Closing Bell

Domestic benchmark indices surged today on institutional buying amidst foreign fund flows ahead of US Fed meet. The US Fed is is expected to keep its interest rates steady on Wednesday.

Domestic equity benchmark BSE Sensex ended higher by 581 points and the Nifty rose 159 points, driven by by gains in Auto, Metals, Pharma, Banking, IT and Metals.

After hitting a high of 39,917.01 during intraday, the 30-share index ended higher by 581.64 points, or 1.48 per cent, at 39,831.84, and the broader NSE Nifty too advanced 159.70 points, or 1.37 per cent, and ended at 11,786.85.

In the short term, volatility may prevail  with the overall market volumes showing a decreasing trend as further cues on Brexit and trade war will remain in focus, market experts say.

Tata Motors was the top gainer in the Sensex pack, rallying over 16 per cent to Rs 172.55 on the BSE, after its British arm Jaguar Land Rover (JLR) returned to profitability, reporting a pre-tax profit of 156 million pounds, 246 million pounds better year-on-year.

Shares of Reliance Industries (RIL) too rose over 2 per cent to Rs 1,467 after the company on Friday said it will set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.

On the BSE, Tata Steel climbed 7% to 391, while YES Bank, Axis Bank, Maruti, Tech Mahindra, TCS, Vedanta, and M&M too advanced between 3 per cent and 6 per cent.

NIFTY 50 STOCKS (closing prices)

Nifty Stocks

Jio valuation up by $15 billion post rejig

Reliance Jio's enterprise value is estimated to be around $60-65 billion following the restructuring wherein almost all its debt has been taken up by parent Reliance Industries Ltd.

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Analysts said that the move to make Jio debt-free would help RIL to get a better valuation for the telecom venture.

Steelmakers face debt challenges after ill-timed bets

Indian steelmakers may be suffering from buyer's remorse as assets they bought from bankrupt rivals stretch their bottom lines while market conditions have worsened.

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NIFTY INDEX

NIFTY INDEX CHART

Nifty 50 October Futures (11,790)

Taking cues from the positive global markets, and also after witnessing domestic buying interest in large- and mid-cap stocks, the benchmark indices, the Nifty and the Sensex, have gained more than 1 per cent in today's session.

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NIFTY PHARMA INDEX

NIFTY PHARMA

NIFTY BANK INDEX

NIFTY BANK CHART

NIFTY IT INDEX

NIFTY IT INDEX

Broker's call:  HDFC Bank Ltd (Buy)

Geojit Financial Services

CMP: Rs 1,238                       Target Price: Rs.1,412

In Q2FY20, HDFC Bank’s loans and advances grew 19.5% YoY driven by domestic wholesale loans registering 27.4% YoY growth. Net interest income rose 14.9% YoY driven by asset growth despite marginal decline in NIM (-10bps YoY to 4.2%).

GNPA/NNPA ratio stood at 1.38%/0.42% in Q2FY20 versus 1.40%/0.43% in Q1FY20.

The bank is able to maintain a stable and one of the best asset qualities in the sector, with comparatively lower exposure to risky assets along with adequate provision coverage.

The brokerage firm expects the bank to continue to perform strongly in FY20-21E despite challenging macro-economic environment.

Carborundum Universal down nearly 2%

Shares of Carborundum Universal lost nearly 2 per cent today though it reported 8.90% per cent increase in profits in the second quarter ended September 2019.

Carborundum Universal Ltd  said its consolidated profits after tax for the second quarter clocked an 8.89% rise to Rs 68.31 crore.

The Company had recorded consolidated profits after tax at Rs 62.73 crore YoY. The consolidated sales for the quarter increased by 4% to Rs 678 crore from Rs 651 crore QoQ of last year driven by the better performance in the ceramic segment.

ICICI Bank rises 2% after Q2 results

Shares of ICICI Bank on Tuesday jumped 2 per cent after the lender witnessed an improvement in asset quality for September 2019 quarter

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Fed copies 1990s playbook in bid to avert a downturn

A rate cut on Wednesday, which would be the Fed's third this year, would lower the overnight benchmark lending rate to a new range of between 1.5% and 1.75%.

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US Federal Reserve building in Washington

ICICI Bank shares up nearly 2% on earnings

ICICI Bank stock increased by nearly 2 per cent to Rs 478.85 on the NSE today.  The stock price was impacted by the quarterly numbers announced by the bank a few days back.

