MARKET WRAP: TCS up 5% in a flat market, HUL hits record, metal stocks slip

Stock brokers reacts as they watch the share prices of BSE sensex in Mumbai. Photo: Kamlesh Pednekar
The markets ended flat on Wednesday amid weakness in their key Asian peers. The S&P BSE Sensex ended at 36,266, up 26 points while the broader Nifty50 index settled at 10,948, up 1 point.

Among sectors, the Nifty Metal index was the worst hit following concerns of escalation in global trade war fears. The index ended nearly 3% lower with Jindal Steel, Coal India, Vedanta and SAIL each ending over 4% lower.

TCS rallies 5 per cent

Among sectoral indices, the Nifty IT index ended around 2 per cent higher led by a sharp rise in the shares of Tata Consultancy Services (TCS), which settled nearly 5 per cent higher after the company posted a better-than-expected rise of about 23.5% year on year (YoY) and 6.3% quarter on quarter (QoQ) in first-quarter (Q1) net profit, helped by strong growth in its banking, financial services and insurance division (BFSI).

FMCG stocks on a roll

Shares of fast moving consumer goods (FMCG) companies continued their upward march on Wednesday with the Nifty FMCG index hitting a new high of 29,958 in intra-day on the National Stock Exchange (NSE), fuelled by expectations of a healthy performance in June quarter, aided by a low base and a healthy underlying demand scenario.

 
Hindustan Unilever (HUL), Godrej Consumer Products (GCPL), Jubilant FoodWorks and Marico from the Nifty FMCG index hit their respective record highs on the NSE in intra-day trade today.

Global Markets

A sell-off in Chinese markets knocked Asian stocks on Wednesday as US threats of tariffs on an additional $200 billion worth of Chinese goods pushed the world’s two biggest economies ever closer to a full-scale trade war.

Washington proposed the extra tariffs after efforts to negotiate a solution to the dispute failed to reach an agreement, senior administration officials said on Tuesday.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1 per cent. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week.

Hong Kong’s Hang Seng slid 1.5 per cent and the Shanghai Composite Index dropped 1.8 per cent. South Korea’s KOSPI lost 0.55 per cent and Japan’s Nikkei fell 1 per cent.

Oil Prices

Oil prices declined after the United States said it would consider requests from some countries to be exempted from sanctions it will put into effect in November that prevents Iran from exporting oil.

Brent crude futures lost 0.8 per cent to $78.22 a barrel. Oil had risen the previous day, supported by a larger-than expected US stock draw and supply concerns in Norway and Libya.

(with Reuters inputs)

LIVE UPDATES

MARKET COMMENT Jayant Manglik, President, Religare Broking

After a smart upmove over the past few sessions, some consolidation cannot be ruled out in the coming sessions. Key domestic macro events like May IIP, June CPI inflation data and corporate earnings season will provide further direction to the markets in the near term. Stock / sector specific volatility will remain high.

The progress of monsoon, movement of crude oil prices and global developments will continue to be monitored by the market participants. The rising trade tensions between US & China could induce high volatility across the indices globally. Traders should avoid risky leveraged positions
Nifty IT index settled 2.21% higher today. Top gainers:

COMPANY LATEST PREV CLOSE GAIN() GAIN(%)
TCS 1979.90 1875.10 104.80 5.59
TATA ELXSI 1445.00 1392.45 52.55 3.77
KPIT TECH. 291.30 286.80 4.50 1.57
INFOSYS 1320.45 1301.40 19.05 1.46
HCL TECHNOLOGIES 993.45 979.55 13.90 1.42

Nifty sectoral performers


BSE Sensex: TCS, Bajaj Auto among top gainers of the day, Coal India top loser


Market at close
 
The S&P BSE Sensex ended at 36,266, up 26 points while the broader Nifty50 index settled at 10,948, up 1 point.
Metal shares witness selling pressure

