Sensex, Nifty Clock Best Weekly Gain In Over Two Years

Indian equity benchmarks rebounded strongly along with rupee after crude fell for fifth day in a row amid strong global cues.

The S&P BSE Sensex rose 1.7 percent or 580 points to 35,012 and the NSE Nifty 50 Index climbed 1.66 percent or 173 points to 10,553.

The benchmarks clocked their best weekly rally in two years after stocks extended gains globally as the boost to sentiment came after Bloomberg News reported U.S. President Donald Trump is interested in reaching an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina this month and has asked key officials to begin drafting potential terms.

For the week Sensex surged 4.98 percent and the Nifty 50 Index rose 5.2 percent.

In today’s trade, sixteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Auto Index’s 4 percent surge on the back of October auto sales numbers. On the flipside, S&P BSE IT Index was top loser, down 1.3 percent.

India’s non-bank lenders may default on repaying debt raised from the nation’s money market within the next six weeks if additional liquidity is not provided immediately, a person familiar the matter said, citing a letter written by the finance ministry.

Non-bank financiers and mortgage lenders have Rs 2.7 lakh crore ($37 billion) of debt maturing in the next five months, the person said, asking not to be named as the information is not public. According to the letter sent to the corporate affairs ministry, a default could adversely impact productive sectors of the economy, the person said. Bloomberg News has reviewed the correspondence.

Shares of the power producer swung between gains and losses after its September quarter profit missed Bloomberg consensus estimates.

Key earnings highlights:

• Net profit at Rs 2,426 crore versus estimate of Rs 2,577 crore
• Revenue at Rs 22.261 crore versus Rs 19,698.75 crore (YoY)

Shares of the aluminum and copper maker pared gains to trade 2.4 percent higher at Rs 237 after it reported September quarter earnings.

Key earnings highlights (Hindalco standalone and Utkal Alumina):

• Net profit up 54 percent at Rs 725 crore
• Ebitda up 5 percent at Rs 1,922 crore
• Revenue at Rs 10,830 crore

Shares of the country's largest state-run oil refiner held on to gains and was up 4.9 percent at Rs 149 after it reported profit of Rs 3,247 crore in September quarter which missed Bloomberg consensus estimate of Rs 4,729 crore.

Key earnings highlights:

• Net profit down 52 percent at Rs 3,247 crore versus Rs 6,831 crore (QoQ)
• Net revenue at Rs 1,32,035 crore versus Rs 1,29,475 crore (QoQ)
• Ebitda down 46 percent at Rs 6,762 crore versus Rs 12,576 crore (QoQ)
• Margin at 5.12 percent versus 9.71 percent (QoQ)

Sensex and Nifty are headed for best weekly rally since May 2016 amid earnings and as tensions eased between the government and the central bank over the monetary authority’s independence. An overnight drop in the price of crude also boosted sentiment.

Sensex and Nifty have surged over 5 percent so far this week, their best performance since May 31, 2016, when the indices climbed 5.4 percent.

Shares of the Delhi-based government-owned bank held on to gains and rose 2.2 percent to Rs 75.60 after it reported wider-than-expected loss in September quarter on higher provisioning.

Key earnings highlights:

• Net interest income down 1 percent at Rs 3,974.11 crore versus Rs 4,015.18 crore (YoY)
• Net loss at Rs 4,532 crore versus profit of Rs 560.58 crore (YoY); Bloomberg estimate of Rs 1,349 crore
• Gross non-performing assets as a percentage of total advances at 17.16 percent versus 18.26 percent (QoQ)
• Net non-performing assets as a percentage of total advances at 8.90 percent versus 10.58 percent (QoQ)
• Provisions at Rs 9,758 crore versus Rs 5,758 crore (QoQ)
• Provisions for bad loans at Rs 7,733.27 crore versus Rs 4,982 crore (QoQ)

• Security & Intelligence Service: The Delhi-based security service provider rose as much as 2.3 percent to Rs 850. Trading volume was 56.4 times its 20-day average.
• Grindwell Norton: The Mumbai-based abrasive products maker rose as much as 2 percent to Rs 504. Trading volume was 20.1 times its 20-day average.
• Coal India: The state-run coal miner rose as much as 1.3 percent to Rs 264.50. trading volume was 14 times its 20-day average.
• Akzo Nobel: The Gurugram-based paint maker rose as much as 2.8 percent to Rs 1,580. Trading volume was 12.2 times its 20-day average.

