Sensex, Nifty Halt 4-Day Gains As Investors Await RBI Policy

Indian shares declined for the first time in five trading session as investors eased up on moves ahead of the Reserve Bank monetary policy. At the same time, they are assigning greater risk premiums to European countries headed for elections amid Trump administration’s protectionist trade rhetoric.

The S&P BSE Sensex fell 0.3 percent to 28,335 while the NSE Nifty dropped 0.3 percent as well to 8,768. Traders will take heart from the fact that the 50-share index managed to hold on to technically important 8,750-mark after briefly falling below it during the session.

The market breadth turned in favour of the sellers at close. About 922 stocks declined, 720 advanced and 272 remained unchanged. The S&P BSE Auto Index once again top the worst performing sectoral gauge list followed by the S&P BSE Metal and S&P BSE Oil & Gas indices.

On the flipside, the S&P BSE Capital Goods Index gained the most, led by BHEL.

The market remains in an uptrend until the Nifty manages to stay above 8,680 level on closing basis, said Jay Thakkar, senior technical analyst, Sharekhan Ltd. told BloombergQuint in a phone conversation.

“If 8,680 is held on a closing basis, then the index is likely to move towards 8,850 initially and thereafter 8,900,” he said. Likewise, he expects a similar trend on the Nifty Bank Index until 19,800 is held on a closing basis.

In terms of investment ideas, Thakkar recommended select stocks from the sugar sector. “One can buy Thiru Arooran Sugars at current levels with a stop loss at Rs 64 and a target of Rs 103,” he said.

Sharekhan has also given a buy recommendation on Future Consumer. “I think that stock is likely to reach towards Rs 30 initially after which it may head towards Rs 34-35. The stop loss is recommended at Rs 22.95,” Thakkar said.

Thakkar also put a buy on Petronet LNG for a target of Rs 430 and a stop loss of Rs 360.

Shares of the engineering and manufacturing company gained as much as 7.5 percent to its highest since September 9 after reporting earnings that beat street expectations.

• Q3 net income Rs 93.54 crore; estimate of Rs 76.6 crore.
• Revenue Rs 6,330 crore; estimate of Rs 6,150 crore
• Total costs Rs 6,310 crore versus Rs 7,160 crore year ago
• Other income Rs 136 crore versus Rs 171 crore year ago

Shares of the lender dropped 2 percent to Rs 81.8 after reporting its third quarter earnings.

• Third-quarter loss widens YoY to Rs 2,250 crore from Rs 2,180 crore.
• Gross bad loans 15.16 percent of total end-Dec. versus 13.05 percent end-Sept.
• Q3 bad-loan provisions Rs 2,360 crore versus Rs 1,710 crore year earlier
• Interest income Rs 6,550 crore versus Rs 6,780 crore, expense Rs 5,700 crore versus Rs 5,230 crore

Shares of the tyre maker fluctuated between gains and losses after its sales beat street estimates but profit came in below expectations.

• Q3 net Rs 83.83 crore versus estimate of Rs 107 crore
• Q3 sales Rs 1,560 versus estimate of Rs 1,440 crore
• Total costs Rs 1,440 versus Rs 1,320 crore YoY

IG Petrochemicals' 5-Day Surge

IG Petrochemicals Ltd. rises for the fifth consecutive session, gains as much as 17.5 percent.

• The stock has risen 31.5 percent in this period.
• IG Petrochemicals is the top gainer on the BSE SmallCap index today, and its volumes are at 7.6 times its 20-day average
• Company is a market leader in Phthalic Anhydride (PAN), which is used in industries such as flexible PVC, plastics, paints, construction, transportation and marine.
• Market capitalisation: Rs 970 crore.

• Idea Cellular seeks to raise Rs 10,000 crore via debentures
• Tata Communications selected video distribution partner for MotoGP
• Infosys Joins salesforce partner Ecosystem for analytics cloud
• Repco Home to consumer raising funds of up to $40 million via debentures
• Cerebra Integrated starts e-waste recycling facility at Kolar district
• HDIL to soon introduce new budget homes brand in Mumbai
• Mukta Arts says New Excelsior screen in Mumbai to open Feb. 10

Earnings Reaction

• Cera Sanitaryware (+1.9% to Rs 2,387) Q3 net Rs 22.47 crore versus estimate of Rs 22.70 crore
• EID Parry India (+6% to Rs 309) Q3 net Rs 12.22 crore versus Rs 6.04 crore YoY
• BF Utilities (-2.2% to Rs 397) Q3 loss Rs 29 lakh versus Rs 63 lakh YoY
• Minda Industries (+2.9% to Rs 395) Q4 net Rs 44.74 crore versus Rs 28.85 crore YoY
• Dhanuka Agritech (-1.5% to Rs 747) Q3 net Rs 26.63 crore versus Rs 22.55 crore YoY
• LG Balakrishnan (-4.2% to Rs 565) Q3 net Rs 12.94 crore versus Rs 15.43 crore YoY

Shares of the state-owned bank swung between gains and losses after a near three-fold jump in net profit for the October-December quarter.

Net profit grew 305 percent to Rs 207 crore from Rs 51 crore in the same period last year, according to the lender’s exchange filing. However, the figure was way below the Bloomberg consensus estimate of Rs 613 crore.

Net interest income decreased 9 percent to Rs 3,731 crore, as compared to Rs 4,120 crore in the year ago period. This too missed analyst estimates of Rs 3,973 crore.

