MARKETS ON FRIDAY: Indices end flat, Nifty holds 10,550; TCS gains 7%

Benchmark indices were flat on Friday even as minutes of the central bank’s policy panel meeting stoked expectations of an interest rate hike, with losses in financials and metals overshadowing gains in information technology stocks.

The S&P BSE Sensex ended at 34,416, down 12 points while the broader Nifty50 index settled at 10,564, down 1 points.

The rupee dropped to its lowest in more than a year following a hawkish tone in the minutes, released on Thursday, of the Reserve Bank of India’s monetary policy committee (MPC) meeting that took place earlier this month.
Among sectoral indices, the Nifty PSU Bank index slipped nearly 2.5% led by a fall in shares of Bank of India and IDBI Bank.
Investors cheered the results of Tata Consultancy Services, sending its shares to an all-time high of Rs 3,421 after the country’s top software services exporter posted its biggest-ever profit on Thursday.
Globally, world stocks dipped on Friday but were set for a second week of gains after a strong start to the global corporate earnings season, while a rally in commodity prices fizzled out.
The MSCI All-Country World Index, which tracks shares in 47 countries, was down 0.3%.
Oil dipped on Friday but stayed near three-year highs reached earlier this week, with ongoing OPEC-led supply cuts and strong demand gradually drawing down excess supplies.

(with Reuters inputs)


Nifty IT index surged 4.80% on Friday. Top gainers:

MINDTREE 987.95 897.60 90.35 10.07
TCS 3414.00 3191.15 222.85 6.98
TECH MAHINDRA 696.10 665.20 30.90 4.65
INFOSYS 1179.65 1132.85 46.80 4.13
HCL TECHNOLOGIES 1057.00 1018.55 38.45 3.77

Sectoral Trend

BSE Sensex: Gainers and losers

Market at close
The S&P BSE Sensex ended at 34,416, down 12 points while the broader Nifty50 index settled at 10,564, down 1 points.
Analysis: Asian oil demand to hit record, but industry can't take eyes off Middle East

Asian oil demand will hit a record in April just as global crude values are lifted to levels not seen in three years by Middle East supply risks and top exporter Saudi Arabia withholding output and noisily pushing for prices at $80 to $100 per barrel.
Most analysts have pointed to escalating Middle East conflicts, a crisis in Venezuela, and the supply cuts of Saudi Arabia and other producers as the main drivers taking global benchmark Brent and U.S. West Texas Intermediate crude futures this week to their highest since late 2014 at almost $75 and $70 a barrel, respectively. READ MORE

Ashok Leyland expects 20% growth in bus business this year

Commercial Vehicle major Ashok Leyland is expecting a 20 per cent growth in its bus business, as the segment is picking up growth from a slow pace last year. In the previous year, the industry and the company had seen a decline of around 23 per cent owing to various reasons including confusion among customers regarding the delayed Bus Body Code. However, the company managed to increase its market share by 0.3 per cent. READ MORE

Global Check

European markets were lower, as investors monitored a fresh batch of corporate earnings and economic data.
In Asia, equities were dragged lower after the world's largest chipmaker delivered a disappointing forecast late Thursday. Taiwan Semiconductor Manufacturing slashed its revenue target to the lower end of forecast, citing weaker-than-expected demand for smartphones. MSCI's broadest index of Asia-Pacific shares, excluding Japan, was off almost 1 percent on Friday.
Buzzing Stock

Prakash Constrowell share price rallied 10% after the company has been declared L-1 bidder by the MCGM (Municipal Corporation of Greater Mumbai) for the new project Dumpsite Reclamation at Mulund Dumping Ground (MDG) in Mumbai by adopting suitable technology for existing garbage dump.
JB Chemicals slips on receiving closure order for Daman plant
J B Chemicals & Pharmaceuticals fell 2.33% to Rs 312.65 on BSE after the company said it received an order from Pollution Control Committee, Daman for closure of its formulation manufacturing facility at Daman.
Market Check

S&P BSE Sensex 34,381.72 -0.13%
Nifty 50 10,551.10 -0.13%
S&P BSE 200 4,638.44 -0.27%
Nifty 500 9,334.10 -0.24%
S&P BSE Mid-Cap 16,770.44 -0.61%
S&P BSE Small-Cap 18,145.78 -0.16%

India's oil imports from Inran fell 15.7 per cent in fiscal year 2017-18

India's oil imports from Iran during the 2017-18 fiscal year fell by 15.7 per cent from a year ago as state refiners reduced purchases after a row over development rights for an Iranian natural gas field, according to data from shipping and industry sources.

