Sensex, Nifty Close Higher For The Second Time This Week

Indian equity benchmarks closed higher for the second time this week, steadying after a decline that followed a 5.6 percent gain in January and a 28 percent advance in 2017. The S&P BSE Sensex Index closed 0.4 percent higher to 34,297.47, while the NSE Nifty 50 Index also closed 0.4 percent higher at 10,545.50.

The market breadth was tilted in favour of sellers. Eleven out of 19 sectoral gauges compiled by BSE fell, led by S&P BSE Telecom Index’s 1.2 percent decline. On the other hand, S&P BSE Oil & Gas Index was the top sectoral gainer, up 0.9 percent.

TTK Healthcare

• Stock rose as much as 20.8 percent to Rs 1,334.
• Trading volume was 14.2 times its 20-day average.

Gala Global Products

• Stock rose as much as 14.8 percent to Rs 284
• Trading volume was 2.6 times its 20-day average.

Max Ventures & Industries

• Stock rose as much as 8.8 percent to Rs 81.95.
• Trading volume was 3.3 times its 20-day average.

Shares of the country's second largest public-sector lender fell as much as 14.12 percent to Rs 125.25 after its management clarified on Rs 11,000 crore fraudulent transaction at one of its branches Mumbai.

Punjab National Bank's management says:

• We detected the fraud in the 3rd week of Jan. and approached CBI on Jan. 29, filed FIR on Jan 30.
• We have conducted consortium meetings and other lenders are seized with the case.
• The employee did not accurately enter information in our systems hence we have taken action against them.
• No concrete plan from Nirav Modi and others to repay money so far, only vague offers.
• We are examining if there were any systemic failures.
• Have not received any direction from RBI as yet.
• Examining all aspects of forensic audit, course of action to be decided soon.
• Have conducted consortium meetings, working on modalities.
• Premature to talk about legal actions to be taken.
• We don’t have any funded exposure as of now.
• Whatsoever is our liability we’ll take care of it.
• It was internally detected when customer came for renewal of LoU.
• As it was not entered into core banking system it was undetectable.
• Our bank’s credit exposure to these 2 groups is under Rs 1,000 crore.
• LoU has been converted into a funded liability hence classified as contingent liability.

• Indian equity benchmarks held on to gains led by ICICI Bank, Infosys, Bajaj Auto and HDFC.
• The S&P BSE Senesex rose 216 points to 0.6 percent to 34,374 and the NSE Nifty 50 Index advanced 67 points or 0.6 percent to 10,568.
• Broader markets were underperforming the large cap counterparts. The S&P BSE MidCap Index fell 0.13 percent and the S&P BSE SmallCap Index fell 0.7 percent.
• Eleven out of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal Index's 1 percent gain. On the other hand, the S&P BSE Consumer Durables Index's 0.5 percent drop.

• Punjab National Bank has 12.3 lakh shares change hands in a block deal.

Buyers and sellers were not immediately known

Source: Bloomberg

Nearly three-fourths of the Indian blue-chip companies in the country’s benchmark NSE Nifty 50 index reported financial results that matched or surpassed analyst estimates in the third quarter.

Aster DM Healthcare's Rs 980 crore initial public offer (IPO) was subscribed 59 percent as of 12:00 pm on the final day of subscription.

• Portion reserved for qualified institutional buyers subscribed 51 percent.
• Non-institutional bidder portion subscribed 28 percent.
• Retail portion subscribed 76 percent.

Source: Company PR

Shares of small-cap companies were underperforming their large-cap counterparts. The gauge of small-cap shares on the BSE — the S&P BSE SmallCap Index erased its intraday gains and fell 0.14 percent led by Gitanjali Gems.

Shares of the Kolkata-based cement maker rose as much as 3.7 percent to Rs 17,436 after it commissioned 3.6 million tonnes per annum cement grinding unit at Shriganganagar in Rajasthan.

India's wholesale price index in January eased to 2.84 percent versus 3.58 percent in December. Bloomberg poll had estimated inflation to come in at 3.2 percent.

