Sensex, Nifty Close Higher In A Volatile Week

Indian equity benchmarks rose for a fourth straight day led by Infosys, Bharti Airtel, ICICI Bank and Yes Bank. However, the gains were capped as HDFC twins, Larsen &Toubro and ITC came under selling pressure.

The S&P BSE Sensex rose 0.09 percent or 33 points to 35,963 and the NSE Nifty 50 Index advanced 0.13 percent or 14 points to 10,805.

Thirteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Telecom Index's 3 percent gain. On the flipside, the S&P BSE Healthcare Index was the top loser, down 0.8 percent.

Mid- and small-cap stocks were in line with their larger peers as the S&P BSE MidCap Index rose 0.2 percent while the S&P BSE SmallCap Index ended little changed.

Shares of the state-run oil exploration company rose as much as 4.95 percent, the most since Oct. 11, to Rs 150.40.

ONGC informed stock exchanges that its board will meet on Dec. 20 to consider share buyback plan.

European stocks and U.S. equity futures followed Asian stocks lower after data showed continued weakness in China’s economy. Treasuries and the dollar climbed. The Stoxx Europe 600 Index fell, with all sectors in the red, signaling a downbeat end to a week marked by large swings.

Shares of Anil Dhirubhai Ambani Group companies were trading higher after the Supreme Court rejected pleas to to probe India’s Rafale fighter jet deal with France, blunting the opposition’s attack on Prime Minister Narendra Modi and Anil Ambani in the multi-billion-dollar purchase.

This comes as a relief for Anil Ambani whose Reliance Naval and Engineering Ltd. was picked as an offset partner by Dassault Aviation in the Rs 58,000-crore purchase of 36 fighter jets in a fly-away condition.

• Reliance Communications rose as much as 7.14 percent
• Reliance Capital advanced 4.14 percent
• Reliance Infrastructure climbed 8.73 percent
• Reliance Naval Engineering jumped 18.18 percent
• Reliance Power rose 3.6 percent

Indian equity benchmarks fluctuated between gains and losses as gains in Bharti Airtel, Indian Oil and Infosys were offset by losses in HCL Tech, HDFC and Maruti Suzuki.

The S&P BSE Sensex was little changed at 35,958 and the NSE Nifty 50 Index was also little changed at 10,798.

Thirteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Telecom Index's 3 percent gain. On the flipside, S&P BSE Healthcare Index was top loser, down 0.6 percent.

Overall market breadth was neutral as 1,128 shares were advancing while 1,201 were declining on the BSE.

Shares of the Delhi-based jewellery retailer rose for a fourth straight day rising as much as much as 11.14 percent to Rs 87.30.

In the last four trading sessions the stock has surged 36 percent.

• Aster DM Healthcare: The Kochi-based healthcare services provider rose as much as 3.33 percent to Rs 155.30. Trading volume was 110 times its 20-day average.
• Max India: The Delhi-based health insurance and healthcare services provider rose as much as 16.39 percent, the most in over two years, to Rs 77.75. Trading volume was 15 times its 20-day average.
• Orient Cement: The Hyderabad-based cement maker rose as much as 5 percent to Rs 82. Trading volume was more than nine times its 20-day average.
• JK Lakshmi Cement: The Delhi-based cement maker rose as much as 6.2 percent to Rs 291. Trading volume was more than six times its 20-day average.

The Wholesale price Inflation eased to 4.64 percent in November from 5.28 percent in October.

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

Premium on the contract rose 11.43 percent to Rs 115. Over 5.4 lakh shares were added to the open interest which stood at over 33.61 lakh shares.

Shares of Fortis Healthcare extended decline for the second day and fell as much as 14.3 percent, the most since March to Rs 130. The Supreme Court today put the sale of Fortis to IHH on hold.

The stock traded at 91 times its estimated forward earnings per share compared to 52.9 times for the two-year historical average, Bloomberg data showed.

Shares of Reliance Naval and Engineering rose as much as 18.2 percent, the most since May 17, to Rs 16.90. The Supreme court today rejected plea to probe Rafale Deal.

The stock declined 70.2 percent so far this year compared to a 6.7 percent advance in the Sensex.

• ITC: About 10 lakh shares changed hands in a block deal.
• JM Financial: About 11.4 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Shares of Vodafone Idea rose as much as 2.4 percent to Rs 35.75 while Airtel rallied nearly 3 percent to Rs 312.10.