For more details on PNB’s third quarter earnings, click HERE

Shares of the IT firm surged as much as 4.73 percent to Rs 205.75 after it beat analysts’ estimates in the October to December quarter and offered optimistic guidance for 2017.

Net profit stood at Rs 121.5 crore, an increase of 9.1 percent from the July to September quarter, the company said in its exchange filing. The consensus estimate of analysts tracked by Bloomberg stood at Rs 111.3 crore.

Revenue jumped 4.1 percent to Rs 941 crore, beating analysts’ estimate of Rs 920 crore. Revenue in U.S. dollar terms grew 2.7 percent to $138.9 million.

Trent Snaps Two-Day Losing Streak

• Trent snapped its two-day losing streak and was trading with gains of around 6 percent.
• The retail arm of the Tata group has lost three percent over the last two sessions
• Volumes are at 3.98 times its 20-day average volumes on NSE. 

After rising for nine straight days, the rupee turned weak by 13 paise to 67.35 against the dollar in early trade at the foreign exchange market today on fresh demand for the American currency from importers.

The U.S. dollar's gains against some currencies overseas and a lower opening in the domestic equity market put the rupee on the back foot, forex dealers said.

For the past few days, the rupee continued to outshine the US dollar and ended at a nearly 3-month high of 67.22 yesterday, appreciating by 9 paise on sustained unwinding of the American greenback by exporters and corporates ahead of the RBI monetary policy review scheduled for tomorrow.

Heavy unwinding of long dollar positions built by speculative traders last week ahead of FOMC meet predominantly gave the rupee an edge amid extreme weak overseas sentiment.

PTI

Shares of the FMCG company rose as much as 3.4 percent to its highest since January 1991 after the government sold around 2 percent stake in the company via three block deals.

Around 242.5 million shares changed on the NSE in three block deals, according to Bloomberg data. The government managed to get around Rs 6,700 crore from the share sales, Department of Investment and Public Asset Management (DIPAM) secretary Neeraj Gupta told reporters in New Delhi.

LIC was said to be the buyer in the ITC block deal, according to a ETNow report citing unnamed sources.

Indian shares fluctuated between gains and losses following weak trade in global equities over rising geopolitical concerns and as traders await cues from RBI’s monetary policy meet tomorrow.

The S&P BSE Sensex slipped 0.1 percent to 28,411 while the NSE Nifty declined 0.1 percent as well to 8,787. The market breadth, however, was encouraging with more buyers than sellers. About 879 stocks advanced, 551 declined and 452 remained unchanged on the NSE.

• ACC: Said no proposal of merger with Ambuja being considered at present; Neeraj Akhoury takes charge as MD and CEO
• NBCC India: Signs MoU with India Tourism Ministry, J&K government for Rs 1,120 crore orders works
• Titagarh Wagons: Wins order for two coastal research vessels of about Rs 100 crore from Ministry of Earth Sciences
• Bank of Maharashtra: Lowers MCLR in the range of 10-20 basis points depending on maturity
• Idea Cellular: Discussing sale of tower assets with Bharti Infratel and ATC in two separate deals. (Mint)
• Oberoi Realty: To enter affordable housing space. (Business Standard)
• Jet Airways: To expand fleet to regain market share. (Business Standard)
• HPCL: Plans to raise $500 million via bond issue. (Mint)

For a complete list of stocks to watch, click HERE

Earnings To Watch Today

• BHEL
• Tata Steel
• Punjab National Bank
• IDBI Bank
• Hexaware Technologies
• Titan
• Procter & Gamble Hygiene
• Sadbhav Infrastructure Projects
• Jubilant Life Sciences
• NHPC
• Greenlam Industries
• CEAT
• Future Retail
• Gillette India

• Indian Bank shunning corporate loans sees stock tripling in year
• Fertiliser companies to get Rs 10,000 crore bank fund, said Ananth Kumar.
• India to hold talks with industry on U.S. visa norms, said Nirmala Sitharaman
• India detains two vessels at port over oil spill off Chennai
• India agency seeks attachment of Sahara’s 6 London properties
• India top court attaches Sahara’s Aamby Valley property
• NHPC to consider buy-back of its equity shares
• Ramco Cements to consider buy-back of its equity shares
• Global funds sell Rs 404 crore of local stocks; domestic funds buy Rs 450 crore yesterday: Provisional data
• Sugar gains to almost three-month high on India outlook

Must-Read: One Last Rate Cut In The Offing, Shows BloombergQuint Economists’ Poll

• Tata Sons ousts Mistry from board, ending months-long saga
• 5.6 mag. earthquake 33km NW of Pipalkoti India: USGS
• India court wants petcoke, furnace oil ban in Delhi enforced (PTI)

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, declined 0.1 percent to 8,805.

Asian stocks fell this morning, after the yen led a rally in haven assets with political uncertainty infecting markets across the globe. Japan’s Topix index dropped for the first time in three days, while Chinese equities fluctuated as investors awaited data on Asia’s largest economy’s foreign currency reserves.

Overnight the S&P 500 Index retreated from near record levels, as shares most tied to economic growth struggled after wage growth and uneven retail results raised questions about the strength of the American consumer.

Also Read: Goldman Sachs Economists Are Starting to Worry About President Trump

The Trump-fuelled rally in equities is faltering as investors assess how the administration will balance protectionist trade rhetoric with promised tax cuts and spending increases. At the same time, traders are assigning greater risk premiums to European countries were anti-establishment movements are gaining traction ahead of elections.