Equity indices were trading near the day’s high in the afternoon session on November 6, mirroring a strong up-move in Asian markets as investors wagered on early rate cuts in the US and Europe.
Mixed corporate results also led to stock-specific action.
At 12.01pm, the 30-pack BSE Sensex was trading 355.77 points, or 0.55 percent, higher at 64,719.55, while the broader NSE Nifty climbed 109.75 points or 0.57 percent to 19,340.77.
A total of 2,441 stocks advanced, 1,015 declined and 203 counters remained unchanged on the BSE.
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Barring consumer durables, all sectors were trading in the green, led by realty, utilities, commodities, energy, industrials, oil and gas and capital goods.
The BSE mid-cap index darted up 0.54 percent, while the small-cap gauge climbed 0.91 percent.
Foreign institutional investors (FIIs) remained in the sell-off mode, though the quantum of selling reduced to a net Rs 12.43 crore as on November 3, while DIIs bought to the tune of Rs 402.69 crore.
Axis Bank was the top gainer in the Sensex pack, spurting over 2 percent, followed by L&T which jumped 1.5 percent after an arm of the infrastructure major said it would divest its entire stake in a subsidiary company.
L&T Infrastructure Development Projects Limited (L&T IDPL), a subsidiary of the company, entered into a share purchase agreement on November 3 for the sale of its entire shareholding in Interise Investment Managers Limited (formerly LTIDPL IndvIT Services Limited), a wholly owned subsidiary of L&T IDPL, L&T said in a press release.
The sale is expected to be completed on or before December 31, 2023, subject to the satisfaction of conditions precedent identified under the agreement. L&T Infrastructure Development Projects will receive Rs 103.86 crore from the sale.
NTPC rose nearly 1 percent after the company commissioned its first part-capacity of 50-MW Dayapar Wind Energy project in Bhuj, Gujarat.
On successful commissioning, the first part capacity of 50 MW out of 150 MW Dayapar Wind Energy Project Phase-I at Dayapar, Bhuj, Gujarat, under 450 MW Hybrid Project of NTPC REL, a stepdown subsidiary of NTPC Limited through its wholly owned subsidiary NTPC Green Energy Limited, is declared on commercial operation from November 4, the company said in its statement. With this, the installed and commercial capacity of NTPC has reached 73,874 MW.
In contrast, SBI dropped 0.69 percent to emerge as the top laggard among the Sensex constituents even after the bank's Q2 earnings beat the Street estimates with the net profit rising 8 percent on-year to Rs 14,330 crore, riding on lower loan loss provisions. However, it made higher provisioning towards wage revisions.
Analysts believe that the public sector bank has levers to achieve guided growth rates. For the quarter ended September 2023, SBI saw healthy growth in net interest income (NII) because of resilient net interest margin (NIM). Its NII rose 12 percent, while gross non-performing asset (NPA) fell 3.52 percent YoY.
However, the sharp increase in provisions for employee expenses resulted in a big miss on pre-provision operating profit. PPOP measures profit before provisions for loan losses and other non-operating items.
Analysts are positive on the SBI stock, given that its slippages declined after a seasonal bump in Q1, along with healthy recoveries, and write-offs. Its asset quality remained robust as the net NPA ratio improved further and the restructured book remained in control. Investec expects, NIMs to compress by 4-5 bps in the next quarter as liabilities get completely repriced.
Titan succumbed to profit booking after it reported a consolidated net profit of Rs 916 crore for the September quarter of FY24, registering an increase of 9.7 percent from Rs 835 crore in the same quarter of the previous financial year. Titan’s strong numbers in the July-September quarter beat Street estimates and the management’s healthy guidance for the upcoming quarters, tracking festival season trends, has analysts remain bullish on the counter.
“Titan’s Q2 jewellery results was strong on all fronts. The growth momentum for Titan is intact, thus we raise EPS estimates over FY24-26E to build in better in better growth and margins in the jewellery business,” Goldman Sachs said.
Beyond the frontline counters, shares of food delivery platform Zomato surged around 5 percent and hit a 52-week high of Rs 121.90 as the company's second straight quarter of profit in the July-September period impressed brokerages and prompted some to raise their price targets for the stock.
Zomato posted a net profit of Rs 36 crore, while revenue grew 71 percent on-year to Rs 2,848 crore. The company had posted a net loss of Rs 302 crore and revenue of Rs 1,661 crore a year ago. The growth comes at a time when the e-commerce sector battles inflation and muted demand.
Nuvama Institutional Equities, which raised its price target for the stock by over 27 percent to Rs 140, said Zomato’s revenue growth was much stronger than expected, as all businesses continued to grow at full throttle.
Strong subscription numbers and upbeat market momentum helped Cello World list at 28 percent premium to its issue price on November 6. The stock started trading at Rs 829 on the NSE and Rs 831 on the BSE, while its issue price was Rs 648.
Cello World’s public issue was subscribed 38.9 times. Qualified institutional buyers (QIB) bought 108.57 times the allotted quota, high net worth individuals (HNI) picked up 24.42 times and retail investors bid 3.06 times.
On the global front, Asian markets rose for the fourth session on the trot on hopes of earlier rate cuts in the United States and Europe. Bond markets also enjoyed a recovery as a benign US payrolls report and upbeat productivity numbers indicated that the labour market was cooling, which suggests the US Federal Reserve is not under pressure for further rate hikes.
Hopes for lower borrowing costs helped MSCI's broadest index of Asia-Pacific shares outside Japan gain 2 percent, having already rallied 2.8 percent last week.
Japan's Nikkei rallied 2.4 percent, while South Korea vaulted 4.3 percent as authorities re-imposed a ban on short-selling from mid-2024.
Chinese blue chips gained 1.3 percent ahead of data on trade and inflation due this week.
S&P 500 futures and Nasdaq futures were both flat. EUROSTOXX 50 futures were also largely unchanged, while FTSE futures inched up 0.1 percent.
US two-year Treasury yields were at 4.86 percent, after falling 17 basis points last week. Yields on 10-year notes stood at 4.586 percent, lower than October's peak of 5.021 percent.
"The ability of stock markets to climb walls of worries is manifesting clearly in these troubled times. Buy on dips strategy has worked well for investors with risk-appetite. The market construct now is favourable for the bulls despite the uncertainty surrounding the Israel-Hamas conflict,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
The sharp decline in the US 10-year bond yield from the October high of 5 percent to 4.58 percent now is the strongest tailwind for the market, he pointed out.
“The decline in the dollar index to 105.2, correction in Brent crude to $85 and gold declining to $1988 are indications of a risk-on in markets. The short strategy of FIIs haven’t worked and they are likely to turn buyers soon. Even though the Small cap index is showing resilience, valuation comfort and safety are in large caps. Financials and automobiles are on a strong wicket. For IT, momentum is in mid-caps," he added.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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