Stock brokers watch a computer screen. (Photographer: Luis Enrique Ascui/Bloomberg News)

Sensex Posts Biggest Gain In Over A Week; Nifty Reclaims 10,000

Market Wrap

Closing Bell

The Indian equity benchmarks posted their biggest single-day gain in over a week on the back of buying in index heavyweights Larsen & Toubro, HDFC Bank and Maruti Suzuki.

The S&P BSE Sensex rose 0.6 percent to 31,882 and the NSE Nifty 50 Index advanced 0.72 percent to 10,006.

Fifteen out of 19 sector gauges compiled by BSE Ltd ended higher, led by the S&P BSE Capital Goods Index's 2.6 percent gain. On the flipside, the S&P BSE Healthcare Index lost 0.2 percent.

Nifty is trying to test its previous high of 10,137.85, said market expert PK Agarwal. “Technically, there is no strength in the market as short-term moving average is still less than the medium-term average.”

Agarwal said the index faces resistance around 10,100 on the upside, while on the downside support is seen around 9,780 levels.

JP Associates Slumps After Top Court Asks It To Deposit Rs 2,000 Crore

Shares of the Noida-based industrial conglomerate slumped as much as 9.85 percent, the most since August 29, to Rs 21.05 after the Supreme Court asked it to deposit Rs 2,000 crore.

The top court also allowed insolvency resolution professional Anuj Jain, appointed by the National Company Law Tribunal, to take over the management of Jaypee Infratech Ltd.

Stocks Gaining On Heavy Volumes

  • Minda Corporation: The Noida-based electrical equipment maker surged as much as 17.6 percent, the most in over two years, to Rs 134.5. Trading volume was 49.6 times its 20-day average.
  • Orient Cement: The Hyderabad-based cement maker rose as much as 4.17 percent, the most in over two months, to Rs 166. Trading volume was 23.8 times its day moving average.
  • Repro India: The Mumbai-based printing company surged as much as 8.3 percent, the most since September 7, to Rs 740. Trading volume was 14.7 times its 20-day average.
  • Liberty Shoes: The Haryana-based shoe maker was locked in 20 percent upper circuit, rising the most in over eight months to Rs 244. Trading volume was 31.8 times its 20-day average.

IPO Adda: In Conversation With Matrimony.com

BQSpotted: Liberty Shoes Hits Upper Circuit

Cochin Shipyard Gains; ICICI Direct Recommends 'Buy'

Shares of the ship builder rose as much as 2.84, the most since September 8, to Rs 564.50 after domestic brokerage firm ICICI Direct put a 'Buy' rating on the Kerala-based company with a target price of Rs 725.

This implied a potential upside of 30 percent over Friday's closing price.

ICICI Direct says:

  • The shipbuilder is improving business mix by increasing share of ship-repair orders
  • It has a healthy order book of Rs 3,000 crore
  • It is likely to receive order for indigenous aircraft carrier which will be more than Rs 8,000 crore
  • Orders give strong revenue visibility to Cochin Shipyard till FY23
  • Company has emerged as a premier player in Indian shipbuilding segment
  • Has market share of 39 percent in ship repair segment
  • Cochin Shipyard is a quality play and is on a strong footing

Market Check

Indian equity benchmarks held on to their best gains in over a week led by shares of capital goods and energy producers.

  • The S&P BSE Sensex was up 0.65 percent or 204 points at 31,892
  • NSE Nifty 50 Index rose 0.76 percent or 76 points to 10,010
  • S&P BSE Capital Goods Index was top sectoral gainer up 2 percent
  • Mid-cap and small-cap indices were up 0.88 percent
  • From Nifty 50 basket of shares, 41 gained while 10 were among losers
  • All the sector gauges barring S&P BSE Telecom Index were trading higher

Bharat Financial Inclusion, IndusInd Bank In Merger Talks

European Shares Advance

Bharti Airtel Drags Telecom Index Lower

Federal-Mogul Goetze Shares Surge On Q1 Earnings

Shares of the auto component maker jumped as much as 10.5 percent, the most in over 10 months, to Rs 575 after it reported June quarter earnings.

Highlights of Q1 earnings:

  • Revenue climbs 0.5 percent to Rs 366 crore versus Rs 364 crore (YOY)
  • EBITDA rises 18.4 percent to Rs 51.5 crore versus Rs 43.5 crore
  • EBITDA margins at 15.7 percent versus 13.2 percent
  • Net profit jumps 29.4 percent to Rs 22 crore versus Rs 17 crore

Nifty Back Above 10,000 For First Time Since August 8

BHEL Gains On Setting Record Date For Issuing Bonus Shares

Shares of the Delhi-based power plant equipment maker jumped as much as 2.6 percent, the most since August 16, to Rs 131 after it fixed September 30 as the record date for issuance of bonus shares.

