Nifty holds 11,900 in volatile trade, Sensex flat; Indiabulls Housing up 7%

03 Jul 2019

Market Close: Benchmark indices ended marginally higher in the volatile trade on July 3 with Nifty able to hold 11,900.

At close, the Sensex was up 22.77 points at 39,839.25, while Nifty was up 6.50 points at 11,916.80. About 1308 shares have advanced, 1146 shares declined, and 168 shares are unchanged.

Indiabulls Housing, IndusInd Bank, ITC, Zee Entertainment and Grasim Industries were among major gainers on the Nifty, while losers were Eicher Motors, GAIL, Tech Mahindra, Vedanta and Dr. Reddy’s Labs.

Among sectors, auto, IT ended lower, while some buying seen in the energy, infra, PSU bank and FMCG.

Zuari Agro Chemicals approves rights issue: The rights issue committee in its meeting held on July 3, 2019, has approved the issue of Compulsory Convertible Debentures of face value Rs 120 each. It includes 3,36,46,405 CCDs aggregating u pto Rs 405 crore.

Rights entitlement ratio is 4 CCDs for every 5 equity shares held by eligible equity shareholder of the Company as on the record date, i.e., ratio of 4:5

Europe trades higher: Action on world markets focused on bonds on Wednesday, with a fresh slide in benchmark debt yields on simmering global trade war and recession fears, central bank easing bets and ebbing oil prices.

EU leaders' nomination of IMF chief Christine Lagarde as Mario Draghi's replacement at the helm of the European Central Bank reinforced expectations of monetary policy easing in the bloc.

Traders greeted the decision by sinking German 10-year Bund yields to record lows of minus 39 basis points first thing and Italian two-year yields back into negative territory for first time in over a year.

Kotak on Midcap Valuation

"We continue to see more value and upside in the mid & small caps Vs the large caps in the longer run. Today there is lack of buying interest in the mid & small cap space due to rich valuations of Nifty-50 and some kind of risk aversion. Broader participation in the market could take some time and improve as the micro lead indicators show signs of improvement. However, this lean period also offers a very good opportunity to long term investors with a three -five years view to accumulate good quality mid & small cap stocks trading at reasonable valuations (i.e.<15x)," Kotak said.

Bharat Gears Jumps 5%

Bharat Gears shares gained 5 percent intraday after acquisition of auto clutch maker which has business in India and abroad.

"Board of Directors, on July 2, approved the acquisition of 1,48,77,038 equity shares constituting 100 percent of the equity paid-up capital of Xlerate Driveline India Limited," company said in its BSE filing.

Company bought Xlerate for Rs 9.42 crore, at a price of Rs 6.33 per share and said would complete transaction by October 31, 2019.

Market Update: Benchmark indices are trading flat with positive bias as Nifty holding above 11,900.

At 11:16 hrs IST, the Sensex is up 23.20 points or 0.06% at 39839.68, and the Nifty up 4.50 points or 0.04% at 11914.80. About 1070 shares have advanced, 821 shares declined, and 106 shares are unchanged.

Aster DM Shares Climb 4%

Aster DM Healthcare shares rallied 4 percent intraday after global investment firm HSBC feels the stock traded at steep discount to global emerging markets' peers.

"Company trades at over 40 percent discount to GEM peers despite a strong profile. We maintained buy call on the stock with a target price at Rs 205, implying 64 percent potential upside from current levels," the brokerage said.

Bharat Forge Shares Turn Volatile

Bharat Forge shares turned volatile after further sharp fall in North America Class 8 truck orders in June.

Total North America Class 8 truck orders plunged 68.9 percent to 13,000 units in June 2019, against order of 41,819 units in same month last year.

However, Class 8 truck orders increased 25 percent in June, compared to 10,400 units in May 2019.

Gold Update: Gold prices climbed over 1% to hit a one-week high on Wednesday, helped by a subdued dollar as renewed concerns over global trade encouraged safe-haven demand and drove down U.S. yields.

