MARKET WRAP: Indices at new high; Sensex up 442 pts, Nifty hits 11,700

Benchmark indices ended at an all-time closing high on Monday, boosted by gains in bank stocks

4:18 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

It's been an exceptional start of the expiry week as Nifty gained over a percent and settled closer to 11,700. It opened gap up in line with from other global indices, mainly in reaction to the latest statement from the US Fed wherein they've hinted that further rate hikes would be gradual. Besides, recovery in rupee combined with encouraging data of foreign fund flow added to positivity. Almost all the sectoral indices, barring media and realty, contributed to the rally however broader market showed mixed trend. 

 

Markets are steadily moving higher despite mixed cues and this clearly indicates upbeat sentiment among the participants. However, we feel participants, especially traders, should gradually reduce their positions on every rise in Nifty from hereon and focus more on stocks. Banking, auto and pharma are still our top picks for short term trades

3:39 PM

Nifty PSU Bank index gains over 2%; top gainers

3:38 PM

Sectoral trend

3:35 PM

Top Sensex gainers and losers

3:33 PM

Markets at Close

The S&P BSE Sensex ended the day at all-time closing high of 38,694, up 442 points while the broader Nifty50 index settled at new closing high of 11,691, up 135 points

3:25 PM

Future Group shares gain on talks of global interest

 

Shares of Future Group companies have rallied by up to 14% on the BSE after the media reported that Google, Paytm Mall may team up to shop for Future Retail stake.

 

“The Company evaluates various possibilities, including in relation to business association with third parties, which is always a subject matter of further feasibility studies and the need for requisite consents in accordance to the applicable laws. At present, since there has been no such decision taken by the Board of Directors of the Company there is no disclosure obligation that would have otherwise triggered,” Future Retail said in a BSE filing on clarification on news report. READ MORE

3:12 PM

Assets under management of top India-focused offshore equity funds shrink

 

Assets under management (AUM) of most of the top India-focused offshore equity funds have seen a decline in the past one year despite the benchmark S&P BSE Sensex rising 15 per cent.

 

The total AUM of top 10 funds shrunk by 1.4 per cent to $26 billion for the one-year period ending June 2018, data provided by fund Morningstar showed. The drop in assets is on the back of $1.2 billion of outflows from these funds. READ MORE

2:59 PM

F&O watch

Rollover activity in the Nifty seems to be on the higher side into the September series after exhibiting significant resilience at highs during the series as the Nifty continues to trade near 11500 despite multiple headwinds. The Nifty near month futures have almost 29.5 million shares, significantly high compared to last six months. At the same time, with PCR Ratio for the Nifty testing 1.70 levels, consolidation above11500 seems more likely in the settlement week.

The roll spread in the Nifty is likely to inch up due to rollover of long positions during the August series. We believe current spread of 38 points may move beyond 45 points towards settlement. On the other hand, the Bank Nifty continued to see closure of positions in the near month series with roll cost of just 100 points

2:51 PM

Centrum on Siyaral Silk Mills

Given the current quarter performance, we have marginally lowered our estimates with revenue and PAT CAGR of 14.1% and 14.5%, respectively over FY18-20E (vs 14.5% and 14.6% earlier). Currently, SSML trades at a P/E of 17.3x on FY20E basis.

We maintain our view that SSML is likely to do well over the medium to long term, however on a quarterly basis there may be variations on the sales and profit front depending upon the market conditions and demand scenario. We value the company at 21x FY20E EPS, giving a target price of Rs 674.

2:45 PM

Sebi is working on a special policy to ensure data privacy for investors

 

The Securities and Exchange Board of India (Sebi) will be coming up with a special policy to ensure data privacy for investors. Sources say the regulator is working on standard procedures for sharing and storing of investor data among market intermediaries and third parties.

 

The move comes at a time when the clamour for strict data privacy laws is growing louder with other regulatory agencies, including the Reserve Bank of India, making efforts to address concerns. READ MORE

2:30 PM

Rupee's weakness worrying you? Beat depreciation with international funds

 

The rupee touched an all-time low against the dollar recently and is now trading at the 70.11 mark. It has depreciated 8.90 per cent against the dollar year-to-date.

 

One way how investors can protect themselves against currency depreciation is by investing in international funds offered by mutual fund houses in India. Diversify geographically Investing in international funds makes your portfolio less dependent on the Indian market. READ MORE

2:15 PM

RIL, TCS, Bajaj Finance hit new highs; rally over 60% in one year

 

Shares of three Nifty 50 companies - Reliance Industries (RIL), Tata Consultancy Services (TCS) and Bajaj Finance – hit their respective new highs on the National Stock Exchange (NSE) on Monday, rallied more than 60% each in past one year.

