Stock Market Highlights: Sensex rallies 424 points, Nifty ends above 14,600 led by pharma, banks, IT stocks

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Ajit Mishra, VP – Research, Religare Broking 

Markets traded volatile for yet another day but managed to end higher. After the initial uptick, the benchmark hovered in a range for most of the session but sustained recovery in the last one and half hours aided the index to close around the day’s high. We feel the timely intervention by the apex bank has relieved the participants to some extent amid the prevailing uncertainty. However, it failed to trigger a decisive move in the benchmark indices and we might see further consolidation. On the flip side, there’s no shortage of trading opportunities on the stock-specific front so participants should align their positions accordingly while keeping a check on leveraged trades.

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

The range continues; the Nifty is unable to get past 14,700 or break 14,400. If we can close past 14,700, we will move to 15,100 levels and if we break 14,700, we will see the markets drift to 14,000-14,100. The positive of the current range is that a large move is in the offing where traders can find an appropriate opportunity to make money!

Manish Shah, Founder, www.Niftytriggers.com

Nifty has to clear 15,050 with a strong conviction candle for a sustained move on the upside. As a short term 2-3 day move. If Nifty breaks above 14,670 expect a rally to 14,830-14,850 and above that to 15,000 over the next 2-3 days. Tomorrow is the weekly expiry a break above 14,670 could mean a nice play on the long side for weekly expiry players. Major support is at 14,480-14,450. A break below this and we could see a drop to 14,350.

Deepak Jasani, Head of Retail Research, HDFC Securities

India benchmark equity indices rose on May 5 after the RBI announced measures to further support the economy as coronavirus cases continue to surge. Nifty formed an inside day, meaning that the high low range for the day was within the high low range of the previous day. However the Nifty closed near its intraday high. Advance decline ratio too became positive. 14,461-14,723 continues to be the range for the Nifty in the near term. In case we do not see a negative day tomorrow, then we may have seen a near term bottom at 14,416 on May 03.

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

The spot is hovering around 74 zone, the Covid related worries are keeping it afloat. But the influential dovish cover is putting pressure on the spot. All eyes are on the US NFP data and it is anticipated to show the US economy adding 950K jobs in April, a better data may establish an uptrend in USDINR spot. So up until then, we expect USDINR spot to continue trading sideways in between 73.50 and 74.25.

Market At Close: Here are key highlights from today’s market session

– Market Closes At Day’s High, Led By Financials & Pharma

– RBI’s Announcements Lead To A Big Gain In Pharma; Nifty Pharma Up 4%

– Sensex Gains 424 Points To 48,678 & Nifty 121 Points To 14,618

– Nifty Bank Rises 513 Points To 32,784 & Midcap Index 242 Points To 24,410

– 43 Nifty Stocks Close Higher; Sun Pharma, UPL, Axis, IndusInd Top Gainers

– Lupin Rises Over 13% To Record Biggest Single-day Gain In 18 Years

– Pfizer Moves 4% Higher On Drug Regulator’s Nod For Import of Vaccines

– IDBI Bank Surges On Reports Of Cabinet Considering The Stake Sale

– NMDC Surges 6% After Investec Upgrades The Stock To Buy

– SRF Rises 2% While Ceat Slips 2% After Reporting Earnings For Q4

– Market Breadth Favours Advances; Advance-Decline Ratio At 2:1

Closing Bell: Indian equity indices ended higher Wednesday led by strong gains across the board after the Reserve Bank of India (RBI) Governor Shaktikanta Das announced a slew of measures to support small businesses amid the second wave of pandemic. The Sensex surged 424.04 points, or 0.88 percent to close at 48,677.55, while the Nifty ended 121.35 points, or 0.84 percent higher, at 14,617.85. Broader markets supported the rally with the Nifty Smallcap100 index gaining 1 percent.

Barring Nifty Realty, all other sectoral indices closed in the green with Nifty Pharma jumping over 4 percent followed by Nifty PSU Bank, Nifty IT and Nifty Metal. Sun Pharmaceutical Industries, UPL, IndusInd Bank, Axis Bank and Kotak Mahindra Bank led the gains among Nifty50 constituents, while Adani Ports & SEZ, Bajaj Finance, SBI Life Insurance, Asian Paints and Hindustan Unilever were the top index losers.

Jyoti Roy – DVP- Equity Strategist, Angel Broking

Indian Services PMI for April decreased marginally to 54.0 in April as compared to 54.6 in March despite the second Covid wave. Most people on the street were expecting a bigger drop in the PMI numbers if not a contraction (reading below 50). While this is the slowest reading in the last three months, it still points to a solid pace of expansion especially given the second Covid wave.

The April manufacturing and services PMI numbers corroborate our view that the economic rebound has been resilient in spite of the second Covid wave and it seems that the restrictions imposed by various states are not having a very large impact on the economy so far. All in all the PMI readings for the month of April have come in as a pleasant surprise.

Dhiraj Relli, MD &CEO, HDFC Securities views on the announcement by RBI Governor

The RBI Governor’s announcement did not include blanket moratorium and hence some of these fears did not come out to be true and Banking stocks did not sell-off. Small businesses and MSME borrowers have been given a chance to extend their payment schedules. Rs 50,000 cr term liquidity for the healthcare sector is welcome but unlikely to benefit many listed players. Overall the street may be disappointed with the financial impact of the announcement but given the scale of the pandemic, we can expect more such announcements going forward. Overall a welcome proactive move by the RBI, though yeh dil mange more.

Jindal Drilling & Industries | The company has received Letter of Award from ONGC for charter hire of Offshore Drilling Rig Jindal Explorer for contract period of 3 years.

