Sensex ends 10 points higher; TCS emerge top loser ahead of results

Closing bell

The 30-share BSE index Sensex ended 10.25 points or 0.03 per cent higher at 38,730.82. The index opened in red and hit the intra-day low at 38,435.87. After briefly entering the positive zone, Sensex hit the intra-day high 38,814.23 in a choppy trade.

The top gainers in the pack were Bajaj Finance, Sun Pharma, Hero MotoCorp, L&T and Reliance while the laggards were TCS, Yes Bank, HCL Technologies, ITC and Asian Paints. Among the sectoral indices, realty stocks emerged the top gainer trading higher by 2.81 per cent while the major loser was the consumer durables index ending lower by 6.76 per cent.

However, the broader index Nifty closed 2.70 points or 0.02 per cent at 11,555.90. The gainers pack was led by the stocks of Sun Pharma, Bajaj Finance, IOC, Bajaj Finserv and Ultra Cement while the stocks of Titan, UPL, GAIL, TCS and Asian Paints were top stocks ending in red.

Hero MotoCorp revamps leadership team

Hero MotoCorp has created the Emerging Mobility business unit. Representative image.

In its commitment to stay ahead of the emerging mobility trends, country's largest two-wheeler manufacturer, Hero MotoCorp on Tuesday said it has revamped its leadership team. As part of this process, Hero MotoCorp has assigned the role of the Chief Technology Officer (CTO) to Vikram Kasbekar, while Rajat Bhargava has been given the responsibility to head the newly created ‘Emerging Mobility’ Business Unit.

Hero MotoCorp has created the ‘Emerging Mobility’ Business Unit to give an impetus to new mobility trends such as Electric Vehicles (EVs), the company said. Read more on the new leadership team and the newly created emerging mobility business unit here

The stocks of Hero MotoCorp were trading 3.14 per cent at Rs 2,455

Bitcoin near two-week highs

Bitcoin jumps 9 per cent overnight.

Bitcoin held near its highest for two weeks after surging as much as 9 per cent overnight, a move analysts said was probably driven by hopes that cryptocurrencies are gaining wider acceptance after Facebook disclosed plans for a digital coin. Bitcoin touched $12,833 overnight on the Bitstamp exchange , its highest since June 27, before pulling back. More on the bitcoin price movement here

European shares

German shares tumbled 1.3 per cent.

European shares fell as a profit warning from chemicals giant BASF led to a slide in German shares, which were on course to post their biggest drop in two months.

The pan-European STOXX 600 index fell 0.7 per cent by 0815 GMT, in line with its Asian peers and Wall Street overnight amid dimming hopes of a sharp interest rate cut by the US Federal Reserve later this month. German shares tumbled 1.3 per cent. Read more on the European share markets here

Sugar output to fall

Maharashtra's cane production could fall 44% to 6 million tonnes. File Photo

India's sugar production could fall by 18 per cent in 2019-20 as last year's drought forced farmers to curtail their sugar cane plantings while lower monsoon rains this year are limiting the crop's growth, a senior industry official said. The lower production could help India to reduced stockpiles that have risen because of two years of record production and lower-than-expected exports. Read more on the sugar production and output in India here

Nifty Call

The CNX Nifty logo is displayed on a wall at the National Stock Exchange (NSE) in Mumbai, India, on Monday, May 19, 2014. Indian stock-index futures rose and rupee forwards strengthened as benchmark gauges advanced to record highs last week after the main opposition alliance's biggest election win in 30 years. Photographer: Dhiraj Singh/Bloomberg

The market breadth of the Nifty index is slightly biased towards declines. The India VIX has slipped 0.25 per cent to 13.81 levels. The Nifty Mid and Small-cap indices have recovered. Buying interest is seen in Nifty Pharma which has advanced 2.5 per cent while selling pressure is in Nifty IT index which has slumped 1 per cent.

Traders can buy the contract on a rally above 11,575 levels with a fixed stop-loss. Read our Nifty Call for July futures here

Sensex in green, Nifty in red

The 30-share BSE index Sensex was trading 16.67 points or 0.04 per cent higher at 38,737.24 led by industry heavyweights.

