Sensex, Nifty Consolidate As Investors Look For Fresh Triggers

Indian equity benchmarks were little changed as gains in Larsen & Toubro and Tata Steel were offset by losses in Mahindra & Mahindra, Axis Bank and Maruti Suzuki.

The S&P BSE Sensex was little changed at 33,756 and the NSE Nifty was also little changed at 10,440. The mid and small cap shares outperformed their large cap counterparts as the S&P BSE MidCap Index rose 0.7 percent and the S&P BSE SmallCap Index advanced 1.1 percent.

Eleven out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Capital Goods Index's 1.4 percent gain. On the other hand, the S&P BSE Auto Index was the top sectoral loser, down 0.76 percent.

Shares of the Anil Ambani-led Reliance Infrastructure rose as much as 6.8 percent to Rs 498 and Adani Transmission advanced as much as 10 percent to Rs 225.30. Reliance Infrastructure has signed an agreement with Adani Transmission for 100 percent sale of its integrated Mumbai power business, Reliance Infrastructure said in a press release.

Total deal is valued at Rs 13,251 crore, comprising of business valued at Rs 12,101 crore and approved regulatory assets of Rs 1,150 crore, the press release added.

Shares of the Hyderabad-based road construction company rose as much as 2.9 percent to fresh 52-week high of Rs 221 after it won order worth Rs 1,339 crore for construction of ring road and bypass around Jammu city, the company said in a stock exchange notification.

• Motherson Sumi: The Noida-based auto component maker fell 2.36 percent to Rs 376. Trading volume was more than 13 times its two-week average.
• Man Infraconstruction: The Mumbai-based infrastructure construction company rose 3.86 percent to Rs 65.85. Trading volume was 19 times its two-week average.
• Ultramarine & Pigments: The Chennai-based specialty chemical firm rose 0.8 percent to Rs 295.70. Trading volume was 12 times its two-week average.
• IFCI: The Delhi-based NBFC rose 13.2 percent to Rs 27. Trading volume was 6.4 times its two-week average.

The NSE Nifty Bank Index was trading on a flat note ahead of weekly expiry of derivative contracts. The Nifty Bank Index fell 0.13 percent to 25,558. Axis Bank, Federal Bank, Yes Bank and ICICI Bank were among the top losers from the banking space.

Shares of the Delhi-based drug maker rose as much as 16.5 percent to fresh 52-week high of Rs 35.3 after the U.S. drug regulator cleared its bulk drug Montelukast Sodium. The U.S. FDA approval gives Morepen entry into Rs 2,000 crore U.S. market for Monetelukast, the company said in a stock exchange filing.

• Indian equity benchmarks were trading in a narrow range as gains in Larsen & Toubro and HDFC were offset by losses in Mahindra & Mahindra, Infosys and ICICI Bank.
• The S&P BSE Sensex was little changed at 33,768 and the NSE Nifty 50 Index was little changed at 10,444. Meanwhile, the mid cap and small cap shares were outperforming their larger peers. The S&P BSE MidCap Index rose 0.5 percent and the S&P BSE SmallCap Index advanced 0.8 percent.
• Fourteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Capital Goods Index's 1.4 percent gain. On the flipside, the S&P BSE Auto Index was the top sectoral loser, down 0.5 percent.
• From the Nifty 50 basket of shares, 26 were advancing while 24 were declining.

Shares of the infrastructure construction company rose as much as 20 percent to Rs 5.05 after it entered into an agreement with Cube Highways and Infrastructure for sale of entire stake in two subsidiaries Salem Tollways and Kumarapalayam Tollways, IVRCL said in a stock exchange notification.

Shares of the companies whose managements were accused in 2G Spectrum Scam rose in an otherwise subdued session after a special CBI court acquitted all accused in the 2G Spectrum Scam.

• Unitech up 15 percent at Rs 8.17
• Reliance Communications gains 4.2 percent to Rs 17.99
• DB Realty surges 20 percent to Rs 43.70
• Sun TV Network rises 4 percent to Rs 978

Shares of the Gurugram-based Pepsi bottler rose as much as 10 percent to fresh 52-week high of Rs 590 after the company informed stock exchanges that it plans to acquire PepsiCo India's franchised sub territory in Jharkhand along with facilities and franchise rights for Chhattisgarh.

Shares of Reliance Nippon Life Asset Management Ltd. rose as much as 4.8 percent to Rs 287.95. The stock could reach Rs 325 in a year, international research firm CLSA said.

The target price implies a potential upside of 16 percent from the current market price. It is the highest price target on the company so far, among the analysts tracked by Bloomberg. The research firm initiated its coverage on the Asset management company with a 'Buy' rating.

Saswata Guha, director of financial institutions at Fitch Ratings India speaks to BloombergQuint.

