How Did The Sectoral Indices Fare
Closing Bell: Fourth Day Of Losses
Indian equity markets fell for the fourth straight day - the most in over five months, dragged by heavyweight financials and Reliance Industries.
Rising Covid-19 cases and lack of upside triggers saw benchmark indices face pressure at higher levels.
The S&P BSE Sensex ended 1.77% lower at 36,939 while the NSE Nifty 50 fell 1.64% to end at 10,891.
Banking and Financial Services stocks were the major laggards in today's trade. The Nifty Bank index ended with losses of over 2% with private banks leading the declines. Nifty Realty and Nifty Media were the other two sectoral laggards, ending with losses of 1% each.
Broader markets outperformed in today's trade. The midcap index ended little changed while the smallcap index ended with gains of 1%.
The India Volatility Index ended 3.9% higher at 25.13.
Market breadth ended in favour of the gainers. 998 stocks on the NSE ended with gains while 820 declined.
Nifty Media Index At Day's Low
Buzzing Stock: KRBL
- Trades at the highest level in nearly six months
- Gains as much as 8.5% to Rs 293.45
- Biggest single-day gain in two months
- Up for the fifth straight day
- Longest winning streak in two months
- Up 16% in the last five trading sessions
- Today's volumes are more than double its 20-day average
- Relative Strength Index approaching oversold territory of 70; currently at 69.8
- Has nearly tripled from its 52-week low of Rs 91.2, on March 26, 2020
The Road Ahead For AltBalaji
Stock Reaction: Wockhardt
The drugmaker has informed the exchanges that it has announced a Covid-19 vaccine partnership with the U.K. Government.
The manufacturing of the vaccine will be undertaken at CP Pharmaceuticals, a subsidiary of the company based in North Wales, the company has said in an exchange filing.
As per the terms of the agreement, the company has reserved manufacturing capacity to allow for the supply of multiple vaccines to the U.K. government.
Today we have secured additional capacity to manufacture millions of doses of multiple Covid-19 candidates, guaranteeing the supply of vaccines we need to protect people across the U.K. rapidly and in large numbers.Statement From Wockhardt
Shares are locked in a 10% upper circuit at Rs 303.6. The stock is up for the fifth straight day.
Stock Reaction: Welspun Corp
The company informed the exchanges that it has won multiple orders across geographies including the U.S., Saudi Arabia and India.
The orders are for 106 KMT and are worth Rs 1,000 crore, the company said in an exchange filing.
The order book of the company post these orders stand at 759 KMT and worth Rs 6,200 crore, post execution up to June 2020.
"This reflects overall improvement in business sentiments and exhibits our strong customer connect," the company said.
Shares are locked in an upper circuit of 5% at Rs 92.15. The stock is up for the fifth straight day.
Earnings Reaction: Kansai Nerolac Q1
- Revenue down 59% to Rs 590.4 crore
- Net profit down 71% to Rs 42.7 crore
- Ebitda down 70% to Rs 72.8 crore
- Ebitda margins down to 12.3% from 16.6%
- Sales in April were a complete washout
- Sales of decorative has seen a revival in May and June
- Saw double-digit volume growth in May and June
- Industrial sales continued to impacted in May and June
- Basic raw material prices were benign this quarter though there was volatility in forex rates
- All numbers are standalone and compared on a year-on-year basis
Shares rose to the day's high, gaining as much as 3.2% to Rs 447.3. The stock is up for the second straight day.
Markets At 2:10 P.M.
- Benchmark indices at the day's low
- Sensex down 1.7% at 36,953
- Nifty down 1.7% at 10,888
- Nifty Bank down 2.5% to 21,089
- Nifty Midcap Index up 0.1%
- Nifty Smallcap Index up 1%
- India Volatility Index up 4.6% to 25.3
- Nifty Realty and Nifty I.T. down 1% each
- Nifty Media and Nifty FMCG is the other sectoral laggard
- Nifty Pharma gives up gains; trades flat
- Tata Motors remains the top Nifty gainer; up 6.4%
- UPL remains the top Nifty laggard; down 5.5%
- 966 stocks on the NSE trade with gains while 835 decline
Money Market Update
The currency has ended lower in today's session, in-line with the weakness in India's equity markets.
