Anand James, Chief Market Strategist, Geojit Financial Services
Lacklustre show from the PSU banks forced the investors to be on the back foot ahead of the RBI policy meet, but positive auto sales numbers kept markets afloat. Few expect a rate cut given rising inflation expectations, which has increased the surprise potential of tomorrow’s call. Nevertheless, upcoming earnings season should mean that stock specific moves should take dominance over broad market sentiments.
3:46 PM Sectoral trend
3:41 PM Sensex heatmap at close
The BSE Midcap and the BSE Smallcap indices mirrored the gains in the frontline indices, gaining 0.7% and 0.5%, respectively.
3:38 PM Markets at close
The S&P BSE Sensex ended at 31,497, up 214 points, while the broader Nifty50 closed at 9,859, up 71 points.
PNC Infratech rose 5% to Rs 142.80 on BSE after the company said it won a road contract worth Rs 2159 crore.
GAIL, Adani Transmission, Avanti Feeds, Graphite India hit new highs
Adani Transmission, Avanti Feeds, GAIL (India), Graphite India, Bajaj Auto and Bombay Burmah Trading Corporation are among the 14 stocks from the S&P BSE500 and S&P BSE Smallcap index that hit their respective record highs on BSE in intra-day trade on Tuesday. READ MORE
European shares hovered around three-month highs on Tuesday as a sell-off in Spanish stocks eased and financials gained following another record-breaking session on Wall Street.
The pan-European STOXX 600 index was flat, while Spain's blue chip index added 0.1 percent as Madrid and Catalonia appeared to carefully weigh their next steps following Sunday's independence referendum, which the central government has declared illegal.
The BSE Midcap and the BSE Smallcap indices mirrored the gains in the frontline indices, gaining 0.7% and 0.6%, respectively.
At 3:05 pm, the S&P BSE Sensex was ruling at 31,514, up 231 points, while the broader Nifty50 was trading at 9,862, up 74 points.
3:01 PM Nifty PSU Bank sole sectoral loser ahead of RBI policy outcome
RIL buys 1 mn barrels of crude oil from the US
Reliance Industries Ltd , owner of the world's biggest refining complex, has bought its first ever crude oil cargoes from the United States, drawn by the oil's economics after the price spread between US crude futures and Brent futures widened, three trade sources said on Tuesday.
Reliance bought 1 million barrels each of West Texas Intermediate (WTI) Midland and Eagle Ford crude which are expected to arrive in November, they said.
2:27 PM Top five gainers on Nifty in noon deals
One-year of RBI MPC and Urjit Patel's maiden policy
October 4 will mark the completion of one-year since RBI governor Urjit Patel announced his first monetary policy after taking charge. The day will also mark the anniversary of the inception of six-member Monetary Policy Committee (MPC) which did away with the earlier practice of RBI governor singlehandedly taking a call on interest rates.
We take a look at various economic indicators from inflation to interest rates that may have influenced the RBI's policy decision all through last one year:
1:46 PM Buzzing stock
Dr Reddy’s Laboratories jumped nearly 4% to Rs 2,415 after the drugmaker announced the launch of Sevelamer Carbonate tablets, which are used to treat kidney diseases, in the United States.
The BSE Midcap and the BSE Smallcap indices were trading 0.5% and 0.3% higher, respectively after rising over 1% in early trade.
Markets pare morning gains
At 1:35 pm, the S&P BSE Sensex was trading at 31,459, up 175 points, while the broader Nifty50 was ruling at 9,838, up 50 points.
ICICI Prudential Life Insurance Company moved higher by 7% to Rs 415, extending Friday’s 2% gain on the National Stock Exchange (NSE) on value buying. READ MORE
Hope alive for SAIL but no big gains soon
In contrast to its large peers, government-owned Steel Authority of India (SAIL) has been a laggard, both in financial performance and on the bourses (see charts).
