The Bombay Stock Exchange (BSE), right, stands in Mumbai. (Photographer: Vivek Prakash/Bloomberg)

Pharma, Auto Stocks Help Sensex, Nifty Clock Third Week Of Gains

Market Wrap

Closing Bell

Indian shares rose fourth time in five sessions as key equity benchmarks posted their third weekly gains led by automakers and pharmaceutical companies.

The S&P BSE Sensex rose 0.51 percent to 31,892 and the NSE Nifty 50 index advanced 0.57 percent to 9,974. For the week, Sensex gained 0.94 percent while the Nifty jumped 1.19 percent.

Fifteen out of the 19 sector gauges compiled by BSE Ltd., advanced led by the S&P BSE Realty Index's 2.59 percent surge.

Tata Motors Gains Most In Two Weeks On August Sales

Shares of passenger car and commercial vehicle maker jumped as much as 3.76 percent, the most in over two weeks, to Rs 390.70 after its domestic sales in August grew 26 percent to 48,988 vehicles.

  • Commercial vehicle sales rose 34 percent on a yearly basis to 31,566 units
  • Medium and heavy commercial vehicle sales grew 52 percent to 10,926 units
  • Integrated and light commercial vehicle sales jumped 44 percent to 3,881 units
  • Passenger vehicles recorded sales of 14,340 units, up 10 percent
  • Exports declined 53 percent to 3,082 units

Market Check

Indian shares pared some of their gains weighed down by losses in large cap names like TCS, Bharti Airtel and HDFC.

  • Sensex up 110 points or 0.34 percent at 31,840
  • Nifty rises 0.40 percent to 9,957
  • BSE MidCap and SmallCap indices outperform Sensex, rise 0.80 percent
  • IT and Telecom indices slip 0.39 and 0.42 percent respectively
  • Realty Index rises the most since August 23, jumps as much as 3.26 percent

Strides Shasun Gains On Closure Of Inspection By U.S. FDA

Shares of the drugmaker jumped as much as 4.78 percent, the most in over two weeks, to Rs 948.50 after it received Establishment Inspection Report confirming closure of inspection of KRS Gardens facility in Bangalore.

The KRS Gardens facility in Bangalore manufactures tablets capsules, sachets, creams and ointments.

Stocks Gaining On Heavy Volumes

  • Sun TV Network: The operator of Tamil and Malayalam channels jumped as much as 12.34 percent, the most in over six months, to Rs 782.40. Trading volume was 7.4 times the 20-day average.
  • Minda Industries: The auto component maker jumped as much as 5.58 percent, the most in over one month, to Rs 892. Trading volume was 4.2 times the 20-day average.
  • TeamLease Services: The human resource service provider jumped as much as 2.99 percent, the most since August 21, to Rs 1,530. Trading volume was 10.1 times the 20-day average.

European Shares Advance

Escorts Gains As Tractor Sales Rise 23% In August

Shares of the tractor maker jumped as much as 2.95 percent to Rs 666.40 after it reported that sales in August rose 23 percent to 4,587 units.

  • Domestic sales grew 19.9 percent to 4,398 units
  • Exports more than tripled to 189 units

Cadila Healthcare Gains On U.S. FDA Approval For Alzheimer's Drug

Shares of the drugmaker jumped as much as 2.59 percent to Rs 512.95 after its subsidiary Zydus Cadila got final approval for Donepezil Hydrochloride tablets in strength of 23 mg.

The drug will be manufactured from its Moraiya facility in Ahmedabad.

Sadbhav Engineering Gains On Order Win

Shares of the road construction company jumped as much as 4.28 percent to Rs 302 after it bagged two orders worth Rs 900 crore.

The Ahmedabad-based company bagged a project for upgradation to six-lane with paved shoulders of two sections of roads on the National Highway 8A between Ahmedabad and Rajkot.

The other project includes, upgradation to six-lane with paved shoulders of Bagodara-Limbdi section of NH 8A.

Ashok Leyland Rallies As August Sales Beat Estimate

Shares of the commercial vehicle maker jumped as much as 4.81 percent, the most since July 7, to Rs 112.25 after it reported better than estimated sales in August.

