Sensex, Nifty end flat amid volatility; banks, financial stocks drag

Market closing

Indian benchmark equity indices ended flat in a volatile trade on Tuesday as banks and financial stocks offset the boost provided by IT companies.

After swinging between gain of as much as 0.7% and a loss of 0.3%, the benchmark Sensex settled at 37,973.22, down 8.41 points or 0.02%. Similarly Nifty closed 5.15 points or 0.05% lower at 11,222.40.

Ultratech Cement, closing 3% higher, was the top Sensex gainer followed by TCS, Titan, Tata Steel and HDFC Ltd. IndusInd Bank, ONGC, POwer Grid and Axis Bank were among the laggards. Of 30 Sensex shares 20 closed in the red.

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Oil edges lower near $40 with global market rally soothing

Oil edged lower toward $40 as a global market rally cooled and traders look to US inventory data for clues on demand recovery.

Futures slipped 0.7% in New York, after earlier trading near $40 a barrel. The end-of-quarter rebound in global stock markets stalled on Tuesday, while global confirmed deaths from the coronavirus -- which has eviscerated energy demand -- hit 1 million. US gasoline inventories are forecast to fall in government data Wednesday as traders assess the health of American consumption. (Full report)

Unlocking brings cheer for Shriram Transport investors, but some worries persist

Shares of Shriram Transport Finance Company Ltd have surged nearly 10% in the past three trading sessions. Behind this cheer is the company’s update on its business and guidance that it gave last week. (Full report)

Cement prices likely to fall by 3.7% q-o-q in Q2

Average trade prices of cement declined by ₹3 to 5 per bag across regions this month, prompting experts to conclude that they will mark a fall of 3.7% quarter-on-quarter during July to September.

The price gap between trade and non-trade cement remained wide in the north region at ₹65 to 90 per bag, said a report by Emkay Global Financial Services released on Tuesday. "The cement manufacturers are likely to hike the price in Q3 FY21 or after the festive season," it added. (Full report)

Silver futures up on spot demand

Silver prices on Tuesday rose by ₹330 to ₹60,726 per kg in futures trade as participants widened their bets on firm spot demand.

On the Multi Commodity Exchange, silver contracts for December gained ₹330, or 0.55%, to ₹60,726 per kg in 16,371 lots.

Analysts said the rise in silver prices was mostly due to fresh positions built up by participants on a positive domestic trend.

Silver was trading 0.62% up at USD 23.75 per ounce in New York.

Gold futures gain on spot demand

Gold prices on Tuesday rose by ₹187 to ₹50,320 per 10 gram in futures trade as speculators created fresh positions on firm spot demand.

On the Multi Commodity Exchange, gold contracts for October delivery traded higher by ₹187, or 0.37%, at ₹50,320 per 10 gram in a business turnover of 336 lots.

Fresh positions built up by participants led to the rise in gold prices, analysts said.

Gold prices traded 0.20% higher at USD 1,886.00 per ounce in New York. (PTI)

Angel Broking on Persistent Systems

“Persistent Systems is one of the leading service providers to independent service vendors (ISV). The company has a very strong presence in Hi tech, manufacturing and life science segments which were amongst the least impacted sectors due to Covid-19. Persistent systems is going to be one of the biggest beneficiaries of greater spend on IT due to accelerated adoption of digital technologies post the Covid-19 outbreak, given the company’s high exposure to BSSI, Hi tech and life science verticals. We raise our target multiple on the stock to 24x from 20x given greater visibility for the sector post HCL tech mid quarter guidance upgrade and strong performance of Accenture’s outsourcing division in the recently announced Q4FY2020 numbers. Therefore we raise our target price to ₹1,531 from ₹1,276," said Jyoti Roy- DVP- Equity Strategist, Angel Broking Ltd.

Cairn seeks $1.4 bn in losses from retro tax demand

British oil explorer Cairn Energy Plc on Tuesday said it is seeking from the Indian government USD 1.4 billion (about ₹10,300 crore) in losses arising from the expropriation of its investments to enforce a retrospective tax demand.

In its half-yearly earnings statement, the company said it expects an international arbitral tribunal to shortly give a decree on its challenge to the Indian government seeking ₹10,247 crore in retrospective taxes. (PTI report)

Yes Securities on Walmart-Tata Retail deal

"The high valuation being talked about for the deal makes us wonder about the need for Walmart to do a large equity infusion in Tata given it already has a strong platform in Flipkart and can achieve these objectives by entering into a normal business tie-up. But if this were to go through, it would indicate a more strategic intent from Walmart to partner with a trusted brand to drive its India business ambitions which might also include a merger of Flipkart with the Tata Platform in the long term. It might also be necessary for Walmart in case Amazon and Reliance Retail decide to join hands," said Himanshu Nayyar, lead analyst – Institutional equities, Yes Securities.

