Sensex up 636 points on possible roll-back of higher tax on FPIs

Nifty index managed to hold its previous day lows and consolidated in first half of the session but witnessed sharp movement towards 11,050 zone at latter part of the day. It formed a bullish candle on daily scale as sharp buying interest was seen and it gained 177 points to close above 11,000 zones after five trading sessions.

"Now till it holds above 10,950 zone it could extend its gains towards 11,111 then 11,150 zones while on the downside supports are seen at 10,950 then 10,880 levels," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Index opened marginally higher in today session and managed to hold streak whole day, after making low at 10843 index managed to close near day high with strong gains of 1.6 percent. Index managed to give closing above 11k mark hinting we may see some more short covering in coming session which in result can push index towards 11,100-11,200 zone, support for index is coming near 10,960-10,850 zone.

Nifty bank has given closing at 28,110 with gains of nearly 1.50 percent, immediate support for nifty bank is coming near 27,850-27,600 zone and resistance is coming near 28,350-28,500 zone.

Consolidated net profit up 32.9 percent at Rs 165.6 crore versus Rs 124.6 crore and revenue was up 2.6 percent at Rs 1,909.2 crore against Rs 1,860.4 crore, YoY.

EBITDA was up 25.8 percent at Rs 341.4 crore versus Rs 271.4 crore and EBITDA margin was at 17.9 percent against 14.6 percent.

Market close: After remained volatile in the first half on August 8, the bulls took the charge in the second half and help Nifty to close above 11,000 after media reports suggested that the government is likely to roll-back recently impose a higher tax on foreign portfolio investors (FPIs).

At close, the Sensex was up 636.86 points at 37,327.36, and the Nifty was up 177 points at 11,032.50. About 1379 shares have advanced, 1020 shares declined, and 149 shares are unchanged. 

HCL Technologies, Tata Motors, JSW Steel, Reliance Industries and M&M were among major gainers on the indices, while losers were Tata Steel, Cipla, UltraTech Cement, Indiabulls Housing and IndusInd Bank.

All the sectoral indices ended higher led by the IT, auto, bank energy, FMCG, metal, pharma and infra.

The company posted net loss at Rs 601.4 crore against loss of Rs 634 crore, while net interest income (NII) was up 8.7 percent at Rs 1,335 crore against Rs 1,228 crore, YoY.

The gross NPA was at 24.85 percent versus 25 percent and net NPA was at 8.98 percent against 9.72 percent, QoQ.

Thermax has reported a whopping 28 percent year-on-year growth in June quarter profit at Rs 62.76 crore, driven by strong growth in energy business. Profit in same period previous year was reported at Rs 48.97 crore.

Consolidated revenue from operations grew by 34.5 percent to Rs 1,392.45 crore compared to year-ago as energy business, which contributed 83 percent to total topline, registered a 45 percent year-on-year growth in Q1.

Lupin announced the completion of the United States Food and Drug Administration (USFDA) inspection carried out at its Nagpur oral solid manufacturing facility. The inspection was carried out between August 5, 2019 and August 8, 2019. The inspection for the oral solid facility at Nagpur closed without any 483 observations. 

The benchmark indices has reacted positively after a news that the government is likely to roll-back recently imposed higher tax on FPIs.

At 14:30 hrs IST, the Sensex is up 413.89 points or 1.13% at 37104.39, and the Nifty up 109.50 points or 1.01% at 10965. About 1065 shares have advanced, 1148 shares declined, and 126 shares are unchanged. 

Shares of Take Solutions rose more than 8 percent on August 8 on the back of robust numbers for the quarter ended June 2019 (Q1FY20).

The company has registered 61.8 percent jump in its Q1 consolidated net profit at Rs 45.1 crore against Rs 27.87 crore in the quarter ended March 2019.

Revenue of the company rose 9 percent at Rs 582.7 crore against Rs 533.9 crore.

