Sensex, Nifty Extend Gains In Volatile Session; FPIs Turned Net Sellers

India's stock benchmarks edged higher with Nifty extending its winning streak for eighth day, longest in 21 months, aided by gains in banking, capital goods, realty, telecom, power and utilities stocks. The Sensex and Nifty swung between gains and losses for the bulk of the session before closing near day's high.

The Sensex added 0.06% (38 points) to 60,298. The Nifty 50 also advanced by similar magnitude to 17,956.5. Today 24 of Nifty 50 stocks gained, 25 declined and one remained unchanged. Kotak Mahindra Bank (3.52%), Larsen & Toubro (2.09%) and Tata Consumer Products (1.81%) were among the top gainers

The broader indices outperformed their larger peers with MidCap and SmallCap gauges gaining over 0.35%. Twelve of the 19 sectoral indices compiled by BSE Ltd. advanced with Realty measure jumping 1.8%.

The market breadth is skewed in the favour of bulls. About 1,902 stocks rose, 1,495 fell and 143 remained unchanged.

FPIs snapped out of 13 days of net buying to turn net sellers today. The last 13 days of persistent net buying was the longest stretch of net inflows by FPIs in this year so far.

As per data from the National Stock Exchange, foreign portfolio investors net sold equities worth Rs 1,706 crore today; the first day of turning net sellers in August 2022.

On the other hand, domestic institutional investors net bought equities worth Rs 470.79 crore on Thursday.

Institutions have net bought Rs 14,910.3 crore worth of equities so far in August and net sold equities worth Rs 33,529.39 as yet in 2022.

• Yield on the 10-year bond rose 8bps to 7.27% during the session, before closing at 7.24%.

Source: Bloomberg

• Indian currency fell 26 paise (0.33%) to 79.71 during the session before closing at 79.68.

Source: Bloomberg

Shares of Bharti Airtel gained nearly 2% in intraday trade and are on course to gain for the second day. The stock has added 4.5% over the last two sessions.

• Morgan Stanley reiterated 'Overweight/In-line', while BNP Paribas, YES Research, Dolat Capital and New Street Research retained 'buy' over the last three sessions.

• The company added 7.93 lakh mobile subscribers in June, according to TRAI data. The company paid Rs 8312.4 crore towards spectrum dues and was provided the allocation letter for the designated frequency bands within hours. E-band allocation was given along with spectrum as promised, Sunil Bharti Mittal, Founder and Chairman, Bharti Enterprises said in a statement.

• Of the 33 analysts tracking the company, 30 maintain 'buy', two suggest 'hold' and one recommends 'sell'. The return potential of the stock is 18.5%

Source: Bharti Airtel Statement, Bloomberg

Tata Power Renewable Energy, a wholly owned subsidiary of Tata Power, has allotted 8.36 crore shares at Rs 239.2 apiece worth Rs 2,000 crore to BlackRock’s unit GreenForest New Energies Bidco.

• The allotment completes tranche 1 of the transaction. Tranche 2 infusion of Rs 2,000 crore will be concluded later.

• In April this year, BlackRock and Mubadala had announced they would invest Rs 4,000 crore in Tata Power Renewable.

Source: Exchange filing

Shares of Mumbai-based specialty and performance chemicals maker Indo Amines jumped 20%, the most in nearly 16 years since September 2006 to Rs 120.05 apiece, just over 1% shy of 52-week high of Rs 121.9 apiece.

• The sharp uptick comes after the company informed exchanges post market hours on Wednesday that it received environmental clearance for the expansion of Synthetic Organic Chemical for its manufacturing plants in Thane District in Maharashtra.

• Trading volume is more than 35 times the 30-day average. The relative strength index is 76, suggesting the stock may be overbought.

Source: Exchange filing, Bloomberg

Amid rising concerns of possible fall in spends in information technology sector due to the anticipated recession in the U.S., analysts at Macquarie and HSBC Global Research believe that Indian I.T. firms will have a limited impact.

They expect the spending in the sector to remain resilient and identified the rising focus on digital transformation, strong demand to drive structural margin improvement.

India's stock benchmarks rallied 17% since June 17 with I.T. index underperforming Nifty and Sensex, but still gaining 13% over the last two months.

