Indices trim gains; Sensex, Nifty end 0.22 per cent higher

Closing bell

The 30-share BSE index Sensex closed 87.39 points or 0.23 per cent higher at 38,214.47 and the 50-share NSE index Nifty ended at 11,329.80 points, higher by 24.75 points or 0.22 per cent.

After opening 81 points higher, the Sensex touched an intra-day high at 38,513.69. In the afternoon trade, the benchmark index had surged over 300 points amid positive global cues and inflation data numbers.

The top stocks that lent support to the index were Tata Motors, ONGC, Bharti Airtel, IndusInd Bank and Sun Pharma while the laggards were Infosys, Bajaj Finance, Power Grid, L&T and Kotak Mahindra Bank.

Shares of  Infosys , on Monday, fell over 4 per cent after the company reported a decline in its consolidated net profit for the July-September quarter. The scrip ended 3.68 per cent to Rs 785.65 on the BSE. On the NSE, it fell 3.55 per cent to Rs 786.30.

The country’s second-largest IT services company on Friday said its consolidated net profit declined by 2.2 per cent to Rs 4,019 crore for the July-September 2019 quarter.

On the other hand, the shares of IRCTC made a stellar debut on the stock markets. It zoomed nearly Rs 700.

In the broader index, the stocks of ONGC, Tata Motors, Bharti Airtel, Ultra Cement, and Sun Pharma were supporting the Nifty while the laggards were Infosys, Bajaj Finance, Bajaj Finserv, UPL and Power Grid.

Bullion market

Spot gold prices quoted higher with increased footfall in jewellery shops, signalling pick up in festival demand. File Photo

Gold prices rose by ₹145 to ₹38,885 per 10 gram in the national capital on Monday on a weaker rupee, according to HDFC Securities. In the previous trade, the precious metal had closed at ₹38,740 per 10 gram. In international market, gold traded marginally higher at USD 1,490 an ounce, while silver was trading at USD 17.57 per ounce. Read the bullion market report here

European stock markets

The pan-European STOXX 600 was down 0.8 per cent. File Photo

A three-day rally in European shares halted as investors assessed the scale of progress from Friday's US-China trade talks and worried that a Brexit withdrawal agreement was still some way off after signs of a major breakthrough.

The pan-European STOXX 600 was down 0.8 per cent at 0814 GMT, handing back nearly half of a more than 2 per cent gain on Friday that was its best day since January. Read the European stock markets report here

RBI-driven bond rally in India isn’t over

More rate cuts from the Reserve Bank of India, Asia’s most accommodative central bank, this year will help India’s sovereign bonds post modest gains despite the lingering fear of the government missing budget targets.

The yield on the new 10-year bond due in 2029 is likely to drop to 6.38 per cent by December-end, and further to 6.30 per cent by March, according to the median estimates in a Bloomberg survey. Read more on the survey on India's bond rally here

Broker's call

IndiaNivesh

IndusInd Bank (Buy)

CMP: ₹1,223.25

Target: ₹1,650

IndusInd Bank Ltd is engaged in banking and para-banking services. The Bank is involved in accepting deposits, such as savings accounts, current accounts and fixed deposits, and banking solutions. The Bank’s segments include treasury, corporate wholesale banking, retail banking and other banking operations. Read our Broker's call on IndusInd Bank here

Avenue Supermarts' shares

Shares of  Avenue Supermarts  - the owner and operator of supermarket chain DMart is on Monday slipped 1.3 per cent in early trade although it had reported a relatively stable performance for the second quarter of the current fiscal on Saturday.

Analysts are not too enthusiastic, as they say, the stock is trading at a higher valuation and will face stiff competition from the likes of Reliance Retail. Click here to read more on analysts take on the shares of Avenue Supermarts

Sensex surges 300 points

The 30-share BSE index Sensex surged 329.25 points or 0.86 per cent to 38,456.33 and the 50-share NSE index Nifty jumped 103.95 points or 0.92 per cent to 11,409.

The top stocks leading the positive zone int he Sensex pack were Tata Motors, ONGC, Bharti Airtel, Yes Bank and Axis Bank while the stocks trading in negative were Infosys, Bajaj Finance and Power Grid. The bank and financials stocks were cushioning the index.

In the broader index, the major gainers were Tata Motors, ONGC, Sun Pharma, JSW Steel, and Yes Bank while the laggards were Infosys, Bajaj Finance, Power Grid, UPL and Bajaj Finserv.

