Sensex, Nifty End With Small Gains Ahead Of Inflation Data

Indian equity benchmarks ended with small gains a day ahead of the inflation data.

The S&P BSE Sensex rose 0.11 percent or 40 points to 35,483 and the NSE Nifty 50 index advanced 0.18 percent or 19 points to 10,787.

For most part of the day, Sensex and Nifty traded firmly higher but pared gains in last hour of trade as profit booking creeped in heavyweights like Reliance Industries, HDFC twins and Larsen & Toubro.

Meanwhile, India’s annual inflation is expected to remain below 5 percent in May, according to the median estimate of 19 economists in a Bloomberg survey.

Thirteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom index’s 1.56 percent gain. On the other hand, the S&P BSE Realty index was the top loser, down 0.7 percent.

Shares of the Mumbai-based steel maker fell as much as 1.21 percent to Rs 592 after activist shareholder Elliott urged Thyssenr-Krupp to negotiate better Tata Steel’s European unit.

• Elliott letter highlighted the divergence in performance in Tata and Thyssenkrupp’s steel businesses.
• Eliott: Weakness in Tata’s recent performance means that a tie-up is now less favorable for Thyssenkrupp
• Eliott: If 50:50 JV needs to be maintained Tata Steel would have to pay Thyssen-Krupp
• Eliott: Calculation suggests Thyssen-Krupp would have to get 82 percent of JV with balance 18 percent with Tata Steel Europe

Source: Bloomberg

European stocks rose with most Asian shares as investors braced themselves for one of the busiest weeks of the year, during which three of the world’s major central banks will set interest rates, President Donald Trump will meet North Korea’s leader and Brexit will return to the fore.

• Suven Life Sciences: The Hyderabad-based drugmaker rose as much as 6.10 percent to Rs 228 after brokerage firm Emkay initiated coverage on the stock with a buy for target price of Rs 270, implying upside of 26 percent.
• Alembic Pharma: The Vadodara-based drugmaker was locked in a 20 percent upper circuit at Rs 522.30 after it received U.S. FDA nod for Bupropion Hydrochloride Tablets in strength of 75 and 100 milligrams.
• Ajmera Realty: The Mumbai-based real estate developer rose as much as 7.13 percent at Rs 234.40 after it acquired 5.5 acres of land at Electronic City-2 in Bengaluru. The company may generate around Rs 300 crore by developing this land parcel.
• United Breweries: The Bengaluru-based beer maker rose for fourth session in a row to record high of Rs 1,291. Trading volume was double its 20-day average.

Expect a 25-basis points rate hike by the U.S. Federal Reserve in its upcoming meet, Paul Kitney - chief strategist at Daiwa Capital Markets told BloombergQuint in an interview.

Key highlights of the conversation:

• Do not expect much guidance from Bank of Japan and European Central Bank this week
• Five stocks out of the top 20 in Asia are Indian stocks

Shares of the country's largest wireless telecom service provider rose as much as 3.48 percent to Rs 390.70 after its revenue market share rose for the first time in three quarters.

• RITES, IRCON and RVNL listing process in underway: Finance Minister Piyush Goyal.
• IRCT listing held back because of tax issue: Finance Minister Piyush Goyal.

Source: Bloomberg

Shares of the Hyderabad-based pharmaceutical company rose as much as 4.2 percent to Rs 820 after it launched generic Posaconazole Injection for first time in Indian market, Natco Pharma said in an exchange filing post market hours on Friday.

The injection will be sold under brand name Posanat and is an antifungal agent and used in patients who are at high risk of developing infections due to being severely immunocompromised, the filing added.

Shares of the Hyderabad-based cement maker rose as much as 7 percent to Rs 870.

The company has completed its capacity expansion plan at its Bayyavaram facility in Andhra Pradesh from 3,00,000 tonnes to 15,00,000 tonnes. The expansion has been completed well ahead of scheduled date for completion of the expansion, Sagar Cements said in an exchange filing.

Shares of the fraud-hit lender extended gains for the fourth straight session today, its longest winning streak since Oct last year. The stock rose as much as 4.4 percent to Rs 92.35 apiece.

The bank plans to divest stake in PNB Housing Finance, ICRA, Crisil and BSE, according to its exchange filing. It also expects a Rs 8,000 crore recovery from bad loans in the first quarter of the current financial year, according to a PTI report.

