KEY HIGHLIGHTS
Closing Bell: Fourth Week Of Gains
Indian equity markets ended off the lowest point of the day to post modest losses. However, today's decline was not enough to prevent a fourth straight weekly advance for the benchmark indices.
The S&P BSE Sensex ended 0.4% lower at 36,594 while the NSE Nifty 50 index also fell 0.4% to end at 10,768.
Banks were the top laggards in today's session. The Nifty Bank and PSU Bank index ended 2.2 and 2.7% lower respectively. Auto, Metal and Media stocks were the other laggards, with their respective indices ending with losses between 0.5-1%.
Nifty Pharma bucked the trend to end 0.8% higher while the FMCG index gained 0.6%.
Market heavyweights Reliance Industries Ltd. and Hindustan Unilever Ltd. ensured that the Nifty 50 index ended off the lowest point of the day. Both stocks were the top two gainers on the benchmark index, ending 3.1% and 2.5% higher respectively.
Broader markets remained subdued. The midcap index ended 0.7% lower while the smallcap index was little changed.
Market breadth remained adverse throughout the session. 1,194 stocks on the NSE ended with losses while 619 managed to end with gains.
For the week, both benchmark indices ended with gains of 1.6%. They have now posted weekly gains for four straight weeks - the longest weekly gaining streak since December 2019. Both Sensex and Nifty have also gained in six out of the last seven weeks.
How Did The Markets Fare This Week
Buzzing Stock: Spandana Sphoorty Financial
- Among top performers on the Nifty Smallcap Index
- Trades at the highest level in nearly four months
- Locked in a 5% upper circuit of Rs 668.45
- Locked in a 5% upper circuit for the third straight session
- Up for the fifth straight day
- Longest winning streak in a month
- Has gained 21% in the last five trading sessions
- Today's volumes are 2.8 times higher than its 30-day average
- Breaks above its 200-Day Moving Average of 644.4
- Stock in overbought territory with Relative Strength Index (RSI) at 80
- Has gained over 60% from its 52-week low of Rs 405 on April 27, 2020
- All five analysts tracking the stock have a buy recommendation
- The stock is trading at its 12-month consensus price target of Rs 669.2
Results Reaction: Karnataka Bank Q1FY21
- Net Interest Income up 8% to Rs 535.12 crore
- Net profit up 12% to Rs 196.38
- Gross NPA at 4.64% from 4.82% in the previous quarter
- Net NPA at 3.01% from 3.08% in the previous quarter
- Provisions up 43% quarter-on-quarter to Rs 509.1 crore
- Higher other income contributes to profits
- Other income up 2.5 times to Rs 518.92 crore
- Aggregate provisions for Covid-19 at Rs 97.99 crore
- Provision Coverage Ratio at 67.93% from 58.08% last year.
- All other numbers other than NPAs and provisions compared on a year-on-year basis
Shares gained as much as 6% to Rs 48.20 post the announcement and are up for the fifth day in a row.
Stock Reaction: Canara Bank
The board of the bank at its meeting held today, has approved:
- Raising equity share capital amounting up to Rs 5,000 crore through QIP, Rights Issue, ESPS, Private Placement, Preferential allotment or any other approved method during FY21.
- To raise capital through Additional Tier-I Basel III compliant bonds worth Rs 3,000 crore during FY21.
- Both proposals are subject to market conditions and necessary approvals.
Shares fell as much as 4.74% to Rs 103.5 and are down for the second straight day.
Stock Reaction: State Bank of India
India's largest lender has informed the exchanges that it will hold a board meeting on July 15, to consider raising funds.
It will seek approval to raise additional tier-1 and tier-2 capital through Basel-III compliant debt instruments in U.S. Dollars or the Indian Rupee for FY21, the bank said in an exchange filing.
Shares are trading near the day's low, down 1.5% at Rs 196.15, snapping a four-day gaining streak.
Markets At 2:30 P.M.
- Benchmark indices decline but likely to post weekly gains
- Nifty down 0.64% at 10,746
- Sensex down 0.6% at 36,526
- Nifty Bank down 2.4% at 22,360
- Nifty Midcap Index down 1%
- Nifty Smallcap Index down 0.6%
- India Volatility Index up 1% at 25.16
- Nifty Pharma off day's high but up 0.53%
- Nifty PSU bank remains top sectoral laggard; down 2.8%
- Nifty Media and Nifty Metal down 1.2% each
- Reliance Industries is the top Nifty gainer; up 2.8%
- IndusInd Bank is the top Nifty laggard; down 3.8%
- 536 stocks on the NSE trade with gains while 1,249 decline
Stock Reaction: Unichem Laboratories
The company has informed the exchanges that it has received ANDA approval for its Baclofen tablets, for 10 mg and 20 mg version from the U.S. FDA.
