Sensex, Nifty end the week on a strong note, ITC gains big

3:30 pm Market Check: Benchmark indices ended the session and the week on a strong note, after opening lower, index heavyweights pushed the indices up.

The Sensex closed up 64.09 points at 30921.61, while the Nifty ended up 16.80 points at 9520.90.

ITC, Sun Pharma and Cipla were the top gainers on Sensex, while Tata Motors DVR, ICICI Bank and HDFC lost the most.

3.19 pm Market gains strength: Equity benchmarks extended gains in late trade ahead of GST rollout. The Sensex was up 79.05 points at 30,936.57, and the Nifty gained 22.80 points at 9,526.90.

3:07 pm ITC in focus: ITC shares touched a record high of Rs 323.80, up 4 percent intraday as CLSA retained its buy call on the stock with a target price of Rs 375, citing likely neutral GST outcome.

"With GST set to roll-out from July 1, there still is uncertainty on rates for tobacco; our calculation suggests a decline assuming additional duty surcharge (ADS) is not charged on top of GST & cess. We, however, model in a neutral outcome which itself would drive double-digit earnings growth after two years," the research house reasoned.

ITC's FY17 operating cash flow grew 9 percent YoY which was similar to net earnings growth. Core working capital declined 10 days YoY, mainly due to lower inventory days. Capex rose 36 percent YoY, off a low base and free cash flow stayed flat YoY at Rs 9.2 per share.

Over FY17-20, CLSA expects ITC to generate free cash flow at 14 percent CAGR over FY17-20, as it expects strong earnings growth along with modest rise in capex.

3:00 pm Buzzing Stock: Shares of Career Point rose more than 9 percent intraday Friday as it has signed MoU to consider possible acquisition of Plancess Edusolutions.

The company is evaluating acquisition of majority shareholding in Mumbai based ed-tech company Plancess Edusolutions and to execute the proposed transaction, the company has entered into a confidential and exclusive memorandum of understanding (MoU) with Plancess Edusolutions.

The discussion between the two companies is in advanced stages wherein final execution shall be subject to due diligence, regulatory and other approvals, as applicable.

2:50 pm Market update: Benchmark indices recouped losses, with the Nifty reclaiming 9500 level, driven by ITC that surged to nearly 4 percent ahead of GST implementation.

The 30-share BSE Sensex was up 15.61 points at 30,873.13 and the 50-share NSE Nifty fell 1.10 points to 9,503.

2:14 pm Market Check: Benchmark indices continued to reveal cautious trade by investors ahead of the crucial switch to goods and services tax (GST), with the Nifty breaching 9550-mark as well.

The Sensex was down 60.72 points at 30796.80, while the Nifty was down 24.45 points at 9479.65. The market breadth was negative as 1142 shares advanced against a decline of 1299 shares, while 178 shares were unchanged.

Tata Motors DVR, ICICI Bank, Indiabulls Housing and Tech Mahindra lost the most, while Sun Pharma, ITC and Bank of Baroda gained the most.

1:45 pm IndiGo falls again: InterGlobe Aviation, the operator of low cost carrier IndiGo, continued to bleed for the second straight day as investors were spooked by its plan to buy Air India. The stock fell over 6 percent intraday on the back of an official statement by the carrier, which expressed the interest to buy the national airline. It had ended around 2 percent lower on Thursday as well.

The airline, in a late evening notification to the exchanges, released the letter written to the aviation ministry, expressing interest to buy the international operations of Air India and Air India Express. Alternatively, it also said that there was an equal interest on its part to acquire all of the operations of both the airlines.

1:35 pm Deutsche on Gujarat Gas: Deutsche Bank has reiterated a buy on Gujarat Gas on the back of volume growth and margin improvement.

It sees 24 percent upside potential with a target price of Rs 925 over a period of one year.

Gujarat Gas has seen improvement in volume growth on the back of declining LNG prices.

The stock corrected by 13 percent and has underperformed the broad market over the past three months. This is an opportunity for investors to add to positions in the stock as gas sale volumes should pick up from Q1FY18 by over 20 percent YoY to 6.4 mmscmd with the fall in LNG costs while margins should improve sharply from Q1FY18 with the full benefit of the price increase taken in March 2017, reduced LNG costs and rupee appreciation, Deutsche Bank said.

