F&O Expiry: Sensex climbs 396 pts, Nifty ends at 11,573; Vedanta jumps 7%

Topics Markets | F&O series | MARKET WRAP

After a two-day consolidation, equity market staged a smart rebound on Thursday to end the last day of the September series of futures & options (F&O) contracts on a positive note. Across-the-board buying and hopes of US-China trade truce after US President Donald Trump said on Wednesday a deal to end a nearly 15-month trade war with China “could happen sooner”, boosted investor sentiment. 

The S&P BSE Sensex climbed 396 points or 1.03 per cent to end at 38,989.74, with Vedanta (up 7 per cent) being the top gainer and YES Bank (down 5 per cent) the biggest loser. Out of 30 constituents, 23 ended in the green and rest seven in the red. 

In the broader market, the S&P BSE MidCap gained 131 points or 0.92 per cent to close at 14,355.70 levels and the S&P BSE SmallCap index settled at 13,440.49, up 57 points or 0.42 per cent. 

On NSE, the broader Nifty50 index settled at 11,573.30, up 133 points or 1.22 per cent, with 41 constituents advancing and 9 ending in the red. 

Among the sectoral indices on the NSE, barring IT, all the indices settled in the positive zone. Metal stocks rallied the most, followed by realty and auto stocks. The Nifty Metal index gained 4.32 per cent to end at 2,525. On the other hand, Nifty IT index ended at 15,317, down 0.29 per cent. 

BUZZING STOCKS

ICICI Bank’s market capitalisation (m-cap) inched towards Rs 3 trillion-mark as the stock of the private sector lender hit a new high of Rs 458, up 6 per cent on the BSE in the intra-day deals on Thursday. The stock closed at Rs 452, up 4 per cent. 

Shares of YES Bank dipped 5 per cent on the BSE to hit a six-year low of Rs 50.85 on Thursday despite the private sector lender assuring investors that it was on course to raise growth capital. The scrip ended 5 per cent lower at Rs 51 apiece. READ MORE

Shares of Bharat Petroleum Corporation Limited (BPCL) gained for the fifth straight day, on reports that the government was considering selling its stake to a global oil company. During the session, it traded at its highest level since February 2018. At close, shares of the company stood at Rs 480, up over 3 per cent. READ MORE

GLOBAL MARKETS

Asian stocks pared gains on Thursday and safe-haven assets rose as optimism for a quick resolution to the US-China trade war faded. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 per cent. Japan’s Nikkei slid 0.12 per cent. The pan-region Euro Stoxx 50 futures were down 0.09 per cent, German DAX futures were down 0.02 per cent, while FTSE futures fell 0.03 per cent. US stock futures fell 0.18 per cent on Thursday, following a 0.62 per cent increase in the S&P 500 on Wednesday.

(With inputs from Reuters)


LIVE UPDATES

MARKET COMMENT :: Rahul Mishra, AVP (Derivatives), Emkay Global

NIFTY started September month around 10,800 and was struggling to cross the 11,000 resistance, as the initial stimulus from the FM did not help improve investor’s sentiment. The index is currently trading above the 50-and 200-DMA.

We believe 11,300 will be the support level for the NIfty, and it will face resistance at 11,600. From derivative point of view, FIIs have doubled their position in Index futures during the month so far. The monthly options data suggests a range of 11,000-11500 for October. However, 12000 Call holds decent open interest, making it the next resistance level that the index will face.

Top contributors to Sensex's gain today


REALTY STOCKS: Godrej Properties rallies over 8%


M&M, TVS Motor top gainers in auto sector; MRF sole loser


Auto, realty stocks gain


Sensex heat map


CLOSING BELL

The S&P BSE Sensex surged 396 points or 1.03 per cent to settle at 38,989.74 while NSE's Nifty50 index ended at 11,573.30, up 133 points or 1.22 per cent. 

 

NEWS ALERT | Divestment of state-run companies is the top priority for the next 3-4 years: DIPAM official to CNBC TV18

-- Official says current Govt strongly in favour of privatisation

-- Restricted divestment via OFS last FY due to market volatility

Market check


ICICI Securities initiatives coverage on KNR Constructions

KNR Constructions (KNR) is a leading road-focused EPC player with over two decades of experience and a reputation for completing projects on time/ahead of schedule. With a strong orderbook of Rs 6,519 crore and rapid execution of captive hybrid annuity model (HAM) projects and large ticket irrigation projects, it is well on track to achieve 19 per cent CAGR in revenues to Rs 3,031.1 crore in FY19-21E. We also like KNR’s focus on monetising its under construction HAM projects (Cube Highway deal for four HAM projects at 1.8x P/BV). Considering strong execution and better EBITDA margins with best in class WC cycle and healthy balance sheet, we initiate coverage on KNR with a BUY rating on the stock and SoTP target price of Rs 300/share.

