Sensex gains 453 pts as UK, EU reach Brexit deal; Tata Motors jumps 13%

Equity markets rallied on Thursday after UK President Boris Johnson said that Britain and the European Union had agreed a “great” new Brexit deal and urged lawmakers to approve it at the weekend.

The UK PM tweeted "We’ve got a great new deal that takes back control — now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment." CLICK TO READ REPORT

Following the news, stocks such as Motherson Sumi, and Tata Motors jumped in the last few minutes of the trade. That apart, buying in financial counters, too, lifted markets higher. 

The benchmark S&P BSE Sensex added 453 points or over 1 per cent to settle at 39,052 levels. YES Bank (up 15 per cent) emerged as the top gainer on the index while HCL Tech (down 1 per cent) the biggest laggard. On the NSE, the broader Nifty50 index ended at 11,586.35 levels, up 122 points or over 1 per cent.

In the broader market, mid-caps outperformed the headline indices. The S&P BSE MidCap index surged 247 points or around 2 per cent to end at 14,167 levels, while the S&P BSE SmallCap index gained 114 points or 0.89 per cent to end at 12,914 levels.

Sectorally, all the indices on the NSE but Nifty IT ended in the green. Auto counters advanced the most with the Nifty Auto index rising over 3 per cent to 7,914 levels. Nifty PSU Bank came second on the list with dot 3 per cent gains at 2,217 levels. Nifty IT, on the other hand, ended at 15,282 levels, down 0.41 per cent. 

 
GLOBAL CUES

Emerging market stocks rose for the sixth straight session on Thursday. MSCI's index of emerging market stocks rose 0.3 per cent, in its longest winning streak since an 11-day run in April. Mainland China shares ended flat, while most others in Asia rose, along with those in Turkey and Russia.

MSCI's currency benchmark also firmed as the dollar hovered near one month lows after weak retail sales data dimmed outlook for the U.S. economy and raised bets for an interest rate cut.

(With inputs from Reuters)

4:11 PM IST Markets continued their positive bias for yet another session and gained nearly 1%. The first half was dull, but a sharp surge in the banking index in the latter half pushed the benchmarks higher. Besides, the news of Brexit deal between the UK and European Union (EU) further boosted sentiment. All sectoral indices, barring IT, ended in green. Broader indices, too, posted decent gains.   Markets are currently dancing to the global tunes, in absence of any major event on the local front.  Meanwhile, we’re seeing volatile swings on the stock-specific front which usually happens during the earnings season. We suggest not to get carried away with the recent surge and maintain positive yet cautious approach

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3:36 PM IST The S&P BSE Sensex settled at 39,052, up 453 points or over 1 per cent while NSE's Nifty50 added 122 points or over 1 per cent to end at 11,586. 

3:25 PM IST We’ve got a great new deal that takes back control — now Parliament should get Brexit done on Saturday so we can move on to other priorities like the cost of living, the NHS, violent crime and our environment #GetBrexitDone #TakeBackControl — Boris Johnson (@BorisJohnson) October 17, 2019

3:09 PM IST

3:04 PM IST

2:45 PM IST Weaker NII growth and higher credit costs led to Karnataka Bank?s Q2 FY20 earnings slipping. With a significant portion of its corporate-book stress already recognised, we expect asset quality to stabilise and the bank?s focus to shift toward normalising profitability. We upgrade our recommendation on the stock to a Buy, given its inexpensive valuation and limited downside risk from the current price, with an altered target price of Rs 90 (earlier Rs 126), valuing it at 0.45x P/BV of its FY21e book

LIVE UPDATES

MARKET COMMENT :: Ajit Mishra, vice-president for research, Religare Broking

Markets continued their positive bias for yet another session and gained nearly 1%. The first half was dull, but a sharp surge in the banking index in the latter half pushed the benchmarks higher. Besides, the news of Brexit deal between the UK and European Union (EU) further boosted sentiment. All sectoral indices, barring IT, ended in green. Broader indices, too, posted decent gains.
 
