Sensex, Nifty Fall For Second Day Dragged By Auto Stocks; FPIs Stay Net Buyers

India's stock benchmarks declined for second day, but were off day's low. Cement, Pharma stocks advanced while Auto and Banking stocks fell.

The Sensex lost 0.28% (168 points) to 59,028.91. The 30-stock gauge shed nearly 475 points to an intraday low of 58,722.89. The Nifty 50 declined 0.18% to 17,624.40. Today 26 stocks rose while 24 fell. Shree Cement, Ultratech Cement, Adani Ports, Coal India, Britannia Industries were among the top gainers while Tata Motors, Bajaj Auto, IndusInd Bank, M&M and Maruti Suzuki declined.

The broader indices outperformed their larger peers with MidCap index gaining 0.1% and SmallCap gauge jumping nearly 0.5%. Fourteen of the 19 sectoral indices compiled by BSE advanced with Basic Materials gaining 1%. On the flipside, Auto measure lost over 1%.

The market breadth is skewed in the favour of bulls. About 2,137 stocks rose, 1,318 declined and 125 remained unchanged.

Overseas investors remained net buyers for the second straight day on Wednesday.

The longest buying stretch by FPIs, this year so far, lasted 13 days from July 28 to August 17.

As per data from the National Stock Exchange, foreign portfolio investors net bought equities worth Rs 758.37 crore today.

Domestic institutional investors turned net sellers and sold equities worth Rs 138.67 crore today.

Institutions have net bought Rs 102.51 crore worth of equities this month so far and have net sold Rs 33,380.57 crore worth of Indian equities till date in 2022.

• Indian currency depreciated 10 paise to 79.94 during the session. The Rupee eased off those levels to close at 79.90.

Source: Bloomberg

For all the existing/old policies, the regulator has provided a timeline of 12 months

E-KYC is mandatory for all insurance policies from Nov 1, 2022

This will aid in dematerialisation of policies and in turn curb frauds

Source: Sources to BQ Prime

Cipla announced that it received final nod from U.S. FDA for is abbreviated new drug application for Lenalidomide capsule 5 mg, 10 mg, 15 mg, 25 mg.

The capsules are therapeutic equivalent generic version of Bristol Myers Squibb's Revlimid capsules.

The drug is used in the treatment of cancer. According to IQVIA, Revlimid capsules had U.S. sales of approximately $2.58 billion for the 12-month period ending June 2022.

Source: Exchange filing

European markets decline amid rising concerns over economic recovery, after China's exports grew 7.1% in August, but missed estimates.

Focus will shift to U.S. Federal Reserve's assessment of economy in its Biege Book scheduled to be released today.

Source: Bloomberg

Shares of Container Corp of India rose 9%, most in over three months.

• Trading volume is eight times the 30-day average. Share price crossed above the 50-day simple moving average, indicating potential upward price momentum.

• The rise comes amid report by ET NOW saying that the union cabinet approved rail land lease policy, cities sources that it didn't identify.

• The lease period will be for 35 years. The lease fees will be reduced to 1.5% of the value of the land, according to the report.

• Of the 34 analysts tracking the company, 27 maintain 'buy', five suggest 'hold' and two recommend 'sell'. The return potential of the stock is 5.2%.

Source: Bloomberg, ET NOW

• Bharti Airtel has 1.63 million shares change hands in another large trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

India's stock benchmarks declined, but are off day's low, dragged by losses in auto, banking, realty stocks.

The Sensex fell 0.23% (138) points to 59,058.91 and the Nifty50 declined by similar magnitude to 17,624.25. Today 22 of Nifty 50 stocks rose, 28 fell.

The broader indices outperformed their larger peers, with MidCap gauge rising 0.16% and SmallCap adding 0.6%. Ten of the 19 sectoral indices compiled by BSE advanced.

The market breadth is skewed in the favour of bulls. About 2054 stocks rose, 1252 fell and 169 remained unchanged.

Shares of Bajaj Auto fell nearly 3%, most in 10 weeks.

• Global brokerage CLSA has downgraded its rating on the stock to ‘outperform’ from ‘buy’ after the company reported decline in exports and only a small increase in total sales. The brokerage suggests lists post-festive season and rural recovery as key factors for Bajaj Auto's growth prospects.

