Sensex, Nifty Climb For Second Day As Traders Await Fed Decision

Indian equity benchmarks rose for second day in a row led by HDFC twins, Larsen & Toubro and Bharti Airtel ahead of U.S. Federal Reserve's policy decision due later in the night.

The Federal Reserve is expected to increase borrowing cost. However, the analysts will watch out for how many rate hikes are signaled by the new Fed Chairman Jerome Powell.

The S&P BSE Sensex rose 0.4 percent or 139 points to 33,136 and the NSE Nifty 50 index gained 0.3 percent or 31 points to 10,155.

Fifteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom index's 2.4 percent gain. On the flipside, the S&P BSE Metal index was the top sectoral loser, down 0.5 percent.

Mid- and small-cap shares were broadly in line with their large cap counterparts as the S&P BSE MidCap index rose 0.2 percent and the SmallCap index gained 0.3 percent.

• Idea Cellular has 50 lakh shares (0.1 percent equity) change hands in a block. Stock up 2.6 percent at Rs 79.20.
• Welspun India has 10 lakh shares change hands in a bloc. Stock up 2.48 percent at Rs 60.
• Prism Cements has 16 lakh shares change hands in a block. Stock up 1.7 percent at Rs 116.40.

Source: Bloomberg

• Equity markets could see a relief rally if Fed indicates three hikes.
• If Fed signals at four hikes and a hawkish tone for next year, there can be a selloff in equity markets.
• U.S. employment data remains strong.
• Latest news on wages better than last month.
• Fed will follow data and try to ensure that inflation does not pick up.
• Markets will be very sensitive to rate hikes this year.
• Markets will be focused on CPI data in the coming months.
• This year will be trickier for financial markets compared with last year.
• U.S. Fed is clearly on tightening path.
• Equity markets will have a choppy ride.
• New highs likely for equities but not without volatility.
• From a structural perspective, with the relative rise of china and india, am not sure that Fed dominates emerging markets anymore.
• What happens in the U.S. is not as important for emerging markets as it was 10 years ago.

Sandhar Technologies Rs 512 crore initial public offer was fully subscribed as of 2:00 p.m.

• Portion reserved for qualified institutional buyers (QIB) subscribed 2.7 times
• Portion reserved for non-institutional bidders subscribed 0.26 times
• Portion reserved for retail customers subscribed 0.53 times.

Source: Company's PR

• Reliance Communications: The Anil Ambani-led company rose as much as 14.9 percent, the most since Jan 30, to Rs 26.55 after bond holders approved its asset monetisation plan.
• NGL Fine-Chem: The Mumbai-based specialty pharma company rose as much as 5 percent, the most since March 5, to Rs 425 after ICICI Direct initiated coverage on the stock with a ‘buy’ for target price of Rs 465-505.
• Ashoka Buildcon: The Mumbai-based road developer rose as much as 14 percent to Rs 265 after it emerged as the lowest bidder for two highway projects valued at Rs 447.51 crore.
• TRF: The Jamshedpu-based industrial machinery maker rose as much as 5 percent to Rs 210.80 after it informed exchanges that it plans to sell its stake in York Transport to SAF-Holland for $40 million.

• EIH: The Kolkata-based operator of Oberoi group of hotels fell as much as 2.12 percent to Rs 163.65. Trading volume was 21.2 times its 20-day average.
• TV Today Network: The Noida-based TV news channel operator rose as much as 18 percent to Rs 555. Trading volume was 12.4 times its 20-day average.
• Lakshmi Vilas Bank: The Karur-based private sector lender rose as much as 4.8 percent to Rs 104.65. Trading volume was 8.2 times its 20-day average.
• National Fertilizers: The Noida-based fertilizer maker rose as much as 5.5 percent to Rs 59. Trading volume was 5.6 times its 20-day average.

Shares of the Mumbai-based IT services company rose as much as 4.7 percent to Rs 4.87 after it prepaid Rs 39 crore of outstanding debt, the company said in an exchange filing.

