Equity

Market snaps nine-day losing trend
(14-May-2019, 16:48 Hours IST)  

Domestic stocks ended with modest gains, snapping a nine-day losing streak. Volatility was high with the Sensex maintaining the psychological 37,000 level after falling below that level in intraday trade. Public sector banks advanced. Private sector banks were mixed.

The domestic indices opened lower and briefly bounced into positive terrain in early trade. Recovery was short lived as indices once again dipped into the red in morning trade. Indices turned range bound in mid-morning trade. Volatility was witnessed in early afternoon trade as indices trimmed losses after hitting fresh intraday low. Benchmarks bounced back into positive terrain in afternoon trade and hit fresh intraday high in mid-afternoon trade.

The barometer index, the S&P BSE Sensex, rose 227.71 points or 0.61% to 37,318.53. The index hit a high 37,572.70 and low of 36,956.10 in intraday trade.

The Nifty 50 index rose 73.85 points or 0.66% to 11,222.05. The index hit high of 11,294.75 and low of 11,108.30 in intraday trade.

Among secondary barometers, the BSE Mid-Cap index rose 0.62%. The BSE Small-Cap index rose 0.30%.

The market breadth, indicating the overall health of the market, was almost even. On BSE, 1220 shares rose and 1287 shares fell. A total of 134 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE Telecom index (up 2.81%), the S&P BSE Energy index (up 1.66%), the S&P BSE Capital Goods index (up 1.46%) outperformed the Sensex. The S&P BSE IT index (down 1.23%), the S&P BSE Teck index (down 0.76%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.12%) underperformed the Sensex.

Sun Pharmaceutical Industries (up 5.87%), Vedanta (up 4.08%), Reliance Industries (up 2.33%), Tata Motors (up 2.27%) and L&T (up 1.84%) edged higher from the Sensex pack.

TCS (down 1.72%), HCL Technologies (down 1.56%), Bajaj Finance (down 1.52%), Bajaj Auto (down 0.92%) and Infosys (down 0.86%) edged lower from the Sensex pack.

Drug major Lupin rose 0.61%. The company announced during trading hours today, 14 May 2019, that it has received the Establishment Inspection Report (EIR) from the United States Food and Drug Administration (USFDA) for the Post-marketing Adverse Drug Experience (PADE) inspection, indicating successful closure of the inspection. The inspection was conducted at Lupin's global pharmacovigilance group DSRM (Drug Safety & Risk Management) based out of Mumbai between 14 January 2019 and 18 January 2019. The inspection included a comprehensive scrutiny of practices and procedures for reporting of adverse events of Lupin's marketed products worldwide. The inspection closed with four observations.

Telecom major Bharti Airtel surged 5.4%. Media reports suggested that Bharti Airtel has scrapped its low-valued postpaid plans of less than Rs 499 across circles and halved the total number of its offers for this higher-paying user segment to four, to boost its revenue per user, lower costs, and improve profitability. Airtel has reportedly discontinued its Rs 299 and Rs 399 postpaid plans along with higher value plans of Rs 649, Rs 1,199 and Rs 2,999. It now offers just four postpaid plans (Rs 499, Rs 749, Rs 999 and Rs 1,599) that came into effect from 1 May 2019.

Public sector banks advanced. IDBI Bank (up 5.22%), UCO Bank (up 4.99%), Union Bank of India (up 4.21%), Punjab National Bank (up 3.7%), Allahabad Bank (up 2.64%), Bank of Baroda (up 3.5%), Bank of India (up 3.97%), Canara Bank (up 3.1%), State Bank of India (up 2.33%), Andhra Bank (up 0.2%) and Syndicate Bank (up 0.29%) edged higher.

United Bank of India rose 4.21%. The board of directors of United Bank of India considered and approved raising equity capital not exceeding Rs 1500 crore in one or more tranches during the financial year by way of Qualified Institutions Placement, Public Issue, Rights Issue or such other capital issues(s). The announcement was made after market hours yesterday, 13 May 2019.

Private sector banks were mixed. IndusInd Bank (up 2.58%), Federal Bank (up 2.18%), ICICI Bank (up 1.54%), Yes Bank (up 0.84%) and HDFC Bank (up 0.03%) edged higher. Axis Bank (down 0.12%), Kotak Mahindra Bank (down 0.45%), City Union Bank (down 0.15%) and RBL Bank (down 1.13%) edged lower.

Godrej Industries ended unchanged at Rs 450.85. The company's consolidated net profit surged 108.33% to Rs 297.41 crore on 40.32% rise in total income to Rs 3,444.36 crore in Q4 March 2019 over Q4 March 2018. The result was announced after market hours yesterday, 13 May 2019.

Engineers India rose 3.03%. The company has signed a contract with Mangol Refinery State Owned LLC for providing its PMC Services for Construction of a Crude Oil Refinery Plant in Mongolia. The announcement was made after market hours yesterday, 13 May 2019.

On the economic front, the annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 3.07% (provisional) in April 2019 (over April 2018) as compared to 3.18% (provisional) in the previous month and 3.62% during the corresponding month of the previous year, the Ministry of Commerce & Industry said in a release during trading hours today, 14 May 2019.

The all-India general Consumer Price Index (CPI) inflation rose to 2.92% in April 2019, compared with 2.86% in March 2019. The inflation based on CPI was 4.58% in April 2018. The Central Statistics Office (CSO) released the data after market hours yesterday, 13 May 2019.

Overseas, European stocks climbed on Tuesday after a downbeat session in Asia, as investors awaited a resolution to the US-China trade negotiations following the recent escalation in tensions. Asian shares declined Tuesday following a sharp fall in US stocks overnight as the trade war between China and the United States escalated.

China announced on Monday that it will raise tariffs on $60 billion worth of US goods, beginning on 1 June 2019. The goods targeted include a broad range of agricultural products. Last week, US President Donald Trump raised duties on $200 billion in Chinese goods to 25% from 10%.

US Trade Representative's office reportedly said it planned to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300 billion worth of imports from China.

In US, stocks closed sharply lower Monday, as investors weighed an escalating tariff fight that could pose risks to the US, Chinese and global economies.

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