Sensex, Nifty Post Weekly Gains As Traders Shift Focus To Earnings

Indian equity benchmarks rebounded from losses in the previous session led by Reliance Industries, TCS and Hero MotoCorp. However, a late selloff in HDFC twins, ICICI Bank and Sun Pharma capped gains.

The S&P BSE Sensex rose 0.23 percent or 83 points to 35,658 and the NSE Nifty 50 index climbed 0.2 percent or 23 points to 10,773.

For the week, Sensex rose 0.54 percent and the Nifty advanced 0.66 percent.

Shares of cable television service providers fell for a second day in a row a day after Reliance Industries chairman Mukesh Ambani announced launch of JioGigaFiber a fiber-to-home broadband network across India.

• Hathway Cable & Datacom fell 11 percent
• Den Networks declined 9 percent
• GTPL Hathway tumbled 4.5 percent
• Siti Networks slumped 4.5 percent

European stocks trimmed gains and U.S. equity futures slipped as sentiment remained shaky after China put in place its response to well-telegraphed U.S. trade tariffs. The dollar edged lower and Treasuries were steady.

Shares of the Bengaluru-based defence equipment maker rose as much as 9.1 percent, its biggest intraday gain in over eight months, to Rs 111.55 on heavy volumes.

Trading volume was 3.6 times its 20-day average.

• JK Cement: The Kanpur-based cement maker fell as much as 0.6 percent to Rs 851.05. trading volume was 41.2 times its 20-day average.
• Johnson Control-Hitatchi Air Conditioning: The Mehsana-based air conditioner maker fell as much as 7.6 percent to Rs 2,051. Trading volume was 20.9 times its 20-day average.
• AU Small Finance Bank: The Jaipur-based private sector lender rose 1 percent to Rs 675.90. Trading volume was 8.6 times its 20-day average.
• Supreme Industries: The Mumbai-based PVC pipe maker rose as much as 3.8 percent to Rs 1,144. Trading volume was 5.6 times.

Shares of the Hyderabad-based IT services company rose as much as 1.5 percent to Rs 735.

ICICI Securities has upgraded the stock to add for target price of Rs 784.

The stock had 23 buy, six hold and zero sell ratings previously, according to Bloomberg data.

• Indian equity benchmarks held on to gains led by auto, capital goods and energy shares.
• The S&P BSE Sensex rose 0.36 percent or 127 points to 35,701 and the NSE Nifty 50 index climbed 0.33 percent or 36 points to 10,786.
• Thirteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Realty index's 1.6 percent gain. On the flipside, the S&P BSE Consumer Durables index was top loser, down 0.2 percent.
• The overall breadth was marginally positive as 1,322 shares were advancing while 1,065 were declining on the BSE.

Nifty 50 top gainers

• HPCL
• Hero MotoCorp
• Tata Motors
• Bajaj Auto
• Yes Bank

Nifty 50 top losers

• Tech Mahindra
• Zee Entertainment
• Titan
• Bharti Infratel
• ICICI Bank

Tata Motors has 10 lakh shares change hands in a block on the National Stock Exchange. Stock up 4 percent at Rs 271.95.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Delhi-based real estate developer rose as much as 3 percent to Rs 155.35 after it signed an agreement with Blackstone Group to divest 100 percent stake in the business of commercial assets at Ambattur in Chennai.

Indiabulls Real Estate will realise approximately Rs 850 crore via sale of Ambattur commercial assets in Chennai, the company said in a press release.

Nifty 10,800 strike price call was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 24 percent to Rs 113.40. Over 5.16 lakh shares were added to the open interest which stood at over 39 lakh shares.

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Shares of the Mumbai-based company rose as much as 3.77 percent to Rs 162.50 after it won a road construction order.

The company has received order worth Rs 2,004.51 crore for four laning of Sattanathapuram to Nagapattinam section on NH-45A, Welspun Enterprises said in an exchange filing.

Shares of the Delhi-based real estate developer fell as much as 2.86 percent to Rs 4.08 after the Supreme Court ordered to auction three properties at Varanasi and Agra in Uttar Pradesh and Sriperumbudur in Tamil Nadu to refund money to home buyers.

Shares of the Kolkata-based paint maker rose as much as 2.5 percent to Rs 297.50.

Berger Paints has acquired 51 percent stake in a Japan's Rock Paint Company for setting up of a joint venture company in India by name of Berger Rock Paints Private Limited.

The joint venture company shall be engaged in developing, producing and selling automotive refinish paints in India and Nepal, the company said in an exchange filing.

• NTPC has 35 lakh shares change hands in two blocks on NSE and BSE. Stock down 0.7 percent at Rs 151.05.

Buyers and sellers were not immediately known

Source: Bloomberg

Varroc Engineering shares listed at a premium of 5 percent at Rs 1,015 on the National Stock Exchange against its issue price of Rs 967.

Varroc Engineering raised Rs 1,950-crore via share sale through initial public offering between June 26-28. The issue was subscribed 3.57 times on the final day of bidding.

