Stock Market Highlights: Indian equity indices, Sensex and Nifty erased the day's gains to end flat Tuesday dragged by selling banking and FMCG stocks. Broader markets were mixed with the midcap index flat while smallcap index up 0.5 percent. Among sectors, gains were seen in Nifty Auto, Nifty IT and Nifty Metal indices, while bank, FMCG, realty and financial services ended in the red.
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Ajit Mishra, VP - Research, Religare Broking
Markets retested the record high and settled marginally in the green as participants preferred to book some profit off the table. Though the index has not made any meaningful progress in this month so far, the bias is still positive. It’s difficult to make any sustainable move without banking, which is still trading sluggish. We may see further choppiness ahead due to scheduled derivatives expiry and mixed global cues. Meanwhile, traders should continue to use intermediate dips to buy quality names while keeping a check on leveraged trades.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty after recovering from the lows over the past two trading sessions, reversed course and lost the intra day gains on June 22. After opening gap up, the Nifty ran into resistance at around the 15,900 level once again and later filled the morning upgap. 15,690-15,895 could be the band for the Nifty over the next few sessions even as stock specific moves (amongst a lesser number of stocks) continue.
Manish Shah, Founder, www.Niftytriggers.com
Nifty closed the day with marginal gains for the day. Nifty takes a pause after yesterday’s sharp recovery. With two days to go till June expiry, the moot point is Nifty will trade beyond 15,900 and will it be able to cross the psychological 16,000 barrier. The pattern for the day was a star and reflects indecision in the market. Usually, after strong rally markets do take a pause before continuing higher. Most likely in the next two days, Nifty may not be able to move beyond 16,100 as the momentum is lost. Nifty has multiple support at 15,650-15,610. Any drop to this area should be used to buy Nifty for a rally back up to 16,000. We expect a contraction of volatility as Nifty in the next two days. Undercurrent is strong and eventually Nifty should move to 16,200-16,300 as we enter July expiry. Remain steadfast on the long side as trend following oscillators should ongoing uptrend is still alive.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The markets got a wee bit nervous at the 15,900 level and corrected from there but the trend continues to remain positive. With strong support at 15,400, the Nifty seems to be headed to 16,000-16,100. Dips can be utilized to accumulate long positions for higher targets.
Rupee At Close | The Indian rupee ended near the day’s low at 74.36 amid volatility in the domestic equity market. The local currency opened marginally lower at 74.16 per dollar against the previous close of 74.10 and traded in the range of 74.05-74.40.
Market At Close | Market fails to hold opening gains as banks & RIL slip; Sensex slips from intra-day record high of 53,057 to close near flatline.
Market At Close | Here are the highlights of today's trading session
- Market Fails To Hold Opening Gains As Banks & RIL Slip
- Sensex Slips From Intra-day Record High Of 53,057 To Close Near Flatline
- Nifty Banks Falls More Than 530 Pts From Highs; All Constituents Lower
- Sensex Ends 32 Points Lower At 52,542 & Nifty 26 Pts Higher At 15,773
- Nifty Bank Slips 126 Points To 34,745 & Midcap Index 28 Pts To 26,733
- Market Breadth Remains In Favour Of Advances; Advance-Decline Ratio At 3:2
- Auto Stocks Gain On An Expectation Of Pent-up Demand, Maruti Up Over 5%
- Cement Names Gain In Trade As Well; Shree Cement Up 3%, UltraTech Up 1%
- Asian Paints, Bajaj Fin, Nestle, HUL, Kotak Bank Top Nifty Losers
- JK Paper Up 15% On Strong Q4 & Maithan Alloys 10% On Higher Silico Manganese Price
- PNB Housing Closes At An Upper Circuity Ahead Of The EGM For Carlyle Deal
- Jet Airways Moves 5% Higher After NCLT Approves Its Resolution
Closing Bell | The Indian equity benchmark indices slipped from record-high levels to end flat on Tuesday as gains in auto and IT stocks were capped by losses in banking, financials and FMCG counterparts. The Sensex ended 14.25 points, or 0.03 percent higher at 52,588.71, while the Nifty gained 26.25 points, or 0.17 percent to close at 15,772.75. Broader markets were mixed with the midcap index flat while smallcap index up 0.5 percent.
