Sensex gains 266 points, Nifty fails to reclaim 11,600; all sectoral indices in green

11 Jul 2019

Market Closing bell

The market recouped all its previous day's losses to close sharply higher after Federal Reserve chair Jerome Powell hinted at a rate cut ahead.

The BSE Sensex was up 266.07 points at 38,823.11 and the Nifty50 rallied 84 points to 11,582.90.

Hero Motocorp, IndusInd Bank, Tata Motors, Vedanta and SBI were top gainers among Sensex stocks, rising 2.5-4.6 percent while ICICI Bank, Bajaj Auto, Axis Bank, TCS and L&T were losers.

Monsoon Update

India is likely to get below-average rainfall in the next two weeks with a large deficit in the soybean and cotton growing central and western regions, a weather department official said on July 11, raising concerns over output of summer-sown crops.

"Weather model is showing deficiency in rainfall over central and western India in next two weeks," said an official with the India Meteorological Department (IMD), who declined to be named as he was not authorized to speak with media.

"The north-east and foothills of Himalaya could get good rainfall," he said.

Cadila Healthcare Gains 3%

HSBC maintained buy call on the stock but slashed price target sharply to Rs 260 from Rs 410 after cutting FY20/21 EPS estimates by 4.4 / 5.2 percent.

It feels 34 percent price correction in last three months largely factors in negatives. "We do not expect further deterioration in key segments."

The global brokerage said US generic sales should stabilise on momentum in new launches and the clarity will emerge on FDA status of Moraiya plant by early August. "India sales should see recovery from Q2FY20."

DHFL Update:

The meeting among DHFL's stakeholders concluded and exploratory talks were held on resolution plan, reports CNBC-TV18 quoting sources.

The business channel learnt from sources that lenders gave the housing finance company 7 days to present resolution proposal and the meeting said to have discussed broad contours of resolution plan and debt conversion.

Lenders said to have assured NCD holders of a comprehensive resolution plan to maximise value for all stakeholders, the report added.

DHFL remains in talks with Aion Capital, Cerberus Capital & Oaktree for potential deal.

Market Update:

Benchmark indices were trading at day's high with the BSE Sensex rising 309.49 points to 38,866.53 and the Nifty50 inching towards 11,600, up 95.30 points at 11,594.20.

Greaves Cotton Plunges 9%

Greaves Cotton shares fell 9 percent intraday after company increases stake in subsidiary Ampere Vehicles Pvt Ltd.

The engines and heavy equipment manufacturer informed exchanges that it has acquired 15,04,523 equity shares, by way of investment, in its subsidiary Ampere Vehicles Private Limited, India.

Greaves bought this additional stake through primary and secondary purchase for a total consideration of Rs 22.5 crore.

Collaboration for Tax Validation Tool

Datamatics Global Services said its collaboration with Thomson Reuters will bring together TaxAnalyze, a Tax Validation tool.

"The product will help corporates streamline their financial information, automate tax processes and ensure seamless tax calculations. The solution is powered by Thomson Reuters ONESOURCE and Datamatics TruBI," it added.

Jul 11, 12:44 PM (IST)

Tata Motors' Global Wholesales

"Global wholesales in June 2019, including Jaguar Land Rover, were at 95,503 units, lower by 5 percent compared to June 2018," Tata Motors said.

Global wholesales of commercial vehicles and Tata Daewoo range in June were at 38,846 units lower by 12 percent YoY, it added.

Company said wholesales of all passenger vehicles grew by 1 percent to 56,657 units.

InterGlobe Aviation Falls 5%

Sources told CNBC-TV18 that capital market regulator SEBI called IndiGo's Company Secretary for a meeting after a feud between Rakesh Gangwal and Rahul Bhatia over corporate governance issue.

Earlier SEBI had asked for IndiGo's response over corporate government by July 19.

Results Date

Container Corporation of India said the meeting of the board of directors of the company is scheduled on July 31 to consider the unaudited financial results for the quarter ended on 30.06.2019.

Ajmera Realty Gains 3%

Ajmera Realty and Infra India shares gained 3.5 percent intraday after company announced joint venture with local partner of Mumbai for development of commercial project.

"It will be a joint development on revenue sharing basis in Ghatkopar on a plot size of 5,310 square metre which has a potential to develop approximately 9,000 square feet of saleable area as our share of development, which may generate revenue of approximately Rs 120 crore as our share of revenue," it added.

Its proposed development is for approximately 225 units.

Technical Outlook

Going ahead 11,420-11,440 range on Nifty can be taken as a sacrosanct level whereas on the flip side, support turned resistance around 11,600 is acting as stiff resistance since last two days, Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel Broking said.

