MARKET WRAP: Indices end flat, Sensex slips 25 pts; financials, autos fall

All that happened in the markets today

4:19 PM

Technical Observation by Nagaraj Shetti - Technical Analyst, HDFC Securities

After witnessing sharp weakness with range bound action in the last session, Nifty shifted into a range bounce action and showed lower levels recovery on Friday. A small negative candle was formed with long lower shadow. Technically, this pattern indicates a formation of hammer type candle pattern (not a classical one). This pattern was formed at the immediate support of 9,150 (previous swing low of 12th May).

The bearish island reversal pattern is still intact with unfilled two gaps (4th May). This pattern could be negated on a decisive move above 9,500-9,600 levels. As long as this pattern is active, the chances of Nifty sliding down to 8,900 levels can't be ruled out (downside pattern target of bearish island reversal).

Nifty formed negative candle pattern on the weekly chart with upper shadow. This indicates sell on rise in the market in the last few sessions. We observe overlapping negative candles in the last two weeks, which signals choppy movement in the market with weak bias.

The near term trend of Nifty is range bound with weak bias. Having placed at the immediate support of 9,150, there is a possibility of minor upside bounce in the early part of next week up to 9,350 levels. But, one may use this upside bounce as a sell on rise opportunity.

4:17 PM

MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services

The market exhibited volatility before ending flat today following Tranche 2 of the stimulus package by the government. Although in the right direction, the package did nothing to enthuse the markets. Without this boost, markets were left to worry about the rising virus cases and lacklustre earnings commentary. Concerns are emerging on the make-up of Lockdown 4.0. It is this uncertainty that is weighing on Investor’s minds. The 3rd press conference of the FM today and the new norms of Lockdown 4.0, alongwith global developments will determine market moves for next week.

3:46 PM

SECTOR WATCH | Here's how sectoral indices on NSE performed today

3:45 PM

MARKET AT CLOSE | Losers and gainers on the S&P BSE Sensex

3:36 PM

CLOSING BELL

The S&P BSE Sensex shed 25 points or 0.08 per cent to 31,097.73 levels while NSE's Nifty ended at 9,137, down 6 points or 0.06 per cent. 

 

3:28 PM

India Cements jumps 8% as Damani family increases stake to 20% in Q4

Gopikishan Damani and Radhakishan Damani’s combined stake in India Cements increased to 19.89 per cent at the end of March 2020 quarter, according to shareholding pattern disclosed by the company. Radhakishan Damani is the founder of Avenue Supermarts Ltd, which promotes DMart. READ MORE 

3:14 PM

MARKET CHECK | Top 5 gainers on the BSE at this hour

3:00 PM

Virus-hit German economy plunges into recession: Reuters

The German economy plunged into a recession after suffering its steepest quarterly contraction since the 2009 financial crisis as shops and factories were shut down in mid-March to fight the spread of the coronavirus, preliminary data showed on Friday. The 2.2% first-quarter contraction was a foretaste of worse to come. Economists expect a deeper slump in the second quarter as the lockdown extended well into April and early May and sectors like tourism and in-door gastronomy remain shut, Reuters reported. 

2:54 PM

MARKET UPDATE:: Inox Leisure, Kajaria Ceramics, and PVR hit their respective 52-week lows on BSE in today's session

COMPANY	PRICE(rs)	52 WK LOW	CHG(%)
INOX LEISURE	193.05	191.25	-4.03
KAJARIA CERAMICS	315.00	306.20	0.90
PVR	852.60	835.70	-3.99

2:45 PM

NEWS ALERT | GAIL halts LNG imports at Ratnagiri port, reports Reuters

Indian utility GAIL (India) Ltd has stopped importing liquefied natural gas (LNG) cargoes at its 5 million tonnes/year Ratnagiri terminal as the start of monsoon makes operations difficult without a breakwater, a company source said. GAIL hopes to resume receiving cargoes at the Ratnagiri Port in western Maharashtra state in October, the GAIL source said, adding that the company received its last LNG cargo at the port from Russia’s Gazprom on May 8, said a Reuters report.

