MARKETS ON THURSDAY: Sensex up 578 pts; RBI holds rates; inflation outlook cut

All that happened in the markets today

10:16 AM

Sector watch: Air conditioners

The AC industry, which has undergone changes in energy efficiency norms (including mandatory star rating to inverter ACs), has mainly avoided price hikes due to intense competition. Our channel checks indicate (1) early & higher enquiry levels, (2) product differentiation by companies, and (3) better guidance from dealers.

Also, AC players are putting greater thrust on inverter ACs, given their lower lifecycle costs; thus, we believe that India will embrace inverter ACs in a big way in coming years.

With long-term demand drivers intact, including sub-5% penetration level and improving incomes & power availability, the AC industry expects sustainable growth,

going ahead. Given its leadership position, we prefer Voltas (along with Johnson Control Hitachi) over Blue Star.

(Source: Antique Stock Broking)

10:14 AM

Motilal Oswal Research on Grasim

Grasim Industries (GRASIM) is likely to gain scale in the VSF (increasing capacity by ~58% over FY18-21) and Chemicals (increasing capacity by ~37% over FY17-19) segments by way of capacity addition. VSF demand in India is likely to grow at ~8% over FY17-22 –  around 200bp higher than the global growth rate.

 

VSF commands a stable margin owing to the rising proportion (38%) of high-margin specialty fiber in its portfolio and the increasing share of domestic sales (at 77%). Strong integration, along with access to key raw materials like dissolving grade pulp, caustic soda and power, is expected to ensure a stable cost curve for VSF.

 

Higher integration in chlorine is expected to drive a healthy margin profile for the chemicals segment. Additionally, higher investments in chemical plants, which are in proximity to the consumption center of chlorine, should improve ECU realisations.

10:12 AM

Sector watch: Fertiliser

The recently announced NBS (nutrient-based subsidy) rates by the government for FY19 are a positive for the sector as it takes care of the increase in input costs. Increase in subsidy for per kg of phosphate (P) by 27% and sulphur (S) by 22% was due to the rising cost of phosphoric acid (phos acid).

While subsidy on potash (K) has been cut by 10%, it has been retained on nitrogen (N). We believe this will protect farmers from any sharp spurt in fertiliser prices and augurs well for the sector in terms of demand growth. In our view, complex fertiliser companies in our universe – Coromandel International, Zuari Agrochemicals and Deepak Fertiliser, stand to benefit. Uptick in global raw material prices remains a key risk.

(Source: Edelweiss Research)

10:10 AM

Edelweiss on IT sector

We estimate the top-5 IT players—Tata Consultancy Services (TCS), Infosys, Wipro, HCL Technologies (HCLT) and Tech Mahindra (TECHM)—to clock 1.1-2.2% QoQ constant currency revenue growth in Q4FY18. This will get a further 100-120bps cross-currency tailwind boost as major global currencies—GBP, EUR, AUD—appreciated versus USD QoQ. While INR appreciated a marginal 0.5% against USD, it depreciated vis-à-vis other global currencies and is likely to lead to 30-50bps margin tailwinds. Margins are expected to remain steady QoQ (up 20-50bps QoQ for top-5 players).

While we expect HCLT to lead the pack with 2.2% QoQ USD revenue growth (60bps inorganic), Infosys, TECHM, TCS and Wipro are estimated to clock 1.4%, 1.3%, 1.1% and 1.1%, respectively. We will keenly monitor: i) FY19 revenue & margin guidance; ii) Infosys’ strategic roadmap; iii) level of outsourcing in Europe; iv) clients’ spending in legacy businesses; v) traction in digital services; and vi) demand outlook in BFS. Maintain ‘BUY’ on Infosys, HCLT & TECHM and ‘HOLD’ on TCS & Wipro

10:00 AM

Market Check

S&P BSE Sensex	33,367.00		1.05%
Nifty 50	10,238.90		1.09%
S&P BSE 200	4,507.57		1.18%
Nifty 500	9,078.05		1.14%
S&P BSE Mid-Cap	16,387.99		1.25%
S&P BSE Small-Cap	17,708.55		1.48%

9:50 AM

MARKET INSIGHT: Understanding retail attitude key to gauging market trends

 

In March 2018, institutional investors bought Rs 183 billion with both foreign portfolio investors (FPIs) and domestic institutions (DIIs) buying heavily. However, the Nifty fell by 3.6 per cent.

