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Global markets rise; Nifty, Sensex follow suit

Benchmark indices in India have opened in green with positive global cues backing them on Thursday. The markets had closed Wednesday with record gains mainly powered by auto stocks. SGX Nifty has opened in green. Markets will watch the Wholesale Price Inflation, trade balance and export import data to be released later in the day. Companies, including Century Textiles & Industries, Cyient, Den Networks, HCL Technologies, and Indibulls Real Estate will be releasing their September quarter results today.  Global markets will be watching earnings reports of Morgan Stanley and Citigroup Inc. Data on US initial jobless claims, PPI will also be watched. Indian markets will be closed on Friday for Dussehra.

14 Oct 2021, 09:18:13 AM IST

Sensex, Nifty open firm

Sensex at 61,111.04, up 373.99 points, or 0.62% at open

Nifty at 18,272.85, up 111.10 points, or 0.61%.

14 Oct 2021, 09:13:18 AM IST

Markets pre-open at 9:10 am

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Market preopening.

14 Oct 2021, 09:08:08 AM IST

Sensex at preopen

Sensex was in the green at pre-open. 26 stocks were in the green while four were in red. 

Sensex heatmap.

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Sensex heatmap.

14 Oct 2021, 09:02:57 AM IST

Markets at preopen

Markets at preopen.

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Markets at preopen.

14 Oct 2021, 08:52:52 AM IST

India offers spectrum of opportunities: FM Sitharaman tells CEOs

India offers a spectrum of opportunities to investors and business firms, Finance Minister Nirmala Sitharaman told executives of top American companies, as she met and apprised them of various flagship programmes of the Indian government under the Atma Nirbhar Bharat. Sitharaman, 62, is currently in the American capital to attend the annual meetings of the International Monetary Fund and the World Bank. On the sidelines of these events, she has been meeting a host of top American CEOs with footprints in India and who have shown interest in seizing the investment opportunities in the country.  (PTI)

14 Oct 2021, 08:49:32 AM IST

Gaurav Udani, CEO & founder, ThincRedBlu Securities

“Nifty is expected to open positive at 18,250 up by 70 points. Nifty has support in 17,800-17,850 range. Nifty is in a bullish trend and traders can consider buy on dips with strict stoploss for 18,275 and 18,300 as targets.”

14 Oct 2021, 08:43:00 AM IST

Vodafone Idea, IRCTC among 8 stocks under F&O ban on NSE

A total of eight stocks/securities have been put the under futures and options (F&O) ban for trade by the National Stock Exchange (NSE) on Thursday, October 14, 2021. These securities are banned under the F&O segment as they have crossed 95% of the market-wide position limit (MWPL), as per the NSE. (Read here)

14 Oct 2021, 08:41:26 AM IST

Stock picks: Jyoti Roy, DVP-equity strategist, Angel One Ltd

While we remain positive on sectors such as IT and chemicals, we believe that sectors such as consumer discretionary, BFSI and capital goods will lead the next leg of the rally in the markets. Few of the stocks where are positive from a one perspective are:

Federal Bank

Federal Bank had posted a good set of numbers for Q1FY22 despite the second covid wave as NII/ PPOP increased by 9.4%/21.8% year-on-year. GNPA and NNPA ratio deteriorated marginally to 3.5% and 1.23% while restructuring went up by 0.79% qoq to 1.83% of advances. Overall asset quality held up well in Q1FY22 despite the second covid wave.

Moreover the company has reported a 3.4% quarter-on-quarter growth in AUM for Q2FY22 which indicates strong business momentum. We expect the bank to report strong growth in AUM and improvement in asset quality from Q2FY22 which will drive NII and profit growth. We expect the Federal bank to post NII/PPOP/PAT growth of 22.8%/23.7%/23.2% between FY20-23 and remain positive on the bank. We have a BUY rating on federal Bank with a price target of 110.

Ashok Leyland

Ashok Leyland Ltd (ALL) is one of the leading players in India CV industry with a 32% market share in the M&HCV segment. The company also has a strong presence in the fast-growing LCV segment. Demand for MHCV was adversely impacted post peeking out due to multiple factors including changes in axel norms, increase in prices due to implementation of BS IV norms followed by sharp drop in demand due the ongoing covid-19 crisis.

