MARKET WRAP: Sensex ends 209 pts up, Nifty at 10,843 post Trump-Kim meeting

Among sectoral indices, the Nifty Pharma index ended over 2.5% higher led by a rise in the shares of Lupin, Dr. Reddy's Laboratories and Glenmark Pharmaceuticals.

10:18 AM

Elara Capital on Cummins

As part of its five-year strategic plan, management has guided for revenue growth of 9-11% in the domestic business and flat to –5% for exports. Domestic revenue growth will be led by industrials (transportation infrastructure capex & potential uptick in manufacturing), power generation (commercial reality, data centers, & small gensets used in hospitality) and distribution. The company aims to maintain its market share across all business segments.

We reiterate Accumulate with a target price of Rs 775 based on 25x March 2020E P/E given strong product portfolio, technological edge, dominant market share and comfortable balance sheet aiding in sustained growth. We estimate an EPS CAGR of 12% over FY18-21E (vs -1% in FY15-18) and an average ROE of 19% over FY19-21E

10:15 AM

RBI pumped in $2.5 billion in April to cut rupee volatility

The Reserve Bank of India (RBI) sold greenbacks worth $2.483 billion in April after it bought $996 million from the spot market in March. In April, the apex bank purchased $5.536 billion and sold $8.019 billion in the spot market, according to the RBI’s June bulletin. This was against a net purchase of $566 million in April 2017. READ MORE

9:59 AM

Market Check

 

S&P BSE Sensex	35,540.04		0.27%
Nifty 50	10,801.60		0.32%
S&P BSE 200	4,680.98		0.31%
Nifty 500	9,347.55		0.34%
S&P BSE Mid-Cap	16,050.98		0.18%
S&P BSE Small-Cap	17,036.84		0.89%

9:55 AM

COMMENT 

So far the omens for the Show-za in Sentosa appear good for markets. JPY is weaker at over 110, showing risk is on not off, and in South Korea defence stocks are down and construction stocks are up, a combination that points to more building and less bombing. However, with two highly mercurial men in a small room for two hours with just translators for company, anything could still happen.

(Source: Rabobank International)

9:52 AM

MUST READ Here's why Trump is silent on aggregate sales surplus of $1.4 trillion

The US has a surplus of $20 billion with China and $1.4 trillion with the rest of the world. That’s not a normal trade balance, of course, where the U.S. registered an annual deficit of more than $330 billion with China and about $550 billion with the world last year, but an "aggregate sales surplus" which measures both direct trade and the sales of multinational companies, according to research by Deutsche Bank AG CLICK HERE FOR MORE

9:51 AM

Edelweiss on Suprajit Emgineering (SEL)

We like SEL’s focus on free cash flows (FCF) & sustainable growth and believe the company is well placed to capitalise on recovery in its domestic and international businesses. We estimate consolidated EPS to clock 28% CAGR and RoCE to improve 760bps to ~32% over FY18 - 20. We maintain ‘BUY’. At CMP, the stock trades at FY20E PE of 16.5x

9:49 AM

Nirmal Bang on Federal Bank

We recently met the CEO of Federal Bank (FBL), Mr Shyam Srinivasan and gleaned incremental insight into the performance and outlook for FBL. (Also, see Detailed Management Meeting Takeways on page 2). Given its outlook and FY19E/20E RoE profile of 11%/12.8%, FBL is a prime re-rating candidate, currently trading at 1.1x FY20E P/BV. It may, also, be noted that 4QFY18 results were mispriced by the market. We retain Buy rating on FBL with a target price to Rs116, valuing the stock at 1.5x FY20E P/BV.

9:48 AM

With handshakes and thumbs-ups, Trump-Kim summit begins on feel-good note

US President Donald Trump said he had forged a "good relationship" with North Korean leader Kim Jong Un at the start of a historic summit in Singapore on Tuesday, as the two men sought ways to end a nuclear standoff on the Korean peninsula. Should they succeed in making a diplomatic breakthrough, it could bring lasting change to the security landscape of Northeast Asia, like the visit of former US President Richard Nixon to China in 1972 led to the transformation of China READ MORE

Photo: Reuters

9:45 AM

Nifty earnings see 17% cut in FY19 amid rising oil prices, bond yields

The recent spike in oil prices, depreciation in the rupee, and hardening of bond yields have begun to take a toll on India Inc. Analysts say these can raise expenses for India Inc and lower margins. Since the start of the fiscal year, brokerages have lowered their one-year forward earnings per share (EPS) estimates of Nifty companies by 17 per cent.

 

The earnings of 28 of the Nifty 50 companies have been downgraded. Such a sharp cut indicates broad-based weaknesses in the economy and a possible slowdown in fresh investment in infrastructure. READ MORE

9:31 AM

Global trade tensions likely to deepen

Global cues and macro-economic updates will give traders plenty of cause for thought this week. US President Donald Trump walking out of the G7 meeting makes an escalation of trade tensions highly probable. Trump’s summit meeting with North Korea’s Kim Jong Un could also have some sort of impact.

 

There’s also the Brexit Bill due for voting this week and that will shape the United Kingdom’s economic future, and, by extension, affect the EU's growth prospects. READ MORE

9:21 AM

Sectoral Trend

9:19 AM

BSE Sensex heatmap

9:16 AM

Market at open

 

At 9:15 AM, the S&P BSE Sensex was trading at 35,531, up 47 points while the broader Nifty50 was ruling at 10,802, up 15 points.

9:03 AM

Markets at Pre-open

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,456.93	-26.54	-0.07
S&P BSE SENSEX 50	11,282.37	-6.25	-0.06
S&P BSE SENSEX Next 50	33,042.18	+32.75	+0.10
S&P BSE 100	11,092.24	-3.57	-0.03
S&P BSE Bharat 22 Index	3,526.07	+1.51	+0.04

8:59 AM

Top stock ideas from Anand Rathi Research

 

NCC: BUY

TARGET: Rs 121.50

STOP LOSS: Rs 108

 

NCC has started to form higher tops and higher bottoms on the hourly charts with a buy crossover in its hourly momentum indicator MACD. The daily momentum indicator MACD has again come into buy mode which is quite positive for the stock. The previous rise was an impulse move i.e. a five waves rising structure and with reversal another impulse on the way up is expected. Click here for more