Sensex, Nifty Halt Longest Weekly Decline In Over Five Years

Indian equity benchmarks erased weekly losses and ended on a higher note, snapping their longest weekly losing streak in over five years.

The S&P BSE Sensex Index closed 2.15 percent higher at 34,773.58 and the NSE Nifty 50 Index ended at 10,472.50, up 2.32 percent.

The market breadth was tilted in the favour of buyers. About 1,454 stocks advanced and 317 stocks declined on National Stock Exchange.

Shares of the sponge iron maker rose as much as 11 percent, the most since July 18, to Rs 894.60. The company announced its quarterly results for the July-September period.

Key earnings highlights (YoY):

• Net profit at Rs 27.63 crore versus Rs 27.62 crore.
• Revenue at Rs 216.2 crore versus Rs 167 crore.

About 13 lakh shares of Marico changed hands in a block deal, according to Bloomberg data. Buyers and sellers were not known immediately.

KKR & Co. is seeking to acquire assets from stressed Indian shadow lenders, as it tries to take advantage of the market disruption after a rare money market default by Infrastructure Leasing & Financial Services Ltd.

The private equity firm’s two Indian credit units may spend as much as 20 billion rupees ($270 million) combined to purchase portfolios from local non-banking finance companies, Sanjay Nayar, KKR’s India chief executive officer, said in an phone interview Friday.

“We believe current market conditions offer attractive opportunities to buy portfolios of structured credit and real estate credit,” Nayar said.

Shares of the lender fell as much as 0.1 percent to Rs 98.70. The bank announced its quarterly results for the July-September period.

Key earnings highlights (Q2, YoY):

• Net profit up 2 percent at Rs 112 crore.
• NII up 6.2 percent at Rs 467.7 crore.
• Gross NPA at 4.66 percent versus 4.72 percent (QoQ).
• Gross NPA in absolute terms at Rs 2,371.6 crore versus Rs 2,296 crore (QoQ).
• Net NPA at Rs 1,497 crore versus Rs 1,395 crore (QoQ).

Shares of the construction services provider rose as much as 18.7 percent, the most since March 2016, to Rs 237.70.

Trading volume was 3.9 times its 20-day average, according to Bloomberg data. Sadbhav Engineering traded at 22 times its estimated earnings per share for the coming year.

Shares of the sponge iron maker rose as much as 7.5 percent, the most since June 29, Rs 179.

The stock traded at 18 times its estimated earnings per share for the coming year, Bloomberg data showed.

Key highlights from the press conference:

• Requesting states to reduce value added tax on aviation turbine fuel.
• Will come out with a concrete plan for reviving Air India by month-end.
• Keeping a watch on Jet Airways, they haven't come to us.
• Cost-cutting measures will improve performance of airlines.

Shares of Tata Motors fluctuated between gains and losses to trade 0.9 percent higher at Rs 184.75.

About 10 lakh shares changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

Shares of the country’s second-largest lender by market value erased early gains and traded 0.9 percent higher at Rs 264.75. The rose 2.2 percent intraday.

About 28.4 lakh shares changed hands in two block deals, Bloomberg data showed. Buyers and sellers were not known immediately.

SBI traded at 26 times its estimated earnings per share for the coming year, according to Bloomberg data.

Shares of the liquor manufacturer rose as much as 5.1 percent to Rs 580. The company's profit rose for the fifth straight quarter during the July-September period.

Key earnings highlights (YoY):

• Revenue up 10.5 percent at Rs 111.8 crore.
• Net profit up 23.6 percent at Rs 19.4 crore.
• Ebitda up 22.1 percent at Rs 30.4 crore.
• Margin at 27.2 percent versus 24.6 percent.

• Indian equity benchmarks extended opening gains and is poised for biggest gain in over two years.
• The S&P BSE Sensex Index rose as much as 2.06 percent to 34,702 and the NSE Nifty 50 Index rose as much as 2.1 percent to 10,449.
• About 1,463 stocks advanced and 175 stocks declined on NSE.

Shares of the country's largest FMCG rose as much as 1.3 percent to Rs 1,546.45, ahead of the results announcement.

The stock returned 26.4 percent over the last 12 months compared to an 8.5 percent advance in Sensex.

Q2 Preview (YoY):

• Revenue seen up 13 percent at Rs 9,383 crore.
• Net profit seen up 15 percent at Rs 1,418 crore.
• Ebitda see up 18 percent at Rs 1,990 crore.
• Margins seen at 21.2 percent versus 20.2 percent.
• Volume growth expected to be 8-10 percent on base of 4 percent.

