MARKET WRAP: Sensex snaps 6-day losing streak, jumps 646 pts; banks advance

All that happened in markets today.

Snapping their six-day losing streak, the benchmark indices staged a smart comeback on Wednesday to end nearly 2 per cent higher, led by heavy buying in banking stocks. 

The S&P BSE Sensex added 646 points or 1.72 per cent to end at 38,177.95 levels with IndusInd Bank (up over 5 per cent) being the top gainer and YES Bank (down 5 per cent) the biggest loser. Out of 30 components in the index, 8 stocks ended in the red and rest 22 in the green. The broader Nifty50 index of the National Stock Exchange (NSE) ended at 11,313.30 levels, up 187 points or 1.68 per cent. 

Nifty Bank advanced a whopping 1,018.30 points or around 4 per cent to settle at 28,785.85 levels, with 11 out of 12 constituents ending in the green. 

India VIX, the volatility guage, dropped over 4 per cent to 17.09 levels. 

Among the sectoral indices on the NSE, barring IT, all the indices ended in the green. Nifty Private Bank index gained 3.47 per cent to 16,095 levels. Financial services, realty and metal counters, too, made merry in the trade.

In the broader market, the S&P BSE MidCap index rallied 189 points or 1.38 per cent to end at 13,869.35 levels, while the S&P BSE SmallCap index closed at 12,796.47, up 83 points or 0.66 per cent. 

BUZZING STOCKS

Shares of Titan Company slipped 6 per cent to Rs 1,178 on the BSE during the session after the Tata Group company said that its revenue from the jewellery business could decline for the first time in the past four years in the September quarter (Q2FY20). The stock eventually settled at Rs 1,229 apiece, down 2.41 per cent. READ MORE

Shares of IndiaMART InterMESH surged around 18 per cent to end at Rs 2,261.55. 

Shares of Dewan Housing Finance Corporation (DHFL) hit an over 10-year low and were locked in the lower circuit limit of 10 per cent at Rs 26.05 on the BSE on Wednesday after PTI report suggested that Central Depository Services (CDSL) has frozen the company’s promoter shareholding as the company has not filed results for the first quarter. READ MORE  

GLOBAL MARKETS

Asian stocks fell the most in a week on Wednesday as the United States and China’s broadening dispute over trade and foreign policy showed little sign of coming to an end, weighing on global economic growth. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.61 per cent. Chinese shares fell 0.32 per cent after briefly touching a five-week low. Pan-region Euro Stoxx 50 futures edged up 0.03 per cent, German DAX futures rose 0.03 per cent, while FTSE futures eased 0.08 per cent.

Oil prices traded flat in the trade. Brent crude was down 9 cents at $58.15 a barrel and US West Texas Intermediate crude was at $52.55, down 8 cents. 

(With inputs from Reuters)

3:52 PM

COMMENT :: Ajit Mishra, vice-president (research), Religare Broking

The bulls staged a smart comeback led by short covering and stable global cues. The Nifty index ended higher by 1.7% at 11,313 levels. The broader markets underperformed with BSE Midcap and Smallcap ending with gains of 1.4% and 0.7%. Amongst the sectoral indices, except IT and Consumer Durables, all the other indices ended with gains wherein Banking, Metal and Realty were the top gainers.

 

Going forward, we believe the upcoming earnings season would dictate the trend for the Indian markets. We expect that more than the earnings announcement, investors and traders would focus on the outlook provided by the management especially for consumption driven companies. On the global front, market participants would keep a close watch on trade talks between US-China.

