Sensex, Nifty Snap Seven-Day Rally On Fed Disappointment

Indian equity benchmarks snapped their seven-day winning streak after the Federal Reserve raised borrowing costs for the fourth time this year and indicated two more hikes next year.

The S&P BSE Sensex fell 0.14 percent or 53 points to 36,432 and the NSE Nifty 50 Index declined 0.14 percent or 16 points to 10,952.

Twelve of 19 sector gauges compiled by BSE were ended lower led by the S&P BSE Telecom Index's 1.2 percent decline. On the flipside, S&P BSE Industrials Index was top gainer, up 0.4 percent.

Reliance Industries, ICICI Bank and State Bank of India were among the biggest drags on the Sensex.

Shares of the state-run oil refiner rose 0.4 percent to Rs 148.80 after its board approved share buyback proposal.

ONGC will buy back shares for up to Rs 4,022 crore representing 2.34 percent stake in the company at Rs 159 per share, the company said in an exchange filing.

Government likely to garner Rs 2,714 crore from the share buyback.

Stocks tumbled in Europe and Asia on Thursday while U.S. equity futures fell as investors expressed concern about a lack of relief from the Federal Reserve’s monetary tightening. The dollar weakened and the yen jumped.

The sell-off that began Wednesday afternoon with Fed Chairman Jerome Powell’s downplaying of the implications of market volatility, and his commitment to continue reversing quantitative easing, gathered pace hours later in Asia and Europe. More than two thirds of Stoxx Europe 600 members were down, with Japanese shares sliding into a bear market.

Shares of the Mumbai-based company rose as much as 4.3 percent to Rs 13.60 after it emerged as the lowest bidder for dredging contract at Paradip Port.

Bid is for three-year maintenance of dredging at Paradip Port, Mercator said in an exchange filing.

Shares of the cargo services provider erased gains and fell as much as 1.87 percent to Rs 656 after its board approved bonus issue of one share of every four shares held.

Shares of the Delhi-based power trading platform for physical delivery of electricity rose as much as 2.98 percent to Rs 171.25.

Indian Energy Exchange's board approved buyback of up to 37.29 lakh shares or 1.23 percent equity shares at Rs 185 per share. The total size of buy back is Rs 69 crore, the company said in an exchange notification.

Indian rupee recovered from intraday low levels and rose as much as 0.54 percent or 38 paise to 70.02 per dollar.

The local unit fell as much as 0.37 percent or 26 paise to 70.66 against the greenback.

Gauge of PSU banks on the National Stock Exchange declined despite the government announcing measures to infuse additional Rs 41,000 crore in PSU banks through recapitalisation bonds.

Shares of the Mumbai-based housing finance company held on to gains and rose 3.11 percent to Rs 866.

Indiabulls Housing Company is planning to raise Rs 275 crore via six-month commercial paper at 8.6 percent, Bloomberg reported citing an unidentified person familiar with the matter.

• Government seeks additional expenditure of Rs 85,949 crore in supplementary demand for grants.
• Government seeks additional net cash outflow of Rs 15,065.49 crore in FY19.
• Government to infuse additional Rs 41,000 crore in PSU banks through recapitalisation bonds.
• Government seeks Rs 2,298 crore equity infusion in Air India.

Source: Supplementary Demand For Grants

• Care Ratings: The Mumbai-based credit rating agency fell as much as 1 percent to Rs 976. Trading volume was more than 11-times its 20-day average.
• City Union Bank: The Tamil Nadu-based private sector lender rose as much as 1.85 percent to Rs 185.70. Trading volume was more than 10 times its 20-day average.
• Central Bank of India: The Mumbai-based government-owned bank rose as much as 8 percent, the most in over three months, to Rs 35.80. Trading volume was more than nine times its 20-day average.
• Blue Dart: The Mumbai-based courier service provider rose as much as 4 percent too Rs 3,215. Trading volume was more than eight times its 20-day average.

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

Premium on the contract slumped 44 percent to Rs 42.60. Over 8.41 lakh shares were added to the open interest which stood at over 46.68 lakh shares.

Click here to see the complete options chain

Indian equity benchmarks extended decline dragged by HDFC twins, Reliance Industries and ICICI Bank.

The S&P BSE Sensex fell 0.65 percent or 238 points to 36,246.51 and the NSE Nifty 50 Index dropped 0.66 percent or 73 points to 10,895.

The overall breadth was neutral as 966 shares were advancing while 997 were declining on the BSE.

We should see more downgrades for global growth rate in coming quarters, Neelkanth Mishra, India equity strategist and managing director at Credit Suisse told BloombergQuint in an interview.