NEWS ALERT | Sadbhav Infra arm gets concession period from Maha govt; stock down over 6%


5.1% equity of ICICI Lombard gets exchanged; stock up 4%


Financials rally up to 7% on report govt could notify NBFC resolution rules

Under the process, the government is likely to introduce a special window under section 227 of the Insolvency and Bankruptcy Code (IBC), which would give "special dispensation" on who could initiate the resolution process, on moratorium, and to resolution professional, business channel CNBC TV-18 reported. READ MORE  

FM to discuss external benchmarking of loan, MSME credit with private banks

When Finance Minister Nirmala Sitharaman meets top management of private banks and financial institutions on Thursday, she might discuss external benchmarking of retail loans as mandated by the Reserve Bank of India (RBI) from October 1, and how banks were spreading awareness among customers about the move. The meeting will begin at 5:30 pm.
 
Concerned over poor transmission of interest rates by banks, the RBI had earlier this month mandated that all banks will have to link retail loans with an external benchmark, such as the repo rate. All lenders are supposed to introduce such products by October 1. READ MORE

RITES surges 19% in 1 week on Rs 160 crore order win from Sri Lanka

Shares of RITES hit a new high of Rs 280, up 5 per cent on Thursday, surging 19 per cent in one week after the company signed Rs 160 crore contract with Sri Lanka government for supply of two additional fully air-conditioned Diesel Multiple Unit (DMU) train sets. 
 
The stock of state-owned construction & engineering company was trading at its highest level since listing on July, 2018. READ MORE

NEWS ALERT | Govt favours early resolution of Hindustan Zinc case in SC: CNBC-TV18

- Govt plans to sell residual stake in the company in tranches; 

- Govt currently holds 29.5% stake in Hindustan Zinc

Around 66 securities hit 52-week low on NSE

Symbol Security New 52W/L Prev. Low Prev. Low Date LTP Prev. Close Chng % Chng
ADHUNIK Adhunik Metaliks Limited 0.95 1.00 25-Sep-2019 1.00 1.00 0.00 0.00
ADLABS Adlabs Entertainment Limited 2.85 2.95 24-Sep-2019 3.05 3.00 0.05 1.67
ADROITINFO Adroit Infotech Limited 7.25 7.60 25-Sep-2019 7.25 7.60 -0.35 -4.61
ALOKTEXT Alok Industries Limited 1.75 1.80 25-Sep-2019 1.75 1.80 -0.05 -2.78
ASSAMCO Assam Company India Limited 0.55 0.55 20-Sep-2019 0.60 .60 0.00 0.00
BALLARPUR Ballarpur Industries Limited 0.50 0.50 25-Sep-2019 0.55 .55 0.00 0.00
BARTRONICS Bartronics India Limited 2.10 2.10 25-Sep-2019 2.10 2.10 0.00 0.00
 
Click to view full list

(Source: NSE)

NCLAT allows Dutch court administrator to attend Jet Airways CoC meetings

The Appellate Tribunal also set aide the earlier order of the Mumbai bench of the National Company Law Tribunal (NCLT), which had denied to recognise the Dutch insolvency proceedings. NCLT had barred Dutch Court Administrator from taking part in the Jet Airways insolvency proceedings in India. READ MORE  

Kotak Securities on aluminium firms

With strong supply pipeline in China combined with slowing demand, we see the aluminum market returning to surplus in 2020E. Easing supply constraints in raw materials (alumina, anode and coal) should keep costs depressed and aluminum prices under pressure. We cut our aluminum price forecast by 4-5 per cent to US$1,775/1,800/ton in FY2020/21-22E. We cut fair value of Hindalco to Rs 235 (Rs 242 earlier), NALCO to Rs 37 (from Rs 38) and maintain our ratings.

