STOCK MARKET LIVE: Sensex, Nifty flat; here are experts advice on shares and sectors
STOCK MARKET LIVE: Sensex, Nifty flat; here are experts advice on shares and sectors
BSE Sensex and NSE Nifty ended the day flat. Indian markets today opened higher on Wednesday following a positive move in the US markets on Tuesday but Asian markets were mostly in the negative. US stocks managed modest gains on Tuesday after holding near the unchanged mark for much of the session as enthusiasm over the US-China trade truce faded after the US threatened tariffs on additional European goods. With US and global economic data showing signs of slowing, the focus for investors will now turn to monetary policy and the upcoming earnings season, said Deepak Jasani, Head Retail Research, HDFC securities.
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Crude oil (July): Crude oil (August delivery) prices are trading on a negative note. The immediate support at 3,865, next support is at 3,825. The important resistance is at 4,080 levels. Until prices close above 4,080, selling on rise is advisable, said a JM Financial report.
Gold (August): Gold (August delivery) prices are likely to trade on a positive note. The immediate support at 34,330, next support is at 34,200. The important resistance is at 34,750 levels. Until prices are holding below 34,200, buying is advisable, said a JM Financial report.
KNR Constructions (HOLD): Brokerage YES Securities said that the company's order book position improved sizably; execution to pick up KNR’s order book at the end of FY19 and it stood healthy at Rs 59 billion (vis-à-vis Rs 38 billion at the end of FY17). This is largely aided by robust order inflows of Rs 45bn/Rs 17 billion secured in FY18/FY19, it said.
"In FY20, the company expects an inflow of Rs 25billion with a primary focus on both, EPC and HAM road projects. Also, the company is looking to bag some value-accretive irrigation projects. This is likely to keep its order book strong. Execution of the existing strong orderbook would be the driver of topline performance," the brokerage said.
HG Infra Engineering share (BUY): Brokerage YES Securities recommended to buy HG Infra Engineering share with an upside of 47%. The brokerage said in its report today that the infrastructure company has healthy order book position with 3.1x FY19 book-to-bill. Evolved from working only as a sub-contractor to now bidding directly for big-ticket projects from NHAI.
"Comfortable balance sheet provides significant room to bid for new orders. We expect topline CAGR of 23% with healthy operating margins of 15%. Stock trades at P/E of 8x FY21 EPS," it said.
PNC Infratech share (BUY): Brokerage YES Securities recommended to buy PNC Infratech share with an upside of 32%. It said that the company has one of the strongest order book position in the industry with 4.2x FY19 book-to-bill. Most of the projects in the order book are in execution which, in-turn, got reflected in FY19 performance registering a whopping 67% yoy revenue growth.
"We expect topline CAGR of 37% based on the existing strong order book with healthy operating margins of 14%. Stock trades at P/E of 13x FY21 EPS," the brokerage said.
Infrastructure (Roads and Highways) sector outlook:
Brokerage YES Securities report said road sector faced rough weather in FY19 owing to overall weakness in project award, delays in financial closure for HAM projects, and poor response to the second bundle of TOT projects. Most decent-sized road contractors achieved financial closure for their projects, yet issues like receipt of appointed date remained an issue. FY19 ended with awarding and construction of 5,489 km and constructed 10,855 km, respectively (FY18 awards at 17,055 km and construction at 9,829 km).
However, tender pipeline and commentary from contractors suggest FY20 to be better in terms of project awarding. Existing heavy order backlog of contractors and strong tender pipeline places the sector in a sweet spot, the report said.
Markets ended with marginal gains on Wednesday. It was the third consecutive session of gains for the Nifty. Traders were cautious ahead of the presentation of the Economic Survey on Thursday, July 4, 2019, and that of Union Budget the following day. The indices closed a bit higher after a topsy-turvy trade as gains in IndusInd Bank Ltd. and ITC Ltd. were offset by losses in IT majors.
"Technically, with the Nifty moving up further, the bulls seem to be in control. Further upsides are likely once the immediate resistance of 11,962 is taken out. Crucial supports to watch for any weakness are at 11,885," said Deepak Jasani, Head Retail Research, HDFC securities.
HDFC Securities maintains BUY on Sadbhav Engineering:
Brokerage HDFC Securities said it maintains BUY with a reduced SOTP LOSS of Rs 340 vs Rs 353 earlier). "We value SEL’s EPC business at 15x FY21E EPS and assign a 20% hold co discount to SIPL stake’s market value. We have downgraded FY20/21E EPS by 1/2%," Parikshit D Kandpal, Analyst at HDFC Securities, said. The share is trading at Rs 244, down 1.69%, on the BSE.BSE Sensex ended the day flat at 39,839.25, while NSE's Nifty closed at 11,914.55.
Gold prices today: Gold prices rose to a one-week high today, as hopes of a quicker resolution of the US-China trade dispute ebbed. A potential trade feud with Europe also deepened concerns.
The market is mostly positive during the afternoon trade, as 31 shares advanced and 19 declined in the Nifty basket.
Banking shares advanced during the noon trading session. Bank Nifty was 0.5% higher at 31,438.35. IndusInd, Bank of Baroda, Federal Bank, PNB, Axis Bank, YES Bank, SBI, and HDFC Bank were trading in the positive territory. ICICI Bank was trading flat.
