Sensex Clocks Longest Monthly Rally In Two Years

Indian equity benchmarks were little changed as gains in IT and pharma stocks was offset by losses in Reliance Industries and private sector lenders ahead of June quarter GDP data.

The S&P BSE Sensex fell 0.12 percent or 45 points to 38,645 while the NSE Nifty 50 index was little changed at 11,680.

The Sensex rose for a fifth month in a row posting its longest rally since August 2016, Bloomberg data showed.

Eleven of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Healthcare index's 2.2 percent gain. On the flipside, the S&P BSE Energy index was top loser, down 1.5 percent.

• Dr. Reddy’s Labs: The Hyderabad-based drugmaker rose as much as 4.8 percent to Rs 2,495 after Bank of America Merrill Lynch maintained its ‘Buy’ call on the stock for and raised its target price to Rs 2,900 from Rs 2,475, indicating a potential upside of 22 percent.
• PNC Infratech: The Agra-based infrastructure construction company rose as much as 7.7 percent to Rs 175 after was declared as the lowest bidder for EPC project from Maharashtra State Road Development Corporation worth Rs 1,999.52 crore.
• Mindtree: The Bengaluru-based IT company rose as much as 6.15 percent to record high of Rs 1,117. IT companies were in focus after rupee dropped to record low of 71 per dollar.
• Welspun India: The Mumbai-based textile maker rose as much as 12 percent to Rs 77.45 on heavy trading volumes. Trading volume was 6.6 times its 20-day average.

European stocks fell following a downbeat session in Asia after U.S. President Donald Trump stepped up his tough talk on trade. Emerging-market shares took another hit, while the dollar and Treasuries held steady.

Indian equity benchmarks declined for a third straight day led by decline in Reliance Industries, Yes Bank and HDFC ahead of June quarter GDP report due after market hours.

The S&P BSE Sensex fell 0.2 percent to 38,600 and the NSE Nifty 50 index slipped 0.17 percent to 11,656.

Ten out of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Energy index's 1.7 percent drop. On the other hand, the S&P BSE Healthcare index was top gainer, up 2 percent, tracking weakness in rupee against the U.S. dollar.

The overall market breadth was neutral as 1,259 shares were advancing while 1,240 were declining on the BSE.

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Shares of the Mukesh Ambani-led company fell for a third day in a row on the back of high trading volumes.

The stock fell as much as 2.8 percent to Rs 1,238, trading volume was 2.1 times its 20-day average, Bloomberg data showed.

• South Indian Bank has 25.8 lakh shares change hands in a single block. Stock up 0.6 percent at Rs 17.65.
• Infosys has 17.9 lakh shares change hands in a block on BSE. Stock up 1.4 percent at Rs 1,435.90.
• Reliance Communications has 13 lakh shares change hands in a block. Stock down 2.7 percent at Rs 18.10.

Buyers and sellers were not immediately known

Source: Bloomberg

• ITI: The Bengaluru-based telcom equipment maker rose as much as 7.2 percent to Rs 119.80. Trading volume was 13 times its 20-day average.
• Jai Corp: The Maharashtra-based polypropylene and polyethylene fabric maker rose as much as 10 percent to Rs 174. Trading volume was 11 times its 20-day average.
• Gujarat Gas: The Ahmedabad-based city gas distribution company fell as much as 1 percent to Rs 763. Trading volume was 9 times its 20-day average.
• PNC Infratech: The Agra-based infrastructure construction company rose as much as 7.7 percent to Rs 175. Trading volume was 8 times its 20-day average.

Shares of the Mumbai-based specialty pharma company rose as much as 6 percent to record high of Rs 3,307.95.

Piramal Enterprises in an analyst meet yesterday said:

• Over time businesses should deliver return on equity of 20 percent.
• Target of the group is return on equity and quality of assets.
• Wholesale lending will continue to be a key driver of financial services business.
• Retail lending will go beyond housing finance.

Indian export related pharma and IT companies rallied after the rupee depreciated past 71 per dollar, its lowest level against the greenback.

Gauges of pharma and IT companies on the National Stock Exchange rose 2 and 1.5 percent each respectively. Indian pharma and IT companies stand to gain as they earn sizeable amount of revenues in dollar.

HCL Technologies, Sun Pharma, Dr. Reddy’s Labs, Tech Mahindra, Wipro, Lupin and Cipla were among the top Nifty gainers.

Nifty Bank's 28,000 strike price put option was among the most active options contracts on the National Stock Exchange.

The premium on the contract rose 14 percent to Rs 116.15. As many as 3.07 lakh shares were added to the open interest which stood at 10.46 lakh shares.

