Sensex, Nifty End On A Flat Note; Real Estate Shares Outperform

Indian equity benchmarks were little changed as gains in ITC, HDFC and Hindustan Unilever were offset by losses in Reliance Industries, HDFC Bank and ONGC.

The S&P BSE Sensex rose 0.1 percent to 31,847 and the NSE Nifty 50 Index was little changed at 9,989.

Thirteen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Realty Index's 2.2 percent gain. On the other hand, the S&P BSE Oil & Gas Index was the top sectoral loser, down 1 percent.

• Sobha Developers: The stock gained the most in over 5 months on the back of strong sales numbers for second quarter. The company achieved new sales volumes of 8.61 lakh sq feet valued at 675.1 crore with an average realization of Rs 7,840 per sq ft.
• Rain Industries: The stock rose for a fourth consecutive trading session after wll-known investor Dolly Khanna bought additional 0.77 percent stake in the company increasing her holding to 68,77,710 (2.04%), according to an exchange filing.
• Kirloskar Brothers: The stock gained the most since July 2016 and volumes were nearly 8.8 times its 20-day average after the government reduced tax rate under GST on pump parts from 28 percent to 18 percent.
• Goa Carbon: The stock was locked in a 5 percent upper circuit for fifth consecutive session after the company reported a 7.5 percent increase in calcined petroleum coke sales for the month of September.

• Affordable housing space looking attractive in real estate sector
• Like GAIL India, Petronet LNG and Mahanagar Gas from the gas distribution space
• Like City Union Bank and Federal Bank from south India-based banks

Shares of the Mumbai-based drugmaker rose as much as 8.25 percent, the most since October 4, to Rs 51.85 after the company received an Establishment Inspection Report (EIR) from the U.S. FDA for its Goa facility, the company said in an exchange filing.

The inspection was carried out from 3-7 April 2017.

• Nifty can go up to 10,200 levels before Diwali and short-term support for Nifty is at 9,85.
• Traders can by Sun TV for target price of Rs 840 with stop loss at Rs 770 and Chennai Petro for target of Rs 442 with stop loss at Rs 415.

• JBF Industries: The Mumbai-based textile manufacturer jumped as much as 14.4 percent, the most in over a year, to Rs 212.50. Trading volume was 17.4 times its 20-day average.
• SRF Ltd: The Gurgaon-based textile manufacturer jumped as much as 8.8 percent, the most in over a year, to Rs 1,717. Trading volume was 10.8 times its 20-day average.
• GHCL Ltd: the Noida-based chemical maker rose as much as 8.7 percent, the most in over a year, to Rs 228. Trading volume was 10.4 times its 20-day average.
• HSIL Ltd: The Gurgaon-based sanitary ware manufacturer jumped as much as 9.5 percent, the most in over six months, to Rs 428.80. Trading volume was 10.3 times its 20-day average.

Shares of the Hyderabad-based chemical maker jumped as much as 6.8 percent, the most since September 19, to Rs 192.8 after well-known investor Dolly Khanna raised her stake in the company to 2.04 percent, according to the data available on the BSE.

Dolly Khanna increased stake in the company from 42,68,092 shares (1.27 percent) to 68,77,710 (2.04 percent), according to September 2017 filing.

Shares of the Gurgaon-based food processor rose as much as 3.37 percent, the most since September 29, to Rs 66 after the company launched premium rice based snacks under the brand name KARI KARI.

Shares of the Delhi-based leather apparel exporter jumped as much as 3.65 percent, the most since October 5, to Rs 622.35 after the company won an order for supplying leather to U.S.-based Coach Inc, the company said in an exchange notification.

Dhruvesh Sanghvi On Page Industries

• Inner wear market has size of Rs 20,000 crore and Page Industries is doing Rs 2,000 crore business
• Growth will remain above 20 percent

Ashish Chaturmohta On Page Industries

• Pure discretionary play and it can go up to Rs 24,000

MAS Financial Services' Rs 460 crore IPO was subscribed 197.05 percent as of 11:00 a.m. on day 2 of subscription.

