Closing bell: Sensex, Nifty fall for 3rd session; HDFC twins lead losses9 min read . Updated: 19 Sep 2018, 04:54 PM IST
BSE Sensex closed 169.45 points down at 37,121.22, while the Nifty 50 ended 42.55 points lower at 11,236.35. Here are the highlights from the markets
OTHERS : Mumbai: The BSE Sensex and the NSE’s Nifty 50 erased early gains and turned negative in the afternoon session. Both the indices declined for the third straight day on Wednesday, mainly due to heavy losses in finance stocks such as HDFC. Shares of asset management companies HDFC AMC and Reliance Nippon AMC fell up to 12% after market regulator Sebi cut the total expense ratio on mutual fund schemes. FIIs sold equities worth Rs 1,143.73 crore on a net basis on Tuesday, while DIIs purchased shares worth Rs 264.66 crore, provisional data showed.In global markets, European shares advanced, tracking gains in their Asian peers, despite the US-China trade war deepening. Oil prices rose after Saudi Arabia expressed comfort with Brent prices rising above $80 a barrel. Here are the highlights from the markets:
Closing bell: Sensex, Nifty fall for 3rd session
BSE Sensex closed lower by 169.45 points, or 0.45%, at 37,121.22, while the Nifty 50 fell 42.55 points, or 0.38%, to close at 11,236.35. BSE MidCap and SmallCap fell 0.72% and 0.98%, respectively.Among the BSE sectoral indices, metal, oil and gas, basic materials and IT gained, while FMCG, finance, realty and consumer durables declined.Shares of HDFC group companies led losses as the HDFC AMC stock fell over 8% after Sebi on Tuesday cut the total expense ratio on mutual fund schemes. HDFC fell 1.35% and HDFC Bank was down 1.58%.Coal India, ONGC, Tata Steel and GAIL were among the top gainers, while IndusInd Bank, Maruti, Yes Bank and Bharti Airtel were among the major losers.
Gold prices rise today by Rs 50
Gold prices advanced by Rs 50 to Rs 31,660 per 10 gram on Wednesday in line with a firm global trend amid continued buying by local jewellers, reported PTI. In Delhi, gold rates of 99.9% and 99.5% purity rose by Rs 50 each to Rs 31,660 and Rs 31,510 per 10 gram, respectively. Following gold, silver prices surged by Rs 300 to Rs 38,000 per kg on increased offtake by industrial units and coin makers. Read more
Newgen Software shares gain 2% on pact with HP
Newgen Software Technologies Ltd said that the company has signed an agreement with Hewlett Packard Enterprise India Pvt Ltd for supply of software licences and related services. The work order is worth about Rs 78.85 crore. Shares rose as much as 2.1% to Rs 243.95.
KIOCL shares plunge 20%
Iron ore pellet maker KIOCL Ltd shares fell by daily limit of 20% to Rs 183.2. The company on Tuesday approved share buyback worth up to Rs 214 crore at Rs170per share, an over 25% discount to Tuesday’s close. The stock had gained 30% as of Tuesday after the company, owned 99% by the government, said last Wednesday that it was considering buyback. More than 400,000 shares change hands, compared with the 30-day average of more than 114,200 shares. As of last close, the stock had shed 38.9% this year. Reuters
Varroc Engineering unit forms JV in Romania
Varroc Engineering Ltd said that unit VarrocCorp Holdings BV has signed a joint venture agreement with Romania-based private company ELBA SA. The JV will focus on electronics manufacturing and will support the company’s growth in Europe, the company said. According to the terms of the agreement, Varroc and Elba will contribute equity for the JV in the ratio of 70% and 30%, respectively. Varroc Engineering shares traded 1.50% down at Rs 995.70.
Dilip Buildcon to consider strategic initiatives
Dilip Buildcon Ltd said that its board of directors will consider a proposal to take strategic initiatives by way of backward and forward integration which will add value addition to the company as well as to the stakeholders. Shares traded 2.13% down at Rs 732.05.
