Tuesday, 29 May 2018

Sensex, Nifty consolidate after 3-day rally weaker rupee lifts IT stocks

Most Asian markets traded lower as investors focus on Italian politics and the fall in oil prices.
Buzzing: After being locked in lower circuit on Monday, shares of Manpasand Beverages continued to be locked in the same band today as well, as investors continued to be wary of corporate developments. This is despite the company trying to allay fears around the controversy surrounding its auditor, Deloitte, resigning abruptly.
The shares have lost 40 percent in this week based on two developments—resignation of its auditor and Board meeting on May 30 being cancelled.
On Monday evening, the company issued a statement to the exchanges, assuring investors that the situation involving Deloitte was ‘unfortunate’ but the decision was taken keeping in mind shareholders’ interest.
“Everything related to financial results announcement and the timing of this event is purely coincidental and has no direct correlation. The board meeting has been postponed and the new date will be announced shortly,” the company said in a filing to the exchanges. “This is just a minor hiccup and doesn't represent any long term business impact.”
The company on Monday had informed the NSE that a Board meeting, scheduled on May 30, 2018, which was supposed to consider results as well as dividend issue, was cancelled.
What could have added to the downfall is the company informing BSE on Sunday that its auditor Deloitte Haskins and Sells had resigned from the firm with immediate effect. It subsequently appointed M/s Mehra Goel and Co as the auditor of the firm.
Market Update: The market consolidates after sharp rally in previous three consecutive sessions, as investors monitor the movement in rupee and crude oil prices.
The broader markets also traded in line with frontliners while all sectoral indices are in the red barring IT and Auto.
Technology stocks are on buyers' radar after the rupee falls 28 paise to 67.70 against the US dollar.
The 30-share BSE Sensex rose 6.16 points to 35,171.64 and the 50-share NSE Nifty gained 1.80 points at 10,690.50.
Buzzing: Rural Electrification Corporation (REC) share price declined 2 percent after it reported a 37 percent decrease YOY in its March quarter net profit at Rs 834.79 crore, missing estimates due to an increase in provisions for bad loans.
A Reuters poll of equity analysts had estimated profits to fall marginally to Rs 1224.3 crore in the fourth quarter of FY18.
The company had posted profit of Rs 1319.2 crore in the fourth quarter of last fiscal.
Interest income saw a 5 percent drop YoY in Q4 to Rs 5,444.59 crore. Other income dropped to Rs 33.03 crore in Q4 from Rs 131.70 crore in the year ago period.
Earnings Reaction: Aurobindo Pharma share price fell 4 percent after it reported a marginal decline in its net profit at Rs 528.5 crore for the fourth quarter ended March 2018. The company had posted a net profit of Rs 532.5 crore during the same period of 2016-17 fiscal.
Revenue from operations, however, rose to Rs 4,049.1 crore for the fourth quarter, as compared with Rs 3,641.6 crore in the similar period of 2016-17 fiscal, Aurobindo Pharma said in a regulatory filing.
Market Opening: Benchmark indices opened mildly lower on Tuesday morning due to profit booking after three-day run up. 
The 30-share BSE Sensex fell 56.44 points to 35,109.04 and the 50-share NSE Nifty declined 21.90 points to 10,666.80.
L&T, Tech Mahindra, TCS, Infosys, HCL Technologies, M&M, Bajaj Finance and Coal India are gainers.
Bank of India and Aurobindo Pharma plunged 5 percent each.
Vedanta, Sun Pharma, Lupin and SBI are under pressure.
Nifty Bank lost 130 points and Nifty Midcap shed 65 points.
Manpasand Beverages slipped 20 percent for second consecutive session.
Venus Remedies, DB Realty, Kwality, Gravita, Mercator and Fortis Healthcare fell up to 7 percent.
Oil India, NMDC, Bajaj Hindusthan, Dhampur Sugar, Dwarikesh Sugar, Reliance Communications and Edelweiss Financial gained 2-5 percent.
Earnings: State-owned United Bank of India reported a net loss of Rs 260.62 crore for the fourth quarter ended March 2018 due to high non-performing assets (NPAs). The Kolkata-headquartered bank had reported a profit of Rs 73.56 crore in the January-March quarter of 2016-17.
The bank's total income was Rs 2,635.69 crore in the fourth quarter of the last fiscal, a marginal decline from Rs 2,672.88 crore in the similar quarter in the year-ago period, it said in a regulatory filing.
The gross NPAs of the bank stood at 24.1 percent of the assets at end-March 2018, up from 15.53 percent at end-March 2017.
Similarly, the net NPA jumped to 16.49 percent of loans compared to 10.02 percent at the end of March 2017, reports PTI.
Board Meet: Lenders of bankruptcy-hit Ruchi Soya are likely to meet again on May 30 to discuss bids submitted by Patanjali Ayurveda and Adani group which are in the race to acquire the Indore-based edible oil firm. A Committee of Creditors (CoC) today met to discuss the bids of these two companies.
Patanjali had revised its bids upwards to about Rs 4,300 crore, which is around 30 per cent higher than the Adani's offer. Patanjali has also assured the lenders that it would invest extra capital required to revive the company.
Sources said that the CoC is likely to meet on May 30 to consider both the bids and decide on voting.
Haridwar-based Patanjali group had emerged as the front runner with a bid of over Rs 4,000 crore to acquire Ruchi Soya.
Oil Price Hike: Petrol and diesel prices continue to soar and touched another peak on Monday. Petrol was hiked by 16 paise to Rs 86.24 per litre in Mumbai.
This is the 16th straight hike in a row. Diesel prices on the other hand, were hiked by 15 paise to Rs 73.79 per litre in Mumbai. Petrol prices in Delhi were increased by 16 paise to Rs 78.43 per litre and diesel by 14 paise to Rs 69.31 per litre.
Since the dynamic pricing system resumed on May 14, petrol and diesel prices have risen by Rs 3.8 and Rs 3.38 respectively in the last 16 days in Delhi.
Market OutlookICICI Securities
The short covering journey continued for a third day in a row with banking stocks taking the lead and helping broader indices to end with gains of over 80 points. As global crude oil prices started cooling off, oil marketing companies rose nearly 5 percent. Implied volatilities (IVs) also remained choppy due to which OTM writers got an added advantage. Nifty futures settled at an increased discount of 9 points with sharp decline in IVs. The highest Put base is still at the 10500 strike with 62 lakh shares while the highest Call base is at 10800 strike with 50 lakh shares.
The 1000 point rally in the past three days continued as the outperformance of banking stocks continued on Dalal Street. HDFC Bank, along with the PSU pack, lifted the index well above 26500. Looking at the Put option writing, we feel the support has shifted to 26200. The overall rally is likely to continue.
Market Pre-Opening: Benchmark indices are flat in pre-opening amid weak trade in most Asian markets. Investors focus on the movement of crude oil prices and rupee.
The 30-share BSE Sensex rose 15.87 points to 35,181.35 and the 50-share NSE Nifty gained 8.10 points at 10,696.80.
Vedanta plunged 10 percent. Aurobindo Pharma declined 1.6 percent.
L&T rallied 4 percent.
The Indian rupee opened at 67.62 against the US dollar, down 19 paise from previous close.
Most Asian markets traded lower as investors focus on Italian politics and the fall in oil prices.
Wall Street remain closed on account of a public Holiday on Monday.
This Content has been taken from https://www.moneycontrol.com/news/business/markets/market-live-sensex-nifty-consolidate-after-3-day-rally-weaker-rupee-lifts-it-stocks-2577607.html

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