Sensex, Nifty Gain For Third Day Led By Tata Motors

Indian equity benchmarks rose for a third day fuelled by global growth optimism with Tata Motors leading gains after winning a government contract for 10,000 electric cars.

The S&P BSE Sensex rose 0.68 percent to 31,497 and the NSE Nifty 50 Index advanced 0.72 percent to 9,859.

Sixteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Consumer Durables Index's 2.2 percent gain. On the other hand, the S&P BSE Power Index was the top loser, down 0.5 percent.

Shares of the micro-finance lender fell sharply. The stock fell as much as 5 percent to Rs 899.60.

GAIL India

• Nomura maintains buy and has hiked target price to Rs 600 from Rs 470
• Unified tariff biggest positive for GAIL in recent years
• Unified tariffs to boost overall gas demand
• Hike FY19 EPS estimates by 7 percent
• Expect 37 percent-31 percent earnings growth in FY18/19

PNC Infratech

• Gained the most in nearly a year after it won Rs 2,159 crore highway project in UP
• Stock rose more than 11 percent intra-day
• Volumes at over 11 times the 20-day average

Peninsula Land

• Gained more than 11 percent after it entered into an agreement for sale of its property located in Pune for Rs 226 crore
• Deal is expected to be completed within 7 working days

MOIL India

• Stock jumped nearly 5 percent after it hiked prices of various grades of manganese ore
• Manganese ore prices increased by 7.25 percent
• EMD prices increased by 2.36 percent

Bharat Forge top pick from auto space, can stage 30-35 percent upside from current levels

From trading perspective Hindustan Zinc is better than MOIL

• Wait for a little while to buy into insurance companies
• General insurance companies can give better return at current juncture

• Unichem Labs: The Mumbai-based drugmaker jumped as 5.15 percent, the most since September 27, to Rs 256.4. Trading volume was 15.1 times its 20-day average.
• Techno Electric & Engineering Company: The Kolkata-based engineering services company fell as much as 1.4 percent, the most since September 29, to Rs 321. Trading volume was 11.9 times its 20-day average.
• Jagran Prakashan: The Kanpur based news publisher fell as much as 1 percent to Rs 177. Trading volume was 10.8 times its 20-day average.
• JK Lakshmi Cement: The Delhi-based cement maker declined as much as 1.6 percent to Rs 381. Trading volume was 3.6 times its 20-day average.

• Not expecting rate cut by Reserve Bank of India in the upcoming policy meet
• Critical fact is that inflation is rising which is being supported by weak currency
• Not expecting any rate cut in calendar year 2017

• Indian equity benchmarks trade on a firm note
• The S&P BSE Sensex up 264 points at 31,548 and the NSE Nifty 50 Index gains 76 points to 9,864
• All sector gauges barring the S&P BSE Capital Goods Index trade higher
• The S&P BSE Auto Index top sectoral gainer, 1.3 percent
• From the Nifty 50 basket of shares, 39 advance while 11 decline

• Srikakulam clearance will provide boost
• Has robust pipeline of biosimilars

Shares of the Nagpur-based miner jumped as much as 4.8 percent, the most since September 29, to Rs 200 after it revised prices of various grades of manganese ore and other products for third quarter.

Price of Electrolytic Manganese Dioxide (EMD) has been increased by 2.36 percent.

Shares of the commercial vehicle maker jumped as much as 2.5 percent, the most since September 21, to Rs 126.20 after it announced sales numbers for the month of September.

September sales highlights:

• Total sales rise 28 percent to 15,370 units compared with BloombergQuint estimate of 14,200 units
• Light commercial vehicle sales rise 15 percent to 3,566 Units versus 3,094 units
• Medium and heavy commercial vehicle sales jump 32 percent to 11,804 units versus 8,958 units

Shares of the Mumbai-based automaker jumped as much as 9 percent, the most in over two months, to Rs 1,291 on September sales data.

September sales highlights:

• Passenger vehicle sales jumped 23 percent to 25,327 units from 20,537 units last year
• Commercial vehicle sales advanced 19 percent to 19,201 units from 16,081 units last year
• Total domestic sales rose 19 percent to 50,456 units from 42,545 units
• Exports at 3,207 units versus 3,585 units
• Tractor sales at 44,000 units versus 29,035 last year

The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, remained unchanged at 51.2 in September.

A reading above 50 indicates economic expansion, while one below 50 points toward contraction. The PMI has now registered figures above 50.0 for two successive months.

"September data painted an encouraging picture as the sector continued to recover from the disruptions caused by the introduction of the GST in July," said Aashna Dodhia, economist at IHS Markit, which compiles the survey.

"[But] the lingering effects of recent economic shocks continue to cast a shadow on economic growth as IHS Markit downgrades its real GDP growth forecast to 6.8% for fiscal year 2017/18. It will be interesting to see if India's new economic advisory council will bolster its path to recovery."

