KEY HIGHLIGHTS
Closing Bell: Another Strong Session
Indian equity markets continue to extend their rebound, ending higher for the fourth straight day.
The S&P BSE Sensex ended 1.49% higher at 34,843 while the NSE Nifty 50 index ended at 10,471, up 1.55%.
Both benchmark indices have now advanced in five out of the last six trading sessions. The Sensex has advanced 2,202 points while the Nifty has gained 658 points in the last six trading sessions.
Among the sectoral indices, the Nifty Bank ended with gains of 2.6%. The index has gained over 2,350 points in the last six trading sessions.
The Nifty PSU Banking index remained the top sectoral performer, ending with gains of 3.4%. Other than the Nifty Bank, other indices that gained over 2% were the Nifty Media and the Nifty Realty index.
Nifty I.T., FMCG and Metals index gained between 1.5-1.7% each.
Broader markets moved in tandem with the benchmarks with the midcap and smallcap index gaining 1.5% each.
The volatility index, though higher at the start of trade, ended 3.5% lower at 29.39.
Bajaj Finance was the top gainer on the Nifty 50 index, ending 9.2% higher. 46 out of the 50 Nifty constituents ended with gains.
The four laggards that declined on the index, included Reliance Industries, which ended 1.4% lower.
Market breadth remained in favour of the advances. 1,323 stocks on the NSE ended with gains while 504 declined.
Contributors To Nifty Gains
Buzzing Stock: Bandhan Bank
- Top performing stock on the Nifty Bank index
- Gains as much as 14.6% to Rs 356.9
- Biggest single-day gain in over two months
- Trades at the highest level in over three months
- Up for the fourth straight day
- Best winning streak in nearly two months
- Has gained 35% in the last four trading sessions
- Today's volumes are 1.4 times higher than its 30-day average
- Stock in overbought territory with Relative Strength Index (RSI) at 75
- Has more than doubled from its 52-week low of Rs 152 on March 25, 2020
- 15 out of the 21 analysts tracking the stock have a buy recommendation; 2 sell calls
- Stock trades 16% above its 12-month consensus price target of Rs 287.67, implying a negative return potential
Buzzing Stock: Trent
- Second best performer on the Nifty Smallcap index
- Gains as much as 17.2% to Rs 687.7
- Biggest single-day gain since December 2007
- Trades at the highest level in over three months
- Up for the sixth straight day
- Longest winning streak since October 2019
- Up 33% in the last six trading sessions
- Today's volumes are 3.3 times higher than its 30-day average
- Trades in overbought territory with Relative Strength Index (RSI) at 73
- Has gained nearly 90% from its 52-week low of Rs 365 on March 24, 2020
- 9 out of the 14 analysts tracking the stock have a buy recommendation
- The stock trades 18.3% higher than its 12-month consensus price target of Rs 513.5, implying a negative return potential
Earnings Reaction: Page Industries
- Revenue down 11% to Rs 541.3 crore
- Net profit down 58.7% to Rs 31 crore
- Ebitda down 51.5% to Rs 58.1 crore
- Ebitda margin down to 10.7% from 19.7%
- All numbers are standalone and compared on a year-on-year basis
Shares fell as much as 3% to Rs 18,806, post the announcement.
Buzzing Stock: Emami
- Top performer on the FMCG index
- Gains as much as 9% to Rs 222
- Biggest single day gain in over two months
- Trades at the highest level in over two months
- Up for the fifth straight day
- Longest winning streak in over two months
- Up 14% in the last five trading sessions
- Today's volumes are 3.7 times higher than its 30-day average
- Trading near its 100-Day Moving Average of 221.4
- Gains 70% from 52-week low of Rs 130 on March 30, 2020
- 19 out of the 32 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 20.9%
Earnings Reaction: Indian Bank Q4FY20
- Net loss widens to Rs 217.73 crore from Rs 189.77 crore
- Net Interest Income up 24.9% to Rs 2,202 crore
- Gross NPA at 6.87% from 7.2% in the previous quarter
- Net NPA at 3.13% from 3.5% in the previous quarter
- Provisions up 23% from the previous quarter to Rs 1,891.8 crore
- Barring asset quality and provisions, all other numbers are compared on a year-on-year basis
- Provision Coverage ratio at 73.05%
- Declared one advanced account as fraud during the quarter.
