MARKET WRAP: Indices settle at record high led by L&T, Infosys, HDFC

The benchmark indices ended at their record highs on Tuesday. The S&P BSE Sensex ended at 36,825, up 106 points. The index hit its intra-day high of 36,902.06 today. The broader Nifty50 index settled at 11,134, up 50 points. It had hit a fresh near six-month high of 11,143.40 in intra-day deals.


Among sectoral indices, the Nifty Metal index moved up 3%, led by a sharp rise in Hindalco Industries and Jindal Steel & Power. The Nifty Realty index ended 2.5% higher, led by Unitech and DLF.


Shanghai shares got a boost from news that Beijing would adopt a more "vigorous" fiscal policy, including company tax cuts. Chinese blue chips rose 1.6 per cent to a one-month high, while MSCI's broadest index of Asia-Pacific shares outside Japan added 0.47 per cent. Japan's Nikkei edged up 0.5 per cent even as a disappointing reading on local factory activity suggested the threat of a trade war was starting to bite.


Oil prices extended losses on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran.

Brent crude oil was down 10 cents (0.14 per cent) at $72.96 a barrel, after settling down 1 cent on Monday. US crude was down 9 cents (0.13 per cent) at $67.80 a barrel. The contract fell 37 cents the previous day.

(with Reuters inputs)


MARKET COMMENT Mustafa Nadeem, CEO, Epic Research

Market hits a new all-time high with S&P Sensex hitting 36902, just a tad below 37K mark while on the other side Nifty has been shy of testing its all-time high of 11171. Though, Nifty has given a definite breakout after consolidating in a flag pattern for a week. Further, We have seen a positive close above the resistance line of the flag which has turned bulls aggressively bullish.

A flag is a continuation pattern which indicates the continuation of the preceding trend in the market. While its Pole being the previous rally we have observed from 10600 odd levels which come to be 500 odd points while the breakout has happened above at 11050, the point of inflection for the pattern. Nifty has successfully closed above this point for the second consecutive day which indicates the control of directional bulls. With that, 11450 is the conservative target for this pattern in short-term
Nifty Metal index ends 2.99% higher. Top gainers:

HINDALCO INDS. 207.60 196.15 11.45 5.84
WELSPUN CORP 115.05 109.75 5.30 4.83
JINDAL STEEL 195.90 187.45 8.45 4.51
JINDAL STAIN .HI 130.25 124.70 5.55 4.45
NATL. ALUMINIUM 61.05 58.55 2.50 4.27

Nifty sectoral gainers of the day

BSE Sensex: L&T, Asian Paints, Vedanta among top gainers of the day

Market at close
The S&P BSE Sensex ended at 36,825, up 106 points while the broader Nifty50 index settled at 11,134, up 50 points.
IDBI Capital on L&T Infotech

We factor Q1FY19 beat and increase FX rate to Rs68 vs. Rs65.5 earlier for rest of FY19E and FY20E. We increase FY19/20E revenue by 2.6%/3.2% and EPS by 6.3%/5.7%. We now forecast FY18-20E revenue (US$)/EPS CAGR of 16.9%/18.3%. We also raise our target price to Rs1,809 based on 20x FY20E and maintain HOLD
SBI Ecowrap: RBI to maintain status quo on August 01

We believe August rate decision is a close call, though we believe status quo rather than a hike looks the best option. The only reason for a rate hike by RBI at this juncture might be to satiate the self fulfilling prophecy of market expectations of a rate hike to stem the rupee depreciation (though rupee depreciated by 3% post June).
In our view, inflation risks are still evenly balanced. While the MSP hike could statistically push up CPI by 73 basis points, such inflation is unlikely to materialize as it is purely subject to procurement by the Central Government/State Government. In fact, without effective procurement, historical trends suggest that market prices have often fallen below MSP due to demand supply dynamics
Exporters fear India may lose $5.5 bn in gold medallion, coin exports

