Sensex, Nifty Clock Best Three-Day Rally In Two Weeks

Indian equity benchmarks posted their best three-day rally in two weeks led by HDFC twins, ICICI Bank and Larsen & Toubro.

The S&P BSE Sensex rose 0.75 percent or 269 points to 36,077 and the NSE Nifty 50 Index advanced 0.74 percent or 80 points to 10,860.

In the last three sessions, Sensex has risen 1.71 percent and Nifty has advanced 1.83 percent.

All the 11 sector gauges compiled by the National Stock Exchange ended higher led by Nifty Media index's 1.9 percent gain.

The mid- and small-cap indices rose in line with larger peers as the Nifty Midcap Index rose 0.9 percent and the Nifty Smallcap Index advanced 1.1 percent.

Shares of retail chain operator gained for third day and rose as much as 6.33 percent to Rs 1,669.50.

Trading volume was 80 percent above its 20-day average, according to data compiled by Bloomberg.

Shares of the Mumbai-based real estate developer rose as much as 12.56 percent to Rs 12.10 after it announced plan to acquire 86 percent of the equity shares of Rockfirst Real Estate.

Shares of the Mumbai-based brokerage firm logged in its longest winning streak in over 20 months after it gained for eighth day in a row.

The stock in last eight sessions has surged 14 percent to Rs 82.55 and in today's trade it rose as much as 2.64 percent.

• SAIL has 10 lakh shares change hands in a block. Stock up 4.85 percent at Rs 54.

Buyers and sellers were not immediately known

Source: Bloomberg

Investors should be thrilled when markets drop as it provides “decades of stock buying” opportunities, the portfolio manager said, adding that market direction should not be a factor while investing.

Key highlights of the conversation:

• Need to focus on individual business prospects over 5-10 years
• Bad idea to overdose on macro over micro
• Hard to predict what stocks, markets would do
• Need to ensure that the business is within our circle of competence
• Maggie Mahar's book says not every long-term investor does well in the market
• Markets see extreme periods of no returns and very high returns
• Sensex had a very good run in 1992; Gave no returns post that till 2004
• Charts give points of maximum optimism and pessimism
• There is no co-relation between growth in an economy & growth in stock markets
• For close to 20 years, Korean markets gave no returns when economy did very well
• Korean markets are at a point of extreme pessimism
• Indian markets are exciting but need to pick the right stocks
• India Is a not-so-cheap market
• Real estate sector was decimated post demonetisation
• India is one of the best stock picking market
• Plenty of value to be found in India if you understand the business
• Investors sell stocks for a multitude of reasons
• Don't have views on markets; have views on businesses

Indian equity benchmarks held on to gains led by HDFC twins, ICICI Bank and Reliance Industries.

The Sensex rose 0.94 percent or 334 points to 36,142 and Nifty 50 Index climbed 0.91 percent or 98 points to 10,878.

All the 19 sector gauges compiled by BSE were trading higher with healthcare, finance, industrials, banking, capital goods, consumer durables and oil & gas indices rising over 1 percent.

The overall market breadth was positive as 1,560 shares were advancing while 774 were advancing on the BSE.

• Elgi Equipments: The Coimbatore-based flow control equipment maker rose as much as 3 percent to Rs 265.90. Trading volume was more than 14 times its 20-day average.
• TeamLease Services: The Bengaluru-based human resources service provider fell as much as 1.47 percent to Rs 2,805. Trading volume was 10 times its 20-day average.
• Sundaram Finance: The Chennai-based financial services provider fell as much as 1.35 percent to Rs 1,412. Trading volume was more than five times its 20-day average.
• Procter & Gamble: The Mumbai-based personal and beauty care products maker rose as much as 0.57 percent to Rs 9,849. Trading volume was 14 times its 20-day average.

Shares of companies promoted by Anil Dhirubhai Ambani were trading higher led by Reliance Capital's 5.5 percent gain.

Government introduces minimum support price for 17 new items including minor forest produce, according to information posted on website of Press Information Bureau.

Shares of public sector banks rose as government injects capital in six of the 11 state-run banks that are under the Reserve Bank of India’s Prompt Corrective Action framework.

