RBI's liquidity shot lifts pharma, bank stocks; Sensex leaps 424 pts

Topics MARKET WRAP | Markets | Sensex

Stock market updates: A prompt and timely monetary policy response by the Reserve Bank of India to the wrecking Covid-19 wave gave Indian equities a booster shot, lifting the benchmark indices 0.88 per cent higher on Wednesday. The RBI's well guarded measures which, analysts believe, are tuned to the evolving situation may support the economy going forward.

Earlier today, the apex bank announced a Covid-19 healthcare package of Rs 50,000 crore for vaccine makers, medical equipment suppliers, hospitals and patients in need of funds. Besides, individual borrowers and small businesses with loan outstanding of up to Rs 25 crore, and who did not avail for moratorium or restructuring relief last year, can ask for restructuring of their loans for up to 2 years. 

Furthermore, the RBI will also have a special long-term repo operation window for small finance banks, whereby the banks can borrow funds up to Rs 10,000 crore at repo rate for deploying for fresh loans SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower. READ ABOUT IT HERE

The announcements received a thumbs up from market participants who lapped up pharma and bank stocks. The Nifty Pharma index climbed over 4 per cent with individual stocks such as Lupin, Aurobindo Pharma, Cadila Healthcare, Sun Pharma, and Torrent Pharma soaring between 5 per cent and 14 per cent.

The Nifty Bank index, meanwhile, ended 1.6 per cent up. Individually, AU Small Finance Bank, Ujjivan Small Finance Bank, Equitas Small Finance Bank, Axis Bank, IndusInd Bank, and ICICI Bank gained up to 4 per cent.

The Nifty Financial Services, IT, Auto, and Metal indices gained up to 1.3 per cent on the NSE. 

Overall, the benchmark S&P BSE Sensex closed the session at 48,677.5 levels, up 424 points or 0.88 per cent. In the intra-day trade, the 30-share barometer hit a high and low of 48,743 and 48,254, respectively.

On the NSE, the Nifty50 hit an intra-day high of 14,637 but shut shop at 14,618 levels, up 121 points or 0.84 per cent.

In the broader markets, the S&P BSE MidCap index settled over 1 per cent higher while the S&P BSE SmallCap index gained 0.7 per cent.

Global markets
European stocks bounced back on Wednesday after a sharp selloff in the previous session, helped by gains in commodity and banking stocks. The pan-European STOXX 600 index rose 1.3 per cent, with the German DAX jumping 1.3 per cent and the UK's FTSE 100 gaining 1.1 per cent.

On Wall Street, futures of all three main indices were ruling up to 0.5 per cent higher.


LIVE UPDATES

TECH VIEW :: Nagaraj Shetti, Technical Research Analyst at HDFC Securities

The short term trend of Nifty remains dicey with one day of negative and positive movements. At the same time, the immediate support of 14415 seems to be holding and a sustainable move above 14725 could open fresh buying enthusiasm in the market. On such formation more upside could be expected. Any failure to sustain above 14700 levels is likely to trigger another sell on rise from the highs

TECH VIEW :: Ashis Biswas, Head of Technical Research at CapitalVia Global Research

The market witnessed some lackluster movement and an attempt to hold the support level around the Nifty 50 Index level of 14500. The trading above 14500 is positive from a short-term perspective. Sustaining above 14500 levels, the market to gain momentum, which could lead to an upside projection till 14800-14900 level. The momentum indicators like RSI, MACD to recover after staying neutral in recent time.

TECH VIEW :: Sumeet Bagadia, Executive Director at Choice Broking

Technically, the nifty index has taken good support of 100 days SMA and sustained above Middle Bollinger Band formation, which indicates further upside move in the counter. Moreover, the recent candle also formed like a Hammer Candlestick on the daily chart, which is a sign of a bullish trend. An oscillator Stochastic has indicated positive crossover, which supports the bullish trend for the near term. At present, the nifty index is holding support at 14450 levels while an upside resistance seems at 14860 levels.

MARKET CLOSING COMMENT :: Ajit Mishra, VP - Research, Religare Broking

Markets traded volatile for yet another day but managed to end higher. After the initial uptick, the benchmark hovered in a range for most of the session but sustained recovery in the last one and half hours aided the index to close around the day’s high. Consequently, the Nifty index settled above 14,600; up by 0.8%. The market breadth too was inclined strongly on the advancing side. Mostly sectoral indices traded in the tandem wherein pharma outshined the others.
 
We feel the timely intervention by the apex bank has relieved the participants to some extent amid the prevailing uncertainty. However, it failed to trigger a decisive move in the benchmark indices and we might see further consolidation. On the flip side, there’s no shortage of trading opportunities on the stock-specific front so participants should align their positions accordingly while keeping a check on leveraged trades.

