Nifty Ends Above 9,900 For First Time Ever

Indian shares climbed, with key equity benchmarks registering record highs for a sixth straight day.

The S&P BSE Sensex gained 0.17 percent to 32,074, extending its biggest weekly gain in four months. The NSE Nifty 50 rose 0.3 percent to 9,915.95. This was the 51-share index’s first close above the 9,900-mark.

Foreign buying of India’s stocks accelerated in the past week, with the 5-day average of net inflows increasing to $32.7 million rising above the 20-day average of $2.70 million, according to CDSL data compiled by Bloomberg.

Wipro Ltd., the country’s third-largest software firm, was the top gainer after saying it’s considering a buyback.

The Nifty is currently trading in a safe zone, Rakesh Bansal, vice president, RK Global told BloombergQuint by phone. “The index should easily take out the 10,000-mark.”

Bansal said Indian stock market is currently run by domestic institutional investors, usually a feature of matured markets. “We are now seeing beaten down pharma and I.T. participate, which is another healthy sign.” He said the Nifty Bank has more room on the upside.

The Gujarat High Court on Monday rejected Essar Steel's plea against bankruptcy proceedings initiated by its lenders at the NCLT.

Essar Steel was one of 12 companies picked by the Reserve Bank of India (RBI) for resolution under the Insolvency and Bankruptcy Code (IBC).

The RBI’s directive followed amendments to the Banking Regulation Act, which allowed the regulator to intervene directly in the resolution of nearly Rs 10 lakh crore in stressed assets on the books of Indian banks.

Shares of fast food chain operator jumped much as 6.7 percent to the highest level since August 26 of last year.

The company's net profit grew 26 percent year-on-year to Rs 24 crore from Rs 19 crore. The company's earnings before interest, tax, depreciation and amortisation grew 37.9 percent to Rs 80 crore from Rs 58 crore in the year-ago period.

EBITDA margins expanded to 11.8 percent from 9.5 percent compared to the previous year.

The company in a separate press statement announced the resignation of its Chief Financial Officer Sachin Sharma. The board will name a new CFO in due course, the statement added.

Shares of the state-owned oil explorer gained as much as 1.8 percent to Rs 274.

The company may buy out government’s 66 percent stake in Oil India Ltd., news channel ETNow reported quoting unnamed sources, adding no decision has been taken on the nature of the transaction.

India said in February it plans to create an oil giant through consolidation and mergers that could compare with international companies and withstand volatility in oil prices. The stake sale will also help the government meet its ambitious disinvestment target.

Shares of Petronet LNG Ltd. fell as much as 2.23 percent to Rs 206.10 after its LNG imports in June were at a record low of 8 spot short-term cargoes compared to 12 in June last year.

Despite a 5 million tonne increase in capacity at its Dahej plants, volumes are likely to be flat during the April-June quarter, both on a sequential as well as a year-on-year basis. Utilisation at the Dahej plant is also likely to remain below 100 percent, Nomura said in a research report.

Nomura attributes this low utilisation due to weak off-take by the fertiliser industry. The report also says that the company is less likely to surprise on the volume front in Q1FY18.

Shares of Prakash Industries Ltd. gained as much as 4.36 percent to Rs 120.80, the highest level in three years after its net profit increased four-fold during the April-June quarter.

Net profit rose to Rs 59.41 crore from Rs 14.04 crore during the corresponding period last year, the company said in an exchange filing.

The company's revenue from operations increased 13 percent to Rs 723 crore from Rs 639 crore during the year-ago period.

The growth in profitability is backed by better sales realisation and major cost saving measures taken by the company, it said in a statement.

• CARE Ratings places Reliance Capital’s long-term debt on ‘watch with developing implications’ due to its exposure to Reliance Communications. Also on watch: Reliance Home Finance and Reliance Commercial Finance.
• Moody’s changes rating on Adani Abbot Point to Stable from Negative

Eros International Media Ltd.'s shares surged as much as 4.51 percent to Rs 224 post its promoter Eros Worldwide FZ LLC sold 1.33 percent out of its 50.21 percent stake in the company on National Stock Exchange, according to data on the exchanges.

Post stake sale, promoter holding has now come down to 48.88 percent.

The stock has been gaining for two consecutive days, and has attained it has gained the most since July 6, 2017.

The shares have outperformed the benchmark index, S&P BSE 500 on a year-to-date basis.

They have gained 35.2 percent, versus the 21.8 percent gain of the index.

