Sensex ends 155 points lower at 38,667 amid sell-off in banking shares

Closing bell

The equity benchmark Sensex fell over 155 points on Monday to close at 38,667.33 due to a massive sell-off in banking stocks as investors turned cautious on the financial services space.

The NSE gauge Nifty shed 35 points to close below the psychologically key 11,500-mark.

Starting the session marginally higher, the 30-scrip Sensex soon came under robust selling pressure and fell as many as 472 points in intra-day trade. It swung between a high of 38,873.12 and a low of 38,401.09, before finally closing at 38,667.33, showing a decline of 155.24 points or 0.40 per cent.

The NSE’s 50-share Nifty closed at 11,477.45, falling 35 points or 0.31 per cent.

On the Sensex chart, YES Bank was the biggest loser with an over 15 per cent drop. Other major losers were IndusInd Bank, SBI, ICICI Bank, Sun Pharma, HDFC and Axis Bank, losing up to 6.84 per cent.

In contrast, Bharti Airtel was the top gainer, spurting 5.29 per cent.

IT stocks HCL Tech, TCS and Infosys also finished in the green.

In the broader market, the BSE Smallcap Index was the worst hit with a drop of 1.17 per cent, followed by the mid-cap gauge, which fell 1.12 per cent. The BSE largecap too under-performed the benchmark, sliding 0.42 per cent.

Sectorally, bankex suffered the most by dropping 2.62 per cent, followed by finance 2.44 per cent and realty 1.63 per cent.

On the other hand, telecom was among the top sectoral gainers, rising 4.60 per cent. The IT index rose 2.62 per cent.

Of the 19 sectoral gauges compiled by the BSE, 13 closed in the red and six ended higher.

Recent government measures to prop up the slowing economy could not cheer the markets and investors are keenly awaiting the RBI monetary policy for further cues, analysts said.

Besides, earnings announcements for the quarter ended September are scheduled to begin next week, which will also decide the market course going ahead, they added.

Analysts also attributed the sluggishness in equities to subdued global cues.

Asian stocks ended mixed as investors continued to watch developments on the US-China trade front. Reports said the White House was considering curbs on US investments in China.

The rupee was trading 17 paise lower (intra-day) at 70.75 against the US dollar. - PTI

European shares flat amid intensifying trade tensions

The pan-European STOXX 600 index was up 0.1 per cent.

European shares were little changed on Monday as investors shrugged off fresh concerns about US-China trade negotiations and looming US tariffs on European imports.

A report on Friday said that the US might limit Chinese company listings on its stock exchanges, fuelling more US-China trade angst ahead of critical negotiations next week.

Trade-sensitive technology shares were down 0.2 per cent, after earlier leading declines on the pan-European STOXX 600 index. Click here to read in full the European markets report.

Sensex, Nifty spurt up near close

The benchmark indices, the Sensex and Nifty narrowed their losses in late session on Monday.

Ahead of the close, the Sensex was trading at 38,659, down 162 points or 0.42 per cent lower, while the Nifty was at 11,471, down 41 points or 0.36 per cent lower.

The top gainers on the Sensex were Bharti Airtel, HCL Tech, Infosys, ITC and TCS, while the laggards were YES Bank, IndusInd Bank, ICICI Bank, Sun Pharma and SBI.

Among the sectoral indices, the top gainers were telecom (up 2.87 per cent), IT (2.24 per cent), amd energy (1.23 per cent), while the banking and finance sectors dropped 2.58 per cent and 2.30 per cent respectively, followed by healthcare (down 1.61 per cent) and consumer durables (1.36 per cent).

Why has Lakshmi Vilas Bank fallen by more than 50 per cent over the past year?

For south-based private sector lender, Lakshmi Vilas Bank , funding chunky corporate assets has led to sharp rise in bad loans and provisioning over the past two years, eating into its earnings and capital. The RBI recently put the bank under Prompt Corrective Action (PCA) on account of high net non-performing assets (NPAs), insufficient capital, negative return on assets (RoA) for two consecutive years and high leverage. This was based on the RBI’s Risk-Based Supervision carried out for the year ended March 31, 2019. Click here to read in full the report on why LVB has fallen more than 50 per cent over the past year .

HDIL buildings.

Debt-ridden Housing Development & Infrastructure Ltd (HDIL) plunged to a record as regulators examined the scale of the real estate developers borrowings from a lender that was sanctioned by the Reserve Bank of India (RBI).

