Pedestrians walk near the Bombay Stock Exchange (BSE), left, in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Close At 1-Month High After Five Straight Days Of Gains

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Closing Bell

Indian equity benchmarks edged higher led by Reliance Industries, TCS and Infosys. However, the gains were capped as oil retailers and banking stocks came under selling pressure.

Meanwhile, the benchmarks rose to one-month highs after five straight days of gains.

The S&P BSE Sensex rose 0.18 percent or 60 points to 33,940 and the NSE Nifty 50 index advanced 0.14 percent or 15 points to 10,417.

Twelve out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Metal index’s 1.6 percent gain. On the flipside, the S&P BSE Oil & Gas index was the top sectoral loser, down 2.2 percent.

The broader markets ended mixed as the S&P BSE MidCap index declined 0.19 percent while the S&P BSE SmallCap index rose 0.2 percent.

On Countdown: Find Out About Anand Rathi's Bullish Call On Ashoka Buildcon

Fab Four Stocks Of The Day

  • Tata Sponge Iron: The Kolkata-based sponge iron maker rose as much as 5.9 percent to Rs 1,091.70 after Centrum Capital upgraded the stock to 'buy' from 'hold' for target price of Rs 1,165 per share.
  • Associated Alcohols & Breweries: The Indore-based alcoholic beverage maker rose as much as 11.68 percent, the most in two months, to record high of Rs 339.50. Well-known investor Dolly Khanna picked up 1.04 percent stake as per March shareholding pattern.
  • HFCL: The Delhi-based telecom equipment maker rose as much as 5.9 percent to Rs 28.65 after it bagged order worth Rs 579 crore from Bharat Sanchar Nigam Limited (BSNL) for building 2G GSM base service set network in Assam.
  • Aban Offshore: The Chennai-based oil field service provider rose as much as 7.2 percent to Rs 186 after Brent crude rallied 3.5 percent to its highest level since 2014.

Block Deal Alert

  • PTC India has 24.5 lakh shares change hands in a block. Stock down 1.57 percent at Rs 94.10.

Buyers and sellers were not immediately known

Source: Bloomberg

Goa Carbon Q4 Net Profit More Than Doubles

Shares of the Goa-based chemical company fell 0.17 percent to Rs 985.80 after the company reported its March quarter earnings.

Key earnings highlights:

  • Net profit at Rs 11.84 crore versus Rs 4.87 crore (YoY)
  • Revenue at Rs 160 crore versus Rs 87 crore (YoY)
  • EBITDA up 457 percent at Rs 19.5 crore versus Rs 3.5 crore
  • Margins at 12.1 percent versus 4.6 percent

U.S. Will Meet Two-Third Of Global Oil Demand In Next 5 Years: Fatih Birol

Fatih Birol, executive director of International Energy Agency while speaking at International Energy Forum in New Delhi said:

  • Global oil demand will continue to grow strongly by about 1.5 million barrels per day
  • U.S. will be meeting two-third of global oil demand in the next 5 years
  • Since prices have picked up, we will see second wave of shale oil
  • Very high prices are also not in the interest of oil producers
  • Global oil market dynamics change substantially. If we see another price hike, there will be strong response from U.S. and Russian shale gas production
  • Going through difficult times in terms of investments in oil markets

M Damodaran, Former SEBI Chief To BloombergQuint

  • Asset quality speculation may have prompted the regulator to take the decision on 3-year term of Shikha Sharma
  • An independent inquiry should be done by the ICICI Bank
  • Regulator will step in only when there are irregularities, not before that
  • There seems to be a case for fact finding inquiry
  • Conflict of interest doubts should be duly addressed by Chanda Kochhar

Click here to read the full interview

Market Check

  • Indian equity benchmarks were little changed as gains in metal and upstream oil companies was offset by losses in oil retailers and banking shares.
  • The S&P BSE Sensex rose 0.14 percent or 47 points to 33,929 and the NSE Nifty 50 index was little changed at 10,404.
  • Thirteen out of 19 sector gauges were trading higher led by the S&P BSE metal index's 1.5 percent gain. On the flipside, the S&P BSE Oil & Gas index was the top sectoral loser, down 1.9 percent drop.
  • The broader markets were trading mixed as the S&P BSE MidCap index fell 0.16 percent while the S&P BSE SmallCap index rose 0.17 percent.
  • The overall breadth was marginally negative as 1,398 shares were advancing while 1,106 were declining on the BSE.

