Sensex Holds On To Gains, Nifty Not So Lucky

Sensex extended gains helped by buying in the last hour trade while Nifty ended unchanged.

The 31-stock index closed 66 points or 0.17 percent higher at 39,112.74. The NSE Nifty 50 Index was at 11,691.45 at close. The broader market index represented by the NSE Nifty 500 Index closed 0.26 percent lower.

“Going forward, the near-term movement is likely to be driven by monsoon progress as well as global indicators,” said Jayant Manglik, President - Retail Distribution, Religare Broking Ltd. “The recent retaliatory tariff by India could escalate trade war tensions between U.S. and India. This could further induce volatility into Indian markets.”

The market breadth was tilted in favour of sellers. About 1,292 stocks declined and 486 shares advanced on National Stock Exchange.

Six the 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Realty Index’s 1.1 percent gain. NSE Nifty Pharma Index was the top loser, down 1.6 percent.

Market Wrap

Shares of the Bengaluru-based jewellery exporter rose for the sixth-straight session and rose nearly 1.2 percent to Rs 696.35 each.

The company bagged an export order worth Rs 942-crore from Germany, according to an exchange notification. The order is slated to be completed by August 2019, the notification said.

The stocks traded 30 percent below the Bloomberg one-year consensus target price.

Indian equity markets are witnessing a sudden fall on account of liquidity issues and panic tied with Budget slated to be presented next month.

“There is a set of stocks having issues with the leveraged balance sheets. Liquidity crunch has impacted lot of companies in terms of higher cost of borrowings,” said Siddaratha Khemka, head of research at Motilal Oswal Securities. “Also, fears of a new wealth tax, real-estate tax announcement is creating panic. One must wait for the budget to go ahead and take positions.”

Indian equity benchmarks declined led by losses in Indiabulls Housing Finance and automakers.

Sensex traded flat at 39, 051 while Nifty Index was down 0.1 percent at 11,681.30. Automobile manufactures in the Index—Tata Motors, Hero Motocorp, Tata Motors and Mahindra & Mahindra were among the top losers. Indiabulls Housing Finance continued to remain the top Nifty loser, down 12.6 percent to Rs 536.40, recovering from an intraday low of 20 percent.

Shares of the Maharashtra-based company declined for the fourth day in a row after it slumped 28.9 percent to Rs 19.50 apiece.

India Ratings cuts its long term issuer Rating to BBB with outlook at 'Watch Negative', according to its statement. The downgrade reflects deterioration in the liquidity profile on account of delay in realisation of receivables from its micro-irrigation systems (MIS) segment, the statement said.

The trading volume was over 10 times the 20-day average for this time of the day, bloomberg data showed.

Shares of the oil marketing companies fell in today’s trade after a one-day rally. Crude Oil prices gained as much as 0.6 percent to $62.55 per barrel.

• Indian Oil fell as much as 2.6 percent intraday to Rs 153.50 apiece.
• BPCL declined 1.7 percent to Rs 378.85.
• HPCL fell 3.3 percent to Rs 291.70.

Shares of India’s largest infrastructure company gained for the second-straight day rose as much as 1.6 percent to Rs 1,530 apiece.

The company received a bagged a contract classified as significant as it is valued between Rs 1,000-2,500 crore for water supply and distribution project in Sri Lanka, according to an exchange filing. The project will include design and construction of intake structure and water treatment plants, the filing said.

L&T traded at 21 times its estimated earnings per share for the coming year, Bloomberg data showed. The stock traded 11 percent below the Bloomberg one-year target price.

Indian equity indices held gains in today's session mirroring their Asian peers.

The S&P BSE Sensex rose nearly 0.3 percent to 39,200 and the NSE Nifty 50 gained as much as 0.25 percent to 11,721.15. However, Nifty Midcap 100 fell 0.8 percent to 17,190.

Also, Indiabulls Housing Finance was the worst performer on Nifty as it fell 9 percent to Rs 556.25 each, recovering from an intraday low of 20 percent.

Shares of the financial services conglomerate fell sharply in today’s trade.

Indiabulls Housing Finance declined as much as 20 percent to hit a four-year low of Rs 487.85 apiece. Indiabulls Real Estate was locked in the lower circuit of 20 percent at Rs 89.95 each.

