Nifty ends at record high on negative market breadth, Sensex up 250 points

All that happened in Friday's trade

The benchmark indices extended gains with the Nifty50  closing at record high after Bharti Airtel rallied on a deal to buy the Tata conglomerate’s consumer mobile business, while Reliance Industries surged ahead of its results later in the day.

Markets also got a boost after data showed inflation held steady, instead of accelerating as expected, raising tentative hopes the Reserve Bank of India (RBI) would be less hawkish about interest rates.

The data late on Thursday showed annual consumer price inflation rose to 3.28% in September from a year earlier, in line with August and countering expectations for a 3.6% rate. At the same time, separate data showed industrial output hitting a nine-month high.

Although analysts still expected the Reserve Bank of India to keep rates steady in the months ahead, but further signs of steady inflation would raise the odds of a rate cut.

Overseas, World stocks rose for a fourth straight day on Friday on expectations of broad-based global growth, while the dollar headed for its worst week in five as investors awaited US inflation data.

4:00 PM

Yogesh Mehta,VP- Retail Research, Motilal Oswal Securities

 

The Nifty showed fireworks a week before Diwali and cheered the street by touching a new life high at 10,192, crossing its earlier high of 10,179. The strong rally was pushed by buoyant global markets. Market opened with a mild gap-up on better CPI number and strong IIP announced on Thursday, rallied further with strong Q2 results by TCS which gained over 2%, Nifty settled at record high closing of 10,164 gaining 0.66% Bharti Airtel gained the most by 7.6% on Tata Teleservices acquisition announcement. Major gainers were Tata steel (2.7%), Ultratech (2.2%), HDFC Bank (1.7%), and ICICI Bank (1.36%).

3:54 PM

Sensex heatmap at close

Source: BSE

3:52 PM

Market breadth

 

The market breadth, indicating the overall health of the market, turned negative. On BSE, 1,426 shares declined and 1,300 shares rose. A total of 128 shares remained unchanged.

3:46 PM

Broader markets underperform

Broader markets underperformed with the BSE Smallcap adding just 0.1%, while the BSE Midcap remained little changed.

3:42 PM

Markets at close

 

The Nifty50 settled at its record closing high of 10,167, up 71 points, surpassing its previous closing high of 10,153 hit on September 18. Sensex, meanwhile, closed at 32,432, up 250 points, 75 points away from its closing high of 32575 hit on August 1.

3:34 PM

Market commentary by VK Sharma, Head Private Client Group and Capital Market Strategy at HDFC Securities

 

The Nifty scaling a new life time high is no news as we are only following the American, European and other Asian markets. The corporate results, globally are going to be better. The minutes of the last Fed meeting were also dovish. With domestic investors dipping their toes in the equity markets at an accelerated pace , the process of making new highs in the markets is likely to continue beyond the immediate highs. 

 

While the Nifty has made a new high in September , the Sensex has not. So the markets are waiting for the Sensex to cross the new highs made in August. With the festive mood in the air, markets are likely to do well in the October month, which has historically been the weakest

3:17 PM

BSE Metal index hits 6-year high; Tata Steel, Jindal Steel hit 52-wk highs

 

Shares of metal companies were in focus with the S&P BSE Metal index hitting six-year high on expectations of strong earnings growth in July-September quarter (Q2FY18). Tata Steel, Jindal Steel & Power (JSPL) and National Aluminium hit their respective fresh 52-week highs, while Hindalco touched a new high on the BSE in intra-day trade on Friday. READ THE FULL STORY HERE

3:16 PM

JM Financial on Bajaj Corp

 

Bajaj Corp reported another weak result with a double-digit decline in operating profit for the second consecutive quarter. However, its flagship Bajaj Almond Drops’ (BAD) volume trajectory recovered posting a growth of 6.5% relative to 4-7% decline seen over past 3 quarters - a key positive. 

