Stock Market Highlights: Sensex ends 207 points lower, Nifty gives up 18,250 as market snaps 2-day winning run

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Not big fan of reopen trade: Rajeev Thakkar

Rajeev Thakkar, Director and CIO at PPFAS Mutual Fund, is not a big fan of the reopen trade. "Just because something was shut down and something is opening up now... Some of the businesses, if they are low RoC businesses, businesses that haven't generated a meaningful amount of wealth for shareholders for many years... Just because you see one or two quarters of a big earning rebound, it doesn't mean that we should go out and buy them," he said. 

For instance, he said, barring Indigo, most airlines have lost money for shareholders. "So just because there's a big uptick in cyclical demand for a few quarters, it would not make us buyers in that space... We would rather look at sustainability of a business over a few years rather than just looking at one or two quarters," he added.

Some PSU banks may give good returns: Rajeev Thakkar

Rajeev Thakkar, Director and CIO at PPFAS Mutual Fund, believes PSU banking stocks are very interestingly poised, and some of them may make good returns for shareholders. "We have seen some consolidation over there with mergers and things like that. But historically, there has been this overhang where sometimes mergers are pushed through which may not really be in minority shareholders' interest or sometimes capital allocation decisions are a bit suspect. So in a scenario where we see the whole sector is rebounding, we would rather stick with the private sector names. But some of the public sector names are also interestingly poised and valuations on some of those are reasonably attractive," he said. 

"We own ICICI Bank, Axis Bank and HDFC Bank," he added.

Positive on financial stocks: Rajeev Thakkar

Rajeev Thakkar, Director and CIO at PPFAS Mutual Fund, believes financial stocks are well placed, especially ones that have come out of the pandemic relatively unscathed. "In the COVID times, the interest rates were driven extremely low, so the whole benefit of low cost deposits from CASA for the lenders was not coming through. But that cycle seems to be behind us and gradually, we should see some uptick in the short-term interest rates, which would increase the margins for the lenders where their current account and savings account balances are at a very low cost. They would be able to lend at relatively higher interest rates," he said. 

Also, the muted credit growth situation seen so far will gradually change as the private sector starts to ramp up capital expenditure, given increased demand and the shortage-like scenario in various sectors, he said. "Even at the retail-end, we are seeing an uptick in the mortgage lending with the increased demand for homes. Auto loans and personal loans also should see an uptick down the road... All in all, the banking and financial services pay seems to be quite attractive. Even the insurance space, especially in the life and health areas, is seeing increased demand with the increased awareness on account of the COVID scenario. So going into COVID, all players in the market place including us were scared about what the NPA levels will be and what the damage on the balance sheets would be like. However, most of the fears were overblown, and whatever little damages there are should get corrected in the next few months," he added. 

Nifty50 has strong hurdle near 18,325: LKP Securities' Rohit Singre

The Nifty50 index again formed a bearish candle on the daily chart, said Rohit Singre, Senior Technical Analyst at LKP Securities. The index has formed a strong hurdle zone near 18,325, he said. "Some profit booking may be seen before those levels. But if it manages to cross that zone decisively, the next move towards 18,500-18,600 zone is possible. Fresh longs would be suggested above 18,325. On the other hand, immediate support is coming near 18,150-18,000 levels," he added. 

Game Theory: How Professor Sanjay Bakshi relates driving to investing

Professor Sanjay Bakshi, a well-known academician in the field of value investing and behavioural finance, has drawn comparisons between driving and investing.
Bakshi, a Managing Partner at ValueQuest Capital LLP and now Adjunct Professor at Pune-based FLAME University, compared the margin of safety with the distance between two cars. (Read more)

Market At Close | Godrej Consumer, Union Bank, Canara Bank top midcap gainers; Zee, Vedanta, Nalco top losers

Here are some highlights: 

--Banks drag market; Nifty Bank falls 364 points (0.9%) to 40,874 

--Midcap index gains 24 points to 31,126

--Maruti Suzuki closes 1% higher amid volatility post-earnings

--Metal stocks fail to hold intraday gains; Nifty Metal slips 2%

--Asian Paints top Nifty gainer, up 4% after price hike announcement

--UPL gains 4% after strong show by Sharda Crop

--Cipla’s healthy Q2 leads to gain in pharma names; Sun Pharma, Divi’s rise up to 3.6%

