Stock Market Highlights: Indian equity indices, Sensex and Nifty ended Friday's volatile session flat as losses in metal, auto stocks offset a surge in FMCG majors. Broader markets underperformed benchmarks with the midcap and smallcap indices down around 1.5 percent each for the day. Barring Nifty FMCG, all other sectoral indices ended in the red with metal and realty indices falling the most.
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Deepak Jasani, Head of Retail Research, HDFC Securities
Indian benchmark equity indices ended flat after a mildly volatile day on May 14. After two weeks of gains, the Nifty ended the week 0.98% lower as coronavirus cases continue to surge, triggering concerns that a wider lockdown may be reimposed. The advance-decline ratio was again negative suggesting continued profit-taking in the broad market. The sell-off seen in The US markets on May 12 has unnerved a lot of investors as the likelihood of inflation/interest rate hike led sell-off across the globe is becoming stronger. However as the Nifty refuses to close at the intraday lows over the past two days, hopes of a short term upmove are still alive. 14,506-14,851 seems to be the new band for the Nifty for the near term.
Ajit Mishra, VP - Research, Religare Broking
Markets ended almost unchanged in a lackluster session, in continuation to the prevailing consolidation phase. On the sector front, except FMCG and capital & consumer goods, all the other indices ended with losses wherein auto, oil & gas and banking were the top losers. Since we're actively following global indices of late, we feel world markets would remain volatile in the near term and key commodity prices would be actively tracked. On the domestic front, earnings announcements from companies and COVID-19 cases would be on participants' radar. We suggest continuing with a selective trading approach and wait for further clarity.
Nirali Shah, Head of Equity Research, Samco Securities
Nifty50 index behaved in line with global indices and closed in red on a weekly basis. The index also failed to retest the immediate resistance zone of 15,000, as it is facing supply pressure at higher levels. The benchmark index is lacking directional move after a prolonged rally and is now contained within a consolidation range of 14,400 to 15,000. BankNifty and other indices are also forming similar patterns. We maintain a bearish bias on the markets in the short term at least till the immediate resistance levels aren’t broken.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short term trend of Nifty is choppy with weak bias. The present market action signal chances of an upside bounce in the coming sessions. The confirmation of higher bottom at 14,591 (Friday's Low) is expected to pull the market on upside. The next upper levels to be watched around 14,900-15,000 in the next one week. Immediate support is placed at 14,590.
Manish Shah, Founder, Niftytriggers.com
Nifty on closed the week in negative. The decline was not severe as other equity markets in the world have seen. Previous weeks-long green candle was supported by further buying interest. The prolonged sideways action in Nifty continues. Nifty needs to break above 15,000-15,050 for the index to see any further rally to continue. For the coming week, Nifty needs to break above 14,850. This would mean that Nifty will again attempt to move above 15,000-15,050 and if break out does manifest Nifty should rally towards 15,450-15,500. Any decline to 14,450-14,500 should be used to buy in the market with a stop below 14,200. The potential for a big rally above 15,000-15,050 is huge considering the pattern in play.
Rupee At Close | The Indian rupee ended higher by 13 paise at 73.29 per dollar. The local currency opened flat at 73.42 per dollar against Wednesday's close of 73.42 and traded in the range of 73.22-73.43.