HDILs shares, which have plummeted 85 per cent this year, dropped 4.8 per cent at 10:53 a.m. in Mumbai. The RBI, last week, had curbed deposit withdrawals from Punjab & Maharashtra Co-operative Bank Ltd (PMC) for six months. They cited major financial irregularities, failure of internal controls, and wrong and under-reporting of exposures. Click here to read in full the report on HDIL share price movement .

Nifty call: Sell on rallies with stop-loss at 11,560

The Nifty 50 index opened lower today and continues to witness selling pressure. It is currently trading down by 1 per cent. The Sensex, too, is trading on a weak note, having declined 0.9 per cent so far.

The Asian markets are giving out mixed cues, with the Nikkei losing 0.5 per cent, and the Hang Seng up by 1.7 per cent. Click here to read in full the Nifty call report .

Reliance Capital to exit lending business, says Anil Ambani in AGM

Reliance Capital Chairman Anil Ambani on Monday said the company will no longer be in the lending business and its subsidiaries Reliance General Insurance and Reliance Nippon Life Insurance will be the creators of long term shareholder value. Click here to read in full the report on Reliance Capital to exit lending business .

Will October usher in softer auto fuel prices?

The impact of the recent drone attacks on Saudi Arabia’s oil processing facilities was not only seen in global energy prices, but on the pockets of consumers back home. The only difference being that while globally prices have returned to previous levels, here they continue to pinch the retail consumers’ household budget. Click here to read in full the report on whether auto fuel prices will soften in October .

YES Bank gets RBI approval to raise capital, but scrip down 12 per cent

YES Bank on Monday said it has received a go-ahead from the Reserve Bank of India for its capital raising plans.

"The bank is pleased to inform you that it has received acknowledgement from the Reserve Bank of India to go ahead with the proposed increase in its authorised share capital," it said in a regulatory filing.

It will now seek the shareholders' consent and proceed with its capital raise. Click here to read in full the report on YES Bank gets RBI nod for capital raising plans .

Dollar supported as fears of ramp up in Sino-US trade war ease

Dollar finds cautious support in quiet trade. File Photo

The dollar was supported on Monday in cautious trade as worries of an immediate widening of the Sino-US trade war eased and markets awaited the latest Chinese manufacturing data for a glimpse into the health of the world's second-largest economy.

The greenback was steady against most major currencies, rising marginally against the Japanese yen to buy 107.94 yen, flat against the euro and slightly weaker on British pound, to trade at $1.0936 per euro and $1.2292 per pound. The New Zealand dollar was knocked by diving business confidence, while its Australian counterpart drifted lower as dovish expectations build ahead of a central bank meeting on Tuesday. Click here to read in full the global forex markets report .

Oil prices climb as positive China factory data eases demand concerns

Brent crude futures rose 9 cents to $62 a barrel. File Photo

Oil prices edged up on Monday after China's factories unexpectedly ramped up production in September, easing concerns about demand at the world's largest crude importer amid an ongoing trade war with the United States.

Brent crude futures rose 9 cents to $62 a barrel by 0300 GMT while US West Texas Intermediate (WTI) crude futures rose 13 cents to $56.04 a barrel. Click here to read in full the global oil markets report .

Sensex, Nifty down over 0.80 per cent

The Sensex and Nifty extended their losses to over 0.80 per cent by mid-morning on Monday.

The Sensex was down 333 points or 0.85 per cent at 38,494, while the Nifty dropped 95 points or 0.83 per cent at 11,416.

According to a Reuters report, the benchmark indices were dragged down by declines across banking and metals shares, and amid a lack of further catalysts.

The NSE index had firmed more than 2 per cent last week after the government slashed corporate taxes in a bid to boost slowing economic growth.

Shares in Lakshmi Vilas Bank Ltd fell 4.9 per cent to their lowest since April 2009 on news that the Reserve Bank of India had initiated a so-called prompt corrective action on the lender.

The bank's directors are also being investigated by the police after a customer accused them of misappropriating funds.

Indiabulls Housing Finance, which had proposed to merge with Lakshmi Vilas Bank, slumped 21 per cent, its biggest one-day drop in over one year. Monday is the stock's second day of trading after it was removed from the NSE index.

The wider Nifty private banks index lost 1.9 per cent.

Shares in private-sector lender YES Bank fell 9.7 per cent. The bank said it had received approval from the RBI to increase its authorised share capital in order to raise funds.

