Sensex snaps 3-day winning streak, Nifty below 11,450; SBI falls 7%

The Indian rupee ended at 71.03 against the US dollar, down 2 paise compared to Tuesday's close of 71.01 a dollar.

"Technically, today's pattern indicates a negative reversal, post recent sharp upmove. There is a possibility of some more weakness in the coming sessions and a crucial lower supports of previous downside gap of 23rd Sept around 11,380-11,350 could come under pressure," Nagaraj Shetti, Technical Research Analyst at  HDFC Securities said.

We remain cautious on the markets as it is hovering around its peak levels and some consolidation can be expected in the near term. From medium to long-term perspective, outcome of RBI monetary policy and revival in corporate earnings will be crucial, as it is likely to dictate further market trend. On the global front, geo-political developments between US-Iran would be on investor’s radar, as well as any further escalation of US-China trade war would have an adverse impact on overall markets and economy. Thus, under uncertain market conditions, traders & investors should be selective in stock picking.

Market close: BSE Sensex snapped three day winning streak and ended 1.2 percent lower on September 25, while Nifty finished below 11,450 level.

At close, the Sensex was down 503.62 points at 38593.52, while Nifty was down 148.00 points at 11,440.20. About 761 shares have advanced, 1733 shares declined, and 124 shares are unchanged. 

SBI, Tata Motors, Maruti Suzuki, M&M and Eicher Motors were among major losers on the Nifty, while gainers were Power Grid, TCS, NTPC, IOC and BPCL.

Among sectors, except energy and IT all other indices ended lower led by the banks, auto, metal, pharma, infra and FMCG. BSE Midcap and Smallcap ended with 1.5 percent cut.

Gold Update: Gold prices inched lower on Wednesday as some investors booked profit, but the metal remained supported below a three-week peak hit in the prior session as the launch of a formal impeachment inquiry into President Donald Trump stoked political worries.

"We cut earnings estimate for FY20/21 by 6/4 percent led by lower “other operating income” as the company will not receive the milk subsidy anymore. Free cashflow (FCFF) at Rs 55 crore was led by higher profit, lower loans and advances to milk suppliers. We believe Parag is on track to achieve Rs 2,700-3,000 crore in sales by CY20 with an EBITDA margin of 11-12 percent, as it is improving its product mix; however, it is capable of generating FCFF only when it is not expanding its production capacity (like in FY19) or by reducing advances to its milk suppliers (FY16 and FY19)," said Elara which reiterated buy rating, with a lower target of Rs 310 (from Rs 321) on 15x FY21E exit P/E.

Acuité Ratings believes that there is still a significant scope to limit India’s fiscal deficit to 3.5-3.6 percent if the government gives high priority to disinvestment and there is a sustainable revival in consumption and market sentiments, expected to be brought in by the sharp cut in corporate taxes, over the next two quarters going up to 10 percent.

The rating agency said it has been consistently reiterating the need for fiscal measures in the context of strong headwinds in both the domestic and the global economy. However, it believes that the fiscal position can be significantly better than what the fiscal mathematics suggests if there is a focus on augmenting non-tax revenues.

Benchmark indices extended losses in afternoon amid political uncertainty in US after impeachment inquiry over Donald Trump and worries over growth concerns.

The fresh scam of lending problem in PMC Bank also dented market sentiment and investors also worried about revival of auto demand.

The BSE Sensex was down 507.83 points or 1.30 percent at 38,589.31 and the Nifty50 fell 149.50 points or 1.29 percent to 11,438.70. More than two shares declined for every share rising on the BSE.

Buzzing: Shares of IDBI Bank surged 10 percent on BSE on September 25 and looked on course to extend their winning run into the fourth consecutive session. The scrip is trading in the green amid reports that the bank is selling its loans.

Buzzing: Shares of Dewan Housing Finance Corporation (DHFL) jumped nearly 9 percent on September 25 ahead of the company's meeting with its lenders.

Market Update: The benchmark indices are trading lower but off day's low with Nifty below 11,500.

The Sensex is down 386.35 points or 0.99% at 38710.79, and the Nifty down 114.80 points or 0.99% at 11473.40. About 713 shares have advanced, 1403 shares declined, and 98 shares are unchanged. 

Rupee update: The Indian rupee is trading marginally lower at 71.04 per dollar versus previous close 71.01.

Buzzing: Varun Beverages was trading lower by over 3 percent on September 25 despite global research firm CLSA maintaining its buy call on the stock and raising the target to Rs 860 from Rs 783 per share.

Gold Update: Gold prices inched lower on Wednesday as some investors booked profit, but the metal remained supported below a three-week peak hit in the prior session as the launch of a formal impeachment inquiry into President Donald Trump stoked political worries.

Marketwide rollovers were near 51.01 percent on September 24 against 3-month average of 51.66 percent while Nifty rollovers were at 38.29 percent against the 3-month average of 38.51 percent.

Highest rollover was seen in Berger Paints, Piramal Enterprises, Bata India, UPL and CESC while rollover activity was relatively low in HCL Technology, ONGC, Vedanta, Coal India and Voltas. (Source: ICICI direct).

Shares of Maruti Suzuki slipped more than 2 percent intraday on September 25 after the company decided to reduce the price of select models. In order to share the benefits of corporate tax reduction with its customers, the company has decided to reduce the price of select models by Rs 5,000/- (on ex-showroom price).

