F&O expiry: Indices extend rally, Sensex surges 595 pts; Nifty Bank up 2.5%

Topics Markets | Coronavirus | MARKET WRAP

Brokers trade at their computer terminals at a stock brokerage firm in Mumbai
Extending their rally, the domestic benchmark indices ended around 2 per cent higher on Thursday - the last day of the futures and options (F&O) contracts for May series. 

Financial stocks continued their upward journey with the Nifty Bank index climbing 2.45 per cent to 19,170 levels. Of 12 constituents, 8 advanced and 4 declined. Besides, auto, IT, and metal stocks too lifted the indices higher. 

The benchmark S&P BSE Sensex surged 595 points or 1.88 per cent to 32,200.59 levels, with L&T (up 6 per cent) being the top gainer and ITC (down around 1 per cent) the biggest loser. NSE's Nifty zoomed 175 points or 1.88 per cent to 9,490.10 levels. Volatility guage, India VIX, dropped over 4 per cent to 30 levels. 

In the broader market, the S&P BSE MidCap index ended over 1.3 per cent higher at 11,622 while the S&P BSE SmallCap index settled at 10,769, up 150 points or 1.42 per cent.

Buzzing stocks

Shares of UFlex surged as much as 17 per cent to Rs 203 during the day on the BSE after the company announced that it has developed a Personal Protective Equipment (PPE) Coverall 'Flex Protect' in joint collaboration with lIT-Delhi and INMAS, DRDO, Delhi. The stock ended at Rs 187 apiece, up around 8 per cent. READ MORE

Sun Pharma ended nearly 2 per cent higher after the company reported a 17 per cent year-on-year (YoY) decline in its  consolidated profit before tax (PBT) at Rs 577 crore for the March quarter. READ MORE

 

Eicher Motors climbed over 8 per cent to Rs 16,216.90 on the BSE after after the company announced stock split plan to make the stock more affordable for the small retail investors and increase liquidity. The company manufactures the iconic Royal Enfield brand of motorcycles which leads the premium motorcycle segment in India.

Global markets

European shares rose for the fourth straight session on Thursday and the euro perched at a two-month high, as businesses returning to work and a 750 billion euro EU stimulus plan outweighed rising US-China tensions.

Asian markets had been subdued overnight after US Secretary of State Mike Pompeo had warned Hong Kong no longer warranted special treatment under US law, but there was no stopping Europe.

Shares in Hong Kong skidded as much 1.75 per cent before ending down a 0.7 per cent as Chinese shares managed to close positive. Japan’s Nikkei had jumped 2.3 per cent though US stock futures lost momentum in Europe to trade only 0.1 per cent higher.

In oil market, oil prices plunged after US industry data showed a surprise steep build in crude oil inventories. 

(With inputs from Reuters)

4:25 PM IST May series ended with a loss of 3.75%   Nifty gained more than 5% during the last two days of the May series on the back of strong global cues to end the series with a loss of 3.75%. At one point in time, Nifty was down by more than 10%. This fall was on the back of the massive rise of 14% in the April series, which was the highest gain in a decade.   In the Nifty and Bank Nifty, we have witnessed a rollover of 66%(Prov) and 71%(Prov) as against last three series average rollover of 69% and 64% respectively.   Outlook for the Next series: Considering the aggressive Put writing at 9,000 level for the June Options, long build-up by the FIIs’ in the Index Futures segment during the last few days and lower stock futures' Open Interest as compared to an average of the last one year-which in-turn Indicates lower leveraged positions, and fall in the VIX-Fear Index, we believe that one should remain optimistic for the June series with the stop loss of 9,000 levels.   On the higher side 10,000-10,200 level to act a resistance where calls have been written

3:56 PM IST In a continuation to positive expectations visible yesterday, benchmark indices gained by around 1.9%, led by the Auto and Banking index. A huge EU stimulus plan provided a boost to European shares while Asian shares were affected by the US-China diplomatic issues. Indian markets are banking on continued resumption of economic activities, inspite of still high number of new infections. Further stimulus measures are also expected to boost demand in the economy and help the most impacted sectors to recover. Market is rising on the back of expectations while there has been little change in ground realities.    

