Nifty Ends At Over 1-Month Low Amid Derivatives Expiry

Indian equity benchmarks declined for second straight day as June derivative contracts expired.

Rupee declining to a record low coupled with escalating global trade tensions added to the negative sentiment.

The S&P BSE Sensex fell 0.51 percent or 179 points to 35,038 and the NSE Nifty 50 index tumbled 0.77 percent or 82 points to 10,589.

For the June series, Nifty fell 1.37 percent and Sensex declined 0.81 percent.

In today's trade, seventeen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Oil & Gas index's 2.5 percent drop. On the other hand, the S&P BSE Telecom index was top gainer, up 0.2 percent.

The mid- and small-cap shares underperformed their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes fell over 1.5 percent.

Shares of airline companies fell as much as 6 percent as crude prices rose for a third day in a row.

• Jet Airways fell 6.2 percent
• Interglobe Aviation declined 4.2 percent
• SpiceJet slipped 3.1 percent

• ICICI Bank has 46.9 lakh shares change hands in two blocks. Stock falls 3 percent to Rs 270.

Buyers and sellers were not immediately known

Source: Bloomberg

• Indian equity benchmarks extended losses dragged by financials and energy shares amid derivative expiry for June series.
• The S&P BSE Sensex fell 0.5 percent or 185 points to 35,032 and the NSE Nifty 50 index declined 0.76 percent or 81 points to 10,590.
• All sector gauges barring the Nifty Metal index were trading lower led by the Nifty PSU Bank index's 2 percent drop.
• The mid- and small-cap shares were underperforming larger peers as the Nifty Midcap 100 index declined 1.4 percent and Nifty Smallcap 100 index fell 1.5 percent.
• The overall breadth was extremely bearish as 1,797 shares were declining while 707 were advancing on the BSE.

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European stocks edged lower, following declines across Asia as investors continued coming to grips with the Trump administration’s strategy toward Chinese investments.

Shares of the Anil Ambani-led company rebounded from intraday lows and rose 0.6 percent to Rs 398.

Maharashtra Electricity Regulatory Commission has approved the sale of Reliance Infrastructure’s integrated Mumbai power business to Adani Transmission, the company said in an exchange filing.

Ananth Narayan, money market veteran and professor at S P Jain Institute of Management and Research told BloombergQuint in an interview that ongoing trade wars and rising crude oil are weakening Indian rupee.

Key highlights of the conversation:

• Ongoing trade wars and rising crude oil weakening Indian rupee.
• Weaker rupee may help achieve trade balance, will aid exports.
• Rupee seeing correction confident that RBI will step in.
• Non-deliverable futures markets is still relevant, more offshore buying seen.
• Important to address core issues like capital flows, banking system, exports and imports.
• Extremely high REER of 121 percent led to poor exports last year.

Premium on the Nifty 10,600 strike put option surged 37 percent to Rs 14.95 as June series derivative contracts head for expiry.

Over 10.40 lakh shares were added to the open interest which stood at over 42 lakh shares.

Click here to see the complete options chain

• Chambal Fertilisers has 12.7 lakh shares change hands in a block. Stock up 0.5 percent at Rs 158.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Delhi-based news broadcast company rose by its daily maximum limit of 20 percent for second straight day to Rs 46.55.

The stock has been witnessing buying interest since yesterday after Sebi ordered Vishvapradhan Commercial to make an open offer for NDTV for indirectly acquiring up to 52 percent via a convertible loan of Rs 350 crore in 2009.

Meanwhile, in today's session the stock saw a spike in volumes as trading volume was over 5 times its 20-day average.

Shares of the Mumbai-based real estate company rose as much as 14.71 percent to Rs 95.90 after it acquired seven acres of land at Palaspe in Panvel near Mumbai.

The land is near Mumbai-Goa highway and it is also closer to the upcoming Navi Mumbai International Airport, Arihant Superstructures said in an exchange filing.

• ICICI Bank has 15 lakh shares change hands in a block. Stock down 1.7 percent at Rs 274.

