MARKETS ON TUESDAY: Nifty ends above 10,600; metal stocks fall; RIL up 4%

Benchmark indices edged up on Tuesday, with financials and pharma stocks boosting sentiment. That apart, Reliance Industries (RIL) gained nearly 4% in trade to end at Rs 970 levels.

However, gains  were capped by a fall in metal stocks that slipped on the back of a fall in aluminium prices on the London Metal Exchange (LME).

The S&P BSE Sensex ended at 34,617, up 166 points while the broader Nifty50 index settled at 10,614, up 30 points.

Aluminium prices continued to fall after Washington gave US customers of Russian producer United Company Rusal more time to close out their business with the company and comply with sanctions. The sanctions on Rusal had driven prices of the metal to their highest since mid-2011 recently on fears that the global market could face shortages.

Hindalco plunged as much as 9.3%, its biggest intraday percentage loss since early November 2016. Vedanta fell as much as 5.5% in intraday to end 2.4% lower, while National Aluminium was down 7%.


In the global markets, Asian stocks steadied after hitting two-week lows on Tuesday as investors paused for breathe following a heavy sell-off in recent sessions and waited to see if the dollar's rally was sustainable.

MSCI's broadest index of Asia-Pacific shares outside Japan tacked on 0.1% following two straight days of declines that took it to its lowest since April 9. Japan's Nikkei added 0.9% as a lower yen supported export-heavy firms. Chinese shares climbed 1.9%, while Hong Kong's Hang Seng index rose 1%.

(with inputs from Reuters)

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Market rundown Vinod Nair, head of research at Geojit Financial Services:
"Market extended gains backed by index heavyweights while correction in metals & IT were due to ease in sanctions by US and tightening of H1-B visa procedure capped the gains. Investors are likely to be cautious amid surging oil prices but any green shoots from corporate results & stability in yield will determine the market direction."
Nifty IT index falls 1.99%. Top losers:

WIPRO 286.95 297.35 -10.40 -3.50
INFOSYS 1154.50 1187.70 -33.20 -2.80
TECH MAHINDRA 682.70 702.00 -19.30 -2.75
HCL TECHNOLOGIES 1061.95 1088.00 -26.05 -2.39
KPIT TECH. 241.70 245.80 -4.10 -1.67

Nifty Metal index ends 1.92% lower. Top losers:

NATL. ALUMINIUM 78.60 84.85 -6.25 -7.37
HINDALCO INDS. 236.75 255.60 -18.85 -7.37
WELSPUN CORP 144.15 148.75 -4.60 -3.09
HIND.COPPER 74.65 76.65 -2.00 -2.61
VEDANTA 297.40 305.05 -7.65 -2.51

Sectoral Trend

BSE Sensex: Top gainers and losers

Market at close
The S&P BSE Sensex ended at 34,617, up 166 points while the broader Nifty50 index settled at 10,614, up 30 points.
Logistics shares rally; Gati, Patel Integrated soar 20%
Shares logistics companies have rallied by up to 20% on bourses after the Gati said it exploring the possibility of inducting a new financial/strategic partner. Gati (Rs 121) and Patel Integrated Logistics (Rs 72) have locked in upper circuit of 20% on the BSE with no sellers were seen on these counters. READ MORE
Fresh US tariffs haven't hit Asian markets yet: Japan steel industry head

The head of Japan's steel industry federation said on Tuesday that new import tariffs on steel imposed by the United States have not yet hit the Asian steel market, but said the industry is monitoring the situation closely for any future impact.
Japanese steelmakers are trying to seek item exemptions from the US tariffs, Japan Iron and Steel Federation Chairman Kosei Shindo said at a news conference. READ MORE

Nomura on HDFC Bank

With significant dominance in retail lending, improving cost ratios and potentially lower stress in SME space going forward, we expect earnings growth of +20% to sustain over FY18-21F. We maintain our Buy rating with target price of Rs 2,350/share (which implies 3.7x FY20F book and 22x FY20F EPS)
Emkay Global on Delta Corp

