Closing Bell: Nifty ends below 18,500, Sensex down 194 pts; realty outperform

Ajit Mishra, SVP - Technical Research, Religare Broking

Markets traded volatile and ended marginally lower on the weekly expiry day. After the flat start, the Nifty oscillated in a narrow range and finally settled around the day’s low at 18487.75 levels. Meanwhile, a mixed trend was witnessed on the sectoral front wherein banking and financials traded under pressure while pharma and realty edged higher. The outperformance continued from the broader front as both ended in the green.

The recent movement in the index indicates a pause and dip in the banking and financials is causing turbulence however some stability in other sectors is offsetting the damage. Going ahead, a decisive break below 43500 in the banking index might deteriorate the market mood. Meanwhile, we reiterate our view to maintain the positive bias while keeping a check on positions.

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

Nifty remains in an uptrend with trend support placed at 18150. As long as the index maintained this level we expect uptrend to continue towards 18800-19000.

For the short term we are looking at 18400-18450 as a support zone. Breach of the trend levels could infuse volatility. Select commodity stocks look interesting from value and risk perspective while frontline IT stocks are expected to underperform in the near term.

Rupak De, Senior Technical at LKP Securities:

The Nifty index experienced a limited movement, staying within a certain range throughout the day. However, the closing saw a prevalence of selling pressure. The overall sentiment in the market is expected to remain negative until the Nifty index manages to surpass the 18500 level.

If the index fails to move back above this level, it could potentially lead to a correction in the market. On the downside, there is support expected around the range of 18300-18350. Conversely, resistance can be anticipated at the higher end around 18650.

Ashok Leyland May auto sales | Total sales down 1% at 13,134 units versus 13,273 units, YoY. 

Tata Motors May Sales | Total sales down 1.6% at 74,973 units versus 76,210 units, YoY.  

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities:

The Bank Nifty index remained under the control of bears as they maintained their grip on the market. Selling pressure was observed from the resistance zone around 44200, suggesting that sellers were active at that level.

If the index sustains below the level of 44,000, it could indicate further downside potential. In such a scenario, the index may witness a decline toward the support zone around 43,500-43,400.

Vinod Nair, Head of Research at Geojit Financial Services

Despite challenges in the global economies, the domestic market displayed better than estimated Q4 earnings growth, along with 7.2% GDP growth in FY23, adding buoyancy to the market during the week. However, today the market closed with a marginal negative bias in which banks witnessed heavy profit booking.

Investors turned cautious in anticipation of inflationary pressure in the US after raising the US debt ceiling. The US 10-year bond yield inched higher; the market is looking ahead to the trajectory of US interest rates to get more visibility.

Rupee Close:

Indian rupee closed 31 paise higher at 82.41 per dollar against previous close of 82.72.

Market Close

: Benchmark indices ended lower for the second consecutive session on June 1 with Nifty below 18,500.

At close, the Sensex was down 193.70 points or 0.31% at 62,428.54, and the Nifty was down 46.60 points or 0.25% at 18,487.80. About 2034 shares advanced, 1408 shares declined, and 120 shares unchanged.

Coal India, Kotak Mahindra Bank, Bharti Airtel, SBI Life Insurance and HDFC Life were among top losers on the Nifty, while gainers were Apollo Hospitals Enterprises, Divis Laboratories, Bajaj Auto, Tata Motors and Asian Paints.

Among sectors, bank and metal indices fell 0.5 percent each, while Information Technology, realty and pharma gained 0.5-1 percent.

The BSE midcap index ended flat, while smallcap index added 0.6 percent.

