KEY HIGHLIGHTS
Closing Bell: A Strong Session
A recovery in banking stocks propelled the Indian equity markets to reverse Monday's losses and end near the highest point of the trading day.
The S&P BSE Sensex ended 1.47% higher at 38,492 while the NSE Nifty 50 index ended 1.5% higher at 11,300. 42 out of the 50 Nifty constituents ended with gains. UltraTech emerged as the top Nifty gainer, ending 7% higher post its first quarter results.
The Nifty Bank recovered a quarter of Monday's 800 point loss. The index ended with gains of 1.2% or 260 points.
Auto stocks were the top performers in today's session. The Nifty auto index ended with gains of 3.2%. Other gainers included the Nifty I.T. (up 2.3%) which gained for the third straight day, Nifty Metal which gained 2.2% and the Nifty Realty index which gained 1.6%.
Broader markets were mixed. The midcap index underperformed with gains of 0.9% while the smallcap index ended in-line with benchmark indices with gains of 1.4%.
Market breadth ended in favour of the gainers. 955 stocks on the NSE ended with gains while 872 declined.
Sectoral Indices At Close
Buzzing Stock: Apollo Hospitals
- Trades at the highest level in over four months
- Gains as much as 6.2% to Rs 1,601
- Biggest single-day gain in three months
- Snaps two-day losing streak
- Today's volumes are more than double of its 20-day average
- Trades 12% below its 52-week high of Rs 1,814 on February 20, 2020
- 22 out of the 24 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 7.5%
Earnings Reaction: Tinplate Company of India
- Revenue down 32% to Rs 379.8 crore
- Net loss of Rs 6.9 crore from net profit of Rs 8.8 crore
- Ebitda down 79% to Rs 5.7 crore
- Ebitda margin at 1.5% from 4.8%
- Power and fuel costs down 39% to Rs 23.85 crore
- All numbers are compared on a year-on-year basis
Shares are at the day's low, down 2.8% to Rs 138.3, down for the fourth straight day.
Metal Index At Day's High
Stock Reaction: Tata Motors
Thierry Bollore has been appointed CEO of the company's wholly-owned subsidiary Jaguar Land Rover, the company said in a press statement.
Bollore will replace Ralf Speth will take over as the Non-Executive Vice Chairman of JLR, the statement said. The appointment is effective September 10, 2020.
Bollore was previously CEO at Groupe Renault and in senior positions at Faurecia.
Shares ended 4.7% higher at Rs 106.45, snapping a two-day losing streak.
Active Stock Options
- Reliance Industries' 2,200 Call: Premium down 39.9% to Rs 21.5. The contract has shed 1.72 lakh shares in Open Interest.
- ICICI Bank's 360 Call: Premium down 43.6% to Rs 4.65. The contract has added 23.1 lakh shares in Open Interest.
- TCS' 2,300 Call: Premium up 293% to Rs 22. The contract has shed 3.8 lakh shares in Open Interest.
Markets At 2:30 P.M.
- Benchmark indices at day's high
- Nifty up 1.3% at 11,275
- Sensex up 1.25% at 38,409
- Nifty Bank up 1.2% at 22,104
- Nifty Midcap Index up 0.8%
- Nifty Smallcap Index up 1.1%
- India Volatility Index down 4.7% to 23.83
- Nifty Auto remains top sectoral gainer; up 3.1%
- Nifty I.T., Nifty Meetal gain over 1.5% each
- Nifty Realty, Nifty Pharma gain nearly 1%
- UltraTech Cement is the top Nifty gainer; up 6.5%
- Zee Entertainment is the top Nifty laggard; down 2%
- 934 stocks on the NSE trade with gains while 864 decline
Money Market Update
The currency ended little changed for the third straight day, after trading in a narrow range throughout the session.
The rupee ended at 74.84 against the U.S. Dollar as compared to Monday's close of 74.83. It made a intraday high of 74.7 and an intraday low of 74.90 during the session.