Top Nifty Gainers

  • Vedanta up 3.9 percent
  • Eicher Motors up 2.3 percent
  • HCL Technologies up 2.3 percent
  • Sun Pharma up 2.1 percent
  • Hindalco up 1.9 percent

Top Nifty Losers

  • Hindustan Petroleum down 7.6 percent
  • Bharat Petroleum down 7.2 percent
  • Indian Oil down 6.5 percent
  • Adani Ports down 2.2 percent
  • GAIL India down 1.7 percent

Click here for more stock market data

Block Deal Alert

  • Bharat Petroleum has 11.9 lakh shares change hands in a single block. Stock down 7 percent at Rs 419.60.

Buyers and sellers were not immediately known

Source: Bloomberg

Alkem Labs Falls On Receiving 13 Observations For Daman Unit

Shares of the Mumbai-based drugmaker fell as much as 2.78 percent to Rs 1,765 after it received 13 observations from the U.S. FDA.

Five observations are repeat of 2016, from the U.S. drug regulator regarding quality controls and manufacturing practices at its largest facility in Daman that contributes about half of its sales in the U.S.

The observations stem from last month’s surprise inspection conducted from March 19-27. BloombergQuint has obtained a copy of the Form 483 issued by the U.S. Food and Drug Administration to the drugmaker.

No Instructions From Government For Absorbing Costs: Indian Oil

Shares of the government-owned oil retailers fell sharply after a report by Bloomberg quoting sources said the government has asked the companies to absorb up to Re 1 per litre rise in fuel prices.

Clarifying on the news AK Sharma of Indian Oil said:

  • There have been no instructions from the government for absorbing cost by us
  • Government may interfere with prices if retail prices go out of control
  • There are various other reasons for changing margins
  • Difficult to define an ideal range in gross refining margins
  • We have performed well on both refining and marketing side
  • Performance in Q4 and FY19 should be good
  • Government is sensible enough to take call on taxes when required
  • Do not think oil prices will remain high for very long but we expect fluctuations

Also Read: Pradhan Says Oil Prices ‘Too High’ For ‘Price-Sensitive’ India

Lemon Tree Hotels Gains On Signing Agreement To Operate Hotel

Shares of the Delhi-based hospitality company rose as much as 2.3 percent to Rs 68.40 after it signed a contract to operate 120-room hotel in Vijaywada which is expected to be operational by March 2021.

On Hot Money: Find Out Will Manappuram Finance Be Able To Break Previous Highs?

Metal Stocks Rise For Second Day Led By Hindalco

Shares of the metal companies were trading higher for second straight day led by Hindalco and Vedanta after aluminium price rose 3 percent overnight on the London Metal Exchange.

Gauge of metal shares on the National Stock Exchange — Nifty Metal index rose 1.5 percent.

IHH Healthcare Preparing To Formally Approach Fortis With Rival Bid

Shares of Fortis Healthcare rose 1.9 percent to Rs 149.35.

Malaysia’s IHH Healthcare is preparing to formally approach Fortis Healthcare with an offer for the hospital operator that will put it in competition with a TPG-backed consortium, Bloomberg reported citing people with knowledge of the matter.

IHH, Southeast Asia’s largest hospital operator, aims to send a letter to the Fortis board within the next couple of weeks about its plans to bid for the Indian company, Bloomberg report added citing unidentified people.

Stocks Moving On Heavy Volumes

  • Mahanagar Gas: The Mumbai-based gas distributor fell 3.4 percent to Rs 913. Trading volume was 149.4 times its 20-day average.
  • Thyrocare Technologies: The Mumbai-based diagnostic lab operator rose 3.9 percent, the most in over two weeks to Rs 610. Trading volume was 68.4 times its 20-day average.
  • Brigade Enterprises: The Bangalore-based real estate developer rose 1.12 percent to Rs 261.55. Trading volume was 12.8 times its 20-day average.
  • Symphony: The Ahmedabad-based air cooler maker rose as much as 5 percent to Rs 1,879. Trading volume was 11.1 times its 20-day average.

Ranjan Pai Of Manipal Health On Revised Fortis Deal

  • Sweetened Fortis offer after feedback from the Investors
  • Rival bid fear was not the reason to revise the offer
  • Believe minority shareholders will be happy with the revised offer
  • Will list SRL after merger

Star Cement Gains After Receiving Subsidy From Central Government

Shares of the Kolkata-based cement maker rose as much as 2.6 percent to Rs 130.65 after the company informed exchanges that it along with its subsidiaries have received Rs 80.26 crore subsidy claim from the central government and the amount will be utilized for pre-payment of loans.

