Sensex ends 416 pts higher as financials gain on Rs 50k cr lifeline for MFs

All that happened in the markets today

4:02 PM

Technical view by Nagaraj Shetti - Technical Analyst, HDFC Securities

After witnessing a sharp weakness on Friday, Nifty bounced up smartly on Monday amidst a range bound action, closed the day higher by 127 points. A small positive candle was formed on Monday with gap up opening and upper shadow. The opening upside gap remains unfilled. This candle pattern signals an upside bounce from a support of 9,150, but struggling to sustain the highs.

 

On the upper side 9,350-9,390 levels continue to act as a key overhead resistance for the short term. A sustainable move above 9,400 levels could be considered as an upside breakout attempt of the present range movement.

 

The rising wedge pattern in Nifty as per daily timeframe is still intact and Nifty is currently facing resistance near the upper area of this wedge at 9,400-9,500.

 

The short term trend of Nifty is positive amidst a range movement.The upper area of 9,400 could offer strong resistance on any upmove from here. Immediate support is placed at 9,150 for the next session.

3:56 PM

Market closing comment :: Vinod Nair, Head of Research at Geojit Financial Services

Markets closed positive in sync with the global markets. News regarding the RBI liquidity facility for Mutual Funds and stimulus packages from central banks around the world provided some positivity to the markets. Investors are looking towards earnings results coming out later and during the week for more clarity on the specific sectors. Credit risk concerns remain and investors are advised to remain cautious.

3:40 PM

Sectoral trends on NSE at Close | Nifty Bank, Nifty Private Bank indices rally

3:39 PM

Sensex Heatmap at Close | IndusInd Bank, Axis Bank settle as top gainers

3:38 PM

CLOSING BELL

>> Benchmark S&P Sensex settles at 31,743.08 level, up 415.86 points or 1.33 per cent

>> NSE;s Nifty50, meanwhile, gains 128 points to close at 9,282.3 level.

 

3:24 PM

BROKERAGE VIEW:: Emkay Global Fin Services on Bharti Infratel

TP: Rs 145 (12 months) | Rating: SELL

• The 13% EBITDA miss was primarily on account of provision for doubtful debts of Rs1.93bn accounted in other expenses. Energy margin continued to be volatile and stood at 5.9%, (+430bps qoq), while it was in-line with estimates.
• Although gross additions improved, higher exits impacted net tenancy additions, with standalone net tenancies declining by 607. Overall, net tenancies were up 1%, supported by Indus. We are factoring in 5k and 5.5k net tenancy additions for FY21E and FY22E.
• Rising working capital requirements due to increase in receivables days, as well as the lower end of energy margin guidance of 3%, indicates the pressure from operators due to their weak financial health.
• Dividend from Indus and clarity on merger can provide a trading opportunity, in our view. Overhang to remain until clarity emerges on VIL. We maintain Sell with a revised TP of Rs145 (4x FY22 EV/EBITDA) as we cut our target multiple with recent market correction.

3:23 PM

MARKET CHECK :: Indices pare gains; up 400 pts

3:14 PM

Pfizer surges 10% on special dividend of Rs 320 per share

The company has fixed May 8, 2020 as the record date for ascertaining eligible shareholders to get the said special dividend and will be given electronically through bank transfer on Tuesday, May 19, 2020. READ MORE

3:10 PM

Govt needs clear 'entry and exit plan' on fiscal expansion: Shaktikanta Das

The coronavirus pandemic will expand the government’s fiscal deficit beyond 3.5 per cent of India’s gross domestic product (GDP), said Reserve Bank of India (RBI) governor Shaktikanta Das as he called for a "well calibrated roadmap” to manage finances. “The 3.5 per cent fiscal deficit target for this year will be very challenging to meet,” Das told news agency Cogencis in an interview. READ MORE

2:57 PM

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

2:47 PM

Franklin Templeton MF committed to return investors money: Sanjay Sapre

"We are committed to doing all we can to return money in the schemes that are wound up at the earliest to investors, and to regain your trust in our brand," Franklin Templeton Asset Management (India) President Sanjay Sapre said in a note to investors.

 

The asset manager shut down its six schemes Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund on Thursday. The six debt schemes had assets under management of over Rs 25,000 crore. READ MORE

2:39 PM

EXPERT COMMENT | Ashish Shanker, Head of Investments, Motilal Oswal on RBI announcing Rs 50K cr lifeline for MFs

“This is more of a confidence-boosting measure. Most debt MFs invest in AA or higher rated paper and A or below is a very small part of their portfolios. There is enough liquidity in the market for a good quality paper. However, it was important for RBI to issue this communication and support to calm nerves. This should help settle some of the panics that was caused over the weekend over the FT news. Even in 2008 when this measure was introduced, none of the MFs actually utilised it. So this is more of a backstop”.

