CNBC-TV18 Market Highlights: Sensex ends 164 points lower, Nifty below 12,100; auto, realty stocks fall

Thank you, readers! Here are the main highlights from today’s trading session##Thank you, readers! Here are the main highlights from today’s trading session

- Market Snaps 4-day Gaining Streak, Nifty Gives Up 12,100

- Nifty Gives Up 12,100 To End 50 Points Lower; Sensex 200 Points Lower

- Fall In ICICI Bank and Kotak Mahindra Drives Nifty Bank To End 100 Points Lower

- Among Sectoral Indices, Nifty Media and Nifty Pharma End With Most Gains Today

- 3 Out Of The Top 5 Nifty Losers Are Auto Stocks; Eicher Motors Down 3 Percent

- Voltas Ends 2 Percent Higher Despite Q3 Net Profit Coming In Lower-than-estimates

- Outperformance In Midcaps Keeps Advance-Decline Flat; Ratio At 1:1

Closing Bell: Sensex, Nifty snap 4 sessions of gains to end lower on Coronavirus scare##Closing Bell: Sensex, Nifty snap 4 sessions of gains to end lower on Coronavirus scare

Indian shares ended lower on Friday, snaping four sessions of gains, as rising concerns about the economic impact from a coronavirus epidemic led to a downturn in global sentiment. The weakness was in line with Asian peers, with MSCI’s broadest index of Asia-Pacific shares outside Japan dropping 0.7 percent, as the death toll from the coronavirus in China rose to 636.  The BSE Sensex ended 164 points lower at 41,142, while the NSE Nifty settled 40 points lower at 12,098.

However, broader markets outperformed benchmarks with Nifty Midcap up 0.6 percent and Nifty Smallcap flat. Zee, NTPC, Coal India, ONGC, and UPL were the top gainers on the Nifty50 index, while Eicher Motors, Tata Motors, IndusInd Bank, M&M, and Grasim led the losses.

Sectors were mixed for the day. Major selling was seen in bank, auto and realty indices, while buying in pharma, Metal and IT space capped losses. Nifty Realty lost 1.7 percent for the day, while Nifty Auto was down 1 percent. Nifty Bank and Nifty Fin Servcies were also lower by 0.4 percent on Friday. However, Nifty Pharma surged 1.3 percent and Nifty Metal advanced 0.6 percent. Nifty IT also addded 0.5 percent for the day.

The only stock from retail space to have risen 47% year-to-date##The only stock from retail space to have risen 47% year-to-date

Listed on February 2, 2013, this small-cap retailer witnessed a decline in its share price initially, up to four months. Soon after that, the stock surprised Dalal Street by racing and hitting record highs. The stock in the last 7 years has jumped 1,042 percent to its current market price on the back of store expansion and geographical spread. Meet V-Mart. The affordable multi-brand retailer has been steadily moving towards a big rally given its consistent earnings growth and stock price surge. On a year-to-date basis, the stock has already delivered returns of about 47 percent to its shareholders.

V-Mart's earnings have also been consistent, just like its surge in the share price. The stock reported net profit growth of 39 percent YoY at Rs 58.22 crore for the quarter ended December 31, 2019. Consolidated total income rose 20 percent YoY to Rs 562.58 crore. The company added 19 stores and closed 1 in the same quarter, totaling to 257 stores to date. READ MORE

Study finds that 60 BSE500 companies can distribute Rs 88,600 crore to shareholders##Study finds that 60 BSE500 companies can distribute Rs 88,600 crore to shareholders

ixty of the S&P BSE 500 companies can distribute around Rs 88,600 crore surplus cash to their shareholders via dividends and buyback, said a report by proxy advisory firm Institutional Investor Advisory Services India Ltd (IiAS). According to the ‘Dividend and Buy-back Study 2020’ based on FY19 financials, of these 60 companies, just five companies – Infosys, ITC, Wipro, Tata Consultancy Services and SBI Life Insurance - can give over Rs 46,300 crore as dividends.

