Sensex ends over 600 points higher, Nifty above 10,400 mark on global cues

All that happened in the markets today.

3:56 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

It's being an exceptional day for equity markets as Nifty gained nearly two percent and reclaimed 10400. It opened gap up, tracking firm global cues and traded range bound in the first half. However, short covering in the latter half triggered fresh momentum in the latter half and almost all the sectoral indices participated in the move.

 

It was indeed a surprise up move but sustainability above 10400 will be crucial for further recovery. Participants will react to macro-economic data i.e. IIP and CPI inflation in early trade tomorrow. We suggest traders limiting leveraged positions and continuing with stock specific trading approach

3:56 PM

MARKET COMMENT Mustafa Nadeem, CEO, Epic Research

Nifty continued the upward momentum as short-term patterns suggested the bounce to be evident. Nifty pullback seemed to be swift in last few days since momentum on dips has been followed by buying. Bank Nifty added the weight for bulls with prices retracing back to 24700 zones where it consolidated for a brief period of time.

As this rally expands, we believe the resistances will be developed to near levels of 10450 - 10460. In case prices are not able to breach these level then it will be a pullback out of the recent breakdown of the pattern. On the downside, supports are open towards 200 Days SMA at 10150 - 10200. Prices may continue for some time in sideways zone in these levels. A close above only 10650 will trigger some kind of short covering while also calling in long side momentum players. 

 

3:54 PM

NEWS IMPACT Bharti Airtel rallies on fund raising plans

 

Shares of the telecom operator rose as much as 4.86%, the most in over a month, to Rs 421.70. The Sunil Mittal-led company’s board approved the issuance of foreign currency bond of $1 billion or equivalent in one or more tranches, according to its stock exchange notification

 

3:47 PM

Nifty Metal index rises 2.14%

3:43 PM

Nifty FMCG surges 2.62%

3:39 PM

Nifty Sectoral gainers and losers

3:37 PM

BSE Sensex gainers and losers

3:36 PM

Index watch

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	33,917.94	+610.80	+1.83
S&P BSE SENSEX 50	10,879.19	+195.42	+1.83
S&P BSE SENSEX Next 50	32,959.91	+197.30	+0.60
S&P BSE 100	10,751.18	+173.39	+1.64
S&P BSE Bharat 22 Index	3,554.22	+65.60	+1.88

(Source: BSE)

3:33 PM

Market at close

 

The S&P BSE Sensex ended at 33,918, up 611 points while the broader Nifty50 index settled at 10,421, up 195 points.

3:16 PM

PSU banks lost Rs 900-billion market-cap in one month post PNB scam

The public sector undertaking (PSU) banks have lost Rs 900-billion market capitalisation (market-cap) in past one month after the Rs 114 billion ($1.8 billion) fraud at Punjab National Bank (PNB) came to light. READ MORE

3:12 PM

IPO CORNER Bharat Dynamics Limited

 

In terms of valuations, the pre-issue P/E works out to 22.7x 1HFY2018 annualized earnings (at the upper end of the issue price band), which is lower compared to BDL’s peers like Bharat Electron and Apollo Micro System (trading at 33.6x and 40.7x of its 1HFY2018 annualized earnings respectively). 

 

Further, BDL has a strong order book and revenue visibility, coupled with superior return ratios compared to peers. Hence, considering the above positive factors including growth in the defence industry, we recommend SUBSCRIBE on the issue.

 

(Source: Angel Broking)

3:00 PM

TOP SENSEX CONTRIBUTORS

COMPANY	LATEST	CHG(RS)	CHG(%)	FREE FLOAT MKT CAP (RS CR)	CONTRIBUTION (POINTS)
ITC	269.65	10.25	3.95	261575.10	99.34
INFOSYS	1190.00	26.60	2.29	218668.11	64.18
H D F C	1851.25	32.80	1.80	193778.42	62.48
ICICI BANK	298.35	5.65	1.93	149832.07	39.62
HDFC BANK	1867.00	13.80	0.74	210795.90	32.73
BHARTI AIRTEL	419.55	17.60	4.38	44847.83	29.73

2:50 PM

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	33,807.97	+500.83	+1.50
S&P BSE SENSEX 50	10,844.70	+160.93	+1.51
S&P BSE SENSEX Next 50	32,827.95	+65.34	+0.20
S&P BSE 100	10,715.69	+137.90	+1.30
S&P BSE Bharat 22 Index	3,535.54	+46.92	+1.34

(Source: BSE)

2:49 PM

IPO WATCH Bharat Dynamics Limited

Bharat Dynamics Ltd (BDL) is a wholly-owned government company having a Mini-ratna (Category-1) status conferred by the Department of Public Enterprises. BDL is engaged in the manufacturing of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment primarily catering to the Indian armed forces.