India is set to lose around $5.5 billion worth of gold medallion and coin exports due to the government's decision to ban shipment of gold beyond 22 carat of purity. Since gold medallions and coins contain 24 carats of gold, their export has been banned, albeit unintentionally. READ MORE

GlaxoSmithKline Pharmaceuticals zooms 17% on 1:1 bonus

Shares of GlaxoSmithKline Pharmaceuticals have zoomed 17% to Rs 3,249 per share, also their 52-week high on the BSE, after the company's board recommended a bonus issue in the ratio of 1:1. READ MORE

Rail related stocks in focus; Titagarh Wagons, Texmaco Rail surge 20%

Shares of railway related stocks such as Titagarh Wagons, Texmaco Rail & Engineering, Cimmco, Hind Rectifiers and Commercial Engineering & Body Builders Company have rallied up to 20% on the BSE.
According to a PTI report, the railway is looking at 4,000 km of track renewal in each of the next two financial years --2018-19 and 2019-20. Its estimated cost for 2018-19 is a little above Rs 100 billion. READ MORE


BSE SENSEX 36863.29 36718.60 144.69 0.39
BSE 500 14994.78 14855.22 139.56 0.94
BSE MID-CAP 15615.89 15392.58 223.31 1.45
BSE SMALL-CAP 16185.83 15867.21 318.62 2.01
S&P BSE LARGECAP 4317.47 4286.44 31.03 0.72
> More on BSE Indices
Devangshu Datta Rupee may rebound if crude keeps falling

The rupee hit a new low on Friday before it recovered to some degree. That was driven by a plunge in the Yuan’s value, which dragged down most Asian currencies in “sympathy”. However, the stockmarket rose on Monday, driven by the revamping of GST over the weekend.
Crude oil prices have also abated slightly, bringing some relief to India’s external account and we may see a rupee rebound if crude continues to trend down.  READ MORE
Equirus Securities on HT Media Ltd (HTML)

HT Media (HTML) posted below-expected 1QFY19 revenues of ~Rs 5.4bn (-7% yoy; -13% below EE) as both print advertising (-7% yoy) and circulation (-3% yoy) revenues remained under pressure. Newsprint cost inflation and one-offs in other expenses squeezed EBITDA margins to 6.6% (-538bps yoy) — among all-time lows. After reviving last quarter, English ad revenues slid ~9% y-o-y while Hindi ad revenues declined ~5% yoy.

The radio business (up ~12% vs. 2% in 4Q) is being demerged from HTML (except Hyderabad & UP stations) and merged with the radio business of Next Media Works (NMW), a listed company. The transaction, to be closed in 12-18 months, would reduce HTML to a pure publishing play. We pare revenue/EPS estimates by 5%/15% and 5%/22% for FY19 and FY20 respectively, and roll over to a Sep’19 target price of Rs 50 (Jun’19 target price: Rs 90). Maintain REDUCE.
ICRA on interest rate outlook

With mixed cues regarding the extent of inflationary and fiscal risks, and the momentum of economic growth, ICRA anticipates that the Monetary Policy Committee (MPC) would adopt a cautious stance and increase the repo rate to 6.5% in the August 2018 review. However, given the lack of clarity regarding some of these risks, it may persist with the neutral stance of the monetary policy, to signal that the timing and magnitude of upcoming rate hikes would be data dependant
MUST READ Venezuela inflation may surge to 1,000,000% by 2018-end, projects IMF

Venezuela's inflation rate is likely to top 1,000,000 per cent in 2018, an International Monetary Fund official wrote on Monday, putting it on track to become one of the worst hyperinflationary crises in modern history.
The South American nation's economy has been steadily collapsing since the crash of oil prices in 2014 left it unable to maintain a socialist system of subsidies and price controls CLICK HERE FOR MORE

(Photo: Shuttershock)

WEB EXCLUSIVE Is it a good time to buy mid-and small-cap stocks? 

