Market participants witnessed a topsy-turvy session on Tuesday ahead of Prime Minister Narendra Modi's address to the nation at 8 pm today. Index heavyweights such as Reliance Industries (RIL), HDFC Bank, and Asian Paints contributed the most to the benchmark indices' fall while ITC, Bhart Airtel and HDFC gave the much-needed support.
RIL came under selling pressure on profit booking. The stock will turn ex-rights tomorrow.
Asian Paints ended 3 per cent lower after global brokerage firm Goldman Sachs downgraded the stock to "Sell" with the target price of Rs 1,111. READ MORE
At the index level, the S&P BSE Sensex ended 190 point or 0.6 per cent lower at 31,371.12. During the day, the index hit a high and low of 31,536.89 and 30,844.66, respectively. Expectations of stimulus package boosted sentiment to an extent; however, weak global cues kept the investors cautious.
On the NSE, the 50-share index Nifty ended just shy away of the crucial 9,200-mark at 9,196.55, down 43 points or 0.46 per cent. Volatility index, India VIX, gained 0.4 per cent to 38.19 levels.
In the broader market, the S&P BSE MidCap index declined 0.75 per cent to 11,411 levels while the S&P BSE SmallCap index slipped 0.58 per cent to 10,566 points.
Asian shares tumbled on Tuesday on growing worries about a second wave of coronavirus infections after the Chinese city where the pandemic originated reported its first new cases since its lockdown was lifted. MSCI’s broadest index of Asia Pacific shares outside of Japan stumbled more than 1 per cent, snapping two straight sessions of gains.
Hong Kong's Hang Seng index was among the hardest hit, down 1.78 per cent followed closely by Australia , off 1.24 per cent. South Korea's KOSPI faltered 0.85 per cent. China's blue-chip CSI300 index was off 0.5 per cent after the country's factory prices fell at the sharpest rate in four years in April, worse than analysts' expectations.
In Europe, shares edged higher following a clutch of upbeat quarterly earnings reports, but investors remained cautious of a resurgence in new coronavirus cases as hard-hit economies lift lockdowns.
In oil market, Oil futures rose, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June in a bid to help drain the glut in the global market that has built up as the coronavirus pandemic crushed fuel demand.
MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services
Indian Indices closed in the negative, in sync with global markets. With virus infections continuing and PM Modi set to address the nation tonight, investors are awaiting news on how we plan to exit from the lockdown and what support the government will provide to the people and the businesses. Any perceived disappointment will be negative for the markets.
SECTOR WATCH | Here's how sectoral indices on NSE performed today
MARKET AT CLOSE | Losers and gainers on the S&P BSE Sensex
The S&P BSE Sensex ended 190 points or 0.6 per cent lower at 31,371 while NSE's Nifty50 slipped 43 points or 0.46 per cent to 9,196.55 levels.
MARKET CHECK | Top 5 gainers on the BSE at this hour
ArcelorMittal offers $2 bn shares at discount to accelerate debt reduction
The company said on Tuesday it will sell $750 million of shares at a price of $9.27, equivalent to 8.57 euros. That is near to their value at Monday's close, when ArcelorMittal had said it would issue new shares, but some 17% down from Friday.
On Tuesday, the shares were trading 4.6% lower on the day at 8.23 euros, making them the worst performers in the FTSEurofirst300 index of leading European shares. READ MORE
Bharti Airtel shares surge 5%, near record high
Shares of Bharti Airtel continued their northward journey for the third straight day, up 5 per cent at Rs 563, on the BSE on Tuesday. The stock was trading close to its record high level of Rs 569 touched on February 17, 2020. The stock of the telecom services provider has rallied 16 per cent in the two weeks, as compared to a 2.2 per cent decline in the S&P BSE Sensex. READ MORE
MARKET CHECK :: Indices pare losses
STOCK ALERT :: Vodafone Idea up for second straight day; gains 20% in 2 days
NEWS ALERT :: IBA submits 'Bad Bank' proposal to Fin Min, RBI: TV reports
Alert: IBA is Indian Banks' Association
BUZZING STOCK:: Bharti Airtel at day's high, up 4%
Unsure whether India gains if businesses shift from China: Abhijit Banerjee
Speaking to a Bengali news channel ABP Ananda on Monday evening, Banerjee said that everyone is blaming China for the Covid-19 outbreak as it has origin there. "China is being blamed now for the coronavirus outbreak. Even people are saying that India stands to benefit as businesses will shift from China and come to India. But that may not be true," the economist said. READ MORE
MARKET VOICE | Shyam Sekhar
Largecaps, beaten down & otherwise, are trading with 40+ plus delivery volumes. Interesting trivia in a market that’s risen from the lows with higher delivery base buying and is still perceptibly weak.
