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The bulls took back all the momentum from the bears on Friday, as benchmark indices managed to end the day and week on a strong note.
The Sensex closed over 1 percent up, while the Nifty ended above 11,350. Both indices posted their biggest one-day gains in more than a month.
The Sensex ended 1.05 percent up at 37,556.16, while the Nifty ended 1.03 percent higher at 11,360.80. The market breadth was positive as 1,736 shares advanced, 942 shares declined, and 158 shares remained unchanged.
The Nifty once again managed to scale its crucial hourly moving averages. In terms of the wave structure, the minor dip over the last couple of sessions was a fourth wave correction.
"This means to complete an Impulse structure on the upside a leg on the upside looks imminent. Once Nifty crosses the recent high of 11,390, it can stretch towards 11,450 & 11,640," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan, told Moneycontrol.
He said that a fourth wave correction, however, is typically a sideways correction. "Hence a possibility of consolidation cannot be ruled out before the index crosses the level of 11,390," he said.
Ratnaparkhi feels that on the downside, 11,250-11,200 shall continue to act as a key support zone for the index.
Let us take a look as to which stocks have reacted the most last week and what made them move:
Jet Airways' shares fell around 7 percent on Friday as investors turned wary of reports of a financial crunch in the airline. The stock touched an intraday high of Rs 325 and an intraday low of Rs 301.25. In a statement issued to the media, the airline has said that some of the cost cutting measures include sales and distribution, payroll and maintenance, among others.
Jet said that the “airline management is in dialogue with key stakeholders to enlist their full support and cooperation for realising necessary savings.”
According to a report by Financial Express, Jet's top management has pitched for a nearly 15 percent cut in their pilot's salary and a reduction in the number of leaves to reduce employee cost. The airline is meeting with their pilots in Delhi and Mumbai over two days for negotiating these terms. Jet Airways CEO Vinay Dube, along with EVP flight operations and engineering Nikhil Vaid and chief people officer Rahul Taneja, will be addressing the pilots.
Oil and Natural Gas Corporation (ONGC) reported a rise of 4 percent in net profit for the June quarter at Rs 6,143 crore against Rs 5,915.2 crore during the previous quarter. The company’s revenues rose 14 percent at Rs 27,212 crore against Rs 23,970 crore on a quarter on quarter basis.
At the operating level, the company reported a jump of 29 percent in its earnings before interest, taxes, depreciation and amortisation at Rs 14,695 crore against Rs 11,382 crore. The company has posted a crude price realisation at USD 71.48 per barrel, a rise of 47 percent year on year, while the crude oil output is seen at 5.03 million tonnes, down 5.3 percent year on year.
Shares of ICICI Bank gained 3 percent on Monday morning as investors reacted to its June quarter performance, where provisions saw a major jump. The stock touched an intraday high of Rs 303.30 and an intraday low of Rs 298. The lender had reported a net loss of Rs 119.5 crore in the first quarter of FY19 compared to a profit of Rs 2,049 crore in the same quarter last year. This is the first loss reported by the bank since listing in 1998.
The net interest income or NII, the difference between interest earned and expended, was up 9 percent at Rs 6,102 crore from Rs 5,590 crore. Provisions were up 129 percent year-on-year (YoY) at Rs 5,971 crore. However, it was down 10 percent quarter on quarter (QoQ). Recoveries for the quarter were at Rs 2,036 crore.
Shares of Axis Bank on Tuesday fell nearly 4 percent after the private lender reported 46 percent fall in net profit for April-June quarter. The stock dropped 3.23 percent to settle at Rs 550.10 on BSE. During the day, it went down by 3.59 percent to Rs 548. The company's market valuation diminished by Rs 4,708.84 crore to Rs 1,41,265.16 crore.
On the equity volume front, 9.43 lakh shares of the company were traded on BSE and over 2 crore shares changed hands at NSE during the day. The bank had registered a net profit of Rs 1,306 crore in the June quarter of 2017-18. The lender's asset quality worsened as gross non-performing assets (NPAs) rose to 6.52 percent as on June30 of this year, from 5.03 percent on June 30, 2017. Likewise, net NPAs or bad lo ans increased to 3.09 percent of advances
furnished by June-end from 2.30 per cent a year ago.
Shares of ACC gained around 13 percent on Tuesday morning as investors cheered the company’s results. The stock touched an intraday high of Rs 1,468 and an intraday low of Rs 1,395.10. The company posted a higher-than-expected 1.2 percent rise in second-quarter profit on Monday, helped by a fall in expenses. Standalone profit was Rs 326 crore ($47.4 million) for the quarter ended June 30, compared with Rs 322 crore a year earlier, the Mumbai-based company said in a statement.