The Kolkata-based steel products maker rose by its daily maximum limit of 10 percent to Rs 3.95 after creditors approved the bid of Liberty House U.K. for the debt-ridden Adhunik Metaliks.

Nearly all—99.94 percent—financial creditors approved the bid, according to the company’s exchange filing.

Shares of the Mumbai-based country liquor maker fell as much as 6.38 percent to Rs 830.20 after it reported June quarter earnings.

Key earnings highlights:

• Revenue up 16.8 percent at Rs 110.4 crore.
• Net profit up 117.6 percent at Rs 22.2 crore.
• Ebitda up 118.6 percent at Rs 33.93 crore.
• Margin at 30.7 percent versus 16.4 percent.
• Other Income at Rs 1 crore versus vs Rs 1.4 crore.

Shares of the Bengaluru-based real estate developer rose as much as 6.3 percent to Rs 507.05 after it said that its sales rose in June quarter.

Sobha's sales volume rose 18 percent to 960,085 square feet valued at Rs 76.24 crore with an average realisation of Rs 7, 941 per square feet, the company said in an exchange filing.

The markets of Bengaluru, Gurugram and Kochi continue to perform well and are ably supported by the Coimbatore and Mysore, the exchange filing added.

Indian equity benchmarks edged lower dragged by metal, telecom and banking shares.

The S&P BSE Sensex fell 24 points to 35,586 and the NSE Nifty 50 index declined 13 points to 10,737.

Eleven out of 19 sector gauges compiled by BSE were trading lower dragged by the S&P BSE Metal index's 0.9 percent drop. On the other hand, the S&P BSE Oil & Gas index was the top gainer, up 0.8 percent.

The mid- and small-cap shares were mixed in early trade as the S&P BSE MidCap index rose 0.17 percent while the S&P BSE SmallCap index was flat.

The rupee fell 8 paise to trade at 69.03 against the U.S. dollar in early trade today on appreciation of the American currency overseas and sustained foreign capital outflows.

This is the rupee's third straight slide, which dealers say is mostly due to demand for the US currency and a lower opening in the domestic equity market.

With the US set to impose tariffs on Chinese goods today, investors feared it could trigger a full scale global trade war.

Yesterday, the rupee had tumbled 21 paise to fresh closing low of 68.95, following a panic demand for the US dollar coupled with savage capital flight worries.

Source: Press Trust of India

Rupee fell the second straight session to hit a fresh closing low of 68.95. Money market veteran and professor at SP Jain Institute of Management and Research, Ananth Narayan told BloombergQuint that rupee is still over valued and current account deficit can be worst in 6 years.

Key highlights of the conversation:

• Expect current account deficit to be worst in 6 years.
• Higher forex reserves to provide cushion for rupee.
• Rupee still overvalued by 15 percent in real effective exchange rate (REER) terms.
• Expect rupee to fall to 71-72 levels versus dollar.
• Quality of fiscal deficit not looking good.
• Fiscal expansion in the short term helpful for smaller companies.
• RBI has intervened in forex markets by $25 billion in the current fiscal.
• Expect RBI to be conservative than more complacent going ahead.

Trade tension is the underlying theme that will dominate today's market.

The U.S. tariffs on Chinese imports kick in from today, marking a new and damaging phase in a conflict that has threatened to curb global growth. China's retaliatory tariffs on U.S. goods will be implemented immediately after.

The rupee continues to trade near a record low and may continue to trade in the red today. Scotiabank expects the currency may rally through 69 to a dollar again, and then head for 70 amid external uncertainty and elevated oil prices.

Appetite for sovereign bonds will be tested with Rs 12,000 crore debt sale.

UBS on HPCL

• Maintained ‘Buy’ with a price target of Rs 460.
• HPCL's share price fall discounts no Ebitda from retail fuels.
• Retail fuel earnings to bounce back with price hikes.
• Believe HPCL's current valuation is undemanding.

IDFC Securities on Media

• JioGigaFiber has the potential to disrupt pricing in the fixed broadband space.
• JioGigaFiber will also provide TV services and might hurt cable, DTH as well.
• Expect commercial launch of JioGigaFiber to begin from the end of this calendar year.
• Expect impact to be more on players who have more exposure to urban India.
• Positive for content owners as consumption is bound to go up.
• Maintain Outperform on Zee Entertainment, Sun TV Network, Dish TV.
• Neutral on Hathway Cable and Underperform on Den Networks.

• Shiram Transport cut to Neutral at IDFC Securities
• Wipro upgraded to Undeperform at CLSA

Who's Meeting Whom

• HPCL to meet Tata AMC Fund, HDFC Life and other investors from July 6-10.
• Cipla to meet L&T Mutual Fund on July 6.

Insider Trades

• Singer India promoter sold 59,000 shares on July 7.
• Omaxe promoter Nakul Goel sold 50,000 shares on July 2.
• Jain Irrigation Systems promoter acquired 1 lakh shares on July 3.

