Sensex, Nifty Extend Record After Best Day In Over Two Months

Indian equity benchmarks clocked their best single-day gains in over two months to resume the record-breaking run.

The S&P BSE Sensex rose 1.16 percent or 442 points to 38,694 and the NSE Nifty 50 index climbed 1.17 percent or 135 points to 11,692.

The benchmarks rose in line with the global peers after the U.S. Federal Reserve reaffirmed a gradual pace of policy tightening, bolstering investor confidence. Fed chairman Jerome Powell signaled that there’s little need to tighten policy aggressively

All 19 sector gauges compiled by BSE ended higher led by the S&P BSE Utilities index’s 2.4 percent gain.

The gains were broad-based as the S&P BSE MidCap index rose 1.07 percent and the S&P BSE SmallCap index gained 0.7 percent.

• Nifty surged nearly 150 points to trade above 11,700.95 for first time.

Summet Bagadia, associate director at Choice Broking recommends trading strategies for Hindalco and Piramal Enterprises.

• Buy Hindalco for target price of Rs 240 with stop loss at Rs 223
• Buy Piramal Enterprises target price of Rs 3,150-3,200 with stop loss at Rs 2,980-2,990.

Target of Tadano joint venture (JV) is to get up the value chain in cranes business, Bharat Madan, group financial controller at Escorts told BloombergQuint in an interview.

Key highlights of the conversation:

• Looking to launch two new products via the JV with Tadano.
• Expect good growth in cranes segment as we start with smaller cranes sales.
• Looking to explore export markets for the cranes business.
• To fund investment in Tadano JV via internal accruals.

Shares of the Gurugram-based railway engineering services provider fell as much as 3.8 percent to Rs 299.20 after it reported April-June quarter earnings.

Key earnings highlights:

• Net profit up 18.5 percent at Rs 82 crore versus Rs 69 crore (YoY)
• Revenue down 6 percent at Rs 310 crore versus Rs 330 crore (YoY)

• NESCO: The Mumbai-based maker of engineering products for railways fell as much as 14.7 percent to Rs 430.10. Trading volume was 38 times its 20-day average.
• MOIL: The Nagpur-based mining company rose as much as 12 percent to Rs 194.85. Trading volume was 30.2 times its 20-day average.
• Suven Life Sciences: The Hyderabad-based drugmaker rose as much as 9 percent to Rs 285.70. Trading volume was 8.4 times its 20-day average.
• Thermax: The Pune based power equipment maker rose as much as 1.6 percent to Rs 1,004.95. Trading volume was 6.7 times its 20--day average.

Shares of the Mumbai-based department store chain operator rose as much as 7.4 percent, the most in over three months, to Rs 558.

A report suggested that Google may tie up with Paytm Mall to invest Rs 3,500-4,000 crore for 7-10 percent stake in Future Retail, The Economic Times reported citing several people aware of the matter.

Indian equity benchmarks soared to new highs led by a rally in banking and metal shares.

The S&P BSE Sensex rose 408 points to 38,657 and the NSE Nifty 50 index climbed 1.01 percent or 117 points to 11,674.

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

Mid- and small-cap stocks were also witnessing buying interest as the S&P BSE MidCap and S&P BSE SmallCap indexes rose 0.8 percent each.

The overall breadth was positive as 1,511 shares were advancing while 1,032 were declining on the BSE.

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Shares of the Sajjan Jindal-led steel maker rose as much as 2.8 percent to a record high of Rs 364.80.

Shares of the Delhi-based construction company rebounded from low levels and surged 13 percent to Rs 15.25 after ICICI Bank informed tribunal that it has settled insolvency against the Punj Lloyd.

• Indian rupee which appreciated to 69.77 per dollar in morning gave up gains and depreciated past 70 per dollar.

Shares of the country's largest drugmaker fell as much as 1 percent to Rs 623.45.

The U.S. FDA has started a surprise inspection at its Halol plant in Gujarat, three people familiar with the matter told BloombergQuint.

• A team of four U.S. FDA is said to be at the Halol plant
• Officials inspecting key manufacturing units at plant
• Sun Pharma declined to comment on the development

Nifty 11,700 strike price call was among the most active option contracts on the National stock Exchange.

Premium on the contract rose 195 percent to Rs 28.65. Over 2.48 lakh shares were added to the open interest which stood at over 31.21 lakh shares.

Click here to see the complete options chain

State Bank of India has largely provided for stressed accounts in power sector and the bank’s balance sheet will look much cleaner going ahead, SBI’s managing director Arijit Basu told BloombergQuint in an interview.

