Ajit Mishra, VP - Research, Religare Broking:
Markets traded highly volatile in a range and ended almost unchanged, taking a breather after Tuesday’s surge. Initially, supportive global cues led to a positive start however profit taking in select heavyweights trimmed all the gains. Finally, the Nifty ended on a flat note at 16,240 levels. Meanwhile, the movement on the broader front kept the participants busy. Amongst the sectors, all the other indices, barring FMCG and pharma, ended in the red.
The recent rebound in the global indices is certainly comforting however the lingering geopolitical and inflation worries are still keeping the participants on the edge. Meanwhile, the lack of any positive trigger from the domestic front is further weighing on sentiment. Amid all, the scheduled weekly expiry would keep the volatility high on Thursday. We thus recommend continuing with a cautious stance, with a focus on overnight risk management.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty opened on a positive note & attempted to continue with the positive momentum. On the higher side, however, it stumbled near 16400 where it attracted some profit booking. The internal structure of the recent rise shows that today’s negative close is a minor pause & the short term pullback is still intact.
The index is expected to witness fresh buying support near 16200. Thus, this minor degree dip can be taken as a fresh buying opportunity from short term trading perspective.
On the higher side, the short term target is pegged at 16500. The level of 16000 will act as a support for the short term.
Rupak De, Senior Technical Analyst at LKP Securities:
Nifty found resistance at the crucial resistance at 16400 and slipped below before closing with a marginal loss. On the daily chart, the index remained well below the short-term moving average. The daily RSI is in the bullish crossover.
The trend is likely to remain sideward over the near term. The resistance on the higher end is placed at 16400. On the lower end, support is visible at 16000.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
The sharp rally in the previous session failed to add fizz in today's trades, as the market did not capitalise on the firm start and rather turned range-bound to end marginally lower.
The rampant FII selling has been weighing on investors' minds, and worries about subdued growth going ahead due to rising interest rates is hurting the sentiment.
On daily charts, the Nifty has formed a small bearish hammer kind of candlestick formation, which indicates a range bound activity in the near future.
For day traders, 16200-16150 levels would act as key support zones. Above the same, the index could move up to 16400-16450. On the flip side, below 16150, uptrends could be vulnerable and could retest the level of 16050-16000.
Vinod Nair, Head of Research at Geojit Financial Services:
With the support from Pharma and FMCG stocks, the domestic market had a steady run until the weak opening of the European market. UK’s soaring retail inflation number along with Fed Chair’s reassurance on bringing down the inflation, disturbed the sentiment, risking sharper rate hikes.
With prospects of a sizeable interest rate hike by the global central banks, investors are advised to allocate higher weightage to sectors that are least affected by such policies like defensives.
Rupee Close:
Indian rupee ended flat at 77.58 per dollar against Tuesday’s close of 77.56.
Market Close
Indian benchmark indices ended with marginal losses in the volatile session on May 18.
At close, the Sensex was down 109.94 points or 0.20% at 54,208.53, and the Nifty was down 19 points or 0.12% at 16,240.30. About 1865 shares have advanced, 1409 shares declined, and 108 shares are unchanged.
Tata Consumer Products, Shree Cements, UltraTech Cement, Cipla and HUL were among the top Nifty gainers. However, losers were Power Grid Corporation, BPCL, Apollo Hospitals, Tata Motors and Tech Mahindra.
Among sectors, buying was seen in the FMCG and Pharma, while selling was seen in the bank, capital goods, realty, IT, metal, PSU Bank, and oil & gas indices.
BSE midcap index ended on flat note, while smallcap index was up 0.3 percent.
Trident board to consider fundraising on May 30
The board meeting of Trident will be held on May 30, 2022, to consider and approve the standalone and consolidated audited financial results of the company for the quarter and financial year ended March 31, 2022.
Further, the board shall also consider raising of funds by non-convertible debt instruments along with warrants, convertible securities other than warrants or foreign currency convertible bonds and I or such other securities including Non-Convertible Debentures.
Trident was quoting at Rs 49.45, up Rs 0.30, or 0.61 percent on the BSE.
Nifty PSU Bank index fell 1 percent dragged by the Canara Bank, Bank of Baroda, SBI
Aditya Birla Fashion & Retail Q4 earnings:
Aditya Birla Fashion & Retail has posted consolidated net profit at Rs 43.59 crore in the quarter ended March 2022 versus loss of Rs 137.6 crore in the same quarter last fiscal.
Revenue was up 25.3% at Rs 2,283 crore versus Rs 1,821.6 crore, YoY.
Aditya Birla Fashion & Retail was quoting at Rs 281.15, up Rs 1.15, or 0.41 percent.
