Signage for the CNX Nifty Index is displayed in the atrium of the National Stock Exchange of India (NSE) building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Halt Two-Day Decline Led By Reliance

Closing Bell: Benchmarks Snap Two-Day Decline

Indian equity benchmarks snapped their two-day losing streak led by Reliance Industries, which rose the most in two months, to a fresh record high. Private sector lenders like HDFC Bank, Kotak Mahindra Bank and IndusInd Bank also added to the gains.

The S&P BSE Sensex rose 0.74 percent or 261 points to 35,547 and the NSE Nifty 50 index rose 0.58 percent or 62 points to 10,772.

Twelve out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Bankex index's 1.04 percent gain. On the other hand, the S&P BSE FMCG index was top loser, down 0.36 percent.

Find Out All That You Missed During The Day In Countdown

Fab Four Stocks Of The Day

  • CG Power and Industrial Solutions: The Mumbai-based electrical power equipment maker snapped its three-day losing streak and rose as much as 4.8 percent to Rs 53.60. Kotak has upgraded the stock to ‘buy’ from ‘reduce’ and raised its target price to Rs 65, indicating a 25 percent upside.
  • Unichem Labs: The Mumbai-based drugmaker rose as much as 9.70 percent, the most in over seven months, to Rs 259.50 after it entered into an agreement with Eli Lilly for erectile dysfunction drug.
  • Wheels India: The Chennai-based wheel maker rose as much as 13 percent to record high of Rs 2,694 after it informed exchanges that its board will consider bonus issue of shares on June 22.
  • Greaves Cotton: The Mumbai-based auto parts maker snapped its two-day losing streak and rose as much as 5.3 percent, the most in over a month, to Rs 136.90 on heavy volumes. Trading volume was 6.2 times its 20-day average.

Jai Corp Rallies On Heavy Volumes

Shares of the Maharashtra-based polyethylene fabric manufacturer rose 13.11 percent to Rs 156.15 on the back of heavy volumes.

Trading volume was 5-times its 20-day average.

Unichem Labs Surges On Settlement With Eli Lilly Over Erectile Dysfunction Drug

Shares of the Mumbai-based drugmaker rose as much as 9.70 percent to Rs 259.50 after it entered into an agreement with Eli Lilly for erectile dysfunction drug.

Unichem Labs has entered into an agreement with Eli Lilly and ICOS Corporation to resolve their patent litigation in the United States regarding Abbreviated New Drug Application for generic tadalafil, the company said in an exchange filing.

The company expects to launch generic tadalafil in the U.S. on or not before March 26, 2019 under certain circumstances, the exchange filing added.

No Pure GST On Petrol, Diesel; 28% Tax Plus VAT On Anvil Under GST

A peak tax rate of 28 percent plus states levying some amount of local sales tax or VAT on petrol and diesel is likely to be the tax structure when the two auto fuels are covered under the GST regime, Press Trust of India reported citing a top government official said.

The peak GST rate plus VAT will be equal to the present tax incidence, which is made up of excise duty, levied by the central government, and VAT charged by the states.

European Stocks Climb As Trade Angst Eases

European stocks rose with U.S. futures, tracking gains in Asia, as the panic surrounding a potential global trade war showed signs of easing. Treasury yields and the dollar stabilized, and oil edged higher.

Aviation Stocks Fall As Passenger Traffic Growth Slows

Shares of aviation companies fell after airline passenger traffic in India rose at the slowest pace in four years in the usually strong holiday month of May.

At 12 million passengers, growth stood at 16.5 percent over the same month last year, according to data released by the Director General of Civil Aviation.

  • InterGlobe Aviation fell 5.6 percent
  • SpiceJet declined 1 percent
  • Jet Airways slipped 2 percent

Market Check: Reliance Industries, HDFC Twins Fuel 200-Point Sensex Rally

  • Indian equity benchmarks snapped two-day losing streak led by Reliance Industries, HDFC twins and Axis Bank.
  • The S&P BSE Sensex rose 0.64 percent or 230 points to 35,516 and the NSE Nifty 50 index climbed 0.2 percent or 55 points to 10,766.
  • Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy index's 1 percent gain. On the other hand, the S&P BSE Oil & Gas index was top loser, down 0.4 percent.
  • The overall market breadth was positive as 1,301 shares were advancing while 1,097 were declining on the BSE.

