Sensex, Nifty Snap Losing Streak Powered By Metal, Auto, Banking Stocks; FPIs Turned Net Buyers
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Closing Bell
India's stock benchmarks gained in a volatile session and snapped two-day losing streak, aided by gains in metal, auto, banking, consumer durables stocks.
The Sensex rose over 250 points to close at 59,031.30. The Nifty 50 gained 0.5% to 17,577.50. Today 40 of the Nifty 50 stocks rose, 10 fell. Mahindra & Mahindra, Eicher Motors, Bajaj Finserv, Titan, Tata Steel were among the top gainers.
The broader indices outperformed their larger peers with MidCap gaining 1% and SmallCap rising 0.8%. Barring Information Technology and Teck, all the other 17 sectoral measures advanced.
The market breadth is skewed in the favour of bulls. About 2,133 stocks rose, 1,264 fell and 153 remained unchanged
Foreign Investors Net Buyers
Overseas investors turned net buyers on Tuesday.
FPIs snapped out of the longest stretch of net inflows of 13 days on Thursday, last week.
As per data from the National Stock Exchange, foreign portfolio investors net bought equities worth Rs 563 crore today.
While, domestic institutional investors net sold equities worth Rs 215.2 crore today.
Institutions have net bought Rs 11,726.54 crore worth of equities so far in August and net sold equities worth Rs 36,713.15 as yet in 2022.
10-Year Bond Yield Rises
Yield on the 10-year bond rose 4bps to 7.31% during the session, before easing off those levels to 7.28%, at the close.
Source: Bloomberg
Rupee Closes At 79.86 Against The U.S. Dollar
Indian currency closed little changed at 79.86 against the greenback.
Rupee snapped a three-day losing streak on Tuesday. Earlier in the day, the RBI Governor Shaktikanta Das said that the central bank tended to prevent Rupee volatility in both directions, in an interview to ET NOW.
Source: Bloomberg
Lemon Tree Gains Most In Two Weeks
Shares of hotel and resort chain owner Lemon Tree Hotels rose over 3.3%, most in two weeks. Trading volume is 1.6 times the 30-day average.
The advance comes after the company announced a new hotel in Hubli, Karnataka. The property will be operational by May, 2023 and managed by Carnation Hotels Pvt, a subsidiary of Lemon Tree Hotels.
The property will feature 65 rooms, complemented by a restaurant, bar, spa, swimming pool, fitness center and meeting room.
Of the 12 analysts tracking the company, nine maintain 'buy', two suggest 'hold' and one recommends 'sell'. The return potential of the stock is 18.6%.
Source: Exchange filing, Bloomberg
European Markets Mixed
European markets mixed after flash PMI for Euro zone contracted for the second month. Euro slid below parity with the U.S. dollar to a two-decade low.
Source: Bloomberg
Midday Market Update: Sensex, Nifty Rise; Metal, Auto Stocks Advance
India's stock benchmarks advanced, aided by gains in metal, auto, consumer durables and energy stocks, in a volatile session so far.
The Sensex rose 0.4% to reclaim 59,000. The 30-stock gauge had lost 600 points to an intraday low of 58,172.48. The Nifty 50 gained 0.5% to 17,573.80. Today 37 of Nifty 50 stocks rose while 13 fell.
The broader indices outperformed larger peers with MidCap gauge gaining 0.75% and SmallCap measure jumping 0.6%. Fifteen of the 19 sectoral indices compiled by BSE Ltd. advanced with Metal index gaining 2%.
The market breadth is skewed in the favour of bulls. About 1,992 stocks rose, 1,322 fell and 159 remained unchanged.
Adani Group Stocks Volatile
Adani group shares were volatile on a Credit Sights report which expressed concerns about the group's borrowing.
Source: CreditSights, Bloomberg
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.
Indian Firms Likely To Remain Resilient Despite High Inflation Regime, Says S&P Global Ratings
Credit profiles of Indian companies could deteriorate up to 20% of corporate debt, warned S&P Global Ratings in its report "Inflation And Rate Hits Won't Knock Out India Inc. The ratings agency, however, added that the worsening of credit profile would not lead to large-scale defaults ue to buffers in economy as well as the balance sheets of the companies. The report comes after S&P Global Ratings' stress test of over 800 (mostly unrated) Indian companies.
