Sensex, Nifty End At Over 4-Month Highs Ahead Of Inflation Data

Indian equity benchmarks rose to their highest level since February led by Reliance Industries, State Bank of India and TCS ahead of May inflation data.

The S&P BSE Sensex rose 0.6 percent or 209 points to 35,692 and the NSE Nifty 50 index climbed 0.5 percent or 56 points to 10,843.

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.

Fifteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Healthcare index's 1.9 percent gain. On the other hand, the S&P BSE Metal index was top loser, down 0.56 percent.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap index rose 0.9 percent and the S&P BSE SmallCap index gained 0.5 percent.

Shares of the Mukesh Ambani-led company rose 1.7 percent to close at an all-time high level of Rs 999.40.

• Thomas Cook has 12 lakh shares change hands in a single block on the BSE. Stock up 2.3 percent at Rs 275.95.

Buyers and sellers were not immediately known

Source: Bloomberg

• BGR Energy Systems: The Chennai-based infrastructure construction company rose as much as 13.73 percent to Rs 103.95 after it won two orders worth Rs 431 crore from Nuclear Power Corporation of India.
• DCM Shriram: The Delhi-based business conglomerate rose as much as 13.74 percent to Rs 308 after it informed exchanges that its board will meet on June 18 to consider a proposal to buy back shares.
• Strides Shasun: The Bengaluru-based drugmaker rose as much as 5.49 percent to Rs 369 after it got U.S. FDA approval for Oseltamivir Phosphate capsules.
• Tata Elxsi: The Bengaluru-based software developer rose as much as 4.4 percent to record high of Rs 1,280 on the back of heavy volumes. Trading volume was 3.3 times its 20-day average.

President Donald Trump and Kim Jong Un expressed optimism that the U.S. and North Korea could find a path toward peace, opening a highly anticipated summit between two adversaries that only last year had seemed on the brink of nuclear war.

Key takeaways:

• Will visit Pyongyang at appropriate time: Trump
• Remains of American dead will be returned to U.S.: Trump
• Sanction on North Korea will remain in effect: Trump
• U.S. won't be reducing troop numbers in South Korea: trump
• U.S. stopping war games in South Korea: Trump
• Donald Trump and Kim Jong Un sign the 'important' document
• Had a historic meeting, decided to leave the past behind: Kim Jong Un
• Will be meeting Kim again: Trump
• Kim a 'very talented man': Trump
• Have developed a very special bond with Kim: Trump
• Kim a worthy negotiator: Trump
• We are going for signing right now: Trump
• A lot of progress, better than anybody could've expected: Trump
• Things are going better than expected: Trump
• Will be making announcement shortly: Trump

Source: Bloomberg

Shares of the Chennai-based infrastructure construction company rose as much as 13.73 percent to Rs 103.95 after it won two orders worth Rs 431 crore from Nuclear Power Corporation of India.

The meeting between President Donald Trump and Kim Jong Un was met with a collective shrug by global markets, which are more fixated on a host of macro events and data coming in the next few days. Stocks climbed, Treasuries nudged down, and commodities were range-bound.

• Indian equity benchmarks came off day's highs as Tata Steel, Axis Bank and Coal India were facing selling pressure.
• The S&P BSE Sensex was up 0.43 percent or 150 points at 35,635 and the NSE Nifty 50 index rose 40 points or 0.36 percent to 10,826.
• The overall breadth was marginally positive as 1,301 shares were advancing while 1,154 were declining on the BSE.
• The mid- and small-cap shares were in line with the larger peers as the S&P BSE MidCap index rose 0.5 percent and the S&P BSE SmallCap index gained 0.3 percent.
• Fourteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Healthcare index's 2 percent gain. On the other hand, the S&P BSE Metal index was top loser, down 0.5 percent.

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Nifty Bank 26,800 call was among the most active option contracts on the National Stock Exchange.

The premium on the contract surged 47 percent to Rs 82.50. Over 1.84 lakh shares were added to the open interest which stood at 7.22 lakh shares.