MARKET CLOSING COMMENT :: Deepak Jasani, Head of Retail Research at HDFC Securities

India benchmark equity indices rose on May 05 after the RBI announced measures to further support the economy as coronavirus cases continue to surge. A late surge in the markets post 1415 Hrs led the indices higher. At close the NSE Nifty 50 rose 0.84% or 121 points to 14618.
 
Volumes on the NSE were in line with recent averages. Among sectors, Healthcare, Banks and Metals were the main gainers while Realty was the loser.
 
Nifty formed an inside day on May 05, meaning that the high low range for the day was within the high low range of the previous day. However the Nifty closed near its intra day high. Advance decline ratio too became positive.  14461-14723 continues to be the range for the Nifty in the near term. In case we do not see a negative day tomorrow, then we may have seen a near term bottom at 14416 on May 03. 

MARKET RECAP :: S Ranganathan, Head of Research at LKP Securities

RBI sops and MSCI rebalancing next week propelled Indices higher by nearly a percentage led by Pharma with good support from Banks. The broader market witnessed keen interest in Shipping stocks and select PSU stocks.
 

Sector of the day :: Bank stocks cheer no moratorium, restructuring measures


Sector of the day :: Pharma stocks surge as RBI rolls out Rs 50,000-cr liquidity scheme


Broader markets at close


BSE Snapshot :: Top losers of the day


BSE Snapshot :: Top gainers of the day


NSE Snapshot :: Top Nifty50 gainers today

Advances: 44

Declines: 5

Unchanged: 1


Which stocks lifted the Sensex today?


Rupee Closing

Rupee ends weaker at 73.91 per US dollar vs Tuesday's close of 73.85/$

Sectoral trends on the NSE

Outperformers: Nifty Pharma, Bank lead the rally

Underperformer: Nifty Realty fails to participate


Sensex Heatmap

Top gainers: Sun Pharma, IndusInd Bank, Axis Bank

Top losers: Bajaj Finance, Asian Paints, HUL


CLOSING BELL

Overall, the benchmark S&P BSE Sensex closed the session at 48,677.5 levels, up 424 points or 0.88 per cent. In the intra-day trade, the 30-share barometer hit a high and low of 48,743 and 48,254, respectively.
 
On the NSE, the Nifty50 hit an intra-day high of 14,637 but shut shop at 14,618 levels, up 121 points or 0.84 per cent.

Shipping players benefit from new biz apart from 10-year high Baltic Dry

With Baltic Dry Index having hit 10-year high recently, Indian shipping companies are not just benefitting from high freight but also from increased trade with Bangladesh and Vietnam, industry experts said today.
 
“Construction activity has picked up significantly in Bangladesh as the country is focusing on infrastructure growth. Due to this, Indian shipping companies are witnessing increased cargo volumes with a lot of bulk raw material getting shipped. This is going to be a long term trend as infrastructure push is expected to continue,” Captain Rahul Bhargava, chief operating officer at Essar Shipping told Business Standard. READ MORE

Commodity corner :: Oil nears $70 as data shows bigger-than-expected drop in US crude stocks

Both benchmark contracts rose nearly 2 per cent on Tuesday ahead of data from the American Petroleum Institute (API) industry group.
 
"Crude oil prices appear to be supported by a large draw in crude and gasoline inventories, according to API figures," said Margaret Yang, a strategist at Singapore-based DailyFX. READ MORE

March Quarter Results :: CEAT posts profit of Rs 150 crore vs Rs 52 cr YoY

>> Revenue at Rs 2,290 crore


Heatmap: S&P BSE Sensex gainers and losers at this hour


RBI relief measures may cushion NPA blow from second Covid wave: Analysts

The RBI also announced that individual borrowers and small businesses, with loan outstanding of up to Rs 25 crore and who did not avail for moratorium or restructuring relief last year, for instance, can ask for restructuring of their loans for up to 2 years.

