Sensex 324 points, Nifty ends April series below 11,700

25 Apr 2019

Late Sell-off Drags Sensex

Benchmark indices saw major selling pressure in late trade on April 25 and reversed more than half of previous day's gains.

The BSE Sensex fell 323.82 points to 38,730.86 and the Nifty50 dropped 84.40 points to 11,641.80 amid rising crude oil prices.

Banking & financials pulled the market lower.

Bharti Infratel (down 10.22 percent), Tata Steel (2.76 percent), Vedanta (2.49 percent), Indiabulls Housing Finance (2.11 percent) and Hindalco (2.07 percent) were top losers.

UltraTechCement and Grasim Industries rallied 5 percent each. BPCL, Dr Reddy's Labs and UPL were other gainers.

Brent Oil Hits $75/bbl For First Time in 2019

Brent oil rose above $75 per barrel for the first time this year as quality concerns forced the suspension of some Russian crude exports to Europe while the United States prepared to tighten sanctions on Iran.

Brent crude futures were at $75.33, up 1.02 percent. US West Texas Intermediate crude was at $66.09 per barrel, up 0.3 percent. (Source: Reuters).

Indiabulls Ventures Q4 Earnings

Company's net profit nearly doubled to Rs 109.8 crore in March quarter, against Rs 54.9 crore in same period last year.

Revenue from operations jumped 55.4 percent to Rs 600 crore during the quarter YoY.

TRAI pulls up Dish TV India

Telecom regulator TRAI has directed Dish TV India to comply with the provisions of the new framework for broadcasting and cable TV services, acting on consumer complaints pertaining to the operators' specific offering and grievance redressal helpline.

TRAI, which has promised strict action against those cable TV and direct-to-home (DTH) players who are found violating its new tariff order and regulatory regime, had earlier this week also pulled up Bharti Telemedia on similar grounds.

As per complaints, the DTH operator "is forcefully offering a bouquet of free-to-air channels with no choice to subscribers and without their consent", the Telecom Regulatory Authority of India (TRAI), which is also the broadcast regulator, said in a directive on its website. (Source: PTI).

Maruti Suzuki Q4 Earnings

Country's largest passenger vehicle maker Maruti Suzuki India has reported a 5 percent year-on-year degrowth in March quarter profit, dented by weak operating performance and muted sales volume.

Net profit during the quarter declined to Rs 1,795.6 crore, from Rs 1,882.1 crore in same period last year. "This quarter was marked by adverse foreign exchange rates and commodity prices, higher depreciation and higher sales promotion expenses partially offset by cost reduction efforts," the company said.

Standalone revenue from operations grew by a percent year-on-year to Rs 21,459.4 crore in Q4 with sales volume degrowth of 0.7 percent YoY.

FII Outlook on Market

Emerging Market Equity Strategist, Adrian Mowat told CNBC-TV18 that the dynamics for India within the emerging market pool is probably India is neutral to maybe a bit of an underperformer.

"Because it has these headwinds in terms of a stronger dollar and a higher oil price that would hit India more than perhaps it would hit a recovering Korea, Taiwan or China. I don't see how the election can generate a positive surprise because the expectation is a continuation of the current administration," he said.

Drug Approval

Zydus Cadila has received the final approval from the USFDA to market Leflunomide Tablets USP (US RLD — Arava Tablets), 10 mg and 20 mg, Cadila Healthcare said in its BSE filing.

It will be manufactured at the group’s formulations manufacturing facility at Baddi.

This medication is used to treat rheumatoid arthritis, a condition affecting multiple small and large joints of the body.

Grasim Industries at Over 6-month high

Shares of Aditya Birla Company Grasim Industries traded at over 6-month high levels, up 6.6 percent intraday after its subsidiary UltraTech reported healthy earnings in March quarter.

The stock hit an intraday high of Rs 939.45, the highest level since October 4, 2018.

Market Off Day's High:

Benchmark indices were off day's high in afternoon as Brent crude futures, the international benchmark for oil prices, reclaimed $75 a barrel.

The BSE Sensex rose 82.01 points to 39,136.69 and the Nifty50 gained 34.50 points at 11,760.70.

