Market Live: Sensex up 100 pts, Nifty above 9950; Dr Reddy’s Labs spikes 9%
11:55 am Settlement for drug: Dr Reddy’s Laboratories shares rallied more than 9 percent intraday after settlement agreement with US-based Vivus to resolve a long-pending patent litigation related to anti-obesity pill (or weight management capsules) Qsymia.
The settlement agreement permits the company to begin selling a generic version of Qsymia on June 1, 2025, or earlier under certain circumstances. In the event of a launch earlier than June 1, 2025, Vivus will receive a royalty on sales of the generic version of Qsymia.
Qysmia is a combination of phentermine and topiramate extended-release sold in capsule form. The drug is used to manage chronic overweight in adults with obesity symptoms.
The drug has gross sales of around USD 73.6 million in 2016.
11:47 am Buzzing: Share price of Rane Holdings gained nearly 10 percent intraday on strong numbers and acquisition of majority stake in Bengaluru based company.
The company has registered 89 percent increase in its Q1FY18 net profit at Rs 35.98 crore as compared to Rs 19 Crore in the same quarter last year.
The operating profit (EBITDA) was at Rs 52.02 crore and EBITDA margin was at 10.6 percent.
The company board has approved the acquisition of 70 percent shareholding in Bangaluru-based Telematics4U Services.
11:43 am Market Outlook: A day after the government reported lower-than-anticipated gross domestic product (GDP) figures, the market seems to have taken it in its stride and was trading in the green.
This stance by investors could be due to their belief in structural reforms being carried out in the country, Edelweiss Securities explained.
“Potential of the economy growing at 8-9 percent, inflation going down, other markets not giving good returns is all making the market ignore short-term pain. Plus, domestically, money is coming in from investors in terms of financial assets,” Vikas Khemani, President and CEO, Edelweiss Securities, said in an interview to CNBC-TV18. Moreover, the market will remain solid on a sustainable path, with minor corrections, he added.
Speaking on the GDP data, Khemani said that GST, RERA and demonetisation had a short-term impact on the economy. Having said that, we are in the middle of transformative phase and the GDP should be back to normalcy over the next couple of quarters, he added.
Based on these, the market will also remain strong, backed by strong domestic inflows, he said, adding that this is just the beginning of the trend and household savings could move more towards financial assets.
11:30 am Crude oil falls: US crude futures fell in Asian trading, partly reversing sharp gains from the previous session, amid ongoing turmoil in the oil industry with nearly a quarter of US refining capacity offline.
US West Texas Intermediate (WTI) was down 0.64 percent at USD 46.93 per barrel. The contract rebounded 2.8 percent on Thursday but is still heading for a weekly decline of 1.9 percent.
The new Brent contract for November delivery was down 0.26 percent at USD 52.72 barrel. The contract for October delivery, which ended trading on Thursday, closed up 2.99 percent, at USD 52.38 a barrel.
11:15 am Auto sales: Ashok Leyland has reported healthy sales growth in August, the second month for goods & services tax that implemented from July 1.
The country’s second largest commercial vehicle maker sold 13,634 units in month gone by, a growth of 25 percent compared with 10,897 units sold in same month last year.
Sales data was much ahead of estimates. A CNBC-TV18 poll estimated sales at 12,000 units for the month.
Medium and heavy commercial vehicle sales grew by 29 percent year-on-year to 10,567 units and light commercial vehicle sales increased 14 percent to 3,067 units in August.
11:00 am Buzzing: Share price of Shankara Building Products touched 52-week high of Rs 1,254.10, gaining 6 percent intraday Friday as it has started its new processing facility and relocates one of its existing facility.
The company has started new processing facility in Secunderabad in the state of Telangana to capitalise on the growing requirements of the region through its network of Telangana state retail outlets.
Centurywells Roofing India, a step-down subsidiary of company, has started a new colour coated roofing sheet processing facility at Secunderabad.
Taurus Value Steel & Strips, a wholly owned subsidiary of company, has relocated its processing unit from Surat to Chegunta, Hyderabad.
The installed capacity of this unit is around 800 MT per month.
The relocation will help improve capacity utilization of the facility due to increased availability of raw materials which was hampering growth in Surat.
10:47 am Manufacturing PMI: India’s factory activity unexpectedly expanded in August, snapping back from a contraction the previous month, as disruptions stemming from confusion over a new national sales tax eased, a business survey showed on Friday.
The rebound suggests that India’s economic growth rate, which unexpectedly slipped to three-year low of 5.7 percent in the April-June quarter from a year ago, may also improve in the current quarter.
The Nikkei/Markit Manufacturing Purchasing Managers’ Index rose more than three points to 51.2 in August from 47.9 in July, beating the median economist forecast of 49.3 in a Reuters poll. A reading above 50 indicates expansion.
That was the biggest one-month jump in 5-1/2 years.
10:35 am Buzzing: Shares of Sadbhav Engineering advanced 4.6 percent intraday as it has declared lower bidder by government of Gujarat.
The company has been declared the successful bidder (L1) in respect of the bid invited by road & building department, government of Gujarat for the two projects on EPC Mode for aggregating value of Rs 900 crore.