Shares of 10 metal and mining companies fell by 1.58% to 4.04% on BSE after copper price edged lower in the global commodities markets. Jindal Steel & Power (down 4.04%), Hindalco Industries (down 3.84%), Vedanta (down 3.7%), Steel Authority of India (down 3.69%), Hindustan Zinc (down 3.29%), National Aluminium Company (down 2.69%), Tata Steel (down 2.08%), JSW Steel (down 1.78%), Hindustan Copper (down 1.77%) and NMDC (down 1.58%), edged lower. READ MORE

Gold remains weak on global cues, muted demand

Gold prices fell further by Rs 30 to Rs 31,350 per 10 grams at the bullion market today largely due to a weak trend overseas amid tepid demand from local jewellers. Silver followed suit and lost another Rs 150 at Rs 40,500 per kg owing to reduced offtake by industrial units and coin makers. READ MORE

Murdoch's Fox agrees $32.5 billion bid for Sky

Rupert Murdoch's 21st Century Fox said it had agreed a deal to buy Britain's Sky with an offer valuing the pay-TV group at $32.5 billion, trumping rival bidder Comcast.
 
Fox, which is expecting to get regulatory approval from Britain this week after striking an initial deal with Sky in December 2016, upped its offer to 14 pounds per share, from its earlier 10.75 pounds per share. READ MORE

BS SPECIAL Consumer business to drive doubling of Reliance's size in the next 7 years, writes Ambareesh Baliga

Reliance Industries’ annual general meetings (AGMs) are the most awaited investors’ event in the Indian stock market calendar. Like last year, the focus this time was on the businesses headed by Ambani gen-next and it was also an indication that they were settling down well in the saddle.
 
The group has been the harbinger of equity culture in India, creating wealth for millions of its investors. The importance of Reliance can be gauged from the data on the group’s consolidated tax payment for 2017-18 which exceeds the GDP of about 11 Indian states READ MORE HERE
UBS on rupee outlook

The worsening of India's external position amidst tightening global financial conditions and USD strength has resulted in the INR weakening to an all-time low of 69 against the USD recently. Looking at the INR on a Real Effective Exchange Rate (REER) basis and using the Harrod-Balassa-Samuelson (HBS) theorem to adjust for the productivity differential with trading partners, our model indicates the INR has overshot its equilibrium value and is undervalued at its current level. Our analysis suggests the fair value of the INR based on productivity-adjusted REER is in the 64-66 range.

Photo: Shutterstock

COMMENT Kotak Securities on rupee

Fragile global risk sentiments and increasing domestic vulnerabilities have continued to weigh on INR in CY2018 after a stellar performance in CY2017. The unrelenting capital outflow from EMs is a reflection of the increasing global risks as DM monetary policies normalize and trade war threatens to derail the global economic recovery. Adverse global backdrop, deteriorating domestic macro scenario and domestic political uncertainty could continue to keep the INR under pressure. We expect USD-INR to range 67.5-71.0 for the rest of FY201
Market Check

 
S&P BSE Sensex 36,290.81 0.14%
 
Nifty 50 10,953.60 0.06%
 
S&P BSE 200 4,702.05 -0.11%
 
Nifty 500 9,349.10 -0.11%
 
S&P BSE Mid-Cap 15,633.83 -0.66%
 
S&P BSE Small-Cap 16,433.48 -0.30%

Top gainers in BSE500:

COMPANY LATEST PREV CLOSE GAIN() GAIN(%)
ADANI POWER 20.05 17.35 2.70 15.56
SHILPA MEDICARE 423.80 383.50 40.30 10.51
BLUE STAR 701.85 657.45 44.40 6.75
IDBI BANK 56.70 53.20 3.50 6.58
TCS 1982.95 1877.00 105.95 5.64

See more
TCS hits new high as Q1 profit beats Street estimate; stock surges 6%

Shares of Tata Consultancy Services (TCS) rose by 6% at Rs 1,990 per share, also their new high on the BSE in noon trade after the country’s biggest software services exporter posted a better-than-expected rise of about 23.5% year on year (YoY) and 6.3% quarter on quarter (QoQ) in first-quarter (Q1) net profit, helped by strong growth in its banking, financial services and insurance division (BFSI). READ MORE
Adani Group shares in focus; Adani Power, Adani Enterprises up over 8%

