Morning Update: Real estate and oil and gas are trading in the green, while car, bank, capital goods, FMCG, and power names are selling. The NSE’s most active stocks include Reliance Industries, CDSL, Maruti Suzuki, M&M Financial, and HDFC Bank.
Sensex- gains +164 points at 63946
Nifty 50 gains + 50 points at 19095
Indian Market
FII AND DII
| FII Sold | 1,500.13Cr |
| DII purchased | 313.69 Cr |
Indian Market News
- The BSE Auto index fell 1.4 percent, led by M&M, Tata Motors, and Maruti Suzuki:
- The BSE Oil & Gas index increased 0.5 percent, led by BPCL, Adani Total Gas, and Reliance Industries:
- Asian markets are mainly lower; the Nikkei and the Straits Times are down.
- The dollar remains near 150 yen as central bank policy and a data flood await.
- Oil falls as concerns over a busy data week offset a lift from the Middle East fighting.
- Wall Street closes the earnings season mixed.
- Gold is hovering around the $2000 mark as the Middle East war drives the safety rush.
- Mahanagar Gas’s Q2 profit increased 106% year on year to Rs 338.5 crore due to lower natural gas costs.
- M&M Financial Services’ second-quarter profit fell 47.5% year on year to Rs 235 crore.
- Reliance Industries’ Q2 profit rises 29.7% year on year to Rs 19,878 crore, while its EBITDA margin widens by 390 basis points.
- The Sebi has extended the prohibition of certain commodity derivatives until December 2024.
Global Market Check
Gift Nifty
With a gain of 53 points, the GIFT Nifty suggests a slightly good start for the overall index. After peaking at 19,090 points, GIFT Nifty futures were trading at 19,081 points.
US Markets
US stock futures opened slightly higher ahead of a week filled with a Federal Reserve rate decision, jobs report, and Apple’s earnings report. S&P 500 futures added 0.3%, Nasdaq-100 futures gained 0.4%, and Dow Jones Industrial Average futures were up 0.1%. The S&P 500 fell into correction territory last week, losing 2.5 percent and dropping by 10.6% from its 2023 high. The Federal Reserve decision is expected to hold its benchmark interest rate at the same level, with surging interest rates being the main cause of the stock market correction. Traders expect the Fed to be done raising rates at least for 2023. The 10-year Treasury yield jumped above 5% last week but finished at 4.84 percent. The October jobs report is expected on Friday, with investors hoping for slowing labor market activity.
European Markets
European stocks closed lower on Friday due to earnings and the global economy’s state. The Stoxx 600 index ended down 0.8%, with most sectors and major bourses in negative territory. Healthcare stocks fell 2.9% to lead losses, while chemicals stocks climbed 0.8%. The pan-European index is heading for its worst monthly performance since Sept. 2022. Company results have caused significant movements in individual stocks, with NatWest plummeting up to 17% near the open before paring losses and ending the session down 11%. The UK’s Financial Conduct Authority found potential regulatory breaches in a banking account scandal.
Asian Markets
Asia-Pacific markets began the week lower due to key economic data from Japan and Malaysia, South Korea, Taiwan, and Hong Kong. Japan’s Nikkei 225 fell 0.96 percent, while the Topix lost 0.91%. South Korea’s Kospi dropped marginally, but the Kosdaq rose 0.54 percent. In Australia, the S&P/ASX 200 slipped 0.83 percent. Hong Kong’s Hang Seng index closed at 17,175, indicating a weaker open compared to the HSI’s close of 17,398.73. In the US, all three major indexes ended the day mixed, with the S&P 500 entering correction territory due to renewed selling on Wall Street. The Dow Jones Industrial Average fell 1.12 percent, while the S&P 500 slipped 0.48 percent. The Nasdaq Composite held 0.38 percent higher to 12,643.01, thanks to Amazon’s beating of analysts’ expectations for revenue and earnings in the third quarter.
Oil Prices
Oil prices dropped $1 a barrel on Monday due to investors’ caution ahead of the Fed policy meeting and China’s manufacturing data. Brent crude futures dropped 98 cents to $89.50 a barrel, while U.S. West Texas Intermediate crude was at $84.54 a barrel, down 1.2%. Investors are monitoring the Federal Reserve’s monetary policy meeting, US employment data, and Apple’s earnings for signs of economic slowdown impacting fuel demand. Brent and WTI ended 3% higher on Friday after Israel increased its ground incursions into Gaza, raising concerns about the conflict’s potential to widen in the region that accounts for a third of global oil production.
