Market Correction Unlocks Long-Term Investment Opportunities
Oct 26, 2018 | 14:44 PM IST
Oct 26, 2018 | 14:44 PM IST
Our Analysis
Bear took control in D-street this week as both benchmark indices corrected 2-3% amid global sell-off & Q2 earnings disappointment. Market concerned over liquidity issues which led to a huge correction in financials. Lower than expected IT, Yes bank, auto companies numbers also hurt market sentiment. Exposure in IL&FS, liquidity issue remains intact. Fall in crude oil price which corrected almost 5% this week & appreciation in rupee may have eased some concerns though Fiscal deficit reached over 95%. Global sell-off may drag market much lower, so buying needs to be very specific. Infra. output, manufacturing PMI, monthly auto sales, Rupee movement, crude oil price, trade war progress, Q2 earnings will be an event to watch next week.
This Weeks Market Highlights:
Benchmark Indices:
1. The market started the week on a negative note due to last hour selling as Sensex fall 181 points while Nifty closed below 10,250.
2. On Tuesday benchmark indices closed at lowest levels in over 6-months as Sensex fall 287 points & Nifty below 10,150.
3. Baring realty index all sectoral indices closed in red led by IT, FMCG, pharma, PSU bank, fall 1-2%. The Nifty Midcap index closed 141 points lower.
4. On Wednesday equity indices snapped 4-day losing streak as Sensex rose 187 points while Nifty closed above 10,200 on oil relief.
5. Barring pharma, all the sectors ended in the green with infra, metals, financials & FMCG stocks ended higher. The nifty Midcap index closed 211 points higher.
6. On Thursday market resumed losses on global cues as Sensex dipped 344 points while Nifty closed below 10,150 dragged by banks & financials.
7. On Friday market opened sharply lower amid weak Asian cues.
Broader Index & Global Market:
- This week broader market underperformed the market as midcap & smallcap corrected over 5% this week compared to 3% correction in Nifty. On sectoral indices Nifty banking & financials, auto, FMCG, IT, metal, pharma & media indices corrected over 2-6% while realty & energy index remained flat.
- This week US market wiped out this years gain as concerns mount that corporate & economic growth are picking amid rising borrowing costs though it recovered from lows. European market also felt the pressure of sell-off in US equities. US market rout spread in the Asian market as well. Crude oil prices also corrected nearly 5% this week. So BoJ & BoE interest rate decision, US unemployment rate, US manufacturing PMI, crude oil price will an event to watch next week.
Movers & Shakers
Shares of M&M Financial Services surged nearly 15% this week after its reported more than two-fold jump in standalone net profit at Rs.381 crore for the 2nd quarter, helped by an increase in revenue from operation & other income. Its income increased by 39% to Rs.2,148 crore during the Q2 FY19, as against Rs.1,540 crore in the same period of the preceding fiscal.
Shares of Yes Bank dipped over 15% this week after its posted a decline in its net profit of Rs.964.70 crore in Q2FY19, which was down by 3.79% from Rs.1,002.73 crore in the corresponding period of previous year. With this Yes Bank missed analysts estimates, as a Bloomberg poll of experts predicted the bank would report a net profit of Rs.1,270 crore in Q2FY19.
Key Market Drivers
Indias fiscal deficit rose further in September, inching closer to the governments budgeted target for the financial year 2018-19. Fiscal deficit the gap between the governments revenue & expenditure stood at Rs.5.94 lakh crore at the end of September, according to the data released by the Controller General of Accounts. That's 95.3% of the budgeted estimate of Rs.6.24 lakh crore for 2018-19. The gap had stood at 91.3% in September last year.
Oil prices fall were heading for a third weekly loss, pulled down as Saudi Arabias OPEC governor said the market may become oversupplied soon and after a slump in global equities clouded the outlook for demand. The global benchmark Brent Crude Future is heading for a weekly loss of 4.2% while US crude benchmark is heading for a 3.4% loss this week. Saudi Arabia's OPEC governor said on Thursday the oil market could face oversupply in the fourth quarter.
Event Watch
Indias Infrastructure Output for Sept. (YoY) data will be on 31st October 2018. Nikkei Markit Manufacturing PMI (Oct.) data will be on 1st November.
Domestic Automobile Oct. monthly sales number will be on 1st Nov. 2018.