--United Spirits posts strong Q2, stock closes 6% higher; UBL up 2% 

--Zee Entertainment, Vedanta, Nalco, JSPL, Bandhan Bank top midcap losers

--Godrej Consumer, Union Bank, Canara Bank, Mphasis, L&T Tech top midcap gainers

--Market breadth favours bulls; advance-decline ratio at 5:4

Market At Close | Asian Paints, UPL, Divi's, SBI Life top gainers; Axis Bank, Bajaj Finance, ONGC, Tata Motors top laggards

Closing Bell | Sensex falls 207 points to 61,143, Nifty at 18,211

The Sensex index ended 206.9 points or 0.3 percent lower at 61,143.3 and the broader Nifty50 benchmark shed 57.5 points or 0.3 percent to settle at 18,211. Losses in financial, oil & gas and metal shares pulled the market lower, though gains in IT and consumer goods shares limited the downside. 

Disappointing Q2 earnings pulled shares of Apollo Tricoat Tubes nearly 4% lower

Indian Overseas Bank gains 2% after lender reports robust Q2 earnings, improvement in asset quality

The lender posted its highest quarterly net profit in 25 quarters.

Market Watch | Buy Heritage Foods and Astra Microwave Products, says Kyal of Waves Strategy Advisors

Here are two trading calls from Ashish Kyal of Waves Strategy Advisors:

--Buy Heritage Foods for a target of Rs 580 with a stop loss at Rs 523

--Buy Astra Microwave Products for a target of Rs 237 with a stop loss at Rs 214

Cautious on Indian equity market, correction to be healthy for big bull run: Goldilocks Premium Research

Financial advisory firm Goldilocks Premium Research has turned cautious on the Indian market, Founder and Chief Strategist Gautam Shah told CNBC-TV18. He also said that a correction will be healthy for the market in the context of a longer or bigger bull run.

Goldilocks has turned a little cautious as the market does not appear to have the strength to take out lifetime highs anytime soon. The recent correction in the Nifty50 index from the 18,600 level "does not look like a plain vanilla variety for the first time in 12 months", he said.

However, Shah believes the medium-term trend in the market remains positive. (Tap to read further)

Greenpanel Industries shares rise over 2%

Maruti Suzuki  Q2 profit falls short of Street expectations

Maruti Suzuki India shares up 1.3%

Godawari Power | CRISIL Upgrades Long Term Rating To 'A+' From 'A'; Outlook Stable

CRISIL Ratings has upgraded its rating on the long-term bank facilities of Godawari Power and Ispat Ltd (GPIL) to 'CRISIL A+/Stable’ from ‘CRISIL A/Stable’, and has reaffirmed its ‘CRISIL A1’ rating on the short-term bank facilities. Simultaneously, it has withdrawn its rating on the bank loan facilities aggregating Rs 177.1 crore based on no due certificate, receipt of confirmation from bank and at the client’s request. The withdrawal is in line with the CRISIL Ratings policy on withdrawal of ratings.

ITC volatile in trade

NewsRise reports quoting sources that a government panel is suggesting ways to raise tax on tobacco to 80 percent of the retail price in coming years.

IIFL Finance reports Q2 earnings

Net profit is up 37.1 percent at Rs 291.5 crore vs Rs 212.6 crore YoY while revenue was up 13.8 percent at Rs 1,667.6 crore Vs Rs 1,465.7 crore YoY.

Heineken N.V. reports on 2021 third-quarter trading

In India, beer volume grew by close to 50% in this quarter, following a progressive recovery and gradual lifting of restrictions. HEINEKEN consolidated United Breweries (UBL) as of 29 July 2021 and reported it as a consolidation change.

NCLT agrees to hear Yes Bank's plea vs Dish TV to hold AGM: reports 

NCLT adjourns the Yes Bank-Dish TV case until November 23. Dish TV to file reply by November 15.

Will only invest in businesses that can add $10bn to market cap: Zomato CEO Deepinder Goyal

Deepinder Goyal, CEO and co-founder of Zomato, has said that the online food delivery company will invest only in those businesses that can add $10 billion to the shareholder value. "We don't want to build businesses that can add just $1 billion to shareholder value anymore. We need to be prudent with our team's time and the money in our bank. We will only invest in businesses that we see adding more than $10 billion to our market cap going forward," said Goyal.

