KEY HIGHLIGHTS
Closing Bell: No Stopping The Gains
Indian equity markets extended their gains to the seventh session, turning into their best winning streak in nearly a year.
The S&P BSE Sensex ended 0.8% higher at 40,509 while the NSE Nifty 50 ended at 11,914, with gains of 0.7%. The seven day winning run for the benchmark indices is the longest since November 2019.
The Sensex and Nifty are now 2% away from turning positive for the calender year. Both have gained in nine out of the last 10 trading sessions. During this period, the Nifty has gained over 1,100 points while the Sensex has gained over 3,000 points.
This was also the best weekly performance by the Sensex and Nifty in four months. Both ended with gains of over 4% for the week.
The top gainer on the Nifty today was Wipro, which ended 4.4% higher at another record high.
Among the sectoral indices, it was the banking stocks that outperformed in today's session. The Nifty Bank ended 2.8% higher, courtesy gains seen in ICICI Bank (up 4%), Axis Bank (up 3.8%), SBI (up 3.7%) and HDFC Bank (up 3.6%). The four banking stocks were among the top five gainers on the Nifty 50.
The PSU Bank index too saw a surge in the second half, ending as the day's best performer with gains of 3.1%.
Most other sectoral indices ended with losses in today's session. The Nifty Realty was the top laggard, ending 1.6% lower, along with the Nifty Pharma, which declined 1.3%.
Broader markets remained subdued, underperforming the benchmarks yet again. The midcap index ended 0.3% lower while the smallcap index declined 0.2%.
India Volatility Index ended unchanged today at 20.38.
875 stocks on the NSE ended with gains while 966 stocks declined.
How Did The Markets Fare This Week
Dubai-based Firm Forays Into India
Dubai-based Averda is making an entry into India for managing municipal and farm waste in the city of Amritsar to offer a solution to the deadly smog caused by stubble burning.
The waste management solution provider is the latest among companies that are attempting to cut the practice of farm fires, Bloomberg News reports.
The burning of crop residues is seen as a major contributor to the smog that shrouds most of north India during the winter months, raising risk of heart and lung diseases. The practice still continues even if the government has made it illegal.
Buzzing Stock: United Breweries
- Top gainer on the Nifty FMCG index
- Gains as much as 4.5% to Rs 1,004.5
- Biggest single-day gain in a month
- Trading at the highest level in three weeks.
- Up for the second straight day
- Set for second straight weekly advance
- Today's volumes are double its 20-day average
- One-month implied volatility at 32%
- Nearing 100-Day Moving Average at 1,002 and 50-Day Moving Average at 1,006
- Relative Strength Index (RSI) of the stock at 50
- Trading 29% below its 52-week high of Rs 1,400 on October 27, 2019
- 10 out of the 13 analysts tracking the stock have a buy recommendation; 3 sell calls
- Return potential of the stock as per Bloomberg data is 7.6%
Stock Reaction: Salasar Techno Engineering
The company has informed the exchanges that it has emerged as the L1 bidder for three tenders received from Prasar Bharti, East Zone.
The orders pertain to design, supply, erection, testing and commissioning of 100M self-supporting lattice steel tower.
The contract is d at Rs 6.7 crore, the company said in a statement to the exchanges.
The company has also received orders worth about $1 million for supply of telecom towers to Burkina Faso and Nigeria. These orders are won under the Tower Supply Agreement signed with the American Tower Corporation, Africa.
Shares recovered from the day's low to gain as much as 1.2% to Rs 211, post the announcement.
FMCG Index Among Underperformers
Buzzing Stock: IRCON Internatioal
- Worst performing stock on the Nifty Smallcap index
- Declines as much as 4% to Rs 74.6
- Biggest single-day fall in three weeks
- Trading at the lowest level in over six months
- Down for the third straight day
- Has declined over 6% in the last three trading sessios
- Today's volumes are 44% higher than its 20-day average
- Trading below all of its Key Moving Averages
- Stock in oversold territory with Relative Strength Index (RSI) at 29
- Has declined over 37.5% from its 52-week high of Rs 119.8 on February 19, 2020
Active Stock Options
- ICICI Bank's 400 Call: Premium up 90.7% to Rs 16.4. The contract has added 5.33 lakh shares in Open Interest.
