KEY HIGHLIGHTS
Closing Bell: Back To Winning Ways
Indian equity markets recovered Wednesday's losses, ending the weekly options expiry session with gains of over 1%.
The S&P BSE Sensex ended 1.1% higher at 36,737 while the NSE Nifty 50 index ended 1.2% higher at 10,832. Both benchmark indices have now gained in six out of the last seven trading sessions.
Among sectoral indices, banking and metal stocks outperformed in today's trade. The Nifty metal index ended 1.9% higher while the Nifty Bank and the PSU Bank index gained 1.4% and 1.2% respectively.
The FMCG index was the only sectoral laggard, ending 0.3% lower. The other sectoral indices ended flat but with a positive bias.
The broader markets had a mixed day. The midcap index ended 0.4% higher while the smallcap index ended 1.1% higher.
India Volatility Index ended at a four-month low, down 5.1% at 24.75.
Market breadth remained in favour of the advances. 1,010 stocks on the NSE ended with gains while 799 ended with losses.
How Did The Sectoral Indices Fare
Buzzing Stock: Bharat Rasayan
- Trades at an all-time high
- Gains as much as 7.2% to Rs 9,359
- Up for the fourth straight day
- Longest winning streak in three months
- Up 22% in the last four trading sessions
- Today's volumes are 6.2 times higher than its 30-Day Average
- Stock in overbought territory with Relative Strength Index (RSI) at 86
- Has nearly tripled from its 52-week low of Rs 3,722 on August 5, 2019
Stock Reaction: Sterling & Wilson Solar
The company informed the exchanges that the promoters failed to repay the installment of Rs 500 crore out of the outstanding loans envisaged to be repaid by June 30.
The promoters in a separate exchange filing on June 26, had expressed apprehension regarding the same. Promoters say that the repayment may spill beyond a few weeks due to Covid-19.
The Board has insisted that the promoters provide the necessary security in respect to the June installment in an expeditious manner.
Shares are locked in a 5% lower circuit at Rs 244.8, snapping a four-day gaining streak.
Earnings Expectations: TCS Q1FY21
- Revenue in U.S. Dollar terms seen 5.6% lower at $5,140 million
- Revenue in rupee terms seen 2.6% lower at Rs 38,910 crore
- Ebit seen 5.9% lower at Rs 9,432 crore
- Ebit margin seen at 24.2% from 25.1%
- Net profit seen 4.4% lower at Rs 7,694 crore
- All estimates are Bloomberg estimates and compared on a sequential basis
Key Factors At Play For TCS:
- Delay in project execution, new deal signings may lead to weakness
- Higher exposure to Emerging Markets may weigh on earnings
- BFSI vertical may decline as indicated owing to uncertainties
- Retail vertical to remain volatile
- Lower revenue, utilisation to impact margins
- Gains from a weak rupee and deferred pay hikes to counter margin contraction
What To Watch For TCS:
- Change in operating conditions under Covid-19 environment
- Visibility in revenue
- Client budgets and spending trends
- Pace of project execution under new setting
- Outlook on employee costs and onboarding
Buzzing Stock: Motilal Oswal Financial Services
- Trades at the highest level in four months
- Gains as much as 6.1% to Rs 720
- Up for the eighth straight day
- Longest winning streak since December 2018
- Has gained 22% in the last eight trading sessions
- Today's volumes are 3.2 times higher than its 30-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 76
- Has gained 66% from its 52-week low of Rs 426 on March 24, 2020
- All four analysts tracking the stock have a buy recommendation
- The stock now trades 6.1% above its 12-month consensus price target of Rs 664.5, implying a negative return potential
Markets At 2:25 P.M.
- Benchmark indices at the day's high
- Nifty up 0.9% at 10,806
- Sensex up 1% at 36,707
- Nifty Bank up 1% at 22,805
- Nifty Midcap index up 0.2%
- Nifty Smallcap index up 1%
- India Volatility Index down 3.4% to 25.2
- Nifty Metal remains top sectoral gainer; up 2.2%
- Nifty Auto, Nifty FMCG and Nifty Media fall as much as 0.4%
- Hindalco remains the top Nifty gainer; up 6%
- Bharti Infratel remains the top Nifty laggard; down 2.7%
- 959 stocks on the NSE trade with gains while 808 decline
Stock Reaction: Arvind Fashions
Flipkart Group will invest Rs 260 crore to purchase a significant minority stake in Arvind Youth Brands - owner of Flying Machine. AVB is the recently formed subsidiary of Arvind Fashions.
