MSCI tweak lifts Sensex by 377 pts, Nifty ends near 11,900; Kotak Bank gains 12%13 min read . Updated: 27 Oct 2020, 03:39 PM IST
- Indian shares reversed course to end higher on Tuesday on hopes of higher inflows after MSCI said it will make changes to its global indexes following revisions in the country's foreign ownership limits
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Indian benchmark share indices reversed early losses to settle higher on Tuesday on hopes of higher inflows after MSCI said it will make changes to its global indexes following revisions in the country's foreign ownership limits.
Sensex settled at 40,522.10, up 376.60 or 0.94%, while Nifty closed 121.65 points or 1.03% higher at 11,889.40.
Kotak Mahindra Bank, closing over 11% higher, was the top Sensex gainer followed by Nestle India, Asian Paints, Bajaj Finance and NTPC. TCS, HDFC, ONGC and Infosys were among the laggards. Of 30 Sensex shares, 19 closed in the green.
Kotak Mahindra Bank shares continue to gain
Shares of Kotak Mahindra Bank further gained nearly 12% in early trade on Tuesday after the company reported a 22 per cent growth in consolidated net profit for the July-September quarter. The stock jumped 12% to ₹1584.75 on the BSE.
Asian Paints hits 52-week high
Crude oil futures rise on spot demand
Crude oil prices on Tuesday rose by ₹20 to ₹2,866 per barrel as participants widened their positions on firm spot demand.
On the Multi Commodity Exchange, crude oil for delivery in November traded higher by ₹20, or 0.7%, at ₹2,866 per barrel in 4,278 lots.
Analysts said raising of bets by participants kept crude oil prices higher in futures trade.
However, West Texas Intermediate crude oil fell by 0.44% to USD 38.73 per barrel, while Brent crude was trading lower by 0.52 per cent at USD 40.67 per barrel in New York.
Top gainers on Nifty Private Bank
Nifty Bank up 2.7%; Axis Bank, Kotak Mahindra top gainers
Embassy REIT raises ₹750 cr via NCDs
Embassy Office Parks REIT on Tuesday said it has raised ₹750 crore by issuing debentures on private placement basis and will use the funds for completing ongoing commercial projects and recent acquisition.
Embassy REIT is the country's first listed REIT (Real Estate Investment Trust) and the largest in Asia by area. It got listed in April last year after raising ₹4,750 crore through public issue.
Rupee settles 13 paise higher at 73.71 against US dollar.
Yes Securities puts 'buy' rating on Kotak Mahindra Bank with a target price of ₹1,670; sees 17.8% upside
"We raise FY21/22 earnings and ABV estimates by 10-12% and 2.5-3% respectively on the back of material upgrade in PPOP expectations (higher NII and lower cost growth now) and significant reduction in credit cost assumption. The latter being underpinned by low impeding and susceptible flow (small SC-order slippage pool and SMA-2 + robust customer asset mix with only 6% coming from unsecured products) and management commentary on current Covid buffer (62 bps of adv.) being adequate to address potential stress. We estimate the stand-alone bank to deliver 20-22% earnings CAGR on a 6-7% loan CAGR over FY20-22 because of expansion in core PPOP margin," the brokerage said.
"We see no deterioration in RoA for the current year despite higher provisions and expect profitability to improve to life-time high in FY22. KMB has underperformed in recent months and its valuation premium to HDFCB has dissipated. Expect valuation to re-rate from current 3x FY22 P/ABV is response to likely continuation of non-linear earnings growth. Upgrade rating to BUY and 12m PT to Rs1,670," it added.
Ceat Ltd jumps 10% on strong Q2 result
- September quarter consolidated net profit stood at ₹1.82 billion rupees versus ₹439.8 million year ago.
- Consolidated revenue from operations stood at ₹19.78 billion versus ₹16.92 billion rupees in Q2FY20.