As of 31 Jan’18, BDL’s order book stands at Rs10,543 crore (2.2x FY17 revenue). Government’s focus on the defence sector with the introduction of favourable policies (New Defence Procurement Policy (DPP) 2016, FDI, Make in India), is likely to open many opportunities for BDL. Going forward the company is looking at focussing on R&D, enhancing its product portfolio, setting up 2 more manufacturing facilities (at Ibrahimpatnam and Amravati) and exploring international markets

(Source: Centrum Broking)

2:47 PM

CCD: Founder quits MTCL board to focus on coffee business
 

This is a good development for Coffee Day Enterprises (CCD). Reportedly, CCD founder V G Siddhartha has quite the board of Mindtree Ltd (MTCL), a mid-sized software company based in Bangalore and stated that he wishes to focus more on his coffee business. CCD and its subsidiary Coffee Day Trading collectively hold 16.55% in MTCL which is valued at Rs 22 billion as per the latest market capitalization of MTCL. V G Siddhartha owns an additional 3.36% in MTCL. CCD and V G Siddhartha bought shares in MTCL in 2011-12 from its founding Chairman Ashok Soota when he left the company (then company market cap was Rs 24 billion). 

Market rumors suggest that this may be a precursor to stake sale in MTCL by CCD and its founder. It could be a big positive in that case because it will sharply reduce the current net debt of CCD which stands at Rs 28 billion. Recently, V G Siddhartha family bought nearly 2.5% stake in CCD (held 51.3% prior to that) at market price when PE investor KKR sold. We like CCD due to its cafe business which is a market leader in India and solid investments. The stock is undervalued based on SOTP. We maintain BUY and target pirce of Rs 400.

(Source: Maybank report)

2:45 PM

Motilal Oswal Research on S H Kelkar

Fire in BASF’s German chemical plant, China resorting to factory shutdowns in a move to regulate environmental laws, and floods in the US have caused several supply-side disruptions for flavors and fragrances (F&F) players like S H Kelkar (SHKL), with sourcing of raw materials like orange oil, citral and Isoprenol being severely affected. BASF alone accounts for 20-25% of SHKL’s RM requirements.

While SHKL maintains a large stock of inventory, severe supply constraints could exert pressure on margins over the next 2-3 quarters. We, however, believe that margin compression will be partly offset by the shifting of production from the Netherlands facility to Vapi (likely to be completed by July/August 2018). We cut our FY19 EBIDTA estimate by 7% and PAT estimate by 8%
 

2:40 PM

Markets continue to trade firm. Nifty above 10,300 levels. PSU Banks dip. Bharti Airtel, ITC, Vedanta, HCL Technologies, Tata Motors among top gainers

2:34 PM

SPECIAL REPORT India's equity market-cap to hit $6.1 trillion by 2027: Morgan Stanley

Market-capitalisation (market-cap) of Indian equities is likely to hit $6.1 trillion by 2027, up from $2.3 trillion in 2017, predicts Morgan Stanley in its recent Asian equity Strategy Report titled: Asia’s Financial Acceleration – Moving Centre Stage READ MORE

Photo: Shutterstock

2:32 PM

NEWS IMPACT Eicher shuts down its loss-making personal utility vehicle business

Eicher Motors, the maker of Royal Enfield motorcycles, has decided to shut down with immediate effect the personal utility vehicle division that it had set up as an equal joint venture with American firm Polaris. The company had invested in the venture an amount of Rs 2.9 billion, which will now be written down. The joint venture incurred a loss of Rs 0.91 billion in FY17 READ MORE

2:05 PM

Kotak Securities on Petronet LNG

 

We believe Petronet's earnings will continue to rise over the next 2-3 years, driven by higher volumes from Dahej LNG regasification terminal and a higher operating rate of the currently stranded Kochi terminal. Construction of the pipeline to evacuate gas from Kochi is progressing well. PLNG is eyeing to invest in the overseas LNG market which will help him in geographical diversification and further expansion.