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• Alembic Pharma: The Vadodara-based drugmaker rose 1.1 percent to Rs 525.40. Trading volume was 20.7 times its 20-day average.
• Indian Energy Exchange: The Delhi-based power trading platform operator rose 0.8 percent to Rs 1,648. Trading volume was 17.1 times its 20-day average.
• Jai Corp: The Maharashtra-based polyethylene fabric maker rose 2 percent to Rs 151.20. Trading volume was 12.8 times 20-day average.
• Trent: The Mumbai-based retail store operator fell 1.26 percent to Rs 313.85. Trading volume was 7 times its 20-day average.

Shares of the Mumbai-based hotel chain operator rose as much as 5.2 percent to Rs 18.35 after it issued 125 crore shares to JM Financial Asset Restructuring Company for converting part of debt into equity.

• Vedanta has 11 lakh shares change hands in a block. Stock down 0.2 percent at Rs 245.55.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the country's largest wireless carrier fell 0.8 percent to Rs 385 after merger talks between Airtel Kenya and Telekom collapsed, Bloomberg reported citing a business daily.

Shares of the Mumbai-based company were locked in a five percent upper circuit at Rs 39.35 for fourth day in a row.

During the last four sessions the stock has rallied 21 percent.

Business in the residential space remains sluggish despite reforms, JC Sharma, managing director of Sobha told BloombergQuint in an interview.

Key highlights of the conversation:

• Expect FY19 to be better than FY18
• Will be entering a new city along with more new launches
• Expect interest costs to remain under control
• Expect balance sheet to show a healthy growth
• Continue to see traction in Kerala and Gurgaon
• Expect sales to improve as new launches dimish and existing inventory is sold
• Contracting business has lesser margin compared with residential real estate business
• Will not only sustain margins but beat industry standards going forward
• Have lined up 8 million square feet of projects
• Project launches should start in June
• New launches will help improve sales in FY19
• Taking 4 years to complete a project
• Bengaluru will have highest number of launches
• Other cities will witness launches as well
• Average realisations at Rs 7,993 per square feet
• Dip in realisations due to exclusion of accounting for projects sold with partners
• Tie up with GIFT City for 1.3 million square feet of FSI
• Looking for opportunities in Hyderabad and Trivandrum

Shares of the Delhi-based business conglomerate rose as much as 5.71 percent to Rs 287 after it informed exchanges that its board will meet on June 18 to consider a proposal to buy back shares.

It will be expensive to consume content going forward meanwhile the company is envisaging 9-10 percent revenue growth this year, Dish TV'S Jawahar Lal Goel told BloombergQuint in an interview.

Key highlights of the conversation:

• Good years are coming ahead, data side OTT prices have come down which may not stay there.
• 34-35 percent Ebitda margin guidance on the back of synergies and higher average revenues per use.
• Fiber-to-home has high capex issue, will see how Jio pans out, will chart out strategy in due course.
• ARPU has been a misnomer for the company, counting on 60 days versus 120 days due basis.
• Total size now at 24 million subscribers.

• Adani Ports and SEZ has 24.1 lakh shares change hands in a block. Stock up 1.14 percent at Rs 387.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Kolkata-based steel cable maker rose as much as 11.5 percent to Rs 33 after the company informed exchanges that it is exploring options to sell its steel business to deleverage the company.

Shares of the country's second largest hospital chain operator fell as much as 1.57 percent to Rs 141.50 after after the company decided to defer the date of its results announcement. The company was supposed to announce its results on June 11.

Shares of the country's second largest IT outsourcing company fell as much as 0.95 percent to Rs 1,250 after it informed exchanges that it will delist American Depository Receipts (ADR) from Euronext Paris and Euronext London on the back of low trading volumes.

Indian equity benchmarks edged higher tracking mixed Asian cues ahead of the outcome of Tuesday’s historic summit between President Donald Trump and North Korea’s leader Kim Jong Un.

The S&P BSE Sensex rose 0.2 percent or 70 points to 35,551 and the NSE Nifty 50 index advanced 0.2 percent or 25 points to 10,810.

