MARKET WRAP: Sensex rises 732 pts, Nifty ends at 10,472; India VIX eases 8%

Photo: iStock
The benchmark indices ended over 2 per cent higher on Friday after the rupee rose against US dollar amid firm Asian markets.

The S&P BSE Sensex ended at 34,734, up 732 points (2.15 per cent), while the broader Nifty50 index settled at 10,472, up 238 points (2.32 per cent).

The rupee strengthened against the US dollar on Friday, rising 53 paise to 73.58 against the greenback in intra-day trade.

Among sectoral indices, the Nifty Auto index settled 4 per cent higher led by a rally in shares of Mahindra & Mahindra and Maruti Suzuki India. The Nifty Bank index, too, rose 2.5 per cent led by IndusInd Bank and ICICI Bank.

However, the Nifty IT index slipped 1 per cent lower led by a fall in Tata Consultancy Services (TCS), which fell 3 per cent to Rs 1,920 on the NSE after the company reported a lower than expected revenue growth of 3.7 per cent in constant currency (CC) terms in September quarter on the sequential basis. The Street was estimating revenue growth of 4 per cent in CC terms for the quarter.
Global Markets

Asian shares staged a rebound on Friday to set course for their first gains in two weeks, with Shanghai managing a modest recovery from a rout that saw its shares crumble to near 4-year lows.

The strong gains soothed investor sentiment, which was hit after a major volatility index, seen as Wall Street's fear gauge, rose to an eight-month high.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 2.0 per cent, the biggest in more than two years. But the bounce came after the index fell 3.6 per cent on Thursday to hit a 1-1/2-year low. On the week, it is still on track for a weekly loss of 3.6 per cent. Shanghai shares bounced 0.8 per cent, recouping earlier losses of 1.8 per cent as cheap valuations drew bargain hunters.

(with Reuters inputs)


Sectoral trends on NSE

BSE Sensex: Top gainers & losers
Market At Close
The S&P BSE Sensex settled at 34,733.58, up 732 points or 2.15 per cent while NSE's Nifty50 index gained 238 points or 2.32 per cent to end at 10,472.50.
Auto index set to post sharpest single day gain in 31 months

Shares of automobile companies were riding high on the bourses on Friday as Nifty Auto and the S&P BSE Auto indices, set to post their sharpest single-day rally in 31 months, amid fall in oil prices and rupee recovery from record lows.
At 02:38 PM; Nifty Auto (up 4.02%) and the S&P BSE Auto (up 4.2%) indices were up more than 4%, as compared to 2% rise in the benchmark indices. Earlier, on March 1, 2016, auto indices were up 4.3% in a single day. READ MORE

Oil rebounds to $81, pares gain as IEA sees adequate supply
Oil rose to $81 a barrel on Friday, rebounding after two days of declines, though prices pared gains after another closely watched forecaster deemed supply adequate and the outlook for demand weakening. Crude was still heading for its first weekly drop in five weeks, pressured by a big rise in U.S. inventories and fading concerns that looming U.S. sanctions on Iran will cut supplies significantly. Read More
Nifty Metal index up 3.44% led by gains in Jindal Steel

IEA sees world oil market 'adequately supplied'
Oil markets look "adequately supplied for now" after a big increase in production over the last six months but the oil industry is coming under strain as it copes with increasing global demand, the West's energy watchdog said on Friday. The International Energy Agency said in its monthly report that the world's spare oil production capacity was already down to only 2 percent of global demand, with further reductions likely to come. Read More
Multiple earnings triggers for GAIL amid risks of subsidy sharing
Amidst the overhang and risks of subsidy sharing, stocks of all public sector (PSU) oil and gas companies have seen sharp cuts. GAIL, too, fell about 12 per cent in October, before seeing some rebound over the past two days. While the Centre has not indicated any move to push PSU oil firms to share subsidies, Nilesh Ghughe at HDFC securities says that if it does, GAIL stands to be the last in the pecking order, while ONGC/OIL India would be the first to share the subsidy burden, followed by oil marketing companies. Read More
Market check
Index Current Pt. Change % Change
S&P BSE SENSEX 34,740.69 +739.54 +2.18
S&P BSE SENSEX 50 10,940.42 +231.14 +2.16
S&P BSE SENSEX Next 50 30,930.32 +922.60 +3.07
S&P BSE 100 10,699.44 +239.96 +2.29
S&P BSE Bharat 22 Index 3,339.79 +65.67 +2.01

Power stocks rally; Tata Power, CESC, Adani Power gain up to 16%

Shares of electric utility companies such as Tata Power, Reliance Infrastructure, Adani Power, CESC and JSW Energy have rallied by up to 16% on the BSE in intra-day trade on hopes of the Gujarat government’s panel may bring Rs 1.29 trillion relief to state’s three stranded power projects. Tata Power soared 16% to Rs 72.15 on the BSE in intra-day trade on the back of an over 10-fold jump in trading volumes. READ MORE