Shares of the private lender rose 2.1 percent to Rs 616.40 apiece. The bank is scheduled to announce its September quarter earnings today.

Preview (Q2, Year-on-Year)

• Net interest income expected to rise 13.4 percent to Rs 5,147 crore.
• Net profit likely to increase 75 percent to Rs 759 crore.

Shares of the Aditya Birla Group alluminium and copper maker rose as much as 3.5 percent to Rs 239.40 after its subsidiary Novelis reported September quarter earnings.

Key earnings highlights:

• Net profit up 56 percent (YoY) at $116 million (YoY)
• Adjusted Ebitda increased 18 percent to $355 million (YoY)
• Net sales increased 12 percent to $3.1 billion (YoT)
• Generated free cash flow of $108 million
• Novelis secured financing for pending Aleris acquisition
• Acquired $775 million of incremental term loan with a five-year maturity, and up to a $1.5 billion short-term bridge loan with a one-year maturity
• Expect to replace the bridge loan with permanent financing soon after closing, depending on market conditions

Shares of the Tamil Nadu-based private lender swung between gains and losses after it reported September quarter earnings.

Key earnings highlights:

• Net interest income up 12 percent at Rs 398 crore versus Rs 355 crore (YoY)
• Net profit up 16 percent at Rs 168 crore versus Rs 145 crore (YoY)
• Gross non-performing assets as a percentage of total advances at 2.85 percent versus 3.02 percent (QoQ)
• Net non-performing assets as a percentage of total advances 1.69 percent versus 1.70 percent (QoQ)

Nifty 10,700 strike price call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract surged 74 percent to Rs 121. As many as 84,450 shares were added to the open interest which stood at over 25.51 lakh shares.

Indian equity benchmarks extended gains along with rupee amid strong Asian markets and falling crude prices.

The S&P BSE Sensex rose as much as 1.67 percent or 575 points to 35,007 and the NSE Nifty 50 Index climbed 1.75 percent or 181 points to 10,562.

The rupee rose as much as 0.82 percent or 60 paise, the most in over a month, to 72.85 per dollar, its highest level since Oct. 1, after Brent crude fell for a fifth day to $72 per barrel

Market breadth was extremely bullish as 1,574 shares were advancing while a little over 500 shares were declining on the BSE.

Shares of the Pune-based two- and three-wheeler maker surged as much as 4 percent to Rs 2,703 after the company reported its highest ever monthly sales this October on strong motorcycle sales.

Key sales highlights:

• Total sales up 32 percent at 5,06,699 units (YoY)
• Domestic sales up 33 percent at 3,19,945 units (YoY)
• Exports up 38 percent at 1,86,757 units (YoY)
• Motorcycle sales rose 33 percent to 4,32,985 units (YoY)
• Commercial vehicle sales rose 30 percent to 73,714 units (YoY)

Indian equity benchmarks extended opening gains. Sensex surged as much as 1.26 percent or 435 points to 34,867 and the Nifty 50 Index reclaimed 10,500 mark for first time in over two weeks.

Shares of oil marketing companies surged after Brent crude prices fell for fifth day in a row.

In the last five trading sessions Brent crude has fallen 6.5 percent to $72.57 per barrel.

• Indian Oil rose as much as 4.44 percent to Rs 148.15
• Bharat Petroleum surged as much as 5.8 percent to Rs 300
• Hindustan Petroleum advanced as much as 4.14 percent to Rs 239

Indian equity benchmarks rose sharply paced by gains in oil retailers, Yes Bank, Hero MotoCorp and Tata Motors amid strong global markets.

