2:04 pm UBS upgrades European banks: UBS strategists have upgraded European banks to overweight from neutral and cut the more defensive pharma sector to neutral as they expect cyclical sectors to get a boost from the European Central Bank’s plans to scale back its bond buying programme.
“We highlighted previously (that) the cyclicals are looking more attractive as they have led EPS momentum but shown slight underperformance versus defensives. What is changing is we now have a potential catalyst in sight with the ECB tapering approaching,” they said in a note.
They also said that the recent strengthening in the euro made them more cautious on US-exposed stocks but more positive on domestically exposed companies.
1:55 pm Maruti on electric cars: With the government focusing on promotion of electric vehicles, Maruti Suzuki India will not hold back in the segment and will come up with models based on customer preference, according to company chairman R C Bhargava.
The auto major, which has around 50 percent of the market share in the Indian passenger vehicle segment, also expects its sales to grow in double digits over the next 3-5 years.
“Government has announced programme to rapidly promote the use of electric vehicles in India. It is a very laudable policy as it will greatly enhance the usage and overtime lead to cleaner environment,” MSI Chairman R C Bhargava told shareholders in the company’s 36th annual general meeting (AGM) here.
He added that the company will come with electric vehicles after determining customer preference.
1:45 pm Market Outlook: According to Nimesh Shah of ICICI Prudential AMC, there does not seem to be any headwinds for the Indian macros – so till elections in May 2019, there is time for earnings to catch up and even if they do not catch up, the flows are strong.
FY19 is expected to be good for earnings, he added.
1:35 pm SME IPO: Madhya Pradesh Today Media has filed draft red herring prospectus with National Stock Exchange, for its initial public offering (IPO).
The IPO is likely to open for subscription around last week of September, the company said in its release.
The company intends to raise Rs 14.16 crore through public issue of 21,46,500 equity shares at a price of Rs 66 per share. The issue would constitute 47.01 percent of the post Issue equity share capital.
Madhya Pradesh Today Media will use issue proceeds for expansion of business by upgrading unit offices in various cities in Madhya Pradesh and Chhatisgarh; working capital requirements; and general corporate expenses.
The company owns the daily newspaper ‘Pradesh Today’ and publishes over 17 lakh copies through its 13 morning editions from Bhopal, Indore, Gwalior, Jabalpur, Rewa, Katni, Sagar Ujjain, Maharashtra, Uttar Pradesh, Delhi, Chindwara and Raipur besides two evening editions from Bhobal and Jabalpur.
1:25 pm Market Check: Benchmark indices extended gains in afternoon, led by index heavyweights Reliance Industries and HDFC Group stocks. But geopolitical tensions between North Korea and US are closely watched by investors.
The 30-share BSE Sensex was up 121.25 points at 31,823.50 and the 50-share NSE Nifty rose 38.75 points to 9,951.60 on positive market breadth.
About 1,574 shares advanced against 823 declining shares on the BSE.
Reliance Industries was the leading contributor to Nifty’s gains, up 1 percent followed by IOC, HDFC and HDFC Bank.
2:15 pm IPO: Reliance General Insurance, a wholly owned subsidiary of Reliance Capital, has received in-principle approval from the Insurance Regulatory and Development Authority for its IPO, reports CNBC-TV18.
Sources told CNBC-TV18 that the general insurance company may file draft red herring prospectus for its IPO, with capital market regulator SEBI by September-end.
The company is planning to launch IPO by November.
The wholly-owned subsidiary of Reliance Capital is looking to raise Rs 1,500-2,000 crore by diluting upto 25 percent through IPO.
2:05 pm Market Check: Equity benchmarks continued to trade higher with moderate gains, backed by Reliance Industries and private banking & financials stocks. Investors digested North Korea’s hydrogen bomb test but keep close watch on geopolitical tensions.
The 30-share BSE Sensex was up 66.81 points at 31,769.06 and the 50-share NSE Nifty rose 21 points to 9,933.85.
