MARKET WRAP: Sensex ends 273 pts lower, Nifty at 10,671; PSU banks decline
Among sectoral indices, the Nifty PSU Bank index ended 2.4% lower led by a fall in the shares of IDBI Bank, Syndicate Bank and Bank of India.
 "Representational Image")
Representational Image
9:50 AM
Rupee at 19-month low, down 30 paise against US dollar
The rupee plunged by 30 paise to hit a 19-month low of 68.54 against the US dollar in early trade today on strong month-end dollar demand from importers and banks amid sustained foreign capital outflows.
This is the rupee's lowest level against the greenback since November 29, 2016. READ MORE
9:43 AM
Bank NIfty view (Source: Nirmal Bang)
9:31 AM
F&O Strategies
IGL JULY FUTURES: Buy around 260- 261 for a potential upside target of 273 with a stop below 255 (spot levels)
TATASTEEL JULY FUTURES: Sell around 545-546 for a potential downside target of 529 with a stop loss placed above 553 (spot levels)
BULL CALL HDFCBANK : BUY ONE LOT OF HDFCBANK JULY 2100 CE @ 37.50 AND SELL ONE LOT OF HDFCBANK JULY 2120 CE @ 31.50 | MAX PROFIT: 7,000 | MAX LOSS: 3,000 |BEP: 2106
(Source: Karvy)
(Source: Karvy)
9:22 AM
IIFL on AU Small Finance Bank
We upgrade AUBANK to ADD from SELL. The upgrade in rating and target price is due to: i) building-in capital infusion of Rs10bn from Temasek, ii) earnings upgrade of 10.2%/12.8% for FY19ii/20ii as a result, and iii) rolling over our target multiple to FY20ii BVPS, in line with our coverage.
Our recent meeting with the CEO and Business Heads of AUBANK reassured us that AUBANK is preparing for the future in earnest. Management’s focus areas are building retail deposits, increasing cross-sell, building fee-based services akin to universal banks and sustaining diversified asset growth. We estimate RoA and RoE at c2.0% and c18% by FY21ii. The stock is still expensive, hence we recommend adding on dips.
We upgrade AUBANK to ADD from SELL. The upgrade in rating and target price is due to: i) building-in capital infusion of Rs10bn from Temasek, ii) earnings upgrade of 10.2%/12.8% for FY19ii/20ii as a result, and iii) rolling over our target multiple to FY20ii BVPS, in line with our coverage.
Our recent meeting with the CEO and Business Heads of AUBANK reassured us that AUBANK is preparing for the future in earnest. Management’s focus areas are building retail deposits, increasing cross-sell, building fee-based services akin to universal banks and sustaining diversified asset growth. We estimate RoA and RoE at c2.0% and c18% by FY21ii. The stock is still expensive, hence we recommend adding on dips.
9:21 AM
ROLLOVER STATS
Nifty rollovers stands at 27% which is lower compared to the average rollovers of 33% (last three series). Nifty future holds an open interest (OI) of 27.8mn shares (Rs 299bn) as compared to 27mn shares (Rs 287bn) on D-2 of May expiry. Nifty futures roll levels went further down to 28bps (cost to long roller adjusted to dividend of 28 points). Around 33.3k Nifty contracts were rolled while ~10k contracts were added in the next month.
(Source: Edelweiss Research)
(Source: Edelweiss Research)
9:20 AM
Nifty sectoral trend
9:18 AM
BSE Sensex heatmap
9:16 AM
Market at open
At 9:15 AM, the S&P BSE Sensex was trading at 35,517, up 27 points while the broader Nifty50 was ruling at 10,765, down 4 points.
9:14 AM
Reliance Securities on Engineers India
Engineers India (ENGR) – a PSU under the Ministry of Petroleum & Natural Gas – has emerged as a market leader in Indian hydrocarbon space with strong expertise in design, engineering and implementation of projects. Notably, 20 out of 23 refineries in India are built by the Company, while it is the market leader in petrochemical space by establishing 10 out of 11 mega complexes.
We believe strong track record in consultancy of complex and high-value projects, debt-free status, negative working capital cycle and beneficiary of large government projects put ENGR in a sweet spot. We initiate coverage on the stock with BUY recommendation and Target Price of Rs169 (20x FY20E, 20% discount to mean), which implies 32% upside from the current levels.
We believe strong track record in consultancy of complex and high-value projects, debt-free status, negative working capital cycle and beneficiary of large government projects put ENGR in a sweet spot. We initiate coverage on the stock with BUY recommendation and Target Price of Rs169 (20x FY20E, 20% discount to mean), which implies 32% upside from the current levels.
9:13 AM
CHART CHECK Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
Market is clearly testing patience now and the more it consolidates the faster it moves post the breakout (in either direction). Technically speaking, there are no major changes to talk about on charts. Hence, we continue to advise a stock specific approach as long as index does not confirm it’s near term direction.
Within this range, we continue to maintain our positive stance as long as the crucial support zone of 10700 – 10650 is not violated convincingly. On the upside, 10805 followed by 10837 would be seen as trend deciding levels
Market is clearly testing patience now and the more it consolidates the faster it moves post the breakout (in either direction). Technically speaking, there are no major changes to talk about on charts. Hence, we continue to advise a stock specific approach as long as index does not confirm it’s near term direction.