India, the world's third-biggest oil importer, shipped in a record 4.46 million barrels per day (bpd) oil in the fiscal year that ended in March to feed its expanded refining capacity. During the period, Indian refiners received about 458,000 bpd of oil from Iran, compared to about 543,500 bpd during the prior year period, the data showed. READ MORE

Alrosa plans rough diamond trading in India, seeks reduction in 40% tax

Russian diamond-mining major Alrosa will start rough diamond trading in India once the government brings the tax on it down to 0.56 per cent from 40 per cent now — to match the rates in other major trading hubs of the world. The 40 per cent rate is applicable in special notified zones (SNZ), including the Bharat Diamond Bourse (BDB), where Alrosa opened its first office in India on Thursday. READ MORE

Sebi scans Facebook 'likes'; finds evidence in insider trading case

To catch manipulators, markets regulator Sebi has started looking at Facebook accounts of suspected persons, with 'friends' and 'likes' for posts being scanned in insider trading cases. The watchdog checked the Facebook profiles of suspected persons to ascertain whether they were 'connected' in a case related to violation of insider trading norms. READ MORE

Metal and mining stocks decline as copper prices fall

Key indices moved in a small range in negative zone in mid-morning trade. At 11:19 IST, the barometer index, the S&P BSE Sensex, was down 48.83 points or 0.14% at 34,378.46. The Nifty 50 index was down 23.45 points or 0.22% at 10,541.85. Shares of index heavyweight Reliance Industries dropped. Metal and mining stocks declined as copper prices fell in global commodity markets. Telecom stocks saw mixed trend. Negative Asian stocks weighed on the domestic bourses. READ MORE
Goldman sees strong oil demand through 2018

Goldman Sachs said it expects global oil demand growth to remain strong this year and contribute to further declines in oil inventories.

"We believe that the combination of strong developed markets momentum and accelerating emerging markets growth will combine to keep oil demand growth above consensus expectations, with our 2018 year on year forecast at 1.85 million barrels per day (mb/d)," Goldman said in a note dated Thursday.
Oil stocks face crucial earnings test as investors venture back in
Formerly skeptical investors are buying back into oil majors in the hope that upcoming results will mark a turning point for energy stocks which have failed to keep pace with a surge in crude prices.
Oil stocks could begin to close that gap if results live up to lofty expectations, with Goldman Sachs predicting the strongest free cash flow figures in a decade for the sector.
Oil is the best-performing global asset this year, with Brent crude up 11.4 percent since January, but energy stocks have continued to lag the commodity. While Europe’s oil and gas sector is the best-performing year-to-date, it still has a way to go to catch up with crude.
Fate almost sealed for ABG Shipyard, Alok Industries, Lanco Infratech
They were once seen as among India’s most promising growth stories. Now, however, the fate of ABG Shipyard, Alok Industries and Lanco Infratech is seen as near-certain but in the opposite direction.
With huge debt, few takers for their assets and the whopping write-offs (‘haircuts’) that banks are likely to take on the loans given to these companies, industry experts believe liquidation of the trio are among the few options. All three have defaulted on their huge payment obligations. READ MORE
COMMENT Kotak Securities on MPC minutes

We see 1HFY19 inflation in the range of 4.4-5.2% (RBI: 4.7-5.1%) and 4.1-4.8% in 2HFY19 (RBI: 4.4%), averaging around 4.5% for FY2019. Adjusting for the statistical impact of center’s 7CPC HRA, the average inflation is likely to be around 4.2%, ranging 3.9-4.7% in 1HFY19 (RBI: 4.4-4.7%) and 4-4.6% in 2HFY19 (RBI: 4.4%). CPI inflation outturn amid various uncertainties will be crucial in assessing the RBI’s next move. While we continue to expect the MPC to maintain a status quo in FY2019, the probability of rate hike has increased after the minutes suggested that more members are inclined towards withdrawal of accommodation
COMMENT Morgan Stanley on MPM minutes

