Sensex, Nifty Register Biggest Single-Day Drop In Nearly Two Months

Indian stock benchmarks dropped, with key benchmarks registering their steepest single-day drop in nearly two months as investors booked profit after yesterday's record closing.

The S&P BSE Sensex fell nearly 1% to 52,568.94 while the NSE Nifty 50 too declined by a similar magnitude to 15727.90 -- the biggest drop for both the indices since May 12.

Tata Steel was the worst performer on the Sensex, falling 2.3%, followed by a 1.9% decline in Sun Pharmaceutical Industries Ltd. Of the 30 stocks in benchmark Sensex, 24 traded lower. ICICI Bank and HDFC Bank contributed the most to the index’s decline.

Tata Consultancy, which will kickoff corporate earnings season for June quarter later Thursday, also traded lower, easing 0.5%.

“The earnings season would provide some direction to the market and offer cues about the economic revival,” Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, wrote in a note. “Consistent earnings delivery versus expectations are critical for further outperformance in our view.”

The broader markets fared a little better than their larger peers. The S&P BSE MidCap fell 0.4% while the S&P BSE SmallCap was little changed. Seventeen of the 19 sectoral indices declined, led by the S&P BSE Metal index, down 2.4%.

The S&P BSE Utilities index was the best performer, gaining nearly 0.6%.

Equity mutual funds see net inflow of Rs 5,988.2 crore in June compared with inflow of Rs 10,082.9 crore in May.

JUNE MUTUAL FUND DATA

• Multi-cap funds: Inflow of Rs 209.5 crore vs inflow of Rs 1,954.2 crore in May

• Large-cap funds: Inflow of Rs 547.3 crore vs inflow of Rs 937.4 crore in May

• Mid-cap funds: Inflow of Rs 1,729.1 crore vs inflow of Rs 1,368.1 crore in May

• Small-cap funds: Inflow of Rs 705.1 crore vs inflow of Rs 1,080 crore in May

• Total net inflow of Rs 15,320.3 crore vs net outflow of Rs 38,601.9 crore in May

• Average AUM: Rs 34.1 lakh crore in June vs Rs 32.99 lakh crore in May

Source: AMFI

Nifty Metal is the worst performing sectoral index today.

Nifty Metal shed 1.62% compared with the NSE Nifty 50 Index’s 0.72% decline as of 1:30 p.m.

Metal stocks which gained in the previous session pared most of the gains.

SAIL (-2.89%), Hindalco (-2.34%) , JSW Steel (-2.10) and Tata Steel (-1.61%) are among of the top losers.

Nifty Metal has shed 0.12% over the last week with shares of NMDC leading the losses (-8.4%) while National Aluminium gained 6.74%.

The decline in Nifty Metal comes amid strengthening U.S. dollar powered by reaffirmation of taper timeline by the U.S. Federal Reserve as exemplified in the minutes of the June policy meeting.

Shares of the healthcare firm gained as much as 10.8% to Rs 1009.80, a new all-time high level. The stock has risen for nine consecutive session and is up over 117% so far this year.

Bajaj Healthcare said in a regulatory filing that it has received a licence from Defence Research and Development Organisation (DRDO) to Manufacture and Market of ‘2-Deoxy-D-Glucose’ as approved medication for the treatment of COVID-19 patients.

• Trading volume was more than quadruple the 20-day average for this time of day.

• The shares are up 18 percent in the past 5 days and rose 25 percent in the past 30 days.

• The relative strength index on the stock was above 70, indicating it may be overbought.

Cairn Energy Plc is closer to seizing Indian state-owned properties in Paris, part of the company’s attempt to recover a $1.2 billion arbitration award it won last year.

A French court froze residential real estate belonging to the Indian government, Cairn said in a statement Thursday. The order affects 20 properties valued at more than 20 million euros ($24 million), it said.

To read the full report, click here.

