Sensex, Nifty End Lower On Profit Booking At Record Levels

A trader monitors financial data, including a chart of the Capita Plc share price, on computer screens on the trading floor. (Photographer Chris Ratcliffe/Bloomberg)

Sensex, Nifty End Lower On Profit Booking At Record Levels

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Closing Bell

Indian stocks declined, snapping a two-day advance, in the absence of fresh triggers, with investors focusing on a steady ramp up in coronavirus vaccinations and reassurance of policy support from the U.S Federal Reserve.

The S&P BSE Sensex fell 0.5% to 52,306.08, while the NSE Nifty 50 Index lost by a similar magnitude to 15,686.95. Both the indices pared gains of up to 0.6%.

Maruti Suzuki India Ltd. contributed the most to the gains on both indices, increasing 2.3%. Out of 30 shares in the Sensex index, eight rose, while 22 fell. Sixteen of the 19 sector indexes compiled by BSE Ltd. declined, with a measure of oil & gas companies leading the losers.

Sensex, Nifty End Lower On Profit Booking At Record Levels

Baring auto and PSU banks, profit booking was visible across the counters, Binod Modi, Head Strategy at Reliance Securities wrote in a note as "the announcement of price hikes and improved prospects of volume recovery continued to generate interest among investors for automobile companies."

While midcap and smallcap indices remained resilient mostly, Modi said volatility index surged over 4% reflecting unease at higher levels.

Most equity markets in Asia traded in the green after Fed officials emphasized that the central bank is continuing to support the economy with asset purchases and low interest rates, which are key drivers for inflows into emerging market economies like India.

The nation has stepped up the pace of inoculations amid warnings by some experts about the possibility of a third Covid-19 wave hitting the country. The daily infection caseload is now just above 50,000, down from a high of more than 400,000 in early May.

While weakening rupee, rising crude prices and taper talk in the U.S. aggravated investors’ concerns in last couple of days, India’s daily caseload falling sharply and ramp-up in vaccination programme offer comfort. We believe expectations of sharp improvement in high frequency key economic indicators from current month supported by ease of business curbs in various states should continue to offer support to corporate earnings.
Binod Modi, Head Strategy at Reliance Securities

Paper Manufacturers Surge as Economy Reopens

Shares of Indian paper manufacturing companies surge as economic activities in the country continue to recover as pandemic-induced curbs are eased by the country’s states.

  • JK Paper rises as much as 9.2% and is set for its third day of gains; West Coast Paper Mills gains 7.8%

  • Seshasayee Paper and Boards +5.6%, Andhra Paper +4.2%

  • Paper stocks were among most impacted sectors during the lockdown. However, most companies reported impressive earnings for the March ended quarter due to cost-control measures, Sandeep Jain, a strategist with Jaipur-based Tradeswift Broking told Bloomberg News

    “There is also talk that the government may tighten rules on single-use plastic, which would benefit paper companies, as their products are used for packaging,” Jain said.

Most Adani Stocks Trade Lower

Bharat Electronics Surges After Q4 Profit Beats Estimates

Bharat Electronics rose as much as 12% to the highest level since Feb. 2018 after the Indian state-run defense equipment maker’s quarterly profit beat analyst estimates.

  • Second-best performer on Nifty Midcap 100 index; trading volume 5.7x 3-month full-day avg

  • The company reported net income of Rs 1,350 crore for the March-ended quarter, ahead of all 8 analyst estimates, while its revenue of Rs 6,910 crore was ahead of consensus

  • The company has Rs 12,500 crore of missile contracts from state-run enterprises and Rs 38,000 crore of orders from Hindustan Aeronautics for a light combat aircraft programme, providing near-term visibility for its pipeline, ICICI Securities analyst Abhijit Mitra wrote in a note

    • Rs 1,000 crore of order inflow won from the Indian Navy for software defined radio tactical use is a significant opportunity

    • The company aims expand its civilian segment, including medical equipment, to 15% of revenue in the next 2-3 years from 7% currently and plans to improve revenue from the service sector

    • Retains buy, raises price target to Rs 177 from Rs 153

Godrej Agrovet Surges Most In Six Weeks As Founder Raises Stake

Godrej Agrovet jumps as much as 8.1%, the most since May 12, after founders raised stake in the Mumbai-based animal feed and agribusiness company via open market deal.

  • Godrej Industries, which holds ~60.2% stake in the company, acquired additional 976,047 shares, or 0.5% stake yesterday, according to data on bulk deals released by BSE

  • Balram Singh Yadav, an individual investor, holding about 2.2% stake in the company as of March 31, sold 1m shares yesterday, the data showed

  • Trading vol. 5.4x 3-month full-day avg; shares are set for 3rd day of gains

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