Share Market HIGHLIGHTS: Sensex ends higher, Nifty at 11,118; Axis Bank, Bharti Airtel top losers

Shares of India’s private sector IT firm Tech Mahindra plunged on Wednesday, after the firm reported tepid Q1 results in the Apr-June period. Tech Mahindra shares slumped more than 5% to hit intra-day low of Rs 607.90 on BSE. Tech Mahindra has reported a 15.3% decline in its Q1FY20 net profit at Rs 959 crore against Rs 1,132.5 crore in the quarter ended June 2019. The firm’s revenue was down 2.7% at Rs 8,653 crore against Rs 8,892.3 crore and dollar revenue was down 1.6% at $1,247.1 million against $1,267.5 million in the previous quarter.

Read more: Tech Mahindra share price slumps after weak Q1 results; should you buy or sell stock?

Kishore Biyani-led Future Retail on Wednesday posted a 4.67 per cent rise in consolidated net profit at Rs 159.24 crore for the quarter ended June.
The company had reported a net profit of Rs 152.13 crore in the corresponding period year-ago. Total income during the April-June quarter of the current fiscal stood at Rs 5,206.46 crore, up 13.35 per cent as against Rs 4,593.12 crore in the year ago period, Future Retail said in a regulatory filing. Future Retail at present has a network of 1,557 stores in 437 cities across its brands including Big Bazaar, Easyday, WHSmith, fbb and ezone. (PTI)

"More caution" was the mantra of global fund managers in July, with recommended equity allocations cut to the lowest since early 2017 and suggested cash holdings increased to the highest in five months, a Reuters poll showed. With no respite from trade tariffs, fund managers remain worried about the global economy despite many major central banks shifting towards policy easing, which has pushed Wall Street stocks to record highs this month. (Reuters)

Apollo Tyres on Wednesday reported 43.77 per cent dip in consolidated net profit at Rs 141.6 crore for the June quarter of 2019-20. The company had posted a net profit of Rs 251.84 crore for the same period of previous fiscal. Total income rose marginally to Rs 4,358.78 crore during April-June 2019 as compared with Rs 4,328.6 crore in the year-ago period, Apollo Tyres said in a statement. "While the demand from automakers remained subdued, there was growth in the replacement market segment," Apollo Tyres Chairman Onkar S Kanwar said. (PTI)

Authorities in Southern India recovered the body of coffee baron V.G. Siddhartha floating in a river on Wednesday, two days after his disappearance sparked speculation that he was under intense financial strain. The recovery of Siddhartha's body unnerved investors in his flagship listed Coffee Day Enterprises Ltd and sent its shares plunging to an all-time low on Wednesday. (Reuters)

Crude oil futures rose 1 per cent to Rs 4,027 per barrel Wednesday as speculators raised their bets on hardening oil prices overseas. At the Multi Commodity Exchange, crude oil contracts for August delivery traded higher by Rs 40, or 1 per cent, at Rs 4,027 per barrel in 20,019 lots. Analysts said raising of bets by participants on a strong overseas trend, coupled with good domestic demand, kept crude prices higher at futures trade here. Globally, the US benchmark West Texas Intermediate crude strengthened 0.52 per cent to USD 58.35 per barrel, while Brent crude gained 0.63 per cent to USD 65.13 per barrel. (PTI)

Shares of Indian Oil Corp trade higher on Q1FY20 results. The company on Wednesday reported a 47.36 per cent year-on-year drop in its standalone profit at Rs 3,596.11 crore in Apr-Jun quarter.  

Sensex, Nifty trade higher in the latter part of trading session on Wednesday. Both the indices had opened lower in the morning tracking global cues. Currently, Axis Bank and Bharti Airtel are the leading losers on BSE.

Small-cap guru Porinju Veliyath, previously seen as Narendra Modi’s policies, has a message for the Prime Minister on India’s economic scenario. Narendra Modi must remain aware about the threatening signals in the economy as certain roadblocks are preventing the true picture from reaching him, the Kochi-based investor tweeted. However, he praised Modi for doing work for the country. “Dear @narendramodi Ji, As a supporter, I appreciate many right things you are doing to create a rule based society. You are the last hope for India! However, pls don’t ignore OMINOUS signs in the economy – fear/ respect/ yesmen are preventing the true picture from reaching you!,” Porinju Veliyath said on Twitter on Wednesday.