Post Flipkart deal, ABFRL’s debt outlook improves; sales revival key ahead
The deal comes as a relief for ABFRL, which has been reeling under pressure from high leverage, a factor that has been key overhang for the stock. That, coupled with the covid-19 pandemic wreaking havoc on demand is an obnoxious combination. (Full report)
Geojit Financial Services puts 'buy' on Britannia Industries with a target price of ₹3,960
"Britannia’s revenue rose 11% YoY, led by higher sales of goods (~9% YoY), supported by higher demand from rural area. EBITDA grew 37.2% YoY, with EBITDA margin improving 380bps to 20.1%, owing to decline in raw material prices and lower advertisement and promotion expenses. Further, net profit surged 23.2% YoY to Rs. 499cr in Q2FY21. We remain positive on the stock on account of healthy volume growth, rising distribution network and new products launches. Separately, we believe there’ll be a smooth road ahead as lockdown has ended. Hence, we upgrade the rating to BUY on the stock, with a revised target price of Rs. 3,960 based on 46x FY22E adj EPS," the brokerage said.
PSU banks, IT stocks drag
Manappuram Finance up 1.5%
Manappuram Finance is considering various options for raising funds through borrowings including by the way of issuance of various debt securities in onshore / offshore securities market by public issue, on private placement basis or through issuing commercial papers.
Yes Securities puts 'buy' on SBI Life Insurance with a target price of ₹1,006 and 29% upside
"We remain positive on SBI Life with consistent performance on the protection business and revival in the ULIP business. It continues to focus on extracting more from its bancassurance and agency channels. Limited presence on the online platforms, however, is a dampener. The stock trades at FY22E P/EV of 2.1x, which we find attractive. We maintain our estimates and recommend BUY with a 1-year price target of Rs1,006," the brokerage said.
Indian stocks rally on MSCI move to revise foreign ownership limits
MSCI on Tuesday said it will implement changes in foreign ownership limits in the MSCI Global Indexes, which will contain Indian securities. It will implement the changes at the close of 30 November, effective 1 December.
Indian shares recouped earlier losses and were higher on Tuesday on hopes of higher inflows after MSCI's announcement to rejig indices. Analysts believe that the changes are expected to rope in billions of dollars in domestic stocks where the foreign ownership limit will increase. (Full report)
Equinor inks pact with TCS to accelerate its transformation into a digital energy company
Tata Consultancy Services (TCS) has been selected as a strategic partner by Equinor, the Norway-headquartered global energy company, to accelerate its digitalization journey and help realize its vision of becoming a digital energy company.
TCS will leverage its deep domain knowledge of the energy sector, expertise and scale in digital technologies and investments in research and innovation, to achieve data democratization across Equinor’s core operations and harness the power of machine learning and advanced analytics to help Equinor achieve its growth and transformation objectives.
Heidelberg Cement’s increased focus on realisations to offset lower volumes
Central India focused Heidelberg Cement Ltd saw its volumes decline by 2.3% year-on-year to 1.11 million tonnes (mt) in the September quarter.
The management said, in a bid to avoid bad debts in the current scenario, the company focused more on realisations and profitability. (Full report)
Kotak Bank, Asian Paints, Bajaj Finance lift Sensex by 200 points
Future Lifestyle Fashions down 2.4%
Care Ratings has revised downwards the credit rating on long-term bank facilities and non-convertible debentures to ‘BB credit watch with negative implication’s from ‘BBB credit watch with developing implications’. The revision of ratings primarily factors in weakening credit profile of the company on account of slower than envisaged ramp up of sales, unavailability of additional working capital limits, the ratings agency said.
MSCI to rejig FOL for Indian stocks
MSCI has welcomed the changes in the foreign investment limits for Indian securities announced by National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL).
MSCI will implement changes in Foreign Ownership Limits (FOL) in the MSCI Global Indexes containing Indian securities coinciding with the November 2020 Semi Annual Index Review (SAIR) at the close of November 30, 2020, effective December 1, 2020.
