KEY HIGHLIGHTS
Mukesh Ambani At The RIL AGM
- We have fulfilled the promise of being net debt free. Raised a record amount of capital
- Google to be a strategic partner in Jio Platforms.
- Google to invest Rs 33,737 crore for 7.7% stake in Jio Platforms
- Our target for the capital raise is complete
- Will now induct only strategic partners in each of our business verticals
- Jio platforms will be well positioned to export 5G solutions post India rollout. This homegrown technology can be launched next year.
- Jio Platforms along with 20 startup partners have build significant technologies.
- Making rapid progress with Microsoft Azure partnership.
- Jio, Google to develop affordable, entry-level smartphones.
- Target to be net carbon zero by 2035.
How Did The Sectoral Indices Fare
Closing Bell: RIL Leads The Fall
Indian equity markets gave up all the gains made in the session, led by a last-hour sell-off in heavyweight Reliance Industries.
The S&P BSE Sensex ended little changed at 36,051 while the NSE Nifty 50 index ended 0.26% higher at 10,634. Benchmark indices fell 750 and 200 points respectively from their day's high.
Reliance Industries led the sell-off in indices. The stock ended 4% lower after Chairman and Managing Director Mukesh Ambani said that the proposed deal with Saudi Aramco has not progressed as per plan.
On the other hand Wipro, gained the most since May 2004, ending with gains of 16.9% after its first quarter results.
Among sectoral indices, the realty index ended as the top laggard; with losses of over 2% while the media index ended 1.7% lower. The I.T. index sustained gains through the day, ending 5.24% higher. PSU Bank index was the other sectoral laggard, ending 1.4% lower.
Broader markets too gave up gains. The midcap index ended 0.7% lower while the smallcap index ended little changed.
Market breadth turned adverse, ending in favour of the laggards. 1,082 stocks on the NSE ended with losses while 747 posted gains.
Mukesh Ambani On Aramco Deal
- Deal with Aramco has not progressed as planned
- Deal has not progressed as per the timeline
- Committed to a long-term partnership with Aramco
- To spin off the O2C business into a separate unit
- Seek to induct multiple partners in the demerged O2C unit
Nifty Bank Gives Up Gains
Earnings Reaction: Federal Bank Q1FY21
- Net Interest Income up 12% to Rs 1,296.4 crore
- Net profit up 4% to Rs 400.77 crore
- Gross NPA at 2.96% from 2.84% in the previous quarter
- Net NPA at 1.22% from 1.31% in the previous quarter
- Provisions at Rs 394.6 crore from Rs 567.5 crore in the previous quarter and Rs 192 crore last year
- Capital Adequacy Ratio at 14.1%
- Made additional net provisions of Rs 93 crore against the likely impact of Covid-19
Shares are recovering from the day's low, now down 0.6% to Rs 50.8.
Earnings Reaction: Bandhan Bank Q1FY21
- Net Interest Income up 15% to Rs 1,811.6 crore
- Net profit down 32% to Rs 549.8 crore
- Gross NPA at 1.43% from 1.48% in the previous quarter
- Net NPA at 0.48% from 0.58% in the previous quarter
- Provisions at Rs 849.1 crore from Rs 827.3 crore in the previous quarter and Rs 125.35 crore last year
- Took accelerated provisions on standard advances worth Rs 750 crore for Covid-19.
- NIMs at 8.15% from 8.15% in the previous quarter.
Shares gave up gains of as much as 5% to fall as much as 1.4% to Rs 347.45, post the announcement. The stock is down for the fourth straight day.
Markets At 2:15 P.M.
- Markets hold on to gains
- Nifty up 1.67% at 10,787
- Sensex up 1.8% at 36,666
- Nifty Bank up 1.4% at 21,690
- Nifty Midcap Index up 0.2%
- Nifty Smallcap Indedx up 1%
- India Volatility Index down 1.9% to 26.13
- Nifty I.T. remains the top sectoral gainer; up 5.2%
- Nifty Realty is the only sectoral laggard; down 1.3%
- Wipro remains the top Nifty gainer; up 15.5%
- Zee Entertainment is the top Nifty laggard; down 2.5%
- 1,062 stocks on the NSE trade with gains while 720 decline
Money Market Update
The rupee has ended with gains in today's session after falling to a two-week low on Tuesday.
The currency ended at 75.15 against the U.S. Dollar as compared to Tuesday's close of 75.43.
Today's gains meant that the rupee ended as the second best performing currency in Asia after the South Korean Won.
Yield on the 10-year bond ended at 5.813% as compared to Tuesday's level of 5.825%.
