Indian equity markets plunged on Tuesday, tracking global peers, after US oil prices slipped below $0 a barrel in overnight trade. Further, US President Donald Trump's announcement that he would sign an executive order to temporarily suspend immigration into US also impacted sentiment. Volatility index, India VIX, spiked 5 per cent.
Among headline indices, the S&P BSE Sensex slipped 878 points, or 2.73 per cent, to 30,780 levels and the Nifty50 index hovered around 9,000 levels. Tata Steel and IndusInd Bank (both down over 7%) were the top laggards in the Sensex pack. Besides, Infosys slipped 2 per cent post March quarter results while oil-related stocks like Reliance Industries (down 4%) were also under pressure.
Majority of the Nifty sectoral indices were in the red, led by Nifty Metal index, down 5.8 per cent. On the other hand, Nifty Pharma index gained, led by Aurobindo Pharma, up 10 per cent.
RESULTS TODAY
Seven companies, including ACC and ICICI Prudential Life Insurance, are scheduled to report their March quarter earnings today.
CATCH ALL THE LIVE UPDATES
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10:50 AM
BROKERAGE VIEW:: ICICI Securities on Engineers India
Engineers India (EIL) is relatively better placed to tackle the current Covid-19 related challenges in terms of execution delay, migrant workers, postponement of
orders, etc. Company has an advantage in the consultancy segment due its non-dependency on ground-level execution. Also, the open-book estimate portion of
LSTK does not carry working capital risk. Factoring-in the current lockdown, we cut FY20E, FY21E and FY22E earnings by 4.9%, 23.8% and 27.5% respectively.
Given the strong balance sheet and attractive valuation with net cash at 57% of market cap, we maintain BUY on the stock with a revised target price of Rs 103
(previously: Rs 131).
10:45 AM
BROKERAGE VIEW:: Edelweiss Securities on Telecom sector
A paradigm shift in consumer behaviour is underway in the wake of the lockdown and social distancing, which discourages person-to-person contact. We argue this is leading to higher dependency on digital tools such as video-conferencing, collaborative applications, etc, thereby driving up demand for telecom services. Besides, we see a miniscule financial impact of the lockdown on service delivery as government has exempted movement of critical staff. Consumers, too, attach a higher value to such services amid fettered physical movement. That said, we do expect the lockdown to arrest 4G subscriber addition and churn while accelerating SIM-consolidation. Bharti Airtel’s (Bharti) Africa business is particularly at risk should commodity prices stay persistently low, as seen during H1FY17 when the crude oil plunge triggered a currency crisis in Nigeria. On balance, Bharti remains our top pick as its strong balance sheet can withstand any AGR outcome while contribution of the vulnerable Africa business to its equity value is insignificant. We are upgrading Bharti Infratel (Infratel) to ‘BUY’ (from ‘HOLD’), expecting the high odds of a three-private-player industry structure sustaining.
10:43 AM
BROKERAGE VIEW:: Prabhudas Lilladher on Infosys
Rating: HOLD | CMP: Rs 651 | TP: Rs 668
We have cut our revenue estimates for FY21E/FY22E by 2% & except revenue decline of 5% in FY21E. Our near term revenue forecast stands at QoQ decline of 3% in Q1FY21 and 2% decline in Q2FY21.This led to cut in EPS by ~5%/4% for FY21E/22E. We have assigned 16X multiple (unchanged) on FY22E earnings to arrive at changed target price of Rs. 668 (earlier 694). After a strong bounce back in stock, upside will be modest from hereon, downgrading to HOLD from BUY.
10:38 AM
Aurobindo Pharma gains 15% as USFDA grants VAI to Unit IV facility
Shares of Aurobindo Pharma surged 15 per cent to Rs 621.60 on the BSE in an otherwise weak market on Tuesday after US drug regulator USFDA classified the company's Unit IV of Hyderabad plant as VAI (voluntary action indicated). At 10:00 am, the stock was trading 12 per cent higher at Rs 605, as compared to 2.6 per cent decline in the benchmark S&P BSE Sensex. READ MORE
Aurobindo Pharma
10:35 AM
NEWS ALERT | Pharma stocks gain in an otherwise weak market
-- Nifty Pharma up 3% as compared to 2.6% decline in Nifty 50 index
-- Dr Reddy's hits 52-week high, Sun Pharma nears 52-week high
10:32 AM
EXPERT COMMENT :: Sriram Iyer, senior research analyst at Reliance Securities on Oil price collapse
After ending in negative territory, WTI May contract has started higher this Tuesday morning in Asian trading. However, upside could remain limited as rapidly filling storages and demand destruction from Covid-19 could see a slower expected reopening of the US economy.
