Market rundown by Anand James, Chief Market Strategist at Geojit Financial Services
"Domestic indices remained volatile within a narrow range as a mixed bag of corporate numbers and profit booking in PSBs crippled the market's momentum. However, optimism in pharma and FMCG stocks guarded the key support levels. Small and midcap stocks continued to show strength ahead of MSME’s meeting with the GST council scheduled on Sunday. Revival in the banking sector seems to have eased the nerves of FIIs and now market will be expectant on further updates on GST implementations in petroleum products and better Q2 numbers."
3:42 PM YES Bank tanks over 7%
3:40 PM Sectoral trend
3:37 PM Top Sectoral Gainer: Nifty Pharma
3:36 PM Nifty PSU Bank index down 4% on profit booking
3:34 PM Top Sensex gainers and losers
3:33 PM Markets at close
The Nifty50 index pared gains to end in negative after hitting record high earlier in the session, as Yes Bank slumped nearly 10% on concerns over bad loans. The Sensex ended flat but at new closing high for the day.
The S&P BSE Sensex ended at 33,157, up 10 points while the broader Nifty50 index ended at 10,323, down 20 points.
State-run oil marketing major, Indian Oil, reported a fall of 18.7% in its net profit for September quarter at Rs 3,696 crore against Rs 4,548 crore during the previous quarter. The revenue came in 13.7% lower at Rs 1.1 lakh crore against Rs 1.28 lakh crore quarter on quarter.
ITC Q2 net increases nearly 6% at Rs 2,640 cr
ITC Ltd reported almost 6% rise in net profit at Rs 2,640 cr for the September quarter as against Rs 2,500 crore in year-ago period.
Revenue increased 7% to Rs 10,314 crore as compared to Rs 9,661 crore in September 2016.
3:01 PM Market Check at 3 pm
2:50 PM Earnings Impact : J&K Bank
JM Financial Research on Yes Bank
Rating - BUY at Rs 390
Yes Bank reported elevated NPL divergence levels (FY17 NPLs at 1.5% against actuals of 6.0%) along with 2Q results. However, it continues to report strong recovery capabilities considering that effective slippage is just 19% of FY17 divergent NPLs (and 0.9% of loans). The divergence primarily emanates from non-consortium exposures and this, according to us, is key differentiating factor with respect to its strong recovery rates.
Our positive view on Yes is based on the following: a) its strong PPOP engine which is more than commensurate with its "perceivedly" risky exposures. b) growth trajectory that is amongst best in the class and c) valuations which we believe adequately factor the risks.
Additionally, given the fact that large part of economic stress creation/recognition is behind us, we believe divergences should reduce (but will still persist) gradually. We will remain buyers of the name on material dips post the results. Maintain BUY with unchanged TP - which values Yes bank at a 30% discount to larger retail lenders.
European stocks opened higher, supported by upbeat earnings from US tech giants and the prospect of continuing stimulus in Europe.
The pan-European Stoxx 600 opened up around 0.33% shortly after the opening bell, with almost all sectors and major bourses in positive territory.
2:11 PM Maruti Suzuki Q2 net up 3% at Rs 2,484 cr
Automaker Maruti Suzuki reported 3% rise in net profit at Rs 2,484 crore for the quarter ending September as against Rs 2,401 crore in the same period a year ago.
Revenue rose 22% to Rs 21,768 crore.
1:50 PM Earnings Impact: Maruti Q2
1:35 PM Market Check
Optimism on PSU banks justified, but selectively
In an extended Diwali party for public sector banks (PSBs), the mega-bailout announced by the government on Tuesday pushed their stocks to record the biggest single-day gain on Wednesday. However, brokerages warn that the focus should be more on established and larger players, even as they remain bullish on PSBs. READ MORE
Pharma shares in focus
Shares of pharmaceutical companies were in focus, trading higher by up to 7% on the bourses in an otherwise range-bound market. Sun Pharmaceutical Industries, Unichem Laboratories, Ipca Laboratories, Wockhardt, Marksans Pharma, Cadila Healthcare and Aurobindo Pharma were up in the range of 3% to 8%. READ FULL REPORT
Even as Indian equity markets are touching new highs on a weekly basis, the performance of newly-listed Indian insurance companies have not been satisfactory. Of three issues listed on Indian bourses in the past two months, two companies — SBI Life and GIC Reinsurance (GIC Re) — are trading below their issue price. READ FULL REPORT
Broader markets outperform
Broader markets outperformed the benchmarks with the BSE Midcap and the BSE Smallcap indices gaining 0.6% each.
12:12 PM Markets check
At 12:11 pm, the S&P BSE Sensex was trading at 33,212, up 65 points, while the broader Nifty50 was ruling at 10,341, down 3 points.
Shares of Bharti Infratel and Bharti Airtel slipped up to 7% on the BSE in an other wise range-bound market.
