Sensex, Nifty Rise For Third Day Led By Reliance Industries, ICICI Bank     

Indian equity benchmarks rose for third day in a row led by Reliance Industries, ICICI Bank, HDFC and State Bank of India.

The S&P BSE Sensex rose 0.85 percent or 297 points to 35,162 and the NSE Nifty 50 Index advanced 0.7 percent or 72 points to 10,585.

"The result season has been in-line so far but we need even better numbers because valuations are expensive," A. K. Prabhakar, head of research at IDBI Capital Market Services told Bloomberg over the phone.

All 19 sector gauges compiled by BSE ended higher led by the S&P BSE Energy Index's 1.95 percent gain. Consumer Discretionary Goods & Services, Basic Materials, Industrials, Bankex, Capital Goods and Realty Indices on the BSE also rose over a percent each.

The mid- and small-cap shares outperformed their larger peers as the S&P BSE MidCap Index rose 1.14 percent and the S&P BSE SmallCap Index climbed 1.7 percent.

Yield on the government of India's 10-year 7.17 percent bond expiring in January 2028 fell as much as 0.7 percent or 3 basis points to 7.86 percent after a government official said that the government will go ahead with bond buyback despite borrowing cut.

Delta Corp: The Mumbai-based casino chain operator rose as much as 8.2 percent to Rs 245 after it reported September quarter earnings.

Revenue up 38.6 percent at Rs 201.4 crore.

Net profit up 11.1 percent at Rs 48.1 crore.

Ebitda up 16.2 percent at Rs 76.2 crore.

Margin at 37.8 percent versus 45.1 percent.

Other Expenditure at Rs 63.2 crore versus Rs 37 crore.

Hathway Cables: The Mu8mbai-based cable television service provider rose as much as 8.3 percent to Rs 31.20 on report that Reliance Industries may buy controlling stake in the company.

Sterlite Tech: The Pune-based optical fiber maker rose as much as 7 percent to Rs 340 after it bagged Rs 3,500 crore order for designing, building, and managing Indian Navy’s digital network.

HEG: The Madhya Pradesh-based graphite electrode maker rose as much as 15 percent to Rs 4,955 on the back of heavy volumes. Trading volume was volumes at 5.7 times its 20-day average.

Shares of airline operators advanced after Brent crude fell 0.5 percent to $80.38 per barrel.

• Jet Airways rose 6 percent to Rs 213.95
• SpiceJet advanced 2.6 percent to Rs 72.50
• InterGlobe Aviation climbed 4.8 percent to Rs 861

Indian equity benchmarks held on to gains led by Reliance Industries, ICICI Bank, HDFC and State Bank of India.

The Sensex rose 287 points to 35,154 and the NSE Nifty 50 Index climbed 75 points to 10,588.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Oil & Gas Index's 1.9 percent gain.

Overall market breadth was positive as 1,748 shares were advancing while 790 were declining on the BSE.

• To fund bond buyback from surplus small savings.
• Will not fund bond buyback from market borrowings.

Source: Government official to Bloomberg

Shares of the Kerala- based private lender rose as much as 6 percent, the most in nearly three months, to Rs 80.35 after its net profit beat Bloomberg consensus estimates in July-September quarter.

Key earnings highlights:

• Net profit at Rs 266 crore versus estimate of Rs 256 crore
• Net interest income up 13.6 percent at Rs 1,022 crore versus Rs 899 crore (YoY)
• Net non-performing assets as a percentage of total advances at 1.78 percent versus 1.72 percent (QoQ)
• Gross non-performing assets as a percentage of total advances at 3.11 percent versus 3.00 percent (QoQ)
• Provisions at Rs 288.8 crore versus Rs 199.2 crore (QoQ); Rs 176.8 crore (YoY)

Indian rupee reversed losses and appreciated as much as 0.17 percent or 13 paise to 73.70 per dollar.

Earlier in the day, rupee opened flat and fell as much as 0.2 percent to 73.96 per dollar.

Shares of the country's largest two-wheeler maker rose 0.2 percent to Rs 2,887 ahead of its July-September quarter earnings.