Five other Emerging Market currencies managed to outperform the rupee in today's trading session.
Yield on the 10-year government bond ended at 5.85% as compared to Monday's close of 5.856%.
Earnings Reaction: UltraTech Cement Q1FY21
- Revenue down 33% to Rs 7,633 crore
- Net profit down 38% to Rs 797.4 crore
- Ebitda down 30% to Rs 2,073.9 crore
- Ebitda margin at 27.2% from 25.8%
- One-time expense of Rs 157.37 crore during the quarter.
- Volumes declined 22% during the quarter to 13.94 MT, as per the company's investor presentation.
Shares ended 7.2% higher at Rs 4,136. This was the biggest single-day gain for the stock in over three months. The stock has ended at the highest level in nearly five months.
Earnings Reaction: HT Media Q1FY21
- Revenue down 69% to Rs 166.3 crore
- Net loss narrows to Rs 55 crore from Rs 155 crore
- Ebitda loss of Rs 102 crore from Ebitda gain of Rs 41 crore
- Print and publication revenue down 68% to Rs 144.1 crore
- Radio broadcast revenue down 88% to Rs 8 crore
- Digital revenue down 30% to Rs 14.4 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares fall as much as 6.6% to Rs 11.7, post the announcement.
Top Reads On BloombergQuint.com
Also Read: Should India Print Money To Fight Covid-19?
Earnings Reaction: Nippon Life India AMC
- Revenue down 30% to Rs 215.4 crore
- Net profit up 22% to Rs 149.6 crore
- Other income up 2.8 times to Rs 98.8 crore
- Added approximately 2.2 lakh investor folios during the quarter
- ETF Investor Folios up 1.17 lakh during the quarter
- Total AUM at Rs 2.73 lakh crore
- Gold Fund AUM crossed Rs 4,200 crore
- Retail assets contributed 24% to overall AUM
- Digital purchase transactions rose 43%
- All numbers are standalone and compared on a year-on-year basis
Shares gained as much as 6% to Rs 286.45, before cooling off.
Third Day Of Gains For Nifty I.T.
European Markets Open Mostly Higher
Most benchmark indices in Europe opened with gains for the first time in three days led by cyclical and commodity sectors.
The Stoxx 600 has opened with gains of 0.4% with construction, telecom and auto stocks leading the gains. Personal and household goods stocks are underperforming.
Asian markets have ended mixed while futures on the Dow Jones have given up gains to trade little changed.
Brent Crude trades 0.6% higher at $43.66 per barrel while gold is down 0.2% at $1,937.9/Oz, after scaling a record high.
Let's take a look at how Benchmark indices have opened across Europe:
- Euro Stoxx 50 unchanged at 3,302
- DAX up 0.3% at 12,879
- CAC down 0.3% at 4,923
- FTSE 100 up 0.15% at 6,114
- IBEX 35 up 0.2% at 7,181
How Are The Sectoral Indices Faring
Equity Mutual Funds Face First Monthly Withdrawals Since 2016
Equity Mutual Funds in India may witness their first monthly net outflows in more than four years as investors continue to cash out to tide over the pandemic-related credit crunch, Bloomberg News reports.
Net withdrawals from stock plans may top Rs 1,000 crore in July, Nilesh Shah of Kotak Mahindra Asset Management and AMFI Chairman told Bloomberg.
“Gross flows to equity funds are holding up but there's no let-up in redemptions. There will be a net flow for July as things stand today,” Shah said.
Sunil Subramaniam of Sundaram Asset Management expects redemptions to go up since markets have continued to rise this month.
The Sensex is up 9.5% and the Nifty has gained 9% this month so far.
