KEY HIGHLIGHTS
Closing Bell: A Subdued Close
Indian equity markets failed to hold on to opening gains, ending significantly off the day's high. Private financials were the biggest laggards in today's session.
The S&P BSE Sensex ended 0.27% higher at 36,693 while the NSE Nifty 50 index ended at 10,815, up 0.44%. Both benchmark indices fell 330 and 80 points respectively from the highest point of the day.
Banks underperformed in today's trade with the Nifty Bank and the PSU bank index ending 1.3% and 1.6% lower respectively. Realty stocks were the other laggards with the index ending 1.% lower.
The outperformers in today's trade were I.T., FMCG and Metal stocks. The I.T. index ended 1.7% higher while the FMCG and Metal index gained 1.3% and 1.5% respectively.
HDFC twins ended the session off their respective lows but ended 2% lower and contributed the most in terms of points to the Nifty downside.
Broader markets remained flat in today's session. The midcap index ended 0.2% lower while the smallcap index ended little changed.
Market breadth remained in favour of the laggards. 1,079 stocks on the NSE ended with losses while 777 ended with gains.
How Did The Sectoral Indices Fare
Buzzing Stock: Laurus Labs
- Trades at the highest level since July 2017
- Gains as much as 5% to Rs 628
- Up for the seventh straight day
- Longest winning streak in six months
- Has gained 19% in the last seven trading sessions
- Today's volumes are 1.3 times higher than its 30-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 79
- Has more than doubled from its 52-week low of Rs 295 on March 13, 2020
- 9 out of the 10 analysts tracking the stock have a buy recommendation; no sell calls
- The stock now trades 3.3% above its 12-month consensus price target of Rs 605.5, implying a negative return potential
Stock Reaction: BASF India
The company approved the acquisition of 100% stake in BASF Performance Polyamides from BASF Nederland B.V. and BASF SE.
The deal is for a consideration not exceeding Rs 305 crore. BASF Performance Polyamides is into the business of manufacturing and trading of performance polyamides and has a manufacturing site in Gujarat.
Shares gained as much as 11.9% - the most in four months to Rs 1,335, snapping a four-day losing streak.
FMCG Index Holds On To Gains
Google Announces $10 Billion For India Digitisation Fund
Google CEO Sundar Pichai announced a $10 billion Google for India Digitisation Fund to help accelerate the country's digital economy, Bloomberg News reports.
Google will invest in India over the next five to seven years.
Investments will focus on:
- Enabling affordable access and information for every Indian in their own language.
- Building new products and services that are deeply relevant to India's unique needs.
- Empowering businesses as they continue to embark on their digital transformation.
- Leveraging technology and AI for areas like health, education and agriculture.
Covid-19 Impact: Mahanagar Gas
- Profitability to be impacted in FY21 considering lower sales volumes.
- Liquidity position may not be sizeable impacted.
- Company is debt free and has treasury surplus.
- Earnings on treasury surplus can be lower due to conditions in the financial markets.
- Sales volumes in the last few days of FY20 was impacted due to the lockdown.
- Customer sentiment is low.
- Anticipate further loss of 2-3 months of working due to setting in of the monsoon.
Shares are little changed after gaining as much as 1.4% to Rs 983.40.
Buzzing Stock: Indraprastha Gas
- Trades at a three-month low
- Falls as much as 1.5% to Rs 401.95
- Down for the sixth straight session
- Longest losing streak since June 2018
- Has declined 10% in the last six trading sessions
- Brokerage firm UBS downgraded the stock; terming it the least prefered among CGD players
- Today's volumes are 23% below its 20-day average
- Stock in oversold territory with Relative Strength Index (RSI) at 28
- 18 out of the 36 analysts tracking the stock have a buy recommendation; 9 sell calls
- Return potential of the stock as per Bloomberg data is 19.9%
Markets At 2:10 P.M.