3:50 PM

EXPERT'S TAKE :: Vinod Nair, head of research at Geojit Financial Services

Market recovered after many days of fall and rose comfortably above 11,300 level. Banks outperformed as sharp fall in bond yield is indicating further room for rate cuts which will improve liquidity and consumption story. Further, a 5% hike in DA by govt will add impetus to the festival demand. Going forward, the result season will dictate the market direction and investors are expecting some green shoots on account of festival demand and good monsoon

3:49 PM

MARKET COMMENT :: S Ranganathan, Head of Research at LKP Securities

The 5% hike in Dearness Allowance (DA) puts more money in the hands of over one crore government employees and pushed several heavyweight stocks higher in trade today

3:48 PM

MARKET OUTLOOK :: Sahaj Agarwal, head of derivatives, Kotak Securities

Markets have witnessed massive volatility in the previous few weeks. Nifty50 has strong supportat 11000-11050. With this support in place, we expect the index to attempt to test 12,000-12,200 levels in the next few weeks. 

 

Momentums is seen across sectors with broad-based participation. A breach of 11,000 on the downside can lead to selling pressure towards 10,500-10,600 – chances of this though remain low. Positive global developments can further boost the sentiment. Investors should remain selective, while traders can remain long with broader market level of 11,000

3:47 PM

Nifty Bank rallies over 3%

YES Bank only Nifty Bank constituient to end weak

3:45 PM

Nifty snapshot

3:44 PM

Contribution to Sensex today

Financials fuel market rally

3:43 PM

Sensex heat map

3:38 PM

CLOSING BELL

The S&P BSE Sensex ended at 38,177.95 levels, up 646 points or 1.72 per cent while NSE's Nifty50 index ended at 11,313.30, up 187 points or 1.68 per cent. 

3:19 PM

COMMENT :: Edelweiss on IT sector

Healthy momentum in digital and robust deal pipeline across verticals are likely to underpin strong management commentaries in Q2FY20. We will keep an eye out for: i) increase in deal sizes and tenures in digital; ii) demand commentary by industry, specifically BFSI and retail; and iii) commentary on margin outlook for H2FY20. Maintain ‘BUY’ on Infosys, TECHM and HCLT, and ‘HOLD’ on TCS and Wipro.

3:18 PM

COMMENT :: IDBI Capital on banks

Corporate banks to report lower slippages in Q2FY20 and the ongoing resolutions to provide comfort to the asset quality. However outlook on new stressed entities like Indiabulls, Altico, CG Power etc has to be keenly watched. Resolutions through the IBC framework have been slower than expected, but FY20 is expected to end with resolutions in a couple of cases.

3:17 PM

Edelweiss Securities on Pharmaceuticals

Regulatory hurdles continue to impact as the sector received six warning letters YTD. Margins are expected to remain stable YoY and QoQ led by tight control on cost and rupee depreciation. Overall, while we expect Dr Reddy's and Ipca to surprise on the upside, Sun Pharma and Cadila Healthcare are likely to report soft numbers. During the quarter, consensus estimates for FY20/FY21 were revised down 3 per cent/4 per cent, except for Dr Reddy's wherein FY20 estimates were revised up 8 per cent. Valuations continue to dwindle — now at 15.6x (from 16.8x at the end of Q1FY20). Maintain Dr Reddy's and Cipla as our top ‘BUY’ and Sun Pharma as top ‘REDUCE’.

3:16 PM

Antique Stock Broking on financial sector

For banks, 2QFY20 is expected to be a soft quarter with systemic loan growth (till 13th Sep-19), moderating to 10% YoY (vs. 12% in 1QFY20) and deposit growth being steady at 10% YoY. We expect stable to marginal decline in NIMs QoQ but with new Repo linked lending rates being better than expected, fear of NIMs compression is likely to ease

3:11 PM

COMMENT :: Emkay Global on financial sector

We maintain our positive bias toward private banks, with our top picks being ICICI, HDFCB, City Union, Federal Bank and Bandhan Bank. Reiterate Sell rating on Yes Bank with a revised TP of Rs38 amid rising corporate stress leading to weak return ratios and sub-par capital position with incremental capital raise at lower valuations. Amid the NBFC crisis, we prefer high-quality and relatively resilient players. We believe that insurance companies remain a safe haven amid the NBFC crisis, which is reflected in their strong stock performance. Our top picks are IPRU and SBI.

2:57 PM

MARKET UPDATE | Nifty Bank advances 1,000 pts