MARKET WRAP: Sensex ends 140 pts down, FMCG stocks slip; Rupee hits new low

The benchmark indices settled lower as investors stayed cautious due to sliding rupee, surging bond yields, and oil prices.

The S&P BSE Sensex ended at 38,018, down 140 points while the broader Nifty50 index settled at 11,477, down 43 points.

Earlier in the day, the rupee pared its initial gains to drop to a fresh all-time low of 71.97 against the US dollar in intra-day deals.

Among key stocks, Reliance Industries (RIL) fell around 1.5 per cent at Rs 1,224 levels and was among the top Sensex losers.

FMCG stocks weak

In sectors, the Nifty FMCG index slipped 0.9 per cent, weighed by fall in Godrej Consumer Products and Hindustan Unilever (HUL), which lost 2.7 per cent to end the day at Rs 1,606 levels.

While most analysts believe the fundamentals of FMCG stocks continue to be strong, the concern is largely on absolute valuations and the premium the sector gets, as compared to the broader markets. READ MORE HERE

 

India's services growth slows in August

India's dominant services sector expanded at a slower pace last month than in July as weaker demand and rising input costs kept a lid on hiring, a private survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers' Index (PMI) declined to 51.5 in August from a 21-month high of 54.2 in July.

Global Markets
 

Stock markets fell in Asia on Wednesday and the safe-haven dollar hovered near a two-week high as heightened worries over international trade conflicts and emerging market weakness curbed investors' appetite for riskier assets.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1 per cent, hitting a two-week trough. Japan's Nikkei shed 0.25 per cent. The Shanghai Composite Index retreated 0.9 per cent, weighed down by expectations the United States will impose more tariffs on Chinese goods this month, adding to pressure on China's cooling economy.

(with wire inputs)

3:47 PM

Nifty FMCG index ends 0.87% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS()	LOSS(%)
GODREJ CONSUMER	1350.05	1399.15	-49.10	-3.51
GLAXOSMITH C H L	7250.10	7499.45	-249.35	-3.32
HIND. UNILEVER	1606.25	1651.20	-44.95	-2.72
BRITANNIA INDS.	6196.50	6344.05	-147.55	-2.33
GODREJ INDS.	603.00	612.15	-9.15	-1.49

3:44 PM

Nifty sectoral gainers and losers of the day

3:38 PM

BSE Sensex: HUL, RIL among top losers of the day, YES Bank top gainer

3:37 PM

Market at close

The S&P BSE Sensex ended at 38,018, down 140 points while the broader Nifty50 index settled at 11,477, down 43 points.

3:16 PM

Reliance Infra rallies 6% as CRISIL changes ratings for NCDs

Shares of Reliance Infrastructure have moved 6% higher to Rs 479 on the BSE, after the company said the rating agency Crisil withdrawn its ‘D’ rating for non-convertible debentures (NCDs) worth of Rs 7.10 billion.
 

The company has repaid the NCDs from the funds received from the sale of Integrated Mumbai Distribution Business to Adani Transmission. READ MORE

2:59 PM

Financial crisis explained: How greedy US banks crippled world economy

It has been 10 years since the Lehman Brothers shut shop. People who faced the global recession at that time say it was not their fault and still had to leave their homes. The housing market in the USA crashed and the whole world's economy went for a toss. Three million people in the US lost their jobs and five million lost their homes. But, how did it all happen? READ HERE

Lehman Brothers (Photo: Reuters)

2:55 PM

Motilal Oswal Research on MAS Financial Services (MASFIN)

We believe MASFIN has all the ingredients of a good investment: (a) a small base and presence in well-developed states for strong growth, (b) relentless management focus on generating sustainable, high return ratios, (c) healthy capitalization and d) consistent and healthy asset quality, despite catering to the lower end of the socio-economic customer segment. We maintain our estimates for FY19/20 and reiterate Buy with a target price of Rs 780 (24x Jun’20E EPS, implied 4.3x Jun’20E BV).

