MARKET WRAP: Nifty ends above 11,000 as PSU banks gain; SBI up 3%

Benchmark indices rose on Tuesday as PSU Banks such as SBI, Bank of Baroda gained on report that six banks, including PNB, may get capital infusion of Rs 80 billion but weakness in consumer stocks including Hindustan Unilever capped gain

Around six public sector banks (PSBs), including the PNB that has been hit by the Nirav Modi scam, might get a capital infusion of about Rs 80 billion from the government, The Economic Times on Tuesday reported, while citing an unnamed senior finance ministry official.

The S&P BSE Sensex ended at 36,520, up 196 points while the broader Nifty50 index settled at 11,008, up 71 points.

Among sectoral indices, Nifty PSU Bank index rose over 3.5% with Union Bank of India, Allahabad Bank, Bank of Baroda, PNB gaining in the range of 6 per cent - 8.5 per cent.

Shares of oil companies and airlines also jumped, with the Nifty Energy index rising as much as 1.6 per cent on lower oil prices. Oil prices extended losses on Tuesday after a more than 4 per cent slide to hit a three-month low on Monday.

Shares of Hindustan Petroleum Corp and Indian Oil Corp gained 6 per cent and 4 per cent, respectively and were the top gainers on the NSE index.

Meanhwhile, consumer goods maker Hindustan Unilever dropped as much as 3.5 per cent after posting June-quarter results below market expectations.


World stocks recovered some ground on Tuesday as oil prices stabilised, while the dollar edged lower and most other markets were subdued before Federal Reserve Chair Jerome Powell testifies to the US Congress.

MSCI’s world equity index, which tracks shares in 47 countries, was broadly unchanged, with energy companies in Europe and Asia recovering ground from early losses caused by the previous day’s turbulence in commodity markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 per cent, snapping two days of gains amid concern over growth in China.

Chinese stocks were among the biggest losers in Asia on Tuesday, falling 1.7 per cent.

(with Reuters inputs)


Nifty PSU Bank index settles 3.86% higher. Top gainers:

UNION BANK (I) 80.65 74.40 6.25 8.40
BANK OF BARODA 120.75 113.05 7.70 6.81
PUNJAB NATL.BANK 78.65 73.85 4.80 6.50
ALLAHABAD BANK 42.15 39.65 2.50 6.31
BANK OF INDIA 81.90 77.50 4.40 5.68
See More
Nifty sectoral gainers of the day

BSE Sensex: SBI, Sun Pharma, Axis Bank among top gainers of the day, HUL top loser

Market at close
The S&P BSE Sensex ended at 36,520, up 196 points while the broader Nifty50 index settled at 11,008, up 71 points.
Ashok Leyland first-quarter profit tops expectations
Ashok Leyland reported a better-than- expected first quarter net profit on Tuesday, driven by higher sales in its medium and heavy commercial vehicles business.
Net profit rose to Rs 3.70 billion ($54.13 million) in the quarter ended June 30 from Rs 1.11 billion a year ago. The year-earlier quarter included a foreign exchange loss of Rs 26.7 million.
NCLAT stays voting by Bhushan Power & Steel lenders on finalising bids
The NCLAT today stayed the meeting of Committee of Creditors (CoC) of Bhushan Power and Steel Ltd to vote on finalisation of bids of the debt-ridden firm.
The National Company Law Appellate Tribunal (NCLAT) also pulled up the Resolution Professional (RP) of the company, Mahendra Kumar Khandelwal, for not following its previous orders to allow the representatives of operational creditors to attend the meeting. READ MORE
NSE registers record volumes as Gift City gains popularity among investors
India’s “offshore” trading platform International Financial Services Center (IFSC), Gift City is gaining popularity among investors thanks to tax sops.
The daily volume of the National Stock Exchange (NSE) IFSC crossed the $500-million mark for the first time, on July 13. A total of 46,710 index contracts were traded during the day—the highest-ever since NSE launched the special platform for Gift City in June 2017. READ MORE
Relief for India? US to consider waivers on Iran sanctions, says Mnuchin
The United States in certain cases will consider waivers for countries that need more time to wind down imports of oil from Iran as it seeks to avoid disrupting global oil markets while reimposing sanctions against Tehran, US Treasury Secretary Steven Mnuchin said. 
"We want people to reduce oil purchases to zero, but in certain cases, if people can't do that overnight, we'll consider exceptions," Mnuchin told reporters on Friday, clarifying some US officials' comments that there would be no exemptions. Mnuchin's comments were embargoed for release on Monday as other US officials were expected to begin talks in India this week on cutbacks in Iranian oil supplies. READ MORE
PSU banks gain on government capital infusion report
Shares of public sector undertaking (PSU) banks were in focus with Nifty PSU Bank index gaining nearly 2% on media report that six banks, including PNB, may get capital infusion of Rs 80 billion.
Union Bank of India, Bank of Baroda, Oriental Bank of Commerce, Bank of India, Allahabad Bank, Canara Bank, Punjab National Bank (PNB), Andhra Bank and Syndicate Bank were up in the range of 4% to 6% on the National Stock Exchange (NSE). State Bank of India (SBI) and IDBI Bank were up 1% each READ MORE
Market Check

