Nifty ends at record high on negative market breadth, Sensex up 250 points

All that happened in Friday's trade

4:00 PM

Yogesh Mehta,VP- Retail Research, Motilal Oswal Securities

 

The Nifty showed fireworks a week before Diwali and cheered the street by touching a new life high at 10,192, crossing its earlier high of 10,179. The strong rally was pushed by buoyant global markets. Market opened with a mild gap-up on better CPI number and strong IIP announced on Thursday, rallied further with strong Q2 results by TCS which gained over 2%, Nifty settled at record high closing of 10,164 gaining 0.66% Bharti Airtel gained the most by 7.6% on Tata Teleservices acquisition announcement. Major gainers were Tata steel (2.7%), Ultratech (2.2%), HDFC Bank (1.7%), and ICICI Bank (1.36%).

3:54 PM

Sensex heatmap at close

Source: BSE

3:52 PM

Market breadth

 

The market breadth, indicating the overall health of the market, turned negative. On BSE, 1,426 shares declined and 1,300 shares rose. A total of 128 shares remained unchanged.

3:46 PM

Broader markets underperform

Broader markets underperformed with the BSE Smallcap adding just 0.1%, while the BSE Midcap remained little changed.

3:42 PM

Markets at close

 

The Nifty50 settled at its record closing high of 10,167, up 71 points, surpassing its previous closing high of 10,153 hit on September 18. Sensex, meanwhile, closed at 32,432, up 250 points, 75 points away from its closing high of 32575 hit on August 1.

3:34 PM

Market commentary by VK Sharma, Head Private Client Group and Capital Market Strategy at HDFC Securities

 

The Nifty scaling a new life time high is no news as we are only following the American, European and other Asian markets. The corporate results, globally are going to be better. The minutes of the last Fed meeting were also dovish. With domestic investors dipping their toes in the equity markets at an accelerated pace , the process of making new highs in the markets is likely to continue beyond the immediate highs. 

 

While the Nifty has made a new high in September , the Sensex has not. So the markets are waiting for the Sensex to cross the new highs made in August. With the festive mood in the air, markets are likely to do well in the October month, which has historically been the weakest

3:17 PM

BSE Metal index hits 6-year high; Tata Steel, Jindal Steel hit 52-wk highs

 

Shares of metal companies were in focus with the S&P BSE Metal index hitting six-year high on expectations of strong earnings growth in July-September quarter (Q2FY18). Tata Steel, Jindal Steel & Power (JSPL) and National Aluminium hit their respective fresh 52-week highs, while Hindalco touched a new high on the BSE in intra-day trade on Friday. READ THE FULL STORY HERE

3:16 PM

JM Financial on Bajaj Corp

 

Bajaj Corp reported another weak result with a double-digit decline in operating profit for the second consecutive quarter. However, its flagship Bajaj Almond Drops’ (BAD) volume trajectory recovered posting a growth of 6.5% relative to 4-7% decline seen over past 3 quarters - a key positive. 

 

The quarter’s volume growth was marginally ahead of retail offtakes (+5%) - this, to us, indicates that recovery is led by underlying demand and not merely restocking; sales realisation, though, fell 2% which, as per our workings, is attributable to higher tax incidence under GST. Weakness on earnings side was surprisingly led by higher A&P and Staff costs while the expansion in GPM was aided by tax credits now available on inputs. 

 

The company continued to grow its market share and outperform the LHO category growth. We expect volume growth to recover to double-digit level in the latter half of FY18, aided in part by a favourable comparator – this should aid stock performance especially given a steep 45%+ discount to the sector’s 12M forward multiple (ex-ITC). 

We recommend 'buy' on the stock with a target price of Rs 475.

3:10 PM

Oil update

 

Oil prices firmed as strong Chinese oil import data and turmoil in the Middle East boosted bulls in a market that has already shown signs of rebalancing after years of excess.

 

Brent was at $57.23, up 98 cents. US West Texas Intermediate (WTI) crude was at $51.41 per barrel, up 81 cents from its last settlement. The contracts were on track for weekly gains of more than 2% and 4% respectively.

3:08 PM

European markets

 

European shares rose to their highest level in nearly four months, helped by some well-received earnings updates. The pan-European STOXX600 rose 0.3% and was set for its fifth straight week of gains as were world stocks.

 

Germany’s DAX index was flat, just below the fresh all-time high hit in the previous session, while Britain’s FTSE eased back 0.4 percent after a record close on Thursday.

