MARKET WRAP: Sensex settles 178 pts higher; defense stocks rally up to 12%

The Nifty50 index settled above the 10,600 level at 10,607, up 56 points or 0.53 per cent.
Benchmark indices climbed off the day's top, but still ended around 0.5 per cent higher on Friday amid buying in IT, auto, and FMCG counters. 

The S&P BSE Sensex ended at 36,021, up 178 points or 0.5 per cent, having risen to as high as 36,110 earlier in the day. The Nifty50 index settled above the 10,600 level at 10,607, up 56 points or 0.53 per cent. India VIX slipped 3 per cent to 25.69 levels.

On a weekly basis, Sensex gained 2.41 per cent while Nifty added 2.16 per cent. 

Bharti Airtel (up 4 per cent) and Bajaj Auto (up 2.5 per cent) were the top Sensex gainers. Reliance Industries gained 1.5 per cent after the company announced that Intel has invested Rs 1,894.5 crore in Jio Platforms for a 0.39 per cent stake. 

Further, shares of defence companies rallied in the trade and climbed up to 12 per cent on the BSE after the Ministry of Defence (MoD) approved the purchase of weapons and equipments worth Rs 38,900 crore. Bharat Dynamics ended 12.55 per cent higher at Rs 375.80 on the BSE while Bharat Electronics gained 9 per cent to Rs 97.25. READ MORE

Moreover, JB Chemcials rose 3 per cent during the day after it said global investment firm KKR will pick up a controlling stake of 54 per cent in the company. The stock, however, ended flat. Meanwhile, HDFC Life gained around 4.5 per cent as the company will replace Vedanta on Nifty with effect from July 31.

In the broader market, the S&P BSE MidCap index rose 0.56 per cent while the S&P BSE SmallCap index gained 0.47 per cent.

Global markets

European stocks paused on Friday after gains through the week as another record surge in US coronavirus cases dulled optimism from a brisk recovery in China’s services sector.

The pan-European STOXX 600 index was largely flat after opening marginally higher, with trading volumes thinned by a US market holiday.

In commodities, oil fell below $43 a barrel as a resurgence of coronavirus cases raised concern that fuel demand growth could stall, although crude was still headed for a weekly gain on lower supply and wider signs of economic recovery.

Brent crude was down 52 cents, or 1.2 per cent, at $42.62 a barrel at the time of writing of this report, and US West Texas Intermediate (WTI) crude fell 50 cents, or 1.2 per cent, to $40.15.

(With inputs from Reuters)


MARKET COMMENT:: Vinod Nair, Head of Research at Geojit Financial Services

"The benchmark indices ended with a gain of 2.4 per cent, on a weekly basis, as optimism about a continued recovery in economic activity offset the concerns raised by an unabated rise in virus infections. Globally the US monthly employment report and domestically the PMI survey seemed to indicate that the worst of the lockdown economic impact is over. However, any extension or resetting of lockdown measures, due to increasing infections, could negate the gains. Progress of a vaccine trial also added to the optimism. In spite of improving economic data, markets are still largely moving on hope rather than on any real change in the ground realities. With intraday volatility increasing, investors are advised to remain cautious."

SECTOR WATCH: Here's how sectoral indices on the NSE fared today

MARKET AT CLOSE:: Gainers and losers on the S&P BSE Sensex


The S&P BSE Sensex gained 178 points or 0.5 per cent to settle at 36,021.42 while NSE's Nifty ended at 10,607, up 56 points or 0.5 per cent.