Q2 FY19 Result:- HDFC, Axis Bank, IOC, BPCL, HPCL, Tech Mahindra, L&T, Tata Motors, Hindalco, Lupin, Dabur, Colgate, Bank of Baroda.
Global:- US Manufacturing PMI (Oct.), Unemployment Rate; BoJ Interest Rate Decision; BoE Interest Rate Decision will be next week.
Stocks To Watch
Raymond Ltd. is on the upside while GMDC Ltd. is on the downside.
Share Market News 25-October-2018
Nifty Posts Worst F&O Expiry In Nearly Seven Years
The Benchmark indices started on a negative note, Sensex dropped 300 points lower & Nifty below 10,150. The equity market extended losses as Sensex was down 450 points while Nifty fall below 10,100. All sectoral indices traded in red led by banking & financials, auto, metal, pharma, realty, FMCG and media traded 1-3% Lower. Nifty midcap index underperformed the market, traded 1.5% lower.
In the afternoon session market was off days low as Sensex was down 250 points & Nifty hold 10,100. All sectoral indices traded in the red barring IT. Nifty Bank, Auto, Financial Service, FMCG, Metal & Realty indices were down 1-2%. Nifty Midcap index underperformed frontline indices, traded over 1% lower.
In the last hour of trade market remained lower as Sensex was down 300 points while Nifty above 10,100. The Market resumed decline to end October F&O expiry day on a lower note. Baring IT, all sectoral indices closed in red led by banking & financials, auto, realty, pharma, metal, media & FMCG, closed 1-2% lower. Nifty Midcap index outperformed the market, though closed 102 points lower. Sensex closed 343.87 points down at 33,690.09, Nifty down by 99.85 points at 10,124.90.
Top Gainers
Wipro by 3.03% to Rs.318.15, Coal India by 2.27% to Rs.283.55, HCL Tech by 2.27% to Rs.1,003, IOC by 1.53%to Rs.139.65, Kotak Mahindra Bank by 1.05% to Rs.1,189.50.
Top Losers
Bharti Airtel by -6.28% to Rs.296.00, IBULHSGFIN by -5.63% to Rs.692.00, UPL by -3.89% to Rs.598.55, VEDL by -3.47% to Rs.204.55, Hindalco by -3.05% to Rs.222.85.
Analysis Of Top Gainer And Loser
Wipro is the top gainer in today's market after posted Q2 revenue growth that beat analyst estimates. Revenue grew 1.37% on a YoY basis. In constant currency terms, revenue rose 1.6% on a sequential basis.
Bharti Airtel is the top loser in today's market after telecom subscription data for the month of August showed it adding the lowest number of subscribers. Bharti Airtel added 10 lakh subscribers compare to Reliance Jio added 1.2 crore subscribers.
Key Market News
The govt. expects some changes in the Reserve Bank of Indias prompt corrective action framework and is in talks with the central bank about it, according to a senior Finance Ministry official. Economic policy decisions need to be flexible and cant be so stringent that they cant be adjusted in times of crisis, the official told reporters. Eleven state-owned lenders are under the PCA framework that places restrictions on banks with weak financial and operational metrics. The government expects some of them to come out of it, the official said.
Bank credit growth rose to its highest in more than four years as strains in the domestic debt market pushed borrowers back towards the banking system. Bank credit rose 14.35% for the fortnight ending Oct. 12, 2018, data released by Reserve Bank of India showed. Credit growth stood at 12.51% in the previous fortnight. At over 14%, credit growth is now at its highest in over four years, according to Bloomberg data. Apart from increased credit demand due to the festive season and higher oil prices, banks stand to benefit from the turmoil in the debt market.
Stocks To Watch
SJVN Ltd. is on the upside while Dish TV Ltd. is on the downside.
SJVN is currently trading at Rs.28.80, up by Rs.3.25 or 12.72% from its previous closing of Rs.25.55 on the NSE. The scrip opened at Rs.25.30 & has touched a high & low of Rs.30.50 and Rs.25.30 respectively. So far 1,34,73,371 (NSE) shares were traded on the counter. The current market cap of the company is Rs.11,376.76 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.40.15 on 05-January-2018 & a 52 week low of Rs.24.75 on 19-October-2018.
