KEY HIGHLIGHTS
Closing Bell: Second Day Of Gains
Indian equity markets rose for the second straight day, in-line with positive global cues and extending their positive start to the October F&O series.
The S&P BSE Sensex ended 1.6% higher at 37,981 while the NSE Nifty 50 index ended 1.6% higher at 11,226. The Sensex has gained over 1,400 points over the last two sessions, while the Nifty has gained over 400 points.
All sectoral indices ended the day with gains. The Media index remained the top sectoral gainer throughout the session, ending 4.8% higher.
Indices like the Nifty Bank, Nifty Auto, Nifty Metal, Nifty PSU Bank and Nifty Realty saw gains in excess of 3%, with the Nifty Bank witnessing its biggest single-day jump in a month.
The Nifty Pharma index too reversed from the day's low to end 1.7% higher. Gains on the Nifty FMCG and Nifty I.T. were modest compared to their counterparts. Both the indices ended with gains of less than 1%.
Broader markets outperformed the benchmarks in today's session. The Midcap index ended with gains of 3% while the smallcap index ended 3.6% higher in the session today.
The India Volatility index fell below the mark of 20, ending 5.3% lower at 19.57.
Market breadth remained in favour of the gainers. 1,403 stocks on the NSE ended with gains while 453 posted losses.
How Did The Sectoral Indices Fare
Buzzing Stock: NOCIL
- Trades at the highest level since April 2019
- Gains as much as 11.4% to Rs 143.6
- Biggest single-day gain since January 2018
- Up for the second straight day
- Today's volumes are nearly triple its 20-day average
- Relative Strength Index (RSI) of the stock at 64
- Has more than tripled from its 52-week low of Rs 44.7 on March 24, 2020
- Three out of the eight analysts tracking the stock have a buy recommendation; 1 sell call
- The stock crossed its 12-month consensus price target of Rs 128.3, in today's trading session
Threat To Recovery In Auto Sales?
Buzzing Stock: Quick Heal Technologies
- Trades at the highest level since July 2019
- Gains as much as 10.3% to Rs 163.4
- Biggest single-day gain in two weeks
- Up for the second straight day
- Today's volumes are more than double its 20-day average
- Stock heading towards the overbought territory with Relative Strength Index (RSI) at 68
- Has nearly tripled from its 52-week low of Rs 62 on March 19, 2020
- Has gained over 20% over the last one year
IndusInd, Axis Bank Lead Gains On The Nifty Bank
Buzzing Stock: Tube Investments of India
- Among the top gainers on the Nifty 500 index
- Gains as much as 10% to Rs 626.9
- Biggest single-day gain since April 2018
- Only the second day of gains in the last seven trading session
- Today's volumes are more than triple of its 20-day average
- Breaks above its 50-Day Moving Average
- Relative Strength Index (RSI) of the stock at 55
- Trading 10% below its 52-week high of Rs 681 on September 7, 2020
- Four out of the five analysts tracking the stock have a buy recommendation; 0 sell calls
- Return potential of the stock as per Bloomberg data is 2.5%
Active Stock Options
- Reliance Industries' 2,300 Call: Premium up 13.3% to Rs 63.25. The contract has added 1.24 lakh shares in Open Interest.
- HDFC's 1,700 Call: Premium up 27.8% to Rs 52.85. The contract has added 1.6 lakh shares in Open Interest.
- Kotak Mahindra Bank's 1,300 Call: Premium up 25.5% to Rs 40.35. The contract has added 1.92 lakh shares in Open Interest.
Buzzing Stock: Laurus Labs
- Third best performer on the Nifty Midcap index
- Gains as much as 10% to Rs 1,460
- Biggest single-day gain in over a month
- Up for the second straight day
- Today's volumes are 44% higher than its 20-day average
- Relative Strength Index (RSI) of the stock at 68
- Trades at 26.7 times estimated forward Earnings Per Share as compared to a two-year average of 18.1 times
- Had made a record high of Rs 1,550 on September 21, 2020
- Six out of the eight analysts tracking the stock have a buy recommendation; 2 sell calls
- The stock trades 19.2% higher than its 12-month consensus price target of Rs 1,169, implying a negative return potential
Markets At 2:10 P.M.
