Sensex, Nifty Surge To Record Highs Led By Telecom Shares

Indian equity benchmarks rose to record highs led by gains in telecom and private sector lenders.

The S&P BSE Sensex rose 0.54 percent or 184 points to 34,154 and the NSE Nifty 50 Index advanced 0.51 percent or 54 points to 10,559.

Seventeen out of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom Index's 2.75 percent gain. On the other hand, the S&P BSE Oil & Gas Index was the top sectoral loser, down 0.39 percent.

Varun Beverages: Shares of the Delhi-based beverage maker rose as much as 8.9 percent to Rs 750 after the company entered into strategic partnership with PepsiCo for Tropicana portfolio along with Gatorade and Quacker Value Added in territories across and North and East India.

GM Breweries: The Mumbai-based liquor maker was locked in a 20 percent upper circuit at Rs 1,172.60 after the company reported strong earnings in December quarter.

• Revenues rose 20 percent to Rs 118 crore versus Rs 98 crore
• Net profit jumped 120 percent to Rs 22 crore versus Rs 10 crore
• EBITDA rose 127 percent to Rs 34 crore versus Rs 15 crore
• Margins came in at 28.8 percent versus 15.3 percent

Jubilant FoodWorks: The Domino’s pizza chain operator rose 3.7 percent to Rs 1,909 after Jefferies initiated coverage on the stock with a ‘Buy’ rating for target price of Rs 2,200.

Gravita India: The Jaipur-based metal maker rose 6 percent to Rs 175 after it said that it has started commercial production of lead tetra oxide at its plant in Jaipur.

Shares of the Anil Ambai-led telecom operator rose as much as 8.6 percent to Rs 36.15, after China Development Bank withdrew insolvency plea against the company.

The Relative Strength Index was 75, indicating that the stock may be overbought. The stock rose 205 percent last month, compared to 0.4 percent advance in Sensex.

Shares of the liquor makers were trading higher following strong set of earnings posted by Mumbai-based GM Breweries. GM Breweries' net profit in December quarter more than doubled to Rs 22 crore from Rs 9.9 crore during the same period year ago.

• GM Breweries surges 15 percent
• United Spirits advances 1.65 percent
• Radico Khaitan advances 1.95 percent
• Tilaknagar Industries advances 4.96 percent
• Pincon Spirit surges 9.59 percent
• Jagatjit Industries surges 4.96 percent
• Som Distilleries advances 3.23 percent

Shares of cement companies were trading higher in trade today.

• UltraTech Cement gains 1.25 percent
• ACC rises 0.30 percent
• Ambuja Cements up 0.42 percent
• Shree Cements gains 2.36 percent
• India Cements rises 3.76 percent
• Prism Cement advances 11.08 percent
• J. K. Cement rises 0.86 percent
• Ramco Cements rises 0.31 percent
• Birla Corp advances 0.05 percent
• OCL India advances 1.30 percent
• JK Lakshmi Cement 0.71 percent
• Orient Cement up 5 percent

• BCL Industries and Infrastructures: Shares of the Punjab-based edible oil maker were locked in 5 percent upper circuit at Rs 175. As many as 7.01 lakh shares changed hands on the BSE compared with an average of 1,410 shares traded daily in the past two weeks.
• Finolex Industries: Shares of the Pune-based plastic pipe maker rose as much as 1.96 percent to Rs 673. As many as 2.38 lakh shares changed hands on the BSE compared with an average of 4,420 shares traded daily in the past two weeks.
• Indiabulls Housing Finance: The Mumbai-based mortgage lender rose 1.2 percent to Rs 1,198. As many as 14 lakh shares changed hands on the BSE compared with an average of 30,000 shares traded daily in the past two weeks.
• Ahluwalia Contracts: The Delhi-based construction company rose as much as 6 percent to Rs 395. As many as 2.26 lakh shares changed hands on the BSE compared with an average of 4,999 shares traded daily in the past two weeks.

Shares of the Delhi-based beverage maker rose as much as 8.9 percent to Rs 750 after the company entered into strategic partnership with PepsiCo for Tropicana portfolio along with Gatorade and Quacker Value Added in territories across and North and East India.

Shares of the Anil Ambani-led company rose over 8 percent to Rs 36.10 after a report suggested that China Development Bank is planning to withdraw insolvency petition against the company, The Economic Times newspaper reported.