Shares of the Gautam Adani-led Adani Group companies have rallied by up to 16% on the BSE in intra-day trade in an otherwise subdued market. Adani Power (up 16% at Rs 20.15), Adani Enterprises (10% at Rs 125), Adani Green Energy (7% at Rs 33.20), Adani Transmission (5% at Rs 167) and Adani Ports and Special Economic Zone (2% at Rs 378) have surged up to 16% on Wednesday. READ MORE

Equirus on Gujarat Ambuja Exports

We analyzed Gujarat Ambuja Exports’ (GAEX) FY18 Annual Report and following were the key takeaways: (1) Demand for corn starch in the export market has increased and GAEX’s new Chalisgaon plant is primarily focussing on exports. (2) A 300bps EBITDAM expansion in the agro segment was mainly driven by a reduction in trading activities. (3) Focus remains on the maize business in terms of capital allocation. (4) Capacity utilization in the agro business is set to pick up as domestic demand for de-oiled cakes is improving. We broadly maintain our FY19/FY20 estimates and maintain our SoTP-based June’19 target price of Rs 320. Maintain Long rating.
FMCG index hits new high; HUL, Godrej Consumer at record levels

Shares of fast moving consumer goods (FMCG) companies continued at their upward march on Wednesday with the Nifty FMCG index hitting a new high of 29,958 on the National Stock Exchange (NSE), fuelled by expectations of a healthy performance in June quarter, aided by a low base and a healthy underlying demand scenario. READ MORE

Mukesh Ambani's aim to more than double RIL's size looks achievable

Last Thursday, Reliance Industries' chairman Mukesh Ambani exuded confidence that the company will more than double in the next seven years. At the company's annual general meeting of shareholders, Ambani said, "As India starts on its high growth journey to double the size of its economy by 2025, I assure you that the size of Reliance will more than double in the same period."  READ MORE

MARKET COMMENT R Sreesankar, Co-Head - Insitutional Equities, Prabhudas Lilladher

We had reduced our trading range for the market to be between estimated the trading range for the market to be between 9640-10000 and maintaining the trading range for the near term. With the country getting into an election mode in the next nine months from both the state elections as well as the general elections, the uncertainty is likely to set in. This in our view should result into a contraction of market PERs.

With crude remaining at an elevated level, the under performance of the OMCs is a case point as the market expects any further increase in crude prices may not be passed onto the consumers ahead of elections. On the contrary, there is an expectation of subsidy increases leading to an increase on overall government borrowings. In anticipation, we have already seen the bond yields moving up and interest rates inching up. With both crude as well as most global commodity prices remaining firm, it is also expected to see a commodity led inflationary pressure building up. The mid cap and small cap companies continue to see pressure
Motilal Oswal Research on Ipca Labs

We have assumed strong 13.5%/44% CAGR in sales and PAT over FY18-20. We raise our target P/E multiple to 21x (from 20x earlier) on back of enhanced visibility of regulatory resolution based on remediation work done by the company, revival in DF and anti-malaria business. Accordingly, we value IPCA at 21x FY20E EPS of Rs 39 to arrive at a price target of Rs 825 (v/s INR785; 20x FY20E EPS earlier). Reiterate Buy.
Paisa Bazaar under Sebi scanner over Akshay Kumar ad promoting MFs

Popular online distribution portal Paisa Bazaar's latest advertisements featuring Akshay Kumar to promote mutual funds have come under regulatory glare.
 