The S&P BSE Sensex rose 0.8 percent or 279 points to 34,710 and the NSE Nifty 50 Index climbed 0.85 percent or 88 points to 10,468.

Seventeen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Oil & Gas Index's 2 percent gain. On the other hand, the S&P BSE IT Index was top loser, down 0.2 percent.

Mid- and small-cap shares also witnessed buying interest as the S&P BSE MidCap and S&P BSE SmallCap Indices rose over a percent each.

Rupee opened higher at 73.15 per dollar against yesterday's close of 73.45 after the dollar weakened overseas and oil prices declined.

The local unit rose as much as 0.44 percent or 32 paise to 73.13 against the greenback.

The Indian rupee is set to strengthen for a second day after the dollar weakened overseas and oil prices declined.

The implied opening from forwards suggest spot rupee will start trading around 73.13 having ended at 73.45 on Thursday, which was 0.7 percent higher and the biggest one-day rise since Oct. 12.

Prospects for easing tensions between leaders of the United States and China are helping round out a week that’s seen appetite for risk assets return following the October rout in equities.

In the bond market, falling oil prices and the RBI's bond purchases are expected to boost sentiment.

The benchmark 10-year yield fell 3 basis points on Thursday to 7.82 percent and was heading for a fourth weekly decline.

Foreign banks were biggest sellers of sovereign bonds Thursday, offloading Rs 1,760 crore of debt, exchange data showed. While they sold, domestic mutual funds were biggest buyers at Rs 1,260 crore. Later in the day, India will sell Rs 11,000 crore of bonds.

On HPCL

Deutsche Bank Research

• Maintained ‘Hold’; hiked target price to Rs 240 from Rs 230, indicating a potential upside of 5 percent from last regular trade.
• Second-quarter net profit and Ebitda below estimates.
• Headwinds ahead in the marketing business.

IDBI Capital

• Downgraded to ‘Accumulate’ from ‘Buy’; Maintain target price at Rs 248; indicating a potential upside of 8 percent from last regular trade.
• Second-quarter below expectation led by lower than expected sales volume, weaker GRM and higher forex losses.
• Lower crude price and regular price hike to improve marketing margins.
• Expect crude oil price to soften and election year would continue to act as an overhang.

Morgan Stanley On HDFC

• Maintained ‘Overweight’ with target price of Rs 2,400; indicating a potential upside of 36 percent from last regular trade.
• Net profit below estimates driven by lower net interest income and higher provisions.
• Loan spread was stable at 2.28 percent

Morgan Stanley On Marico

• Maintained ‘Equal-weight’ with target price of Rs 320.
• Second-quarter steady; in-line with estimates.
• Rise in input cost material impacted Q2 margins.
• Positives: Steady performance in domestic coconut oil segment and new launches in hair care segment.

IDFC Securities on Indraprastha Gas

• Maintained ‘Outperform’ for target price of Rs 345; Potential Upside 24 percent.
• Finally, Gurugram to come under IGL control.
• Material growth opens for IGL.
• IGL’s volume visibility extending comfortably till FY25 by this move.

Deutsche Bank Research on October Auto Sales

• Heavy truck growth moderates, light truck remain strong.
• Passenger vehicles growth continues to moderate.
• Maruti - volume growth muted as expected.
• Mahindra - SUV growth improves marginally; Expect revival in remainder of FY19.

Nomura on Somany Ceramics

• Maintained ‘Buy’ with target price of Rs 610; indicating a potential upside of 67 percent from last regular trade.
• Weak Q2FY19 driven mainly by weak volume growth.
• Remain positive on growth outlook/pricing/profitability.
• Think worst of price correction in tiles is now behind.

Nomura on AIA Engineering

• Maintained Neutral; Cut target price to Rs 1,945 from Rs 1,955.
• Q2FY19 witnessed strong volume growth.
• Margins to improve as volume picks up.
• Stock rally appears to price in the growth; valuations expensive.