Stock Update: Bank of Baroda
The state-run bank has raised Rs 764 crore through AT-1 bonds. The coupon rates for the bonds has been set at 8.25%.
The Basel-III compliant bonds have been raised on a private placement basis.
Perpetual bonds have call option after five years and every year thereafter.
The stock trades 0.31% lower at Rs 48.85.
Buzzing Stock: Sterlite Tech
- Trades at the highest level since October 2019
- Gains as much as 13.2% to Rs 152.35
- Biggest single-day gain since May 2019
- Snaps two-day losing streak
- Has gained in eight out of the last 11 trading sessions
- Up 36% in the last 11 trading sessions
- Today's volumes are 0.7 times higher than its 30-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 77
- The stock has more than doubled from its 52-week low of Rs 58.65 on March 13, 2020
- 8 out of the 11 analysts tracking the stock have a buy recommendation; 1 sell call
- The stock trades 12.1% above its 12-month consensus price target of Rs 127.5, implying a negative return potential
Stock Reaction: Titan
The biggest jeweller by market expects the performance of its high- diamond jewellery segment to remain muted for FY21, Bloomberg News reports citing its annual report.
The company also expects customers to be wary about stepping out of the house due to Covid-19 and lockdown related regulations.
The report says that the company will continue to focus on cash flows and optimising spends for FY21.
With job losses expected to increase substantially and salaries expected to fall or stay flat at best, spends on discretionary products could get affected more.Titan In Its Annual Report
Titan expects the customers to spend relatively more on jewellery as compared to other discretionary spends as gold remains a valuable store of .
Shares gave up gains to trade little changed at Rs 972.50.
Active Stock Options
- Reliance Industries' 2,000 Call: Premium up 15.6% to Rs 66.45. The contract has added 9 lakh shares in Open Interest.
- Wipro's 260 Call: Premium up 1,292% to Rs 9.75. The contract has added 26 lakh shares in Open Interest.
- TCS' 2,300 Call: Premium up 103.7% to Rs 33.1. The contract has shed 2.2 lakh shares in Open Interest.
Axis, Bandhan Lead Gains On Nifty Bank Index
European Markets Open Higher
Markets in Europe have opened higher in third out of the last four trading sessions as progress in vaccine trials provide a tailwind to equities.
The Stoxx 600 has opened 0.9% higher with basic resources and travel stocks leading the gains.
Asian markets have ended mixed with Chinese shares underperforming while futures on the Dow Jones trading higher by 244 points.
Brent crude trades 0.7% higher at $43.2 per barrel while Gold is little changed at $1,807/Oz.
Let's take a look at how benchmark indices have opened across Europe:
- Euro Stoxx 50 up 0.8% at 3,349
- DAX up 0.9% at 12,808
- CAC up 0.8% at 5,048
- FTSE 100 up 0.8% at 6,227
- IBEX 35 up 1% at 7,425
How Are The Sectoral Indices Faring
FPO Opens Today: Yes Bank
- Issue Opens: Today
- Issue Closes: July 17
- Price Band: Rs 12-13 per share
- Issue Size: Rs 15,000 crore
- Gross NPA: 16.8%
- Tier-1 Ratio: 6.5%
- Provision Coverage Ratio: 70%
The board approved the allotment of 341.5 crore shares to 14 anchor investors at the lower end of the price band of Rs 12 per share.
Bay Tree Holdings, HDFC Life Insurance, Amansa Holdings, Hinduja Leyland Finance are among the investors who were allotted shares.
The board will meet on or after July 18 to determine the offer price as well as the anchor investor price.
Shares fell as much as 3.1% to Rs 20.3, down for the fourth straight day.
Stock Reaction: Eveready Industries
Dabur's promoters, the Burman family acquired 61.68 lakh shares of the company, amounting to an 8.49% stake at Rs 81.8 per share.
IL&FS Financial Services sold 7.08% stake or 51.48 lakh shares are Rs 81.8 per share while Vistra ITCL sold 12.19 lakh shares or 1.68% stake at Rs 81.85 per share.
The overall stake of the family in the company now stands at over 19%.
Shares gained as much as 10% to Rs 98, up for the second straight day.
