Ajit Mishra, VP - Research, Religare Broking:
Markets traded volatility in a range amidst mixed cues and finally ended almost unchanged. Initially, the reaction on two of the index heavyweights results, Reliance and ICICI Bank, led to volatile swings in the market. Reliance Industries witnessed sharp profit taking and slipped nearly 9% however strong results from ICICI Bank led to healthy buying interest in overall banking stocks. Meanwhile, indications were mixed from the global front. Amid all, the Nifty index managed to end on a flat note at 11,669 levels. The broader market performance was mixed as midcap index ended higher whereas smallcap index ended lower by 0.8%. On the sector front, a mixed trend was witnessed as banking, telecom and realty were the top gainers whereas oil & gas, IT and auto ended lower.
The buoyancy in the banking space saved the day for bulls however it was not an easy for the traders. Global cues viz. upcoming US elections and updates on second wave of infections in the US and Europe will remain on participants’ radar. Besides, earnings and macroeconomic data on domestic front would be actively tracked. We suggest focusing more on position management and limiting leveraged trades in such a market scenario as volatility is here to stay.
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research:
While the Indian economy has been on a gradual recovery path since Q1FY21, IHS Markit Manufacturing PMI for October 2020 provides some hope that the speed of such recovery is set to accelerate over the current quarter. The PMI moved up to 58.9 as against 56.8 in September and is reportedly the highest reading in over a decade.
With the steady unlocking of the economic activities and importantly, the consistent decline in the fresh Covid cases and the fatalities thereof, the supply constraints appear to be easing out and also providing confidence to the manufacturers to build fresh inventories. This has the potential to deliver a positive growth in IIP and possibly stop the contraction in GDP from Q3 itself. The key to the sustainability of such improved demand sentiment would be however, the retail sales momentum during the current festive season.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:
One more indecisive day for the Nifty 50, however, Bank Nifty did a great job. The Bank Nifty closed 4 percent higher while Nifty 50 closed at an unchanged level. Nifty was down mainly due to steep weakness in Reliance Industries. At one point of time, Reliance was down by more than 10 percent and it's the biggest drop on intraday basis after 15th July 2020.
Financials did a strong comeback and managed to recoup the losses on Indices due to a substantial fall in Reliance Industries. As we discussed, Nifty remained between the range of 11530 and 11750. It has formed an indecisive candlestick formation on a daily chart. Be stock specific for the time being. The focus should be on financials as technically, the Bank Nifty is ready to hit the level of 25500 shortly.
Vinod Nair, Head of Research at Geojit Financial Services:
The weak opening reflected the rough waters market the entered last week. However, some recovery was seen as investors showed interest in banking stocks as major players announced Q2 results, beating the street estimates with positive outlook. Additionally, the banking stocks are attempting to price, in expectation of the positive SC verdict on moratorium. The Indian market is expected to be volatile, amidst mixed global sentiments due to increasing covid cases, US election and delayed stimulus.
Abhishek Chinchalkar, CMT Charterholder and Head of Education, FYERS:
Bank Nifty has been outperforming Nifty since the start of last month. Today's surge in Bank Nifty has lifted the Bank Nifty to Nifty ratio to a 6-month high of 2.15, a level that has been approached multiple times over the last six months. A sustainability above this strong hurdle could pave the way for further outperformance by banking stocks.
Looking forward, there are some crucial events lined up between today and the next few days, including the resumption of the Supreme Court hearing on bank moratorium, US Presidential election, and Bihar election. Given the magnitude of these events, volatility can be expected to pick up in the days ahead. Hence, it is prudent to be on the defensive over the next few days and trade with tight stop losses.
S Ranganathan, Head of Research at LKP Securities:
Ahead of the US elections, we witnessed a highly volatile trading session today with Reliance giving way. However indices managed to end in the green led by Financials which was indeed a treat to watch. Few high profile Realty names were the stars in the broader market today.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
11700-11750 should act as a stiff resistance for the Nifty. If we can get past that, there is a chance we resume the upward trajectory of the market and nullify the downside target of 11400. As long as we are below 11700, the markets are in bearish terrain. On the upside, if we get past 11750 on a closing basis, we cannot rule out the Nifty reclaiming the level of 12000 and above.
Market Close:
Benchmark indices broke the 3-day losing streak and ended higher with Nifty above 11650.
At close, the Sensex was up 143.51 points or 0.36% at 39,757.58, and the Nifty was up 26.80 points or 0.23% at 11,669.20. About 1080 shares have advanced, 1535 shares declined, and 148 shares are unchanged.
IndusInd Bank, ICICI Bank, Axis Bank, HDFC and Bharti Airtel were among major gainers on the Nifty, while losers included Reliance Industries, Divis Labs, Eicher Motors, HCL Tech and BPCL.
