HDFC twins, ICICI Bank help Sensex settle 169 pts higher; Nifty tops 11,950

Topics Markets | Sensex | Moratorium

NSE's Nifty50 index ended at 11,971, up 37 points, or 0.31 per cent.
The Indian stock market witnessed a sharp recovery in the last hour of the session, supported by buying in financial counters.

Among the headline indices, the S&P BSE Sensex gained 169 points, or 0.42 per cent to end at 40,795 levels while the NSE's Nifty50 index ended at 11,971, up 37 points, or 0.31 per cent. India VIX slipped nearly 2.5 per cent to 20.21 levels.

ICICI Bank, HDFC and HDFC Bank contributed the most to the Sensex's gains. 

In the broader market, the S&P BSE MidCap index gained 0.5 per cent while the S&P BSE SmallCap index ended 0.19 per cent lower. 

 
Global markets

European shares held steady on Wednesday, underpinned by gains for Wall Street futures, following losses the day before on vaccine trials and a stimulus impasse, while the dollar was also stable. 

(With inputs from Reuters)

LIVE UPDATES

SECTOR WATCH | Nifty Bank up over 1.6%


MARKET AT CLOSE | Gainers and losers on the BSE Sensex


CLOSING BELL

The S&P BSE Sensex ended 169 points, or 0.42 per cent higher at 40,795 levels while NSE's Nifty ended at 11,971, up 36 points, or 0.31 per cent.

Interest waiver case | Not enough time today. Please fix it for a day when we have more time: Harish Salve to SC bench

(as reported by CNBC-TV18)

MARKET CHECK


KIOCL freezes at 10% upper circuit as Board to mull share buyback

Shares of KIOCL (Kudremukh Iron Ore Company Limited) were locked in the 10 per cent upper circuit band at Rs 141.95 on the BSE on Wednesday after the company said its board will meet on Monday, October 19, to consider share buyback proposal. READ MORE

Top gainers on the BSE at this hour


NEWS ALERT | Equitas Small Finance Bank files for an IPO for up to Rs 280 crore: CNBC TV18

-- Equitas Small Finance Bank will also have an OFS by Equitas Holdings for up to 7.2 crore equity shares

Nifty Bank index zooms nearly 300 pts; IndusInd, SBI top gainers


MARKET UPDATE :: Sensex sees smart recovery


Recovery from intra-day lows in today's session

COMPANY DAY'S LOW(RS) DAY'S HIGH(RS) LATEST(RS) RISE(%)
JINDAL STAIN. 49.05 58.25 56.55 15.29
INDIABULLS HOUS. 144.75 156.40 155.65 7.53
ORIENT REFRAC. 187.10 201.00 199.00 6.36
GARDEN REACH SH. 191.00 207.00 202.70 6.13
Click here for the full list

NEWS ALERT :: SC begins hearing in interest waiver case


UPDATE :: Nifty back above 11,900


HDFC Securities on Cement sector

Cement demand surprised with a sharp recovery in 2Q against 30% YoY decline in 1QFY21. Healthy monsoon for second consecutive year bodes well for rural markets and retail cement demand outlook. Even infrastructure projects are on a recovery path, which should accelerate non-trade sales in 2HFY21. Cement prices, too, have been stable in 2Q. Thus, we raise volume and realisation estimates for our coverage universe, leading to estimates and target price upgrades. We maintain our recommendations and valuation multiples for our coverage universe. Our top picks are – UltraTech, Ambuja Cements in the large-cap space and JK Cement and Birla Corp in mid-cap space.

NEWS ALERT :: Justice Bhushan-led panel has assembled after lunch

>> Panel now hearing Item No. 32. 
 
>> Interest Waiver Case is Item No. 34.