- Benchmark indices extend gains; at the day's high
- Nifty up 1.6% at 11,228
- Sensex up 1.6% at 37,981
- Nifty Bank up 3.3% at 21,671
- Nifty Midcap index up 2.8%
- Nifty Smallcap index up 3.5%
- India Volatility Index down 3.2% to 20
- Nifty Media extends gains as the top sectoral gainer; up 4.5%
- Nifty Metal, Nifty PSU Bank index up 3.2% each
- Nifty Auto, Nifty Realty gain over 2.5%
- Nifty Pharma reverses from the day's low to trade with gains of 1.7%
- IndusInd Bank is the top Nifty gainer; up 9%
- 46 out of the 50 Nifty constituents trade with gains
- Wipro is the top Nifty laggard; down 1%
- 1,441 stocks on the NSE trade with gains while 377 stocks decline
MPC Meet Rescheduled
The Reserve Bank of India has issued a statement, saying that the meeting schedule of the Monetary Policy Committee (MPC) has been rescheduled.
The MPC was set to meet on September 29, 30, and October 1, with the policy decision being announced on October 6.
The statement said that the revised dates will be announced shortly.
Money Market Update
The currency ended the first session of the new trading week with losses, despite the strength seen in the equity markets.
The rupee ended at 73.79 against the U.S. Dollar, as compared to Friday's close of 73.61. It had an intraday low of 73.86 and an intraday high of 73.53.
Today's losses meant that the rupee was the second worst performing currency in Asia, after the Thai Baht.
Yield on the 10-year government bond ended at 6.057% as compared to Friday's close of 6.041%.
All Stocks On The Metal Index Gain
Buzzing Stock: Mphasis
- Among the top gainers on the Nifty Midcap index
- Gains as much as 8.5% to Rs 1,380
- Biggest single-day gain in two weeks
- Up for the second straight day
- Today's volumes are 33% below its 20-day average
- Relative Strength Index (RSI) of the stock at 61.7
- The stock made an all-time high of Rs 1,419.8 on September 23, 2020
- 23 out of the 33 analysts tracking the stock have a buy recommendation; 4 sell calls
- The stock trades 10% higher than its 12-month consensus price target of Rs 1,229, implying a negative return potential
F&O Snapshot: Active Options Contract
- Nifty October futures add 15.2% and 11.9 lakh shares in Open Interest.
- Nifty Bank October futures add 14.6% and 2.24 lakh shares in Open Interest.
Nifty: October 1 Expiry
- 11,200 Call: Premium up 145.1% to Rs 92.3. The contract has added 8.1 lakh shares in Open Interest.
- 11,300 Call: Premium up 166.7% to Rs 44.8. The contract has added 14 lakh shares in Open Interest.
- 11,000 Put: Premium down 72% to Rs 25.7. The contract has added 15.9 lakh shares in Open Interest.
Nifty Bank: October 1 Expiry
- 21,500 Call: Premium up 182.4% to Rs 379.4. The contract has shed 37,850 shares in Open Interest.
- 22,000 Call: Premium up 246.4% to Rs 154.1. The contract has added 2.64 lakh shares in Open Interest.
- 21,000 Put: Premium down 71.4% to Rs 105.7. The contract has added 6.13 lakh shares in Open Interest.
Stock Reaction: Lupin
The drugmaker has announced the launch of Atorvastatin Calcium Tablets USP, 10 mg, 20 mg, 40 mg and 80 mg, it said in an exchange filing.
The product has received the approval from the U.S. FDA and will be manufactured at the company's Nagpur facility.
The drug is the generic equivalent of Lipitor Tablets of Pfizer Inc., and are indicated to lower cholesterol in blood for adults and Children over 10 years of age.
The Atorvastatin Calcium tablets had annual sales of approximately $559 million in the U.S. for the 12-months ending July 2020, as per IQVIA data.
Shares are off the day's low, currently trading little changed at Rs 996, post the announcement.
European Markets Open Higher
Benchmark indices in Europe have opened higher, in-line with the positive global cues.
The Stoxx 600 index has opened 1.4% higher with banks and auto stocks leading the gains. Personal Care and energy stocks are the top laggards.