"In the US, the company continues to grow on new launches and injectables. The management expects strong growth in injectables and other new launches to drive US sales and margins. Acquisitions of Sandoz and spectrum augurs well as this offers a footprint in the derma and oncology branded segment in the US and in a way fills the portfolio gap. There will be significant debt addition nonetheless. However, looking at the broader picture of synergy and earlier history of successful acquisitions, we believe the company is well poised to manage this added burden. Aurobindo possesses one of the best enduring ecosystems among peers (vertically integrated model, lower product concentration)," said the brokerage which has a buy call on the stock with a target price at Rs 735, implying 32 percent potential upside from current levels.

Buzzing: Shares of Aurobindo Pharma rallied 7.8 percent on August 8 after June quarter earnings beat analyst expectations on all parameters.

Shares of HDFC Life Insurance Company gained more than 5 percent intraday to hit a record high of Rs 545 after MSCI added the stock to its Global Standard Index.

The stock rallied 42 percent in last six months amid strong demand.

However, MSCI decided to delete Union Bank of India from its Global Small Cap Index. After this news, shares of Union Bank of India corrected 2 percent at Rs 62.40.

Share price of Maruti Suzuki India shed 1 percent intraday August 8 after company's production fell in the month July 2019.

The company has reported 25.35 percent fall in its July 2019 production at 1,33,265 units against 1,78,533 units in July 2018.

Siemens rises 5% post Q3 show: Shares of Siemens added 5 percent on August 8 as company posted better numbers for the quarter ended June 2019.

The company's Q3FY20 profit jumped 21.4 percent to Rs 248.1 crore versus Rs 204.4 crore in the same quarter last fiscal.

Buzzing: Shares of HCL Technologies rose more than 4 percent on August 8 as brokerages are maintaining the buy rating on the stock despite company posted decline in its Q1 net profit on August 7.

Deutsche Bank on RBI Policy                    

RBI cuts 35 bps, as we expected 

Repo Rate likely to go down to at least 5%

MPC may cut policy rates by another 40 bps in the rest of this financial year

Expect RBI to pause on the October 4 policy meet 

See RBI delivering a 25 bps rate cut in the December policy

Further rate cuts are contingent on NBFC sector recovery prospect

If NBFC problem worsens, we do not rule out possibility of further rate cuts in FY21 

If NBFC sector stabilises, don’t expect RBI to cut the Repo Rate below 5%

RBI’s inflation projection is broadly realistic

There could be more downside risks to GDP growth if NBFC sector problems linger

Citi on RBI Policy                   

MPC calibrates quantum of cut; focus on growth revival

In near-term, extent of policy rate cuts would be growth dependent 

There is sufficient headroom to stay near 4% inflation 

Credit Suisse on Lupin             

Outperform call, target at Rs 860 per share 

Good results; working capital has started coming down

Both sales & EBITDA results in-line 

Citi on Lupin            

Sell call, target at Rs 710 per share 

Stronger US rev helped offset slower-than-expected growth in other markets

See some earnings recovery off a low base 

Continuing challenges in key markets & rich valuations remain concerns 

Credit Suisse on Voltas           

Outperform call, target at Rs 685 per share 

Stronger than expected revenue benefit of extended summer

Seasonal benefit stronger than expected

Nomura on HPCL                  

Buy rating, target at Rs 380 per share 

Weak margin & high inventory loss in Q1

Marketing margin to remain decent & refining to benefit from IMO 2020/BS-VI 

BNP Paribas on HPCL          

Hold rating, target cut to Rs 253 from Rs 283 per share

Reported poor results despite adjusting for inventory losses & FX gains

Marketing weakness along with inventory losses a surprise

Citi on HPCL            

Buy rating, target at Rs 360 per share 

Maintain positive view on the OMCs as political uncertainty is behind us

Prefer BPCL & HPCL to IOC  

CLSA on HPCL         

Sell call, target at Rs 210 per share 

Core performance below estimate 

Reported PAT higher on lower inventory loss & higher FX gain

CLSA on HCL Tech                 

Maintain buy rating, target at Rs 1,380 per share

Stellar revenue beat with organic growth accelerating above larger peers 

Organic growth guidance raised on large deal ramp-ups & digital traction

Nomura on HCL Tech          

Buy rating, target at Rs 1,270 per share 

Improvement in organic growth led by better than ramp-up in large deals is positive