 

Breadth also went extremely negative with close to 80 per cent of stocks listed on the National Stock Exchange (NSE) losing ground. The bulk of the market and the major indices made record highs in January. By end-March, according to a data analysis by website, Capitalmind.in, two-thirds of the NSE listed stocks were trading below their respective 200-Day Moving Averages (200-DMA). READ MORE

9:39 AM

Nifty Auto index surges over 1.5% ahead of RBI policy decion

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)	VOLUME
TATA MOTORS	353.40	343.10	10.30	3.00	1610974
EICHER MOTORS	28617.70	27990.00	627.70	2.24	4845
TATA MOTORS-DVR	198.20	193.95	4.25	2.19	178274
BHARAT FORGE	730.40	717.50	12.90	1.80	124380
MOTHERSON SUMI	337.70	332.35	5.35	1.61	234768

9:24 AM

Metal index gains as trade war fears ease

COMPANY	LATEST	PREV CLOSE	GAIN()	GAIN(%)	VOLUME
S A I L	74.70	72.30	2.40	3.32	101799
HINDALCO INDS.	206.70	200.80	5.90	2.94	31512
WELSPUN CORP	138.65	135.05	3.60	2.67	699
JINDAL STEEL	224.95	219.60	5.35	2.44	26689
TATA STEEL	573.85	560.55	13.30	2.37	33272

9:21 AM

NIFTY OPTIONS WATCH

 

 

·         Additions in OI were seen in 10100, 9900, 9700 strike Puts and at 10200, 10300, 10400 strike Calls indicating that the market is likely to remain range-bound in near term.

 

·         Highest OI build-up is seen at 10500 strike Calls and 10000 strike Puts, to the tune of 3.89mn and 4.42mn respectively.

 

 

FII AND VIX

 

·         FIIs were net buyers in Cash to the tune of 335.18 Cr. and were net sellers in Index Futures to the tune of 1152.2 Cr.

 

·         India VIX increased by 7.60% to close at 16.34 touching an intraday high of 16.48.

(Source: Nirmal Bang)

9:19 AM

Sectoral Trend

9:18 AM

All Sensex contituents trade in green

9:16 AM

Markets at open

At 9:16 am, the S&P BSE Sensex was trading at 33,412, up 393 points while the broadr Nifty50 index was ruling at 10,251, up 122 points

9:02 AM

Markets at pre-open

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	33,113.31	+94.24	+0.29
S&P BSE SENSEX 50	10,641.40	+43.70	+0.41
S&P BSE SENSEX Next 50	33,396.01	+47.69	+0.14
S&P BSE 100	10,574.07	+38.93	+0.37
S&P BSE Bharat 22 Index	3,470.36	+20.42	+0.59

(Source: BSE)

8:55 AM

MPC to remain vigilant on potential upside risks

 

The Monetary Policy of the fiscalis unlikely to throw any surprises. A status quo on repo rate at 6 per cent, reiteration of a neutral stance, and a balanced tone of the policy statement is widely expected. This is so, as (i) the macro environment has not changed significantly since the last policy meeting in February, and (ii) clarity on potential risks to inflation or growth as highlighted in the previous policy meeting are still awaited. READ MORE

8:52 AM

Top trading ideas for today's trade: Buy Cadila Health, sell NMDC

Stock: CADILA HEALTH
Reco: Buy

CMP: Rs 394

 

On the daily scale the stock witnessed a breakout from a ‘Falling Wedge’ formation. The developing divergence on the intermediate scale also compliments the likely reversal towards the price pattern target around 425-430. Positional longs could be considered with a stop below 372 for a short term target upto 430. READ MORE