Shares of the Adiya Birla Group telecom operator rose as much as 12.9 percent to Rs 118 after the company said it will raise Rs 3,250 crore by selling shares to the Kumar Mangalam Birla-led promoter group to boost capital even as it integrates operations with Vodafone India Ltd. to compete in a market disrupted by a tariff war.

Shares of the Chennai-based state-run lender rose as much as 8.85 percent to Rs 25.20 after its board of directors decided to use Rs 7,650.06 crore, balance available in share premium account, to write off accumulated losses of the bank worth Rs 6,978 crore.

Shares of the Jalgaon-based farm equipment maker rose as much as 16.85 percent to Rs 97.90. As many as 3.45 lakh shares changed hands on the BSE compared with an average of 64,000 shares traded daily in the past two weeks.

Indian equity benchmarks moved higher led by gains in Tata Steel, Maruti Suzuki, State Bank of India and Bharti Airtel.

The S&P BSE Sensex rose 0.38 percent or 129 points to 34,099 and the NSE Nifty 50 Index advanced 0.31 percent or 33 points to 10,537.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom Index's 1.3 percent gain.

• Jain Irrigation: International Finance Corp sold 75 lakh shares or 1.5 percent equity at Rs 125.52 each.
• Gayatri Projects: Afrin Dia sold 34.88 lakh shares or 2 percent equity at Rs 220.4 each.
• Gitanjali Gems: Macquarie Finance (India) pvt ltd sold 25 lakh shares or 2.1 percent equity at Rs 73.5 each.
• Satin Credit Care: MV Mauritius sold 4.30 lakh shares or 1 percent equity at Rs 427.01 each.
• Nandan Denims: LTS Investment Fund bought 2.45 lakh shares or 0.5 percent equity at Rs 163.5 each.
• Aro Granite: Amrit India Value Fund sold 1.40 lakh shares or 0.9 percent equity at Rs 97.2 each.
• Veer Health: Promoter Divyabala Shah sold 4.14 lakh shares or 6 percent equity at Rs 22.35 each.

Apollo Pipes

• India Accorn Fund bought 1.64 lakh shares or 3.3 percent equity at Rs 652.1 each.
• Param Capital bought 1 lakh shares or 2 percent equity at Rs 656 each.
• Kotak Mahindra MF bought 2.75 lakh shares or 5.5 percent equity at Rs 655.61 each.
• Vinay Gupta sold 10.19 lakh shares or 20.4 percent equity at Rs 657.13 each.
• Neera Gupta sold 3.22 lakh shares or 6.5 percent equity at Rs 653.49 each.
• Meenakshi Gupta sold 3.86 lakh shares or 7.7 percent equity at Rs 656.95 each.

Subex

• UNO Metals bought 47.25 lakh shares or 0.8 percent equity at Rs 10.87 each.
• QVT Mauritius West Fund – FCCB A/c sold 70.72 lakh shares or 1.3 percent equity at Rs 10.9 each.

• Bharat Forge and RK Forging: U.S. North America Class 8 truck sales for December at 37,200 units, up 77 percent year-on-year.
• Bharti Airtel partners with Samsung to offer Galaxy J-series smartphones at affordable prices.
• Tata Motors: Jaguar Land Rover India 2017 volume growth at 49 percent.
• Varun Beverages enters into a strategic partnership with PepsiCo India for Tropicana.
• HCL Tech terminates pact with GAIC for India joint venture.
• JSW Energy incorporates JSW Solar to pursue business opportunities in renewable energy space.
• Take Solutions incorporates subsidiary Navitas Lifesciences in Columbia.
• Indian Overseas Bank: To utilise Rs 7,650.1 crore in share premium account to write off Rs 6,978.94 crore losses.
• Government seeks bids from advisors for sale of Dredging Corp, HLL.
• GTL Infra on track to add 5,000 tenancies in current fiscal; expect to add 5,000 tenancies in the next financial year.
• Samvardhana Motherson International Ltd. acquires MS Global India.
• Jaypee Infratech: Aims to complete 24,000 flats by 2020 for Rs 8,000 crore.

