V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
The economy is facing a serious challenge and the RBI has been leading from the front with quick responses through rate cuts, injecting liquidity through OMOs, LTROs and a variety of innovative tools to manage and ensure financial stability. In this hour of economic emergency the MPC has to be in place to formulate policy. This delay could have been avoided.
Vinod Nair, Head of Research at Geojit Financial Services:
Indian benchmark indices gained strength throughout the day, helped by gains in Banking and financial stocks. Global cues were also positive following positive industrial profits data from China, setting aside concerns about the increasing virus infections and related impact.
Indian markets were also banking on further stimulus and other measures by the government to boost the economy. Traders limit overnight positions and keep booking profits while investors follow an accumulation strategy.
S Ranganathan, Head of Research at LKP Securities:
Key Indices ended high as Bulls led the charge backed by Financials and well supported by Auto & Pharma. Expectations of a Stimulus coupled with Capital Support to state run banks fuelled the rally in late afternoon trade. The postponement of the SC verdict by a couple of days provided a breather to the Bulls as Large Caps led the charge.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
The markets kept the upward momentum on for the entire day. However, the level to watch out for is 11300-11350. We need to get past and close above that price zone. That would signal that an intermediate bottom has been made and we have entered into an uptrend. Until then, there is always a possibility of a U-turn from the current levels and the Nifty might attempt to go and test the 10750 level.
Market Close:
Benchmark indices ended higher for the second day in a row on September 28 on the back of buying seen across the sectors.
At close, the Sensex was up 592.97 points or 1.59% at 37981.63, and the Nifty was up 177.20 points or 1.60% at 11227.50. About 1888 shares have advanced, 763 shares declined, and 158 shares are unchanged.
IndusInd Bank, Bajaj Finance, Axis Bank, Tata Motors and Power Grid were among major gainers on the Nifty, while losers were Wipro, HUL, Nestle and Infosys.
All the sectoral indices ended in the green with bank, metal and auto indices rose 3 percent each. BSE Midcap and Smallcap indices rose over 2 percent each.
Jubilant Foodworks hits 52-week high
Jubilant Foodworks share price touched 52-week high of Rs 2,457.50, rising over 6 percent on September 28 as foreign research house Jefferies has initiated coverage on the stock with a buy rating and kept a target at Rs 2,650 per share.
According to research house, the COVID-19 crisis will have a lasting impact on food services market, however the increased customer focus on hygiene & quality augurs well for the company.
The initiatives are underway to drive growth, gain share and optimise cost and this should reflect in a 25%+ EPS CAGR over FY20-23.The company is a strong recovery play, it added.
ICICIdirect on Mazagon Dock Shipbuilders:
Mazagon Dock Shipbuilders being the only shipbuilder to have built destroyers and conventional submarines could have an edge in future orders. Considering the strong order book, superior infrastructure facilities, debt free status, one can expect better growth outlook for the company in the long run.
At the higher end of the price band of Rs 145, the stock is available at a P/E of ~6.1x (on post issue basis). We recommend subscribe on the issue with a view of listing gains.
Lupin launches Fosaprepitant for injection
Lupin announced the launch of Fosaprepitant for Injection, 150 mg Single-Dose Vial, having received an approval from the United States Food and Drug Administration (U.S. FDA) earlier.
Nifty Realty Index added nearly 2 percent led by the Godrej Properties, Prestige Estate, DLF:
Angel Broking on UTI-AMC IPO:
At the upper end of the IPO price band, it is offered at 25.4x its FY20 earnings and 5.25% of Q1FY21 QAAUM, demanding `7,024cr market cap, which we believe is reasonable; listed peers like HDFC AMC trades at 35x FY20 earnings and Nippon AMC trades at 37x FY20 earnings. Additionally, HDFC and Nippon AMC trade at 12.56% and 8.55% of Q1FY21 QAAUM, respectively.
Considering attractive valuation, huge growth potential of MF industry, asset-light business and higher dividend payout ratio, we are positive on this IPO and rate it as subscribe.
Rupee ends lower
In the volatile session, Indian rupee ended lower by 17 paise at 73.78 per dollar, amid buying seen in the domestic equity market.