Dollar Update: The dollar struggled on Wednesday, having been nudged off two-week highs as fading optimism over any near-term Sino-U.S. trade deal revived safe-haven demand and drove U.S. yields down.

Crude Update: Oil prices edged higher on Wednesday, steadying after a more than 4% fall in the previous session, as extended output cuts by OPEC and its allies helped underpin prices despite growing concerns about weak demand.

Market opens: Benchmark indices opened lower on July 2 with Nifty below 11,900 level.

At 09:16 hrs IST, the Sensex is down 47.44 points or 0.12% at 39769.04, and the Nifty down 10.40 points or 0.09% at 11899.90. About 331 shares have advanced, 218 shares declined, and 35 shares are unchanged.

BPCL, IOC, IndusInd Bank, UPL, Asian Paints are among the major gainers on the indices, while losers are Vedanta, Tata Steel, Hindalco, TCS, Tech Mahindra, Bajaj Finance, ONGC, HDFC, Eicher Motors and Indiabulls Housing.

On the sectoral front, IT, metal and FMCG are trading marginally lower, while buying seen in the auto, infra and energy space.

Rupee Opens: The Indian rupee opened higher at 68.85 per dollar on Wednesday versus previous close 68.93.

Market at pre-open: It is firm start for the indices on July 3 with Nifty around 11,930.

At 09:02 hrs IST, the Sensex is up 116.08 points or 0.29% at 39932.56, and the Nifty up 21.60 points or 0.18% at 11931.90.

CLSA on ITC

Maintain buy, target at Rs 365 per share

Gross GST collection in June reflecting underlying eco slowdown

Gap between gross & net GST collection remains high

CLSA on Pharma

Concerns on slowdown, substitution and policy threat being overthought

Trailing 12-month growth of 10-12% a better measure of market growth

Widening price controls a looming risk

Volume-led growth should be a central theme in medium to long-term

Credit Suisse on IT Services

Expect weak margins to be the consistent theme across companies

See a margin decline of 105-250 bps in Q1

Additionally, there would also be company-specific factors

Localisation for Infosys, weak revenue seasonality for Tech Mahindra

Upfront IBM deal investments for HCL Tech

Expect Tech Mahindra & HCL Tech to recoup margin in Q2 as revenues pick up

Expect TCS to lead the quarter with 2.9% CC growth followed by Infosys (2.4% organic)

Wipro Likely To Report 0.4% Growth; Q1 Has Historically Been Weak For Tech Mahindra

Credit Suisse on Shriram Transport

Maintain neutral call, target at Rs 1,100 per share

FY20 growth expected to be back-ended; group merger not off the table

HSBC on Aster DM

Maintain buy call, target at Rs 205 per share

Presence across segments support rev & margin gains in Middle East

Citi on Tata Power

Maintain buy, target at Rs 76 per share

Reports say power regulators may be barred from allowing Regulatory asset creation

Technical Analyst, Prakash Gaba:

We said ‘technically the next level to watch would be 11,927 and supports around 11,723’. The Nifty climbed up towards 11,927 and has closed in the green. Technically now the next level to watch would be 11,968-12,004 and support to watch would be 11,800.

We said ‘technically the next level to watch would be 31,427-31,568 and supports around 31,141. The Nifty Bank opened near 31,427 and traded down to closed mildly in the red. Technically now 31,003 and 31,568 on the upside are the levels to watch.

Asian shares subdued: Asian shares were subdued on Wednesday as initial enthusiasm over the latest U.S.-China trade truce was overtaken by fresh concerns over Washington's threat of tariffs on additional European goods.

Wall Street ends higher: US stocks managed modest gains on Tuesday after holding near the unchanged mark for much of the session as enthusiasm over the U.S.-China trade truce faded after the United States threatened tariffs on additional European goods.