Nifty Gains Most In 5 Weeks To Close Just Below 9,900

Indian shares gained for a second day led by gains in FMCG, banking, metal and auto shares.

The S&P BSE Sensex gained 1 percent at 31,770.89 and the NSE Nifty 50 Index rose 1.05 percent to 9,897.30. Earlier in the day, the Sensex opened on a flat note and gradually strengthened to rise as much as 357 points while the Nifty moved above its crucial psychological level of 9,900.

Seventeen out of the 19 sector gauges compiled by the BSE Ltd. ended higher with S&P BSE FMCG index advancing the most. The index ended 2.49 percent higher, its biggest single-day gain in over a month.

Indian sovereign bonds drop, driving the benchmark 10-year yield to a six-week high, after gains in consumer prices exceeded economists’ forecasts.

India’s July CPI rose 2.36 percent compared to the same month last year, higher than the record low of 1.53 percent seen in June and above the 2.05 percent estimated by a Bloomberg poll of economists.

Yield on 6.79 percent bonds due May 2017 rose as much as 0.3 percent from Monday to 6.54 percent, set for its highest close since July 5.

Shares of the biopharmaceutical firm fell as much as 8.3 percent, making it the worst performer in the S&P BSE Healthcare, after it confirmed that it has withdrawn application for two key biosimilars from the European markets.

The request for withdrawal of dossiers and re-submission part of the EMA procedural requirement liked to re-inspection, the company said in an exchange filing.

Shares of the Mumbai-based shipping company jumped as much as 20 percent to Rs 365.75, most since May 26, after it reported nearly four-fold increase in net profit for April-June quarter.

Key Q1 Highlights

• Q1 net profit Rs 19.16 crore versus Rs 4.86 crore YoY
• Income from operations at Rs 117.85 crore versus Rs 85.11 crore YoY
• Other income at Rs 1.43 crore versus Rs 79 lakhs YoY
• Total expenses at Rs 98.37 crore versus Rs 80.83 crore YoY

• JSW Energy has 15.2 lakh shares change hands a block deal
• Axis Bank has 15.3 lakh shares change hands in a block deal

Buyers and sellers were not immediately known

Source: Bloomberg

The rupee fell 17 paise to 64.29 against the U.S. dollar in early trade today due to increased demand for the American currency from importers amid foreign fund outflows.

Forex dealers said dollar strengthening against other currencies overseas on strong US sales data weighed on the rupee sentiment. However, a higher opening in the domestic stock market limited the rupee losses, they added.

Foreign institutional investors (FIIs) sold shares worth Rs 1,638.83 crore on Monday, as per the provisional data.

On Monday, the rupee had closed almost flat at 64.12 a dollar on emergence of fag-end demand for the American currency. Market remained closed yesterday on account of Independence Day.

PTI

Shares of the tyre maker fell as much as 7.7 percent, the most intraday since November 21, after reporting a surprise first quarter loss.

The company posted a net loss of Rs 110 crore for the April-June period on a consolidated basis, against an estimate of Rs 40.30 crore profit.

The stock was amongst the worst performer on the S&P BSE 500 Index.

Indian shares pared their opening advance, as gains in technology and power producers were countered by losses in banks and capital goods companies.

The S&P BSE Sensex climbed as much as 0.50 percent to 31,602, while the NSE Nifty 50 Index rose 0.37 percent to 9,830 – before giving up most of their gains to trade little changed.

The S&P BSE MidCap and S&P BSE SmallCap indices too were unchanged. Eleven of the 19 sector gauges compiled by the BSE Ltd. declined, led by S&P BSE Capital Goods Index’s 1.20 percent slump.

There's good news and bad news for the bulls.

The good news first. India's July trade deficit at $11.45 billion was narrower than expected. However, the all important consumer price inflation surged to 2.4 percent, faster than the 2.1 percent estimate.

The surge has put focus on the minutes of the RBI meeting due later today. The rebound raises questions about this month’s interest-rate reduction and scope for further stimulus.

In his Independence day address, PM Narendra Modi said the number of new taxpayers in India more than doubled in the past five months and about Rs 3 lakh crore came back to the banks after the government’s cash ban brought more people into the fold of the formal economy.

The Indian rupee may open weaker tracking its Asia-Pacific peers. The region's currencies were mostly down against the dollar with the Phillipine peso falling the most.

