Markets: Sensex Ends Nearly 400 Points Lower As Budget Fails To Enthuse Investors; Nifty Closes Near 11,800

Indian equity benchmarks ended lower after the Finance Minister’s Nirmala Sitharaman Union Budget failed to impress investors.

The S&P BSE Sensex closed 395 points or 0.99 percent lower at 39,513 and the NSE Nifty 50 closed at 11,811.15, down 1.14 percent. The broader market index represented by the NSE Nifty 500 closed 1.22 percent lower.

The benchmarks indices trimmed their weekly returns after gains in Indiabulls Housing Finance Ltd. and IndusInd Bank Ltd. during the week were offset by losses in Yes Bank Ltd.and Sun Pharmaceutical Industries Ltd.

The market breadth was tilted in favour of sellers. About 1265 stocks declined and 476 shares advanced on National Stock Excahnge.

Eight out of 11 sectoral gauges compiled by NSE ended lower, led by the NSE Nifty Metal Index’s 3.7 percent fall. On the flipside, the NSE Nifty FMCG Index was the top sectoral gainer, up 0.28 percent.

The NSE Nifty Volatility Index fell 3.86 percent today after the Finance Minister Nirmala Sitharaman presented Union Budget.

Here’s how volatility index reacted on Budget days:

The red-carpet treatment given to foreign investors needs to be extended to local investors as well, according to Kotak AMC’s Nilesh Shah.

The finance minister said investment limit for foreign investors in listed securities will be harmonised with foreign direct investment limit in the relevant sector. There was also a proposal to merge NRI portfolio limits with FPI limits.

The free-float floor increase will help increase Indian equities’ weightage in MSCI indices, Shah said. While the bond market moves will allow more infra spend without crowding out private sector, he said.

According to S Naren of ICICI Asset Management Company, there was no room to consider any fiscal move to boost consumption as problems like the slowdown, excess realty leverage doesn’t go away overnight. He said the measures taken in the budget will help the bond market.

Meanwhile, here’s what FIIs made of the budget:

Defence stocks declined in today’s trade after the Centre proposed to exempt defence equipment imports from custom duty to encourage mordernisation of Indian armed forces.

“Defence has an immediate requirement of modernisation and upgradation. This is a national priority. For this purpose, import of defence equipment that is not being manufactured in India are being exempted from the basic customs duty,” Finance Minister Nirmala Sitharaman said today.

India’s plan to sell sovereign bonds overseas is most welcome as it will open up a new source of funding the budget deficit, says Harihar Krishnamoorthy, treasurer at FirstRand.

Once successfully established with investors, it will play a critical role in reducing the local government borrowing in rupee and alleviate the pressure on local liquidity, leaving more funds in the local market, he told Bloomberg.

Key Budget Numbers

• Net market borrowing pegged at Rs 4.73 lakh crore.
• Gross market borrowing at Rs 7.1 lakh crore
• Food subsidy at Rs 1.84 lakh crore versus Rs 1.71 lakh crore previous year
• Fertiliser subsidy at Rs 79,996 crore versus Rs 70,086
• Oil subsidy at 37, 478 crore versus Rs 24,833 crore
• Dividend/Surplus of RBI, PSU banks pegged at Rs 1.06 lakh crore
• Defense spending at Rs 3.05 lakh crore versus Rs 2.85 lakh crore
• Aims to buyback government bonds worth Rs 50,000 crore in FY20

Indian equity benchmarks traded lower, led by the declines in Tata Consultancy Services Ltd., Reliance Industries Ltd. and ITC Ltd.

The S&P BSE Sensex fell 340 points or 0.86 percent to 39,575 as of 1:40 p.m. and the NSE Nifty 50 traded below 11,850, down 0.72 percent.

In the bond market, the 10-year yield fell nearly 9 basis points to 6.62 percent. It fell nearly 19 basis points intraday.

The 10-year yield declined nearly 9 basis points to 6.62 percent. It fell nearly 19 basis points intraday.

