Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Market is simply following herd mentality as most of the global indices exhibited weakness, prompting domestic investors to further prune their holdings in equities. Led by a steep fall in IT stocks, metals & select banking counters, key benchmarks ended weak in yet another fragile trading session. Investors offloaded their holdings in frontline technology stocks on worries that slowdown in western & the US could squeeze margins of domestic IT companies.
Technically, the Nifty has been consistently trading below 16000 and the 50-day SMA (Simple Moving Average) mark which is broadly negative. On intraday charts, the index is holding on to a lower top formation which indicates short term weakness.
For bulls, 16000 would be the key resistance level and above the same, the index could move up to 16100-16150. On the flip side, 15850 would be the key support level and if it slips further, the index could fall up to 15800-15725 levels.
Ajit Mishra, VP - Research, Religare Broking
Markets remained volatile on the weekly expiry day and settled with a marginal cut. After the initial uptick, the benchmark drifted lower and traded with a negative bias for most of the session. However, a rebound in select index majors in the final hour trimmed some losses.
Consequently, the Nifty index settled at 15,938; down by 0.18%, Meanwhile, sectoral indices traded mixed wherein IT, banking and realty ended with losses whereas oil & gas, power and consumer durables ended with gains.
Besides global headwinds, the domestic cues are also portraying a mixed picture. On the benchmark front, it’s critical for Nifty to hold 15,900 else the bias would shift sideways to negative. While most sectors are trading in tandem with the benchmark and drifting lower, defensive like FMCG and pharma are still holding strong. Participants should maintain a cautious stance and align their positions accordingly.
Rupak De, Senior Technical Analyst at LKP Securities:
The Nifty corrected towards the lower band of the rising channel before closing a bit off the day's low. On the daily chart, the index has remained below the important moving average.
The daily RSI is in a bearish crossover. On the lower end, the index may find support at 15850-15875. On the higher end resistance is visible at 16100.
Vinod Nair, Head of Research at Geojit Financial Services:
Tracking weak cues in global markets, Indian indices gave away their initial gains amid concerns over higher-than-expected US inflation data. Investors are increasingly expecting the Fed to carry out a minimum 75bps rate hike this month in order to combat high inflation.
On the domestic front, India’s WPI inflation moderated in June although it remains at the elevated levels, but is expected to ease further during the year.
Kunal Shah, Senior Technical Analyst at LKP Securities
The Bank Nifty index continued to face selling pressure from higher levels and faced stiff resistance at the 35,200-35,300 zone. The lower-end support stands at 34,400 and if breached will lead to further selling pressure towards 34000.
The index is broadly stuck in a range between 34,400-35,300 zones and a break on either side will lead to trending moves.
Rupee Close:
Indian rupee ended at fresh record closing low at 79.87 per dollar against previous close of 79.63 per dollar
Market Close
Benchmark indices ended on flat note in the highly volatile session on July 14.
At close, the Sensex was down 98 points or 0.18% at 53,416.15, and the Nifty was down 28 points or 0.18% at 15,938.70. About 1360 shares have advanced, 1880 shares declined, and 137 shares are unchanged.
ONGC, Sun Pharma, Kotak Mahindra Bank, Dr Reddy’s Labs and Maruti Suzuki were among the top Nifty gainers, while losers included Hero MotoCorp, Axis Bank, HCL Technologies, Tech Mahindra and SBI.
On the sectoral front, Information Technology and PSU Bank indices fell 1-2 percent, while Oil & Gas and Power indices gained 1-1.6 percent.
The BSE midcap and smallcap indices ended in the red.
Rajani Sinha, Chief Economist at Care Edge
Wholesale inflation remained elevated above 15% for the third straight month in June driven by higher food and fuel prices.
Sequentially, the wholesale price index was unchanged as moderation in manufactured products inflation on the back of the government’s supply-side measures and easing of global metal prices countered the higher food and fuel inflation.
While the easing of many of the global commodity prices is a comforting factor, volatile crude oil prices and the weakening of rupee against dollar continue to pose an upside risk to the wholesale inflation number.
Food inflation will continue to inch higher due to accelerating vegetable prices. Consequently, we expect WPI to remain in double-digits till the second quarter of this fiscal.
Citi On Hindustan Zinc
Research house Citi has maintained neutral rating on Hindustan Zinc and cut the target price to Rs 255 from Rs 330 per share.
The valuations appear inexpensive at current levels, while interim dividend announcement of Rs 21 per share is augur well.
