Sensex, Nifty Close At Record High As Investors Shift Focus To Earnings
Pedestrians walk past the Bombay Stock Exchange (BSE) building in Mumbai, India, on Wednesday, May 26, 2021. Photographer: Dhiraj Singh/Bloomberg  

Sensex, Nifty Close At Record High As Investors Shift Focus To Earnings

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Closing Bell

Indian stock benchmarks closed a volatile session in the green as investors shrugged weak global cues and shifted focus to the upcoming earnings season.

The S&P BSE Sensex gained 0.4% to 53,054.76, recovering from a 0.2% intraday loss. The NSE Nifty 50 too rose 0.4% to 15,879.65. Both the indexes changed direction at least 20 times during the session before closing at new record highs.

Housing Development Finance Corp. contributed the most to the index gain, increasing 1.3%. Tata Steel Ltd. had the largest increase, rising 4.4%.

Sensex, Nifty Close At Record High As Investors Shift Focus To Earnings

The broader markets too performed in line with their larger peers. The S&P BSE MidCap rose 0.6% while the S&P BSE SmallCap advanced 0.4%. Fourteen of the 19 sectoral indices climbed, led by the S&P BSE Realty index, up 1.9%.

The market breadth was skewed in favour of the bulls. About 1,789 stocks advanced, 1,409 declined and 148 remained unchanged on the BSE.

Strong May core sector data, healthy traction in overall economic momentum in June indicate healthy corporate earnings for Q1, according to Binod Modi, Head Strategy at Reliance Securities. This is also evident from the GST collections. "Investors must focus on quality stocks with robust earnings visibility and margins of safety," Modi wrote in a note.

Oil prices have surged about 50% since the start of the year, fueling concerns over inflation as India and other economies try to recover from the coronavirus pandemic. Locally, companies begin reporting earnings for June quarter this week with Tata Consultancy Services scheduled to kick off the season on July 8.

Redington Shares Jump To Record High On Bonus Issue Nod

Shares of Redington India jumped as much as 7.9% after the board of the company has approved bonus issue in the ratio of 1:1. The stock has gained for a sixth consecutive session,

The record date for reckoning the eligible shareholders entitled to be allotted bonus shares has been fixed as August 20. The bonus issue is subject to shareholders and other approvals.

The company said that the bonus equity shares will be issued out of free reserves and/or securities premium account and/or capital redemption reserve account of the company available as at March 31, 2021. It added that the bonus shares once allotted shall rank pari-passu in all respects and carry the same rights as the existing equity shares.

Redington also announced the revision of record date for final dividend of FY 2020-21. The company said, ''on account of the above bonus issue and in order to comply with the regulations, the record date of final dividend (including one–time special dividend) of FY2020-21 fixed as Aug. 4, 2021, is now advanced to July 19, 2021, by the board.''

Paper Makers' Stocks In Focus

Shares of the paper manufacturers rose between 5% and 15% amid hopes of demand revival and the possibility of reopening of office spaces, educational institutions.

The steady upswing in share prices of paper manufacturers has been aided by the rise in pulp prices.

Natco Falls As FMC’s Injunction In Insecticide Case Approved

Natco Pharma falls as much as 5.8%, in its biggest drop since Dec. 21, after an injunction filed by U.S. agricultural-sciences company FMC Corp against the Indian firm’s plan to produce insecticide Chlorantraniliprole was accepted by the court.

  • Trading vol. > 1.1x 3-month full-day avg

  • India’s Delhi High Court allowed the injunction application filed by FMC today, Natco Pharma said in an exchange filing; the co. also said it will review options after the full judgment in the matter will be available

  • NOTE: In February, Natco said its Indian registration for the Chlorantraniliprole product was successful and the company would be the first indigenous manufacturer of the product

    • Natco said sales of Chlorantraniliprole or CTPR containing products in India are estimated to be 20b rupees; the company also informed India’s exchanges about its pending litigation against FMC related to use of CTPR

    • CTPR is an active ingredient used in products commercialized by FMC under brands Coragen & Ferterra, Natco said in Feb. filing

Tata Motors Extends Decline On JLR Concerns

Shares of Tata Motors Ltd. fell to the lowest in two months after the automaker’s luxury arm said it expects chip shortages to worsen in the ongoing second quarter, hurting sales. Still, that didn’t deter most analysts from staying bullish on the company.

Jaguar Land Rover on Tuesday said chip shortages in the quarter ending September are expected to be greater than in the preceding three months, resulting in wholesale volumes about 50% lower than planned during the period.

Chip shortage is very dynamic and difficult to forecast, Tata Motors said in an exchange filing. “Some level of shortages will continue through to the end of the year and beyond.” The company, however, will prioritise production of higher margin vehicles using the available chip supply, and expects the situation to start improving in the second half of the ongoing financial year.

Analysts, too, expect Tata Motors to start to turn around by the next fiscal, defying the near-term pressures. Of the 34 analysts tracking the stock, 21 have a ‘buy’ rating, seven suggest a ‘hold’ and six recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies a upside of 16.2%.

To read what analysts had to say, click here

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