Axis Bank raises Rs 12,500 crore via QIP to enhance capital adequacy

The QIP issuance was done at a price of Rs 629 per equity share at a tight discount of 1.44 per cent over the closing price of the issue opening date, that is September 19. The QIP issuance price of Rs 629 per equity share is at a discount of 4.91 per cent to the floor price of Rs 661.50 per equity share, determined as per the SEBI formula. READ MORE 


Market check


HDFC Bank is the most valued brand in India, LIC takes second spot: Survey

HDFC Bank saw its brand value increases five per cent, growing slow but at a steady clip, to keep the top spot. “HDFC has utilised the digital ecosystem well and secondly they were very prudent about their business decisions. They are with the customers, walking with the times,” said Vishikh Talwar, chief client officer, Kantar Insights Division. READ MORE

NEWS ALERT | IPCA Labs to issue 5 lakh convertible warrants at Rs 955 each

NEWS ALERT | LIC will have to dilute its excess shareholding in NSE as per regulations: Sebi chairman

-- Not aware of any deadline w.r.t LIC’s stake sale

-- Says, it has been asked to meet the limits under 5-15%

NEWS ALERT | Examining the Securities Appellate Tribunal's (SAT) ruling on PwC: Ajay Tyagi, Sebi chairman

-- Says, would take a call on whether to challenge SAT order or not 

Alert: SAT ruling said that SEBI cannot regulate auditors

Market check


NEWS ALERT | TCS bags fresh order from a UK co for core digital banking: BSE Filing


ICICI Bank m-cap nears Rs 3 trillion-mark; stock hits record high

The stock surpassed its previous high of Rs 450 touched on September 23 in the intra-day deal. With Rs 2.95 trillion m-cap, ICICI Bank is just 2 per cent or Rs 5,000 crore away to hit the landmark. READ MORE 

NEWS ALERT | FM Nirmala Sitharaman to meet private sector banks, and financial institutions today at 5:30 pm: Govt official

-- FM to address media at 7-7:30 pm
FM Nirmala Sitharaman

India's animal spirits are hushed as consumer demand remains subdued

Activity in India’s private sector eased in August from a month ago, reflecting a slowdown in new business. The weakness in both manufacturing and services activity was reflected in the purchasing managers surveys, contributing to a fall in the composite index to 52.6 during the month from 53.9 in July. READ MORE HERE

Imports of paper & paperboard up 29.5% in Q1; capacity utilisation drops

The development comes at a time, when despite a growing demand in the domestic market, rising imports have reduced paper manufacturers' capacity utilisation to around 75-80 per cent. According to Central Pulp & Paper Research Institute (CPPRI) data, out of 861 paper mills in the country, only 497 are operational, showing the stress in the industry. READ MORE  


Index Contributors at this hour


NEWS ALERT | Fund-raising via IPOs or debt needs to pick-up: SEBI Chairman

- Expect an uptick in municipal bonds post recent measures; 

- Secondary market w.r.t. to depth needs to develop more; 

- Have set-up innovators platform for listing of startups;

-AIFs could contribute significantly towards channelising of funds; 

- Rights issues have recently seen a pick-up. 

NEWS ALERT | IL&FS moves NCLAT, seeks to recover Rs 140 cr held with Gujarat Discom: CNBC TV18

-- NCLAT Observes: IL&FS is looking at resolution, expect Gujarat discom to release the amount 

-- The tribunal issues notice to Gujarat Urea Vikas Nigam & seeks reply

-- NCLAT to hear the case next on October 15

BPCL zooms 34% in September, set to post sharpest monthly rally in 11 years

With this,the stock of the public sector oil behemoth is set to post its sharpest monthly rally in 11 years. Thus far in September, the share price of BPCL has zoomed 34 per cent, as compared to a 5 per cent rise in the S&P BSE Sensex. Previously, the stock logged a rally of 47 per cent during July 2008. READ MORE

MARKET CHECK | Top losers on the BSE at this hour


MARKET CHECK | Top gainers of the BSE at this hour


YES Bank hits 6-yr low despite being 'on course' to raise growth capital

The stock has declined 9 per cent in the past two trading days and was trading at its lowest level since September 5, 2013, when it hit a low of Rs 49.50 in the intra-day deal. At 09:56 am, YES Bank was the biggest loser among the S&P BSE Sensex stocks, down 3 per cent, as against a 0.87 per cent rise in the benchmark index. READ MORE 


YES Bank Photo: Reuters

Market check | Sharp rally in Sensex


NEWS ALERT | NHPC signs MoU with Government of Himachal Pradesh for project worth Rs 4,112 Crores: BSE Filing

-- Project for execution of 449 MW Dugar HE Project located in Chamba District, Himachal Pradesh.

