MARKET WRAP: Indices trim losses to end flat, Nifty at 10,818; Pharma gains

The markets trimmed their day's losses and ended flat on Friday amid weakness in their Asian peers, that wobbled on Friday as investors braced for US tariffs against China.

The S&P BSE Sensex ended at 35,622, up 22 points while the broader Nifty50 index settled at 10,818, up 10 points.

Among sectoral indices, the Nifty Pharma index ended over 2% higher led by rise in the shares of Dr. Reddy's Laboratories, Cipla and Piramal Enterprises. The Nifty IT index too settled over 2% led by a rally in Infosys and Tata Consultancy Services (TCS).

TCS hit a new high of Rs 1,849 per share on the BSE during the day, after the IT major said that its board has approved a proposal of buyback upto 76.19 million equity shares at price of Rs 2,100 per share through tender offer. The stock eventually settled 2.75 per cent higher at Rs 1841.45 on the BSE.

US President Donald Trump has decided to impose "pretty significant" tariffs and will announce a list targeting $50 billion of Chinese goods on Friday, and a second wave of products worth $100 billion has been cued up. Beijing has warned that it was ready to respond.

The US Federal Reserve, on Thursday, had raised interest rates and took a more hawkish tone in forecasting a slightly faster pace of tightening for the rest of the year. 

Back home, India's trade deficit widened to four-month high of $14.62 billion in May as imports surged nearly 15 per cent, the government said Friday.

Commerce Minister Suresh Prabhu said exports in May rose by 28.18 per cent to $28.86 billion while imports were up 14.85 per cent to $43.48 billion.

Globally, the Asia Pacific MSCI index ex-Japan edged down 0.3 per cent and was set for a weekly loss of more than 1 per cent. 

Chinese stocks led the losses, with the benchmark Shanghai Composite index plumbing a 20-month low, as investors worried about the economic damage from the trade tensions with the US. Japan's Nikkei average closed up 0.5 per cent.

(with Reuters inputs)


MARKET COMMENT Jayant Manglik, President, Religare Broking

In yet another volatile trading session, the Indian equity benchmark indices ended Friday’s session on the flat note. Throughout the day, markets remained range bound and the Nifty index swung both ways touching intra-day high of 10,834 in first half and intra-day low of 10,755 in second half and finally ended flat at 10,818 levels.

BSE Midcap & Smallcap, underperformed the benchmark, to close with losses of 0.4% and 0.5%, respectively. Barring Healthcare and IT, which closed nearly 2% higher, selling pressure was witnessed among all the other sectorial indices.Capital Goods, Metals, Oil & Gas and Power remained the top losers. Amongst the global indices, both European and Asian markets traded on a mixed note.
We continue to remain cautious on the markets in the coming sessions. With lack of any fresh positive domestic triggers in the near term, volatility is likely to remain high with stock specific movement. Market participants will closely monitor global developments, especially in US, Europe and China. Any further correction should be considered as a good buying opportunity for investors in quality counters
Nifty IT index settled 2.14% higher. Top gainers:

INFOSYS 1281.65 1239.70 41.95 3.38
ORACLE FIN.SERV. 4140.00 4008.70 131.30 3.28
TCS 1844.90 1787.55 57.35 3.21
TECH MAHINDRA 709.60 698.80 10.80 1.55
MINDTREE 1003.15 992.75 10.40 1.05

Nifty Pharma index ended 2.24% higher. Top gainers:

CIPLA 612.00 588.05 23.95 4.07
DR REDDY'S LABS 2351.45 2269.40 82.05 3.62
PIRAMAL ENTERP. 2501.00 2427.40 73.60 3.03
SUN PHARMA.INDS. 572.00 559.25 12.75 2.28
BIOCON 625.30 614.35 10.95 1.78

Nifty sectoral gainers and losers of the day

BSE Sensex: Dr. Reddy's, Infosys, TCS among top gainers of the day. ONGC top loser.