- Provision of Rs 108.9 crore against accounts with outstanding of Rs 725.99 crore which would have slipped into NPAs in the absence of RBI's moratorium facility
Shares are cooling off the day's high, trading higher by 5.6% after gaining as much as 13.36% earlier in the session.
Seventh Day Of Gains For The Media Index; Most In Five Months
Markets At 2:10 P.M.
- Benchmark indices trade near the day's high
- Nifty up 1% at 10,420
- Sensex up 1% at 32,257
- Nifty Bank up 1.3% at 21,990
- Nifty Midcap and Smallcap Index up 1.2% each
- India Volatility Index down 1.8% to 29.9
- Nifty PSU Bank remains the top sectoral gainer; up 3%
- All other sectoral indices - Auto, FMCG, I.T., Media, Metal and Realty index gain between 1-1.9%
- Nifty Pharma index trades with gains of 0.8%
- Larsen & Toubro is the top Nifty gainer; up 5.8%
- Reliance Industries is the top Nifty laggard; down 0.8%
- 1,316 stocks on the NSE trade with gains while 474 decline
Money Market Update
The currency ended stronger for the second straight day, tracking positive cues in the equity markets and weakness in the U.S. Dollar.
The rupee ended at 75.64 against the greenback as compared to Monday's close of 76.03. Today's close made rupee the second best performing currency in Asia, after the South Korean Won.
"The risk on sentiment spurring gains in equities is supporting the rupee," according to Anindya Banerjee of Kotak Securities. Banerjee expects the rupee to appreciate further towards the mark of 74 against the U.S. Dollar.
Yield on the 10-year government bond ended at 5.9% as compared to the opening level of 5.879%.
Various state governments sold bonds worth Rs 7,500 crore as compared to the initial plan of Rs 6,100 crore, according to the Reserve Bank of India.
More Legs To The Market Rally?
Active Stock Options
- Bajaj Finance: Premium up 62.9% to Rs 31.6. The contract has added 32,750 shares in Open Interest.
- IndusInd Bank's 520 Call: Premium up 69.4% to Rs 16.6. The contract has added 2.7 lakh shares in Open Interest.
- Hindustan Unilever's 2,200 Call: Premium up 201.7% to Rs 17.05. The contract has shed 55,200 shares in Open Interest.
Covid-19 Update: Hindustan Media Ventures
- Business across sectors severely impacted.
- Profitability adversely affected due to decline in advertising spends.
- Have more than adequate liquidity to carry out operations.
- Difficult to ascertain and project future impact on operations and profitability.
- Reducing various variable and fixed costs and taking multiple steps to conserve cash.
- Anticipate no issue in servicing debt and other financing arrangements.
Shares are at the day's high, up 5.7% to Rs 52.7 and are up for the fourth straight day.
Buzzing Stock: BSE
- Among the top performing stocks on the Nifty Smallcap Index
- Gained as much as 20% to Rs 504.8
- Biggest single-day jump since February 2017
- Trades at the highest level in four months
- Up for the fourth straight day
- Longest winning streak in a month
- Up 20% in the last four trading sessions
- Today's volumes are 10.8 times higher than its 30-day average
- Trading in overbought territory with Relative Strength Index (RSI) at 74
- Near its 200-Day Moving Average of 467
- Has gained 68.3% from its 52-week low of Rs 275 on March 24, 2020
- All five analysts tracking the stock have a buy recommendation
- Return potential of the stock has per Bloomberg data is 19.2%
Earnings Reaction: DB Corp
- Revenue down 17.2% to Rs 489.8 crore
- Net profit down 55.7% to Rs 24.1 crore
- Forex loss of Rs 8 crore
- Ebitda down 35.3% to Rs 69 crore
- Circulation revenue down 5.7% to Rs 120 crore
- Advertising revenue down 20% to Rs 330.3 crore
- Radio advertising revenue down 16.4% to Rs 32.6 crore
- All numbers are compared on a year-on-year basis
Going forward, as we expect opening of the economy over the coming weeks, we remain optimistic of an up-tick in advertising spends by companies looking to woo the consumers back.Sudhir Agarwal, Managing Director, DB Corp
Shares fell as much as 6% to Rs 74 before recovering from the day's low, post the announcement.