• Nifty futures premium shifts to 21.6 points from 30 points earlier
• Nifty futures shed 4.8 lakh shares in open interest; Bank Nifty Futures shed 41,000 shares in open interest
• Max Call open interest at 10,000 followed by 10,100
• Max Put open interest at 9,500 followed by 9,800
• Call strikes 9,800 and 9,900 see open interest shedding, whereas 10,000 sees addition
• Put strikes 9,500, 9,700, 9,800 and 9,900 see open interest addition

Coal India

• JPMorgan: Neutral with a target of Rs 290. Coal dispatches up 3 percent & implied flat realisations.
• Goldman Sachs: Cut target to Rs 222 from Rs 225. Margins to remain under pressure on the back of weak prices. Wage inflation to continue and contractual expenses to rise.
• Citi: Buy with a target of Rs 275. Factor muted volumes - 5 percent CAGR over FY17-20, subdued prices (no growth) and lower margins
• Morgan Stanley: Underweight with a target of Rs 221. Volume growth to be sustained in H2FY18. Expect some improvement in e-auction realizations.
• Edelweiss: Target cut to Rs 285 from Rs 295. Expect FSA realisation to get streamlined as Coal India ramps up production. Expect dividend of Rs 20 per share in FY18-19. EBITDA margin is likely to be protected by higher e-auction proportion and FSA realisation.

Grasim Industries

• JPMorgan: Overweight with a target of Rs 1,350. Good start to FY18. Listing of financial company key catalyst. JPA assets to drive strong growth over 2-3 years.
• Morgan Stanley: Overweight with a target of Rs 1,306. Earnings momentum to remain firm. Expect stable margins for the VSF business.
• Deutsche Bank: Buy with a target of Rs 1,280. VSF margin should improve in Q2FY18 as pulp plant has restarted.
• Edelweiss: Target hike to Rs 1,297 from Rs 1,233. Says VSF outlook appears positive given price rebound and restart of domestic pulp facility. Promising outlook for all core businesses.

Tata Power

• Citi: Sell with a target of Rs 79.9. The stock appears expensive given its sub-par return ratios and growth outlook. Leverage remains high. Prefer Power Grid and CESC.
• Deutsche Bank: Buy with a target of Rs 97. Value unlocking in non-core or renewables, deleveraging on receipt of Arutmin sale proceeds will be the key triggers.

AIA Engineering

• IDFC: Target cut to Rs 1,475 from Rs 1,525. Expect the trend of market share gains to continue. Margins are normalising and near term earnings are weak.

• Pratibha Industries: To file application with NCLT for extension of time in repayment of fixed deposit
• Phoenix Mills: Canada Pension Plan Investment Board and company acquire land parcel in Pune for Rs 161 crore
• Aries Agro: Announces the launch of five new speciality plant nutrient products
• Natco Pharma: Receives U.S. FDA approval for generic Fosrenol chewable tablets
• Shreyas Shipping & Logistics: Board approves the sale of vessel M.V. SSL. Sagarmala before December 31, 2017
• Adani Transmission: Acquired 100 percent stake in SPV Hadoti Power Transmission Services Ltd.
• Tasty Bites Eatable: Mars Food to acquire majority stake in the company
• Visa Steel: Board approves to increase foreign holdings in the company to 74 percent from 24 percent
• Lumax Auto: Signs joint venture pact with Ituran Location for sale of telematics products
• Motilal Oswal Financial Services: Acquired additional 0.69 percent stake in Aspire Home Finance Corporation
• HDFC: IRDAI grants final approval for the merger of HDFC Ergo with HDFC General from August 16
• Future Consumer: To enter into a joint venture with EK Sons and Bin Ablan Foods
• SMS Pharma: Shares of SMS Lifesciences India to be listed on BSE & NSE from August 17, 2017
• Supreme Infrastructure: Board approves issue of equity shares to non-promoter group for an amount not exceeding Rs 75 crore
• Tata Motors: HUL CFO PB Balaji to join company as CFO
• Tata Global Beverages: Signs pact to sell bottled water in the U.S.
• Sayaji Hotels: Barbeque Nation Hospitality files draft IPO papers with SEBI
• Future Market Networks: To set up a 1 million square feet warehouse facility at Nagpur

• Wilful defaulters owe over Rs 92,000 crore to PSU banks
• Investments key to ensure growth in India: former RBI Governor Subbarao.
• Modi says more Indians paying tax after cash ban, GST regime
• India’s trade deficit widens as gold imports continue to offset export growth
• Inactive LLPs face heat; nearly 200 face deregistration
• SEBI steps up surveillance on money laundering activities
• Trump pivots back to blame `both sides' for Virginia melee
• Government slaps $264 million penalty on Reliance Industries, BP
• Race to the bottom: IDBI’s bad loans surge to industry high
• Guptas are said to tell Bank of Baroda they've found alternative

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.2 percent to 9,816.50.

Asian stocks were mixed in early trade after an uninspiring U.S. session that saw the dollar grind higher, with attention turning away from geopolitics and back to economic data. Gauges of volatility in Japan, Hong Kong and the U.S. continued a retreat as calm returned to stock markets.

The revival in U.S. retail sales bolsters prospects that growth will accelerate in the second half, the latest clue on the strength of the world’s largest economy ahead of minutes from the Federal Reserve’s most recent meeting, due to be published on Wednesday.

Crude oil halted its slide near $48 a barrel as industry data showed U.S. stockpiles extended declines during a period of seasonally strong demand, trimming an inventory overhang.

Gold added 0.1 percent to $1,272.57 an ounce in early Wednesday trading after declining 0.8 percent the previous session.