3:46 PM IST

3:40 PM IST

3:36 PM IST The S&P BSE Sensex rallied 595 points or 1.88 per cent to 32,200.59 while NSE's Nifty ended at 9,490, up 175 points or 1.88 per cent.

3:26 PM IST

3:15 PM IST

3:01 PM IST While estimates vary across brokerages and economists, the common thread that runs through these estimates is the fact that the economy is headed towards a recessionary phase with some even expecting growth to contract over 5 per cent in financial year 2020-21 (FY21). READ MORE  Photo: Shutterstock

2:54 PM IST The debenture has been rated as AA by Brickwork. The fund-raising will be used to meet the Haridwar-based company's working capital requirements and strengthen the supply chain network.   The non-convertible debentures (NCDs) carry a coupon rate of 10.1 per cent with a tenure of three years. The NCDs listed on the stock exchanges are redeemable. This is the first-ever issuance of debentures by Patanjali Ayurved. READ MORE

2:44 PM IST Total revenue from operations, however, declined 19 per cent YoY at Rs 935 crore during the quarter, compared with Rs 1,224 crore in Q4 of last year mainly due to de-growth in auto industry. During the year, the company implemented voluntary retirement schemes in certain locations at a cost of Rs 21.97 crore to improve the productivity and competitiveness of its business. READ MORE

2:37 PM IST

2:30 PM IST

LIVE UPDATES

MARKET COMMENT:: Nandish Shah, Technical Research Analyst, HDFC Securities on May F&O Series Expiry

May series ended with a loss of 3.75%
 
Nifty gained more than 5% during the last two days of the May series on the back of strong global cues to end the series with a loss of 3.75%. At one point in time, Nifty was down by more than 10%. This fall was on the back of the massive rise of 14% in the April series, which was the highest gain in a decade.
 
In the Nifty and Bank Nifty, we have witnessed a rollover of 66%(Prov) and 71%(Prov) as against last three series average rollover of 69% and 64% respectively.
 
Outlook for the Next series: Considering the aggressive Put writing at 9,000 level for the June Options, long build-up by the FIIs’ in the Index Futures segment during the last few days and lower stock futures' Open Interest as compared to an average of the last one year-which in-turn Indicates lower leveraged positions, and fall in the VIX-Fear Index, we believe that one should remain optimistic for the June series with the stop loss of 9,000 levels.
 
On the higher side 10,000-10,200 level to act a resistance where calls have been written

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

In a continuation to positive expectations visible yesterday, benchmark indices gained by around 1.9%, led by the Auto and Banking index. A huge EU stimulus plan provided a boost to European shares while Asian shares were affected by the US-China diplomatic issues. Indian markets are banking on continued resumption of economic activities, inspite of still high number of new infections. Further stimulus measures are also expected to boost demand in the economy and help the most impacted sectors to recover. Market is rising on the back of expectations while there has been little change in ground realities.
 
 

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


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


CLOSING BELL

The S&P BSE Sensex rallied 595 points or 1.88 per cent to 32,200.59 while NSE's Nifty ended at 9,490, up 175 points or 1.88 per cent.

MARKET CHECK


MARKET UPDATE | Lupin slips around 2% ahead of March quarter nos


Q4FY20 GDP growth expectation: How bad will Covid-19 impact the economy?

While estimates vary across brokerages and economists, the common thread that runs through these estimates is the fact that the economy is headed towards a recessionary phase with some even expecting growth to contract over 5 per cent in financial year 2020-21 (FY21). READ MORE 

Photo: Shutterstock

Patanjali's Rs 250 crore NCD subscribed within three minutes of opening

The debenture has been rated as AA by Brickwork. The fund-raising will be used to meet the Haridwar-based company's working capital requirements and strengthen the supply chain network.
 
