Sensex, Nifty Halt Record Closing Spree As RIL Drags

Indian equity benchmarks halted their record closing spree dragged by Reliance Industries after it snapped its seven-day rally.

The S&P BSE Sensex fell 0.45 percent or 174 points to 38,723 and the NSE Nifty 50 index declined 0.4 percent or 47 points to 11,692.

For most part of the day, benchmarks moved in a narrow range, but extended losses in last thirty minutes of trade.

Thirteen out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Energy index's 1.13 percent drop. On the other hand, S&P BSE Metal index was the top gainer, up 1.1 percent.

The mid-cap shares outperformed their larger peers as the S&P BSE MidCap index rose 0.5 percent.

Shares of the Mukesh Ambani led oil-to-telecom conglomerate snapped its seven-day record breaking spree and fell as much as 2.2 percent to Rs 1,290.40 on heavy volumes. Trading volume was 1.5 times its 20-day average.

On the Relative Strength Index (RSI), the stock is quoting at 73, indicating that it may be overbought. A reading above 70 on the RSI indicates the stock is overbought while below 30 indicates that it is oversold.

• TTK Prestige: The Bengaluru-based pressure cooker maker rose as much as 10.25 percent to Rs 7,100 after CLSA maintained buy call on the stock and raised its target price to Rs 7,725.
• Reliance Infra: The Anil Ambani-led company rose as much as 6.33 percent to Rs 450.75 ahead of its board meet to consider transfer of Mumbai power business to Adani Transmission.
• New India Assurance Company: The Mumbai-based general insurer rose as much as 4.2 percent to Rs 254.95 after it was added to the Nifty Next 50 index.
• Future Consumer: The Mumbai-based packaged food company rose as 10.4 percent to Rs 53.80 on the back of heavy volumes. Trading volume was 5 times its 20-day average.

Shares of the country's largest drugmaker rose as much as 1.6 percent to Rs 631.

The company has launched pain relief spray Volini Maxx and signed captain of Indian cricket team Virat Kohli as its brand ambassador, Sun Pharma said in a press release.

European shares were steady on Wednesday, following Asia markets which struggled for direction.

• Approves additional 2 percent hike in dearness allowance for central government employees with effect from July 1.
• Approves revising cost estimate for setting up India Post Payments Bank to Rs 1,435 crore from Rs 800 crore.

Source: Press Information Bureau

Shares of the government-owned banks rose after government asked Reserve Bank of India to prepare a list of candidates for merger among 21 government-controlled lenders as it seeks to strengthen a banking system laden with bad debt, Bloomberg reported citing people familiar with the matter.

Gauge of PSU banks on the National Stock Exchange — Nifty PSU Bank Index rose 1.8 percent with all the government-owned banks trading higher.

• Sadbhav Engineering: The Ahmedabad-based construction company fell as much as 19 percent to Rs 226.30. Trading volume was 34 times its 20-day average.
• MAS Financial Services: The Ahmedabad-based non-banking finance company fell as much as 2 percent to Rs 604.45. Trading volume was 55 times its 20-day average.
• JK Lakshmi Cement: The Delhi-based cement maker rose as much as 2.6 percent to Rs 337. Trading volume was 8.3 times its 20-day average.
• TTK Prestige: The Bengaluru-based pressure cooker rose as much as 10.25 percent to Rs 7,100. Trading volume was 5 times its 20-day average.

Nifty Bank 28,500 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 31 percent to Rs 33. Over 4.73 lakh shares were added to the open interest which stood at over 15.43 lakh shares.

Click here to see the complete options chain

Shares of the Ahmedabad-based pharmaceutical company fell as much as 1.3 percent to Rs 392.35.

Cadila Healthcare's subsidiary — Liva Healthcare got a Form 483 with five observations from the U.S. FDA, two sources close to development told BloombergQuint.

Email sent to Cadila Healthcare remained unanswered.

Anil Ambani-promoted Reliance group stocks rose ahead of Reliance Infrastructure board meet to consider and approve the transfer of integrated Mumbai power business to Adani Transmission.

RInfra said it has obtained all relevant approvals from fair trade regulator Competition Commission of India, shareholders of the company, Maharashtra Electricity Regulatory Commission, and others for sale of Mumbai power business to Adani Transmission for Rs 18,800 crore.

All lenders have provided their no objection certificates, and the company expects to close the transaction within the next few days, it had said.

(With inputs from PTI)

Shares of the Chandigarh-based steel wheel maker rose as much as 1 percent to Rs 1,201.15 after the Directorate General of Trade Remedies (DGTR) has recommended continuation of antidumping duty of $613 per tonne on flat base steel wheels imported from China for five more years, news agency PTI reported.

The duty is aimed at guarding domestic makers of the product from below-cost imports.