On the sectoral front, except bank and FMCG other indices ended in the red.
Abhishek Bansal, Founder Chairman, Abans Group:
Crude oil prices have declined nearly 14% in October 2020, from the previous month, due to increasing oil production in OPEC and Non-OPEC producers. Loss of demand due to the coronavirus pandemic has also affected the prices.
The Covid pandemic in the US and Europe is likely to keep people movement limited, and curb demand for auto and aviation fuel.Ramped-up crude output in Libya is also the key reason behind the negative sentiment in crude oil. Libya's crude production has risen to 690,000 bpd, from less than 100,000 bpd, in early September.
WTI crude oil prices are likely to find stiff resistance near $38.7-$41.47 per barrel, while key support levels are found near $33.87 and $31.95 per barrel.
Viram Shah, Co-Founder and CEO, Vested Finance:
The world’s oldest democracy goes into election mode this week, an election that has two candidates with vastly differing agendas pitted against each other. As far as the US markets are concerned, they are likely to continue their volatility until election results are out of the way. A Biden victory could bode well for sectors such as renewable energy, cannabis and education whereas a Trump victory will help sectors such as oil, defense and infrastructure perform well.
Irrespective, one should not change their asset allocation to the US markets based on the election – it’s a short-term impact. As far as the impact on Indian markets is concerned, irrespective of whether Trump or Biden win, India stands to benefit from improved relations with the US as both countries attempt to neutralize the rising power of China.
ICICIdirect of Swaraj Engines:
We expect FY20-23E sales, PAT CAGR at 8.2%, 9.0%, respectively. Company provides an auxiliary play on domestic tractor industry (rural economy) as well as M&M. Its strong balacesheet, ~70%+ dividend payout & healthy capital efficiency merit continued premium valuations, in our view. We value company at Rs 1,710 i.e. 24x P/E on FY22E & FY23E average EPS (| 71.2) & retain buy.
Escorts Q2
Company's Q2 net profit was at Rs 227.2 crore versus Rs 101.5 crore and revenue was up 24% at Rs 1,654 crore versus Rs 1,333.7 crore, reported CNBC-TV18.
Earnings before interest, tax, depreciation and amortization (EBITDA) was up at Rs 298 crore and margin was at 18% versus 9.3%.
European Markets trade higher:
J Kumar Infra bags order from MMRDA
J Kumar Infraprojects received Letter of Acceptance from MMRDA (Mumbai Metropolitan Region Development Authority) for Design and construction of Sewri-Worli elevated connector for Rs 1051,86,39,690.
BSE Realty index added 3 percent led by the Godrej Properties, DLF, Sobha:
HDFC Q2
Net profit at Rs 2,870.1 crore against CNBC-TV18 Poll of Rs 2,346.3 crore. Revenue came in at Rs 11,723 crore against Rs 13,487 crore (YoY). Individual loan approvals grew 9 percent. Net interest margin at 3.3 percent.
Rupee at close
Rupee ends at 74.43 per US dollar against October 30 close of 74.10 per US dollar. The local currency ends at lowest closing level since August 21.
Most active stocks on NSE in terms of volumes
Pfizer Q2:
Net profit was down 14.8 percent at Rs 131.4 crore against Rs 154.2 crore (YoY). Revenue was up 5 percent at Rs 595.4 crore against Rs 567.1 crore (YoY). EBITDA was up 23.8 percent at Rs 203.3 crore against Rs 164.2 crore (YoY). EBITDA margin stood at 34.1 percent against 28.9 percent (YoY).
TCI Express Q2
Net Profit was down 10 percent at Rs 23.5 crore against Rs 26.1 crore (YoY). Revenue fell 20.8 percent at Rs 213 crore against Rs 269 crore (YoY). EBITDA was up 7.8 percent at Rs 32.6 crore against Rs 30.2 crore (YoY). EBIDA margin stood at 15.3 percent against 11.2 percent (YoY).
Bandhan Bank Q2:
Net profit went down 5.3 percent at Rs 920 crore against Rs 971.8 crore (YoY). Gross NPA at Rs 874 crore against Rs 1,007 crore (QoQ). Net NPA at Rs 262.5 crore against Rs 335.8 crore (QoQ). Net interest margin at 8 percent against 8.15 percent (QoQ). Provisions at Rs 394.5 crore against Rs 394.5 crore (QoQ) and against Rs 145.5 crore (YoY) .