Perception is going to be a big challenge. Unless, we break it we’re gone.
MARKET UPDATE:: Shares of broadcasting & cable TV operators rally in an otherwise weak market
-- NDTV, Raj TV and Hathway Cable & Datacom locked in upper circuit of 20 per cent
-- TV18 Broadcast up 11 per cent on heavy volumes
Vodafone meets 2019 expectations, pulls guidance on Covid-19 uncertainty
Vodafone, the world's second-largest mobile operator, met expectations with a 2.6% rise in full-year core earnings to 14.9 billion euros ($16.10 billion) but did not give a current year outlook due to the uncertainty caused by the coronavirus.
"We are experiencing a direct impact on our roaming revenues from lower international travel and we also expect economic pressures to impact our customer revenues over time," it said on Tuesday. READ MORE
Rupee ends stronger at 75.50 per US dollar vs Monday's close of 75.74/$
Trump not interested in renegotiating trade deal as China urges fresh talks
Trump, who himself has considered abandoning the pact signed in January, told a White House press briefing he wanted to see if Beijing lived up to the deal to massively increase purchases of US goods, the Reuters reported. READ MORE
Provide govt-backed Rs 3 trn liquidity line to coronavirus-hit unit: FICCI
According to the Federation of Indian Chambers of Commerce and Industry (FICCI) and global consultancy firm Deloitte, the cost of such support to government to banks would be limited to Rs 30,000–40,000 crore over five years.
In a two-step approach, the first task would be to isolate the impact of Covid on businesses and move the losses from P&L to the balance sheet. The second step entails banks to provide focussed relief through additional Working Capital Term Loan (WCTL), Funded Interest Term Loan (FIT L), and etc that businesses may require to overcome the Covid impact. READ MORE
MARKET CHECK | Shriram Transport Finance tanks 11%
BROKERAGE VIEW:: MOFSL on Coromandel Int'l
Valuation and view
CRIN is likely to close FY20 with PAT growth of 37%, on account of EBITDA growth of 16% (EBITDA margins are likely to expand 210bp); the robust performance is attributed to higher manufacturing volume growth (driven by 22% volume growth in rabi/H2FY20) and lower RM prices.
The government has fixed the subsidy rate for nitrogen (N) at INR18.9/kg (flat YoY), phosphorous (P) at INR14.9/kg (-2% YoY), potash (K) at INR10.1/kg (-9% YoY), and sulfur (S) at INR2.4/kg (-12% YoY). We believe the new subsidy rate would not have a major impact on CRIN’s overall performance.
Moreover, the India Meteorological Department (IMD) has announced that it expects Southwest monsoon rainfall (June–September) to be normal this year.This bodes well for the consumption of fertilizers and agrochemicals.
In FY21, we expect manufacturing volumes to grow 6% (given the expectation of normal rainfall) and manufacturing EBITDA/MT of INR3,500/MT, flat YoY (due to the current RM price scenario). Also, the newly commenced operations at the phos acid plant (in Oct’19) would provide cost savings. All this, in turn, would aid in maintaining EBITDA/MT.
We estimate 12% EPS CAGR over FY20–22.
We have ascribed a 17x PE multiple (in-line with the five-year average multiple) and arrived at TP of Rs 738. Maintain Buy.
MLDs are close-ended structured products, debt or equity-linked, that come with a two to three year lock-in. For equity-linked structures, the underlying can be an index such as Nifty 50 or a basket of stocks. The payoff for investors can be in the form of a fixed coupon or participation rate. Debt MLDs typically pay a coupon of 7-11 per cent. READ MORE
RIL tanks 6% on profit booking; stock to turn ex-rights on Wednesday
Shares of Reliance Industries (RIL) were down 6 per cent to Rs 1,483 on the BSE on Tuesday on back of heavy volumes on profit booking. The stock will turn ex-rights on Wednesday, May 13. Since March 23, the stock of the oil-to-telecom conglomerate has outperformed the market by surging 78 per cent, as compared to a 21.5 per cent rise in the S&P BSE Sensex till Monday. READ MORE
MARKET CHECK | Midcap index, too, slips in the trade
MARKET UPDATE:: Sensex off day's low, but still down over 400 points
PMS schemes deliver positive returns on the back of rebound in market
For a one-year period, the Consistent Compounders strategy run by Marcellus is the best performer with returns of 16.6 per cent, followed by MNC PMS run by Anand Rathi Advisors (12.3 per cent) and Coffee Can run by Ambit Capital (10.7 per cent).
