Sensex, Nifty Clock Third Weekly Gains

Indian shares eked out minor gains, but extended their advance for a third straight week, as a combination of better-than-anticipated earnings and the so-called global reflation trade getting revitalised from President Trump’s pro-growth comments.

The S&P BSE Sensex closed little changed at 28,334 and the NSE Nifty 50 gained 0.1 percent to 8,793. While both the indices end the week higher, the Nifty (+0.6 percent) much better outing than the Sensex (+0.3 percent).

The market breadth, however, turned in favour of the bears at close. About 906 stocks declined, 734 advanced and 273 remained unchanged.

Shares of the metal producer pared most of its gains after its third quarter earnings missed the mark. The company reported a net income of Rs 2,320 crore for quarter-ended December, compared to an estimate of Rs 2,420 crore.

• Revenue Rs 5,380 crore; estimate Rs 5,110 crore
• Total costs rise to Rs 3,060 crore versus Rs 2,420 crore
• Cash, cash equivalents at Rs 25,320 crore as of end-Dec.
• Company gets clearance for Zawar expansion; plan completion of expansion of Zawar mill by first quarter of next fiscal

Zinc market outlook remains positive for 2017 as no new mines being commissioned in near future, Chairman Agnivesh Agarwal said in statement. Integrated zinc output seen lower than FY16 because of low mined metal supply in first half, the company said.

Shares of the auto maker swung between gains and losses after reporting its third quarter earnings. The company posted a net profit of Rs 1,110 crore for quarter-ended December, compared to an estimate of Rs 880 crore.

The profit was boosted by a one-time gain of Rs 364 crore during the quarter from the sale of its investment in a subsidiary and a joint venture, the company said in its exchange filing.

• Q3 revenue Rs 11,780 crore; estimate of Rs 11,390 crore
• Total costs Rs 10,820 crore versus Rs 10,610 crore
• Other income Rs 110 crore versus Rs 87.32 crore

Shares of the auto part maker dropped as much as 2.6 percent to Rs 22,376 after it reported third quarter earnings below street estimates.

• Q3 net profit Rs 218 crore versus estimate of Rs 344 crore
• Revenue Rs 2,860 crore versus estimate of Rs 2,840 crore
• Total costs Rs 2,730 crore versus Rs 2,410 crore YoY
• Raw material cost up 25 percent YoY to Rs 800 crore
• Approved special interim dividend payout of Rs 75 a share

Shares of the country’s largest bank extended gains to 2.5 percent after its third quarter earnings beat street expectations.

The state-owned lender reported a net profit of Rs 2,610 crore for quarter-ended December, compared to an estimate of Rs 2,510 crore by analysts in a Bloomberg poll.

• Q3 net interest income Rs 14,751 crore versus estimate of Rs 14,500 crore (12 analysts)
• Interest income Rs 43,930 crore versus Rs 40,640 crore
• Expense Rs 29,170 crore versus Rs 26,950 crore
• Gross bad loans 7.23 percent end-Dec. versus 7.14 percent end-Sept.
• Q3 bad loan provisions Rs 7,240 crore versus Rs 7,64 crore year earlier
• Other income Rs 9,660 crore versus Rs 6,090 crore

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

Shares of the pharmaceutical company dropped as much as 3.25 percent to Rs 3.81 crore as compared to Rs 6.28 crore in the year ago period. The companies EBITDA stood at Rs 15.2 crore as compared to Rs 19 crore while margins contracted to 11.8 percent as compared to 16.4 percent a year ago.

Shares of the movie production company jumped 8.9 percent, the most since January 19, after it unit bags a contract from Tata Sky for production of creative assets.

The company’s technology unit will create exclusive subscriber communications for value added services of Tata Sky, according to an e-mailed statement.

The deal includes developing creative assets monthly on a diverse range of Tata Sky services that cover various subjects including fitness, health and music.

Continuing its winning spell, the rupee rose by another 3 paise to 66.82 against the US dollar in early trade today on continued selling of the American currency by banks and exporters.

