Market Live: Sensex, Nifty consolidate with negative bias but Midcap outperforms

12:10 pm Buzzing: Aditya Birla Fashion & Retail (ABFRL) shares extended gains after ICICIdirect has initiated coverage on the stock with a buy recommendation and a target price of Rs 210. The stock rallied over 1.5 percent intraday after this report, in addition to 0.8 percent upside in previous session.

ABFRL enjoys a vantage position in its men’s portfolio built over wide offerings across price points (mass to luxury), broad categories (men’s, women’s and kidswear & accessories) and diversified market channels (MBO+EBO+SIS).

“Newer brands coupled with the existing portfolio would provide cohesive growth to company’s revenues, which are expected to grow at a CAGR of 15 percent to Rs 8,841 crore and return on capital employed expansion to 14.6 percent (against 2.4 percent currently),” it reasoned.

11.43 am Market Check: Equity benchmarks continued to consolidate with negative bias but the broader markets outperformed in late morning trade.

The 30-share BSE Sensex was down 48.94 points at 31,320.40 and the 50-share NSE Nifty fell 19.40 points to 9,655.15.

The BSE Midcap index gained 0.1 percent and Smallcap was up 0.3 percent on positive breadth. About 1,251 shares advanced against 1,070 declining shares on the exchange.

11:20 am IPO: Insurance Regulatory and Development Authority has given an in-principle approval for the IPO of SBI’s life insurance subsidiary, reports CNBC-TV18 quoting sources.

It is learnt that SBI Life is likely to file draft red herring prospectus (DRHP) with capital market regulator SEBI in coming weeks.

The life insurance subsidiary of the country’s largest bank will approach the insurance regulator again for final nod after SEBI approval.

SBI Life is expected to raise Rs 7,400-8,500 crore through IPO, which valued it at Rs 65,000-70,000 crore, sources said.

If it lists on the bourses, then it would be the second direct listing of an insurance company. So far ICICI Prudential Life Insurance (which started trading in September last year) is the only insurance company listed on exchanges.

11:00 am Market Outlook: Sunil Singhania, CIO-Equity, Investment at Reliance Mutual Fund feels this is a good time for the mutual fund industry. Growth in mutual fund industry will be healthy & robust, he believes.

Investors have started diversifying to financial assets from physical assets, he said.

Majority of analysts feel the markets are currently highly valued, especially after a 18 percent rally since the beginning of 2017. Earnings have to recover and economic growth has to be over 7 percent in current financial year (given expectations of normal monsoon) to match current market valuations, according to them.

According to Singhania, the markets are never fairly valued, whether it’s undervalued or mildly overvalued.

“We have had corrections in recent past but it hasn’t been that long. Inflows from retail investors in mutual fund will continue despite market correction,” he said.

He is seeing euphoria in some sectors of the market.

He likes PSU banks having adequate capital & better placed to raise capital. Insolvency & Bankruptcy Code can be a near-term pain but a good initiative to resolve non-performing assets (NPAs), he feels.

10:45 am Earnings: Infosys is scheduled to report its results for the quarter ended June on July 14, Friday, the IT major said in a statement on Thursday.

A meeting of the Board of Directors of the Company will be held at the Registered Office on July 13 and 14, 2017 to consider audited consolidated financial results of the Company and its subsidiaries as per Indian Accounting Standards (lndAS) for the quarter ending June 30, 2017.

The board will also consider audited standalone financial results of the Company as per lndAS for the quarter ‘ending June 30, 2017. The financial results of the IT major will be approved by the board on July 14.

Infosys shares underperformed benchmark indices by a wide margin. The IT major slipped a little over 6 percent in the last 6 months and nearly 20 percent in the last one year.

10.24 am Market Check: Equity benchmarks continued to trade lower in morning trade, weighed by banking & financials and auto stocks.

The 30-share BSE Sensex was down 52.98 points at 31,316.36 and the 50-share NSE Nifty fell 22.40 points to 9,652.15.

HDFC, ITC, ICICI Bank, Infosys, Tata Motors, Asian Paints, Axis Bank and Maruti Suzuki were top contributors to Sensex’ losses.

Lupin was biggest gainer, up 4.5 percent followed by Dr Reddy’s Labs with 2 percent upside.

10:05 am Buzzing: Glenmark Pharma share price rose nearly 2 percent intraday on approval from the US health regulator for antihypertensive drug.

“Glenmark Pharmaceuticals Inc, USA has been granted final approval by the United States Food & Drug Administration (US FDA) for Amlodipine and Olmesartan Medoxomil tablets, 5 mg/20 mg, 5 mg/40 mg, 10 mg/20 mg, and 10 mg/40 mg,” the pharma company said in its filing.

Amlodipine and Olmesartan Medoxomil is the generic version of Azor Tablets of Daiichi Sankyo Inc.

Amlodipine and Olmesartan is a combination drug used to treat high blood pressure.

9:46 am Listing: After stellar response to the issue, AU Small Finance Bank is all set to make a debut on exchanges on July 10. The issue price is fixed at higher end of price band of Rs 355-358.

Experts feel the stock price is expected to open over Rs 400, given the overwhelming response to the public issue and indication from the grey market premium that is around Rs 75-80.

The initial public offer of AU Small Finance Bank, which was opened during June 28-30, was oversubscribed 53.60 times on strong response from QIBs and HNIs.

The portion set aside for qualified institutional buyers was oversubscribed 78.77 times and non-institutional investors 143.51 times while the reserved portion of retail investors oversubscribed 3.31 times.

AU Small Finance Bank raised Rs 1,912 crore through the issue, including Rs 563 crore from 34 anchor investors.

The public issue was an offer for sale by promoters and investors.

9:28 am GST impact: Neelkanth Mishra of Credit Suisse said GST introduced uncertainty on several fiscal fronts. Taxes subsumed under GST were to contribute nearly Rs 10.6 lakh crore in FY18 (36 percent of India’s total taxes), he added.

With some assumptions, he estimates centre-state split at 45-55.

Even adjusted for the compensation pool, a 50-50 CGST-SGST split may distort tax sharing, according to him.

As compensation payments will be made to the states every two months and on a fixed growth assumption, most of the volatility, if any, would be faced by the centre, he feels.

General government spending, yields and spreads could thus see some volatility, according to Mishra.

Also read – Buy, Sell, Hold: 3 stocks and 2 sectors are being tracked by analysts today

9:15 am Market Check: Equity benchmarks started off last day of the week on a negative note, dragged by profit booking and weak global cues.

The 30-share BSE Sensex was down 39.24 points at 31,330.10 and the 50-share NSE Nifty fell 17.25 points to 9,657.30. About 602 shares advanced against 479 declining shares on the BSE.

Tata Steel, Tata Motors, Wipro, ICICI Bank, HDFC Bank, IndusInd Bank and Infosys were under pressure while Lupin gained over a percent in early trade followed by Bharti Airtel, Cipla and Eicher Motors.

Tata Teleservices gained 5 percent. JBM Auto was up on entering into electric bus segment.

MEP Infra, Balaji Amines, Prakash Industries, Speciality Restaurants, IDFC, IDFC Bank, Shriram City Union and InterGlobe Aviation were midcap gainers while RBL Bank, Bhushan Steel and Jaypee Infra were losers.

GM Breweries fell 3 percent on weak earnings in Q1.
Stocks in Asia were softer following the weaker close stateside and as global bond yields rose overnight. The Nikkei 225 declined 0.14 percent and the Kospi was off 0.23 percent.