Sensex, Nifty Clock Longest Winning Streak In Two Weeks

Indian equity benchmarks rose for fifth day in a row to highest level since Oct. 1 led by HDFC twins, Reliance Industries and ICICI Bank.

The S&P BSE Sensex rose 0.85 percent or 307 points to 36,270 and the NSE Nifty 50 Index climbed 0.77 percent or 83 points to 10,888.

Thirteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Metal Index's 2 percent gain. On the flipside, S&P BSE Information Technology Index was top loser, down 0.35 percent.

Mid- and small-cap shares underperformed larger peers as the S&P BSE MidCap Index rose 0.4 percent and the S&P BSE SmallCap Index advanced 0.3 percent.

• Ahluwalia Contracts: Shares of the Delhi-based construction services provider rose as much as 4.2 percent to Rs 305 after it won order worth Rs 425 crore.
• Solara Active: Shares of the specialty pharma company rose close to 10 percent, the most in over four months, to Rs 299 after its research centre at Chennai received zero observations on Form 483 from U.S. FDA, according to an exchange notification. The trading volume was more than 16 times the 20-day average for this time of the day, according to Bloomberg data.
• Hindustan Copper: The Kolkata-based copper maker rose as much as 10 percent, the most in over two months, to Rs 52.90 as it plans to increase capacity to 20 million tonnes per annum in next six years, according to a report by DNA India.
• Tata Motors: The Mumbai-based automobile maker rose as much as 5.4 percent to Rs 175.95 as Jaguar Land Rover will announce plans early next year to cut thousands of jobs as part of a turnaround strategy, the Financial Times reported, citing several unidentified people close to the company.

Shares of the Mumbai-based drugmaker rose as much as 4.41 percent to Rs 698 after the company received Abbreviated New Drug Application (ANDA) for Hydrcortisone Valete Ointment.

These ointments are used to treat a variety of skin conditions like allergies and rashes and upon Commercialization company will be eligible for 180 days of Competitive Generic Therapy (CGT) exclusivity, Glenmark Pharma said in an exchange notification.

Nifty can go higher from current levels and traders can go long with a stop loss at 10,800 for target of 10,950, Sumeet Bagadia, executive director at Choice Broking told BloombergQuint in an interview.

Other trading ideas:

• Buy Nifty Bank with stop loss at 26,700 for target of 27,300.
• Buy IndusInd Bank with stop loss at Rs 1,590 for target of Rs 1,680-1,710.
• Buy Tata Motors with stop loss at Rs 167 for target of Rs 190.

Shares of the Chennai-based systems and equipment maker for power, oil & gas and refinery industries rose as much as 7.21 percent, the most in nearly a month, to Rs 63.90.

The company has secured order worth Rs 49.40 crore from Tamil Nadu Transmission Corporation (TANTRANSCO) for fabrication, engineering, supply, erection, testing and commissioning and handing over of 110/33-11 kv GIS Substation at Velachery Main Road in Chennai.

The country’s largest private sector lender will consider its September-December quarter results on Jan. 19.

HDFC Bank traded 1.4 percent higher at Rs 2,124.10.

Shares of the Mumbai-based drugmaker recovered from low levels and rose as much as 0.3 percent to Rs 855.50 after it received U.S. drug regulator's nod for Tadalfil tablets.

Lupin received approval for Tadalafil Tablets from the U.S. FDA to market generic version of Eli Lilly and Company's (Lilly) Adcirca Tablets, 20 mg, Lupin said in an exchange notification.

Tadalfil is used in treatment of pulmonary arterial hypertension to improve exercise ability and had annual sales of $503.8 million in the U.S., the notification added.

• Rising government involvement in RBI could undermine efforts.
• See no material change in RBI independence level.
• More needs to be done to recapitalise government-owned banks.
• Resolution of stressed Indian assets likely in 12-18 months.
• RBI’s Feb. 12 circular cimplified recognition of bad loans.