MHCV segment has also started to recover over the past few months before the second lockdown while demand for buses is expected to remain muted due to greater preference for personal transportation. We believe that the company is ideally placed to capture the growth revival in the CV segment and will be the biggest beneficiary of the government’s voluntary scrappage policy and hence rate the stock a BUY with a price target of 175.

Sona BLW Precision

Sona BLW is one of India’s leading automotive technology companies that derive ~40% of its revenues from Battery Electric Vehicles (BEV) and Hybrid Vehicles. It supplies EV differential assemblies and gears, BSG systems and EV traction motors to global customers. ~75% of their income from sale of goods in FY21 came from end-use in the overseas markets. This global BEV segment has been fastest growing and is expected to maintain a high growth rate which is positive for Sona BLW.

The company’s capabilities have enabled them to gain market share across its products especially for products related to EV/BEV. They also have strong market share ranging from 55-90% for differential gears for PV, CV and tractor OEMs in India. Given the traction in the BEV/Hybrid Vehicle space, we believe that Sona BLW will continue to command a higher multiple which is justified by ~47% earnings CAGR over FY21-24E. We have a BUY rating on the stock with a target price of 821.

Carborundum Universal

Carborundum Universal (CUMI) is part of the Murugappa group and is a leading manufacturer of abrasives, industrial ceramics, refractories, and electro minerals (EMD) in India having application across diversified user industries. The company is expected to benefit from improving demand scenarios across its end user industries such as auto, auto components, engineering, basic metals, infrastructure, and power.

CUMI has shown good execution in Q1FY22 with strong performance in Abrasives and EMD segments. Within Abrasive, the company is gaining market share (supply chain issues/preference for Indian suppliers) and should benefit from good end user industry demand. EMD performance is likely to sustain owing to strong pricing and Volumes (due to China+1 strategy of its customers). We remain positive on the future growth prospects of the company due to strong demand for its products and entry into new segments by the company. We have a BUY rating on the company with a target price of 1060.

14 Oct 2021, 08:37:22 AM IST

Market outlook: Jyoti Roy, DVP-equity strategist, Angel One Ltd

As we head into the auspicious occasion of Dussehra and Diwali, the Nifty continues to hit new lifetime highs due to continued improvement in economic activities. There has been a significant improvement in economic activities post the second covid wave due to relaxation in restrictions. Expectation of further improvement in demand during the ongoing festive season along with strong FII and DII flows are also providing support to the markets.

The US Fed in its latest FOMC meeting has announced that it will start with the tapering of bond purchases from the end of 2021. This is leading to concerns that we may see FII outflows which will lead to a correction in the markets like 2013. However this time around India’s fundamentals are much better as compared to 2013 and therefore it is unlikely that there will be any major pullout by FIIs though there will be a slowdown in flows.

While we expect a slowdown in FII flows over the next one year as the US Fed completes its tapering program we expect robust mutual fund flows which along with continued increase in direct retail participation will more than make up for slowdown in FII flows and keep driving markets. Moreover there is also optimism given improvement in the pace of vaccination in September. We estimate that at the current pace of vaccination the entire eligible population will be partially vaccinated by Dec’21 while almost 60% of the eligible population will be fully vaccinated therefore limiting the impact from any possible third covid wave.

While we remain positive on the markets from a one year perspective we believe that any further deterioration in the global energy crisis will lead to higher energy prices and coal shortages for a longer period of time which can have an adverse impact on growth and is one of the key risks to the current market rally. Higher energy prices for a prolonged period of time can also lead to further spike in global inflation which is already running well above the comfort zone of central banks.

A higher than expected global inflation can force central banks to tighten monetary policy more rapidly than anticipated which can cause pullback in global liquidity flows which may lead to some short term volatility in the markets. However despite any possible short term volatility in the markets we remain positive on the markets from a medium to long term perspective as we expect a rebound in corporate earnings of companies. 

