A pedestrian holding an umbrella walks past an electronic ticker board displaying stock figures at the Bombay Stock Exchange (BSE), which stands partially covered by scaffolding, in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Slide As Caution Prevails In F&O Expiry Week

BQ Live

Closing Bell: Sensex, Nifty End Lower As PSU Banks, Autos Drag

Indian equity benchmarks ended lower ahead of the monthly derivatives expiry later this week.

The S&P BSE Sensex Index ended 0.6 percent lower at 35,470.35 and the NSE Nifty 50 Index ended at 10,762.45, down 0.6 percent.

The market breadth was tilted in favour of sellers. Ten out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty PSU Bank Index's 2.1 percent decline. On the flipside, NSE Nifty IT Index was the only sectoral gainer, up 0.6 percent.

PNB Housing Finance Clarifies On Stake Sale Report, Shares Rally

PNB Housing Finance Ltd. today clarified that the company is not aware of HDFC, Kotak Mahindra Bank eyeing to buy controlling stake in the company, according to its stock exchange notification.

Earlier today, Economic Times reported that HDFC Ltd. and Kotak Mahindra Bank Ltd. are competing for controlling stake in the company, citing people aware of the matter.

Shares of PNB Housing Finance rose as much as 14.1 percent, the most in eight months, to Rs 1,224.

PowerLunch: Crude Falls After Ambiguous OPEC Pact;Idea-Vodafone Merger May Miss Deadline

From Bloomberg: Nifty May Rally Amid Put Selling Before Expiry, Says ICICI Securities

Recent selling in NSE Nifty 50 Index’s 10,800 puts indicate upsides can be expected if the measure holds above 10,800 before Thursday’s expiry, Bloomberg reported quoting ICICI Securities research note, adding that Nifty is likely to settle above 10,750 for June series expiry.

“Unabated foreign investor selling, depreciating currency were the major triggers behind broader market weakness,” the report stated further, Bloomberg said.

Exide Industries To Acquire Tudor India's Gujarat Plant, Shares Gain

Exide Industries today said that it plans to acquire Tudor India's Gujarat plant, according to its stock exchange filing.

Shares of the battery manufacturer rose 0.2 percent to Rs 251.80 as of 1:30 p.m. The stock rose 1.1 percent intraday.

Stocks Moving On Heavy Volumes

Maharashtra Scooters

  • Stock rose as much as 9.8 percent to Rs 3,174.
  • Trading volume was 13.8 times its 20-day average.

KEC International

  • Stock rose as much as 7.5 percent to Rs 358.
  • Trading volume was 2.8 times its 20-day average.

Heritage Foods

  • Stock fell as much as 7.7 percent to Rs 608.
  • Trading volume was 2.4 times its 20-day average.

Shriram City Union Finance

  • Stock fell as much as 4.9 percent to Rs 2,032.35.
  • Trading volume was 1.4 times its 20-day average.

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KRBL Slides After Report On Former Director's Role In AgustaWestland Case

Shares of the food processing company fell as much as 20.3 percent to Rs 373.50.

The company's former director Gautam Khaitan was arrested by the enforcement directorate (ED) in connection with the AgustaWestland case, according to a report by The Sunday Guardian.

KRBL has nothing to do with Augusta case, its Joint Managing Director Anoop Gupta told BloombergQuint in an interaction. “We have provided all the required documents to the ED and have no financial dealings with Gautam Khaitan or any of the associated companies.”

Trading volume was 37.8 times its 20-day average, according to Bloomberg data. KRBL trades at 21.7 times trailing-twelve-month earnings per share and 19 times its estimates for the coming year.

Hot Money: Bajaj Finance At Lifetime High. Will The Rally Continue?

Vedanta Gains The Most In Over Two Months

Shares of the base-metal maker rose as much as 4.8 percent, the most since April 19, to Rs 239.50.

The company said that the acid leak in its copper smelter plant in Tamil Nadu would not have a material impact on the company, according to its statement on the exchanges.

