Sensex, Nifty Clock Best Monthly Gains In 16 Months

Indian shares advanced, led by a rally in state-owned banks, as the key equity benchmarks registered their best monthly gain since March 2016.

The S&P BSE Sensex gained 0.6 percent to 32,514 while the NSE Nifty 50 Index advanced 0.6 percent. Both the indices gained well over 5 percent for the month.

State Bank of India, the nation’s largest lender, climbed 4.5 percent after lowering its savings interest rates for most customers. It rose the most on the Sensex and Nifty gauges.

The Nifty PSU Bank Index’s 3.6 percent was the best among the 13 sector gauges compiled by NSE Ltd. The S&P BSE MidCap Index gained 0.4 percent to 15,389, a new record close.

Shares of the non-banking finance company rose as much as 4.2 percent after its net profit for April-June quarter beat street estimates.

• Q1 net income was Rs 449 crore versus estimate of Rs 395 crore
• Net interest income rose 15 percent year-on-year and 17% quarter-on-quarter to Rs 1,340 crore
• Gross bad loans 8.03 percent end-June versus 8.16 percent end-March

The stock is up 17 percent year-to-date. It has 21 buys, 9 holds, 6 sells; average price target of Rs 1,158: Bloomberg data

Shares of the electrical appliances maker erased gains and fell as much as 6.8 percent after its first quarter earnings missed street estimates.

• Q1 net income Rs 23.25 crore, estimate Rs 43.50 crore by Bloomberg
• Revenue Rs 572 crore, estimate Rs 624 crore
• Says margins decline due to GST, delayed price increase
• Expects to recoup lost sales in next couple of quarters

Online market place Snapdeal has walked away from its merger discussions with rival Flipkart.

The Gurgaon-based ecommerce firm is now planning its future as a standalone company, according to its statement, part of which will involve sale of its non-core assets.

Shares of the drug maker continued to trade lower after the company announced the completion an inspection by the U.S. FDA of its Aurangabad manufacturing facility with one 483 Observations.

The observation was procedural in nature and corrected during the inspection itself, the company said in its exchange filing.

Shares of the cement maker rose as much as 4.3 percent after its first quarter earnings beat street expectations.

• Q1 net profit Rs 440 crore versus Bloomberg estimate of Rs 380 crore
• Revenue Rs 2,860 crore versus Bloomberg estimate of Rs 2,510 crore
• Total cost Rs 2,450 crore versus Rs 1,920 crore

Shares of State Bank of India Ltd. surged after the bank decided to introduce a two-tier savings rate with effect from July 31, 2017.

While balance above Rs 1 crore will continue to attract interest of 4 percent per annum, accounts with balance below Rs 1 crore will have an interest rate of 3.5 percent per annum.

The decline in the rate of inflation and high real interest rates are the primary considerations warranting a revision in the rate of interest on savings bank deposits, the bank said in a statement.

The revision in saving bank rate would enable the bank to maintain the MCLR at existing rates benefitting a large segment of retail borrowers, the statement added.

SBI has a total of over 32 crore bank accounts. As of March 31, 2017, the bank had savings bank deposits worth Rs 7.43 lakh crore.

Shares of Godrej Consumer Products Pvt. Ltd. swung between gains and losses after its first quarter net profit declined 8.7 percent to Rs 225.1 crore on a year-on-year basis.

Consolidated revenue grew 3.5 percent during the quarter while margins expanded to 15.4 percent.

Max Financial Services Ltd. in an exchange filing said that the confidentiality, Exclusivity and standstill agreement entered into with HDFC is not being extended further.

The proposed scheme of amalgamation and arrangement should be treated as withdrawn, the release said.

While shares of Max Financial Services gained as much as 2 percent post the announcement, shares of HDFC Ltd. fell as much as 1.5 percent.

