Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities:
Market took a complete U-turn from Thursday's slump as bargain hunting following the recent crash and recovery in other Asian indices bolstered the sentiment back home. China's central bank cutting the 5-year loan prime rate to 4.45% from 4.6% and easing of Covid-related restrictions also provided a major leg-up to the market.
Technically, after a sharp price correction, the Nifty eventually took the support near 15750 and bounced back sharply. On daily charts the index has formed a double bottom formation and, on weekly charts, after a long time it has formed a long bullish candle, indicating further uptrend.
On weekly charts, the Nifty has reclaimed 16000 and is comfortably trading above the 10-day SMA. The reversal formation is likely to continue if the index succeeds to trade above 16000 and above the same it could move up to 16400. Further upside may continue, which could lift the index up to 16550. However, below 16000, upside would be vulnerable and the index could hit the level of 15800-15700.
Prashanth Tapse, Vice President (Research), Mehta Equities
Led by Reliance Industries and Tata Motors, bulls came back with vengeance primarily buoyed by a fall in the U.S Treasury bond yields and the US Dollar Index. Another positive takeaway was that all round buying was witnessed from FMCG and IT to Metal stocks.
Interestingly, the gains came despite a fall in overnight Wall Street amidst fears of inflation and waning hopes for U.S. and global economic recovery.
The technical picture has shifted to neutral/positive following today’s aggressive spike with all bullish eyes on Nifty’s biggest hurdles at 16411 mark. Expect a waterfall of selling only below the 15951 mark.
Vinod Nair, Head of Research at Geojit Financial Services:
The market displayed a confident yet calm rally throughout the day, supported by fortified global markets, especially the Asian market.
The Chinese Central bank cut a key interest rate to support growth, injecting optimism into emerging markets.
With concerns over an economic slowdown and rate hikes across the globe, investors will continue to invest with caution. Value stocks should do well during this consolidation period.
Rupee Close:
Indian rupee ended higher by 18 paise at 77.54 per dollar against Thursday’s close of 77.72.
S Ranganathan, Head of Research at LKP securities:
As equity investors brace for higher volatility on the back of the flip-flop in benchmark indices, the fact that markets are never priced to ground realities, the art of capitalising on the disconnect between earnings and stock prices creates pockets of opportunities.
The day witnessed keen investor interest in auto, pharma, metal and defence stocks as indices vaulted 3% with all sectoral indices ending firmly in the green.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
After witnessing sharp decline over the past two weeks, the equity markets ended this week on a positive note. However, following global cues, the India equity markets witnessed large volatility. Benchmark indices like Sensex 30 and Nifty 50 saw gains between 2-3%. Overall market breadth was positive with gains witnessed across mid-cap, small-cap and most sectoral key indices.
Metal sector rebounded sharply post steep correction in recent weeks. BSE IT index was down in an otherwise positive market this week.
FII’s continued with their selling in India. Markets remained wary of global growth-inflation expectations. With result-season coming towards the last leg, the focus will be more on the macro data points. Monetary policy tightening action by Central Banks globally amid high inflation will continue to weigh on market sentiments.
Market Close
Indian benchmark indices erased previous day losses and ended higher with Nifty above 16,200.
At close, the Sensex was up 1,534.16 points or 2.91% at 54,326.39, and the Nifty was up 456.80 points or 2.89% at 16,266.20. About 2468 shares have advanced, 801 shares declined, and 111 shares are unchanged.
Dr Reddy's Laboratories, Reliance Industries, JSW Steel, Nestle India and Tata Motors were among the top Nifty gainers, while losers included Shree Cements and UPL.
All the sectoral indices ended in the green with metal, pharma, capital goods, PSU bank and realty indices up 3-4 percent each.
The BSE midcap and smallcap indices rose 2 percent each.
Morgan Stanley View on Dr Reddy's Laboratories
The brokerage Morgan Stanley has maintained an overweight rating on Dr Reddy's Laboratories with a target of Rs 5,202.
