Market Highlights: Sensex ends 485 points higher, Nifty at 11,389; Ashok Leyland up 10%, Ultratech Cement up 3.3%

After the Madaras High Court refused to open the Sterlitec Copper plant in Tamil Nadu, investors looked to steer clear of Anil Aggarwal's Vedanta Limited sending the stock lower by 6%. However, approaching the closing bell Vedanta was seen trading lower by just 1% at Rs 126 per share.

Over the past decade, IIFLWAM has evolved into one of the best wealth management franchises in the country, giving tough competition to the private sector and foreign banks. Over the past five years, it has become the alternate asset manager in India with unique product offerings. With IIFL ONE, the company is looking to revolutionize the way wealth management is offered in India. Traction on IIFL ONE remains healthy; however, improving the retention ratio remains the moot point. While in the near term, net inflows could be modest, we expect it to improve over the medium term. While there could be some pressure on profitability due to migration to IIFL ONE (net yields of 40bp in IIFL ONE v/s 50-60bp for other distribution assets), it would make revenues more stable and less susceptible to regulatory pressures. We largely maintain our FY21/22E EPS estimates. Buy with TP of INR1,240 (25x FY22E EPS).~ Motilal Oswal

HDFC Bank and Reliance Industries Ltd were the top Sensex contributors on Tuesday. These were followed by ICICI Bank, Kotak Mahindra Bank, HDFC, and Infosys. 

Ashok Leyland shares were up close to 9% in Tuesday making it the top BSE Midcap performer. The shares were trading at Rs 68 per share.

Despite reduced sales in India (DF)/the US/ROW/LATAM, Glenmark Pharma (GNP) delivered better-than-expected 1QFY21 performance led by product mix change and sharp reduction in other opex. 

We have raised our EPS estimate by 19%/14% for FY21/FY22E to factor in the cost savings and better traction in DF/Europe/ROW/LATAM with ease of the lockdown. We expect 17% earnings CAGR over FY20-22E, led by sales CAGR of 7%/5% in India/Europe and margin expansion of 380bp. We value GNP at 14x 12M forward earnings to arrive at a price target of INR495/share. While earnings trajectory is improving, we are yet see any meaningful improvement in return ratios. Maintain Neutral.~ Motilal Oswal

Reliance Industries Ltd (RIL) the oil-to-telecom conglomerate after having surged to record highs was not on the shopping list of mutual fund houses in July, on the contrary it was one of the most sold stocks. According to Primemfdatabase, mutual funds sold Rs 4,500 crore worth of Reliance Industries stocks in the month of July. The stock surged from Rs 1,737 per share at the beginning of July to end the month trading at a price of Rs 2,066 apiece. The stock surged 20% during the month, adding to its already phenomenal run that had seen it climb up from its March low of Rs 867 per share.

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Axis Securities, a subsidiary of Axis Bank, announces the launch of Global Investing - a smart solution for Indian retail investors to add the best of US stocks to their portfolio. Axis Securities has partnered with Vested Finance, an online investment platform that enables Indian investors to invest in the US stock market. Investors can now buy/sell shares of companies like Facebook, Apple, Netflix, Google, and more; or invest in theme-based baskets or ETFs; all in just a few clicks. With easy access to a robust global market, investors can not only enjoy the benefits of geographical diversification but also secure their portfolios from a single country and single currency risk. This one of a kind solution offers professionally curated portfolios and theme based baskets of stocks and ETFs, with a completely digital on-boarding and fund transfer process, thereby ensuring that global investing.

SBI Cards and Payment Services, the biggest initial public offering (IPO) of this calendar year so far, looks to be gaining momentum each day with the stock now hitting a fresh 52-week high repeatedly. On Tuesday as bulls took control of Dalal Street, SBI Cards and Payment Services share price surged 1.5% to trade at Rs 815 per share. The only listed player from the cards space of the financial services industry entered the stock exchanges in March, when the weak market sentiment pulled it way below its issue price, slashing expectations that many had from the mega Rs 10,000 crore IPO.Read full story

Petronet LNG share price jumped over 5 per cent to Rs 267.70 apiece on BSE after the company reported a consolidated net profit of Rs 499.79 crore in the April-June quarter. The consolidated net profit, however, declined 11 per cent as the company had reported a profit of Rs 561.94 crore in the corresponding quarter of the year-ago period. With today’s gain, the stock price has rallied over 56 per cent from March lows of Rs 170.75 apiece.

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Gold prices were trading higher on Tuesday after rising 2 per cent in the previous session, supported by lower US bond yield and escalation in US-China trade tensions. Gold October futures were trading Rs 280 or 0.53 per cent up at Rs 53,555 per 10 gram, while the silver September futures were ruling at Rs 70,400 per kg, up Rs 1,245 or 1.80 per cent in early trade on MCX.

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The Madaras High Court, according to report, has turned down a petition seeking the reopening of the closed Sterlite copper smelting plant in Thoothukudi, Tamil Nadu.

