Sensex, Nifty Rise For A Third Day To End At Another Record High

Indian equity benchmarks rose for a third day in a row to settle at new record highs.

The S&P BSE Sensex advanced marginally to 38,286 and the NSE Nifty 50 index rose 0.17 percent to 11,571.

For most part of the day, the benchmarks swung between gains and losses as buying in Reliance Industries, Axis Bank and Sun Pharma were offset by selling pressure in Hindustan Unilever, Tata Steel and HDFC.

Ten out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Power index's 1.5 percent gain. On the other hand, the S&P BSE Realty index was top loser, down 1.4 percent.

• Senco Gold has filed for Rs 600 crore initial public offer with SEBI.

Source: Bloomberg

• Axis Bank has 48.30 lakh shares change hands in a block. Stock up 1.7 percent at Rs 635.

Buyers and sellers were not immediately known

Source: Bloomberg

• HCC has 13.5 lakh shares change hands in a block. Stock up 2 percent at Rs 15.50.

Buyers and sellers were not immediately knwn

Source: Bloomberg

The Stoxx Europe 600 Index drifted, while Treasuries gave back some of Monday’s gains and European bonds were range bound ahead of a meeting of the world’s central bankers later this week.

Speaking in New Delhi, the country's Information Technology Minister Ravi Shankar Prasad said WhatsApp has to establish a corporate entity in India and they must develop a mechanism to deal with fake news.

Source: Bloomberg

• Power Finance Corporation has 11 lakh shares change hands in a block. Stock up 0.4 percent at Rs 82.60.

Buyers and sellers were not immediately known

Source: Bloomberg

Nifty 11,500 strike price put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 2.65 percent to Rs 54.20. Over 5.48 lakh shares were added to the open interest which stood at over 41 lakh shares.

Click here to see the complete options chain

Shares of the Anil Ambani-led company fell as much as 2.2 percent to Rs 417.50.

Reliance Infrastructure, Chairman Anil Ambani has denied Rahul Gandhi’s allegation that, Reliance Infra's associate company, Reliance Defence was setup just before the Rafale deal announcement with French Government.

He stated that Congress has been misinformed, misdirected and misled by malicious vested interests and corporate rivals on the Rafale deal.

• Thomas Cook: The Mumbai-based leisure and travel service provider rose as much as 4.5 percent to Rs 250.90. Trading volume was 23 times its 20-day average.
• CCL Products: The Andhra-based coffee maker and exporter rose as much as 3 percent to Rs 268. Trading volume was 12.6 times its 20-day average.
• Kajaria Ceramics: The Delhi-based ceramic tiles maker rose as much as 8.76 percent to Rs 449.50. Trading volume was 11.4 times its 20-day average.
• Varun Beverages: The Gurugram-based beverage producer rose as much as 7.6 percent to record high of Rs 839.80. Trading volume was 4.3 times its 20-day average.

Shares of the Mumbai-based drugmaker rose as much as 1.35 percent to Rs 881.

The company has received final approval for Hydrocortisone Butyrate Lotion from the U.S. FDA to market generic version of PreCision Dermatology's Locoid lotion, Lupin said in an exchange filing.

Locoid lotion is indicated for topical treatment of mild to moderate atopic dermatitis in patients 3 months of age and older.

Shares of the Ahmedabad-based ice cream maker fell as much as 12.2 percent to Rs 517.30 after well-known investor Ashish Kacholia sold a 5 percent stake in Vadilal Industries.

Ashish Kacholia sold 3.62 lakh shares at Rs 611 each while Porinju Veliyath’s EQ India Fund acquired 48,000 shares, or 0.67 percent equity at Rs 590.24 each.

Shares of the Bhopal-based construction company recovered from intraday low levels and rose as much as 0.7 percent to Rs 861.30.

Dilip Buildcon has emerged as the lowest bidder for Bhopal Metro Rail project, phase 1, valued at Rs 247.06 crore by the Urban Administration and Development Department Madhya Pradesh Metro Rail Company, the company said in an exchange filing.