(As reported on July 5)

Bulk Deals

Indiabulls Ventures

• Orient Global Cinnamon Capital sold 1.35 crore shares or 2.59 percent equity at Rs 478 each.
• Jasmine Capital Investments acquired 1.35 crore shares or 2.59 percent equity at Rs 478 each.

Trading Tweaks

• National Steel & Agro Industries and Kiri Industries placed under ASM.
• Akzo Nobel buy back period is between July 6-19.

F&O Cues

• Nifty July Futures ended at 10,751.7, with a premium of 2 points versus 1.4 points.
• July series-Nifty open interest up 1 percent and Bank Nifty open interest down 4 percent.
• India VIX ended at 12.5, down 0.6 percent.
• Max open interest for July series call at 11,000 strike price call option; open interest at 35.8 lakh, down 2 percent.
• Max open interest for July series put at 10,600 strike price put option; open interest at 51.6 lakh, open interest unchanged.

• Bandhan Bank’s Chandra Shekhar Ghosh gets RBI nod to be reappointed as MD & CEO till July 2021.
• Sagar Cements says June cement production up 8.5 percent and cement sales down 0.27 percent.
• Sobha says quarterly new sales volume is up 18 percent and value is up 22 percent.
• Apollo Hospital Enterprises acquires 50 percent stake in Medics International Lifesciences for Rs 91 crore.
• Phoenix Mills arm acquires additional land parcel in Pune for Rs 1.36 crore.
• Berger Paints acquires 51 percent stake in a Japanese paint company, to sell automotive refinish paints in India and Nepal.
• Adhunik Metaliks: Creditors' panel approves resolution plan.
• Muthoot Finance gets RBI approval to acquire shares in Muthoot Money to diversify business.
• Supreme Court orders auction of 3 Unitech properties in UP and TN (PTI)
• Info Edge and Temasek arm to jointly invest Rs 95.3 crore each for 3.5 percent stake in Etechases.
• Gujarat Gas looking to buy GAIL Gas’s stake in VGL for Rs 200-250 crore (Mint)
• Ashoka Buildcon’s shareholders approve issue of bonus shares and fund-raising plans.
• NSE imposed a penalty of Rs 1 crore on Electrosteel Steels Limited for not filing FY18 results.
• Welspun Enterprises won HAM project worth Rs 2,004.51 crore and first year O&M cost of Rs 5 crore from NHAI.

Earnings Reactions To Watch

GM Breweries (Q1, YoY)

• Revenue up 16.8 percent at Rs 110.4 crore.
• Net profit up 117.6 percent at Rs 22.2 crore.
• Ebitda up 118.6 percent at Rs 33.93 crore.
• Margin at 30.7 percent versus 16.4 percent.
• Other Income at Rs 1 crore versus vs Rs 1.4 crore.

Varroc Engineering To List Today

• Varroc Engineering to start trading on BSE/NSE after IPO got 3.6 times demand at Rs 967 a share.

• Trump says China tariffs are just hours away
• Rolls Royce adds to Brexit alarm sounded by U.K. manufacturers
• Mukesh Ambani takes on Amazon, Walmart in India
• Court allows seizure of Vijay Mallya’s U.K. assets
• Who gains from SEBI’s order for an NDTV open offer?
• Saudis lower most oil pricing as Iran taunts Trump on tweets
• Economy is showing no momentum, says CMIE’s Mahesh Vyas
• Thyssenkrupp CEO resigns after activist shareholder pressure
• Fed Minutes reaffirm gradual rate path as trade risks increase
• The bicycle ride that is Delhi
• PNB recovered Rs 8,450 crore, will bounce back in six months: CEO

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.3 percent to 10,722 as of 7:14 a.m.

Asian stocks followed overnight gains in American shares even as U.S.-China trade tensions are about to kick up a gear with the imposition of tariff increases on Friday. The dollar and Treasuries were little changed.

Stocks in Japan, South Korea and Australia all rose, helping the MSCI Asia Pacific Index recoup a sliver of recent losses. Earlier, U.S. equity benchmarks gained as minutes from the June Federal Reserve meeting showed confidence in the economic outlook, despite risks from trade disputes.

Currencies

• The Bloomberg Dollar Spot Index rose less than 0.05 percent.
• The Japanese yen rose 0.1 percent to 110.55 per dollar.
• The euro rose less than 0.05 percent to $1.1694.

Commodities

• West Texas Intermediate crude rose 0.2 percent to $73.09 a barrel.
• Gold fell less than 0.05 percent to $1,257.62 an ounce.
• LME copper dipped 0.6 percent to $6,345.00 per metric ton.

These are some key events for the remainder of this week:

• U.S. jobs report for June. Consensus sees 195,000 new jobs, down from 223,000 in May.
• Also on Friday, the U.S. is scheduled to impose tariffs on $34 billion of Chinese goods and Beijing has said it will slap tariffs on an equal value on U.S. exports including agricultural and auto exports.
• Samsung’s quarterly results, coming later Friday, may take a hit from price drops in NAND memory chips and lower-than-expected sales from the flagship Galaxy S9 smartphone, analysts said.