Dish TV is currently trading at Rs.36.75, down by Rs.8.10 or 18.06% from its previous closing of Rs.44.85 on the NSE. The scrip opened at Rs.43.10 & has touched a high & low of Rs.45.90 and Rs.35.90 respectively. So far 2,96,37,816 (NSE) shares were traded on the counter. The current market cap of the company is Rs.6,840.26 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.86.90 on 09-January-2018 & a 52 week low of Rs.35.90 on 25-October-2018.
Share Market News 24-October-2018
Oil Relief Helps Market Snap 4-Day Losing Streak, Sensex Reclaims 34000.
The Benchmark indices opened on a strong note, Sensex surged 400 points & Nifty above 10,250. The equity market was off days high as Sensex was up 100 points while Nifty below 10,200. Nifty banking & financials, realty & OMCs stocks higher while Nifty auto, pharma, IT & media stocks capped gains. The Nifty midcap index was also off days high, traded flat to marginally higher.
In the afternoon session market continued to trade higher as Sensex was up 200 points while Nifty traded above 10,200. Baring media & pharma all sectoral indices traded in green led by banking & financials, realty, IT, FMCG & metal. Nifty Midcap index outperformed frontline indices, traded 1% higher.
In the last hour of trade market remained higher Sensex was up 140 points while Nifty above 10,200. Market snapped 4-day losing streak as rupee traded 30 paise higher. Barring pharma, all the sectors ended in the green with infra, metals, financials & FMCG stocks ended at the highest point of the day. Nifty Midcap index outperformed the market, closed 211 points higher. Sensex closed 186.73 points up at 34,033.96, Nifty up by 77.95 points at 10,224.75.
Top Gainers
Bajaj Finance by 11.97% to Rs.2,332.70, Airtel by 8.97% to Rs.311.55, HPCL by 6.08% to Rs.231.15, IOC by 5.77%to Rs.137.50, Hindalco by 5.01% to Rs.230.50.
Top Losers
Bajaj Auto by -4.54% to Rs.2,469, Yes Bank by -4.15% to Rs.204.35, Dr. Reddy by -2.17% to Rs.2,420, Grasim by -2.12% to Rs.808.40, Adani Ports by -1.82% to Rs.313.20.
Analysis Of Top Gainer And Loser
Bajaj Finance is the top gainer in today's market as investors cheered strong quarterly result after companys standalone profit grew 55% on year to Rs.920 crore. Profit in the corresponding period last fiscal stood at Rs.594 crore.
Bajaj Auto is the top loser in today's market after its revenue and margins missed Bloomberg consensus estimates in the June-September quarter. Margins at 16.8% versus 19.7%; Estimate of 17.4%.
Key Market News
Oil prices on Tuesday extended falls from the previous day when crude slumped as much as 5% after Saudi Arabia said it would make up for supply disruptions from US sanctions targeting Iran's petroleum exports from next month. Front-month Brent crude oil futures were at $76.37 a barrel at 0031 GMT, 7 cents below their last close. Saudi Energy Minister Khalid al-Falih said at an investment conference in Riyadh on Tuesday that despite expected supply disruptions from US sanctions against Iran that kick in from November 4, Saudi Arabia would step up to "meet any demand that materializes to ensure customers are satisfied."
India's gross domestic product (GDP) could be in the range of 7-7.5% by FY20, while inflation may be at 5% according to Ajit Ranade President & Chief Economist, Aditya Birla Group. Ranade expects crude oil prices to inch up to $90-95 a barrel in the near term, widening the current account deficit. Higher oil prices are not good for India as we have to import oil at higher prices, Ranade said at a two-day Morning Investment Conference 2018 held in Mumbai on October 23. He expects CAD to breach 3% of GDP, from 2.7% now.
Stocks To Watch
Can Fin Homes Ltd. is on the upside while Cadila Healthcare Ltd. is on the downside.
CanFin Homes is currently trading at Rs.249.35, up by Rs.27.10 or 12.19% from its previous closing of Rs.222.25 on the NSE. The scrip opened at Rs.226.70 & has touched a high & low of Rs.253.30 and Rs.226.70 respectively. So far 55,08,544 (NSE) shares were traded on the counter. The current market cap of the company is Rs.3,331.52 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.557.50 on 15-March-2018 & a 52 week low of Rs.216.50 on 23-October-2018.
