Once expensive, valuations of both BSE MidCap and Sensex have become fair after the major correction, say analystshttps://t.co/Fe7Dbfb2WV— Livemint (@livemint) October 19, 2018
Closing bell: Sensex sheds 464 points, Nifty settles at 10303, Reliance, Yes Bank top losers
The BSE Sensex closed 463.95 points down at 34,315.63, while the Nifty 50 ended 149.50 points lower at 10,303.55. Here are the highlights from the markets
- 3.36 pm ISTClosing bell: Sensex, Nifty close lower for 2nd session
- 3.16 pm ISTVedanta open to raise bid for Essar Steel
- 2.43 pm ISTUltraTech Cement shares fall 5% as profit declined in Q2
- 2.28 pm ISTMetal stocks traded mixed
- 2.10 pm ISTMphasis Q2 net profit rises 37%, shares fall 5%
- 1.32 pm ISTMarket update: Sensex, Nifty extend losses
- 1.17 pm ISTEuropean stocks waver at open
- 12.47 pm ISTRBI allows banks to lend more to some NBFCs, shares trade lower
- 12.10 pm ISTSensex, BSE MidCap valuation gap shrinks sharply in FY19
- 11.48 am ISTMindTree shares fall most in over 7 years as brokerages cut P
- 11.25 am ISTACC shares slumps 8% as Q2 results miss estimates
- 10.57 am ISTIndiabulls Housing down 14%, DHFL slumps 11%
- 10.38 am ISTVakarangee shares down 5%
- 10.14 am ISTAnalysts positive on Reliance despite challenges
- 9.48 am ISTMindtree shares plunge 13% after Q2 earnings
- 9.40 am ISTJet Airways shares jump 8% on Tata Sons stake purchase buzz
- 9.33 am ISTMarket update: Sensex, Nifty fall over 1%
- 9.23 am ISTRIL shares fall over 6% after Q2 results
- 9.18 am ISTYes Bank shares down 5% after RBI refuses Rana Kapoor’s term extension
- 9.11 am ISTRupee edges lower against dollar
- 8.33 am ISTOpening bell: Cues to look out for before trading today
- Mumbai: Benchmark indices BSE Sensex and NSE’s Nifty 50 fell over 1% on Friday dragged by market heavyweights Reliance Industries, HDFC and Infosys. Selloff in stocks of housing finance companies and NBFCs continued, with Indiabulls Housing Finance losing over 17%, despite the Reserve Bank of India announcing more steps to increase credit flow to such companies. Investors were also cautious amid ongoing September-quarter earnings season. RIL shares fell over 4% after muted Q2 results. The rupee traded higher against the dollar after Asian markets rebounded. Markets were closed on Thursday due to Dussehra.In global markets, European stocks edged higher as earnings continued to roll in after Chinese equities rose from a four-year low as the nation’s top financial regulators said they’ll keep risks under control. Treasury yields ticked higher with the dollar. Oil prices edged higher on signs of surging demand in China, though headed for a second weekly fall amid trade war concerns and tensions over missing Saudi journalist. Here are the latest updates from the markets:
- 3.36 pm IST Closing bell: Sensex, Nifty close lower for 2nd sessionThe BSE Sensex closed 463.95 points, or 1.33%, down at 34,315.63, while the Nifty 50 ended 149.50 points, or 1.43%, lower at 10,303.55. Intraday, the Sensex plunged 639.26 points to 34,140.32, and the Nifty 50 dived 203.45 points to 10,249.60.The BSE MidCap and SmallCap indices fell 1.10% and 1.32%, respectively. All the sectoral indices on BSE, barring FMCG and metal, declined with energy, IT and teck falling most at over 2%.Sun Pharma, Kotak Bank, HPCL, Vedanta and ITC were among the top gainers on the key indices, whereas Indiabulls Housing Finance, Yes Bank, Reliance Industries, HDFC and Hero MotoCorp led losses.On Tuesday, FIIs sold shares to the tune of Rs 140.02 crore on net basis, while DIIs unloaded shares worth a net of Rs 343.11 crore, provisional data showed.
