Sensex, Nifty Resume Rally After Two-Day Blip

Indian equity benchmarks resumed uptrend after a two-day blip, led by Reliance Industries Ltd. and ICICI Bank Ltd.

The S&P BSE Sensex Index closed 0.5 percent higher at 36,519.96 and the NSE Nifty 50 Index closed at 11,008.05, up 0.7 percent.

The market breadth was tilted in favour of buyers. Ten out of 11 sectoral gauges compiled by NSE advanced, led by NSE Nifty PSU Bank Index's 3.9 percent gain. On the flipside, NSE Nifty FMCG Index was the only sectoral loser, down 1 percent.

Shares of Prabhat Dairy Ltd. and Parag Milk Foods Ltd. rallied after the government announces 10 percent duty waiver on dairy exports.

Shares of the engineering company snapped a four-day decline, its longest losing streak in nearly a month. The stock rose as much as 3.4 percent to Rs 63.60.

The company received in-principle approval from the centre for conceptualising, designing and construction of India Pavilion at World Expo-2020, which is scheduled from Oct-2020 to Apr-2021 in Dubai, according to its stock exchange filing. The project is likely to cost about Rs 400 crore.

The Relative Strength Index was 25, indicating that the stock may be oversold. Trading volume was two times its 30-day average.

Shares of the drugmaker rose as much as 3.8 percent to Rs 363.10.

The pharmaceutical company received a green signal from the U.S drug regulator Clindamycin Phosphate Topical Solution, used to treat acne, according to its stock exchange filing.

The stock is 19 percent below the Bloomberg consensus one-year price target.

Shares of the telecom operator swung between gains and losses to trade at Rs 52.45.

About 50 lakh shares changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

European equities traded mixed as traders eyed corporate earnings while trade tensions persisted.

Shares of the non-banking finance company fell as much as 10.1 percent, the most in over five months to Rs 934.

The company's profit jumped 238 percent year-on-year to Rs 20.64 crore in April-June quarter, according to its stock exchange filing.

Key earnings highlights (Q1, YoY):

• Net profit up 238 percent at Rs 20.64 crore.
• NII up 59 percent at Rs 86.8 crore.
• Provisions at Rs 11.8 crore versus Rs 10.6 crore (QoQ), Rs 9.2 crore (YoY).
• GNPA at 4.8 percent versus 4.6 percent (QoQ), 7.1 percent (YoY).
• AUM growth at 52 percent.
• Disbursement growth at 31 percent.

About 11.5 lakh shares of RBL Bank Ltd. changed hands in a single block, according to Bloomberg Data. Buyers and sellers were not known immediately.

Shares of the insurance company rose as much as 5.4 percent, the most since Feb. 01 to trade nearly two-month high at Rs 753.70. The company reported its April-June quarter results today.

Key earnings highlights (Q1, YoY):

• Net profit at Rs 289 crore versus Rs 214 crore.
• Net premium at Rs 2,267.7 crore versus Rs 2,026.7 crore.
• Gross premium at Rs 3,855.7 crore versus Rs 3,394.3 crore.
• Solvency ratio at 2.04 percent versus 2.13 percent.
• Combined ratio at 98.8 percent versus 102.4 percent.
• Expense ratio at 18.9 percent versus 22 percent.

LIC may make an open offer as early as Tuesday to buy the outstanding shares of IDBI Bank from minority shareholders, Bloomberg reported quoting people familiar with the matter.

IDBI’s board will approve a preferential sale of shares to LIC at a meeting on Tuesday, the report added.

Shares of IDBI Bank rose as much as 6.2 percent, to nearly a one-month high at Rs 59.95.

Shares of Indian Oil Corporation Ltd. Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. rallied in today’s trade after global crude oil prices declined. The Brent crude traded near $72 a barrel today, up 0.3 percent.

Shares of the media company fell as much as 5.1 percent to Rs 182.85. The company's net profit fell 72 percent year-on-year to Rs 13.2 crore in April-June quarter.