- Larsen & Toubro's 900 Call: Premium up 68.8% to Rs 36.3. The contract has shed 4.1 lakh shares in Open Interest.
- HDFC's 2,100 Call: Premium up 67% to Rs 25. The contract has added 1.1 lakh shares in Open Interest.
Buzzing Stock: Bandhan Bank
- Gaining for the sixth straight day
- Gains as much as 3.5% to Rs 330
- Currently trading off the day's high with gains of 1.7%
- Trading at the highest level in two months
- Longest winning streak since April 2019
- Today's volumes are 88% higher than its 20-day average
- One-month implied volatility is 49%
- Trading near 200-Day Moving Average Resistance of 325.8
- Relative Strength Index (RSI) of the stock at 64
- Still trades 50% below its 52-week high of Rs 650 on October 29, 2019
- 12 out of the 20 analysts tracking the stock have a buy recommendation; 4 sell calls
- Return potential of the stock as per Bloomberg data is 15.1%
Stock Reaction: Zen Technologies
The company informed the exchanges that it has won an order from a government customer, for an annual maintenance contract for an approximate of Rs 40 crore. The contract is for a period of five years, the company said in an exchange filing.
It has also received an export order for the supply of its simulators to an army in West Africa. The contract is d at $1.4 million and has been partially executed.
The statement further stated that the company received an order for supply of the company's simulators to a Middle East country for about $7 lakh. The order is expected to be executed during the third quarter of FY21.
Both export orders aggregate to Rs 15.5 crore, the company said.
Shares gained as much as 3.6% to Rs 84.2, post the announcement. The stock is up for the second straight day.
Markets At 2 P.M.
- Benchmark indices set to post second straight weekly advance
- Nifty up 0.4% at 11,886
- Sensex up 0.5% at 40,401
- Nifty Bank up 1.9% at 23,637
- Nifty Midcap index down 0.2%
- Nifty Smallcap index down 0.3%
- India Volatility Index up 0.5% to 20.48
- Nifty Pharma and Nifty Realty are the top sectoral laggards; down 1.1% each
- Nifty FMCG and Nifty Media down 0.8% each
- Nifty PSU bank is the only other sectoral gainer; up 1.2%
- Larsen & Toubro remains the top Nifty gainer; up 3.3%
- Grasim extends losses as the top Nifty laggard; down 3.3%
- 853 stocks on the NSE are trading with gains while 951 stocks decline
Pharma Index Among Top Laggards
Buzzing Stock: Tata Consumer Products
- Worst performing stock on the BSE Midcap index
- Declines as much as 3.2% to Rs 472.8
- Trading at the lowest level in over two months
- Down for the third straight day
- Has declined 7% over the last three trading sessions
- Today's volumes are 92% higher than the 20-day average
- One-month implied volatility at 44%
- Heading towards 100-Day Moving Average of 456.9 on the downside
- Relative Strength Index (RSI) of the stock at 34; heading towards oversold territory
- Has declined 20% from its 52-week high of Rs 591.7 on September 3, 2020
- 13 out of the 14 analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 8.1%
F&O Snapshot: Active Options Contracts
- Nifty October futures add 7.2% and 8 lakh shares in Open Interest.
- Nifty Bank October futures add 31% and 4.6 lakh shares in Open Interest.
Nifty: October 15 Expiry
- 11,900 Call: Premium up 28.7% to Rs 113.6. The contract has added 9.5 lakh shares in Open Interest.
- 12,000 Call: Premium up 27.7% to Rs 66.2. The contract has added 8.2 lakh shares in Open Interest.
- 11,800 Put: Premium down 31% to Rs 75.4. The contract has added 15.5 lakh shares in Open Interest.
Nifty Bank: October 15 Expiry
- 24,000 Call: Premium up 112.3% to Rs 249.5. The contract has added 4.9 lakh shares in Open Interest.
- 23,000 Put: Premium down 49% to Rs 166.9. The contract has added 8.5 lakh shares in Open Interest.
- 23,500 Call: Premium up 92% to Rs 501.2. The contract has added 87,375 shares in Open Interest.
