Sensex, Nifty Fall In Volatile Session Dragged By I.T., Banking Stocks
India's stock benchmarks erased over 1% gains to decline in a volatile session
KEY HIGHLIGHTS
Remainder Of 2022 To Not Be Significantly Better For Investors: Mahesh Nandurkar
India Services PMI Highest In Over 11 Years In June
RIL Gains As Nomura Upgrades Stock To 'Buy'; Energy-Linked Stocks Recover
LIC Gains As Motilal Oswal Initiates Coverage With 'Buy'
India’s June Vehicle Retail Increases 27% YoY
Closing Bell
India's stock benchmarks erased over 1% gains to decline in a volatile session, as losses in information technology, banking and auto stocks offset gains in power stocks.
The S&P BSE Sensex fell 0.19% to 53,134.35. The 30-stock gauge rose over 600 points to an intraday high of 53,865.93 before reversing the gains. The Nifty 50 also declined by similar magnitude to close at 15,810.85. The 50-stock gauge reclaimed 16,000 in intraday trade after three weeks. Today 22 stocks rose, 28 of Nifty 50 stocks fell.
The MidCap index underperformed losing 0.35% while the SmallCap measure outperformed Sensex and Nifty, rising 0.2%. Twelve of the 19 sectoral indices compiled by BSE Ltd. declined with Information Technology index losing nearly 0.6%. On the flipside, power index rose over 0.6%.
The market breadth is skewed in the favour of bulls. About 1,722 stocks rose, 1,563 fell and 158 remained unchanged.
10-Year Bond Yield Rises
Yield on the 10-year bond rose 5bps to 7.42% during the session.
The 10-year bond yield trimmed gains to close at 7.39%, thereby snapping a four-day losing streak.
Source: Bloomberg
Rupee Slides To Record Low After Sharp Decline Towards End Of The Session
Indian currency fell 0.52% (41 paise) to a record low 79.36 against the U.S. dollar.
This is the steepest intraday decline for Rupee in a week since June 28. The Rupee lost nearly 20 paise in the final half hour of Tuesday's session.
Source: Bloomberg
Tata Steel Q1 Crude Steel Production Rises 6% YoY
Tata Steel India crude steel production rose 6% YoY to 4.92 million tonnes in Q1FY2022-23.
Deliveries fell 2% YoY to 4.06 million tonnes, due to moderation in exports due to imposition of 15% export duty.
Automotive and special products deliveries rose 22% YoY on broad-based recovery across all sub-segments.
Tata Steel Europe production at 2.432 million tonnes Vs 2.67 million tonnes QoQ (2.31 million tonnes YoY)
Source: Bloomberg
Rupee Slides To Fresh Record Low
Indian currency depreciated 0.27% (22 paise) to 79.17 against the U.S. dollar, a fresh record low
Source: Bloomberg
Euro Sinks Against U.S. Dollar
Sensex, Nifty Trim Losses; Auto, I.T. Stocks Fall
Metal Stocks Advance
European Markets Open Lower
European markets open lower ahead of June PMI data from Euro zone and industrial production data from France.
Source: Bloomberg
SpiceJet Falls Most In Nearly Two Weeks
Shares of SpiceJet fell over 2.8%, the steepest fall in nearly two weeks.
Asian News International reported that SpiceJet SG-11 flight from Delhi to Dubai made a landing in Karachi after developing a technical glitch. The company's spokesperson confirmed to ANI that all the passengers on board are safe and that safe landing in Karachi was required due to indicator light malfunctioning.
A replacement aircraft is being sent to Karachi that will take passengers to Dubai. ANI quoted aviation regulator DGCA saying that the crew observed unusual fuel quantity reduction from left tank.
Of the 10 analysts tracking the company, two maintain 'buy', five suggest 'hold' and three recommend 'sell'. The return potential of the stock is 48.4%
Source: ANI, Bloomberg
10-Year Bond Yield Rises
Yield on the 10-year bond rose 5bps to 7.42% during the session. The 10-year bond yield is on track to snap four-day losing streak.