In a joint statement, both companies said that the investment is to build on the long-standing engagement between the two organisations.
The transaction is subject to customary conditions precedent, the statement said.
Shares are trading 3.5% higher at Rs 175 after briefly being locked in a 5% upper circuit, post the announcement.
Money Market Update
The currency snapped a three-day losing streak in today's session, ending flat but with a positive bias.
The rupee ended at 74.99 against the U.S. Dollar, as compared to Wednesday's close of 75.02. The currency traded in a narrow range through the session.
Seven of the rupee's peers managed to outperform the greenback in today's session.
Yield on the 10-year government bond ended at 5.773% as compared to its opening level of 5.765%.
India Plans Share Sale In Coal India, IDBI Bank
The government is planning to raise as much as Rs 20,000 crore by selling stake in Coal India and IDBI Bank, Bloomberg News reports citing officials familiar with the matter.
The proposal involves a share sale depending on market sentiment. In case of Coal India, if valuations are not attractive, the company will buyback shares from the government, the source said.
LIC of India had purchased 51% stake in IDBI Bank last year, leaving the government with 47% stake. The government holds more than 66% stake in Coal India. It had previously sold a 10% stake in the world's largest coal producer in January 2015, mopping up Rs 22,550 crore
Shares of IDBI Bank ended at a 5% lower circuit at Rs 46, while those of Coal India ended 1.5% lower at Rs 130.8.
Stock Update: Manappuram Finance
The company has allotted 2,500 secured, redeemable NCDs having a face of Rs 10 lakh each on a private placement basis. The NCDs, aggregating to a total of Rs 250 crore will be listed on the Bombay Stock Exchange.
Series A of the NCDs will have a tenor of 10 years while Series B will have a tenor of 18 months. Both coupons will have an interest rate of 9.5% per annum and 8.75% per annum respectively.
Shares are trading 0.9% higher at Rs 158.95, up for six out of the last seven trading sessions.
F&O Snapshot: Active Options Contracts
- Nifty July futures add 12.5% and 14 lakh shares in Open Interest
- Nifty Bank July futures add 11.5% and 1.7 lakh shares in Open Interest.
Nifty: Today's Expiry
- 10,800 Call: Premium down 61.3% at Rs 7.6. The contract has added 36.4 lakh shares in Open Interest.
- 10,700 Put: Premium down 83% to Rs 9.25. The contract has added 48.8 lakh shares in Open Interest.
- 10,900 Call: Premium down 93% to Rs 0.5. The contract has added 34.9 lakh shares in Open Interest.
Nifty Bank: Today's Expiry
- 24,000 Call: Premium down 93% to Rs 0.3. The contract has added 4.9 lakh shares in Open Interest.
- 23,000 Call: Premium down 77.1% to Rs 14.6. The contract has added 14 lakh shares in Open Interest.
- 22,500 Put: Premium down 87.4% to Rs 20.45. The contract has added 14.6 lakh shares in Open Interest.
Stock Reaction: BHEL
The company has commissioned the world's first Solar PV Plant at Bina, Madhya Pradesh for the Indian Railways, it said in an exchange filing.
It is for the first time that solar power is directly being used for traction appliances. The plant will feed power to the traction systems of the Indian Railways.
The project was developed on a turnkey basis and on vacant land of the railways.
Shares are trading at the highest point of the day, up 4.5% at Rs 43.1.
Positive Start To Trade In Europe
Benchmark indices in Europe have opened higher, snapping a two-day losing streak, tracking peers in Asia.
The Stoxx 600 has opened 0.4% higher with most sectors opening with gains. Miners, utilities are the underperformers in early trade.
Asian markets have ended mixed while futures on the Dow Jones trade lower by 40 points.
Brent crude is unchanged at $43.27 per barrel while gold is 0.2% higher at $1,813/Oz.
Let's take a look at how benchmark indices have opened across Europe:
- Euro Stoxx 50 up 0.2% at 3,291
- DAX up 1.2% at 12,639
- CAC up 0.5% at 5,006
- FTSE 100 up 0.2% at 6,169
- IBEX 35 up 0.4% at 7,354
Stock Reaction: Praj Industries
The company has announced its foray into the global renewable chemicals and materials (RCM) industry.
The company is developing technologies to produce bio-based Renewable Chemicals and Materials (RCM), the company said in an exchange filing.