Buzzing Stock: Swaraj Engines
- Among top performing stocks on the Nifty 500 index
- Gains as much as 4.4% to Rs 1,482
- Biggest single-day gain in two months
- Snaps two-day losing streak
- Today's volumes are 48% higher than its 20-day average
- Breaks above 100-Day Moving Average at 1,439
- Relative Strength Index (RSI) of the stock at 1,439
- Trades 13% below its 52-week high of Rs 1,700 on September 8, 2020
- Two out of the five analysts tracking the stock have a buy recommendation; 1 sell call
- Return potential of the stock as per Bloomberg data is 3.8%
European Markets Open Higher
Benchmark indices in Europe are adding to their October gains as negotiators return in the U.S. for stimulus talks.
The Stoxx 600 has opened 0.4% higher with commodity sectors like mining and energy leading the advances. Chemical stocks are underperforming.
Asian markets have ended flat while futures on the Dow Jones are trading higher by 100 points.
Brent crude is trading unchanged at $43.34 per barrel while Gold is up 0.8% at $1,908/Oz.
Here's a look at how European Markets are trading:
- Euro Stoxx 50 up 0.2% at 3,263
- DAX up 0.2% at 13,071
- CAC up 0.4% at 4,931
- FTSE 100 up 0.4% at 6,002
- IBEX 35 up 0.1% at 7,000
How Are The Sectoral Indices Faring
Stock Reaction: Housing Finance Companies
The Reserve Bank of India has eased risk weights on individual home loans, in a move to provide a boost to the Real Estate sector.
All individual housing loans, according to the statement of developmental and regulatory measures, shall attract a risk weight of 35%, if their loan-to- ratio is at 80% or lower.
In case of home loans, where the LTV ratio is higher than 80% but less than or equal to 90%, the risk weights will be higher at 50%.
This benefit will be available for new housing loans only till March 2022.
Stock Reaction:
- HDFC: Shares gained as much as 4.1% to Rs 2,029. The stock has cooled off since then, trading with gains of 1.7% at Rs 1,982. The stock is up for the fourth straight day.
- LIC Housing Finance: Shares gained as much as 10.7% to Rs 317.6.
- Can Fin Homes: Shares gained as much as 8.7% to Rs 478.7. The stock is up for the sixth straight day.
- Repco Home Finance: Shares gained much as 9.7% to Rs 218.4.
- Most of these stocks are trading at their highest level since March this year.
Most PSU Bank Index Stocks Trade With Gains
Earnings Fineprint: Steel Strips Wheels Q2FY21
- Revenue up 12% to Rs 404.7 crore from Rs 362 crore
- Net profit up 82% to Rs 14 crore from Rs 7.7 crore
- Ebitda up 20% to Rs 49.8 crore from Rs 41.4 crore
- Ebitda Margin at 12.3% from 11.4%
- Cash and cash equivalents currently at Rs 24.7 crore from Rs 31.5 crore
- All numbers are compared on a year-on-year basis
Shares gained as much as 13% - the most since December 2016 to Rs 517.6 - the highest level in nearly seven months.
Markets At Noon
- Benchmark indices up for the seventh straight day
- Longest winning streak for Sensex, Nifty since November 2019
- Nifty up 0.7% to 11,914
- Sensex up 0.8% to 40,494
- Nifty Bank up 2% to 23,657
- Nifty Midcap index up 0.1%
- Nifty Smallcap index unchanged
- India Volatility Index up 1.5% to 20.67
- Nifty PSU Bank is the other major sectoral gainer after the Nifty Bank; up 1.2%
- Nifty FMCG is the top sectoral laggard; down 0.6%
- Other sectoral indices are trading flat
- HDFC and HDFC Bank are the top gainers on the Nifty; up 3.5% and 3.2% respectively
- Grasim is the top laggard on the Nifty; down 1.5%
- 920 stocks on the NSE are trading with gains while 827 are declining
Buzzing Stock: SH Kelkar & Company
- Among top performers on the BSE Smallcap index
- Gains as much as 9.3% to Rs 93.4
- Biggest single-day gain in two months
- Trades at the highest level in seven months
- Up for the second straight day
- Today's volumes are eight times higher than its 20-day average
- Sustaining above 200-Day moving Average of 83.3 after a breakout on Thursday
- Relative Strength Index (RSI) of the stock at 66
- Trading 38% below its 52-week high of Rs 148
- All six analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 17.4%
Q2 Production & Dispatch Update: NCL Industries
- Cement production up 65% to 6.14 lakh Million Tonnes
- Cement dispatches up 68% to 6.16 lakh Million Tonnes
- Cement board production down 65% to 6,431 Million Tonnes
- Cement board dispatches down 38% to 9,454 Million Tonnes
- RMC production and Sales down 3% to 47,595 CuM
- Hydro Power generation down 7% to 11.67 Million Units
- Numbers are compared on a year-on-year basis
Shares are off the day's low after falling as much as 2.7% to Rs 110.45. The stock has snapped a three-day gaining streak.
