MARKETS ON TUESDAY: Nifty ends above 10,600; metal stocks fall; RIL up 4%

Benchmark indices edged up on Tuesday, with financials and pharma stocks boosting sentiment

3:55 PM

Market rundown Vinod Nair, head of research at Geojit Financial Services:

 

"Market extended gains backed by index heavyweights while correction in metals & IT were due to ease in sanctions by US and tightening of H1-B visa procedure capped the gains. Investors are likely to be cautious amid surging oil prices but any green shoots from corporate results & stability in yield will determine the market direction."

3:44 PM

Nifty IT index falls 1.99%. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
WIPRO	286.95	297.35	-10.40	-3.50
INFOSYS	1154.50	1187.70	-33.20	-2.80
TECH MAHINDRA	682.70	702.00	-19.30	-2.75
HCL TECHNOLOGIES	1061.95	1088.00	-26.05	-2.39
KPIT TECH.	241.70	245.80	-4.10	-1.67

3:42 PM

Nifty Metal index ends 1.92% lower. Top losers:

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)
NATL. ALUMINIUM	78.60	84.85	-6.25	-7.37
HINDALCO INDS.	236.75	255.60	-18.85	-7.37
WELSPUN CORP	144.15	148.75	-4.60	-3.09
HIND.COPPER	74.65	76.65	-2.00	-2.61
VEDANTA	297.40	305.05	-7.65	-2.51

3:35 PM

Sectoral Trend

3:34 PM

BSE Sensex: Top gainers and losers

3:31 PM

Market at close

 

The S&P BSE Sensex ended at 34,617, up 166 points while the broader Nifty50 index settled at 10,614, up 30 points.

3:20 PM

Logistics shares rally; Gati, Patel Integrated soar 20%

 

Shares logistics companies have rallied by up to 20% on bourses after the Gati said it exploring the possibility of inducting a new financial/strategic partner. Gati (Rs 121) and Patel Integrated Logistics (Rs 72) have locked in upper circuit of 20% on the BSE with no sellers were seen on these counters. READ MORE

3:15 PM

Fresh US tariffs haven't hit Asian markets yet: Japan steel industry head

The head of Japan's steel industry federation said on Tuesday that new import tariffs on steel imposed by the United States have not yet hit the Asian steel market, but said the industry is monitoring the situation closely for any future impact.

 

Japanese steelmakers are trying to seek item exemptions from the US tariffs, Japan Iron and Steel Federation Chairman Kosei Shindo said at a news conference. READ MORE

3:04 PM

Nomura on HDFC Bank

With significant dominance in retail lending, improving cost ratios and potentially lower stress in SME space going forward, we expect earnings growth of +20% to sustain over FY18-21F. We maintain our Buy rating with target price of Rs 2,350/share (which implies 3.7x FY20F book and 22x FY20F EPS)

3:02 PM

Emkay Global on Delta Corp

The positive catalyst for the stock would be the announcement of new gaming policy by Goa government (expected in 2Q). Indian Gaming industry would expand multifold. The current PER of 30x FY20E does not factor in the benefits from new policy and/or Daman license. We maintain our BUY call with target price of Rs 294 based on 30x PER

3:01 PM

Edelweiss on Crisil

Though credit growth is perking up and bond market developments are positive, slowdown in SME is hurting the ratings segment. Moreover, research segment is yet to see broad-based uptick. Hence, we maintain ‘HOLD’ with target price of Rs 1,825.

2:59 PM

Goldman Sachs on FMCG sector

Britannia Industries (Buy) - India’s market leader in biscuits focused on premiumization by launching affordable individual packets for the rural population.
 

Marico (Sell) - Marico’s Saffola (edible oil) faces intense competitive pressure from products like rice bran oil while its Value Added Hair Oil operates in an over-crowded market.

(Source: Research report)

2:59 PM

STOCK ALERT ADAG stocks under pressure; Reliance Naval, RCom down over 15%

Shares of Anil Dhirubhai Ambani Group (ADAG) companies were under pressure with Reliance Naval and Engineering and Reliance Communications (RCom) plunged by more than 15% in intra-day trade on Tuesday in otherwise firm market. Reliance Power, Reliance Infrastructure and Reliance Capital were down 2% to 5% on the BSE READ MORE

2:42 PM

RBI's rate decision influenced more by core rather than headline inflation

 

Investors wrong-footed by the hawkish Indian central bank minutes might rather want to train their sights on underlying trends in inflation than the volatile headline number, analysts say.

