MARKETS ON MONDAY: Sensex ends 232 pts lower; Realty, pharma, metals drag

This was the fifth consecutive session of losses for the markets. PSU bank stocks, however, bucked the trend

The markets ended lower for the fifth straight session on Monday, following the resignation of the Bharatiya Janata Party's (BJP's) B S Yeddyurappa in the Karnataka Assembly despite positive global cues.

The S&P BSE Sensex ended at 34,616, down 232 points while the broader Nifty50 index settled at 10,517, down 80 points.

B S Yeddyurappa’s third chief ministerial stint lasted all of 55 hours, and his resignation on Saturday evening came as a shot in the arm for an Opposition struggling to mount a united challenge to the Narendra Modi-led Bharatiya Janata Party (BJP) in the 2019 Lok Sabha elections.

Among sectoral indices, the Nifty PSU Bank index ended 2.66% higher led by a rise in the shares of Bank of India, Union Bank of India and Punjab National Bank. However, the Nifty Realty index fell 3.29%, Nifty Pharma slipped 2.78% and Nifty Metal ended 1.68% lower.

GLOBAL MARKETS

Asian markets closed mostly higher. Japan's Nikkei 225 rose 0.3 per cent to 23,002.37. Hong Kong's Hang Seng gained 0.6 per cent to 31,234.35, while the Shanghai Composite Index advanced 0.6 per cent to 3,213.84. South Korea's Kospi added 0.2 per cent to 2,465.57. Australia's S&P/ASX 200 inched down 0.1 per cent to 6,084.50. Stocks in Southeast Asia were mixed.

OIL PRICES

il rose on Monday, lifted by a rally across stocks and other commodities, after the United States said it had put a possible trade war with China "on hold". Brent crude futures were up 35 cents at $78.86 a barrel, having hit a high above $80 last week, while U.S. West Texas Intermediate (WTI) crude futures rose 29 cents to $71.57 a barrel.

A possible U.S. trade war with China is "on hold" after the world's largest economies agreed to drop their tariff threats while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday, giving global markets a lift in early trading on Monday.

(with Reuters inputs)

3:48 PM

Nifty Realty index cracks 3.29%. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
INDBULL.REALEST.	185.20	205.70	-20.50	-9.97
H D I L	26.25	28.30	-2.05	-7.24
UNITECH	4.40	4.60	-0.20	-4.35
BRIGADE ENTERPR.	240.85	251.25	-10.40	-4.14
GODREJ PROPERT.	747.55	776.90	-29.35	-3.78

3:45 PM

Nifty PSU Bank index ends 2.66% up. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)
BANK OF INDIA	97.95	93.45	4.50	4.82
PUNJAB NATL.BANK	78.15	74.75	3.40	4.55
UNION BANK (I)	86.95	83.25	3.70	4.44
CANARA BANK	245.65	235.70	9.95	4.22
SYNDICATE BANK	44.55	43.30	1.25	2.89

3:40 PM

Nifty sectoral performers of the day

3:37 PM

BSE Sensex: SBI, ICICI Bank among top gainers, Dr. Reddy top loser of the day

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 34,616, down 232 points while the broader Nifty50 index settled at 10,517, down 80 points.

3:20 PM

Midcap, Smallcap shares under pressure; 111 stocks hit 52-week low

Shares of midcap and smallcap companies were under pressure with 111 stocks hitting their respective 52-week lows as these indices have fallen more than 1% on Monday.

Adani Power, Ajanta Pharma, Castrol India, CRISIL, Federal Bank, Glenmark Pharmaceuticals, IDFC Bank, LIC Housing Finance and Vakrangee from the midcap index hit 52-week lows today. READ MORE
 

3:19 PM

Emkay Global on Untratech Cement - Century Textiles deal

There could be synergies from: a) common procurement of raw material (RM), b) brand building as UTCEM’s brand commands a premium of Rs10-15/bag over CTIL in most markets and c) reduction in overheads - marketing, finance etc. Ultratech (UTCEM) expects the cost of acquired assets to be almost similar to UTCEM within one year of the acquisition.

In the near term, we are cautious on the cement sector due to fight for capacity share and deterioration in pricing power. UTCEM remains one of our preferred picks in the sector. We retain ACCUMULATE rating with a target price of Rs4,279 

3:03 PM

D-Mart falls 11% in two days on promoter R K Damani upto 1% stake sale plan

Shares of Avenue Supermarts - the operators of retail chain D-Mart, have fallen 6% to Rs 1,338 per share, extending their 5% drop on the BSE on Friday after the company announced that promoter R K Damani would pare his stake to comply with the shareholding norms.
 

