Indian equity benchmarks declined for the second time this week, mirroring the losses in global markets, as traders girded for a potential intercontinental ballistic missile launch by North Korea.
The S&P BSE Sensex declined 0.46 percent to 31,661 while the NSE Nifty 50 Index dropped 0.36 percent to 9,916. Twelve of the 19 sector gauges compiled by the BSE Ltd. declined led by the S&P BSE Healthcare Index’s 1.35 percent drop, the most in three weeks. On the flipside, the S&P BSE Metal Index gained 0.67 percent.
The country’s largest drugmaker Sun Pharmaceutical dropped 3.6 percent, the most in over a month, after brokerage house CLSA said the stock seems “expensive” considering the challenges it faces in the U.S.
ITC Ltd. was the second-biggest loser on the Sensex after the stock was downgraded by two brokerage houses. While Macquarie downgraded ITC to ‘Neutral’ from ‘Outperform’ and Jefferies also cut its rating on ITC to ‘Hold’ from ‘Buy’.
- SKF India: The Mumbai-based maker of ball bearings surged as much as 4.25 percent, the most since July 28, to Rs 1,590. Trading volume was 9.2 times its 20-day average.
- Leel Electricals: The Delhi-based commercial and residential building products maker rallied as much as 17.5 percent, the most in two years, to Rs 251.95. Trading volume was 16.9 times its 20-day average.
- Southern Petrochemicals: The Chennai-based fertiliser manufacturer rose as much as 17 percent to Rs 39.10. Trading volume was 23.8 times its 20-day average.
- Rico Auto Industries: The Gurugram-based auto component maker advanced 11.4 percent, the most since July 13, to Rs 89.40. Trading volume was 14.2 times its 20-day average.
The rupee fell to a three-week low of 64.26 against the U.S. dollar as outflows from Indian stocks accelerated.
Foreign investors sold net $132.2 million of local shares on September 4, after withdrawing $116.5 million on September 1. This follows outflow of $1.73 billion outflows in August, the highest since November, according to Bloomberg.
- Dixon Technologieas IPO subscribed 10 percent
Source: Exchanges
Shares of the local search engine rallied as much as 7 percent, the most in over a month, to Rs 403.90 a day after HDFC Mutual Fund bought stake in the company.
HDFC Mutual Fund bought 32.06 lakh shares (4.6 percent) of Just Dial at weighted average price of Rs 375.
Shares of the salt-to-hotel conglomerate fell as much as 1.93 percent, the most since August 8, to Rs 277.40 after a couple of brokerages downgraded the stock.
International brokerage firm Macquarie downgraded the stock to 'Neutral' from 'Outperform' and cut its target to Rs 304 from Rs 340. It expects cigarette volume to decline by 4 percent in FY18. It has also cut FY18-19 earnings estimate by 2-5 percent and recommends switching to Hindustan Unilever.
Another brokerage Jefferies has cut its rating on ITC to 'Hold' from 'Buy'. It said cigarette business remains impacted by regulatory pressures and other businesses will see gradual uptick in growth and profitability.
Shares of the micro-finance lender fell as much as 2.53 percent to Rs 900 after the Reserve Bank of India restricted foreign institutional investors from investing in the company.
RBI said foreign shareholding in the company through FIIs reached the trigger limit in Bharat Financial Inclusion.
Shares of the country's largest drugmaker fell as much as 3 percent, the most since August 18, 2017, to Rs 477.10 after brokerage house CLSA maintained its 'Sell' rating on the stock for target price of Rs 370.
