Sensex ends flat, Nifty above 9650; Lupin and RIL gain

07 Jul 2017

3:30 pm Market at Close: Equity benchmark indices ended the session on a flat note, with a tad negative bias. The Nifty close above 9650-mark.

The Sensex closed down 8.71 points at 31360.63, while the Nifty ended 8.75 points lower at 9665.80. The market breath was narrow as 1393 shares advanced against a decline of 1284 shares, while 137 shares were unchanged.

Lupin and Reliance were the top gainers on both indices, while ICICI Bank, ONGC, Bharti Infratel, and Indiabulls Housing lost the most.

3:00 pm Market Outlook: ''This earning season will be marked by impact of destocking ahead of goods and services tax (GST) implementation and also postponement of demand. So we expect some kind of volatility coming out of that in this earnings season,'' Swati Kulkarni, Executive Vice President and Fund Manager at UTI MF said.

2:30 pm Market Check: Sounding extremely bullish on the market going forward, JM Financial's Associate Director & Technical Analyst Gautam Shah said the Nifty is on track to hit 10,000-level in the next 6 weeks.

''Looking at the charts, it is pretty clear that the bulls are here for the long run, the marathon,'' Shah said in an interview to CNBC-TV18.

The bullish momentum in the market was regained post its consolidation phase that lasted over the past one month. Shah said the movement only helped the market create a foundation for a breakout. ''With earnings lined up now, the market is getting prepared for that big breakout.'' The levels of 9550-9600 seen during this phase becomes a major support area, he added.

2:00 pm Market Check: Equity benchmarks recouped losses in afternoon trade, with the Sensex turning in positive terrain and the Nifty inching towards 9,700 level. The recovery was driven by index heavyweight Reliance Industries that rallied 2 percent to hit a fresh 52-week high.

The 30-share BSE Sensex was up 21.12 points at 31,390.46 and the 50-share NSE Nifty gained 1.10 points at 9,675.65. About 1,411 shares advanced against 1,154 declining shares on the BSE.

1:45 pm NESCO on radar: NESCO is in focus after Franklin Templeton bought 1 lakh shares in the company.

NESCO has an exhibition centre by the name Bombay Exhibition Centre.

In an interview to CNBC-TV18, Sumant Patel, CMD of NESCO spoke about the latest happenings in the company.

1:28 pm Upper circuit: Hindustan Foods shares were locked at 10 percent upper circuit at Rs 176.30 intraday on bagging two orders for the supply of leather shoes.

"... has successfully bagged orders from two new customers for manufacturing and supply of leather shoes," the Goa-based company said in its filing.

One order is from Reliance Brands under Steve Madden brand and second is from Arvind Lifestyle Brands under US Polo & Arrow brands.

1:05 pm Market Check: Equity benchmarks continued to fall amid rangebound trade in afternoon, following weakness in European and Asian markets.

The 30-share BSE Sensex was down 42.67 points at 31,326.67 and the 50-share NSE Nifty fell 17.50 points to 9,657.05 despite positive market breadth.

About 1,334 shares advanced against 1,166 declining shares on the BSE.

Lupin retained its top position in the buying list among Sensex stocks, up 4.5 percent followed by Dr Reddy's Labs (up 2 percent), Cipla (1.4 percent) and Sun Pharma (0.9 percent).

12:50 pm MOSt on NMDC: NMDC share price rallied more than 3 percent intraday after Motilal Oswal, with its buy rating, expects the stock to give 59 percent returns at Rs 180. It is betting on company's strong fundamentals with attractive valuations, though it sees some pricing pressure.

"At conservative 59 percent payout versus last five-year average of 79 percent, the dividend yield at 5.3 percent is attractive. Although there is near-term pressure on pricing, the volumes growth outlook remains robust due to the company's strong competitive advantage. Valuations are extremely attractive. We value the stock at Rs 180, based on 6.5x EV/EBITDA FY19 and book value for capital work in progress (CWIP)," it explained.