Cadila is currently trading at Rs.357.45, down by Rs.20.05 or 5.31% from its previous closing of Rs.377.50 on the NSE. The scrip opened at Rs.377.75 & has touched a high & low of Rs.380.90 and Rs.352.15 respectively. So far 27,48,450 (NSE) shares were traded on the counter. The current market cap of the company is Rs.36,690.93 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.515.00 on 02-November-2017 & a 52 week low of Rs.332.75 on 20-July-2018.
Share Market News 23-October-2018
Sensex, Nifty End At Over 6-Month Low Dragged By IT, Pharma Stocks
The Benchmark indices slipped in early trade as Sensex drops 250 points & Nifty slipped near 10,150. The equity market was off day's low as Sensex was down 130 points while Nifty below 10,200. All sectoral indices traded under selling pressure led by IT, pharma, PSU bank which corrected over 1%. The broader market also traded lower as the midcap index was down 100 points.
In the afternoon session market fall further as Sensex dipped 250 points while Nifty below 10,150. All sectoral indices traded in red, most cut was seen in banks, auto, FMCG, IT, pharma, metal & media, corrected 1-3%. The nifty Midcap index continued to underperform frontline indices, traded over 1.5% lower.
In the last hour of trade, bear took control in D-street as Sensex fall 350 points & Nifty near 10,100. Market close lowest levels in over 6-months. Baring realty index all sectoral indices closed in red led by IT, FMCG, pharma, PSU bank, fall 1-2%. Nifty Midcap index corrected in line with the market, closed 141 points lower. Sensex closed 287.15 points down at 33,847.23, Nifty down by 98.45 points at 10,146.80.
Top Gainers
Sun Pharma by -4.95% to Rs.576.85, Asian Paint by -4.83% to Rs.1,142.45, Wipro by -4.30% to Rs.308.35, Ultratech Cement by -3.41% to Rs.3,345.30, Grasim by -3.23% to Rs.829.70.
Top Losers
Sun Pharma by -4.95% to Rs.576.85, Asian Paint by -4.83% to Rs.1,142.45, Wipro by -4.30% to Rs.308.35, Ultratech Cement by -3.41% to Rs.3,345.30, Grasim by -3.23% to Rs.829.70.
Analysis Of Top Gainer And Loser
HindPetro is the top gainer in today's market after fall in crude prices, which slipped to around $79/barrel is likely to have impacted the movement.
Sun Pharma is the top loser in today's market as some sort of selling pressure was seen in the stock.
Key Market News
Moody's Investors Service said the profitability of Indian banks is "distinctively weak" compared to those in BRICS nations, but it will improve from next fiscal as asset quality stabilizes. On capitalization, Moody's said it is the "weakest" for Indian banks with a tangible common equity ratio of 8.7% at the end of 2017. "System-wide asset quality in India is weak due to stressed public sector banks, which dominate the sector. Government capital infusions will boost weak public sector banks capital ratios," it said. "The system as a whole is unprofitable due to high credit costs at dominant state-owned (Indian) banks," Moody's said, adding the profitability is "distinctively weak" for Indian banks than others in the five-nation BRICS bloc.
Chinese imports of grains such as sorghum plunged in September from the year before, customs data showed on Tuesday, hit by escalating trade tensions with the United States and high prices elsewhere. Imports of sorghum, largely used in China to feed the country's massive livestock herd, fell 76.9% from the same month last year to 90,000 tonnes, according to the data, dragged down by Chinese tariffs on cargoes of the commodity from the key supplier the United States.
Stocks To Watch
TVS Motor Company Ltd. is on the upside while Bhansali Engineering Polymers Ltd. is on the downside.
TVS Motor is currently trading at Rs.539.90, up by Rs.23.60 or 4.57% from its previous closing of Rs.516.30 on the NSE. The scrip opened at Rs.512.00 & has touched a high & low of Rs.540.00 and Rs.497.00 respectively. So far 64,97,120 (NSE) shares were traded on the counter. The current market cap of the company is Rs.25,467.04 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.794.45 on 02-January-2018 & a 52 week low of Rs.478.70 on 08-October-2018.