Punjab National Bank Falls On Rating Downgrade

Shares of the Delhi-based government-owned bank fell as much as 3.7 percent, most in two weeks to Rs 101.30 after Fitch Ratings downgraded the viability rating of Punjab National bank to ‘BB-’ from ‘BB’. The rating agency said it expects the losses from the Rs 13,000 crore fraud to affect the bank’s financials.

Kwality Rises After Block Deal

Shares of the Delhi-based dairy products maker rose as much as 3 percent to Rs 58.40 after 15.2 lakh shares changed hands in a block deal.

Buyers and sellers were not immediately known

Source: Bloomberg

HFCL Rises On Winning Advance purchase Order From BSNL

Shares of the Delhi-based telecom equipment maker rose as much as 5.9 percent to Rs 28.65 after it bagged order worth Rs 579 crore from Bharat Sanchar Nigam Limited (BSNL) for building 2G GSM base service set network in Assam.

F&O Check: Nifty Bank 25,000 Put Option Contract Most Active On NSE

Nifty Bank 25,000 put option contract was among the most active put contracts on the NSE a day ahead of its weekly expiry.

  • Premium on the contract surged 76 percent to Rs 131.15
  • As many as 32,560 shares were added to open interest of 6.90 lakh shares

On the other hand, Nifty Bank 25,500 call option was among the most active call options contract on the NSE.

  • Premium on the contract fell 76 percent to Rs 7.90
  • Over 2.66 lakh shares were added to open interest of 10.3 lakh shares

Click here to see complete options chain

On The F&O Show: Find Out Is It The Right Time To Take Long Positions On The Nifty?

Phoenix Mills Gains After CPPIB Pumps In Rs 938 Crore

Shares of the Mumbai-based real estate developer rose as much as 4 percent to Rs 597.85 after Canada Pension Plan Investment Board (CPPIB) invested Rs 938 crore for acquiring additional 19 percent stake in Island Star Mall Developers Private Limited (ISMDPL).

CPPIB has increased its investment into ISMDPL to a total of Rs 1,662 crore, for 49 percent ownership stake.

IOC, HPCL, BPCL Plunge As Government Asks Not To Hike Fuel Price

Shares of the government-owned oil retailers fell sharply after a report by Bloomberg quoting sources said the government has asked the companies to absorb up to Re 1 per litre rise in fuel prices.

Asian benchmark Brent oil held gains above $70 a barrel as investors weighed easing trade tensions between the world’s two biggest economies against concerns over rising U.S. crude stockpiles.

  • Indian Oil plunged 5.6 percent
  • Bharat Petroleum sank 5.13 percent
  • Hindustan Petroleum tumbled 6.5 percent

Also Read: Fastest Growing Oil Market Laments $70 Crude as Saudis Eye Plant

ONGC Rises On Talks With Ecuador For Upstream Oil Investments

Shares of the government-owned oil exploration company rose as much as 2.97 percent to Rs 185.55 after Ecuador held talks with ONGC for investment in upstream oil projects, Carlos Garcia, South American nation’s minister of hydrocarbon said in an interview to Bloomberg.

  • Ecuador offered two projects -- Intracampos, which has 8 blocks, and Block 20: Garcia
  • Intracampos blocks very close to becoming producing assets
  • ONGC looking for assets with production of 25k b/d, Garcia says

Fortis Healthcare Rises After Manipal Health Revises Deal

Shares of the Delhi-based hospital chain operator rose as much as 3.89 percent to Rs 152.30 after Manipal Heath Enterprises revised its offer to buy Fortis Healthcare's hospital business after consulting with shareholders who expressed dissatisfaction with the earlier offer.

What’s Changed?

  • “More favourable” swap ratio - Manipal Health revises Fortis Healthcare's hospital business valuation by 21 percent, from Rs 96.5 per share to Rs 116.90 per share
  • Manipal Health and TPG will not invest an additional Rs 3,900 crore in the merged entity Manipal Hospitals. Instead the merged company will do a rights issue of up to Rs 4,000 crore in which all shareholders can participate
  • SRL Diagnostics to remain a subsidiary of Fortis and may be merged into it on a later date thereby listing the diagnostics business separately

Hindalco, Vedanta Gain After Aluminium Rises In International Market

Shares of Hindalco and Vedanta rose as much as 2.8 percent and 2.7 percent each respectively after aluminium prices rose in international markets after buyers stopped buying aluminium from the world's largest manufacturer — Rusal following sanctions imposed by U.S.