Sugar stocks gain on report that govt could offer incentives
Shares of sugar mills gained after reports that the government could offer incentives on sugar exports. Shares of Balrampur Chini Mills rose as much as 5.3%, Dalmia Bharat Sugar and Industries 9.5%, Dhampur Sugar Mills 7%, Uttam Sugar Mills 7.1% and Rajshree Sugars and Chemicals 9.7%.The government is likely to consider on Wednesday a proposal to get sugar mills to export 5 million tonnes of sugar by incentivising overseas sales in the 2018/19 season, reported Reuters, citing two government officials. The government is also planning to raise the price it pays directly to cane growers to 138 rupees a tonne in the 2018/19 season starting from Oct 1, up from 55 rupees this season, government sources told Reuters.
RBI has the means to boost rupee from record low
RBI has been slowing its intervention efforts in recent months as emerging markets faced a rout and oil prices surged
RBI has been slowing its intervention efforts in recent months as emerging markets faced a rout and oil prices surgedhttps://t.co/pvKXWpRhTd— Livemint (@livemint) September 19, 2018
European equities steady at open
Europe’s main stock markets steadied at the open, with London and Frankfurt edging higher but Paris flatlined. In initial trade, London’s benchmark FTSE 100 index of major blue-chip companies advanced 0.1% to 7,308.45 points. In the eurozone, Frankfurt’s DAX 30 also added 0.1% to 12,168.20 points, but the Paris CAC 40 was flat at 5,362.94 compared with Tuesday’s closing levels. AFP
Strides Pharma shares struggle after USFDA issues 3 observations
Strides Pharma Science on Tuesday said that the USFDA has issued three observations after inspecting its formulations facility in Bangalore. The company believes that the observations are not material in nature and have already responded to the USFDA, it added. Shares trade at Rs 497.50, down 0.32% from previous close. During the day, the stock hit a low of Rs 472.40.
Metal stocks trade higher
Shares of metal companies advanced after reports that the government has proposed increasing the effective import duty on some steel products in order to support rupee. The Nifty Metal Index rose nearly 2% led by Coal Indai, Sail, Jindal Stainless and National Aluminium.The steel ministry has proposed hiking the effective import duty on some steel products to 15% from current rates ranging from 5% to 12.5%, reported Reuters, citing two people and a government document.
Ircon IPO oversubscribed 1.6 times today
As of 11.45am, the Ircon IPO received bids for 16,189,320 against the total issue price of 9,905,157 shares. The Ircon IPO has a price band of Rs 470-475 per equity share and will close today. At the higher end of the price band, the shares are estimated to fetch over Rs 470 crore. Read more
TVS Motor expands presence in Mexico
TVS Motor Co. Ltd said that it has partnered with Mexican auto company, Torino Motors, to expand the company’s presence in the country. As part of the association, TVS Motor will work with Torino Motors to open 40 exclusive stores in the country for the distribution of two-wheelers. TVS Motor shares traded 0.24% down at Rs 591.75.
Corporate casualties of a weakening rupee and surging crude oil prices
Rising crude oil prices and a depreciating rupee would impact financial performance of manufacturers of tiles, plywood, paints and adhesives, and oil marketing companies
What analysts say about impact of TER cut on AMCs
Shares of asset management companies HDFC AMC and Reliance Nippon AMC fell over 7% and 8%, respectively, after Sebi on Tuesday capped the total expense ratio (TER) for mutual fund schemes. Here is what analysts say about the impact on AMCs:Morgan Stanley cut the target price for HDFC AMC by 14%, saying the stock has been weak in anticipation of adverse regulation. It expects some further near-term weakness.Nomura cut rating for Reliance Nippon to “neutral” from “buy”, and TP to Rs 210 from Rs 315. The brokerage says this TER cut clearly derails profitability for asset management companies. AMCs will have to also absorb a fair share of the impact and this will take away any operating leverage left in near term for the business, noted Nomura.Citi says, while lower TER would mean lower revenues, mutual funds could cushion the impact by some pass through to distributors and by lower promotional expenses. Over medium term, lower charges can make mutual funds more attractive for investors and aid penetration, added Citi.CLSA says AMCs’ ability to pass on impact to distributors will be key to their ability to defend the earnings impact. If they pass 50-70% of impact then the impact on earnings would moderate to 10%, it added.Emkay Research says “(This) will have direct negative impact on overall revenue yields for most AMCs in the industry. Though the large AMCs are enjoying economies of scale and operational efficiencies with recent rise in AUMs, however this will further pressure the yields on AUM for AMCs.”