Almost one-third of the 60 companies are Multinational Corporations (MNCs). In an interview to CNBCTV18, Hetal Dalal, COO of IiAS said that the number of companies they have identified have declined from 75 with excess cash of Rs 1,10,000 crore last year. “One of the reasons for this is a lot of the companies have done buybacks. Last year there were about 25 companies which did buybacks. One third of those were part of our report last year. Companies have paid out excess dividend and also profitability has slowed down. PSUs have invested in capital expenditure,” Dalal said. READ MORE

Credit Suisse CEO Tidjane Thiam resigns after spying scandal##Credit Suisse CEO Tidjane Thiam resigns after spying scandal

Credit Suisse CEO Tidjane Thiam is stepping down from his post and will be replaced by Thomas Gottstein, the current head of the bank’s Swiss unit. Thiam’s resignation follows a spying scandal. The board has unanimously accepted Thiam’s resignation, it said in a statement, after the announcements of the Swiss lender’s fourth-quarter and full-year earnings. Acknowledging Thiam's "enormous contrivution" to the bank, Chairman Urs Rohner said that the CEO will step down on February 14. Thiam has been with the bank since 2015.

“Under Tidjane’s leadership, Credit Suisse simultaneously repurposed our strategy, restored our capital, reduced our costs, de-risked our business, promoted diversity and engendered an exceptional level of co-operation between various divisions,” said Rohner. READ MORE

Auto Expo 2020: Scrappage policy will be cleared within a month, says Nitin Gadkari##Auto Expo 2020: Scrappage policy will be cleared within a month, says Nitin Gadkari

The long-awaited scrappage policy is in its final stages and will be cleared within a month, Nitin Gadkari, Minister for Road Transport, Highways and MSMEs said on the sidelines of the Federation of Automobile Dealers' Association's Auto Summit 2020 in Delhi.

"A few departments had queries on the scrappage policy which have now been completed. I expect the scrappage policy will be cleared in the next fifteen days to one month", he said.

Gadkari said that proper recycling of scrapped vehicles can bring down manufacturing costs for OEMs substantially. He added that once the policy gets Cabinet nod, the focus should be on effective recycling of metals such as copper and aluminium, extracted from scrapped vehicles, within the country, which will lead to cost savings for manufacturers.

The scrappage policy has been a long-standing demand of the auto sector. Although finance minister Nirmala Sitharaman did not have an announcement on the policy in her Budget on February 1, she said that the policy is in the works and will be announced outside of the budget.

Industry players have emphasized the need for a comprehensive, incentive-linked scrappage policy to trigger replacement demand and remove old, end-of-life vehicles from the roads.

Speaking on the impending transition to the Bharat Stage - VI emissions standards for the industry, Gadkari said that OEMs had a lot of reservation and resistance towards the April 1, 2020 deadline, but "I told them eventually it is do or die".

The industry now is sufficiently ready to successfully migrate to BSVI, Gadkari added.

Aurobindo Pharma's shares climb 8% despite flat December earnings##Aurobindo Pharma's shares climb 8% despite flat December earnings

The stock price of Aurobindo Pharma rallied over 8 percent intraday on Friday despite the pharma firm reported a fall of one percent in its net profit. 

The company reported net profit at Rs 705.3 crore in the quarter ended December 2019 as against Rs 712.2 crore in the same quarter last year. 

According to a filing with the bourses, revenues from operations during the quarter under review were up by nearly 12 percent to Rs 5,895 crore.

Formulation revenue for the quarter posted a growth of 17.4 percent YoY to Rs 5,104.9 crore and accounted for 86.6 percent of total revenues.

Here's a quick catchup post on what happened in the market so far##Here's a quick catchup post on what happened in the market so far

1. Indian market held on to the losses in the last hour of trade due to the selling pressure in the realty sector. 

2. At 1 pm, the Sensex was trading 162.46 points or 0.41 percent lower at 41,136.67 while the Nifty50 index was trading at 12,096.30, down 41.65 points or 0.34 percent. 