- 3.16 pm IST Vedanta open to raise bid for Essar SteelVedanta shares traded 1.54% up at Rs 211.20 per share. PTI reported that Anil Agarwal has indicated that he is open to raising bid for acquiring Essar Steel, saying his flagship Vedanta Ltd is the best suited to take over the indebted firm. Agarwal said Vedanta’s Rs 35,000-36,000 crore offer in the first round of bidding was more than offers made by ArcelorMittal and Russia’s VTB Capital-backed NuMetal Ltd
- 2.43 pm IST UltraTech Cement shares fall 5% as profit declined in Q2UltraTech Cement’s quarterly profit dropped 9.4 % and missed market expectations, hurt by higher expenses, the company’s statement showed on Friday. Standalone net profit stood at Rs 391 crore for the quarter ended Sept. 30, compared with a profit of Rs 431 crore a year earlier. However, revenue from operations jumped 20.9% to Rs 7,771 crore, while total expenses rose 23.5%. Rising energy and logistics cost coupled with rupee depreciation led to a 14% increase in costs compared to second quarter of fiscal 2018, the company said. UltraTech Cement shares fell as much as 5.39% to Rs 3,529.05 per share.
- 2.28 pm IST Metal stocks traded mixedThe government has imposed anti-dumping duties of up to USD 185.51 per tonne for five years on certain varieties of Chinese steel to guard domestic players from cheap imports from the neighbouring country. The revenue department imposed the duty based on recommendations of the Directorate General of Trade Remedies (DGTR), according to a government notification.JSW Steel Ltd, Sunflag Iron & Steel Co, Usha Martin, Gerdau Steel India, Vardhman Special Steels and Jayaswal Neco Industries Ltd had jointly filed an application before DGTR for initiation of investigations and levying of anti-dumping duties on some steel products. PTI
- 2.10 pm IST Mphasis Q2 net profit rises 37%, shares fall 5%Mphasis reported a net profit of Rs 271 crore in the quarter ended September 30, up 37% from Rs 197.6 core in the year-ago quarter. Total income increased by 19.5% to Rs 1,962.4 crore during the September quarter from Rs 1,642.2 crore in the same quarter last year. Shares fell 4.91% to Rs 1,068.
- 1.32 pm IST Market update: Sensex, Nifty extend lossesThe BSE Sensex slumps 520.99 points, or 1.50%, to 34,258.59, while the Nifty 50 dived 155.65 points, or 1.49%, to 10,297.40. The BSE MidCap and SmallCap indices plunged 1.04% and 1.52%, respectively. Sixteen out of 19 sectoral indices on BSE traded lower with energy falling most at 3.68% followed by realty and IT, which declined over 2%. Telecom, FMCG and metal gained.Sun Pharma, HPCL, Vedanta, Bharti Airtel and Hindustan Unilever were among the major gainers on key indices, whereas Indiabulls Housing Finance, Yes Bank, Reliance Industries, Infosys and Hero MotoCorp were among the top losers.
- 1.17 pm IST European stocks waver at openEuropean stock markets wavered in opening deals on Friday heading into the weekend. In initial trade, London’s benchmark FTSE 100 index of major blue-chip companies rose almost 0.2 percent to 7,039.37 points from the closing level on Thursday. In the eurozone, Frankfurt’s DAX 30 fell about 0.1 percent to 11,578.85 points, while the Paris CAC 40 rose by nearly 0.1 percent to stand at 5,119.64. AFP
- 12.47 pm IST RBI allows banks to lend more to some NBFCs, shares trade lowerThe Reserve Bank Friday announced more measures to increase liquidity flows to the non-banking financial companies. The RBI permitted banks to use government securities equal to their incremental outstanding credit to NBFCs, over and above their outstanding credit to them as on October 19, to be used to meet liquidity coverage ratio requirements. Read moreThe announcement failed to lift NBFC and HFC stocks. Shares of Indiabulls Housing Finance plunged 15.55%, DHFL dived 11%, IIFL Holdings slumped 11.28% and Edelweiss Financial Services fell 7.25%.“RBI directive is a signalling factor that they’re comfortable with banks taking exposure to NBFCs and housing finance companies even at the shorter end,” says Alpesh Mehta, deputy head of research at Motilal Oswal Securities Ltd.Though the RBI directive will facilitate additional liquidity for NBFCs, it might have a different implication for each of them, depending on what their lenders decide,” says Siddharth Purohit, a senior research analyst at SMC Global Securities.