A key reason is that despite access to captive raw material sources for a large part of its requirement, its operating profit (profit before interest, depreciation and tax) margin has been far lower than peers Tata Steel’s domestic operations and JSW Steel.
Second, its capacity expansion plans have been delayed time and again. This not only dampened sentiment but also impacted its financials — high debt and low return ratios. While some of this is expected to change, the benefits are likely to take a longer time. READ MORE
12:44 PM New Project
Realty firm Godrej Properties Ltd today said it has entered into a partnership agreement to develop a residential project in Pune.
The company, the real estate firm of the Godrej group, will develop a housing project on 59 acres at Mamurdi in West Pune. It did not disclose the name of the partner in question.
The project will offer about 4.5 million sq ft of saleable area in this project, the Mumbai-based developer said in a statement.
MOIL rallied 5% to Rs 200 on BSE after the company said it hiked prices of various grades of manganese ore with effect from October 1, 2017.
The company has fixed/revised prices of different grades of manganese ore and other products, effective from October 1, 2017.
“The prices of various grade of manganese ore have been increased by 7.25% on the existing prices prevailing since July 1, 2017,” MOIL said in a statement.
Sept manufacturing PMI holds steady at Aug's 51.2 as demand stays wobbly
Manufacturing activity expanded for a second consecutive month in September although firms struggled to sustain demand, with the price of goods barely increasing, a business survey showed on Tuesday.
The Nikkei/Markit Manufacturing Purchasing Managers' Index, compiled by IHS Markit, held steady at August's 51.2 last month, its second month above the 50 mark that separates growth from contraction. READ MORE
12:02 PM Nifty Auto gains post Sept sales numbers
11:47 AM Market Check
The benchmark indices continues trading higher ahead of the RBI policy due tomorrow. At 11:45 am, the S&P BSE Sensex was trading at 31,552, up 269 points, while the broader Nifty50 index was ruling at 9,867, up 78 points
Bajaj Auto hits new high post September sales
Bajaj Auto hits a new high of Rs 3,208, up 3% on BSE after the company reported a highest ever total sales of 428,752 units in September against 376,765 units sold in the same month last year. The company recorded sales growth of 14% in September, its highest monthly sales growth rate since March 2016. READ MORE
Triumph Motorcycles India Managing Director Vimal Sumbly at the launch of the Bonneville in New Delhi
MPC expected to hold rates tomorrow
The Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC) will on Tuesday begin its two-day meeting to review the economic and monetary conditions and take a call on tweaking policy rates.
The MPC's decision on the repo rate, the rate at which RBI lends money to banks, will be announced on Wednesday (October 04, 2017).
There is wide expectation that the MPC will keep the repo rate unchanged given the gradual rise in retail inflation. The panel had cut the repo rate by 0.25 per cent to six per cent in the last monetary policy review held in August 2017. It had also maintained its neutral monetary stance. READ MORE
PNC Infratech pared some gains after rising nearly 12% intraday on the back of contract win worth Rs 2159 crore. The stock was currently trading 6% higher
The company has declared the lowest bidder for the project of 145 km long six laning of Chakeri to Allahabad section of NH - 2 from in the state of Uttar Pradesh under NHDP Phase-V.
RBI policy: No need to over react, slowdown could be temporary blip
The present downturn in the Indian economy has come at a time when global growth is recovering. If global growth continues to improve and the domestic growth continues to falter, that would be a serious concern. Present indications are that the growth slump is a temporary blip caused predominantly by the impact of demonetisation and GST-related disruptions.
The market reaction to a cut or a hold by the RBI is likely to be muted. The recent market correction is healthy since valuations have been approaching bubble territory. More than the policy response of the RBI, the market will be influenced by economic data for September, particularly corporate sales figures, the trend in exchange rate, exports and capital flows into the market.
SBI Life Insurance lists at 5% premium to IPO price of Rs 700
SBI Life Insurance Company made a quite debut by listing at Rs 735, a 5% premium against its initial public offer (IPO) price of Rs 700 per share on the National Stock Exchange (NSE).