The said drug is a generic version of LIORESAL Tablets, 10 mg and 20 mg of Novartis Pharma, according to the exchange filing.
The said drug is used in alleviating signs and symptoms of spasticity resulting from multiple sclerosis.
The product will be commercialised from the company's Ghaziabad plant, the filing said.
Shares gained as much as 4.1% to Rs 192, post the announcement.
Stock Reaction: Bank of Maharashtra
The board of directors of the state-run lender at a meeting held today have approved:
- Raising of capital aggregating to Rs 2,000 crore through preferential allotment, or through a QIP, FPO, Rights issue or AT1 bonds.
- Raising up to Rs 1,000 crore through Basel-III compliant tier-I and tier-II bonds or such securities.
- Issue equity shares to the government for an amount aggregating to Rs 831 crore on a preferential basis.
- Set-off the accumulated losses of the bank as of March 31, 2020 against the balance available in share premium and special reserves account of the bank.
- All proposals subject to necessary approvals and permissions.
Shares are off the lowest point of the day, trading 0.43% lower at Rs 11.65.
Money Market Update
The rupee resumed its declines after snapping a three-day losing streak on Thursday.
The currency ended at 75.20 against the U.S. Dollar as compared to Thursday's close of 74.99. Today's losses meant the rupee ended as the third worst performing currency in Asia.
For the week -the rupee snapped a two-week gaining streak, during which it gained nearly 1.5%.
After ending as the best performing currency in Asia last week, the rupee has ended at the opposite end of the spectrum this week, emerging as the worst performer on a weekly basis.
Active Stock Options
- TCS' 2,300 Call: Premium up 7.1% to Rs 33. The contract has shed 2.2 lakh shares in Open Interest.
- Reliance Industries' 2,000 Call: Premium up 101.2% to Rs 33.3. The contract has added 7.24 lakh shares in Open Interest.
- State Bank of India's 200 Call: Premium down 7% to Rs 9.35. The contract has added 10.9 lakh shares in Open Interest.
Stock Reaction: S Chand
The company and its subsidiaries have reached a negotiated settlement in the ongoing arbitration proceedings with Atul Kumar Gupta and family, classified as 'original shareholders' and Orange Education Pvt. Ltd.
The matter pertains to non-compete obligations post the acquisition of New Saraswati, the company's wholly-owned subsidiary.
As per the agreed terms of the settlement, the company would retain an amount of Rs 3 crore while the balance Rs 7 crore will be settled in installments till December 2021.
Shares are trading 4.3% higher at Rs 55.5, post the announcement.
Large Trades Alert
- Bharti Airtel: 25 lakh shares of the telecom player exchanged hands in a single large trade.
- Axis Bank: 10.9 lakh shares of the private lender exchanged hands in a single large trade.
Buyers and sellers of these trades remain unknown, according to Bloomberg data.
Shares of Bharti Airtel are recovering from the day's low; up 0.75% at Rs 572.85 while shares of Axis Bank are the top laggards on the Nifty 50 index, down 2.8% at Rs 440.85.
All Constituents Of The Nifty Bank Index Decline
Weak Start To Trade In Europe
Benchmark indices in Europe have begun trade on a weak note, extending their losses for the week as Chinese state funds pare their stock holdings.
The Stoxx 600 index opened 0.2% lower with technology being the only sectoral gainer while all other sectors were either flat, or declining.
Asian markets have ended with losses while futures on the Dow Jones are near the day's low, down over 250 points.
Brent crude trades 1.6% lower at $41.68 per barrel while gold is 0.4% lower, below the mark of $1,800 at $1,797/Oz.
Let's take a look at how benchmarks across Europe have opened:
- Euro Stoxx 50 down 0.5% at 3,245
- DAX down 0.4% at 12,440
- CAC down 0.55% at 4,893
- FTSE 100 down 0.6% at 6,012
- IBEX 35 down 0.3% at 7,209
Tata Motors Group Wholesales Update
- Group global wholesales at 91,594 units down 64% from the previous year
- Global wholesales of all CVs and Tata Daewoo at 11,598 units, down 89% from last year
- Global wholesales of all PVs at 79,996 units, down 49% year-on-year
- Global wholesales for JLR at 65,425 units out of which, Jaguar sales were 17,971 units while land rover wholesales were 47,454 units.