Macquarie, in its note dated August 17, observed that technology spending based on a recession was not an option, echoing the comments of JPMorgan's CEO Jamie Dimon on July 14. Macquarie believed that tech spending will be more resilient during this probable recession. It also expected margin contraction to be temporary across India's Tier-I I.T. firms and saw attrition levels easing in H2FY2022-23.The brokerage also added that EBIT margin will recover to pre-Covid levels by H2FY2023-24E. Macquarie identified HCL Technology, TCS, Infosys, Wipro and Tech Mahindra as its preferred picks in the sector, in that order.

HSBC Global Research also believed that the overall macro outlook of U.S. has not deteriorated much for Indian IT firms to be wary, while conceding that pockets of weakess were visible.

HSBC said it was not 'exuberant' on the sector, but continued to prefer Infosys, HCL Tech and L&T Infotech.

The brokerage argued that the 2022 spending levels would not change much for the sector and expected the companies in the sector to meet FY23 growth estimates. However, it saw a possibility of slowdown in sectoral growth in FY24E. HSBC expected spending on optimisation of existing cloud landscape to increase compared to the focus on cloud migration and transformation deals over the past three years. HSBC estimated a CAGR of 3-9% for I.T sector for the next three to four years and expected the stocks to compound in-line with earnings.

Tata Motors will supply, operate and maintain 12-metre electric buses for a period of 12 years, as per the contract.

• Company has already received orders for 1,500 e-buses from Delhi Transport Corporation and 1,180 e-buses from West Bengal Transport Corporation, respectively, in the last 30 days.

• Orders for electric buses at Tata Motors now at over 3,600.

Source: Press release

India's stock benchmarks declined and are on course to snap the winning streak, dragged by losses in information technology, healthcare, energy, metal stocks, after U.S. markets declined following the release of minutes of FOMC meeting.

The Sensex lost 0.3% (nearly 200 points) to 60,077.03. The Nifty 50 also declined by similar magnitude to 17,898.30. Today 19 of the Nifty 50 stocks rose while 31 fell. Dr. Reddy's, UPL, BPCL, I.T. stocks were among the top losers.

The broader indices outperformed their larger peers with MidCap and SmallCap indices rising over 0.1%. Ten of the 19 sectoral indices compiled by BSE Ltd. advanced with telecom and realty stocks rising. On the flipside, energy, oil & gas, information technology and healthcare stocks declined.

The market breadth is skewed in the favour of bulls. About 1,782 stocks rose, 1,522 fell and 139 remained unchanged.

Rupee fell 26 paise (0.33%) to 79.71 against the U.S. dollar during the session. The depreciation comes amid strengthening of greenback and in anticipation of outflows from Blackstone's stake sale.

U.S. dollar index rose to 106.64 after FOMC minutes showed that Federal Reserve will likely continue to rate hikes as it aims to tackle surge in inflation.

Blackstone is seeking to raise Rs 3,180 crore through the sale of shares in Indian automotive parts maker Sona BLW Precision Forgings, as per the terms of deal seen by BQ Prime.

Meanwhile yield on the 10-year bond rose 8bps to 7.27% after falling 10bps on Wednesday, amid a slid in crude oil prices.

Source: Bloomberg

L&T Technology Services emerges outlier as Indian I.T. stocks fall tracking US peers. The NSE Nifty IT index is on course to snap a two-day winning streak on Wednesday.

Barring L&T Technology Services which gained 2%, all the other 10 constituents declined with Wipro, Infosys and Mindtree losing the most.

The decline in I.T. stocks follows a sharp fall in technology stocks in Wall Street with tech-heavy NASDAQ 100 index declining over 1% and decline in technology shares in Hong Kong. The fall in information technology stocks also comes amid sharp rally in markets over the last two months in which the benchmarks added 17%, aided by banking and FMCG stocks while the information technology pack underperformed.

The Nifty IT index gained over 1.1% on Wednesday, powered the benchmark Nifty to its longest winning streak in 20 months.

The fall in technology shares in the U.S. came amid dollar strengthening, weakness in Chinese economic outlook and the latest Fed minutes showing the need to balance inflation control while ensuring growth. The rise in bond yields and the prevailing uncertainty in the trajectory of Fed rate hike weighed on growth stocks including Technology.

Source: Bloomberg

Shares of Craftsman Automation surged over 5.3%, most in over three weeks. Trading volume on the automobile parts maker is nearly twice the 30-day average.