Shares of the Mumbai-based airline operator fell as much as 3.3 percent to Rs 291.50 after a report suggested that corporate affairs ministry is probing Jet Airways for alleged fund siphoning, Business Standard reported citing an unnamed government official.

The report added that the probe is at a very crucial stage and the inquiry is being carried out by the western division based in Mumbai.

Meanwhile, the BSE has sought a clarification from Jet Airways for which the reply is pending.

Shares of the Mumbai-based drugmaker fell as much as 8.14 percent, the most in over two months, to Rs 232 after the U.S. drug regulator — U.S. FDA issued Form 483 with 8 observations for its Aurangabad unit, FDC said in an exchange filing.

The observations are in relation to the ophthalmic products being exported to the U.S. market.

• Reliance Communications has 13.2 lakh shares change hands in a block. Stock down 0.3 percent at Rs 19.00.

Buyers and sellers were not immediately known

Source: Bloomberg

Indian equity benchmarks extended record highs led by ITC, which rose after a large chunk of 72 lakh shares changed hands in pre-market trading.

The S&P BSE Sensex rose as much as 0.3 percent to new high of 38,403 and the NSE Nifty 50 index climbed 0.26 percent to record high of 11,582.

Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Power index's 0.7 percent gain. On the flipside, the S&P BSE Realty index was top loser, down 0.2 percent.

The mid- and small-cap shares were outperforming their larger peers as the S&P BSE MidCap index rose 0.4 percent and the S&P BSE SmallCap index advanced 0.3 percent.

• ITC has 72 lakh shares change hands in pre-market trading.

Buyers and sellers were not immediately known

Source: Bloomberg

• Indian rupee extended yesterday's upmove and rose as much as 0.3 percent to 69.62 per dollar against yesterday's close of 69.82.

The rupee is expected to start on a stronger note, building on gains seen on Monday as the dollar is under pressure after comments from the U.S. President Donald Trump.

The dollar weakened on a media report that Trump said China and Europe manipulate their currencies as well as separate remarks lamenting the Federal Reserve’s interest-rate increases.

The rupee rose about 0.5 percent to close at 69.82 per dollar on Monday, recovering from an all-time low of 70.39 struck last week. The implied opening from forwards suggests spot may start trading at around 69.66 on Tuesday.

The rise in the rupee is also supporting sentiment in the bond market. Traders will be focusing on Rs 18,000 crore treasury bill auction with volumes expected to be on the lower side ahead of a holiday on Wednesday. The benchmark 10-year yield fell 2 basis points on Monday to end at 7.84 percent.

Credit Suisse on Avenue Supermarts

• Initiated ‘Underperform’ with a price target of Rs 1,150.
• Very well-run business with a proven track record.
• Store expansion to keep margins capped.
• Food & grocery retailing is a tough business and valuations need to account for the same.
• Valuations are factoring in a bull case scenario with low margin for safety.
• Current price implies 40 percent organised retail market share for DMart by March 2040, which is highly unlikely.

BofAML on Tech Mahindra

• Upgraded to ‘Buy’ From ‘Underperform’; raised price target to Rs 800 from Rs 600.
• Telecom revival to boost both top-line & margin outlook.
• Expect operating profit to grow at a compounded annual growth rate of 18 percent over FY18-21.
• Such growth to provide more qualitative stock rally.

UBS on Tata Motors

• Maintained ‘Neutral’; cut price target to Rs 280 from Rs 370.
• Deterioration in JLR performance is likely to result in rapid re-leveraging.
• Risk-reward not compelling as JLR vol growth falters and negative FCF expands.
• Domestic business improving but profitability could peak in the next financial year.

Citi on IndiGo

• Maintained ‘Sell’ with a price target of Rs 850.
• Strong growth partly aided by weak base.
• Believe lower fares could have also helped overall demand.
• Recent uptick in IndiGo primarily reflects market share gain expectations.

UBS on Federal Bank

• Maintained ‘Buy’; cut price target to Rs 105 from Rs 115.
• Flooding in Kerala could impact repayments; 25 percent of the loan book from Kerala.
• Target cut to factor in higher credit cost.
• Maintain Buy due to inexpensive valuation.