The company also clarified that it had filed a writ before Madras High Court regarding the matter and the same will be heard today.

From Bloomberg: A Bond-Trading Secret That Helped One Indian Bank Beat Its Peers

As the Reserve Bank of India started an easing cycle in 2015, eventually cutting policy rates seven times, bond yields fell to levels not seen since the global financial crisis. Here's how a state-run PSU made money as its peers lost $4.4 billion during India’s worst bond-market rout in two decades.

Idea Cellular Falls On Reports Of Possible Merger Delay

Shares of the telecom operator fell as much as 7.3 percent, the most in over three weeks to Rs 56.15.

The company's merger with Vodafone India Ltd. may not meet the expected June 30 deadline as the Telecom Department is looking to raise a fresh demand of around Rs 4,700 crore, PTI reported quoting a person familiar with the development.

The stock declined 47 percent so far this year compared to 5.4 percent advance in Sensex.

The F&O Show: Decoding Trading Strategies

City Union Bank Gains On Bonus Announcement

Shares of the lender extended gains for the second day and rose as much as 2.7 percent, the most in three weeks to Rs 186.5.

The bank’s board had proposed a bonus of 1:10 and fixed July 11 as the record date, according to its statement on the exchanges.

The stock is 9.9 percent below the Bloomberg consensus one-year price target. The scrip returned 3.4 percent so far this year.

Bajaj Electricals Expects Up To 20% Growth In Consumer Products

Bajaj Electricals Ltd. expects about 15-20 percent growth in consumer products business and 25-30 percent growth from EPC, its Chairman and Managing Director Shekhar Bajaj told BloombergQuint in an interaction.

Key highlights from the conversation:

  • Initially will acquire 80 pecent stake in Nirlep, Will buy remaining 20 percent over next few years.
  • Will execute Rs 3,000-3,500 crore order over next 18 months.
  • Will gain market share from unorganised sector.
  • Very bullish, received 116 outlets under RREP.
  • Have brought down our direct dealing points.
  • We wanted someone who had a strong brand and strong manufacturing.
  • No new major acquisition under consideration.

Symphony Gains After Stake Acquisition

Shares of the electronic-appliances maker extended gains for the fourth day, its longest winning streak since April 3. The stock rose as much as 3.5 percent to Rs 1496.40.

The company had acquired 95 percent stake in Australia-based Climate Technologies for Rs 220 crore, according to its stock exchange notification. The acquisition of Climate Technology will help in distribution of company's products, its Executive Director Nrupesh Shah told BloombergQuint in an interaction.

Trading volume was 13.2 times its 20-day average, Bloomberg data showed.

IndianOpen: Stocks To Watch Out For In Trade

Tech Mahindra Gains After Receiving Merger Approval

Shares of the information technology company extended gains for the second day and rose as much as 1.2 percent to Rs 699.50.

The company received a merger approval with approval Sofgen India from National Company Law Tribunal, according to its stock exchange filing.

The stock trades 16.1 times trailing its 12-month earnings and 16 times its estimates for the coming year, Bloomberg data showed. The scrip returned 39 percent so far this year, compared to 88 percent gain in the past 12 months.

Emkay Global Expects FY19 Earnings Growth Around 10-12%

Emkay Global expects the current financial year’s earnings growth to be around 10-12 percent, its, its research head Dhananjay Sinha told BloombergQuint in an interaction.

Key highlights from the conversation:

  • Expect commodities upcycle, oil to remain on higher side.
  • Expect market share for private banks to increase over next 3-5 years.
  • HDFC Bank can see re-rating, remains top stock pick.

Vakrangee Jumps After Block Deals

Shares of Vakrangee rose hit its daily upper limit for the sixth day, its longest winning streak in over a week. The stock traded at Rs 55.10.

About 24 lakh shares or 0.2 percent equity changed hands in two block deals on National Stock Exchange, Bloomberg data showed. Buyers and sellers were not known immediately.