Key highlights form the conversation:

• PSB fundraising has come at the fag end of Basel.
• We have been carrying a negative outlook on the sector for a long time.
• The negative outlook on PSU banks has now reduced.
• There are green shoots in some sectors.
• Banks are probably just preparing themselves.
• Expect rebound in growth after 3-4 quarters.
• Banks are looking at SME space more actively now than in the past.
• The story of private banks and NBFCs gaining market share from PSBs to continue over the next year as well.
• Private banks now in a more advantageous position with the capital raise.
• Expect 30-50 percent increase in provisioning levels for banks on Ind-AS implementation.
• Have been concerned on some of the banks under RBI's Prompt Corrective Action.
• Govt increasingly serious about right-sizing the sector.

Gopal Mahadevan, chief financial officer at Ashok Leyland speaks to BloombergQuint.

Key highlights from the conversation:

• GST has improved efficiency of transport vehicles.
• Like GST, e-way bill will be positive in long run.
• Overloading Will start getting checked once e-way bill comes in.
• e-way has been there in select states for select commodities.
• UP, Rajasthan markets are doing well due to lower truck overloading.
• December promises to be good but will have to wait and watch.
• December could be reasonably good month for vehicle sales.
• Expect a good fourth quarter this time.
• Unfortunately few players are looking at pricing factor to drive sales but we are not in this race.
• Will not shy from getting market share, but will balance on product pricing front.
• Have added 8-10 percent in market share in the last few years.

Key highlights from the conversation:

• Expect growth to pick up and earnings growth to follow.
• See inflation returning, GDP growth at 7 percent.
• Spending money before election has been an unsaid norm.
• Expect centre funded pro-poor spending by state government.
• Margin pressure was seen in auto ancillaries.
• Expect cyclicals to do well in case of a recovery.

Shares of the adhesive maker rose as much as 5 percent to record high of Rs 934.25 after it informed stock exchanges that its board will meet on Dec. 26 to consider share buyback proposal.

Pidilite Industries trades at 44.9 times its estimated forward earnings per share, compared to 38.7 times for the two-year historical average. The stock has returned 56.5 percent so far this year, compared to 28.7 percent advance in the country’s benchmark Sensex.

Indian equity benchmarks climbed, led by the gains in Hero MotoCorp. The S&P BSE Sensex Index rose as much as 0.2 percent to 33,861, while the NSE Nifty 50 Index rose as much as 0.3 percent to 10,474.

The market breadth was tilted in favour of buyers. Sixteen of the 19 sector gauges compiled by the BSE Ltd. rose led by the S&P BSE Healthcare Index’s 0.6 percent gain.

Meanwhile, S&P BSE Telecom Index declined 0.3 percent, making it the worst performer among the sectoral indices.

The minutes of the RBI’s monetary policy committee released last evening has reinforced the central bank's hawkish stance on inflation. Analysts believe this rules out a further reduction in policy rates. The yield on the 10-year note is likely to stay in a range of 7.18-7.25 percent.

Asian equities are lower as the cheer over U.S. tax cuts subside. The dollar index is little changed but currencies in the region are trading with a slight upward bias. The rupee is expected to stay in a range of Rs 63.80-64.20 a dollar in the day.

• Nifty December futures closed trade at 10,470, premium of 26 points versus 7.9 points on Tuesday.
• December Futures: Nifty open interest down 1 percent; Bank Nifty open interest down 6 percent.
• India VIX closed flat 12.18.
• Maximum open interest for December series at 10,500 Call (open interest at 65.2 lakh, up 4 percent.)
• Maximum open interest for December series at 10,000 Put (open interest at 80.5 lakh, down 3 percent.)

F&O Ban

• In ban: Balrampur Chini, DLF, Fortis, HDIL, Jet Airways, JP Associates, JSW Energy
• New in ban: Balrampur Chini, DLF
• Out of ban: TV18 Broadcast, Wockhardt

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions there is a penalty.

Put-Call Ratio

• Nifty PCR at 1.49 versus 1.44.
• Nifty Bank PCR at 1.07 versus 1.22.

Stocks Seeing High Open Interest Change

CLSA on Reliance Nippon Life AMC

• Initiated ‘Buy’ with price target of Rs 325.
• Mutual funds in a sweet spot with rising penetration.
• Robust earnings growth and high dividend payouts to aid investor returns.
• Expect asset under management, revenue and net profit to grow at a compounded rate of 23 percent, 28 percent and 26 percent respectively by March 2020.
• Dividend yield to rise to 3.1 percent by the next financial year versus 1.6 percent clocked during the previous financial year.
• Reliance Nippon to leverage retail strength.
• Topline growth largely driven by rise in share of equity.
• Equity share in asset under management to rise to 40 percent by March 2020 versus 28 percent in March 2017.
• Cost of operations to remain high.

