A stock broker reacts during market hours in a dealing room in Mumbai. (Photographer: Prashanth Vishwanathan/Bloomberg News)

Sensex, Nifty Post Biggest Weekly Loss In Over 3 Months

Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts

Closing Bell

Indian equity benchmarks fell for fourth day in a row posting their biggest weekly loss in 14 led by selling pressure in Reliance Industries, Infosys and State Bank of India.

The S&P BSE Sensex fell 0.95 percent or 316 points to 32,832.94 and the NSE Nifty 50 Index declined 1.02 percent or 105 points to 10,121.80. Losses in today's session were broad-based as the S&P BSE MidCap Index fell 0.95 percent and the S&P BSE SmallCap Index fell 1.16 percent.

Market breadth was extremely bearish as 27 out of 30 shares in the Sensex ended lower.

For the week, Sensex declined 2.51 percent and Nifty fell 2.58 percent.

All sector gauges compiled by BSE ended lower led by the S&P BSE Realty Index's 2 percent fall.

Countdown

Recent Outperformers Face Selling Pressure

Shares of the recent outperformers in the Nifty 500 basket of shares were facing the heat of selling pressure.

  • McLeod Russel falls 6.8 percent
  • Radico Khaitan plunges 9 percent
  • Sobha falls 4.87 percent

Fab Four Stocks Of The Day

Vimta Labs: The Hyderabad-based clinical research provider was locked in 20 percent, rising the most in over three years, to Rs 163.50 after its net profit nearly doubled in September quarter.

  • Revenues up 13 percent at Rs 43 crore versus Rs 38 crore
  • Net profit up 95 percent at Rs 4.3 crore versus Rs 2.2 crore
  • EBITDA up 77 percent at Rs 11.5 crore versus Rs 6.5 crore
  • Margins at 26.7 percent versus 17.1 percent

IL&FS Engineering: Shares of the Hyderabad-based infrastructure company rose 5.45 percent to Rs 51.25 after IL&FS Transportation Networks awarded road contract to the company worth Rs 581.96 crore, the company said in a stock exchange filing.

Talwalkar Better Value Fitness: The Mumbai-based gym operator rose as much as 12.9 percent, the most in over two years, to Rs 303 after Ventura Securities initiated coverage on the stock with a buy rating for target price of Rs 728.

Den Networks: The Delhi-based cable TV service provider rose as much as 8.88 percent to Rs 108.50 after Norges Bank bought 23.88 lakh shares in the company.

Market Check

  • Indian equity indices were trading near day's lowest level led by losses in HDFC, Infosys and Reliance Industries.
  • The S&P BSE Sensex fell 0.37 percent to 33,026 and the NSE Nifty 50 Index fell below its crucial psychological level of 10,200.

Eicher Motors Off Day's Low As Sales Rise 22% In November

Shares of the Royal Enfield maker rose came off day's low as total sales in November rose 22 percent to 70,126 units from 57,313 units during the same period last year.

Its exports surged 60 percent to 2,350 units.

Block Deal Alert

  • Lupin has 26 lakh shares change hands in multiple block deals.

Buyers and sellers were not immediately knows

Source: Bloomberg

European Shares Trade On Mixed Note

Mahindra & Mahindra Sales Rise 18%, Shares Gain

Shares of the utility vehicle maker rose 1.17 percent to Rs 1,421 after its sales in November rose 18 percent to 38,570 units from 32,564 units during the same month last year.

  • Domestic sale rose 21 percent to 36,039 units versus 29,869 units (YoY)
  • Exports declined 6 percent to 2,531 units versus 2,695 units (YoY)
  • Total tractor sales at 22,754 units versus 17,262 units (YoY)
  • Tractor exports rose 27 percent to 1,708 units versus 1,344 units (YoY)

Hosiery Garment Makers Rise In Subdued Session

Shares of hosiery garment makers were trading higher in an otherwise subdued trading session.

  • Rupa & Company rose as 10.68 percent
  • Lux Industries advanced 2.80 percent
  • Dollar Industries gained 1.28 percent
  • Digjam jumped 10.85 percent
  • SP Apparels rose 2.99 percent
  • Page Industries gained 1.35 percent

Power Lunch

Escorts Slips Post November Tractor Sales

Shares of the farm equipment maker fell as much as 4.16 percent, the most in over two months, to Rs 688 after its sales rose 6.5 percent year-on-year in November, driven by exports.