Cement sales volume rose 7.4 percent to 7.24 million tonnes in the quarter, it said. Quarterly net sales of the company, which is a unit of the world's largest cement maker, Lafarge Holcim, fell 2.7 percent to Rs 3,848 crore. Brokerage houses have largely cheered the company’s results, citing better realisations as well as modest cost inflation.
Morgan Stanley said that ACC’s earnings beat was driven by robust volumes as well as better realisation. It has an overweight call on the stock with a target of Rs 1,887 per share. With utilisation at 89 percent being close to peak, the margin expansion could drive earnings.
Shares of Reliance Industries touched 52-week high of Rs 1,202.95, rising 1.5 percent intraday Wednesday as company won an arbitration award worth Rs 56.44 crore. "An international arbitration panel has issued an award in favour of Reliance, BP & Niko (consortium) rejecting completely the claims of the Government of India against the consortium in respect of migrated gas," company said in press release.
All the contentions of the consortium have been upheld by the majority with a finding that the consortium was entitled to produce all gas from its contract area and all claims made by the Government of India have been rejected.
Tata Motors slipped over 4 percent in morning trade on Wednesday after the global automaker reported a consolidated net loss for the quarter ended June at Rs 1,862.57 crore, missing estimates by a huge margin. Reacting to the results, shares of Tata Motors slipped over 4 percent in morning trade and was trading close to its 52-week low of Rs 247.30 on the NSE. It was the top most loser on Nifty. Tata Motors DVR was also down over 3 percent.
Last year, the same quarter when the company had reported a one-time gain of Rs 3,600 crore after recalibrating the method of calculating pension liabilities at Jaguar Land Rover its net profit had come in at Rs 3200 crore. Tata Motors would have been in loss same quarter last year if not for this one-time gain.
Bank of America Merrill Lynch maintains a buy rating on Tata Motors post Q1 results but slashed its target price to Rs 400 from Rs 425. JLR missed margins on destocking impact. CV sales growth was strong for India region. Full year EBIT margin guidance of 4-7 percent is maintained, but the global investment bank reduces FY19/20 EPS by 15%/12%. The risk-to-reward is however favourable for investors.
CLSA maintains a sell call on Tata Motors post Q1 results but slashed its target price to Rs 250 from Rs 295 earlier. Weak JLR performance was dragged down to a consolidated Q1 loss.
Shares of Avenue Supermarts, the operator of D-Mart, rose over 4 percent on Tuesday morning as investors cheered the firm’s results for June quarter. The stock touched an intraday high of Rs 1,663.80 and an intraday low of Rs 1,622.00. The company reported a strong 43 percent rise in net profit for the March quarter at Rs 250.6 crore. The firm had reported Rs 174.8 crore profit during the same quarter of last year. Its revenues grew 27 percent at Rs 4,559.4 crore against Rs 3,598.1 crore, year on year.
At the operating level, the company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) soared 39 percent to Rs 423 crore against Rs 303.1 crore in the previous year. The operating margin came in higher at 9.3 percent against 8.4 percent last year.
JPMorgan observed that the company had a good June quarter performance. Lower interest costs further boosted net profit growth, it said, adding that while valuations are expensive, the stock is already factoring in optimism. It has raised earnings estimates due to higher revenue growth assumptions. Citi said that the results have captured medium-and-long-term growth/return outlook. The business also captures management’s solid execution track record.
Shares of Indiabulls Housing Finance gained 6.4 percent intraday Friday on the back of strong numbers declared by the company in the quarter ended June 2018. The company has reported a rise of 30 percent in consolidated net profit at Rs 1,048.68 crore for the quarter ended June. The company's net profit in the corresponding April-June period of 2017-18 stood at Rs 804.89 crore. Revenue during the quarter increased to Rs 4,071.32 crore from Rs 3,288.24 crore in the year-ago period.
Nomura has upgrade Indiabulls Housing to buy from neutral call and raised target to Rs 1,750 from Rs 1,500 per share. The research house raise profit
estimates of the company by 3-7 percent and expect RoE of 27-29 percent on increased net worth.Credit Suisse has maintained outperform rating on
Indiabulls Housing and raised target to Rs 1,650 from Rs 1,600 per share. The company's loan book is growing at 33 percent YoY, which is among the fastest of large housing finance companies, said Credit Suisse.
Jewellery to watchmaker, Titan, reported 31 percent increase in its net profit for the June quarter at Rs 349.2 crore against Rs 266.9 crore during the same quarter of last year. The company’s revenue rose 8 percent at RS 4,319 crore against Rs 3,992 crore year on year.
The company posted strong rise of 27 percent in its EBITDA at Rs 495.3 crore against Rs 389 crore year on year. Its operating margin came in at 11.5 percent against 9.7 percent during the corresponding quarter of last year.
The company’s jewellery EBIT grew 16 percent at RS 393 crore against Rs 339 crore year on year, while the watches business’ EBIT grew to Rs 111 crore against Rs 49 crore.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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