• Firstsource Solutions: About 32 lakh shares changed hands in a block deal.
• South Indian Bank: About 10.4 lakh shares changed hands in a block deal on BSE.
• SITI Networks: about 18 lakh shares changed hands in a block deal.
• SAIL: About 40 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Shares of the investment banker rose as much as 5.7 percent, the most since Sept. 18, to Rs 656.30.

Trading volume was 111.5 times its 20-day average, according to Bloomberg data. The stock traded at 4.1 times its last reported book value compared to 7.3 times for the two-year historical average, Bloomberg data showed.

Shares of the state-run lender rose as much as 9.2 percent the most in nearly a month to Rs 25.

The Government of India increased stake in Corporation Bank from 79.87 percent to 86.77 percent, after 86.9 crore equity shares were allotted to the government on a preferential basis, according to its stock exchange notification.

The stock has declined over 38 percent so far this year compared to 2.2 percent advance in Sensex.

Shares of the tech giant extended declines for the third day. The stock fell as much as 2.9 percent to Rs 1,922.35.

The company's September quarter profit rose on the back of margin expansion as the software services exporter benefited from a seasonal jump in business and a falling rupee. (More details here).

The stock is poised for its longest losing streak since July. The scrip was the worst performer on Sensex and Nifty.

Indian equity benchmarks traded higher in the open. The S&P BSE Sensex Index rose as much as 1.5 percent to 34,511.64 and the NSE Nifty 50 Index rose as much as 1.6 percent to 10,398.55.

The market breadth was tilted in favour of buyers. Ten out of 11 sectoral gauges compiled by NSE advanced. led by NSE Nifty Metal Index's 2.2 percent advance. On the flipside, NSE Nifty IT Index was the top sectoral loser, down 0.2 percent.

The Indian rupee strengthened for the third straight session against the U.S. dollar. The home currency opened at 73.79 a dollar after appreciating 0.45 percent.

The currency will find some support from oil bearishness and tracking other currencies in the Asia Pacific region. Brent crude fell the most in nearly three months yesterday to around $80 a barrel.

On a weekly basis, the rupee is poised to decline for the seventh straight week, the longest streak in almost three years, amid widening foreign outflows and a broader emerging-market sell-off.

Today, markets will be watching for retail inflation data and sale of 11,000 crore rupees of bonds by the central government. The inflation data is due post-market.

The CPI probably accelerated, rising 4 percent in September from the previous year, according to a Bloomberg News survey. That compared with a gain of 3.69 percent in August

F&O Cues

• Nifty October futures closed trading at 10,252, premium of 18 points.
• Nifty October open interest down 0.2 percent; Nifty Bank October open interest up 21 percent.
• Max open interest for October series at 10,500 Call (open interest at 35.2 lakh shares).
• Max open interest for October series at 10,000 Put (open interest at 37.2 lakh shares).

F&O Ban

• IDBI Bank

Put-Call Ratio

• Nifty PCR at 1.08 versus 1.16
• Nifty Bank PCR at 0.92 versus 1.34

Brokerages On TCS

CLSA

• Maintained ‘Buy’ with a price target of Rs 2600, implying a potential upside of 31 percent from the last regular trade.
• Second quarter review: strong growth, slight margin miss and an improving growth outlook.
• Strong revenue growth led by improving BFSI and retail.
• Margin expansion slightly lower as TCS invests to exploit demand.

Macquarie

• Maintained ‘Outperform’; cut price target to Rs 2345 from Rs 2,350, implying a potential upside of 18 percent from the last regular trade.
• Double-digit revenue growth momentum driven by the ramp-up of large deal wins.
• Growth momentum has been picking up in the BFS sector.
• Cut price target to factor in lower other income.

Nomura

• Maintained ‘Reduce’ with a price target of Rs 1950, implying a potential downside of 1.5 percent from the last regular trade.
• September quarter review: Revenue growth was below expectations, while margins were in line.
• Expect marginal downside to growth numbers and possible tempering of multiples.
• Prefer HCL Tech as only Buy.

Credit Suisse

• Maintained ‘Neutral’ with a price target of Rs 1,775, implying a potential downside of 10 percent from the last regular trade.
• Solid September quarter but not enough for upward earnings revisions.
• Well placed in digital technologies but no pick-up in financial services.
• No concerns yet around trade wars and Brexit.

Deutsche Bank

• Maintained ‘Hold’ with a price target of Rs 1,740, implying a potential downside of 12 percent from the last regular trade.
• Rev-growth accelerates, management signals good visibility for the current financial year.
• U.K. and Europe have maintained strong growth rates.
• Robust operating metrics; Digital is now 28 percent of revenues.