Click here to see the complete options chain

Shares of the Mumbai-based construction related professional service provider rose as much as 5 percent to record high of Rs 605.45.

Soril Infra Resources’ board approved to infuse funds via preferential offer worth Rs 210.21 crore. The company will issue shares to Steadview Capital Mauritius and ABG Capital, the company said in an exchange notification.

Idea Cellular Ltd. said that it completed its merger with Vodafone India Ltd., according to its stock exchange notification.

Post the merger Idea Cellular be renamed as Vodafone Idea - An Aditya Birla Group and Vodafone Group partnership, making it the country’s largest wireless telecom service provider.

Balesh Sharma has been appointed as the CEO of the company.

Idea Cellular shares pared early gains to trade 1.6 percent higher at Rs 50.65.

Mahindra CIE Automotive Ltd. to grow at 50 percent more than market rate, its Chairman Hemant Luthra told BloombergQuint in an interaction.

Key highlights from the conversation:

• Will be expanding capacity for Mexico plant.
• Offloading to India from Mexico.
• Shut down of Germany plant was a mistake.
• Exploring technology exchange options with European countries.
• Current debt-to-Ebitda stands at 0.6.
• India looks interesting, plan to make acquisitions.
• Will make acquisitions in partnership format.
• Target to grow at 50 percent more than market rate.

• Indian equity benchmarks pared opening losses.
• The S&P BSE Sensex Index traded 0.24 percent higher at 38,781.21 as of 10:10 a.m. and The NSE Nifty 50 Index traded at 10,707.55, up 0.26 percent.
• About 1,104 stocks advanced and 503 shares declined in NSE.

Shares of Hindustan Construction Company fell as much as 8.9 percent, the most since July 05, to Rs 13.30.

The company's Lavasa Corporation received NCLT nod to start its insolvency proceedings, according to its statement on the exchanges. The company owns 68.7 percent equity in Lavasa Corporation.

“The project was severely impacted by a Ministry of Environment notification to stop work for jurisdictional reasons and not for environmental infractions,” the statement added.

Shares of the New Delhi-based lender rose as much as 1.4 percent to Rs 86. The bank's board approved raising Rs 1,000 crore via qualified institutional placement, according to its stock exchange filing.

The stock declined 29.8 percent so far this year compared to a 15.1 percent advance in the Sensex.

Shares of the credit rating agency rose as much as 1.8 percent to Rs 1,311.60.

Well-known investor Mohnish Pabrai of Pabrai Investment Fund hiked stake in CARE Ratings by 2.4 percent through the open market. He owns now 7.5 percent in the company.

The stock traded at 21.9 times estimated forward earnings per share compared to 24.3 times for the two-year historical average.

Shares of the highway construction company extended gains for the second day and rose as much as 1.9 percent to Rs 849.

The company received Letter of Acceptance for a new EPC project, valued at Rs 1,698 crore by Maharashtra State Road Development Corporation, according to its stock exchange notification.

Dilip Buildcon traded at 32.4 times trailing 12-month earnings per share, Bloomberg data showed. The stock is 24 percent below the Bloomberg consensus one-year price target.

Indian equity benchmarks opened lower, following its Asian peers as the renewed turmoil in emerging markets weighed on investors sentiment.

The S&P BSe Sensex index fell as much as 0.2 percent to 38,611.46 and the NSE Nifty 50 index fell as much as 0.19 percent to 11,654.

The market breadth, however, was tilted in favour of buyers. Six out of 11 sectoral gauges compiled by NSE fell, led by NSE Nifty PSU Bank Index's 0.6 percent decline. On the flipside, NSE Nifty Pharma Index was the top sectoral gainer, up 0.9 percent.

• The Indian rupee hit at a fresh all-time low for the third day. The local currency began to trade at 71 against the U.S. dollar.
• Sovereign bond drops for fifth day, as yields spike to 7.95 percent, highest level since June 14.

It may not be a good morning for the Indian rupee as it heads toward an unprecedented 71 to a dollar. Risk appetite was further muted on the escalating U.S.-China trade war. The currency is set for the biggest monthly drop in three years.

Traders will watch for the GDP numbers for the June quarter to gauge whether the economy is back on track. The economy is estimated to have grown at 7.6 percent in a Bloomberg survey.

In other news, India’s finance ministry has asked S&P Global to consider the country’s macroeconomic stability for a possible rating upgrade. ING said the RBI is already behind the curve and some catch-up rate hiking will be necessary.

Outcomes of auctions of dated govt bonds term-repos will also be watched.

BofAML on Dr Reddy’s Lab

• Maintained ‘Buy’; raised price target to Rs 2,900 from Rs 2,475, implying a potential upside of 22 percent from the last regular trade.
• Deep pipeline in the U.S. gives comfort of 8 percent growth in the country; 2019-20 largely inflexion point.
• Specialty to take a bigger role eventually.
• Many catalysts in near-term: facility clearances, filing of complex LAI and DFN-15.