Shares of the Delhi-based mortgage lender fell as much as 6.33 percent to Rs 1,063.35 as Carlyle looks to sell its entire stake in PNB Housing Finance, The Economic Times reported siting two people aware of the development.

• Inox Wind: The Noida-based wind power solutions provider fell 3 percent to Rs 90.25. Trading volume was 22.6 times its 20-day average.
• PNB Housing Finance: The Delhi-based mortgage lender fell 3 percent to Rs 1,100. Trading volume was 14.6 times its 20-day average.
• eClerx Services: The Mumbai-based data analytics service provider fell 0.3 percent to Rs 1,293. Trading volume was 27.2 times its 20-day average.
• Timken India: The Bengaluru-based fabricated metal and hardware maker rose 9.2 percent to Rs 789.50. Trading volume was 10.8 times its 20-day average.

Shares of the Raipur-based steel maker were locked in a five percent upper circuit for fourth day in a row.

The stock was quoting at Rs 430.50 and in last four trading sessions the stock has climbed over 21 percent.

Shares of the Delhi-based jeweller rose as much as 11.40 percent after it sought shareholders’ approval for the buyback of equity shares.

The company has proposed to buyback 1.21 crore shares or 3.07 percent equity at price of Rs 350 per share. The total size of buyback will not exceed Rs 424 crore, PC Jeweller said in an exchange filing.

• 2-wheeler sales at 18.50 lakh Units versus 16.94 lakh Units (YoY)
• Domestic truck, bus sales at 76,478 units versus 53,457 units (YoY)
• Domestic passenger vehicle sales at 3.01 lakh units versus 2.52 lakh units (YoY)
• Passenger car sales at 1.99 lakh units versus 1.67 lakh units (YoY)

Shares of the Vadodara-based drugmaker rose as much as 8.90 percent, the most in over 14 months, to Rs 474 after it received U.S. FDA nod for Bupropion Hydrochloride Tablets in strength of 75 and 100 milligrams.

Bupropion Hydrochloride Tablets is therapeutically equivalent GlaxoSmithKline’s Wellbutrin Tablets. The drug had an estimated market size of $37 million in calendar year 2017 according to IMS data, Alembic Pharma said in an exchange filing.

Nifty Bank 26,700 strike price call was among the most active option contracts on the National stock Exchange.

Premium on the contract rose 35 percent to Rs 119.15. Over 1.40 lakh shares were added to the open interest which stood at 5.46 lakh shares.

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Shares of the Kolkata-based air pollution control equipment maker rose as much as 10.14 percent to Rs 28.25.

Andrew Yule and Company is one of the companies that may be transferred by the Finance Ministry to the Special National Investment Fund to meet the Securities and Exchange Board of India's minimum 25 percent public shareholding norm, news agency Press Trust of India reported.

DLF will focus on commercial business going forward, Saurabh Chawla, group CFO at DLF told BloombergQuint in an interview.

Key highlights of the conversation:

• Seeing much better environment for sales
• Need to look at various micro markets and see the guidance of local developers
• Confident of delivering more than Rs 2,000 crore annual sales going forward
• Had shut down sales last year post RERA and GST implementation
• Have launched only 1 project, not doing any pre-sales
• Launched project is more than 700 million square feet in JV with GIC
• Accounting has changed from percentage of completion method (POCM) to delivered projects
• Will be interested in commercial opportunities in Mumbai and Bangalore

Shares of the Bengaluru-based medical device maker rose as much as 8.7 percent to Rs 11.25.

Opto Circuits has received an order worth Rs 30 crore from Philips Health Care for various types of sensors manufactured by the company, Opto Circuits said in an exchange notification.

Shares of the Mumbai-based packaged food maker rose as much as 1.7 percent to hit record high and move above Rs 10,000 for the first time.

Shares of the Hyderabad-based drugmaker rose as much as 4.45 percent to Rs 224 after brokerage firm Emkay initiated coverage on the stock with a buy for target price of Rs 270, implying upside of 26 percent.

Emkay in a note said:

• Resurgence in global innovative R&D spends a key catalyst.
• Consolidation in CDMO/CRO industry is another growth catalyst.
• Suven is a focused play on growing tailwinds in CDMO.
• Suven enjoys strong margin profile; Expect earnings to compound at 19 percent over the fiscal 2018-20.

Shares of the country's second largest private sector lender fell as much as 1.77 percent to Rs 283.20.

As multi-agency probe continues in India into alleged lapses involving ICICI Bank's chief Chanda Kochhar and her family members, the matter has also come under the scanner of the U.S. markets regulator SEC, news agency Press Trust of India reported.

