Nifty Stagnates On Lack Of Cues; Avenue Supermarts Gains 115% On Debut

Indian shares ended little changed after spending the entire trading day in a tight range as lack of cues meant the action remained stock-specific.

The S&P BSE Sensex fell 0.1 percent to 29,485 while the NSE Nifty ended the session flat at 9,121. The market breadth was firmly tilted towards sellers over buyers. About 960 stocks declined, 498 gained and 56 remained unchanged on the NSE.

The rupee’s rally after Prime Minister Narendra Modi’s resounding win in state elections may fizzle out, if what happened following his historic victory in national polls is any guide.

The success of an exchange-traded fund backed by Prime Minister Narendra Modi’s government may help boost the acceptance of such products in the world’s second-fastest growing ETF market.

Investors poured Rs 9,200 crore ($1.4 billion), or 3.7 times the targeted amount, into a fund of the top 10 state-run companies, according to Reliance Mutual Fund, which manages the pool.

Bliss GVS Pharma's 2-Day Spurt

• Gains over 4% today, taking its gains over last two sessions to nearly 10%.
• Volumes at 13.5 times its 20-day average.
• Manufactures and distributes pharmaceuticals including contraceptives.
• Current market cap: Rs 1,730 crore.

Shares of the drug maker fell as much as 4.9 percent on reports of U.S. FDA concerns.

In fact, the Bombay Stock Exchange has sought a clarification from Dr. Reddy’s on a report by ET Now, which stated that the U.S. drug regulator has found repeat observations from 2015 warning letter.

The report said the FDA further said that the company has failed to maintain complete data to ensure compliance.

UPDATE

In its reply to the exchange, Dr. Reddys clarified that the company is preparing a comprehensive response on the 483 observations and will submit it to the U.S. FDA within the stipulated time.

Shares of the telecom dropped as much as 7.8 percent, its second day of decline, after it agreed to merge with Vodafone India to create the country's largest mobile phone operator worth more than $23 billion.

The Idea-Vodafone merger will create a strong player, but multiple challenges for the deal, including breach of spectrum holding and revenue marketshare cap, will need to be resolved in a fixed timeframe, ICRA said yesterday.

Analysts are of the view that the competition in the industry is unlikely to subside in the medium term despite the mega merger

(With inputs from PTI)

Tribhovandas Bhimji Zaveri's Rally Continues

• Gains as much as 6.2 percent on Tuesday, building on its five-day winning streak
• Rises 15 percent in the last five trading sessions
• Volumes at 3.07 times its previous 20-day average

Shares of Avenue Supermarts, the operator of D-Mart chain of stores, soared as much as 106 percent on their trading debut on the National Stock Exchange. The scrip opened trading at Rs 600 a share, 100.6 percent above its initial public offering price of Rs 299.

The Rs 1,870-crore offer received bids for 463.7 crore shares, against a book size of 4.37 crore shares, stock exchange data showed. Avenue Supermarts will use the proceeds from the stake sale to repay debt, and the remaining for maintenance and new stores, it said in its draft red herring prospectus.

The rupee weakened by 8 paise to 65.44 against the U.S. dollar in early trade due to appreciation of the American currency overseas.

Dealers attributed the rupee's fall to increased demand for the US currency from importers. However, a higher opening in the domestic equity market capped the losses.

The rupee had closed yesterday at a fresh 16-month high of 65.36 against the greenback in the face of dollar unwinding from exporters and banks.

Shares of HCL Technologies, Engineers India and Oil India reacted after the companies approved buyback of shares.

HCL Technologies approved buyback worth Rs 3,500 crore, Oil India said it would buyback shares worth Rs 1,527 crore while Engineers India proposes buyback worth Rs 658 crore.

• HCL Technologies (+1.2 percent to Rs 874)
• Oil India (-1.5 percent to Rs 329)
• Engineers India (-1.7 percent to Rs 152)

Shares of the drug maker dropped as much as 20 percent to its lowest level since June, 2014. The company said the U.S. FDA issued 66-44 import alert on products manufactured at its unit-II of plant located at Vishakhapatnmam, Andhra Pradesh.

The import alert signifies that the company cannot manufacture or market its drugs in the U.S. market from that particular facility. It is usually brought into place when the company is not operating “in conformity with current good manufacturing practices” , according the U.S. FDA website.

The stock was the worst performer on the BSE 500, 100 and 200 indexes. The volume on the stock was at three times its three-month full-day average.

Movers & Shakers: Aurobindo Pharma, Bharti Infratel, Unichem Labs

Indian shares climbed marginally higher as losses in telecom and drug makers was countered by gains in cement and FMCG companies.

The S&P BSE Sensex gained 0.2 percent to 29,575 while the NSE Nifty rose 0.2 percent to 9,144. The market breadth was firmly skewed in favour of the buyers. About 856 stocks advanced, 579 declined and 459 remained unchanged.

• HCL Tech approves buying back 35 million shares at Rs 1,000 a share
• Oil India board approves buyback of 44.9 million shares at Rs 340 a share
• Aurobindo gets FDA approval for generic Mucinex DM tablets
• Kaveri seed to consider share buyback on March 27
• Shree Renuka hires Czarnikow to sell Brazil sugar mills, says founder (Bloomberg)
• Unichem Labs says FDA observations on Goa factory ’correctable’

For a complete list of stocks to watch, click HERE

The rupee is likely headed for another session of gains as mixed signals from the U.S. Fed on the timing and quantum of further rate hikes is keeping the dollar strength in check.

While Chicago Fed president said interest rates could be raised two, three or four times this year, his colleague in Minneapolis feels there was no need to rush.

Importantly, the rupee has gained five out of the last six sessions and is trading at its highest level since Oct 2015 giving investors reasons to believe the rally may fizzle out soon.

In the fixed income market, the sovereign bonds are under pressure ahead of the sale of Rs 18,110 crore of Uday bonds as part of the power sector restructuring. Yield on the benchmark note has climbed 7 basis points in the last three sessions. All eyes will be on the sale as market is pricing in high risk premium on these bonds.

• Vodafone could sell part or all of Indus Towers stake: CFO
• India mulls part-funding for two new gas pipeline projects
• India cooking gas demand may touch 35 million tonne by 2031-32: Pradhan
• Lubrizol to boost equity in Lubrizol India Private Ltd.
• Bharti calls report of buying Tikona’s spectrum speculative

Offerings

• State Bank of India to examine issue of up to $1.5 billion debt
• India’s Sidbi scraps Rs 500 crore 3-year 1-month bond sale
• L&T Infra Finance plans Rs 300 crore NCD issue via private placement
• Varun Beverages seeks holders approval to raise Rs 1,000 crore

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, fell 0.3 percent to 9,190.

Asian stocks were trading mixed in early trade, gold dropped and bonds climbed after Federal Reserve officials reignited the debate on the timing of further policy tightening.

Japan’s Topix index dropped as trading resumed following a holiday after the S&P 500 Index fell for a third day. The yen strengthened against the dollar for a sixth day.

The U.S. Federal Reserve could raise interest rates two, three or four times this year, said Chicago Fed President Charles Evans, though his Minneapolis colleague Neel Kashkari argued that there was no need to rush.

The central bank last week raised interest rates and signalled it anticipated another two increases by year’s end.

Meanwhile, oil fell as Libyan port is set to resume shipments and the U.S. drilling revival undermines the potential OPEC output curbs to rebalance the market.