Tech to grind higher but bulk of returns now behind: Avendus Wealth Management's Suveer Chainani

Suveer Chainani, Executive Director-Client Relations at Avendus Wealth Management, believes the technology space will grind higher because the thesis is very much intact, but the bulk of returns are now behind. "Tech is anti-fragile. On one side, their cost structures were really getting mutated i.e. work from home, the supply of talent, which is the raw material suddenly becoming accessible from anywhere, and the demand for transformation. So revenues were up and cost structures down, but the bulk of returns are behind and one can argue that was the case for the entire market. However, these stories will play out some more," he said.

"I've also argued in the past that real estate is another one that is definitely a longer term cycle. Tech will grind higher because the thesis is very much intact, but the bulk of the returns are behind," he maintained.  

Here's how the Nifty IT pack fared: 

Market Watch: Suveer Chainani, Executive Dir-Client Relations, Avendus Wealth Management
 

EV disruption for auto space

The legacy guys are not sleeping at the wheel, they are doing things but they have a legacy pipeline, legacy capex, legacy infrastructure and how that is going to transcend to the new power trains etc., has to be seen.

There was a report on the scenario of the electric vehicle in India and clearly what we are seeing now is that the individual state policies are subsidising to promote behaviour which is the shift towards cleaner energy. Our analysis is that the total cost of ownership now is materially less than the ICE engines that are available today. So it's going to be very interesting for autos and not only in the four but also the two-wheeler space.

IT space

Tech is anti-fragile, on one side their cost structures were really getting mutated i.e. work from home, the supply of talent, which is the raw material suddenly became accessible from anywhere and the demand for transformation. So revenues were up cost structures down but the bulk of returns are behind and one can argue that was the case for the entire market. However, these stories will play out some more. Like I've also argued in the past real estate is another one that is definitely a longer-term cycle. Tech will grind higher because the thesis is very much intact, but the bulk of the returns are behind.

Maruti Suzuki shares flat ahead of Q2 earnings

Maruti Suzuki shares traded flat at Rs 7297.1 apiece on BSE ahead of the carmaker's Q2 earnings. The auto major is scheduled to post its quarterly numbers later in the day. 

Analysts in a CNBC-TV18 poll expect Maruti Suzuki's revenue to grow three percent in the quarter ended September on account of lower volumes. The company's profit after tax (PAT) is expected to be down about 44 percent. (Read more on what to expect from Maruti Suzuki Q2 results)

Birlasoft taking steps to address attrition, confident of delivering 15% margin

Dharmender Kapoor, Managing Director and CEO of Birlasoft, said in an interview to CNBC-TV18 that the company is addressing attrition in multiple ways so that the cost of resources does not rise. "Most of the impact that is coming in is because of the wage hike and some part of it I can blame on the attrition that is there in the industry. When we have good momentum in the industry, attrition is bound to go higher," he said. 

The IT company on Tuesday reported a 49.2 percent rise in consolidated net profit to Rs 103.1 crore for quarter ended September. Revenue from operations grew 18 percent to Rs 1,011.7 crore. (Read more on the Birlasoft management's commentary)

Bajaj Finance drops after Q2 profit misses Street expectations; should you buy, sell or hold shares now?

Bajaj Finance shares traded 4.3 percent lower at Rs 7511.3 apiece on BSE. The headline Sensex index was up 0.2 percent at the time amid choppy trade. 

The NBFC reported a 53.5 percent year-on-year rise in net profit to Rs 1,481 crore for the quarter ended September 30. Its net interest income increased four percent to Rs 5,335 crore.

Analysts in a CNBC-TV18 poll had estimated Bajaj Finance's profit at Rs 1,495.2 crore in Q2 and NII at Rs 4,165 crore. (Read more on Bajaj Finance earnings)

IndusInd Bank shares fall 2% ahead of Q2 results

IndusInd Bank shares traded near their intraday low in afternoon deals. The stock was down 2.2 percent at Rs 1,129.2 apiece on BSE.

Analysts in a CNBC-TV18 poll expect IndusInd Bank to report growth of 12.5 percent in net interest income on a year-on-year basis in Q2. They predict a year-on-year rise of 57.2 percent in profit after tax (PAT).

The bank will post its quarterly numbers later in the day. (What to expect in IndusInd Bank Q2 numbers)