Sensex, Nifty Snap Four-Day Rally Dragged By Banks

Indian equity benchmarks snapped their four-day winning streak mirroring losses in global markets led by declines in private sector lenders.

The S&P BSE Sensex fell 0.29 percent or 106 points to 36,106 and NSE Nifty 50 Index declined 0.31 percent or 34 points to 10,822.

Seven of 11 sector gauges compiled by National Stock Exchange ended lower led by the Nifty Private Bank Index's 0.9 percent decline. On the flipside, Nifty Pharma Index was top gainer, up 0.3 percent.

Mid- and small-cap shares outperformed larger peers as the Nifty Midcap 100 and Nifty Smallcap 100 Indexes rose 0.4 percent.

State Bank of India has chosen underwriters including Bank of America, CLSA and HSBC to arrange an institutional share placement, people with knowledge of the matter said.

• The Indian lender also selected Kotak Mahindra and SBI Capital Markets to work on the deal, according to the people, who asked not to be identified because the information is private.
• A representative for SBI didn’t immediately respond to a request for comment.
• SBI approved raising up to Rs 20,000 crore via equity in FY19.

Source: Bloomberg

Shares of the Chennai-based sewage treatment plant maker rose as much as 16 percent, the most since November 2015, to Rs 324 on heavy volumes.

Trading volume was more than five times its 20-day average, according to data compiled by Bloomberg.

As many as 4.30 lakh shares changed hands on the BSE compared with an average of 41,000 shares traded daily in the past two weeks, according to information on BSE's website.

The new-year rally in global equities stalled on Thursday as investors paused to draw breath following the recent rebound and as they awaited concrete details on U.S.- China trade negotiations. Treasuries led a broad advance in bonds as oil fell.

Shares of the Kolkata-based private sector lender rose 1.6 percent to Rs 462.70 after its net profit rose 10.4 percent in December quarter.

Key earnings highlights:

• Net profit up 10.4 percent at Rs 331 crore versus Rs 300 crore (YoY)
• Net interest income up 53.55 percent at Rs 1,124 crore versus Rs 732 crore (YoY)
• Gross non-performing assets as a percentage of total advances at 2.41 percent versus 1.29 percent (QoQ)
• Net non-performing assets as a percentage of total advances at 0.70 percent versus 0.69 percent (QoQ)
• Bandhan Bank's December quarter earnings include a provision made in respect of an exposure to a borrower from infrastructure development and finance sector which was classified as a non-performing asset and fully provided for during the quarter.

Indian equity benchmarks continue to trade on a weak note dragged by ICICI Bank, Axis Bank, HDFC twins and IndusInd Bank.

The S&P BSE Sensex declined 0.25 percent or 93 points to 36,120 and the NSE Nifty 50 Index fell 0.33 percent or 36 points to 10,818.

Seven of 11 sector gauges compiled by National Stock Exchange were trading lower led by Nifty Private Bank Index's 0.9 percent decline. On the flipside, Nifty Auto Index was top gainer, up 0.5 percent.

Mid- and small-cap shares were outperforming their larger peers as Nifty Midcap 100 Index rose 0.34 percent and the Nifty Smallcap 100 Index advanced 0.2 percent.

The overall market breadth was neutral as 1,160 shares were advancing while 1,119 were declining on the BSE.

Shares of the Goa-based calcine and refines maker erased gains and dropped as much as 3.77 percent to Rs 521.10 after it reported loss in December quarter against profit during the same period year ago.

Key earnings highlights:

• Net loss at Rs 4.90 crore versus profit of Rs 22.50 crore (YoY)
• Revenue declines 49 percent to Rs 94.26 crore versus Rs 186.60 crore (YoY)

• Phoenix Mills: The Mumbai-based real estate developer fell as much as 4 percent to Rs 552. Trading volume was more than 150 times its 20-day average.
• Indian Energy Exchange: The Delhi-based power trading platform operator rose as much as 0.85 percent to Rs 166.40. Trading volume was more than 30 times its 20-day average.
• Sheela Foam: The Ghaziabad-based mattress maker fell as much as 2.90 percent to Rs 1,333. Trading volume was 18 times its 20-day average.
• Bajaj Corp: The Mumbai-based hair care products maker rose as much as 3.77 percent to Rs 386. Trading volume was more than 13 times its 20-day average.

• Ambuja Cements has 27.6 lakh shares change hands in a single block. Stock flat at Rs 212.85.

Buyers and sellers were not immediately known

Source: Bloomberg

Nifty's 10,800 put option contract was among the most active option contracts on the National Stock Exchange.

