Share Market Highlights: Sensex ends in red at 52,861 pts, Nifty holds above 15,800; RIL, TCS among drags

Domestic benchmark indices reached all-time highs on Tuesday but failed to hold on to gains and closed in the negative territory. 

Sensex and Nifty were trimming losses ahead of the closing bell to trade flat with negative bias. 

Bank Nifty was up 0.93% while Sensex and Nifty turned red. The index was helped by an 8% rally in AU Small Finance Bank, 2.5% jump in HDFC Bank and a 1.3% jump in Kotak Mahindra Bank.

S&P BSE Sensex was down 70 points ahead of the closing bell while Nifty 50 was just above 15,800. Sensex had earlier in the day reached fresh all-time highs. 

Tech Mahindra, TCS, Reliance Industries, Coal India, Tata Motors, and Maruti Suzuki India are some of the major laggards on Dalal Street.

Broader markets mirrored the fall and slipped into the red on Tuesday. India VIX, the volatility gauge, jumped more than 1% as indices started dancing between gains and losses.

Sensex and Nifty slipped into the negative ahead of the closing bell. Benchmark indices were trading flat with a negative bias. 

TCS and Reliance Industries Ltd. were down in the red on Tuesday with minutes left before the closing bell. While TCS was down 1.7%, RIL dived 1.13%.

With less than half an hour left before the closing bell Sensex was once again above 53,000 while Nifty was inching closer to 15,900. 

Good and Services Tax (GST) collection for June came in at Rs 92,849 crore, falling after successive months where collection was above Rs 1 lakh crore mark. 

Tata Motors shares were down 8% on Tuesday. The stock dived after the company informed the bourses that its subsidiary Jaguar Land Rover expects operating cash outflow of about £1 billion with a negative EBIT margin in the second quarter. Global chip shortage has hit Jaguar’s business and is expected to continue impacting operations throughout the second quarter. 

Smallcap shares were underperforming on Dalal Street during the final hour of trade. The NSE Nifty Smallcap 50 index was down 0.85% while the Nifty 50 was up 0.07%.

We expect CPI to rise to 6.7% in June, driven by a sharp increase in core inflation, which we forecast will accelerate to 7.0% y/y, a seven year high. Both headline and core CPI are likely to be above RBI’s target band for two consecutive months, the first time this has happened since the adoption of the inflation-targeting mandate. If CPI inflation is close to our forecast, it will average close to 5.8% y/y in Q2, well above than RBI’s June policy estimate of 5.2%. Another challenge for the RBI is inflation’s relatively high persistence, which has increased amid the return of some supply disruptions in April-May.

~ Barclay’s

Sensex scaled fresh all-time high on Tuesday, reaching 53,129 as bulls continued to rally. Nifty reached a high of 15,914.

BSE Sensex surged 250 points or half a per cent to hit fresh record high of 53,129.37, surpassing the previous high of 53,126. NSE Nifty was ruling at 15,914.20, just shy of its record high level

Zomato, online food delivery platform, shares were trading with a strong premium in the primary market, after the company received SEBI’s go-ahead to raise Rs 8,250 crore through an IPO. Info Edge, a key shareholder of Zomato, has reduced the size of its offer for sale (OFS) by half to Rs 375 crore from Rs 750 crore planned earlier. On Tuesday, Zomato shares were seen quoting at a premium of Rs 16.5 apiece, over the tentative price band of Rs 70-72 a share. 

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Adani Total Gas, SAIL, and NMDC are some of the newly crowned large-cap stocks on Dalal Street. The Association of Mutual Funds in India (AMFI), in its semi-annual review, has upgraded 7 midcaps stocks to large caps while reclassifying seven others out of the large-cap pocket into midcap. The January-June reclassification by AMFI is on expected lines as predicted by brokerage firms. AMFI reviews the market capitalization of all listed companies semi-annually and reclassifies them accordingly. Based on the revised list released by AMFI, fund houses rejig their portfolios to match the fresh classifications. 

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“The rising trend channel implies potential upside target in the range of 16200-16500 levels with downside supports in range of 15730-15640 followed by 15450. Since June the Index has faced resistance near 15900 levels. In Today’s session prices have made an attempt to move above 15900 levels, sustainability above the same would lead to immediate upside potential towards 16050-16100 zone. Failure to close above 15900 would lead to near term consolidation between 15900-15640 considering the strength in DXY which could act as a headwind in the short term & imply volatility along the way,” said Anu Jain, Head-Equity Broking, IIFL Wealth.

Nifty IT, NIfty FMCG, Nifty Pharma, and Nifty PSU Bank indices were down in the red on Tuesday while all other sectoral indices surged higher. 

HDFC Bank’s share price was up 2.3% on Tuesday, trading at Rs 1,529 apiece among top performers on Sensex. Shares of the private sector lender rose as investors reacted to the April-June quarterly business update provided by the company. The largest private sector lender in the country saw healthy business growth during the second wave of the pandemic advances growing 14.4% on-year basis. HDFC Bank share price is down more than 6% since the end of February this year when the stock reached a fresh 52-week high of Rs 1,650 apiece.

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Bulls look to be in control yet again on Dalal Street, pushing the benchmark indices higher for the third day straight. Sensex was nearing its all-time high whole Nifty was hovering around 15,900.