• The company commenced commercial operations of its new plant at Pune, Maharashtra, according to an exchange filing post market hours on Wednesday.

• The company approved a proposal to set up additional plants at Faridabad, Pune and Sriperumbudur on May 9, when it announced the earnings for quarter-ended March. The existing capacity in Pune is 11.5 lakh units for Automotive-Powertrain segment. About 2% of capacity will be added to the Pune plant as an investment of Rs 5 crore.

• The stock has outperformed benchmarks rising 23% in 2022 so far compared to 4.4% gains for Sensex. Of the seven analysts tracking the company, six maintain 'buy' and one suggests 'sell'. The return potential of the stock is 15.4%.

Source: Bloomberg, Exchange filings

Shares of Natco Pharma jumped nearly 3%, the most in this week so far. Trading volume is thrice the 30-day average. A dividend of Rs 3.5 is payable on August 30 and the stock will trade ex-dividend on Friday.

• The rise comes after the company announced that U.S. FDA granted tentative approval to its Abbreviated New Drug Application (ANDA) for Trabectedin for injection (generic for Yondelis*) for 1 mg/vial presentation.

• The drug is used in chemotherapy medication for treatment of advanced soft-tissue sarcoma and ovarian cancer.

• According to industry sales data, Yondelis generated annual sales of $49.7 million for twelve months ending June 2022 in the U.S. market.

• Of the 15 analysts tracking the company, six maintain 'buy', seven recommend 'hold' and two suggest 'hold'. The return potential on the stock is 14.9%.

Source: Exchange filing, Bloomberg

India's stock benchmarks opened lower, dragged by information technology, healthcare stocks after a decline in technology names in the Wall Street and amid slid in crude oil prices.

The S&P BSE Sensex fell 0.21% (over 125 points) to 60,133.30. The NSE Nifty 50 declined by similar magnitude to 17,911.85. Today 27 of Nifty 50 stocks rose, 23 fell. Dr. Reddy's, Sun Pharma, Wipro, Cipla and Infosys were the top laggards.

The broader indices outperformed their larger peers with MidCap and SmallCap indices rising over 0.2%. Eleven of the 19 sectoral indices compiled by BSE Ltd. declined with Information Technology and Healthcare gauges losing over 0.5%.

Tourism and hospitality stocks are in focus today after union cabinet approved enhancement in limit of Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore.

The limit of ECLGS is hiked from Rs 4.5 lakh crore to Rs 5 lakh crore. The addition amount has been earmarked exclusively for firms in hospitality and related sectors.

• In Focus: Indian Hotels, HLV Ltd., Lemon Tree, Chalet

• Also in focus: Mahindra Holidays, Thomas Cook India.

Source: PIB, Bloomberg

• Yield on the 10-year bond rose 2bps to 7.21% at the open.

Source: Bloomberg

• Indian currency depreciated 16 paise (0.20%) to 79.61 at the open.

Source: Bloomberg

• City Union Bank

• Suven Pharma

Source: Bloomberg

• Sona BLW Precision Forgings: Blackstone to sell 10.87% stake in Sona BLW Precision Forgings in block trade. Upsize option of 1.58 crore shares representing 2.72% stake. Floor price set at Rs 500 apiece, a 7.3% discount on Wednesday’s closing price. The total deal would fetch Blackstone Rs 3,971.7 crore (calculated at floor price).

• ONGC: The company has signed Heads of Agreement with ExxonMobil for deep water exploration in Krishna Godavari and Cauvery Basins in the eastern offshore and the Kutch-Mumbai region in the western offshore.

• Natco Pharma: The company received tentative approval from the U.S. FDA for Trabectedin for Injection (generic for Yondelis) for the 1mg/vial presentation.

• Reliance Industries: Jio adds net 4.22 million mobile subscribers in June: TRAI

• Bharti Airtel: Adds net 7,93,132 mobile subscribers in June: TRAI

• Vodafone Idea: Loses net 1.8 million mobile subscribers in June: TRAI

• GAIL India: Approves raising up to Rs 25,000 crore through rupee borrowing and up to $313 crore in foreign currency.

• Kilburn Engineering: RBL Bank sold 2.2 million shares of KEL in two blocks: BSE