Motilal Oswal on Ajanta Pharma

• Maintained ‘Buy’; raised price target to Rs 1,790 from Rs 1,606.
• Company confident on returning to growth path from the next financial year.
• Company maintains guidance of 10-15 filings by March.
• Inventory has been gradually restoring post GST.
• Expect improvement in business environment in emerging markets.
• Expect revenue and net profit to grow at a compounded rate of 14 percent and 11 percent respectively by March 2020.
• Strong filing pace to enable better performance over medium term in U.S.

Morgan Stanley on HDFC Standard Life

• Initiated ‘Overweight’ with price target of Rs 425.
• HDFC Life is one of the best plays on India's protection story.
• One of the strongest distribution franchises; Relies heavily on HDFC Bank.
• Specializes in protection – an underpenetrated and highly profitable segment.
• Superior franchise to drive steady growth.
• Improvement in revenue mix to offset margin pressure.
• Expect protection premiums to grow at a compounded rate of 44 percent by March 2020, and 20 percent between March 2020 and March 2030.
• Expect return on enterprise value to sustain at 20 percent over the next three years.
• Expect value of new business to grow at a compounded rate CAGR of 28 percent by March 2020.
• Near-term upside is limited following strong listing.
• Bull case price target of Rs 580: Strong growth, significant improvement in persistency and stronger-than expected performance on protection.

Morgan Stanley on HDFC Bank

• Maintained ‘Overweight’; raised price target to Rs 2,500 from Rs 2,200.
• Fund raising to raise current fiscals CET-1 to 15.3 percent and the next financial year’s book value by 15 percent.
• Bank well placed to show strong growth.
• Expect system loan growth to pick up to low-double-digits in the next financial year.
• HDFC Bank remains a compounder with earnings rising at above 20 percent.
• Capital raise provides an opportunity for multiple rerating.

Deutsche Bank on Ramco Cement

• Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 750 from Rs 790.
• Weak demand and prices in South Indian affects medium-term outlook.
• Rising energy cost to impact margins.
• Cut earnings per share for the financial years through March 2020 by 5-8 percent; Expect 9 percent compounded rate in volume by 9 percent.
• Like longer-term strategy of de-risking business model and expanding in East.
• Prefer Dalmia Bharat and Shree Cement where risk-reward is more attractive.

Jefferies on Petronet LNG

• Maintained ‘Hold’; raised price target to Rs 290 from Rs 280.
• Gorgon contract may cut LNG import price by $1 per mmbtu.
• Renegotiation was widely expected.
• Expect volume, earnings per share to grow at a compounded rate of 4.4 percent and 11 percent respectively by March 2021.
• Volume growth may ease after March.
• Like the business but valuations limit upside.

Nomura on Coal India

• Maintained ‘Neutral’; raised price target to Rs 283 from Rs 260.
• Indirect coal price hike to result in 3 percent annual revenue hike.
• Earnings set to recover, but valuation not compelling.
• Earnings per share estimates for the next two financial years raised by 4 percent and 6 percent respectively to factor in hike.
• Expect dividend per share of Rs 14 and Rs 19 for the current and the next financial year.

• Astron Paper & Board Mill subscribed 242 times on final day.

• Bombay Rayon Fashions, OK Play & Mirc Electronics circuit filter revised to 5 percent.
• Pincon Spirits Promoters & Directos only allowed to buy shares and not sell or transfer until further notice.
• DPSC Two day offer for sale starts today.
• Balkrishna Industries: Ex-date for 1:1 bonus. F&O lot size revised to 800.
• Castrol: Ex-date for 1:1 bonus. F&O lot size revised to 2,800.
• M&M: Ex-date for 1:1 bonus. F&O lot size revised to 1,000.
• Vakrangee: Ex-date for 1:1 bonus.

• TPL Plastech: Bridge India Fund bought 4.5 lakh shares or 5.8 percent equity at Rs 650 each.
• Asian Granito: Vignaharta Ceramics sold 1.86 lakh shares or 0.6 percent equity at Rs 530.14 each.
• Tara Jewels: Promoter Rajeev Sheth sold 4.61 lakh shares or 1.9 percent equity at Rs 18.9 each.

Ashiana Housing

• SBI MF bought 17.77 lakh shares or 1.7 percent equity at Rs 165.79 each.
• Ashish Kacholia sold 9.10 lakh shares or 0.9 percent equity at Rs 167 each.
• Idria sold 16.83 lakh shares or 1.6 percent equity at Rs 165.77 each.
• Goldman Sachs EM Equity Fund sold 9.8 lakh shares or 1 percent equity at Rs 165 each

Zee Learn

• UBS Principal Capital Asia bought 46.34 lakh shares or 1.6 percent equity at Rs 43.67 each.
• Moon Capital Trading bought 2.09 crore shares or 7 percent equity at Rs 43.65 each.
• Swiss Finance Corporation sold 2.55 crore shares or 8.6 percent equity at Rs 43.65 each.