The top gainers were Sun Pharma, Bajaj Finance, L&T, Reliance, and Hero MotoCorp while the laggards were TCS, Asian Paints, HDFC, HCL Technologies, and ITC. Sectorally, healthcare, capital goods and realty emerged major gainers while consumer durables stocks were the top losers, trading lower by 6.95 per cent.

The NSE index was on the other hand, trading 11.65 points or 0.10 per cent lower at 11,546.90. The gainers pack include Sun Pharma, Bajaj Finance, IOC, Bajaj Finserv and Ultra Cement while the losers were Titan, UPL, GAIL, TCS and Asian Paint.

Broker's call

Elara Capital

APL Apollo Tubes  (Buy)

CMP: ₹1,613.85

Target: ₹2,267

APL Apollo Tubes is a market leader in the domestic ERW (electric resistance welding) pipe industry with a current market share of about 18 per cent. It is among the fastest-growing ERW pipe firms, with a capacity CAGR of about 24 per cent over FY09-19. During the past three years, it has grown about 3x rate of industry growth, and we believe is well placed to continue strong momentum. Read the Broker's call on APL Apollo Tubes here

Dr Reddy's new launch

Dr Reddy’s Laboratories Ltd has launched an over-the-counter (OTC) store-brand equivalent of Mucinex D Extended Release Tablets in two strengths. There are Guaifenesin 600 mg and Pseudoephedrine HCl 60 mg, and Guaifenesin 1200 mg and Pseudoephedrine HCl 120 mg in the United States market, as approved by the U.S. Food and Drug Administration (USFDA). Read more on Dr Reddy's new launches here

The stocks of Dr Reddy's were trading 0.39 per cent higher at Rs 2,606

Buyback tax

Finance Minister Nirmala Sitharaman in her maiden Budget, proposed to levy a tax on buybacks by listed companies. The tax, at 20 per cent, may nudge companies to payout surpluses through dividends rather than resort to buybacks, which has been the norm in recent years. Currently, buyback tax is applicable only for unlisted companies. Here's all you need to know about the buyback tax

Broker's call

Reliance Securities

Alkem Laboratories  (Buy)

CMP: ₹1,768

Target: ₹2,050

We expect ALKEM’s domestic formulations business (67 per cent of sales) to clock 12 per cent CAGR through FY19-21E driven by increasing focus on Chronic segments, good anti-infective season and new launches in key therapies.

Looking ahead, we expect USFDA approvals to pick-up. Alkem’s pending pipeline stood at 57 ANDAs (abbreviated new drug applications) and plans to launch 8-10 products in FY20E. Read the Broker's call on Alkem Laboratories here

Choppy trade

The 30-share BSE index Sensex was trading 62.64 points or 0.16 per cent lower at 38,657.93 after briefly trading in green in the mid-morning session. TCS and HDFC twins were majorily dragging the index lower.

The major gainers were Sun Pharma, Bajaj Finance, L&T, Reliance and IndusInd bank while the laggards were TCS, HCL Technologies, Asian Paints, Tech Mahindra and ITC. Sectorally, consumer durables were the top loser trading lower by 6.65 per cent.

The broader index Nifty was trading at 11,531.20, lower by 27.40 points or 0.24 per cent. The stocks leading the positive pack were Sun Pharma, Bajaj Finance, IOC, Bajaj Finserv and Ultra Cement while the scrips trading in red were Titan, UPL, TCS, GAIL and HCL Technologies.

Bajaj Finance up 6%

Shares of Bajaj Finance Ltd were trading up 6 per cent at ₹3,618.45. The stock hit an all-time intra-day high on Friday, but had fallen 8 per cent on Monday amid a broader sell-off in the Indian shares.

Titan Company plunges

Shares of watch and jewellery maker,  Titan Company Ltd , dropped as much as 10.9 per cent to Rs 1,116, their lowest since May 10. The stock is the top loser on the NSE index, marking its sharpest intra-day fall in over 2-1/2 years and is set for its fourth straight session of losses. More on the stock activity of Titan Company , read here.