Source: Bloomberg
Angel One On Course To Extend Winning Streak For Fourth Day
Shares of Angel One Ltd. rose over 3.2%. The stock is on a four-day winning streak in which it has gained 6%. The uptick comes after the company shared its business update for the month of June before market hours on Monday.
Client base grew 3.1% MoM (96.9% YoY) to 10.41 million.
Average client funding book at Rs 1,631 crore in June, down 13.4% MoM and up 19.8% YoY.
Overall average daily turnover at Rs 9,76,500 crore, up 9.2% MoM and 118.5% YoY.
Overall retail turnover market share at 21.2% Vs 19.9% MoM and 21.9% YoY.
Of the five analysts tracking the company, four maintain 'buy' and one suggests 'hold'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 70.6%.
Source: Exchange filing, Bloomberg
Rupee Falls To Near-Record Low
Indian currency fell 0.18% (14 paise) to 79.09 against the U.S. dollar, during the session.
Source: Bloomberg
Remainder Of 2022 To Not Be Significantly Better For Investors: Mahesh Nandurkar
Garware Technical Jumps Most In Three Weeks
Shares of textiles firm Garware Technical rose over 4.2%, most in nearly three weeks.
The rise comes after ICICI Direct initiated coverage of the stock with 'buy' and a target price at Rs 3,695 (an implied return of 21%), on Monday.
ICICI Direct identified the focus to improve profitability, balance sheet strength, rising share of value added products and expansion of aquaculture cage businesses as key growth drivers for the stock. The brokerage estimated the company to clock revenue, PAT CAGR of 12%, 20%, respectively, in FY2022-24E.
Trading volume is thrice the 30-day average. Share price crossed above 200-day moving average, indicating potential upward price momentum.
Source: ICICI Direct note, Bloomberg
Mid-Day Market Update: Sensex, Nifty Add Over 1%; Reliance Industries Leads Advance
India's stock benchmarks jumped over 1%, aided by gains in metal, information technology, banking, energy and power stocks, amid uptick in global equities and rise in crude oil prices.
The Sensex added over 600 points (1.15%) to 53,847.08. The Nifty 50 also advanced by similar magnitude to reclaim 16,000 for the first time in over three weeks.
The MidCap index underperformed its larger peers, rising 0.8% while the SmallCap measure outperformed Sensex and Nifty, gaining 1.3%. All 19 sectoral indices compiled by BSE Ltd advanced with Metal index surging over 2.6%.
The market breadth is skewed in the favour of bulls. About 2,264 stocks rose, 914 fell and 139 remained unchanged.
BLS International Climbs Most In Three Weeks
Shares of BLS International, the New Delhi-headquartered firm specialising in outsourcing of visa, passport, attestation and biometrics climbed over 6%, the most in three weeks.
The rise comes after the company announced that it has been authorised by Royal Thai Embassy to provide visa services in Kenya.
BLS International announced to exchange during market hours Tuesday that it started accepting visa applications on behalf of the Royal Thai Embassy from July 1.
Trading volume is twice the 30-day average.
Source: Exchange filing, Bloomberg
Ujjivan SFB Jumps Most In Seven Weeks
Shares of Ujjivan Small Finance Bank rose nearly 8%, the most in over seven weeks, after the company shared its Q1 business update with exchanges, during market hours on Tuesday.
Advances grew 38.3%/6.9% YoY/QoQ to Rs 19,409 crore.
GNPA fell 5.9% compared to 7.1% in March 2022.
Collection efficiency rose to 99% in May and June.
CASA Ratio at 28% Vs 27.3% QoQ
Total deposits up 34.8%/0.8% YoY/QoQ to Rs 18,433 crore
Trading volume is more than thrice the 30-day average. Of the 16 analysts tracking the company, 11 maintain 'buy', two suggest 'hold' and three recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 34.5%.