Meanwhile, individual borrowers and small businesses that availed the facility last year but banks allowed restructuring of less than two years can now avail the facility and tell banks to increase the residual repayment window to up to two years in total. READ MORE

JSW Energy gains 9% as Moody's, Fitch assign credit ratings to arm notes

Shares of JSW Energy hit a fresh 52-week high of Rs 120.35, up 9 per cent on the BSE, in the intra-day trade on Wednesday on the back of a two-fold jump in trading volumes after global rating agencies Moody's Investors Service and Fitch Ratings assigned long-term ratings to the JSW Energy's wholly-owned subsidiary, JSW Hydro Energy Limited with stable outlook. The rating has been assigned to JSW Hydro Energy Limited's proposed US-dollar senior secured notes due 2031. READ MORE

MARKET UPDATE:: ICICI Bank, Kotak Mahindra Bank, and HDFC Bank among top contributors to Sensex's gain today


BUZZING :: Lupin sees biggest one-day jump in a year


MARCH QUARTER RESULTS :: Adani Enterprises

>> Consolidated PAT at Rs 413 crore vs Rs 61 crore YoY; up 7 times
 
>> Total Income for the quarter remained constant at Rs 13,689 crore
 
>> EBIDTA for the quarter increased by 65% at Rs. 1068 crore
 
>> Borad recommends dividend of Re 1 per share 

RBI extends safety net; response proactive, loaded and well timed

The Reserve Bank of India (RBI) in its special address today meant strict business, with a chiselled focus on alleviating financing constraints for economic stakeholders at the grass root level bearing a disproportionate burden of the ravaging second wave of COVID in the country. Wide ranging in scope, these stakeholders included: 1) On the retail side small individual borrowers; 2) On the business side, small business borrowers and MSMEs; 3) Among financial entities – Small Finance Banks (SFBs) and MFIs; and 4) On the sectoral side – Health/healthcare sector. Despite RBI’s stepped-up efforts, support to the widely crippled contact-intensive services sector remains less than desired; hopefully in the offing. READ MORE

 

Shipping shares in focus; GE Shipping surges 14% to hit over 3-year high

Shares of shipping companies were in focus at the bourses, on Wednesday, with the stock of Great Eastern (GE) Shipping hitting an over three-year high of Rs 391.80 after rallying 14 per cent on the BSE in intra-day trade. The stock surpassed its previous high of Rs 349.75, touched on Tuesday. It is trading at its highest level since February 2018. READ MORE

 

Targeted economic measures by RBI are for second wave of Covid-19

With rising infections, Covid 2.0 has taken a huge toll on India’s health infrastructure. The economic impact is nowhere close to the scale of impact on public health. This is more to do with the fact that this time around, the containment measures have been more localised. Last year, India had gone for a national lockdown to build health systems and infra to fight the first wave. READ MORE

Government eases GIFT entry for foreign investors in category III AIFs

The government has eased personal account number (PAN) requirements for foreign investors in the international financial services centre. The requirement had been an impediment for category III alternative investment funds based out of the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC). The latest development would also help foreign investors on GIFT-based exchanges, according to an expert. READ MORE

MARKET VIEW ON RBI GUV'S ADDRESS

RBI’s measures announced today have largely addressed the need of small borrowers, individuals as well as businesses, and MSMEs who have been amongst the worst affected in the second resurgence of Covid. Besides liquidity measures, easing lending to the above strata by extension of restructuring , boosting medical infrastructure through PSL recognition will help bring relief in the financial ecosystem. We believe small finance banks like Ujjivan, Equitas and MSME lenders such as DCB, City Union to benefit from some of these measures.

- Naveen Kulkarni, Chief Investment Officer, Axis Securities

NEWS ALERT :: S&P says reconsidering 11% FY22 growth forecast for Indian economy

>> Second Covid wave may derail India's budding recovery
 
>> India's vaccination rollout has proven challenging
 
>> FY22 growth at 9.8% in moderate second Covid wave scenario
 
>> FY22 growth at 8.2% in severe second Covid wave scenario

SBI, Equitas SFB: How to trade bank stocks post latest RBI announcements

NIFTYBANK

Likely target: 33,810

Upside potential: 3.70%
 
This index has a resistance of 100-day moving average (DMA) and 50-DMA, currently placed at 33,087 and 33,810, respectively. The overall trend is bullish till the index defends the closing basis support of 32,000 levels. The Moving Average Convergence Divergence (MACD) is rising upward, and making attempts to cross the zero line; which indicates a positive bias for the current trend, as per the daily chart. READ MORE

MARKET CHECK :: Sensex extends gains, rises nearly 400 points


RIL's Rs 53,124-cr rights: Partly paid premium shrinks as call date nears

The price of Reliance Industries’ (RIL’s) partly-paid (PP) and fully-paid (FP) shares has started to converge ahead of the first call payment later this month. On Tuesday, the partly paid shares-–issued last year during its Rs 53,124-crore rights issue--traded at a premium of just Rs 16.3.
 