Shilpa Medicare Q2
Consolidated net profit went down 10.6 percent at Rs 45.4 crore against Rs 50.8 crore (YoY). Consolidated revenue was down 4.1 percent at Rs 279 crore against Rs 291 crore (YoY). Consolidated EBITDA was down 0.5 percent at Rs 68.7 crore against Rs 69.1 crore (YoY). Consolidated EBITDA margin stood at 24.6 percent against 23.7 percent (YoY).
Wockhardt Q2
Consolidated net profit at Rs 3.55 crore against loss of Rs 82.2 crore (YoY). Consolidated revenue was up 4.6 percent at Rs 714 crore against Rs 683 crore (YoY). Consolidated EBITDA gained 29.6 percent at Rs 16.6 crore against Rs 12.8 crore (YoY). Consolidated EBITDA margin stood at 2.3 percent against 1.9 percent (YoY).
Heritage Foods could turn out to be a multibagger
: Brokerages are upbeat on dairy player Heritage Foods after its posted its September quarter earnings and believe the stock could turn out to be multibagger. Brokerage firm Elara Securities said the fall in the company's revenue in Q2 was on expected lines. Brokerage firm ICICI Securities, too, has a 'buy' call on the stock, raising the target price to Rs 400 from Rs 360...Read more
Amarjeet Maurya - AVP - Midcaps, Angel Broking
: In the month of October 20, overall Mahindra & Mahindra tractor sales grew ~2 percent. Domestic sales in October 2020 were at 45,588 units, as against 44,646 units during October 2019. Exports for the month stood at 970 units (growth of 23 percent over last year). M&M continue to witness unprecedented retail demand which is likely to be higher than wholesale numbers on back of expectations of a higher Kharif output and good cash flow in the market. Auspicious festival days ahead, coupled with mechanization requirements for ongoing Kharif harvesting and impending Rabi sowing season augurs well for the industry.
Crude Updates
Oil prices fell more than 3% on Monday on worries that widening coronavirus lockdowns across Europe will weaken fuel demand, and as traders braced for turbulence during the U.S. presidential election week.
PNC Infratech Q2
The company's consolidated net profit was down 63.3% YoY at Rs 78.6 crore versus Rs 214.1 crore and revenue was down 6.9% at Rs 1,248.5 crore versus Rs 1,341 crore.
Gold Updates
Gold ticked higher on Monday as caution crept in ahead of Tuesday's hotly contested US presidential elections, sparking some bids for the safe-haven metal.
Nifty Pharma Index shed nearly 1 percent dragged by the Divis Lab, Aurobindo Pharma, Cadila Healthcare:
Rupee Updates
Indian rupee is trading lower at 74.36 per dollar, amid volatility seen in the domestic equity market. It opened weak by 31 paise at 74.42 per dollar against Thursday's close of 74.11.
NMDC October sales data
Company's October 2020 Iron Ore production fell 2.4 percent at 2.43 mt against 2.49 mt in OCtober 2019. It October Iron Ore sales were down 3.4% at 2.52 mt versus 2.61 mt, YoY.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
The Nifty broke 11600 on Friday which made the short term trend bearish. The index could fall further and hit 11400 as a potential target. 11700-11750 is the range of the resistance and any upside can be expected only if we start trading above these levels.
Barclays:
India’s Manufacturing PMI (seasonally adjusted) rose to 58.9 in October, marking the first full quarter of monthly gains since the virus outbreak. October’s increase, though notable, surpassed the eight-year high hit in September (56.8) and reached its highest level since May 2010.
Solid expansion in manufacturing activity in October will add to the optimism that the India’s economic recovery is on track and is slowly becoming entrenched. Lack of adequate fiscal support will likely impede the pace of economic recovery, and we see GDP contracting by 6.0% y/y in FY2020-21, with modest downside risks
Tata Power completes sale of defense biz:
The Tata Power Company has completed the sale of its defense business on October 31, 2020 to Tata Advanced Systems, a wholly owned subsidiary of Tata Sons Pvt. Ltd. The sale was completed as per a Scheme of Arrangement, which was approved by National Company Law Tribunal at Mumbai and Hyderabad in December’19 & March’20 respectively.
ICICIdirect on IDFC First Bank:
The bank seems to be well on be on track to its long-term objectives of shifting loan mix in retail favour and higher retailisation of liability franchisee. With a prudent approach on the provisioning front, moving away from risky sectors and improving funding profile, ICICIdirect believe return ratios are set to improve meaningfully in the medium to long term with RoAs set to reach 1%. Thus, value the bank at ~1.1x FY22E ABV with a revised target price of Rs 36 from Rs 34 earlier. Maintain buy recommendation.
Steel Strips Wheels October sales data
Steel Strips Wheels (SSWL) has achieved gross turnover of Rs 214.64 crore in October 2020 versus Rs 125.79 crore in October 2019, recording a growth of 70 percent and achieved net turnover of Rs 175.29 crore in October 2020 versus Rs 104 crore in October 2019, a growth of 68.5 percent.
