Sensex, Nifty Close Higher For Fifth Straight Week Led By IT, Telecom Stocks

India's stock benchmarks closed at record aided by gains in realty, information technology and telecom stocks and logged gains for the fifth consecutive week. The S&P BSE Sensex closed above the 60,000 mark for the first time.

The Sensex rose 0.27% to 60,048.47, a record close. The 30-stock index rose to a record 60,333 in intraday trade. The Nifty 50 advanced by a similar magnitude to 17,853.20, a record close. The 50-stock index rose to a record 17,947.65 in intraday trade. HDFC Bank Ltd. contributed the most to the index gain, increasing 2.0%. Asian Paints Ltd. had the largest increase, rising 3.9%. Today, 21 of 50 shares rose, while 29 fell.

The broader indices underperformed their larger peers with the S&P BSE MidCap shedding over 1% and S&P BSE MidCap slipping 0.3%. Twelve of the 19 sectoral indices compiled by the BSE Ltd. declined, with S&P BSE Metal index falling 2.31%. On the flipside, S&P BSE Telecom rose nearly 2.8%.

The market breadth was skewed in favour of bears. About 1,341 stocks advanced, 1,922 declined and 159 remained unchanged.

Ramkrishna Forgings Ltd. bagged an export order worth Rs 30 crore per annum from North America in Oil & Gas segment.

In an exchange filing, Naresh Jalan, managing director of Ramkrishna Forgings said that the order strengthened the company's penetration in oil & gas exploration sector.

All the three analysts tracking the company maintained 'buy' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 3.2%.

India’s technology stocks advance after global peer Accenture reported fourth-quarter earnings and gave a profit forecast for the full-year that beat the average analyst estimate.

Analyst Comments

• “Accenture’s Q4FY21 performance reinforces our confidence on demand environment and growth,” Jefferies analysts wrote in a note, maintaining their positive stance on Infosys and HCL Tech.

• “Given the strong demand environment, we expect the FY22 guidance to be revised upwards”

• Accenture’s results reflect “strong demand environment” and augur well for Indian IT companies, Emkay analysts wrote in a note.

• Prefer Infosys, HCL Tech and Tech Mahindra in largecaps, and Persistent Systems, Birlasoft in midcaps.

• Shares of Chambal Fertilisers and Chemicals Ltd rose 6.29%, the most in 14 weeks, to Rs 326 apiece. Trading volume was triple the 20-day average for this time of the day.

• Chambal Fertilisers trading at 9 times its estimated earnings per share for the coming year.

• Analysts have four ‘buy’, no ‘hold’ and no ‘sell’ recommendations on the stock.

• Shares of Chambal Fertilisers crossed the 50-day simple moving average, indicating potential upward price momentum.

Board of Directors of ICICI Bank will consider the approval of the unaudited financial results for the quarter and half-year ending September 30, 2021 at its forthcoming meeting to be held on Saturday, October 23, 2021.

Source: ICICI Bank Exchange Filing

Shares of Shilpa Medicare Ltd. rose over 2% to Rs 583 apiece after the company’s wholly owned subsidiary Shilpa Biologicals Ltd. entered into definitive agreement with Cadila Healthcare Ltd. for production and supply of the ZyCoV-D vaccine drug substance from its Biologics R&D arm and manufacturing center in Dharwad, Karnataka.

In an exchange filing, Shilpa Medicare said that the target production of the ZyCoV-D vaccine will be mutually agreed upon by both the companies.

ZyCoV-D is the first DNA plasmid vaccine in the world for human use. It was developed indigeneously by Cadila Healthcare. It is also the first Covid-19 vaccine for adolescents in the 12-18 age group and is a needle-free vaccine that uses intradermal delivery of vaccine.

Of the two analysts tracking the company, one maintained ‘buy’ and one maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 8.3%.