Market at close
The S&P BSE Sensex ended at 35,622, up 22 points while the broader Nifty50 index settled at 10,818, up 10 points.
TCS hits new high as board approves share buyback at Rs 2100 per share

Shares of Tata Consultancy Services (TCS) hit a new high of Rs 1,849 per share, up 3% on the BSE after the company said its board approved a proposal of buyback upto 76.19 million equity shares at price of Rs 2,100 per share through tender offer. The stock surpassed its previous high of Rs 1,840 recorded on June 14, 2018. READ MORE

Tech start-up listing: NSE considers tweaking SME platform

The National Stock Exchange (NSE) is considering tweaking its Emerge platform, essentially meant for small-and medium-sized enterprises (SMEs), to facilitate the listing of technology (IT)start-ups.
According to Vikram Limaye, chief executive officer at the NSE, technology start-ups have their own set of requirements and attract a particular set of investors, which is the primary reason Emerge needs some changes to accommodate their needs. READ MORE

Manpasand Beverages put under ASM framework; stock falls 5%
Manpasand Beverages was locked in lower circuit of 5% at Rs 158 on the BSE after the exchange placed shares of the company under ASM (Additional Surveillance Measure) framework effective from today, June 15, 2018.
The BSE shifted Manpasand Beverages and Sai Baba Investment and Commercial Enterprises under enhanced surveillance measures where 100% margins will be applicable from June 16, 2018. READ MORE
Millionaires now control half of the world's personal wealth: Report

The rich are getting a lot richer and doing so a lot faster. Personal wealth around the globe reached $201.9 trillion last year, a 12 per cent gain from 2016 and the strongest annual pace in the past five years, Boston Consulting Group said in a report released Thursday. Booming equity markets swelled fortunes, and investors outside the U. S. got an exchange-rate bonus as most major currencies strengthened against the greenback. READ MORE

Why yen investors are worried about a future SoftBank without Masayoshi Son

Masayoshi Son is fond of talking about his 300-year vision for SoftBank Group Corp. but some Japanese bond investors are already pondering an earlier event -- what will the technology giant be like without its founder? READ MORE

Market Check

S&P BSE Sensex 35,480.20 -0.34%
Nifty 50 10,763.05 -0.42%
S&P BSE 200 4,667.14 -0.40%
Nifty 500 9,308.95 -0.51%
S&P BSE Mid-Cap 15,985.64 -0.50%
S&P BSE Small-Cap 16,953.06 -0.51%

Nifty Pharma index set to post biggest weekly rally in 15 years

Shares of pharmaceutical companies are on a roll with the Nifty Pharma index all set to post its biggest weekly gain in 15 years following the positive news flow from the corporate levels with regard to regulatory issues. READ MORE

Investing in IPOs can give good returns, but don't be too greedy

It’s often said that investing in an initial public offering (IPO) is fraught with risks. But, once in a while, there comes an Avenue Supermarts (D’mart) issue in which the investor can more than triple his money in less than a year. The stock was issued at Rs 299, listed at Rs 610 on March 21, 2017, and is currently trading at Rs 1,569. READ MORE

MUST READ HNIs selling stocks to buy real estate is risk for Indian mkts: Chris Wood

The possibility of high networth individuals (HNIs) in India selling their equity holding and investing in real estate is a key risk for the Indian markets, writes Christopher Wood, managing director, equity strategist at CLSA in his weekly note GREED & fear. He advises investors consider investing in real estate as an asset class. READ MORE

CLSA Managing Director & Equity Strategist Christopher Wood

Revival in volumes places Marico in a sweet spot; margins may see pressure

Despite a subdued performance by Marico in the March 2018 quarter (Q4) owing to high copra prices (a key input) and dismal volume growth, the stock is up 8 per cent since May 2, 2018.
What’s mainly making investors confident is an expected recovery in volumes. READ MORE

India's decision to deregulate bond prices a good move, say investors

Global fund managers are applauding a move by India to deregulate the prices of bonds sold by the country’s states, which could spur overseas interest in the $350 billion market even if there are short-term losses.

Securities sold by the nation’s 29 states will be valued at market prices, the Reserve Bank of India said at its policy meeting last week, discarding a long-standing rule that mandated adding a 25-basis point mark up over a sovereign bond with the same tenor. READ MORE

Gold discounts widest in 9-month as higher prices tempered retail purchases

Gold discounts in India were at their widest in nine months this week as higher domestic prices tempered retail purchases, while buying in other Asian centres remained subdued amid a lack of significant momentum in global prices.
Dealers in India were offering a discount of up to $7.50 an ounce over official domestic prices this week, the highest since September 9. This compared with discounts of $5 last week. The domestic price includes a 10 percent import tax. READ MORE

Sebi mulls capping tenure of stock exchange CEOs to maximum two 5-yr terms

Regulator Sebi is considering capping tenure of stock exchange CEOs to maximum two terms of five years each, as part of an overhaul of regulations for ownership and governance norms for market infrastructure institutions. READ MORE