2:33 PM

Stocks that hit 52-week high on BSE today

COMPANY	PRICE(rs)	52 WK HIGH	CHG(%)
ALEMBIC PHARMA	813.00	839.00	7.07
ALKYL AMINES	1810.00	1879.50	9.36
CIPLA	614.85	632.05	2.54
LAURUS LABS	517.65	524.10	4.70
LUPIN	892.00	906.35	1.68

2:23 PM

Navin Fluorine rallies 12%, hits new high; zooms 71% from March low

Navin Fluorine International had re-commenced its operations of manufacturing operations at the company’s facilities at Bhestan, Gujarat and Dewas, Madhya Pradesh from April 14, 2020 after obtaining requisite permissions, as applicable, from concerned Government authorities. READ MORE

2:16 PM

NEWS ALERT | Have to give importance to economy as well as continue the fight against COVID -19: PM Modi to CMs

>> Impact of Coronavirus will remain visible in the coming months, he says

>> He emphasized on the importance of usage of technology as much as possible and also to utilize time to embrace reform measures

(Via ANI)

2:13 PM

Rupee closing

Rupee ends higher at 76.23/$ vs Friday's close of 76.45 against the US dollar

2:10 PM

BROKERAGE VIEW:: JM Financial on Cummins India

RATING: BUY | Target Price: Rs 440

 

We attended Cummins India (KKC)’s conference call, which gave an overview of Covid-19’s impact on its business. Key takeaways are as follows: a) While it is difficult to assess the length of the slowdown, management expects operations to normalise in 6-12 months; b) Cummins is ahead of the curve in initiating cost-cutting measures and will further accelerate these moves; c) its distribution segment is slated to see the fastest recovery followed by industrials and then exports; d) power-gen will continue to witness weak demand, but specific areas such as data centres and telecom will see a pick-up; e) a weakening INR and manufacturing shift from China is likely to improve India’s positioning in the global supply chain; and f) supply chain ramp-up is a bigger issue than labour migration for KKC. CPCB-4+ norms are likely to be delayed but capex plans will continue, albeit with a few months’ delay. We maintain BUY with a TP of INR 440 and KKC remains our top pick in India industrials.

1:59 PM

BROKERAGE VIEW:: ICICI Securities on Mahindra CIE

We expect sales, EBITDA PAT to grow at a CAGR of -3%, -5.4%, 3.5%, respectively, in CY19P-21E. We feel the CMP bakes in much of the negatives and present valuations look attractive from a medium to long term standpoint. Accordingly, we upgrade MCI to BUY with a revised target price of Rs 100, valuing it at 5.5x CY21E EV/EBITDA (implied 10x P/E of CY21E EPS). The company’s track record of consistent CFO and FCF generation combined with strong MNC parentage and purchase of additional 0.03% stake by parent group CIE lend us additional comfort in our stance. 

1:51 PM

NEWS ALERT | Pfizer India declares special dividend of Rs 320/share

1:44 PM

European indices trade higher in early deals

1:38 PM

Why Franklin-type fiasco will keep repeating

Franklin will neither accept fresh subscriptions, nor allow exit. It will liquidate the portfolio as and when the debt papers mature, or earlier if it can sell. Whatever it collects, it will return to investors. How much will that be? No one knows. Investors are trapped. Those who had put in money in other mutual fund (MF) schemes are deeply worried. What went wrong? Is there a systemic flaw? Is there a role for the regulator here? Can this happen again? What should you do to avoid such accidents? READ MORE

1:28 PM

EXPERT COMMENT | Deepak Jasani, HoR, HDFC Securities on RBI announcing Rs 50K cr liquidity support to MFs

The RBI’s special package for providing liquidity to Mutual funds will alleviate the fears in the minds of investors and also dissuade many from getting into the redemption mode. It will help stabilize sentiments across debt and equity markets at least for a few days/weeks.

For Mutual funds this will be an additional window for liquidity. However borrowing against investment grade paper for redemption may not be a good idea generally (except occasionally and for a limited period). Also this will do little to halt the NAV hit due to possible downgrade of papers held by the Mutual funds due to the economic slowdown and the resultant sluggishness in economic activity emanating from the pandemic.