Here's how market performed this week
- Market Closes Lower After Gaining For Two Consecutive Weeks
- Nifty Metal Slips After Gaining For Three Weeks, Falls Over 4%
- Sensex, Nifty & Midcap Index Slip 1% Each, Nifty Bank Over 2%
- PSU Bank & PSU Index Gain over 3% Each For The Week
- UPL, Asian Paints, Coal India, IOC, Power Grid Top Nifty Gainers
- JSW Steel, Grasim, Hindalco, Adani Ports, Axis Bank Top Nifty Losers
Market At Close | Here are key highlights of today's market session
- Sensex & Nifty Close Flat While Midcaps Underperform
- Financials Remain A Major Drag; Nifty Bank Slips 1%
- Sensex Gains 42 Pts To 48,733 While Nifty Slips 19 Pts To 14,678
- Nifty Bank Falls 283 Pts To 32,170 & Midcap 407 Pts To 24,364
- Metal Slips The Most While FMCG Is Top Gainer Amongst Indices
- Asian Paints, UPL Surge While JSPL & Piramal Fall After Q4 Earnings
- Coal India, Tata Motors, Hindalco, Tata Steel Top Nifty Losers
- FMCG Names (ITC, Nestle, HUL & Britannia) Support Market
- L&T Closes 2% Higher Ahead Of Q4 Earnings
- PTC, Voltas, Berger, Colgate Top Midcap Gainers
- Market Breadth Favours Declines; Advance-Decline Ratio At 2:3
Closing Bell | Indian equity benchmark indices ended Friday's volatile session flat as losses in metal, auto stocks offset a surge in FMCG majors. The Sensex inched 41.75 points, or 0.09 percent higher at 48,732.55, while the Nifty ended 18.70 points or 0.13 percent lower at 14,677.80. Broader markets underperformed benchmarks with the midcap and smallcap indices down around 1.5 percent each for the day.
Among sectors, the Nifty Metal index shed 3.7 percent while Nifty Auto lost 2 percent for the day. Nifty Pharma also fell over a percent and Nifty Bank was down 0.9 percent. However, Nifty FMCG surged over 2 percent. On the Nifty50 index, Asian Paints, UPL, ITC, Nestle and Larsen & Toubro were the top gainers while Coal India, Tata Steel, Tata Motors, Hindalco Industries and IndusInd Bank led the losses.
Market Watch: Dipan Mehta Director Elixir Equities
On FMCG | For the long-term investors this is the best time to get into FMCG stocks when they have been underperforming and there is a bit of a margin of safety and because of better earnings we have seen a slight compression of P/E multiples as well.
On UPL | Although the stock looks attractive at these values, one should keep in mind that it is operating in geographies, which are pretty much mature. From that point of view, you cannot pay a much higher P/E multiple at these levels. But earnings for the next two quarters would be pretty strong and that should drive the stock price up.
COVID-19 second wave: Bank credit growth may slow by 160 bps in FY22; NPAs may rise by 30-40 bps
The second wave of COVID-19 pandemic has proved to be deadlier and the resultant lockdowns and stricter restrictions in various states have raised concerns over its economic impact. The financial sector is the worst hit by the shutting of businesses. Experts believe that the impact on the financial sector will depend on the severity of the lockdown – localised or national; breadth and pattern of occurrence – different states are at different stages of infection cycle and the resultant asynchronous lockdowns are less damaging for players with a national footprint; and its duration.
Economists at Emkay Global Financial Services estimate a GVA (Gross Value Added) loss of about Rs 1.25 lakh crore, or 90 bps pm, for the sporadic lockdowns which the country is witnessing now. The brokerage has cut its Q1FY22 GDP growth estimate to 16.5 percent from 22 percent. Read here.
Reliance Jio offers free 300 minutes of outgoing calls per month to Jio Phone users during Covid-19 pandemic
India’s largest telecom company Reliance Jio on Friday said that it has partnered with the Reliance Foundation and announced two offers for its feature phone users with an aim to help them stay connected during the entire course of the ongoing COVID-19 pandemic. The telco will give Jio Phone users 300 minutes of free outgoing calls per month during the ongoing pandemic. The users can use 10 minutes per day. Further, every Jio Phone user who recharges a plan during the period of the pandemic will get an additional recharge of the same plan for free. For example, a JioPhone user recharging with Rs 75 plan, will get an additional Rs 75 plan free, Reliance Jio Infocomm said in a release. Read here.
Market Watch: Prakash Diwan, Market Expert
On Asian Paints | It goes on to prove the fact that quality will always be at a premium and you would have to keep on adding these kind of stocks in your portfolio on dips. On a good day when you probably see it soften up, it is definitely worth adding to the portfolio if you don’t have it yet. I would wait for dips to buy into it.
