RIL, HDFC Bank help indices end 4-day losing streak; Sensex gains 748 pts

Photo: Kamlesh Pednekar
Snapping its four-day losing streak, the domestic stock market ended around 2 per cent higher on Tuesday, led by buying in Reliance Industries (RIL), and HDFC Bank. 

The S&P BSE Sensex today rallied 748 points, or over 2 per cent to settle at 37,688, with RIL (up 7 per cent) being the top gainer and Tech Mahindra (down nearly 3 per cent) the biggest loser. 

NSE's Nifty ended at 11,095 levels, up 204 points, or 1.87 per cent. Volatility index, India VIX, dropped 6 per cent to 23.67 levels. 

Among individual stocks, HDFC Bank ended nearly 4 per cent higher at Rs 1,041 on the BSE after the lender named Sashidhar Jagdishan as the successor to Aditya Puri, their chief executive officer once the latter retires in October 2020. The move, analysts say, will remove the overhang on the stock as regards the successor for the private sector lender. READ MORE

Wockhardt extended its rally and ended 10 per cent higher at Rs 333.70 on the BSE after the company said it will supply millions of doses of multiple Covid-19 vaccines, including that being developed by AstraZeneca and Oxford University, under a deal with the UK government. READ MORE

IT stocks, on the other hand, slipped in the trade after the US President Donald Trump signed an executive order restricting federal agencies from contracting or subcontracting foreign workers, hurting Indian IT professionals who work in the US on the H-1B visa. READ MORE

In the broader market, the S&P BSE MidCap index settled 1 per cent higher at 13,856 and the S&P BSE SmallCap rose 1.23 per cent to end the session at 13,317 levels. 

On the sectoral front, barring Nifty IT, all the other indices on the NSE ended in the green. Nifty Bank surged over 400 points or around 2 per cent to settle at 21,487. 

Global markets

European shares slipped on Tuesday as disappointing earnings reports from Diageo and Bayer took the shine off a jump in growth-linked cyclical stocks, while investors awaited signs of progress on more US fiscal stimulus.

In Asia, China stocks ended higher, underpinned by strong gains in banks as investors cheered Beijing’s latest move to ease pressure on the country’s financial institutions. The blue-chip CSI300 index rose 0.1 per cent, to 4,775.80, while the Shanghai Composite Index also inched up 0.1 per cent to 3,371.69.

In commodities, oil prices eased amid concerns that a fresh wave of Covid-19 infections around the world will see a pickup in fuel demand stalling amid tighter lockdowns - just as major producers ramp up output.

(With inputs from Reuters)


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

"Indian benchmark indices ended the day with gains with positivity emerging post the RBI decision to approve the new CEO for HDFC Bank. Private Banks and RIL supported the gains in the benchmark indices. Global cues were also mostly positive, and aided the markets, following better US manufacturing data. With Indian exports reaching almost the same level on a YoY basis, economic activities are showing signs of revival which offset concerns about the increasing virus infections and the uncertainties that this brings across. The markets may look to consolidate, but as things stand, the current liquidity can ensure that any corrections will be bought into."

BSE Snapshot at Close

IT stocks end in the red in a strong market

Counters that supported Sensex's 700 pts-rally

Sectoral trends on NSE at Close

Sensex Heatmap at Close

Closing Bell | Markets snap 4-day losing streak

>> The S&P BSE SEnsex ended 748 points, or 2.03 per cent, higher at 37,688 level.

>> The broader Nifty50, meanwhile, closed 211 points, or 1.93 per cent, higher at 11,102 level.

Market Voice :: RBI policy likely to address the issue of financial stability

The forthcoming Reserve Bank of India (RBI) policy is likely to address the issue of financial stability. With inflation set to stay higher than the upper band of RBI inflation target and given that inflation expectations in India are adaptive in nature, it will be a surprise if the central bank cuts again even if it’s token.