The bloodbath in the markets in the past two months has come as a body blow for the PMS industry. A sizeable number of PMS schemes lean towards mid- and small-caps in their portfolio and run concentrated portfolios of 15-20 stocks. READ MORE
BUZZING STOCK | Bajaj Finance gains over 2%
NEWS ALERT | US FDA issues EIR for Alkem Lab's US unit: BSE filing
Low valuations don't make TechM a cool bet; investors advised caution
Despite a disappointing March quarter (Q4FY20) performance, Tech Mahindra (TechM) shares are up 5.5 per cent in a week. This may be an attractive valuation of 12 times FY21’s estimated earnings, based on hopes of execution of large deals secured earlier, and the stock’s underperformance in the past year. READ MORE
NEWS ALERT | PM to address the nation at 8 pm today
Shri @narendramodi will be addressing the nation at 8 PM this evening.
Mysterious 2,819% stock rally has traders scratching their heads
International Holdings (IHC), which derived most of its revenue in 2019 from fish farming in the United Arab Emirates, has reached a market value of $14 billion, up from about $133 million a year ago. The steep rally in its shares hasn’t been dented by this year’s global equity market meltdown sparked by the coronavirus pandemic, or the collapse in oil prices which roiled West Asian markets. The company’s shares are up 351 per cent in 2020. READ MORE
BROKERAGE VIEW:: Edelweiss Securities on Metals sector
As the COVID-19 crisis unfolds, the sector is having a gladiatorial brush with uncertainties. In our view, FY21E is more likely to be the year of ‘fight for survival’ with focus shifting to controlling oft ignored aspects---cost, capex and cash requirement. Currently, volume and (surprisingly) not price is the point of contention. We estimate domestic steel consumption to decline 13% YoY in FY21, resulting in 8-10% volume dip for companies under coverage. While we expect recovery in FY22, FY19-isque performance (and hence stock prices) will remain elusive. We reiterate our preference for balance sheet over beta and retain Coal India (CIL) as our top pick. However, we also see JSPL and Jindal Stainless weathering the current crisis better than FY16 due to low capex intensity, better fixed cost structure and operating leverage prospects.
NEWS ALERT | PSBs sanctioned loans worth Rs 5.95 lakh crore between March 1 and May 8, 2020: FM
PSBs sanctioned loans worth Rs 5.95 lakh crore for more than 46.74 lakh accounts from the MSME, Retail, Agriculture & Corporate sectors between March 1 and May 8, 2020. Total financing worth Rs 1.18 lakh crore was provided to NBFCs. @FinMinIndia@DFS_India@RBI@PIB_India
RIL, HDFC twins contribute 450 points to Sensex's 600-point fall today
Crude oil may struggle to top $40/barrel mark despite a glimmer of optimism
The oil market bulls may have as much cabin fever as road users. The first sign of positive news and oil prices jumped over $10/barrel in a week in lockstep with drivers getting into their cars as some travel restrictions ease. But the road to recovery is likely to be long and bumpy. Gasoline consumption is a proxy for oil demand in many key countries – from the US to India – and there are tentative signals offering encouragement as some lockdown measures loosen. READ MORE
Financials under pressure; Shriram Transport, AU SFB hit lower circuit
Shares of financial services companies, including non-banking financial companies (NBFCs), banks, housing finance and micro finance institutions (MFIs), were under pressure on Tuesday as the companies from these sectors have announced weak set of numbers for the January-March quarter (Q4FY20), largely due to the Covid-19 pandemic. READ MORE
MCX prepares for negative trading in all commodities after crude oil row
The MCX’s software, so far, doesn't allow trade below Rs 1 in any commodity. Following the controversy and the footsteps of the New York Mercantile Exchange (Nymex), the MCX is working towards enabling its software for negative price trading. The MCX crude oil contract is a mirror of the Nymex contract. READ MORE
Morgan Stanley sees 3% contraction in global GDP; 12% dip in MSCI EM index
Morgan Stanley expects global economic growth as measured by gross domestic product (GDP) to contract by 3 per cent in 2020 before rebounding to 5.9 per cent in 2021. As regards India, Morgan Stanley sees no growth (0 per cent) for 2020, but expects it to rebound sharply to 7.7 per cent in 2021, which makes India the fourth fastest growing economy in the Asia ex-Japan region – only behind Philippines (2021e GDP growth at 12.6 per cent), Malaysia (9.6 per cent) and China (9.2 per cent). READ MORE
BROKERAGE VIEW:: JM Financial on Pharma sector
Post Covid-19 market movements have led to renewed interest and focus on pharma stocks. Technical factors like low weights, investor apathy and under ownership have contributed to the sharp outperformance of the sector (Nifty Pharma +16% YTD vs Nifty 50% YTD). However, for the current rally to be real and the stocks to sustain recent gains, earnings have to turn supportive for the sector. With the steep valuation discount that the sector was trading at relative to its long-term history being bridged, the easy money has been made. From here on, therefore, investors ought to take a view on possibilities of earnings surprise (both positive & negative) for the sector.
