MARKET WRAP: Sensex jumps 551 pts as govt assures RBI autonomy; HDFC up 6%

Nifty IT index settled 4.2 per cent higher led by gains in Tech Mahindra and Infosys. The Nifty Financial Services index too rose 2.3 per cent led by Indiabulls Housing Finance and HDFC

10:50 AM

Markets haven't priced in a coalition government, says Morgan Stanley

 

Foreign brokerage house Morgan Stanley set up shop in India 25 years ago, in a decade when coalition governments ruled the roost at the center. Whether another one will form the government in 2019 will be a key factor for market in the year ahead. “The markets are not going to be at all calm about elections...(they) are going to be all over the place,” said Ridham Desai, head of India research and equity strategist at Morgan Stanley India Company, speaking at an event to mark the organisation’s anniversary in India. Read more

10:43 AM

NEWS ALERT Finance Secy: Let DEA to clarify on govt move to invoke section 7 of RBI act

10:33 AM

Dr Reddy's slips 7% following 8 USFDA observations for Duvvada plant

Shares of Dr. Reddy’s Laboratories have slipped 7% to Rs 2,425 per share on the BSE in early morning trade after the pharmaceutical company said that the US health regulator issued eight observations after inspecting its formulations plant at Duvvada, Visakhapatnam. READ MORE

10:16 AM

Sebi cautions investors against dealing with foreign trading portals

 

Sebi on Tuesday cautioned investors against dealing with foreign trading portals or platforms. The regulator said domestic investors are being drawn into online trading by overseas websites and platforms. Sebi said as these websites are not being supervised by any regulatory body in India, investors need to be cautious when it comes to dealing with them. Read more

10:05 AM

Tata Steel falls 3.76% as European joint venture faces in-depth EU Probe

10:00 AM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	33,703.52	-187.61	-0.55
S&P BSE SENSEX 50	10,617.27	-62.39	-0.58
S&P BSE SENSEX Next 50	30,656.42	-120.28	-0.39
S&P BSE 100	10,416.26	-58.10	-0.55
S&P BSE Bharat 22 Index	3,316.61	-36.60	-1.09

9:59 AM

NEWS ALERT Eco Affairs secy says no comment w.r.t invocation of Section 7 of the RBI Act 

9:50 AM

Top gainers in trade today

COMPANY	PRICE()	CHG()	CHG(%)	VOLUME
CUMMINS INDIA	756.10	82.10	12.18	64778
UCO BANK	19.70	1.90	10.67	180016
BOMBAY DYEING	104.55	9.50	9.99	461101
CORPORATION BANK	28.00	2.20	8.53	42598
DEWAN HSG. FIN.	221.20	13.80	6.65	723635

9:49 AM

Coal India extends fall as share sale begins

 

Shares of Coal India were down by 4.4% at Rs 265 per share on Wednesday in early morning trade, extending their 4% decline in the previous day on the BSE after the company’s offer for sale (OFS) of its equity shares began today. The shares will be sold at a floor price of Rs 266, and the sale will be conducted on Wednesday and Thursday, the company said in a filing. Read more

9:49 AM

HDFC Securities on Shriram Transport Finance (SHTF)

We believe SHTF is well poised to reap the benefits of improving macros and uptick  in  the  infra  related  activities given its deep reach in a niche market.  We  have  reduced  NIM  and  growth  assumptions  given the recent liquidity  squeeze  and  expected rise in the CoF. We have also factored in higher  provisioning  costs,  this  will  provide  an  upside  risk  to our earnings’  estimate.  Despite  this,  our RoAAs improve 59bps to 2.51% over FY18-21E. Maintain BUY with a target price of Rs 1,544 (2.0xSept-20 ABV of Rs 772).

9:48 AM

MUST READ Wrong time to fight? RBI-govt dispute can further damage investor sentiment

Long-simmering discord between the Indian central bank and the government is turning into a very public brawl. The timing couldn’t be more awful for markets. In a hard-hitting speech Friday on central-bank independence, Reserve Bank of India Deputy Governor Viral Acharya startled his audience by invoking Argentina of 2010. CLICK HERE FOR MORE

9:46 AM

Emkay on City Union Finance

Shriram City Union Finance (SCUF) reported improved set of numbers for Q2FY19, with a PAT of Rs2.5bn, primarily driven by healthy AUM growth (~18.4% yoy). Gross NPAs remained relatively steady at 8.9% of AUM on IGAAP, while as the company moved to IND AS reporting, gross NPAs under stage 3 moved up to 10.01% (9.84% in Q1FY19) with a PCR of 53.27%. Provisions increased by 40 bps on a qoq basis.

With the company back on growth path and with the declining provisions, we believe that the worst is already behind. We maintain our Accumulate rating as valuations look attractive. We reduce our target price to Rs 2,002, corresponding to 2.1x P/Adjusted book FY20E.

9:46 AM

Sebi not in favour of NSE-MCX merger due to co-location controversy

 

The proposed merger between the National Stock Exchange (NSE) and the Multi Commodity Exchange (MCX) is unlikely to see the light of day in the near future. According to sources in the Securities and Exchange Board of India (Sebi), it is not in favour of a merger at this point in time because of pending investigation in the co-location matter involving the NSE. Read more

9:45 AM

Prabhudas Lilladher on LIC Housing Finance

With poor festive magic, elevated repayments and pronounced market apprehensions, H2FY19 looks weaker; expect ~15% for FY19 and 16% growth over FY20-21 (earlier 18%+: FY19-FY20E) on conservatism. Slash in growth/NIM estimates and increased GNPA estimates with risky developer share on rise (6.6% in FY19 from current 6%) prompt us to prune our target multiple 1.6x also rolling it over to Sep’21 PBV arriving at revised target price of Rs 537 (earlier Rs 569).  While stock has been trading at lower valuation band, reiterate ACCUMULATE.

9:44 AM

Sector watch Banks - Is this liquidity crisis or a mismatch?

 

The current situation seems to be unprecedented in Indian Financials as liquidity shifted its goal-post from underpricing of risk to extreme risk aversion in a flash. NBFCs/HFCs' expected roll-over of ~Rs 1.5-2trn of their short-term debt in the next two months is creating a fear of liquidity trap and its consequential domino effect.

We had highlighted ALM of NBFCs/HFCs earlier and, while we do not make a company-specific comment, our analysis of flow of money indicates there is adequate liquidity of over Rs 5.8tn with banks. Liquidity indicators like call money rates, spreads, and LAF balances also affirm that we are in a much better position than we were in FY14.Hence, probability of a contagion is low but only confidence crisis and standstill by government/ regulator can snowball this liquidity mismatch into a liquidity crisis.

(Source: Antique Stock Broking)