14 Oct 2021, 08:30:33 AM IST

Markets likely to stay steady; Infosys, Zee, power stocks in focus

Markets are likely to stay firm on Thursday while trends in SGX Nifty show a positive opening of Indian benchmark indices. On Wednesday, the 50-share index ended at 18,161.75, up 169.80 points or 0.94%. The Sensex closed at 60,737.05, up 452.74 points or 0.75%. (Read here)

14 Oct 2021, 08:21:39 AM IST

Petrol, diesel prices hiked to record highs

The prices of petrol and diesel were hiked across metros on Thursday, according to a notification issued by state-owned fuel retailers. The latest hike has taken the price of petrol now to 104.79 in Delhi, up from 104.44 per litre. Diesel rates, too, touched a record high of 93.52 per litre. In Mumbai, petrol cost a fresh all-time high of 110.75 a litre. Diesel price also rose to 101.40 per litre in Maharashtra’s capital. The fuel prices were hiked in Kolkata, too, where a litre of petrol and diesel now cost 105.43 per litre and 96.63 per litre, respectively.

14 Oct 2021, 08:15:16 AM IST

International markets at 8:12 am

International markets snapshot.

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International markets snapshot.

14 Oct 2021, 08:09:46 AM IST

Infosys  fixes 27 October as record date for payment of Interim dividend

14 Oct 2021, 08:04:14 AM IST

China’s factory gate inflation hits record high in September

China’s annual factory gate prices grew at their fastest pace on record in September, driven by energy curbs and soaring commodity prices, piling pressure on businesses already grappling with supply bottlenecks. The producer price index (PPI) rose 10.7% from a year earlier in September, the National Bureau of Statistics (NBS) said on Thursday, the biggest rise since the data began to be compiled in 1996. Economists in a Reuters poll had expected the PPI to rise 10.5% after a 9.5% increase in August. A widening power shortage in China, caused by the country’s transition to clean energy, booming industrial demand and high commodity prices, have halted production at numerous factories including many supplying big global brands such as Apple. The power crunch has hit output across the cement, steel, and aluminum industries, while utility companies have struggled to keep up with post-pandemic power demand. (Reuters)

14 Oct 2021, 07:58:23 AM IST

Bitcoin surges above $58,000, ether, dogecoin, other cryptos also rise

Bitcoin prices today surged above the $58,000 mark as the world’s largest cryptocurrency by market capitalization was trading more than 3% higher to $58,418. Bitcoin is nearing its record high level of almost $65,000 that it reached in April, and is up 100% this year (year-to-date) so far. (Read here)

14 Oct 2021, 07:53:43 AM IST

Battered Indian rupee may get some relief from foreign inflows

A potential gush of foreign inflows on the back of a slew of large share sales is likely to bring reprieve to the Indian rupee, pummeled by rising oil prices. The currency, which has become Asia’s worst performer over the past month, may gain about 2% from Wednesday’s close to 74 per dollar by the end of December, according to a Bloomberg survey. Big inflows may make way for Indian shores as digital companies, including Warren Buffet-backed Paytm, plan to raise about $10 billion in initial share sales. The rupee has come under pressure as surging commodity prices rekindled worries about inflation and the financial health of the net oil-importing nation. A stronger dollar, spurred by rising wagers of US stimulus taper, has also weighed on emerging- market currencies. (Bloomberg)

14 Oct 2021, 07:48:54 AM IST

Day trading guide for Thursday: 9 stocks to buy or sell today — 14th October

Adani Ports, HDFC Bank and Wipro among the picks. (Read here)

14 Oct 2021, 07:44:12 AM IST

Zee dismisses Invesco charge of corporate misgovernance

Zee Entertainment Enterprises Ltd refuted American fund manager Invesco’s allegations of corporate misgovernance and that its board is acting in a non-transparent manner. The broadcaster said that five of the six independent directors had joined the board in the past two years, and Invesco was consulted before they were appointed. The Mumbai-based media group said Invesco’s actions over the past few weeks and open letters seem to be “motivated by concerns entirely extraneous to any corporate governance issue”. (Read here)

