Sensex, Nifty Gain But Post Weekly Losses As Investors Mull Waning Stimulus; Bajaj Auto Tops

Closing Bell

Indian shares closed little changed on Friday, but lower for the week, as investors parsed a flurry corporate earnings amid speculation major central banks are moving closer to reining in stimulus.

The S&P BSE Sensex was unchanged at 27,933 while the NSE Nifty gained 0.2 percent to 8,636. However, both the indices closed around 0.5 percent lower for the week. The market breadth, however, remained encouraging throughout the day, ending with 973 stocks advancing, 639 declining and 273 remaining unchanged.

Metals have undoubtedly been the star of Samvat 2072. While the Sensex has gained 7.9 percent since last Diwali, the S&P BSE Metal Index has shot up 43.4 percent.

Colgate Palmolive Rises After Q2 Beats Estimates

Shares of the toothpaste and soap maker jumped as much as 6 percent to Rs 992 after reporting second quarter earnings.

The FMCG firm posted a net income of Rs 181 crore for quarter-ended September, against Rs 166 crore estimated by analysts in a Bloomberg poll. It clocked net sales of Rs 1,200 crore for the three-month period against an estimate of Rs 1,130 crore.

The total costs from to Rs 960 crore versus Rs 870 in the year ago period. Its product sales rose 4 percent.

Also Read: NTPC’s Profit Falls Despite Improved Operating Performance

Eicher Motors Falls Despite Q2 Net Jumps

Shares of the auto maker slumped 3.3 percent to Rs 23,676 despite reporting a 35.5 percent jump in revenues in the July-September quarter to Rs 1,989 crore, according to the company’s filing on the Bombay Stock Exchange. This was higher than the Bloomberg consensus estimate of Rs 1,777 crore.

Net profit rose 54.1 percent to Rs 396 crore compared to Rs 257 crore during the corresponding quarter last year. The figure was slightly below analyst estimates of Rs 418 crore.

Also Read: Vedanta Reports Highest Profit In Last Seven Quarters

Bajaj Auto Q2 Meets Street Estimates; Stock Maintains Earlier Gains

Shares of the two-wheeler maker rose as much as 2.1 percent, but soon gave up some of its gains, after meeting street expectations with its second quarter earnings.

The Pune-based auto maker made a profit Rs 1,123 crore for quarter-ended September, which is 6.7 percent higher than what it made during the same period last year. It clocked sales of Rs 6,432 crore for the three-month period, which were inline with its September quarter sales of last year.

A Bloomberg consensus of analysts’ estimates had pegged the profit to come in at Rs 1,026 crore and sales at Rs 6,109 crore.

While the profit and sales figures were a hit, the automaker missed the mark slightly on the margin front. The EBITDA margins for the quarter stood at 20.1 percent against a Bloomberg poll estimate of 20.5 percent.

More detailed copy HERE

UPL Drops After Q2 Profit Misses Street Estimates

Shares of the agro-chemicals maker dropped as much as 2.3 percent to Rs 690 after its second quarter earnings missed street expectations.

The firm made a net profit of Rs 166 crore for quarter-ended September, against Rs 287 crore mean of analysts’ estimates compiled by Bloomberg. However, its sales at Rs 3,660 crore for the three-month period, were much higher than the estimated figure of Rs 3,290 crore.

Battered Shares Amid Tata Turmoil Seen as Buying Opportunity

The turmoil that knocked Tata Group’s key Indian units from multi-year highs is being seen by some investors as a chance to snap up shares.

Tata Group companies have lost at least $3.3 billion in market value since Monday when Chairman Cyrus Mistry was abruptly replaced by his predecessor Ratan Tata.

“The fall in Indian Hotels and Tata Steel shares is overdone and we are buying this fall,” Chakri Lokapriya, Mumbai-based managing director at TCG Advisory Services, which manages about $3 billion, told Bloomberg by phone. “The outlook for the stocks continues to remain what it was before the whole saga broke out.”

Read the full report HERE

Earnings to Watch

• Bajaj Auto rose 0.9 percent to Rs 2,785; Q2 net profit estimated at Rs 1020 crore
• Colgate-Palmolive rose 0.4 percent to Rs 939; Q2 net profit estimated at Rs 166 crore
• Eicher Motors rose 0.3 percent to Rs 24,558; Q3 net profit estimated at Rs 416 crore
• NTPC rose 0.5 percent to Rs 152; Q2 net profit estimated at Rs 2,300 crore
• Vedanta rose 1.8 percent to Rs 203; Q2 net profit estimated at Rs 962 crore

Opening Bell

Indian shares declined reflecting weak Asian markets as investors parsed a slew of corporate results amid speculation that major central banks are moving closer to reining in stimulus.