Rupee Closing

Rupee settles at 73.30 per US dollar vs Tuesday's close of 73.36/$

Goa Carbon slips over 10%


NTPC shares slip 5%, near 52-week low after multiple block deals

Shares of NTPC slipped 5 per cent to Rs 78.20 on the BSE on Wednesday after more than three-million equity shares of the company changed hands through multiple block deals. The stock of the state-owned electric utility company was trading close to its 52-week low of Rs 74, touched on March 23, 2020. Till 01:20 pm, a combined 31 million equity shares, representing 0.3 per cent of NTPC's total equity, had changed hands on the NSE and BSE, the exchange data shows. READ MORE

Only 8% Indian firms have ESG-related compensation policy: Refinitiv

Though Indian companies’ average transparency rating at 29 per cent is higher than the 26 per cent for the Refinitiv ESG (environmental, social, and corporate governance) universe, only 8 per cent of Indian firms have a policy on ESG-related executive compensation, much lower than the broader universe (25 per cent). READ MORE

Edelweiss Securities on refractory industry

We believe strong pick up in steel production, improving consumption and rising prices brighten prospects of refractory players. Moreover, demand recovery in auto & white goods and anticipated pick up in construction & infra are further sweeteners. A healthy way to play the steel upcycle, in our view, is via the refractory industry.
 
We upgrade Orient refractories (ORL) to ‘BUY’ with TP of Rs 220 based on parent’s strong India focus boosting exports, huge opportunity from government’s Atma Nirbhar Bharat push, accretive potential merger, and improving steel demand-supply. We maintain ‘BUY’ on Vesuvius India (VIL) with TP of Rs 1,083.

NEWS ALERT | US apparel watchdog probes factory run by Page Industries : Reuters

-- Probe following allegations of Human Rights violations

European indices trade lower in early deals


BROKERAGE VIEW | MOFSL on Tata Consumer Products

RATING: BUY | TARGET PRICE: Rs 558

We expect margin expansion to moderate in the near term as high cost tea inventory, which is procured by the company will be sold in the quarters to come (3QFY21 and 4QFY21). However, once tea prices stabilise, it is likely to be higher v/s pre-Covid prices. This should aid in driving value growth for the company, which wasn’t the case over the last five years where growth in the standalone business was driven by volumes.

Tata Elxsi slips into the green ahead of September quarter results announcement


PLI scheme, outsourcing to aid Dixon Technologies' growth trajectory

Dixon Technologies gained 7 per cent on Tuesday on multiple brokerage upgrades after the company’s subsidiary received approval to manufacture mobile phones under the government’s production-linked incentive (PLI) scheme. The scheme offers incentives up to 6 per cent spread over five years for an investment of Rs 200 crore. READ MORE

BSE Smallcap index trades flat with a negative bias


MARKET UPDATE:: Infosys, HDFC Bank, and ICICI Bank top contributors to Sensex's fall today


Covid-19 impact: CRISIL downgrades Thomas Cook India's rating to A+

The continued travel restrictions and negative customer sentiments have severely impacted leisure and corporate travel, and the foreign exchange (forex) business. This may lead to operating losses during fiscal 2021 and substantially reduce the net free cash (over Rs 200 crore reported as on March 31, 2020), CRISIL said in a statement. TCIL is part of Prem Watsa controlled Fairfax Financial Holdings Ltd (Fairfax) group. READ MORE

Jet Airways hits 5% upper circuit for 5th straight day; up 27% in one week

Shares of Jet Airways (India) were locked in the upper circuit for fifth straight day, up 5 per cent at Rs 36.45 on the BSE on Wednesday on hopes for the revival. In the past week, the stock has gained 27 per cent, as compared to a 1 per cent rise in the S&P BSE Sensex. READ MORE  

 

Tepid response to Federal Mogul OFS, bids received for less than 10% shares

The Rs 415-crore offer for sale (OFS) launched by MNC firm Federal-Mogul Goetze got a cold shoulder, with investors subscribing to less than 10 per cent of the shares on offer. The 12.14-million share offering got bids for just 114,734 shares. Meanwhile, Federal-Mogul’s shares hit the 5 per cent down-limit for the third day in a row. READ MORE

Tide turning for bonds after RBI's liquidity bonanza, signs of recovery

The yield on India’s benchmark 10-year bond fell about 13 basis points over the past month to 5.9%, making it Asia’s best performer, with the bulk of its decline coming in after the Reserve Bank of India announced steps including doubling the size of its bond purchases in a policy address last week. READ MORE