Improved liquidity position as well as significant deleveraging are the reasons for the companies to resist the inflationary pressure and stay afloat, according to Neel Gopalakrishnan, credit analyst at S&P Global Ratings.
The agency added that the duration of high-rate regime would be critical with short-term rate shock less likely to cause damage while a durable rate shock could hurt debt dynamics.
S&P Global Ratings expected India's banking sector to remain resilient with the non performing loans and performing restructured loans likely to continue to decline to 4.5%-5% of gross loans by March 31, 2024.
Source: S&P Global Ratings Press Release
Godrej Agrovet Surges After Signing MoUs With Three States To Develop Palm Oil Cultivation
Shares of agribusiness firm Godrej Agrovet jumped over 5%, most in 15 weeks.
Trading volume is 15 times the 30-day average. Share price crossed above 200-day simple moving average, indicating potential upward price momentum.
The rise comes after the company signed three MoUs with Assam, Manipur and Tripura state governments for development and promotion of oil palm cultivation under National Mission on Edible Oils-Oil Palm scheme.
As part of the MoU, Godrej Agrovet will be allotted land across three state to promote and develop sustainable palm oil plantations.
Of the 10 analysts tracking the company, eight maintain 'buy', one suggests 'hold' and one recommends 'sell'. The return potential of the stock is 12.5%.
Source: Company press release, Bloomberg
Zomato Gains After Discontinuing 'Pro', 'Pro Plus' Programmes
Shares of Zomato Ltd. rose nearly 2% and on course to gain for second day in a row.
The advance comes after the food delivery firm discontinued its 'Pro and 'Pro Plus' programmes for its users, two years after introducing the plans.
In a tweet, Zomato said that its Pro Plus service is unavailable for renewal and that the company is working on a new experience.
Zomato Pro members got additional benefits over normal users and gained access to exclusive delivery offers. Most of the orders for Pro members were delivered faster than the normal orders, on an average.
The stock has underperformed the benchmarks, losing 55% compared to 1.6% for Sensex. Of the 23 analysts tracking the company, 19 maintain 'buy', two suggest 'hold' and two recommend 'sell'. The return potential of the stock is 31.3%.
Source: Bloomberg, Zomato Twitter
Unichem Laboratories Gains Most In Nearly A Week
Shares of Unichem Laboratories rose over 3.3%, most in nearly a week. Trading volume is more than the 30-day average.
The rise comes after the company received ANDA approval for its Carbamazepine tablets USP, 200 mg, from U.S. FDA to market generic version of Tegretol (Carbamazepine), 200 mg of Novartis Pharma.
The drug is used as anti-convulsant and in treatment of pain associated with trigeminal neuralgia. The product will be commercialised from Unichem's Goa plant, the company said in an exchange filing.
Source: Exchange filing, Bloomberg
Redington India Jumps Most In Three Weeks On Reports That Apple Planned To Make iPhones In India
Shares of Redington India jumped nearly 9.5%, most in nearly three weeks. Trading volume on the information technology products and mobile handsets distributer rose over seven times the 30-day average. The relative strength index of the stock is 72, suggesting it may be overbought.
All eight analysts tracking the company maintain 'buy'. The return potential of the stock is 26%.
The rise in Redington India's shares comes after Bloomberg reported that Apple will manufacture iPhone 14s in India. Redington is a reseller of Apple's products.
Apple intends to begin making iPhone 14 in India about two months after the product's release out of China, Bloomberg reported citing people familiar with the matter. The first iPhone 14s from India are likely to be finished in November, after the scheduled release in September.
Source: Bloomberg
Gensol Engineering Surges; Stock Jumps Over 1,000% In 2022
Shares of solar plants' constructor and renewable energy projects developer Gensol Engineering jumped over 4.6%.
Trading volume is nearly twice the 30-day average. The stock has jumped 1,283% in 2022 compared to 2.1% gains for the Sensex.
On August 17, JPMorgan said that the company which started off as a solar plant advisory and EPC firm, has now diversified into the EV leasing business, with the promoter group also investing in Gurugram-based electric transport start-up BluSmart Mobility.
The company had earlier announced plans to buy majority stake in a U.S.-based EV manufacturing start-up and aims to to start manufacture of three-wheeler EVs from October 2022.
Source: JPMorgan note (August 17), Bloomberg
Devyani International Falls Most In Over Three Months
Shares of Devyani International Ltd. fell nearly 6%, most in over three months since May 10.