The release of the minutes revive the risk of an earlier-than-expected rate hike. Despite Dr. Acharya's signal of a change in his vote at the next meeting, we think that this might not be enough to tilt the MPC into a rate hike just yet (given most members' wait-and-watch approach). Hence, unless GDP growth and high-frequency indicators surprise strongly on the upside and hint at a stronger - than - expected recovery between now and the next MPC meeting, we think that
our base-case view of a rate hike in 4Q remains largely intact.
Market Check

S&P BSE Sensex 34,353.96 -0.21%
Nifty 50 10,535.55 -0.28%
S&P BSE 200 4,632.22 -0.40%
Nifty 500 9,322.50 -0.36%
S&P BSE Mid-Cap 16,743.74 -0.77%
S&P BSE Small-Cap 18,130.80 -0.24%

India bond yields spike, rupee falls after RBI meeting minutes
Indian bond yields spiked while the rupee dropped to its lowest in more than a year on Friday after the minutes of the monetary policy panel meeting suggested that they were likely to take a more hawkish tone starting as early as June.
The Reserve Bank of India's (RBI) MPC members flagged several concerns, including an increase in minimum support prices for farmers and high and volatile crude oil prices, the minutes released post market hours on Thursday showed. READ MORE
Phillip Capital on Cyient

Cyient reported decent set of results for this quarter – solid revenue growth, better than expected margins and improvement in DLM financials. Europe & Middle East market segments reported strong growth of 7.5% qoq for the fifth consecutive quarter, while Communications reported stellar growth of 11%. TCV win, however, disappointed with decline of -20% yoy.

The growth guidance for next year remains upbeat (double digit), along with DLM to remain strong. We continue to maintain our positive view on Cyient, as we continue to like the ERD space. Maintain BUY.
Kotak Securities on Dilip Buildcon

We revise our estimates upwards to factor in better than expected order inflows for FY18 and expected improvement in order inflows in FY19/20 also. We now expect revenues/PAT to grow at a CAGR of 34%/37% respectively between FY17-20. We arrive at a revised price target of Rs 1400 on FY20 estimates (Rs 1217 earlier) and continue to maintain BUY recommendation on the stock.
Kotak Securities on Cyient

Growth in FY19 is expected to be broad based across a more diverse set of clients within each industry segment. Our earnings estimate stand at Rs.45.4 and Rs.52.1 for FY19E and FY20E respectively. With business momentum back on track we expect a CAGR of 12% in USD revenue and 17% in earnings over FY18-20.  We believe Cyient’s performance in FY19 will be better than that its peers, and execution of its strategy of design plus manufacturing should be reflected in financials from FY19E onwards We value stock at 14x(same as earlier) on FY20E earnings. Upgrade to BUY with a price target of Rs.729 (Rs.689 earlier)
Elara Capital on IndusInd Bank

High credit growth, stable low-cost deposit franchise, likely uptick in margin on the back of Bharat Financial Inclusion (BFIL) profitability and lesser credit cost would lead to expansion in return ratios. We raise our earnings estimates considering uptick in profitability and upgrade the stock rating to Buy (from Accumulate) with a revised target price of INR 2,339 at 4.3x P/ABV FY20E (from 1,944 at 3.7x FY20E)
Is RBI leaning towards an interest rate hike? Minutes of meeting suggest so

The most hawkish member of India’s monetary policy panel is likely to get support from an influential colleague, signaling an interest rate increase is more probable than a cut.
At the April 4-5 policy meeting, Deputy Governor Viral Acharya said there was a revival in investment activity and an improvement in capacity utilization, which boded well for the economy. As a result, he was switching from a neutral stance to shift “decisively to vote for a beginning of ‘withdrawal of accommodation’ in the next monetary policy meeting in June.” READ MORE

TCS Q4FY18 results review: What leading brokerages say

Tata Consultancy Services (TCS) hit its 52-week high of Rs 3,304 on Friday at the NSE, after the company announced an impressive numbers for the March 2018 quarter (Q4FY18). The Mumbai-headquartered company posted double-digit revenue growth in dollar terms in Q4 for the first time in the last 12 quarters. READ MORE
Fortis gets unsolicited offer from KKR-backed Radiant Life Care

The takeover battle for India's Fortis Healthcare Ltd intensified after KKR-backed Radiant Life Care Private Ltd entered the fray on Thursday with an offer to buy more than a quarter of the cash-strapped company's hospital business.
In its non-binding offer, Radiant has proposed to make an investment and/or re-structure Fortis Healthcare, Fortis said in a statement. READ MORE