Reliance Industries Rises Most In Nearly Two Months To Record High

Shares of the Mukesh Ambani-led oil-to-telecom conglomerate rose as much as 2.58 percent, the most since April 27, to record high of Rs 1,021.

The stock rose 13 times in past 15 sessions.

Tree House Education Surges After Arm Sells Land Parcel In Thane

Shares of the Mumbai-based kindergarten school operator rose by its daily upper limit of 20 percent, the most in nearly seven months, at Rs 8.37.

Tree House Education's associate company JT infrastructure Pvt. Ltd. sold part of its fixed assets including a land and building situated at Kalyan district in Thane near Mumbai, the company said in a stock exchange notification.

Stocks Moving On Heavy Volumes

MAS Financial Services: The Ahmedabad-based financial service company rose as much as 1.8 percent to Rs 588. Trading volume was 70.3 times its20-day average.

Tata Investment Corp: The Mumbai-based investment firm rose as much as 5.6 percent to Rs 893. Trading volume was 12.4 times its 20-day average.

Mahindra CIE Automotive: The Mumbai-based auto parts maker fell as much as 1.22 percent to Rs 268. Trading volume was 6 times its 20-day average.

JP Associates: The Noida-based infrastructure developer rose as much as 5.36 percent to Rs 17.70. Trading volume was 5.7 times its 20-day average.

Sharda Cropchem Rises On Fund Raising Plan

Shares of the Mumbai-based crop protection company rose as much as 4.2 percent to Rs 402.

Sharda Cropchem informed exchanges that its board will meet on June 25 to discuss fund raising plan.

Vakrangee Hits Upper Limit For The Ninth Time In 10 Days

Shares of the Mumbai-based e-governance service provider were locked in a 5 percent upper circuit for ninth time in last ten sessions.

The stock had in past 10 sessions risen 46.84 percent.

InterGlobe Aviation Falls; Citi Maintains Sell, Lowers Target Price

Shares of the Gurugram-based operator of budget carrier IndiGo fell as much as 4.45 percent to Rs 1,174.

International brokerage firm Citi has maintained its 'sell' call on InterGlobe Aviation and lowered its target price to Rs 1,070 from Rs 1,240.

Citi in a note said:

  • Elevated fuel costs only partially offset by higher yields.
  • Current quarter’s margins could be under pressure.
  • Pace of air traffic growth was lower; Too early to conclude that demand is slowing down.

Kansai Nerolac Falls For Third Day; Company To Acquire Bangladeshi Paint Maker

Shares of the Mumbai-based paint maker fell as much as 2.56 percent to Rs 472.65. The stock fell for a third day in a row.

Kansai Nerolac has announced plan to acquire 55 percent stake in RAK Paints, Bangladesh for Rs 45.81 crore.

Power Grid Struggles After Block Deal

  • Power Grid has 14.7 lakh shares change hands in a single block. Stock down 0.6 percent to Rs 197.

Buyers and sellers were not immediately known

Source: Bloomberg

Wheels India Surges On Plan To Consider Bonus Issue

Shares of the Chennai-based wheel maker rose as much as 12 percent, the most in a month, to record high of Rs 2,658.95.

Wheels India informed exchanges that its board will meet on June 22 to consider issuing bonus shares.

Cipla Rises On U.S. FDA Nod For Immunodeficiency Drug

Shares of the Mumbai-based drugmaker rose as much as 6.47 percent to Rs 622.75 after U.S. FDA gave its final approval to Efavirenz tablets in strength of 600 mg.

Efavirenz Tablets 600 mg is AB-rated generic therapeutic equivalent version of Bristol-Myers Squibb Pharma Company’s Sustiva which is used in treatment of human immunodeficiency virus type 1 infection, Cipla said in an exchange filing.

