Sensex, Nifty Close With Minor Gains Third Time This Week

Indian shares climbed for the third time this week with the key benchmarks managing to close a rangebound session with minor gains on a decent start to the third quarter earnings.

Investors have adopted a cautious approach, even as foreign funds turned net buyers after a long time a day before, awaiting cues from two major events: the upcoming Union Budget and Donald Trump’s inauguration as U.S. president.

The S&P BSE Sensex gained 0.2 percent to 27,308, while the NSE Nifty advanced 0.2 percent as well to 8,435. The market breadth was skewed slightly in favour of the buyers. About 754 stocks advanced, 700 declined and 76 remained unchanged on the NSE.

Foreigners bought net $27.3 million worth of Indian stocks on January 17.

Shares of the private sector lender pared losses and gained 0.8 percent after its third quarter earnings beat street estimates.

The bank posted a net profit of Rs 882.63 crore for quarter-ended December, compared to Rs 801 crore in the previous quarter. A Bloomberg poll of analysts’ estimate had pegged the profit at Rs 820 crore.

• Gross bad loans 0.85 percent end-Dec. versus 0.83 percent end-Sept.
• Q3 provisions Rs 115 crore versus Rs 148 crore year earlier
• Net interest income Rs 1,507.5 crores, YoY growth of 30.3 percent
• Other income Rs 998 crore versus Rs 746 crore
• Net interest margin 3.5 percent versus 3.4 percent in Q2
• Credit costs up 8 basis points in Q3
• No loan account sale to Asset Reconstruction Co. during Q3, the lender says in statement

Fresh bad loan accretion at Rs 273 crore versus Rs 386 crore YoY and Rs 266 crore in Q2

• Company says no sale of bad loans to asset restructuring cos; no off-balance sheet conversion of loans
• Net bad loans at Rs 1102 crore in Q3 versus Rs 1,040 crore QoQ
• Gross bad loans at 2.77 percent of total end-Dec. versus 2.78 percent end-Sept.
• Net income Rs 206 crore; est. Rs 203 crore
• Provisions Rs 160 crore versus Rs 75.11 crore
• Shares pare losses to 0.1 percent after falling as much as 3.2 percent earlier in the day

Shares of the microfinance firm fell 2.6 percent after its third quarter earnings disappointed street.

The lender reported a net profit of Rs 43.94 crore for the three-month period ending December, compared to Rs 54.7 crore anticipated by analysts according to a Bloomberg poll.

It clocked net sales of Rs 362 crore for the December quarter, compared to Rs 1,030 crore same period last year.

The company said it will commence operations of the small finance bank during the first week of February.

Shares of the edible oil maker jumped 20 percent to Rs 24 with volumes at 14.5 times its 30-day average. The company is said to enter into a marketing deal with Baba Ramdev promoted Patanjali Ayurved, according to a report on ETNow.

As per the deal, Patanjali will brand and market Ruchi Soya made edible oils.

Shares of the media firm gained 0.8 percent after reporting its third quarter earnings. The company made a net profit of Rs 118 crore for the three-month period ending December, compared to Rs 111 crore estimated by analysts polled by Bloomberg.

It clocked net sales of Rs 607 crore for the third quarter, in line with the Rs 604 crore estimated by analysts.

The company will pay an interim dividend of Rs 4 per share, it said in a press release.

Panasonic Energy Rallies... Again

• Rises as much as 11.8 percent today after closing 7 percent higher yesterday
• Gained nearly 18 percent in two days
• Volumes are at 27 times previous 20-day average
• RSI in overbought zone at 76.9
• Manufacturer of dry cell batteries and lighting products
• Market Cap: Rs 250 crore

Future Market Surges For 2nd Day Running

• Rises as much as 18.8 percent today after being locked in the 20 percent upper circuit yesterday
• Gained over 35 percent in two days.
• Volumes are at 160 times previous 20-day average
• RSI is 79.8 suggesting stock may be overbought.
• Company builds wholesale and retail markets and logistics parks that support them; market cap: Rs 285 crore
  

Enterprise value, a measure that factors in debt and cash, of 15 large information technology and government-run companies in NSE Nifty 500 Index is lower than their market capitalisation, data compiled by BloombergQuint shows.

Analysts said such companies have low or no debt and thus fewer risks, making them a good buying option.

(Read the full report HERE)

The housing finance company reduced its retail prime lending rate (RPLR) by 15 basis points as of today.

• For all new home loans, interest rates for women customers would be 8.65 percent per annum and for others would be 8.70 percent per annum for loans up to Rs 75 lakh.
• The reduction in the RPLR will also be applicable on loans to non-resident Indians (NRIs)/ PIO's card holders.

Shares of the state-owned gas company gained as much as 3.1 percent, the most since December 30, after it said its board will consider a bonus issue in a meeting on January 25.

It will also consider raising funds via issue of binds on a private placement basis, according to the company’s statement one exchanged.

Shares of the Chennai-based firm gained as much as 10.5 percent to 29-month high after an Economic Times said that it is advanced talks to merge its wind energy assets with IL&FS’s unit.

The all-stock reverse merger of unlisted IL&FS Energy Development will value the combined entity at Rs 4,500-5,000 crore, the newspaper reported quoting two people with knowledge of the matter.

The combined entity with a 1,400 MW generating capacity will be one of India's largest listed wind energy companies, it said.

Movers & Shakers: KPIT Technologies, Tata Group Stocks, Swan Energy And More

Piling on yesterday's loss, the rupee plunged by another 17 paise to 68.25 against the U.S. dollar in early trade today on increased demand for the American currency from importers.