 

Besides these three companies, Dabur India, Havells India, Indiabulls Ventures, Infibeam Avenues, JSW Steel, Merck, MphasiS, Page Industries, Pfizer, RBL Bank, Sunteck Realty, Torrent Pharmaceuticals and VIP Industries were total 17 stocks from the Nifty 500 index touched new highs today. READ MORE

2:01 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	38,718.13	+466.33	+1.22
S&P BSE SENSEX 50	12,243.17	+140.25	+1.16
S&P BSE SENSEX Next 50	35,191.64	+321.18	+0.92
S&P BSE 100	12,003.34	+133.34	+1.12
S&P BSE Bharat 22 Index	3,733.08	+62.09	+1.69

1:45 PM

PSBs in focus; SBI, Bank of Baroda, Canara Bank up over 2%

 

Shares of public sector banks (PSBs) are in focus with Nifty PSU Bank index gaining more than 2% on Monday, ahead of the Allahabad Court verdict on stressed power assets as the Reserve Bank of India (RBI) deadline ends today.

 

The RBI’s February 12 circular said all stressed assets will either get resolved by August 27 or get taken to the NCLT. READ MORE

1:30 PM

Don't give up on gold yet, it can still be good bet during uncertain times

 

Yash Singh, head of human resource at a leading corporate house, is more than a tad disappointed in gold. He has been diligently buying one 10 gram gold coin every month for over five years. “It has become a habit now,” says Singh.

 

But in the last few months, his faith in the yellow metal has been shaken. Nowadays, he is constantly seeking advice from his financial planner and other friends on whether he should continue this habit. READ MORE

1:15 PM

Top contributors to today's Sensex rise

COMPANY	LATEST	CHG(RS)	CHG(%)	FREE FLOAT MKT CAP (RS CR)	CONTRIBUTION (POINTS)
ICICI BANK	340.55	10.45	3.17	212391.28	63.34
RELIANCE INDS.	1292.70	14.65	1.15	437442.77	47.24
INFOSYS	1402.80	22.85	1.66	262225.54	40.92
ITC	313.55	3.20	1.03	379598.40	36.81
ST BK OF INDIA	309.60	9.30	3.10	112562.41	32.85
KOTAK MAH. BANK	1275.00	20.20	1.61	167466.35	25.40

1:00 PM

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12:54 PM

UBS on Britannia Industries

 

The timing and nature of a demand recovery has been a central debate in the Indian consumer sector in FY15-FY18. Our analysis of UBS Evidence Lab data suggests early signs of a recovery. We believe it is unlikely to be limited to just personal care, home care and discretionary categories. 

 

In our view, packaged food could see an upswing as domestic consumption, especially in rural India, recovers. We raise our FY19/FY20 revenue estimates 3.2%/7.2% on the basis of volume growth and inflation-led pricing (given recent MSP hikes). We increase our EPS estimates for FY19/FY20 by 5.6%/11.1%. We maintain our Buy rating and raise our price target to Rs 7,700.

12:53 PM

Edelweiss on PVR

We reiterate our positive stance on PVR owing to: (1) strategic acquisition of SPI Cinemas (SPI) - set to reap manifold benefits; and (2) limited overhang of F&B controls - till now courts have adopted favourable stance on the issue. As SPI is the most popular screen brand in South India, PVR will draw operational synergies and scale up ad revenues, while reducing content risk.

The acquisition also clears the decks for PVR to emerge as the No. 1 player in key South Indian cities as well as undertake seamless expansion (100 plus screens post FY19). We expect the deal to be earnings accretive in the first year itself. Hence, we raise our FY19/20E EPS by 2.70%/4.08% and also revise our target multiple to 30x (from 28x) FY20E EPS to arrive at a revised target price of Rs 1,608 (earlier Rs 1,442). Maintain ‘BUY’.

12:51 PM

IDFC Securities on Apollo Hospitals

Apollo Standalone Pharmacy (ASAP), India’s largest organized pharmacy retail business with 3,000 stores, has been Apollo Hospitals’ (Apollo) standout business since last few years. Relatively slower growth in Apollo’s healthcare services have overshadowed ASAP’s consistent performance (23% revenue and 37% EBITDA CAGR over FY15-18).

The ASAP business is at now an inflection point with FY18 revenue/EBITDA of Rs32.7bn/Rs1.5bn, respectively, and RoCE of 15%. We estimate 18% CAGR in ASAP revenues over FY18-21E and value this business at Rs53.7bn (20x FY21E EV/EBITDA) which implies that Apollo’s ex-SAP business is currently trading at 13.5x EV/EBITDA (FY21E). We maintain Outperformer on Apollo with a target price of Rs1,483 and Apollo is our top pick in healthcare services space.

12:45 PM

Top BSE500 gainers

COMPANY	PRICE( )	CHG( )	CHG(%)	VOLUME
ZYDUS WELLNESS	1675.00	194.40	13.13	20378
JINDAL SAW	88.90	7.85	9.69	281058
MOIL	189.90	16.00	9.20	288517
ADANI TRANSMISSI	183.70	14.30	8.44	152628
RURAL ELEC.CORP.	118.65	7.30	6.56	632986

12:30 PM

Pricing pressures, regulatory worries for Dr Lal Pathlabs and Thyrocare

 

A muted June quarter performance on the back of pricing pressures coupled with worries on regulatory action could hamper the near-term outlook for diagnostic companies. The largest listed diagnostic players, Dr Lal Pathlabs and Thyrocare Technologies have indicated that competitive intensity in the sector is high.