Stock Reaction: Vedanta
Today is the final day when shareholders of the company can tender their shares as part of the reverse book building process for delisting the stock from the bourses.
The company on Thursday said that certain brokers registered with the BSE are not allowing public shareholders to place their bids above the floor price.
Listing regulations suggest that public shareholders may submit their bid at any price - at or above the floor price.
As of closing on Thursday, close to 74 crore shares were tendered by the shareholders.
Shares fell as much as 5.5% to Rs 111.4 and are declining for the third straight day. The stock had declined 15% as on Thursday, over the last two trading sessions.
Jinesh Gopani's Market Outlook
Buzzing Stock: Birla Corp
- Among top performers on the Nifty Smallcap index
- Gains as much as 5.8% to Rs 655
- Biggest single-day gain in a month
- Has declined in five out of the last seven trading sessions
- Today's volumes are 26% below its 20-day average
- Breaks above 50-Day Moving Average at 629.6
- Relative Strength Index (RSI) of the stock at 49.1
- Trading 22% below its 52-week high of Rs 807 on February 1, 2020
- All 15 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 37.3%
Stock Reaction: GOCL Corporation
IDL Explosives Limited., the wholly-owned subsidiary of GOCL Corporation has won an order from Singareni Collieries Company.
The order, worth Rs 186.8 crore is to supply explosives and accessories over a period of two years, the company said in an exchange filing.
Singareni Collieries is a PSU of the state of Telangana. The cost of the project also involves an escalation clause, according to the company's statement.
Shares gained as much as 9.1% to Rs 196, post the announcement. The stock has snapped a two-day losing streak.
Nifty Bank Up 200 Points
Earnings Reaction: 5Paisa Capital
- Revenue up 2.2 times to Rs 52.4 crore
- Net profit of Rs 2.8 crore from net loss of Rs 3.5 crore
- Ebitda rises to Rs 11.6 crore
- Ebitda margin at 22.1% from 3.8%
- Buoyancy in capital market activity backed by strong customer acquisition fueled growth.
- Acquired 2.45 lakh customers during the quarter - the highest ever
- Income for the P2P lending business at Rs 0.3 crore with loss of Rs 1.6 crore
- Confident of P2P business scaling up significantly in the coming quarters
- Consolidated income for the quarter up 24% quarter-on-quarter
Shares gained as much as 8.7% - the most in nearly three months to Rs 381.9. The stock has gained in three out of the last five trading sessions.
Stock Reaction: Solar Industries
The company informed the exchanges that it has received an order worth Rs 447 crore from the government of Telangana.
The order pertains to the supply of bulk explosives and initiating systems, the company said in an exchange filing.
This is the second order won by the company in the space of one week. It had won a Rs 409 crore order last week for the supply of grenades.
Shares gained as much as 8.4% to Rs 1,160 - the highest level in over a month. The stock has snapped a three-day losing streak.
Stock Reaction: Tata Steel
The company has said that it has managed to achieve highest ever quarterly deliveries of 5.05 million tonnes in India.
Deliveries for Tata Steel Europe remained largely flat at 2.26 Million tonnes.
Production for the India unit stood at 4.59 million tonnes while that for the European business stood at 2.15 million tonnes.
"We continue to stay focused on aggressively managing costs and cashflows," the company said in an exchange filing.
