Benchmark indices edged down on Wednesday, paring gains of nearly 5% this month, as investors booked profits amid weakened global sentiment.
The S&P BSE Sensex ended at 34,501, down 115 points while the broader Nifty50 index settled at 10,571, down 44 points.
Bharti Airtel rose 3%, after the company’s fourth quarter results beat expectations of a loss and as it approved a merger of its mobile masts unit with Indus Towers.
Among sectoral indices, the Nifty Metal index slipped over 1.5% led by a fall in shares of Welspun Corp and Hindalco Industries.
World shares were on their longest losing streak of the year on Wednesday, as a rise in US bond yields above 3 percent and warnings from top global firms about rising costs fed fears a boom in earnings may have peaked.
Falls in Asia’s and then Europe’s main bourses pushed the 47-country MSCI world share index down for a fifth day running to its lowest level in over two weeks.
Market rundown by Anand James, chief market strategist at Geojit Financial Services
"Global volatility led by high bond yields in the US attracted some profit booking in the domestic markets, a day prior to the F&O expiry. Rupee hitting a 14 month low against the backdrop of persistent selling by the FIIs and the rollover numbers languishing at an eight month low figure added to the weakness in the domestic indices. But, healthier Q4 earnings numbers, continuing buying interest seen in the IT sector and marginal easing in oil prices guarded the key support levels in the benchmark indices."
BSE Sensex: Airtel, TCS among top gainers of the day, Tata Steel top loser
Market at close
The S&P BSE Sensex ended at 34,501, down 115 points while the broader Nifty50 index settled at 10,571, down 44 points.
Gold falls on strong dollar, higher US yields
Gold prices dropped on Wednesday as benchmark U.S. bond yields poked above the 3 percent level and lifted the dollar to its highest in more than three months. Spot gold was down half-a-percent at $1,323.59 per ounce READ MORE
Shares of Ashok Leyland, Mahindra & Mahindra, Larsen & Toubro (L&T) Infotech, MindTree, Mphasis, Raymond and Syngene International were among 18 stock from the S&P BSE 500 index hitting record highs in otherwise weak market.
Chambal Fertilizers & Chemicals, Cyient, Indiabulls Ventures, Jamna Auto Industries, Lakshmi Machine Works, Sonata Software, SRF, Take Solutions, Tata Elxsi and Zensar Technologies too hit new highs today.
Stock that rallied over 200% in 12 days
Zenith Exports is locked in upper circuit for the twelfth straight trading day, rising 5% at Rs 120, also its 52-week high on the BSE. The stock zoomed 208% from Rs 39 on April 9, 2018, as compared to 2.3% rise in the S&P BSE Sensex. READ MORE
SBI Life Insurance, HDFC Standard Life Insurance hit new highs
Shares of life insurance companies were trading higher in otherwise subdued market with SBI Life Insurance Company and HDFC Standard Life Insurance Company hitting their respective new highs on the BSE on Wednesday.
ICICI Prudential Life Insurance Company (IPRU) has surged 11% to Rs 460, extending its Tuesday’s 7% gain after the company reported better than expected results for the financial year 2017-18 (FY18). READ MORE
More steam left in Dalmia Bharat, analysts expect earnings to grow by 50%
One would tend to imagine that after having returned almost 42 per cent in the past one year, much higher than the -4 to 5 per cent returns seen in top cement stocks such as UltraTech Cement, Ambuja Cements and Shree Cement, investor comfort in Dalmia Bharat may not be very high.
However, if analysts are to be believed, the days ahead are equally good for Dalmia Bharat, one of India’s oldest cement companies.READ MORE
Why most-valued TCS is number eight in free float market capitalisation
Tata Consultancy Services (TCS) is India’s most valuable company by some distance. But, when it comes to the stock markets, the Tata group firm’s significance slips several notches. On free-float market capitalisation—used by major index providers to compute weights — TCS is ranked eighth in the country. This is on account of high shareholding of promoter Tata Sons at nearly 72 per cent in the technology major. TCS’ promoter holding is one of the highest among top companies in the country and only slightly below the maximum threshold of 75 per cent. READ MORE
NBCC turns ex-stock split in the ratio of 1 for 1; shares up 6%
Shares of NBCC (India) was up 6% to Rs 109 on the BSE in early morning trade after the stock turned ex-stock split in the ratio of 1:1.
NBCC (India), the state-owned construction & engineering company had announced on February 13, 2017 splitting its stock from the face value of Rs 2 each to Re 1 each to enhance liquidity in trading.
