Stock Market Live Updates: Sensex jumps 400 points, Nifty above 15,300 led by IT, financials

High commodity prices: Metal companies to benefit; auto, consumer durables to suffer

The global commodity prices have seen a massive surge recently stoking fears of rising inflation. The rise in prices comes amid an increase in COVID cases and restricted economic activity. The prices of domestic flat steel continued to trend higher for the eleventh consecutive month in May 2021. Domestic hot-rolled coil (HRC) prices rose 9 percent to average Rs 63,633 per tonne in May 2021. It was 75 percent higher YoY. Rising iron ore prices in the international market coupled with strong demand for steel backed by stimulus measures by major economies are pushing up the prices of steel. Iron ore prices hit $230 per tonne in recent weeks topping the record $ 194 a tonne hit more than a decade ago. Iron ore prices are up 140 percent, YoY. Read here.

Alembic Pharmaceuticals | The company has received license to manufacture Liposomal Amphotericin B Injection 50 mgNial (Lyophilized) from Drugs Controller General of India and Food & Drug Control Authority, Gujarat. The company is trying to work on it supply chain and manufacturing operations to bring the product to the Indian patients at the earliest, it said.

Yash Gupta Equity Research Associate, Angel Broking

As we have seen a full lockdown in Maharashtra is continuing and expected to be there till mid of June, so next quarter will again be challenging for the company. We are expecting volume degrowth of 5%-15% in next quarter and after that expecting a recovery in Q2FY22. We have a positive outlook towards Mahanagar Gas Ltd with a target price of Rs 1,215.

Focus on domestic cyclicals, continue to like metals, says CLSA’s Vikash Kumar Jain

India is among few markets where financials have underperformed a the confidence of investors in financials has dipped after the second wave of the COVID-19 pandemic in the country, says Vikash Kumar Jain, Investment Analyst, CLSA. Speaking to CNBC-TV19, Jain said that financials had been clear outperformers in 14 of the top 19 markets which make about 80-85 percent of global market capitalisation. There were only a few markets, India is one of them where on a year-to-date basis financials have underperformed. “In my opinion financials are in a way reflation trade to play economy recovery post the pandemic. However, as the second wave peaked up investor belief around that reflation and that timing of that got clouded therefore confidence in a way came down and that is where the underperformance came from,” Jain said. Read here.

Market Watch: Rahul Sharma, Equity99 Advisors

– Buy Bharat Dynamics with a stop loss of Rs 350 and a target price of Rs 400-410

– Buy Mrs Bectors Food with a stop loss of Rs 410 and a target price of Rs 470-490

Emami confident of double-digit growth in FY22; says will retain margin above 30%

Emami is confident of double-digit growth in FY22 on pent up demand, said Mohan Goenka, director of one of the major skin and healthcare company, on Wednesday. The company reported good fourth-quarter earnings on a favourable base with 33 percent volume growth in the domestic business and the margins have also expanded significantly at 22 percent. Speaking in an interview with CNBC-TV18, Goenka said, “Despite what we have seen in the first wave (COVID-19), the demand bounced back as soon as the COVID cases came down. Therefore, we are expecting that if from June 1 unlocking happens, we have some summer season still (for summer products). If I take everything into consideration, I am very hopeful we would be able to deliver a double-digit volume growth, which I am confident of.” Read here.

Rahul Gupta, Head Of Research- Currency, Emkay Global Financial Services

The yellow metal has continued to show strength and the safe-haven demand will remain intact in general. While DXY is struggling to extend recovery moves. MCX gold has hit the higher end of the range around Rs 49,000, further upside is possible only if prices hold on to these areas for few sessions. Else a correction towards Rs 48,000/47,500 should be seen.

Yash Gupta Equity Research Associate, Angel Broking

Another weak set of numbers reported by Gati Ltd. The company struggle to reach the pre-COVID levels and even difficult times ahead as we have seen the 2nd wave lockdown are continuing in the majority of states. The company reported another washout year and still no sign of improvement after the change in promoter to all Cargo. We don’t expect any turnaround in business in the next couple of quarters. We have a neutral view on Gati Ltd.

