Sensex, Nifty End At One-Week Low As Metal Rally Cools
Catch all live updates on share prices, index moves, corporate announcements and more from Indian stock markets today.
Closing Bell
India equity benchmarks fell for a second straight session, in line with most Asian markets, amid continued concerns over the impact of faster inflation on dollar flows into emerging markets.
The S&P BSE Sensex lost 1% to 48,690.80 while the NSE Nifty 50 Index declined 1% to 14,696.50. Except for the S&P BSE Auto Index, all other 18 sector-indices compiled by BSE Ltd. declined, led by a gauge of metal companies.
UPL Q4 Earnings Meet Estimates
UPL reported net income for the fourth quarter that missed the average analyst estimate.
- Net income Rs 1,060 crore, +72% YoY, estimate Rs 1078 crore
- Revenue Rs 12,800 crore, +15% YoY, estimate Rs 12,016 crore
- Total costs Rs 11,140 crore, +11% YoY
- Other income Rs 49 lakh vs. Rs 21 lakh YoY
- Dividend per share Rs 10
Asian Paints Q4 Net Income Beats Estimates
Asian Paints reported net income for the fourth quarter that beat the average analyst estimate.
- Net income Rs 852 crore, +84% YoY, estimate Rs 826 crore
- Revenue Rs 6,650 crore, +43% YoY, estimate Rs 6,008 crore
- Total costs Rs 5,580 crore, +40% YoY
- Other income Rs 75.41 lakh, +35% YoY
- Raw material costs Rs 3,440 crore, +42% YoY
- Dividend per share Rs 14.50
COMMENTARY AND CONTEXT
- Domestic Decorative business delivered registered 48% volume growth in the quarter
- Says huge inflationary trend in raw material prices worrying; impact on co.'s profitability negated with some work on sourcing and cost optimization
- Q4 profit before depreciation, interest, tax and other income increased 53.4% to Rs 1,318 crore
Price Hikes, Better Demand Aid Consumer Goods Makers In Q4
IEA Says Oil Glut Gone Even as It Cuts Demand Forecast on India
The International Energy Agency said the supply glut created by the global pandemic has cleared, even as demand suffers a blow from a resurgence of the virus in India.
Surplus oil inventories in developed nations are now just a small fraction of the levels seen when demand collapsed last year, with output cuts by OPEC and its allies draining the excess, the IEA said on Wednesday. Still, the agency sees a temporary setback for global consumption as infections rock India, before the recovery resumes later in the year.
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PSU Bank Index Rallies For A Third Session
Larsen, NTPC, ONGC, Power Grid in Focus: Options Watch
- Power Grid options volume 4.6x the 20-day average, with 21,689 calls changing hands vs 3,383 puts
- Stock up 1.9%, volume 2.5x the 20-day average for this time of day
- NTPC options volume 3.5x the average, with 26,144 calls vs 6,032 puts
- Stock up 2.1%, volume 2.5x the average
- ONGC options volume 2.3x the average, with 13,886 calls vs 3,968 puts
- Stock down 1.1%, volume 1.3x the average
- Larsen options volume 2x the average, with 25,099 calls vs 6,179 puts
- Stock up 1.3%, volume 1.2x the average
- Tata Motors options volume 2x the average, with 55,216 calls vs 16,615 puts
- Stock up 4.3%, volume 1.1x the average
- Indian Oil options volume 1.9x the average, with 13,651 calls vs 2,812 puts
- Stock up 1%, volume 1.5x the average
- Coal India options volume 1.7x the average, with 18,371 calls vs 6,739 puts
- Stock up 0.8%, volume 2.2x the average
Rupee Snaps Four Days Of Gains Amid Covid Worries
The Indian rupee is poised to decline by the most in almost a month amid lingering concerns over the deadly impact of coronavirus that threatens to weigh on the nation’s economy.
- USD/INR up 0.2%, set for the biggest rise since April 19, at 73.4575
- The second, deadlier wave of virus infections is likely to cause rupee weakness till Sept., according to Bloomberg Economics’ forecasting model
- Latest flareup is expected to drive capital outflows, weaken growth, raise inflation and economic uncertainty
- Trade patterns will also add adverse seasonal pressures on currency till Sept.
- Expects rupee to drop to 77/USD by Sept.
- Rupee came off day’s lows as foreign banks sold with stock inflows expected from MSCI Index rebalancing, says Amit Pabari, managing director at CR Forex
- Sovereign bonds are steady ahead of a report that’s likely to show consumer-price inflation eased last month
- CPI probably rose 4.10% y/y in April, compared with a 5.52% gain in March, according to a Bloomberg survey
- 10-year yields little changed at 6.01%; FX and bond markets are shut Thursday for a holiday
Auto Makers Struggle Amid Second Wave
The Covid wave has impacted the sales of vehicles in April due to various restrictions in states which have been experiencing a surge in cases, says Rajesh Menon, director General, SIAM.