The positive catalyst for the stock would be the announcement of new gaming policy by Goa government (expected in 2Q). Indian Gaming industry would expand multifold. The current PER of 30x FY20E does not factor in the benefits from new policy and/or Daman license. We maintain our BUY call with target price of Rs 294 based on 30x PER
Edelweiss on Crisil

Though credit growth is perking up and bond market developments are positive, slowdown in SME is hurting the ratings segment. Moreover, research segment is yet to see broad-based uptick. Hence, we maintain ‘HOLD’ with target price of Rs 1,825.
Goldman Sachs on FMCG sector

Britannia Industries (Buy) - India’s market leader in biscuits focused on premiumization by launching affordable individual packets for the rural population.
Marico (Sell) - Marico’s Saffola (edible oil) faces intense competitive pressure from products like rice bran oil while its Value Added Hair Oil operates in an over-crowded market.

(Source: Research report)
STOCK ALERT ADAG stocks under pressure; Reliance Naval, RCom down over 15%

Shares of Anil Dhirubhai Ambani Group (ADAG) companies were under pressure with Reliance Naval and Engineering and Reliance Communications (RCom) plunged by more than 15% in intra-day trade on Tuesday in otherwise firm market. Reliance Power, Reliance Infrastructure and Reliance Capital were down 2% to 5% on the BSE READ MORE
RBI's rate decision influenced more by core rather than headline inflation
Investors wrong-footed by the hawkish Indian central bank minutes might rather want to train their sights on underlying trends in inflation than the volatile headline number, analysts say.
The Reserve Bank of India, which Bloomberg economists Tom Orlik and Justin Jimenez rate among the top 3 central banks that surprise the most, has a mandate to keep headline inflation around 4 per cent in the medium term. But commentary from members of RBI’s rate-setting panel show they are more focused on core inflation -- the gauge that strips out volatile food and fuel components. READ MORE

Abu Dhabi's NMC Health gains 1,650% in six years, stock hits record high

It has risen a whopping 1,650 per cent since it started trading six years ago, more than any other company based in the Arab world. Abu Dhabi-based NMC Health Plc closed at a record on Friday in London, boosting its market value to $10.8 billion. That’s about $200 million less than Emaar Properties PJSC, the developer of the world’s tallest tower in Dubai. READ MORE

Time for versatile 'Shohei Ohtani' trades, says Morgan Stanley

Investors who want to have all their bases covered had better seek out some assets that perform like Shohei Ohtani, advises Morgan Stanley chief cross-asset strategist Andrew Sheets.
Ohtani, a 23-year-old prodigy from Japan, is an ace pitcher for the Los Angeles Angels who’s also proving his worth as a slugger. His two-way play has evoked comparisons to Yankees great Babe Ruth, among others — and this amalgamation of offensive and defensive prowess is exactly what investors should be seeking to help them weather volatile markets, Sheets said in an April 22 note. READ MORE

Market Check

S&P BSE Sensex 34,609.57 0.46%
Nifty 50 10,611.60 0.25%
S&P BSE 200 4,665.38 0.22%
Nifty 500 9,390.25 0.18%
S&P BSE Mid-Cap 16,894.31 0.08%
S&P BSE Small-Cap 18,287.08 0.07%

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

News Watch Petrol prices at all time high; high diesel prices hurt garment industry

The President of Garment Manufacturers and Wholesale Association of Telangana, Pavan Bansal, on Monday said that the recent rise in diesel prices was affecting the garment industries all over the country. READ MORE
Equinomics Research on Bal Pharma

Nearly two-decade old BAL Pharma has a market cap of mere Rs.119 crore and its Enterprise Value (EV) stands at Rs.189 crore (market cap Rs.119 crore plus net debt of Rs.70 crore). Its EV is less than its FY2018 Annualized sales of Rs.215 crore. Some small pharma companies trade at more than 2x their sales.