Investment strategies in current market
The sharp correction in equities over the past few weeks has shaken investors' confidence in the asset class. Though the headline indices have tumbled over 10 per cent from peak levels, the fall in select individual stocks - especially in the mid-and small-cap segments has been much sharper. With the portfolios bleeding, investors are now seeking safer options to park their money. Read More
Nifty Auto index rises over 4% led by M&M

Hindustan Unilever trades firm ahead of Q2 earnings, stock up 2.4%
Shares of Hindustan Unilever (HUL) are up 2.4% at Rs 1,566 on the BSE ahead of its July-September quarter (Q2FY19) earnings today. The fast-moving consumer goods (FMCG) company will announce results after market hours. Since July 16, 2018, post-June quarter results (Q1FY19), HUL had underperformed the market by falling 13%, as compared to 6.4% decline in the S&P BSE Sensex. Read More
How a fundamental view differs from a technical view
What should I use; fundamentals or technicals? This is a question that has plagued investors for a long time and there are still no clear answers. A lot of investors tend to look at fundamentals as a key to long-term investing and technicals as a way to quick-fix trading. While the understanding is broadly on the right track, it misses out some key nuances about fundamental and technical analysis. A fundamental analyst does spend a lot of time looking for value. Are the cash flows healthy; are the margins healthy; how good is the management; is the product disruptive; these are some of the key questions that a fundamental analyst asks. The technical analyst, on the other hand, is more focused on the charts. Read More
Govt loses Rs 6 trillion in market rout as PSU stocks take a beating
The sharp fall in markets has dealt a telling blow to the government. The value of government holding in listed PSUs has reduced by Rs 6 trillion from their one-year highs. An analysis of data from Capitaline shows the 41 state-owned stocks have halved from their 52-week highs and another 32 are currently trading at 12-44 per cent below their 52-week highs. Experts say investor sentiment towards the PSU space is at one of its lowest points. “The PSU space has underperformed the most, whether large-caps or mid-caps. Read More
Top gainers in BSE 500:

SADBHAV ENGG. 227.05 25.30 12.54 7858
JAI CORP 106.35 10.95 11.48 302254
INDO COUNT INDS. 67.60 6.70 11.00 85593
PRISM JOHNSON 89.80 7.10 8.59 26352
NAVKAR CORPORAT. 83.20 6.25 8.12 10283
» More on Top Gainers
Market check
Index Current Pt. Change % Change
S&P BSE SENSEX 34,701.75 +700.60 +2.06
S&P BSE SENSEX 50 10,925.62 +216.34 +2.02
S&P BSE SENSEX Next 50 30,777.50 +769.78 +2.57
S&P BSE 100 10,679.23 +219.75 +2.10
S&P BSE Bharat 22 Index 3,333.80 +59.68 +1.82

After NBFCs, bond market woes likely to weigh on rating agencies' revenues
The pressure seen in the domestic bond market is unlikely to be confined to non-banking financial companies (NBFCs). Even rating agencies are likely to feel the heat of recent events due to subdued corporate bond issuance. Already, during the first half of 2018-19, amid elevated yields, corporate bond issuance (including private placement of debt) is down 30 per cent year-on-year. Read More
Airline stocks extend gain; IndiGo, Jet Airways, SpiceJet up 10% in 3 days
Shares of all three listed airline companies were trading higher for the third straight session on the BSE after the government on Wednesday cut excise duty on jet fuel to 11% to give relief to the aviation industry and fall in the Brent crude oil prices by 5.6% in past two days. Read More
Sensex back to April levels: Here are the winners & losers in past 6 months
The Sensex on Thursday closed at its lowest level since April 11. Essentially, the index, that tracks the share price performance of India’s 30 bluechip companies, is little changed this fiscal year. However, the 30 components have seen wild fluctuations in their stock prices during this period. Read More

Why equity investors should brace for more volatility and negative returns
Equity investors should brace for greater volatility and negative returns as bond yields inch-up in the US, the world’s largest bond and equity market. Long-term data points to a negative correlation between yield on the 10-year US government bond and the price-to-earnings (P/E) multiple of the S&P500 index — the US’ most traded equity index. Read More
Nifty Auto index up over 3% led by gains in M&M

Buzzing Stock
Shares of YES Bank have rallied 6% to Rs 255 on the BSE in early morning trade after the private sector lender appointed US-based headhunter Korn Ferry to assist the bank’s committee in its selection of the new managing director & chief executive officer (MD & CEO).
The bank had announced that it would find a successor to MD & CEO Rana Kapoor whose term was cut short by the Reserve Bank of India (RBI). READ MORE
Motilal Oswal Securities on Zee Entertainment

