Sensex, Nifty End Lower In Seesaw Trade; Midcaps Outperform

Indian stocks fell after posting five straight weekly advances as a decline in software exporters countered a rally in metals companies.

The S&P BSE Sensex declined 0.16 percent to 32,273 while the NSE Nifty 50 was little changed to 10,057. The market breadth was encouraging with buyers outnumbering the sellers by at least 3:1.

Tata Steel Ltd. led gainers, climbing 4.2 percent, as rebar surged in Chinese trading. Bharti Infratel Ltd., Infosys Ltd. and Tata Motors Ltd. DVR weighed the most on the benchmarks

Sixteen of the 19 sector gauges compiled by BSE Ltd. advanced, led by the S&P BSE Metal Index’s 1.15 percent gain to a record The S&P BSE Information Technology Index dropped 0.94 percent, the worst performer.

Shares of the pharmaceutical company rose as much as 3.9 percent, the most in over a month, to Rs 986. The drug maker’s net profit almost doubled year-on-year to Rs 93.7 crore in the April-June period, surpassing the analyst consensus estimate of Rs 89 crore.

Other Earnings Highlights

• Revenue up 30.9 percent to Rs 445.3 crore
• EBITDA up 77.3 percent to Rs 137 crore
• EBITDA margin expanded to 31.9 percent from 23.7 percent

Shares of the battery maker recovered after an initial knee-jerk reaction to its first quarter earnings.

The company reported a net profit of Rs 99.85 crore for the April-June period, compared to Rs 123 crore estimate of analysts tracked by Bloomberg. It clocked sales of Rs 1,670 crore versus an estimate of Rs 1,440 crore.

Shares of the water tank maker rose as much as 8.5 percent, the most since July 20, ahead of the listing of its demerged plastics unit listing.

Shares of Sintex Plastics Technology will be listed from August 8, BSE said in a notice on Friday. Sintex Plastics had issued 1 equity share for every 2 held in Sintex Industries, as part of demerger, the note said.

Shares of the white goods manufacturer gained as much as 7.2 percent, the most in over four months, after its April-June quarter earnings beat analyst estimates.

The company’s net profit came in at Rs 133 crore for the three-month period, compared to the Rs 125 crore estimate of analysts tracked by Bloomberg. It clocked sales of Rs 1,620 crore versus an estimate of Rs 1,520 crore.

The company’s board, meanwhile, approved an investment of $50 million in its Brazil unit. Whirlpool SA Brazil will issue redeemable non-convertible senior debt instruments for this purpose, it said in an exchange filing.

Key Highlights

• Gross margins down 200 basis points at 42 percent
• Changes in inventory hit gross margins
• Cost of raw materials up 15 percent at Rs 613 crore
• Raw material costs to revenue remains at 37.9 percent

Shares of the country’s second largest biscuit-maker gained as much as 5.8 percent to highest level since at least January 1991, after its first quarter revenue beat analyst estimates.

The company’s net profit declined 1.4 percent year-on-year to Rs 216 crore, compared to an estimate of Rs 217 crore. Its revenue gained little over 5 percent year-on-year to Rs 2,263.7 crore, versus an estimate of Rs 2,227 crore.

Key highlights from the Britannia press release:

• Growth in international business continues to be under pressure due to deteriorating geopolitical situation and currency fluctuations in geographies like Middle East and Africa.

• Growth in dairy business was also been subdued primarily due to focus on driving products with high profitability and reducing play in the less profitable commoditised products.
• On the commodity front, prices of key raw material continue to remain high with inflation in Q1 standing at around 6 percent.

Trading volume was 3.4 times its 3-month average. The company’s 14-day relative strength index was above 80 for the first time since August 2016, indicating the stock may be overbought.

Shares of Asian Oilfield Services rose as much as 12.9 percent after one of its subsidiaries received a letter of intent for a contract worth $20 million from Stratum Energy Romania LLC.

Asian Oilfield's Dubai-based arm received the letter of intent with regard to acquiring 3D seismic data on a 730-square-km stretch of Stratum Energy's Moinesti Block in onshore Romania, the company said in a notification to the stock exchanges.

Over the past year, the stock has returned nearly 247 percent compared with the total return of 17 percent recorded by the 31-stock Sensex.

At current levels, the stock is testing its resistance at its 50-day moving average, according to Bloomberg.

