Anand James, Chief Market Strategist, Geojit Financial Services
Volatility continued in the market and domestic indices extended losses as investors continued to book profits from the recent outperformers with DIIs also remaining on the sell mode this month so far. But pharma and IT sectors provided some respite backed by weak rupee and firm US equity market may now shift its focus onto PM Donald Trump's tax relief programmes and IIP and inflation numbers to be released later in the week.
3:44 PM Sctoral trend: Nifty PSU Bank biggest sectoral loser
3:41 PM Sensex heatmap at close
3:38 PM Markets at close
The S&P BSE Sensex ended at 33,218, down 152 points, while the broader Nifty50 closed at 10,303, down 47 points.
Manappuram Finance lost over 4% to Rs 94 on BSE after the company's consolidated net profit fell 16.64% to Rs 160.37 crore on 1.07% decline in total revenue to Rs 839.80 crore in Q2 September 2017 over Q2 September 2016.
3:09 PM Broader markets underperform
The BSE Midcap and the BSE Smallcap indices slipped 1% each in last leg of trade.
Centrum Broking on Lupin
We maintain buy rating for Cipla and revise our TP to Rs 700 (earlier Rs610) based on 24x March’19E EPS of Rs29.2. Cipla’s Q2FY18 results exceeded our and consensus estimates. Cipla’s revenues grew 9% YoY, margin improved 160bps to 19.7% and net profit grew 18% YoY. The acquired Invagen and Exelan in the US are well-integrated with Cipla. The domestic business (40% of reveues) grew 12% YoY and 30%QoQ due to re-stocking by trade after successful implementation of GST. Steady growth in the domestic market, with leadership position in respiratory, oncology and anti-infective segments would drive future growth.
We maintain Buy rating for Cipla and revise our TP to Rs700 (earlier Rs610) based on 24x March’19E EPS of Rs29.2, and with an upside of 15.2% over CMP. We have enhanced our FY18E and FY19E EPS estimates by 9% and 15% respectively. We expect the domestic and South African businesses to drive future growth. Key risks to our assumptions include slow growth in the domestic market and regulatory risks for its manufacturing facilities catering to global markets.
2:44 PM Top five Nifty losers
2:28 PM Buzzing stocks
Shares of household appliances companies – Hawkins Cookers and Butterfly Gandhimathi Appliances – rallied by up to 13% on the BSE in otherwise range-bound market after reported a strong set of numbers in September quarter (Q2FY18). READ MORE
Kotak Securities on Apollo Tyres
Apollo Tyres’s 2QFY18 results improved QoQ, but remained significantly weak YoY. Raw material price increase and weak performance at European operations impacted company’s 2QFY18 results YoY. Consolidated revenue during the quarter was Rs 3470 crore, 13% higher YoY. EBITDA and PAT declined by 17% YoY and 46% YoY respectively. Rubber prices have been stable and that should support EBITDA margins QoQ. EBITDA margins on a YoY basis is expected to stay lower in 2HFY18. While FY18 is expected to be a weak year for the company, we expect performance to improve over FY19/FY20. We cut our earnings to factor in weak performance in 2QFY18 and expect continued stress in Europe operations. We retain BUY with revised price target of Rs 278. Lower than expected volume growth and increase in raw material cost are key risks to our earnings estimates.
Crude oil up to $65 a barrel not a worry
With crude oil crossing $64 a barrel on the developments in Saudi Arabia, this country's current account deficit (CAD) could see a little more pressure. However, the expectation is that this could be financed easily, as capital flows, particularly on the debt side, are robust and will not trigger huge withdrawal from the foreign exchange reserves. These had widened to a four-year high of 2.4 per cent of Gross Domestic Product (GDP) in the first quarter of the current financial year. READ FULL REPORT
1:31 PM Markets check
At 1:30 pm, the S&P BSE Sensex was trading at 33,354, down 16 points, while the broader Nifty50 was ruling at 10,336, down 14 points.
One year of demonetisation: Note ban helped expedite gold reforms
Demonitisation of high value currency notes a year ago has hastened positive changes in the gold trade, with several subsequent measures having helped to make the gold jewellery business more transparent.
Soon after announcement of withdrawal of high value currency notes on November 8 last year, those having a huge number of such notes, not shown on their books, rushed to buy gold jewellery. On that night, several jewellers were open till late, as the officially withdrawn currencies could be accepted till midnight. READ MORE
106 stocks from BSE Smallcap index gain over 100% in past one year
As many as 106 stocks from the BSE Smallcap index have become multi-baggers, rallying more than 100% in the last one year since the government banning the use of certain high-denomination notes on November 8, 2016.
The mutual funds have made net investments of Rs 118, 960 crore in equities market, as compared to Rs 15,939 crore net inflows by the foreign portfolio investors (FPIs) in past one year, the Sebi data shows.