UBS on Sun Pharma

• Maintained ‘Buy’; raised price target to Rs 740 from Rs 640, implying a potential upside of 16 percent from the last regular trade.
• Early among Indian pharma to push forward with a branded portfolio.
• Dual levers: Specialty as well as generics ramp up.
• Raise price target on potential earnings upgrades .

CLSA on Auto

• New insurance norms to push up prices.
• Two wheeler prices likely to rise by about 3-8 percent; passenger vehicles by about 1-2 percent.
• Low-priced two wheelers are likely to see highest percentage price impact.
• Higher upfront insurance likely to impact demand.
• Stay cautious on two wheelers with SELL on Hero/TVS, Outperform on Bajaj and Buy on Eicher.

JPMorgan on Idea Cellular

• Maintained ‘Underweight’ with a price target of Rs 50.
• Idea has received NCLT approval for the merger with Vodafone.
• Post-merger math does not look good unless we see revenue recovery.
• Post-merger opex/capex reduction assumptions can get undermined if RJio maintains its current aggressive pricing and market-share posture beyond the current financial year.

CLSA on Bharti Airtel

• Maintained ‘Buy’ with a price target of Rs 500, implying a potential upside of 31 percent from the last regular trade.
• Content is key beyond tariffs to defend market share.
• Adoption of data/bundled plans is key to ARPU recovery.
• Since Jio’s launch, Bharti Airtel has defended its market share well.

Deutsche Bank on Telecom

• Bharti Airtel: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 425 from Rs 475, implying a potential upside of 11 percent from the last regular trade.
• Bharti Infratel: Upgraded to ‘Buy’ from ‘Hold’; cut price target to Rs 345 from Rs 370, implying a potential upside of 21 percent from the last regular trade.
• Idea Cellular: Maintained ‘Buy’; cut price target to Rs 100 from Rs 105, implying a potential upside of 101 percent from the last regular trade.
• Idea-Vodafone mergeco set to commence; India becomes a three-player market.
• Fight is for next billion eyeballs and content is the new battle ground.

Citi on HCL Technologies

• Maintained ‘Neutral’ with a price target of Rs 1,115, implying a potential upside of 10 percent from the last regular trade.
• Deals ramp up likely to aid second and third quarter.
• Remains Neutral rated but near-term upsides possible.
• With the rupee depreciation and reasonable valuation, believe there could still be upsides ahead.

Credit Suisse on Avenue Supermarts

• Maintained ‘Underperform’ with a price target of Rs 1,150, implying a potential downside of 28 percent from the last regular trade.
• Return ratios much lower than peers which trade at similar PEG ratio.
• DMart has seen earnings downgrade, unlike other most expensive stocks in coverage.
• Expect earnings growth to slow for the next three years.

Goldman Sachs on Avenue Supermarts

• Maintained ‘Buy’ with a price target of Rs 1,965, implying a potential upside of 24 percent from the last regular trade.
• DMart better than German peers on operating cost to sales and RoIC metrics.
• DMart has higher working capital than the German discounters.
• German discounters are often seen as benchmarks for discount retailing.

Goldman Sachs on Tata Motors

• Maintained ‘Neutral’ with a price target of Rs 283, implying a potential upside of 9 percent from the last regular trade.
• Management remains comfortable with EBIT guidance of 4 percent for the current financial year.
• Cost reduction initiatives, better volumes and moderation in incentives to support margin.
• In India business, management aims to enhance profitability.

UBS on Indian Hotels

• Maintained ‘Buy’ with a price target of Rs 170, implying a potential upside of 26 percent from the last regular trade.
• Consolidated RoCE below cost of capital, but standalone is quite impressive.
• Balance sheet is burdened by non-operating assets and other illiquid investments.
• Focus on an asset-light model and frugal renovation capex to result in better RoCE.
• Hotel sector is in upcycle model; stay invested.

• 4:30 p.m.: India fiscal deficit for April-July period
• 5 p.m. : India eight infrastructure industries index for July, prior 6.7 percent.
• 5:30 p.m. : India GDP for April-June quarter YoY (estimate - 7.6 percent, prior 7.7 percent).
• 5:30 p.m. : India GVA for April-June quarter YoY (estimate 7.5 percent, prior 7.6 percent).