Geojit View on Tech Mahindra
We remain positive on Tech Mahindra’s business outlook on the back of strong new deal wins, deal pipeline and capabilities in new tech. we expect the margin pressure led by supply side issues to subside in the coming quarters, supported by the higher fresher intakes.
We foresee earnings to grow at a healthy 13% CAGR over FY22-24E and reiterate our buy rating on the stock with a revised target price of Rs 1,372 using a target multiple of 17x P/E on FY24E Adjusted EPS.
Sun Pharma to launch oral drug, Bempedoic Acid, in India
Sun Pharmaceutical Industries today announced that one of its wholly-owned subsidiaries plans to launch a first-in-class oral drug, Bempedoic Acid, in India for reducing low-density lipoprotein (LDL) cholesterol. The company will launch the drug under the brand name “Brillo”, company said in its press release.
Nifty FMCG index rose 1 percent supported by the Marico, Tata Consumer Products, Hindustan Unilever
Gold Updates:
Gold prices on Wednesday steadied near their lowest levels since late January pressured by a recovering dollar and an aggressive inflation stance from the U.S. Federal Reserve chief.
Spot gold was little changed at $1,815.39 per ounce, by 0831 GMT. U.S. gold futures slipped 0.2% to $1,814.70.
Market at 3 PM
Bencgmark indices were trading marginally lower in the final hour of the trading.
The Sensex was down 101.73 points or 0.19% at 54216.74, and the Nifty was down 22.20 points or 0.14% at 16237.10. About 1763 shares have advanced, 1375 shares declined, and 114 shares are unchanged.
Buzzing:
Delta Corp share price plunged nearly 6 percent on May 18 after Group of Ministers (GoM) has unanimously decided to recommend levying 28 percent goods and services tax (GST) casinos.
The Group of Ministers (GoM) has unanimously decided to recommend levying 28 percent goods and services tax (GST) on online gaming, casinos and race courses, sources told CNBC-TV18.
The tax will be imposed on initial betting and the gaming amount as the group is not in favour of levying GST on every bet or the winning amount, they added.
The sources added that the GoM report will be submitted in a day or two.
BSE Realty index fell 1 percent dragged by the Prestige Estate, Godrej Properties, Sobha
European Markets Updates
TeamLease Services Q4
Consolidated net profit was up 3% at Rs 30.9 crore against Rs 30 crore (QoQ). Consolidated revenue rose 3.1% at Rs 1817.4 crore against Rs 1762 crore (QoQ). Cons EBITDA gained 8.9% at Rs 41 crore against Rs 37.7 crore (QoQ). Consolidated EBITDA margin at 2.3% against 2.1% (QoQ). The stock was trading at Rs 3,434.35, down Rs 50.20, or 1.44 percent. It has touched an intraday high of Rs 3,594.65 and an intraday low of Rs 3,427.05.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded higher with benchmark NYMEX WTI crude oil were trading 1.91% up near $111.72 per barrel. Earlier, Crude oil prices surged on expectations that easing COVID-19 restrictions in China will push up demand and as industry data showed drawdowns in US crude inventories. The authorities allowed 864 of Shanghai's financial institutions to resume work, sources said on Wednesday, a day after the Chinese city achieved a milestone of three consecutive days with no new COVID-19 cases outside quarantine zones.
We expect crude oil prices to trade up with resistance at $115 per barrel with support at $109 per barrel. MCX Crude oil May contract has important support at Rs 8750 and resistance at Rs 8970 per barrel.
Aditya Birla Fashion Q4: Consolidated net profit at Rs 43.59 crore against loss of Rs 137.6 crore. Consolidated revenue was up 25.3% at Rs 2,283 crore against Rs 1,821.6 crore (YoY). Consolidated EBITDA rose 58.5% at Rs 373 crore against Rs 235.3 crore (YoY). EBITDA margin at 16.3% against 12.9% (YoY).
Ethos IPO updates:
Indian Overseas Bank Q4
Net profit jumped 57.9% at Rs 552.4 crore against Rs 349.8 crore (YoY). NII was up 14.7% at Rs 1,609.5 crore against Rs 1,403.2 crore (YoY). Gross NPA at 9.82% against 10.4% (QoQ). Net NPA at 2.65% against 2.63% (QoQ). Provisions at Rs 1,014 crore against Rs 1,065 crore (QoQ) and against Rs 1,380 crore YoY.
Market Update at 2 PM: Sensex is up 149.83 points or 0.28% at 54468.30, and the Nifty added 52.60 points or 0.32% at 16311.90.
Yes Bank to transfer Rs 50,000 crore bad debt to ARC: Sources
Cerberus, JC Flowers are in talks to buy 80% in ARC as both may pay 15% of asset value for ARC (asset reconstruction company) stake.
