Sensex Clocks Best Weekly Gain Since Jan; Nifty Ends Above 11,000

Indian equity benchmark Sensex registered its best weekly gains in nearly six months, while the NSE Nifty 50 Index clocked its best weekly gains in over a year.

The 31-stock Index closed a little changed at 36,541.63, while the 50-stock Index closed above 11,000.

The market breadth tilted in favour of sellers. Nine out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty Media Index’s 3.5 percent decline. On the flipside, NSE Nifty IT Index was the top sectoral gainer, up 0.2 percent.

• Prestige Estates has 37 lakh shares change hands in a block on BSE. Stock down 3.8 percent at Rs 263.20.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of multiplex operators fell after media reports suggested that a minister in Maharashtra government has said that people can carry their own food to cinema halls starting August 1.

• PVR falls 11 percent to Rs 1,337
• Inox Leisure declines Rs 238
• Eros International drops 4.6 percent
• Mukta Arts slips 5 percent

European stocks climbed and U.S. index futures pointed to a higher open as trade tensions appeared to ease after China refrained from detailing retaliation plans against the Trump administration’s threatened tariffs. The pound fell as the Brexit quagmire deepened.

Shares of the Mumbai-based household products maker rose as much as 4.37 percent, the most in over two months, to record high of Rs 366.25.

Price of its key raw material copra have fallen 20 percent from February.

• Indian equity benchmarks were trading in a narrow range as gains in Infosys, Reliance Industries and HDFC Bank were offset by losses in UTC, Axis Bank and State Bank of India.
• The S&P BSE Sensex rose 0.15 percent to 36,605 and the NSE Nifty 50 index rose 0.1 percent to 11,033.
• The small- and mid-cap shares were underperforming larger peers as the S&P BSE SmallCap index fell 1 percent and the S&P BSE MidCap index declined 0.5 percent.
• The overall breadth was negative as 1,621 shares were declining while 759 were advancing on the BSE.

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Shares of the Hyderabad-based IT company fell as much as 6.3 percent to Rs 695 after its net profit declined in June quarter.

Key earnings highlights:

• Revenue up 1.7 percent at Rs 1,080 crore.
• EBIT down 14.3 percent at Rs 95 crore.
• Operating margin at 8.8 percent versus 10.4 percent.
• Net profit down 30.3 percent at Rs 82.5 crore.

Shares of the Mumbai-based automobile company recovered from intraday low levels and rose over a percent to Rs 268 after it commented upon expansion plans for its luxury car unit Jaguar Land Rover (JLR) in its FY18 annual report.

Tata Motors in annual report said:

• JLR working on further expanding China manufacturing via joint venture
• JLR to expand portfolio to 16 brands by FY22-24
• JLR to offer electric option for all vehicles from 2020

• GE Power India: The Noida-based power generation and energy delivery services company fell as much as 1 percent to Rs 742. Trading volume was 33 times its 20-day average.
• Dishman Carbogen: The Ahmedabad-based chemical company fell as much as 1.8 percent to Rs 265. Trading volume was 17 times its 20-day average.
• Sonata Software: The Bengaluru-based IT company rose as much as 4.3 percent to Rs 329. Trading volume was 15 times its 20-day average.
• ICICI Lombard: The Mumbai-based general insurance company rose as much as 4.6 percent to Rs 744. Trading volume was 11 times its 20-day average.

Fortis Healthcare will remain listed after IHH transaction, IHH CEO Tan See Leng said in a conference call.

Highlights from conference call:

• IHH revenue will increase by 20 percent after Fortis transaction.

Shares of the country's second largest IT company rose as much as 2.88 percent to Rs 1,332 ahead of its June quarter earnings.

Here is what to expect from Infosys in June quarter:

• Revenues in dollar terms seen rising 1.6 percent to $2,850 million versus $2,805 million (QoQ)
• Operating income seen up 5.6 percent at Rs 19,098 crore versus Rs 18,083 crore (QoQ)
• EBIT seen up 1.6 percent at Rs 4,544 crore versus Rs 4,472 crore (QoQ)
• EBIT margins seen at 23.8 percent versus 24.7 percent (QoQ)
• Net profit seen up 2.1 percent at Rs 3,769 crore versus Rs 3,690 crore (QoQ)

Source: Bloomberg

Shares of the Kolkata-based software services company rose as much as 18 percent to Rs 44.90 after it won an order from NPCI.