Margin improved in FY21 due to lower travel cost, reduced infra cost: Newgen Software

Newgen Software Technologies posted a mixed set of Q4 earnings. Profits are higher despite lower margins. This is on account of a higher other income and lower taxes this time around. On revenues, Diwakar Nigam, CMD of the company told CNBC-TV18, “We are transitioning from a license phased revenue to subscription-based revenue. So our subscriptions are kind of back-ended and they come year-after-year for the next 5-7 years. This we have 57 percent of annuity income that is the reason why even in COVID times we have been able to do well. Our revenues are becoming better and our US revenues are going up.” Read here.

Broad-based recovery still absent but is not hitting demand significantly: Thermax

Thermax posted a strong set in its Q4FY21 earnings beating street expectations. Order inflow of around Rs 1,500 crore aided the broad-based recovery this quarter. On the COVID-19 pandemic impact, Ashish Bhandari, MD & CEO of the company said, “Until March the execution was on schedule, overall factory productivity was starting to go up, in some of the later months especially February and March were our most productive months in quite some time. At the end of April, that second wave impact started to show up and it is in May that the impact has been at its highest.” On the demand picture, he elaborated, “We see good strength in the large projects. We are seeing larger industries have started investing again but this time around unlike what we saw after the first wave where we saw demand recovery across all of India we don’t see that right now.” More here

Credit Suisse downgrades Tata Steel, JSW Steel, Jindal Steel & Power; shares fall

Shares of steel companies, Tata Steel, JSW Steel and Jindal Steel & Power (JSPL), declined over 2-3 percent in early trade on Wednesday after global brokerage house Credit Suisse downgraded these stocks. With steel names trading at a decadal high relative P/B and the near-term risks to steel prices, the global brokerage advises caution and to book profits as well. Credit Suisse has downgraded Tata Steel to ‘neutral’ from ‘outperform’ and cut the target price (TP) to Rs 1,250 from Rs 630 earlier; it has downgraded JSPL to ‘neutral’ from ‘outperform’ and reduces the target to Rs 450 per share from Rs 250 earlier and also downgraded JSW Steel to ‘underperform’ from ‘neutral’ with a revised TP at Rs 550 per share from Rs 300. More here

Gold rate today: Yellow metal trades near Rs 49,000 per 10 grams

Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Wednesday following a positive trend in the international spot prices that rose near a 4-month high on a weak US dollar. At 11:15 am, gold futures for June delivery rose 0.25 percent to Rs 48,989 per 10 grams as against the previous close of Rs 48,867 and the opening price of Rs 49,067 on the MCX. Silver futures traded 0.57 percent higher at Rs 72,551 per kg. The prices opened at Rs 72,500 as compared to the previous close of Rs 72,140 per kg. More here

Forex market to remain closed today on account of Buddha Purnima

The Indian foreign exchange (forex) market will remain shut on Wednesday on the account of Buddha Purnima. On Tuesday, the rupee ended at 72.77 against the US dollar, strengthen by 19 paise, tracking weakness in the overseas market and the American currency.

Lux Industries zooms 11% to hit new high on strong Q4 earnings

Lux Industries’ share price surged 11 percent to hit a new high on Wednesday after the company’s net profit more than doubled in the March quarter. The company reported a net profit of Rs 90.64 crore in Q4 on the back of healthy operational income. It had posted a profit of Rs 41.49 crore in the same period last year. The stock rose 11 percent to its new high of Rs 2,571.20 per share on the BSE. The company’s income from operations in the quarter under review grew 49 percent to Rs 601 crore as against Rs 404 crore in the corresponding quarter of the previous fiscal. EBITDA margins also improved by 507 bps to 21.45 percent versus 16.38 percent in the year-ago quarter. More here

Market Watch: VK Sharma, Executive Vice President, HDFC Securities

– Buy 75 Call in Bharat Heavy Electricals (BHEL) at Rs 2 with a stop loss at Rs 1.30 for a target of Rs 3.50.

– Buy 5,300 Call in Dr Reddys Laboratories (DRL) at Rs 35 with a stop loss at Rs 20 for a target of Rs 70.