The amount represents six monthly installments of the principal outstanding debt which were due for repayment from January 31, 2019 to June 30, 2019 as per the terms of the Debt Realignment Scheme (DRS) approved by its lenders, the exchange filing added.

Shares of the Anil Ambani-led company rose as much as 2.38 percent to Rs 23.65 after its $300 million bondholders approved its asset monetisation plan, the company said in a press release.

Bondholders at a meeting in London approved sale of certain assets to Reliance Jio Infocomm, sale of real estate assets, release of security on the assets and accepted part repayment of outstanding bonds.

Shares of the cargo transport and logistics service provider rose as much as 5 percent to Rs 272 after it acquired a ship with dead weight tonnage of 26,262 which will be deployed on the western cost of the country for Rs 48.8 crore in order to expand business, the company said in an exchange filing.

Shares of the Chandigarh-based wheel rim maker rose as much as 2.4 percent to Rs 1,084 after it won an export order for supply of 7,000 steel wheels to UK aftermarket, SSWL said in an exchange filing.

The wheels will be manufactured and dispatched from its facility in Chennai and Dappar in Punjab.

Shares of the Jamshedpur-based industrial machinery maker rose as much as 5 percent, the most since March 9, to Rs 210.80 after it informed exchanges that it plans to sell its stake in York transport to SAF-Holland for $40 million.

Shares of the Ahmedabad-based infrastructure construction company rose as much as 2.2 percent to Rs 128.40 after it won hybrid annuity project from NHAI for 4-laning of section between Anjar- Bhuj up to Airport Junction, the company said in a press release.

• Indian equity benchmarks extended gains led by HDFC, Reliance Industries, HDFC Bank and Infosys.
• The S&P BSE Sensex rose 1.08 percent or 357 points to 33,352 and the NSE Nifty 50 index climbed 1.01 percent or 102 points to 10,226.
• All sector gauges compiled by BSE were trading higher led by the S&P BSE realty index's 2.2 percent gain.
• The gains were broad-based as the S&P BSE MidCap and the S&P BSE SmallCap indices rose over a percent each.

Top five Nifty gainers

• Bharti Airtel up 3.5 percent
• Indiabulls Housing Finance up 3.2 percent
• UltraTech Cement up 2.8 percent
• NTPC up 2.2 percent
• Bajaj Finance up 2.0 percent

Top five Nifty losers

• Eicher Motors down 1.03 percent
• Tech Mahindra down 0.8 percent
• Hero MotoCorp down 0.8 percent
• Bharti Infratel down 0.5 percent
• Adani Ports down 0.3 percent

Shares of the Mumbai-based money lender rose as much as 1.6 percent to Rs 50.05 after multiple bulk deals i trade yesterday.

• Copthall Mauritius Investment sold 96.74 lakh shares or 0.6 percent equity at Rs 50 each.
• Baobab Global Fund bought 96.74 lakh shares or 0.6 percent equity at Rs 50 each.

Shares of the sugar manufacturers were trading higher after the government scrapped export duty on raw and refined sugar to boost shipments as the country is all set to produce a record 29.5 million tonnes of the sweetener in the current 2017-18 marketing season.

It has been decided to reduce export duty on raw sugar, white or refined sugar from 20 percent to nil, the Central Board of Excise and Customs said in a notification. Earlier, the government had doubled import duty on sugar to 100 percent to check shipments.

• Balrampur Chini up 1.8 percent
• Triveni Engineering & Industries up 0.95 percent
• Bajaj Hindusthan Sugars up 0.99 percent
• Dhampur Sugar Mills up 1.7 percent
• Dalmia Bharat Sugar & Industries up 2.4 percent
• Dwarikesh Sugar industries up 1.4 percent
• Avadh Sugar & Energy up 2.2 percent
• Uttam Sugar Mills up 2.1 percent
• KCP Sugar & Industries up 3.1 percent
• Mawana Sugars up 2.6 percent
• Ugar Sugar Works up 1.8 percent
• Magadh Sugar & Energy 2.2 percent

Shares of the state-run lenders were witnessing good buying index. Gauge of the government-owned banks — Nifty PSU Bank index rose 2 percent led by gains IDBI Bank, Allahabad Bank and Bank of India.