Source: Bloomberg

• Indian Tourism Development Corporation: The Delhi-based state-run tourism infrastructure developer rose as much as 11.41 percent, the most in over a month, to Rs 329.50. Trading volume was more than 14 times 20-day average.
• DB Corp: The Gujarat-based print media and publishing company rose as much as 10.14 percent to Rs 189.50. Trading volume was eight times its 20-day average.
• Nilkamal: The Mumbai-based plastic furniture maker rose as much as 7 percent, the most in nearly four months, to Rs 1,589.45. Trading volume was more than 11 times its 20-day average.
• MMTC: The Delhi-based state-run company rose as much as 10 percent, the most in over two months, to Rs 30.50. Trading volume was more than eight times its 20-day average.

Shares of the Uday Kotak-led private sector lender fell as much as 3.33 percent to Rs 1,214.10 after the Bombay High Court denied relief in founder stake matter.

The Bombay High Court denied interim stay on RBI's Aug. 13 letter that asked Kotak Mahindra Bank to reduce its promoter holding as percentage of paid up voting equity capital by Dec. 31.

Shares of the Delhi-based construction services provider recovered from low levels and rose as much as 4.2 percent to Rs 305.

The company has won order of Rs 425.42 crore for construction of Government Medical College and Hospital Building as Chapra, Bihar, Ahluwalia Contracts said in an exchange filing.

Shares of power producing companies were trading higher after the sector regulator released draft tariff regulations for the next five-year period that some analysts said weren’t as negative as the market expected.

The draft regulations of the Central Electricity Regulatory Commission for April 2019-24 indicate the intent to reduce the cost of power for consumers. The return on equity dilution for companies is lower than what is being factored by current market valuations, Swarnim Maheshwari, Mumbai-based analyst with Edelweiss Securities Ltd. wrote in a note.

Gauge of power shares — S&P BSE Power Index rose as much as 2.89 percent to 1,992 led by Power Grid, Suzlon Energy NTPC and Siemens.

Source: Bloomberg

Indian equity benchmarks extended gains led by ICICI Bank, HDFC twins and Reliance Industries.

The Sensex rose 0.85 percent or 305 points to 36,268 and the NSE Nifty 50 Index climbed 0.67 percent or 73 points to 10,878.

Fifteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Power Index's 1.6 percent gain. On the flipside, the S&P BSE Consumer Durables Index's 0.5 percent decline.

The overall breadth was positive as 1,255 shares were advancing while nearly 800 were declining on the BSE.

Shares of the specialty pharma company rose close to 10 percent, the most in over four months, to Rs 299.

Solara Active Pharma Sciences’ research centre at Chennai received zero observations on Form 483 from U.S. FDA, according to an exchange notification. The trading volume was more than 16 times the 20-day average for this time of the day, according to Bloomberg data.

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

Premium on the contract surged 21 percent to Rs 46.30. As many 67,575 shares were added to the open interest which stood at over 51.08 lakh shares.

Click here to see the complete options chain

Shares of the Gurgaon-based state-run transmission utility company rose as much as 5.84, the most since May 29, to Rs 196.55 on heavy volumes.

Trading volume was 8 times its 20-day average, according to data compiled by Bloomberg.

Over 43 lakh shares changed hands on the National Stock Exchange, as per the information on NSE website.

Shares of the Mumbai-based airline operator fell as much as 4.2 percent to Rs 249 after its largest lender — State Bank of India called for forensic audit of its books, Press Trust of India reported citing sources.

State Bank of India, which is the lead banker to Jet Airways' over Rs 8,000-crore loans, has mandated Ernst & Young to conduct a forensic audit of the airline’s books for the period between April 2014 and March 2018, the report added.

Meanwhile,

Indian equity benchmarks edged higher paced by gains in Vedanta, Power Grid, NTPC and Yes Bank.

The S&P BSE Sensex rose 0.7 percent or 250 points to 36,211 and the NSE Nifty 50 Index climbed 0.64 percent or 70 points to 10,875.

All the 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Power Index's 2.65 percent gain.

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 advanced 0.3 percent.