The market breadth remained positive as about two shares advanced for every share falling on the BSE. Coal India rallied 2 percent again on top of previous day’s 3.4 percent gains.
1:55 pm Apex Frozen locked at 5% upper circuit:
1:53 pm Hotel Leela’s clarification: Hotel Leelaventure today said there is no final agreement with any party to sell its Chennai hotel, though negotiations are on to sell the property in coordination with JM Financial.
The company has already received shareholders’ nod for the ‘sale of hotels in Delhi/Chennai’ in September 2016, Hotel Leelaventure said in a filing to BSE.
“The company in coordination with JM Financial Institutional Securities has been in negotiations to sell the Chennai hotel. However, the company has not entered into any binding agreement with any party, till date,” it added.
The hospitality chain was reacting to a media report that Marigold Capital and Investments has agreed to buy the company’s Chennai property.
“The company and its senior management continue to evaluate proposals and would inform the bourses at an appropriate time”, Hotel Leelaventure said.
The stock price was trading at Rs 24 in the afternoon trade on BSE, up 2.35 percent from the previous close.
1:45 pm Oil prices up: US oil prices edged up as the gradual restart of Gulf of Mexico refineries following forced shutdowns due to Hurricane Harvey raised demand for crude, their most important feedstock.
At the same time the return of many, though not all, US refineries ended a spike in gasoline prices as initial fears of a serious supply crunch faded.
US West Texas Intermediate (WTI) crude futures were at USD 47.52 barrel, up 0.49 percent above their last settlement.
1:35 pm Management: Umesh Revankar, MD of Shriram Transport Finance sees pent-up demand in commercial vehicles.
In an interview to CNBC-TV18, he said that depending on economic recovery, commercial vehicle (CV) demand may be good in the second half of FY18.
On the IDFC deal front, he said the due diligence should be over by end of September.
Talking about GST, he said goods and services tax (GST) is still a challenge. According to him, not everyone is onboard as of yet.
1:28 pm Europe trade: European shares crept higher, brushing off geopolitical tension, as attention turned to deal-making after Aveva’s tie-up with Schneider Electric.
France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.3-0.6 percent.
1:20 pm Policy for agri exports soon: The Commerce and Industry Ministry will soon bring in a policy framework for facilitating access to global markets for the Indian agriculture produce, Union minister Suresh Prabhu said today.
Prabhu, who took charge as Commerce and Industry Minister yesterday, said that his ministry will work on developing global supply chain for the agriculture sector.
The Narendra Modi-led government aims to double farmers’ income by 2022. Crop diversification, focus on allied sectors and food processing and tapping global markets are among the steps the government is taking to meet the target.
1:14 pm Sugar stocks sweeten: Andhra Sugar, Dhampur Sugar, Dwarikesh Sugar, EID Parry, Mawana Sugars, Rana Sugars, Triveni Engineering, Uttam Sugar, Ugar Sugar Work and Sakthi Sugars rallied 1-4 percent on likely demand ahead of festivals.
To meet that likely increase in demand and due to shortage of sugar post drought in southern states, the government has decided to import 3 lakh tonne sugar, reports CNBC-Awaaz quoting sources.
Order to import sugar will be released in a day or two. The group of ministers took a call w.r.t sugar import in yesterday’s meet, sources said.
1:00 pm Buzzing: Sun TV Network shares added another 3 percent on top of 5 percent gains in previous session.
While maintaining buy call on the stock, CLSA raised target price to Rs 965 from Rs 890 following increase in FY19 IPL revenue estimates by 45 percent.
12:56 pm Rupee Outlook: ICICI Securities said the USD-INR fell mildly in August due to geopolitical risk escalation on the back of war rhetoric between the US President and North Korean leader. US July Core PCE fell further to 1.4 percent, drifting away from Federal Reserve’s target of 2 percent. US rate hike probability is almost nil for the September Monetary meeting.
