Sensex, Nifty End Lower On Profit Booking At Record Levels

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.

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.

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.

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 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

Wabco India jumps as much as 7.3%, their biggest single-day gain since June 16, after founder group plans to sell as much as 2.6% stake, a move that will increase the number of free float shares in the closely-held automotive parts maker.

• Founder Group and related entities hold 80.4% in the company, according to BSE’s data

• ZF International UK Ltd., one of the company’s founders, has proposed to sell 500,000 shares through market transactions. The offer starts today for institutional investors while retail investors can place bids tomorrow, according to an exchange filing

• The floor price for the sale is set at Rs 6,550 per share

• ZF International also has an option to sell additional 150,000 shares in the offer

Shares of the Bengaluru-based beer maker swung between gains and losses after 15% equity changed hands in a single large trade.

Heineken acquired an additional 39.6 million shares in United Breweries, taking its shareholding in UBL from 46.5% to 61.5%.

This after SEBI exempted Heineken from making an open offer for UB shares.

While the increase in ownership may not translate into material benefits in medium-term, Emkay said UBBL seems to be in a stronger position and remains an attractive recovery play post Covid.

"Annual report indicates sustained investments in brands, increased footprint for premium brands, impressive savings in fixed costs, and initiatives for water conservation and reducing carbon footprint," the broking firm said.

It maintained 'Buy'rating and raised target price to Rs 1,570 from Rs 1,450.

Venky’s India Ltd., an operator of hatcheries and poultry farms, rose to its highest level in over three years after its general manager told CNBC-TV18 television channel that the company will benefit from bumper crops of soya and maize.

• “Over a period of time, soya and maize production will grow in large quantity and poultry is a prime consumer of both soya and maize in India. So definitely, the benefits will come to poultry when production goes up,” Prasanna Pedgaonkar, said in an interview to the channel

  • Company has recorded good performance despite Covid due to diversification, he said

• Stock climbed 11% to its highest level since May 2018

Indian equity benchmarks opened higher amid steady Asia trading as after reassuring comments on inflation and monetary policy from Federal Reserve officials bolstered investor sentiment.

The S&P BSE Sensex rose as much as 0.6% to 52,912.35, before paring most of the gains. The NSE Nifty 50 Index too was little changed at 15,779.45 after gaining by a similar magnitude. Maruti Suzuki Ltd. contributed the most to the index gain, increasing 2%.

Out of 30 shares in the Sensex index, 23 rose, while 7 fell. Fifteen of the 19 sector indexes compiled by BSE Ltd. climbed, with a measure of auto companies leading the gains.

Indian sovereign bond traders will await the results of a Rs 36,000 crore ($4.8 billion) Treasury-bill sale later on Wednesday. Market participants will weigh comments by Fed Chair Jerome Powell that recent price increases are likely to be short-lived.

• 10-year yields little changed at 6.03% on Tuesday

• USD/INR rose 0.4% to 74.3650 on Tuesday

  • Implied opening from forwards suggest spot may start trading around 74.23

Global funds sell net Rs 1,030 crore of India stocks Tuesday: NSE

• They bought Rs 20 crore of sovereign bonds under limits available to foreign investors, and added Rs 95 crore of corporate debt

• State-run banks bought Rs 900 crore of sovereign bonds on June 22: CCIL data. Foreign banks sold Rs 1,320 crore of bonds

Asian stocks were steady Wednesday after reassuring comments on inflation and monetary policy from Federal Reserve officials bolstered investor sentiment. Treasury yields held declines.

Stocks fluctuated in narrow ranges, dipping in Japan, China and Australia but inching higher in Hong Kong. U.S. equity contracts made modest gains after the S&P 500 climbed a second day.

India’s SGX Nifty 50 Index futures for June delivery rose 0.4% to 15,838.50, while MSCI Asia Pacific Index advanced 0.2%. The NSE Nifty 50 Index added 0.2% Tuesday to 15,772.75.

Overnight, Fed Chair Jerome Powell reiterated his view that inflation pressures will be transitory even after a notable increase in recent months. He added that the Fed would be patient in waiting to lift borrowing costs.

Oil traded around $73 a barrel in the wake of a report pointing to another decline in U.S. crude stockpiles. Bitcoin rebounded, rising past $30,000 after earlier briefly erasing gains for the year.

Back home, Bharat Electronics, NMDC, Sobha may react as the companies reported quarterly results after the market closed Tuesday. Apollo Hospitals is among the companies scheduled to report earnings Wednesday. Foreign investors sold net Rs 955 crore of stocks on Monday, according to NSDL website.