Markets are currently dancing to the global tunes, in absence of any major event on the local front.  Meanwhile, we’re seeing volatile swings on the stock-specific front which usually happens during the earnings season. We suggest not to get carried away with the recent surge and maintain positive yet cautious approach

Tata Motors zooms 13% on the NSE


Nifty snapshot


YES Bank, HUL, SBI among top contributors to Sensex's gain


Sensex heat map :: Tata Motors jumps 10% on Brexit deal


Index watch : BSE


CLOSING BELL

The S&P BSE Sensex settled at 39,052, up 453 points or over 1 per cent while NSE's Nifty50 added 122 points or over 1 per cent to end at 11,586. 

NEWS ALERT | UK PM Boris Johnson tweets on Brexit deal

Index Contributors at this hour


Market check | Sensex surges 400 pts


Anand Rathi Research on Karnataka Bank

Weaker NII growth and higher credit costs led to Karnataka Bank?s Q2 FY20 earnings slipping. With a significant portion of its corporate-book stress already recognised, we expect asset quality to stabilise and the bank?s focus to shift toward normalising profitability. We upgrade our recommendation on the stock to a Buy, given its inexpensive valuation and limited downside risk from the current price, with an altered target price of Rs 90 (earlier Rs 126), valuing it at 0.45x P/BV of its FY21e book

IIFL on MCX

MCX’s 2QFY20 PAT growth of 100% YoY was ahead of estimates, owing to higher than expected treasury income. Operationally, the performance was strong and in-line. Futures volumes grew 40% YoY to Rs345bn (ADT), driven by the bullion and energy segments; also, Ebitda margins expanded 1,500bps YoY. At CMP, the stock trades at 25x FY21ii EPS and further re-rating will be driven by improved visibility on future volume growth. BUY

Jefferies on SBI Life

In terms of distribution, SBI Life is most strongly positioned insurer. While on the product innovation & being early mover, HDFC Life has been ahead of industry by far. For IPRU, in our opinion, distribution capacity is mostly utilized (thus creating growth challenges) while on product innovation, they have generally been behind the curve. In this context, both SBI Life & HDFC Life provide a good case for stable 20%+ EV compounding, and thus, expect valuation multiple gap between SBI Life (trading at 2.7x FY21EV) & HDFC Life (trading at 4.6x FY21EV) to reduce

Real Estate Sentiment Index

Despite a slew of measures to arrest the slump by the government and the Reserve Bank of India (RBI) to boost liquidity and revive demand, a latest survey by Knight Frank – FICCI – NAREDCO - ‘Real Estate Sentiment Index Q3 2019’, shows that the current sentiments of the real estate stakeholders in India has plummeted further to 42 in the July-September quarter of 2019 (Q3 2019) from the preceding quarter - a level previously seen during the heightened uncertainty period of pre-election in the first quarter of 2014 and the demonetisation period (41) in the last quarter of 2016.

The future sentiment, or the outlook for the coming six months, has also turned ‘pessimistic’ for the first time since the inception of this survey, a clear indication that the sector is under immense pressure. However, sentiment toward the commercial real estate sector have remained steady, with the outlook for the new office supply strong for the coming six months. A score of over 50 signifies ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’, while a score of below 50 shows ‘Pessimism’.


BUZZING IN TRADE | YES Bank advances 17%


Elara Capital on Federal Bank (FB)

The stock has fallen by 17% over the past quarter. At the CMP, FB seems to be offering a good risk-reward proposition at 1.1x FY21E P/ABV. We expect a ROA of 0.95% and 0.90% in FY20E and FY21E, respectively, aided by the benefits from a tax cut, which would partially offset higher credit cost. Hence, we upgrade the stock to Buy from Reduce with a minor change in target price to Rs 104 (from rs 105) at 1.5x (unchanged) P/ABV H1FY20E

BUZZING STOCK | Bandhan Bank falls 11% in two days on profit-booking

In the past two weeks, Bandhan Bank has outperformed the market by surging 33 per cent on run-up to inclusion in the MSCI Standard Index, effective October 15, 2019. The stock hit a 52-week high of Rs 638 on Tuesday. In comparison, the S&P BSE Sensex was up 0.52 per cent during the same period. READ MORE 

NEWS ALERT | China-US discussing next phase of Trade Talks: China’s Commerce Ministry Spokesman Gao Feng

(As reported by Bloomberg)

Pharma Q2 Preview: Lack of new US approvals to overshadow domestic revival

Amid rising regulatory risk in the sector, pharmaceutical companies are likely to post 7-8 per cent earnings growth on a 12 per cent year-on-year (YoY) revenue growth. Aggregate revenue growth would be the lowest in the last four quarters, point out analysts, who say that a decline in approvals and a lack of meaningful launches would drag the US market growth. READ MORE

Market check


BUZZING STOCK | Nocil advances 6%


Chart Check | Glenmark and Lupin: Are pharma stocks a good contrarian bet?

