Sensex, Nifty End Little Changed, But Post Third Weekly Gains

Indian shares closed little changed but gained for the third straight week led by a rally in bank stocks as some investors assessed that the impact of the demonetisation will be limited on the lenders.

The S&P BSE Sensex ended the little changed at 27,238 but advanced 1.9 percent for the week. While the NSE Nifty rose nearly 1.9 percent for the week, the 50-share index failed to hold on to the 8,450-mark.

Both the indices, which had risen over 0.7 percent in opening trades, pared gains after the country’s second largest software exporter reduced its full-year sales guidance.

The market breadth too wasn’t encouraging with sellers getting the upper hand. About 846 stocks declined, 618 advanced and 64 remained unchanged on the NSE.

IL&FS Engineering Gains On High Volumes

• Stock gained as much as 12 percent and now its currently trading 8 percent higher
• Volumes are over 12 times its 20-day average
• Share prices crossed its 100 and 200 day moving average

India’s diamond cutters, who polish 14 of every 15 of the world’s gems, are betting on Donald Trump to sustain the expansion of their biggest market in the U.S., even as Asian buying of luxury stones falters.

India expects to export 10 percent to 15 percent more polished diamonds to the U.S. in the year beginning April, growth similar to that seen in 2016, on the belief that a Trump presidency will reinvigorate the world’s largest economy, according to Praveen Shankar Pandya, chairman of the government-sponsored Gem & Jewellery Export Promotion Council.

Read the full report HERE

The budget carrier placed an order for 205 Boeing planes worth a whopping $22 billion. The deal will be the biggest expansion plan by the Indian carrier that is seeking to claw back market share from leader IndiGo.

The deal, which includes 100 firm 737 Max 8 jets, builds on an existing order for 55 aircrafts, SpiceJet said in a statement. The airline also has the option to buy 50 more, including widebodies. The order is the largest ever placed by an Indian airline for Boeing aircraft.

Shares of the low cost airline gained 3.2 percent to Rs 65.9. It has gained 17.3 percent in the last 12 days.

Ester Industries Rallies On High Volumes

• Rallies as much as 12 percent today
• Has run up 31 percent so far in 2017
• Volumes at 15.9 times previous 20-day average
• Manufactures polyester films, specialty polymers and engineering plastics.
• Market Cap: Rs 415 crore

Shares of the franchisee operator for fast-food chain McDonald in southern and western India rose as much as 10.6 percent to Rs 186.

• Biggest intraday jump since November 25 of last year.
• Trading volume risen 3.2 times its 30-day average.
• Brokerage house Anand Rathi upgraded the stock to ‘Buy” from earlier “Sell” with a price target of Rs 210, according to Bloomberg.
• Stock down around 22 percent over past year, compared to 10 percent gain on the Sensex.

Lumax Industries Snaps 4-Day Winning Streak

• Snapped its 4-day winning streak, and fell as much as 6.4 percent.
• Gained 30 percent over the last 4 days.
• The stock is still in the overbought zone with RSI above 70
• Automobile light manufacturing company with a market cap of Rs 950 crore

Movers & Shakers: Delta Corp, TCS, SpiceJet And More

Infosys CEO Vishal Sikka is hoping U.S. President-elect Donald Trump’s policies will be business and innovation “friendly”. Answering a question put forth by BloombergQuint’s Sajeet Manghat, Sikka said he will be in “wait and watch” mode on Trump.

A bill being proposed in U.S. Congress aimed at limiting the outsourcing of jobs and reform the country’s high-skilled immigration program is weighing on Indian IT consulting and software stocks.

The visa programme has become a hot-button issue in the U.S. because of concerns it is used to replace American workers with lower cost employees from abroad.

Infosys CEO Vishal Sikka said the software major has crossed the milestone of $10 billion in sales in 2016. He said the tech major managed a good performance in the third quarter despite facing seasonal headwinds and one-time impact of the failed RBS deal.

Infosys had to ramp-down about 3,000 jobs following the U.K. lender's decision to cancel the project to set up a separate bank in the country. While Infosys has not specified the impact of the cancellation, market analysts peg it at around $40 million, according to a PTI report.

Sikka said downward driving pricing pressure is here to stay. However, he added that customer satisfaction has increased significantly—highest in since survey’s inception 12 years ago—in third quarter.

Sikka also spoke about the growing importance of artificial intelligence to improve operational efficiency. “This will be something that will be crucial to Infosys’ future,” he said.

Both the Sensex and the Nifty have pared most their opening gains after Infosys reduced its full-year sales guidance. The 50-share index slipped below 8,400-mark as the market breadth turned in favour of the bears. About 812 stocks declined, 655 advanced and 425 remained unchanged.