Among sectors, gains were seen in Nifty Auto, Nifty IT and Nifty Metal indices, while bank, FMCG, realty and financial services ended in the red. On the Nifty50 index, Maruti Suzuki, UPL, Shree Cement, Wipro and SBI Life were the top gainers while Asian Paints, Bajaj Finance, Nestle India, HUL and IndusInd Bank led the losses.
Emkay Global on NTPC
We assume coverage on NTPC with a Buy rating and a TP of Rs 179, based on SoTP. We estimate RoE in FY21-FY24 to be ~12.5% - 200 bps higher than the last 5-year average. We believe that improving RoE profile is one of the most important factors for re-rating in Utilities. We also note that EPS CAGR in FY21-FY24E stands at 8%.
Avanti Feeds Q4FY21 | The company's net profit fell 20 percent to Rs 69.7 crore, while revenue rose 6 percent to Rs 1,098 crore, YoY.
Yash Gupta Equity Research Associate, Angel Broking
Dr Reddy’s Laboratories Ltd. along with its subsidiaries together announced the launch of Icosapent Ethyl Capsules, 1 gram approved by the US Food and Drug Administration (USFDA). This is another very good launch for the company. Dr.Reddy’s continuous focus on the export markets is resulting in a good number of launches in the financial year 2021. We expect this launch momentum to continue for the year. We have a positive outlook for the company.
Government plans to set up bad bank structure by June 30
The Narendra Modi government is planning to set up a 'Bad Bank' structure by June 30, according to people in the know. This was first announced in the Union Budget but there is no formality on the announcement yet. CNBC-TV18 has picked from sources close to the matter that the plan is to set up the National Asset Reconstruction Company Ltd (NARCL) which has already been spoken about a lot along with the India Debt Management Company. Read full report here.
Market cap of Indian cos’ grew fastest last year; SBI flags financial stability risk
Indian companies' market capitalisation has grown at the fastest pace last year among major economies despite contraction in GDP, economists from SBI said, flagging the risks to financial stability it poses. Further, retail investors have shown higher interest in markets and their numbers have increased by 1.42 crore in FY21 and another 44 lakh in April and May, they said in a note, wondering if this will be a lasting behavioural change or is transitory. Read here.
Maruti Suzuki prepared for a big transition, believes Bernstein; maintains Outperform call
Maruti Suzuki India, the largest passenger car manufacturer in the country, is prepared for a new product cycle and is likely to undergo a big transition, believes brokerage firm Bernstein. It has maintained an Outperform rating on the stock with a target price of Rs 7,950 per share. Maruti Suzuki is on a verge of the new product cycle and while other companies are just looking to refresh their old models, Maruti has got a healthy pipeline of new products and they are going to reposition themselves in a big way, the brokerage said in a report. Bernstein believes this is a “once-in-a-decade kind of a transition” which will happen as far as Maruti is concerned. It also believes that Maruti Suzuki will focus on three key strategies – to launch a lot of SUVs, to focus on hybrid models and reintroduction of some diesel vehicles as well. Watch here.
MPC likely to be cautious on normalization, fine to wait and watch: Citi
The June 4 monetary policy said that the Reserve Bank of India (RBI) is going to stay accommodative as long as it takes to revive and sustain economic recovery. Then June 14 consumer price index (CPI) number came in at 6.3 percent and then there were minutes of the monetary policy meeting on June 18 where three members said that they are accommodative because inflation is within the tolerance band of 6 percent. However, the expectation is that it will go to 7 percent sometime in June, July and August before it tapers off. All this puts both monetary policy bond dealers and forex dealers in a bit of a tizzy. Read here.