Dixon Tech, Sonata Software, Redington: Time to bet on these midcap stocks

Redington (India) Limited (REDINGTON): After conquering the 200-days moving average (DMA), the stock has entered into a consolidation range of Rs 105 to Rs 124 levels. The sentiment remains bullish with 50-DMA and the 100-DMA making a positive crossover with 200-DMA. The upward breakout may see a rally towards Rs 135 and then Rs 140 levels, as per the daily chart. READ MORE

NEWS ALERT :: Bench hearing the interest waiver case to assemble at 12 Noon

Alert: 33 other cases need to be heard by the Justice Bhushan-led bench before hearing the interest waiver case. Interest waiver case hearing could be delayed to 1-2pm.

Jindal Stainless, Jindal Stainless (Hisar) rally up to 35% in 3 days

Shares of iron & steel products companies were in focus at the bourses with Jindal Stainless and Jindal Stainless (Hisar) rallying up to 35 per cent in the past three days after the government imposed provisional countervailing duty (CVD) on stainless steel flat products imported from Indonesia. Jindal Stainless hit a 52-week high of Rs 58.25, after surging 10 per cent on the BSE in an otherwise weak market on Wednesday. In the past three days, the stock has zoomed 35 per cent from the level of Rs 43.25, hit on October 9. READ MORE

Buybacks for FY21 cross last yr's tally after announcements from TCS, Wipro

Including the buybacks announced by the two IT giants, this year’s buyback tally stands at Rs 28,430 crore — 42 per cent more than 2019-20. In the last financial year, buyback activity had slumped 64 per cent, following the introduction of 20 per cent tax. Despite widespread demands, there has been no roll-back of the buyback tax. But a change in the dividend tax structure this financial year has once again tilted the scale back in favour of buybacks as a vehicle to reward shareholders, especially promoters READ MORE

How City Union Bank, Federal Bank have sustained investor interest

The underpinning similarity between Federal Bank and City Union Bank (CUB) is their years of establishment as banks which span over several decades.
 
Despite their regulatory classification as old private sector banks, despite the disagreement between bank chiefs over it, the other similarity lies in their ability to chart a strong trajectory and to harvest their deep rooted connection with the small and medium enterprise (SMEs). READ MORE

BROKERAGE VIEW :: Angel Broking on Karnataka Bank

>> Karnataka Bank reported a mixed set of numbers for Q2FY21. Advance largely remained stable YoY and QoQ, growth primarily comes from retail and mid-size corporate. Management Indicated for FY21 advance would remain stable, retail and mid-size corporate book would grow but the large corporate book to decline. NII grew at a healthy rate of 15% YoY and 7% QoQ, compared to stable advance growth. Sequentially NIM improved 19 bps and YoY jumped by 26bps to 3.08%. Improvement in NIM primarily led by a decline in the cost of funds. PAT grew at 12.8% YOY & plunged 39.2% QOQ to Rs119.4 cr

>> Banks Moratorium book declined from 51.12% in Q1FY21 to 11.40% in Q2FY21. The aggregate COVID-19 provision of Rs 97.99 crore has been continued in Q2FY21. The COVID provision is less compared to other banks. Currently, Karnataka Bank is trading at 0.22x of trailing book value, Which is lower compared to the historical average. Almost no growth in advance for the last 6 quarters, low CAR ratio, and Moderate RoE for Many quarters could be the reason for depressed valuation. The stock would consolidate till the investor get clarity on restructuring percentage from the moratorium book.

Top losers on BSE at this hour

COMPANY PRICE(rs) CHG(%)
WIPRO 356.10 -5.23
HIMATSING. SEIDE 116.60 -4.07
NTPC 79.60 -3.75
COFORGE 2693.80 -3.60
NCC 31.30 -3.40
» More on Top Losers

BROKERAGE VIEW :: Goldman Sachs on Wipro

Maintains 'Sell' | Target price: Rs 277

>> Due to tight cost controls Wipro reported a beat at the EBIT level, even though top-line growth was largely in line with GS/Bloomberg consensus expectations. Even the guidance for 3Q at 1.5-3.5% QoQ growth was largely as expected. CEO mentioned a 5-point strategy for future business growth momentum which to us at a broad level doesn’t seem too different from what they are already doing currently.