We assign P/E of 30x (seven-year average) to FY20E EPS of 19.8 – a 15% discount to three-year average multiple due to the threat from the digital media space – to arrive at a target price of INR600. Strong earnings growth, healthy RoIC and cash generation should support Zee5 and allay concerns about long-term earnings visibility, in our view. Maintain Buy.
Reliance Securities on TCS

TCS’ improved visibility in BFSI and Retail along with healthy outlook in other key verticals drives our underlying confidence on the business. With Digital contribution rising to >28%, healthy growth in this segment will move the needle meaningfully going forward.

High pay-outs (100% of FCF) to shareholders in the form of share buy-backs along with improving business visibility will ensure the stock remains at elevated valuations. Upwardly revising our EPS estimates by 2-3% (factoring in INR/USD rate of Rs70 vs. Rs67.50 earlier), we maintain our BUY recommendation on the stock with a revised Target Price of Rs2,260 (from Rs2,170 earlier)

Contrary to market expectations, the Reserve Bank of India did not raise rates last week. The odds favour further depreciation of the rupee given that the Indian currency is still not cheap on a real effective exchange rate basis while the oil factor suggests further deterioration in the current account deficit.
Will the return to a weak currency in India trigger a wave of inflows into gold as historically would have been the case? On the face of it, this is happening with gold imports having doubled on a YoY basis in August. But GREED & fear would advise gold buyers not to draw much comfort from the Indian data. What gold needs, like Asian and emerging market stocks, is an end to Fed tightening. For now this remains nowhere in sight based on last Friday’s US job and wage data.

Christopher Wood, Managing Director & Equity Strategist, CLSA

TCS management terms Q2 as landmark quarter
India's largest IT services firm Tata Consultancy Services (TCS) on Thursday posted a 23 per cent YoY rise in its net profit at Rs 79.01 billion for the September quarter of FY19. The company, in its press release, stated that digital demand drove double-digit growth in the second quarter.

Earnings per share (EPS) of the company came in at Rs 20.66, up 22.7 per cent YoY. The company also announced the second interim dividend of Rs 4 per equity share of Re 1 each, which will be paid to the equity shareholders on October 30, 2018.
Click here to look at the key highlights of the IT bellwether's Q2 results:
TCS extends fall after Q2 earnings; down 8.5% in one week
Shares of Tata Consultancy Services (TCS) was down 3% to Rs 1,925 on the BSE in early morning trade in an otherwise firm market after the company reported a lower than expected revenue growth of 3.7% in constant currency (CC) terms in September quarter on the sequential basis. The Street was estimating revenue growth of 4% in CC terms for the quarter. Read More


Market Check
Index Current Pt. Change % Change
S&P BSE SENSEX 34,553.87 +552.72 +1.63
S&P BSE SENSEX 50 10,881.14 +171.86 +1.60
S&P BSE SENSEX Next 50 30,757.49 +749.77 +2.50
S&P BSE 100 10,641.17 +181.69 +1.74
S&P BSE Bharat 22 Index 3,329.91 +55.79 +1.70

Four factors that will drive September quarter results of India Inc
The first quarter ended June will qualify as the quarter of very slow growth but decisive growth. However, the second quarter has seen the Nifty and Sensex touching new highs but it also saw a very narrow rally in the markets. The key theme was consumption and most of the other sectors were hit by a weak rupee and high crude oil prices. Crude oil prices were higher and there were headwinds due to rising input costs and interest rates weigh on companies as they enter the earnings season. Read More
MUST READ Why Indian retail investors won't easily forgive their fund managers
Indian retail investors won’t easily forgive their fund managers, nor will they quickly forget this wealth destruction.
Out of 416 open-ended, onshore equity funds, 401 have lost money this year. Tech funds, the only ones to have performed decently, have been helped by Asia’s worst-performing currency of 2018. And that’s only because Indian software exporters earn revenues in a strong dollar and pay wages in rupees. READ MORE

YES Bank rises around 4% on appointment of advisory firm Korn Ferry for finding the next MD and CEO

TCS dips over 1% post Q2 earnings

Sectoral trend on NSE

BSE Sensex opening gainers and losers

Market at open
At 9:15 AM, the S&P BSE Sensex was trading at 34,378, up 377 points while the broader Nifty50 was ruling at 10,354, up 120 points.
Rupee opens firm

Rupee opens at 73.83 per dollar, up 29 paise from previous close
Market at pre-open