• Trading volume is 2.5 times the 30-day average. Share price crossed below 100-day moving average. Of the 54 analysts tracking the company, 32 maintain 'buy', 15 suggest 'hold' and seven recommend 'sell'. The return potential of the stock is 8.7%.

Source: Bloomberg

• Shares of cement companies rose amid a fall in price of petcoke, a key input for cement firms.

• Elara Securities expects the companies to hike prices gradually as demand recovers while Dolat Capital believes that the worst is over for the sector, as input costs cool off.

• Shares of Shree Cement, ACC, HeidelbergCement India, JK Cement, JK Lakshmi and Ultratech gained.

Source: Bloomberg

Shares of Paras Defence & Space Technologies gained 4.6%, most in over a week.

• The company announced on Tuesday post market hours that it entered into an exclusive teaming agreement with ELDIS Pardubice, Czech Republic to provide turnkey anti-drone systems for civilian airports in India.

• Trading volume is nearly eight times the 30-day average. The stock has underperformed benchmarks falling 3.2% in 2022 so far compared to 2% gains for Sensex.

Source: Exchange filing, Bloomberg

Shares of Lupin rose most in over a week after the company signed an exclusive licensing and supply agreement with DKSH, to market five biosimilar candidates in the Philippines.

• Lupin's Philippines subsidiary, Multicare Pharma will file for marketing approval and be responsible for distribution and commercialisation of the biosimilars after approval.

• The biosimilars - Prolia, Xgeva, Simponi, Eylea and undisclosed biosimilars are used to treat disorders relating to bone disease, oncology, immunology and ophthalmology.

• Of the 42 analysts tracking the company, 11 maintain 'buy', 17 suggest 'hold' and 14 recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 1.5%.

Source: Exchange filing, Bloomberg

Shares of Hindustan Aeronautics Ltd. rose over 2.3%, most this week and on course for ninth day of gains while Bharat Electronics advanced 1.4%.

The rise comes after Morgan Stanley maintained 'overweight/in-line' and raised target price of both the stocks, citing possible benefits from rising defense indigenisation.

Morgan Stanley believes that local defense manufacturing is a powerful theme, much like PLI schemes, due to increased opportunities due to import bans. The order books of the two companies already provide multi-year revenue/earnings visibility, said the global brokerage firm and added that there was scope for increasing exports and diversifying revenue.

HAL's order book worth Rs 84,800 crore provided visibility for seven years. The ordering from under-development pipeline such as LCA MK2, AMCA, IMRH will add to ordering momentum, after three years, according to Morgan Stanley. The brokerage revised FY23-25E earning estimates by 1-4% and LT earnings CAGR (FY25-42E) to 13% from 12%.

Morgan Stanley raised FY23-25E earnings estimates by 16%. BEL's order book of Rs 59,400 crore provided growth visibility for three years. The company's products that have been added to indigenisation list could have Rs 1.9 lakh crore of prospects over five years.

Defence Ministry had approved the third positive indigenisation list (PIL) of 780 strategically important Line Replacement Units/Sub-Systems/Components with a timeline. Beyond the stipulated timelines, the LRUs/Components will only be procured from the domestic industry, according to PIB release on August 28.

The list is in continuation of two PILs approved earlier in December 2021 and March 2022. The three lists contain 2,500 items which are already indigenised and 458 items which will be indigenised within the threshold timelines.

The indigenisation of the items will be done through different routes under 'Make' Category, which focuses on enhancing self-reliance to bolster the economy and reduce import dependence of defence PSUs, according to Defence Ministry.

Source: Morgan Stanley note, PIB, Bloomberg

• Finance minister notes that the country will have to rely on coal over uncertainty in availability of crude and natural gas

• She added, "It will be an onerous challenge for India because of the size of its population"

• India in an advance stage to sign pacts with Singapore, UAE in cross border payments.

• Irrespective of the steps taken by US Fed or European bank may take, India is confident of handling economy without blips.

• ONDC will democratize digitization and revolutionizing India's retail and manufacturing sector

• FM: Inflation not a red lettered priority, it has cooled down

• Would like NIIF to be more robust

Source: India Ideas Summit– US-India Business Council

Shares of Zuari Industries rose over 4%, most in over a week, amid a decline in stock benchmarks.

• Trading volume is more than thrice the 30-day average.

• The rise in the fertilisers maker's stock comes after the company executed a MoU with Envien International Ltd., Malta and Zuari Envien Bioenergy to build and operate a biofuel distillery.

