KEY HIGHLIGHTS
Closing Bell: Sensex, Nifty Cheer Corporate Tax Cut Sop
Indian equity benchmarks clocked their biggest intraday gains in a decade as the government lowered corporate tax rate to spur growth and create jobs.
The S&P BSE Sensex surged 1,921.15 points to 38,014.62 and the NSE Nifty 50 jumped 569.40 points close at 11,274.20. The broader markets represented by the NSE Nifty 500 Index surged 5.29 percent. The move has created an investor wealth of around $96 billion.
The cut in tax rate announced by the Finance Minister Nirmala Sitharaman could lead to more foreign investors and industries to come in the Indian market, KR Choksey Investment Managers’ Managing Director Deven Choksey said.
Tax rates in India have now become more competitive enough to global peers. This could compel foreign investors to invest more in India.Deven Choksey, Managing Director, KR Choksey Investment Managers
The Nifty is expected to reach 12,000 by Diwali as ‘fear’ turns to ‘greed’, according to Sanjiv Bhasin, executive vice president, IIFL Securities.
The market breadth was firmly tilted in favour of buyers. About 1,330 stocks advanced and 489 shares declined on National Stock Exchange.
Ten out of 11 sectoral gauges compiled by NSE traded higher. The NSE Nifty Auto Index jumped 9.9 percent— its highest jump since May 2009. The NSE Nifty IT Index was the only sectoral loser, down 0.20 percent.
Large Trade Alert: Coal India
Around 1.1 crore shares traded hands in a large trade, according to Bloomberg data. The buyers and sellers were not known immediately.
The state-run miner rose nearly 4.6 percent to Rs 202.40 each. The stock traded at 7.1 times its estimated earnings per share for the coming year.
Unichem Labs Jumps After Getting FDA Approval
Shares of the specialty pharma company rose as much as 6.6 percent, the biggest intraday since May, to Rs 201 apiece.
The company received U.S. FDA approval for its Roha plant, according to an exchange filing. The inception happened between Sept. 16-20, the filing added. Also, no form 483 was issued for its Kholapur facility.
The stock fell 11 percent in the past 12 months compared with a 2.5 percent gain in the Nifty.
PM Modi Hails Tax Cut Move
Prime Minister Modi termed the move to lower corporate tax “historic” and will provide stimulus to his pet project Make In India initiative. The reform may also translate into creation of jobs, he tweeted.
Market Commentary: Changes To Affect Corporate Profitability In India, Basant Maheshwari Says
The changes announced today will affect corporate profitability in India, said Maheshwari, partner and co-founder at Basant Maheshwari Wealth Advisers LLP.
“Right now, we just heard about things that were going to affect sentiment. It’s a huge change and there would be companies benefiting up to 15 percent. But ultimately, the benefit would come to those companies that show earnings growth for the next few years.”
While the entire market is gaining right now, investors need to choose their stocks carefully, he warned.
You have to buy companies that are going to make profits for the next several years. If you buy junk right now, those companies won’t make profits and neither would the investors.Basant Maheshwari, Partner & Co-Founder, Basant Maheshwari Wealth Advisers LLP
Market Check: Sensex Surges Over 2,000 Points; Nifty Above 11,300
Indian equity benchmarks continued to surge on corporate tax cut announcement and wealth soared by over $51.7 billion in the intra-day trade today.
The S&P BSE Sensex surges over 2,000 points to 38,109 as of 1:50 p.m. and the NSE Nifty 50 jumps 5.5 percent to above 11,300. The broader markets represented by the NSE Nifty 500 Index surged 5.4 percent.
The market breadth was firmly tilted in favour of buyers. About 1,401 stocks advanced and 365 shares declined on National Stock Exchange.
Ten out of 11 sectoral gauges compiled by NSE traded higher. The NSE Nifty Auto Index jumped 11 percent, the highest ever intraday gains. The NSE Nifty IT Index was subdued after over a 5 percent rally.
Bharat Forge Acquires Stake In German-Based Refu Electronik
Bharat Forge today acquired to 50 percent stake in German company Refu Electronik for 11.35 million euros, according to its stock exchange filing.
Shares of the which opened subdued jumped 14 percent intraday.
NCLAT Adjourns Jet Airways Insolvency Case To Sept. 24
A three-judge National Company Law Appellate Tribunal panel headed by SJ Mukhopadhaya said that they will decide on objections related to Dutch insolvency administrator raised by lenders to Jet Airways, Bloomberg reported.
Axis Bank Closes QIP; Raises Rs 12,500 Crore
Axis Bank raised Rs 12,500 crore via its qualified institutional placement, including a greenshoe option of up to Rs 2,500 crore. The Axis Bank QIP is now closed for subscription.