• Retail portion was subscribed 282.84 percent
• QIB portion was subscribed 179.59 percent
• Non-institutional investor portion was subscribed at 28.2 percent
• Source: Company PR

Shares of the consumer durable companies were trading higher led by gains in Titan, Bajaj Electricals and PC Jeweller. The S&P BSE Consumer Durables Index was the top sectoral gainer, up 1.6 percent.

Shares of the jewelery retailers like Tribhovandas Bhimji Zaveri, Titan Company, Gitanjali Gems, Thangamayil Jewellery and PC Jeweller jumped up to 5 percent after the government on Friday relaxed norms for buying gold jewellery above Rs 50,000.

Finance Minister Arun Jaitley on Friday said that people buying jewellery above Rs 50,000 will not be required to mention their PAN or Aadhaar details.

Shares of the Mumbai based active pharmaceutical ingredient maker fell as much as 15.65 percent, the most in over two years, to Rs 328 after its drug to treat spasticity due to multiple sclerosis- Baclofen GRS failed to meet statistical significance.

Shares of the Bangalore-based real estate developer jumped as much as 8.7 percent, the most in over four months, to Rs 425.90 after it sold 8,61,084 square feet of real estate valued at Rs 675.1 crore at an average realisation price of Rs 7,840 per square feet.

The sales volume was up 5.6 percent compared to previous quarter, the company said in an exchange notification on Friday.

Meanwhile, foreign brokerage CLSA in a note said Sobha Q2FY18 pre-sales at 10-quarter high. Sobha’s steady execution and good project portfolio helped to perform well during tough transition times. Expect pre-sales to do well for the next few quarters.

Shares of the telephone service provider in Maharashtra and Goa fell as much as 14.66 percent, the most in 11 months, to Rs 4.95 after Tata Group informed the government on Friday that it plans to shut its wireless business, bringing an end to its 21-year-old phone services venture, The Economic Times newspaper reported citing people aware of details.

• Indian benchmark indices rebounded after opening lower led by gains in ICICI Bank, Tata Motors and Tata Steel
• NSE Nifty 50 Index reclaimed its crucial psychological level of 10,000 and the S&P BSE Sensex rose as much as 0.3 percent
• From the Nifty 50 basket of shares, 32 were trading higher while 18 were among the laggards
• The broader markets were outperforming the benchmarks with S&P BSE MidCap Index advancing 0.4 percent and the S&P BSE SmallCap Index rising 0.5 percent

Shares of the Mumbai-based entertainment channel rose as much as 2.2 percent, the most since September 18, to Rs 533 after it acquired 100 percent stake in two media entities 9X Media and INX Music for Rs 160 crore, the company said in an exchange notification post market hours on Friday.

Indian equity benchmarks edged lower led by losses in Bharti Airtel, Adani Ports and oil marketing companies. However, losses were capped as banking heavyweight ICICI Bank witnessed buying interest.

The S&P BSE Sensex was little changed as 31,814 and the Nifty was down 0.1 percent at 9,970.

Eleven out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Consumer Durables Index's 2.3 percent surge. On the other hand, the S&P BSE Oil & Gas Index was the top sectoral loser, down 0.6 percent.

The bull run in India's sovereign bonds is losing steam as rising inflation and the risk of a wider fiscal deficit have clouded the outlook for Asia's highest yielding securities. This seems to be the broad investor view with institutions like HSBC and Emkay Global Financial Services expecting a further rise in the benchmark yields. The yield on the 10-year note is already up 24 basis points so far this year. Also, with risk of a higher inflation number, the RBI too has little room to reduce rates further.

For the day, buying may resume after three straight sessions of sell-off though the overall sentiment remains weak. A range of 6.74-6.78 percent is likely.

In the currency market, Asians are trading stronger against the greenback as the dollar index declined. China opens after a holiday week but with Korea, Taiwan, Japan and the US closed today, the market may see less action. Rupee may stay in a range of 65.25-65.45 a dollar in the session.