Forex dealers said dollar's weakness against other currencies overseas and strong opening in domestic equity market also supported the rupee momentum.

The local currency had ended 34 paise higher at a fresh 3-month high of 66.85 against the dollar.

PTI

• 3M India (down 1.5 percent to Rs 11,609): Q3 net income Rs 42.43 crore versus Rs 46.82 crore YoY
• Andrew Yule (up 2.3 percent to Rs 27): Q3 profit Rs 18.67 crore versus Rs 6.28 crore YoY
• Aurobindo Pharma (down 1.2 percent to Rs 698.5): Q3 net income Rs 579 crore versus estimate Rs 612 crore
• Bata India (down 0.7 percent to Rs 505): Q3 net income Rs 37.71 crore versus Rs 44.82 crore YoY
• Bharat Petroleum (down 1.4 percent to Rs 716): Q3 net income Rs 2,270 crore versus estimate Rs 2,210 crore; GRM $5.90 a barrel versus $7.67
• Cairn India (up 0.1 percent to Rs 274): Q3 net income Rs 604 crore versus estimate Rs 6.55 crore
• JK Tyre (down 2.4 percent to Rs 116): Q3 profit Rs 86.19 crore versus Rs 111 crore YoY
• Harrisons Malayalam (up 14.1 percent to Rs 93): Q3 net income Rs 2.82 crore versus loss Rs 14.59 crore YoY
• Tata Teleservices (down 0.8 percent to Rs 6.55): Q3 net loss Rs 415 crore versus loss Rs 77.14 crore YoY
• Torrent Power (down 4.4 percent to Rs 199): Q3 net income Rs 107 crore versus Rs 360 crore YoY
• LT Foods (up 2.2 percent to Rs 60): Q3 net income Rs 29.77 crore versus Rs 16.86 crore YoY

• Man Infraconstruction (down 2.1 percent to Rs 40.5): Q3 net income Rs 9.41 crore versus Rs 7.37 crore YoY
• NCC (down 1.8 percent to Rs 85.5): Q3 net income Rs 58.27 crore versus estimate Rs 47.9 crore
• NLC India (down 1 percent to Rs 142): Q3 net income Rs 336 crore versus Rs 17.9 crore YoY
• Power Grid (up 1.9 percent to Rs 206): Q3 net income Rs 1,93 crore versus estimate Rs 1,970 crore
• Shipping Corp (down 2.8 percent to Rs 66): Q3 net income Rs 7.25 crore versus Rs 141 crore YoY
• Steel Authority of India (down 2.7 percent to 64): Q3 net loss Rs 795 crore versus estimate Rs 918 crore loss

• Sun Pharmaceutical (up 0.7 percent to Rs 660): Unit Taro Q3 EPS $3.42 versus $4.41 YoY; net sales down 15 percent YoY to $220.4 million
• Talwalkars Better (0.4 percent to Rs 220): Q3 net income Rs 5.83 crore versus Rs 5.28 crore YoY
• Zuari Global (1 percent to Rs 322): Q3 net income Rs 110 crore versus Rs 63.68 crore YoY

Indian shares climbed following a rally in Asian equities as metal makers and lenders rebounded while automakers and energy producers snapped their winning streak.

The S&P BSE Sensex gained 0.4 percent to 28,456 while the NSE Nifty advanced 0.5 percent to 8,822. The market breadth was firmly tilted in favour of buyers. About 978 stocks advanced, 497 declined and 417 remained unchanged on the NSE.