In November 2020, the premium was as much as Rs 130. Earlier this month, RIL announced the details for the first call payment. READ MORE

Mid-market view | Gaurav Garg, Head of Research at CapitalVia Global Research

The market opened with a slight positivity though since the market has opened the market lacks clarity and has been trading in a very small range. Traders were relieved when RBI Governor Shaktikanta Das stated that the central bank will continue to track the evolving COVID-19 situation and will deploy all tools and instruments at its disposal to assist people, businesses, and institutions affected by the second wave. The US market closed lower after some heavy-weight stocks showed resistance in the market. Asian markets were mostly trading in green after some relief in covid cases in the region.
 
Nifty has traded in a consolidated manner near the level of 14550. Technical factors in the market are aligned to show that the market will trade in a range of 14500-14900. 14500 will be an important support level in the short term. 

RBI swings into action after banks indicate rising asset quality pressure

In view of the surging coronavirus (Covid-19) second wave which has resulted in lockdowns in several states, the Reserve Bank of India (RBI) has swung into action after banks indicated mounting asset quality pressures. Central bank Governor Shaktikanta Das made an unscheduled announcement on Wednesday in which debt restructuring was allowed for individual and small borrowers who had not availed a similar scheme announced last year when the Covid-19 pandemic first broke out. READ MORE

 

MARKET UPDATE:: Stocks that hit 52-week high on BSE today

Company PRICE(rs) 52 WK HIGH CHG(%)
Aarti Industries 1674.55 1750.00 2.39
Cyient 770.90 799.00 -1.78
EClerx Services 1295.55 1322.45 4.32
Galaxy Surfact. 2878.50 2984.95 2.56
GE Shipping Co 383.65 391.80 11.36
» More on 52 Week High

MARKET VIEW ON RBI GUV'S ADDRESS

The RBI has always been ahead of the curve, additional relief and liquidity measures were required post the second wave of COVID19 cases that broke out in April. The measures announced will support the funding requirements of the healthcare, medical facilities, beef-up vaccine manufacturing for domestic inoculation. MSMEs and individuals borrowers will benefit from the extension in the moratorium. The RBI's intent to take further measures if need be to provide relief, focus on the post-COVID future will send the right signal for the markets.

- Nish Bhatt, Founder & CEO, Millwood Kane International

Equitas, Ujjivan, AU Small Finance Bank gain as RBI announces loan relief

Shares of small finance banks (SFBs) like Equitas SFB, Ujjivan SFB, AU SFB and Suryoday SFB, on Wednesday, rose up to 6 per cent from their respective intra-day day lows on the BSE after the Reserve Bank of India (RBI) announced a special long-term repo operation window for SFBs, whereby the banks can borrow funds up to Rs 10,000 crore at repo rate for deploying for fresh loans SFBs, to be deployed for fresh lending of up to Rs 10 lakh per borrower. READ MORE

 

Top gainers on the BSE at this hour

Company PRICE(rs) CHG(%)
GE Shipping Co 389.75 13.13
Lupin 1156.10 9.35
EID Parry 419.40 7.97
Balrampur Chini 317.90 6.25
Cera Sanitary. 4070.35 5.94
» More on Top Gainers

NEWS ALERT

UP government extends lockdown till May 10, 7 am, media reports suggest

Alembic Pharma falls 6% post March quarter results

Shares of Alembic Pharmaceuticals dipped 6 per cent to Rs 948 on the BSE in intra-day trade on Wednesday following a weaker-than-estimated operational performance in the March quarter of the financial year 2020-21 (Q4FY21). The company’s consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) margins declined 45 basis points (bps) to 26.7 per cent in the March quarter (Q4FY21). READ MORE


Madan Sabnavis :: RBI gets into the act; lays foundation for more measures going ahead

The signal really given by the RBI is that while it does believe today that things have not taken a turn for the worse as enterprises at all levels are better prepared than last year while facing lockdowns, there could be surprises on the infection side that can engineer various measures by states that can affect business. However, the RBI will remain proactive and get in measures to address worries. READ MORE

SECTOR WATCH:: Pharma stocks advance in an otherwise volatile session


MARKET VIEW ON RBI GUV'S ADDRESS

The three year facility, which the banks can advance, to the of Rs. 50,000 Crs, is a good measure to immediately help ramp up medical and healthcare facilities. The benefits of this will help enhance capacity for the longer term as it covers diagnostic, preventive as well as combative aspects of healthcare. The smaller entities like micro finance institutions also benefit from the current package, which will bring some relief to them too which is one of the worst affected sectors as of now.

