MARKET WRAP: Sensex ends at record closing high, up 282 pts; RIL up 4%

Sensex ended at record closing high on Thursday, driven by gains in financial and energy stocks as optimism around corporate earnings and stronger Asian shares boosted sentiment. The broader Nifty50 index also ended above its crucial 11,000-mark.

The S&P BSE Sensex ended at record closing high of 36,548, up 282 points, surpassing previous closing high of 36,283 on January 29, 2018 while the broader Nifty50 index settled at 11,023, up 75 points.

In intra-day, the S&P BSE Sensex hit a record high of 36,699.53 levels surpassing its previous high of 36,444 recorded on January 29, 2018 in intra-day deals led by gains in RIL, Wipro HDFc and L&T, up in the range of 1.9 per cent to 5 per cent.

Among individual stocks, RIL's m-cap crossed $100-bn mark in intra-day trade today, after hitting a new high. It became the second Indian company to cross the milestone after TCS.

Infosys, however ended nearly 2% lower, ahead of its first quarter (Q1FY19) results, due tomorrow.

Nifty PSU Bank index was the biggest sectoral gainer of the day, up over 1%, with Bank od Baroda and SBI gaining 2.2% and 1.1% respectively.

Meanwhile, investors await May industrial growth (IIP) data and June retail inflation (CPI) data due later in the day.


In global markets, Asian stocks and commodities recovered slightly on Thursday as markets tried to consolidate from the previous session's steep losses when fears of an escalation in the US-China trade war jolted investor sentiment.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05 per cent. The index slumped 1 per cent on Wednesday along with a slide in global equities after US President Donald Trump's threat to imposing tariffs on another $200 billion of Chinese goods deepened the trade row between the world's two largest economies. Hong Kong's Hang Seng rose 0.2 per cent and the Shanghai Composite Index bounced 1.1 per cent. South Korea's KOSPI added 0.35 per cent and Japan's Nikkei gained 1.1 per cent.

(with Reuters inputs)


MARKET COMMENT by Gautam Duggad, Head of Research, Motilal Oswal Institutional Equities
Sensex crossed all-time high on the back of global cues as well as solid start to earnings season with TCS beating expectations. The divergence between large-caps and mid-caps has widened in 2018 with mid-cap and small-cap indices still down 15-20% from the top. Even within Nifty - select high quality stocks with earnings visibility are driving the index with TCS, HDFC Bank, HUL, Reliance being the key outperformers in YTD CY18.
We expect the markets to remain in a tight range albeit with higher volatility in 2018 given the busy political calendar ahead. Our relative preference stays with large caps as midcaps are still trading at premium to largecaps.
RIL settled 4.05% higher at Rs 1,080.90 on the NSE

Nifty PSU Bank index settles 1.12% higher. Top gainers:

BANK OF BARODA 118.80 116.20 2.60 2.24
ST BK OF INDIA 262.05 259.10 2.95 1.14
PUNJAB NATL.BANK 75.85 75.55 0.30 0.40

Nifty sectoral performers of the day

BSE Sensex: RIL is top gainer of the day, ending 4.33% higher

Market at close
The S&P BSE Sensex ended at record closing high of 36,548, up 282 points, surpassing previous closing high of 36,283 on January 29, 2018 while the broader Nifty50 index settled at 11,023, up 75 points.
Tata Power, Vedanta, UPL hit 52-week lows

Shares of Tata Power Company, Vedanta and UPL have hit their respective 52-week lows, falling in the range of 2% to 3% on the BSE in otherwise firm market. READ MORE
Sector watch: Prabhudas Lilladher on road construction stocks

Road sector stocks have corrected by ~15-20% over last 3 months in spite of all time high order inflow and order book in FY18, our interaction with investor suggest one of apprehension is risk to execution due to reluctance on part of banking sector to lend to road sector (O/s credit to sector coming down YoY since last several months).
While political uncertainty might continue to weigh on sector in near term, concerns on execution are over done in our view.  We continue to like players with a strong track record of execution and large balance sheet to support/fund large projects wins. We continue to maintain "BUY" on Sadbhav Engineering and Ashoka Buildcon with price target of Rs 417 and Rs 287, respectively
Sector-wise FDI flow (Image source: CARE Ratings report)