Ceat up 5%

The tyre maker plans to raise up to ₹500 crore via non-convertible debentures (NCDs). The board of directors of the company has approved the raising of funds up to ₹250 crore through issuance of secured, listed, rated, taxable and redeemable NCDs on private placement basis, in one or more tranches. Further, the board also authorized the finance and banking committee of the company to approve another fund raising of up to ₹250 crore.

Rupee closing

The Indian rupee settled at 73.85 against the US dollar versus Monday's close of 73.77.

BPCL's Mozambique block acquisition under scanner

The CBI will look into alleged irregularities in state-owned Bharat Petroleum Corp Ltd's (BPCL) investment in a gas block in Mozambique, the government's approval to the firm's further spending in the block has recorded, says a PTI report quoting sources.

The approval to Bharat PetroResources Ltd (BPRL), the oil and gas exploration and production subsidiary of BPCL, investing its share of the USD 24 billion cost of developing the gas fields in the Rovuma Area-1 Offshore Block came with a noting that the CBI will continue to look into alleged irregularities, the report added.

Nifty IT, Nifty Metal top sectoral gainers

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Walmart looks to join hands with Tata group in retail push

Walmart Inc. is in discussions with the Tata group for a large stake purchase in the proposed super app of the salt-to-software conglomerate, according to a Mint report. The ‘super app’ aims to create a digital services behemoth offering a wide range of products in the retail space. (Full report)

IndiGrid approves induction of KKR as a sponsor

The unitholders of India Grid Trust (IndiGrid) have approved the induction of Esoteric II Pte. Ltd., an affiliate of KKR & Co. Inc (“Esoteric II") as a sponsor (as defined under the InvIT Regulations) with special majority ( > 75% voting). The special resolution to induct Esoteric II as a sponsor was passed with a special majority in the 3rd Annual General Meeting of IndiGrid held on September 28th, 2020. All regulatory approvals including the Board’s assent are in place for Esoteric II ‘s induction as a co-sponsor. This move marks an extension of IndiGrid’s strategic relationship with KKR and underscores IndiGrid as a compelling investment opportunity for long-term investors.

Retail portion of Mazagon Dock Shipbuilders IPO oversubscribed 1.45 times

Retail segment of Mazagon Dock Shipbuilders initial public offering (IPO) was fully subscribed in first hour of its opening, testimony to the fact that retail investors risk appetite continues to stay intact despite markets volatility in last few days. At 12:50 pm, retail individual investors(RIIs) segment was oversubscribed 1.45 times as they bid for 1,53,81,608 shares against 1,05,88,725 shares reserved for the category, data from NSE showed.

Total subscription of the issue was at 0.51 times. Mazagon Dock Shipbuilders is government's first IPO of FY21. The government will sell 15.17% state to raise ₹444 core. With a price band of ₹135 – ₹145 a piece for the three-day share sale during 29 September to 1 October.

RBI extends enhanced borrowing limit for banks under MSF till 31 March

The Reserve Bank of India (RBI) has extended the enhanced borrowing facility provided to banks by six months to meet liquidity shortage till March 31, 2021.

On March 27, the central bank had increased the borrowing limit for scheduled banks under the marginal standing facility (MSF) scheme from 2% to 3% of their net demand and time liabilities. (Full report)

Exide, Amara Raja see strong acid battery demand, as Li-ion remains nascent

Battery-manufacturing stocks have been on low charge for the past few years on worries that lithium-ion batteries could slam the brakes on the growth of lead-acid batteries. But that may be overdone, at least in the near future. Lithium-ion batteries are still some way from picking up, say analysts, while demand for mobility continues to drive demand for passenger vehicles and two-wheelers. This is leading to a pick-up in demand for conventional batteries. Shares of Exide Industries Ltd and Amara Raja Batteries Ltd inched up in about 6% each in the past week. (Full report)

FIIs lap up debt as Centre prepares to borrow more

Foreign institutional investors (FIIs) have turned net buyers of government debt after six months of selling, anticipating that the central bank will try to soften long-term bond yields to support the government’s massive borrowing programme.