Shares of the private lender rose as much as 6.4 percent to Rs 678.90.
Market Commentary: Dramatic Sentiment Booster For Markets, UR Bhatt Says
The cut in tax is a dramatic sentiment booster for the markets, according to Dalton Capital Advisors, Director UR Bhatt.
The effect, however, will not take place immediately as far as corporates are concerned since corporate profitability is under pressure currently, Bhatt told BloombergQuint.
The demand has to really catch-up, unless there is demand generation, there might not be new investors irrespective of the tax cut, he said, adding that the profitability might increase when corporates are able to increase sales in the due course.
Market Commentary: Expect Nifty To Hit 12,000 By Diwali, IIFL’s Sanjiv Bhasin Says
India’s equity benchmark NSE Nifty 50 is expected to reach 12,000 by Diwali as ‘fear’ turns to ‘greed’, according to IIFL’s Sanjiv Bhasin.
“We are the only analysts holding a positive view in a falling market. The stand is vindicated,” Bhasin said.
Market Commentary: Bold Move To Unleash Animal Spirits, IIFL’s Nirmal Jain Says
The cut in corporate tax will unleash the animal spirit, IIFL’s Nirmal Jain said in a tweet
“This can certainly turn the tide for the economy and markets,” Jain added.
Management Commentary: Corporate Tax Cut ‘Big Bang Reform’, Uday Kotak Says
India’s move will allow domestic companies to compete with lower tax jurisdictions like the U.S., Kotak Mahindra Bank Ltd.’s Chairman and Managing Director Uday Kotak said in a tweet.
“The move is a big bang reform. It signals that our government is committed to economic growth and supports legitimate tax abiding companies,” Kotak added.
Market Check: Sensex Jumps Nearly 2,000 Points; Nifty Near 11,300
Indian equity benchmarks surged the most in over five years.
The S&P BSE Sensex jumped nearly 2,000 points to 38,018 as of 12:15 p.m. and the NSE Nifty 50 surged 5.5 percent to trade above 11,250. The broader markets represented by the NSE Nifty 500 Index rallied 5 percent.
The market breadth was firmly tilted in favour of buyers. About 1,388 stocks advanced and 348 shares declined on National Stock Exchange.
All the sectoral gauges compiled by NSE advanced, led by the NSE Auto Index’s 8.3 percent rally.
Market Commentary: Tax Cuts To Stimulate Corporate Earnings, IDFC Securities Says
Finance Minister’s announcement of A cut in corporate taxes would stimulate corporate earnings, according to IDFC Securities’ Chief Economist and Head of Strategy Dhananjay Sinha.
“The move has both demand and supply side impact and is definitely positive for the market. These measures substantially add to slew of measures announced by the government over the last one month to improve cash flows and boost sentiment,” Sinha told BloombergQuint.
“The amount of revenue foregone should translate into multiple implication such as unclogging payments, improving employment and stimulating earnings growth,” he added.
Bond Market Update: 10-Year Yield Surges
Bond markets, which have been jittery about the government’s ambitious tax collection targets, reacted negatively to the news, while equity markets surged.
The benchmark 10-year bond yield surged 15 basis points to 6.79 percent in the hour after the announcement.
Market Commentary: Tax Cut Proposals To Increase FPI Participation, Deven Choksey Says
The cut in tax rate announced by the Finance Minister is more pragmatic and it could lead to more foreign investors/industries to come in the Indian market,” KR Choksey Investment Managers’ Managing Director Deven Choksey said.
Tax rates in India have now become more competitive enough to global peers. This could compel foreign investors to invest more in India.Deven Choksey, Managing Director, KR Choksey Investment Managers
“The benefits of this lower tax rate will be yielded after a certain point of time,” he added.
Investor Wealth Spikes Rs 2.11 Lakh Crore After FM Announcements, PTI Reports
Domestic investor wealth soared by Rs 2.11 lakh crore in morning trade on Friday as equity market rallied following a slew of economy-boosting announcements by Finance Minister Nirmala Sitharaman, PTI reported.
Led by the spike in equities, the market capitalisation of BSE-listed companies climbed Rs 2,11,086.42 crore to Rs 1,40,79,839.48 crore, the report added.
Management Commentary: Tax Cut Itself ‘Wont Increase Demand’, Maruti Suzuki’s RC Bhargava Says
The latest announcements on tax cuts will help in pricing policies, but itself ‘will not increase demand’, Maruti Suzuki’s Chairman RC Bhargava said.