The stocks of Titan Company were trading 12.37 per cent lower at Rs 1,097.75 in the BSE index and in the broader index, the stock was 12.39 per cent lower at Rs 1,097.25.

TCS falls over 2%

The stocks of Tata Consultancy Services falls 2.39 per cent to Rs 2,121 ahead of the results. TCS will announce its results for the quarter ended June 2019. Analysts expect net profit growth to be modest due to the buyback programme.

Focus would be on demand from the financial services vertical especially the capital markets segment, order bookings, impact of talent crunch in the US on margins, and progress on localisation. The IT index in the Sensex pack was trading lower by 1.42 per cent.

Sensex, Nifty trim losses

The 30-share BSE index Sensex wiped the losses and is trading in green, higher by 32.26 points or 0.08 per cent at 38,752.83 led by industry heavyweights and financial stocks.

The top stocks in the gainers pack were Sun Pharma, Bajaj Finance, Reliance, L&T and Hero MotoCorp while the laggards were Asian Paint, TCS, HDFC, Kotak Mahindra Bank and Tech Mahindra.

Among the sectoral indices, realty, oil & gas and capital good were major gainer, trading higher by over 1 per cent. Consumer durables emerged the biggest loser, slumping 5.80 per cent among the sectors.

Similarly, the broader index Nifty was trading higher at 11,560.45, up 1.85 points or 0.02 per cent. The major gainers were Sun Pharma, Bajaj Finance, IOC, Bajaj Finserv and Reliance while the stocks of Titan, UPL, Asian Paints, TCS and HDFC were leading the negative pack.

Former Punj Lloyd employees in soup

The diversified Punj Lloyd Group, which is now undergoing a Corporate Insolvency Resolution Process (CIRP), faces claims of about ₹6.6 crore from its former employees.

Till May 6, 87 former employees had raised claims as creditors under the ‘Employees and Workmen’ category under the insolvency resolution process. Of the total claim, the Interim Resolution Professional (IRP) has admitted ₹81.65 lakh. A chunk of the remaining claims are still being examined. The employees are contemplating the means to raise further claims with the IRP. Click here to read more on the PF payouts issues to the former Punj Llyod employees

The stocks of Punj Lloyd were trading 2.07 per cent lower at Rs 1.42.

Gold and precious metals

SPDR Gold holdings fall 0.15% on Monday.

Gold prices ticked lower as the dollar held near multi-week highs on reduced expectations of an aggressive US rate cut, although softer share markets capped the metal's losses. Spot gold was down 0.1 per cent at $1,393.95 per ounce as of 0408 GMT. US gold futures were down 0.2 per cent at $1,396.50 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.15 per cent to 795.80 tonnes on Monday from 796.97 tonnes on Friday. Click here to read more on the gold and other precious metals price rally

US markets

US stocks fell on Monday

US stocks fell as Apple shares dropped following a broker downgrade and investors continued to weigh chances of an aggressive interest rate cut by the Federal Reserve later this month. Apple Inc fell 2.2 per cent and was the biggest drag on the S&P 500 and Nasdaq.

The technology index was down 0.7 per cent, while the healthcare index fell 0.8 per cent, weighed down by US President Donald Trump's recent statement about an upcoming executive order that would lower prescription drug prices. Read the US stock markets report here

Oil market

File Photo

Oil fell amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although tensions in West Asia offered some support to prices. Brent crude futures were down 21 cents, or 0.3 per cent, at $63.90 a barrel by 0022 GMT. They fell 12 cents on Monday.

Oil prices are being pressured by ongoing worries about demand as the US-China trade war, heading into its second year, dampens prospects for global economic growth. Click here to read the commodities market report

Shares continue to remain in red

The shares fell for a third straight session as a proposed tax on the super-rich continued to rattle the markets, while investors awaited fresh cues from corporate results that kick-off later in the day.

The broader NSE index was down 0.71 per cent or 82.45 points at 11,476.15, while the benchmark BSE index was trading 0.61 per cent or 236.31 points lower at 38,482.43.

