Infosys lifts Sensex 160 points, Nifty fails to hold 11,600; mid, smallcaps fall

CNBC

Market Closing

The rally in Infosys drove benchmark indices higher but broader markets underperformed. The BSE Sensex was up 160.48 points at 38,896.71 and the Nifty50 gained 35.90 points at 11,588.40.
The market breadth was in favour of bears as about two shares declined for every share rising on the BSE. The Nifty Midcap and Smallcap indices slipped nearly a percent each.
Market Update:
Benchmark indices continued to trade higher, driven largely by Infosys after its Q1 earnings.
The BSE Sensex rose 165.12 points to 38,901.35 and the Nifty50 gained 38.50 points at 11,591.
Fund Raising
Shriram Transport Finance Company said it proposed a public issue of upto Rs 10,000 crore by issuing secured redeemable non-convertible debentures (NCDs) of the face value of Rs 1,000 each.
The company is coming out with its Tranche 1 Issue of NCDs having a base size of Rs 300 crore with an option to retain oversubscription aggregating up to Rs 10,000 crore which is the shelf limit.
The Tranche 1 Issue will open for subscription on Wednesday, July 17, 2019 and is scheduled to close on Friday, August 16, 2019, with an option of early closure or extension, the NBFC said.
Market Update:
Benchmark indices remained moderately higher amid volatility as traders await more set of earnings.
The BSE Sensex was up 137.21 points at 38,873.44 and the Nifty50 gained 32.80 points at 11,585.30.
Bajaj Consumer Care Sares Rally 3%
Bajaj Consumer Care shares gained 3 percent intraday after company's June quarter earnings report.
Consolidated net profit grew by 8.9 percent to Rs 56.7 crore in quarter ended June 2019, against Rs 52.1 crore in same period last year.
Revenue from operations during the quarter increased 7.6 percent to Rs 240.7 crore compared to corresponding period previous fiscal.
DHFL Says Working With Creditors To Avoid Haircut
Crisis-hit property finance firm Dewan Housing Finance Corporation (DHFL) said it was working closely with its creditors and stakeholders on a resolution plan that would not require its lenders to take a haircut.
The statement comes after the shadow bank warned on Saturday it might not survive as a going concern and reported a net loss of Rs 2,223 crore for the March quarter.
"While the sectoral stress is well known for months, DHFL has withstood intense pressure and continues to remain strong and solvent," the company said in a statement on Monday. 
Results to be announced on July 16
HDFC Asset Management Company, TV18 Broadcast, Network18 Media & Investments, Next Mediaworks, Federal Bank, Agro Tech Foods, DCB Bank, 5Paisa Capital, Jay Bharat Maruti and Vikas Multicorp will declare their June quarter earnings on July 16.
Relaxing FDI Limit In Insurance Intermediaries To Strengthen Distribution Capabilities: Fitch
The Budget proposal of relaxing foreign investment limit in insurance intermediaries will strengthen distribution capabilities and increase international involvement, particularly from developed markets, Fitch Ratings said.
The Budget 2019-20 tabled in Parliament on July 5, permitted foreign companies to own up to 100 percent in insurance intermediaries, including insurance agents, brokers, loss assessors and surveyors, from the 49 percent, to attract more foreign direct investment into the industry.
"India's proposed removal of the foreign-ownership cap on insurance intermediaries is likely to increase competition, strengthen distribution capabilities to enhance insurance penetration and boost M&A in the medium to long term," Fitch Ratings said in a statement.
Bhushan Power & Steel case
National Company Law Tribunal allowed for forensic audit report to be shared with JSW Steel, reports CNBC-TV18.
JSW Steel was the highest bidder for Bhushan Power with a plan of Rs 19,700 crore.
Earnings
Bajaj Consumer Care reported a 9 percent year-on-year growth in June quarter profit at Rs 56.71 crore against Rs 52.07 crore in same quarter last fiscal.
Revenue grew by 7.6 percent to Rs 240.74 crore compared to Rs 223.75 crore in year-ago.
DHFL Clarifies
Company said the entire set of management notes are basis its intent to be prudent and conservative in adequately providing-for in results.
Some of the media have used select portions of its statement and created panic/ confusion especially regarding the statement on the going concern, it added.
DHFL urged that the entire statement be read in entirety, so that the news is factual and not sensationalized.
"While the sectorial stress is well known for months, DHFL has withstood intense pressure and continues to remain strong and solvent. DHFL has also cleared significant amount of obligation to the tune of Rs 41,800 crore since September 2018. We are closely working with the stakeholders/creditors to ensure that there is a comprehensive resolution, without any hair cut to the lenders, as has been speculated by few sections of the media," company said in its BSE filing.
Fitch on Energy Companies' Ratings
A reduction of direct controlling stakes by the government of India (BBB-/Stable) in large state-owned energy companies is unlikely to negatively impact the ratings on these entities, as long as the government maintains majority effective ownership and broad control of their activities, Fitch Ratings said.
