Nifty, Sensex May Head Higher – Weekly closing report -The Total Investment & Insurance Solutions

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01 February 2019

I had mentioned in last week’s closing report that Nifty, Sensex were looking weak. The major indices of the Indian stock markets staged a small rally over the week and closed with gains on Friday over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below: 

Selling pressure in banking, automobile, healthcare and consumer durables stocks pulled the Indian equity market lower by around 1% on Monday. However, global cues such as positive Asian markets aided in arresting the downward spiral. 

Tata Steel said its step-down subsidiary, T.S. Global Holdings Pte Ltd (TSGH), has signed definitive agreements with China's HBIS Group to divest a majority stake in its South East Asia (SEA) business. Tata Steel also said the consideration received from such sale would be "$327 million and equity stake of 30% in the entity held by HBIS Group and TSGH on 70-30 basis". The Chinese group was established on June 30, 2008, by the merger of Tangshan Iron and Steel Group and Handan Iron and Steel Group of Hebei province.
 

Larsen and Toubro (L&T) on Friday reported a 33.8% increase in its standalone net profit for the October-December quarter of the financial year 2018-19. Its standalone net profit stood at Rs1,634.78 crore, up from Rs1,221.95 crore reported during the third quarter of the last financial year, the company said in a regulatory filing to the BSE. The company's total income during the period under review was Rs23,229.98 crore, 27.9% higher than Rs18,164.29 crore earned during the corresponding period of FY18. 

Sensex and Nifty traded lower following the Asian stocks on Tuesday. The financials, IT (information technology) and metal sectors on the BSE were in the red while the telecom and metal stocks gained. The laggards were Yes Bank, Reliance Industries, Power Grid, Infosys and HDFC declining up to 2%. 

State-owned lender Bank of India's net loss widened during the quarter ended December 31, 2018 due to higher provisioning for non-performing assets (NPAs). According to the state-run lender, its net loss in the three months through December 2018 widened to Rs4,738 crore from a net loss of Rs2,341 crore reported for the same period of the last fiscal year. However, the lender's net interest income increased by 33.23% to Rs3,332 crore in the quarter under review from Rs2,501 crore in Q3FY18. The bank made provision worth Rs9,179.48 crore for NPAs during the quarter under review from Rs4,373.06 crore made during the previous corresponding quarter of 2017-18. 

Diversified conglomerate Piramal Enterprises Ltd (PEL) reported a rise of 23% in its consolidated net profit during the third quarter of 2018-19. According to the company, its net profit during the quarter under review rose to Rs603 crore, up from Rs490 crore reported for the corresponding quarter of the previous fiscal. Besides, the total income shot up 23% from Rs2,922 crore in the year-ago-quarter to Rs3,592 crore in the third quarter of this fiscal. 

Sensex gained on Wednesday, while the Nifty was marginally higher with gains made by the financial stocks. FMCG (fast moving consumer goods), oil and gas and realty stocks slipped in the red but the key finance and banking stocks gained.

Yes Bank said its two promoter groups -- Madhu Kapur Group and Rana Kapoor Group -- have agreed to nominate one representative director each on the Bank's Board. The bank, in a regulatory filing also said that it has sought the Reserve Bank of India's approval to appoint a temporary MD and CEO from February 1, 2019, till Ravneet Singh Gill takes over as the next full-time MD and CEO on March 1. 

Drug maker Strides Pharma Science Ltd said its Canadian subsidiary acquired 80% equity stake in Canada-based generics frim Pharamapar for $3 million (Rs21 crore). "The acquisition will enable us to build our operations, as the pharmaceutical market in Canada is estimated to be $21 billion with a major share of generics through retail pharmacies," said the city-based Strides in a statement here. The two-decade old $8-million Pharmapar specialises in generic medication to insured individuals in Canada. It is also a leading partner to Quebec pharmacies and covers about 1,000 pharmacies with access to 12 banners and 100 products. Quebec accounts for 25% of the Canadian generics market and is private. 

In a related development, the company's board has approved sale of its Australian business Strides Pharma Global to the Arrow-Apotex merged entity for Australian dollar 394 million ($281 million or Rs20 crore). "We will enter into a 10-year preferred supply agreement with the merged entity to result in potential annual Ebitda of Australian $15-20 million," said the company in a release. 

Sensex and Nifty logged strong gains on Thursday amid a surge in global markets as the US Federal Reserve decided to keep the interest rates unchanged. Shares of IT (information technology) companies led the gains as BSE IT index rose close to 2%. Key sectors banking, finance as well as oil and gas stocks also surged over 1%. US Fed's decision to keep the interest rates unchanged is good for the emerging markets. Investors are also upbeat owing to the Q3 results by large caps, according to market analysts. Also, the short covering ahead of the F&O expiry due later in the day gave a push to the markets. 

Stocks of Dewan Housing Finance Corp (DHFL) plunged further after reports emerged that the Ministry of Corporate Affairs (MCA) may probe allegation of a Rs31,000 crore scam. Stock exchanges have also sought clarification from the company over reports of the likely probe. Around 10.20 a.m., the share price of DHFL on the National Stock Exchange slumped nearly 20% to touch an intra-day low of Rs129.50. On Tuesday, the investigative media organisation Cobrapost alleged that DHFL promoters routed around Rs31,000 crore through dubious companies and parked it outside India to acquire assets. The company on Tuesday rejected the allegations. DHFL said it had met all its obligations to its lenders by paying them back over Rs17,000 crore in the last three months. 

The major indices of the Indian stock markets were volatile and closed higher on Friday. Interim Budget announcements of higher tax exemption limit and key measures for the rural economy and SME sector buoyed the Indian equity market on Friday. However, Sensex and NSE Nifty50 ceded some of the day's gains as key finance and banking stocks ended lower. Auto stocks gained over 2% while the metal stocks lost 3%. Index-wise, the Sensex closed 212.74 points or 0.59% higher at 36,469.43 points after hitting a high of 36,778.14, while the Nifty ended the Budget day's trade at 10,893.65, up 62.70 points.

Budget carrier SpiceJet on Friday said that it will launch eight new direct flights and frequencies connecting metros and non-metros on domestic routes from March 2019. According to the airline, the new domestic flights will reinforce its network strength in southern region. "The new flights will strengthen SpiceJet's network in the Southern region and reiterates its focus on augmenting connectivity between metro and non-metro cities," the company said in a statement. "Flights on all the routes will be operational daily except Tuesdays. SpiceJet will deploy its Bombardier Q400s on all these routes." SpiceJet shares closed at Rs80.25, down 0.37% on the BSE.The Total Investment & Insurance Solutions

Weekly Indices (The Total Investment & Insurance Solutions)