Market Live: Sensex, Nifty up nearly 1%; July WPI inflation doubles to 1.88% MoM

1:15 pm Market Check: Equity benchmarks remained strong in afternoon trade, with the Sensex rising 252.21 points or 0.81 percent to 31,465.80, backed by banking & financials, metals and auto stocks.

The 50-share NSE Nifty rose 87.30 points or 0.90 percent to 9,798.10 while the broader markets gained 2 percent.

About three shares advanced for every share falling on the BSE.

Equity markets will remain shut on August 15 for Independence Day holiday.

1:08 pm Merger: Reliance Communications surged 16 percent after National Company Law Tribunal has passed order, allowing Aircel-Reliance Communications merger and Brookfield tower sale.

NCLT order overruled objections of Bharti Infratel, GTL and Ericsson.

12:59 pm IPO: Reliance Capital has filed draft red herring prospectus (DRHP) with insurance regulator IRDA for its general insurance business IPO, reports CNBC-TV18 quoting unnamed sources.

IRDA may grant in-principle nod to Reliance General Insurance by August-end and the insurance company is looking to raise Rs 1,500-2,000 crore through IPO, sources said.

Reliance General Insurance, the wholly-owned subsidiary of Reliance Capital, is looking to dilute up to 25 percent through this public offer.

The insurance company is targeted to file DRHP with market regulator SEBI by September and to launch IPO by October-November 2017.

12:45 pm Earnings: Dredging Corporation shares rallied 5 percent after strong operational numbers in June quarter.

Net profit of the company fell by 2.5 percent year-on-year to Rs 3.9 crore but revenue grew by 10.8 percent to Rs 157.9 crore in the quarter ended June 2017.

Operating profit jumped 26.7 percent to Rs 37.3 crore and margin expanded 290 basis points to 23.6 percent compared with same quarter last year.

12:35 pm Europe trade: European stocks opened higher after senior US officials sought to play down risks of a military conflict with North Korea.

The pan-European Stoxx 600 moved up 0.4 percent shortly after the opening bell with almost all sectors and major bourses in positive territory.

12:20 pm Earnings Estimates: Grasim Industries’ first quarter standalone profit is seen rising 0.6 percent year-on-year to Rs 323 crore and revenue may increase 9.7 percent to Rs 2,662 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit is likely to jump 18.3 percent to Rs 518 crore and margin may expand 140 basis points to 19.5 percent compared with same quarter last year.

Viscose staple fibre (VSF) and chemical business continue to operate at near-capacity utilisation. Analysts expect VSF realisations and volumes to come in higher.

On a sequential basis, VSF prices have corrected but on a YoY basis, VSF prices will be higher, analysts feel.

Margins could see some pressure due to costs associated with shutdown of the Harihar plant on water shortage and maintenance related shutdowns.

12:05 pm WPI inflation: Wholesale price index inflation doubled to 1.88 percent in July, from 0.9 percent in previous month due to rising food prices.

Food inflation jumped to 2.12 percent in month gone by, from -1.25 percent in June and food articles inflation increased to 2.15 percent from -3.47 percent on month-on-month basis.

WPI inflation has been revised to 2.26 percent in May from 2.17 percent earlier.

11:56 am Market Check: Equity benchmarks as well as broader markets extended rally in late morning trade, with the Nifty reclaiming 9,800 level on support from Reliance Industries and private banks.

The 30-share BSE Sensex was up 271.36 points or 0.87 percent at 31,484.95 and the 50-share NSE Nifty gained 90.30 points or 0.93 percent at 9,801.10.

The BSE Midcap and Smallcap indices rallied 2 percent each as about 1,759 shares advanced against 531 declining shares on the exchange.

11:25 am Inflation estimates: India’s consumer inflation is expected to have picked up in July after easing for three straight months, with food prices back on the rise, but is expected to remain well below the central bank’s target.

The consumer price index, the main policy target of the Reserve Bank of India (RBI), likely rose 1.87 percent in July from a year earlier, according to a Reuters poll of economists, compared with an increase of 1.54 percent in June.

The wholesale price index likely rose 1.3 percent in July, after four months of easing. In June, WPI rose 0.9 percent.

The wholesale price data will be released around 0630 GMT on Monday, followed by consumer prices around 1200 GMT.

Bountiful monsoon rains this year are expected to lead to another bumper harvest, further dampening food prices, which contribute near 50 percent of the consumer price index.

Retail food prices had contracted for two months through June from a year earlier.

11:05 am Market Check: Broader markets continued to outperform benchmarks in morning, with the BSE Midcap as well as Smallcap rising 2 percent each, led by short covering in most beaten down stocks.

The 30-share BSE Sensex was up 0.81 percent or 253.24 points at 31,466.83 and the 50-share NSE Nifty rose 0.83 percent or 80.25 points to 9,791.05.

About four shares advanced for every share falling on the BSE.

Hindustan Zinc, Bajaj Finserv, UPL, Britannia Industries, Indiabulls Housing Finance and Indraprastha Gas rallied up to 7 percent. NBCC surged 6 percent ahead of earnings today.

