Sensex, Nifty Log Second Day Of Gains As Outlook Improves

The Race to Become the Vanguard of India’s Stock Market Is On

India’s Paytm will seek shareholders’ approval next week for an initial public offering with an initial fundraising target of Rs 16,000 crore ($2.2 billion), according to people familiar with the plan, setting in motion the process for the country’s largest ever debut.

If green-lit, the digital payments startup will have the option of raising that target to as much as roughly $2.6 billion, per regulatory guidelines.

To read the full Bloomberg report, click here.

Mahindra Holidays leads a rally in shares of tourism-linked companies as states in India continue to ease rules on peoples’ movements as the pace of new Covid-19 cases decelerates.

• Mahindra Holidays rises as much as 10.7%, most since May 26

• Trading vol. > 7.1x 3-mos. full-day avg; set for second day of gains

• Provider of ticket-booking services Easy Trip Planners rises by 10% daily limit

• India Tourism Development Corp rises as much as 2.5%

• Hotel stocks also gain, with Chalet Hotels trading up 6.6%; Lords Ishwar Hotels +4%, Lemon Tree Hotels +1.3%

• NOTE: India reported addition of 39,796 new virus cases in 24 hours through Monday morning; the caseload more than halved from about 100,000 cases at start of June

Godrej Consumer likely clocked “high teens” sales growth in its India business in the first quarter to June 30, helped by strong volume growth and calibrated price increases, according to a statement to stock exchanges.

• In India, company witnessed strong double-digit sales growth in home care and personal care categories

• Indonesia sales growth seen flat on constant currency basis

• It exects sales growth in Latin America and SAARC businesses to remain strong in constant currency terms

• Godrej Africa, USA and Middle East expects 1Q constant currency sales growth of “upwards of the fifties”

CCL Products India rises most in more than a year as the maker of instant coffee is seen overcoming logistical challenges locally as well as to support exports.

• Shares rise as much as 12.7%, most since March 2020

• Trading vol. > 8.8x 3-mos. full-day avg; set for second day of gains

• CCL faced logistical issues in its supply chain in India as well as for markets including Russia, which also led to under-utilization of capacity in fiscal year 2021, Abhishek Navalgund, an analyst with Nirmal Bang Equities said via phone

• The company is resolving the issues, and exports are seen to pick up meaningfully as highlighted by trade data for April-May, when CCL Products’ instant-coffee exports rose by about 55%, he says

• “We reiterate that underlying demand for instant coffee has not been affected due to Covid-19. In fact, at-home coffee consumption has increased during the pandemic,” Navalgund wrote in a note dated June 29

• CCL also expanded small-packs capacity by >3x and commissioning is expected to be completed in 1H of FY22, the note says

• “Higher volume from small packs would mean better realization and we expect majority of its impact in FY23.”

• Analyst has a buy rating on CCL Products and target price of Rs 480

The Indian rupee bounces back from four days of declines amid risk-on sentiment following jobs data that signals the U.S. economy is gaining steam. Sovereign government bonds are largely steady with the central bank shifting the auction methodology for key benchmarks to the uniform-price method from multiple pricing.

• 10-year yields up 2bps to 6.089; 5.63% 2026 bond yield steady at 5.75%; 6.64% 2035 bond yield down 1bp to 6.73%

• USD/INR is still on an uptrend though momentum is slow, says Anindya Banerjee, currency strategist at Kotak Securities

  • This slowing reflects strong global risk appetite and hence the hunt for high yielders, apparent in decent FPI inflows over the month of June

  • The broad uptrend though comes from factors including relative strength of U.S. economy over India’s, which is allows the Fed to be hawkish while the RBI remains dovish; oil prices are also ticking higher

• USD/INR down 0.4% to 74.49

India’s main services index signaled deepening contraction in the industry as localised movement curbs to control the spread of the coronavirus pandemic hurt consumer demand and business activity.

The Markit India Services PMI declined to 41.2 last month from 46.4 in May, according to data from IHS Markit. A reading under 50 indicates a contraction in an industry that accounts for more than half of the nation’s gross domestic product.

A similar survey last week pointed to activity in the manufacturing sector also shrinking. The overall composite PMI also fell sharply to 43.1 in June from 48.1 the previous month, the report showed.

Shares of India Pesticides Ltd. made a strong market debut after its initial public offering witnessed healthy investor appetite.

The stock of the fungicide and herbicide maker started trading at Rs 360 apiece, a premium of 21.62% to its issue price of Rs 296, according to exchange data.

• HDFC Bank advances rose 1.3% sequentially to Rs 11.47 lakh crore in Q1

• Advances rose 14.4% year-on-year

• Retail advances contracted 1% quarter-on-quarter, up 9% year-on-year

• Commercial and rural banking loans up 4% sequentially, other wholesale loan up 1.5% quarter-on-quarter

• Retail disbursements at Rs 43,600 crore in Q1, down 30% as compared with Jan-Mar

• Total deposits up 0.8% quarter-on-quarter, at Rs 13.46 lakh crore

• Retail deposits up 3.5% sequentially, CASA ratio dropped to 45% from 46% quarter-on-quarter

*All Apr-Jun quarter figures are provisional

Source: Exchange Notification

Yes Bank advances contract 1.8% sequentially to Rs 1.64 lakh crore in June

• Outstanding loans contracted 0.4% year-on-year

• Gross retail disbursements in Q1 at Rs 5,099 crore, compared with Rs 7,828 crore in Jan-Mar

• Deposits rose 0.2% sequentially to Rs 1.63 lakh crore, up 39% year-on-year

• Certificate of deposits contracted 44.5% sequentially to Rs 3,827 crore

• CASA deposits rose 5.2% quarter-on-quarter to RS 44,790 crore

*All Apr-Jun quarter figures are provisional

Source: Exchange notification

There was visible traction in overall economic activities in June, Binod Modi, head of strategy at Reliance Securities, wrote in a note. He expects earnings for the first quarter of fiscal year 2022, which will start later this week, to be promising despite the second wave of Covid-19.

Indian government bonds may find support with the central bank shifting the auction methodology for key benchmark papers to the uniform-price method from multiple pricing.

• RBI to use uniform price auction method for bond Issues

• NOTE: Uniform price auction prevents the so-called ‘winner’s curse’ which leads to some winning bids paying more than the cutoff price

• 10-year yields rose 3bps to 6.07% on Friday

• India June exports jump 47% YoY; FY22 target at $400 billion: Minister

  • June trade deficit at $9.4 billion, Prelim data shows

• USD/INR rose 0.3% to 74.7500 on Friday

  • Implied opening from forwards suggest spot may start trading around 74.65

• Traders will also monitor an address by Prime Minister Modi at the Co-WIN Global Conclave

• Global Funds sold net Rs 983 crore of India stocks Friday: NSE

  • They bought Rs 40 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 128 crore rupees of corporate debt

All You Need To Know Going Into Trade On July 5