Balkrishna Industries hits 52-week high; stock rallies 49% in two months

Shares of Balkrishna Industries (BKT) hit a 52-week high of Rs 1,316, up 3 per cent on the BSE on Friday, on the expectation of strong earnings going forward. The stock surpassed its previous high of Rs 1,298 touched on February 20, 2020. It was trading higher for the sixth straight day. In the past two months, the stock of BKT has rallied 49 per cent, as compared to a 13.4 per cent rise in the S&P BSE Sensex. READ MORE

NEWS ALERT :: Commercial international flights to remain suspended till July 31, says DGCA

MARKET UPDATE :: S&P BSE Healthcare index holds gains in a choppy trade

Telecom stocks gain

VODAFONE IDEA 10.05 0.10
BHARTI AIRTEL 579.65 3.79
TATA COMM 625.00 2.27
» More

BUZZING STOCK:: Bharat Electronics surges 9%

MARKET CHECK:: Omaxe continues to decline; falls another 10%

Amid global crisis, Moody's rates TCS, Infosys, RIL above the sovereign

Moody's Investors Service has rated Tata Consultancy Services (TCS), Infosys and Reliance Industries above the sovereign due to their strong financials and significant global earnings.
Moody's said the stable outlooks on Genpact and UPL Corporation, in contrast to the negative outlook on India's Baa3, rating reflect that they can maintain their current ratings if the sovereign was downgraded to Ba1. READ MORE

MARKET UPDATE:: Affle (India) freezes at 5% upper circuit

MARKET CHECK:: Top 5 gainers on the BSE at this hour

Motorcycle segment to outperform other auto verticals amid Covid-19: Fitch

Domestic motorcycle production would gain some support from shift in demand but more benefit would accrue from the export market as the demand for motorcycles remains relatively robust in many emerging markets (EMs), the Fitch Group unit said in a statement.
In India, motorcycle producers have largely returned to normal operations and the segment does not depend on imported components as much as other parts in the country's automotive industry, which reduces the risk of further supply chain disruptions, it added. READ MORE

Rupee Closing

Rupee ends stronger at 74.64 per US dollar vs Thursday's close 75.01/$

Nifty sectoral indices at this hour

Vedanta to pave way for HDFC Life in Nifty. Time to buy insurance stocks?

"Currently, Nifty50 exchange-traded fund (ETF) and index AUMs stand at Rs 91,400 crore. Vedanta currently has an estimated weight of 44 basis points (bps) in the index, while HDFC Life is expected to enter the index with a weight of 90 bps, entailing ETFs and index funds buying worth Rs 820 crore. Zee Entertainment and Bharti Infratel currently have an estimated weight of 36 and 42bps respectively and will be replaced by SBI Life (70bps) and Divi’s Lab (64bps)," ICICI Securities said in a report dated July 2. READ MORE

NEWS ALERT :: JSW Steel Q1 crude steel production at 2.96 mt, down 25.4% QoQ & 30.2% YoY

(Via BSE filing)

BROERAGE VIEW:: Geojit Financial Services on Suven Pharma


Future looking bright post de-merger Suven Pharmaceuticals Ltd (SPL) is a pharmaceutical research expert that is in the business of Contract Development And Manufacturing Operations (CDMO).
  • Suven Pharmaceuticals Ltd (SPL) demerged away from Suven Life Sciences in 2018 and was listed on 9th March 2020.
  • During the year total revenues grew by 27% to Rs.834crs driven by 18% growth in CRAMS, 41% growth in Speciality chemicals and 40% growth in Formulations.
  • In the formulation segment, the company has files 11 ANDAs with the USFDA out of which 2 have already commercialised, while 3 are expected to be commercialised in the coming year.
  • SPL’s 25% stake in Rising Pharma yielded an unrealized profit of Rs.48crs during the year
  • We recommend a “Buy” with a target price of Rs.587 based on 18x FY22 EPS

BROKERAGE VIEW:: Prabhudas Lilladher on Motherson Sumi Systems

Rating: BUY | CMP: Rs 104 | TP: Rs 116
  • We believe this reorganization would lead to better value discovery of the global businesses in the long run as currently we are valuing MSS on consolidated basis. The performance of existing entity would be judged to its global peers.
  • Our view on MSS remains intact as we believe with gradual ramp-up of greenfield plants, healthy order book at Eur13.6b and SOP (start of production) with Eur10.1b orders, BS6 content increase at S/A bode well for the company. We maintain BUY with price target of Rs116 (18x consol EPS).