Key earnings highlights (Q1, YoY):

• Revenue down 4.3 percent at Rs 226.6 crore.
• Net profit down 72.5 percent at Rs 13.2 crore.
• Ebitda down 62 percent at Rs 19.4 crore.
• Margin at 8.6 percent versus 21.5 percent.

Shares of the commercial vehicle maker rose as much as 5.8 percent to Rs 133 after the company's profit jumped 233 percent in June quarter.

Key earnings highlights (Q1, YoY):

• Revenue up 47 percent at Rs 6,250 crore.
• Net profit up 233 percent at Rs 370 crore.
• Ebitda up 111 percent at Rs 648 crore.
• Margins at 10.4 percent versus 7.2 percent.

Goa Carbon Ltd.’s net profit rose 17 percent on a yearly basis to Rs 7 crore during April-June quarter. Shares of the company swung between gains and losses to trade at Rs 590 as of 1:10 p.m.

Key Earnings Highlights (Q1, YoY):

• Revenue up 60 percent at Rs 125 crore.
• Net profit up 17 percent at Rs 7 crore.
• Ebitda up 53 percent at Rs 14.5 crore.
• Margin at 11.6 percent versus 12.2 percent.

Shares of the lender snapped five-day decline, its longest losing streak in nearly two months. The stock rose as much as 13.2 percent, the most since April 2017, to Rs 83.90.

The bank's net profit during April-June period surpassed estimates and asset quality remained stable.

Key earnings highlights (Q1, YoY):

• Net Profit up 25 percent at 262.7 crore.
• NII up 22.4 percent at Rs 980 crore.
• Provisions at Rs 199 crore versus Rs 371 crore (QoQ), Rs 236 crore (YoY).
• GNPA unchanged at 3. percent (QoQ).
• NNPA at 1.72 percent versus 1.69 percent (QoQ).
• Made provision of Rs 14.7 crore towards MTM loss.

Shares of Avanti Feeds Ltd. And Apex Frozen Foods Ltd. declined as the U.S. Department of Commerce finalised the antidumping duty rate on certain frozen warm water shrimp from India, at 1.35 percent.

Nifty 10,900 put option was amongst the most active option contracts on National Stock Exchange.

The premium on the contract fell 24 percent to Rs 49.40. Over 6.5 lakh shares were added to the open interest which stood at over 42 lakh shares.

Shares of Ashok Leyland Ltd., Mahindra & Mahindra Ltd. and Tata Motors Ltd. rallied in today's trade on optimism that the increase on maximum truck axle load won’t impact demand for new vehicles.

“New rules won’t impact demand much as Indian fleet operators tend to overload trucks anyway,” Ankit Merchant, auto analyst at SMC Global Securities, told Bloomberg in an interaction.

The government plans to infuse Rs 2,000 crore in the fraud-hit Punjab National Bank to meet its coupon repayment, Bloomberg reported, quoting people familiar with the matter.

Shares of the state-run lender rose as much as 3.6 percent, the most in over two weeks to Rs 76.50.

The NSE Nifty PSU Bank Index snapped a two-day decline and rose as much as 1.6 percent, led by Union Bank of India. The sector was the top performer.

Shares of the wheel rim maker fluctuated between gains and losses to trade at Rs 1,229 as of 11:05 a.m.

The company received an export order for 18,000 wheels from European aftermarket, according to its stock exchange filing.

The stock rose 7.1 percent so far this year compared to a 7.6 percent advance in the Sensex.

• Indian equity benchmarks traded higher after a volatile open.
• The S&P BSE Sensex Index rose as much as 0.4 percent to 36,470.76 and the NSE Nifty 50 Index rose as much as 0.5 percent to 10,989.65.
• About 889 stocks advanced and 722 shares declined on National Stock Exchange.

Key highlights from the conversation:

• Bio-Technology focus brings MNCs to Indian market.
• Expect warning letter for Alkem Laboratories in near-term.
• IPCA will have nothing to offer even if gets U.S. FDA clearance next year.
• Trade war between U.S. and India, regulatory clearances slowed down pharma sector.

Granulated coffee maker CCL Products India Ltd. expects its average margins to be higher for the current financial year, its Managing Director Challa Srishant told BloombergQuint in an interaction.

