Sensex, Nifty off opening highs; IT stocks gain, PSU Bank index falls 1%

Punjab National Bank lost another 2 percent on top of 21 percent fall in previous two consecutive sessions. Gitanjali Gems tanked 19 percent on top of 20 percent correction in the previous session.

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Sensex, Nifty off opening highs; IT stocks gain, PSU Bank index falls 1%

 PNB fraud case Update: Union Bank of India clarified that it has nearly 17 percent exposure to the transaction fraud worth USD 1.8 billion (Rs 11,300 crore) detected by Punjab National Bank recently.

The bank said it through its foreign branches has been taking an exposure with Punjab National Bank as a counterparty under various letters of undertakings (LoU) issued through authenticated SWIFT message.

The bank has also purchased some buyers’ credit assets from Axis Bank through risk participation as a part of normal international business practice, it added.

“The outstanding exposure related to the incident is approximately USD 300 million and the bank is fully secured by LoU / LC / other documents,” Union Bank said.

The bank is fully confident to receive the payment, it added.

9:55 am Market Update: Benchmark indices continued to trade higher in morning, with the Sensex rising 134.45 points to 34,431.92 and the Nifty up 41.70 points at 10,587.20.

About 1,144 shares advanced against 838 declining shares on the BSE.

Technology stocks continued to support the market as TCS, Infosys and HCL Technologies gained 2 percent each.

L&T, ICICI Bank, Reliance Industries, HDFC Bank and ITC gained 0.3-0.6 percent whereas HDFC, SBI, Adani Ports, Axis Bank, HUL and Eicher Motors were under pressure.

9:45 am PC Jeweller comments after PNB fraud case: As its shares got hammered in the aftermath of India’s biggest bank fraud, PC Jeweller said the company does not use a letter of credit/letter of undertaking in business transactions and buys all diamonds from local markets on a cash basis only.

The BSE had sought clarifications from the company after its share prices slumped nearly 20 percent intraday to Rs 303 apiece in the previous session.

The share ended the day at Rs 356.40, down 5.31 percent. “The company does not use the instruments of LUT/LOC (Letter of Undertakings/ Letter of Credit) etc in its business transactions.

“The company does not have any international transactions in diamonds. It procures all its diamonds from local markets on a cash basis only,” PC Jeweller said in its regulatory filing.

It assured investors and shareholders that the fundamentals of the company remain strong and it continues to move ahead as per its laid down business plans.

9:35 am Buzzing: Share price of Indoco Remedies added 6.4 percent in the morning as it has received certification for its Goa plant.

The company received European GMP certification from Regulatory Authority of Hungary for its manufacturing facility for non-sterile products (Goa-plant III).

The EU GMP certification will enable the company to export medicinal products to all European countries. The granted GMP certification will also continue to support export of drug products to Canada, Australia, New Zealand and rest of the emerging territories as well, company said in a release.

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 Credit Suisse on Apollo Hospitals: Credit Suisse has upgraded the stock to Outperform from Neutral and raised target price to Rs 1,450 from Rs 1,075 per share.

Start-up losses at Navi Mumbai should reduce starting next quarter and stent pricing impact should moderate next year as company repriced insurance contracts, the researcher believes.

It feels EBITDA CAGR for FY18-20 should be strong at 20 percent versus 3 percent CAGR in past two years. FY18/19 EPS estimates cut 28/23 percent to factor in stent impact & higher AHLL losses.

9:15 am Market Check: Equity benchmarks extended previous day’s gains on last day of the week, with the Sensex, Nifty Bank, and Midcap indices rising around 150 points each, tracking positive global cues.

The 30-share BSE Sensex was up 149.65 points at 34,447.12 and the 50-share NSE Nifty rose 48.30 points to 10,593.80.

Punjab National Bank lost another 2 percent on top of 21 percent fall in previous two consecutive sessions. Gitanjali Gems tanked 19 percent on top of 20 percent correction in the previous session.

Nifty Midcap, as well as Nifty Bank indices, rallied 150 points each.

Fortis Healthcare gained 4 percent as the Supreme Court allowed the sale of pledged shares to lenders.

Indoco Remedies, Shriram EPC, Future Consumer, Apollo Hospitals, HOEC, KNR Construction, Vakrangee and 8K Miles Software were up 2-5 percent while Nalco was down 3 percent.

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