The non-convertible debentures (NCDs) carry a coupon rate of 10.1 per cent with a tenure of three years. The NCDs listed on the stock exchanges are redeemable. This is the first-ever issuance of debentures by Patanjali Ayurved. READ MORE

Tube Investments hits 10% upper circuit on strong Q4 nos, fund raising plan

Total revenue from operations, however, declined 19 per cent YoY at Rs 935 crore during the quarter, compared with Rs 1,224 crore in Q4 of last year mainly due to de-growth in auto industry. During the year, the company implemented voluntary retirement schemes in certain locations at a cost of Rs 21.97 crore to improve the productivity and competitiveness of its business. READ MORE

INDEX GAINERS:: Hindalco surges around 4%


MARKET CHECK | Top 5 losers on the BSE at this hour


Attractive valuations, short covering: Why Nifty Bank gained 12% in 2 days

Between April 30 and May 26, Nifty Bank and Nifty Private Bank indices skid 19 per cent each. In comparison, the benchmark Nifty50 index declined 8.4 per cent during the period. However, Nifty Bank index surged a massive 1,270 points or over 7 per cent to settle at 18,710.55 on Wednesday, and extended its rally in trade on Thursday. Nifty Private Bank index, too, has surged 12 per cent in the last two trading sessions, ACE Equity data show. READ MORE

BROKERAGE VIEW:: Edelweiss Securities on Praj Industries

Given the lockdown, management highlighted slowdown in international ordering and execution delays in a few projects. The board has decided to cancel the buyback proposal in order to conserve cash given uncertainties. Praj continues to benefit from its R&D and technology prowess coupled with favourable government policies. However, translation of enquiries into orders is slower than expected given multiple challenges (feedstock, liquidity, logistics, etc), hindering scale up. Hence, maintain ‘HOLD’ with TP of Rs 60 (12x March 2022E EPS).

Rupee closing

Rupee ends lower at 75.75/$ vs Wednesday's close of 75.72 against the US dollar

BROKERAGE VIEW:: HDFC Securities on Max Financial Services

Maintain BUY | TP: Rs 620

A strategic JV partner such as AXSB provides long term distribution capability, ending uncertainty and market anxiety over the future of the AXSB distribution arrangement. We expect MAXL to lower its dependence on proprietary channels which will be VNBM accretive as investments in channels reduce. We have increased our VNB estimates for FY20/21E by 18.4/15.6%, and fine tuned our DCF assumptions, resulting in a 10.7% increase in TP to Rs 620.

Key risks: Lower growth, higher cost over-runs, supply overhang due to promoter pledges, and any hurdles in deal.

MARKET UPDATE | S&P BSE Capital Goods index rallies over 4%


Types of charts used in technical analysis and how to interpret them

Technical charts help traders take an informed decision while making a financial commitment in the markets. They are a graphical representation of historical price, volume, and time intervals. Over the years, several researches have co-related chart with technical tools like moving average, trendlines, and technical indicators. READ MORE 


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


Covid-19 crisis: Govt wants PSUs to ramp up dividends, share buybacks

The central government is assessing the cash position of state-owned companies and may ask them to ramp up dividend payouts and share buybacks as much as possible, people in the know told Business Standard. This comes at a time when the Covid-19 crisis is expected to derail the government’s revenue maths for 2020-21, hitting the mop-up from sources such as taxes and divestment. READ MORE


NEWS ALERT | China's parliament approves Hong Kong national security bill: Reuters

China’s parliament today overwhelmingly approved directly imposing national security legislation on Hong Kong to tackle secession, subversion, terrorism and foreign interference in a city roiled last year by months of anti-government protests.
 
The National People’s Congress voted 2,878 to 1 in favour of the decision to empower its standing committee to draft the legislation, with six abstentions. The legislators gathered in the Great Hall of the People burst into sustained applause when the vote tally was projected onto screens.