Shares of the Ludhiana-based textile maker were locked in a 5 percent upper circuit at Rs 7.15 after LTS Investment Fund sold 3.86 lakh shares or 0.9 percent equity at Rs 7.1 each in a bulk deal yesterday.

Shares of the Mumbai-based road developer rose as much as 14 percent, the most in over two years, to Rs 265 after it emerged as the lowest bidder for two highway projects valued at Rs 447.51 crore.

The company bagged orders for up-gradation of Jalgaon-Bhadgaon section and upgradation of Bhadgaon-Chalisgaon section of NH 753J. Both the orders will be executed on the EPC mode, Ashoka Buildcon said in an exchange filing.

Shares of the Kolkata-based plywood and wooden board maker rose as much as 3.31 percent, the most since March 14, to Rs 340 after its board informed exchanges that it is exploring an option to demerge MDF division into Greenpanel Industries Limited, a wholly owned subsidiary of Greenply Industries.

The board also approved expansion of Veneer line in the existing manufacturing unit of Greenply Gabon SA, Gabon, step-down wholly owned subsidiary of the Company, situated at NKOK SEZ, Gabon, West Africa.

• Bullish on commercial vehicle space currently.
• Like Tata Motors and Ashok Leyland in commercial vehicle space.

Shares of the Vadodara-based drug maker rose as much as 4.2 percent, the most in over a month, to Rs 557.85 after the U.S. drug regulator issued Form 483 for its Panelav facility.

The U.S. FDA inspection was conducted between March 12-20 and at the end of the inspection the regulator issued Form 483 with three observations. None of the observations are related to data integrity or repetitive in nature, Alembic Pharmaceuticals said in an exchange filing.

Meanwhile, the company is preparing the response to the observations, which will be submitted to the U.S. FDA shortly.

Shares of the Mumbai-based drug maker rose as much as 2.1 percent t0 Rs 2,150 as U.S. drug regulator conducts a surprise audit at its largest facility in Daman, two people aware of the development told BloombergQuint requesting anonymity.

The U. S. Food and Drug Administration officials began inspecting the site yesterday, which is expected to go on for another four to five days, the two people quoted aboved said. The officials are mainly auditing the quality control practices and production line of the Mumbai-based drug maker.

Indian equity benchmarks moved sharply higher led by gains in banking, metal and energy shares.

The S&P BSE Sensex rose 0.7 percent or 222 points to 33,223 and the NSE Nifty 50 Index climbed 0.68 percent or 68 points to 10,191.

All sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty PSU Bank index's 1.4 percent gain.

Meanwhile, buying was visible across the board as the S&P BSE MidCap and the S&P BSE SmallCap indices rose around 0.9 percent each.

Bond yields are likely to start higher on the back of a jump in crude oil prices and a rise in U.S. Treasury yields. During the course of the day, traders will watch out for the outcome of a meeting between India’s finance ministry officials and primary dealers in New Delhi ahead of the issuance of the fiscal first half borrowing calendar.

The ministry wants to seek the views of market participants about how it can conduct a near record $93 billion borrowing program smoothly. The 10-year bond yield rose 1 basis point on Tuesday to end at 7.62 percent.

Meanwhile, the rupee is set to start weaker on the back of a rising dollar. The main event is the Fed's decision and Chairman Jerome Powell's news conference.

The Fed is widely expected to raise rates, but markets will be keen to know whether there are three or four more rate hikes in store during this year. Forwards indicate the rupee will open at 65.22 per dollar, having ended at 65.1920 on Tuesday.