Trends in FDI (Image source: CARE Ratings report)

Ircon stake sale on course; govt plans to raise around Rs 6 billion
After the massive response from investors for the initial public offering (IPO) of RITES, the government is set to divest around 10.5 per cent stake in another Railways subsidiary, Ircon International, in September.
The government is targeting to raise around Rs 6 billion through the listing of Ircon. On the other hand, the divestment of the government's stake in the other two Railways subsidiaries -- Rail Vikas Nigam Limited (RVNL) and Indian Railway Finance Corporation (IRFC) -- might happen during the October to December quarter of the current financial year. READ MORE
Sovereign funds cut India investments; share of FPI drops in recent years
Some of India’s largest foreign investors are showing signs of increasing reticence. Sovereign wealth funds’ stock market bets were worth Rs 1.5 trillion, according to latest depository data as of May 2018. This is lower than the previous year, and reflects half-a-trillion drop from two years ago.
Meanwhile, overall foreign portfolio investments rose by over Rs 7.4 trillion from May 2016. Sovereign wealth funds’ share of foreign investments has dropped to 5.4 per cent in May 2018 from 10.9 per cent share in May 2016. READ MORE
Sebi not averse to the merger of exchanges, says Chairman Ajay Tyagi
Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi on Wednesday said the regulator was not against the merger of exchanges.
Speaking on the sidelines of an event organised by Associated Chambers of Commerce and Industry of India (Assocham), he said, “More players are required, but if the economics determine there should be a consolidation, then so be it.” READ MORE
Analysis: Goodbye inverted yield curve? Fed looks for alternative signals to guide policy
Federal Reserve officials are scouring new niches of the financial markets to find signals accurate enough to warn the central bank when it is time to stop hiking interest rates before they risk tipping the economy into a recession.
In the run up to previous downturns, the Fed has jacked interest rates to restrictive levels as it sought to temper inflation. This time, the central bank hopes for a softer landing with rates moving just high enough to avoid overheating without ending a nearly decade long expansion. READ MORE
MARKET COMMENT Hemang Jani, Head - Advisory, Sharekhan by BNP Paribas

Markets are trading at all time high despite lot of headwinds like trade-war tension and  Rupee depreciation. This rally is majorly fuelled by very few stocks like HDFCBANK, Kotak Bank, Reliance, HDFC and TCS however broader market is still not out of woods as nifty Midcap and Small cap index are trading far lower than from all time high level.

Earning season for Q1 F2019 has kicked in with high expectation. TCS and IndusInd bank reported their number which are better than market estimates. Investor should keep eye on this earning season, if this season goes well and earning picks up, then we may see broader rally in markets and market may see higher levels in near future. Investor should be selective in this market as valuation are little stretched and buy those stocks where numbers are good and growth visibility is there
Market Check

S&P BSE Sensex 36,587.38 0.89%
Nifty 50 11,040.85 0.85%
S&P BSE 200 4,724.57 0.54%
Nifty 500 9,392.20 0.51%
S&P BSE Mid-Cap 15,560.70 -0.46%
S&P BSE Small-Cap 16,421.25 -0.05%

Top gainers in BSE 500:

SONATA SOFTWARE 310.10 277.25 32.85 11.85
GMR INFRA. 18.15 17.00 1.15 6.76
TIME TECHNOPLAST 142.65 135.05 7.60 5.63
RELIANCE INDS. 1091.95 1036.35 55.60 5.36
BALRAMPUR CHINI 67.60 64.35 3.25 5.05
See More
BS SPECIAL Preview: Earnings to rebound in Q1FY19, but momentum may taper off
The momentum in consumption demand is likely to sustain in Q1FY19, with strong numbers coming in from Consumer Staples, Durables and Auto sectors. The banking sector credit growth rising to 13 per cent also underscores gradual improvement on the back of increasing retail lending and rising sales growth of companies.
The cyclical upturn is largely attributed to higher revenue spending by the government, especially in the rural areas, its multiplier effect on aggregate demand, moderate improvement in global trade, depreciation in INR/USD and rising commodity prices. READ MORE
Why Donald Trump's policies are making Asian junk investors nervous