The popular models include all variants of Alto 800, Alto K10, Swift Diesel, Celerio, Baleno Diesel, Ignis, Dzire Diesel, Tour S Diesel, Vitara Brezza and S-Cross.

Share price of PSU bank major State Bank of India fell close to 3 percent intraday on Wednesday after Morgan Stanley downgraded the stock to equal-weight from overweight with target at Rs 330 per share.

The brokerage firm has however raised FY21 & F22 EPS estimates by 5 percent each, adding that tax rate cut outweighs lower margins. The firm believes that upside appears limited given uncertainty on asset quality and net interest margins.

Buzzing: Share price of Aster DM Healthcare added 5 percent on September 25 after company signed lease agreements for the two new hospital projects in Bengaluru.

Market Opens: It is a negative start for the Indian indices on the back of weak global cues with Nifty below 11,550.

At 09:18 hrs IST, the Sensex is down 221.88 points or 0.57% at 38875.26, and the Nifty down 67.00 points or 0.58% at 11521.20. About 318 shares have advanced, 457 shares declined, and 28 shares are unchanged. 

Zee Ent, SpiceJet, Power Grid, Marico, Titan, TCS are among major gainers on the Indices, while losers are HDFC, Axis Bank, Britannia, Bajaj Finance, UPL and AU Small Bank, HDIL, Bank of Baroda and Yes Bank.

Among sectors, except IT all other indices are trading in the red. Midcap and smallcap indices are also trading with marginal loss.

Rupee Opens: The Indian rupee opened lower at 71.07 per dollar on Wednesday versus previous close 71.01.

Market at pre-open: Benchmark indices are trading mixed in the pre-opening session on September 25. 

At 09:02 hrs IST, the Sensex is up 14.27 points or 0.04% at 39111.41, and the Nifty down 22.20 points or 0.19% at 11566.00.

Asian shares edge lower: Asian stocks fell on Wednesday after the US lawmakers called for an impeachment inquiry into President Donald Trump, increasing the prospects of prolonged political uncertainty in the world’s largest economy.

Downgrade to equal-weight from overweight, target at Rs 330 per share

Raise FY21 & F22 EPS estimates 5% each

Tax rate cut outweighs lower margin

Upside appears limited given uncertainty on asset quality & NIM

Morgan Stanley on HDFC Bank 

Overweight rating, target at Rs 1,700 per share

See big upside, despite recent performance

Multiples have upside, given RoE improvement

Technology is helping reduce incremental cost of service near zero

Strong revenue growth to drive core PPoP at 20% for multiple years

Underweight call, target at Rs 326 per share

Believe share price will fall relative to index over next 30 days

Competitive intensity in 2-wheeler industry remains very high 

See further threats from the higher cost increase 

Risk reward looks unattractive

Electrification Is also a key long term threat to its scooter franchise

HSBC on Titan 

Upgrade to buy, target raised to Rs 1,450 from Rs 1,200 per share

View co as a long-term structural winner

Well positioned to monetise ongoing shift from unorganised to organised jewellery 

Market share gains driven by strategy of capturing adornment & wedding segments 

Valuation appealing post recent price fall

Neutral call, target at Rs 375 per share

Extension is negative for minority shareholders due to the prolonged uncertainty

Would have preferred a timely conclusion of the deal in one go

There is a risk of further invocation of pledges

Fall in stock price & uncertainty casts a shadow on value of 2nd stake sale

Barring the recent ad slowdown, the business fundamentals remain on track

Investors are worried that an extension is an indicator of lack of buying interest

Valuations remain attractive

Expect multiples to be suppressed until timely resolution of promoter issues

Maintain buy, target raised to Rs 860 from Rs 783 per share

Consolidation phase over; balance sheet parameters to improve

Expect focus to shift on share gains

See RoE improving to 20% by CY21

Raise earnings by 9-14% to factor in a strong Q2 & reduced corporate tax rates

Colgate, Nestle & Page Industries have savings which are 2.5-3.0% of their net sales

Tax cuts are not a solution for the current consumption slowdown

At the margin, the slowdown could get worse in H2FY20

Government could slow down expenditure to make up for Rs 1.45 lakh crore of rev foregone 

Base case is that consumer companies will retain the windfall gain 

Most cos get a 10-15% increase in earnings

Dabur, Marico, GCPL, Emami & Titan Are exceptions as they have exemptions

Prefer Domestic Cyclicals Over Defensives

Value over quality & momentum, and midcaps over large caps

Market move post the tax cuts is logical & not overdone

Midcap stocks in focus list are Indian Hotels, Jubilant Food, M&M Fin

Midcap stocks in focus list are MCX, Shriram Transport, Oberoi Realty

Midcap stocks in focus list are Ashok Leyland, Gujarat Gas, CONCOR

SGX Nifty: Trends on SGX Nifty indicate a negative opening for the broader indices in India, a fall of 44.50 points or 0.38 percent. Nifty futures were trading around 11,587.50-level on the Singaporean Exchange.

Wall Street drops: US stocks fell in volatile trade on Tuesday, giving the S&P 500 its biggest daily drop in a month as a push for the impeachment of US President Donald Trump gained momentum among Democrats in the US Congress.