F&O expiry: Indices extend rally, Sensex surges 595 pts; Nifty Bank up 2.5%

All that happened in the markets today

4:25 PM

MARKET COMMENT:: Nandish Shah, Technical Research Analyst, HDFC Securities on May F&O Series Expiry

May series ended with a loss of 3.75%

 

Nifty gained more than 5% during the last two days of the May series on the back of strong global cues to end the series with a loss of 3.75%. At one point in time, Nifty was down by more than 10%. This fall was on the back of the massive rise of 14% in the April series, which was the highest gain in a decade.

 

In the Nifty and Bank Nifty, we have witnessed a rollover of 66%(Prov) and 71%(Prov) as against last three series average rollover of 69% and 64% respectively.

 

Outlook for the Next series: Considering the aggressive Put writing at 9,000 level for the June Options, long build-up by the FIIs’ in the Index Futures segment during the last few days and lower stock futures' Open Interest as compared to an average of the last one year-which in-turn Indicates lower leveraged positions, and fall in the VIX-Fear Index, we believe that one should remain optimistic for the June series with the stop loss of 9,000 levels.

 

On the higher side 10,000-10,200 level to act a resistance where calls have been written

3:56 PM

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

In a continuation to positive expectations visible yesterday, benchmark indices gained by around 1.9%, led by the Auto and Banking index. A huge EU stimulus plan provided a boost to European shares while Asian shares were affected by the US-China diplomatic issues. Indian markets are banking on continued resumption of economic activities, inspite of still high number of new infections. Further stimulus measures are also expected to boost demand in the economy and help the most impacted sectors to recover. Market is rising on the back of expectations while there has been little change in ground realities.

 

 

3:46 PM

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

3:40 PM

MARKET AT CLOSE:: Top gainers and losers on the S&P BSE Sensex

3:36 PM

CLOSING BELL

The S&P BSE Sensex rallied 595 points or 1.88 per cent to 32,200.59 while NSE's Nifty ended at 9,490, up 175 points or 1.88 per cent.

3:26 PM

MARKET CHECK

3:15 PM

MARKET UPDATE | Lupin slips around 2% ahead of March quarter nos

3:01 PM

Q4FY20 GDP growth expectation: How bad will Covid-19 impact the economy?

While estimates vary across brokerages and economists, the common thread that runs through these estimates is the fact that the economy is headed towards a recessionary phase with some even expecting growth to contract over 5 per cent in financial year 2020-21 (FY21). READ MORE 

Photo: Shutterstock

2:54 PM

Patanjali's Rs 250 crore NCD subscribed within three minutes of opening

The debenture has been rated as AA by Brickwork. The fund-raising will be used to meet the Haridwar-based company's working capital requirements and strengthen the supply chain network.

 

The non-convertible debentures (NCDs) carry a coupon rate of 10.1 per cent with a tenure of three years. The NCDs listed on the stock exchanges are redeemable. This is the first-ever issuance of debentures by Patanjali Ayurved. READ MORE

2:44 PM

Tube Investments hits 10% upper circuit on strong Q4 nos, fund raising plan

Total revenue from operations, however, declined 19 per cent YoY at Rs 935 crore during the quarter, compared with Rs 1,224 crore in Q4 of last year mainly due to de-growth in auto industry. During the year, the company implemented voluntary retirement schemes in certain locations at a cost of Rs 21.97 crore to improve the productivity and competitiveness of its business. READ MORE

2:37 PM

INDEX GAINERS:: Hindalco surges around 4%

2:30 PM

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

2:19 PM

Attractive valuations, short covering: Why Nifty Bank gained 12% in 2 days

Between April 30 and May 26, Nifty Bank and Nifty Private Bank indices skid 19 per cent each. In comparison, the benchmark Nifty50 index declined 8.4 per cent during the period. However, Nifty Bank index surged a massive 1,270 points or over 7 per cent to settle at 18,710.55 on Wednesday, and extended its rally in trade on Thursday. Nifty Private Bank index, too, has surged 12 per cent in the last two trading sessions, ACE Equity data show. READ MORE

2:09 PM

NEWS ALERT | Conditions favourable for Monsoon onset in Kerala on June 1: IMD

2:08 PM

BROKERAGE VIEW:: Edelweiss Securities on Praj Industries

Given the lockdown, management highlighted slowdown in international ordering and execution delays in a few projects. The board has decided to cancel the buyback proposal in order to conserve cash given uncertainties. Praj continues to benefit from its R&D and technology prowess coupled with favourable government policies. However, translation of enquiries into orders is slower than expected given multiple challenges (feedstock, liquidity, logistics, etc), hindering scale up. Hence, maintain ‘HOLD’ with TP of Rs 60 (12x March 2022E EPS).

2:06 PM

Rupee closing

Rupee ends lower at 75.75/$ vs Wednesday's close of 75.72 against the US dollar

1:57 PM

BROKERAGE VIEW:: HDFC Securities on Max Financial Services

Maintain BUY | TP: Rs 620

A strategic JV partner such as AXSB provides long term distribution capability, ending uncertainty and market anxiety over the future of the AXSB distribution arrangement. We expect MAXL to lower its dependence on proprietary channels which will be VNBM accretive as investments in channels reduce. We have increased our VNB estimates for FY20/21E by 18.4/15.6%, and fine tuned our DCF assumptions, resulting in a 10.7% increase in TP to Rs 620.