The tractor maker sold 4,941 units in the domestic market, an increase of 5.2 percent, while exports jumped 64.8 percent to 178 units, according to its stock exchange notification.

Total units sold during the month jumped to 5,119 units from 4,806 units a year ago.

Stocks Moving On Heavy Volumes

  • Coffee Day Enterprises: The Bangalore-based restaurant chain rose as much as 15 percent, the most since Nov. 9, to Rs 283.95. Trading volume was 19.7 times its 20-day average.
  • Star Cement: The Kolkata-based cement maker rose as much as 5.7 percent, the most since Nov. 23, to Rs 127. Trading volume was 15.1 times its 20-day average.
  • HT Media: The Delhi-based publisher rose as much as 8.46 percent, the most in over a month, to Rs 107.65. Trading volume was 9.2 times its 20-day average.
  • Advanced Enzyme Technologies: The Mumbai-based enzyme manufacturer rose as much as 6.5 percent, the most in over a month, to Rs 294.80. Trading volume was 9.1 times its 20-day average.

Hot Money

Laurus Labs Gains On U.S. FDA Nod For HIV Drug

Shares of the Hyderabad-based drug maker rose as much as 4.7 percent, the most Nov. 15, to Rs 550 after the U.S. drug regulator gave its tentative approval for Tenofovir Disoproxil Fumarate Tablets 300 mg.

The drug is equivalent to VIREAD Tablets 300mg of Gilead Science and is used to treat HIV-1 infection in adults.

IL&FS Engineering Services Locked In 5% Upper Circuit

Shares of the Hyderabad-based infrastructure company rose 5.45 percent to Rs 51.25 after IL&FS Transportation Networks awarded road contract to the company worth Rs 581.96 crore, the company said in a stock exchange filing.

Trend Spotting

Ashok Leyland Gains As Sales Rise 51% In November

Sales of the truck maker increased 51 percent year-on-year to 14,460 units last month, it said in an exchange filing.

Medium and heavy commercial vehicle sales rose 54 percent year-on-year to 10,641 units, while volumes of light commercial vehicles rose 44 percent to 3,819 during the period.

Shares of the Chennai-based firm snapped its three-day losing streak and rose 3.55 percent to Rs 121.5 apiece after the company announced its sales numbers. The stock has given a return of 52.37 percent so far this year, against a 24.94 percent gain in the S&P BSE Auto Index.

Market Check

  • Indian equity benchmarks erased early gains led by losses in Bharti Airtel, Infosys and Reliance Industries.
  • The S&P BSE Sensex fell 12 points to 33,140 and the NSE Nifty 50 Index was little changed at 10,225.
  • Twelve out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal Index's 0.5 percent fall. On the other hand, the S&P BSE Capital Goods Index was the top sectoral gainer, up 0.7 percent.
  • The broader markets were outperforming the benchmark indices as the S&P BSE MidCap Index rose 0.56 percent and the S&P BSE SmallCap Index advanced 0.4 percent.
  • From the Nifty 50 basket of shares, 27 were declining while 23 were advancing.

Bitcoin: Buy Or Beware

India’s Manufacturing Activity Improves At Its Fastest Pace In 13 Months

India’s manufacturing activity improved at the fastest pace in 13 months on new orders and lower tax rates.

The Nikkei India Manufacturing Purchasing Managers’ Index stood at 52.6 in November compared to 50.3 in October, according to a statement by Markit. That’s the fourth straight month of growth. A reading below 50 indicates contraction and a number above it signals expansion.

Biocon Rises As European Regulator Accepts Mylan's Biosimilars Applications

Shares of the Bangalore-based bio pharmaceutical firm rose as much as 3.58 percent to record high of Rs 447.60 after European Medicines Agency accepted marketing authorization applications for Mylan and Biocon's proposed biosimilars Trastuzumab and Pegfilgrastim, the company said in a stock exchange filing.