D-Mart lost Rs 93.21 billion market-cap in past two days from Rs 933.10 billion on Thursday, May 17, 2018 to Rs 839.89 billion at 12:26 pm; the BSE data shows. READ MORE
 

2:49 PM

Amara Raja Batteries slips 8% post Q4 results

Shares of Amara Raja Batteries have declined 8% to Rs 760 per share, extending their 5% fall on Friday on the BSE after the company reported a lower than expected 10.7% growth in standalone net profit at Rs 1.1 billion in March quarter (Q4FY18). Analysts on an average had expected profit of Rs 1.26 billion for the quarter. READ MORE
 

2:45 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	34,638.77	-209.53	-0.60
S&P BSE SENSEX 50	11,015.52	-75.32	-0.68
S&P BSE SENSEX Next 50	31,911.39	-529.43	-1.63
S&P BSE 100	10,812.50	-89.40	-0.82
S&P BSE Bharat 22 Index	3,504.74	+10.84	+0.31

2:43 PM

ICRA on GDP forecast

The domestic GDP growth rate is expected to improve to 7.4% in Q4 FY2018 from 7.2% in Q3 FY2018, exceeding the implicit forecast of 7.1% embedded in the Central Statistics Office’s (CSO’s) Second Advance Estimate of National Income for 2017-18.

As per ICRA, the growth of the Indian gross value added (GVA) at basic prices in year-on-year (YoY) terms is likely to record a considerable recovery to 7.3% in Q4 FY2018 from 6.7% in Q3 FY2018, thereby rebounding above 7.0% after a gap of five quarters. This revival in Q4 FY2018, relative to Q3 FY2018, is expected to be broad-based, supported by an uptick in industry (to +7.7% from +6.8%), agriculture, forestry and fishing (to +4.5% from +4.1%), and services (to +7.8% from +7.7%)

2:41 PM

Centrum on Vardhman Textiles Limited (VTL)

At the CMP, VTL trades at 9.4x its FY20E EPS. Post the capex in the fabric division, the processing capacity would increase from 140 million metres (mm) to 180 mm, which is likely to come on stream by Mar’19. With ramp up in utilization, the share of fabric division is likely to increase from the current level of 35% (of sales), thereby aiding operational performance. We maintain our Accumulate rating and value the stock at 11x FY20E EPS giving a target price of Rs1,440.

2:19 PM

Equirus Securities on Lupin

On a relatively high US base in FY18 which includes one-off sales from gMethergene and gTamiflu and the impending warning letter at Goa and Indore plants, we expect Lupin’s US business to decline in FY19, further pressurizing EBITDA. Key launches – gRanexa, gLevothyroxin and gMinocycline – are all back- ended and unlikely to compensate. We cut our FY19/20 estimates by 2%/10% and maintain Reduce with a Mar’19 target price of Rs. 759, valuing the stock at 22x P/E.

2:17 PM

TOP SENSEX LOSERS

COMPANY	LATEST	CHG(RS)	CHG(%)	WEIGHT IN INDEX (%)
WIPRO	265.75	-3.70	-1.37	1.52
HERO MOTOCORP	3503.30	-58.45	-1.64	1.42
BAJAJ AUTO	2725.30	-52.20	-1.88	1.50
H D F C	1821.00	-36.25	-1.95	7.92
NTPC	163.00	-3.35	-2.01	1.15
CIPLA	522.90	-11.05	-2.07	1.34
TATA STEEL	576.55	-14.95	-2.53	0.71
TATA MOTORS	297.10	-8.15	-2.67	2.99
SUN PHARMA.INDS.	450.60	-14.10	-3.03	3.30
DR REDDY'S LABS	1897.25	-80.80	-4.08	1.56

2:09 PM

INTERVIEW OF THE DAY Risk-reward is unfavourable for investing at current levels: Gautam Chhaochharia of UBS

How do you see the markets play out for the rest of 2018?

 

Our end-2018 Nifty base, upside and downside scenarios of 10,500,  11,900 and 8,800 (respectively) imply unattractive risk-reward from current levels for rest of the year. Karnataka assembly election results may add to expectations of a Modi win in 2019. Our discussions with investors suggest that they presume Narendra Modi will win 2019 national elections. Market's recent performance and valuation multiples also suggest that this is priced in. Any opinion poll in the next few months would drive market sentiment. Towards end-2018, results of three big state elections will also be a key

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