Asian markets, with the exception of Australia have ended with gains, while Futures on the Dow Jones are trading higher by 180 points.
Brent crude trades 0.8% lower at $41.6 per barrel while Gold is little changed at $1,860/Oz.
Let's take a look at how benchmark indices in Europe are trading:
- Euro Stoxx 50 up 1.5% at 3,183
- DAX up 1.7% at 12,682
- CAC up 1.6% at 4,806
- FTSE 100 up 1% at 5,904
- IBEX 35 up 1.3% at 6,713
How Are The Sectoral Indices Faring
Brokerage Reaction: Bandhan Bank
Shares of the private lender are gaining in today's session after brokerage firm Emkay, upgraded the stock to buy from hold with a price target of Rs 390.
Emkay's Rationale:
- Improving collection trends, strong provision buffer
- Strong liability profile and low cost of funds provide flexibility to diversify asset base without diluting NIMs, profit
- Re-orienting business verticals, management structure to gear for next level of growth
- Risk-reward turning favourable
Shares gained as much as 4.5% to Rs 276.9 and are up for the second straight day. The stock is among the top performers on the Nifty Bank index.
All Stocks Gain On The Auto Index
Stock Reaction: Escorts
The company informed the exchanges that its joint venture between Kubota Corporation and itself - Escorts Kubota India, has begun commercial production of Kubota tractors.
Production began on September 25, 2020, according to the exchange filing.
Shares gained as much as 7.9% to an all-time high of Rs 1,298. The stock is up for the second straight day, on volumes that are 72% higher than its 20-day average
23 out of the 28 analysts tracking the company have a buy recommendation while four have a hold. One analyst recommends selling the stock.
The stock has crossed its 12-month consensus price target of Rs 1,282.4, in today's trading session.
Markets At Noon
- Benchmark indices trade near the day's high
- Nifty up 1.3% to 11,193
- Sensex up 1.3% at 37,866
- Nifty Bank up 2.4% at 21,476
- Nifty Midcap index up 2.2%
- Nifty Smallcap index up 2.8%
- India Volatility Index down 2.6% to 20.14
- Nifty Media extends gains as the top sectoral gainer; up 3.8%
- Nifty Metal, Nifty PSU Bank, Nifty Auto gain over 2.5% each
- Nifty I.T., Nifty Pharma give up gains to trade flat
- ONGC remains the top Nifty gainer; up 5.8%
- Cipla is the top Nifty laggard; down 1%
- 1,410 stocks on the NSE trade with gains while 370 decline
Brokerage Reaction: Jubilant Foodworks
Shares of the fast food chain operator hit a record high in today's session, after brokerage firm Jefferies initiated coverage on the stock with a buy recommendation.
Jefferies' Rationale:
- Industry faces severe headwinds led by Covid-19 concerns
- Increased customer focus on hygiene & quality augurs well for branded players like Jubilant
- Industry share of QSR restaurants is abysmally low at < 5% but should gain over time
- Tough macro will result in 14% decline in FY21 SSG
- Valuations are at a significant premium to history
- See 25%+ EPS CAGR over FY20-23E
- Key Risks: Continued disruption from Covid-19, stiff competition from food aggregators, reversal of delivery fees and weak consumer sentiment
Shares gained as much as 5.6% to an all-time high of Rs 2,444 and are up for the second straight day. Jefferies has set a price target of Rs 2,650 on the stock.
Stock Reaction: Tata Steel & Tata Metaliks
Tata Steel has exercised the right to acquire 34.9 lakh equity shares of Tata Metaliks through a Warrant Conversion.
The pricing for the warrant conversion was Rs 642 per warrant, aggregating to Rs 224.2 crore, the company said in a statement.
Post conversion of the warrants, the stake of Tata Steel in Tata Metaliks will rise to 60.03% from 55.06% previously.
Shares of Tata Metaliks gained as much as 6.5% to Rs 540, and are up for the second straight day.
Shares of Tata Steel gained as much as 2.9% to Rs 362.25 and are also up for the second straight day.
Brokerage Reaction: Maruti Suzuki India
Shares of India's largest passenger car maker are gaining in today's session after brokerage firm HSBC upgraded the stock to buy from the previous rating of hold.