- Dr. Joseph Thomas, Head of Research, Emkay Wealth Management

Lupin soars 8%, hits over three-year high on heavy volumes

Shares of Lupin hit an over three-year high of Rs 1,147 as they advanced 8 per cent on the BSE in intra-day trade on Wednesday on the back of heavy volumes. The stock of the pharmaceutical company surpassed its previous high of Rs 1,121.85 touched on September 18, 2020. It was trading at its highest level since July 2017. READ MORE

Hero MotoCorp Q4 preview: Analysts see up to 60% YoY rise in Ebitda

HeroMoto Corp, slated to report its March quarter results (Q4FY21) on May 6, is expected to post nearly 60 per cent year-on-year growth in earnings before interest, tax, depreciation, and amortization (Ebitda) aided by healthy sales volume and low base effect. However, price hikes taken due to BS-VI transition and to off-set increase in input costs may not be enough to cushion Ebitda margin hit, say analysts. READ MORE

VIEW ON RBI GUV'S ADDRESS :: Deepthi Mathew, Economist at Geojit Financial Services

In its limited space, the RBI governor announced few measures to support the economy dealing with the second wave of the pandemic. Though a loan moratorium was not announced, restructuring of loans could bring some relief to the borrowers.  To incentivize lending, banks can park money equal to COVID  book with the RBI at 40 bps above the reverse repo rate. Similarly, lending to MFIs would be categorised as priority sector lending that could also support credit growth in the economy. 

Aarti Industries rallies 7%, hits record high on bonus issue plan

Shares of Aarti Industries hit a new high of Rs 1,750 after rallying 7 per cent on the BSE in intra-day trade on Wednesday after the company announced a bonus issue plan. The stock surpassed its previous high of Rs 1,687.40 on Tuesday. The meeting of the board of directors of the Company is scheduled to be held on Tuesday, May 11, 2021 to consider, recommendation of issue of bonus shares. READ MORE


MARKET COMMENT ON RBI GUV'S ANNOUNCEMENT

Governor Sakthikanda Das reassured the nation and markets that the RBI would be pro-active to ameliorate the pain and help businesses & boost the economy. Term liquidity of Rs 50000 cr as on-tap liquidity for access to the emergency health facility, 3-year TLTRO for small finance banks, another instalment of G-SAP of Rs 35000 cr, lending by SFBs to MSMEs to be classified as priority sector lending... are all timely steps in the right direction. The fact that there is no moratorium announcement will be seen by the markets as positive since the message is that the situation is not bad as to warrant another moratorium

- Views by Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Sector Watch :: Nifty Pharma index up 2% as RBI approves Rs 50,000 cr-liquidity support for the sector


MARKET CHECK :: Sensex near day's high


NEWS ALERT :: Services PMI falls to 54 in April vs 54.6 in March

Falling from 54.6 in March to 54.0 in April, the seasonally adjusted India Services Business Activity Index pointed to the slowest increase in output for three months. That said, the latest reading was indicative of a solid rate of expansion that outpaced the long-run survey average.

RBI governor LIVE :: Shaktikanta Das says

>> Counter cyclical provisioning buffer held by bank as of Dec 2020 can be used to make specific provision for NPAs up to Mar 2022. Use of such floating provisions for NPA provisioning to be done after board approvals

>> Will ramp up COVID-related healthcare infra, on-tap liquidity window of Rs 50,000 cr with up to 3-yr tenor at repo rate being opened until March 31, 2022

>> To conduct 3-yr long-term repo operations worth Rs 10,000 cr. Limit of Rs 10 lakh per borrower for SFB scheme. SFB on-lending to MFIs to be categorised as priority sector

RBI governor LIVE :: Shaktikanta Das says

>> Maximum number of days for overdraft facility by states is being enhanced from 35 to 50 days, valid up to September 30, 2021

RBI GOVERNOR ::To hold STLRO for Rs 10,000 cr for small finance banks

>> SLTRO facility to be available till Oct 31, 2021 

RBI governor LIVE :: Shaktikanta Das says

Borrowers up to Rs 25 crore, not taken restructuring earlier, that were standard as of Mar 2021, will be considered for restructuring till 30th Sept 2021 
 

RBI governor LIVE :: Shaktikanta Das says

>> Banks are allowed to extend the moratorium under Restructuring Frame 1.0 for a period of up to 2 years

RBI GOVERNOR :: Banks will have Covid loan book; will earn 40 bps more under Reverse repo

>> Such loans books to be allowed in priority sector lending
 

Sector Watch :: Nifty Bank up 0.5%


LIVE :: RBI Governor says

> To conduct 2nd GSAP auction of Rs 35,000 crore on May 20

RBI governor LIVE :: Shaktikanta Das says

>> On-tap TLTRO worth Rs 50,000 crore to be opened till March 31,2022 for patients, vaccine importers, medicial equipment makers, etc

>> These loans will be considered as 'Priority Sector Lending'

