler segment

Sharp price escalation post BS-6 is likely to be a headwind to demand recovery at least initially. However, the extent of impact remains to be seen especially given sharp slowdown & inventory de-stocking in FY20E. The next few quarters will likely remain fuzzy for 2w as various themes like continued BS-4 de-stocking & BS-6 re-stocking in wholesales, retail pre-buying, consumer preference for upgraded models, use of higher financing & discounts, adverse impact of BS-6 models on margins and gradual normalization play out. We note though that fuel availability should not be an issue in 2w as BS-6 models can use BS-4 gasoline.

3:20 PM

Rollover stats

Rolls for Nifty/BankNifty stood at 79% (1.46cr shrs)/70% (18.08lakh shrs) vs 84% (1.49cr shrs)/63% (8.08lakh shrs) previous month, as aggressive long buildup along with sharp increase in OI base seen on BankNifty led by ICICI Bank, Market-wide rolls better than previous month at 93% vs 3months avg. of 92%. FII’s positioning on index futures long to short ratio starts at 1.54x, FII’s long index rollovers stood at 75% vs 3months avg of 67% along with unwinding on short positions also seen.  Max. call/put OI on Nifty for December monthly series stands at 12,500 calls (1.7mn) and 12,000 puts (OI 3mn). We expect continuation of the rally with mild periodic profit booking

(Source: YES Securities)

3:18 PM

IPO watch :: ICICI Securities on Ujjivan SFB

Ujjivan SFB, led by the promoter business, started with a substantial proportion of MFI loans. However, there has been a continuous focus on increasing share of non-MFI segment via introduction of new products including affordable loans, MSE loans, auto loans. Share of MFI has declined from 97.5% in FY17 to 79.2% in H1FY20. Such a shift into non-MFI book provides the required product diversification, which will entail growth as well enable asset quality management.

The company had a steady ride in terms of advances growth along with maintaining asset quality. There was continued focus on garnering retail liability along with building CASA base. We have a SUBSCRIBE recommendation on the stock. Further, at the IPO price band of | 36-37, the stock is available at a P/BV of ~2.2x (post issue) at the upper band on H1FY20 basis

3:18 PM

Top 5 losers on the BSE at present

3:03 PM

It will need more than a rate cut to salvage India's sputtering economy

For Das to even contemplate taking his foot off the monetary pedal now would be a mistake. He should look past the recent uptick in inflation last month, largely attributed to vegetables such as onions, a staple of Indian cooking. Those price gains helped push the measure beyond the RBI's 4 per cent medium-term target. More important is the slide in core inflation, which strips out volatile commodity prices. READ MORE   

2:49 PM

BUZZING STOCK:: Bharti Infratel zooms over 7% in an otherwise weak market

2:45 PM

Global markets check

Asian shares slipped on Friday, knocking a global stock index off its path to hitting an all-time peak as investors turned cautious, fearing a new US law backing Hong Kong protesters could torpedo efforts to end the US-China trade war.

MSCI All Country world index, whichtracks shares in 49 countries, was down 0.39 per cent at 548.48, less than 0.4 per cent away from all-time peak hit in January last year before the start of US-China trade war.

 

European stocks look set to start Friday lower with pan-region Euro Stoxx 50 futures down 0.3 per cent in early trade, following a bleak Asian morning session.

 

MSCI's broadest index of Asia-Pacific shares outside Japan fell more than 1 per cent. Hong Kong led the dip with losses of 2 per cent. South Korean shares lost 1.4 per cent and Japan's Nikkei eased 0.5 per cent.