MARKET WRAP: Sensex ends 40 pts up, Nifty at 10,787 ahead of US-Korea meet

The markets pared their day's gains to end flat on Monday amid trade tensions ahead of a landmark meeting between US President Donald Trump and North Korean leader Kim Jong Un scheduled tomorrow.

The S&P BSE Sensex ended at 35,483, up 40 points while the broader Nifty50 index settled at 10,787, up 19 points.

Among individual stocks, Bharti Airtel gained 3.5% on the BSE today, while Sun Pharma rose 1.1%. Tata Steel lost 2.1%.

A weekend G7 summit fanned trade conflict fears after US President Donald Trump backed out of a joint communique in a blow to the group’s efforts to show a united front. Trump’s reversal, announced while he was en route to Singapore for a meeting with North Korean leader Kim Jong Un, sent his Group of Seven partners scrambling.

Meanwhile, the Federal Reserve will hold a two-day meeting starting on Tuesday, June 12, and it is widely expected to raise interest rates for the second time this year. The focus is on whether the central bank will hint at raising rates a total of four times in 2018.

Back home, the near term market trend will be dictated by domestic macro data like IIP, CPI and WPI, movement of crude oil prices and currency (INR vs USD) and progress of monsoon.

GLOBAL MARKETS

Asia stocks shook off initial modest losses and edged up on Monday ahead of a US-North Korea summit that might ease regional tensions, while investors also started to focus on key central bank meetings later this week.

Stocks dipped after US President Donald Trump backed out of a joint Group of Seven communique over the weekend, in a blow to the group’s efforts to show a united front.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped early but was last up 0.3 per cent. Hong Kong’s Hang Seng also gained 0.3 per cent while the Shanghai Composite Index fell 0.5 per cent.
 

South Korea’s KOSPI added 0.4 per cent, and Japan’s Nikkei climbed 0.3 per cent.

(with wire inputs)

3:47 PM

Nifty Pharma index ends 0.50% higher. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)
SUN PHARMA.INDS.	535.70	528.25	7.45	1.41
GLENMARK PHARMA.	564.40	556.75	7.65	1.37
CADILA HEALTH.	368.45	364.35	4.10	1.13
DR REDDY'S LABS	2083.20	2062.90	20.30	0.98
AUROBINDO PHARMA	576.45	572.35	4.10	0.72

3:40 PM

Sectoral Trend

3:36 PM

NEW FUND OFFER

 

Invesco Mutual Fund launched a new fund - Invesco India Equity & Bond Fund, (an open ended hybrid scheme investing predominantly in equity and equity related instruments). The fund seeks to generate capital appreciation and current income by investing predominantly in equity & equity related instruments as well as debt securities.

 

The minimum investment amount during the NFO is Rs 5000 and in multiples of Re. 1/- thereafter. For SIP investments, the minimum application amount is Rs 500 under the monthly SIP option for minimum 12 installments and Rs 1500/- under the quarterly SIP option and in multiples of Rs. 1 thereafter. 

 

An exit load of 1% will be payable on investments redeemed/switched out on or before one year from the date of allotment. The new fund offers Growth, Dividend Payout and Dividend Reinvestment options. The fund is benchmarked against CRISIL Hybrid 35+65 – Aggressive Index.

3:36 PM

BSE Sensex: Bharti Airtel, Sun Pharma among top gainers of the day, Tata Steel top loser

3:32 PM

Market at close

 

The S&P BSE Sensex ended at 35,483, up 40 points while the broader Nifty50 index settled at 10,787, up 19 points.

3:14 PM

Investors divided over plans to raise $47 bn fund for tech IPOs in China

Asset managers began fundraising for six Chinese "unicorn" funds on Monday, offering retail investors a new investment channel but potentially straining tight market liquidity.

 

The 300 billion yuan ($47 billion) they seek to raise in the coming week stands to top all the equity funds raised in China last year, and the money will be used to fund mainland listings of homegrown tech firms such as smartphone maker Xiaomi and e-commerce giant Alibaba Group Holding. READ MORE

3:00 PM

PSBs may see Rs 180-200 billion mark-to-market losses in Q1FY19

In the March 2018 quarter, many public-sector banks (PSBs) reported disastrous performance due to the recognition of high bad loans, following the directive by the Reserve Bank of India, through its February 12, 2018 circular. READ MORE

 

2:46 PM

Buzzing Stock

 

Natco Pharma rose 3.6% as company has launched a generic version of Posaconazole Injection, 300 mg/16.7ml, under its brand POSANAT. This is the first time an injection version of this drug available in India.