Mid-and small-cap stocks have taken a beating thus far in calendar year 2018 (CY18). The S&P BSE Mid-cap and S&P BSE Small-cap indices have lost nearly 15 per cent and 19 per cent respectively, as compared to 7 per cent rise in the S&P BSE Sensex till July 20. The Nifty Small-cap 100 index hit a 52-week low of 6,926.80 on July 19, after a sharp decline in market values of Jet Airways (India), PVR and Manpasand Beverages READ MORE


Won't devalue yuan to boost its exports amid trade war, says China

China has no desire to boost its exports through competitive devaluation while the nation’s sound economic fundamentals are providing support to the currency, a spokesman said on Monday as US President Donald Trump took issue with the yuan’s month-long losing streak. READ MORE

GST exemption on warehoused gold a major relief to jewellery exporters

Banks and jewellery exporters have a reason to smile after the GST Council did some tweaking during its meeting on Saturday.
The council proposed that supply of warehouse goods to any person before clearance for home consumption will not be treated as supply and hence no GST is required to be paid on such transactions. READ MORE

Alphabet trounces profit estimates, shares rise

Google parent Alphabet Inc on Monday reported that its profit margin rose in the second quarter, delivering investors a long-awaited sign that expenses are coming into check. Shares jumped more than 5 percent after hours. READ MORE

Punjab National Bank gains after capital infusion

Punjab National Bank rose 1.39% to Rs 80.05 on BSE after the bank said it received Rs 2816 crore capital infusion from the government. The announcement was made after market hours yesterday, 23 July 2018. READ MORE

Idea Cellular surges 16% after it pays Rs 72 billion with Vodafone to DoT

Shares of Idea Cellular have surged 16% to Rs 61.10 per share on the BSE on the back of heavy volumes in anticipation that the merger with Vodafone is likely to be approved in the next few days.
According to Business Standard report, Idea Cellular and Vodafone have deposited a total Rs 72 billion over the spectrum charge demand made by the Department of Telecommunications (DoT) for merging their mobile business. READ MORE
8K Miles hits 52-week low; stock tanks 52% in one month

Shares of 8K Miles Software Services are locked in the lower circuit for the third straight trading day, falling 10% at Rs 250 per share, also their 52-week low on the BSE in otherwise firm market. READ MORE

35 ICICI Prudential Mutual Fund schemes invest Rs 25 bn in Bharat-22 ETF

Several actively managed funds of ICICI Prudential Mutual Fund (MF) have exposure to the Bharat-22 exchange traded fund (ETF). In November 2017, when the ETF was launched, the 35 schemes offered by the fund house had invested a cumulative Rs 25 billion in the ETF. This accounted for 27 per cent of the ETF’s closing AUM for November. READ MORE

Markets at Noon

S&P BSE Sensex 36,862.81 0.39%
Nifty 50 11,132.85 0.43%
S&P BSE 200 4,766.45 0.77%
Nifty 500 9,436.30 0.77%
S&P BSE Mid-Cap 15,595.68 1.32%
S&P BSE Small-Cap 16,165.99 1.88%

Investment in P-notes plunges to more than 9-year low of Rs 836.88 bn

Investments through participatory notes into Indian capital markets plunged to more than nine-year low of Rs 836.88 billion at June-end amid stringent norms put in place by the watchdog Sebi to check misuse of these instruments.
P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock markets without registering themselves directly. They, however, need to go through a proper due diligence process. READ MORE
Top gainers in BSE 500:

TEXMACO RAIL 68.20 59.00 9.20 15.59
ACC 1471.00 1305.35 165.65 12.69
ORIENT CEMENT 126.00 113.55 12.45 10.96
IL&FS TRANSPORT 38.80 35.00 3.80 10.86
L&T TECHNOLOGY 1446.55 1306.55 140.00 10.72


( CR)
( CR)
( CR)
23-JUL-2018 4410.52 4151.15 259.37
20-JUL-2018 4654.79 4344.52 310.27
19-JUL-2018 3480.53 3796.22 -315.69
18-JUL-2018 4642.55 4546.87 95.68
17-JUL-2018 4113.54 4787.53 -673.99
Provisional Figures» More
COMPANY ANALYSIS Havells: Strong show in core operations seen as key driver of growth