Nine out of 11 sector gauges compiled by the National Stock Exchange were trading higher led by the Nifty Pharma index's 1 percent gain. On the other hand, the Nifty Realty index was top loser, down 0.15 percent.

The mid- and small-cap shares were outperforming their larger peers as the Nifty Midcap 100 index rose 0.4 percent and the Nifty Smallcap 100 index climbed 0.5 percent.

The rupee depreciated by 10 paise to 67.52 against the US dollar in early trade today ahead of release of key IIP and inflation data.

Dealers attributed the rupee's fall to fresh demand for the US currency but a higher opening in domestic stocks limited the fall.

Major currencies were mostly weak against the US dollar overseas as a historic US-North Korea summit got underway in Singapore.

Source: Press Trust of India

Both the rupee and bonds may trade in a range as investors look for triggers from global and local events.

The all-important meeting between Donald Trump and Kim Jong Un is currently underway in Singapore. The U.S. wants complete denuclearisation from North Korea. In return, it may offer "unique" guarantees to ease the regime's concerns about giving up its nuclear arsenal.

Later in the evening, India's May inflation and April factory output numbers will be watched. The consensus is for the CPI to accelerate to 4.9 percent from 4.58 percent in the previous year. Higher inflation risk was one of the factors that the RBI mentioned while raising rates last week.

Industrial production is also seen growing at a higher clip at 5.9% than the prior year.

Globally, all's not well because of risks of a trade warn as witnessed in the chaotic G-7 meeting. IMF Managing Director Christine Lagarde warned that "The clouds on the horizon" are getting darker.

Yesterday, the benchmark government bonds witnessed some value buying yesterday, while rupee ended weak.

• Nifty June futures closed trading at 10,785.8 discount of 1 point versus 19.5 points.
• June series-Nifty open interest up 4 percent and Bank Nifty open interest up 1.4 percent.
• India VIX ended 13.1, up 3.8 percent.
• Max open interest for June series at 11,000 Call, open interest at 39.3 lakh, open interest down 8 percent.
• Max open interest for June series at 10600 Put, open interest at 49.5 lakh, open interest up 1 percent.

F&O Ban

• Dewan Housing
• Balrampur Chini
• Jet Airways

Alert: Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

• Nifty PCR at 1.53 versus 1.49
• Nifty Bank PCR at 0.89 versus 0.80

CLSA on Indian Pharma

• Investments in differentiated products began 3-4 years ago.
• Differentiated portfolio strategy has crystallised substantially over the years.
• Sun Pharma provides highest visibility on pipeline monetisation.
• Strong execution from Sun can lead to rerating.

Goldman Sachs on Steel

• Steel spreads remain resilient despite cost increase.
• Expect spreads to cool off from current levels but remain above mid-cycle levels.
• JSW Steel will benefit from robust spreads and upward revisions of earnings.
• JSW Steel: Maintained ‘Buy’; raised price target to Rs 390 from Rs 360.

HSBC on GAIL (India)

• Maintained ‘Hold’; raised price target to Rs 355 from Rs 325.5.
• Positives: improving transmission profitability, lower U.S. LNG contract and rising petchem volumes.
• Next trigger is decision on unified tariff.
• Raise earnings estimates for the current and the next financial year by 8 percent each.

Kotak on Max Financial

• Maintained ‘Buy’ with a price target of Rs 650.
• Max Life pulls out of IDBI Federal Life Insurance deal ending the overhang.
• High probability for Max-Axis deal to extend beyond March 2021.
• Expect positive near-to-medium term stock performance.

Nomura on Dr. Reddy’s

• Maintained ‘Buy’ with a price target of Rs 2,704.
• gSuboxone launch in the near term likely.
• Earnings impact to depend on competitive landscape; Likely to be limited for three years.
• Expect annualised EPS impact at Rs 62.5 with no additional generics.
• With competition intensifying EPS contribution to fall to Rs 2.5.

