MARKETS ON TUESDAY: Sensex, Nifty gain in last leg of trade; PSU banks rise

All that happened in the markets

1:58 PM

Market Check

S&P BSE Sensex	33,187.87		-0.20%
Nifty 50	10,186.60		-0.25%
S&P BSE 200	4,478.05		-0.08%
Nifty 500	9,016.30		-0.08%
S&P BSE Mid-Cap	16,218.00		0.20%
S&P BSE Small-Cap	17,446.79		0.30%

1:46 PM

Point-by-point analysis of Sebi's new corporate governance framework

 

Capital market regulator Securities and Exchange Board of India (Sebi) has approved sweeping changes to the corporate governance framework for listed companies. The new measures are based on recommendations made by a 25-member committee headed by Uday Kotak, executive vice chairman and managing director of Kotak Mahindra Bank. The panel had suggested 81 key changes and new measures to improve the governance standards at India Inc.

 

Some of the proposals faced oppositions from industry and other regulators after the committee made its report public in October 2017. Sebi had to take all stakeholders on board to ensure implementation of the measures suggested the Kotak panel. As a result, the market regulator couldn't implement all the 80 recommendations in toto. READ MORE

1:30 PM

Lupin extends gain as UK MHRA completes inspection at Goa unit

 

Lupin was up 3% to Rs 798, extending its Monday’s 5% surge on the BSE, after the company announced the successful completion of the inspection by the UK MHRA at its Goa facility in March, 2018.

 

There were no critical or major observations in the inspection, Lupin said in a press release.

 

"We are committed to maintaining truly global quality standards at our manufacturing units. The successful inspection by UK MHRA is a meaningful development for our Goa plant,” said Nilesh Gupta, Managing Director, Lupin.READ MORE

1:15 PM

First quarter equity fund-raising off to best start in eight years

 

Equity issuances by domestic companies totalled $8.7 billion in the first quarter of 2018, a 2.2 times jump over the corresponding period of last year, data provided by Thomson Reuters showed.

 

The first quarter equity fund-raising was also the most since 2010, when $8.9 billion was raised. Initial public offerings (IPO) raised a total of $2.8 billion, a 4.5 times jump over the same period last year.

 

This was the best first quarter for IPOs since 2008, when $3.7 billion worth of IPOs had hit the market. READ MORE

12:58 PM

Asia Check

 

Asian shares slipped on Tuesday amid escalating trade tensions and concerns about tech firms, although regional index declines were modest compared with those of their Wall Street counterparts as investors focused on global growth prospects.

 

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.35 per cent on Tuesday, compared with losses of more than 2 per cent on each of the three Wall Street indices overnight.

12:44 PM

Tyre stocks in focus; MRF hits record high, up over 3%

 

Shares of tyre manufacturer were in focus in otherwise subdued market with MRF hitting new high of Rs 75,474, up 3.3% on the BSE on Tuesday. The tyre major has surpassed its previous high of Rs 74,499 recorded in December 26, 2017.

 

Among other tyre stocks, Ceat and Apollo Tyres were up 3%, TVS Srichakra, JK Tyre & Industries, Goodyear India, Govind Rubber and Balkrishna Industries up in the range of 1% to 2% on the BSE. READ MORE

12:33 PM

IT firms' revenue to get cross-currency boost, FY19 outlook key

 

We expect IT firms under our coverage universe to post a combined 3.1% QoQ rise in USD revenue in 4QFY18. We expect the Top-5 IT firms to post 1.9-3.5% QoQ USD revenue growth in reported terms, with Tech Mahindra to lead. Mid-sized firms will see variation, with Cyient and Mindtree likely lead (8.2%/4.1% QoQ USD revenue growth, respectively). 

 

Cross-currency movements were positive in 4QFY18, with the USD depreciating against all major currencies including the EUR (4.1% QoQ depreciation on the quarterly average rate), GBP (4.5% QoQ) and the AUD (2.4% QoQ). The INR saw slight appreciation of 0.6% QoQ vs the USD. READ MORE

12:14 PM

ICICI Bank: Analysts remain bullish despite near-term challenges

 

The recent turn of events at ICICI Bank has dented sentiment with most analysts turning cautious on the stock from a near-term perspective. Also, with investigative agencies entering the picture, they believe, the loan disbursement process at the bank can also come under scrutiny. All this, they feel, will remain a near-term overhang for the stock.

