RIL, Bajaj Finance power 777-pt rally in Sensex; Nifty holds 17,200

 An alleviation rally in worldwide business sectors assisted the Indian values with snapping their two-day long string of failures. The S&P BSE Sensex flooded 777 focuses, or 1.37 percent, to end at 57,357 levels on Tuesday while the Nifty50 shut shop at 17,200, up 246 places or 1.45 percent.

Adani Ports, Bajaj Auto, legend MotoCorp, Power Grid, M&M, Titan, Tata Consumer Products, IndusInd Bank, Reliance Industries, and Bajaj Finance flooded between 3.5 percent and 5.8 percent. HDFC Life, Cipla, L&T, Divis Labs, Bharti Airtel, Britannia, HUL, Tata Motors, SBI, and Shree Cement, in the interim, mobilized as much as 2%.

Just ONGC, Apollo Hospitals, Axis Bank, Maruti Suzuki, Hindalco, Wipro, Asian Paints, and TCS finished losing money, down up to 2 percent.

In the more extensive business sectors, the BSE MidCap record added 1.6 percent and the BSE SmallCap added 0.7 percent. Sectorally, all the records finished in the green zone, drove by the Nifty Realty and Auto files, up 3.5 percent and 3 percent, individually....

RBI rate cut, government stimulus done. What are the markets eyeing now?

After the relief package by the government for the poor and the marginalized sections of society and a series of liquidity enhancing measure by the Reserve Bank of India (RBI) announced over the past few weeks, the central bank slashed rates by a 75 basis points (bps) – the most aggressive cut in the last 10 years. That apart, the RBI put a moratorium on all equated monthly installments (EMIs) on loans to ease the borrower’s pain.
On their part, the Indian markets which expected the authorities to roll out measures to stem the fall and stabilise sentiment after the over 35 per cent fall from the peak levels seen earlier this year triggered by the sudden and rampant spread of coronavirus (Covid-19) pandemic across the globe, witnessed profit booking. The S&P BSE Sensex slipped 1,310 points from the day’s high to close marginally negative on Friday post the RBI’s measures.
With these expected stimulus measures out of the way, will the markets continue on their journey south? What are the cues they will keep a tab on?
Over the next few weeks, analysts expect the markets to remain volatile and now track developments related to Covid-19 across the globe and how fast & successfully the governments are able to combat the pandemic. Back home, the 21 day lockdown imposed by the government and the possibility of an extension in the same will sway investor sentiment, they say.
As regards policies, most expect this to be an ongoing process – at least till the time the economy is up and running. They, however, caution that the government could run out of dry powder soon in its fight against Covid-19 given the fiscal situation and the fact that the Indian economy was already slowing down ahead of this pandemic.
“We expect coordinated fiscal and monetary easing to continue. We believe the next tranche of fiscal measures will address cash-flow challenges faced by SMEs and other hard-hit industries. Amid weak growth, we believe the government may temporarily suspend the FRBM legislation and the central government’s fiscal deficit is likely to rise to around 5 per cent of GDP in FY21 versus 3.5 per cent budgeted,” wrote Sonal Varma, managing director and chief India economist at Nomura in a co-authored report with Aurodeep Nandi.
They now expect a further 75 bps cut in repo rate in the second and the third quarter of 2020 (Q2-Q3/2020). On unconventional policies, they see more aggressive open market operations, further liquidity injections via targeted longer-term refinancing operations (TLTROs), including expanding its scope to target banks loans.
Those at BofA Securities, too, share a similar view and expect the RBI to remain aggressive as regards its policies. They expect the central bank to cut rates by 25bp each in June and October and peg the inflation rate at 2.5 per cent in the second half of financial year 2020-21 (H2FY21).

“We now see its 2020 rate cuts totaling 125bp up from 100bp. This, in turn, will take the RBI reverse repo rate to 3.5 per cent, close to 2009's 3.25 per cent low. We have cut down our FY21 growth forecast to 4 per cent,” wrote Indranil Sen Gupta, India economist at BofA Securities, in a co-authored report with Aastha Gudwani.