BSE SENSEX 36357.81 36323.77 34.04 0.09
BSE 500 14718.92 14649.37 69.55 0.47
BSE MID-CAP 15272.48 15053.77 218.71 1.45
BSE SMALL-CAP 15865.54 15790.00 75.54 0.48
S&P BSE LARGECAP 4242.12 4229.00 13.12 0.31

Federal Bank rebounds from 52-week low post Q1 results; stock up 13%
Federal Bank has moved higher by 13% to Rs 83.90 on the BSE in noon deal after the private sector lender said its assets quality in June quarter (Q1FY19) remain stable as compared to March quarter.
The stock rebounds 14% from its 52-week low of Rs 73.60, touched on the BSE in early morning trade, before the announcement of Q1 results. READ MORE
Top BSE500 gainers

FEDERAL BANK 83.50 9.40 12.69 2629665
REL. COMM. 13.28 1.25 10.39 7267171
M R P L 79.20 5.45 7.39 121196
JAIN IRRIGATION 83.10 4.95 6.33 761052
CG POWER & INDU. 58.20 3.45 6.30 366518
» More on Top Gainers
Can Yes Bank emulate its peers' success in the mutual fund business?
In early July, Yes Bank announced that it had received the go-ahead from Securities and Exchange Board of India (Sebi) to start its mutual fund operations. Yes AMC will become the 43rd fund house to join the MF industry.
While there are several AMCs currently operating in India, the top 5 AMCs account for 57 per cent of the industry’s AUM. Despite the huge growth potential, there are only a few AMCs that have managed to gain a respectable market share. However, Yes AMC may have a slight edge thanks to the bank-backing. Among the top 5 AMCs in the industry, three happen to be bank-backed AMCs which together account for 36 per cent of industry assets. READ MORE
WEB EXCLUSIVE Auto sector preview: High fuel prices to potentially impact growth
Auto sales in India have been on the fast lane since the implementation of goods and services tax (GST) in July 2017, thanks to an increase in consumer spending coupled with exciting launches by the industry and a buoyant rural economy. Automobile sales volumes have grown steadily in the last three quarters, albeit on a lower base. However, renewed interest by buyers and original equipment manufacturers (OEMs) has led to hefty expectations on Dalal Street with Nifty Auto Index being one of the top performing indices of FY18.
In comparison to the financial year 2018-19 (FY18), FY19 has got off to a steady start with Q1 automobile sales showing a 15 per cent year-on-year (YoY) growth, even if on a low base (anticipation of GST), and quarterly volumes growing at 6 per cent. READ MORE

Six PSBs, including PNB, may get capital infusion of Rs 80 billion: Report
Around six public sector banks (PSBs), including the Punjab National Bank (PNB) that has been hit by the Nirav Modi scam, might get a capital infusion of about Rs 80 billion from the government, The Economic Times on Tuesday reported, while citing an unnamed senior finance ministry official. These banks are likely to fall short of regulatory capital requirements.
The official told the financial daily that some banks that have issued additional tier 1 capital bonds, with the interest payments being due, would not be allowed to make the required payments if they didn't meet the regulatory capital norms. The government, however, cannot allow PSBs to default on such payments as that would impact their rating, the official added. READ MORE
More than $6 bn green bond issues still stuck due to rising interest rates
Green bonds of huge amounts from India are stuck because of rising interest rates and global uncertainties, even as the country’s largest lender, SBI, is in the process of going through its maiden issue of green bonds of at least $500 million. According to analysts tracking such bonds, the renewable energy sector alone can offer bonds of $3-4 billion.
SBI’s plan is to raise another $3 billion through such bonds. To date, Indian companies have raised about $5.4 billion through green bonds in the overseas markets. READ MORE
Nestle India market cap crosses Rs 1-trillion; stock rises 50% from Feb low
Nestle India on Tuesday became the third listed fast moving consumer goods (FMCG) company to join the elite club of firms that have seen their market capitalisation (market cap) soar past the Rs 1 trillion mark.
With Rs 1.01 trillion market cap, Nestle India stands at 28th position in overall market-cap ranking; the BSE data shows. The stock is trading at its all-time high level of Rs 10,450, up 2.4% in otherwise subdued market. The S&P BSE Sensex was trading 0.12% or 45 points higher at 36,369 levels. READ MORE
Markets at Noon