Read more: Porinju Veliyath’s message for PM Modi: Economy’s true picture not reaching you; these 3 are roadblocks

The stock has been trending higher in an upward sloping parallel channel. Currently, it is consolidating with a range of 400-450 i.e. a 50 points range. The consolidation is in the form of a broadening pattern which is a continuation pattern; hence the probability of a breakout on the upside is higher. So, we recommend buying it for the target of 475 and 500 with a stop loss of 398 on a closing basis. (Anand Rathi Shares and Stock Brokers)

The gross domestic product (GDP) growth may see a substantial cut if a recession hits the global economy, an analyst said. The growth rate is expected to fall by 100-125 bps in FY21 if there is a global recession, CNBC TV18 reported citing Indranil Sen Gupta of BofAML. The International Monetary Fund (IMF) has already lowered the GDP growth rate of India in its latest update.   IMF’s estimates are in sync with the projections of various other agencies whose estimates range between 6.6 and 7.5 per cent. The IMF follows Fitch, ADB and the RBI in slashing the earlier projection. All the institutions have commonly highlighted that both investment and consumption demand is currently low in India.

Read more: India’s GDP growth may fall by 1-1.25% in FY21; this analyst explains why

Following the demise of Cafe Coffee Day (CCD) founder VG Siddhartha, top business leaders including Rajiv Bajaj, Sachin Bansal, Kiran Mazumdar Shaw expressed their shock and grief and paid tributes. “Cafe Coffee Day Owner’s Body Found By River 2 Days After He Went Missing – My deepest condolences to ?VG Siddhartha’s widow Malavika and his sons and to Shri & Smt SM Krishna and family. RIP,” Kiran Mazumdar Shaw, Chairperson and Managing Director of Biocon said on twitter. Notably, VG Siddhartha’s body was found from the Nethravathi river in Mangalore, this morning, 36 hours after he went missing. 

Read more: VG Siddhartha dead: What Rajiv Bajaj, Sachin Bansal, Kiran Mazumdar Shaw said about CCD founder

Nifty media and Nifty Realty are trading the lowest, while Nifty Auto and Nifty bank are trading higher.

The Indian currency Rupee trades flat on Wednesday at 68.86 against the previous close of 68.86 a dollar.

Tech Mahindra shares fell nearly 5 per cent intraday and touched a 15-month low after the global brokerage firms reduced target price after the company posted weak earnings for June quarter.

Asian shares fell on Wednesday to a six-week trough, rattled by fresh trade war concerns following threats from President Donald Trump to Beijing, while increasing worries about a no-deal Brexit kept the pound under pressure. Later in the day, the U.S. Federal Reserve is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago. The expected easing has supported risk asset prices worldwide. (Reuters)

Gold prices were little changed on Wednesday as investors waited on the outcome of the Federal Reserve's meeting later in the day when policymakers are expected to cut interest rates for the first time since the financial crisis. Spot gold was mostly unchanged at $1,431.07 per ounce as of 0549 GMT. US gold futures edged 0.1% higher to $1,442.90 an ounce. "Most of the people are staying on the sidelines due to the Fed meeting. If the Fed does reduce rates, gold may come down a little as a 25 basis point cut is already priced-in," said Brian Lan, managing director at dealer GoldSilver Central in Singapore. (Reuters)

Sunil Mittal’s Bharti Airtel may be set to raise its tariffs by 5-10% in coming months in a bid to improve profit margins, a report said. The company is also looking to increase its Average Revenue Per User (ARPU) with the introduction of a minimum recharge plan priced at Rs 35, the Fitch Rating report said. “We forecast Bharti’s Indian ARPU to rise by 5%-10% in FY20 as the incumbents focus on boosting profitability with the introduction of a minimum recharge plan of Rs 35 per month,” said the report, adding that the company’s blended average tariff is also expected to rise during the financial year 2020. Financial Express Online has sent queries to the telecom operator for further comments.