Indian equity benchmarks edged higher led by Reliance Industries, HDFC Bank, Infosys and Kotak Mahindra.

The S&P BSE Sensex rose 0.41 percent or 143 points to 35,590 and the NSE Nifty 50 index advanced 0.4 percent or 44 points to 10,811.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom index's 1.2 percent gain.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap index rose 0.4 percent and the S&P BSE SmallCap index gained 0.5 percent.

The rupee pared its initial gains but it was still trading higher by 12 paise to 67.38 against the American currency in late morning deals following sustained selling of dollar from banks and exporters amid higher local equities.

Traders awaiting the key macro-events consumer price index (CPI)-inflation and index of industrial production (IIP) data tomorrow.

The rupee resumed slightly higher at 67.48 against last Friday's closing level of 67.50 at the inter-bank foreign exchange here.

Later, the domestic unit strengthened further and moved in range of 67.33 and 67.48 per dollar during morning deals, it was quoting at 67.38 at 1030 hrs.

Source: Press Trust of India

The 10-year benchmark bond yields breached 8 percent last week and they may continue to be under pressure as the RBI plans to sell Rs 25,000 crore worth of cash management bills today. There is just too much supply and not enough demand.

The rupee too is not unhurt. Despite a rate hike that was expected to support the currency, the Indian rupee continues to drop against the dollar.

Investors will be keenly watching some of the global events, including the outcome of the meeting between Donald Trump and North Korea's Kim Jong Un.

Also, the U.S. Fed is expected to deliver its second rate hike of the year on Wednesday. That threatens to intensify pressure on emerging markets like India.

Another important event will be the European Central Bank's Thursday meeting on exiting quantitative easing.

Locally, some key data points that will drive this week's sentiment include inflation and industrial production. Both are due tomorrow.

Emkay on Suven Life Sciences

• Initiated ‘Buy’ with a price target of Rs 270; implying a potential upside of 26 percent from the last regular trade.
• Resurgence in global innovative R&D spends a key catalyst.
• Consolidation in CDMO/CRO industry is another growth catalyst.
• Suven is a focused play on growing tailwinds in CDMO.
• Suven enjoys strong margin profile; Expect earnings to compound at 19 percent over the fiscal 2018-20.

ICICI Securities on Mindtree

• Maintained ‘Reduce’; raised price target to Rs 955 from Rs 800.
• Strong deal momentum to help sustain revenue growth in the first half of the current financial year.
• Expect sequential revenue momentum to slow in the second half of the current financial year.
• Acquisitions showing gradual revenue improvement; Profitability to take time to pick-up.
• Multiple levers to help drive margin expansion over the fiscal 2018-2020.

Morgan Stanley on Reliance Industries Annual Report Takeaway

• Resilient network, well-engineered to cater to growing data demand.
• FTTH and enterprise solution launch over next few months.
• Jio believes media content is a key differentiator.

Macquarie on Indian Real Estate

• Under Indian Accounting Standard 115, revenue recognition will change from percentage completion to project completion.
• Companies can recognise revenues only when residential project receives occupation certificates.
• Annuity businesses including office, retail and hotels will be largely unaffected.
• Investor focus will shift to cash flow as reported P&L loses significance.

Brokerages On Sun Pharma

Goldman Sachs

• Maintained ‘Buy’ with a price target of Rs 580.
• VAI for Halol plant removes FDA compliance overhang.
• Can now start obtaining new product approvals filed from here.
• VAI adds credibility to the current financial year.
• guidance for low double-digit top line growth.

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 460.
• Expect sales ramp-up from Halol to be gradual.
• New product sales from Halol starting October is already priced in.
• Expect street’s focus to shift to Sun’s quality of earnings and specialty ramp-up.

HSBC

• Maintained ‘Hold’ with a price target of Rs 510.
• Halol resolution to help in recovery of U.S. sales.
• Halol clearance positive but broadly priced in.
• Expect margin pressures on significant cost build-up for specialty products.

Who’s Meeting Whom

• PI Industries to meet UTI Asset Management on June 11.
• Gujarat Pipavav Port to meet ICICI Prudential Mutual Find on June 11.
• Mahindra Holidays & Resorts India to meet Reliance MF, Enam Asset Management and Motilal Oswal from June 11-12.