>> Banks can deliver the loans directly or via intermediaries

RBI GOVERNOR :: Businesses will adapt to containment restrictions

> Consumption is holding up
 
> Electricity generation is higher
 
> High frequency indicator emanating mixed signals
 
> Core inflation remains elevated
 
> Some food prices are softening, others firms

RBI Governor says

>> We don't expect major deviation from our earlier GDP projections, but will wait for more economic data

RBI governor LIVE :: Shaktikanta Das says

>> CPI inflation remains benign for major advanced economies

>> High WPI inflation shows consistent pressure from input side

>> High frequency indicators suggest mixed signals

RBI GOVERNOR :: Speed of virus must be matched with well-timed policy steps

RBI governor LIVE :: Shaktikanta Das says

>> Dent to aggregate demand will be limited given only localised lockdowns and better adoption of work-from-home regime

>> Mobility has declined but unlike the one seen in April 2020

>> Tractor usage remains robust

RBI GOVERNOR :: Global outlook highly uncertain, with downside risks

> Global economy showing incipent signs of recovery
 

MARKET CHECK :: Sensex trades steady


RBI GOVERNOR :: RBI will continue to monitor emerging situation, use all resources

> Indian had flattened inflation curve but situation altered
 
> Need swift, wide raging actions that are caliberated & well-timed

RBI governor LIVE :: Shaktikanta Das says

>> Since the start of the pandemic, I have had faith in India's resilience

>> Yet, we have struggled to free India from the virus for over a year

NEWS ALERT :: Economic situation has altered drastically due to Covid 2nd wave, says Shaktikanta Das

>> RBI will continue to monitor the situation and deploy resources to mitigate impact

NEWS ALERT

RBI Guv Shatikanta Das begins media address

'Earnings growth at risk if Covid cases could continue to rise for long'

Markets are likely to be volatile over the next few months. Market movement will depend on the extent of the second wave and also the period for which it lasts. Restrictions by the State governments will impact earnings growth in the near-term. Earnings growth will be at risk if Covid cases could continue to rise for long. All this will certainly impact market sentiment. That said, valuations are not cheap. In this backdrop, our portfolio alignment has been more dynamic and bottom-up with a focus on cyclicals and capex driven sectors. READ FULL INTERVIEW HERE

NEWS ALERT :: Cabinet to take up proposal for IDBI Bank strategic stake sale

> Govt & LIC to likely sell its stake together, suggest reports

MARKET VIEW | V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

RBI Governor's announcements today are likely to influence markets, particularly certain segments like banking. Relief to MSMEs & retail borrowers might positively impact banks which have a higher proportion of such loans. The rally in PSU banks yesterday may be in anticipation of this.
 
The market is presently caught between fear from the economic fall out of the second wave and hope arising from the flattening of the Covid curve. It will take some more time for clarity to emerge on which of the two will have a higher impact on markets. Going by the experiences of countries that went through the second wave, like the UK, hope will triumph over fear. GDP & earnings growth in Q1 FY 22 will take a hit, but is likely to recover in subsequent quarters.
 
In the short term consumer discretionaries like autos & consumer, durables are likely to be under pressure. IT & metals are exhibiting high resilience.

Hikal hits new high on signing 10-year deal with global pharma Co

Hikal shares, on Wednesday, rallied 10 per cent to Rs 313.65, also its new high, on the BSE in intra-day trade after the company signed multi-year contract with a leading global pharmaceutical company. In the past one month, the stock has zoomed 97 per cent, as compared to 3 per cent decline in the S&P BSE Sensex.  READ MORE


Sector Watch :: Telecom stocks in the green as Centre approves 5G trial

Bharti Airtel, Reliance Jio, Vodafone Idea and MTNL have been allowed to conduct 5G trials for six months, including two months for procuring and setting up equipment, the Department of Telecommunications said.


OMCs rally as fuel prices rise for second straight day

>> S&P BSE Oil and Gas index gains 1.6%


BUZZING :: Praj Industries rallies 6%


Satin CreditCare up 1%

Satin Creditcare Network (SCNL) on Tuesday said it has received a senior loan facility of $5 million from Oesterreichische Entwicklungsbank – OeEB, Austria, through external commercial borrowing route.


Result impact :: Adani Total Gas advances over 1.5%

The company reported a 19 per cent YoY rise in its March quarter net profit as the firm expanded operations in newer geographies, resulting in higher sales volumes. Net profit in the January-March quarter of FY21 was Rs 145 crore compared to Rs 122 crore in the same period of the previous fiscal.


L&T Infotech slips in trade post Q4 nos amid profit-booking

The IT services arm from the L&T conglomerate reported a net profit of Rs 545.7 crore for the fourth quarter ended March 31, 2021, up 27.6 per cent year-on-year (YoY) and up 5 per cent sequentially. Revenue for the Q4 FY21 grew 8.5 per cent at Rs 3,269.4 crore on a YoY basis.