If we assume mere 1.2x sales, the targeted EV would be around Rs.258 crore and the same gives a valuation gap of Rs.69 crore (Rs.258 crore minus Rs.189 crore). The valuation gap per share stands at Rs.48/. Therefore, we arrive at a target price of Rs.132. We hope that this target price is achieved in a span of 1 to 2 years
Prabhudas Lilladher on LIC Housing Finance

LICHF reported mute performance with earnings of Rs5.4bn in-line with estimates on the back of weak NII growth as loan growth was slightly slower and margin pick-up being lower than expected. Core retail disbursement & loan growth was tad better but was muted on LAP, while developer disbursement & loan growth were strong. Asset quality improved sequentially on the back of seasonlly better retail book.

Loan growth were below industry trend and muted spreads will keep NII growth lower than historical trends, however, we do not expect any large asset quality issues leading it to deliver 17-17.5% ROE over FY19-20E. Retain Accumulate with revised price target of Rs649 (down from Rs667) based on 2.0x Mar-20 ABV
INTERVIEW OF THE DAY We expect high single-digit returns from the market this year: Mihir Vora

The March 2018 quarter (Q4FY18) earnings season has begun well with the information technology (IT) companies delivering healthy numbers. MIHIR VORA, director and chief investment officer, Max Life Insurance tells Puneet Wadhwa that for financial year 2018 – 19 (FY19), he expects an earnings growth of 15 – 18 per cent, predicated on a recovery in earnings for corporate banks and commodity prices remaining strong. CLICK HERE FOR THE FULL INTERVIEW

Mihir Vora, max life

Edelweiss Research on Bharat Electronics (BHE)

In our view, post the recent 30% plunge in stock price, Bharat Electronics (BHE) offers a long term investment opportunity notwithstanding growing investor discomfort regards falling margins and new order delays. We are positive as medium to long term growth/competitive profile remains intact. Additionally, our sharp 20% cut in FY19/20E earnings factors in delays in large order intakes/inferior revenue mix.

We maintain ‘BUY/SO’ with a revised target price of Rs 185 (Rs 230 earlier) given reasonable 15% EBIDTA growth and strong RoE/RoCE profile (20/27%). We maintain our exit multiple of 23x as well, given BHE’s sustained competitive edge and long-term growth profile
Vehicle loans put Chola Investment in top gear; disbursement surges 55%

The stock price of Cholamandalam Investment and Finance Company (Chola Investment) scaled to its new 52-week high in Monday’s intra-day trades at Rs 1,714.85 (up 9.4 per cent), before closing the day with net gains of over six per cent.
A strong set of numbers for the January-March 2018 quarter (Q4) reported by the company triggered the surge. A robust performance by the company’s vehicle finance business, which accounted for 73 per cent of its total assets under management (AUM; size of the loan book), as of March 2018 and over 85 per cent of total disbursements in Q4, mainly boosted the overall performance. READ MORE

Bharti Infratel hits 52-week low on disappointing Q4 results

Bharti Infratel hit 52-week low of Rs 316, down 3.6% on the BSE in intra-day trade after telecom tower company reported a lower than expected 2% year on year (Y-o-Y) rise in consolidated net profit of Rs 6.06 billion in March quarter (Q4FY18). READ MORE
Hindalco, Nalco slip 9% as US softens stance on aluminium producer Rusal
Shares of National Aluminium Company (Nalco) and Hindalco Industries have fallen more than 9% on the BSE as fall in aluminium prices after the Trump administration has signalled it could ease sanctions against Russian aluminium producer Rusal.
Nalco has tanked 10% to Rs 75.85, while Hindalco Industries plunged 9.5% to Rs 232 on the National Stock Exchange (NSE) on Tuesday. Vedanta and Hindustan Copper were down 3% each on the NSE. READ MORE
Bharti Airtel Q4FY18 result preview: Here's what brokerages expect
Telecom stocks have been under pressure thus far in calendar year 2018 (CY18) with the S&P BSE Telecom index slipping 21 per cent year-to-date (YTD), as compared to a 1.2 per cent rise in S&P BSE Sensex, ACE Equity data shows.
Bharti Airtel, Idea Cellular and Reliance Communications have bene among the top losers among the telecom service providers that have lost 24 per cent to 44 per cent. READ MORE