3. Among sectoral indices, Nifty Realty was the worst-performing index, down 1 .44 percent while the Nifty Media remained the best-performing index, up 1.22 percent. 

4. Zee Entertainment, NTPC, Hindalco, UPL and YES Bank were the Nifty50 top gainers while Eicher Motors, Tata Motors, IndusInd Bank, Reliance Industries and Mahindra & Mahindra remained the top losers. 

This stock doubled investor wealth in just 1 year. Should you still buy?##This stock doubled investor wealth in just 1 year. Should you still buy?

Dixon Technologies has given strong returns, doubling investor wealth in just 1 year. The stock has risen 112 percent in the last 1 year, rising from Rs 2,197 to Rs 4,664 per share.

Experts are bullish on the design-focused and solutions company that manufactures products in consumer durables, lighting, and mobile phone spaces.

The company, which listed on the bourses in September 2017, has rallied over 75 percent since then. Just in 2020, it has added 21 percent. It hit its 52-week high of Rs 4,899 on February 5, 2020, and a 52-week low of Rs 1,830.90 on August 8, 2019. The current market capitalisation of the company stands over Rs 5,250 crore.

Most brokerages expect the stock to cross Rs 5,00 per share in the near future. Axis Securities has a "buy" rating, with a 12-month target of Rs 5,116 for the stock.

Dixon is expanding capacities across segments based on strong order book from existing and new customers. Higher capacity utilization, new customer additions, and increased product offerings are expected to drive revenue and profit growth going forward, said the brokerage. Given the sharp run-up in the price of the stock in the recent past, it advises investors to buy the stock in a staggered manner.

December quarter results were strong for the company with the net sales rising 31 percent on a YoY basis, whereas the bottom line surged 54 percent. Consumer electronics, lighting, and mobile businesses of the company witnessed robust growth for the quarter.

The recent revision in customs duty on Printed Circuit Board (PCB) assembly from 10 percent to 20 percent in the Union Budget may also benefit the firm, analysts further noted.

Among peers as well, Dixon proved to be unbeatable. Stocks like TTK Prestige, Bajaj Electrical were in the red for the last 1 year, while Blue Star and Orient Electrical gave positive returns but not as much as Dixon.

Thank God it's Friday! Liquor stocks buzz in trade##Thank God it's Friday! Liquor stocks buzz in trade

Liquor stocks including GM Breweries, United Spirits and Globus Spirits were robust performers in Friday's trade, rallying up to 6 percent in intra-day deals.

GM Breweries advanced 6.3 percent, United Spirits rose 5.5 percent, Globus Spirits added 3.4 percent, and Radico Khaitan was up 3 percent.

Ahead of the budget, the commerce ministry had recommended restricting the purchase of tax-free alcohol to one bottle at duty-free shops as part of steps to reduce the import of non-essential goods. However, the government left the rules untouched.

Strong December-quarter results have helped the stocks stay positive. United Spirits reported a 35 percent increase in net profit for the quarter ended December, helped by premium portfolio, savings in operating costs and lower marketing reinvestment rate. The maker of McDowell whiskey and Romanov vodka posted a net profit of Rs 258.8 crore during the third quarter compared to Rs 192.4 crore a year ago.

Radico Khaitan also reported a 12.97 percent increase in its consolidated net profit for the quarter ended December at Rs 59.74 crore. During the third quarter of the fiscal year 2018-19, the company had reported a consolidated net profit of Rs 52.88 crore.

At 11:20 am, United Spirits was trading 4 percent higher, GM Breweries 2.2 percent, Globus Spirits 2 percent, and Radico Khaitan 1.7 percent. In comparison, the BSE Sensex was down 0.3 percent or 127 points at 41,178.