Key highlights from the conversation:

• Utilised spare capacity in June quarter for achieving targets.
• Will be focusing on premium products.
• See average margins to be higher for 2018-19.
• Plan to commission new capacity by next year.

Shares of the electronic communication equipment maker snapped its longest losing streak in nearly a month. The stock rose as much as 2.3 percent to Rs 103.35.

The company signed an MoU with Sweden’s SAAB for marketing 3D air surveillance radar, according to its stock exchange notification.

Trading Volume was 2.7 times its 20-day average, Bloomberg data showed. The scrip trades at 14.9 times estimated forward earnings per share compared to 21 times for its two-year historical average.

Shares of the plastic storage maker extended declines for the third straight trading session. The stock fell as much as 7.1 percent to trade at its lowest level at Rs 34.20 after its June quarter's profit declined. The scrip dropped 71.4 percent since its listing on Aug. 8, 2017.

Key earnings highlights (Q1, YoY):

• Revenue down 12.2 percent at Rs 1325.2 crore.
• Net profit down 46.9 percent at Rs 37.5 crore.
• Ebitda down 29.9 percent at Rs 162.8 crore.
• Margin at 12.3 percent versus 15.4 percent.

Shares of the media firm snapped a three-day decline and rose as much as 1.7 percent to Rs 516.80 ahead of its quarterly earnings announcement.

Zee trades at 35.6 times trailing 12-month earnings per share and 30 times its estimates for the coming year, according to Bloomberg data.

Shares of the FMCG major snapped four-day gains and fell as much as 1.4 percent to Rs 1,737.80. The company reported its quarterly results for April-June period yesterday.

Key earnings highlights (Q1, YoY):

• Revenue up 11.2 percent at Rs 9,487 crore.
• Net profit up 19.2 percent at Rs 1,529 crore.
• Ebitda up 20.6 percent at Rs 2,251 crore.
• Margin at 23.7 percent versus 21.9 percent.

Shares of the private sector lender rose snapped a two-day decline and rose as much as 1.5 percent to Rs 263.05.

About 10 lakh shares changed hands in a block deal, according to Bloomberg data. Buyers and sellers were not known immediately.

The stock was the top performer on Sensex and Nifty. The scrip fell 17 percent so far this year and declined 14 percent in the past 12 months.

Indian equity benchmarks fluctuated in the open as gains in ICICI Bank Ltd. and Infosys Ltd. countered losses on HDFC Ltd. and NTPC Ltd.

The S&P BSE Sensex Index traded 0.1 percent lower at 36,293.76 as of 9:20 a.m. while the NSE Nifty 50 Index traded a little changed at 10,930.95.

The market breadth was tilted in favour of sellers. Seven out of 11 secotral gauges compiled by NSE fell, led by NSE Nifty Metal Index's 0.9 percent decline. On the flipside, NSE Nifty FMCG Index was the top sectoral gainer, up 0.5 percent.

Key highlights from the conversation:

• Efficiency of road transport demand will grow as roads infra improves.
• Notification will be valid on new vehicles only.
• No clarity whether older vehicles will be applicable under this notification.

Key highlights from the conversation:

• We will try to protect our margin levels on the marketing side.
• When the prices are on the lower side we don't have the pressure to pass on the full benefits.
• Iran will have around 2-2.5 million barrels in the market. So sanctions by U.S. will also have an impact on the crude prices.
• Fundamentally crude should not be at these levels, they should be lower.
• It is too early to say there would be inventory losses. Crude has been moving erratically these days.
• Sharp movement is likely to have an impact on the inventories of the company.

F&O Cues

• Nifty July futures closed trading at 10,944 premium of 7 points versus 1 point.
• July series: Nifty open interest down 3 percent and Bank Nifty open interest down 6 percent.
• India VIX ended at 12.9, up 5.2 percent.
• Max open interest for July series at 11,000 Call (open interest at 39.6 lakh, up 19 percent)
• Max open interest for July series at 10,600 Put (open interest at 47.2 lakh, down 6 percent)

F&O Ban

In ban: Jet Airways

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty incase of a rollover of these intraday positions.