The rupee ended at 75.01 against the U.S. Dollar as compared to Friday's close of 74.81.
Rupee was the worst performing currency in Asia today after today's losses.
Yield on the 10-year government bond ended at 5.837% as compared to Friday's closing of 5.838%.
Active Stock Options
- Maruti's 6,500 Call: Premium down 25.4% to Rs 107.6. The contract has added 62,000 shares in Open Interest.
- Tata Motors' 120 Call: Premium up 43% to Rs 4.1. The contract has added 18.2 lakh shares in Open Interest.
- Titan's 1,100 Call: Premium up 66.7% to Rs 45.6. The contract has added 1.8 lakh shares in Open Interest.
Most Stocks On The Realty Index Decline
Buzzing Stocks: Firstsource Solutions
- Among the top performers on the Nifty Smallcap Index
- Trades at the highest level since September 2019
- Gains as much as 8.9% to Rs 53.2
- Biggest single-day gain in three months
- Up for the eighth straight day
- Longest winning streak since June 2016
- Has gained 24% in the last eight trading sessions
- Today's volumes are 21% higher than its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 80
- Has more than doubled from its 52-week low of Rs 20 on March 24, 2020
- Five out of the six analysts tracking the stock have a buy recommendation; 0 sell calls
- The stock trades 12% above its 12-month consensus price target of Rs 44.7, implying a negative return potential
Earnings Reaction: India Tourism Development Corporation Q4FY20
- Revenue flat at Rs 91 crore
- Net profit down 47% to Rs 9.3 crore
- Ebitda down 98% to Rs 0.23 crore
- Ebitda margin at 0.3% from 13.6%
- Hotel segment revenue down 11% to Rs 64.4 crore
- International Trade division revenue up 3% to Rs 4.83 crore
- Travels and Tours business revenue down 7% to Rs 6.89 crore
Shares gained as much as 5% to Rs 223.55, post the announcement.
European Markets Open Flat
Benchmark indices in Europe have opened flat after a two-day decline that saw the Stoxx 600 end at a one-month low.
The Stoxx 600 has opened 0.2% higher today with technology and basis resources leading the gains. Banking stocks are the underperformers.
Asian markets have ended mixed while futures on the Dow Jones are trading lower by 50 points.
Brent crude trades 0.7% lower at $43.21 per barrel while Gold is little changed at $1,973/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.3% at 3,183
- DAX up 0.5% at 12,372
- CAC little changed at 4,790
- FTSE 100 little changed at 5,893
- IBEX 35 down 0.2% at 6,866
How Are The Sectoral Indices Faring
Stock Reaction: Steel Strips Wheels
- Total wheel rim sales in July down 27% to 9.25 lakh
- Expect sales to reach pre-Covid-19 levels by September
- Gross turnover down 27% to Rs 132.75 crore in July
- Net turnover down 29% to Rs 110.35 crore in July
- Wheel segment reported highest volume sale in July
- Expect Mehsana plant to run at 90% utilisation from August
- Export volumes down 3%
- Passenger car segment sees de-growth of 13%
- Two and Three-wheeler segment sees de-growth of 68%
- Tractor segment sees growth of 15%
- CV volumes decline 53% due to high double-digit drop in CV sales
Shares are trading near the day's low, down 2.4% to Rs 402, down for the third straight day.