The FOL changes are resulting from the relaxation of the Foreign Portfolio Investor (FPI) limit of Indian companies to the sectoral limit.
Morgan Stanley Research expects MSCI India to see passive inflows of $2.5 billion on this. Kotak Mahindra Bank, PI Industries and IPCA Lab will enter the MSCI Global Index, it added.
GHCL down 1%
Chemicals and textiles manufacturer GHCL Ltd reported a 27.71% decline in consolidated net profit to ₹84.86 crore for the quarter ended September 2020. The company had posted a consolidated net profit of ₹116.84 crore in the July-September period a year ago, GHCL said in a regulatory filing.
Angel Broking up 16%
Angel Broking Ltd has fixed 3 November 2020 as the record date for the purpose of payment of interim dividend. The dividend shall be paid on and from 20 November 2020, it said in a BSE filing.
Aurobindo Pharma up 1%
Aurobindo Pharma has inked a pact to divest Natrol, a wholly-owned unit of its US-based subsidiary, to private equity firm New Mountain Capital for USD 550 million (around ₹4,048 crore).
Aurobindo Pharma had acquired Natrol in December 2014.
The drug firm has reached a definitive agreement to sell Natrol, a unit of Aurobindo Pharma USA, Inc, to an affiliate of New Mountain Capital to combine with Jarrow Formulas, Aurobindo Pharma said in a statement.
Cadila Healthcare up 1%
Cadila Healthcare Ltd., one of two Indian drugmakers racing to develop an indigenous Covid-19 vaccine, is in talks with potential partners to ramp up production capacity if its candidate passes human clinical trials.
The Ahmedabad-based firm is looking to hire contract manufacturers for an additional 50 million to 70 million doses of its plasmid DNA vaccine, on top of the 100 million that will come from its own capacity, according to Managing Director Sharvil Patel. He declined to name the companies and the amount Cadila has invested in developing the vaccine. (Full report)
SBI Life delivers on growth metrics but profitability underwhelms
When it comes to growth, India’s largest private sector life insurer hasn’t disappointed. Notwithstanding size, SBI Life Insurance Co. Ltd reported a new business premium growth of 27% for the September quarter.
That the growth comes despite a raging pandemic continuing to limit social mobility and client interaction should earn SBI Life brownie points from investors. (Full report)
Torrent Pharmaceuticals down 1.4%
Drug firm Torrent Pharmaceuticals reported a 27.04% rise in consolidated net profit to ₹310 crore for the quarter ended September, mainly on account of robust sales in India and reduction in expenses. The company had posted a net profit of ₹244 crore for the corresponding period of the previous fiscal, Torrent Pharmaceuticals said in a filing to BSE.
Rupee falls 10 paise to 73.94 against US dollar in early trade
The rupee slipped 10 paise to 73.94 against the US dollar in opening trade on Tuesday, tracking muted domestic equities.
At the interbank forex market, the domestic unit opened weak at 73.94 against the greenback, showing a fall of 10 paise over its previous close.
On Monday, the rupee had settled at 73.84 against the US currency.
RBI issues direction for ex-gratia payment of interest on interest to banks
Reserve Bank of India issued direction on Tuesday to all lending institutions to implement provisions of Scheme for grant of ex-gratia payment of difference between compound and simple interest for six months to borrowers in specified loan accounts (1 March to 31 Aug) and take necessary action within stipulated time. (Full report)
DHFL down 5%
Lenders to the debt-ridden mortgage financier Dewan Housing Finance Corp. Ltd (DHFL) have asked the four bidders to get back with a revised offer by 31 October as part of the on-going resolution process. DHFL had received bids from Adani Group, Piramal Enterprises, US-based Oaktree and Hong Kong-based SC Lowy to either pick stake in the company or buy out assets.