Technically NYMEX June, which is active, could find support at $17.30, but a fall below could see more downside pressure towards $15.50 to $13.70 in coming sessions. MCX Crude Oil May will continue to trade on bearish note below 1,900 levels, downside negative momentum can take prices to 1,650-1,500 levels in coming sessions.
So, strategy for Crude Oil May will remain Sell in the range of 1,700-1,710, with the stop loss of 1,800 and a target of 1,500.
10:26 AM
More dips ahead suggest bearish phase, going by major falls since 2008
There were four such instances during the global financial crisis in 2008-09, five during the 2011 Euro crisis, two during China’s 2015 currency devaluation, and three during the taper tantrum, noted the data from foreign brokerage firm Jefferies India.
The 2008-09 period saw dips ranging between 18 per cent and 45 per cent. The Euro crisis had five double-digit declines between 10 per cent and 17 per cent. The 2015 China decline twice fell 11-12 per cent. The taper tantrum was relatively mild, with three dips of 8-9 per cent. READ MORE
10:19 AM
Infosys, TCS, Wipro: IT stocks tumble as Trump plans immigration suspension
Shares of information technology (IT) companies were under pressure, falling by up to 6 per cent on the National Stock Exchange (NSE) in early morning deals on Tuesday, after US President Donald Trump announced a temporary suspension of immigration into the country. Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Wipro, HCL Technologies, Hexaware Technologies, NIIT Technologies and Mindtree were down 1 per cent to 5 per cent on the NSE in intra-day trade. READ MORE
IT firms, IT sector, firms, companies, workers, jobs, employment
10:16 AM
MARKET VOICE | As a fund house, we are buying into this market correction: Mahesh Patil
This is a good time for investors to rebalance their asset allocation. Wherever the equity component has gone down due to the fall in the market, investors should increase their equity exposure. READ MORE
10:06 AM
NEWS ALERT | Ten most productive days were lost; gave a concession period of 30 days: LIC India
-- Invested Rs 1.3 trillion last year: LIC India
(as told to CNBC TV18)
Among headline indices, the S&P BSE Sensex slipped 878 points, or 2.73 per cent, to 30,780 levels and the Nifty50 index hovered around 9,000 levels. Tata Steel and IndusInd Bank (both down over 7%) were the top laggards in the Sensex pack. Besides, Infosys slipped 2 per cent post March quarter results while oil-related stocks like Reliance Industries (down 4%) were also under pressure.
Majority of the Nifty sectoral indices were in the red, led by Nifty Metal index, down 5.8 per cent. On the other hand, Nifty Pharma index gained, led by Aurobindo Pharma, up 10 per cent.
RESULTS TODAY
Seven companies, including ACC and ICICI Prudential Life Insurance, are scheduled to report their March quarter earnings today.
CATCH ALL THE LIVE UPDATES
Auto Refresh
10:50 AM
BROKERAGE VIEW:: ICICI Securities on Engineers India
Engineers India (EIL) is relatively better placed to tackle the current Covid-19 related challenges in terms of execution delay, migrant workers, postponement of
orders, etc. Company has an advantage in the consultancy segment due its non-dependency on ground-level execution. Also, the open-book estimate portion of
LSTK does not carry working capital risk. Factoring-in the current lockdown, we cut FY20E, FY21E and FY22E earnings by 4.9%, 23.8% and 27.5% respectively.
Given the strong balance sheet and attractive valuation with net cash at 57% of market cap, we maintain BUY on the stock with a revised target price of Rs 103
(previously: Rs 131).
10:45 AM
BROKERAGE VIEW:: Edelweiss Securities on Telecom sector
A paradigm shift in consumer behaviour is underway in the wake of the lockdown and social distancing, which discourages person-to-person contact. We argue this is leading to higher dependency on digital tools such as video-conferencing, collaborative applications, etc, thereby driving up demand for telecom services. Besides, we see a miniscule financial impact of the lockdown on service delivery as government has exempted movement of critical staff. Consumers, too, attach a higher value to such services amid fettered physical movement. That said, we do expect the lockdown to arrest 4G subscriber addition and churn while accelerating SIM-consolidation. Bharti Airtel’s (Bharti) Africa business is particularly at risk should commodity prices stay persistently low, as seen during H1FY17 when the crude oil plunge triggered a currency crisis in Nigeria. On balance, Bharti remains our top pick as its strong balance sheet can withstand any AGR outcome while contribution of the vulnerable Africa business to its equity value is insignificant. We are upgrading Bharti Infratel (Infratel) to ‘BUY’ (from ‘HOLD’), expecting the high odds of a three-private-player industry structure sustaining.
