Daily Market Wrap Up - 31st August 2016

Daily Market Wrap Up- 30th August 2016

Daily Market Wrap Up

OASIS FUNDAMENTALS - WEEKLY UPDATE

PARTING GIFT FROM DR. RAJAN

Bond markets got a booster shoot from RBI with slew of measures announced on 25^th August 2016. Accepting Khan Committee Report recommendations, RBI has announced various measures ranging from enhancing aggregate limit of partial credit enhancement (PCE) provided by banks, permit brokers in corporate bond repos, authorize platform for repo in corporate bonds and encouraging credit supply for large borrowers through market mechanism. The central bank will also seek amendments in the RBI Act to accept corporate bonds under Liquidity adjustment Facility (LAF). In addition to this, banks would be permitted to issue Masala Bonds i.e Rupee bonds overseas for their capital requirements and for financing infrastructure and affordable housing. The RBI has also announced that Foreign Portfolio Investors (FPIs) would be given direct access to NDS-OM and trade directly in corporate bonds.

For forex markets, Reserve Bank has now permitted entities both resident/non-resident to hedge transactions upto a limit of USD 30 million at any given time. The entity would be free to access any market, OTC or any other exchange and use any of the permissible products at its discretion In addition to this limit, AD banks based on their assessment of the customer, may allow an open position limit of upto USD 5 million. 

JANET &  JACKSON HOLE

US Fed has signaled that the US economy is on a strong footing with respect to labor market though inflation is still under 2%. Incase August jobs report next Friday is positive, likelihood of September hike cannot be ruled out. But December rate hike is higher possibility with US elections in November. 

INFOSYS SYNDROME

Infosys touched its 52 week low during the week and closed at Rs. 1020.75 on Friday. The Bengaluru based company clarified that it would give more accurate information on its revenue guidance after the second quarter FY17. The company is reeling under Brexit effects among its clients. The Royal Bank of Scotland has cancelled its contract with the company post Brexit.      

FRIDAY - Daily Market Wrap Up

Highlights of the Day

•  Abbott India reported strong performance with 10% rise in Net Profit & 16% jump in income from operations for the quarter ended 30^th June 2016. The stock was up 0.62% and closed at Rs. 4731.45.
•   J.B. Chemicals & Pharmaceuticals Ltd was one of the star performers rising 8% and closing at Rs. 366.60 gaining Rs.24.65 by the end of the day. The company reported 26% rise in its standalone Net Profit and 9% increase in income from operations in June quarter.
•  Finolex cables reported 37% rise in Net Profit for the period ended June 30^th 2016. The stock closed at Rs. 428.65 by end of the day. 
• Finolex Industries also reported strong quarterly performance with 36% rise in PAT and 6% jump in income from operations.
•  Nifty declined 0.23% at 8572.55 for the day with 21 advances and 30 declines. S&P BSE 30 closed down by 0.19% at 27782.25 declining by 53.66 points for the da

Major Developments  

Biocon Ltd has announced regulatory submission for proposed biosimilar trastuzumab acccepted for review by European Medicines Agency".

Market Mood   

              

Stock markets ended flat with midcaps outperforming on both S&P BSE & NSE. S&P Midcap rose 0.21% gaining 22.21 points whereas Nifty Midcap 50 jumped 0.34% by the end of the day. Nifty Auto was another out-performer rising 0.71% for the day. For the week as a whole S&P BSE Sensex and Nifty closed down by 0.9% and 1% respectively.   

                                  

Wednesday – Daily Market Wrap Up

Highlights of the Day

• Engineers India reported stellar performance with 50% rise in Net Profit for the quarter ended 30^th June 2016. The stock was up 8.16% and closed at Rs. 251.
•  Aurobindo Pharma Ltd also enthralled stock markets with 24% rise in its consolidated Net Profit and 13% rise in income from operations in Q1 FY17. The scrip closed at Rs. 787.55 or 7% up by the end of the day.
•   Vardhaman Textiles reported 4% rise in Net Profit for the period ended June 30^th 2016. The stock gained Rs. 44.35 to close at Rs. 1024.45 or 4.53% up by end of the day.
• Nifty closed 0.21% up at 8650.30 for the day with 24 advances and 27 declines. S&P BSE 30 closed at 28059.94 up 0.25% or 69.73 points for the day.

Major Developments                          

•     Central government has cleared the revised double taxation avoidance agreement (DTAA) with Cyprus. The agreement will allow India to tax capital gains from April 1 2017.

• Citibank is in initial stages of launching the largest digital contract of USD 1 billion. The contract is for end-to-end transformation of the company’s global operations.

Market Mood   

Stock markets were range-bound with small and midcaps stealing the show. S&P BSE Mid & Small cap were up by 0.61% and 0.65% respectively.

HDFC BANK Q1 FY 17 REPORT

Banking Industry bell-weather, HDFC Bank reported strong first quarter results with Net Profit, Net Interest Income, deposits and advances rising in double digits. The second largest private sector bank with CAR of 15.50% (Tier I-13.30%) commands credibility due to growing profitability and stable asset quality in today’s volatile scenario. The bank is poised for higher growth as one of the major players in Indian banking industry. Thus we recommend BUY for the stock for medium and long term investment. Read the full report below...