Bajaj Auto Posts 21% Sales Growth In November

Bajaj Auto Ltd. reported 21 percent growth in sales in the month of November.

Total sales stood at 3.26 lakh units, the Pune-based automaker said in an exchange filing. Exports rose 27 percent to 1.46 lakh units.

Maruti Suzuki Sales Rise 14% In November

Maruti Suzuki India Ltd. reported 14 percent rise in sales in November.

Total sales stood at 1.35 lakh units, India's largest carmaker said in an exchange filing. Domestic sales rose 15 percent to 1.45 lakh units, while exports remained flat at 9,300 vehicles.

The F&O Show

McLeod Russel Rises As Nomura Picks Stake

Shares of the Kolkata-based tea producer rose as much as 4.17 percent to Rs 244.70 after international brokerage Nomura picked up stake in the company.

  • Promoter Kamal Kishore Baheti sold 1 crore shares or 9.1 percent stake at Rs 205.26 each.
  • Nomura Trust and Banking Co bought 60.58 lakh shares or 5.53 percent stake at Rs 205.08 each.
  • Nomura Funds Ireland India Equity bought 23.13 lakh shares or 2.11 percent stake at Rs 205.09 each.

IndianOpen

M&M Financial Services Hits Record High On Fund Raising Via QIP

Shares of the Mumbai-based vehicle finance company rose as much as 5.2 percent to record high of Rs 461 after its board approved raising funds via qualified institutional placement (QIP).

The company is planning to raise Rs 1,056 crore at a floor price of Rs 439.63.

Stocks Reacting To Q2 Earnings

Cerebra Integrated Tech Falls 5%

Shares of the Bangalore-based computer hardware provider fell as much as 5 percent to Rs 46.10.

  • Revenue up 71 percent at Rs 60 crore.
  • Net profit up 63 percent at Rs 7 crore.
  • EBIT up 42 percent at Rs 7.4 crore.
  • Margin at 12.3 percent versus 14.9 percent.

Shreyans Industries Slips In Trade

Shares of the Ludhiana-based paper manufacturer fell as much as 2.67 percent to Rs 166.

  • Revenue up 8 percent at Rs 107.6 crore.
  • Net profit up 14 percent at Rs 7.3 crore.
  • EBITDA down 8 percent at Rs 12.7 crore.
  • Margin at 11.8 percent versus 13.9 percent.

UFO Moviez Falls Most In 15 Days

Shares of the Mumbai-based digital cinema distribution company fell as much as 4 percent to Rs 466.

  • Revenue down 13 percent at Rs 139 crore.
  • Net profit down 43.5 percent at Rs 11.3 crore.
  • EBITDA down 31 percent at Rs 38 crore.
  • Margin at 27.3 percent versus 34.6 percent.

Warren Tea Rises Over 7%

Shares of the Kolkata-based tea producer rose as much as 7.5 percent to Rs 181.80.

  • Revenue up 33 percent at Rs 44 crore.
  • Net profit up 10 percent at Rs 14.6 crore.
  • EBITDA up 18 percent at Rs 16 crore.
  • Margin at 36.4 percent versus 41.2 percent.

Opening Bell

Indian equity benchmarks rose after the country's economic growth bounced back in the July-September quarter after declining for five quarters indicating effects of demonetisation and goods and services tax have started to fade.

Gross domestic product (GDP) growth stood at 6.3 percent compared to 5.7 percent in the first quarter of the financial year.

The S&P BSE Sensex rose 0.4 percent or 133 points to 33,282 and the NSE Nifty 50 Index advanced 0.41 percent or 42 points to 10,260.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Realty Index's 1.2 percent gain.

BQ Survey: Auto Sales Set To Bounce Back To Normal

BQ Heads Up

F&O Cues

  • Nifty December Futures trading at 10,278.6, premium of 52 points versus 38 points on Wednesday.
  • Nifty open interest up 8 percent; Bank Nifty open interest up 6 percent.
  • Rollover: Nifty at 63 percent, Bank Nifty at 55 percent.
  • India VIX closed 3.7 percent up at 13.5.
  • Maximum open interest for Dec. series at 10,500 Call (open interest at 49.5 lakh, open interest up 73 percent).
  • Maximum open interest for Dec. series at 10,000 Put (open interest at 69.31 lakh, up 14 percent).