SBI Cards lists 12% below issue price of Rs 755; recovers later

Current Affairs
Portions of SBI Cards and Payment Services (SBI Cards) recorded at Rs 661, 12.45 percent beneath its issue cost of Rs 755 on the National Stock Exchange (NSE) on Monday. On the BSE, it opened at Rs 658, 13 percent lower against issue cost.
Be that as it may, at 10:09 am, the stock was exchanging at Rs 751, in the wake of hitting a high of Rs 754 on the BSE. A consolidated around 26 million offers have changed hands on the counter on both the trades up until now.
The stock saw a frail introduction because of winning economic situation as the vulnerability with respect with the impact of the coronavirus plague kept on holding financial specialist notion in line. The benchmark files Nifty50 and S&P BSE Sensex have declined 16.6 percent since the SBI Card starting open offer (IPO) opened for membership on March 2, 2020. The records have failed almost 21 percent, since the charge card arm of the State Bank of India (SBI) documented Draft Red Herring Prospectus (DRHP) for its IPO with Sebi on February 26.
Practically all financiers were certain on the underlying open offer (IPO) and some had anticipated up to 60 percent upside from the IPO value scope of Rs 750-755, given its prevailing situation in the Mastercard showcase and solid parentage, SBI Cards is very much set to profit by the rising pattern of advanced installments and internet business.

SBI Card's IPO had figured out how to pull in offers worth Rs 2 trillion, disregarding testing economic situations. The 100-million offer contribution created near 2.7 billion offers (multiple times). The certified institutional purchasers (QIBs) segment of the IPO was bought in multiple times, trailed by high networth individual (HNI) (multiple times) and investors (25.4 occasions). The representative fragment enrolled 4.7 occasions membership, while the retail partition being bought in 2.5 occasions...Read More

Auto stocks slide on report GST Council unlikely to back tax cut for sector

International News

Shares of automobile companies, including auto ancillary firms, traded lower on Wednesday on report that the goods and services tax (GST) panel is unlikely to approve lowering the tax for the sector this week, as a study has warned of major revenue losses.
According to this Reuters report, a government study, attached to the agenda of a September 20 GST panel meeting, has said the total annual revenue loss could be as much as Rs 50,000 crore ($6.95 billion), if the panel decided to lower tax rates for the auto sector to 18 per cent from 28 per cent.
Another report by The Economic Times said the government body blamed the current liquidity crisis and troubles of non-bank lenders for the woes of the automobile sector.
Meanwhile, state officials in Kerala, Punjab and West Bengal say they are also opposed to any cut in tax rates in the autos sector, or even consumer goods, because of lacklustre tax collections this fiscal year.
Consequently, the Nifty Auto index dipped nearly 1 per cent on Wednesday as compared to a flat benchmark index Nifty50. Among individual stocks, Hero MotoCorp, Escorts Limited, Tata Motors, and Bosch dipped in the range of 1-2 per cent. Maruti Suzuki India slip 2.3 per cent while Ashok Leyland was down as much as 4.2 per cent on the National Stock Exchange (NSE).
The automobile industry has been facing challenges since past three quarters in terms of additional burden of new insurance policy, constraints on loan disbursement from financial institutions and higher axle load norm impacting commercial vehicle (CV) sales, say experts.

 The sector has pushed for a lowering of tax rates at the September 20 GST panel meeting, in a bid to revive vehicle demand.

Wipro Q4 net profit rises 38%, announces Rs 10,500-crore share buyback

Company News

Wipro has largely met the Street estimates on the revenue and profit fronts for the fourth quarter of 2018-19, though the revenue growth reported by the country's third-largest IT services firm was the lowest among the top three players in the last financial year.

The company, however, gave a tepid outlook for the first quarter of FY20, citing delays in starting out new projects. The firm also announced a mega buyback plan of Rs 10,500 crore at Rs 325 a share, making it the second such repurchase consecutively.

The buyback price is 15.4 per cent higher than Tuesday's closing price on the NSE.

For the fourth quarter of the last fiscal year, Wipro on Tuesday reported a consolidated net profit of Rs 2,483.5 crore, a rise of 37.7 per cent over the year-ago period.

Sequentially, it declined one per cent. For the whole fiscal, net profit was Rs 9,000 crore, a growth of 12.4 per cent on a year-on-year (YoY) basis. Gross revenues of Wipro in Q4 rose 9 per cent YoY to Rs 15,006 crore.

For the whole fiscal year, revenues stood at Rs 58,584 crore, up 7.5 per cent on a YoY basis. Unlike its two other larger peers, Wipro showed a marked improvement in its operating margin, which improved 440 basis points YoY to reach 19 per cent in the January-March quarter. The margin improvement was aided by the divestment of low margin business.


 Wipro’s IT services revenue, which accounts for more than 95 per cent of its gross revenues now, was $2.075 billion for the January-March period of FY19. "We have executed strongly in the fourth quarter with focus on quality of revenue. We see the demand environment as stable with strong deal pipeline," said Abidali Neemuchwala, CEO at Wipro...Read More