RS Software emerged as the lowest bidder (L1) for development and operation of platform for EFRM by National Payments Corporation of India, the company said in an exchange notification.

• AU Small Finance bank has 1.2 crore shares or 4.2 percent equity change hands in two blocks on NSE and BSE. Stock down 2.9 percent at Rs 630.

Buyers and sellers were not immediately known

Source: Bloomberg

As Sensex hits record high, Nirav Sheth, head of institutional equities at SBICAP Securities says that markets are likely to remain in a narrow range this year.

Key highlights from his interview with BloombergQuint:

• Difference between Nifty and Nifty Equal Weight evidence of large caps driving the market.
• Not worried about owing Axis Bank and ICICI Bank in the portfolio.
• Still not convinced recovery is broad based.
• Believe full recovery will happen in FY20.
• Banking is the obvious space to be over next couple of years.
• Not betting on rural stocks now.

Shares of Jindal Steel & Power (JSPL) fell as much as 9 percent, the most since Feb. 6 to trade nearly seven-month low at Rs 199.20.

The Delhi court today ordered framing of additional charge for abetment of bribery against Chairman Naveen Jindal in coal scam case, according to a PTI report.

The stock returned 2.8 percent so far this year, compared to 8.2 percent advance in Sensex.

• Indian equity benchmarks came off intraday highs as banking shares like State Bank of India, ICICI Bank and Axis Bank came under selling pressure.
• The S&P BSE Sensex was little changed at 36,561 while the NSE Nifty 50 index fell 0.1 percent or 11 points to 11,012.
• The broader markets came under intense selling pressure as the Nifty Midcap 100 index fell 0.9 percent and the Nifty Smallcap 100 index slumped 1.6 percent.

Nifty 11,000 strike price put option was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 15 percent to Rs 73.30. Over 8.5 lakh shares were added to the open interest which stood at over 35 lakh shares.

Click here to see the complete options chain

Shares of the Haryana-based auto parts maker rose as much as 6.5 percent to Rs 94 aftr IDBI Capital initiated coverage on the stock with a 'nuy' for target price of Rs 107.

IDBI Capital in a note said:

• Demand for parabolic spring to raise due to higher tonnage trucks.
• Believe the opportunity for increase in content per vehicle is enormous.
• Increase in truck axle load by 20-22 percent would help boost aftersales segment.
• M&HCV tonnage growth to outpace volume growth.
• Big push to infrastructure projects – a key demand driver in mid-term.
• Expect revenue, Ebitda and net profit growth rate at 19 percent, 25 percent and 30 percent respectively over the fiscal 2018-2020.

Shares of the Noida-based IT company fell as much as 2.4 percent to Rs 982 after it approved share buyback proposal post market hours yesterday.

The board of HCL Technologies Ltd. approved the proposal to buy back shares worth up to Rs 4,000 crore to reward investors.

HCL Technologies will repurchase 3.6 crore shares, or 2.6 percent of the total paid-up equity, at Rs 1,100 apiece, the information technology company said in an exchange filing. That represents a 9.5 percent premium to Thursday’s closing price.

The 30-shares S&P BSE Sensex rose to a fresh all-time high of 36,738.80 led by gains in Reliance Industries, Infosys, HDFC Bank and Larsen & Toubro.

Shares of the country's second largest hospital chain operator rose as much as 4 percent to Rs 148 after Malaysian healthcare major IHH won bid to acquire Fortis Healthcare.

Fortis Healthcare's board approved IHH Healthcare BHD’s binding offer for Rs 4,000-crore equity infusion, after it outbid the only other competing offer from TGP-backed Manipal Health Enterprises Pvt. Ltd.

As per the approved bid, Fortis Healthcare will issue 23.5 crore shares to IHH Healthcare at Rs 170 per share, Fortis said in an exchange filing.

Indian equity benchmarks edged higher led by Infosys which rose ahead of it June quarter earnings.

The S&P BSE Sensex rose 0.3 percent or 125 points to 36,675 and the NSE Nifty 50 index climbed 0.3 percent or 32 points to 11,055.

Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE IT index's 0.6 percent gain. On the flipside, the S&P BSE Telecom index was top loser, down 0.6 percent.

The broader markets were trading on a muted note as the S&P BSE SmallCap index declined 0.1 percent while the S&P BSE MidCap index was little changed.

• Rupee rose 0.34 percent or 23 paise to 68.34 per dollar against yesterday's close of 68.57.

IDBI Capital on Jamna Auto

• Initiated ‘Buy’ with a price target of Rs 107.
• Demand for parabolic spring to raise due to higher tonnage trucks.
• Believe the opportunity for increase in content per vehicle is enormous.
• Increase in truck axle load by 20-22 percent would help boost aftersales segment.
• M&HCV tonnage growth to outpace volume growth.
• Big push to infrastructure projects – a key demand driver in mid-term.
• Expect revenue, Ebitda and net profit growth rate at 19 percent, 25 percent and 30 percent respectively over the fiscal 2018-2020.

HDFC Securities on Radico Khaitan

• Initiated ‘Buy’ with a price target of Rs 473.
• Attractive play in the IMFL space.
• Strong presence in fast growing and niche segment.
• Captive ENA manufacturing provides raw material tailwinds.
• Deleveraging to further boost profitability.
• Expect revenue, Ebitda and net profit growth rate at 10 percent, 14 percent and 24 percent respectively over the fiscal 2018-2020.

HDFC Securities on United Spirits

• Maintained ‘Sell’ with a price target of Rs 570.
• Competitive intensity on rise.
• Potential increase in excise duty in Maharashtra.
• Volume growth and premiumisation weak in Karnataka.
• See strong earnings CAGR of 18 percent over the fiscal 2018-2020.
• Rich valuations and regulatory adversity leave limited upsides.

Kotak Securities on Balkrishna Industries

• Downgraded to ‘Reduce’ from ‘Buy’; maintained price target at Rs 1,260.
• Like Co.'s competitive positioning in global off highway tire industry.
• Believe valuations are fair and do not offer much upside from current levels.
• Expect 24 percent EPS CAGR over fiscal 2018-2021 led by volume growth and price hikes.

Edelweiss on Cyient

• Maintained ‘Buy’; hiked price target to Rs 913 from Rs 785.
• June quarter results miss estimates due to anticipated slowdown in certain projects.
• 2018-19 guidance maintained for revenue and profitability amid robust demand outlook.
• Expect dollar revenue growth rate of 11.9 percent over the fiscal 2018-2020, led by double-digit growth in A&D, turnaround in industrial and utilities.

Macquarie on Zee Entertainment

• Maintained ‘Outperform’; cut price target to Rs 615 from Rs 675.
• Zee5 is relying on original content with right pricing.
• Marketing intensity to pick starting July as it is launched in APAC and Europe.
• Expect Zee5 to almost breakeven in the financial year-ending March 2021.
• Expect valuations to trade lower till Zee remains unhurt from digital disruption.
• Expect continued thrust towards investment in original digital content for next 10 years.

Deutsche Bank on Indian IT Services

• Skills and not scale to drive next leg of growth.
• Rupee depreciation is a tactical tailwind.
• Sector-wide growth outlook remains muted.
• Acquisitions, platforms and partnerships hold the key to overcoming challenges.
• TCS: Initiated ‘Hold’ with a price target of Rs 1,740.
• Infosys: Initiated ‘Buy’ with a price target of Rs 1,495.
• HCL Tech: Initiated ‘Buy’ with a price target of Rs 1,070.

Who’s Meeting Whom

• Gabriel India to meet investors on July 13.
• Endurance Technologies to meet Cartica Management on July 13.
• HEG to meet investors on July 16.

Insider Trades

• Man Infra promoter group Vatsal P Shah acquired 16,000 shares on July 11.
• JSW Steel promoter group acquired 16.65 lakh shares from July 9-11.
• Singer India promoter sold 1.33 lakh shares from July 10-11.

(As reported on July 12)

Bulk Deals

Coffee Day Enterprises

• ICICI Lombard General Insurance Co Ltd sold 17.7 lakh shares or 0.84 percent equity at Rs 270 each.

Ruchi Soya Industries

• JM Financial Products sold 18 lakh shares or 0.54 percent equity at Rs 11.37 each.

