MARKET WRAP: Indices end marginally lower; Nifty tests 10,800; metals drag

Markets ended marginally lower on Monday amid weak global cues

4:09 PM

COMMENT Abhijeet Dey, Senior Fund Manager – Equities, BNP Paribas Mutual Fund

In the absence of any strong cues, stock markets in India traded on a lacklustre note today. Risk appetite in the global markets abated after US President Donald Trump gave a fillip to trade tensions by imposing a 25% tariff on a list of 818 items of Chinese goods worth around $34 billion. Beijing immediately responded with its own set of tariffs on US goods, making this a game of one up-manship. Benchmark indices traded weak to finally close the day marginally in the red. Sectoral performance on the National Stock Exchange (NSE) was mixed. While the auto, healthcare and private banking indices eked out marginal gains, the metals and IT indices lost 1.78% and 0.77%, respectively

3:37 PM

Nifty Metal index falls nearly 2%: Top losers in the pack

COMPANY	LATEST	PREV CLOSE	LOSS( )	LOSS(%)	VOLUME
WELSPUN CORP	130.65	134.85	-4.20	-3.11	298307
VEDANTA	232.05	238.60	-6.55	-2.75	15086578
HINDALCO INDS.	231.00	237.40	-6.40	-2.70	6473259
JINDAL STEEL	229.05	234.00	-4.95	-2.12	6104157
HIND.ZINC	298.20	304.30	-6.10	-2.00	2462078

3:35 PM

Sectoral Trend

3:34 PM

Top Sensex gainers and losers

3:33 PM

Markets at close

The S&P BSE Sensex ended the day at 35,548, down 74 points while the broader Nifty50 index settled at 10,799 down 18 points

3:20 PM

Bata India nears record high; stock up 5%

 

Shares of Bata India have rallied 5% to Rs 817, hitting seven month high on the BSE, on back of heavy volumes. The stock of footwear firm trading close to its record high of Rs 833 touched on November 1, 2017 in intra-day trade.

 

Driven by various initiatives, Bata India reported a healthy performance in FY18. Revenues grew 7% year on year (YoY) to Rs 26.29 billion (adjusting for the GST impact, growth would be around 12%) in FY18. Furthermore, controlled fixed overheads led to EBITDA margin expansion to the tune of 220 bps YoY to 13.5%. READ MORE

3:15 PM

BofA on electical utility companies

In a move to prevent liquidation of stressed thermal power plants, the Finance Ministry has proposed the idea of an asset reconstruction company (ARC) or a ‘Bad Bank’ – that would take-over stressed assets from banks (after a haircut), manage the projects in the interim & sell it off when power cycle recovers. The idea of a ‘Bad Bank’ is not new & makes sense if it reduces the quantum of haircut that banks may have had to take in case the assets were liquidated/ referred to National Company Law Tribunal (NCLT).

The power ministry has identified 40-45GW of stressed projects vs. BofAMLe of 81GW in time, these projects may be transferred to ARC. Regardless of whether stressed assets go to NCLT or ARC, the current scenario is likely to consolidate the powergen sector & present inorganic growth opportunities for NTPC. Buy.

3:10 PM

Jubilant FoodWorks hits new high ahead of 1:1 bonus

 

Jubilant FoodWorks hit a new high of Rs 2,796, up 1%, extending its past two days 3% gain on the BSE, ahead of record date for 1:1 bonus issue. The stock will turn ex-bonus on Thursday, June 21, 2018.

 

The Capital Issue Committee has fixed Saturday, June 23, 2018 as the record date, for the purpose of determining the list of equity shareholders who will be entitled for issue and allotment of bonus equity shares in the proportion of 1 equity share of Rs 10 each for every 1 equity share of Rs 10 each of the Company. READ MORE

3:00 PM

MUST READ RITES IPO opens for subscription on June 20. Should you invest?

 

The initial public offer (IPO) of RITES – a government-owned railway consultancy firm and a Miniratna (Category – I) Schedule ‘A’ Public Sector Enterprise – opens for subscription on June 20. The price band for the issue has been fixed at Rs 180-185 a share (discount of Rs 6 per share for retail shareholders and employees), and the government aims to raise up to Rs 460 crore via this sale. The issue closes on June 22.

 

So, should you subscribe to this IPO? Here's what leading brokerages across the country suggest. Click here to know

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2:45 PM

Top BSE500 gainers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
INDO COUNT INDS.	77.35	9.40	13.83	236798
JP ASSOCIATES	15.60	1.15	7.96	9598387
H P C L	322.60	16.40	5.36	622086
GHCL	287.25	14.30	5.24	42693
VAKRANGEE	43.25	2.05	4.98	4408524

2:35 PM

NSE-SGX licensing pact to continue beyond August

 

An arbitrator appointed by the Bombay High Court has directed the National Stock Exchange (NSE) to extend the agreement of Nifty-licensed products to the Singapore Exchange (SGX) until the arbitration concludes. The licensing agreement was to end in August 2018, which could now extend till early 2019.