Crompton Greaves share (HOLD): Crompton Greaves Consumer Electricals (CGCEL) is the largest player in the fans segment and continues to leverage its brand equity to expand in to consumer appliances. However, entry in new segments remains vital to sustain industry-leading growth and for re-rating. "We retain ‘HOLD/SP’ with TP of Rs235 assigning 30x September 2020E EPS. The stock is trading at 28x FY21E EPS," Edelweiss said.
"In line with management’s objective, the company in FY19 registered better-than-industry revenue growth in product segments and profit growth surpassed revenue (amongst very few players in the space) in a difficult year led by better cost management. However, free cash conversion was slower versus past two years due to dip in payables. That said, CGCEL’s strategy of brand strengthening (with ad campaigns) and launching differentiated products while accelerating premiumisation and improving availability of products (go-to-market initiative) is on track. However, we believe, entry in new product categories remains a key variable for re-rating. Maintain ‘HOLD’," the brokerage said. The share is trading at Rs 208.95, up 0.77%, on the BSE.
News updates:
OIL, Vedanta bag most blocks under Open Acreage Licensing Policy (OALP) II, III.Essar Steel bags Rs 5,000-crore order for procuring one million tonne of hot rolled products from Posco
NCC bags Rs 359-crore worth orders Andhra Pradesh government agencies in June 2019.
Simens sets up protection automation lab for PowerGrid
Alembic Pharma recieved USFDA approval for Febuxostat tablets, used to treat gout due excessive levels of uric acid in blood.
The Supreme Court dismissed DoT plea in RCom spectrum sale
Strides Pharma, Puducherry unit, receives a warning letter from USFDA
Petroleum Minister Dharmendra Pradhan said state-run ONGC has discovered over 230 million tonnes of oil reserves in the last three years.
The RBI has imposed a Rs 1.75 crore penalty on public sector banks -- PNB, UCO Bank, Allahabad Bank, and Corporation Bank - for non-compliance with KYC norms for current accounts opening.
Bank Nifty analysis: Bank Nifty failed to provide a positive follow-up to Monday’s upsurge. It ended below 31,300, losing 89 points. Given the fact; since past three sessions, Bank Nifty is hovering below prior week’s peak of 31,491, hence a decisive breakthrough above 31,500 is essential for regaining momentum on the upside, brokerage YES Bank said.
Derivatives trends ahead of Budget 2019: Nifty open interest distribution suggests trading band to continue with upside resistance at 12,000 mark while downside buildup at 11,800 puts indicates immediate support zone. FII’s derivative statistics suggest mild unwinding on index futures long positions. India VIX likely to inch higher amid budget expectation due during the week, brokerage YES Securities said.
Nifty 50 trends (technical analysis): Price volatility inched higher after Monday’s narrow range trade. In the prior session, erasing early gains Nifty 50 fell towards 11,815; however swift recovery lifted Nifty back to day’s high, above 11,900 mark, said YES Securities. "Eventually Nifty ended at 11,910 – up by 45 points with 31 of its Nifty 50 constituents settling higher. Tuesday’s price action took form of small bullish candle at top with relatively large lower shadow, appearance of such pattern at current juncture represents renewed buying interest near 11,800 mark," it said. Nifty retraced 61.8% of the previous decline from record high, hence a sustenance above 11,900 is essential to make an attempt towards 12,000 zone, the brokerage said.
Powergrid share (BUY at Rs 206-207): Brokerage JM Financial said that buy Powergrid share only at Rs 206-207 level with a stop loss below Rs 200 for a short-term (1-2 weeks) target of Rs 215 and Rs 220. The share is trading at Rs 209.05, up 0.82%.
Gold (BUY in dip): The US markets (DJIA, S&P 500) look critically placed at this juncture from where a run down can potentially start. "We will keep a close eye on the same in the next one week. Any dip is a buying opportunity in Gold," brokerage JM Financial said.
Bank Nifty: Bank Nifty has major resistance around the 31,400-31,500 levels.
Nifty trends: Brokerage JM Financial said technically Nifty 50 is approaching the larger resistance at 11,950. A move past the same would be an indication of the market trying to hit new life highs. On the downside, 11,750 remains a very important support and the bulls will feel safe above the same. The technical indicators on the daily charts are mostly neutral at this point.
The moving averages have supported the price action very well in the last few days.Market trends: The market has been moving back and forth within the large range and it seems that the bulls and bears are assessing each other. "We are hopeful that this will eventually transpire into a large trending move. The Midcap index closed with gains and near the resistance zone
of 17,800-18,000," said a JM Financial report.Vedanta, Hindalco, DrReddy's, Eicher Motors, and GAIL are the losers in Nifty 50.
Indiabulls Housing Finance, IndusInd Bank, Asian Paint, and YES Bank shares rise.
Deepak Jasani, Head Retail Research, HDFC securities, said IT index could do well. On upside, Nifty could face resistance at 11962-12000 band while 11831-11872 band remains a support. Among stocks under coverage, SBI, Trent, SRF, SBI Life, Heidelberg, PI Inds, Ipca Labs, Bharti Airtel, could do well, he said.
BSE Sensex is trading flat at 39,828.65, while NSE Nifty was at 11,909.80
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