At the higher end of the price band, GR Infraprojects is attractively priced at a P/E ratio of 8.5 times FY21 EPS. This is lower as compared to Hindustan Construction (14.8 times), KNR Constructions (15.2 times), and Dilip Buidcon (17.4 times). Given factors such as steady growth in topline and bottomline, stable margins, robust return ratios, healthy order book, lower debt ratios, and attractive valuations, we remain positive on the prospects of this issue,” INDmoney said in a report.

GR Infraprojects has reported steady growth in topline and bottomline over the last three years. The company has gradually emerged as an integrated road EPC player. It has executed more than 100 road projects (since 2006) across 15 states with one of the fastest growth in order book (10x) over FY14-21. The company also has a strong balance sheet, with lower Debt/ Equity and higher interest coverage ratio as compared to peers. The company has got 98% of its order from higher-margin road projects,  as compared to peer average of ~70%. The high order book also provides good visibility for the company, INDmoney said in a report.

IndiGo, Spicejet and other airline share prices surged up to 5 per cent on BSE on Tuesday, a day after the Ministry of Civil Aviation raised the flight capacity allowance to 65 per cent. Analysts say even though the aviation ministry increased flight capacity to 65 per cent, rising fuel prices, slack monsoon period and fear of an impending third Covid-19 wave could dampen the upward momentum for airline stocks. 

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PI Industries, Hindustan Petroleum Corporation, IGL, Petronet, Alkem Labs, HAL, and Abbott India have been reclassified as midcaps from largecaps.

Adani Total Gas, NMDC, Apollo Hospitals Enterprises, Cholamandalam Investment and Finance, Steel Authority of India, Bank of Baroda, and Honeywell Automation India have been reclassified from Midcaps to Largecaps by AMFI. 

“With oil prices rising to the roof, the dollar-rupee is opening slightly higher at 74.33 and stock markets consolidating after a two day rise. Oil will be a concern for the otherwise rising rupee while market awaits tomorrow’s  FED meeting minutes. Range for the day 74.10 to 74.60 with imports to be covered at 74.10-15 while exports to wait for covering at 74.50 and above,” said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

After rising earlier, Info Edge shares slipped into the negative territory to trade at Rs 5,420 per share. During the initial hours of trade, Info Edge share price had soared to hit an intra-day high Rs 5,567 per share. 

Investment Advisors Limited (KIAL) announced that it has achieved the first close of its new Kotak Pre-IPO Opportunities Fund, raising Rs 1,386 crore (approx. USD 185 million). The Pre-IPO Fund will target a range of India focused late-stage new-age businesses with a strong moat of technology.The fund had initially targeted a corpus of Rs 1,000 crore, which was oversubscribed within three months of launch. The fund exercised its greenshoe option for Rs 386 crore.  

Clean Sciences and Technology’s Rs 1,546 crore initial public offering (IPO) opens for subscription tomorrow, July 7. Investors can bid for the IPO in the price band of Rs 880-900 per equity share of face value Rs 1. Clean Sciences’ issue is entirely an offer for sale (OFS) by existing investors, including promoters of the company and does not involve a fresh issue. Post IPO, promoter and promoter group shareholding will drop to 78.51% from 94.65%. On the other hand, public shareholding in the firm will increase to 21.49% from the current 5.35%. The subscription window for Investors will remain open from tomorrow till the end of the week. 

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“The index is inching towards the 15900 mark which is the upper end of the current range. We need to close above this level for the upside to resume which can take the Nifty to 16100. If we are unable to get past 15900 and close above it, there is always a possibility to take a U-turn from the current levels. The bias is on the upside and any dip or intraday correction can be utilized to buy this market,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.

Bank Nifty has added to its gains on Tuesday, helped by a strong rally in AU Small Finance Bank, HDFC Bank and Federal Bank. The index is up 262 points or 0.75%.

“Many global market experts are warning of bubbles in many asset classes, most prominently in equities. Equities, globally, are over-valued by all matrixes. But, interestingly, most bears warning about the collapse of the bubble are fully invested. These “fully invested bears” reflect the present market dilemma. Most bears are fully invested because the usual triggers for a sharp correction – persistent inflation, hawkish Fed, signals of imminent recession – are absent. So, the bull juggernaut may continue to roll on; but investors have to exercise caution. Some rebalancing of portfolios in favor of fixed income may be initiated. Markets are likely to respond positively to many Q1 FY22 numbers coming out from this week onwards. Brent crude at $77 is a serious macro concern,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices today in India were trading at a two-week high, on the back of international rates on a subdued dollar. On Multi Commodity Exchange, gold August futures were trading Rs 146 or 0.31 per cent up at Rs 47,445 per 10 gram, as against the previous close of Rs 47,299. Gold prices again moved above Rs 47,000 level this month on July 2. Silver September futures were up Rs 233 or 0.33 per cent at Rs 70,272 per kg.

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Sensex and Nifty moved between gains and losses on the opening bell. Minutes into the day’s trade Sensex was seen closing in on 53,000 mark while Nifty was above 15,850.

Sensex gave up pre-open gains to trade flat with positive bias ahead of the day’s opening bell while Nifty 50 index was down with marginal losses.

Sensex breached 53,000 during the pre-opens session but moved lower soon while the Nifty 50 index was trading flat with negative bias but holding above 15,800.

BSE Sensex and Nifty 50 could start in red on Tuesday, after rising for two consecutive sessions. Trends on SGX Nifty were negative, as Nifty futures were trading 24 points or 0.15 per cent down at 15,839.50 on Singaporean Exchange. The equity market would continue to weigh economic recovery and pace of vaccination against the potential risk from Covid third wave.

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