Transpek

• Promoter Anshul Specialty molecules bought 55,000 shares or 1 percent equity at Rs 1,372 each.
• Ruchit Patel sold 55,000 shares or 1 percent equity at Rs 1,372 each.

Siti Network

• Moon Capital Trading bought 1.25 crore shares or 1.4 percent equity at Rs 26.1 each.
• Swiss Finance Corporation sold 1.25 crore shares or 1.4 percent equity at Rs 26.1 each.

Shaily Engineering Plastics

• HDFC MF bought 2.43 lakh shares or 2.9 percent stake at Rs 900 each.
• Promoters sell 2.50 lakh shares or 3 percent stake at Rs 900 each.

• Mukesh’s Jio leads race to buy Anil’s RCom’s assets (Hindu Business Line).
• More changes in Bankruptcy Code likely in Budget (Economic Times).
• Haldiram topples PepsiCo; becomes India’s largest snack company after two decades (Economic Times).
• 5 cos in last leg of race for Star Health Insurance; bankers have shortlisted ICICI Lombard, HDFC Ergo, Bajaj Allianz, Hero Fincorp & Warburg Pincus (Economic Times).
• Dalmia Bharat to acquire bankrupt Murli Industries for Rs 350 crore (Economic Times).
• Creditors of insolvent companies can get shares at discount; Companies Amendment Bill passed (Economic Times).
• India may approve Rs 1,000 crore relief package to textile sector: ETNow
• Banks put Jaypee Group firm PPGCL up for sale: Mint
• Varun beverages to acquire PepsiCo’s franchised sub-territory in Jharkhand (PTI).

• Reliance Communication lenders are said to meet as early as this week to decide on converting part of the debt owed to them into equity (Bloomberg)
• Bharti Airtel: Tanzanian government said Airtel’s local unit belongs to state-owned Tanzania Telecommunications Company.
• Bharat Petroleum: Government is yet to take a decision on BPCL’s proposal to integrate with either GAIL India or Oil India, Oil Minister Dharmendra Pradhan said.
• IVRCL entered into a pact with Cube Highways and Infrastructure to sell two arms for Rs 730 crore.
• Coal India is looking to buy stake in overseas coking coal mines.
• SEBI ordered forensic audit of Pincon Spirit.
• Srikalahasthi Pipes’ QIP opens at a floor price of Rs 379.3 per share.
• Kridhan Infra QIP opens at a floor price of Rs 102.82 per share.
• United Bank of India: RBI prescribed additional Prompt Corrective Action.
• Cabinet approves Rs 1,300 crore programme for textile sector.
• Pidilite to consider share buyback on Dec. 26.
• SQS India: Assystem Services made an open offer to acquire 27.82 lakh shares, or 26 percent stake at Rs 475.27 each.
• Varun Beverages to acquire PepsiCo India’s franchised sub territory in Jharkhand.

• Verdict in 2G Scam will be out today: Here’s a recap.
• 88 entities paid a quarter of India’s taxes.
• RBI goes from draining to adding cash as bank liquidity tightens.
• Curbs remain on liquor shops, pubs as Maharashtra allows 24x7 business.
• China takes the lead to fight climate change as U.S. pulls back.
• Air India hires banks for $535 million aircraft-purchase loan.
• Max Hospital licence cancellation stayed; resumes operations.
• Bitcoins not posing any systemic threat but can’t be ignored, SEBI Chief says.
• India fifth most vacation deprived country in the world.
• Key reforms can raise share of formal employment to 40 percent, says TeamLease.

• Brent crude ended higher at $64.56 a barrel, up 1.2 percent.
• WTI crude ended higher at $58.05 a barrel, up 0.9 percent.
• Spot Gold trades higher at $1,266 an ounce; up 0.07 percent.
• ICE Sugar ended higher for third day at 14.57 cents per pound; up 1.11 percent.

Shanghai Exchange

• Steel trades higher; up 1.7 percent.
• Aluminium trades higher for second day; up 0.7 percent.
• Zinc trades higher for second day; up 0.4 percent.
• Copper trades higher for tenth straight session; up 1.2 percent.
• Rubber trades lower; down 0.2 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,456 as of 8:40 a.m.

Stocks in Asia opened lower after U.S. equities dipped in the wake of congressional passage of U.S. tax cuts, suggesting investors see the growth-boost narrative from the corporate and individual rate reductions as having played out. Besides, Bank of Japan keeps rates unchanged at -0.100 percent.

Here are some of the key events scheduled for this week:

• The U.S. and U.K. publish updated estimates of third-quarter GDP.
• The Bank of Japan meets on Thursday to set monetary policy.
• Catalonia votes in an election Thursday that will pose a test for the Spanish region’s secession movement.