- Benchmark indices give up gains
- Nifty unchanged at 10,769
- Sensex unchanged at 36,578
- Nifty Bank down 1.6% at 22,045
- Nifty Midcap Index down 0.4%
- Nifty Smallcap Index down 0.3%
- India Volatility Index up 3.6% to 25.84
- Nifty PSU bank is the top sectoral laggard; down 1.8%
- Nifty Realty is the other sectoral laggard; down 1.5%
- Nifty I.T. is off the day's high but remains top sectoral gainer; up 1.3%
- Nifty FMCG is the other sectoral gainer; up 1.1%
- Tech Mahindra remains the top Nifty gainer; up 4%
- Bajaj Finance & HDFC Bank are the top Nifty laggards; down 2.5% each
- 711 stocks on the NSE trade with gains while 1,108 decline
Money Market Update
The currency ended flat in today's session after trading in a narrow range throughout the day.
The rupee ended at 75.19 against the U.S. Dollar as compared to Friday's close of 75.20.
Four of the rupee's peers in the Emerging Market bASket underperformed the currency in today's session.
Yield on the 10-year Government bond ended at 5.779% as compared to the opening level of 5.759%.
Yes Bank CEO On Plans Post Capital Raising
Active Stock Options
- Reliance Industries' 2,000 Call: Premium up 47.2% to Rs 56.75. The contract has added 5 lakh shares in Open Interest.
- State Bank of India's 200 Call: Premium down 16.5% to Rs 7.1. The contract has added 12.5 lakh shares in Open Interest.
- Bajaj Finance's 3,500 Call: Premium down 13.6% to Rs 122.65. The contract has added 5.5 lakh shares in Open Interest.
Earnings Reaction: IRCTC
The catering, tourism and ticket booking unit of the Indian Railways reported a 79% growth in its net profit for the quarter ended March.
Margins rose to 34.4% from 14.2% due to lower other expenses and catering expenses. Other expenses for the company fell to Rs 41.5 crore from Rs 89.8 crore.
While revenue for the catering segment fell 20%, that of the Rail Neer business grew 19%. The company's internet ticketing revenue nearly tripled compared to the previous year. Tourism revenue also grew 23% compared to the previous year.
The board declared a dividend of Rs 2.5 per equity share post the earnings.
Shares gave up gains of as much as 3% and now trade little changed at Rs 1,403.5.
HDFC Bank Leads Losses On The Nifty Bank Index
Covid-19 Impact: Repco Home Finance
- Revenue and profitability will be impacted due to the lockdown.
- Has been servicing debt and other financial obligations during the lockdown.
- Not opted for any moratorium offered by its lending institutions.
- Collection of EMIs have been postponed in some accounts due to the moratorium.
- There was hardly any business in April. Saw some pick-up in May and further pick-up in June. However, it remains below normal levels.
- Facing tough competition from banks and other institutions which are providing loans at attractive rates.
Shares are at the day's low, falling as much as 2.4% to Rs 126.7, down for the second straight day.
European Markets Open Higher
Markets in Europe opened higher, continuing Friday's intraday reversal to gain for the second straight day.
The Stoxx 600 index opened 0.8% higher led by banks, auto and travel stocks.
Asian markets have ended their day on a positive note while futures on the Dow Jones are trading higher by 140 points.
Brent crude trades 0.9% higher at $42.86 per barrel while gold trades 0.5% higher at $1,807/Oz.
Let's take a look at how the European markets are faring at open:
- Euro Stoxx 50 up 1.2% at 3,335
- DAX up 1.4% at 12,811
- CAC up 1.13% at 5,026
- FTSE 100 up 1.3% at 6,174
- IBEX 35 up 1.2% to 7,411
How Are The Sectoral Indices Faring
Stock Reaction: Clariant Chemicals
The synthetic, organic and pigment dyestuffs manufacturer announced a special interim dividend of Rs 140 per share at a board meeting held on Saturday, July 11.
The record date for the same has been set at July 19, 2020.
The company recently concluded the sale of its masterbatches business to PolyOne Polymers India on a going concern basis through a slump sale, the company said in its exchange filing.
Shares gained as much as 18.2% - the biggest single-day gain in 18 years to Rs 575. The stock is now trading at the highest level since March 2018 and is up for the fifth day in a row.
