Equities in India weakened further, as Asia peers sank a three-month low after Germany’s financial regulator BaFin banned naked short-selling in government bonds and concerns over EU deficit saw shares of financial services’ companies drop.
At 10:30 am, the Sensex was trading at 16,674.74, down 201.02 points or 1.26 per cent wiping out Tuesday’s gains. The Bombay Stock Exchange’s sensitive index had opened gap-down at 16,802.39 against the previous close of 16,875.76. The 30-share index has touched a low of 16,641.37 in trade so far.
National Stock Exchange’s Nifty was at 5002, lower by 64.20 points or 1.27 per cent. The 50-share index opened the day at 5065.10 versus Tuesday’s close of 5066.20. The benchmark has so far seen a low of 4994.65.
“Indian markets are likely to remain weak and volatile throughout the session. 4980 on Nifty, a 200-day DMA is a crucial support, which the market has managed to hold since the last few sessions. Hence, a break below that level could lead to further sell off during the day. Among the sectoral indices, Metals, Auto & Banks are looking weak & could underperform,” an HDFC Securities report said.
Banking, metals and realty continued to languish, while IT stocks bounced back to trade in the positive territory on gains in Infosys. BSE Bankex was down 2.05 per cent, BSE Metal Index lower by 1.78 per cent, and BSE Realty Index weaker by 1.68 per cent.
The biggest losers among the 50 Nifty stocks were ICICI Bank, which was down 4.35 per cent at Rs 850.50. The boards of ICICI Bank and Bank of Rajasthan (BoR), a private sector bank with 463 branches and assets of around Rs 172 billion, have given in-principle approval for a merger.
Anand Rathi has retained buy on ICICI Bank with the target price at Rs 1,140, based on sum-of-parts valuation. It values the subsidiaries at Rs 224. The brokerage believes this transaction to be value accretive for ICICI as it would expand its existing branch network by 27 per cent, and strengthen its presence in north India.
If approved, the proposed share swap (25 shares of ICICI Bank for 118 shares of BoR) could lead to a dilution of 3.1 per cent for ICICI Bank. This implies Rs 188 per share for BoR and valuations of 2.9x PBV, 5.5x PABV (9M10), which are not cheap. Yet, at Rs 65.9 million per branch, the deal is reasonable, at a 9 per cent premium to that of old private sector peers, the brokerage said in a report.
The other big losers were Idea Cellular weaker by 4.04 per cent, Motors (-3.06%), Sterlite Industries (2.89%), Unitech, Bharti Airtel, Cairn India, Jindal Steel, DLF, Reliance Communications.
Nifty gainers comprised Reliance Infrastructure (1.58%), Reliance Power (1.02%), Infosys (0.56%), Hero Honda Motors, Cipla, ACC, and NTPC.
On the markets, Anand Rathi Securities has a cautious view for the very short term and sees support for Nifty around 4950 levels. “Reversal of the short term negative trend could be seen above 5200 levels. If Nifty closes above 5200 levels then we may see further buying interest at higher levels to touch the 5400 levels,” said the brokerage, advising stock specific action.
National Stock Exchange’s Nifty was at 5002, lower by 64.20 points or 1.27 per cent. The 50-share index opened the day at 5065.10 versus Tuesday’s close of 5066.20. The benchmark has so far seen a low of 4994.65.
“Indian markets are likely to remain weak and volatile throughout the session. 4980 on Nifty, a 200-day DMA is a crucial support, which the market has managed to hold since the last few sessions. Hence, a break below that level could lead to further sell off during the day. Among the sectoral indices, Metals, Auto & Banks are looking weak & could underperform,” an HDFC Securities report said.
Banking, metals and realty continued to languish, while IT stocks bounced back to trade in the positive territory on gains in Infosys. BSE Bankex was down 2.05 per cent, BSE Metal Index lower by 1.78 per cent, and BSE Realty Index weaker by 1.68 per cent.
The biggest losers among the 50 Nifty stocks were ICICI Bank, which was down 4.35 per cent at Rs 850.50. The boards of ICICI Bank and Bank of Rajasthan (BoR), a private sector bank with 463 branches and assets of around Rs 172 billion, have given in-principle approval for a merger.
Anand Rathi has retained buy on ICICI Bank with the target price at Rs 1,140, based on sum-of-parts valuation. It values the subsidiaries at Rs 224. The brokerage believes this transaction to be value accretive for ICICI as it would expand its existing branch network by 27 per cent, and strengthen its presence in north India.
If approved, the proposed share swap (25 shares of ICICI Bank for 118 shares of BoR) could lead to a dilution of 3.1 per cent for ICICI Bank. This implies Rs 188 per share for BoR and valuations of 2.9x PBV, 5.5x PABV (9M10), which are not cheap. Yet, at Rs 65.9 million per branch, the deal is reasonable, at a 9 per cent premium to that of old private sector peers, the brokerage said in a report.
The other big losers were Idea Cellular weaker by 4.04 per cent, Motors (-3.06%), Sterlite Industries (2.89%), Unitech, Bharti Airtel, Cairn India, Jindal Steel, DLF, Reliance Communications.
Nifty gainers comprised Reliance Infrastructure (1.58%), Reliance Power (1.02%), Infosys (0.56%), Hero Honda Motors, Cipla, ACC, and NTPC.
On the markets, Anand Rathi Securities has a cautious view for the very short term and sees support for Nifty around 4950 levels. “Reversal of the short term negative trend could be seen above 5200 levels. If Nifty closes above 5200 levels then we may see further buying interest at higher levels to touch the 5400 levels,” said the brokerage, advising stock specific action.
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