Positive Start In Europe
European markets are off to a positive start ahead of preliminary PMI numbers and a reassurance from U.S. President Donald Trump that the trade deal with China is intact.
The Stoxx 600 opened 0.6% higher with all major indices rising in early trade. Industrials and financial services outperformed.
Most Asian markets have ended with gains while futures on the Dow Jones are little changed after falling as much as 400 points.
Brent Crude for the August contract was down 0.3% to $42.94 per barrel while Gold trades at $1,750/Oz.
Let's take a look at how benchmark indices across Europe have opened:
- Euro Stoxx 50 up 0.66% at 3,263
- DAX up 0.8% at 12,360
- CAC up 0.6% at 4,977
- FTSE 100 up 0.45% at 6,272
- IBEX 35 up 0.5% at 7,384
How Are The Sectoral Indices Faring
Earnings Expectations: Asian Paints Q4FY20
- Revenue seen 4% lower at Rs 4,812 crore
- Ebitda seen 7% higher at Rs 884 crore
- Ebitda margins seen at 18.4% from 16.4%
- Net profit seen 8% higher at Rs 512 crore
- All estimates are Bloomberg estimates, consolidated and compared on a year-on-year basis
Key Factors At Play For Asian Paints:
- Volume growth for the domestic paints business seen between 0-1%
- Impact on gross margin from price of key raw material and product mix trends
- Pricing and discount trends
- Management commentary on demand outlook
- Performance and outlook on the industrial paints business
V-Shaped Recovery If Virus Is Contained, Says CEA
India's Chief Economic Advisor Krishnamurthy Subramanian said that a V-shaped recovery is possible for the Indian economy this year, provided a vaccine is found to contain the pandemic.
"The recovery will happen after the uncertainty from the health side is taken care of," the CEA said at the Bloomberg Invest Global Virtual Conference.
In the absence of a vaccine, the economic recovery will have to wait until next year, although that too is likely to be V-shaped given the experience after the Spanish flu of 1918.Krishnamurthy Subramanian, Chief Economic Advisor
Subramanian is confident that support measures unveiled by the government, in addition to a low-base effect, will help lift economic growth next year.
Buzzing Stock: FDC
- Trades at the highest level since March 2018
- Market capitalisation of Rs 4,945 crore
- Gains as much as 7.2% to Rs 292.6
- Up for the second straight day
- Adds to Monday's gain of 9.5%
- Has gained in six out of the last seven trading sessions
- Up 19% in the last seven trading sessions
- Today's volumes are 6.3 times higher than its 30-day average
- Stock enters overbought territory with Relative Strength Index (RSI) at 71
- Has nearly doubled from its 52-week low of Rs 151 on July 22, 2019
- Only two analysts who track the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 4.4%
Markets At Noon
- Benchmark indices surge to the day's high
- Nifty up 0.8% at 10,392
- Sensex up 0.73% at 35,164
- Nifty Bank up 0.8% at 21,887
- Nifty Midcap Index up 0.9%
- Nifty Smallcap Index up 1.1%
- India Volatility Index up 1.43% at 30.9
- Nifty PSU Bank Index remains top sectoral gainer; up 3.4%
- Nifty FMCG, Nifty I.T., Nifty Metal and Nifty Pharma index up over 1% each
- UPL is the top Nifty gainer; up 4.7%
- Reliance Industries is the top Nifty laggard; down 1%
- 1,240 stocks on the NSE trade with gains while 490 decline
L&T Wins Orders
- Transport & Infra Business: Wins EPC contract to construct packages 11 and 22 of the Delhi-Vadodara expressway, which when completed will be the longest expressway under the Bharat Mala program.
- Transport & Infra Business: Wins another EPC contract from the PwD, Government of West Bengal to construct a four-lane Tallah (RoB), adjacent to the Tallah Railway Station.
- Water & Effluent Treatment Business: Gets engineering, procurement and construction orders from State Water & Sanitation Mission, Uttar Pradesh to impliment water supply schemes in Mahoba and Sonbhadra district.