Indian rupee opened higher at 71.85 per dollar against Friday's close of 71.90.

The home unit rose as much as 0.13 percent or 10 paise to 71.80 against the greenback.

Indian bonds are likely to be supported by oil prices hovering near $60 a barrel, a factor that is likely to keep a lid on consumer price inflation.

The benchmark 10-year yield fell 2 basis points last week, adding to 36 basis points of drop in the previous three weeks as bonds rallied in recent weeks on the back of easing inflation and speculation of lower interest rates under the new RBI Governor Shaktikanta Das.

One-year onshore swap rates are factoring a 50 percent chance of a reduction around April or June, or 100 percent chance of a 25-basis-point cut in August, according to ICICI Securities Primary Dealership Ltd.

Meanwhile, the rupee could start stronger but will be kept in check by uncertain appetite for risks amid a sell-off in equity markets.

Not helping matters is a wider than expected trade deficit. The gap was at $16.7 billion, government data showed on Friday, compared with $15.1 billion in a Bloomberg survey, but smaller than October’s $17.1 billion. The implied opening from the forwards suggests that the rupee will start trading at 71.86 per dollar, slightly firmer than 71.89 on Friday.

Brokerage Radar

Motilal Oswal on Marico

• Maintain ‘Buy’ with target price of Rs 465
• New products traction picking up; to boost medium-term earnings growth prospects
• Positives: Benign raw material prices over next 18-24 months, strong volume performance
• Believe there is further room for stock price appreciation

Edelweiss on NMDC

• Maintain Buy; cut target price to Rs 130 from Rs 180
• Two successive price cuts result in rollback to July levels
• Factoring in lower volume on continued outage in Donimalai
• Cut FY19/20 volume estimates by 3 percent-5 percent, which in turn reduces Ebitda estimates by 7 percent-9 percent

Morgan Stanley on Vedanta

• Maintain Equal-weight with target price of Rs 235
• Restart of copper plant is positive for stock in near term
• Restart to add 4 percent and 8 percent upside to FY20 Ebitda and earnings estimates
• Restart to add 8 percent (Rs 19/share) upside risk to our price target

• Nifty December futures closed trading at 10,820, with a premium of 15 points.
• Maximum open interest (OI) for December series call at 11,000 strike price. (Open interest at 50.4 lakh shares)
• Maximum open interest for December series put at 10,500 strike price. (Open interest at 40.3 lakh shares)

Who’s Meeting Whom

• Mahindra & Mahindra to meet RARE Enterprises on Dec. 18.
• Eicher Motors to meet Think Invest on Dec. 17.
• Crompton Greaves to meet Motilal Oswal AMC, ASK Investment Managers and other investors on Dec. 17.
• Shriram City Union Finance to meet TenCore Partners, HDFC AMC and Fidelity Investments from Dec. 17-19.

Insider Trading

• Mastek promoter Ketan Mehta sold 1.25 lakh shares on Dec. 13.

