Sensex, 15k flat; auto, banks, pharma top drags

Broader indices down

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Commodity inflation will not impact Nifty stocks: Motilal Oswal

Commodity prices are on the rise globally. But the inflation in global commodities will have limited impact on Nifty stocks, according to a note from Motilal Oswal Financial Services.

The brokerage looked at the historical impact of commodity inflation on stocks. “Rising global commodity prices have historically had a positive impact on aggregate index earnings for the last 12 years,” stated the note. (Read here)

States’ borrowing cost begin to fall

With large borrowing states not coming to the market or drawing down less than indicated amounts, states are seeing the cost of their debt falling finally, with the weighted average interest rate declining by 18 basis points to 6.74 at the auction of state government securities on Monday.

Last week, the rate stood at 6.92%.

At Monday’s level, the rate difference between the G-Sec (Government Securities) and state development loans are still at a high of 77 bps. While the weighted average interest rate is 6.74% for the states, the Centre pays only 5.97% for 10-year bonds, according to an analysis by Icra Ratings Chief Economist Aditi Nayar. (PTI)

Oil drops with prospect of Iran deal weighed against demand

il snapped two days of gains as investors weighed talks of higher Iranian supply against the prospect of a continued recovery in demand.

West Texas Intermediate futures dropped below $66 a barrel Tuesday after climbing more than 6% in the previous two sessions. Talks between Iran and world powers will continue in Vienna this week to resolve outstanding issues on a nuclear accord, which may pave the way for the removal of U.S. sanctions on crude flows from the Persian Gulf nation.

Alkem Laboratories’ board recommends dividend

Alkem Laboratories Ltd recommended a final dividend of ₹5 per equity share of ₹2 each for FY21, for the approval of the shareholders of the company at the Annual General Meeting. The board has fixed 10 August as the record date for the purpose of payment of final dividend. The dividend, if declared by the shareholders, shall be paid on and from 1 September, the company said ina regulatory filing.

Amara Raja Batteries falls 6% after Clarios sold stake

Shares of Amara Raja Batteries declined as much as 6% on Tuesday after the car battery maker Clarios announced that it would sell 1.71 crore shares or 10% stake of the company via block deal. At 02:05 pm, Amara Raja Batteries was trading at ₹739.80 down 5.61% from its previous close, while the benchmark index, Sensex lost 0.15% to 50,576.79. The floor price for the deal was ₹746 a piece, 4.8% discount to the Monday’s close.

According to the latest shareholding, Clarios ARBL Holding LP held a 40,995,000 shares or 24% stake in Amara Raja Batteries, post transaction the holding will be 14% in the company.

Gold hovers near four-month high

Gold continued to hover near the highest in more than four months as investors weighed comments by Federal Reserve officials who tried to soothe concerns about inflation.

The metal was little changed on Tuesday, while the dollar sank to the lowest since January amid broadly improved sentiment in markets. Talking about inflation, Fed officials Lael Brainard, Raphael Bostic and James Bullard said price gains seen as the economy reopens should prove temporary.

HDFC Bank top drag

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Pfizer in talks with India for Covid-19 vaccine supplies

Pharma major Pfizer is in talks with the Indian government over supplies of its covid-19 vaccine, the US drugmaker said on Tuesday, as New Delhi scrambles to bridge shortfalls, having pledged to fast-track approvals for overseas vaccines. (Read here)

Aim to comply with IT rules: Facebook

Facebook on Tuesday said it is working to implement operational processes and aims to comply with the provisions of the IT rules that come into effect from 26 May.

The social media giant, however, said it continues to discuss a “few of the issues which need more engagement” with the government.

The comments assume significance as social media companies are facing the deadline of 25 May to comply with the new guidelines for digital platforms.

The new rules were announced in February which requires large social media platforms like Twitter, Facebook, Instagram and WhatsApp to follow additional due diligence, including the appointment of a chief compliance officer, nodal contact person and resident grievance officer.

HDFC Ltd cuts 3.08% stake in Reliance Infra

HDFC Ltd has cut its stake in Reliance Infrastructure Ltd by 3.08%, selling 81,05,677 shares for is ₹43,91,47,050 in the secondary market.

ICICI Pru MF eyes additional 5% stake in Federal Bank

ICICI Prudential Mutual Fund is eyeing an additional 5% stake in Federal Bank Ltd, CNBCTV18 reported. The mutual fund has submitted its proposal to RBI, according to the report. ICICI Prudential MF, which decline comment for the story, already holds a 4.84% stake in Federal Bank.

Coforge surges

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Barbeque-Nation Hospitality gains 20%

Barbeque-Nation Hospitality was trading at ₹767.50 apiece, up 20.00% at 12:35 pm. The company on Monday posted a consolidated net profit of ₹6 crore in the March quarter as against loss of ₹28 crore in the year-ago period.