Premium on the contract surged 4 percent to Rs 123.10. Over 2.86 lakh shares were added to the open interest which stood at over 26.28 lakh shares.

Shares of the Kolkata-based innerwear maker fell as much as 5.2 percent to Rs 1,155, also its lowest level since October 2017 on heavy volumes.

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

As many as 8,243 shares changed hands on the BSE compared to an average of 819 shares traded daily in the past two weeks, according to information on BSE's website.

Share of the country's largest carmaker fell as much as 0.59 percent to Rs 7,448 after it raised some vehicle prices by up to Rs 10,000.

The price increase varies across models, and is due to factors including increase in commodity prices and foreign exchange rates, the biggest Indian carmaker says in a statement.

Shares of the Delhi-based financial assistance provider to housing and urban infrastructure development projects rose as much as 5.63 percent to Rs 45.

HUDCO loan sanctions rose 2.4 times at Rs 12,116 crore, as of Dec. 31, versus Rs 5,107 crore on a year to date basis, while loan releases rose 66 percent at Rs 18,850 crore versus Rs 7,743 crore.

Shares of the Ludhiana-based pharma company rose as much as 4.71 percent to Rs 206.80 after Oregon Public Employees Retirement System acquired 3.03 lakh shares or 0.54 percent equity at Rs 196.88 each.

Shares of the country’s largest software services company fluctuated between gains and losses ahead of its December quarter earnings due later today. Below are Bloomberg mean estimates for what to expect from TCS in Q3 (Consolidated, QoQ).

• Dollar revenue seen rising 1.3 percent to $5,285 million versus $5215 million. (QoQ)
• Income from operations seen rising 2.7 percent at Rs 37,849 crore versus Rs 36,854 crore. (QoQ)
• EBIT seen up 3 percent at Rs 10,062 crore versus Rs 9,771 crore. (QoQ)
• EBIT margins seen at 26.6 percent versus 26.5 percent. (QoQ)
• Profit seen up 3.2 percent at Rs 8,154 crore versus Rs 7,901 crore. (QoQ)

Shares of Gurugram-based communication services provider rose as much as 7.8 percent to Rs 114.40 apiece.

AGC Networks’ Singapore arm completed the acquisition of the U.S. based digital solutions provider Black Box Corporation, according to its filing to the bourses. The company said the combined entity will add $600 million to the company’s revenue and strengthen its presence across more than 25 countries.

Trading volume was more than 550 times the 20-day average for this time of the day, according to Bloomberg data.

• South Indian Bank has 1.26 crore shares change hands in two blocks. Stock up 2.92 percent at Rs 15.85.

Buyers and sellers were not immediately known

Source: Bloomberg

Telecom stocks have gone through significant pain and will watch out for this space, Amit Khurana, head of equities and research at Dolat Capital told BloombergQuint in an interview.

Key highlights of the conversation:

• Will stay away from real estate sector for next two quarters
• Telecom has gone through significant pain, one space that needs to be watching out
• Closely watching how Page Industries performs in Q3; Expect it to be better than Q2
• Consumer staples to outperform relatively
• Cautious on sugar sector; will buy selective shares

Shares of the Mumbai-based casino chain operator fell as much as 3.63 percent to Rs 252 after it reported December quarter earnings.

Key earnings highlights:

• Revenue up 27 percent at Rs 205.8 crore.
• Net profit up 13 percent at Rs 50.5 crore.
• Ebitda up 22.3 percent at Rs 84 crore.
• Margin at 40.8 percent versus 42.4 percent.

Shares of the Chennai-based commercial vehicle maker rose as much as 2.70 percent to Rs 97 after it secured order for supply of 2,580 buses from Institute of Road Transport, Chennai, Uttar Pradesh State Roadways Transport Corporation and Chandigarh Transport Undertaking, Ashok Leyland said in an exchange filing.

In a separate filing Ashok Leyland informed exchanges that it has acquired 12.5 percent additional stake in Ashley Aviation for Rs 25.5 lakh, to increase its holding to 88.75 percent.

Indian equity benchmarks declined paced by losses in Bharti Infratel, HPCL and IndusInd Bank.

The S&P BSE Sensex fell 0.24 percent or 86 points to 36,127 and the NSE Nifty 50 Index declined 0.23 percent or 25 points to 10,830.

Six of 11 sector gauges compiled National Stock Exchange were trading lower led by the Nifty Private Bank Index's 0.41 percent decline. On the flipside, Nifty Auto Index was top gainer, up 0.31 percent.

Mid- and small-cap shares were trading on a muted note as the Nifty Midcap 100 and Nifty Smallcap 100 Indices were trading on a flat note.

