Sensex, Nifty Snap Two-Week Losing Run Aided By Auto, Banking, I.T., Fmcg Stocks
India's stock benchmarks snapped a two-week losing streak and logged best week in over a month since the week ended May 20
Closing Bell
India's stock benchmarks snapped a two-week losing streak and logged best week in over a month since the week ended May 20, aided by auto, information technology, banking, fmcg stocks.
Nifty Auto index jumped nearly 7%, the best week for the gauge in at least over a year. Auto index was followed by FMCG and I.T. indices which rose 4%. Nifty Metal was the only sectoral losing, shedding over 2.7% for the week.
For the week, the Sensex rose in four out of the five sessions, with the 30-stock gauge declining 1.4% on Wednesday.
On Friday, Sensex rose over 450 points (nearly 0.9%) to 52,727.98. The 30-stock measure trimmed gains after climbing nearly 650 points to an intraday high of 52,909.87. The Nifty also advanced by similar magnitude to 15,699.25.
The broader indices outperformed their larger peers, with both the smallcap and midcap gauges jumping over 1.5%. Barring Information Technology and Teck, all the other 17 sectoral indices compiled by BSE gained, with Telecom index adding 2.5%.
The market breadth is skewed in the favour of bulls. About 2,403 stocks rose, 905 fell and 140 remained unchanged.
10-Year Bond Yield Rises
Yield on the 10-year bond rose for the second day. 10-year bond yield rose 5bps to 7.47% during the session before easing off to 7.44% at the close.
The spike in yield came after RBI's deputy governor Michael Patra warned of inflation above RBI's target band for three consecutive quarters.
Source: Bloomberg
Rupee Extends Losses For The Eighth Week In A Row
Indian currency rose 0.15% (12 paise) to 78.20 during the session before erasing gains to close at 78.34 on Friday
The Rupee fell to a record low 78.39 on Wednesday.
Rupee fell 0.34% (27 paise) for the week.
Rupee has logged weekly losses for nearly two months, since the week-ended April 29, 2022.
Source: Bloomberg
Dr. Reddy's Enters Into Settlement Agreement With Respect To Buprenorphine & Naloxone Film
Dr. Reddy's enters into settlement agreement with Indivior Inc, Indivior UK and Aquestive Therapeutics.
Dr. Reddy's will receive payments totaling $72 million by March 31, 2024.
The agreement resolves all claims between the parties related to Dr. Reddy's generic buprenorphine and naloxone sublingual film. As part of the settlement, the underlying litigation will be dismissed.
Source: Exchange filing
Canara Bank Gains Upon Approving Rs 9,000 Crore Capital Raising Plan For FY2022-23
Shares of Canara Bank rose over 2.6%, the most in three days. The bank approved the capital raising plan for FY2022-23 amounting up to Rs 9,000 crore by way of debt instruments (additional Tier I/Tier II bonds).
Out of the capital raising plan, the lender approved to raise capital of Rs 5,500 through Basel III compliant AT I bonds and Rs 3,500 crore through BASEL III Compliant AT II bonds during FY2022-23.
Out of the 14 analysts tracking the company, 13 maintain 'buy' and one suggests 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 44.9%.
Source: Exchange filing, Bloomberg
Nitin Gadkari Approves India’s New Car Assessment Program Based On Crash Tests
Transport Minister Nitin Gadkari has approved the draft GSR notification to introduce Bharat NCAP.
Automobiles in India will now be accorded star ratings based upon their performance in crash tests.
Gadkari said Bharat NCAP will be aligned with global crash test protocols factoring in existing Indian regulations, allowing OEMs to get vehicles tested at India’s in-house testing facilities.
Source: PIB
Dwarikesh Sugar Jumps On Commissioning Of 175 KL Per Day Distillery In Uttar Pradesh
Shares of Dwarikesh Sugr Industries rose over 9.5%, most in nearly six weeks.
The uptick comes as the company announced the commissioning of 175 kilo litres per day distillery at its Faridpur unit in Bareilly district, in an exchange filing on Friday.
The plant will use cane juice syrup and 'B' heavy molasses as feedstock to produce ethanol.
The company's total distillery capacity now standards at 337.5 kilo litres per day. While ethanol production gets doubled, sugar production will be moderated, the company said.
