10:46 AM
Morgan Stanley on GDP data
GDP growth decelerated to 5.7% YoY in June 2017, a downside surprise to us and consensus. The primary and manufacturing sectors were the key drags, along with net external demand.
We continue to anticipate further acceleration in growth in the coming quarters and maintain our constructive view on the macro outlook. The economy has been affected by the idiosyncratic factors of the currency replacement program and implementation of GST, but these events are now in the rear view mirror.
Moreover, despite the impact of GST-related destocking on production, underlying demand has remained strong, as evident in the robust growth in discretionary consumption items such as two-wheeler sales.
The impact from GST should be transitory once the one-time adjustment to the new tax regime has been made. Hence, as the impact of these factors wears off, underlying economic growth should recover. The key risks to the outlook are the impact of weaker monsoon on agricultural output; the pace of NPL resolution, which would affect credit growth; and private capex and global trade conditions.
10:44 AM
Buzzing stock
Bajaj Auto gained 3% to Rs 2887 after the total sales of the auto major jumped 3% to 335,031 units in August 2017 compared to 325,347 units reported in the same month of last year. Total sales included domestic sales of 200,659 units and exports of 134,372 units in August 2017.
10:35 AM
Nikkei PMI for August
Up from July’s 101-month low of 47.9 to 51.2 in August, the Nikkei India Manufacturing Purchasing Managers’ Index signalled a renewed improvement in the health of the sector. The upturn reflected resumed growth of new orders, production and employment.
10:33 AM
RBI warns govt on farm loan waivers
Terming farm loan waivers a "quick-fix", the RBI again voiced its concern, saying they will lead to a lasting adverse impact on farm productivity. States including Uttar Pradesh and Maharashtra have announced farm loan waivers adding up to Rs 1.3 trillion or 0.8 per cent of GDP this fiscal.
READ FULL REPORT HERE10:24 AM
GDP forecast (Souce: CARE Ratings)
We expect growth for the year to be between 7.1-7.3% as against 7.6-7.8% earlier. This growth is premised on acceleration in the next three quarters
10:22 AM
F&O watch
There was significantly lower open interest rolled over to the next series, along with incremental short index futures positioning from FIIs. Nifty ended August series at 9,918 levels, snapping the winning streak of seven consecutive positive expiry gains, recording a loss of ~1.06% on (expiry-on-expiry) eoe basis. Private Banks showed discernible signs of fatigue, as was evident from Bank Nifty's under-performance which lost 2.49% eoe.
10:18 AM
Bank of America-Merrill Lynch (BofA-ML) on GDP data
We grow more confident of our December 6 25 basis point (bps) RBI rate cut call after lower-than-expected June quarter GVA growth of 5.6% (vs a still-anemic 6.2% consensus, 6.7% BAMLe) in new series and about 5% in old series. We cut our FY18 GVA growth forecast to 6.9% from 7.2% in new series and 5.7% from 6% in old series, well below our 7% old GDP potential.
Although inflation is turning up to 3.1% in August on rising tomato and onion prices and 4.6-4.9% in 1H18, it is still well within the RBI's 2-6% inflation target. Meanwhile, investment continued to slip to 27.5% of GDP in June 2017 from 29.2% in June 2016 with high lending rates curtailing demand and sustaining excess capacity. This supports our standing call that investors play consumption over investment
10:16 AM
Emkay Global on GDP data
We expect gradual recovery in H2FY18 on the back of higher government spending, continued remonetisation and stabilizing GST related dislocations. Investment activities are likely to remain muted in Q2-Q3FY18, as re-pricing of government contracts due to GST might lead to lower new order activity. Government revenue expenditure has been the primary growth driver in FY17; trend is likely to continue in FY18 as well
10:16 AM New kid on the block
Shares of Aditya Birla Capital, the newly formed financial services company of the Aditya Birla Group, got listed at Rs 250 on NSE and were trading 5% lower over its listing price. READ FULL REPORT
Kumar Mangalam Birla, chairman of Aditya Birla Group
10:14 AM
Nomura on GDP data
We see three insights. (1) Cash-intensive sectors have rebounded with remonetisation. (2) The pace of recovery was dampened by GST-related challenges in Q2, particularly for manufacturing. (3) The adverse impact of lower food prices on rural incomes is weighing on growth (agriculture value addition and rural consumption).
Overall, the data suggest that the growth profile remains uneven with still lacklustre industry/investment demand but steady services/consumption demand. Even as headline GDP data have disappointed, the turnaround in private services suggests that the growth cycle will head higher once the GST effects fade.