The scope of these orders fall under the 'large' category, which in L&T's terminology, ranges between Rs 2,500 crore - Rs 5,000 crore.
Shares gained as much as 3.7% to Rs 941 and are up for the fourth straight day.
Nifty Forming A Support At 10,000?
India's options traders are confident that the level of 10,000 can act as a key support for the Nifty, Bloomberg News reports.
The 10,000 Put option now hold the highest outstanding bets among the index options contracts. The highest outstanding bets were earlier held by the 9,000 put strike.
The set-up overall looks good and ideally we should make a move beyond our recent highs of 10,350-10,400 to test higher levels of 10,600-10,800 in the forthcoming week.Sameet Chavan, Angel Broking
The Nifty has recovered over 35% from its low of 7,511 made in March.
Buzzing Stock: Nippon Life AMC
- Top performer on the Nifty Midcap index
- Gains as much as 11% to Rs 314.9.
- Biggest single-day gain in two months
- Trades at the highest level in over three months
- Up for the sixth straight day
- Longest winning streak in four months
- Up 15% in the last six trading sessions
- Today's volumes are 3.7 times higher than its 30-day average
- Breaks above its 100 and 200-Day Moving Average at 297 and 308 respectively
- Has gained 51% from its 52-week low of Rs 207 on March 24, 2020
- 9 out of the 16 analysts tracking the stock have a buy recommendation; 1 sell call
- Trades 9.5% above its 12-month consensus price target of Rs 278.4, implying a negative return potential
F&O Snapshot: Active Options Contracts
- Nifty June futures add 7.1% and 5.81 lakh shares in Open Interest.
- Nifty Bank June futures add 5.7% and 91,740 shares in Open Interest.
Nifty: June 25 Expiry
- 10,500 Call: Premium up 25.8% to Rs 39.75. The contract has added 3.38 lakh shares in Open Interest.
- 10,400 Call: Premium up 29% to Rs 76.35. The contract has added 3.87 lakh shares in Open Interest.
- 10,300 Put: Premium down 33.2% to Rs 77.65. The contract has added 13.8 lakh shares in Open Interest.
Nifty Bank: June 25 Expiry
- 22,000 Call: Premium up 13.1% to Rs 309. The contract has added 2.22 lakh shares in Open Interest.
- 22,500 Call: Premium up 21.5% to Rs 153.8. The contract has added 1.84 lakh shares in Open Interest.
- 21,000 Put: Premium down 26.1% to Rs 133. The contract has added 2.26 lakh shares in Open Interest.
Stock Reaction: L&T Infotech
The mid-sized technology services company has announced an accelerated migration program for customers of SAP with Amazon Web Servies.
The company will help customers move their SAP workloads from on-premise to Amazon Web Services, leveraging its migration acceleration platform and services, it said in a statement.
Working with AWS will help us digitize the core and bring this expertise to other SAP clients, leveraging our highly automated approach.Siddharth Bohra, L&T Infotech
Shares surged to the day's high, gaining as much as 1.7% to Rs 1,908, post the announcement.
Profit Booking In Glenmark
- Falls as much as 7% to Rs 483.1
- Biggest single-day drop in three months
- Ended 27% higher in Monday's trading session
- Snaps four-day winning streak
- Had gained 32% during the four straight days of gains
- HSBC Pooled Investment Fund sold 0.67% stake at Rs 527.7 per share
- Today's volumes are 16.3 times higher than its 30-day average
- Stock remains in overbought territory with Relative Strength Index (RSI) at 75
Fourth Day Of Gains For PSU Bank Index; At Three-Month High
Earnings Reaction: Sudarshan Chemical
The manufacturer of colour pigments reported a 4.5% growth in its revenue and a 5.8% growth in its net profit as compared to the previous year, for the quarter ended March.
Ebitda fell 17.6% while margins narrowed to 12% from 15.2% last year.
Higher other expenses, which included a forex loss of Rs 6.24 crore impacted margins.
Revenue from the pigments segment remained flat while other revenue grew 83% from the previous year.
Shares fell as much as 3.4% to Rs 404.2, snapping a four-day winning streak.
