Traders on the trading floor of the Motilal Oswal Financial Services office in Mumbai. (Photographer: Vivek Prakash/Bloomberg)

Sensex, Nifty Post Biggest Single-Day Gains In Over Two Weeks

Closing Bell

Indian equity benchmarks snapped three-day losing streak and posted their best single day gains in over two weeks led by Reliance Industries, Infosys and State Bank of India.

The S&P BSE Sensex rose 1.06 percent or 346 points to 33,107 and the NSE Nifty 50 Index advanced 0.96 percent or 97 points to 10,215. The gains were broad-based as the S&P BSE MidCap and S&P BSE SmalCap Indices rose 1 percent each.

All the 19 sector gauges compiled by BSE ended higher led by the S&P BSE Information Technology Index’s 2.16 percent surge.

Countdown

Market Check

  • Indian equity benchmarks were on track to post best single-day gains in over two weeks.
  • The S&P BSE Sensex rose 310 points to 33,071 and the NSE Nifty 50 Index advanced 84 points to 10,202.
  • The broader market indices were in-line with benchmarks with the S&P BSE MidCap and S&P BSE SmallCap indices up 1 percent.
  • From the Nifty 50 basket of shares, 36 were advancing while 14 were declining.
  • Infosys, Bajaj Finance, State Bank of India, Aurobindo Pharma, Reliance Industries, TCS and Vedanta were among the gainers.

Deepan Mehta To BloombergQuint

  • Liquor stocks great play on consumption theme
  • PSU banks will continue to lose market shares to private sector and NBFCs
  • Benefits of compounding visible in NBFCs

Stocks Moving On Heavy Volumes

  • Astral Polytechnik: The Ahmedabad-based PVC plumbing systems maker rose as much as 3 percent to record high of Rs 814.95. Trading volume was 27.9 times its 20-day average.
  • Reliance Naval and Engineering: The Mumbai-based warship and submarine maker fell as much as 14.89 percent to Rs 37.15. Trading volume was 11.1 times its 20-day average.
  • Himatsingka Seide: The Bangalore-based textile products maker rose as much as 5 percent to Rs 337. Trading volume was 1.4 times its 20-day average.
  • Radico Khaitan: The Delhi-based liquor maker rose as much as 18.8 percent to record high of Rs 259.70. Trading volume was 7.6 times its 20-day average.

R Sreeshankar Of Prabhudas Lilladher To BloombergQuint

  • Money flow in equities rose substantially after demonetisation
  • Markets are factoring in uncertainty due to elections in Gujarat and Himachal Pradesh
  • Market will take direction once the election results are out
  • If election results favour NDA there can be a rally in equities

Power Lunch

IT Shares Gain As Rupee Weakens Against Dollar

Shares of information technology companies were trading higher after rupee weakened to 65.32 per dollar against yesterday's close of 65.21. The Nifty IT Index was the top sectoral gainer, up 1.5 percent.

HDIL Gains On Making Part Payment of Dues To Andhra Bank

Shares of the Mumbai-based real estate developer rose as much as 5 percent to Rs 60.25 after Andhra Bank withdrew its petition against HDIL in NCLT after the company made part payment of dues to the bank, HDIL said in a stock exchange notification.

#Ask BQ

Zuari Agro Chemicals Rises On Fund Raising Plan

Shares of the Goa-based agricultural chemical maker rose as much as 7.6 percent, the most since Oct. 30, to Rs 576 after company informed stock exchanges that its board will meet on Nov. 21 to consider raising funds vis issue of equity shares through public issue or right issue or through private placement including qualified institutional placement.

Hot Money

Market Check

  • Indian equity benchmarks extended gains led by Reliance Industries, Infosys and HDFC Bank.
  • The S&P BSE Sensex rose 0.75 percent to 33,007 and Nifty rose 0.7 percent to 10,188.
  • The broader market indices were in-line with the benchmark indices. The S&P BSE MidCap Index was up 0.7 percent and the S&P BSE SmallCap Index rose 0.65 percent,
  • All sector gauges compiled by BSE were trading higher led by the S&P BSE Energy Index's 1 percent gain.
  • From the Nifty 50 basket of shares, 37 were trading higher while 13 were among the losers.
  • Reliance Industries was the top Nifty gainer, up 2 percent. It was followed by Bharti Infratel, UPL, Tata Motors, Infosys and GAIL India.

Trend Spotting

Automotive Axels Surges Post Q2 Earnings

Shares of the Mysore-based auto component maker rose as much as 12.7 percent to record high of Rs 1,195.

Speaking to BloombergQuint N Muthukumar, president and whole-time director at the company said First two quarters were down due to BS conversion and next two quarters look extremely robust. He added that investment in new product lines will help penetrate better into newer markets going ahead.