INDEX LOSER:: Tech Mahindra dips nearly 3%

TVS bets on premium bikes to improve margins in domestic and global markets

Over the past 14 years, TVS has developed a host of premium offerings ranging from 160-310cc. TVS Apache was able to garner a substantial share of the premium motorcycle market with 370,000 units, posting a decline of only 21 per cent in sales, compared with a 25 per cent drop year-on-year in the premium motorcycle industry in 2019-20. TVS churns out 25,000 units a month of TVS NTORQ, a premium scooter whose sales grew by 24 per cent even as the scooter segment in India declined by 17 per cent. READ MORE

STOCK ALERT :: BPCL pares losses as DIPAM secy clarifies on divestment plan

>> Says, BPCL divestment to take place as planned


Dhanlaxmi Bank slides 5% as Q1 provisions jump 3-fold YoY to Rs 37 crore

Interest income was down to Rs 236.65 crore in the quarter under review from Rs 240.43 crore reported in the year-ago period. Besides, its total income increased to Rs 278.62 crore from Rs 256.75 crore in the year-ago period, the lender said. The lender's provisioning for bad loans and contingenices spiked to Rs 37.02 crore in Q1FY21 as against Rs 9.27 crore a year ago. However, it was lower from previous quarter's Rs 56.89 crore. READ MORE 

BUZZING STOCK:: Zen Tech surges 19%

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

European markets trade weak

Source: Reuters

JSPL reports 29% rise in July standalone steel sales, says demand up

Jindal Steel & Power (JSPL) has reported a 29 per cent increase in standalone steel sales of 6,37,000 tonnes in July compared to the same period last year. Last year in the same period, standalone steel sales were at 4,93,000 tonnes. Consolidated steel sales were higher by 25 per cent year-on-year to 7,62,000 tonnes during July 2020 as compared to 6,11,000 tonnes during the same period last year. READ MORE 

Rupee Closing

Rupee ends at 75.05 per US dollar vs Monday's close of 75.01/$

BROKERAGE VIEW:: YES Securities on CreditAccess Grameen Ltd


Retain BUY. Assume conservative covid‐related credit cost of 5‐6%. However, FY22 should be a normal year for growth and profitability. Valuation at 2.1x FY22 P/ABV does not fully capture FY22 recovery and an impending capital raise.

Economic recovery fragile due to Covid-19, states' lockdowns: FinMin

The government issued on July 30 guidelines for the third phase of lifting curbs imposed to stop the spread of the coronavirus disease, removing night curfew outside containment zones and allowing gyms and yoga centres to reopen from August 5. The guidelines said that schools, colleges, theatres, swimming pools, metro rail, cinema halls and bars will remain closed. READ MORE

BPCL tumbles over 6% on report it's divestment may not happen in FY21

At 1:15 pm, the stock was trading 5.2 per cent lower at Rs 396 on the BSE, as against 611 points, or 1.65 per cent, rally in the benchmark S&P BSE Sensex. A combined 14.88 million shares had changed hands on the counter on the BSE and NSE, data shows. READ MORE

BPCL slips nearly 5%


BROKERAGE VIEW:: Centrum Broking on SBI

SBI Q1FY21 results beat estimates on PPoP and PAT, driven by higher loan growth (+7.7% YoY) and better NIM (due to lower slippages). Deposit growth was robust at 5.5% QoQ and 16% YoY driven by healthy accretion in CASA and RTD. GNPA/NNPA improved QoQ led by lower slippages and higher write-offs which also led to elevated provisions. Covid-19 related provisions were Rs 18.4bn (total Rs 30.1bn till date). Term loans under moratorium are 9.5% (less than 2 EMIs paid). Exposure to Covid-19 hit sectors and PCR at 67.1% is comforting. CET-1/CRAR is adequate at 10.14%/13.4%. Slippage guidance is 1.5-1.6% over and above the lockdown impact. We envisage value unlocking from subsidiaries and RoE/RoA to improve in FY22E to 0.6%/10.2%. Valuation at 0.4x P/core FY22 ABV is attractive. Retain BUY and multiple at 0.8x core FY22 ABV and TP at Rs 267.  