Net purchases of debt securities by FIIs this month stood at $543.2 million till 25 September, compared with net sales of $470.2 million in the previous month, data compiled by Bloomberg showed. (Full report)

SBI Card inks pact with American Express

SBI Card, India’s largest pure play credit card issuer, and American Express, the globally integrated payments company, have entered a strategic partnership to offer a powerful mix of global benefits and exclusive privileges for discerning consumers in India. With this partnership, SBI Card`s top end premium products – SBI Card ELITE and SBI Card PRIME will be available on American Express’ global network. Designed for the premium segment of credit card users in India, SBI Card ELITE and SBI Card PRIME on the American Express platform combine unmatched benefits from both partners to offer consumers an enhanced premium experience.

US election likely to be net positive for Indian equities

Three critical factors, such as the US trade and foreign policy, monetary policy and fiscal spending on infrastructure, may have an impact on markets and capital flows, based on the potential outcome of the election, according to analysts. (Full report)

Hindustan Zinc up nearly 2%

The board of directors of the company has approved allotment of 35,200 rated, listed, unsecured, redeemable, non-convertible debentures bearing a face value of ₹10 lakh each, aggregating to ₹3520 crores on private placement basis.

Most sectoral indices on NSE are in the red; Nifty PSU Bank top drag

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Angel Broking on Infosys

“Infosys is likely to be one of the biggest beneficiaries on account of increased spending on IT due to accelerated adoption of digital technologies post the covid-19 outbreak. The company had posted a better than expected set of numbers for Q1FY21 across all parameters while new deal wins remained strong at USD 1.74bn for the quarter. Infosys derived 44.5% of its revenue from digital services in Q1FY2021 which is amongst the highest for large cap IT companies. Going forward we expect growth to be driven by digital which we expect to increase to over 50% of revenues by FY2022 and more than offset any decline in legacy business for the company. Recent developments like the mid quarter guidance upgrade by HCL Tech and strong performance by Accenture’s outsourcing division in Q4FY2020 point to a strong demand outlook for the sector. We expect Infosys to post a 5.3%/16.7% revenue and PAT CAGR between FY2020-22 and maintain our positive outlook on the company," said Jyoti Roy- DVP- Equity Strategist, Angel Broking Ltd.

Reliance Chemotex re-appoints Sanjiv Shroff as MD

The shareholders at the AGM held on 28 September re-appointed Sanjiv Shroff as Managing Director of the Company for the period of 3 years w.e.f. September 01,2020.

BSE Telecom down 2.6%

The Cellular Operators of India (COAI) has urged the department of telecommunications (DoT) to allocate spectrum in the E and V bands, crucial for 5G services and used as backhaul for mobile broadband services, through auctions.

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Angel Broking on Lupin

“Lupin Limited 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. Fosaprepitant for Injection, 150 mg Single-Dose Vial, is the generic equivalent of Emend® for Injection, 150 mg Single-Dose Vial, of Merck Sharp & Dohme Corp. (Merck), indicated for adults in combination with other antiemetic agents for the prevention of Acute and delayed nausea and vomiting associated with initial and repeat courses of highly emetogenic cancer chemotherapy (HEC) including high-dose cisplatin and Delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic cancer chemotherapy (MEC). Fosaprepitant for Injection, 150 mg Single-Dose Vial, (RLD: Emend®) had annual sales of approximately USD 136 million in the U.S. This is a very positive development for the company. We continue with our Neutral outlook for Lupin limited," said Yash Gupta, Equity Research Associate, Angel Broking Ltd.

BPCL down 0.3%

Bharat Petroleum Corporation Ltd (BPCL) on Monday defended it paying $54 million on behalf of its bankrupt partner Videocon group in its Brazilian joint venture, saying it was to defend the asset and to follow the law of the land and that the move has increased its stake in the JV to over 54.5% now.

Central Bank of India drops 1.5%

The capital raising committee of the bank has approved allotment of 16.58 crore equity shares to eligible qualified institutional buyers at the issue price of ₹15.38 per equity share, aggregating to about ₹255 crore.

IIFL Finance shares trade flat

Moody's Investors Service on Monday downgraded IIFL Finance corporate family rating (CFR) by a notch to B2 from B1 on the company's asset quality concerns. Obligations rated B2 are considered speculative and are subject to high credit risk.

Shalby Ltd up over 9%

The board of directors of the company has passed an enabling resolution to reduce the promoters’ holding from the current 79.45% to 75% and to increase public shareholding to at least 25%.

