Sensex, Nifty Snap Three-Day Losing Streak Ahead Of Exit Polls

Indian equity benchmarks snapped their three-day losing streak led Kotak Mahindra Bank, Infosys, Reliance Industries and HDFC twins ahead of exit polls for state elections due later in the day.

The S&P BSE Sensex rose 1 percent or 361 points to 35,673 and the NSE Nifty 50 Index climbed 0.9 percent or 93 points to 10,694.

Kotak Mahindra Bank surged the most in over four years, after CNBC-TV18 reported, quoting unidentified people, that Warren Buffett’s Berkshire Hathaway Inc. is in talks to buy a 10 percent stake in the private sector lender. However, Kotak Mahindra Bank said it was unaware of any plans by Berkshire Hathaway to buy a stake.

Thirteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Bankex Index's 1.7 percent gain. On the flipside, the S&P BSE Utilities Index was top loser, down percent.

Mid- and small-cap shares underperformed their larger peers as the S&P BSE MidCap Index rose 0.2 percent while S&P BSE SmallCap Index fell 0.3 percent.

Government has appointed Krishnamurthy Subramanian as the Chief Economic Adviser for a term of three years.

Krishnamurthy Subramanian is currently serving as associate professor and executive director, Centre For Analytical Finance at Indian School of Business.

• Dilip Buildcon: The Bhopal-based road developer rose as much as 4.32 percent, the most in three weeks, to Rs 451.10 after it won Rs 1,000 crore from Mahanadi Coal Field.
• Kotak Mahindra Bank: The Uday Kotak-led private sector lender rose as much as 14 percent, the most in over eight years, to Rs 1,345.95 after CNBC-TV18 reported, quoting unidentified people, that Warren Buffett’s Berkshire Hathaway Inc. is in talks to buy a 10 percent stake in the private sector lender.
• Siemens: The Mumbai-based electrical power equipment maker rose for second day in a row and gained as much as 4 percent to Rs 960 after Macquarie yesterday upgraded the stock to ‘Outperform’ from ‘Underperform’; hiked price target to Rs 1,128 from Rs 811.
• Tube Investments: The Chennai-based metal products maker rose as much as 4.8 percent to record high of Rs 336.65.

Shares of the Mumbai-based airline operator erased gains and fell as much as 2.32 percent to Rs 271.25 after credit rating agency downgraded its long-term rating on loans and non-convertible debenture to C from B.

ICRA rating revision on delay in liquidity initiative, Jet Airways said in an exchange filing.

• Finolex Industries: The Pune-based PVC pipes maker rose as much as 1.5 percent to Rs 524. Trading volume was 17 times its 20-day average.
• APL Apollo Tubes: The Delhi-based steel tubes maker fell as much as 1 percent to Rs 1,304. Trading volume was nine times its 20-day average.
• Blue Dart: The Mumbai-based courier services provider fell as much as 0.7 percent to Rs 3,079. Trading volume was eight times its 20-day average.
• Magma Fincorp: The Kolkata-based non-banking finance company fell as much as 6.2 percent to Rs 108.30. Trading volume was six times its 20-day average.

Total assets under management rose 8 percent to Rs 24 lakh crore in November compared with Rs 22.3 lakh crore in October, according to Association of Mutual Funds Across India.

• November net inflow at Rs 1.42 lakh crore versus Rs 35,529 crore in October.
• Income fund outflows at Rs 6,518 crore in November versus outflow of Rs 37,642 crore in October.
• Inflows in liquid/money market funds up 146 percent at Rs 1.36 lakh crore versus Rs 55,296 crore in October.

Shares of the Kochi-based gold loan provider rose as much as 15 percent, the most in over two years, to Rs 484 after it reported September earnings.

Key earnings highlights:

• Net Interest Income down 4.6 percent at Rs 1,114.2 crore.
• Net profit up 8.5 percent at Rs 483.8 crore.
• Consolidated Loan Assets Under Management increase by 21 percent.

RBI's new loan benchmark rules will have near-term system wide implications; hope there is sanity in the spread to make the issue addressable, Shyam Srinivasan, MD & CEO of Federal Bank told BloombergQuint in an interview.

Key highlights of the conversation:

• Making no judgement, should see how things play out
• Client sentiment on borrowing and repayment side in the salaried class or commercial lending space hasn't been tremendously damaged due to Kerala floods.
• Credit growth is strong and don’t want to pick on inorganic growth from NBFCs in form of portfolio buyouts
• Retail side has benefited from the crisis as a lot of their clients have moved in voluntarily
• Aim to blend wholesale and retail lending ratio equally in the next two years from a current mix of 55:45.
• Lending in personal and auto space have been clocking 100 percent growth due to a lower base effect

• Indiabulls Housing Finance has 26.2 lakh shares change hands in two blocks. Stock down 2.5 percent at Rs 707.50.
• Bank of Baroda has 18 lakh shares change hands in a block on BSE. Stock up 1.14 percent at Rs 106.30.
• ICICI Bank has 10 lakh shares change hands in a block deal. Stock down 0.3 percent at Rs 346.70.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the parent of luxury carmaker Jaguar Land Rover declined for third day in a row and fell as much as 1.2 percent to Rs 160.75.