Sector Watch :: IT stocks under pressure; TechM, HCL Tech slip up to 3%


Sebi tightens the procedural guidelines for proxy advisory firms

The new norms are aimed to bring in more transparency, avoid conflict of interest, and give companies a chance to provide their viewpoint. Proxy advisors are firms that give voting recommendations on resolutions floated by companies to their clients, who are typically institutional investors, such as mutual funds and private equity. READ MORE

Jubilant Life slips 2.5% after scaling a 52-week peak in early trade

The stock, however, erased its morning gains later and slipped into the negative territory. At 12:05 AM, the stock was quoting 2 per cent lower at Rs 845 on the BSE. It hit a low of Rs 840.45 against Monday's close of Rs 862.30. In comparison, the S&P BSE Sensex was trading 547 points or nearly 1.5 per cent higher at 37,486 levels. READ MORE 

Buy, sell, repeat! No room for 'hold' in whipsawing stock markets

There are different ways of slicing it, but Reuters calculations based on New York stock exchange data show the average holding period for US shares was 5-1/2 months in June, versus 8-1/2 months at end-2019.
The previous record low of six months was hit just after the 2008 crisis. In 1999, for example, 14 months was the average. READ MORE

Succession uncertainty over; HDFC Bank stk outperformance unlikely: Experts

“It is good that an internal candidate has been named who fully understands the bank and its operations. This will lead to the uncertainty and speculation regarding who will take over from Mr. Puri at rest. Leadership in any company / institution is important and plays a vital role in how the future shapes up for that company / institution. That said, companies like HDFC Bank have always attracted good talent and will continue to do so,” said G Chokkalingam, founder and CIO at Equinomics Research. READ MORE

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

Infosys, TCS: How to trade IT stocks after Trump's order on H-1B visa use

IT stocks slipped on Tuesday after the US President Donald Trump signed an executive order restricting federal agencies from contracting or subcontracting foreign workers. The Nifty IT index declined nearly 1 per cent. Among individual stocks, Tech Mahindra traded over 2.5 per cent lower while HCL Tech and L&T Infotech were down over 1.5 per cent. READ MORE 

Weak US outlook, pricing pressures weigh on Sun Pharma's revenue growth

Sun Pharmaceutical’s June quarter results were weighed down by weak sales in the US market, especially in the high-margin specialty segment. Its American sales slid 24.6 per cent on a sequential basis, as Sun’s specialty portfolio, as well as its subsidiary Taro Pharma’s sales, dipped 33-38 per cent. READ MORE

Investing in sovereign gold bond scheme at high prices could be risky

The Sovereign Gold Bond Scheme (SGB) 2020-21-Series V is open for subscription from August 3-7. The price of this tranche has been fixed at Rs 5,334 per 1 gram of gold.
Investors need to carefully decide whether they should lock in their money in SGBs for the long term at the current high prices or consider more liquid alternatives, like gold exchange-traded funds (ETFs). READ MORE

VST Industries in focus, rallies 11% after June quarter numbers

In a separate filing to exchanges on the impact of Covid-19 pandemic on the company's business operations, VST Industries said that the business operations were adversely impacted in the form of disrupted supply chain and decline in consumer demand. "Since mid-May 2020, while the manufacturing operations have gradually started returning to normalcy, we estimate the pandemic to continue having its impact on sales," it said in the press release. READ MORE 

YES Bank rallies 3% after Moody's upgrades it to B3 on equity infusion

YES Bank shares gained 3.5 per cent to quote at Rs 12.41 on the BSE on Tuesday after global agency Moody's upgraded YES Bank’s long-term foreign currency issuer rating from “Caa1” to “B3” on equity capital raise of Rs 15,000 crore. READ MORE