On the domestic front, RBI has cut its benchmark interest rates by 25 bps, which led to a sharp spike in the rupee. However, RBI also raised concerns on inflation in the near term, which capped runaway rupee appreciation, it added.
As such, the research house expects the USDINR pair to remain range bound in the September series.
Current war rhetoric over North Korea escalating into an actual war is a real risk for all emerging currencies, including the rupee, it feels.
12:50 pm Cement price hike: Dealers said cement makers raised prices by up to Rs 27 per 50 kg bag in Mumbai, reports CNBC-TV18 quoting NewsRise.
UltraTech Cement, ACC, Ambuja Cements and Shree Cement gained 1-2 percent.
12:45 pm Market Check: Equity benchmarks continued to be rangebound amid geopolitical tensions concerning North Korea.
The 30-share BSE Sensex was up 23.88 points at 31,726.13 and the 50-share NSE Nifty rose 3.80 points to 9,916.65.
Bharti Airtel was biggest loser among Nifty 50 stocks, down 4 percent followed by Bharti Infratel, HCL Technologies, Sun Pharma.
Reliance Industries, HUL, Tech Mahindra, Kotak Mahindra Bank, Yes Bank, HDFC Bank and Axis Bank were gainers.
12:40 pm Europe trade: European markets were mixed, as geopolitical tension concerning North Korea kept investors at bay while markets lacked overnight guidance due to a Labor Day holiday in North America.
The pan-European Stoxx 600 edged marginally higher shortly after the opening bell, with sectors and major bourses pointing in opposite directions.
12:35 pm Bilateral meeting post-Dokalam: Prime Minister Narendra Modi and Chinese President Xi Jinping today held their first substantive bilateral meeting after the Dokalam standoff, which had put ties between the two countries under strain.
Modi, who attended the BRICS Emerging Markets and Developing Countries Dialogue earlier in the day, met Xi on the sidelines of the 9th BRICS Summit.
The meeting comes amid diplomatic efforts by the two sides to overcome the bitterness caused by the 73-day face-off between their troops in the Dokalam area of the Sikkim sector.
The Chinese and the Indian troops were engaged in a standoff since June 16 after the Indian side stopped the construction of a road by the Chinese Army.
On August 28, India’s External Affairs Ministry announced that New Delhi and Beijing have decided on “expeditious disengagement” of their border troops in the disputed Dokalam area.
12:30 pm UK new cars sales: British new car sales fell between 6 and 7 percent year-on-year in August, according to preliminary data released by an industry body.
New car registrations have fallen year-on-year in April, May, June and July, the longest run of declines since 2011, according to data from the Society of Motor Manufacturers and Traders (SMMT).
12:22 pm What does ‘too big to fail’ mean: Reserve Bank of India (RBI) has included HDFC Bank in the list of ‘too big to fail’ lenders. With the inclusion of HDFC Bank in the list, there will now be three ‘too big to fail’ financial entities in the country.
HDFC joins India’s largest lender SBI and private sector major ICICI Bank who joined this list back in 2015.
When a financial entity like a bank becomes systemically so important that their failure is expected to disrupt the financial/banking system and the economy as a whole then that entity is termed as ‘too big to fail’. In an event that such a bank fails the government steps in to save it.
RBI categorises such banks as Domestic Systemically Important Banks (D-SIBs). RBI, in its framework for dealing with D-SIBs, describes them as “banks [that] assume systemic importance due to their size, cross-jurisdictional activities, complexity, lack of substitutability and interconnectedness. The disorderly failure of these banks has the propensity to cause significant disruption to the essential services provided by the banking system, and in turn, to the overall economic activity. These banks are considered Systemically Important Banks (SIBs) as their continued functioning is critical for the uninterrupted availability of essential banking services to the real economy.”