• Nifty October Futures ended at 10413, premium of 33 points.
• Nifty November open interest down 0.2 percent; Nifty Bank November open interest up 7.1 percent.
• Maximum open interest for November series at 10,700 Call (open interest at 24.7 lakh shares).
• Maximum open interest for November series at 10,000 Put (open interest at 50.8 lakh shares).

Bulk Deals

• 8K Miles Software Services: IFCI sold 14.1 lakh shares (4.61 percent) at Rs 67.89 each

Trading Tweaks

• Vakrangee to move into ASM framework
• DFM Foods record date for share split from Rs 10 to Rs 2
• Mishtann Foods record date for share split from Rs 10 to Re 1
• Laxmi Machine Works buyback starts
• Dhanlaxmi Bank price band revised to 10 percent
• Bombay Dyeing & Manufacturing Company price band revised to 5 percent
• Texmo Pipes and Products price band revised to 5 percent
• STI India price band revised to 5 percent

HPCL Standalone (Q2, QoQ)

• Revenue down 0.2 percent to Rs 67,518 crore
• Ebitda down 33.5 percent to Rs 2,122 crore
• Ebitda margin at 3.1 percent versus 4.7 percent
• Net profit down 36.5 percent to Rs 1,092 crore

GlaxoSmithKline Consumer Healthcare (Q2, YoY)

• Revenue up 14.4 percent at Rs 1,272 crore
• Net profit up 43.2 percent at Rs 275.5 crore
• Ebitda up 36.6 percent at Rs 353.7 crore
• Margin at 27.8 percent versus 23.3 percent

Aarti Industries (Q2, YoY)

• Revenue up 46.4 percent at Rs 1,299.5 crore
• Net profit up 56.6 percent at Rs 122.9 crore
• Ebitda up 51 percent at Rs 242.1 crore
• Margin at 18.6 percent versus 18.1 percent

Trent Standalone (Q2, YoY)

• Revenue up 18 percent at Rs 615.9 crore
• Net profit up 13.4 percent at Rs 32.9 crore
• Ebitda up 19.9 percent at Rs 59.1 crore
• Margin at 9.6 percent versus 9.4 percent

Tata Communications (Q2, YoY)

• Revenue down 4.2 percent at Rs 4,068.2 crore
• Net profit at Rs 1.7 crore versus net loss at Rs 248.4 crore
• Ebitda up 6 percent at Rs 630.2 crore
• Margin at 15.5 percent versus 14 percent

SRF Consolidated (Q2, YoY)

• Revenue up 48.9 percent at Rs 1,915.4 crore
• Net profit up 47.1 percent at Rs 151.2 crore
• Ebitda up 63.4 percent at Rs 332.7 crore
• Margin at 17.4 percent versus 15.8 percent

Nifty Earnings To Watch

• Axis Bank
• Hindalco
• Indian Oil Corporation
• NTPC

Other Earnings To Watch

• Alkem Laboratories
• Allahabad Bank
• Bata India
• Bharat Forge
• BSE
• Equitas Holdings
• Godrej Consumer Products
• JSW Energy
• Oracle Financial Services Software
• Petronet LNG
• Power Finance Corporation
• Punjab National Bank
• Steel Authority of India
• Sun TV Network
• Tata Chemicals
• Whirlpool

