Sensex, Nifty Fall For A Fourth Straight Day Amid Profit-Booking

Indian equities declined for a fourth day as a rebound in auto, pharma and FMCG was overshadowed by profit booking in financials and IT space.

The S&P BSE Sensex fell 0.3% at 52,318.60 after completing five straight positive quarters Wednesday. The NSE Nifty 50 Index too fell a similar magnitude, with Infosys and HDFC Bank weighing on both measures. Thirteen of the 19 sector sub-indices compiled by BSE Ltd. fell, led by a gauge of power companies.

India’s steady pace of vaccination and dropping number of Covid-19 cases has helped states ease curbs on peoples’ movements. Industrial activity has been gathering pace, with key industries’ output increasing 16.8% in May.

Gail India Ltd. has been awarded Rs 930 crore ($125 million) in an arbitration matter against power producer Andhra Pradesh Gas Power Corp. over gas supply price, two people familiar with the matter said.

• Arbitration judge G.P. Mathur upheld Gail’s claim that Andhra Power Gas supplied the power generated using subsidized gas to private users instead of public utilities

• Arbitration award dated June 21 asks Andhra Pradesh Gas to pay Gail the difference in price of gas meant for public and private use for the duration of 2005 to 2017 along with interest

• A Gail spokesperson couldn’t immediately comment, while Andhra Pradesh Gas Power chairman was not immediately available for comment

Sequent Scientific said its plan to expand into specialty branded generics for animals will attract new investment while stalling margin expansion.

• Shares fall as much as 8.6%, most since April 12; worst performer on Nifty Smallcap 100, with trading volume > 3.6x 3-month full-day average

• Company aims to expand in the U.S. and some European markets and will start making value-added generics, Managing Director Manish Guptasays on a conference call

  • Plans capex of about $30 million over next 24 months for planned expansion that may stall margin expansion seen in recent years

  • “We are taking a break from that in terms of margin expansion, because we are building up,” Gupta says

  • NOTE: FY21 margin expansion 250 bps vs 200 bps it forecast: 4Q earnings presentation

• Shares +69% YTD, extending 2020’s 140% rally

Sterlite Technologies Ltd. rose 5.9%. Trading volume was triple the average for this time of day.

• The stock was the best performer among its peers.

• Trading volume was 1.12 million shares, triple the 20-day average of 362,285 shares for this time of day.

• Analysts have six buy, two hold, and one sell recommendations on the stock.

• The price target of Rs 270.71 represents a 3.3% decrease from the last price

Info Edge India Ltd. rose 5.1%. Trading volume was quadruple the average for this time of day.

• The stock was the best performer among its peers.

• Trading volume was 889,441 shares, quadruple the 20-day average of 220,826 shares for this time of day.

• The shares are up 8% in the past 5 days and rose 17% in the past 30 days.

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

• The price target of Rs 4,633.79 represents a 10% decrease from the last price

IHS Markit releases India’s June manufacturing purchasing managers’ index.

• Index falls to 48.1 from 50.8 in May; Year ago 47.2

  • Lowest reading since July 2020

• Output falls to 47.3 vs 52 in May

  • Lowest reading since July 2020

  • Reverses expansion trend

• New orders fall vs prior month

  • Lowest reading since July 2020

NOTE: Reading above 50 signals expansion, less than 50 a contraction

Indian equity benchmarks fluctated between gains and losses amid weak Asia trading and a firmer dollar as traders weighed signs that Covid-19 flareups are hampering some of the region’s manufacturing and looked ahead to a U.S. payrolls report.

The S&P BSE Sensex dropped as much as 0.1% to 52,422.28, after opening 0.3% higher. The NSE Nifty 50 Index advanced 0.1% to 15,738.45. Fourteen of the 19 sector sub-indexes compiled by BSE Ltd. gained, led by a gauge of auto companies.

India’s steady pace of vaccination and dropping number of Covid-19 cases has helped states ease curbs on peoples’ movements. Industrial activity has been gathering pace, with key industries’ output increasing 16.8% in May. Monthly auto sales and PMIs are due later today.

