HDFC twins, RIL lift Sensex by 408 points, Nifty ends above 10,80015 min read . Updated: 09 Jul 2020, 03:37 PM IST Devansh Sharma
- Indian stocks closed over 1% higher led by gains in financials and metal stocks, as investors’ focus shifted on the new earnings season
- Sensex ended at 36,737.69, up 1.12% or 408.62 points, while Nifty settled 107.70 points or 1% higher at 10,813.45
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Indian stocks closed about 1% higher on Thursday led by gains in financials and metal stocks, as investors’ focus shifted on the new earnings season.
Sensex ended at 36,737.69, up 1.12% or 408.62 points, while Nifty settled 107.70 points or 1% higher at 10,813.45.
State Bank of India, closing 4% higher, was the top Sensex gainer followed by Bajaj Finance, HDFC and Tata Steel.
ONGC, Tech Mahindra, HUL and Maruti Suzuki were among the laggards. Of 30 Sensex shares, 22 closed in the green.
R Systems International up 1.4%
"Unsecured creditors of the company have approved the scheme of amalgamation between RightMatch Holdings Limited and R Systems International Limited and their respective shareholders and creditors under the Companies Act, 2013 and the rules made there under in the aforesaid voting through Postal Ballot and e-voting," R Systems International said in a regulatory filing.
Yes Bank, SBI shares edge higher
Shares of Yes Bank gained over 5% intraday, while SBI advanced over 4% on Thursday, in line with the benchmark indices. State Bank of India on Wednesday said its executive committee of central board has given approval for a maximum investment of up to ₹1,760 crore in further public offering (FPO) of Yes Bank.
The FPO issue will be open from July 15 to July 17 and bidding by anchor investors will be held on July 14. An FPO is a process by which a company already listed in an exchange issues new shares to investors or existing shareholders.
The rupee pared some of its initial gains and settled 3 paise higher at 74.99 (provisional) against the US dollar on Thursday tracking weakness in the greenback and gains in the domestic equity market.
The rupee opened at 74.94 against the US dollar, but lost ground and settled for the day at 74.99 against the US dollar, up 3 paise over its previous close.
It had settled at 75.02 against the greenback on Wednesday.
Top laggards on Nifty FMCG
Motilal Oswal on telecom sector
"Telecom companies have realized full benefits of the price hike with no downtrading, according to managements. They further indicated that ARPUs would reach INR 200 in the near term and INR 300 in the long term. Further, the incremental EBITDA margin on increased ARPU should be ~65% on stable-state basis. Network densification, massive MIMOs, core and transport infrastructure deployment and front-loading of investment led to an increase in capex, which should be lower in 1QFY21 and FY21. Bharti Infratel’s management mentioned that gross tower addition has doubled since last year. Management is confident of towers being taken by the second tenant due to coverage needs of operators. BHIN is also looking for rental renegotiation if an opportunity arises. TCOM’s management is looking to achieve double-digit profit growth in the data business and is also targeting net debt to EBITDA of ~2.5x in the long term."
Aurobindo Pharma hits 52-week high
Shares of Aurobindo Pharma jumped as much as 2.5% intraday to hit a 52-week high of ₹821.90 apiece on the BSE.
Top gainers and laggards on Nifty
FMCG stocks under pressure
Motilal Oswal on IT sector
"4QFY20 saw good performance in Jan-Feb’20, which was offset by the COVID-19 impact in Mar’20. Supply side challenges were more prominent as WFH was enabled for 90+% employees on short notice. Demand side challenges are expected to be more prominent going forward as clients are deferring discretionary spends, reprioritizing IT spends toward enabling business resiliency and looking for cost optimization. In terms of vertical – Retail (non-essential), Manufacturing / Auto, Aero and Energy have seen higher-order COVID impact while Healthcare /Life Sciences and Technology have been fairly insulated. Deal closures and deal ramp-ups are continuing virtually with delays in a few cases. Sequential contraction in margin was largely due to the dip in utilization, impact on revenues and one-time expenses (contribution to ‘PM Cares’ fund). The near term outlook remains challenging and managements expect 1QFY21 to see sequential decline in revenue and pressure on margins. Deferral in wage hike, reduced travel and facility expenses and currency depreciation should help partially offset the COVID impact on margins."