Trading volume is more than 15 times the 30-day average.
Devyani International was the most traded stock by value, volume in today's session and is the worst performer on Nifty SmallCap 100, S&P BSE 500 and Nifty 500 indices.
About 28.1 million shares changed hands in trade. Details of buyers, sellers were not known immediately.
Of the 13 analysts tracking the company, 10 maintain 'buy', one suggest 'hold' and two recommend 'sell'. The return potential of the stock is 9.9%.
Source: Bloomberg
Infosys Falls Most In Four Weeks Amid Reports Of Scaling Back Variable Payout Of Employees To 70%
Shares of Infosys Ltd. fell over 2.5%, most in four weeks, to Rs 1,535.75 apiece. Trading volume is 1.5 times the 30-day average.
The decline comes after JPMorgan downgraded stock from 'overweight' to 'neutral', with target price unchanged at Rs 1,600 apiece, still an implied upside of 1.55%.
The company scaled back the average variable payout of employees to 70% for quarter-ended June amid contraction in margin and rising employee costs, reported PTI citing sources.
The decision comes after peer Wipro held back variable pay due to margin pressure. TCS also delayed quarterly variable compensation payout for some employees by a month, according to reports.
Infosys has not responded to PTI's report.
Of the 49 analysts tracking the company, 41 maintain 'buy', six suggest 'hold' and two recommend 'sell'. The return potential of the stock is 11.1%. The stock is the top laggard on the Nifty 50 index.
Source: PTI, Bloomberg
Opening Bell: Sensex, Nifty Open Lower; I.T. Stocks Decline
India's stock benchmarks opened lower, dragged by broad based losses across sectors led by information technology, amid decline in global markets.
The S&P BSE Sensex lost over 350 points (0.61%) to 58,413.90. The NSE Nifty 50 fell over 0.5% to 17,394.20. Today 15 of the Nifty 50 stocks rose, 35 fell. Infosys, Wipro, Tech Mahindra, HCL Technologies and TCS were the top laggards.
The broader indices outperformed their larger peers, with S&P BSE MidCap and SmallCap falling 0.2%. Barring Auto and Metal, all the other 17 sectoral indices compiled by BSE Ltd. declined with Information Technology gauge losing 2%.
The market breadth is skewed in the favour of bulls. About 1,302 stocks rose, 1,052 fell and 109 remained unchanged.
10-Year Bond Yield Rises
Yield on the 10-year bond rose 3bps to 7.30%, at the open.
Source: Bloomberg
Rupee Rises Against U.S. Dollar
Indian currency appreciated 5 paise (0.07%) to 79.81, at the open.
Source: Bloomberg
Trade Setup For Tuesday
Stocks To Watch
NTPC: The company’s first part capacity of 10 MW out of 20 MW Gandhar Solar PV Project at Gandhar, Gujarat, is declared on Commercial Operation from Aug. 23.
Infosys: The company scaled back the average variable payout of employees to about 70% for the June quarter amid margin squeeze and high employee costs, PTI reported.
IIFL Finance: The company’s subsidiary IIFL Home Finance approved allotment of 53.76 lakh shares, representing 20% stake, to Abu Dhabi Investment Fund for a consideration of Rs 2,200 crore.
Lemon Tree: The company has signed license agreement for a 65 room hotel at Hubli, Karnataka. The hotel is expected to be operational by May, 2023.
RBL Bank: The bank approved raising Rs 3,000 crore via debt securities on private placement basis.
Sensex, Nifty Set To Fall; NTPC, Infosys, IIFL Finance, Lemon Tree, RBL Bank In Focus
Stocks declined Asia on Tuesday amid worries about Federal Reserve monetary tightening and oil prices topping $91 a barrel after Saudi Arabia said OPEC+ may be forced to cut output.
MSCI Inc.’s Asia-Pacific equity index slipped to a near four-week low as Japan shed about 1% after S&P 500 and Nasdaq 100 futures stabilized. Hong Kong and China bourses were a little more resilient after China cut borrowing costs and plans special developer loans worth as much as 200 billion yuan ($29.3 billion) to ease a property crisis, moves that may aid sentiment.
At 8:40 a.m., the Singapore-traded SGX Nifty--an early barometer of India's benchmark Nifty 50--traded 0.39% lower at 17,421 points.