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BPCL may sell some stake in IGL, Petronet

Privatisation-bound Bharat Petroleum Corporation (BPCL) may sell a part of its stake in Petronet LNG and Indraprastha Gas (IGL) to shed its promoter status to obviate the need for its new owner to make open offers for the two gas companies, sources said.

BPCL holds 12.5% of shareholding in India’s largest liquefied natural gas importer, Petronet, and a 22.5% stake in city gas retailer, IGL. It is a promoter of both the listed companies and holds board positions. (PTI)

Sensex heatmap

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Better performance of VSF boosts Grasim Industries’ Q4 results

Grasim Industries Ltd’s results for the March quarter were helped by a decent recovery in its VSF (viscose staple fibre) segment. Last quarter, Grasim’s standalone revenues rose 19% sequentially to ₹4,394 crore. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin expanded 102 basis points on quarter to 18.5%. One basis point is one-hundredth of a percentage point. (Read here)

India plans stimulus package to support economic growth

India is preparing a stimulus package for sectors worst affected by a deadly coronavirus wave, aiming to support an economy struggling with a slew of localized lockdowns, people familiar with the matter said.

The finance ministry is working on proposals to bolster the tourism, aviation and hospitality industries, along with small and medium-sized companies, the people said, asking not to be identified as the deliberations are private. The discussions are at an early stage and no timeline for an announcement has been decided, they said. A finance ministry spokesman declined to comment.

JSW Steel gains 4%; HDFC Bank top drag

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Cyber crime is growing risk to bank ratings: S&P

The banking sector is becoming more exposed to cyber crime after Covid-19 pandemic accelerated digitalisation and remote working, S&P Global Ratings said on Tuesday.

Cyber attacks can harm credit ratings mainly through reputational damage and potential monetary losses, it said in a report titled ‘Cyber Risk In A New Era: The Effect On Bank Ratings.’

“Cyber attacks have had only a limited effect on bank ratings to date but can trigger more rating actions in the future as cyber incidents become more frequent and complex,” said Credit Analyst Irina Velieva. (ANI)

Barclays cuts India’s FY22 GDP estimate to 9.2%

A British brokerage on Tuesday cut India’s FY22 GDP growth estimate by a sharp 0.80% to 9.2%, saying the economic impact of the second wave of infections has been deeper than initially expected.

Barclays chief India economist Rahul Bajoria also mentioned the slow pace of vaccinations in the country and the rolling lockdowns across many states for the estimate.

It can be noted that the last month has seen a slew of similar forecasts from analysts, even as the RBI maintained its estimate of a 10.5% growth in real GDP. The analysts’ estimates range from 8.5% to a little above 10%. The higher growth number has been made possible by a low base of FY21, where the economy contracted by over 7.5 per cent.

Rupee surges 13 paise to 72.83 against US dollar in early trade

The Indian rupee strengthened by 13 paise to 72.83 against the US dollar in early trade on Tuesday tracking the broad weakness of the greenback and positive domestic equities.

At the interbank foreign exchange, the domestic unit opened at 72.85 against the dollar, then inched higher to 72.83, registering a gain of 13 paise over its previous close. On Monday, the rupee had settled at 72.96 against the US dollar.

Infosys, Asian Paints drive gains; HDFC Bank top drag

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Hyundai to shut Chennai plant for 5 days from today amid second wave of Covid-19

In view of the second wave of the COVID-19 pandemic and restrictions imposed by the Tamil Nadu government, Hyundai Motor India Ltd (HMIL) has said it will temporarily suspend operations at its Chennai plant for five days starting today. (Read here)

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments on Nifty trajectory

After getting past the resistance of 14,700 on a closing basis, the markets are in fine form. 15,300 is the target that we need to keep an eye on. If we can close above this level, the next target for the Nifty would be 15,550-15,600. A strong support lies at 14,900-15,000 and till that is not pierced, we are in the bull territory and can continue buying on dips.

India posts lowest rise in daily COVID-19 cases since April 14

India on Tuesday posted 196,427 new coronavirus cases over the last 24 hours, its lowest daily rise in infections since April 14, while deaths from covid-19 rose by 3,511. Overall case load now stands at 26.95 million, while total fatalities are at 307,231, according to health ministry data.

Gold prices today fall, a day after jumping to nearly 4-month high, silver dips

Gold and silver prices today edged lower in Indian markets amid decline in global rates. On MCX, gold futures were down 0.22% to ₹48,444 per 10 gram while silver rates fell 0.46% to ₹71,480 per kg. In the previous session, gold had edged 0.26% higher to close near 4-month high while silver had surged over 1%. Domestic prices could hover in the range of ₹48,400- 48,900, says Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services, while broader range on COMEX could be between $1,865-1,900. (Read more)

Rupee outperforms on bets India’s covid crisis may have peaked

The rupee has staged a strong comeback, rebounding to become Asia’s top-performing currency from its worst on signs that India’s virus crisis may be easing.