Mapping insolvency: UltraTech open to raising Binani Cement offer

UltraTech Cement has indicated it would increase its offer yet again for acquiring bankrupt Binani Cement if the Dalmia Bharat-led consortium matched its last offer. UltraTech Cement recently upped its offer to Rs 79.6 billion after a second round of revision, outbidding Dalmia Bharat’s offer by Rs 11 billion. READ MORE

SPECIAL REPORT Capex cycle revival, Modi re-election key for rally: CLSA's Chris Wood

The ‘Indian story’ will be badly damaged if the formidable Narendra Modi government was not re-elected for another term, writes Christopher Wood, managing director, equity strategist at CLSA in his weekly note, GREED & fear.
A key trigger for the markets, according to him, is kick-starting the investment cycle, which Wood feels will be more likely if the non-performing loan (NPL) overhang in the banking system is resolved. The key question here, however, will be whether the deadlines will be enforced since the whole point of the deadline is to force decision-making and faster resolution READ MORE

CLSA Managing Director & Equity Strategist Christopher Wood

Market Check

S&P BSE Sensex 34,367.52 -0.17%
Nifty 50 10,545.30 -0.19%
S&P BSE 200 4,640.73 -0.22%
Nifty 500 9,332.55 -0.25%
S&P BSE Mid-Cap 16,799.48 -0.44%
S&P BSE Small-Cap 18,152.37 -0.12%

COMMODITY WATCH: GOLD (Image Source: Nirmal Bang report)

COMMENT Aditi Nayar, Principal Economist, ICRA

The minutes of the MPC's meeting have a distinctly hawkish tinge as compared to our reading of the statement itself. While incoming data and policy decisions related to factors such as MSPs, excise on fuels and expenditure announcements remain critical, today's minutes suggest that a back-ended rate hike in 2018 remains a possibility, if headline inflation exceeds the trajectory set out by the MPC. As a result, bond yields are likely to harden in the immediate term
Phillip Capital on MPC minutes

We expect the Reserve Bank of India (RBI) to stay on hold in FY19. A few of the risk factors highlighted in the minutes have started to materialize – like surge in oil prices, global trade wars, and possibility of three fed rate hike – again building pressure on the bond yields. Hawkish policy minutes will lead to hardening of bond yields – wiping out the correction seen post Rs 500bn cut in the central government borrowing. Likely near/medium-term range of 7.3%-7.8%

Volatility in Indian fixed income space (especially bonds) has come off from the highs. However, the price action in response to the recent policy measures and a dovish RBI policy has been discouraging and begs the question if enough has been done and/or if the measures came too late. Local PSU banks continue to be sellers and now, offshore investors have been selling bonds on the back of negative INR total returns

We believe FX risk reversals and swaps currently do not currently price in adequate risk premia for a potential deterioration in the domestic macro backdrop and political landscape. FX risk premia is likely to reprice higher if USD/INR breaches 2017 highs of 65.90. Unlike the past, RBI is also unlikely to intervene much as long as the deterioration in BoP comes from current account.

(Source: BofAML)

Indian banks' FY18 results likely to be weak, says S&P Global Ratings

Indian banks' results for the fiscal year ended March 2018 are likely to be weak, S&P Global Ratings said on Thursday. The central bank's recently announced change to the recognition of restructured loans will probably foster early recognition and higher provisions across the banking sector. READ MORE
Former NSE bosses Ramkrishna, Narain face Sebi questions over colocation

The Securities and Exchange Board of India (Sebi) questioned the National Stock Exchange’s (NSE’s) former chief executive officer Chitra Ramkrishna and vice-chairman Ravi Narain in connection with the colocation (colo) controversy.
According to sources, both were summoned last week as part of a probe in the colo matter. The two were asked to clarify on certain issues and their statement was recorded in a detailed manner, said a source, adding the regulator wants to conclude the investigation by end of this month. READ MORE

TCS hits 52-week high post strong Q4 results

Sectoral Trend

Top Sensex gainers and losers

Markets open

At 9:16 am, the S&P BSE Sensex was trading at 34,444, up 16 points while the broader Nifty50 index was ruling at 10,559, down 5 points
Markets at Pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 34,439.93 +12.64 +0.04
S&P BSE SENSEX 50 11,062.81 +2.41 +0.02
S&P BSE SENSEX Next 50 34,599.31 +3.42 +0.01
S&P BSE 100 10,986.83 +2.19 +0.02
S&P BSE Bharat 22 Index 3,610.63 +4.04 +0.11