The RCM industry is expected to reach $200 billion over the next decade, at an estimated CAGR of 11-12%.
It has signed an MoU with the National Chemical Laboratory (NCL) for jointly working on promising project opportunities in the space.
Shares surged to the day's high of 5.7% at Rs 70.7, post the announcement.
Stock Reaction: ABB Power Products & Systems
The company has informed the exchanges that it has won a Rs 120 crore order from the Indian Railways.
It will deliver transformers to the government's electric locomotive manufacturer 'Chittaranjan Locomotive Works (CLW) for the production of 400 passenger and freight locomotive engines, the company said in an exchange filing.
The transformers will be split between the 6,531 kVA for the goods locomotive engines and the 7,775 kVA for passengers.
Shares are currently unchanged at Rs 841, after rising as much as 1.1%.
Covid-19 Impact: JBM Auto
- Some pending orders on hold as per requirements of buyers.
- Revenue, profitability to be impacted in Q1FY21
- Business should normalise during Q3 and Q4 of FY21
- Temporary reduction in demand which should normalise by Q4FY21
- Cash position is challenging and may remain stressed
- Will be able to serve debt and other financing arrangements
Shares are fluctuating between gains and losses, currently trading little changed at Rs 214.
Markets At Noon
- Benchmark indices remain in a range but hold on to gains
- Nifty up 0.62% at 10,772
- Sensex up 0.7% at 36,579
- Nifty Bank up 1.1% at 22,831
- Nifty Midcap index up 0.1%
- Nifty Smallcap index up 0.8%
- India Volatility index down 2.5% to 25.46
- Nifty Metal remains top sectoral gainer; up 2.3%
- Most other sectoral indices give up gains to trade flat
- Hindalco remains the top Nifty gainer; up 4.6%
- Bharti Infratel is the top Nifty laggard; down 2%
- 989 stocks on the NSE trade with gains while 737 decline
Buzzing Stock: IRB Infra
- Trading at the highest level since May 2019
- Gains as much as 5.7% to Rs 124.2
- Up for the seventh straight day
- Longest winning streak since October 2019
- Has gained in 12 out of the last 14 trading sessions
- Up 74% in the last 14 trading sessions
- Today's volumes are 2.3 times higher than its 30-day average
- Stock is in overbought territory with Relative Strength Index (RSI) at 85
- Has nearly tripled from its 52-week low of Rs 45.6 on March 25, 2020
- 9 out of the 14 analysts tracking the stock have a buy recommendation; 1 sell call
- The stock now trades 5.1% above its 12-month consensus price target of Rs 117, implying a negative return potential
All But Two Stocks On The Metal Index Gain
Stock Update: PI Industries QIP
The company has approved the closure of its QIP on Wednesday, at a price of Rs 1470 per share. The issue price was a 4% discount to its floor price and 11% to Tuesday's closing price.
The company has shared the list of allottees, who have been allotted more than 5% of the securities offered in the QIP.
The list goes as:
- Smaller Cap World Fund and American Funds Insurance Series - 11.25%
- SBI Mutual Fund - 8.75%
- ICICI Prudential Mutual Fund - 7.5%
- Aditya Birla Sun Life Mutual Fund - 6.75%
- Amundi Funds - 5%
- Axis and Sundaram Mutual Fund - 5% each
Shares are trading 0.5% higher at Rs 1,671.5.
Brokerage Reaction: Bharat Electronics
BofA Securities downgraded the defence player to underperform from its previous buy rating, and also cut its price target to Rs 87 from the earlier Rs 89, citing lack of near-term growth triggers.
The note says that it does not see any visibility of large order wins in the pipeline for the company which may result in a compression of margins due to lower revenues and deterioration of its working capital cycle.
The brokerage said that the stock is now trading at its long-term average valuations post its recent rally.
FY21-22E EPS estimates were cut by 3%, the note said.
Shares fell as much as 3.8% to Rs 99.65. The stock has rallied 30% over the last 15 trading sessions.
Buzzing Stock: HUDCO
- Top performing stock on the Nifty Midcap index
- Gains as much as 8.66% to Rs 38.9
- Trades at the highest level in five months
- Up in four out of the last five trading sessions
- Has gained in seven out of the last 10 trading sessions
- Up 36% in the last 10 trading sessions
- Has doubled from its 52-week low of Rs 18 on March 24, 2020
- Both analysts tracking the stock have a buy recommendation
- Return potential for the stock as per Bloomberg data is 37%
Stock Reaction: State Bank of India
The executive committee of the bank's central board has given its approval to invest in Yes Bank's FPO, the lender said in an exchange filing.