The currency has climbed 1.5% against the dollar in May to beat all its regional peers as the nation’s daily infections decline rapidly after touching a record high. The rupee also has the benefit of offering Asia’s highest carry returns.

The revival in the rupee’s fortunes reflects India’s efforts to tackle the pandemic, with local lockdowns helping to rein in daily cases which were the world’s highest in April. Still, the central bank may be wary of a stronger currency given its adverse impact on exports at a time when the economy is emerging from a recession. (Bloomberg)

Market opening

The Sensex opened at 50,922.32, up 270.42 points or 0.53%, while the Nifty was at 15,291.75, up 94.05 points, or 0.62% on Tuesday.On the 30-share Sensex, 28 stocks opened in green, while RIL and HDFC Bank opened in red.

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HSBC CEO says Bitcoin not for us

HSBC has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters. (Read here)

Cipla’s RT-PCR test kit ‘ViraGen’ to be sold from today

Drug major Cipla’s RT-PCR test kit, launched last week, will be available in the market from today, the company said. The RT-PCR test kit is called ‘ViraGen’ and is manufactured by the drug major in partnership with Ubio Biotechnology Systems. (Read more)

Fugitive diamantaire Mehul Choksi goes missing in Caribbean island nation of Antigua and Barbuda: Local media reports.

Market outlook

Markets are likely to be stay volatile on Tuesday while trends in SGX Nifty suggest a positive opening of Indian benchmark indices. On Monday, the BSE Sensex ended at 50,651.90, up 111.42 points or 0.22%. The Nifty closed at 15,197.70, up 22.40 points or 0.15%.

WHO says ‘more information’ required from Bharat Biotech for emergency use of Covaxin

The World Health Organisation (WHO) has said that “more information” is “required” from Bharat Biotech, which is seeking emergency use listing (EUL) for its Covaxin vaccine for COVID-19.

The latest ‘Status of COVID-19 Vaccines within WHO EUL/PQ evaluation process’ guidance document dated May 18 on the WHO website said Bharat Biotech submitted EOI (Expression of Interest) on April 19 and that “More information required”. A pre-submission meeting is expected “to be planned May-June 2021,” the guidance document said.

Bitcoin holds gain as Musk’s Miner Tweet spurs fresh volatility

Bitcoin held gains Tuesday after Elon Musk’s effort to bolster the token’s green credentials stoked a rally, extending a bout of marked volatility following last week’s crypto rout.

The largest digital currency rose about 1% to $39,400 in early Asian trading, following a 16% overnight jump. The wider Bloomberg Galaxy Crypto Index climbed 2%, with tokens such as Ether also pushing higher.

Musk took to Twitter to signal support for an apparent effort by Bitcoin miners to make their operations more environmentally friendly.

Asian stocks climb

Asian stocks climbed Tuesday after technology shares spurred a Wall Street rally as Federal Reserve officials tried to soothe concerns about inflation. Bitcoin held onto a bounce following last week’s crypto rout.

An MSCI Inc. index of Asia-Pacific equities was on track for a fourth straight advance, with shares higher in Japan, Hong Kong and China. U contracts edged up after the S&P 500 climbed and the Nasdaq 100 outperformed amid a jump in Apple Inc. and Tesla Inc. Bitcoin soared in part on Elon Musk’s support for an apparent effort to improve its green credentials.

Japan’s Topix index climbed 0.2%

Australia’s S&P/ASX 200 index gained 0.6%

South Korea’s Kospi index climbed 0.7%

Hong Kong’s Hang Seng index rose 0.7%

China’s Shanghai Composite index gained 0.4%

SGX Nifty was at 15,332.20, up 142.20 points, or 0.94% at 7:43 am

US equities gain

US stocks climbed on Monday, with the Nasdaq jumping more than 1% as a retreat in U.S. Treasury yields helped lift expensive stocks in sectors such as technology as investors attempt to gauge the trajectory of inflation.

Among the 11 major S&P sectors, technology advanced 1.76% and communication services rose 1.84% as the top performing on the session, as yields on the benchmark 10-year Treasury bond hit a two-week low, which also buoyed other richly-valued growth stocks. The Dow Jones Industrial Average rose 186.14 points, or 0.54%, to 34,393.98, the S&P 500 gained 41.19 points, or 0.99%, to 4,197.05 and the Nasdaq Composite added 190.18 points, or 1.41%, to 13,661.17. The S&P 500 posted 28 new 52-week highs and no new lows; the Nasdaq Composite recorded 105 new highs and 46 new lows.