The projects include, upgradation to 6 lane with paved shoulders of Sayla-Bamanbore section of NH 8A on EPC mode in the state of Gujarat.
The other project includes, upgradation to 6 lane with paved shoulders of Bagodara-Limbdi section of NH 8A.
Both the above projects are part of 215 kms long stretch between Ahmedabad and Rajkot.
10:20 am Auto sales: Maruti Suzuki India recorded healthy growth of 23.8 percent in August by selling 1.63 lakh shares compared with 1.32 lakh units sold in same month last year.
The growth was largely driven by passenger vehicles sales that grew by a whopping 28.4 percent to 1.16 lakh units in month gone by.
Total sales numbers were ahead of a CNBC-TV18 poll that estimated at 1.58 lakh units for the month.
Passenger vehicles also boosted domestic sales growth that was 26.2 percent at 1.52 lakh units against 1.19 lakh units sold in corresponding month of previous year.
10:11 am Chart of the Day: Earnings growth could rise into double digits from the September-2017 quarter onwards, CLSA said in a strategy report.
10:00 am New listing: Aditya Birla Capital listed at Rs 237.50 on the National Stock Exchange, which was 5 percent lower compared with pre-opening price of Rs 250.
In fact, the stock is locked at 5 percent lower circuit amid heavy volumes.
Grasim Industries gained 1.6 percent while Aditya Birla Money fell nearly 4 percent.
9:59 am Market Check: Equity benchmarks extended gains in morning trade as the 30-share BSE Sensex was up 127.20 points at 31,857.69.
The 50-share NSE Nifty reclaimed 9,950, up 37.40 points at 9,955.30.
About 1,325 shares advanced against 426 advancing shares on the BSE.
9:53 am Experts’ take on GDP: Sonal Varma of Nomura said given the lower Q2 print, the research house is revising full-year forecast to 6.7 percent in 2017 versus 6.9 percent earlier, before it accelerates to 7.8 percent in 2018.
Even as headline GDP data has disappointed, the turnaround in private services suggests that the growth cycle will head higher once the GST effects fade, she added.
From the RBI’s perspective, the GDP data is disappointing, but the current slowdown is largely due to GST, which should be seen as transitory, she feels.
According to her, focus remains on inflation, which is on an upward trajectory.
“Given our view that both growth and inflation are headed higher in the next 6-9 months, we expect the RBI to stay on hold,” Verma said.
9:50 am Pre-opening for new entrant: Aditya Birla Capital settled at Rs 250 per share in pre-opening on NSE.
9:45 am New entrant: Aditya Birla Capital will list on bourses today.
Aditya Birla Capital is the demerged company from Grasim which holds controlling stake in financial services businesses of the group. The demerger and listing of financial services business under one umbrella was part of the group restructuring exercise and was aimed at unlocking value for shareholders.
“Quality company with controlling stake in Aditya Birla group’s asset management, insurance and lending businesses is good investment opportunity for long term investors,” Sharekhan said.
9:40 am FII View: Sakthi Siva of Credit Suisse said the four most overvalued markets on price-to-book value versus return on equity valuation model are India, Indonesia, Philippines and Malaysia.
While historically markets tend to be overvalued because of investors’ perception of structural growth and therefore the ability to deliver on earnings but all four are associated with downgrades to 2017 estimated consensus EPS in August, she added.
“While we have previously highlighted three years of cuts to 2017 expected consensus EPS for India, we highlight that EPS cuts in August are not one-off for the other three as well. We re-iterate underweight on the ‘Expensive 4’ club,” Siva said.
9:29 am Buzzing: Shares of Welspun Enterprises rose more than 6 percent in the early trade on the back of letter of award from National Highways Authority of India.
“The company has received letter of award from National Highways Authority of India (NHAI) for the six-laning of Aunta-Simaria section of NH-31 in the state of Bihar on hybrid annuity model (HAM), as per company release.
“The company will develop the project stretch of 8.15 km at a bid project cost of Rs 1161 crore, and shall receive Rs 9.90 crore / year as O&M payments along with the annuity and interest thereon from NHAI for a period of 15 years post-construction.”
With the award of this project, the company has built a portfolio of four HAM projects totalling to Rs 4,129 crore.
9:15 am Market Check: The NSE Nifty started off September series on a flat note on Friday but the broader markets outperformed, rising half a percent.
The 30-share BSE Sensex was up 25.19 points at 31,755.68 and the 50-share NSE Nifty rose 6.2 points to 9,924.10.
Bajaj Auto gained 2 percent on August sales data. Dr Reddy’s Labs surges 6.5 percent on settlement for drug.
TCS, HCL Technologies, HDFC, NTPC, ITC and HUL were under pressure.
Nifty Midcap was up 0.5 percent as about four shares advanced for every share falling on the NSE.
Sun TV Network, Welspun Enterprises, Manappuram Finance, Reliance Capital, Nalco, Hindustan Zinc, IRB Infrastructure, BEML, Grasim Industries, Chennai Petroleum and Strides gained up to 5 percent. Infibeam, Petronet LNG and Just Dial fell 1-3 percent.