10:40 am Buzzing: Shares of Vinati Organics rose more than 5 percent intraday as the company has approved the buyback of its shares.

The company at its meeting held on August 11 has approved a buyback proposal for purchase of up to 2,00,000 equity shares of Rs 2 each (0.39 percent), from all the shareholders of the company on a proportionate basis through the tender offer route at a price of Rs 1200 per equity share, aggregating to approximately Rs 24,00,00,000.

The company’s Q1 net profit was down 12.8 percent at Rs 31.1 crore versus Rs 35.7 crore, in a year ago period.

Revenue of the company was up 13.6 percent at Rs 196.9 crore versus Rs 173.3 crore.

10:20 am DLF in focus: Realty major DLF’s promoters are likely to enter into an agreement this month with Singapore’s sovereign wealth fund GIC to sell their 40 percent stake in the rental arm in a deal estimated at around Rs 13,000 crore.

In October 2015, DLF had announced that its promoters would sell their entire stake in the DLF Cyber City Developers Ltd (DCCDL), which holds the bulk of the commercial assets of the group.

The promoters had in March this year entered into an exclusivity pact with GIC to negotiate on this transaction. According to market sources, both the parties are likely to sign definitive agreement by end of this month. Sources had earlier said the deal is likely to be valued at around Rs 12,000-13,000 crore.

The promoters would infuse a large portion of proceeds from this proposed deal into DLF, which in turn would use this amount to cut its net debt that has reached nearly Rs 26,000 crore.

10:05 am Buzzing: PSU banking major State Bank of India extended losses in morning, falling over 1 percent as brokerage houses slashed target price after disappointing earnings and bad asset quality performance in April-June quarter.

“SBI surprised negatively on asset quality in Q1 while loan growth was much weaker than expected. We expect return on equity to remain muted for the rest of FY18 in line with other corporate banks, turning the corner only in FY19,” Jefferies said while retaining buy rating on the stock but lower target price to Rs 325 (from Rs 355 earlier).

The research house has cut its earnings estimates sharply on lower growth expectations, resulting in weaker growth in NII and fee income and consequently higher expense ratio.

For the merged bank, it has increased credit cost assumption in FY18. The weakness is somewhat moderated owing to the savings rate cut announced by the bank resulting in marginal net interest margin expansion, Jefferies said while estimating FY17-20 adjusted book value CAGR of 19 percent (consolidated basis) and 18 percent (standalone).

However, in view of elevated provisioning pressure, Motilal Oswal also cut its FY18 earnings estimates by 37 percent and recommended buy rating with reduced target price at Rs 341 (from Rs 375 earlier).

According to the research house, the larger part of asset quality clean-up is behind.

CLSA also reduced its target price to Rs 350 from Rs 360 following cut in earnings estimates but it has maintained buy rating, saying asset quality disappointed but better than PSU banks and the key disappointment was high non-performing loans reflecting stress in corporate, retail & agri loans.

9:53 am Market Check: Benchmark indices remained strong in morning trade as the Sensex was up 219.35 points at 31,432.94 and the Nifty rose 70.95 points to 9,781.75.

More than four shares advanced for every share falling on the BSE.

9:38 am Market Outlook: Aditya Narain of Edelweiss said the research house sees the market at 11,100 in June 2018.

“Our preferred themes would be the savings shift, consumer discretionary step-up, lower rates and India build / process capex,” he said, adding overweights are banks & financials, consumer discretionary/durables, cement & construction.

9:25 am Buzzing: Shares of Suzlon Energy added 10 percent intraday as the company turned profitable in the quarter ended June 2017.

The company has reported net profit of Rs 63.7 crore in the quarter ended June 2017 (Q1FY18) against the loss of Rs 257 crore, in the same quarter last fiscal.

Revenue of the company increased 62.5 percent at Rs 2,676 crore versus Rs 1,646 crore.

The board also approved the issuance of redeemable non-convertible debentures (NCDs) to the extent of Rs 900 crore on private placement basis in one or more tranches for replacement of existing debt subject to approval of shareholder in the ensuing annual general meeting of the company.

The company’s 2nd AGM will be held on September 22, 2017.

9:15 am Market Check: Equity benchmarks rebounded in opening on Monday after losing 3.5 percent in previous week, backed by short covering in most beaten stocks.

The 30-share BSE Sensex was up 182.89 points at 31,396.48 and the 50-share NSE Nifty gained 58.15 points at 9,768.95.

Dr Reddy’s Labs, Sun Pharma, Bank of Baroda, BPCL, Infosys and Bharti Airtel were only losers among Nifty stocks.

Nifty Midcap was up 1.5 percent on strong market breadth. About five shares advanced for every share falling on the NSE.

Suzlon Energy, CESC, BEML, Adani Ports, DLF, Sun TV, CG Power, JP Associates, GVK Power, GMR Infra, Techno Electric, Voltamp Transformers and Mercator surged up to 7 percent.

Parsvnath Developers (down 10 percent) and Signet Industries (down 20 percent) fell after SAT stayed SEBI order.
REC, HDIL, Jamna Auto and Chennai Petroleum were down nearly 5 percent.