Buzzing Stock: Persistent Systems
- Trading at the highest level since September 2018
- Gains as much as 5.7% to Rs 778.55
- Up for the second straight day
- Has gained in 10 out of the last 13 trading sessions
- Up 24% in the last 13 trading sessions
- Today's volumes are 6 times higher than its 30-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 85
- Has gained more than 85% from its 52-week low of Rs 420 on March 23, 2020
- 24 out of the 34 analysts tracking the stock have a buy recommendation; 4 sell calls
- The stock trades 17.7% higher than its 12-month consensus price target of Rs 636.8, implying a negative return potential
Markets At Noon
- Benchmark indices surge to the day's high
- Nifty up 1.8% at 10,802
- Sensex up 1.9% at 36,723
- Nifty Bank up 2.1% at 21,843
- Nifty Midcap Index up 0.77%
- Nifty Smallcap Index up 1.4%
- India Volatility Index down 2.85% to 25.87
- Nifty I.T. extends gains; up 5.2%
- Nifty Metal, is the other sectoral gainer; up 1.4%
- Nifty Realty is the only sectoral laggard; down 0.4%
- Wipro remains the top Nifty gainer; up 15.3%
- Zee Entertainment is the top Nifty laggard; down 1.9%
- 1,181 stocks on the NSE trade with gains while 567 decline
F&O Snapshot: Active Options Contracts
- Nifty July futures add 9.6% and 10.5 lakh shares in Open Interest.
- Nifty Bank July futures add 4.3% and 70,075 shares in Open Interest.
Nifty: July 16 Expiry
- 10,800 Call: Premium up 186% to Rs 69.2. The contract has shed 74,475 shares in Open Interest.
- 10,700 Put: Premium down 80.5% to Rs 24.85. The contract has added 30 lakh shares in Open Interest.
- 10,700 Call: Premium up 186.4% to Rs 138.2. The contract has shed 13.6 lakh shares in Open Interest.
Nifty Bank: July 16 Expiry
- 22,000 Call: Premium up 96.4% to Rs 210. The contract has added 1.6 lakh shares in Open Interest.
- 21,000 Put: Premium down 81.9% to Rs 26.8. The contract has added 4.9 lakh shares in Open Interest.
- 21,500 Put: Premium down 76.1% to Rs 84.7. The contract has added 3.62 lakh shares in Open Interest.
Stock Reaction: Zee Entertainment
The Delhi High Court's division bench has dismissed Essel Group's appeal against the single judge order.
The court has allowed IDBI Trusteeship to sell Zee Entertainment and Dish TV's shares pledged with it.
The Essel Group had argued that the single judge order failed to account for the extraordinary situation caused by the Covid-19 pandemic.
The Division bench said that by no measure, the single judge order appears against the law.
Shares of Zee Entertainment gave up gains to fall as much as 1.6% to Rs 163.65, post the announcement.
Shares of Dish TV trade 2.7% higher at Rs 7.65.
Buzzing Stock: Coforge
- Second best performer on the Nifty I.T. Index
- Gains the most in over two months
- Trades at the highest level in four months
- Gains as much as 7% to Rs 1,649
- Snaps a two-day losing streak
- Has gained in eight out of the last 10 trading sessions
- Up 19% in the last 10 trading sessions
- Has more than doubled from its 52-week low of Rs 735 on March 24, 2020
- 13 out of the 23 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock now trades 15% higher than its 12-month consensus price target of Rs 1,392.1, implying a negative return potential
Stock Reaction: Maruti Suzuki
India's largest passenger car maker announced a voluntary recall of 1.34 lakh units of its WagonR (1 litre) and Baleno models, over a possible issue with the fuel pump.
The company will recall 56,663 units of WagonR manufactured between November 15, 2018 and October 15, 2019, it said in an exchange filing.
It will also recall 78,222 units of Baleno manufactured between January 8, 2019 and November 4, 2019.
The faulty parts will be replaced free of cost. Owners of the suspected vehicles will be contacted by the company's authorised dealers in due course of time.
Shares are trading near the highest point of the day, up 1.53% at Rs 5,860.
Covid-19 Impact: Sundaram Brake Lining
- Operations focused mainly on catering to export orders and domestic after market orders.
- Work has partially resumed in all the four plants.
- Domestic sales are expected to decline substantially.
- Exports now contribute 50% of the revenue and has helped sustain operations at about 60% utilisation levels from May.
- Revenue and profitability will be adversely impacted in FY21.
- Do not foresee any incremental risk on its liquidity position.
- Continue to service debt obligations as planned.
- Supply chain situation has improved post unlocking.
Shares are off the day's high after gaining as much as 2.5% to Rs 233.60.
I.T. Index Gains Most In Three Months
Earnings reaction: Delta Corp
The company reported a 74.1% decline in its revenue for the quarter ending June. It also reported a net loss of Rs 28.2 crore as compared to a net profit of Rs 42.5 crore during the same period last year.
The gaming and hospitality operations reported zero revenue during the quarter due to the Covid-19 enforced lockdown and subsequent travel restrictions.