Key highlights of the conversation:

• Demand is coming off very sharply and central banks are on a tightening trajectory
• Domestic flows have been much better than FII's in last three years providing stability
• Economic development and domestic flows will determine the momentum
• Consumption as a theme has worked for last eight years and has never corrected meaningfully
• Pay commission is a very large consumption stimulus
• Non-government incomes now need to catch up
• Consumption growth has been slowing and will continue to slow further
• Farm loan waiver doesn't drive consumption
• Some of the market reaction is a bit premature
• We will see more and more such policies as we are seeing more political issues
• Farms and agriculture stress is there since the past two years and won't be resolved soon
• Most governors apart from last two came from finance ministry
• Monetary policy committee has made clear that the focus is on inflation
• After RBI OMO operations and other efforts, it will be important to see whether it improves liquidity

Shares of the Delhi-based packaging company rose as much as 10 percent, the most since July 24, to Rs 239 after it launched sterilisable conduction sealing film.

This film is mainly used in packaging of dairy and bakery products, Cosmo Films said in a press release.

Shares of the Delhi-based flexible packaging company rose as much as 2.15 percent to Rs 280 after it launched three packaging foil solutions for pharma companies.

Shares of the Vadodara-based drugmaker rose as much as 3.84 percent, the most since Nov. 30, to Rs to Rs 621.35.

The company has received Form 483 for its Panelav facility with zero observations from the U.S. FDA, Alembic Pharma said in an exchange notification.

Shares of Indian aluminium manufacturers fell as the Trump administration is ready to remove sanctions on the world's second largest aluminium company— United Co. Rusal after its owner Russian billionaire Oleg Deripaska reached an agreement to significantly reduce his ownership stake, Bloomberg reported.

• Hindalco fell as much as 3.10 percent to Rs 220.10
• National Aluminium Company slumped 6.63 percent to Rs 59.90

Shares of the Delhi-based renewable energy project developer rose as much as 18.91 percent, the most since Sept. 21, to Rs 41.50 after it won Rs 615 crore EPC contract from water resources department of Rajasthan.

• Federal Bank has 10 lakh shares change hands in a block. Stock up 0.6 percent at Rs 95.75.
• City Inion Bank has 44 lakh shares change hands in two blocks. Stock up 1.3 percent at Rs 186.40.
• Hindustan Unilever has 13 lakh shares change hands in a block on BSE. Stock up 0.2 percent at Rs 1,848.95.
• South Indian Bank has 1 crore shares change hands in two blocks. Stock up 0.64 percent at Rs 15.70.

Buyers and sellers were not immediately known

Source: Bloomberg

Indian equity benchmarks snapped their seven-day winning streak, mirroring losses in other Asian markets, after the Federal Reserve raised borrowing costs for the fourth time this year.

The S&P BSE Sensex declined 0.74 percent or 271 points to 36,214 and the NSE Nifty 50 Index fell 0.8 percent or 87 points to 10,880.

Sixteen of 19 sector gauges compiled by BSE were trading lower led by the S&P BSE Metal Index's 1.35 percent decline. On the flipside, S&P BSE Healthcare Index was top gainer, up 0.2 percent.

Morgan Stanley on Biocon

• Maintain ‘Overweight’ with a target price of Rs 785.
• Biocon received EU approval for Ogivri, Herceptin.
• Estimate Herceptin EU addressable market for biosimilars is $750 million.
• Assuming 50-60 percent price drop and fair market share of 15-20 percent, expect sales potential to be $55-60 million over next two years.

SBICap on Gujarat Ambuja Exports

• Maintain ‘Buy’ with target price of Rs 370
• Chalisgaon ramp-up impressive; announces 33 percent increase in maize processing capacity
• To continue to benefit from strong export demand
• No impact of MSP-led increase in corn prices as hike in prices passed on

Axis Capital on Take Solutions

• Initiate ‘Buy’ with target price of Rs 178
• Large addressable market as global life sciences R&D expenditure is growing
• Huge gamut of opportunity lying in clinical business
• Focus on expansion with organic as well as inorganic growth to propel growth
• Expect revenue and net profit to grow at a CAGR of 23 percent and 30 percent over FY18-21.

HDFC Securities on Coal India

• Initiate Sell with target price of Rs 199.
• Profit growth lags volumes; pricing power restricted.
• Coal India’s pricing methodology has no profit maximization motive.
• Capex on an uptrend, but not driving profits higher.
• Cash richness is myth; adjusting for long term provisions it is net debt company.

• Nifty December futures closed trading at 10,986, premium of 19 points.
• Max open interest for December series at 11,000 strike value call option (open interest at 38 lakh shares)
• Max open interest for December series at 10,000 strike value put option (open interest at 47 lakh shares)

Who’s Meeting Whom

• Gujarat Pipavav Ports to meet Indsec Securities & Finance on Dec. 20.
• Mahindra Holidays & Resorts to meet Sundaram MF, Franklin Templeton and other investors on Dec. 21.
• Eicher Motors to meet Axis Capital on Dec. 20.
• Shriram City Union Finance to meet Batlivala & Karani Securities and Newmark Capital between Dec. 20-28.

Insider Trading

• Orient Bell promoter acquired 11,000 shares on Dec. 18.
• Max India promoter Max Ventures Investment Holdings sold 1.9 crore shares on Dec. 17.
• Jindal Stainless promoter Abhyuday Jindal acquired 50,000 shares between Dec. 17 and 18.