NEWS ALERT :: Govt issues Economic Report

>> Says, healthy monsoon to support agri-based economy

>> Hopes to see agri-growth in coming months

>> Sees global economy moving towards recovery

>> Sees economy returning to normalcy since the lifting of lockdown

Wockhardt to supply Covid-19 vaccines to UK govt; stock soars 27% in 3 days

Shares of Wockhardt extended their gains into third consecutive day, and were locked in the 10 per cent upper circuit band at Rs 334 apiece, on the BSE on Tuesday after the company said it will supply millions of doses of multiple Covid-19 vaccines, including that being developed by AstraZeneca and Oxford University, under a deal with the UK government. READ MORE

IT stocks slip as Trump signs order to restrict H-1B visa use; TCS falls 1%

At 09:38 am, the Nifty IT index was 0.73 per cent lower at 17,834.70 levels, with 9 out of 10 constituents trading in the red. Among individual stocks, Larsen & Toubro Infotech slipped the most - down 2 per cent to Rs 2,441.60. Next on the list were Tech Mahindra (down over 1.5 per cent), HCL Technlogies (down over 1.3 per cent), Tata Consultancy Services (TCS), and Mindtree - both down 0.85 per cent. NIIT Tech was the only stock on the index that was trading in the green. In comparison, the benchmark Nifty50 index was ruling 58 points or 0.53 per cent higher at 10,949.40. READ MORE 

Rupee Opening

Rupee opens lower at 75.16 per US dollar vs Monday's close of 75.01/$

Analysts cautious on road ahead for auto sector despite July sales recovery

Sales of automobile companies recovered in July after a subdued couple of months as Covid-19 triggered a nation-wide lockdown. India’s largest carmaker, Maruti Suzuki for instance, said it had sold 108,000 units in July, 88.2 per cent more than June 2020, and 1.3 per cent more over July 2019. The automaker had reported zero sales in April due to the lockdown. READ MORE

Cipla trades mildly higher

BUZZING STOCK:: Jubilant Life rises over 2% after launching generic version of remdesivir

BUZZING STOCK:: Wockhardt extends gain, trades over 8% higher

YES Bank gains 2.5% after Moody's upgrade

>> Moody's has upgraded YES Bank’s long-term foreign currency issuer rating from “Caa1” to “B3” as equity capital raise of Rs 15,000 crore has bolstered its solvency.

BUZZING STOCK:: Exide Industries jumps 5.5%

All sectoral indices on the NSE trade in the green

Gainers and losers on the S&P BSE Sensex


At 09:16 AM, the S&P BSE Sensex was trading 213 points or 0.58 per cent higher at 37,152 while NSE's Nifty was ruling at 10,963, up 71 points, or 0.65 per cent. 

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

Markets at Pre-open

BROKERAGE VIEW:: ICICI Securities on VST Industries

VST has a wide presence at lower price point cigarettes. With a continuous increase in taxes & duties, the consumer market now has been largely concentrated at 64 & 69 mm cigarettes. Moreover, the gap between ITC & VST’s (at lower end) prices led to market share gains for the latter. The possibility of curbs on illicit cigarettes due to supply disruptions could also help drive volume growth for the company. We retain our positive stance valuing it at 20x FY22 PE with a target price of Rs 4,450/share and BUY recommendation.

BROKERAGE VIEW:: Centrum Broking on Ambuja Cement

We have used SOTP valuation to arrive at the fair price of ACEM (based on replacement cost), and arrive at a target price of Rs 228/sh. At our TP the stock trades at an EV/EBITDA of 7.4x CY21 earnings. ACEM’s clinker capacity addition will address its current clinker shortage issues. Additionally, improvement in capacity utilisation will aide cost savings (~Rs 50/tonne). Additionally, cost savings measures with new railway siding in Rajasthan will only boost/maintain earnings (even in challenging times). A healthy balance sheet (cash of Rs70bn CY21E) and debt-free status only adds comfort. Maintain BUY.

