KEY HIGHLIGHTS
Closing Bell
India’s key stock benchmarks retreated from record highs, with the region-beating rally pausing amid ongoing optimism over an economic rebound as Covid-19 cases ebb.
The S&P BSE Sensex fell 0.5% to 52,501.98, while the NSE Nifty 50 Index lost 0.6%. Both gauges have risen for the previous four sessions, a rally that took their relative strength indexes to levels that signal declines to some investors.
All except three of 19 sector sub-indexes compiled by BSE Ltd. dropped, led by a measure of the metal companies.
“Nifty has been trading in an uptrend channel on the intraday chart and currently hovering around the upper band of the same,” Ajit Mishra, vice president research at Religare Broking Ltd. wrote in a note.
Stocks have risen to new highs even in the face of near-record valuations and a mixed earnings season. The benchmark index has advanced 10% this year compared to a gain of 5% in the MSCI AC Asia Pacific Index. Its 1-year forward price-to-earnings ratio has increased since April to 22 times, close to record valuations of about 23.4 times reached in January, according to data compiled by Bloomberg.
“Markets have run up so some room for consolidation is surely likely and pause before Fed as well,” said Sumeet Rohra, a fund manager at Smartsun Capital Pte. “Nifty may pause and pockets of undervaluation will catch up now.”
Sagar Cements Jumps To Record As Company Mulls Stock Split
Sagar Cements rose to a record high, extending its rally for a second consecutive session, after the company said its board will meet on July 1 to consider stock split.
Stock jumped as much as 16%, adding to Tuesday’s 20% gain
Chambal Fertilisers Soars On Heavy Volume
Chambal Fertilizers & Chemicals Ltd. rose 8.9%. Trading volume was eight times the average for this time of day.
Trading volume was 9.37 million shares, eight times the 20-day average of 1.14 million shares for this time of day.
The stock was the best performer among its peers.
The relative strength index on the stock was above 70, indicating it may be overbought.
Analysts have five buy, no hold, and no sell recommendations on the stock.
The price target of Rs 363.25 represents a 15% increase from the last price
Suprajit Engineering Falls After Large Trade
Suprajit Engineering falls as much as 13.7%, most intraday since March 25 last year, after about 5.56 million shares (or 4% equity) changed hands on NSE, according to data compiled by Bloomberg.
Trading volume >84x three-month full-day average
Buyers, sellers not immediately known
Market Update: Sensex, Nifty Stay Lower; FMCG Index Outperforms
Indian equity benchmarks remained lower slide after fluctuating between gains and losses in opening trade.
The S&P BSE Sensex is trading down 0.43% at 52,548.09, while the NSE Nifty 50 Index also fell by a similar magnitude to trade at 15,793.35.
The broader market too was more or less inline with its larger peer. The S&P BSE MidCap fell 0.59% and S&P BSE SmallCap declined 0.41%, as compared to the S&P BSE LargeCap’s 0.44% slump. Four of the 19 sector sub-indices compiled by BSE Ltd. advanced, led by FMCG stocks. The S&P BSE Metal was the worst performer, down 2.19%.
The market breadth was slightly skewed in favour of the bears. About 1,419 stocks gained, 1,713 declined and 129 remained unchanged.
Shyam Metalics, Sona Comstar IPO Subscription Status: Day 3
Nifty Metal Index Turns Worst Sectoral Performer
A gauge of metals stocks led the losers after China took more steps to rein in commodity prices.
Rupee Bonds Drop As Oil Rally Fuels Inflation Worry
Sovereign Indian bonds fall on concerns that a rally in crude prices may add to already-elevated domestic price pressures. The rupee is little changed.
Yield on 6.64% 2035 bond up 2bps to 6.66%; that on 10-year bond climbs 1bp to 6.05%
USD/INR steady at 73.2875
Alembic Pharma Gains After Nod For Eli Lilly's Axiron Equivalent
Shares of the drug maker gained as much as 2.1%, reversing a 0.8% drop, after it said its joint venture gets USFDA approval for testosterone solution.
The approved ANDA is therapeutically equivalent to the reference listed drug product, Axiron Topical Solution, 30 mg per pump actuation, of Eli Lilly and Company.
Testosterone Topical Solution USP, 30 mg per pump actuation has an estimated market size of $21 million for twelve months ending March 2021 according to IQVIA.
Jubilant FoodWorks Hits Record High
Shares of the Domino's Pizza chain operator in India jumped as much as 4.9% to a record high of Rs 3,332 after most brokerages gave a thumbs up to its fourth quarter performance.