All four analysts tracking the company maintain 'buy'. The return potential of the stock is 39.6%.
Source: Exchange filing, Bloomberg
Tata Chemicals Europe Opens Industrial-Scale Carbon Capture & Usage Plant In The U.K.
The plant will repurpose 40,000 tonnes of CO2 emissions annually from its power generation plant and use it to produce baking soda.
Tata Chemicals Europe has invested £20 million towards the facility.
The company will export baking soda to 60 countries under the brand name Ecokarb.
Source: Company Release
Malpani Group Completes Acquisition Of Imagicaaworld Entertainment
Maharashtra-based Malpani Group has bought a 66.25% stake in Imagicaa for Rs 415 crore.
The lenders have completed a debt resolution for Rs 575 crore, which includes assignment of their debt to Aditya Birla ARC for Rs. 500 crore.
Lenders have been allotted equity shares worth Rs 75 crore resulting in a collective shareholding of 11.97% in the company.
Shares of theme park operator Imagicaaworld Entertainment jumped nearly 11%, the most in 18 weeks.
Trading volume is nearly six times the 30-day average. Share price crossed above 50-day simple moving average, indicating potential upward price momentum
Source: Exchange filing, Bloomberg
Shakti Pumps Surges Most In 11 Weeks
Shares of water pumps and electric motors maker Shakti Pumps rose nearly 8% following a 4.7% rise on Thursday.
Trading volume is 7.5 times the 30-daya verage. Share price crossed above 100-day moving average, indicating potential upward price momentum.
In an interview to ET NOW on Thursday, Managing Director of Shakti Pumps, Dinesh Patidar said that the dealy in the monsoon will increase the demand for solar pumps.
The company's MD also added that strong demand is being seen in central and northern India.
Source: ET NOW, Bloomberg
ONGC Jumps Most In Over Two Weeks
Shares of ONGC jumped over 4.5%, most in over two weeks since June 7.
The company's overseas arm ONGC Videsh made an oil discovery in the recently drilled well in Llanos Basin, Colombia, the company said in an exchange filing post market hours on Thursday.
During initial testing, the company found oil (16 API) flowing at $660 barrel per day. API implies American Petroleum Institute gravity, a measure to denote density of crude oil.
Of the 29 analysts tracking the company, 24 maintain 'buy', two suggest 'hold' and three recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 57.5%.
Source: Exchange filing, Bloomberg
M&M Hits Record High
Shares of Mahindra & Mahindra jumped nearly 4% to a record Rs 1,066.75 in intraday trade.
Trading volume is nearly twice the 30-day average. Of the 46 analysts tracking the company, 43 maintain 'buy', one suggests 'hold' and two recommend 'sell'.
The stock is among the top gainers in Nifty Auto index today. It is also the second best stock in Nifty Auto in 2022 so far, gaining 26.43% compared to 5% gains for the Auto index.
Source: Bloomberg
European Markets Advance
European markets gain amid rise in global equities.
Technology and utility stocks advance
UK retail sales for May fell 0.5% MoM while consumer confidence declined to the lowest on record.
Source: Bloomberg
ICICI Bank Gains As Jefferies Cites Best Risk-Reward Ratio Among Global Peers
Shares of ICICI Bank rose over 2.1% and is among the top gainers in the Nifty Bank index.
The uptick comes after Jefferies reiterated 'buy' and kept target price unchanged at Rs 1,070 (implied return: 50.6%) on Friday.
Jefferies believes that the lender has among the best risk-reward ratio across global peers.
Jefferies expects ICICI Bank to gain from rise in bank credit growth and the ramp-up of SME vertical.
All 49 analysts tracking the company maintain 'buy'. The return potential of the stock is 36.1%.
Source: Jefferies note, Bloomberg
Strides Pharma Climbs Most In A Year On Positive Results For Covid-19 Vaccine Trials
Shares of Strides Pharma Science jumped nearly 9%, the most in at least a year. This follows 5.35% rise on Thursday.
The company's subsidiary Biolexis and Akston Biosciences announced results from Phase II/III clinical trials in India for Covid-19 vaccine, on Friday.
About 1,600 healthy volunteers participated in these trials with 100 in an open-label bridging study and 1,500 in Phase II/III, placebo-controlled trial.