“The measures will have a tremendous impact on the manufacturing sector including new investments. This will enable them to either reduce prices and make new capital investments. New investors who are coming in have to pay a lower tax rate. That’s something that has never existed,” Bhargava told BloombergQuint in an interaction.
Market Commentary: Expect Markets To Sustain Gains And Inch Higher, Chakri Lokpriya Says
Indian equities are expected to sustain gains and inch higher on the back of the latest announcements by Finance Minister Nirmala Sitharaman, according to Chakri Lokpriya managing director and chief investment officer at TCG Advisory Services.
The current announcements by Sitharaman are positive for the market.
The government has taken a meaningful stake by reducing the tax rate, which will allow many companies to undertake certain capital expenditure plans. With the corporate tax rate going down, consumer facing companies will also benefit, Lokpriya told BloombergQuint.
“The move is positive for both manufacturing and financial services sector as it will lead to revival in consumption. Lower tax rate will allow manufacturing and financial service sector companies to proceed with capex plans and credit growth,” he added.
Sitharaman Pulls Back Tax Surcharge On Capital Gains On Sale Of Securities
In order to stabilise flow of funds in capital markets, increased surcharge in this year's budget shall not apply on capital gains made through sale of equity share in companies liable for STT in the hands of individual, AOP, Sitharaman said.
Enhanced surcharge to not apply to capital gains arising on sale of any security including derivatives in the hands of FPIs.
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Sectoral Indices Check: Nifty Auto Index Surges Over 3%
Ten out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Auto Index’s 3.2 percent rally.
Tech Shares Rally On Buyback Tax Relief
Shares of the information technology companies rallied after the government announced buyback tax relief.
In order to provide relief to listed companies which have already made a public announcement to buyback shares before July 5, 2019, it is provided that tax on buyback of shares in case of such cos, shall not be charged, the Finance Minister said.
Rupee Strengthens; 10-Year Yield Reverses Loss On Proposed Tax Cuts
The Indian rupee strengthened further and the yield on the 10-year note reversed losses after the government proposed to slash corporate tax rates for domestic companies and new manufacturing companies ahead of the 37th GST Council Meeting.
Government To Slash Corporate Tax Rate For Domestic Companies
Finance Minister Nirmala Sitharaman today proposed to slash corporate tax rates for domestic companies and new manufacturing companies ahead of the 37th GST Council Meeting.
The changes in taxation will be made through an ordinance, Sitharaman said. This has been done in order to promote growth, she said.
- Any domestic company will have option to pay income tax at 22 percent if they don't avail any exemptions or incentives from FY20
- Effective tax rate for these companies is at 25.17 percent inclusive of all surcharge and cesses
- Companies will not have to pay any Minimum Alternative Tax
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Market Check: Sensex Surges Over 1,300 Points; Nifty Above 11,000
Indian equity benchmarks witnessed a sharp surge after a shaky start.
The S&P BSE Sensex surged over 1,300 points and the NSE Nifty 50 traded above 11,000.
Oil Marketers Decline On Rising Crude Prices
Shares of the oil marketing companies declined after Asia’s crude benchmark—Brent crude rose as much as 1 percent to $65.05 a barrel. It had surged 3.1 percent intraday during yesterday’s trade.
F&O Check: Nifty 10,800 Call Option Gains 8%
Nifty’s 10,800 call option contract was among the most active Nifty option contracts on National Stock Exchange.
Premium on the weekly contract, which is set to expire on Sept. 26, rose 8 percent to Rs 56.40. Over 4.5 lakh shares were added to the open interest which stood at over 33.38 lakh shares.
IIFL Securities Gains 5% After Listing
IIFL Securities—the broking arm of IIFL Holdings Ltd., which the financial services group spun off to unlock value, listed at Rs 22 per share. The stock rose as much as 5 percent thereafter.
Market Check: Sensex, Nifty Subdued
Indian equity benchmarks erased opening gains and were trading little changed.
The S&P BSE Sensex rose 50 points to 36,156 as of 10 a.m. and the NSE Nifty 50 traded little changed at 10,710. The broader markets represented by the NSE Nifty 500 Index fell 0.12 percent.
Bond Market Update: 10-Year Yield Falls
The yield on the 10-year note fell as much as nine basis points to 6.5 percent.
Yes Bank Top Performer On Sensex, Nifty; Shares Jump 7%
Shares of Yes Bank rose as much as 6.8 percent to Rs 556.65. The stock had declined 16 percent yesterday.
The lender’s promoter Rana Kapoor sold a 2.3 percent stake in the bank for Rs 337.3 crore, bringing down his family’s stake in the bank to 7.4 percent. The Yes Bank shares sold today were held by Morgan Credits Pvt. Ltd., a promoter entity that does venture funding, according to a statement issued by the company.