 

Given the focus on higher volumes, some of the pressures on pricing could continue to hamper the profitability of the companies. Disappointing June quarter This was reflected in the June quarter performance both on volumes and margins. READ MORE

12:20 PM

This PSU stock zoomed over 100% in one month

 

Hindustan Organic Chemicals (HOCL) was locked in upper circuit of 10% at Rs 39.60 on the BSE on back of heavy volumes.

 

HOCL had posted a robust set of numbers for the quarter ended June 2018 (Q1FY19). The company reported a net profit of Rs 402 million in Q1FY19, on back of strong growth in operational revenue. It posted a net loss of Rs 498 million in June 2018 quarter and loss of Rs 896 million in March 2018 quarter. READ MORE

12:11 PM

SECTOR WATCH Aviation

For India’s domestic airlines, the Jan-July’18 span brought a ~22% yoy growth in passengers (PAX), at ~80mn travelers. Even in the off-season month of July’18, PAX growth was in line with the YTD trend, with domestic carriers achieving ~21% yoy growth. Load factor for most players has delivered yoy improvement. Among major carriers, Indigo PAX grew ~32% yoy during July’18 which took its market share to 42.1% (+80bps qoq).

Spicejet continues to report 90%+ PLF, highest in its peer set. Also, Air India/Jet Airways show ~140bps/~440bps PLF improvement on qoq basis to 82.3%/83.9% respectively. Although, PAX was robust, pressure on tariffs and the declining sector profitability due to cut-throat competition and crude price rise remain a key concern

(Source: IIFL report)

12:03 PM

Edelweiss on Dabur

Dabur remains amongst our top picks in staples. And, our recent interaction with the top management reaffirms our confidence in the company’s ability to sustain double digit volume growth in FY19. Key strategic initiatives that bolster our optimism are: (i) focus on innovation & improving market leadership; (ii) aggressive ad spends; and (iii) enhancing direct distribution (Project Buniyaad).

In our view, Dabur is best placed to regain share from some of the herbal companies that are facing a slowdown. This coupled with improving rural economy bodes well for Dabur. Hence, we raise our target multiple to 50x (45x earlier) and arrive at revised TP of INR560 (INR505 earlier). Maintain ‘BUY’

12:01 PM

Markets at noon

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	38,641.93	+390.13	+1.02
S&P BSE SENSEX 50	12,218.64	+115.72	+0.96
S&P BSE SENSEX Next 50	35,094.42	+223.96	+0.64
S&P BSE 100	11,977.86	+107.86	+0.91
S&P BSE Bharat 22 Index	3,722.06	+51.07	+1.39

11:45 AM

Product mix to aid SAIL's realisations; analysts remain positive on stock

 

With much-delayed expansions getting onstream, SAIL has been posting a consistent improvement in performance over the last few quarters and the June quarter was no different. Its operating profit per tonne at Rs 7,877 is a significant improvement over Rs 86 in the year-ago quarter and reflects a 13 per cent rise on a sequential basis.

 

These levels are the highest since FY10. While volume growth remains strong led by expansions and robust demand, it is the improved realisations and cost controls that have driven profitabilty. READ MORE

11:30 AM

Nifty Bank up 1%, top gainers in the pack

COMPANY	LATEST	PREV CLOSE	GAIN( )	GAIN(%)	VOLUME
RBL BANK	627.10	609.70	17.40	2.85	2150180
YES BANK	383.20	374.20	9.00	2.41	3732191
KOTAK MAH. BANK	1278.60	1254.50	24.10	1.92	843297
IDFC BANK	47.75	46.85	0.90	1.92	3009922
ICICI BANK	336.05	330.15	5.90	1.79	5679471

11:15 AM

LIC Housing Finance falls 7% post June quarter results

 

Shares of LIC Housing Finance dipped 7% to Rs 531 on the BSE in intra-day trade in otherwise strong market after the company reported disappointing April-June quarter (Q1FY19) results.

 

LIC Housing Finance reported 18% year on year (YoY) growth in net profit at Rs 4.79 billion in Q1FY19 on account of lower provisions under the IndAS framework. Net interest income grew 6.6% YoY at Rs 9.94 billion. READ MORE

11:00 AM

Pharma, IT, FMCG sectors are back on investor's radar

 

With the markets at an all-time high amid global and local uncertainties that lie ahead, investors seem to be gradually allocating more money towards classical defensive plays such as pharmaceuticals (pharma), information technology (IT) and fast moving consumer goods stocks.

 

Thus far in August, the Nifty FMCG and Nifty IT indices have gained around 5 per cent each, as compared to 2 per cent rise in the Nifty 50 index. The Nifty Pharma index, on the other hand, moved up nearly 10 per cent during this period to hit its 52-week high of 10,142 last week. READ MORE