Source: Exchange filing, Bloomberg
Krsnaa Diagnostics Jumps Most In Four Weeks
Shares of Krsnaa Diagnostics jumped over 4.5%, the most in four weeks after Indira Gandhi Hospital in Delhi awarded a tender for establishment, operation and management of radiology unit on Public-Private Partnership basis.
The company will set up one MRI 3T machine and CT Scan Machine at the hospital, as part of the contract.
The size of the contract has not be disclosed yet. The tenure of the contract will be upto 12 years from date of installation.
Trading volume is similar to 30-day average.
Source: Exchange filing, Bloomberg
Sensex Gains 1%; 43 Of Nifty 50 Stocks Advance
India Services PMI Highest In Over 11 Years In June
Services PMI in June at 59.2 in June vs 58.9 in May.
Survey reflected improvement in demand, capacity expansion and a favourable economic environment.
Source: IHS Markit
Tata Power Extends Gains For Third Day
Shares of Tata Power extended gains for the third day, rising nearly 2.7% in intraday trade. Over the last three sessions, the stock has added almost 7%.
Tata Power signed MoU with Tamil Nadu government to set up a greenfield 4 Gigawatt solar cell and 4 Gigawatt solar module manufacturing plant, for an investment of Rs 3,000 crore, on Monday.
The investment in the plant will be made over 16 months.
The manufacturing facility to be built in Tirunelveli, will be the second manufacturing unit of Tata Power after Bengaluru plant.
The Tamil Nadu plant will produce high wattage modules and utilise smart manufacturing tools.
Of the 24 analysts tracking the company, 10 maintain 'buy', four suggest 'hold' and 10 recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 7.7%.
Source: Exchange filing, Bloomberg
HDFC, HDFC Bank Extend Gains After Receiving No-Objection Letter From RBI
Shares of HDFC and HDFC Bank extend their winning streak after the firms received no objection letter from RBI for the proposed scheme of merger of the two companies.
In an exchange filing post market hours on Monday, HDFC Bank said that RBI accorded 'no objection' to the scheme in a letter dated July 4.
The proposed merger scheme remains subject to approvals from CCI, NCLT and shareholders and creditors of the two companies.
Source: Exchange filing, Bloomberg
RIL Gains As Nomura Upgrades Stock To 'Buy'; Energy-Linked Stocks Recover
Shares of Reliance Industries advanced amid rise in energy-related shares across the region.
Nomura upgraded its recommendation of RIL from 'neutral' to 'buy', saying that the correction in the stock is 'likely overdone' and has presented a 'buying opportunity'. The price target has been reduced top Rs 2,800 from Rs 2,850, still an implied return of 16%.
The rise in energy-linked stocks comes after oil held gains, with Nymex crude climbing above $110 per barrel.
Shares of ONGC, Hindustan Oil recovered after sliding to losses on Monday while Oil India extended decline, losing over 3%.
Source: Bloomberg
MMTC Surges Most In Nearly A Week
Shares of MMTC rose over 8%, the most in nearly a week. The uptick comes after MMTC transferred 49.78% stake of Neelachal Ispat Nigam to Tata Steel Long Products, the company said in an exchange filing post market hours on Monday.
Tata Steel Long Products was the successful bidder selected through two-stage auction procedure involving competitive bidding process done under the supervision of DIPAM.
Trading volume is more than six times the 30-day average. Share price rose above 50-day simple moving average, indicating potential upward price momentum.
Source: Exchange filing, Bloomberg
Marksans Pharma Surges Most In Over 13 Weeks
Shares of Mumbai-headquartered specialty chemicals and active ingredients maker Marksans Pharma surged 15%, the most in over 13 weeks.
This comes after the company informed exchanges post market hours on Monday that it will consider proposal for buyback of equity shares on July 8 (Friday).
Trading volume is more than 47 times the 30-day average.
