Market LIVE: Sensex dives over 300 points; Nifty below 11,250 mark; Reliance Industries shares tank 3%

Share Market Today, Share Market LiveNifty PSU Bank index was the top sectoral gainer, up over 1 per cent

Share Market News Today | Sensex, Nifty, Share Prices LIVE: Domestic equity market benchmarks BSE Sensex and Nifty 50 turned negative in Wednesday’s volatile trade. The 30-share index Sensex was down 100 points or 0.27 per cent to trade at 38,388, while the broader Nifty50 breached 11,300 on the downside and slipped 15 points or 0.13 per cent. Among top Sensex losers were Nestle India, HCL Tech, Reliance Industries (RIL), M&M, Infosys and  Maruti Suzuki. While the gainers were IndusInd Bank, Tata Steel, UltraTech Cement, Sun Pharma, State Bank of India (SBI) and ICICI Bank. Most of the sectoral indices were trading in green. Nifty Metal, Nifty Pharma and Nifty PSU Bank were the top sectoral gainers. In overnight trade on Wall Street, US indices ended lower, as investors anticipated the US Federal Reserve’s wrap-up of its two-day policy meeting. The Dow Jones Industrial Average fell 0.77%, the S&P 500 lost 0.65% and the Nasdaq Composite dropped 1.27%.

Mindspace Business Park REIT IPO has been subscribed 3.17 time so far. Today is the last day of bidding for the real estate investment trust, the second to enter Indian stock markets after Embassy Office Parks last year. Bids for 21.46 crore units have been received so far out of 6.77 crore units that are on offer.

The coronavirus pandemic is going to hit financial institutions hard; and it is a reality which has not escaped even the least concerned. In Asia-pacific countries the disruptions caused by coronavirus have outlined structural challenges in such a manner that profitability will deteriorate in the coming years along with asset quality deterioration. Two of the premier rating agencies globally — Moody’s and S&P Global — have in just as many days raised red flags on how the financial institutions might suffer in resurfacing after being bullied down by the waves of the pandemic. For India the challenges could be tougher than other Asian peers.

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The Nifty PSU Bank index was up 2.7% on Wednesday backed up Maharashta Bank’s 8% surge, followed by Central Bank, UCO Bank, J&K Bank. All contituents were in the green.

“Moratorium loan book decline in line with peers now stands at 16%, Bank took total COVID led provision worth of Rs.1203cr, which is 0.6%. NPA sequentially decline from 0.91% to 0.86% due to an increase in the provision coverage ratio. Bank also announced that it will raise Rs3,288 crore through a preferential issue of shares to its promoter Hinduja group and other institutional investors. We expect capital raising will help the bank to improve capital adequacy ratio (CAR) and maintaining a higher CAR in uncertain times is positive. IndusInd bank trades at 1x BV of Q1FY21, which is much lower than the historical average. We believe the improvement in valuation will depend on RoE improvement.” said Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking

Nestle India share price fell 3 per cent after rising half a per cent in Wednesday’s volatile trade after the FMCG major’s muted performance in April-June quarter. Nestle India said it has witnessed a sharp decline in out-of-home consumption due to the lockdown. The company also admitted that in the past three months Nestle India experienced volatility, uncertainty and stresses that it had never imagined before, which led to disruptions across the value chain of the company. “Q2 performance was subdued with 2% sales growth, 4% below our expectations. EBITDA and PAT grew 4% and 11%, driven by cost savings and lower tax outgo. Domestic sales grew 3%, while exports and other operating income declined 9% and 50%, respectively,” Emkay Global Financial Services said in its report.

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Raymond Ltd., one of the world’s biggest producers of worsted wool fabric used to make quality suits, is cutting costs by more than a third as people shelter at home from the coronavirus outbreak. The Mumbai-based company is reducing jobs, rents, and marketing costs to decrease expenses by as much as 35% for the financial year started April 1, Chairman Gautam Hari Singhania said in a virtual interview last week

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Farm equipment manufacturer Escorts Ltd. might have witnessed de-growth in revenue in the April-June quarter but with rural demand gaining pace, brokerage firms are still bullish on the stock. Escorts management said that the company reached 95% of capacity in June 2020, after operations were hot in April due to the complete lockdown. With the recent surge in supplies, Escorts has said that capacity will be restored to full potential in the month of August. The stock is currently trading, up by 2% at Rs 1,184 per share, taking the stock 7% higher so far this week.

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Gold prices edged higher for the ninth consecutive day and made a fresh high of Rs 52,750 per 10 grams on Wednesday, following the upward trend in the global market. Yesterday, Goldman Sachs raised its 12-month gold price forecast to $2,300 per troy ounce (toz), on the back of expectations of more downside in US real interest rates and a favourable environment for the safe-haven metal, according to Reuters. Gold August futures opened flat in today’s session as investors were tracking Federal Reserve’s policy outcome later in the day today.

