MARKET WRAP: Sensex rises 97 pts, Nifty settles at 10,348 as banks rally

The benchmark indices recovered sharply from their day's low to settle slightly higher on Monday led by a rise in the banking and OMC stocks.

The S&P BSE Sensex ended at 34,474, up 97 points, while the broader Nifty50 index settled at 10,348, up 32 points.

Among sectoral indices, the Nifty Bank index settled 0.7 per cent higher, led by a rise in YES Bank and State Bank of India (SBI). On the other hand, Nifty IT index fell 1.8 per cent led by fall in Tata Elxsi, Tata Consultancy Services (TCS) and Infosys.

During the day, the rupee slipped below the crucial 74 per dollar mark for the second time in two days hitting 74.09 against the greenback as the Reserve Bank of India (RBI) kept interest rates unchanged on Friday, surprising the markets that had expected a rate hike to support the tumbling rupee and combat inflationary pressures from high oil prices.

Shares of oil & gas and state-run oil marketing companies (OMCs) rose on Monday, after witnessing heavy sell-off in the last two trading sessions. Reliance Industries rose 5.5 per cent to Rs 1,108 on the BSE, while HPCL rose over 8 per cent to Rs 178.
 

Global Markets

Shares in Asia slumped Monday as China’s markets stumbled in their first trading day after a one-week holiday even though Beijing’s central bank increased liquidity to offset the impact of an escalating trade dispute with the United States. Asian shares were also hit on Monday as investors in Chinese stocks reacted for the first time to new pressure from Washington and a report that Chinese spies had compromised US hardware.

China’s blue-chip CSI300 index was 3.5 per cent lower while the main Shanghai Composite Index was down 2.9 per cent. The tech-heavy ChiNext board fell 3.08 per cent. The losses in China dragged down MSCI’s broadest index of Asia-Pacific shares outside Japan, which was 0.9 per cent lower.

(with wire inputs)

3:39 PM

Sectoral gainers and losers on NSE

3:37 PM

S&P BSE Sensex: Top gainers & losers

3:36 PM

Market at close

 

The S&P BSE Sensex closed 97 points higher at 34,474 while the broader NSE's Nifty50 index settled at 10,348, up 32 points.

3:16 PM

Gold slips as dollar gains after China eases policy

Gold fell on Monday as the dollar firmed after China's central bank eased its domestic policy to support the economy amid concerns that an escalating trade dispute with the United States could hurt growth.

Spot gold was down 0.6 per cent at $1,195.61 an ounce. US gold futures fell 0.5 per cent to $1,199.8 an ounce.

2:59 PM

Time to increase gold allocation in your portfolio this Dussehra

 

This Dussehra can be different for your gold investment. Analysts are increasingly becoming positive on the outlook of gold over the next few months with oil prices rising and the risks in the global economy increasing. Last week, international gold prices crossed $1,200 after Italy said it will run a higher budget deficit that threatened the European currency. The ongoing trade tensions between the US and China has been increasing in impacting currencies. Read More

 

2:44 PM

NBFCs slip as RBI plans to strengthen norms; Edelweiss Financial cracks 13%

 

Shares of a few non-banking financial companies (NBFCs) took a hit on Monday after the Reserve Bank of India (RBI) said on Friday it was looking at strengthening guidelines for such entities to avoid rollover risks. Dewan Housing Finance Corporation Ltd's stock fell as much as 12.3 per cent, while that of Edelweiss Financial Services Ltd tumbled as much as 13.9 per cent. Shares of JM Financial Ltd and IIFL Holdings Ltd declined as much as 11.1 per cent and 11 per cent, respectively. Read More

2:29 PM

The exchange rate is the shock absorber

Foreign capital inflows finance the gap between investment and savings. The exchange rate is the price that adjusts to ensure that the capital inflow is exactly as large as is required. An important part of the capital flows into India is debt flows.

