Sensex down 155 points; Yes Bank falls 14%, auto stocks slip

"We expect that in the near term RBI policy outcome (scheduled on October 04th) will provide some direction to the markets. Further, markets are likely to remain range bound till the beginning of the earnings season from mid-October. Moreover, global developments particularly US-China trade war and crude oil prices may continue to induce volatility in the markets. We suggest investors should stick to stock specific approach," Ajit Mishra Vice President, Research, Religare Broking said.

"Nifty is trading in a range of 200 points since last 5 days whereas 11,600 is standing as crucial resistance and 11,400 is acting as strong support. As long as the index is trading above 5 EMA placed around 11,450, we suggest opting ‘Buy on dip’ strategy. Moreover, a sustained move below 11,400 will confirm the reversal," Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors said.

The MPC will be going into the meeting with 1QFY20 GDP growth at 5% against estimate of 5.8-6.6% in 1HFY20 and 6.9% for FY2020 and having unequivocally expressed growth as its primary concern. With inflation remaining within its comfort range, despite recent onion price increases, revisions to its growth forecast warrant a sharper-than-usual rate cut in the October policy. We pencil in a 40 bps of rate cut which should be a signal to the market that the MPC is not quite done as it front loads the remaining couple of rate cuts in the cycle. Further, with the start of the external benchmarked loans in October, a larger rate cut will help in quicker transmission of rate cuts even as the non-benchmarked loans continue to factor in the past rate cuts.

Globally, we are seeing overall interest rates being stable or dropping, accompanying slowdown in growth. With a sizeable cut in corporate tax rates, the fiscal response has been sharp. This along with the RBI’s easier monetary stance - lower rates, easier liquidity- should help to arrest the economic downturn, and boost sentiments. Against this backdrop, the central bank is likely to have a dovish stance. More importantly, one needs to study the policy narrative to get a direction of likely future action by the RBI, liquidity measures, any other structural changes etc.

Market close: Benchmark indices ended lower but off days low in the volatile session on September 30.

At close, the Sensex was down 155.24 points at 38,667.33, while Nifty was down 37.90 points at 11,474.50. About 777 shares have advanced, 1694 shares declined, and 151 shares are unchanged. 

Yes Bank, IndusInd Bank, SBI, Zee Entertainment and ICICI Bank were top losers on the Nifty, while lowers were Bharti Airtel, UPL, HCL Tech, Infosys and ITC.

Among sectors, buying seen in the IT, infra, FMCG and energy sectors, while selling seen in the auto, bank, pharma and metal.

Nifty yet again bounced back sharply from our mentioned support of 11,400. Near term, traders should look to remain long on the index with a stop below 11,400. Till this support is protected on the downside expect the index to consolidate between 11,400-11,700 as mentioned earlier. Index is witnessing a phase of consolidation of its recent near-vertical up-move. Undertone continues to remain bullish overall. Above 11,700 index is likely to head towards 12,000 zone. 

Rupee near day's low: The Indian rupee has erased all its morning gains and trading near day's low at 70.70 per dollar, down 14 paise from previous close.

Buzzing: Shares of Kalpataru Power Transmission added nearly 4 percent on September 30 after company bagged an order worth Rs 775 crore in T&D business from government and private clients.

We believe the valuation is reasonable and the company has the potential to offer higher returns to the investors over the next 12-18 months. We recommend investors with a long-term investment horizon to Subscribe to the issue.

Buzzing: Share price of cash strapped Cox & Kings was down close to 5 percent on Monday after the company signing Termsheet with Ebix Software India Private Limited. The signing will lead to it selling its Indian corporate travel business to Mercury Travel, EbixCash's corporate travel division.

The Rs 645-crore public offer of the Indian Railway Catering and Tourism Corporation (IRCTC) had been subscribed 33 percent a few hours after the IPO opened on September 30.

The initial public offering (IPO) had by mid-day received bids for 67.09 lakh equity shares against the offer size of 2.016 crore shares, data available on the National Stock Exchange shows.

We recommend a subscribe on Indian Railway Catering & Tourism Corporation Ltd (IRCTC) given 1) monopoly position in providing packaged drinking water, catering, online ticket booking services to passengers travelling by Indian Railways (IRs) 2) strong business visibility amid reintroduction of service charge (Rs15 per ticket for non-AC and Rs30 per ticket for AC from 01 Sep 2019) for online ticket booking and plans to double the number of Rail Neer plants to 20 by FY21E 3) debt free & cash rich BS (Rs11.4bn of cash as of FY19; ~23% of post money market cap) with healthy return ratios (RoE/RoCE of 26%/33% respectively as of FY19) and 4) healthy dividend pay-outs (~41% over the last 3 years).

