Closing Bell
India's stock benchmarks snapped a two-day winning streak and fell most in four sessions, dragged by metal stocks, amid fall in crude oil prices. Focus shifts to U.S. Federal Reserve chair Jerome Powell's two-day testimony before the Congress, as investor look for cues on rate hike trajectory and tackling inflation.
The Sensex lost over 700 points (1.35%) to 51,822.53, about 100 points of the intraday low. The Nifty declined by similar magnitude to 15,413.30.
The MidCap gauge underperformed its larger peers, falling 1.5% while the SmallCap index outperformed, shedding 1.1%. All the 19 sectoral indices declined, with metal index leading the losses shedding nearly 5%.
The market breadth is skewed in favour of bears. About 1,249 stocks advanced, 2,081 declined and 110 remained unchanged
10-Year Bond Yield Falls
10-year bond yield fell 9bps to 7.40% amid fall in crude oil prices below $110 per barrel.
Yield on the 10-year bond has eased 22bps off three-year high of 7.62% in four days.
Source: Bloomberg
Rupee Closes At Record Low
Indian currency depreciated 0.39% (30 paisa) to close at 78.39, fresh record low.
The Rupee tumbled 13 paisa from 78.26 to 78.39 against the dollar, in the final 15 minutes of the session.
Source: Bloomberg
BofA Cuts Year-End Nifty Target To 14,500
Nifty earnings growth moderation to 15% in FY23/24E could further drive down target to 13,500 (14% downside).
Remains 'overweight' on staples, healthcare and utilities.
Upgrades energy to 'overweight' from 'underweight' on higher energy prices.
Maintains 'neutral' on information technology.
BofA remains cautious on Indian markets despite recent market correction, citing four key reasons
1. Fast tightening monetary conditions
2. Fears of recession
3. Potential EPS cuts
4. Rising crude prices
Source: BofA Global Research note
Nifty Metal Index Falls Over 5% In Intraday Trade
Copper-linked stocks like Hindustan Copper, Hindalco, Vedanta , which rose on Tuesday as copper prices rose on the London Metal Exchange, tumbled in today's session and were among the top losers in Nifty Metal Index.
Source: Bloomberg
Greenlam Industries To Buy Bloom Dekor's Laminate Manufacturing Plant; Stock Surges
Shares of Greenlam Industries climbed 5% after the company entered into an asset purchase agreement with Bloom Dekor Ltd to buy laminate manufacturing plant in Gujarat
A total investment of Rs 51 crore (Rs 36 crore for acquisition of Bloom Dekor's facility and Rs 15 crore to operationalise) will be required for the purchase which will be financed through internal accruals
The proposed capacity will be operationalised by Q2FY2022-23
The laminate manufacturing plant has an existing capacity of 15.62 million sheets per annum and the capacity utilisation is 106% as on Q4FY2021-22.
Trading volume is 1.5 times the 30-day average. Of the seven analysts tracking the company, six maintain 'buy' and one suggests 'hold'. The return potential of the stock is at 11.5%.
Source: Exchange filing, Bloomberg
Dr. Reddy's Laboratories Reverses Early Gains In Weak Market Even As Analysts Reiterate 'Buy'
Shares of Dr Reddy's Laboratories erased nearly 2% gains in early trade and shed over 2.5% in a weak market.
The fall comes despite analysts maintaining 'buy' citing new product launches, core business growth and rising sales in several key markets like Europe.
Of the 43 analysts tracking the company, 38 maintain 'buy', five suggest 'hold'. The return potential of the stock is 17.3%.
Source: Bloomberg
European Markets Decline
European markets fall. U.K. inflation hit a fresh 40-year high of 9.1% in May.
Focus shifts to U.S. Federal Reserve Chair's two-day testimony before Congress, which begins today.
The testimony comes a week after U.S. Federal Reserve ushered in a 75bps rate hike, largest in 28 years.
Source: Bloomberg
Alembic Pharma Shares Decline on Business Degrowth
Shares of Alembic Pharmaceuticals Ltd. fell 1.6% after the company said its business degrew by 12% year-on-year in May compared to 8% in April.
It said the decline was due to higher base in its anti-infective segment a year ago.
It added that the Indian pharmaceutical market for April and May has shown degrowth of -9% and -6% respectively.
"Alembic's speciality segments continue to show a robust momentum on the back enhanced operational momentum and strong new product launches," it said.
Source: Exchange filing
Matrimony.com Jumps Most In Over Five Weeks
Shares of Matrimony.com jumped nearly 14%, the most in over five weeks.