Havells kicked off FY19 on a strong note, clocking 40 per cent revenue growth during the June quarter (Q1), led by its electrical consumer durables (ECD) segment. While the Lloyd air-conditioners (AC) business also surprised positively, others supported growth, too. READ MORE

Motilal Oswal Securities on ACC

We believe that ACC will continue narrowing its profitability gap with peers, led by a higher proportion of premium sales, optimization of sales and rationalization of fixed cost. Any efforts toward capacity addition will be an added advantage.
We value ACC at 9x (30% discount to peers vs present discount of 45%) to arrive at a target price of Rs 1,633 (+25% upside). Upgrade to Buy.
IIFL on cement sector

With Q1FY19 Ebitda/tonne likely to be lower YoY by Rs222 and impact of cost increases likely to reflect in the next 2 quarters with less than adequate price increases so far, we expect FY19 profitability to be muted for the industry. Though the news flow is likely to be positive in the near term, as producers attempt to pass on cost increases, news flow is likely to turn negative due to the high base for demand growth from 3QFY19.
INTERVIEW Wealth management industry is likely to grow at 10-15% over next 5 years, says Nitiin Rao, CEO, Reliance Wealth Management

How have the investing trends among the wealthy changed over the last two-three years? What is the road ahead?
Customers have become more aware of investment avenues in general and mature investors have also understood the correlation between distribution costs and the degree of complications in normal investment products. Coupled with the emergence of direct mutual fund investments and investment advisory practices, a trend has been seen where mature investors have moved towards low-cost investment or advisory/transaction fee-based investment practices READ MORE HERE

Nitin Rao, CEO at Reliance Wealth Management

L&T Technology Services rallies 14% on strong Q1 results

Shares of L&T Technology Services (LTTS) have rallied 14% to Rs 1,485 per share on the BSE in early morning trade after the company reported a more-than-double net profit of Rs 1,981 million in June quarter (Q1FY19). The L&T group company had profit of Rs 980 million in the year ago quarter. READ MORE

Cement shares rally as ACC June quarter earnings beat estimates

Shares of cement companies have rallied up to 13% on the BSE in early morning trade after ACC reported a better-than-expected consolidated net profit of Rs 3.29 billion for the June 2018 quarter. The company had profit of Rs 3.26 billion in year ago quarter. READ MORE

Telecom stocks on a roll

REL. COMM. 13.55 0.32 2.42 1917448
IDEA CELLULAR 56.10 3.45 6.55 907429
TEJAS NETWORKS 276.00 21.30 8.36 51801
BHARTI AIRTEL 363.05 5.45 1.52 23743
TATA COMM 569.10 3.55 0.63 1158
» More
Anand Rathi on Page Industries

Driven by product launches, network expansion and operating-cost controls, strong ~20% revenue growth and ~30% PAT growth emerge from Page Industries’ FY18 annual report analysis. The company continued to generate positive operating cashflow and its OCF/ EBITDA grew to ~85% in FY18, from ~73% the year prior, driven by greater profit growth and better working-capital management.
Sensex heat map



·         Additions in OI were seen in 11100, 11000 strike Puts while liquidation was seen at 11000, 11100 strike Calls indicating market is likely to remain positive in the near term.
·         Highest OI build-up is seen at 11100 strike Calls and 10800 strike Puts, to the tune of 3.42mn and 5.76mn respectively.
·         FIIs were net buyers in Cash to the tune of 259.37 Cr. and were net sellers in Index Futures to the tune of 603.54 Cr.
·         India VIX decreased by 3.92% to close at 13.00 touching an intraday high of 13.62.

