MARKET WRAP: Sensex sinks 770 pts on weak Q1 GDP nos, Nifty ends at 10,798

All that happened in markets today.

10:45 AM

ICICI Bank trades over 3% lower

10:43 AM

Ashok Leyland falls over 2% as domestic sales down 50% in August

10:41 AM

ONGC clarifies on fire at Maharashtra-based plant

10:40 AM

Glaxosmithkline Pharma gains 2% in a weak market

10:30 AM

August Sales Data | Ashok Leyland

-- Total domestic sales at 8,296 units, down 50% YoY

-- Total domestic and export sales at 9,231 units, down 47% YoY

10:26 AM

Market check

10:24 AM

Auto stocks fall up to 5% as sales see steep fall in August

Shares of automobile companies faced selling pressure in Tuesday's early morning trade, falling 2 to 5 per cent, after data showed that sales of four- and two-wheelers almost halved in August, compared to the equivalent month last year.

 

Sales for India’s largest carmaker, Maruti Suzuki, fell by 32.7 per cent, the worst decline for the company ever to 106,413 units in August this year, compared to 158,189 units in the same month last year. Consequently, the company's stock today dipped 1.88 per cent in intra-day trade on the BSE to Rs 6,006.35 apiece. READ MORE

10:20 AM

PSB merger plan: OBC, Indian Bank, PNB dip up to 7%; United Bank gains 15%

Shares of public sector banks, including Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), Canara Bank, Indian Bank, and Union Bank of India, tanked up to 7 per cent on the BSE on Tuesday after the government on Friday announced mega-merger plan for PSBs in post-market houts on Friday.

 

Among individual stocks, OBS and Indian Bank shed 7 per cent, while shares of Allahabad Bank, Union Bank of India, Canara Bank, and PNB were down in the range of 2 to 6 per cent. READ MORE

10:10 AM

ONGC slips nearly 2% after a fire breaks out at its Navi Mumbai plant

10:02 AM

WEB EXCLUSIVE :: Cyclical or structural? Decoding the nature of India's economic slowdown

India’s real or inflation-adjusted gross domestic product (GDP) grew at 5 per cent in the June 2019 quarter of financial year 2019-20 (Q1FY20), the slowest growth in six years (25 quarters). In nominal terms, the growth stood at 7.99 per cent, lowest since December 2002. With this, fears of the slowdown being a more structural one than a cyclical one have surfaced READ MORE

10:01 AM

IIFL on Banking sector

In line with government earlier plan to reduce the no of PSU banks, the government’s decision to merge 10 banks into 4 is on expect lines. Except for growth on CASA, and reduction in cost to income ratio, the previously done merger of Bank of Baroda with Vijaya Bank and Dena Bank did not get appreciated by the market. We have not seen any significant fall in the credit cost leading to continued pressure on the stock price of BOB.

Merger of relatively better run Indian Bank with Allahabad Bank is disappointing. It may be lack of appetite for some of the weak bank that they were left out of this merger exercise. Considering that still three fourth of saving accounts are with PSB and that there could be significant cost savings by merger, we do see this to be positive for the sector for a longer term perspective. Immediate release of funds for growth will ensure improvement in loan growth for the banks

10:00 AM

CARE Ratings' view on economic developments

The measures announced last week which address issues of the corporate sector and doing business environment will definitely help to an extent in the medium-term.  Auto stocks were not too enthused in the market. The foreign direct investment (FDI) framework that has been introduced will work with a lag and may not be significant in terms of propping investment. The bank mergers announced along with the new governance structures and capital infusion may be seen more as housekeeping that will make the PSBs stronger but may not be able to reverse the trend in GDP growth presently READ MORE HERE

9:58 AM

COMMENT :: Nomura on PSBs

We view consolidation of PSBs as a big positive as many PSBs were duplicating each other’s business model. Hence, consolidation should enable scale, help reduce cost and lead to more efficiency gains. Although this is a medium-term positive, in the short-run, consolidation may divert attention of PSBs away from growth towards merger.

 

Another challenge will likely be ensuring greater synergies and suitably handling bad assets of the merged banks. In our view, governance reforms also need to be implemented in practice, not just on paper, by these merged entities. READ MORE HERE

9:57 AM

COMMENT :: Jefferies on PSBs

The government has merged 10 banks into 4, and with prior SBIN & BOB merger, reduces SOE Banks from 27 to 12. Reallocation of capital & same tech platform at banks likely drove the choice of merging entities. While the government has allocated additional capital & pushing for loan-takeover or co-lending, we expect slowdown in loan growth as witnessed in earlier mergers as well. This can't be good at a time when liquidity flow is severely constrained.

9:56 AM

COMMENT :: Credit Suisse on PSB merger

Given the limited flexibility on restructuring and rationalisation, meaningful cost synergies from PSU bank mergers are unlikely. While the large recap improves the capacity for banks to grow loans, recent experience of SBI and BOB indicates that focus on integration impacts near-term growth.

With NBFC exposure of all four merged entities continuing to be over 10% of loans, credit flow to NBFC will remain a challenge. We, therefore, continue to remain selective in the NBFC space (HDFC, LIC Hsg, MMFS) and prefer private banks (ICICI, Axis, and HDFCB).