Shares of the Cigarette Makers manufacturers declined in today’s trade, led by the fall in VST Industries Ltd.

The Centre plans to impose a nominal excise duty on tobacco products, Finance Minister Nirmala Sitharaman said while presenting the Budget in parliament.

The government envisages India to become a global manufacturing hub for electric vehicles. A proposal was announced to invite foreign firms to set up mega manufacturing plants. These plants will focus on making solar-storage batteries and setting up charging stations and allied infrastructure. The foreign firms will get tax exemptions under 35 AD of the Income Tax Act, said Sitharaman.

The Centre also pushed for reduction of Goods and Services Tax on EVs to be reduced to 5 percent from 12 percent.

Shares of the oil marketing companies witnessed a sharp fall.

This, after the Finance Minister Nirmala Sitharaman announced the increase of excise duty on petrol and diesel by rupee 1 per litre while presenting the Union Budget 2019.

The Indian rupee reversed losses to trade little changed at 68.51 against the U.S. dollar.

In the bond market, the 10-year yield fell 14 basis points to 6.74 percent.

Government pegged an enhanced target of raising Rs 1,05,000 crore for the year 2019-20. The government is also execute consolidation of PSUs in the non-financial space as well, said Sitharaman. "Strategic disinvestment of select central public sector enterprises to remain priority of this government."

Here’s how stocks are reacting:

• ONGC fell 3.7 percent to Rs 161.
• NTPC fell over 3 percent to Rs 139.10.
• Coal India declined as much as 2.4 percent to Rs 245.15.

Shares of the non-banking finance companies rallied after the government plans to

The RBI has limited regulatory authority over the NBFCs. The government plans to strengthen those powers, Sitharaman said.

The key highlights:

• NBFCs that are fundamentally sound continue getting funding by MFs, banks
• PSU banks to get limited credit guarantee for investment in high-rated NBFC
• NBFCs play an important role in sustaining consumption demand
• Propose to return regulatory authority over housing finance sector to RBI from NHB

India’s finance ministry will likely keep gross borrowings unchanged at a record Rs 7 lakh crore ($103 billion) for the fiscal year that started April 1, people with the knowledge of the proposal told Bloomberg.

Shares of the public sector banks rallied after the government announced Rs 70,000-crore recapitalisation in the current financial year.

The move is to revitalise lenders and further improve credit flow in the economy, Finance Minister Nirmala Sitharaman said.

“It is positive for public sector banks even though some of the banks have come out of PCA. However, the PSU banks need growth capital,” Bank of Baroda’s Executive Director AK Garg said.

“The regulatory capital issues are being resolved. They are also looking to providing requisite growth capital. Therefore, going forward, banks are in a position to start lending to the areas which are the government’s priority mainly SME and agriculture,” Garg told BloombergQuint.

The second phase of Pradhan Mantri Aawas Yojana will see construction of 1.95 crore houses by 2020-21, said Sitharaman. “Already over 1.5 crore rural home have been completed under the Housing For All scheme in five years.”

• Puravankara rose nearly 2.1 percent to Rs 72.95.
• Shree Cement gained as much as 1.3 percent to hit an all-time high at Rs 21,894.
• Somany Ceramics rose 1.1 percent to Rs 445.
• JSW Steel gained 1.3 percent to Rs 278.70.

The Indian rupee traded at day’s low against the U.S. dollar. The home currency depreciated as much as 0.37 percent to 68.77 against the greenback.

In the bond market, the 10-year yield fell nearly 2 basis points to 6.77 percent.

Indian equity benchmarks were trading at day’s low as Finance Minister presents Union Budget 2019.

The S&P BSE Sensex fell over 300 points from day’s high to 39,727 and the NSE Nifty 50 traded below 11,900, down 0.48 percent. The broader market index represented by the NSE Nifty 500 Index fell 0.5 percent.