Biocon Rises After Bengaluru Facility Clears Regulatory Inspection

Shares of the drugmaker rose as much as 2.3 percent to Rs 644.35.

The company said that it received an Establishment Inspection Report (EIR) from the U.S. drug regulator for its manufacturing facility in Bengaluru, according to its stock exchange notification.

The stock trades at 63 times its estimated earnings per share for the coming year, Bloomberg data showed. The scrip rose 99 percent in the past 12 months.

Opening Bell: Sensex, Nifty Swing In Opening Trade

Indian equity benchmarks opened lower, following its Asian peers as investors assessed prospects for continuing trade tensions between U.S. and China.

The S&P BSE Sensex Index fell as much 0.2 percent to 35,632.54 and the NSE Nifty 50 Index fell as much as 0.2 percent to 10,802.35.

The market breadth, however, was tilted in favour of buyers. Seven out of 11 sectoral gauges compiled by BSE fell, led by NSE Nifty Auto Index's 0.5 percent decline. On the flipside, NSE Nifty Pharma Index was the top sectoral gainer, up 0.6 percent.

Money Market Update: Rupee Weakens After Three-Day Rally

The Indian rupee depreciated 0.3 percent to open at $68.03 a dollar, as U.S.-China trade tensions are seen escalating. Yields on 10-year government bonds fell 2 basis points to 7.803.

The U.S. Treasury department is planning curbs on Chinese investment in sensitive U.S. industries. Also, the country is set to impose tariffs on $34 billion of Chinese goods on July 6.

Barclays Plc has become the most bearish forecaster on the Indian rupee, predicting the currency will weaken more than it did during the taper tantrum five years ago.

Globally, China cut its required reserve ratio by half a percentage point for some banks, unlocking about $108 billion of liquidity.

BQ Heads-Up! Who's Buying, Who's Selling? ADRs Performance And Insider Trades

F&O Cues: Recap Of June Series So Far

  • Nifty futures end trade at 10834, premium of 12 points versus 4 points earlier.
  • Nifty futures shed 4.1 lakh shares in open interest.
  • Nifty Bank futures add 2.3 lakh shares in open interest.
  • Max open interest for June series at 11,000 Call (open interest at 47.6 lakh).
  • Max open interest for June series at 10,700 Put (open interest at 57.1 lakh).

F&O Ban

  • In ban: DHFL, JP Associates, Infibeam, CG Power and IDBI Bank.
  • New in ban: IDBI Bank.

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 1.65 from 1.48.
  • Nifty Bank PCR at 1 from 0.81.

Brokerage Radar: Bajaj Electricals, SBI Life. Tata Motors

Edelweiss on Cadila Healthcare

  • Maintained ‘Buy’ with a price target of Rs 510.
  • U.S. would continue to deliver strong growth despite the expected decline in gLialda.
  • Domestic business is likely to get back to double-digit growth after two weak years.
  • Like company for growth outlook, robust branded portfolio and lean regulatory track record.

Edelweiss on Bajaj Electricals

  • Maintained ‘Hold’ with a price target of Rs 555.
  • Management expects the consumer business to stabilise in six months.
  • RREP implementation’s adverse impact is largely behind.
  • Revamping strategy and sharpening focus on in‐house capability.
  • Product ramp up and market share gain key to growth.

HSBC on Tata Power

  • Maintained ‘Hold’ with a price target of Rs 96.
  • Rising coal prices and divestment of non-core assets are positives for the company.
  • Delay in receipt of payment on sale of coal mine Arutmin is a drag.
  • Resolution of its Mundra power project will also remain a drag.
  • Lower earnings by 11 percent and 27 percent for the current and the next financial year.

Nomura On SBI Life

  • Maintained ‘Buy’ with a price target of Rs 880.
  • Risk-reward better now as valuations 20 percent lower than listing.
  • Company will continue to deliver industry-leading growth.
  • Focusing more on protection business where it lagged peers in the previous financial year.
  • Margins to expand to more than 18 percent by March 2020 despite conservative tax changes.

