Traders' Diary: Market likely to remain rangebound in near term
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In a tough macro environment, L&T has maintained its order inflow momentum with 20% yoy growth in Q2FY20 led by big ticket infra projects, hydrocarbon, water & power segment respectively. Prospect pipeline for H2FY20 looks encouraging even in volatile business environment hence L&T has retained its order inflow guidance of 10-12% growth. With the surge in order intake, L&T has increased its order book to Rs 3,032bn (+9% yoy) where international orders constitute 22% of the total Order Book. Adjusted revenue growth of 15% yoy was primarily driven by infra, heavy engineering, hydrocarbon and services businesses. We believe execution would improve further in H2FY20 hence we think L&T is on track achieve its revenue growth guidance of 12-15% in FY20.
Technically, Nifty has managed to close above 11570 that should take the market to previous high of 11714. Strategy should be to stay long till the market is holding above the level of 11570. Banknifty has exhibited indecisiveness for the past two days that usually results in a major trending activity on either side. Biasness should be bullish while trading in Banknifty for the day.
BSNL which was once a Navatna company became a sick company with accumulated losses of more than Rs 90000 crores. This is the consequence of BSNL's inability to compete with nimble and vastly more efficient private players like Jio & Airtel. With a bloated workforce of 1.76 lakh BSNL is simply uncompetitive. Only a drastic restructuring with effective VRS stands a chance of revival for BSNL & MTNL. Whether the revival package will succeed, only time can tell.
- VK Vijayakumar Chief Investment Strategist at Geojit financial services
We expect markets to remain range bound in the near term. Further investors’ focus is on Q2FY20 earnings season, which would induce stock specific volatility. We would advise investors to stay focused on selective blue chip companies. On the global front, market participants would keep a close watch on US-China trade talks and progress on Brexit deal.
The overall Trend of the market is positive and in the recent few trading sessions we are also sensing an improvement in the market Sentiment. The “Breadth” is improving as the stocks from the broader market universe are able to attract post breakout follow ups. This reflects conviction in the market, which is a key ingredient for the sustenance of any Bullish trend. Unless the immediate trend decider level of 11050 is breached, the Up-Trend shall remain in force and 12100 levels are expected. We advise initiating fresh Long positions on any retracement up-to 11400-11250 levels, with a final stop loss of 11050.
- Sahaj Agarwal, Head of Derivatives, Kotak Securities
Markets largely remained positive throughout the day led by selective buying in large caps namely in Banking & IT stocks. Auto and consumer stocks witnessed some resurgence on expectation that the worst-case scenario is factored in the stock prices. Due to corporate tax cut, Q2 earnings growth is better, however market will review the outlook for revenue growth to assess any potential for re-rating
- Vinod Nair, Head of Research, Geojit Financial Services
CLOSING BELL: IT, bank stocks give Sensex 95 points lift; Nifty reclaims 11,600; RInfra surges 10%, Dish TV slips 10%
Dr Reddy's recalls all its ranitidine products in US
Price as on 23 Oct, 2019 02:37 PM, Click on company names for their live prices.
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Investments via P-notes fall for fourth month in a row
Dropping for the fourth consecutive month, investments through participatory notes (P-notes) in the Indian capital market stood at Rs 76,611 crore at the end of September. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly after going through a due diligence process.
Global brokerages were buoyant on Axis Bank and maintained their ratings despite the private lender reporting a loss in the September quarter on Tuesday.
Credit Suisse said the operating performance of the company continues to improve. However, it cut fiscal 2020 earnings per share (EPS) estimates by 29 per cent because of the deferred tax assets (DTA) impact.
Macquarie also retained ‘outperform’ rating on the stock with target at Rs 770. That means an upside of 8 per cent from the last closing price.
Bajaj Auto rises as Q2 net up 22%
Price as on 23 Oct, 2019 01:17 PM, Click on company names for their live prices.
It has become very popular to say I do not buy PSUs, I do not look at PSUs, but if you are a genuine value investor, and particularly if you have a government now determined to disinvest, you should be looking at it.
