S Ranganathan, Head of Research at LKP securities
The day clearly belonged to the primary market with the twin listings of Clean Science & GR Infra making IPO investors happy with stellar listing gains. Despite indices losing a percentage, the broader markets were seen buzzing around across select pockets like exchanges & depository names even as HDFC group companies witnessed profit-taking today.
Vinod Nair, Head of Research at Geojit Financial Services
Shadowing global sell-off, Indian indices slipped succumbing to world inflation woes, FOMC meeting next week and rising COVID cases. Banks led the domestic downtrend as initial quarterly results pointed to cautious asset quality due to the impact of the second wave. Slackening economic growth in the US led to reports of likely downgrade in growth forecast in the current year triggering global sell-off.
Closing updates:
Tracking weak global cues, the Indian equity market benchmarks the Sensex and the Nifty50 fell over a percent each on July 19.
The 30-share pack Sensex fell 734 points while Nifty plunged to 15,707.50 in intraday trade as investors fretted about rising inflation and incessant global spread of Delta variant of coronavirus.
At close, Sensex was 587 points, or 1.10 percent, down at 52,553.40 while the Nifty settled 171 points, or 1.07 percent, lower at 15,752.40.
Midcaps and smallcaps fared relatively better than their larger peers as the BSE Midcap index closed 0.58 percent lower while the smallcap index fell 0.31 percent.
Sensex at 1530 hours
Ashis Biswas, Head of Technical Research, CapitalVia Global Research
The market witnessed correction after it failed to hold an important support level of 15,800. This levelwill be important supportfrom a short-term perspective. Sustaining above 15,620-15,650, the market is expectedto bounce back, and trade in the range of 15,650-15,900. Technical indicators suggesta volatile movement in the market in the range of 15,650-15,900.
Sensex gainers & losers
Adani Group stocks fall up to 5%:
Shares of Adani Group stocks suffered losses in intraday trade on July 19.
Shares of Adani Total Gas hit a 5 percent lower circuit of Rs 854.30 while those of Adani Transmission also fell 5 percent. Shares of Adani Enterprises, Adani Ports, Adani Power and Adani Green Energy fell up to 4 percent.
Nifty Private Bank index fell over 2 percent
Tapan Patel- Senior Analyst (Commodities), HDFC Securities:
Crude oil prices traded lower with benchmark NYMEX WTI crude oil prices fell by 2% to $70.08 per barrel for the day. MCX Crude oil August futures were down by more than 2% to Rs. 5261 by noon.
Crude oil prices are expected to trade sideways to down for the day with resistance at $72 and support at $68 per barrel. MCX Crude oil August has support at Rs 5180 and resistance at Rs 5320.
HDFC Life Insurance Q1
Net premium income grew 31.5 percent at Rs 7,540 crore against Rs 5,733.7 crore (YoY). Net profit was down 40.2 percent at Rs 269.6 crore against Rs 450.5 crore (YoY). Solvency ratio at 203 percent against 190 percent (YoY). VNB at Rs 408 crore against estimate of Rs 395 crore. VNB margin at 26.14 percent against estimate of 25.25 percent.
European markets ate trading in the red with FTSE, CAC and DAX down over a percent each
Swaraj Engines Q1:
Net profit at Rs 33.7 crore against Rs 7.8 crore (YoY). Revenue at Rs 314.7 crore against Rs 117 crore (YoY). EBITDA at Rs 47.3 crore against Rs 12.9 crore (YoY). EBITDA margin at 15 percent against 11 percent (YoY).
PSP Projects Q1
Net profit at Rs 24.9 crore against loss of Rs 3.4 crore (YoY). Revenue at Rs 317.4 crore against Rs 106.9 crore (YoY). EBITDA at Rs 39.4 crore against Rs 1.3 crore (YoY). EBITDA margin at 12.4 percent against 1.2 percent (YoY).
Market update at 2 PM: Sensex is down 570.55 points or 1.07% at 52569.51, and the Nifty fell 164.70 points or 1.03% at 15758.70.
Indian Bank Q1:
Net profit at Rs 1,181.7 crore against Rs 369.3 crore (YoY). Other income at Rs 1,876.1 crore against Rs 1,326.8 crore (YoY). Gross NPA at 9.7 percent against 9.9 percent (QoQ). Net NPA at 3.5 percent against 3.4 percent (QoQ). NII grew 3.1 percent at Rs 3,994.2 crore against Rs 3,874.3 crore (YoY).
Here is why so many companies are going public now?
