Here are the key highlights from today’s trading session:
1. Sensex & Nifty close in the green for 5th straight day
2. Nifty closes above 11,700 for the 1st time since February 25
3. Midcaps underperform with the index closing 0.6% lower
4. Sensex gains 304 points to 39,879 & Nifty 76 points to 11,739
5. Nifty Bank jumps 111 points to 22,965 while Midcap slips 88 points to 17,128
6. Reliance, HDFC Bank, Infosys & HDFC top contributors to Nifty
7. Titan top Nifty gainer after positive commentary on Q2 business, stock up 4%
8. Autos continue to move higher on improved demand; Bajaj Auto, Hero MotoCorp up 3% each
9. Reliance gains 2% on ADIA’s Rs 5,513 crore investment in Reliance Retail
10. Bajaj Finance top Nifty loser after reporting lowest AUM growth in Q2
11. Govt’s deregulation plan for natural gas lifts ONGC & Oil India
12. Market Breadth favours declines; advance-decline ratio at 2:3
Closing Bell: Sensex ends 300 points higher, Nifty at 11,738; RIL contributes most gains, up over 2%
Indian indices ended for the fifth day on Wednesday led by gains in Reliance Industries after Abu Dhabi Investment Authority said that it will invest Rs 5,512.50 crore in Reliance Retail Ventures. Other heavyweights Titan, HUL, Maruti and M&M also contributed to the benchmarks.
The Sensex ended 300 points higher to 39,878.95 while the Nifty50 index ended at 11,738.85, up over 76 points. Surprisingly, broader markets ended lower as compared to the benchmarks.
Nifty Auto was the best-performing index of the day, up over 1% while Nifty Media closed over 2 percent lower.
Titan, Bajaj Auto, Hero MotoCorp, Maruti Suzuki and RIL were the Nifty50 top gainers while Bajaj Finance, BPCL, Tata Motors, Hindalco and Power Grid were the index top losers.
India Volatility Index ended 2.2 percent higher, above the mark of 20 at 20.1. 728 stocks on the NSE ended with gains while 1,131 stocks ended with losses.
Rupee Update: The Indian rupee ended with modest gains after two-day losing streak. The rupee settled at 73.33 against the US dollar as compared to Tuesday’s close of 73.46.
Glenmark Pharma gets USFDA nod to market drug for relapsing multiple sclerosis
Drug major Glenmark Pharma on Wednesday said it has received final approval from the US health regulator for Dimethyl Fumarate delayed-release capsules, used for treatment of relapsing forms of multiple sclerosis in adults. The approved product is a generic version of Biogen Inc’s Tecfidera delayed-release capsules. Glenmark Pharmaceuticals Inc., USA, has been granted final approval by the United States Food and Drug Administration (USFDA) for Dimethyl Fumarate delayed-release capsules in the strengths of 120 mg and 240 mg, Glenmark said in a regulatory filing. Quoting IQVIA sales data for the 12 month period ending August 2020, Glenmark said Tecfidera delayed-release capsules, 120 mg and 240 mg, market achieved annual sales of approximately USD 3.8 billion.
Oil & gas stocks move higher on news of CCEA approving guidelines for natural gas marketing
Nifty50 index weightage: RIL, IT witness highest increase in 2020
2020 has been a volatile year for the markets. The Nifty50 index has not only witnessed massive volatility this year but also fluctuation in weights of various sectors in the index. Brokerage house Motilal Oswal highlighted these changes in a recent report.
Although Nifty has witnessed significant volatility over the past quarter, it has recovered considerably from March 2020 lows and has managed to reclaim the psychological levels of 10,000.
According to MOSL, the IT sector has seen the highest increase in weightage in this year. It has risen 400 bps to 16.8 percent in September 2020 from 12.8 percent in December 2020. The Nifty IT index has also surged 33 percent in 2020 (YTD). Click here to read more
Macquarie raises TP on Solara Active Pharma by over 40%; says re-rating to continue
The share price of Solara Active Pharma climbed up to 19 percent on Wednesday after Macquarie raised its target price to Rs 1,680 per piece. The stock rallied as much as 19 percent to Rs 1,248.70. It pared some gains to trade 12 percent higher to Rs 1,174 on the NSE, at 2 pm.
Solara is a top 3 pure-play API manufacturer in India, stated Macquarie’s report. The company was formed after the demerger of Strides Pharma and Sequent Scientific, and thus benefits from a legacy of three decades in API space, the report added. This makes it one of the strongest API players in the market today!