Buzzing Stock: Dr Lal Pathlabs
- Top gainer on the Nifty Midcap index
- Trades at an all-time high
- Gains as much as 7.7% to Rs 1,920
- Biggest single-day gain since May 2018
- Snapped a five-day winning streak on Friday
- Has gained in six out of the last seven trading sessions
- Up 20% in the last seven trading sessions
- Today's volumes are five times higher than its 30-day average
- Has gained more than 85% from its 52-week low of Rs 1,035 on July 16, 2019
- 11 out of the 19 analysts tracking the stock have a buy recommendation; 6 sell calls
- The stock trades 16.8% above its 12-month consensus price target of Rs 1,569.75, implying a negative return potential
Stock Reaction: HDFC Bank
India's largest private lender has conducted a probe into allegations of improper lending practices and conflict of interests in its vehicle-financing operation, Bloomberg News reports, citing people familiar with the matter.
The lender decided against proceeding with an earlier proposal to extend the employment of Ashok Khanna, associated with the bank for 18 years, after the investigation was complete.
The vehicle financing unit, headed by Khanna had outstanding loans of more than $16 billion as of March 31.
Khanna was due to retire in 2017 but kept getting extensions due to the importance of the unit he headed, which accounts for more than 10% of the total loan book.
Shares fell as much as 2% to Rs 1,083 and are the top laggards on the Nifty 50 index.
Markets At Noon
- Benchmark indices off the day's high
- Nifty up 0.55% at 10,827
- Sensex up 0.53% at 36,790
- Nifty Bank down 1% at 22,168
- Nifty Midcap and Smallcap index give up gains; trade little changed
- India Volatility Index up 1.5% to 25.32
- Nifty PSU Bank and Nifty Realty are the other sectoral laggards; down over 1.5% each
- Nifty I.T. remains the top sectoral gainer; up 1.7%
- Nifty FMCG and Nifty Metal gain 1% each
- Tech Mahindra remains the top Nifty gainer; up 3.8%
- HDFC Bank is the top Nifty laggard; down 1.6%
- 799 stocks on the NSE trade with gains while 971 decline
Earnings Reaction: SAIL
The company reported a 12.5% decline in its revenue for the quarter ended March. Net profit rose 4.8 times due to inventory gain of Rs 4,120.9 crore.
It also had an exceptional loss of Rs 771.8 crore in the current quarter due to write-down of inventory.
Revenue from most of SAIL's major plants including Bhilai and Durgapur declined on a year-on-year basis.
Brokerage firm Morgan Stanley has maintained its underweight rating on the stock with a price target of Rs 27. It has cited high leverage as one of the major concerns with regards to the company.
Shares fell as much as 1.6% to Rs 36.3, post the announcement.
F&O Snapshot: Active Options Contracts
- Nifty July futures add 4.5% and 5.25 lakh shares in Open Interest.
- Nifty Bank July futures add 22.3% and 3.61 lakh shares in Open Interest.
Nifty: July 16 Expiry
- 10,900 Call: Premium up 19.7% to Rs 61.1. The contract has added 2.1 lakh shares in Open Interest.
- 11,000 Call: Premium up 17.4% to Rs 31. The contract has added 4.7 lakh shares in Open Interest.
- 10,800 Put: Premium down 37.7% to Rs 77.65. The contract has added 14.7 lakh shares in Open Interest.
Nifty Bank: July 16 Expiry
- 22,000 Put: Premium up 6.6% to Rs 239. The contract has added 3 lakh shares in Open Interest.
- 23,000 Call: Premium down 33.2% to Rs 127.95. The contract has added 4.85 lakh shares in Open Interest.
- 22,500 Put: Premium up 12.1% to Rs 486.4. The contract has added 1.8 lakh shares in Open Interest.
Stock Reaction: Yes Bank
The recently-rescued private lender fell sharply in today's trade after it offered a steep discount to its follow-on public offer.
The lender set its price range for the offer between Rs 12-13, which is a 55% discount to the previous closing price.
The offer will be open for subscription between July 15-17.
"The gap is so much that all are trying to sell the stock on a delivery basis at higher rates and plan to purchase it at a lower rate in the FPO," Rahul Sharma of Equity99 advisors told Bloomberg News.