The company continues to deliver granular growth across its businesses and continues to invest in complex generics, biosimilars and NCEs, said Morgan Stanley.
The firm targets double-digit growth in India and emerging markets, CNBC-TV18 reported.
JK Tyre and Industries Q4 Earnings
JK Tyre and Industries has posted 78.7 percent fall in Q4 consolidated net profit at Rs 40.2 crore versus Rs 189.1 crore and revenue was up 13.1% at Rs 3,312 crore versus Rs 2,927.3 crore, YoY
JK Tyre and Industries was quoting at Rs 120.65, down Rs 3.65, or 2.94 percent.
eMudhra IPO UPDATE:
ETHOS IPO UPDATE:
BSE Bankex index rose 3 percent led by the AU Small Finance Bank, Axis Bank, IndusInd Bank
Nomura View On Container Corporation
Research firm Nomura has kept buy rating on Container Corporation of India with a target at Rs 863 per share.
The Q4 results were missed the estimates on higher employee & other costs. The domestic profitability significantly below our estimates, said Nomura.
LLF for FY22 at Rs 465 crore is largely in-line with management’s guidance, while awaits commentary over long-term land leasing, reported CNBC-TV18.
Nifty PSU Bank index added 3 percent supported by the Canara Bank, Indian Bank, Bank of India
Market at 3 PM
Benchmark indices extended the intraday gains and trading at day's high level.
The Sensex was up 1,494.01 points or 2.83% at 54286.24, and the Nifty was up 449.30 points or 2.84% at 16258.70. About 2427 shares have advanced, 706 shares declined, and 114 shares are unchanged.
Prabhudas Lilladher View on Dr Reddy's Laboratories
"US and India revenues were healthy. We continue to expect steady earnings momentum and pickup in US generic business along with cost optimisation. Also, strong pipeline/new launches will drive steady growth in India and rest of the world.
"We expect 13 percent earnings per share compound annual rate over FY22-24 (excluding Revlimid) and broadly maintain our estimates at ‘Buy’ rating with revised target price of Rs 4,900.
"Delay in key ANDA (abbreviated new drug application) approvals and prolonged inflationary environment of raw material prices are key risks to our call."
HDFC Limited in a BSE filing
: The Corporation has been receiving queries from several investors seeking information on its aggregate foreign shareholding. With a view to have a fair and transparent disclosure and in order to avoid selective disclosure, we wish to inform you that as on May 13, 2022, the total foreign shareholding in the Corporation is 68.56% of its total issued and paid-up share capital, HDFC said in its exchange filing. The stock was trading at Rs 2,198.75, up Rs 62.40, or 2.92 percent. It has touched an intraday high of Rs 2,211.00 and an intraday low of Rs 2,152.75.
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Crude oil prices traded weak with benchmark NYMEX WTI crude oil were trading 0.45% down near $109.39 per barrel. Prices declined as concerns about weaker economic growth eclipse expectations of a demand rebound in China. Investors, worried about rising inflation and tighter monetary policies from central banks, have been reducing exposure to riskier assets. The tight supplies have capped downside in oil prices for the day.
We expect crude oil prices to trade sideways to up with resistance at $112 per barrel and support at $106 per barrel. MCX Crude oil June contract has important support at Rs 8,410 and resistance at Rs 8,650 per barrel.
eMudhra IPO updates
India's largest licensed certified authority (CA) in the digital signature certificates space, eMudhra Limited, opened its public issue for subscription today and there was 38 percent booking on the first day.
Investors have bid for 42.98 lakh shares against an IPO size of 1.13 crore units. Retail investors booked 73 percent or 42.33 lakh shares of the portion set aside for them. Non-institutional investors booked 3 percent or 65,656 shares allotted to them, while qualified institutional buyers were yet to subscribe to the issue.
Ethos IPO updates
The initial public offering of Ethos, one of the largest premium and luxury watch retailers in India, was subscribed 68 percent by the afternoon of the third and final day of the bidding on May 20.