Macquarie noted that Solara’s strategy of working with customers on a long-term basis (50-50 percent contracts are long-term) rather than capitalising on short-term opportunities will lead to higher wallet share. Hence, it believes it’s growth is more sustainable than its API peers.
According to the report, it has a strong regulatory track-record and has scope of a re-rating further ( stock up 195 percent in past one year v/s Nifty’s 4 percent). We believe the company is in it for a long haul.
Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking): Positive cues from the global markets led to another gap up opening for Nifty yesterday. The bulls are firmly in control over the indices as the Nifty continued its upmove and surpassed the swing high of 11,618. Honestly, this sharp upmove has surprised us to an extent and as we did not expected such a sharp surge, we have been selective and have not participated aggressively in this move. Now, although the oscillator readings on the hourly charts are in overbought zone, the momentum remains strong and hence, traders are advised to take a sector/stock specific approach and look for trading opportunities.
Also, the earnings season for the July-September quarter kicks of now with the IT giant TCS declaring its numbers today. This too will lead to some stock specific momentum. The immediate support for the Nifty are now placed around 11,560 and 11,520 whereas resistances is seen in the range of 11,750-11,800, added Chavan.
Tighter norms are based on misinformation & misperception. It’s applicable to all companies, not just Indian IT, says Shivendra Singh of NASSCOM
State Bank of India’s outgoing Chairman, Rajnish Kumar, the man credited with overseeing the rescue mission for Yes Bank, today opened up about the conditions under which the troubled lender was saved.
By the time Reserve Bank of India had put Yes Bank under moratorium in early March and limited withdrawals from the bank, conversations had begun about how the bank would be saved. In the end, it took eight financial institutions led by State Bank of India and Rs 10,000 crores of combined capital infusion, to resuscitate Yes Bank.
“As chairman you are supposed to take many decisions and all decision making is a collective decision making. Yes Bank definitely – the stage at which SBI stepped in, it was in ICU counting its last breath,” Kumar said. Read more on this here
Stock Update: Glenmark’s share price traded 0.38 percent lower to Rs 488.75 on the NSE after the company said that it has been granted final approval by the U.S. FDA for its Dimethyl Fumarate Delayed-Release Capsule, 120 mg and 240 mg. The drug is the generic version of Tecfidera Delayed-Release Capsule of Biogen, Inc., the company said in its exchange filing. The total sales for Tecfidera Delayed-Release Capsule, 120 mg and 240 mg was approximately $3.8 billion, as per data from the IQVIA for the most recent 12-months ending August.
Keshav Lahoti, Equity Analyst, Angel Broking on multiplex stocks: We believe in a couple of weeks post opening restrictions will start easing off. We are positive on multiplex stocks PVR and Inox Leisure given that long term fundamentals are still intact for the sector and stocks prices have corrected ~40% due to covid. We prefer Inox Leisure over PVR as it has a strong balance sheet and it is trading at discount compared to PVR. Although we believe in the short term, there will be challenges for the companies.
Jyoti Roy- Equity Strategist, Angel Broking: With this investment, Reliance Retail has raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks. We maintain our positive view on Reliance industries and expect that the digital and the retail business will be the future growth drivers for the company. We continue to maintain our buy rating on RIL with a target of Rs 2,543.
Disclosure: RIL, the promoter of Reliance Retail, controls Network18, the parent company of CNBCTV18.com.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments: The markets have opened on a flat note. However, it is still expected to achieve a target of 11750-11800. If it can sustain those levels, we can expect a new target of 12000 during the course of this month. A strong support has been formed around the 11300 level.
Titan jumps 6% on strong recovery in jewellery division in Q2 update
Titan Co’s shares rallied as much as 6 percent to Rs 1,268 apiece on Wednesday after the Tata Group luxury brand released its quarterly business update for Q2 FY20-21. At 10:30 am, Titan traded 4 percent higher to Rs 1,249. In its Q2 update, Titan said that the recovery rate in jewellery division is 98 percent as compared to the revenue of the same quarter last year. Its recovery rate in metro cities has been improving gradually while that in non-metros seem to have recovered substantially. Sales in the month of September have been decent despite the period of ‘shradh’. The company continued to sell raw gold from its inventory worth Rs 390 crore in Q2FY21. The watches and wearables division saw a recovery rate of 55 percent in Q2 as compared to last year. Meanwhile, the month of September saw a recovery of around 70 percent. The recovery rate in the watches division is steadily rising sequentially due to increasing walk-ins.
Market Watch: Ruchit Jain of Angel Broking
“First is a buy call on Bata. Today the stock price has given a breakout from a falling trend line resistance and even if you look at the volumes, along with the price up moves the volumes are going good which is indicating that the buy trend is there. So, one can buy Bata with a stop below Rs 1,340 for near term targets of Rs 1,430.”
