MARKET WRAP: Sensex settles over 37,600 ahead of RBI rate meet; RIL up 3%

Benchmark indices ended at record closing high for the fourth straight session on Tuesday ahead of the outcome of RBI's third bi-monthly monetary policy meet for 2018-2019, due on Wednesday, August 1, 2018.

The S&P BSE Sensex settled at a record high of 37,607, up 112 points, while the broader Nifty 50 index settled at a new high of 11,356, up 37 points.

In intra-day deals,  the S&P BSE Sensex hit a fresh all-time high of 37,644.59 while the Nifty50 index touched its record high level of 11,366.00.

Among sectoral indices, the Nifty IT index ended over 1% higher led by a rise in Tech Mahindra and MindTree. The Nifty Realty index also rose over 1.5% led by Housing Development and Infrastructure and Unitech.

RBI Monetary Policy

The Reserve Bank of India's (RBI’s) Monetary Policy Committee (MPC) will release its policy statement on Wednesday, August 1, 2018.

The six-member monetary policy committee of the central bank headed by Governor Urjit Patel in its June meet hiked the repo rate by 25 basis points to 6.25 per cent, after more than four years. 

Retail inflation touched the 5 per cent mark in June, compared to 4.87 per cent in May, and has gone beyond the RBI's revised projection of 4.8-4.9 per cent for the first half of the current fiscal year.

The higher inflation last month comes in the backdrop of rising global crude oil prices which have been ruling at over $75 a barrel.

Global Markets

Asian share markets pared some of their early losses as easy monetary policy is seen as positive for risk assets although a global rout in technology shares put a lid on gains.

Japan's Nikkei was last down 0.1 per cent, after falling more than 0.5 per cent earlier in the day. South Korea's Kospi index dipped 0.1 per cent despite solid second-quarter results from Samsung Electronics which posted a 5.7 per cent rise in profit. MSCI's broadest index of Asia-Pacific shares outside Japan was also down 0.3 per cent.

(with wire inputs)

3:56 PM

MARKET COMMENT Jayant Manglik, President, Religare Broking

The market trend in the near term will be dictated by tomorrow’s RBI monetary policy outcome. Considering the recent spike in the inflation rate, the fears of interest rate hike has increased. However the commentary on the future outlook of interest rates/inflation would hold importance. Further with on-going corporate earnings season stock specific volatility is likely to remain high. Hence, we would advise investors to stick to fundamentally sound companies and traders to remain cautious and keep their positions hedge

3:44 PM

Nifty IT index ends 1.16% higher. Top gainers:

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)
TECH MAHINDRA	680.30	655.45	24.85	3.79
MINDTREE	936.45	915.50	20.95	2.29
HCL TECHNOLOGIES	966.35	947.15	19.20	2.03
INFOSYS	1369.10	1351.00	18.10	1.34
WIPRO	276.75	273.15	3.60	1.32

3:42 PM

Nifty sectoral gainers and losers of the day

3:41 PM

BSE Sensex: RIL settles 3% higher, Axis Bank slips over 3%

3:38 PM

Market at close

The S&P BSE Sensex settled at a record high of 37,607, up 112 points, while the broader Nifty 50 index settled at a new high of 11,356, up 37 points.

3:26 PM

Adani Power, Adani Green, Adani Enterprises zoom over 70% in July

Shares of Gautam Adani led- Adani Group Companies were on a roll with three stocks – Adani Green Energy, Adani Power and Adani Enterprises – ralliying more than 70% in the month of July 2018. READ MORE

3:13 PM

GDP may moderate from 7.8% to 7.2% in second half of 2018: Nomura

The Indian economy is likely to have witnessed solid economic growth in the April-June quarter but leading indicators suggest a slowdown in the coming months, says a Nomura report. READ MORE

3:03 PM

Dabur India surges 9% as domestic FMCG biz posts 21% volume growth in Q1

Shares of Dabur India have surged 9% to Rs 429 per share, also their new high on the BSE in intra-day trade, after the company reported a better-than-expected domestic volume growth of 21% in June quarter (Q1FY19). Analysts had expected volume growth in the range of 10% to 15% for the quarter. READ MORE

2:51 PM

Global IPO kitty at $94.3 bn in Jan-June: Report

A total of 660 initial public offerings raised a cumulative USD 94.3 billion globally during January-June 2018 and the IPO activity looks rosy in the second half as well, says a report.

