A breakout on either side of the band will give a clear indication of the further trend

The Nifty witnessed a V-shaped reversal rally but the gains were capped at 11,150 levels on August 28. On the lower side, as per the change of polarity principle, the short-term moving average -- 20-day EMA -- for the index is currently working as a key reversal point.

Last hour buying on August 28 pushed the price above its important physiological mark of 11,000, which has squeezed the body of the candle with a slightly longer wick on its lower side.

The level of 11,150 is further supported by the Fibonacci ratio on the daily interval for the benchmark index. Currently, the Nifty pack is trading between its 50 (11,200) and 100-EMA (10,800) band on the weekly timeline.

On the Options front, maximum Put open interest (OI) is placed at 11,000 strike. The maximum change in Call OI is seen at 11,100, followed by 11,200 strikes.

The next immediate support for the Nifty is placed at 10,800 levels, while resistance is observed at 11,200 levels. Now, a breakout on either side of the band will give a clear indication of the further trend.

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An interest payment default of Rs 9.42 crore occurred on secured NCDs (5 years tenure) and of Rs 4.71 crore on 10 years NCDs, the company said

After three successive sessions of gains, shares of Dewan Housing Finance Corporation (DHFL) tumbled 5 percent on BSE on August 28, a day after the company said it defaulted to the tune of Rs 14.13 crore towards interest payments on bonds.

An interest payment default of Rs 9.42 crore occurred on secured NCDs (5-year tenure) and of Rs 4.71 crore on 10-year NCDs, the company said in a regulatory filing.

Separately, the housing finance company said it planned to raise funds through equity share sale or other means as part of the debt resolution plan.

The company's board will to meet on August 30, when the proposal would be tabled, the firm said in another regulatory filing.

The fund mop-up can also be through any other permissible mode or a combination of prospectus or placement document or letter of offer or any other permissible offer, it added.

Shares of DHFL were trading 1.96 percent down at Rs 47.50 at 1115 IST.

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Global brokerage HSBC upgraded stock to buyShares of Bharat Heavy Electricals (BHEL) rallied 10 percent intraday on August 27 after it won orders worth Rs 2,500 crore

"Valued at around Rs 2,500 crore, the orders have been placed on BHEL by NTPC," the company said, adding the orders involve supply and installation of flue gas desulphurization (FGD) systems for 13 coal-based units at 2,600 MW Korba STPS Stage I, II & Ill in Chhattisgarh and 2,100 MW Ramagundam STPS Stage I & II in Telangana.

The stock was quoting at Rs 54.65, up to Rs 4.70, or 9.41 percent on the BSE at 1005 hours IST.

Global brokerage HSBC upgraded stock to buy. It sees near-term weakness in business fundamentals of state-owned power equipment maker BHEL, but it upgraded the stock to buy due to steep correction, and balance sheet strength and long-term growth potential.

However, the global brokerage house slashed price target to Rs 60 from Rs 62 per share after lowering earnings estimate by 1-5 percent on lowered order inflow expectations.

"Downside risks include a continued increase in receivables & lower margins," it said.

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Selling life insurance has never been easy, but getting investors to buy their stocks is becoming all too easy for life insurers. A booming business and a growing market share have led to big gains for the three listed life insurance companies in India

Shares of HDFC Life Insurance Co. Ltd and SBI Life Insurance Co. Ltd has surged 33.59% and 37.37%, respectively, so far this year. Even ICICI Prudential Life Insurance Co. Ltd hasn’t fared badly, with returns of 19.14%, although its growth in the past two quarters has been wanting. In comparison, the Nifty Financial Services index has risen about 4.27% in 2019.

There are several factors that seem to have worked for life insurance companies. But, Nomura Financial Advisory and Securities (India) Pvt. Ltd highlighted the main reason.

“Private insurers (excluding ICICI Prudential Life) continue to deliver robust growth in spite of volatile markets; this, coupled with increasing protection share in the business mix, justifies the re-rating in the last four months, in our view," it said in a note to clients.

In the first four months of FY20, private sector insurers saw 23% new business growth in retail, in terms of annualized premium equivalent, even as the overall industry growth was 15%, primarily due to Life Insurance Corporation of India’s (LIC’s) 5.5% growth.

This growth was led by non-participatory and annuity products.

Aggressive marketing of term plans in the past two years has helped HDFC Life and even its peer's corner market share from the country’s largest life insurer, LIC.