Shares of the automaker fluctuated between gains and losses to trade at Rs 625.35 each.

Mahindra & Mahindra announced price hikes of up to Rs 36,000 for cars with effect from July 1, according an exchange filing. The price increase is due to the implementation of safety norms across all passenger vehicles in India, the filing said.

The stock fell 30 percent in the past 12 months compared with a 11 percent gain in the Sensex.

Shares of the Mumbai-based infrastructure company fell for the third session in a row after it declined 14.2 percent intraday to Rs 89.55 each.

National Highway Authority of India is seeking a new investor for Mumbai-Pune expressway as its current agreement with IRB Infra Developers expires in August, according to an Economic Times report citing unnamed sources.

The relative strength index on the stock was below 30, indicating it may be oversold. The stock lost 21 percent in the last five trading sessions.

Markets trading at premium valuations such as India may witness a stock selloff if the Federal Reserve’s commentary scheduled later today suggests halting of rate cuts.

“There a new stocks driving up the indices in banking and IT sectors," said Dhananjay Sinha, Head of Strategy & Chief Economist at IDFC Securities in an interview to BloombergQuint. "Going forward, if there are surprises with respect to Fed's commentary (signalling no further rate cuts), yields will bounce back. This may lead to a possibility of correction some of the highly priced indices.”

In that market scenario, Sinha said, the strategy one is expected to play is taking some money out banking space reallocating them in potentially “outperforming” sectors such as IT in anticipation of a weaker currency.

Watch the full conversation here:

Indian equity benchmarks extended gains for the second-straight day after the trade tensions between U.S.-China showed signs of deescalation.

The S&P BSE Sensex rose nearly 0.8 percent to 39,363.60 and the NSE Nifty 50 gained as much as 0.77 percent to 11,781.90. The small-cap index represented by the NSE Nifty SmallCap 100 rose 0.3 percent to 6200.85.

Jet Airways further declined 23 percent intraday to Rs 31.25 each as lenders decided to take the company to National Company Law Tribunal on Tuesday.

Shares of the steel maker snapped its four day losing streak and gained close 4.1 percent to Rs 491.80 each.

Brokerage firm Goldman Sachs reinstated 'Buy' with target price of Rs 570 on the stock. On the Indian steel sector as a whole, Goldman said the global activity slowed significantly and China growth concerns impact spreads.

Here’s what else Goldman had to say on the sector

• Domestic demand resilient, but spreads unlikely to bounce back.
• Preferred integrated steel mills as ore availability remains uncertain.

The Nifty Metal Index, up 2.1 percent, was the top sectoral performer among the gauges compiled by National Stock Exchange. "Easing macro global situation in anticipation of Trump’s re-election and the rupee strengthening thereof has resulted in investors settling for defensive stocks like metals and IT services," said Avinash Gorakshakar, head of research, Joindre Capital Services to BloombergQuint.

The stock traded 7.2 times its estimated earnings per share for the coming year, according to Bloomberg data.

Shares of the housing finance company rose 5.6 percent, the most in a month, to Rs 363 apiece.

Canara Bank board permitted to sell stake in the company in part or full, according to an exchange filing. Stake sale to happen at an appropriate time depending on the market conditions and available options, the filing said.

The trading volume was more than five times its 20-day average for this time of the day, Bloomberg data showed. Also, shares of Canara Bank rose nearly 1.8 percent to Rs 264.70.

Indian equity benchmarks opened lower, led by the gains in Tata Steel and Indiabulls Housing Finance Ltd.

The S&P BSE Sensex rose nearly 0.66 percent to 39,305.25 and the NSE Nifty 50 gained as much as 0.70 percent to 11,771.80. The broader market index represented by the NSE Nifty 500 Index rose as much as 0.68 percent.

The market breadth was tilted in favour of buyers. About stocks 941 gained and 523 shares advanced on National Stock Exchange.

All the sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index’s 1.77 percent gain.

The Indian rupee opened higher against the U.S. dollar. The home currency appreciated as much as 0.18 percent to 69.57 against the greenback.

Today, rupee traders will keep an eye on flow of funds from abroad. Global funds bought a net Rs 31,700 crore of local stocks on Tuesday. Rupee gained 0.3 percent to close at 69.69 to the dollar on Tuesday.