- Ramesh Damani
Coromandel International jumps as Q2 net rises 38%
Price as on 23 Oct, 2019 12:44 PM, Click on company names for their live prices.
Cement shares mixed; Burnpur Cement jumps over 4%
Shares of cement stocks were trading on a mixed note in Wednesday's afternoon session.
Shares of Burnpur Cement (up 4.35 per cent), India Cements (up 3.72 per cent), Kakatiya Cements Sugar & Industries (up 3.18 per cent), Deccan Cements (up 3.05 per cent) and Sagar Cements (up 1.70 per cent) were among the top gainers.
Andhra Cements (down 3.85 per cent), NCL Industries (down 1.85 per cent), Orient Cement Ltd (down 1.82 per cent), Gujarat Sidhee Cement (down 1.45 per cent), J K Cements (down 0.96 per cent) were among the top losers.
RBL Bank shares tumble as Q2 net falls 73%
Price as on 23 Oct, 2019 12:08 PM, Click on company names for their live prices.
BSE Capital Goods index down; HEG falls 4%
The S&P BSE Capital Goods index was down in Wednesday's afternoon session.
Shares of Bharat Heavy Electricals (up 6.18 per cent) , NBCC (India) (up 2.38 per cent) , Honeywell Automation India (up 2.07 per cent) and Lakshmi Machine Works (up 1.87 per cent) were trading with gains.
HEG (down 3.66 per cent) , Graphite India (down 1.99 per cent) , Carborundum Universal (down 1.31 per cent) and Larsen & Toubro (down 0.57 per cent) were trading lower.
Gold, silver gain as British lawmakers delay Brexit plans
Bullion counters were trading with gains in the domestic commodity market on Wednesday after the British lawmakers rejected the government's proposed timetable for passing legislation to ratify its deal to exit the European Union.
MCX Gold (Dec) futures was up 0.4 per cent to Rs 38,025, while MCX Silver (Dec) futures was trading 0.44 per cent higher at Rs 45,375.
Range bound action is possible theme ahead, hence levels of 11,400 (Nifty) could act as support zone; while on the higher side Nifty could make an attempt towards 11,750 zone.
- Yes Securities
Syngene International rises as Q2 net up 63.6%
Price as on 23 Oct, 2019 11:33 AM, Click on company names for their live prices.
We reiterate our view that to maintain the upside momentum and enter fresh bull run, Nifty will have to clear the thresholds of 11,700 - 11,800. A move above 11800 could be an extremely strong sign for the bulls because above, 11,800 Nifty has a potential to make new life high.
- IndiaNivesh Securities
L&T, Bajaj Auto, HCL Tech, JSW Steel and Hero MotoCorp among cos to announce Q2 results today
Price as on 23 Oct, 2019 10:02 AM, Click on company names for their live prices.
DHFL plunges 5% as HFC may buy back MF bonds at discount
Shares of DHFL fell 5 per cent to Rs 19.40 amid reports that the HFC may offer to buy back bonds held by mutual funds at a discount to ensure near unanimity among lenders and allow an exit to those unwilling to be a part of the banks-led resolution process.
Sensex gains 150 points, Nifty above 11,600; rupee trades at 71 against dollar.
Singapore trading sets stage for positive start
Nifty futures on the Singapore Exchange were trading 10.50 points, or 0.09 per cent, higher at 11,628.50, indicating a tepid start for Dalal Street.
Tech view: Nifty50 faces resistance at 11,700
Nifty50 snapped a six-day winning streak on Tuesday, as it saw selling pressure after briefly breaching the 11,700 mark in intraday trade. The index had made an attempt to take out this level in September, only to come under selling pressure. Breaching this level decisively will be key to resumption of the uptrend.
Asian shares drop after yet another Brexit delay
Asian shares and US stock futures dipped on Wednesday after British lawmakers rejected the government's timetable to fast-track legislation for its deal to take Britain out of the European Union. S&P500 mini futures dropped 0.4 per cent while Japan's Nikkei dipped 0.3 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.17 per cent.