Key risks: Lower growth, higher cost over-runs, supply overhang due to promoter pledges, and any hurdles in deal.

1:49 PM

MARKET UPDATE | S&P BSE Capital Goods index rallies over 4%

1:42 PM

Types of charts used in technical analysis and how to interpret them

Technical charts help traders take an informed decision while making a financial commitment in the markets. They are a graphical representation of historical price, volume, and time intervals. Over the years, several researches have co-related chart with technical tools like moving average, trendlines, and technical indicators. READ MORE 

1:33 PM

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

1:20 PM

Covid-19 crisis: Govt wants PSUs to ramp up dividends, share buybacks

The central government is assessing the cash position of state-owned companies and may ask them to ramp up dividend payouts and share buybacks as much as possible, people in the know told Business Standard. This comes at a time when the Covid-19 crisis is expected to derail the government’s revenue maths for 2020-21, hitting the mop-up from sources such as taxes and divestment. READ MORE

1:12 PM

NEWS ALERT | China's parliament approves Hong Kong national security bill: Reuters

China’s parliament today overwhelmingly approved directly imposing national security legislation on Hong Kong to tackle secession, subversion, terrorism and foreign interference in a city roiled last year by months of anti-government protests.

 

The National People’s Congress voted 2,878 to 1 in favour of the decision to empower its standing committee to draft the legislation, with six abstentions. The legislators gathered in the Great Hall of the People burst into sustained applause when the vote tally was projected onto screens.

(as reported by Reuters)

1:07 PM

NEWS ALERT | Outlook on the operating environment for Indian banks 'negative' due to pandemic uncertainty: Fitch

-- Duration and severity of the pandemic will affect asset quality and earnings

(as reported by CNBC TV18)

1:04 PM

European indices open higher

12:56 PM

Dabur India recovers 4% from day's low, trades 2% up despite weak Q4 nos

Shares of Dabur India moved higher by 2 per cent to Rs 439, recovering nearly 4 per cent from the day's low on the BSE on Thursday, despite weak earnings for the quarter ended March 2020 (Q4FY20) on value buying. In the past five weeks, the stock of personal products company has underperformed the market by falling 15 per cent, as compared to a 1 per cent rise in the S&P BSE Sensex. READ MORE  

12:42 PM

NEWS ALERT | US FDA issues Establishment Inspection report for Dr Reddy's Telangana IPDO unit

-- US FDA determines 'no action indicated' status for the unit

12:28 PM

SECTOR WATCH :: Mid-cap IT

Mid-tier IT companies have seen strong performance since the recent lows of March, outperforming IT large caps by 15%. Many of the quality mid-caps such as NIIT Technologies, Mindtree, L&T Infotech and Mphasis are up 40% on an average in the past 2 months on better Q4FY20 results and decent deal wins. Our expectations from the mid-caps, like the previous down cycles, was that these firms will be impacted more from Covid-19 compared to their larger peers.

Higher client concentration and greater proportion of discretionary work would lead to higher impact for mid-caps versus larger peers. However smaller deal sizes and quick response to the lockdown to ensure business continuity, which in many cases was better than larger peers, led to strong performance and outlook for mid-caps.

(Source: Antique Stock Broking)

12:26 PM

IIFL on Torrent Pharma

Torrent’s 4Q Ebitda was 3% ahead of our estimates, primarily led by a 70bps beat on Ebitda margins. Although Torrent’s India business grew 11% YoY (15%, adjusted for Covid-19 related supply delays) in 4Q, the next two quarters are expected to be muted for the domestic business, given lockdown-related impact on demand. Torrent’s predominantly chronic portfolio would help to partially mitigate the demand hit and, hence, we have cut our India growth forecast for Torrent, from 12% to 8% in FY21.

Torrent has also faced supply challenges for its export business. Cost containment efforts around lower marketing spend and control on employee costs would cushion the impact on margins. We have downgraded our FY21/22 EPS by 7-8%, to account for lower India growth and margins. Impact on the India business is transient and should normalise by 2HFY21. Maintain BUY.

12:25 PM

IIFL on Titan

In its latest update, Titan highlighted that while the lockdown has weighed on sales in April, the subsequent lifting of restrictions has allowed it to open ~43% of its 1,850 stores. Sales at these open stores are at 50% their normal trajectory and improving gradually. Titan expects demand to normalise after a quarter, albeit 1H profitability would be impacted by CoViD related pressures.

We cut our FY21 EPS by 24% and FY22 EPS by 5%, to factor in near-term headwinds and concerns about weak consumer sentiment for discretionary spends. Healthy balance sheet and liquidity position (Rs10bn commercial paper raised in April/May at attractive rates) place Titan well to gain market share in the jewellery space. Stock trades at 45x FY22 EPS; ADD.

12:24 PM

F&O cues

(Source: Antique Stock Broking; data as of May 27 close)