For the time being the sentiments may have stabilized, but going by the way the corporate health could deteriorate due to the pandemic, there is some probability that RBI might have to step in again after a few weeks. In the meanwhile investors in debt mutual funds will do well to review the investment by the schemes in which they have invested and in case they feel the need, shift to safer (even if they yield lesser) categories of mutual fund schemes or in extreme cases other safer instruments including Bank FD (subject to limit of Rs.5 lakhs per Bank) or Govt savings schemes

1:23 PM

Defensive stocks soar as investors choose safety over uncertainty

The sell-off in the equity markets since the coronavirus disease (Covid-19) pandemic started and the subsequent rally have changed the relative weightings of key sectors in the benchmark indices on Dalal Street.

 

The composition of the Nifty50 has now tilted in favour of defensive sectors and away from cyclicals such as banks, non-banking finance companies, metals and mines, and automakers. READ MORE

1:10 PM

NEWS ALERT | PM calls for massive reform push, says this is the time to plan reform: CNBC TV18

-- Govt not in favour of opening up red and orange zones post May 3

-- Govt in favour of further relaxations in green zones post May 3

1:07 PM

BROKERAGE VIEW:: Centrum Broking on Building Materials

The Indian Tiles and Ceramic industry has undergone a challenging phase recently (FY16-19). Nonetheless, it was also the period during which the inorganic segment (~50% of the overall industry) was forced shifted on a level playing platform with its organic counterparts following the introduction of GST and measures like banning the use of coal gasifiers. Further, the consolidation in the inorganic segment has also aided the organised segment to gain structural strength. Notwithstanding the current short/medium term challenges posed by the COVID 19 pandemic, we expect fundamentally strong companies focused on earnings growth and balance sheet (cash) conservation to emerge even stronger.

Kajaria Ceramics (KJC) with 21% market share in the organised segment and 11% in the overall market is poised well to take advantage of the changed environment. KJC’s focus on product quality, wide product range with even wider distribution network coupled with strong brand recall aides its sustained performance even in challenging conditions; Initiate coverage with a BUY rating and target price of Rs 508/sh. CERA Sanitaryware (CRS) is expected to improve its EBIT margin to ~15% from 13.9% and ROCE is estimated at ~19% in the most challenging period (from FY18-22) post GST introduction, demonetisation impact and the current COVID 19 pandemic. CRS continues to outsource manufacturing, hence its capex requirement will be limited leading to asset light model; Initiate coverage with a Buy rating and target price of Rs 3,073, up 47% from the CMP.

1:02 PM

Q&A :: Biggest challenge for small firms is surviving the next 3-6 months: Holland

It has been an eventful week for the markets that negotiated oil prices falling into negative terrain and Franklin Templeton closing six mutual fund schemes.

 

ANDREW HOLLAND, chief executive officer at Avendus Capital Alternate Strategies, tells Puneet Wadhwa that once stability comes to the global markets and fundamentals can be accessed more clearly, flows will come back into emerging market funds. READ FULL INTERVIEW HERE

Andrew Holland, CEO, Avendus Capital Alternate Strategies

12:53 PM

Cummins India shares slip 7% on concerns of Covid-19 impact on biz

For the first nine months (April-December) of the financial year 2019-20 (FY20), Cummins India had posted 21.9 per cent year-on-year (YoY) decline in its consolidated profit before tax (PBT) at Rs 642 crore. It had PBT of Rs 822 crore during the same period of FY19. Operational revenues during the period had declined 4.3 per cent to Rs 4,029 crore on a YoY basis. READ MORE

12:40 PM

NEWS ALERT | Govt working on economic package to tackle Covid-19: RBI Governor

-- Fiscal measures key to combat Covid-19 economic impact: RBI Governor

-- Have not taken a view on deficit monetisation

-- FY21 fiscal gap going beyond 3.5% becomes unavoidable

 

(as reported by Cogencies)

12:34 PM

BROKERAGE VIEW:: HDFC Securities on ICICI Pru Life

We like IPRU’s re-engineered business model which is focused on a more diversified product mix along with an increased protection share. We expect VNB to grow at FY19-22E CAGR of 2.8%. We however remain wary of the current Covid-19 situation and believe that outlook for FY21E remains hazy. Lower than expected growth in FY21E may delay goal of doubling VNB by FY23E. We rate IPRU a BUY with a TP of Rs 460 (Mar- 21E EV + 21.1x Mar-22E VNB).

12:26 PM

PVR, Inox Leisure hit 52-wk lows in a firm market; tank over 50% in 2 mths

Shares of multiplex operators including PVR and Inox Leisure hit their respective 52-week lows on the BSE on Monday, in an otherwise firm market, on reports that about six states want lockdown extended beyond May 3. Individually, Inox Leisure slipped 6 per cent to hit a low of Rs 202, while PVR declined 3 per cent to hit Rs 924 on the BSE in the intra-day trade today. In comparison, the S&P BSE Sensex was up 2 per cent at 31,989 points at 11:08 am. READ MORE