MARKET WRAP: Sensex gains 358 pts, Nifty tops 11,050 mark led by metals, IT

All that happened in the markets today

3:50 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

The bulls continued to dominate, as the equity benchmark indices registered fifth straight session of gains, largely on hopes of a dovish RBI monetary policy tomorrow. We remain cautiously optimistic on the markets in the near term. Tomorrow’s RBI monetary policy will provide further direction to the markets.

The recent softening in CPI inflation, disappointing IIP numbers and US Fed’s signal to slow the pace of interest rate hikes have built-in expectations of a rate cut or a change in policy stance in tomorrow’s RBI monetary policy meeting.

We feel the commentary on the outlook of interest rates will hold significance. Further, with more results scheduled in the next couple of weeks, stock specific volatility will remain high. Globally, crude oil price and INR-USD movement would continue to remain on market radar. With indices likely to exhibit high volatility in near term, traders should avoid risky leveraged positions

3:37 PM

Sectoral gainers of the day on NSE

3:35 PM

Gainers and losers of the day on S&P BSE Sensex

3:33 PM

Market at close

The S&P BSE Sensex ended at 36,975, up 358 points or 0.98 per cent, while the broader Nifty50 index settled at 11,062, up 128 points or 1.17 per cent.

3:15 PM

Reliance Industries nears record high; gains 20% in 17 trading days

Shares of Reliance Industries (RIL) were trading2 per cent higher at Rs 1,317 on Wednesday, their all-time high level of Rs 1,329 touched on August 29 last year on the BSE in intra-day trade. In the past 17 trading days, RIL has outperformed the market by surging 20 per cent from Rs 1,096 on January 14, 2019, after the company reported a better-than-expected consolidated net profit of Rs 10,251 crore in October-December quarter (Q3FY19). In comparison, the S&P BSE Sensex was up 3 per cent during the same period. READ MORE

3:02 PM

WEB EXCLUSIVE Nifty50 reclaims 11,000 levels. Will the up move sustain?

The Nifty50 index reclaimed 11,000 levels in intra-day trade on Wednesday, a feat it last achieved on October 1, 2018. The recent rally has been on account of positive news-flow and better-than-expected financial performance in a handful of stocks that comprise the index. Sector-wise, stocks from the information technology (IT), private banks and select non-bank finance companies, besides heavyweights Reliance Industries, Larsen & Toubro (L&T), Hindustan Unilever (HUL) have been the major contributors. READ MORE

2:52 PM

SPECIAL REPORT :: Knight Frank Real Estate Sentiment Survey

The current sentiment score inched upwards and remains in the positive in last quarter of 2018. The slight improvement in the current score indicates that the dust has started to settle from the implementation of various structural reforms implemented in the second and third quarter of 2017. The score indicates that the stakeholders though positive but are in a wait and watch mode on the outcome of the long-term policy initiatives of the government.

On the other hand, the optimism regards the future of the real estate sector has come down by three points. Factors such as the looming uncertainty over the upcoming elections has reflected in the future sentiment score.

(Image source: Knight Frank Survey)

2:48 PM

Top gainers and losers on S&P BSE Sensex

2:33 PM

Stocks that hit 52-week high on NSE

Symbol	Security	New 52W/H	Prev. High	Prev. High Date	LTP	Prev. Close	Chng	% Chng
AXISBANK	Axis Bank Limited	734.50	731.60	05-Feb-2019	723.30	729.50	-6.20	-0.85
AXISGOLD	Axis Mutual Fund - Axis Gold ETF	2,930.00	2,930.00	05-Feb-2019	2,930.00	2921.90	8.10	0.28
DIVISLAB	Divi's Laboratories Limited	1,645.00	1,637.00	05-Feb-2019	1,636.85	1616.15	20.70	1.28
INFY	Infosys Limited	766.95	762.50	04-Feb-2019	762.50	754.85	7.65	1.01
LALPATHLAB	Dr. Lal Path Labs Ltd.	1,125.00	1,122.00	29-Aug-2018	1,087.30	1051.85	35.45	3.37
MAHASTEEL	Mahamaya Steel Industries Limited	109.45	107.95	05-Feb-2019	109.00	107.05	1.95	1.82
SEAMECLTD	Seamec Limited	349.95	314.00	25-Jul-2018	292.45	295.80	-3.35	-1.13
SPCENET	Spacenet Enterprises India Limited	1.00	1.00	04-Feb-2019	0.90	.95	-0.05	-5.26
TECHM	Tech Mahindra Limited	810.90	780.80	03-Oct-2018	807.40	751.00	56.40	7.51

2:22 PM

STOCK IMPACT

Adani Power down 5%

2:19 PM

NEWS ALERT

Adani Power reports Q3 net loss at Rs 1,180.78 crores vs net loss of Rs 1,313.74 crores year ago

2:12 PM

SoftBank Group unveils $5.5 billion stock buyback, third-quarter profit soars 60 per cent

Japan's SoftBank Group Corp announced a $5.5 billion share buyback on Wednesday as it reported a 60 per cent rise in quarterly operating profit buoyed by rising valuations for its technology investments.