Gold and precious metals

Spot gold dropped 0.2 per cent to $1,485.86 per ounce.

Gold prices eased, extending falls for a third session as optimism surrounding US-China trade talks increased risk appetite, while a slight uptick in dollar also weighed on prices.

Spot gold dropped 0.2 per cent to $1,485.86 per ounce as of 0330 GMT, having shed 1 per cent in the previous week. Prices were set to decline for three consecutive daily sessions. US gold futures inched up 0.1 per cent to $1,490.20 per ounce. Read more on the prices of gold and other precious metals here

JSW Steel-Bhushan power deal

JSW’s acquisition of Bhushan Power

The National Company Law Appellate Tribunal (NCLAT) has asked JSW Steel to put its plan of paying Rs 19,700 crore for Bhushan Power and Steel on hold, till clarity emerges. The order was passed by NCLAT after the Enforcement Directorate attached the Bhushan Power and Steel asset on Saturday in a case filed by Punjab National Bank and Allahabad Bank. Click here to read more on the NCLAT order on JSW Steel and Bhushan Power

The stocks of JSW Steel were trading 3.15 per cent higher at Rs 224.

Deep OTM option traders, beware

If you are trading in deep out-of-the money options, then you have to pay an extra 20 per cent as a margin.

In a circular, the National Stock Exchange has said the additional margin of 20 per cent on the notional value should be levied and collected from the clearing member in case an entity trades in equity derivative stock option contracts and create a new short position in the deep out of the money (OTM) strikes. Click here to read more on the NSE announcement on deep OTM option traders

Adani shares jump

Shares of  Adani Gas  zoomed over 18 per cent after French energy giant Total announced acquisition of 37.4 per cent stake in the Gautam Adani-led firm .

The scrip jumped 17.98 per cent to ₹162.40 on the BSE. At the NSE, it advanced 18.41 per cent to ₹163.

Sensex zooms nearly 200 points

The 30-share BSE index Sensex zoomed nearly 200 points after the government data on inflation was released. The Sensex was trading 186.02 points or 0.49 per cent at 38,313.10 and the broader index Nifty was trading higher at 57.40 points or 0.51 per cent at 11,362.45.

The wholesale price based inflation eased to 0.33 per cent in September, a s against 1.08 per cent in August due to fall in prices  of non-food articles. The rate of price rise for the food articles was at 7.47 per cent during the month, while that for non-food articles stood at 2.18 per cent.

The top stocks lending support to the BSE index were Tata Motors, ONGC, Sun Pharma, Yes Bank and Tata Steel while the major losers were Infosys, Bajaj Finance, PowerGrid, L&T and Tech Mahindra.

The stocks of Infosys slumped nearly 4 per cent following the Q2 results on Friday. The country’s second-largest IT services company on Friday said its consolidated net profit declined by 2.2 per cent to Rs 4,019 crore for the July-September 2019 quarter.

In the 50-share index, the major stocks trading in positive pack were Tata Motors, ONGC, Sun Pharma, JSW Steel and Yes Bank while the laggards were Infosys, Bajaj Finance, Power Grid, UPL and Bajaj Finserv.

The IRCTC also made a steller debut in the stock markets after its successful IPO. While on the NSE, it opened at Rs 626, on the BSE, the beginning was even better at Rs 644. The company fixed the price at Rs 320.

Nifty Call

Positive sentiment has led equity markets gain considerable bullish momentum. Asian markets are in the green. The Nifty too opened with a marginal uptick and is currently trading above a critical resistance, indicating bullish bias.

Out of 50 stocks in the Nifty 50 index, 41 stocks have gained implying a broader rally. The volatility index – India VIX is higher by 2.6 per cent compared to previous close and is at 17.6 levels. All the sectoral indices have gained today. Read our Nifty call for October futures here

WPI inflation eases

Wholesale prices based inflation eased to 0.33 per cent in September, a s against 1.08 per cent in August due to fall in prices of non-food articles, government data showed.

The annual rate of inflation, based on monthly wholesale price index (WPI), was at 5.22 per cent in September 2018. Read more on the inflation data numbers here

Infosys shares fall

Shares of  Infosys fell over 4 per cent after the company reported a decline in its consolidated net profit for the July-September quarter.

Commodities market

China's September oil demand seen firm

Oil prices eased as scant details on the first phase of a trade deal between the United States and China undercut last week's optimism over the thaw that helped to lift crude markets by 2 per cent.