Besides, the dollar's strength against other currencies overseas also weighed on the rupee but a better trend at the domestic equity market in early trade capped the loss, forex dealers said.

Yesterday, the rupee had ended lower by 13 paise at 68.08 on renewed dollar demand from importers amid worries over capital outflows.

PTI

• Agro Tech Foods jumped 12.7 percent to Rs 508; Q3 net +29 percent YoY to Rs 8.27 crore
• International Paper APPM gained as much as 5.6 percent to Rs 355; Q3 net +45 percent YoY to Rs 21.69 crore
• KPIT Technologies dropped as much as 6.6 percent to Rs 135; Q3 net Rs 73.58 crore versus est. Rs 58.8 crore
• Sasken Communication lost 5.8 percent, most in two months; Q3 net +15 percent YoY to Rs 12.93 crore

Shares of the plywood maker were locked in a 5 percent upper circuit for a second day. Well-known investor Porinjuv Veliyath bought 50,000 shares of the company yesterday at Rs 131 apiece, according to BSE data.

Indian shares fluctuated between minor gains and losses tracking the mixed trading in Asian equities as the dollar strengthened after Yellen said the American economy is strong enough to warrant higher interest rates.

The S&P BSE Sensex climbed 0.1 percent to 27,274 while the NSE Nifty gained 0.1 percent as well to 8,425. The market breadth was skewed in favour of the buyers. About 825 stocks advanced, 561 declined and 484 remained unchanged on the NSE.

• Agro Tech Foods: Q3 net +29 percent YoY to Rs 8.27 crore
• Bajaj Hindusthan, Balrampur Chini, Shree Renuka: India sugar output falls 5.3 percent YoY to 10.48 million tonne as of Jan. 15
• Cipla : Unit Goldencross to sell Four M Propack stake for Rs 13.5 crore to Shriji Polymers
• IIFL Holdings: India Infoline Housing to consider raising up to Rs 8,000 crore in debt
• International Paper APPM: Q3 net +45 percent YoY to Rs 21.69 crore
• KPIT Technologies: Q3 net Rs 73.58 crore versus est. Rs 58.8 crore
• Mangalore Refinery: Says has sought land from Karnataka for expansion project
• National Aluminium: Cut to neutral vs outperform at Macquarie
• NHPC: Said operations at 132 MW TLDP-III power station restored
• Nutraplus India: Trades ex-bonus
• Orient Green Power: IL&FS said in talks to merge wind assets with Orient Green (Economic Times)
• Pfizer India: Gets DOA from Astrazeneca India for some activities
• Punjab National Bank: To provide tech platform for India post payments bank
• Sanguine Media: Trades ex-split
• Sasken Communication: Q3 net +15 percent YoY to Rs 12.93 crore
• State Bank of India: Initial impact of demonetisation “very difficult”, Chairman Bhattacharya says
• United Spirits: Diageo raising United Spirits stake a positive, Morgan Stanley writes in note

Earnings To Watch

• Axis Bank
• Federal Bank
• Mindtree
• Yes Bank

• RBI said to inform government about impact of cash clampdown
• SBI Chairman Bhattacharya says initial impact of demonetization ‘very difficult’
• Tribunal dismisses Mistry’s contempt petition against Tata
• RMZ to acquire Essar unit’s Mumbai office space Equinox park
• Reliance General Insurance to consider debenture issue
• Global funds buy Rs 319 crore of local stocks; domestic funds sell Rs 245 crore yesterday: Provisional data
• India plans to sell 25 percent stake in five state-run general insurance companies. Government will cut stake in wholly-owned insurers to 75 percent, says Jaitley
• India places Rs 170 crore order for ballistic helmets
• IndiGo plane, carrying 186 passengers & crew, made emergency landing in Kolkata after technical snag (PTI)

The dollar rallied after the Fed chair Janet Yellen signaled rate hikes this year. The odds of an increase in May has now risen to almost 50 percent.

Meanwhile, JPMorgan said the RBI should let the Indian currency weaken as that help exports. A 3-4 percent depreciation of the rupee against the dollar this year would bolster shipments and support the economy.

In bonds, yield on India's 10-year government bond rose to highest in more than two weeks and investors grew cautious ahead of the Budget on February 1.

There is uncertainty about the government staying with its 3 percent fiscal deficit target for 2018, according to HDFC Standard. It said that any deviation from the fiscal consolidation path will be a concern for the bond market.

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, was unmoved at 8,428.

Asian stocks traded mixed this morning, as Japan’s Topix index gaining 1.1 percent and the yen retreated for a second day. The dollar remained firm after Fed Chairperson Janet Yellen said the economy is close to central bank’s objectives and she is confident that it will continue to improve.

Data showing a fifth straight monthly advance in the U.S. cost of living bolstered arguments that inflation is taking hold. The Fed remarks helped the S&P 500 Index close higher after it spent the day fluctuating.

U.S. firms and industries were optimistic about growth this year, according to the Fed’s Beige Book report, based on information collected by regional Fed banks on or before January 9. Most of the 12 Fed districts also expected the labour market to continue to strengthen.

The central bank’s survey made only a few references to the economic effects of the Donald Trump administration’s fiscal and trade policies, some of which have unsettled the currency markets.

Oil rebounded after its biggest drop in almost a week after industry data indicated a drop in U.S. crude stockpiles.

Supplies fell by as much as 5.04 million barrels last week, the American Petroleum Institute was said to report. Government data scheduled to be released later today is also expected to show a decline.

Meanwhile, gold fell for the second straight session but remained around the $1,202 an ounce mark.