IIFL Finance Ltd. has announced plans to raise up to Rs 1,000 crore, by opening a public issue of Secured NCDs on Monday (September 27). In an exchange filing, the company said that the funds will be utilized for onward lending, financing, refinancing the existing debt and general corporate purposes. The secured NCDs offer up to 8.75% yield.

IIFL Finance will issue secured redeemable NCDs aggregating to Rs 100 crore with a green-shoe option to retain over-subscription up to Rs 900 crore.

The NCDs to be issued have been rated CRISIL AA/Stable by CRISIL and BWRAA+/Negative by Brickwork, indicating that the instruments are reasonably safe. About Rs 5,570 crore debt is due within the next 12 months, representing 30.4% of current total debt outstanding and 116.3% of cash balance as of March 31, 2021

Shares of Caplin Point Laboratories Ltd. rose nearly 4% to Rs 929.5 apiece after the company’s Clinical Research Organisation division Amaris Clinicals completed a virtual audit from U.S. FDA with ‘nil’ observations.

In an exchange filing, Chairman of Caplin Point CC Paarthipan said that Amaris would facilitate cost effective and quicker foray into newer geographies.

Both the analysts tracking the company maintained ‘buy’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 15.6%.

India's stock benchmarks advanced to record highs, aided by gains in information technology, realty and telecom stocks. The S&P BSE Sensex Index crossed 60,000 mark for the first time while the NSE Nifty 50 index is inching towards the 18,000 mark

The S&P BSE Sensex rose 0.29% to 60,059.61. The 30-stock gauge rose to a record 60,333 in intraday trade. The NSE Nifty 50 also advanced by similar magnitude to 17,845.75. The 50-stock index hit a record 17,947.65 in intraday trade. HDFC Bank Ltd. contributed the most to the index gain, increasing 1.4%. Asian Paints Ltd. had the largest increase, rising 4.7%. In midday trading, 27 of 50 shares rose, while 23 fell.

The broader indices underperformed their larger peers with the S&P BSE MidCap shedding 0.6% and S&P BSE SmallCap slipping over 0.1%. Eleven of the 19 sectoral indices compiled by the BSE Ltd. declined, with S&P BSE Metal index shedding nearly 2%.

The market breadth was skewed in favour of bears. About 1,396 stocks advanced, 1,751 declined and 161 remained unchanged.

India’s benchmark Sensex index topped 60,000 for the first time, more than doubling from its pandemic low hit in March 2020, amid hopes for an economic recovery from two deadly waves of Covid since last year.

Here’s what market participants had to say about the Sensex’s surge

HDFC SECURITIES (Dhiraj Relli)

• Inflows from foreign investors have resumed, while local investors continue to invest in stocks despite multiple headwinds

• “The absence of a 10% correction in the indices over the last 18 months shows the maturity of the local investors but also throws up the possibility of that happening over the next few weeks or months.”

MOTILAL OSWAL FINANCIAL SERVICES (Motilal Oswal)

• Amid the buoyant sentiment and increased activity, valuations have reached elevated levels and demand consistent delivery on earnings expectations

• Improving economic activity and recovery in corporate earnings to extend the positive momentum in local markets even though the high valuations may result in intermittent volatility

ICICIDIRECT (Dharmesh Shah)

• Reiterates positive stance on local equities, citing improving market breadth and participation of multiple sectors in rally

• The Nifty 50 Index, which is close to topping 18,000 level for the first time, will see the next leg of an up move toward 18,200 points in coming weeks if it stays above 17,800 level

• Financial stocks, which have 37% weight in Nifty, could drive the index higher; “Any temporary breather from here on should be capitalized on as incremental buying opportunity to ride next leg of up move.”

SWASTIKA INVESTMART (Santosh Meena)

• Short-term correction can’t be ruled out after the markets saw “parabolic move” in last few days.

• “We are in a strong uptrend and outperforming the global markets, while some mean reversion can be seen in the coming days where rising crude oil prices and surge in U.S. bond yield could cause near-term volatility.”

