Sensex, Nifty Close Near 2-Month High

Indian shares climbed for a second day with the benchmarks closing at their highest level since November 10, 2016, led by stocks of automobile and metal manufacturers.

The S&P BSE Sensex rose 1 percent to 27,375 while the NSE Nifty too advanced 1 percent to 8,475. This was the 50-share index’s first close above the 8,450-mark this year.

Baring S&P BSE Information Technology index, all other 18 sectoral gauges on the exchange advanced. The market breadth was skewed in favour of the buyers. About 980 stocks advanced, 620 declined and 307 remained unchanged.

While the pullback was anticipated after a dismal November and December, Ashu Madan of Religare Securities said, the pace of the rally has been a bit surprising. So far this month the Sensex has gained 2.8 percent, compared to over 4.5 percent drop in the previous two.

Madan said the rally seemed to be technical in nature. “It looks like short covering happening before the expiry. I don’t expect it to continue a day after Thursday,” he told BloombergQuint.

He feels investors should hold on to their bets going into the Budget next week. “It will be tough for the finance minister to satisfy the market since the expectations are so high. While we will have to wait to see whether he is able to pull off a please-all budget or not, any disappointment would be only limited to a knee-jerk reaction. I believe the market is likely to show resilience thereafter,” he said.

Shares of the media firm dropped as much as 1.2 percent, making it the second worst performing stock on the Nifty, after its third quarter earnings missed street estimates.

The company reported a net profit of Rs 251 crore for the three-month period ending December, compares to Rs 289 crore estimated by analysts in a Bloomberg poll.

It clocked net sales of Rs 1,640 crore for the December quarter, which was bang in-line with estimates. The total costs stood at Rs 1,150 crore versus Rs 1,180 crore year-on-year.

The third quarter EBITDA margin came in at 31.5 percent and other income at Rs 52.46 crore versus Rs 29.46 crore year-on-year.

Shares of the insurance service provider slid 0.4 percent to Rs 359 after reporting third quarter earnings.

The company posted a net profit of Rs 450 crore for the three-month period ending December, compared to Rs 436 crore same period last year.

• Total income Rs 5,050 crore versus Rs 6,080 crore YoY

Shares of the two-wheeler maker gained as much as 3.5 percent after reporting third quarter earnings that beat street estimates.

The company posted a net profit of Rs 133 crore for the three-month period ending December, compared to Rs 120 crore estimated by analysts in Bloomberg poll. It clocked net sales of Rs 3,240 crore versus an estimate of Rs 3,000 crore.

Somany Ceramics erased losses and rose as much as 7.7 percent to highest since November 11 while Kajaria extended gains to 5.4 percent.

SOMC Q3 net income Rs 20.18 crore versus Rs 13.86 crore YoY; estimate Rs 16.8 crore

• Revenue Rs 439 crore versus Rs 432 crore year ago
• Total cost Rs 406 crore versus Rs 408 crore

KJC Q3 net income Rs 55.1 crore versus Rs 57.19 crore YoY; estimate Rs 51.4 crore

• Revenue Rs 677 crore versus Rs 672 crore; estimate Rs 560 crore
• Total cost Rs 585 crore versus Rs 576 crore

Shares of the financial services arm of Larsen and Toubro extended gains to 3.1 percent after its third quarter earnings beat estimates.

The company managed to post a net profit of Rs 271 crore for the December quarter, compared to Rs 249 crore anticipated by analysts in a Bloomberg poll.

The gross bad loans of the NBFC stood at 4.48 percent for the quarter, compared to 4.7 percent in the previous one. It clocked a net income from operations of Rs 2,090 crore for the three-month period versus Rs 1,820 crore year-on-year.

Shares of the agro company erased loss to gain as much as 2.3 percent after announcing new products for rice protection.

BASF SE, Germany will be offering solutions to boost rice yields through its India unit, according to its exchange filing. It will introduce two products – Seltima and Adexar for managing rice disease, weeds and pests.

Shares of the country's second largest private sector lender extended gains after it reported a net profit of Rs 3,870 crore for the December quarter, compared to Rs 3,770 crore anticipated by analysts in a Bloomberg poll.

• Net NPA 0.32 percent versus 0.30 percent QoQ
• Gross NPA 1.05 percent December-end versus 1.02 percent September
• Interest income Rs 17,610 crore versus Rs 15,410 crore
• Net interest income Rs 8,309 crore versus Rs 7,069 crore
• Net interest margin 4.1 percent
• Q3 provisions Rs 716 crore versus Rs 654 crore
• Other income Rs 3,140 crore versus Rs 2,870 crore
• Q3 interest expense Rs 9,300 crore Rs 8,340 crore

Shares of the country’s third largest telecom operator rose as much as 4 percent to Rs 76.2, making it the fourth day of gains.

