Thank you readers! Here are the key highlights from today's session
- Sensex and Nifty Close Higher But Off Intra-day Record Highs
- Nifty Hit Intra-day Record High Of 12,969 and Sensex 44,271
- Nifty Closes 67 Points Higher At 12,926 & Sensex 195 Points Higher At 44,077
- Nifty Bank Slips 212 Points To 29,024 While Midcap Rises 212 Points To 19,221
- Banks Underperform With Nifty Bank Falling Almost 1%; ICICI Top Loser
- Midcap Index Outperforms Frontliners, Gains Over 1% To End At A 26-mth High
- Reliance, IT Majors Lift Nifty While Financial Heavyweights (HDFC Twins, ICICI) Drag
- Nifty IT Gains The Most Amongst Indices With All Its Constituents In The Green
- IndusInd Gains Nearly 5% On RBI Panel’s Recos Of Hike In Promoter Cap For Banks
- Reliance Rises 3% & Future Retail 10% on CCI’s Nod For The Deal
- Ujivan, IDFC, Equitas Post Gains Of 18-20% On RBI Panel’s Recommendations
- Ambit Initiates Coverage On Gland Pharma With A Buy Rating; Stock Up 15%
- Market Breadth Favours Advances; Advance-Decline Ratio At 3:2
Closing Bell: Sensex ends 195 points higher, Nifty holds 12,900; IT, energy stocks surge
Indian indices ended higher on Monday helped by gains in IT and energy stocks. However, major financial stocks declined after new recommendations by the Reserve Bank of India (RBI). The sentiment was also lifted, trackimg gains in global peers, on hopes of a rapid rollout of COVID-19 vaccine. The Sensex ended 195 points higher at 44,077 while the Nifty rose 68 points to settle at 12,927. However, the indices hit their record high levels in intarday deals. The Sensex rose as much as 389 points to its new high of 44,271 while the Nifty added 110 points to hit its all-time high of 12,969.
Broader markets were also higher with the Nifty Midcap up 1.2 percent and Nifty Smallcap up 2 percent. Among scetors, Nifty IT and Nifty Energy surged 2.7 percent each while Nifty Pharma added 1.8 percent and Nifty MEtal was up 1 percent. However, Nifty Fin Servcies and Nifty Bank declined 1 percent and 0.7 percent, respectively. On the Nifty50 index, ONGC, IndusInd Bank, GAIL, Dr Reddy's and Infosys gained the most while HDFC, ICICI Bank, Axis Bank, SBI Life and Titan led the losses.
AstraZeneca says its COVID-19 vaccine is up to 90% effective
British drugmaker AstraZeneca said on Monday its vaccine for COVID-19, developed along with the University of Oxford, is up 90 percent effective, adding to the number of recent breakthroughs against the disease caused by novel coronavirus. The AstraZeneca vaccine (labelled AZD1222 in trials), which will be manufactured in partnership with Pune’s Serum Institute, is also expected to be among the cheapest, costing a few dollars. “One dosing regimen showed vaccine efficacy of 90 percent when AZD1222 was given as a half dose, followed by a full dose at least one month apart. Another dosing regimen showed 62 percent efficacy when given as two full doses at least one month apart. The combined analysis from both dosing regimens resulted in an average efficacy of 70 percent,” the company said in a statement.”
Tractor sales likely to grow 15% in FY21; farm mechanization to aid demand, says VST Tillers Tractors
Better agricultural produce and festive season have led to a rising demand for tractors and farm equipment. VST Tillers Tractors has reported significant improvement in sales in the September quarter and expects demand to remain higher going ahead.
Speaking to CNBC-TV18, Antony Cherukara, CEO, VST Tillers Tractors, while giving a positive outlook for November, said that the increase in farm mechanization also aided demand.
“We see the uptick in demand continuing mainly because of the festival season and the procurement of produce has been good so far. So I think the uptick will continue into November,” he added.
Cherukara expects 12-15 percent growth in tractor sales and more than 20 percent growth in tillers business for FY21. Read more here.