The stock may be range-bound and have limited cost support for zinc LME.
Likely offer for sale by government looks imminent, reported CNBC-TV18.
Dollar climbs further
The dollar resumed its relentless rise on Thursday, charting new 24-year highs against the yen and pinning the euro close to parity, as investors bet on the Federal Reserve ratcheting up interest rates to combat soaring inflation.
Global economic turmoil has put a rocket under the safe haven dollar, pushing the dollar index that tracks the greenback against six counterparts up more than 13% this year. It was last up a fifth of a percent on the day at 108.500.
The dollar strengthened more than 1% against the yen, pushing it above 139 yen per dollar for the first time since 1998. It was last up 1.3% at 139.18 yen per dollar.
The euro was hovering just above parity with the dollar - a day after breaking below the key level for the first time in almost two decades. The single currency fell as much as 0.5% on the day and was last down 0.3% at $1.00310.
BSE Metal index shed 0.7 percent dragged by the NMDC, NALCO, Vedanta
Chandan Taparia, Vice President, Equity Derivatives and Technical, Broking & Distribution, Motilal Oswal Financial Services:
Nifty opened gap up above 16000 level and made a high of 16070. The index could not sustain at higher zones and drifted lower. Any rise towards 16061 can be utilised as a selling opportunity in the index. India VIX has cooled off a bit and near 18 zones but it needs to cool down further below 18 zone for some comfort. Now as long as it below 16161, we can expect lower levels of 15888 and 15735 whereas resistance can be faced at higher levels of 16061 and 16161 zones. Market breadth has turned negative which indicates that the market is facing pressure at higher zones.
Today, we are witnessing positive momentum in sectors including Pharma, Auto and Financial services while some weakness was witnessed in PSU Banks, IT, Metals, FMCG and Realty.
Nifty and Bank Nifty have been facing resistance at higher zone. Going forwards, any rise can be utilised as a selling opportunity. At current juncture, we are advising to be with selective stocks and one can look for buying opportunity in Bharat Forge and Pidilite while selling opportunity is seen in RBL Bank, Coforge and Tech Mahindra.
Energy Prices Update:
Wipro announces foray into packaged foods business in India
As part of Wipro Consumer Care & Lighting's strategy for continuous growth, Wipro has announced its foray into packaged foods business in India.
The company has an ambitious plan to be a significant player in the snack food, spices and ready to eat market.
The company has appointed Mr. Anil Chugh, hitherto India & SAARC head of the Wipro Consumer Care business, to head the foods business.
Wipro touched a 52-week low of Rs 400.50 and was quoting at Rs 401.15, down Rs 5.75, or 1.41 percent on the BSE.
Market at 3 PM
Benchmark indices were trading lower in the volatile session.
The Sensex was down 229.86 points or 0.43% at 53284.29, and the Nifty was down 68.20 points or 0.43% at 15898.50. About 1114 shares have advanced, 1994 shares declined, and 111 shares are unchanged.
Jefferies View on Mindtree
Brokerage house Jefferies has maintained 'underperform' rating on Mindtree with a target at Rs 2,490 per share.
The Q1 beat led by strong margin delivery on back of lower employee costs. The deal wins were at $570 million, which at an all-time high.
The company management reiterated strong demand for H1FY23.
Jefferies raises estimates by up to 5 percent, remain wary of company's exposure to short-cycle deals, reported CNBC-TV18.
Bharti Airtel approves preferential allotment of 7.11 crore shares to Google at Rs 734 per share
US Dollar - Japanese Yen above 139 for the first time since 1998
European Markets Updates
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
:
Crude oil prices traded lower with benchmark NYMEX WTI crude oil prices fell by more than 1% to $95 per barrel. Crude oil prices fell on Thursday as investors weighed tight supplies against the prospect of a large US rate hike that could stem inflation and curb crude demand. US oil inventories rose more than expected in a mild respite from the tightness in markets. US commercial crude stocks rose by 3.3 million barrels, government data showed, versus expectations for a modest draw in stocks.
We expect crude oil prices to trade sideways to down with resistance at $98 per barrel with support at $92 per barrel. MCX Crude oil July contract has important support at Rs 7450 and resistance at Rs 7850 per barrel.