Investment in L&T IDF

L&T Finance Holdings said its subsidiary L&T IDF entered into a commitment for up to 25.1 percent minority equity investment from Apis Growth Fund II, a private equity fund managed by Apis Partners LLP.

Out of the total investment amount, 70 percent is in the form of growth capital for L&T IDF and 30 percent is for purchase of shares from existing shareholders (subsidiaries of LTFH), it added.

UltraTech Cement Jumps 6%

Prabhudas Lilladher upgraded the stock to accumulate with revised target price to Rs 4,700 from Rs 3,725 earlier.

UltraTech Cement reported Q4FY19 earnings above our estimates driven by 9.6 / 4.8 percent lower than expected energy/freight costs (on per tonne basis). EBITDA margin reported at Rs 961 per tonne, +12.2 percent / Rs 105 YoY highest after a six quarters.

Ultratech Nathdwara Cement Limited (UNCL-erstwhile Binani Cement) surprised with EBITDA/t of Rs 830 (substantial improvement of Rs 740 QoQ) led by better realisations and cost advantages. UNCL will also reduce debt by selling non-core assets in UAE/China by Q4FY20.

Prabhudas Lilladher upgraded EBITDA estimates for FY20e/FY21e by 15 / 21 percent to factor in higher realisations coupled with higher capacity utilisation, improved margins and deleveraging of Non-core assets in acquired assets.

Fund Flow Tracker

Kotak said listed funds witnessed outflows of $408 million in March, led by non-ETF funds, which saw selling of $384 million.

India-dedicated funds continued to see outflows. "India-dedicated funds saw outflows of $394 million led by non-ETF outflows of $257 million. GEM funds saw inflows of $110 million led by $112 million of ETF inflows."

Vodafone Idea Rights Issue:

The Rs 25,000-crore rights issue of Vodafone Idea has been subscribed 1.07 times, according to data accessed by merchant bankers involved in the process.

Through the rights issue, which ran between April 10 and April 24, the country's largest telecom operator offered 2,000 crore new shares at Rs 12.50 apiece.

As per data published by NSE, the rights issue has received bids for 1,109 crore shares.

"The Vodafone Idea rights has been subscribed 1.07 times as per data available from registrar to the rights issue last night. This can go up. Final data is expected to be published by the registrar today (Thursday)," one of the bankers involved in the rights issue process told PTI.

Market Extend Gains:

Benchmark indices extended gains with the Nifty50 reclaiming 11,750 levels amid positive breadth.

The BSE Sensex rallied 121.42 points to 39,176.10 and the Nifty50 climbed 46.90 points to 11,773.10. About 1,104 shares advanced against 750 declining shares on the BSE.

UltraTech Cement (up 5.06 percent), Grasim (3.69 percent), Yes Bank (3.41 percent), BPCL (1.78 percent) and UPL (1.67 percent) were top gainers among Nifty50.

Bharti Infratel, Infosys, Vedanta, ONGC and Tata Steel were losers.

CLSA Downgrades Bharti Infratel

Global brokerage house CLSA downgraded Bharti Infratel to sell from outperform and also slashed price target to Rs 285 from Rs 300 earlier as tenancy outlook after March quarter earnings will remain muted.

Tenancy exits spiked 60 percent QoQ while tenancy additions were down 11 percent QoQ in Q4. Hence the research house cut FY20-21 estimates by 2-4 percent and expects tenancies to see a 2.5 percent CAGR over FY19-21.

"4 percent yield a key support and special payouts or buybacks could be catalysts," CLSA said.

Indiabulls Housing Finance Rebounded From Day's Low

Indiabulls Housing Finance shares gained 4 percent from day's low amid mixed view from brokerages after March quarter earnings.

The company reported a 7 percent year-on-year degrowth in consolidated profit at Rs 1,001.4 crore, but net interest income grew by 5.8 percent to Rs 1,591 crore in quarter ended March 2019, which both missed analyst estimates.

CNBC-TV18 poll estimates for profit were at Rs 1,050 crore and NII was likely to be at Rs 1,618 crore for the quarter.

Record Date

Indiabulls Housing Finance told exchanges that it has fixed May 8, 2019 as the record date for the purpose of payment of interim dividend.

The dividend will be paid on or before May 23, 2019, it said.

