Sensex, Nifty Snap Three Days Of Sluggish Trade Led By Metal Shares

Indian equity benchmarks snapped three days of sluggish trade led by gain in metal stocks. Sentiment also got a boost after the government sought for parliamentary approval to issue about Rs 80,000 crore of bonds to fund capital injections into state lenders, boosting shares of public sector lenders.

The S&P BSE Sensex rose 176 points or 0.52 percent to 33,970 and the NSE Nifty 50 Index advanced 0.59 percent or 62 points to 10,505.

Nine out of eleven sector gauges compiled by the National Stock Exchange ended higher led by the Nifty Metal Index's 2.8 percent gain. On the flipside, Nifty Auto Index was the top sectoral loser, down 0.2 percent.

• Aurionpro Solutions: Shares of the Mumbai-based technology company rose as much as 14 percent to Rs 283.50 after its subsidiary Cyberinc announced to sell its Identity and Access Management business to KPMG in an all cash deal worth Rs 217.6 crore.
• Hindustan Foods: Shares of the Goa-based baby food maker was locked in 10 percent upper circuit at Rs 376.20 after the company announced that it will start manufacturing of pest care products. The unit will supply pest care products to Reckitt Benckiser for a period of 7 years and is expected to make Rs 125 crore annually.
• SJVN: Shares of the state-run power producer rose as much as 15 percent to Rs 39.65 after the company informed stock exchanges that its board of directors will meet on Jan. 8 to discuss shares buyback proposal.
• Aro Granite: Shares of the Delhi-based construction material maker were locked in a 20 percent uper circuit at Rs 96.50 after Dilipkumar Lakhi bought 1.5 lakh shares (1 percent equity) at Rs 80.93 per shares while Surefin Financial Cons. Pvt Ltd sold 96,000 shares (0.6 percent equity) at Rs 81.01 per share.

Shares of the Delhi-based power producer and steel maker rose as much as 14.72 percent to fresh 52-week high of Rs 252 on the back of heavy volumes. As many as 35 lakh shares changed hands on the BSE compared with an average of 9.88 lakh shares traded daily in the past two weeks.

Shares of the Aditya Birla Group telecom operator rose 1.7 percent to Rs 104.45 after its board approved a plan to raise Rs 3,250 crore by allotting shares on a preferential basis to the promoter group entities.

The board also set up a panel to consider options to raise additional Rs 3,500 crore via preferential issue, qualified institutional placement or rights issue, the company said in an exchange filing.

• Hindalco likely to bid for $2.5 billion aluminum firm Aleris
• Hindalco's Novelis unit likely to make non-binding Aleris bid
• Aleris likely to be valued at around $2.5 billion including debt

• Supreme Industries: The Mumbai-based plastic furniture maker fell as much as 1.8 percent to Rs 1,270.60. As many as 3.6 lakh shares change hands on the BSE compared with an average of 4,400 shares traded daily in the past two weeks.
• Gayatri Projects: The Hyderabad-based infrastructure construction company fell over 6.5 percent to Rs 213. As many as 27 lakh share changed hands on the BSE compared with an average of 34,000 shares traded daily in the past two weeks.
• Simplex Infra: The Delhi-based infrastructure construction company rose 1.5 percent to Rs 591. As many as 2.76 lakh shares changed hands on the BSE compared with an average of 4,919 shares traded daily in the past two weeks.
• SREI Infrastructure Finance: The Delhi-based non-banking finance company rose 2 percent to Rs 100. As many as 27 lakh shares changed hands on the BSE compared with an average of 1.5 lakh shares traded daily in the past two weeks.

Shares of metal companies were trading higher led by gains in Tata Steel, Coal India, Vedanta and JSW Steel. The gauge of metal shares- S&P BSE Metal Index was the top sectoral gainer, up 1.9 percent at 15,450.

Shares of government-owned banks moved sharply higher after the government sought additional Rs 80,000 crore for bank recapitalisation, Bloomberg reported. The gauge of PSU Banks on the National Stock Exchange Nifty PSU Bank Index rose 2.79 percent with stocks such as IDBI Bank, Punjab National Bank, Bank of India, Bank of Baroda and Oriental Bank of Commerce rising 3.4-9 percent.

Shares of the Noida-based company rose nearly 5 percent to Rs 25.40 after the Reserve Bank of India has asked ICICI Bank Ltd., the lead lender to Jaiprakash Associates Ltd., to hold off on insolvency proceedings against the debt-ridden company, bankers familiar with the matter said.

Shares of marble and ceramic tile makers rose in a rangebound trading.

• Kajaria Ceramics gains 1.8 percent
• Murudeshwar Ceramics rises 5.2 percent
• Somany Ceramics advances 1.6 percent
• Pokarna rises 3.7 percent
• Madhav Marbles surges 20 percent
• Glittke Granite rises 10 percent
• Aro Granite jumps 20 percent
• Orient Bell up 3 percent

Shares of the Mumbai-based technology company rose as much as 14 percent to Rs 283.50 after its subsidiary Cyberinc announced to sell its Identity and Access Management business to KPMG in an all cash deal worth Rs 217.6 crore.