Our stock recommendations, therefore, are as usual a combination of bottoms-up drivers and relative valuation comforts. We back Sun Pharma, Cipla, Strides & Alembic as our preferred picks and plays on the positive earnings drivers. Similarly, we turn negative and incrementally cautious on Torrent Pharma and Lupin. For Dr Reddy’s (Upgrade to HOLD), Natco and IPCA (Downgrade to HOLD), we await better entry points.
Nifty IT index trades higher in a weak market
BROKERAGE VIEW:: CLSA on ICICI Securities
I-sec saw a rise in its activation rate (percentage of new clients trading during the first quarter) of bank-sourced clients from 26% in 1QFY20 to 71% in 4Q post-the- recently-commenced-revenue-sharing arrangement with ICICI Bank. I-Sec embarked on open architecture framework in 4Q wherein non-ICICI Bank customers could also trade on its platform; this will widen its customer sourcing funnel. Fully-digital account opening has helped it to maintain its pre-Covid 19 daily customer acquisition run-rate during lockdown. We cut our FY21 earnings but see a rebound from FY22 onwards. We retain our BUY recommendation and but lift our target price from Rs 340 to Rs 450 based on an 18x FY22CL PE.
MARKET CHECK | Tata Steel declines 3.7%
IndiGo, SpiceJet surge up to 5% on report of resumption of domestic flights
Aviation stocks InterGlobe Aviation and SpiceJet surged up to 5 per cent on the BSE on Tuesday, in an otherwise weak market, amid reports that the goverment could soon resume domestic flight operations in India. Additionally, reports suggest InterGlobe Enterprises, the parent of the country’s largest airline IndiGo, has evinced interest in Virgin Australia, Australia’s second-largest aviation company. READ MORE
MARKET CHECK | Top 5 losers on the BSE at this hour
Piramal Enterprises tumbles 10% after posting net loss of Rs 1,703 cr in Q4
Shares of Piramal Enterprises slipped 9.68 per cent to Rs 842 on the BSE on Tuesday after the company reported a net loss of Rs 1,703 crore in the March quarter of financial year 2019-20 (Q4FY20) compared to a net profit of Rs 455 crore in the corresponding quarter last year. The company reported a consolidated pre-tax loss of Rs 1,296 crore during the quarter, as opposed to a pre-tax profit of Rs 678 crore in the same period last financial year because of incremental provisioning in its financial services business on account of Covid-19. READ MORE
Rupee opens lower at 75.88/$ vs Monday's close of 75.74 against the US dollar
Asian Paints declines for 11th straight day on uncertain demand outlook
Shares of Asian Paints hit a seven-week low of Rs 1,512, down 4 per cent on the BSE on Tuesday on concerns of demand destruction in the near term due to the outbreak of coronavirus. The stock was quoting lower for the 11th straight trading day and was at its lowest level since March 25, 2020. Since April 27, in the past 11 trading days, the stock of Asian Paints has underperformed the market by falling 18 per cent, as compared to a 1.8 per cent decline in the S&P BSE Sensex. READ MORE
MARKET CHECK | Top 5 gainers on the BSE at this hour
>> Glenmark Pharmaceuticals, a research-led, integrated global pharmaceutical company has initiated Phase 3 clinical trials in India on Antiviral tablet Favipiravir, for which it received approval from India’s drug regulator DCGI in late April. Glenmark is the first company in India to initiate Phase 3 clinical trials on Favipiravir for COVID-19 patients in India.
>> Glenmark has successfully developed the API and the formulations for the product through its inhouse R&D team. Favipiravir has demonstrated activity against influenza viruses and has been approved in Japan for the treatment of novel influenza virus infections. The molecule if commercialized, will be marketed under the brand name ‘FabiFlu®’ in India
Asian Paints declines 3.5% on report Goldman Sachs has downgraded the stock
>> As per news reports, Goldman Sachs has downgraded the stock to "sell" with the target price of Rs 1,111.