The market was being indecisive due to a lack of significant catalysts or drivers, said Kunj Bansal, chief investment officer at Acepro Advisors in Mumbai. “One of the factors which will help the market break out of its current range will be the earnings season.”

Earnings announcements for the quarter ended September are scheduled to begin from next week.

The Nifty metals index fell 2.5 per cent. Tata Steel Ltd and Vedanta Ltd lost 3 per cent each, while JSW Steel was down 4 per cent, the report said (with inputs from Reuters). 

Rupee slips 7 paise to 70.63 vs dollar in early trade

The rupee opened on a cautious note and fell 7 paise to 70.63 against the US dollar in early trade on Monday, tracking a weak opening in domestic equities and foreign fund outflows.

Forex traders said increasing demand for the US dollar vis-a-vis other currencies overseas and rising crude oil prices weighed on the domestic unit.

At the interbank foreign exchange market, the rupee opened on a strong note at 70.37, then lost momentum and fell to 70.63 against the US dollar, showing a decline of 7 paise over its previous closing.

The rupee on Friday had closed at 70.56 against the US dollar. - PTI

Asian shares, yuan off to calm start; focus on China

Asian shares and the Chinese yuan were off to a cautious start on Monday as investors looked to how Chinese financial markets will react to the news the US administration is considering delisting Chinese companies from US stock exchanges. Click here to read in full the Asian markets report .

Sensex, Nifty extend losses

The Sensex and Nifty extended their losses in early trade after opening the week in the red.

The 30-share benchmark was quoting at 38,540, down 282 points or 0.73 per cent lower, while the Nifty was down 90 points or 0.79 per cent at 11,421.

According to an agency report, the Sensex plunged over 310 points in opening trade on Monday due to sell-offs mainly in financial, metal and auto stocks amid subdued global cues.

Likewise, the NSE gauge Nifty too dropped over 84 points to slip below the psychological 11,500-level.

Yes Bank, IndusInd Bank, Tata Steel, Sun Pharma, Vedanta and Tata Motors were among the top losers on the Sensex chart.

On the other hand, IT stocks -- HCL Tech, TCS, Infosys -- were the major gainers.

Opening on a flat note, the Sensex was gripped by volatility as the trade progressed and dived 310.80 points or 0.80 points to trade at 38,511.77 in early deals.

While, the Nifty was down 84.05 points or 0.74 points to 11,427.55.

Analysts attributed the sluggish start for the Indian markets to subdued global cues.

Asia stocks too were trading mixed as investors continued to watch developments on the US-China trade front.

Reports suggested that the White House was considering curbs on US investments in China.

The Indian rupee opened marginally higher against the US dollar in early deals on Monday.

Last week, the government continued with its measures to prop up consumer demand across sectors and bring the economy on track.

The government has been holding a series of consultations with various stakeholders to brainstorm on measures needed to accelerate economic growth, which dipped to a six-year low of 5 per cent in the first quarter of 2019-20.

Finance Minister Nirmala Sitharaman on Friday said various ministries have cleared Rs 40,000 crore out of Rs 60,000 crore due mainly to MSMEs for supply of goods and services, and the remaining amount not locked in litigation too will be paid by the first week of next month.

The government has also set October 15 as the deadline for central PSUs to clear overdue payments to vendors and exhorted them to front-load capital expenditure as it looks to lift economic growth from six-year low.

On Friday, foreign portfolio investors sold shares worth a net of Rs 213.60 crore, exchange data showed. (with inputs from PTI)

Indices poised at a key resistance

After a sharp rally, the bellwether indices began to test resistance and paused last week. Some profit-booking also led to this minor halt. Moreover, the investors are waiting for further direction from the outcome of the RBI policy meeting scheduled for October 4.

The September month auto sales number is also a key data to watch out for in the truncated week ahead as Wednesday is a market holiday on account of Mahatma Gandhi Jayanti. If profit taking continues, the Sensex and the Nifty can witness a corrective decline; investors should, thus, tread with caution. Click here to read in full the Index Outlook .

Opening bell

The benchmark indices, the BSE Sensex and the NSE Nifty, opened the week in the red.

The Sensex was quoting at 38,726, down 96 points or 0.25 per cent lower than Friday's close, while the Nifty opened at  11,491, down 21 points or 0.18 per cent lower.

Big Story: 5 value stocks for you

With stock prices soaring after the corporate tax cut announcement, do you want to invest in stocks again? If yes, here are some fundamentally-sound stocks available at attractive valuations. Take your pick. CLick here to read in full the Big Story on 5 value stocks .