>> With the stock trading at 21.6X FY1 (its 12-year high), which we believe is partly driven by expectations of the share buyback, no material change in near-term growth outlook and our belief that Wipro continues to have the weakest growth profile among its peers; we reiterate our Sell rating with a revised 12-m target price of Rs277 (vs. prior Rs265) implying 26% potential downside. We believe once the buyback support is behind, the stock should re-rate lower reflecting its weaker growth fundamentals where Wipro is expected to continue to lose market share to its larger peers TCS (Buy) and INFY (Buy on CL).

Tata Steel Long Products freezes at 20% upper circuit on robust Q2 results

The company, engaged in manufacturing steel and allied products, reported 52 per cent year on year (YoY) growth in revenue from operations at Rs 1,186 crore in Q2FY21 as against Rs 653 crore in the corresponding quarter of the previous fiscal. It reported EBITDA (earnings before interest, taxes, depreciation, and amortization) of Rs 199 crore during the quarter, compared with loss of Rs 30 crore in the previous-year quarter. READ MORE

BUZZING STOCK | Jindal Stainless surges over 7%


Private banks may see NIMs dip in Q2FY21; loan restructuring roadmap eyed

The July-September quarter for financial year 2020-21 (FY21) may mark the beginning of downtrend in net interest margins (NIMs) for banks, fear analysts. That apart, market participants would watch out for greater clarity on NPA recognition, loan restructuring roadmap, and credit costs for the rest of the year. “Q2FY21 earnings for the BFSI sector will be a reflection of a path half way through normalisation on some parameters, but just the beginning of journey for stress recognition and downward NIM trajectory,” observed analysts at ICICI Securities. READ MORE

Tata Chemicals up around 3%


SBI Cards unveils festive season offers; stock up 4%, hits new high

Shares of SBI Cards and Payments rose 4 per cent and hit a new high of Rs 892 on the BSE on Wednesday in an otherwise weak market after the company said it has kick-started festive season offers in line with the changing shopping trends and customers will be offered discounts as well as cashback across a host of brands. READ MORE 


Rupee Opening

Rupee opens mildly lower at 73.39 per US dollar vs 73.36/$

Sectoral trends :: Banks, metals, IT indices slip 1% each


MARKET CHECK :: 41 of 50 Nifty constituents trade in the red


MARKET CHECK :: Sensex down 300 pts


Result Today :: Infosys' large deal wins to drive Q2 revenue growth, say analysts

Like its peer Tata Consultancy Services (TCS), Infosys, too, is expected to report a strong set of numbers for the quarter ended September 30 of the current fiscal year (Q2FY21), mainly led by the ramp-up of large deal wins. According to Edelweiss Securities, Infosys, being a market leader, will be the key beneficiary of core transformation, higher cloud adoption, and digital adoption. Moreover, the persistent market share loss of key players like Capgemini and Cognizant will also directly benefit Infosys, the brokerage says. The company is expected to unveil its results on Wednesday, October 14. READ MORE

SECTOR WATCH:: Nifty Bank index slips over 1% in early deals


Wipro slips 6% on profit booking after Q2 results, buyback announcement

Shares of Wipro slipped 6 per cent to Rs 534 on the BSE in the early morning trade on Wednesday on profit booking after the company reported a healthy July-September quarter (Q2FY21) results. The company has declared a buyback of 238 million equity shares from its shareholders on a proportionate basis by way of a tender offer. The buyback price is Rs 400 per equity share payable in cash for an aggregate amount not exceeding Rs 9,500 crore. READ MORE

SBI Cards at day's high


Asian Paints slips marginally


UPDATE :: Sensex extends decline, trades near day's low


Hindustan Aeronautics surges 3.6%


L&T Infotech up around 2% in a weak market


Karnataka Bank gains over 4%

>> Net profit of Karnataka Bank rose 12.78 per cent to Rs 119.44 crore in the quarter ended September 2020 as against Rs 105.91 crore during the previous quarter ended September 2019.