Sources said industry body Association of Mutual Funds in India (AMFI) had directed Paisa Bazaar to seek an approval from markets regulator Securities and Exchange Board of India (Sebi) for commercials featuring celebrities. However, the ads have already gone live on popular social media platforms. READ MORE

Market Check

 
S&P BSE Sensex 36,265.10 0.07%
 
Nifty 50 10,946.90 -0.00%
 
S&P BSE 200 4,704.63 -0.06%
 
Nifty 500 9,346.75 -0.14%
 
S&P BSE Mid-Cap 15,672.35 -0.42%
 
S&P BSE Small-Cap 16,454.71 -0.18%

Emkay Global on pharma sector

Recent price rise in the US Pharma industry has drawn a sharp reaction from the US President Donald Trump with a pledge to respond with various appropriate measures. The Trump administration blames high US drug prices on lower prices as well as pricing caps in other countries, leading to Americans subsidizing the high R&D costs. Given this US stance, the recent attempts by the Indian government to rein in drug prices could now become a bone of contention between the two governments. Recent attempts by the US generic drug industry to push back against severe price erosion by hiking prices could also come under scrutiny. 
Choice Research on Asian Paints



Market check

Index Current Pt. Change % Change
 
S&P BSE SENSEX 36,190.11 -49.51 -0.14
 
S&P BSE SENSEX 50 11,453.63 -10.78 -0.09
 
S&P BSE SENSEX Next 50 32,335.60 -221.02 -0.68
 
S&P BSE 100 11,199.10 -20.27 -0.18
 
S&P BSE Bharat 22 Index 3,356.61 -23.29 -0.69



MUST READ As auto sector continues to grow, Nano's failure stands in stark contrast

A moment of silence, please, for the world’s cheapest car, which has all but died in India. It was almost 10 years old. The Nano’s death was confirmed by production numbers: Tata Motors Ltd. produced 1 unit in June, down from 275 in the same month last year. Exports were zero, versus 25 in June 2017. The company acknowledged that the car in its “present form cannot continue beyond 2019. READ MORE HERE


COMMODITY WATCH US says import of Iranian oil sanctionable from Nov 4; India may get relief

US Secretary of State Mike Pompeo said on Tuesday that the import of oil from Iran beginning November 4 will be a sanctionable activity but the US would consider the request for relief from a handful of countries, in an apparent reference to India which is the second largest buyer of Iranian crude. READ MORE

PNB Housing rises 6% as PNB, Carlyle Group plan to offload 51% stake

Shares of PNB Housing Finance were up by 6% at Rs 1,269 per share on Wednesday in intra-day trade, extending their 2% rise in the previous day on the BSE, after the company said that Punjab National Bank (PNB) and the Carlyle Group proposed to sell their stake to the potential acquirers. READ MORE

Emerging-Market rally pits Morgan Stanley against Goldman Sachs

Signs of stabilization in emerging markets since the start of the month are splitting some of Wall Street’s biggest banks on the outlook for the asset class. Morgan Stanley strategists dubbed the recent recovery a “head fake” and recommended selling on gains in stocks and bonds. Their counterparts at Goldman Sachs Group say that developing nations “now offer relative value” and are keeping their long call on the MSCI Emerging Markets Index of equities. READ MORE

Shilpa Medicare surges 13% after receiving EIR from USFDA

Shares of Shilpa Medicare have surged by 13% to Rs 434 per share on the BSE in morning trade after the company said that it has received Establishment Inspection Report (EIR) from the US health regulator for both of its facilities located at Raichur, Karnataka. READ MORE

Sebi launches proceedings against ICICI Prudential MF, to probe officials

The country’s largest mutual fund (MF) house ICICI Prudential Asset Management Company (AMC) may not escape simply by compensating its investors in the ICICI Securities fiasco. Sources say market regulator Securities and Exchange Board of India (Sebi) has launched adjudication proceedings against the fund house to further probe misuse of investors’ money. READ MORE

Anand Rathi on IndusInd Bank
Rating: Buy
Target Price: Rs 2,248
(Image source: Anand Rathi report)

 

Edelweiss on IndusInd Bank

IndusInd Bank’s Q1FY19 earnings were in-line with expectations and reaffirms our confidence that the bank is structurally poised to achieve Phase IV targets and achieve scale with quality. Loan growth momentum of 29% (more broad-based), sustained CASA (SA grew >50% YoY), and operating leverage supported 20% YoY NII and >27% YoY operating profit growth. MTM loss of INR860mn fed into softer PAT growth of 24%.

