Benchmark indices ended over 2 per cent higher on Wednesday amid buying in financial stocks such as HDFC and HDFC Bank. Further, finance minister Nirmala Sitharaman's statement that the government was with industry and would do as much as possible to repair the damage when companies were going through the most stressful time, also boosted sentiment.
The S&P BSE Sensex rallied an impressive 622 points or over 2 per cent to 30,819 levels, with HDFC (up over 5.5 per cent) being the top gainer. Other top index gainers included Mahindra & Mahindra (up over 5 per cent), L&T (up 5 per cent), and Tata Steel (up 4 per cent).
NSE's Nifty ended above 9,050 levels at 9,066.55 points, up 187 points or over 2 per cent. Volatility index, India VIX, saw a sharp drop of 10 per cent at 35.59.
Sectorally, all the indices on the NSE ended in the green. Nifty Pharma topped the list with over 4 per cent gains at 9,456.80 levels. Nifty Bank and Nifty Private Bank gained 2 per cent each.
In the broader market, the S&P BSE MidCap index climbed around 1.5 per cent to 11,278 while the S&P BSE SmallCap added over 1 per cent to 10,472.
Shares of Reliance Industries – Rights Entitlement (RIL-REL) moved higher by up to 36 per cent to Rs 211.95 level on the National Stock Exchange (NSE) on the first day of its trading. The stock opened at Rs 158.05 and hit an intra-day low of Rs 152 on the exchange. READ MORE
The market capitalisation (m-cap) of Avenue Supermarts, which runs the DMart chain of stores, crossed the packaged consumer goods company Nestle India today. READ MORE
Shares of Larsen & Toubro (L&T) Infotech rallied 7 per cent after the company posted revenue growth of 4.7 per cent in constant currency (CC) terms on sequential basis in March quarter results. In rupee terms, the firm's revenue during the quarter under review grew up 7.1 per cent quarter on quarter (QoQ) at Rs 3,012 crore while consolidated net profit rose 13 per cent year-on-year to Rs 427.5 crore. READ MORE
Asian stocks struggled to extend the week’s rally on Wednesday, and gold and bonds firmed, as a sceptical press report dented some hopes for a Covid-19 vaccine and concerns about the global recovery from the pandemic returned. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat. Stocks in Hong Kong and China idled were also flat as investors wait to hear the government's economic plans, due to be announced during the annual gathering of parliament beginning on Friday. Japan's Nikkei rose 1 per cent.
In Europe, stocks slipped. Europe’s STOXX 600 index was 1.6 per cent lower. The blue-chip FTSE 100 was down 0.4 per cent as Rolls-Royce Holdings Plc shed 0.8 per cent after it said it would cut 9,000 jobs and might close some of its factories.
In commodities, oil prices rose amid signs of improving demand and a drawdown in US crude inventories but worries over the economic fallout from the coronavirus pandemic capped gains.
MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services
Benchmark indices closed up by more than 2%, inspite of mixed global cues and unabated increase in number of infections across India. All the major sectoral indices traded positive with the volatility index also decreasing by around 10%. The government cabinet approvals of some of the proposed measures and leaving the door open for further stimulus measures could also have played a part in the positivity. Investors advised to remain cautious.
SECTOR WATCH | Nifty Pharma jumps over 4%
MARKET AT CLOSE | Gainers and losers on the S&P BSE Sensex
The S&P BSE Sensex jumped 622 points or over 2 per cent to 30,819 while NSE's Nifty ended at 9066.55, up 187 points or 2.11 per cent.
Index Gainers | Tata Steel up over 4%
Avenue Supermarts hits 5% upper circuit, surpasses Nestle India in m-cap
The market capitalisation (m-cap) of Avenue Supermarts, which runs the DMart chain of stores, crossed the packaged consumer goods company Nestle India on Wednesday. At 02:26 pm, shares of Avenue Supermarts were locked in the upper circuit of 5 per cent at Rs 2,453, with m-cap standing at Rs 1.59 trillion on the BSE. A combined around 375,000 shares changed hands and there were pending buy orders for 13,500 shares on the NSE and BSE. READ MORE
SECTOR UPDATE :: Nifty Pharma index up 4%
>> Aurobindo Pharma hits 52-week high, Dr Reddy's up 5% post healthy March quarter results
Stocks that hit their respective 52-week lows in an otherwise strong market today
NEWS ALERT :: JSW Energy puts GMR Kamalanga asset acquisition on hold
>> The transaction has been put on hold given the ongoing uncertainty and will be revisited once the situation normalizes
>> Says, In the short term, volumes and tariffs at merchant markets are expected to be adversely impacted
>> Q4 performance: Net profit at Rs 108.4 cr, up 4% YoY; Net revenue at Rs 1,793.3 cr, down 6.8% YoY
(As reported by CNBC TV18)
Covid-19 crisis: Govt considers regulating air-ticket prices after lockdown
The government is considering temporarily setting caps and floors on airfares once air transport resumes after the lockdown, in a bid to “protect both consumers and airlines”, officials aware of the matter said.
