Nifty Clocks Longest Stretch Of Gains In Over Eight Months

Indian equity benchmarks rose for seventh straight day on the back of sharp drop in crude oil and a day after the Reserve Bank of India announced hike in bond purchases to boost liquidity.

The S&P BSE Sensex rose 0.38 percent or 137 points to 36,484 and the NSE Nifty 50 Index climbed 0.54 percent or 59 points to 10,967. In the last seven sessions Nifty has advanced 4.57 percent and clocked its longest stretch of gains since April.

Investor confidence was also buoyed in sectors from cement to consumer goods after Prime Minister Narendra Modi said that the country’s unified sales tax regime had stabilized and is reaching a stage where 99 percent of goods can be at or under the 18 percent tax slab.

Shares of PSU banks rallied after a government official said they may get an additional Rs 40,000 crore in recapitalisation.

Seventeen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Realty Index's 3 percent gain. On the flipside, S&P BSE IT Index dropped over a percent after rupee appreciated against the dollar.

Mid- and small-cap shares outperformed their larger peers as the S&P BSE MidCap Index rose 1.5 percent and the S&P BSE SmallCap Index climbed 1.1 percent.

Shares of PSU banks surged after a government official said that the state-run bank recapitalisation will be funded via bonds in FY19, Bloomberg reported.

• Most state-run banks except State Bank of India, Punjab National Bank, Bank of Baroda, Indian Bank to be part of recap: official.
• Bank of India, Allahabad Bank, Corporation Bank, Bank of Maharashtra may exit central bank’s corrective action framework soon on improving numbers
• Allahabad Bank surges as much as 5.8 percent, most since Nov. 15; Bank of India up 7.7 percent to highest since Sept. 3.
• Bank of Maharashtra up 7.8 percent; Corporation Bank jumps 3.9 percent.
• Second supplementary demand for grants may be tabled in Parliament Thursday: official.

Shares of Allahabad Bank surged as much as 5.8 percent and Bank of India jumped 7.65 percent as both the banks may soon come out of Reserve Bank of India's Prompt Corrective Action (PCA) framework, Bloomberg reported citing a government official.

Shares of the Anil Ambani-led company fell as much as 13.33 percent, the most since Sept. 24, to Rs 13.65.

The Economic Times reported that the department of telecommunications can’t approve the deal to trade airwaves between Reliance Jio and Reliance Communications due to non-confirmation of guidelines.

Shares of the Secunderabad-based explosives maker rose as much as 5.31 percent to Rs 269.80 after it won an order worth Rs 181 crore from Satish Dhawan Space Centre, SHAR Shriharikota.

Tata Steel is in discussions with banks for an about $500 million facility to partly refinance the company’s rupee-denominated loans raised in May for acquiring the assets of distressed Bhushan Steel, Bloomberg reported citing unidentified people familiar with the matter.

The planned external commercial borrowing has been approved by the central bank, the above-mentioned people said.

Tata Steel stock up 0.35 percent at Rs 532.45.

Shares of the Mumbai-based telephone services provider in Maharashtra and Goa rose as much as 14.29 percent, the most in nearly two months, to Rs 4.40.

The Mumbai branch of National Companies Law Tribunal has sanctioned scheme of arrangement among Bharti Airtel and Tata Teleservices (Maharashtra). The scheme will take effect after obtaining necessary approval from the Delhi branch of NCLT, Tata Teleservices said in an exchange filing.

Interest rate sensitive stocks rose on hopes of softer liquidity after the Reserve Bank of India said it will buy more government bonds than earlier planned as it looks to address the financial sector's liquidity crunch.

• Nifty Realty Index rose as much as 2.95 percent
• Nifty PSU Bank Index climbed 3.23 percent
• Nifty Bank Index advanced 0.7 percent
• Nifty Financial Services Index jumped 1.2 percent
• Nifty Auto Index rose 1.1 percent

In a pre-election year, sales fall and sales go up substantially, RC Bhargava, chairman of Maruti Suzuki told reporters in a press briefing.