The government's proposal to increase the public float by 10 per cent, a surcharge on foreign portfolio investors (FPIs) and a 20 per cent tax on buyback of securities in the annual budget on Friday dealt a heavy blow on the stock markets on Monday.

Finance Minister Nirmala Sitharaman raised the income tax surcharge on people with an annual income of more than 20 million rupees ($290,994) leading to a sharp selloff in the stock markets led by foreign portfolio investors, who may end up paying higher tax on their income due to the new rules.

“The provisions made in the budget lacked immediate boost to consumption and the provision for increase in effective tax rate is also a dampener,” said Deepak Jasani, Head of Retail Research at HDFC Securities. “FPI inflows may get postponed as chances of aggressive rate cut by US Fed have faded, the money that was expected to flow into emerging markets due to low interest rates abroad gets delayed.”

Foreign investors have net sold $451 million in Indian equities so far this month.

Asian stocks struggled to rebound after solid gains in US jobs for June sharply reduced expectations that the Federal Reserve will deliver a large interest rate cut at the end of July. Globally, investors' focus also shifted to Fed Chairman Jerome Powell's testimony before Congress later in the week for clues on monetary policy.

The Indian rupee weakened as much as 0.28 per cent to 68.845 per dollar compared to Monday's close of 68.655.

The NSE IT index was trading down 0.55 per cent. Shares of IT services firm Tata Consultancy Services Ltd fell as much as 1.6 per cent. The Mumbai-based firm is due to post first-quarter results later in the day.

Titan Company Ltd fell as much as 10.9 per cent to its lowest in eight weeks, after the watch and jewellery maker said revenue from its jewellery segment grew by a muted 13 per cent in the first quarter as consumer demand in June was hit by a sharp increase in gold prices. - Reuters

Rupee market

softening crude oil prices restricted the rupee’s fall.

The rupee declined by 18 paise to 68.84 against the US currency in early trade, due to strong dollar demand from banks and importers amid persistent foreign fund outflows. The rupee opened weak at 69.65 against the US dollar at the interbank forex market. Click here to read the local currency market here

Why did FPIs spook market on additional surcharge?

The issue will be clarified soon, said the CBDT chief

The benchmark indices fell by record numbers on Monday. The Nifty 50 lost the most in about eight months, while the Sensex 30 lost the most in four years. An amendment to the surcharge slabs, which would directly impact foreign portfolio investors or FPIs and domestic individual investors, seems to have pulled the rug from under the feet of market participants.

The panic that has set into the market is also because of the anticipation that the surcharge will impact domestic investors as well. With FPIs being a huge source of foreign exchange into India, it is unlikely that the Centre would like to spook the market by increasing their tax outgo by up to 8 per cent. Read more on impact of new tax provision on FPIs and stock markets

Sensex drops over 250 points

Domestic equity benchmark BSE Sensex fell over 250 points in early trade dragged by losses in HDFC twins and TCS as Budget tax proposals continued to spook investors.

After dropping over 253 points in opening session, the 30-share index pared some losses to trade 214.92 points, or 0.56 per cent, lower at 38,505.65. Similarly, the broader Nifty shed 71.30 points, or 0.62 per cent, to 11,487.30.

TCS was among the top losers in the Sensex pack, falling up to 1.79 per cent, ahead of its quarterly results, scheduled to ba announced later in the day. HDFC twins, Asian Paints, Kotak Bank, HUL, Bajaj Finance and Axis Bank too fell up to 2.19 per cent.

On the other hand, Yes Bank, PowerGrid, Sun Pharma, NTPC, L&T, RIL and Vedanta were among the gainers, rising up to 2.90 per cent.

In the previous session, the 30-share gauge saw its biggest single-day loss this year so far, settling at 38,720.57 points, showing a sharp loss of 792.82 points or 2.01 per cent. The Nifty too tanked 252.55 points, or 2.14 per cent, to close at 11,558.60 points.

On a net basis, foreign institutional investors sold equities worth Rs 401.99 crore, while domestic institutional investors purchased shares to the tune of Rs 321.13 crore, provisional data available with stock exchanges showed Monday.