The vaccine was well tolerated, with no reported safety issues and is shelf-stable for over six months at room temperature. The interim analysts shows 91% seroconversion rate at Day 56. Seroconversion rate is the extent to which antibodies in blood serum are development due to vaccination, and is a measure of efficacy of a vaccine.
Trading volume is more than quadruple the 30-day average. Share price crossed above 50-day simple moving average, suggesting potential upward price momentum. All five analysts tracking the company maintain 'buy'. The return potential of the stock is 26.3%.
Source: Exchange filing, Bloomberg
Mid-Day Market Update: Sensex, Nifty Trim Gains; HDFC Bank Leads Advance
India's stock benchmarks eased off days' high, but still traded with gains, aided by telecom, fmcg, auto, metal and banking stocks.
The Sensex rose 0.5% to 52,520.94. The 30-stock gauge trimmed gains after rising over 640 points to an intraday high of 52,909.87. The Nifty also advanced by similar magnitude to 15,635.80. Today 37 stocks rose, while 12 fell and one remained unchanged.
The broader indices outperformed their larger peers with MidCap and SmallCap gauges gaining 1%. Barring Information Technology and Teck indices, all the other 17 sectoral indices compiled by BSE advanced with Telecom index rising over 2%.
The market breadth is skewed in the favour of bulls. About 2,256 stocks rose, 901 fell and 141 remained unchanged.
Rupee Erases Gains
Indian currency rose 12 paise (0.15%) to 78.20 during the session.
The Rupee erased the gains to 78.33 against the dollar. Rupee fell to a record low 78.39 on Wednesday
Source: Bloomberg
Key Highlights From RBI's Deputy Governor Michael Patra's Address
Emerging markets bearing the brunt of the Russia-Ukraine war despite being bystanders, says RBI deputy governor Michael Patra.
Heightened volatility in financial markets, higher commodity prices have raised risks for all economies.
Soaring crude prices, tightening financial conditions key risks for India.
External sector well buffered with reasonably high forex reserves.
India's current account deficit not as uncomfortable as some in markets are suggesting.
In the forex market, people are betting that India's current account deficit will go haywire.
However, current account deficit declined in the fourth quarter of FY22 to 1.5% of GDP.
Foreign exchange earnings are strong enough to mitigate the impact of higher imports.
RBI is now 'ahead of the curve'.
Monetary policy has been tightening by 130 basis points cumulatively.
This is reflected in the overnight call money market rate which is the operating target of monetary policy
RBI trying to stabilise the price situation when the economy is able to bear it.
Indian economy is recovering and resilient; this is the best time to put monetary policy into action.
Core-core inflation has been showing momentum.
In the longer term, price stability is important for growth.
RBI Act mandates that if inflation target is not met for three consecutive quarters, the central bank is required to explain. The explanation needs to include (i) reasons for failure, (ii) remedial actions proposed and (iii) estimated time within which inflation target will be achieved.
Monetary policy is accountable to the people without any escape clauses.
Global economy is seeing the most coordinated monetary policy tightening cycle ever seen.
While inflation is led by supply side concerns, mending supplies takes time.
To gain time for supply response, monetary policy has to be deployed.
The accountability mechanism enhances credibility of monetary policy framework.
Question of the role of the MPC in the event of a failure of monetary policy has been raised.
The framework holds the RBI accountable but the role of the MPC is clear.
Secretary to the MPC shall schedule a separate meeting to draft the response of the RBI.
Some early signs that inflation may have peaked.
Actions taken by the MPC could further impact the trajectory of inflation.
India may need lesser monetary tightening than some global economies
RBI is there in the market defending the rupee.
Let it be widely known that we are there in the market defending the rupee.
We will not allow jerky movements but we have no specific level in mind.
Rupee has depreciated lesser than most emerging market currencies.
"That is the power of 600", says Patra referring to level of forex reserves.
Source: PHD Chamber Of Commerce Event
10-Year Bond Yield Rises
Yield on the 10-year bond rose 5bps to 7.47%, during the session.
Source: Bloomberg
Nazara Technologies Jumps Nearly 20%
Shares of Nazara Technologies jumped nearly 20%, the most since the day of listing on March 30, 2021.
