Sensex, Nifty Snap Four-Session Winning Streak As Selloff In Metals, Banks Offset OMCs Rally

India stocks snapped a four-session winning streak, tracking peers across Asia, on concerns that higher inflation in the U.S. may push up interest rates, which could slow dollar-flows into emerging markets.

The S&P BSE Sensex dropped 0.7% to 49,161.81, while the NSE Nifty 50 Index declined 0.6% to 14,850.75. Housing Development Finance Corp. contributed the most to the index decline, decreasing 2.7%. JSW Steel Ltd. had the largest drop, falling 3.2%.

The broader market outperformed their larger peers with the S&P BSE MidCap gaining 0.6% and S&P BSE SmallCap climbing 0.8% at the close.

Ten of the 19 sector sub-indices compiled by BSE Ltd. advanced, led by a gauge of utilities. The S&P BSE Metal saw some profit-booking after the index hit a record on Monday.

Godrej Consumer reported net income for the fourth quarter that missed the average analyst estimate.

• Net income Rs 366 crore, +59% YoY, estimate Rs 414 crore
• Revenue Rs 2,730 crore, +27% YoY, estimate Rs 2,678 crore
• Total costs Rs 2,260 crore, +26% YoY
• Other income Rs 16.57 crore, -66% YoY

COMMENTARY AND CONTEXT

• India business sales grew by 35% year-on-year
• Q4 consolidated Ebitda grew 21% YoY
• Says remain confident of leveraging growth opportunities to drive sustainable, profitable sales growth across the portfolio in FY22

Indian oil refiners advance after news agency The Press Trust of India reported companies have raised prices of petrol and diesel for a sixth time in recent weeks, citing price notifications by state-owned fuel retailers.

• Companies have also been better-off this year despite the deadly virus wave due to additional storage facilities for surplus, absence of a nationwide lockdown and reopening of parts of Europe providing a potential outlet for excess supplies
• Mangalore Refinery & Petrochemicals rises as much as 9.1% to its highest since Jan. 2020; Indian Oil Corp. 5.3%, Hindustan Petroleum Corp. 4.5% while Bharat Petroleum Corp. 2.2%
• S&P BSE Oil and Gas Index climbs as much as 2.1% to its highest level in nearly two months.

Bharat Heavy Electricals Ltd. rose 13% after a bunch of large trades.

The company had 14.2 million shares change hands in five large trades, according to Bloomberg data.

• Trading in the company's put options totalled 12,788 contracts, compared with the average of 1,980 over the past 20 days. Trading in the company's call options totalled 28,174 contracts, compared with the average of 6,672 over the same period.
• The relative strength index on the stock was above 70, indicating it may be overbought.
• Analysts have three buy, nine hold, and 19 sell recommendations on the stock.
• The price target of Rs 31.41 represents a 58% decrease from the last price

Sunteck Realty Ltd. was the first to spot a business opportunity a decade ago, when it snapped up land in Mumbai’s upcoming financial district and built homes for wealthy bankers. Now, as a fallout of a prolonged cash squeeze and the pandemic, it sees a bargain brewing once again.

“Bargain deals have been available during the pandemic; we did three major acquisitions which were among the largest in the last seven years,” Chairman Kamal Khetan said in a phone interview. “Landowners are desperate now, they are chasing developers. This is a buyer’s market.”

Read the full story here.

• Coal India options volume 4.4x the 20-day average, with 38,158 calls changing hands vs 11,699 puts
  • Stock up 4.7%, volume 3.9x the 20-day average for this time of day
• Indian Oil options volume 4.2x the average, with 23,181 calls vs 5,479 puts
  • Stock up 4.4%, volume 3.8x the average
• NTPC options volume 3x the average, with 18,369 calls vs 3,502 puts
  • Stock up 2.7%, volume 1.4x the average
• UltraTech Cement options volume 2.8x the average, with 19,956 calls vs 5,184 puts
  • Stock up 2.4%, volume 1.3x the average
• UPL options volume 1.6x the average, with 17,122 calls vs 4,819 puts
  • Stock up 0.1%, volume 1.6x the average

Indian investors ploughed money into the nation’s equity funds for a second straight month in April, even as a deadly wave of coronavirus spurred lockdowns in states to contain the spread.

Net flows into stock funds totalled Rs 3,440 crore last month, compared to Rs 9,120 crore received in March, data from the Association of Mutual Funds in India show

APRIL MUTUAL FUND DATA

• Multi-cap funds: Outflow of Rs 157.7 crore vs outflow of Rs 191.8 crore in March
• Large-cap funds: Inflow of Rs 324.94 crore vs inflow of Rs 723.18 crore in March
• Mid-cap funds: Inflow of Rs 958.17 crore vs inflow of Rs 1,502.5 crore in March
• Small-cap funds: Inflow of Rs 183.96 crore vs inflow of Rs 335.95 crore in March

• SIP inflows: Rs 8,590.89 crore vs Rs 9,182 crore inflow in March (March numbers included flows of last two days of February)
• Total net inflow for MF schemes: Rs 92,906.45 crore vs outflow of Rs 29,745.4 crore

Click here to read the full report

The Indian rupee declined for the first day in four along with equities as stricter lockdowns by states to curb the spread of coronavirus weighed on sentiment. Sovereign bonds trade steady.