Below are Bloomberg consensus estimates for Hero MotoCorp:

• Revenue seen at Rs 9,030 crore versus Rs 8,362 crore, up 8 percent.
• Ebitda seen at Rs 1,400 crore versus Rs 1,456 crore, down 4 percent.
• Profit seen at Rs 944 crore versus Rs 1,010 crore, down 6.5 percent.
• Margin seen at 15.5 percent versus 17.4 percent.

Shares of the country's second largest IT company rose 0.40 percent to Rs 701.50 ahead of its July-September quarter earnings due late in the day.

Below are Bloomberg consensus estimates for Infosys:

• Dollar revenue seen up 2 percent at $2,888 million versus $2,831 million (QoQ)
• Income from operations seen rising 5.8 percent at Rs 20,244 crore versus Rs 19,128 crore (QoQ)
• EBIT seen up 8.8 percent at Rs 4,935 crore versus Rs 4,537 crore (QoQ)
• EBIT margins seen at 24.4 percent versus 23.7 percent (QoQ)
• Profit seen up 11.9 percent at Rs 4,042 crore versus Rs 3,612 crore (QoQ)

• South Indian Bank has 27 lakh shares change hands in a single block. Stock up 13.5 percent at Rs 14.30.
• Adani Ports has 19.6 lakh shares change hands in a single block. Stock up 1.11 percent at Rs 325.
• Kotak Mahindra Bank has 10 lakh shares change hands in a single block. Stock down 0.4 percent at Rs 1,166.

Buyers and sellers were not immediately known

Source: Bloomberg

• Trident: The Ludhiana-based textile maker fell as much as 2.8 percent to Rs 67.15. Trading volume was 17 times its 20-day average.
• Rupa & Co: The Kolkata-based innerwear maker rose as much as 18.81 percent, the most in over a year, to Rs 320.30. Trading volume was 14 times its 20-day average.
• Gillette India: The Mumbai-based shaving cream, blade and brush maker rose as much as 1.21 percent to Rs 6,680.75. Trading volume was five times its 20-day average.
• Hatsun Agro Products: The Chennai-based dairy products maker rose as much as 2.77 percent to Rs 628. Trading volume was 8.4 times its 20-day average.

Nifty's 10,500 put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract fell 25 percent to Rs 90. Over 10.98 lakh shares were added to the open interest which stood at 31.02 lakh shares.

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• ONGC has 10 lakh shares change hands in a single block. Stock up 2.3 percent at Rs 164.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Mumbai-based travel company rose as much as 6.36 percent to Rs 214.95 after it fixed Oct. 26 as the record date for determining shareholders who will receive shares in Cox & Kings Financial Service Ltd., according to its exchange notification.

Indian equity benchmarks extended gains led by HDFC, ICICI Bank, Infosys and Mahindra & Mahindra.

The Sensex advanced 296 points to 35,163 and the Nifty 50 Index climbed 80 points to 10,592.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Basic Materials Index's 1.6 percent gain.

The small- and mid-cap stocks were witnessing buying interest as the S&P BSE MidCap Index rose 0.8 percent and the S&P BSE SmallCap Index gained 1.6 percent.

• Ashok Leyland has 11.2 lakh shares change hands in a block deal. Stock up 3.63 percent at Rs 121.30.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the Thrissur-based private sector lender rose as much as 17 percent to Rs 14.71 after its profit rose over 16 times in September quarter.

Key earnings highlights:

• Net Interest Income up 0.7 percent at Rs 506.5 crore.
• Net profit at Rs 70.1 crore versus Rs 4.3 crore.
• Provisions at Rs 204.7 crore versus Rs 231.5 crore. (QoQ)
• GNPA at 4.61 percent versus 4.54 percent. (QoQ)
• NNPA at 3.16 percent versus 3.27 percent. (QoQ)

Shares of the Mumbai-based casino chain operator rose as much as 7.75 percent, the most in over two months, to Rs 244 after it reported September quarter earnings.

Key earnings highlights:

• Revenue up 38.6 percent at Rs 201.4 crore.
• Net profit up 11.1 percent at Rs 48.1 crore.
• Ebitda up 16.2 percent at Rs 76.2 crore.
• Margin at 37.8 percent versus 45.1 percent.
• Other Expenditure at Rs 63.2 crore versus Rs 37 crore.