Brokerage Reaction: Colgate Palmolive
The oral healthcare brand is the top gainer on the Nifty FMCG index, after brokerage firm Nomura initiated coverage on the stock with a buy rating.
Nomura expects a potential upside of 18% on the stock, setting a price target of Rs 1,620.
The note expects oral hygiene consciousness to rise going forward, which will drive consumer habit changes.
It has termed Colgate-Palmolive has one of the most stable companies in a very stable category.
Nomura expects the company report earnings growth of 8%, 15% and 15% for FY21, FY22 and FY23 respectively.
Shares gained as much as 3.2% - its biggest single-day gain in a month to Rs 1,421. The stock is up for the fifth straight day - its best winning streak in five months. The stock is trading at the highest level in two months.
Markets At 10:20 A.M.
- Benchmark indices fluctuate between gains and losses
- Nifty up 0.6% at 10,372
- Sensex up 0.5% at 35,085
- Nifty Bank up 0.9% at 21,900
- Nifty Midcap Index up 0.8%
- Nifty Smallcap Index up 0.65%
- India Volatility index up 1.6% to 30.94
- Nifty PSU Bank up for the fourth straight day; up 2.7%
- Nifty Metal, Pharma and FMCG index gain over 1% each
- IndusInd Bank is the top Nifty gainer; up 4%
- Reliance Industries is the top Nifty laggard; down 0.8%
- 1,134 stocks on the NSE trade with gains while 533 decline
HDFC To Raise Capital In Two Tranches, Says CEO
Non-bank lender HDFC will raise capital in two tranches, Chief Executive Officer Keki Mistry told Bloomberg Television in an interview.
The first phase of the fund raise will be through equity and the second through an instrument convertible to equity later, Mistry said.
HDFC had announced its plans to raise Rs 14,000 crore through various options in order to fund inorganic and organic growth opportunities.
Higher capital levels will also boost the ability to push lending once growth revives, Mistry said.
When asked about the People's Bank of China buying stake in the company, Mistry said that the stake is purchased through the secondary market and is very small.
Shares are down for the third straight day, falling as much as 0.9% to Rs 1,803.
Money Market Update
The currency opened stronger for the second straight day. Equity markets are volatile in the first hour of trade.
The rupee opened at 75.86 against the U.S. Dollar as compared to Monday's close of 76.02. The currency ended as the best performer in Asia on Monday.
In the bond markets, traders look forward to the sale of state government bonds worth Rs 6,100 crore.
Earnings Reaction: Info Edge
Food delivery app Zomato's parent company reported a 7.8% growth in its revenue for the quarter ended March. Ebitda rose 6.4% while net profit fell 63.7% as compared to the previous year.
The losses made by associates and JVs impacted the company's profit. The losses stood at Rs 136 crore as compared to a profit of Rs 90 crore during the same period last year.
An exceptional loss of Rs 183 crore also impacted the company's profit.
The company has also announced that it will raise up to Rs 1,875 crore through a QIP issue.
Shares gained as much as 6.5% to a four-month high of Rs 2,950.
Coronavirus India Updates
- 14,933 new cases added in the last 24 hours
- Total number of confirmed cases in the country rise to 4,40,215
- Number of active cases: 1,78,014
- Number of patients cured / discharged: 2,48,190
- Death toll rises to 14,011
- 312 deaths reported in the last 24 hours
- 10,994 patients recovered in the last 24 hours
Large Trade Alert: Mahindra CIE
43.8 lakh shares, totaling to 1.16% of the total equity of the auto component maker exchanged hands in a single large trade on the National Stock Exchange, according to Bloomberg data.
Buyers and sellers of the trade remain unknown.
The stock is locked in an upper circuit of 5% for the fifth straight day at Rs 120.15. Volumes in the stock are 40 times higher than its 30-day average.
Large Trade Alert: Siemens India
16.99 crore shares of the capital goods company exchanged hands on the Bombay Stock Exchange, based on data compiled by Bloomberg.
Buyers and sellers in the trade were not immediately known.
Siemens AG had informed the exchanges on June 17 that it intends to sell 47.7% stake in Siemens India to Siemens International Holding through an inter-se transfer.