Insider Trades

• Kwality Ltd promoter Sanjay Dhingra acquired 6 lakh shares on June 4.
• Nandan Denim promoter acquired 21,975 shares on June 5.
• Ashoka Buildcon promoter acquired 38,750 shares from June 5–6.
• Vardhman Special Steels promoter Sachit Jain acquired 11,584 shares from June 5–7.

(As reported on June 8)

Bulk Deals

PVR

• Baron Emerging Markets Fund sold 6 lakh shares or 1.3 percent equity at Rs 1,332.15 each.

Worth Peripherals

• Girik Wealth Advisors bought 1.45 lakh shares at Rs 68 each.
• HSBC MF – Small Cap Equity Fund sold 4 lakh shares at Rs 68.05 each.

Best Steel Logistics

• Promoter Saket Agarwal sold 3.92 lakh shares or 1.5 percent equity at Rs 154.43 each.

F&O Cues

• Nifty June futures ended at 10,748, with a discount of 19.5 points versus 3.1 points.
• June series-Nifty open interest (OI) up 2.4 percent and Bank Nifty OI down 2 percent.
• India VIX ended at 12.6, down 0.6 percent.
• Max OI for June series call at 11,000 strike price call option, OI at 42.6 lakh shares, up 7 percent.
• Max OI for June series put at 10,600 strike price put option, OI at 49 lakh shares, up 13 percent.

Price of petrol has been reduced by by 20 paise to 76.58 per litre and diesel has been cut by 15 paise to 67.95 a litre effective from today, according to information on the website of Indian Oil.

The prices mentioned above exist in Delhi.

• U.S. markets regulator may probe ICICI Bank, Chanda Kochhar
• Welspun Corp awarded contracts for supply of 72 KMT of API pipes to American market
• PNB to divest stake in PNB Housing Finance, ICRA, Crisil and BSE
• Goa Carbon total Production in May at 19,827.8 million tonnes; Sales at 9,821.23 million tonnes
• Hindustan National Glass & Industries to divest its entire 11.23 percent stake in HNG Float Glass
• Natco Pharma introduces generic posaconazole injection in India
• IVRCL receives Expression of Interest (EOI) from potential investors
• Oriental Bank of Commerce, Indian Overseas Bank and Syndicate Bank hike MCLR across various tenures
• IndusInd Bank receives RBI approval for setting up a subsidiary as part of the merger with Bharat Financial Inclusion
• Inox Wind auditors Patankar & Associates resigns due to time constraints caused by their other commitments and engagements
• Reliance unit acquires 100 percent stake in Rhea Retail for Rs 203 crore
• Phoenix Mills acquires under construction retail development in Lucknow with leasable area of 9 lakh square feet for Rs 453 crore

• Trump shocks leaders with Trudeau insult to upend G-7 summit
• Modi says meeting with Xi will add vigour to India-China ties
• Hey Nagpur, this is how it could have played out; alas!
• Jaitley criticises Congress for creating hue and cry over judicial appointment issue
• Total net loss of public sector banks topped Rs 87,000 crore in FY18
• Finance Ministry may transfer 5 sick CPSE shares to a fund to meet SEBI norm
• Trump renews overtures to Putin, against pretty much all advice
• Startup street: Are women-founded startups a better bet?
• Confidence in workings of PSU banks at historic low, says YV Reddy
• Managing India’s economy: Those who cannot remember the past...

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.18 percent to 10,767 as of 6:38 a.m.

Asian stocks traded mixed Monday, with limited fallout from a tumultuous G-7 meeting. The dollar drifted, and the yen steadied as President Donald Trump arrived in Singapore ahead of his summit with North Korea’s Kim Jong Un.

Japanese shares were little changed, while their South Korean counterparts edged higher. Australia’s markets are shut for a holiday.

Bonds

• The yield on 10-year Treasuries was at 2.95 percent.

Commodities

• West Texas Intermediate crude dipped 0.2 percent to $65.60 a barrel.
• Gold advanced 0.1 percent to $1,299.07 an ounce.
• LME copper was unchanged at $7,312.00 per metric ton.

Here are some key events to watch this week:

• President Donald Trump and North Korean leader Kim Jong Un meet for an historic summit in Singapore Tuesday.
• U.K. Prime Minister Theresa May faces votes that could derail her Brexit policy, also Tuesday.
• Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid.
• European Central Bank rates decision Thursday and briefing with President Mario Draghi.
• Bank of Japan June monetary policy decision and news conference Friday.
• FIFA expects more than three billion viewers for the World Cup that begins this week in Russia.