A pedestrian walks besides Bombay Stock Exchange building at Dalal Street, Mumbai. (Photographer: Anirudh Saligrama/BloombergQuint)

Sensex, Nifty Register Best Weekly Gains In Over Two Months

Closing Bell

Indian equity benchmarks extended gains for the second week and clocked its best weekly performance since Jan. 21.

The S&P BSE Sensex index closed 0.1 percent higher today at 33,626.97, while the NSE nifty 50 Index closed at 10,331.60, up 0.1 percent.

The market breadth was tilted in favour of buyers. Nine out of 11 sectoral gauges compiled by NSE advanced, led by NSE Nifty Pharma Index’s 1.4 percent gain. On the flipside, NSE Nifty IT Index Index was the top sectoral loser, down 0.6 percent.

BQ Live

Block Deal Alert

  • AIA Engineering: About 30 laskh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Stocks Moving On Heavy Volumes

SKF India

  • Stock fell as much as 2.1 percent to Rs 1,786.75.
  • Trading volume was 11.4 times its 20-day average.

Shriram City union Finance

  • Stock fell as much as 1.5 percent to Rs 2,299.80.
  • Trading volume was 7.6 times its 20-day average.

Mphasis

  • Stock rose as much as 14.4 percent to Rs 944.80.
  • Trading volume was 7.4 times its 20-day average.

Countdown: NALCO's CMD On Its Business Prospects And More

European Stocks Retreat After Biggest Advance Since June 2016

European equities decline for a third session in four days amid a renewed focus on trade tensions between the U.S. and China after notching their biggest gain in 21 months Thursday.

Power Lunch: Top Private Bankers Are Tet To Get Bonuses, Hurdles For Air India Sale & More

IFB Agro Surges 17% As Liquor Companies Rally

Block Deal Alert

  • Bharti Infratel: About 14.4 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

India's Shrimp Export To U.S. Rise 21%

  • India’s shrimp export to U.S. rose 21 percent on a yearly basis.
  • India exported 1,33,60,905 kgs of shrimp to U.S. at $130.9 million.
  • Realisations improve marginally to $9.8 per kg from $9.78 per kg last year.
  • India’s market share in U.S. in terms of Volume and Value drops to 28 percent and 29.2 percent in February.

Source: NOAA; U.S. Department Of Commerce

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Hot Money: VIP Industries, DLF Still In Favour Post Sharp Run-Up? Find Out

Block Deal Alert

  • BEL: About 10 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

JC Sharma, Managing Director At Sobha Speaks To BloombergQuint

Key highlights from the conversation:

  • Cochin and Chennai market contributed to traction.
  • See rise in sales from Bangalore in near term.
  • To launch new projects in various cities including Chennai.
  • Will be launching products in all categories.
  • Debt to equity ratio remains lowest at 0.8
  • Not a correct time to hike prices, will remain cautious.
  • Expect double digit growth in coming quarters.

Trend Spotting: Street Expectations From Tech Players

GM Breweries Surges On Bonus Announcement

Shares of the alcohol manufacturer rose as much as 6.6 percent to Rs 1,200, its highest level in three months.

The board of GM Breweries Ltd. has recommended a dividend at the rate of 30 percent or Rs 3 per share, the company said in an exchange filing. The board has also recommended a bonus issue of shares in the ratio of 1:4.

The stock has risen for four trading sessions this week and has given positive returns of 20.1 percent so far this year as compared to Sensex’s negative returns of 1.5 percent in the same times period.

Investors Find IndiGo Better Bet Than Peers Despite Engine Woes

InterGlobe Aviation Ltd., parent of India’s largest airline IndiGo, remains investors’ preferred stock among peers despite engine troubles grounded its flights in March.

The stock has outperformed Jet Airways Ltd. and Spicejet Ltd. so far this year despite cancelled flights, a weaker rupee and higher fuel prices. (More details here)

Sona Koyo Declines After Investor Announces Plan To Sell Stake

Shares of the auto parts maker fell as much as 8.9 percent, most in almost eight months, to Rs 89.4 which was the lowest level achieved in a little over nine months.