(as reported by Reuters)

NEWS ALERT | Outlook on the operating environment for Indian banks 'negative' due to pandemic uncertainty: Fitch

-- Duration and severity of the pandemic will affect asset quality and earnings

(as reported by CNBC TV18)

European indices open higher


Dabur India recovers 4% from day's low, trades 2% up despite weak Q4 nos

Shares of Dabur India moved higher by 2 per cent to Rs 439, recovering nearly 4 per cent from the day's low on the BSE on Thursday, despite weak earnings for the quarter ended March 2020 (Q4FY20) on value buying. In the past five weeks, the stock of personal products company has underperformed the market by falling 15 per cent, as compared to a 1 per cent rise in the S&P BSE Sensex. READ MORE  


NEWS ALERT | US FDA issues Establishment Inspection report for Dr Reddy's Telangana IPDO unit

-- US FDA determines 'no action indicated' status for the unit

SECTOR WATCH :: Mid-cap IT

Mid-tier IT companies have seen strong performance since the recent lows of March, outperforming IT large caps by 15%. Many of the quality mid-caps such as NIIT Technologies, Mindtree, L&T Infotech and Mphasis are up 40% on an average in the past 2 months on better Q4FY20 results and decent deal wins. Our expectations from the mid-caps, like the previous down cycles, was that these firms will be impacted more from Covid-19 compared to their larger peers.

Higher client concentration and greater proportion of discretionary work would lead to higher impact for mid-caps versus larger peers. However smaller deal sizes and quick response to the lockdown to ensure business continuity, which in many cases was better than larger peers, led to strong performance and outlook for mid-caps.

(Source: Antique Stock Broking)

IIFL on Torrent Pharma

Torrent’s 4Q Ebitda was 3% ahead of our estimates, primarily led by a 70bps beat on Ebitda margins. Although Torrent’s India business grew 11% YoY (15%, adjusted for Covid-19 related supply delays) in 4Q, the next two quarters are expected to be muted for the domestic business, given lockdown-related impact on demand. Torrent’s predominantly chronic portfolio would help to partially mitigate the demand hit and, hence, we have cut our India growth forecast for Torrent, from 12% to 8% in FY21.

Torrent has also faced supply challenges for its export business. Cost containment efforts around lower marketing spend and control on employee costs would cushion the impact on margins. We have downgraded our FY21/22 EPS by 7-8%, to account for lower India growth and margins. Impact on the India business is transient and should normalise by 2HFY21. Maintain BUY.

IIFL on Titan

In its latest update, Titan highlighted that while the lockdown has weighed on sales in April, the subsequent lifting of restrictions has allowed it to open ~43% of its 1,850 stores. Sales at these open stores are at 50% their normal trajectory and improving gradually. Titan expects demand to normalise after a quarter, albeit 1H profitability would be impacted by CoViD related pressures.

We cut our FY21 EPS by 24% and FY22 EPS by 5%, to factor in near-term headwinds and concerns about weak consumer sentiment for discretionary spends. Healthy balance sheet and liquidity position (Rs10bn commercial paper raised in April/May at attractive rates) place Titan well to gain market share in the jewellery space. Stock trades at 45x FY22 EPS; ADD.

F&O cues

(Source: Antique Stock Broking; data as of May 27 close)



Edelweiss on Dabur

Rural continues to perform better than urban for Dabur. In the current environment, we believe Dabur is well placed to capitalise on consumers’ rising preference for herbal and natural products (reflected in 400% surge in demand for chyawanprash and 80% growth in honey) and strong rural play (45% revenue share). Maintain ‘BUY’ with target price of Rs 506.