Buzzing Stock: Ashoka Buildcon
- Worst performing stock on the Nifty Smallcap Index
- Falls as much as 5.8% to Rs 52.3
- Trades at the lowest level in over a month
- Down for the second straight day
- Has declined in nine out of the last 12 trading sessions
- Down 16% in the last 12 trading sessions
- Today's volumes are on-par with its 20-day average
- Trades below its 50-Day Moving Average of 57
- Has declined 59% from its 52-week high of Rs 128.8 on August 8, 2019
- 22 out of the 23 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 107.7%
Earnings Expectations: Nestle India Q2CY20
- Net sales seen 6.8% higher at Rs 3,205
- Net profit seen 20% higher at Rs 525 crore
- Ebitda seen 13.5% higher at Rs 790 crore
- Ebitda margins seen at 24.6% from 23.2%
- All estimates are standalone and compared on a year-on-year basis
Key Factors At Play For Nestle India:
- Growth likely to sustain despite lockdown
- Cluster-based distribution to aid sales during lockdown
- Maggi to drive sales during the quarter
- Expect to see broad-based growth across segments
- High input costs may impact margins
- Product mix, cost rationalisations to aid margins
Markets At Noon
- Benchmark indices gain momentum
- Nifty up 0.7% at 11,206
- Sensex up 0.65% at 38,179
- Nifty Bank little changed at 21,860
- Nifty Midcap Index up 0.6%
- Nifty Smallcap Index up 1%
- India Volatility Index down 3% to 24.26
- Nifty Media extends losses; down 1.5%
- Nifty Auto extends gains; up 2.5%
- Nifty I.T., Nifty Metal and Nifty Realty gain over 1% each
- Hero MotoCorp is the top Nifty gainer; up 3.3%
- ICICI Bank is the top Nifty laggard; down 3%
- 914 stocks on the NSE trade with gains while 833 decline
Earnings Reaction: United Spirits
- Revenue down 53.6% to Rs 1,030.2 crore
- Net loss of Rs 215.3 crore from net profit of Rs 197.4 crore
- First quarterly net loss since Q4FY16
- Ebitda loss of Rs 77.6 crore from Ebitda gain of Rs 395.1 crore
- Exceptional loss of Rs 75 crore due to Covid-19 related promotional program
- Overall volume decline during the quarter at 49%
- Prestige and Above segment sales down 52%
- Popular segment net sales down 51% and 46% in priority states
- Gross margins down 567 basis points to 41.7% on a reported basis
- Zero sales for more than a month coupled with negative impact of operating leverage and certain one-offs resulted in a net loss for the quarter
Shares fell as much as 3.3% to Rs 571. The stock is down for the third straight day.
F&O Snapshot: Active Options Contracts
- Nifty July futures add 10.4% and 8.6 lakh shares in Open Interest.
- Nifty Bank July futures add 13.7% and 1.77 lakh shares in Open Interest.
Nifty: July 30 Expiry
- 11,200 Call: Premium up 18.8% to Rs 69.7. The contract has added 2.9 lakh shares in Open Interest.
- 11,100 Put: Premium down 50% to Rs 41.6. The contract has added 11.9 lakh shares in Open Interest.
- 11,000 Put: Premium down 56% to Rs 20.6. The contract has added 4.65 lakh shares in Open Interest.
Nifty Bank: July 30 Expiry
- 21,500 Put: Premium down 14.7% to Rs 169.3. The contract has added 77,000 shares in Open Interest.
- 22,000 Call: Premium down 25.3% to Rs 216.4. The contract has added 4.7 lakh shares in Open Interest.
- 22,500 Call: Premium down 37.7% to Rs 82.3. The contract has added 1.54 lakh shares in Open Interest.