However, the company reported a 60% growth in its online gaming revenue to Rs 57 crore.
In an exchange filing, the company said that Adda52 has seen strong traction and is growing at a faster pace.
It paid a licence fee of Rs 25.3 crore in the current quarter and has also made a representation to the Goa Government for waiver of the casino licence fee.
Shares are locked in an upper circuit of 5% at Rs 93.85.
Markets At 10:10 A.M.
- Benchmark indices extend gains towards the day's high
- Nifty up 1.4% at 10,755
- Sensex up 1.4% at 36,540
- Nifty Bank snaps 3-day losing streak; up 1.6% at 21,739
- Nifty Midcap Index up 0.8%
- Nifty Smallcap Index up 1.25%
- India Volatility Index down 2.8% at 25.9
- Nifty I.T. is the top sectoral gainer; up 4.1%
- Nifty Media, Metal and PSU Bank up over 1.2% each
- Wipro is the top Nifty gainer; up 15% - biggest single-day gain since 2004
- Bharti Airtel is the top Nifty laggard; down 1.6%
- 1,202 stocks on the NSE trade with gains while 453 decline
Money Market Update
The currency staged a rebound as well in today's session, in-line with that of the equity markets and weakness in the U.S. Dollar.
The rupee opened at 75.33 against the U.S. Dollar as compared to Tuesday's close of 75.43, which was a two-week low.
Trade data for the month of June will be reported today. Analysts estimate a trade deficit of $4 billion this month.
Within the bond markets, traders will watch out for the sale of treasury bills worth Rs 35,000 crore by the Reserve Bank of India.
Yield on the 10-year bond opened at 5.836% as compared to Tuesday's close of 5.787%.
Buzzing Stock: Hathway Cable & Datacom
- Second best performing stock on the Nifty 500 index
- Trades at the highest level since August 2015
- Gains as much as 19.4% to Rs 49.8
- Up for the fourth straight day
- Longest winning streak in a month
- Has gained 51.7% in the last four trading sessions
- Today's volumes are 10.4 times higher than its 30-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 82
- Has gained five times from its 52-week low of Rs 10.5 on March 24, 2020
Stock Reaction: Infosys
World's largest Defined Contribution (DC) asset manager Vanguard announced a partnership with the I.T. major as part of its ongoing strategy to enhance and evolve its full service DC business.
The strategic partnership will deliver a technology-driven approach to plan administration and Infosys will assume day-to-day operations supporting Vanguard's DC recordkeeping business, the company said in an exchange filing.
Our platform will create a new standard for the industry as we seek to drastically improve the retirement savings experience for plan participants and sponsors.Mohit Joshi, President, Infosys
Shares gained as much as 3.4% to Rs 810 and are among the top gainers on the Nifty 50 index.
Coronavirus India Updates
- India sees yet another record spike in new cases
- 29,429 cases reported in the last 24 hours
- Total cases now at 9,36,181
- Active cases now at 3,19,840
- Number of patients cured / discharged / migrated at 5,92,032
- Death toll rises to 24,309
- 582 deaths reported in the last 24 hours
- 20,572 patients recovered in the last 24 hours
Earnings Reaction: Wipro
It was an operationally strong quarter for the I.T. services company with revenue declining 5.3% to Rs 14,922 crore as compared to the previous quarter.
While revenue in U.S. Dollar terms fell 7.3% while net profit and Ebit rose 2.8% and 1.3% respectively.
The company will also be acquiring IVIA Servigos de Informatica - an I.T. solutions provider in Brazil for $22.4 million, a transaction likely to be completed in the quarter ending September 30, 2020.
Brokerage firm Citi has upgraded the stock to buy from neutral and also raised its price target to Rs 260 from Rs 230, citing attractive valuations, cost controls and a potential buyback as some key triggers.
Shares gained as much as 10% - the biggest single-day gain in four months to Rs 247.55. The stock is trading at its highest level in five months.
Opening Bell: A Small Rebound
Indian equity markets opened higher, in-line with its Asian peers, after falling the most in a month on Tuesday.
The S&P BSE Sensex opened 0.78% higher at 36,314 while the NSE Nifty 50 index opened 0.88% higher at 10,701. Both benchmarks fell nearly 2% in Tuesday's trade.
Banking stocks snapped a three-day losing streak with the Nifty Bank index opening 1.1% higher. The index fell over 1,400 points during the last three trading sessions. The I.T. index too has opened 1.3% higher. Other indices have opened flat but with a positive bias.
Broader markets have opened largely in-line with the benchmarks. The midcap and smallcap indices have opened 0.7% higher each.