The bank will invest a maximum of Rs 1,760 crore in the issue.
The board has also approved the formation of a joint venture entity where SBICAP will invest in Investec Capital Services, India to form a JV.
It will also transfer SBICAP Securities' institutional equities broking and research business to the proposed JV entity.
Shares gained as much as 1.8% to Rs 195.45, up for the fourth day in a row.
Stock Reaction: Tata Steel Q1 Business Update
- Sales volume for India business at 2.92 million tons from 3.96 million tons.
- Sales volume for European business at 1.94 million tons from 2.26 million tons.
- Sales volume for South-east Asian business at 0.42 million tons from 0.62 million tons.
Management Commentary From Tata Steel:
- Capacity utilisation of upstream facilities in India was adjusted to about 50% in April while downstream units were closed.
- Utilisation levels have been ramped up to 80% by end of June.
- Exports were ramped-up significantly to counter the closure of Indian markets in April and May.
- Exports will form 50% of total sales volume in Q1FY21.
- Sales improved significantly in June and proportion of domestic sales will rise from Q2FY21.
- Urban markets showing slow recovery.
- Retail sales in rural markets seeing improved demand.
- Production levels in Europe were ramped down to 70%
Shares are near the day's high, gaining as much as 4.3% to Rs 348.5, up for the second straight day.
Markets At 10:10 A.M.
- Benchmark indices look to gain momentum
- Nifty up 0.64% at 10,774
- Sensex up 0.7% at 36,574
- Nifty Bank up 1.1% at 22,829
- Nifty Midcap Index up 0.6%
- Nifty Smallcap Index up 1%
- India Volatility Index down 2.5% to 25.45.
- Nifty Metal is the top sectoral gainer; up 3%
- Nifty PSU Bank is the other sectoral gainer; up 1%
- Nifty Pharma and Nifty Realty up 0.6% each
- Hindalco is the top Nifty gainer; up 4.3%
- Four out of the top five Nifty 50 gainers are metal stocks
- Hero MotoCorp is the top Nifty laggard; down 1.5%
- 1,038 stocks on the NSE trade with gains while 613 decline
Money Market Update
The currency opened flat in today’s session, after ending lower for the third straight day on Wednesday.
The rupee opened at 74.94 against the U.S. Dollar as compared to Tuesday's close of 75.02. It was the second worst performing currency in Wednesday's session.
The currency had opened higher in Wednesday's session as well, before giving up gains.
Yield on the 10-year bond opened at 5.765% as compared to Wednesday's closing of 5.778%.
Stock Reaction: Gufic Biosciences
The company has informed the exchanges that the South African Health Products Regulatory Authority has given approval to the company to manufacture Vancomycin.
This comes after the company's manufacturing facility in Navsari, Gujarat was inspected by the National Institute of Pharmacy and Nutrition, Hungary.
The company can now expand its business in South Africa, post the approval.
Shares gained as much as 5.44% to Rs 79.50.
Coronavirus India Updates
- India reports 24,879 cases in the last 24 hours
- Total number of cases now at 7,67,296
- Active cases at 2,69,789
- Number of patients cured / discharged / migrated at 4,76,378
- Death toll rises to 21,129
- 487 deaths reported in the last 24 hours
- 19,547 patients recovered in the last 24 hours
Earnings Reaction: South Indian Bank Q1FY21
- Net Interest Income up 10% to Rs 586.88 crore
- Net profit up 11% to Rs 81.65 crore
- Other income up 57% to Rs 28.49 crore
- Higher other income contributes to profitability
- Gross NPA at 4.93% from 4.98% in the previous quarter
- Net NPA at 3.09% from 3.34% in the previous quarter
- Provisions down to Rs 29.3 crore from Rs 72.4 crore last quarter
- Carrying additional provision of Rs 29.1 crore to meet any future impact of Covid-19
- Net profit and NII numbers compared on a year-on-year basis
Shares are locked in an upper circuit of 5% at Rs 8.37, snapping a two-day losing streak.
Stock Reaction: Yes Bank
The lender has informed the exchanges that it has filed a Red Herring Prospectus with regards to its Follow-on Public Offer (FPO).