Ruchit Jain of Angel Broking
We expect the pharma sector to again resume its momentum. We have seen a good consolidation in the last 15-20 sessions. Aurobindo Pharma looks quite positive from a trading perspective. The volumes have picked up post the quarterly result announcement. Keeping a stop below Rs 834, one can buy Aurobindo Pharma for a target of Rs 890.
Max Financial is my second pick over here, a good breakout from a time-wise correction has been seen today, good open interest built up was seen during last week in the derivative segment as well. Buy this stock at current levels with a stop loss below Rs 618 for a target of Rs 680.
Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd
The recent rally was led by the banking sector post Q2FY21 result. The key points which favored expansion in valuation are (a) Improvement in collection efficiency, the majority of the banks have reported more than 90% collocation efficiency. (b) Improvement in NIM, led by a contraction in excess liquidity and positive impact of capital raise. (c) Improvement in asset quality owing to standstill benefit given on asset classification.
Another key development investor liked was management commentary for expected restructuring loan for COVID impacted individual and corporate book. Most of the banks inferred that they could see restructure book in the range of 2 to 5 percent. However, most of the banks has already taken non-specific provision in the range of 1 percent to 3 percent of advance which way above than RBI requirement (10% of restructuring book).
We expect restructuring scheme tenure extension and EMI affordability (lower interest rate) will enhance retail and SME borrower paying ability and intention.
Hence, looking at Q2FY21 numbers, sufficient non-specific provision and lower expected restructure book will support large private bank's stock prices.
We have a positive view on the large private bank due to better earnings and asset-quality visibility. We have a Buy rating on Cholamandalam Investment and IDFC First Bank.
RBI Panel Report: Positive for IndusInd Bank, IDFC, Bandhan Bank and Ujjivan Financial
RBI, in its latest report, noted that the initial five-year lock-in period for promoter shareholding in banks with a minimum holding of 40 percent may continue but the cap on promoters' stake in the long run of 15 years can be increased to 26 percent from 15 percent currently.
Analysts believe that the move is in the right direction. Timing of reworking guidelines couldn’t have been more apt, they said. Among individual stocks, the move is positive for IndusInd Bank, IDFC, Bandhan Bank and Ujjivan Financial.
It is positive for IndusInd bank and DCB as the promoter holding now stands at 14.68 percent and 14.88 percent, respectively, which could be increased.
RBI has also allowed banks under the Non-Operative Financial Holding Company (NOFHC) structure to exit; this will be positive for Ujjivan Financial Services.
During the day, Equitas Holdings and IDFC were locked in the 20 percent upper circuit on the BSE. Ujjivan Financial Services, Ujjivan Small Finance Bank, IDFC First Bank, and IndusInd Bank were up between 5 percent and 15 percent. Continue reading
India likely to report current account surplus for current fiscal year: Adviser
India is likely to report a current account surplus at the end of the current financial year ending in March 2021, mainly led by a fall in imports, the chief economic adviser at the ministry of finance said on Monday. India’s current account surplus rose to a record USD 19.8 billion in April-June as its trade deficit narrowed sharply, the Reserve Bank of India said earlier. Demand for imports has fallen amid the COVID-19 pandemic, coupled with recent economic reforms initiated by the government to boost manufacturing, Krishnamurthy Subramanian told a virtual conference organised by Confederation of Indian Industry (CII).
Strides Pharma Science gets USFDA nod for Prednisone tablets
Strides Pharma Science Ltd on Monday said it has received approval from the US health regulator for its generic version of Prednisone tablets, prescribed for a variety of conditions, including allergies, respiratory illness and arthritis. The approval for Prednisone tablets by the US Food & Drug Administration (USFDA) granted to the company’s step-down wholly-owned subsidiary, Strides Pharma Global Pte Limited, Singapore, is for multiple strengths of 2.5 mg and 5 mg, Strides Pharma Science said in a regulatory filing. The product is bioequivalent and therapeutically equivalent to the reference listed drug (RLD), Deltasone tablets, 2.5 mg and 5 mg, of Pharmacia and Upjohn Co, it added. Citing IQVIA MAT September 2020 data, the company said the US market for Prednisone Tablets USP, 2.5 mg and 5 mg is approximately $30 million.