-- It will generate 1610 MUs in a 90% dependable year with 95% machine availability

NEWS ALERT | Dilip Buildcon bags order from Coal India's subsidiary in MP; stock up 3.50%


Cut in corporate tax rate mildly credit positive for construction & infra firms: ICRA

Many large-size construction companies were paying an effective tax rate of over 30%, which will come down to ~25% with the revision in the corporate tax rate, provided they avail the lower tax rate option. Some construction companies with focus on infrastructure projects were paying a lower effective tax rate in the last few years as they were availing of the tax exemptions under Section 80-IA for projects which started execution before April-2017. Since, this tax exemption was project-specific and most of these projects are either completed or likely to be completed by FY2020, the effective tax rate for such companies was also expected to go up from FY2020/FY2021 onwards. With the reduction in corporate tax rate, such companies would also benefit from lower corporate tax rate. Some construction companies have sizeable MAT credit entitlement/assets on their books and hence clarity on whether they will be able to use this post moving to the lower corporate tax regime would be crucial.  
 

MOFSL on auto sector

We believe that the sizeable corporate tax cut (10%) by the government improves the long-term attractiveness of the auto sector, as the cyclical revival in demand
would be complemented by disproportionate RoE improvement due to lower taxes. Our top-picks are Maruti Suzuki India (MSIL) and Motherson Sumi (MSS) in large-caps, while Ashok Leyland and Endurance Technologies are our mid-cap picks. We remain cautious on mainstream 2W players due to disruption from BS6 and faster electrification in hypercompetitive environment. However, Eicher Motors (EIM) is our only pick from 2W space.
 

Nifty IT index slips


Momentum Picks by ICICI Securities


Market check


Gati locked in 5% upper circuit band

Allcargo Logistics is in talks to buy a stake in smaller rival Gati Ltd, Bloomberg reported citing sources, as India’s biggest cargo company attempts to boost its presence across Asia’s third-largest economy.


IDBI Bank dips over 2%


MOIL gains 2.6%

HSBC has upgraded the stock to buy with the target price Rs 180 /share.


Financials rally on report Govt could notify rules for resolution of NBFCs


IndiGo hits 52-week high

Morgan Stanley has raised target price of Rs 2,261, up 25 per cent from its current market price


Glaxosmithkline Pharma slides over 3%


Sterlite Technologies jumps over 3.5%

Broadband solution provider Sterlite Technologies said its Mauritius-based arm has signed a pact to acquire entire stake in the UK-based Impact Data Solutions at an enterprise value of around Rs 105 crore.


YES Bank dips over 2%

In a regulatory filing, the private sector lender said it is awaiting Reserve Bank of India (RBI) approval to increase the authorised share capital of the bank before a planned share sale.


CG Power gains 5%

The company has appointed Ashish Kumar Guha as its chairman, after Gautam Thapar was ousted from the position in August for allegedly being involved in financial irregularities.


DHFL dips 4%


NEWS ALERT | 19.4 lakh shares of ZEEL trade in a block deal on NSE


Sectoral trends at NSE during Opening trade


Top gainers and losers on S&P BSE Sensex during Opening trade


Market at Open


Market at Open


NEWS ALERT | Govt likely to bring resolution plan for NBFCs: sources to CNBC TV18

-- Govt to carve out special window under IBC Sec 227

-- Under the window, govt to clarify who could initiate bankruptcy, provide moratorium for resolution professional

-- MCA to issue only notification for rules in next two weeks

-- Govt to avoid regular IBC process for NBFCs

Rupee Opening Alert

Re opens mildly higher at 70.97/$ vs Wednesday's close of Rs 71.03

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


Market at Pre-open


Market at Pre-open


Govt measures don't address slowing consumption demand, says Matt Wacher

The reduction in the corporation tax will boost earnings, but for sustained growth there needs to be a revival in consumption demand, says Matt Wacher, chief investment officer (Asia Pacific), Morningstar’s Investment Management Group. In an interview with Samie Modak, Wacher says the investment manager is underweight on India. READ FULL INTERVIEW HERE
Matt Wacher, chief investment officer (Asia Pacific), Morningstar’s Investment Management Group

BNP sees second-order boost on corporate tax cut, tweaks stock picks

The brokerage has re-balanced its “quality list” of stocks again, after having made adjustments a day before the government reduced corporation tax rates (September 20).
 
