Market Live: Nifty hits fresh record high, Sensex bounces back; banks lead

11:53 am Market Check: Equity benchmarks recouped early losses, with the Nifty hitting a fresh record high of 10,251.85 amid volatility.

The 30-share BSE Sensex was up 16.63 points at 32,650.27 and the 50-share NSE Nifty rose 12.80 points to 10,243.70. Nifty Bank gained 60 points, backed by Yes Bank, Federal Bank, PNB, Bank of Baroda, Canara Bank, Axis Bank, SBI and ICICI Bank.

The BSE Midcap index was up 0.3 percent and Smallcap rose 0.5 percent. About 1,282 shares advanced against 1,037 declining shares on the BSE.

11:46 am Foreign Reserves: India’s foreign reserves, which touched a record USD 402.5 billion in September, are high enough to cushion the country against the external vulnerabilities, the Development Bank of Singapore (DBS) said today.

The import cover (on total reserves minus gold) is better than what is seen during the 2013 taper tantrum, said DBS in its report on Indian economy.

Taper tantrum is the term used to refer to the 2013 surge in the US Treasury yields, which resulted from the Federal Reserve’s use of tapering to gradually reduce the amount of money it was feeding into the economy. It had sent the rupee reeling.

The record high reserve of USD 402.5 billion in September 2017 is a long way since reserves bottomed out at USD 275 billion in August 2013, at the worst point of the Fed taper tantrum, it pointed out.

11:35 am Buzzing: Shares of Aurobindo Pharma rose 2 percent intraday as the company has received final approval to manufacture Esomeprazole Magnesium Delayed-release capsules.

The company has received final approval from the US Food & Drug Administration (USFDA) to manufacture Esomeprazole Magnesium Delayed-Release Capsules OTC, 20mg.

Esomeprazole Magnesium Delayed-Release Capsules OTC is a therapeutic equivalent generic version of AstraZeneca’s Nexium 24HR capsules.

Nexium 24HR capsules are indicated to treat frequent heartburn and the product will be launched immediately.

11:22 am Listing: Non-banking finance company MAS Financial Services is set to debut on exchanges on October 18. The issue price is fixed at higher end of price band of Rs 456-459 per share.

Analysts expect the stock to list with a premium of Rs 150-200, given the strong subscription to the issue and strong financials of the company.

The Rs 460-crore initial share sale offer had received overwhelming response from investors as it was oversubscribed 128.39 times on last Tuesday.

11:18 am Buzzing: Share price of Hatsun Agro Products added nearly 4 percent intraday on the back of robust September quarter (Q2FY18) numbers.

The company has reported 17 percent jump in its Q2 net profit at Rs 38.21 crore against Rs 32.56 crore, in the same quarter last fiscal.

Revenue was up 6 percent at Rs 1066 crore versus Rs 1001 crore. The company’s Earnings before interest, tax, depreciation and amortization (EBITDA) was up 16 percent at Rs 105.6 crore and margins was up at 9.9 percent.

The company has invested Rs 60 crore to expand its cattle feed production plant in Tamil Nadu.

11:10 am Jio Results Analysis: Analysts were closely watching out for two key data points in Reliance Industries September earnings. One was the gross refining margin and the other was the losses in its telecom subsidiary Jio.

The company met market expectations on refining margins but positively surprised the market by posting a profit at the earnings before interest and tax (EBIT) level in its telecom operations. Since its launch in September 2016, it was for the first time that Jio’s financial numbers were made public.

Jio, a late entrant in the telecom space, took the sector by storm with tariff rates way below competition. The aggressive pricing helped the company build a customer base of 138.6 million users within a year.

Surprisingly, despite the aggressive pricing, Reliance has been able to post average revenue per user (ARPU) of Rs 156.4 as compared to Rs 154 of market leader Bharti Airtel. The management is confident of improving its ARPU further, which will help the company report profits sooner than most analysts expect.

For the September quarter, Jio reported revenues of Rs 6,147 crore and a marginal loss of Rs 270.59 crore. The company posted an operating profit of Rs 1,443 crore at an operating margin of 23.5 percent.

11:00 am Gold Options Trading: Finance Minister Arun Jaitley today launched gold options trading on the leading commodity bourse MCX and said this is one of the steps towards formalising trade in the yellow metal.