Index Current Pt. Change % Change
S&P BSE SENSEX 34,188.38 +187.23 +0.55
S&P BSE SENSEX 50 10,778.80 +69.52 +0.65
S&P BSE SENSEX Next 50 30,202.17 +194.45 +0.65
S&P BSE 100 10,527.36 +67.88 +0.65
S&P BSE Bharat 22 Index 3,300.85 +26.73 +0.82

(Source: BSE)
Today's picks
Bharti Airtel
Current price: Rs 285
Target price: Rs 280
Keep a stop at Rs 288 and go short. Add to the position between Rs 281 and Rs 282. Book profits at Rs 280.
Current price: Rs 1,980
Target price: Rs 2,020
Keep a stop at Rs 1,960 and go long. Add to the position between Rs 2,010 and Rs 2,015. Book profits at Rs 2,020. Click here for more
Commodity Outlook by Tradebulls Securities

Buy Crude Oil
Target: 5,550
Stop loss: 5,300
Crude Oil has retraced and taken support at 61.8% retracement taken from high of 5669 and low of 4842. The primary trend remains positive as price action has taken support on a daily scale at 20-day moving average. There are no divergences seen in any oscillator so unless any divergence emerges, we continue to advocate investors to trade in its primary trend which is bullish. We recommend creating a long position with the target of 5550 and stop loss of 5300 closing basis. Read More

Trading ideas by Anand Rathi
TARGET: Rs 600
The stock has broken the triple top pattern on the daily charts with a sell crossover on its daily charts which is quite negative for the stock. The momentum indicator has also provided a sell crossover. Read More
Top trading ideas by Prabhudas Lilladher 
CMP: Rs 138.20
TARGET: Rs 165
The stock has more or less formed a higher bottom formation pattern in the daily chart taking support at around 125 levels and currently has indicated a bounce back with a positive bias showing strength and has potential to rise further in the coming days. It is almost on the verge of moving past the significant 50DMA moving average and with decent volume participation witnessed, we recommend a buy in this stock for an upside target of 165 keeping a stop loss of 126. Read More
Nifty outlook by Anand Rathi
TARGET: 10,100
STOP LOSS: 10,350
Nifty closed in the negative territory and it failed the double bottom pattern formed on the daily as well as hourly charts. The Index has also completed an A-B-C pullback on the daily charts which is also quite negative going forward. The minimum target on the lower side is pegged at 10100 and below those 9950 levels. Read More
Nifty outlook by Prabhudas Lilladher
Nifty made a fresh intra-day low of 10138 and the sentiment has still further weakened with the close below 10,250 levels and we still maintain a cautious view in terms of fresh buying. As of now we consider the level of 9,950 as the major support zone for Nifty and 24,000 levels for Bank Nifty. The support for the day is seen at 33740/10160 while resistance is seen at 34260/10300 levels. Bank Nifty would have a range of 24500-25050. Click here to read more
Oil prices slumped to more than two-week lows
Brent crude futures fell $2.83 on Thursday to settle at $80.26 a barrel, a 3.4 per cent loss, after hitting a low of $79.80, the weakest since Sept. 24. The global benchmark has retreated after hitting a four-year high of $86.74 on Oct. 3. Brent last stood at $80.33.
Rupee recovers after slumping to record low, up 9 paise to 74.12
The rupee climbed 9 paise to end at 74.12 per dollar Thursday after tumbling to a fresh lifetime low in intra-day trade amid a sharp sell-off in global markets. Softening crude oil prices and the greenback weakening against other currencies provided support to the home unit, brokers said.

Asian and European equities sank deep into the red after US markets reeled due to concerns surrounding global growth and rising bond yields.
SGX Nifty

Trends on SGX Nifty indicate a positive opening for the broader index in India, a rise of 34 points or 0.33 per cent. Nifty futures were trading around 10,313-level on the Singaporean Exchange.
Asian shares on edge after nine-day rout
Asian shares appeared tentative on Friday, holding steady after a nine-day losing streak, but sentiment was frail after Wall Street shares crumbled and expectations of market volatility shot up to an eight-month high.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent after the opening of South Korea and Australian markets, a day after it fell 3.6 per cent to hit 1-and-a-1/2 year low. Japan's Nikkei fell 0.6 per cent.
Wall street
Wall Street slid as risk-appetite showed no signs of picking up and volatility spiked. The sell off came as investors prepared for the start of U.S. quarterly earnings, with JPMorgan Chase, Wells Fargo and Citigroup due to report Friday.

The Dow Jones Industrial Average fell 545.91 points, or 2.13 per cent, to 25,052.83, the S&P 500 lost 57.31 points, or 2.06 per cent, to 2,728.37 and the Nasdaq Composite dropped 92.99 points, or 1.25 per cent, to 7,329.06.
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