All You Need To Know

Earnings Today

  • Mahindra Logistics
  • 8K Miles Software
  • Setco Automotive
  • Pondy Oxides
  • Vimta Labs
  • Yash Papers

Earnings Reaction To Watch

Cerebra Integrated Technologies (Q2, QoQ)

  • Revenue up 71 percent at Rs 60 crore.
  • Net profit up 63 percent at Rs 7 crore.
  • EBIT up 42 percent at Rs 7.4 crore.
  • Margin at 12.3 percent versus 14.9 percent.

Shreyans Industries (Q2, YoY)

  • Revenue up 8 percent at Rs 107.6 crore.
  • Net profit up 14 percent at Rs 7.3 crore.
  • EBITDA down 8 percent at Rs 12.7 crore.
  • Margin at 11.8 percent versus 13.9 percent.

UFO Moviez (Q2, YoY)

  • Revenue down 13 percent at Rs 139 crore.
  • Net profit down 43.5 percent at Rs 11.3 crore.
  • EBITDA down 31 percent at Rs 38 crore.
  • Margin at 27.3 percent versus 34.6 percent.

Warren Tea (Q2, YoY)

  • Revenue up 33 percent at Rs 44 crore.
  • Net profit up 10 percent at Rs 14.6 crore.
  • EBITDA up 18 percent at Rs 16 crore.
  • Margin at 36.4 percent versus 41.2 percent.

Bulk Deals

Mcleod Russel

  • Promoter Kamal Kishore Baheti sold 1 crore shares or 9.1 percent stake at Rs 205.26 each.
  • Nomura Trust and Banking Co bought 60.58 lakh shares or 5.53 percent stake at Rs 205.08 each.
  • Nomura Funds Ireland India Equity bought 23.13 lakh shares or 2.11 percent stake at Rs 205.09 each.

Zydus Wellness

  • Reliance Capital bought 5 lakh shares or 1.3 percent stake at Rs 910 each.
  • Baring India Private Equity Fund III Listed Investments sold 5 lakh shares or 1.3 percent stake at Rs 910 each.

Apollo Hospitals

  • Nordea 1 Sicav bought 9.74 lakh shares or 0.7 percent stake at Rs 1103.25 each.
  • MSCI Equity Index Fund B India sold 8.47 lakh shares or 0.6 percent stake at Rs 1107.49 each.

Capacite Infraprojects

  • Societe Generale bought 21 lakh shares or 3.1 percent stake at Rs 416.96 each.
  • Paragon Partners Growth Fund sold 21 lakh shares or 3.1 percent stake at Rs 417 each.

Vakrangee

  • DB International Asia sold 47.26 lakh shares or 0.9 percent stake at Rs 709.5 each.
  • Integrated Core Strategies (Asia) PTE sold 39.44 lakh shares or 0.7 percent stake at Rs 712.5 each.

Asian Granito

  • Vignaharta Ceramics LLP sold 5 lakh shares or 1.7 percent stake at Rs 500 each.

Filatex Holdings

  • Savita Holdings Pvt sold 3 lakh shares or 0.7 percent stake at Rs 225.05 each.

Technofab Engineering

  • Equipment Mgmt sold 1.4 lakh shares or 1.3 percent stake at Rs 302 each.

Petronet LNG

  • Integrated Core Strategies (Asia) PTE sold 80.34 lakh shares or 0.5 percent stake at Rs 251.37 each.

SRG Housing Finance

  • Promoter Vinod Jain HUF bought 71,000 shares or 0.5 percent stake at Rs 229.25 each.

Agro Tech Foods

  • Samsung India Securities Master Investment Trust bought 2 lakh shares or 0.8 percent stake at Rs 620.93 each.