Shares of Central Bank of India Ltd. fell as much as 5.86 percent, the most in a month to Rs 85.90 after its net loss remained almost unchanged at Rs 576.7 crore on a year-on-year basis during the April-June quarter.

The lender's core income declined by 20 percent YoY, while its bad loans increased to 18.23 percent on a year-on-year basis.

The bank's asset quality saw further deterioration. Gross NPA stood at 18.23 percent while Net NPA was at 11.04 percent on a sequential basis.

Shares fell for the second straight day and have underperformed the S&P BSE Sensex index, with gains of 4.1 percent during the year.

Shares of the state-run bank fell as much as 5.6 percent, the most in two months to Rs 32.10 after its net loss narrowed to Rs 132 crore during the April-June quarter.

The bank saw a deteroiration in asset quality with gross NPA at 17.37 percent compared to 16.27 percent on a sequential basis while Net NPAs stood at 11.22 percent from 10.66 percent in the previous quarter.

The lender had fresh slippages of Rs 954 crore in the quarter ended June, Chairman and Managing Director Ashwani Kumar said in a media conference.

The bank also saw lower recoveries in Maharashtra and Uttar Pradesh due to farm loan waivers announced over the last quarter, Kumar said in the media briefing.

The stock fell for the fourth straight day to a seven-month low of Rs 32.10.

Shares of the construction company gained as much as 9.50 percent to Rs 98, after it bagged a contract for Zojila tunnel project in Jammu and Kashmir to be completed in 7 years.

This is the most that the stock has gained since January 3, 2017. It has under-performed the Sensex, having lost nearly 7 percent so far this year.

Shares of the infrastructure major gained as much as 4 percent to Rs 1,207, the most in over two months, after reporting quarterly earnings.

Most brokerages have maintained their ratings and price targets on the stock:

• CLSA maintains 'Buy' with price target of Rs 1,400
• Citi maintains 'Buy' with price target of Rs 1,341
• Deutsche Bank maintained 'Buy' with price target of Rs 1,350

The analyst consensus price target, tracked by Bloomberg was Rs 1,248.2, around 4.6 percent higher than the current market price. The stock has gained 33.1 percent so far this year, compared to 21.6 gain in the Sensex Index.

Indian shares climbed, snapping a two-day losing streak, led by gains in the nation’s largest construction company Larsen and Toubro Ltd., after it reported better-than-anticipated earnings.

The S&P BSE Sensex gained 0.4 percent to 32,451 while the NSE Nifty 50 Index rose 0.3 percent to 10,048. The market breadth was skewed in favour of the buyers. About 648 stocks advanced, 402 declined on the NSE.

It’s policy week and all hopes are set for an interest-rate cut when the RBI's monetary policy committee meets on August 2.

39 out of the 55 analysts polled by Bloomberg expect the repo rate to be reduced to 6 percent from 6.25 percent but there are enough voices that believe that the central bank may not cut rates.

Importantly, the bond prices have already factored in a rate cut and any negative surprise may not go down well with the investors. The view on the street is a range of 6.42-6.47 percent yield on the benchmark note until the policy announcement.

In the currency market, Asian peers are looking mixed, even though the dollar dropped on Friday owing to weak U.S. GDP data. A surge in commodity prices is helping the Asian raw material producers. Traders expect a higher opening for the rupee and a narrow trade in a range of 64.10-64.25 a dollar during the day.

• Bharti Airtel raised to equalweight at Morgan Stanley
• Dr Reddy’s cut to underperform at Khambatta Securities
• Exide Industries raised to buy at Nomura
• Glenmark Pharma cut to accumulate at Prabhudas Lilladher
• Godrej Properties new neutral at UBS, price target Rs 550
• Idea Cellular cut to reduce at ICICI Securities; price target Rs 85
• ITC raised to underperform at CLSA, price target Rs 285
• Oberoi Realty new buy at UBS, price target Rs 500
• ONGC raised to equal-weight at Morgan Stanley, price target Rs 167
• Phoenix Mills new buy at UBS, price target Rs 700
• Prestige Estates Projects new buy at UBS, price target Rs 375