Thus far in the calendar year 2019 (CY19), most pharma stocks have underperformed the market by falling up to 59 per cent. Barring Divi's Laboratories (up 16 per cent) and Dr. Reddys Laboratories (up over 3 per cent), all the other scrips in Nifty Pharma index have been under pressure. READ MORE 

HUL hits record high during the day


Global fund managers stay bearish on equities; recession top worry: BofAML

According to BofAML, trade war, monetary policy impotence, bond market bubble and a credit event are some of the other 'tail risks' that the fund managers seem to be wary about. 18 per cent fund managers expect short-term rates to rise over 12 months, a strong reversal from September 2018 when 87 per cent expected higher short-term rates. READ MORE 

BUZZING STOCK | Mishra Dhatu Nigam gains around 3%


Market check | Sharp surge in Sensex


Market check


NIIT falls 15% as stock turns ex-date for share buyback

On August 10, 2019, NIIT's Board had approved to buyback up to 26.8 million equity shares at Rs 125 per share for Rs 335 crore. Accordingly, October 18, 2019, was fxed as the record date for the purpose of determining the entitlement and the name of the equity shareholders who shall be eligible to participate in the buyback. READ MORE 

NCDEX's turnover halved in two weeks over castor seed futures default

The turnover at National Commodity & Derivatives Exchange (NCDEX), the country’s largest futures trading platform in agricultural commodities, has declined by 52.5 per cent in the past two weeks.
 
This follows dozens of client defaults in castor seed contracts. Total turnover fell below Rs 1,000 crore on Tuesday, from the Rs 2,179 crore recorded on September 30 but recovered a little on Wednesday and in day session it was Rs 1,035 crore. The share of castor seeds was a fourth of the total at end-September, or Rs 538 crore; it was Rs 75 crore on Tuesday or 8.9 per cent in total volume. READ MORE

Edelweiss on metals and mining sector

Domestic HRC price has slipped below Rs 35,000/t for the first time since August 2016. Spot raw material (RM) spread is also down 25% YoY to Rs 20,785/t. Despite an unprecedented nineteenth successive week of decline, we do not rule out further pressure on domestic prices as: 1) international prices are cooling off further; and 2) still no signs of demand pick up. Also, inventory build up is yet another cause of concern, which is likely to lead to slow recovery. We retain our cautious view on the sector with ‘REDUCE’ on SAIL, ‘HOLD’ on Tata Steel & JSW Steel and ‘BUY’ on JSPL.

Anand Rathi Institutional Research on Mindtree

Despite management change, Mindtree had a strong Q2. Stable collections cycle and manageable rise in attrition suggest better operations while deal wins suggest continuing client confidence. Given its TCV, we expect ~8.4%revenue growth over FY20-FY21, and significant margin expansion. Valuations are supportive at 15.5x FY21e PE. We retain our Hold rating with a revised target of Rs 770 (earlier Rs 690).

IAG to sell stake in SBI General Insurance to Premji Invest, Warburg Pincus

Public sector lender SBI on Thursday said its joint venture partner IAG will sell entire 26 per cent stake in its subsidiary SBI General Insurance to Napean Opportunities and WP Honey Wheat lnvestment Ltd for an undisclosed amount. READ MORE 

Mindtree slips 3% post Q2 nos; should you buy? Here's what brokerages say

Analysts at Motilal Oswal believe given the healthy pipeline and the ramping of projects on schedule, revenue growth is likely to remain above industry average but margin improvement is likely to be slower-than-anticipated earlier. Reason - limited margins support from utilisation which is already at peak levels and Pyramid rationalisation and the change in effort mix are seen to benefit only gradually. READ MORE 

PNB Housing to raise up to Rs 10,000 cr by issuing bonds in tranches

PNB Housing Finance will raise up to Rs 10,000 crore by issuing bonds in tranches, the company said on Wednesday.
 