Market at Noon

S&P BSE Sensex 35,617.27 0.05%
Nifty 50 10,815.90 0.07%
S&P BSE 200 4,688.63 0.06%
Nifty 500 9,362.50 0.06%
S&P BSE Mid-Cap 16,082.57 0.11%
S&P BSE Small-Cap 17,069.11 0.17%

Reliance Industries, Bajaj Finance, Jubilant FoodWorks hit new highs
Shares of Reliance Industries, Bajaj Finance, United Breweries, Page Industries, Jubilant FoodWorks and Sundram Fasteners from the S&P BSE500 index hit their respective new highs in intra-day trade in otherwise subdued market.
Thus far in the current calendar year 2018 (CY18), all these stocks have outperformed the market by gaining by upto 54%, as compared to 4.6% rise in the S&P BSE Sensex. READ MORE
Reliance Mutual Fund plans to hit the market with a new fund offering
Reliance Mutual Fund plans to hit the market with a new fund offering, Reliance Nivesh Lakshya Fund, to predominantly invest in long-dated government securities.
The fund will have a maturity of 25-30 years to begin with and most of the securities would be bought and held till maturity. Incremental investments will be made in similar securities. READ MORE
Street still bets big on DMart; store expansion, new format growth triggers
Avenue Supermarts’ stock recently hit its all-time high levels, and in the process crossed the $14.75-billion mark (Rs 1 trillion) in this week’s trade. The stock, which has already become a multi-bagger, up five-fold, from its IPO price, has gained about 42 per cent from the start of the year.
The re-rating of some of the consumer names over the past couple of quarters, coupled with the fact that the stock is now part of MSCI, has added to the lure. READ MORE
Volume Toppers

VAKRANGEE 41.20 -2.15 -4.96 3617385
REL. COMM. 15.95 0.05 0.31 1307759
INDBULL.REALEST. 172.50 1.70 1.00 1243622
H F C L 33.50 0.15 0.45 1140093
KWALITY 30.35 0.40 1.34 1122247
» More on Most Active Volume
Rupee hits 3-week low, slips 36 paise to 67.98 against dollar

The rupee plunged by 36 paise to hit a three-week low of 67.98 against the US dollar in early trade today following strong demand for the greenback amid sustained foreign capital outflows.
Besides, the dollar strengthening against other currencies overseas as the European Central Bank (ECB) pledged to leave interest rates unchanged until mid-2019, weighed on the rupee, traders said. READ MORE

Dr Reddy's gains 3% on USFDA nod for launch of generic version of Suboxone

Shares of Dr Reddy’s Laboratories were up 3% at Rs 2,346 per share on the BSE after the company announced today that it has received final approval from the US Food and Drug Administration (USFDA) for the launch of Buprenorphine and Naloxone sublingual film in the US market. READ MORE

RBI to give relief to foreign portfolio investors on some of new norms

The Reserve Bank of India (RBI) is planning to provide relief to foreign portfolio investors (FPIs) on some of the new norms proposed in its April 27 circular. As per the new norms, an FPI cannot invest more than 20 per cent of its portfolio in papers that have maturity below one year.
In this regard, the central bank is considering grandfathering of existing investment since the law has currently been applied retrospectively. Grandfathering refers to a practice in which old rules continue to apply till the date a new clause has been introduced. READ MORE

Market Check

S&P BSE Sensex 35,583.29 -0.05%
Nifty 50 10,813.85 0.05%
S&P BSE 200 4,685.24 -0.01%
Nifty 500 9,365.00 0.09%
S&P BSE Mid-Cap 16,076.98 0.07%
S&P BSE Small-Cap 17,078.96 0.23%

New packages from RJio indicate pricing war is set to continue in FY19
Investors banking on a recovery in the telecom sector in FY19 will have to wait a bit longer given that the intensity of pricing war just got worse. After introducing attractive post-paid plans to get premium customers from incumbents, Reliance Jio (Jio) launched new plans to maintain its competitive lead.
Jio recently doubled its data offerings to 3 gigabytes (GB) per day on plans ranging from Rs 149 to Rs 449. READ MORE
Sebi may propose removal of shareholding cap for setting up new bourses