BROKERAGE VIEW:: Edelweiss Securities on Tata Power

Tata Power (TPCL) has approved: i) a preferential issue of 490mn shares to promoters at INR53 apiece (20% higher than yesterdays CMP, equals consensus TP); ii) an InvIT platform for its renewable business. We reckon: i) the amount thus raised of INR26bn will be utilised to pare debt (current D/E at 2.2x) and would reduce interest cost by 5%; ii) the deal is 18% equity-dilutive but EPS-neutral; and iii) it would invigorate investors’ lost confidence as balance sheet gets leaner and stronger, thereby brightening up growth prospects. Clearly, TPCL’s strategic intent—business restructuring and deleveraging—is getting stronger (refer charts below). Hence, we are cutting CoE assumption by 75bps, which is fair given market conditions. Maintain ‘BUY’ with a revised TP of Rs 60 (earlier Rs 51). It remains our preferred sector pick.

BROERAGE VIEW:: Edelweiss Securities on Jindal Steel & Power

We like JSPL as the company is reaping the twin benefits of cash accretion through higher sales volume and deleveraging the balance sheet despite extremely challenging times for the sector. We maintain ‘BUY/SO’ with TP of Rs 190 with an option value of Rs 20/share owing to divestment of Jindal Shadeed. The stock is currently trading at 5.2x FY22E EBITDA.

BROKERAGE VIEW:: Emkay Global Financial Services on Banks

After the recent up-move in stocks, we prefer to remain cautious amid continued disruption leading to subdued growth and elevated asset quality risk post Q2FY21. Clamor for one-time restructuring is on the rise, mainly for stressed SME and select corporate sectors, but it may only defer the NPA pain, while any higher provisioning requirement (>5%) may still hurt the earnings. Our preferred picks among banks are ICICI and HDFCB, followed by SBI in PSBs, given their better shock absorption capacity. Within the NBFC space, we prefer HDFCL, Cholamandalam Investment and Finance Company (CIFC) and SHTF. In the insurance space, we are OW on SBIL, HDFCSL and UW on MAXL and IPRU in our sector EAP. However, given the sharp run-up recently, valuations are not cheap, limiting upside potential.

Defence stocks rally as MoD approves military purchases worth Rs 38,900 cr

Walchandnagar Industries, Bharat Electronics, Bharat Forge and Apollo Micro Systems, and other stocks which are engaged in defence business were also gained in the range of 3 per cent to 10 per cent on the BSE. In comparison, the S&P BSE Sensex was up 0.54 per cent at 36,038 points at 12:40 pm. READ MORE

RIL net debt to dip with rights issue, Jio stake sale: Morgan Stanley

It said that multiple catalysts are in play with faster than expected deleveraging, improving demand and margin outlook on refining and chemicals, top quartile earnings CAGR of 23 per cent over F20-23, and digitisation, supporting multiples.
Reliance Industries announced today an investment of $252 million by Intel Capital for a 0.39 per cent stake in Jio Platforms. READ MORE

MARKET COMMENT :: Jyoti Roy, DVP Equity Strategist at Angel Broking on Jio-Intel deal

>> With the Intel deal, the company has raised investments of Rs 1,17,588 crore for a 25.1% stake in Jio Platforms from marquee investors like Facebook, Silver Lake Partners, General Atlantic, KKR, Intel etc. The company well on it’s way to achieve a net debt free status by raising INR 1.7lakh cr. through a combination of stake sale in Jio Platforms and rights issue which is leading to a rerating for the company.
We are positive on Reliance Industries Ltd. from a long term perspective as we believe that the digital and retail business will be key growth drivers for the company going forward. Potential listing of the digital and retail business over the next 3-5 years would also lead to significant value unlocking for shareholders in the long run. We also expect the hydrocarbon business to recover in the second half of the year as demand for petro products normalizes. Given no significant capex outlay in the near future, the hydrocarbon segment should generate free cash flows which can be used to fund expansion in other businesses. 