 

According to an EY report, at USD 94.3 billion the IPO proceeds for the first half of 2018 were the highest since January-June 2015 when 704 IPOs had raised USD 110.1 billion. READ MORE

2:31 PM

HEAT MAP S&P BSE Sensex

2:30 PM

Bank of India June-quarter profit rises 8.4 per cent on tax write-back

Bank of India Ltd said on Tuesday quarterly profit rose 8.4 per cent as the state-run bank recomputed tax provisions made a year earlier. Net profit was 951.1 million rupees ($13.86 million) for the three months ended June, compared with 877.1 million rupees a year earlier, it said in a statement. READ MORE

2:28 PM

Elara Capital on Heritage Foods

We cut our PAT estimates for FY19/20e by -18%/-22% led by -12% /-14% cut in sales due to lower than expected growth in pouch milk (5% in FY19 vs 15% earlier), VAD (15% in FY19 vs 30% earlier). We expect HFL to post a sales/EBITDA/PAT CAGR of 8%/+26%/21% in FY18-20e period.

We value the company on weighted average basis of 17.5x (Earlier 15x) EV/EBITDA and 1.4x P/Sales (Earlier 1.2x) on FY20 estimates, to arrive at a revised target price of Rs 825 (Earlier Rs 870). We maintain our BUY rating on the stock

2:27 PM

Centrum on Axis Bank

We retain HOLD on Axis Bank with target price revised  upwards to Rs540 (vs. Rs520 earlier). Q1’19 results were ahead of our estimates on revenue front; however with weak core operating profit growth and higher provisions, earnings  declined 46% YoY. The trend in new NPA addition is stabilizing; accelerated pace of recovery will see overall NPAs reduce.

Share of vulnerable pool has reduced to 2.5% of customer assets (vs 4.9% YoY). Growth has gathered pace; and is backed with strong capital position. Valuation at 2.1x FY20E ABV for an exit RoE of 14% offers limited near term upside. Prefer ICICI Bank in the private banking space

2:25 PM

MARKET COMMENT Three Reasons why the RBI may take a breather on rates

First: Headline CPI inflation is tracking the RBI’s forecast range of 4.8%-4.9%in 1HFY19. Crude oil prices have also softened slightly over the past couple of weeks, while the cut in Goods and Services Tax or GST rates is also likely to be mildly disinflationary.

Second: The neutral stance was maintained at the last meeting, indicating that the RBI is not on an aggressive rate hiking cycle and suggesting that the probability of back-to-back rate hikes is low. Any pause will also provide room to ensure that the recovery is well entrenched.

Third: We are not denying the inflationary impact from the recent increase in minimum support prices or MSP for kharif crops. We anticipate that the increase in MSP could push up inflation by about 50bps. Consequently, an upward revision in the inflation forecast for 2HFY19 is likely. However, we expect the RBI to watch for more data before taking further action.  We expect one more 25bps rate hike by the RBI, most likely in 2HFY19

(Source: Nirmal Bang report)

2:23 PM

Edelweiss on Interglobe Aviation

Despite awaiting the resolution for engine issues, IndiGo expects industry-leading FY19 capacity addition of 25%, which would reinforce its dominant position. Management believes the current low-yield environment is unsustainable in a high-fuel cost environment. However, industry-leading cost structure (CASK ex-fuel 20% lower than SJ) and a strong balance sheet (USD2bn net cash) provide cushion against short-term stress. We are revising down FY19/20E EBITDAR by 18%/9% and thus lowering the target price to Rs 1,194 (Rs 1,441 earlier)