Buzzing Stock: Mindtree
- Trades at the highest level since September 2018
- Gains as much as 4.6% to Rs 1,132.9
- Biggest single-day gain in three months
- Has gained in six out of the last seven trading sessions
- Up 12% in the last seven trading sessions
- Today's volumes are 41% higher than its 20-day average
- The stock trades in overbought territory with Relative Strength Index (RSI) at 82
- Shares have nearly doubled from its 52-week low of Rs 667 on September 12, 2019
- 13 out of the 35 analysts tracking the stock have a buy recommendation; 14 sell calls
- The stock trades 13.7% above its 12-month consensus price target of Rs 974.3, implying a negative return potential
Earnings Reaction: Bank of India Q1FY21
- Net Interest Income flat at Rs 3,480.9 crore
- Net profit more than triples to Rs 843.6 crore
- Gross NPA at 13.91% from 14.78% last quarter
- Net NPA at 3.58% from 3.88% last quarter
- Provisions for NPAs at Rs 7,666 crore; up 5% from the previous quarter
- Other Income up 43% to Rs 1,707 crore
- Additional Covid-19 provisions worth Rs 620.3 crore this quarter
- Total Covid-19 provision at Rs 1,034.7 crore
- Provision Coverage Ratio at 84.87%
- Total slippages this quarter at Rs 402 crore
- SMA loans outstanding at Rs 3,300 crore as on June 30
- Domestic NIMs at 2.73% from 3.03% year-on-year
Shares gained as much as 7.1% to Rs 50.4, post the announcement.
Markets At Noon
- Benchmark indices remain near the day's low
- Nifty down 0.9% at 10,974
- Sensex down 1.1% at 37,213
- Nifty Bank down 1.7% at 21,268
- Nifty Midcap Index up 0.6%
- Nifty Smallcap Index up 1.4%
- India Volatility Index up 3% to 24.92
- Nifty Realty is the other major sectoral loser; down 1.3%
- Nifty Pharma gains for fifth straight day; up 1.6%
- Nifty PSU Bank, Nifty Metal up 1% each
- Tata Motors remains the top Nifty gainer; up 5%
- UPL remains the top Nifty laggard; down 5.5%
- 982 stocks on the NSE trade with gains while 752 decline
Fifth Day Of Gains For The Pharma Index
Stock Reaction: NMDC
- Total production in July up 13% to 2.19 MT
- Total sales in July up 7% to 2.57 MT
- Production from Chhattisgarh up 34% to 1.56 MT
- Sales from Chhattisgarh up 19% to 1.9 MT
- Production from Karnataka down 19% to 0.63 MT
- Sales from Karnataka down 17% to 0.67 MT
- Comparisons with production and sales in July 2019.
Shares are off the day's high, currently up 0.8% at Rs 84.55.
Earnings Reaction: Tata Chemicals Q1FY21
- Revenue down 9.1% to Rs 2,348.2 crore
- Net profit down 91.3% to Rs 13.3 crore
- Ebitda down 30.1% to Rs 359.8 crore
- Ebitda margin at 15.3% from 19.9%
- Higher input costs impact margins
- Higher input costs partially offset by lower power, fuel and freight expenses
- Lower other income and higher depreciation costs impact net profit
- Basic Chemistry products revenue down 14% to Rs 1,672 crore
- Specialty products revenue up 7% to Rs 675.9 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares fell as much as 4.1% - the most in over two months to Rs 293. The stock trades at the lowest in over two months.
F&O Snapshot: Active Options Contracts
- Nifty August futures add 9% and 9.2 lakh shares in Open Interest.
- Nifty Bank August futures add 25% and 17 lakh shares in Open Interest.
Nifty: August 6 Expiry
- 11,000 Put: Premium up 54.5% to Rs 113.9. The contract has added 5.5 lakh shares in Open Interest.
- 11,100 Call: Premium down 50% to Rs 51.6. The contract has added 13.1 lakh shares in Open Interest.
- 11,000 Call: Premium down 44.8% to Rs 89.6. The contract has added 21.1 lakh shares in Open Interest.