The Company has fixed Thursday, April 26, 2018 as record date for determining the shareholders entitled for sub-division of equity shares of Rs 2 each into two equity shares of face value of Rs 1 each. READ MORE
Air India disinvestment: Around 150 parties seek info on carrier's sale
Around 150 players have shown interest in the Air India privatisation process, made queries and sought clarifications on the terms of the flagship carrier’s sale. These include both foreign and Indian airlines, as well as a number of domestic and external non-aviation entities, Business Standard has learnt.
“The stakeholder consultation has got a good response. Almost 150 entities have sent their queries,” a senior government official said. He said that the queries are mostly about the treatment of debt, employee future and management of the airline. Transaction advisor EY is responding to the queries and will seek clarification from the government regarding any changes in terms of sale. READ MORE
RIL's high borrowing costs a sign of India Inc's troubles going ahead
At a time when the policy repo rate is at 6 per cent and three-month government treasury bills are trading at 6.15 per cent, India’s biggest company, Reliance Industries, raised Rs 15 billion of three-month money on Monday at 7.1 per cent.
About the same time last year, Reliance was raising money for two to three months at 6.13-6.15 per cent, much closer to the prevailing treasury bill rate. On Tuesday, Godrej Industries raised money through three-month commercial paper at 7.12 per cent. READ MORE
Telecom shares in focus
Shares of telecom services provider were trading higher by up to 5% on the BSE in early morning trade after the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) imposed an interim stay on the Telecom Regulatory Authority of India’s (Trai’s) predatory pricing order.
Bharti Airtel (up 5% at Rs 425), Reliance Communications (4% at Rs 18.65) and Idea Cellular (2% at Rs 72.75) have rallied up to 5% on the BSE in intra-day trade. READ MORE
Infosys' three-year road map gets a thumbs-up from analysts
Even as the January – March 2018 (Q4FY18) results failed to enthuse investors, most analysts have given a thumbs-up to the three-year road-map laid out by Infosys to accelerate growth in the digital segment.
Infosys, which detailed its strategy to analysts in post market hours on Monday, also reiterated its capital allocation policy of returning up to 70 per cent of free cash flow (FCF) with periodic review of return cash balances. READ MORE
DCM Shriram plunges 13% on weak March quarter results
Shares of DCM Shriram have plunged 13% to Rs 380 per share on the BSE after the company reported 68% year-on-year (YoY) drop in net profit at Rs 510 million in March quarter (Q4FY18), due to poor performance of its sugar business. It had posted profit of Rs 1,560 million in year ago quarter.
Operations revenue was down 3% at Rs 15.66 billion against Rs 16.16 billion in the corresponding quarter of previous fiscal. READ MORE
ICICI PruLife's margins were a beat from our expectations at 16.5% for FY18 mainly on change in product mix and better operating efficiency. The company has shown strong improvement in operating performance (margins/persistency/cost) and increase in protection mix has led to change our stance to "BUY" from Accumulate and increased the target price to Rs520 (up from Rs 464), valuing it at Rs 746 billion (up from Rs 666 billion) which translates to 3.0x FY20E EV
Morgan Stanley's global positioning
For the first time since we launched our new country allocation model in Oct-15, we upgrade South Africa to overweight (OW). Cheap valuations along with our economists' strong aboveconsensus growth outlook drive our view. We also trim our OW positions in China and Brazil and underweight (UW) positions in Australia and Korea.
Rollover Report for Tuesday
· The Nifty Apr expiry rollover is at 27.73% on Monday compared to 40.59% on same day of previous expiry.
· The Banknifty Apr expiry rollover is at 30.79% on Monday compared to 24.23% on same day of previous expiry.
· The Market wide Apr expiry rollover is at 37.32% on Monday as compared to 38.64% on same day of previous expiry.
· The Nifty Apr rollover is lower than its Three months average of 34% and its six months average of 34.58%.
· The Banknifty Apr rollover is higher than its Three months average of 26.94% and its six months average of 26.57%.
· The market wide rollover is higher than with its three months average of 36.06% and six months average of 36.63%.
(Source: Nirmal Bang report)
Will Wipro's Q4FY18 result surprise investors?
Wipro is likely to announce its fourth quarter results today. Among the key things to look out for, according to analysts, include revenue growth guidance, commentary on healthcare and communications verticals, execution of various new initiatives by new CEO and outlook on spending at key clients and geographies.