2:40 PM

BUZZING STOCK:: Bharti Airtel at day's high, up 2%

2:30 PM

BROKERAGE VIEW:: Edelweiss Securities on Siemens

Siemens Gas & Power Holding BV, a wholly-owned subsidiary of Siemens AG (parent of Siemens Ltd) has proposed to acquire a 24% stake in Siemens India. In our view, this largely puts to rest investor concerns on the treatment of Siemens India’s gas & power business. In its recent Q2 results, Siemens AG had reiterated it would list the gas & power entity by FY20E.  Over the past two–three years, Siemens India has sharpened its business portfolio, aligning it to potential opportunities in the Indian/global markets. We see rising product mandates for Siemens India as a clear sign of its growing prominence for the parent, which is well complemented by efficient & much empowered top management as reflected in past 2-3 years performance. We maintain a non-consensus ‘BUY/SO’ with a TP of Rs 1,400 (42x March 2022E EPS).

2:25 PM

MARKET UPDATE:: Sensex pares losses

2:13 PM

Rupee closing

Rupee ends unchanged vs Thursday's close of 75.56 against the US dollar

2:10 PM

BROKERAGE VIEW:: Emkay Global Fin Services on Escorts

TP: Rs 898 | 12 months | Rating: BUY | Upside: 13.0%

• EBITDA margin, adjusted for one-offs, expanded 50bps yoy to 12.1% (est. 10.2%), owing to better product mix, softening of commodity prices and cost-reduction efforts. One-off item of ~200bps relates to increase in inventories.
• Due to the impact of the lockdown and expectation of a gradual pick-up in demand, we reduce our FY21 tractor volume estimate by 8% to 78,073 units, but increase FY22E volume forecast by 3% to 95,670 units. Volumes are expected to turn positive by Aug’20, led by low base, pent up demand and better rural sentiment.
• We expect Escorts to sustain market share in domestic tractors ahead, led by a continuation of aggressive marketing efforts, success of its dual-brand strategy – Farmtrac and Powertrac series – and focus on network expansion.
• We expect 8% CAGR in revenues and 15% CAGR in earnings over FY20-22E, driven by volume up-cycle and margin expansion. Retain OW stance in EAP and Buy rating with a TP of Rs 898 (Rs 815 earlier), based on 14x FY22E core EPS.

1:59 PM

World Bank approves $1 bn to support India's fight against coronavirus

This takes the total commitment from the World Bank towards emergency Covid-19 response in India to $2 billion. A $1 billion support was announced last month to support India's health sector. READ MORE

1:51 PM

BROKERAGE VIEW :: Stimulus measures so far disappointing for investors, says Phillip Capital

As larger portion of Rs 20tn economic package is now known, we see these as (1) Addressing liquidity/supply side concerns of smaller businesses and NBFCs; until business growth kicks-in, (2) boosting rural incomes and social upliftment. Unless some steps are taken to address demand side, we believe economic/business growth concerns will persist. We maintain our neutral/negative stance on equities (approx. for a month now) – measures so far will disappoint investors who were in the hope of a fiscal bonanza.

1:44 PM

Centre looks to nudge more MSMEs into manufacturing to reduce imports

Pushing more micro, small and medium enterprises (MSME) into the manufacturing sector, doubling down on a list of non-essential imports that can be quickly produced domestically and laying off the tariff button for now will likely be the government’s strategy to lower import dependence. READ MORE

1:33 PM

China's factory output posts first increase in 2020, consumption still weak

China's industrial output rose 3.9% in April from a year earlier, data showed on Friday, expanding for the first time this year as the world's second-largest economy slowly emerged from its coronavirus lockdown. That was faster than the 1.5% increase forecast in a Reuters poll on analysts and followed a 1.1% fall in March. After months of lockdowns, China is slowly reopening its economy as the coronavirus outbreak on the mainland has come under control. However, it continues to face major challenges in recovery as the pandemic has now swept the globe, affecting other major economies and trading partners. READ MORE

 

1:28 PM

NEWS ALERT :: Nomura sees fiscal deficit at 7% in FY21

>> We expect the central fiscal deficit to slip to ~7% of GDP, taking into account the additional drag from the lackluster revenue collection given our downbeat growth expectation. We believe the additional borrowings recently announced by the government (2% of GDP) will largely be exhausted for covering the revenue shortfall due to low growth. Hence, we expect the government to announce additional borrowings, but most probably in H2 FY21.