10:43 AM
BROKERAGE VIEW:: Prabhudas Lilladher on Infosys
Rating: HOLD | CMP: Rs 651 | TP: Rs 668
We have cut our revenue estimates for FY21E/FY22E by 2% & except revenue decline of 5% in FY21E. Our near term revenue forecast stands at QoQ decline of 3% in Q1FY21 and 2% decline in Q2FY21.This led to cut in EPS by ~5%/4% for FY21E/22E. We have assigned 16X multiple (unchanged) on FY22E earnings to arrive at changed target price of Rs. 668 (earlier 694). After a strong bounce back in stock, upside will be modest from hereon, downgrading to HOLD from BUY.
10:38 AM
Aurobindo Pharma gains 15% as USFDA grants VAI to Unit IV facility
Shares of Aurobindo Pharma surged 15 per cent to Rs 621.60 on the BSE in an otherwise weak market on Tuesday after US drug regulator USFDA classified the company's Unit IV of Hyderabad plant as VAI (voluntary action indicated). At 10:00 am, the stock was trading 12 per cent higher at Rs 605, as compared to 2.6 per cent decline in the benchmark S&P BSE Sensex. READ MORE
Aurobindo Pharma
10:35 AM
NEWS ALERT | Pharma stocks gain in an otherwise weak market
-- Nifty Pharma up 3% as compared to 2.6% decline in Nifty 50 index
-- Dr Reddy's hits 52-week high, Sun Pharma nears 52-week high
10:32 AM
EXPERT COMMENT :: Sriram Iyer, senior research analyst at Reliance Securities on Oil price collapse
After ending in negative territory, WTI May contract has started higher this Tuesday morning in Asian trading. However, upside could remain limited as rapidly filling storages and demand destruction from Covid-19 could see a slower expected reopening of the US economy.
Technically NYMEX June, which is active, could find support at $17.30, but a fall below could see more downside pressure towards $15.50 to $13.70 in coming sessions. MCX Crude Oil May will continue to trade on bearish note below 1,900 levels, downside negative momentum can take prices to 1,650-1,500 levels in coming sessions.
So, strategy for Crude Oil May will remain Sell in the range of 1,700-1,710, with the stop loss of 1,800 and a target of 1,500.
10:26 AM
More dips ahead suggest bearish phase, going by major falls since 2008
There were four such instances during the global financial crisis in 2008-09, five during the 2011 Euro crisis, two during China’s 2015 currency devaluation, and three during the taper tantrum, noted the data from foreign brokerage firm Jefferies India.
The 2008-09 period saw dips ranging between 18 per cent and 45 per cent. The Euro crisis had five double-digit declines between 10 per cent and 17 per cent. The 2015 China decline twice fell 11-12 per cent. The taper tantrum was relatively mild, with three dips of 8-9 per cent. READ MORE
10:19 AM
Infosys, TCS, Wipro: IT stocks tumble as Trump plans immigration suspension
Shares of information technology (IT) companies were under pressure, falling by up to 6 per cent on the National Stock Exchange (NSE) in early morning deals on Tuesday, after US President Donald Trump announced a temporary suspension of immigration into the country. Tata Consultancy Services (TCS), Infosys, Tech Mahindra, Wipro, HCL Technologies, Hexaware Technologies, NIIT Technologies and Mindtree were down 1 per cent to 5 per cent on the NSE in intra-day trade. READ MORE
IT firms, IT sector, firms, companies, workers, jobs, employment
10:16 AM
MARKET VOICE | As a fund house, we are buying into this market correction: Mahesh Patil
This is a good time for investors to rebalance their asset allocation. Wherever the equity component has gone down due to the fall in the market, investors should increase their equity exposure. READ MORE
10:06 AM
NEWS ALERT | Ten most productive days were lost; gave a concession period of 30 days: LIC India
-- Invested Rs 1.3 trillion last year: LIC India
(as told to CNBC TV18)
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