Source: Exchange filing, Bloomberg
LIC Gains As Motilal Oswal Initiates Coverage With 'Buy'
Shares of Life Insurance Corp of India are on course to extend gains for the third day, equaling the longest winning streak since debut.
The stock jumped over 2% in intraday trade after Motilal Oswal initiated coverage of with 'buy' recommendation. The target price is fixed at Rs 830, an implied upside of 20%.
Motilal Oswal believes that all the business drivers are in place for LIC and cited the company's leadership in life insurance industry, brand value, distribution network and superior customer-connect as reasons for the 'buy' recommendation.
The brokerage estimates LIC to deliver 10% CAGR in New Business Premium during FY22-24E and Value of New Business to improve to 13.6%, on improving product mix and rising profitability.
Of the five analysts tracking the company, two suggest 'buy' and three recommend 'hold'. Macquarie has the highest target price for LIC while Motilal Oswal has the lost target price of Rs 830. The return potential of the stock is 24.1%.
Source: Motilal Oswal note, Bloomberg
Opening Bell: Sensex, Nifty Rise; Metals, Auto Stocks Advance
India's stock benchmarks rose, aided by broad based across sectors led by power, metal, information technology, auto and banking stocks.
The S&P BSE Sensex rose over 300 points (0.6%) to 53,549. The NSE Nifty 50 also advanced by similar magnitude to 15,929. About 45 of Nifty 50 stocks rose while five fell.
The S&P BSE MidCap underperformed its larger peers, rising 0.4% while the S&P BSE SmallCap almost mirrored Sensex and Nifty. All the 19 sectoral indices compiled by BSE Ltd. rose, Metal, Power and Utilities measures rising over 1%.
The market breadth is skewed in the favour of bulls. About 1,710 stocks advanced, 523 fell and 83 remained unchanged.
India’s June Vehicle Retail Increases 27% YoY
2-Wheeler sales up 20.2% to 11.19 lakh units year-on-year.
3-Wheeler sales up 212% to 46,040 units year-on-year.
Passenger vehicle sales rose 40.1% to 2,60,683 units year-on-year.
Total vehicle sales up 27% to 15,50,855 units.
High fuel prices having a negative effect on entry level PV buyers, says FADA.
In the past few months, prices of almost all essential items have moved northwards, thereby putting pressure on the common man’s household budget and thus reducing the disposable income, according to FADA.
"Additionally, the high fuel prices have had a spillover effect on transportation and made it expensive. This will have a negative effect on entry level PV as well as the 2W segment which are generally dominated by first time buyers".
"On the other hand, ease in availability of semiconductors will see increased supply especially in the PV segment and thus reduce waiting period".
"If rural India stabilises, Auto retail will enter the festive season on a good note".
Source: FADA
10-Year Bond Yield Rises 5bps
Yield on the 10-year bond rose 5bps to 7.42%. The 10-year bond yield fell in each of the last four sessions.
Source: Bloomberg
Rupee Falls To Near-Record Low
The Indian currency fell 0.13% (11 paise) to 79.06 against the U.S. dollar, just six paise off the record low 79.12.
Rupee slid to record low on July 1.
Source: Bloomberg
Government Seeks Details On Foxconn-Vedanta Chip JV, Reports Economic Times
Ministry for electronics and information technology (MeitY) wants Vedanta, Foxconn to provide more details on their plan to acquire expertise or get a third partner with demonstrated technical capability, reported The Economic Times citing sources aware of the developments.
Government is unsure if Vedanta-Foxconn JV has the appropriate technical knowhow for semiconductor manufacturing and fabrication.
Source: The Economic Times
In Focus: Energy Stocks As Oil Gains On Supply, Demand Cuts
Stocks To Watch: RIL, ONGC, Oil India
Source: Bloomberg
Trade Setup For Tuesday
Net Institutional Flows Remain Negative For Second Day
Analyst Actions
Morgan Stanley on M&M Financial
Overweight, with a target price of Rs 225.
MoM growth in disbursements was strong and better than estimates.
Collection efficiency in June was higher than in May and April.
