Indices end at record closing high; Nifty settles Oct expiry above 10,300

All that happened in the market today

10:49 AM

Gains from virtual currencies are taxable

 

While virtual currencies like Bitcoin are gaining popularity, there is still lack of clarity on how they should be taxed. Many buyers of cryptocurrencies, therefore, don’t pay tax on the gains they make on selling them. 

 

Software developer Pawan Bharti recently sold Bitcoin worth Rs 55,000 after his investment doubled in within three months. In the last week of July, one Bitcoin was around Rs 1.74 lakh. Recently, it has gone over Rs 3.85 lakh, an appreciation of over 121 per cent. The virtual currency, however, can be bought in smaller units. READ MORE

10:38 AM

Polaris Consulting zooms 20% on delisting plan; stock hits 16-year high

 

Polaris Consulting & Services was locked in upper circuit of 20% at Rs 291, hitting an over 16-year high, after  the company said its board will meet on October 31, 2017, to consider proposal of voluntary delisting of the equity shares. The stock of IT software products Company trading at its highest level since May, 2001.

 

“The board of directors of the company has been scheduled to meet on October 31, 2017, to consider proposal of voluntary delisting of the equity shares of the Company,” Polaris Consulting & Services said in a regulatory filing. READ MORE

10:25 AM

ITC gets future-ready as FMCG challenges grow

 

Diversified conglomerate ITC has a target to touch Rs 1 lakh crore by 2030 and it hopes to do this by riding the consumption boom in India. While the vision has  long been spelt by the management, challenges in execution remain. The pace of growth of the Rs 3 lakh crore fast moving consumer goods (FMCG) market is key. 

 

A combination of demonetisation in November 2016 and introduction of the goods and services tax (GST) in July has ensured that the rate of growth of the domestic FMCG market has slowed in the last few quarters. READ MORE

9:51 AM

Valuation gap between public sector and private banks narrows

 

The rally in public sector bank (PSB) stocks after the announcement of the government’s recapitalisation plan have narrowed their valuation gap with private sector banks. 

 

Earlier, a typical private bank was nearly four times as expensive as a PSB on average, the gap is now down to 3x. PSBs added Rs 1.19 lakh crore to their combined market capitalisation on Wednesday, taking it past their book value in 2016-17. In contrast, private banks saw a marginal dip in their market capitalisation, led by HDFC Bank.

 

PSBs are now trading at 1.15 times their book value or net worth per share during 2016-17 on average, up from a valuation multiple of 0.9x on Tuesday. In comparison, the private banks' valuation ratio declined marginally to 3.42x their book value from 3.45x. READ FULL REPORT HERE

9:41 AM

Earnings Impact: HUL

9:33 AM

Ahead of earnings: YES Bank

9:25 AM

Sectoral Trend

Source: NSE

9:21 AM

Nifty PSU Bank index extends gains

Source: NSE

9:20 AM

Top Sensex gainers and losers

Source: BSE

9:18 AM

Broader Markets

In broader markets, both BSE Midcap and BSE Smallcap indices were little changed

9:17 AM

Markets Open

Benchmark indices opened marginally lower following negative global cues ahead of October F&O expiry scheduled later in the day. 

At 9:17 am the S&P BSE Sensex was trading at 33,005, down 37 points while the broader Nifty50 index was ruling at 10,284, down 10 points

9:12 AM

Market view

 

The “Great Re-cap”, as it could possibly be remembered surprised the street positively. The finer details and whether the re-caps impact is neutral on the fiscal side are things which need to be evaluated. Having said that, the freeing up of credit in the PSU banking system is a positive. PSU banks were sitting on a huge pile of cash which was earlier parked in G Sec could now be better utilized toward a banks actual purpose i.e. borrow from savers and extend credit to industry. Further from a market participation perspective, this segment has been an underperformer. 

 

In fact, the weight of the banking and financial services sector in the Nifty index is around 37%, of which the share of the PSU bank segment had fallen to below 5%. Todays move will see this number moving up with the PSU banks taking the indices to new highs. Unfortunately, the same bump up did not happen to so many stocks, especially in the non-PSU BFSI stocks. This possibly was because of the money rotation from non-PSU stocks to PSU stocks, led by under ownership as well as undervaluation

 

(Source: Kunj Bansal - Executive Director & CIO – Equity , Centrum Wealth Management)

9:11 AM

Today's Picks: 26 October, 2017

 

State Bank of India 

Current price: Rs 325

Target price: Rs 315 

Keep a stop at Rs 329 and go short. Add to the position between Rs 318 and Rs 320. Book profits at Rs 315.

 

Larsen & Toubro 

Current price: Rs 1,204

Target price: Rs 1,225

Keep a stop at Rs 1,190 and go long. Add to the position between Rs 1,215 and Rs 1,220. Book profits at Rs 1,225.

Click here for more

9:09 AM

Edelweiss on HCL Tech

 

Despite tepid revenue growth, management is confident of meeting lower-end of 10.5-12.5% CC revenue growth guidance owing to robust bookings during H1FY18 and strong pipeline. The company continued its strong focus on Mode-3 services, extending its relationship with IBM and restructuring its joint venture (JV) with DXC into IP-partnership. 

 

With companies progressing to large IT-service providers from small boutique enterprises to scale up their digital journey, we remain confident on HCLT’s long-term growth prospects. Maintain ‘BUY’ with a revised target price of Rs 1,041 (Rs 1,058 earlier), as we marginally cut our revenue estimates to reflect weak Q2FY18. 

 

9:08 AM

Stocks which may see some volatility on expiry day

 

HDFC Bank: On the D-1, the stock has witnessed low rollovers of 59% into November. The near month OI of ~10.23mn shares is 6 days average daily volume in cash market. With futures trading at a discount to cash market, the counter has seen reverse arbitrage positions (sell cash and buy futures) during the month. There are open positions left in the SLBM segment as well. Roll levels have expanded from ~12bps to ~28bps (profit to short roller) in the last couple of days. Hence we expect long roll arbitrage positions to buy back the underlying in the VWAP. 

 

NTPC: Low rollovers of 34% have taken place on the D-1. With futures trading at a discount to cash, the counter has seen reverse arbitrage at the start of the series. Near month OI stands at ~20.5mn shares which is 3 days average daily volume in cash market. With roll level being a tad expensive at 47bps (profit to short roller), the stock is likely to see buying in the VWAP if rollovers don’t pick up. 

 

Vedanta: 43% rollovers have taken place and ~28mn shares are outstanding in the near month which is ~3 days average daily volume in cash market. Roll levels in the counter were ~18bps (profit to short rollers unadjusted to dividend). The company has a history of declaring dividends in November. With uncertainty surrounding the amount and possibility of higher payout, we believe long rollers would not risk forgoing the dividend and hence would convert the positions into cash tomorrow in the VWAP. 

 

GAIL: On the D-1, rollovers stand at 40% and ~16mn shares are outstanding in the near month which is ~2 days average daily volume in cash market. Roll levels in the counter were ~9bps (profit to short rollers). The counter offered opportunity to unwind cash and buy futures at the start of the series. Amidst low rollovers and the stock being part of Bharat22 ETF, we expect the long rollers to convert the positions to cash in VWAP.

(Source: Edelweiss)

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