Sensex, Nifty Hold Weekly Gains Amid Volatile Trade

Indian equity benchmarks resumed weekly gains after a blip last week.

This after the benchmark indices witnessed a topsy-turvy trade today. The S&P BSE Sensex Index ended 0.07 percent lower at 35,871.48 and the NSE Nifty 50 Index ended at 10,791, up 0.02 percent.

The market breadth, however, was tilted in favour of buyers. About 1,168 stocks advanced and 558 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index’s 1.65 percent rally. On the flipside, the NSE Nifty Private Bank Index was the top sectoral loser, down 0.78 percent.

About 15.3 lakh shares changed hands in a block deal, Bloomberg data showed. Buyers and sellers were not known immediately.

European equities rose along with the U.S. equity futures after a mixed session in Asia as investors awaited results from top-level trade talks between America and China.

Shares of Dr. Reddy’s Laboratories extended gains for the second day and rose as much as 2.2 percent to Rs 2,643.

The U.S. drug regulator completed the audit of the drugmaker’s Louisiana plant with zero observations, the company said in its stock exchange filing.

Dr. Reddy’s Laboratories traded at 25 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of Bata India extended gains for the third day. The stock rose as much as 1.5 percent to hit a new all-time high at Rs 1,301.45.

The Relative Strength Index was at 76, indicating that the stock may be oversold, Bloomberg data showed. The stock traded at 47.4 times estimated forward earnings per share compared to a 38.7 times for the two-year historical average.

Shares of the Anil Ambani-led Reliance Group companies extended gains for the second consecutive trading session.

Shares of Jet Airways extended gains for the third day and rose as much as 3.9 percent to Rs 244.

“A large majority of shareholders at Jet Airways' EGM approved the bailout plan in person,” Mint reported quoting a person who attended the meeting.

The stock has declined 14.3 percent so far this year compared to a 0.5 percent decline in the Sensex.

Shares of Mahanagar Gas fluctuated between gains and losses to trade 0.5 percent lower at Rs 875.05.

Brokerage and research firm Macquarie initiated coverage on the stock with a ‘Neutral’ rating and a price target of Rs 1,065.91, implying a potential downside of 9 percent from the last regular trade.

Here’s what Macquarie had to say:

• Expect earnings to compound at 9 percent over the next five years.
• Moderate volume growth but premium margins likely to sustain.
• Prefer IGL as more constructive on the outlook for city gas in NCR.

Shares of the auto component maker extended gains for the third day and rose as much as 4.4 percent to Rs 1,419.

Dynamatic Technologies signed a memorandum of understanding with SAAB Technologies to explore future joint opportunities in commercial and defence-related work, including Gripen fighter aircraft, according to its exchange filing.

The trading volume was 11 times the 20-day average for this time of the day, according to Bloomberg data.

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

Premium on the contract fell 6.08 percent to Rs 73.35. Over 6.89 lakh shares were added to the open interest which stood at over 33.54 lakh shares.

Sundaram-Clayton Ltd. extended gains for the second day and rose as much as 6 percent to Rs 2,490.

The stock had declined 22 percent in the past 30 days and declined 51 percent in the past 12 months.

About 12 lakh shares of Motherson Sumi changed hands in a single block, according to Bloomberg report. Buyers and sellers were not known immediately.

The NSE Nifty Media Index halted a four-day rally, led by the declines in Dish TV India Ltd. and Den Networks Ltd.

About 17.4 lakh shares of Ashok Leyland changed hands in a block deal on NSE, Bloomberg data showed. Buyers and sellers were not known immediately.

Shares of Reliance Nippon Life Asset Management Ltd. extended gains for the third straight trading session and rose as much as 14.4 percent to Rs 211.90. The stock jumped over 34 percent in the last three days.

Trading volume was 87.1 times its 30-day average, Bloomberg data showed. The Relative Strength Index was at 74, indicating that the stock may be overbought.

Shares of Kavery Seed pared early gains and extended and fell for the seventh consecutive trading session. The stock fell as much as 1.5 percent to Rs 410.50. The scrip is set for its worst run in over 15 months.

The company clarified on exchange filings that the government of Andhra Pradesh had suspended the licenses of 14 Seed Companies including the Kaveri Seed Company on Jan. 28. “The suspension will have no impact on the budgeted sales of the company,” it said.

Trading volume was 2.6 times its 30-day average, Bloomberg data showed. The Relative Strength Index was at 22, indicating that the stock may be oversold.

Shares of Kotak Mahindra Bank fell nearly 5 percent intraday, the most in over two months, to Rs 1,225.

About 5.87 crore shares or 3 percent equity of the Mumbai-based lender changed hands in a block deal, according to Bloomberg data.

While the buyers and sellers were not immediately known, BloombergQuint had earlier reported, quoting two bankers in the know, that ING Group is looking to sell its stake in the private lender.

Trading volume was 200 times its 20-day average, Bloomberg data showed. The stock advanced 22 percent in the past 12 months compared to a 6.1 percent advance in the Sensex.

Indian equity benchmarks opened lower after rallying for two consecutive trading sessions.

The S&P BSE Sensex Index fell as much as 0.19 percent to 35,831.67 and the NSE Nifty 50 Index fell as much as 0.24 percent to 10,763.45.