• Tata Motors: Jaguar Land Rover will announce plans early next year to cut thousands of jobs as part of a turnaround strategy, the Financial Times reported, citing several unidentified people close to the company. (Bloomberg)
• Fortis Healthcare: Says Supreme Court order does not impact the preferential allotment made to IHH. Order to have a bearing on proposed open offer which is scheduled to be launched from Dec. 18 to Jan. 1.
• Solara Active Pharma Sciences’ research centre at Chennai receives zero observations on Form 483 from U.S. FDA.
• Larsen & Toubro: MMRDA terminates contract with joint venture of company and SCOMI Engineering for their failure to fulfill obligations. The authority will encash Rs 200 crore bank guarantee given by the joint venture company. Monorail services to continue as per schedule.
• Wipro’s arm ‘Topcoder’ gets into strategic partnership with Denmark based Saxo Bank to give digital solutions.
• Techno Electric & Engineering record date for buyback set on Jan. 3
• Future Consumer sells its stake in Amar Chitra Katha for Rs 44.4 crore. The latter has ceased to be the subsidiary of Future Consumer.
• Huhtamaki PPL withdraws its appeal before National Green Tribunal, with liberty to file a fresh appeal, if required, depending on Maharashtra Pollution Control Board’s review. On Nov. 20 company’s Thane plant had received a closure notice by the PCB under various environmental laws.
• Jet Airways: SBI orders forensic audit of Jet’s books for period between April 2014 and March 2018. In another development, a source told PTI, that Nikos Kardassis who was in an advisory role at the airline has quit.
• Vedanta: NGT has set aside the Tamil Nadu’s government order of closing its copper smelting plant. Tribunal found the order to be “unsustainable” and asked the state government to pass renewed offer of consent within 3 weeks.
• Bharti Airtel board to meet on Dec. 20 to consider various fund-raising options
• Andhra Bank: Increases its MCLR by 5 basis points across various tenors with effect from Dec. 15. One-month MCLR at 8.2 percent and six-month MCLR at 8.6 percent.
• Cadila Healthcare received U.S. FDA approval to market Albendazole tablets. This shall be manufactured at SEZ, Ahmedabad.
• Reliance Industries says Reliance Jio to not be impacted by TDSAT’s ruling against TRAI’s predatory pricing order.
• Datamatics Global Services is set to demerge and separately list Lumina Datamatics.
• Canara Bank of India’s board to hold meeting on Dec. 19 for raising funds via additional Tier I Bonds
• Infosys to divest stake in CloudEndure for $15.3 million or Rs 110 crore. The company in 2015 picked up minority stake in CloudEndure for $4 million.

Balarampur Chini Mills management meet takeaways

1. Company expects the cost of sugar to be around Rs 31 per kg at EBIT level for the 2018-2019 season.
2. They expect an improvement in sugar recovery of the industry, from 60 percent to 70 percent on year on year basis, for the season.
3. For the Ethanol segment, from Dec. 2018 to November 2019 the company has supplied 110 million liters of ethanol to oil marketing companies.
4. The sugar company’s new distillery will have capacity of 160 kilo litres per day and should commence operations by end of 2019.
5. The management expects to sell 680-700 million units of power in financial year 2019 as against 570 million units in the last financial year.

• Tumultuous year raises India Inc.’s dependence on foreign banks
• ‘Hot money’ evaporates as FPI outflow nears Rs 1 lakh crore
• Goyal’s turnaround man leaves Jet Airways
• Rafale judgment ‘misinterpretation’: What senior lawyers think
• Vodafone-Idea says no need to hold spectrum auction till 2020
• Indians are spending more on premium liquor
• Analysts who warned of emerging-market rout expect painful 2019
• Robots growing crops: This startup has Alphabet and Uber CEO’s attention
• Is Aadhaar essential to achieve error-free electoral rolls?
• RBI governors and the IAS: A long history

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.36 percent or 39 points to 10,870 as of 7:15 a.m.

Stocks in Asia opened mixed, following two weeks of losses driven by a backdrop of uncertain trade conditions and signs that some key economies are slowing. U.S. equity futures edged up with stocks in Japan, Australia and Hong Kong, while shares in Shanghai fluctuated.

Stocks

• Japan’s Topix index added 0.2 percent as of 10:31 a.m. in Tokyo.
• Shanghai Composite Index was down 0.1 percent.
• Hang Seng Index up 0.1 percent.
• Australia’s S&P/ASX 200 Index rose 0.2 percent.
• Futures on the S&P 500 rose 0.2 percent. The S&P 500 Index fell 1.9 percent on Friday.

Currencies

• The yen held at 113.36 per dollar.
• The offshore yuan was steady at 6.9021 per dollar.
• The Bloomberg Dollar Spot Index ticked lower 0.1 percent. It jumped 0.3 percent on Friday to the highest in over a month.
• The euro bought $1.1308.
• The pound was flat at $1.2581.

Commodities

• West Texas Intermediate crude added 0.4 percent to $51.42 a barrel.
• Gold slipped 0.1 percent to $1,237.48 an ounce.