MARKET WRAP: Sensex gains 93 pts, Nifty ends at 11,472; ONGC surges 3%

All that happened in markets today.

3:46 PM

Weekly Strategy :: Sahaj Agarwal, head of derivatives, Kotak Securities

Nifty staged a strong bounce and tested 11450-11500 levels. The trend support for the index is seen at 11,050. Short-term momentum indicators are overbought; hence, some consolidation is playing out. We suggest buying on dips with a support of 11,050. On the higher side we expect the index to conquer 11,700 in the near-term followed by 12,100 over the next few weeks. Private banking and IT sectors are expected to outperform, while selective buying is likely in midcaps

3:44 PM

Nifty snapshot

3:42 PM

Contribution to Sensex

RIL, TCS, ICICI Bank among top contributors

3:42 PM

Sensex heat map

Bajaj Finance, ONGC, HDFC among key Sensex gainers

3:39 PM

CLOSING BELL

The S&P BSE Sensex climbed 93 points or 0.24 per cent to end at 38,598.99 and NSE's Nifty50 index ended at 11,471.55 levels, up 43 points or 0.38 per cent. 

3:23 PM

MARKET CHECK

3:04 PM

Sector watch | Nifty PSU banks decline

-- Indian Bank, Allahabad Bank, J&K Bank hit 52-week low

2:58 PM

GIC Re, New India Assurance soar 20% in range-bound market

Shares of general insurance companies were on a roll on Wednesday. Both General Insurance Corporation of India or GIC RE (Rs 258) and the New India Assurance Company (Rs 114) hit their upper circuit of 20 per cent on the BSE after a news report suggested that insurance sector posted a substantial growth rate in premiums. READ MORE 

2:54 PM

Market check

2:47 PM

$5-trillion economy to double individual wealth to Rs 800 trillion: Karvy

Wealth manager Karvy Private Wealth in its tenth annual India Wealth report said that individual wealth is likely to grow at a rate of 13.2 per cent to Rs 799 trillion once India becomes a $5-trillion economy. The report estimates this will happen around the financial year 2023-24 (FY24). Individual wealth grew at 9.6 per cent to reach Rs 430 trillion helped by a growth in financial assets. Financial assets grew 10.96 per cent and physical assets such as land grew at 7.59 per cent. READ MORE 

2:47 PM

Will govt meet its fiscal deficit target? Bond traders are too skeptical

Sovereign debt sold off in the past two months on fears Prime Minister Narendra Modi will expand the record Rs 7.1 trillion ($100 billion) in borrowings to support a slowing economy. The rout diminished the impact of Asia’s most aggressive monetary-policy easing and a banking system that’s flushed with liquidity. READ MORE

2:38 PM

BUZZING STOCK | New India Assurance Company hits 20% upper circuit

2:28 PM

NEWS ALERT | Vodafone Idea demerges with Vodafone Towers for transfer of fiber infrastructure: BSE filing

 -- Says, fiber infra undertaking of the co stands demerged

2:23 PM

ACC delivers a decent performance amid demand and liquidity challenges

The slowdown in real estate and construction activities is adding to ACC woes and a liquidity crunch too is looked as a dampener. In this backdrop, a small two per cent year-on-year dip in volumes to 6.44 Million Tonne (MT) remains a fairly decent performance. READ MORE 

2:13 PM

ICRA on solar energy sector

Overall the industry has been affected by a mix of factors such as -

 

>> continuing delays in payments from utilities in few states like Andhra Pradesh, Telangana & Tamil Nadu; 

>> regulatory uncertainty on tariff matters for IPPs in state of Andhra Pradesh and delays in tariff adoption by SERC in Andhra Pradesh; 

>> execution delays witnessed for land acquisition and transmission connectivity approvals and; 

>> tight financing environment over the last 8-10 month period. 

 

As a result, the ability to achieve the financial closure for the projects in a timely manner remains a challenge for many of the IPPs. As opposed to this, the industry segment had a decent capacity addition in FY2018, supported by relatively sizeable capacity addition in open access segment due to favorable state solar policies in Karnataka.

2:05 PM

PSBs had 'worst phase' under Manmohan Singh, Rajan: FM Nirmala Sitharaman

Delivering a lecture at the prestigious Columbia University's School of International and Public Affairs here on Tuesday, Sitharaman said that giving all the public sector banks a lifeline is today her primary duty. READ MORE  

2:04 PM

NEWS ALERT | 2.2 cr shares of ICICI Lombard change hands on NSE: CNBC TV18

1:57 PM

DHFL, Indiabulls Housing, RCap, RInfra tank over 50% in one month

State Trading Corporation of India (STC India), Talwalkars Healthclubs, Housing Development & Infrastructure (HDIL), Sintex Plastics Technologies, Sintex Industries and Unitech are among 13 stocks from the S&P BSE Allcap index, that have seen their market value declining more-than-half during the month. READ MORE 