SSWL achieved October 2020 total wheel rim sales of 14.85 lakh versus 10.55 lakh in October 2019 representing a growth of 41% YoY.
Buzzing
Just Dial share price shed 4 percent after the company posted a 38 percent decline in consolidated net profit at Rs 47.34 crore for the September quarter. The company had registered a net profit of Rs 76.94 crore in the same quarter a year ago.
Nifty Energy Index shed 1 percent dragged by the Reliance Industries, BPCL, IOC:
Rupee Updates
Indian rupee erased some of the early losses but still trading lower at 74.29 per dollar,amid volatility seen in the domestic equity market.
It opened weak by 31 paise at 74.42 per dollar against Thursday's close of 74.11.
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research:
We continue to believe that higher demand expectations in the ongoing festive season, greater need to own personal vehicles and avoid public transportation along with higher rural incomes are driving growth in the domestic automotive sector at this point in time.
MSL’s (Maruti Suzuki) domestic volumes have grown by 19.8% YoY in Oct 2020 with 26.6% and 9.9% increase respectively in the compact car and the UV segment. The current strength in domestic PV demand is also reflected in the 13.2% volume growth reported by HMIL (Hyundai).
The 2W market also continues to witness a buoyancy with the largest player, Hero Motocorp registering a 35% despatch growth, reflecting higher demand expectations due to personal mobility and a strong rural recovery.
Market Updates
Benchmark indices erased losses and trading flat in the volatile session.
At 11:17 IST, the Sensex was up 3.83 points or 0.01% at 39617.90, and the Nifty was down 6.50 points or 0.06% at 11635.90. About 966 shares have advanced, 1191 shares declined, and 128 shares are unchanged.
FPIs turn net buyers in October
Foreign portfolio investors (FPIs) turned net buyers in October in Indian markets by putting in Rs 22,033 crore as participant sentiment was driven by resumption of economic activities and robust quarterly corporate results among others.
In September, FPIs were net sellers at Rs 3,419 crore. As per depositories data, overseas investors invested a net Rs 19,541 crore into equities and Rs 2,492 crore into debt during October 1-30.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
: In the midst of all volatile and uncertain behavior, we managed to defend key levels on a closing basis. We have been consistently mentioning the key support zone around 11,660 – 11,600 and on Friday, the same got breached due to volatility on an intraday basis. In this week, 11,600 – 11,500 has now become an important support zone; whereas on the higher side, if we have to regain any strength, the Nifty has to reclaim 11,760 – 11,800 levels convincingly. Above this, we may again see the market resuming its northward trajectory. But as we are stepping into an eventful week, all eyes would be on all these developments, which may probably dictate the near term direction.
There were few individual pockets witnessed decent profit taking but among all, banking still shows some strength and held onto its key levels. So, any recovery from here on in benchmark, the financial space plays a vital role in it. Apart from this, the midcap index continues to show some resilience and we witnessed some interesting moves towards the end when key indices were feeling a heat. With continuation to the previous week’s view, another couple of percent move in the Midcap index would lead to a strong breakout in this universe. Traders should stay light and keep a close tab on these developments.
Buzzing Stock
Mayur Uniquoters share price added nearly 6 percent as company board is going to consider the share buyback. A meeting of the board of directors of the company is scheduled on November 10 to consider and approve the un-audited standalone and consolidated financial results of the company for quarter and half year ended on September 30, 2020. Board will also consider the buyback of equity shares of the company and all other matters related thereto.
Buzzing Stock
IndusInd Bank share price jumped 5 percent intraday on November 2 after the bank declared its September quarter results. The private lender on October 30 said its Q2 FY21 consolidated net profit stood at Rs 663.1 crore, up from Rs 510.39 crore QoQ and down from Rs 1,400.96 crore YoY. Nomura has maintained a buy call on the stock with a target of Rs 725 per share. CLSA has also retained buy on the stock and has raised the target to Rs 710 from Rs 665 per share.
China manufacturing growth eases in October but remains strong
Factory activity in China dipped slightly in October, according to official data published Saturday, but remained in growth territory as the world's second-largest economy continued its recovery after being hammered by the coronavirus.
The closely watched Purchasing Managers' Index (PMI) is a key gauge of manufacturing activity in China, which has largely bounced back after plunging in February because of tough pandemic-control measures.
Rupee Opens
Indian rupee slipped in the early trade on November 2. It opened weak by 31 paise at 74.42 per dollar against Thursday's close of 74.11, amid selling seen in the domestic equity market.
Indian currency market was shut on October 30 on account of Id-E-Milad.
