Sensex, Nifty End At Fresh Record High Led By Reliance, TCS

Indian stocks climbed, with key equity benchmarks settling at fresh lifetime high led by index heavyweights Reliance Industries Ltd. and Tata Consultancy Ltd.

The S&P BSE Sensex gained nearly 0.7 percent to 32,245 while the NSE Nifty 50 Index rose close to 0.7 percent as well to 9,966. The 51-share index touched an all-time high of 9,982 during the session.

The market breadth, however, was skewed in favour of the sellers at 2:1.

“Earnings will take the centrestage,” Nipun Mehta, founder and CEO, Blue Ocean Capital said. “Investors need to be cautious as while the run up remains intact, valuations are looking a bit frothy.” Mehta advised investors to closely follow the management commentary for investment cues for the next couple of quarters.

Shares of the roads developer gained as much as 5.3 percent, the most since April 18, after its June-quarter ended earnings beat street estimates.

• Net income Rs 238 crore versus estimate of Rs 214 crore
• Revenue Rs 1,820 crore versus estimate of Rs 1,530 crore
• To transfer Amritsar project to IRB InvIT Fund (+0.4%)
• Sets Rs 2.50 per share dividend

HDFC Bank Ltd. reported a 20.2 percent growth in its net profit during the April-June quarter. Net interest income for the bank grew 15.1 percent to Rs 9,371 crore.

The private lenders asset quality remained stabe. Gross NPA stood at 1.24 percent compared to 1.05 percent during the quarter. 60 percent of the increase in Gross NPAs were attributed to the farm loan waivers announced in various states, the bank said in a statement.

The stock recovered from the day's low, to trade 1.3 percent higher at Rs 1,725.

For a complete lowdown on HDFC Bank’s Q1 performance, click here

Shares of the technology company fell as much as 4 percent, most since a month, to Rs 632 after its April-June quarter earnings saw its net profit grow by a marginal 2.7 percent.

While its EBITDA declined 20 percent, its EBITDA margin contracted to 14.3 percent.

While CLSA maintained its 'Buy' rating on the stock, cutting its price target to Rs 820 from Rs 870, Emkay downgraded the stock to 'Reduce' with a price target of Rs 653.

Persistent Systems has underpeformed the S&P BSE Sensex index on a year-to-date basis, having gained 5.3 percent, in comparison to the index's gain of 22 percent.

The company recently announced that its Germany-based unit is set to acquire Parx Werk, Switzerland. The acquisition is expected to be completed within 3-4 weeks.

Shares of the debt-ridden company gained over 5 percent to Rs 31 after the auto component manufacturer entered into an arrangement with the Liberty Group to sell plants of its U.K. unit.

The stock rose more than 11 times the country's benchmark index, having gained the most since over a month. The company reported on Saturday, a wider June quarter net loss at Rs 889.58 crore, compared to the corresponding period last year.

Shares of the Mukesh Ambani-led firm rose as much as 2.4 percent to Rs 1,622, a new 52-week high for the stock, after the oil and gas major announced a 1:1 bonus issue.

Brokerage house CLSA maintained its ‘Buy’ rating on the stock while increasing is target price to Rs 1,920.

From CLSA’s research note:

• Jio to breakeven by FY19
• Expect strong demand for the 4G feature phone and the start of key projects

Shares of the private sector lender gained as much as 10 percent, the most since May 16, to Rs 91.9, after its net profit for the April-June period surged 32 percent.

The bank's core income grew 13 percent on a year-on-year. Its asset quality showed signs of improvement with gross bad loans declining to 10.79 percent from 11.2 percent on a sequential basis. Net bad loans too declined to 4.65 percent from 4.87 percent during the January-March quarter.

The stock has gained almost 50 percent so far this year and was trading at 26.9 time its 30-day average volume today.

Shares of the drug maker fell as much as 5.72 percent, the most since March 21, after its net profit for the April-June quarter fell 42 percent over the previous year.

While EBITDA fell 39 percent to Rs 245 crore, EBITDA margin contracted to 29.8 percent from 39.7 percent. The management has also cut its revenue guidance for the year. Revenue is likely to decline 10 percent this year, the management said. The company had given a guidance of revenue growing 5 percent at the start of the year.

Bloomberg data showed that 41 percent of analysts covering the company have changed their price targets over the past month (6 up, 1 down, 10 unchanged). The stock has fallen 12 percent so far this year, compared a decline of 2.5 percent in the NSE Nifty Pharma index.

Shares of the sponge iron maker gained as much as 5 percent to a two-month high of Rs 895, after it posted an over three-fold jump in June quarter net profit.

Besides that, the Tata group company’s board gave an in-principle nod to set up a 1.5 MTPA steel plant in Odisha's Keonjhar district. The plant will be set up in phases at Beleipada, Keonjhar District, Odisha, subject to the evaluation of financial viability of the project, the company said in an exchange filing.

The stock is currently trading at 39 times its 30-day average volume. The consensus price target of analysts tracked by Bloomberg was at Rs 977, which implies at 10.8 percent upside from current market price.

Shares of the pharmaceutical company gained as much as 3.51 percent to Rs 1,175, snapping a two-day losing streak, after the U.S. FDA completed the inspection of its manufacturing facility in Goa without any observations.

The stock has lost 22.46 percent so far this year, compared to the 2.3 percent decline in the NSE Nifty Pharma, making it the worst performing member of the sector index.

