MARKET WRAP: Sensex falls 537 pts, Nifty ends at 10,975 as financials crack
In the broader markets, the S&P BSE MidCap index settled 2.4 per cent lower while the S&P BSE SmallCap index slipped 2.7 per cent on Monday.
 "Stock market")
12:59 PM
Why YES Bank, DHFL did not hit lower circuit limits on Friday?
Equity market witnessed a roller coaster ride on Friday with stocks across the board falling like a pack of cards. The S&P BSE Sensex saw a jaw-dropping 1,500-point swing, while shares of YES Bank and DHFL, bled a whopping 34 per cent and 60 per cent, respectively in intraday trade before recovering a bit.
However, the trend left many of us thinking why these stocks did not hit lower circuit limits, like it happens usually. Also, what are circuit filters/circuit limits, what are its significance and how do they work? READ HERE
12:39 PM
TCS hits new high; Infosys up 3% in a weak market
Shares of information technology (IT) companies were trading higher in an otherwise weak market on Monday after the Reserve Bank of India (RBI) shortlisted five IT firms including Infosys and Tata Consultancy Services (TCS) for implementation of a centralised information and management system (CIMS) for seamless data collection and validations. IT giant TCS hit a new high of Rs 2,172, up 3%, extending its Friday’s 1.3% gain on the BSE. READ MORE
12:31 PM
Crude oil update
Oil prices gained as OPEC's leader Saudi Arabia and its biggest oil-producer ally outside the group Russia effectively rebuffed US President Donald Trump's calls for action to lower prices.
Brent crude futures gained $1.03 to $79.83 a barrel, while US crude futures rose 80 cents to $71.58.
12:13 PM
The United States and China imposed fresh tariffs on each other's goods on Monday, as the world's biggest economies showed no signs of backing down from an increasing bitter trade dispute that is expected to knock global economic growth. READ MORE
China accuses US of 'trade bullyism' as both sides impose fresh tariffs
The United States and China imposed fresh tariffs on each other's goods on Monday, as the world's biggest economies showed no signs of backing down from an increasing bitter trade dispute that is expected to knock global economic growth. READ MORE
12:09 PM
Govt to take all measures to ensure liquidity for NBFCs, MFs: Arun Jaitley
Seeking to calm the nerves of worried investors, Finance Minister Arun Jaitley said on Monday that the government would take all measures to ensure adequate liquidity for non-banking financial companies (NBFCs) and mutual funds.
The minister's remarks come in the wake of stock markets witnessing sudden and stiff fall in intra-day trade on Friday over concerns of liquidity crisis being faced by some of the NBFCs. READ MORE
12:00 PM
Market at Noon
(Source: BSE)
| Index | Current | Pt. Change | % Change |
| S&P BSE SENSEX | 36,513.52 | -328.08 | -0.89 |
| S&P BSE SENSEX 50 | 11,537.38 | -116.56 | -1.00 |
| S&P BSE SENSEX Next 50 | 32,322.99 | -807.52 | -2.44 |
| S&P BSE 100 | 11,268.01 | -138.64 | -1.22 |
| S&P BSE Bharat 22 Index | 3,544.64 | -14.50 | -0.41 |
(Source: BSE)
11:50 AM
Stock of the day NBFCs extend fall
Shares of non-banking financial companies (NBFCs), including housing finance companies (HFCs), continue to remain under pressure for the fifth straight trading day on the bourses amid the ongoing crisis at the Infrastructure Leasing and Financial Services Ltd (IL&FS).
Bajaj Finance, Indiabulls Housing Finance, Reliance Home Finance, Central Bank of India, Cholamandalam Investment and Finance Company and Ujjivan Financial Services were down in the range of 5% to 15% on the National Stock Exchange (NSE) in intra-day trade. READ MORE
11:37 AM
WEB EXCLUSIVE As competition in NBFC space rises, asset quality bound to take a hit, writes Ambareesh Baliga
Last week, we witnessed the contagion effect of the tightness in money market amid continuing financial crisis at IL&FS. This led to stock prices of most Housing Finance and NBFCs witnessing heavy selling losing 10-60 per cent range of Rs 2-3 bn) in the secondary market at a higher yield due to tight liquidity in the system. Other housing finance companies and NBFCs too witnessed sell-off, as borrowing cost for NBFCs is expected to rise and they could face challenges in raising funds. Commercial papers is a major source of funding for NBFCs and HFCs READ MORE HERE
Last week, we witnessed the contagion effect of the tightness in money market amid continuing financial crisis at IL&FS. This led to stock prices of most Housing Finance and NBFCs witnessing heavy selling losing 10-60 per cent range of Rs 2-3 bn) in the secondary market at a higher yield due to tight liquidity in the system. Other housing finance companies and NBFCs too witnessed sell-off, as borrowing cost for NBFCs is expected to rise and they could face challenges in raising funds. Commercial papers is a major source of funding for NBFCs and HFCs READ MORE HERE
11:25 AM
Investec Securities on NBFCs
NBFC stocks were hit on Friday driven by liquidity concerns, rising funding costs, wide conjecture and valuation concerns. Analysing system liquidity and interest rates, we see there’s nothing to be alarmed about (nowhere close to August 2013). With respect to NBFCs, the liquidity and capital position looks comfortable with majorly retail assets and some funded by retail liabilities.