(As reported on Dec. 19)

• Pfizer Inc entered into a joint venture agreement with GlaxoSmithKline Plc to create a global consumer company. However the entity will not include brands like Corex, Gelusil and Becosules and they will be continued to be marketed by Pfizer’s Indian arm in its respective territory.
• Uflex launched three packaging foil solutions for pharma companies. Executive Director Amitava Ray said that the ‘fast tear strip’ foil will prove to be a game-changer for the pharma industry globally and they saw a potential growth market of 5,000 tons annually in India.
• Reliance Industries clarified on the news regarding Department of Telecommunications rejecting Reliance Communication-Jio spectrum deal stating that a correspondence was received by the company from DoT on Dec. 18 with respect to application and the company is seeking appropriate clarifications in this regard.
• Coal India seeks to buy coking coal mines in Australia and Canada. The state run-miner has identified “certain assets’, which are under different stages of due diligence, Coal Minister Piyush Goyal tells lawmakers in a written reply to questions. (Bloomberg News)
• Tata Consultancy Services launched Cloud Solutions Program in Canada. This solution provides cloud infrastructure and secured functioning between premise and public cloud environment.
• Cosmo Films launched sterilisable conduction sealing film. This film is mainly used in dairy industry for flavored milk, pharma industry and bakery products.
• Religare Enterprises’ subsidiary filed a criminal complaint against the Singh brothers, former promoters of the parent, and their associates for allegedly siphoning and misappropriating Rs 740 crore.
• JSW Steel said that NCLT approved the resolution plan in the insolvency resolution process for Vardhman Industries.
• KPIT Technologies: NCLT approved the merger plan with Birlasoft, which will then split into two-publicly traded companies. The tribunal also approved the demerger of company’s engineering business into KPIT Engineering.
• Alembic Pharma received zero observations under Form 483 from the U.S. FDA for its API facility in Gujarat.
• Allcargo Logistics said it will explore emerging business opportunities related to Container Freight Stations, Inland Container Depots and Logistics Parks in India.
• Thomas Cook and Quess Corp: Board approves changes to scheme of arrangements within the group units. Thomas Cook shareholders to get 1,886 shares of Quess Corp for every 10,000 held.
• PSU Banks: Economic Affairs Secretary Subhash Chandra Garg said the government will announce a new recapitalisation plan for public sector banks today.
• Tata Motors: Fitch says JLR restructuring not enough to lift ratings pressure
• Sun Pharmaceutical’s new drug application for Rosuvastatin, drug name Ezallor, received FDA approval on Dec. 18.
• Wockhardt: To consider fund raising by issuing preference shares on Dec. 22.
• ICRA: Received SEBI notice for conduct of adjudication proceedings in relation to credit ratings assigned to Infrastructure Leasing & Financial Services Ltd. and one of its subsidiaries. These proceedings deal with potential imposition of monetary penalty.
• OM Metals Infraprojects: Wins Rs 615 crore EPC contract from water resources department of Rajasthan.

• Fed raises rates while trimming forecast for 2019 hikes
• Indian startup founders fret over angel tax
• Oil gains as Saudis pledge to extend cuts, U.S. supply draw seen
• Cess on new petrol, diesel cars to hit small car sales, says Maruti
• Religare Finvest files criminal complaint against Singh brothers, others
• Trump poised to lift Rusal sanctions as Deripaska cuts stake
• What emerging markets investors have their eyes on
• Rupee’s santa rally heralds a brighter 2019

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.8 percent to 10,901 as of 8:30 a.m.

Asian stocks dropped after Federal Reserve Chairman Jerome Powell failed to quell investor concerns that tightening policy will choke economic growth. Treasuries pared back some of Wednesday’s gains and U.S. stock futures ticked higher.

Equities fell from Tokyo to Hong Kong. Gains in U.S. stock futures come off the back of a tumultuous session for the S&P 500 Index, which turned an advance of as much as 1.5 percent into a loss of the same magnitude to end Wednesday’s session at a 15-month low.

Short on time? Well, then listen to this podcast for a quick summary of the article!

Stocks

• The MSCI Asia Pacific Index lost 0.6 percent as of 9:35 a.m. in Hong Kong.
• Japan’s Topix index fell 0.6 percent.
• Shanghai Composite added 0.1 percent.
• Hang Seng index slid 0.1 percent.
• South Korea’s Kospi index dropped 0.4 percent.
• S&P 500 futures rose 0.4 percent. The S&P 500 fell 1.5 percent at the close in New York.

Currencies

• The yen was little changed at 112.54 per dollar.
• The offshore yuan traded at 6.9064 per dollar.
• The Bloomberg Dollar Spot Index nudged 0.1 percent lower.
• The euro was flat at $1.1378.
• The British pound rose 0.1 percent to $1.2617.

Commodities

• West Texas Intermediate crude slid 1.5 percent to $47.44 a barrel, trimming a 3.4 percent rally Wednesday.
• Gold was steady at $1,244.73 an ounce.