Result Impact | Wipro tumbles 5%


Sectoral trends at Open


Sensex Heatmap at Open


First Trade


First Trade


Top gainers and losers on the S&P BSE Sensex at Pre-open


Markets at Pre-open


Markets at Pre-open


NEWS ALERT :: Glenmark launches Nintedanib in India

>> Glenmark Pharmaceuticals has launched NINDANIB (Nintedanib 100 and 150 mg capsules) for the treatment of pulmonary fibrosis in India.

BROKERAGE VIEW :: Kotak Institutional Equities on Wipro

Reco: Add | Fair Value: Rs 380

>> Reported good, in-line Q2 nos

>> Revenue growth guidance for Q3 surprised positively

>> New CEO outlined priorities that seemed reasonable

>> Execution will entail changes that will be known over coming months

>> After a strong buyback-fulled rally, limited upside seen

BROKERAGE VIEW :: Citi on Wipro

Downgrades to 'Neutral' | Target price: Rs 400

>> Sharp re-rating limits upside

>> Revenue slightly ahead of expectations, margin in line 

>> Focus will shift to execution under new CEO 

BROKERAGE VIEW :: Prabhudas Lilladher on Cipla

Rating: REDUCE | CMP: Rs 787 | TP: Rs 657

>> While CIPLA’s US business is struggling with growth issues since last 12 months, it has received an additional setback because of CRL issued (Complete Response Letter) against NDA application for its specialty product IV Tramadol. We believe CRL would delay the approval for at least 3-6 months and final launch may perhaps be in 2HFY22E. Our earnings estimate has not discounted potential benefits from IV Tramadol as we await better clarity of CIPLA’s strategy to market/monetize the products in global markets including US and EU. The product being a specialty medicine, it would take 12-18 months to breakeven, post which it would start contributing in operating profit. However, we prefer to have further clarity post FDA refusal of approval along with issue of CRL and marketing/monetizing strategy of CIPLA in US and ROW. We maintain ‘REDUCE’ with TP of Rs657 based on 22x (PE) of FY22E.

BROKERAGE VIEW :: IDBI Capital on IRCTC

Target price: Rs 1,800 | Reco: Buy

>> We initiate coverage on Indian Railway Catering and Tourism Corporation (IRCTC) with TP of Rs1,800 based on PER of 35x FY23E. We believe that IRCTC is a one-of-its-kind company. In its top-2 segments – internet ticketing and catering services (combined ~89% of FY20 EBIT) – it is the sole service provider. Internet ticketing as digital platform business has seen 302 mn bookings in FY20 with ~73% share in total railway ticket booked in India.

>> In its packaged drinking water business it’s pricing provides a competitive edge. While Covid-19 pandemic will impact FY21 performance, we expect strong pick-up in FY22/23E. We forecast revenue/EBIT/EPS CAGR of 9.2%/14.4%/15.9% over FY20-23E which factors FY23E EBIT/EPS being 4.4x/4x vs. FY21. Further, net-cash B/S and RoE 40%+ over FY22-23 is impressive. Over the long-term, private trains and in- direct benefit from dedicated freight corridor would aid IRCTC’s growth.

Stocks to watch out for today

Karnataka Bank: Net profit of Karnataka Bank rose 12.78 per cent to Rs 119.44 crore in the quarter ended September 2020 as against Rs 105.91 crore during the previous quarter ended September 2019.
 
IRCTC: As per reports, Indian Railways will run 392 festival special trains from October 20-November 30.
 
Wipro: The company on Tuesday approved a share buyback worth Rs 9,500 crore, having improved its performance in the second quarter of FY21 on several parameters, apart from giving a stronger outlook. READ MORE  


BROKERAGE VIEW :: MOFSL on Metals

>> Steel trade data released by China suggests demand remains strong, with net steel exports declining to 10-yr lows in Sep’20. Moreover, high passenger car sales in Sep’20 confirm strong end user demand for steel in China. China’s domestic steel prices are also on the rise again post the National Holidays that ended last week. We believe strong steel demand and prices in China, if it sustains, would be beneficial for steel prices in the region as well as India.

