Indian Equity Market Update 02nd November 2017
Indian equity benchmarks paused after closing at record highs in the previous session as mild selling pressure in ITC, State Bank of India and Reliance Industries weighed on gains in the pharma shares.
The S&P BSE Sensex was little changed at 33,573 and the NSE Nifty 50 Index fell 0.16 percent to 10,424.
Ten out of 19 sector gauges compiled by BSE ended lower led by the S&P BSE Fast Moving Consumer Goods Index’s 0.9 percent drop. On the flipside, the S&P BSE Healthcare Index was the top sectoral gainer, up 2.5 percent.
Rain Industries: Shares of the Hyderabad-based cement and other related products maker rose as much as 10 percent to record high of Rs 287 after brokerage firm Motilal Oswal initiated coverage on the stock with a buy.
Motilal Oswal on Rain Industries
- Initiated ‘Buy’ rating with a price target of Rs 362; implying a potential upside of 33 percent from Wednesday’s close.
- Dual benefit of demand growth and supply shock driving CPC prices.
- Rain investing in high organic growth projects.
- Strong free cash flow generation to help deleverage its balance sheet.
- Expect Volume, Ebitda and net profit to grow at a compound annual growth rate of 4 percent, 24 percent and 50 percent over four year till December 2009.
- Rain has re-rated on visibility of margin expansion and growth.
- Although stock has run up sharply, the valuations are still reasonable.
- Bull Case target of Rs 615.
Cadila Healthcare Rises As Arm Gets U.S.FDA Nod For ADHD Drug
- Shares of the Ahmedabad-based drugmaker rose as much as 3.7 percent to Rs 515 after Zydus Pharma USA’s subsidiary Nesher Pharma got U.S. drug regulator’s nod for Dextoamphetamine Sulfate and Amphetamine Sulfate tablets, Cadila Healthcare said in a stock exchange filing.
- The drug is used to treat Attention Deficit Hyperactivity Disorder (ADHD) and as per the IMS data it has sales of $416.5 million.
Divi’s Labs Surges Most In 3 Months As U.S.FDA Lifts Import Ban
Shares of the Hyderabad-based drugmaker rose as much as 21 percent, the most since listing, to Rs 1,071.85, also its highest level in nearly one year, after the U.S. drug regulator lifted ban on its factory in Visakhapatnam.
U.S. FDA informed the drugmaker that it will be lifting the “Import Alert 66-40” and moving to close out the warning letter issued to the company’s Unit-II at Visakhapatnam, Divi’s said in a stock exchange filing.
What It Means For Divi’s Labs
- Divi’s can now supply all drugs to U.S. markets
- Larger products were exempted from the import alert given the drug supply situation
- U.S. currently contributed 33 percent of total sales; Unit 2 is 20 percent of U.S. sales
- Eliminates the downside risks on the earning
Technical Summary for 3rd November 2017
NSE NIFTY is long-term Bullish as the 144 days moving average of 9,730.02 is increasing. The Relative Strength Index is at 69.79 in the neutral territory. The Relative Momentum Index is at 78.56 in the overbought territory. An important indicator for Elliott waves, the Elliott oscillator is at 248.75, in positive territory; this is a bullish sign. An equally important indicator, the STORSI is at 81.58. This value is in the overbought territory.
Tomorrow’s projected High: 10,438.40, the projected Low:10,397.95. The top 21-day Bollinger band is at: 10,543.04 while the bottom 21-day Bollinger band is at: 9,891.11.
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