Derivatives strategy on SAIL April Futures by HDFC Securities

Buy SAIL April 80 CALL at Rs 2
Stop loss: Rs 1
Target: Rs 3.50
Rationale: Short covering is seen in the SAIL Futures today where we have seen 3% reduction in open interest with price rise of 4.5%. Stock Price has given breakout on the daily chart today where it closes above the resistance level of 80 odd levels with rise in Volumes. The stock price is trading above its short term and long term moving averages, indicating bullish trend for the short to medium term. Momentum Indicators and Oscillators are Indicating strength in the stock. Metal as a sector is doing well and looking good for the short term.

Today's picks: From Tata Steel to Ultratech, hot stocks to watch on Friday

Tata Steel
Current price: Rs 622
Target price: Rs 632
Keep a stop at Rs 616 and go long. Add to the position between Rs 629 and Rs 631. Book profits at Rs 632. READ MORE

Commodity outlook and top trading ideas by Tradebulls for today

Gold once again has come to test the resistance of $1355-1360. Although the fear that gripped investment markets last week has abided, gold continues to benefit from lingering fears. It is trading at the top of its 3-month range. The interim outlook still remains favourable and we can see gold touching the highs of 31800 within coming days. Silver after being in hibernation finally has broken out. The fundamentals were bullish but technically, silver was looking weak but now with yesterday’s spectacular move, silver is looking positive. At present, silver is being considered as industrial metals and because of big upmove in base metals, we are seeing follow up in silver prices too. Technically Silver has given trend reversal with closing above its 200 days moving average. The short squeeze is being witnessed in silver as speculators were record short in the commodity. READ MORE
Top trading ideas from Prabhudas Lilladher: Buy Rain Ind, Sun TV, Nat Alum

CMP: Rs 351
TARGET: Rs 380 - 390

The stock has been in a consolidation phase for quite some time but has been showing a positive bias with the RSI on the rise and anticipating a further rise in the coming days. With consistent volume activity seen, we recommend a buy in this stock for an upside target of 380 - 390 keeping a stop loss of 325. READ MORE

After 12 quarters, TCS sees double-digit growth in dollar revenue in Q4

Tata Consultancy Services (TCS), the country’s largest information technology (IT) services provider, on Thursday announced a strong set of numbers in the March quarter (Q4) as well as for 2017-18, backed by all-round growth in key verticals and geographies, and digital services and solutions.

The company’s net profit and revenue in the quarter beat Street estimates, while margin growth was slightly below the industry’s expectations, owing to cross-currency volatility. In the March quarter, the company’s net profit stood at Rs 69 billion, a 4.7 per cent year-on-year growth rate and 5.71 per cent sequential growth. TCS’s revenues at Rs 320.75 billion grew 8.2 per cent y-o-y and 3.8 per cent quarter-on-quarter, backed by 2 per cent growth in volumes (billed man-hours in the quarter). READ MORE
Photo: Kamlesh Pednekar

Markets on Thursday

S&P BSE Sensex 34,427.29 0.28%
Nifty 50 10,565.30 0.37%
S&P BSE 200 4,650.85 0.44%
Nifty 500 9,356.40 0.48%
S&P BSE Mid-Cap 16,873.55 0.63%
S&P BSE Small-Cap 18,174.44 0.60%

SGX Nifty

The SGX Nifty was at 10,535, down 0.50 per cent from the previous close.
Asian Markets

Asian shares slipped on Friday as a warning on smartphone demand from the world's largest contract chipmaker slugged the tech sector, while lofty oil prices stirred inflation fears and undermined sovereign bonds.
Stocks in South Korea took an early 0.4 per cent dip with the tech sector losing 1.6 per cent. Japan's Nikkei fell 0.5 per cent with tech down 0.9 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.4 per cent, again led by a 0.7 per cent drop in technology.
Wall Street

Wall Street's three major indexes closed lower on Thursday, with tobacco stocks leading a tumble in consumer staples while concerns about smartphone demand hurt the technology sector and rising bond yields and earnings helped financials rebound.
The Dow Jones Industrial Average fell 83.18 points (0.34 per cent), to 24,664.89, the S&P 500 lost 15.51 points (0.57 per cent), to 2,693.13 and the Nasdaq Composite dropped 57.18 points (0.78 per cent), to 7,238.06.
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