State-Owned Oil Firms Help Sensex, Nifty Clock Fifth Weekly Gains

Indian shares gained with equity benchmarks staging a recovery in the last hour-and-half of trading led by state-owned oil companies.

Indian Oil Corporation Ltd., the country’s largest oil company, gained the most in little over a month, after its earnings beat analyst estimates.

The S&P BSE Sensex gained 0.3 percent to 32,333 while the NSE Nifty climbed 0.6 percent to 10,072. Both the Sensex (+0.05 percent) and the Nifty (+0.52 percent) clocked their fifth week of advance.

The market breadth was split down in the middle with almost the same number of stocks gaining to the declining ones.

Drugmakers, Dr. Reddy’s Laboratories, Sun Pharmaceuticals, were among the top losers on the Sensex and the Nifty, after Teva Pharmaceutical Industries, the world’s largest maker of generic medicines, slashed its profit forecast for the second time this year.

Seventeen of the 19 sector gauges compiled by BSE Ltd. advanced, led by S&P BSE Consumer Durables Index’s 4.21 percent gain to a record. The S&P BSE Healthcare Index dropped 0.94 percent, the worst performer, followed by S&P BSE Telecom Index’s 0.43 percent drop.

Shares of the oil marketing company gained as much as 3.5 percent after its first quarter gross refining margins beat analyst estimate.

The company’s revenue for the April-June period almost halved to Rs 925 crore, compared to previous quarter. Revenue went up around 4 percent to Rs 53,469 crore.

The gross refining margin was $5.86 a barrel versus $6.83 a barrel in the previous quarter. This was higher than the $4.9 a barrel estimated by analysts.

Other Highlights

• EBITDA down 44 percent to Rs 1,628 crore
• Operating margin at 3 percent versus 5.6 percent
• Forex gain of Rs 113 crore
• Inventory losses Rs 1,595 crore versus Rs 1,935 crore gain year-ago

Shares of the property developer gained as much as 3 percent after its board approved a buyback offer.

The company reported a net profit of Rs 47.70 crore for the April-June quarter, compared to Rs 49.2 crore estimated by analyst. Revenue came in at Rs 679 crore.

The company will buy back up to 14.6 lakh shares at Rs 425 each, it said in its exchange filing.

Shares of the auto maker declined as much as 1.5 percent after its first quarter earnings missed analyst estimates.

The company’s net profit for the April-June period declined 19.7 percent year-on-year to Rs 766 crore weighed down by GST rollout. The consensus estimate of analysts tracked by Bloomberg stood at Rs 851 crore.

Revenue rose 3.2 percent to Rs 12,335.6 crore, surpassing the consensus estimate of Rs 11,266 crore.

Shares of Titan Company Ltd. surged as much as 10.45 percent to a lifetime high of Rs 616.35 after multiple brokerages upgraded the stock post its first quarter earnings.

This is the most that the stock has risen since June 5, 2017.

• Goldman Sachs: Maintains 'Buy' and raises price target to Rs 600 from Rs 552
• IDFC: Upgrades rating to 'Neutral' with price target of Rs 559
• JPMorgan: Retains 'Overweight' and hikes price target to Rs 620 from Rs 540

The company has put together plans to stimulate demand for all its product categories through innovative advertising campaigns and new product launches in the coming quarters, it said in a statement.

Shares of Ujjivan Financial Services Ltd. fell as much as 7.7 percent, the most since May this year after it reported a net loss of Rs 75 crore during the April-June quarter.

The company has taken significant provision in the quarter based on collection trends, Managing Director and CEO of Ujjivan, Samit Ghosh said in a statement.

The Bloomberg consensus price target is 28.6 percent higher than the current market price.

Shares of the tyre manufacturer dropped as much as 6.49 percent, the most in a month after its net profit declined 99 percent during the April-June quarter.

Destocking by channel partners due to GST and peak raw material prices led to the 'tough quarter,' Ceat Managing Director Anant Goenka said in a statement.

While EBITDA fell 70 percent to Rs 56 crore, EBITDA margins contracted to 3.8 percent from 12.6 percent. Margins declined for the sixth quarter in a row.

The stock is currently trading below its 50-day moving average. The consensus price target of Bloomberg analysts of Rs 1,942.11 is 6.5 percent higher than the current market price.