The S&P BSE Sensex fell 0.3 percent to 27,821 while the NSE Nifty lost 0.3 percent to 8,592. The market breadth, however, was encouraging at 928 advances, 511 declines and 425 stocks remaining unchanged.

Movers & Shakers: Tata Group Stocks, Bajaj Auto, Eicher Motors, JSW Steel And More

Money Markets Heads Up

Earnings Impact to Watch

• Bajaj Finserv: Q2 net Rs 576 crore, estimate Rs 412 crore
• Castrol India: Q3 net Rs 140 crore, estimate Rs 166 crore
• Dalmia Bharat Sugar: Q2 net Rs 48.33 crore versus Rs 5.13 crore loss
• Glenmark: Q2 net Rs 224 crore, estimate Rs 255 crore; to pursue GBR500 relicensing after return from Sanofi
• Inox Leisure: Q2 net Rs 1.59 crore versus Rs 21.29 crore
• Oil & Natural Gas Corp: Q2 net Rs 4,970 crore, estimate Rs 4,310 crore; to give one free share for two held
• Tech Mahindra: Q2 net Rs 645 crore; estimate Rs 700 crore
• VRL Logistics: Q2 net Rs 13.87 crore versus Rs 29.98 crore

Stocks to Watch

• Central Bank of India: To issue shares to LIC
• Dr. Reddy’s: India FIPB clears drug maker’s FDI proposal
• Indian Oil: Hopes to run Paradip refinery at full capacity in 2 months
• GMR Infra: Unit GMR Male International Airport Wins $270 million in Arbitration Against Maldives
• JSW Steel: Working to make to 2 iron ore mines operational by March
• Tata Motors: To decide on products as per long-term strategy
• Wipro: To help specialty restaurants to reduce costs
• Dabur India raised to add at ICICI Securities
• LIC Housing cut to hold at IDBI Capital Market
• Pi Industries raised to buy at Dolat Capital
• Hindustan Unilever raised to accumulate versus reduce at Dolat

For a complete list of stocks to watch, click HERE

IPO Watch

• Varun Beverages; offer closes Friday, October 28
• PNB Housing Finance IPO subscribed 29.53 times
• NHPC offer for share sale by government to remain open from November 4-11

Talking Points

• RBI holds sway over India currency market as traders gripe (Click HERE for the must-read)

• Patel pragmatism helps India bank default risk drop most in Asia
• India in global hunt for new LNG contracts to fire power plants
• India FIPB defers decision on Flag Telecom’s FDI proposal
• Global funds sell Rs 470 crore of local stocks; domestic funds buy Rs 860 crore: Provisional data
• India cabinet said to approve NITI Aayog PSU divest plan (BTVI)

The Mistry-Tata Boardroom Tussle

• Tata said to tap sovereign funds on buying out ousted chairman

• Tata ousted Mistry on trust deficit with biggest shareholder
• Tata Group said to shortlist candidates to become next chairman
• India not keen on intervening in Tata issue now: Finmin official
• Regulator said to probe alleged governance lapses at Tata Group
• Tata Motors weighs assembling cars in Indonesia: Investor Daily

Good Morning!

The Nifty Futures on the Singapore Exchange, an early indicator of Nifty’s performance in India, declined 0.5 percent to 8,606.

A selloff in sovereign bonds extended into Asian trading this morning amid speculation major central banks are moving closer to reining in stimulus. Bucking the trend, Japanese stocks rallied as the yen traded near its weakest level since July.

On Friday, U.S. stocks closed lower as a selloff in government bonds hit yield-sensitive sectors such as real estate and utilities.

Demand for long-lasting manufactured products in the U.S fell 0.1 percent in the month of September, according to durable goods data released by the Commerce Department.

U.S. gross domestic product data due later today is forecast to show the economy probably expanded at around a 2.5 percent annualized pace in the third quarter, after a sluggish first half.

Odds for a U.S. Federal Reserve rate hike by December remained unchanged at 73 percent, after gaining five percentage points this week, according to futures rates tracked by Bloomberg.