Citi on Crompton Greaves Consumer

  • Maintained ‘Buy’ with a price target of Rs 325.
  • Premium fans continue to drive market share gains in fans.
  • Lighting opportunity continues to be huge.
  • Opportunity to gain share in geysers and coolers.
  • Expect the company to deliver 15 percent sales in the current financial year.

CLSA on Tata Motors

  • Maintained ‘Sell’ with a price target of Rs 295.
  • Big focus on portfolio electrification.
  • Cautious on demand outlook due to diesel uncertainty, Brexit and weak demand cycle in the West.
  • Targeting internal cost controls; cash flow to remain under pressure near-term.
  • Remain negative on JLR given multiple headwinds.

Stories That You Might've Missed

Bulk Deals: Asian Hotels (West), Zee Media Corporation

  • Asian Hotels (West): Promoter Chaman Lal Gupta & Sons HUF sold 1 lakh shares or 0.87 percent equity at Rs 322.98 each.

Zee Media Corporation

  • Promoter Arm Infra and Utilites Pvt sold 50 lakh shares or 1.06 percent equity at Rs 29.5 each.
  • JSGG Infra Developers LLP acquired 50 lakh shares or 1.06 percent equity at Rs 29.5 each.

Stocks To Watch Out For In Today's Trade

  • Dish TV offered public sale of 50 crore shares at Rs 74 each representing 26 percent of emerging voting capital.
  • HDFC, Kotak Mahindra Bank competing for controlling stake in PNB Housing Finance.
  • Symphony acquired 95 percent stake in Australian cooling appliances company for Rs 220 crore.
  • Biocon received EIR from U.S. FDA for sterile drug product facility in Bangalore.
  • Phoenix Mills arm acquired retail development in Indore for Rs 234 crore; to add 1.1 million square feet of retail space.
  • Indian Hotels clarified that it has not acquired The Connaught hotel.
  • Avanti Feeds approved bonus issue of 1:2; record date at June 27.
  • 3M India to acquire 3M Electro & Communication Ind Pvt Ltd. for Rs 590 crore.
  • Alok Industries confirmed that its committee of creditors has approved resolution plan submitted by RIL-JM Financial ARC.
  • Wheels India mull 1:1 bonus share issue.
  • City Union Bank to issue 1:10 bonus shares; record date at July 11.
  • Unichem Lab to launch generic Tadalafil after filing ANDA with U.S. FDA.
  • Power Grid CMD said it will launch electric vehicle charging stations in Hyderabad, Gurugram and Chennai.
  • Fortis Healthcare to announce Q4 and FY18 results today.

Commodity Cues: Brent Crude Fell To $73 A Barrel

  • West Texas Intermediate crude was little changed at $68.60 a barrel after surging nearly 5 percent on Friday.
  • Brent crude fell 2.2 percent lower at $73.92 per barrel.
  • Gold traded at $1,270.74 an ounce.
  • LME copper gained 0.6 percent to $6,829 a metric tonne.
  • Aluminium ended 0.1 percent lower $2,193.25 per metric tonne.

Nifty Futures Indicate Stock Losses; Asian Stocks Drop With U.S. Futures

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, erased early gains traded 0.5 percent lower at 10,784 as of 8 a.m.

Asian stocks fell with U.S. equity-index futures and the yen advanced as investors assessed prospects for continuing trade tensions between U.S. and China. Japanese stocks turned lower as the yen advanced, and shares also declined in South Korea in wake of reports that the Trump administration is preparing new curbs on Chinese investments into the U.S.

Here are the key events to watch out for this week:

  • German Chancellor Angela Merkel holds private talks with leaders of the other parties in her coalition government on refugee policy and euro-area reforms in Berlin Tuesday.
  • New Zealand and Indonesia monetary policy decisions on Thursday.
  • U.S. personal spending probably increased in May for a third month, economists forecast ahead of Friday’s data.
  • China manufacturing and non-manufacturing PMI are due on Saturday.
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