The Union Budget proposal to raise the public shareholding threshold to 35 per cent from the current 25 per cent and higher tax incidence for foreign portfolio investors and high networth individuals kept investors jittery, traders said.

“Fiscal prudence (in the Budget) was contrary to the market’s expectation which was hoping for a stimulus in the slowing economy,” said Vinod Nair, Head of Research, Geojit Financial Services.

Focus has shifted to the upcoming quarter result where expectation remain muted, volatility is likely to prevail, he added. Persistent weakness in global equities amid expectation of dovish US Federal Reserve policy too weighed on investor sentiment here, they added.

Shanghai Composite Index, Hang Seng and Kospi were trading lower in their respective early sessions, while Nikkei was trading in the green.

On the currency front, the Indian rupee depreciated 17 paise to 68.83 against the US dollar. Meanwhile, the global oil benchmark Brent crude futures were trading 0.22 per cent lower at 63.97 per barrel. - PTI

Forex market

File photo

The dollar traded near a three-week high against its peers, as investors reduced bets on aggressive US interest rate cuts ahead of the Federal Reserve chairman's testimony to Congress on the economy.

Sterling was pinned near a six-month low versus the dollar on speculation the Bank of England will soon join other major central banks in easing monetary policy in response to growing worries about the global economy and Britain's exit from the European Union. Click here to read the forex market report

Asian markets

Japan's Nikkei rose 0.5 per cent. File Photo

Asian stocks struggled to rebound as investors came to terms with sharply reduced expectations the Federal Reserve will deliver a large interest rate cut at the end of July. MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.1 per cent in early trade, after falling 0.6 per cent the previous day. Japan's Nikkei rose 0.5 per cent thanks in part to the yen's retreat against the dollar. Read the Asian markets report here

Stocks in focus

Meghmani Organics  on Monday said that its material subsidiary Meghmani Finechem, in which the company holds 57 per cent stake, has commenced production at the chlormethane plant from July 4 with a capacity of 40,000 tonnes. The unit produces methylene dichloride, chloroform and carbon tea that will carter to pharma and agrochemical customers. The cost of setting up the plant was ₹160 crore and it expects a turnover of ₹80 crore in the current fiscal.

Tuesday will be a big day for this result seasons, as Tata Consultancy Services will announce its results for the quarter ended June 2019. Analysts expect net profit growth to be modest due to the buyback programme. Focus would be on demand from the financial services vertical especially the capital markets segment, order bookings, impact of talent crunch in the US on margins, and progress on localisation. Excel Realty N Infra is also considering its Q1 results on Tuesday.

BASF India  has entered into an agreement with Archroma India Private Ltd to divest its stilbene-based optical brightening agents business for paper and powder detergent applications (OBA business) for ₹33.50 crore. The transaction, which includes the stilbene-based OBA product portfolio and the manufacturing unit at Ankleshwar, is expected to be completed by the fourth quarter of the current fiscal. Shareholders will closely monitor the development.

Opening bell

The 30-share BSE index Sensex opened 33.9 points higher at 38,754.47 against the previous close of 38,720.57. The 50-share NSE index Nifty opened 64.6 points lower at 11,494 against the previous close of 11,558.60

Day Trading Guide

Given below are supports and resistances for Nifty 50 futures and seven key stocks that can help in your intra-day trading:

₹2407 • HDFC Bank

₹717 • Infosys

₹277 • ITC

₹152 • ONGC

₹1251 • Reliance Ind.

₹355 • SBI

₹2176 • TCS

11566 • Nifty 50 Futures

S1, S2 : Support 1 & 2; R1, R2: Resistance 1 & 2.

Today's Pick

We recommend a sell in the stock of Indian Bank at the current levels of Rs 241.2. The stock tumbled 6 per cent accompanied by above average volume on Monday, breaching a key support at ₹250. Significant medium-term resistance at ₹290 had capped the stock’s upside in early April and again in early June this year. Overall, the short-term outlook is bearish for the stock. Read the stock recommendation and stock activity of Indian Bank here

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