• Not a stellar kind of Diwali but demand is reasonably robust
• Rupee appreciation could have an impact in the longer term
• Cotton prices have moderated due to global bumper crop
• GST challenge is more due to compliance issues
• Major challenge for industry is a stronger rupee

• Nifty October Futures closed with a premium of 23.7 points versus 20 points at 10,003.4
• October Futures-Nifty open interest unchanged, Bank Nifty OI down 7 percent
• India VIX closed lower by 5 percent at 11.1
• October series highest Call base at 10,000 (OI at 40.8 lakh, down 15 percent)
• October series highest Put base at 9,800 (OI at 53.6 lakh, OI up 15 percent)
• October call strikes 9,900, 10,000 see OI unwinding
• October put strikes 9,800, 9,900 & 10,000 see OI addition

Granules India

• Morgan Stanley (France) SA sold 17.67 lakh shares or 0.77 percent equity stake at Rs 119.37 each

Easun Reyrolle Relays

• Dhunseri Petrochem sold 2 lakh shares or 0.65 percent equity stake at Rs 17.45 each

PG Electroplast

• Alok Knit Exports sold its entire stake of 2.86 lakh shares or 1.75 percent equity stake at Rs 325.05 each
• Real Marketing Pvt Ltd bought 2.30 lakh shares or 1.4 percent equity stake at Rs 400.78 each

• MAS Financial Services IPO Day 2. Issue subscribed 1.06 times on Day 1
• Indian Energy Exchange IPO opens. Issue price Rs 1645-1650
• Godrej Agrovet IPO subscribed 95.1 times at end of IPO

Brokerages on Sobha Pre-Sales

• Axis Capital: Company has not reduced price and also ruled out possibility of price correction. Expect further revival in sales as new projects come in Q3FY18
• CLSA: Sobha Q2FY18 pre-sales at 10-quarter high. Sobha’s steady execution and good project portfolio helped to perform well during tough transition times. Expect pre-sales to do well for the next few quarters.

IDFC Securities on Zee Entertainment

• Maintains Outperform rating on the stock and price target of Rs 570
• 9XM is a marginal acquisition which will build incremental capabilities
• Zee could acquire channels in languages such as Kannada, Tamil, Malayalam, Punjabi and Gujarati
• Zee has created a strong business model with disciplined content investments
• Expect Net profit, Ad revenue and Subscription revenue to grow at CAGR of 19 percent, 15 percent and 16 percent over FY17-19

Credit Suisse on Bharti Airtel

• Maintains Underperform rating on the stock with price target of Rs 320
• Expect continued EBITDA erosion for Airtel in India led by GST and competition
• We see a deal to monetise tower assets as high possibility
• Africa has been a bright spot; Expect continued EBITDA improvement
• There could be spectrum purchase opportunities for Airtel which may not come in cheap
• Q3FY18 will see the impact from drop in termination rate; Cut EPS estimates by 9 percent and 4 percent for FY18 anf FY19 respectively

UBS on Zee Entertainment

• Maintains Neutral rating on the stock with price target of Rs 580
• Acquisition cost reasonable as it equals to 9X Media’s annual revenue
• New channels 2-3 percent of Zee's annual revenue; Acquisition to add 6 new channels
• The addition of 6 music channels will enhance Zee's music portfolio

Macquarie on Zee Entertainment

• Maintains Outperform rating on the stock with price target of Rs 615
• Given the huge cash pile the bolt-on acquisition strategy is giving Zee a foothold in niche segments
• Despite ongoing investments, ZEE will continue to deliver 30 percent margins
• No regulatory approvals are required; Acquisition to take channel portfolio to 39 SD channels
• Expect EPS to grow at a CAGR of 21.4 percent over FY17-20

Citi on M&M Finance

• Maintains Buy with target price of Rs 500
• Company set for improvements in profitability and growth trends
• Return on assets to improve over FY18-19 driven by lower credit costs, improving NIMs and lower cost-income ratio
• Company likely to be a key beneficiary of formalization in the medium term

Nomura on Godrej Consumer

• Upgraded to Neutral from Reduce; hiked target price to Rs 990 from Rs 945
• Expect strong growth to continu in Africa and strong rebound in India
• Macro-economic challenges in Indonesia, Latin America and Europe could weigh on company
• Valuations seem fair post recent share price correction