Brent crude futures edged down by 25 cents to $60.26 a barrel by 0436 GMT, while US West Texas Intermediate (WTI) crude futures was at $54.45 a barrel, down 25 cents. Both contracts rose more than 3 per cent last week, their first weekly gain in three. Read the commodities market report here

Sensex jumps nearly 200 points; Nifty up 63 points

The 30-share BSE index Sensex jumped 187.73 points or 0.49 per cent to 38,314.81 while the broader index Nifty was trading 63.05 points or 0.56 per cent higher at 11,368.15.

The stocks lending support to the BSE index were Tata Motors, ONGC, Vedanta, Tata Steel and IndusInd Bank while the laggards were Infosys, Bajaj Finance, Power Grid and L&T. Bank and financial stocks cushion the Sensex pack.

In the 50-share index, the top stocks trading in positive zone were Tata Motors, ONGC, Vedanta, Tata Steel, and IndusInd Bank while the losers were Infosys, Cipla, Bajaj Finance, UPL and PowerGrid

Big story | The EPF is changing

epf

While there are various retirement savings options available, including the Public Provident Fund (PPF), the National Pension Scheme and retirement mutual funds, EPF has been the mainstay of the Centre’s social security initiatives. Using the digital route to service the subscribers has greatly improved the user experience in EPFO over the past few years.

In an effort to improve the scheme, the Centre has been tweaking the rules constantly over the years. It is now proposing to change the EPFO rules through an amendment to the original law. How will these changes affect a salaried employee? Is Employees’ Provident Fund still better than other retirement savings solutions? Read more here

IRCTC shares jump on debut

Shares of Indian Railway Catering and Tourism Corp Ltd (IRCTC) more than doubled their value on market debut, after the state-run company saw a bumper initial public offering (IPO) that was subscribed nearly 112 times.

Currency market

Rupee was trading at 70.81 against the dollar. File Photo

The Indian rupee appreciated by 28 paise to 70.74 against the US dollar in early trade. At the interbank foreign exchange the rupee opened at 70.83, then gained further ground and touched a high of 70.74, registering a rise of 28 paise over its previous close. Read the local currency market report here

Shares rise ahead of inflation data

Shares edged higher ahead of the release of key inflation data, while broader Asian peers rose on optimism from the positive tone of the Sino-US trade talks.

The broader NSE index rose 0.50 per cent or 56.95 points at 11,362, while the benchmark BSE index was up 0.47 per cent or 180.34 points at 38,307.42.

The retail inflation probably reached a 12-month high in September, but still leaving room for further interest rate cuts because it's expected to remain below the Reserve Bank of India's target, according to a Reuters poll. However, the industrial output shrank at its fastest rate in more than six years in August, reflecting the impact of an economic slowdown.

Read more:Factory output turns negative, clocks slowest pace in 7 years

India's growth has been plagued by a drop in demand and flooding due to above-normal monsoon, Barclays analyst Rahul Bajoria said, but indicated that there could be a bounce back in the second half of the year. “The case remains strong for further support to aggregate demand, and the household sector in particular,” Bajoria wrote in a note.

Metal stocks led gains as the Nifty metals rose about 1.1 per cent as commodity prices rose due to the progress in the Sino-US trade talks.

Meanwhile, IT shares fell as Infosys Ltd reported a September-quarter profit that could only meet expectations on Friday, signalling a tricky macroeconomic environment for the sector Infosys results came after a below-par showing from larger rival Tata Consultancy Services a day earlier.

Infosys shares fell 3.44 per cent dragging the Nifty IT index 1 per cent.

Meanwhile, broader Asian peers rose as U.S. President Donald Trump outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, though officials on both sides said much more work needed to be done. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5 per cent. - Reuters

Markets poised for an FPI short-covering rally ahead of Diwali

Ahead of Diwali, there might be another sharp rally in the stock markets before the expiry of the October series derivatives. This will be because foreign portfolio investors (FPIs), the largest players in equity futures and options (F&O), seek to cover their huge net short positions this month.

FPIs still hold net short positions of around 54,000 contracts in India’s equity futures segment, data from exchanges showed. Click here to read more on the stock market rally ahead of Diwali

Forex market

The dollar held near a 2 1/2-month high

The dollar held near a 2 1/2-month high against the yen after Washington and Beijing announced progress towards a trade deal, while sterling hovered near a three-month peak on hopes for an orderly British exit from the European Union.

