Market Live: Sensex, Nifty open moderately higher; RIL leads, HDFC loses

10:12 am Buzzing: Motilal Oswal has initiated coverage on Jubilant Life Sciences with a buy rating and target price of Rs 905, implying 31 percent upside on expectations of strong growth in pharma and life science ingredients segments going ahead. The stock gained more than 5 percent intraday.

All sub-segments in pharmaceuticals (which constituted 52 percent of total sales in FY17) are well poised for growth, the research house feels.

9:59 am Buzzing: Shares of ABC Bearings has locked at 20 percent upper circuit and Timken India gained nearly 5 percent as ABC Bearings is going to merge with the later one.

The board of directors of ABC Bearings at its meeting held on July 4, has approved the merger of ABC Bearing into Timken India through a scheme of amalgamation and arrangement amongst ABC Bearing, Timken India and their respective shareholders and creditors,” ABC Bearings said in press release.

The said scheme is subject to the approval of the shareholders and creditors of ABC Bearings, approval of the regulatory authorities and the sanction of the National Company Law Tribunal.

Timken India will issue 5 equity shares of Rs 10 each for every 8 shares held in the ABC Bearings of Rs 10 each.

9:45 am FII View: Adrian Mowat of JPMorgan said the MSCI Emerging Market index rallied 17 percent in the first half of 2017 outperforming Developed Market by 8 percent.

This was the best first half performance since 2009. It was the 6th straight month of outperformance from emerging markets versus developed markets, the longest run since May 2008, and only the fourth such streak in the last 20 years, he added.

He feels capital is returning to emerging markets.

For India, policy newsflow remains supportive given progress on GST rollout, increasing expectations of monetary easing and steps towards resolution of asset quality issues by RBI, Mowat said.

9:30 am Earnings Preview: Expect Nifty’s Q1FY18 earnings to decline 6%, revenue growth of 7%: Deutsche

Abhay Laijawala of Deutsche Bank said the research house expects Q1FY18 aggregate revenue growth of 7 percent, EBITDA decline of 7 percent and earnings decline of 6 percent (YoY) for the Nifty.

The 6 percent forecast decline in earnings may be exaggerated by the large YoY inventory adjustments at the oil marketing companies due to the sharp decline in global oil prices, according to him.

He feels excluding energy, Nifty earnings are expected to rise by 4 percent (YoY).

GST rollout uncertainties are forecast to impact earnings of companies focused on domestic consumption while exchange rate dynamics are likely to impact earnings of exporters, according to Laijawala.

For the Deutsche Bank coverage universe, analysts forecast revenue growth of 5 percent, EBITDA decline of 7 percent and earnings decline of 12 percent (YoY), he said.

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9:15 am Market Check: Equity benchmarks opened moderately higher on Wednesday, with the Nifty holding 9600 level despite mixed Asian cues.

The 30-share BSE Sensex was up 25.37 points at 31,235.16 and the 50-share NSE Nifty rose 5.95 points to 9,619.25.

Reliance Industries hit a fresh 52-week high, up nearly a percent and surpassed market capitalisation of TCS. BPCL, M&M, Adani Ports and Tata Motors were other gainers.

HDFC lost a percent on exposure to NPA accounts Insolvency and Bankruptcy Code. Infosys, Maruti Suzuki, Tata Steel and Hindalco Industries were under pressure.

The broader markets gained too, with the Nifty Midcap up 0.3 percent as about two shares advanced for every share falling on the BSE.

Among midcaps, ABC Bearings surged 20 percent and Texmaco Rail was up 10 percent. Jubilant Life, Kesoram Industries, United Spirits, Persistent Systems, Shilpi Cable, Tata Coffee, Jaypee Infratech, Videocon and Venky’s were up 1-5 percent.

Shiva Cement plunged 10 percent after 50 percent rally. Reliance Communications and Bajaj Finance were other losers.
Asian bourses were mixed as geopolitical concerns came to the fore a day after North Korea launched a long-range ballistic missile.