The company's board will meet on October 24 to declare quarterly earnings for the second quarter of this fiscal and will also consider proposal to raise fund, the bank said in a regulatory filing.
 
The board will consider the issuance of secured and unsecured non-convertible debentures aggregating up to Rs 10,000 crore in tranches, PNB Housing Finance said.
 

SBI Life hits new high on strong Q2 results, rallies 10% in two days

Shares of SBI Life Insurance extended their rally for the second straight day and hit a new high of Rs 928, up 6 per cent on the BSE on Thursday, after the company reported strong earnings in July-September quarter (Q2FY20). The stock of the life insurance company, which has surged 10 per cent in the past two days, was trading at its highest level since listing on October 2017. READ MORE

NEWS ALERT | InterGlobe Aviation files litigation in Florida, Maryland against Rakesh Gangwal: CNBC TV18

-- IGE, Rahul Bhatia file application against Gangwal, members of RE Group

-- IGE also files application against IndiGo's independent director Anupam Khanna in Maryland.

NEWS ALERT | SC hits pause on revised NBCC bid in Jaypee case: CNBC TV18

-- NBCC submits revised bid in a sealed cover

-- SC to consider to challenge NCLAT order 

-- SC to decide whether JP Assoc can bid for resolution of Jaypee Infra 

-- Next hearing on Oct 22

MARKET CHECK | Top 5 gainers on the BSE at present


Eicher Motors hits over 3-month high on positive outlook, up 11% in one week

In the past week, it has rallied 11 per cent, as compared to a 2 per cent gain in the S&P BSE Sensex. The stock hit a 52-week low of Rs 15,197 on August 26. Analysts believe that worst is behind for Eicher Motors, the manufacture of premium motorcycle brand Royal Enfield (RE) in India, as it is taking promising initiatives to address the declining sales performance. READ MORE 

Mining entities in Karnataka expect iron ore prices to drop further

To ensure seamless renewal of mining leases allocated to the government companies, the Union government recently amended the Minerals (Mining) by Government Companies Rules, 2015. A major beneficiary would be NMDC, which got into a legal battle with the Karnataka government over Donimalai, after it was asked to pay a premium equivalent to 80 per cent on what was extracted from there for lease renewal. Instead, NMDC went to court and stopped mining operations last November. READ MORE

BROKERAGE RADAR | Edelweiss Securities on steel stocks

We find the current decline in steel price unnerving. Over the past four months, the cumulative dip in steel prices has been Rs 6,675/t (16%), enough to test the resilience of even the fittest operating models. Our estimates remain below consensus and we find significant risk to the Street’s earnings estimates, especially Tata Steel and SAIL, as the prevailing low prices are still not reflecting. We retain our cautious outlook on the sector with price competition/erosion in exports market exacerbating the situation. In our view, JSPL is expected to fare relatively better due to its exposure to longs and niche products such as rails and specialty plates. We maintain ’REDUCE/SU’ on SAIL, ‘HOLD/SP’ on Tata Steel & JSW Steel and ‘BUY/SO’ on JSPL.

BROKERAGE RADAR | ICICI Securities on SBI Life Insurance

Despite slower premium accretion in industry, SBI Life Insurance continued with its robust growth trajectory. Improving persistency, high margin protection business and a tab on cost are seen working in favour of improving VNB margin to 17.2 per cent in FY21E. We expect ~18 per cent CAGR in EV in FY19-21E to Rs 31,048 crore. Strong distribution would remain the key catalyst. Operating RoEV is seen improving at ~18.2 per cent in FY20-21E. Hence, we revise our TP to Rs 1,000 (earlier Rs 920), valuing the stock at 3.2x FY21 EV.

BROKERAGE RADAR | JM Financial on Federal Bank

We factor in the moderation in loan growth and NIMs in our estimates and also marginally increase our credit cost estimates for the year. As a result, we have cut our EPS estimates by 12% / 10% for FY20E / FY21E. We believe downside maybe limited at CMP as FB now trades at inexpensive valuation of 1x FY21E adj. Book value of equity per share (BVPS). Maintain BUY with a TP of Rs 110, valuing FB at 1.4x FY21E adj BVPS. 
 