Shares fell as much as 17.8%, the most in four months to Rs 21.
Covid-19 Impact: Kalpataru Power
- Impact on revenue was Rs 300 crore for FY20.
- The same will accrue with some delay in the coming financial year as these are project based revenues.
- Not availed any moratorium announced by the RBI.
- Strong order book in excess of Rs 12,100 crore provides multi-year revenue and cash flow visibility.
- Low debt-equity ratio of 0.38 as on March 31, 2020.
- Ability to service debt obligations is sound.
- Short-term disruptions to supply chain needs to be factored in.
Shares fell as much as 1.4% to Rs 259.1, post the announcement.
Morgan Stanley To Lease Mumbai Office Space From Oberoi Realty
Morgan Stanley has reached a deal to lease up to 1.1 million square feet of office space for 9.5 years from Oberoi Realty, the realty company said in an exchange filing.
The dal will consolidate Morgan Stanley's Mumbai Global In-house Centre operations to a single campus in the city.
The campus will be located in Goregaon, at the company's Commerz III building and will be ready in 2023.
Shares are trading near the day's low falling as much as 1.7% to Rs 360, down for the second straight day.
Stock Reaction: Dilip Buildcon
The construction company has been declared the L1 bidder for a tender floated by the NHAI for a new HAM project worth Rs 882 crore in Gujarat.
The project involves four-laning of the Dhrol-Bhadra Patiya section and has to be completed within a period of 24 months, it said in an exchange filing.
Shares gained as much as 5.5% to Rs 299, before cooling off.
Buzzing Stock: Neuland Laboratories
- Top gainer on the BSE Smallcap index
- Gains as much as 15.1% to Rs 675
- Biggest single-day gain since February 2019
- Trading at the highest level since May 2019
- Up for the third straight day
- Has gained 25% in the last three trading sessions
- Best three-day returns for the stock since February 2019
- Today's volumes are 4.5 times higher than its 30-day average
- Stock is in overbought territory with Relative Strength Index (RSI) at 77
- Has nearly tripled from its 52-week low of Rs 247 on March 13, 2020
- Three out of the four analysts tracking the stock have a buy recommendation
- The stock trades 16.7% above its 12-month price target of Rs 536, implying a negative return potential
Just Dial: The Only Laggard On The Nifty I.T. Index
Stock Reaction: Steel Strips Wheels
The company has won new orders for the truck and caravan trailer market from the European Union and the U.S.
The order comprises of 16,000 steel wheels, and will be executed in August from the company's Chennai plant, it said in an exchange filing.
The of these orders is worth 1.78 lakh Euros. The company also said that it is on course to achieve 25% growth in the export segment year-on-year in FY21.
Shares gained as much as 4% to Rs 456, post the announcement.
Stock Reaction: Reliance Industries
Qualcomm Ventures - an investment arm of Qualcomm will be investing Rs 730 crore in Jio Platforms for a 0.15% stake, the company said in an exchange filing.
The deal has been done at an equity valuation of Rs 4.91 lakh crore and an enterprise valuation of Rs 5.16 lakh crore.
Qualcomm offers deep technology knowhow and insights that will help us deliver on our 5G vision and the digital transformation of India for both people and enterprises.Mukesh Ambani, Chairman, Reliance Industries
Qualcomm joins the list of marquee investors to whom Jio Platorms has now sold over 25% stake.
Shares gained as much as 3.5% to Rs 1,944 and are trading at an all-time high, up for the third straight day.
Markets At 10:10 A.M.
- Benchmark indices trade with gains
- Nifty up 0.9% at 10,863
- Sensex up 0.9% at 36,919
- Nifty Bank up 0.3% at 22,461
- Nifty Midcap Index up 0.5%
- Nifty Smallcap Index up 0.3%
- India Volatility Index up 1.4% to 25.3
- Nifty I.T. is the top sectoral gainer; up 1.7%
- Nifty Auto is the other sectoral gainer; up 1.2%
- Nifty FMCG and Nifty Media up 1%
- Nifty PSU Bank and Nifty Realty give up gains; turn negative
- Tech Mahindra is the top Nifty gainer; up 4.1%
- HDFC is the top Nifty laggard; down 0.8%
- 991 stocks on the NSE trade with gains while 693 decline
Money Market Update
The rupee opened flat in today's session after ending as the worst performing currency in Asia last week.
