Sensex Closes Above 54,000 For First Time; Nifty Extends Record

India’s key stock benchmarks closed at fresh record highs as investors bet that Asia’s third-largest economy will keep the stimulus taps flowing to recover from a deadly wave of the coronavirus.

The S&P BSE Sensex gained 1% to 54,369.77. This is the first time the 30 share index closed above the 54,000 mark. The NSE Nifty 50 Index rose 0.8% to 16,258.80 after seeing an all-time intraday high of 16,290.20.

The broader markets underperformed the larger peers. Both the S&P BSE MidCap and the S&P BSE SmallCap slipped over 1%. Fifteen out of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Telecom index shedding 2.25%.

The market breadth was skewed in favour of bears. About 1,152 stocks advanced, 2,101 declined and 119 remained unchanged on the BSE.

The gains come before the central bank’s monetary policy decision Friday, with interest rates expected to be kept at an all-time low even as inflation accelerates. Steady buying by local funds have also been supporting the sentiment.

“With accommodative financial conditions worldwide, we see the mega rally in risk assets to continue,” Amar Ambani, head of research at Yes Securities Ltd. wrote in a note. “We expect the government to continue spending on infrastructure and to fast track the reform agenda.”

Earnings for Indian companies have been lackluster with 21 of the 34 Nifty firms that have announced so far missing analyst estimates.

Shares of Bosch Ltd. added 3.60% to Rs 15,788 apiece after it reported revenue for the first quarter that beat the average analyst estimate.

June Quarter Results:

• Net income at Rs 260.26 crore vs Rs 483.15 crore QoQ

• Revenue Rs 2,443.53 crore vs estimate of Rs 2,220 crore (Bloomberg Consensus)

• Total costs at Rs 2,207.19 crore vs Rs 2,693.00 crore QoQ

• Other income at Rs 98.97 crore vs Rs 117.12 crore QoQ

Of the 7 analysts tracking the company, 3 maintained ‘buy’, 1 maintained ‘hold’ and 3 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 3%.

Shares of Blue Star Ltd. shed 2.21% to Rs 820.40 apiece after it reported net income for the first quarter that missed analyst estimate.

June Quarter Results

• Net profit at Rs 12.69 crore vs estimate of Rs 26.61 crore (Bloomberg consensus)

• Revenue at Rs 1,052.04 crore vs estimate of Rs 1,120 crore

• Total costs at Rs 1,040.59 crore vs Rs 1,548.01 crore QoQ

• Other income at Rs 7.95 crore vs Rs 39.79 crore QoQ

Of the 23 analysts tracking the company, 11 maintained ‘buy’, 6 maintained ‘hold’ and 6 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg hinted at an upside of 0.2%.

India's key stock benchmarks hovered near their all-time high even as the market breadth turned weak in afternoon trade.

The S&P BSE Sensex gained 0.95% to 54,332.48. The index touched a new peak of 54,440.80 in early trade. The NSE Nifty 50 Index rose 0.73% to 16,248.35 after inching closer to 16,300 mark in intraday trade.

HDFC, Kotak Mahindra Bank, ICICI Bank and HDFC Bank were among the top gainers.

The broader markets underperformed the larger peers. Both the S&P BSE MidCap and the S&P BSE SmallCap declined nearly 0.7%. Fourteen out of the 19 sectoral indices compiled by the BSE Ltd. declined with S&P BSE Realty Index shedding 2%. On the flipside, S&P BSE Bankex and S&P Finance gained over 2%.

The market breadth was skewed in favour of bears. About 1,166 stocks advanced, 1,975 declined and 118 remained unchanged on the BSE.

Banking stocks rallied with S&P BSE Bankex adding 2.32% to 40,899.52 in intraday trade. Sectorally, the trend has reversed. At the market open, only S&P BSE FMCG and S&P BSE Realty indices traded with losses. As of 12 PM, fifteen out of the 19 sectoral indices compiled by the BSE Ltd. were trading with losses with only S&P BSE Bankex, S&P BSE Finance, S&P BSE Metal and S&P BSE Power indices posting gains.