Shareholders of BHEL will get one bonus share for every two shares.

Matrimony.com IPO Update

The matchmaking and marriage services company's Rs 501 crore Initial Public Offer (IPO) was subscribed 2 percent as of 10:45 a.m. on first day of bidding.

Panacea Biotech Surges On Fund Raising, Demerger Of Real Estate Arm

Shares of the drugmaker rose as much as 14.83 percent, the most since September 8, to Rs 254 ahead of its board meeting on Wednesday to discuss fund raising and demerger of real estate business.

Infosys Completes Acquisition Of Brilliant Basics; Shares Gain

Shares of the India's second biggest IT company advanced as much as 0.89 percent, the most since September 1, to Rs 892.2 after it completed acquisition of the London-based product design and customer experience (CX) innovator.

"The addition of Brilliant Basics extends Infosys’ digital design services network to include Europe and the Middle East, and enhances the company’s expertise across financial services, retail and telco sectors," Infosys said in a press release.

Gas Companies Gain After Government Renegotiates Australia LNG Price

Shares of the gas distribution companies gained after government renegotiated the pricing of liquefied natural gas (LNG) imported from Australia’s Gorgon project to save more than Rs 10,000 crore.

  • Petronet LNG rose as much as 4.7 percent to Rs 234.5, most since August 16
  • GAIL India jumped 5.4 percent to Rs 400, the most since July 14
  • Gujarat State Petronet climbed 1.2 percent to Rs 195.75
  • Indraprastha Gas rose as much as 2.1 percent to Rs 1,403
  • Mahanagar Gas advanced 0.9 percent to Rs 1,138

Bharat Financial, IndusInd Bank Gain On Merger Talks

Shares of the micro-finance lender Bharat Financial Inclusion surged as much as 2.2 percent to Rs 956. While, private sector lender IndusInd Bank rose as much as 1.7 percent to Rs 1,724 after they signed an ‘exclusivity agreement’ for a potential merger, according to a stock exchange filing.

Opening Bell

Indian shares rose in opening deal with the NSE Nifty 50 Index hitting psychologically important level of 10,000 and the S&P BSE Sensex rising over 150 points led by gains in capital goods and energy shares.

The Sensex rose 0.5 percent to 31,845 and Nifty climbed 0.47 percent to 9,983. Gains were broad-based as mid-cap and small-cap indices rose 0.7 percent.

All the 19 sector gauges compiled by BSE Ltd were trading higher led by S&P BSE Oil & Gas Index's 1 percent gain.

Money Markets Heads-Up

The Indian rupee is seen opening weaker, in line with its Asian peers, after the U.S. dollar rebounded from its lowest in more than two years as Hurricane Irma’s force waned and as North Korea didn’t launch a missile over the weekend.

Gains in the rupee could remain capped also because Friday's data showed India's forex reserves rose $3.6 billion to about $398 billion as of September 1, suggesting the central bank has been intervening in the currency market.

Bonds, on the other hand, could move in a narrow range as traders await the inflation data, which is due on Tuesday for more cues.

F&O Cues

  • Nifty Sept Futures closed with a premium of 15 points versus 24.7 points
  • Sept Nifty Futures OI up 1 percent
  • India VIX closed marginally lower by 0.35 percent at 12.9
  • Sept series highest Call base at 10,000 (OI at 47.3 lakh)
  • Sept series highest Put base at 9,700 (OI at 52.9 lakh, OI up 5 percent)
  • Call strikes 9,900, 10,100 see OI addition
  • Put strikes 9,800, 9,900, 10,000 see OI addition

Earnings To Watch

  • Advanced Enzymes
  • Andrew Yule
  • Cochin Shipyard
  • Dolphin Offshore
  • Gloster, Indian Toners
  • Mawana Sugars
  • Multibase
  • Neuland Labs
  • Schneider Electric

Brokerage Radar

Morgan Stanley on CG Power and Industrial Solutions

  • Maintain Equalweight; hiked target price to Rs 94 from Rs 60
  • Target price hiked to factor in higher valuation multiple given expansion
  • Progress on international business restructuring is positive
  • Expect order inflows to improve gradually
  • Expect margins to be at 7.1 percent for remaining FY18
  • EPS estimates cut by 32 percent and 8 percent for FY18 and FY19 respectively

HSBC on Dr. Reddy’s Labs

  • Maintain Hold; hiked target price to Rs 2,430 from Rs 2,286
  • Target price hiked to factor in Suboxone sales from end of FY19
  • U.S. outlook depends on launches in FY19
  • EPS estimates for FY19 and FY20 increased by 6 percent and 8 percent respectively
  • Earlier guidance of 10-12 U.S. launches in FY18 unlikely