Manappuram Finance up 1%
The board of Manappuram Finance Limited has approved allotment of 2,500 secured redeemable non-convertible debentures having the face value of ₹10 lakh each aggregating to
₹250 crores on a private placement basis to be listed on the BSE Limited.
BHEL commissions Solar PV Plant in Madhya Pradesh for Indian Railways
State-run engineering firm BHEL on Thursday said it has successfully commissioned a 1.7 MW solar photovoltaic (PV) plant at Bina in Madhya Pradesh for the Indian Railways.
The plant will directly feed power to traction systems of Indian Railways, a Bharat Heavy Electricals Limited (BHEL) statement said.
"The project is a landmark achievement in the history of solar power, as this is the first time that solar power is being directly used for traction applications. Notably, with this, BHEL has achieved direct injection of single-phase 25 kV power to traction substation of Indian Railways," it added.
This is a pilot project by the company developed on turnkey basis on vacant land of Indian Railways. (PTI)
Flipkart Group to invest ₹260 crore in Arvind Fashions
The Flipkart Group will invest ₹260 crore in Arvind Fashions (AFL) to purchase a significant minority stake in AFL’s recently formed subsidiary Arvind Youth Brands which will own the Flying Machine brand.
Gail India up 5%
Shares of GAIL India gained as much as 4.63% after Life Insurance Corporation of India (LIC) purchased an additional 2% stake in the state-run firm.
LIC has bought 203.71 million shares or 2.014% stake of GAIL India via open market purchases between 13 February 2019 and 7 July 2020. Following the transaction, LIC's stake in GAIL India has increased to 7.019% from 5.004% earlier.
HDFC twins, RIL lift Sensex by 250 points
Ahead of TCS result, ISG warns of sharp slowdown in financial services deals
An analysis of outsourcing contracts by Information Services Group (ISG) indicates a notable slowdown in deal activity. Total commercial outsourcing contracts with annual contract value of $5 million or more declined 5% in the quarter ending June as enterprises reduced spending on managed services.
Importantly, segmental analysis shows a notable decline in financial services deal activity where large Indian IT companies have significant presence. (Full report)
Motilal Oswal on domestic steel sector
"Managements highlighted that domestic steel demand has been hit hard in 1QFY21 due to the COVID-19 lockdowns in different parts of the country. Both JSW Steel and Tata Steel stated that capacity utilization was below 50% in Apr’20 but subsequently improved to ~80% in May-Jun’20. Companies also guided that exports are likely to contribute ~50% of volumes in 1QFY21 and ~30% of volumes in 2QFY21 as against the usual levels of ~15%. Tata Steel stated that while domestic prices corrected by just INR500-1,000/t QoQ in 1QFY21, higher exports could dent blended realization by INR4,000-5,000/t QoQ. On the other hand, aluminum companies highlighted that while their capacity utilization remained elevated at normal levels in the entire quarter, even they have resorted to higher exports to balance the weak domestic demand during the quarter. Hindalco guided that exports are likely to contribute ~80% of its volumes in 1QFY21"
After rescue, SBI plays godfather for Yes Bank
Success has many fathers, but failure can get you a godfather. At least in the case of Yes Bank, this seems to be true.
After being roped in to rescue the troubled private sector lender from the throes of collapse earlier this year, State Bank of India (SBI) has played the role of godfather rather proudly.
It first infused ₹6050 crore into Yes Bank as part of the rescue package, in exchange for a 48.2% stake. But that’s not all. The chief currently steering Yes Bank is Prashant Kumar, former deputy managing director at SBI. And importantly, Yes Bank’s wholesale loan portfolio sales have found a ready buyer in SBI, as a Mint story dated 7 July states.
And now, SBI is all set to invest another ₹1760 crore in the private sector lender’s follow-on public issue scheduled this month. Yes Bank has said it is targeting to raise ₹15,000 crore through the FPO. If it is successful, SBI’s stake will be diluted considerably. But not many are banking on that outcome, unless another government firm such as Life Insurance Corporation of India steps up to the challenge.
Indian stocks traded higher on Thursday, led by a rally in financials and metal stocks, as investors’ focus shifted to another earnings season.
At 12:15 pm, Sensex was at 36,607.68, up 0.77% or 278.67 points, while Nifty advanced 67.55 points or 0.63% to 10,773.30.
Bajaj Finance, up over 4%, was the top Sensex gainer followed by Tata Steel. Bajaj Finserv, HDFC Ltd, Axis Bank and HDFC Bank. TechM, ITC, ONGC, Maruti and TCS were among the laggards.