The company’s Rs 8,400 crore IPO was subscribed 3.587 times. The portion meant for qualified institutional buyers (QIBs) was oversubscribed 12.56 times, while that of non-institutional investors received 70% subscriptions and retail investors 85%, data available with the NSE showed. READ MORE
FPI flows outlook for India turns dim
Foreign portfolio investors (FPIs) have pulled out over $3.2 billion from the domestic stock market in the September quarter (data till September 28). Other emerging markets (EMs), including South Korea ($2.8 billion), Indonesia and Taiwan (at $2.1 billion each) and South Africa ($1.4 billion), too, saw pull-back by foreign investors, lower pace, according to the Bloomberg data as on September 29. READ MORE
IPO fundraising scales a new high
Seventeen companies have raised Rs 25,500 crore through their initial public offerings (IPOs) in the first half of FY18 — the highest-ever mobilisation by IPOs in the first half of any financial year, according to data provided by Prime Database. The previous best was in the first half of FY08, when Rs 21,243 crore was raised.
According to market players, the momentum would stay as the pipeline of companies waiting to hit the market remains strong. READ MORE
Interview of the day
Current valuations do not reflect underlying economic reality: Ambit Capital
It was a roller-coaster week for the markets, amid talk of a fiscal stimulus by the government. Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital said that the recent flows into equity mutual funds are largely speculative in nature and pose a risk of reversal. Click here for full interview
Saurabh Mukherjea, chief executive officer, and Prashant Mittal, strategist, at Ambit Capital
Are mutual fund flows into equities at an inflection point?
The equity market rally thus far this financial year (H1FY18) in the absence of a meaningful pick-up in earnings has been fuelled by the gush of liquidity, especially by the mutual funds, which have invested around Rs 70,500 crore during this period. This is five times higher than what they had invested in the corresponding period last fiscal.
While most of this money has found its way into the mid-and the small-cap segments of the market, analysts have now started to worry about how long can this flow continue in the absence of a pick-up in corporate earnings and a healthy growth in the economic activity. READ MORE
9:35 AM Sectoral Trend
Tata Motors top gainer
Tata Motors gained 5% after the company on Sunday reported a 25% increase in domestic sales at 53,965 units in September.
The company had sold 43,031 units in September 2016, Tata Motors said in a statement.
9:27 AM Rcom slips
Rcom fell over 6% after it called off merger with Aircel citing legal and regulatory uncertainties, and various interventions by vested interests, that have caused inordinate delays in receipt of relevant approvals for the proposed transaction.
9:23 AM Top gainers and losers on BSE Sensex
9:21 AM Broader Markets
The broader markets outperformed the frontline indices with BSE Midcap and BSE Smallcap up 1.1% and 0.9% respectively
9:19 AM Markets at open
Benchmark indices open higher with Nifty50 trading above 9,850 ahead of the RBI policy review that kicks off later in the day. At 9:178 am, the S&P BSE Sensex was trading at 31,515, up 231 points while the broader Nifty50 index was trading at 9,878, up 90 points.
Nifty, Nifty Bank outlook by Devang Shah
Short-term outlook for the market remains negative till Nifty trades below 10,095 levels and is expecting target in the range of 9550-9450 levels in short term.Medium term outlook for the market remains positive till Nifty trades above 8968 levels and is expecting targets in the range of 12000-12200 levels in medium term.
Nifty Bank also achieved short-term target levels as expected earlier. It made a low of 23,609.10 levels so far in this correction. Short-term trend remains down till it trades below 24,765 levels and is expecting targets of around 22,800-23,000 levels in this correction.
Click here for technical recos
GST composition scheme takes a quantum leap
Availing of the benefits of a flat tax rate and easier compliance, the number of businesses opting for the composition scheme under the goods and services tax has gone up by 50 per cent.