Asset quality was steady with slippages at 1.3%, credit cost at 14bps and GNPLs at 1.15%. Key monitorables will be: a) below trend core fee income growth; and b) merger update with BhaFin (likely conclusion in Q2FY19). Given strong track record, superior RoA and well-capitalised position, execution risks are minimal. Maintain ‘BUY’ with target price of Rs 2,080 (3.9x FY20E P/ABV)
Market Check

 
S&P BSE Sensex 36,253.60 0.04%
 
Nifty 50 10,964.55 0.16%
 
S&P BSE 200 4,709.78 0.05%
 
Nifty 500 9,375.45 0.17%
 
S&P BSE Mid-Cap 15,739.92 0.01%
 
S&P BSE Small-Cap 16,509.78 0.16%

TCS gains 3% as Q1 profit beats Street estimate

Shares of Tata Consultancy Services (TCS) rose 3% to Rs 1,928 per share on the BSE in early morning trade after the country’s biggest software services exporter posted a better-than-expected rise of about 23.5% year on year (YoY) and 6.3% quarter on quarter (QoQ) in first-quarter (Q1) net profit, helped by strong growth in its banking, financial services and insurance division (BFSI). READ MORE
BS Special Consumer business to drive doubling of Reliance's size in the next 7 years

Reliance Industries’ annual general meetings (AGMs) are the most awaited investors’ event in the Indian stock market calendar. Like last year, the focus this time was on the businesses headed by Ambani gen-next and it was also an indication that they were settling down well in the saddle.
 
The group has been the harbinger of equity culture in India, creating wealth for millions of its investors. The importance of Reliance can be gauged from the data on the group’s consolidated tax payment for 2017-18 which exceeds the GDP of about 11 Indian states. READ MORE
MARKET COMMENT Gautam Duggad, head of research, Motilal Oswal

As far as the 1QFY19 earnings season is concerned, it will benefit from the favorable base of 1QFY18, when pre-GST destocking by trade had impacted the performance of several sectors like Auto, FMCG, Retail, Healthcare and Cement. Global cyclicals like Metals and Oil & Gas will continue leading from the front and contribute more than half of the incremental profits for MOSL universe.

Our Nifty EPS estimates are largely stable for FY19 and FY20 at Rs 580 and Rs 694 v/s Rs 579 and Rs 693 earlier, respectively. We are building in Nifty EPS growth of 26%/20% for FY19/20.

Nifty sectoral trend


Sensex heat map



RESULT IMPACT TCS rises over 2% as June quarter results beat expectations (Image souce: NSE)



Market at open
 
At 9:16 AM, the S&P BSE Sensex was trading at 36,226, down 13 points while the broader Nifty50 was ruling at 10,938, down 9 points.
Markets at pre-open

Index Current Pt. Change % Change
 
S&P BSE SENSEX 36,266.70 +27.08 +0.07
 
S&P BSE SENSEX 50 11,496.03 +31.62 +0.28
 
S&P BSE SENSEX Next 50 32,556.62 0.00 0.00
 
S&P BSE 100 11,247.82 +28.45 +0.25
 
S&P BSE Bharat 22 Index 3,379.90 0.00 0.00

(Source: BSE)
Technical calls by HDFC Securities for today: Buy ITC, Bajaj Electricals

Buy ITC (Rs 277)
Target: Rs 294
Stop loss: Rs 268
 
Most of the large-cap FMCG stocks hit new all-time highs during the last two months. However, in the case of ITC, it is still placed 25% below from the all-time high of 368 registered in July 2017. Recently ITC has taken support on the long-term trend line on the weekly charts and reversed northward. Stock price reclaimed a level above its 20 and 50 DMA, indicating a bullish trend reversal. We recommend buying ITC for the upside target of 294, keeping SL at 268.
 