BROKERAGE RADAR | Edelweiss Securities on Mindtree

We believe, the current management team has the requisite capability to firmly place Mindtree on the growth path. Sustained margin recovery hereon also portends healthy earnings growth over the next two-three years. We maintain ‘BUY/SO’ with target price of Rs 853 (16x FY21E EPS).

Momentum picks by ICICI Securities


NEWS ALERT | Promoters will reduce pledges completely over next few months: GP Goenka, ch'man, Star Paper Mills to CNBC-TV18


NEWS ALERT | Don't think govt can help Discoms w.r.t payments: SC Garg, Power Secy to CNBC TV18

-- Mismatch of Rs 1.5 trillion YoY between cost of production and selling price

-- Flash floods led to temporary disruptions in coal supply

-- See some power contraction due to slowdown in manufacturing

-- Discoms have been making payments regularly since August

-- Need to address leveraged balancesheets

NEWS ALERT | DHFL clarifies on ICRA’s downgrade of pooled loans to default


STOCK ALERT | J.Kumar Infra gains 4% after 1% equity changes hand on exchanges



Suven Life Sciences gains over 2%

-- CRISIL has assigned A rating to Suven Life Sciences' long-term bank facilities and placed on ‘Rating Watch with Positive Implications'

BUZZING STOCK | Bajaj Consumer extends gains, surges over 14%


Hathway climbs nearly 5% post Q2 results


BUZZING STOCK | Mindtree slips over 1.50% post Q2 nos


Sectoral gainers and losers on the NSE


MARKET WATCH | Top gainers and losers on the S&P BSE Sensex


OPENING DEALS

At 09:20 am, the S&P BSE Sensex rose 79 points or 0.21 per cent higher at 38,678.15 levels while NSE's Nifty50 index was ruling at 11,470.80 levels, up 7 points or 0.06 per cent.

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


Market at Pre-open


Market at Pre-open


Rupee Opening Alert

Rupee opens at 71.38/$ vs Wednesday's close of Rs 71.44

Crucial Diwali for jewellers: Will consumers lift demand for the industry?

The festive season has kick-started with record-high gold price amid the economic slowdown. consumers preferring to stay put rather than spending has impacted the jewellery industry badly.
 
If this Diwali season fails, the industry is expected to face huge losses. Rajesh Bhayani explains the relevance of Diwali demand this year. READ MORE

India International Exchange plans to waive fee to lure rupee trade home

The India International Exchange (IFSC) Ltd., also known as India INX, plans to waive commissions initially, a strategy it used to bolster liquidity in its equity and gold derivatives contracts.
 
“We will compete with lowest-cost access,” V. Balasubramaniam, chief executive at the bourse based in the tax-incentive zone in the GIFT City, said in an interview. “For us, the cost of running a market is much lower as manpower and infrastructure costs at the IFSC are small.” READ MORE

Low delivery-based volumes underscore bearish sentiment in markets

The falling delivery-based volumes are underscoring the bearish undercurrent in the market, say experts. Trades marked for delivery have been dipping consistently since July.
 
For the month of September, they stood at 31.3 per cent, even as the average daily cash market turnover surcharged past Rs 40,000 crore. Since 2005, the monthly cash market turnover has been in excess of Rs 40,000 crore on only four occasions, and the average delivery-based volumes has been 31 per cent or below on only nine occasions. READ MORE

Jio says rivals fraudulently claiming IUC; asks Trai to slap penalties

It asked Telecom Regulatory Authority of India (Trai) to penalise the three entities and to direct them to refund the money, with interest.
 
In a letter to Trai, it alleged the three firms have allotted mobile numbers as customer care or helpline numbers to companies such as Oyo, Justdial, and Videocon D2H. READ MORE

Stocks to watch: DHFL, TVS Motor, ZEEL, YES Bank, ICICI Lombard, Mindtree

Here's a look at the top stocks that may remain in focus today -
 
Earnings today: As many as 19 companies, including DHFL, PVR, TVS Motor, and Zee Entertainment Enterprises, are scheduled to announce their September quarter results today.
 