(Nikkei)

• Benchmark Indices slip from intraday highs
• NSE Nifty 50 Index trades below 9,850 and the S&P BSE Sensex trades below 31,500
• Nifty Bank slips into the red, falls more than 150 points from day's high
• Selling pressure in SBI and HDFC Bank among banking shares
• Nifty Auto and Nifty Energy up more than 1 percent
• Nifty PSU Bank worst performer of September, down 0.5 percent

Shares of the Pune-based two-wheeler maker jumped as 4 percent, the most since September 18, to Rs 3,212, also its fresh record high after the company reported strong sales in September.

Bajaj Auto sold 428,752 units versus 376,765 units last year, up 14 percent against bloombergQuint estimate of 392,000 units.

Shares of the pharmaceutical company rose as much as 3.7 percent to Rs 2,415 apiece.

The drug maker launched Sevelamer Carbonate Tablets in the U.S. market, according to its exchange notification. The drug is used to lower high blood phosphorus (phosphate) levels in patients who are on dialysis due to severe kidney disease.

SBI Life Insurance rose as much as 5.7 percent to Rs 740 in stock market debut against its issue price of Rs 700.

Shares of the Anil Ambani-led company fell as much as 9 percent, the most since May 31, to Rs 17.45, also its lowest level ever after the company called off its merger with Aircel, raising concerns on company's ability to repay loans.

Shares of the Mumbai-based automaker jumped as much as 6.6 percent, the most since December 2016, to Rs 428 after the company reported strong set of sales in September.

The company reported its highest sales in four-and-a-half years as strict implementation of load restrictions pushed up demand for commercial vehicles.

Sales rose 25 percent in September to 53,965 units.

Tata Motors also won an order for supplying 10,000 electric cars to the government of India.

Indian equity benchmarks moved sharply higher led by gains in automakers.

The S&P BSE Sensex rose 0.8 percent to 31,542 and the NSE Nifty 50 Index advanced 0.9 percent to 9,864.

All the sector gauges compiled by BSE were trading higher led by the S&P BSE Auto Index's 1.7 percent gain.

• Not sure of listing gains because of valuations
• There is value for SBI Life Insurance in long term

The Indian rupee is seen declining in today's session in line with its regional peers as dollar extended its rally. Strong factory data and the prospect for American tax cuts has boosted confidence in the world's largest economy.

Bonds are seen trading in a range ahead of the central bank's monetary policy that is due tomorrow. RBI is expected to keep its benchmark rate at a seven-year low amid slowing growth.

• Nifty Oct Futures premium at 12 points versus 18 points previous day
• October Futures-Nifty OI up 4 percent, Bank Nifty OI 6 percent
• India VIX closed lower by 5.2 percent at 12.48
• October series highest Call base at 10,000 (OI at 48.3 lakh, up 19 percent)
• October series highest Put base at 9,700 (OI at 35.2 lakh, OI up 4 percent)
• October call strikes 9,900, 10,000 and 10,100 see OI addition

• October put strikes 9,600, 9,700 and 9,800 see OI addition

• SBI Life Insurance, a subsidiary of the country’s largest lender State Bank of India, will make its stock market debut after raising Rs 8,400 crore via IPO.

Jefferies on ONGC

• Maintains Buy Rating with a price target of Rs 200
• Expect another revision of 10-15 percent in the next 12 months
• Expect natural gas EBITDA to rise 39 percent over FY17-21
• Oil prices still more critical; expect oil prices to rise to $65 a bbl

Morgan Stanley on Titan

• Maintains Overweight on Titan, hikes target price to Rs 720
• Jewellery segment revenues to rise 2.5 times by FY22
• Prevention of money-laundering act to weigh on jewellery sales
• Titan's business has remained resilient with continuing strong market share gains
• Expect revenue, operating profit, and net profit growth of 14 percent, 10 percent and 11 percent respectively in QFY18

IDFC Securities on Coal India

• Initiates Outperform rating with target price of Rs 310
• Back on growth path after subdued FY17; expect coal price and volumes to grow at CAGR of 3 percent and 6 percent respectively over FY17-20
• Rise in coal prices to lead EBITDA CAGR of 21 percent over FY17-20
• Net sales and profit to grow at CAGR of 9 percent and 17 percent over FY17-20
• Expect dividend per share of Rs 19 and Rs 23 for FY18 and FY19 respectively
• Return on equity to double to 82 percent in FY20

Brokerages on Dr Reddy’s Renvela Launch

• Morgan Stanley: Estimate sales of $70 – 80 milllion assuming 30 percent market share, 50 percent price drop. Product will have high margins of above 80 percent
• Nomura: Expect sales of $30 million in FY18 and $40 million in FY19
• Goldman Sachs: gRenvela can add around 5 percent to net income over next 12 months

Nomura on GAIL (India)

• Maintains Buy; hiked price target to Rs 600 from Rs 470; Potential Upside of 43 percent
• Unified tariff biggest positive for GAIL in recent years
• Unified tariffs to boost overall gas demand
• Hike FY19 EPS estimates by 7 percent
• Expect 37 percent and 31 percent earnings growth in FY18 and FY19 respectively

Credit Suisse on Pidilite Industries

• Maintains Outperform; cut price target to Rs 910 from Rs 920
• Input cost headwinds to impact near term margins; cut EPS estimates by 3 percent for FY18
• Expect second quarter to see recovery in sales; stronger recovery in second half FY18 aided by a weak base of demonetisation
• Recent correction provides a good entry point
• Expect 9 percent sales growth, 220 basis points decline in margins and 5 percent decline in net profit in second quarter.