An official who steers the government's asset sale department said in a media interview that the government may reduce its direct controlling stakes in large energy companies, including Oil and Natural Gas Corporation Limited (ONGC), Indian Oil Corporation Ltd (IOC, BBB-/Stable), NPTC Limited (NTPC, BBB-/Stable) and GAIL (India) Limited (GAIL, BBB-/Stable), while maintaining effective controlling stakes of at least 51 percent through arms such as Life Insurance Corporation of India. This comes as the government has set an enhanced target of Rs 1.05 lakh crore of divestment receipts for the financial year ending 31 March 2020 (FY20). 
Monsoon Update
Skymet said monsoon will be weak across India over next two weeks, reports CNBC-TV18 quoting Cogencis.
Break in monsoon may hit cotton, soybean and maize sowing, it said.
Europe Update
European markets opened higher despite worries China’s economy is slowing amid a trade war with the US.
France's CAC fell 0.6 percent, Germany's DAX was down 0.84 percent and Britain's FTSE slipped 0.3 percent.
Market Update:
Benchmark indices continued to consolidate after a 2 percent loss in previous week.
The BSE Sensex was up 86.13 points at 38,822.36 and the Nifty50 gained 14.50 points at 11,567.
The market breadth was in favour of bears. About two shares declined for every share rising on the BSE.
Sun Pharma Rallies 4%
Sun Pharmaceutical Industries shares rallied 4 percent intraday after company received a rare double upgrade from global research house Morgan Stanley.
The brokerage upgraded stock to overweight and raised price target to Rs 505 from Rs 470 per share, implying 24 percent potential upside as it expects revival in earnings FY21 onwards.
Specialty ramp-up, manufacturing rationalisation, cost control and Halol will help FY21 margin, Morgan Stanley said, adding FY20 will be a transitional year followed by year of cost normalisation.
Allahabad Bank Under Pressure
Shares of public sector lender Allahabad Bank crashed 14.5 percent intraday after company reported a fraud of Rs 1,775 crore by Bhushan Power & Steel.
It was the second lender after Punjab National Bank to report fraud in Bhushan Power.
"It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks," Allahabad Bank said.
Technical Outlook
"For the week, we are anticipating down move to continue at a gradual pace. At 11,300, we should be a contra buyer in the market, and look to buy strong and largecap companies in the market.  As per option data, markets are down but not oversold, which is the reason that short covering trend is missing even though frequent pull back moves are occurring," Ashish Nanda EVP & Business Head - PCG, Commodities and Currency Business, Kotak Securities said.
Market Outlook
Ajit Mishra, Vice President-Research at Religare Broking expects further slide in the benchmark and suggests continuing with “sell on rise” approach till Nifty holds below 11,800.
"On the other hand, stocks may see volatile swings across the board; in reaction to the earnings thus we advise focusing on stock selection and trade management," he said.
Zero Observations for Natco's Plant
Natco Pharma said there was a successful completion of regulatory inspection from the US Food and Drug Administration (FDA) for its active pharmaceutical ingredient (API) facility in Chennai, conducted during the period July 8-12, 2019. The regulatory audit resulted in zero observations, it added.
Market Update
Benchmark indices were off their opening high on correction in metals and select banks stocks.
The BSE Sensex was up 95.96 points at 38,832.19 and the Nifty50 rose 19.10 points to 11,571.60. About 795 shares advanced against 604 declining shares on the BSE.
Events To Watch this week
The earnings season would gain pace in the coming week and some of prominent names like Wipro, Yes Bank, ACC, Dabur, IndiGo, Reliance Industries and HDFC Bank will announce their numbers during the week along with several others. On the macroeconomic front, WPI inflation will be unveiled on July 15. Besides, progress of monsoon, crude oil movement and global developments will also remain on participants’ radar, Ajit Mishra, Vice President-Research, Religare Broking said.
DHFL in Bears' Trap
Dewan Housing Finance Corporation (DHFL) shares were locked at 10 percent lower circuit at Rs 61.65 after posting a loss for first time since inception and warning about its survival.
There were pending sell orders of 6,49,477 shares, with no buyers available on the BSE. The stock had lost nearly 90 percent of its value in the last one year.
Infosys Rallies
Infosys shares rallied more than 4 percent after IT services company revised its full year constant currency revenue growth guidance upwards to 8.5-10 percent.
Market Opening:
Benchmark indices started off day on a positive note, with the Sensex rising 201.47 points to 38,937.70 and the Nifty climbing 47.30 points to 11,599.80.
Crude Oil Update:
Oil prices slipped after China posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world's largest crude oil importer.
Brent crude futures for September fell 0.16 percent to $66.62 a barrel while US crude for August was down 0.32 percent to $60.02 a barrel. Both contracts last week posted their biggest weekly gains in three weeks on cuts in US oil production and diplomatic tensions in the Middle East. Source: Reuters.
China GDP Data
World's second largest economy China reported April-June GDP growth at 6.2 percent YoY, which was in line with analyst expectations.
Rupee Opening:
The Indian rupee started off day on a positive note, appreciating 14 paise to 68.54 against the US dollar. Friday's close was 68.68 a dollar.
Market Pre-Opening Trade
The pre-opening trade and SGX Nifty indicated that there could be strong start for benchmark indices. The Sensex gained 505 points at 39,241.23 and the Nifty50 rose 45 points to 11,597.50.