Kotak Securities on metal stocks

Our fair value of Hindalco (target price : Rs 315) and Vedanta (target price : Rs445) is based on LME aluminum prices of $2,150/ton for FY2019E and US$2,175/ton for FY2020E. A new aluminum project at our LME price assumption will hardly earn RoCE of 2-3%. This has led to limited new capital allocation to aluminum projects (outside China) when global demand is growing at close to 5%.

We expect aluminum fundamentals to improve from the widening deficit outside China and supply reforms in China. In the near term, we expect China inventories to fall in 2QCY18 due to a seasonally strong quarter—we expect 1.2 mn tons of deficit in 2QCY18 and then some surplus in 3Q and 4Q. Chinese aluminum markets are very sensitive to changes in stock levels—falling inventories will likely support SHFE prices
Sector Watch: Oil

The recent sharp rally in crude prices has been driven by (1) a tighter demand-supply balance amid declining production from Venezuela and (2) the cartel’s desire to sustain production cuts despite targeted moderation of OECD inventories. We do see further upside in the near term from possibility of (1) curtailment of Iran crude exports if the US decides to restore sanctions by May 12, (2) further supply shocks from enduring issues in Venezuela and Libya and (3) midstream bottlenecks that may restrain growth in the US/Canada production. Prefer GAIL/ONGC over OMCs

(Source: Kotak Securities)
Market Check

S&P BSE Sensex 34,591.10 0.41%
Nifty 50 10,601.85 0.16%
S&P BSE 200 4,664.59 0.21%
Nifty 500 9,392.00 0.20%
S&P BSE Mid-Cap 16,926.85 0.27%
S&P BSE Small-Cap 18,338.71 0.35%

Volume Toppers

REL. COMM. 19.80 -0.25 -1.25 1894205
NATL. ALUMINIUM 77.80 -7.10 -8.36 1603767
JP ASSOCIATES 20.45 0.15 0.74 1432196
HINDALCO INDS. 235.00 -20.75 -8.11 1221944
RELIANCE NAV.ENG 25.45 -1.55 -5.74 994276
» More on Most Active Volume
Gati to explore inducting new financial,strategic partner; stock surges 16%
Gati has moved higher by 16% to Rs 117 on the BSE on back of heavy volumes after the logistics company said it exploring the possibility of inducting a new financial/strategic partner.
“The board of directors of the company will meet on Thursday, April 26, 2018 to review, consider and pass the enabling resolution for exploring the possibility of inducting a new financial/strategic partner to augment the future growth of the company,” Gati said in a regulatory filing. READ MORE
Sebi's circular naming defaulters draws flak; companies approach FinMin
Market regulator Securities and Exchange Board of India (Sebi) is once again caught on the wrong foot, and this time for one of its recent circulars that made public names of over 2,000 entities, which have defaulted on its dues.
Some of the companies named in the list have raised objections with the finance ministry, stating that the list was erroneous, said sources aware of the development. READ MORE

Sebi. (Photo: Kamlesh Pednekar)

Interview of the Day We expect high single-digit returns from the market this year: Mihir Vora

The March 2018 quarter (Q4FY18) earnings season has begun well with the information technology (IT) companies delivering healthy numbers. MIHIR VORA, director and chief investment officer, Max Life Insurance tells Puneet Wadhwa that for financial year 2018 – 19 (FY19), he expects an earnings growth of 15 – 18 per cent, predicated on a recovery in earnings for corporate banks and commodity prices remaining strong. READ MORE
Mihir Vora, max life