The brokerage in a note said:
- EBIT margin ex-Taro of 5 percent despite Ranbaxy synergy is worrying
- Key products witnessing a declining sales trend except Absorica
- Limited support from specialty pipeline in the near term
- Trades at an expensive 25 times FY19 and 20 times FY20 earnings; does not capture concerns
#BQMoney | Rupee could depreciate to 64.40 against dollar, says Emkay Global's Viraj Desai.https://t.co/2uVBDNmM9W pic.twitter.com/xR97wiuUqm
— BloombergQuint (@BloombergQuint) September 6, 2017
- Nifty September Futures closed at a premium of 19.4 points versus 14.6 points
- Nifty September futures closed at 9971.6; open interest up 4 percent
- September series’ highest call base at 10000 (open interest at 41.7 lakh, down 7 percent)
- September series’ highest put base at 9700 (open interest at 46.3 lakh, up 4 percent)
- Call strikes 9900, 10000, 10,100 see unwinding of open interest
- Put strikes 9800, 9900, 10000 see open interest addition
JP Morgan On Kotak Mahindra Bank
- Upgrades stock rating to ‘Overweight’, raises target to Rs 1,100 from Rs 875
- Parent bank strongly positioned while the subsidiaries are in a sweet spot
- Stock has been upgraded as the bank is strongly positioned for growth
- Subsidiaries give investors a diversified exposure across high-growth segments
IDFC On Mahanagar Gas
- Upgrades rating stock to ‘Outperform’, raises target by 13 percent to Rs 1,220
- Estimate average growth of 4.7 percent in volumes over FY18-19
- Revise our earnings per share (EPS) estimates for FY18-19 higher on stronger margins across segments
- Q1FY18 margins not an aberration, expect FY18 to see sustained strength
CLSA On Sun Pharma
- Maintain ‘Sell’ for target of Rs 370
- EBIT margin ex-Taro of 5 percent despite Ranbaxy synergy is worrying
- Key products witnessing a declining sales trend except Absorica
- Limited support from specialty pipeline in the near term
- Trades at an expensive 25 times FY19 and 20 times FY20 earnings; does not capture concerns
CLSA On Reliance Industries
- Maintain ‘Buy’ for target of Rs 1,920
- A big cut in interconnect usage charge (IUC) will be a huge positive
- Positives from JioPhone are still under appreciated
- Strong downstream margins, capacity starts and other triggers reiterate ‘Buy’
CLSA On Astral Poly Technik
- Maintain ‘Buy’ for target of Rs 785
- Adhesives to drive incremental EPS growth, return on capital employed (RoCE) expansion
- Expect revenue to grow at compounded annual growth rate (CAGR) of 22 percent over FY17-20 in the adhesives business
- Adhesives is a high-RoCE business with 6-8 times asset turn
Citi On Bharat Electronics
- Maintains ‘Buy’, raises target to Rs 220 from Rs 213
- Management has guided for 12-15 percent growth during FY18 in annual report
- Management has also guided for 100-150 basis points EBITDA margin contraction in FY18
- See 14 percent EPS CAGR with return on equity (RoE) increasing from 18.2 percent to 20.6 percent over FY17-20
- BEL, NBCC and L&T are among Citi’s top India industrial picks
Morgan Stanley On Cement
- Demand recovery is underway and is geographically broad based
- Higher capacity utilization will drive expansion in EBITDA/tonne and ROE
- Shree Cement is our top pick while Dalmia Bharat is our preferred mid-cap play
Edelweiss On Divi's Laboratories
- Maintain ‘Reduce’ with a target of Rs 545
- Unit-II remediation is the top priority of the management
- Uphill task for Divi's going forward as Unit-I is also due for U.S. FDA inspection
- Resolution of import alert will take at least 2 years going by the past experience
Citi On Jindal Steel & Power
- Maintain ‘Buy’ for target Rs 200
- FY17 annual report focuses on cash generation and improving product profile
- FY17 cash generation was healthy and substantially more than profits
- FY17 debt reduced marginally despite ongoing capex
Deutsche Bank on Marico
- Management expects a near-normal 2QFY18, despite some impact of de-stocking in July
- Management guides for 8-10 percent volume growth for rest of FY18
- Urban consumption has recovered a tad, however, rural is still slow
- Bangladesh is back on track and it expects double-digit growth in FY18
- Worst appears over in Middle East and Egypt and expect growth to return in second half of the year
For a complete list of stocks to watch, click here
What Raghuram Rajan gave Urjit Patel the day he handed over the reins of the RBI.https://t.co/yIIH4gNrUk pic.twitter.com/6R85c78EdM
— BloombergQuint (@BloombergQuint) September 5, 2017
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