Nifty Bank: August 6 Expiry
- 21,000 Put: Premium up 38.6% to Rs 201. The contract has added 2.4 lakh shares in Open Interest.
- 22,000 Call: Premium down 51% to Rs 119.3. The contract has added 3.94 lakh shares in Open Interest.
- 21,500 Call: Premium down 42.3% to Rs 280.3. The contract has added 3.2 lakh shares in Open Interest.
Covid-19 Impact: BHEL
- Business outlook is persistently challenging due to continued slowness in power sector ordering.
- Pace of ordering is yet to pick-up post Covid-19.
- Conversion into resumption in ordering in the power sector will be clear only in the longer outlook.
- Atmanirbhar Bharat is expected to augment revival of growth for the manufacturing sector.
- Return to normal business operations is presently uncertain.
- Delays in cash collecting activities are anticipated.
- Existing contracts/ agreements where non fulfillment of the obligations by any party will have significant impact on listed entity’s business.
Shares are off the day's high, currently trading 0.8% higher at Rs 36.25.
Bandhan Bank Leads Losses On The Nifty Bank
Earnings Reaction: Godrej Agrovet Q1FY21
- Revenue down 8.7% to Rs 1,554.2 crore
- Net profit up 16.4% to Rs 88.5 crore
- Ebitda up 16.9% to Rs 165.9 crore
- Ebitda margin at 10.7% from 8.3%
- Lower raw material costs aid margins
- Animal feed business revenue down 15% to Rs 748 crore
- Vegetable oil business revenue up 8% to Rs 157.4 crore
- Crop Protection Business revenue up 12% to Rs 320.8 crore
- Dairy business revenue down 26% to Rs 236.4 crore
- Poultry and Processed food business revenue up 22% to Rs 165.5 crore
- All numbers are consolidated and compared on a year-on-year basis
Shares gained as much as 4.5% to Rs 479.9. The stock is up for the second straight day.
July Manufacturing PMI At 46
India's manufacturing Purchasing Managers' Index for the month of July stood at 46, as compared to 47.2 in the month of June, according to IHS Markit.
The figure during the same period in 2019 stood at 52.5. This was the fourth straight month of contraction for the Indian economy after it went into one of the strictest lockdowns to combat the Covid-19 pandemic.
Output too has seen a contraction for the fourth straight month, falling to 44 from 46.7 in June.
New orders too have fallen as compared to the previous month.
Buzzing Stock: Jubilant LifeSciences
- Top performing stock on the Nifty Midcap Index
- Gains as much as 9% to Rs 867
- Biggest single-day gain in nearly two months
- Trading at the highest level since March 2019
- Up for the fourth straight day
- Has gained in eight out of the last 11 trading sessions
- Up 15.6% over the last four trading sessions
- Today's volumes are more than quadruple its 20-day average
- Stock trades in overbought territory with Relative Strength Index (RSI) at 84
- The stock has more than tripled from its 52-week low of Rs 230 on March 25, 2020
- 11 out of the 13 analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 19.9% higher than its 12-month price target of Rs 686.7, implying a negative return potential
Earnings Reaction: UPL Q1FY21
- Net profit up 93% to Rs 551 crore
- Ebitda up 29% to Rs 1,704 crore
- Ebitda margin at 21.8% from 16.7%
- Net debt maintained at Rs 22,000 crore
- Latin America revenue down 16% to Rs 2,015 crore
- North America revenue down 14% to Rs 1,027 crore
- North America revenue impacted by Covid-19 related Pre-buying in Q4FY20
- Europe revenue up 1% to Rs 1,703 crore
- India revenue up 27% to Rs 1,511 crore
- Rest of the World revenue up 10% to Rs 1,578 crore
- Remain well positioned to deliver revenue and Ebitda growth for the full year
Brokerages like CLSA, Investec and Emkay have raised their respective price targets on the stock, after reiterating their bullish stance on the company's prospects going ahead.