Retail investors led subscription in the four IPOs that launched today. The portion reserved for retail investors in all four IPOs -- Devyani International Ltd., Krsnaa Diagnostics Ltd., Exxaro Tiles Ltd. and Windlas Biotech Ltd. -- was oversubscribed within two hours.

The offers of Exxaro Tiles and Windlas Biotech were subscribed 3.69 and 2.66 times, while Devyani International and Krsnaa Diagnostics were subscribed 2.22 and 1.70 times respectively, at the time the Indian markets closed. Subscription in the IPOs continues till 5 p.m.

Follow the live subscription updates here:

• Devyani International IPO Subscription Updates: Day 1

• Krsnaa Diagnostics IPO Subscription Status: Day 1

• Exxaro Tiles IPO Subscription Updates: Day 1

• Windlas Biotech IPO Subscription Status: Day 1

Brokerages remained bullish on Bharti Airtel Ltd. after the company missed average analyst earnings estimate in June quarter. Analysts have cited growth in non-wireless segment in India and Africa business as major positives, and expected the company to benefit from recent tariff changes, easing of covid curbs and the ongoing consolidation in the industry.

Shares of Bharti Airtel shed 1.71% to Rs 570.30 apiece before paring most of the losses. Of the 33 analysts tracking the company, 32 maintained ‘buy’ and 1 analyst maintained ‘hold’ recommendation. The overall consensus price of analysts tracked by Bloomberg implied an upside of 23.7%. Shares of Bharti Airtel gained 13.4% in 2021 so far compared to 15% gains for the S&P BSE Telecom index

Goldman Sachs

• Reiterates ‘buy’ with a revised 12-month target price of Rs 675 from Rs 665 earlier.

• June quarter beat driven by non-wireless and Africa businesses.

• India wireless revenue was in-line with the estimates.

• Wireless segment to deliver 20%+ revenue growth for next two years.

• Moderating covid-19 headwinds, benefit from tariff changes and continuing market share gains to aid revenue growth.

Jefferies

• Maintains ‘buy’ with the target price increased to Rs 685 from Rs 655.

• Strong revenue growth in India non-mobile biz and Africa aided June quarter earnings.

• Subscriber additions in 4G and postpaid segments were encouraging

• Airtel’s data traffic growth remained healthy at 49% YoY.

• Addition of 55,000 broadband base stations in June quarter, highest in over 5 years, likely to support data traffic growth.

• Expect network costs to return to growth in subsequent quarters.

• Strong subscriber additions and higher than expected ARPU aided Africa revenue growth.

ICICI Securities

• Reiterates ‘buy’ with a target price of Rs 675.

• Higher Ebitda in India mobile biz and impressive performance in Africa supported growth in June quarter.

• Recent tariff hikes and normalization of recharge cycle in mobile to support earnings for the next two quarters.

• Home and enterprise business performance continues to be strong.

• Superior execution and rising probability of further consolidation in telecom market bodes well for the company.

Shares of Dabur India Ltd. shed 2% to Rs 601.95 apiece even as analysts remained bullish post the June quarter in which the earnings exceeded estimate.

Of the 41 analysts tracking the company, 25 maintained ‘buy’, 13 maintained ‘hold’ and 3 maintained ‘sell’ recommendations. The average consensus price of analysts tracked by Bloomberg implied an upside of 45%. Shares of Dabur India added 13.8% in 2021 so far as compared to 7.24% gains for NSE Nifty FMCG index.

Credit Suisse

• Maintains ‘outperform’ with the target price raised to Rs 680 from Rs 580

• June quarter revenue was significantly ahead of expectations.

• India business 2-year revenue CAGR of 10.3% YoY was very strong.

• Health supplements continued strong growth despite a high base.

• Oral case segment continues to gain market share.

• Sustained Ebitda margin through a combination of price hikes and cost saving initiatives despite 8-9% input cost inflation.

Jefferies

• Maintains ‘hold’ with the target price increased to Rs 630 from Rs 560 earlier.

• Aggression on new launches is showing up in market share gains across categories.

• Foods business grew the fastest, followed by healthcare segment.

• Gross margins remained under pressure mainly due to higher raw material prices.

• Company likely to take further prices in December quarter if inflation does not subside.

• Home & Personal Care, Foods portfolio are likely to grow faster as the covid curbs are eased while Healthcare growth is likely to moderate.