The India Volatility Index has opened 9.1% lower at 24.19.
1,020 stocks on the National Stock Exchange opened with gains while 387 declined.
Latest On The Coronavirus
- Global cases cross 13.3 million
- Death toll rises to 5.77 lakh
- Anthony Fauci says young people are inadvertently spreading Covid-19
- Moderna's vaccine produced antibodies in all patients in early trial
- Tokyo to raise Covid-19 warning to the highest level
- New Zealand's PM says the country must be prepared for the virus to return to the community
- China to lift ban on local group tour
- 39 new cases reported in South Korea
- Los Angeles County reported 4,244 cases with 2,103 hospitalisations
- 10,745 confirmed cases in Texas on Tuesday - another daily record
Top Reads On Bloombergquint.com
How Did The Fund Flows Fare On Tuesday
Key Stocks In Focus
- Wipro: Reports a 7.3% decline in its U.S. Dollar revenue on a sequential basis for the quarter ended June. Operational performance better due to lower expenses. Ebit margins rose to 17.2% from 16.1% while I.T. services margins stood at 19% from 16.1%. Most segments saw a de-growth in revenue.
- Infosys: Vanguard announced a partnership with the company as part of its ongoing strategy to enhance and evolve its full-service defined contribution (DC) business. The partnership will deliver a technology-driven approach to plan administration and Infosys will assume day-to-day operations supporting Vanguard's DC recordkeeping business.
- SBI: Shareholders give nod to raise Rs 20,000 crore through FPO, private placement, QIP or any other method thereof.
- Yes Bank: Board approves allotment of 341.5 crore equity shares to anchor investors at the lower end of the price band of Rs 12 per equity share. Price may be subject to change upon determination of the offer price. 14 anchor investors like Bay Tree India Holdings, HDFC Life Insurance, Amansa Holdings, Hinduja Leyland Finance have been allotted shares. Board to meet on or post July 18 to determine the issue price and that for anchor investors as well.
- Wipro: To acquire IVIA Servigos de Informitica for $22.4 million. The target company provides I.T. solutions including system development, maintenance, consulting and project management services to clients in different sectors such as financial services, transportation, retail, healthcare and manufacturing in Brazil. The transaction is expected to be completed in the quarter ending September 30, 2020.
- Oberoi Realty: Board approves raising up to Rs 2,000 crore through equity sale and up to Rs 1,500 crore via debentures.
- Bharat Electronics: Signs MoU with Airports Authority of India to collaborate on addressing the emerging global opportunities in the airports business including those in the Asia Pacific region.
- Prestige Estates: Arm acquires 30.21% equity stake and optionally convertible preference shares representing 4.57% of preference share capital in DB Realtors (BKC).
- IPO Update: Rossari Biotech gets about three times the demand as compared to the shares offered. The issue closes today.
- Q4 Results Today: Minda Corporation
- Q1 Results Today: L&T Infotech, Bandhan Bank, Federal Bank, GTPL Hathway
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 Tuesday
- Benchmark indices posted biggest gain in more than a week.
- Late session surge led by Energy, materials and industrials sector.
- S&P 500 ened with gains of 1.3% - the highest in five weeks
- Dow Jones ended 2.1% higher, futures trade higher by 280 points
- U.S. Dollar fell to the lowest in five weeks. Bloomberg Dollar spot index fell 0.2%
- Yield on the 10-year treasury stood at 0.62%
- West Texas Intermediate crude rose 0.4% to $40.27 per barrel.
Get your daily fix of the global markets here.
Futures Indicate Rebound. Can It Sustain?
Good Morning!
Indian equity markets are likely to rebound after falling the most in a month on Tuesday. The Sensex and the Nifty 50 each had ended nearly 2% down.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.8% to 10,696 as of 7:35 a.m. on Wednesday.
Asian markets have opened higher in mid-week trade over optimism that progress is being made in developing a vaccine for Covid-19.
Moderna's Covid-19 vaccine produced antibodies in all patients tested in an initial safety trial.
Markets in Japan, Australia and South Korea trade with gains, while futures on the Dow Jones are trading higher by 285 points. Markets in China are underperforming.
A lot of stock specific activity, including Reliance Industries Ltd.'s annual general meeting, Yes Bank Ltd.'s follow-on public offer and corporate earnings of Wipro Ltd., Delta Corp. and Oberoi Realty Ltd. will be in focus. Mid-cap banks like Bandhan Bank and Federal Bank will report their first quarter numbers on Wednesday.
Treasuries rose, the U.S. dollar fell, while West Texas Intermediate crude gained 0.5% to $40.5 a barrel.
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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