Shares of the budget carrier gained as much as 6.6 percent, the most since June 07, after broking firm SBICap hiked its target price on the stock.

The brokerage says:

• Maintain ‘Buy’ with target price at Rs 138 versus Rs 128 earlier
• Operating environment for the sector is turning favourable
• Crude prices below $50/b and an appreciating INR to result in a benign cost structure
• Profits revised for FY18E and FY19E by 19 percent and 16 percent
• Assumed higher liability on account of pending case at Rs 880 crore

Shares of Rolta India Ltd. gained as much as 8.49 percent to Rs 63.60 after it got selected to provide a transformation solution worth $10.8 million to a Middle-eastern country under the Geospatial Digital Transformation program.

The solution will be an integral element for supporting a national level Digital Transformational program over the next 15-years, the company said in an exchange filing.

This is the stock's biggest gain in a week. However, it has underperformed the S&P BSE 500 index on a year-to-date basis, gaining only 0.6 percent during the year so far.

Shares of the private lender fell as much as 4.62 percent, the most since June 23, after it bank reported a deterioration in its asset quality during the April-June quarter.

The bank's Gross non-performing assets, as percentage of total advances, increased to 4.34 percent from 4.21 percent in the previous quarter. Net non-performing assets rose to 3.20 percent from 2.64 percent in the same period.

The bank also recorded a 24 percent growth in provisions to Rs 198.9 crore from Rs 160 on a quarter-on-quarter basis.

Shares of the pharmaceutical company gained as much as 3.35 percent to Rs 1,845 after the U.S. drug regulator issued no Form 483 post the inspection of its facility in Taloja.

The inspection was conducted between July 10-July 14, 2017.

Among the 12 analysts tracked by Bloomberg who cover the stock, 50 percent have a 'Buy' rating on the stock while 42 percent have a 'Hold.' The analysts' consensus price target of Rs 2,096.27 was 15.5 percent above the current market price.

Shares of the city gas distributor gained as much as 3.8% to highest since its listing in December 2003 after it received approval to lay gas distribution network in Gurugram, near Delhi.

The approval potentially opens up a “whole new market” for IGL, broking firm Citi said in a July 16 investor note. The Gurugram supply may add Rs 5-6 to the company’s earnings per share, IDFC Securities said in a separate note.

Shares of Religare Enterprises and Fortis Healthcare declined after the debt rating of its holding company was downgraded to 'default' by India Ratings. The default rating was assigned after the company missed scheduled coupon payments on its non-convertible debentures in June.

• Religare Enterprises (-8.9%)
• Fortis Healthcare (-12.8%)

Shares of the software services provider gained as much as 5 percent, the most since January 19, 2015, after the company said it will consider a stock buyback plan on July 20.

If approved, Wipro will join the growing list of Indian IT firms that have announced buyback offers to return surplus cash on their books to their shareholders. As on March 2017, the country’s third largest IT company had cash and cash equivalents totalling Rs 5,271 crore ($ 813 million) on its books.

The stock was the best performer both the Sensex, Nifty and Nifty IT indices.

With inputs from PTI

Shares of the drugmaker gained as much as 2.9 percent, the most in a week, to Rs 545 after it received an approval to market capsules used for the treatment of multiple sclerosis.

The capsules will be produced at the group's formulation manufacturing facility at the Pharma Special Economic Zone in Ahmedabad. The group now has more than 120 approvals and has filed over 300 ANDAs so far, the company said in an exchange filing.

The stock gained 51 percent so far this year, making it the second-best performer on the Nifty Pharma index.

Indian shares began the week on a steady note, with key equity benchmarks continuing to hover near all-time highs.

The S&P BSE Sensex gained 0.2 percent to 32,107 while the NSE Nifty 50 index rose 0.2 percent to 9,911— around two odd points away from its intraday record.

Foreign buying of India’s stocks accelerated in the past week, with the 5-day average of net inflows increasing to $32.7 million rising above the 20-day average of $2.70 million, according to CDSL data compiled by Bloomberg.

Except the Nifty FMCG (down 0.9 percent) all other sector gauges compiled by the NSE advanced led by Nifty IT and Nifty Auto indices. The market breadth was skewed firmly in favour of the buyers. About 3 stocks gained to every 1 that declined on the NSE.

Indian rupee is seen opening strong against the dollar today, in line with other regional currencies after disappointing U.S. inflation data reinforced doubts about the prospects of further Federal Reserve interest-rate tightening.