Shares of Indian Hume Pipe rose as much as 6.1 percent after it received an order worth Rs 267 crore from Madhya Pradesh Urban Development Co Ltd.

The order, to be completed in the next 28 months, involves improvement of water supply in multiple areas in the state, the company said in a notification to the stock exchanges today. The order also includes operation and maintenance for 10 years.

So far this year, the stock has returned as much as 46 percent compared with a gain of 23 percent for the 31-stock Sensex, according to Bloomberg.

The consensus target price of analysts tracked by Bloomberg is 18 percent higher than the current market price.

• NCC has 25.2 lakh shares change hands in a single block
• Centrum Capital has 82.1 lakh shares (or 2 percent of equity) changed hands in five block deals on the BSE
• KEC International has 18 lakh shares change hands in two block deals on the NSE and BSE

Buyers and sellers were not immediately known.

Source: Bloomberg

Shares of the auto component manufacturer extended gains for the sixth day and rose as much as 12.74 percent to Rs 83.20. The company has entered into an agreement to sell its manufacturing unit in Pimpri, Pune.

The proceeds of the sale will be used to settle a charge on one of its land holdings, and to reduce overall debt, it said in a notification to the stock exchanges. The activities of the company’s Pimpri unit will now shift to its Chakan facility, it said.

Trading volume was 34.5 times, its 30-day average. The Relative Strength Index was 81, indicating that the stock may be overbought.

Shares of the real estate developer extended decline as much as 9.1 percent to Rs 68.85.

The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted an application for insolvency proceedings under the Insolvency and Bankruptcy Code, 2016, filed by the state-run Union Bank of India.

In a stock exchange filing on Thursday, HDIL said the application had been filed against Guruashish Constructions, which houses a residential project in the western suburb of Goregaon in Mumbai.

The Relative Strength Index (RSI) was 20, indicating that the stock may be oversold.

The stock fell as much as 8.65 percent in early trade, as asset quality worries spooked investors.

The non-banking finance company’s gross bad loans as a percentage of total advances jumped to 4 percent at the end of the first quarter from 2.6 percent in the previous quarter.

Repco was the worst performing stock on the S&P BSE 500, having recorded its biggest fall in six months. The stock declined 8 times in 12 trading sessions.

The stock rose as much as 9.5 percent intraday, most since July 26, after Economic Times reported the company is in talks with Apple to sell its entire library of films and music for about $1 billion.

It has extended advance to a second day with volume at 70 percent of its 3-month full-day average. It is the fifth best performer on the S&P BSE500 index.

Shares of the debt-laden steel maker surged as much as 10.13 percent to Rs 75 after several financial investors were said to be keen on buying a stock in the company, according to a Mint report quoting two people aware of the developments.

Some of the funds include a joint platform between Piramal Enterprises Ltd.-Bain Capital, AION Capital, Oaktree Capital and Lone Star Funds, one of the person quoted in report said.

The company has been referred to the National Company Law Tribunal (NCLT) for insolvency proceedings. As of March 31, the company had a total debt of Rs 42,355 crore.

The stock has gained 79 percent so far this year.

Shares of the company advanced 20 percent after it registered a net profit of Rs 765 crore compared to a loss of Rs 603 crore during the April-June quarter last year.

The net profit was aided by an exceptional gain of Rs 606 crore during the quarter. While EBITDA expanded 267 percent, margins expanded to 30.5 percent from 12 percent.

Jaiprakash Associates has outperformed the S&P BSE Sensex on a year-to-date basis, having gained 215 percent.

Shares of the auto maker dropped as much as 2.3 percent in early trade, but recovered most of it soon after.

The government is said to be considering increase the cess from 15 percent to 25 percent on sports utility vehicles, according to a Times of India report quoting unidentified sources.

Indian equity benchmarks start the week marginally higher led by Tata Steel ahead of its earnings, while M&M declined on reports of a higher levy on sports utility vehicles (SUVs).

The S&P BSE Sensex gained 0.2 percent to 32,386 while the NSE Nifty 50 too climbed 0.2 percent to 10,087. The market breadth was firmly tilted in favour of the buyers. About 936 stocks advanced while 510 declined on the NSE.

Sixteen of the 19 sector gauges compiled by BSE Ltd. advanced, led by the S&P BSE Metal Index’s 1.3 percent gain to a record The S&P BSE Information Technology Index dropped 0.4 percent, the worst performer.