Bharti Infratel dipped 7.5% to Rs 422 on the BSE in early morning trade. The counter reported a huge block with around 6.42 million equity shares representing 0.34% of total equity of Bharti Infratel exchanging hands on the BSE at 10:42 am, the exchange data shows. READ MORE
Domestic brokerages cash in on D-Street party
The record run-up in the market has helped domestic brokerages — both pure-play and diversified — shore up revenues. The euphoria is reflected in the doubling of share prices of all major listed players this year. The frenzy present during the previous bull run of 2003-07, however, has largely been missing. READ FULL ANALYSIS
CLSA's Chris Wood on PSU banks
Despite the government's Rs 2.11-lakh crore recapitalisation package for public sector banks (PSBs), Christopher Wood, managing director and equity strategist at CLSA chose not to add these stocks to his portfolio citing the runaway rally in these stocks. He, however, says that the step is in the right direction and will go a long way in meeting the capital requirement of these cash-starved PSBs. READ FULL REPORT
10:46 AM Buzzing stocks
Shares of liquor companies were in focus with United Spirits rallying 16% to Rs 2,985 on the BSE in intra-day trade after the company reported a strong 84% jump net profit at Rs 153 crore, despite a drop in net sales during September 2017 quarter (Q2FY18). The company had profit of Rs 83 crore in the same quarter previous fiscal. READ FULL REPORT
10:32 AM Markets check
At 10:30 am, the S&P BSE Sensex was trading at 33,224, up 77 points, while the broader Nifty50 was ruling at 10,348, up 5 points.
Edelweiss Securities on YES Bank
Going ahead, while some divergence could persist, the Bank’s superior loan structuring skills will restrict overall LGD (FY18 credit cost guidance maintained). Moreover, progress in branch banking will lead to best-in-class return ratios and reduce volatility. At CMP, the stock trades at 2.6x FY19E P/ABV, attractive for a bank that has delivered >30% EPS CAGR over past 5 years and estimated to clock >29% ÇAGR over FY17-19. With anticipated economic recovery and the bank’s commendable retail effort, focus in ensuing quarters will be on growth than stress. Maintain ‘BUY/SO’ with Rs 418 target price (3.3x FY19E P/BV).
9:44 AM YES Bank tanks post Q2
While private sector lender YES Bank saw a 25% rise in net profit, backed by growth in net interest income and fees, it saw a rise in non-performing assets (NPAs) by Rs 6,355 crore as the Reserve Bank of India (RBI) asked it to restate bad loan figures for FY17. Reacting to this, the stock tanked nearly 10% to Rs 298 on the NSE and was the top Nifty loser. CLICK HERE FOR EARNINGS DETAILS
9:32 AM Sectoral trend
9:28 AM Sensex heatmap at open
Markets open at record highs
The S&P BSE Sensex rallied as much as 123 points to hit its fresh high of 33270, while the Nifty50 gained 22 points to log its lifetime high of 10,366.
Derivative Strategy on IDFC by HDFC Securities
Buy IDFC November 65 call at Rs 3.70
Stop loss: Rs 2.5
Target: Rs 7
Lot size: 13,200 shares
Nifty outlook by Prabhudas Lilladher
Nifty has moved past the crucial resistance of 10,250, and has made a higher bottom formation in the daily chart showing potential and strength for further upside movement. As of now, the level of 10,125 would act as the major support for Nifty. However, the support for the day is seen at 10,290 while resistance is seen at 10,390. READ MORE
At 9:05 am, the S&P BSE Sensex was trading at 33,225, up 78 points, while the broader Nifty50 was ruling at 10,371, up 27 points.
Rollovers above averages, avoid shorting: Angel Broking
October series was indeed a Diwali bonanza for our markets as the benchmark index registered a fresh record high and achieved yet another milestone of 10,350.
Historically, whenever FIIs start selling in equities, markets tend to take it negatively; but, this time, history is not getting replicated. In fact, this entire selling has been completely overshadowed by the enormous and relentless buying from domestic institutions (DIIs). However, FIIs did participate in the recent rally by forming good amount of longs in index and stock futures last series. In addition, they also bought index call options along with writing in index puts; this clearly indicates they formed bullish bets in F&O space.
Now, Nifty Rollovers is at 72.69% which is above its three-month average of 65%; while, in terms of open interest as well it’s on the higher side. Thus, we believe major chunk of the longs formed in the last series has been rolled over, which suggests continuation of ongoing momentum. At current juncture, 10,500 call option is attracting traders attention; while, maximum concentration of open interest in puts is firmly placed at 10,000 strike.
Marketwide rollovers to the November series stood at 81% compared with an average rollover of 78% seen in the last three F&O series. Nifty futures rollovers came in at 73% which were higher than 78% rollovers seen on an average in the last three series.
Asian shares gained on Friday as technology shares were boosted by upbeat earnings from US hi-tech. Japan's Nikkei gained 0.6% while South Korea's Kospi rose 0.2% and Australian shares rose 0.2%. MSCI's broadest index of Asia-Pacific shares outside Japan was flat in dollar terms. Hong Kong's Hang Seng was up nearly 1%, while China's Shanghai Composite gained 0.2%.
Wall Street update
The Dow and S&P 500 advanced on Thursday after a round of positive corporate earnings announcements, but gains were curbed and the Nasdaq lost ground on a drop in the healthcare sector.
The Dow Jones Industrial Average rose 71.61 points, or 0.31% to 23,401.07, the S&P 500 gained 3.26 points, or 0.13% to 2,560.41 and the Nasdaq Composite dropped 7.12 points, or 0.11% to 6,556.77.
At 8:45 am, SGX Nifty was trading at 10,394, up 20 points or 0.19%.
8:46 AM Good Morning!
Welcome to Business Standard's market liveblog.
First Published: Fri, October 27 2017. 15:30 IST