Indian Oil Corp gains over 1.5% on raising production capacity
>> Indian Oil Corp (IOC), the country''s largest oil firm, has raised operating levels at its refineries to about 60 per cent after fuel demand showed a gradual pick up on easing of lockdown restrictions
Nestle India trades marginally higher ahead of Q4 nos
IRCTC hits 5% upper circuit for second straight day
Maruti Suzuki trades in the red despite starting production
InterGlobe Aviation gains 1% in a weak market
>> InterGlobe Enterprises, the parent of the country’s largest airline IndiGo, has evinced interest in Virgin Australia, Australia’s second-largest aviation company. Virgin Australia entered bankruptcy administration two weeks ago after lawmakers refused financial aid during the Covid-19 pandemic on fears it would amount to a bailout of foreign carriers that together own 90 per cent of the airline’s stock.
Result Impact | Piramal Enterprises tumbles over 6%
>> Piramal Enterprises has reported a consolidated pre-tax loss of Rs 1,296 crore in the March qurter, as opposed to a pre-tax profit of Rs 678 crore in the same period last financial year (Q4FY19) because of incremental provisioning in its financial services business on account of Covid-19. The company reported a net loss of Rs 1,703 crore in Q4FY20 compared to a net profit of Rs 455 crore in Q4FY19.
HDFC Bank declines 3%; top loser on the Sensex
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
Stock picks by Nilesh Jain of Anand Rathi
BUY BRITANNIA | TARGET: 3,250 | STOP LOSS: 2,920
The stock has witnessed some throwback post breakout from the levels of 2800 and now after retesting the breakout levels it has again started its up move. It is also taking support of its 21-DMA on daily chart which is currently placed at 2940. The momentum oscillator MACD is very well in buy mode on the weekly scale. READ MORE
Stocks to watch: IndiGo, Nestle, IOC, Bandhan Bank, Asian Paints, IndiaMart
Earnings today: As many as 11 companies, including Nestle India, Bandhan Bank, Havells, JK Paper, IndiaMART InterMESH, and Blue Star, are slated to announce their March quarter results later in the day.
IndiGo: InterGlobe Enterprises, the parent of the country’s largest airline IndiGo, has evinced interest in Virgin Australia, Australia’s second-largest aviation company. Virgin Australia entered bankruptcy administration two weeks ago after lawmakers refused financial aid during the Covid-19 pandemic on fears it would amount to a bailout of foreign carriers that together own 90 per cent of the airline’s stock. READ MORE
BROKERAGE VIEW :: CLSA on Infra Companies
Top picks: L&T, J Kr Infra, Sadbhav Engineering, NCC, IRB
>> Capex funding tool likely to rise 78% in FY21
>> Market concerns w.r.t CRIF diversions unfound
>> Govt looks serious for $1.5 trillion NIP
BROKERAGE VIEW :: Jefferies on Godrej Properties
Maintains Buy; Target price raised to Rs 954 from Rs 945
>> Covid-19 has reduced visibility on sales outlook
>> Work has commenced on half of the projects
>> Have strong project pipeline, low gearing and strong track record
>> Co set for market share gains
NEWS ALERT | China April CPI inflation at -0.9% : Reuters
>> China’s consumer price index (CPI) rose 3.3% from a year earlier
>> Meanwhile, the producer price index (PPI) fell 3.1% from a year earlier, the National Bureau of Statistics said in a statement on Tuesday, compared with a 2.6% drop tipped by a Reuters poll of analysts and a 1.5% decline in March.
NEWS ALERT | Biocon Biologics drug substance facilities in Bengaluru receive EU GMP certification: BSE filing
>> These facilities are used for the manufacture of drug substance of Pegfilgrastim and Recombinant Human Insulin and manufacturing related activities for Insulin Glargine and Insulin Aspart and were inspected by the regulatory agency between January 20 and 23, 2020.
>> This certification will enable us to continue addressing the growing needs of patients in the EU markets and enhance access to our high quality biosimilars. We remain committed to global standards of quality and compliance, says Company Spokesperson.
FII/FPI & DII trading activity on NSE, BSE and MSEI
Oil prices rise as Saudi Arabia pledges further supply cut
>> Oil futures climbed in early trade on Tuesday, boosted by an unexpected commitment from Saudi Arabia to deepen production cuts in June to help drain the glut in the global market that has grown as the coronavirus pandemic crushed fuel demand.
>> Brent crude futures climbed to a high of $30.11 a barrel and were up 0.9%, or 28 cents, at $29.91. US West Texas Intermediate (WTI) crude futures were up 1%, or 24 cents, at $24.38 after touching a high of $24.77.
SGX Nifty update
>> At 8:20 am, the index was at 9,147.00 level, down82.10 points or0.89%.
Asian stocks set to fall on growing second virus wave fears
US indices close barely higher as investors balance pandemic with recovery