Sensex, Nifty Log Best Quarterly Stretch Since 2015 Despite Three-Day Loss
If a third front mahagathbandhan comes to power after Election Results 2019, then it will be a disaster for the stock markets. (Photographer: Dhiraj Singh/Bloomberg)

Sensex, Nifty Log Best Quarterly Stretch Since 2015 Despite Three-Day Loss

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Closing Bell

India stocks declined for a third day as investors booked profit after key benchmarks closed at record levels last week.

The S&P BSE Sensex lost 0.1% to 52,482.71, but registered fifth-straight quarterly gain after advancing 6% in April-June. The measure rose 2% this month. The NSE Nifty 50 Index fell nearly 0.2% to 15,721.50. It gained 1.8% this month and 7% for the quarter.

Sensex, Nifty Log Best Quarterly Stretch Since 2015 Despite Three-Day Loss

The broader market outperformed their larger peers. The NSE Nifty Midcap 100 rose 0.22% and NSE Nifty Smallcap advanced 0.26%. Eleven of the 19 sector sub-indices compiled by BSE Ltd. declined, led by a gauge of utilities companies.

"Market is in profit booking mode for last couple of days, as recent surge in crude prices and weakening rupee weighed on sentiment," Binod Modi, Head Strategy at Reliance Securities wrote in a note. "We believe any meaningful correction in the market should be offering opportunity to investors to get in quality stocks."

India has been stepping up the pace of coronavirus vaccinations, while states begin to ease restrictions. Indicators later today may shed more light on the state of the economy, with scheduled releases including the performance of key industries and the government’s fiscal deficit.

Nifty's Top Gainers And Losers In April-June Quarter

Sensex, Nifty Log Best Quarterly Stretch Since 2015 Despite Three-Day Loss

Adani Stocks Extend Selloff

Shares of Adani group companies were among the worst performing stocks on the bourses.

  • Adani Total Gas - down 5%, hits lower circuit for sixth straight day.

  • Adani Transmission - down 5%, sixth session of loss.

  • Adani Power - down 2.6%, second day of loss.

  • Adani Enterprises - down 1.1%, second day of loss.

  • Adani Ports & SEZ - down 1.2%, second day of loss.

  • Adani Green Energy - up 0.6%, second day of gains.

Macrotech Promoters Repay Rs 1,596 Crore Debt Owed To Company

Promoters of Macrotech Developers have repaid an entire debt of 15.96 billion rupees owed to the company as of March 31 this year, the Mumbai-based developer said in a stock exchange filling.

  • The repayment, combined with funds raised via an IPO and continued organic free cash flow generation are helping the Mumbai-based company to progress further in its deleveraging plans, it said

    • The developer targets significant reduction in net debt to Rs 10,000 crore by the end of FY22

    • NOTE: On May 14, Macrotech said the company will become net cash positive in 3 years

    • It will continue to focus on capital-light growth strategy around affordable and mid-income housing, and digital infrastructure such as warehousing, data centers and industrial parks

  • Promoters raised debt-repayment funds by means of a long-term instrument having tenure greater than 3 years with no repayment obligation prior to that

    • Promoters plans to deleverage themselves by bringing their holding in the company down to a maximum of 75% over a period of three years

Cummins India Jumps The Most In Three Months After Kotak Ups Price Target

Shares of Cummins India Ltd. jumped the most in three months after Kotak Institutional Equities increased its fair value for the stock citing business benefits of CPCB-IV norms and acceleration envisaged in the data center market.

Cummins India's stock gained as much as 6.3%, the most since March 03, to Rs 904.30. It has risen nearly 58% year-to-date versus the 11.3% for the S&P BSE Sensex Index.

Of the 16 analysts tracking the stock, 17 have a ‘buy’ rating, eight suggest a ‘hold’ and eight recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies an downside of 11.3%.

Manappuram Finance Shares Gain As BofA Initiates Coverage With A ‘Buy’ Call

Shares of Manappuram Finance Ltd. gained as much as 3.53% after BofA Global Research initiated coverage on the stock with a ‘buy’ rating and a target price of Rs 225.

In a note, it said that the NBFC’s existing valuation “grossly undervalues its gold loans business” and that a re-rating would be on the cards once its microfinance institution credit costs improve. “We look past the near-term stress in its MFI share, which is 22% of its portfolio and see a business well-placed to deliver 20% earnings-per-share growth and 24% return on equity through FY24.”

It added that it expects the impact of the second Covid-19 wave to wear down by second quarter of FY22 and gold loans to resume their “steady state growth of 12-15% per annum” as branches reopen by then. “A renewed focus on adding customers, the latest loan-to-value ratio at 63% and scope for a sustained increase in ticket size allows for a positive surprise on asset growth,” it said.

In the long-term, BofA said it thinks Manappuram’s MFI arm Asirvad can deliver cross-cycle RoEs in “high-teens”, with strict caps on state and district exposures acting as prudent risk mitigation strategy.

It listed hikes in gold price, lower than expected credit costs and value-unlocking from its potential Asirvad spin-off as upside catalysts, while significant decline in gold price, Covid 3.0 and asset quality cycles in Asirvas as downside risks.

Shares of Manappuram Finance Ltd. gained as much as 3.53%, the most since May 31 this year, to Rs 168.5. Of the 16 analysts tracking the stock, 13 have a ‘buy’ rating, three suggest a ‘hold’ and none recommend a ‘sell’, according to Bloomberg data. The average of 12-month consensus price targets implies an upside of 24.2%.

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