Sensex, Nifty End At Two-Week High Amid Dull Trading

Sunil Kewalramani, author and chief investment officer at Global Money Investor said investors should book profits while they are headed. He expects to see a “deep correction” in global equities, including India, in the next two months or so. “I think the correction should come in by around August 15-20,” he told BloombergQuint in a phone interview.

He said there could be multiple triggers to this correction ranging from geopolitical concerns or uncertainty brought upon by the GST rollout. “This seems to be the silence before the storm as far as the impact of the GST is concerned.”

While the overall impact of GST will be a big positive, he said countries that have adopted the unified tax regime in the past have taken at least 10-12 months to normalise. “The SME sector is in a complete disarray right now.” He hoped Prime Minister Modi will shift his focus to job creation and getting the consumption cycle going.

Indian shares ended at the highest point of the day in an otherwise lacklustre day of trade, where action was mostly stock-specific.

The NSE Nifty 50 index, locked in a 40-point range through the day, gained 0.25 percent to 9,637.60. The S&P BSE Sensex remained locked in a 110-point range ended 40 points off the day's high at 31,245.

Metals and the Media index gained over 1 percent each while the Real Estate index gained 1.5 percent.

Advance-decline was firmly in favour of the buyers. 1,130 stocks ended with gains while 544 stocks declined on the National Stock Exchange.

• Inox Leisure has 24.61 lakh shares change hands in two blocks at Rs 277.75 each on the BSE

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of IL&FS Engineering and Construction Ltd. gained as much as 10.31 percent to Rs 47.60 after it secured orders worth Rs 236.76 crore in the state of Jharkhand.

The company has received Letter of Intents (LoIs) from Jharkhand Bijli Vitran Nigam Ltd. under the Integrated Power Development Scheme.

While the first order worth Rs 126.38 crore involves supply of all equipments and material related to the contract for urban electrification works of Dhanbad electric supply circle, the other is for urban electrification of Dumka-Sahibganj Electric Supply circle. The second order is worth Rs 110.38 crore.

The orders are expected to be completed in the next 24 months.

Infrastructure major Larsen and Toubro has approved the issuance of Bonus shares in the ratio of 1:2. The company will issue one bonus share for every two shares.

The company has set July 14, 2017 as the record date to determine the members eligible for this issuance, it said in an exchange filing.

The stock has outperformed the S&P BSE Sensex index in 2017 with gains of 25.54 percent. The benchmark index in comparison, has returned 17.26 percent.

Shares of the steel maker jumped as much as 8.4 percent intraday. The company is facing insolvency proceedings after its lenders referred it to the bankruptcy court.

The company owes banks more than Rs 44,000 crore.

Liquor stocks traded higher after the Supreme Court on Tuesday observed prima facie that it does not intend to interfere with moves of the local governments to classify some highways as district roads.

The court would hear the plea regarding the ban on July 11. Some of the stocks that are gaining are:

• United Spirits (up 2.5 percent)
• United Breweries (up 1.75 percent)
• Tilaknagar Industries (up 7.53 percent)
• Radico Khaitan (up 8.49 percent)

Technical textiles manufacturer Garware-Wall Ropes Ltd. signed a Memorandum of Understanding (MoU) with Israel's Aero-T for manufacturing and supply of advanced aerostats for Indian defence, it said in an exchange filing.

Aero-T is a subsidiary of Israel-based RT LTA Systems, a designer, developer and manufacturer of aerostats.

The MoU facilitates Garware to establish an aerostat envelope production facility and Aero-T providing the technical know-how for the same.

Shares gained as much as 7.92 percent, the most in eight months to an all-time high of Rs 898.90, on the National Stock Exchange.

Shares of IDFC Bank Ltd. gained as much as 8.74 percent, the most in almost three months, to Rs 61.60, after it settled a probe by market regulator Securities and Exchange Board of India, “without admitting or denying the findings of fact.”

SEBI had conducted a probe against the bank over dealings in shares of Deccan Chronicle.

The bank has paid an amount of Rs 10.74 lakh as settlement charges, post which SEBI shall not initiate any enforcement action against the bank.

Following major automobile companies, Tata Motors has also decided to reduce prices of its passenger vehicles. The reduction ranges between Rs 3,300 to Rs 2.17 lakh depending on the model and variant.

The company expects GST to enhance the ease of doing business and usher in a new era for the economy, it said in an exchange filing.

Post the rollout of GST, most auto companies, from Maruti Suzuki India Ltd., to Mahindra and Mahindra Ltd., have cut prices of their products up to Rs 3 lakh in order to pass on the benefits to the consumers.

Shares gained as much as 1.72 percent to Rs 434.25 on the National Stock Exchange.

After hitting upper circuit for two consecutive sessions, shares of Shiva Cement Ltd. hit a lower circuit after JSW Cement denied media rumours of planning to reverse list via the company.

JSW cement plans on expanding capacity at Shiva Cement to 1 million tonnes per annum from 0.15 million tonnes per annum subject to clearences over the next 18 months.

The stock has gained almost 42 percent over the last week, convincingly outperforming the benchmark indices. The S&P BSE Sensex index has gained 1.4 percent over the last seven days.

Shares of Jubilant Life Sciences Ltd. gained for the third straight day.

Brokerage firm Motilal Oswal has initiated coverage on the stock with a 'Buy' rating and a price target of Rs 905.

In its research report, Motilal Oswal believes that the company has multiple triggers in place to drive earnings going ahead. Product launches and price hikes are likely to aid the life sciences business, the note added.