Shares are off the day's high, currently trading 1% lower at Rs 105.95.
Buzzing Stock: Britannia Industries
- Trades at an all-time high
- Gains as much as 2.2% to Rs 3,753
- Among the top performers on the Nifty FMCG index
- Has gained in four out of the five trading sessions this week
- Has gained in seven out of the last 10 trading sessions
- Up 8% in the last 10 trading sessions
- Set for fourth straight weekly advance
- Today's volumes are 9% higher than its 20-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- Has gained 78.7% from its 52-week low of Rs 2,100 on March 23, 2020
- 25 out of the 40 analysts tracking the stock have a buy recommendation; 4 sell calls
- The stock trades near its 12-month consensus price target of Rs 3,698.5
Stock Reaction: Yes Bank Announces FPO Price Band
- Floor price: Rs 12 per share
- Cap price: Rs 13 per equity share
- A discount of Re 1 per share for the eligible employees of the bank bidding in employee reservation portion
- Minimum bid lot: 1,000 equity shares and in multiples of 1,000 equity shares thereafter
- Shares of Yes Bank closed at Rs 26.65 on the National Stock Exchange on Thursday.
Shares fell as much as 9.2% to Rs 24.2, snapping a two-day gaining streak.
Markets At Noon
- Benchmark indices extend losses; fall near the day's low
- Nifty down 0.63% at 10,745
- Sensex down 0.62% at 36,510
- Nifty Bank down 1.6% at 22,547
- Nifty Midcap Index down 0.7%
- Nifty Smallcap Index down 0.2%
- India Volatility Index up 1.3% at 25.25
- Nifty Pharma remains the top sectoral gainer; up 1.3%
- Nifty PSU Bank is the top sectoral laggard; down 2.4%
- Nifty Media and Nifty Metal down 1.3% each
- Sun Pharma remains the top Nifty gainer; up 2.8%
- Bharti Infratel remains the top Nifty laggard; down 3.4%
- 551 stocks on the NSE trade with gains while 1,186 decline
Stock Reaction: Tejas Networks
HDFC Mutual Fund sold 12.2 lakh shares or 1.32% stake of the company on Thursday, at Rs 51.8 per share.
With this stake sale, HDFC Mutual Fund's stake in the company is now down to 1.54%.
The stock is locked in an upper circuit of 5% at Rs 54.35. This is the third straight upper circuit for the stock.
Brokerage Reaction: Adani Ports & SEZ
Shares of the company are declining in today's session after brokerage firm CLSA downgraded the stock to outperform from its previous buy rating.
Rationale behind CLSA’s downgrade:
- Stock has risen 37% in the past three months
- Cut FY21 volume estimates by 3% as traffic fell 27% year-on-year
- Cut EPS estimates by 2%-4%
- Gujarat Government's reversal of its tariff hike order for clients of Adani Ports creates risk for 81% of coal volumes at Mundra Port
- Remains best infrastructure asset but recent rally calls for a pause
Shares fell as much as 3.2% to Rs 332.25 and are among the top laggards on the Nifty 50 index. CLSA has maintained its price target of Rs 386 on the stock.
Stock Reaction: Natco Pharma
The company has informed the exchanges that its subsidiary, Natco Pharma (Canada) has entered into a settlement agreement with Celgene for the Lenalidomide Capsules in Canada.
Celgene is now part of Bristol-Myers Squibb, according to the company's exchange filing.
The terms of the agreement are confidential, the company said.
Shares pared losses to gain as much as 1.1% to Rs 684.85, post the announcement.
All Constituents Of The PSU Bank Index Decline
F&O Snapshot: Active Options Contracts
- Nifty July futures add 3.4% and 3.96 lakh shares in Open Interest.
- Nifty Bank July futures add 13.4% and 1.95 lakh shares in Open Interest.
Nifty: July 16 Expiry
- 10,800 Call: Premium down 30% to Rs 92.8. The contract has added 15.3 lakh shares in Open Interest.
- 10,700 Put: Premium up 18.6% to Rs 90.6. The contract has added 8.14 lakh shares in Open Interest.
- 11,000 Call: Premium down 40.2% to Rs 28.2. The contract has added 7.84 lakh shares in Open Interest.
Nifty Bank: July 16 Expiry
- 23,000 Call: Premium down 37.4% to Rs 251. The contract has added 3.64 lakh shares in Open Interest.
- 22,500 Put: Premium up 19.3% to Rs 331. The contract has added 3 lakh shares in Open Interest.
- 23,500 Call: Premium down 44.75% to Rs 113. The contract has added 2.91 lakh shares in Open Interest.