HSBC's Rationale:
- PV demand remains strong
- Expect a stronger festive season for PVs and two-wheelers
- First-time buyer ratio continues to rise for PVs, providing more confidence in the near-term sustenance
- Valuations not rich relative to market
- Operating leverage will be the biggest tailwind for margins as volumes normalise
- Value Vs Volume market share remains the medium-term concern
- Outlook for a rise in first-time buyers and mean reversion in demand in coming years drive our upgrade.
Shares gained as much as 3.3% to Rs 6,708. The stock is up for the second straight day. HSBC has raised its price target on the stock to Rs 7,500 from the earlier target of Rs 6,100.
Buzzing Stock: PVR
- Top gainer on the Nifty smallcap index
- Gains as much as 11.8% to Rs 1,231
- Biggest single-day gain in nearly four months
- Trades at the highest level in two weeks
- Up for the second straight day
- Has gained nearly 15% in the last two trading sessions
- Breaks above its 50-Day Moving Average of 1,220.6
- Today's volumes are nearly triple its 20-day average
- Relative Strength Index (RSI) of the stock rebounds from oversold territory to 50.8
- Trades 41% below its 52-week high of Rs 2,086.6 on February 25, 2020
- West Bengal Government has allowed opening of Cinema halls from October 1
- 19 out of the 29 analysts tracking the stock have a buy recommendation; 4 sell calls
- Return potential of the stock as per Bloomberg data is 15.9%
Stock Reaction: Ratnamani Metals & Tubes
The company has informed the exchanges that it has received a domestic order in the company's Carbon Steel Division, for the supply of coated Carbon Steel pipes for the oil & Gas sector.
The order, worth Rs 216 crore will be executed between January 2021 and January 2022, the company said in an exchange filing.
Shares gained as much as 4.9% to Rs 1,260, and is up for the second straight day. The stock is also among the top performers on the Nifty Metal index.
Buzzing Stock: ONGC
- Top gainer on the Nifty 50 index
- Gains as much as 5.8% to Rs 72.9
- Biggest single-day gain in four months
- Up for the second straight day
- Has gained 9% in the last two trading sessions
- Nearing its 50-Day Moving Average on the upside at 77.23
- Today's volumes are 32% higher than its 20-day average
- Relative Strength Index (RSI) of the stock at 46
- Has more than halved from its 52-week high of Rs 149.65 on November 4, 2019
- 22 out of the 34 analysts tracking the stock have a buy recommendation
- Return potential of the stock as per Bloomberg data is 31.9%
Stock Reaction: Gateway Distriparks
The company at its board meeting held today has approved an interim dividend of Rs 2 per equity share of face of Rs 10 each.
The record date for the payment of the interim dividend has ben set as October 8, 2020.
The board has also decided to relieve Sachin Bhanushali has as the company's CEO in order to enable him to focus on the expansion of the company's Rail vertical.
Prem Kishan Dass Gupta, the company's CMD will take over managing the day-to-day affairs of the CFS vertical of the company.
Shares gained as much as 5% to Rs 91.85 and are up for the second straight day.
Buzzing Stock: Balkrishna Industries
- Among the best performer on the Nifty Midcap index
- Gains as much as 5.4% to Rs 1,429
- Biggest single-day gain in nearly four months
- Trading near its all-time high of Rs 1,431
- Up for the second straight day
- Has gained 10% in the last two trading sessions
- Closed above its 50-Day Moving Average of 1,327 on Friday
- Today's volumes are nearly quadruple its 20-day average
- Relative Strength Index (RSI) of the stock at 61
- Has more than doubled from its 52-week low of Rs 679 on March 23, 2020
- 16 out of the 27 analysts tracking the stock have a buy recommendation
- The stock has crossed its 12-month consensus price target of Rs 1,372, implying a negative return potential
Second Day Of Gains For The Media Index
Stock Reaction: Surya Roshni
The company has informed the exchanges that it has won orders worth Rs 272.8 crore rupees for supply of coated API Line pipes to GAIL and Indradhanush Gas Grid.
The order for supply of coated API Line Pipes to GAIL, pertains to its Mumbai-Nagpur-Jharsuguda pipeline project and is worth Rs 61.57 crore. The timeline to complete the order, is eight months.