• He sees the Sensex marching toward 1,00,000 point mark in the current rally and advises investors to remain invested as any potential correction of 10%-20% would result in a buying opportunity.

• Indian government departments and ministries will be allowed to spend as per their approved expenditure plans.

• The ministry reviewed its earlier guidelines that restricted overall expenditure of most departments during July-September to 20% of the budget estimate.

Source: Ministry of Finance

Shares of PSP Projects Ltd. rose 1% in intraday trade after the company received Letter of Intents (LoI) and Work Orders for new projects worth Rs 421.87 crore, excluding GST.

In an exchange filing, PSP Projects said that the projects pertain to institutional, industrial, residential and precast segments from various clients.

The overall projects received by PSP Projects during financial year 2021-22 amounted to Rs 637.23 crore.

All the nine analysts tracking the company maintained ‘buy’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 23.2%.

Indian government bonds dropped on an overnight slump in U.S. Treasuries and higher oil prices ahead of a 310-billion rupee ($4.2 billion) weekly debt auction. The rupee traded flat against the dollar.

• 10-year yields jumped by 3 bps, the most since Aug. 3

• USD/INR steady at 73.6475 on Friday

Shares of HealthCare Global Enterprises Ltd. rose 2.29% to Rs 254.9 apiece after the company received a credit rating upgrade from ICRA for bank facilities.

ICRA upgraded the rating on the long-term bank facilities of HealthCare Global to A+/Stable from A-/Stable and the short-term bank facilities to A1 from A2+.

Of the eight analysts tracking the company, seven maintained ‘buy’ and one maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 0.7%.

• Shares of Indus Towers Ltd. rose 9.55% to Rs 305.7 apiece. Trading volume was the double the 20-day average for this time of the day.

• The relative strength index on the stock was above 70, suggesting it may be overbought.

• Analysts have 13 ‘buy’, 13 ‘hold’ and three ‘sell’ recommendations on the stock.

• Shares of Indus Towers rose 12% in the past 5 days.

Jefferies raised the recommendation on Indus Towers to ‘buy’ from hold, and the price target to Rs 310 from Rs 260.79 earlier. In a report, ICICI Securities said that though the Indus Towers stock price has risen over 20% after the government announced relief measures and reforms in telecom sector, the company is unlikely to benefit from Vodafone Idea capex in the near term.

India is likely to sell Rs 11,000 crore ($1.5 billion) of 5.63% 2026 bonds at a cutoff yield of around 5.65%, according to the median estimate of a Bloomberg survey of five banks and securities firms.

• Cutoff yield for Rs 10,000 crore of 6.67% 2035 bonds seen around 6.67%

• Cutoff yield for Rs 7,000 crore of 6.67% 2050 bonds seen around 6.92%

• Cutoff price for Rs 3000 crore of 2034 floating- rate bond seen around 100 rupees, according to four traders

Shares of Ircon International Ltd. rose 4.38% to Rs 46.5 apiece after the company won a bid to set up 500 Mega Watt solar power plant through e-Reverse auction with a Viability Gap Funding of Rs 224.70 crore under CPSU Scheme II. The scheme has been floated by Indian Renewable Energy Development Agency (IREDA). In an exchange filing, Ircon International said that the approximate cost of the project is Rs 2,400 crore.

Trading volume on the stock was 2.3 times the 30-day average volume for this time of the day.

Most yields along the India sovereign yield curve rose, with 3-year bonds moving the most in Friday morning trading.

• The 3-year yield rose 6.6bps to 4.913%

• The 10-year yield rose 3.4bps to 6.174%

• The 14-year yield rose 4.1bps to 6.686%

• The 3-year-10-year yield spread was 126.1bps, vs previous close 129.2bps

Shares of Affle India Ltd. rose 2.44% to Rs 5,300 apiece after the company approved the sub-division of equity shares of the company from one equity share having a face value of Rs 10 each to five equity shares having the face value of Rs 2 each. The record date for the sub-division of equity shares is October 8, Affle said in an exchange filing.