The sharp uptick comes after Prabhudas Lilladher reiterated 'buy' and hiked target to Rs 1,813, an implied return of 194.82%.
The target price hike follows Prabhudas Lilladher recently hosting Nazara Tech's CEO.
Nazara Tech expects Battle Grounds Mobile India (BGMI) Master Series IP to be profitable in the first year itself. Nodwin Gaming, a subsidiary of Nazara Tech, has tied up with Star Sports to live telecast the BGMI series for the first time in Indian television. The production cost of the event is likely to be Rs 15 crore-Rs 20 crore.
Prabhudas Lilladher expects Esports to emerge a key growth lever for Nazara Technologies.
The company gained 4% on Thursday after JM Financial initiated coverage on the stock with 'hold' recommendation. JM Financial has set a price target of Rs 1,070 for the stock, an implied return of 6.92%.
Of the 10 analysts tracking the company, six maintain 'buy', two suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 52.8%. Trading volume is 16 times the 30-day average.
Source: Prabhudas Lilladher note, Bloomberg
Spandana Sphoorty Extends Gains After Resolving Differences With Former MD
Shares of Spandana Sphoorty Financial rose over 9.5% in intraday trade. The stock gained nearly 20% on Thursday.
The uptick comes after the company informed exchanges after market hours on Wednesday that it resolved all differences with promoter and former MD Padmaja Gangireddy.
The two parties have signed a settlement agreement. Trading volume is more than 27 times the 30-day average. All five analysts tracking the company maintain 'buy'.
Source: Exchange filing, Bloomberg
Metal Stocks Gain; 14 Of The 15 Constituents Of Nifty Metal Rise
Nifty Metal is among the top sectoral gainers in Friday's session.
Tata Power Gains On Plan To Set Up EV Charging Stations Across India
Shares of Tata Power Co rose over 2.25%, the most in three days.
Tata Power has announced a nation-wide plan to set up EV charging stations from North to South and from East to West over next three to five years, reported Economic Times citing Tata Power CEO Praveer Sinha on Friday.
Tata Power has already announced partnerships with Tata Motors to develop charging ecosystem and home chargers to individual vehicle owners.
Of the 24 analysts tracking the company, eight suggest 'buy', five recommend 'hold' and 11 maintain 'sell'. The return potential of the stock is 14.3%.
Source: The Economic Times, Bloomberg
DCM Shriram Climbs Most In Over A Week
Shares of DCM Shriram climbed nearly 3%, the most in over a week.
The agri-commodity maker approved an equity investment of upto Rs 65 crore for 26% stake in Special Purpose Vehicle to be created for setting up a Wind-Solar hybrid renewable power project.
DCM Shriram will get 50 Mega Watt renewable power supply from the SPV.
The company also approved Rs 57.1 crore investment to manufacture Potassium Sulphate with a capacity of 4,600 tonnes per annum at its sugar facility in Uttar Pradesh.
The company will hold its 33rd AGM on July 19.
Source: Exchange filing, Bloomberg
Hindustan Unilever Gains Most In Four Days
Shares of Hindustan Unilever rose nearly 3% after company's chairman hinted at further price hikes due to rising inflation, at the company's AGM on Thursday.
The stock is near its 200-day moving average resistance of Rs 2,325.74.
Of the 39 analysts tracking the company, 31 maintain 'buy', six suggest 'hold' and two recommend 'sell'. The return potential of the stock is 9.8%. Credit Suisse reiterated 'outperform' and kept target price unchanged at Rs 2,550 (an implied return of 13.20%) on Thursday.
Source: Bloomberg
Max Healthcare Erases Gains After Kotak Institutional Equities Initiates Coverage With 'Add'
Shares of Max Healthcare rose over 2% at the open before erasing gains.
Kotak Institutional Equities has initiated coverage of the stock with an 'add' rating. The target price is set at Rs 410, an implied return of 12%.
Kotak notes that Max Healthcare stand out among its peers due to best-in class operating metrics, focus on cost control and capital efficiency. The brokerage also expect Max Healthcare to delilver 14.9% Ebitda CAGR over FY2022-26E.
Kotak Institutional Equities estimate the company to generate health Rs 18,300 crore free cash flow over FY2023-26E.
