Nifty Holds 9,650 As Gains In Tech Shares Offset Decline In Banks, Auto

Indian shares were little changed as gains in energy producers and technology companies were offset by losses in select banking and automakers. Tata Motors was the top gainer on the Sensex as its parent was said to be considering an initial public offering in luxury car-maker unit Jaguar Land Rover.

The S&P BSE Sensex closed the session little changed at 31,297 after changing direction at least 10 times in the last hour of trade. While the NSE Nifty 50 index too ended flat, it managed to hold on to the 9,650-mark. The market breadth, however, was more indicative of the weakness in trade. About 2 stocks declined to every 1 that advanced on the NSE.

Milan Vaishnav, technical analyst at Gemstone Equity Research & Advisory Services expects the Nifty remain rangebound for the next couple of weeks, citing the failed attempt at a follow-up rally to Monday’s advance. “The market is looking a little overbought,” he told BloombergQuint.

Vaishnav is bullish on the auto, technology and select private banks. “TCS, Infosys and HCL Tech are looking attractive right now,” he said. Meanwhile, he said the run up in the real estate stocks may be coming to an end.

He advised investors sitting on the side-lines to adopt a stock specific approach. “For the ones invested, they should guard their profits,” he said referring to a strategy of keep a trailing stop loss.

Shares of the theme park operator jumps as much as 11 percent, the most since February 23, after the company approved shares and warrants to shareholders.

The company will allot 12.5 lakh shares at Rs 95 each. It also approved allotment of five convertible warrants. The warrants will be convertible into shares at Rs 2.37 crore each.

The initial public offering gets bid for 1.83 crore shares versus 1.59 crore on offer.

• QIB subscribed 1.29 times
• HNI subscribed 0.06 times
• Retail subscribed 2.34 times
• Employee subscribed 0.64 times

Source: NSE as of 12:15 p.m.

European stocks rose, heading for their best three-day rise since April, boosted by gains in media shares and optimism about the U.S. economy.

Shares of the logistics companies rallied anywhere between 9 percent and 2 percent as the country geared up for the launch of unified tax regime.

Top Gainers

• Snowman Logistics (+9% to Rs 58)
• AllCargo Logistics (+2.4% to 177.40)
• Gati (+5.9% to Rs 131.20)
• Sical Logistics (+6.8% to Rs 259)
• Patel Integrated (+11.6% to Rs 92)
• Container Corp of India (+3.3% to Rs 1,169)

Gulf Oil Lubricants Rises Most In 8 Months

• The maker and supplier of lubricating oils and greases rose as much as 12 percent, the most intraday in the last eight months.
• Trading volume rose over 3 times its 20-day average.
• The stock is the top performer on the S&P BSE 500
• Momentum indicator Relative Strength Index (or RSI) is close to 70, which indicates the stock may be overbought
• Year-to-date, the stock has risen 33 percent, compared to a 13.9 percent gain in the S&P BSE India Oil & Gas Index

Shares of the drug maker fell by as much as 1.9 percent after research firm Credit Suisse said the price erosion risk faced by the company is highest as 75 percent of U.S. profit is from low-competition products.

Lupin could see “double-digit” fall in product prices annually over the next three years as more rivals start selling key drugs, Credit Suisse said in a note dated June 19. It cut the pharma firm’s earnings per share estimate for fiscal year 2018 by 6 percent and 2019 by 8 percent.

The brokerage house also maintained an 'Underperform' on the stock, revising the target price to Rs 1,020 from Rs 1,100 earlier.

Shares of the power producer gained as much as 4 percent after Indian Energy Exchange filed draft papers for an initial public offering with the capital market regulator.

Tata Power may sell its stake in Indian Energy Exchange via the IPO, according to a report by Moneycontrol. The stock has risen for a third straight session and was the top performer on the S&P BSE Power index.

Shares of the tyre manufacturer rose as much as 1.5 percent to Rs 1,633.50 after HSBC increased its earnings forecast for the company by 4-8 percent for FY18-19.

Margins to be supported due to increase in product prices, says the brokerage firm. It maintains a 'hold' on the stock with a target price of Rs 1,540, citing improving market outlook. However, it added that valuations look rich at current levels.

The private sector lender pared early losses and rose almost 0.8 percent after the stock price adjusted for bonus share issue.

On May 3, the bank announced issue of bonus shares in the ratio of 1:10. "The post-bonus paid-up share capital is expected to be around Rs 1,281.62 crore, consisting of 640.8 crore shares of Rs 2 each," the bank had said in its filing on May 4.

The rupee weakened 10 paise to 64.53 against the U.S. dollar in early trade. U.S. Fed official’s comments that the central bank is not done with raising borrowing costs have stoked fears of capital outflows from emerging countries, including India.

According to traders, the dollar's strength against some currencies overseas on Fed's plan to stick to hiking rates pushed down the rupee. A higher opening in the domestic equity market salvaged the situation for the rupee to an extent though, they said.

Yesterday, the rupee had ended flat at 64.43 against the U.S. currency in a fairly range-bound trade.

PTI

Shares of the automobile manufacturer rose as much as 2.77 percent to Rs 460 after Bloomberg reported Tata Group is considering an initial public offering of Jaguar Land Rover, citing people with knowledge of the matter.

Selling stock would help Jaguar Land Rover fund the development of new models and investments in connected-car technologies and autonomous driving systems, the report said.

Bloomberg data showed that about 50 percent of analysts covering the company have changed their price targets over the past month (16 up, 5 down, 20 unchanged, 1 dropped).