Torrent Power bags order worth Rs 2,600 crore from SECI
Butterfly Gandhimathi Q1
: Net profit at Rs 13.2 crore against Rs 0.9 crore (YoY). Revenue was up 85.7% at Rs 253.5 crore against Rs 136.5 crore (YoY). EBITDA at Rs 25.8 crore against Rs 7.3 crore (YoY). EBITDA margin at 10.2% against 5.4% (YoY).
Market update at 2 PM: Sensex is down 187.54 points or 0.35% at 53326.61, and the Nifty shed 58.40 points or 0.37% at 15908.30.
Mohit Ralhan, Managing Partner, TIW Capital Group:
While the WPI inflation eased out slightly to 15.18% in June in comparison to 15.88% in May, it remains at elevated levels mirroring the macroeconomic scenario across the globe. The most notable is an increase in the WPI food index from 10.89% in May to 12.41% in June, which indicates that the central government took the right call of banning wheat exports.
On the other hand, the decline in manufactured product inflation indicates that industry-level supply issues are inching towards resolution. Increasing food prices across the globe have now become the major driver of inflation ahead of energy prices. Also, food production and supply have a longer cycle and therefore it may persist for more time.
Given that India is a major food producer, it is much better placed to tide over this challenge. We continue to expect a higher level of inflation at least in this calendar year and therefore central banks around the world, are likely to continue raising policy rates and even accelerate the same to keep the economy in balance.
Dabur India to acquire balance 24% stake in JV Asian Consumer
Dabur International and Dabur (UK), wholly owned subsidiaries of Dabur India, have decided to purchase 84,79,187 equity shares & 1,000 equity shares, respectively, of M/s Asian Consumer Care Private Limited (subsidiary company of Dabur India Limited) from the JV partner - M/s Advanced Chemical Industries Limited as per the JVA Termination and Share Purchase Agreement to be executed.
Today’s Stock Market Action
DRE. Reddy, CEO and Managing Partner at CRCL LLP:
The wholesale inflation level has softened a bit if compared month on month. But it has remained in double digits for 15 straight months. The key reason for the high inflation level is rising food, fuel, and vegetable prices. The cut in excise duty announced by the government and good monsoon year may ease inflation a little as we move forward in the year.
High input cost will lead to producers passing it on to the end consumers, leading to pressure on CPI inflation as well. The geopolitical tensions and crude price movement, and commodity prices will guide WPI inflation going forward.e
Tata Power Company arm to set up 600 MW hybrid project in Karnataka
Tata Power Company's subsidiary TP Saurya has received the 'letter of award' from Solar Energy Corporation of India (SECI).
The company will set up 600 MW hybrid (wind and solar) power project for SECI in Karnataka. The project will be commissioned within 24 months from the PPA execution date.
Tata Power Company was quoting at Rs 220.75, down Rs 0.10, or 0.05 percent on the BSE.
Nomura View on Mindtree
Foreign research house Nomura has kept the 'neutral' rating on Mindtree and raised the target to Rs 2,910 per share.
The company is bucking the trend with margin stability, while headcount increase signals strong growth will continue.
The Q1 results deliver a beat on all parameters, with revenue performance was strong considering weakness in retail vertical. The margin performance is impressive; positioning itself to sustain supply side issues, it said.
Nomura raises FY23-24 EPS estimates by 2-3 percent, reported CNBC-TV18.
Market at 1 PM
Benchmark indices are trading flat with selling seen in the power and PSU banking stocks.
The Sensex was up 43.89 points or 0.08% at 53558.04, and the Nifty was up 13.60 points or 0.09% at 15980.30. About 1212 shares have advanced, 1807 shares declined, and 124 shares are unchanged.
BSE Information Technology index shed nearly 1 percent dragged by the Birlasoft, Aurionpro Solutions, Brightcom Group
Sumit Pokharna, Research Analyst-Vice President, Kotak Securities:
During the last three months, GAIL’s stock price has corrected around 20%. Investors are puzzled and are awaiting for its first quarter (Q1FY23) result to understand its future prospects. Despite expectation of modest sequential increase in gas transmission and marketing segment volumes in line with recent trends, why operating profit is expected to decline meaningfully? Let us throw some light on it.
We expect GAIL’s operating profit to decrease by 15% qoq to Rs 3159 crore as against Rs 3715 crore in Q4FY22. Notably, GAIL's EBITDA (operating profit) to drop largely due to decline in gas marketing EBITDA, lower gas transmission EBITDA driven by an uptick in operating costs and sharp decline in petchem EBITDA amid lower volumes following the temporary shutdown taken in Q1FY23.