Shares of Hathway Cable and Den Networks rose as much as 8.33 percent and 8.22 percent each respectively after a report suggested that Reliance Industries may soon buy controlling stake in both the companies, The Economic Times reported citing unidentified people with knowledge of the development.

RIL is likely to own more than 25 percent each in the two companies giving it the ability to control developments and get a seat on the board, the report added.

Shares of the country's second largest private sector lender rose as much as 2.12 percent to Rs 320 after the Reserve Bank of India approved appointment of Sandeep Bakshi as MD and CEO of ICICI Bank.

Shares of the Delhi-based dairy company were locked in a five percent lower circuit at Rs 10.32.

The company is said to be taken to the National Company Law Tribunal due to a default to the tune of Rs 1,200 crore, newspaper The Hindu Businessline reported citing sources. Kwality has been taken to the tribunal by a leading foreign bank that will be joined by others soon after the case is filed, on October 16, the report added.

Shares of the Mumbai-based news channel operator rose as much as 16.57 percent to Rs 29.25 after its profit more than doubled in September quarter.

Key earnings highlights:

• Revenue up 35.5 percent at Rs 168.7 crore.
• Net profit at Rs 17.3 crore versus Rs 1.8 crore.
• Ebitda up 53.2 percent at Rs 40.9 crore.
• Margin at 24.2 percent versus 21.4 percent.

Shares of the Mumbai-based non-banking mortgage lender rose as much as 2.95 percent to Rs 976.85 after its profit met Bloomberg consensus estimates in September quarter.

Key earnings highlights:

• Net profit up 21.2 percent at Rs 1,044.2 crore.
• Provisions at Rs 40 crore versus Rs 65 crore (QoQ)
• Gross NPA at 0.77 percent versus 0.78 percent (QoQ)
• Net NPA at 0.58 percent versus 0.59 percent (QoQ)

Meanwhile, the brokerages have maintained their stance on Indiabulls Housing after it reported earnings.

• JPMorgan has maintained ‘Overweight’ with a price target of Rs 1,600.
• Macquarie maintained ‘Outperform’ with a price target of Rs 1,400.

Indian equity benchmarks edge higher paced by gains in Indiabulls Housing Finance after its profit rose in line with Bloomberg consensus estimates in September quarter.

The S&P BSE Sensex rose 0.4 percent or 153 points to 35,018 and the NASE Nifty 50 Index 0.4 percent or 42 points to 10,554.

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

The mid- and small-cap shares were also witnessing buying interest as the S&P BSE MidCap Index rose 0.9 percent and the S&P BSE SmallCap Index advanced 1 percent.

• Indian rupee opened higher at 73.77 per dollar against yesterday's close of 73.82.

India's sovereign bonds are set to gain for a fifth session after the central bank announced a plan to buyback bonds in its effort to support the market.

Traders will also be focusing on the Rs 10,800 crore of state bond sales in the session. Yield on the 10-year note that fell 6 basis points in the last session could see further decline. Dealers are expecting a range of 7.85-7.95 percent on the benchmark bond today.

In the currency market, implied opening from forwards suggest the pair may open at around 73.7490 a dollar. Most Asian currencies are trading in the green with the South Korean won up 0.5 percent. Traders expect some improvement in the rupee and a range of 73.50-74 in the day.

HSBC on Motherson Sumi

• Maintained ‘Buy’; cut price target to Rs 350 from Rs 400, implying a potential upside of 40 percent from the last regular trade.
• Cut earnings estimate on slower global and domestic market growth.
• Investors ignoring positives from potential acquisition, rupee depreciation and new emission norms.
• Stock price correction creates attractive entry point.

Jefferies on Indian Energy Exchange

• Maintained ‘Buy’ with a price target of Rs 2,050, implying a potential upside of 25 percent from the last regular trade.
• September quarter saw a double-digit volume growth of 18 percent.
• CERC order sets the tone for stable pricing.
• IEX to benefit from volume growth on stable pricing and cost base.

Brokerages On Indiabulls Housing Finance

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 1,600, implying a potential upside of 69 percent from the last regular trade.
• Another consistent quarterly earnings delivered.
• ALM is conservative and the company should be able to ride out current stress in money markets.
• Remains top pick in NBFC space.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,400, implying a potential upside of 48 percent from the last regular trade.
• September quarter was line. No concerns were seen on liquidity front.
• Growth to slow down as mgmt. has cut loan growth guidance for the current financial year to 20 percent.
• Think liquidity concerns are overdone; recent correction an opportunity to add.