Block Deal Alerts

  • Power Grid has 66.8 lakh shares worth Rs 138 crore change hands in a block deal on NSE
  • Bharti Airtel has 12.7 lakhs shares change hands in a block
  • Tata Teleservices has 22 lakh shares change hands in a block deal

Buyers and sellers were not immediately known

Source: Bloomberg

Surya Roshini Gains On Winning Order

Shares of the Delhi-based steel producer rose as much as 3.7 percent, the most since Oct. 30, to Rs 356.05 after it won an order worth Rs 89.77 crore for designing, manufacturing and supplying LED street lights under street light National Program for Bikaner in Rajasthan and Telangana, the company said in an exchange notification.

Bhanu Baweja Interview

Bhanu Baweja Of UBS To BloombergQuint

  • Middle-east tensions will not have direct impact on emerging markets
  • Rising crude oil prices positive for emerging markets
  • Expect oil prices to subside below $60 per barrel
  • Still overweight on India in emerging markets space
  • Expect Indian economy to recover to 7 percent growth
  • Believe India is the best growth story for long-term
  • Uncertainty prevails in short term but remain positive on India for long term
  • Expect RBI to reduce rates in couple of months from now
  • Valuations are high across the emerging markets
  • Fair value for India is probably 20% lower from current levels

Reliance Group Shares Extend Selloff On RCom Debt Overhang

Shares of most of the Reliance Group companies promoted by Anil Dhirubhai Ambani extended selloff as group Reliance Communications' failed to pay a coupon on its 2020 dollar notes before the expiry of a grace period on Monday, according to a person familiar with the matter.

Reliance Group companies are highly over leveraged and there is not much visibility of how they plan to reduce debt, market expert Mehraboon Irani told BloombergQuint.

  • Reliance Naval dropped as much as 14.86 percent, the most in over a year, to Rs 37.15
  • Reliance Capital fell 4.86 percent to Rs 402.25
  • Reliance Communications fell 4.46 percent to record low of Rs 9.65
  • Reliance Infrastructure rose 1.2 percent to Rs 426.30
  • Reliance Nippon Life AMC declined as much as 6.4 percent to fall below its issue price of Rs 237

The F&O Show

5Paisa Capital Opens For Trading At Rs 400 On NSE

5Paisa Capital, the demerged company from the IIFL Group, opened for trading at Rs 400 and fell to Rs 380.

On BSE, the stock opened at Rs 650 and fell 5 percent to Rs 617.50.

IndianOpen

Suzlon Energy Falls On Suspending Operations At Blade Making Unit

Shares of the Pune-based wind turbine company fell as much as 6.23 percent to Rs 12.80, its lowest level in a year after it suspended operations at Padubhidri rotor blade manufacturing unit after some workers caused hindrance in the smooth operations of the plant, Suzlon said in an exchange notification.

Opening Bell

Indian equity benchmarks rose after falling for three days in a row led by gains in index heavyweights Reliance Industries, State Bank of India and Larsen & Toubro.

The S&P BSE Sensex rose 0.3 percent to 32,855 and the NSE Nifty 50 Index advanced 0.36 percent to 10,154. The broader market indices were in-line with the benchmark indices, with S&P BSE MidCap and S&P BSE SmallCap Indices up 0.4 percent each.

Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy Index's 0.8 percent gain. On the other hand, the S&P BSE Information Technology Index was the top sectoral loser, down 0.2 percent.

Rupee Opens Lower Against U.S. Dollar

The rupee came under pressure against the dollar today slipping 11 paise to 65.32 after upbeat economic data bolstered prospects of a US interest rate increase next month and beyond.

A higher interest regime pulls investors looking for more returns away from emerging markets assets that are considered risky.

The American unit strengthened overseas, too.

Forex dealers said increased demand for the US currency from importers and the greenback's gains against other currencies overseas put pressure on the rupee.

Yesterday, the rupee had rebounded 21 paise to close at 65.21 against the US currency, ending its two-day slide on fresh bouts of dollar selling even as trade deficit widened alarmingly to a three-year high.

Meanwhile, the benchmark BSE Sensex went up 163.80 points, or 0.49 per cent, to 32,924.24 in early session today.

Source: PTI

Money Market Heads Up

Yield on the Indian benchmark bond dropped 3 basis points yesterday as buyers saw value in picking up bonds at these levels. A decline in oil prices also helped. However, the word on the street is still caution as fundamental risks of higher inflation, fiscal slippage and no rate cuts will continue to weigh on the sentiment. Not to forget the heavy supply of bonds. The 10-year bond yields are biased to stay above 7 percent in the short term.

In the currency market, the rupee is likely to open higher as a selloff in Asian stocks ends. The South Korean won is up 0.6 percent against the dollar and rupee may see too riding on a positive wave. A range of 65-65.30 a dollar is expected in the session.