 

In an interim order released on Thursday, Justice S J Vazifdar asked the SGX to abide by the high court’s injunction against the launch of new India derivative products. The injunction will remain in effect for four weeks from the date of the final order. READ MORE

2:28 PM

Anand Rathi on KEC International

Execution on the T&D front, both domestic and internationally, is expected to grow at a robust pace. Civil and Railways are expected to show strong growth. Margins are expected to remain at current levels due to lower profitability in railways and civil. However, we feel that most of the optimism has already been priced in.

We do not see much potential from current levels. Further, it will be difficult for the company to maintain order inflow growth due to relatively lower domestic T&D capex. Hence, we maintain a Hold and lower our rating to 15x FY20e earnings, resulting target price of Rs 414 (earlier Rs 432).

2:26 PM

Angel Broking on Bata India (BIL)

We expect BIL to report net revenue CAGR of ~16% to ~Rs 3,555 crore over FY2018-20E mainly due increasing brand consciousness amongst Indian consumers, new product launches, higher number of stores addition in tier – II and III cities and focus on women’s segment (high growth segment).

Further, on the bottom-line front, we expect CAGR of ~19% to Rs 311 crore over the same period on the back of margin improvement (increasing premium product sales). Thus, we initiate coverage on Bata India with BUY recommendation and target price of Rs 896.

2:23 PM

SECTOR WATCH Automobiles

Capital expenditure (capex) by automobile original equipment manufacturers (OEMs), comprising commercial vehicles (CVs), passenger vehicles (PVs) and two-wheelers, is set to increase by 30% to ~Rs 58,000 crore over fiscals 2019 and 2020, compared with the preceding two fiscals. A study of 18 OEMs (of which 10 are rated by CRISIL), covering ~90% of current industry volume indicates PV makers will account for almost 70% of this capex. This will be supplemented by CV manufacturers with 20% share and the balance by two-wheeler manufacturers

(Source: CRISIL report)

2:16 PM

COMMENT

Led by consumer-oriented sectors, the non-infra corporate sector has witnessed some revival in growth and profitability indicators over last 2-3 quarters of FY2018. As per an ICRA note on “Indian Corporate Sector, Credit Outlook for FY2019,” the sectors that have witnessed a pick-up in demand are Automobiles, FMCG, Consumer Durables and Retail - aided by low demonetisation base and improved consumer demand on back of the benefits of seventh pay commission, rural recovery and GST rate cuts. Further good tidings are expected to continue the back of improved rural sales coupled with favourable outlook driven by expectations of normal monsoons, hike in MSPs and overall thrust on agri-economy ahead of elections

2:15 PM

Rupee pares losses, rises 1 paisa against dollar amid greenback selloffs

 

The rupee pared morning losses and was trading 1 paisa higher to 68 against the American currency in late morning deals amid bouts of dollar-selling by banks and exporters, despite strength in the greenback. READ MORE

2:00 PM

Market Check

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	35586.46	35622.14	-35.68	-0.10
	14789.07	14813.40	-24.33	-0.16
	15961.42	16001.20	-39.78	-0.25
	16842.77	16961.16	-118.39	-0.70
	4204.37	4207.19	-2.82	-0.07

1:45 PM

HPCL, BPCL, IOCL gain on fall in global oil prices

 

Shares of oil marketing companies (OMCs) like Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) were trading higher by up to 6% in otherwise subdued market after Brent crude prices fell in the international market. READ MORE

1:30 PM

Bitcoin has shortcomings, could break internet: Global banking body

 

The Bank for International Settlements just told the cryptocurrency world it’s not ready for prime time -- and as far as mainstream financial services go, may never be.

 

In a withering 24-page article released Sunday as part of its annual economic report, the BIS said Bitcoin and its ilk suffered from “a range of shortcomings” that would prevent cryptocurrencies from ever fulfilling the lofty expectations that prompted an explosion of interest -- and investment -- in the would-be asset class. READ MORE

1:16 PM

Mid- and small-caps continue to give positive returns despite sharp fall

 

It has been turbulent times for mid- and small-cap stocks. With the Nifty Mid-cap 100 and Nifty Small-cap 100 slipping as much as 11 per cent and 16.1 per cent since the beginning of 2018, there is palpable fear among many investors about the prospects of their holdings in such stocks and mutual fund schemes.

 

These sharp falls have been for several reasons. For one, the valuations of many of these stocks have risen very sharply. READ MORE

1:01 PM

ICICI Bank up 4% on reports that board is mulling top management reshuffle

 

ICICI Bank was trading 4% higher at Rs 294 on the BSE in otherwise range-bound market after the media reports suggested that the board of private sector lender is discussing a reshuffle of its top management.