NMDC: Steady steel demand, increasing iron ore volumes key growth drivers
NMDC, the country’s largest iron ore producer, had to cut the price of its produce by Rs 100 a tonne from April 18, due to decline in international prices. The per tonne iron ore price, excluding China, has corrected from over $75 levels in end-February to sub-$65 by start of April on fears that the global tariff wars would impact steel and iron ore demands.
Oil on the boil poses risk to Indian equities, says JPMorgan
Even as Indian equities have shown resilience to crude oil’s more than 10 per cent rally in the last two weeks, any continuation of the surge poses a greater risk to the stocks compared with other assets, JPMorgan said in a note. READ MORE
Minda Corp shares extend gains after stake buy by Ashish Kacholia

Shares of Minda Corporation were up by 1.5% at Rs 204 per share on Tuesday, extending its Monday’s 15% rally on the BSE, after investor Ashish Kacholia bought an over one million shares of auto ancillary company through open market. READ MORE
Market Check

S&P BSE Sensex 34,598.81 0.43%
Nifty 50 10,598.20 0.13%
S&P BSE 200 4,668.32 0.29%
Nifty 500 9,394.20 0.22%
S&P BSE Mid-Cap 16,969.33 0.52%
S&P BSE Small-Cap 18,361.29 0.48%

Alembic Pharma gains 5% on successful USFDA inspection of Panelav facility

Shares of Alembic Pharmaceuticals were up 5% at Rs 527 per share on the BSE in early morning trade after the company informed about the successful United States Food and Drug Administration (US FDA) inspection at its API facility at Panelav with zero 483s. READ MORE
Stocks at 52-week high

ASHOK LEYLAND 160.65 161.30 1.30 0.82
BAJAJ ELECTRICAL 698.80 706.35 15.20 2.22
BHARAT FINANCIAL 1160.80 1172.00 1.40 0.12
CHOLAMAN.INV.&FN 1700.95 1728.45 37.50 2.25
FIRSTSOUR.SOLU. 61.00 61.35 0.40 0.66

Nifty Metal index falls over 2% as aluminium prices correct globally; top losers

NATL. ALUMINIUM 79.00 84.85 -5.85 -6.89 161697
HINDALCO INDS. 239.00 255.60 -16.60 -6.49 175666
VEDANTA 293.00 305.05 -12.05 -3.95 141798
TATA STEEL 594.45 606.60 -12.15 -2.00 12201
S A I L 78.25 79.55 -1.30 -1.63 29753

Sectoral Trend

Top Sensex Gainers and Losers

Markets at open

At 9:18 am, the S&P BSE Sensex was trading at 34,583, up 132 points while the broader Nifty50 index was ruling at 10,604, up 20 points
Stocks In News

Ujjivan Financial Services said its Managing Director and Chief Executive Officer Sudha Suresh has resigned from the company due to personal reasons. 
Bharti Airtel plans network expansion in Gujarat with 6,000 new sites and 2,000 kilometres of optic fiber in FY19 to strengthen mobile broadband footprint

Tech Mahindra has tied up with Andhra Pradesh Govt To Establish Cyber Security Operations Centre In Vijaywada

JSW Steel, Aion found eligible resolution application for Monnet Ispat: Bloomberg

Vedanta Ltd has clocked a record aluminium production of 1.67 million tonnes in FY18, 38% higher year-on-year (y-o-y), helped by a complete ramp-up of its BALCO-II smelter in Chhattisgarh and scaling up of additional pots at its Jharsuguda smelting facility. 

Jet Airways signs codeshare pact with Aeromexico
The board of Quess Corp has approved the scheme of arrangement whereby the human resource business of Thomas Cook along with TCIL’s investment in Quess will be demerged to Quess through an NCLT process. This is subject to regulatory approval .