Telecom tribunal sets aside TRAI’s tariff order of February on predatory pricing and discounted tariff. This brings relief to Bharti Airtel and Vodafone Idea as they continue to offer segmented plans. The tribunal said TRAI cannot impose penalty and has asked the telecom regulator to reconsider the provisions within six months.

Shares of Indian Oil rose as much as 3.5 percent to Rs 142.20.

The company’s board announced share buyback and dividend. The Company will buyback 3 percent of the total equity worth Rs 4,435 crore at Rs 149 per share, a premium of 9 percent to last price and dividend of a Rs 6.75 per share aggregating to Rs 7886 crore. Record date for the buyback is set on Dec. 25.

Trading volume was more than quadruple its 20-day average, Bloomberg data showed. The stock traded at 7.5 times estimated forward earnings per share compared to 8.9 times its two-year historical average.

Shares of Motherson Sumi rose as much as 10.9 percent to Rs 179.30, its highest levels since Sept. 24.

The company in early-talks with German-based Leoni over a possible merger. The deal could be worth more than $1.14 billion, according to Reuters report.

Trading volume was more than eight times its 20-day average, Bloomberg data showed. The stock has declined 34 percent in the past 12 months.

Indian equity benchmarks halted a three-day rally after opening lower, mirroring its Asian peers.

The S&P BSE Sensex Index fell as much as 0.32 percent to 35,813 and the NSE Nifty 50 Index fell as much as 0.37 percent to 10,752.10.

The market breadth tilted in the favour of sellers. All the sectoral gauges compiled by NSE fell, led by the NSE Nifty Metal Index's 0.35 percent decline.

The Indian rupee resumed decline against the U.S. dollar after a one-day rally. The home currency depreciated as much as 0.19 percent to 71.81 against the greenback.

All eyes will be on the RBI board meeting today under new governor Shaktikanta Das. India’s government bonds are expected to pose a fourth week of gains as markets expect interest rates to ease.

Abheek Barua, chief economist at HDFC Bank wrote in a note that value buying has emerged in onshore FX and bonds as uncertainty related to state election results and change of guard at the RBI eased.

The yield on the 10-year sovereign bonds was unchanged at 7.41 percent on Thursday, dropping six basis points this week.

November wholesale prices and trade numbers are expected later today.

F&O Cues

• Nifty December futures closed trading at 10825, premium of 34 points.
• Max open interest for December series at 11,000 Call (open interest at 49.4 lakh shares).
• Max open interest for December series at 10,500 Put (open interest at 39 lakh shares).

Stocks In F&O Ban

• Adani Enterprises
• Adani Power

Put-Call Ratio

• Nifty PCR at 1.51 from 1.47
• Nifty Bank PCR at 1.25 from 1.44

Citi on Yes Bank

• Maintained ‘Neutral’ with a price target of Rs 215.
• Stock to remain range bound despite low valuations.
• Multiple board and management appointments an overhang.
• Uncertainty around divergence report for the previous financial year an overhang.

Citi on United Breweries

• Initiated ‘Buy’ with a price target of Rs 1,550.
• Value growth of beer higher than spirits.
• Expect 8 percent industry volume growth CAGR over the medium term.
• Strong competitive advantages; premiumisation is opportunity.
• Expect 26 percent EPS CAGR over FY18-21 - highest in the peer group.

Kotak on Container Corp

• Maintained ‘Sell’; cut price target to Rs 590 from Rs 630.
• Rail operators losing share in a market witnessing growth acceleration.
• Company likely to absorb haulage cost increase; margins may come under pressure in the second half of the current financial year.
• See downside risks to estimates on further decline in diesel prices.

Kotak on JSW Steel

• Maintained ‘Sell’ with a price target of Rs 285.
• Expansion on schedule for commissioning by March 2020.
• Trial runs started at pipe conveyor system which can save ore transportation costs.
• Management expects minimal impact from closure of NMDC’s Karnataka iron-ore mine.

On L&T

Deutsche Bank Research

• Maintained ‘Buy’; cut price target to Rs 1,620 from Rs 1,650.
• New project announcements down sharply - cutting order inflow estimates.
• Stock has near to medium term order inflow uncertainty, as well as risk of political stability.
• Retain Buy on reasonable valuations and likelihood of a private capex recovery post elections.

