Stock Market Highlights: Indian equity indices, Sensex and Nifty erased day's gains to end marginally lower Tuesday dragged by selling in auto, pharma, IT and metal stocks. Broader markets, smallcap and midcap indices also ended lower. Gains were seen in private banks and financial services indices.
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Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty corrected mildly after a two day rise. This happened with higher volumes. Nifty also made a double top at 15,914 levels. On daily charts, it has made a bearish inverted hammer like pattern. Hence at 15,850+ levels, a lot of selling pressure seems to be emerging from investors. 15,738 is the support for the Nifty in the near term while 15,915 continues to be resistance.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
We failed to close above the 15,900 levels; the index went above this level but was swift to make a U-turn and slide over 100 points below the day's high. 15,900 is a stiff resistance and until we do not close above it, the markets are going to be sideways with a positive bias. The support for the Nifty is at 15,400 and therefore any drop can be utilized to accumulate long positions for higher targets.
Manish Shah, Founder, Niftytriggers.com
Nifty50 had a narrow ranged day as yet another attempt to clear the barrier at 15,900-15,950 failed. An attempt by Nifty to scale this rather unsurmountable peak can be frustrating as it is a given thing that the zone between 15,900-15,950 is a stiff resistance. Nifty made a bearish gravestone Doji at the top and failure to move above 15,900-15,950 could mean a slow grind towards 15,750-15,725. Nifty is seeing the lowest bout of low volatility since months and this phase of low volatility cannot last forever; eventually, the spring has to snap. The overall trend is up and eventually Nifty should breakout on the upside. Wait for a confirmed breakout above 15,900-15,950 to get on the long side a bit more aggressively.
Market At Close | Cement shares rise on demand recovery; UltraTech & Shree Cement Up 3% Each.
Market At Close | Financials lend support while Reliance, IT & Tata Motors drag market.
Rupee At Close | The Indian rupee ended near the day’s low at 74.55 per dollar, amid volatility in the domestic equity market. The local currency opened marginally higher at 74.27 per dollar against the previous close of 74.31 and traded in the range of 74.24-74.62.
Market At Close | Here are the highlights of today’s trading session
- Market Fails To Hold Record High; Sensex & Nifty Close With Minor Cuts
- Sensex Slips 268 Pts & Nifty 96 Pts From Highs In The Last-hour Selling
- Financials Lend Support While Reliance, IT & Tata Motors Drag Market
- Negative JLR Outlook & Chip Shortage Issue Drag TaMo 13% From Highs
- Sensex Closes 61 Pts Lower At 52,819 & Nifty 16 Pts Lower At 15,818
- Midcap Index Falls 14 Pts To 27,149 While Nifty Bank Rises 367 Pts To 35,579
- HDFC Bank Contributes Nearly 90% To Nifty Bank’s Gain
- Last-hour Fall Leads Market Breadth Turn In Favour Of Declines
- NSE Advance-Decline Ratio At 3:4
- Cement Shares Rise On Demand Recovery; UltraTech & Shree Cem Up 3% Each
- Bajaj Fin & AU Small Fin Bank Rise After Positive Q1 Updates
- Godrej Cons Continues The Gaining Momentum; Stock At A Record High
- NMDC non-retail Portion OFS Fully Subscribed; Stock Down 3%
- Biocon Falls More Than 3% After CLSA’s Sell Call On The Stock
Closing Bell | Indian equity benchmark indices erased day's gains to end marginally lower Tuesday dragged by selling in auto and IT stocks. The Sensex failed to hold record high and ended 18.82 points, or 0.04 percent, lower at 52,861.18, while the Nifty declined 16.10 points, or 0.10 percent, to close at 15,818.25. Broader markets, smallcap and midcap indices, also gave up gains and ended lower.
Among sectors, selling was seen in auto, IT, PSU Bank, pharma, metals and FMCG indices, while Nifty Pivate Bank and Nifty Financial Services and Nifty Media ended in the green. Tata Motors, Tech Mahindra, Coal India, TCS and M&M were the top Nifty50 losers, while UltraTech Cement, Shree Cements, HDFC Bank, Bajaj Finance and SBI Life were the top index gainers.