The civil aviation ministry, which has started discussions on the process, feels that it is important to ensure tickets don’t become very expensive, and to prevent predatory pricing from hurting the financial viability of airlines. READ MORE
MARKET VOICE | Shyam Sekhar on earnings season
Allowing companies not to report Q1 results maybe a sensible idea.
Waive the requirement for just this year. Let companies set their house in order and revive normal business activity. All energies must be chanelled there.
>> The policy was announced by FM Nirmala Sitharaman under the Economic Package.
MARKET CHECK | Top 5 losers on the BSE at this hour
Inter-scheme transfers in mutual funds elevated amid debt crisis
Mutual fund houses bought and sold instruments between their own schemes at a higher-than-usual rate as the industry grappled with a crisis in its fixed income segment. There were 680 such transactions worth Rs 22,452.7 crore in March. This rose to 829 (worth Rs 21,814.9 crore) in April. READ MORE
Vedanta, United Spirits: Why are firms opting to delist in the current market?
UK-based Diageo and home-grown Adani Group, according to reports, have also initiated talks with investment bankers and consultants to initiate delisting from bourses. In case of United Spirits, the investment bankers will give the proposal, listing out benefits, timing, and pricing of the offer to Diageo management. “If the global management approves, the proposal will be sent to the board. Only after board approval will it will go to the India board of United Spirits for approval," reports suggested. At the end of March 2020, around 43.24 per cent stake was held by public shareholders. READ MORE
Vodafone Idea surges 9%, hits 2-month high; stock zooms 51% in a month
The telecom services provider's stock was trading at its highest level since March 18, 2020. It has rallied 51 per cent in the past one month from the level of Rs 3.92, on the back of delivery-based buying. In comparison, the S&P BSE Sensex was down 3.5 per cent during the same period. READ MORE
BoB seeks to recover $250 mn loans from NMC founder BR Shetty: Report
Bank of Baroda is seeking to recover loans worth more than $250 million from NMC founder BR Shetty and his companies, as a court in Bengaluru barred him and his wife from selling or transferring some properties while it hears the case, a court document showed.
The 16 properties in several Indian cities including Bengaluru were among guarantees put up by Shetty and his wife against the Rs 19.13 billion ($253 million) in loans, according to a May 16 court order seen by Reuters. The court in Bengalaru set the next hearing in the case for June 8. READ MORE
European stocks trade largely lower in early deals
Reliance Industries-RE shares rally 34% from opening levels on NSE
Shares of Reliance Industries – Rights Entitlement (RIL-REL) moved higher by up to 34 per cent to Rs 211.60 level on the National Stock Exchange (NSE) on Wednesday on the first day of its trading. The stock opened at Rs 158.05 and hit an intra-day low of Rs 152 on the exchange so far.
At 12:25 pm, RIL-REL was trading 29 per cent higher at Rs 195.05 with around 22.82 million equity shares changing hands on the NSE, the exchange data shows. READ MORE
Result today | Bajaj Auto Q4 preview: Over 10% revenue dip seen on volume de-growth
Two-wheeler major Bajaj Auto is set to announce its fourth-quarter results on Wednesday for the quarter ending March 2020 (Q4FY20). According to analysts, Bajaj Auto's revenues may see a decline of over 10 per cent on a year-on-year (YoY) basis, led by 17 per cent fall in volumes to 9.91 lakh units. However, improvement in realisations and average selling price (ASPs) should provide some relief to the bottom-line.
Bajaj Auto clocked a net profit of Rs 1,067.6 crore and revenue of Rs 7,420.5 crore in Q4FY19. At the bourses, Bajaj Auto tumbled 35.8 per cent in Q4FY20 as compared to Nifty's 29.4 per cent fall in the same period. Meanwhile, Nifty Auto index declined 42.3 per cent. READ MORE
Rs 90,000 cr discom package: Street anxious over impact on PFC and REC
In an irony of sorts, even as the Central government has provided a Rs 90,000 crore stimulus to clear dues of power distribution companies (discoms), the Street is worried over its likely impact on the two state-owned power sector financiers – Power Finance Corporation (PFC) and REC. Stocks of the two financiers have plunged 10-13 per cent after the announcement of this package on May 13, more than twice the six per cent fall in Sensex during the same period. READ MORE
MARKET CHECK | UltraTech Cement gains around 2% ahead of March quarter results
Nifty sectoral indices at this hour
BROKERAGE VIEW:: ICICI Securities on Tata Chemicals
We lower our volume and realisation assumption for the current fiscal and roll over our valuations to FY22E. We value the company on an SOTP basis and arrive at a target price of Rs 300 including investment portfolio value. We have a HOLD recommendation on the stock.