It opened lower at 73.67 per dollar against Friday's close of 73.61 and traded in the range of 73.53-73.85.
European Markets trade higher:
Buzzing Stock
Gateway Distriparks share price jumped 5 percent after the company board approved merger of Gateway East India with the company. The company also approved the payment of interim dividend of Rs 2 per equity share of face value Rs 10 each, for the financial year 2020-21 to the shareholders.
RBI postpones MPC meet:
RBI postpones MPC meeting scheduled this week. Dates of the MPC's meeting will be announced shortly, says RBI. RBI had scheduled monetary policy committee meeting from September 29 to October 1 .
Buzzing Stock
Multiplex stocks rallied after West Bengal Chief Minister Mamata Banerjee said that cinema halls and open-air theatres will be allowed to operate in the state from October 1. "To return to normalcy, Jatras, Plays, OATs, Cinemas & all musical, dance, recital & magic shows shall be allowed to function with 50 participants or less from October 1, subject to adherence to physical distancing norms, wearing of masks and compliance to precautionary protocols," the chief minister said on Twitter.
Vaqarjaved Khan - Research Analyst, Angel Broking
: In the week gone by Indian rupee depreciated by 0.06 percent and currently stands at 73.7 against the US dollar. India’s Finance ministry is expecting a nominal GDP growth of 19 percent in FY22 against a double digit contraction in FY21. The double digit expansion can be credited to a lower base in FY21. On the other hand, US Fed vice chairman Richard Claridanoted that the central bank will not be considering raising interest rates from near zero until inflation has hit the 2 percent target.
With easing monetary policy from US Fed here to stay, USD-INR is likely to move lower towards 72.5 in the coming week.
Buzzing
Gulf Oil Lubricants share price gained over 6 percent on September 28 after the company announced a strategic lubricants partnership with S-Oil Corporation of South Korea.
Gulf Oil Lubricants India has announced a long-term strategic partnership with S-Oil Corporation, South Korea to exclusively manufacture and market their entire range of lubricants under the brand - ‘S-Oil Seven’ for the Indian market, the company said in an exchange filing.
Nifty PSU Bank gained 3 percent led by the Canara Bank, Bank of India, Indian Bank:
Crude Updates
Oil prices dipped on Monday as rising coronavirus cases upset hopes for a smooth recovery in fuel demand, with the main crude benchmarks on track for their first monthly falls in multiple months after last week's slips.
Rupee trades flat
In the volatile trading, Indian rupeeistradingflatat 73.62per dollar, amid buying seen in the domestic equity market.
It opened lower at 73.67 per dollar against Friday's close of 73.61.
Lupin launches Atorvastatin calcium tablets
The company launched Atorvastatin Calcium Tablets USP, 10 mg, 20 mg, 40 mg, and 80 mg, having received an approval from the United States Food and Drug Administration (USFDA) earlier. The product will be manufactured at Lupin’s Nagpur facility in India.
Principal Asset Management launches Principal Large Cap Fund:
Principal Asset Management has launched a new fund offer (NFO) Principal Large Cap Fund, an Open-ended Equity scheme predominantly investing in Large Cap stocks.
The NFO will open for subscription from 28th September 2020 to 12th October 2020. The fund will allocate 80-85% of its corpus to the top 100 Indian Large Cap stocks by market cap and actively invest up to 15% in US stocks with a market cap higher than USD 50 Billion. The large cap fund will aim to provide growth from Indian and US economies and depreciating currencies.
Nifty metal index rose 3 percent supported by the Jindal Steel, Welspun Corp and SAIL:
SBI announces celebratory delights for retail customers:
State Bank of India (SBI) presents a slew of special offers for its retail customers. Bank has announced a 100% waiver in the processing fee for all customers applying for Car, Gold, and Personal loan through YONO. The bank is offering the lowest interest rate starting from 7.5% to customers opting for the car loan. They will also get 100% on-road finance on select models.
SBI has announced special festive offers on home loans for home buyers. There would be a complete waiver on processing fees on home loans for homebuyers in approved projects.
Gold loan customers now have flexible repayment options for up to 36 months at the lowest interest of 7.5%.