Crompton Consumer's fortunes may light up as Covid-19 lockdown eases

Crompton Greaves Consumer Electricals (Crompton Consumer) has gained about 21 per cent since May lows. While the company's March quarter performance had shown resilience on the margins front, even as sales declined, the easing of the lockdown has improved sentiment. Analysts, despite cutting their FY21 earnings to factor in the lockdown impact, have also been hopeful of a faster recovery for the company, given it’s product range, which is less discretionary and seasonal in nature. READ MORE

Uptick in annuity cash flows key for Prestige Estates projects

The Prestige Estates Projects stock has shed about 15 per cent since its results last week on disappointing March quarter (Q4) and a muted near-term outlook. Prior to the recent correction, the stock was the best performer among realty stocks since mid-May, gaining 65 per cent. Given its steady annuity income, the Bengaluru-based realty player was expected to be less impacted than listed players who are primarily in the residential space.  READ MORE

Most active stocks by volume

VODAFONE IDEA 10.08 0.40
DISH TV INDIA 8.22 -4.08
MOTHERSON SUMI 98.75 -4.73
TATA POWER CO. 50.80 1.91
» More on Most Active Volume

Trading volumes spurt in June; buoyancy in stock market boosts activity

The average daily trading volume (ADTV) for June on the NSE was Rs 61,400 crore, a YoY jump of 95 per cent. The BSE’s ADTV of Rs 5,000 crore, too, was double the June 2019 figure, the data compiled by ICICI Securities showed. Equity and currency derivatives, and mutual fund (MF) trading also witnessed a jump in volumes. The buoyancy in the stock market, especially in the broader markets, coupled with the entry of new investors, has increased activity, said experts. READ MORE

MARKET UPDATE:: Sensex at day's high

Opto Circuits locked in 5% lower circuit after zooming 1250% in 66 days

Shares of Opto Circuits were locked in upper circuit for 13th straight day, up 5 per cent to 52-week high level of Rs 19.85 on the BSE on Friday. However, the stock tumbled 9 per cent from its intra-day high and was locked in 5 per cent lower circuit at Rs 18:05. Till 11:25, a combined 3.13 million equity shares had changed hands and there were pending sell orders for 3.92 million shares on the BSE and NSE, the exchange data shows. READ MORE

Top gainers on BSE at this hour

HDFC LIFE INSUR. 578.20 5.52
» More on Top Gainers

Lakshmi Vilas Bank gains 5% on report Clermont Group eyes stake purchase

Shares of Lakshmi Vilas Bank surged 5 per cent to Rs 22.15 on the BSE on Friday after Business Standard reported that Singapore-based private equity player Clermont Group is in talks to pick up a sizeable stake in the bank. This round of capital infusion, if approved, could help LVB increase its capital adequacy from 3.45 per cent as on December 31, 2019, to over 7-8 per cent. READ MORE

Private trains by 2023. Here are trading strategies for rail-related stocks

Rail-related stocks are back in focus after Indian Railway said that India is likely to see its first privately operated train running by April 2023 and the bidding process for this will be completed by April 2021. The national transporter had invited requests for qualifications (RFQ) from private players on Wednesday to operate 151 trains covering 109 routes that might see investments of Rs 30,000 crore. READ MORE

Crude oil can hit $50/bbl in 2021; gas demand to pick up in India: Analysts

Despite the pick-up in economic activity around the globe after lockdowns triggered by the Covid-19 pandemic, Brent crude oil prices are likely to remain range-bound between $35 – 40 per barrel till the third quarter of the current calendar year 2021 (CY21), but move up to $45 – 50/barrel in the second half of CY21, suggests a note by S&P Global Platts. West Texas Intermediate (WTI) crude prices, on the other hand, are likely to hover between $40 – 45/barrel by then. Currently, Brent prices are hovering around the $42/barrel mark. READ MORE

Insurance stks gain; HDFC Life adds 5% on Nifty50 inclusion, SBI Life up 2%

Shares of insurance companies were in focus on Friday, with HDFC Life Insurance Company ralling 5 per cent to Rs 576 on the National Stock Exchange (NSE), after the exchange announced inclusion of the insurance company in the Nifty 50 index from July 31.
HDFC Life Insurance Company will replace Anil Agarwal-controlled Vedanta in the benchmark index, the exchange said in a release on Thursday. READ MORE