2:33 PM

COMMENT

Scepticism dominates hope over the scheduled historic summit between the US President Donald Trump and North Korean leader Kim Jong-un in Singapore on 12 June. Trump hurt US’s relations with its allies at the G7 Summit over trade issues and refused to sign the final G7 communique. Looking beyond trade and geopolitical tensions and rising US rates/oil prices, Asia ex Japan currencies remain vigilant against emerging market volatility i.e. a new record low for the Argentinian peso despite the IMF deal. 

 

The Fed hike expected at the FOMC meeting on 13 June will renew the greenback’s appreciation if it lifts the US 10Y bond yield above 3% again. To do so, the Fed will need to affirm its view for inflation to sustain at/above its 2% target. At its last FOMC meeting in May, the Fed expects inflation to be symmetric around 2%. Consensus is looking for US CPI inflation, which will be released on 12 June, to rise to 2.7% YoY in May from 2.5% in the previous month. Fed Chairman Powell is likely to signal, at his post-FOMC press conference, the Fed’s intention to roll back its forward guidance because monetary policy is moving from loose towards neutral.

(Source: DBS Bank report)

2:32 PM

Prabhudas Lilladher on Sun Pharma

With SUNP's withdrawal of 15 ANDAs in Q3FY18, we indicated the event was a precursor of pending resolution as it has been observed in many cases of FDA with multiple companies. While many approvals are expected in near term, we believe majority of those ANDAs will be irrelevant as older molecules are crowded with strong competition and price erosion.

Given the company's track record, it will not pursue/launch majority of the molecules as management to pursue only 'profitable growth' as it was observed in the case of withdrawal of co-pay arrangement of Absorica in US. We find gVenofer (Iron Sucrose, mkt: US$350m) will be one of the few major approvals in FY19E from Halol due to its complex chemistry. We remain cautious on the real opportunities of upcoming approvals and maintain earnings estimates for FY19E-20E. We maintain Reduce' and retain target price at Rs 447

2:31 PM

Kotak on Berger Paints

We estimate that branded paint demand will remain robust in a country like India where per capita consumption is very low and 30% paint market is still unorganised. Management of Berger also indicated that the volume trends remain strong for the company and expect the trend to continue in medium term.

For Berger, we estimate 9% volume CAGR over FY18 - FY20E with stable margins and ROE of ~22% and ROCE of ~28.7% for FY20E. However, the valuations at the current price and factoring growth prospects is stretched. Recommend SELL with an increased target price of Rs 280 (from Rs 265) at 44x FY20E earnings in line with valuation of peers.

2:30 PM

BSE Small-cap index gains; Top gainers in the pack

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)	VOLUME
ALEMBIC PHARMA	521.80	434.85	86.95	20.00	51068
63 MOONS TECH.	85.90	72.45	13.45	18.56	593185
ALEMBIC	48.80	41.65	7.15	17.17	1006439
ANDREW YULE & CO	29.65	25.65	4.00	15.59	2048171
JAI CORP	142.00	123.90	18.10	14.61	1261161

2:16 PM

Alembic Pharma zooms 20% as USFDA gives nod for anti-depression drug

 

Shares of Alembic Pharmaceuticals are locked in upper circuit of 20% at Rs 522 per share on the BSE after the company said that it has received approval from the US drug health regulator for anti-depression drug.

 

“The company has received approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Bupropion hydrochloride tablets USP, 75 mg and 100 mg,” Alembic Pharma said in a press release. READ MORE

2:01 PM

Market Check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,688.56	+244.89	+0.69
S&P BSE SENSEX 50	11,349.11	+79.06	+0.70
S&P BSE SENSEX Next 50	33,204.69	+192.24	+0.58
S&P BSE 100	11,156.29	+75.85	+0.68
S&P BSE Bharat 22 Index	3,543.99	+17.20	+0.49

(Source: BSE)

1:46 PM

India's gold import is likely to fall at least 15% in 2018

After a steep rise last year, gold import is likely to fall at least 15 per cent in 2018. This might come as a relief for policymakers and the Reserve Bank of India (RBI). In the monetary policy review presented on June 6, the central bank had said a significant decline in import of gold, pearls and precious stones had offset the impact of rising crude oil prices in April. READ MORE