Sensex, Nifty Stage A Recovery As Banks Make A Strong Comeback

Indian equity benchmarks reversed losses made in the first half of the session to snap a two-session losing streak.

The S&P BSE Sensex rose 0.8% to 48,080, after dropping by as much as 1.1%. The measure has lost about 9% from its recent peak on Feb. 15, nearing losses read as a technical correction.

The outlook for Indian assets is turning bearish as spiking infections prompt cities from the financial hub Mumbai to the national capital New Delhi to bring in stringent restrictions on the movement of people. India, which has the world’s second-largest outbreak, reported 314,835 new cases Thursday.

The NSE Nifty 50 Index closed nearly 0.8% higher as well after earlier falling 1%. Sentiment among global investors toward India has been souring. Global funds have sold a net $716 million of local stocks in April after a six-month buying spree, helping make Sensex this month’s biggest loser in Asia.

Fourteen of the 19 sector sub-indices compiled by BSE Ltd. gained, led by a gauge of lenders. ICICI Bank Ltd. and HDFC were the biggest gainers on the Sensex while Titan and Unilver dragged the most.

The rupee was little changed at 74.95 per dollar, paring a decline of as much as 0.6% Thursday, It is down 2.5% this month in Asia’s worst performance.

Petronet LNG Ltd. rose 4.5%, more than any full-day gain since Oct. 22.

• Trading volume was 4.92 million shares, double the 20-day average of 2.41 million shares for this time of day.
• Trading in the company's call options totalled 2,575 contracts, compared with the average of 825 over the past 20 days. Trading in the company's put options totalled 738 contracts, compared with the average of 367 over the same period.
• One-month implied volatility was 32%.
• Petronet LNG trades at 13 times its estimated earnings per share for the coming year. It trades at 12 times trailing EPS.
• Analysts have 33 buy, seven hold, and no sell recommendations on the stock.
• The price target of 306.89 rupees represents a 34% increase from the last price

Shares of HDFC Asset Management Company snapped a three-session losing streak after CLSA initiated coverage on it with a bullish rating.

HDFC AMC, with its strong brand and low core opex, is the most profitable AMC in India and remains a strong play on the formalisation of savings, the brokerage said in a note.

Rupee trims nearly all the losses of the day as stocks recover and the central bank is seen selling dollars to support the currency.

RBI is very aggressive in selling dollars and they will continue to do that.

Anything above 75 they will come in, said Anindya Banerjee, a currency strategist at Kotak Securities. “That is going to continue in the near term until we see a peak in the covid cases. Once they start to come down, we will see big catchup in the rupee. Then you will see just the opposite and the sentiment will swing the other way.”

The evolution of Indian govt bond yields should be closely watched given the lack of meaningful response from market to RBI’s QE program, according to Chong Wee Khoon, a senior APAC strategist at BNY Mellon.

Credit default swaps for State Bank of India -- considered a proxy for India’s default risk -- widened 17 basis points this month to a seven-month high at 114.7, CMA data show. That surpasses the 12 basis points expansion for the broad Asia gauge. The index has fallen back from a 10-month high hit last week even as the Indian proxy climbed.

Source: Bloomberg

Indian equity benchmarks decline for a third session as a worsening coronavirus crisis sparked investor concerns over a nascent economic recovery and corporate profits.

The S&P BSE Sensex Index slid 1% to 47,204. The losses came even as a broader index of Asian stocks climbed. The measure has lost about 9% from its recent peak on Feb. 15, nearing losses read as a technical correction.

The NSE Nifty 50 fell 1% as well to 14,515, its lowest level since Feb. 1. All but three of the 19 sub-indexes compiled by BSE Ltd. fell, led by a gauge of bank stocks. Reliance Industries Ltd. and HDFC Bank Ltd. were the biggest drags on the Sensex.

Global funds have turned net sellers of local stocks in April after a six-month buying spree, helping make the Sensex this month’s biggest loser in Asia. Foreign investors have sold $716 million of local shares through April 19.

Daily coronavirus infections in the nation reached a record 314,835 and public health experts are worried that a new -- possibly more virulent -- variant could be racing through the crowded nation of more than 1.3 billion people.

Stringent restrictions across the country on the movement of people have revived memories of last year when lockdowns curbed demand and pushed the economy into the worst recession in nearly seven decades.

Fund managers at Star Health & Allied Insurance Co. and Smartsun Capital Pte said they are currently avoiding midcaps based on global economic cues and valuations. Both said there is more safety in buying large stocks now that India has become the epicentre of virus resurgence in Asia, while inflation is set to rise in the U.S. and China as the world’s two biggest economies are rebounding.

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India’s SGX Nifty 50 Index futures for April delivery rose 0.8% to 14,190.00, while MSCI Asia Pacific Index gained 0.9%. Markets were closed on Wednesday for a holiday.

Nestle India, ICICI Securities, TV18, Network 18 may react as the companies reported quarterly results after the market closed Tuesday. Indus Towers, Cyient, Rallis India are among the companies scheduled to report earnings Thursday.

Foreign investors sold net Rs 1,650 crore of stocks on April 19, according to the NSDL website.

Asia stocks bounced after U.S. equities rallied, snapping a two-day drop with gains by companies that stand to benefit the most from an economic revival. The dollar stabilised. Oil added to losses with an increase in U.S. crude inventories compounding concerns around a choppy global demand recovery.

Traders are sifting through corporate results for signs on whether an anticipated jump in profits would bring with its forecasts for stronger growth. Equities had drifted lower on concern over a flare-up in coronavirus cases around the world that could jeopardize an economic rebound, particularly with stocks trading near their all-time highs.