Credit Suisse on Emami

• Maintained ‘Outperform’ with price target of Rs 1,260.
• Distribution challenges being overcome.
• Wholesale channel stabilised; E-way bill to be closely watched.
• Margins not a major concern for now.
• Focus on double-digit volume growth through a combination of existing and new products.

Credit Suisse on HDFC

• Maintained ‘Outperform’ with price target of Rs 2,250.
• Strong growth in individual segment.
• Competition picking up in corporate segment.
• RERA would lead to some consolidation of the smaller players.
• Open to inorganic opportunities in housing segment.
• Looking at opportunities in health insurance space within HDFC ERGO.

Macquarie on Indian Steel

• Demand in China is just delayed, and not curtailed.
• Domestic prices and demand remains robust.
• Raw material weakness to partially offset steel price weakness.
• Domestic fundamentals remain robust.
• Steel producers to deliver $20-30/t QoQ margin expansion in current quarter.
• Positive on both Tata Steel and JSW Steel post recent correction.
• Tata Steel offers better risk-reward.

JPMorgan on Kotak Mahindra Bank

• Maintained ‘Overweight’; raised price target to Rs 1,200 from Rs 1,100.
• Bank in a strong position to leverage reduced competitive intensity in core banking.
• Elevated valuations supported by strong growth momentum and resilient asset quality.
• Bank's subsidiaries in a sweet spot.
• Kotak Mahindra Bank one of top picks.

ICICI Securities on Dr. Reddy’s

• Upgraded to ‘Add’ from ‘Hold’; cut price target to Rs 2,378 from Rs 2,487.
• Several triggers to revive growth and margins over the next two fiscals.
• US revenue run rate likely to bottom out in current fiscal.
• Price erosion likely to remain in double digit in the next fiscal.
• Several drivers in place to offset base business price erosion and drive U.S. sales.
• Current valuations factor in all negatives.
• Successful outcome of triggers may lead to valuation re-rating.

HDFC Securities on CDSL

• Initiated ‘Buy’ with price target of Rs 425; implying a potential upside of 50 percent from the last regular trade.
• Gem of a business that investor constructive on India in the long term must own.
• Depository business is a proxy for capital market growth.
• Limited scope for any other depository to be set up.
• Diversified revenue stream with high component of annuity revenue.
• Operates at healthy operating margin with embedded non-linearity.
• CDSL gaining market share
• Robust balance sheet and cash generation.
• Pays healthy dividend; Payout could be higher.
• Expect revenue, operating income and ent profit to compound at 22 percent, 28 percent and 20 percent respectively over the fiscal 2017-2020.
• Operating margin to expand to 64 percent by March 2020, compared to 54.4 percent, clocked in the previous fiscal, led by fixed cost business model.

ICICI Direct on NGL Fine-Chem

• Initiated ‘Buy’ with price target of Rs 465 – Rs 505.
• After stagnation, capacity expansion to support future growth.
• Likely adoption of dual source strategy to benefit Indian players.
• Expect revenue, operating income and net profit to compound at 15 percent, 14 percent and 19 percent respectively over the fiscal 2017-2020.
• Stock offers a compelling value proposition based on micro and macro parameters.

• Hindustan Aeronautics IPO subscribed 0.99 times on final day.
• Karda Construction IPO subscribed 1.42 times on final day.
• Sandhar Technologies IPO continues on day 3. The issue is subscribed 0.4 times.