NEWS ALERT :: Will inspect import from all other countries to check for Chinese parts, says Power Min

(As reported by CNBC TV18)

NEWS ALERT :: Import of power equipment from China, Pakistan will need prior permission, says Power Min

>> Out of Rs 71,000 cr worth of import, China accounts for Rs 21,000 cr

>> India capable of manufacturing power equipments

(As reported by CNBC TV18)

NEWS ALERT | PM Modi reaches Ladakh on a surprise visit

NEWS ALERT :: June Services PMI comes in at 33.7 vs 12.6 in May

>> Composite PMI comes in at 37.8 vs 14.8 in May

Motherson Sumi slips 9% after board approves group restructuring plan

Shares of Motherson Sumi Systems Limited (MSSL) slipped 9 per cent to Rs 94.30 on the BSE on Friday after the company said its board has approved a major restructuring exercise, under which the domestic wiring business (DWH) would be demerged into a new firm, which will eventually be listed. For every share held in MSSL, one share would be allotted in the new firm. READ MORE

Bad news for financiers: CVs in for a long haul, may be last to recover

Commercial vehicles (CVs) have spoilt the party for both automakers and vehicle financiers, at a time when overall auto sales were picking up pace and had seen some recovery in June over May. Analysts forecast CVs to trail in the long race for revival of the sector, which will not be music to lenders’ ears. READ MORE

NEWS ALERT | PM Modi visits Leh amid LAC stand-off with China: TV reports

JB Chemicals gains 4%, nears 52-wk high as PE firm KKR to acquire 54% stake

Shares of J.B Chemicals and Pharmaceuticals surged 3.7 per cent to Rs 742 apiece on the BSE on Friday after the company said global investment firm KKR & Co. Inc. will pick up a controlling stake in the company. As part of the deal, KKR will acquire stake from the founding Mody family at Rs 745 per share, or at 5 per cent premium to Thursday's closing price of Rs 715 on the BSE. READ MORE

Rupee Opening

Rupee opens at over 3-month high of 74.60 per US dollar vs Thursday's close of 75.01/$

Indian IT firms may report 5-9% contraction in revenues for June quarter

Indian IT services firms are likely to report 5-9 per cent contraction in revenues for the June quarter, even though deal pipeline is expected to remain firm. According to industry analysts, margin will also face pressure, despite the various cost-cutting measures. READ MORE

Cadila gains 5% on DGCI nod for clinical trials of Covid-19 vaccine

Shares of Cadila Healthcare surged 5 per cent to Rs 380 on the BSE on Friday after the company said its vaccine candidate for Covid-19 (ZyCoV-D) has received the permission from DGCI for human clinical trials. In an exchange filing, the company said it has received the approval from Drug Controller General of India - Central Drugs Standard Control Organisation (DCGI-CDSCO) to initiate Phase I/II human clinical trials for its Covid-19 (plasmid DNA) vaccine. READ MORE

RIL gains 1% as Intel Capital to invest Rs 1,894 crore in Jio Platforms

At 09:21 am, the stock was trading 1 per cent higher at Rs 1,778 on the BSE as compared to around 0.5 per cent gain in the benchmark S&P BSE Sensex.
The stock had hit an all-time high of Rs 1,804 on June 22 this year while its 52-week low stands at Rs 867.82 on March 23, 2020. READ MORE

Broader market check

Motherson Sumi Systems slumps 7% post group reorganisation proposal

HDFC Life jumps over 3% as Co to replace Vedanta in Nifty index from Jul 31

Lakshmi Vilas Bank hits 5% upper circuit on report Clermont Group may pick stake in bank

As negotiations progress between capital-starved Lakshmi Vilas Bank (LVB) and AION Capital-backed Clix Capital over a merger, sources in the know say Singapore-based private equity player Clermont Group has also joined the talks to pick up a sizeable stake in the bank.