Edelweiss on Apar Industries

  • Maintain Buy and target price of Rs 990
  • Revenue, EBITDA and Net Profit to grow at CAGR of 12 percent, 15 percent and 20 percent respectively over FY17-19
  • Structural outlook for FY19 remains strong
  • To gain from government's focus on power transmission and distribution
  • GST implementation to result in savings of Rs 30 crore over longer term in oil and cable segment

IDFC Securities on Suzlon

  • Maintain Outperform and target price of Rs 28
  • Suzlon to have the leading market share in wind auctions
  • Net profit to grow at CAGR of 17 percent over FY17-19
  • Orders from international market to contribute from FY19
  • Estimates 2.5-3/5-6 gigawatt of wind market in FY18/19

HSBC on Phoenix Mills

  • Maintain Buy and target price of Rs 580
  • Acquisition of Mumbai and Pune assets value accretive and gives unrestricted control
  • Company to benefit from boom in India's retail sector
  • Company's mall preferred destinations for new brands entering India
  • Rental income, Net Profit to grow at CAGR of 13 percent and 30 percent respectively over FY17-19

Credit Suisse on HDFC Bank

  • Maintain Outperform with target price of Rs 1,955
  • Gaining market share with zero impact on asset quality
  • Savings rate cut to keep net interest margins stable
  • Digitisation to drive moderation in cost

Stocks To Watch

  • Century Textiles may explore merger with Grasim after sale of paper division
  • Auto companies in focus on back of increase in cess for big cars and sport utility vehicles
  • Idea Cellular to seek shareholders' nod on October 12 for merger with Vodafone
  • Mahindra & Mahindra launches three-wheeler e-Alfa mini electric rickshaw at Rs 1.12 lakh (ex-showroom Delhi)
  • IL&FS Engineering gets contract termination letter from Paschimanhal Vidyut Vitran Nigam Ltd. Company initiates legal action against termination.
  • Religare Enterprises to divest its stake in Cerestra Advisors for Rs 5.73 crore
  • Onward Technologies enters into a partnership with Dassault Systemes to expand its offerings from engineering services to industry solutions.
  • Shreyas Shipping & Logistics takes delivery of multipurpose vessel. Fleet size rises to 11.
  • RBL Bank partners with LIC Mutual Fund for the launch of its new digital product – Insta Redemption Solution
  • Andhra Bank, Oriental Bank, Syndicate Bank revise marginal cost of funds based lending rate (MCLR)
  • Monsanto to sell its branded cotton seed business to Tierra Agrotech
  • National Company Law Tribunal (NCLT) approves scheme of merger between Sun Pharma and Sun Pharma Medisales, Ranbaxy Drugs, Gufic Pharma and Vidyut Investments
  • Supreme Court refuses to grant interim bail to Unitech promoter Sanjay Chandra
  • Optic fibre companies will be in focus as government to spend Rs 18,792 crore on Phase II of BharatNet
  • Jenburkt Pharmaceuticals board approves buyback of equity shares worth Rs 12 crore at 576 each
  • Shapoorji Pallonji, SSG Capital plan joint bid for Jyoti Structures (Mint)

For a complete list of stocks to watch, click here

IPO Watch

  • Dixon Technologies IPO closes. Subscription at 117.8 times
  • Bharat Road Network IPO closes. Subscription at 1.8 times
  • Matrimony.com IPO opens. Issue price Rs 983-985.

Brokerages on Matrimony.com

  • Motilal Oswal: Subscribe for long-term due to leadership positioning, limited competition and expected pick up in earnings. On annualised EPS based on Q1FY18 earnings, issue is available at P/E of 38 times.
  • KRChoksey: Subscribe rating given the nature of an internet company, leading position in the online match-making services industry, presence in a promising industry and higher profitability compared to peers.
  • IIFL: Subscribe for listing gains. IPO proceeds to be utilised for higher revenues and lower operating costs. Focused expansion of marriage services could also help the company move up the value chain.
  • Angel Broking: Subscribe for mid-to-long-term period. Expect the company to perform better considering strong brand value, leadership position, robust technology, strong user data base and expansion into marriage services.

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 9,991.

Asian stocks rose and the dollar rebounded from its lowest in more than two years as hurricane Irma’s force waned and the United Nations prepared to vote on tougher North Korean sanctions.

Risk appetite also returned to the markets as the chances of Federal Reserve interest rate increases this year receded after the U.S. was struck by the first back-to-back major storms since 1964.

Meanwhile, the offshore yuan declined after China’s central bank was said to have removed a reserve requirement on the trading of foreign-exchange forwards.

Commodities

  • West Texas Intermediate crude added 0.8 percent to $47.84 a barrel in early trading after losing 3.3 percent on Friday.
  • Gold declined 0.7 percent to $1,336.89.
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