The aluminium price on London Metal Exchange rose 3 percent overnight, posting biggest 5-day gain in nine years.

Block Deal Alert

  • Mahanagar Gas has 7.6 percent equity change hands on the National Stock Exchange in multiple blocks. Stock down 3.2 percent at Rs 914.85.

Buyers and sellers were not immediately known

Source: Bloomberg

Opening Bell

Indian equity benchmarks were little changed as gains in Hindalco and Vedanta were offset by losses in oil marketing companies, State Bank of India and ICICI Bank.

The S&P BSE Sensex was little changed at 33,863 and the NSE Nifty 50 index was also little changed at 10,393.

Six out of 11 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty Metal index's 0.8 percent gain. On the other hand, the Nifty PSU Bank index was the top sectoral loser, down 1 percent.

On IndianOpen: Find Out What To Expect From This Earnings Season?

Jonathan Barratt, CIO, Ayers Aliance To BloombergQuint

  • Important to gauge how geo-political issues play out at the moment.
  • Not possible at the moment to predict where aluminium prices will go.
  • Expect deeper rally in commodities once trade war concerns resolve.
  • Need to look at general macro situation instead of near term supply for aluminium.

Money Market Heads Up!

Treasury-bill sale of Rs 15,000 crore by the government today will test investors’ appetite as sovereign bond yields climbed the most in two months. RBI will auction Rs 7,000 crore of 91-day T-bills and Rs 4,000 crore each of 182-day and 364-day notes.

Yield on benchmark 10-year notes climbed 15 basis points in yesterday's session. Edelweiss Securities says the trajectory reversal has been very sharp and has dampened the recent sentiment revival as broad-based buying still seems to be absent

Implied opening from forwards suggests onshore spot will start trading around 64.9049 today.

BQ Heads Up!

Brokerage Radar

Macquarie on Indian Aluminium

  • Expect Aluminium and Alumina prices to rise on Norsk Hydro shutdown and U.S. sanction on Rusal.
  • Continue to assess developments, but a positive impact in short term is apparent.
  • Hindalco, NALCO and Vedanta to benefit.
  • NALCO is most sensitive to prices; Hindalco is top pick on these events.

Jefferies on NTPC

  • Maintained ‘Buy’ with a price target of Rs 205.
  • Ended previous fiscal on a strong capacity note.
  • Coal availability issues of third quarter are resolving; Expect normalcy by September.
  • Regulated ROE during the fiscal 2020-2024 could positively surprise.
  • Expect 11 percent compounded growth rate in earnings over the fiscal 2017-2020.
  • Capacity driven earnings growth to re-rate stock over next 12 months.

Investec on Finolex Industries

  • Maintained ‘Buy’; cut price target to Rs 737 from Rs 763.
  • Earnings depends on resin spreads.
  • Management pursuing volume growth at cost of margins.
  • No price hike unlike peers as focus still on market share gains.
  • Finolex trading at a discount to peers.

Macquarie on Eicher Motors

  • Maintained ‘Outperform’ with a price target of Rs 37,000.
  • Enfield dealer checks confirm strong demand.
  • Royal Enfield demand to remain higher than production in the current financial year.
  • Waiting period of 15-90 days on key models.
  • Expect 25% net profit CAGR over next two years.

UBS on Dr. Reddy’s Labs

  • Maintained ‘Neutral’; cut price target to Rs 2,420 from Rs 2,550.
  • Expect revenue growth to be subdued in the near term.
  • Opportunity size in gSuboxone might be constrained due to introduction of more generics.
  • Dr. Reddy’s needs more than one big product approval for stock to move up.
  • Increased competition and delays in approvals to weigh on the current fiscal’s earnings.
  • Stock already pricing in a recovery in the current financial year.

HSBC on SAIL

  • Upgraded to ‘Hold’ from ‘Sell’; hiked price target to Rs 88 from Rs 84.
  • Demand recovery and benign pricing environment to result in another strong quarter.
  • Completion of modernisation and expansion projects to improve profitability.
  • Expect average volume growth of 11 percent and operating income growth of 46 percent over the fiscal 2019-2020.
  • Expect SAIL to return to profitability in the current fiscal for the first time in four years.
  • Lower margins and inefficient capital allocation remain concerns.