• Mohnish Pabrai of Pabrai Investment Fund hiked stake in CARE Ratings by 2.4 percent through open market. He owns now 7.5 percent in the company.
• Soril Infra Resources’ board approved to infuse funds via preferential offer worth Rs 210.21 crore. The company will issue shares to Steadview Capital Mauritius and ABG Capital.
• CRISIL upgraded Indian Terrain Fashions’ long and short term rating of the company to CRISIL BBB+/Stable and CRISIL A2 respectively.
• GTL Infrastructure to allot abut 86 lakh shares on conversion of convertible bonds. Post this conversion, bonds worth $ 66.701 million will be outstanding.
• Yes Bank has received RBI approval for Rana Kapoor to continue as MD CEO till further notice from RBI
• ICICI Bank voted in favor of appointing Chanda Kochhar on board of ICICI Securities. The lender holds 80 percent stake in ICICI Securities.
• Hindustan Construction Company owned Lavasa Corporation received NCLT nod to start its insolvency proceedings. The company owns 68.7 percent stake in Lavasa Corporation. The project was severely impacted by a Ministry of Environment notification to stop work for jurisdictional reasons and not for environmental infractions, the company says.
• LKP Finance received RBI nod for 62 percent stake sale to Essel group company-Dakshin Mercantile Private Limited. After this approval, Dakshin Mercantile will now be able to make open offer to acquire a minimum 26 percent equity shares from public shareholders. The public offer is for 32.7 lakh shares at Rs 198 per share. The company which is under the umbrella of Essel group’s finance division is headed by ex-head of Dhanlaxmi Bank, Amitabh Chaturvedi. The group is contemplating to make the new company as a Core Investment Company post the acquisition and open offer.
• Dilip Buildcon received Letter of Acceptance for a new EPC project values at Rs 1,698 crore by Maharashtra State Road Development Corporation.
• PNC Infratech has been declared the lowest bidder for Maharashtra Samruddhi Mahamarg’s EPC project for Rs 1,999.52 crore. The letter of award has been given from Maharashtra State Road Development Corporation.
• Oriental Bank of Commerce board approved raising Rs 1,000 crore via qualified institutional placement.
• Wipro announces that it has joined the Blockchain in Transport Alliance (BiTA) to drive blockchain adoption in the transportation industry. The company intends to use this platform to help ideate platform-agnostic blockchain standards for the logistics and transportation industry.
• Mindtree and global professional services company GHD have established a partnership on a digital platform for property and infrastructure industries. The partnership combines GHD Digital’s knowledge of building design and operation, with Mindtree’s extensive track record in cloud based, internet of things platforms and analytics, to deliver efficiencies for clients and communities and create previously untapped revenue opportunities through the collection of data.
• Muthoot Finance will consider raising Rs 5,000 crore via issue of redeemable non-convertible debentures through private placement on Sept. 04.
• Panasonic Energy India Company received a penalty order of Rs 73.93 crore in respect of cartelization in the Indian-Zinc Carbon dry cell batteries market from the Competition Commission of India. The company had colluded with Geep Industries (India) Private Limited. In a case in 2016, there was a case in which it had a proven cartel of the company with Eveready Industries India Limited and Indo National Limited.
• NCLT approved Idea-Vodafone merger, reports CNBC TV18. Idea and Vodafone signed a merger agreement last year, which could create the country's biggest telecom operator.

• Auto sales may hit a bump in August.
• General insurers brace for Rs 1,300-crore claim payout.
• How India’s debt recovery is spurring record M&A.
• Power sector ‘pariwartan’ gets another shot, but can it work?
• What the faulty hip implant saga tells us.
• Indians most vulnerable to nutrient deficiency as carbon dioxide levels rise.
• Indian retail isn’t a pot of gold.
• Bezos, Buffett eye $250-billion opportunity.
• BlackRock’s Decade: How the crash forged a $6.3 trillion giant.
• Google, Facebook, Amazon may be ‘antitrust situation’, Trump says.
• Trump says Iranian regime may collapse because of his policies.
• Uber is building its own scooter to compete in Frenzy.
• Inside glossier’s plans to shake up your makeup routine.

• West Texas Intermediate crude stayed above $70 a barrel after rising 2 percent this week.
• Brent crude traded 0.3 percent lower at $77.55 a barrel.
• Gold held at $1,200.47 an ounce.

Shanghai Exchange

• Steel traded lower for second day; down 0.3 percent.
• Aluminium snapped two-day winning streak; down 0.5 percent.
• Zinc traded lower; down 0.5 percent.
• Copper traded higher; up 0.1 percent.
• Rubber traded lower; down 0.2 percent.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.2 percent lower at 11,711 as of 8:45 a.m.

Asian stocks declined on the final trading day of the month as President Donald Trump’s plans to impose new tariffs on China and renewed turmoil in emerging markets weighed on investor sentiment.

Short on time? Well, then listen to this podcast for a quick summary before the opening bell.