Sensex, Nifty Close Marginally Higher Led By Auto Stocks

Indian stocks rose as the Covid-19 vaccination drive administered a record number of doses in a day while businesses reopen.

The S&P BSE Sensex ended little changed at 52,588.71, while the NSE Nifty 50 Index advanced 0.17% at 15,772.75. Maruti Suzuki India Ltd. contributed the most to the index gain and had the largest move, increasing 5.3%. Of 30 shares in the Sensex, 12 gained and 18 fell.

Fourteen of the 19 sector indices compiled by BSE Ltd. climbed, with a gauge of capital goods stocks leading advance.

Most equity markets in Asia advanced as concerns over the U.S. Federal Reserve’s hawkish guidance eased.

India gave a record 8.5 million vaccine doses on Monday, the first day vaccines were available free to all adults. States have begin lifting curbs on businesses and the movement of people as the country sees a steady decline in coronavirus cases. The push to speed up inoculations comes with administered doses so far covering only about 10% of the population.

“India’s daily caseload falling below 60,000 and ramp-up in vaccination programme offer comfort,” Binod Modi, head of strategy at Reliance Securities Ltd. wrote in a note. “We believe expectations of a sharp improvement in high frequency key economic indicators from the current month supported by easing business curbs in various states should continue to offer support to corporate earnings.”

Aditya Birla Fashion & Retail Ltd. rose 5.3%, best performer among its peers.

• Trading volume was 2.65 million shares, 14% above the 20-day average of 2.33 million shares for this time of day.

• Analysts have 21 buy, three hold, and one sell recommendations on the stock.

• The price target of Rs 221.14 represents a 4.8% increase from the last price

Care Ratings Rises For Eighth Day

Care Ratings Ltd. is higher for the eighth straight day, on track for the longest winning streak since the period ended April 16, 2020.

• The stock gained a total of 28% during the streak while the Sensex Index increased 0.8%.

• In the past, the stock has fallen 3.5% on average in the week following eight straight days of gains.

Reliance Power Rises For 15th Day

Reliance Power Ltd. is higher for the 15th straight day, on track for the longest winning streak since the period ended April 30, 2020.

• The stock gained a total of 101% during the streak while the Sensex Index increased 1.5%.

Large Trade Alert

• GMR Infra has 11.5 million shares change hands in 4 large trades.

• TV18 has 3.8 million shares change hands in 1 large trade.

• Maruti Suzuki options volume 5.4x the 20-day average, with 132,754 calls changing hands vs 30,094 puts

  • Stock up 5.2%, volume 2.3x the 20-day average for this time of day

• UPL options volume 1.9x the average, with 22,904 calls vs 4,909 puts

  • Stock up 3.6%, volume 1x the average

• SBI Life options volume 1.5x the average, with 11,881 calls vs 2,207 puts

  • Stock up 2%, volume 1.1x the average

• Nifty 50 options volume 0.5x the average, with 3.69 million calls vs 4.04 million puts; gauge up 0.7%

  • Cost of hedging as measured by the 90/110, one-month skew ranks in the 89th percentile over the past year

• Nifty Bank index options volume 0.5x the average, with 7.24 million calls vs 7.78 million puts; gauge up 0.4%

  • 90/110, one-month skew in the 63rd percentile

• India VIX Index down 2.8%

MM Forgings jumped as much as 20%, the most since Sept. 18, after it reported net income for the latest quarter more than quadrupled.

• Q4 net income rose to Rs 30.10 crore vs Rs 6.5 crore YoY; 4Q revenue Rs 285 crore vs Rs 156 crore YoY

• The company will likely benefit from demand for medium and heavy commercial vehicles as domestic fleet operators push ahead with vehicle replacement in anticipation of and end to lockdowns, Anand Rathi analyst Vijay Sarthy wrote in a note

• The company is also confident about export growth, given the strong momentum in Class-5 and -8 trucks in the U.S., Sarthy said

• The analyst expects Ebitda margins to expand to 17.6% in FY22 and 18.1% in FY23 from 16.7% in FY21, driven by new products, higher machining content and strong volume growth; sees revenue growing at 25% compound annual rate over FY21-23 to Rs 1,130 crore

• Anand Rathi maintains buy, price target Rs 697

India’s one-year interest-rate swaps climb to the highest in more than three months as surging oil prices fuel worries about inflation and policy normalization by the central bank sooner than expected.

• One-year interest-rate swaps rise 1bp to 3.89% after touching 3.91% earlier, the highest since March 15; have climbed 16bps so far this month; 10-year bond yields traded little changed at 6.03%

• USD/INR steady at 74.0813

The Competition Commission of India approved Heineken International B.V.’s purchase of an additional up to 16.4% stake in United Breweries Ltd., according to a statement from the South Asian nation’s corporate affairs ministry.

