MARKET WRAP: Sensex surges 835 pts, Nifty reclaims 11K; Nifty IT up over 3%

All that happened in the markets today

9:21 AM

Sectoral trends :: Metals, Pharma stocks top gainers

9:19 AM

Sensex Heatmap :: All constituents trade in the green

9:18 AM

First Trade

9:17 AM

First Trade

9:15 AM

Rollover Analysis :: Edelweiss Securities

>> The run of three successive winning expiries finally came to a halt as Nifty ended the September series down 6.5%. While we don’t want to be drawn into a debate whether the next leg of decline has commenced, the current round of correction has definitely weakened the price structure across stocks and indices.

>> The index has taken support near the 200DMA and in near term a revisit of 10650(100 DMA) looks a possibility. On the upside 11,100 and 11,300 (neckline of the head and shoulders breakdown) will be major resistance for the index. Also interestingly, the Nifty OI (shares) at start of the series is at multi month lows. Such lighter OI base makes the index susceptible to sharp moves.

>> A major achilles heals for the market has been banks. Going into the October series, Bank Nifty has seen short additions (Price/ OI:-13%/+32%).
 

9:11 AM

Rollover Analysis :: IIFL Securities

>> Markets witnessed a sharp selloff throughout the September series as across the board profit booking and fresh short selling weighed in. Bank Nifty index underperformed the Nifty index by a whopping ~7%, reversing the outperformance of the previous series, with both the indices closing ~13.3%/6.5% lower on eoe basis.

>> Long gamma & long vega positions were the flavour of the series as the option writers ran for cover on account of a sharp delta move in the Bank Nifty index. Nifty IT index was among the biggest outperformer, closing ~5% higher. India Vix index closed the series at ~23.5, up ~25% on eoe basis.

>> Rollovers of Nifty/Bank Nifty in September stood at 71%/79% (0.84 cr/17.4 lakh shares) as against 78%/75% (1.12cr/13.6 lakh shares) in the last series, while market-wide rollovers stood at 92% vs 87% in the last series. 

9:08 AM

Top gainers and losers on S&P BSE Sensex at Pre-Open

9:06 AM

Markets at Pre-Open

9:05 AM

Markets at Pre-Open

9:01 AM

BROKERAGE VIEW :: Nirmal Bang on Accenture

Unlike the 5-8% local currency (LC) growth guidance that it used to start with in recent years, Accenture’s guidance of 2-5% LC growth for FY21 (Aug YE) is slower and is a story of two halves with 1H growth likely in the -3% to 0% range followed by high single digit to low double-digit growth in 2H. This is due to impact of Covid-19. Among the assumptions driving a 2HFY21 pick up (which coincides with 1HFY22 of Indian players) are: (1) a pickup in macroeconomy (2) Strategy and consulting - discretionary spending - making a comeback (3) larger transformation programs being executed, and (4) base effect.

Accenture also sounded bullish from a medium-term perspective indicating that industry is likely witnessing a ‘once in an era replatforming of businesses’ and that this is getting crunched into a shorter time frame. Something that would have taken 10 years will now happen in 5. However, we need to see if strong growth indicated for 2HFY21 is something that will continue in the medium term.

8:58 AM

BROKERAGE VIEW :: Kotak Institutional Equities on Accenture result

Accenture’s revenues in 4QFY20 missed consensus estimates, an unusual event for the company. Guidance for FY2021 at 2-5% was weak and captured the impact of pressure on discretionary spending. There were a few positives from the results/ management commentary—strong bookings, significant acceleration in growth in 2HFY21 to high single digit to low double digit and belief of significant pull forward in transformational spending. Read through for Indian IT—some near term negatives even as underlying trends are encouraging.

8:56 AM

Stocks to watch out for today

IT stocks may trade under pressure today after Accenture forecast current-quarter revenue below Wall Street expectations and missed estimates for fourth-quarter sales, hurt by lower spending from clients impacted by the Covid-19 pandemic. Meanwhile, Accenture's total revenue fell 2 per cent to $10.84 billion in the quarter ended August 31, missing analysts’ estimate.

 

RIL: Reliance Retail, according to reports, is in talks with Electronics Mart India, a consumer durables retail chain, for a possible acquisition. Electronics Mart operates 60 stores in South India with 1,200 employees on its roll. 

 

Cipla: The company on Friday announced that it has received final approval for its Abbreviated New Drug Application (ANDA) for Dimethyl Fumarate DR Capsules 120mg, 240mg, and 120mg/240mg Starter Pak from the United States Food and Drug Administration (US FDA). READ MORE  

8:55 AM

BROKERAGE VIEW :: MOFSL on Havells India

CMP: Rs 669 | TP: Rs 635 (-5%) | Reco: Neutral

Our channel check suggests sound recovery in the B2C business, with scope for primary growth higher than secondary growth going into the festive seasons (owing to channel refilling). We raise our FY21E/FY22E estimate by 14%/6%. We maintain a Neutral rating, with TP of Rs 635 (45x Mar’22E), as we await a better entry point on the stock.

8:52 AM

BROKERAGE VIEW :: MOFSL on Accenture results

>> Accenture’s revenue at USD10.8b (-1% YoY CC) was largely in line with consensus estimate of USD10.9b. Software, Lifesciences, and Public Services continued to do well, while Communication and BFSI were largely stable. Health & Public Services (12% YoY CC), the biggest growth driver for Accenture (19% of revenues), may not benefit Indian companies in the same way due to them having relatively lower exposure (6-14 % of revenues).

>> Strong order booking (8% YoY), driven by outsourcing, implies demand is on the path to normalization /recovery. Accenture’s guidance for high single digit to low double digit revenue growth in 2HFY21 (Mar-Aug’21) and 10-30bp EBIT margin expansion over FY20 is encouraging for Indian IT companies.

>> We see Accenture’s results and commentary as a mere reiteration of the adaptability and resilience of the business model. We continue to like Infosys/HCLT among Tier I and LTI/Mindtree among Tier II. 

8:47 AM

ALERT :: Antique Broking on Nifty Rejig

Expected flows, $ mn

SBI Life: 93

DIVIS Lab: 120

ONGC: 11

HDFC Life: 8

NHPC: 0

HDFC Bank: -33

INDUSIND Bank: -15

Powergrid: -10

Adani Ports: -3

ZEEL: -58

Infratel: -49

Assumed size:

Nifty: $14bn

Bank Nifty: $3bn

CPSE: $1.5bn