Shares fell as much as 6.9% to Rs 445.2. This was the biggest single-day decline for the stock in nearly three months. It is also the worst performing stock on the Nifty 50 index.
Markets At 10:10 A.M.
- Benchmark indices extend losses
- Nifty down 0.9% at 10,978
- Sensex down 1% at 37,249
- Nifty Bank down 1.5% at 21,313
- Nifty Midcap Index up 0.6%
- Nifty Smallcap Index up 0.9%
- India Volatility Index up 4.3% to 25.2
- Nifty Realty is the other major sectoral laggard; down 1%
- Nifty Auto is the top sectoral gainer; up 1%
- Nifty Metal is the other sectoral gainer; up 0.9%
- Tata Motors is the top Nifty gainer; up 5.5%
- UPL is the top Nifty laggard; down 5.2%
- 869 stocks on the NSE trade with gains while 771 decline
Money Market Update
The currency opened weak in today's session after capping off a rangebound week on Friday.
The rupee opened at 74.88 against the U.S. Dollar as compared to Friday's close of 74.81.
The currency was the worst performing in Asia last week, despite ending little changed for the week.
July Auto Sales: Bajaj Auto
- Overall sales for the month down 33% to 2,55,832 units
- Domestic sales down 23% to 1,58,976 units
- Exports down 45% to 96,856 units
- Two-wheeler domestic sales down 11% to 1,52,474 units
- Two-wheeler exports down 43% to 86,082 units
- Domestic CV sales down 81% to 6,502 units
- CV exports down 57% to 10,774
- Overall two-wheeler sales down 26% to 2,38,556 units
- Overall CV sales down 71% to 17,276 units
Shares gained as much as 2.2% to Rs 3,069, before cooling off.
Coronavirus India Updates
- India reports 52,972 new cases in the last 24 hours
- Total cases cross the 18 lakh mark
- Confirmed cases now at 18,03,695
- Active cases at 5,79,357
- Number of patients cured / discharged / migrated at 11,86,203
- Death toll rises to 38,135
- 771 deaths reported over the last 24 hours
- 40,574 recoveries reported in the last 24 hours
Earnings Reaction: Tata Motors Q1FY21
- Net loss widens to Rs 8,438 crore from Rs 3,698 crore
- Revenue down 48% to Rs 31,983 crore
- Ebitda down 79% to Rs 653.3 crore
- Ebitda margin down to 2% from 4.87%
- Outlook remains uncertain for the year as infections continuing to rise
- Expect gradual recovery of demand and supply in the coming months
- Committed to significantly deleverage the business in the coming years
- Aims to generate positive free cash flows for last three quarters of the year
- JLR will continue to manage costs and investment spending rigorously
- Volumes may not pick-up sufficiently to generate a profit in Q2FY21
Brokerage firm Kotak Securities has maintained a sell rating on the stock with a price target of Rs 90. It says that a substantial pick-up in volumes is essential for the company's return to profitability.
However, Edelweiss has maintained its buy rating on the stock and raised its price target to Rs 141 from Rs 127. It has cited JLR's upcoming product pipeline and peak of its capex cycle as some key factors.
Shares gained as much as 8.5% to Rs 113.5. It is trading at the highest level in two months and is also the top performing stock on the Nifty 50 index.
Stock Reaction: Bandhan Bank
34.56 crore shares of the private lender exchanged hands in 27 large trades, as per Bloomberg data.
The total number of shares sold amounts to 21.5% of the bank's total equity.
Bandhan Financial Holdings, the promoter of the bank intended to sell shares for a total sum of $1.4 billion, as per the term sheet.
The floor price of Rs 311 per share was at a 9.9% discount to Friday's closing price.
Shares fell as much as 9.3% to Rs 313.1. This was the biggest single-day fall in the stock in over three months. It is also the worst performing stock on the Nifty Bank index.
Opening Bell: A Flat Start
Indian equity markets have begun the new trading month on a subdued note, as markets react to corporate earnings and auto sales for the month of July.