CLSA

• Maintained ‘Buy’; cut price target to Rs 1,500 from Rs 1,700, implying a potential upside of 58 percent from the last regular trade.
• Steady, quality growth in September quarter.
• Liquidity high but growth to moderate.
• Cut earnings estimate by 3-5 percent to factor weaker topline.

Brokerages On IndusInd Bank

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 1,975 from Rs 2,100, implying a potential upside of 21 percent from the last regular trade.
• Net interest margins are under pressure as liquidity tightens.
• Mgmt. confident of no incremental provision other than Rs 275 crore made in the July-September quarter.
• Cut price target to factor in 20 basis points rise in credit cost for IL&FS exposures and rising bond yields.

PhillipCapital

• Maintained ‘Buy’ with a price target of Rs 2,170, implying a potential upside of 33 percent from the last regular trade.
• Continue to report strong performance led by robust growth in advances.
• Lag impact of re‐pricing loan has been exerting pressure on NIM.
• Merger with Bharat financial to realise synergies in funding cost.

Deutsche Bank Research

• Maintained ‘Buy’ with a price target of Rs 2,150, implying a potential upside of 32 percent from the last regular trade.
• Strong growth; Earnings miss on higher provisions.
• IL&FS exposure provided; Asset quality steady otherwise.
• NIMs decline eight basis points on a sequential basis as deposit cost rise faster.

• Nifty October futures closed trading at 10,517, premium of five points.
• Nifty October open interest (OI) down 2.8 percent; Nifty Bank Oct OI up 1.2 percent.
• Max open interest for October series at 11,000 strike value call option (open interest at 48.5 lakh shares)
• Max open interest for October series at 10,000 Strike value put option (open interest at 34.8 lakh shares)

Insider Trades

• JSW Steel promoter group acquired 3.16 lakh shares from Oct. 10-11.
• Cox & Kings promoter acquired 56,400 shares on Oct. 11.
• Advanced Enzyme Technologies promoter group Atharva Green Ecotech LLP sold 55 lakh shares on Oct.12.

(As reported on Oct. 15)

Trading Tweaks

• Ashapura Intimate Fashion placed under ASM Framework
• Goa Carbon price band revised to 10 percent.
• State Trading Corporation of India price band revised to 10 percent.
• Mangalam Organics price band revised to 5 percent.

Indiabulls Housing Finance (Q2, YoY)

• Net profit up 21.2 percent at Rs 1,044.2 crore.
• Provisions at Rs 40 crore versus Rs 65 crore (QoQ)
• Gross NPA at 0.77 percent versus 0.78 percent (QoQ)
• Net NPA at 0.58 percent versus 0.59 percent (QoQ)

Also Read: Q2 Results: Indiabulls Housing Finance’s Profit Rises 21.2%; Meets Estimates

South Indian Bank (Q2, YoY)

• Net Interest Income up 0.7 percent at Rs 506.5 crore.
• Net profit at Rs 70.1 crore versus Rs 4.3 crore.
• Provisions at Rs 204.7 crore versus Rs 231.5 crore. (QoQ)
• GNPA at 4.61 percent versus 4.54 percent. (QoQ)
• NNPA at 3.16 percent versus 3.27 percent. (QoQ)

Delta Corp (Q2, YoY)

• Revenue up 38.6 percent at Rs 201.4 crore.
• Net profit up 11.1 percent at Rs 48.1 crore.
• Ebitda up 16.2 percent at Rs 76.2 crore.
• Margin at 37.8 percent versus 45.1 percent.
• Other Expenditure at Rs 63.2 crore versus Rs 37 crore.

Zee Media Corporation (Q2, YoY)

• Revenue up 35.5 percent at Rs 168.7 crore.
• Net profit at Rs 17.3 crore versus Rs 1.8 crore.
• Ebitda up 53.2 percent at Rs 40.9 crore.
• Margin at 24.2 percent versus 21.4 percent.

PITI Engineering (Q2, YoY)

• Revenue up 106.8 percent at Rs 172.7 crore.
• Net profit up 139.4 percent at Rs 7.9 crore.
• Ebitda up 109.8 percent at Rs 25.8 crore.
• Margin at 14.9 percent versus 14.7 percent.