– Buy 1,880 Call in Mphasis at Rs 31 with a stop loss at Rs 15 for a target of Rs 65.

– Buy 31,500 Call at Rs 400 with a stop loss at Rs 250 for a target of Rs 700.

All the above call are for the month of May.

TTK Prestige’s FY22Q1 not bad, will grow 50% more than last year, says chairman Jagannathan

TTK Prestige’s first quarter of the financial year 2022 is not looking bad, said TT Jagannathan, chairman, of the kitchen appliances and cookware manufacturer on Wednesday. TTK Prestige share price saw a massive 15 percent rally on Tuesday, a day after reporting a stellar set of earnings for the March-ended quarter. The company clocked in its best-ever Q4 in terms of topline, bottomline and margins. Speaking about results and the ongoing COVID-19 pandemic, Jagannathan told CNBC-TV18, “Q1 is not so bad, we will be about 50 percent ahead of last year’s Q1. This time the (lockdown) restrictions apply to e-commerce also, so we have to wait and see what happens. The COVID, apparently, is going to take longer to control, so we do not know how long the lockdown is going to last.” More here

JUST IN: Block deal in Bajaj Finserv worth Rs 57.77 crore

Godawari Power and Ispat shares rally 9% on massive jump in Q4 profit

Shares of Godawari Power and Ispat Ltd (GPIL) rallied over 9 percent in early trade deals on Wednesday after the company reported a multifold jump in March quarter earnings driven by higher revenues. The company’s consolidated net profit in Q4FY21 jumped to Rs 304.01 crore from Rs 34.22 crore, while total income rose to Rs 1,263.67 crore from Rs 787.74 crore in the same period a year ago. The net profit of the company in FY2020-21 also rose to Rs 624.49 crore from Rs 174.43 crore in the previous year. Total income in the last fiscal year was higher at Rs 4,075.96 crore from Rs 3,293.18 crore in 2019-20. More here

CLSA adds weight in Axis Bank, drops HCL Tech in model portfolio

Amid India grappling with the second wave of the COVID-19 and its impact on investor confidence, global brokerage CLSA has initiated alterations in its focus portfolio. It has added Axis Bank to its India portfolio, replacing HCL Tech, as CLSA reduces weight in defensives after their strong outperformance in the last two months. CLSA’s defensive index has outperformed the Nifty by 3 percentage points in the last two months helped by a strong performance of pharma and the power sector. After this, relative valuations of defensives are no longer as attractive, it noted in a research report. “To accommodate Axis Bank and to make our portfolio more inclined to play the domestic reflation trade, we remove HCL Tech from our CLSA India focus portfolio,” the brokerage said in the report. More here

Morning market quote from Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

“A significant feature of the ongoing global stock market rally is that it has demonstrated great resilience even in the midst of the second wave of the pandemic. The factors driving the rally like the huge liquidity, historically low-interest rates, widespread retail participation and hope of a vaccine-triggered recovery are still favourable. Even the fear of inflation is subsiding as indicated by the decline in US 10-year yield to 1.56 % and the weakness in the US dollar index. So the broad market construct is favourable. Q4 results continue to be good and many midcaps’ results have beaten street expectations. Weakness and volatility in banking stocks are likely to be a short-term phenomenon which will provide buying opportunities for long-term investors”

Opening Bell: Sensex opens over 100 points higher, Nifty nears 15,250; HDFC Bank, RIL lead

Indian shares rose on Wednesday following gains in Asian peers while the US dollar stood near its lowest levels this year after US Fed officials reaffirmed a dovish stance. Back home, the rise was led by heavyweights HDFC Bank, RIL, HDFC, and Infosys. At 9: 18 am, the Sense was up 111 points at 50,749 while the Nifty rose 35 points to 15,243. Broader markets were also in the green woth the midcap and smallcap indices up 0.2 percent and 0.6 percent, respectively. Among sectors, Auto, FMCG, IT and Pharma indcies gained while Nifty Metal lost 1.5 percent. Nifty Bank and Nifty Fin Services were also in the red.