The currency opened at 75.18 against the U.S. Dollar as compared to Friday's close of 75.20.
RBI Governor Shaktikanta Das on Saturday said that the economic impact of the pandemic has made a recapitalisation plan for public and private banks necessary.
Yield on the 10-year government bond opened at 5.759% as compared to Friday's close of 5.773%.
Within the Bond markets, traders will look forward to the announcement of CPI data for the month of June. Analysts expect CPI in June to rise 5.3%.
Applications worth Rs 10,000 crore worth of funding have been received from NBFCs, as per the government stimulus plan, according to the Ministry of Finance.
Covid-19 Impact: Ajanta Pharma
- Significantly high material, freight costs impacting business.
- All manufacturing units currently in operation.
- Company is debt-free and carrying cash and equivalents which can meet its requirements for the next few quarters.
- Some of the capex program is getting delayed.
- Supply chain constraints persist but are at manageable levels.
- Manufacturing or supply operations are not impacted.
- Seeing some softness in the Indian pharma market and business will be impacted on similar lines.
Shares are trading near the day's low, falling as much as 1.3% to Rs 1,402, down for the second straight day.
Stock Reaction: Infosys
The I.T. major has informed the exchanges that it has forged a digital transformation partnership with Old National Bank - the largest financial services bank holding company.
The strategic partnership will leverage Infosys' expertise to accelerate Old National Bank's growth and streamline operating models, the press release said.
Through the partnership, Infosys will help Old National digitally transform itself with a focus on achieving greater operational efficiency, fostering innovation, and providing improved services for clients and the larger community.Dennis Gada, Infosys
Shares gained as much as 3% to Rs 805.35, post the announcement.
Coronavirus India Updates
- India reports biggest single-day spike in fresh cases yet again
- 28,701 cases reported in the last 24 hours
- Total number of cases now at 8,78,254
- Active cases cross the 3 lakh mark, at 3,01,609
- Patients cured / discharged / migrated at 5,53,471
- Death toll rises to 23,174
- 500 deaths reported in the last 24 hours
- 18,550 recoveries reported in the last 24 hours
Earnings Reaction: Avenue Supermarts
The retail chain player reported a 88% decline in net profit while its topline declined 33% during the quarter ended June.
Operational performance was weak, with Ebitda declining 81% while margins contracted to 2.9% from 10.3% in the same period last year.
The management, in its post earnings note said that was not on the minds of shoppers during the pandemic and the resultant lockdown.
The company also said that sales have recovered to over 80% of pre-covid levels at places where stores are operating unhindered.
Brokerage firm JPMorgan maintained its neutral rating on the stock with a price target of Rs 2,200 while Motilal Oswal maintained its sell rating with a price target of Rs 2,000.
Shares fell as much as 6.1% - the biggest single-day fall since January 2019 to Rs 2,180. The stock now trades at a two-month low.
Opening Bell: Starting With Gains
Indian equity markets began the new trading week on a strong note, tracking gains across its peers in Asia as well as the Dow futures.
The S&P BSE Sensex and the NSE Nifty 50 opened 0.78% higher at 36,880 and 10,851 respectively. Both benchmark indices opened at their highest level in four months.
All sectoral indices opened with gains. The Nifty Bank, Media, Metal, Pharma and PSU Bank index - all opened with gains of 1% while the auto, I.T. and realty index gained over 0.5% each at the start of trade.
Broader markets too have opened in-line with the benchmarks. The midcap and smallcap indices have opened with gains of 0.8%.
Market breadth opened in favour of the advances. 1,129 stocks opened with gains while 69 stocks declined.