Market experts back RIL's rights issue, ask shareholder to participate
Even as the lockdown continues, majority of market experts advise that shareholders should participate in the country’s largest rights issue of India's most valuable company, Reliance Industries (RIL). Experts also believe that shareholders should not worry about liquidity and price discovery in the partly paid-up shares. READ MORE
RIL Chairman Mukesh Ambani
Alok Industries freezes at 5% lower circuit after huge block deals
Shares of Alok Industries were locked in the lower circuit of 5 per cent at Rs 12.58, falling 9.5 per cent from its early morning high on the BSE on Wednesday, after a nearly 2 per cent of the total equity of the company changed hands on bourses till 11:00 am. Reliance Industries (RIL) held nearly 71 per cent stake in the textile company. READ MORE
Warren Buffett cuts crisis-era bet on Goldman Sachs
Warren Buffett was willing to stand by Goldman Sachs Group Inc.’s side during the last economic crisis, at least for the right price. Now, he’s bailing out just as the pandemic throws the US economy onto uncertain terrain. Berkshire Hathaway sold 84 per cent of its Goldman Sachs stock in the first quarter, marking a reversal for an investor who generally holds large stakes in the banking sector. It was one of the most notable changes in Berkshire’s more-than $180 billion portfolio in the period, as the bank underperforms the broader US market. READ MORE
BROKERAGE VIEW:: Edelweiss Securities on Bharti Airtel
Bharti Airtel (Bharti) reported a strong set of Q4FY20 on all counts. Importantly, elusive ARPU growth bounced back (up 14% QoQ), convincingly beating our and Street estimates. Higher data and voice volume growth, and strong 4G subscriber addition clearly demonstrate consumers’ preference for Bharti’s network. Moreover, the company’s ability to garner smartphone subscribers will aid revenue market share as this segment has the highest propensity to pay and would benefit operators the most should tariffs rise or the industry consolidate. We are further racking up our ahead-of-Street FY22E revenue/EBITDA by 5%/7% building in INR200 ARPU for FY22 (Rs 180 earlier). We are raising FY21 estimates for the India business, but NGN depreciation offsets the gains. Maintain ‘BUY’ with a DCF-based revised TP of Rs712 (Rs 606 earlier).
BROKERAGE VIEW:: Edelweiss Securities on Tata Power
Tata Power (TPCL) reported Q4FY20 operational performance (EBITDA at INR18bn) in line, whereas 50% PAT outperformance is due to lower tax and a higher JV contribution. The Indonesian mining amendment greatly abates the profitability overhang. Management outlined 1.5x D/E and INR250bn in debt by end-FY21 (2.2x/INR440bn currently), which is aggressive, but suggests FY21 would mark a turnaround. Deliverance remains key though. In our view, TPCL’s recovery path may be jagged, but it’s headed north. Maintain ‘BUY’ with a TP of Rs 51.
Second wave of Covid-19 biggest tail risk for markets: BofA Securities
The second wave of Covid-19 is the biggest tail risk for the markets with 52 per cent of the fund managers surveyed by BofA Securities in May agreeing to the possibility. Permanently high unemployment, the break-up of the European Union (EU), and systemic credit event are the other tail risks cited. Vaccine breakthrough, the survey findings suggest, was the most likely V-recovery catalyst. READ MORE
BUZZING STOCK | ITC gains 3%
MARKET CHECK | Top 5 gainers at this hour
Bharti Infratel dips over 6%
MARKET UPDATE | Colgate trades 3% higher
Havells India falls for third straight day, hits fresh 52-week low
Shares of Havells India were trading lower for the fifth straight day, slipping 4.4 per cent to fresh 52-week low of Rs 447 on the BSE on Wednesday amid concerns about slower recovery in business as compared to peers. Thus far in the month of May, the stock has underperformed the market by falling 21 per cent, after reporting weak numbers across all segments. In comparison, the S&P BSE Sensex declined 9.6 per cent in the same period. READ MORE
Tata Power advances 7% post March quarter results
Shares of Tata Power advanced as much as 7 per cent to Rs 34.60 on the BSE on Wednesday, a day after the company reported strong numbers for the March quarter of fiscal 2019-20 (FY20). The consolidated net profit of the company jumped 177 per cent year-on-year (YoY) to Rs 475 crore as against around Rs 172 crore in the year-ago period. READ MORE
Bajaj Finance declines over 1% as Q4 profit dips 19% YoY; recovers later