The Indian market has already seen 24 new listings till June 2021 with the total amount raised is above Rs 39,000 crore and the average fund raised per listing is Rs 1,531 crore. When one compared the above figures from the year 2007, the numbers are still below the average 31 listings per year but the average funds raised is Rs 22,114 per annum is already crossed whereas, till the time average funds raised per listing remained third-highest lead by Rs 1,981 crore in the year 2017 and Rs 1,664 crore in the year 2020.
Tatva Chintan IPO updates
The Rs 500-crore public offer of Tatva Chintan Pharma Chem continued to see healthy demand from investors as it was subscribed 9.58 times by the morning of July 19, the second day of bidding.
The offer has received bids for 3.12 crore equity shares against the IPO size of 32.61 lakh equity shares, the subscription data available on exchanges shows. The portion set aside for retail investors has been subscribed 16.96 times and that of non-institutional investors 4.43 times. Qualified institutional buyers have put in bids for 51 percent of their reserved portion.
Market update at 1 PM:
Sensex is down 600.43 points or 1.13% at 52539.63, and the Nifty fell 169.50 points or 1.06% at 15753.90. HDFC Bank, HDFC, IndusInd Bank and Axis Bank are the top losers while Reliance Industries, Infosys and HDFC are the most active stocks.
Among the sectors, Bank Nifty is down over 2 percent while the auto index shed a percent.
Analysts prefer Infosys over TCS, Wipro for short to medium term:
Infosys and Wipro numbers cheered investors and both stocks hit their 52-week highs after their Q1 results. However, TCS appears to have failed to impress the market. The stock has been under selling pressure since its June-quarter results.
Global financial firm Citi gave a sell call on TCS after its Q1 numbers with a reduced target price due to lower-than-expected revenues. The weakness in the India business was expected, it said.
While analysts are positive on all the three from a long-term perspective, they seem to prefer Infosys to Wipro and TCS for the short to medium term.
Gaurav Garg, Head of Research, CapitalVia Global Research:
Indian market were trading down as investors worried about the impact of rising inflation and Covid-19 outbreaks on the economy's prospects. Traders were particularly wary after Niti Aayog CEO Amitabh Kant expressed concern about rising food inflation as a result of increasing costs for oil seeds and edible oils. Sentiments remained negative as traders ignored Finance Minister Nirmala Sitharaman's comments that India's ongoing broad-based reforms made the country an appealing destination for foreign investment.
We witnessed some lackluster movement in the market and an attempt to hold the support level around the Nifty50 Index level of 15800 While sustaining above 15800 is the key factor from a short-term perspective, our research suggests maintaining above this level is important for the market to gain momentum and extend the rally until 15920-15950.
More than 500 stocks hit upper circuits:
Even as the market benchmark the Sensex traded lower by almost a percent, more than 500 stocks, including Omkar Speciality Chemicals, Windsor Machines, Vardhman Polytex, Vishnu Chemicals, Magadh Sugar & Energy, Dharani Sugars & Chemicals and Goodluck India, hit their upper circuits in intraday trade on BSE.
Nifty Bank falls almost 2 percent
Market update at 12 PM
Sensex is down 396.86 points or 0.75% at 52743.20, and the Nifty shed 105.30 points or 0.66% at 15818.10. HDFC Bank, HDFC, IndusInd Bank, Axis Bank and ONGC are the top losers while Reliance Industries, Infosys and HDFC are the most active stocks.
Among the sectors, Bank Nifty is down over a percent while the pharma index has edged higher.
Buzzing Stock
Bucking the prevailing trend, shares of Burger King India climbed over 4 percent in morning trade on BSE on July 19 even as the benchmark Sensex traded almost a percent lower. The stock has been under pressure hit by lockdowns imposed by the governments due to the coronavirus pandemic. As of July 16 close, the stock is down 4 percent in this calendar year so far. It hit its 52-week high of Rs 219.15 on December 17, 2020.
Brokerage firm Motilal Oswal Financial Services has initiated coverage of the stock with a 'buy rating and a target price of Rs 210 which is an almost 25 percent upside from the stock's previous close of Rs 168.60. "We believe Burger King's premium multiples are likely to sustain on account of its strong growth profile. We initiate coverage with a buy rating and a target price of Rs 210 (28 times September 2025 EV/EBITDA). Based on a three-year perspective, we arrive at a target price of Rs 365 per share (30 percent CAGR), assuming 25 times multiple," Motilal Oswal said.
Tatva Chintan IPO updates
The Rs 500-crore public offer of Tatva Chintan Pharma Chem continued to see healthy demand from investors as it was subscribed 7.39 times by the morning of July 19, the second day of bidding.
The offer has received bids for 2.40 crore equity shares against the IPO size of 32.61 lakh equity shares, the subscription data available on exchanges shows. The portion set aside for retail investors has been subscribed 13.39 times and that of non-institutional investors 2.54 times. Qualified institutional buyers have put in bids for 51 percent of their reserved portion. The specialty chemical company opened its IPO for subscription on July 16. It was subscribed 4.5 times on the first day of bidding.