The company clarified that the sale was effected purely to deleverage the debt of this entity.
“The financial position of the Bank is sound and stable. its operating performance continues to be robust and its growth plans stay firmly on track,” The board of directors said in an exchange filing.
The stock was the best performer on Sensex and Nifty. Trading volume was double its 20-day average, Bloomberg data showed.
Zee Entertainment Extends Decline; Shares Fall 11%
Shares of Zee Entertainment extended declines for the fifth consecutive trading session, their longest losing streak since Aug. 6. The stock fell as much as 11 percent, the most since May 8, to Rs 275, their lowest in over five years.
Mutual funds and non-bank lenders agreed to give Essel Group up to six more months beyond the Sept. 30 deadline to repay debt, according to a person aware of the details, as the Zee Group promoters serviced nearly half their liability by selling assets.
The promoter owed the lenders close to Rs 11,000 crore. It received Rs 4,224 crore from sale of Zee shares to Invesco Oppenheimer. It further sold 205 MW of solar assets for an enterprise value of Rs 1,300 crore. The group is now required to pay close to Rs 5,500 crore by September. Essel Group is in the process of selling 480 MW of solar assets, six road projects and finance arm.
Trading volume was more than 10 times its 20-day average, Bloomberg data showed. Of the shares traded, 38 percent were at the ask price and 43 percent were at the bid.
Astral Poly Technik Slumps After Multiple Large Trades
Shares of Astral Poly Technik fell as much as 17.4 percent, the most in over five years to Rs 951.
About 34 lakh shares or 2.8 percent equity changed hands in eight large trades, according to exchange data. Buyers and sellers were not known immediately.
Of the shares traded, 44 percent were at the ask price and 40 percent were at the bid.
Opening Bell: Sensex, Nifty Edge Higher In Open
India equity benchmarks opened marginally higher after closing at seven-month low yesterday.
The S&P BSE Sensex rose 0.22 percent to 36,170 and the NSE Nifty 50 rose 0.12 percent to 10,718. The broader markets represented by the NSE Nifty 500 Index rose 0.04 percent.
The market breadth was tilted in favour of buyers. About 826 stocks advanced and 580 shares declined on National Stock Exchange.
Six out of 11 sectoral gauges compiled by NSE traded higher, led by the NSE Nifty Auto Index’s 0.72 percent gain. On the flipside, the NSE Nifty Media Index was the top sectoral loser, down 2.74 percent
Your Complete F&O Trade Setup
September Futures
- Nifty September futures closed at 10,711, premium of 6.5 points versus 14.8 points.
- Nifty futures open interest up 3 percent, adds 4.7 lakh shares in open interest.
- Bank Nifty Sept. futures closed at 26,781.8, premium of 24.2 points versus 20.4 points.
- Bank Nifty futures open interest up 1 percent, adds 16,000 shares in open interest.
Options
- Nifty PCR at 1.03 versus 1.02 (across all series).
Nifty Monthly Expiry: Sept. 26
- Max open interest on call side at 11,000 (44.6 lakh shares).
- Max open interest on put side at 10,800 (31.4 lakh shares).
- open interest addition seen at 10,800C (+19.4 lakh shares), 10,700C (+10 lakh shares).
BQ Heads-Up: How Indian ADRs Fared Overnight
Who’s Meeting Whom: Cholamandalam, Mahindra Logistics, Symphony
- Symphony to meet KR Choksey Shares & Securities on Sept. 20.
- Cholamandalam Investment & Finance to meet Ambit Capital on Sept. 24.
- Shriram City Union Finance to meet Motilal Oswal Financial Services on Sept. 20.
- Shriram Transport Finance to meet Route One Investment on Sept. 20.
- Syngene International to meet Steinberg Asset Management and Partners Bay on Sept. 24.
- Mahindra Logistics to meet Quantum Securities on Sept. 20.
Money Market Update: Rupee Opens Higher
The Indian rupee opened higher against the U.S. Dollar. The home currency appreciated as much as 0.27 percent to 71.13 against the greenback.
Pre-Market Check: Sensex, Nifty Set To Open Higher
Indian equity benchmarks are set to open higher.
The S&P BSE Sensex rose 0.54 percent to 36,287 during the pre-market trade and the NSE Nifty 50 rose 0.69 percent to 10,778.
Market Commentary: Structure Likely To Remain Weak, Emkay Investment Managers Says
The structure of the Indian markets are likely to remain weak, Emkay Investment Managers’ Fund Manager Sachin Shah said, as the Indian equity benchmarks resumed selloff after a one-day breather.