Buyers and sellers were not immediately known

Source: Bloomberg

• Indian equity benchmarks extended losses dragged by financials like ICICI Bank, HDFC, Yes Bank and State Bank of India.
• The S&P BSE Sensex fell 0.24 percent or 83 points to 35,134 and the NSE Nifty 50 index declined 0.38 percent or 41 points to 10,630,
• Nine out of 11 sector gauges compiled by National Stock Exchange were trading lower led by Nifty Financial Service index's 0.6 percent drop. On the other hand, the Nifty Metal index was top gainer, up 0.26 percent.
• The mid- and small-cap shares were underperforming their larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 indexes fell over a percent each.
• The overall market breadth was bearish as 1,556 shares were declining while 729 were advancing on the BSE.

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• Jyothy Labs: The Mumbai-based household products maker rose as much as 1.4 percent to Rs 226.35. Trading volume was 4.4 times its 20-day average.
• Carborundum Universal: The Chennai-based industrial ceramic products maker fell 0.6 percent to Rs 319. Trading volume was 5.8 times its 20-day average.
• Container Corp: The Delhi-based government owned logistics service provider rose 5.3 percent to Rs 638. Trading volume was 3.2 times its 20-day average.
• Srei Infrastructure Finance: The Kolkata-based commercial finance company fell 5 percent to Rs 60.85. Trading volume was 5.9 times its 20-day average.

Nifty 10,700 strike price call option was among the most active option contracts on the National Stock Exchange.

The premium on the contract fell 62 percent to Rs 9.50. Over 18.20 lakh shares were added to the open interest which stood at over 51.35 lakh shares.

Click here to see the complete options chain

Shares of the Chennai-based public sector lender fell as much as 4.4 percent to Rs 332 after it withdrew dividend payment plan of Rs 6 as decided on May 10, the company said in an exchange filing.

Shares of the information technology companies were trading higher after Indian rupee weakened below 69 per dollar for the first time.

The BSE's IT index rose 0.6 percent in an otherwise subdued market as a weak rupee augurs well for revenues of IT companies as they earn sizeable chunk in dollars.

• Gujarat Pipavav Port has 11 lakh shares or 0.5 percent equity change hands in a single block on the BSE. Stock up 3.9 percent at Rs 109.35.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based fitness centre operator rose as much as 4.93 percent to Rs 47.85 a day ahead of its demerged entity Talwalkars Lifestyles gets listed on stock exchanges.

Shares of the Mumbai-based mining company rose as much as 7 percent, the most in over a month, to Rs 22.95.

Gujarat government has awarded a mining lease to the company for exploiting 23 million barrels of oil for a period of 20 years, the company said in an exchange filing.

Shares of the oil refining companies extended fell for second day in a row as crude continues to rise in international markets.

WTI Crude rose 3.2 percent to end at 72.76 per barrel in yesterday's session.

• Bharat Petroleum fell 1.55 percent
• Hindustan Petroleum declined 2.6 percent
• Indian Oil slipped 0.5 percent

Shares of the Noida-based IT company rose over a percent after foreign brokerage firm HSBC upgraded the stock to 'buy' from 'hold' and raised its target price to Rs 1,065 from Rs 1,050.

HSBC in a note said:

• HCLT is set to grow at a slower pace in 2018-19 compared to top four.
• Discount is now too extreme relative to growth differentials to peers.
• HCL is the cheapest stock in the India IT sector across large and mid caps.
• Investor concerned on long-term outlook for Infra services and over recent purchase.

Shares of the Mumbai-based steel maker rose as much as 1.3 percent to Rs 550.25 as Thyssenkrupp and Tata Steel are said close in on a joint venture deal, Reuters reported.

Thyssenkrupp and Tata Steel are nearing a 15 billion euro ($17.4 billion) deal this week to combine their European assets into a global steel giant, Reuters reported citing three unidentified people.

Indian equity benchmarks edged lower as the Indian rupee fell to an all-time low of 69 per dollar as rising oil prices threaten to widen the nation’s current-account deficit and stoke inflation amid escalating trade tensions between U.S. and China.

The S&P BSE Sensex fell 0.13 percent or 45 points to 35,169 and the NSE Nifty 50 index declined 0.26 percent or 27 points to 10,644.

Sixteen out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Oil & Gas index's 1.9 percent drop. On the flipside, the S&P BSE Information Technology index was the top gainer, up 0.9 percent.

The losses were broad-based as the S&P BSE MidCap index fell 0.6 percent and the S&P BSE SmallCap index tumbled 0.9 percent.