“Cement is one space which is attracting good volumes since morning. UltraTech Cement has given a breakout from a trend line resistance yesterday itself and today it has shown a follow up buying as well. So, UltraTech Cement can be bought with stop below Rs 4,025 and expecting target in the range of Rs 4,400-4,450.”
Action packed October: Axis Securities lists top themes for the month, gives top stock picks
The Indian market consolidated in September after a robust performance in July and August with more volatility ahead of the US Presidential elections and rising coronavirus cases across the globe. Going ahead, October is packed with events that are both global and local. Global events include the run-up to the US elections, news flow on the COVID vaccine, and earnings for technology companies. Whereas, local events include the Q2FY21 earnings season, monetary policy committee meet, etc. Brokerage house Axis Securities believes that volatility is bound to rise in the month and therefore, the theme of flight to quality will remain intact. Moving on to model portfolio, the brokerage removed ITC from its top picks as the stock continues to see business challenges. It added Dr Reddy’s in its place which is seeing a structural improvement in business prospects. More here
H-1B visas: Trump administration impose new curbs
The Trump administration has announced new restrictions on H-1B nonimmigrant visa programme which it said is aimed at protecting American workers, restoring integrity and to better guarantee that H-1B petitions are approved only for qualified beneficiaries and petitioners, a move which is likely to affect thousands of Indian IT professionals. The interim final rule announced by the Department of Homeland Security on Tuesday, less than four weeks ahead of the US presidential election, will narrow the definition of specialty occupation as Congress intended by closing the overbroad definition that allowed companies to game the system. It will also require companies to make real offers to real employees, by closing loopholes and preventing the displacement of the American workers. More here
Rupee opens slightly lower against the US dollar
Buzzing: RIL shares jump 4% after ADIA invests in Reliance Retail Ventures
Shares of Reliance Industries jumped around 4 percent on Wednesday after it announced that Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.5 crore in Reliance Industries Ltd’s retail arm, Reliance Retail Ventures Limited (RRVL). This fund infusion is the seventh investment in RRVL over the past seven weeks. Earlier, ADIA had invested Rs 5,683.50 crore for a 1.16 percent stake in Jio Platforms. The stock was the biggest contributor on Nifty as well as Sensex, up as much as 3.9 percent to Rs 2,296 per share on BSE post the announcement. It has jumped over 50 percent in 2020 on the back of various investments in its digital arm and now the retail arm.
US trade deficit up at 14-year high to $67.1 billion in August
The US trade deficit rose in August to the highest level in 14 years. The Commerce Department reported Tuesday that the gap between the goods and services the United States sells and what it buys abroad climbed 5.9 percent in August to USD 67.1 billion, highest since August 2006. Exports rose 2.2 percent to USD 171.9 billion on a surge in shipments of soybeans, but imports rose more up 3.2 percent to USD 239 billion led by purchases of crude oil, cars and auto parts. More here
Global Markets: Asian stocks inch up, defy US stimulus gloom
Asian stock markets edged higher on Wednesday, brushing off Wall Street’s weaker finish, which came after US President Donald Trump abruptly broke off economic stimulus negotiations with lawmakers. Trump cancelled talks with Democrats in a Tweet saying that negotiations will stop until after the election when he promises a major stimulus bill. That sent Wall Street tumbling and safe assets like the dollar and bonds higher. Investors in Asia, however, seemed less rattled, holding a view that stimulus would be delayed rather than derailed. MSCI’s broadest index of Asia-Pacific shares outside Japan crept 0.2 percent higher to a fresh two-week peak, led by a 0.8 percent gain in Australia where an expansionary budget lifted stocks. Broad gains in Hong Kong lifted the Hang Seng 0.7 percent while Japan’s Nikkei fell 0.2 percent.
Sectoral trend at opening
Opening Bell: Sensex opens flat, Nifty around 11,650; banks decline, RIL up 1%
Indian indices opened with minor cuts on Wednesday following muted trend in the Asian peers after US President Donald Trump abruptly broke off economic stimulus negotiations with lawmakers. Trump cancelled talks with Democrats in a Tweet saying that negotiations will stop until after the election, when he promises a major stimulus bill. At 9:18 am, the Sensex was down 66 points at 39,509 while the Nifty fell 14 points to 11,648. The rise in heavyweights RIL, TCS, Airtel were capped by losses in the financials. RIL rose 1 percent after Abu Dhabi Investment Authority said that it will invest Rs 5,512.50 crore in Reliance Retail Ventures.