Put Call Ratio

• Nifty PCR at 1.62 versus 1.79
• Nifty Bank PCR at 0.73 versus 1

HSBC on Finolex Industries

• Initiated ‘Buy’ with a price target of Rs 750.
• Policy, capacity and improving margins all flowing through.
• Expect PVC resin fundamentals to improve.
• Rise in weightage of more stable pipes business to make margins less volatile.
• Finolex trades at steep discount, despite similar growth profile and strong balance sheet.

IDFC Securities on GAIL

• Maintained ‘Outperformer’; hiked price target to Rs 434 from Rs 410.
• Expect June quarter to see stellar performance.
• GST inclusion and aggressive bidding in the CGD auction are positive triggers.
• Petchem expansion to stabilise gradually.
• Transmission and trading volumes set to grow steadily.
• Unified tariff approval: every 10 percent hike can boost EPS by 7 percent.
• Profitability in LPG segment to remain strong over the current and next financial year.

On proposed Axle Norms

Nomura

• Proposed truck axle load relaxation led to sharp correction in Ashok Leyland and Tata Motors.
• Impact on truck demand depends on execution of proposed norms.
• If implemented on existing vehicles then demand for new vehicles to be impacted.
• If implemented on new vehicles then positive for short term demand.

BofA-ML

• Proposed rated load to be increased by 15-25 percent.
• If implemented on current fleet, then it will impact demand for new trucks.
• Change in norms to bring down the existing overloading issues.
• Impact of these norms is difficult to gauge as it depends on state-wise implementation.
• Uncertainty to remain an overhang for stock prices of Ashok Leyland and Tata Motors.

Edelweiss on Hindustan Unilever

• Maintained ‘Hold’; raised price target to Rs 1,887 from Rs 1,647.
• June quarter numbers came inline with estimates.
• Growth was broad based aided by gradual improvement in demand.
• Triggers: New launches, performance of Indulekha & Ayush and revival of rural demand.
• Hold as stock offers limited upside from current levels.

Nomura on Coal India

• Upgraded to ‘Buy’ from ‘Neutral’; cut price target to Rs 318 from Rs 332.
• Sanguine earnings outlook and inexpensive valuations turn risk-reward favourable.
• Higher blended realisation to result in EPS CAGR of 24 percent over the fiscal 2018-2020.
• Expect 7 percent CAGR in offtake over the financial years till March 2021 with no negative surprises in operating expense.

Credit Suisse On Sun Pharma

• Maintained ‘Outperform’ with a price target Rs 600.
• Details of MK-3222 formulary inclusion has started trickling.
• MK-3222 likely classified as Tier 4 coverage at United.
• High discount strategy could work for Sun Pharma.
• Expect Sun to take peak volume share of 4-5 percent in market of $7-8 billion

Motilal Oswal on Hindustan Unilever

• Maintained ‘Buy’; raised price target to Rs 2,010 from Rs 1,925.
• Broad-based growth encouraging.
• Margins impressive despite high ad spend.
• Offers highest earnings visibility and return ratios in large-cap Indian consumer space.

Macquarie on Indian Metals

• China remains focused on pollution control.
• More cities in restricted list means more cuts in steel capacity.
• No new cuts in aluminium, but cost support may rise.
• Believe Asian steel margins will remain high on account of high utilisation levels.
• Favourable terms for EAF capacity addition should keep graphite electrode market tight.
• Indian metals equities corrected on trade war risks.
• Remain constructive on steel equities, graphite electrode producers, Hindalco and Coal India.

• PVR: MFS International New Discovery Fund acquired 2.96 lakh shares or 0.63 percent equity at Rs 1191.75 each.

JTEKT

• Promoter Jtket Corporation sold 1.14 crore shares or 5.75 percent equity at Rs 91.16 each.
• Reliance Capital acquired 60 lakh shares or 3.02 percent equity at Rs 91.1 each.
• India Acorn Fund Ltd. acquired 12 lakh shares or 0.60 percent equity at Rs 91.1 each.
• White Oak India Equity Fund acquired 13.5 lakh shares or 0.68 percent equity at Rs 91.1 each.