Rupee opened lower at 70.53 per dollar against yesterday’s close of 70.47. However, the local unit recovered from opening depreciation and rose 5 paise to 70.42 against the greenback.

The rupee is set to open weaker as appetite for riskier assets take a pause, although with crude prices pulling back, any weakness will be rather limited.

Implied opening from the forwards suggests that the rupee may start trading at 70.59 per dollar, having lost ground on Wednesday to end at 70.4650.

Global stocks have been rallying amid optimism tensions are thawing between the U.S. and China on trade, though the most recent meetings have ended with few details.

In the bond market, traders said securities are likely to trade in a range with most awaiting the details of the RBI's Rs 10,000 crore debt purchase via open market operations.

The yield on the 10-year bond, rose 2 basis points on Wednesday to end at 7.47 percent, with worries about India's fiscal deficit weighing on sentiment. Global funds sold Rs 230 crore on government bonds on Monday, data showed.

Source: Bloomberg

Emkay on Delta Corp

• Maintained ‘Buy’ with a price target of Rs 380.
• December quarter was inline; Robust Casino performance.
• Online business ramp-up on expected lines.
• Rising footfalls and improving gross gaming revenue to benefit.

Kotak on Metals

• Expect demand to be soft in CY19 in China and globally.
• Aluminum fundamentals—large capacities in losses, but weak demand can keep prices subdued.
• Zinc—expect more supplies in 2019, but markets in tight balance.
• Vedanta: Maintained ‘Buy’; cut price target to Rs 290 from Rs 330.
• Hindalco: Maintained ‘Buy’; cut price target to Rs 280 from Rs 330.
• NALCO: Maintained ‘Buy’; cut price target to Rs 82 from Rs 87.
• Hindustan Zinc: Maintained ‘Reduce’; cut price target to Rs 245 from Rs 265.

On IndusInd Bank

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,910.
• Slippages rise and IL&FS will be back-ended to Q4.
• Healthy growth in operating profit but CASA growth needs to improve.
• Normalisation of slippage and uptick in CASA growth key.

Axis Capital

• Maintained ‘Buy’; hiked price target to Rs 2,000 from Rs 1,950.
• Expect robust loan growth to continue given adequate capitalization and liquidity tightening in NBFCs.
• Re-pricing and borrowing mix to support NIM at current level.
• Offers decent risk-reward as merger with Bharat Financials will help increase share of retail business.

IDFC Securities

• Maintained ‘Outperform’; cut price target to Rs 1,820 from Rs 1,935.
• Q3 – inline, but Q4 credit cost to be substantially higher.
• Expect Q4 provisions to be higher as the haircut on IL&FS would be 60 percent.
• Maintain rating after sharp correction since Q2 earnings and strong loan and fee growth.

• Nifty January futures closed trading at 10,878, premium of 23 points.
• Max open interest for January series at 11,000 strike value call, (open interest at 38.1 lakh shares)
• Max OI for Jan series at 10,500 strike value put, (open interest at 38.5 lakh shares.)

Bulk Deals

Shalimar Paints

• Porinju Veliyath run Equity Intelligence India acquired 3 lakh shares or 1.33 percent equity at Rs 67.17 each.
• Atul Goel sold 3.36 lakh shares or 1.49 percent equity at Rs 67.38 each.
• Rajasthan Global Securities sold 2.55 lakh shares or 1.13 percent equity at Rs 67.3 each.

Matrimony.Com

• Marathon Edge India Fund acquired 4.14 lakh shares or 1.83 percent equity at Rs 470 each.
• Small Cap World Fund sold 4.16 lakh shares or 1.83 percent equity at Rs 470 each.

IOL Chemicals and Pharma

• Oregon Public Employees Retirement System acquired 3.03 lakh shares or 0.54 percent equity at Rs 196.88 each.

Supreme Industries

• Nalanda India Fund sold 12 lakh shares or 0.94 percent equity at Rs 1,034 each.

Alert: Nalanda India Fund is run by former Managing Director of Warburg Pincus India Pulak Prasad.

Trading Tweaks

• Tata Investment Corporation ex-date for share buy-back.
• Acrysil ex-date for share split from Rs 10 to Rs 2 per share.
• Bharat Road Network price band revised to 5 percent.

Insider Trading

• Jay Bharat Maruti promoter Super Auto Industries sold 12,000 share between Dec. 13-19.
• Confidence Petroleum India promoters acquired 3.21lakh shares between Jan. 1 and 4.
• Astra Microwave Products promoter and director C. Prameelamma sold 51,000 shares from Jan. 3-7.
• Jindal Stainless promoter and director Abhuday Jindal acquired 28,000 shares from Jan. 7-8.