Key highlights of the conversation:

• Confident bank's balance sheet will look much cleaner going ahead
• Resolution process in advance stage for closure of around seven power sector accounts
• RBI's 180-day deadline not to have major impact on number of accounts to be referred under NCLT
• RBI circular has no impact on NPL recognition

Shares of the Mumbai-based drugmaker rose as much as 4.4 percent to record high of Rs 342 after it informed exchanges that the U.S. drug regulator has completed inspection of Panoli plant in Gujarat with two minor observations.

JB Chemicals and Pharmaceuticals said that it will address the observations in next two months.

Shares of the Mumbai-based mortgage lender fell as much as 7.5 percent, the most in over 21 months, to Rs 530.30 after it reported weak April-June quarter earnings.

Key earnings highlights:

• Net interest income (NII) grew 6.6 percent to Rs 980 crore versus Rs 919.4 crore.
• Net profit grew 18.3 percent to Rs 568 crore versus Rs 480 crore.
• Net interest margin (NIM)at 2.34 percent versus 2.52 percent YoY (Despite hike in lending rate during the quarter)
• Gross non-performing assets (NPA) at 1.21 percent versus 0.78 percent (YoY)
• Within individual loans, core retail growth was slow at 9 percent (YoY)

Shares of the Mumbai-based defence equipment maker fell as much as 5 percent to Rs 15.35 after its director Anil Ambani resigned from the company on Aug. 25.

Anil Ambani resigned in compliance with provisions of Section 165 of the Companies Act, 2013, prescribing the limit on directorships to only 10 public companies, the company said in its stock exchange filing.

Shares of the Delhi-based state-run steel maker rose as much as 2.72 percent to Rs 77.45 after the company in annual report said that it has started to exit some of its joint ventures that are either non-operational or non-performing, news agency Press Trust of India reported.

The steel maker is also exploring options to monetise its investment in certain JV companies, report added.

Shares of the Vadodara-based beverage maker rose as much as 4.99 percent to Rs 129.35 after it completed setting up of its new manufacturing facility at Varanasi in Uttar Pradesh, Manpasand Beverages said in an exchange notification.

The plant located at UPSIDC Agropark, Phoolpur, Varanasi is spread over 7 acres with an installed capacity to produce up to 50,000 cases per day, the notification added.

“Do not see any sector offering value from long term point of view,” Nilesh Shah of Kotak AMC To BloombergQuint in an interview.

Key highlights of the conversation:

• Seeing rally in select global markets
• Seeing pick up in domestic economic environment
• Flows have tended to inflate valuation of certain stocks
• Seeing pick up in domestic economic environment
• If investor of stature of Warren Buffett comes to India, it is a big welcome sign
• Warren Buffett investing in India is a sign that Indian economy is doing well

Indian equity benchmarks resumed the up move and rose to record highs led by gains in metal and banking shares.

The S&P BSE Sensex rose 0.68 percent to 38,550 and the NSE Nifty 50 index advanced 0.68 percent to 11,636.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Metal index's 1.5 percent gain. It was followed by the S&P BSE Bankex which rose 1.13 percent.

The mid- and small-cap shares were in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap indexes rose 0.6 percent each.

• Rupee opened higher at 69.77 per dollar against Friday's close of 69.91.

Nifty's sideways movement last week is a part of the broad uptrend and there are no signs of reversal seen on the index, Ruchit Jain, technical analyst at Angel Broking told BloombergQuint in an interview.

Bey highlights of the conversation:

• Nifty likely to touch 11,660 in a day or two, traders can go long with stop loss at 11,520.
• Metals likely to continue outperform, like JSW Steel from this space.
• Cement stocks likely to move higher, like Grasim Industries from this space.

The Indian rupee may rise against the dollar today, tracking gains in other regional currencies after the U.S. Federal Reserve comment that another rate hike was coming next month. Chairman Jay Powell also kept the chance of another move in December above 60 percent.

The currency was nearly unchanged last week. Bloomberg Intelligence expects the RBI to return to its interventionist stance -- selling forex reserves to finance any deficit after risk-off sentiment on emerging markets stabilizes.

The benchmark sovereign bonds will probably take a cue from the rupee.

The worst may be over for government bonds as inflation probably peaked, HDFC Standard said in a call against market consensus.

Equirus Securities on Dr Lal PathLabs

• Initiated ‘Add’ with a price target of Rs 1,100; implying a potential upside of 7 percent from the last regular trade.
• Favorable industry tailwinds to be leveraged by extensive reach.
• New regional lab to help fetch more B2B reach in eastern region.
• Wellness package to offer further thrust on volumes.
• Low-margin hospital laboratory management to help aid volumes.

Equirus Securities on Thyrocare Technologies

• Initiated ‘Long’ with a price target of Rs 714 implying a potential upside of 14 percent from the last regular trade.
• Preventive care to see solid growth aided by extensive network.
• Cost leadership and low-cost model to aid margins.
• See favorable dynamics for Wellness segment.
• Nuclear Healthcare (NHL) laggard in long-term strategy.