Key highlights of the conference:

• Yet to see whether sales will go up next year.
• No new model launches this year which significantly affected growth numbers.
• Inventories will come down to low levels in January, this factor will play in next three months.
• Will have one new model launch in the first half of next year which will push up sales numbers.
• Don't think electrification of small cars can happen by subsidies, will need to have improvement in technology.
• CNG vehicle growth this year has been 50 percent.
• There will be some reduction in sales if Rs 12,000 cess on petrol and diesel cars is imposed.
• Expect growth of 5-6 percent in fourth quarter, double digit growth looks difficult.
• No progress for shifting from Gurgaon plant, government has not given land yet.
• By Dec 2019, all our vehicles will be converted to BSVI.
• In terms of EVs introduction, we haven't got any proposal to put a cess on cars and use that money to subsidize on electronic vehicles (EVs)
• There will be some reduction in sales if Rs 12,000 cess on petrol and diesel cars is imposed.

• SKF India: The Mumbai-based ball bearings maker rose as much as 0.57 percent to Rs 1,937.90. Trading volume was more than 40 times its 20-day average.
• Hathway Cable and Datacom: The Mumbai-based cable television service provider fell as much as 1.77 percent to Rs 30.690. Trading volume was more than 20 times its 20-day average.
• Prism Johnson Cement: The Hyderabad-based cement maker rose as much as 12.73 percent, the most in nearly five months, to Rs 97.40. Trading volume was more than 20 times its 20-day average.
• Mahindra CIE Automotive: The Mumbai-based auto parts maker rose as much as 1.03 percent to Rs 251. Trading volume was more than 12 times its 20-day average.

Indian equity benchmarks came off intraday highs as IT heavyweights — Infosys and TCS came under selling pressure tracking appreciation in rupee against dollar.

The S&P BSE Sensex rose 0.2 percent to 36,419 and the NSE Nifty 50 Index advanced 0.3 percent to 10,941, retreating from 10,963 hit earlier in the day.

The overall market breadth was positive as 1,474 shares were advancing while 731 were declining on the BSE.

Seventeen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Realty Index's 2.4 percent gain. On the flipside, the S&P BSE IT Index was top loser, down 1.4 percent.

Shares of the Hyderabad-based metal alloys maker rose as much as 6.22 percent to Rs 128.15 after it finalised order worth Rs 500 crore, Mishra Dhatu Nigam said in an exchange notification.

Shares of the Kolkata-based cement maker rose as much as 4.8 percent to Rs 17,690, ts highest level since Sept. 27.

Trading volume was quadruple its 20-day average, according to data compiled by Bloomberg.

Nifty’s 11,000 call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 22.6 percent to Rs 71.10. Over 1 lakh shares were added to the open interest which stood at over 45.22 lakh shares.

Click here to see the complete options chain

Shares of the Mumbai-based TV broadcast company extended decline for second day and fell as much as 3.4 percent to Rs 447 after Bank of America Merrill Lynch downgraded the stock to underperform from neutral.

BofAML in a note said:

• Liquidity concerns to surface if company doesn’t find a strategic investor by April 2019.
• Company has already acknowledged structural issues like lack of technological expertise.
• Near term pressure on broadcast ad/subscription due to non-extension of Dec. 29 deadline to select al-la carte channels.
• Investors are concerned with cash invested in overseas funds like Poseidon and Actinium.
• Expect Jio to disrupt media landscape in next 12-18 months.

Shares of Ajay Piramal-led company rose as much as 6 percent, the most since Oct. 31, to Rs 2,310.30 after its board approved amendment to the terms of non-convertible debentures by modifying rating trigger threshold from ‘A+’ to ‘BBB+’.

The debenture-holders shall have the option to call for early redemption of the non-convertible debentures in case credit rating of the issuer falls to ICRA ‘BBB+’ or below. Board will also consider bond issue on Dec. 21 of up to Rs 3,000 crore, Piramal Enterprises said in an exchange filing.

• CG Power has 20.2 lakhs shares change hands in a block on NSE. Stock up 1.12 percent at Rs 40.75.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of oil marketing companies rose after Brent Crude fell to lowest level in over 14 months to $56 per barrel in yesterday's session.

• HPCL rose as much as 2.87 percent to Rs 238
• Bharat Petroleum advanced 1.9 percent to Rs 359.95
• Indian Oil rose 2 percent to Rs 147.75

Shares of the Mumbai-based construction company rose as much as 11.31 percent to Rs 152.10 after its joint venture secured an order worth Rs 1,349 crore.

J Kumar-JM Mhatre joint venture in which J Kumar Infraprojects is a lead partner received letter of acceptance from NHAI for construction of Dwarka Expressway in Delhi on EPC mode, the company said in an exchange filing.

Shares of non-banking housing finance lenders rose after Reserve Bank of India said that it will buy more government bonds than earlier planned as it looks to address the financial sector's liquidity crunch.

