Stock Market Highlights: Indian equity indices, Sensex and Nifty ended lower Thursday dragged by selling in IT, power and financial stocks. Broader markets closed mixed as smallcap index gained, while midcap index declined. Among sectors, IT, financial services, realty and private bank indices fell, while Nifty Auto, Nifty Pharma and Nifty FMCG ended in the green.
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Ajit Mishra, VP - Research, Religare Broking
Markets traded lacklustre and ended marginally lower following subdued global cues. After the flat start, the benchmark traded range-bound till the end however the bias slightly on the negative side. Markets are closely eyeing the global indices for some signal as indications are mixed from the domestic front. Nifty has been hovering within the 15,450-15,900 zone for almost a month now and currently trading in the middle of the band. A breakdown below 15,650 would pave the way for a further slide towards the lower range. We feel it’s prudent to keep a check on positions and prefer defensive in the current scenario.
Sugandha Sachdeva, VP- Commodity & Currency Research, Religare Broking
The Indian rupee has drifted lower to test three-month lows as the domestic equities witnessed selling pressure and the greenback continues to strengthen, hitting a three-month high. The gradual uptick in crude oil prices wherein they are trading at their highest in two years is also acting as a headwind for the domestic currency. Besides, sentiments have also taken a beating due to a drop in domestic manufacturing PMI in June, reflecting the impact of the second wave of the virus even as it subsides, enabling the recovery to get back on track. The near-term bias is negative, but the markets are now eyeing key US jobs report for June to assess the Fed's stance going ahead, amid the chatter surrounding the taper-tantrum.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
Nifty remained sluggish throughout the day and gradually declined to the level of 15,667. Thursday's fall was led by the decline in technology, banks and commodities, which have a large weight in the index. Volatility is declining, which is a sign that bulls are resting and they could bring volatility to the market. India VIX closed at 12.63, the lowest level in the last 18 months. On a monthly basis, the market remained in the narrow range of 500 points, which is an unusual and even narrow trading range over the last six months. Long traders need to be careful when adding long positions at high levels and such markets invite unpleasant events. For the day, the Nifty closed below the levels of 15,700 and on Friday, we may see the market hitting the lower boundary which is between 15,650 and 15,600 levels. Our strategy should be to buy on dips that is between 15,670-16,620. Keep a final stop loss at 15,550 levels. On the higher side, 15,700-15,745 and 15,800 would be major obstacles.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty continued to show choppy movement with negative bias and still, there is no evidence of any upside bounce emerging from the lows. Nifty is currently placed at the important cluster support of 15,650 levels and a move below this area could result in a slide down to 15,500 levels.
Manish Shah, Founder, www.Niftytriggers.com
Nifty had another flat day as it closed lower by around 30 odd points. For the fourth day in a row, Nifty closed with a red candle. We have not seen a range expansion candle in this four-day decline as the daily range of the candles is just below the average. We interpret this as a time correction of the April to June rally. The entire price action for the month of June can be considered as a rectangle which is a trend continuation pattern.
Nifty is still at the support of a rising trendline and the pattern of higher highs and higher lows remains intact. Nifty has dipped below the rising 20 days moving average. Four days in a row of red candles means that Nifty is getting oversold on a very stochastic oscillator. Support for Nifty is now at 15,600-15,625. What we need is a bullish candle stock pattern which would at least give a short-term rally. What we need is to move above 15,750 to propel Nifty towards 15,900-15,950.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
The markets have been sideways all day long and the volumes have been lackluster. Until 15,900 is not taken out or 15,400 is not broken, we will continue trading in a choppy manner with no definite sense of direction.
Market At Close | IT Stocks Slip Despite Rupee Being Weak Against $; Nifty IT Down 0.6%
Market At Close | Market Closes Lower After A Range-Bound Session
Rupee At Close | The Indian rupee ended 23 paise lower at 74.55 per dollar, amid selling in the domestic equity market. The local opened lower at 74.37 per dollar against previous close of 74.32 and traded in the range of 74.33-74.63.