Market has been abuzz with reports of a potential merger, but neither Vodafone India nor Idea Cellular has confirmed any news reports. “A merger with Idea Cellular would be the best fit for Vodafone India, particularly as the two operators’ operational strengths are complementary,” according to CLSA.

Idea is expected to report a third quarter net loss of Rs 403 crore, for the first time since listing, according to a Bloomberg poll of analysts.

Read Full Report: Idea Cellular ‘Best Fit’ For Vodafone India, Says CLSA

Shares of the state-owned company rose as much as 3 percent intraday after winning an order from Power Grid Corp. Ltd.

The company in partnership with ABB has bagged an order to set up a 800 kV 6,000 MW high voltage direct current link between Western Region Grid in Chhattisgarh state and Southern Region Grid in Tamil Nadu, according to its exchange filing.

Read: H-1B Visa Rule Changes Will Hurt Indian IT, But Less Than Expected

Shares of the drug maker dropped as much as 14.5 percent to Rs 1,526 after it received an import alert for one of its products manufactured at its Aurangabad unit.

However, soon after the stock pared some of its losses to trade 4.7 percent lower . Speaking to BloombergQuint a company official said the import alert has been made for its sildenafil citrate tablets, which is the generic version of Viagra. “We do not sell the product in U.S. at all. It is only sold in India and emerging markets,” the spokesperson said.

The company’s Paithan plant in Aurangabad was last inspected by U.S. FDA in March-April 2015. Post the inspection, the drug maker has received 16 approvals for its products from the unit, the official said.

• Ashoka Buildcon (+5.2%): Q3 profit Rs 42.7 crore; estimate Rs 23.6 crore
• Asian Paints (-0.8%): Q3 profit Rs 466 crore, estimate Rs 473 crore; company to more than double capacity at Gujarat plant
• Bharti Infratel (+0.4%): Q3 profit Rs 620 crore, estimate Rs 747 crore
• Chennai Petroleum (+8.9%): Q3 profit Rs 291 crore versus Rs 18.33 crore YoY
• Den Network (-4.2%): Q3 loss Rs 45.1 crore versus Rs 87.39 crore loss YoY
• EIH (+1%): Q3 profit Rs 54.31 crore versus Rs 50.15 crore YoY
• GIC Housing (+1.9%): Q3 profit Rs 34.43 crore versus Rs 30.59 crore YoY
• Gujarat Narmada Valley (-8.3%): Q3 profit Rs 66.77 crore versus Rs 54.54 crore YoY
• Gujarat State Fertilizers (-11.2%): Q3 profit Rs 61.17 crore versus Rs 104 crore YoY
• Hindustan Unilever (-1.4%): Q3 profit rose 7 percent to Rs 1,040 crore, estimate Rs 973 crore; company sees impact of Modi’s cash ban fading
• Karnataka Bank (-6.8%): Q3 profit Rs 68.52 crore versus Rs 96.91 crore YoY
• L&T Infotech (+1.4%): Q3 profit Rs 248 crore versus Rs 224 crore YoY
• Trent (+4%): Q3 profit Rs 37.23 crore versus Rs 32.56 crore YoY

The rupee gained 12 paise to 68.08 against the dollar in early trade today at the Interbank Foreign Exchange (Forex) market on increased selling of the U.S. currency by exporters and banks amidst higher opening in the domestic equity market.

Forex dealers said that besides selling of the American greenback by exporters and banks, weakness in the dollar against other currencies overseas supported the rupee.

Further, a higher opening in the domestic equity market influenced the rupee uptrend, they added.

Yesterday, the rupee had ended marginally lower by two paise at 68.20 despite the outlook for the dollar remaining lacklustre.

PTI

Indian shares climbed amid mixed trade in Asian equities as metal makers and energy producers rallied for a second day. Investors were also encouraged by the local currency’s strong opening against the U.S. dollar.

The S&P BSE Sensex gained as much as 0.4 percent to 27,233 while the NSE’s Nifty 50 index rose 0.4 percent as well to 8,426 in opening trades. The market breadth was firmly skewed in favour of the bulls. About 1,046 stocks advanced, 395 declined and 441 remained unchanged on the NSE.

It seems the fireworks have already begun. With a stroke of a pen, U.S. President Donald Trump decided to withdraw from an Asia-Pacific accord. Further, he plans to renegotiate NAFTA and introduce tough border tax. As he goes about dismantling trade agreements, dollar extended losses.