The bank aims to raise Rs 15,000 crore through the offer via fresh issue of equity shares. The issue will open on July 15 and close on July 17, 2020.
Anchor investors can bid on July 14, the bank said in its statement.
A portion of Rs 200 crore has been earmarked for employees of the bank.
Shares are off the day's high after gaining as much as 5.6% to Rs 27.50. The stock now trades 2.3% higher, up for the second straight day.
Opening Bell: A Positive Start
Indian equity markets opened higher after snapping a five-day rally on Wednesday.
The S&P BSE Sensex opened 0.33% higher at 36,450 while the NSE Nifty 50 index opened at 10,755, up 0.5%. Both benchmark indices fell nearly 1% on Wednesday.
All sectoral indices opened with gains, led by the Realty index, which opened 1.4% higher. The media, metal, PSU Bank index opened 0.8% higher while the FMCG index was flat.
Broader markets opened in-line with the benchmarks. The Midcap index opened 0.4% higher while the smallcap index opened 0.6% higher.
1,075 stocks on the NSE have opened with gains while 494 trade with losses.
Latest On The Coronavirus
- Cases cross the 12 million mark
- Beijing reports no new case for the third straight day
- Infections in the U.S. cross three million
- California and Texas continue to see a surge in cases and deaths
- Mexico reports 6,995 new cases; taking the total past 2.75 lakh
- 11,694 new cases reported in California
- More than 200 fatalities reported in Iran
Top Reads On BloombergQuint.com
Also Read: CFO Leaders: TCS And The Talent Cloud
How Did The Fund Flows Fare On Wednesday
Key Stocks In Focus
- ICICI Bank: Board approves raising Rs 15,000 crore through equity. The fund raise may happen in one or more tranches via private placement, preferential issue, FPO or a combination thereof.
- State Bank of India: The executive committee of the bank's central board approves a maximum investment of Rs 1,760 crore in Yes Bank's FPO.
- State Bank of India: SBICAP to invest in Investec Capital Services India to form a Joint Venture entity. SBICAP Securities' institutional equities broking and research business will be transferred to the proposed entity.
- PI Industries: Board approves closure of QIP. Issue price has been fixed at Rs 1,470 per share, which is a 4.2% discount to the floor price and a discount of 11% to Wednesday's closing price.
- Can Fin Homes: Board to consider raising funds via equity and debt on July 17.
- TCPL Packaging: Announces that the entire promoter shareholding is free from encumbrance.
- Sterling & Wilson Solar: Promoters fail to repay the installment of Rs 500 crore out of the outstanding loans envisaged to be repaid by June 30. The promoters in a separate exchange filing on June 26, had expressed apprehension regarding the same. Promoters say that the repayment may spill beyond a few weeks due to Covid-19. The Board has insisted that the promoters provide the necessary security in respect to the June installment in an expeditious manner.
- Gufic Biosciences: Gets approval from South African Heath Products Regulatory Authority to manufacture Vancomycin after its manufacturing facility in Navsari was inspected by the National Institute of Pharmacy and Nutrition, Hungary. The company can now expand its business in South Africa.
- Non-Nifty Earnings Today: Arvind Fashions, Sadbhav Engineering, MEP Infra
For all that you need to know going into trade today, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
U.S. Markets On Wednesday
- Benchmark indices end with gains; look past tensions between U.S. and China
- S&P 500 climbs to a one-month high
- Nasdaq ends at a record led by megacaps like Apple and Amazon
- Pandemic-sensitive sectors like aviation remains under pressure
- Confirmed Covid-19 cases in the U.S. crossed the three million mark
- Weekly jobless claims data to be reported today
- West Texas Intermediate crude rose 0.6% to $40.84 per barrel
Get your daily fix of the global markets here.
A Day Of Consolidation?
Good Morning!
The rally in Indian equity markets paused on Wednesday as the indices ended with losses. The weekly options contracts of Nifty and Nifty Bank are set to expire on Thursday.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.5% to 10,734 as of 7:45 a.m.
Asian markets are mostly higher this morning as investors continue to place their faith in policy and shrugged off simmering tensions between the U.S. and China.
Markets in Hong Kong, Australia and South Korea traded higher, while those in Japan declined.
Futures on the Dow Jones trade lower by 30 points after the benchmark ended 0.7% higher on Wednesday.
The offshore Yuan rose above the 7-per-dollar mark to its highest since mid-March, while treasuries remained steady. Gold held above the $1,800/Oz level.
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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