Moneycontrol launches Analysts’ Call Tracker, a monthly special page that tells you which way analysts are leaning.Which stocks are they recommending as ‘buy’ even as prices have fallen? This and more in our newly launched Moneycontrol Analysts’ Call Tracker June 2022.
Shakti Pumps Q1 Results
Shakti Pumps has posted 19.7 percent jump in its consolidated net profit at Rs 8.7 crore versus Rs 7.3 crore and revenue was up 62.8% at Rs 254.5 crore versus Rs 156.3 crore, YoY.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up 69.3% at Rs 21.3 crore and margin was up at 8.4%, YoY.
Shakti Pumps (India) was quoting at Rs 523.55, down Rs 1.00, or 0.19 percent on the BSE.
Nifty PSU Bank index shed 1 percent dragged by the Canara Bank, IOB, Bank of Baroda
Buzzing
Total 26 investors including Porinju Veliyath, and Ashish Chugh will take stake in Duroply Industries. The company said the board has approved issuance of up to 10.33 lakh equity shares to one promoter and 25 investors via preferential issue, at a price of Rs 126 per share, and also 11.91 lakh warrants to promoters.
The total fund raising via equity shares will be Rs 13.02 crore and Rs 15 crore via issuing warrants.
Emkay View on View on Mindtree
The company is confident of maintaining revenue growth momentum in Q2 and is cautiously optimistic for H2 amid macro uncertainties and difficulty in predicting clients' spending behavior. Mindtree expects to sustain over 20% EBITDAM for FY23.
We tweaked FY23E/FY24E/FY25E EPS by -0.1%/0.3%/0.4%, factoring Q1 performance.
We maintain Buy with a target price of Rs 3,400 at 25x Jun'24E EPS, considering strong execution, margin defense and benefits from merger synergies with LTI in the medium term.
Market at 12 PM
Benchmark indices erased all the intraday gains and trading flat amid volatility.
The Sensex was down 37.25 points or 0.07% at 53476.90, and the Nifty was down 17.20 points or 0.11% at 15949.50. About 1253 shares have advanced, 1708 shares declined, and 122 shares are unchanged.
Mazda commences production at Gujarat factory:
Mazda has constructed a new factory for food division at Changodar, Gujarat and commenced initial phase of production.
Mazda was quoting at Rs 574.90, up Rs 4.00, or 0.70 percent on the BSE.
NHPC gets pre-investment approval for Sawalkot HE project
The government has accorded an investment approval for pre-investment activities for Sawalkot HE project (1856 MW) in Union Territory of Jammu & Kashmir for an amount of Rs 973 crore at November 2021 price level. The project is being implemented by NHPC.
CLSA View On IndusInd Bank
Broking house CLSA has maintained outperform rating on IndusInd Bank with a target at Rs 1,060 per share.
FIR against the employees is relates to FY11-14 transactions.
The company will benefit from an improved asset quality cycle and it should return to a growth path after 3 years of consolidation.
The valuations are undemanding for 15% RoE in FY24. However, the key will be to improve liability granularity & manage margin in rising rate cycle, reported CNBC-TV18.
Welspun Corp bags Rs 689 crore order from Saline Water Conversion Corporation in Saudi Arabia
Market update at 11 AM: Sensex is up 168.32 points or 0.31% at 53682.47, and the Nifty added 47.80 points or 0.30% at 16014.50.
Prabhudas Lilladher View on Mindtree
Growth was broad-based across verticals with exception of decline in RCM (-8.9 percent QoQ in dollar terms) due to client specific issues. Management re-iterated their commentary of strong near term demand given record high deal TCV and robust deal pipeline.
Our EPS estimates remain largely unchanged. We model 20.3 percent/20.5 percent EBITDA margin for FY23/24.
We continue to value stock on 24x (FY24 EPS) to arrive at target price of Rs 3,131 (earlier Rs. 3121). Maintain ‘Accumulate’.
Mindtree was quoting at Rs 2,819.90, down Rs 79.45, or 2.74 percent on the BSE.
Results Today:
ACC, Larsen & Toubro Infotech, Angel One, Bombay Burmah Trading Corporation, Butterfly Gandhimathi Appliances, Earum Pharmaceuticals, GTPL Hathway, Shakti Pumps (India), Tata Elxsi, Tata Steel Long Products, and Tiger Logistics (India) will be in focus ahead of quarterly earnings on July 14.