  • Total sales rise 25 percent to 13,634 units against Bloomberg Quint estimate of 12,300 units
  • Medium and commercial heavy vehicle sales jump 29 percent to 10,567 units
  • Light commercial vehicle sales rise 14 percent to 3,067 units

Pharma Shares Rally

The S&P BSE Healthcare Index was the top sectoral gainer. The index rose as much as 2.14 percent, the most in over a weak.

Maruti Suzuki Gains On August Sales

Shares of India's biggest carmaker jumped as much as 1.27 percent to Rs 7,797 after its sales in August grew 23.8 percent to 1.63 lakh units year on year.

  • Total domestic sales rise 26.7 percent to 1.52 lakh units
  • Total exports decline 4.7 percent to 11,701 units
  • Sales of compact cars like Swift, Ritz, Cilerio, Ignis, Baleno, Dzire and Dzire Tour S surge 62.4 percent
  • Gypsy, Ertiga, Vitara Brezza and S-Cross sales jump 27.6 percent

Aditya Birla Starts Trading On Exchanges

Bajaj Auto Gains After August Sales Rise 3%

Shares of the two-wheeler maker jumped as much as 2.32 percent to Rs 2,879 after the company reported that its sales in August grew 3 percent to 3.35 lakh units year-on-year.

  • April domestic motorcycle sales fall 2 percent to 1.7 lakh units
  • Motorcycle exports rise 7 percent to 1.12 lakh units
  • Commercial vehicle domestic sales rise 13 percent to 28,995 units
  • Commercial vehicle exports jump 12 percent to 22,175 units

Dr. Reddy's Labs Up Most In Over A Year

Dr. Reddy’s Laboratories rose as much as 8 percent, the biggest gain in six years, to Rs 2,183, after it won a ruling over three patents for Suboxone drug. Trading volume was 60 times the 30-day average of 2,856 for this time of day.

The stock is 15 percent below the Bloomberg consensus one-year target price.

Opening Bell

Indian shares swung between gains and losses, reflecting the mixed trade in Asian peers, as investors await a U.S. jobs report for clues on the Federal Reserve’s policy-tightening path due Friday.

The sentiment was also dampened after India's economy grew at its slowest pace in three years.

The S&P BSE Sensex rose 0.14 percent 31,774 and the NSE Nifty 50 index gained 0.13 percent to 9,930. The broader market outperformed as the S&P BSE MidCap and S&P BSE SmallCap indices rose over 0.5 percent each.

Sixteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Healthcare Index's 1.32 percent gain. On the other hand, the S&P BSE IT Index was the top loser after it declined 0.36 percent.

Axis Bank Says Have Exposure To 12 Of Accounts Under RBI Directions

The country’s third largest private sector lender Axis Bank Ltd. said it has exposure to 12 accounts identified by the Reserve Bank of India in its second list for insolvency proceedings.

The total fund based outstanding was Rs 1,843 crore, while the non-fund based stands at Rs 649 crore, the bank said in an exchange notification. Around 75 percent of the outstanding loans from the 12 defaults is secured, Axis Bank said adding, it has made provisions of Rs 862 crore in 12 major non-performing assets.

The central bank has asked Axis Bank to resolve 12 major NPAs by December 13, the lender said.

Money Market Heads-Up

Government bonds are likely to gain today as the slowest pace of growth for the Indian economy is expected to boost easing hopes and may also pressure the central bank to keep rates lower for longer even as inflation accelerates.

GDP data on Thursday showed Indian economy grew at 5.7 percent in April-June period from a year earlier, the slowest pace since 2014. Finance Minister Arun Jaitley said the fall in GDP is a matter of concern, but added he is still hopeful of over 7 percent growth in the economy this financial year.

The Reserve Bank of India will auction Rs 18,000 crore of four government bonds, including Rs 9,000 crore of new 2031 notes. The Indian rupee, which has gained 0.2 percent in the week, may trade in a range today as investors await U.S. jobs report for clues on the Federal Reserve’s policy-tightening path.