14 Oct 2021, 07:38:53 AM IST

On Mindtree results: Jyoti Roy, DVP-equity strategist, Angel One Ltd

“MIndtree reported a 12.8% quarter-on-quarter (q-o-q) growth in revenues to $351mn which was well above street estimates. In rupee terms revenue grew by 12.9% q-o-q to 2,586.2 crore while EBIT grew by 15.6% q-o-q to 470 crore. EBIT margins for the quarter expanded by 43pps q-o-q to 18.2% as against expectations of a contraction in margins. Net profit for the quarter grew by 16.2% q-o-q to 398.9 crore. During the quarter the company reported new deal wins of $360mn as compared to $504mn in Q1FY22. Mindtree has now posted strong growth in revenues for four consecutive quarters including a double digit dollar revenue growth in Q2FY22. During the quarter growth was driven by Retail, CPG and manufacturing which grew by 29.7% q-o-q while the travel and  hospitality segment registered growth of 14.2% q-o-q. BFSI too registered strong sequential growth of 8.9% q-o-q while the CMT segment registered a growth of 5.4%. Given significantly better than expected numbers we maintain our positive outlook on the company despite expensive valuations (39.6xFY23 EPS estimate of 110).”

14 Oct 2021, 07:30:20 AM IST

On Infosys results: Jyoti Roy – DVP- Equity Strategist, Angel One Ltd

“Infosys reported a 5.7% quarter-on-quarter (q-o-q) growth in revenues to $3,998 million which was well ahead of estimates. Topline growth was driven by digital which grew by 10.0% q-o-q. In rupee terms, revenue grew by 6.1% q-o-q to 29,602 crore while gross profits grew by 4.3% q-o-q to 9,796 crore. Gross margins contracted by 57bps q-o-q to 33.1% largely on account of higher sub contracting costs which was partially offset by better utilization. Operating profits grew by 5.6% q-o-q to 6,972 crore while EBIT margins contracted by 10bps q-o-q to 23.6%. Net profit for the quarter grew by 4.4% q-o-q to 5,421 crore. Infosys also maintained its deal momentum as the company reported deal wins of $2.15 billion compared with $2.6 billion in Q1FY22. Overall, Infosys has reported better than expected numbers especially on the revenue growth front. Post the Q2FY22 numbers, we maintain our positive outlook on Infosys with a price target of 2,016 (32xFY23 EPS estimate of 63.0).” 

14 Oct 2021, 07:26:49 AM IST

Singapore unexpectedly tightens monetary policy as price pressures grow

Singapore’s central bank unexpectedly tightened monetary policy on Thursday, saying the move would ensure medium-term price stability amid mounting cost pressures caused by supply constraints and the global recovery. The city-state joins a group of economies that have begun to dial back heavy pandemic-era monetary stimulus, as the threat of inflation outweighs the growth risks posed by the coronavirus. The Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band. It adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.

14 Oct 2021, 07:26:50 AM IST

Stocks to watch

HCL Tech, ZEEL and FMCG are among stocks to watch today. (Read here)

14 Oct 2021, 07:26:50 AM IST

Stocks up on recovery hopes; treasuries trim gains

Global stocks, including those in Asian markets, rose Thursday as traders assessed the durability of the economic recovery to inflationary pressures and a looming reduction in the Federal Reserve’s pandemic-era stimulus. Equities climbed in Japan, South Korea and Australia. Financial markets in Hong Kong are closed on Thursday for a holiday. US futures pushed higher after Wall Street snapped a three-day losing streak, with the tech-heavy Nasdaq 100 outperforming the S&P 500. Longer term Treasuries pared a rally, while a key part of the Treasury yield curve has flattened to around a one-year low. US inflation held above 5% and Fed minutes signalled a tapering of bond purchases from mid-November or mid-December. Meanwhile, a 30-year Treasury auction drew strong demand. Crude oil stabilized above $80 a barrel and gold was near the highest in nearly a month. Singapore’s dollar rose after the central bank unexpectedly tightened monetary policy settings. Upcoming China inflation figures will offer a window on the impact of supply chain disruptions and a jump in energy prices.

Stocks

S&P 500 futures rose 0.3% as of 10:01 a.m. in Tokyo. The S&P 500 rose 0.3%

Nasdaq 100 futures increased 0.4%. The Nasdaq 100 rose 0.8%

Japan’s Topix index climbed 0.3%

South Korea’s Kospi added 1.1%

Australia’s S&P/ASX 200 Index gained 0.8%

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