US stocks settled lower
US stocks ended lower on Tuesday, giving up early gains after British lawmakers rejected the government's proposed timetable for passing legislation to ratify its deal to exit the European Union. The Dow Jones Industrial Average fell 39.54 points, or 0.15 per cent, to 26,788.1, the S&P500 index lost 10.73 points, or 0.36 per cent, to 2,995.99 and the Nasdaq Composite dropped 58.69 points, or 0.72 per cent, to 8,104.30.
Oil prices slip after US inventory buildup
Oil slipped on Wednesday after US industry data showed a bigger-than-expected build in crude stockpiles, but possible deeper production cuts coming from OPEC and its allies prevented a further slide in prices. International benchmark Brent crude futures dropped 28 cents, or 0.47 per cent, to $59.42 a barrel.
Bajaj Auto, HCL Tech to announce Q2 results
Bajaj Auto, HCL Technologies, JSW Steel, Larsen & Toubro, Biocon, Torrent Pharma, Castrol India, Bajaj Holdings and Crompton Greaves Consumer Electricals are among some of the firms that will declare Q2 earnings later in the day.
FIIs sell Rs 587 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 557.50 crore on Tuesday, data available with NSE suggested. DIIs also were net sellers to the tune of Rs 985.47 crore, data suggests.
UK House rejects Brexit timetable
British lawmakers on Tuesday rejected the government’s proposed timetable for passing legislation to ratify its deal to exit the European Union. The defeat in Parliament made it unlikely that Britain would finalise its exit by Prime Minister Boris Johnson’s Oct. 31 target. Johnson said it was up to the EU to decide whether it wanted to delay Brexit and for how long.
Top banks show bad loan stress
Two top Indian private-sector lenders on Tuesday signalled stress in their loan books as the banks grapple with the worst economic slowdown in years that has increased bad loans across the sector. Kotak Mahindra Bank, the nation’s third-largest lender by market value, trimmed its full-year loan growth forecast, while the sixth-biggest bank Axis Bank said its small business and small and medium enterprises categories have come under pressure due to delayed payments.
Slowdown curbs India Inc's appetite for M&A
Corporate India's merger and acquisition activity in the July-September quarter witnessed a downtrend with total deal value falling by more than half over the last year, largely owing to a slump in economic activity and lack of big ticket deals, says a report. According to Grant Thornton's quarterly M&A Dealtracker 2019, in Q3 this year, corporate India announced deals worth $6,025 million through 97 deals against 134 such transactions worth $13,185 million in the same period of the last year.
Single window to draw FDI
The Department for Promotion of Industry and Internal Trade (DPIIT) is planning to set up a single window system to handhold foreign investors keen to invest in India, reports PTI. The single-window system is likely to have representatives from both the Centre and state governments. The system will help in getting all relevant approvals and clearances required by foreign investors.
Defence FDI through auto route
India plans to widen its doors to foreign funds in the defence sector to boost local production of armaments and cut down on imports. The department for promotion of industry and internal trade (DPIIT) and the defence ministry are in talks to ease many conditions to encourage foreign investors to set up shop here. It may also restructure the offset and export policies. “Discussions are on over further liberalisation,” reports ET quoting a government official.
Govt to change definition of MSMEs: Gadkari
The government will soon make changes to the definition of a micro, small and medium enterprise, Union Minister Nitin Gadkari said on Tuesday and hoped to generate five crore jobs in the MSME sector in five years. Finance Minister Nirmala Sitharaman had in August said the government would consider amending the MSME Act to move towards a single definition.
Sensex on Tuesday
Domestic equities took a pause after a six-session winning run on Tuesday, with IT major Infosys' shares crashing following allegations of "unethical practices" against the company's chief executive. The BSE gauge Sensex closed 334.54 points, or 0.85 per cent, lower at 38,963.84. It hit an intra-day low of 38,924.85 and a high of 39,426.47.
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