Nifty, Sensex waiting for a trigger – Wednesday closing report

We had mentioned in Tuesday’s closing report that Nifty, Sensex were directionless. The major indices of the Indian stock markets suffered a correction on Wednesday and closed with losses over Tuesday’s close. On the NSE, there were 757 advances, 974 declines and 356 unchanged. The trends of the major indices in the course of Wednesday’s trading are given in the table below:

 

 
 
Hindalco Industries temporarily shut the operations of its alumina plant in Jharkhand after a spillage incident injured four people. The incident occurred in the red mud (bauxite residue) storage area connected to the alumina plant in Muri. It involved the spillage in the red mud cake storage area. In a regulatory filing on Wednesday, the company said: "As a precautionary measure, operations have been temporarily suspended to assess the situation."  According to the filing, preliminary investigations do not indicate any material impact on the surrounding environment or to property and efforts are ongoing to clear the spillage. Hindalco Industries shares closed at Rs211.60, down 2.56% on the NSE.
 
The Reserve Bank of India (RBI) may take more time to examine the Lakshmi Vilas Bank (LVB) and India Bulls Housing Finance Ltd (IHFL) merger deal, an official source said on Wednesday. "It (LVB-IHFL merger) may take time for examination," a source said, adding the central bank may seek more information also on the proposed merger after going through the proposals from the entities. An email sent to the RBI on the issue has not elicited any response so far. The All India Bank Employees' Association (AIBEA) had urged RBI Governor Shakthikanta Das not to allow the proposed merger of LVB with IHFL. The central bank should instead merge LVB with one of the public sector banks, AIBEA General Secretary C.H. Venkatachalam had said in a letter to the RBI Governor. RBI earlier said it is yet to approve Lakshmi Vilas Bank-IHFL merger. In a statement the RBI had noted that it would examine the proposal as per extant regulatory guidelines and directions. Last week, the board of Lakshmi Vilas Bank approved a scheme of amalgamation with the IHFL. Lakshmi Vilas Bank shares closed at Rs88.50, down 4.38% on the NSE. Indiabulls Housing Finance shares closed at Rs824.70, down 0.85% on the NSE.
 
Tata Motors said its global wholesales in March 2019, including Jaguar Land Rover declined by 5%, compared to March last year at 1,45,459. The global wholesales of all passenger vehicles in March 2019, were lower by 9% at 88,314, compared to March 2018, the company said in an exchange filing.  "Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in March 2019 were at 57,163 higher by 1%, over March 2018." Global wholesales for Jaguar Land Rover were 70,171 vehicles. Jaguar wholesales for the month were 20,985 vehicles, while Land Rover wholesales for the month were 49,186 vehicles. Tata Motors shares closed at Rs215.80, up 4.81% on the NSE.
 
Bharti Airtel on Wednesday announced it has selected Swedish telecommunications manufacturer Ericsson to expand its pan-India voice over LTE (VoLTE) services to offer HD-quality calling over 4G smartphones and smart watches. Airtel will deploy the Ericsson Cloud VoLTE solution to deliver VoLTE services onto a customer data centre. "We remain committed to building a future-ready network as part of our network transformation programme 'Project Leap' and deliver best-in-class digital experience to our smartphone customers," said Randeep Sekhon, CTO, Bharti Airtel. As part of "Project Leap", Airtel is offering innovative communication services. The Ericsson Cloud VoLTE solution enables high-definition voice (HD voice) and provides modern communication service experiences across many types of devices, over LTE, Wi-Fi, and future 5G access. According to the latest "Ericsson Mobility Report", India is expected to have more than 780 million VoLTE subscriptions by 2023. VoLTE technology will also be the foundation for enabling 5G voice calls on different types of 5G devices.
 
"We are delighted to support Airtel by delivering our Ericsson Cloud VoLTE solution. We start today with expanding HD voice over LTE services across India, which will establish a platform to easily introduce new innovative services in the future," informed Nunzio Mirtillo, Ericsson's Head of Market Area, South-East Asia, Oceania and India. Ericsson Cloud VoLTE is an industrialised solution to deliver VoLTE services onto a customer data centre Cloud. Bharti Airtel shares closed at Rs338.45, down 3.74% on the NSE.
 
The Central government on Tuesday made key management appointments to several public sector banks (PSBs). According to the Department of Personnel and Training (DoPT), the Appointments Committee of the Cabinet (ACC) approved the appointments following proposals from the Department of Financial Services, under the Union Ministry of Finance. The ACC approved the proposal for appointment of Karnam Sekar, MD and CEO, Dena Bank, as MD and CEO in Indian Overseas Bank "with effect from July 1, 2019 till his superannuation..." Similarly, Rajesh Kumar Yaduvanshi, Executive Director, Dena Bank, was appointed as Executive Director in Punjab National Bank with effect from April 1, 2019 till October 8, 2020. In a similar move, the ACC appointed R.A. Sankara Narayanan, MD and CEO, Vijaya Bank, as MD and CEO in Canara Bank with effect from "taking over charge of the post on or after April 1, 2019 till his superannuation..." Indian Overseas Bank shares closed at Rs14.85, with no change from previous close. Punjab National Bank shares closed at Rs93.30, down 1.11% on the NSE. 
 