Macquarie on Asian Paints

• Maintained ‘Neutral’ with a price target of Rs 1,300.
• GST cut to aid premiumisation and growth in the medium term.
• Rising input prices will weigh on margin in the near term.
• Like dominant position in Indian paint sector; Advise long-term investors to buy on dips.

HSBC on DLF

• Maintained ‘Hold’ with a price target of Rs 217.
• Expect sales momentum to remain moderate and dependent purely on market conditions.
• Fund raising and receivables settlement are last leg of restructuring.
• Operating business stabilising; Material pick-up still several quarters away.

Deutsche Bank on Indian Real Estate

• Worst of demand slowdown has passed.
• Pace of industry consolidation has accelerated.
• Margins unlikely to see further compression.
• Expect cash flow momentum to improve in coming quarters.
• Top picks are: Sobha, Godrej Properties and Oberoi Realty.

Deutsche Bank on NTPC

• Maintained ‘Buy’ with a price target of Rs 200.
• Near-term issues undermine attractive stock valuations & medium-term story.
• Strong potential of two times and 2.3 times growth in regulated equity and profit respectively by March 2022.
• Scenario analysis on Tariff Regulations suggest more positives than negatives.

Who’s Meeting Whom

• FIEM Industries to meet SAIF Partners and Kitara Capital on Aug. 21 and Aug. 27 respectively.
• Narayana Hrudayalaya to meet ICICI Prudential Life Insurance, Tattva Capital and other investors on Aug. 21.
• Godrej Agrovet to meet Invesco, Nomura and other investors from Aug. 21-24.

Insider Trades

• Singer India promoter sold 2.4 lakh shares on Aug. 16.
• Srikalahasthi Pipes promoters acquired 26,000 shares from Aug. 16-17.
• DCM Shriram Industries promoters acquired 2.7 lakh shares from July 2 to Aug. 17.
• Skipper promoter Devansh Bansal acquired 2.5 lakh shares on Aug. 20.

(As reported on Aug. 20)

Bulk Deals

• TVS Motor Company: Europacific Growth Fund sold 34.06 lakh shares, or 0.72 percent equity at Rs 519.49 each.

Vadilal Industries

• Porinju Veliyath’s EQ India Fund acquired 48,000 shares, or 0.67 percent equity at Rs 590.24 each.
• Ashish Ramchandra Kacholia sold 3.62 lakh shares, or 5.04 percent equity at Rs 611 each.

Teamlease Services

• Franklin Templeton Investment Funds acquired 4.8 lakh shares, or 2.82 percent equity at Rs 2,645 each.
• Kuwait Investment Authority acquired 94,800 shares, or 0.55 percent at Rs 2,645 each.
• Gaja Capital Fund India sold 1.06 lakh shares, 0.612 percent equity at Rs 2,645 each.
• GPE (India) sold 4.6 lakh shares, or 2.66 percent equity at Rs 2645.01 each.

Newgen Software Tech

• Malabar India Fund acquired 9.7 lakh shares, or 1.41 percent equity at Rs 239 each.
• Birla Sun Mutual Fund sold 9.7 lakh shares, or 1.4 percent equity at Rs 239 each.

F&O Cues

• Nifty August Futures ended at 11,578.9, with a premium of 27 points versus 17.7 points.
• August series- Nifty open interest (OI) up 1.5 percent and Bank Nifty OI up 0.5 percent.
• India VIX ended at 13.0.3, down 1 percent.
• Maximum open interest for August series call at 11,600 strike price call option, open interest at 33.8 lakh shares, down 6 percent.
• Maximum open interest for August series put at 11,400 strike price put option, open Interest at 43.5 lakh shares, up 9 percent.

Aviation Data For July 2018

• Strong passenger growth for aviation sector at 20.8 percent (YoY) In July 2018.
• IndiGo’s passenger growth at 31.5 percent (YoY) - highest in last 18 months.
• SpiceJet’s passenger growth at 5.1 percent (YoY) - lowest in last 33 months.
• Jet Airways’ passenger growth at 4.2 percent (YoY).