Donald Trump has made Asian high-yield investors nervous wrecks. First, there are the obvious casualties of his trade war against China. Lenovo Group Ltd.’s bonds are down to 87.4 cents on the dollar from more than 100 cents at the start of the year. Then there’s the collateral damage of his greenback-boosting, late-cycle fiscal stimulus, which is making investors worried about Asian currency weakness. READ MORE

WEB EXCLUSIVE After Sensex rally, mid-and small-caps likely to play catch up: Analysts

At a time when the global equity markets have been the pressure of a possible escalation in trade wars, Indian markets have been resilient. Since the recent low of 32,483 levels hit on March 23, 2018 in intra-day deals, the S&P BSE Sensex has climbed nearly 12 per cent to hit a record high of 36,533 on Thursday.
Analysts say the up move in the benchmark indices has been on account of a rally in only a clutch of stocks basis the news flow rather than the rally being broad-based. This, they feel, is a cause for concern. In this backdrop, they see a limited upside for the benchmark indices from here on. READ MORE

Higher revenue share from non-cyclical biz a positive for Ashok Leyland
Ashok Leyland Ltd’s (ALL’s) stock has gained over 7 per cent in three trading sessions on robust June quarter volume numbers, value unlocking prospects in the near-term, and expectations of a double-digit truck sales growth over the next three years. The rising proportion of non-cyclical business in overall revenues will keep top line growth steady and less volatile.
Analysts at Kotak Securities say recent concerns on slowdown in the truck segment are unwarranted as tonnage growth continues to outpace the rise in volume. READ MORE
Reliance Industries market cap touches $100-bn mark, stock at record high

Reliance Industries (RIL) market capitalisation (market cap) surpassed the $100 billion mark, after its stock price soaring to a record high of Rs 1,090, up 5% on Thursday on the BSE in intra-day trade. It became the second Indian company to scale the milestone after TCS.
At 11:56 am; RIL market cap stood at Rs 6.88 trillion or $ 100 billion mark, the BSE data shows. The stock was quoting at Rs 1,088, up 4.9%. On comparison, the S&P BSE Sensex was up over 1%. READ MORE

HPCL, BPCL, Jet Airways gain on fall in oil prices

Shares of airlines and oil marketing companies (OMCs) companies were trading higher by up to 5% on the BSE after the Brent Crude recorded its biggest one-day fall in two years on Wednesday.
All three listed OMCs, Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) were up 3% to 5%. Meanwhile Jet Airways (India), SpiceJet, and InterGlobe Aviation, which runs IndiGo were trading higher in the range of 2% to 5% on the BSE. READ MORE

Markets at Noon

S&P BSE Sensex 36,680.66 1.14%
Nifty 50 11,058.70 1.01%
S&P BSE 200 4,749.96 1.08%
Nifty 500 9,432.70 0.95%
S&P BSE Mid-Cap 15,765.13 0.85%
S&P BSE Small-Cap 16,557.72 0.78%

NEWS ALERT: RIL touches $100-bn mark. It becomes the second Indian company after TCS to hit $100-bn mark