Among the sectoral classifications, consumer durables, realty, metal and oil & gas indices beat the market by gaining in the range of 39% to 62% during the period. READ MORE
Asset mobilisation through NFOs at 9-year high
Asset mobilisation through the new fund offer (NFO) route has hit a nine-year high in 2017. The mutual fund (MF) industry launched a total of 47 NFOs during the first 10 months of the year, to mop up a cumulative Rs 13,500 crore. The average NFO size, too, has increased to a nine-year high of Rs 288 crore. The amount raised this year is still a fraction of what it used to be during the bull run of 2005-08.
The annual mop-up during those four years was an average Rs 28,000 crore. Industry players say, currently, investors prefer existing funds with a reasonable performance track record over new scheme launches. It is quite evident, as equity schemes got inflows of Rs 1.16 lakh crore so far in 2017, of which equity NFOs contributed a mere 12 per cent.
Industry officials expect the trend of more money flowing into existing schemes will continue. Fund houses that don’t have existing schemes in any of the product categories will only launch NFOs, they say. READ MORE
12:16 PM Market Check
TCS, Polaris, LTI, MphasiS, KPIT Techno, Nucleus Software hit 52-week highs
Shares of information technology (IT) companies were trading higher for the second straight day on the bourses with Nifty IT index and S&P BSE IT index hit their respective fresh 52-week highs in otherwise range-bound market.
Tata Consultancy Services (TCS), Polaris Consulting Services, MphasiS, LTI (L&T Infotech), KPIT Technologies and Nucleus Software Exports hit 52-week highs on the BSE. READ MORE
Mutual funds still shy of taking on companies
Mutual funds (MFs) have bettered their participation in shareholder resolutions but are still hesitant to take on India Inc. The percentage of ‘abstain’ votes dipped to 10 per cent for the quarter ended September, from 20 per cent in the third quarter of 2014-15.
The percentage of votes against managements, however, was only three per cent for the three-year period. As for the top 10 fund houses, only 2.6 per cent of their votes went against managements. READ MORE
IDBI Federal hires JPMorgan for sale of promoters' stake
Global investment bank JPMorgan has been appointed to sell the stake of the promoters in IDBI Federal Life Insurance. IDBI Bank, Federal Bank and Belgian insurer Ageas are the promoters of the insurer.
“JPMorgan has started the process to find the new buyer(s),” said an insider at one of these promoters, who did not wish to be identified.
E-mails and calls made to the JPMorgan spokeperson did not yield any response.
ICICI Bank plans IPO of broking arm
Private sector lender ICICI Bank on Tuesday said it plans to divest part of its stake in broking arm ICICI Securities through an initial public offering (IPO). “The board of directors has approved the sale of a part of its shareholding in ICICI Securities in an IPO, subject to requisite approvals and market conditions.
The size and other details of the offer would be determined in due course,” the bank said in a BSE filing. This will be the third IPO from the group, after those of ICICI Prudential Life and ICICI Lombard. READ MORE
ICICI Pru Life turns to IT, pharma after risky telecom bet payoff
Fund managers at India's largest private sector life insurer, ICICI Prudential Life Insurance, are turning their attention to the technology and pharmaceutical sectors following bumper payoffs from a contrarian bet on the country's telecommunications sector. ICICI Pru Life's Chief Investment Officer, Manish Kumar, said he kept buying telecoms shares this year even as a bruising price war and plunging profits forced several other investors to cut their exposure to the sector. READ MORE
TeamLease Services surges 17% on strong Q2 results
TeamLease Services surged 17% to Rs 1,949, also its record high on the BSE in intra-day trade after the company nearly doubled Iits consolidated net profit at Rs 17.4 crore in September quarter (Q2FY18). It had reported profit of Rs 8.8 crore in the same quarter a year ago.
Total revenue during the quarter under review grew 20.6% at Rs 880 crore against Rs 729 crore in the corresponding quarter of previous fiscal. EBITDA (earnings before interest, taxes, depreciation and amortization) margins improved to 1.7% in Q2FY18 from 1.0% in Q2FY17 and 1.5% in Q1FY18. READ MORE
Axis Bank hits 52-week high on fund raising plans
Axis Bank hit a 52-week high of Rs 550, up 4% on the BSE in early morning trade, after the private sector lender said the board will meet on Friday, 10th November 2017 to consider fund raising plans.
“A meeting of the board of directors of Axis Bank will be held on Friday, 10th November 2017 at Mumbai, to inter-alia, consider raising of funds by issue of equity / equity linked securities through permissible mode at an appropriate time,” Axis Bank said in an exchange filing. READ MORE
9:59 AM Eanings Impact: Cipla
Cashless not possible, aim for 'taxless' economy: Demonetisation man Bokil
He is credited with pitching to Prime Minister Narendra Modi an idea that would lead to the government’s decision to revoke the legal tender status of old Rs 500 and Rs 1,000 notes from the midnight of November 8, 2016, rendering worthless as much as 86 per cent of currency in circulation at the time.