The S&P BSE Sensex opened unchanged at 37,595 while the NSE Nifty 50 index opened 0.14% lower at 11,057.
Among sectoral indices, the Nifty Bank index has opened 0.5% lower while the Auto index has gained 0.6% at the start of trade. Other sectoral indices are flat.
Its a muted start to trade for the broader markets as well. The midcap index opened 0.2% higher while the smallcap index gained 3%.
Market breadth has opened in favour of the advances. 848 stocks on the NSE opened with gains while 629 opened in the red.
Latest On The Coronavirus
- Global cases cross the 18 million mark
- Death toll rises to 6.88 lakh
- Australia's Victoria tightens restrictions and declared a state of disaster
- Philippines reimposes lockdown in Manila
- Total cases in Argentina cross 2 lakh with 5,376 new infections
- Texas does not report Sunday's cases, citing system upgrades
- California reports 9,032 new cases, exceeding its 14-day average
- U.K. considers London-wide lockdown if cases continue to spike
Top Reads On BloombergQuint.com
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- Tata Motors: Says that it may not be able to witness a substantial pick-up in volumes so that it can post a profit in the second quarter of FY21. The Passenger vehicle maker reported its seventh loss in nine quarters as Covid-19 dented sales both in India and overseas.
- UPL: Strong growth in its India and the Rest of the World business contributed to a healthy operational performance. The company said it has strong liquidity in place to meet its debt maturities over the next 18-24 months.
- Bandhan Bank: Promoter Bandhan Financial Holdings intends to sell 33.7 crore shares in a block deal as per the term sheet. The floor price of Rs 311 per share is a 9.9% discount to Friday's closing price. The promoters intend to raise over 10,000 crore or over $1.4 billion from the stake sale.
- IRB Infra: Gets Letter of Award from NHAI for Hybrid Annuity Project under Bharatmala Pariyojana for a Rs 1,241.8 crore project. The project involves construction of eight-lane controlled expressway of Vadodara-Mumbai expressway in Gujarat for a 27 km stretch.
- Coal India: Production for the month of July down 3% to 37.36 MT. Offtake down 6.9% to 43.39 MT. Comparison is on a year-on-year basis.
- Cadila Healthcare: Gets tentative approval from the U.S. FDA to market Carbidopa and Levodopa Extended-Release Capsules. The drug is used in the treatment of Parkinson's disease. The drug will be manufactured at its manufacturing facility in SEZ, Ahmedabad.
- Non-Nifty Earnings Today: Bank of India, BSE, Exide Industries, Kansai Nerolac, KPIT Tech, MRPL, VST Industries
To know more about companies that reported earnings after market hours, auto sales for the month and key brokerage updates, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Pressure At Higher Levels?
Good Morning!
The six-week surge for India's benchmark indices came to a halt on Friday with both Sensex and the Nifty losing more than 1% each.
Again, the Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.55% to 11,043 as of 8:05 a.m. on Monday.
Automakers have been reporting their monthly sales numbers. Two-wheeler maker Bajaj Auto will be announcing sales figures on Monday.
Among those that already declared, Maruti Suzuki's sales — though flat compared to the previous month — were ahead of the estimates. Sales of Hero MotoCorp, Mahindra & Mahindra, too, surpassed expectations.
While no Nifty 50 company will report quarterly earnings on Monday, non-index names like Kansai Nerolac, Bank of India and Exide Industries are set to announce.
Nifty 50 companies like Tata Motors and UPL and non-index names like Vinati Organics, Godrej Agrovet, Relaxo Footwear that declared their first-quarter results after market hours on Friday will remain in focus.
Across the globe, Asian markets have begun the new month of trade on a mixed note. Markets in Japan are advancing, while those in Hong Kong and Australia are lower.
West Texas Intermediate crude fell 0.7% to $40 per barrel, while gold was flat at $1,975/Oz.
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