All the nine analysts tracking the company maintain 'buy'. The return potential of the stock is 18.4%.
On Monday, Jefferies retained 'buy' on the stock and kept price target unchanged at Rs 425 (implied upside of 17.27%).
Source: Kotak Institutional Equities note, Bloomberg
Amber Enterprises Climbs As ICICI Securities Upgrades Stock To 'Add'
Shares of Amber Enterprises India Ltd. rose over 3.3%, the most since Monday.
The rise comes after ICICI Securities upgraded the stock to 'add' from 'hold'. The price target is slashed from Rs 3,540 to Rs 2,280, an implied return of 4.5%.
ICICI Securities believes that Amber will growth at a faster rate than the industry and consolidate its leadership position in Refrigeration and Air Conditioning (RAC) space aided by PLI schemes and recent acquisitions.
Nearly 90% of revenue comes from Original Design Manufacturing (ODM) which is likely to lead to higher profitability, according to the brokerage.
ICICI Securities adds the 35% stock price correction in last six months makes the stock attractive.
Over the last two days, Credit Suisse reiterated 'outperform' and kept target price unchanged at Rs 3,700 while Edelweiss retained 'hold' with the target price unchanged at Rs 3,400.
Trading volume is less than one-third of the 30-day average. Of the 23 analysts tracking the company, 13 maintain 'buy', five suggest 'hold' and five recommend 'sell'. The return potential of the stock is 50%.
Source: ICICI Securities note, Bloomberg
Toyota, Suzuki To Deepen Collaboration In India
Toyota Motor Corp and Suzuki Moto Corp will start production of new SUV model developed by Suzuki at Toyota Kirloskar Motor Pvt Ltd. from August.
Maruti Suzuki India and Toyota Kirloskar Motor will market the new model in India as Suzuki and Toyota models, respectively.
Source: Toyota Motor statement
Greaves Cotton Jumps As Abdul Latif Jameel Buys 35.80% Stake In Greaves Electric Mobility
Shares of Greaves Cotton rose 4% in intraday trade. This follows nearly 7% increase on Thursday.
The company informed exchanges post market hours that Greaves Electric Mobility Pvt Ltd., a subsidiary of Greaves Cotton, has allotted 68,35,450 shares of face value Rs 10 each, aggregating to 35.80% stake, to Abdul Latif Jameel International DMCC.
Jameel represents the Jameel Family, third-largest shareholder of U.S. electric vehicle maker Rivian Inc.
The transaction is done by way of preferential allotment through private placement basis for a consideration of Rs 1170.81 crore ($150 million).
Greaves Electric Mobility, the arm that makes Ampere electric scooters, continues to be a subsidiary of Greaves Cotton. Greaves Cotton holds 61.38% stake in Greaves Electric Mobility.
Trading volume is 0.8 times the 30-day average. Of the seven analysts tracking the company, six maintain 'buy' and one suggests 'hold'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 34.6%.
Source: Exchange filing, Bloomberg
Hero MotoCorp Jumps 9% In Two Days
Shares of Hero MotoCorp rose over 3%. This follows a 6% rise on Thursday. The stock is on a four-day winning streak in which it has gained 12%.
Hero MotoCorp hiked prices of its motorcycles and scooters by upto Rs 3,000, from July 1, 2022.
The exact quantum of increase will be subject to specific model and market, the company said in an exchange filing post market hours on Thursday.
The price revision was necessitated to partially offset cost inflation, including commodity prices, Hero MotoCorp added.
Trading volume is more than twice the 30-day average. Of the 49 analysts tracking the company, 34 maintain 'buy', 10 suggest 'hold' and five recommend 'sell'. The return potential of the stock is 7.1%.
Source: Exchange filing, Bloomberg
Route Mobile Jumps 16% In Two Days
Shares of Mumbai-based mobile communications solutions provider Route Mobile surged nearly 8%, after gaining 8.5% on Thursday
The rise comes after the company announced that it will consider a proposal for buyback of fully paid-up equity shares of the company on June 28.
Of the five analysts tracking the company, four maintain 'buy' and one suggests 'hold'. The return potential of the stock is 21.1%.