(As reported on January 9)

• Tata Consultancy Services

Other Earnings To Watch

• Bandhan Bank
• Goa Carbon

Earnings Reaction To Watch

Delta Corp (Q3, YoY)

• Revenue up 27 percent at Rs 205.8 crore.
• Net profit up 13 percent at Rs 50.5 crore.
• Ebitda up 22.3 percent at Rs 84 crore.
• Margin at 40.8 percent versus 42.4 percent.

• Yes Bank’s board of directors said they had finalised names of potential candidates for the position of managing director and chief executive officer. They will submit their application on Jan. 10 seeking the Reserve Bank of India’s approval.
• Ashok Leyland bagged orders for 2,580 buses from three state transport undertakings. The company also acquired 12.5 percent additional stake in Ashley Aviation for Rs 25.5 lakh, to increase its holding to 88.75 percent.
• Adani Enterprises: Government of Andhra Pradesh signed a memorandum of understanding with Adani Group to build Data Center Parks up to 5GW capacities over the next twenty years. Adani Group says that it will invest over Rs 70,000 crore over the afore mentioned time frame.
• HUDCO Loan Sanctions (Dec. 31) were up 2.4 times at Rs 12,116 crore versus Rs 5107 crore on a year to date basis, while loan releases up 66 percent at Rs 18,850 crore versus Rs 7,743 crore.
• Real estate stocks: Government of India is expected to cut levies on real estate and exempt some small businesses from paying goods and services tax on Jan. 10. Prime Minister Narendra Modi also proposed slashing rates on under-construction apartments to 5 percent from 12 percent. (Bloomberg News)
• AGC Networks’ Singapore arm completed the acquisition of the U.S. based digital solutions provider ‘Black Box Corporation’. The company said the combined entity will add $600 million to the company’s revenue and strengthen its presence across more than 25 countries.
• Tata Steel BSL board approved issuing non-convertible redeemable preference shares up to Rs 12,000 crore and/or issue convertible preference shares up to Rs 12,000 crore to Tata Steel.
• Vakrangee said that no irregularities were made in the Preliminary Findings reported by the Ministry of Corporate Affairs. But some observations were made in such findings such as whether funds from Franchisee to be considered as Deposits or not and certain disclosure requirement with respect to financials as per Schedule III of the Companies Act, 2013. The company stated that after they give these explanations then Ministry of Corporate Affairs will release the final report.

• Modi’s 10% quota gambit passes parliament scrutiny
• Government eyes $1 billion from Air India sale
• RBI amends gold monetisation scheme to include government entities, charities
• Why Amartya Sen is not impressed with Modi’s 10% quota bill
• Budget session likely from Jan. 31 to Feb. 13
• It’s time to sell Indian bonds, Aberdeen says
• Snapdeal shrunk itself to survive. But will that help?
• IndusInd Bank to finish providing for IL&FS in current fiscal
• The nexus between Sun Pharma, Aditya Medisales and Dilip Shanghvi
• Indian IT companies set for best third quarter in two years
• Is India’s love for fixed deposits slowly fading?

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India rose 0.17 percent or 18 points to 10,894 as of 7:14 a.m.

The post-Christmas rally in global equities stalled on Thursday in Asia as investors took a step back in the absence of any concrete details on trade negotiations. The yen and Treasuries gained.

The steepest declines were in Japan, while S&P 500 Index futures retreated as while the U.S. and China laid the ground for resolving trade issues, negotiations seem likely to continue indefinitely. Shares fell in South Korea and Hong Kong, and fluctuated in Shanghai.

Stocks

• Japan’s Topix index fell 1 percent as of 10:27 a.m. in Tokyo.
• Australia’s S&P/ASX 200 Index lost 0.1 percent.
• South Korea’s Kospi fell 0.2 percent.
• Hong Kong’s Hang Seng Index lost 0.3 percent.
• S&P 500 futures declined 0.5 percent lower. The S&P 500 rose 0.4 percent.
• The MSCI Asia Pacific Index fell 0.3 percent.

Currencies

• The yen rose 0.2 percent to 107.92 per dollar.
• The offshore yuan traded at 6.8182 per dollar.
• The euro gained 0.1 percent to $1.1549.
• The pound was at $1.2789.

Commodities

• West Texas Intermediate crude slipped 1.1 percent to $51.77 a barrel, after surging 5.2 percent to the highest in a month.
• Gold lost 0.1 percent to $1,292.37 an ounce.

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