                                  Tuesday Tantrums – Daily Market Wrap Up    

Highlights of the Day

•   IPO of RBL Bank has been over subscribed 69.53 times on the last day of the issue. The price band of the offer was RS.224-225 per share. The IPO received bids for 263.52 crore equity shares against the total issue size of 3.79 crore shares.
•  Gillette announced June quarter results with profit declining by 35%. The scrip ended 1.71% down at Rs. 4681.40.
•  Tata Power announced June quarter with net profit declining by 63%. The scrip closed down by 3.24% at RS.74.75 at the end of the day.
• Nifty closed 0.04% up at 8632.60 for the day with 24 advances and 27 declines. S&P BSE 30 closed at 27990.21 up 0.02% or 4.67 points for the day.

Market Rumours

Idea and Vodafone are in talks for a mega merger or a strategic deal. The merger if it happens would dislodge Bharti Airtel from its number one position. Vodafone would also get automatic listing after the merger. Both the companies denied the merger news.

Market Mood                 

Both the major indices were volatile and recovered late in the day. IT stocks helped in the recovery as Nifty IT was up by 1.64%. Infosys led the IT pack rising by 2.41%. 

                         Monday Blues - Daily Market Wrap Up

Highlights of the Day

• IPO of RBL Bank has been fully subscribed on the second day of the issue. The price band of the offer is RS.224-225 per share. The offer would close tomorrow. 
•  NTPC announced Q1 FY17 results with profit rising by 4% and income from operations growing 11% YOY.
• Hindustan Copper announced Q1 FY17 with a net loss of Rs. (28.80) million for the quarter ended June 30, 2016 as compared to net profit of Rs. 200 million for the quarter ended June 30, 2015.
• Pharmaceutical Major Lupin Limited (Lupin) has received approval for Acotiamide 100 mg Tablets from the Central Drugs Standard Control Organisation (CDSCO).
• Nifty closed 0.44% down at 8629.15 for the day with 15 advances and 36 declines. S&P BSE 30 closed down 0.33% or 91.46 points at 27985.54 for the da

Company Update

Lupin Limited

Lupin Limited (Lupin) has received approval for Acotiamide 100 mg Tablets from the Central Drugs Standard Control Organisation (CDSCO). Acotiamide is a first-in-class novel drug to be introduced into the Indian Pharmaceutical Market (IPM) which could benefit millions of patients suffering from Dyspepsia or Indigestion, amongst the most common stomach complaints encountered in clinical practice. The current market for plain Gastrointestinal (GI) prokinetics and combinations is estimated to be around INR 2640 crores growing at 14%. The overall GI market is estimated at INR 11,438 crores which is growing at 13%.

Market Mood             

    

Both the major indices moved southwards with Infosys hitting 52 week low. Caution and profit booking was the flavor of the day. Banking industry welcomed the appointment of Dr. Urjit Patel as the new RBI Governor whereas stock markets seemed to loose hope of a rate cut with bank nifty closing 0.43% down.

                             

POWER GRID CORPORATION OF INDIA Q1 FY17 REPORT Power Grid Corporation Of India reported strong first quarter results FY17 with both Revenue/Income from operations and PAT growing by 30% & 33% YOY respectively.The company has prepared its financial statements in the current quarter on the basis of Indian Accounting Standards. In the present scenario with government reforms giving huge fillip to power & infrastructure, Electric Utilities sector stands to gain in the long run. Thus we are bullish on the stock for medium and long term. Read the full report below.

YES BANK research report Q1 FY 17 In the present volatile scenario with liquidity churning stock markets, Yes Bank is one of the best bets available in the current Indian Banking scenario. We recommend BUY for the stock for medium and long term. Read the entire report below...

IndusInd Bank Research Report

IndusInd bank with CAR of 15.42% (Tier I-14.81%), credit growth rate above industry average, growing profitability and stable asset quality is poised for high growth as one of the major players in Indian banking industry. Thus we recommend BUY for the stock for medium and long term investment.

Read the entire Report Here.

INDUSIND BANK: Q1 FY17

Yet, another Blockbuster performance by IndusInd Bank, one of the leading star performers of Indian private banking sector. IndusInd has become synonymous with double digit growth. As expected, Net Profit, Net Interest Income, deposits and advances all reported double digit growth rates. Net Interest Income, difference between interest earned and expended was at Rs. 13564 mn up by 38% YOY. Net Profit too zoomed 26% YOY at Rs.6614 mn in the current June quarter. Net Interest Margin at 3.97% completed the picture with 29 basis points jump buttressing the bank’s profitability in the present volatile scenario. Asset quality is stable with Gross NPAs and Net NPAs at 0.91% and 0.38%, rising by 4 bp and 2 bp respectively QOQ. Provisions & contingencies have risen considerably, 8% QOQ and almost doubled to Rs. 2305 mn compared to corresponding period previous year. Double digit growth rate is visible in all business segments except treasury, retail segment (23%) which constitutes 51% of the total revenue followed by other banking business (31%) and corporate (18%). Low cost funding CASA declined by 30 basis points YOY in the present June quarter which is a concern area for the bank. Other income which accounts for 23% of the total income for the bank climbed 28% YOY in Q1 FY17. Growth momentum continued for core fee with yearly growth of 23%. Deposits and Advances grew parallely at 30% growth rate YOY in Q1 FY17. Unpredictable Fed moves, China & Europe slowdown and now Brexit has kept equity investors on tenterhooks. Thus with uncertainty being the new norm, Indian Private sector offers ray of hope for value investors.  IndusInd bank with CAR of 15.42% (Tier I-14.81%), credit growth rate above industry average, growing profitability and stable asset quality is poised for high growth as one of the major players in Indian banking industry. Thus ‘BUY’ signal is recommended for the stock with the target price of Rs.1280 for medium and long term investment.  

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