 

The BSE said the Exchange has sought clarification from ICICI Bank Ltd with respect to news article appearing on The Economic Times - June 18, 2018 titled "ICICI board mulls reshuffle of top management - ICICI Prudential Life chief Bakhshi may be named ICICI Bank interim Chief Executive Officer (CEO)". READ MORE

12:45 PM

Adani Green Energy gains 5% on debut

 

Adani Green Energy, the renewable power arm for Adani Enterprises, has locked in upper circuit of 5% at Rs 29.40 on the BSE on first day of its listing. The stock recovered 9% from its intra-day low of Rs 27, after opening at Rs 28 on the BSE.

 

On the National Stock Exchange (NSE), the stock trading at Rs 31, after opening at Rs 30. The stock hit a high of Rs 31.50 and a low of Rs 28.50 so far. READ MORE

12:30 PM

Most of the BSE-500 stocks trade 20% or lower than their 52-week highs

 

The BSE benchmark Sensex ended the week with its longest stretch of weekly gains since April. But, most of the BSE-500 stocks still trade 20 per cent or lower than their 52-week highs.

 

While large-caps have more or less remained resilient during the recent market-wide sell-off, small-caps had to bear the brunt. In fact, this was the first week the BSE SmallCap index closed in the green after six weeks of back-to-back selling. Brokerages say that recent headwinds on account of rising crude oil prices, a weaker rupee, higher interest rates and a surge in bad loans. READ MORE

12:16 PM

Vedanta hits 52-week low; stock down 26% in three months

 

Shares of Vedanta hit a 52-week low of Rs 229, down 4% on the BSE in intra-day trade, after the media reports suggested that the company is facing Sterlie-like crisis in Orissa.

 

The BSE said the Exchange has sought clarification from Vedanta with respect to news article appearing on The Free Press Journal - June 14, 2018 titled "Vedanta faces another Sterlite like crisis in Orissa". The reply is awaited. READ MORE

12:00 PM

Markets at noon

INDEX	LATEST	PREVIOUS	CHANGE	CHANGE(%)
	35602.32	35622.14	-19.82	-0.06
	14790.41	14813.40	-22.99	-0.16
	15975.58	16001.20	-25.62	-0.16
	16854.54	16961.16	-106.62	-0.63
	4204.15	4207.19	-3.04	-0.07

11:50 AM

Oil slumps near $64 as OPEC clash looms, US-China trade war escalates

Oil fell near $64 a barrel as Saudi Arabia and Russia prepared for a clash with allied crude producers over whether to lift output and as China and the US exchanged threats over trade. Futures in New York dropped as much as 2.3 per cent, on course for the lowest close since April 9 after a 2.7 per cent decline Friday. Iran says Venezuela and Iraq will join in blocking a proposal to increase production that’s backed by Saudi Arabia and Russia when OPEC and its allies meet in Vienna this week. China said it would impose tariffs on a variety of US goods, including crude and gasoline, in response to President Donald Trump’s $50 billion levy on Chinese imports READ MORE

11:44 AM

DoT may clear Voda-Idea merger today; seeks Rs 21 bn bank guarantee

The telecom department is likely to approve the merger of Vodafone India and Idea Cellular today that will create the country's largest mobile service operator with proposed name of Vodafone Idea Ltd. "DoT is expected to clear the Vodafone-Idea merger on Monday. The certificate will be handed to them," said an official source. READ MORE

11:40 AM

Gold prices inched higher on Monday after falling to a 5-1/2-month low in the previous session, as a trade dispute between the world's two largest economies triggered safe-haven buying, but a strong dollar put a cap on the upside. Spot gold edged up 0.1 per cent to $1,279.70 per ounce by 0255 GMT. The yellow metal touched its weakest since late December at $1,275.01 an ounce on Friday. CLICK HERE FOR MORE

11:30 AM

BS Special Vajpayee's NDA versus Modi's NDA: What it means to stock markets?

 

Since the NDA formed a government under the leadership of Prime Minister Narendra Modi in 2014, the Sensex has jumped over 54 per cent from May that year to above 35,000 in 2018. The performance of the domestic stock markets during the present NDA government seems far superior to that of the previous one. In contrast to the 54 per cent jump so far, the Sensex almost stagnated around 5,000 points during the previous NDA government. It was at 5,033 in mid-October 1999 and fell down marginally to 5,006 in May 2004 when the government ended its term. READ MORE

11:15 AM

DMart's lower same store sales, margins keep analysts on the sidelines

 

The Avenue Supermarts stock is a favourite of investors. So much so that its market capitalisation is higher than the next ten listed multi-brand retailers. While investor demand has led to the doubling of the stock since its listing, barring a few names such as Goldman Sachs and HSBC, most brokerages are now cautious. Of the 15 analysts who track the stock as per Bloomberg, about two-thirds have a sell or a hold rating. Their average target price is Rs 1,336 for the stock trading at Rs 1,538. READ MORE