Brokerages on Idea Cellular Fund Infusion

• IDFC Securities: Capital infusion was much needed in Idea, considering the company’s leveraged balance sheet and the need to catch up with incumbents on 4G networks (capex).
• Edelweiss: Fund raising has been necessitated by the Vodafone merger pact limiting peak leverage. Expect Idea to use the proceeds primarily to prune leverage. Expect Idea’s debt to increase in the second half of the current financial year owing to lower operating income due to interconnect usage charges reduction and sustained competitive intensity.
• Goldman Sachs: Capital infusion to increase market confidence in the commitment of promoter entities. Fund raising would help lower debt, but leverage ratios likely to stay elevated given ongoing rapid decline in operating income.
• Deutsche Bank: Promoter group underlines commitment by subscribing to 48 percent of the issue. Fund raising to provide further headroom for the mergeco to defend its.

CLSA on Idea Cellular

• Upgraded to ‘Buy’ from ‘Sell’; raised price target to Rs 130 from Rs 77.
• Move stock valuations to merged financials.
• Expect revival in long-term growth.
• Merged company offers compounded growth rate of 38 percent in operating income over the next three financial years.
• Merger is crucial to address inadequacy in data spectrum.
• Idea’s cut in gearing and early closure of merger trigger.
• Expect integration costs and full merger synergies of Rs 14,000 crore annually by March 2023.

Credit Suisse on India Outlook 2018

• Maintain cautiously optimistic outlook on Indian equities.
• Enthused by reform momentum.
• Fiscal crunch, several state elections, earnings downgrades and high valuations make nervous.
• Do not expect sharp and prolonged correction in Indian equities.
• Themes to play:-
• Rural demand revival and financial inclusion.
• Affordable housing beneficiaries.
• Infrastructure focus to continue.
• Energy sector continues to attract attention.
• NPA resolution to accelerate.
• rev-share against aggressive competition.

IIFL on Motherson Sumi

• Maintained ‘Buy’; raised price target to Rs 450 from Rs 300.
• Motherson is a global giant built on sound operating/financial principles.
• History of value creation through acquisitions offers sizeable upside risk.
• Pickup in autos to drive acceleration in Motherson’s growth.
• Increase in content per vehicle a key growth driver.
• Good mix of business with steady growth and turnaround potential to drive earnings.
• Expect revenue, operating income and earnings per share to grow at a compounded rate of 16 percent, 16 percent and 28 percent respectively over the financial years through March 2020.

IDFC Securities on PI Industries

• Maintained ‘Outperform’; raised price target to Rs 1,085.
• Expect PI to bounce back to growth from the second half of the current financial year, led by new product launches and exports business.
• CSM business – Strong recovery expected.
• Robust orderbook provides revenue visibility for next three years.
• Unique business model enables growth despite headwinds.
• Expect revenue and net profit to grow at a compounded rate of 12 percent and 6 percent over the financial years through March 2020.
• Foray into non-agrochemical CSM to result in substantially re-rating in the medium term.

Jefferies on Oil & Gas

• Expects oil prices to hold the late 2017 gains, therefore, forecasting $63 Brent.
• Rising oil a headwind for India’s macro balances but is manageable.
• Refining margins may moderate down as demand-supply looking balanced.
• Expect model steady rise in marketing margins, but uncertain in a heavily political 2018-19.
• ONGC and Indian Oil are preferred; Retains Underperform on Reliance, Bharat Petroleum and Hindustan Petroleum.

• U.S. withholds security aid to Pakistan over terrorism concerns
• Palladium poised to break another record
• Idea Cellular to raise Rs 3,250 crore selling shares to promoter entities
• India to issue Rs 80,000 crore bank recap bonds this fiscal
• Hindalco to bid for $2.5 billion aluminum firm Aleris
• Fitch Ratings says India will sail past other emerging economies
• System secure, UIDAI says after reports of Aadhaar data available for Rs 500

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.13 percent to 10,546.

Asian stocks are on the cusp of their best week in almost six months as investors around the world pile into equities at the start of 2018 amid robust economic data from the U.S. to Europe to China.

Commodities

• West Texas Intermediate crude was little changed at $61.92 a barrel.
• Gold dipped 0.1 percent to $1,320.89 an ounce.
• The Bloomberg Commodity Index was flat Thursday, around its highest since last February.

Here are some key scheduled events for Friday:

• Asia has a smattering of lower-tier data, including inflation for Taiwan and foreign reserves data for Thailand, which has been contending with a rising currency. India releases its estimate for 2018 economic growth.
• Europe brings German retail sales, EU CPI and French consumer confidence.
• Canada also reports labor market data Friday, while the U.S. reports on trade and factory orders. Philadelphia Fed President Patrick Harker and Cleveland Fed President Loretta Mester speak on panels.