 

The Reserve Bank of India, which Bloomberg economists Tom Orlik and Justin Jimenez rate among the top 3 central banks that surprise the most, has a mandate to keep headline inflation around 4 per cent in the medium term. But commentary from members of RBI’s rate-setting panel show they are more focused on core inflation -- the gauge that strips out volatile food and fuel components. READ MORE

2:30 PM

Abu Dhabi's NMC Health gains 1,650% in six years, stock hits record high

It has risen a whopping 1,650 per cent since it started trading six years ago, more than any other company based in the Arab world. Abu Dhabi-based NMC Health Plc closed at a record on Friday in London, boosting its market value to $10.8 billion. That’s about $200 million less than Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai. READ MORE

2:16 PM

Time for versatile 'Shohei Ohtani' trades, says Morgan Stanley

Investors who want to have all their bases covered had better seek out some assets that perform like Shohei Ohtani, advises Morgan Stanley chief cross-asset strategist Andrew Sheets.

 

Ohtani, a 23-year-old prodigy from Japan, is an ace pitcher for the Los Angeles Angels who’s also proving his worth as a slugger. His two-way play has evoked comparisons to Yankees great Babe Ruth, among others — and this amalgamation of offensive and defensive prowess is exactly what investors should be seeking to help them weather volatile markets, Sheets said in an April 22 note. READ MORE

2:00 PM

Market Check

 

S&P BSE Sensex	34,609.57		0.46%
Nifty 50	10,611.60		0.25%
S&P BSE 200	4,665.38		0.22%
Nifty 500	9,390.25		0.18%
S&P BSE Mid-Cap	16,894.31		0.08%
S&P BSE Small-Cap	18,287.08		0.07%

1:47 PM

Infosys' three-year road map gets a thumbs-up from analysts

Even as the January – March 2018 (Q4FY18) results failed to enthuse investors, most analysts have given a thumbs-up to the three-year road-map laid out by Infosys to accelerate growth in the digital segment.

 

Infosys, which detailed its strategy to analysts in post market hours on Monday, also reiterated its capital allocation policy of returning up to 70 per cent of free cash flow (FCF) with periodic review of return cash balances. READ MORE

1:34 PM

News Watch Petrol prices at all time high; high diesel prices hurt garment industry

The President of Garment Manufacturers and Wholesale Association of Telangana, Pavan Bansal, on Monday said that the recent rise in diesel prices was affecting the garment industries all over the country. READ MORE

1:14 PM

Equinomics Research on Bal Pharma

Nearly two-decade old BAL Pharma has a market cap of mere Rs.119 crore and its Enterprise Value (EV) stands at Rs.189 crore (market cap Rs.119 crore plus net debt of Rs.70 crore). Its EV is less than its FY2018 Annualized sales of Rs.215 crore. Some small pharma companies trade at more than 2x their sales.

If we assume mere 1.2x sales, the targeted EV would be around Rs.258 crore and the same gives a valuation gap of Rs.69 crore (Rs.258 crore minus Rs.189 crore). The valuation gap per share stands at Rs.48/. Therefore, we arrive at a target price of Rs.132. We hope that this target price is achieved in a span of 1 to 2 years

1:12 PM

Prabhudas Lilladher on LIC Housing Finance

LICHF reported mute performance with earnings of Rs5.4bn in-line with estimates on the back of weak NII growth as loan growth was slightly slower and margin pick-up being lower than expected. Core retail disbursement & loan growth was tad better but was muted on LAP, while developer disbursement & loan growth were strong. Asset quality improved sequentially on the back of seasonlly better retail book.

Loan growth were below industry trend and muted spreads will keep NII growth lower than historical trends, however, we do not expect any large asset quality issues leading it to deliver 17-17.5% ROE over FY19-20E. Retain Accumulate with revised price target of Rs649 (down from Rs667) based on 2.0x Mar-20 ABV

1:11 PM

INTERVIEW OF THE DAY We expect high single-digit returns from the market this year: Mihir Vora

The March 2018 quarter (Q4FY18) earnings season has begun well with the information technology (IT) companies delivering healthy numbers. MIHIR VORA, director and chief investment officer, Max Life Insurance tells Puneet Wadhwa that for financial year 2018 – 19 (FY19), he expects an earnings growth of 15 – 18 per cent, predicated on a recovery in earnings for corporate banks and commodity prices remaining strong. CLICK HERE FOR THE FULL INTERVIEW

Mihir Vora, max life

1:09 PM

Edelweiss Research on Bharat Electronics (BHE)

In our view, post the recent 30% plunge in stock price, Bharat Electronics (BHE) offers a long term investment opportunity notwithstanding growing investor discomfort regards falling margins and new order delays. We are positive as medium to long term growth/competitive profile remains intact. Additionally, our sharp 20% cut in FY19/20E earnings factors in delays in large order intakes/inferior revenue mix.