The order to Indradhanush Gas Grid is for the North-East Gas Grid project and is worth Rs 211.2 crore, excluding GST, the company said in a statement. The order needs to be executed over a period of 60 weeks.
Shares gained as much as 9.7% to Rs 213, post the announcement. The stock is up for the second straight day and is trading at the highest level since July 2019.
Markets At 10:10 A.M.
- Benchmark indices gain for second straight day
- Nifty up 1% at 11,169
- Sensex up 1.1% at 37,785
- Nifty Bank up 1.8% at 21,361
- Nifty Midcap index up 1.9%
- Nifty Smallcap index up 2.3%
- India Volatility Index up 0.2% to 20.72
- Nifty Media is the top sectoral gainer; up 3%
- Nifty Auto, Nifty Metal gain over 2% each
- Nifty PSU Bank and Nifty Realty up over 1.8% each
- Nifty I.T., Nifty Pharma and Nifty FMCG trade with modest gains
- ONGC is the top Nifty gainer; up 5.5%
- Bharti Airtel is the top Nifty laggard; down 1%
- 1,406 stocks on the NSE trade with gains while 315 decline
Money Market Update
The currency has opened flat in today's session, after posting losses for the week on Friday.
The rupee opened at 73.66 against the U.S. Dollar as compared to Friday's close of 73.61. Despite the weekly losses, the currency ended as the third best performer in Asia for the week.
Yield on the 10-year government bond opened at 6.041% as compared to Friday's close of 5.994%.
The government may raise its borrowing estimate for the October-March period to Rs 6 lakh crore from the existing five lakh crore, according to 10 out of the 16 traders in a Bloomberg Survey.
"We expect the full-year sales to be revised higher by another Rs 2 lakh crore to Rs 14 lakh crore," Himanshu Malik, a strategist at HSBC wrote.
Stock Reaction: Gulf Oil Lubricants
South Korea-based S-Oil, will produce and sell its lubricant product in India, through its partnership with Gulf Oil Lubricants.
S-Oil started producing S-Oil SEVEN, from Gulf Oil's Chennai plant from August, the South Korean refiner said in an emailed statement to Bloomberg.
The company plans to start selling the product in the fourth quarter of FY21, the statement said. S-Oil has been exporting lube base oil to Gulf Oil since 2006. It has a daily capacity to make 44,700 barrels of lubricant oil in South Korea.
Shares gained as much as 3.5% to Rs 660 and are up for the second straight day.
Stock Reaction: Lakshmi Vilas Bank
The bank put out a statement on Sunday evening, trying to assure depositors of the bank's financial health.
The statement said that the lender's Liquidity Coverage Ratio currently stands at 262%, as compared to a minimum 100% requirement from the Reserve Bank of India.
The Provision Coverage Ratio of the lender stood at 72.6%, as compared to 70% prescribed under the Prompt Corrective Action framework.
The bank said that it will continue to evaluate the proposed amalgamation of the 'Clix Group' with itself.
This was done after shareholders of the bank rejected the appointment of as many as seven directors, including the CEO at the bank's AGM on Friday.
The Reserve Bank of India has approved a three-member board committee of independent directors to run the day-to-day affairs of the bank.
Shares fell as much as 6.25% to Rs 18, and are fluctuating between gains and losses.
Coronavirus India Update
- India reports less than 90,000 cases for the eighth straight day
- 82,170 cases reported in the last 24 hours
- Total confirmed cases now at 60,74,702
- Active cases at 9,62,640
- Patients cured / discharged / migrated at 50,16,520
- Death toll rises to 95,542
- 1,039 deaths reported in the last 24 hours
- 74,893 patients recovered in the last 24 hours
Stock Reaction: Premier Explosives
The company informed the exchanges that it has received an Arms Licence from the Arms Licence Issuance Authority of the Department for Promotion of Industry and Industrial Trade (DPITT).
The licence will allow the company to manufacture all types of warheads and fuses at the Katepally village in Telangana.
The licence will enable the company to enter into new business areas in the field of defence explosives, it said in an exchange filing.