Even as debt-ridden Jet Airways was served a legal notice from a section of its pilots, airline's CEO Vinay Dube on Tuesday said the company continues to work with lenders on the balance sheet restructuring plan and will inform the employees about the progress of the process by early next week. According to Dube, the company is trying to secure interim funding to sustain, and eventually increase its current level of operations. "Once we restore the much-needed network stability of the airline, our highest priority is to get more planes flying and to pay your salary arrears," Dube said in a communication to employees. "Support the bank-led balance sheet restructuring efforts to bring in fresh equity into the airline. This process has entered a new phase, with the lenders inviting Expressions of Interest (EOIs) this week. On Monday, lenders of the debt-ridden airline invited EoI for stake sale in the company to recover dues worth Rs8,000 crore. Jet Airways India shares closed at Rs262.25, down 1.93% on the NSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 

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Nifty, Sensex Directionless – Tuesday closing report

We had mentioned in Monday’s closing report that Nifty, Sensex were under pressure. The major indices of the Indian stock markets were range-bound on Tuesday and closed with gains over Monday’s close. On the NSE, there were 786 advances, 966 declines and 334 unchanged. The trends of the major indices in the course of Tuesday’s trading are given in the table below:

 

 
Indian equity and the currency market opened on a flat note on Tuesday as investors feared a further rise in crude oil prices owing to concerns over exports from the war-torn Libya. The oil prices were already on the rise over US sanctions in Iran and Venezuela which has curtailed global crude oil supply. Moreover, the OPEC-led production cut also pushed up the prices. The benchmark, Brent Crude surged over the $71 a barrel mark.
 
Except the export oriented IT (information technology) stocks, all other sectoral stocks on the NSE witnessed selling pressure. At close, the Sensex was up 238.69 points at 38939.22, while Nifty was up 67.50 points at 11,672.
 
On Monday, Foreign Institutional Investors (FIIs) bought stocks worth Rs329.60 crore while the Domestic Institutional Investors (DIIs) sold stocks worth Rs623.81 crore.
 
State-run State Bank of India (SBI) said on Tuesday that it has put non-performing assets (NPAs or bad loans) worth Rs423.67 crore on auction to recover unpaid dues. The accounts -- Kamachi Industries owes Rs364.80 crore and SNS Starch has Rs58.87 crore due - to SBI, the bank said. SBI shares closed at Rs314.60, up 0.58% on the NSE.
 
Ericsson India Private Limited will have to refund the entire amount of Rs550 crore it got from Reliance Communications Limited (RCom) if the stay placed by the National Company Law Appellate Tribunal (NCLAT) on May 30 last year is vacated by it, a two-judge bench led by Chairperson Justice S J Mukhopadhaya observed. "Why should one party get it and why should banks suffer? Why should the Indian economy suffer," the two-judge Bench observed, adding that it would either quash RCom’s bankruptcy proceedings in NCLT or allow bankruptcy case to proceed as per law. 
 
The appellate tribunal is hearing a plea moved by RCom in which the Anil Ambani led company has urged for the insolvency proceedings against it to be started as it was unable to repay its lenders. During the hearing on Monday, the NCLAT has asked the parties to file an affidavit stating whether they had challenged the NCLAT’s stay order of May on RCom’s insolvency in the Supreme Court. Reliance Communications shares closed at Rs3.05, down 4.69% on the NSE.
Brokerage firm Edelweiss on Tuesday downgraded the Jet Airways stock from 'hold' to 'reduce' owing to the mounting risk on the financially troubled airline. The report said that Jet may eventually lose 50 planes to lessors which would cut its fleet size down to 73 in the financial year 2020-2021. The brokerage firm also cut Jet's target price(TP) by 22% to Rs177 and also the full service carrier's earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) forecast by 35% for the current fiscal, and by 49% for the financial year 2020-2021. "We continue to assume a swerve back to profit during FY21E and a fair EV/EBITDAR of 7x. But given mounting risk, we are cutting the TP by 22% to Rs177 and downgrading the stock from 'HOLD' to 'REDUCE'. Jet Airways India shares closed at Rs265.20, up 0.36% on the NSE.
 
The Punjab National Bank (PNB)'s 13% stake sale in PNB Housing Finance for Rs18.5 billion will strengthen the bank's capital, said Moody's on Monday. The report said that it estimates the sale will increase PNB's Common Equity Tier 1 (CET1) ratio by about 40 basis points from the 6.9% reported in December 2018. PNB shares closed at Rs94.25, up 1.24% on the NSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 
 

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