L&T gains on order win worth Rs 23.88 billion
Larsen & Toubro (L&T) has moved higher by 1.3% at Rs 1,292 on the BSE after the company said its water & effluent treatment business won orders valued Rs 23.88 billion.
The orders have been secured from the Madhya Pradesh Jal Nigam Maryadit for the execution of Satna, Kundatiya and Mohanpura multi village rural water supply schemes on turnkey basis. The projects are funded by the New Development Bank, L&T said in a press release. READ MORE
Prospects rebounding for Crompton Greaves Consumer on govt's rural push
After falling from its all-time high of Rs 295 in January to Rs 215 last month, Street sentiment is reviving for Crompton Greaves Consumer Electricals (Crompton). The stock is now figuring among analysts’ picks on expectations that it would gain from the government’s rural push and initiatives.
Crompton is among the top five rural players, according to CLSA. Nomura, too, has it among its top picks due to expected gains from growth in the rural economy and infrastructure spending. READ MORE
Rupee's downslide to continue? Here's what this top forecaster thinks

The Indian rupee’s top forecaster is going against the crowd. The currency will strengthen by the year-end, Emirates NBD PJSC forecasts, bucking a growing consensus that sees it hitting new record lows.
The negatives responsible for the rupee’s recent slide -- elevated oil prices and a strong dollar -- have run their course, Aditya Pugalia, Dubai-based director of financial markets at the bank. READ MORE

Women's wear brand W's IPO next week; shares priced at Rs 714 to Rs 716

Apparel retailer TCNS Clothing will launch its Rs 11-billion initial public offering (IPO) of equity next week, where a clutch of promoters will sale their holdings. The company that owns popular women’s wear brand W has priced its shares at Rs 714 to Rs 716 a share. The 15.7-million share offering will open for subscription on July 18 and close on July 20. The total dilution by promoters will be 25.6 per cent. The IPO will value the company at Rs 44 billion. TCNS Clothing sells its products, which mainly comprises ethnic wear, through 460 rented brand outlets and 1,522 multi-brand outlets. READ MORE

Sebi-appointed panel considers 'Snapchat model' to boost start-up listings

The Securities and Exchange Board of India (Sebi) is mulling a ‘Snapchat model’ for facilitating listing of Indian start-ups. The multimedia messaging app offered shares without any voting rights during its initial public offering (IPO) last year. READ MORE

GIC Re trades ex-bonus in ratio of 1:1; stock hits new low

Shares of state-owned reinsurance company General Insurance Corporation of India, or GIC Re have slipped 4.5% to Rs 365 per share on the National Stock Exchange (NSE) in otherwise firm market. The stock touched its lowest level since listing on the bourses on October 25, 2017. The stock of GIC RE turned ex-bonus in the ratio of 1:1 and for dividend of Rs 13.50 per equity share. READ MORE

Edelweiss on Godrej Consumer Products

We recently met Mr. Vivek Gambhir, Managing Director & CEO of Godrej Consumer Products (GCPL). Key takeaways: (i) management is confident of robust rural growth bolstering overall business; (ii) FY19 is envisaged to be year of strong innovations & new launches; (iii) management believes Power Chip entails potential to change fortunes of its HI segment; and (iv) international business is on recovery road with focus now on improving return ratios.

We believe, the company’s innovation drive and market leadership will further bolster GCPL’s positioning and spur MS gains. Riding on this optimism, we upgrade target multiple to 45x (earlier 40x) to arrive at revised target price of Rs 1,435 (earlier Rs 1,265). Maintain ‘BUY’.
Edelweiss on Torrent Pharma

During FY18, Torrent Pharmaceuticals (TRP) further consolidated its presence in the domestic market with the Unichem acquisition, where ~60% of portfolio overlaps (30% as per mgmt), albeit at expensive valuations of 4.1x trailing revenues. This acquisition is RoCE and earnings dilutive as it will generate single-digit return over the next two years.