On Westlife Development | The runway for growth is available for all QSRs. product quality notwithstanding, preferences notwithstanding, on a like-to-like comparison I would still buy a Burger King at Rs 130 or probably even lower if it comes down and not put too much money into a Westlife, which is a fairly mature model and a stock.
Texmaco Rail and Engineering Q4FY21 | The company has reported a net profit of Rs 20.4 crore as against a loss of Rs 100.8 crore and revenue growth of 39.6 percent to Rs 605.6 crore versus Rs 433.7 crore, YoY.
JSW Steel | A meeting of the Board of Directors has been convened to be held on May 21, 2021, to consider audited financial results of the company for the quarter and year ended March 31, 2021, the recommendation of payment of dividend on the equity shares of the company and for considering raising of long term funds, including but not limited to, Qualified Institutions Placement of permissible securities and issuance of equity shares or other securities by way of a rights issue, subject to such regulatory/statutory approvals as may be required.
Moody's changes Tata Motors outlook to stable from negative, rating affirmed at ‘B1’
Moody's Investors Services has changed Tata Motors outlook to stable from negative and affirmed its rating at 'B1'. The rating affirmation and change in outlook to stable reflect the continued recovery in Tata Motors' consolidated revenue and profitability from the trough during the pandemic in the first quarter of the fiscal year ending March 2021. We expect the recovery to sustain over the upcoming 12 to 18 months, strengthening TML's credit metrics, with debt/EBITDA leverage tracking below 4.0x and EBITA margin of 3%-4%, Moody's said. Our adjusted free cash flows for TML will likely stay negative with its continuous product development and capital expenditure, although the improving profitability and leverage support our view that the imminent risk of a downgrade has now been averted, it added.
Lupin reports mixed bag Q4FY21; mgmt says Albuterol production being ramped up
Lupin posted mixed Q4 earnings. The revenue slipped but margins expanded significantly to come in line with estimates. Nilesh Gupta, MD, Vinita Gupta, CEO and Ramesh Swaminathan, CFO and Head Corporate Affairs discussed the numbers and their outlook going forward. “We have some great growth drivers in place now. With products like Albuterol – last year we were still in ramp-up mode, we had some supply constraints as well. We are in a great position now to capitalise on the opportunity and you will still see us in ramp-up mode in Q1 but from Q2 you should see us in full mode as far as Albuterol is concerned,” said Nilesh Gupta. Read here.
Asian Paints Q4FY21 beats expectations: Mgmt says May looks tough due to lockdowns
The share price of Asian Paints surged 11 percent on Friday after the company reported better-than-expected earnings for the March quarter. The company reported an 81.13 percent jump in its consolidated net profit to Rs 869.89 crore in Q4 helped by volume growth in the domestic as well as in the international market. Detailing the numbers, Amit Syngle, MD & CEO of the company said that growth during Q4 excluding base effect, is at 30-35 percent. “The overall performance in Q4 has been very strong. In January and February, we have grown by more than 20 percent. March was a little bit depressed last year because of the lockdown in the last 2 weeks of March and therefore the March growth is very high. But we have seen very healthy growth all across the 3 months,” he said in an interview with CNBC-TV18. Continue reading here.
Jindal Stainless Q4FY21 | The company reported a profit of Rs 292.6 crore Vs loss of Rs 66.2 crore, while revenue rose 26.5 per cent, YoY.
Dhiraj Sachdev, Managing Partner & CIO, Roha Asset Managers
We like sectors which are in agriculture like crop protection companies or farm mechanisation. We have been investing for long in specialty chemicals, non-commodity chemicals business because they are the building blocks for agrochemicals, pharmaceuticals or flavours and fragrances that are in the essential category and that forms a very good part of our portfolio. We like pharma, engineering and capital goods, we believe the manufacturing cycle is turning around with corporate capex.