Collection efficiency was highest for Q1 (seasonal) in recent history.
Stage 3 loans were only marginally higher QoQ, per MMFS (historically close to 30% QoQ).
Motilal Oswal on LIC
Initiate with 'buy', target price at Rs 830.
Business drivers in place; execution remains the key.
Estimate LIC to deliver 10% CAGR in new business profit during FY22-24E while value of new business margin is likely to improve to 13.6% on improving product mix & higher profit retention.
Estimate LIC’s operating return on embedded value to remain modest at 9.7% on lower margin profile than private peers.
Valuation at 0.7x FY24E EV appears reasonable.
High sensitivity to equity market volatility remains an overhang
Stocks To Watch
Tata Consultancy Services: A U.S. court reduced the punitive damages to $ 140 million in a trade secrets case with American software firm Epic Systems Corp. The company said that it has been advised that the order is appealable in the higher court.
Marico: The company increased its stake in Apcos Naturals by 4.14% to 56.52% for undisclosed consideration.
Cipla: The United States Food and Drug Administration conducted a pre-approval inspection at the company's Indore plant from June 27 to July 1. It has received two observations on FDA Form 483 with respect to ANDA filed for the product to be manufactured at the said plant. There is no data integrity observation. The company said that it will submit its response to the U.S. FDA within the stipulated time.
Vedanta: The company reported 3% yoy increase in production of Aluminum in Q1 to 5.65 lakh tons. It also increased mining of domestic Zinc’s by 14% yoy to 2.52 lakh tons in the first quarter. Oil and Gas gross production reduced 10% yoy to 1.35 crore barrels of oil equivalent.
Kotak Mahindra Bank: The Reserve Bank of India imposed a penalty of Rs 1.05 crore due to inability of bank to credit amount involved in unauthorised electronic transactions within 10 working days. The Bank did not maintain/apply required margin on advances to stockbrokers. It failed to credit required amount to depositor education fund.
IndusInd Bank: The Reserve Bank of India imposed a penalty of Rs 1 crore for non-compliance with customer due diligence procedures in accounts opened via E-KYC.
Kirloskar Ferrous: The company has upgraded Mini Blast Furnace II at Koppal plant, Karnataka leading to increase in production capacity of pig iron 1.8 lakh metric ton p.a. to 2.176 lakh metric ton p.a. Consequently, total manufacturing capacity of pig iron at company level has increased to 6.09 lakh metric ton p.a.
Tata Steel: Tata Steel, through its subsidiary Tata Steel Long Products has completed the acquisition of Neelachal Ispat Nigam.
Tata Power: Company to invest Rs 3,000 crore to set up Tamil Nadu solar plant.
Tech Mahindra: Company opens new campus in Coimbatore, aims to hire 1,000 in FY23 to grow India operations.
LIC: The company approved investment of Rs 127.07 crore in LIC (Nepal) via rights issue.
Emami: The company has increased its stake in its subsidiary company Brillaire Science from 72.02% to 77.53%.
PTC India Financial Services: The company received a satisfactory report by the Agency for Specialized Monitoring appointed by the lenders.
Marksans Pharma: The company will consider buyback of shares on July 8.
JTL Infra: The company’s sales volume rose 3.9% yoy to 3,3302 MT in first quarter.
Sensex, Nifty Set To Rise; IndusInd, Kotak Mahindra Bank, TCS, Tata Power, Emami In Focus
Asian stocks opened with gains Tuesday as investors evaluate the possible scrapping of some US tariffs on Chinese consumer goods.
The Nikkei, Topix, Kospi rose while S&P ASX 200 advanced. Japan and China are set to release PMI reading as well. U.S. markets were closed overnight for a holiday.
At 8:00 am, the Singapore-traded SGX Nifty -- an early barometer of India's benchmark Nifty 50 -- rose 0.26% to 15,864.50.
Crude climbed toward $111 a barrel. Bitcoin retook the $20,000 level.