JPMorgan on LIC Housing Finance

• Maintained ‘Neutral’ with a price target of Rs 520; implying a potential downside of 9 percent from the last regular trade.
• June quarter review: Asset quality shows pressure in retail and wholesale book.
• Loan growth remains steady at over 15 percent.
• Spreads show improvement QoQ; INDAS impact limited.

Edelweiss on LIC Housing Finance

• Maintained ‘Buy’ with a price target of Rs 787; implying a potential upside of 38 percent from the last regular trade.
• June quarter’s net profit optically in line, operating metrics trends were below expectations.
• Individual loan growth modest; developer book lends support.
• Asset quality under pressure; recovery holds key.

HSBC on Mahindra CIE

• Maintained ‘Buy’; hiked price target to Rs 300 from Rs 290, implying a potential upside of 16 percent from the last regular trade.
• Growth momentum intact despite macro headwinds in Europe business.
• Revenue diversification and capital allocation at core of long-term growth strategy.
• Raise earnings expectation by 3-4 percent on strong reverb quarter and robust outlook.

HSBC on Prestige Estates

• Maintained ‘Buy’; hiked price target to Rs 350 from Rs 345, implying a potential upside of 4 percent from the last regular trade.
• HDFC platform, office space deal with GIC and monetisation of hotel and malls to unlock value.
• Weak collections and unsold finished stock have weighed on the stock.
• Expect new launches in 2018-19 to be new catalyst.

Morgan Stanley on Indian Steel

• Steel industry raised flat products prices by Rs 200/ton and long products prices by Rs 1,500-2,000 per tonne.
• Price hike ahead of expectation helped by global prices and strong domestic demand.
• Margins during July-September period is likely to decline marginally on a sequential basis, reflecting seasonality.

Investec on Prism Jhonson

• Maintained ‘Hold’ with a price target of Rs 121, implying a potential upside of 10 percent from the last regular trade.
• Cement operations in a sweet spot.
• Incremental cost initiatives to enhance profitability further.
• Await sustainable operating metrics before biting the turnaround bullet.
• Like management’s focus on deleveraging and TBK turnaround.

Who’s Meeting Whom

• Crompton Greaves Consumer Electricals to meet DSP Mutual Fund. Motilal AMC and other investors from Aug. 27-31.
• Tata Motors to meet Kotak Group, Axis Mutual Fund and other investors from Aug. 29-30.
• Bosch to meet various investors and fund houses along with Reliance Mutual Fund and First State Capital on August 28.

Insider Trades

• Nocil’s promoter Mafatlal Industries sold 30,000 shares on Aug. 21.
• Ultramarine & Pigments promoter Thirumalai Chemicals acquired 27,500 shares on Aug. 23.
• Nava Bharat Ventures promoter group acquired 11,000 shares on Aug. 23.

(As Reported On Aug. 24)

• Nifty August Futures ended at 11,571.6, with a premium of 14 points versus 12.7 points.
• August series: Nifty open interest (OI) down 2.4 percent and Bank Nifty OI down 1 percent.
• India VIX ended at 12.4, down 2.7 percent.
• Max OI for August series call at 11,600 strike price call option, OI at 39.2 lakh shares, up 11 percent.
• Max OI for August series put at 11,000 strike price put option, OI unchanged at 41.7 lakh shares.

• Goa Carbon: Ajo Emerging Markets Small-Cap Master Fund Ltd. acquired 65,700 shares or 0.72 percent equity at Rs 826.91 each.
• Mahindra CIE Automotive: Promoter Mahindra Vehicle Manufacturers Ltd. sold 30 lakh shares or 0.79 percent equity at Rs 265 each.
• Ramkrishna Forgings: Religare Invesco Asset Management Company Pvt Ltd. sold 1.94 lakh shares or 0.60 percent equity at Rs 615 each.
• Ruchi Soya: Promoter Disha Foundation sold 95.6 lakh shares or 2.86 percent equity at Rs 9.44 each.

Hexaware Technologies

• Citigroup Global Markets Mauritius Pvt Ltd. acquired 38.5 lakh shares or 1.3 percent equity at Rs 447.5 each.
• Societe Generale acquired 41 lakh shares or 1.38 percent equity at Rs 447.5 each.
• HT Global IT Solutions Holdings Ltd. sold 2.5 crore shares or 8.43 percent equity at Rs 447.83 each.