3:02 PM

Merger a win-win deal for Bharti Airtel, Tata Tele

 

On the face of it, one can call it a sweet deal for both the parties. N Chandra always wanted to get rid of the unviable mobile telephony business and that will allow him to concentrate the Tata Group’s capital in places where it really matters. For Bharti Airtel, it gives them access to a captive client base, which is likely to increase its overall client base by 12-14 per cent without taking on too much of additional debt. But, first, let's look at the contours of the deal. READ FULL ANALYSIS

2:56 PM

Sectoral trend in last leg of trade

Source: NSE

2:54 PM

Stock Reco: Manappuram Finance

 

While gold loans comprise the major portion of assets under management (AUM) at 81% for FY17, the company has re-calibrated its products from traditional long term loans to several shorter term lending products to increase cushion from fluctuation in gold prices and improve growth.

 

While FY17 had its own challenges in terms of demonetization led decline in disbursements, non-recoveries of loans resulting in higher NPAs and overall weakness in profitability, MFL has maintained healthy growth in AUM and profitability along with a limited impact on NPAs. 

 

Going ahead, the overall AUM is expected to witness a 24% growth with healthy return ratios of 5.8% RoA and 25.9% RoE by FY19E. Considering the robust financial growth expected from re-alignment of business strategies by increasing presence in high-growth segments, we are positive on the stock of MFL which trades at 1.8x its FY19E ABV. We initiate coverage on MFL with a Buy rating and a target price of Rs140, valuing the stock at 2.4x its FY19E ABV.

 

(Source: Centrum Wealth Research)

2:48 PM

Will the RBI cut rates now?

 

September’s CPI reading reaffirmed our position that the future inflation trajectory could be lower than RBI’s projected path. While IIP data for August signalled a revival in industrial activity post the GST shock in July, it is too early to read this as a sustainable trend. Overall, we expect the central bank to be surprised on the downside on both growth and inflation fronts this year. This should open up room for one last rate cut by the end of FY18. For markets, since investors remain divided on future monetary policy action, lower inflation readings are unlikely to translate into substantial downward movement in yields. Because of a rise in interest rates globally and uncertainty surrounding domestic rate cycle, the benchmark yield could settle at current levels and continue to trade in the range of 6.6% to 6.8%.

 

(Source: Abheek Barua, chief economist, HDFC Bank)

2:35 PM

Cyient hits 52-week high post Q2

 

Cyient rallied 9% to Rs 569 on the BSE in intra-day trade after the company said it expect to deliver a double digit earnings growth in the financial year 2017-18 (FY18). READ MORE

2:25 PM

Market watch

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	32,447.61	+265.39	+0.82
S&P BSE SENSEX 50	10,564.25	+80.73	+0.77
S&P BSE SENSEX Next 50	34,691.45	+93.12	+0.27
S&P BSE 100	10,574.33	+72.28	+0.69
S&P BSE MidCap	15,976.75	+17.22	+0.11

(Source: BSE)

2:20 PM

Review: Samvat 2073

 

India continues to remain a popular investment destination and is an overweight in most global portfolios. However, over the past one year, it has underperformed other Asian indices like Hang Seng (up 24%) and Nikkei (up 19%). Indian Equity markets are waiting for revival of corporate earnings after a very flattish performance over the last 4-5 years. Sub-par performance on corporate earnings front coupled with rally in equity markets have taken the valuation to almost all time highs in India. There is a fundamental transition underway in the economy with several first time steps taken during the last one year.

 

On the macro front, economic growth momentum has been modest with India hitting relatively low GDP growth of 5.7% in 1QFY18. India’s reform momentum has been ongoing at a fairly brisk pace, in absolute and relative terms. Samvat 2073 saw the introduction of GST, one of the biggest tax reforms in the post-independent India. Introduction of GST has been disruptive for the corporate earnings in the short term due to de-stocking in the first quarter of current fiscal.

(Source: Reliance Securities)

2:18 PM

Nifty at new high: Market outlook for Samvat 2074 from Kotak Securities

 

All-in-all, we expect returns in Samvat 2074 to moderate in view of weak near term earnings growth and higher than average valuations. The upmove in Indian equities have been supported by strong macro-economic factors (GDP growth, reducing Current account deficit and benign inflation etc). However, there has be some deterioration on these counts in recent times. Inflation concerns have resurfaced as reflected by the RBI guv’s take on monetary policy stance. Plus, earnings growth in FY18 is likely to be subdued. 

 

In our view, further upsides from the current levels would be contingent on revival of earnings growth and resolution of stressed banking assets. Having said that, we believe, there would be continued investor interest in mid and small caps.

2:16 PM

Markets check

At 2:15 pm, the S&P BSE Sensex was trading at 32,473, up 291 points, while the broader Nifty50 was ruling at 10,177, up 81 points.