Jefferies View On Apollo Hospitals

-Buy rating, target at Rs 5,300 per share
-Q4FY23 revenue/EBITDA were 2%/8% below our estimates
-Miss came on lower occupancy in hospitals divisions and higher losses in Apollo 24/7
-Occupancy was lower due to payor mix rationalisation
-Management expects occupancy to hit 70% by Q4FY24
-In HealthCo, company guided for breakeven by Q4FY24
-FY24/25 EBITDA estimates change by -6%/-1% on lower margin assumptions

Jefferies View On Prestige Estates

-Buy rating, target at Rs 560 per share
-Pre-sales jump in FY23 driven by new geographies of Mumbai & Hyderabad
-Bangalore pre-sales declined in FY23
-Strong launch pipeline in new locations should drive similar growth in FY24
-Stake purchase in Mumbai commercial properties adds to large investments in lease assets
-Monetisation likely only when execution gains visibility

Prestige Estates Projects was quoting at Rs 487, up Rs 3.45, or 0.71 percent on the BSE.

UBS increases FY24 India GDP growth estimate to 6.2% from 5.5%, reported CNBC-TV18.

Macquarie downgrades City Union Bank to neutral rating, target cut to Rs 140

Research firm Macquarie downgraded its rating to "Neutral" and slashed the target price from Rs 175 per share to Rs 140 per share. Macquarie expects a decrease in sustainable Return on Assets (RoA) by 10 basis points (bps) on a negative outlook for growth and lower margins.

It highlights the significant underperformance of City Union Bank in terms of growth relative to its peers. This implies that the bank's growth rate has been lower than expected or compared to other similar banks in the market.

Looking ahead, Macquarie expects that the RoA for the fiscal year 2024 will be contingent on healthy recoveries. This suggests that the bank's ability to generate returns will depend on successful recovery of loans and other assets.

City Union Bank was quoting at Rs 123.30, down Rs 1.95, or 1.56 percent.

Expect Rupee to trade with a slight positive bias in the near term: Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas:

Indian Rupee gained by 0.35% today on favourable macroeconomic data. India’s fiscal deficit narrowed to 6.4% in FY23 compared to 6.7% in the previous fiscal. India’s economy expanded by 6.1% in Q4 FY2023 as compared to 4.4% in Q3 FY2023. Annual GDP also rose 7.2% in FY23 as compared to 9.1% in FY22. Manufacturing PMI expanded to a 31-month high at 58.7 in May vs 57.2 in the prior month and forecast of 56.5. The dollar eased on improved global risk sentiments after the US House passed the debt ceiling debt. Fed officials Patrick Harker and Philip Jefferson suggested that the central bank may pause its rate hike in June, leading to declining odds of a 25-bps rate hike. The odds have declined to 26%. However, JOLTS job openings data favoured the greenback.

We expect Rupee to trade with a slight positive bias in the near term on optimism due to bullish domestic macroeconomic data. The rise in risk appetite in global markets, weak oil prices and softness in US Dollar may also support Rupee. However, concerns over global economic slowdown and concerns over the twin deficits may prevent a sharp upside. Traders may remain cautious ahead of US ADP non-farm employment, ISM manufacturing PMI and weekly unemployment claims data which is expected weaker than the previous reading. Market participants may also watch out for non-farm employment data tomorrow. We expect the USDINR spot to trade between 82 to 82.80 in the near term.

Market at 3 PM

The Sensex was down 33.44 points or 0.05% at 62,588.80, and the Nifty was down 5.10 points or 0.03% at 18,529.30. About 1972 shares advanced, 1296 shares declined, and 106 shares unchanged.

Nifty Bank index down 0.4 percent dragged by Kotak Mahindra Bank, AU Small Finance Bank, ICICI Bank

Atul Auto May 2023 auto sales | Total sales down 38.6% at 1,101 units against 1,794 units, YoY. 

Atul Auto was quoting at Rs 350.10, down Rs 7.95, or 2.22 percent on the BSE.

Lupin receives approval from USFDA for Diazepam Rectal Gel

Lupin announced that its wholly-owned subsidiary, Novel Laboratories Inc., based in Somerset, New Jersey, has received approval from the United States Food and Drug Administration (U.S. FDA) for its Abbreviated New Drug Application for Diazepam Rectal Gel, 10 mg and 20 mg, Rectal Delivery System, a generic equivalent of Diastat® AcuDialTM Rectal Delivery System, 10 mg and 20 mg, of Bausch Health US, LLC.