• Jan WPI core inflation rate at 3.5 percent versus 3.1 percent (MoM)
• Nov WPI inflation revised to 4.02 percent versus 3.93 percent provisional
• WPI food inflation at 1.65 percent versus 2.91 percent (MoM)
• Food articles inflation at 3.00 percent versus 4.72 percent (MoM)
• Manufactured products inflation at 2.78 percent versus 2.61 percent (MoM)
• Fuel and power inflation at 4.08 percent versus 9.16 percent (MoM)
• Primary articles inflation at 2.37 percent versus 3.86 percent (MoM)
• Jan WPI at 2.84 percent versus 3.58 percent (MoM); Bloomberg estimate of 3.2 percent

Shares of the Delhi-based jeweller came off day's low after the company said that it is not related with to Rs 11,000 crore Punjab National Bank fraud.

The company added that it does not do business through letter of credit.

The stock was trading at Rs 359.35, down 4.4 percent. Earlier in the day, the stock fell as much as 20 percent to Rs 302.25.

• Indian equity benchmarks were trading near intraday highs led by Infosys, ICICI Bank and HDFC.
• The S&P BSE Sensex rose 0.6 percent or 223 points to 34,379 and the NSE Nifty 50 Index gained 71 points otr 0.67 percent to 10,570.
• The broader markets came off intraday highs with the S&P BSE SmallCap erasing gains and the S&P BSE MidCap Index up 0.3 percent.
• Overall market breadth was neutral as 1,250 shares were advancing while 1,254 were declining on the BSE.

Market Snapshot

• Jet Airways: Shares of the Mumbai-based airline fell as much as 4 percent to Rs 771 after its net profit declined for second quarter in a row. Jet Airways' net profit declined 46 percent to Rs 165 crore while its revenue grew 10 percent to Rs 6,086 crore.
• Nestle India: The Mumbai-based dairy products and baby food maker rose as much as 5.2 percent to Rs 7,645 after its net profit rose 60 percent to Rs 312 crore. Meanwhile, its sales in 2017 crossed Rs 10,000 crore for the first time since its existence in India.
• Cox & Kings: The Mumbai-based travel company rose as much as 8.3 percent to Rs 273 after its net profit in December quarter rose over six times to Rs 96 crore from Rs 15 crore a year earlier.
• Camlin Fine Sciences: The Mumbai-based specialty chemical firm fell as much as 5.7 percent to Rs 121.70 after its net loss widened to Rs 10 crore from Rs 5 crore.
• GTPL Hathway: The Ahmedabad-based cable TV service provider rose as much as 4 percent to Rs 174.95 after its net profit rose six times to Rs 24 crore from Rs 4 crore a year earlier.
• Specialty Restaurants: The Mumbai-based restaurant chain operator rose as much as 7 percent to Rs 162 after it turned profitable in December quarter. The company reported net profit of Rs 70 lakhs versus loss of Rs 4 crore.

Shares of the country's second biggest state-run lender fell as much as 8.6 percent to Rs 133.35. The stock is down nearly 17 percent since yesterday after the lender said it detected fraudulent transactions worth approximately Rs 11,000 crore at one of its branches in Mumbai.

Shares of the banks and companies reportedly impacted by the fraud also declined in early trade.

• Axis Bank and Allahabad Bank: Shares of the banks fell as much as 2.37 percent and 5.5 percent respectively, after fraudulent letter of understandings (LoUs) were issued in favour of these banks at Hong Kong.
• Gitanjali Gems: The Mumbai-based jeweller fell as much as 18.7 percent, the most in over three months, to Rs 47.50 after its promoter Mehul Choksi's name surfaced in the PNB fraud case.

Shares of Zee Learn and MT Educare rose as much as 9.3 percent and 5 percent respectively.

Zee Learn will acquire as much as 44.5 percent stake in MT Educare for a total consideration of Rs 200 crore, the company said in a notification to the stock exchanges today.

MT Educare will issue 3.2 crore shares to the Essel Group company on a preferential basis at a price of Rs 62.57 each.

The acquisition will trigger an open offer for an additional 26 percent stake in MT Educare, the price of which has been fixed at Rs 72.76 per share, according to a separate notification to the exchanges. Axis Capital has been appointed as the manager for the open offer.

Indian equity benchmarks edged higher led by HDFC Bank, ICICI Bank, Reliance Industries and Infosys amid strong Asian markets.