Jaguar Land Rover sales declined 8 percent (YoY) to 48,160 units in November.

Capital markets have been volatile in the current year and will remain so in near future, says SEBI Chairman Ajay Tyagi.

• NBFCs and HFCs are facing tight liquidity since September, though situation has improved due to RBI measures.
• Indian capital markets are comparable to other jurisdictions in terms of performance.
• AIFs have played a vital role, with Rs 2 lakh crore cumulative commitment and over Rs 1 lakh crore raised.

Gauge of metal shares on the National Stock Exchange fell as much as 1.23 percent led by losses in steel makers like SAIL, Jindal Steel and JSW Steel.

Global brokerage Citi has come out with a note on Indian steel makers wherein it says that falling steel prices, rising leverage and valuations make India steel unattractive.

Citi on Indian Steel:

• Expect steel prices to normalise in 2019 as China demand slows.
• Tata Steel: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 440 from Rs 620.
• JSW Steel: Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 290 from Rs 410.
• SAIL: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 40 from Rs 72.

Nifty's 10,700 call option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract rose 10 percent to Rs 160.30. Over 83,700 shares were added to open interest which stood at over 21.72 lakh shares.

Shares of the Mumbai-based airline operator rose as much as 3.98 percent to Rs 288.75 after Etihad Airways has offered to guarantee loans worth $150 million to Jet Airways that will keep the Indian carrier operational, Mint reported, citing people directly aware of the matter.

Shares of the Power Finance Corporation fell as much as 4.72 percent to Rs 85.80 while REC rose as much as 1.25 percent to Rs 105.15.

Cabinet approved the sale of government’s entire 52.63 percent in power sector financier REC Ltd. to state-run peer Power Finance Corporation Ltd. as it looks to mop up funds through such a deal for the second straight year to meet its divestment target.

Shares of oil marketing companies rose after crude extended its slide for third day amid signals that OPEC, Russia and other aligned oil producers won’t curb output enough to erase a supply overhang.

Brent crude fell as much as 0.97 percent to $59.48 per barrel.

• Bharat Petroleum rose as much as 1.9 percent to Rs 330.95
• Hindustan Petroleum rose as much as 2.2 percent to Rs 230.30
• Indian Oil rose as much as 2.2 percent to Rs 133.60

Indian equity benchmarks rebounded from yesterday's sharp decline led by HDFC Bank, Reliance Industries, ICICI Bank and ITC.

The S&P BSE Sensex rose 0.65 percent or 228 points to 35,540 and the NSE Nifty 50 Index climbed 0.5 percent or 53 points to 10,654.

Seventeen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Energy Index's 1 percent gain. On the flipside, S&P BSE IT Index was top loser, down 0.6 percent.

Mid- and small-cap shares were in-line with larger peers as the S&P BSE MidCap Index rose 0.4 percent and the S&P BSE SmallCap Index advanced 0.2 percent.

Rupee opened higher at 70.55 per dollar against yesterday's close of 70.90.

The home unit rose as much as 0.54 percent or 38 paise to 70.52 against the greenback.

CLSA on Sun TV

• Maintained ‘Buy’; cut price target to Rs 770 from Rs 870.
• New channel launches for long-term ad-revenue boost.
• Multiple catalysts for growth in subscription revenues.
• Cut earnings estimates by 3-4% to factor in higher content costs.

CLSA on GAIL India

• Maintained ‘Buy’; cut price target to Rs 420 from Rs 465.
• U.S. LNG arbitrage may stay negative through 2019.
• Upcoming quarterly results may be quite weak.
• Futures suggest U.S. LNG will be at significant premium to Asian spot LNG price.

BofAML on Maruti Suzuki

• Maintained ‘Underperform’ with a price target of Rs 6,850
• Management commentary suggests that volumes remains weak despite recent drop in fuel prices.
• Urban demand remains weak; incentives continue to rise as well.
• With weak pricing, EPS risks remain; Despite recent correction, stock remains expensive.

Citi on Indian Steel

• Falling steel prices, rising leverage and valuations make India steel unattractive.
• Expect steel prices to normalise in 2019 as China demand slows.
• Tata Steel: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 440 from Rs 620.
• JSW Steel: Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 290 from Rs 410.
• SAIL: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 40 from Rs 72.

• Nifty December futures closed trading at 10,626, premium of 25 points.
• Max open interest for December series at 11,000 strike value call option (open interest at 40.9 lakh shares)
• Max open interest for December series at 10,000 strike value put option (open interest at 37.9 lakh shares)

Insider Trading

• Dabur India promoter acquired 30,000 shares from Dec. 4-5.
• Alembic promoter group Nirayu acquired 1.67 lakh shares from Dec. 4-5.
• Sequent Scientific promoter Padmakumar PillaI sold 45,000 shares on Dec. 5
• Nava Bharat Ventures promoter group acquired 30,000 shares from Dec. 4-5.
• Axis Bank promoter United India Assurance sold 56,000 shares from Dec. 3-5.
• Man Infra promoter and director Parag Shah acquired 44,500 shares on Dec. 5
• Skipper Promoter acquired 43,500 shares from Dec. 4-5.