US Federal Reserve may hike interest rates in 2023, says Vaibhav Sanghavi of Avendus Capital
Vaibhav Sanghavi, Co-CEO at Avendus Capital Alternate Strategies expects US Federal Reserve to hike rates in 2023. In its Federal Open Market Committee Meeting last Wednesday, The Federal Reserve signalled it may increase interest rates sooner than previously thought amid a strong growth rebound in the US economy and rising concerns over inflation. Talking to CNBC-TV18 Sanghavi said, “In spite of so-called ‘hawkish’ Fed, clearly it seems that 2023 rate hikes are something which it suggests. In that scenario, earlier markets started kind of rallying, the narrative was that there is easy liquidity and a huge amount of quantitative easing program and the interest rates fell over because of which the risk kind of goes down in owing equities and equities had a valuation premium.” Read here.
Bitcoin recoups some losses in Asia after plunging on Chinese crackdown
Bitcoin regained some ground on Tuesday, a day after touching a two-week low when China's central bank reaffirmed a crackdown on cryptocurrencies and restricted trading channels for Chinese residents. The world's largest cryptocurrency was last up 3 percent at $32,600, having dropped more than 10 percent on Monday. Ether, the second-biggest cryptocurrency, was up 2.8 percent at $1,940 after hitting a five-week low the day before.
Dollar pauses ahead of Fed testimony, cryptocurrencies attempt recovery
The dollar paused for breath on Tuesday as traders looked to testimony from Federal Reserve Chair Jerome Powell for further guidance on the recent surprise shift in the central bank's policy outlook, while support crept back for cryptocurrencies, Reuters reported. The greenback had gained sharply since the Fed last week flagged sooner-than-expected interest rate hikes, although it dipped on Monday to hand back a little bit of that rise. Against the euro, the dollar nursed an overnight loss of about 0.4% to steady around $1.1909. It crept higher to 110.42 yen, while the dollar index was flat at 91.965 after a loss of about 0.5% on Monday.
Emkay Global on IndusInd Bank
IndusInd scripted a major turnaround 1.0 since 2009/10, but faltered lately with higher corporate NPAs/deposit scare. The bank has largely rectified its past mistakes, built prudent capital/provisioning buffers and is preparing to build sustainable & digitally agile retail bank, delivering yesteryear's superior RoA trajectory of 1.7-1.9% over FY23/24E. IIB assured that risk/governance standards have been strengthened while promoter interference has been virtually NIL, and its recent capital subscription at a premium should provide investor comfort.
We believe a resurgent IndusInd with higher retail orientation/risk guards in place should deliver sustainably higher return ratios, providing a good turnaround story to play on. Retain Buy with a TP of Rs 1,375 vs. Rs 1,175 earlier.
Market Watch: Ajit Mishra of Religare Broking
- Buy HDFC Bank with a stop loss of Rs 1,470 and a target of Rs 1,560
- Buy UltraTech Cement with a stop loss of Rs 6,800 and a target of Rs 7,100
Consumption an evergreen story; prefer HUL, Titan, Pidilite: MOFSL
Stock prices are running ahead of fundamentals and there’s a need to be very stock-specific when buying from broader markets, said Gautam Duggad, head-research, institutional equities at Motilal Oswal Financial Services, in an interview with CNBC-TV18. According to him, investors should bet on stocks such as ICICI Bank, Axis Bank and SBI. “Largecap names in banking and NBFCs will continue to do well,” he further added. Consumption in India is also an evergreen story, he added. He said, “Consumption in India remains an evergreen story. Nothing has changed over there. Our picks in that basket have also not changed over the last 4-5 years; what we like, by and large, remains the same – the likes of Hindustan Unilever, Titan, Pidilite, Britannia and Tata Consumer.” Watch here.