Our analysis suggests a ~10% revenue CAGR for the Unichem portfolio over next three years, with EBITDA margin improving from 18% to 30%. We maintain ‘HOLD/SP’ with target price of Rs 1,333 (20x FY20E EPS). 
IT, Private Banks, RIL, HUL help Sensex to hit record high

Shares of heavyweight companies from the information technology (IT) sector, private banks along with Reliance Industries (RIL) and Hindustan Unilever (HUL) have helped the S&P BSE Sensex hit a record high of 36,463 on Thursday. The benchmark index surpassed its previous high of 36,2443.98 recorded on January 29, 2018.
Nifty 50 index, which touched high of 11,015.45 in intra-day trade today, is 1.4% away from its all-time high of 111,71.55 recorded in January this year. READ MORE

Market Check

S&P BSE Sensex 36,523.48 0.71%
Nifty 50 11,026.40 0.71%
S&P BSE 200 4,733.38 0.72%
Nifty 500 9,409.95 0.70%
S&P BSE Mid-Cap 15,747.49 0.74%
S&P BSE Small-Cap 16,554.95 0.76%

US-China trade war a warm-up act for financial crisis: Mark Mobius

For Mark Mobius, there may be worse to come even after the US fired new shots in its trade war with China: a further 10 per cent drop in emerging-market stocks and a global financial crisis.

“There’s no question we’ll see a financial crisis sooner or later because we must remember we’re coming off from a period of cheap money,” the veteran investor in developing nations said in an interview in Singapore. “There’s going to be a real squeeze for many of these companies that depended upon cheap money to keep on going.” READ MORE

Mark Mobius


Crude fall impact

H P C L 281.00 265.15 15.85 5.98 134914
B P C L 386.00 366.50 19.50 5.32 59455
I O C L 160.50 154.55 5.95 3.85 180135

Top Sectoral Gainer: Nifty PSU Bank index

Market Alert: Nifty50 index reclaims 11,000 for the first time since February 1, 2018
Sectoral Trend

Top Sensex gainers and losers

Markets at Open

At 9:17 am, the S&P BSE Sensex was trading at 36,454, up 188 points, while the broader Nifty50 index was ruling at 11,009 up 60 points
Market at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 36,361.79 +95.86 +0.26
S&P BSE SENSEX 50 11,508.31 +37.99 +0.33
S&P BSE SENSEX Next 50 32,240.57 +62.38 +0.19
S&P BSE 100 11,239.23 +34.27 +0.31
S&P BSE Bharat 22 Index 3,350.21 +6.53 +0.20

(Source: BSE)
Today's picks: From M&M to Coal India, hot stocks to watch today

Coal India 
Current price: Rs 265
Target price: Rs 260
Keep a stop at Rs 268 and go short. Add to the position between Rs 261 and Rs 262. Book profits at Rs 260.
Mahindra & Mahindra 
Current price: Rs 931 
Target price: Rs 945
Keep a stop at Rs 920 and go long. Add to the position between Rs 940 and Rs 943. Book profits at Rs 945. READ MORE

Top trading ideas by Tradebulls Securities: Buy NIIT Tech, sell Idea

Reco.: Buy
CMP : Rs 1,128
Strong sector performance & the 5 weeks consolidation seems mature now. A sustained move above 1150 would accelerate the momentum as indicated by the trend strength indicator (RSI) which has witnessed a breakout from its corresponding range in yesterday’s session. Trading longs could be initiated with a stop below 1083 & a potential target upto 1246.
Stock: IDEA
Reco.: SELL
CMP : Rs 54
Secular downtrend remains intact as the lower top lower bottom sequence continues on the daily scale as well. IDEA has breached below its critical pivotal around 54 & also trading below its short term averages. Any slippage below 53.80 could drag it further lower towards 50 zone. Short positions should be maintained with a stop above 56.30. READ MORE

Top trading ideas from Prabhudas Lilladher:

CMP: Rs 1,085.20
TARGET: Rs 1,170
STOP LOSS: Rs 1,040
The stock has been more or less in a consolidation phase making a round bottom formation and currently has indicated a positive candle and is almost on the verge of a breakout above the significant 50 DMA moving average to signify strength and potential to give a bounce from here on in the coming days. With the RSI on the rise, the bias has been maintained positive and with good volume participation witnessed, we recommend a buy in this stock for an upside target of 1170 keeping a stop loss of 1040.
CMP: Rs 378.70
TARGET: Rs 410
The stock has formed a higher bottom formation pattern in the daily chart forming a good base at around 369 levels and has indicated a revival to signify strength and potential to give a rise from current levels. The RSI has indicated a trend reversal to signal a buy and has improve the bias. With consistent volume activity visible, we recommend a buy in this stock for an upside target of 410 keeping a stop loss of 366. READ MORE
Stocks in news