According to IMS Health Sustiva had U.S. sales of approximately $105 million for the 12-month period ending in April 2018, the filing added.

Bond Yield Drops On Reserve Bank's OMO Plan

Yield on India's 10-year 7.17 percent bond expiring in January 2028 dropped 4 basis points to 7.82 percent.

The Reserve Bank of India said that it will buyback Rs 10,000 crore of debt via open market operations (OMO) on Thursday, the first such move after May 17.

Opening Bell

Indian equity benchmarks snapped two-day losing streak and edged higher led by pharma stocks.

The S&P BSE Sensex rose 0.35 percent or 124 points to 35,412 and the NSE Nifty 50 index gained 0.37 percent or 39 points to 10,750.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Healthcare index's 0.9 percent gain.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes rose over 0.3 percent each.

Rupee Appreciates Against U.S. Dollar

  • Rupee opens higher at 68.08 per dollar against yesterday's close of 68.38.

Money Market Heads Up: Rupee Seen Trading In Range Of 68-68.50

The RBI said it will buyback Rs 10,000 crore of debt via open market operations on Thursday - the first such OMO operation after May 17. This may help turn the bearish sentiment and see yields declining.

Traders are expecting yield to stay in a range of 7.80-7.85 percent in the session. Market participants will watch out for the RBI's last policy meeting minutes that'll be released after market hours today.

In the currency market, implied opening from the forwards suggest the pair may start trading at 68.05. The rupee fell 0.6 percent to 68.3850 a dollar in the last session. Traders are expecting some consolidation of the recent gains in the greenback. A range of 68-68.50 a dollar is expected in the day.

Brokerage Radar: Voltas Upgraded; Sell On InterGlobe Aviation And More

IIFL on Motherson Sumi

  • Maintained ‘Buy’ with a price target of Rs 425.
  • Expect significant ramp-up over next 12 months from new plants.
  • High level of automation implies significant operating leverage.
  • Significant growth and margin improvement at SMP will be key driver.

Deutsche Bank nn Voltas

  • Upgraded to ‘Hold’ from ‘Buy’, hiked price target to Rs 490 from Rs 470.
  • Stock declined 20 percent in past two months on weak commentary for AC sales.
  • Lira depreciation by 20 percent in a year could benefit the launch of Voltbek.
  • Projects business has started a reversal amid strong orders.
  • Voltas UCP implied valuations now look reasonable at 26 times FY20 PE.

Citi on Interglobe Aviation

  • Maintained ‘Sell’; cut price target to Rs 1,070 from Rs 1,240.
  • Elevated fuel costs only partially offset by higher yields.
  • Current quarter’s margins could be under pressure.
  • Pace of air traffic growth was lower; Too early to conclude that demand is slowing down.

Investec on Cement Sector

  • See East region to emerge as the next South.
  • Election linked demand trends aren’t encouraging.
  • Even with affordable housing demand is insufficient to match supply.
  • Margins to be at risk because of inflation.
  • Prefer large-caps over mid-caps and North/Central, North-East players over South/East.

BQ Heads Up! Who's Meeting Whom And Insider Trades

Who’s Meeting Whom

  • Inox Leisure to meet IIFL on June 21.
  • TVS Motor to meet Goldman Sachs Asset Management on June 22.
  • KDDL to meet BOBCAPS on June 20.
  • Royal Orchid Hotels to meet Canara HSBC Life on June 20.
  • Mercator to meet several fund houses including Motilal Oswal, Tata AMC, HDFC MF on June 20.

Insider Trades

  • Centrum Capital promoter BG Advisory Services LLP acquired 65,000 shares on June 15.
  • Dhunseri Petrochem promoter Dhunseri Investments acquired 38,473 shares from June 15–18.
  • Panama Petrochem promoter acquired 28,273 shares from June 15–18.

