MARKET WRAP: Sensex ends 391 pts higher led by financials, IMD forecast

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The benchmark indices settled over 1 per cent higher on Friday after falling for two consecutive days, led by a rise in the financial stocks and a 'normal' monsoon forecast during August-September by the India Meteorological Department (IMD). They also rose taking cues from their Asian peers which inched higher following a tech-led rise on Wall Street.

The S&P BSE Sensex ended at 37,556, up 391 points while the broader Nifty50 index settled at 11,361, up 116 points.

Among sectoral indices, the Nifty Bank index rose 1.24 per cent led by a rise in the shares of Axis Bank, YES Bank and Punjab National Bank. The Nifty Fin Service index, too, settled 1.54 per cent higher led by Indiabulls Housing Finance and Edelweiss Financial Services.

MONSOON

Days after private weather forecasting agency, Skymet, predicted 'below normal' rains in the remaining two months of the southwest monsoon season 2018, state-run IMD contradicted it saying that rains in August and September would be 'normal' at 95 per cent of the Long Period Average (LPA).

MACRO DATA

India's services sector activity remained in the growth territory for the second consecutive month in July, as business activity witnessed the strongest growth since October 2016 amid improved demand conditions, says a monthly survey.

The seasonally adjusted Nikkei India Services Business Activity Index rose from 52.6 in June to 54.2 in July, as new businesses rose at the fastest rise since June 2017.

GLOBAL MARKETS

Asian stocks inched up on Friday following a tech-led rise on Wall Street, although the latest exchange of trade threats between Beijing and Washington capped gains and drove safe-haven flows to the dollar, which hovered near a two-week high.

Investors also remain cautious ahead of the July US jobs report due later on Friday, which will give a reading on the health of the world’s largest economy and possible clues about the pace of Federal Reserve interest rate rises.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.05 per cent. The index was down more than 0.6 per cent for the week on US-China trade tensions.

Japan's Nikkei added 0.25 per cent and South Korea's KOSPI was 0.45 per cent higher. Tech-heavy Taiwan stocks outperformed thanks to the gains on Wall Street, rising 0.7 per cent.

(With Reuters inputs)

3:44 PM IST Nifty Bank index settles 1.24%. Top gainers: COMPANY LATEST PREV CLOSE GAIN() GAIN(%) AXIS BANK 574.90 547.25 27.65 5.05 PUNJAB NATL.BANK 88.25 85.15 3.10 3.64 YES BANK 373.45 361.80 11.65 3.22 IDFC BANK 41.20 40.10 1.10 2.74 KOTAK MAH. BANK 1310.05 1280.20 29.85 2.33

3:41 PM IST Nifty sectoral gainers of the day

3:40 PM IST BSE Sensex: Axis Bank, YES Bank, ICICI Bank among top gainers of the day

3:32 PM IST Market at close   The S&P BSE Sensex ended at 37,556, up 391 points while the broader Nifty50 index settled at 11,361, up 116 points.

3:15 PM IST Emerging market flows rebound but second quarter inflow a tenth of first quarter: IIF Investors pumped $11.9 billion into emerging stocks and bonds in July, reversing some of June's hefty outflows, according to the Institute for International Finance (IIF).   The IIF, one of the most authoritative trackers of capital flows to and from the developing world, also said portfolio inflows to developing countries totalled just $11 billion in the second quarter, a tenth of the $118 billion received in Q1. READ MORE

3:03 PM IST Sebi in final stages of allowing futures trading in petrol and diesel Over 60,000 retail petrol pump and hundreds and thousands of small and big transporters, bulk users and diesel-consuming industries will soon be able to hedge the price risk in petrol and diesel, as Sebi is in final stages of allowing futures in these two commodities. READ MORE Petrol, Diesel futures

2:45 PM IST This stock in Rakesh Jhunjhunwala's portfolio zooms 200% in one year Shares of VIP Industries have moved higher by 10% to Rs 538 per share, also their record high on the BSE, after the company reported a strong 55% year on year (yoy) jump in its consolidated net profit at Rs 634 million in June quarter (Q1FY19). The company, which is engaged in manufacturing and marketing of luggage and bags, had a profit of Rs 410 million in the same quarter year ago. READ MORE