About 540,000 taxpayers have opted for the scheme under the new window of about 14 days till September 30, compared to one million as of August 16, the earlier deadline. READ MORE
Sebi move to defer loan default disclosure may stump traders
With the Securities and Exchange Board of India (Sebi) deferring the implementation of a new rule mandating India Inc to disclose any loan default within 24 hours two days before its implementation, many traders are likely to be caught on the wrong foot. READ MORE
Stock recommendations by Angel Broking
Last Close: Rs 186.60
After a long consolidation, the stock managed to show some strength after breaking above the daily ’89 EMA’ level of 180 convincingly. The volume activity indicates massive buying interest among market participants, which is an encouraging sign for the stock. Importantly, during the recent corrective move in the index, the stock stood firm and maintained its positive territory. Hence, we recommend buying this stock at current levels for a target of Rs 200 over the next 14-21 sessions. The stop loss now should be fixed at Rs 179.
Nifty outlook by Angel Broking
This week, somehow bulls managed to defend 9685; but, going ahead, we do not expect the same kind of strength to be infused in the market. You would have in between rebounds; but, one needs to understand that the short term tide has turned and any relief rally in coming days is likely to get sold into.
Going ahead, 9854 – 9921 would be seen as a sturdy wall for the index. On the flipside, we may see index sliding below 9685 to test lower levels of 9640 – 9560 in days to come. Traders are advised to stay light and not to get carried away by such bounce backs.
Click here for more
Technical calls from Prabhudas Lilladher:
BERGER PAINTS - BUY
CMP: Rs 245.10
TARGET: Rs 272
STOP LOSS: Rs 230
PIDILITE INDUSTRIES - BUY
CMP: Rs 794.50
TARGET: Rs 860
STOP LOSS: Rs 765
ASHOK LEYLAND - BUY
CMP: Rs 123.10
TARGET: Rs 136
Nifty View from Prabhudas Lilladher
For Nifty, the upside is capped for now and as & when we break 9,700 levels we would be witnessing further downslide. The support for the week is seen at 9,620 while resistance is seen at 9,930.
Merger called off
Anil Ambani-owned Reliance Communications called off merger with Aircel.
The mobile carrier said in its statement to BSE, "Legal and regulatory uncertainties, and various interventions by vested interests, have caused inordinate delays in receipt of relevant approvals for the proposed transaction."
RCom said that it will evaluate an alternate plan for its mobile business through adoption of a 4G LTE focused mobile strategy.
8:53 AM Oil Check
Crude oil futures edged down after tumbling on Monday, as a rise in U.S. drilling and higher OPEC output put the brakes on their recent rally.
Brent crude LCOc1 slipped 0.2% to $56.01 a barrel, after marking a third-quarter gain of about 20% US crude CLc1 edged down 0.1% to $50.51.
The Nifty50 futures on the Singapore Stock Exchange were trading 20 points higher at 9860 indicating a flat opening for the domestic market.
Asian shares tiptoed lower on Tuesday, pressured by weaker oil prices but supported by records on Wall Street and upbeat economic data that lifted US Treasury yields and the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1% in early trade.
Japan's Nikkei stock index added 0.3%, getting a tailwind from a weaker yen.
Australian shares slipped 0.4% ahead of the Reserve Bank of Australia’s (RBA) policy decision. While no monetary steps are expected, investors will be looking to see if the central bank adopts a more hawkish bias.
S&P 500, Nasdaq hit record high
The S&P 500 and the Nasdaq advanced to record levels on Friday, buoyed by gains in technology stocks, while each of the major indexes closed out the quarter with solid gains.
The Dow Jones Industrial Average rose 23.89 points, or 0.11%, to 22,405.09, the S&P 500 gained 9.3 points, or 0.37%, to 2,519.36 and the Nasdaq Composite added 42.51 points, or 0.66%, to 6,495.96.
8:43 AM Good Morning and welcome to markets live blog. Catch all live market action here
First Published: Tue, October 03 2017. 15:37 IST