Stocks To Watch

  • HDFC to dilute stake in asset management unit via IPO. To hold 50.01 percent stake in the AMC business post stake dilution. Standard Life to hold 24.99 percent.
  • Yes Bank says Moody’s assigns Baa3 rating to its $1 billion MTN program.
  • LT Foods to strengthen presence in European market. Plans to invest $20 million for overall branding and expansion.
  • Reliance Communications says 31 foreign and Indian lenders oppose China Development Bank’s insolvency plea.
  • Reliance Power executes Phase I of 750 MW LNG power project in Bangladesh.
  • Shilpa Medicare says NCLT approves scheme of merger of Navya Biologicals with self.
  • Laurus Labs receives maiden tentative approval from U.S. FDA for Tenofovir Disoproxil Fumarate tablets. Drug is used for the treatment of HIV-1 infection in adults and pediatric patients 2 years of age and under.
  • Mirza International receives MCA approval for scheme of merger between Hi-Life Fabricators and self.
  • Thomas Cook opens two gold circle partner franchise outlets in Pune.
  • MCX completed first settlement cycle in options contract on gold futures.
  • LIC to pare stake in Bank of Baroda to 5.2 percent from 7.2 percent.

Brokerages On Q2 GDP Growth

Goldman Sachs

  • Growth accelerated in September quarter, in line with expectations.
  • India’s real GDP growth recovery led by higher growth in fixed investment is encouraging.
  • There are still some headwinds to activity due to uncertainties around GST.
  • Expect solid growth momentum next year and forecast real GDP growth of 8 percent in the next fiscal.

Credit Suisse

  • GDP growth recovered in September quarter largely due to GST related restocking.
  • Remain constructive on second half’s growth on recovery in private consumption, and improving global growth momentum.
  • Expect full-year growth to disappoint consensus due to continued disruptions from GST and higher oil prices.
  • Expect inflation to stay in RBI’s target range in the second half as we expect impact of higher oil prices.
  • Continue to expect the RBI to cut rates by 25 basis points in first quarter of 2018.

Deutsche Bank

  • GDP growth in the September quarter indicates that the economy has started to stabilize at a modest pace.
  • Expect growth to average around 6.6 percent during the current financial year.
  • Optimistic about the outlook for the next financial year and beyond.
  • Reasonable to expect growth to return close to 8 percent by March 2020.
  • Do not expect RBI to cut rates any further.

Brokerage Radar

Ventura Securities On Talwalkars Better Value Fitness

  • Initiated ‘Buy’ rating with price target of Rs 728; implying a potential upside of of 173 percent over 24 months.
  • Talwalkars is the market leader and twice as large as the next best peer.
  • Fitness industry offers a huge opportunity.
  • Sound business strategy to expand and transform into a wellness brand.
  • Demerger to bring superior return to the gym company leading to sharp re-rating.
  • Expect gym company to grow its revenue, operating income and net profit at 19 percent, 21.6 percent and 25.8 percent respectively by March 2020.
  • Expect lifestyle company to grow revenue, operating income and net profit at 11.2 percent, 12.8 percent and 11.3 percent by March 2020.
  • Significant scope for further re-rating given its dominant position and under-penetrated market.

Nomura On IndusInd Bank

  • Maintained ‘Buy’; raised price target to Rs 1,950 from Rs 1,850.
  • Growth robust - expect no impact from PSU recapitalisation.
  • Bank continues to build on niche verticals.
  • Bharat Financial acquisition to increases bank's rural presence.
  • Expect return on equity improvement improvement through cost efficiency; Bank targets 200 basis points cost income reduction by March 2020.
  • Expects credit costs to remain at 65 basis points for the current financial year. It is likely to come down to 60 basis points by March 2019.

Edelweiss On Pharma Sector

  • U.S. drug pricing probe is bringing several more companies and products into its purview.
  • The charges include fixing prices and rigging bids.
  • Indian companies impacted: Sun Pharma, Aurobindo, Zydus, Dr. Reddy’s and Glenmark.
  • High probability that these companies will be charged penalties.
  • If allegations proved, companies may be prosecuted criminally, with fines up to twice the amount of gain or loss involved.