Options are derivatives which give a buyer the right but not the obligation to buy or sell an underlying asset or instrument at a specific price on or before a certain date.

“This marks a very important evolution in trading of yellow metal itself. It hedges all risks by giving them (traders) the option of futures,” Jaitley said after launching the options trade on the auspicious day of Dhanteras today.

The gold options contract launched today allows trading in 1kg gold.

10:52 am Prime Focus in action: Motilal Oswal has initiated coverage with a buy rating on Prime Focus and expects the stock to rally by 46 percent to Rs 130 per share, citing better growth ahead and likely reduction in debt.

The stock price was locked at 20 percent upper circuit at Rs 106.95 on Tuesday.

Prime Focus has turned into a strong media service player globally, offering visual effects, 3D animation and media-focused ERP solutions in India and abroad.

The company turned profitable in FY17 post completion of M&A integration in FY15-16.

According to the brokerage house, the four M&A transactions in the last five years have allowed Prime Focus to become a strong media service player globally.

The company’s position as one of the top-4 Hollywood VFX service providers and a steady order book should drive 15/18 percent revenue/EBITDA CAGR over FY17-20, it feels.

Motilal Oswal noted that the demons of around 2.8x jump in net debt to Rs 1,390 crore and 50 percent equity dilution over the last five years are now behind.

Improving EBITDA and lower capex requirement are expected to help generate healthy free cash flow, improve return on invested capital to 19 percent, and reduce net debt by around 68 percent to Rs 450 crore by FY20, the research house said.

10:38 am Buzzing: Shares of Godawari Power & Ispat has locked at 5 percent upper circuit on Tuesday as it has received additional coal linkage from Coal India.

The company has been awarded additional 28,700 metric tonnes of long-term coal linkage in the coal linkage auction concluded on October 16, 2017 by Coal India to be used in the company’s sponge iron unit.

The total coal linkage now aggregates to 5,13,400 metric tonnes with this additional quantity of coal linkage awarded to the company.

Recently the company has been awarded 52,400 metric tonnes of long-term coal linkage for its Sponge Iron Unit and also got 1,20,400 metric tonnes of coal linkage for its Gassifier unit and 13,900 metric tonnes of coal linkage for its biomass power plant.

10:29 am Rupee Update: The rupee dropped by 15 paise to 64.89 against the US currency today, breaking its six-day winning streak.

A spurt in dollar demand from importers amid sustained foreign fund outflows weighed on the rupee.

Dealers said the dollar’s gains against some other currencies overseas also impacted the domestic currency.

Yesterday, the rupee had ended at more than three-week high of 64.74 a dollar, surging by 19 paise helped by extremely bullish macro indicators.

10:20 am Market Check: Equity benchmarks continued to consolidate after the rally in previous three consecutive sessions.

The 30-share BSE Sensex was down 67.46 points at 32,566.18 and the 50-share NSE Nifty fell 12.90 points to 10,218.

The broader markets outperformed benchmarks, with the BSE Midcap and Smallcap indices rising 0.3 percent each. About 1,093 shares advanced against 903 declining shares on the BSE.

10:12 am SEBI Approval: HDFC Standard Life Insurance Company has received capital markets regulator Securities and Exchange Board of India (SEBI)’s go ahead to raise an estimated Rs 7,500 crore through an initial public offering.

The insurance firm had filed draft papers with SEBI in August and obtained its “observations” on October 13, which is very necessary for any company to launch public offer, latest update with the markets watchdog showed.

The public issue comprises sale of 1,91,246,050 equity shares, amounting to 9.55 percent stake, by HDFC Ltd and up to 1,08,581,768 scrips, or 5.42 percent, holding by Standard Life Mauritius, according to the draft red herring prospectus (DRHP) filed with Sebi.

Currently, HDFC owns 61.41 percent stake in HDFC Standard Life and Standard Life has about 34.86 percent, while the remaining is with employees and PremjiInvest.

9:59 am IPO: Mahindra Group’s logistics arm has received the go-ahead from markets regulator Sebi to garner about Rs 700 crore through an initial share-sale offering.

Mahindra Logistics had filed its draft red herring prospectus with Sebi on August 4 and obtained “observations” on October 6, which is very important for any company to float a public offer, as per the latest update with Sebi.