The company approved a share buyback plan to at a buyback price of Rs 1,150 per equity share and size of Rs 75 crore.
The total number of shares to be bought back will be up to 6,52,173. This aggregates to 2.85% of share capital.
The record date to ascertain eligible shareholders will be July 4.
Trading volume is more than six times the 30-day average. Of the three analysts tracking the company, two maintain 'buy' and one suggest 'hold'. The return potential of the company is 17.6%.
Source: Exchange filing, Bloomberg
Dish TV's Promoter Entity Argues Against Yes Bank's Right To Vote At June 24 EGM At Bombay HC Division Bench
Dish TV’s promoter entity argues before the Bombay High Court division bench against Yes Bank's right to vote at June 24 EGM.
Senior Advocate Navroz Seervai argues on behalf of World Crest- Dish TV’s promoter entity.
Single judge bench denied interim relief without considering arguments based on Supreme Court’s PTC Financial judgment.
U.K. CPI Inflation Rose To Fresh Four-Decade High In May
U.K. inflation for May came it at 9.1%, from 9% in April (which was a four-decade high as well).
Retail prices rose to 11.7% while raw material costs jumped 22.1%, most ever.
Source: Office for National Statistics, Bloomberg
Rupee Slips To 78.29 Against Dollar
USD/INR 1-Year Forward Premium Slides Below 3%
USD/INR 1-Year Forward Premium Falls 3%, for the first time in 11 years since 2011.
Source: Bloomberg
LIC On Course For Longest Winning Streak Since Debut
Shares of LIC are set to gain for third day in a row, the longest winning streak since its listing.
Today, Goldman Sachs initiated coverage with a 'neutral', the target price is set at Rs 700, an implied return of 4.07%
Over the weekend, JPMorgan initiated coverage with 'overweight'. JPMorgan has set a price target of Rs 840.
Source: Bloomberg
Zomato Gains Most In A Week
Shares of Zomato jumped almost 4% in a weak market, the most in over a week.
The rise comes after the company said it will consider a potential acquisition transaction on Friday in its board meeting. Zomato will consider the acquisition through issuance of equity shares by way of a preferential issue.
Of the 20 analysts tracking the company, 16 maintain 'buy', two suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 34.6%. Credit Suisse maintained 'outperform' with the target price kept unchanged at Rs 90 (implied upside of 36.26%), on Tuesday.
Source: Exchange filing, Bloomberg
Dixon Technologies Falls Most In Two Weeks
Shares of Dixon Technologies fell over 6%, most in over two weeks.
Over the last two days, Jefferies and Credit Suisse maintained 'buy' and 'outperform', and kept the target unchanged while Morgan Stanley slashed target and remained 'Underweight/Inline' on the scrip. Morgan Stanley believes that weak consumer electronics, domestic lighting volumes, high commodity prices as key concerns for the company.
Of the 21 analysts tracking the company, 14 remain 'buy', three suggest 'hold' and four recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 30%.
Trading volume is more than quadruple the 30-day average
Source: Brokerage notes, Bloomberg
PVR, Inox Leisure Extend Gains As Exchanges Approve Merger Plan
Shares of PVR and Inox Leisure both gained nearly 2%, following the 5% rise on Tuesday's session.
The rise comes after NSE and BSE gave their approval to the PVR-Inox Leisure merger plan post market hours on Tuesday.
The next step is to get the clearance from NCLT. CCI has not raised objections about the merger, but could potentially get involved post merger, according to a Nirmal Bang note.
Source: Exchange filing, Bloomberg, Nirmal Bang note
Jain Irrigation Jumps 37% In Two Days
Shares of Jain Irrigation rose 17%, following a 20% uptick in Tuesday's session.
Trading volume is more than 78 times the 30-day average.
The rise comes after the company announced that its subsidiary Jain International Trading B.V. and Temasek-owned Rivulis entered into definitive transaction agreements.
Jain Irrigation's international irrigation business will be merged with Rivulis, according to an exchange filing post market hours on Tuesday.
The cash proceeds will be utilised for 45% debt reduction in Jain Irrigation.
Jain International business will hold 22% stake in the merged entity while Temasek will hold the balance 78%.
Jain Irrigation will also be able to release its corporate guarantee worth Rs 2,275 crore to bondhonders and lenders.
Source: Exchange filing, Bloomberg
Opening Bell: Sensex, Nifty Open Lower; Metals, I.T. Stocks Fall
India's stock benchmarks opened lower, dragged by losses in oil & gas, metal, energy and power stocks.
