EQUITIES news

Market LIVE: Sensex marches into positive territory, Nifty at 10,815; volatility surges, IndusInd Bank up 8%

Share Market Today, Share Market LiveSGX Nifty was up 30 points on Wednesday morning hinting at a positive start for Sensex and Nifty.

Share Market News Today | Sensex, Nifty, Share Prices LIVE: Domestic equity markets were seen continuing their march upwards on opening bell, only to give up gains and trade flat. After opening 30 points higher, the S&P BSE Sensex erased gains to trade down 10 points at 36,665, while Nifty 50 was below the 10,800 mark. IndusInd Bank was the biggest gainer among Sensex constituents, jumping 6%, followed by a 3% surge in State Bank of India and a 2% jump in Tata Steel. On the other side in the negative territory, Infosys and HCL tech were down over 1.5% each. They were followed by Maruti, Bajaj Finance, and NTPC. Among sectoral indices Nifty IT, Nifty Auto, Nifty media were in the red. Nifty PSU Bank index was up 3.11% followed by the Nifty Pharma index, up 1.11%. Stock markets in the United States closed in the red, with Dow Jones slipping 1.51%. However, major Asian peers were in the positive territory on Wednesday morning.

Mukesh Ambani’s Reliance Industries Ltd (RIL), informed the stock exchanges late Tuesday night that it has received Rs 43,574 crore payment from Mark Zuckerberg’s social media behemoth Facebook. The deal for a 9.99% equity stake in Jio Platforms was announced on April 22 and was cleared by the Competition Commission of India (CCI). This marks the first payment from the 11 investors that Mukesh Ambani has lured in for his digital telecommunications arm, Jio Platforms. “We hereby inform that, after receipt of all requisite approvals, Jio Platforms Limited, a subsidiary of the company, today received the subscription amount of Rs 43,574 crore from Jaadhu Holdings, LLC (a wholly-owned subsidiary of Facebook Inc),” RIL said in the filing.

The USD/INR spot has been respecting the 75.05 resistance as traders are hopeful about additional government and central bank stimulus from major economies. However, until then in the absence of major economic data, the coronavirus and geopolitical fears will keep risk sentiments under check. The US-China trade tiff is escalating with Trump considering to ban TikTok app as retribution against China for coronavirus pandemic. If the immediate resistance of 75.05/75.10 breaks then we can see a rally towards 75.50, with crucial support being 74.50: Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services

We downgrade Cummins to Sell with lower TP of INR330 (from INR360) as we lower our target multiple to 15x from 16x earlier. We acknowledge that despite macro headwinds, the company has done a commendable job in FCF conversion, resulting in a strong balance sheet. Rental and dividend incomes have enabled the company to significantly increase dividend payouts over the years, owing to which it has one of the best payout ratios in the Capital Goods sector. However, the lack of growth drivers is yet to be fully factored in the valuations, in our view: Motilal Oswal Financial Services

Volatility surged on Wednesday as domestic equity benchmark indices danced between gains and losses. India VIX was over 3% during the day at 26.3 levels.

Coronavirus Remdesivir: Raising concern over the issue of black marketing and over pricing of Remdesivir drug, the Central Drugs Standard Control Organisation (CDSCO) has asked all states to ensure that the drug which is being used in the treatment of Coronavirus patients is not sold above its MRP. A letter was written by the Central Drugs Controller General to the respective states’ Drug controllers in this regard on Tuesday. The letter was written by CDSCO after drug manufacturer M/S Local Circles sent a letter to CDSCO highlighting its concerns over the issue of black marketing and over pricing of the drug.

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Yes Bank share price gained 2 per cent to Rs 26.25 apiece on BSE after falling 5.5 per cent in early morning deals, a day after the private lender board approved the fundraising plan. In comparison, S&P BSE Sensex was trading flat. Yes Bank in an exchange filing said that its capital raising committee of the Board of Directors has approved raising funds by way of a further public offering.

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India’s government is running out of options to fund its budget and may soon have to knock on the central bank’s door once again for support. The administration can get the Reserve Bank of India to buy sovereign bonds directly or boost dividends to help supplement revenue, which has been hit by an economy-crippling lockdown to contain the virus’s spread. The government is facing a budget deficit of as high as 7% of gross domestic product, the widest in more than two decades, according to some estimates.

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BAF delivered another year of stellar performance in FY20. Given the current liquidity risks, the company focused on long-term borrowings and increased liquidity on the balance sheet (14% of borrowings). It also nearly doubled its public deposit base with tenure of most deposits at over 3 years. While we expect some slowdown in fee income traction for FY21, the long-term story remains intact. Pressure on fees is likely to be compensated by sharp reduction in operating expenses in our view. The lower moratorium rate in June as compared to April is a key positive – hence, we reduced our credit cost estimates by 50/25bp to 3.9/3.1% for FY21/FY22. In our recent note, we have increased our EPS estimates by ~15%. Maintain Neutral with a TP of INR3,000 (4.2x FY22E BV).