KDDL

• RBS acquired 2.5 lakh shares or 2.3 percent equity at Rs 473 each.
• Maven India Fund sold 71,000 shares or 0.6 percent equity at Rs 475 each.
• RC Tritec AG sold 60,000 shares or 0.5 percent equity at Rs 470 each.

• UPL is said to seek $3 billion loan to buy Ackman-backed Arysta, Bloomberg reported.
• IHH made mandatory open offer to shareholders of Fortis Healthcare.
• Bharat Electronics signed MoU with Sweden’s SAAB for 3D air surveillance radar.
• L&T and BEML signed MoU to explore domestic and export markets for defence projects and services.
• Ajanta Pharma clarified DGCA has not taken action against the company.
• Adani Ports arm to form joint venture with Nyk Auto Logistics for transportation of vehicles using freight trains.
• Apex Frozen Foods, Avanti Feeds and Waterbase in focus as the U.S. Department of Commerce finalises the antidumping duty rate, on certain frozen warmwater shrimp from India, at 1.35 percent.

HUL (Q1, YoY)

• Revenue up 11.2 percent at Rs 9,487 crore.
• Net profit up 19.2 percent at Rs 1,529 crore.
• Ebitda up 20.6 percent at Rs 2,251 crore.
• Margin at 23.7 percent versus 21.9 percent.

Jay Bharat Maruti (Q1, YoY)

• Revenue up 34.1 percent at Rs 505.9 crore.
• Net profit up 32.7 percent at Rs 13.4 crore.
• Ebitda up 46.2 percent at Rs 42.4 crore.
• Margin at 8.4 percent versus 7.7 percent.

Sintex Plastics Technology (Q1, YoY)

• Revenue down 12.2 percent at Rs 1325.2 crore.
• Net profit down 46.9 percent at Rs 37.5 crore.
• Ebitda down 29.9 percent at Rs 162.8 crore.
• Margin at 12.3 percent versus 15.4 percent.

Also Read: Q1 Results: HUL Profit Meets Estimates As Sales Volumes Rise In June Quarter

• Zee Entertainment
• 8K Miles
• Ashok Leyland
• Federal Bank
• ICICI Lombard General Insurance
• Muthoot Capital Services
• Nucleus Software Exports
• Rallis India
• Sintex Industries
• Tata Sponge Iron

• Jeff Bezos becomes the richest man in modern history, topping $150 billion.
• Netflix's slowdown sparks fresh fears of video-streaming bubble.
• Bharti Airtel’s debt repayment for this fiscal is thrice the cash it generates.
• Trump gives Putin a win in Finland, kindling new outrage at home.
• India’s banking revolution has left its villagers behind.
• Pakistan’s military tightens grip on media ahead of polls.
• Warnings of market complacency are growing louder.
• Thyssenkrupp Chairman resigns adding turmoil at top of firm.
• IMF cuts India growth forecast a touch on higher oil prices.
• Fuel prices to be cut by up to 50 paise in next few days, says official.
• IDBI Bank board may soon clear preferential share allotment to LIC.
• ICICI Bank decides to postpone AGM by a month.

• West Texas Intermediate crude was little changed at $68.10 a barrel after dropping 4.2 percent.
• Brent crude rose 0.6 percent to $72.30 a barrel. It fell 4.6 percent yesterday.
• Gold was little changed at $1,240.63 an ounce.

Shanghai Exchange

• Steel traded lower for second day; down 0.8 percent.
• Aluminium snapped two-day losing streak; up 0.1 percent.
• Zinc traded lower for sixth day; down 2.8 percent (lowest level in a decade).
• Copper snapped three-day winning streak; down 0.6 percent.
• Rubber snapped two-day losing streak; gains marginally.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,936.50 as of 8:30 a.m.

Asian equities were mixed Tuesday as investors assess whether corporate earnings can deliver on high expectations against a backdrop of trade tensions. Japanese stocks outperformed in the region as the yen slipped, while shares fell in Australia, China and Hong Kong.