 

The quarter’s volume growth was marginally ahead of retail offtakes (+5%) - this, to us, indicates that recovery is led by underlying demand and not merely restocking; sales realisation, though, fell 2% which, as per our workings, is attributable to higher tax incidence under GST. Weakness on earnings side was surprisingly led by higher A&P and Staff costs while the expansion in GPM was aided by tax credits now available on inputs. 

 

The company continued to grow its market share and outperform the LHO category growth. We expect volume growth to recover to double-digit level in the latter half of FY18, aided in part by a favourable comparator – this should aid stock performance especially given a steep 45%+ discount to the sector’s 12M forward multiple (ex-ITC). 

We recommend 'buy' on the stock with a target price of Rs 475.

3:10 PM

Oil update

 

Oil prices firmed as strong Chinese oil import data and turmoil in the Middle East boosted bulls in a market that has already shown signs of rebalancing after years of excess.

 

Brent was at $57.23, up 98 cents. US West Texas Intermediate (WTI) crude was at $51.41 per barrel, up 81 cents from its last settlement. The contracts were on track for weekly gains of more than 2% and 4% respectively.

3:08 PM

European markets

 

European shares rose to their highest level in nearly four months, helped by some well-received earnings updates. The pan-European STOXX600 rose 0.3% and was set for its fifth straight week of gains as were world stocks.

 

Germany’s DAX index was flat, just below the fresh all-time high hit in the previous session, while Britain’s FTSE eased back 0.4 percent after a record close on Thursday.

3:02 PM

Merger a win-win deal for Bharti Airtel, Tata Tele

 

On the face of it, one can call it a sweet deal for both the parties. N Chandra always wanted to get rid of the unviable mobile telephony business and that will allow him to concentrate the Tata Group’s capital in places where it really matters. For Bharti Airtel, it gives them access to a captive client base, which is likely to increase its overall client base by 12-14 per cent without taking on too much of additional debt. But, first, let's look at the contours of the deal. READ FULL ANALYSIS

2:56 PM

Sectoral trend in last leg of trade

Source: NSE

2:54 PM

Stock Reco: Manappuram Finance

 

While gold loans comprise the major portion of assets under management (AUM) at 81% for FY17, the company has re-calibrated its products from traditional long term loans to several shorter term lending products to increase cushion from fluctuation in gold prices and improve growth.

 

While FY17 had its own challenges in terms of demonetization led decline in disbursements, non-recoveries of loans resulting in higher NPAs and overall weakness in profitability, MFL has maintained healthy growth in AUM and profitability along with a limited impact on NPAs. 

 

Going ahead, the overall AUM is expected to witness a 24% growth with healthy return ratios of 5.8% RoA and 25.9% RoE by FY19E. Considering the robust financial growth expected from re-alignment of business strategies by increasing presence in high-growth segments, we are positive on the stock of MFL which trades at 1.8x its FY19E ABV. We initiate coverage on MFL with a Buy rating and a target price of Rs140, valuing the stock at 2.4x its FY19E ABV.

 

(Source: Centrum Wealth Research)

2:48 PM

Will the RBI cut rates now?

 

September’s CPI reading reaffirmed our position that the future inflation trajectory could be lower than RBI’s projected path. While IIP data for August signalled a revival in industrial activity post the GST shock in July, it is too early to read this as a sustainable trend. Overall, we expect the central bank to be surprised on the downside on both growth and inflation fronts this year. This should open up room for one last rate cut by the end of FY18. For markets, since investors remain divided on future monetary policy action, lower inflation readings are unlikely to translate into substantial downward movement in yields. Because of a rise in interest rates globally and uncertainty surrounding domestic rate cycle, the benchmark yield could settle at current levels and continue to trade in the range of 6.6% to 6.8%.

 

(Source: Abheek Barua, chief economist, HDFC Bank)

2:35 PM

Cyient hits 52-week high post Q2

 

Cyient rallied 9% to Rs 569 on the BSE in intra-day trade after the company said it expect to deliver a double digit earnings growth in the financial year 2017-18 (FY18). READ MORE