Defaults in repayments by infrastructure finance firm IL&FS Ltd. and its subsidiaries led to fears of a contagion in the financial and credit markets. This led to concerns that non-banking lenders would be unable to refinance their market borrowings, impairing growth.

Indiabulls Housing Finance was the top gainer in the Nifty gainer up over 5 percent.

Indian equity benchmarks edged higher led by Reliance Industries, ITC and Asian Paints. However, the gains were capped as IT heavyweights dropped tracking sharp appreciation in rupee against the dollar.

The S&P BSE Sensex rose 0.37 percent or 134 points to 36,483 and the NSE Nifty 50 Index advanced 0.4 percent or 42 points to 10,951.

Seventeen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Oil & Gas Index's 0.9 percent gain. On the flipside, the S&P BSE Information Technology Index was top loser, down 0.6 percent.

The mid- and small-cap shares were also witnessing buying interest as the S&P BSE MidCap Index rose 0.6 percent and the S&P BSE SmallCap Index climbed 0.5 percent.

Indian rupee extended gains after it rose the most since 2013 in yesterday's session.

The home unit rose as much as 0.8 percent or 59 paise to 69.86 per dollar on the back of subdued oil prices and a rally in stock markets along with foreign fund inflows.

Meanwhile, yield on the 10-year government bond dropped as much as 12 basis points to 7.22 percent after the Reserve Bank of India decided to inject more cash into the banking system through open market operations.

India’s rupee may extend gains in line with other emerging-market currencies after the currency gained the most since 2013 on Tuesday.

Subdued oil prices and a rally in stock markets along with foreign fund inflows are likely to underpin the rupee, traders said. The rupee rose 1.5 percent on Tuesday to end at 70.4225 with implied forwards suggesting the spot rupee may start trading at 70.17 per dollar on Wednesday. Chartists expect resistance at 69.04, which is the 200-day moving average for the pair.

Meanwhile, bonds too are expected to rally after the Reserve Bank of India decided to inject more cash into the banking system through open market operations.

Consequently, the total injection of durable liquidity for the month of December 2018 would amount to Rs 50,000 crore.

The central bank will purchase Rs 50,000 crore in the month of January 2019 also and consider a similar quantum of OMO purchases until March 2019. Traders will also eye the release of the RBI minutes later in the day and the Fed’s rate decision. The 10-year bond yield fell 12 basis points to end at 7.35 percent, the lowest since April this year.

Source: Bloomberg

Elara Capital on Consumer Durables

• Expect a blissful 2019 for the consumer appliances industry.
• Replacement cycle shortening which could drive growth in some product segments.
• Lightings up on volume but down on prices.
• In-house manufacturing and outsourcing preferred over imports.

PhillipCapital on Jubilant FoodWorks

• Maintained ‘Buy’ hiked target price to Rs 1,845 from Rs 1,760.
• Poised to deliver strong Q3FY19 results.
• Channel checks suggest that same store sales growth in October-November 2018 was 15 percent.
• Deliveries to the railway station have started gaining momentum.

Citi on Asset Management Companies

• Lower expense ratios to come into effect from April.
• Every 5 basis points that AMCs have to absorb, impacts net profit by 18 percent on an average for top 10 players.
• HDFC AMC will look to pass on most of this to distributors.
• ICICI Securities can see a 2 percent impact on revenue if commissions are cut by 20 basis points.

Edelweiss on Biocon

• Initiated ‘Reduce’ with target price of Rs 430.
• Price erosion to intensify since competition will be very stiff in monoclonal antibody.
• Market share gains will be very difficult in insulin as innovator will be aggressive in protecting its turf.
• Expect revenue CAGR of 15 percent over the next ten years at an Ebitda margin of 35 percent.
• Rich valuations leave no room for surprise.

Insider Trading

• Nandan Denim promoter Vedprakash Chiripal acquired 29,000 shares on Dec. 17.

(As reported on Dec.18)

Who’s Meeting Whom

• Blue Star to meet IndiaNivesh Securities on Dec. 20.
• Shoppers Stop to meet RARE Enterprises, JM Financial Services and other investors on Dec. 19.
• Container Corporation of India to meet IDFC Securities, Philip Capital from Dec. 19- Feb. 12.

• The Reserve Bank of India announced plan to scale up liquidity infusion via purchase of government bonds.
• The central bank will now conduct two open market operation purchases of Rs 15,000 crore each in December, scaling up its total liquidity injection to Rs 50,000 crore for the month, it said in a media statement.