Investors had bid for 27.41 lakh shares against an issue size of 39.79 lakh units. Retail investors had subscribed 77 percent of the portion set aside for them. Non-institutional investors had bid for 82 percent of the shares allotted to them, while qualified institutional buyers subscribed 47 percent of their quota of shares.
Indigo Paints Q4: Net profit was up 39.1% at Rs 34.6 crore against Rs 24.9 crore (YoY). Revenue grew 13.4% at Rs 288.4 crore against Rs 254.3 crore (YoY). EBITDA was up 25.3% at Rs 53.8 crore against Rs 42.9 crore(YoY). Margin at 18.6% against 16.9% (YoY).
Welspun Corp was trading at Rs 247.20, up Rs 38.45, or 18.42 percent. It has touched a 52-week high of Rs 249. It has touched an intraday high of Rs 249 and an intraday low of Rs 209.60. The scrip was trading with volumes of 936,235 shares, compared to its five day average of 96,802 shares, an increase of 867.16 percent.
Market Update at 2 PM: Sensex is up 1,313.72 points or 2.49% at 54105.95, and the Nifty up 394.40 points or 2.49% at 16203.80.
Sona BLW bets on global EV push
Indian auto parts maker Sona BLW Precision Forgings expects two-thirds of its revenues to come from electric vehicle (EV) components over the next few years, as automakers rush to build more clean cars, its chairman told Reuters.
Sona BLW, which produces drivetrain components such motors and gears, will invest about $130 million over the next three years towards its electrification push, Sunjay Kapur said in a recent interview.
With carmakers investing billions of dollars to build EVs, auto part suppliers are also diversifying their business towards new and clean technologies and moving away from gasoline-reliant supply chains.
"All our new investments will go towards electrification," Kapur said, adding that the bulk of Sona’s order book of $2.4 billion over the next few years is for EV components.
Sona BLW started investing in EV parts in 2015 and mainly supplies them to carmakers in North America, Europe and China.
Sona BLW Precision Forgings was quoting at Rs 551.45, up Rs 14.25, or 2.65 percent on the BSE.
Govt asks regulator to allow utilities to import up to 30% of coal
India has asked its federal power regulator to allow power generators to import up to 30 per cent of the country's coal requirement until March next year, according to a power ministry letter seen by Reuters.
India had asked utilities to import 10 per cent of its total requirement, or about 38 million tonnes, to blend with local coal as demand was outstripping supply, adding that delivery of 19 million tonnes had to be ensured by end-June. Click to read more
Zydus Lifesciences Q4 earnings:
Zydus Lifesciences has posted 41.5 percent fall in its Q4 net profit at Rs 397.4 crore versus Rs 679 crore and revenue was up 5.3% at Rs 3,864 crore versus Rs 3,670 crore, YoY.
The board approved share buyback of maximum Rs 750 crore at Rs 650 per share.
Karur Vysya Bank Q4 Results:
Karur Vysya Bank has reported Q4FY22 net profit at Rs 213.5 crore versus Rs 104.4 crore and net interest income was up 15.9% at Rs 710 crore versus Rs 612.6 crore, YoY.
The company won the single largest order in its history for supply of pipes valued at Rs 5000 + crores (approximately) in the United States, company said in its release.
SML Isuzu Q4 Earnings:
SML Isuzu has posted net loss of Rs 11.4 crore in the quarter ended March 2022 against loss of Rs 20 crore in the same quarter last year.
Revenue of the company was up 32.6% at Rs 342.4 crore versus Rs 258.1 crore.
Earnings before interest, tax, depreciation and amortization (EBITDA) was at Rs 2.4 crore versus EBITDA loss of Rs 5.4 crore, YoY
BSE Information Technology index added over 1 percent led by the Ramco SystemS, NELCO, 63 Moons Technologies:
Indian markets should be moving upwards next week: IIFL’s Sanjiv Bhasin
The Indian markets will soon bottom out and the “storm will pass in a week or 10 days”, according to Sanjiv Bhasin, director of IIFL Securities.