Result reaction :: RBL Bank holds gains

>> The private sector lender on Tuesday reported a 34 per cent decline in its March quarter profit to Rs 75 crore compared to Rs 114 crore in the year-ago period due to provisioning for possible loan losses that it sees in the retail unsecured segments.


IndiGo slips in trade despite report on fund raising plan

The airline is in talks to raise fresh funds as the second wave of the pandemic has led to a collapse in travel demand. The airline may look to raise Rs 3,500-4,000 crore, a Business Standard report said.


Adani Ports declines 2% in a frim market

The company's net profit for the March quarter jumped fourfold to Rs 1,287 crore from Rs 334 crore a year ago but fell short of the Rs 1,465 crore consensus forecast of analysts tracked by Bloomberg.

In other news, the company said US-based counsels are of opinion that its investment in a port in Myanmar are not in violation of law, but the firm will abandon the project if the US administration opines that the investment was in violation of sanctions against Military-ruled nation.


MARKET CHECK :: Sensex off day's high


Sectoral trends :: All key indices in the green; metals, PSBs outperform


Sensex Heatmap :: ONGC outperforms as oil prices climb; Auto, FMCG slip


Opening Bell :: Nifty tests 14,600


Opening Bell :: Sensex starts with a 200-pt gain


Fuel prices :: Petrol price hiked by 19 paise

>> Diesel price up 21 paise today

>> Prices have been increased for second consecutive day

Commodity prices in early deals :: Crude ticks up 1%; silver up half a per cent


Top gainers and losers on the S&P BSE Sensex in Pre-open


Pre-open session :: Nifty reclaims 14,600


Pre-open session :: Sensex starts higher


BROKERAGE VIEW :: Emkay Global on RBL Bank

Reco: BUY | TP: Rs 255

We believe RBL has emerged stronger from the deposit scare in FY20, and it has largely dealt with high risk & vulnerable corporate/retail portfolio in FY20/FY21. However, near-term asset quality risk remains with the onset of the second Covid-19 wave, leading to gradual moderation in credit cost in FY22 and going forward.

That said, we take comfort in the bank’s healthy capital position, improvement in liability profile and gradual uptick in its RoA/RoE to 1.4%/8-13% over FY22-24E from a low of 0.5%/4% in FY21. We retain Buy with a revised TP of Rs255 (from Rs290), factoring in a cut in earnings estimates and TP multiple.

Key risks to our call include higher-than-expected stress build-up in retail portfolios and top management change.

BROKERAGE VIEW :: Kotak Securities on RBL Bank

Reco: BUY | TP: Rs 240

RBL Bank reported 35% yoy decline in earnings despite a 15% yoy operating profit growth as loan-loss provisions were high at 25% yoy. Slippages were high (~10% annualized) led by the credit card portfolio but flat qoq. FY2022 would continue to see elevated provisions but it would be primarily to improve the provision coverage ratio.

The bank has a strong CAR to withstand the crisis, which is a positive. The stock is inexpensive at current valuations, driving our positive view though we acknowledge that the drivers for re-rating the stock are currently absent.

The key challenge has been that the credit costs have consistently increased in recent years for various factors. The book that is currently undergoing stress, unlike corporate loans, is priced for these scenarios but forecasting stress and credit costs has not been easy.

BROKERAGE VIEW :: Kotak Securities on Godrej Properties

Reco: SELL | TP: Rs 890

GPL’s narrative for FY2021 remains unchanged from previous years (1) a strong sales trajectory across key focus cities with sales of Rs67 bn (+14% yoy), (2) moderated business development (6 mn sq. ft in FY2021), (3) modest cash generation at Rs8.9 bn (Rs7.9 bn in FY2020) before land payments (Rs19 bn) against capital employed of Rs77 bn, and (4) aggressive equity raise of Rs37 bn that leaves the balance sheet substantially under-leveraged with net cash of Rs5.8 bn as of March 2021.

GPL holds the pole position in terms of residential sales among the listed real estate developers, with a multi-city presence making it the prime candidate to play the consolidation theme. Improvement in margins, and better cash generation from extant projects would help justify the substantial premium at which Godrej Properties trades at relative to peers. Maintain SELL rating with a revised FV of Rs890/share (from Rs810/share).

BROKERAGE VIEW :: Kotak Securities on Adani Ports and SEZ

Reco: ADD | TP: Rs 825

ADSEZ ended an eventful FY2021 with marked outperformance, healthy cash flow generation, an improved cost structure and entry into new markets that obviate growth fatigue for the next decade. Incremental focus would be on growing the logistics business, which would also help enhance growth prospects and customer stickiness for the mainstay ports business over time.

