Stock Market Live: Sensex rises 34 points, Nifty tests 10,950 resistance; shares of Reliance Industries, PC Jewellers, Rajesh Exports, Voltas bleeds
Bull run can be expected only when the Nifty breaks psychological 11,000 levels and sustains above it. Right now, it has strong support at around 10,500 mark and facing strong resistance at 10,980 levels.
After extending gains over 150 points in mid-session trade on strong US data and Fed Chief's dovish stand on interest rates, the Indian indices succumb to profit booking however the 50-share Nifty sustained above the psychological 10,880 levls. Nifty rose 34 points to 36,616 levels while the BSE Sensex gained 22 points before closing at 10,934 levels. Consumer durable, auto and consumer discretionary goods and services index were the top gaining sectors logging near 1.14 per cent, 0.81 per cent and near 0.54 per cent gains from Monday close. Bankex too gained near 0.3 per ent.
Speaking on the market outlook for Tuesday Mehul Kothari, Senior Technical Analyst - Equity at IndiaNivesh told Zee Business in a written statement, "We maintain our stance that for the markets to ascent on the higher side Nifty needs a strong close above 11000 mark. Only in such scenario we could witness higher levels like 11100 – 11200. Due to unfavourable risk reward it’s better to avoid fresh long in the index and concentrate on stock specific action." Kothari said that on the downside, yesterday 10800 mark acted as a strong support for the index and is likely to act as crucial level for the coming sessions too. A breach of the same might lead to profit booking in the markets. Traders are constantly advised to remain stock specific and avoid over leveraged positions.
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Asian stocks trade flat
Asian indices too traded flat throughout the intraday trade. South Korea's Kospi slipeed by near 0.06 per cent after trading range bound in between 2201 to 2218 levels. Hang Seng nudged higher by around 0.21 per cent to 27,990 mark. Shanghai index jumped near 1.3 per cent to 2,618 while Japan's Nikkei slide by around 0.2 per cent to 20,842 aftr trading in between the range of 20,822 to 20,974 levels.
Consumer durable sector led the rally
In consumer durable sector, Titan Company led the surge by gaining over 4 per cent from its Monday close, VIP Industries surge over 0.6 per cent while Blue Star went up by around 0.5 per cent. However, shares of PC Jewellers, Rajesh Exports, Voltas and Whirlpool of India were in the losers list. PC Jewellers stock slide near 4.8 per cent, Rajesh Exports stock went down by around 3 per cent, Voltas scrip got hit by near 2 per cent while Whirlpool of India went down by near 2.8 per cent.
Top losers in energy sector
Energy major and Sensex major Reliance Industries slide 0.18 per cent from its Monday close. Aban Offshore bleeds near 5.5 per cent, Castrol India shares went down by near 1.5 per cent, GP petroleum slide by near 2.25 per cent, shares of Coal India Limited went southward by around 1.5 per cent, IOCL stocks went down by near 0.8 per cent while Jindal Drilling and Industries Limited slipped by around 1.2 per cent.
Shares to buy: Buy Parag Milk Foods for 79% return, says Elara Securities
Parag Mik and Food reported Net sales at Rs 6bn (in –line), up 15.7 per cent YoY led by 19 per cent YoY growth in VAD (67.5 per cent of sales). Liquid milk (17.1 per cent of sales) grew by 11 per cent YoY and SMP (12.6 per cent of sales) grew by 4 per cent YoY. Volume growth was about 19 per cent YoY.
Speaking about the fundamentals of the stock Sagarika Mukherjee, Analyst at Elara Securities told, "Gross margin of Parag Milk and Foods expanded by 185 bps YoY/176 bps QoQ due to favorable mix (salience of VAD increased by 200bps to 67.5 per cent), benign commodity prices and export benefits. EBITDA was at Rs 620mn (6.8 per cent lower than EE) up 5.5 per cent YoY. EBITDA margin was at 10.3 per cent down -99.7bps YoY despite a good gross margin expansion due to increase in employee expenses up by 69bps YoY and other expenses (50-55 per cent is variable), up by 213bps YoY. PAT came in at Rs 307mn up by 21 per cent YoY but was 9.1 per cent lower than EE, due to lower other income and tax rate).