The British pound surged on Friday to as high as $1.2708 , its strongest level since July 1, and a five-month peak of 86.955 pence per euro, on optimism about orderly Brexit. Read the forex market report here

Sensex jumps 150 points

Equity benchmark BSE Sensex rose over 150 points led by gains in HDFC Bank, ITC and HUL, amid positive global cues and foreign fund inflow. After opening on a volatile note, the 30-share index swung over 200 points in early trade.

It is trading 91.04 points, or 0.24 per cent, higher at 38,218.12. Similarly, the broader NSE Nifty rose 32.40 points, or 0.29 per cent, to 11,337.45.

Top gainers in the Sensex pack in early session included Tata Motors, Vedanta, Tata Steel, Sun Pharma, Bajaj Auto, IndusInd Bank, Bharti Airtel, HUL and SBI, rising up to 4 per cent. On the other hand, Infosys, PowerGrid, TechM, Kotak Bank and TCS fell up to 3 per cent.

In the previous session on Friday, the BSE barometer ended 246.68 points, or 0.65 per cent, higher at 38,127.08, and the Nifty rose 66.70 points, or 0.59 per cent, to 11,301.25.

Foreign institutional investors (FIIs) turned net buyers in the capital market, infusing Rs 749.74 crore on Friday, while domestic institutional investors sold shares worth Rs 703.02 crore, data available with stock exchange showed.

Domestic equities followed global stocks that rallied after US President Donald Trump announced that US had reached a “very substantial” Phase 1 trade deal with China. Bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading significantly higher.

Market sentiment, however, remained volatile amid concerns over an economic slowdown after the World Bank on Sunday said India’s growth rate is projected to fall to 6 per cent after a broad-based deceleration in the initial quarters of this fiscal year, traders said. Markets are also reacting to to industrial output data released Friday evening, they added.

Read more:Factory output turns negative

Industrial output declined by 1.1 per cent in August due to poor performance by manufacturing, power generation and mining sectors, official data showed. Further, wholesale inflation data is scheduled to come on Monday, which may also influence trading, according to analysts.

The rupee, meanwhile, appreciated 19 paise against its previous close to trade at 70.83 in early session. Brent futures, the global oil benchmark, fell 0.51 per cent to USD 60.20 per barrel. - PTI

IRCTC debut

Mumbai, 01/02/2017: Employees give facelift to IRCTC's food centre at Chhatrapati Shivaji Terminius. Union minister of Finance Arun Jaitely today announce Finance and Railway budget together, First time after independance. The first merger of Rail Budget with Union Budget presented by Finance Minister Arun Jaitley in the Parliament focussed on improving rail safety, pushing digital transactions, listing rail public sector units on stock markets and setting fares competing with other modes of transportation. The Finance Minister also announce the waiver of service charges on e-tickets booked through Indian Railway Catering and Tourism Corporation (IRCTC). Photo: Prashant Nakwe.

If you’re one of the lucky ones who managed to purchase some shares in IRCTC during its recent IPO, brace yourself for a bumper listing of the stock on Monday. If market watchers are to be believed, the stock could see a hefty listing price, helping revive the lost momentum and interest in India's IPO markets this year.

The IRCTC IPO got a tremendous response  from investors and was subscribed 112 times. Click here to read more on what to expect from IRCTC's stock market debut

Global markets

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5 per cent. File Photo

Asian share markets pushed higher on Monday as signs of progress in the Sino-US trade standoff whetted risk appetites, while pressuring safe-haven bonds and the yen. Liquidity was lacking, however, with Japan off and a partial market holiday in the United States for Columbus Day.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5 per cent. While Tokyo was on holiday, Nikkei futures were trading at 22,105 compared with a Friday close of 21,798 in the Nikkei index. Read the global markets report here

Total buys stake in Adani Gas

French oil and gas giant Total S A has acquired a 37.4% stake in  Adani Gas Ltd , the listed gas unit of the diversified Adani Group, for Rs5,662 crore as it bets big on India’s shift towards a gas-based economy to address climate change concerns by using cleaner and greener fuels. The deal gives TOTAL joint control of  Adani Gas . Read more about the Total-Adani Gas stake sale deal here

The stock of Adani Gas surged 12.75 per cent to Rs 155.20 in the opening trade

Opening bell

The 30-share BSE index Sensex opened 81.16 points higher at 38,208.24 against the previous close of 28,127.08. Similary, the 50-share NSE index Nifty opened 39.3 points higher at 11,644.35 against the previous close of 11,305.05.