Dollar Index
The Dollar index traded 0.06 percent higher in futures at 106.58, whereas the value of one dollar hovered near Rs 83.41.
Gold Prices
Gold prices rose for a third consecutive week, driven by safe-haven demand amid Middle East tensions. Spot gold rose 0.5% to $1,993.69 per ounce and 0.7% for the week, while US gold futures settled 0.1% higher at $1,998.50. The market remains concerned about a Middle East conflagration, with gold holding most of its recent gains. Israeli forces carried out their largest Gaza ground attack in 20 days, causing safe-haven bullion to gain around 8%, or over $140, since the start of the war on October 7. Gold investors will also be monitoring the outlook for U.S. Treasury yields.
News updates
Primary market busy amid turmoil; Cello World, Mamaearth amid 7 IPOs to open this week
Six initial public offerings (IPOs) worth Rs 3,734 crore hit Dalal Street this week amid market turmoil in West Asia, US bond yields, and FII selling. Two companies also made their market debut. Equity benchmarks the Sensex and Nifty tanked 2.5 percent and are down 6% from their record highs. Cello World, a consumer product company, will launch its IPO on October 30. The Rs 1,900-crore issue, an offer for sale of shares by the Rathod family, closes on November 1 and has a price band of Rs 617-648 a share.
India Inc Top 10 suffer Rs 1.93-lakh-cr loss; TCS, HDFC Bank lead laggards
Last week, the top-10 most valued firms experienced a combined erosion of Rs 1,93,181.15 crore in market valuation, with Tata Consultancy Services (TCS) and HDFC Bank taking the biggest hit. The BSE benchmark tanked 1,614.82 points or 2.46 percent, with TCS’s market valuation dropping the most among the top-10 firms. HDFC Bank’s market capitalization fell to Rs 11,14,185.78 crore, while Reliance Industries Limited’s valuation dropped to Rs 15,32,595.88 crore. Infosys’ valuation tumbled to Rs 19,320.04 crore, while Bharti Airtel’s mcap fell to Rs 5,13,735.07 crore.
FPIs withdraw Rs 20,300 cr from equities in Oct; invest Rs 6,080 cr in debt
Foreign Portfolio Investors (FPIs) have withdrawn over Rs 20,300 crore from Indian equities in October due to a surge in US treasury yield and the uncertain environment caused by the Israel-Hamas conflict. However, FPIs have also invested Rs 6,080 crore in Indian debt during the period under review. The future of FPI flows depends on factors such as the US Federal Reserve’s November 2 meeting and global economic developments. FPIs are expected to remain cautious amid global uncertainty and increasing US interest rates, but India’s strong economic growth prospects should maintain its appeal for foreign investors in both equities and debt.
ESAF Small Finance Bank IPO to open on November 3, plans to raise Rs 463 crore
The ESAF Small Finance Bank IPO is set to open on November 3, with a target of raising Rs 463 crore. This is the third public issue in the coming week, following Cello World and Honasa Consumer. The anchor book will be opened on November 2, and the public issue will close on November 7. The offer includes a fresh issuance of shares worth Rs 390.7 crore by the company and an offer-for-sale (OFS) of Rs 72.3 crore shares by three shareholders. ESAF Financial Holdings will sell Rs 49.26 crore worth of shares via OFS, while PNB MetLife India Insurance Company and Bajaj Allianz Life Insurance Company will offload Rs 23.04 crore worth of stocks in the OFS.
IDFC First Bank Q2 Results: Net profit jumps 35% to Rs 751 crore
IDFC First Bank reported a 35% increase in net profit to Rs 751 crore for the July-September quarter of the 2023-24 financial year, compared to the previous year. The bank’s net interest income was Rs 3,950 crore, up 31% YoY and above the estimated Rs 3,923 crore. The lender’s net interest margin was 6.32 percent, compared to 5.83 percent in the previous quarter. Deposits increased by 44% YoY to Rs 1.64 lakh crore, while CASA deposits grew 26% to Rs 79,468 crore. However, the net profit was lower than Motilal Oswal’s estimate of Rs 785.7 crore.