The report sees minimal regulatory risks for the stock in the medium-term while its debt reduction program remains on track.

Shares gained as much as 5.39 percent to Rs 727.95 on the National Stock Exchange.

Taking cue from the surge seen in ABC Bearings Ltd., other peer stocks are also trading with strong gains. FAG Bearings gained as much as 10.5 percent, SKF India gained as much as 6 percent, NRB Bearings gained as much as 11 percent while Menon Bearing gained as much as 16.4 percent in trade.

Shares of McNally Bharat Ltd. gained for the sixth time in seven session after it received an order for construction of an entry / exit structure of Elamkulam station and balance works in the main station building.

The order received from the Delhi Metro Rail Corporation Ltd. is for a value of approximately Rs 43.49 crore.

The stock gained as much as 8 percent to Rs 60 on the National Stock Exchange.

Shares of Confidence Petroleum Ltd. hit upper circuit for the third straight day after it received an order worth Rs 361.96 crore from Hindustan Petroleum Corporation Ltd., Bharat Petroleum Corporation Ltd., and Indian Oil Corporation Ltd.

The order is for supply of 30 lakh LPG cylinders. The order has been received by the company and its subsidiaries with option of an order for equivalent quantity next year, an exchange filing from the company said.

Shares of ABC Bearings have hit upper circuit for the second straight day after the company approved its merger with Timken India Ltd.

Shareholders of ABC Bearings will get five shares of Timken India for eight shares held, according to the filing to the stock exchanges. The amalgamation is subject to regulatory and shareholder clearances, and is expected to be completed by the fourth quarter of the current financial year.

At the end of FY16-17, while ABC Bearings had a net worth of Rs 139 crore while Timken India had a networth of Rs 618 crore.

Also Read: Bonanza For ABC Bearings Shareholders

Indian shares opened little changed in-line with Asian peers amid rising geopolitical concerns.

Both S&P BSE Sensex and the NSE Nifty 50 index opened little changed at 31,216 and 9,617 respectively. Most sectoral indices also traded flat.

Advanced-decline was firmly in favour of the buyers. 859 stocks advanced while 491 stocks declined on the national stock exchange. Stock of ABC Bearings hit upper circuit on news of its merger with Timken India.

The RBI last evening announced the indicative calendar for state government borrowing. The amount is higher than the previous quarter which may raise some concerns over higher supply and put pressure on bond prices.

Another key event to watch for is the debt quota auction for foreign investors today. NSE will auction about Rs 16,700 of bond quota. It will be important to see how much of it is picked up by foreign investors given that the last auction wasn’t fully subscribed and the RBI this week changed the rules to offer more longer-duration bonds in the auction.

In the currency market, the Asians are trading higher against the greenback. The Korean won is up 0.2 percent while an index of dollar strength is down 0.1 percent. Rupee is likely to open higher and may trade stronger. Traders expect a range of 64.65-64.75 to a dollar.

• Mahindra and Mahindra: Prices of small cars to be reduced by an average of 1.4 percent and that of sports utility and utility vehicles by an average of 6.9 percent
• Motherson Sumi: Will trade Ex-bonus for 1:2 issue. Futures and Options lot size has been revised to 3,750
• Aditya Birla Nuvo: Not available for trading as it merges with Grasim
• Mcnally Bharat Engineering: Received construction order worth Rs 43.49 crore from Delhi Metro Rail Corporation
• ICICI Prudential: Confirmed to have interest in taking over Sahara Life's Insurance business
• ABC Bearings: Board of Directors approve merger with Timken India subject to approval by the NCLT

For a complete list of stocks to watch, click HERE!

• Selling by foreign portfolio investors (PFI) continued.
• FPIs sold shares worth Rs 834 crore in the cash market on Tuesday. In fact, foreign investors have sold in shares worth Rs 3,400 crore in the last five days.
• In contrast, domestic institutional investors have been active buyers for the last five days, buying shares worth Rs 3,200 crore in the cash market.
• FPIs were net buyers to the tune of Rs 709 crore in the derivatives market.

Also Read: All You Need To Know Going Into Trade Today

• ABG Shipyard in ‘deep crisis’, posts Rs 822 crore loss in third quarter
• 813 farmers on loan waiver list from Mumbai, CM ‘surprised’
• M&M cuts vehicle prices to pass on GST benefits
• Essar Steel challenges RBI-directed insolvency proceedings
• Mistry brothers face trial in Rs 500 crore Defamation Suit
• Snapdeal board rejects $850 million offer from Flipkart
• Israel media sees ‘India coming out of the closet’ on bilateral ties
• Profligate state-level spending could derail Modi's reform plans

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, was little changed at 9,632.

Asian stocks were mixed in early trade amid heightened geopolitical concerns after North Korea test fired a ballistic missile, turning investors risk averse. The U.S. confirmed that rocket launched on July 4 was an intercontinental ballistic missile, which may give North Korea the capability of striking some part of the country.

Yen climbed while Japanese stocks slipped along with most of the Asian equities while U.S. markets set to reopen after July 4 holiday.

Crude oil swung between gains and losses, but held on to the $47 barrel mark, following a 10 percent rally after falling into bear market last month. Gold, meanwhile, climbed for a second day to $1,227.28 an ounce.

Some of the key data releases expected today are: China and Japan PMI (Purchase Manager’s Index) data, Philippines inflation data for June and interest rate decision from Bank of Thailand.