1:15 pm Europe update: European bourses were under pressure as major central banks suggested the era of cheap money may be coming to an end.

The pan-European Stoxx 600 was down 0.1 percent with most sectors in negative territory and major bourses pointing in opposite directions.

12.55 pm Market Check: Equity benchmarks traded moderately lower in afternoon trade as investors maintained cautious stance ahead of implementation of Goods & Services Tax from midnight.

The 30-share BSE Sensex was down 47.39 points at 30,810.13 and the 50-share NSE Nifty fell 16 points to 9,488.10.

With cautious tone, Bank of America Merrill Lynch said the impact of GST on listed company volumes and earnings may extend beyond the June quarter.

However, a combination of a seasonal pickup in sales (festive season in October; re-stocking post GST; better consumer appetite (monsoons, farm loan waivers); and the base of demonetisation quarter means companies can report strong YoY growth numbers in December.

12:25 pm BoAML on Zee: Bank of America Merrill Lynch (BoAML) has reiterated its buy rating on Zee Entertainment Enterprise with reduced price target of Rs 565.

The firm expects that the company will report weak numbers due to the GST impact on the ad revenues, sports business separation and continued impact on international business. Meanwhile, post the recent correction the risk-reward still looks favourable.

''The advertisement revenues of the company were strong in the first two months of first quarter, while June month got impacted by GST, which lead to an estimated double digit decline in the advertisement revenue,'' the firm said in its report.

''The international advertisement revenue was impacted due to continued pressure on Bangladesh revenues and currency impact leading to year on year marginal decline,'' it added.

12:05 pm GST Impact: The company, its dealers, tier I suppliers are ready for GST at least on paper because unless the button is pushed one will not know what is not working, said Pawan Goenka, MD, Mahindra and Mahindra.

He said, there was no pilot run and so it would be unrealistic to expect a smooth transition. Therefore, there could be a bit of chaos in switching from excise to GST.

He is hopeful that in a couple of months everything will settle down and the transition pain will be forgotten.

According to him, GST is a bigger change for service providers than the manufactures and so there could be some disturbances with tier 2 and tier 3 suppliers.

There is no doubt that the auto sector will have to take some financial hit due to this transition, and for the company per se, he foresees a 6 percent loss on account of non-refund of some input credits.

11:45 am Buzzing: Shares of PVV Infra is locked at 5 percent upper circuit post it has received an order from Tata Trusts for pre-cast demo of individual household latrine (IHHL) installation at Kesarapalli village, Krishna district, Andhra Pradesh.

Tata Trusts is partnering with Andhra Pradesh government by developing 264 villages covering 2.5 lakh households in Krishna district, Andhra Pradesh, for improved drinking water and sanitation systems and several livelihood enrichment programmes.

''Due to our EPS building system, featuring fast, reliable insulation, anti - seismic properties, typhoon - resistance, reliability, light weightedness, simplicity/fast to erect, durability and cost effectiveness, we are confident that we will be getting a sizeable bulk order from the total installations planned once the demo unit is approved,'' company said in press release.

11.26 am Market Check: Equity benchmarks remained under pressure in morning trade, with the Nifty struggling below 9500 level following correction in Asian peers.

The 30-share BSE Sensex was down 49.59 points at 30,807.93 and the 50-share NSE Nifty fell 16.95 points to 9,487.15.

Sun Pharma was the biggest gainer among Sensex stocks, up more than 3 percent.

11:15 am USFDA approval: Cadila Healthcare share price gained more than a percent intraday after receiving approval from the US health regulator for drug that is used for obesity.

Zydus Cadila has received the final approval from the US Food and Drug Administration to market Phentermine hydrochloride orally disintegrating tablets.

The drug is used together with diet and exercise to treat obesity (overweight) in people with risk factors such as high blood pressure, high cholesterol or diabetes.

Phentermine, which is in strengths of 15 mg, 30 mg and 37.5 mg, will be produced at the group's formulation manufacturing facility at Moraiya in Ahmedabad, the company said.

10:55 am Buzzing: Share price of Unichem Laboratories surged 6.5 percent intraday as its Goa facility has received Establishment Inspection Report from USFDA.

The company's formulations manufacturing facility at Goa has received an Establishment Inspection Report (EIR) from the United States Food and Drug Administration (USFDA).

The company's 54th annual general meeting (AGM) of the company will be held on July 22, 2017.