Index Current Pt. Change % Change
S&P BSE SENSEX 36,381.69 +57.92 +0.16
S&P BSE SENSEX 50 11,493.85 +34.43 +0.30
S&P BSE SENSEX Next 50 31,479.78 +308.02 +0.99
S&P BSE 100 11,188.91 +44.44 +0.40
S&P BSE Bharat 22 Index 3,315.32 +16.69 +0.51

(Source: BSE)
PN Gadgil, KPR Agrochem and Ircon get Sebi's go-ahead to float IPOs

Three companies—Ircon, PN Gadgil & Sons, and KPR Agrochem—have received the Securities and Exchange Board of India’s go-ahead to float initial public offerings (IPOs). With this, a total of around 34 companies have got the market regulator’s go-ahead for public issues.
Rail PSU Ircon and KPR Agrochem had filed their preliminary papers with Sebi in March, seeking approval to launch initial share sales, while Pune-based retail jewellery chain PN Gadgil & Sons approached the regulator with IPO papers in May. READ MORE
Top gainers in BSE 500:

GRAPHITE INDIA 963.75 917.90 45.85 5.00
HEG 3896.35 3710.85 185.50 5.00
REL. COMM. 12.63 12.03 0.60 4.99
JAIN IRRIGATION 82.00 78.15 3.85 4.93
ALLAHABAD BANK 41.30 39.40 1.90 4.82
See More
Buyback withdrawals by companies pose headache for Sebi, investors

The withdrawal of share buyback programmes by companies is posing a new headache for the Securities and Exchange Board of India (Sebi) and investors. Shares of troubled PC Jeweller lost a quarter of their value after the jewellery retailer said it was unable to go ahead with its proposed Rs 4.2-billion share repurchase programme. In May 2018, the company had announced its buyback plan to stem a share slide in its stock price. READ MORE

Apotex buy may not initially contribute to Aurobindo's earnings

Aurobindo’s acquisition of Apotex’s operations in five European countries, announced on Saturday, has not been taken well by the street, as the stock lost five per cent on Monday.
The concerns on a possible large-ticket acquisition, putting stress on the company’s balance sheet, also kept the street anxious. Analysts, however, said that while the buyout of Apotex’s operations in The Netherlands, Belgium, Spain, Poland and the Czech Republic makes business sense and has come at a reasonable price, it is unlikely to add to Aurobindo’s profits immediately. READ MORE

Hindustan Unilever slips 3% post Q1 results on profit booking

Shares of Hindustan Unilever (HUL) have slipped 3% to Rs 1,701 per share on the BSE on Tuesday due to profit booking after the fast moving consumer goods (FMCG) company reported strong numbers for June 2018 quarter (Q1FY19), broadly in-line with analyst estimates. The stock has fallen 4.4% from its all-time high of Rs 1,780 recorded in early morning trade on BSE today. READ MORE

LIC-IDBI Bank deal likely to breach mutual fund crossholding norms

Life Insurance Corporation of India’s (LIC’s) approval to acquire a majority stake in IDBI Bank on Monday could leave the insurance major holding over 10 per cent stake in three asset management companies (AMCs), a situation the market regulator might not be too happy with. IDBI Asset Management and IDBI MF Trustee Company are subsidiaries of IDBI Bank, and the lender holds 66.7 per cent and 100 per cent in these two entities, respectively. READ MORE

YES Bank hits new high; rallies 15% in 9 days on SEBI nod to launch MF biz

Shares of YES Bank hit a new high of Rs 386 per share, rising 2% on the BSE, and moving higher for the ninth straight trading session after the bank said that it has received approval from capital markets regulator SEBI to start mutual fund business. The stock surpassed its previous high of Rs 385 recorded on July 12, 2018 in intra-day trade. READ MORE

Market Check

Index Current Pt. Change % Change
S&P BSE SENSEX 36,399.58 +75.81 +0.21
S&P BSE SENSEX 50 11,498.91 +39.49 +0.34
S&P BSE SENSEX Next 50 31,424.16 +252.40 +0.81
S&P BSE 100 11,190.16 +45.69 +0.41
S&P BSE Bharat 22 Index 3,320.75 +22.12 +0.67

