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Market Wrap: Sensex up 637 pts on possible roll-back of higher tax on FPIs

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The bulls on Dalal Street made a strong comeback in the last hour of the session on Thursday after reports said the government was looking to roll-back the recently imposed higher tax on the foreign portfolio investors (FPIs).


The S&P BSE Sensex jumped 637 points or 1.74 per cent to settle at 37,327 levels with HCL Tech being the top gainer and Tata Steel the biggest laggard. Out of 30 constituents, 27 ended in the green and just 3 in the red. The broader Nifty50 index of the National Stock Exchange (NSE) reclaimed the crucial level of 11,000 to end at 11,032.45, up 177 points or 1.63 per cent.



The Centre is likely to exempt foreign portfolio investors from an increase in taxes that was part of the Union Budget approved by Parliament but heavily criticised, a government official said on Thursday, Reuters reported.


Sectorally, all indices on the NSE settled in the positive territory. Auto stocks rallied the most, followed by IT and PSU bank counters. The Nifty Auto index ended 6,998.45, up 3 per cent.


In the broader market, the S&P BSE Midcap index gained 57 points or 0.42 per cent to settle at 13,566 while the S&P BSE SmallCap index ended at 12,574.25, up 92 points or 0.74 per cent.


BUZZING STOCKS


Shares of HCL Technologies gained 7 per cent to Rs 1,094 apiece on the BSE after the company posted double-digit revenue growth in the first quarter of the financial year 2019-20 (Q1FY20). In constant currency (CC) terms, the company’s revenue grew 17 per cent year-on-year (YoY) and 7.7 per cent on sequential basis.


Shares of Affle India made a strong debut on the bourses and were listed at Rs 930 on the BSE, a premium of 25 per cent against the issue price of Rs 745. On the National Stock Exchange (NSE), the stock opened at Rs 926, a 24 per cent increase against the issue price. The stock, however, pared its early gains to settle at Rs 875 apiece on the BSE.

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324 stocks hit lower circuit on BSE; Reliance Capital tumbles 24% intra-day

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Over 300 stocks were frozen in their respective lower circuit band on the BSE on Thursday amid a sharp sell-off in equities with the benchmark indices falling over 1.50 per cent on Thursday.


As many as 324 stocks or 12 per cent of the total 2,597 traded stocks on the BSE were locked in the lower circuit and saw only sellers on these counters today. Of these, around 104 stocks belonged to the ‘X’ group, 81 stocks were from XT group, followed by B group (67), T group (44) and Z group (16), the exchange data shows.


Eight stocks – Thomas Cook India, Sterlite Technologies, CG Power and Industrial Solutions, Eveready Industries, Jet Airways India, Bliss GVS Pharma, Reliance Communications and Indiabulls Integrated Services – from the S&P BSE 500 index hit their respective lower circuits during the day.


“The delay in addressing concerns of foreign investors regarding taxation and slowdown in the economy is seeing foreign selling continue with over US$2.5 billion being the collateral damage since the budget,” IIFL Securities said in a client note.


Thomas Cook India (Rs 129), Sterlite Technologies (104) and Housing Development and Infrastructure (Rs 7) were frozen at 20 per cent lower circuit limit on the BSE.


Reliance Capital tanked 24 per cent to Rs 30 in the intra-day trade. It finally settled 20 per cent lower at Rs 32 on the BSE. Stocks trading on future & option (F&O) segment, don’t have any circuit limits.



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Market Ahead, August 22: All you need to know before the Opening Bell

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Markets, Investors, Indices, Stocks


Investors are expected to react to market regulator Sebi’s board decision to ease requirements for foreign portfolio investors (FPIs).


The regulator said FPIs would no longer be required to meet the ‘broad-basing’ criteria, under which at least 20 investors were required to establish a fund. It also said, it would rationalise the framework for issuance of participatory notes (P-notes), an instrument once very popular with overseas investors.



That apart, market participants will take cues from the minutes of the RBI’s August monetary policy committee (MPC) meet released yesterday that showed that all three internal members had voted unanimously for a cut of 35 basis points to support economic growth.