Nine out of 11 sectoral gauges compiled by NSE traded lower, led by the NSE Nifty Metal Index’s 1.35 percent fall. On the flipside, the NSE Nifty FMCG Index was the top sectoral gainer, up 0.23 percent.

FM says India's FDI flows in 2018-19 remained strong compared to global markets at $54.2 billion, 6 percent higher than last year. The government will examine options of opening up FDI in media, animation and some other sectors to improve these flows further, she said.

• Propose to merge NRI portfolio route with FPI route.
• Propose to raise limit on FPI to be at par with FDI.
• To examine raising FDI caps in aviation, media, animation and insurance.
• FDI inflows in India have remained robust despite global headwinds.
• To allow FPIs to invest in listed securities of Rites, InVITs.
• Will ask SEBI to raise minimum public holding in listed equities to 35 percent from 25 percent.
• Government to allow AA-rated bonds to be used as collateral in tri-party repo market.

Shares of SpiceJet rose as much as 2.8 percent to Rs 126.95, while shares of InterGlobe Aviation rose as much as 1.5 percent to Rs 1,661.

Finance Minister Nirmala Sitharaman said that it is "critical" for India—the world's third largest domestic aviation sector to enter into aircraft financing and leasing activities from Indian shores. This would create jobs and make the sector self-reliant, said Sitharaman.

The government will implement the regulatory roadmap for making it a hub for such leasing-related activities.

Besides, Shares of GMR Infra rose as much as 6.3 percent to Rs 16.05.

Shares of roadmakers gained after the government plans to carry out comprehensive restructuring of highways programme.

Shares of IRB Infra rose as much as 2.9 percent to Rs 98.70, while shares of Ashoka Buildcon rose as much as 1.7 percent to Rs 148.15. Besides, shares of Dilip Buildcon rose as much as 2.9 percent to Rs 498.95.

FM says the economy has grown to $2.7 trillion from $1.85 trillion in 2014.

India is already the third-largest economy in the world behind the U.S. and China. Sitharaman said it is within the economy's capacity to reach $5 trillion in next few years.

Catch all the live updates on Union Budget here.

Indian equity benchmarks fluctuated between gains and losses as Finance Minister Nirmala Sitharaman started off her maiden budget speech acknowledging the decisive mandate given by India’s voters in the recently concluded elections.

The Sensex traded 0.1 percent or 30 points higher at 39,940 as of 11 a.m. while the NSE Nifty 50 traded little changed at 11,945. The broader market represented by the NSE Nifty 500 Index also erased gains and fell 0.1 percent.

The Union Cabinet has approved the Budget 2019. Finance Minister Nirmala Sitharaman will begin her budget speech in the Lok Sabha shortly.

Catch all the live updates on Union Budget here.

Shares of the branded-rice seller fell 10.2 percent to hit a six-month low at Rs 283.10.

The Enforcement Directorate said that it has attached the land and rice mill of KRBL at Sangrur, Punjab worth Rs 15.32 crore, under the Prevention of Money Laundering Act.

The stock traded 35 percent below the Bloomberg consensus one-year target price.

Shares of the country's largest carmaker erased opening gains to trade little changed at Rs 6,574.50.

The company's production for the month of June fell 15.6 percent to 1.11 lakh units year-on-year, according to its exchange fling. Also, its passenger vehicle segment declined close to 17 percent to 84,066 units, the filing added.

The stock fell 30 percent in the past 12 months compared with a 12 percent gain in the Nifty.

Shares of ITC fell nearly 1 percent intraday to Rs 275.20.

About 20 lakh shares of the company changed hands in a block deal on National Stock Exchange, Bloomberg data showed. Buyers and sellers were not known immediately.

The stock traded at 24 times its estimated earnings per share for the coming year, according to Bloomberg data.

The ongoing rally in the Nifty is expected to continue in today's trade till 12,100, said Shubham Agarwal, chief executive officer of Quantsapp.com. He also pegged the stop-loss at 11,910.