HDFC twins contribute over 250 points to Sensex's 500-point rally today


HDFC Securities on Trent

Trent, like peers will go through its COVID19 blues, however, its ability to navigate the crisis is strongest in peer set as the retailer remains well capitalized (Rs. 7.24bn of cash/eq). Ergo it remains best-placed to gain market share in the aftermath of the crisis. Note: Trent has already utilized ~Rs 8/9.5bn raised recently (via Tata Sons). We maintain our ADD RECO with an SOTP-based TP of Rs. 460/sh (earlier: Rs. 490/sh). FY21/22 EBITDA cuts aren’t comparable as we have moved to IND-AS 116 accounting.

FII ownership in Nifty-500 at 5-year low: Motilal Oswal Securities


Nomura on Sun Pharma


ICICI Securities on Dabur

We continue to see three pillars to Dabur story, (1) strong innovation pipeline (new products at ~3% of revenues), (2) likely cost reduction measures yielding ~150bps of operating margins (which may be redeployed for growth), (3) a culture change with a bias for action under Mohit Malhotra, CEO. That said, we continue to see headwinds of second-order impact of likely lower economy growth, downtrading, wholesale channel challenges etc. ADD.

ICICI Securities on Sun Pharma

The company is focusing on cost rationalisation measures and improving product mix. Continued scale-up in global specialty sales is positive and we believe loss in Absorica sales post generic competition in H2FY21 could be compensated by ramp-up of Ilumya and Cequa. We remain positive on long-term outlook considering strong India business, pick-up in specialty sales and attractive valuations. Maintain BUY.

NEWS ALERT | Ujjivan Financial Services up over 11%


BUZZING STOCK | RIL trades over 2% higher


Esab India in focus, surges 10% on interim dividend of Rs 70 per share

Shares of Esab India moved higher by 10 per cent to Rs 1,198 on the BSE on Thursday after the company announced an interim dividend of Rs 70 per share for its shareholders. “The board of directors of the Company at its meeting held today i.e, 28 May, 2020 has declared an interim dividend of Rs 70 per equity share of Rs 10 each (700 per cent) for the year ended 31 March, 2020 resulting in an outflow of Rs 107.75 crore (subject to deduction of tax at the source where applicable),” Esab India said in an exchange filing. READ MORE

Bond market signals rocky road ahead for Tata Motors, Jaguar Land Rover

The bond market is signalling a rocky road ahead for both Tata Motors and its British subsidiary, Jaguar Land Rover (JLR), as they struggle with sales. The yield on JLR bonds has more than doubled since the pandemic blew out of proportion in early March and is refusing to cool down. READ MORE 


US weighs options to 'punish' China over Hong Kong; sanctions likely

The Trump administration is crafting a range of options to punish China over its tightening grip on Hong Kong, including targeted sanctions, new tariffs and further restrictions on Chinese companies, according to US officials and people familiar with the discussions. Such moves could mark the opening salvoes of the US response as President Donald Trump weighs how far he is prepared to go after the State Department's assessment on Wednesday that Hong Kong is no longer autonomous enough from Beijing to deserve special treatment under US law that helped make it a global financial hub. READ MORE

 

Eicher Motors hits 2-month high, rallies 12% in 3 days on stock split plan

Shares of Eicher Motors were trading higher for the third straight day, up 4 per cent at Rs 15,589 on the BSE on Wednesday after the company announced stock split plan to make the stock more affordable for the small retail investors and increase liquidity. The company manufactures the iconic Royal Enfield brand of motorcycles which leads the premium motorcycle segment in India. READ MORE

BUZZING STOCK:: IndusInd Bank surges 8%; stock's the top Sensex gainer at this hour


Blue Dart: Muted volumes, revenues amid high costs to weigh on margins

Weak margin performance in the March quarter and lack of revenue visibility in the near term led to a 3.4 per cent dip in the stock price of Blue Dart Express. India’s largest listed logistics company by market capitalisation reported a 7 per cent fall in revenues due to an estimated Rs 100 crore revenue loss towards the end of March. Volume decline was higher than overall revenue fall as the company raised prices for select customers in January and February. READ MORE 

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After Fitch and CRISIL, S&P projects Indian economy to contract 5% in FY21