Brokerages on Monetary Policy

• JPMorgan: RBI likely to adopt “wait and watch” strategy due to increased macroeconomic and inflation uncertainty. Markets likely to focus on the tone and guidance of policy, and how RBI looks at the various moving parts.
• Edelweiss: Expect RBI to leave rates unchanged while maintaining a dovish bias. Continue to expect another 25 basis points rate cut in FY18, although more may be warranted.

• Reliance Communications calls off merger with Aircel
• Dr. Reddy’s launches Sevelamer Carbonate Tablets in U.S. market
• Energy Efficiency Services Ltd. (EESL) to procure 10,000 electric vehicles from Tata Motors
• Power Grid enters into term loan agreement for Rs 3,270 crore with ICICI Bank
• Alok Industries: ECL Finance agrees to give Rs 150 crore as interim finance to the company
• Radha Madhav Corporation to pay Rs 35.25 crore under one-time settlement scheme to Bank of Baroda
• GP Petroleums to shift operations of its Daman plant to Vasai plant
• SH Kelkar acquires 100 percent stake in VN Creative Chemicals Pvt Ltd
• Jagran Prakashan: HDFC MF increases stake in the company to 7.09 percent from 5.01 percent
• Government sets domestic natural gas price at $2.89 per MMBTU for October-March (Bloomberg)
• Hinustan Unilever’s Board agrees to divest its entire stake in Kimberly-Clark Lever in order to focus on its core business
• Phoenix Mills acquires further 6.07 percent stake in Offbeat Developers for Rs 34 crore
• Bombardier inks $1.7 billion deal with SpiceJet for the sale of 50 aircrafts (Bloomberg)
• Jindal Poly Films’ Netherlands unit completes acquisition of Apeldoorn Flexible Packaging Holding for 86.9 million euros
• Punjab Chemicals sold its Argentina unit through its subsidiaries
• Jubilant Life Sciences receives approval from Health Canada for RUBY Elution System and proprietary RUBY consumable accessories
• Peninsula Land enters into an agreement for the sale of company’s property located in Pune for Rs 226 crore
• Indiabulls Ventures to raise Rs 2,000 crore via rights issue

• Maruti Suzuki: Sales at 163,071 units versus 149,143 units last year, up 9 percent (estimate of 162,000)
• Tata Motors: Sales at 57,852 units versus 48,648 units last year, up 19 percent (estimate of 54,100)
• Bajaj Auto: Sales at 428,752 units versus 376,765 units last year, up 14 percent (estimate of 392,000)
• Eicher Motors: Royal Enfield sales at 70,431 units versus 57,842 units last year, up 22 percent (estimate of 71,000)
• Eicher VECV sales at 6,083 units versus 4,843 units last year, up 26 percent (estimate of 5,000 units)

• Deadliest shooting in U.S. history: At least 58 killed at Las Vegas concert
• U.S. body clock geneticists take 2017 Nobel Prize for Medicine
• Trump faces leadership test in deadliest U.S. mass shooting
• Mumbai Metro-3 likely to be completed by December 2021
• Fitch lowers India’s growth forecast to 6.9% for current fiscal
• Idea-Vodafone merger likely to be completed by March
• GIC seeks CCI nod for Rs 9,000 crore deal with DLF promoters
• Ola raises $2 billion from SoftBank, Tencent
• The collegium should reveal its reasons for Justice Jayant Patel’s transfer
• Daan Utsav: Fighting childhood cancer with food and nutrition
• Cadbury Dairy Milk maker eyes India’s hinterland to expand business

Good Morning

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, was up 0.2 percent at 9,856.

Strong factory data and the prospect for American tax cuts boosted confidence in the global economy, lifting the dollar and emboldening bulls who drove U.S. equities to fresh record highs and pushed up shares in Asia.

Among the key events this week:

• Australia’s central bank on Tuesday is forecast to keep its benchmark interest rate unchanged at a record low of 1.5 percent.
• Investors will monitor progress toward forming coalition governments in Germany and New Zealand after elections last month left no party in either country with a majority.
• Other American data this week include trade, durable goods and Friday’s September non-farm payrolls report, which may have less predictive power than usual for the economic outlook due to likely distortions from hurricanes that hit from late August.
• The Reserve Bank of India on Wednesday is projected to keep benchmark rates unchanged.
• China is due to report monthly foreign-exchange reserves Thursday.
• Fed Chair Janet Yellen speaks at an event on Wednesday.
• Minutes of the last ECB meeting are the European economic highlight this week.

Commodities

• Gold was little changed at $1,272.53 an ounce, after falling 0.7 percent on Monday.
• West Texas Intermediate crude slipped 0.2 percent to $50.47 a barrel after sliding 2.1 percent on Monday.