Sensex plunges 769 points; PSU banks, metal worst hit

03 Sep 2019

Market Close: Indian indices remained under pressure throughout the day and the final hour selling has dragged the benchmark indices to the day's low level with Nifty finished below 10,800 level.

At close, the Sensex was down 769.88 points or 2.06% at 36,562.91, while Nifty was down 225.40 points or 2.04% at 10,797.90. About 805 shares have advanced, 1596 shares declined, and 173 shares are unchanged.

UltraTech Cement, Titan Company, ICICI Bank, IOC and Tata Steel were the top losers on the Nifty, while gainers were Tech Mahindra, BPCL, Britannia Industries and HCL Technologies.

All the sectoral indices ended lower led by the PSU Bank, metal, energy, infra, pharma, FMCG, auto and IT.

Market Update:

Benchmark indices extended the morning fall and trading at day's low level with Nifty inching towards 10,800 level.

The Sensex is down 704.92 points or 1.89% at 36627.87, while Nifty is down 207.80 points or 1.89% at 10815.50. About 763 shares have advanced, 1509 shares declined, and 150 shares are unchanged.

IOC, ICICI Bank, Vedanta, Tata Steel and UltraTech Cement are the top losers on the Nifty.

Buzzing: Shares of Reliance Naval and Engineering shed 4 percent on September 3 after its subsidiary company admitted for a corporate insolvency resolution process.

Fire at ONGC plant:

ONGC fire hits supplies of PNG & CNG in Mumbai, quoting Agencies, reported CNBC-TV18.

Mahanagar Gas said the gas supply to city gate station, Wadala is badly affected and advised customers to switch to alternate fuel till restoration.

Tata Motors shed 4% on poor August sales nos:

Share price of Tata Motors shed 4 percent on September after company's total sales for August 2019 stood at 32,343 vehicles, compared to 62,688 units during August 2018. Its total domestic auto sales reduced 49 percent to 29,140 units from 57,210 units, YoY.

Buzzing: Shares of Hero MotoCorp gained on September 3 after company sold 543,406 units of motorcycles and scooters in the month of August 2019, a growth of nearly 1.5 percent over the previous month (July 2019) sells of 5,35,810 units of two-wheelers.

Maruti Suzuki shares dip on weak August sales:

The company in the month of August 2019 sold 1,06,413 units, down 32.7 percent against 1,58,189 units in August 2018.

The company has cut production by 33.9 percent as it produced 1.11 lakh cars in August 2019 versus 1.68 lakh cars in August 2018.

Rupee near day's low: After a weak start the Indian rupee slipped further and trading near day's low level at 72.19 per dollar, down 79 paise from previous close.

Vikas Jain, Senior Research Analyst, Reliance Securities on PSU Bank Index:

PSU bank index corrected by 3 percent in opening trade on Tuesday as the broader markets were weak and due to the announcement of merger of 10 psb's into 4 anchor banks. While the development is positive but it will take long time for the better economics of scale to materialize and will face intial profitability pain.

Merger ratio would be key to watch going forward which is yet to be announced and therefore investors are moving out of the PSU Bank counters.

Reliance Power in partnership with Japanese firm:

Reliance Power signed a partnership agreement with JERA for jointly setting up 750 MW gas based combined cycle power project (Phase—1) at Meghnaghat, Bangladesh.

Reliance Power will hold 51 percent stake while JERA will hold 49 percent stake in the joint venture company.

Market Update:

Benchmark indices are trading near day's low level with Nifty below 11,000, while Sensex slipped over 400 points.

The Sensex is down 419.48 points at 36,913.31, while Nifty is down 124.40 points at 10,898.90. About 733 shares have advanced, 1079 shares declined, and 114 shares are unchanged.

L&T Construction bags order for Navi Mumbai International Airport

Infrastructure major L&T on Tuesday said its construction arm has bagged the contract for construction of the Navi Mumbai International Airport. The company did not provide value of the contracts but said the orders fall under "major" category which ranges between Rs 5,000 crore and Rs 7,000 crore as per its classification of contracts.

"The transportation infrastructure and buildings and factories businesses of L&T Construction have secured a prestigious project from the Navi Mumbai International Airport Private Ltd (NMIAPL) for the engineering, procurement and construction of the greenfield Navi Mumbai International Airport at Navi Mumbai," L&T said in a regulatory filing.

MOIL share price slipped 4 percent on September 3 after company reduced price of ferro grade, SMGR (Mn30% & Mn25%), fines and chemical grades of ore by about 5 percent.

Zydus to launch novel biologic for rabies:

Zydus has received marketing authorization for TwinrabTM (RabiMabs) from the Drug Controller General of India.

The novel biologic which will be marketed under the brand name, TwinrabTM, is indicated in combination with rabies vaccine for rabies post-exposure prophylaxis.

The United States Food and Drug Administration (USFDA) has granted an orphan drug status to this candidate.

Market Opens: It is weak start for the Indian indices on September 2 with Nifty slipped below 10,950 level

The Sensex is down 279.58 points at 37,053.21, while Nifty is down 92.20 points at 10,931.10. About 267 shares have advanced, 523 shares declined, and 57 shares are unchanged.