Stock in News
Reliance Industries: The billionaire Mukesh Ambani-owned company reported a 29.7% year-over-year increase in consolidated profit in the September quarter, coming in at Rs 19,878 crore. To reach Rs 44,867 crore, EBITDA increased 30.2 percent YoY, and the margin increased by 390 basis points (bps) to 17.5 percent.A 1.2 percent increase in gross sales year over year to Rs 2,55,996 crore was fueled by the consumer businesses’ ongoing growth momentum.One tenth of a percentage point is equal to one basis point.
Union Bank of India: For the September quarter, the public sector lender recorded a 90% year-over-year increase in net profit of Rs 3,511 crore, driven primarily by a notable decline in provisions.With a net interest margin increase of 3 basis points at Rs 9,126 crore, net interest income increased by 10%.
SBI Card: In the September quarter of FY24, the credit card company reported a 15% year-over-year increase in profit, coming in at Rs 603 crore. Higher interest, fees, and commission income were the main drivers of the revenue rise of 24% YoY to Rs 4,087.4 crore.
Bharat Petroleum Corporation: Thanks in part to lower input costs, the state-owned oil marketing business reported a standalone profit of Rs 8,501.2 crore for the September quarter compared to a loss of Rs 304.2 crore in the same time last yearHowever, revenue dropped to Rs 1.02 lakh crore, a 10.3% decline.M&M Financial Services: As a result of a rise in financial instrument impairment, the financial services company’s earnings for the September quarter was Rs 235 crore, down 47.5 percent year over year.Revenue grew 24.1 percent to Rs 3,212 crore, aided by growth in asset book.
M&M Financial Services: As a result of a rise in financial instrument impairment, the financial services company’s earnings for the quarter that ended in September of FY24 dropped precipitously by 47.5 percent year over year to Rs 235 crore. Due in part to expansion in the asset book, revenue from operations increased by 24.1 percent year over year to Rs 3,212 crore over the same period. At Rs 1,674 crore, net interest income grew by 9% year over year. Higher borrowing rates combined with a shift in the portfolio mix in favour of better credit quality for customers had an influence on the net interest margin for the quarter, which came in at 6.5 percent. The amount disbursed in Q2 increased by 13% year over year to Rs 13,315 crore.
IDFC First Bank: The lender reported a staggering 35% year-over-year increase in profit for the July–September fiscal year of FY24, mostly due to a 35% increase in core operating income. With net interest income of Rs 3,950 crore for the quarter, it was 32% more than the same period last year. In Q2 FY24, net interest margin grew by 49 basis points year over year to 6.32 percent. Asset quality improved as the net non-performing assets (NPA) decreased by 2 bps to 0.68 percent for the quarter, while the gross non-performing assets (NPA) fell 6 bps QoQ to 2.11 percent.
Blue Dart Express: For the quarter that ended in September of FY24, the logistics company recorded a 22% year-over-year fall in consolidated profit of Rs 73.06 crore. Operating revenue for the same period decreased by 0.06 percent year over year to Rs 1,324.5 crore.
Inox Wind: Compared to the same period last year, the wind energy company’s net loss for the quarter ended in September FY24 was reduced to Rs 29.23 crore from Rs 129.31 crore. In Q2 FY24, revenue from operations jumped by 246 percent YoY to Rs 370.6 crore.
NTPC: The biggest electricity provider in the nation reported a stand-alone profit of Rs 3,885 crore for the quarter that ended in September of FY24, up 16.6% from the same time last year due to lower fuel and tax expenses. In Q2 FY24, revenue from operations fell by 0.3 percent to Rs 40,875 crore, compared to Rs 41,015 crore during the same period in FY23.
City Union Bank: Despite the difficulties encountered, the private sector lender reported that its profit for the quarter ended September FY24 climbed by 1.8% year over year to Rs 281 crore. This increase in profit was attributed to better recovery and fewer slippages. During the quarter, net interest revenue decreased by 5.3% YoY to Rs 538 crore, while deposits increased by 6% and advances by 3%. Asset quality improved in Q2 FY24, with net NPA lowering 17 basis points to 2.34 percent and gross NPA falling 25 basis points to 4.66 percent on a quarterly basis.
Dr Reddy’s Laboratories: The formulations manufacturing facility (FTO-3) located in Bachupally, Hyderabad, has successfully undergone a regular cGMP (good manufacturing practise) inspection by the US Food and Drug Administration (USFDA). The dates of the inspection were October 19 and 27, 2023. Ten observations on Form 483 have been released by the USFDA.
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