2:35 PM IST Gold hits one-year low, headed for fourth weekly loss Gold prices fell to their lowest in over a year on Friday amid a resilient US dollar and were headed for a fourth straight weekly loss. Spot gold was down 0.1 per cent at $1,206.05 an ounce, after earlier dropping to the lowest since July 2017 at $1,204.91. For the week, the precious metal was down about 1.4 per cent. US gold futures were 0.5 per cent lower at $1,214.10 an ounce on Friday. READ MORE Gold

2:19 PM IST Jet Airways nears 52-week low; stock skids 9% Shares of Jet Airways (India) have slipped 9% to Rs 302 per share on the BSE in intra-day trade after the media reports suggested that the airline will be unable to fly beyond 60 days unless cost-cutting measures including pay cuts are put in place. The stock was trading close to its 52-week low of Rs 297 touched on July 19, 2018 in intra-day trade. READ MORE

2:02 PM IST Market Check INDEX LATEST PREVIOUS CHANGE CHANGE(%) BSE SENSEX 37484.40 37165.16 319.24 0.86 BSE 500 15344.64 15219.82 124.82 0.82 BSE MID-CAP 16201.35 16057.60 143.75 0.90 BSE SMALL-CAP 16829.03 16639.81 189.22 1.14 S&P BSE LARGECAP 4401.12 4367.22 33.90 0.78 > More on BSE Indices

1:47 PM IST Q1 results: Power Grid offers value, despite tariff concerns, stock gains Even as Power Grid posted in-line performance for the June quarter (Q1), its stock gained a little over three per cent in the past two trading sessions despite the markets falling. All-round growth in Q1, improving visibility in the core power transmission business and, stock price correction of 20 per cent in the past two months that now factors in concerns over new tariff norms are all keeping analysts positive. READ MORE

1:31 PM IST Trade war effect? Japan beats China as world's second-biggest stock market China just lost its ranking as the world’s number two stock market. After a Thursday slump, Chinese equities were worth $6.09 trillion, according to data compiled by Bloomberg. That compares with $6.17 trillion in Japan. The US has the world’s largest stock market at just over $31 trillion. READ MORE

LIVE UPDATES

Nifty Bank index settles 1.24%. Top gainers:

COMPANY LATEST PREV CLOSE GAIN() GAIN(%)
AXIS BANK 574.90 547.25 27.65 5.05
PUNJAB NATL.BANK 88.25 85.15 3.10 3.64
YES BANK 373.45 361.80 11.65 3.22
IDFC BANK 41.20 40.10 1.10 2.74
KOTAK MAH. BANK 1310.05 1280.20 29.85 2.33

Nifty sectoral gainers of the day


BSE Sensex: Axis Bank, YES Bank, ICICI Bank among top gainers of the day


Market at close
 
The S&P BSE Sensex ended at 37,556, up 391 points while the broader Nifty50 index settled at 11,361, up 116 points.
Emerging market flows rebound but second quarter inflow a tenth of first quarter: IIF

Investors pumped $11.9 billion into emerging stocks and bonds in July, reversing some of June's hefty outflows, according to the Institute for International Finance (IIF).
 
The IIF, one of the most authoritative trackers of capital flows to and from the developing world, also said portfolio inflows to developing countries totalled just $11 billion in the second quarter, a tenth of the $118 billion received in Q1. READ MORE

Sebi in final stages of allowing futures trading in petrol and diesel

Over 60,000 retail petrol pump and hundreds and thousands of small and big transporters, bulk users and diesel-consuming industries will soon be able to hedge the price risk in petrol and diesel, as Sebi is in final stages of allowing futures in these two commodities. READ MORE
Petrol, Diesel futures

This stock in Rakesh Jhunjhunwala's portfolio zooms 200% in one year

Shares of VIP Industries have moved higher by 10% to Rs 538 per share, also their record high on the BSE, after the company reported a strong 55% year on year (yoy) jump in its consolidated net profit at Rs 634 million in June quarter (Q1FY19). The company, which is engaged in manufacturing and marketing of luggage and bags, had a profit of Rs 410 million in the same quarter year ago. READ MORE

Gold hits one-year low, headed for fourth weekly loss

Gold prices fell to their lowest in over a year on Friday amid a resilient US dollar and were headed for a fourth straight weekly loss.