Indian rupee weakened further against U.S. dollar to open at record low of 68.91 as rising oil prices threaten to widen the nation’s current-account deficit and stoke inflation.

The rupee fell as much as 0.45 percent or 31 paise to 68.94 per dollar.

Taimur Baig, chief economist at DBS Group Holdings said in an interview that the rupee is set to weaken beyond 71 per dollar by June next year as the country’s current-account deficit widens on rising oil prices.

Khoon Goh, head of Asia research at ANZ Banking Group told BloombergQuint in an interview that rupee is likely to weaken further from current levels however he sees it not weakening below 72 per dollar.

Key highlights of the conversation:

• Expect Rupee to weaken further from the current levels.
• Weakness in Renminbi due to U.S.-China Trade War.
• Weakness largely driven by trade tension and outflows from China.
• Don't see a currency war in the current scenario.
• Expect rupee to breach all-time low of 68.86 per dollar in the near term.
• Don't expect rupee to touch 72 per dollar by year end.

India’s rupee may test its record low set in November 2016 as rising oil prices threaten to widen the nation’s current-account deficit and stoke inflation.

The rupee fell 0.6 percent to 68.63 per dollar on Wednesday, not far from a record low of 68.86. The implied opening from forwards suggest spot may start trading around 68.90 on Thursday, as oil prices are near their highest level since 2014.

Taimur Baig, chief economist at DBS Group Holdings said in an interview that the rupee is set to weaken beyond 71 per dollar by June next year as the country’s current-account deficit widens on rising oil prices.

Meanwhile, bond yields are also likely to climb on fears higher oil prices will drive inflation higher. The 10-year bond yield rose 4 basis points to 7.87 percent, though expectations that the Reserve Bank of India may step in to buy bonds is likely to cap a sharp rise. In overseas markets, treasury yields steadied while the dollar ticked lower.

Goldman Sachs on Fortis Healthcare

• March quarter sales/Ebitda were below expectations.
• Weakness predominantly driven by Hospital business, which saw utilisation decline.
• Focus now shifts to public bidding process.
• Audited results likely in upcoming days.

CLSA on Lemon Tree

• Maintained ‘Buy’ with a price target of Rs 90.
• Improving industry dynamics, operational performance to improve returns.
• Moving towards an asset-light model, as brand gets established in mid-priced segment.
• Highest demand-supply mismatch in mid-priced segment to lead to sustained price hikes.

CLSA on Crompton Greaves Consumer

• Maintained ‘Buy’ with a price target of Rs 305.
• New category additions, increasing distribution reach to drive growth.
• Product innovation and new launches remains key focus area.
• Shift to LED to continue to drive growth in lighting segment.

CLSA on Future Lifestyle

• Maintained ‘Buy’ with a price target of Rs 535.
• Robust expansion plans for Brand Factory and Power brands to drive growth.
• Central stores expected to capture higher share of brands retail in India.
• L Catterton Asia to acquire approximately 10 percent stake through a mix of preferential issue and secondary purchase.

Kotak on Colgate

• Maintained ‘Add’ with a price target of Rs 1,300.
• Company is not regaining any market share lost to Patanjali so far.
• Underlying category volume growth is inching up but at a slow pace.
• Price hikes to take care of input cost inflation trends.
• Expect higher advertising investment on flagship brand in naturals segment.

HSBC on HCL Tech

• Upgraded to ‘Buy’ from ‘Hold’; raised price target to Rs 1,065 from Rs 1,050.
• HCLT is set to grow at a slower pace in 2018-19 compared to top four.
• Discount is now too extreme relative to growth differentials to peers.
• HCL is the cheapest stock in the India IT sector across large and mid caps.
• Investor concerned on long-term outlook for Infra services and over recent purchase.

Motilal Oswal on Tata Communications

• Maintained ‘Buy’ with a price target of Rs 730.
• Strong order funnel to drive growth.
• Expect earnings to start improving from July.
• New growth ventures – ‘innovation business’ to remain slow starter.
• ATM business revenue/Ebitda to improve.

Who's Meeting Whom

• Eicher Motors to meet White Oak on June 28 and Manulife Asset Management on June 29.
• Endurance Technologies to meet Axis Mutual Fund, Motilal Oswal Mutual Fund and other investors on June 28.
• Aster DM Healthcare to meet investors on June 29.