(Source: BSE)
TCNS IPO prospects good but there's little room for near-term growth

TCNS Clothing Company is coming with an Initial Public Offer (IPO) of equity, involving an offer for sale of 15.71 million shares. Its business prospects look good, with healthy past performance and experienced management; however, the stock valuation suggests investors looking for immediate gains might get disappointed. Analysts, thus, suggest only long-term investors should subscribe. READ MORE

Q1 results: High valuations factor in strong show by HUL, stock gains

The share price of Hindustan Unilever (HUL) hit a new high of Rs 1,779 intra-day on Monday, before closing 0.73 per cent higher at Rs 1,753.85 on the BSE. The higher close was in anticipation of a strong performance for the June 2018 quarter (Q1).
The results, which were declared post market hours, undoubtedly suggest that the Street’s expectations have been met. But considering the high stock valuation, experts believe that the stock already factors in a strong performance over the next two years. READ MORE

Sectoral Trend
Top Sensex gainers and losers

Markets at Open

At 9:17 am, the S&P BSE Sensex was trading at 36,282, down 41 points while the broader Nifty50 index was ruling at 10,930, down 6 points
Market at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 36,418.65 +94.88 +0.26
S&P BSE SENSEX 50 11,492.37 +32.95 +0.29
S&P BSE SENSEX Next 50 31,234.10 +62.34 +0.20
S&P BSE 100 11,175.12 +30.65 +0.28
S&P BSE Bharat 22 Index 3,316.47 +17.84 +0.54

(Source: BSE)
IMF trims India's economic growth forecast to 7.3% in 2018, 7.5% in 2019

The International Monetary Fund (IMF) has trimmed India’s growth projection by 0.1 percentage point for 2018-19 owing to high oil prices and a tight monetary policy regime. The effect of the twin headwinds on the IMF's projection for 2019-20 was much sharper — 0.3 percentage points.

Now, the IMF has forecast India will grow by 7.3 per cent in 2018-19 against the earlier estimate of 7.4 per cent. The economy was projected to grow 7.8 per cent by 2019-20 by the Fund earlier, but now the projection stood at 7.5 per cent, according to the World Economic Outlook (WEO) Update, released on Monday. READ MORE
Top trading ideas by Anand Rathi Research: Buy Mindtree, Tata Elxsi

TARGET: 1130
Mindtree is forming higher tops and bottoms on the daily charts after having provided a breakout from a falling channel pattern. The momentum indicator MACD is also well in buy mode, hence we recommend buying this stock for the target of 1130 with a stop loss of 1040.
TARGET: 1475
TataElxsi seems to have completed its wave IV consolidation and now wave V up seems to have started. The momentum indicator too seems to have reversed from sell to buy on the hourly charts, hence we recommend buying TataElxsi. READ MORE

Nifty outlook from Prabhudas Lilladher for today

Nifty and Bank Nifty have got their daily trend turned down after 8 days bringing in weakness and pessimism amongst the market players. The near term support of 10980 was broken in Nifty, along with Bank Nifty too not participating, it is still tech sector outperforming. The support for the day is seen at 10870 while resistance is seen at 10980. The view is now cautious and corrective. READ MORE

Oil Prices

In commodities, Brent crude prices rose from a three-month low on Tuesday after more oil workers went on strike in Norway, supporting a market that has been dominated by oversupply issues in recent days.
Brent crude futures had climbed 36 cents, or 0.5 per cent, to $72.20 a barrel. They fell 4.6 per cent on Monday, at one point touching their lowest since mid-April. US West Texas Intermediate (WTI) futures were up 3 cents at $68.09. They fell 4.2 per cent on Monday.
SGX Nifty

The SGX Nifty was at 10,932, down 0.15 per cent from the previous close.
Asian Markets

Asian stocks sagged on Tuesday, weighed by a sharp decline in crude oil prices as Libyan ports reopened, while the dollar was on the defensive ahead of Federal Reserve Chairman Jerome Powell’s first congressional testimony.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.1 per cent lower following two sessions of gains. South Korea’s KOSPI lost 0.35 per cent and Japan’s Nikkei edged up 0.3 per cent.
Wall Street

The S&P 500 ended slightly lower on Monday following a drop in oil prices that weighed on energy shares and offset a jump in financials as Bank of America's results reinforced expectations of a strong US earnings season.

The Dow Jones Industrial Average rose 44.95 points, or 0.18 per cent, to 25,064.36, the S&P 500 lost 2.88 points, or 0.10 per cent, to 2,798.43 and the Nasdaq Composite dropped 20.26 points, or 0.26 per cent, to 7,805.72.
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