MARKETS ON WEDNESDAY: Sensex ends 352 pts lower as trade war fears escalate

All that happened in the markets on Wednesday

1:24 PM

Monetary Policy expectation by Madan Sabnavis, Chief Economist, CARE Ratings

The first bi-monthly monetary policy review for FY19 is to be announced by the RBI on 5th April 2018. We expect status quo in policy stance. The policy review is in the backdrop of higher economic growth, moderation in inflation, increase in bank credit growth, lower bank deposits growth, tight liquidity conditions and increasing GSec yields in FY18. Prospects of interest rate hikes by US Federal Reserve, European Central Bank and Bank of England will also limit the chances of RBI going in for a rate cut

1:10 PM

Sebi's F&O restrictions likely to boost dabba trading in Indian markets

The decision of the Securities and Exchange Board of India (Sebi) to tighten the derivatives framework could provide an impetus to ‘dabba trading’ — an unofficial parallel market. READ MORE

1:05 PM

Akzo Nobel India gains 6% on share buyback plan

Akzo Nobel India has rallied 6% to Rs 1,911 on the BSE in intra-day trade on Wednesday after the company said its board of directors are scheduled to meet on Friday, April 06, 2018, to consider proposal to buy-back its own shares.
 

The primary objective of a share buyback programme is to arrest the fall in the value of a stock by reducing the supply of the stock, which essentially pushes up the share price through a better P/E multiple. The other objective is to improve earnings per share (since the same dividend amount is now distributed among fewer shares). READ MORE

12:49 PM

Mishra Dhatu Nigam lists 3% below issue price

Mishra Dhatu Nigam (MDNL) has made a weak debut by listing at Rs 87, a 3.3% lower against issue price of Rs 90 on the National Stock Exchange (NSE) and the BSE (Bombay Stock Exchange). However, the stock moved higher to Rs 90.90 after its listing. READ MORE

12:32 PM

Experts see up to 15% growth in auto index in FY19; Maruti, M&M top picks

The automobile sector, which witnessed a healthy sales growth in the previous financial year (FY18) led by higher demand from rural markets and the fast growing SUV segment, should continue to do well in the new fiscal year (FY19) as well. READ MORE

12:21 PM

NEWS ALERT Infosys Q4FY18 results

Infosys Limited (NSE, BSE, NYSE: INFY), a global leader in consulting, technology, outsourcing and next-generation services, will announce the results for its fourth quarter and year ended March 31, 2018 on Friday, April 13, 2018 around 4.00 p.m. Indian Standard Time (IST)

12:08 PM

MARKET COMMENT Saurabh Mukherjea, CEO, Ambit Capital

Official estimates which suggest very low unemployment rate in India can often be misleading. An analysis of the labour force participation rate suggests that employment fell after demonetisation and GST. The average value for the labour participation rate in FY17 was 44.3% and this dropped to 41.6% in FY18 with the age groups of 15-19 and 20-24 being the most badly hit. A region-wise analysis also suggests that labour force participation fell sharply in areas where there were healthy participation rates prior to demonetisation. Our findings suggest that the NDA will aggressively promote spending on food subsidies between now and the General Elections. That makes FMCG companies which have a strong rural footprint much more likely to post superior FY19 results compared to FY18

Saurabh Mukherjea, Chief executive officer, Ambit Capital

12:00 PM

Markets at Noon

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	33,413.46	+42.83	+0.13
S&P BSE SENSEX 50	10,722.82	+7.32	+0.07
S&P BSE SENSEX Next 50	33,820.08	+36.94	+0.11
S&P BSE 100	10,663.44	+7.98	+0.07
S&P BSE Bharat 22 Index	3,486.85	-8.75	-0.25

(Source: BSE)

12:00 PM

MARKET COMMENT

Having seen a sign of earnings recovery in 3QFY18 after the transitory impacts of GST/DeMo, we believe 4QFY18 earnings to be crucial for sustaining market valuations. Based on our interactions with the industry and channel checks with different stakeholders, we believe that corporate earnings are unlikely to surprise negatively barring Banking sector, where risk of higher provisioning is there due to change in NPA recognition norms. Low base, improving capacity utilisations, pick-up in infrastructure development activities and improving rural consumption are likely to aid 4QFY18 earnings, in our view.

(Source: Reliance Securities)

11:56 AM

Axis Direct on Infosys

Infosys is trading at discount to its historical average. We believe as the management team stabilises, with key focus on execution of strategic initiatives undertaken by the team along with continued focus on regaining market share, Infosys is in early stage of rerating cycle. We expect growth recovery to be led by BFSI, Energy, and Telecom verticals wherein large deal wins, client mining, and wallet share gain have improved revenue visibility.

 

11:54 AM

Sharekhan on BEL

BEL is expected to witness cost pressures in FY2019E, attributed to the recent wage revision (completed for officer grade employees) and enhancement in gratuity

ceiling. The wage revision is pending for non-officer grade employees, which is likely to be done in FY2019. Further, the increase in civil contracts work to 17-18% in FY2019E from usual 12-13% would impact margins.

We have assumed operating margin of 19% in FY2019 and 20% in FY2020E. Further, reduction in cash balance owing to buyback programme (would lead to lower other income) and increased tax rate would impact overall profitability

11:54 AM

HDFC Securities on Dabur

Dabur has witnessed many challenges in its business during the last two years, on account of slow rural demand (~45% of domestic), disruption owing to Patanjali, greater impact of demonetisation than other peers owing to high wholesale dependence and weak international business. As a result, Dabur’s consolidated revenue declined average ~2% during the eight quarters. Better revenue growth, stable inflation and a favourable product mix would expand the EBITDA margin by ~200bps over FY18E-20E.

11:53 AM

Reliance Securities on NBCC

NBCC continues to be a robust growth story owing to its PWO status and niche presence in redevelopment of government’s old colonies. Notably, order book stands at Rs800bn (13.2x TTM revenue) and offers unmatched growth visibility, going ahead. Its key redevelopment projects i.e. Pragati Maidan (Rs25bn), Nauroji

Nagar (Rs30bn) and Maharashtra Irrigation (Rs10bn) projects were started, which will start contributing to revenue from current quarter. We maintain our fundamental BUY rating on the stock with a Target Price of Rs 295

11:51 AM

MARKET COMMENT

India Ratings and Research (Ind-Ra) has revised its FY19 economic growth forecast to 7.4% from 7.1% earlier. From the production side, higher growth in agriculture (expectation of normal rainfall and assumption of even rainfall distribution over space and time) and industrial sectors is expected to push the overall economic growth. From the expenditure side, the boost is expected to come from both private and government expenditure coupled with green shoots emerging in investment spending.

 

However, the economy is facing a number of headwinds, ranging from the non-performing assets of the banking system and elevated bond yields to increased trade protectionism and tightening global financial conditions.

11:50 AM

Global Indices

INDEX	DATE	LATEST	PREV CLOSE	CHG(PTS)	CHG(%)
SWISS MARKET	03-04-2018	8630.93	8740.97	-110.04	-1.26
SHANGHAI COMPOSITE	03-04-2018	3136.63	3163.18	-26.55	-0.84
DAX	03-04-2018	12002.45	12096.73	-94.28	-0.78
ATX	03-04-2018	3402.44	3428.53	-26.09	-0.76
TAIWAN WEIGHTED	03-04-2018	10821.53	10888.27	-66.74	-0.61
STRAITS TIMES	03-04-2018	3412.15	3430.76	-18.61	-0.54

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