12:35 pm Europe opening: European bourses opened lower as investors look out for fresh economic data, a G-20 meeting in Hamburg and continue to mull the possible end of monetary stimulus from central banks.

US President Donald Trump is to meet Russian President Vladimir Putin for the first time at a G-20 meeting in Germany. Their first encounter happens only hours after Trump said that Russia had interfered in the 2016 election and blamed the country for a "destabilizing behavior".

12:10 pm Buzzing: Aditya Birla Fashion & Retail (ABFRL) shares extended gains after ICICIdirect has initiated coverage on the stock with a buy recommendation and a target price of Rs 210. The stock rallied over 1.5 percent intraday after this report, in addition to 0.8 percent upside in previous session.

ABFRL enjoys a vantage position in its men's portfolio built over wide offerings across price points (mass to luxury), broad categories (men's, women's and kidswear & accessories) and diversified market channels (MBO+EBO+SIS).

"Newer brands coupled with the existing portfolio would provide cohesive growth to company's revenues, which are expected to grow at a CAGR of 15 percent to Rs 8,841 crore and return on capital employed expansion to 14.6 percent (against 2.4 percent currently)," it reasoned.

11.43 am Market Check: Equity benchmarks continued to consolidate with negative bias but the broader markets outperformed in late morning trade.

The 30-share BSE Sensex was down 48.94 points at 31,320.40 and the 50-share NSE Nifty fell 19.40 points to 9,655.15.

The BSE Midcap index gained 0.1 percent and Smallcap was up 0.3 percent on positive breadth. About 1,251 shares advanced against 1,070 declining shares on the exchange.

11:20 am IPO: Insurance Regulatory and Development Authority has given an in-principle approval for the IPO of SBI's life insurance subsidiary, reports CNBC-TV18 quoting sources.

It is learnt that SBI Life is likely to file draft red herring prospectus (DRHP) with capital market regulator SEBI in coming weeks.

The life insurance subsidiary of the country's largest bank will approach the insurance regulator again for final nod after SEBI approval.

SBI Life is expected to raise Rs 7,400-8,500 crore through IPO, which valued it at Rs 65,000-70,000 crore, sources said.

If it lists on the bourses, then it would be the second direct listing of an insurance company. So far ICICI Prudential Life Insurance (which started trading in September last year) is the only insurance company listed on exchanges.

11:00 am Market Outlook: Sunil Singhania, CIO-Equity, Investment at Reliance Mutual Fund feels this is a good time for the mutual fund industry. Growth in mutual fund industry will be healthy & robust, he believes.

Investors have started diversifying to financial assets from physical assets, he said.

Majority of analysts feel the markets are currently highly valued, especially after a 18 percent rally since the beginning of 2017. Earnings have to recover and economic growth has to be over 7 percent in current financial year (given expectations of normal monsoon) to match current market valuations, according to them.

According to Singhania, the markets are never fairly valued, whether it's undervalued or mildly overvalued.

"We have had corrections in recent past but it hasn't been that long. Inflows from retail investors in mutual fund will continue despite market correction," he said.

He is seeing euphoria in some sectors of the market.

He likes PSU banks having adequate capital & better placed to raise capital. Insolvency & Bankruptcy Code can be a near-term pain but a good initiative to resolve non-performing assets (NPAs), he feels.

10:45 am Earnings: Infosys is scheduled to report its results for the quarter ended June on July 14, Friday, the IT major said in a statement on Thursday.

A meeting of the Board of Directors of the Company will be held at the Registered Office on July 13 and 14, 2017 to consider audited consolidated financial results of the Company and its subsidiaries as per Indian Accounting Standards (lndAS) for the quarter ending June 30, 2017.

The board will also consider audited standalone financial results of the Company as per lndAS for the quarter 'ending June 30, 2017. The financial results of the IT major will be approved by the board on July 14.