• Hindustan Petroleum Corporation will shut its crude unit in Mumbai refinery in January-March 2019 for 10 days. The company will take shut downs at both Mumbai and Vizag refinery in financial year starting from April 2019 for Euro 6 Hookups. The state-run refiner may consider importing Iran oil if U.S. grants waivers. The company also plans to merge Mangalore Refinery and Petrochemicals with self under integration plan. The deal will take place in six months after board approvals. (Bloomberg News)
• Indraprastha Gas: Supreme Court suggested the company to take over the supply of natural gas in Gurugram from Haryana City Gas Distribution Ltd. as an ongoing concern so that the entire dispute can be resolved amicably. Deloitte Haskins and Sells LLP has been appointed to submit the valuation within four weeks from today or by November 30. Next hearing is on December 6.
• Goodyear India will be shutting down its manufacturing plant in NCR and the boiler operations of the plant from Nov. 4 to Nov. 10 in response to Environment Pollution Authority’s public notice for all industrials regarding pollution control.
• Deepak Nitrite commenced operations at its phenol and acetone plant. The plant has the capacity to manufacture 200,000 MTPA of phenol and 120,000 MTPA of its co-product acetone.
• Inox Leisure board approved issuing 64 lakh shares equity shares on a preferential basis to its promoter Gujarat Fluorochemicals at a floor price Rs 241.71 per share.
• Reliance Industries and its four arms announced an open offer in acquisition of up to 2.88 crore shares, representing 25.64 percent of total voting capital of GTPL Hathway at Rs 82.65 per share aggregating to Rs 238.4 crore.
• Triveni Turbine board approves share buyback proposal of 66.7 lakh shares representing 2.02 percent of the paid-up equity share capital at Rs 150 per share, aggregating to Rs 100 crore.
• Tata Consultancy Services acquired London-based digital design studio ‘W12 Studios’. This deal will strengthen digital and creative design capabilities and will be part of TCS Interactive division, the company said.
• Aarti Industries board approved raising capital by way of equity/debentures to the tune of Rs 750 crore.
• Daiichi seeks India court stay on Fortis Healthcare: Bloomberg News
• Aegis Logistics statutory auditors—P. D. Kunte & Co. resigned stating they are merging professional practice with another firm of chartered accountants ‘CNK & Associates LLP’ on Oct. 31. The board meeting for the financial results are scheduled for Nov. 5. On this day new statutory auditors will also be chosen.
• NBCC India: High Court cleared three out of seven developments in Delhi: Bloomberg News
• Network18 Media and Investments gets NCLT nod for merger of 13 arms with itself.

• Focus on RBI board returns amid central bank-government spat
• India worst hit as U.S. revokes duty-free privileges
• Iran sanctions kick in, bringing biggest oil disruption in years
• Supreme Court gets four new judges
• Trump spoke with China’s Xi on trade, says talks going ‘nicely’
• Government sells 3.18 percent in Coal India, to get Rs 5,300 crore
• From January, retail investors can buy shares in IPO using UPI
• Apple will stop reporting iPhone unit sales, forecast underwhelms
• Google CEO Pichai says he’s still the boss amid employee revolts
• Foreign outflows exceed Rs 1 lakh crore in the first ten months of 2018
• New blue-collar jobs will survive the rise of AI

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.7 percent or 73 points to 10,488 as of 7:43 a.m.

Asian stocks extended their rebound from a rough October and headed for the biggest weekly rally since July amid hopes for trade talks and China stimulus. Sentiment proved resilient to underwhelming news from Apple Inc. that hit U.S. Nasdaq futures.

Hong Kong and Korean stocks led the advance Friday, taking gains on the MSCI Asia Pacific Index to almost 4 percent for the week. The advance came after a phone call between Presidents Donald Trump and Xi Jinping showed the door is still open for U.S.-China trade talks.

Currencies

• The yen slipped 0.1 percent to 112.78 per dollar.
• The offshore yuan was little changed at 6.9180 per dollar after advancing more than 0.8 percent Thursday.
• The Bloomberg Dollar Spot Index rose 0.1 percent.
• The euro traded at $1.1397.

Commodities

• West Texas Intermediate crude slid 0.2 percent to $63.40 a barrel.
• Gold was flat at $1,233.34 an ounce, little changed on the week.

Here’s the key scheduled event to come on Friday:

• The final U.S. jobs report before next Tuesday’s congressional elections may show that hiring improved and that the unemployment rate held at a 48-year low.