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Weak Start to the Week; PSU & Metal Stocks Fall
Mon, 19 Feb Closing | Karan Janani, TM Team

Indian share markets continued to witness selling pressure in the afternoon session as benchmark Sensex slipped below the 34,000-mark. At the closing bell, the BSE Sensex closed lower by 236 points and the NSE Nifty finished lower by 74 points. The S&P BSE Mid Cap finished down by 1.1% while S&P BSE Small Cap finished down by 1%.

Losses were largely seen in metal stocks, capital goods' stocks and PSU stocks.

Asian stock markets finished broadly higher today with shares in Japan leading the region. The Nikkei 225 is up 1.97% while Korea's Kospi finished up by 0.87%. European markets are lower today with shares in London off the most. The FTSE 100 is down 0.10% while France's CAC 40 is off 0.10% and Germany's DAX is lower by 0.02%.

Rupee was trading at Rs 63.91 against the US$ in the afternoon session. Oil prices were trading at US$ 62.09 at the time of writing.

The Market cap to GDP ratio for Indian companies too is close to dangerously high levels. While this is still some way off the peak of FY-08, when it had once reached close to 150, it's relatively high.

FY17 saw this ratio reach close to 80. It is also expected to increase further given the moderate growth expectations in India's GDP for FY18. Warren Buffett once considered this as one of the best valuation metrics to gauge the markets.

Past history shows some correlation between the ratio and the share market. 2008 saw Sensex decline by 38%, when this ratio crossed the 100 mark. Also, the market has bounced back sharply when this ratio was low.

The Warren Buffett Indicator Suggests Indian Equity Market Is Overvalued

The basic assumption in this ratio is that whenever the GDP of the country grows, the market performance will reflect it. Also, when stocks do well, it can be extrapolated to assume the Indian economy is doing well.

In news from banking sector, PNB share price continued to plunge in today's trade. PNB finished down by 7.4% extending the fall for the fourth straight session following the Rs 114 billion fraud at one its Mumbai branches.

Meanwhile, listed Indian banks have lost over US$10 billion (Rs 678 billion) in market capitalisation after the US$1.8 billion fraud at Punjab National Bank (PNB) came to light. PSU banks continued to bleed on Monday, after more lenders reported exposure to the scam.

UCO Bank on Saturday said it has an exposure of US$411.82 million to PNB's Nirav Modi LoUs. Earlier, State Bank of India and Allahabad Bank disclosed Rs 13.6 billion and Rs 20 billion, respectively.

Analysts believe the fraud will lead higher provisioning and may further impact the profitability of banks, which are already struggling under mounting non-performing assets (NPAs).

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In another development, Gitanjali Gems share price plunged 10% after the Central Bureau of Investigation (CBI) has filed a First Information Report (FIR) against the Mehul Choksi-run Gitanjali Group. The FIR is based on a fresh complaint made by PNB on February 13th.

This marks as the second FIR filed in the alleged fraud involving overseas payments to jeweler Nirav Modi, his uncle Choksi and entities belonging to them based on guarantees issued by PNB.

As for the Nirav Modi case, the Reserve Bank of India (RBI) said it has not asked PNB to pay counter-party banks against the letter of undertakings (LoUs). The central banks stated that it has begun its assessment and will take action as needed.

Natco pharma share price finished on an encouraging note (up 0.7%) after the company's Mekaguda facility received zero observations from the US health regulator.

The scrip had also underperformed the market in past one quarter, falling 11.59% as against Sensex's 2% rise. The scrip had also underperformed the market in past one year, rising 4.63% as against Sensex's 19.47% rise.

On a consolidated basis, net profit of Natco Pharma rose 11.54% to Rs 2.17 billion on 16.08% decline in net sales to Rs 5.62 billion in Q3 December 2017 over Q3 December 2016.

Moving on to news from engineering sector. Larsen & Toubro's (L&T) construction arm -- L&T Construction -- has bagged orders worth Rs 16.8 billion.

The Water & Effluent Treatment business of the company has secured EPC orders from Pune Municipal Corporation for Study, Survey, Investigation, Assessment, Design Validation and Revamping of the entire Water Supply System for Pune City.

L&T share price finished the day down by 2.3% on the BSE.

GVK power & infra share price finished up by 1.4% after Prime Minister Narendra Modi on Sunday laid the foundation stone of the Navi Mumbai International Airport site in Panvel, nearly 21 years after it was mooted. The first phase the Rs16,700-crore project is expected to be completed by 2019.