"We reiterate view that Index is likely to remain in range 11,420-11,630 and traders are advised to have a stock –specific trade with not so aggressive approach," he added.

Gold Jumps To One-Week High

Gold prices scaled a more than one-week peak, as the dollar slipped after dovish remarks from the US Federal Reserve Chairman Jerome Powell boosted the case for an interest rate cut later this month.

US gold futures jumped nearly 1 percent to $1,423.90 an ounce. Source: Reuters.

Market Outlook

"We expect to see a gradual improvement as GDP growth numbers have bottomed out. Crude oil at $75 a barrel is a risk for India," Bharat Iyer of JPMorgan said in an interview to CNBC-TV18,

The brokerage is neutral on IT sector as growth is stable but valuations are expensive while it is underweight on pharma sector.

"We expect private capex to pick up in next 2-3 quarters. Cement sector is going through a good phase & seeing greenshoots. Cement is a big pverweight for us as cement utilisation levels are improving & price increases have been sticky," he said.

FII Data

Foreign portfolio investors turned net sellers in Indian equities so far in July in the cash segment for over Rs 2,000 crore as of 10 July 2019. The selling picked up the pace soon after the Budget was announced on 5th July, and experts feel that although it is a knee jerk reaction but flows could well slow down.

Himachal Futuristic Communications Climbs 10%

Shares of optical fiber cable manufacturer Himachal Futuristic Communications rallied 10 percent intraday after reporting healthy earnings growth in June quarter.

Its profit in June quarter increased 148 percent year-on-year to Rs 117 crore driven by strong revenue mix and operating performance.

Revenue grew by 23 percent to Rs 1,343 crore in quarter ended June 2019, against Rs 1,088 crore reported in same period last year.

Market Off Opening High:

Benchmark indices were off their opening high on a bit of profit booking. The BSE Sensex rose 105.56 points to 38,662.60 and the Nifty50 gained 34.60 points at 11,533.50.

The market breadth was in favour of bulls as about 853 shares advanced against 511 declining shares on the BSE.

US Update

Fed Chief Jerome Powel, in his testimony on capital hills, last evening flagged rate cut as he sees a cooling global economy and no sign of overheating in the jobs market in US. He said manufacturing, trade and investments are weak all around the world and job data is not strong enough to tilt the balance. Inflation is still too low.

"Markets saw his comments as confirmation that rates are headed lower at the Fed’s next meeting on July 30-31," SPA Securities said.

Reaction to Strong Earnings

Shares of digital cable television and broadband services provider GTPL Hathway rallied 20 percent intraday after company reported stellar earnings performance for quarter ended June 2019.

Consolidated profit during the quarter jumped 120 percent to Rs 29.45 crore compared to Rs 13.37 crore reported in same period last fiscal.

Revenue from operations grew by 50 percent to Rs 445.5 crore with subscription business showing a whopping 47 percent growth YoY in Q1.

Market Opening:

Benchmark indices rebounded sharply and recouped some previous day's losses. The BSE Sensex was up 211.66 points at 38,768.70 and the Nifty50 gained 59.50 points at 11,558.40.

Technical Outlook

"Going ahead, breach of Tuesday’s low (11,461) would confirm breakdown from an upward sloping trend line, leading to prolonged consolidation (11,600-11,300) in coming sessions amid stock specific action as we enter Q1FY20 earning season," ICICI Direct said.

"In coming session, Nifty is likely to open on a buoyant note tracking firm global cues. We believe, Nifty futures holding above Wednesday’s low (11,468) on a closing basis would open pullback option open towards 11570-11600, else extended breather amid stock specific action," it added.

Funding

Arshiya said subsidiary Anomalous Infra Private Limited has entered into a Deoeiiture Subscription Agreement with Ascendas IT Park (Chennai) Limited (ITPC), which is also a subsidiary of AiT, for the purpose of obtaining construction funding for an aggregate amount of up to Rs 70.0 crore.

Asia Update:

Asian markets are trading in the green as Federal Reserve's Jerome Powell hinted rate cut ahead.

Japan's Nikkei and China's Shanghai Composite gained 0.3 percent each while Hong Kong's Hang Seng and South Korea's Kospi rallied over a percent each.

Rupee Opening

The Indian rupee opened at 68.30 against the US dollar, rising 26 paise compared to Wednesday's close of 68.56 a dollar after Fed's Chief hinted rate cut ahead.

Market Pre-Opening:

Benchmark indices were higher in trade in pre-opening with the Sensex rising 122.88 points to 38,679.92 and the Nifty climbing 85.10 points to 11,584.