Automotive and Special Product segment of the company saw deliveries rising by 10%, while that for Branded Products and Retail grew 5% as compared to last year.
The outperformance came from Industrial Products & Projects. Deliveries of this segment rose 13% compared to the previous year while added product deliveries within this segment rose 31%.
Shares gained as much as 3.6% to Rs 386.95, post the announcement and are up for the second straight day.
Markets At 10:10 A.M.
- Benchmark indices fluctuate between gains and losses
- Nifty up 0.23% at 11,861
- Sensex up 0.23% at 40,275
- Nifty Bank up 0.6% at 23,334
- Nifty Midcap and Smallcap index are unchanged
- India Volatility Index up 2.6% to 20.91
- Nifty Realty is the top sectoral laggard; down 1.2%
- Nifty Metal is the top sectoral gainer; up 0.8%
- Nifty FMCG and Nifty I.T. indices down 0.4% each
- Other sectoral indices are trading flat
- Larsen & Toubro is the top Nifty gainer; up 2.1%
- UPL is the top Nifty laggard; down 1.8%
- 862 stocks on the NSE are trading with gains while 790 are declining
Monetary Policy Updates
RBI Governor Says:
- Monetary Policy Committee voted to keep interest rates unchanged.
- To continue with accommodative stance of the MPC.
- Investment has remained in retrenchment while consumption and exports have started to improve.
- GDP growth may break out of contraction and change to positive by Q4FY21.
- Improvement in agriculture and allied activities would boost revival.
- RBI estimates real GDP contraction for FY21 at 9.5%.
- Assure market participants about market stability and liquidity availability
- Announcing an on-tap TLTRO with tenors of up to three years with a total amount of Rs 1 lakh crore at a floating rate linked to repo rate.
- To conduct OMO in SDLs as a special case this year.
- Should expel liquidity concerns regarding SDLs.
Stock Reaction: JSW Steel
The steelmaker managed to achieve crude steel production of 3.85 million tonnes in the second quarter of FY21, it said in a filing to the exchanges.
The company achieved average capacity utilisation in-line with pre-Covid levels. Utilisation levels for the quarter stood at 86% as compared to 85% during the same period last year. Levels during the first quarter of FY21 stood at 66%.
Production of Crude steel stood at 3.84 million tonnes - a growth of 30% as compared to the April-June Period.
Production of Flat Rolled Products (FRP) saw a growth of 5% year-on-year to 2.84 million tonnes while that of Long Rolled Products (LRP) declined 7% to 0.77 million tonnes.
Shares gained as much as 1.8% to Rs 298.35, post the announcement. The stock is up for the sixth straight day and trading at the highest level since May 2019.
Stock Reaction: JK Cement
The company informed the exchanges on Thursday that it has successfully commissioned a grey cement grinding capacity of 0.7 Million Tonnes, at its Balasinor plant in Gujarat.
With this, the company has successfully completed its Grey Cement Capacity expansion of 4.2 Million Tonnes Per Annum, the company said in an exchange filing.
It now has 2 MTPA grey cement capacity in Rajasthan, 1.5 MTPA in Uttar Pradesh and 0.7 MTPA in Gujarat.
Shares gained as much as 5.8% to an all-time high of Rs 1,680. The stock is up for the sixth straight day, its longest winning streak in three months.
Coronavirus India Updates
- Active cases fall below 9 lakh for the first time in a month
- 70,496 new cases reported over the last 24 hours
- Total confirmed cases now at 69,06,151
- Active cases at 8,93,592
- Patients cured / discharged / migrated at 59,06,069
- Death toll rises to 1,06,490
- 964 deaths reported in the last 24 hours
- 78,365 patients recovered over the last 24 hours
Stock Reaction: Lakshmi Vilas Bank
The private lender informed the exchanges on Thursday that it has received an indicative, non-binding offer from the Clix Group.
The bank on September 16 had stated that substantial portions of the due diligence process of the amalgamation between the two parties is completed.
A preliminary non-binding Letter of Intent (LoI) for investment in the bank was signed by Clix Capital in June this year.
Shares gained as much as 16.3% to Rs 20.7, post the announcement. The stock had ended with gains of over 7% on Thursday as well.