(As reported on June 18)

Bulk Deals, Trading Tweaks And F&O Cues To Watch

Bulk Deals

Vaibhav Global

  • Malabar India Fund bought 2.34 lakh shares or 0.7 percent equity at Rs 699.98 each.
  • Panyaek Jainkijmanee sold 2 lakh shares or 0.6 percent equity at Rs 700 each.

Trading Tweaks

  • Essel Propack ex-date for 1:1 bonus.
  • Jubilant Foodworks and Emami last trading day before going ex-bonus.
  • Max Ventures and Industries last trading day before going ex-rights.

F&O Cues

  • Nifty June Futures ended at 10,719.8, with a premium of 9.4 points versus a discount of 10 points.
  • June series: Nifty open interest down 1 percent while Bank Nifty open interest unchanged.
  • India VIX ended at 12.9, up 4.3 percent.
  • Max open interest for June series call at 11,000 strike price call option (open interest at 53.3 lakh shares, up 14 percent).
  • Max open interest for June series put at 10,700 strike price put option (open interest at 48 lakh shares, down 3 percent).

Stocks To Watch: Cipla, State Bank Of India And More

  • State Bank of India won’t be able to merge more banks with self (Bloomberg).
  • UPL-led consortium is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products Corp. (Bloomberg)
  • Cipla gets final approval for generic drug Sustiva.
  • The wealth management arm of IIFL Holdings Ltd raises Rs 745.71 crore from investors including Ward Ferry, Amansa holdings, and HDFC Standard Life.
  • DCM Shriram to buyback 55.55 lakh equity shares at Rs 450 each.
  • Southern Petrochem signs pact with Indian Oil Corporation Ltd. for gas transportation.
  • MPS Ltd. invests Rs 44 crore in the rights issue of subsidiary MPS Interactive Systems.
  • Wheels India to consider bonus issue on June 22.
  • Kansai Nerolac to acquire 55 percent stake in RAK Paints Ltd., Bangladesh for Rs 45.81 crore.
  • SAIL supplies 60,000 tonne steel for railway project in Manipur.

IPO Market Update: RITES, Fine Organics Open Today

  • Rites Ltd. IPO at Rs 180-185 each opens, to close on June 22. (All you need to know)
  • Fine Organic Industries IPO at Rs 780-783 per share opens, to close on June 22 (All you need to know)
  • Bharat-22 ETF second tranche opens, to close June 22

FIFA World Cup Update

  • Japan beat Columbia 2-1
  • Senegal beat Poland 2-1
  • Russia beat Egypt 3-1

Today’s match schedule

  • Portugal versus Morocco at 5:30 PM IST
  • Uruguay versus Saudi Arabia 8:30 PM IST

Also Read: FIFA World Cup: Another Upset! Japan Beat 10-man Colombia 2-1

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.15 percent to 10,710 as of 7:07 a.m.

Asian equity markets opened mixed, as a semblance of calm returned after a ratcheting up of trade tensions between the U.S. and China sparked a global sell-off on Tuesday. The dollar and Treasury yields stabilised.

Japan’s benchmarks fluctuated, while indexes advanced in Australia and South Korea.

Currencies

  • The Bloomberg Dollar Spot Index was flat.
  • The euro was at $1.1580, near a three-week low.
  • The pound bought $1.3167, close to the weakest since November.
  • The yen traded little changed at 110.02 per dollar.

Commodities

  • Gold was steady at $1,273.88 an ounce, near the weakest in six months.
  • West Texas Intermediate crude rose 0.5 percent to $65.37 a barrel.

Here are some key events to watch for this week:

  • Draghi, Reserve Bank of Australia Governor Philip Lowe, Bank of Japan Governor Haruhiko Kuroda, and Fed Chairman Jerome Powell join a panel on central bank policy in Sintra, Portugal, on Wednesday.
  • Thailand, Philippines and Brazil central bank decisions due Wednesday.
  • Bank of England rate decision on Thursday.
  • Also on Thursday: U.S. jobless claims, New Zealand GDP, South Korea export data.
  • The Organization of Petroleum Exporting Countries meets in Vienna on Friday.
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