Telecom Data For June 2018

• Bharti Airtel added 10,689 subscribers (MoM)
• Vodafone India added 2,75,219 subscribers (MoM)
• Idea Cellular added 63,69,785 subscribers (MoM)
• Reliance Jio added 97,13,047 subscribers (MoM)

• Reliance Infrastructure: Anil Ambani has denied Rahul Gandhi’s allegation that Reliance Defence was setup just before the Rafale deal announcement with French Government. He stated that Congress has been misinformed, misdirected and misled by malicious vested interests and corporate rivals on the Rafale deal.
• HCL Technologies: The company has fixed Aug. 31 as a record date for buy back. The record date is for determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the buy back process.
• Apollo Tyres: The company has said that operations in two plants in Kerala have been disrupted due to floods. Production loss till date is estimated around 1,500 million tonnes. Apollo Tyres believes that consequential loss of profit is not significant and is adequately covered under the insurance policy of the company.
• Goa Carbon: The company has filed an application in the Supreme Court to include calcination process along with aluminium for exemption with respect to pet coke import ban. Ministry of Commerce & Industry has amended the import policy conditions of petcoke prohibiting the import thereof into India for fuel purpose. Goa Carbon said that the Ministry order will impact the ability of the company to import the raw/green petroleum coke which is essential for production of the Calcined Petroleum Coke.
• FDC: The company has received eight observations under Form 483 for Aurangabad unit from the U.S. drug regulator. The observations are in relation to the ophthalmic products being exported to the U.S. market.
• CG Power: The company has inaugurated its first high-voltage and extra high voltage air insulated switchgear factory in Indonesia.
• NR Agarwal Industries: The company’s Valsad plant will be temporarily shut for 15 days with effect from Aug. 27 for annual maintenance and technological upgradation.
• ICICI Lombard: The company has launched artificial intelligence (AI) based technology to facilitate instant health insurance claim approvals. Processing time for cashless claim request down from 60 minutes to 1 minute.

• Meet the Indian billionaire who can’t spend his own fortune
• Indian firms may find loans abroad costlier as easy money ends
• Nirav Modi in U.K., CBI moves for extradition
• Kerala floods: Over 7.24 lakh people displaced
• Apple is planning a new low-cost MacBook
• Can we celebrate high GDP growth alone?
• Emerging markets may lose their friendly banker
• Here comes the India Post payments bank...
• In potential challenge to army, Pakistan seeks India talks
• Starbucks boycott? Nike shutdown? China holds trade war leverage

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was little changed at 11,590 as of 8:25 a.m.

The dollar extended a decline against major peers on comments from U.S. President Donald Trump, and Asian stocks traded mixed after muted gains in U.S. equities.

Equities fell in Japan and Australia and were higher in South Korea, while Hong Kong’s futures fell and China’s rose. The Shanghai Composite Index will be closely watched after its rebound Monday, as state-backed funds were seen buying stocks to stabilize the market.

Currencies

• The yen rose 0.2 percent to 109.87 per dollar.
• The offshore yuan added 0.1 percent to 6.8295 per dollar.
• The euro jumped 0.4 percent to $1.1527.
• The Bloomberg Dollar Spot Index fell 0.3 percent, on course for its fourth consecutive decline.

Commodities

• West Texas Intermediate crude rose 0.2 percent to $66.53.
• Gold rose 0.2 percent to $1,192.25 an ounce after climbing 0.5 percent Monday.

Here are some key events coming up this week:

• Companies announcing earnings include Alibaba, Royal Bank of Canada, Lowe’s, Target, BHP Billiton, Qantas, Ping An and China’s Bank of Communications.
• Central bankers gather at the Kansas City Fed’s annual Jackson Hole symposium, where Federal Reserve Chairman Jerome Powell peaks Friday.
• The Fed releases the minutes from latest FOMC meeting on Wednesday.