Mahindra Finance drops 2.6%
The company reported a 34% jump in consolidated net profit at ₹353 crore for the second quarter ended September of this fiscal. Mahindra and Mahindra Financial Services (Mahindra Finance) had posted a net profit of ₹264 crore during the corresponding quarter a year ago.
Kotak Bank, Asian Paints, L&T top Sensex contributors
Kotak Bank up 9% on strong Q2 performance
Kotak Mahindra Bank on Monday reported 26.7% jump in its standalone net profit to ₹2,184.48 crore for the second quarter ended September 30.
The private sector lender had posted a net profit of ₹1,724.48 crore during the same quarter a year ago.
The bank's asset quality improved on a net basis, with the non-performing assets (NPAs) falling to 0.64% of the net advances as of September 30, 2020, from 0.85 per cent by September-end 2019.
In value terms, the net NPAs were down at ₹1,303.78 crore compared to ₹1,811.40 crore.
Banks, metals drag; FMCG stocks gain
HCL Technologies up 0.10%
HCL Technologies has completed the acquisition of Cisco's Self Optimizing Network ('SON') Technology effective 25 October, it said in a regulatory filing.
NTPC up 2.2%
State-owned power giant NTPC on Monday said its board will on November 2 consider a proposal to buy back the company's equity shares.
Last week, markets regulator Sebi granted exemption to NTPC from certain buyback norms for the proposed merger of its wholly-owned subsidiaries with the parent company.
In October, NTPC had filed an application with the Securities and Exchange Board of India (Sebi) to seek exemption from the strict enforcement of the buyback norms.
Indian benchmark share indices opened on a cautious note on Tuesday amid weak global cues. Sensex opened at 40,199.08, up 53.58 points or 0.13%, while Nifty opened 39.35 points or 0.33% higher at 11,807.10.
NTPC, rising nearly 4% was the top Sensex gainer followed by Kotak Bank, Nestle India and Ultratech Cement. Power Grid, HDFC, Infosys and Asian Paints were among the laggards. Of 30 Sensex shares, 19 opened in the green.
Indian stocks traded in the green in pre-opening session on Tuesday. At 9:05am, Sensex was at 40,207.86, up 62.36 points or 0.16%, while Nifty advanced 29.85 points or 0.25% at 11,797.60.
Stocks to Watch
Mahindra Finance, DHFL, Torrent Pharma, HCL Tech, SBI and GHCL are among the top ten stocks that may be in focus today. (Full report)
Market at close on Monday
Equity indices spiralled lower on Monday following heavy losses in Reliance Industries after Amazon won an interim arbitration award to stall the Mukesh Ambani-led firm's acquisition of Future Group's retail assets.
After tanking 737 points during the day, the 30-share BSE index recovered some lost ground to end 540 points or 1.33% lower at 40,145.50.
The broader NSE Nifty tumbled 162.60 points or 1.36% to 11,767.75.
Following the weak sentiment, the market capitalisation of the BSE-listed companies declined by ₹1.98 trillion to ₹158.60 trillion.
Asian stocks track US lower amid virus spread
Asian stocks followed their US counterparts lower Tuesday on concern rising coronavirus cases will hurt the global economy and as stimulus talks in Washington dragged on.
Japan's Topix index fell 0.4%.
Australia’s S&P/ASX 200 Index dropped 1.8%.
South Korea’s Kospi index was little changed.
Hang Seng Index fell 0.6%.
Shanghai Composite Index fell 0.3%.
Singapore's SGX Nifty advanced 0.5%.
Wall Street tumbles amid resurging covid-19 cases
US stocks posted their worst session in weeks on Monday, driven downwards by fading hopes for economic stimulus, mounting worries over the coronavirus and jitters around the November 3 elections.
The major indexes recovered from the low points of the day, but the Dow Jones Industrial Average still dropped 2.3% to end at 27,685.38, a loss of 650 points.
The broad-based S&P 500 fell 1.9% to close the session at 3,400.97, while the tech-rich Nasdaq Composite Index shed 1.6% to 11,358.94.