An investor in Sona Koyo Steering Systems Ltd., JTEKT Corporation Ltd., has proposed to sell up to 35 lakh shares to retail and non-retail investors on both the exchanges, according to the company’s exchange filing.

The company is the second smallest amongst its Bloomberg peers with a market cap of around Rs 1,821 crores. Trading volume was 27.3 times the 20-day average. The stock has given negative returns of 15.7 percent so far this year.

Lupin Jumps After Receiving Clean Chit From FDA

Shares of the drug maker extended gains for the second day and rose as much as 7.1 percent, the most in over five months to Rs 842.80.

The pharmaceutical company received a clean chit from U.S. drug regulator or its Pithampur Unit 1 Facility, according to its stock exchange notification.

The stock declined 9.1 percent so far this year compared to 1.2 percent decline in Sensex.

F&O Check

The F&O Show: Decoding A Short Strangle On Nifty For April Expiry And Other Strategies

Atul Lall, Managing Director At Dixon Technologies Speaks To BloombergQuint

Key highlights from the conversation:

  • With Custom duty coming down on open cell, it will increase brand outsourcing to players like Dixon.
  • This will positively impact our margins.
  • Commercial production of mobile circuit board will start in July 2018.
  • Mobile segment will show nominal growth.
  • But there will be margin expansion in mobile segment due to backward integration.
  • Expect margins to improve by 50-60 basis points
  • Revenue growth for mobile segment in December quarter was flat. Current quarter will see a nominal uptick and major growth will come from the next quarter.
  • Confident to deliver above 25 percent revenue growth for the next 3-5 years.
  • Reliance Retail is an important customer to us.
  • In discussion to supply products other than TVs to Reliance Retail.

InterGlobe Declines After Dropping Out of Race To Acquire Air India

Shares of the budget carrier snapped its longest winning streak in over a month and fell as much as 2.4 percent, the most since March 19, to Rs 1,413.75.

The airline operator dropped out of the race to acquire the debt-laden Air India, according to its stock exchange notification.

InterGlobe trades at 30.8 times trailing 12-month earnings per share and 21 times its estimates for the coming year.

Sobha Shares Surge After Reporting New Sales Volume For March Quarter

Shares of the real estate developer rose as much as 10.8 percent, the most in over two months to Rs 564, after the company said that its new sales volume in the fourth quarter rose 40.4 percent at 10.15 lakh square feet, according to its stock exchange notification.

New sales value increased 30 percent, and price realisations declined 7.5 percent, the statement added.

Trading volume was 85.6 times its 20-day average. The stock declined 10 percent so far this year.

Magma Fincorp Declines After Block Deals

Shares of the non-banking financial services provider fell as much as 7.5 percent, the most in two months to Rs 154, after 10 percent equity or about 2.4 crore shares changed hands in block deals, according to Bloomberg data.

Buyers and sellers were not known immediately.

Trading volume was 2,647.3 times its 20-day average. The stock has declined 2.5 percent so far this year, compared to the gain of 29 percent in the past 12 months.

Opening Bell

Indian equity benchmarks swung between gains and losses during the opening trade today.

The S&P BSE Sensex Index opened flat at 33,608.59. It fell as much as 0.1 percent to 33,554.46 thereafter.The NSE Nifty 50 Index also opened flat at 10,332, before sliding as much as 0.2 percent to 10,305.

The market breadth was tilted in favour of buyers. Six out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Metal Index's decline. On the flipside, NSE Nifty realty Index was the top sectoral gainer, up 1.1 percent.

BQ Heads Up!

F&O Cues

  • Nifty April futures closed trading at 10,352 with a premium of 27 points versus 18 points.
  • April series: Nifty open interest down 3 percent, Bank Nifty open interest down 12 percent.
  • India VIX ended at 14.7, down 9.4 percent.
  • Max open interest for April series at 11,000 call strike (open interest at 37.7 lakh, down 2.4 percent).
  • Max open interest for April series at 10,000 Put (open interest at 48.5 lakh, up 10 percent).

F&O Ban

  • No stocks in ban list.