On what Elara suggests to the investors in regard to the Parag Milk Foods Sagarika told, "Parag has reported high growth by expanding into North and East India while keeping working capital under control. We believe that with improving cash flows, operational leverage and higher salience of VAD, the stock could get re-rated. We maintain buy with target price of Rs 366." currently the stock is oscillating around Rs 205 per stock levels. so, an investors can expect up to 79 per cent gains if the above forecast comes correct.
Among banking stocks, shares of Axis Bank rose by near 0.76 per cent, IndusInd Bank wnt up by around 1.7 per cent, Yes Bank stocks surge by near 1.2 per cent while Kotak Mahindra Bank and SBI shares went up by more than half a per cent.
Shares to buy: Buy Exide Industries for 35% gains, advises Elara Securities
Exide Industries revenues grew 10 per cent YoY to Rs 25bn, which is 2 per cent below the marekt estimates, owing to sluggish growth in automotive OEM (original equipment manufaturer), inverter and industrial segments while auto replacement likely to have grown in mid-double digits according to our channel checks.
Speaking on the fundamentals of the stock Jay Kale, Chief Financial Analyst at Elara Securities reported in their researh report, "Exide Industries EBITDA grew 11 per cent YoY to Rs 3.1bn (4 per cent below our estimates), while margin increased 10bp YoY and 30bp QoQ to 12.5 per cent (30bp below our estimates). Other expenses and employee expenses remained flat QoQ despite a 8 per cent QoQ revenue decline which resulted in margin pressure. RMC/sales declined 200bp QoQ to 64.9 per cent (2-month lag lead prices down 6 per cent QoQ). Lower than estimated other income and higher tax rate resulted in PAT growth of 0.5 per cent YoY to Rs 1.55bn (11 per cent below our estimates)."
On what he suggests to the market investors in regard to Exide Industries stock the Elara Securities report says, "The fundamentals of the company suggests that the Exide Industries stock has around 35 per cent upside potential. We recommed investors to buy the scrip for the target of Rs 302 per stock levels." Currently, the stock is hovering around Rs 224 per share mark.
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Shares to buy: Buy Equitas Holdings Ltd stock for 32% gains, says Yes Securities
Equitas SFB has been improving its pace and quality of execution of the transformation strategy, and thus is likely to reach the targeted steady-state franchise profitability by 2022.
Speaking on the fundamentals of the stock Rajiv Mehta, Research Analyst at Yes Securities inform in their research report, "In Q3 FY19, the bank reported acceleration of loan growth, improved contribution of deposits in borrowings, impressive cost management and neat asset quality. Asset growth continues to be driven by the key objectives of diversification and prudent risk selection. Deposits growth was predominantly driven by retail TDs, with steps being taken to catalyze its mobilization. Excluding PSLC related one-off expenditure, the opex trended flat. Notwithstanding some impact of the cyclone Gaja on MFI portfolio, overall collection trends for the bank were strong leading to a decline in credit cost."
On what he suggests to the market investors in regard to Equitas Holdings stock Rajiv Mehta of Yes Securities told, "The fundamentals of the company suggests that the Equitas Holdings stock has around 32 per cent upside potential. We recommed investors to buy the scrip for the target of Rs 160 per stock in one year perspective." Currently, the stock is hovering around Rs 120 per share.
Consumer durable index follows energy sector rally
following the enrgy sector rally at Indian indices, the consumer durable index extende its Monday rally on Tuesday by gaining around 0.84 per cent from its Monday closing. Graphite India and kalptary Power Transmission shares surge near 2 per cent while HEG stocks went up by around 2.6 per cent. However, Suzlon Energy and Finolex Cables failed to grab the opportune rally and remained in red zone. Shares of Suzlon Energy went southward by near 0.4 per cent while Finolex Cables stocks bleed by around 1.35 per cent.
Energy leads among surging stocks
Energy major Asian Oilfield Services stocks surged around 3.7 per cent, petronet LNG stocks rose by near 2 per cent while Alphageo (India) Ltd. shares rise by more than 2 per cent. However, Sensex heavy weight Reliance Industries witnessed some profit booking in early trade and slipped by around 0.25 per cent. ONGC and Gujarat Gas shares went northward by around 0.9 per cent.