The S&P BSE Sensex rose 0.46 percent or 155 points to 34,305 and the NSE Nifty 50 Index advanced 0.45 percent or 47 points to 10,547.

The mid-cap and small-cap shares were in line with their larger counterparts as the S&P BSE MidCap Index rose 0.6 percent and the S&P BSE SmallCap Index gained 0.4 percent.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Metal Index's 1 percent gain.

• Indian rupee opened higher at 63.97 per dollar against yesterday's close of 64.09.

Sovereign bonds will focus on the inflation report later in the day which is expected to show that wholesale prices rose at a slower pace last month. Meanwhile, surge in U.S. treasury yield is likely to weigh on the sentiment.

Yield on the 10-year note has been stuck around 7.50 percent in the last couple of sessions in absence of any news trigger. Traders will also watch out for trade deficit data expected later today.

In the currency market, rupee is likely to take cues from local stocks. With equities across Asia trading strong, we may see the local currency opening higher and trading in a range of 63.70-64.15 a dollar in the session.

Shares of Zee Learn and MT Educare will be in focus today as the former will be acquiring latter.

Key deal highlights:

• Zee Learn to acquire stake in MT Educare for Rs 200 crore.
• Zee Learn will buy 31.96 million shares of MT Educare at Rs 62.57 each.
• Zee Learn to make open offer for 26 percent more stake in MT Educare at Rs 72.76 per share.
• As of Sep. 30 MT Educare had total debt of Rs 196 crore,

• Preferential issue of shares made to Zee Learn worth Rs 200 crore
• Funds to be utilised to reduce debt and to make a small acquisition
• Cannot comment whether MT Educare will be participating in open offer
• Fresh issue of shares via preferential issue
• Zee Learn will have 44.5 percent stake in MT Educare before the open offer
• Deal seen as a consolidation in the education sector
• This is a milestone achievement in education sector

Sun Pharma Q3 (YoY)

• Revenue down 16 percent at Rs 6,653 crore.
• Net profit down 75 percent at Rs 365 crore.
• EBITDA down 41 percent at Rs 1453 crore.
• Margin at 21.8 percent versus 30.9 percent.

Jet Airways Q3 (YoY)

• Revenue up 10 percent at Rs 6,086 crore.
• Net profit down 46 percent at Rs 165 crore.
• EBITDAR up 3 percent at Rs 865 crore.
• Margin at 14.2 percent versus 15.2 percent.

Apollo Hospitals Q3 (YoY)

• Revenue up 13 percent at Rs 1,896 crore.
• Net profit down 8 percent at Rs 67 crore.
• EBITDA up 14 percent at Rs 221.5 crore.
• Margin at 11.7 percent versus 11.5 percent.

Nestle Q3 (YoY)

• Revenue up 15 percent at Rs 2,601.5 crore.
• Net profit up 60 percent at Rs 312 crore.
• EBITDA up 37.5 percent at Rs 533.5 crore.
• Margin at 20.5 percent versus 17.1 percent.

Anant Raj Q3 (YoY)

• Revenue down 11 percent at Rs 120 crore.
• Net profit down 19 percent at Rs 17 crore.
• EBITDA down 23 percent at Rs 34 crore.
• Margin at 28.3 percent versus 32.4 percent.

Balkrishna Industries Q3 (YoY)

• Revenue up 23.4 percent at Rs 1,106 crore.
• Net profit up 2 percent at Rs 189.5 crore.
• EBITDA up 4 percent at Rs 290 crore.
• Margin at 26.2 percent versus 31.0 percent.

Cox and Kings Q3 (YoY)

• Revenue down 2 percent at Rs 1356 crore.
• Net profit up at Rs 96 crore versus Rs 15 crore.
• EBITDA up 68 percent at Rs 168.5 crore.
• Margin at 12.4 percent versus 7.3 percent.

For a complete list of earnings reaction to watch, click here

• Sun Pharma said it will miss FY18 guidance marginally.
• Zee Learn to acquire stake in MT Educare for Rs 200 crore
• Torrent Power signed a pact with Siemens Gamesa to set up 120 MW wind power project.
• Sunteck Realty board approved merger of 3 subsidiaries with itself.
• Infibeam to raise Rs 40 crore by issuing warrants to Network 18.
• Punj Lloyd board approved restructuring plan to issue shares, bonds to certain lenders and promoters.
• Indocount to set up textile unit in Germany.
• Indiabulls Real Estate to finalise options for selling its residential and commercial property in Chennai.