Reliance Industrial Infrastructure (Q2, YoY)

• Revenue up 7 percent at Rs 21.3 crore.
• Net profit down 22.2 percent at Rs 2.1 crore.
• Ebitda down 21.6 percent at Rs 2.9 crore.
• Margin at 13.6 percent versus 18.6 percent.

Nifty Earnings To Watch

• Infosys
• Hero MotoCorp

Other Earnings To Watch

• Crisil
• Federal Bank
• Jammu & Kashmir Bank
• Mahindra CIE Automotive
• Shakti Pumps

• BP CEO Bob Dudley said that the company was in talk with Reliance Industries on starting an Indian downstream business, but it will not compete in the petrochemicals segment. (Bloomberg News)
• TV Today Network’s arm gets two separate notice demands from the Income Tax department worth Rs 69.24 crore for the assessment years 2013-14 and 2014-15.
• Globus Spirits announces the resumption of operations and commencement of commercial production of Bihar unit from Oct. 9. This unit has a production capacity of 80,000 bulk litre per day.
• NTPC to discontinue operations of Badarpur Thermal Power Station, New Delhi from Oct. 15. The station has a total installed capacity of 705MW.
• OCL India board approves merger of company, Dalmia Cement East Limited and other associates into Odisha Cement Limited (ODCL). Post-merger, ODCL shall be renamed as OCL India Limited. Oct. 26 has been fixed as the date for implementation for this merger.
• Gujarat Gas to consider stock split on Nov. 3.
• Cox & Kings board fixes record date as Oct. 26 for determining shareholders who will receive shares in Cox & Kings Financial Service Ltd. Pursuant to the share entitlement ratio, one share of the resulting company shall be credited for every three shares held by the existing shareholders of the company.

• India’s trade gap narrows to five-month low
• Why data localisation might lead to unchecked surveillance
• Visa among companies said to miss deadline to store Indian data
• Proxy firms behind Parekh’s scare now trigger dissent against Birla
• What India’s top three mutual funds bought and sold in September
• Modi warns oil producers against high prices
• MJ Akbar wants to silence victims with intimidation, says Priya Ramani
• Online retailers mint Rs 15,000 crore in five days of festive sale
• Insurers grapple with how to cover HIV/AIDS
• Global equity rout derails IPOs from Spain to Hong Kong, India
• SoftBank dive hits $22 billion
• Paul Allen, billionaire who co-founded Microsoft, dies at 65
• IL&FS built a road to riches for some

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was little changed at 10,527 as of 7:01 a.m.

Asian stocks chalked modest gains at the open Tuesday as U.S. equity index futures advanced, with investors balancing the outlook for global growth and earnings against geopolitical flareups and technical weakness. The dollar touched a two-week low against peers, while Treasury yields steadied.

Share indexes rose in Japan, Australia and South Korea, and futures ticked higher in China and Hong Kong.

Here are some key events coming up this week:

• APEC finance ministers meet in Port Moresby, Papua New Guinea.
• China’s new yuan loans may have risen to 1.36 trillion yuan ($196 billion) in September from August’s 1.28 trillion yuan as officials sought to buoy economic growth.
• Third-quarter GDP for China comes Friday, with headline growth forecast to slow to 6.6 percent year on year from 6.7 percent, in addition to last month’s retail sales and factory output.
• Minutes from the Federal Reserve’s latest policy meeting are due on Wednesday, with investors focused on projections for further interest rate rises.
• Goldman Sachs, Morgan Stanley and Netflix are among companies reporting this week.
• Euro-area governments, including Italy, must turn in fiscal budget proposals to the European Commission by midnight Monday.

Currencies

• The yen was steady at 111.81 per dollar after hitting the strongest in four weeks Monday.
• The offshore yuan traded at 6.9211 per dollar.
• The Bloomberg Dollar Spot Index was steady after falling 0.2 percent Monday.
• The euro traded at $1.1585.

Commodities

• West Texas Intermediate crude was little changed at $71.84 a barrel.
• Gold was stable at $1,227.79 an ounce after reaching the highest since late July.
• LME copper declined 1 percent to $6,235.50 a metric ton.