This time, it added firms ranging from large-cap stocks such as Britannia Industries to smaller names like Manappuram Finance, wrote Abhiram Eleswarapu, head (equity research), BNP Paribas Securities, in a note published on September 24. READ MORE

Market Ahead, September 26: Top factors that could guide markets today

Markets are expected to remain volatile today as investors adjust their positions for the Sept series of Futures and Options contracts, which expire today. As per technical evidence, a 'bearish belt hold' pattern was formed on the daily charts yesterday, suggesting indecisive move ahead. LISTEN TO PRE-MARKET PODCAST HERE

Stocks to watch: CG Power, YES Bank, Sterlite Tech, NTPC, GSK Pharma, ZEEL

Here's a look at the top stocks that may remain in focus today -
 
ZEEL: Essel group promoters have decided to concentrate on selling their non-media assets rather than looking for further dilution of their shareholding in Zee Entertainment Enterprises (ZEEL) through a stake their current shareholding in ZEEL is 24 per cent.
 
CG Power: The company has appointed Ashish Kumar Guha as its chairman, after Gautam Thapar was ousted from the position in August for allegedly being involved in financial irregularities. READ MORE

Sebi eases norms for registration of FPIs, junks 'broad-basing' criteria

The Securities and Exchange Board of India (Sebi) on Wednesday issued a notification for easing the process for on-boarding overseas investors. The notification states that foreign portfolio investors (FPIs) are no longer required to meet the ‘broad-basing’ criteria, under which at least 20 investors were required to establish a fund. READ MORE

Today's picks: From Infosys to YES Bank, hot stocks to watch on Thursday

Infosys
 
Current: Rs 792
 
Target: Rs 775
 
-- Keep a stop at 800 and go short.

-- Add to the position between 780-783. Book profits at 775. READ MORE HERE

Corporate tax cut, lower costs may take IndiGo out of air bubble

The stock of InterGlobe Aviation (IndiGo) has gained close to 8 per cent over the last three trading sessions, following a boost to net profit from the recent tax rate cut, as well as lower costs from newer plane inductions. The other trigger is the expansion of the board and inclusion of an independent director, which could be the first step in resolving the differences between the two founder-promoters. READ MORE

Linking loans to external benchmark may delay SBI's profit revival

After the tax cut last week, the Street had brushed aside the impact of SBI’s move to link its retail loans to repo rate. However as the dust settles and investors assess the actual gains from last Friday’s measures, the old problem once again surfaces for banks, explaining why the SBI stock fell so sharply READ MORE

Reliance Industries set to gather steam in H2 on improving outlook

The Reliance Industries (RIL) stock continues to gain on the bourses and has risen above 8 per cent since the corporation tax rate was cut late last week. The stock has gained more than 3 per cent in the last two sessions, even as the broader markets have been weak following the initial euphoria. READ MORE HERE

Nifty Outlook and trading ideas by CapitalVia: Buy Tech Mahindra, HCL Tech

Buy HCL Tech: Above Rs 1,064.50
 
Target: Rs 1,122
 
Stop loss: Rs 1,017
 
The stock is trading in the channel, coupled with it is a movement in the stock inclined to the lower zones of it. Resistance breakout is expected from the levels of 1064.50. The stock is making a resistance breakout in daily charts and is trading above its 50-day EMA and a breakout from here might result in good upside momentum. Considering the technical evidence, we recommend buying the stock above Rs 1,064.50 for the target of Rs 1,122, keeping a stop loss at Rs 1,017 on closing basis. READ MORE

Two stocks that Sacchitanand Uttekar of Tradebulls Securities is bullish on

NIFTY
 
Profit booking and stock rotation within the key sectors ahead of Futures and Optiond (F&O) contract expiry added some pressure to the index as it slipped below its key swing support zone near 11,460. On the daily scale, the index almost filled the gap area which it left on its way up while galloping towards 11,694. The gap area around 11,400-11,380 is expected to act as a support for the coming session. 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 extended declines as Saudi Arabia was said to be ahead of schedule in restoring its output capacity.

-- At 8:12 am, Brent Crude Futures were trading at $61.38 per barrel, down 0.08 per cent.

SGX Nifty

At 8:10 am, the Singaporean Exchange for Nifty Futures was trading 20 points higher at 11,495 level.

Asian Market Check

Source: Reuters


US Market Check

Source: Reuters


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