Transport Corporation of India’s revenue declined by 46% YoY, on account of overall weak demand scenario & Covid-19 related disruptions. EBITDA margins contracted by 70bps YoY to 8.5% and PAT declined by 67% on account of weak operating leverage. The worst earnings downgrade has already been factored in the stock price and we expect revival from H2FY21E. Focus on client addition in E-commerce, pick-up in seaway business, demand from warehousing space, faster adoption of e-way bill and gradual pick-up in Auto sector will drive growth. We remain positive on TCI given its strong presence in warehousing space, multimodal logistics services and supply chain management. We value TCI at P/E of 16x on FY22E, with a target price of Rs.253 and maintain “Buy” rating.

~ Geojit Financial Services

Sensex and Nifty started Tuesday’s trading session with gains as they look to recoup losses made on Friday. S&P BSE Sensex opened 50 points higher but in a few minutes it scaled as high as 220 points while the NSE Nifty50 managed to breach the 11,300 mark. All stock markets in North America, ended higher yesterday, except Dow Jones. Asian peers were mixed on Tuesday morning but domestic indices shrugged-off a weak start and jumped over 200 points. Analysts believe domestic markets will continue to take cues from global markets. Volatility slipped below 21 levels.

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The US Dollar has weakened overnight, especially against majors. US nominal yields have come off 1-2bps across the curve. Negative real rates are weighing on the US Dollar. The cross-currency basis is flat for tenors up to 1 year. There is absolutely no term premium. This indicates that there is a lot of demand, especially among US corporates to borrow in US Dollar and swap it into other currencies especially the Euro. Stocks in Asia are a bit lower. The Yuan has appreciated overnight. Other Asian currencies with the exception of the Indonesian Rupiah are trading stronger against the US Dollar Rupee is likely to open around 74.77 and trade 74.65-74.95 range intraday. The RBI continues to absorb inflows aggressively: Abhishek Goenka, Founder and CEO, IFA Global

Hindustan Aeronautics Ltd, Zee Entertainment Enterprises, Gujarat Industries Power, GTL Infrastructure, Indo Count Industries, KNR Constructions, SPML Infra, TCNS Clothing, Uflex, Vascon Engineers, etc., are among 36 companies that are set to announce their quarterly earnings today.

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The recovery of adjusted gross revenue (AGR) dues of the insolvent telecom operators like Reliance Communications and Aircel has got more complex as the Department of Telecommunications (DoT) on Monday told the Supreme Court that the spectrum of these companies belong to the government and cannot be part of the insolvency process. “Assets owned by a third party and held by the company under insolvency, in trust, cannot be sold. The people of the country are owners of the spectrum like all other natural resources and cannot be sold under insolvency and bankruptcy code (IBC). Spectrum is not defined as an asset under the IBC,” solicitor-general Tushar Mehta told a bench led by Justice Arun Mishra.

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Along with the comprehensive agriculture market reforms undertaken via three Ordinances recently to facilitate unfettered market access for farmers, the onset of options trading in three agriculture commodities — wheat, maize and mustard — last month could potentially give another boost to price realisation by farmers. Of course, these are still very early days and the options introduced on the commodity exchange NCDEX is currently drawing minuscule volumes, compared to the total trade in the three commodities. Analysts, however, say the prospects are bright, given that the rules allow the seller (farmer) to set his own price (within a defined band) for selling the crops, with an obligation on the buyer to lift the goods (compulsory delivery).

Domestic equity market benchmarks BSE Sensex and Nifty 50 were staring at a tepid opening on Tuesday. In the last hour of the previous session, share markets witnessed a sharp surge taking cues from the European markets, which recovered from their losses. In today’s trade, market participants will continue to track global developments and trends in coronavirus. Markets will also react to the outcome of AGR hearing, while participants will closely eye the US and China tussle. along with the upcoming OPEC meeting.

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Today Dalal Street will see Hindustan Aeronautics, ZEE Entertainment, JK Cement, KNR Construction, Gujarat Industries Power Company, GTL Infrastructure, Vascon Engineers, among other announce their quarterly results.

The flow of credit continues to decelerate as the economy remains in slowdown mode and bankers stay cautious. While non-food loans grew at just 5.2% year-on-year in the last fortnight of July, the lowest levels seen since March 2017, the value of corporate bonds issued in July, at Rs 49,013 crore, was the smallest in at least 10 months. The value of commercial paper (CP) — a short-term borrowing instrument for companies —floated in July was the smallest in many months at Rs 91,338 crore. Since April, non-food credit has contracted by 1.3% with the outstanding levels down at Rs 101.87 lakh crore, data released by the Reserve Bank of India (RBI) shows.

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SBI Ecowrap said degrowth in corporate GVA (better than expected results of some financial and non-financial companies) has been significantly better than revenue degrowth in Q1 FY21 as far as the results of the listed companies are concerned. So far, around 1,000 listed entities have announced their results for the first quarter. The results indicate more than 25 per cent decline in topline and more than 55 per cent decline in bottomline. However, it is interesting to mention that the decline in corporate GVA (gross value added) is only 14.1 per cent, it said.

State Bank of India’s research report Ecowrap expects the country’s GDP to contract by 16.5 per cent during the first quarter of the current fiscal. Earlier in May, Ecowrap had estimated Q1 FY21 GDP contraction at over 20 per cent and now pegs it at much lower contraction of 16.5 per cent for the quarter, “though with the relevant caveats in the current uncertain scenario”, the research report released on Monday stated.