“The volatility is moving down ahead of the budget. This is indicating that the market expects some more upside on the Nifty. The historical volatility underlying of the 50-share gauge is quoting at a 10-month low which means the market sentiment is also neutral to positive,” Agarwal told BloombergQuint in an interaction.

Indian equity benchmarks erased gains ahead of the Union Budget, which will be presented at 11 a.m. by Finance Minister Nirmala Sitharaman.

The S&P BSE Sensex and the NSE Nifty 50 traded little changed at 39,916 and 11,938 respectively as of 10:25 a.m. The declines were led by ITC Ltd. and NTPC Ltd.

The broader market represented by the NSE Nifty 500 Index also erased gains and fell 0.1 percent.

Nifty’s 12,000 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 July 11 rose 0.8 percent to Rs 80.10. Over 10.54 lakh shares were added to the open interest which stood at over 23.19 lakh shares.

After meeting President Ram Nath Kovind at the Rashtrapati Bhavan, Finance Minister Nirmala Sitharaman has arrived at the Parliament to deliver her budget speech at 11:00 am.

Catch all the live updates on Union Budget here.

Indian equity benchmarks continued to hold gains ahead of the Union Budget which will be presented at 11 a.m. by Finance Minister Nirmala Sitharaman.

The S&P BSE Sensex rose 65 points or 0.17 percent higher to 39,974 as of 10:05 a.m. and the NSE Nifty 50 traded around 11,960, up 0.1 percent. The broader market represented by the NSE Nifty 500 Index rose 0.07 percent.

In the currency market, the Indian rupee depreciated as much as 0.28 percent to 68.69 against the U.S. dollar.

Shares of Yes Bank extended declines for the fourth consecutive trading session. The stock fell as much as 4.2 percent to Rs 92.25, their lowest levels since May 2014

The stock is set for its longest losing streak since April 8. The Relative Strength Index was below 30, indicating that the stock may be overbought, according to Bloomberg data.

The Mumbai-based lender traded at 5.5 times its estimated earnings per share for the coming year, according to Bloomberg data. The stock fell 14 percent in the past five days and declined 39 percent in the past 30 days.

Besides, Yes Bank bought a 9.47 percent stake in Eveready Industries after invoking 68.8 lakh pledged shares on July 3.

Shares of the liquor maker slumped 7.8 percent intraday to Rs 455, their lowest since October 2017 after the June quarter results.

Key Earnings Highlights (Q1, YoY)

• Revenue rose 7.4 percent to Rs 118.6 crore.
• Net profit declined 26.6 percent to Rs 16.3 crore.
• Ebitda declined 23.9 percent to Rs 25.8 crore.
• Margin at 21.8 percent versus 30.7 percent.

Shares of Westlife Development rose as much as 2.9 percent to Rs 315.05.

About three lakh shares or 1.9 percent equity changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Trading volume was 7,911 times its 20-day average, Bloomberg data showed. The stock traded at 69 times its estimated earnings per share for the coming year.

The government can use the budget platform to send strong messages among investors, said Pramod Gubbi, Founder, Marcellus Investment Managers.

Gubbi said ‘bold’ decisions such as reducing the cost of factors of production- land, labour and capital could be taken as the ruling government has a bigger mandate.

Here are the key highlights from the conversation:

On Markets:

• The government's decision could only set sentiments for the the markets to rally.
• On the budget's effect on economy- it's a "slow burn". Nothing done today can change the growth trajectory overnight. The effect will only be witnessed over next 1.5-5 years.
• Fixing the NBFC crisis is the only thing which can trigger a short term growth.

On Bank Recap:

• There is enough liquidity in the system, there is only a crisis of confidence in the business environment.
• Banks sitting on large cash surpluses are not extending to NBFCs on account of the fear.
• Recapitisation of state-owned banks alone won't revive their health- also the government needs to fix the governance issues and their incentive structures.
• Private banks are chugging away market share in the deposit space where public sector banks had dominated for decades.

Indian equity benchmarks extended gains for the fifth consecutive trading session ahead of the Union Budget which will be presented at 11 a.m. by Finance Minister Nirmala Sitharaman.