Stock Reaction: PNB Housing Finance Q1FY21 Business Update
- Plan capital raise of up to Rs 1,700 crore
- Disbursements to de-grow on a year-on-year basis this year.
- Focus will be on mass housing and lower risk weighted retail segment.
- Unnati segment will account for 10-15% of total disbursements for FY21.
- Retail loans are expected to further increase beyond 85% of total AUM.
- Will look to maintain spreads anywhere between 210-220 basis points this year.
- Gross margin is expected to be in the range of 300-315 basis points.
- Operating expense is expected to reduce by 5-10% in absolute terms.
- Looking to further sell down corporate assets and make balance sheet further asset light
- Promoter's objective is to maintain minimum stake of 26%.
- Retail loans under moratorium phase 2 account for 29% of retail AUM and 39% of overall AUM is under moratorium
Shares fell as much as 3.4% to Rs 210.55, snapping a four-day gaining streak.
Earnings Reaction: Sadbhav Engineering Q4FY20
The engineering and construction company reported a 57.2% decline in its revenue for the quarter ending March.
However, it reported a net profit of Rs 886.6 crore this quarter as compared to a net loss of Rs 27 crore during the same period last year.
The net profit was aided by an exceptional gain of Rs 1,501 crore due to transfer of assets of Sadbhav Infra to IndInfravit Trust.
Ebitda fell 24% while margins stood at 28.6% from 16.1% last year.
Shares are off the day's high after gaining as much as 5% to Rs 50.85. The stock now trades 1.3% higher at Rs 49.1.
Markets At 10:15 A.M.
- Benchmark indices pare losses, trade flat
- Nifty little changed at 10,811
- Sensex little changed at 36,719
- Nifty Bank down 0.4% at 22,808
- Nifty Midcap index up 0.2%
- Nifty Smallcap index up 0.6%
- India Volatility Index up 0.8% at 25.1
- Nifty I.T., Metal and Nifty PSU bank down 0.5% each
- Nifty Pharma is the top sectoral gainer; up 1.5%
- Sun Pharma is the top Nifty gainer; up 2.7%
- Bharti Infratel is the top Nifty laggard; down 2.7%
- Market breadth is even. 818 stocks on the NSE gain while 819 decline
Money Market Update
The rupee has opened lower in today's trading session after snapping a three-day losing streak on Thursday.
The currency opened at 75.14 against the U.S. Dollar as compared to Thursday's close of 74.99.
As of Thursday's close, the rupee has weakened 0.4% this week. A weak close today will lead to the currency snapping a two-week gaining streak.
Yield on the 10-year government bond opened at 5.762% as compared to Thursday's close of 5.778%.
Earnings Reaction: Tata Consultancy Services
The Information Technology major became the first Nifty company to report its earnings for the June quarter.
The company's revenue in U.S. Dollar terms declined 7% on a quarter-on-quarter basis while net profit declined 13% as compared to last quarter.
Lower revenues resulted in the company's margin declining to 23.6% from 25.1% in the quarter gone by.
The management expects gradual recovery to resume over the next two quarters, also saying that clients are neither cancelling contracts nor are renegotiating them.
Most brokerages have downgraded the stock post its earnings performance. Macquarie has downgraded the stock to neutral from outperform while CLSA has maintained its outperform rating on the stock but cut its price target to Rs 2,204 from Rs 2,260.
Shares are fluctuating between gains and losses, currently little changed at Rs 2,202.
Stock Reaction: Firstsource Solutions
Shares of the BPO services provider are surging in today's trade after veteran investor Rakesh Jhunjhunwala increased his stake in the company during the June quarter.
As per the latest shareholding pattern updated by the company to the exchanges, Jhunjhunwala now holds 2.88% stake in the company as compared to 2.06% in the previous quarter.
The investor has increased his stake in the company by 0.82%.
Shares are locked in an upper circuit of 5% at Rs 42.35. The stock is up for the third straight day and has gained in seven out of the last eight trading sessions.
Coronavirus India Updates
- India reports biggest single-day spike in new cases
- 26,506 cases reported in the last 24 hours
- Total cases now at 7,93,802
- Active cases at 2,76,685
- Patients who have been cured / discharged / migrated at 4,95,513
- Death toll rises to 21,604
- 475 deaths reported in the last 24 hours
- 19,135 patients reported recoveries in the last 24 hour period
Stock Reaction: Punjab National Bank
The state-run lender has approved raising Rs 10,000 crore through private placement, QIP, FPO, rights issue or any combination thereof, it said in an exchange filing.