·         Idea Cellular said that the current approval of DoT for merger with Vodafone is conditional and not a final approval
·         Power Grid arm started full commercial operations in Maharashtra
·         Quinaq Acquisition (FPI) increased stake to 9.94% from 3.09 % in Mannapuram Finance
·         M&M Forgings to issue bonus shares in ratio 1:1
·         Satin Creditcare Network approved transfer of MSME business to arm; to acquire 11 lakh shares in subsidiary for Rs 3.3 crore
·         Bank of Baroda clarified candidature of its MD & CEO PS Jayakumar to succeed Axis Bank CEO Shikha Sharma is speculative
·         LIC-IDBI Bank deal may conclude by September, PTI reported
·         Sun Pharma arm filed lawsuit against Bifrontera for patent infringement and trade secret misappropriation
·         IDBI Bank raises MCLR by 10 basis points to 9.6 percent from July 12
·         Shree Cement arm completed acquiring 97.61 percent stake in UAE based UCC
·         Max India promoters clarifies SEBI has not mandated an open offer in its order
·         Cipla’s wholly owned subsidiary acquired South African company –Mirren (Pty) Ltd. for Rs 228 crore
·         Kwality to close its its dairy products business in UAE
·         Max Group promoters said that SEBI has not mandated promoters to carry out an open offer anywhere in its order

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

The market ended a choppy day of trade on a flat note, as investors booked profits at higher levels. Investors seemed to shrug off tepid global cues, caused by rising trade tensions between two of the world's largest economies. IT, realty and FMCG sectors were the gainers, while metals and auto closed in the negative.

Stock specific activity will continue. India has trimmed its oil imports from Iran to 16% in June, as US said it will reimpose sanctions on Iran after withdrawing from a 2015 agreement. Expect a cautious start as investors gear up for the quarterly numbers. US shares fell after a four-day rally. Asian stocks are moving lower.
Nifty outlook from Prabhudas Lilladher for today

Nifty took a breather at around 10950 levels after the rally from around 10550 levels while Bank Nifty faced resistance at around 26940 levels and witnessed some profit booking. Bank Nifty need to break the barrier of 27000 levels for any fresh upward movement. With the ongoing result season of heavyweight stocks and weak global cues, much volatility is anticipated in the indices. However, the support for the day is seen at 10880 while the resistance would be at 11020 levels.
SGX Nifty

The SGX Nifty was at 10,979.50, up 0.29 per cent from the previous close.
Asian Markets

Stocks and commodities recovered slightly on Thursday as markets tried to consolidate from the previous session's steep losses when fears of an escalation in the US-China trade war jolted investor sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05 per cent. The index slumped 1 per cent on Wednesday along with a slide in global equities after US President Donald Trump's threat to imposing tariffs on another $200 billion of Chinese goods deepened the trade row between the world's two largest economies. Hong Kong's Hang Seng rose 0.2 per cent and the Shanghai Composite Index bounced 1.1 per cent. South Korea's KOSPI added 0.35 per cent and Japan's Nikkei gained 1.1 per cent.
Wall Street

US stocks fell on Wednesday, breaking a four-session streak of gains after Washington's threat to impose tariffs on an additional $200 billion worth of Chinese goods fanned trade war fears, while a sharp drop in oil prices hit energy shares.

The Dow Jones Industrial Average fell 219.21 points (0.88 per cent) to 24,700.45, the S&P 500 lost 19.82 points (0.71 per cent) to 2,774.02 and the Nasdaq Composite dropped 42.59 points (0.55 per cent) to 7,716.61.
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