The South Korean won has risen 0.3 percent against the greenback and the rupee too could open higher. However, the upside is limited as remarks from a Fed official favoring a faster pace of rate hikes could make it a volatile session for the currency.

In sovereign bonds, it is lacklustre trade in the run up to the budget on February 1. Yield on the benchmark note is expected to trade in a narrow range of 6.43 percent-6.47 percent in this truncated week. The yield is down six basis points this month after rising 27 basis points in December.

• Bharti Airtel: To consider raising funds via private placement of bonds
• PNB Housing Finance: To consider Rs 6,000 crore of debentures sale plan
• Adani Power: Says founders’ stake rises to 65.3 percent in company upon allotment of 27.9m shares on partial warrant conversion
• Bhushan Steel: Clarifies not called for any bids from JSW Steel, others
• Great Eastern Shipping: Says unit Greatship contracts to sell platform supply vessel
• Manpasand Beverages: Expects to double production capacity in 12-18months
• MOIL: OFS floor price set at Rs 365 a share

For a complete list of stocks to watch, click HERE

• BSE’s IPO by existing shareholders gets 50 percent demand on first day of sale; Offer to close January 25
• MOIL Ltd. offer for sale (OFS) for non-retail investors opens Tuesday. The government to sell 10 percent or 13.3m shares, at a minimum price of Rs 365 each through stock exchanges. Retail investors can bid Wednesday

Analysts Ratings

• AIA Engineering rated new buy at HDFC Securities
• Reliance Industries cut to market perform versus outperform at Bernstein
• Hindustan Unilever cut to neutral versus outperform at Credit Suisse
• Ultratech Cement raised to hold at Arihant Capital

HCL Technologies Ltd. reported a 2.3 percent increase in profit in the October to December quarter, beating analysts’ estimates.

Net profit rose to Rs 2,062 crore from Rs 2,015 crore in the July to September quarter, according to the company’s filing to the exchanges. That compares to the Rs 2,020 crore median estimate of analysts tracked by Bloomberg.

Read the full earnings report HERE

Earnings To Watch

• Ajanta Pharma
• Bharti Airtel
• Bharat Financial Inclusion
• Biocon
• Crompton Greaves Consumer
• HDFC Bank
• HT Media
• ICICI Prudential Life
• Indian Overseas Bank
• Infibeam Incorporation
• Inox Leisure
• Kajaria Ceramics
• L&T Finance Holdings
• Mahindra & Mahindra Financial
• Nilkamal
• PNB Housing Finance
• Syngene International
• Tata Sponge Iron
• TVS Motor Co
• Wockhardt
• Zee Entertainment
• Zensar Technologies

• Trump revamps U.S. trade focus in exiting from Pacific deal
• Trump promises business leaders major border tax, rule cuts

• India extends service tenure of Economic Affairs Secretary Shaktikanta Das by three months
• India government to review panel report on the Fiscal Responsibility and Budget Management (FRBM) Act.
• Cotton Association of India estimates 2016-17 cotton crop at 34.1 million bales
• European Union keen on investment pact talk before trade pact: Sitharaman
• Mistry said to file fresh affidavits in India tribunal (CNBC-TV18)
• French carmaker PSA Group to create India joint venture with CK Birla group (Les Echos)
• Global funds sell Rs 289 crore of local stocks; domestic funds buy Rs 520 crore yesterday: Provisional data
• India court seeks asset details from Malvinder, Shivinder Singh by February 8

Read: Steel Demand Revival Hinges on Modi Roads-to-Rail Spending Push

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, climbed nearly 0.2 percent to 8,430.

Asian stocks fluctuated this morning, after President Donald Trump targeted reworking America’s trade relationships. Safe havens yen and gold retreated after touching their highest level since November.

Trump promised a “very major” border tax, signed executive orders to withdraw the U.S. from the Trans-Pacific Partnership trade deal and announced over the weekend he’d seek to renegotiate the North American Free Trade Agreement.

U.S. stocks fell overnight, along with the dollar, dragged down by energy and industrials. McDonald’s and Halliburton Company declined after results disappointed.

Money managers will be dissecting earnings from some of the world’s largest companies this week with Alphabet Inc., Samsung Electronics and Alibaba Group Holding Ltd. all reporting results today.

Meanwhile, oil halted its decline after Iraq said that it was close to implementing its share of pledged output curbs. U.S. crude inventories probably expanded by 2.25 million barrels last week, according to the median estimate in a Bloomberg survey.