Indiabulls Housing Finance: As per BSE filing, the rating committee of CRISIL has reaffirmed the long-term rating of Indiabulls Housing Finance Limited at “CRISIL AA+”. Short-term rating has been reaffirmed at “CRISIL A1+”. The watch resolution of negative outlook follows the announcement of RBI not approving the merger of IBH with LVB. READ MORE

Mindtree posts muted revenue growth in Q2, net profit down 34.6%

Mid-sized information technology (IT) services firm Mindtree on Wednesday posted 34.6 per cent decline in its net profit at Rs 135 crore for the second quarter of FY20 when compared with the corresponding period of the previous financial year.
 
The decline in net profit was attributed to higher expenses arising out of payout to employees apart from absence of gains from currency movement, which it reported in Q2 of FY19. In sequential terms, however, net profit grew by 46 per cent. READ MORE HERE

MFs up the ante on private banks, increase weight to nearly 21%

Mutual funds (MFs) have increased their weight on private banks to a new high of 20.8 per cent in September. With some of the players in the financial space facing heat on their loan exposures, money managers are of the view that better-run private banks are poised to corner higher market share.
 
Private banks are the top sector holding for MFs, followed by non-banking financial companies (8.9 per cent), technology (8.7 per cent), consumer (8.4 per cent), and capital goods (7.8 per cent), showed a report by Motilal Oswal Financial Services. READ MORE

Market Ahead, October 17: All you need to know before the Opening Bell

Markets are trading in the positive zone and are likely to maintain the up-move albeit in narrow range. The upside move on the Nifty could face resistance at 11,600 mark in the short-term.
 
For today, market investors would eye corporate earnings to steer through the trade. About 19 companies, including DHFL, Zee Entertainment, Force Motors, and TVS Motors are scheduled to report their September quarter earnings later in the day. LISTEN TO PRE-MARKET PODCAST

Today's picks: From Hero MotoCorp to BPCL, hot stocks to watch on Thursday

Nifty
 
Current: 11464 (fut: 11483)
 
Target: NA
 
Stop long positions at 11375. Stop short positions at 11575. Big moves could go till 11625, 11325. Short-term trend could be positive. A long Oct 24 11600c (45), short 11700c (20) could gain 15-20 if the index tests 11600. READ MORE

Market Outlook | Nagaraj Shetti – Technical & Derivative Analyst, HDFC Securities

Short term trend is positive for Nifty
 
The uptrend continued in the market amidst a range movement and the Nifty moved up and closed the day higher on Wednesday. A 'doji' type candlestick pattern was formed yesterday (upper and lower shadow with identical open and close) at the swing high of 11,465 levels.
 
Technically, the formation of doji after a reasonable upmove could be considered as a warning signal for the bulls about trend reversal down. But, we need confirmation of weakness below the low of yesterday's doji (11,411) to call this as a trend reversal down pattern. Previously (on 14th Oct), a formation of similar type of doji was nullified with uptrend continuation pattern.
 
The short term trend of Nifty is positive, the next upside resistance to be watched around 11,560-600 levels.

Nifty outlook & stock picks by CapitalVia: Buy Axis Bank, Avenue Supermarts

As per monthly option data, put writing on strikes ranging from 11,300 to 11,500 which shows Nifty likely to take support in sub-11,400 zone. Call unwinding on lower strikes shows weakening of resistance on lower levels ranging from 11,200 to 11,300. Trader should remain positive bias as market is trading above 200-day and 50-day EMA stands in the zones of 11,220 and put OI at 11,000 will act as major support for the month, but 11,500 will act as stiff resistance as maximum OI for the calls stands here. READ MORE HERE

Bulk deals on BSE as on Wednesday

Bulk deals on NSE as on Wednesday

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


Rupee Check

Source: Bloomberg


Oil Check

-- Oil prices eased after U.S. data showed a larger-than-expected build in U.S. crude stocks, reported Reuters

-- At 8:08 am, Brent Crude Futures were at $59 per barrel mark, down 0.71 per cent.

SGX Nifty

At 8:05 am, the Singaporean Exchange for Nifty Futures were trading at 11,492.5 level, up 6.5 points.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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