Gold Updates
Gold prices edged up on Monday as the dollar slipped off a two-month peak hit last week as political uncertainty accelerated ahead of the first presidential election debate between U.S. President Donald Trump and his Democratic rival Joe Biden.
Finance Ministry may provide capital support to some PSBs in third quarter: PTI
The Finance Ministry is likely to provide capital support from the Rs 20,000 crore fund approved by Parliament in recently concluded session to some Public Sector Banks (PSBs) in the third quarter itself, reported Mint.
Parliament approved Rs 20,000 crore for PSB capital infusion as part of the first batch of Supplementary Demands for Grants for 2020-21 which sought additional spending of a record ₹2.35 lakh crore primarily to meet expenses for combating the COVID-19 pandemic.
The fund infusion would be for meeting regulatory capital requirements if the need arises in October-December quarter, sources said.
Market Updates
Benchmark indices extended the early gains and trading at day's high level with Nifty at 11,200.
At 11:39 IST, the Sensex was up 507.68 points or 1.36% at 37896.34, and the Nifty was up 150.60 points or 1.36% at 11200.90. About 1687 shares have advanced, 553 shares declined, and 107 shares are unchanged.
Care Ratings:
The lockdown has meant that all economic projections have gone awry. More so the fiscal balances which have been affected by multiple factors: fall in revenue, change in expenditure priorities, lower base of GDP etc. All this has meant that the centre and states will have a challenge managing their fiscal targets.
The centre has already announced a higher borrowing programme while states have been allowed to increase their deficits by 0.5% of GSDP without any conditions. Some have gotten permission to increase their deficit based on reforms conditions being met. Against this background we have estimated the likely fiscal deficit for the government based n trends available so far and our expectations going ahead.
We have assumed that there is no new fiscal stimulus that increases expenditure during the year. Based on various scenarios we believe the combined fiscal deficit could be in the region of 13-13.4% for the year. This is more than double of what was projected before covid struck India.
Elgi Equipments allots bonus share
The Compensation Committee of the board of directors approved the grant of 1,53,800 bonus stock options under the Elgi Equipments Stock Option Plan, 2019 to the existing option holders.
It has allotted 15,84,54,508 bonus equity shares in the proportion of one equity share of Re 1 each for every one equity share of Re 1 each to the members eligible to receive bonus equity shares of the company.
Rupee trades higher
Indian rupee erased early losses and trading higher at 73.57 per dollar, amid buying seen in the domestic equity market.
It opened lower at 73.67 per dollar against Friday's close of 73.61.
All stocks on BSE Power Index trades in the green:
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking:
The dollar is trading lower on lack of big moves ahead of the US presidential debate on Tuesday and the release of US economic data later in the week. Political uncertainty also pressurize the dollar which supports the demand of Gold as a safe heaven investment.
Traders can buy in gold at Rs 49,300 levels with stop loss of Rs 48,900 for target of 50,200 levels. Buy silver at Rs 58,200 levels, with the stop loss of Rs 57,400 and for the target of Rs 60,000 levels.
India's forex reserves up to record $545.038 bn
The country's foreign exchange reserves increased by $3.378 billion to touch a lifetime high of $545.038 billion in the week ended September 18, RBI data showed. In the previous week ended September 11, the reserves had declined by $353 million to $541.660 billion.
During the reporting week, the forex kitty rose mainly due to an increase in foreign currency assets (FCA), a major component of the overall reserves. FCAs swelled by $3.943 billion to $501.464 billion in the reporting week, the central bank data showed.
Buzzing Stock
L&T Finance Holdings share price jumped 5 percent after HSBC retained buy on the stock. The global research firm has maintained buy rating with target at Rs 76 per share. It is of the view that rural portfolio leading recovery in demand and collections adding that other segments are also witnessing gradual recovery.
Hareesh V, Geojit Financial Services' head of Commodity Research:
A rally in the US dollar and optimism over Covid vaccine is weighing on the safe haven demand of gold and thus the price of the commodity. However, rising US- China tensions and hopes of fresh economic stimulus measures continue to offer lower level support. At the same time, uncertainty prevails in the metal ahead of the first presidential election debate in the US this week.