Brokerage firm Prabhudas Lilladher Ltd. initiated coverage of Affle India with a ‘buy’ recommendation and a target price of Rs 7,023, an implied return of 35.74%.

Prabhudas Lilladher

• Affle is a play on rising digital adoption with mobile being the most preferred channel.

• Affle’s focus on high growth markets like India, South East Asia, Latin American and Africa augurs well as these markets are underpenetrated.

• Differentiated end-to-end digital advertising capability with high RoI driven pricing model a positive

Of the 8 analysts tracking the company, six maintained ‘buy’ and two maintained ‘hold’ recommendations. The overall consensus price of analysts tracked by Bloomber implied an upside of 14.7%

Zydus Cadila’s U.S. Subsidiary Zydus Pharmaceuticals (USA) Inc. has received final approval from the U.S. FDA to market Apremilast tablets in the strengths of 10 mg, 20 mg and 30 mg.

Apremilast tablets are to treat adults with moderate to severe plaque psoriasis.

In an exchange filing, Cadila Healthcare Ltd. said that the drug will be manufactured at the group’s formulation manufacturing facility at the SEZ, Ahmedabad.

The group has 323 approvals so far and has filed over 400 ANDAs since the commencement of the filing process in FY 2003-04.

Of the 35 analysts tracking the company, 17 maintained ‘buy’, eight maintained ‘hold’ and 10 maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 5.4%.

Shares of Globus Spirits Ltd. shed 4.86% to Rs 1,350.15 apiece. The company informed the exchanges that the National Company Law Tribunal sanctioned the scheme of amalgamation between Unibev Ltd. and Globus Spirits.

Both the analysts tracking the company maintained ‘buy’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 16.4%. The relative strength index on the stock was 73, suggesting it may be overbought.

Shares of Dilip Buildcon Ltd. rose over 8.6% to Rs 602 apiece after the Supreme Court of India confirmed the appointment of Dilip Buildcon and VPR Mining Infrastructure Pvt Ltd., as the mine developer and operator, by Punjab State Power Corporation Ltd. at Pachhwara Central Coal Block Mine.

In an exchange filing, Dilip Buildcon said that the contract value of the tender is Rs 32,156.04 crore, excluding taxes. The consortium of Dilip Buildcon and VPR Mining emerged as L1 bidder in the Reverse Auction conducted by PSPCL.

Of the 12 analysts tracking the company, nine maintained ‘buy’, two maintained ‘hold’ and one maintained ‘sell’ recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 9.7%

The relative strength index on the stock was 71, suggesting it may be overbought. Trading volume was 28.9 times the 30-day average volume, for this time of the day.

• Oyo Hotels & Homes Pvt, a once high-flying Indian startup that ran into troubles during the pandemic, plans to file preliminary documents to go public as soon as next week and will seek at least $1.2 billion.

• IPO will consist mainly of primary shares, or those sold by the company, as a small portion of secondary stock.

• Ritesh Agarwal, 27-year-old founder and chief executive officer unlikely to sell any of his stake.

Source: People Familiar With The Matter

• Structural bull story of the Indian markets remains in place with growing evidence of the rebound of residential property cycle after a seven-year downturn.

• Pre-sales across the top seven cities rose 23% month-on-month and 41% year-on-year in July.

• Affordability remains at historically attractive levels, with the housing affordability ratio (home loan payment as a percentage of income) , declining to a record low of 27% in FY21

Christopher Wood, GREED & Fear Report

Shares of Dish TV India Ltd. rose 5.34% to Rs 21.7 apiece after the company informed that it received a letter from Yes Bank seeking an EGM. The bank had issued notices for the removal and appointment of directors on the Board of Directors of the company.

Yes Bank said that Dish TV, which was supposed to place resolutions before shareholders at the AGM on September 27, has sought an extension of the date of holding AGM based on unfounded reasons.