Shares are locked in an upper circuit of 5% at Rs 119.5. The stock is up for the second straight day.
Opening Bell: Second Day Of Gains
Indian equity markets extended Friday's gains, wiping out all the losses made during Thursday's trading session.
The S&P BSE Sensex opened 1% higher at 37,756 while the NSE Nifty 50 index opened 0.8% higher at 11,140. Both Sensex and Nifty ended close to 4% lower for the week on Friday.
All sectoral indices have opened with gains. Nifty Auto, Nifty Medal, Nifty Pharma and Nifty PSU Bank have opened with gains of over 1% each.
Nifty Media index is the top sectoral gainer, opening over 2% higher while other indices like Nifty Bank, Nifty I.T. and Nifty Realty have gained 0.5%-1% at the start of trade.
Broader markets have opened in-line with benchmarks. The Nifty Midcap index is up 1% while the Smallcap index has gained 1.3% in early trade.
Market breadth is in favour of the gainers. 1,239 stocks on the NSE are trading with gains, while 269 stocks decline.
Trading Strategies For The Day
- Nifty: Sell 11,200 Call of the October 1 expiry in the range of Rs 38-40. Target of Rs 24-14 and stop loss of Rs 54.
- Nifty Bank: Sell in the range of 21,150-21,200 for target of 21,000-20,800 and stop loss of 21,300
- Buy HCL Technologies October futures for target of Rs 838.9 and Rs 848.6 with a stop loss of Rs 826.1
- Sell Havells India October futures for target of Rs 649.5 and Rs 636 with a stop loss of Rs 667.5
- Havells and HCL Technologies are intraday recommendations
Source: ICICI Securities
How Did The Fund Flows Fare On Friday
Key Stocks In Focus
- Lakshmi Vilas Bank: The bank in a statement on Sunday evening said that its Liquidity Coverage Ratio is currently at 262% as compared to a minimum 100% required by the RBI. The bank will continue to evaluate proposed amalgamation of the 'Clix Group' with itself. This comes after shareholders rejected the appointment of seven directors, including the CEO at its AGM on September 25.
- Vodafone Idea: The government of India said that it will study the arbitration case award in the Vodafone International case. In a separate instance, the telecom regulator TRAI has dropped its probe against the company in the priority plan matter, after it withdrew contentious claims on faster speed and modified its offering.
- Escorts: Says joint venture with Kubota Corporation has begun commercial production of Kubota Tractors from September 25.
- Berger Paints: CEO Abhijit Roy stated that sales for Q2FY21 will be higher than the previous quarter while Q3 sales will be better than the second quarter. He also said that sales in the upcountry markets have been better than metro cities and that the company is not scaling back capex plans.
- Reliance Industries: Reliance Retail gets subscription amount of Rs 7,500 crore from Silver Lake for 1.75% stake.
- Tata Steel: Exercised the right to acquire 34.9 lakh equity shares through a warrant conversion in Tata Metaliks. Pricing for the Warrant conversion is Rs 642 per warrant worth Rs 224.2 crore. Tata Steel's stake in the company will rise to 60.03% from 55.06% earlier.
- Thomas Cook: Board has withdrawn the proposal of share buyback due to Covid-19. The board in February had approved a share buyback of 6.9% of total equity worth Rs 150 crore.
- Premier Explosives: Gets arms license from the Arms License Issuance Authority department to manufacture all types of warheads and fuses. The license enables the company to enter into new businesses.
For details on the key stocks in focus, brokerage updates and F&O cues, click here.
Your Trade Setup For The Day
A Check On Indian ADRs
Gains To Continue?
Good Morning!
Indian equity markets managed to trim their weekly losses on Friday, beginning the October series on a positive note. Friday's gains cut weekly losses for the Sensex and Nifty to 4%.
The gains are likely to continue in today's session as well. The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.7% to 11,116 as of 7:45 a.m. on Monday.
Asian markets have opened with gains this morning. Benchmark indices in Japan and Hong Kong are rising, while those in Australia are trading with losses. Futures on the Dow Jones are currently trading with gains of 120 points. The index ended 1.3% higher on Friday.
West Texas Intermediate crude fell 0.5% to $40 per barrel, while gold was little changed at $1,861.4/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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