Of 30 Sensex shares, 9 were in the red.
Lupin’s recall of metformin formulations in the US to hit profitability in Q2
Lupin’s recall of Metformin extended-release tablets from the US has not seen much of a reaction in its stock price. After a marginal dip in Lupin’s shares over the last five days, they were trading about 1% higher on Thursday. (Full report)
Motilal Oswal on auto sector outlook
"Industry volumes remained weak in 4QFY20 due to the BS6 transition, and were further impacted by the lockdown during the last 10 days in Mar'20. With the lockdown being lifted in May'20, Auto industry has seen demand recovery on the back of (a) preference for personal vehicles, (b) pent-up demand from pre-COVID bookings, and (c) high disposable income in the rural market. For Jun'20, most OEM plants were operating at 50-70% average utilization (ex-tractors) with >90% of dealer outlets operational. While demand outlook is uncertain across segments resulting in no guidance for FY21, most OEMs expect recovery in 2HFY21. With uncertainty in demand, there is high focus on cutting cost, capex and conserving cash, which is evident from the cut in variable/fixed costs and slashing of capex budgets for FY21 across companies."
Tata Steel Q1FY21 crude steel production falls to 2.99 million tons
"In India, capacity utilization of our upstream facilities was adjusted to about 50% level in April while our downstream units were closed. With the phased opening of the economy, utilization levels have been ramped up gradually to around 80% level by end of June. Downstream facilities have also been restarted and are being ramped up progressively," the company said in a regulatory filing.
"To counter the closure of the Indian markets in April and May, exports were ramped up significantly by tapping new markets and improving the supply chain capability and will constitute around 50% of total sales volume in 1QFY21. While April and May sales were lower, sales improved significantly in June as economic activity resumed in India. With the continued opening of the economy and the improvement in domestic demand, the proportion of domestic sales will increase from 2Q," it added.
Nifty Financial Services up 1.7%
Karur Vysya Bank partners with Tata Motors
Karur Vysya Bank has entered into an arrangement with Tata Motors to fund buyers of Tata passenger vehicles. Both existing and new customers will be eligible to avail loans from KVB. The bank seeks to leverage the vast new car retail network of Tata Motors across India. KVB has a branch network of 779 across 22 States & UTs.
BSE MidCap up 0.2%
Top gainers on Nifty Metal
Financials, Metal stocks top gainers
Rupee rises 11 paise to 74.91 against US dollar in early trade.
Radico Khaitan up nearly 1%
CARE Ratings has reaffirmed its credit rating on the company's long-term bank facilities worth ₹650 crore at AA- with a 'stable' outlook.
Volume-value conundrum deepens for Maruti
Maruti has been losing market share in the fast growing utility vehicle segment, which comprises both sports and multi-utility vehicles. According to Investec Securities Research, the share of utility vehicles in the passenger vehicles segment increased to 39% last fiscal from 34% in FY19 but Maruti’s share dropped from 38% to 33% during the time. (Full report)
Lacklustre inflation and IIP data to make way for further interest rate cuts
There isn’t much for investors to look forward to as far as the upcoming inflation and industrial production data is concerned. While inflation measured through the consumer price index (CPI) could inch up in June, wholesale inflation is seen remaining in the negative territory. (Full report)
PI Industries up nearly 1%
Agro chemical firm PI Industries on Wednesday said the company has fixed the issue price at ₹1,470 per share, about 4 per cent lower than the floor rate, for sale of shares to institutional investors. The company in a regulatory filing informed that the qualified institutional placement (QIP) issue has been closed on Wednesday but did not mention the amount it has raised through the process.
Yes Bank sells 2.66% stake in CG Power in multiple tranches
Yes Bank Ltd has sold 16.65 million shares, constituting 2.66% of the paid-up share capital, of CG Power & Industrial Solutions Ltd in multiple tranches over the past few days, the lender said in a filing to stock exchanges.
The bank now holds 10.12% stake in CG Power.
Sterling & Wilson Solar Ltd drops 5%
Solar EPC company Sterling & Wilson Solar Ltd (SWSL) on Wednesday informed stock exchanges that ₹500 crore payment due from its promoters, the Shapoorji Pallonji group and Khurshed Daruvala, on 30 June has been delayed as the promoters cited difficulty in availing financing due to the covid-19 pandemic.