Besides, global cues, rupee trajectory, foreign fund flow, stock-specific action, and oil price movement would be on investors’ radar.


Now, let’s see what global markets indicate for Sensex and Nifty.


Asian shares edged higher on Thursday, taking cues from gains in the US stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan inched up 0.1%, Japan’s Nikkei added 0.4% and Australian shares 0.3%.


At 8:00 am, SGX Nifty, the Singaporean Exchange for Nifty Futures, was down 22 points, indicating a flat to negative start for domestic indices.


On Wednesday, the Sensex settled 0.72 per cent lower at 37,060 level, and the Nifty50 closed at the 10,919-mark, down 0.89 per cent.


The Rupee closed at 71.55, up 16 paise against the US dollar.


And, before we wrap, here’s a look at the top headlines that are likely to move markets–


>> The government, on Wednesday said, it has set no deadline to ban the production of petrol, diesel vehicles or for automobile manufacturers to switch to EVs


>> Government, on Saturday, is expected to hold meeting with economists to discuss economic slowdown.


At last, stock recommendation for the day by Tradebulls Securities–


The brokerage recommends selling Tata Steel at current levels. The stock is expected to drift lower till Rs 321 price confluence zone. Hence, the stock can be sold with stop above previous sessions high of Rs 358.

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Charticle: Where FPIs, MFs increased/decreased their stake in June quarter

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Investments


Equity markets witnessed some sharp upmove in the first half of the calendar year 2019 (CY19), first on the anticipation of the return of the Narendra Modi-led government to the power and then, hopes of desired reforms from the continuing government. The period did see benchmarks, S&P BSE Sensex and the Nifty50, touching their all-time highs of 40,312 and 12,103.05, respectively on June 4, 2019. However, the rally was short-lived as a couple of market unfriendly Budget proposals on July 5 triggered downward trajectory in the stocks.


That said, for the quarter ended June 30, 2019 (Q1FY20), the Nifty50 index has given a modest return of around 1.50 per cent while the S&P BSE Sensex of BSE has gained nearky 2 per cent. The S&P BSE 200 index has remained flat with just 0.38 per cent gain, ACE Equity data show.


During the period, overseas investors (FPIs) infused a total of Rs 31,700 crore in the equity market and FPI ownership in the BSE200 index increased to $444 billion in the June quarter from $433 billion in the March quarter, said a recent report by Kotak Securities.


Top sectors that witnessed FPI buying included financials, insurance, oil, gas and telecommunication services.


Among individual stocks, Gruh Finance, Mahindra Logistics and Godrej Properties saw substantial sequential increase in FPI holdings while they sold large stakes in YES Bank, Dish TV and DLF. Mutual Funds, on the other hand, increased their stake in Emami, Shriram Transport and Vodafone Idea and reduced stake in India Cements, Apollo Tyres and YES Bank, as per the report.


Here’s a look at the top five stocks and sectors where FPIs and MFs increased or decreased their stake in June quarter –

Top five companies where FPIs raised their stake include Gruh Finance, Mahindra Logistics, Godrej Properties, Shriram Transport and SBI Life Insurance while top firms where FPIs decreased their stake during the quarter under review include YES Bank, DishTV, DLF, Escorts, Indiabulls Housing.
Top five companies where MFs increased their holding were Emami, Shriram Transport, Vodafone Idea, BHEL and DCB Bank. On the flip side, they reduced their holding in companies such as India Cements, Apollo Tyres, YES Bank, Graphite India, PVR.



Sectoral ownership







Top five sectors which caught FPIs’ fancy were telecom, diversified financials, insurance, oil, gas & consumable fuels, electric utilities, capital goods. Information technology (IT) services, construction materials, banks, pharma, consumer durables are the top sectors that they were underweight on.



MFs’ bought Telecom, banks, pharma, consumer staples and construction materials during the said period whereas they lowered their investments in Oil, gas & Consumable fuels, Fertilizers and agriculture, Electric Utilities, Gas Utilities, IT services.

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