• The companies will further explore organic and inorganic business opportunities in biofuel space in India, Zuari Industries said an exchange filing.

• Zuari Industries and Envien International will establish 50:50 joint venture to design, construct, commission and operate a 150 kilo litres per day ethanol distillery. The ethanol produced would be sold to Oil Marketing Companies to meet blending requirements.

• The MoU is an extension of a previous agreement between Zuari and Envien Group's AZV. The earlier agreement pertained to set up sugarcane juice based 210 kilo litres per day ethanol plant.

• Zuari Industries aims to increase capacity of its molasses/sugarcane juice-based plant to 125 kilo litres per day from 100 kilo litres per day. The capacity hike is likely to be done in time for the upcoming sugar season.

Source: Exchange filing, Bloomberg

Shares of Bharti Airtel fell nearly 10%, most in two years, in the opening minutes of the session before paring most of the losses.

• The stock is among the laggards in Nifty 50 index.

• Bharti Airtel had 10.4 crore shares (aggregating to 1.9% equity) change hands in three large trades, according to Bloomberg data. Buyers, sellers are not known immediately.

• Of the 34 analysts tracking the company, 31 maintain 'buy', two suggest 'hold' and one recommends 'sell'. The return potential of the stock is 16.1%.

• Credit Suisse retained 'outperform' on the stock and kept target price unchanged at Rs 900 (implied return of 21.56%), on Monday while Prabhudas Lilladher initiated coverage with 'buy' and target price at Rs 1,032 (implied return: 39.38%).

Source: Bloomberg

India's stock benchmarks opened lower, dragged by broad based losses led by information technology, auto, banking stocks, amid a decline in global equities and slide in crude prices due to demand concerns.

The S&P BSE Sensex lost over 350 points (0.6%) to 58,840.98. The NSE Nifty 50 shed 0.51% to 17,566.25. Today 14 stocks rose, 35 fell and one remained unchanged. Bharti Airtel, ONGC, IndusInd Bank, Kotak Mahindra Bank, HDFC were among the laggards.

The broader indices outperformed their larger peers, with both S&P BSE SmallCap and MidCap measures little changed. Thirteen of the 19 sectoral indices compiled by BSE Ltd. declined with I.T. and Bankex gauges falling 0.7%.

The market breadth is skewed in the favour of bulls. About 1,522 stocks rose, 973 fell and 121 remained unchanged.

• Yield on the 10-year bond rose 2bps to 7.20%, at the open.

Source: Bloomberg

• Indian Rupee opens lower in-line with other Asian currencies amid a stronger U.S. dollar.

• Rupee depreciated 5 paise to 79.89, at the open.

Source: Bloomberg

• Wipro: The company has entered an expanded collaboration with Palo Alto Networks to deliver managed security and network transformation solutions like Secure Access Service Edge, cloud security and next-generation Security Operations Center solutions based on Zero Trust principles for global enterprises.

• Brightcom Group: The company has cancelled the definitive share purchase agreement that was entered in December 2021 with MediaMint. Both the companies have jointly decided to change their proposed transaction from acquisition to a possible strategic alliance and provide backend services to Brightcom’s future acquisitions.

• PTC India: The company clarified that media report regarding setting up a plant by PTC in Nepal is “incorrect”. No negotiations related to setting up of a plant in Nepal has taken place with any entity.

• InterGlobe Aviation: Petrus Elbers joins the company as Chief Executive Officer with effect from Sept. 6.

• Paras Defence & Space Technologies: The company has entered into an exclusive teaming agreement with ELDIS Pardubice, Czech Republic to provide turnkey anti-drone systems for civilian airports in India.

• Bajaj Finserv: Says Bajaj Allianz Life August total new business premium at Rs 669 crore.

• Syngene International: Biocon sells 21.8 million share in Syngene at Rs 560.04 per share.

• Zuari Industries: Signs accord with Envien for biofuel distillery, JV plans 1,50,000 litres per day ethanol distillery.

• U.S. Dollar Index at 110.46

• U.S. 10-year bond yield at 3.35% on Tuesday

• Brent crude down 0.5% to $92.32 per barrel

• Nymex crude at $86.37 per barrel

• SGX Nifty down 0.79% to 17,535 as of 6:05 a.m

• Bitcoin down 1.03% to $18,783.7