Spot gold was down 0.1 per cent at $1,206.05 an ounce, after earlier dropping to the lowest since July 2017 at $1,204.91. For the week, the precious metal was down about 1.4 per cent. US gold futures were 0.5 per cent lower at $1,214.10 an ounce on Friday. READ MORE
Gold

Jet Airways nears 52-week low; stock skids 9%

Shares of Jet Airways (India) have slipped 9% to Rs 302 per share on the BSE in intra-day trade after the media reports suggested that the airline will be unable to fly beyond 60 days unless cost-cutting measures including pay cuts are put in place. The stock was trading close to its 52-week low of Rs 297 touched on July 19, 2018 in intra-day trade. READ MORE

Market Check

INDEX LATEST PREVIOUS CHANGE CHANGE(%)
BSE SENSEX 37484.40 37165.16 319.24 0.86
BSE 500 15344.64 15219.82 124.82 0.82
BSE MID-CAP 16201.35 16057.60 143.75 0.90
BSE SMALL-CAP 16829.03 16639.81 189.22 1.14
S&P BSE LARGECAP 4401.12 4367.22 33.90 0.78
> More on BSE Indices
Q1 results: Power Grid offers value, despite tariff concerns, stock gains

Even as Power Grid posted in-line performance for the June quarter (Q1), its stock gained a little over three per cent in the past two trading sessions despite the markets falling. All-round growth in Q1, improving visibility in the core power transmission business and, stock price correction of 20 per cent in the past two months that now factors in concerns over new tariff norms are all keeping analysts positive. READ MORE

Trade war effect? Japan beats China as world's second-biggest stock market

China just lost its ranking as the world’s number two stock market. After a Thursday slump, Chinese equities were worth $6.09 trillion, according to data compiled by Bloomberg. That compares with $6.17 trillion in Japan. The US has the world’s largest stock market at just over $31 trillion. READ MORE

Venky's India zooms 44% in two days after exclusion from ASM list

Shares of Venky’s India have surged 20% to Rs 3,240 per share on the BSE in early morning trade on Friday on back of heavy volumes. The stock zoomed 44% in past two trading sessions from Rs 2,250 after the company got excluded from the additional surveillance measures (ASM) list with effect from Thursday. READ MORE

MFs with exposure to RInfra stare at losses on downgrade of debt paper

Mutual fund (MF) schemes exposed to Reliance Infrastructure (RInfra) are staring at mark-to-market losses, following the downgrade of the debt paper of the Anil Ambani-led firm. Rating agencies have assigned a ‘D’ (default) status to RInfra’s debentures due to non-payment of debt obligations within the due date. READ MORE

Inflationary pressure weighs on Marico; sales up by 21%, net profit by 10%

Marico’s June quarter (Q1) numbers, announced on Thursday, were in line with analysts’ expectation. Sales and net profit grew 20.5 per cent over a year to Rs 20.3 billion and 10.3 per cent to Rs 2.6 billion, respectively. However, operating profit was a disappointment, amid high inflationary pressure. READ MORE

MONSOON WATCH India set to receive average rainfall in August-September: IMD

India is set to receive average rainfall during the last two months of the crucial monsoon season that stretches between June and September, the country's weather office said on Friday. READ MORE
Stocks of logistics firms in focus; TCI Express hits 52-week high

Shares of logistics companies were in focus and rallied by up to 8% on the BSE on expectations of impressive growth in the current financial year 2018-19. TCI Express, Sical Logistics, Patel Integrated Logistics, Allcargo Logistics, Transport Corporation of India and VRL Logistics were up in the range of 2% to 8% on the BSE. READ MORE