For a complete list of stocks to watch, click here

• Nifty February futures trade at 10,495.2, discount of 5.7 points versus premium of 3.4 points.
• February series: Nifty open interest down 1 percent, Bank Nifty open interest up 13 percent.
• India VIX ended at 17.1, down 3.9 percent.
• Max open interest for February series at 11,100 call strike (open interest at 53.9 lakh, down 5.4 percent).
• Max open interest for February series at 10,500 put (open interest at 58.3 lakh, up 8 percent).

Stocks Seeing High Open Interest Change

Bulk Deals

• Unichem Labs: Nordea 1 - Indian Equity Fund sold 5.4 lakh shares or 0.6 percent equity at Rs 379.26 each.
• MT Educare: India Max Investment Fund sold 3 lakh shares or 0.8 percent equity at Rs 71.15 each.
• ADF Foods: Kuber India Fund sold 1.10 lakh shares or 0.5 percent equity at Rs 249 each.

Safari Industries

• Malabar India Fund bought 5.89 lakh shares or 2.6 percent equity at Rs 520 each.
• Rohinton Screwala bought 2.79 lakh shares or 1.3 percent equity at Rs 520 each.
• Tano India Private Equity Fund II sold 9.84 lakh shares or 4.4 percent equity at Rs 520.01 each.

Jash Engineering

• India Multi Bagger Fund I bought 99,600 shares at Rs 175 each.
• UNIFI AIF 2 sold 1.40 lakh shares at Rs 176.43 each.

IPO

• Aster DM Healthcare continues on day 3. The issue is subscribed 0.43 times.

Trading Tweaks

• Praxis Home Retail circuit filter revised to 10 percent and shifted to B group.
• SORIL Infra Resources circuit filter revised to 5 percent.
• DPSC two day offer for sale starts.
• Unichem Labs ex-date to determine buyback eligibility.

Economic Data To Watch

• 12pm: India Jan. Wholesale Price Inflation YoY; Estimate 3.20 percent (prior 3.58 percent)

India Jan. trade balance; estimate -$13 billion (prior -$14.88 billion)

• Exports; no estimate (prior +12.4 percent)
• Imports; no estimate (prior +21.1 percent)

• PNB Fraud: ED files money laundering case against Nirav Modi, others
• Modi takes a u-turn on free trade
• Sun Pharma Q3 profit falls on higher tax outgo, weak taro results
• Jet Airways profit falls for second straight quarter
• PNB Fraud: Big jewellers Gitanjali Gems, Gili, Nakshatra under scanner
• Nestle crosses Rs 10,000 crore sales mark in 2017
• Why more than half of India’s bad loans may reach insolvency court
• India, Singapore exchanges eye trading link to Gujarat
• Dairies rush to tap India’s growing love for cheese
• Turmoil could help restore more normal markets: El-Erian
• Forced liquidation not the intention of new RBI rules, says Sanjeev Sanyal
• Trump trade policy incoherence

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.8 percent or 87 points to 10,550 as of 6:54 a.m.

The yen extended an advance and a rally in global stocks continued in Asia as equity investors showed signs of warming to a world with inflation and a quicker pace of tightening for U.S. monetary policy following this month’s slide in risk assets.

Shares in Tokyo jumped at the open, though similar starts to trading have faltered this week. Stocks also advanced in Australia, while S&P 500 Index futures were little changed.

Here are some important things to watch out for this week:

• Lunar new year celebrations for the Year of the Dog begin, affecting China, Hong Kong, Taiwan, Singapore, Malaysia and Indonesia. Chinese mainland markets are closed Feb. 15-21.
• Australia releases January employment data on Thursday.
• Earnings season continues in full swing.

Bonds

• The yield on 10-year Treasuries was at 2.90 percent. It rose seven basis points on Wednesday.
• Australia’s 10-year yield rose eight basis points to 2.93 percent.

Commodities

• West Texas Intermediate rose 0.4 percent to $60.82 a barrel after jumping the most this year.
• Gold climbed 0.2 percent to $1,353.47 an ounce.