Edelweiss on Future Consumer

  • Initiated ‘Buy’ with a price target of Rs 77.
  • Future Consumer is a long-term play on India’s evolving consumption segment.
  • Future Consumer has efficiently leveraged Future Retail’s retail muscle.
  • Tapping emerging categories with innovative offerings.
  • Differentiated and prudent pricing strategy ensuring desired traction.
  • Expect revenue CAGR of 42.5 percent and operating margin to expand by 379 basis points over the fiscal 2017-2020.
  • Expect the company to turn profitable from the current financial year.

HSBC on Future Retail

  • Maintained ‘Buy’ with a price target of Rs 730.
  • Implemented ‘everyday low price’ strategy emulating its rival Avenue Supermarts.
  • Future aims to match or better its prices relative to DMart.
  • Future has significantly upped its game in value retailing.
  • Expect this move to improve store throughput and augment SSSG growth.

Morgan Stanley on Bharti Airtel

  • Maintained ‘Overweight’ with a price target of Rs 535.
  • Media reports suggest Airtel to sell Kenya operations.
  • Airtel in the past has stated that Kenya operations need to be fixed.
  • If news is correct then regulatory approvals would be key.

Credit Suisse on Amber Enterprises

  • Amber is room-AC manufacturer for leading brands.
  • Company expanding footprint in non-AC and more components.
  • 9MFY18 bodes well; Better returns on growth/leverage.
  • Chinese imports have lost ground; India exporting now.

Stocks To Watch

  • Fortis Health get revised offer from Manipal Health Group after opposition from minority shareholders.
  • Mahanagar Gas promoter BG Asia Pacific Holdings Pte is looking to sell up to 12.5 percent stake in the company. (More details here)
  • Infosys Ltd. partnered with communications services provider Calix to develop and deliver new software modules and services.
  • Lemon Tree Hotels signed contract to operate 120-room hotel in Vijaywada that is expected to be operational by March 2021.
  • AU Small Finance bank increased deposit rate on savings account for balances between Rs 1 lakh–10 lakh by 50 basis points and Rs 10 lakh–10 crore by 25 basis points.
  • IFCI revised benchmark rate to 9 percent from 8.8 percent effective from April 12.
  • Dolly Khanna bought 1.04 percent stake in Associated Alcohols as per March 2018 shareholding pattern.
  • Binani Industries received shareholders’ approval to sell assets.
  • IDBI Bank said Shree Renuka Sugar stake at 9.5 percent after conversion of debt to equity.
  • Canada Pension Fund invested additional Rs 938 crore in Phoenix Mills unit; raises stake to 49 percent.
  • HFCL won order worth Rs 579 crore from BSNL.
  • Star Cement says received Rs 80.26 crore towards subsidies from central government.
  • Oricon enterprises partnered with Indiabulls Real Estate subsidiary for joint development of Worli property.

Earnings To Watch

  • Goa Carbon

F&O Cues

  • Nifty April futures closed trading at 10,421.5 with a premium increases to 19.3 points from 14.6 points.
  • April series: Nifty open interest up 1 percent, Bank Nifty open interest up 14 percent.
  • India VIX ended at 14.5, down 2.3 percent.
  • Max open interest for April series at 10,500 call strike (open interest at 41.6 lakh, up 5 percent).
  • Max open interest for April series at 10,000 Put (open interest at 45.6 lakh, down 1 percent).

Bulk Deals

APL Apollo Tubes

  • WF Asian Reconnaissance Fund bought 5 lakh shares or 2.1 percent equity at Rs 2,140 each.

Supreme Industries

  • SmallCap World Fund sold 17.99 lakh shares or 1.4 percent equity at Rs 1,205 each.

VRL Logistics

  • Morgan Stanley Mauritius Co sold 5.26 lakh shares or 0.6 percent equity at Rs 389.22 each.

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,427 as of 7:52 a.m.

Asian stocks fluctuated amid a lack of fresh impetus after an apparent easing of trade tensions between the U.S. and China triggered a buoyant session Tuesday for global equities and a renewed vigor in favor of risk appetite.

Here’s what is coming up this week:

  • U.S. CPI data and FOMC minutes due Wednesday.
  • JPMorgan Chase & Co. and Citigroup Inc. report first-quarter earnings Friday.

Bonds

  • The yield on 10-year Treasuries was steady at 2.80 percent.
  • Australia’s 10-year bond yield fell one basis point to 2.69 percent.

Commodities

  • Gold was steady at $1,340.07 an ounce.
  • West Texas Intermediate crude was flat at $65.50 a barrel after rallying 3.3 percent.
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