Stock Market Highlights: The Indian equity indices, Sensex and Nifty ended Friday's volatile session higher led by gains in banking and financial stocks. Broader markets, smallcap and midcap indices ended mixed. Among sectors, gains were seen in banks, realty, FMCG, IT and financial services indices, while Nifty Media and Nifty Auto ended in the red. Zomato ended with over 64 percent premium to its offer price after making a stellar debut on Dalal Street.
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Here are the highlights of market performance this week
- Sensex Slips 0.3%, Nifty 0.4%, Nifty Bank 2% & Midcap Index 1% This Week
- Nifty IT Is The Top Gaining Index, With A Move Of Nearly 2%
- Auto & PSU Bank Amongst Top Losing Indices This Week
- Bajaj Finserv, Wipro, Asian Paints, BPCL & Nestle Top Nifty Gainers
- IndusInd, HDFC Bank, Tata Motors, HDFC Life & Hindalco Top Nifty Losers
Joseph Thomas, Head of Research, Emkay Wealth Management
The markets today witnessed a bumper listing of one of the most awaited IPOs in recent history, Zomato. The exuberance though was not broad-based, the market breadth remained negative for the day. The weekly trend too remained marginally negative as all the major market cap based broader indices closed marginally in the negative for the week. The strong show of IT stocks continued whereas slippages in reported asset quality and expectations of rising NPA risks dragged down the banking stocks. The expected rise in NPAs may have broader market implications as it exposes the pandemic-caused vulnerability of both households as well as corporate balance sheets. Over the coming week, the focus would continue to be on the corporate earnings, as the market participants try to gauge the sustainability of the earnings upgrades seen during the last couple of earning seasons. Another factor to watch is the rise in the delta variant cases in the US as also in certain parts of Europe.
Ajit Mishra, VP - Research, Religare Broking
Markets traded volatile and ended marginally in the green amid mixed global cues. In the first half, the benchmark hovered in a range however healthy buying in banking, FMCG and realty aided markets to inch gradually higher as the session progressed. Markets will first react to results of two index majors viz. Reliance Industries and ICICI Bank on Monday i.e. 26th July. Besides, participants will be closely eyeing the global markets for cues. As we’re again trading closer to the upper band of the prevailing consolidation range i.e. 15,900 zone, we reiterate our view to limit naked leveraged positions and wait for a decisive signal from the index.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short term uptrend of the Nifty remains intact. There is a possibility of further consolidation or minor downward correction from the highs in early next week. A sustainable move above 15,900 could open the next upside towards 16,100 levels in the short term. Any weakness could find support at 15,750 levels.
Markets This Week | Bajaj Finserv, Wipro, Asian Paints, BPCL & Nestle top Nifty gainers.
Anindya Banerjee, DVP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities
After two weeks of low volatility, USDINR saw some decent two-way moves. Prices oscillated between 74.35 and 75.10 levels. However, the month-old range between 74.20 to 75.10 remains intact. The reason being RBI remains a major buyer of US Dollars at lower levels and corporate $ flows and FDI inflows are capping the upside. The end result is a range of 1%. Next week prices may continue in the current range as long as RBI remains a major buyer of US Dollars. US central bank meeting on Wednesday is not expected to deliver any new information and hence would keep USDINR within 74.20 and 75.00 range. IPO-related FPI flows may pick up over the next week.
Manish Shah, Founder, Niftytriggers.com
Nifty remains in a range between 15,600 on the lower side to 15,950 on the higher side. The volatility contraction is taking longer than normal. The contraction in volatility cannot be a permanent feature. Sooner or later market should show a directional movement. The pattern for the week is a normal ranged candle. With a longish lower shadow. The tilt is definitely on the bullish side. With international markets supporting the move we could see Nifty showing some positive moves on a break above 15,950. Nifty has tested the resistance At 15,950-15,900 thrice. The general rule is that price should see a breach the fourth time. On the daily Nifty has taken a pause at gap resistance at 15,880-15,840. A close above 15,880 will be the first sign that the gap area is closed and the markets could move higher. Next week is the last week of July expiry. Traders could consider betting that Nifty would trade beyond 16,200-16,300 going into the August expiry.
Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services
The event risk to the fx market is next week’s FOMC policy. So the USDINR spot will remain a little directionless until then as with the rising covid cases in the US, the Fed may communicate a dovish stance. However, any hawkish commentary or hints at tapering the asset purchase program will surge the USDINR spot above the 75 zone. Thus, for next week, we expect the trend to be sideways in between 74-75.25.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research
The market witnessed a swift recovery after the initial fall, 15,800 will be an important support level in the short-term perspective. If the market breaches the level of 15,900 and is able to sustain above this level, the market expects to gain momentum, leading to an upside projection of 16,200 levels. the momentum indicators like RSI and MACD to stay positive and market breadth to improve, further strengthening a short-term bullish outlook.
Markets At Close | Midcap index rises 47 points to 27,585; market breadth favours declines
Rupee At Close | The Indian rupee ended higher at 74.40 per dollar amid buying in the domestic equity market. The local unit opened 7 paise lower at 74.53 per dollar against the previous close of 74.46 and traded in the range of 74.37-74.57.
Market At Close | Here are the highlights of today’s trading session
- Financials Help Market Close In The Green, Led By ICICI Bank
- Nifty Rises 32 Points To 15,856 & Sensex 139 Points To 52,976
- Nifty Bank Rises 357 Points To 35,034 with ICICI Bank Contributing 279 Points
- Midcap Index Rises 47 Points To 27,585; Market Breadth Favours Declines
- ICICI Bank & ITC Top Nifty Gainers Ahead Of Q1 Earnings; Both Stock Up 3% Each
- IT Stocks Continue The Gaining Momentum; Wipro & HCL Tech Top Gainers
- Mphasis Moves 5% Higher After A Strong Set Of Earnings For Q1
- Jubilant Food Extends Thursday’s Gains; Stock Up Nearly 15% This Week
- Vodafone Idea Slips While Bharti Airtel Rises After SC Dismisses Plea On AGR Recomputation
- Zomato Makes A Strong Debut, Closes With premium Of 66% To The Issue Price Of Rs 76/Sh
- Zomato’s Market Cap At Rs 1 Lakh Cr, Higher Than 12 Nifty Companies
- Zomato’s Mkt Cap Surges Ahead Of Tata Motors, Tata Cons, Britannia & IndusInd Bank
Closing Bell | The Indian equity benchmark indices ended Friday's volatile session higher led by gains in banking and financial stocks. The Sensex gained 138.59 points, or 0.26 percent, to end at 52,975.80, while the Nifty closed 32.00 points, or 0.20 percent, higher at 15,856.05. Broader markets ended mixed as the smallcap index fell, while the midcap index closed higher.
Among sectors, gains were seen in banks, realty, FMCG, IT and financial services indices, while Nifty Media and Nifty Auto ended in the red. ICICI Bank, ITC, Wipro, SBI Life Insurance and Tata Consumer Products were the top Nifty50 gainers, while Tata Motors, Grasim Industries, Adani Ports & SEZ, L&T and UPL were the top losers.
Resilient dollar puts gold on track for weekly dip
Gold traded in a narrow range on Friday as a stronger dollar dimmed bullion's appeal and put it on course for its first weekly decline in five, with investors looking to the US Federal Reserve's next meeting for policy cues. Spot gold fell 0.2 percent to $1,803.66 an ounce. US gold futures were flat at $1,805.30. Bullion is down 0.2 percent this week after hitting its lowest in more than a week on Thursday.