Read more: Bharti Airtel may raise tariffs as soon as this year amid pressure to improve margins

Coffee Day Enterprises' shares are trading 20% lower on Wednesday, The company's founder VG Siddhartha had gone missing and his body was recovered today morning from Netravati river in Mangaluru.

Shares of private lender Axis Bank slumped 7 per cent after the bank posted Apr-Jun earnings. Axis Bank shares at 10:33 AM were seen trading at Rs 679.55 per share, nearly 4 per cent from the previous settlement. Axis Bank reported a 95 per cent rise in its Apr-Jun year-on-year as against Rs 701.09 crore in the same quarter of last year. However, despite the increase in quarterly profits, the lender’s asset quality witnessed marginal improvement. Axis Bank’s gross non-performing assets (NPAs) are almost steady at 5.25% of the loan book in Apr-Jun while its net NPAs stood at 2.04%. In view of Axis Bank’s quarterly results, ICICI Securities has maintained a BUY recommendation on its stock with a target price of Rs 865. Earlier, the brokerage firm had set a target price of Rs 931.

Read more:  https://www.financialexpress.com/market/axis-bank-shares-slump-7-on-q1fy20-results-should-you-buy-or-sell-stock/1661570/

Citigroup Inc.’s Mike Corbat is under the gun. While most shareholders appreciate what the CEO has done to cut costs and steady the ship, they now want him to narrow the bank’s gap in return on equity with JPMorgan Chase & Co. and Bank of America Corp. Few could quarrel with that. But selling the Asian retail business, as some have advocated, would defy common sense. That may be one of the suggestions of a dissident group of large investors, analysts and some bank insiders, according to a recent article in the Financial Times titled “Citigroup: pressure builds for strategic shift.” Corbat and the board should say a firm but polite “no.”

Read more: Citigroup shouldn’t ditch Asian consumers; Corbat, board must say firm but polite no

Indian IT companies contributed USD 57.2 billion to the GDP of the US in 2017, India’s top diplomat in the US said on Tuesday. Addressing business leaders in Denver, Colorado, India’s Ambassador to the US Harsh Vardhan Shringla said India-based global IT services companies employ more than 175,000 workers in the US accounting for 8.4 per cent of employment in the computer systems design and related services industry. In his address at the 2019 State International Development Organisation (SIDO) Conference on “US-India Trade and Investment: Opportunities and Best Practices,” Shringla said Indian IT companies in the US are deeply embedded in the roots of American society and their contributions have exceeded far beyond the economy.

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Debashish Chatterjee, who quit as the executive and vice president, global delivery of Cognizant in May, will join as a chief executive officer in Mindtree from August 1, CNBC TV18 reported quoting sources. Chatterjee will remain with Cognizant till July. He served the company for 23 years. The management of Larsen & Toubro had said they would announce the new CEO of Mindtree on August 1. Rostow Ravanan had resigned as CEO of Mindtree after L&T bought 60 per cent stake in the company. Post Mindtree’s merger with L&T, the company’s other promoters – executive chairman Krishnakumar Natarajan and chief operating officer NS Parthasarthy, also resigned from the board and as employees. However, they remain shareholders of the company. 

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Tata Motors on Tuesday said its shareholders have approved appointment of N Chandrasekaran as director on the company’s board. He is chairman of Tata Motors. In a regulatory filing, the company also said Nasser Munjee, Vinesh Kumar Jairath and Falguni Nayar have ceased as independent directors upon completion of their terms. Shareholders approve the appointment of Chandrasekaran with 98.65 per cent votes. He, however, said the automobile sector is such that a company cannot shut the cash tap as the very of this business demands continuous investment in product and technology development. 

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The headline indices Sensex and Nifty opened lower on Wednesday morning, tracking global cues. The Sensex is down 155 points to 37,241, while the Nifty is trading near the 11,000-mark. Axis Bank, Tech Mahindra shares are among the biggest losers, shedding more than 3% each. Heromotocorp, Bharti Airtel are among the major gainers, jumping more than 1% each. A look at LIVE Sensex heatmap. 