In the previous quarter, Wipro posted 11.85% quarter-on-quarter fall in consolidated net profit at Rs 19.30 billion.
Click here to know what leading brokerages expect from the company in the March 2018 quarter.
Even as TCS enters elite $100 billion m-cap club; analysts say buy Infosys
Tata Consultancy Services Ltd. maybe basking in the afterglow of joining the $100-billion club, but it is the company’s rival Infosys Ltd. that is a preferred buy for analysts.
Of the 44 analysts covering both companies, 38 have a buy or equivalent rating on Infosys, India’s original poster child for software development. This compares with 19 buys for TCS, Asia’s largest software exporter, according to data compiled by Bloomberg. READ MORE
NSE launches e-Gsec platform for investment in govt securities
The National Stock Exchange (NSE) on Tuesday announced the launch of its e-Gsec platform which will allow retail investors to invest in government securities and hold them in existing demat accounts. READ MORE
Nalco rides on London Metal Exchange gains, sees room for more price hikes
India’s primary aluminium producers, particularly National Aluminium Company (Nalco), gained on account of a rally in global aluminium prices over the past week before a correction on Tuesday. Aluminium prices on the London Metal Exchange (LME) peaked at $2,452 per tonne for the cash buyer (as of April 23). READ MORE
· Ashoka Buildcon executes concession pact for Karnataka road project
· Strides to divest holding in remaining API assets to Solara for Rs 131 crore
· DCM Shriram Board approves expansion of PVC capacity for Rs 32 crore
· GATI board meeting on April 26 to consider new financial/strategic partner
· Indian Metals & Ferro Alloys says operations at Therubali plant suspended due to protests
· Gokaldas Exports board approved opening of QIP issue at floor price of Rs 90.94 per share
· Radiant Life revises offer for Fortis Healthcare
· Zensar Board approves stock split of equity shares in the ratio 5:1
· Raymond board approves Rs 300 crore development plan for 20 acres land at Thane
· HIL Ltd starts commercial production at Gujarat plant
· Autoline Industries in pact with Tae Sung, Korea
· MPS to acquire Tata Interactive Systems
· Hero MotoCorp hikes two-wheeler prices by up to Rs 625 to offset rising input cost
(Source: IIFL report)
ICICI Prudential Life rallies 13% in two days post FY18 results
Shares of ICICI Prudential Life Insurance (IPRU) were up 5% to Rs 438 per share in early morning trade, surging 13% in past two trading sessions on the BSE, after the company reported better than expected results for the financial year 2017-18 (FY18). The insurance company reported 93.1% increase in the Value of New Business (VNB) at Rs 12.86 billion in FY18 as compared to Rs 6.66 billion for FY17. READ MORE
Cipla poised to maintain high growth, earnings may grow by over 20%
Cipla, which has clocked better returns than most of its larger pharma peers in the past one year, has now outperformed the S&P BSE Sensex in the past one month. It has gained almost 11.5 per cent since the March-end lows, though its Pithampura unit got three observations from the Food and Drug Administration (FDA), the US drug regulator. The Street is showing confidence in Cipla primarily because of its strong growth prospects. After pegging earnings growth at over 30 per cent in 2017-18 (partly helped by a low base of 2016-17), analysts expect Cipla’s earnings to increase by over 20 per cent each in 2018-19 and 2019-20. READ MORE
Top Sensex gainers and losers
Markets at open
At 9:16 am, the S&P BSE Sensex was trading at 34,542, down 74 points while the Nifty50 index was ruling at 10,599, down 15 points
Company Update: Va Tech Wabag Ltd – BUY - Target: Rs.672
VA Tech Wabag (VAW) has recently announced some order wins. With the APGENCO plant achieving COD, we believe receivables from this project should get cleared out in FY19, a key positive which will alleviate investor concerns.
The Wabag stock has corrected in recent months on: 1) weak order intake in FY18 and credible risk of missing on the order intake guidance 2) Decline in order book 3) Higher working capital engagement especially in case of APGENCO orders. However, valuations are reasonable at 13.4x FY20E earnings and at a discount to sector peers. We recommend BUY with target price of Rs 672.