The private bank reported a 28% year-on-year (YoY) decline in its September quarter profit due to deferred tax assets adjustment (DTA), but overall earnings were healthy with improvement in asset quality.

PAT dipped to Rs 654.96 crore in Q2FY20, against Rs 908.88 crore YoY, but supported by strong PPoP and other income, and lower provisions. NII grew by 26% to Rs 8,057.43 crore with 13% credit growth YoY. NIM for the quarter came in at 3.64%, improving 3bps sequentially and 31bps YoY.

NIFTY AUTO INDEX

NIFTY AUTO CHART

NIFTY BANK INDEX

NIFTY BANK CHART

Jubilant Life falls over 2.50%

Jubilant Life Science stock turned weak today on the back of selling pressure despite the company reporting 19% increase in net profit for the second quarter. However, the Nifty Pharma index rose over 1% aided by gains in PEL, Cipla, Sun Pharma and Cadila Healthcare.

At 12.10 pm,the stock was down by 2.55% to Rs 529.30 on the NSE, though the .

It may be noted that the Nifty Pharma index rose 1.115% to 7,832.25

M&M Options call

Consider a calendar bull-call strategy on M&M

The long-term outlook will remain bearish for Mahindra & Mahindra, as long as the stock rules below ₹724. However, the short-term trend has turned positive for the stock.

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Mid-session

Domestic equity benchmark BSE Sensex jumped over 450 points and the Nifty rose 120 points today, driven by by gains in Auto, Metals, Pharma, Banking, IT and Metals, amid positive global cues.

After hitting a high of 39,740.35, the 30-share index was trading higher by 430.51 points, or 1.10 per cent, at 39,680.70, and the broader NSE Nifty too advanced 126 points, or 1.05 per cent, to 11,753.95.

Tata Motors was the top gainer in the Sensex pack, rallying over 13 per cent, after its British arm Jaguar Land Rover (JLR) returned to profitability, reporting a pre-tax profit of 156 million pounds, 246 million pounds better year-on-year.

Shares of Reliance Industries (RIL) too rose over 2 per cent after the company on Friday said it will set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.

Tata Steel climbed 7%, while M&M, Vedanta, TCS and Maruti too advanced up to 5 per cent.

Banking stocks rally over 1 per cent

Bank stocks joined the rally after trading flat in early trades. The Nifty Bank index rose 340.70  points, or 1.15%, to 29,857 in the late morning session.

Noteworthy gainers include YES Bank, which rose 6% to Rs 58.05, RBI Bank was up 2.50% to Rs 265.50, Axis Bank gained 2.35% to Rs 726.95 and Federal Bank was up 1.85% at Rs 82.35

After hitting a high of 39,548.81, the 30-share index was trading higher by 267.50 points, or 0.68 per cent, at 39,517.70, and the broader NSE Nifty advanced 76.05 points, or 0.65 per cent, to 11,703.20.

Tata Motors was the top gainer in the Sensex pack, rallying over 13 per cent, after its British arm Jaguar Land Rover (JLR) returned to profitability, reporting a pre-tax profit of 156 million pounds, 246 million pounds better year-on-year.

Shares of Reliance Industries (RIL) too rose nearly 2 per cent after the company on Friday said it will set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit.

Tata Steel climbed 7%, wguke M&M , Vedanta , TCS and Maruti too advanced up to 3 per cent.

On the other hand, Bharti Airtel , Yes Bank , Kotak Bank , HUL , NTPC, Asian Paints , PowerGrid and SBI fell up to 4 per cent.

In the previous session on Sunday, which was a special Muhurat trading session to mark the beginning of Hindu Samvat year 2076, the 30-share Sensex ended at 39,250.20, up 192.14 points, or 0.49 per cent.

Broker's call : Bandhan Bank (Buy)

ICICI SECURITIES

Bandhan Bank reported merged numbers with Gruh Finance for the first time. Therefore, the numbers are not comparable YoY. Sequentially, NII growth was lower 3% to Rs 1,529 crore, due to a marginal contraction in margins due to higher cost of fund. Other income remained broadly steady at Rs 360 crore. Operating profit of merged entity was at Rs 1.307 crore, up 50% YoY & -4% QoQ. The bank realised Rs 374 crore from sale of PSLC in H1FY20 of which Rs 186 crore has been accounted while remaining Rs 188 crore will be recognised in H2FY20.

