MARKET WRAP: Sensex declines 369 pts, Nifty ends at 10,662 as banks plunge

Heavy selling in financials, auto and pharma counters saw the benchmark indices ending in the negative territory for the second consecutive session on Monday. The S&P BSE Sensex lost 369 points or 1.02 per cent to end at 35,657. ICICI Bank, Reliance Industries (RIL), HDFC and Bajaj Finance contributed the most to the index's decline while TCS, L&T and Coal India gave the much-needed support. 

On NSE, the benchmark Nifty50 index slipped below 10,700 level to settle at 10,662 with 36 components ending in the red and 14 in the green.

Among sectors, Nifty Bank index ended nearly 2 per cent lower at 26,653, dragged by Indian Bank and Central Bank of India. Also, Nifty Pharma closed 2.5 per cent lower at 8,664, weighed by Piramal Enterprises and Cipla.

BUZZING STOCKS

Shares of ICICI Bank fell lower for the eighth straight day on the back of heavy volumes. The stock, eventually settled at Rs 343.45 apiece, down nearly 4 per cent. 

This apart, graphite electrode manufacturer HEG continued to trade under pressure, falling 20 per cent to Rs 2,194 on the BSE on the back of heavy volumes.

After a heavy beating in the previous session, ZEE Entertainment Enterprises ((ZEEL) rallied in the trade after the management clarified there had been no default in repayment of loans by the parent Essel Group and that lenders had shown faith in the Indian promoters. The stock ended nearly 17 per cent higher at Rs 372.50 apiece on BSE.
 

In the broader market, S&P BSE Midcap index closed 270 points or 1.84 per cent lower at 14,412 levels, while S&P BSE SmallCap index ended at 13,722, down 279 points or 2 per cent. 
 

Global Markets

Asian shares ticked up on Monday though they retreated from earlier highs as relief on news of a deal to reopen the US government following a prolonged shutdown gave way to edginess before a key round of Sino-US trade talks. 

MSCI’s broadest index of Asia-Pacific shares outside Japan was almost flat, pulling back after hitting its highest since October 4 early in the session.

China’s benchmark Shanghai Composite and Hong Kong’s Hang Seng lost almost 0.2 per cent while South Korea’s KOSPI was largely flat. Japan’s Nikkei closed 0.6 per cent lower while Australian financial markets were shut for their ‘Australia Day’ holiday.

Oil Prices

Oil prices fell 1 per cent after US companies added rigs for the first time this year, a signal that crude output may rise further, and as China, the world’s second-largest oil user, reported additional signs of an economic slowdown.

(with Reuters input)

3:56 PM

Sectoral gainers and losers on NSE

3:55 PM

S&P BSE Sensex: Top gainers and losers

3:38 PM

Market at close

The S&P BSE Sensex lost 369 points or 1.02 per cent to end at 35,657 while NSE's Nifty50 index dropped 119 points or 1.10 per cent to close at 10,662.

3:18 PM

Rabobank International on US Fed rate hike

We no longer expect any rate hike this year. The Fed’s patience suggests that they are aiming for a summer hike. However, recent movements in the yield curve confirm our view that we are getting closer to a recession. Therefore, we doubt that the economic data will be strong enough to build a case for a restart of the hiking cycle.

We expect the Fed to put a halt to balance sheet normalization in the second half of the year, once the case for a summer hike has collapsed. In 2020 we expect the Fed to start cutting rates, but probably too late to avert a recession during the course of the year.

3:11 PM

HDFC Securities on Mphasis

We maintain positive outlook on Mphasis based on growth acceleration in Direct Core (highest ever sequential growth) supported by strong new client addition (including Blackstone portfolio), strategic partnership with DXC driving growth with core system transformation and cloud migration projects (currently <10% share of the USD 3.5bn addressable spend) and no negative impact seen from Luxoft, and continued improvement in operating efficiencies (G&A, pyramid rationalisation, utilisation) to improve profitability.