Yes Bank is going to transfer Rs 50,000 crore bad debt to ARC, quoting Sources, reported CNBC-TV18.
Cabinet allows PSU boards to suggest disinvestment
The Union Cabinet on May 18 approved a proposal to allow the board of directors of public sector undertakings (PSU) to recommend and undertake the disinvestment or closure of their subsidiaries, units, or stakes in joint ventures (JV).
Until now, while the boards could make equity investments to set up financial JVs and wholly-owned subsidiaries and undertake mergers and acquisitions subject to certain conditions. They largely had no control over the disinvestment and closure of their subsidiaries, units, or JV stakes.
Cabinet has approved main amendments to the National Policy on Biofuels
Cabinet has approved main amendments to the National Policy on Biofuels. The Cabinet to allow more feedstocks for production of Biofuels.
And also to grant permission for export of Biofuels in specific cases, reported CNBC-TV18.
Praj Industries was quoting at Rs 361.75, up Rs 14.00, or 4.03 percent and Bharat Petroleum Corporation was quoting at Rs 335.85, down Rs 6.60, or 1.93 percent.
Indian Oil Corporation was quoting at Rs 119.05, down Rs 5.35, or 4.30 percent and HPCL touched a 52-week low of Rs 238.80 and was quoting at Rs 243.55, down Rs 12.50, or 4.88 percent.
Here are the companies that have fallen off sharply from their Intraday Highs. Click for More
Morgan Stanley View On Bajaj Electricals
Broking house Morgan Stanley has kept equal-weight rating on Bajaj Electricals and cut target to Rs 1,050 from Rs 1,223 per share.
The adjusted profit is 30% below estimates, while consolidated business drives earnings miss.
The fans & lighting business are positives while appliances revenue declined. The company is now net cash and more than one year ahead of guidance, reported CNBC-TV18.
Bajaj Electricals was quoting at Rs 957.15, down Rs 40.70, or 4.08 percent on the BSE
Foreign selling in Asian bonds extends as U.S. yields surge
Emerging Asia ex-China bonds witnessed foreign outflows for a second straight month in April, due to higher U.S. yields and concerns over strict coronavirus lockdowns in China.
Overseas invesstors disposed a combined net total of $2.35 billion in South Korea, Thai, Indian, Indonesian and Malaysian bonds last month, data from regulatory authorities and bond market associations showed. It was the second consecutive monthly selling by foreigners in Asian bonds, according to the data.
ITC to announce Q4 earnings today:
Homegrown FMCG major ITC Limited (ITC) is expected to report a healthy growth of 10-12 percent on-year in consolidated profit after tax (PAT) for the fourth quarter of 2021-22. The company will declare its results on May 18. Sequentially, however, the profit is likely to remain flat.
Experts attribute the decline in profit to the year-on-year decline in in-home consumption and erosion of margins due to inflationary pressure on input costs.
Experts expect the Kolkata-based cigarette-to-hotel conglomerate to report consolidated earnings of Rs 4,100–4,250 crore for the quarter ended March 2022.
Ruchi Soya to acquire food retail business of Patanjali Ayurved
Board of directors of Ruchi Soya Industries approved business transfer agreement (BTA) with Patanjali Ayurved (PAL) to acquire the food retail business undertaking of PAL which consists of manufacturing, packaging, lablling and retail trading of certain food products along with manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra, as a going concern on a slump sale basis.
USFDA concluds assessment of Aurobindo Pharma unit
As already informed in the earnings call in Feb 22, the Pre-approval inspection was carried out during the period 8th Feb '22 to 15th Feb '22. On completion of the inspection, Form 483 was issued with 5 observations. Based on the inspection review and the written responses provided by the Company, the Agency has concluded that the assessment is completed with 'no remaining deficiencies', Aurobindo Pharma said in its release.
Market at 1 PM
Benchmark indices erased intraday gains and trading flat amid volatility.
The Sensex was down 30.95 points or 0.06% at 54287.52, and the Nifty was up 5.70 points or 0.04% at 16265. About 1774 shares have advanced, 1310 shares declined, and 115 shares are unchanged.
ETHOS SUBSCRIPTION UPDATES
Aether Industries IPO opens on May 24
Speciality chemicals company Aether Industries Ltd’s initial public offering (IPO) will open on May 24 for subscription and close two days later.
The IPO consists of a fresh issue of Rs 627 crore and an offer for sale of up to 2.82 million shares by its shareholders and promoters.
Of the proceeds, Rs 190 crore will be used to fund greenfield projects in Surat, Rs 138 crore to pay debts and Rs 165 crore for funding working capital requirements, the company has said.
HDFC Bank Ltd and Kotak Mahindra Capital Co Ltd are the lead managers to the issue.