Valuation & Outlook

Bandhan Bank’s robust business traction & customer acquisition is poised to continue post-merger. In the current scenario, facing a challenge, the bank remains resilient on both - growth and asset quality. The bank envisions becoming a pan-India player & intends to leverage the distribution network of both entity for cross selling. Gradual replacement of Gruh’s borrowing is seen aiding improvement in margins ahead.

Given robust growth and superior asset quality, we remain positive on the business growth as well profitability, along with steady asset quality. Therefore, we believe the bank’s premium valuation to its peers would continue ahead on the back of superior fundamentals. Accordingly, we revise our target price to | 680, Bandhan bank’s robust business traction & customer acquisition is poised to continue post-merger. In the current scenario facing challenge, the bank remains resilient on both - growth and asset quality.  Bank envision to be a pan India player & intends to leverage distribution network of both entity for cross selling. Gradual replacement of Gruh’s borrowing is seen to aid improvement in margins ahead.

Given robust growth & superior asset quality, we remain positive on business growth as well profitability, along with steady asset quality. Therefore, we believe that bank’s premium valuation to its peers to continue ahead on back of superior fundamentals. Accordingly, we revise our target price to | 680 per share, valuing the stock (post-merger) at 24x FY21E EPS.

ICICI Securities maintains BUY rating for Bandhan Bank stock.

Bharti Airtel defers Q2, half yearly results till November 14

Telecom operator  Bharti Airtel  on Tuesday has deferred its second quarter and half yearly results to be announced today, to November 14, as more clarity was needed on issues of the recent Supreme Court's direction on the definition of adjusted gross revenue

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Broker's F&O Call:

ICICI SECURITIES

Positional Future Recommendation

Long Axis Bank October future in range of Rs 704-708. Target: Rs 748; Stop Loss: Rs 681

Rationale:

Despite the ongoing high volatility in the market, stock specific buying is evident. In the private sector banking space, Axis Bank has remained quite resilient and witnessed buying support at every decline.

The highest Put base at 700 strike is likely to remain a support for the stock while we believe it may attempt to move towards Rs 750 in coming sessions considering high short open interest still prevailing in the stock.

Despite continuous closure during the series, the current OI of more than 55 million shares is still higher than the OI seen in the last series. We expect short covering to continue in the settlement week as well.

Rupee call: Bullish bias remains as long as rupee holds above 71

After a minor correction, the rupee appreciated last Friday and ended the session with 0.2 per cent gain at 70.88 against the dollar.

The bullish momentum in favour of rupee is sustaining and the domestic currency opened today’s session on a positive note, testing the resistance at 70.75.

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IT stocks remain mixed

NSE IT index

Top gainers among the IT pack were Tata Elxsi, TCS, HCL Tech, while the losers were Just Dial, Hexware and Mindtree

Auto in top gear

Prominent gainers among the auto stocks were Tata Motors, which gained nearly 14% to Rs 167.95, Motherson Sumi rose 8% to Rs 121.80, Bharat Forge was up 4.25% to Rs 472 and Bosch Ltd gained over 2 per cent at Rs 15,061.50 on the NSE

Opening session

Domestic equity benchmark BSE Sensex rose 80 points and the Nifty rose 20 points in the opening trading session on today, driven by gains in Auto, Metal and IT stocks, while banking and financial services slipped lower.

NSE SECTORAL INDICES

Day Trading Guide for October 29, 2019

Given below are supports and resistances for Nifty 50 futures and seven key stocks that can help in your intra-day trading:

₹1238 • HDFC Bank

₹648 • Infosys

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The BSE benchmark Sensex was up 43 points at 39,293.49, whille the Nifty on the NSE gained 16.80 points at 11,643.95.

Today's pick: Gujarat Gas (₹184.6): Buy

Investors with a short-term perspective can buy the stock of  Gujarat Gas  at current levels. Since late May, the stock has been in a sideways consolidation phase in a wide band between ₹160 and ₹192.

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Asia shares hit all-time high, eyes turn to Fed

Asian shares rose to a three-month peak on Tuesday after Wall Street hit all-time highs amid hopes of progress in Sino-US trade talks and for another dose of policy stimulus from the Federal Reserve this week.

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Post-Diwali trend

There is no trend in the trading following the Muhurat session either, going by the trading data since 2001. The Sensex recorded positive close in the week after Diwali in 10 out of 18 years.

Returns in the week after Diwali were higher in the pre-2008 period — with more years witnessing returns over 2 per cent. After 2009, Sensex traded flat or gave negative returns in the week following the Muhurat session, for five consecutive years.

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