All Constituents Of The Media Index Decline
Buzzing Stock: Birlasoft
- Best performing stock on the Nifty 500 index
- Trades at the highest level since January 2019
- Gains as much as 9% to Rs 118.1
- Biggest single-day gain in over two months
- Up for the second straight day
- Has gained 13% in the last two trading sessions
- Today's volumes are five times higher than its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 72
- Has more than doubled from its 52-week low of Rs 46 on March 24, 2020
- All four analysts tracking the stock have a buy recommendation
- The stock is trading at the level of its 12-month consensus price target of Rs 117.6
Earnings Reaction: Tejas Networks Q1FY21
- Revenue down 50.1% to Rs 80.1 crore
- Net loss of Rs 9.8 crore from net profit of Rs 5.7 crore
- Ebitda down 97% to Rs 0.64 crore
- Ebitda margin at 0.8% from 15%
- Covid-19 lockdowns affected ability to fulfill customer orders
- Strong new order intake of Rs 188 crore during the quarter
- Total order book at Rs 593 crore which is a eight-quarter high
- Will positioned to capitalise on opportunities from Atmanirbhar Bharat
- Export revenues saw 52% growth during the quarter
- Debt-free company with cash and cash equivalents at Rs 272 crore
- Government revenue from the India business saw a de-growth of 52%
- Private revenue from the India business saw a de-growth of 76%
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 3.6% to Rs 53.4 but are currently off the day's low.
Stock Reaction: MT Educare
The company's promoter Mahesh Shetty will be selling 2.47% of his stake in the company or 17.83 lakh shares through an Offer For Sale.
The floor price for the same has been set at Rs 13 per share.
The OFS for non-retail investors is currently open for subscription while that for retail investors will open tomorrow.
As per the company's shareholding pattern for the June quarter, Shetty held close to 18.35% stake.
The stake sale will fetch Shetty a sum of Rs 3.2 crore.
Shares gained as much as 4.3% to Rs 13.2, snapping a two-day losing streak.
Buzzing Stock: Prestige Estates
- Top performing stock on the Nifty Midcap index
- Gains as much as 6.9% to Rs 184.4
- Biggest single-day gain in a month
- Trades at the highest level in two-weeks
- Snaps a two-day losing streak
- Today's volumes are more than triple its 20-day average
- Trades near its 50-Day Moving Average of 184 and 100-Day Moving Average at 189
- Remains 38% above its 52-week low of Rs 133 on May 19, 2020
- 17 out of the 19 analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 47.6%
Stock Reaction: Fineotex Chemicals
The company with a market capitalisation of Rs 338 crore has approved a share buyback worth Rs 4.4 crore. It will buyback a maximum of 11 lakh shares.
The buyback price for the same has been set at Rs 40 per share, which is a 33% premium to Monday's closing price.
The share buyback represents 2.99% of the total paid-up equity share capital of the company.
Shares gained as much as 8.9% to Rs 33.1, before cooling off.
Nifty Auto Is The Top Sectoral Gainer
Earnings Reaction: Bharti Infratel
The tower company's earnings were in-line with Bloomberg consensus estimates. It reported a rise in quarterly profit despite lower rentals and modest tenancy additions.
Operational performance too was largely in-line with estimates. Ebitda rose 6.4% from the previous quarter while margins expanded to 51.6% from 46.9% in the fourth quarter last year.
Tenancy ratio stood at 1.82 times from 1.84 times last quarter.
The board of directors have extended the long stop date of the company's merger with Indus Towers till August 31. It has also recommended a dividend of Rs 2.3 per share.
Brokerage firm Morgan Stanley has maintained its underweight rating on the stock with a price target of Rs 175.
Shares trade near the day's low, down 3.35% at Rs 187.75. The stock is down for the third straight day and is the top laggard on the Nifty 50 index.
Markets At 10:10 A.M.
- Benchmark indices hold gains after flat start
- Nifty up 0.5% at 11,182
- Sensex up 0.4% at 38,095
- Nifty Bank down 0.2% at 21,806
- Nifty Midcap index up 0.4%
- Nifty Smallcap index up 1%
- India Volatility Index down 1.5% at 24.64
- Nifty Media is the top sectoral laggard; down 1.2%
- Nifty Auto is the top sectoral gainer; up 1.8%
- Nifty I.T. gains for the third straight day; up 1.4%
- Nifty Metal is the other sectoral gainer; up 1%
- Tech Mahindra is the top Nifty gainer; up 3.5%
- Bharti Infratel is the top Nifty laggard; down 2.3%
- 972 stocks on the NSE trade with gains while 686 decline
Money Market Update
The currency opened with modest losses after ending unchanged on Monday.