The market breadth, however, was tilted in favour of buyers. About 772 stocks advanced and 641 shares declined on National Stock Exchange.

Eight out of 11 sectoral gauges compiled by NSE fell, led by the NSE Nifty Metal Index’s 0.5 percent decline. On the Flipside, the NSE Nifty Realty Index was the top sectoral gainer, up 0.68 percent.

The Indian rupee fluctuated between gains and losses against the U.S. Dollar. The home currency traded little changed at 71.22 against the greenback.

The rupee has been little changed through the week. Asian equities are in the red and pair may trade in a tight range taking clues from local stocks. A range of 71-71.40 a dollar in the session is expected.

India’s sovereign bonds are set to gain after minutes of the central bank's last policy meeting flagged possibility of further easing. RBI Governor Shaktikanta Das pointed out to weakening growth impulses and need to spur private investment. Yield on the most traded 2028 bond may drop and trade in a range of 7.52-7.58 percent in the day.

F&O Cues

• Nifty February futures closed trading at 10804, premium of 14 points.
• Max open interest for Feb. 28 series at 11,000 Call (open interest at 41.1 lakh shares).
• Max open interest for Feb. 28 series at 10,700 Put, (open interest at 35.3 lakh shares).

Stocks In F&O Ban

In Ban

• Adani Enterprises
• IDBI
• Jet Airways
• Kaveri Seed
• Reliance Capital
• Reliance Power
• PC Jeweller
• Reliance Infrastructure

New in Ban

• Adani Power
• Allahabad Bank

Put-Call Ratio

• Nifty PCR at 1.38 versus 1.3.
• Bank Nifty PCR at 1.18 versus 1.26.

Citi on BHEL

• Maintained ‘Neutral’; cut price target to Rs 70 from Rs 84.
• Revise our EPS estimates downwards by 8-13 percent over FY19E-21.
• Cut target multiple to 18 times from 20 times on sectoral derating.

Macquarie On Mahanagar Gas

• Initiated Neutral with a price target of Rs 800.
• Expect earnings to compound at 9 percent over the next five years.
• Moderate volume growth but premium margins likely to sustain.
• Prefer IGL as more constructive on the outlook for city gas in NCR.

On Life Insurance Companies

UBS

• HDFC Life: Initiated ‘Neutral’ with a price target of Rs 390.
• ICICI Prudential Life: Initiated ‘Buy’ with a price target of Rs 400.
• Max Financial Services: Initiated ‘Neutral’ with a price target o Rs 425.
• SBI Life: Initiated ‘Buy’ with a price target of Rs 740.

IIFL

• HDFC Life: Initiated ‘Add’ with a price target of Rs 400.
• ICICI Prudential Life: Initiated ‘Buy’ with a price target of Rs 380.
• SBI Life: Initiated ‘Buy’ with a price target of Rs 760.

• Monte Carlo Fashions record date for share buyback.

• Gabriel India’s Chief Financial Officer Rajendran Arunachalam resigned with effect from March 8.
• Bharat Electronics signed a teaming agreement with Hughes India to provide satellite communication solutions for helicopter. The company also stated it has signed MoU with JSR Dynamics for manufacture and sale of Glide Weapons and Light Weight Cruise Missiles.
• BEML signed a ‘Certificate of Partnership’ with Lockheed Martin Aeronautics to explore global and domestics opportunities.
• Kaveri Seed clarified that the government of Andhra Pradesh had suspended the licenses of 14 Seed Companies including the Kaveri Seed Company on Jan. 28. The Company said that filed the reply within the time period and the said suspension will have no impact on the budgeted sales of the company.
• India plans to auction 66 small oil and gas fields of Oil & Natural Gas Corporation Ltd. and Oil India Ltd. as it tries to step up production to reduce the import bill of the world’s third-biggest consumer of fossil fuel.
• Dyanamatic Technologies signed an MoU with SAAB Technologies to explore future joint opportunities in commercial and defense related work.
• AU Small Finance Bank entered into an agreement with ACKO General Insurance to act as a corporate agent for insurance products.
• HDFC updated its existing medium-term note program up to $2.8 billion in order to enable the company to issue foreign currency bonds in the international capital markets subject to regulatory approvals.

Media Reports

• Adanis in race to buy 23.5 percent in Mumbai Airport (Economic Times)

• Brent crude ended a little changed at $67.07 a barrel.
• Gold declined 1.1 percent to $1,323.01 an ounce.
• West Texas Intermediate crude fell 0.7 percent to $56.77 a barrel.

London Metal Exchange

• Nickel halted a four-day rally, ended 0.43 percent lower.
• Copper halted a six-day rally, ended 0.39 percent lower.
• Aluminium ended higher for the second day, up 1.98 percent.
• Lead ended higher for the second day, up 1.22 percent.
• Tin ended higher for the third day, up 0.8 percent.
• Zinc halted a two-day rally, ended 0.56 percent lower.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.17 percent to 10,795.50 as of 8:05 a.m.

Asian stocks posted modest losses Friday following a weak U.S. session as investors mulled an uncertain economic backdrop and mixed signals on trade negotiations.

Shares in Japan, Hong Kong and Korea retreated and Australian equities edged higher after weaker than expected data from Europe and the U.S. reignited worries about the world economy.

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