MARKET WRAP: Indices end lower, Nifty fails to hold 10700; bank stocks fall

Benchmark indices edged lower on Friday as losses in financials offset gains in auto stock

3:43 PM

Nifty Bank index ends 0.98% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
FEDERAL BANK	83.00	84.80	-1.80	-2.12
INDUSIND BANK	1915.40	1955.45	-40.05	-2.05
AXIS BANK	536.65	545.90	-9.25	-1.69
RBL BANK	507.55	515.90	-8.35	-1.62
HDFC BANK	2110.60	2139.45	-28.85	-1.35

3:37 PM

Nifty sectoral losers of the day

3:34 PM

BSE Sensex: Bajaj Auto, Maruti Suzuki among top gainers of the day, ONGC top loser

3:31 PM

Market at close

 

The S&P BSE Sensex ended at 35,227, down 95 points while the broader Nifty50 index settled at 10,696, down 40 points.

3:15 PM

Gold steady amid renewed trade tensions

Gold prices were steady in Asian trade on Friday on renewed fears of a global trade war, while a firm dollar and positive US economic data weighed on the market.

 

Spot gold was nearly unchanged at $1,298.29 per ounce, while U.S. gold futures for June delivery were down 0.2 percent at $1,298 per ounce. Spot gold is down slightly this week. READ MOER

Gold

2:59 PM

Move over dollar, next rally in EM currencies: Top investment manager

The dollar’s run is ending, and it’s time to return to emerging market currencies after their two-month slump, according to AMP Capital Investors Ltd.

 

The advance in Treasury yields across the curve will probably stall from here, while US-China trade tensions will turn from being dollar positive to negative, said Nader Naeimi, who runs AMP’s $1.2 billion Dynamic Markets Fund and has begun shorting the greenback. READ MORE

2:45 PM

COMPANY NEWS Adani Power Mundra likely to approach NCLT for bankruptcy protection

 

Adani Power Mundra, a subsidiary of Adani Power, is likely to approach the National Company Law Tribunal (NCLT) for bankruptcy protection. This comes after its lenders stepped back from stake-sale negotiations with Gujarat Urja Vikas Nigam (GUVNL), the state power distribution company. READ MORE

2:30 PM

Sun TV falls

Sun TV Network fell for fifth straight session, down 3.9% at Rs 881.85, on the NSE. Sun TV Network jumped 5.69% in last one year as compared to a 10.94% rally in Nifty and a 1.48% spurt in the Nifty Media index.

2:15 PM

Asia Check

 

Asian equities recovered from early weakness on Friday as a lower yen supported Japanese stocks and firm exports boosted South Korean markets. Still, rekindled concerns about US trade policies limited regional gains.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1% but the index was still down roughly 0.6% for the week.

 

However, regional sentiment recovered somewhat with South Korea's KOSPI rising 0.7% on upbeat export data and Japan's Nikkei advancing 0.2% off the back of yen weakness against the dollar.

2:01 PM

Market Check

S&P BSE Sensex	35,291.54		-0.09%
Nifty 50	10,705.60		-0.28%
S&P BSE 200	4,637.91		-0.35%
Nifty 500	9,262.15		-0.57%
S&P BSE Mid-Cap	15,859.36		-0.96%
S&P BSE Small-Cap	17,017.07		-1.35%

1:45 PM

It may be too late to invest in this sparkling equity market; here's why

Most of Asia’s stock markets fell in May -- New Zealand was one of the rare exceptions. That could mean the future won’t be as bright.

 

Shrugging off trade tensions and Italy turmoil, the S&P/NZX 50 Index just posted its best month of the year and the biggest gain among regional gauges. As of Thursday’s close, it was on track to become one of the world’s best-performing developed equity markets for 2018. READ MORE

1:28 PM

Bajaj Auto spurts after strong sales in May

Bajaj Auto rose 4.84% to Rs 2,885.40 at 11:55 IST on BSE after the company reported a 30% growth in its total vehicles sales at 4.07 lakh units in May 2018 over May 2017. READ MORE

 

1:14 PM

Idea Cellular firms up on wrapping up tower sale

Idea Cellular rose 1.22% to Rs 62.40 on BSE after the company announced completion of sale of standalone tower business to ATC Telecom Infrastructure. The announcement was made after market hours yesterday, 31 May 2018. READ MORE

1:00 PM

Oil slip for bond market: Foreigners dump Indian paper at record pace

Foreign investors are dumping Indian bonds at a record pace as surging oil prices threaten to worsen the nation’s finances, stoke inflation and hurt economic growth.