(Source: Nirmal Bang)
Edelweiss on ACC

With current cement prices being higher than Q2CY18 average, we see limited risk to our CY18E EBITDA. We believe, the pan-India player will benefit from the imminent rise in the industry’s clinker utilisation and, hence, retain CY19 estimates. Maintain ‘BUY’ with target price of Rs 1,817 (12x CY19E EV/EBITDA). Any effort by ACC to increase capacity (organic or inorganic expansion) will boost sentiments further.
Edelweiss on Bajaj Auto

We remain concerned about the price war spreading to other segments (especially premium) where players like Hero do not have much to lose. We prune BJAUT’s FY20E EPS ~7% to account for lower realisation and margin. We also cut our valuation multiple to 16.0x (5% premium to long-term historical average) from 17.5x to factor in the price war risk. Maintain ‘HOLD’ with revised target price of Rs 2,899 (Rs 3,300 earlier).
Street cheers L&T Finance's clean-up act; net interest income up 51%

Shares of L&T Finance on Monday recovered the entire 10 per cent it had lost in the past six months, on Monday following strong June 2018 quarter (Q1) results announced late-Friday. Yet, analysts see further upside as its balance sheet clean-up will support earnings growth. READ MORE

Stocks in news

·         Syngene International extended R&D Agreement with Baxter Healthcare till 2024.
·         PNB received Rs 2,816 crore capital infusion from Indian government.
·         Allahabad Bank received Rs 1,790 crore capital infusion from Indian government.
·         Fitch revised UPL outlook from stable to negative.
·         Essel Propack started first phase of commercial production of laminated tubes in Assam.
·         Indian Energy Exchange to consider stock-split on Aug. 9.
·         Vedanta: Ground water around the company’s copper plant contaminated

(Source: IIFL report)
IIFL on Hindustan Zinc

It has maintained its guidance of higher mined metal output for FY19 and also maintained its CoP target of US$950-975/ton despite the increase in employee costs. The management mentioned that they are on track to increase output to 1.2mtpa on mined metal in FY20.

Costs pressures have not eased as linkage coal supply has been lower than contracted and carbon costs have remained high. We expect zinc prices to bounce back from current levels due to dwindling inventory levels. Post the sharp correction we upgrade our rating to Buy with a revised target price of Rs.318

HDFC BANK 2167.90 10.15 0.47 210795.90 24.74
MARUTI SUZUKI 9846.55 149.40 1.54 61497.20 24.64
HIND. UNILEVER 1705.20 18.60 1.10 60825.93 16.48
H D F C 1974.00 7.40 0.38 193778.42 14.49
INFOSYS 1361.00 5.25 0.39 218668.11 13.02

Sebi warns heads of asset management companies against 25 malpractices

The Securities and Exchange Board of India (Sebi) has written to the heads of asset management companies (AMCs), warning against 25 malpractices committed by the Rs 23-trillion industry. The regulator, in a four-page letter dated July 9, has also warned fund houses against breaches and demanded corrective measures. READ MORE

Nifty sectoral trend

BSE Sensex gainers and losers

Market at open
At 9:16 AM, the S&P BSE Sensex was trading at 36,817, up 98 points while the broader Nifty50 was ruling at 11,114, up 29 points.
Markets at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 36,882.41 +163.81 +0.45
S&P BSE SENSEX 50 11,658.66 +61.00 +0.53
S&P BSE SENSEX Next 50 31,963.12 +27.83 +0.09
S&P BSE 100 11,350.97 +52.27 +0.46
S&P BSE Bharat 22 Index 3,392.18 +22.01 +0.65

(Source: BSE)
Commodity watch: Oil prices fall as oversupply concerns weigh

Oil prices extended losses on Tuesday as attention shifted to the risk of oversupply, with market participants shrugging off escalating tensions between the United States and Iran.
Brent crude oil was down 10 cents, or 0.14 percent, at $72.96 a barrel by 0037 GMT, after settling down 1 cent on Monday. U.S. crude was down 9 cents, or 0.13 percent, at $67.80 a barrel. The contract fell 37 cents the previous day READ MORE