10:40 am Downgrade: Shares of Fortis Healthcare were under pressure after Nomura downgraded the stock to neutral, making investors cautious. The stock fell around 4 percent intraday on the back of this development.

The brokerage house highlighted how the revenue growth has remained muted over the past two years. There is a industry slowdown in both hospitals and diagnostics segments.

''With increased competition and pricing pressure, we reduce our long-term expectations for growth and margins. We now expect long-term EBITDA margins for SRL at 25% vs 30% earlier,'' the brokerage house said in its report.

10.17 am Market Check: Equity benchmarks continued to reel under selling pressure, with the Sensex down 91.93 points at 30,765.59, dragged by banks, auto and infra stocks.

The 50-share NSE Nifty struggled below 9500, down 27.10 points at 9,477 on weak market breadth. About five shares declined for every four shares rising on the BSE.

L&T, HDFC, HDFC Bank, ICICI Bank, Reliance Industries, Bharti Airtel, Maruti and Tata Motors were down 0.5-2 percent whereas ITC, Sun Pharma and Dr Reddy's Labs gained 1-2.5 percent.

10:04 am Bumper Listing: Central Depository Services (CDSL) shares debuted with 68 percent gains on the National Stock Exchange. The share price opened at Rs 250 against the issue price of Rs 149.

The bumper listing was on expected lines as the issue has overwhelming response, oversubscribing 170 times. The grey market premium also indicated the strong listing.

At 10:04 am, the stock price was trading at Rs 264.80, up 77.7 percent, with volume of 1.5 crore shares after hitting a high of Rs 268 in morning trade.

9:50 am CDSL pre-opening: CDSL shares settled at Rs 250 in pre-opening trade, up by 67.78 percent or Rs 101 over its issue price of Rs 149.

It was on expected lines as the issue oversubscribed 170 times.

9:35 am IPO: The Reserve bank of India (RBI) has removed restrictions placed on purchase of shares in AU Small Finance Bank by foreign investors with the total foreign investment coming below the threshold caution limit.

The aggregate limit of total foreign investment that can be received by the company shall remain at 49 percent, the RBI said in a release. The restrictions placed on "the purchase of shares of the above company are withdrawn with immediate effect", the release said.

AU Small Finance Bank (SFB) has hit the capital market with an IPO to raise around Rs 1,900 crore. Its share sale of 3,76,95,520 shares was oversubscribed 1.36 times on the second day of the offer on Thursday.

9:25 am CDSL to debut: After overwhelming response to issue price, Central Depository Services (CDSL) is all set to make its debut today. The final issue price is fixed at Rs 149, the higher end of price band.

According to sources, the grey market premium for the stock is around Rs 90-100, which indicated that the listing may be around Rs 225-250 per share.

9:15 am Market Check: The market started off July series on a weak note, with the Nifty falling below 9500 level on weakness in banks stocks.

The 30-share BSE Sensex was down 115.22 points at 30,742.30 and the 50-share NSE Nifty slipped 37.20 points to 9,466.90.

Asian Paints, Tech Mahindra, Tata Motors, Tata Motors DVR, HDFC, HDFC Bank and Kotak Mahindra Bank were under pressure while Bank of Baroda and Sun Pharma gained in early trade.

The broader markets were also under pressure, with the Nifty Midcap down 0.5 percent as about two shares declined for every share rising.

Jaypee Infratech, Aditya Birla Money, Aditya Birla Nuvo, Grasim Industries, Amtek Auto, Metalyst Forging and Shiva Cement gained 1-7 percent.

Fortis Healthcare was down 2.5 percent on Nomura downgrade. Jain Irrigation, Havells India, DCB Bank and InterGlobe Aviation were also under pressure.

The Indian rupee slipped 9 paise in the early trade at 64.72 per dollar versus 64.63 Thursday.

Ashutosh Raina of HDFC Bank expects the pair to trade in a range of 64.50-64.90/dollar for today.

Asian markets lost ground despite China manufacturing activity beating expectations. Japan's Nikkei 225 dropped 1.08 percent while the Kospi slipped 0.2 percent and Australia's S&P/ASX 200 pulled back 1.45 percent. Hong Kong's Hang Seng Index declined 0.88 percent. On the mainland, the Shanghai Composite was off by 0.18 percent.