“Shrinking profitability of the linked business has made it a mere revenue driver, edging players to move towards non-linked products (protection, annuities and return-guarantee) for profitability," said Jefferies India Pvt. Ltd in a note.

The growth in retail insurance sales of non-participatory products has made the portfolio of life insurers more stable and increased margins.

Life insurance stocks are likely to continue to enjoy investor attention over the next few quarters, too, though analysts warned that the profitability metrics may have peaked for some firms.

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Market downgrades have been dogging rating agency scrips. In the past year, the CARE Ratings Ltd stock tumbled 59%, while Icra Ltd and Crisil Ltd slid 29% each. Comparatively, the Nifty 500 index slipped only 11%. What lies ahead for these stocks

Lately, negative news has dominated the credit rating business, with the top management of two rating agencies asked to step down. Agencies may also need to separate their rating and non-rating businesses.

“While business momentum has been improving, the absence of top management in two large CRAs (credit rating agencies) and the reports of an unbiased rating for IL&FS are negative, in our view. The third CRA might have to comply with the regulations to separate rating and non-rating businesses, affecting stock performances," said Elara Securities (India) Pvt. Ltd in a note to clients.

To top it all, in the bread-and-butter rating segment, growth has slowed to a crawl. Crisil’s rating division grew 2% year-on-year due to a drop in bank-loan ratings and fewer corporate-bond issuances. Icra’s rating revenues dropped 8%, while CARE Ratings’ fell 21%.

Much of the tight liquidity conditions and sluggish issuances may continue to persist. For credit rating agencies, this poses significant challenges. “Bank credit contracted 1.3% in Q1 FY20 as headwinds blasting NBFCs since end-Q2 FY19 impacted the number of bank-loan ratings. The quarter also saw fewer bond issuances, both corporate and financial. Further, ICRA seems to have lost share in the corporate-bond market after a default by a client," said Edelweiss Securities Ltd in a note to clients.

Meanwhile, securitization, which was growing lately, too is slowing. A double whammy to the rating business comes from corporate bodies shying away from incurring significant capital expenditure. Rating revenues could continue to grow marginally.

Additionally, credit rating agencies have been hit by regulatory costs and higher operating expenses that will weigh on operating margins going ahead.

Ostensibly, much hinges on credit offtake reviving. Thankfully, contracting interest rates could spur credit offtake later. But until then, these stocks may take time to see the light at the end of the tunnel.

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India's Reliance Industries is seeking a liquefied natural gas (LNG) cargo for delivery in October, two industry sources said on Friday

The refiner is seeking the cargo on a delivered ex-ship (DES) basis for delivery over Oct. 5 to 14 into Hazira, one of the sources said.

The tender closed on Thursday and it was not immediately clear if it had been awarded.

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Indian shares fell on Thursday as investors fretted over the chances of a fiscal stimulus and anxiously awaited the U.S. Federal Reserve chairman's speech later this week for clues on future rate cuts

Real estate stocks were among the top losers, with the Nifty real estate index shedding 7.2%, its biggest intra-day dip since late 2016, as DLF Ltd slumped 19.6%.

A report in the Hindu BusinessLine newspaper said https://www.thehindubusinessline.com/companies/supreme-court-issues-notice-to-dlf-sebi-on-non-disclosure-of-key-information-in-qip/article29204691.ece the Supreme Court had issued a notice to the real estate developer for allegedly suppressing material information from shareholders.

The broader NSE Nifty was down 0.42% at 10,873.00 as of 0445 GMT, while the benchmark BSE Sensex was lower by 0.34% at 36,933.80.

The minutes of the Fed's July meeting showed policymakers deeply divided over rate cuts, while hopes for a fiscal stimulus dimmed as President Donald Trump said he was not looking at cutting payroll taxes.

Much now depends on how dovish Fed Chair Jerome Powell chooses to be in his speech on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.35%. [MKTS/GLOB]

Meanwhile, markets awaited news on an economic stimulus from the Indian government amid a bruising slowdown that has hammered industries including the crucial automotive sector, leading to production cuts and job losses.

"The disappointment factor is increasing day by day because we've not heard anything from the government," said Rusmik Oza, head of fundamental research at Kotak Securities in Mumbai. "Earnings have also been a big disappointment."

June-quarter net profits for India Inc grew at a moderate pace of 6.6% year-over-year, compared with 24.6% a year earlier, CARE Ratings said on Wednesday, based on an analysis of 2,976 companies.

The Nifty metals index fell 2.13%, with miner Vedanta Ltd declining 3.9%.