Yes Bank held 47,19,13,990 shares of Dish TV representing 25.63% of the paid-up equity share of the company, as on September 21.

India's S&P BSE Sensex opened higher and crossed 60,000-mark for the first time while NSE Nifty 50 advanced towards 18,000-mark, aided by gains in information technology stocks, amid strong cues as optimism from the advance in the Wall Street spilled over to Asian markets.

The S&P BSE Sensex rose 0.54% to a record 60,211.72. This is the first time the 30-stock index touched the 60,000-mark.

The NSE Nifty 50 also advanced by similar magnitude to a record 17,923.50. Infosys Ltd. contributed the most to the index gain, increasing 2.1%. Wipro Ltd. had the largest increase, rising 2.8%. In early trading, 32 of 50 shares rose, while 18 fell.

The broader indices almost mirrored their larger peers with the S&P BSE MidCap and S&P BSE SmallCap gaining over 0.5%. Barring S&P BSE Consumer Durables and S&P BSE Metal index, all the other 17 sectoral indices compiled by the BSE Ltd. advanced, with S&P BSE Information Technology adding over 1.35%

The market breadth was skewed in favour of bulls. About 1,637 stocks advanced, 504 declined and 111 remained unchanged.

India’s asset management and mutual fund companies may move after Aditya Birla Sun Life AMC filed for an initial public offering.

• The company which manages assets of about 2.75 trillion rupees is seeking to raise as much as 27.68 billion rupees

• In Focus: UTI Asset Management, Nippon Life India Asset Management, HDFC Asset Management, ICICI Bank, SBI

India’s technology stocks may move after global peer Accenture reported fourth-quarter earnings and gave a profit forecast for the full year that beat the average analyst estimate.

In Focus: TCS, Infosys, Tech Mahindra, HCL Technologies & Wipro and midcaps like Mindtree, Coforge, L&T Tech, Birlasoft.

ANALYST COMMENTS

• “Accenture’s 4QFY21 performance reinforces our confidence on demand environment and growth,” Jefferies analysts including Akshat Agarwal wrote in a note, maintaining their positive stance on Infosys and HCL Tech

• “Given the strong demand environment, we expect the FY22 guidance to be revised upwards,” they wrote

Asian stocks rose Friday after U.S. shares rallied and sovereign bond yields surged on economic optimism and easing fears of contagion from China Evergrande Group’s debt crisis.

Equities climbed in Japan and South Korea and were steady in Australia. U.S futures edged up after the S&P 500’s biggest two-day gain since July. The Wall Street advance was led by economically-sensitive sectors like energy and financials, as investors embraced the view that a looming reduction in Federal Reserve stimulus shows confidence in the recovery from the pandemic.

India’s SGX Nifty 50 Index futures for Sept. delivery rose 0.1% to 17,845.00, while MSCI Asia Pacific Index gained 0.6%. The NSE Nifty 50 Index added 1.6% Thursday to 17,822.95.

The prospect of tighter monetary policy spurred a global selloff in bonds. Long-term Treasury yields surged the most in 18 months as traders brought forward their expectations for the first Fed rate hike to the end of 2022. The Bank of England opened the door to a 2021 rate increase, pushing down 10-year gilts. Yields also jumped on sovereign debt in Australia and New Zealand.

The dollar held a decline and oil sustained an advance. While the concerns about contagion radiating from Evergrande have receded somewhat, it remains unclear if Beijing plans to manage fallout from any potential default. The developer is buckling under more than $300 billion of liabilities amid China’s crackdown on property-sector leverage. Elsewhere, gold trimmed a slump and Bitcoin traded near $45,000.

Back home, Sansera Engineering to debut after IPO. ONGC, Power Grid, SBI Life, Glenmark Pharma, BEML are among companies holding their annual shareholders’ meeting. Foreign investors sold net 15.8b rupees of stocks on Wednesday, according to NSDL website.