“I think we are close to bottoming out and we may have already made the bottom at 15,700… from May 23 (Monday next week) we should be moving upwards,” said Bhasin in an interview with CNBC-TV18.
He believes India “stands out in the crowd”.
Also read: Market live blog on stocks that are driving the sentiment
“Everything cannot be weighed against what is happening in the US and across the globe,” he said, adding that the stand-off between the country and Russia is hurting the former the most. Click to Read More
Market at 1 PM
Benchmark indices were trading near day's high with Nifty inching towards 16,200.
The Sensex was up 1,210.48 points or 2.29% at 54002.71, and the Nifty was up 368.10 points or 2.33% at 16177.50. About 2333 shares have advanced, 729 shares declined, and 126 shares are unchanged.
Credit Suisse View on Dr Reddy's Laboratories
The research house Credit Suisse has kept a neutral rating on Dr Reddy's Laboratories on high market expectations from Revlimid opportunity. It has kept a target of Rs 4,465.
The good launch momentum in the US will continue while concerns remain about potential litigation from payers for Revlimid generic, said Credit Suisse.
The market is factoring in sustenance of low price erosion environment, CNBC-TV18 reported.
Credit Suisse View on Dr Reddy's Laboratories
The research house Credit Suisse has kept a neutral rating on Dr Reddy's Laboratories on high market expectations from Revlimid opportunity. It has kept a target of Rs 4,465.
The good launch momentum in the US will continue while concerns remain about potential litigation from payers for Revlimid generic, said Credit Suisse.
The market is factoring in sustenance of low price erosion environment, CNBC-TV18 reported.
Nifty Pharma index gained 3 percent led by the Granules India, Dr Reddy's Laboratories, Aurobindo Pharma
ETHOS IPO SUBSCRIPTION UPDATE
Nomura View On HPCL
Broking house Nomura has maintained neutral rating on HPCL with a target at Rs 310 per share as Q4 was below estimates on lower refining inventory gain and weaker marketing margin.
The lower inventory gains drive weaker reported GRM, while core GRM was in-line.
The marketing sales volume was above estimate, but realised margin likely weak.
Its marketing losses to widen in Q1 as company to be most impacted among OMCs, reported CNBC-TV18.
Metropolis Healthcare is in talks with strategic partners for significant minority stake sale. The company is looking to raise over USD 300 million by selling stake to strategic partners: Bloomberg
Market at 12 PM
Benchmark indices were trading higher with Nifty above 16100.
The Sensex was up 1,165 points or 2.21% at 53957.23, and the Nifty was up 352.60 points or 2.23% at 16162. About 2384 shares have advanced, 646 shares declined, and 115 shares are unchanged.
IDBI Bank to sell entire stake in Ageas Federal Life Insurance
IDBI Bank has entered a Share Purchase Agreement (SPA) with Ageas Insurance International NV (Buyer) on May 19, 2022 to sell IDBI Bank'sentire stake of 20,00,00,000 equity shares in Ageas Federal Life Insurance CompanyLimited (AFLI) pursuant to exercise of Call Option by Ageas.
BSE Auto index rose 2 percent led by the Ashok Leyland, Tata Motors, Bosch
JK Lakshmi Cement was quoting at Rs 473.25, up Rs 51.10, or 12.10 percent and trading with volumes of 183,042 shares, compared to its five day average of 72,798 shares, an increase of 151.44 percent.
The share touched a 52-week high of Rs 815.25 and a 52-week low of Rs 368.65 on 29 July, 2021 and 12 May, 2022, respectively. Currently, it is trading 41.95 percent below its 52-week high and 28.37 percent above its 52-week low.
Equitas Small Finance fell most in four months after MD & CEO P N Vasudevan resigned.
Equitas Small Finance Bank was quoting at Rs 54.15, down Rs 5.15, or 8.68 percent and trading with volumes of 212,692 shares, compared to its five day average of 167,495 shares, an increase of 26.98 percent.