>> We prefer longs over flats in India’s Steel sector as we expect rebar prices to be strong, led by the seasonal (post-monsoon) uptick in construction activity.

Stock recommendation

>> Thus, with ~70% share of long products in its portfolio and TP of INR234, JSP is our preferred pick in the sector. Over FY20–22E, we also estimate strong 10%/16% CAGR in standalone volumes/EBITDA. Coupled with the Oman divestment, this should drive a 37% fall in consolidated net debt to INR239b. Thus, net debt/EBITDA should decline to 2.7x, the lowest in India’s Steel sector.

>> We also assign JSTL a Buy rating (TP of INR317), but rate Tata Steel Neutral (TP of INR381) on concerns related to its European business. We rate SAIL with Neutral (TP of INR35) as leverage remains a key concern.

BROKERAGE VIEW :: MOFSL on Wipro

CMP: Rs 376 | TP: Rs 385 (+2%) | Reco: Neutral

>> Wipro reported better-than-expected revenue growth for the quarter (2% QoQ CC v/s est. 0.5%). Broad-based recovery across verticals, continued margin resiliency, and strong cash generation were the key positives for the company. A robust deal pipeline and improved demand present an encouraging outlook.

>> Management guidance for revenue growth (1.5–3.5% QoQ CC) in 3QFY21 stands above our estimate of 0–2%, which is another key positive.

>> The key contours of the new CEO’s refreshed strategy – growth from focused sectors/markets, continued investment in talent, and a simplified operational model to help improve focus on customers – seem to be steps in the right direction.

>> We upgrade our FY21/FY22E EPS by 3%/2%, largely led by a revised revenue outlook based on guidance. Maintain Neutral as we await further evidence of execution of Wipro’s refreshed strategy and a successful turnaround from its growth struggles over the past decade before turning more constructive on the stock. Our TP implies 20x FY22E EPS.

'Nifty could consolidate between 11,900 and 12,050 in short term'

Nifty outlook
 
From the bottom of 10,790, registered on September 24, 2020, Nifty saw a sharp recovery towards 12,022. Nifty has registered a rise of 1,232 points from the recent bottom in the span of just 11 trading sessions. After such steep rise, Nifty could consolidate for a few sessions. The probable range would be 11,900-12,050. Previous top on the daily charts is placed at 11,794, which is likely to provide support to the index. Any level above 1,2050 could take Nifty towards 12,250 levels. READ MORE

Stock calls by Ajit Mishra of Religare Broking

Tata Chemicals Limited

Recommendation: Buy
 
Target: 324
 
Stop loss:296
 
Tata Chem made an equally sharp reversal after the vertical decline in March 2020 and has made a new record high at 345.90 in August month. After the month-long corrective phase, it's currently holding above the support zone of multiple moving averages on the daily chart around 300 and is likely to resume the uptrend in near future.Traders can create fresh longs in the mentioned zone. READ MORE

Bulk deals on BSE as on Tuesday

Bulk deals on NSE as on Tuesday


FII/FPI & DII trading activity on NSE, BSE and MSEI


FII/FPI & DII trading activity on NSE, BSE and MSEI


Rupee check

Source: Bloomberg


Oil steady as rising coronavirus cases stokes demand concerns

>> Oil prices were steady on Wednesday on concerns that fuel demand will continue to falter as rising coronavirus cases across Europe and in the United States, the world’s biggest oil consumer, could impede economic growth.

>> The Organization of the Petroleum Exporting Countries (OPEC) said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day (bpd) to 96.84 million bpd, 80,000 bpd less than its forecast a month ago, as a result of the economic dislocations caused by the coronavirus pandemic.
 
>> Brent crude futures for December fell by 8 cents, or 0.2%, to $42.37 a barrel while US West Texas Intermediate futures were down 9 cents, or 0.2%, to $40.11.

(Source: Reuters)

SGX Nifty update

>> At 8:19 am, the index was at 11,888 level, down 53 points or 0.44 per cent.

Asian equities slip as vaccine trials, stimulus talks stall

Source: Reuters


Wall Street closes lower on vaccine delay, dampened stimulus hopes

Source: Reuters


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