 

The scrip tumbled nearly six per cent on Monday to Rs 262 levels, its biggest single-day drop in three years amid Central Bureau of Investigation (CBI) initiating a preliminary enquiry into alleged links between the bank’s Chief Executive Officer (CEO) Chanda Kochhar and the Videocon group. READ MORE

12:00 PM

Market Check

S&P BSE Sensex	33,187.87		-0.20%
Nifty 50	10,186.60		-0.25%
S&P BSE 200	4,478.05		-0.08%
Nifty 500	9,016.30		-0.08%
S&P BSE Mid-Cap	16,218.00		0.20%
S&P BSE Small-Cap	17,446.79		0.30%

11:49 AM

Kotak Securities on Infotmation Technology (IT) sector

The March 2018 quarter will be better than the March 2017 quarter. Depreciation of USD against other currencies will provide cross-currency tailwind of 60-130 bps and 20-50 bps for margins. We expect companies to start off on a conservative note for FY2019E revenue growth guidance. Expect 6-8% c/c revenue growth guidance from Infosys and 8-10% from HCLT with no change in operating margin guidance band. We maintain our constructive view on Infosys and Tech Mahindra

11:49 AM

MARKET COMMENT Kunal Shah, CFA, Fund Manager - Debt, Kotak Mahindra Life Insurance

The MPC policy statement should continue to be on a neutral side as inflation has surprised on the lower side with average Q4 CPI Inflation seen at 4.5% compared to RBIs projection of 5.1%. On the other hand growth prospects are improving and monetary supports for growth are not vehemently called for. We think MPC will only be able to adopt hawkish stance if inflation surprises towards 5.5% by year end and likelihood of which are minimal today. 

 

RBI will also announce the roadmap for FPI limit hikes and its specifications. Currently, markets are expecting FPI limit hikes of 1-2% with government calling for 2% hike and RBI favouring 1% (% of outstanding government bonds)

11:48 AM

Emkay Global on fertiliser sector

Government has increased subsidy on Phosphorous (P) and Sulphur (S) by 27% and 20%, respectively on the back of rising prices of Phosphoric Acid and Sulphur. However, subsidy on Potash (K) has been cut by 10%. Subsidy on Nitrogen (N) has been kept unchanged. We remain positive on companies that are backward integrated in phosphoric acid and have higher revenue share from NPK fertilisers, as they enjoy brand equity and less competition compared to DAP/MOP. Our preferred picks are Coromandel International and Deepak Fertilisers.​

11:45 AM

Prabhudas Lilladher on banks

Spreading of provisioning for MTM losses over four quarters is a positive step as Q4FY18 will see reversal of provisions and postpone half in H1FY19. We believe, reactions on stocks will be mildly positive especially for PSBs but NPA provisions and asset quality to weigh higher compared to MTM provisions, which has seen its reaction in fundamentals in Q3FY18 itself and further visibility on asset quality in Q4FY18 & FY19 will be crucial

11:45 AM

More pain ahead for drug makers in FY19 after a challenging FY18

 

If FY18 was a forgettable year for the pharma sector, FY19 might not be any better. This is on account of improved pace of approvals from April 1, 2018 as well as competition even for drugs, which are difficult to make. New guidelines from the US Food and Drug Administration had led to the slowing down in drug approvals over the last couple of months as companies took time to adjust. 

 

However, as companies comply with the new guidelines, the approval time for drugs from April is expected to come down further increasing competitive pressures. Anubhav Aggarwal and Chunky Shah of Credit Suisse believe that as first cycle approvals (after the first inspection) increase further, the period of high profits on few drugs should shorten and impact industry profitability significantly. They expect a 50 per cent increase in ANDA approvals over the next two years and price erosion to be high in double digits. READ MORE

11:30 AM

HDFC Life joins Rs 1-trillion market cap league

 

HDFC Standard Life Insurance Company (HDFC Life) entered the elite club of Rs 1-trillion market capitalization (market-cap) on the BSE, as its share price hit a new high of Rs 508 on the BSE in early morning trade on Tuesday.

 

The stock of HDFC Group Company rallied 20% in last seven trading sessions as compared to a marginal 0.46% rise in the S&P BSE Sensex. HDFC Life trading at its highest level since listing on November 17, 2017, up 75% against issue price of Rs 290 per share. It surpassed its previous high of Rs 493.75 recorded on January 1, 2018 in intra-day deal. READ MORE