Miss on Q1 margin & guidance of tax rate of 24% in FY20 are negative

BNP Paribas on HCL Tech                  

Buy rating, target cut to Rs 1,200 from Rs 1,240 per share

Well on track for FY20 Targets 

Cut FY20-22 EPS estimates by 4% for Q1 results & higher tax rates

Jefferies on HCL Tech         

Hold rating, target raised to Rs 1,120 from Rs 1,090 per share

Reported stronger than expected revenue growth of 4.2% QoQ in CC

Expect FY20 margin to be at lower end of guided range of 18.5-19.5%

CLSA on Tata Steel               

Sell rating, target cut to Rs 320 from Rs 395 per share

Weakening margin took a toll on financial performance

Cut FY20 earnings by 22% & our FY20-21 EPS are 31-40% below street

CLSA on Adani Ports            

Buy rating, target at Rs 510 per share 

Coal & pricing drive solid growth 

Weak economy sees lower-end of guidance & gasification on-track

Citi on Adani Ports               

Neutral call, target cut to Rs 416 from Rs 417 per share

Maintain neutral due to past incidences of less than optimal capital allocation

Co sees 10% cons cargo growth in FY20 vs 10-12% earlier

CLSA on Ramco Cements                  

Buy rating, target raised to Rs 970 from Rs 950 per share

44% YoY growth in EBITDA, expansion with an eye on its balance sheet

Co better placed than all its peers in the region

CLSA on Cipla         

Downgrade to sell from outperform, target cut to Rs 460 from Rs 600 per share

Near-term catalyst absent; cut FY20-22 EPS estimates by 9-14%, 

Negative surprise was a 12% YoY decline in India sales 

Nomura on Cipla                   

Neutral rating, target at Rs 588 per share 

Revenue miss on disruption in distribution in India trade generics

EBITDA 8% below estimates; adjusted for Ind-AS, EBITDA miss at 10%

Citi on Cipla             

Neutral call, target cut to Rs 580 from Rs 600 per share

Co beats expectations on EBITDA & net income 

Various moving parts make it difficult to gauge underlying strength of numbers

Jefferies on M&M               

Buy rating, target at Rs 720 per share 

M&M+MVML EBITDA/EBIT largely in-line with estimate 

Weaker automotive margin was offset by better margin resilience in tractors

Maintain sell call, target cut to Rs 495 from Rs 590 per share

Earnings outlook has deteriorated, led by weakening tractor demand

There’s a sharp fall in volumes of its legacy SUVs

Market Opens: It is a positive start for the Indian indices on August 8 with Nifty around 10,900.

The Sensex is up 173.11 points at 36863.61, while Nifty is up 47.20 points at 10902.70. About 363 shares have advanced, 165 shares declined, and 18 shares are unchanged. 

Indiabulls Housing, Eicher Motors, Adani Port, IOC, HPCL, BPCL, Yes Bank, Hero Motocorp, HCL Tech are among major gainers on the indices in the early trade, while losers include Tata Steel, Cipla, Grasim, Maruti Suzuki, Coal India, ONGC and Asian Paints.

Among sectors, except metal other indices are trading higher led by the IT, auto, bank, infra, energy, pharma and FMCG.

Market in pre-opening: The benchmark indices are trading flat to positive in the pre-opening session on August 8.

At 09:01 hrs IST, the Sensex is up 97.88 points or 0.27% at 36788.38, and the Nifty up 36.20 points or 0.33% at 10891.70.

Spandana Sphoorty Financial IPO subscribed 1.05 times: The initial public offering (IPO) by microfinance lender Spandana Sphoorty Financial got fully subscribed on August 7, the final day of the issue, led by support from qualified institutional buyers.

Wall Street ends mixed: The S&P 500 recovered from steep early losses to end slightly higher on Wednesday as investors snapped up oversold shares and bond yields rebounded from significant lows that raised fears about a recession.

Asian markets trade firm: Asian shares braced for more volatility on Thursday as eye-catching easings by central banks stoked fears of global recession, driving US yields to near-record lows and lifting gold past USD 1,500 for the first time since 2013.

SGX Nifty: Trends on SGX Nifty indicate a flat opening for the broader indices in India, a gain of 4 points or 0.04 percent. Nifty futures were trading around 10,869-level on the Singaporean Exchange.