Markets at noon

INDEX LATEST PREVIOUS CHANGE CHANGE(%)
NIFTY 50 11309.80 11244.70 65.10 0.58
NIFTY 500 9649.20 9588.80 60.40 0.63
NIFTY MIDCAP 100 19054.65 18926.45 128.20 0.68
NIFTY SMALL 100 7544.10 7475.60 68.50 0.92
INDIA VIX 12.31 12.56 -0.25 -1.99
> More on NSE Indices
BS Special Inflation, twin deficits are concerns for India's growth momentum
 
Amid a closing of the output gap, inflationary risks prompted the Monetary Policy Committee (MPC) to hike the repo rate by 25 bps in the August 2018 policy review. The Committee expects GDP growth to improve from 6.7 per cent in FY2018 to 7.4 per cent in FY2019 and 7.5 per cent in Q1 FY2020. At the same time, its inflation projections forecast a rise from 4.6 per cent in Q2 FY2019 to 4.8 per cent for H2 FY2019 and 5.0 per cent in Q1 FY2020, despite the back-to-back rate hikes. READ MORE


Torrent Pharma rallies 8% on good Q1 results
 
Torrent Pharmaceuticals has rallied 8% to Rs 1,652, also its 52-week high on the BSE after the company reported a better-than-expected 37% year-on-year (YoY) growth in its consolidated revenues at Rs 18.72 billion in June quarter (Q1FY19). The company’s India business recorded 79% YoY growth and US business posted 23% YoY growth during the quarter.
 
“The company’s net profit during the quarter under review declined by 13.3% YoY at Rs 1.63 billion as against Rs 1.88 billion during the same period last year due to amortisation impact of branded business of Unichem Laboratories in Dec'2017 and lower foreign exchange gains,” Torrent Pharma said in a statement. READ MORE
Morgan Stanley sells most of its shares in Shriram City Union Finance
 
Morgan Stanley Asia (Singapore) has sold a majority of its shares in Shriram City Union Finance (SCUF) for an aggregate amount of Rs 2.53 billion, while East Bridge Capital Master Fund has increased its stake in the company by acquiring almost the same number of shares for around Rs 2.55 billion.    
 
According to bulk deal data from the National Stock Exchange, Morgan Stanley has sold 1.3 million shares at Rs 1922.25 per share, from its total 1.4 million equity shares in the company, which accounts to around 2.25 per cent of the shares. East Bridge Capital, which has around 2.5 million shares in the company (3.88 per cent), has acquired 1.33 million shares for Rs 1922.25 per share. READ MORE
Bank of Baroda: Reduction in credit costs, loan growth to boost earnings
 
The Bank of Baroda (BoB) stock, like those many public sector lenders, was under pressure after the bank posted losses in the March quarter. However, it has gained 30 per cent from early July on hope that the worst in terms of asset quality might be over for public sector banks (PSBs) and, importantly, its own good performance in the June 2018 quarter (Q1), reported last Friday.
 
With Q1 numbers showing asset quality improvement and pointing to better prospects, many analysts are positive on the bank.  READ MORE
L&T divests stake in L&T Tech to meet 25% minimum public shareholding
 
Larsen & Tourbo (L&T) on Thursday divested its stake in L&T Technology Services to comply with the 25 per cent minimum public shareholding requirement. The engineering giant is offering up to 6.6 million shares, representing 6.6 per cent stake, through the so-called offer for sale (OFS) route.
 
So far, the offering has garnered bids for 5.34 million shares from institutional investors. Retail bidding -- for those investing up to Rs 200,000 -- will take place on Friday. The base price for the share sale has been set at Rs 1,400 apiece. Most of the bids in the OFS have come at Rs 1,402. READ MORE
Services PMI expands for second consecutive month

The Indian service sector remained in expansion territory for the second consecutive month in July. Moreover, the latest upturns in business activity and new orders were the fastest since October 2016 and June 2017 respectively. Amid reports of improved demand conditions, business confidence towards the 12-month outlook picked up from June’s recent low. Subsequently, firms raised their staffing levels at the strongest pace since April. However, inflationary pressures remained marked during July.