Nomura Asset said that there is no need to turn bearish on emerging markets as outflow risk is low. Nomura also said that India and Indonesia are relatively more attractive in Asia, due to their lower debt levels.

Moreover, it said the recent weakness in commodity prices is positive for India as it helps to slow inflation and thereby create space for the RBI to cut interest rates.

Indian 10-year is seen trading in a range after posting its best weekly gains in five. Strong demand in Friday's auction reflects that the market has positioned for a rate cut on August 2.

• Nifty futures premium expands to 13 points from 4 earlier
• 9,600 - 9,800 continue to be strong support levels for the Nifty with Open interest of Rs 60 lakh shares each
• Call wtiters shedding positions at lower levels and writing at 9,900 - 10,000
• Twenty lakh shares were added in open interest by put writers at 9,900 level
• Options data indicates strong support and marginal resistance to Nifty

• TCS: Remains ‘Hold’ at HSBC with a price target cut to Rs 2,380
• SpiceJet: Remains ‘Buy’ at SBICap with a price target of Rs 138

Infosys

• Remains ‘Sell’ at Goldman Sachs with a price tag of Rs 799
• Remains ‘Underperform’ at CLSA
• ‘Neutral’ at Nomura with a price tag of Rs 1000
• ‘Neutral’ at Credit Suisse with a price tag of Rs 1,025
• Remains ‘Buy’ at HSBC with a price target of Rs 1,150

• Biocon: Upgraded to 'Buy' at Axis with a price target of rs PT 470
• Divi’s Laboratories: Cut to 'Sell' at Karvy Stock Broking
• Dr Reddy’s: Raised to 'Hold' at Karvy Stock Broking
• Infosys: Upgraded to 'Buy' at KR Choksey with a price target of Rs 1,158
• JK Cement: Raised to 'Buy' at Karvy Stock Broking with a price target of Rs 1,216

• Cadila Healthcare: Received tentative approval from the U.S. FDA to market Fingolimod capsules used for treatment of multiple sclerosis
• Alkem Labs: U.S. FDA completes inspections of its Taloja facility. No Form 483 issued
• Indraprastha Gas: Received permission from Government of Haryana to lay city gas distribution network in Gurugram
• Shreyas Shipping & Logistics: Signed a memorandum of agreement for acquisition of 1100 teus multipurpose vessel. Delivery expected in early September, 2017
• SBI: Filed insolvency plea against Adhunik Metalinks in National Company Law Tribunal.

M&M

• LIC divests 2 percent stake
• Sold over 1.2 crore shares through market sale
• Total holding now reduced to 9.95 percent

Bank Of Baroda

• LIC divests 2.04 percent stake
• Sold over 4.7 crore shares in the open market
• Total holding now reduced to 9.28 percent

Suzlon

• U.S. Subsidiarya ‘Suzlon Energia Eolica Da Brasi’ files for voluntary liquidation in Brazil
• Decision taken in wake of continued financial stress in its operations

ICICI Bank

• ICICI Lombard Insurance files DRHP with SEBI
• To offer up to 8.62 crore shares via IPO

• GSTN portal to be ready for invoice uploading from July 24
• TRAI to discuss tariff floor price with telcos on July 21
• Religare holding company debt downgraded to default
• Six Tata firms to gain the most from team N Chandrasekaran’s revamp
• Suzlon starts closing down overseas loss-making subsidiaries to get back in shape
• A month after RBI directive, banks wade through insolvency process
• Government needs to incentivise buying e-vehicles, says Anand Mahindra
• Oil ministry intensifies monitoring of ONGC fields

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, gained 0.47 percent to 9950.

Most of Asia climbed while Chinese stocks declined amid concern that policies to reduce leverage in the region’s biggest economy will curb earnings.

The Shanghai Composite Index is on course for its largest slide since December, even after data showed the economy maintained its momentum last quarter. The MSCI Asia Pacific Index was higher for a sixth day after soft June U.S. consumer price data reinforced the need for gradual tightening of monetary policy.

The kiwi sank after the deputy governor of New Zealand’s central bank said a lower currency would help rebalance growth. The U.S. dollar remained close to the lowest since September with speculators holding on to the most bearish positions on the greenback since 2013.

Oil held gains above $46 a barrel as optimism that supplies are poised to fall faster outweighed an increase in U.S. rigs drilling for crude. Futures were little changed in New York, after rising 5.2 percent last week.

Gold climbed 0.2 percent to $1231 an ounce, a second day of advance.