(Source: Kotak Securities)
COMMENT Bharti Infratel and Indus Towers deal
Bharti Infratel has announced merger of Indus Towers with Bharti Infratel. This merger will create the world’s largest telecom tower company with about 163,000 towers. Bharti Infratel will issue 1,565 shares for every 1 share of Indus Towers. Post-merger, Airtel and Vodafone would have 33% stake each, private equity funds KKR and CPPIB 6% and the public 28%. In our view this merger would give better pricing power and also reduce costs of overheads. Considering this possible development, we suggest a BUY on the stock
(Source: Equinomics Research)
Sharekhan on Kewal Kiran Clothing (KKCL)
Investors with a long-term view and looking for a lean balance sheet company can stay invested in KKCL. Revenue of KKCL declined and higher operating expenses led to dent in margins and profitability in Q4FY2018. We reduce our earnings estimates substantially for FY2019/FY2020 and maintain our Hold rating with a revised price target of Rs. 1,770
Persistent Systems - Strong cash generation in FY18, currency tailwinds for FY19; Buy.
With $117m revenue, down 4.6% q/q, up 7.3% y/y (organic growth: 4.1% y/y), weakness driven by the top client (down 12% y/y), Persistent’s Q4 performance was below par. The positives were margin management (with EBITDA down just $4m on revenue declining $5.6m through use of variable costs/incentives), and a 76% FCF-to-EBITDA ratio. In FY19, part of the revenue shortfall is likely to be reversed and margins may be supported by currency/tax breaks. We think Persistent is at a the stage where Mindtree was a year ago and can stage a strong recovery in FY19. We raise our target slightly to Rs 960 (18x FY20 EPS)
(Source: Anand Rathi Research)
Nomura on Bharti Airtel (Image source: Nomura report)
Oil falls away from late-2014 highs as rising US supplies cloud bull-run
Oil prices on Wednesday fell back from more than three-year highs reached the previous session as rising US fuel inventories and production weighed on an otherwise bullish market.
Brent crude oil futures were at $73.74 per barrel, down 12 cents from their last close and over $1.7 below the November-2014 high of $75.47 a barrel reached the previous day. US West Texas Intermediate (WTI) futures were down 7 cents at $67.63 per barrel. That was also off the late-2014 highs of $69.56 a barrel marked earlier in April.
Lowest quarterly profit for Bharti Airtel in 15 years: Q4 net plunges 78%
Telecommunications sector leader, Bharti Airtel, has reported a 78 per cent drop in net profit to Rs 830 million, for the quarter ended March 31, as an intense price war roils the industry. A cut in international termination rates further impacted the revenues of the company.
This is the lowest quarterly profit for the Sunil Bharti Mittal-led company in nearly 15 years. But, it was still better than analysts’ estimates that suggested a net loss for the company. Airtel’s net profit was Rs 3.73 billion in the same quarter last financial year. READ MORE
Nifty Outlook and top trading ideas by HDFC Securities
CMP: Rs 982
Stop Loss: Rs 950
Target: Rs 1,050
Stock price has registered new all-time high at 1015 and has given a close at 982. Stock has surpassed the crucial resistance of 940 odd levels, which acted as a hurdle earlier in the current year. Stock price has also broken out from rounding bottom formation on the monthly charts. Oscillators like MACD, RSI and DMI have been showing strength in the existing bullish strength. We recommend buying Mphasis for the upside target of 1050, keeping SL at 950. READ MORE
Today's picks: From L&T to HDFC, hot stocks to watch on Wednesday
Larsen & Toubro
Current price: Rs 1,378
Target price: Rs 1,400
Keep a stop at Rs 1,365 and go long. Add to the position between Rs 1,390 and Rs 1,395. Book profits at Rs 1,400. READ MORE
Nifty outlook and top trading ideas from Prabhudas Lilladher for today
The trend continues to be stable with Nifty having its resistance at 10,631, a decisive move past this & a close above 10,630 indicates a further up move to the projected target of 10,700-10,800. The support for the day is seen at 10,570 while resistance is seen at 10,670. READ MORE
The SGX Nifty was at 10,568.50, down 0.49 per cent from the previous close.
Asian shares were under pressure on Wednesday, with a rise in US bond yields above the 3 per cent threshold and warnings from bellwether US companies of higher costs driving fears that corporate earnings growth may peak soon.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 per cent while Japan's Nikkei dropped 0.6 per cent.
Wall Street dropped sharply on Tuesday as warnings by bellwether companies of higher costs reverberated as the benchmark US 10-year Treasury yield pierced the 3 per cent level for the first time in four years.
The Dow Jones Industrial Average fell 424.56 points (1.74 per cent) to 24,024.13, the S&P 500 lost 35.73 points (1.34 per cent) to 2,634.56 and the Nasdaq Composite dropped 121.25 points (1.7 per cent) to 7,007.35.
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