Commodity price inflation, and not volumes, drives EXIM trade’s sharp growth: Nomura
Core EXIM trade rose nearly by a third this April versus April 2021, but this was largely driven by commodity price inflation rather than underlying volume growth, said Nomura in its India Logistics Monthly Report.
Year-on-year, EXIM trade’s growth was led by nearly 37% increase in imports, and about 18% increase in exports. Month-on-month, core imports declined by 4.5% and exports declined by 7.3%.
Year-on-year, aggregate volume growth of major ports was just around 6%, despite a weak base. In April 2021, the country had seen the onset of the second Covid wave. Read More
Morgan Stanley View On Dr. Lal PathLabs
Foreign research firm Morgan Stanley has kept equal-weight rating on Dr. Lal PathLabs and cut the target price to Rs 2,383 from Rs 3,015 per share.
The Covid-19 & allied test volumes are normalising and realisation per patient has compressed.
The volume growth is returning to mid-teens, while margin will remain capped in the near term.
Despite sharp YTD pullback, Morgan Stanley still find valuation full, reported CNBC-TV18.
S&P cuts FY23 India growth forecast to 7.3%
S&P Global Ratings on Wednesday cut India's growth projection for the current fiscal to 7.3 per cent from 7.8 per cent earlier on rising inflation and the longer-than-expected Russia-Ukraine conflict.
In its Global Macro Update to Growth Forecasts, S&P said inflation remaining higher for long is a worry, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment.
S&P had in December last year pegged India's GDP growth in the 2022-23 fiscal, which began on April 1, 2022, at 7.8 per cent. The growth projection has been cut to 7.3 per cent for the current fiscal. For the next fiscal the growth has been pegged at 6.5 per cent.
Paradeep Phosphates IPO Updates
The initial public offering of Paradeep Phosphates, India’s second largest manufacturer of non-urea fertilisers and di-ammonium phosphates (DAP) in the private sector, was subscribed 39 percent on day two with investors putting in bids for 10.44 crore shares against an IPO size of 26.86 crore units.
The price band for the offer has been fixed at Rs 39-42 per equity share of a face value Rs 10 each and the issue closes for booking on May 19.
Retail investors have bid for 75 percent of the shares set aside for them as against 13.15 crore, while the non-institutional investors’ portion was subscribed 10 percent on the launch of the IPO. Qualified institutional buyers have subscribed to 4,900 shares of the issue against their quota of 8.07 crore shares.
Around 50 percent of the net offer will be reserved for QIBs, 35 percent for retail investors, and the remaining 15 percent for non-institutional investors.
Bond Yields Updates:
Market at 12 PM
Benchmark indices were trading higher with Nifty around 16350.
The Sensex was up 287.92 points or 0.53% at 54606.39, and the Nifty was up 90.30 points or 0.56% at 16349.60. About 2105 shares have advanced, 936 shares declined, and 118 shares are unchanged.
UK Data Watch | UK Inflation stood at 40-year high of 9% and CPI inflation was up 2.5% (MoM) versus Reuters poll of 2.6, reported CNBC-TV18.
Buzzing
Shares of Dr Lal Pathlabs dropped over 7 percent on May 18 to hit a 19-month low, after the firm reported lower than expected March quarter earnings.
The stock dropped to Rs 2022.55 apiece today- a level last seen on 16 October 2020
Year to date, Dr Lal Path is down over 46 percent.
Today’s Stock Market Action
Gold Price Updates
Gold prices fell on Wednesday as the dollar recovered slightly, piling pressure on greenback-priced bullion alongside firm Treasury yields and an aggressive inflation stance by the U.S. Federal Reserve chief.
Spot gold dropped 0.2% to $1,810.49 per ounce, by 0557 GMT. U.S. gold futures slipped 0.6% to $1,808.10.
Motilal Oswal View on IOC
We expect a dividend payout to be ~51% in FY23-24 as well. IOCL trades at 7.5x consolidated FY24E EPS and 0.8x FY24E P/BV.
It is likely to benefit the most among its peers from an uptick in refining margin, further supported by a robust petchem margin in the near term.
We value the stock at 1x FY24E P/BV to arrive at our target price of Rs 164, an upside of 32%. We maintain our Buy rating.
Indian Oil Corporation was quoting at Rs 119.60, down Rs 4.80, or 3.86 percent on the BSE.
JSW Energy was quoting at Rs 283.00, up Rs 8.45, or 3.08 percent and trading with volumes of 90,910 shares, compared to its five day average of 101,710 shares, a decrease of -10.62 percent.
The share touched a 52-week high of Rs 408.70 and a 52-week low of Rs 110.25 on 14 October, 2021 and 17 May, 2021, respectively. Currently, it is trading 30.76 percent below its 52-week high and 156.69 percent above its 52-week low.
