Live: Nifty Futures Decline Over 1%; L&T, Services PMI In Focus

Rupee is likely to stay under pressure as a stronger dollar and higher oil prices weighs on the sentiment.

The implied opening from forwards suggests spot rupee may start trading around 73.8758 having ended at 73.3425 on Wednesday and after falling as much as 73.4150, an all-time low for the pair.

In a bid to ease pressure on the currency, the central bank last evening tweaked overseas borrowing norms for oil companies. The RBI also waived off mandatory hedging requirements on the borrowings. The move is unlikely to be of much help given the tighter global conditions isn't seeing many companies go abroad to raise foreign currency.

In the bond market, the yield on benchmark 10-year bonds rose 12 basis points on Wednesday, the most since Sept. 10, to 8.11 percent.

Bonds are likely to come under pressure after U.S. Treasury yields jumped by most in more than a year with the 10-year rising to its highest level since 2011.

The RBI's MPC meets for a second day today and is likely to raise rates tomorrow by 25 basis points when it announces its rate decision. It will be the third straight rate hike by the RBI which will take the repo rate to 6.75 percent.

Brokerages On Shriram Transport

UBS

• Maintained ‘Buy’ with a price target of Rs 1,550, implying a potential upside of 44 percent from the last regular trade.
• Termination of SVL guarantee key positive.
• Recent liquidity crisis to hurt growth in the third quarter but long-term impact limited.
• Preferred pick among NBFCs; Expect re-rating driven by strong EPS growth.

Credit Suisse

• Maintained ‘Neutral’ with a price target of Rs 1,250, implying a potential upside of 16 percent from the last regular trade.
• Termination of corporate guarantee takes away significant overhang on the stock.
• Remain watchful of corporate actions at the group level.
• Fares reasonably well on our ALM framework and should command reasonable pricing power.

Goldman Sachs on Adani Ports

• Maintained ‘Buy’; cut price target to Rs 414 from Rs 455, implying a potential upside of 26 percent from the last regular trade.
• Concerns: weaker rupee, potential slowdown in cargo due to trade wars and rising bond yields in India.
• Impact of the rupee depreciation significant on P&L, but no significant impact on cash flow.
• Expect second quarter to see Rs 400 crore of foreign exchange losses.

Edelweiss on SAIL

• Upgraded to ‘Buy’ from ‘Reduce’; hiked price target to Rs 87 from Rs 70, implying a potential upside of 27 percent from the last regular trade.
• Completion of modernisation and expansion plan aids profitability.
• Cost concerns receding and under control.
• SAIL is turnaround story with FY18–20 Ebitda CAGR of 35 percent.

Deutsche Bank on Indian Metals

• Depreciating rupee supports Indian steel producers' margins.
• Weaker rupee allowed steel producers to take price hikes.
• Major HRC steel producers increased prices by 2-3 percent for October 2018.
• JSW Steel is preferred pick in the sector.

Nomura on Alunorte Shutdown

• Reduced demand from Alunorte a key contributing factor in recent caustic softness.
• Shutdown further reduces U.S. export demand, likely pressuring domestic pricing.
• Shutdown implies downside risk to current caustic price forecast.

Deutsche Bank on City Gas Companies

• City Gas companies pass on increase in input gas price hike.
• Expect recent price hikes to be margin accretive for IGL and Gujarat Gas.
• IGL and Gujarat Gas trading at attractive valuations.

• Nifty October futures ended at 10,893, with a premium of 35 points.
• Nifty October open interest up 4.8 percent; Nifty Bank October open interest up 2 percent.
• Maximum open interest for October series call at 11,200 strike price call option (open interest at 28.3 lakh shares).
• Maximum open interest for October series put at 10,500 strike price put option (open interest at 37.6 lakh shares).

Insider Trades

• Apollo Tyres promoter Classic Auto Tubes acquired 2.5 lakh shares on Sept. 28.
• Shakti Pumps promoter group acquired 20,000 shares on Oct. 1.
• Welspun Enterprises promoters acquired 4 lakh shares from Sept. 28-Oct. 1.
• Lemon Tree Hotels promoter acquired 1.25 lakh shares from Sept. 28-Oct. 1.

(As reported on Oct. 3)

Trading Tweaks

• IL&FS Investment Managers price band revised to 5 percent.
• Hindusthan National Glass & Industries price band revised to 5 percent.
• JMC Projects ex-date for stock split to Rs 2 from Rs 10 per share.

Who’s Meeting Whom

• Thyrocare Technologies to meet Sundaram Mutual Fund on Oct. 5.
• Lumax Auto Technologies to meet investors on Oct. 4.
• Finolex Industries to meet Capital World on Oct. 4.