- 11.48 am IST MindTree shares fall most in over 7 years as brokerages cut PShares of MindTree Ltd plunged as much as 18.1% at Rs 801.1 on a cautious macro outlook particularly in the UK market. The IT firm’s stock marks biggest intraday percent loss since Sept 2011. The company’s September-quarter profit surged about 65% to Rs 206 crore. Read moreMacquarie Research cut the stock’s price target to Rs 920 from Rs 940, maintaining “underperform” rating.Goldman Sachs lowered PT to Rs 1,394 from Rs 1,455, with “buy” rating. The brokerage modestly cut FY2019-FY2021 earnings per share estimates to account for weaker-than-expected topline growth in Q2 and cautious growth outlook shared by management in the near term in the UK market because of Brexit. Reuters
- 11.25 am IST ACC shares slumps 8% as Q2 results miss estimatesACC shares traded 6.77% down at Rs 1,435.60 per share. Intraday, the stock fell as much as 8.4% to Rs 1,410.05 per share in its biggest intraday percent drop since November 2016. The company posted a 15.7% rise in quarterly profit at Rs 206 crore, which fell short of market estimates as expenses rose. Expenses increased 9.8% to Rs 3,160 crore.Nomura analysts maintained “Buy” rating on the stock with TP of Rs 1,900. “Rising cost inflation remains a key risk to earnings in the near term,” say analysts.Morgan Stanley said cost inflation was largely driven by higher freight and material costs, slag price in particular, while energy costs were flattish notwithstanding sharp rise in fuel costs. MS rated the stock “overweight” with TP of Rs 1,921.Prabhudas Lilladher said, “Due to continuity of intense competition, unabated capacity addition and weakness in high margin Trade segment, we expect prices to remain weak for next couple of years. However, the earnings cut remains limited for ACC at 4% each for CY18e/CY19e supported by lower costs and better regional mix.” The brokerage maintained “buy” with TP of Rs 1,710.
- 10.57 am IST Indiabulls Housing down 14%, DHFL slumps 11%Shares of housing finance companies continued their downward trend with Indiabulls Housing Finance falling over 14% and DHFL shares down 11%. PNB Housing Finance slumped 12%, Repco Home Finance was down 7.8%, LIC Housing Finance declined 2.5%, and Bajaj Finance lost 4%.The imminent slowdown in credit growth of non-banking financial companies (NBFCs) could lead to a credit crunch in India, with overall system credit growth falling to less than 10%, Credit Suisse said in a report. In addition, public sector banks are constrained for capital, including 11 banks under prompt corrective action (PCA), and private lenders who have been struggling in mobilisation of deposits with loan-to-deposit ratios (LDRs) in the range of 90-108% for some, said the report.
Over the last few years, NBFCs and housing finance companies have seen strong supply of funds from banks and mutual funds. https://t.co/MB3BjPNJEw— Livemint (@livemint) October 18, 2018
- 10.14 am IST Analysts positive on Reliance despite challengesHDFC Securities said, “We expect GRM to be under pressure due to higher oil prices and lower L-H differential. Petchem business could see some improvement in margins with stabilization of ROGC and Petcoke Gasifiers and commissioning of ethane cracker.” The brokerage maintained “buy” on the stock.Kotak Institutional Equities said, “We reiterate SELL given our concerns on persisting high capex, non-contributing C-WIP and rising debt levels, all of which constrain a sustainable improvement in return ratios and free cash flows in the medium term. The recent deterioration in refining and petchem margins may compound woes in the near term.”IDBI Capital said, “We would wait for stabilization of capex at lower level and growth trajectory of Jio before assigning it a higher valuation.” The brokerage firm has downgraded the stock to Hold and maintained its target price to Rs 1200 a share. “We expect significant monetization of GigaFiber business may take longer than expected time due to last mile connectivity issues. Though strategic investment in Hathway and Den would help speed up the work. Though, pricing pressure in Mobility business may keep ARPU at a lower level in near term,” the brokerage said in a report.Morgan Stanley analysts said cost inflation challenges exist, but could unwind in mid-2019. “What’s next is a key question amid worry that growth kickers are subsiding,” MS added. CIMB believes record capex and rising net debt remain a concern, and that Q3 will see additional capex for the acquisitions of multiple system operators and Reliance Communications Ltd assets. CIMB maintained “reduce” rating with TP of Rs 835.Nomura said the key disappointment was further delays in petcoke gasification. It retains PT of Rs 1,480 with “buy” rating.Of 72 brokerages covering the stock, 26 rate it “buy” or higher, five “hold” and five “sell” or lower; their median PT is Rs 1,282.50, according to the Thomson Reuters data.
- 9.48 am IST Mindtree shares plunge 13% after Q2 earningsMindtree shares plunged as much as 13.15% to Rs 850.20 per share. The company on Wednesday posted a 65.4% rise in consolidated net profit at Rs 206.3 crore for the September quarter compared to a net profit of Rs 124.7 crore in the year-ago period. Its revenues rose 31.8% to Rs 1,755.4 crore in the quarter under review from Rs 1,331.6 crore in the year-ago period.Dolat Capital Market said, “Client specific issues drag overall revenue growth in this quarter, however we expect growth to come back on track in the near term helped by strong demand in the BFSI and retail verticals which remain key for digital adoption.” It has revised EPS estimates by 6.6% and 2.8% for FY20 and FY21, respectively, factoring rupee depreciation. The brokerage maintained “Accumulate” on the stock with a TP of Rs 1,150.