Buy Bajaj Electric (Rs 551)
Target: Rs 590
Stop loss: Rs 523
 
The stock has been holding above its crucial support of 200 DMA, currently placed at 512. Stock Price has recently broken out from the consolidation range of 515-550, holding for last 5 weeks. On Tuesday, July 10, 2018, Stock surged more than 5%, with a significant jump in volumes. Oscillators and indicators have turned bullish on the short-term charts. We recommend buying Bajaj Electric for the upside target of 590, keeping SL at 523. READ MORE

Stocks in news

·         Axis Bank board shortlisted three candidates for the position of Managing Director and Chief Executive Officer
 
·         Punjab National Bank and Carlyle Group to sell minimum 51% stake in PNB Housing Finance to potential buyers
 
·         Officials indicate that LIC-IDBI deal may trigger an open offer, according to Bloomberg
 
·         Glenmark Pharmaceuticals launched Helsinn’s Akynzeo drug in India and Nepal
 
·         Shalimar Paints approved issue of rights issue draft order up to Rs 240 crore and will re-establish its Nashik Plant
 
·         Tata Motors unit picked up 26% stake in freight aggregator company Truckeasy
 
·         KEC International secured multiple orders worth Rs 1,357 cr
 
·         BigBloc Construction to acquire Hilltop Concrete for Rs 20 cr
 
·         Kridhan Infra won order worth Rs 74.2 cr
 
·         MCX, NSE in talks to team up for bigger exchange play
 
·         Vedanta to team up with Anglo American to bid for Indian Coal Mines

(Source: IIFL report)
 
MARKET COMMENT Amar Ambani, head of research, IIFL

The Sensex and Nifty saw some sunshine yesterday, as a strong upmove continued throughout the day, helping the markets close in the green. A surge in the last hour of trade, was supported by index heavyweights and midcap stocks. Auto, energy, metals and PSU banks joined the rally on Dalal Street.

The market capitalisation of HDFC group crossed Rs 1 trillion, the second Indian business to hit the mark after the Tata Group. Oil prices rose by over a dollar due to a strike in Norway and reduction of Libya's production.US to slap tariffs on extra $200 bn of Chinese imports. Asian markets are trading low. US markets ended higher. The outlook is a flat start
INTERVIEW OF THE DAY Platts sees crude oil prices in $75 - $80 a barrel range for next 18 months

Rising prices are starting to threaten oil demand in Asia, especially in a country like India, which is starting to feel the pressure more than others. India could feel the pinch with both Venezuelan and Iranian crude, which is also of the heavier sourer variety, coming off the market, says London – based PAUL HICKIN, associate director at S&P Global Platts in an interview READ MORE HERE

Paul Hickin, Platts

RESULT ANALYSIS TCS back on double-digit growth path led by rebound in BFSI vertical

Led by a revival in the banking financial services and insurance (BFSI) vertical TCS is expected to post double-digit growth in FY19. The company’s annual revenue growth, which has been trending down from FY12 onwards, hit the trough in FY18 with a growth of 4.4 per cent. Financial year FY19 would be the first time in three years that the company will get back to the double-digit growth mark READ MORE
IDBI Capital on TCS

We remain confident of TCS reporting the best improvement in FY19 revenue growth (organic) amongst IT large-caps. We factor Q1FY19 beat and FX assumption to Rs68 vs. Rs65.5 earlier for rest of FY19E and FY20E and increase our FY19/20E EPS by 7.8%/5.7%. We maintain ACCUMULATE with new target price of Rs 2,042 based on 22x FY20E vs. 20x earlier
Nifty outlook and top trading ideas from Prabhudas Lilladher for today

Nifty has given a breakout, as said earlier and is heading towards the significant level of 11,000 and the sentiment along with the bias has been maintained positive. Bank Nifty, too has reached near the 27,000 landmark which when breached would bring about a fresh breakout and we may see further fresh development. However, the support for the day is seen at 10,880 while the resistance would be at 11,020 levels. READ MORE

Emkay Global on Dish TV

■    Dish TV reported strong numbers after few quarters of dismal performance. Subscription revenue grew by 8.1% qoq to Rs14.9bn, driven by 6.4% qoq increase in ARPU. 
 
