MARKET WRAP: Indices gain for 3rd straight session; IT stocks underperform

Benchmark indices gained on Monday as a sharp drop in crude prices and a recovery in the rupee boosted sentiment

10:01 AM

Market Check

 

S&P BSE Sensex	35,059.50		0.39%
Nifty 50	10,665.90		0.57%
S&P BSE 200	4,627.47		0.46%
Nifty 500	9,268.00		0.57%
S&P BSE Mid-Cap	15,988.99		0.53%
S&P BSE Small-Cap	17,282.07		0.76%

9:51 AM

Motilal Oswal on Sun Pharma

Ramp-up of specialty products and resolution of the Halol plant will be the key growth drivers of SUNP. Maintain Buy with a target price of Rs 560 at 22x FY20E

(v/s Rs 675 at 24x FY20E). We cut our FY19/20E by 11/9% on the back of slower margin improvement. We cut our target multiple to 22x from 24x due to the challenging US business.

9:50 AM

Stocks in news

·         Cadila Healthcare to raise up to Rs 10,000 crore via QIP issue and up to Rs 5,000 crore via issue of FCCBs

 

·         Sundaram Finance Holdings to amalgamate Sundaram BPO India with Sundaram Business Services

 

·         GIC announced 1:1 bonus issue

 

·         Himatsingka Seide subsidiary’s retail division to be demerged from self

 

·         DCM Foods approved modernisation of first extrusion line which will add 3,800 MT per annum to its capacity

 

·         Dilip Buildcon declared L1 bidder for NHAI project in Karnataka for Rs 1,027 crore

 

·         Lakshmi Vilas Bank in talks with banks, PE funds to sell up to 26 percent equity

(Source: IIFL report)

9:49 AM

IIFL on PNC Infratech

While the order book is strong, considering the massive bid pipeline the Company is targeting additional Rs.50bn worth of projects during the remaining part of FY19.  Considering the robust order book and bid pipeline we expect PNC to clock a topline growth 42% in FY19.

We also expect earnings growth to remain healthy on the back of high margin order book under execution. We have revised our FY19 and FY20 estimates to incorporate the strong performance. PNC’s EPC business is currently trading at valuation of 10.5x FY19E P/E. We maintain our BUY rating for target of Rs.207 (based on SOTP valuation).

9:48 AM

Emkay Global on Tech Mahindra

Taking into consideration the hazy growth outlook for its communication business, we keep our lower growth estimates intact but increase margin estimates slightly on good execution in FY18. However, the valuation is already capturing the growth prospects and thus maintain our REDUCE rating stock with TP of Rs640, valuing it at 13x FY20E EPS

9:47 AM

MARKET VIEW Equinomics Research

Oil price has corrected steeply by 6% from its recent record high level. This is likely to give a big trigger for the markets in terms of rupee recovering some values and FIIs showing some interest. Election result of Karnataka is also likely to be forgotten by the markets. Overall market cap of BSE has fallen by about Rs.11 lakh crore, mainly due to steep erosion in values of small and mid-cap stocks.

We believe that many high quality stocks in the mid cap space have been beaten down very badly. We expect some recovery in them in the short term. Therefore, we continue to suggest accumulating good quality stocks. Among our coverage, based on results and price points, we consider Karnataka Bank, South Indian Bank, Vindhya Telelinks, Jay Bharat Maruti, NESCO, Engineers India, Sharda Motors and Cochin Shipyard as the most high-conviction stocks. (We haven’t changed the view on other coverage stocks)

9:46 AM

FPIs press sell button on Indian stocks, bonds worth $7 bn since April

 

Foreign portfolio investors (FPIs) have dumped domestic bonds and equities worth nearly $7 billion ( Rs 441 billion) since April. The pullback comes amid the greenback’s ascendance against most global currencies and the 10-year US Treasury hitting the dreaded 3 per cent mark.

 

The sell-off has roiled the Indian financial markets, with the 10-year government security inching towards 8 per cent, the rupee dropping to a 16-month low of 68 against the dollar, and stocks seeing across-the-board correction. READ MORE

9:36 AM

INTERVIEW OF THE DAY 'Fund managers may wait for poll outcome to raise India exposure' says Cameron Brandt from EPFR Global

Rising oil prices and bond markets have unnerved global markets. Cameron Brandt, director of research, EPFR Global, tells Puneet Wadhwa investors have been focusing on China and Japan this year as they try to benefit from the synchronised global growth story without exposing themselves to uncertain political and regulatory climates in the US and Europe. CLICK HERE TO READ MORE

Cameron Brandt

9:22 AM

EARNINGS: SUN PHARMA

Drug major Sun Pharma on Friday posted around 7 per cent increase in consolidated net profit at Rs 13.08 billion for the quarter ended March on the back of revenue growth in India and emerging markets even as the US sales took a hit.

 

The company had reported a net profit of Rs 12.23 billion in the same period of the previous financial year. READ MORE

EARNINGS IMPACT
 

9:18 AM

Sectoral Trend

9:17 AM

Top Sensex gainers and losers

9:16 AM

Markets at Open

At 9:16 am, the S&P BSE Sensex was trading at 35,031, up 106 points, while the broader Nifty50 index was ruling at 10,651, up 46 points

9:03 AM

Markets at pre-open

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,125.68	+200.81	+0.57
S&P BSE SENSEX 50	11,160.44	+58.20	+0.52
S&P BSE SENSEX Next 50	32,890.57	+101.86	+0.31
S&P BSE 100	10,982.72	+53.82	+0.49
S&P BSE Bharat 22 Index	3,532.18	+12.29	+0.35

(Source: BSE)

8:55 AM

Short-term outlook for the market remains positive: Devang Shah

Short-term outlook for the market remains positive till Nifty trades above 10279 levels and expecting targets in the range of 10900-11000 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and expecting targets in the range of 12000-12200 levels in medium term. READ MORE
 

8:52 AM

Commodity picks: May 28, 2018

Cotton

 

Cotton (29mm Gujarat) is trading at Rs 42,700 per candy (356 kg). Lack of timely canal water in Punjab and Haryana could impact the final cotton acreage in the region. A weak rupee, good exports of raw cotton as well as cotton yarn, and bullish global cues could result in higher prices in the Indian market. Expect prices to rise to around Rs 43,200 per candy in the next couple of weeks. READ MORE