Are Zomato shares overpriced? Valuation guru Aswath Damodaran pegs it at Rs 41
Zomato was listed on the National Stock Exchange today after the allotment of shares was finalised post the stellar IPO. The shares of the company opened at Rs 116, a 52.63 per cent premium over its final offer price of Rs 76, mostly due to huge demand from investors. The company’s IPO was subscribed to over 38 times. The market capitalisation of the company crossed Rs one lakh crore mark, as it stood at Rs 1,08,067.35 crore. The start-up saw the biggest IPO ever in Indian markets. But as the price reached a high of Rs 138.90, almost double the offer price, many investors wondered whether the company was worth it. Academician Aswath Damodaran said that the shares are currently overpriced and are “worth Rs 41”. Damodaran calculated the share price based on the valuation of the company and its underlying business model. “With my upbeat story of growth and profitability, the value that I derive for equity is close to Rs 394 billion (about $5.25 billion), translating into a value per share of Rs 41.” Read here.
HDFC Securities on Bajaj Auto
While Bajaj Auto’s Q1FY22 margin was below our estimate due to reduced operating leverage, we expect margins to improve from here on as domestic volumes increase. Further, Bajaj will benefit from its presence in the overseas markets, which account for ~50% of volumes. The company is working on future technologies and forming a 100% subsidiary to address electric mobility. Further, it has extensive tie-ups with international majors like KTM & Triumph and inhouse R&D capabilities. We maintain Buy with a target price of Rs 4,575 (at 20x Jun-23E EPS) as we are confident on its product development capabilities across technologies (ICE, CNG and EVs) and diverse presence in the 2Ws and 3Ws space. However, we are reducing our estimates for FY22-24E by ~7% to factor in the Q1FY22 results.
Atul Q1FY22 | The company’s net profit rose 40.8 percent to Rs 165.9 crore from Rs 117.8 crore, while revenue jumped 63.5 percent to Rs 1,080.2 crore from Rs 660.6 crore, YoY. EBITDA increased 48.8 percent to Rs 236.2 crore from Rs 158.7 crore and EBITDA margin declined to 21.9 percent from 24 percent, YoY.
CLSA on UltraTech Cement
UltraTech’s 1Q Ebitda of Rs 33 billion was above our estimate on lower costs, while revenue was in line. With spot fuel prices being much higher than the 1Q consumption rate, we expect profitability to taper down. The ongoing 19 mt capacity addition is on track and UltraTech Cement is likely to turn net cash positive by FY24CL. While we forecast a strong growth trajectory, and we see risk-reward as fair at its current valuation. We maintain an Outperform rating but lift our target price from Rs 7,735 to Rs 8,000.
Zomato shares jump more than 80% on market debut
The share price of food delivery company Zomato rose after the company made a strong market debut at a premium of more than 50 percent to its issue price on Friday. Soon after the listing, the stock price rallied further and touched a high of Rs 138 on the BSE, 80 percent higher than the issue price. This led to its market cap crossing Rs 1 lakh crore. Read here.
Sajai Singh, Partner, J Sagar Associates
RBI is moving in the right direction with regard to digital currencies. Any RBI backed digital currency will come with a promise of less volatility and greater security for the bearer of the same. This will be very different from cryptocurrencies, like Bitcoin and Ethereum, which are rather popular but carry innumerable risks. Also, RBI’s support to a digital currency will ensure its financial stability. It will be similar to say a potential digital Euro and digital Yuan.
Crompton Greaves Consumer Electricals Q1FY22 | The company’s net profit rose 26.7 percent to Rs 94.8 crore from Rs 74.8 crore, while revenue jumped 45.9 percent to Rs 1,050.5 crore from Rs 720.1 crore, YoY. EBITDA increased 23.6 percent to Rs 125.1 crore as against Rs 101.2 crore and EBITDA margin was at 11.9 percent as compared to 14.1 percent, YoY.
Silver futures rise on spot demand
Silver prices rose by Rs 87 to Rs 67,461 per kg in the futures trade on Friday as participants widened their bets on a firm spot demand. On the Multi Commodity Exchange, silver contracts for the September delivery gained Rs 87, or 0.13 per cent, to Rs 67,461 per kg in 12,017 lots. Analysts said the rise in silver prices was mostly due to fresh positions built by participants on a positive domestic trend. Globally, silver was trading 0.23 per cent higher at USD 25.44 per ounce in New York.