Shares of the Mumbai-based maker of readymade steel for construction industry rose as much as 5.7 percent to Rs 138.50 after its Rs 128 crore institutional share sale closed with investors such as Singapore government, DSP Blackrock and HDFC AMC.

The Nikkei India services Purchasing Managers' Index, or PMI, returned to modest growth in December amid signs of recovery from the effects of new goods and service taxes, or GST.

The GST was introduced in July, causing sluggish demand and lower customer turnout at Indian businesses.

The seasonally adjusted business activity index stood at 50.9 in December, up from 48.5 in November.

A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

Shares of the Delhi-based construction material maker were locked in a 20 percent uper circuit at Rs 96.50 after Dilipkumar Lakhi bought 1.5 lakh shares (1 percent equity) at Rs 80.93 per shares while Surefin Financial Cons. Pvt Ltd sold 96,000 shares (0.6 percent equity) at Rs 81.01 per share.

Shares of the state-run power producer rose as much as 15 percent to Rs 39.65 after the company informed stock exchanges that its board of directors will meet on Jan. 8 to discuss shares buyback proposal.

• Earnings and budget expectation will drive market sentiment
• Expect 2018 to be moderate as compared to 2017
• Expect 15-20 percent earnings growth in FY19
• Watch out for macro factors both locally and globally
• Rule out an interest rate cut by RBI
• Never seen such a calm market, expect volatility to come back
• Most manufacturing companies are preparing for growth

Indian equity benchmarks edged higher led by gains in ONGC, Dr Reddy's Labs and Asian Paints. However, the gains were capped as Tata Motors, Bajaj Auto and ICICI Bank came under selling pressure.

The S&P BSE Sensex rose 0.17 percent to 33,850 and the NSE Nifty 50 Index advanced 0.16 percent to 10,459.

Fifteen out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Capital Goods Index's 0.4 percent gain. On the other hand, the S&P BSE Auto Index was the top sectoral loser, down 0.17 percent.

Volatility rules in the sovereign bond markets ahead of the government selling the new 10-year note on Friday.

The yield on the current benchmark surged as high as 7.42 percent in the last session but finally ended down 6 basis points at 7.32 percent. In sharp focus will be the cutoff at bond auction tomorrow and the state bond auction calendar.

Traders today see yields in a range of 7.30-7.40 percent.

In the currency markets, the rupee snapped its longest gaining streak since October to close at 63.5350 a dollar. The dollar index is in the green while the closely tracked South Korean won is down 0.2 percent.

Traders expect a lower opening for the rupee and a range between 63.35-63.65 a dollar in the day.

• Nifty January futures trading at 10,469, premium of 26 points from 30 points earlier.
• January series: Nifty open interest up 3 percent; Bank Nifty open interest up 14 percent.
• India VIX ended at 13.6, down 0.4 percent.
• Max open interest for January series at 11,000 Call (open interest at 43.3 lakh, down 2 percent).
• Max open interest for January series at 10,300 Put (open interest at 48.3 lakh, down 3 percent).

• Nagarjuna Fertiliser circuit filter revised to 10 percent.
• Fineotex and Graphite India circuit filter revised to 5 percent.
• Novartis India buyback period starts today, until Jan. 17.
• Aarti Industries ex-date for determining buyback eligibility.

• WPIL: Promoter V N Enterprises bought 1.08 lakh shares (1.1 percent) at Rs 679.18 each.
• Viceroy Hotels: ICPA Health Products bought 2.50 lakh shares (0.6 percent) at Rs 21.27 each.

Aro Granite Industries

• Dilipkumar Lakhi bought 1.5 lakh shares (1 percent) at Rs 80.93 each.
• Surefin Financial Cons. Pvt Ltd sold 96,000 shares (0.6 percent) at Rs 81.01 each.

Navkar Corp

• Ashish Kacholia bought 10 lakh shares (0.7 percent) at Rs 187 each.
• Everest Finance and Investment Co. bought 10 lakh shares (0.7 percent) at Rs 187.06 each.

Orchid Pharma

• Fortune Intercontinental sold 11.28 lakh shares (1.3 percent) at Rs 20.2 each (average).
• Serum Institute of India sold 13.12 lakh shares (1.5 percent) at Rs 20.1 each.