 

SoftBank Group said it would repurchase 112 million shares worth 600 billion yen ($5.5 billion) in the next 11 months, or about 10.3 percent of its total outstanding shares, excluding treasury stock. READ MORE

2:02 PM

MARKET CHECK

1:51 PM

Asian equities receive biggest foreign inflows in a year in January

Foreigners were net buyers of Asian shares in January, data from seven exchanges showed, on hopes the U.S. Federal Reserve would go slow with its monetary tightening measures this year and the trade talks would unwind some tariffs, bolstering world trade.

 

Foreigners net bought stocks worth $5.9 billion last month, the highest since a $7.1 billion inflow in January 2018, data from South Korea, Taiwan, India, Thailand, the Philippines, Indonesia and Vietnam showed. READ MORE

1:38 PM

Top losers on BSE500

COMPANY	PRICE(rupees)	CHG(rupees)	CHG(%)	VOLUME
RELIANCE INFRA.	164.30	-62.90	-27.68	4526731
MEGHMANI ORGAN.	45.95	-4.00	-8.01	345663
TATA CHEMICALS	597.25	-49.70	-7.68	230307
RELIANCE CAPITAL	140.75	-11.40	-7.49	4057197
T.V. TODAY NETW.	330.25	-19.35	-5.53	2029

1:24 PM

Top gainers and losers on S&P BSE Sensex

1:06 PM

Reliance Securities on Apollo Tyres

Rating: BUY

CMP: Rs 203

Target Price: Rs 250

 

Looking ahead, we expect ATL’s performance to improve owing to steady ramp-up in Hungarian operations and market share gain across both the geographies. In view of market share gain, we increase our revenue estimates by 2%/4% and reduce our EBIDTA estimates by 6%/4% assuming margin pressure for FY20E/FY21E. Factoring in higher depreciation for higher capex and interest expenses for increasing debt level, we cut our EPS estimates by 11%/7% for FY20E/ FY21E. Considering ATL’s outperformance in tyre industry and improving market share, we maintain its P/E valuation multiple at 12x. Expecting ATL’s earnings to clock 19% CAGR over FY19-FY21E and valuing it at 12xFY21E EPS, we maintain our BUY recommendation on the stock with a revised Target Price of Rs 250 (from Rs 270 earlier).

1:04 PM

Reliance Securities on JK Cement

Rating: BUY

CMP: Rs Rs 692

Target Price: Rs 985

 

We expect JK Cement’s grey cement business to improve following commissioning of new kiln at Mangrol, which may warrant a further re-rating of the stock. We cut our EBITDA estimate by 4% both for FY20E and FY21E to factor in dismal realisation. At CMP, the stock trades at 8.4x7.1x EBITDA of FY20E/FY21E, respectively, which is attractive, in our view. We maintain our BUY recommendation on the stock with a revised Target Price of Rs 985 (9x FY21 EBITDA)

12:56 PM

WEB EXCLUSIVE Retail investors' wealth erodes as negative news-flow dents sentiment

Retail investors have burnt their fingers and have seen their wealth erode over the past six months. An analysis of the shareholding pattern of 206 companies from the S&P BSE All-cap index where retail investors have increased their stake over 1 percentage points in past six months shows up to 86 per cent fall in stock prices during the period. The S&P BSE All-cap index accounted for 97 per cent market capitalisation of companies listed on the Bombay Stock Exchange (BSE). READ MORE

12:37 PM

SRF rallies 13% in two sessions on strong Q3 earnings

Shares of SRF rallied 10 per cent to Rs 2,222 apiece on Wednesday, extending its Tuesday’s 3 per cent gain on BSE, after the company reported a strong set of numbers for the quarter ended December 2018 (Q3FY19). The company posted growth of 26 per cent year-on-year (YoY) in consolidated net profit at Rs 166 crore in Q3FY19 on back of higher revenue. The operational revenue grew 41 per cent to Rs 1,964 crore from Rs 1,397 crore in the corresponding quarter of the previous year. EBITDA (earnings before interest, taxation, depreciation and ammortisation) margin expanded 30bp YoY to 16.9 per cent in 3QFY19. READ MORE

12:18 PM

Shares of Dish TV are trading over 9% higher

12:10 PM

SPECIAL REPORT Ritika Mankar Mukherjee, economist, Ambit Capital

The economy’s transition from being a high inflation economy to a low inflation one and the corporate landscape’s transition from being driven by political connectivity to being driven by sustainable competitive advantages are likely to spawn a new generation of winners and losers in the Indian stock market. This is likely to mean that large companies and sector leaders are likely to be most prone to compression in profit margins as entry barriers are lowered for a rage of sector and/or competitive intensity rises.