• NOTE: As on June 22, Scottish & Newcastle India Pvt. is the largest shareholder in the Indian beer maker with 34% stake; Heineken International holds 9.28% stake and Heineken UK holds an additional 3.21%

Shares of the travel company gained as much as 5% after broking firm Anand Rathi initiated coverage on the online travel agency with a ‘buy’ rating.

The brokerage cited the company’s strong presence in the growing online ticketing market in India, lean business model, strong management, stronger balance sheet along with profitable growth outlook as reasons for the bullish rating.

It set a target price of Rs 475, implying a potential upside of 21%.

Reliance Industries Ltd. has had an action-packed last fiscal as the nation’s largest company by market value raised Rs 2.6 lakh crore ($36 billion) by selling stakes in its retail and digital assets, turning net debt free. Still, the stock lagged the benchmark. And that’s what investors hope owner Mukesh Ambani would address in the firm’s latest annual general meeting.

The street expects the oil-to-telecom conglomerate in its June 24 AGM to announce product launches and chart strategic road map for initiatives such as e-commerce to 5G rollout and net zero carbon mentioned in its annual report of 2020-21.

Shares of the oil-to-telecom conglomerate has risen 21.3% from its last AGM on July 15, 2020 so far, while the S&P BSE Sensex advanced 45.83% during the period.

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Maruti Suzuki India Ltd. rose 2.9%. Trading volume was quadruple the average for this time of day.

• The stock was the best performer among its peers.

• Trading volume was 252,735 shares, quadruple the 20-day average of 69,031 shares for this time of day.

• Analysts have 31 buy, six hold, and 12 sell recommendations on the stock.

• The price target of Rs 7,416.30 represents a 4.5% increase from the last price

• India’s auto industry was under pressure over the last few months due to Covid surge, while rising commodity prices squeezed margins, analyst Nitij Mangal writes in a note

• Demand is now starting to recover, with online searches for OEMs and clicks on car portals indicating improved consumer sentiment

• “Commodity prices are also showing signs of peaking out as China plays a balancing act between decarbonisation and inflation control,” the note says

• Jefferies prefers Bharat Forge, Maruti Suzuki and TVS Motor among auto stocks

Indian equity benchmarks climbed, in line with Asian peers, as the prospect of gradual policy tightening tempered concerns over the Federal Reserve’s hawkish tilt.

The S&P BSE Sensex rose as much as 0.7% to 52,967.13, while the NSE Nifty 50 Index advanced by a similar magnitude. Maruti Suzuki Ltd. had the largest increase, rising 3%.

Of 30 shares in the Sensex index, 28 rose and 2 fell. All of the 19 sector indexes compiled by BSE Ltd. gained, led by a gauge of power stocks.

“We’re seeing consolidation in the index on the expected lines however the buying interest on every dip clearly shows the market mood,” said Ajit Mishra, vice president of research at Religare Broking Ltd.

The Indian rupee and sovereign bonds may come under pressure as the highest crude oil prices in more than two years fuel worries about inflation and finances in the net oil-importing nation.

• USD/INR rose 0.3% to 74.1050 on Monday

  • Implied opening from forwards suggest spot may start trading around 74.10

• Brent oil hit $75 a barrel for the first time in more than two years amid signs of a rapidly tightening market

• Indian rupee, Indonesia rupiah, and Philippine Peso, all of which “have weaker current-account dynamics are susceptible to higher oil prices and rising U.S, yields,” UBS analysts wrote in a note

• 10-year yields rose 2bps to 6.03% on Monday

Most Asian stocks rose, tracking a U.S. equity rebound as the prospect of gradual policy tightening tempers some of the concerns about the Federal Reserve’s hawkish tilt.

Japan outperformed, while Australia also advanced. Hong Kong fluctuated and China opened with subdued gains. India's SGX Nifty 50 Index futures for June delivery rose 0.5% to 15,803.00, while the MSCI Asia Pacific Index is +0.9%. The NSE Nifty 50 Index added 0.4% Monday to 15,746.50.

The S&P 500 rallied the most in five weeks, outperforming the technology-heavy Nasdaq 100, aided by a revival of the value trade in sectors like energy and financials. U.S. equity contracts were steady.

Brent oil hit $75 a barrel for the first time since April 2019. Bitcoin sank closer to $30,000 after China intensified its cryptocurrency clampdown.

Back home, Oil India, Jaiprakash Associates, VST Tillers may react as the companies reported quarterly results after the market closed Monday. Bharat Electronics, NMDC, Sobha are among the companies scheduled to report earnings Tuesday.

Hindustan Unilever, Indian Hotels, Nippon Life are among companies holding their annual shareholders’ meetings. Foreign investors bought a net Rs 2,630 crore of stocks on June 18, according to the NSDL website.