Shares gained as much as 2.85% to Rs 1,114.7 and are up for the fourth straight day. Its longest winning streak in over two months.
Stock Reaction: I.T. Stocks
Technology firms are bucking the trend at the start of trade today. U.S. President Donald Trump signed an order on Monday, temporarily halting access to several employment-based visas.
The technology industries has said that such a move could hurt the economy.
The order has put a freeze on new H1-B and H-4 visas. The issue of new green cards will also be halted through the rest of the year.
Opening Bell: Fourth Day Of Gains
Indian equity markets opened flat but with a positive bias after markets across the globe fluctuated amid trade uncertainties.
The S&P BSE Sensex opened 0.3% higher at 35,015 while the NSE Nifty 50 index opened at 10,347, up 0.36%. The top five laggards on the Nifty 50 index are I.T. stocks.
Both benchmark indices opened higher for the fourth straight day.
Among the sectoral indices, the I.T. index was the only sectoral laggard, opening 0.4% lower while the media, PSU Bank and Realty indices opened with gains of over 1%.
Market breadth was in favour of the advances. 1,172 stocks on the NSE opened with gains while 266 declined.
Latest On The Coronavirus
- Global cases cross the 9 million mark
- Death toll rises to 4.71 lakh
- Hong Kong records 30 imported cases on Monday
- Texas Governor Gred Abbott said the infection was accelerating at an unacceptable rate
- Tokyo Disneyland opening on July 1
- South Korea reports 46 new cases
- Beijing reports 13 new cases
- 750 more deaths reported in Mexico
Top Reads On BloombergQuint.com
Also Read: India Must Not Drop Out of Crypto Arms Race
Key Stocks In Focus
- Info Edge: To raise Rs 1,875 crore through issue of equity shares of face of Rs 10 via a Qualified Institutions Placement (QIP).
- Fitch Ratings: Revises outlook on long-term issuer default ratings of Indian Oil, BPCL, Oil India, GAIL, Power Grid and NTPC to negative from stable. The long-term Issuer Default Rating is re-affirmed at BBB- for all the companies.
- Alkem Laboratories: Board approved closure of operations at its manufacturing facility at the Betalactum block in Daman. The facility contributed 0.8% of the total turnover and mainly catered to the international market and was significantly under-utilized.
- HDFC AMC: Says it is now compliant with minimum public shareholding norms as per SEBI, after the stake sale through an OFS by Standard Life Investments. Promoters currently hold 73.97% stake in the company.
- Satin Creditcare Network: Approved raising Rs 120 crore via rights issue.
- UTI AMC: Received SEBI nod for Rs 3,000 crore IPO.
- Omaxe: To consider raising funds on June 29.
- Non-Nifty Earnings Today: Page Industries, Berger Paints, Alkyl Amines, Aster DM Healthcare, Balrampur Chini, Bank of Baroda, DB Corp, Finolex Industries, GM Breweries, Hatsun Agro, Kolte-Patil, Indian Bank, Phillips Carbon Black.
To know more about results reported after market hours and expectations from the results today, click here.
Your Trade Setup For The Day
How Did The Fund Flows Fare On Monday
A Check On Indian ADRs
U.S. Markets On Monday
- Benchmark indices ended with gains, led by technology shares
- Nasdaq gained for the seventh straight day, its longest rally of the year
- S&P 500 underperformed with some sectors under pressure
- Gold tested a seven-year high while the U.S. Dollar weakened
- "Rightly or wrongly, there’s also a pretty widespread feeling that riskier assets won’t go down too far because the Federal Reserve won’t let them," James Athey of Aberdeen Standard Investments told Bloomberg.
- The S&P 500 is within 10% of its pre-pandemic peak
Catch all the live action from the global markets here.
Volatility Ahead?
Good Morning!
Indian equity markets may witness a volatile session as White House Adviser Peter Navarro described the trade deal with China as “over” before later saying that the remark was not as it seemed.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, remained flat at 10,335 after falling to the day’s low of 10,226.
Asian markets have slid after a positive open post Navarro’s comments. The MSCI will be announcing its market classification review for 2020 later in the day.
Yield on the 10-year treasury fell two basis points to 0.68%, while West Texas Intermediate crude fell 2% to $40 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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