The Nifty FMCG index, which tracks manufacturers of fast-moving consumer goods, was the lone gainer with a rise of 1.17%.

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Global software major Infosys on Wednesday expanded its partnership with Google Cloud to help its clients accelerate their digital transformation

"As a qualified Google Cloud managed service provider, we will offer clients application lifecycle services with cloud and data analytics expertise," said the city-based IT firm in a statement here.

The partnership with the global search engine will enable the software vendor to offer consulting, assessment, migration and support services to enterprises for optimising their workloads on the Google Cloud Platform.

"We will offer industry-specific solutions on the Google platform for healthcare, financial services, insurance, telecom and retail industries," the outsourcing firm said.

The partnership also strengthens the vendor's capabilities to help companies innovate and industrialise analytics, drive accelerated insights for new revenue models, realise savings and achieve faster time to market.

Other services offered are data cafe, an enterprise portal for data exploration, and cognitive conversational inter-faces for contextual interactions.

Services include data marketplace for managing data as an asset, data governance and data operations across hybrid platforms.

"As Cloud has been a focus area for us, we invest in new solutions, partnerships and offerings to enable our clients to navigate their digital transformation journeys," said Infosys Vice-President David Wilson in the statement.

Enterprises will benefit from Google Cloud's secure platform and Infosys' expertise in data, AI, analytics, workload migration and cloud deployments.

"We are expanding our partnership with Infosys, which has domain expertise in managed services, as enterprises want to move mission-critical workloads to Google Cloud," said the Google arm's Vice-President Carolee Gearhart in the statement.

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Vietnamese carrier Vietjet, popularly called 'bikini airline', would operate direct flights from Ho Chi Minh City (commonly known as Saigon) and Hanoi to New Delhi starting from December 6 with thousands of "super-saving tickets".

"The Ho Chi Minh City-New Delhi route will operate four return flights per week on every Monday, Wednesday, Friday and Sunday starting from December 6, 2019," the airline said in a statement.

The Hanoi-New Delhi route will operate three return flights per week.

Vietjet currently operates around 400 flights daily on 129 routes covering destinations across Vietnam and international destinations such as Japan, Hong Kong, Singapore, South Korea, Taiwan, mainland China, Thailand, Myanmar, Malaysia and Cambodia.

The air traffic between India and Vietnam has been growing over the last few years. As per consultancy firm Centre for Asia Pacific Aviation (CAPA), Hanoi-Delhi was the third-largest Vietnam-India city pair, accounting for almost 12 per cent of Vietnam-India bookings in 2018.

Rajan Mehra, CEO of Club One Air and former India head of Qatar Airways, said that both leisure and business traffic on the India-Vietnam sector has been witnessing significant growth.

"A lot of corporates are going to Vietnam to set up businesses there. The tourist traffic has also been growing. It's a mix of both," he said.

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The National Company Law Appellate Tribunal (NCLAT) on Thursday expressed its displeasure over the crisis-hit IL&FS and the government's delay in filing the progress report on the resolution process of the group companies

"In spite of our order dated 12th July 2019 no 'Progress Report' has been filed by Union of India or IL&FS. They are allowed to file the 'Progress Report' by tomorrow (Friday)," said the NCLAT order.

The bench headed by NCLAT Chairperson S.J. Mukhopadhaya further asked the government to settle the claims of all the creditors of the Moradabad-Bareilly Expressway Ltd, the Jharkhand Road Projects Implementation Company, and the West Gujarat Expressway Ltd as per signed 'Term Sheet', before the next hearing on September 5. 

"The Union of India or IL&FS should also give notice to all the financial creditors of rest of the 10 'Amber' entities and take preliminary step by taking their consent in the manner it was followed in the cases of aforesaid three amber entities," it said.

Further, by the next hearing the government and IL&FS would also have to intimate the steps which they intend to take with regard to all the 82 red entities, the bench said.

The new board at IL&FS had classified the IL&FS group companies into three categories -- 'green', 'amber', and 'red' -- on the basis of their ability to service debt obligations to secured and unsecured creditors. Firms classified as "green" would continue to meet their payment obligations, while "amber" category firms can meet only operational payment obligations to secured financial creditors.

Those under the "red" category are the entities which cannot meet their payment obligations at all.

The bench further said that it would be open to the government and ILFS to call for meeting of the lenders and if necessary, the matter can be taken up on day-to-day basis to ensure that the total process with regard to all the amber entities, particularly the aforesaid three companies which IL&FS has decided to reclassify as green entities, is concluded on an early date. 