The benchmark indices are set for their longest gaining streak in nearly four months. The S&P BSE Sensex rose as much as 0.31 percent to 40,031.81 and the NSE Nifty 50 rose as much as 0.29 percent to 11,981. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.29 percent.

The market breadth was tilted in favour of buyers. About 880 stocks advanced and 590 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE traded higher, led by the NSE Nifty Realty Index’s 0.72 percent gain. On the flipside, the NSE Nifty Metal Index was the top sectoral loser, down 0.2 percent.

• Freightco India, a logistics company, files insolvency petition against Jain Irrigation’s subsidiary Jain Farm Fresh Food.
• Freightco India is an operational creditor of Jain Farm Fresh Food.
• Freightco India claims Jain Farm Fresh Food defaulted on Rs 1.04 crore; claims no payment made since November 2018.
• Jain Irrigation holds close to 82 percent stake in Jain Farm Fresh Food.

Source: IBC Petition

The Indian rupee opened lower against the U.S. dollar. The home currency depreciated as much as 0.1 percent to 68.58 against the greenback.

In the bond market, the 10-year yield rose marginally higher to 6.75 percent.

Indian equity benchmarks are set for a positive open ahead of the Union Budget presentation by Finance Minister Nirmala Sitharaman.

The S&P BSE Sensex rose 0.15 percent to 39,966.33 during the pre-market trade and the NSE Nifty rose 0.22 percent to 11,973.

In the currency market, the Indian rupee opened lower against the U.S. dollar, extended gains for the tenth consecutive trading session

Finance Minister Nirmala Sitharaman has reached the finance ministry at the Central Secretariat’s North Block. She left from her residence at 15, Safdarjung Road at about 8:45 am. She, along with her Budget 2019 team, will leave for the Rashtrapati Bhavan to meet President Ram Nath Kovind at 9:00 am and will reach the Parliament at about 10:00 am.

Catch all the live updates on Union Budget here.

The Nifty can test its all-time high today as Finance Minister Niramala Sitharaman is set to present the Union Budget, IIFL’s Senior Technical Analyst Hadrien Mendonca told BloombergQuint yesterday in an interaction.

However, Mendonca recommends investors to be cautious while taking positions.

July Futures

• Nifty futures closed at 11,979.6, premium at 33 points versus 32 points.
• Nifty futures open interest down 0.4 percent, sheds 68,000 shares in open interest.
• Bank Nifty futures closed at 31,548.2, premium of 76 points versus 113 points.
• Bank Nifty futures across series open interest up 7 percent, adds 1.1 lakh shares in open interest.

Options

• Nifty PCR at 1.48 versus 1.39 (across all series).

Nifty Weekly Expiry 11-July

• Max open interest on call side at 12,000 (12.6 lakh shares).
• Max open interest on put side at 11,800 (8.8 lakh shares).
• Open Interest addition seen in 12,000C (+5.7 lakh shares), 11,000P (+5.5 lakh shares), 11,800P (+4.4 lakh shares).

Nifty Monthly Expiry 25-July

• Max open interest on call side at 12,000 (16.6 lakh shares).
• Max open interest on put side at 11,500 (16.6 lakh shares).

Stocks In F&O Ban

In Ban:

• DHFL
• Reliance Capital

• Apcotex Industries record date for share split from Rs 5 to Rs 2.
• Star Cement, Sasken Technologies, Welspun Corp record date for share buyback.
• Madras Fertilizers to move into short term ASM Framework.
• V2 Retail, Vikas EcoTech to move out of short term ASM Framework.

India has a lot of room for higher fiscal deficit and to lower interest rates to spur economic growth.

That’s according to Mark Mobius, co-founder of Mobius Capital Partners, who expects India’s fiscal deficit to rise to as high as 5 percent of its gross domestic product. The deficit, he said, won’t deter foreign investments if the higher slippages are aimed at improving the country’s economic performance.