Market At Close | Here are the highlights of today’s trading session
- Market Closes Lower After A Range-Bound Session
- Sensex Slips 164 Points To 52,319 & Nifty 42 Points To 15,680
- Nifty Bank Falls 88 Points To 34,684 & Midcap Index 88 Pts To 26,883
- Market Breadth Remains Neutral With Advance-Decline Ratio At 1:1
- Auto Stocks Gain With June Sales Largely Above Estimates
- Dr Reddy’s Top Nifty Gainer Followed By Hindalco & Bajaj Auto
- IT Stocks Slip Despite Rupee Being Weak Against $; Nifty IT Down 0.6%
- Bajaj Finserv, Britannia, Infosys, Wipro & BPCL Top Nifty Losers
- Reports Of PolicyBazaar Filing For An IPO Lift Info Edge 7%
- ONGC, OIL Higher As Crude Gains Ahead Of OPEC Meet
- City Gas Cos Higher On Oil Min’s Note; GAIL, IGL, Guj Gas Up 2% Each
- Vodafone Idea Falls More Than 9% On Weak Q4 & Operationality Concern
Closing Bell | The Indian equity benchmark indices ended lower Thursday dragged by selling in IT and financial stocks. The Sensex declined 164.11 points, or 0.31 percent, to 52,318.60, while the Nifty closed 41.50 points, or 0.26 percent lower at 15,680.00. Broader markets closed mixed as smallcap index gained 0.66 percent, while midcap index declined 0.33.
Among sectors, IT, financial services, realty and private bank indices fell, while Nifty Auto, Nifty Pharma and Nifty FMCG ended in the green. On the Nifty50 index, Bajaj Finserv, Britannia, Infosys, Wipro, and Shree Cement led the losses, while Dr Reddy's Laboratories, Hindalco Industries, Bajaj Auto, Tata Motors, and Sun Pharma were the top gainers.
Expect domestic steel prices to correct in near-term; upbeat on Tata Steel: Edelweiss Institutional Equities
The street has baked in a price cut for steel in the month of July because on one hand, Russia would be imposing an export duty from August and so the Russian steelmakers could start flooding the market with a lot of steel and may also lower prices to bring down their inventories. On the other hand, there could be a correction in Chinese steel prices and so the price of steel in India could correct in line with that. Moreover, there has been a correction in export prices for India and that could reflect in a lower price for steel. On the domestic front as well, India is entering into seasonally week months, which could put further pressure on steel prices. The secondary steel makers are sitting on higher inventories. Read here.
Srei Infrastructure Finance | The company reported a loss of Rs 3,554 crore in Q4FY21 as against a loss of Rs 69.2 crore, YoY. Revenue fell to Rs 567.5 crore from Rs 1,702.2 crore, YoY.
APL Apollo Tubes | The company registered a sales volume of 373,124 Ton in Q1FY22. The Q1FY22 sales volume equals 86 percent of Q4FY21 sales volume, due to the second wave of COVID-19 which had hit the country in April-May 2021, company said in the release.
Oil prices rise ahead of OPEC+ decision on supply cuts
Oil prices rose on Thursday, supported by lower US inventories and the prospect of strengthening demand, while investors awaited a decision from OPEC+ producers on whether they would maintain or reduce supply cuts in the second half of the year, said a Reuters report. Brent crude gained 94 cents, or 1.3%, to $75.56 a barrel. US West Texas Intermediate crude was up 93 cents, or 1.3%, at $74.40. WTI rose more than 10% in June while Brent added more than 8%, touching their highest levels since October 2018.
Milan Desai, Lead Equity Analyst, Angel Broking
Tata Motors has posted good volume recovery on MoM basis. The total domestic sales have grown by 78% MoM (+125% YoY) to 43,704 units. Total Domestic CV sales grew by 107% MoM/108% YoY to 19,594 units while PVs were up 59% MoM to 24,110 units. CV exports were up 23% MoM to 2,506 units, as against 856 units in May’20.