■    Operating performance was better than expected, largely driven by higher revenue. Total opex declined by 2.9% qoq (up 2.5% qoq adjusted for one-time cost of Rs600mn in Q4FY18), but 6% higher than our estimate. 

■    Strong Q1FY19 performance sets positive momentum, as major benefits of cost synergies from merger would reflect in the coming quarters. We continue to highlight that consistency in performance is key due to past baggage of underperformance. We raise EBITDA estimates by 4%/2% for FY19/20E, driven by higher ARPU assumptions.  

■    Cable TV distribution companies have corrected significantly with JIO’s announcement to launch JIO Fibre and JIO TV while Dish TV has been stable due to ongoing open offer. Pricing plans from JIO on for its fibre and TV offering would decide the level of disruption. We retain ACCUMULATE with unchanged target price of Rs 86 (8x FY20E EV/EBITDA)
■    
Phillip Capital on IndusInd Bank June quarter results

IndusInd Bank will continue to report strong performance led by robust growth in advances and stable NIM. Merger with Bharat financial will enable the entity to realize synergies in funding cost and opportunity to drive revenues from cross selling. Growth in consumer finance loans will gain momentum and will subsidize the high-rated corporate business, thus allaying NIM and asset-quality concerns.

Risk adjusted RoA should continue to remain strong, driven by earnings CAGR of 25% in FY18-20. We maintain BUY with increased target price to Rs 2170 (previous Rs 2050) valuing the stock at 4x FY20 BVPS of Rs 542.
Edelweiss on TCS results

We continue to maintain that sector turnaround has just begun and revenue acceleration will continue as the proportion of low growth business (IMS/ADM) will keep declining while that of high-growth digital will rise. Accordingly, given our sector turnaround view, we raise the target multiples for our coverage universe.

We believe TCS’s current market price already factors in the aforementioned positives; thus, despite assigning the highest sector multiple of 22x FY20E EPS (20x earlier), we maintain ‘HOLD’ with a revised target price of Rs 1,943 based on better results and our USD/INR estimate revision to 69 from 66.
Today's picks: From Hindalco to Indiabulls, hot stocks to watch today

Hindalco
Current price: Rs 229
Target price: Rs 233
 
Keep a stop at Rs 227 and go long. Add to the position between Rs 231 and Rs 232. Book profits at Rs 233.
 
Indiabulls Housing
Current price: Rs 1,143
Target price: Rs 1,125
 
Keep a stop at Rs 1,152 and go short. Add to the position between Rs 1,129 and Rs 1,132. Book profits at Rs 1,125. READ MORE

Markets on Tuesday

 
S&P BSE Sensex 36,239.62 0.85%
 
Nifty 50 10,947.25 0.87%
 
S&P BSE 200 4,707.41 0.86%
 
Nifty 500 9,359.40 0.88%
 
S&P BSE Mid-Cap 15,737.77 1.01%
 
S&P BSE Small-Cap 16,483.58 1.04%

SGX Nifty

The SGX Nifty was at 10,928, down 0.27 per cent from the previous close.
Asian Markets

Asian stocks retreated and perceived safe havens such as the yen and US Treasuries rose on Wednesday after the United States said it would impose tariffs on an extra 200 billion worth of Chinese imports, sharply escalating the trade war between the world’s two biggest economies.
 
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.4 per cent. The index had gained for the past two sessions, having enjoyed a lull from the trade war fears that lashed global markets last week. South Korea's KOSPI lost 1 per cent and Japan's Nikkei fell 1.2 per cent.
Wall Street

The S&P 500 rose for a fourth session on Tuesday to post its highest close since Feb. 1, the day before the market began a sharp extended selloff, as strong results from PepsiCo boosted optimism about the earnings season.
 
The Dow Jones Industrial Average rose 143.07 points (0.58 per cent) to 24,919.66, the S&P 500 gained 9.67 points (0.35 per cent) to 2,793.84 and the Nasdaq Composite added 3.00 points (0.04 per cent) to 7,759.20.
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