The seasonally adjusted Nikkei India Services Business Activity Index posted above the neutral 50.0 threshold for the second consecutive month in July. Moreover, rising from 52.6 in June to 54.2, the latest reading signalled the strongest rate of output growth since October 2016. Favourable demand conditions were cited by panellists as the key factor behind the latest upturn. The headline seasonally adjusted Nikkei India Composite PMI Output Index rose from 53.3 in June to 54.1 in July, driven by output growth in both the manufacturing and service sectors. The latest rise in overall output was marked and the strongest seen since October 2016.
Mphasis gains 4% as board mulls share buyback proposal
 
Shares of information technology (IT) company Mphasis is trading 4% higher at Rs 1,225 on the BSE in early morning trade after the company said that its board will consider a share buyback proposal on Tuesday, August 7, 2018.
 
The stock was trading close to its record high of Rs 1,237 recorded on July 25, during intra-day trade. READ MORE
Q1FY19 earnings review Key takeaways from the top 10 sectors
 
The June 2018-quarter result season has been a mixed bag thus far. A recent study by Motilal Oswal of the 105 companies under their coverage suggest 62 per cent companies have posted profit after tax (PAT) and earnings before interest, tax, depreciation and amortisation (EBITDA) that are either in line with or above their estimates. For the 32 Nifty50 companies, this number stands at 69 per cent, the findings suggest. READ MORE
Market Check

INDEX LATEST PREVIOUS CHANGE CHANGE(%)
BSE SENSEX 37434.17 37165.16 269.01 0.72
BSE 500 15328.75 15219.82 108.93 0.72
BSE MID-CAP 16188.34 16057.60 130.74 0.81
BSE SMALL-CAP 16778.42 16639.81 138.61 0.83
S&P BSE LARGECAP 4397.19 4367.22 29.97 0.69
> More on BSE Indices
WEB EXCLUSIVE Pakistan is value investor's mkt; India a classic growth story: Chris Wood
 
Imran Khan – led Pakistan Tehreek-e-Insaf's (PTI) victory in the recently concluded general elections could see the country getting a bailout package from the International Monetary Fund (IMF), writes Christopher Wood, managing director, equity strategist at CLSA in his weekly note GREED & fear.
 
An IMF bailout however, Wood cautions, has political implications given Pakistan’s role in recent years as the major guinea pig, or laboratory experiment, for China’s 'Belt and Road Initiative'. READ MORE


Mutual funds load large-caps, reduce small-caps in first quarter
 
Expensive valuations and re-categorisation norms have led to churn in mutual fund (MF) holdings, with money flowing out of mid- and small-caps and moving into large-caps, an analysis of latest shareholding data shows. In the June quarter, MFs’ ownership of large-caps rose 120 basis points (bps) from the levels they held in the September quarter, before the market regulator issued a circular on re-categortisation.
 
Meanwhile, ownership levels in mid-caps inched up 90 bps, while that in small-caps reduced 10 bps. READ MORE HERE
Nifty sectoral trend


BSE Sensex heatmap


Market at open
 
At 9:15 AM, the S&P BSE Sensex was trading at 37,374, up 209 points while the broader Nifty50 was ruling at 11,305, up 60 points.
Markets at pre-open

Index Current Pt. Change % Change
 
S&P BSE SENSEX 37,349.71 +184.55 +0.50
 
S&P BSE SENSEX 50 11,772.03 -98.16 -0.83
 
S&P BSE SENSEX Next 50 33,598.59 -134.34 -0.40
 
S&P BSE 100 11,529.01 -88.68 -0.76
 
S&P BSE Bharat 22 Index 3,531.87 +3.23 +0.09

Derivatives strategy on by HDFC Securities:
 
Buy Manappuram Finance August 110
 
Call at Rs 5.50
Stop loss of Rs 3
Target at Rs 10
 
Rationale: We have seen Long positions being built in Manappuram Finance futures’ during the August series till now where we have seen 11% Rise in Open Interest with Price rise of 6%. 