"The Covid-19 outbreak in India and two months of lockdown — longer in some areas — have led to a sudden stop in the economy. That means growth will contract sharply this fiscal year. Economic activity will face ongoing disruption over the next year as the country transitions to a post-Covid-19 world," S&P said in a statement. READ MORE

Sun Pharma up nearly 2% post-March quarter nos; here's what brokerages say

The fall in the company's PBT was below the consensus estimate of Rs 1,361 crore, caused by multiple one-offs and lower other income. Net profit, too, saw a 37 per cent YoY fall to Rs 399.8 crore, against estimates of Rs 950-1,000 crore. The one-offs pertained to an anti-trust litigation, a central excise refund, and a settlement reached by its US subsidiary Dusa Pharmaceuticals. READ MORE

UFlex partners with IIT Delhi to develop PPE Coverall; stock surges 17%

Shares of UFlex surged 17 per cent to Rs 203 in the early morning deals on the BSE on Thursday after the company announced that it has developed a Personal Protective Equipment (PPE) Coverall 'Flex Protect' in joint collaboration with lIT-Delhi and INMAS, DRDO, Delhi. "Flex protect, that comes with four-layered protection and has anti-microbial coating, has been approved by the Defence Research and Development Organisation (DRDO) for use by the front-line health workers who are fighting the battle against Covid-19. The PPE Coverall developed by UFlex and lIT-Delhi has been tested well for being anti-microbial," it said in an exchange filing. READ MORE

Rupee opening

Rupee opens weaker at 75.90/$ vs Wednesday's close of 75.72 against the US dollar

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IT stocks dip in an otherwise firm market


MARKET UPDATE :: Sensex extends rally, up over 300 pts


Ahead of Q4 nos | TVS Motor Co gains over 1%

Axis Capital sees a 23 per cent YoY decline in revenues to Rs 3,370 crore and a 50.8 per cent fall in net profit to Rs 70 crore. The brokerage is penciling in around 10 per cent YoY increase in average selling price (ASPs) due to price increases and better mix (higher share of exports). READ PREVIEW HERE


NEWS ALERT :: UFlex partners with IIT Delhi to manufacture PPE

>> The PPE Coverall developed by UFlex and lIT-Delhi has been tested well for being anti-microbial. The South Indian Textiles Research Association (SITRA) has certified the fabric of PPECoverall being compliant with Dry Microbial Penetration Resistance Test thereby implying fabric's protection against infectious agents.

>> UFlex is participating in the tender of various government requirements to supply the PPE Coveralls which will be retailed via chemists and e-cornrnerce platforms.


Reliance Ind-RE surges 3%


Oil India adds 1.7%

>> The company said that on Wednesday, the producing well of Baghjan 5 under Baghjan Oilfield of Oil India in Tinsukia district (Assam) suddenly became very active while work over operations were on.


Vedanta gains 2% despite rating downgrade

>> India Ratings and Research has downgraded Vedanta’s long-term issuer tating to ‘IND AA-’ from ‘IND AA’. The Outlook is Negative. 


Adani Power rises over 1%

>> Co on Wednesday said Madhya Pradesh Electricity Regulatory Commission has approved setting up of a 1,320 MW thermal power plant in Madhya Pradesh.


Future Retail jumps 5%

>> Debt-ridden Future Retail on Wednesday said its board has approved raising up to Rs 650 crore by issuing non-convertible debentures (NCDs) to pare debt.


Sun Pharma trades marginally weak


Sectoral trends on NSE at open


Sensex Heatmap at Open


Opening Bell


Opening Bell


F&O Outlook | Geojit Financial Services

>> The Nifty May futures closed at 9309.4 with a gain of 3.05% or 275.4 points on Wednesday. Open interest of the current month expiry declined by 11.34 lakh shares indicating covering of short positions in the markets. Nifty future traded at discount of 5.55 points against a premium of 4.95 points on Tuesday.