BEPL is currently trading at Rs.91.50, down by Rs.9.30 or 9.23% from its previous closing of Rs.100.80 on the NSE. The scrip opened at Rs.85.00 & has touched a high & low of Rs.95.35 and Rs.85.00 respectively. So far 45,20,504 (NSE) shares were traded on the counter. The current market cap of the company is Rs.1,480.71 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.224.50 on 10-April-2018 & a 52 week low of Rs.85.00 on 23-October-2018.
Share Market News 22-October-2018
Midcap Crack Drags Market, Sensex Sheds 180 points, Nifty Leaves 10250
The Benchmark indices started the week on a good note as Sensex rose 340 points & Nifty reclaimed 10,400. The equity market was off day's high as Sensex was up 100 points while Nifty hold 10,300. Nifty banking & financials, pharma & FMCG stocks rallied while IT, media, realty & metal stocks traded lower. Nifty Midcap index underperformed frontline indices, traded 0.70% lower.
In the afternoon session market remained positive as Sensex was up 120 points while Nifty above 10,350. Selling is visible among energy & IT names while banking & financials, auto, pharma & FMCG stocks traded higher along with broader markets. The Nifty Midcap was down one-third of a percent.
In the last hour of trade market turned negative as Sensex falls 30 points while Nifty fall below 10,300. Weakness in last hour dragged market lower. Financials gave up all of their gains & were a lag on the benchmarks. Along with them, energy, IT & metal were the big losers while auto & financials closed marginally higher. The Nifty Midcap index underperformed the market, closed 207 points lower. Sensex closed 181.25 points down at 34,134.38, Nifty down by 58.30 points at 10,245.25.
Top Gainers
IBULHSGFIN by 8.93% to Rs.712.20, ICICI Bank by 4.04% to Rs.328.20, Eicher Motors by 4.03% to Rs.22,497, NTPC by 2.20%to Rs.165.00, Bajaj Auto by 1.74% to Rs.2,554.
Top Losers
IndusInd Bank by -6.96% to Rs.1,467, BPCL by -4.51% to Rs.270.75, Ultratech Cement by -3.95% to Rs.3,467, Reliance by -3.46% to Rs.1,063.20, Asian Paints by -3.12% to Rs.1,196.90.
Analysis Of Top Gainer And Loser
Indiabulls Housing Finance is the top gainer in today's market, post the announcement of plans to sell all or part of its 18.7% stake in U.K.-based OakNorth Holdings.
IndusInd Bank is the top loser in today's market as strong selling was seen in the stock after the bank posted weakest quarterly growth since March 2018.
Key Market News
The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who said the US-China trade war & tightening financial conditions would trigger the next downturn. At the start of 2018, optimism about a robust global economic outlook was almost unanimous among respondents. But Reuters polls of more than 500 economists taken this month showed a downgrade to the outlook for 18 of 44 economies polled, with 23 unchanged. Only three were marginally upgraded. "There has been an abrupt 'stop' of capital flows to EM over recent months, which has created painful consequences for EM with large external deficits," said Adam Slater, a lead economist at Oxford Economics.
International Energy Agency chief Fatih Birol said on Monday he is not worried Saudi Arabia will cut oil supply in response to any potential sanctions over the killing of journalist Jamal Khashoggi but urged common sense as political developments may impact energy markets. He said he did not think that Saudi Arabia would cut production, but he has "significant worries" about the market because of falling supply from Venezuela and Iran amid strong demand growth.
Stocks To Watch
Indiabulls Housing Finance Ltd. is on the upside while Infibeam Avenues Ltd. is on the downside
IBULHSGFIN is currently trading at Rs.712.20, up by Rs.58.40 or 8.93% from its previous closing of Rs.653.80 on the NSE. The scrip opened at Rs.663.00 & has touched a high & low of Rs.738.80 and Rs.663.00 respectively. So far 2,77,10,575 (NSE) shares were traded on the counter. The current market cap of the company is Rs.30,485.27 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.1,440 on 29-January-2018 & a 52 week low of Rs.639.05 on 19-October-2018.
Infibeam is currently trading at Rs.38.35, down by Rs.14.75 or 27.78% from its previous closing of Rs.53.10 on the NSE. The scrip opened at Rs.53.55 & has touched a high & low of Rs.53.60 and Rs.38.00 respectively. So far 5,05,42,170 (NSE) shares were traded on the counter. The current market cap of the company is Rs.2,580.60 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.242.70 on 18-September-2018 & a 52 week low of Rs.38.00 on 22-October-2018.
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