Sensex pares opening gains, turns volatile in early trade

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Steel Strips Wheels up 2%

Steel Strips Wheels Ltd has confirmed export orders of nearly 9,000 wheels for EU trailer market, to be executed in the month of October & November from its Chennai plant, it said in a regulatory filing. Orders of similar capacity are anticipated from the same customer base as businesses have picked up speed, the company added.

Vedanta delisting

BSE Limited and National Stock Exchange of India Limited have issued their in-principle approval for the delisting offer to Vedanta Ltd.

Rupee opening

Rupee opens at 73.78 against the US dollar, unchanged versus Monday's close.

Jet Airways up 4.89%

The Committee of Creditors (CoC) of the insolvent airline Jet Airways (India) Limited on Monday gave the airline's bidders to come up with a revised offer by 30 September, after initial bids were deemed unsatisfactory, according to a Mint report.

Market outlook

"We are at a critical juncture - the resistance level range of 11300-11350 is not very far from the current price level. This could be a turning point for the Nifty; we could reverse from here to resume the downtrend we saw last week or we could break out of this level to see higher price points. On the upside the markets can rally to 11700-11800. On the downside we could go to 10700-10800," said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

Kalpataru Power Transmission Ltd up 1.4%

Kalpataru Power Transmission Ltd (KPTL) on Monday said the firm and its joint venture partner have completed 74 per cent equity stake sale in Jhajjar KT Transco Pvt Ltd (JKTPL) to IndiGrid.

"We are pleased to inform you that the Parties have today completed the sale of first closing sale shares, which represents about 74 per cent of the total equity shares of the JKTPL after obtaining the requisite regulatory and other approvals and compliance with condition precedents," according to a BSE filing.

KPTL has completed sale of about 37.78 per cent of equity shares (which includes 1.32 per cent equity shares held by KVPL and acquired by the Company), the filing added.

Max Healthcare declines 2.28%

Max Ventures Investment Holdings on Monday sold shares worth nearly ₹182 crore in Max Healthcare Institute through an open market transaction. As per the bulk deal data on the BSE, Max Ventures Investment Holdings offloaded 1.67 crore shares of Max Healthcare at ₹108.88 apiece, valuing the deal at ₹181.96 crore.

Market opening

Indian benchmark share indices opened higher on Tuesday tracking gains in global peers. Sensex opened at 38,176.86, up 195.23 points or 0.51%, while Nifty advanced 61.05 points or 0.54% to open at 11,288.60.

Tata Steel, up 1.5% at open, was the top Sensex gainer followed by Asian Paints, Ultratech Cement, TCS and NTPC. ICICI Bank, Bharti Airtel, Power Grid and HCL Tech were among the laggards. Of 30 Sensex shares, 24 opened in the green.

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Market pre-opening

Indian stocks traded higher in the pre-opening session on Tuesday. At 9:05 am, Sensex was at 38,123.79, up 142.16 points or 0.37%, while Nifty advanced 60,20 points or 0.54% at 11,287.75.

Stocks to Watch

Max Healthcare, Jet Airways, Zydus Wellness, IIFL Finance and BPCL are among the top stocks that may be in focus in today's trade.

Market at close on Monday

Benchmark equity indices Sensex and Nifty surged as much as 1.6% on Monday, lifted by intense buying in financial stocks on hopes of capital support to public sector banks and stimulus measures for the economy.

The BSE Sensex settled 592.97 points or 1.59% higher at 37,981.63, while the NSE Nifty surged 177.30 points or 1.60% to 11,227.55 -- the second straight session of rise for the indices.

Most Asia stocks rise

Asian stocks outside of Japan rose Tuesday with US futures as investors assessed the latest efforts toward US fiscal stimulus.

Japan’s Topix index fell 0.9%.

Australia’s S&P/ASX 200 Index gained 0.3%.

South Korea’s Kospi index rose 0.7%.

Hong Kong's Hang Seng Index rose 0.3%.

Singapore's SGX Nifty added 0.20%.

Wall Street closes higher

Wall Street rallied to close sharply higher on Monday as investors sought bargains among sectors hardest-hit by the coronavirus recession, now limping toward its ninth month.

The Dow Jones Industrial Average rose 410.1 points, or 1.51%, to 27,584.06, the S&P 500 gained 53.14 points, or 1.61%, to 3,351.6 and the Nasdaq Composite added 203.96 points, or 1.87%, to 11,117.53.