>> FIIs were buyers in the F&O segment; bought derivatives worth Rs 4292.99cr as per provisional figures yesterday. On the open interest front, ahead of the monthly expiry, FIIs added a whopping position of 68.44% in future index long while also added 6.28% in future index short.

>> Outlook: The huge additions to FII longs in Index futures seen yesterday was also accompanied by a solid 17% increase each in both call longs as well as short puts. The positive bets have now risen 15% above the 50 day average, an unusual turn just ahead of expiry. On the broad spectrum of Nifty, the near the money strikes have seen massive short covering, with fresh longs added from 9,350 through 9,600. But beyond 9,600 through 10,000, there is hardly any action, given the expiry today, but perhaps also because of limited upside expectations. 

Currency and Bonds | Outlook by Reliance Securities

>> The Indian Rupee could start on a weak note against the US Dollar, tracking weak Asian currencies amid escalation of tension between U.S. and China.

>> Asian currencies are weak today after U.S. President Donald Trump said he was working on a strong response to China's proposed security law in Hong Kong.
 
>> So, the Rupee could likely be quoted at around 75.80-75.82 per dollar in early trades today compared with 75.72 at close on Tuesday. USDINR spot range will be 75.60-76.10 for the session.

>> As for bonds, Indian government bond yields are likely to trade largely unchanged in early session, as traders await the much-anticipated announcement of an open market operation by the central bank. US 10-year yield started flat this Thursday morning in Asian trade.

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


Market at Pre-open


Market at Pre-open


Stocks to watch: Sun Pharma, TVS Motor, SBI, Lupin, USL, Adani Power, Ceat

Adani Power on Wednesday said Madhya Pradesh Electricity Regulatory Commission has approved setting up of a 1,320 MW thermal power plant in Madhya Pradesh.
 
IndoStar Capital Finance: The non-banking financial player on Wednesday said it has raised Rs 1,225 crore equity capital from Brookfield, an alternative asset manager. READ MORE

Gold Outlook | Sriram Iyer, Senior Research Analyst at Reliance Securities

Gold and silver tumbled on Wednesday as the easing of coronavirus lockdown restrictions around the world fed optimism that the global economy could rebound. However, gold and silver rebounded from lows of the session amid rising tensions between US and China and a weaker dollar.
 
Looking ahead, prices could remain range bound as escalating tensions between US and China offset losses from optimism of reopening of global economies.
 
Technically, LBMA GOLD Spot has bounced back from $1693 levels forming a Bullish Hammer Candlestick indicating some sign of Bullish reversal. Prices are intact in a range of $1690-$1720. However breakout above $1720 is awaited for further upside movement.
 
MCX Gold June contract has bounced back after taking a support of trend line near 45775 level indicating a bulls are active around this levels. Therefore to continue bullish momentum prices should sustain above 46300 levels.

BROKERAGE VIEW :: Nomura on Sun Pharma

Maintains 'Buy'; Target price: Rs 525

>> Q4 nos in-line with expectations

>> Ilumya scale-up could negate the impact of higher costs due to specialty biz

BROKERAGE VIEW :: Morgan Stanley on Sun Pharma

Maintains 'Overweight'; Target price: Rs 449

>> Positive operating leverage thesis stays

>> Specialty biz could be mid-term re-rating catalyst

>> Forthcoming earnings cycle and potential re-rating underscore Overweight stance 

BROKERAGE VIEW :: CLSA on Sun Pharma

Maintains 'Buy'; Revised target price: Rs 560 from Rs 590

>> Profits were hindered by lower gross margin. Even adjusted for one-offs, profit was below estimate

>> Specialty chem biz continues to attract traction

>> Cut FY21-22 EPS estimates by 6% on higher depreciation and lower other income

BROKERAGE VIEW :: UBS on United Spirits

Maintains 'Sell'; Target price: Rs 480

>> Multiple near and medium-term uncertainties

>> Revenue down 11.4% with PA volumes declining 20% YoY

>> Tax increase likely to dent consumer sentiment

BROKERAGE VIEW :: Credit Suisse on United Spirits

Maintains 'Outperform'; Target price: Rs 620

>> Large hit to prestige volumes, aggressive cost controls helped to maintain margin