9: 00 AM
Giving mixed signals in regard to early morning trade opening, the Indian indices have pared early losses. Extending its topsy-turvy trade that began from Monday morning, the BSE Sensex slide near 138 points in early pre-open session and quickly pared its early losses and surge near 4 points.
Shares to buy: Buy JMC Projects (India) Ltd. stock for 31% gains, says Yes Securities
JMC Projects (India) Ltd delivered strong performance during Q3 FY19 with revenue growing 26 per cent yoy, backed by pick-up in execution. The margin, however, has remained stable at around 10 per cent aided by benign construction expense. Higher other income and benign interest cost translated into robust 55 per cent yoy growth in net profit. During 9M FY19, JMC has received order inflows to the tune of Rs 50.8 bn which has bloated the order book to Rs 99.3 bn excluding L1 worth Rs 7 bn.
Speaking on the fundamentals of the stock Alok Deora, Research at Analyst at Yes Securities told in their research report, "The strong order book, driven by the Buildings and Factories (B&F) segment (56 per cent share), provides revenue visibility for the next two years. Infrastructure segment, which used be a small portion of business previously, now forms around 35 per cent of the order book. This diversification signficantly enhances the business opportunity for JMC. The Company is targeting large order wins during the remaining part of FY19."
On what he suggests to the market investors in regard to JMC Projects stock Amar Ambani of Yes Securities told, "The fundamentals of the company suggests that the JMC Projects (India) Ltd stock has around 31 per cent upside potential. We recommed investors to buy the scrip for the target of Rs 120 per stock in one year perspective." Currently, the stock is hovering around Rs 92 per share.
Shares to buy: Accumulate SBI stock for 17% gains, advises Elara Securities
Negative net slippages, interest income accrual from NPA recovery, better loan pricing environment and stable CASA composition led to robust SBI core performance. There could be some volatility in net slippages & recovery and upgrade numbers due to dependence on NPL recovery on legal matters; nonetheless, the direction appears to be correct.
Speaking on the fundamentals of the stock Rakesh Kumar, Equity Analyst at Elara Securities told Zee Business in a written statement, "In third quarter, SBI's core performance was ahead of our expectations, with NII growth at 8.5 per cent QoQ and 21 per cent YoY on the back of 4.6 per cent QoQ and 12 per cent YoY credit growth and 10bp QoQ and 36bp YoY expansion in margin. Accelerated provisioning of Rs 50bn resulted in a sharp rise in the coverage ratio (including technical write-offs) to 74.6 per cent. The bank utilized sizeable MTM investment depreciation write-backs at Rs 79.9bn to provide for NPL."
On what he suggests to the market investors in regard to SBI stock Rakesh Kumar of Elara Securities told, "The fundamentals of the company suggests that the SBI stock has around 17 per cent upside potential. We recommed investors to accumulate the scrip for the target of Rs 332 per stock." Currently, the stock is hovering around Rs 280-85 per share.
8:20 AM Asian stocks surge on US data, Fed chief's dovish turn on interest rate
Recent US data and the Federal Reserve's dovish turn kept lifting Asian stocks early on Tuesday, while the dollar held the upper hand against its rivals.
Japan's Nikkei rose 0.4 per cent before erasing gains while MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.3 per cent.
Australian shares jumped 1.95 per cent, with long-battered financials surging on short-covering after a special government-appointed inquiry excoriated Australia's financial sector for misconduct but left the structure of the country`s powerful banks in place.
Elsewhere in Asia, trade was light, with markets in greater China, South Korea, Singapore and Indonesia are all closed for the Lunar New Year.
On Wall Street, the S&P 500 gained, with technology and industrials the biggest risers as investors braced for another big week of fourth-quarter corporate earnings reports.
After the bell, Google operator Alphabet fell about 3 per cent as its higher spending in the fourth-quarter worried investors even as its revenue and profits beat Wall Street's expectations.
MSCI's gauge of stocks across the globe reached a two-month high, having risen more than 13 percent from its near two-year low late in December, helped by the Fed's change of tack.
The dollar's index against six major currencies rose to 95.843, having gained 0.27 percent on Monday.