IDBI Capital Market

• Upgrades to ‘buy’ from ‘hold’ with the target price increased to Rs 722 from Rs 526.

• Strong growth and market share gains across all key verticals, Health Care, Home Care, Personal Care and Foods augurs well for growth prospects.

• Aggressive product launches and strong market share gains are healthy signs.

• International business continues to post strong recovery.

• Focus on maintaining operating profit margin despite pressure on gross margin is comforting.

Key Risk: Contraction in gross margin due to rapid rise in raw material price is concerning.

Shares of IIFL Wealth Management Ltd. gained 12.01% to Rs 1,550.00 apiece after the company reported sequential growth in net profit and operational revenue in June quarter post market hours on Tuesday.

June Quarter Earnings (Consolidated)

• Net profit at Rs 119 crore vs Rs 103 crore QoQ

• Revenue from operations at Rs 283 crore vs Rs 266 crore QoQ

• Other income at Rs 21 crore vs Rs 22 crore QoQ

• Total expenses at Rs 153 crore vs Rs 152 crore QoQ

All the four analysts tracking the company maintained ‘buy’ recommendation. The overall consensus price of analysts tracked by Bloomberg implied a downside of 6.1%.

Shares of IIFL Wealth Management added 53% in 2021 so far. The relative strength index is 75 suggesting that the stock may be in overbought territory.

Shares of Trident Ltd. gained 4.96% to Rs 22.20 apiece after it announced on Tuesday its entry into detergent market with the launch of ‘Tri-Safe’ washing powder.

The company commenced the commercial production of the Tri-Safe washing powder on August 2 at its Budhni facility in Madhya Pradesh with current installed capacity of 10 MT/Day.

All three analysts tracking the company maintained ‘buy’ recommendation. The overall consensus price of analysts tracked by Bloomberg implied a downside of 21.2%. Shares of Trident have added 129% in 2021 so far as compared to 14.5% gains for S&P BSE Sensex. The Relative Strength Index is 78 suggesting that the stock may be overbought.

Coforge drops as much as 6.1%, most intraday since May 10, after about 30.9 lakh shares change hands on NSE, according to data compiled by Bloomberg.

• Most traded Indian stock by value

• Worst performer on NSE Nifty Midcap 50, NSE Nifty IT, NIFTY Midcap 100 indexes

• Extends decline to second day

• Trading volume >6.3x 3-month full-day average

• Buyers, sellers not immediately known

Stocks of companies controlled by India’s Essel Group, including its flagship firm Zee Entertainment Enterprises, gained after Chairman Subhash Chandra said the group had repaid a sizable portion of its debt.

• NOTE: On Aug. 3, Chandra said that the group had emerged from being financial stressed and settled 91% of total debt owed to 43 lenders through 110 accounts; the letter, however, didn’t give details on the outstanding amount or how repayment was made

  • Chandra said Essel Group had exited or divested infrastructure, financial services and print media and some other businesses

  • The letter also said that Essel group companies Zee Learn, SITI Networks and Zee Media are going through a difficult phase, mainly due to a lack of capital

India’s key stock benchmarks climbed to fresh record high as investors bet that Asia’s third-largest economy will keep the stimulus taps flowing to recover from a deadly wave of the coronavirus.

The S&P BSE Sensex breached the 54,000-mark for the first time and the 50 share NSE Nifty 50 climbed nearly 0.8% to a new all-time high of 16,253.95. The Sensex, which saw an intraday high of 54,256.13, is the twelfth-highest gainer among almost 100 global indexes tracked by Bloomberg over the past year.

Reliance Industries Ltd. and HDFC Ltd contributed the most to the index gain, while Bharti Airtel was the worst performer after posting a disappointing first quarter earnings Tuesday after market hours.

The broader markets underperformed the larger peers. The S&P BSE MidCap gained 0.15% and the S&P BSE SmallCap rose 0.44%. Fourteen out of the 19 sectoral indices compiled by the BSE Ltd. gained with S&P BSE Metal Index climbing 1.45%. The market breadth was skewed in favour of bulls. About 1,809 stocks advanced, 931 declined and 105 remained unchanged on the BSE.