As part of the first phase - Cidco expects the developer GVK Power & Infrastructure (GVK) to make one runway and a terminal building operational with a capacity to handle 10 million passengers by end of next year.

In another development, Siemens share price was in focus today. As per a leading financial daily, Siemens is planning to sell its Mobility business and Mechanical Drives business. The meeting of the Board of Directors of the company is scheduled to be held on February 21, 2018, to consider the same.

Siemens finished the day down by 2.3% on the BSE.

In news from the energy sector, India Ratings and Research (Ind-Ra) in its latest report has retained a stable outlook on the solar sector and revised wind energy sector's outlook from negative to stable for the financial year 2018-19.

The development comes in the backdrop of favourable environment for wind and solar energy sectors, as bids are being driven by central government agencies and power purchase agreements (PPAs) are becoming favourable to developers in terms of addressing grid curtailment and termination issues.

However, it has maintained a negative outlook for the thermal power sector for FY19, owing to lack of visibility for tying up long-term PPAs.

According to the report, existing excess power tie-up of discoms and PPAs already signed with central and state sector generating companies for buying power from 40GW under construction thermal plants, prevent the need for purchasing power from private thermal plants under long-term PPAs. Also, it noted that thermal plants remain vulnerable to coal and water availability, thus certainty in these two linkages is hard to come by.

And here's a note from Profit Hunter:

Tata Steel Ltd is the top loser in the Nifty 50 Index today. Let's have a look at its chart.

Last time we reviewed this stock, it had broken above its horizontal resistance level (red line on the chart) of 570 with healthy volumes. This indicated strength in the counter. As a result, the stock went to rally more than 30% to hit a 52-week high of 747 in January 2018.

But the stock witnessed selling from that level and it is down nearly 14% from its recent high. Today, it slipped 6% with strong volumes.

So does this indicate the stock is now lacking strength or this is just a correction in the longer term uptrend? We'll keep a track of it.

Tata Steel Plunges 6% for the Day
Tata Steel Plunges 6% for the Day 

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Stock Market Updates

D. B. CORP plunges by 5%; BSE 500 Index Down 0.2% (Today's Market)

Jun 21, 2018 12:20 PM

D. B. CORP share price has plunged by 5% and its Current Market Price is Rs 261. The BSE 500 is down by 0.24%. The top gainers in the BSE 500 Index are CG POWER & INDUSTRIAL SOLUTIONS LTD (up 4.40%) and TVS SRICHAKRA (up 3.43%). The top losers are D. B. CORP (down 5.24%) and HIMACHAL FUTURISTIC (down 5.15%).

Sensex Opens Higher; Consumer Durables & Bank Stocks Lead (Today's Market)

Jun 21, 2018 09:30 am

Indian share markets open in green with Sensex trading up by 94 points, while the Nifty is trading up by 30 points.

RELIANCE IND. at All Time High; BSE OIL & GAS Index Up 0.4% (Today's Market)

Jun 21, 2018 09:29 AM

RELIANCE IND. share price has hit an all time high at Rs 1,031 (up 1.01%). The BSE OIL & GAS Index is up by 0.38%. Among the top gainers in the BSE OIL & GAS Index today are RELIANCE IND. (up 1.01%) and BPCL (up 0.47%). The top losers include CASTROL INDIA (down 0.18%) and GAIL (down 0.80%).

JINDAL SAW LTD plunges by 5%; BSE METAL Index Up 0.1% (Today's Market)

Jun 21, 2018 09:27 AM

JINDAL SAW LTD share price has plunged by 5% and its Current Market Price is Rs 90. The BSE METAL is up by 0.08%. The top gainers in the BSE METAL Index are NMDC LTD (up 0.50%) and HINDALCO (up 0.49%). The top losers is JINDAL SAW LTD (down 5.02%).

BATA INDIA at All Time High; BSE FMCG Index Up 0.2% (Today's Market)

Jun 21, 2018 09:25 AM

BATA INDIA share price has hit an all time high at Rs 848 (down 0.05%). The BSE FMCG Index is up by 0.17%. Among the top gainers in the BSE FMCG Index today are BATA INDIA (down 0.12%) and NESTLE (up 0.12%). The top losers include VENKYS (I) LIMITED (down 0.02%) and HIND. UNILEVER (down 0.03%).

Rising Oil Prices; RBI Minutes and Top Stocks in Action Today (Today's Market)

Jun 21, 2018 Pre-Open

Impact of rising oil prices in India; RBI policy minutes; IPOs back in demand and Top Cues in Action Today.

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Jun 21, 2018 01:41 PM