Benchmark indices continue its down move with Nifty slipped below 11,400 on the back of selling seen in the bank, metal and pharma stocks.

The Sensex is down 372.56 points or 0.96% at 38450.01, and the Nifty down 108.00 points or 0.94% at 11404.40. About 561 shares have advanced, 1546 shares declined, and 118 shares are unchanged. 

We believe IRCTC IPO offer gives investor a unique opportunity to own leading Mini–Ratna (Cat-I) with dominant market share of 72% in Railway E-Ticketing bookings. On valuations parse at upper price band (Rs 320/-), the issue is asking for market cap Rs 5120 Cr with PE (FY19) 18.5 times, which seems to be fairly and reasonably valued. Hence considering strong cash generating business, high ROCE and healthy dividend yield, we recommend investors to “SUBSCRIBE” to the issue for long term basis as well as for listing gains.

Buzzing: Shares of Kajaria Ceramics added 3 percent on September 30 after company started commercial production of tiles at its manufacturing facility situated at Chittoor district.

Benchmark indices extended losses with the Sensex falling 346.41 points to 38,476.16 and the Nifty declining 99 points to 11,413.40.

About five shares declined for every two shares rising on the BSE.

"After the government measures to boost the economy and market sentiments, it's now RBI's turn to provide the needed support. We feel Nifty has potential to test 11,700-11,800 zone while 11,350-11,250 zone would act as cushion. Traders should continue with “buy on dips ” approach but do not get carried away as participation is still restricted largely to the quality names," Ajit Mishra Vice President, Research, Religare Broking said.

Prabhudas Lilladher recommends a subscribe on Indian Railway Catering & Tourism Corporation Ltd (IRCTC) given 1) monopoly position in providing packaged drinking water, catering, online ticket booking services to passengers travelling by Indian Railways (IRs) 2) strong business visibility amid re-introduction of service charge (Rs 15 per ticket for non-AC and Rs 30 per ticket for AC from 01 Sep 2019) for online ticket booking and plans to double the number of Rail Neer plants to 20 by FY21E 3) debt free & cash rich BS (Rs 1m140 crore of cash as of FY19; around 23 percent of post money market cap) with healthy return ratios (RoE/RoCE of 26 percent/33 percent respectively as of FY19) and 4) healthy dividend pay-outs (around 41 percent over the last 3 years).

Share price of Asian Paints traded lower by over by a percent after global research firm Morgan Stanley downgraded the stock from overweight to equalweight with target of Rs 1,820 per share.

According to the research firm, Asian Paints remains one of its favourite long-term plays and expects balanced risk reward at current market price.

Market Update: The benchmark indices extended the morning losses and Nifty slipped below 11,450 level.

The Sensex is down 256.96 points or 0.66% at 38565.61, and the Nifty down 74.20 points or 0.64% at 11438.20. About 492 shares have advanced, 1042 shares declined, and 84 shares are unchanged. 

Cipla hits 52-week low: Shares of Cipla touched 52-week low of Rs 425, falling 3 percent on September 30 after company received 12 observations for its Goa facility from United States Food and Drug Administration (USFDA).

Market Opens: It is a negative start for the Indian indices on the back of subdued global cues.

The Sensex is down 118.54 points or 0.31% at 38704.03, and the Nifty down 34.90 points or 0.30% at 11477.50. About 442 shares have advanced, 397 shares declined, and 57 shares are unchanged. 

Cipla, Yes Bank, Vedanta, JSW Steel and Tata Steel are the top losers on the Nifty.

Among sectors, buying seen in the IT and energy space, while auto, bank, metal, pharma are under some pressure.

Rupee Opens: The Indian rupee opened higher by 14 paise at 70.42 per dollar versus Friday's close 70.56.

Market at pre-open: Benchmark indices are trading flat in the pre-opening session on September 30.

At 09:04 hrs IST, the Sensex is down 25.18 points or 0.06% at 38797.39, and the Nifty down 9.40 points or 0.08% at 11503.

Crude Update: Oil prices edged higher on Monday, rebounding from a two-week low in the previous session, although gains were checked by concerns about the outlook for the global economy.

Asian shares trade mixed: Asian shares and the Chinese yuan were off to a cautious start on Monday as investors looked to how Chinese financial markets will react to the news the US administration is considering delisting Chinese companies from US stock exchanges.

Wall Street ends higher on Friday: US stocks fell on Friday after reports that the Trump administration was considering delisting Chinese companies from US stock exchanges, raising worries about a further escalation in the US-China trade war.

SGX Nifty: Trends on SGX Nifty indicate a flat opening for the broader indices in India, a fall of 6.50 points or 0.06 percent. Nifty futures were trading around 11,578.50-level on the Singaporean Exchange.