"They will keep it in mind that already 300 days approx. have completed since the Interim Order was passed on 15th October 2018," the order said. The appellate tribunal directed the government and IL&FS to file a fresh progress report by September 3.

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The Indian civil aviation sector is showing signs of recovery months after the grounding of Jet Airways with domestic air passenger traffic demand grew 7.9 per cent in June, a global airline association said on Thursday

According to the International Air Transport Association (IATA), India's domestic air passenger volume -- measured in revenue passenger kilometres was the third-highest among the major aviation markets such as Australia, Brazil, China, Japan, Russia and the US.

India's domestic RPK in June rose by 7.9 per cent as compared to the corresponding month of the previous year.

In the period under consideration, India's domestic passenger traffic growth was preceded by that of China at 8.3 per cent and Russia at 10.3 per cent.

The country's domestic available passenger capacity measured in available seat kilometres stood higher by 3.1 per cent in June, followed by China at 8.9 per cent and Russia at 9.8 per cent.

"The domestic India market has proven resilient in the face of the demise of Jet Airways earlier in the year," IATA said in its global passenger traffic results for June 2019.

"Growth in domestic RPKs have recovered strongly, lifting to a 7.9 per cent year-on-year pace in June, as the remaining carriers moved quickly to fill the gap created by the loss of a competitor and to meet the customer demand," it added.

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Capital goods maker Thermax Ltd has proved it can be resilient during tough times in the economy. The firm’s execution skills were reflected in the strong revenue growth during the June quarter, though macroeconomic issues weighed on profitability and order flows

Net consolidated revenue of 1,392 crores zoomed past the 17-broker average forecast on Bloomberg by about 17%. It was 34% higher on a year-on-year (y-o-y) basis. Even the stand-alone revenue of 1,167.7 crores was up 37.5% y-o-y, for which analysts said the credit goes to the company’s better-than-expected execution.

Strong revenue and stringent cost-control in spite of higher raw material costs translated into 43.5% y-o-y growth in Ebitda (earnings before interest, tax, depreciation and amortization).

“The key takeaway was the consistency in execution trend, which led to revenue growth, giving some green shoots for the company to return back to the growth path," said analysts at ICICI Securities Ltd. This also explains why the stock rose 3.8% to 1,087.75 on the National Stock Exchange on Thursday.

Yet, there were pressures on operating cost due to the liquidity crunch and delays in projects from the customer’s end, at times. This, along with provisions made towards its Chinese subsidiary, in which operations were discontinued, weighed on profitability. Ebitda margin widened by 40 basis points to 7.1% but was lower than what the Street had pencilled.

That’s not all. Challenges are mounting in the economy, particularly for the capital goods sector. A few quarters ago, there was an increase in order flows that brought in optimism for this universe, especially for front-rung companies, such as Thermax, and well-managed global firms including Cummins India Ltd, Siemens Ltd and ABB India Ltd. However, the situation has turned grim since the general election, with core sector growth falling and weakness in almost all sectors of the economy.

For Thermax, consolidated order flows fell 26.3%, while the order book at the end of the June quarter was 18% lower from a year ago. M.S. Unnikrishnan, managing director and chief executive of Thermax, said: “Even after elections, we did not see many pick-ups in orders. With capacity utilization in most sectors below the optimal level, most companies are deferring capex plans. Even short-cycle orders are slow as most managements are cautious."

To be sure, Thermax’s resilience is the key reason for the stock’s outperformance compared with benchmark indices, such as the Nifty Midcap 100. However, analysts reckoned that the pain will continue for several quarters.

Given the inertia even in private sector capex, Thermax’s shares may be range-bound, as its price-to-earnings ratio of 28 times estimated FY21 earnings factors in all positives.

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If the index breaks below 10,782 then further decline towards 11,580 and 10,450 levels is possible. Maximum open interest for Put is seen at strike price 10,800

Indian equity markets shrugged off weak global cues immediately after opening lower and witnessed steady gains through the day to touch intraday high of 11,018 on August 6

But, profit booking in the last hour of trade saw the Nifty closing off its high at 10,948, up by 0.79 percent. The broader market indices outperformed the benchmark as BSE Midcap and Smallcap gained 1.4 percent and 1.7 percent, respectively, for the day.

The market breadth on the NSE was positive with eight advancing stocks versus three declining. Following August 5 Hammer candle, the Nifty has formed a bullish engulfing pattern on the daily time frame that suggests buying at lower levels.