(As reported on Dec. 6)

• Wasatch International Growth Fund acquired 10.37 lakh shares or 0.65 percent equity at Rs 435.35 each.
• Abu Dhabi Investment Authority sold 10.1 lakh shares or 0.64 percent equity at Rs 435.26 each.

• RattanIndia Infrastructure OFS for retail investors opens; Non-retail investors gets 111 percent demand Thursday.

• HCL Technologies to buy select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019. The software products in scope represent a total addressable market of more than $50 billion. HCL to conduct conference call at 8.15 am today. As of Sept 30, the company had an a cash and cash equivalent of $1.6 billion.
• Cabinet Committee on Economic Affairs approved strategic sale of 52.63 percent stake in REC to PFC along with management control. He expected the deal to be completed by the end of the financial year. A Government official said with PFC buying government’s stake in REC, Government’s divestment receipts will reach around Rs 53,000 crore to Rs 54,000 crore.
• Lupin’s Canada arm received an approval from Health Canada for Zaxine drug used for the treatment of irritable bowel syndrome. The drug will be launched in December under strategic licensing agreement with Salix Pharma. The agreement grants Lupin exclusive rights to promote, distribute and market Zaxine in Canada.
• Government sold 2.21 percent equity shares of Coal India worth Rs 3,300 crore to Reliance Nippon Life Asset Management as the asset management company of the CPSE ETF mutual fund scheme. With this sale, Government’s holding in Coal India falls from 75.13 percent to 72.92 percent of the equity paid up share capital
• Reliance Industries’ Reliance Jio Infocomm board considering restructuring and reorganising proposals on Dec. 11.
• Zydus Wellness said it will raise funds by issuing preference shares worth Rs 2,575 crore to Cadila Healthcare, Zydus Family Trust, Pioneer Investment Fund and True North Fund. The board also approved that NCDs worth Rs 1,500 crore will also be raised within one year from now.
• Wipro’s digital business arm announced expanded global partnership with the U.S. based ‘Alfresco’ to offer open source digital solutions.
• MPS Ltd. received intimation from ADI BPO Services for withdrawal of scheme of amalgamation of the latter company with MPS. The communication states that demerger may not be commercially viable due to legal uncertainties/risks and the current stamp duty position in Tamil Nadu post the issuance of recent circular declaring that amalgamation/ demerger schemes may be liable to stamp duty.
• Majesco said it will invest up to $35 million in U.S. unit’s right offering to fund remainder of Exaxe acquisition, pay off debt and accelerate crowd solution growth.
• Sagar Cements consolidated November cement sales up 36.3 percent at 3.15 lakh MT versus 2.31 lakh MT on a yearly on basis.

• OPEC talks end without oil-cuts deal as Russia still holds back
• PFC’s buyout of REC will hurt its capital buffers
• Crude fades amid signals of lackluster OPEC deal to cut output
• U.S. trade gap widens to 10-year high amid tensions with China
• India inks pact with Iran to pay for crude imports in rupee
• Jet Airways seeks $350-million soft loan from Etihad
• Mr Shanghvi, your secret cost investors Rs 11,000 crore in two days
• IL&FS top brass gained over Rs 440 crore from employee trust: SFIO
• U.S. nabbing Huawei is the dog that caught the car
• Anand Mahindra says Pininfarina turnaround ‘unfinished story’

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.56 percent or 59 points to 10,683 as of 8:16 a.m.

Asian stocks posted modest gains Friday following an afternoon rally in the U.S. that erased most of the day’s losses, as investors grappled with shifting indications on U.S.-China trade talks and prospects for a pause in Federal Reserve tightening.

Shares rose in Hong Kong, South Korea and Australia, though Japan’s benchmarks struggled to hold their early advance. Futures on the S&P 500 Index were little changed after the U.S. equity market recovered the bulk of the day’s declines on Thursday, though still ended lower.

Financial markets remain on tenterhooks amid worries that the trade truce between China and the U.S. won’t last after the arrest of Huawei’s chief financial officer.

Stocks

• The MSCI Asia Pacific Index was up 0.3 percent as of 10:37 a.m. in Tokyo.
• Japan’s Topix index added less than 0.1 percent.
• Hang Seng rose 0.4 percent.
• The Shanghai Composite rose 0.2 percent.
• Australia’s S&P/ASX 200 Index gained 0.7 percent.
• Futures on the S&P 500 were little changed. The S&P 500 fell 0.2 percent on Thursday.

Currencies

• The yen held at 112.71 per dollar.
• The offshore yuan was flat at 6.8812 per dollar.
• The Bloomberg Dollar Spot Index was flat after falling 0.3 percent Thursday.
• The euro bought $1.1376.
• The pound traded at $1.2776.

Commodities

• West Texas Intermediate crude slipped 0.6 percent to $51.16 a barrel.
• Gold held at $1,239.39 an ounce.
• LME copper rose 1.2 percent to $6,142 per metric ton.

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