Technical Outlook (London spot): Weak sentiments continue to take prices lower towards the support of $1840 and likely is to trigger a rebound. An unexpected drop below $1820 would extend further selling pressure later.
L&T Technology gets order
L&T Technology Services (LTTS) has been selected to provide engineering services for Tenneco’s DRiV original equipment (OE) Ride Control business group
LTTS will set-up a HUB Development Center to provide DRiV with additional engineering capacity in conventional damper and component development.
Rupee Opens
Indian rupee opened lower at 73.67 per dollar on Monday against Friday's close of 73.61, amid buying seen in the domestic equity market.
On September 25 rupee ended near the day's high at 73.61 per dollar against Thursday's close of 73.90.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments:
The resistance level for the Nifty is at the 11300-11350 zone. Until those levels are crossed on a closing basis, the index continues to remain bearish. The risk-reward at this point in time is favourable as traders could strategize short positions for a target of 10750 and a stop loss around the 11350 levels.
Jet Airways lenders to meet today
The Committee of Creditors of Jet Airways will meet on September 28, in what everyone hopes will be the lenders' final gathering to select the next owner of the airline that was grounded in April 2019.
The anticipation has been building up since the past fortnight when it came to light that the resolution professional overseeing the insolvency process has asked the two suitors to make final revisions in their proposals.
The airline had received bids from two suitors, both consortiums, on July 21. The first consortium was of Flight Simulation Technique Centre Pvt Ltd, Big Charter Pvt Ltd, and Imperial Capital Investments LLC. Both FSTC and Big Charter are led by aviator-turned-entrepreneur Sanjay Mandavia. Imperial Capital is an investment banking and wealth management company based in Dubai.
Nifty Auto Index added over 1 percent led by the Bosch, Tata Motors, Ashok Leyland:
Prabhudas Lilladher on UTI AMC:
UTI AMC, the eighth largest AMC in India, is a dominant player in beyond T30 cities (B30) market. The growth for the company in last four years was largely driven by passive funds as it bagged chunky public investments in ETFs, pension and retirement funds.
The company witnessed steady healthy 15% QAAUM CAGR over the same period led by strong distribution franchise, sticky client base, strengths in managing retirement (2nd highest) and PMS funds. However, lower yields on passive/alternate funds, higher cost structures and current pandemic led headwinds would cap near term return profile.
Valuations at 26x/21x FY20/FY21E P/E based on upper price band of Rs 554 although lower than peers (35-36x HDFC/NAM INDIA AMC) stand justified given business concentration risks weighing upon financials (3.5% QAAUM CAGR vs 14% industry CAGR, revenue at -3% CAGR and RoE decline of 958bps over FY17-FY20). Hence, we suggest subscribe for listing gains and closely monitor journey towards high profit margin business.
Gainers and Losers on the BSE Sensex:
Market Opens
: Indian indices opened higher on September 28 with Nifty above 11,100.
At 09:17 IST, the Sensex was up 185.58 points or 0.50% at 37574.24, and the Nifty was up 61.20 points or 0.55% at 11,111.50. About 916 shares have advanced, 202 shares declined, and 53 shares are unchanged.
ICICIdirect:
The dollar is currently being driven by risk aversion that made traders quit their dollar shorts as the outlook for the global economic recovery darkened with a second wave of Covid-19 cases in Europe
The dollar-rupee September contract on the NSE was at 73.72 in the last session. The open interest in the September series declined 18.82% while it increased 21.16% in the next series.
Market at pre-open
: Benchmark indices are trading higher in the pre-opening session.
At 09:01 hrs IST, the Sensex is up 495.64 points or 1.33% at 37884.30, and the Nifty up 196.60 points or 1.78% at 11246.90.
ICICIdirect
:
Indian markets are likely to see a gap up opening on the back of a rebound in global markets despite worries about the economic outlook and the Coronavirus situation. However, global news flows and sector specific development will be key monitorables.
Domestic markets ended sharply higher tracking reports of potential domestic stimulus measures and tracking positive global cues. US markets ended sharply higher led by a rebound in tech stocks post the recent weakness.