June Futures

• Nifty futures closed at 11,700, premium of 9 points versus 25.5 points
• Nifty futures open interest down 3 percent, sheds 5 lakh shares in open interest.

Bank Nifty

• Bank Nifty futures closed at 30,331, discount of 20 points versus premium of 52.7 points.
• Bank Nifty futures open interest down 5 percent, sheds 88,000 shares in open interest.

Options

• Nifty PCR at 1.13 versus 1.08 (across all series).

Nifty Weekly Expiry June 20

• Max open interest on call side at 11,900 (26 lakh shares).
• Max open interest on put side at 11,700 (12.2 lakh shares).
• Open interest addition seen at 11,750C (+3.8 lakh shares), 11,850C (+3.5 lakh shares).
• Open interest shedding seen at 12,000C (-5.6 lakh shares), 12,100C (-3.2 lakh shares).

Nifty Monthly Expiry June 27

• Max open interest on call side at 12,000 (24 lakh shares).
• Max open interest on put side at 11,500 (28.4 lakh shares).

Stocks In F&O Ban

In Ban:

• DHFL
• IDBI Bank
• Jet Airways
• PC Jeweller
• Reliance Capital

Out Of Ban:

• Reliance Infrastructure

• Max India: 2.75 crore shares pledged by Max Ventures released (9 crore shares pledged as of March 2019).
• Max Financial Services: 48.6 lakh shares pledged by Max Ventures released.
• Adani Enterprises: 19 lakh shares pledged by Gautam Adani/Rajesh S Adani (on behalf of SB Adani Family Trust) released.
• Adani Transmission: 29 lakh shares pledged by Gautam Adani/Rajesh S Adani (on behalf of SB Adani Family Trust) released.
• JSW Steel: Promoter pledged additional 1.08 percent equity.
• JSW Energy: Promoter pledged additional 0.69 percent equity.

Man Industries

• Kobe Steel sells 12 lakh shares at Rs 51.5 per share; Promoters bought the shares.

• Punjab National Bank Basel III-compliant tier-I bonds worth Rs 6,750 crore downgraded to ‘A/Negative’ versus ‘A+/Negative’ earlier by India Ratings. The agency believes that any delays in the management-expected timelines for capital augmentation triggers is likely to result in continuing pressure on capital ratios.
• DHFL repaid Rs 7.5 crore on June 18.
• NMDC produced 3.04 MT iron ore in May 2019 versus 2.12 MT year on year. Sales at 3.37 MT versus 2.31 MT year-on-year.
• Canara Bank board permitted stake sale in Can Fin Homes. Stake sale to happen at an appropriate time depending on the market conditions and available options.
• Quickheal clarified that promoters had tendered 42 lakh shares as part of the buyback program and not sold the same. Post buyback, promoter shareholding in the company has gone up from 72.32 percent to 72.83 percent.
• The Reserve Bank of India imposed a penalty of Rs 1 crore on HDFC Bank for non-compliance with directions issued by RBI on Know Your Customer/Anti-Money Laundering norms and on fraud reporting.
• Jain Irrigation: India Ratings cuts its long term issuer Rating to BBB with outlook at 'Watch Negative'. The downgrade reflects deterioration in the liquidity profile on account of delay in realisation of receivables from its micro-irrigation systems (MIS) segment.

• Brent crude rose 0.4 percent to $62.4 per barrel.
• West Texas Intermediate added 0.7 percent to $54.25 a barrel.
• Gold was at $1,346.50 an ounce.

London Metal Exchange

• Copper rose for the second day in a row, ending 1.78 percent higher.
• Zinc ended higher for the second-straight session, up 1.7 percent.
• Nickel closed 0.1.54 percent higher.
• Aluminium snapped its three-day fall, up 1.28 percent.
• Lead ended higher for the second day, up 1.78 percent.
• Tin ended higher, closed 1.16 percent higher.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 11,758.50 as of 7:40 a.m.

Asian stocks rose, building on gains in global shares amid optimism over progress in the U.S.-China trade war and indications of more stimulus from the European Central Bank.

Japan’s Topix index and South Korea’s Kospi both climbed about 1 percent, with more modest gains seen in Australia.

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