Lupin was quoting at Rs 814.35, up Rs 9.80, or 1.22 percent and touched a 52-week high of Rs 816.90.

CLSA View On Bharti Airtel

-Buy rating, target at Rs 1,015 per share
-Post-paid subscriber adds up threefold, 5G should accelerate gains
-Post-paid tariff plans at significant premium
-5G boosting post-paid, share at all-time high
-Highly favourable risk reward

Bharti Airtel was quoting at Rs 825.10, down Rs 32.30, or 3.77 percent on the BSE.

Crisil Forecasts Strengthening Credit Profiles and Robust Growth for Microfinanciers in FY2024

Credit profiles of microfinanciers are expected to strengthen in FY2024, according to Crisil. The growth in assets under management (AUM) is projected to be between 25 percent and 30 percent, indicating positive momentum. Additionally, there are optimistic prospects for improved asset quality and higher profitability, providing tailwinds for the sector.

3M India jumps 3%; hits 52 week high on strong Q4 results

Shares of3M India Ltdrallied 3 percent, hitting new 52-week highs in trade on June 1 post robust Q4 results. At 2:00 pm the 3M India Ltd stock was trading 2.61 percent higher at Rs 25,808 on NSE.

3M India Ltd, a subsidiary of the US-based 3M on May 30, 2023 stated in a filing with BSE that it has observed a 24 per cent increase in quarterly profit, driven by strong demand in its transportation and electronics division. During the quarter ending 31 March, consolidated profit after tax reached Rs 1.36 billion (USD 16.4 million), compared to Rs 1.11 billion in the previous year.

Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays

Manufacturing activity remained resilient in May, with India’s PMI continuing to outperform in EM Asia. Domestic-demand strength propelled a rise in new orders, with employment PMI also rising to cater to increased capacity pressures. Overall, the latest manufacturing PMI data indicate that activity in India remains on a strong footing, especially as sentiment suggests that domestic demand remains robust. There is some divergence in hard data from soft, survey-based data though core infrastructure index growth for April was moderate at 3.5 percenty/y, with some sequential decline too. Other indicators of industrial activity such as electricity and fuel consumption are showing some easing, partly on account of high base effects. Still, we expect India to remain an outlier amid the global slowdown and maintain our GDP growth forecast for FY2023-24 to 6.3percentversus 7.2percentin FY22-23.

Market at 2 PM

The Sensex was down 34.12 points or 0.05percentat 62,588.12, and the Nifty was down 5.00 points or 0.03percentat 18,529.40. About 2,031 shares advanced, 1,201 shares declined, and 121 shares were unchanged.

Olectra Greentech hits fresh 52-week high

A slew of electric bus order wins has propelled the stock of Olectra Greentech higher since February. From its 52-week low of Rs 374, the stock has doubled to Rs 780-level in the past three months.

On June 1, the stock hit a fresh 52-week high of Rs 786 on the National Stock Exchange, 4 percent higher from the previous close and extending gains for the third straight day.

In Q4, the electric bus manufacturer posted a 52 percent year-on-year (YoY) rise in its consolidated net profit to Rs 27.01 crore against a net profit of Rs 17.77 crore in Q4 FY22.

BSE Midcap index up 0.5 percent led by Apollo Hospitals, Laurus Labs, M&M Financial

Eicher Motors May Auto Sales | Total sales up 11.6% at 6,289 units against 5,637 units, YoY.

Eicher Motors was quoting at Rs 3,713.05, up Rs 27.75, or 0.75 percent.

SML Isuzu May 2023 | Total Sales up 13% at 1,290 Units against 1,145 Units, YoY.

NMDC May 2023 production at 3.71 mt

NMDC Production for the month of May was at 3.71 mt against 3.20 mt, YoY growth of 15.9 percent. Total sales were up 36.6percentat 3.62 mt versus 2.65 mt, YoY.

NMDC was quoting at Rs 107.45, up Rs 0.70, or 0.66 percent.