BROKERAGE VIEW:: Emkay Global on Tata Communications


Operating performance in global data services (GDS) was strong, and management sounded confident on revenue growth. We estimate EBITDA CAGR of 11% and FCF generation of Rs 55bn over FY21-23E. We resume coverage with a Buy rating and a SoTP-based TP of Rs 950.

BROKERAGE VIEW:: Prabhudas Lilladher on Thyrocare Technologies

Rating: SELL | CMP: Rs 677 | TP: Rs 307

COVID regime has changed the business mix for THYROCAR and impacted its profitability because of 1) lower gross margin at 53% (v/s 72% YoY) due to use of high-cost reagents for COVID test, 2) aggressive pricing for COVID test and 3) increased employee cost at 16% of sales (v/s 11% YoY and 13% QoQ). We remain negative on the entire diagnostic chain due to possible structural change in the coming years and expensive valuation at Mcap/sales of 10.3x, PE of 60x (FY21E) and 40x (FY22E). We maintain SELL recommendation and retain TP of Rs 307 based on 18x of FY22E.

BROKERAGE VIEW:: ICICI Securities on Tata Chemicals

The company is likely to complete value added capex such as soda bicarb, agro science and salt as per original timeline, while there was a delay of 12-18 months in soda ash and cement capacity. We believe the company’s focus remains on the specialty portfolio, which should likely inch up in the years to come, resulting in an improvement in operating margins. We value the company on a SOTP basis and arrive at a target price of Rs 285 including the investment portfolio value. We have a HOLD recommendation on the stock.

BROKERAGE VIEW :: Morgan Stanley on Tata Motors

Maintains 'Equal-weight', Target price: Rs 113

>> JLR is seeing V-shaped recovery in volumes

>> Sequential earnings momentum is strong

>> High leverage, geo-political risks, and EV disruption keeps us EQ

BROKERAGE VIEW :: Fitch on Telcos

>> Indian telcos' rvenues grew stronger

>> Companies liekly to weather Covid-19-slowdown

>> Expect industry's mobile segment EBITDA to grow 25-30% YoY

>> Robust growth will be driven by tariff hikes, feature phone user migration to 4G, and high monthly data usage 

NEWS ALERT :: JLR US sales for the month of July fall 18% YoY

>> Jaguar USA & Land Rover USA sales also slip 18% each YoY, reports CNBC TV18.


Nifty view and stock picks by Nilesh Jain of Anand Rathi

BUY NIFTY | TARGET: 11,050 | STOP LOSS: 10,800
The Nifty index witnessed profit booking at higher levels and reached near its major support of 200-DMA, placed at 10,850. The momentum indicators and oscillators on the weekly scales are still in buy mode which hints of some buying at lower levels. On the derivative front, some addition was seen at 10,800 put strike which holds the maximum open interest and is likely to act as immediate support. Thus, aggressive traders can initiate a long position with a strict stop loss of 10,800. READ MORE

Bulk deals on NSE as on Monday

Bulk deals on BSE as on Monday

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

Rupee check

Source: Bloomberg

Oil prices drop on fuel demand worries

>> Oil prices fell in early trade on Tuesday on concerns about fuel demand growth as a fresh wave of Covid-19 infections around the world sparks tighter lockdowns just as major producers ramp up output.
>> US West Texas Intermediate (WTI) crude futures fell 22 cents, or 0.5% to $40.79 a barrel, while Brent crude futures fell 27 cents, or 0.6% to $43.88 a barrel.

(Source: Reuters)

SGX Nifty hints at green start

>> At 8:12 am, the index was at 10,941 level, up 30 points or 0.27 per cent.

Nasdaq hits record high close as traders eye M&A and stimulus

Source: Reuters

Asia shares set to gain after manufacturing data, tech stocks boost

Source: Reuters

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