More here
Not yet time to book profits on Tata Steel, says Prakash Diwan
“Don’t think it is time to book profits on Tata Steel. It is at a 52-week high but there is still lot more to go for this stock,” said market expert Prakash Diwan in an interview with CNBC-TV18. He believes Motherson Sumi looking at derisking their business is something that will definitely give a lot of comfort. “As a trader, my instinct says that Ujjivan would probably lead the game,” he said.
More here
Not easy to convert into bank as costs increase, says Bandhan Bank
Giving banking licence to conglomerates, allowing non-banking financial companies (NBFCs) to convert to banks, raising promoter stake in private sector banks to 26 percent are some of the key recommendation of an internal working group of Reserve Bank of India (RBI), which was appointed to study bank promoter rules. CS Ghosh, MD and CEO, Bandhan Bank shared his views on the issue. “When an NBFC is converting into the bank, it is not very easy, it is complex, cost will increase,” Ghosh said in an interview with CNBC-TV18. On promoter stake dilution, he said, “This is a good change that has been suggested by the internal committee. They have given 15 years of time for dilution. There is no need of interim period for dilution.”
More here
Market Watch: Jay Thakkar, VP & HoR, Marwadi Shares and Financials Ltd
“The first buy recommendation is on Cipla, one can buy this for a target of Rs 775 with a stop loss of Rs 745, and this stock has clearly broken out from a sideways consolidation that is its triangular pattern, it is a clear buy crossover in its momentum indicators, so I think that Rs 775 is a level to watch out for in the short term in this week itself.”
“A second buy recommendation that I have is on HCL Technologies. This stock has clearly formed a good falling wedge pattern and I see a 38.5 to 50 percent retracement on the upside. So one can buy HCL Tech targeting around Rs 856 to 870. One can buy this with a stop loss of Rs 822.”
Not in a hurry to become a bank, says Shriram Transport Finance
The Reserve Bank of India’s (RBI) working group on private bank ownership paved way for the conversion of large non-banking financial companies (NBFCs) to banks. It proposed that well-run NBFCs that have operated for a minimum of ten years be allowed to convert if they clear due diligence. “The announcement is just a recommendation, there could be a lot of changes,” said Umesh Revankar, MD of Shriram Transport Finance in an interview with CNBC-TV18. According to him, there are certain challenges with regards to converting an NBFC into a bank. “Shriram Transport is not in a hurry to become a bank,” added Revankar. The MD further said, “Starting a bank is much easier than converting into one.” For the entire interview, watch the video
Gold rate today: Yellow metal trades higher; may face resistance at Rs 50,350 per 10 gms level
Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Monday tracking a positive trend in the international spot prices amid surging COVID-19 infection cases while silver prices also gained marginally. At 11:10 am, gold futures for December delivery rose 0.20 percent to Rs 50,314 per 10 grams as against the previous close of Rs 50,212 and the opening price of Rs 50,234 on the MCX. Silver futures traded 0.10 percent higher at Rs 62,223 per kg. The prices opened at Rs 62,119 as compared to the previous close of Rs 62,158 per kg. Last week, gold prices down by 1.52 percent and silver corrected by 2.58 percent due to development on the front of coronavirus vaccination and it is expected that the vaccine may start to distribute from this mid-December. More here
Market Watch: Manas Jaiswal, manasjaiswal.com
"One can create long position on Divi’s Laboratories with a stop loss below Rs 3,500 and target of Rs 3,800-3,850. Take a long call in ACC at current levels, keep your stop loss below Rs 1,700 and the first target comes near Rs 1,800 mark. Over the next two-three trading session, I feel that ACC has potential to test Rs 1,825 also."