F&O Cues

  • Nifty Rollover at 58 percent versus 72 percent (average of last 3 series)
  • Nifty August futures expire at 9918, Nifty down 1 percent in August series
  • Nifty Sep Futures trading at a premium of 19 points from 28 points
  • September series highest Call base at 10,000 (open interest at 28lk)
  • September series highest Put base at 9,700 (open interest at 38lk)
  • Call strikes 9,900, 10,000, 10100, 10,200 see open interest addition
  • Put strikes 9,700 and 9,900 see max open interest addition

Brokerage Radar

B&K on Vakrangee

  • Initiate coverage with Buy and a target of Rs 600
  • Expect revenue/earnings to grow 26 percent/22 percent CAGR between FY17-20
  • Expect Vakrangee Kendras to reach 75,000 by FY20
  • Scaling down legacy business to improve days sales outstanding

JPMorgan on Grasim

  • ‘Overweight’ with a target price of Rs 1,250
  • Listing of financial business to allow better value discovery
  • Aditya Birla Capital valued at Rs 120
  • Better than expected listing price positive for Grasim
  • If AB Capital lists at Rs 140, Grasim stock price works out to Rs 1,350, implying 15 percent upside

Credit Suisse on Compton Greaves Consumer

  • ‘Outperform’ rating with target price of Rs 270
  • EPS estimates cut by 3 percent for FY18/19/20
  • Revenue growth is likely to return to normalcy in Q2FY18
  • Input cost pressures to continue to remain high
  • Kenstar more preferred acquisition target compared to lighting business of Surya

Nomura on TCS

  • ‘Reduce’ rating with target price of Rs 2,180
  • Not convinced on growth acceleration and margin stability
  • Expect declaration and soft outlook on BFSI/Retail and CPG segment
  • Dollar revenue/EPS to grow at CAGR of 7/3 percent over FY18-19
  • HCL Technologies only company in IT sector with 'buy' rating

IIFL on Balkrishna Industries

  • ‘Buy’ rating with target price of Rs 1,800
  • BIL offers high visibility on growth, margins, and cash flows
  • EBITDA margin to improve due to moderation in rubber
  • Favourable euro hedges to support EBITDA; Margins for FY18 seen at 30 percent
  • Management expects to exceed FY18 volume guidance of 185-190k metric tonne

Stocks To Watch

  • Dr Reddy’s wins rulings over three patents for Suboxone drug
  • Indian automakers in focus as they will report August sales
  • Justdial completed buyback of 9.5 lakh shares (1.4 percent) at Rs 390.44 each
  • ABB India to install solar inverters at 750 railway stations in India
  • V-Guard acquired 7.82 lakh shares in Guts Electro-Mech Ltd. Holding increases to 74 percent post the acquisition
  • Jindal Saw sold 47.65 lakh shares (6 percent) in Jindal ITF Ltd. Holding reduces to 51 percent post sale.
  • Strides Shasun subsidiary Arrow Pharma acquires Amneal Pharmaceuticals for a consideration of AUD 17 million
  • IRB Infrastructure Developers Board approves sale of IRB Pathankot Amritsar Toll Road to IRB InvIT Fund for Rs 1569 crore
  • Manappuram Finance looking to sell stake in company (VCCircle)
  • Dhampur Sugar shareholders approve cap on commission paid to promoters to Rs 15 crore
  • Alembic Pharmaceuticals receives EU GMP Certificate for its Panelav facility
  • Shankara Building Products starts new processing facility in Secunderabad
  • Allahabad Bank revises overnight MCLR to 7.5 percent from 8 percent
  • APL Apollo to finalise the availment of technical know-how and assistance from Foreign Company through joint venture
  • LIC raises stake in NTPC from 11.15 percent to 14.24 percent
  • Government appoints N Baijendra Kumar as CMD of NMDC
  • Government mulling to set up panel to select CIL chairman

New Listing

  • Aditya Birla Capital will list on the stock exchanges after being demerged from Grasim-AB Nuvo

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, jumped 0.09 percent to 9,947.

Asian stocks traded sideways as investors await a U.S. jobs report for clues on the Federal Reserve’s policy-tightening path due Friday ahead of a long weekend in America. Equities in Seoul and Sydney edged lower while gained in Tokyo and Hong Kong.

U.S. stocks rose for a fourth day and the dollar strengthened after data bolstered optimism that the American economy is on firm footing. The S&P 500 Index pushed above its average price for the past 50 days, overcoming early weakness sparked by a Twitter post from President Donald Trump on North Korea.

  • West Texas Intermediate crude fell 0.7 percent to $46.91 a barrel after gaining 2.76 percent on Thursday
  • Gold was little changed at $1,321.21 an ounce after capping its best month since January
  • ICE Sugar gained 3.52 percent to 14.40 cents a pound
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