Earnings To Watch

• Jet Airways
• RITES

• Anil Ambani resigned as the director of the financially beleaguered Reliance Naval and Engineering on Aug. 25, “in compliance with provisions of Section 165 of the Companies Act, 2013, prescribing the limit on directorships to only 10 public companies, the company said in its stock exchange filing.
• Bharat Heavy Electricals mulls passing special resolution for share buyback. The annual general meeting is slated to be held on Sep. 19.
• Tata Motors’ JLR says that the electric version of the classic Jaguar E-Type will go into production at the Tata Motor's Jaguar Land Rover factory in the UK and will hit the roads by 2020.
• Manpasand Beverages has completed the setting up of their new manufacturing facility at Varanasi, Uttar Pradesh. The plant located at UPSIDC Agropark, Phoolpur, Varanasi is spread over 7 acres with an installed capacity to produce up to 50,000 cases per day.
• IDBI Bank: Delhi High Court to hear plea against IDBI stake sale to LIC on August 28. The court’s single judge bench of Justice Vibhu Bhakru issued notices to Indian government, central bank and capital markets and insurance regulators seeking views on petition against IDBI Bank’s stake sale to LIC. (Bloomberg)
• Fortis Healthcare extends the long stop date for the acquisition of the entire portfolio of assets of Singapore based RHT Health Trust from Sep. 30 to Dec. 31.
• Ruchi Soya: Patanjali moves NCLT challenging lenders' decision to select Adani Wilmar's offer to take over the debt-laden firm. Mumbai bench of the National Company Law Tribunal (NCLT) to hear Patanjali's petition on Aug. 27. (PTI)
• PTC India announced that it has operationalised the flow of 126 MW inter-state power commissioned capacity to different beneficiary states under government scheme. The power will flow to Uttar Pradesh, Bihar, Jharkhand and Odisha. (PTI)
• Punjab Chemicals and Crop Protection has repaid its entire outstanding debt to Export Import Bank of India (EXIM Bank). The company had received letter of “Settlement of Dues” dated Aug. 24 from EXIM Bank.
• Dewan Housing Finance proposes to issue non-convertible debentures amounting to Rs 1,000 crore plus a green shoe option of Rs 1,000 crore on private placement basis.
• JK Paper: Work in Odisha plant stopped from Saturday due to strike/lockout by contract workers. Odisha is one of the two plants operated by the company.
• Karda Construction is seeking shareholders’ approval to raise borrowing limit to Rs 1,000 crore from Rs 100 crore.
• SAIL set to exit non-performing, non-operational JV companies as per details in its annual report (Mint).
• DLF seeks strategic partner to develop 12-acre Gurugram plot; in talks with PE firms with exposure to NCR for partnership (Economic Times).

• Warren Buffett prepares to sign into Vijay Shekhar Sharma’s Paytm
• Epic fare war crushes profits in booming Indian airline market
• Powell, Trump and Amazon effect: What we heard at Jackson Hole
• Chances of Modi being re-elected now only 50%, says Ruchir Sharma
• Anil Ambani resigns as Reliance Naval’s director
• Capping political parties’ poll spends: Will it work?
• How startups helped save lives in flood-hit Kerala
• Bankers burning midnight oil to resolve Rs 3.8-lakh-crore NPAs
• Lord Krishna to ‘editor Arjun(s)’: Don’t let ’em get away with lies
• Are emerging markets ready for a crisis?
• Do Indian voters mind their representatives getting rich in office?
• Audi unveils electric PB18 e-tron supercar during Monterey car week

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.3 percent to 11,611 as of 6:42 a.m.

Asian stocks started the week with modest gains following a fresh all-time high in their U.S. counterparts Friday, as the Federal Reserve reaffirmed a slow and gradual pace of policy tightening. The yuan extended its advance.

Equities rose in Japan and South Korea, and were little changed in Australia, while futures trading from late Friday indicated gains for stocks in Hong Kong and China.

Currencies

• The yen slipped 0.1 percent to 111.32 per dollar.
• The offshore yuan gained 0.2 percent to 6.7909 per dollar after rising 1.3 percent Friday.
• The Bloomberg Dollar Spot Index fell 0.1 percent.
• The euro added 0.1 percent to $1.1640.

Commodities

• West Texas Intermediate crude decreased 0.2 percent to $68.57 a barrel after jumping 1.3 percent Friday.
• Gold was steady at $1,206.64 an ounce. It advanced 1.7 percent Friday.

Here are some key events coming up this week:

• Earnings are due from companies including Canada’s largest banks and China Construction Bank Corp., ICBC, Pernod Ricard and Dollar General.
• China’s official factory PMI may have dropped again in August, to 51.0 from July’s 51.2, according to economists surveyed by Bloomberg.
• The U.S. economy probably grew in the second quarter at a slightly slower pace. Gross domestic product likely expanded at a 4 percent annualized rate, compared with 4.1 percent in the advance report, economists predict ahead of Wednesday’s report.
• The Bank of Korea sets policy on Friday. Weak jobs growth has cooled speculation of an interest-rate increase, but the central bank has indicated its next move is up.
• It’s a bank holiday in the U.K. the London Stock Exchange is shut.