2:51 PM

Emkay Global on PVR's Q3 results

This quarter's financial performance is not comparable with the preceding quarters due to the consolidation of SPI Cinemas. However, operating performance was marginally better than expected. Standalone footfalls growth of 22.4% yoy was ahead of our estimates. We have aligned our estimates with the recent reduction in GST for ticket sales, and we continue to believe that exhibitors will pass on the entire benefits to viewers before they start implementing price hikes. We maintain our Hold rating on rich valuations, with a revised target price of Rs1,637 (12x FY21E EV/EBITDA)

2:41 PM

PM Modi's record debt sales before polls to pressure Indian bonds

After posting the best quarter in four years, Indian bonds are pitted against a familiar foe: likely record debt sales by the government to finance populist measures before national elections due by May. Prime Minister Narendra Modi’s administration may announce Friday plans to borrow Rs 6.4 trillion ($90 billion) for the next fiscal year in its budget, according to the median estimate of 15 strategists in a Bloomberg News survey. That compares with a revised Rs 5.35 trillion for the current year CLICK FOR MORE

2:39 PM

RESULTS CORNER RBL Bank Q3 net up 36% at Rs 225 crore on better interest margins

Private sector lender RBL Bank’s net profit rose by 36 per cent at Rs 225.2 crore for the third quarter ended December 2018, on the back of improvement in interest margins and robust other income READ MORE HERE

2:36 PM

Wockhardt plunges post December quarter results announcement

2:04 PM

HEG nears 52-week low; stock tanks 18%; down 31% in three sessions

Shares of graphite electrode manufacturer HEG continue to trade under pressure, falling 18 per cent to Rs 2,244 on the BSE on back of heavy volumes. The stock is currently trading close to its 52-week low of Rs 2,214 touched February 2, 2018 in intra-day trade.
 

In past three days, HEG tanked 31 per cent from level of Rs 3,275, as compared to 1 per cent decline in the S&P BSE Sensex. The stock corrected 55 per cent from its all-time high price of Rs 4,950 on October 16, 2018 in intra-day deal READ MORE HERE

1:55 PM

Pharma, bank stocks plunge

1:53 PM

Key index levels

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	35611.15	36025.54	-414.39	-1.15
	14066.07	14260.83	-194.76	-1.37
	14407.68	14681.82	-274.14	-1.87
	13725.00	14000.20	-275.20	-1.97
	4113.71	4165.35	-51.64	-1.24

1:34 PM

Elara Capital on Maruti Suzuki India

We reiterate Buy with a new TP of INR 7,827 from INR 9,128 based on 23x ([from 25x] and at a 12% discount to the past three-year average as growth slows) weighted average FY20-21E P/E as we roll forward. Key risks remain sustained industry slowdown and market share loss in PV.

1:23 PM

HDFC Securities on M&M Financial Services

M&M Financial Services' (MMFS) impressive performance appears even better when viewed contextually: 

 

(1) Disbursal growth sustained (in fact jumped QoQ) while fuel prices increased and auto OEMs reported sluggish growth (indicating mkt share gains); and

(2) NIMs were sequentially flat while CoFs rose as liquidity tightened for NBFCs. 

 

MMFS’ strong 3Q performance, corroborated by our ground check reinforces our constructive thesis. Maintain BUY with an SOTP of Rs 498 (2.75x Dec-20 ABV of Rs 174.5 + Rs 18 for MIBL). Given the healthy business traction and better asset quality performance, the stock should be buoyant.

1:16 PM

Top gainers (BSE 500)

COMPANY	PRICE (Rs)	CHG (rs)	CHG (%)	VOLUME
ZEE ENTERTAINMEN	350.95	31.60	9.90	9761342
ESSEL PROPACK	106.25	8.15	8.31	65810
SUNDARAM CLAYTON	3051.25	130.50	4.47	1399
DLF	164.00	6.95	4.43	566496
REDINGTON INDIA	71.70	2.25	3.24	7601