• USD/INR rises 0.2% to 73.47 after climbing 0.3% earlier, the most since May 3
• RBI was the only buyer of the pair Monday and did not allow an appreciation beyond 73.30 for the rupee

Medi Assist Healthcare Services Ltd., a provider of third-party insurance services, plans to sell up to 28 million shares in an initial public offering, according to a document available on issue manager Edelweiss Financial’s website.

• The IPO will involve an offer for the sale of shares by founders and investors in the company
• Founder Vikram Jit Singh Chhatwal offers to sell 2.5 million shares, Medimatter Health Management Pvt. offers 12.5 million shares in the sale; Bessemer Health Capital LLC’s 6.6 million shares and 6.1 million shares by Investcorp Private Equity Fund to also be part of IPO
• Axis Capital Ltd., Edelweiss Financial Services Ltd., IIFL Securities Ltd. and SBI Capital Markets Ltd. are managing the issue

Coromandel International Ltd. rose 4.1%. Trading volume was five times the average for this time of day.

• The stock was the best performer among its peers.
• Trading volume was 302,166 shares, five times the 20-day average of 60,662 shares for this time of day.
• Coromandel trades at 15 times its estimated earnings per share for the coming year. It trades at 17 times trailing EPS.
• Analysts have 12 buy, four hold, and one sell recommendations on the stock.
• The price target of Rs 900.43 represents a 18% increase from the last price

Shares of Punjab National Bank fell after the lender launched an institutional share sale and its offer document revealed a high level of stress on its books.

The government-owned lender, on Monday evening, opened its qualified institutional placement issue with a floor price of Rs 35.51 per share. The bank had last raised Rs 3,788 crore in December 2020 but failed to garner the full amount it had sought.

Read more here

Coal India Ltd. rose 5.3%. Trading volume was 11 times the average for this time of day.

• The stock was the best performer among its peers. It’s higher for the sixth straight day.
• Trading volume was 17.8 million shares, 11 times the 20-day average of 1.67 million shares for this time of day.
• The relative strength index on the stock was above 70, indicating it may be overbought.
• Analysts have 22 buy, five hold, and one sell recommendations on the stock.
• The price target of Rs 167.92 represents an 8.5% increase from the last price

Private equity firm Bay Tree India Holdings has sold a 2.1% stake in India’s Yes Bank, reducing its holding by almost a third.

Bay Tree cut its stake in the embattled lender that was the centre of India’s largest financial bailout last year, it said in a statement on Tuesday. It now holds a 5.4% stake after multiple sales in the open market between Jan. 6 to May 6.

India stocks fell, tracking peers across Asia, on concerns that higher inflation in the U.S. may push up interest rates, which could slow dollar-flows into emerging markets.

The S&P BSE Sensex dropped as much as 1% to 48,988.18, while the NSE Nifty 50 Index lost 1.14% to 14,771.40. Housing Development Finance Corp. contributed the most to the index decline, decreasing 1.9%. Tata Steel Ltd. had the largest drop, falling 2.2%.

Eleven of the 19 sector sub-indices compiled by BSE Ltd. slipped, led by a gauge of metal companies that had climbed to a record on Monday.

“Domestic equities do not look to be good as of now on weak global cues,” said Binod Modi, a strategist with Reliance Securities Ltd. U.S inflation data due Wednesday will be crucial for the market, he added.

Indian sovereign bond investors will watch demand at a Rs 12,150 crore-rupee ($1.7b) sale of state debt. The rupee may start trading lower amid concerns over a deadly new wave of coronavirus.

• USD/INR fell 0.2% to 73.3500 on Monday
  • Implied opening from forwards suggest spot may start trading around 73.42
• India is due to release its retail inflation data on Wednesday; CPI probably rose 4.10% in April y/y, vs 5.52% gain in March

Good morning!

Asian stocks and U.S. equity futures slid Tuesday after a technology-led tumble on Wall Street as surging commodity prices stoked concern about inflation.

A gauge of Asian equities fell the most since March, with technology stocks underperforming amid a sea of red from Japan to Hong Kong. Nasdaq 100 contracts retreated more than 1% after the index tumbled on the growing anxiety over inflation. S&P 500 futures dropped after the gauge fell from an all-time high.

India’s SGX Nifty 50 Index futures for May delivery fell 1.4% to 14,774.50, while MSCI Asia Pacific Index dipped 2%. The NSE Nifty 50 Index added 0.8% Monday to 14,942.35.

Oil retreated as traders monitored the worsening fallout from the closure of the largest U.S. oil-products pipeline. The spotlight remains on commodities generally and the market implications of recent jumps in materials like copper and iron ore.

In China, factory-gate prices surged more than expected in April, supported by gains in commodity prices and a low base of comparison from last year, while consumer inflation remained relatively subdued.

Back home, Godrej Consumer, KEC, Siemens, Firstsource are the companies scheduled to report earnings Tuesday. Foreign investors sold net Rs 1,200 crore of stocks on May 7, according to the NSDL website.