• Hathway Cable, SITI Networks, DEN Networks, Sun TV Network, TV18 Broadcast, Zee Entertainment: TRAI sets maximum retail price of pay television channels that are offered by 42 broadcasters in the country to subscribers.
• J Kumar Infraprojects joint venture received EPC orders worth Rs 1,349 crore from National Highways Authority of India for Delhi.
• NTPC said that unit 6 of 500 MW capacity of Feroze Gandhi Unchahar Thermal Power Station had been restored and synchronized with the grid after boiler restoration.
• Piramal Enterprises board approved amendment to the terms of non-convertible debentures by modifying rating trigger threshold from ‘A+’ to ‘BBB+’. The debenture-holders shall have the option to call for early redemption of the non-convertible debentures in case credit rating of the issuer falls to ICRA ‘BBB+’ or below. Board will also consider bond issue on Dec. 21 of up to Rs 3,000 crore.
• IDFC Bank sets Dec. 31 as record date for determining the shareholders of Capital First who shall be entitled to receive shares of the bank as consideration to the scheme of amalgamation of Capital First and its two arms with IDFC Bank. In its press release, the bank also set Dec. 18 as the effective date of merger.
• Karnataka Bank tied up with Paisabazaar.com to offer Bank’s home loan products to customers.
• Mahindra & Mahindra Financial Services board to meet on Dec. 21 to consider issuing non-convertible debentures with a shelf limit of Rs 10,000 crores.
• Srei Equipment Finance said it will raise Rs 300 crore via non-convertible debentures
• Yes Bank said that it sold 2.13 percent stake in Fortis Healthcare. The bank had been selling the shares of the healthcare company in various tranches.
• PVR board said it was considering raising funds on Dec. 21.
• Lemon Tree Hotels signed license agreement for 69 room property in Pune. This hotel is expected to be operational by March next year.

• Oil spirals below $47 as dark clouds envelop demand outlook
• India plans to pay five Iran banks for oil purchases
• The world’s most controversial coal mine is set to break ground
• Gujarat pardons power bills of rural and poor consumers
• NSE gets SEBI’s nod to launch weekly options on Nifty 50
• Yes Bank recommends Brahm Dutt for chairman
• India’s biggest money manager’s outlook on 2019
• India’s shadow-bank risks put China in the shade
• RBI, government are like husband and wife, says Manmohan Singh
• How the online medicine sale ban will impact consumers
• Working to bring 99% things in sub-18% GST slab, says PM Modi

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,985 as of 7:21 a.m.

Markets are likely to react positively after the Reserve Bank of India said it will buy more government bonds than earlier planned as it looks to address the financial sector's liquidity crunch.

The central bank will now conduct two open market operation purchases of Rs 15,000 crore each in December, scaling up its total liquidity injection to Rs 50,000 crore for the month, it said in a media statement today. It had earlier planned to purchase Rs 40,000 crore worth of government bonds during the month.

Asian stocks traded mixed Wednesday following a volatile U.S. session that saw stocks end the day flat and crude oil slump more than 7 percent. Treasuries extended gains and the yen climbed.

Stocks in Japan recovered early losses and those in Hong Kong edged up, while Australian shares underperformed. Futures on the S&P 500 Index nudged higher after U.S. equities closed flat, with investors bracing for Wednesday’s Federal Reserve policy decision against the backdrop of recent turmoil in global markets that’s put equities on course for the worst year since 2008.

Stocks

• The MSCI Asia Pacific Index rose 0.1 percent as of 10:31 a.m. Tokyo time.
• Japan’s Topix index fell 0.1 percent.
• The Shanghai Composite advanced 0.1 percent.
• South Korea’s Kospi rose 0.5 percent.
• Australia’s S&P/ASX 200 Index fell 0.2 percent.
• Hong Kong’s Hang Seng Index added less than 0.1 percent.
• S&P 500 futures rose 0.4 percent. The S&P 500 Index was little changed at the close of trading in New York.

Currencies

• The yen rose 0.1 percent to 112.42 per dollar.
• The offshore yuan added 0.1 percent to 6.8881 per dollar.
• The Bloomberg Dollar Spot Index fell 0.1 percent.
• The euro rose 0.2 percent to $1.1381.
• The pound was at $1.2664, up 0.2 percent.

Commodities

• West Texas Intermediate crude rose 0.3 percent to $46.37 a barrel, after falling more than 7 percent.
• Gold was little changed at $1,249.11 an ounce.