Kotak on Axis Bank

• Maintained ‘Add’ with a price target of Rs 600.
• Weakness on most metrics; Underwriting gradually improving.
• Beginning FY19 with lot more optimism than in past four years.
• Key issue for the current financial year would be the change in senior management.

Kotak on Tata Steel

• Maintained ‘Add’; cut price target to Rs 710 from Rs 750.
• Acquisitions and European JV to result in major shift in financials.
• India acquisitions—leverage high, but manageable.
• Expect net-debt/EBITDA to drop to 3.7 times in two years.
• Price target cut as Bhushan financials incorporated.

• Rana Kapoor is seeking shareholder approval for another term as Yes Bank CEO.
• Jaguar Land Rover preps for electric era. Here’s how
• There is good news (sort of) for Bharti Airtel.
• Trump is about to see whether his bet on North Korea will pay off.
• Ocean’s 8 collected $41.5 million in North American ticket sales pushing Solo: A Star Wars Storyinto second place.
• Your pricier cup of Starbucks is small drop in inflation bucket.
• These are the 100 best restaurants in the U.K.

• RITES Ltd.'s Rs 466.2 crore IPO to open on June 20 with a price band of Rs 180-185. The government is planning to divest 12.6 percent equity valuing the company at Rs 3,700 crore.

• Infosys voluntarily delists its ADR from Euronext Paris, London due to low trading volumes.
• Fortis Healthcare board defers financial results to June 25.
• Tata Motors: JLR moves production of Discovery from Solihull plant to Slovakia.
• Usha Martin mulls sale of steel business to deleverage balance sheet.
• Hotel Leela Venture to issue 125 crore shares to JM Financial ARC.
• DCB Bank increases MCLR by 10 basis points across all tenures.
• Orchid Pharma received EU GMPS certificate on inspection of its API plant in Tamil Nadu.
• DCM Shriram mulls share buy back option.
• KDDL to raise FPI/FII Limit up to 49 percent and to raise Rs 30 crore via equity.
• Welspun Corp received order for 33 KMT of pipes for oil and gas project in America.
• Strides Shasun received U.S. FDA approval for generic Tamiflu capsules for the U.S. market.
• Data of submission of binding bids for Fortis Healthcare extended to June 28.
• ICICI Bank says there is no specific communication received from U.S. SEC upto this date in relation to the allegations in respect of Chanda Kochhar.

• 5:30pm: India May retail inflation, estimate 4.9 percent, prior 4.58 percent.
• 5:30pm: India April Industrial Production YoY, estimate 5.9 percent, prior 4.4 percent.

Petrol and diesel prices were cut by 15 paise and 11 paise respectively today. Petrol now costs Rs 84.26 in Mumbai and diesel costs Rs 72.24, according to the data available on Indian Oil Corporation Ltd.’s website.

• West Texas Intermediate crude rose less than 0.05 percent to $66.13 a barrel.
• Brent crude traded little changed at $76.47 a barrel.
• Gold declined 0.2 percent to $1,297.57 an ounce.
• LME copper fell 0.7 percent to $7,202.00 per metric ton.
• Aluminium traded 0.3 percent higher at $2,308 per MT.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 10,774.50 as of 8:15 a.m.

Asian stocks pushed higher and the dollar rose as investors looked beyond weekend trade ructions to focus on the three major central bank meetings this week and the outcome of Tuesday’s historic summit between President Donald Trump and North Korea’s leader.

Here are some key events coming up this week:

• President Donald Trump and North Korean leader Kim Jong Un meet for an historic summit in Singapore Tuesday, which will be late Monday in New York.
• U.K. Prime Minister Theresa May faces votes that could derail her Brexit policy, also Tuesday.
• The Federal Reserve is expected to raise interest rates Wednesday as the U.S. economy remains solid.
• The European Central Bank rates decision comes Thursday with a briefing from President Mario Draghi.
• The Bank of Japan June monetary policy decision and news conference is Friday.
• FIFA expects more than 3 billion viewers for the World Cup that begins this week in Russia.