Latest On The Coronavirus
- Total cases at 12.8 million globally
- Death toll rises to 5.68 lakh
- U.S. virus cases rises to 32.7 lakh
- Florida reported record 15,000 new cases on Sunday
- Hong Kong reports 38 new cases
- New cases in Tokyo crossed 200 for the fourth straight day
- Mexico overtook Italy has the country with fourth most Covid-19 deaths
- South Africa introduces curfew, alcohol ban after rules unheeded
- New York reports first day with zero confirmed or probable deaths
- Brazil's total tally rose to 18.64 lakh cases
- 650 people tested positive in the U.K.
Top Reads On BloombergQuint.com
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- Reliance Industries: Qualcomm Ventures - an investment arm of Qualcomm, will invest Rs 730 crore in Jio Platforms for a 0.15% stake. The deal is at an equity of Rs 4.91 lakh crore and an enterprise of Rs 5.16 lakh crore. Qualcomm is the world's leading wireless technology innovator and involved in the development, launch and expansion of 5G.
- Avenue Supermarts: Revenue down 33% while net profit declines 88%. Ebitda margins decline to 2.9% from 10.3% in the previous year.
- IRCTC: Revenue up 17.9% while net profit rises 79.3%. Rail neer revenue up 19% while internet ticketing revenue nearly triples. Ebitda margin at 34.4% from 14.2%.
- IRCON International: Revenue up 4.2% while net profit rises 15.7%. Ebitda margin down to 8.3% from 10.5% owing to higher input costs.
- SAIL: Revenue down 12.5% while net profit rises 4.8 times due to inventory gain of Rs 4,120.9 crore. Exceptional loss of Rs 771.8 crore this quarter due to write-down of inventory.
- Vodafone Idea: Franklin Templeton says it has received full of principal along with interest of 8.25% on the company's bonds. Franklin Templeton received payment of Rs 1,252.44 crore from the company on NCDs. The proceeds will be distributed to unit holders of the segregated portfolios in six fixed income schemes. Franklin Templeton had side pocketed the company's NCDs in six fixed income schemes.
- Escorts: The competition Commission of India has approved the acquisition of 9.09% stake in Escorts by Kubota Corporation and of 40% in Kubota Agricultural Machinery India by Escorts.
- Biocon: Gets Drug Controller General of India's (DGCI) approval to market Itolizumab injection solution for emergency use in India in moderate to severe Covid-19 patients suffering from Cytokine Release Syndrome. The drug will be manufactured and formulated as an intravenous injection at its manufacturing facility in Bengaluru.
- Dilip Buildcon: Declared L1 bidder for the tender floated by NHAI for a new HAM project worth Rs 882 crore in Gujarat. The project involves four laning of Dhrol-Bhadra Patiya section and has to be completed within a period of 24 months.
- IRB Infra: Emerges as preferred bidder for Rs 2,193 crore BoT project under the Bharatmala Pariyojana in West Bengal. The project involves six-laning of NH-19 section of 63.83 kilometers stretch from Palsit to Dankuni in West Bengal and is part of the Golden Quadrilateral project.
To know more about companies that reported earnings after market hours, key brokerage updates and more, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
U.S. Markets On Friday
- Benchmark indices post weekly gains
- S&P 500 extended weekly gain to 1.8%
- S&P 500 outperformed the Nasdaq on Friday for the first time in nearly two risk
- Dallas Fed President Robert Kaplan told Fox Business that he sees the need for more fiscal outlays
- Bloomberg Dollar spot index fell 0.1%
- Yield on the 10-year treasuries stood at 0.64%
- West Texas Intermediate crude rose 2.3% to $40.53 per barrel. The commodity trades lower today.
Get your daily fix of the global markets here.
Gains To Resume?
Good Morning!
Indian equity markets gained for the fourth straight week, despite ending Friday's session with modest losses.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.46% to 10,828 as of 7:45 a.m. on Monday.
Asian markets have opened higher ahead of the quarterly earnings season this week.
Markets in Japan trade higher by 1.5% and those in Hong Kong, South Korea and Australia are seeing gains.
Futures on the Dow Jones are trading 130 points higher after the benchmark index posted its second straight weekly gain on Friday. A slew of major banks in the U.S. will be reporting their earnings this week.
Treasuries ticked lower, gold remained near the $1,800/Oz-mark, while West Texas Intermediate crude fell 0.6% to $40.29 per 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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