~ Motilal Oswal

After reporting numbers that were above expectations in the March quarter, Titan Company has said that recovery in the jewellery segment has been better than expected in the month of May and June despite suffering a complete loss in the month of April. In its quarterly update, Titan said that revenues in the last two months were slightly below 20% and 70% when compared to the corresponding months of the previous year. Titan informed the bourses that the company started opening stores on May 6 and so far has re-opened 83% of its stores. Titan is often touted as ace investor Rakesh Jhunjhunwala’s favourite stock. The scrip was trading down 1% to trade at Rs 1,009 per share.

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Q4FY20 reflected the resilience of the agri-input industry in an environment wherein other sectors struggled against covid-19-induced disruption. Aided by a strong rabi season, domestic agri-input players beat our estimates with aggregate revenue growth of 23% YoY amid some deferment of sales to Q1FY21 as the lockdown impacted dispatches. Logistical hurdles tapered the growth momentum of export-oriented companies as well with PI’s CSM business reporting 8% YoY growth, while Rallis grew 2% YoY. We remain positive on the agri space at large. UPL (‘BUY’), Coromandel International (‘BUY’) and Dhanuka (‘BUY’) remain our top picks. In our latest Edelweiss Agri and Specialty Chemicals conference attended by ten leading players, their management executives shared an encouraging outlook for rural growth.~ Edelweiss

Shares of Maruti Suzuki India (MSIL) fell over 1.5 per cent to hit day’s low of Rs 6,156 apiece on BSE, a day after the company informed that its total productions declined nearly 55 per cent to 50,742 units in June 2020 from 1,11,917 units produced in the corresponding period of the preceding year. Maruti Suzuki stock price has rallied 53 per cent from March lows of Rs 4,002 apiece, with market capitalisation at nearly Rs 1.86 lakh crore.

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India’s cement companies (14 listed companies) reported consolidated volume decline of 13% YoY in 4QFY20 and 3% YoY in FY20, as sales momentum gained in Jan-Feb was offset by 9 days of lost sales in March due to lockdown. However, EBITDA/t fared better with an 18% growth, as 2% sequential improvement in realisations (price hikes, reversal of dealer discounts) and benign commodity prices more than offset the adverse impact of unfavourable operating leverage. In 1QFY21, plants are operating at 55-75% utilisation, on pent up demand from rural and infra segment and channel filling, while pricing discipline continues to keep realisations upbeat (+6% QoQ). Going forward, we factor in 10% decline in volumes in FY21 (35-40% decline in 1Q, followed by flat volumes for balance 9M), as we expect the industry to witness demand headwinds from labour shortage, slowdown in government capex and liquidity issues in real estate. Most companies have prioritised cash conservation in view of demand uncertainty by reducing dealer financing and deferring the planned expansion. We are reducing the target valuation discount from 20-25% earlier to 0-10% currently as price hikes taken in 1Q are expected to restrict contraction in EBITDA/t to some extent. We downgrade ACC to HOLD (constrained growth and poor RoC at peak utilisations) and Ramco to SELL (levered balance sheet and cash flow concerns due to capex), while we remain positive selectively on Shree Cement (cost leader and improving RoCs due to better mix, premiumisation) and JK Cement (improving RoCs as operations ramp up).

Post a flat opening, in the early hours, energy stocks witnessed selling pressure while the Nifty made a low of 10690. However, a late recovery in BFSI along with outperformance in midcap & auto stocks helped the market to recover intraday losses. Finally, it ended at 10799, with a marginal gain of 0.33%. Nifty futures ended at a discount of 32 points with a fall in IVs by 0.5%. The major Put base is at 10500 strike with almost 33 lakh shares while the major Call base is at the 11000 strike with almost 33 lakh shares.

~ ICICI Securities

The RBI continued to buy USD and pay forwards, crushing shorts in trade yesterday. We could see similar price action today as well. There is not much on the data front. Price action is likely to largely flow driven. Rupee is likely to trade a 74.70-75.10 range intraday. Nationalized banks may continue to intervene to smoothen volatility. FPIs are utilizing 40% of their limit in Gsecs in general category and 37% of their limit in corporate bonds EIA crude inventory data due today: Abhishek Goenka, Founder and CEO, IFA Global

Wednesday’s trading session saw Sensex, Nifty comfortably climb up in the initial minutes only to be taken aback by the rising volatility that saw the indices give up all gains and trade flat. After the initial hour of trading Sensex was up 84 points or 0.23% at 36,728 points, while the 50-stock Nifty was above the 10,800 mark. Domestic indices now on a 5-day gaining streak, sitting at levels last seen in the initial weeks of March when the mark sell-off was just beginning.