Infosys shares underperformed benchmark indices by a wide margin. The IT major slipped a little over 6 percent in the last 6 months and nearly 20 percent in the last one year.

10.24 am Market Check: Equity benchmarks continued to trade lower in morning trade, weighed by banking & financials and auto stocks.

The 30-share BSE Sensex was down 52.98 points at 31,316.36 and the 50-share NSE Nifty fell 22.40 points to 9,652.15.

HDFC, ITC, ICICI Bank, Infosys, Tata Motors, Asian Paints, Axis Bank and Maruti Suzuki were top contributors to Sensex' losses.

Lupin was biggest gainer, up 4.5 percent followed by Dr Reddy's Labs with 2 percent upside.

10:05 am Buzzing: Glenmark Pharma share price rose nearly 2 percent intraday on approval from the US health regulator for antihypertensive drug.

"Glenmark Pharmaceuticals Inc, USA has been granted final approval by the United States Food & Drug Administration (US FDA) for Amlodipine and Olmesartan Medoxomil tablets, 5 mg/20 mg, 5 mg/40 mg, 10 mg/20 mg, and 10 mg/40 mg," the pharma company said in its filing.

Amlodipine and Olmesartan Medoxomil is the generic version of Azor Tablets of Daiichi Sankyo Inc.

Amlodipine and Olmesartan is a combination drug used to treat high blood pressure.

9:46 am Listing: After stellar response to the issue, AU Small Finance Bank is all set to make a debut on exchanges on July 10. The issue price is fixed at higher end of price band of Rs 355-358.

Experts feel the stock price is expected to open over Rs 400, given the overwhelming response to the public issue and indication from the grey market premium that is around Rs 75-80.

The initial public offer of AU Small Finance Bank, which was opened during June 28-30, was oversubscribed 53.60 times on strong response from QIBs and HNIs.

The portion set aside for qualified institutional buyers was oversubscribed 78.77 times and non-institutional investors 143.51 times while the reserved portion of retail investors oversubscribed 3.31 times.

AU Small Finance Bank raised Rs 1,912 crore through the issue, including Rs 563 crore from 34 anchor investors.

The public issue was an offer for sale by promoters and investors.

9:28 am GST impact: Neelkanth Mishra of Credit Suisse said GST introduced uncertainty on several fiscal fronts. Taxes subsumed under GST were to contribute nearly Rs 10.6 lakh crore in FY18 (36 percent of India's total taxes), he added.

With some assumptions, he estimates centre-state split at 45-55.

Even adjusted for the compensation pool, a 50-50 CGST-SGST split may distort tax sharing, according to him.

As compensation payments will be made to the states every two months and on a fixed growth assumption, most of the volatility, if any, would be faced by the centre, he feels.

General government spending, yields and spreads could thus see some volatility, according to Mishra.

9:15 am Market Check: Equity benchmarks started off last day of the week on a negative note, dragged by profit booking and weak global cues.

The 30-share BSE Sensex was down 39.24 points at 31,330.10 and the 50-share NSE Nifty fell 17.25 points to 9,657.30. About 602 shares advanced against 479 declining shares on the BSE.

Tata Steel, Tata Motors, Wipro, ICICI Bank, HDFC Bank, IndusInd Bank and Infosys were under pressure while Lupin gained over a percent in early trade followed by Bharti Airtel, Cipla and Eicher Motors.

Tata Teleservices gained 5 percent. JBM Auto was up on entering into electric bus segment.

MEP Infra, Balaji Amines, Prakash Industries, Speciality Restaurants, IDFC, IDFC Bank, Shriram City Union and InterGlobe Aviation were midcap gainers while RBL Bank, Bhushan Steel and Jaypee Infra were losers.

GM Breweries fell 3 percent on weak earnings in Q1.

Stocks in Asia were softer following the weaker close stateside and as global bond yields rose overnight. The Nikkei 225 declined 0.14 percent and the Kospi was off 0.23 percent.