We urge investors to SELL market leaders/stocks whose pricing power will weaken in this new world. On the other hand we urge investors to BUY stocks whose pricing power is likely to increase going forward 


 

12:09 PM

DLF shares fall 4% as company's Q3 profit drops 92% YoY

Shares of realty major DLF fell as much as to 4.6 per cent to Rs 152.10 apiece in the intra-day trade on the BSE on Wednesday after the company reported a 92 per cent year-on-year (YoY) drop in its consolidated net profit at Rs 335.15 crore for the third quarter of 2018-19 (Q3FY19). The real estate firm had reported a net profit of Rs 4,091.27 crore in the year-ago period (Q3FY18), the company said in a regulatory filing. READ MORE

11:59 AM

Market check

11:46 AM

ADAG stocks crash; RInfra tanks 27%, RCom falls below face value of Rs 5

Shares of Anil Dhirubhai Ambani Group (ADAG) companies continued to get hammered on Wednesday with Reliance Infrastructure tanking 27 per cent, while Reliance Communication (RCom) fell below its face value of Rs 5 on the BSE in intra-day trade. RInfra has tanked 27 per cent to Rs 162 on the BSE, on back of a nearly five-fold jump in trading volumes. A combined 32.55 million equity shares 12.6 per cent of the total equity of RInfra changed hands on the NSE and BSE till 10:44 am; the exchanges' data shows. READ MORE

11:38 AM

Top gainers on BSE500

COMPANY	PRICE(rupees)	CHG(rupees)	CHG(%)	VOLUME
RELIANCE NIP.LIF	150.90	13.70	9.99	33490
SRF	2171.80	150.15	7.43	48906
TECH MAHINDRA	796.50	46.50	6.20	336542
INTELLECT DESIGN	177.85	10.00	5.96	49240
ZEE ENTERTAINMEN	386.80	21.50	5.89	732413

11:30 AM

Edelweiss on Tech Mahindra

Tech Mahindra (TECHM) reported strong Q3FY19 numbers with 3.5% QoQ USD revenue growth (Street’s 1.9% estimate) and 50bps QoQ EBITDA margin improvement to 19.3% (Street’s 19.1% estimate). Revenue growth was well rounded across enterprise (up 4.1% QoQ) and telecom (up 2.5% QoQ) segments. 

 

Key highlights: 1) robust new deal wins (USD440mn versus USD550mn QoQ); 2) sustained revival in telecom business (2.5% QoQ USD growth); and 3) digital growth remains healthy (up 10% QoQ; ~33% of revenue). Spurt across businesses as well as geographies reaffirms our most bullish in a decade hypothesis and TECHM’s ability to leverage the same. Maintain ‘BUY’ with revised TP of INR1,002 (INR970 earlier) as we roll over to Q1FY21E

11:28 AM

Jefferies on Jubilant Foodworks

Corporate event full of confusion and indecisiveness poses a risk of de-rating in the stock in the near term. This risk increases all the more due to the fact that the stock has seen recent re-rating (up ~30% in the last 12 months) and current valuations are high at 43x FY20 P/E. However, we believe that in the medium term, earnings trajectory will remain the key to stock price. Operating performance of the company has been strong in the last 12 months and we expect strong operation execution to continue

11:16 AM

STOCK ALERT

Reliance Infra crashes over 25% despite reporting a 7.92 per cent rise in consolidated net profit to Rs 325.26 crore for the December 2018 quarter

11:07 AM

At 13 times its FY21 EPS, TechM stock is available at attractive valuations

After two quarters of weak performance, Tech Mahindra’s (TechM) December 2018 quarter (Q3) results beat the Street’s expectations on all fronts. Its revenue moved up 4.3 per cent sequentially in constant currency (CC) terms, versus analysts’ expectations of around 3 per cent, thanks to its key telecom segment.

 

Having over 40 per cent share in overall earnings, revenue for the telecom segment rose 2.6 per cent sequentially. How this segment pans out is what the Street is cautious about. READ MORE