Even in stress scenario of incremental cost of funding going up by 250bps, NBFCs are expected to remain profitable. Valuations declined in the last twelve months with several now trading below the mean. NBFCs’ high dependence on corporate debt markets is a concern. NBFCs with strong parentage and deposit franchise are well placed if liquidity tightens further.
NBFC stocks were hit on Friday driven by liquidity concerns, rising funding costs, wide conjecture and valuation concerns. Analysing system liquidity and interest rates, we see there’s nothing to be alarmed about (nowhere close to August 2013). With respect to NBFCs, the liquidity and capital position looks comfortable with majorly retail assets and some funded by retail liabilities.
Even in stress scenario of incremental cost of funding going up by 250bps, NBFCs are expected to remain profitable. Valuations declined in the last twelve months with several now trading below the mean. NBFCs’ high dependence on corporate debt markets is a concern. NBFCs with strong parentage and deposit franchise are well placed if liquidity tightens further.
11:24 AM
Sector watch: NBFCs
The recent correction on the back of debt market liquidity concerns prompts us to review a few strong NBFCs. Several factors including business tailwinds, robust operating models catering to the retail segment and parental support provide comfort to banks/debt markets and ensure that liquidity remains strong; stress, if any, remains only to near-term NIM.
In the context of current valuations, we see a case for several upgrades: Chola (ADD from REDUCE; TP of Rs1,425, down from Rs1,500), LICHF (BUY from ADD with TP of Rs580), Mahindra Finance (ADD from REDUCE; TP of Rs450 versus Rs500 earlier) and Shriram Transport Finance (BUY from ADD; TP of Rs1,450, down from Rs1,550).
(Source: Kotak Securities report)
The recent correction on the back of debt market liquidity concerns prompts us to review a few strong NBFCs. Several factors including business tailwinds, robust operating models catering to the retail segment and parental support provide comfort to banks/debt markets and ensure that liquidity remains strong; stress, if any, remains only to near-term NIM.
In the context of current valuations, we see a case for several upgrades: Chola (ADD from REDUCE; TP of Rs1,425, down from Rs1,500), LICHF (BUY from ADD with TP of Rs580), Mahindra Finance (ADD from REDUCE; TP of Rs450 versus Rs500 earlier) and Shriram Transport Finance (BUY from ADD; TP of Rs1,450, down from Rs1,550).
(Source: Kotak Securities report)
11:15 AM
How not to arrest the rupee's fall
The measures to bring more inflow include review of the mandatory hedging conditions for external borrowing. Also, permission for manufacturing companies to raise up to $50 million (Rs 3.6 billion) through such loans for a minimum period of a year, as compared to three years earlier.
Plus, review of the cap on exposure of foreign portfolio investors in bonds of a business group and exemption from withholding tax for ‘masala’ bonds (issued outside India but denominated in rupees). READ MORE
10:57 AM
The Reserve Bank of India’s (RBI’s) actions in punishing Axis Bank and Yes Bank, for under-reporting non-performing assets (NPAs), signals that it wants to get tough. Unfortunately, it is not in a position to do this in the same way with public sector banks where the rot in terms of under-reported NPAs is probably a lot worse. The market response to the news was also interesting and perhaps, a little puzzling. READ MORE
Devangshu Datta Govt banks have 90% of NPAs
The Reserve Bank of India’s (RBI’s) actions in punishing Axis Bank and Yes Bank, for under-reporting non-performing assets (NPAs), signals that it wants to get tough. Unfortunately, it is not in a position to do this in the same way with public sector banks where the rot in terms of under-reported NPAs is probably a lot worse. The market response to the news was also interesting and perhaps, a little puzzling. READ MORE
10:44 AM
HUL stock: Volumes and margins to improve on higher demand, price hikes
Hindustan Unilever has underperformed its peer index, the BSE FMCG, in recent weeks correcting about 11 per cent as compared to the 6 per cent fall for the index.
In addition to the worries on pricey valuations of the sector, the Street was worried about the ability of the company to maintain margins, given higher crude oil prices, a weak rupee and more importantly HUL’s ability to maintain volumes in view of recent price hikes. READ MORE
10:33 AM
TD Power Systems extends gains as board mulls share buyback proposal
Shares of TD Power Systems have surged 19% to Rs 137 per share in early morning trade on Monday, extending their 5% gain on the BSE on Friday after the company said that its board will meet on Wednesday, September 26, to consider share buyback proposal. READ MORE
10:22 AM
Shares of Usha Martin hit a 52-week high of Rs 36.40 per share, up 16% on the BSE in the opening deal after Tata Steel has executed a definitive agreement for the acquisition of the company’s steel business through a slump sale on a going concern basis. READ MORE
Usha Martin hits 52-week high as Tata Steel to acquire steel business
Shares of Usha Martin hit a 52-week high of Rs 36.40 per share, up 16% on the BSE in the opening deal after Tata Steel has executed a definitive agreement for the acquisition of the company’s steel business through a slump sale on a going concern basis. READ MORE
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First Published: Sep 24 2018 | 8:07 AM IST