Stock price has given breakout on the daily chart yesterday by closing above the previous resistance of 108 levels with higher volumes
Trading ideas by Prabhudas Lilladher:
 
BUY LUPIN
CMP: Rs 864.85
TARGET: Rs 940
STOP LOSS: Rs 810
 
The stock has formed a higher bottom formation at around 790 levels and has given a decent bounce to move past the significant 200 DMA and 50 DMA moving averages and has indicated strength and potential to rise further in the coming days. The chart looks attractive and is poised for an upward move with the indicators like MACD showing a trend reversal to signal a buy and the RSI on the rise. With good volume participation witnessed, we recommend a buy in this stock for an upside target of 940 keeping a stop loss of 810. 
   
Click here for more
Nifty outlook by Prabhudas Lilladher
 
The benchmark indices as we had mentioned being in an overbought zone, the market is witnessing profit booking. The near-term support of Nifty lies at 11,220-11,200, a decisive break of which would bring in a further correction to an extent. Support for the day is seen at 11,180 while resistance is seen at 311300. We suggest going light on trading positions as a word of caution. Pharma sector shows good up move hence we have a bullish bias on Sun Pharma, Auro Pharma, Lupin, etc.
Top trading ideas by Anand Rathi Research
 
MAX INDIA: BUY
TARGET: Rs 92.50
STOP LOSS: 82.50
 
The stock has started to form higher tops and higher bottoms with a buy crossover in its momentum indicator MACD. The stock has formed an impulsive pattern post which it corrected in a three wave declining structure and now next impulse seems to have started. 
 
Oil edges lower as supply concerns return
 
Oil prices edged lower on Friday after strong gains the previous day, easing on persistent supply concerns as Russia increased production in July and Saudi Arabia cut the price of crude for its Asian customers.
 
Brent crude futures were down 13 cents, or 0.2 percent at $73.32 a barrel, after rising 1.5 per cent on Thursday. US crude was off by 5 cents at $68.91, after gaining nearly 2 per cent in the previous session.
Apple hits $1 tn stock market valuation
 
Apple Inc became the first $1 trillion publicly listed US company on Thursday, crowning a decade-long rise fueled by its ubiquitous iPhone that transformed it from a niche player in personal computers into a global powerhouse spanning entertainment and communications.
 
The tech company's stock jumped 2.8 per cent to as high as $207.05, bringing its gain to about 9 per cent since Tuesday when it reported June-quarter results above expectations and said it bought back $20 billion of its own shares.


SGX Nifty
 
Trends on SGX Nifty indicate a positive opening for the broader index in India, a rise of 44.5 points or 0.39 per cent. Nifty futures were trading around 11,322-level on the Singaporean Exchange.
Asia stocks restrained, dollar at 2-week high as trade war saps confidence
 
Asian stocks were steady on Friday, with gains from the tech-led rise on Wall Street capped by the latest exchange of trade threats between Beijing and Washington, while safehaven flows lifted the dollar to a two-week high.
 
MSCI’s broadest index of Asia-Pacific shares outside Japan inched down 0.03 per cent. Japan's Nikkei added 0.25 per cent and South Korea's KOSPI edged up 0.32 per cent, drawing some support from overnight gains by US stocks.
S&P 500, Nasdaq rise as Apple hits $1 tn mark
 
Technology stocks pushed the S&P 500 and Nasdaq higher on Thursday, driven by Apple shares as the iPhone maker became the first publicly traded US company worth a trillion dollars.
 
The Dow Jones Industrial Average fell 7.66 points, or 0.03 per cent, to 25,326.16, the S&P 500 gained 13.86 points, or 0.49 per cent, to 2,827.22 and the Nasdaq Composite added 95.40 points, or 1.24 per cent, to 7,802.69.
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