12:05 pm Insolvency proceedings: A day after the Supreme Court’s stay on Jaypee Infratech’s insolvency proceedings, IDBI Bank has asked the court to restore the process as buyers plan to take the fight to a more aggressive path.
While on one hand, the IDBI Bank moved the apex court on Tuesday seeking restoration of insolvency proceedings against Jaypee, the distraught buyers, on the other hand, plan to assail the developer with 4,000 more individual cases, both civil and criminal.
On Monday, the Supreme Court stayed the NCLT’s (National Company Law Tribunal) insolvency proceedings against Jaypee Infratech, bringing relief to approximately 32,000 homebuyers who invested their money in the real estate major’s housing projects in the national capital region (NCR).
11:58 am Equity investment: The Central Board of Trustees (CBT) is mulling to increase EPFO’s equity investment bracket to 15-25 percent from the existing 5-15 percent, reports CNBC-TV18.
According to sources privy to the information, CBT — which is the administrator of the funds created and the apex decision making body for Employees’ Provident Fund Organisation’s (EPFO) — may hold a meeting in September-end or early-October to take the final decision.
Currently, EPFO has a 15 percent exposure to equities, which they plan to increase to 20 percent, but are awaiting approval for the same.
Once the plan is successfully implemented, CBT expects to invest Rs 25,000-30,000 crore annually in equity investment.
11:46 am Revival plan: Madras Fertilizers has submitted a revised revival plan to the government, according to reports CNBC-TV18 quoting Cogencis’ sources.
The company has sought restructuring of debt given by the government.
The stock surged nearly 20 percent after this news.
11:39 am Buzzing: Shares of Kwality staged a massive recovery from its low point in the past few days, gaining over 10 percent intraday as investors participated in a relief rally post the management’s comments.
The stock took a beating in the past few days, falling around 25 percent between September 1 and September 4, 2017. Interestingly, till September 1, the stock had a steady movement.
Speculation started doing the rounds that the company may be facing some debt issues or pledged shares being sold in the market.
However, in an interview to CNBC-TV18, Naval Sharma, President & Head-Business Transformation, Kwality said that there was no truth in such rumours and were malicious in nature. “There has been nothing significant that led to the decline in stock price,” he told CNBC-TV18 in an interview.
In fact, he added that the business performance has been decent in the last 4-6 quarters. Further, it was the public dairy firm to have given employee stock options (ESOPs) to its employee partners.
11:30 am Market Check: Equity benchmarks as well as broader markets continued to trade higher amid consolidation in morning as investors maintained their cautious stance due to ongoing geopolitical tensions.
The 30-share BSE Sensex was up 63.21 points at 31,765.46 and the 50-share NSE Nifty rose 18.75 points to 9,931.60.
The market breadth remained positive as about three shares advanced for every share falling on the BSE.
Reliance Capital, Reliance Industries, Kwality, Sun TV Network and Bombay Dyeing were most active shares on exchanges.
11:20 am Artificial intelligence impact: Billionaire tech executive Elon Musk has once again made an ominous warning about artificial intelligence (AI), this time suggesting that it could be the reason for a third world war.
His concerns were prompted by a statement made by Russian President Vladimir Putin on Friday in which he predicted that whoever takes the lead in AI will become the ruler of the world.
11:10 am Jaypee Infratech in focus: The Jaypee Infratech stock fell about 3 percent after the IDBI Bank moved to the Supreme Court to restore insolvency proceedings against the company.
The apex court will hear the bank’s plea on next Monday.
On Monday, the court had stayed an order passed in August by the Allahabad bench of the National Company Law Tribunal (NCLT) which had initiated insolvency proceedings against the company.
11:04 am Buzzing: Manpasand Beverages shares gained 2 percent after it announced an exclusive tie-up for distribution network sharing and cross-promotion of brands with Parle Products.
Under the partnership, Manpasand Beverages will have access to Parle’s 4.5 million outlets across India for its flagship brand ‘Mango Sip’ juice.