• 4:30 p.m.: Fiscal deficit in rupees for April-June period
• Eight infrastructure industries index for June (Prior +3.6 percent)

Offerings

• Security and Intelligence Services India IPO at Rs 805-815 per share opens, closes August 2; allocates 43 lakh shares at Rs 815 each to 18 anchor investors
• SREI Equipment Finance public issue of NCDs gets 79 percent demand, offer scheduled to close July 31

• Balarampur Chini Mills
• Bank of Maharashtra
• BASF India
• Bharat Electronics
• Carborundum Universal
• Container Corp. of India
• GE Power India
• Godrej Consumer Products
• Hexaware Technologies
• InterGlobe Aviation
• Reliance Power
• Shree Cement
• Shriram Transport Finance Company
• Siemens
• Sintex Industries
• Sundram Fasteners
• Tech Mahindra
• Torrent Pharmaceuticals
• Trent
• UPL
• V- Guard Industries

• Nifty futures premium shrinks to 28 points from 43 points
• Maximum open interest on put side at 9,800 put with 42 lakh shares
• Maximum open interest on call side at 10,500 call with 31.7 lakh shares
• Call writers active from 10,000-10,500 levels; write between 4-14 lakh shares
• Put writers active from 9,700-9,900 levels; write between 4-6 lakh shares
• Nifty Put-Call Ratio moves to 1.22 from 1.26
• Indiabulls Real Estate, JSW Energy in F&O ban

• Lupin: Pithampur unit cleared by U.S. FDA without any observations
• HDFC: To sell up to 19.12 crore shares, or 9.57 percent stake, in HDFC Standard Life through an IPO
• NTPC: Shareholders approve raising funds via bonds and NCDs worth up to Rs 15,000 crore
• IL&FS Transport: Bags contract for Zojila tunnel project in J&K
• Marico: Acquired South Africa-based leading hair styling brand ISOPLUS for 75 million rand
• Indian Hume Pipe: Secured a work order of Rs 163.5 crore from Raipur Municipal Corporation
• ONGC: Wins government nod to buy stake in GSPC worth Rs 7,738 crore (PTI)

For a complete list of stocks to watch, click HERE!

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• Putin says U.S. must cut 755 Russia staff in sanctions reprisal
• Morgan Stanley cuts CPI forecast on benign GST, monsoon impact
• Low securities transaction tax driving retail investors to options, says SEBI
• Over 12 lakh businesses apply for new GST registration: Hasmukh Adhia
• Turning around Tata Motors domestic business need of the hour: Chandrasekaran
• Patel seen seizing last chance to spur growth in India rate call
• First signs of revival in demand for consumer goods after GST bump
• Investors explore merger between CarDekho and CarTrade
• NDA inches towards Rajya Sabha majority with regional parties’ help

Good Morning!

The Singapore traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed 10,033 after swinging between gaining and losses.

Asian stocks began the week on a mixed note, even as raw-material producers gained after a surge in commodity prices bolstered optimism the global economy can gather momentum.

Oil added to gains from Friday, which came as inventories for crude and gasoline shrank. Copper’s rally has further to go, Citigroup Inc. said last week after the metal reached a two-year high while top producer Chile raised its price forecasts.

The Bloomberg Dollar Spot Index declined for the third straight week while yen rose 0.1 percent.

Investors are assessing economic numbers from the world’s top three economies.

• The U.S. economy expanded 2.6 percent in the second quarter, indicating the world’s largest economy is growing steadily.
• China’s official factory gauge, the manufacturing purchasing managers index, slipped to 51.4 in July, compared to the 51.5 median forecast in a Bloomberg survey of economists and 51.7 in June, amid government efforts to curb financial risks.
• Japan’s industrial output for June rose 1.6 percent from the previous month, rebounding amid solid global demand.