Music Broadcast to acquire radio business of Ananda Offset on slump sale basis

Geojit Financial to set up asset management company

MOIL will procure its entire silica sand requirement from Hindustan Copper’s Madhya Pradesh unit

Astron Paper enters into MoU with Balaram Papers to take over its Gujarat plant

Shilpi Cables gets 90-day extension for corporate insolvency resolution.

(Source: Nirmal Bang report)
Market at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 34,569.98 +119.21 +0.35
S&P BSE SENSEX 50 11,114.58 +40.92 +0.37
S&P BSE SENSEX Next 50 34,541.75 -19.84 -0.06
S&P BSE 100 11,027.13 +33.12 +0.30
S&P BSE Bharat 22 Index 3,589.52 +17.65 +0.49

(Source: BSE)
Market borrowings by states decline 5.6% to Rs 3.6 trillion in FY18

Market borrowings by the state government fell by 5.6 per cent in 2017-18 to Rs 3.61 trillion compared with Rs 3.82 trillion in FY17 as the cost of borrowing shot up. Maharashtra borrowed the most at Rs 425 billion which was six per cent higher than what it borrowed in FY17. Next to Maharashtra was Uttar Pradesh (Rs 386 billion) and Tamil Nadu (Rs 360 billion). READ MORE

Infosys draws up three-year road map to accelerate growth in digital space

On a day when its closest rival Tata Consultancy Services achieved the distinction of becoming the first Indian IT company to cross $100 billion in market cap, top leaders of Infosys led by newly appointed Chief Executive Officer and Managing Director Salil Parekh were busy convincing investors in Mumbai how they are trying to build a company that has put in place all the building blocks to emerge as a leader in the digital space, where most of the client budgets are going today. READ MORE

Nifty outlook and top stock picks by Motilal Oswal Securities

Nifty index formed a higher wave Doji Candle as traded in a wider range of 10,514 to 10,638 level. It witnessed buying interest in morning but it decline in last hour of the session. It witnessed profit booking at higher levels as it got stuck in the grip of option writers ahead of the April derivatives expiry. Now till it remains above 10,480-10,500 zones, it has potential to move towards 10,630 then 10,700 levels. READ MORE

Today's picks: From Vedenta to Sun Pharma, hot stocks to watch on Tuesday

Current price:Rs 305
Target price:Rs 300
Keep a stop at Rs 308 and go short. Add to the position between Rs 301 and Rs 302. Book profits at Rs 300. READ MORE

Nifty outlook and top trading ideas from Prabhudas Lilladher for today

Nifty has gradually progressed towards 10,600 levels, hence for near-term 10,500 holds to be a crucial support level. The support for the day is seen at 10,530 while resistance is seen at 10,640. READ MORE
Markets on Monday

S&P BSE Sensex 34,450.77 0.10%
Nifty 50 10,584.70 0.20%
S&P BSE 200 4,654.91 0.19%
Nifty 500 9,373.40 0.28%
S&P BSE Mid-Cap 16,881.11 0.49%
S&P BSE Small-Cap 18,274.20 0.53%

SGX Nifty

The SGX Nifty was at 10,567.50, down 0.19 per cent from the previous close.
Asian Markets

Asian stocks slipped and the US. dollar advanced on Tuesday, as a deluge of US government debt this week and the specter of inflation and a higher fiscal deficit drove US borrowing costs near four-year highs.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.25 per cent. Japan's Nikkei rose 0.7 per cent thanks to fall in the yen.
Wall Street

Wall Street ended mixed on Monday as concerns about soft smartphone demand weighed on tech stocks and pulled the Nasdaq lower while earnings optimism protected against deeper losses.
The Dow Jones Industrial Average fell 14.25 points (0.06 per cent) to 24,448.69, the S&P 500 gained 0.15 points (0.01 per cent) to 2,670.29, and the Nasdaq Composite dropped 17.53 points (0.25 per cent) to 7,128.60.
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