It has also sought shareholder approval to raise Rs 7,000 crore through equity.
The bank reported a fraud of Rs 3,688.6 crore to the Reserve Bank of India in the accounts of Dewan Housing Finance. It has made provisions amounting to Rs 1,246.6 crore with regards to the same.
It has also approved appropriation of accumulated losses of Rs 28,707.9 crore from the share premium account of the amalgamated bank.
Shares fell as much as 6.7% to Rs 34.6, the biggest single-day fall in over three months.
Opening Bell: A Negative Start
Indian equity markets began the final trading day of the week with losses, in-line with other global peers.
The S&P BSE Sensex opened 0.5% lower at 36,555 while the NSE Nifty 50 index opened at 10,764, down 0.46%. Both benchmark indices were up 2% for the week, as of closing on Thursday.
All sectoral indices, barring the pharma index have opened with losses. The PSU Bank, Metal and Realty index opened 1% lower. As did the Nifty Bank, which opened with losses of 0.9%.
The Nifty Pharma index opened with gains of 0.3%.
Broader markets have opened in-line with the benchmarks. Both Nifty midcap and smallcap indices have opened 0.6% lower.
Market breadth is in favour of the laggards. 975 stocks on the NSE opened with losses while 527 advanced in opening trade.
Latest On The Coronavirus
- Total cases cross 12.2 million globally
- Death toll rises to 5.54 lakh
- Daily cases in the U.S. cross 60,000 for the first time
- Mexico posts record daily infections for the second day in a row
- Death toll in Iran hits a new high
- Bolivia's President tests positive
- U.S. Marine tests positive in Australia's Darwin
- Record number of deaths reported in Texas
- 149 deaths reported in California
Top Reads On BloombergQuint.com
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- TCS: Dollar revenue declines 7% while net profit declines 13% as compared to the previous quarter. Lower revenues lead to margins declining to 23.6% from 25.1%. The management expects a gradual recovery over the next two quarters.
- Reliance Industries: Announces start of their JV with BP, named Reliance BP Mobility. It aims to expand to 5,500 sites over the next five years from the current 1,400. It also aims to increase its presence to 45 airports from the current 30 going ahead.
- Punjab National Bank: Board approved raising Rs 10,000 crore by private placement, QIP issue, FPO, rights issue or any combination thereof and seek shareholders nod to raise Rs 7,000 crore via equity.
- Tata Motors: JLR retail sales down 42.4% while June retail sales down 24.9%. JLR says sales in North America and China were encouraging.
- PNB Housing Finance: Plans capital raise of up to Rs 1,700 crore. Retail loans under moratorium phase 2 account for 29% of retail AUM and 39% of overall AUM is under moratorium.
- Firstsource Solutions: Rakesh Jhunjhunwala increased stake to 2.88% from 2.06% in the June quarter.
- Gujarat Ambuja Exports: Board to consider proposal for share split of 1:2 on July 25.
- VIP Industries: Board approved raising NCDs worth Rs 100 crore via private placement.
- Muthoot Capital Services: Completed its first securitization of Rs 100.9 crore in FY21.
- Non-Nifty Earnings Today: IRCTC, SAIL, Karnataka Bank, Lakshmi Vilas Bank, Future Consumer, GNFC, IFB Agro.
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 Thursday
- Benchmark indices end mixed
- S&P 500 and Dow Jones end lower while Nasdaq outperforms
- Long-term government bonds rallied following an auction of 30-year securities that showed strong demand
- Florida and California continue to report higher Covid-19 cases.
- Thursday's jobs data was better than estimates
- Bloomberg dollar spot index rose 0.2%
- Yield on the 10-year treasury fell six basis points to 0.61%
- West Texas Intermediate crude fell 3.5% to $39.47 per barrel
Get your daily fix of the global markets here.
Another Week Of Gains?
Good Morning!
Indian equity markets gained in six of the last seven trading sessions, ending the weekly options expiry on a strong note.
The S&P BSE Sensex and the NSE Nifty 50 index have gained 2% each so far this week.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.3% to 10,801 as of 7:45 a.m.
Asian markets have opened lower this morning, paring gains made during the week. Concerns have resurfaced that rising Covid-19 cases will hamper global economic recovery.
Markets in Japan and Hong Kong have opened lower, while those in China are down 1% after an eight-day winning streak.
Treasuries have held an overnight advance, while the U.S. dollar is edging higher.
Futures on the Dow Jones are unchanged after the index ended 1.4% lower on Thursday.
Oil prices fell further with West Texas Intermediate down 0.4% to $39.46 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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