Indian rupee tumbles 20 paise to 74.77 against US dollar in early trade
The Indian rupee depreciated 20 paise to 74.77 against the US dollar in opening trade on Monday as firm American currency and weak domestic equities weighed on investor sentiment. At the interbank foreign exchange, the rupee opened at 74.73 against the dollar, then fell further to 74.77, registering a fall of 20 paise over its previous close.
Caution! 'Mid and small-cap indices near overbought levels'
Mid and Smallcap Indices continue to hit fresh record highs as optimism of economic activity picking up the pace are driving stock prices higher in this space.
However, one should be cautious as both the Indices are approaching overbought territory on higher time frame charts suggesting that the up move is reaching its peak and a temporary pause or correction cannot be ruled out in the coming trading sessions. Read more
Market update at 11 AM:
Sensex is down 384.15 points or 0.72% at 52755.91, and the Nifty shed 102.60 points or 0.64% at 15820.80. NTPC, BPCL and Indian Oil Corporation are the top gainers while HDFC twins, IndusInd Bank and Maruti Suzuki are the top losers.
Among the sectors, the banking index along with the auto space are trading in the red while pharma and energy sectors are trading in the green.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
Markets are likely to swing between 'risk on' & 'risk off' modes in the very short-term. Excessive valuations will persuade FIIs to sell consistently at higher levels. As the market declines, the redoubtable retail investors will continue with their buy on dips strategy. Therefore, a sharp breakup or breakdown from the present levels is unlikely in the short term.
Globally, too, there are no immediate signals of a sell-off in spite of the excessive valuations. The best safeguard in these uncertain times is to stick to high quality. Without a doubt, there is froth in the market. Froth getting removed is only a matter of time. Meanwhile, the OPEC+decision to increase crude output which has reflected in the decline in crude prices is a macro positive for India.
L&T Finance shares trades in the red; global brokerage sees 39% upside
L&T Finance Holdings share price was trading lower by over 2 percent. The company on July 16 reported 20 percent rise in net profit at Rs 178 crore for June quarter 2021-22, mainly driven by rural demand for farm equipment. The non-banking financial company had registered Rs 148 crore profit in the year-ago period. Global research firm Goldman Sachs has a buy on the stock with target at Rs 128 per share. "Marginal operating miss; disbursements bounced back in June. It sees diversification towards higher return generating retail business over long term. "Key risks are lack of clarity on strategic direction, asset quality challenges," it said.
Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors:
It is a risk off sentiment prevailing as the third wave expectations increase while UK opens completely. The number of Covid cases in UK and US have increased significantly taking dollar index higher with risk aversion sentiments. Indian equity also fell in resonance with Asian equities and negative Dow futures. RBI is expected to curb the upmove of the pair and a range of 74.50 to 74.90 today. Exporters and importers are likely to catch both the ends of the range.
GR Infraprojects IPO shares debut at Rs 1,700, a 103% premium over IPO price
GR Infraprojects shares witnessed a strong demand in the secondary market as they listed with a 103 percent premium on July 19. It was far better than analysts' expectations considering the company's healthy orderbook and the government's increasing focus on infrastructure. The stock started the first day of trade at Rs 1,700, higher by Rs 863, against issue price of Rs 837 on the BSE.
Clean Science IPO shares list at Rs 1,784.4, a 98% premium over issue price
Specialty chemicals company Clean Science & Technology share price opened with a massive 98 percent premium on July 19. Experts were positive about the company's issue given its robust financials with industry-leading return ratios, diversified product portfolio, strong focus on environmental, social, and corporate governance (ESG) front, consistent R&D initiatives, and strong client base. The stock price started off at Rs 1,784.40, higher by Rs 884.40 or 98.27 percent over the issue price of Rs 837 on the BSE.
RIL share price trades in the green, Just Dial sheds 2% after RRVL to acquire majority stake:
Just Dial share price was trading lower by over 2 percent. Reliance Retail Ventures Limited (RRVL), the retail arm of Reliance Industries Limited (RIL), will acquire a majority stake of 66.95 percent in B2B search engine Just Dial. As per the agreement finalised, Just Dial Founder VSS Mani would continue to lead the company as its managing director and chief executive officer. RRVL would hold 40.95 percent stakes in the company, as per the definite agreements executed on July 16, and would make an open offer to acquire up to 26 percent in accordance with the takeover regulations, a press release stated. Share price of Reliance Industries (RIL) was trading half a percent in the green supporting the market from further fall. It was trading at Rs 2,116.20, up Rs 4.40, or 0.21 percent.