Put-Call Ratio

  • Nifty PCR at 1.42 versus 1.33.
  • Nifty Bank PCR at 1.96 versus 0.99.

Brokerage Radar

Credit Suisse on HCL Technologies

  • Maintained ‘Outperform’ with a price target of Rs 1,100.
  • C3i Solutions acquisition reasonable, but not very significant.
  • Acquired C3i at five times its operating income.
  • Revenue of $200 million, but 6 percent operating margin.

Morgan Stanley on HCL Technologies

  • Maintained ‘Overweight’ with a price target of Rs 1,060.
  • Acquisition of C3i Solutions to complement BPO services.
  • Acquisition to boost revenue growth in in the next financial year.
  • Do not expect to have any material impact on earnings or stock price.
  • Assuming yield on cash of 7 percent, the acquisition is marginally EPS accretive.

Motilal Oswal on Indigo-Air India Bid

  • IndiGo not to bid for Air India.
  • Wisest thing to do.
  • Believe this is a positive move for Interglobe Aviation.
  • Removes the overhang of successful acquisition and post-acquisition integration of Air India.

SBICAP Securities on IndiGo-Air India Bid

  • Expanding international operations on its own would have limitations.
  • International operations of Air India are a strategic fit for IndiGo.
  • Air India acquisition would have added value in long term.
  • Stock could give up gains as IndiGo could have bought Air India at lucrative bid price.
  • Air India would have been a great value buy for IndiGo.

Morgan Stanley on RBI Policy

  • Would focus on inflation forecast for the second half of the current financial year.
  • Continue to expect that RBI will move to hike rates by December.
  • Don’t expect significant overshoot of inflation relative to RBI’s target.
  • Expect economic recovery to be on a surer footing by December.
  • Inflation is expected to rise in June quarter, largely driven by base effects in food prices.
  • Expect MPC will have time to pause and assess more incoming data before acting in December.

Macquarie on RBI Policy

  • Expect rates to be on hold in 2018.
  • Expect bond yields to be range bound; Limited room for further decline.
  • Expect activity momentum to sustain in coming months.
  • Expect current fiscal’s GDP growth to normalise to approx. 7.2 percent.
  • Risks to growth outlook would stem from: external demand environment, spike in global commodity prices, capital market risk aversion and changes in government policy.

Geojit on Avenue Supermarts

  • Initiated ‘Buy’ with a price target of Rs 1,590.
  • The most profitable value retailer.
  • Mall additions and everyday discount strategy to help deliver strong growth.
  • Operating margin higher to peers due to better asset-turnover and lean cost structure.
  • Revamp in strategy by including lease stores along with own to accelerate pace of growth.
  • Expect revenue and net profit to compound at 34 percent and 43 percent respectively over the financial years till March 2020.
  • Expect high premium to be maintained in the medium-term.

Credit Suisse on Jindal Steel & Power

  • Maintained ‘Outperform’ with a price target of Rs 320.
  • New management focused on improving capital discipline.
  • Steel is still in shortage; Cycle still on an upturn.
  • Some short-term relief on power side with higher spot rates.

CLSA on Shree Cement

  • Upgraded to ‘Buy’ from ‘Outperform’; cut price target to Rs 20,100 from Rs 22,000.
  • Volume growth set to accelerate to 15 percent annually over the next two years.
  • Sharp rise in energy costs is a concern; Cement price hikes should help.
  • Expect operating income to compound at 25 percent over the fiscal 2018-2020.
  • Stock already penalised for the UAE acquisition.
  • Further investments in international remain an investor concern.

