Indian shares, along with other emerging market indexes, have been hit hard by a global rout sparked in China.

Benchmark BSE index  rebounded after falling to its lowest since early June on Tuesday and was close to giving up its gains made since Narendra Modi was sworn in as prime minister, as global markets remained under pressure.

Indian shares, along with other emerging market indexes, have been hit hard by a global rout sparked in China.
The BSE index is down 17.1 per cent from a record high touched in early March and only about 1 to 1.5 percentage points away from the levels it was trading at in late May.

Modi swept into office promising rapid economic transformation but political differences and the ruling party’s minority position in the upper house have led to little progress on key reforms such as a pro-business land bill.
The BSE index was up 0.4 percent at 0950 India time (0420 GMT).

The broader 50-share NSE index was also up 0.4 percent, after earlier hitting its lowest since July 16, 2014

Maruti Suzuki shares will be in focus after reports suggested that stocks is expected to attract the attention of global passive funds in the next few months following the company’s decision to raise the FPI (or, Foreign Portfolio Investor) holding limit to 40%, from 24%.. (Reuters)

The BSE Sensex and NSE Nifty opened in positive terrain on Tuesday following mixed Asian cues. At 9.29 am, Sensex was up 64.54 points at 24,958.35. Similarly, Nifty was up 6.20 points at 7,565 during the same time.

The BSE Sensex on Monday declined below 25,000-mark for the first time in the past 15 month. The index closed 308.09 points down at 24,893.81. NSE Nifty slid 96.25 points down at 7,558.80.

Below are the stocks that are likely to be in focus today

Maruti Suzuki: Shares of the auto major will be in focus after reports suggested that stock is expected to attract the attention of global passive funds in the next few months following the company’s decision to raise the FPI (or, Foreign Portfolio Investor) holding limit to 40%, from 24%.

Reliance Infra: Anil Ambani-led Reliance Defence Ltd (RDL) has signed an MoU with Abu Dhabi Ship Building to set up a strategic partnership for construction of naval ships, including frigates and destroyers to address the demands of Gulf Cooperation Council (GCC), over the next 10 years.

ITC: The stocks of the company will be in focus as it clarified to reports ‘ITC may share its dealer network for a face’, calling it speculative in nature and the company has not taken any decision in this regard.

Dr Reddy’s Lab: Dr Reddys Laboratories on Monday said after market hours that it has voluntarily recalled a few batches of Amlodipine besylate and Atorvastatin from the US market in conformance with our quality assurance norms.

Sujana Towers: The stocks of the company will be in focus after media reports suggested that CCI has approved the proposed acquisition of the company’s tower business by Agarwal Steel Structures on a slump sale basis, saying the deal is not likely to have an adverse impact on competition.

Info Edge (India): The company after market hours announced on Monday that Zomato Media, which owns and operates an online food guide portal www.zomato.com, has signed definitive agreements to raise close to Rs 390 crore, led by Singapore investment company Temasek with participation from existing shareholder Vy Capital.

JSW Energy: The company is set to acquire Bina Thermal Power from Jaiprakash Power Ventures for Rs 3500 crore. The thermal power plant has installed capacity of 500 MW and have sufficient infrastructure to ramp it up to 1500 MW with marginal investment, reports added.

The BSE Sensex on Monday declined below 25,000-mark for the first time in the past 15 month. (Express Photo)

The BSE Sensex and NSE Nifty are likely to open in green on Tuesday tracking SGX Nifty and rest of Asian markets.

At 8.19 am (IST), SGX Nifty was up 49.50 points, or 0.65 per cent, at 7,610.50.

Asian stocks edged higher on Tuesday after a six-day losing streak and the dollar firmed against the safe-haven Japanese yen, but gains were muted ahead of Chinese data which could offer more clues on the health of its economy.

Hang Seng and Shanghai were up 0.66 per cent and 0.15 per cent at 20,719.92 and 3,085.05, respectively while Nikkei was down 0.76 per cent at 17,725.36.

Back home, the BSE Sensex on Monday declined below 25,000-mark for the first time in the past 15 month. The index closed 308.09 points down at 24,893.81. NSE Nifty slid 96.25 points down at 7,558.80.

Markets Today

According to Angel Broking, the trend deciding level for the day is 25,044 / 7,603 levels. If benchmark indices trade above this level during the first half-an-hour of trade then Sensex and Nifty may witness a further rally up to 25,237 – 25,580 / 7,661 – 7,762 levels. However, if Sensex and Nifty trades below 25,044 / 7,603 levels for the first half-an-hour of trade then it may correct towards 24,701 – 24,509 / 7,501 – 7,444 levels.

We lift Kotak to Buy as we think the recent 20% correction provides investors with a good entry into a high-quality bank. After the ING Vysya acquisition, investors’ expectations seemed high. However, we think Q1FY16 integration charges partially explain the lower acquisition cost and also set investors’ expectations on growth and asset quality lower.

We think Kotak’s earnings quality remains one of the best in the sector. Our target price of R750 implies 3.8x FY17F BVPS of R173.

Merger cost taken; synergies to follow Kotak upfronted R3 bn of ING-related integration charges (18% of ING Vysya’s net worth) explaining the lower 2.2x valuation on the merger. While in the next 1-2 quarters part of these charges should continue, we expect significant synergy benefits after that: 1) lower opex cost; 2) CASA uptick in ING’s book and 3) better quality growth in ING’s book. Combined ROAs should fall to 1.5% in FY16F from 1.9% in FY15 due to integration but ROAs to revert to ~2% by FY17F.

Earnings growth remains superior: The quality of Kotak’s CASA and fee growth remains superior with CASA accretion being more granular than peer banks and contribution of bulky IB and debt syndication being smaller. As well, our exposure analysis suggests that risk to Kotak’s asset quality is very low and with R10bn of provisions taken on ING’s book, we think risk to credit costs of the combined entity is also low.

With many banking stocks leading the recent market correction – Bankex has lost more than 15% since third week of July against a 12% correction in Sensex – they now trade at a steep discount to their book value.

PSU banks in particular have seen their valuations touch record lows even as their latest quarterly numbers continue to reflect the NPA stress faced by the pack.

Data compiled by FE shows that many PSU banks currently trade at 0.25 to 0.30 times their book value which in some cases are their lowest valuations in seven years.

On the back of close to 32% drop in the CNX PSU Bank index the price to book value ratio (PBV) of the index declined to its lowest since February 2013.

Bank of India, Indian Overseas bank(IOB) and Oriental bank of Commerce (OBC) which have fell more than 45% in 2015 so far, currently trade at their lowest PBV in seven years.