The S&P BSE Sensex lost over 300 points (0.62%) to 52,204.74. The NSE Nifty 50 declined by similar magnitude to 15,539.30. Today, 39 of the Nifty 50 stocks fell while 11 rose.
The S&P BSE MidCap almost mirrored its larger peers wile S&P BSE SmallCap outperformed, losing 0.4%. Seventeen of the 19 sectoral indices compiled by BSE Ltd. declined with Metal index falling 3%.
The market breadth is skewed in the favour of bears. About 957 stocks rose, 1,284 fell and 90 remained unchanged.
Rupee Falls Against Dollar
Indian currency fell 0.13% to 78.18 at the open.
Source: Bloomberg
10-Year Bond Yield Falls
Yield on the 10-year bond lost 6bps to 7.42%, amid fall in crude oil prices below $110 per barrel.
Source: Bloomberg
PVR-Inox Leisure Merger Plan Gets Approval From Exchanges
PVR, Inox Leisure's merger plan gets approval from BSE, NSE.
The scheme of amalgamation remains subject to applicable regulatory approvals.
Source: Exchange notification
Paint Makers In Focus As Crude Oil Price Falls Below $100 Per Barrel
Shares of paint companies may move after crude oil, a key raw material for paints, fell below $110 per barrel.
In Focus: Paint companies like Asian Paints, Berger Paints India, Kansai Nerolac, Indigo Paints, Shalimar Paints and FMCG companies like HUL, Pidilite.
Source: Bloomberg
Zomato Will Consider A Potential Acquisition Transaction On Friday
Zomato will consider the acquistion through issuance of equity shares by way of a preferential issue, on Friday in its board meeting
Source: Exchange filing
Trade Setup For Wednesday
In Focus: Food-Linked Stocks As Agricultural Commodities Fall
Food-linked stocks like ITC, Britannia Industries and Adani Wilmar may move after corn, wheat and soybean futures dropped in Chicago after trading resumed following a holiday on Monday.
Source: Bloomberg
Fertiliser Stocks In Focus As BofA Sees 'Multi-Year' Cycle
Fertilisers stocks in India may follow their global peers after BofA analysts' reiterated the 'multi-year cycle', based on a U.S. survey
Stocks To Watch: Mangalore Chemicals, National Fertilizers, Chambal Fertilisers, Rashtriya Chemicals, Gujarat State Fertilizers
Source: Bloomberg
Goldman Sachs Initiates Coverage On LIC With 'Neutral'
LIC: Goldman Sachs initiated coverage with 'neutral'; price target set at Rs 700, implied return of 4.97% from last price of Rs 665.20.
Source: Bloomberg
Net Institutional Flows At Rs 365 Crore On Tuesday
FII selling streak continue for 16th day.
Domestic institutional investors have remained buyers for 48 sessions in a row, since April 11.
Source: NSE
Stocks To Watch
Biocon: The company has denied allegations of bribery in drug approval process. That, after PTI reported, citing officials, that the CBI apprehended Joint Drugs Controller S Eswara Reddy for allegedly receiving Rs 4-lakh bribe.
Hero MotoCorp: The company has introduced Euro-V complaint Xpulse 200 4V motorcycle and Dash 110 and Dash 125 scooters in Turkey.
Jain Irrigation: Jain International Trading BV, a wholly owned subsidiary, has agreed to merge its business with Rivulis Pte.
SAIL: The company appointed Anil Kumar Tulsani as director (finance).
Coal India: Adani Enterprises and 10 other companies, including offshore firms, have expressed interest in bidding for coal import tenders floated by India's biggest miner.
Sensex, Nifty Set To Rise; Jain Irrigation, Coal India, Hero MotoCorp, SAIL In Focus
Equities were mixed in Asia on Wednesday amid warnings about the risk of an economic downturn.
Shares rose in Japan and Australia but fell in South Korea. The U.S. futures declined after the S&P 500 and Nasdaq 100 jumped over 2% on Tuesday.
As of 6:28 a.m., the Singapore-traded SGX Nifty—an early barometer of India's benchmark Nifty 50—was 0.49% higher at 15,698.50 points.
Elsewhere, the yen hovered near 24-year lows against the dollar, due to the dichotomy that is the monetary policy of Bank of Japan and the U.S. Federal Reserve. Crude oil retreated below $110 a barrel. Bitcoin hovered around $20,000.
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