Read the full story and watch the full interaction here.

Catch all the live updates on Union Budget here.

• Sobha Q1 results operational update: New sales volume rose 11 percent to 1.06 million square feet, year-on-year. Total sales value increased 8 percent to Rs 611.8 crore. However, the average price realisation fell 8 percent to Rs 7,312 per square feet due to change in sales mix across various projects.
• Majesco statutory auditors Varma & Varma resigned from post with effect from July 3. MSKA & Associates were appointed as statutory auditors.
• Yes Bank acquired 9.47 percent Stake In Eveready Industries as the Bank invoked pledge of 68.8 lakh shares on July 3. This was due to the breach of terms of credit facilities sanctioned by the bank to the company’s arm Mcleod Russel.
• Spencer’s Retail completed the acquisition of 44.58 crore shares of Godrej Industries in Natures Basket. Now, the target company will become wholly owned arm of Spencer Retail.
• Pfizer received Maharashtra MIDC approval for business transfer to Vidhi for a consideration of Rs 178 crore.
• L&T Finance Holdings arm received $550 million in an External Commercial Borrowing investment round from World Bank’s arm, BNP Paribas, Citi Bank and DBS Bank.
• L&T Infotech clarified that the company is not subject to any enquiry by U.S. CIS and the company doesn’t comment on client specific matters which are in line with contractual obligations.
• Srei Infra Finance board approved consolidating the lending business of the company with its wholly owned arm Srei Equipment Finance into one entity since the focus for last four years has been on growing equipment financing and reducing the infrastructure loan portfolio, as stated in the company’s press release.
• Bharat Financial Inclusion board filed certified copy of NCLT order to Registrar of Companies on scheme of merger of the company with IndusInd Bank. The bank will issue its 639 equity shares for every 1,000 shares held in Bharat Financial Inclusion.
• ONGC’s foreign arm ONGC Videsh picked ANZ, Bank of India and Wetspac for refinancing a $500 million loan. (Bloomberg News)
• KRBL Enforcement Directorate attached under PMLA the land and rice mill company at Sangrur, Punjab worth Rs. 15.32 crores in kickback case of M/s Embraer SA, Brazil. (Twitter)
• Maruti Suzuki CCI ordered probe on the company after dealer complaint. The probe is on alleged anti-competitive conduct in implementing discount control policy on dealer. (CCI Press Release)
• GMR Group sold their entire stake of 47.62 percent in GMR Chhattisgarh Energy to Adani Power, according to its media statement. The group also stated that corporate guarantees worth Rs 892 crore furnished the group arms GMR Energy and GMR Power Corporation shall be released,
• Usha Martin said that they had completed the transfer of the operative iron-ore mine and coal mine under development to Tata Sponge Iron.
• Hindalco will have to tackle European antitrust objections on its plan to buy aluminum producer Aleris Corporation to expand as a supplier to the car industry. Novelis said the European Commission sent it a statement of objections to the proposed purchase. (Bloomberg News)

• Brent crude fell for the second consecutive trading session, down 0.14 percent.
• West Texas Intermediate crude fell 1 percent to $56.76 a barrel.
• Gold was little changed at $1,416.94 an ounce.

London Metal Exchange

• Copper ended higher for the second day, down 0.03 percent.
• Tin ended higher for the second consecutive trading session, up 0.22 percent.
• Zinc ended lower for the second consecutive trading session, down 0.98 percent.
• Aluminium ended higher for the second consecutive trading session, up 0.95 percent.
• Nickel resumed declines after a one-day rally, closed 0.08 percent lower.
• Lead halted a four-day decline, closed 0.03 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fluctuated between gains and losses to trade little changed at 11,979 as of 6:55 a.m. ahead of Union Budget 2019 that will be presented by Finance Minister Nirmala Sitharaman in Parliament today.

This will be Narendra Modi government's first Union Budget after the Prime Minister-led Bharatiya Janata Party returned to power for the second time time with a bigger mandate.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.