Weekly Trading Guide for week beginning Sept 30, 2019

SBI (₹281.2)

SBI opened the week strongly at ₹307.5 against the previous close of ₹301.7, up nearly 2 per cent. The stock appreciated further to a high of ₹316, briefly trading above the 50-day moving average. However, the stock reversed abruptly as it could not sustain the bullish momentum and the price began to decline, breaking below the key supports at ₹300 and ₹292.

Thus, the near-term outlook seems weak as rallies are sold-off. The relative strength index has dipped below the 50-mark, indicating weakness. On the downside, supports are at ₹273.7 and ₹267. Resistances are at ₹292 and ₹300. The next leg of trend can be expected only if the stock price breaks either to ₹300 or ₹267.

In case it goes above ₹300, the stock will face a hurdle at the resistance band between ₹305.1 and ₹307.6, beyond which it may potentially retest the ₹316 levels. But if the stock breaks below ₹267, the sell-off could intensify and the stock will most likely tumble to ₹260. The return last week was minus 6.2 per cent.

ITC (₹252.9)

The stock price of ITC took a huge leap as it opened the week at ₹250 against the previous close of ₹238.05, which is a solid 5 per cent gain. It extended the rally and went on to make a high of ₹260.5. However, the stock could not move beyond that level and the price started to soften and slumped to ₹242.7, from where it bounced off from the 21-day moving average support.

Studying the chart, one can observe that the stock is consolidating sideways as the price oscillates in the band between ₹247 and the resistance band ₹258-260. If the stock manages to breach the upper limit of the range at ₹260, it is likely that it will appreciate towards ₹270 levels, beyond which there’s an immediate resistance at ₹273.

However, if the stock weakens and slides below the lower limit of the range, that is, ₹247, the price may depreciate to ₹240, below which it can even drop to ₹234 levels. Last week’s return was plus 6.5 per cent.

Infosys (₹782.3)

Infosys witnessed considerable selling immediately after the previous week opened. As a result, it tumbled below the key level at ₹800. A stronger rupee weighed down the stock. The fall extended to ₹741.9 before the stock recouped some if its losses, closing the week at ₹782.

Recoveries are strongly resisted by the price band between ₹793 and ₹800. Hence, the near-term outlook remains weak. It has also moved below the 50-day moving average, potentially shifting the medium-term trend to bearish. The RSI has dipped below the 50 midpoint and the moving average convergence divergence indicator too appears weak. So, if the scrip weakens below ₹781, it will most likely depreciate to ₹762.

A break below that level can intensify the bearish trend and the stock could dwindle to ₹725 levels. Alternatively, if the stock manages to post a recovery beyond the stiff resistance at ₹800, there will be a minor resistance at ₹814, beyond which it might move northwards to ₹850 levels over the medium term.

RIL (₹1,308.7)

Following the bullish momentum, the stock price of Reliance Industries continued to gain throughout last week. The stock toppled the key resistance at ₹1,300, making the case stronger for further appreciation. The relative strength index is clearly favouring the bulls and the moving average convergence divergence indicator has come into the positive territory, denoting a strong prevailing uptrend.

Also, the stock price has broken above the falling trend-line resistance. The stock has posted gains for two consecutive weeks. All these imply that the stock is on a strong bull trend and is likely to continue appreciating in the coming sessions.

On the upside, the stock will face a minor resistance at ₹1,320, beyond which it could strengthen to ₹1,365 levels in the near term. On the other hand, if the stock undergoes a correction, ₹1,300 will act as a key immeidate support, below which the price could fall to ₹1,240 in the short term. The return last week was plus 4.4 per cent.

Tata Steel (₹359.5)

The share price of Tata Steel was consolidating last week, fluctuating between ₹360 and ₹380. Though the stock attempted to move past ₹380, it failed, as it was rejected by the 50-day moving average. Thus, the broader ₹345-380 range continues to control the trend.

The moving average convergence divergence indicator implies weakness and so is the relative strength index. But since the RSI remains in over-sold conditions, the chances of a major downtrend from the current levels stand reduced. But unless the stock invalidates the range, the direction of the next major trend will be indecisive. Hence, the near-term outlook seems sluggish.

If the stock breaks out of the upper boundary of the range, it may rise towards the resistance band between ₹395 and ₹400. Beyond those levels, it can move upwards to ₹440. But, if the stock breaches below ₹345, the support is at ₹330, below which the stock could test the psychological level of ₹300.

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