JB Chemicals and Pharma rises 3% as KKR to acquire controlling stake

Reliance Industries gains 1%; Intel Capital to pick 0.39% stake in Jio

Sectoral trends on NSE at Open

Sensex Heatmap at Open

Opening Bell | Nifty tops 10,600

Opening Bell

NEWS ALERT :: China's Services PMI comes in at 58.4 Vs 55 in May

>> New business for China services firms expands at the fastest pace in 10 years even as employment falls for the 5th straight month.

(Source: Reuters)

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

Markets at Pre-open

Markets at Pre-open

BROKERAGE VIEW :: Morgan Stanley on Gas companies

Top picks: Petronet LNG, Gujarat Gas, GAIL

>> Covid-19 to accelerate India's energy transition

>> Expect 21% earnings CAGR as volume and margin expand

>> Double upgrade to Gujarat Gas to 'overweight' call 


Maintains 'Buy', Target price: Rs 580

>> Higher CET-1 threshold key motivation for capital raise

>> Capital raise of Rs 12,000 cr will add 180 bps to FY21 CET-1

>> Co needs higher capital raise than private peers

>> Retain co as one of the top picks


Top picks: Hero MotoCorp, M&M

>> Tractor sales grew 15% YoY in June 2020, 2Ws outperform passenger and commercial vehicles

>> Estimate tractor industry growth of 15% YoY in FY21

>> FY21 forecasts imply potential upside risk for tractors

>> Prefer rural-focused and non-discretionary categories

Stocks to watch: RIL, HDFC Life, Motherson Sumi, JB Chemicals, Divi's Lab

RIL: Intel to invest Rs 1,894.5 crore for 0.39 per cent stake in Reliance Industries' Jio Platforms.
HDFC Life, SBI Card: Vedanta will be replaced by HDFC Life Insurance Company on Nifty with effect from July 31. It will be replaced by SBI Cards in the Nifty 100 and Nifty 500 indices. READ MORE

Investors should be cautious on gold after recent rally: Tradebulls Sec

Gold market continues to go from strength to strength but at around $1,800, it is facing stiff resistance. Today’s non-farm payroll data could either make gold break the $1,800 level and start fresh momentum on the upside or make the intermediate top.  READ MORE

Nifty may face resistance at 10,650 level, says Nilesh Jain of Anand Rathi

SELL NIFTY | TARGET: 10,400 | STOP LOSS: 10,650
The NIFTY index completed its 61.8 per cent Fibonacci retracement of the entire recent fall from the top, which is coming around 10,552 levels. The index is also forming a rising wedge pattern where the upper trend line is coming around 10,650 levels which will now act as immediate resistance. Thus, the risk and reward doesn’t support the long positions and also to hedge stock-specific long position, we advise initiating short positions in Nifty index. READ MORE

Bulk deals on BSE as on Thursday

Bulk deals on NSE as on Thursday

Rupee check

Source: Bloomberg

Oil falls as growing coronavirus cases stoke fuel demand worries

>> Crude prices fell on Friday as the resurgence of the coronavirus globally and in the United States, the world’s largest oil consumer, dimmed the prospects of fuel demand recovery.
>> Brent crude futures were down 37 cents, or 0.9%, at $42.77 a barrel as of 0042 GMT, and US West Texas Intermediate (WTI) crude futures fell 34 cents, or 0.8%, to $40.31 a barrel.

(Source: Reuters)

SGX Nifty update

>> At 8:26 am, the index was at 10,597 level, up 49 points or 0.48 per cent

NEWS ALERT :: Intel Capital to invest Rs 1,894.50 crore in Jio Platforms

>>  Intel Capital’s investment will translate into a 0.39% equity stake in Jio Platforms on a fully diluted basis.

>> Intel Capital's invetsment is at an equity value of ₹ 4.91 lakh crore and an enterprise value of ₹ 5.16 lakh crore

>> Intel Capital joins the list of marquee firms who have recently invested in Jio Platforms, taking the total investment amount to ₹ 117,588.45 crore.

>> This is 12th investment in Jio Platforms by global invetsors in 11 weeks.

(Source: BSE filing)

Asian stocks set to follow Wall Street rally

Source: Reuters

Wall Street closes higher after biggest payrolls jump on record

Source: Reuters

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