“As the large caps are now declining, it is becoming difficult for investors to be constructive on mid and small caps, which witnessed some gains during last week,” Shah told BloombergQuint in an interaction.
“Investors need to have courage and knowledge to enter the market at this juncture,” he added.
Insider Trading: Alembic Pharma, Godrej Industries, GFL
- Godrej Industries promoter group Anamudi Real Estates acquired 50,000 shares from Sept. 16-17.
- GFL promoter Inox Leasing & Finance acquired 85,000 shares from Sept. 16-17.
- Alembic promoter Nirayu acquired 1.5 lakh shares from Sept. 17-18.
- Usha Martin promoters acquired 4.9 lakh shares on Sept. 16.
- Sun Pharma promoter Shanghvi Finance acquired 4 lakh shares on Sept. 19.
Trading Tweaks: HDFC Bank, IIFL Securities
- IIFL Securities to be listed on bourses.
- HDFC Bank record date for face value split from Rs 2 to Rs 1 per share.
- Automobile Corporation of Goa record date for share buyback.
- Gujarat Apollo Industries to move out of short term ASM Framework.
Stocks To Watch: Axis Bank, Bharat Forge, DHFL, HDFC, NMDC, Reliance Home Finance, Yes Bank
- Mahanagar Gas: The gas supplier, which supplies piped gas in Mumbai, said in a statement that it had been receiving complaints of gas smell from various parts of Mumbai, according to a PTI report. Many residents in Mumbai's western and eastern suburbs reported an unknown odour, prompting rumours of a gas leak at the Rashtriya Chemical Fertiliser's plant in the Chembur suburb, PTI reported quoting officials.
- Yes Bank: Promoter Rana Kapoor sold a 2.3 percent stake in the bank for Rs 337.3 crore, bringing down his family’s stake in the bank to 7.4 percent. The Yes Bank shares sold today were held by Morgan Credits Pvt. Ltd., a promoter entity that does venture funding, according to a statement issued by the company.
- Axis Bank launched qualified institutional placement issue. The QIP base price was fixed at Rs 661.5 per share and up to 5 percent discount can be offered on the base price. The lender’s board will meet again on Sept. 25 to approve QIP issue to investors. The bank has started taking orders for an institutional share sale that’s seeking to raise $1.4 billion according to terms for the deal obtained by Bloomberg. It is offering new shares at an indicative issue price of Rs 629 apiece, representing a 4.9 percent discount to last close and has the upsize option to sell as much $351 million of additional shares on strong demand, according to Bloomberg report.
- Bharat Forge acquired 50 percent stake in its German company Refu Electronik for 11.35 million euros.
- DHFL said that it is in receipt of proposals from reputed developers to act as development managers in respect of certain large projects including projects under Slum Rehabilitation Scheme wherein the company has extended loans in the past.
- Reliance Home Finance: Brickwork Ratings has downgraded the company’s rating to D (Default) for company’s debt program, primarily due to non-payment of commercial paper.
- India Energy Exchange: Board has approved incorporation of an arm to undertake business of developing a gas exchange with an initial investment up to Rs 10 crore.
- NMDC sets fines prices at Rs 2,460 per tonne and lump ore prices at Rs 2,700 per tonne, with effect from Sept. 19.
- Sintex Industries clarified that the news that lenders of the company are in talks with three players to sell the firm is merely market speculation.
- Morepen Laboratories: Board approved allotment up to 3.7 crore warrants aggregating to Rs 74 crore to the promoters.
- Power Finance Corporation transferred a Rajasthan transmission unit to the highest bidder Adani Transmission.
- JSW Steel to meet on or after Sept. 24 to open an issue of securities.
- Godrej Consumer Products increased its stake in two arms domiciled in Mauritius from 90 percent to 95 percent.
- NIIT: SBI MF increased stake from 4.83 percent to 6.29 percent in the company.
- Rattan India Power: Board approved Letter of Intent for thermal project in Maharashtra for purpose of resolution of debt for the lenders.
- Oberoi Realty: Clarifies that the media article on IT department unearthing cash transactions in searches at Oberoi Realty which appeared in MoneyControl is factually incorrect, malicious and false. The company said that it absolutely has no cash dealings with any of clients.
Nifty Futures Suggests Positive Start; Asian Equities Edge Higher
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.36 percent to 10,743 as of 8:30 a.m.
Asia stocks saw modest gains on reduced volumes after a lackluster session for U.S. shares.
Japan’s Topix Index is heading for a fifth straight weekly advance, benefiting from a global turn toward stocks viewed as more cheaply valued. Australian stocks climbed amid rising expectations of another interest-rate cut.
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