If buzzwords such as digital services, artificial intelligence and bots were enough to excite investors, Mindtree shares should be on fire after its September quarter resultshttps://t.co/FsnhkyS9Di— Livemint (@livemint) October 19, 2018
- 9.40 am IST Jet Airways shares jump 8% on Tata Sons stake purchase buzzJet Airways shares surged as much as 8.18% to Rs 233.90 per share following news that Tata Sons Ltd has held preliminary discussions to buy a large stake in Jet Airways. Tata has sought management control of Jet Airways, seeking at least 26% initially and another 26% via an open offer later, the Times of India reported on Thursday.
- 9.33 am IST Market update: Sensex, Nifty fall over 1%The BSE Sensex traded 380.88 points, or 1.10%, lower at 34,398.70, while the Nifty 50 fell 113 points, or 1.08%, to 10,340.05. In early trade, the Sensex fell as much as 491 points to 34,288.25, ana the Nifty 50 plunged 148.45 points to 10,304.60.The BSE MidCap index rose 0.35%, but the SmallCap Index was down 0.43%. Among the sectoral indices on BSE, IT, teck and energy fell most at over 2%. Telecom, utilities and metal led gains.
- 9.23 am IST RIL shares fall over 6% after Q2 resultsShares of Reliance Industries fell as much as 6.59% to Rs 1,073.15 after the company posted lower-than-expected September quarter earnings. RIL on Friday said its net profit rose 17.4% to Rs 9,516 crore. Quarterly revenue at the energy-to-telecom conglomerate rose 55% to ₹1.56 trillion from ₹1.10 trillion in the year earlier. RIL’s consolidated net sales were expected to come in at ₹1.41 trillion, according to a Bloomberg poll of seven analysts. Net profit was estimated at ₹9,630.20 crore, according to 10 analyst estimates.
- 9.18 am IST Yes Bank shares down 5% after RBI refuses Rana Kapoor’s term extensionYes Bank Ltd fell as much as 4.91% to Rs 220.35 after the company said on Wednesday that RBI rejected its request to extend managing director (MD) and chief executive officer (CEO) Rana Kapoor’s tenure. RBI directed the bank to appoint his successor by 1 February 2019. Read more
- 9.11 am IST Rupee edges lower against dollarThe rupee opened marginally lower against the US dollar, tracking losses in local equity markets and Asian currencies. At 9.10am, the home currency was trading at 73.63 a dollar, up 0.18% from its Wednesday’s close of 73.61. The currency opened at 73.62 a dollar. The 10-year gilt yield stood at 7.887% from its previous close of 7.912%. So far this year, the rupee has declined 13.23%, while foreign investors have sold $4.51 billion and $8.61 billion in the equity and debt markets, respectively.
- 8.33 am IST Opening bell: Cues to look out for before trading today■ Asian markets opened with losses. Stocks fell as sentiment soured on issues ranging from trade worries and growth concerns in China, reports Reuters. Overnight, US stocks closed sharply lower. S&P 500 at 2,768 is down 1.44%.■ Tata Sons Ltd has held preliminary discussions to buy a large stake in debt-laden Jet Airways (India) Ltd, the Times of India reported on Thursday. Tata has sought management control of Jet Airways, the paper said.■ Reliance Jio Infocomm Ltd, a unit of Reliance Industries Ltd, which disrupted mobile telephony with rock-bottom tariffs, is set to do an encore in the broadband and cable market, reports Mint.■ Meanwhile, Reliance Industries said it will invest Rs 2,045 crore to pick 66% stake in Den Networks Ltd. It will also invest Rs 2,940 crore for a 51.3% stake in Hathway Cable and Datacom Ltd.■ Yes Bank Ltd’s co-promoter, managing director and CEO Rana Kapoor has approached rival promoter Madhu Kapur with a proposal to combine their stakes and form a joint promoter group, reports Mint.■ The imminent slowdown in credit growth of non-banking financial companies (NBFCs) could lead to a credit crunch in India, with overall system credit growth falling to less than 10%■ The exodus of migrant workers from Gujarat, could reduce India’s textile production, reports Business Standard. According to the report, the textile industry is concentrated in a few pockets of Gujarat, Maharashtra, Tamil Nadu and Karnataka. R. Sree Ram/MintWith inputs from Reuters
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