Thursday, 1 September 2016

Sensex, Nifty snap 3-day gain; Rel Jio drags Bharti & Idea 6-10%

The bulls took a breather on Thursday as equity benchmarks closed rangebound session marginally lower after rallying for previous three consecutive days. Sell-off in telecom stocks on Jio's tariff plans & profit booking in Reliance Industries dampened the market sentiment but FMCG, metals, auto and select banks limited the downside. Subdued Q1 GDP and July core industries data also weighed on the market. 

The 30-share BSE Sensex was down 28.69 points at 28,423.48 and the 50-share NSE Nifty slipped 11.55 points to 8,774.65. The broader markets also ended lower by 0.4 percent on weak breadth. About 1662 shares declined against 1074 advancing shares on the BSE. 

The market may not see major selling pressure in near term as foreign investors started pumping in more money into Indian equities again after showing caution last week ahead of Federal Reserve Chief speech, feel experts.

 With raising Sensex target to 30,000, Surendra Goyal of Citi says with the expected catalysts of GST, monsoon playing out and the market delivering 20 percent returns since February/March, focus will shift to H2 earnings. 

He expects 12 percent/15 percent Sensex/Nifty profit growth in FY17. While the pace of recovery will likely be uneven, there are reasons to be positive in the medium term - reform impact, likely consumption uptick, peaking of NPL cycle, bottoming utilisation, increasing return on equities, he says. 

Telecom stocks butchered badly with the Bharti Airtel and Idea Cellular falling 6-10 percent after Reliance Industries Chairman Mukesh Ambani unveiled Jio's aggressive tarriff plans.

Sensex, Nifty lacklustre

The Indian stock market opened on a flat note Thursday as investors digested disappointing GDP and infrastructure output data and looked ahead to Friday's U.S. jobs report for clues regarding the Fed's next move.
 
At 12:46 PM, the S&P BSE Sensex is trading at 28,446 down six points, while NSE Nifty is trading at 8,778 down mere eight points.

The BSE Mid-cap Index is trading down 0.04% at 13,213 whereas BSE Small-cap Index is trading down 0.01% at 12,649.

GAIL, ICICI Bank, Tata Motors, M&M, Coal India and Bajaj Auto are among the gainers, whereas Bharti Airtel, Wipro, Adani Ports and HDFC Bank are losing sheen on BSE.

Some buying activity is seen in consumer durables, auto, industrial, banking and FMCG sectors, while telecom, realty, teck, oil & gas, capital goods and energy sectors are showing weakness on BSE.

The INDIA VIX is up 2.60% at 13.5875. Out of 1,853 stocks traded on the NSE, 845 declined, 726 advanced and 282 remained unchanged today.

A total of 63 stocks registered a fresh 52-week high in trades today, while 21 stocks touched a new 52-week low on the NSE.
 

BPCL, HPCL and IOC traded mixed after hiking petrol price by a steep Rs.3.38 per liter and diesel by Rs.2.67 a liter on Wednesday, reversing a two-month declining trend.

Bharti Airtel slipped 1% after slashing effective data tariffs.

Reliance Industries advanced 1% on BSE. 

Tata Motors rose 0.8% after the Supreme Court on Wednesday quashed the controversial acquisition of 997.11 acres of land in Singur in 2006 for the company's project.

Rajesh Exports inched up 1% on winning a Rs.1,172-cr job order from Singapore.

Bajaj Auto and Hero Moto Corp rose about a percent each before unveiling their August sales numbers.

MCX gained 1% on reporting a 55% rise in Q1 net profit.

The rupee opened marginally lower by 9 paise at 67.04/$ against US Dollar Thursday as against the previous close of 66.95/$.

Sensex, Nifty to open on a negative note

The indices are set to open on a negative note. Auto stocks will be in focus based on the numbers announced.

Asian markets are trading mixed. Nikkei 225 is trading in green, while Shanghai Composite and Hong Kong's Hang Seng are trading lower.

Wall Street closed lower on Wednesday. The Dow Jones industrial average fell 53.42 points to 18,400.88, the S&P 500 lost 5.17 points to 2,170.95 and the Nasdaq Composite dropped 9.77 points to 5,213.22. 

Crude oil futures steadied after skidding on data showing a large surprise weekly build in US crude and distillate stockpiles and a smaller-than-expected drawdown in gasoline.

On the economy front, fiscal deficit in the first four months of the current financial year stood at Rs.3.93 lakh crore, or 73.3% of the Budget estimates for 2016-17.

India’s economic growth decelerated to its slowest level in six quarters in the April-June period, potentially making the government’s target of achieving 8% growth this year more dauntin.

The Eight Core Industries comprise nearly 38% of the weight of items included in the IIP.  The combined Index of Eight Core Industries stands at 173.7 in July 2016, which was 3.2% higher compared to the index of July 2015. Its cumulative growth during April to July, 2016-17 was 4.9%.