Shares of the drug maker fell as much as 9.03 percent, the most in a month after the U.S. FDA issued a form 483 with 10 observations for its Bengaluru facility.

The regulator’s visit was part of the surveillance audit for a small molecule injectable, a Biocon spokesperson had said in a statement.

Form 483 is used by the FDA to document and communicate concerns and violations discovered during plant inspections.

Shares fell for the second consecutive day on the National Stock Exchange.

Indian shares opened on a tepid note tracking weak cues from Asia and ahead of the employment report in the United States.

The S&P BSE Sensex opened little changed at 32,213 along with the NSE Nifty 50 index that also opened little changed at 10,008.

Advance-Decline was in skewed in favour of the buyers. 699 stocks advanced while 655 stocks declined on the National Stock Exchange.

The Indian rupee, which has gained 0.7 percent this week, is headed for its best week in four months on strong foreign inflows.

A key event to watch out for the market today is U.S. employment report as it may provide clues on the strength of the world’s largest economy and the Federal Reserve’s next policy move.

Over to bonds now, traders are seen cutting duration and are prefering the short-end of the yield curve as not too many rate cuts are expected.

The short-end of the curve is expected to be supported more also because of ample liquidity with banks. Later today, RBI will auction government bonds worth Rs 15,000 crore.

• Nifty futures premium moves to 29 points from 19 points
• Bank Nifty sheds 2.4 lakh shares, open interest down 9 percent
• Nifty range for August series in terms of open interest concentration between 10,000 to 10.500
• Maximum open interest on put side at 10,000 strike with open interest at 46.2 lakh shares
• Maximum open interest on call side at 10,500 strike; open interest at 41 lakh shares
• Call strikes --10,100, 10,200, 10,300 and 10,500 -- see open interest addition
• 10,000 Put sheds 4 percent in open interest

Titan

• Goldman Sachs maintained a 'Buy' on the stock and raised price target to Rs 600 from Rs 552
• IDFC Securities upgraded their rating to 'Neutral' from 'Underperform' with price target of Rs 559
• JPMorgan retained an 'Overweight' on the stock and hiked price target to Rs 620 from Rs 540

Colgate

• IDFC Securities maintained and 'Underperform' rating with price target Rs 958
• Morgan Stanley retained its 'Underweight' rating with Rs 830 as the price target
• UBS reiterated its 'Buy' rating on the stock with price target Rs 1,250

• Biocon: Gets Form 483 with 10 observations from U.S. FDA for Bangalore plant
• Cognizant: Third quarter results trails analyst estimates
• Infosys: To acquire London-based Brilliant Basics for £7.5 million
• Tata Global: To sell Russian business to Skodnya Grand
• JBF Industries Board: To discuss the sale or restructuring of its overseas subsidiaries on August 10
• M&M: To sell 96.6 lakh shares in Mahindra Logistics via IPO
• Tata Chemicals: Cancels deal to acquire Unnati Inorganics operations for Rs 34 crore
• BPCL: Increases commission offered to dealers up to 50 percent

For a complete list of stocks to watch, click HERE

• U.S. FDA finds quality lapses at Biocon’s Bengaluru facility
• Decline in jobless claims shows U.S. labour demand remains robust
• M&M to sell up to 13.7 percent stake in logistics arm via IPO
• HCC expects to complete Lavasa debt restructuring this financial year
• Infosys to acquire London-Based design studio brilliant basics for £7.5 million
• Titan Q1 beats estimates driven by jewellery sales
• IOC’s net profit beats estimates with 22 percent profit growth
• Senior GST Council official held for bribery

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, remained flat at 10,034.

Asian markets traded with mixed reactions on reports of U.S. Special Counsel Robert Muller may have impaneled a grand jury in the ongoing Russia Probe. The yield on 10-year Treasuries held at 2.22 percent after declining five basis points on Thursday.

The U.S. jobs report for July may show the economy is on a steady trajectory and the labor market is staying tight, according to Bloomberg Intelligence. Consensus expects an increase of 180,000 in non-farm payrolls, after a gain of 222,000 in June, and a decline in unemployment to 4.3 percent from 4.4 percent. The data will also signal if income gains are enough to keep consumer spending ticking.

West Texas Intermediate crude was little changed at $49.05 in early after losing 1.1 percent in the previous session.

Gold was little changed at $1269.20 an ounce.