Source: Exchange filing, Bloomberg
Opening Bell: Sensex, Nifty Rise; I.T., Banking, Metal Stocks Gain
India's stock benchmarks advanced, aided by gains in information technology, banks, metals, energy and oil & gas stocks, amid a rebound in global equities and crude oil prices above $105 per barrel.
The S&P BSE Sensex rose 1% to 52,778.05. The NSE Nifty 50 also advanced by similar magnitude to 15,713.55.
The broader indices almost mirrored their larger peers. All 19 sectoral indices compiled by BSE Ltd. advanced with Energy, FMCG, Finance, Telecom, Utilities, Bankex, Capital Goods, Consumer Durables and Power indices climbing over 1%.
The market breadth is skewed in the favour of bulls. About 1,739 stocks rose, 358 fell and 76 remained unchanged.
10-Year Bond Yield Rises
Yield on the 10-year bond rose 2bps to 7.43%, at the open.
Source: Bloomberg
Rupee Rises Against Dollar
Rupee rose 0.13% (10 paise) to 78.21 at the open.
Source: Bloomberg
In Focus: Information Technology Companies After Accenture's Q3 Beat
Accenture's strong revenue growth in both consulting and outsourcing businesses augurs well for Indian I.T. sector, but concerns due to elevated attrition, moderation in deal bookings, deteriorating macro environment remain, according to analysts.
Accenture reported a better-than-expected Q3FY22. Revenue grew 27% YoY to $16.2 billion in constant currency terms. This was above the management's guidance as well as Bloomberg consensus estimates.
Growth was broad based with consulting segment rising 30% YoY and outsourcing segment clocking 23% YoY growth in constant currency terms.
Accenture tightened its revenue growth guidance for FY22 from 24-26% to 25.5-26.5% YoY, representing 50bps rise in upper band.
The broad-based growth shows that the demand environment is healthy and augurs well for Indian I.T. sector.
The focus on cost savings is a positive for Indian I.T. services sector as cost optimisation is a key driver of offshoring, according to analysts.
Source: Bloomberg, Brokerage notes
Trade Setup For Friday
Net Institutional Flows Turn Positive On Thursday
Net institutional inflows at Rs 119 crore
FII selling streak continues for 18th day
DIIs remain buyers for 50 sessions in a row, since April 11.
Source: NSE
Stocks To Watch
Hero MotoCorp: India's largest two-wheeler maker has increased ex-showroom prices of its scooters and motorcycles by up to Rs 3,000, effective from July 1.
Tata Steel: Tata Steel Mining Ltd., a wholly owned subsidiary, has completed acquisition of 10% stake in Rohit Ferro-Tech for Rs 20.6 crore.
ONGC: ONGC Videsh, a wholly owned subsidiary, has made an oil discovery in a recently drilled well in Llanos Basin, Colombia.
HCL Technologies: The company has announced the opening of its new delivery centre in Vancouver, Canada.
DCM Shriram: The company has approved equity investment of Rs 65 crore for a 26% stake in a special purpose vehicle to be created for setting up a wind-solar hybrid renewable power project.
Jammu & Kashmir Bank: To consider capital raising on June 28.
Thermax: First Energy, a wholly owned subsidiary, has acquired Jalansar Wind Energy and Kanakal Wind Energy for Rs 1 lakh each.
Systematix Corporate Services: Promoter Chandra Prakash Khandelwal was arrested under Section 3 and 4 of the Prevention of Money Laundering Act, 2002. It would have no impact on the company as the matter does not pertain to it.
Unitech Ltd.: The Enforcement Directorate has attached the company's real estate properties worth Rs 257 crore.
Delhivery: Morgan Stanley initiated coverage with 'equal-weight/in-line', price target set at Rs 540, an implied upside ot 7.85%.
Sensex, Nifty Set To Rise; Hero Moto, Tata Steel, ONGC, HCL Tech In Focus
Stocks rose in Asia Friday amid a global bond rally, as investors reassessed expectations for inflation and interest-rate hikes on escalating fears of an economic downturn.
Equities gained in Japan and South Korea but fell in Australia after US shares closed near session highs, adding more than 3% over three days.
As of 7:30 am, the Singapore-traded SGX Nifty--an early barometer of India's benchmark Nifty 50--rose 0.54% to 15,649.
Oil rebounded to about $105 a barrel. Elsewhere, Bitcoin scaled $21,000.