 

We expect PLNG to report an EPS of Rs.14.0 for FY18E, an EPS of Rs.14.8 for FY19E and an EPS of Rs.16.5 for FY20E. At CMP, we believe that the stock is attractively valued at 14.2x FY20E earnings. We maintain BUY on the stock with a revised price target of Rs.276/- (earlier Rs.285) including equity value of 26% stake in Dahej Port. Given that most of the capacity at Dahej is tied-up, there is strong visibility on the free cash flow.

2:00 PM

Chana futures down 2.10% on tepid demand

 

Chana prices slipped 2.10 per cent to Rs 3,721 per quintal in futures trade today as participants reduced exposure following subdued demand at the spot market. READ MORE

1:45 PM

USL faces headwind as concerns over GST on extra neutral alcohol remain

The United Spirits stock was trading five per cent higher on bourses in early trade on Monday, as the good and services tax (GST) Council did not take up the issue of including extra neutral alcohol (ENA) under the GST regime. Before Monday’s uptick, the stock had declined about 10 per cent over the past couple of weeks over concerns that ENA, a key raw material for liquor makers, might be included in GST. READ MORE

1:36 PM

Sharekhan on Godrej Agrovet

 

The stock price of Godrej Agrovet moved up by 14% in last one month despite the volatile market conditions. Despite a strong run, the stock has not lost its charm and continues to be one of the preferred picks to play the agri (agri inputs, agro/dairy products) sector growth story. We retain our positive view on the stock and expect further upside of 10-12% with rollover of valuations to FY2020 estimates.

 

1:30 PM

Sectoral Trend

1:25 PM

Shrimp exporting companies fall up to 8% after US hikes anti-dumping duty

Shares of companies engaged in shrimp production business have dipped by up to 8% on the BSE in intra-day trade after the United States, the largest market for Indian seafood, hiked anti-dumping duty on Indian shrimp exports to 2.34% from earlier 0.84%. READ MORE

1:11 PM

L&T construction to build Dwarka expressway; bags orders worth Rs 26 bn

Larsen & Toubro (L&T) on Monday said its construction arm has won orders worth Rs 25.97 billion across business segments. L&T, in a BSE filing, said its transportation infrastructure business has secured an order worth Rs 10.47 billion. READ MORE

1:00 PM

Market Check

 

S&P BSE Sensex	33,626.92		0.96%
Nifty 50	10,326.90		0.98%
S&P BSE 200	4,492.63		0.70%
Nifty 500	9,042.80		0.63%
S&P BSE Mid-Cap	15,985.67		-0.01%
S&P BSE Small-Cap	17,296.03		-0.06%

1:00 PM

Asia's equity market cap will overtake US in a decade: Morgan Stanley

 

Our modeling projects that Asia's total market capitalisation will double to US$56trn by 2027. Asia will overtake North America (US & Canada) as the largest equity market region as it generates over half of the world's growth in market cap. This equates to compound market cap growth of 6.5% per annum, versus nominal GDP growth of 6.0%, with market cap to GDP rising from 113% currently to 118%. 

 

On this same basis, North America, Europe and the Other Non-Asian G20 regions would see average growth of 3.2-3.4% over the next decade. As a result, Asia is projected to generate 56% of global market cap growth, followed by North America (29%) and Europe (11%). Asia would overtake North America as the world's largest equity market region by 2027, and would be almost three times larger than Europe, on our estimates.

 

12:50 PM

Sector Watch: Cement

 

All-India cement prices saw a decline of Rs 9/bag in March 2018, despite (1) easing of the ban on sand mining in South and (2) being in the middle of the busy construction season. With all-India cement prices (`322/bag in March 2018) reaching levels similar a year ago, and rising cost pressures, we expect cement earnings to trend weak in 4QFY18, but for a favorable volume base.

 

(Source: Kotak Institutional Equities report)

12:34 PM

Aarti Drugs falls 6% as Tarapur unit impacted by explosion

Shares of Aarti Drugs has dipped 6% to Rs 528 on the BSE in otherwise firm market after the pharmaceuticals company said that its unit in Maharashtra Industrial Development Corporation (MIDC) Tarapur has got affected by a massive explosion at the adjoining unit of Novaphene Specialties Private limited. READ MORE