11:02 am Management interview: Home finance business of Reliance Capital demerged today and the same will be listed with the name of Reliance Home Finance on exchanges soon. It meant Reliance Capital goes ex-demerger today.
“We will list home finance business in 15-20 days after September 6,” Ravindra Sudhalkar, CEO of Reliance Home Finance said in an interview with CNBC-TV18.
He believes net worth of the company will go up to Rs 1,500 crore after infusion and he expects net interest margin to be in the upper range of 3.5 percent.
According to him, return on assets can be upwards of 1.6 percent by FY20.
Sudhalkar expects gross non-performing assets in the region of 0.65-0.8 percent till FY20.
10:59 am IPO: Reliance Nippon Life Asset Management Company’s initial public offer is likely to hit the market by first week of November, sources in know of the development told Moneycontrol.
Anil Ambani-led Reliance Group’s asset management arm had filed draft papers with markets regulator Securities and Exchange Board of India to float an IPO on August 18 which is expected to value the company at about Rs 18,000 crore, according to merchant bankers said.
This would be the first initial public offering by an asset management company in India, although UTI Mutual Fund IPO have been in the works for a long time.
According to the draft papers filed with SEBI, the public issue of Reliance Nippon Life Asset Management comprises fresh issue of 2,44,80,000 equity shares, besides an offer for sale of 1,12,30,200 shares by Reliance Capital and 2,54,89,800 scrips by Nippon Life Insurance Company.
10:53 am North Korea Threat: US President Donald Trump discussed with leaders of Germany, South Korea and Japan the “reckless and dangerous behaviour” of North Korea and reaffirmed the importance of close coordination on the issue at the UN.
On Sunday, North Korea said it detonated a hydrogen bomb designed for a long-range missile and called its sixth and most powerful nuclear test a “perfect success”, sparking world condemnation and promises of tougher US sanctions.
In a separate phone call with German Chancellor Angela Merkel, South Korea President Moon Jae-In and Japan Prime Minister Shinzo Abe, Trump underscored the need to give a coordinated response to North Korea.
10:50 am Services PMI: Activity in India’s dominant services sector contracted for a second straight month in August as disruptions caused by a new tax policy hurt new orders, a private survey showed today.
August’s Nikkei/IHS Markit Services Purchasing Managers’ Index rose to 47.5, up from July’s 45.9 but still below the 50 mark that separates expansion from contraction.
The last time services activity shrunk for two or more consecutive months was after Prime Minister Narendra Modi banned high-value currency notes in November last year, which sapped consumer demand in the largely cash-reliant economy.
India’s economic growth rate unexpectedly cooled to a three-year low in the three months to end-June, so the latest PMI will no doubt add to the gloom for policymakers.
10:41 am Rupee falls further: The rupee dropped by 9 paise to 64.14 against the dollar at the interbank forex market today amid sustained foreign fund outflows.
The rupee opened at 64.10 per dollar against last close of 64.05 per dollar. It moved in a range of 64.08 per dollar and 64.18 per dollar in morning deals.
Traders said fresh demand for the US currency from importers and dollar’s recovery against some currencies overseas weighed on the rupee.
Foreign investors pulled out around Rs 683 crore from debt and equity markets yesterday amid geopolitical tensions.
10:31 am Buyback: Jenburkt Pharmaceuticals shares rallied 5 percent as a meeting of the board of directors of the company is scheduled to be held on September 9 to consider matters related to buyback of the fully paid-up equity shares.
10:26 am Market Check: Equity benchmarks extended gains in morning as the Sensex was up 86.68 points at 31,788.93 and the Nifty gained 22.80 points at 9,935.65 despite caution due to geopolitical tensions.
The BSE Midcap and Smallcap indices continued to outperform benchmarks, rising half a percent each on positive market breadth. About three shares advanced for every share falling on the BSE.