Gayatri Projects

• Goldman Sachs Singapore Pvt acquired 25 lakh shares or 1.34 percent equity at Rs 180 each.
• Next Orbit Ventures Fund sold 25 lakh shares or 1.34 percent equity at Rs 180 each.

Nath Bio-Genes

• Goldman Sachs Singapore Pvt acquired 5 lakh shares or 2.63 percent equity at Rs 480 each.
• Mentor Capital Ltd sold 5 lakh shares or 2.63 percent equity at Rs 480 each.

F&O Cues

• Nifty July futures ended at 11,016.2, with a discount of 7 points versus 9.7 points
• July series: Nifty open interest up 3.5 percent, Bank Nifty open interest unchanged
• India VIX ended at 12.5, down 2 percent
• Maximum open interest for July series call at 11,000 strike price call option, Open interest at 38.3 lakh shares, down 11 percent.
• Maximum open interest for July series put at 10,600 strike price put option. Open interest at 51.5 lakh shares, down 2 percent.

Earnings To Watch

• Infosys
• 3i Infotech
• Bajaj Corp

Earnings Reaction To Watch

Cyient Ltd. (Q1 FY18, QoQ)

• Revenue up 1.7 percent at Rs 1,080 crore.
• EBIT down 14.3 percent at Rs 95 crore.
• Operating margin at 8.8 percent versus 10.4 percent.
• Net profit down 30.3 percent at Rs 82.5 crore.

• HCL Technologies board has approved buyback of up to 3.64 crore (2.61 percent) shares worth Rs 4,000 crore at Rs 1,100 each.
• NCLT approved demerger of Tata Communications and Hemisphere Properties India.
• HIL acquired European flooring solutions company Parador for 72.3 million euros.
• Vakrangee entered alliance with Reliance Nippon Life Asset Management to offer mutual fund distribution.
• SBI clarified that a 100 percent provision has been made for the Topworth Group case.
• Allahabad Bank plans to divest stake in joint ventures, associates and sell some immovable properties.
• Hindustan Oil Exploration Co. completed drilling of two wells.
• HCC failed to provide resolution timeframe for Lavasa Project (Financial Express).
• Avendus- KKR Frontrunner to buy IDFC MF (Economic Times).
• HDFC’s board to meet on July 17 to consider and approve issue price of preferential allotment.
• Varroc Engineering to set up new facilities at Chennai (India) and Poland for manufacturing exterior lighting components.
• Avanti Feeds: Thai Union Group committed to remain invested. Will keep shareholding between 20 percent to 25 percent.

• Race for Fortis: IHH Healthcare beats Manipal Health
• Oil celebrates 10th anniversary of record high with huge plunge
• Fed’s Powell says U.S. economy in ‘good place’ but trade is a risk
• No buyers for Sahara’s Aamby Valley properties, SEBI tells Supreme Court
• SEBI bars stock brokers from accepting cash from clients
• RBI cautions on fiscal risks emerging from states going to the polls
• Will RBI’s public credit registry disrupt India’s successful credit bureaus?
• Trump deals double blow to Theresa May
• Idea must backstop $2-billion spectrum liabilities for Vodafone merger
• A former insider’s account of the Ambani digital dream

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.2 percent to 11,045 as of 8:10 a.m.

Asian stocks tracked gains in U.S. equities and the offshore yuan advanced as China refrained from detailing retaliation plans against threatened U.S. tariff increases. The pound slipped on the latest woes from the Brexit quagmire.

Shares in Japan, Hong Kong and South Korea all rose Friday, while Chinese and Australian stocks dipped.

Currencies

• The Japanese yen slipped 0.1 percent to 112.62 per dollar.
• The offshore yuan was up 0.3 percent at 6.6725.
• The Bloomberg Dollar Spot Index added 0.1 percent.
• The euro was little changed at $1.1673.
• The British pound declined 0.1 percent to $1.3188.

Commodities

• West Texas Intermediate crude dropped 0.2 percent to $70.21 a barrel.
• Gold was little changed at $1,247.98 per ounce.

These are some events to look out for the remainder of this week:

• Earnings season gets into gear with JPMorgan Chase & Co. and Citigroup Inc. among the largest companies due to give results, as well as India’s Infosys Ltd.
• Chinese trade data due Friday will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said.