 

Overseas funds have pulled $4.5 billion from the local debt market since the start of the year, the most in any year-to-date period in data going back to 1999. Second-quarter outflow was the biggest among the major Asian nations as Brent crude rose above $80 a barrel, the highest since 2014. READ MORE

12:47 PM

Sebi defers implementation of new higher margin norms for derivatives

Capital market regulator Securities and Exchange Board of India (Sebi) has deferred the implementation of norms requiring brokers to collect higher upfront exposure from clients. The new norms were to come into effect from June 1. Instead, they will now come into effect from July 1, the National Securities Clearing Corporation (NSCCL), an arm of the National Stock Exchange (NSE), has said in a circular. READ MORE
 

12:33 PM

Rising level of scrutiny: Auditors take guard on corporate breaches

In the past month, auditors of three listed companies – Manpasand Beverages, Atlanta and Vakrangee — have quit, citing potential violations. In another instance, Hindustan Construction Company (HCC), they have raised red flags.

 

In the recent past, the role of auditors has come in for widespread criticism from government and regulatory agencies, including the Securities and Exchange Board of India (Sebi). This has led to auditors taking a stricter stance. READ MORE

12:25 PM

Centrum on Mirza International

We maintain our BUY rating on Mirza International with a target price of Rs205 (20x FY20E EPS). While management has achieved its FY18E guidance of Rs4bn domestic sales, they have further guided for Rs6bn sales for FY19E on the back of new product launches and entry into women footwear. They believe the 100 online-offline large format stores have the potential to generate Rs30mn sales each which would offer them significant upside.

Further, sports shoes and Bond Street have contributed 30% to the domestic footwear sales which would further grow in FY19 as they launch new variants. Management remains confident of double digit growth in the exports business post three consecutive years of decline while leather business would increase utilisation levels and add to margins.

12:20 PM

HDFC Securities on Glenmark

In the absence of lucrative product launches for the US market, the base margins have fallen from 18-19% in FY17 to 13-14% over last two quarters. However, with the recent gWelchol and gProtopic approvals, margins are likely to normalise in 1HFY19.

The management has also guided for additional 10+ launches in FY19 for the US market,which will help the company to maintain 16-17% margins in FY19E. Foresee 6%/10% revenue/earnings CAGR over FY17-20E. Maintain BUY with a revised target price of Rs 710 (16x FY20E and Rs 135/sh for pipeline).

12:19 PM

HDFC Securities on Alkem Labs

Higher R&D spends, increased raw material cost, incremental overheads for fresh capacities will lead to only 50-70bps margin improvement in FY19. The top line growth is likely to be in mid teens driven by double digit growth in both India and the US segments.

While we have lowered our estimates for FY19E to factor in these changes, we believe that the long-term story for ALKEM remains on-track and investors should consider any dip in the stock price as an opportunity to add. Maintain BUY with a revised target price of Rs 2,445 (24x FY20E EPS).

12:17 PM

Indian manufacturing PMI growth slows in May, inflationary pressures pick up

Activity in India's manufacturing sector grew at a weaker pace in May from the previous month, a business survey showed on Friday, while inflationary pressures picked up again amid rising oil prices in another sign that an interest rate hike is around the corner READ MORE

12:02 PM

Markets at noon

 

S&P BSE Sensex	35,314.84		-0.02%
Nifty 50	10,719.80		-0.15%
S&P BSE 200	4,642.47		-0.26%
Nifty 500	9,279.15		-0.39%
S&P BSE Mid-Cap	15,851.80		-1.01%
S&P BSE Small-Cap	17,079.31		-0.99%

11:46 AM

ICICI Bank to probe CEO's role post whistle-blower complaint; stock up 4%

ICICI Bank gained 4 per cent to Rs 297 levels on the NSE on Friday, a day after the bank decided to conduct an independent enquiry into allegations of breach of code of conduct and conflict of interest against its managing director, Chanda Kochhar. READ MORE

11:33 AM

World's fastest GDP growth rate sets stage for an interest rate hike by RBI

India’s economic growth is picking up pace in an environment of rising price pressures, setting the stage for an interest rate increase as early as next week.