However, if the index breaks below 10,782 then it may decline further towards 11,580 and 10,450. In the Nifty weekly options, maximum open interest for Put is seen at strike price 10,800 followed by 10,700; while for Call maximum open interest is seen at 11,200 followed by 11,000. The index bounced back after touching a low of 10,782. If the index crossed and sustained above 11,020, the index could see a pullback towards 11,150-11,200.

India VIX closed for the day at 16.12, down 2.77 percent. VIX is at higher levels after a sharp bounce from lower levels suggesting volatility to continue.

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Revenue jumped 15.7 percent to Rs 1,716.5 crore versus Rs 1,483 crore

Shares of Berger Paints India touched a 52-week high of Rs 350, rising 5 percent intraday August 6 after the company reported robust numbers in the quarter ended June 2019.

The company's Q1FY20 net profit rose 32 percent at Rs 176.8 crore versus Rs 133.9 crore in the same quarter last fiscal.

Revenue jumped 15.7 percent to Rs 1,716.5 crore versus Rs 1,483 crore.

Earnings before, interest, tax, depreciation and amortization (EBITDA) was up 27.5 percent at Rs 305.1 crore against Rs 239.3 crore and the margin was up 170 bps at 17.8 percent against 16.1 percent.

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Sterling and Wilson Solar Ltd’s initial public offering (IPO) will test investor appetite for large issues

After receiving an approval to raise 4,500 crores, the promoters of the company have decided to sell shares worth 3,125 crores.

At the higher end of the price band of 780, the price-to-earnings ratio works out to about 20 times FY19 earnings. As such, there are no direct listed peers for Sterling and Wilson in India. Nonetheless, these valuations are similar to Larsen and Toubro Ltd (L&T), and significantly higher than KEC International Ltd, both of which derive sizeable overseas revenues from EPC (engineering procurement and construction) work, although from different sectors.

Even so, Sterling and Wilson’s shorter execution cycles limit the working capital requirement, thereby offering superior returns. Furthermore, sizeable revenues come from overseas, where execution risks are comparatively lower. The promoters’ presence in a number of markets, industry relationships and project management expertise helps Sterling and Wilson Solar, which partly explains the IPO valuations.

“It is not easy for a normal EPC company to build such capability," says Deepak Agrawala, executive director (investment banking) at Elara Capital (India) Pvt. Ltd.

Revenue and profit, on average, have grown 44-72% per annum in the last three fiscal years. The robust growth and steady profitability underscore Sterling and Wilson’s competitive advantage in utility-scale projects.

That said, given the short execution cycles of solar power projects, it is crucial that the order book is replenished quickly. Note that excluding other income, the company’s profitability has remained stable despite the steady decline in tariffs across the globe. This was helped by high exposure to overseas projects, which are more remunerative than projects in India.

Even so, Sterling and Wilson’s Ebitda margin (excluding other income) of 7.8% is lower than 11.6% clocked by L&T and 10.5% by KEC for FY19. Ebitda is short for earnings before interest, tax, depreciation and amortization.

Further, as projects in the overseas markets are increasingly being awarded through competitive bidding, suppressing tariffs, analysts fear the profitability of the industry stakeholders will be compressed or capped.

According to one domestic market observer, the pressure ultimately comes on EPC. “We are living through a revolution in the costs of renewable power technology. Lower costs will boost wind and solar generation’s share of the power mix from the current 6% to a much higher level in the coming years. This will create both opportunities and disruption in the industry," Alex Whitworth, research director at Wood Mackenzie, said in a recent note on renewables in Asia-Pacific

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Bondholders of troubled shadow lender Dewan Housing Finance Ltd (DHFL) have been given a three-week deadline to decide if they are on board with a rescue plan being evaluated by banks, according to a letter sent by a custodian of DHFL bonds, seen by Reuters

The banks have signed an inter-creditor agreement (ICA) to come up with a plan to restructure nearly 1 trillion rupees ($14 billion) of DHFL's debt.

Now, the bondholders have to communicate by letter by Aug. 26 if they are willing to be part of the ICA.

That turns up the heat on India's mutual funds, which hold DHFL paper and are scrambling for approval from the market regulator to join the ICA.

While insurers and pension funds have clarity from their regulators and are likely to be on-board with the ICA, mutual funds are yet to get a green light from the Securities And Exchange Board Of India (SEBI), industry sources said

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The Sensex was down 418.38 points at 36,699.84, while Nifty was down 134.80 points at 10,862.60

Indian indices ended on a negative note but off day's low on August 5 amid government decided to withdraw Article 370 from J&K.