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Systematic investing through SIP in mutual funds has become a buzz word for many savers – however, keeping the discipline of regular investments especially during a crisis requires a certain level of tenacity. Investors often encounter the ‘urge to sell’ at the first sign of trouble. This is more behavioural than analytical. The irrationality in the decisional making arises due to some inherent biases – which cognitive psychologists have studied in detail.

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Today’s FOMC policy result will remain a watchful event for dollar in determining its further course which is on a declining trend so far. With interest rates already at zero and the Fed pumping trillion dollars into the economy, policymakers are expected to maintain its dovish stance and could reiterate that interest rates are unlikely to rise until the economy shows signs of concrete improvement. Rupee has remained well insulated from the volatility so far as RBI has been active in curbing the same. Hence, bounce back in the dollar index or further decline of the same shall not affect rupee dramatically as the pair only strengthen nearly by half a percent against 4% fall in the dollar. Since rupee’s strength had little to do with the dollar weakness, it is likely that the pair could remain resilient compared to other majors and EM currencies. Overall, rupee’s tendency to bounce back from 74.50 is likely to take the pair near 75.10-75.50 levels in days to come: Amit Pabari, managing director, CR Forex Advisors

The Rupee continues to remain in the 74.50-75.00 band. Nationalized banks continue to buy US Dollars aggressively on dips. The Dollar has been weakening against majors but the overall Asian and EM basket has not appreciated to the same extent against the USD. USDCNH continues to hover around the 7 handle. That could possibly explain why the central bank has not relented on USD purchases. Asian currencies with the exception of IDR are stronger against the USD. Rupee is likely to open around 74.80 and trade 74.60-75 range intraday with sideways price action. Today is the exchange-traded currency derivative expiry for July. We may see some selling on RBI fix on account of the same: Abhishek Goenka, Founder and CEO, IFA Global

Ahead of the FOMC policy today, the Fed has extended its emergency lending programs by three months to the end of 2020. This further stoked USD weakness. Record negative US real rates is pushing commodities and equities higher as it makes holding the US Dollar expensive. The US Dollar is unloved against pretty much everything at this point. The Fed is likely to continue to underscore the importance of keeping the monetary policy accommodative to facilitate economic recovery. Specific statements on its tolerance for inflation overshoot and yield curve control where it would target specific points on the yield curve would be closely followed: Abhishek Goenka, Founder and CEO, IFA Global

The Nifty is keeping afloat above the 11300 level which is a healthy sign! We should be projecting a target of 11450-11500 as the next level of resistance. Every dip is an opportunity to buy. 11100 is a good support for this market so traders can keep a closing below this level as a stop for their long positions: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

Mindspace Business Parks REIT initial public offering (IPO) enters its third and final day today after being subscribed 1.23 times by investors so far. The Rs 4,500 crore IPO of the real estate investment trust has managed to attract bids for 8,34,33,000 units against the 6,77,46,400 units on offer. The IPO includes fresh issuance worth Rs 1,000 crore and an offer for sale worth Rs 3,500 crore. Although there are short-term hiccups, analysts say that the Mindspace Business Parks REIT offers long-term value for investors.

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IndusInd Bank, UltraTech Cement, ICICI Bank, Sun Pharma, Axis Bank and Titan Company. On the contrary, Infosys was the top Sensex laggard. HCL Tech, TCS, Kotak Mahindra Bank, Nestle India, M&M and HDFC Bank were among other losers on the pack.

The 30-share index Sensex was up 88 points or 0.23 per cent to trade at 38,580.62, while the broader Nifty 50 index topped 11,300 level to rule at 11,333, up 32 points or 0.29 per cent.

400%+ seven-year rally may slow; downgrade from ‘buy’ to O-PF. We raise our target price for Reliance Industries (Reliance) from Rs 1,753.38 to Rs 2,250 as we factor in a street-high valuation for Reliance Jio (Jio) ($100 billion+) and Reliance Retail (Retail) ($70 billion+). However, this implies only 4% upside after its 400%+ rally the past seven years and 150%+ the past four months: CLSA

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Benefitting from upcycle in tractor, Escorts reported Ebitda of Rs 1.2 billion, 19% below our estimates due to weaker performance of non-tractor segments. We believe tractor industry demand should be at the forefront of recovery given record rabi output supported by higher crop prices and adequate water reservoir levels once the supply chain normalises. Maintain ‘buy’ with an unchanged Fair Value of Rs 1,300: Kotak Institutional Equities

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A total of 180 companies including Bharti Airtel, Maruti Suzuki, InterGlobe Aviation, TVS Motor Company and Dr Reddy’s Laboratories are scheduled to announce their quarterly earnings later in the day today.