 

Growth accelerated to 7.7 percent in the fourth quarter of the financial year ended March 31, government data showed on Thursday, the fastest pace of any major economy. That’s adding to calls for Governor Urjit Patel to pull the rate trigger at the June 6 monetary policy meeting, and follow central banks in emerging markets from Argentina to Indonesia that have stepped up action to stem outflows and curb a rout in their currencies. READ MORE

11:16 AM

Why today's MSCI inclusion of 230 A-shares is important for Chinese stocks?

Global market research and index company MSCI Inc will add roughly 230 China-listed shares to its emerging market benchmark in a two-step process starting on June 1, a move expected to drive a surge of foreign money into the country's stock markets.

 

MSCI's decision a year ago to include yuan-denominated Chinese stocks, or "A-shares", into its emerging market (EM) index triggered a rally in Chinese blue-chips in 2017, though the market has corrected this year amid rising borrowing costs and fears of a Sino-U.S. trade war READ MORE

11:11 AM

Rollover Highlights for Nifty, Banknifty and Market-wide:

 

·      The Nifty May expiry rollover is at 62.62% on Thursday compared to 72.32% on same day of previous expiry.

 

·      The Banknifty May expiry rollover is at 75.06% on Thursday compared to 82.59% on same day of previous expiry.

 

·      The Market wide May expiry rollover is at 83.86% on Thursday as compared to 87.04% on same day of previous expiry.

 

·      The Nifty May rollover is lower than its Three months average of 67.8% and its six months average of 67.67%.

 

·       The Banknifty May rollover is higher than its Three months average of 74.36% and its six months average of 70.74%.

 

·      The market wide rollover is lower than with its three months average of 85.67% and its six months average of 85.9%.

(Source: Nirmal Bang report)

11:00 AM

Coal India: Price hikes, evacuation charge likely to mitigate higher costs

 

The Street’s confidence on Coal India is improving, as indicated by recent analyst upgrades and gains on the bourses. With the impact now behind it of slippage in coal grades and wage hike provisioning, which weighed on the performance in FY18, the price hikes taken in January should take care of higher wage costs.

 

The improved volume outlook and better e-auction prices for its coal are likely to drive earnings in FY19. And, are keeping analysts positive on the stock, trading at a reasonable valuation. READ MORE

10:45 AM

Buzzing stock

Maruti Suzuki India rose 1.32% to Rs 8647.50 on BSE after the company said it crossed the mark of 3-lakh cumulative sale of cars with the acclaimed auto gear shift technology.

10:31 AM

Debt-free firms make up 57% of all market cap: Why Dalal Street loves them

Dalal Street shows a special preference for companies that stay away from debt and fund their operations largely from internal accruals. Debt-free companies (on net debt basis) account for 57 per cent of all market capitalisation of listed non-financial companies even though these companies are in a minority in terms of revenues, assets and net profits.

 

In all, 209 non-financial companies out of a total sample of 594 companies were debt-free at the end of 2017-18 and together they accounted for 25.6 per cent of the sample companies' combined net sales, 22.7 per cent of all assets and 46.5 per cent of their net profit READ MORE

10:29 AM

Metal stocks gain; Vedanta, Jindal Steel JSW Steel among top gainers

COMPANY	LATEST	CHG(RS)	CHG(%)	FREE FLOAT MKT CAP (RS CR)	WEIGHT IN INDEX (%)
VEDANTA	256.70	7.40	2.97	38168.21	7.65
JINDAL STEEL	234.45	4.95	2.16	8623.12	2.40
JSW STEEL	336.55	4.20	1.26	47997.01	11.25
NATL. ALUMINIUM	71.10	0.70	0.99	2611.18	1.60
COAL INDIA	297.00	2.50	0.85	36872.02	30.59
HINDALCO INDS.	236.45	1.35	0.57	33442.30	7.94
S A I L	76.45	0.35	0.46	7894.48	3.76
NMDC	118.20	0.30	0.25	7479.46	5.43

10:28 AM

Kotak Institutional Equities on Q4FY18 results of India Inc

4QFY18 results were generally below expectations and resulted in moderate downgrades to our FY2019/20 net profit estimates. Nonetheless, we expect net profits of the Nifty-50 Index to grow 23% in FY2019 from a lower base of FY2018, post the earnings cuts in 4QFY18 results season. India’s macro is weak, politics uncertain and valuations rich, a potentially dangerous combination in case earnings were to disappoint.