In a separate development, the U.S. Commerce Department on Monday made a preliminary determination that imports of certain steel wheels from China were subsidized at rates ranging from 58.75 percent to 172.51 percent, and it would impose duties on the product, Thomson Reuters reported.

Shares of the Mumbai-based power equipment maker rose as much as 20 percent, the most in over eight months, to Rs 73.

The company has received an order worth Rs 15 crore for fabrication and supply of approximately 2,OO0 million tonnes of CHP structures for a power plant in UP from Thyssenkrupp Industries India Private Limited, Artson Engineering said in an exchange filing.

Shares of the Mumbai-based packaged food company rose as much as 10.36 percent, the most in over five months, to Rs 53.80 on the back of heavy volumes.

Trading volume was 13 times its 20-day average, according to data compiled by Bloomberg.

• Federal bank has 20 lakh shares change hands in a block deal. Stock up 2 percent at Rs 81.25.
• Idea Cellular has 10.06 lakh shares change hands a single block. Stock down 2.4 percent at Rs 49.85.
• GMR Infra has 1.35 crore shares change hands in two blocks. Stock up 1.3 percent at Rs 19.30.
• Equitas Holdings has 20 lakh shares change hands in two blocks on BSE and NSE.
• ITC has 10 lakh shares change hands in a single block. Stock down 0.45 percent at Rs 310.25.
• JSW Steel has 18 lakh shares change hands in a block on BSE.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Anil Agarwal-led mining conglomerate rose as much as 2.76 percent to Rs 236.65, its highest level in over a month.

Vedanta was awarded 41 out of the 55 oil and gas blocks which were auctioned by the government-under Open Acreage Licensing Policy, according to notice on Directorate General of Hydrocarbons’ website.

Shares of the Bhubaneswar-based aluminium manufacturer rose as much as 3 percent to Rs 77.20 after HSBC initiated coverage on the stock with a buy for target price of Rs 90.

HSBC in a note said:

• Higher earnings to be driven by volume growth in alumina.
• Cost reductions in aluminium production will aid earnings.
• Aluminium may see some support from a relatively tight market balance.

Indian equity benchmarks edged lower paced by weakness in Lupin, Axis Bank, ICICI Bank and Bharti Infratel.

The S&P BSE Sensex fell 0.11 percent or 43 points to 38,850 and the NSE Nifty 50 index declined 0.14 percent or 17 points to 11,721.

Nine out of 11 sector gauges compiled by National Stock Exchange were trading lower led by the Nifty IT index's 0.5 percent drop. On the other hand, Nifty Metal index was top gainer, up 0.4 percent.

Mid- and small-cap shares were outperforming their larger peers as the S&P BSE MidCap index rose 0.3 percent and the S&P BSE SmallCap index advanced 0.2 percent.

• Indian rupee opened lower at 70.32 per dollar against yesterday's close of 70.10.

Below are trading strategies discussed by stock market experts with BloombergQuint:

Hadrien Mendonca, IIFL

• Nifty has support around 11,640 on the downside and it can go up to 11,880.
• Buy Bata India for target of Rs 1,140 with stop loss at Rs 1,080.
• Buy Axis Bank for target of Rs 685 with stop loss at Rs 648.

Chandan Taparia, Motilal Oswal

• Buy HDFC for target of Rs 2,010 with stop loss at Rs 1,920.
• Buy Godrej Consumer Products for target of Rs 1,500 with stop loss at Rs 1,410.
• Buy Hindalco for target of Rs 250 with stop loss at Rs 233.

The rupee is likely to continue its decline against the dollar tracking other currencies in the Asia-pacific region and on higher crude oil prices. With expectations of a drop in Iran crude oil exports, prices may continue to remain on the higher side. The currency also faces outflows from the stock market.

Credit Suisse said India’s strengthening business cycle may be more important for economic growth than the forthcoming elections. It said sales in steel, commercial vehicles, factory output and exports suggest a "significant improvement" compared with last 6 or 7 years.

Bond traders will watch for the outcome of Rs 10,000 crore worth of t-bills that the RBI will sell. The central bank will also conduct Rs 30,000 crore of 7-day reverse repo auction.

CLSA on TTK Prestige

• Maintained ‘Buy’; raised price target to Rs 7,725 from Rs 7,010.
• A play on improving rural consumption and government spending.
• ‘Ujjwala’ implementation to drive demand in core categories.
• Cleaning solutions and exports are potential growth drivers.

Credit Suisse on M&M

• Maintained ‘Outperform’ with a price target of Rs 1,100.
• Remain constructive on both tractor and pick-up volumes for the next financial year as well.
• Near term stock performance will now depend on how its three new utility vehicle launches fare.
• Utility vehicle success key to further rerating of the stock.