The run-up in stocks comes before the central bank’s monetary policy decision Friday, where interest rates are expected to be left at an all-time low even as inflation accelerates. The upswing factors in expectations of future growth as central banks around the world take steps to protect their economies, Finance Minister Nirmala Sitharaman told parliament on Tuesday.

Domestic institutional investors such as mutual funds and insurance firms bought about $2.5 billion of Indian stocks in July, according to data compiled by Bloomberg. That offset a net sale of $1.7 billion by foreign funds, the biggest outflow since March 2020 when the nation went into one of the strictest lockdowns to curb the spread of the virus.

Indian rupee bond traders are awaiting the sale of Rs 17,000 crore of treasury bills at a weekly auction. The Reserve Bank of India’s monetary policy committee’s bi-monthly monetary policy review begins today.

• 10-year yields little changed at 6.2% on Tuesday

• USD/INR little changed at 74.2825 on Tuesday

  • Implied opening from forwards suggest spot may start trading around 74.27

• Global funds buy net Rs 2,120 crore of India stocks Tuesday: NSE

  • They sold Rs 502 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 82 crore of corporate debt

  • State-run banks bought Rs 850 crore of sovereign bonds on Aug. 3: CCIL data. Foreign banks bought Rs 312 crore of bonds

Mumbai-based cement maker Nuvoco Vistas Corp. has set a price range of Rs 560 to Rs 570 per share for its initial public offering that aims to raise as much as Rs 5,000 crore ($674 million), according to an advertisement in the Financial Express newspaper Wednesday.

• The company, part of Nirma group, seeks to raise up to Rs 1,500 crore by selling new shares, while founder firm Niyogi Enterprise Pvt. will sell as much as Rs 3,500 crore worth of shares in an offer for sale as part of the IPO

• Investors can bid for minimum 26 shares of face value Rs 10 each in the sale, which opens Aug. 9 and closes Aug. 11; as much as 35% of the shares on sale is for bidding by retail investors

• ICICI Securities, Axis Capital, HSBC Securities, JPMorgan India and SBI Capital are managing the sale

• Devyani International IPO at Rs 86-90/share, offer opens Aug. 4, closes Aug. 6

• Windlas Biotech IPO at Rs 448-460/share, Offer opens Aug. 4, closes Aug. 6

  • Raises Rs 120 crore from anchor investors in IPO

• Exxaro Tiles IPO at Rs 118-120/shares, offer to open Aug. 4, close Aug. 6

  • Allots 1.97 million shares to anchor investors at Rs 120 each

• Krsnaa Diagnostics IPO at Rs 933-954/share, offer open Aug. 4, close Aug. 6

• Cartrade Tech sets price range at Rs1,585-1,618/share for $403 million IPO, offer open Aug. 9-11

Asian stocks were steady Wednesday as China’s clampdown on its technology giants and the spread of the delta Covid-19 strain restrained sentiment.

Shares rose in China and Hong Kong, but slipped in Japan, where SoftBank Group Corp. retreated on a potential block of its $40 billion sale of Arm Ltd. to chip company Nvidia Corp. U.S. equity contracts posted modest losses. Company earnings took the S&P 500 to another all-time high overnight.

India's SGX Nifty 50 Index futures for Aug. delivery rose 0.5% to 16,245.00, while MSCI Asia Pacific Index +0.4%. The NSE Nifty 50 Index added 1.6% Tuesday to 16,130.75.

The 10-year U.S. Treasury yield held its retreat and oil weakened toward $70 a barrel. The delta strain is exacerbating concerns that the rebound from the pandemic is losing steam. New Zealand jobs data strengthened rate-hike bets, bolstering its currency but weighing on the 10-year bond.

Back home, Bharti Airtel, Tata Consumer, Adani Enterprises may react as the companies reported quarterly results after the market closed Tuesday. SBI, Bosch, Titan, Godrej Consumer, HPCL, Apollo Tyres are among companies scheduled to report earnings Wednesday. Hero MotoCorp, Godrej Consumer, JSW Energy, KEC International are among companies holding annual shareholders’ meeting.

Foreign investors sold net Rs 1,490 crore of stocks on Monday, according to NSDL website.