The Securities and Exchange Board of India (Sebi) is considering liberalising rules for starting stock exchanges and depositories. According to sources, the market regulator is likely to propose removal of the shareholding cap for setting up stock exchanges and other market infrastructure intermediaries such as depositories.
At present, other stock exchanges, depositories and banks are permitted to hold up to 15 per cent of the share capital in stock exchanges and depositories. Other investors are only allowed to hold up to 5 per cent. READ MORE

Sectoral Trend

BSE Sensex heatmap

Market at open
At 9:16 AM, the S&P BSE Sensex was trading at 35,534, down 66 points while the broader Nifty50 was ruling at 10,790, down 18 points.
Markets at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 35,688.00 +88.18 +0.25
S&P BSE SENSEX 50 11,359.65 +40.53 +0.36
S&P BSE SENSEX Next 50 33,145.57 +30.50 +0.09
S&P BSE 100 11,162.04 +35.42 +0.32
S&P BSE Bharat 22 Index 3,514.62 +2.20 +0.06

(Source: BSE)
Derivative strategy on Tata Elxsi by HDFC Securities

Buy TATA ELXSI June 1300 Call at Rs 33
Stop loss of Rs 24
Target Rs 50
Rationale: We have seen Long positions being built in Tata Elxsi futures today where we have seen Rise in Open Interest with Price rise of 1%.
During this week, Stock price has broken out from multiple top resistances placed at 1250 odd levels to close at all time high level with rise in Volumes.
Short term moving averages are trading above long term moving averages Indicating bullish trend for the short to medium term.
Momentum Indicators and Oscillators are Indicating strength in the stock for the short to medium term.

Support for Nifty seen at 10,750, resistance at 10,860: Prabhudas Lilladher

Nifty witnessed some profit booking near the resistance of 10,900 levels and the chances of some more downward movement cannot be ruled out. Nifty has got the major support at around 10,680-10,700 levels which if broken can see further correction in the coming days. However, the support for the day is seen at 10,750 while the resistance is seen at 10,860. READ MORE

Today's picks: From Indian Oil to Asian Paints, hot stocks to watch today

Indian Oil
Current price: Rs172 
Target price: Rs168 
Keep a stop at Rs174 and go short. Add to the position between Rs169 and Rs170. Book profits at Rs168.

Asian Paints
Current price: Rs1,286 
Target price: Rs1,310
Keep a stop at Rs1,275 and go long. Add to the position between Rs1,300 and Rs1,305. Book profits at Rs1,310. READ MORE
Commodity outlook and top trading ideas by Tradebulls

Gold has gone to sleep since the middle of May. The precious metal’s rise in weigh down by rise in US Dollar and the prospect of rate hike from FED. The trading range is becoming narrower and narrower. Now that the event is unfold, we expect gold to rise above this trading range. As stated previously, gold has solid support at $1275-$1280. Short term resistance is at $1326 which we expect gold to test very soon. Trade issues and European debt issues are supportive for Gold. One of the interesting points is the pessimism seen in gold speculators. They have constantly cutting back their long position making this six out of seven last week that speculative long positions have dropped. Commercial category has covered more than 30,000 contracts of short position despite no real price action in gold. So we are looking at minimum short term bottom in gold. READ MORE

SGX Nifty

The SGX Nifty was at 10,778, down 0.34 per cent from the previous close.
Markets on Thursday

S&P BSE Sensex 35,599.82 -0.39%
Nifty 50 10,808.05 -0.45%
S&P BSE 200 4,685.93 -0.30%
Nifty 500 9,356.65 -0.32%
S&P BSE Mid-Cap 16,065.38 -0.08%
S&P BSE Small-Cap 17,040.06 0.07%

Asian Markets

Asian shares wobbled on Friday as investors braced for US tariffs against China, while the euro flirted with two-week lows after a cautious European Central Bank indicated it would not raise interest rates for some time.

The Asia Pacific MSCI index edged down 0.2 per cent, with most regional markets shrugging off a strong close on Wall Street. But Japan’s Nikkei average added 0.5 per cent.
Wall Street

The S&P 500 edged up and the Nasdaq reached another record closing high on Thursday after the European Central Bank said it would avoid raising interest rates until mid-2019, and data showed US economic strength.

The Dow Jones Industrial Average fell 25.89 points, or 0.1 per cent, to 25,175.31, the S&P 500 gained 6.86 points, or 0.25 per cent, to 2,782.49 and the Nasdaq Composite added 65.34 points, or 0.85 per cent, to 7,761.04.
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