India’s key gauges are the best performers this year among the major Asian markets after the Hang Seng Index. They haven’t dropped more than 1.13 percent any day in 2017.

After gaining 0.9 percent against the U.S. dollar last week and completing its biggest weekly gain since March, the Indian rupee is seen opening today in line with its Asian peers.

The dollar rose as strong U.S. jobs data on Friday bolstered optimism about growth in the world’s largest economy.

Bonds are seen trading in a narrow range today. Later in the day, RBI will auction 43-day cash management bills worth Rs 20,000 crore.

• Nifty futures premium moves to 42 points from 29 points
• Nifty futures shed 2.9 lakh shares in open interest
• Bank Nifty sheds 1.1 lakh shares, open interest down 5 percent
• Nifty range for August series in terms of open interest concentration between 10,000 to 10,500
• Maximum open interest on put side at 10,000 strike with open interest at 52 lakh shares
• Maximum open interest on call side at 10,500 strike with open interest at 38 lakh shares
• Unwinding of open interest seen on call strikes of 10,100 and 10,200
• Open Interest addition seen for Put strikes of 10,000 and 10,100

HPCL

• CLSA maintains 'Sell' while price target is hiked to Rs 405 from Rs 360
• JPMorgan maintains 'Underweight' with price target of Rs 300
• Nomura maintains 'Buy' and hikes price target to Rs 510 from Rs 427
• Kotak maintains 'Reduce' with price target hiked to Rs 420 from Rs 380

Mahindra & Mahindra

• CLSA maintains 'Outperform' and hikes price target to Rs 1,585 from Rs 1,550
• JPMorgan maintains 'Overweight' with price target of Rs 1,600
• Credit Suisse maintains 'Outperform' with price target hiked to Rs 1,680 from Rs 1,530

Dabur

• CLSA upgrades stock to 'Outperform' from 'Underperform' and hikes price target to Rs 350 from Rs 290
• Nomura maintains 'Outperform' and hikes price target to Rs 340 from Rs 331

• ONGC: Buys 80 percent stake and operatorship rights in one of the blocks of GSPC for Rs 7,783 crore
• Fortis Healthcare: Board approves to raise Rs 5,000 crore subject to shareholders and regulatory approval

Bank Of Baroda

• Introduces two interest rate structures for saving accounts
• Accounts with balance above Rs 50 lakh to be given 4 percent interest
• Accounts with balance below Rs 50 lakh to be given 3.5 percent interest
• Changes in effect from August 5, 2017

• Bank of India: Allots 11.23 crore shares to Government of India at Rs 133.51 each
• Dena Bank: Allots 20.63 crore shares to government, LIC on preferential basis
• JSW Steel: May partner Piramal Bain fund to buy Bhushan Steel, reports in the Economic Times suggest
• Jubilant Lifesciences: Gets ANDA approval for spasticity drug Tizanidine Hydrochloride

For a complete list of stocks to watch, click HERE!

• 400 senior executives accept Cognizant’s voluntary separation package
• 12 PSU banks firming plans to raise funds from markets
• Government may raise levy on luxury, SUVs to 25 percent from 15 percent (Times of India)
• Foreign investors pour Rs 5,000 crore in debt markets in four trading sessions
• Consensus on SAIL, ArcelorMittal joint venture likely in two months
• Air India Stake Sale: Parliamentary Panel to hear Government’s views this week
• Flexi Fare: Railways earns additional Rs 540 crore in less than a year
• Note Ban has little impact on increments in FY17, survey shows
• Tata Steel MD TV Narendran took home a salary of Rs 8.17 crore in FY17
• Indian Bank targets gross NPA of less than 5 percent by March, 2018

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, remained little changed at 10,111.

Asian equities returned to their highest point in almost a decade on the back of strong U.S. employment data. Non-farm payrolls rose 209,000, which surpassed estimates of 1,80,000.

Broad-based hiring in July along with stronger household incomes and buoyant consumer confidence may give the Federal Reserve reason to raise interest rates later this year as it seeks to normalise monetary policy.

The Bloomberg Dollar Spot Index was slightly lower. It rose 0.6 percent on Friday after a strong jobs data print.

West Texas Intermediate crude was little changed at $49.57 a barrel.

Gold fell for the fourth straight day to $1,257.73 an ounce.