Among other stocks in focus:

RIL, ONGC: The government has set a 1-month deadline to begin implementing steps to resolve a dispute over natural gas that migrated from ONGC’s offshore block in the Bay of Bengal to the adjoining assets of Reliance Industries Ltd, as per media reports. RIL will be in focus ahead of its AGM in which Chairman Mukesh Ambani is likely to disclose future plans for Reliance Jio Infocomm at the company's annual general meeting on Thursday.

PSU Oil stocks in focus: Public sector oil marketing companies announced an increase in retail selling price of petrol by Rs.3.38 a litre and for diesel by Rs.2.67 a litre in Delhi on Wednesday. The price increase is inclusive of state levies and will vary from state to state and will be effective midnight August 31/September 1.

Cement stocks in focus: CCI imposed more than Rs.6,700 crore penalty on 10 cement companies. A fine of Rs.1,147.59 crore has been imposed on ACC, while penalties on Jaiprakash Associates Ltd and Ultratech are Rs.1,323.60 crore and Rs.1,175.49 crore, respectively. The fines on other companies are Rs 274.02 crore (Century), Rs.187.48 crore (India Cements), Rs.128.54 crore (JK Cements), Rs.490.01 crore (Lafarge), Rs.258.63 crore (Ramco), ACL (Rs.1,163.91 crore) and Binani (Rs.167.32 crore), according to the release. CMA faces a fine of Rs.0.73 crore. 

Auto stocks in focus: Auto stocks will remain in focus as auto companies will announce their August sales figures on Thursday.

Rajesh Exports Ltd: The company received export order worth Rs.1,172 crore. The order is to be completed by December 2016.

Multi Commodity Exchange of India Ltd: The company reported a 23% rise in revenue for the June quarter. Net profit rose 55% to Rs.32.8 crore.

MOIL: MOIL is set to enhance production of manganese ore up to 2.5 million tonnes by 2020-21, a top company executive has said.

Indiabulls Housing Finance: The company said it plans to raise up to Rs.100 crore through issuance of non-convertible debentures (NCDs).

Hathway Cables: The company reported Rs.53.2 crore loss for the quarter ended June 30 compared with Rs 37.30 crore reported in the year-ago period.

Indo Rama Synthetics India: The company reported a standalone net loss of Rs.16.56 crore for the first quarter ended June 30. The company had posted a net profit of Rs.5.86 crore in the corresponding period a year ago, Indo Rama Synthetics said in a BSE filing.

Power Mech: The company reported its net profit stood at Rs.16.60 crore for the quarter ended June 30 compared with Rs.15.90 crore reported in the year-ago period.

ZEE: Zee Entertainment Enterprises Ltd announced the sale of its sports network TEN Sports to Sony Pictures Network in an all-cash deal worth $385 million.

Tata Power: Two US defence firms-Raytheon and Lockheed Martin-plans will partner Tata Power Co. Ltd in manufacturing Javelin anti-tank guided missile in India, as per media reports.

Uniply Industries: A manufacturer of plywood, laminates and related products, has acquired Vector Projects, an architecture, design and interior fit out company to provide end-to-end building solutions, as per media report.  

Hindustan Copper: The company has signed a joint venture agreement with Chhattisgarh Mineral Development Corporation (CMDC) for exploration, mining and beneficiation of copper and associated minerals.

Global Data: RBA Commodity Index SDR (YoY) (Aug), EUR Markit Manufacturing PMI (Aug),CHF Real Retail Sales (YoY) (Aug),CHF SVME - Purchasing Managers' Index (Aug),EUR Markit Manufacturing PMI (Aug), EUR Markit Manufacturing PMI (Aug), EUR Markit Manufacturing PMI (Aug), EUR Markit Manufacturing PMI (Aug), EUR Markit Manufacturing PMI (Aug),USD Initial Jobless Claims (Aug 26),USD Unit Labor Costs (Q2),USD Nonfarm Productivity (Q2),CAD RBC Manufacturing PMI (Aug),USD Markit Manufacturing PMI (Aug),USD ISM Manufacturing PMI (Aug),USD ISM Prices Paid (Aug),USD Construction Spending (MoM) (Jul),USD EIA Natural Gas Storage change (Aug 26),   USD Total Vehicle Sales (Aug).

Results: Apollo Hospitals Enterprise Ltd, Mahanagar Gas Ltd,Essel Propack,Kalindee Rail, Ballarpur Industries Ltd, Advik Industries,Allied Digital Services,Bimetal Bearings, F Mec International Financial Services and Navkar Corporation

Trends in FII flows:  The domestic institutional investors (DIIs) were net buyers of Rs.8.47 bn in the cash segment on Wednesday, while FIIs were net buyers of Rs.8.54 bn, as per the provisional figures released by the NSE.