• Jindal Steel opens QIP at a floor price of Rs 227.15 apiece.
• Amtek says Liberty’s resolution plan not yet approved by lenders.
• TCS partners with Saudi Real Estate Refinance company.
• Greenply Industries mulls demerger of MDF business. The board also approved expansion of Veneer Line at Gabon factory.
• Fortis to seek shareholders’ approval for RHT acquisition.
• Newgen Software released Mobile Medicare Enrolment solution for U.S. health plans.
• Ashoka Buildcon declared lowest bidder for two projects worth Rs 447.51 crore.
• Transport Corporation of India acquired one ship with capacity of 26,262 DWT for Rs 48.80 crore.
• Dalmia Bharat unit provides performance bank guarantee of 10 percent for upfront payment to lenders in Binani Cement.
• Mercator to sell vessel for $4.25 million to Best Oasis Ltd; will use proceeds to repay debt.
• Manappuram Finance approved business plan for FY19.
• Transport Corp acquired a new ship to increase capacity in west coast.

• Nifty March futures closed trading at 10,143.2, premium of 18.9 points from 28.8 points.
• March series: Nifty open interest unchanged, Bank Nifty open interest down 5 percent.
• India VIX ended at 15.6, down 1.3 percent.
• Max open interest for March series at 10,500 call strike (open interest at 63.8 lakh, down 3 percent).
• Max open interest for March series at 10,000 Put (open interest at 66 lakh, up 5 percent).

Jindal Cotex:

• LTS Investment Fund sold 3.86 lakh shares or 0.9 percent equity at Rs 7.1 each.

Intrasoft Technologies

• Vora Financial services bought 86,329 shares or 0.6 percent equity at Rs 703 each.

IDFC Bank

• Copthall Mauritius Investment sold 96.74 lakh shares or 0.6 percent equity at Rs 50 each.
• Baobab Global Fund bought 96.74 lakh shares or 0.6 percent equity at Rs 50 each.

Sarveshwar Foods

• India Max Investment Fund sold 4.09 lakh shares at Rs 70.5 each.
• Krishen Bal bought 4.06 lakh shares at Rs 70.5 each.

Corporate Action

• India Nippon Electricals stock split from Rs 10 to Rs 5 per share.
• La Opala RG last trading day before going ex bonus.
• DCM Financial Services last trading day before shifting to T group.

• Flipkart’s losses have wiped out half of $6.1 billion injected by investors
• U.S. FDA conducts surprise audit at Alkem Lab’s daman plant
• Fed seen sticking with three 2018 rate hikes, may hint at fourth
• Reforms unlikely till 2019 general elections, says Raghuram Rajan
• UltraTech cement likely to get support from Binani creditors
• Asian central banks unlikely to follow Fed rate hike
• Debt-laden Videocon sells stake in general insurance business
• UltraTech will fight off a web of litigation to buy Binani Cement: Exclusive
• India’s clipping the wings of billionaire defaulters
• Nifty worst performer since global sell-off in January. Here’s why
• Will opposition get CLEAN-BOWLEDDD by Modi’s GOOGLY?
• Facebook sued by investors over voter-profile harvesting

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 10,168 as of 8:35 a.m.

Energy companies underpinned stock gains in Asia after a rally in crude oil, in an Asian session subdued by a Japanese holiday before the Federal Reserve’s policy decision.

Stocks in Hong Kong outperformed ahead of earnings from Tencent Holdings Ltd. An energy sub-index had the biggest gain in the MSCI Asia Pacific index, as well as in Australia.

Here are some key events on the schedule this week:

• The Fed decision and Jerome Powell’s news conference come on Wednesday.
• The Bank of England is expected to keep interest rates and its asset-purchase program unchanged on Thursday. Attention will be on language and the odds for a May hike.
• New Zealand has a monetary policy decision Thursday.
• Company earnings scheduled for this week include Tencent, Hermes, PetroChina and Nike.

Bonds

• The yield on 10-year Treasuries rose four basis points to 2.90 percent Tuesday. Treasuries will resume trading in London because of the Japan holiday.
• Australia’s 10-year yield rose less than one basis point to 2.71 percent.

Commodities

• West Texas Intermediate crude built on a 2.2 percent advance to gain 0.3 percent to $63.71 a barrel.
• Gold rose 0.2 percent to $1,313.20 an ounce.