Although the recent months have been impacted, we expect the scenario to gradually improve for CVs during H2 with better freight availability and pick up in construction. We have a positive view on the stock on due to factors such as focus on electrification, focus on profitability, and cash flows at JLR and rebound in overall demand, among others.
Alembic Pharmaceuticals gets USFDA final approval for Nitrofurantoin Capsules
Alembic Pharmaceuticals announced that it has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Nitrofurantoin Capsules, USP (Macrocrystals), 25 mg, 50 mg and 100 mg. The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), 'Macrodantin Capsules, 25 mg, 50 mg, and 100 mg, of Alvogen Malta Operations Ltd. Nitrofurantoin capsules, USP (Macrocrystals) is specifically indicated for the treatment of urinary tract infections when due to susceptible strains of Escherichia coli, enterococci, Staphylococcus aureus, and certain susceptible strains of Klebsiella and Enterobacter species.
Market Watch: Himanshu Gupta, Globe Capital
- Buy Dabur India with a stop loss of Rs 582 and a target of Rs 602.
- Buy Sun Pharma with a stop loss of Rs 672 and a target of Rs 700.
- Buy Thirumalai Chemicals with a stop loss of Rs 148 and a target of Rs 170.
June sales numbers pleasantly surprising; will announce price hike in next 48-72 hours: Bajaj Auto
Bajaj Auto posted strong sales for the month of June, Rakesh Sharma, Executive Director at Bajaj Auto, discussed the numbers with CNBC-TV18. “I would say that the numbers for June have been pleasantly surprising. They indicate some kind of strength, resilience in the demand coming back in the short-term,” he said. On the cost front, he added that ever since April, there has been a push on the commodity and precious metal side, which has been pushing up cost for the company. Read here.
Yash Gupta Equity Research Associate, Angel Broking
India Pesticides Ltd IPO will get listed on the bourses on July 5, 2021, and it is expected that investors will receive shares in their de-mat accounts on July 2, 2021. We have seen a good listing for several IPOs in the last two weeks and the expectation for Indian Pesticides Ltd is also the same. If we look at the grey market premium of India Pesticides IPO, it has been volatile since last week and currently, it is quoting at Rs 60 as per the different sources. If we look at the fundamentals and valuation of stock, fundamentals look good and based on FY-2021 P/E of 24.5x and EV/EBITDA of 18.2x at the upper band of the IPO price, valuations are slightly better than the peer companies. Similarly, the company has one of the best ROE & ROCE of 34% and 45% respectively. We expect the listing to be at a premium of 15%-25%. We have assigned a “Subscribe” recommendation to the issue. We suggest short term investors book profit at levels of Rs 350.
See long-term opportunities in select smallcap, midcap stocks: Union AMC
“There are a lot of good quality companies in the smallcap and midcap side, which are presenting very good long-term opportunities,” said Vinay Paharia, CIO of Union Asset Management Company, in an interview with CNBC-TV18. A lot of poor quality smallcap and midcap stocks are doing very well in the current market scenario and hence we would be very cautious of some of those companies, he added. “This space remains good for long-term investors albeit with high risk,” he stated. Read here.
Positive on commodity stocks; trimmed overweight stance on IT: Invesco MF
Invesco Mutual Fund continues to remain positive on commodity stocks, Taher Badshah, CIO–Equities, told CNBC-TV18. “We are inclined to continue on commodities even at this stage. The longer-term cycle of commodities will unfold a little later and we will know how supply is behaving post environmental, social, and governance (ESG) environment, so this is something we would tackle at a later date,” he said. On auto space, Badshah said, “What is more important as far as autos are concerned is their ability to restore or support or control their margins and that is where there is a worry. But since commodity prices are holding up or not going up any further from here, maybe the ability of a lot of these auto companies to restore some part of their margin losses could also come. Therefore, the trend for the auto sector could look better, compared to what it has been in the recent past.” Badshah also said that urban demand for autos could outstrip rural demand. Read here.
Tata Consultancy Services | The IT major has expanded its strategic partnership with Royal London, the largest mutual life insurance, pensions and investment company in the UK, to help the latter transform its pensions platform estate and deliver market-leading services to members and customers.