Nifty Rollovers near 58.06% versus 3-month Average of 54.81%

Marketwide rollovers were at 66.32 percent against the 3-month average of 68.35 percent, ICICI Securities said, adding highest rollover was seen in Vodafone Idea, Adani Enterprises, Century Textiles, Kaveri Seeds and Glenmark Pharma.

All futures & options contracts will expire today and traders will roll over their positions to next month.

Rollover activity was relatively low in Nestle India, Bhel, Indiabulls Housing Finance, NIIT Technologies and DLF, the brokerage said.

Rollover activity in the Nifty improved significantly on the back of significant fresh additions in the next series. In the last session, the April series shed almost 2 million shares versus addition of more than 4.2 million shares in May series. The current Nifty open interest of almost 9.1 million shares is relatively low compared to the open interest seen in the last series near settlement.

Oriental Hotels Shares Gain

Shares of Oriental Hotels added more than 2 percent intraday after the hotelier announced plans to raise funds via Non-Convertible Debentures or other debt securities on a private placement basis for FY20.

The company in its BSE release said that the board will take the decision on the same on April 25.

The share touched its 52-week high of Rs 57.50 and 52-week low of Rs 33.65 on 25 April 2018 and 1 October 2018, respectively.

Market Update

Benchmark indices continued to consolidate in morning with the Sensex falling 5.47 points to 39,049.21. The Nifty50 gained 10.40 points at 11,736.60.

But the broader markets outperformed frontliners as the Nifty Midcap and Smallcap indices added half a percent amid positive breadth.

About two shares advanced for every share rising falling on the BSE.

Market Opening:

Benchmark indices opened flat after a big move seen in previous session.

The 30-share BSE Sensex gained 25.62 points at 39,080.30 and the Nifty50 rose 0.70 points to 11,726.90.

UltraTech Cement, Grasim Industries, Power Grid, HDFC Bank and HCL Technologies were gainers in early trade.

Crude Update:

Oil prices fell on Thursday as record US output and rising crude stockpiles dampened the impact on markets of tighter US sanctions on Iran and producer club OPEC’s continued curbs on supply.

Brent crude futures were at $74.35 per barrel, down 22 cents, or 0.3 percent, from their last close.

US West Texas Intermediate (WTI) crude futures were at $65.60 per barrel, down 29 cents, or 0.4 percent, from their previous settlement. (Source: Reuters)

Market Pre-Opening

The market opened moderately higher in pre-opening trade with the Sensex rising 42.89 points to 39,097.57.

The Nifty50 gained 16.40 points at 11,742.60.

Rupee Opening:

Indian rupee has opened marginally lower at 70 a dollar, against closing of 69.87 in previous session.

Rushabh Maru, Research Analyst - Currency and Commodity at Anand Rathi Shares and Stock Brokers told Moneycontrol that rupee may remain under pressure in the near term as the crude oil prices are rising continuously in the international market.

"The dollar index is also rising and that is a sign of worry. In the near term the rupee might depreciate till 70.50 in the spot. Having said that sharp depreciation in the rupee is unlikely due to strong sentiments in the domestic equity market on expectations of NDA coming back to the power," he said.

Asia Update

Asian markets traded mixed in morning on April 25 with the China's Shanghai Composite falling 0.45 percent and South Korea's Kospi down 0.12 percent, following dip on Wall Street amid mixed earnings yesterday.

Japan's Nikkei 225 gained 0.36 percent.

Market Outlook:

Amit Sachdeva of HSBC told CNBC-TV18 that market has rallied in past couple of months but may now see some near-term volatility as crude prices inch up.

However, the current bull run has more legs, aided by a confluence of several supportive fundamental factors, he said.

The key risks would be a sharp rise in crude prices, a significant rise in inflation, a drought during the summer, a US recession or any large-scale escalation in geopolitical tensions, he added.

Market Pre-Opening

The SGX Nifty indicated that benchmark indices are expected to see flat to negative opening on April 25. Mixed Asian cues and weak US markets also indicated that same trend.

SGX Nifty was down 10 points at 11,727, at the time of publishing this copy.

On April 25, the Sensex was up 489.80 points or 1.27 percent at 39,054.68 and the Nifty50 climbed 150.20 points or 1.30 percent to 11,726.20.