The rupee opened at 74.87 against the U.S. Dollar as compared to Monday's close of 74.83.
The currency gave up all of its intra-day gains on Monday to end unchanged.
DCB Bank believes that the support for the USD-INR pair is seen at 74.50, adding that a dollar crash as a result of G-10 currency strength may lead to breaking of those levels.
Within the bond markets, 11 Indian states plan to sell bonds worth Rs 14,000 crore in today's session.
South Indian Bank believes that the short-end of the sovereign curve has run out of juice and that their rally is nearly over.
Stock Reaction: Manappuram Finance
The company's Board of Directors have approved the issuance of rated, secured, redeemable Non-Convertible Debentures (NCDs) worth Rs 10 lakh each.
The NCDs worth Rs 150 crore will be allotted on a private placement basis.
The company will retain the oversubscription option up to Rs 350 crore, the exchange filing said.
Shares gained as much as 2.5% to Rs 187. The stock is now trading at the highest level in six months.
Coronavirus India Update
- India's new cases are lesser as compared to Monday
- 47,703 cases reported in the last 24 hours
- Total cases now at 14,83,156
- Active cases at 4,96,988
- Patients that are cured / discharged / migrated at 9,52,743
- Death toll rises to 33,425
- 654 deaths reported in the last 24 hours
- 35,175 patients recovered over the last 24 hours.
Earnings Reaction: Bharat Electronics
The defence PSU reported a net profit during the quarter, contrary to Bloomberg consensus expectations of a net loss. Profit however declined 74% compared to the previous year while Ebitda fell close to 60%.
Margins halved as compared to the same period last year. Order book for the company stood at Rs 53,752 crore.
The company in a press statement said that revenue and profitability was impacted due to Covid-19 related developments.
Shares are trading at the day's low - down as much as 3% to Rs 96.5. The stock is trading lower for the third straight day.
Earnings Reaction: Tech Mahindra
The I.T. major reported earnings that were ahead of Bloomberg consensus estimates.
Revenue in both U.S. Dollar, as well as rupee terms saw a decline on a sequential basis.
Net profit and margins were higher owing to the one-off expenses that the company had incurred in its base quarter.
Revenue of both its segments - I.T. and BPO saw a decline between 3% and 10% compared to the previous quarter.
We are witnessing a wave of new age technologies being adopted by the customers as businesses across the globe are actively pursuing digital transformation. We are well positioned to capture such spends.CP Gurnani, MD & CEO, Tech Mahindra
Brokerage firm CLSA has maintained its outperform rating on the stock and raised its price target to Rs 700 from Rs 750.
Shares gained as much as 5.7% to Rs 702.7. The stock is up for the fourth straight day and is the top gainer on the Nifty 50 index.
Opening Bell: A Subdued Start
Indian equity markets opened flat after posting losses in Monday's trading session.
The S&P BSE Sensex opened 0.3% higher at 38,052 while the NSE Nifty 50 index opened 0.2% higher at 11,154.
All sectoral indices have opened flat. The Nifty Bank opened 0.4% higher after a 3.6% drop on Monday. The Realty index opened 0.5% higher while the rest were little changed.
Broader markets have opened with gains. Smallcap index is outperforming with gains of 0.6% while the Midcap index gained 0.2%.
Market breadth opened in favour of the gainers. 946 stocks on the NSE are advancing while 491 are declining in the initial minutes of trade.
Latest On The Coronavirus
- Global cases rise past 16.4 million
- Death toll at 6.52 lakh
- U.S. National Security Adviser Robert O'Brien tests positive
- Hong Kong mulls postponing legislative elections
- Vietnam reports 15 new cases in three days from the central coastal region
- Beijing reports one new confirmed cases linked to the outbreak in Dalian
- Texas adds 675 deaths to Covid-19 tally
- A cat in U.K. tests positive for the virus
How Did The Fund Flows Fare On Monday
Key Stocks In Focus
- Bharti Infratel: Earnings were in-line with Bloomberg consensus estimates. The tower company reported a rise in quarterly profit despite lower rentals and modest tenancy additions. The board of directors have extended the long stop date of the company's merger with Indus Towers till August 31.