Indian shares climbed as losses select automakers and metal producers were countered by gains in drugmakers, lenders and technology companies.

The S&P BSE Sensex gained 0.3 percent to 32,135, while the NSE Nifty 50 index rose 0.2 percent to 9,939. Both the indices touched a new intraday record high. The market breadth was skewed in favour of the buyers. About 942 stocks advanced, 572 declined on the NSE.

Disclaimer: Stock recommendations and comments presented on BloombergQuint.com are solely those of the analysts and experts quoted. They do not represent the opinions of BloombergQuint.com on whether to buy, sell or hold shares of a particular stock.

Liquidity is the big theme this week.

The Reserve Bank of India, in line with its intentions, has announced an open market operation to sell up to Rs 10,000 crore of bonds on August 10.

This is a part of the routine liquidity mop up, RBI Deputy Governor Viral Acharya said over the weekend. He also observed that Indian households are moving towards financial assets post the demonetization exercise.

It is said that RBI plans on sending a proposal for a new liquidity tool to the government as it grapples with strong foreign inflows. Overseas investors have bought Rs 1.3 lakh crore ($20.2 billion) worth of local bonds so far in 2017, according to depository data.

Stocks have seen $8.5 billion worth of inflows. Traders say the central bank has been regularly intervening in the forex market to mop up inflows. Besides this, the forex market will also look for cues from the big Federal Open Market Committee (FOMC) meeting due this week.

So, watch this space for more updates.

For now, the Dollar Index is flat while the South Korean won is strong. Ergo, expect a higher opening for the rupee and trade between 64.25-64.35 a dollar in the day.

• HPCL upgraded to buy at Goldman Sachs; price target raised to Rs 450
• CLSA maintained ‘Buy’ on Persistent Systems but cuts price target to Rs 820 from Rs 870 earlier

Reliance Industries

• CLSA maintained 'Buy' rating on the stock and hiked price target to Rs 1,920 from Rs 1,710
• Kotak Securities downgraded the rating to 'Reduce' with the price target of Rs 1,500
• BOB Capital initiates coverage with a ‘Buy’ rating; price target Rs 1,815

• Ambuja Cements
• Bharti Infratel
• HDFC Bank
• Indiabulls Housing Finance
• Zee Entertainment

Other Earnings Today

• Delta Corp
• GIC housing Finance
• Hudco
• IG Petrochemicals
• Indiabulls Real Estate
• IRB Infrastructure Developers
• Just Dial
• L&T Infotech
• M&M Financial
• Zee Learn
• Excel Crop Care
• Flexituff International
• Gulf Oil
• Info Edge
• JM Financial
• Navkar Corp
• NELCO
• Patel Engineering
• Petron Engineering Construction
• Swaraj Engines
• Tata Communications
• Texmaco Infrastructure
• Texmaco Rail
• Vinyl Chemicals
• Wendt India

• Nifty 10,000 call adds 67.8 lakh shares in open interest
• Nifty 9,800 put open interest at 64.6 lakh shares indicating support
• F&O data indicates rangebound trade for the Nifty
• Put writers aggressive at 9,900-10,000 levels as Nifty rises
• Heavy resistance for Nifty Bank at 24,500 level with open interest concentration of 10.8 lakh shares
• Nifty Put-Call ratio rises to 1.41 from 1.34
• Nifty Bank Put-Call ratio falls to 0.95 from 0.99

• Lupin: The company’s Goa facility received zero observations for the U.S. FDA
• Persistent Systems: German unit of the company to acquire Parx Werk, Switzerland. Acquisition expected to be completed within 3-4 weeks
• Amtek Auto: Entered into an arrangement to sell U.K. units to Liberty Group
• Just Dial: Board meet today to consider bonus, buyback
• Tata Sponge: Board approved setting up a 1.5 MTPA steel plant at Odisha
• Dishman Carbogen: Received in-principle approval from NSE and BSE for listing of its shares
• Quess Corp: Shareholders approve further capital raising
• Electrosteel Steels: National Company Law Appellate Tribunal initiates corporate insolvency resolution process against the company

For the complete list of stocks to watch, click HERE

• Nomura India fund soars to $3.6 billion as Japanese bet on Modi
• Creating good jobs remains a challenge in India, says Panagariya
• Libya, Nigeria oil output caps are said to be ruled out for now
• Low sales push Amtek Auto deeper into the red; loss widens in Q1
• Telecom companies may see earnings pressure ease in Q1
• ONGC to not make open offer post-HPCL acquisition: Government official
• GST a huge step towards a federal tax structure in India, says Kenneth Rogoff

Good Morning!

The Singapore traded SGX Nifty, an early indicator of Nifty’s performance in India, fell 0.2 percent to 9,894.

Stocks in Japan, Australia and South Korea started the week lower while the so-called haven currency yen climbed for a fifth day.

Results at industry bellwethers from Amazon.com Inc. to GlaxoSmithKline Plc and Credit Suisse Group AG are due this week. The Fed is expected to stand pat, with investors looking to the accompanying statement for clues on how officials plan to start reducing the balance sheet.

Oil held losses below $46 a barrel before an OPEC committee meets to discuss the progress of supply cuts enacted to drain global glut. Limiting output from Nigeria and Libya, which are exempt from the curbs, won’t be on the agenda of the OPEC meet, according to a Bloomberg report quoting sources.

Gold rose 0.1 percent to $1,256.22 an ounce having climbed the past two weeks. The yield on the 10-year Treasury note slipped one basis point to 2.23 percent.