We maintain ‘BUY/SO’ with a revised target price of Rs 185 (Rs 230 earlier) given reasonable 15% EBIDTA growth and strong RoE/RoCE profile (20/27%). We maintain our exit multiple of 23x as well, given BHE’s sustained competitive edge and long-term growth profile

1:04 PM

Vehicle loans put Chola Investment in top gear; disbursement surges 55%

The stock price of Cholamandalam Investment and Finance Company (Chola Investment) scaled to its new 52-week high in Monday’s intra-day trades at Rs 1,714.85 (up 9.4 per cent), before closing the day with net gains of over six per cent.
 

A strong set of numbers for the January-March 2018 quarter (Q4) reported by the company triggered the surge. A robust performance by the company’s vehicle finance business, which accounted for 73 per cent of its total assets under management (AUM; size of the loan book), as of March 2018 and over 85 per cent of total disbursements in Q4, mainly boosted the overall performance. READ MORE

12:47 PM

Bharti Infratel hits 52-week low on disappointing Q4 results

Bharti Infratel hit 52-week low of Rs 316, down 3.6% on the BSE in intra-day trade after telecom tower company reported a lower than expected 2% year on year (Y-o-Y) rise in consolidated net profit of Rs 6.06 billion in March quarter (Q4FY18). READ MORE

12:34 PM

Hindalco, Nalco slip 9% as US softens stance on aluminium producer Rusal

 

Shares of National Aluminium Company (Nalco) and Hindalco Industries have fallen more than 9% on the BSE as fall in aluminium prices after the Trump administration has signalled it could ease sanctions against Russian aluminium producer Rusal.

 

Nalco has tanked 10% to Rs 75.85, while Hindalco Industries plunged 9.5% to Rs 232 on the National Stock Exchange (NSE) on Tuesday. Vedanta and Hindustan Copper were down 3% each on the NSE. READ MORE

12:18 PM

Bharti Airtel Q4FY18 result preview: Here's what brokerages expect

 

Telecom stocks have been under pressure thus far in calendar year 2018 (CY18) with the S&P BSE Telecom index slipping 21 per cent year-to-date (YTD), as compared to a 1.2 per cent rise in S&P BSE Sensex, ACE Equity data shows.

 

Bharti Airtel, Idea Cellular and Reliance Communications have bene among the top losers among the telecom service providers that have lost 24 per cent to 44 per cent. READ MORE

12:08 PM

Kotak Securities on metal stocks

Our fair value of Hindalco (target price : Rs 315) and Vedanta (target price : Rs445) is based on LME aluminum prices of $2,150/ton for FY2019E and US$2,175/ton for FY2020E. A new aluminum project at our LME price assumption will hardly earn RoCE of 2-3%. This has led to limited new capital allocation to aluminum projects (outside China) when global demand is growing at close to 5%.

We expect aluminum fundamentals to improve from the widening deficit outside China and supply reforms in China. In the near term, we expect China inventories to fall in 2QCY18 due to a seasonally strong quarter—we expect 1.2 mn tons of deficit in 2QCY18 and then some surplus in 3Q and 4Q. Chinese aluminum markets are very sensitive to changes in stock levels—falling inventories will likely support SHFE prices

12:06 PM

Sector Watch: Oil

The recent sharp rally in crude prices has been driven by (1) a tighter demand-supply balance amid declining production from Venezuela and (2) the cartel’s desire to sustain production cuts despite targeted moderation of OECD inventories. We do see further upside in the near term from possibility of (1) curtailment of Iran crude exports if the US decides to restore sanctions by May 12, (2) further supply shocks from enduring issues in Venezuela and Libya and (3) midstream bottlenecks that may restrain growth in the US/Canada production. Prefer GAIL/ONGC over OMCs

(Source: Kotak Securities)

12:00 PM

Market Check

S&P BSE Sensex	34,591.10		0.41%
Nifty 50	10,601.85		0.16%
S&P BSE 200	4,664.59		0.21%
Nifty 500	9,392.00		0.20%
S&P BSE Mid-Cap	16,926.85		0.27%
S&P BSE Small-Cap	18,338.71		0.35%