Srikanth Vadlamani, Vice President – Senior Credit Officer, Financial Institutions Group, Moody’s Investors Service

In response to the worsening situation in India, the Reserve Bank of India (RBI) has allowed for a one-time restructuring of loans to individuals and small businesses up to a loan size of Rs 250 million.  This measure is much milder than the blanket loan moratorium given last year and the proportion of restructured loans will be lower. Nevertheless, the need for this measure highlights the reemergence of downside risks to banks’ asset quality.

Mohit Ralhan, Managing Partner and Chief Investment Officer, TIW Private Equity

RBI continues to play a proactive role in India’s effort to counter the macroeconomic impact of COVID-19. The on-tap liquidity facility of Rs 50,000 crore for supporting healthcare infrastructure and the three-year special long term repo operations (SLTRO) of Rs 10,000 crore for small finance banks are timely measures to combat COVID-19. RBI also continues to purchase government securities. It has clearly signalled its intent to keep adequate liquidity in the financial system. The markets have responded positively with pharmaceuticals and banking stocks being top gainers. Overall, given how the story is unfolding, pullbacks from market peaks can be utilized as buying opportunities.

Kirloskar Ferrous Industries Q4FY21 | The company’s net profit jumped to Rs 135.3 crore from Rs 57.5 crore, while revenue rose 67.1 percent to Rs 748.7 crore from Rs 448.2 crore, YoY.

Global Markets: Europe leads stock market recovery on firmer business growth

Global shares edged up on Wednesday as US stock futures steadied after a pullback in tech darlings while European markets were buoyed by accelerating business activity and positive earnings, a Reuters report said. The Euro STOXX index added 1.3%, heading for its best day in nearly two months, helped by data showing euro zone business activity quickened last month, while the services industry returned to growth. Top performers included Germany’s Rational and Merck after well-received numbers. The MSCI world equity index, which tracks shares in 49 countries, was trading 0.1% higher after a sell-off on Tuesday from near record highs. It wasn’t all rosy, however. MSCI’s broadest index of Asia-Pacific shares outside Japan sank 0.4% for its fourth consecutive day of losses, although Asian trading was thin due to holidays in Japan, China and South Korea.

Tata Motors April Sales | Jaguar Land Rover (JLR) UK sales declined 56 percent to 8,367 units from 18,966 units, MoM. Jaguar UK sales fell 48 percent to 1,993 units as against 3,800 units, while Land Rover UK sales decreased 58 percent to 6,374 units from 15,086 units, MoM.

Jyoti Roy – DVP- Equity Strategist, Angel Broking on RBI measures 

The measures announced by the RBI are a positive development especially for SFB’s. However we believe that the restructuring of loans and stress on asset quality for the banking sector will be largely dependent upon the duration of the second wave and the lockdowns. In case the lockdowns are only restricted to Q1FY22 and we see a gradual reopening of the economy from Q2 onwards then the stress on the banking system and asset quality should be limited. However in case the lockdowns extend well into a major part of Q2 also then there will be a build up in the banking system.

CLSA on Adani Ports & Special Economic Zone

Adani Ports & Special Economic Zone’s (ADSEZ) traffic slowed despite a low base in 4Q as volume grew 9% (ex-Krishnapatnam Port, KPCL) while port Ebitda rose 6% (ex-KPCL). The company’s market share gains also slowed in 4Q with its volume rising 9% YoY (ex-KPCL) vs major ports at 8%. Volume was supported by containers and coal. ADSEZ’s Ebitda margin rose 578bps to 69.5% on price hikes and cost cutting. But, lumpy SEZ income fell 86% YoY (19% below our estimate). Led by the second wave of Covid-19, management guided for FY22 volume of 310-320mt (CLSA: 327mt), which could disappoint the market. Following a 35% rally over the past three months, we downgrade the stock from O-PF to U-PF as it offers limited upside to our new SOTP-based Rs 816 target price (previously Rs770).

Market Watch: Ruchit Jain of Angel Broking

– Buy Granules India with a stop loss of Rs 335 and target prices of Rs 370

– Buy Shipping Corporation of India with a stop loss of Rs 108 and target prices of Rs 125

HDFC Securities on RBL Bank

RBL Bank’s 4QFY21 pre-provisioning profit (15% YoY) was higher than our expectations on account of higher income from recoveries, partially offset by softening NIMs (4.17%). Asset mobilisation remained muted (1% YoY), while deposits mobilisation (27% YoY) has gained traction. Asset quality woes continue for RBL Bank with slippages at ~10% (annualised), similar to Q3 levels (on pro-forma basis), and restructured pool at 1.7% of loans. With PCR at 52% and provisioning buffer nearly entirely drawn down, along with the second wave of pandemic, credit costs are likely to remain elevated for FY22 as well. Maintain REDUCE with revised TP of Rs 189.

L&T Infotech Q4FY21: Net margins to remain around 14%, says CEO Sanjay Jalona

L&T Infotech in Q4FY21 reported healthy EBIT margins, expanding by 320 basis points. Speaking to CNBC-TV18, Sanjay Jalona, MD & CEO of the company said that the net margin will remain at around 14 percent. “We have always maintained that we will be in the narrow band of 14 percent net margins and that is where we would like to stay. Our focus will be on investing for growth, investing in localisation, and investing in capability building in times to come. We need to invest in the safety of people, who have to invest in capability, we need to make sure that we support our customers in the most difficult times of transformation that they are going through. That is why we are confident of being a growth company with a stable margin at 14 percent,” he told CNBC-TV18. He also said that the company has given FY21 wage hikes in January and has advanced the FY22 wage hike cycle to April from July. Watch here.