>> Net debt reduction continues despite spike in working capital needs

>> H1FY21 likely to remain weak

BROKERAGE VIEW :: Motilal Oswal Financial Services on United Spirits

Maintains 'Neutral'; Target price: Rs 515

>> UNSP’s 4QFY20 reported standalone net sales declined 11.4% YoY to INR19.9b (v/s est. INR21.3b). Underlying net sales, excluding one-off sale of bulk Scotch, declined 14.8% YoY. Overall reported volumes declined 13.3% (v/s est. -10%). 

>> Despite significant gross margin compression, reported EBITDA margin expanded 100bp YoY to 13.6% (v/s est. 11.9%), primarily delivered through savings in operating costs. As % of sales, reported other expenses were down 130bp YoY, staff costs were down 200bp YoY and ad spends were down 200bp YoY.

BROKERAGE VIEW :: Motilal Oswal Financial Services on Dabur

Maintains 'Neutral'; Revised target price: Rs 410 

>> Dabur’s 4QFY20 weak results were followed by muted management commentary on the near term outlook. We also expect an impact on FY21 earnings owing to its high dependence on wholesales and on the profitable MENA business getting affected by the sharp crude price decline.

>> The COVID-19 crisis in 4QFY20 resulted in INR3.6b impact on top line and INR1.1b on the bottom line. Likely impact in 1QFY21 – assuming no further lockdowns – would be INR4.5b on revenue and INR800-900m on PAT.

>> Weak results and muted near-term outlook has led to 7.4%/9.0% decline in EPS forecasts for FY21/FY22E. Dabur’s new CEO has introduced many initiatives such as (a) growing the Healthcare segment, (b) the power brand strategy, and (c) new launches. While these hold promise from a longerterm perspective, earnings growth for FY21E is likely to be weak, continuing the tepid trend of the previous 5 years (~7% EPS CAGR).

>> The high wholesale dependence and international business (especially in the MENA region) is also likely to impact top line growth in the near term. Valuations are fair at 43.7x FY22E EPS

BROKERAGE VIEW :: Motilal Oswal Financial Services on Sun Pharma

Maintains 'Buy'; Revised target price: Rs 525 from Rs 535

>> We lower our earnings estimate by 6.8%/2% for FY21/FY22 to factor weakness in the key markets in India and other emerging markets on account of the COVID-19-led disruption. Accordingly, we reduce our price target to INR525 on a 22x (unchanged) 12M forward earnings basis.

>> We believe SUNP’s ROE is at a trough and would improve with a 20% earnings CAGR over FY20–22, led by improving traction in the Specialty portfolio, enhanced MR effort in DF, and better operating leverage.

Here's why Gaurav Garg of CapitalVia is bullish on the HDFC twins

Buy: HDFC Bank Limited (Above Rs 904)
 
Target: Rs 960
 
Stop loss: Rs 875
 
The stock is witnessing reversal pattern on the daily charts and it has also bounced from its important moving averages. Further, it is witnessing resistance breakout from 904, which might lead the stock to witness more upward movement. Considering the technical evidence discussed, we recommend buying the stock above 904 for the target of 960, keeping a stop loss at 875 on a closing basis. READ MORE

Bulk deals on NSE as on Wednesday

Bulk deals on BSE as on Wednesday

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


Rupee check

Source: Bloomberg


Oil check

>> Oil futures took a beating as investors fretted about Trump’s response to China.

>> US crude oil futures fell 2.68% to $31.93 early Thursday.

>> Brent Crude futures were down 1.7 per cent at $34.15 per barrel-mark.

Asian stocks gain on economic hopes, Hong Kong remains a risk

Source: Reuters


Wall Street rises with economic hopes

Source: Reuters


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