RIL shares surge over 3% as CCI clears deal with Future Retail
The share price of Reliance Industries surged over 3 percent on Monday after the Competition Commission of India (CCI) approved the Rs 24,713 crore Future Group-Reliance Retail deal. The stock gained as much as 3.68 percent to Rs 1,969.35 per share on the NSE. Meanwhile, Future Retail's shares hit the 10 percent upper circuit to trade at Rs 79.25 on the NSE. In a tweet on Friday, the regulator said it has approved "acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited". Deals beyond a certain threshold require approval of the Competition Commission of India (CCI), which keeps a tab on unfair business practices across sectors. More here
SREI Infra decline over 15% on special audit by RBI, downgrade by Brickwork Ratings
Shares of SREI Infrastructure Finance fell over 15 percent on Monday after a special audit of the firm and its subsidiary is to be conducted by the Reserve Bank of India (RBI). The sentiment was further weighed after Brickwork ratings downgraded long-term ratings of the firm to BB from BBB-. The stock fell as much as 15.6 percent to Rs 5.66 per share on BSE. In the last one year as well the stock has fallen over 23 percent. Brickwork Ratings, in its review, said that the rating downgrade is mainly driven by continued stress on asset quality in the equipment and infrastructure financing loan portfolios and a significant decline in profitability.
Ashok Leyland announces voluntary retirement scheme for employees
Hinduja Group flagship Ashok Leyland said it has commenced a Voluntary Retirement Scheme (VRS) for its employees that will help to create a more cost effective and efficient organisational structure. Its board of directors, at a meeting held on November 6, approved the scheme, Ashok Leyland said in a BSE filing. The scheme would be implemented over a period of nine months, the company said. "The current landscape of the global pandemic provides scope for people to pursue flexible career opportunities and this will provide a window for the same," said N V Balachandar – President HR, CSR and Communication. More here
CG Power lenders agree for loan restructuring, pave way for Murugappa takeover
Lenders to CG Power and Industrial Solutions have agreed to a one-time loan restructuring to pave way for the Chennai-based Murugappa Group taking over the scam-hit equipment maker. CG Power had total debt of Rs 2,161 crore, out of which a consortium of 14 banks have taken a haircut of Rs 1,100 crore and restructured the remaining. In separate but almost identical stock exchange filings, CG Power and Murugappa Group firm Tube Investments of India Ltd (TIIL), said lenders have accepted one-time settlement and restructuring of debt. In August, TIIL had agreed to invest Rs 700 crore in CG Power for a 56.61 percent stake. More here
Market Watch: VK Sharma, EVP of HDFC Securities
“I like Bharti Airtel, so among the Nifty stocks I am buying Bharti Airtel, I am buying the 490 Call at Rs 7.50 with a stop loss at Rs 4 and target of around Rs 15.”
“Another Nifty stock which I am buying is Nestle in which we have seen stock price going up on Friday and the open interest (OI) on the other hand has been reduced for the series. So I think there is some still short covering to happen and I will but the 17, 500 Call in Nestle at Rs 222, stop loss at Rs 140 and target of around Rs 400.”
Opening Bell: Sensex, Nifty at record highs on vaccine hopes; financials gain
Indian shares opened higher on Monday, tracking gains in Asian peers, on hopes of a rapid rollout of coronavirus vaccine. Heavyweights RIL, HDFC Bank, TCS, HUL and Bajaj Finance contibuted the most to the indices. At 9:18 am, the Sensex was up 303 points at 44,185 while the Nifty rose 86 points to 12,945. The Sensex rose as much as 389 points to its new high of 44,271 while the Nifty added 104 points to hit its all time high of 12,963.Broader markets were also positive with the Nifty Midcap and Nifty Smallcap indices up 1.1 percent and 1.6 percent, respectively. All sectors were also in the green. Nifty Metal and Nifty Realty rose the most, up 0.9 percent each, while Nifty Auto and Nifty IT added 0.6 percent. Nifty Bank and Nifty Fin Services were also up around 0.4 percent.