Alembic Pharmaceuticals Ltd. said it has received final US FDA approval for its antidepressant drug.

The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), Norpramin Tablets, 10 mg, 25 mg, 50 mg, 75 mg, 100 mg, and 150 mg, of Validus Pharmaceuticals LLC.

Desipramine Hydrochloride Tablets USP, 10 mg, 25 mg, 50 mg, 75 mg, 100 mg, and 150 mg have an estimated market size of $7 million for twelve months ending March 2021 according to IQVIA.

Macrotech Developers had pre-sales of Rs 957 crore ($128 million) in the three months ended June 30 vs Rs 2,530 crore in the previous quarter, the company said in an exchange filing.

• “While April and May had very limited pre-sales on account of the second Covid wave in India, June saw pre-sales of Rs 654 crore. This pick-up in June is despite some continuing Covid related restrictions in our operating markets”

• The company is on track to meet its pre-sales guidance if no further Covid related disruptions happen

• Q1 collections at Rs 1,710 crore, down 18% QoQ

• Group net debt reduced by Rs 3,600 crore for Q1

• Macrotech entered into joint development agreements for 2 projects in Q1 totaling 1.5 million sq. ft. of saleable area

Sovereign bonds in India advance after a report quoted RBI Governor Shaktikanta Das as saying any hasty withdrawal from easy monetary policy may undo gains achieved after the pandemic.

• Inflation is showing signs of stickiness, but that’s only a ‘transitory hump’ that should moderate in the third quarter of the financial year, Das told Business Standard newspaper in an interview

• Yield on 5.63% 2026 bond drops 4bps to 5.76%; that on 6.64% 2035 note falls 3bps to 6.76%

Shares of KPR Mill gained as much as 9.9%, the most in two months, to a record high of Rs 1868.40.

The board will consider a proposal for a stock split at its meeting on July 27, the company said in its exchange filing yesterday.

Earlier this week, KPR Mill resumed operations in all its units in Tamil Nadu which were hit due to lockdown.

The stock has gained 16% in the past 5 days and rose 10% percent in the past 30 days. The relative strength index on the stock was above 70, indicating it may be overbought.

Analysts have four buy, no hold, and no sell recommendations on the stock. The price target of Rs 1,558.67 represents a 12.1% decrease from the last price, according to Bloomberg data.

Shares of PNB Housing Finance hit 5% upper circuit after its parent Punjab National Bank asked it to reconsider a Rs 4,000 crore fund raising plan.

According to the exchange notice, the PNB board met on July 3, considered the opinion of a law firm, and decided to ask for the deal to be reconsidered. The decision was taken considering a letter by the Securities and Exchanges Board of India dated June 18.

The board has decided to wait till July 12, when the Securities Appellate Tribunal order on the matter is due.

To read the full report, click here.

Retail sales of passenger vehicles, which include cars and SUVs, rose to 184,134 units in June, compared with 128,360 units a year ago, Federation of Automobile Dealers Associations says in a statement.

• June passenger vehicle retail sales were still 10.3% lower compared with June 2019, according to the group

• NOTE: India last year in late March had imposed a nationwide lockdown to curb the spread of coronavirus, impacting sales of vehicles

• Commercial vehicle retail sales in June at 35,700 units, compared with 10,619 units y/y and 65,035 units in June 2019

• Motorcycle and scooter retail sales in June at 930,324, a rise of 16.9% y/y but 30.5% lower compared with June 2019

• Total vehicle retail sales in June rise 22.6% y/y on a low base, but a 28.3% fall from June 2019 levels

• “Overall, the Industry is still not out of the woods,” the dealers’ group says in the statement, adding that demand is expected to pick up in the near term

Indian bond traders will consider comments by Reserve Bank of India Governor Shaktikanta Das that hasty withdrawal from easy monetary policy can undo gains and inflation spike is a transitory hump in an interview with the Business Standard newspaper.