Supply chain related production challenges continue with the lockdown restrictions in many parts of the country, he said. “Demand impacted both in terms of low consumer sentiments and closure of dealerships.”
- Passenger-cars: 141,194 units, down 10% MoM
- Passenger vehicles: 261,633 units, down 10% MoM
- Utility vehicles: 108,871 down 11% MoM
- Two-wheelers: 995,097 units, down 33.5% MoM
- Motorcycle: 667,841 units down 32.8% MoM
- Scooter : 300,462 units, down 34.3% MoM
Godrej Consumer Surges 20% On Leadership Change
Shares of Godrej Consumer Ltd. jumped as much as 20% after the appointment of a new CEO.
Sudhir Sitapati, ED (Foods) at HUL is set to take charge as the MD & CEO of GCPL from October.
While there are a lot of unknowns, Jefferies said, the history of CEO changes at Britannia, Jubliant FoodWorks, HUL, Dabur suggests that a new leader could bring about a paradigm shift, driving significant shareholder value.
GCPL has underperformed most of its peers in past few years, which may change as the new leader brings-in a new strategy that may entail some hard decisions, according to Jefferies.
While new CEO joining is still six months away, we see this announcement as a trigger for a re-rating and we raise our price target to Rs 1,000 (from Rs840). Retain Buy and GCPL remains in our top picks.Jefferies
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NLC India Shares Jump 12% to Highest In Two Years
NLC India Ltd. rose gained for a fifth straight session with trading volume was 74 times the average for this time of day. The stock was the best performer among its peers.
- Trading volume was 30.6 million shares, 74 times the 20-day average of 414,767 shares for this time of day.
- The relative strength index on the stock was above 70, indicating it may be overbought.
Opening Bell: Sensex, Nifty Open Lower As Banks Drag
Indian equity benchmarks 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 0.7% to 48,826.57, while The NSE Nifty 50 Index declined 0.6% to 14,760.50. Housing Development Finance Corp. contributed the most to the index decline and had the largest move, decreasing 1.9%.
Fourteen of the 19 sector sub-indices compiled by BSE Ltd. declined, led by a gauge of lenders. The S&P BSE Power was the best performer, up 1.75%.
“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.
The Sensex has surged about 90% from its March 2020 low, boosted by foreign inflows of $23.3 billion last year and optimism that stimulus measures will help engineer a strong economic revival.
The market “is completely ignoring the present situation,” said Samir Rachh, who oversees Rs 13,000 crore ($1.8 billion) of assets at Nippon India Mutual Fund in Mumbai. Recent gains have been “driven by a huge amount of liquidity,” he said. [Reads more on it here]
MSCI’s May Review
MSCI announced changes to its global standard indexes under its quarterly index review, effective at the close on May 27.
- Additions: Adani Enterprises, Adani Total Gas, Adani Transmission, Bharat Electronics, Cholamandalam Inv & Fin, SBI Cards and Payment
- Deletion: Zee Entertainment
Rupee Bond Traders Await Inflation Data, T-Bill Sale
Indian bond traders will look forward to a report that’s likely to show consumer-price inflation eased last month and a 360b-rupee ($4.9 billion) auction of Treasury bills Wednesday.
- CPI probably rose 4.10% y/y in April, compared with a 5.52% gain in March, according to a Bloomberg survey
- 10-year yields were little changed at 6.01% on Tuesday
- USD/INR also steady at 73.3400; FX and bond markets are shut Thursday for a holiday
- Implied opening from forwards suggest spot may start trading around 73.40
SGX Nifty Declines Amid Weak Asian Trade
Good morning!
Asian stocks fell Wednesday with U.S. equity futures after a drop on Wall Street amid concern that faster inflation and the surge in commodities could test the economic recovery from the pandemic.
Stocks slid in Japan and South Korea but were steady in Hong Kong and China. U.S. contracts slipped after the S&P 500 declined for a second day following a record high Friday.
India’s SGX Nifty 50 Index futures for May delivery fell 0.1% to 14,835.50, while MSCI Asia Pacific Index -0.7%. The NSE Nifty 50 Index fell 0.6% Tuesday to 14,850.75.
Oil gained after U.S. stockpiles fell. The biggest U.S. pipeline is still closed in the wake of a cyberattack, leading to acute fuel shortages in some parts of the nation.
Copper traded near a record, and the Bloomberg Commodity Spot Index hovered around the highest levels in almost a decade. A commodity exchange in China raised trading limits and margin requirements as authorities try to temper prices after a scorching rally in industrial commodities.
Back home, Godrej Consumer, KEC International, Siemens, Kalpataru Power, BASF India may react as the companies reported quarterly results after the market closed Tuesday. Asian Paints, UPL, Voltas, Pidilite, Lupin, Tata Power are among the companies scheduled to report earnings Wednesday.
Govt to release April consumer-price inflation, March industrial-production data; Industry group to release April auto sales. Foreign investors bought net Rs 1,170 crore of stocks on May 10, according to the NSDL website.