JPMorgan

• Maintained ‘Overweight’ with a price target of Rs 1,620.
• Worry around impact on ordering from upcoming General Elections is overdone.
• Expect growth in smaller-sized base orders across water, heavy civil and T&D to fill the gap.
• Big-ticket order prospects likely to spill into the next financial year.

• Oriental Aromatics record date for bonus issue 1:1 and stock split from Rs 10 to Rs 5.

Ashapura Intimates Fashion

• DSP Small and Mid-Cap Fund sold 17.3 lakh shares or 6.88 percent equity at Rs 19.2 each.
• Victory Expedition Emerging Markets Small Cap Fund sold 3.6 lakh shares or 1.42 percent equity at Rs 19.25 each.

Max Financial Services

• New York Life Insurance Company acquired 50 lakh shares or 1.86 percent equity at Rs 429.5 each.
• Max Ventures Investment Holdings sold 50 lakh shares or 1.86 percent equity at Rs 429.5 each.

• 12pm: India November Wholesale Prices Inflation YoY, Bloomberg estimates at 4.64 percent, prior 5.28 percent.
• Dec-13-14: India November trade balance, Bloomberg estimates at -$15.1 billion, prior -$17.1 billion.
  • India November Exports YoY, prior 17.9 percent.
  • India November Imports YoY, prior 17.6 percent.

• Indian Oil Corporation’s board announced share buyback and dividend. The Company will buyback 3 percent of the total equity worth Rs 4,435 crore at Rs 149 per share, a premium of 9 percent to last price and dividend of a Rs 6.75 per share aggregating to Rs 7886 crore. Record date for the buyback is set on Dec. 25.
• Telecom tribunal sets aside TRAI’s tariff order of February on predatory pricing and discounted tariff. This brings relief to Bharti Airtel and Vodafone Idea as they continue to offer segmented plans. The tribunal said TRAI cannot impose penalty and has asked the telecom regulator to reconsider the provisions within six months.
• Adani Enterprises’ defence arm acquired 1.3 crore shares in Alpha Design Technologies for Rs 400 crore. The target company belongs to the aerospace and defence industry which develops and manufactures defence electronics and avionics. Its major customers include Global OEM’s, Indian Armed Forces, Defence Public Sector Units and ISRO.
• NMDC Iron Ore sales up to November at 19.3 million tonnes.
• Dilip Buildcon’s arm received financial closure for its HAM project in Madhya Pradesh for Rs 1,004 crore.
• Capital First: NCLT approved amalgamation of Capital First and its two arms Capital First Home Finance and Capital First Securities with IDFC Bank. The company said that the scheme will be effective once the NCLT orders are filed with Registrar of Companies.
• Vijaya Bank increased its MCLR by five basis points across various tenors with effect from Dec. 14. One-month MCLR at 8.3 percent and six-month MCLR at 8.7 percent.
• Indian Energy Exchange’s board to meet on December 20 to consider buyback proposal.
• GTL Infra said that the company is left with Rs 389 crore of operational costs due to non-occupied towers. Due to unprecedented events in telecom sector there is an urgent need of restructuring overall debt to a sustainable level in line with revised cash flows and operational expenditures. The company has received demand for debt and faces potential default.

Media Reports

• Motherson Sumi in early-talks with German based Leoni over a possible merger. Deal could be worth more than $1.14 billion (Reuters)

Earnings To Watch

• IL&FS Investment Manager
• Kwality

• West Texas Intermediate crude rose 0.3 percent to $52.75 a barrel.
• Brent crude ended 2.16 percent higher at $61.45 per barrel.
• Gold was at $1,241.93 an ounce.

London Metal Exchange

• Aluminium ended 0.36 percent lower.
• Copper ended 0.24 percent higher.
• Nickel ended higher for the second day, up 0.5 percent.
• Zinc ended lower for the second day, down 0.16 percent.
• Lead halted a two-day rally, down 1.37 percent.
• Tin ended higher for the third day, up 0.39 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, erased gains and fell 0.43 percent to 10,779 as of 8:20 a.m.

Asian stocks fell with U.S. equity futures as caution returned to global markets, with shares extending losses as data showed continued weakness in China’s economy.

Shares in Hong Kong and Japan bore the brunt of declines as equities fell across the region. Futures on the S&P 500 Index sank and the yuan dipped as a slew of Chinese economic data reinforced worries about the country’s slowdown.

Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.