Trading Tweaks

  • Circuit filter revised to 10 percent from 5 percent: Shilpi Cable Technologies, Videocon Industries, McNally Bharat Engineering Company Ltd, GVK Power & Infrastructure Ltd, Parsvnath Developers Ltd, New Delhi Television Ltd, Lasa Supergenerics Ltd, Tata Teleservices (Maharashtra) Ltd, Bhansali Engineering Polymers Ltd, JMT Auto Ltd, Adlabs Entertainment Ltd, Religare Enterprises Ltd, Mold-Tek Technologies Ltd, MT Educare, Tree House, Pincon Spirit Ltd.
  • Circuit filter revised to 20 percent from 5 percent: IFB Agro Industries Ltd, STCI, D B Realty Ltd, Graphite India Ltd.
  • Circuit filter revised to 20 percent from 5 percent: Rain Industries, Nagarjuna Fertilisers & Chemicals, Waterbase, TTK Healthcare, Venkys,Future Market Networks Ltd, MMTC.
  • Sono Koya Steering two-day offer for sale starts today.
  • MIDHANI and ICICI Securities added to BSE IPO Index.
  • Strides Shasun ex-date for demerger. Shareholders to get 1 share of Solara Active Pharma Sciences for every 6 shares of Strides Shasun.
  • Sequent Scientific ex-date for demerger. Shareholders to get 1 share of Solara Active Pharma Sciences for every 25 shares of Sequent Scientific.

Earnings To Watch

  • S Chand and Co.

Earnings Reaction To Watch

GM Breweries (Q4, YoY)

  • Revenue up 11 percent at Rs 112 crore.
  • Net profit at Rs 25 crore from Rs 10 crore.
  • EBITDA at Rs 33 crore versus Rs 16.5 crore.
  • Margins at 29.5 percent versus 16.3 percent.

Talking Points

  • Star India now has a complete monopoly over the Indian cricket team's home games.
  • RBI has put a virtual ban on cryptocurrencies like Bitcoin, Ethereum.
  • MPC began the new fiscal with a stay on rates.
  • Not a single house was completed in Maharashtra under PM’s 'Housing For All' plan.
  • JPMorgan chief Jamie Dimon seems set on building the Amazon.com of the financial world.
  • Facebook’s Sandberg says ‘a few’ advertisers paused spending.
  • The harsh reality of golf: Its biggest draw is still the 42 year-old Tiger Woods.

Stocks To Watch

  • Amtek Auto’s lenders panel approved resolution plan by Liberty House.
  • Sobha said that the new sales volume in fourth quarter up 40.4 percent at 10.15 lakh square feet from 7.23 lakh square feet earlier. New sales value up 30 percent and price realisations down 7.5 percent.
  • InterGlobe Aviation to not bid for Air India under current divestment plan.
  • Coal India forecast Rs 9,500 crore capex target for FY19.
  • Indian Oil acquired 17 percent stake in Mukhaizna oil field in Oman from Shell for $329 million.
  • Sona Koyo said that the promoter JTEKT Corp proposed to sell 35.14 lakh shares (1.8 percent) via an offer for sale at Rs 85 per share.
  • Indivior filed patent lawsuits against Dr. Reddy's, Actavis, Par, Alvogen and Teva.
  • Sagar Cements acquired two mini hydel power plants in Andhra Pradesh.
  • HCL Tech acquired life sciences and consumer services provider C3i solutions.
  • Majesco said that Tier one specialty insurer has signed 3-year agreement for application management services with company.
  • Kridhan Infra won an order worth Rs 134 crore in Singapore.
  • Reliance Communication hopes to cut debt by Rs 25,000 crore after Supreme Court allowed asset sale.

Commodity Cues

  • West Texas Intermediate crude rose 0.4 percent to $63.63 a barrel.
  • Brent traded lower at $67.97 per barrel; down 0.5 percent.
  • Copper surged 1.8 percent to $306.60 a pound, the biggest jump in almost four weeks.
  • Gold dipped 0.5 percent to $1,326.19 an ounce.
  • Sugar snapped two-day losing streak; ends higher at 12.4 cents per pound; up 0.7 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded flat at 10,349.50 as of 8:10 a.m.

Asian equities were mixed, while U.S. stock futures slid and the yen rose after President Donald Trump ordered his administration to consider tariffs on an additional $100 billion worth of Chinese imports, dashing investor optimism that trade tensions could ease with negotiations on the horizon.

Here are some key events for the remainder of this week:

  • On Friday, America publishes non-farm payrolls and an employment report; the jobless rate was forecast to have fallen in March after holding at 4.1 percent for five straight months.
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