The public issue of Mahindra Logistics comprises sale of 1,93,32,346 equity shares. This includes the sale of 96,66,173 shares, amounting to 13.74 percent stake, by the parent firm Mahindra and Mahindra Ltd.

Besides, Normandy Holdings would sell 92,71,180 shares, while Kedara Capital would offload 3,94,993 scrips.

Normandy Holdings is a 100 percent subsidiary of Kedaara Capital.

9:50 am Direct US-North Korea talks? The United States is not ruling out the eventual possibility of direct talks with North Korea, Deputy Secretary of State John J. Sullivan said on Tuesday, hours after Pyongyang warned nuclear war might break out at any moment.

Talks between the adversaries have long been urged by China in particular, but Washington and its ally Japan have been reluctant to sit down at the table while Pyongyang while it continues to pursue a goal of developing a nuclear-tipped missile capable of hitting the United States.

“Eventually, we don’t rule out the possibility of course of direct talks,” Sullivan said in Tokyo after talks with his Japanese counterpart.

“Our focus is on diplomacy to solve this problem that is presented by the DPRK. We must, however, with our allies, Japan and South Korea and elsewhere, be prepared for the worst should diplomacy fail,” he said.

9:33 am Capex: Sajjan Jindal-controlled, JSW Cement said it is investing around Rs 1,800 crore towards expansion of cement capacity to 20 million tonnes (MT) and looking at initial public offer (IPO) in 2019-20.

“We expect huge demand for cement in the country and plan to expand our cement manufacturing capacity from 12.5 MT to 20 MT by 2020. We are adding 4.5 MT at our Dolvi unit in Maharashtra and 1.2 MT in Vijaynagar unit in Karnataka, apart from 1.2 MT adding in Odisha unit. We will incur capex of around Rs 1,800 crore for capacity expansion over the next three years period,” JSW Cement managing director Parth Jindal told PTI.

“We will come out with IPO in 2019-20 by diluting 15-20 percent stake, depending on price band. We will wait for the outcome of general elections in 2019 and create healthy EBITDA profile before launching our IPO,” Jindal said.

Post-IPO, according to Jindal, the company will be targeting at reaching 30 MT capacity by 2025 and 50 MT by 2030, both through organic and inorganic growth.

Despite JSW Cement is one of the recent entrants into the cement market, it is aiming to be in top-5 cement players in India in the next 7-8 years, Jindal added.

9:25 am Tata Steel ruled out on Monday a flotation in the next two to three years of the planned merger of its European steel operations with those of ThyssenKrupp.

T.V. Narendran, Tata’s managing director for India and South East Asia, told Reuters that the capacity of Tata’s Kalinganagar plant in India would like be expanded to 5 million tonnes.

9:20 am Buzzing: Share price of Jaiprakash Power Ventures has locked at 10 percent upper circuit, testing 52-week high of Rs 8.80 Tuesday as it has received non-binding bids for acquisition of equity stake in the company.

There were five bidders who put in non-binding bids for 35 percent equity stake in Jaiprakash Power.

Brookfield Asset Management, India Power Corporation, Resurgent Power, a joint venture between Tata Power and ICICI Ventures, JSW Energy in partnership with Piramal and Bain Capital assets have bid for about 35 percent equity stake in Jaiprakash Power’s assets, one of the persons directly involved with the development said.

Additionally, Edelweiss Asset Reconstruction Company (ARC) too is in the race and has bid for the debt of the sustainable portion of the company

9:15 am Market Check: Equity benchmarks opened mildly lower on profit booking Tuesday after the rally in three consecutive sessions.

The 30-share BSE Sensex was down 33.86 points at 32,599.78 and the 50-share NSE Nifty fell 15.10 points to 10,215.80.

Axis Bank, Reliance Industries, GAIL, Bajaj Auto, Yes Bank, IOC and Bharti Airtel were early gainers while Wipro, Bajaj Finance and BPCL were losers.

DCB Bank, JM Financial and Colgate were down 1.5-2.5 percent.
Persistent Systems, Federal Bank, Delta Corp, Radico Khaitan, DHFL, Prime Focus, Aries Agro, Jaiprakash Power and Jaiprakash Associates gained up to 20 percent.