CG Power, Power Grid, KNR Construction, Dilip Buildcon, Syndicate Bank, Tech Mahindra, HCL Tech Hero MotoCorp, are among major gainers on the indices in the early trade, while losers are IOC, Maruti Suzuki, Bajaj Auto, Axis Bank, HDFC, Eicher Motors, OBC, Canara Bank, HDIL, Biocon and L&T.

Among sectors, except IT all other indices are trading in the red.

Rupee Opens: The Indian rupee slipped in the early trade on Tuesday. It has opened lower by 55 paise at 71.95 per dollar on Tuesday versus Friday's close 71.40.

CLSA on PSB Merger

Consolidation a long-term plus but near-term risk

PSB merger announced could be the finale of PSU bank mergers

SBI & private banks will be better placed to gain market share

Mergers are based on geographic presence & tech platform

With fewer PSU banks, it may be easier to find quality leaders

Near-term growth may suffer as banks focus on completing mergers

Citi on PSB Merger

PSU bank consolidation should strengthen the system

Consolidation to make capital & talent management easier

Upgrade BoB to buy from neutral

Common tech platform the single biggest deciding factor in determining mergers

Linking compensation to mkt & making it performance based bigger requirement

Morgan Stanley on PSB merger

PSU Bank consolidation a good long-term move, but could weigh on near-term growth

Stay underweight on PNB/Canara post-merger announcement on likely delay in PPoP recovery

Reduce earnings/target across PSU banks as we factor in higher credit cost/dilution

Nomura on auto sales

Industry volumes down sharply with PVs down 33% YoY

M&HCVs likely down 49% YoY in August

2-wheeler industries volumes should be likely down 20% YoY

Maintain reduce on Eicher & TVS

M&M only buy-rated stock among OEMs due to attractive valuation

Morgan Stanley on autos

Any cut in GST rate will have a direct impact on end-consumer prices

If GST were cut to 26%, don't expect much of an impact on end demand

If GST were cut to 24%, this would likely help demand

Maruti & Ashok Leyland, both rated overweight are our preferred names

Hero Moto could be a key beneficiary as it has a large BS IV inventory

Tata Motors & Bajaj Auto could lag the sector if there were a GST cut linked stock rally

Deutsche Bank on GDP

Revise FY20 full-year GDP growth estimate to 6.3% from 7.0%

Expect RBI to cut repo rate by 25 bps in Oct policy Vs expectation of 15 bps earlier

See terminal repo rate falling to 4.75% against our earlier forecast of 5%

Kotak Institutional Equities on GDP

Further revise down FY2020 GDP growth estimates by 50 bps To 5.8%

Expect MPC to have space to cut rates by up to 75 bps through rest of FY20

Cut of around 40 bps likely in October MPC meeting itself

HSBC on GDP

At 6-year low, Q1 GDP came in slower-than-expected

Lower-than-expected GDP mainly led by sharp fall in manufacturing & consumption

Growth is likely to revive in H2FY20, due to low base & some sequential uptick

Expect RBI to cut rates by 50 bps over Q4 & Q1FY21, taking repo rate to 4.9%

Nomura on GDP

Lower 2019 GDP growth projection to 5.7% YoY (Vs 6.2% earlier)

FY20 GDP growth forecast cut to 6% Vs 6.5%

Expect RBI to deliver a cumulative 40 bps in additional easing

Philip Capital on GDP

Cut FY20 GDP growth estimate to 6%; FY21 GDP estimate stands at 6.2-6.7%

In case of no recovery in H2, GDP will likely fall in range of 5.5-6%

Global slowdown remains an added risk to earnings growth of 15-25% for FY20-21

Have a reasonable room for downward revision

JP Morgan on GDP

India’s slowdown worsened with Q1 GDP growth at 5-year Low

Private consumption fell sharply for both cyclical & structural reasons

Export & imports growth have also declined

Expect 25 bps cut at October monetary policy review

Motilal Oswal on GDP

Revise real GVA/GDP forecast for FY20 from 6.3%/6.5% earlier to 5.9%/6.1%

Another rate cut by RBI (probably by 40 bps) is very likely

Global stocks were hit by US-China trade frictions on Tuesday while the British pound flirted with 2 1/2-year lows as Prime Minister Boris Johnson indicated he could call an election to stymie lawmakers’ efforts to avert a no-deal Brexit, said Reuters

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.2% in early trade while Japan’s Nikkei was flat, it added.

Wall Street ends higher on Friday: Wall Street ended the week with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of US tariffs on Chinese imports were due to be levied.

Crude Update: Oil prices fell on Tuesday, declining for a second day as more signs emerged of the toll from the US-China trade war, with South Korea revising down second-quarter growth due to lower exports.

SGX Nifty: Trends on SGX Nifty indicate a flat opening for the broader indices in India, a fall of 3 points or 0.03 percent. Nifty futures were trading around 10,938.50-level on the Singaporean Exchange.