2:50 PM

Economists expect RBI to hike rates in Oct policy as rupee fall continues

With the continued fall in the rupee, economists and bond market participants expect the Reserve Bank of India (RBI) to hike rates in its October policy. The rupee closed at 71.57 a dollar, down from its previous record close of 71.18. Other emerging markets currencies also fell against the dollar. READ MORE

2:49 PM

COMMENT Nomura on rupee

•  A deteriorating EM risk backdrop and pressure on current account deficit currencies has led USD/INR to multi-year highs. We see risk of continued INR depreciation in the near term and enter a short-dated long USD/ INR call spread position.

 

•  Local factors for depreciation include limited intervention by the Reserve Bank of India (RBI) and limited concerns, in our view, over FX depreciation (watch this space), a lack of urgency to hike rates, rising political risks, and a large trade deficit with a higher oil price and portfolio outflows.

 

•  However, there are reasons to expect INR depreciation to be controlled, given the substantial space for policy action by the RBI and government (if desired). Option positioning risk (selling of high strike INR puts) is also less of an RBI concern, while the dual deficits are a drag on INR, but have become less so over the past five years.

2:47 PM

Stock view: Balkrishna Industries

The Board of Directors of Balkrishna Industries (BIL) has approved a capex outlay of Rs 1,700 crore, which will be completed over 30 months. Incorporating the revised capex outlay disclosed by the company and consequent decline in other income, we change our PAT estimates for FY18-20E. We now expect BIL to clock PAT CAGR of 24.4% vs. 30.3% in the past. We also reduce our valuation multiple, to value BIL at 21x P/E on FY20E EPS of Rs 59.2 and assign a target price of Rs 1250 with a HOLD rating on the stock.
 

(Source: ICICI Securities)

2:46 PM

Amazon follows Apple Inc, hits $1 trillion market value milestone

Amazon.com Inc on Tuesday became the second US company to reach $1 trillion in stock market value, just weeks after Apple Inc hit the same milestone on Aug 2.

 

Shares in the world's largest online retailer last traded up 1.4 per cent at $2,041.68. Its shares hit the $2050.2677 level to give its stock a value of $1 trillion. READ MORE

 

2:45 PM

News rover

Centrum Financial Services Ltd, the NBFC arm of the Centrum Group, a leading domestic integrated financial services organisation, signed an agreement to acquire L&T Finance’s Supply Chain Finance business. The business has a loan book of approximately Rs. 800 crore, a staff strength of 50 professionals and operates out of 16 cities in India. L&T Finance Ltd. is a subsidiary of L&T Finance Holdings Ltd

2:44 PM

Edelweiss on road construction sector

While FY18 marked stellar NHAI project awards (up ~100% by value), our recent meeting with the authority indicates FY19 may be a period of consolidation. While 84 out of the 104 hybrid annuity (HAM) projects awarded till date have achieved financial closure, banks/developers’ limited ability to absorb incremental HAM projects means EPC may be the preferred mode of project awards in FY19. NHAI is targeting FY19 spend of ~INR1.1tn, up 32%.

Factors such as upcoming elections and limited appetite for HAM projects are likely to limit FY19 project award to 4,000–5,000km (versus ~7,400km in FY18), in our view. That said, our analysis reveals reasonable revenue visibility for FY21 even after assuming conservative order inflows for FY19/20. Developers with strong financial health such as Sadbhav Engineering, KNR Constructions and Ashoka Buildcon remain the best plays on the Indian road space in our view.

2:37 PM

Top losers in BSE Sensex:

COMPANY	LATEST	PREV CLOSE	LOSS()	LOSS(%)
HIND. UNILEVER	1601.20	1651.40	-50.20	-3.04
TATA MOTORS-DVR	139.00	142.65	-3.65	-2.56
BHARTI AIRTEL	368.55	377.75	-9.20	-2.44
KOTAK MAH. BANK	1236.00	1259.70	-23.70	-1.88
TATA MOTORS	257.15	262.05	-4.90	-1.87

2:29 PM

Nifty FMCG index down over 1%