The government is working on a plan to merge state-run BSNL and MTNL as part of strategy to revive the ailing telecom companies. The Union Cabinet is expected to take a final call on the matter. According to sources, the merger plan is one of the many components of the revival package, which also includes reducing retirement age from 60 to 58, asset monetisation and allocation of 4G spectrum.  As per an official in the department of telecommunications (DoT), the merger is one of the many components of the overall revival plan as MTNL cannot stand by itself. It is yet to be decided if MTNL will be delisted from the stock exchanges and then merged or will it be just made a subsidiary of BSNL while it continues to be listed.

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The fate of the country’s financially stressed telecom industry is hanging in a precarious balance. The Supreme Court is shortly going to conclude the hearings on a case which is going since 2006 relating to the definition of adjusted gross revenue (AGR) and pronounce its judgment. If the operators lose the case, they may have to shell out a massive Rs 92,000 crore as outstanding licence fee. According to the department of telecommunication’s calculations, the AGR dues of the telecom operators, which includes incumbents like Bharti Airtel and Vodafone, as on July 7, 2019 stands at Rs 92,641 crore. This includes licence fee dues as raised by DoT, interest on the unpaid part, penalty, and interest on penalty.

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With an intent to strengthen the norms governing resolution professionals, the Insolvency and Bankruptcy Board India (IBBI), on July 23, 2019, has notified the amended Insolvency Professionals Regulations, and the Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations. The regulations are effective from July 23, 2019. The key amendments are discussed in detail as under. The amended norms provide that effective January 1, 2020, an insolvency professional (IP) shall have to obtain authorisation for assignment from the IPA before accepting or undertaking any assignment as interim resolution professional, resolution professional, liquidator, bankruptcy trustee, authorised representative or in any other role under the Insolvency and Bankruptcy Code (IBC), 2016. 

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The body of Cafe Coffee Day (CCD) owner VG Siddhartha has been found from the Nethravathi river in Mangaluru. The body was found on the banks of the river near the Hoige Bazaar, news agency ANI reported on Tuesday morning. Siddhartha was missing mysteriously since Monday night en route to Mangaluru in Karnataka. A letter was also found which claimed that he was under tremendous pressure from lenders. The body had washed ashore near Ullal and was fished out by local fishermen, following which police reached the spot.

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The United State is “working hard” with the Indian government to provide the country with opportunities to grow its economy as a part of the Trump Administration’s Indo-Pacific strategy, Secretary of State Mike Pompeo said Tuesday. “Our Indo-Pacific strategy is well on its way to bearing fruit for not only them but for the United States, and we have watched these coalitions build out. We’re working hard with the Indian government to provide them with opportunities to grow their economy as well,” Pompeo told reporters accompanying him on a tour to the Indo-pacific region, in response to a question.

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Asian shares weakened in early trade on Wednesday, rattled by fresh trade war concerns following threats from President Donald Trump to Beijing, while increasing worries about a no-deal Brexit kept the pound under pressure. Later in the day, the U.S. Federal Reserve is widely expected to cut interest rates for the first time since the financial crisis more than a decade ago. The expected easing has supported risk asset prices worldwide. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.04% while Japan’s Nikkei slid 0.84%. Major Wall Street stock averages ended slightly lower on Tuesday, with the S&P 500 losing 0.26%, after Trump warned China against waiting out his current presidential term before finalising a trade deal.

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This column usually tries to go behind the visibly deficient state of delivery of public services in our cities and discusses the possible solutions. Today, we spell out a challenge that may not be as visible as the burning landfills or flooded streets, but, in some ways, is even more important. This is the challenge of metropolitan planning, which has been sorely missing in our development strategy. This is a matter of grave concern as metropolitan regions are the engines of growth and gateways to the national and global economies. 

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The dollar held steady on Wednesday, largely in a wait-and-see mode as traders looked ahead to the outcome of the Federal Reserve’s meeting later in the day when policymakers are expected to cut interest rates for the first time since 2008. With markets predicting the Fed to reduce its key rate by 25 basis points, the main focus was on whether it would leave the door open for further policy easing in a bid to insulate the world’s largest economy from slowing global growth and the fallout of trade conflicts.

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