The rupee weakened 11 paise to 68.19 against the U.S. dollar in early trade on fresh demand for the American currency from banks and importers despite positive macro economic data.

According the government data released yesterday, industrial production in November grew by 5.7 percent compared to a contraction of 3.4 percent in the same month a year ago.

While retail inflation remained subdued at multi-year low of 3.41 per cent in December.

Dealers attributed the rupee's fall to increased demand for the American unit from importers but the dollar's weakness against some other currencies overseas and a higher opening of the domestic equity market capped the fall.

Yesterday, the rupee had staged a spectacular recovery against the dollar by surging 24 paise to end at one-week high of 68.08.

PTI

Shares of the country’s second largest software services provider gained as much as 4.5 percent to Rs 1,018 after reporting third quarter earnings that beat street estimates. However, the stock soon pared all of its gains, and declined 0.9 percent after the company said it has reduced its sales guidance.

The company posted a net income of Rs 3,710 crore in the three-month period ending December, compared with Rs 3,560 crore average of estimates compiled by Bloomberg.

Infosys cut its revenue guidance in dollar terms to 7.2-7.6 percent as compared to 7.5-8.5 percent earlier. Similarly, the upper band for revenue guidance in constant currency terms has also been lowered from 9 percent to 8.8 percent.

Catch a full detailed report on Infosys third quarter earnings HERE

Indian shares climbed for a fourth straight session as some investors assessed that the adverse impact of the demonetisation on corporate earnings may be limited.

The S&P BSE Sensex gained 0.8 percent to 27,459 while the NSE Nifty advanced 0.6 percent to 8,461. Both the indices are hovering near their two-month highs. The market breadth was skewed in favour of the buyers with 897 stocks advancing, 506 declining and 459 remaining unchanged.

• Force Motors: Says issued commercial papers for 2b rupees
• Hathway Cable: Withdraws plan to merge some units & demerge broadband business; Approve converting Cable TV to unit
• JSW Energy: To consider raising of long term funds Jan. 23
• NTPC: Sign memorandum of understanding with Rajasthan Urja and Rajasthan Rajya Vidyut to buy Chhabra Thermal Power plant stage-I,-II
• Tata Consultancy: Q3 net income rose around 11 percent to Rs 6,780 crore YoY, beats estimate of Rs 6,500 crore
• Vedanta: Proposes to acquire 47.8 million shares of Cairn India

For a complete list of stocks to watch, click HERE

• The 53-year old chief operating officer of Asia’s largest software services provider will be the first non-shareholder and a truly non-family person to chair the group.

• TCS CFO Gopinathan will replace Chandrasekaran at TCS

• China December exports rise 0.6 percent YoY in yuan terms; estimate -0.1 percent
• China December imports rise 10.8 percent YoY in yuan terms; estimate 4.2 percent
• China December trade balance 275.4 billion yuan; estimate 344.5 billion yuan
• India inflation eases more than estimated before Modi’s budget
• India December consumer prices rise 3.41 percent YoY; estimate 3.51 percent
• India November industrial production rises 5.7 percent YoY; estimate +1.5 percent
• Capital goods production gains 15 percent, manufacturing output up 5.5 percent YoY
• India’s fuel retailers, banks to absorb card transaction charge
• Airtel starts operations of India’s first payments bank
• Global funds sell Rs 12.8 crore of local stocks; domestic funds sell Rs 110 crore yesterday: Provisional data

Indian sovereign bonds are headed for their third week of gains as data showed, consumer inflation eased to a two-year low.

The consumer price inflation rose 3.41 percent in December compared to 3.51 percent in November. Nomura in a note said it expects macro data to remain soft over the next two to three months as the process of remonetisation could continue till the end of February.

With growth weak, inflation slowing and expectations that government will present a prudent Budget, said Nomura adding it expects the RBI to deliver a 25 basis points cut in policy rate in February.

In the currency market, it seems like another good day for the Asians. The South Korean won has risen 0.6 percent against the dollar. The rupee, which so far has weakened 0.2 percent in the week, could pull in some gains in the session.

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, gained 0.2 percent to 8,445.

Asian stocks trade mixed this morning, with Japanese equities advancing as the yen weakened and a rally in gold fizzled as investors continued to assess whether market moves since the U.S. election have gone too far.

Also Read: Dollar Rally Adds to Uncertainty as Fed Eyes 2017 Rate Hikes

In a week characterized by a reversal in many of the market moves seen since Donald Trump’s election, Friday will see the release of China export data and a report on U.S. holiday-season retail sales.

U.S. stocks declined overnight as banks led declines, with three of the largest American lenders due to report fourth-quarter results Friday. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, added little over 0.2 percent after falling 0.5 percent a day before.

Gold fluctuated between gains and losses after briefly rising above $1,200 an ounce for the first time since November on Thursday.