Foreign investors were net buyers of $2.36 billion of Indian equities this month as of June 29, after selling for the previous two months, according to National Securities Depository Ltd.

“We are almost at the end of the results season, hence the focus could shift from stocks to the index or large-caps for the next fortnight,” said Deepak Jasani, head of retail research at Mumbai-based HDFC Securities.

GR Infraprojects Ltd., a road engineering, procurement and construction company, plans an IPO of 11.5 million shares to raise as much as Rs 960 crore, according to an advertisement in the Financial Express newspaper Thursday.

• Among shareholders, founder Lokesh Builders Pvt. will sell up to1.14m shares in the IPO, while investors India Business Excellence Fund I plans to sell 6.41m shares and India Business Excellence Fund will offer 3.16m shares

• Company is not selling any new shares in the IPO, which opens July 7 and closes July 9

• Investors may bid for minimum 17 shares of face value Rs 5

• Company has various road/highway projects across 15 states in India and has also diversified into projects for the railway sector: prospectus

• HDFC Bank, ICICI Securities, Kotak Mahindra Capital, Motilal Oswal, SBI Capital and Equirus Capital are managing the sale that constitutes 11.9% of post paid-up capital

Indian bond traders will be awaiting details of a revised borrowing calendar after a report said that the govt will borrow more from July onwards to compensate states for loss in tax revenue. Traders are also waiting to see whether RBI announces any bond purchases for the next week.

• NOTE: India may raise an additional Rs 1.58 lakh crore to fund a shortfall in the Good and Services Tax, NewsRise reported, citing an unnamed senior government official, according to Mumbai-based traders

  • Finance Minister Nirmala Sitharaman had earlier said that the central government will borrow a similar amount on behalf of states

• 5.63% 2026 bond yield rose 4bps to 5.72% on Wednesday; 5.22% 2025 yield up 5bps to 5.60%; 10-year yields also climbed 1bp to 6.05%

• USD/INR rose 0.1% to 74.3313 on Wednesday

• Implied opening from forwards suggest spot may start trading around 74.37

• India’s current-account deficit widened more than expected as the trade gap expanded and the country saw lower private transfers from abroad

  • The shortfall in the current account, the broadest measure of overseas trade, was $8.1 billion, or 1% of gross domestic product, in January-March period, the Reserve Bank of India said in a statement after close of markets Wednesday. That compares with a median estimate of $7.5 billion in a Bloomberg survey

Good morning!

Asian stocks slipped Thursday amid a firmer dollar as traders weighed signs that Covid-19 flareups are hampering some of the region’s manufacturing and looked ahead to a U.S. payrolls report.

Japan and China were among the major equity markets posting modest losses. Purchasing managers’ indexes suggested curbs imposed to fight the virus had sapped output in parts of Asia. U.S. equity contracts rose after the S&P 500 completed one of the best first halves since 1998 for U.S. shares.

India’s SGX Nifty 50 Index futures for July delivery little changed at 15,741, while MSCI Asia Pacific Index down 0.3%. The NSE Nifty 50 Index fell 0.2% Wednesday to 15,721.50.

The recent spread of the delta virus variant is tempering the optimism around the global recovery. The dollar advanced after its best month since March 2020 and Treasuries were steady. The payrolls report due Friday will provide a key gauge of economic progress, helping to shape expectations of when the Federal Reserve might start tapering stimulus.

Elsewhere, oil retained a climb ahead of a meeting between OPEC+ producers on output policy and as a stalemate in Iranian nuclear talks drags on.

Back home, Vodafone Idea, SpiceJet, Dish TV may react as the companies reported quarterly results after the market closed Wednesday. Supreme Petrochem, Aptech are the companies holding their annual shareholders’ meeting. Markit India manufacturing PMI data for June to be released; Automobile companies to release sales data for June. Foreign investors bought net Rs 3,290 crore of stocks on Tuesday, according to NSDL website.