Market Watch: Sushil Kedia, Founder, Kedianomics
On Tata Motors | Let us see if it breaks Rs 305, which I think it will, and then the next point of support is about Rs 280. Once that breaks, we have a deep cavern beyond that maybe Rs 256 it goes to. So there is a downtrend in place and for the short-term, it is oversold. To try and go short here is going to be foolhardy. If any bounces indeed come back in, fast traders should be looking to short Tata Motors for the time being. Even though I don’t feel the stop that happened here at Rs 355 is final – even if it gets down to Rs 256-240, let us see how much it goes to. There will be another further new high on Tata Motors over the next six months.
On DLF & Godrej Properties | They both are on our buy list. We have recommended them to our clients and there are nice patterns that are easier enough to trade in them. So Godrej Properties and DLF are clear-cut buys now. Even Bombay Dyeing, if it is above Rs 86, it is good for about Rs 106 and number of other small real estate stocks that we have been holding on to for several months now, except for Indiabulls Realty – broadly speaking the real estate stocks are looking good for the next three-four weeks.
Indian bond yields spike to near 4-month highs; crude surge hurts
Indian bond yields jumped on Tuesday as a rally in global crude oil prices raised worries about higher imported inflation, while a selection of papers for this week's bond buyback by the central bank also disappointed investors, Reuters reported. The most-traded 6.64% 2035 bond was up 6 basis points at 6.79%, while the second-highest traded 5.63% 2026 paper rose 7 bps to 5.83%. Both bonds were trading at levels last seen in mid-March. The 10-year bond, which is likely to be soon replaced as the benchmark paper, was up 6 bps at 6.15%, its highest since April 16.
Gold tops $1,800/oz mark as dollar slips; focus on Fed minutes
Gold rose above the $1,800/ounce psychological level on Tuesday to hit a three-week high, as a pullback in the dollar lifted bullion demand, while investors awaited minutes from the US Federal Reserve's June meeting for clarity on monetary policy, said a Reuters report. Spot gold climbed 0.7% to $1,804.50 per ounce, after touching its highest level since June 17. US gold futures jumped 1.3% to $1,806.30 per ounce.
Oil nears three-year high after OPEC fireworks
Oil prices were heading towards three-year highs on Tuesday, towing petrocurrencies and bond yields with them, after the world's main oil producers failed to agree on production plans, Reuters reported. The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, were forced to abandon talks on Monday after the United Arab Emirates had rejected a proposed eight-month extension to output curbs.
Amarjeet Maurya - AVP - Mid Caps, Angel Broking
During the 2HFY21, We saw strong growth momentum on back of pent up demand for home appliances and pre-buying (due to rising commodity price). Further we have seen organised players are gaining market share from unorganised players due to liquidity issues post Covid which would continue going ahead. However, there will be an impact on demand in 1QFY22 due to the second Covid wave (resulting in lockdowns, market closures and logistics challenges). We expect the mid-term outlook for the consumer electricals industry continues to be optimistic with increased adoption and shorter replacement cycles, driven by increased work-from-home and shift to energy-efficient products.
Tata Motors flags concerns over chip shortage; share price plunges 10%
The share price of Tata Motors, the owner of luxury car brand Jaguar & Land Rover (JLR), plunged 10 percent on Tuesday after the company raised concerns over chip shortage and expected a cash outflow of about £1 billion in the quarter ended September 2021. Tata Motors said JLR first-quarter retail sales were up 68.1 percent compared to the same period last year at 124,537 units, reflecting recovery in demand but wholesales were lower than demand due to semiconductor supply. Based on this and broadly in line with expectations given the supply constraints, the company expects to report a cash outflow of about £1 billion with a negative EBIT margin for the September quarter. Read here.
Info Edge to acquire Axilly Labs for Rs 21 cr
Info Edge (India) on Tuesday said it will acquire Axilly Labs for about Rs 21 crore, a move that will help the Naukri.com parent company further consolidate its position in the online recruitment solutions segment. "... the Board of Directors of the company at its meeting held on July 5, 2021, approved the acquisition of 100 percent of the share capital on a fully diluted basis of Axilly Labs Pvt Ltd for an aggregate cash consideration of about Rs 21 crore," Info Edge (India) said in a regulatory filing. The transaction is subject to fulfilment of certain prescribed conditions precedent and other terms and conditions as per share purchase agreements authorised to be signed by the Board for the proposed acquisition, it added. Read here.