We lower FY2023E EBITDA by 5% on modest cuts to our revenue and margin estimates. Cut in FY2022E EBITDA is higher as we factor in impact of second wave and defer consolidation of recently acquisitions to end-FY2022.

BROKERAGE VIEW :: ICICI Securities on Home First Finance

Reco: BUY | TP: Rs 625

Home First Finance Company (HomeFirst) exited FY21 on expected lines with: 1) stage-3 assets at 1.8%, credit cost at 100bps, 1+ dpd pool at 6.2%, and zero restructuring; 2) disbursements regaining traction in Q4FY21 or H2FY21 (supported AUM growth of 14% YoY / 5% QoQ; 3) after a pause, securitisation of Rs 1.2bn of asset pool yielded income of Rs181mn (securitisation income in FY21 being at par with FY20 at 1.1% of assets); 4) Portfolio spreads drawing support of lower borrowing cost settled >5%.

With >30% AUM growth, funding cost benefit, improved cost to income ratio, and contained credit cost, we expect earnings to compound at ~40% over FY21-FY23E. However due to excessive capitalisation (tier-1 at 55%) and despite >3% RoAs, RoEs will be modest at ~12%.

Key risks: i) sourcing as well as collections managed by front-end team; ii) apartment home loans showing some stress (in pockets).

Supreme Court defers hearing Amazon, Future case amid Covid-19 surge: Report

The top court was scheduled to hear the case between US-based e-commerce giant Amazon and Kishore Biyani’s Future Group over the Rs 24,713 crore deal between Future and Reliance Industries Ltd on Tuesday. READ MORE

SGX Nifty zooms ahead of RBI Guv's address

>> The index was ruling 72 points higher at 14,608 levels at 8:47 AM.

>> Reserve Bank of India Governor Shaktikanta Das will make an unscheduled speech at 10 am today, Wednesday, as a new coronavirus wave threatens a nascent economic recovery. READ MORE

Top stocks to watch today

Earnings Today: A total of 20 companies are slated to post their March quarter numbers today, including Tata Steel, Adani Green Energy, Blue Dart Express, Gillette India and Deepak Nitrite.
 
Adani Ports: The company's net profit for the March quarter jumped fourfold to Rs 1,287 crore from Rs 334 crore a year ago but fell short of the Rs 1,465 crore consensus forecast of analysts tracked by Bloomberg. In other news, the company said US-based counsels are of opinion that its investment in a port in Myanmar are not in violation of law, but the firm will abandon the project if the US administration opines that the investment was in violation of sanctions against Military-ruled nation. READ MORE

'Nifty close below 14,416 would be bearish for short-term'

Any close below 14,416 would violate the crucial support of the golden ratio and in that case, we can expect Nifty to enter in to a bearish territory. Below 14,416, Nifty could slide towards next support of 14,150. In short term, we can expect stock-specific bullish moves in mid-cap and small-cap segment and those should be traded with appropriate stoploss. READ MORE

Trading calls by Ajit Mishra of Religare Broking

BHARTI AIRTEL LIMITED
 
Recommendation: Buy
 
Target: 595
 
Stop loss: 538
 
Bharti Airtel has witnessed a fresh breakout from a consolidation range after spending nearly two months It strongly upheld the support zone of long-term moving average( 200 EMA) on the daily chart throughout that phase. Indications are in the favor of a steady rise from hereon. Traders shouldn't miss this opportunity and create fresh longs in the mentioned zone. READ MORE

Bulk deals on the NSE as on Tuesday

Bulk deals on the BSE as on Tuesday

FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee check

Source: Bloomberg


Oil on the boil

Oil prices climbed to seven-week peaks as more countries opened their borders to travellers, improving the demand outlook for petrol and jet fuel. Brent added 57 cents to $69.49 a barrel, near its highest since mid-March.

Thin trade in Asia

Holidays in Japan, China and South Korea limited the early reaction, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan dithering either side of flat.
 

Wall Street on Tuesday

The Nasdaq had dropped 1.9 per cent on Tuesday as some big tech names ran into profit-taking, including Microsoft Corp, Alphabet Inc, Apple Inc and Amazon.com Inc. S&P500 also dropped 0.7 per cent while Dow Jones closed 0.06 per cent higher.

Stretched valuations were tested when US Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating. She later waked back the comments, but it reminded investors that rates would have to rise at some point in the future.

NEWS ALERT :: RBI Guv to make an unscheduled speech at 10 AM today

SGX Nifty alert

>> At 8:14 AM, the index was at 14,588 levels, up 56 points.

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