More Brokerage Calls

UBS on Cipla

• Maintained ‘Buy’ with a price target of Rs 730, implying a potential upside of 18 percent from the last regular trade.
• Niche launches to sustain the growth momentum.
• Portfolio rationalisation and new launches to enhance the U.S. gross margins.
• Potential headwinds facing the South African business.
• Continue to prefer Cipla among Indian pharma companies.

Macquarie on Coal India

• Maintained ‘Outperform’ with a price target of Rs 335, implying a potential upside of 26 percent from the last regular trade.
• Well placed as market tightness persists.
• E-auction realisation could surprise; Linkage auction encouraging.
• Dividend and valuation limits downside; buyback could flip the overhang.

• Just Dial record date to determine buyback eligibility.
• Larsen & Toubro ex-date to determine buyback eligibility.
• Garden Reach Shipbuilders & Engineers Limited added to BSE IPO Index.

TCS (Consolidated, QoQ)

• Dollar revenue up 3.2 percent at $5.22 billion.
• Revenue up 7.6 percent at Rs 36,854 crore.
• Net profit up 7.6 percent at Rs 7,901 crore.
• EBIT up 13.9 percent at Rs 9,771 crore.
• Margin at 26.5 percent versus 25 percent.
• Interim dividend of Rs 4 per share to be given, record date set on Oct. 24.

Also Read: Q2 Results: TCS’ Profit Rises After Margin Hits Seven-Quarter High

GM Breweries (Q2, YoY)

• Revenue up 10.5 percent at Rs 111.8 crore.
• Net profit up 23.6 percent at Rs 19.4 crore.
• EBITDA up 22.1 percent at Rs 30.4 crore.
• Margin at 27.2 percent versus 24.6 percent.

Nifty Earnings To Watch

• Hindustan Unilever

Also Read: What To Expect From Earnings Of Consumer Goods Makers

Other Earnings To Watch

• Karnataka Bank
• Tata Sponge Iron

• 2:30 p.m.: SIAM to release India car sales data for month of September.
• 5:30 p.m.: India August Industrial Production (YoY), estimate 4.0 percent, prior 6.6 percent.
• 5:30 p.m.: India September CPI (YoY), Est. 4.01 percent, prior 3.69 percent.

• Sundaram Clayton inaugurated its new foundry in Chennai with an investment of Rs 150 crore to significantly expand its capacity. This expansion will primarily serve to Hyundai Motor India Limited.
• Castrol India entered into a strategic agreement with Mahindra & Mahindra, in which the auto company will endorse a range of Castrol products like aftermarket engine oils and transmission fluids for Mahindra tractors.
• Bank of India raised MCLR by five basis points across the overnight and one-month tenors to 8.05 percent and 8.15 percent respectively. These rates are effective from Oct. 10.
• PNC Infratech declared appointment date, i.e. Oct. 10 for two EPC Project Packages worth Rs 2,520 crore by Uttar Pradesh Expressways Industrial Development Authority.
• OnMobile Global acquired 100 percent stake in Sweden based ‘Appland AB’ for $15 million. This expansion will help the company foray into mobile games subscription market.
• Bank of Baroda extended term of the current CMD PS Jayakumar by one year till Oct. 12 next year or until any further order, whichever is earlier.
• Government of India increased stake in Corporation Bank from 79.87 percent to 86.77 percent, after 86.9 crore equity shares were allotted to the government on a preferential basis.
• Yes Bank appointed Korn Ferry to search for new CEO. The lender’s panel for identifying successor to MD and CEO Rana Kapoor has mandated global advisory firm Korn Ferry to assist in evaluating of candidates.

• The Bloomberg Commodity Index declined 0.5 percent Thursday.
• West Texas Intermediate crude rose 0.1 percent early Friday after sliding more than 2 percent the previous two days, and traded at $71.01 a barrel.
• Gold slid 0.2 percent after rising 2.5 percent Thursday, and was at $1,221.63 an ounce.

Shanghai Exchange:

• Aluminium traded higher for the third day this week, down 0.4 percent.
• Steel traded higher for the third day this week, up 0.7 percent.
• Zinc traded lower for the second day, down 0.6 percent.
• Copper traded higher for the third day this week, up 0.4 percent.
• Rubber traded lower for the third day, down 0.8 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, parred losses and rose 0.3 percent to 10,309.50 as of 7:50 a.m.

Asian equity markets traded mixed, with some signs that China and Hong Kong could steady after the recent slump.

While stocks in Japan and Australia added to this week’s losses, South Korean equities rose and futures signalled gains for China, after the Shanghai Composite slumped to a four-year low.

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