Jammu and Kashmir will be a Union Territory with a legislature, while Ladakh region will be a Union Territory without a legislature, according to the government's plan for J&K, said Amit Shah.

About 742 shares have advanced, 1659 shares declined, and 138 shares are unchanged. 

Bharti Airtel, Tech Mahindra, Coal India, TCS and Bajaj Auto were among major gainers on the Nifty, while losers include Yes Bank, UPL, Tata Motors, Power Grid Corp and Grasim Industries.

Among sectors, except IT other indices are ended in the red led by energy (down 2.7 percent) followed by metal, bank, auto, FMCG, infra and pharma. BSE Smallcap and Midcap index down over 1 percent.

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Sudhir Gharpure and his sales team sat chatting at a big Maruti Suzuki dealership on the outskirts of Mumbai some two hours after its doors were opened on a recent Saturday morning - not a single customer was in sight

"There used to be close to 15-20 bookings each day, but now we're down to 3-5 on good days," said Gharpure, the general manager at the dealership.

Gharpure's experience is not an isolated one. Across India, dealerships are being pushed out of business and the Indian auto sector is going through its biggest slump in nearly two decades. Passenger vehicle sales fell for eight straight months until June, and in May sales dropped 20.55% - the sharpest recorded fall in 18 years.

Preliminary data indicates passenger vehicle sales may have plunged as much as 30 percent in July. The slump in India, along with a simultaneous slide in Chinese auto sales, is a blow for automakers wrestling with higher costs driven by more stringent emission norms and a push to develop electric cars.

Unlike in China, where the plunge in cars sales have been caused largely by new emissions rules, India has seen a mix of factors that have combined to erode demand for automobiles.

Prime Minister Narendra Modi's 2016 ban on high-value bank notes, higher tax rates under a new goods and services tax regime, a boom of ride-sharing firms such as Uber and Ola, and a weak rural economy have all played a role.

But many dealers and automakers agree it is a deepening liquidity crunch among India's shadow banks that have been the biggest single factor in an auto sales collapse, which some fear may lead to more than a million job losses.

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Mitesh Thakkar of mitesshthakkar.com recommends selling Maruti Suzuki with a stop loss of Rs 5520 and target of Rs 5380 and Shree Cements with a stop loss of Rs 20600 and target of Rs 19000

The BSE Sensex gained 83.88 points to 37,481.12 while the Nifty 50 strongly defended psychological 11,000-mark and rose 32.60 points to close at 11,118.

The broader markets also rebounded to close higher with the Nifty Midcap index rising 1.38 percent and Smallcap index gaining 0.4 percent.

In July, the BSE Sensex lost nearly 5 percent and the Nifty 50 shed 5.7 percent and formed a bearish candle on the monthly charts. It was the worst July for Nifty in the last 17 years.

According to the pivot charts, the key support level is placed at 11,029.83, followed by 10,941.67. If the index starts moving upward, the key resistance levels to watch for out are 11,175.73 and 11,233.47.

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The Nifty Midcap index itself fell 18 percent and around 45 stocks included in the index corrected in the range of 30-90 percent in the last 18 months.

After hitting a lifetime high in January 2018, the broader markets continued to underperform frontline indices. In fact, the Nifty Midcap index traded at a big discount to Nifty50 on back of sharp correction in several key stocks.

Asset quality concerns, LTCG tax imposition, liquidity crisis, consumption slowdown, debt defaults, global trade war, and crude volatility etc., have hit several stocks, which corrected sharply in the past.

The Nifty Midcap index fell 18 percent and around 45 stocks included in the index corrected in the range of 30-90 percent in the last 18 months.

"The midcap indices (Nifty 100Midcap and BSE100 Midcap) are now trading at a discount of 15 percent to the Nifty 50 (compared to historical lows of 30-40 percent discount)." JM Financial said.

"The correction followed the downward revisions to the earnings for FY19 (28 percent lower than estimated) on account of high expectations, higher share PSU financials/ stressed groups and cyclicals (industrials/ discretionary in the midcap indices being at 27.5 percent versus 12.7 percent in Nifty 50)," they added.

But, as most analysts say, the NBFC crisis is near the end and with most of the negative priced in, there is hope building. This sentiment could be renewed by the Union Budget and expected rate cuts by India's and other global central banks. Hence, the sharp rally could be seen in midcaps rather than large-caps in the coming quarters, experts said.

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