 

When the perceived credit risk of borrowing entities worsens, overseas debt investors become uncomfortable, and there is a shortfall of inbound capital. Rupee depreciation makes Indian assets more attractive, and compensates for deterioration in domestic credit quality. READ MORE

2:14 PM

RBI gives nod for True North to pick up 26% stake in Federal Bank's NBFC

 

The Reserve Bank of India (RBI) has given its nod to private Equity firm True North to pick 26 per cent stake in Fedbank Financial Services Ltd (Fedfina), a subsidiary of Kerala-based Federal Bank. The deal value is estimated to be around Rs 4 billion, for 26 per cent stake, while True North can further acquire additional equity shares of Fedfina, constituting up to 45 per cent of the share capital in the company. Read More

2:01 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	34,245.89	-131.10	-0.38
S&P BSE SENSEX 50	10,761.43	-37.49	-0.35
S&P BSE SENSEX Next 50	29,723.81	-369.32	-1.23
S&P BSE 100	10,488.35	-50.14	-0.48
S&P BSE Bharat 22 Index	3,213.44	-33.96	-1.05

(Source: BSE)

1:42 PM

DHFL skids over 16 percent

1:31 PM

Q2FY19 result preview

Profit for our coverage universe excluding volatile components such as commodities and corporate banks is likely to decelerate from 13% YoY in Q1FY19 to -1% YoY in Q2FY19. Barring IT, retail banks and NBFCs, almost all sectors are likely to witness a slowdown in profit growth. The slowdown is more pronounced in domestic auto, which is likely to post flat profit growth (versus 20% average growth over the past four years). Apart from this, growth in cement, pharma and industrials is likely to remain weak (<5%). Export auto, corporate banks, telecom and airlines are likely to report deep profit contraction

(Source: Edelweiss Securities)

1:30 PM

Axis Securities on Infosys

·         Strong deal wins in Financial services ( 32% of revenue): Growth is likely to revive from Q2 on the back of strong deal wins in the quarter (USD 446 mn) and continued momentum in tier-II and regional banks

 

·         Margin to gradually improve: Given an array of margin levers on tap (offshore mix, onsite pyramid, stronger growth in high-margin digital business, automation, operating leverage with stronger revenue growth, and INR depreciation), we expect margin performance to gradually improve through the course of the year to the top of the guided range ( 22-24%)

 

·         North America (60% of revenue) to witness broad-based recovery: Management highlighted, growth in Financial Services is likely to pick up on the back of healthy deal wins (USD 446 mn) with strong traction in regional and tier-2 banks. Further, Retail, Energy and Utilities are also seeing strong traction which should drive better growth in FY19.

 

·         Infosys has signed a definitive agreement to acquire Fluido, a Salesforce advisor and consulting partner in Nordics. The acquisition will expand Infosys’ capabilities in key geographies like Finland (Espoo), Denmark (Copenhagen), Sweden (Gothenburg), Norway (Oslo) and Slovakia (Banská Bystrica) for services in Salesforce

 

·         We maintain a BUY with a target of Rs 794.

1:16 PM

Russia's VTB Group may bid for the debt-ridden Essar Steel alone

 

Russia's VTB Group is likely to bid alone for the debt-ridden Essar Steel. Earlier the Russian bank was making a plan to take over the company via Numetal Mauritius - which had a Ruia family interest. According to the Supreme Court order, both Numetal and ArcelorMittal will have to first clear all old dues and then bid for Essar Steel. Read More

1:05 PM

NEWS ALERT

Rupee breaches 74/$ level for second time

1:00 PM

NBFCs under pressure; DHFL, Edelweiss Financial fall over 10%

 

Shares of non-banking financial companies (NBFC) were reeling under pressure falling by up to 11% on the BSE after the Reserve Bank of India (RBI) on Friday said that it will revise NBFC asset-liability norms over borrowing-lending mismatch. Dewan Housing Finance Corporation (DHFL), JM Financial, Edelweiss Financial Services, Centrum Capital, Repco Home Finance, Reliance Home Finance, Aditya Birla Money and Indiabulls Ventures have fallen in the range of 5% to 11% on the BSE in intra-day trade on Monday. In comparison, the S&P BSE Sensex was up 0.37% at 34,502 points at 12:22 pm. Read More