Motilal Oswal On November Auto Sales

  • Retails momentum mixed for two-wheelers and commercial vehicles; passenger vehicle segment healthy.
  • Healthy wedding season demand partially negated by untimely rains.
  • Demand momentum in rural markets continues to be healthy.
  • Hero outperformed in motorcycles, capitalizing on healthy wedding season demand in North India.
  • Maruti continues to see better retail sales than competitors; Tata too is gaining momentum.
  • Demand for commercial vehicles is not exciting; discounts increased sequentially.
  • Prefer four-wheelers over two-wheelers and commercial vehicles due to stronger volume growth and stable competitive environment.
  • Top Picks: Maruti, Bajaj Auto, Tata Motors and Amara Raja.
  • M&M as the best bet on a rural market recovery.

Nomura On November Auto Sales

  • Low base of demonetisation to drive strong growth for medium and heavy commercial vehicles, followed by two-wheelers and passenger vehicles.
  • Expect passenger vehicle industry to report 16 percent year-on-year growth.
  • Maruti to outperform the industry with 17 percent growth.
  • Medium and heavy commercial vehicle segment and two-wheeler segment to grow 34 percent and 24 percent respectively year-on-year.
  • Medium and heavy commercial vehicle segment: Ashok Leyland, Tata Motors and Eicher Motors’ volume to grow 23 percent, 35 percent and 26 percent respectively on a yearly basis.
  • Two-wheeler segment: Hero MotoCorp, Bajaj Auto and Eicher Motors’ volume to grow 21 percent, 35 percent and 27 percent respectively on a yearly basis.

CLSA On Maruti

  • Maintained ‘Buy’ with price target of Rs 10,000.
  • India passenger vehicle industry showing signs of easing competitive intensity.
  • Easing competitive intensity, in small cars and entry sedans, is positive for Maruti.
  • More Original Equipment Manufacturers could potentially enter India but unlikely to make a dent .
  • Maruti likely to broaden its sport utility vehicle portfolio in coming years, though competition is high.
  • Valuations seem rich, but justified given high earnings visibility and improving outlook.

Credit Suisse On Escorts

  • Initiated ‘Outperform’ rating and price target of Rs 900; implying a potential upside of 26 percent from yesterday’s close.
  • Escorts is fourth-largest tractor manufacturer with niche construction equipment and railways business.
  • Tractors account about 80 percent of revenues and 95 percent of profits.
  • Expect tractor growth cycle to remain strong for another two years.
  • Tractors volumes to grow at compound annual growth rate of 11 percent by March 2021.
  • Expect tractor operating margins to improve by 400 basis points to 14 percent by March 2020.
  • Escorts’ has best earnings growth and lowest valuation multiple among auto original equipment manufacturers.
  • Expect fast top-line growth at railways and margins turnaround in construction equipment division.

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India fell 0.16 percent at 10,262.

Asian stocks erased early gains at the start of the last month of 2017 and S&P 500 Index futures declined as the U.S. tax bill encountered stumbling blocks.

Japanese shares gave up an advance that briefly helped the Nikkei 225 Stock Average reclaim a 25-year high reached in November. Shares were higher in Australia and equity-index futures in Hong Kong gained. The Dow Jones Industrial Average climbed past 24,000 after John McCain backed the Senate tax bill, and the S&P 500 Index capped its longest monthly winning streak since 2007 as technology stocks rebounded.

Meanwhile, India's economy bounced back after five quarter of decline in growth as impact of demonetisation and goods and services tax started to fade.

Gross domestic product (GDP) growth stood at 6.3 percent compared to 5.7 percent in the first quarter of the financial year.

Here are some key events coming up today:

  • Manufacturing in the U.S. probably remained robust in November. The Institute for Supply Management’s index is settling back to a more sustainable pace after climbing to a 13-year high two months earlier in the aftermath of Hurricane Harvey.
  • St. Louis Fed President James Bullard and Dallas Fed President Robert Kaplan are scheduled to speak.
  • Markets in Indonesia, Malaysia, Pakistan and Sri Lanka are closed for holidays..

Commodities

  • OPEC and its allies outside the group agreed to maintain oil production cuts until the end of 2018.
  • West Texas Intermediate was little changed at $57.31 a barrel.
  • Gold declined 0.7 percent to $1,277.20 an ounce.
BloombergQuint
Stay Updated With Stock Market News on BloombergQuint
Subscribe to Bloomberg | Quint
The Daily Newsletter
News & Stock Alerts