UCO Bank appoints Ashwani Kumar as Managing Director & CEO

Central Government appointed Shri Ashwani Kumar, Executive Director, Indian Bank as Managing Director & Chief Executive Officer (MD & CEO) in UCO Bank for a period of three years with effect from the date of the assumption of office on or after 01.06.2023 or until further orders whichever is earlier.

Kotak Mahindra Bank drops 4% on profit booking

Shares of Kotak Mahindra Bank slipped 3.89 percent to Rs 1,935.95 on June 1, a day after the counter posted sharp gains on reports that it might see a potential doubling of its weightage in the MSCI Global Standard Index.

Ownership of foreign portfolio investors (FPIs) in the lender has declined from 40.90 percent in the December quarter last year to 39.42 percent in the March 2023 quarter.

Apollo Hospitals gains 4% on growth plan, brokerages also positive

Apollo Hospitals Enterprise gained more than 4 percent in the early trade on June 1, buoyed by the company's growth plans, to hit Rs 4,830 on the National Stock Exchange, its highest level since December 22, 2022.

The company plans to take bed occupancy levels for its core hospital business to 70 percent by the end of FY24, Apollo Hospitals managing director Suneeta Reddy said in an earnings call. The bed occupancy level in Q4 was at 64 percent.

TVS Motor hikes price of its electric 2-wheeler iQube by Rs 17,000-22,000

TVS Motor Company hikes price of its electric 2-wheeler iQube by Rs 17,000-22,000 depend on variants, reported CNBC-TV18.

TVS Motor Company was quoting at Rs 1,288.05, down Rs 12.35, or 0.95 percent on the BSE.

Market at 1 PM

The Sensex was up 28.14 points or 0.04percentat 62,650.38, and the Nifty was up 14.30 points or 0.08percentat 18,548.70. About 2,066 shares advanced, 1,143 shares declined, and 116 shares were unchanged.

S&P affirms Reliance Industries ‘BBB+’ rating, outlook stable: reported CNBC-TV18

NCC receives new orders aggregating Rs 2088 crores

NCC has received new orders aggregating Rs 2088 crores (Excluding GST) in the month of May'23. Out of which Building Division has signed the agreements for the orders amounting Rs. 1668 crores and Water Division secured order for Rs. 420 crores. These orders are received from State Government Agencies and does not include any internal orders.

M&M total sales up 14% at 61,415 units

Mahindra & Mahindra's overall auto sales for the month of May 2023 stood at 61,415 vehicles.

In the Utility Vehicles segment, Mahindra sold 32,883 vehicles in the domestic market and overall, 33,931 vehicles, including exports. The domestic sales for Small Commercial Vehicles (LCV < 3.5T) stood at 19,053 vehicles.

Mahindra and Mahindra was quoting at Rs 1,329.00, up Rs 10.60, or 0.80 percent.

HSBC View On Torrent Pharma

-Upgrade to buy rating from hold, target raised to Rs 2,030 from Rs 1,745 per share
-Reported Q4FY23 operationally in-line with expectations
-Healthy performance in key markets like India and Brazil
-Rising profitability of Curatio, Revlimid launch potential levers for op margin growth
-Resolution of USFDA GMP issues is key catalyst

Torrent Pharmaceuticals was quoting at Rs 1,785.60, down Rs 58.75, or 3.19 percent.

Maruti Suzuki's May 2023 sales up 10.6% at 1.78 lakh units versus 1.61 lakh units and total domestic sales up 12.7% at 1.51 lakh units versus 1.34 lakh units, YoY.

Maruti Suzuki India was quoting at Rs 9,328.75, down Rs 29.30, or 0.31 percent on the BSE.

Promoter exits HDFC Life Insurance Company by selling Rs 2,036.7 crore shares

HDFC Life Insurance Company's promoter entity Abrdn (Mauritius Holdings) 2006 Limited has exited the life insurance company by selling entire 3.56 crore shares or 1.66percentstake, to various investors, at an average price of Rs 570.60 per share. The stake sale was worth Rs 2,036.7 crore. With the stake sale, abrdn will hold nil equity shares in the company.

HDFC Life Insurance Company was quoting at Rs 587.40, down Rs 4.15, or 0.70 percent.