A year and much economic disruption later, Anil Bokil says that calling the exercise ‘demonetisation’ would not be entirely correct. Since it pertained only to currency or cash. ‘note ban’ would be a better expression, he explains. Read full interview
9:35 AM Only sectoral index in red: Nifty PSU Bank
9:27 AM Bhart Airtel falls after block deal
9:25 AM Sectoral Trend
9:23 AM Top Sensex gainers and losers
9:21 AM Broader Markets
In broader markets, BSE Smallcap and BSE Smallcap indices were trading 0.3% and 0.2% higher respectively
9:20 AM Markets Open
Benchmark indices open flat on one year of demonetisation. At 9:17 am the S&P BSE Sensex was trading at 33,389 up 18 points while the broader Nifty50 index was ruling at 10,362, up 12 points
Top stock recos by HDFC Securities
Buy KSB PUMPS
CMP: Rs 869
SL: Rs 835
Target: Rs 1035
Buy TORRENT POWER
CMP: Rs 274
SL: Rs 260
Nifty Outlook by HDFC Securities
Nifty has recently found resistance around 10,490 and started correcting, closing below its 5-DMA support. Previous top on the daily chart is placed at 10,250-odd levels, which is likely to act as a strong support going forward. Recent High of 10,490 would remain resistance for the short term. So, we can expect this correction in Nifty to extend towards 10,200-10,250 in the coming days.
Top trading ideas by Prabhudas Lilladher
CMP: Rs 265.30
TARGET: Rs 285
STOP LOSS: Rs 256
CMP: Rs 955.50
TARGET: Rs 1,020
STOP LOSS: Rs 915
BUY FUTURE CONSUMER
CMP: Rs 61.75
TARGET: Rs 71
Nifty outlook by Prabhudas Lilladher
Nifty has failed to cross 10,500, however still a minor support of 10,330 is still a deciding factor for Nifty to continue it’s up move, and else we would see it to slide down to 10,280 levels. The support for the day is seen at 10,300 while resistance is seen at 10,400. The daily trend in Nifty, Sensex & Bank Nifty has turned down after 9 days.
Bharat-22 ETF set to roll out on Nov 14
Bharat-22 Exchange Traded Fund (ETF) is expected to add close to Rs 10,000 crore to government’s disinvestment kitty. According to CNBC-TV18, the ETF’s first tranche is expected to be launched on November 14 which will invest in 22 stocks of which 19 will be public sector companies.
Demonetisation is a watershed moment in Indian economic history: Jaitley
Finance Minister Arun Jaitley on Tuesday called demonetisation a “watershed moment in the history of Indian economy”. He quoted data extensively to make a case for the announcement by Prime Minister Narendra Modi’s announcement on November 8 last year to put 86 per cent of currency out of circulation.
In a blog and at a press conference later at the Bharatiya Janata Party (BJP) headquarters here, Jaitley said the note ban had achieved its objectives of reducing the cash component in the economy, widening the tax net, exposing unaccounted wealth and reducing anonymity of cash. READ MORE
Crude oil price rise spells bad news for India
The global energy market is likely to see some volatility. The Kingdom of Saudi Arabia (KSA) is going through internal upheaval. Many members of the ruling clique have been arrested, including several royals.
This purge is said to be part of a cleanup campaign by the ruler's son. Economic reform is on the agenda, including stake sales in oil assets. Figuring out KSA’s internal politics is much impossible for an outsider. There are thousands of royals and clerics of varying degrees of fundamentality, with varying influence. READ MORE
Oil dips on profit taking but remains near two-year highs
Oil markets dipped on Wednesday as traders took profits after crude prices hit two-year highs, but markets remained well supported by expectations of strong Chinese demand and tightening supplies.
Traders said the market was eyeing growing tensions in the Middle East with concern, keeping a cautious tone on trade.
Brent futures LCOc1, the international benchmark for oil prices, were at $63.61 per barrel, down 8 cents, or 0.1%, but still close to a near two-and-a-half year high of $64.65 a barrel reached earlier this week.
The Nifty50 futures on the Singapore Stock Exchange were trading 3 points higher at 10,414 indicating a flat opening for the domestic market.
Asia stocks pause at peaks
Asian shares paused at decade peaks and the dollar dipped on Wednesday amid concerns Republican plans for major US tax cuts were running into headwinds even before the Senate releases its own version of the proposals.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.05% having hit its highest since November 2007 on Tuesday.
Japan's Nikkei fell 0.4%, though that followed a jump to its best close since 1992.
Dow edges up to record high; S&P 500 slips
The Dow Jones Industrial Average eked out a fourth consecutive record high close on Tuesday, while the S&P 500 ended marginally lower after a disappointing profit forecast from Priceline and a drop in financials.
The Dow Jones Industrial Average ended up 0.04% at 23,557.23 after spending most of the day in negative territory. The S&P 500 dipped 0.02% to 2,590.64. The Nasdaq Composite slipped 0.27% to 6,767.7.
First Published: Wed, November 08 2017. 15:33 IST