The company reported better-than-expected earnings as the revamped management team takes on the challenge of its growing business needs, according to CLSA. "Post-Covid-19, we expect the organised sector to likely grow at a faster pace, dine-in to see full recovery and delivery routes to continue and retain higher mix."
The broking firm said it sees Jubliant's initiatives over the past 12 months as an apt call to leverage the orgainised segment oppertunities. "We maintain our Outperform recommendation with a revised target price of Rs 3,300 (earlier Rs 3,000)."
To read more on what top brokerages made of Jubliant's Q4 performance, click here
Adani Group Stocks Extend Slide
Shares of some companies controlled by billionaire Gautam Adani fell for a third day, with three of them dropping by their daily limit.
Adani Total Gas Ltd. , Adani Power Ltd., Adani Transmission Ltd. hit the lower circuit by dropping 5% each
Adani Green Energy Ltd. slipped 3.9%, while Adani Enterprises Ltd. lost 3% and Adani Ports and Special Economic Zone Ltd. fell 1.9%
Adani group companies have been under pressure since the start of the week after a local media report said a depository had frozen accounts of three overseas investors in some of the shares; however, they pared losses after the Adani companies refuted the report and claimed the accounts were active.
Opening Bell: Sensex, Nifty Slide As Investors Await Fed Meet Outcome
Indian equity benchmarks opened lower amid muted Asia trading as investors await a policy decision from the Federal Reserve.
The S&P BSE Sensex fell as much as 0.3% to 52,607 and the NSE Nifty 50 Index lost by a similar magnitude, before paring most of their losses. Both gauges have risen for four consecutive sessions, a rally that took their relative strength indexes above 70 yesterday, an indicator to some investors that they’re poised to fall.
Ten of 19 sector sub-indices compiled by BSE Ltd. fell, led by a gauge of power companies. The S&P BSE FMCG index was the best performer.
“Nifty has been trading in an uptrend channel on the intraday chart and currently hovering around the upper band of the same,” Ajit Mishra, vice president research at Religare Broking Ltd. wrote in a note.
The Common Winning Bet Made By Top-Performing India Funds
India’s best-performing stock funds have one thing in common: they’ve bet on companies that make the chemical substances used in items ranging from lip balms to crop-boosting fertilizers.
Chemicals producers make up at least 14% of the portfolio for three funds that have delivered the biggest returns this year among those with at least $500 million in total assets, according to Bloomberg-compiled data. Those bets have paid off thanks to rising global appetite for specialty chemicals in industries such as automobiles and cosmetics amid a recovery from the pandemic.
To read the full report click here.
Rupee Bond Traders Await Sale Of Treasury Bills
Rupee bond traders will assess demand at a 360b rupee auction of treasury bills. The rupee could come under pressure as crude oil continues to rally.
USD/INR little changed at 73.3125 on Tuesday
Implied opening from forwards suggest spot may start trading around 73.30
“New virus cases have moderated and the BoP picture remains positive for the year,” Danny Suwanapruti, EM Asia strategist at Goldman Sachs, writes in a note
“We expect the current account deficit to be more than offset by FDI and equity inflows”
Spot INR appreciation may be limited after recent appreciation as the RBI is likely to remain active
Thinks INR is still an attractive carry-to-vol currency
Maintains USD/INR forecast at 71 for 12-month horizon
SGX Nifty Subdued Amid Steady Asia Trade As Fed Meets; Oil Extends Rally
Good morning!
Asian stocks saw muted trading Wednesday after their U.S. peers retreated from all-time highs, with investors awaiting a policy decision from the Federal Reserve. Crude oil traded at the highest since 2018.
Shares were modestly higher in Japan and Australia, while South Korean stocks led gains. Hong Kong and Chinese equities slipped.
India’s SGX Nifty 50 Index futures for June delivery fell 0.1% to 15,844.50, while the MSCI Asia Pacific Index was little changed. The NSE Nifty 50 Index added 0.4% Tuesday to 15,869.25.
Investors have been marking time ahead of the Fed’s policy decision as they await clues about when the central bank will slow the pace of emergency asset purchases.
Economists expect the so-called dot plot to point to an interest-rate increase in 2023, while the bank is unlikely to signal a scaling back of bond purchases until later this year.
Elsewhere, Bitcoin fluctuated around $40,000. West Texas Intermediate crude traded above $72 a barrel as investors weighed the outlook for rising demand against extended anti-virus curbs in some economies.
Back home, LIC Housing, Lemon Tree may react as the companies reported quarterly results after the market closed Tuesday. CESC, Rites Asahi India Glass and Nureca are among companies scheduled to report earnings Wednesday. Foreign investors bought a net Rs 807 crore of stocks on Monday, according to NSDL website.
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