Looking ahead, the key question is how soon the economy will recover from the GST-led disruptions. While both the manufacturing and services PMI contracted in July, the future output index remained elevated. Nomura’s Composite Leading Index for India is also signaling a growth recovery in the coming quarters
9:59 AM Sectoral trend
All but two sectors were trading with gains
Source: NSE
9:42 AM
JP Associates up 3% on plans to raise Rs 2,000 crore
Debt-ridden Jaiprakash Associates gained over 3% to Rs 24 after the company said its proposed sale of entire 74% stake in Bhilai Jaypee Cement for an enterprise value of Rs 1,450 crore is expected to be concluded by year-end and plans to raise up to Rs2,000 crore through sale of securities.
9:36 AM
Nifty's earnings growth to take off from September quarter
Expect Nifty earnings growth to move to double digits from the September 2017 quarter onwards, foreign brokerage CLSA has said. The brokerage said the macroeconomic environment is improving as “disruptive forces” such as demonetisation, goods and services tax (GST) and bad loan recognition are fading.
READ DETAILS HERE9:30 AM DRL top Sensex gainer
Dr Reddy's Laboratories rallied over 7% to Rs 2167 after the drugmaker reached a settlement with nasdaq-listed Vivus Inc over a long-pending patent litigation related to weight management capsule Qsymia.
9:24 AM Top Sensex gainers and losers
Source: BSE
9:20 AM
Broader market
The BSE Midcap and the BSE Smallcap indices outperformed to gain 0.4% each.
9:19 AM Markets at open
At 9:18 am, the Sensex was trading at 31,723, down 6 points, while the broader Nifty50 was ruling at 9,913, down 4 points.
9:14 AM
GDP growth hits 3-year low
Economic growth plunged to 5.7 per cent in April-June of the current financial year (FY18), the lowest in the three-year rule of the Modi government due to demonetisation and destocking by companies following pre-goods and services tax (GST) jitters.
Gross value-added (GVA) grew by 5.6 per cent in April-June, the same rate as in January-March, according to the data released by the Central Statistics Office.
READ FULL REPORT9:12 AM
Pre-open trade
The Sensex was trading at 31,769, up 38 points, while the broader Nifty50 was ruling at 9,937, up 19 points in pre-open trade.
9:10 AM
Derivative Strategy by HDFC Securities
LIC Housing September Future – BUY
CMP – Rs 677
Stop loss - Rs 665
Target - Rs 695
9:07 AM
Technical calls
Buy CEAT with a target of Rs 1,860: Vaishali Parekh of Prabhudas Lilladher.
CLICK HERE FOR MORE9:06 AM
Devangshu Datta on Bank Nifty
9:04 AM
Technical calls
Chandan Taparia of Motilal Oswal Securities suggests a 'buy' on Maruti Suzuki, Escorts and LIC Housing Finance.
CLICK HERE FOR DETAILS9:02 AM
Rollovers and OI in Nifty lowest in CY 2017: Angel Broking
It was indeed a historical series for our market as the benchmark index registered a new lifetime high during initial part of August series. However, selling got attracted thereafter, which lead market correcting towards 9,700 mark; followed by a range-bound move for the later part of the series. August series had begun with lowest open interest in calendar year 2017, gradually we saw good amount of open interest addition, out of which majority of the positions formed were on short side.
On options front, 10,000 calls of September series has highest OI, suggesting strong hurdle placed near 9,950-10,000 levels. While, looking at the open interest concentration in puts, 9,700 seems to act as a base for September series as well.
9:00 AM
Rollovers to September series
Data showed market-wide rollover of positions stood at 78%, in line with the 78% average rollover seen in last three series. Nifty rollovers stood at 58%, which was far less than the average rollover of 72% seen in last three series.
8:56 AM Asian markets
Asian markets were trading higher. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%. Australian shares added 0.15%, while South Korea’s KOSPI gave back earlier gains to dip 0.2%. Japan’s Nikkei climbed 0.2%.
Chinese shares gained after the private Caixin manufacturing purchasing managers index showed the country’s August manufacturing activity expanded at the fastest pace in six months. Shanghai was up 0.4% and Hong Kong’s Hang Seng rose 0.3%.
8:55 AM Wall Street update
Wall Street shares closed higher overnight as investors responded to strong economic data and drew some cautious hope from the Trump administration’s latest promises for long-awaited details of a tax reform plan.
The Dow Jones Industrial Average rose 59.92 points, or 0.27% to 21,952, while the S&P500 index gained 13.94 points, or 0.57% to 2,471 and the Nasdaq Composite 60.35 points, or 0.95% to 6,428.
8:52 AM
Singapore Nifty
At 8:50 am, SGX Nifty, Nifty futures being traded on Singapore Stock Exchange was trading at 9,940, up 2 points or 0.02%.
8:51 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Fri, September 01 2017. 10:17 IST
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