IRB Infra up 2.4%
The company on Wednesday said it has raised ₹150 crore through allotment of NCDs on a private placement basis.
Bharti Airtel up 1%
The government has moved the Supreme Court against the Delhi High Court order allowing Bharti Airtel Ltd to claim ₹9.23 billion in tax refunds by rectifying its GST returns filed earlier.
Cipla up 1%
The pharma major has priced its generic version of remdesivir, Cipremi, at ₹4,000 per 100 mg vial, making it among the lowest priced versions of the covid-19 treatment available so far globally.
Yes Bank FPO to open on 15 July
Yes Bank will launch its follow-on public offering (FPO) from 15-17 July, it said in a stock exchange filing. The private sector lender has also filed the offer document with the registrar of companies for its FPO, to raise up to ₹15,000 crore. The FPO will include an employee reservation portion of ₹200 crore.
TCS slips 0.7% ahead of Q1 result
Tata Consultancy Services (TCS) announce its earnings for Q1FY21 on 9 July. The company is expected to report around 5 % dip in profits in on a quarterly basis. In rupee terms, on Bloomberg analysts expect TCS to report revenue ₹38,910.5 crore down 2.6% from Q4. The company is expected to report profit of around ₹7,694 crore down 5.2% sequentially.
ICICI Bank up 0.7%
The country’s second largest private lender ICICI Bank Ltd., whose capital position has deteriorated during fiscal 2020, on Wednesday said the bank will raise up to Rs. 15,000 crore via sale of the bank’s shares in one or more tranches. ICICI Bank’s latest capital raising plan comes after 13 years. The bank had last raised capital via fresh issuance of shares in June 2007. Through an FPO, ICICI Bank had raised Rs. 8,750 crore then.
Yes Bank up 2%
India’s largest lender State Bank of India on Wednesday said its board has approved an investment of up to ₹1,760 crore in the upcoming follow-on public offer (FPO) of Yes Bank.
Indian benchmark share indices opened higher on Thursday in line with the global trend. Sensex opened at 36,450.69, up 121 points, while Nifty added 50 points to open at 10,755.55.
IndusInd Bank, up 2.5%, was the top Sensex gainer followed by Bajaj Finance, Infosys and Tata Steel. ITC, Ultratech Cement, Maruti and Sun Pharma were among the laggards.
Of 30 Sensex shares, 21 were in the green.
Indian stocks traded higher in the pre-opening trade on Thursday. At 9:05 am Sensex was up 151.29 points or 0.42% at 36,480.30, while Nifty advanced 61.85 points or 0.6% to 10,767.60.
Stocks to Watch
Yes Bank, SBI, Cipla, ICICI Bank, TCS and Bharti Airtel are among top stocks that may be in news on Thursday.
Market at close on Wednesday
Equity benchmarks succumbed to a fag-end selloff to close in the red on Wednesday as investors pocketed gains after a five-session rally amid weak global cues.
A depreciating rupee also weighed on market sentiment, traders said.
After opening on a positive note, the 30-share BSE Sensex buckled under selling pressure in the last hour of trade to close 345.51 points, or 0.95 per cent, lower at 36,329.01.
On similar lines, the broader NSE Nifty shed 93.90 points, or 0.87 per cent, to close at 10,705.75. (PTI)
Asian shares rise
Most Asian markets rose Thursday following another record close on Wall Street as concerns about a new spike in coronavirus cases around the world were overshadowed by optimism for the economic recovery.
Australia's ASX All Ordinaries jumped 1.03%.
China's Shanghai SE Composite Index added 0.14%.
Hong Kong's Hang Seng edged 0.04% higher.
Singapore's SGX Nifty advanced 0.4%, indicating a positive opening for Indian benchmark stock indices.
US stocks finish higher
Big gains by large tech companies lifted the Nasdaq to another record close Wednesday, as investors continued to shrug off higher coronavirus cases and the hit to the economy.
The tech-rich Nasdaq Composite Index climbed 1.4% to 10,492.50, its fourth record in five sessions.
The Dow Jones Industrial Average gained 0.7% to 26,067.28, while the broad-based S&P 500 advanced 0.8% to 3,169.94.
Major indices had tumbled on Tuesday but resumed their upward climb Wednesday, a sign that investors viewed the pullback as a buying opportunity. (AFP)