1:35 PM

RESULT IMPACT | The Federal Bank slumps nearly 5%

1:28 PM

EARNINGS ALERT | Federal Bank announces Q2 results

• NII rises nearly 10% on a like-to-like basis; 
• PAT is up 57% YoY;
• Gross NPA up 6.4% QoQ at Rs 3,612.1 cr;
• Net NPA up 10.2% QoQ at 1,843.6 cr;
• Fresh slippages at Rs 540 cr vs 415 cr (QoQ)

1:15 PM

MARKET CHECK | Stocks that hit 52-wk high today on BSE500

1:09 PM

NEWS ALERT | Chances of Brexit low; DUP resisting: UK official, reports Bloomberg

1:03 PM

Edelweiss on Polycab India

Sustained investments in FMEG over FY14-21E (a third of overall capex) will help the company ramp up revenue market share from ~1% currently to ~3% (~4x growth in revenues) over the next three-four years with significant operating margin ramp up potential. That said, Polycab’s growth levered business model and management’s initiatives to balance growth with returns/cash flow could face challenges in case of sustained demand slowdown—key risk to our investment thesis

1:02 PM

Nomura on SUN TV

For Sun TV, we expect a 2% fall in ad growth in 2QFY20F due to slowdown in the industry. SUN TV ratings have inched up marginally during the quarter, which should benefit in Q3FY20F.

On domestic subscription, we see a healthy 17% revenue growth led by better monetisation from cable segment. We expect EBIT margin to decline to ~49.1% in 2Q (~63% in 2Q19) due to higher content costs on the launch of its Bangla channel, shift to commissioned content compared to privately producer previously, and investments in the digital segment.

Reiterate our Buy rating on this stock, as current valuation at ~12.1x FY21F EPS are attractive, in our view. We value Sun TV based on 16x FY21F EPS, and roll forward our valuation to Jul-20F to arrive at our target price of Rs 644, which implies ~34% upside.

1:01 PM

COMMENT :: GDP & Markets

GDP and stock price have very little correlation over short and long term: As per our analysis, GDP has virtually no correlation with near-term stock returns. Correlation between GDP and NIFTY50 returns for the quarter in which the GDP is reported is just 5% with an R-squared value of 2%. Cross-country evidence by researchers (Dimson et al. [2002], Ritter [2005]) also indicates that even over the long term there is no correlation between GDP growth and stock prices.

 

Stock prices are better predictors of future GDP trend than the other way round: Lagged GDP data is fully priced in along with expectations of future trajectory of GDP and hence incremental data has very little value unless it springs a surprise. However, the correlation of NIFTY50 returns for the quarter with the GDP reported two quarters ahead is higher at ~39% although still insignificant.

(Source: ICICI Securities report)

12:59 PM

Centrum on HUL

We believe rural sales are key to HUL’s revenue given key categories are well penetrated (+90%), it has little scope for growth in in-direct distribution. Further weaker rural sales, when wholesale channel is affected due to liquidity issues, witnessing inventory correction may warrant further A&P interventions in our view. Factoring revised tax rates we increased earnings estimate, maintaining our Add rating and DCF-based target price of Rs 2,118.

12:58 PM

Jefferies on Wipro

Wipro's 2Q revenue growth missed slightly (1.1% QoQ cc vs. est. of 1.5%) but EBIT was 4% ahead helped by better margin (17.3% vs. 16.8%); lower taxes led to higher net profit beat. Growth guidance of 0.8-2.8% for 3Q is better than expected especially given seasonal weakness. However management commentary mentioned risks in BFSI, particularly in Europe. We maintain underperform on Wipro as we expect its growth underperformance relative to top tier peers to continue.

12:57 PM

Emkay Global on SBI Life

SBI Life (SBIL) reported in-line results led by focus on Protection, Annuity and individual non-par savings business. Renewals registered 33.2% growth yoy. SBIL’s strategy largely remains the same with focus on higher-margin products like Protection, Annuities and individual non-par savings business. We maintain our Buy/OW with a revised target price of Rs965 at 2.9x Sep’21 EV (earlier Rs900 at 2.9x FY21E EV).

12:56 PM

HDFC Securities on ACC

We estimate ACC to deliver 10/16% EBITDA/PAT CAGR during CY18-21E. Given ACC’s healthy cash flow and RoE, as well as its concrete expansion plans (20% capacity increase by end CY21E/early CY21E), the current valuation (of 8.8/8.2x its CY20/21E EBITDA, EV/T of USD 115) is inexpensive.

We reiterate BUY with a target price of Rs1,940 (ascribing 11x to its Jun-21E EBITDA and 0.5x to its CY20E CWIP). Key risks: Sharp roll back in cement prices,

continued sluggishness in demand and a rebound in energy costs.

12:51 PM

MARKET CHECK | Top losers on the BSE at present