Shares of Bajaj Finance dipped 1.6 per cent to Rs 1,935.45 in the intra-day trade on the BSE on Wednesday after the non-bank finance company's (NBFC's) net profit contracted for the first time in six years, down 19.4 per cent year-on-year (YoY) to Rs 948 crore, on the back of higher provisioning. Core profit before tax (PBT; before provisions) growth was, however, strong at 45 per cent YoY. Adjusted for Covid-19 provisions, PAT was up 38 per cent YoY. READ MORE
L&T Infotech surges 7% after posting 13% jump in March quarter net profit
Shares of Larsen & Toubro (L&T) Infotech rallied 7 per cent to Rs 1,786 on the BSE on Wednesday after the company posted revenue growth of 4.7 per cent in constant currency (CC) terms on sequential basis in March quarter results. In rupee terms, the firm's revenue during the quarter under review grew up 7.1 per cent quarter on quarter (QoQ) at Rs 3,012 crore while consolidated net profit rose 13 per cent year-on-year to Rs 427.5 crore. READ MORE
STOCK ALERT | RIL Rights Entitlement trading at a 20% premium: CNBC TV18
-- RIL Rights Entitlement trading with a volume of over 1 crore shares
Rupee opens higher at 75.56/$ vs Tuesday's close of 75.64 against the US dollar
We remain bullish on US growth as large capacities build over past 2 years would alter the revenue mix starting from FY22 and peak out after 3 years. Moreover, the US business would also migrate towards a better mix as injectables and derma start contribution vs currently an oral solids portfolio. sterile injectables. Although over next 2 years earnings could face a challenge from higher opex hitting P&L and as sartans ebb away, we believe strong prognosis beyond FY22 gives tremendous support to earnings. Upgrade to BUY with revised PT of Rs1,100 based on 25x FY22E; key risk includes sharp slowdown in US (much lower than 20% cagr assumed) and below market growth in domestic business.
IRCTC hits 5% upper circuit
>> As a step towards a gradual restart of services, the Indian Railways has decided to double the number of Shramik special trains to 400 a day by this week and also start 200 new time tabled non-air conditioned trains starting from June 1.
Result Impact | Apollo Tyres rises 1%
>> Apollo Tyres on Tuesday reported a 7.36 per cent decline in its consolidated net profit to Rs 77.8 crore for the fourth quarter ended March 31, 2020. The company had posted a net profit of Rs 83.99 crore for the January-March period of 2018-19.
Tata Steel gains over 1.5% higher
>> Tata Steel Europe has restarted negotiations with Germany’s Thyssenkrupp for a possible merger almost a year after the two companies called off a joint venture proposal, citing the European Commission’s objections.'
RIL's rights issue opens today
Result Impact | Bajaj Finance trades in the green post Q4 nos
Sectoral trends on NSE at open
Top gainers and losers on S&P BSE Sensex at Open
Top gainers and losers on S&P BSE Sensex at Pre-open
Market at Pre-open
Market at Pre-open
Stocks to watch: RIL, Bajaj Finance, Bajaj Auto, Jubilant Food, Dr Reddy's
RIL: Reliance Industries' proposed rights issue, the biggest-ever equity fund raise by an Indian company is set to open today. The company aims to raise Rs 53,125 crore.
Bajaj Finance: For the first time in six years, Bajaj Finance reported a contraction in net profit, down 19 per cent year-on-year because of higher provisioning costs. Pre-tax profit fell 29 per cent year-on-year. READ MORE
BROKERAGE VIEW :: CLSA on Tata Power
Maintains Buy; Revised target price at Rs 72 from Rs 85
>> Says, thermal business does well as Mundra turns but renewable biz disappoints
>> Co has guided for 42% debt reduction in FY21
BROKERAGE VIEW :: Nomura on M&M
Maintains Buy; Revised target price at Rs 501 from Rs 419
>> Believes company will benefit from govt's rural reforms
>> Efficient capital allocation may drive re-rating
>> Expects it's volumes to decline 17% YoY in FY21 but recover 22% YoY in FY22
BROKERAGE VIEW :: Morgan Stanley on Bajaj Finance
Maintains overweight; Target price at Rs 2,740
>> PPoP margin expanded to a new high via cost control
>> Provisions higher in Q4 due to Covid-19, expected to remain high in FY21
>> Expects company to earn highest RoE under their coverage in FY21
BROKERAGE VIEW :: Credit Suisse on Bajaj Finance
Maintains 'neutral'; Revised target price at Rs 2,000 from Rs 2,800
>> Expects 4.1% credit cost, and 10% of loans under moratorium to slip into NPA
>> Says, strong 7% PPoP ROA should help to absorb higher credit cost
>> Believes Bajaj Fin continues to be better placed than other NBFCs, in terms of liquidity and capital