2:14 PM

Market outlook: HDFC Securities

 

Our markets seem fairly valued at this point of time, given the delay in revival of corporate earnings, which may happen only after one-tw quarters. Liquidity withdrawal and its strong signs by US, Japan and lately UK and Eurozone could create jitters among the equity investors who have entered into arbitrage trade. Flows follow returns, not the other way around. Hence, we will have to track the progress of the flows when markets don’t provide any meaningful return over 3-4 quarters.

2:12 PM

Market outlook: Dinesh Thakkar, CMD, Angel Broking

 

Sensex is currently trading at 18.8x of its FY2019E earnings which is ~8% premium to its 10 year average PE of 17.4x. We believe that the Indian economy is primed for sustained growth momentum with strong macros and improving rural economy. As interest rates are likely to remain lower, equities will remain attractive asset class and domestic inflows will be supportive of liquidity and valuations. We continue our bottom-up stock picking approach and recommend stocks which will benefit from affordable housing scheme, consumption pick-up, banking, etc.

2:05 PM

Banking stocks on a roll

Symbol	Open	High	Low	LTP	% Chng
NIFTY BANK	24,411.10	24,769.55	24,387.80	24,726.35	1.5
CANBK	305.2	312.5	302.4	310.8	2.35
ICICIBANK	267.6	274.65	267.6	273.4	2.19
BANKBARODA	139	141.75	138.05	141	1.77
HDFCBANK	1,826.70	1,851.90	1,822.00	1,849.95	1.71
KOTAKBANK	1,058.00	1,076.00	1,052.50	1,074.80	1.63
PNB	133.8	136.75	132.4	135.95	1.61
YESBANK	366	373.05	365.95	370.55	1.41
AXISBANK	524.25	534.65	522.5	532.3	1.37
SBIN	251.1	255.35	250.2	253.7	1
IDFCBANK	59.5	60.5	59	59.85	0.84
INDUSINDBK	1,752.00	1,758.00	1,740.55	1,752.00	0.52
FEDERALBNK	118.25	118.3	116	116.9	-0.97

(Source: NSE)

1:54 PM

Advance-decline ratio

There were 31 advances against 19 declines on the Nifty50. 

1:53 PM

Nifty hits record high

 

The Nifty50 index hit fresh high of 10,179.25, surpassing its previous peak of 10178.95 touched on September 19, 2017.

1:48 PM

RIL hits record high ahead of Q2

 

Reliance Industries hit record high for second day in a row ahead of its September quarter earnings due later in the day post market hours. WHAT BROKERAGES EXPECT FROM Q2

1:46 PM

Market in late noon deals

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	32,451.83	+269.61	+0.84
S&P BSE SENSEX 50	10,565.59	+82.07	+0.78
S&P BSE SENSEX Next 50	34,716.44	+118.11	+0.34
S&P BSE 100	10,576.77	+74.72	+0.71
S&P BSE MidCap	15,998.68	+39.15	+0.25

(Source: BSE)

1:45 PM

General Insurance Corporation Of India - IPO fully subscribed on Day 3 

 

Update at 01:20 pm: Overall 1.05x, Retail subscribed 0.33x, QIB 1.84x, NII 0.06x and Employee 0.65x

1:41 PM

Reliance Securities on HDFC Bank

Despite adverse operating environment, HDFC Bank continued to deliver strong performance on business growth as well as operating fronts.

 

The Bank has delivered a healthy performance on business growth and operating front in 1QFY18. Despite a mere 6.1% YoY

growth in banking industry loan, its loan book grew by 23.4%YoY and 4.8% QoQ. This outperformance on loan growth front with a huge margin vs the industry is really commendable as it is the second largest bank in India in terms of loan book size.

 

We have revised our loan growth target to 20-21% from earlier estimate of 17-18% led by relatively higher loan growth over last two quarters.

 

As a result, we have upwardly revised our earnings estimates by 1.9% and 3.1% for FY18E & FY19E, respectively. We maintain our BUY recommendation on the stock with an upwardly revised Target Price of Rs 1,940 (from Rs 1,833 earlier) based on 4x FY19E Adjusted Book Value.

1:25 PM

Gujarat Borosil zooms 61% in four days

 

Gujarat Borosil  moved higher to its record high at Rs 135, up 18% in intra-day trade, extending its last three-day long gains on theBSE, after the company opened its new glass melting and production facility for 2mm fully tempered solar glass. READ MORE

 

1:09 PM

Inflow in balanced MFs rises fourfold in first half of FY18

 

Balanced funds continue to remain the flavour of the season. Interest and inflow into balanced funds have continued to grow with the category seeing a fourfold jump in inflows in the first half of the current financial year. READ MORE DETAILS