- Tech Mahindra: Results were ahead of Bloomberg consensus estimates. Revenue in both U.S. Dollar as well as rupee terms saw a decline as compared to the previous quarter. Net profit and operating performance was better, owing to one-off expenses that the company had in the base quarter.
- United Spirits: Reported a net loss in the June quarter owing to exceptional items and lower revenues. The company reported a 49% de-growth in volumes during the quarter. This was the first loss reported by the company since the fourth quarter of FY16.
- Bharat Electronics: Reported a net profit during the quarter, contrary to Bloomberg consensus expectations of a net loss. Margins halved as compared to the same period last year. Order book stood at over 50,000 crore rupees. The company in a press statement said that revenue and profitability was impacted due to Covid-19 related developments.
- InterGlobe Aviation: Announces another round of steeper pay cuts starting September. CEO Ronojoy Dutta in an email to employees said that the company is taking deeper pay cuts to adjust the cost structure down in-line with the reduced revenue. Ronojoy Dutta will take a 35% paycut. All executives at the level of Senior Vice President and above to take a pay cut of 30%. Vice Presidents and Associate Vice Presidents to face a 15% cut in their salary. Dutta said it intends to gradually reduce the number of days without pay as it adds back more flights.
- MT Educare: Promoter Mahesh Shetty to sell 17.83 lakh shares (2.47% equity) at a floor price of Rs 13 per share, aggregating to Rs 3.2 crore. The OFS opens for non-retail investors on July 28 and for retail investors on July 29. His stake as on June 30, as per the latest shareholding pattern stood at 18.35%.
- Mindspace Business Parks REIT IPO subscribed 38% on Day 1. Institutional subscription at 0.37 times. Retail subscription at 0.40 times. Institutional category doesn’t include anchor portion.
- Nifty Earnings Today: Nestle India, UltraTech Cement, IndusInd Bank
- Non-Nifty Earnings Today: Yes Bank, Coforge, Castrol India, Sanofi India, Tata Coffee, Orient Cement, Quess Corp, Sunteck Realty, RBL Bank, Hexaware Tech, IDBI Bank, IDFC First Bank
For all that you need to know going into today’s trade, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
U.S. Markets On Monday
- Benchmark indices end with gains
- S&P 500 erased last weeks drop with gains of 0.7%
- A slew of tech companies to report earnings this week
- Moderna gained after getting second round of U.S. funding for experimental Covid-19 vaccine
- Hedge funds cut net long positions in Nasdaq's mini futures in half
- FOMC meeting to begin today
- Bloomberg Dollar Spot index fell 0.9%
- Yield on the 10-year treasuries stood at 0.61%
- West Texas Intermediate crude rose 0.8% to $41.62 per barrel
- Gold gained 2% to $1,938.6/Oz. The metal trades higher today as well
Get your daily fix of the global markets here.
Losses May Reverse Today?
Good Morning!
Indian equities posted loss on the first day of the expiry of July futures and options contracts, dragged by the banking stocks. The Nifty Bank fell 800 points—the biggest in more than a month.
But the Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.56% to 11,180 as of 8:05 a.m. on Tuesday.
Three Nifty 50 companies — Nestle India, UltraTech Cement and IndusInd Bank — are set to announce their first-quarter numbers. Broader market companies like RBL Bank, Yes Bank, IDBI Bank, IDFC First Bank, Coforge, Castrol India will also report earnings.
Besides, the street is expected to factor in the June-quarter results of Tech Mahindra, Bharti Infratel, United Spirits and Bharat Electronics, among others, that were announced after market hours on Monday.
Within the global markets, Japanese equities opened flat, while those in South Korea are outperforming. Oil prices were steady and gold extended gains after hitting a record high.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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