Global markets China's bond yields jump, yuan falls on policy stimulus bets

Chinese government bond yields jumped and the offshore yuan hit its weakest level in more than a year on Tuesday after China's cabinet said it would pursue a more vigorous fiscal policy and as traders bet on further easing in monetary conditions READ MORE HERE
Top trading ideas by Anand Rathi Research: Buy Sterlite, Aurobindo Pharma

TARGET: Rs 590
The stock has provided a breakout from the falling trend line resistance with a buy crossover in its momentum indicator MACD on the hourly charts. With this breakout, the stock seems to have completed a wave 4 correction and wave 5 up seems to have ensued, hence we recommend buying this stock for the target of 590 with a stop loss of 545 READ MORE HERE
Kotak Securities on Arvind

We believe that Arvind being a major player in branded apparel business and having long history in textiles business would be benefited by rising disposable income, growth in retail sector and increasing preference towards branded apparels. We believe that the demerger of branded apparel and engineering business would unlock value of each of the businesses post listing. We initiate coverage on the stock with BUY recommendation and SOTP based target price of Rs 500
UBS on real estate sector

RERA implementation has been slow and awareness is much lower than we had expected. This may imply that demand may take longer to recover, but favourable supply-side dynamics are already visible. The top 10 developers are gaining share strongly in both launches and sales. Despite 7% outperformance, we believe our preferred property stocks are not pricing in the accelerated market-share gains ahead. Reiterate Buy on Godrej, Oberoi, and Prestige

Today's picks: From Bajaj Auto to ITC, hot stocks to watch on Tuesday

Current price: Rs 284
Target price: Rs 288
Keep a stop at Rs 282 and go long. Add to the position between Rs 286 and Rs 287. Book profits at Rs 288 READ MORE
Investment in P-notes plunges to more than 9-year low of Rs 836.88 bn

Investments through participatory notes into Indian capital markets plunged to more than nine-year low of Rs 836.88 billion at June-end amid stringent norms put in place by the watchdog Sebi to check misuse of these instruments READ MORE
MUST READ Sebi probes sharp fall in the midcap stocks amid unfair trade allegations

The market regulator Securities and Exchange Board of India (Sebi) has begun a preliminary investigation into the crash in share prices of small- and mid-cap companies in recent months. Sources say the regulator is probing the abrupt price movement in close to 70 stocks, following red flags raised by its surveillance system CLICK HERE FOR MORE
Stock ideas for today: ICICI Bank, Jindal Steel and Power

The stock has been maintaining a good base at around 258-260 levels and almost has made a double bottom formation pattern in the daily chart and currently has indicated a positive candle to signify strength and has potential to rise further in the coming days. READ MORE HERE
Markets on Monday

Index Current Pt. Change % Change
S&P BSE SENSEX 36,718.60 +222.23 +0.61
S&P BSE SENSEX 50 11,597.66 +68.21 +0.59
S&P BSE SENSEX Next 50 31,935.29 +558.73 +1.78
S&P BSE 100 11,298.70 +85.39 +0.76
S&P BSE Bharat 22 Index 3,370.17 +41.82 +1.26

SGX Nifty

The SGX Nifty was at 11,097, slightly down by 0.02 per cent from the previous close.
Asian Markets

Shanghai shares seemed to get a boost from news Beijing would adopt a more "vigorous" fiscal policy, including company tax cuts. Chinese blue chips rose 1.6 per cent to a one-month high, while MSCI's broadest index of Asia-Pacific shares outside Japan added 0.47 per cent. Japan's Nikkei edged up 0.5 per cent even as a disappointing reading on local factory activity suggested the threat of a trade war was starting to bite.
Wall Street

The benchmark US S&P 500 index and the Nasdaq index rose on Monday as a jump in 10-year bond yields boosted financial sector stocks and investors anticipated continued strength in corporate earnings and US economic growth.

The Dow Jones Industrial Average fell 13.83 points (0.06 per cent) to 25,044.29, the S&P 500 gained 5.15 points (0.18 per cent) to 2,806.98 and the Nasdaq Composite added 21.68 points (0.28 per cent) to 7,841.87.
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