BQ Heads Up

All You Need To Know

F&O Cues

  • Nifty November futures closed at 10,154, premium of 36 points versus 47.6 points
  • November contracts: Nifty open interest down 2 percent; Bank Nifty open interest down 1 percent
  • India VIX closed 0.7 percent higher at 14.2
  • Max open interest for November series at 10,500 Call (open interest at 58.2lakh, up 3 percent)
  • Max open interest for November series at 10,200 Put (open interest at 45.4 lakh, down 1 percent)

Earnings To Watch

  • Ahluwalia Contracts
  • Gati
  • Honda Siel
  • Bharat Matrimony

Earnings Reaction To Watch

Wonder La (Q2, YoY)

  • Revenue up 1.2 percent at Rs 49.4 crore
  • Net profit down 37.8 percent at Rs 2.3 crore
  • EBITDA up 20.65 percent at Rs 11.1 crore
  • Margin at 22.5 percent versus 18.9 percent

CARE Ratings (Q2, YoY)

  • Revenue up 12.3 percent at Rs 91 crore
  • Net profit up 2 percent at Rs 48.3 crore
  • EBITDA up 11 percent at Rs 66.5 crore
  • Margin at 73.1 percent versus 74.1 percent

New India Assurance (Q2, YoY)

  • Gross written premium up 12.2 percent at Rs 6,489.2 crore
  • Profit up 187.5 percent at Rs 748.3 crore
  • Combined ratio improved to 112.5 percent
  • Solvency ratio stood at 2.24 from 2.04

TD Power Systems (Q2, YoY)

  • Revenue up 19.4 percent at Rs 126 crore
  • Net profit at Rs 5 crore
  • EBITDA at Rs 9 crore
  • Margin at 7.1 percent versus 1.4 percent

Listing Today

  • 5Paisa Capital to list on exchanges. IIFL demerged ‘5Paisa Digital Undertaking’ into its fully-owned subsidiary 5Paisa Capital in 2016.

Trading Changes

  • Tube Investments shifted to B group. Circuit filter revised to 20 percent
  • Kinetic Engineering circuit filter revised to 10 percent
  • Khadim India added to S&P BSE IPO Index

Bulk Deals

Vadilal Industries

  • Radhika Sharma bought 40,000 shares (0.6 percent) at Rs 1,040.2 each
  • Avvanti advisors sold 36,611 shares (0.5 percent) at Rs 1,040 each

Indo Count Industries

  • Param Value Investments bought 10 lakh shares (0.5 percent) at Rs 116.9 each

Control Print

  • India Opportunities Growth Fund sold 84,000 shares (0.5 percent) at Rs 439.32 each

CMM Infra Projects

  • Systematix Shares & stocks sold 1.14 lakh shares (net) at Rs 61.28 each

Brokerage Radar

CLSA on Jubilant Foodworks

  • Maintained ‘Buy’ with price target of Rs 2,200
  • Menu price hike of around 6 percent effected
  • Need to watch out for customer reactions to the menu price change
  • Price change varies across portfolio with prices of entry-level seeing almost no change
  • With lower GST rate on output end-prices dropped 11 percent, which should help volumes

Macquarie on Ceat

  • Maintained ‘Outperform’ with price target of Rs 2,200
  • Margins improved in the previous quarter on the back of volume growth, lower rubber prices and cost-control
  • Expect volume growth to improve further in the second half, led by restocking by the trade channel
  • Expect margins to improve on benign rubber prices, favourable mix and an increase in utilisation
  • Expect Earnings per share to grow at a compound annual growth rate of 15 percent over the financial years till March 2020

Stocks To Watch

  • Reliance Communication said it is not making any payment to lenders for the time being
  • CRISIL to buy entire stake in Pragmatix Services for Rs 56 crore
  • NHAI terminates agreement with Atlanta for Gujarat project
  • RBL Bank acquired additional 2.08 percent stake in Swadhaar Finserve, increasing its holding to 60.48 percent
  • Manaksia Industries to set up wholly-owned subsidiary in India and Tanzania for its agro-commodities business
  • ONGC said that Venezuela’s state-run PDVSA is committed to the arrangement with ONGC Videsh
  • Seamec approved scheme of demerger of EPC and Vessel division of HAL offshore into itself
  • Suzlon eyeing $250 million from stake sale in unit (Mint)
  • Federal Bank in the process of divesting 26 percent stake in its fully-owned NBFC arm Fedfina (Financial Express)

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,144.

The retreat in Asian stocks from historic highs triggered by concerns about outsized gains took a pause on Thursday. Australian bonds climbed after a rally in Treasuries spurred in part by the global equities sell-off.

Here are some key events slated for the remainder of this week:

  • Bank of England officials address the bank’s future on Thursday, while European Central Bank chief Mario Draghi speaks Friday.
  • A string of Fed appearances may further illuminate the FOMC’s commitment to a December hike.

Commodities

  • West Texas Intermediate crude was steady at $55.30 a barrel after dropping 0.7 percent.
  • Gold was little changed at $1,278.74 an ounce.
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