ILFS Transportation Networks gains on NHAI payment
Shares of ILFS Transportation Networks Ltd jumped as much as 9.31% to Rs 27.40 per share after the company on Tuesday disclosed the NHAI will pay the company Rs 425 crore for losses suffered by it due to cost overrun in a project in Uttar Pradesh.
MCX shares up 4% as Sebi opens commodities derivatives to foreign investors
Shares of Multi Commodity Exchange of India Ltd rose 3.98% to Rs 814.20 after Sebi said that they have taken the first step to open commodities derivatives market to foreign investors.
Titan shares fall after CLSA downgrades stock
hares of Titan Co Ltd fell as much as 4.40% to Rs 788.15 after brokerage firm CLSA downgraded the stock to “sell” from “outperform”, and lowered its price target to Rs 720 a share from Rs 1050 a share.
HDFC AMC, Reliance Nippon AMC stocks fall after Sebi cuts TER
Shares of asset management companies (AMCs) were trading lower after the Securities and Exchange Board of India (Sebi) capped the total expense ratio or TER charged to customers for various mutual fund schemes at its meeting on Tuesday. HDFC AMC shares fell as much as 7.61% to Rs 1,422.90. Reliance Nippon Life Asset Management Ltd shares declined as much as 8.21% to Rs 196.55.
Rupee strengthens against dollar
The Indian rupee strengthened marginally against the US dollar on Wednesday, tracking mixed Asian currencies market after traders shrugged off new tariffs. At 9.15am, the rupee was trading at 72.78 a dollar, up 0.23% from its Tuesday’s close of 72.97, its record low. The home currency opened at 72.70 per dollar. The 10-year bond yield stood at 8.127%, from its previous close of 8.14%. Bond yields and prices move in opposite directions. Read more
Commodity corner: Oil prices fall, gold rates gain
Oil prices pulled back from gains racked up the previous day, pushed down amid a surprise climb in US crude stockpiles. Brent crude futures had dropped 22 cents, or 0.28%, to $78.81 per barrel, chipping away at Tuesday’s 1.26 percent gain. US WTI crude fell 0.20%, or 14 cents, to $69.71 a barrel.Gold prices edged up as the dollar weakened despite another round of tit-for-tat tariffs in the Sino-US trade dispute. Global spot gold rate had climbed 0.1% to $1,199.18 an ounce. US gold futures were up 0.1% at $1,203.70 an ounce.Metals: Shanghai copper prices rose sharply in early trade, tracking a jump in London in the previous session and hitting a one-month high as investors shrugged off an escalation of the US-China trade row. The most-traded copper contract on the Shanghai Futures Exchange rose as much as 2.8% overnight. Zinc was the other big gainer in Shanghai, rising as much as 2.5%. Reuters
Opening bell: Cues to look out for before trading today
■ Asian stocks rose in the morning trade as investors looked past the latest escalation in the US-China trade conflict, reports Reuters. Overnight, US markets closed with gains. S&P 500 gained 0.54% to 2,904.■ Keep an eye on asset management companies (AMCs). Market regulator Sebi capped the total expense ratio (TER) for equity-oriented mutual fund schemes. The TER cap could have a Rs1,300-1,500 crore impact on the revenue of the mutual fund industry.■ IL&FS Financial Services, put up for sale three weeks ago, has failed to find any taker as prospective investors are worried over its high bad debt and recent defaults, reports Business Standard.■ Meanwhile, IL&FS Transportation Networks said state-run NHAI would pay it a compensation of Rs 4.25 billion for losses suffered by it due to cost overrun in a project in Uttar Pradesh, reports PTI.■ India Post Payments Bank partnered with Bajaj Allianz Life Insurance, a joint venture of Bajaj Finserv Ltd, to expand product offerings for its customers.■ Nestle, Unilever and Coca-Cola are among bidders for GlaxoSmithKline’s Indian Horlicks nutrition business, expected to fetch more than $4 billion, reports Reuters. R. Sree RamWith inputs from Reuters