Weekly Trading Guide

SBI (₹254.5)

State Bank of India seems to have entered a consolidation phase after declining for two consecutive weeks. The stock has been fluctuating within the ₹246-262 range for the past six trading sessions. Though it attempted to rally, it was capped by the resistance at ₹262. So, unless the stock moves out of the range, the next potential trend will be uncertain. But one should remember that the existing overall trend is bearish and the stock may be vulnerable for further fall. The RSI continues to remain below the midpoint at 50 and the moving average convergence divergence indicator shows weakness. If the bears regain control and the price falls below ₹246, it could decline towards the support band between ₹230 and ₹233, which is a 10 per cent downside from current levels. However, if the stock attempts a recovery and breaks out of the resistance at ₹262, it will face an immediate hurdle at ₹267, beyond which it can appreciate to ₹275 over the medium term.

ITC (₹243.9)

The stock of ITC fell throughout last week after posting gains for the previous two weeks. It met with stiff resistance at ₹263 and faced significant selling pressure at this level. The stock seems to have tilted towards its overall bearish trend, unable to capitalise on the rallies. It has slipped below the support at ₹247, paving the way for further decline. The stock has also fallen below the 21-day and 50-day moving averages, indicating that the bears have taken charge. The relative strength index has dipped below the midpoint level of 50 and the moving average convergence divergence indicator has started showing weakness, adding to woes. The most likely scenario going forward is that the stock price will fall further and retest its previous low at ₹234, a break of which will result in the stock tumbling to ₹223 over the medium term. Alternatively, if the stock gains strength and move up from the current levels, it will face hurdles at ₹247 and ₹253 levels. The stock posted a weekly loss of 5.1 per cent.

Infosys (₹814.8)

The stock of Infosys, since the beginning of the month, has been moving in a sideways range in the band between ₹781 and ₹800. It broke out on Friday and closed the week at ₹814.8, propelling the stock price above the 21- and 50-day moving averages. The stock has formed higher high and higher low in daily time frame chart increasing the possibility of it strengthening further. But it faces a hurdle in the form of a minor resistance at ₹814 level. One can observe an uptick in the relative strength index as it has crossed above the midpoint level at 50; but there is no bullish confirmation yet in the moving average convergence divergence indicator. Above ₹814, the stock can potentially appreciate, retesting its 52-week high of ₹847 and it can even go up further in the coming trading sessions. If the stock falls from the current level, negating the breakout, it will find support at ₹800. Support below that is at ₹781. The stock posted a weekly gain of 2.7 per cent.

RIL (₹1,352.6)

The stock has been on an uptrend since the second half of September. After a minor correction during the past week, Reliance Industries (RIL) took support at around ₹1,300 and moved up. The stock ended the week at ₹1,352 and faces a resistance at ₹1,365. The price action is very bullish and the uptrend can be expected to continue next week. The relative strength index is rising steadily and does not indicate any over-bought levels. The moving average convergence divergence indicator also corroborates the uptrend. On the back of the positive sentiment, the stock will most probably break out of ₹1,365 and can even test its life-time high of ₹1,417.5 in the near term. But there is a slim chance that the stock might witness profit-booking, in which case ₹1,300 will act as a substantial support. A break below that level could result in further fall towards the price band between ₹1,240 and ₹1,230 over the medium term. The stock posted a weekly gain of 3.4 per cent.

Tata Steel (₹339)

The stock of Tata Steel was sluggish over the past week. Noticeably, the stock briefly traded below the key support at ₹330, but it gradually moved up and ended the week at ₹339. Hence, on weekly basis, the support at ₹330 stays valid, providing some hope for the bulls. Observing the daily chart, the relative strength index indicates a bullish divergence, paving the way for a recovery. If the stock price bounces from current levels, it could face an immediate resistance at ₹345. The next hurdle for the bulls lies at ₹360 — the 50-day moving average. But the overall trend remains bearish and the stock could still face selling pressure on rallies. Hence, if it cannot stage a recovery and declines, ₹330 will act as a critical support. Below that, the stock will most likely attract fresh selling and the price could fall to the support of ₹300. The price level of ₹330 is an important support. The stock posted a weekly gain of 1.8 per cent.

Index Outlook

The Sensex and the Nifty were volatile in the truncated past week, but managed to end on a positive note. All eyes are on India Inc’s second quarter earnings announcement, which can offer direction to the benchmark indices. Investors should tread with caution in the ensuing week. Read our index outlook for the upcoming week here

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