GR Infraprojects IPO shares to debut on bourses today
Road sector developer GR Infraprojects is expected to list at a massive 55-60 percent premium over its final issue price given the company's strong financials, attractive valuations and healthy order book.
Grey market trends also indicate similar potential listing gains. Currently, the stock of GR Infraprojects is available in the grey market at a 62-67 percent premium over the issue price of Rs 837. According to IPO Watch and IPO Central data, shares traded at a premium of Rs 520-560 in the grey market, resulting into a share price of Rs 1,357-1,397.
Clean Science IPO shares to list today
Specialty chemical company Clean Science & Technology is set to list its equity shares on the bourses on July 19. Experts largely expect the company to start the day with stellar returns of around 60 percent over their issue price, citing attractive valuations and strong financials. Even the grey market premium showed similar returns.
Apart from financials and valuations, the company's monopoly in many of its products, fundamentals and international presence warrant the listing premium, say experts. In the grey market, the equity share was available at Rs 1,480-1,520, a massive premium of Rs 580-620 or 64.4-68.9 percent over the final issue price of Rs 900, the IPO Watch and IPO Central data showed. Since the closing of the issue, the grey market price of the stock has seen a significant upside, taking it to Rs 1,520 levels.
HDFC Bank trades lower
HDFC Bank share price fell over 2 percent at open on July 19 after the company declared its Q1 results. The country’s largest private sector lender on July 17 reported a 16.1 percent year-on-year growth in standalone profit at Rs 7,729.64 crore for the quarter ended June 2021 despite elevated provisions.
Higher other income and pre-provision operating profit along with NII supported profitability. The bank reported a profit of Rs 6,658.62 crore in Q1 FY21.
Net interest income, the difference between interest earned and interest expended, grew by 8.6 percent to Rs 17,009 crore compared to the year-ago quarter, with loan growth of 14.4 percent and a core net interest margin of 4.1 percent. Deposits, at Rs 13.45 lakh crore grew, by 13.2 percent YoY.
Market opens: Sensex is down 503.57 points or 0.95% at 52636.49, and the Nifty tumbled 141.20 points or 0.89% at 15782.20.
Sriram Iyer, Senior Research Analyst at Reliance Securities:
LME copper gave up most of its gains on July 16 to end flat, tracking the strength of the dollar. LME copper prices have started weaker this Monday morning in Asian trade. Other metals are also started mixed this Monday morning in Asian trade.
Technically, LME Copper is trading below 21-Daily Moving Average which is placed at $9480 level which could see a Bearish momentum up to $9377-$9260 levels. Resistance is at $9455-$9520 levels. LME Nickel could trade in a range of $18800-$19200 levels.
Domestic copper could start weaker this Monday morning, tracking overseas prices. Other metals could start mixed this Monday morning, tracking overseas prices.
On the domestic front, if MCX Copper trades above 728, it could continue its bullish momentum up to 733-737 levels. Support is at 727-723 levels. MCX Nickel July could trade on sideways momentum up to 1440-1455 levels. Support is at 1420-1405 levels.
ICICI Direct on market
: Nifty witnessed a volatile day and closed almost flat on July 16. Broader market witnessed healthy buying as advance decline ratio was in favour of bulls. According to options data, 16000 Call option witnessed significant OI addition, which should act as resistance and, hence, limit upside gains. Nifty futures ended at a premium of 13 points while IV was down by 4.87%. The major Put base is at 15900 strike with 34 lakh shares while the major Call base is at the 16000 strike with 40 lakh shares.
Bank Nifty saw selling pressure as it closed with a loss of more than 0.37% as private bank heavyweights relatively attracted more selling. Looking at options data, we expect the index to face resistance at higher levels as 36000 Call Option strike has significant OI.
Zomato IPO share allotment expected this week
Food delivery giant Zomato is expected to finalise the IPO share allotment this week after closing the public issue last week. The largest IPO in the current year 2021 received an overwhelming response from the investors with oversubscription of 38.25 times during July 14-16.
Now all investors will be watching out for the share allotment that is expected to be finalised by the company on July 22, as per the schedule available in the prospectus. The share allotment can be checked on the website of either BSE or IPO registrar.
Investors to get option to block securities in demat accounts for sale transactions: Sebi
Investors will soon have the option to block securities on their respective demat accounts for sale transactions apart from the existing early pay-in mechanism. In a circular issued on Friday, markets regulator Sebi said the "block mechanism" in the demat accounts of clients undertaking sale transactions would be available from August 1.
Under the Early Pay-In (EPI) system, shares are transferred from a client's demat account and those are transferred back in case the sale transaction is not executed.