Movers & Shakers: Tata Steel, Grasim Industries, Torrent Power And More

• Ballarpur Industries: Defers coupon on $200 million perpetual notes
• Bank of India: To sell Rs 300 crore of non-core assets in March quarter
• Gayatri Projects: Trades ex-split
• Grasim Industries: Stock to be added to MSCI Emerging Markets Index; also be added to MSCI ACWI Value Index
• Hindalco: Said appointing 5 banks for fundraising via QIP, CNBC-TV18 reported
• Hotel Leelaventure: Airports Authority said to end land pact with company, CNBC-TV18 reported
• ICRA: Approves buy-back of shares at up to Rs 4,500 each; Q3 net income drops 38 percent YoY to Rs 12.3 crore
• Ind-Swift Laboratories: Reports fire in manufacturing block at Punjab
• Indian Oil: May have negative impact as it wasn’t included in MSCI Emerging Markets Index, analyst Darwin Hung writes in e-mail
• Infosys: Severence pay a governance issue, co-founder Murthy tells Economic Times, but denies governance lapses alleged in media reports
• ITC: LIC of India raises stake to 16.3 percent from 14.3 percent
• Jaiprakash Power: Says Brookfield investment report speculative
• Tata Chemicals: To invest Rs 270 crore in nutrition business
• Tata Steel: To sell speciality steels business to Liberty House
• United Breweries: Heineken said to eye bid for 11 percent stake in United Breweries, Times of India reported

For a complete list of stocks to watch, click HERE

Earnings To Watch

• SBI
• Bank of Baroda
• Mahindra And Mahindra
• Hindustan Zinc
• Bosch
• Tata Power
• BEML
• Berger Paints
• GAIL
• Dredging Corporation of India
• CESC
• Chambal Fertilizers & Chemicals
• Balkrishna Industries
• Corporation Bank
• IPCA Labs

It seems the bond markets are mighty upset with RBI changing its stance to neutral from accommodative. The yield on the benchmark note climbed another 11 basis points in the last session and for the week, they are up a massive 45 basis points at 6.86 percent.

In a note Nomura said that it expects the 10-year yield to touch 6.90 percent by end-2017. With no relief in sight, bonds may stay lower with some odd value trade as yields are at a very attractive level.

In currency market, the rupee touched a three-month high in the last session. In the week it has climbed 0.7 percent to 66.85 per dollar. However, today seems to be the day of the greenback with most Asians trading in the red and rupee too may open lower.

Interestingly, the world's biggest FX trader, Citigroup told Bloomberg that it sees the dollar rising this year even as U.S. President Trump talks the greenback down and blasts trading partners for currency manipulation.

• Infosys denies governance lapses alleged in reports of rifts
• India files request with U.K. for Vijay Mallya’s extradition
• Government names Gulati, Sabharwal, Kumar to RBI central board
• AirAsia India doesn’t violate effective control norms: DGCA

• Daimler India to start output of new Sub-9 Ton CV in 1H, 2017
• Max Ventures to consider ‘Urgent’ business matter Feb. 10
• Global funds buy Rs 357 crore of local stocks; domestic funds sell Rs 380 crore yesterday: Provisional data
• Lockheed says U.S. may take ’Fresh Look’ at India F-16 plan (Reuters)
• Heineken said to eye bid for 11% stake in United Breweries (Times Of India)
• Statoil, Total, Shell said to eye stake in Amplus Energy (Mint)
• United Breweries Chairman Mallya refuses plea to resign (Financial Times)
• India to test air defense interceptor missile (Indian Express)

Data To Watch

• 5:30pm: December Industrial Production YoY; estimate 1.2 percent (prior 5.7 percent)

Good Morning!

The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, gained 0.3 percent to 8,828.

Asian stocks gained this morning, with the dollar and government bonds slumped after U.S. President Donald Trump promised a plan to overhaul business taxes in the next few weeks. The MSCI Asia Pacific Index back to the highest level since July 2015 after U.S. climbed to records.

Gold slipped while extended a rally to a third day. Equities surging to fresh high after Trump said a “phenomenal” plan to overhaul business taxes may be released within the next “two or three weeks.”

The comments served as a lifeline to so-called reflation trades that were weakening as the administration expended energy defending immigration orders and threatening to rewrite trade terms while providing scant details on pro-growth polices promised during the campaign.

Attention will turn Friday to Shinzo Abe’s visit with President Trump, as investors parse reports Japan’s prime minister is prepared to offer infrastructure investment, with the U.S. administration still sitting on details of its own policy proposal.

Also, China, the biggest contributor to world trade, reports export and import data.