Within this range, we continue to maintain our positive stance as long as the crucial support zone of 10700 – 10650 is not violated convincingly. On the upside, 10805 followed by 10837 would be seen as trend deciding levels
9:12 AM
COMMENT G Chokkalingam, MD & founder, Equinomics Research
The government is readying a roadmap to lower its stake in all central public sector enterprises (CPSEs) to 49% in three years, except for those operating in sectors of strategic importance such as defense and oil. This will increase autonomy, reduce political interference and also raise the valuation of the remaining government holding.
The companies are being identified by the government’s apex planning body, NITI Aayog. There are over 250 CPSEs in which the government holds 51% or more. We believe that PSUs like Balmer Lawrie Company which operates in commercial business without any strategic importance would be ultimately put out for strategic sales and the same would unlock a lot of value for the public shareholders as the company has rich assets.
The government is readying a roadmap to lower its stake in all central public sector enterprises (CPSEs) to 49% in three years, except for those operating in sectors of strategic importance such as defense and oil. This will increase autonomy, reduce political interference and also raise the valuation of the remaining government holding.
The companies are being identified by the government’s apex planning body, NITI Aayog. There are over 250 CPSEs in which the government holds 51% or more. We believe that PSUs like Balmer Lawrie Company which operates in commercial business without any strategic importance would be ultimately put out for strategic sales and the same would unlock a lot of value for the public shareholders as the company has rich assets.
9:11 AM
Stocks in news
Voltas clarified that it is not aware on media report on Tata Sons selling stake.
Tata Communications partnered with data center solutions company Edgeconnex.
Majesco U.S. arm’s insurance platform goes live for American Capital Assurance Corp.
Hindustan Unilever said reports of Horlicks deal speculative.
IDBI Bank clarified it has exposure of Rs 47.18 crore to DS Kulkarni Developers.
Relaxo Footwear mulls merging Marvel Polymers and Relaxo Rubber with self.
IndusInd Bank to acquire IL&FS' brokerage business
PNB Housing Finance plans to raise Rs 10,000 cr via bonds
Shriram Transport Finance to raise Rs 5,000cr via bonds issue
Fortune Financial Services entered in to share purchase agreement with ITI Reinsurance
Lux Industries board approved merger of JM Hoisery & Co & Ebell Fashions with the company
(Source: Nirmal Bang report)
Infosys arm to provide banking solution to Santander in U.K.
Voltas clarified that it is not aware on media report on Tata Sons selling stake.
Tata Communications partnered with data center solutions company Edgeconnex.
Majesco U.S. arm’s insurance platform goes live for American Capital Assurance Corp.
Hindustan Unilever said reports of Horlicks deal speculative.
IDBI Bank clarified it has exposure of Rs 47.18 crore to DS Kulkarni Developers.
Relaxo Footwear mulls merging Marvel Polymers and Relaxo Rubber with self.
IndusInd Bank to acquire IL&FS' brokerage business
PNB Housing Finance plans to raise Rs 10,000 cr via bonds
Shriram Transport Finance to raise Rs 5,000cr via bonds issue
Fortune Financial Services entered in to share purchase agreement with ITI Reinsurance
Lux Industries board approved merger of JM Hoisery & Co & Ebell Fashions with the company
(Source: Nirmal Bang report)
9:01 AM
Markets at pre-open
(Source: BSE)
| Index | Current | Pt. Change | % Change |
| S&P BSE SENSEX | 35,570.94 | +80.90 | +0.23 |
| S&P BSE SENSEX 50 | 11,304.95 | +26.32 | +0.23 |
| S&P BSE SENSEX Next 50 | 32,402.42 | +58.89 | +0.18 |
| S&P BSE 100 | 11,078.56 | +24.93 | +0.23 |
| S&P BSE Bharat 22 Index | 3,358.19 | +3.76 | +0.11 |
(Source: BSE)
8:57 AM
Nifty outlook by Prabhudas Lilladher:
Market continues to move in a narrow range with the indices levels being maintained since last 9 days, with high volatility and selective heavy weights supporting the levels in rotation. The support for the day is seen at 10,700 while resistance is seen at 10,810. Cement stocks performed well and are likely to do so, now FMCG seems to be getting ready for new round of momentum with Dabur, ITC, etc look promising. Click here for technical calls
8:54 AM
Top stock ideas by HDFC Securities:
Buy Bata India
CMP: Rs 845.55
Target: Rs 890
Stop loss: Rs 820
In the current month of June 2018, when most of the stocks have been hammered down, Bata managed to register new all time high with jump in volumes. After 3 days of running correction, Bata India resumed its uptrend during yesterday’s trading session by rising more than 2.5% with higher volumes. Oscillator and Moving average setup also indicates the bullish trend for the stock.
We recommend Buying Bata India for the target of 890, keeping SL at 820. Click here for more
Topics :
Don't miss the most important news and views of the day. Get them on our Telegram channel
First Published: Jun 27 2018 | 8:15 AM IST