Insider Trades

• Cosmo Films promoter acquired 15,000 shares on from June 25-26.
• Visaka Industries promoter group acquired 1,700 shares on June 25.
• Man Industries promoter Rameshchandra Mansukhani acquired 17,000 shares on June 26.
• Trident Ltd promoter acquired 39,000 shares on June 26.

(As reported on June 27)

Bulk Deals

Zee Media Corporation

• Promoter Arm Infra and Utilities sold 48.36 lakh shares or 1.03 percent equity at Rs 26.1 each.
• JSGG Infra Developers LLP acquired 48.36 lakh shares or 1.03 percent equity at Rs 26.1 each.

Tasty Bite Eatables

• Jupiter India acquired 30,000 shares or 1.17 percent equity at Rs 7,485 each.

Trading Tweaks

• Nila Infrastructures circuit filter revised to 20 percent.
• Jyothy Laboratories ex-date for 1:1 bonus.
• Prabhat Telecoms (India) Limited ex-date for 1:5 bonus.
• Gujarat Automotive Gears name changed to HIM Teknoforge Limited.

F&O Cues

• Nifty futures ended at 10,673 with a premium of 2 points.
• Nifty futures add 8.8 lakh shares in open interest.
• Nifty Bank futures shed 90,000 shares in open interest (OI).
• Max open interest for June series call at 10,800 strike price call option, OI at 55.7 lakh shares.
• Max open interest for June series put at 10,600 strike price put option, OI at 31.6 lakh shares.

• Thyssenkrupp, Tata Steel are said to close in on a JV deal (Reuters)
• Fortis Healthcare to extend deadline for submission of bids.
• Bank of Maharashtra’s exposure to DS Kulkarni at Rs 96.52 crore.
• Karnataka Bank hikes deposit interest rates by 10 basis points to 7.35 percent across various tenors.
• Mercator arm gets mining lease in Gujarat for 20 years; 23 million barrels of oil to be exploited.
• Talwalkars Lifestyles to be listed on both exchanges from June 29.
• GMR Infrastructure declared as selected bidder for development of a commercial port located Vizag.

Varroc Engineering's Rs 1,950 crore IPO continues on third day. Issue subscribed 1.01 times on second day.

FIFA World Cup Update

• South Korea beats Germany 2-0
• Sweden beats Mexico 3-0
• Switzerland draws with Costa Rica 2-2
• Brazil beats Serbia 2-0

Today’s Match Schedule

• Senegal versus Colombia at 7:30 PM IST
• Japan versus Poland at 7:30 PM IST
• England versus Belgium at 11:30 PM IST
• Panama versus Tunisia at 11:30 PM IST

More Talking Points

• Reliance Jio makes big inroads in rural India
• Trump’s trade war pushes China closer to old foe India
• Is Modicare too cheap to provide quality healthcare?
• Government to sell Air India’s iconic Mumbai building to JNPT
• One year of GST: Some hits, a few misses
• Disney wins U.S. approval for Fox deal in blow to Comcast
• Exide and Leclanche form venture to make batteries for India
• Kavanaugh emerges as key contender for Trump Supreme Court pick
• Bank of Maharashtra CEO gets bail in DS Kulkarni Developers’ cheating case
• Hidden agenda will be revealed if ED, CBI object to asset sale proposal, says Mallya

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.22 percent to 10,649 as of 7:13 a.m.

Asian stocks fell Thursday and the yen pushed higher as traders remained skeptical about the Trump administration’s announcement of less harsh measures on Chinese investments. Treasury yields steadied and the dollar pared gains.

Stocks declined in Japan, Australia and South Korea as the S&P 500 Index reversed gains to close lower after White House economic adviser Larry Kudlow said the decision not to adopt a more stringent approach on trade did not represent a softer stance on China.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1 percent after advancing 0.6 percent to the highest in a week.
• The Japanese yen rose 0.2 percent to 110.06 per dollar.
• The euro traded at $1.1562.
• The pound was at $1.3114, near the weakest in more than seven months.

Commodities

• Gold gained 0.1 percent to $1,253.66 an ounce.
• West Texas Intermediate crude declined 0.4 percent to $72.50 a barrel in New York after rallying 3.2 percent.

These are key events coming up for the remainder of this week:

• Indonesia monetary policy decision 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.