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5 stocks in the spotlight this October in futures

ET takes a look at five stocks that will hog limelight in October futures series.

, ET Bureau|
Last Updated: Oct 03, 2017, 08.16 AM IST|Original: Oct 03, 2017, 08.08 AM IST
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ET takes a look at five stocks that are in the spotlight in the futures segment in the October series.
ET takes a look at five stocks that are in the spotlight in the futures segment in the October series.
Indian equities are likely to see more weakness in October after two months of outflows. ET takes a look at five stocks that are in the spotlight in the futures segment in the October series and how they are likely to fare in the near term:

JSW Energy
CMP: Rs 73.75
YTD Change (per cent): 21.19
OI change in October series (per cent): 23.84
Stock price change in October series (per cent): 0.82
Bloomberg Consensus: 6 Buy 12 Hold 7 Sell

The stock has seen momentum of late due to hike in power merchant tariffs recently, which bodes well for the company's earnings in the near term. The stock rose to a high of Rs 81.7 in September but lost some gains later owing to weakness in the market.

"The stock has support near 6768 and buying interest has come near these levels. It can go up to Rs 82-85 in the near term," said Chandan Taparia, derivatives analyst at Motilal Oswal Financial Services.

Canara Bank
CMP: Rs 308
YTD Change (per cent): 16.98
OI change in October series (per cent): 19.07
Stock price change in October series (per cent): -2.47
Bloomberg Consensus: 4 Buy 7 Hold 15 Sell

The stock has been seeing activity on the short side in the October futures segment amid weakness in the public sector banking space. "All PSU banks look weak and stocks such as Canara Bank and Union Bank have seen short positions getting rolled over.

Till the stock (Canara Bank) continues to trade below Rs 322-325, it is likely to remain weak and can fall below `300," said Taparia of Motilal Oswal Financial Services.

GAIL India
CMP: Rs 419.05
YTD Change (per cent): 27.2
OI change in October series (per cent): 16.66
Stock price change in October series (per cent): 5.75
Bloomberg Consensus: 21 Buy 8 Hold 9 Sell

The state-owned natural gas processing and distribution company is in the limelight following the Petroleum and Natural Gas Regulatory Board's proposal for unified gas tariff.

The tariff proposed in the consultation document on unified pipeline tariff is 60 per cent higher than the average tariff earned by GAIL last fiscal.

If implemented, it could boost GAIL's annual earnings over FY18-FY20 by 45 per cent, said a note by BOB Capital Markets, which has a `buy' rating and target price of Rs 490 on the stock.

Reliance Communications
CMP: Rs 19.20
YTD Change (per cent): -43.61
OI change in October series (per cent): 8.90
Stock price change in October series (per cent): -3.52
Bloomberg Consensus: 1 Buy 3 Hold 8 Sell

The stock has seen build-up of bearish bets. On Sunday, the telecommunications company called off merger of its wireless services with Aircel, which will hinder the company's efforts to cut its Rs 42,000-crore debt. In an August 16 report, HSBC had maintained its underweight fundamental recommendation on the company citing weakening credit metrics, elevated debt level and declining profitability. On the technical front as well, the stock has been consistently trading below its 200-day simple moving average of 29.08.

Bajaj Auto
CMP: Rs 3,109.40
YTD Change (per cent): 18.05
OI change in October series (per cent): 8.72
Stock price change in October series (per cent): 2.3
Bloomberg Consensus: 19 Buy 18 Hold 14 Sell

Bajaj Auto saw activity on the long side ahead of the release of its sales numbers. On Monday, it announced a 14 per cent growth in total sales for September at 4.29 lakh units.

Basudeb Banerjee, analyst at Antique Stock Broking said the sales were higher than his expectation of 3.75 lakh units. "Bulk of the recovery was led by exports and domestic three-wheelers than domestic two-wheelers.

Festive season-led demand can help in October but the real test of sustenance of 4-lakh plus monthly sales will be beyond October," said Banerjee.

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