10:20 am Maruti in focus: India’s largest car-maker Maruti Suzuki India could potentially rise another 18 percent going forward despite a near 47 percent jump in 2017, Hong Kong headquartered brokerage CLSA said.
The brokerage has a target price of Rs 9,230 on the stock with a buy rating, which implies the 18.28 percent potential upside from current levels.
10:10 am Demerger: Reliance Capital shares fell more than 17 percent in pre-opening trade due to hiving off home finance business.
Today is the ex-date for demerger and the record date for the same is fixed as September 6, which means person who holds shares of Reliance Capital on September 6 will get shares of Reliance Home Finance.
Reliance Capital shareholders will receive one share of Reliance Home Finance for every share held. Post demerger, Reliance Capital will continue to hold a 51 percent stake in Reliance Home Finance.
Reliance Home Finance (RHF) is expected to be listed in the second half of September.
10:02 am Chart of the day: Over the last 12 months, midcaps have delivered 19% return and over the last 5 years, midcaps have outperformed the Nifty by 70%
9:57 am HDFC Bank ‘too big to fail’: The Reserve Bank of India on Monday included HDFC Bank in the list of ‘too big to fail’ lenders, referred to as D-SIB or domestic systemically important bank.
India’s largest lender SBI and private sector major ICICI Bank were classified as D-SIBs in 2015.
With the inclusion of HDFC Bank in the list, there will now be three ‘too big to fail’ financial entities in the country.
9:35 am Market Outlook: Dhananjay Sinha of Emkay Global said the concerns on market valuation has been persisting with markets trading at boom time. The valuations across both benchmark and broader indices while the fundamentals reflect earnings recession.
Over the past three years, corporate India has seen virtually no growth at an aggregate level. Such a scenario naturally generate worries about the sustainability of market exuberance.
The situation is similar across the world with equity markets both emerging and developed are trading at peak levels even as earnings have remained stagnant since 2011. Few countries like China, Japan are undervalued.
Hence, it is pertinent to worry about global risk factors in such a scenario. The risk of geopolitical disruptions and protectionism etc. remains.
Importantly, with volatility measures still very depressed, markets appear to be complacent. Clearly, there is a possibility of a correction if any of this event go out of hand.
9:29 am FII View: Jonathan Garner of Morgan Stanley said the research house sees further upside in regional equity markets.
“We continue to be overweight on China, India and Japan versus the broader Asia Pacific Ex-Japan/EM universe,” he added.
Within sectors, the research house stayed overweight on IT and financials across the region.
“While we are cognizant of geopolitical risks, we don’t let it drive the portfolio,” he said.
India’s structural reduction in inflation and improved current account are leading to a secular reduction in interest rates, driving domestic flows towards equities, he feels.
9:15 am Market Check: Equity benchmarks rebounded with moderate gains amid volatility on Tuesday as investors remained cautious due to geopolitical tensions surrounding around North Korea.
The 30-share BSE Sensex was up 73.36 points at 31,775.61 and the 50-share NSE Nifty gained 20.65 points at 9,933.50.
Tech Mahindra, Tata Motors and HDFC Bank were early gainers while TCS, HCL Technologies, Bharti Airtel, ITC and HDFC were under pressure.
Nifty Midcap gained half a percent as about five shares advanced for every share falling on the NSE.
Tourism Finance Corporation of India gained 6.5 percent. Thomas Cook and IFCI gained more than 3 percent.
Sun TV added another 3 percent after CLSA raised target price to Rs 965 while Bharat Financial was up 2 percent as Credit Suisse raised target price to Rs 1,055.
Indraprastha Gas, Nandan Denim, Arvind, Sintex Industries, IRB Infrastructure, JM Financial, Manappuram Finance and Suzlon Energy gained up to 3 percent. Castrol India, Kwality, InterGlobe and Repco Home fell up to 14 percent
The Indian rupee depreciated further in opening trade on dollar demand. It started off trade at 64.10 a dollar, down 6 paise compared to previous day’s closing of 64.02.