Shares Markets Live: Sensex, Nifty Recover Led By IT Stocks; BPCL Jumps To 52-Week High

Shares of the oil marketing company gained as much as 3.3% to Rs 488, a new 52-week high, on the back of its fourth-quarter earnings. The stock pared some of its gains thereafter. [Read the full earnings report here]

J.P.Morgan’s Take

• Large one-time dividend per share of Rs 58 is the main highlight of a strong quarter
• Similar to IOCL and HPCL, BPCL has reported a large beat driven by large inventory gains and exceptional gains
• JPM’s price target of Rs 550 views BPCL’s treasury shares as quasi cash to be retained in the company
• “On spot regional diesel and gasoline prices, we estimate implied gross marketing margins in diesel have normalized, though we likely need to see another 1-2% increase in retail gasoline prices for normalized margins”
• With a tentative recovery in refining margins and normalization of marketing margins, the relative outperformance of India's oil marketing companies versus the benchmark should continue.
• JPM sees progress on Petronet LNG and Indraprastha Gas Ltd privatisation as the key driver in BPCL’s stock price.

Shares of the innerwear and outerwear clothing manufacturer gained as much as 10.8% after a 1.9% (or 1.5 million shares) of equity changed hands in a single large trade.

• Buyers and sellers were not immediately known.
• The shares are up 13% in the past 5 days and rose 21% in the past 30 days.
• The relative strength index on the stock was above 70, indicating it may be overbought.
• Rupa & Co trades at 20 times its estimated earnings per share for the coming year.
• Earnings release scheduled on May 31

Indian equity benchmarks swung between gains and losses, with a key index hovering near a record high, ahead of the expiry of May monthly derivative contracts later today.

The S&P BSE Sensex was little changed at 51,003.73. The NSE Nifty 50 Index was steady at 15,303.30, about 30-odd points away from surpassing its highest ever close reached in February. Ten of the 19 sector indexes compiled by BSE Ltd. fell, led by a gauge of finance firms’ stocks. Investors roll over positions ahead of the expiry of derivatives contracts on the last Thursday of every month.

“Likely announcements of phased withdrawals of state-level lockdowns in coming weeks and a recovery in economic activities can potentially aid the market to a sustained rally in the near to medium term,” said Binod Modi, head of strategy at Reliance Securities Ltd.

Indian bonds may decline on concern the government may need to borrow more than initially planned to compensate state governments for their revenue losses due to a shortfall in the goods-and-services tax.

• 10-year yields were little changed at 5.97% on Tuesday; bonds and FX markets were shut Wednesday for a holiday
• The additional borrowing requirement is estimated at Rs 158 lakh crore ($21.7 billion) in the fiscal year started April 1, according to people familiar with the matter; India’s total gross borrowing for FY22 is estimated at 12t rupees
• India’s dollar bonds have rallied to become the best performers in major Asian credit markets this month after lagging in April, as new Covid-19 cases in the pandemic-battered country drop by about half from a peak
• USD/INR fell 0.3% to 72.7775 on Tuesday
  • Implied opening from forwards suggest spot may start trading around 72.64

Good morning!

Asian stocks were mixed and U.S. futures dipped Thursday as investors weigh the economic reopening from the pandemic and the possibility of a reduction in stimulus. The dollar held a climb and Treasury yields were stable.

Equities fell in Japan and Hong Kong. Chinese stocks reversed earlier losses after the U.S. and China held the first trade talks since the election of President Joe Biden and acknowledged the importance of the bilateral trade relationship.

Australian shares shrugged off the imposition of a virus lockdown in the second most populous state. Contracts on the S&P 500 and Nasdaq 100 declined. India’s SGX Nifty 50 Index futures for May delivery, expiring today, rose 0.2% to 15,323.50, while MSCI Asia Pacific Index fell 0.4%. The NSE Nifty 50 Index added 0.6% Wednesday to 15,301.45.

Oil dipped below $66 a barrel amid some weakness in commodity markets. The dollar rose, possibly in part on short-covering as investors rebalance their portfolios ahead of month-end. Bitcoin retreated back below $40,000.

Back home, BPCL, Cummins India, Karnataka Bank, Pfizer India, Burger King may react as the companies reported quarterly results after the market closed Wednesday. Sun Pharma, Eicher Motors, Cadila, Page, Redington, Metropolis are among the companies scheduled to report earnings Thursday.