>> On real GDP growth, we stick to our projection of it averaging -5% y-o-y in 2020 (-5.1% in FY21), with growth expected to remain negative for three consecutive quarters. Our quarterly profile has growth faltering to 1.5% y-o-y in Q1 2020 (January-March), before plunging to -14.5% in Q2 (April-June), and then weakly recovering to -6.0% in Q3 (July-September) and -1.5% in Q4 (October-December).

1:22 PM

Escorts rallies 5% on strong operational performance in Q4

The company’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) grew 2.5 per cent year-on-year (YoY) to Rs 194 crore, while Ebitda margin, adjusted for one-offs, expanded 50bps YoY to 12.1 per cent against analyst estimate of around 10.5 per cent during the quarter. Revenue fell 15 per cent YoY to Rs 1,380 crore in Q4YF20, due to poor performance by construction equipment segment. READ MORE

1:13 PM

Covid-19 has created deflationary conditions, says CEA Subramanian

Ruling out any impact of stimulus on the price situation, Chief Economic Advisor K V Subramanian on Thursday said the Covid-19 pandemic has severely dented the demand for non-essential or discretionary goods, creating deflationary conditions.

 

He also said that a good part of the Rs 20 trillion stimulus package is designed in a manner that the fiscal deficit remains under control. READ MORE

1:04 PM

MARKET CHECK | Metal stocks rally; SAIL up over 5%

12:56 PM

Relief to SBI on the cards; investors should await clarity on asset quality

State Bank of India’s (SBI’s) size, as well as diversity of exposure, hasn’t been of much help to investors during the slump. This reflects in the near-50 per cent fall in market cap over the past three months.

 

The Street, too, has been fast to de-rate the stock, with stress building in the 18.5-per-cent exposure to the two troubled pockets (MSMEs and NBFCs). READ MORE

12:49 PM

Tata group, Adani, CESC may join the race to buy BSES companies

The Tata group, the Adani group, and CESC are planning to join the race to buy the 51 per cent stake held by Reliance Infrastructure in BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL), say investment banking sources.

 

They will be joining others keen on acquiring the stake in BRPL, the largest power distribution company in New Delhi with over 2.56 million consumers and in BYPL which supplies electricity to around 1.7 million consumers across Central and East Delhi. READ MORE

12:41 PM

Hikal freezes at 5% upper circuit on development of Favipiravir API

The trading volumes on the counter more than doubled with a combined around 280,000 shares changing hands on the counter on the NSE and BSE. There were combined pending buy orders for 120,000 shares at 12:17 pm. READ MORE

12:35 PM

MARKET UPDATE | Coal India gains over 1%

12:28 PM

NEWS ALERT

12:22 PM

BROKERAGE VIEW:: Edelweiss Securities on Eicher Motors

We believe Eicher Motors’ (EIM) two wheelers (RE) have evolved from leisure to utility bikes. Moreover, our analysis of its geographical spread, customer profile and financing instill confidence that volumes will recover, may be even faster than industry. In FY20, RE has gained/held on to market share (motorcycle share: 5.9%, flat YoY; premium segment: up 170bps to 27%). That said, new platform launch is imperative to address product fatigue and usher in replacement demand (expecting launch in FY21). Also, current valuations factor in most of the risks (refer Business resiliency). Post our note Discount season, a lot of clarity has emerged regards COVID-19. So we prune FY21/22E core EPS 18%/16%. Maintain ‘BUY’ with revised SOTP-based TP of Rs 17,215 (earlier Rs 19,327).

12:16 PM

NEWS ALERT | SC issues notice to Fin Min, RBI, Sebi on CREDAI's Haryana plea: CNBC TV18

>> CREDAI Haryana seeks moratorium for developers for six months

>> CREDAI Haryana seeks 6-mth freeze on repayment of CPs, bond, NCDs