• HDFC Ltd: The mortgage lender said its third quarter profit on the sale of investments stood at Rs 5,270 crore compared to Rs 3 crore a year ago. The figure includes Rs 5,250 crore from the IPO of HDFC Life. Its dividend income stood at Rs 151 crore from Rs 179 crore year-on-year. HDFC said it will also make additional special provision of Rs 1,575 crore.
• Earnings To Watch: GM Breweries
• Coal India examining feasibility of producing methanol.
• SJVN to consider share buyback on Jan. 8.
• Bank of Maharashtra to raise Rs 650 crore via equity.
• NBCC secured total business of Rs 315 crore in December
• Kridhan Infra’s Rs 128 crore institutional share sale closes. Investors include Singapore government, DSP Blackrock and HDFC AMC.
• Rushil Décor to import plywood as well as low thickness MDF boards.
• Aurionpro Solutions subsidiary Cyberinc to sell its Identity and Access Management business to KPMG in an all cash deal worth Rs 217.6 crore.
• KM Sugar Mills sold 7.30 lakh shares (73 percent) in subsidiary KM Energy.
• Tata Motors: JLR U.S. sales down 9 percent year-on-year to 11,394 units in Decembers 2017. For the full year 2017, JLR U.S. sales reached 114,333 units, up 9 percent year-on-year.
• HPCL: ONGC may pay Rs 45,000 crore (45 percent premium to market cap) for company's stake (Financial Express)
• Greaves Cotton: To make new BS-VI engines for Piaggio (PTI)

Equirus on FIEM Industries

• Initiated ‘Long’ rating with price target of Rs 1,336.
• Second largest player in Indian automotive lighting market.
• Key beneficiary of shift to LED usage in two wheelers.
• Effective AHO regulations to fuel LED usage in two wheelers.
• LED lamps to drive strong value growth; Lower competition to aid RoIC.
• Strong track record of adding new products.
• Margin and return profile to rebound after a blip in the previous financial year.
• Expect RoIC to rebound to 13 percent by March 2020.
• Expect revenue, operating income and net profit to grow at a compounded rate of 18 percent, 21 percent and 33 percent over the financial years through March 2020.

Equirus on Lumax Industries

• Initiated ‘Long’ rating with price target of Rs 2,486.
• Market leader in automotive lighting market in India with 35 percent market share.
• Set to be a key beneficiary of shift to LEDs in two and four wheelers.
• Focus on increasing market share in commercial vehicles, tractors and two wheelers.
• Expect gain in share in Hero Motor’s light sourcing.
• Large exposure to Maruti provides good growth visibility.
• Maruti recently introduced LED in mid to premium segment.
• Return matrix to improve led by growth, margin expansion.
• Expect revenue, operating income and net profit to grow at a compounded rate of 15 percent, 24 percent and 27 percent over thr financial years through March 2020.

IIFL on IRB InvIT

• Initiated ‘Buy’ with fair value of Rs 97.
• Natural hedge against inflation.
• Established and stable concession agreements.
• Significant government support for highway development.
• Strong leverage to underlying traffic growth.
• Healthy balance sheet provides room to expand portfolio.
• Large pipeline of assets from IRB Infrastructure.
• Fair value assuming 8 percent toll revenue growth.

Credit Suisse on India Steel Sector

• Odisha shutdown takes out 10 percent of India's output.
• With output cut, India to turn iron ore importer again.
• Iron ore prices to rise if India turns net-importer.
• Steelmaking cost up $55-60/tonne vs $60/tonne rise in steel prices.
• Cost-push steel price hikes good for Tata Steel.

IIFL on Axis Bank

• Upgraded to ‘Buy’ from ‘Add’; raised price target to Rs 650 from Rs 520.
• Increase in share capital to boost capital position by over 200 basis points.
• Share capital boost to enhance ability to absorb large write-downs.
• Expect earnings growth to rebound strongly by March 2020.
• Expect sharp decline in loan loss provisions.
• Profitability could normalise by March 2019 under Indian Accounting Standards.
• Positives: crystallization of loan losses, reduced uncertainty on capital adequacy and resumption of loan growth.

• Reliance Communications banks seen facing potential earnings hit
• RBI puts Allahabad Bank under prompt corrective action
• India cancels $500 million missile deal with Israel’s Rafael
• Jet Airways pilot ‘slaps’ female peer, both grounded
• India’s GDP growth to slip below 7% this fiscal, say experts
• Bitcoin loses some dazzle as second-tier crypto coins catch up
• Most fed officials backed continued gradual rate hikes
• Business suffers as Mumbai comes to a halt
• Trump blasts ex-aide Bannon, says he has lost his mind
• A tenth of Maharashtra’s farm loan waiver applicants may be ineligible

• Taking india from pole position to a podium finish in 2018
• Intel confronts potential ‘PR nightmare’ with reported chip flaw

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.19 percent to 10,498.

Asian stocks headed toward fresh historic highs, with Japan’s markets coming back from New Year holidays to see solid gains in the wake of U.S. records. The dollar and oil rose, while gold slipped.

Chinese stocks were little changed after a gauge of services industries indicated a pick-up in growth last month. There’s little further on the Asian calendar this week. The global highlight is set to be the key monthly U.S. jobs report Friday, which is forecast to show that unemployment held at 4.1 percent last month.

Here are highlights of key events investors will be monitoring the rest of the week:

• U.S. December employment data are due on Friday.
• India releases an estimate for 2018 economic growth Friday.

Commodities

• West Texas Intermediate oil rose 0.4 percent to $61.85 a barrel.
• Gold dropped 0.5 percent to $1,307.03 an ounce.
• The Bloomberg Commodity Index advanced to its highest since February 2017 on Wednesday.