• 10-year yields fell by 1bp to 6.17% on Wednesday

  • Yield on 5.63% 2026 bond declined 4bps to 5.80%; 6.64% 2035 bond yield fell by 3bps to 6.79%

• Traders await Rs 20,000 crore of bond purchases by the RBI as part of its government securities acquisition program

  • Plans to buy 8.24% 2027, 7.17% 2028, 7.59% 2029, 7.88% 2030, and 7.57% 2033 bonds

• USD/INR advanced 0.1% to 74.6187 on Wednesday

  • Implied opening from forwards suggest spot may start trading around 74.86

Indian stocks were off to a slow start with key benchmarks swinging between minor gains and losses as investors shift focus to quarterly earnings to gauge the momentum of the economic recovery.

The S&P BSE Sensex was little changed at 53,062.47 while the NSE Nifty 50 too remained flat at 15,874.95. Both the indexes closed at a record high yesterday. HDFC Bank Ltd. contributed the most to the index decline, decreasing 0.5%. Tata Motors Ltd. had the largest drop, falling 1.6%.

The broader markets outperformed their larger peers. The S&P BSE MidCap rose 0.46% while the S&P BSE SmallCap advanced 0.67%. Thirteen of the 19 sectoral indices climbed, led by the S&P BSE Utilities index, up 1.2%.

The market breadth was skewed in favour of the bulls. About 1,794 stocks advanced, 827 declined and 91 remained unchanged on the BSE.

Tata Consultancy, Asia’s biggest exporter of software services, is scheduled to report results for the June quarter after market hours today.

“The earnings season would provide some direction to the market and offer cues about the economic revival,” Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services wrote in a note. “Consistent earnings delivery versus expectations are critical for further outperformance in our view.”

Online food delivery and restaurant discovery platform Zomato Ltd. plans to raise Rs 9,000 crore issuing new shares, while its investor Info Edge India will sell as much as Rs 375 crore of shares in an initial public offering, according to an advertisement in the Financial Express newspaper Thursday.

• IPO opens July 14 and closes July 16; investors can bid for minimum 195 shares of face value of Re 1

• IPO size has been raised to Rs 93,75 crore vs Rs 8,250 crore in DRHP

• IPO includes 65 lakh shares reserved for employees

• Kotak Mahindra Capital, Morgan Stanley India, Credit Suisse Securities, BofA Securities and Citigroup Global are managing the issue

• NOTE: Zomato, an Indian food delivery startup backed by Jack Ma’s Ant Group Co., to use the proceeds to expand its business and for acquisitions.

Good morning!

Most Asian stocks slipped Thursday following gains for U.S. shares and Treasuries, as Federal Reserve minutes showed policy makers awaiting more evidence of a robust economic recovery to set a timeline for trimming bond purchases.

Equities dipped in Japan, where another virus state of emergency for Tokyo looks imminent. Hong Kong and China opened lower. U.S. futures fluctuated after the S&P 500 and Nasdaq 100 both closed at all-time highs. Ten-year U.S. Treasury yields steadied around 1.30% after falling for seven trading days as inflation expectations continued to ease.

India's SGX Nifty 50 Index futures for July delivery fell 0.3% to 15,836.50, while MSCI Asia Pacific Index slid 0.5%. The NSE Nifty 50 Index added 0.4% Wednesday to 15,879.65.

The Fed minutes indicated officials weren’t ready to communicate a schedule for scaling back their bond-buying program, due to high uncertainty over the course of the recovery. They did, however, want to establish a plan in case a move is needed sooner.

The dollar held gains against a basket of major currencies. Oil slid as investors await further signals from the OPEC+ alliance on production plans after a breakdown in talks.

Back home, TCS is scheduled to report earnings Thursday. Bank of Baroda, Embassy Office among companies holding their annual shareholders’ meeting. Foreign investors bought net Rs 1,040 crore of stocks on Tuesday, according to NSDL website.