• Oriental Bank of Commerce: RBI has put the bank under Prompt Corrective Action in view of high Net NPA.
• Jaiprakash Associates: Company to demerge some of its assets to a wholly owned subsidiary alongwith debt of Rs 11,834 crore
• Government removes gems, jewellery dealers from the purview of the reporting requirement under the Prevention of Money Laundering Act (PMLA)
• Reliance Industries to sell Pennsylvania Upstream Assets for $126 million to BKV Chelsea. Deal likely to close by end of third quarter of FY18
• Zee Entertainment to acquire 100 percent stake in 9XM and INX for Rs 160 crore
• Adani Enterprises to transfer its renewable power business to associate company Adani Green Energy Ltd. which will eventually get listed on the exchanges.
• SPARC says didn’t reach statistical significance for Baclofen GRS studies
• Shilpa Medicare gets U.S. FDA EIR for Telangana facility
• MindTree board approves scheme of amalgamation of Magnet 360 LLC with self; subject to necessary approvals from NCLT
• Arrow Greentech received patent rights from European Patent Authorities
• SPML Infra completed installation of 220 KV GIS substation at Alipurduar, West Bengal
• Sagar Cement’s September production up 38.1 percent at 2,01,690 million tonnes versus 1,46,051 million tonnes (YoY) and sales up 38.3 percent at 205097 Mts vs. 148313 Mts (YoY)
• Cadila Healthcare gets final approval from U.S. FDA for Dutasteride Capsules
• Texmo Pipes and Products issued 12 lakh equity shares for Rs 22 each to Promoters Shree Padmavati Irrigation Pvt Ltd
• Shoppers Stop sold its entire stake in duty free airport retail business for Rs 6 crore to Nuance Group AG, Switzerland
• Sobha achieved new sales volumes of 861084 sq ft value at Rs 675 crore with an average realization of Rs 7840 per sq ft in Q2
• Apollo Tyres to allot 6.3 crore equity shares at Rs 238 each via. QIP
• TCS clarified that there has been no impact of the purported data breach
• Gujarat Alkalies and Chemicals says CCI imposed a penalty of Rs 1.88 Cr
• Lovable Lingerie to buyback 20 lakh shares at a price of Rs 250 each
• Repro India approved fund raising by issuing shares or warrants to investors other than promoters worth Rs 80 crore
• India Glycols formed a committee to evaluate options for sale of its subsidiary Shakumbari Sugar and Allied Industries
• Goa Carbon sold 22,419.718 MT of calcined petroleum coke in September, up 7.5 percent compared to August
• JMC Projects subsidiary wins an arbitration award of Rs 42.26 crore
• Income tax raids at several premises of Jai Bharat Maruti Group across National Capital Region
• Nabard buys 7 percent more in SIDBI from IDBI Bank for Rs 900 crore (Mint)
• Jindal Stainless said to have raised Rs 800 crore in priority fundingi

For a complete list of stocks to watch click here

• Raghuram Rajan among probables for Nobel Prize in economics
• Jaiprakash Associates approves debt restructuring
• Petroleum dealers to go on nationwide strike on October 13
• Finolex Industries eyes $1 billion sales by 2020, to double capacity
• Asset management companies see SEBI move spawning fund consolidation
• Oil companies wade back into Gulf of Mexico as Nate fizzles
• U.S., Turkey suspend visitor visas as arrest tiff escalates
• New limit for reporting gold transactions soon, says government
• White House lays out immigration demands, including wall funding
• OPEC sees ‘extraordinary’ steps needed for stable market in 2018

• Emmanuel Macron’s ‘startup nation’ bet is paying off
• Daan Utsav: Bringing quality healthcare to underprivileged children
• Yashwant Sinha takes on the Modi government

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.4 percent at 9,977.

Stocks in Shanghai rose as traders returned from holidays, while Turkey’s lira tumbled as relations with the U.S. deteriorate, the key moves in an otherwise lackluster start to the trading week. Markets in Japan, South Korea and Taiwan are closed for holidays.

Commodities

• West Texas Intermediate crude added 0.4 percent to $49.47 a barrel in early Monday trading. The contract decreased 3 percent on Friday.
• Gold rose 0.1 percent to $1,277.30 an ounce.