Did You Know? Tata Motors Is The Lone Loser On Auto Index This Year

Indian shares climbed for a third day as local technology companies joined their global peers in a rebound rally with investors reverting to risk-on trade. Optimism also rose on the back of the Reserve Bank of India’s measures to help clean up bad loans from the banking system.

A gauge of the country’s top 12 lenders fluctuated between gains and losses, after rising little over 1 percent to a fresh lifetime high.

The S&P BSE Sensex gained 0.2 percent to 31,392 while the NSE Nifty advanced little under 0.2 percent to 9,674. The market breadth was skewed in favour of the bulls. About 2 stocks gained to every 1 that declined on the NSE.

The global brokerage house says Nifty is tracking around its bull case target of 9,600. “Indian equity market appears full valued to us on a near-term basis,” JPMorgan said in a research note.

More From JPMorgan Note

• Rally has been driven by global risk-on and local policy support
• See consolidation as valuations turn rich at 18 times forward earnings
• Believers in the earnings growth recovery story; but trend could be patchy
• Our global equity strategists are also calling for a pause in rally in equity markets
• See prospect for a 25 basis point cut in policy rates later this year
• Bullish on financials, infrastructure, urban consumption
• Remain cautious on rural consumption and telecom

The brokerage house initiated coverage on the stock with a ‘Buy’ rating with target price of Rs 286 -- a potential upside 30 percent from Monday’s close

Goldman says

• The company is well-placed to benefit from the increasing penetration and premiumisation
• Revenue expected to grow at 16 percent CAGR over FY17-20E
• Lighting segment to grow at 19 percent CAGR
• Electric consumer durables to grow at 14 percent CAGR
• Margins expected to remain stable
• 1,50,000+ touch points present; more touch-points across the country to drive higher growth

• Bhushan Steel: Says report of CFO grilling by SFIO incorrect
• Fortis Healthcare: RHC tells Delhi court won’t change shareholding in Fortis
• ICICI Bank: Trades ex-bonus
• Religare Enterprises: Has insufficient cash on book to meet payouts, India Ratings says
• Satin Creditcare: FIIs can now invest 24-49 percent in company’s equity, RBI says
• SpiceJet: In commitment with Boeing for 40 737 MAXs worth $4.7 billion
• Tata Motors: Tata Group said to mull IPO of luxury unit Jaguar Land Rover
• Wipro: Shareholders approve free share issue

For a complete list of stocks to watch, click here

IPO Watch

• Eris Lifesciences IPO gets 75 percent demand on second day sale; offer scheduled to close Tuesday
• Central Depository Services IPO fully subscribed, gets 205 percent demand

The U.S. dollar rose against most of the currencies in the region. The reason is the New York Fed President William Dudley's positive tone on the world’s largest economy. He also said that a tight labour market will eventually trigger a rebound in inflation.

The Indian rupee may also open weak against the greenback. The currency will also face downward pressure from higher crude imports last month.

Indian bonds have gained momentum as global funds continue to pour into rupee debt for 18 days in a row. On Monday the inflows rose by Rs 1,700 crore , cutting yield on the benchmark bonds to the lowest since February.

The bonds may continue to look up on expectations easing inflation will prompt the central bank to cut interest rates. Indian inflation has now melted to a record low 2.2 percent.

Indian metal stocks will be in focus today, as their larger international counterparts snapped a week-long losing streak.

• Tata Group said to mull IPO of luxury unit Jaguar Land Rover (Bloomberg)
• India May crude imports rise 1.4 percent YoY to 17.8 million tonne
• PESB recommends Shashi Shanker for post of ONGC chairman
• BEE unveils energy savings code for buildings
• Lockheed ties up with Tata advanced to make F-16 Planes in India
• RHC Holding tells Delhi court won’t change shareholding in Fortis
• Boeing, SpiceJet in commitment for 40 737 MAXs worth $4.7 billion
• India court to hear SEBI-Sahara refund case on July 5
• India monsoon seen progressing to soybean, pulses, cane areas
• Monsoon rainfall 5 percent above normal as of June 19
• Magma Fincorp to consider merger of unit Magma Advisory Services Ltd.
• Global funds sell Rs 250 crore of local stocks; domestic funds buy Rs 530 crore yesterday: NSE provisional data
• LG to supply automotive electronics to Jaguar Land Rover: Edaily

Also Read: BJP’s Nomination Of Kovind For President Leaves Opposition Flummoxed

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, was little changed at 9,683.

Most Asian stocks climbed in early trade, after their U.S. counterparts touched fresh record high as technology shares continued a rebound. Investors also were reassured by Fed Bank of New York President William Dudley comments that halting the tightening cycle now would imperil the economy.

The Nasdaq 100 Index jumped the most since November, as large-cap tech stocks recovered from two weeks of decline. The dollar held gains, while the yen and Korean won were the biggest laggards.

Oil was little changed at $44.19 a barrel, after settling at the lowest level since November on Monday. Crude has fallen for four weeks straight as U.S. drillers continue to add rigs, blunting OPEC-led efforts to rebalance an oversupplied market.

Gold rose 0.1 percent to $1245 an ounce, after closing Monday at the lowest in more than a month.

Besides the usual equity movements, investors will also await MSCI decision on whether it approved Chinese-listed stocks in its global benchmarks. MSCI has denied entry to the $6.8 trillion onshore market three times in the past over issues including capital controls and long trading halts.