HSBC on NALCO

• Initiated ‘Buy’ with a target price of Rs 90.
• Higher earnings to be driven by volume growth in alumina.
• Cost reductions in aluminium production will aid earnings.
• Aluminium may see some support from a relatively tight market balance.

HSBC on Indian Hotels

• Maintained ‘Buy’ with a price target of Rs 165.
• Company is focusing on capacity addition and margins expansion.
• Management constructive on the growth as demand-supply dynamics remain favourable.
• Management sees strong growth in both luxury and mid-market.

Deutsche Bank on Bharat Forge

• Maintained ‘Buy’ with a price target Rs 830.
• Defence revenue opportunity begins to materialise.
• Ability to add new revenue streams to offset the cyclicality of core business.
• Earnings and cash-flow volatility has declined despite the cyclical nature over past 15 years.

Who’s Meeting Whom

• Kalpataru Power Transmission to meet HDFC Asset Management on Aug. 31.
• Mahindra Holidays & Resorts to meet JHP Securities on Aug. 29.
• Mahindra Logistics to meet TA Associates and Edelweiss Securities from Aug. 29-31.

Insider Trades

• Nocil promoters sold 1 lakh shares on Aug. 24.
• Deccan Gold Mines promoter sold 60,500 shares from Aug. 23-27.
• Srikalahasthi Pipes promoter acquired 10,000 shares from Aug. 23-24.
• Asian Oilfield Services promoter Ritu Garg acquired 60,000 shares from Aug. 23.

• Nifty August Futures ended at 11,752.4, with a premium of 14 points.
• Nifty September Futures closed trading at 11,789.3, with a premium of 50 points.
• Rollovers: Nifty at 37 percent, Bank Nifty at 32 percent.
• Across series: Nifty open interest down 2 percent and Bank Nifty open interest unchanged.
• India VIX ended at 12.4, up 1.5 percent.
• Max open interest for August series at 11,800 strike price call option (open interest at 26.5 lakh shares, open interest up 9.5 percent)
• Max open interest for August series put at 11,000 strike price put option (open interest at 38.4 lakh shares, open interest down 6 percent)

• LIC will meet on Sept. 04 to consider acquiring 36 percent stake in IDBI Bank. That’s in addition to an approval it won to subscribe to preferential issue of IDBI Bank’s shares.
• Bharti Airtel plans to roll out 9,000 new sites and 4,150 kilometres of optic fiber for financial year 2018-19 in Rajasthan. This announcement is the part of the company’s network expansion plan LEAP.
• Tech Mahindra’s certificate of authorisation for pre-paid card issuance gets cancelled by RBI. The cancellation of the company as Payment System Operator is on account of voluntary surrender of authorisation by the company.
• State Bank of India said that the appropriate authority has accorded approval to explore and initiate the process of divestment of its 3.9 percent stake in National Stock Exchange of India through secondary sale.
• Tata Motors to showcase five new public transport vehicles at the bus and coach exhibition, Busworld India starting from Aug. 29. Under its new turnaround strategy, the company is “aggressively” focusing on introducing new range of products with improved features and modern technological advancements said Rohit Srivastava, product line head.
• Lakshmi Vilas Bank received approval from IRDA to offer general insurance products. The bank had executed a corporate agency agreement with HDFC Ergo General Insurance Company to sell non-life insurance products under open architecture.
• Vedanta awarded 41 out of the 55 oil and gas blocks which were auctioned by the government-under Open Acreage Licensing Policy, according to notice on Directorate General of Hydrocarbons’ website.

• Bad news for derivative investors
• T Rowe withdraws plea against domestic investors from Bombay High Court
• Three out of every five Indian companies get earnings cut
• GoAir to launch international operations in October
• Trump accuses Google of rigging search results against him
• Why not show Pakistan the same consideration shown to China?
• From power firms to government-RBI relations — implications of court order
• Modi’s JFK moment spurs India to plan crewed spaceflight by 2022
• Deal Street: India’s second-largest carmaker backs self-driving startup revv
• Is the bull market on borrowed time?

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.12 percent to 11,744 as of 7:03 a.m.

Asian stocks were off to a muted start Wednesday as investors assessed the latest developments on the Trump administration’s trade policies. The dollar and Treasury yields stabilised after gains.

Equity benchmarks climbed in Japan and drifted in Australia and South Korea, while futures showed shares in Hong Kong were poised to decline.

Currencies

• The yen fell less than 0.1 percent to 111.25 per dollar.
• The offshore yuan traded at 6.8044 per dollar.
• The Bloomberg Dollar Spot Index was flat.
• The euro bought $1.1690.

Commodities

• West Texas Intermediate crude rose 0.1 percent to $68.61 a barrel.
• Gold ticked higher to $1,202.08 an ounce.