Godawari Power’s solar foray: Rs 700 cr to be funded by internal accruals
Godawari Power and Ispat has repaid its entire standalone long-term debt way ahead of schedule. Abhishek Agrawal, Executive Director of the company, iterated that they have delivered as promised, becoming debt-free on a standalone basis. The only debt which is left now is of the solar plant, which is self-funded. We intended to put up the solar plant by funding it through internal accruals and not take any loans from the banks, said Agrawal in an interview with CNBC-TV18. The capex required for putting up the solar plant and the beneficiation plant would be around Rs 700 crore over the next couple of years and would be funded internally, he said. Read here.
Witnessed strong performance in India; expect sales growth in high teens: GCPL
Godrej Consumer Products posted its Q1FY22 business update. The company says it witnessed steady demand in product categories across key countries. Further, they expect to deliver India sales growth in the high teens this quarter. Sameer Shah, Head - Finance and Investor Relations, Godrej Consumer Products, discussed this further. There has been a very broad-based and strong performance in India. “Our growth was in high teens. There will be marginal price-led growth coming in largely from categories like personal wash and hygiene,” he said. Read here.
Indian pharma market grows 14% in June 2021; analysts see normalization
The Indian pharmaceutical market has grown by a little over 14.1 percent in terms of overall volume growth in the month of June. Analysts say that this indicates gradual normalization. In May, there was 47.8 percent jump in volume and in April it was a 59 percent jump. Now, the rates seem to have been normalized because the base is also normalizing. Same time last year, in April there was a decline of 11 percent and in May there was a decline of 9 percent. However, in June there was a marginal growth of around 2.4 percent. Read here.
Emkay Global on HDFC Bank
We believe that HDFC Bank's credit momentum has moderated a bit in Q1, dragged mainly by continued weakness in the retail segment. The bank has well-managed its asset quality after the second Covid wave, but new stress formation in CV, SME and PL due to back-to-back disruptions will be a key monitorable. As a prudent measure, the bank carries a reasonable contingent buffer as of Q4FY21 and could keep credit cost in check. Currently, we have a Buy rating on HDFC Bank with a TP of Rs 1,850, given its cross-cycle best asset-quality performance, strong franchise/capital profile, better growth outlook and superior return profile.
CLSA bearish on Biocon, here’s why
Biocon has slipped in trade post-CLSA's sell call on the stock, at a target price of Rs 260. A couple of takeaways from the annual report is that the cash flow remained negative for the eighth consecutive year in FY21, as per CLSA. The operating cash flow fell 24 percent year-on-year and capex intensity remained high. It is around Rs 2,200 crore of FY22 capex guidance, which suggests that the capex intensity will remain high, going forward. A slump in the margins in the biologics business has hurt overall profitability, as per CLSA. FY21 report lacks any mention of listing plans for the biologics business as well. Read here
Info Edge or Avenue Supermarts likely to be included in Nifty50; IOC, Coal India may be dropped
Internet technology company Info Edge (India) or DMart retail chain operator Avenue Supermarts is likely to be a part of the Nifty50 from the October series. According to a report by ICICI Direct, Info Edge has emerged as a major contender for inclusion in Nifty in the forthcoming September review. “Info Edge is likely to be included in the Nifty from the October series. The announcement for the same from the NSE is expected to be made sometime in August,” the report by ICICI Direct said. Read here.
Market Watch: Ajit Mishra of Religare Broking
- Buy HDFC Bank with a stop loss of Rs 1,510 and a target price of Rs 1,555-1,570
- Buy Havells with a stop loss of Rs 980 and a target price of Rs 1,090
TCS enters into strategic partnership with SonyLIV
Tata Consultancy Services (TCS) has entered into a strategic partnership with India’s premier OTT streaming platform, SonyLIV, to help create an innovative business model enabled by digital technologies, enhance customer experience, and pave the path to future growth.