Opening Bell: Calm Ahead Of RBI Policy
Indian equity markets have opened little changed on the Final trading day of the week, ahead of the monetary policy decision by the Reserve Bank of India.
The S&P BSE Sensex has opened 0.1% higher at 40,226 while the NSE Nifty 50 has opened at 11,852 - up 0.15%. Both Sensex and Nifty gained for the sixth straight day on Thursday, ending at the highest level in close to eight months.
The Sensex & Nifty are just under 3% away from erasing their losses for 2020.
Most sectoral indices have opened with a positive bias. The Nifty Metal index is up 0.6% while the Nifty Bank index is up 0.5% at the start of trade. Other indices have opened little changed.
Broader markets - which have been underperforming over the last two sessions have opened with modest gains. The Midcap index is up 0.2% while the smallcap index has gained 0.3%.
932 stocks on the NSE have opened with gains while 459 stocks are declining.
Current Market Update
Trading Ideas For The Day
- Nifty: Sell 11,600 Put of the October 15 expiry in the range of Rs 52-54. Target of Rs 38-28 and stop loss of Rs 68.
- Nifty Bank: Buy in the range of 23,050-23,150 for target of 23,300-23,500 and stop loss of 22,950.
- Buy Cipla October futures for target of Rs 822.9 & Rs 833.3 and stop loss of Rs 809.1
- Sell Tata Consumer Products October futures for target of Rs 488.2 & Rs 483.2 with stop loss of Rs 494.8.
- Cipla and Tata Consumer Products are intraday recommendations.
Source: ICICI Direct
How Did The Fund Flows Fare On Thursday
Key Stocks In Focus
- Vedanta: The company says that certain brokers registered with the BSE are not allowing public shareholders to place their bids above the floor price. Listing regulations state that public shareholders may submit their bid at any price at or above the floor price. Today is the final day of the reverse book building process in which public shareholders can tender their shares.
- Future Group Stocks: Amazon initiates arbitration proceedings against the group before the Singapore International Arbitration Centre. Amazon alleges violation of the contract it signed with the group in 2019 whien it acquired 49% stake in Future Coupons in 2019.
- Lakshmi Vilas Bank: Gets non-binding offer from Clix Group. The bank on September 16 had stated that substantial portion of the due diligence process is completed.
- CreditAccess Grameen: Approves allotment of 1.13 crore equity shares of face of Rs 10 each to eligible qualified institutional buyers. The issue price of Rs 707 per equity share is a 0.1% discount to the floor price. The company has raised Rs 799 crore from this issue. T. Rowe Price, HDFC Life, ICICI Prudential are some of the funds to whom shares are allotted.
- Solar Industries: Gets order worth Rs 447 crore for supply of bulk explosives and initiating systems from the Telangana Government.
- GOCL Corporation: Wholly-owned subsidiary gets order worth Rs 187 crore from a Telangana Government PSU for supply of explosives and accessories over a period of two years.
- Non-Nifty Earnings Today: Steel Strips Wheels, RCF
To know more about the key stocks in focus, brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Poised For Weekly Gains
Good Morning!
The Nifty 50 gained over 1,000 points in the last nine trading sessions, while the Sensex rose close to 2,800 points.
Both indices are just 2.5% shy from turning positive for 2020. They are also set to post their second consecutive weekly advance.
Futures are indicating a flat start to today's session, ahead of the MPC rate decision. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.2% to 11,870 as of 7:40 a.m. on Friday.
Reserve Bank of India Governor Shaktikanta Das will today announce the Monetary Policy Committee’s decision taken in a bi-monthly meeting. The newly-constituted panel began its three-day deliberations on Wednesday, amid expectations that the central bank will maintain status quo on the benchmark lending rates in view of hardening inflation.
Globally, Asian markets are mixed on the final trading day of the week. Markets in Japan and Australia are declining, while those in Hong Kong are trading with gains. Chinese markets resumed trading after a week-long holiday.
Futures on the Dow Jones are trading 130 points higher. The index ended with gains of 0.4% on Thursday.
West Texas Intermediate crude was steady at $41.15 per barrel, while gold rose 0.6% to $1,905/Oz.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
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