Sensex, Nifty Snap 2-Day Gains Ahead Of RBI Credit Policy

Indian stocks declined the most in over a week as investors held back their bets ahead of the central bank’s policy decision due Wednesday.

The S&P BSE Sensex fell nearly 0.4 percent to 31,190 while the NSE Nifty 50 index too dropped 0.4 percent to 9,637. Earlier, the 50-share benchmark managed to open above the 9,700-mark for the first time ever.

The market breadth turned in favour of the bears by the end of trade. About 5 stocks declined to every 1 that gained on the NSE.

The Reserve Bank of India is likely to stand pat on rates, according to economists surveyed by BloombergQuint, despite slowing growth and record low inflation.

The Nifty may trade within a tight range of 9,540 on the downside and 9,710 on the upside for the next week or so, Ashish Kyal, CEO at wavesstrategy.com told BloombergQuint in a phone interview. “I am not too bullish on the market from a short to medium-term perspective,” he said.

Kyal said investors can look to some of beaten down I.T. names but advised them to stick to the frontliners. “I think I.T. can be an outperformer in the coming days,” he said.

Also Read: IT Stocks Look Set To Break The June Jinx; Index Up 2.5%

• ONGC has 15 lakh shares change in a block deal
• Ashok Leyland has 62.2 lakh shares change hands in a block
• TVS Motor has 15 lakh shares change hands in a block
• Federal Bank has 15 lakh shares change hands in a block
• Fortis Healthcare has 15 lakh shares change hands in a block
• ITD Cementation has 25.9 lakh equity trade in block deal

Buyers and sellers were not immediately known.

Source: Bloomberg

Shares of the agri-chemical firm pared early gains to fall as much as 3 percent intraday, to Rs 4,715, after its board announced a buyback offer.

The company will buy back up to 10 lakh shares at Rs 4,900 each via the tender offer route, according to a statement on the exchanges. The total buyback will be for about Rs 500 crore.

The founder group is also expected to participate in the buyback.

Kirloskar Industries Hits Upper Circuit For A Second Day

• Stock jumps 10 percent for a second day
• Trading volumes at 5 times its 20-day average
• Heavy equipment manufacturer has a market cap of nearly Rs 1,300 crore
• The stock has gained 62 percent so far this year

Shares of the drug maker fluctuated between gains and losses after it announced the launch of Bivalirudin for injection in the U.S. market. The drug maker has received U.S. FDA approval for the same.

Shares of the drug maker gain as much as 4 percent after the company said the U.S. FDA has cleared its formulation unit at Baddi.

The company said the drug regulator’s establishment inspection report indicates successful closure of the points raised by the FDA on the inspection carried out between Feb. 21 and March 1.

Shares of the Gautam Adani-led company rose as much as 6.4 percent, the most since April 18, after it said it will proceed with its $16.5 billion Carmichael project in Australia’s Queensland state.

The project was delayed due to uncertainty over a royalty deal with the state and amid protests from local environmental groups.

• Adani Power (+0.7%)

Opening Bell

Indian shares climbed, with key equity benchmarks opening above fresh records highs on hopes that the central bank will ease interest rates in its policy meet due Wednesday.

The S&P BSE gained as much as 0.4 percent to 31,430 – a new all-time high for the 31-share index. The NSE Nifty 50 Index rose 0.3 percent in opening trades to 9,709 – its first time above the level – before pairing some of the gains.

The market breadth was firmly skewed in favour of the bulls. About 3 stocks advanced to every 1 that declined on the NSE.

Also Read: Volatility May Return to India Bull Market as Profits Falter

• Adani Power: To consider sale of Mundra Power Generating Business Undertaking to subsidiary Adani Power (Mundra)
• Aditya Birla Nuvo: Says NCLT approves merger of ABNL with Grasim, listing of financial services business unit; merger expected to be effective in 2Q
• Cadila Healthcare: Says Baddi facility got EIR from U.S. FDA, indicates successful closure of inspection points 483s raised
• ICICI Bank: To list general insurance unit, sell partial stake
• NDTV: Says CBI raids on allegations regarding loan repaid 7 years ago
• State Bank of India: Says QIP issue opens; sets share sale floor price at Rs 287.58 each and to be priced on June 8
• Strides Shasun: FDA issues Form 483 after inspecting Bangalore south plant
• Tata Motors: Executive Director commercial vehicle Pisharody resigns
• HPCL said planning to raise $4.2 billion for Rajasthan refinery (Mint)

For a complete list of stocks to watch, click here

IPO Watch

• India Grid Trust’s InvIT Fund units listing Tuesday, after selling shares at Rs 100 each in IPO last month

Though bankers are expecting the RBI to ditch its hawkish stance tomorrow, not many expect the central bank to cut interest rates to tackle the slowdown in growth. That's because excess liquidity in the banking system is already doing that job.

Out of the 25 economists surveyed by Bloomberg, 24 expect the RBI to keep the repo rate on hold, while one sees a quarter-point reduction. Banks are holding almost 4 trillion of surplus cash, according to a Bloomberg index after the banking system was flooded with money due to the government's demonetisation decision.

The rupee is seen opening strong following its other Asian peers.

• BSE revised contract note format as per GST laws
• BNP expects challenging 2017 for India M&A deals as stocks rally
• India hopeful China will rethink One Belt-One Road plan, says Sushma Swaraj
• India said to seek job pledge from Apple in lieu of tax breaks
• India successfully launches its most powerful rocket
• India industry group seeks higher import tax on vegetable oils
• India monsoon rains 4 percent above normal June 1-5: Weather Office
• India sugar premium at two-year high May spur imports: SocGen
• Avendus said to bid for Ocean Dial Asset Management (Times of India)
• Global funds buy Rs 477 crore of local stocks; domestic funds buy Rs 13.62 crore yesterday: Provisional data

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, was little changed at 9,697.

Asian shares declined marginally in early trade, as investors turn cautious following a seven-week surge in global equities. The yen and gold remained steady while the dollar stayed at its seven-month low after falling 0.2 percent on Monday.

American data on services and manufacturing, labour cost and productivity was in line with the estimates, indicating stable growth in the world’s largest economy. U.S. stock futures were little changed, after the S&P 500 Index fell 0.1 percent a day before.

With central bank policy makers in the U.S. and Europe all in quiet periods ahead of key policy decisions, attention this week has shifted to Britain’s election and testimony from former FBI head James Comey on Thursday. Traders are now forecasting a more than 90 percent chance of an interest-rate increase next week.

Oil erased gains sparked by a political spat between several energy-producing nations in the Middle East. However, traders have so far downplayed concerns that Qatar’s turmoil would hamper supply from the country.

"It is not the first time for OPEC to see a political rift between its member countries, and it’s not going to be the last," said Abdulsamad Al-Awadhi, a London-based analyst, told Bloomberg News.