Gauge of PSU banks — Nifty PSU Bank Index— rose as much as 1.48 percent to 3,094 paced by gains in Union Bank of India, Syndicate Bank and Indian Bank.

Indian markets are co-related with U.S. markets and trouble in the U.S. markets does not seem to be going away soon and from that sense India will be volatile for some time, Ravi Sundar Muthukrishnan, head of institutional equity research at Elara Capital told BloombergQuint in an interview. Irrespective of what fundamentals are and what companies do political scenario will take the centre stage, he added.

Key highlights of the conversation:

• People thought 2019 will be certain for Bharatiya Janata Party
• Volatility likely to remain high for next one month
• Companies are deferring capex as they await election outcome
• Expect earnings growth of 20 percent in FY20 led by banks, consumer discretionary, healthcare and telecom sector.
• Very few players will participate in spectrum auctions
• Market has already discounted that telecom companies are highly leveraged
• Like Bharti Airtel in telecom sector
• Bharti Airtel is in a good footing, telecom to do well
• Like Hero MotoCorp in two-wheeler space
• Farm distress is a concern and all people working in rural areas are not farmers
• Long term stories for auto companies intact; Still a value buy at current market price
• Like Exide Industries and MRF from auto ancillary pack
• Expect a good credit growth in private banks
• Like Karur Vysya Bank and City Union Bank from private banking space

Shares of the Chennai-based hospitality chain operator rose as much as 5 percent, the most in over a month, to Rs 204.

The company is scheduled to meet HDFC Securities and Franklin Templeton in Mumbai today, Mahindra Holidays and Resorts said in an exchange filing.

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

Premium on the contract rose 31 percent to Rs 136.05. Over 92,325 shares were added to the open interest which stood at 24.13 lakh shares.

Shares of the Delhi-based hospitality chain operator rose as much as 13.66 percent, the most in over a month, to Rs 77.80.

Lemon Tree Hotels entered into a joint venture with private equity firm-Warburg Pincus affiliate ‘Magnolia Grove Investment’ with a primary focus on co-living, the company said in an exchange filing.

This joint venture marks the entry of the company into a new business segment for rental housing accommodation for students and working professionals. The Joint Venture partners will initially invest Rs 1,500 crore in equity over a period, with an option to invest another Rs 1,500 crore. Warburg Pincus will hold 68 percent stake while Lemon Tree Hotels will hold 30 percent stake and the balance stake will be held by Patanjali Keswani, the filing added.

Indian equity benchmarks rose in line with modest gains seen across Asian markets led by HDFC twins, ICICI Bank and Reliance Industries.

The S&P BSE Sensex rose 0.60 percent or 216 points to 36,023 and the NSE Nifty 50 Index climbed 0.53 percent or 58 points to 10,837.

Buying was visible across the board as all the 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Consumer Durables Index's 1.2 percent gain.

Mid- and small-cap shares rose broadly in line with their larger peers as the S&P BSE MidCap and S&P BSE SmallCap Indices rose 0.45 percent each.

Rupee opened higher at 70.6 per dollar against yesterday’s close of 70.35.

The local unit rose as much as 0.45 percent or 32 paise to 70.04 against the greenback.

F&O Cues

• Nifty January futures closed trading at 10,810, premium of 30 points.
• Maximum open interest for January series call at 11,000 strike price, open interest at 23.9 lakh shares.
• Maximum open interest for January series put at 10,500 strike price, open interest at 29.1 lakh shares.

Stocks In F&O Ban

• Adani Power

Put-Call Ratio

• Nifty PCR at 1.54 from 1.39.
• Nifty Bank PCR at 0.89 from 1.16.

Nomura on Banks

• PSU banks require Rs 1 lakh crore of capital versus Rs 83,000 crore of government plans.
• Planned capital infusion should broadly be enough to cover capital needs of PSU banks.
• Latest capital infusion of Rs 28,000 crore to address 50 percent capital needs of PCA banks.
• Continue to prefer corporate private banks followed by SBI.

HSBC on Tata Motors

• Maintained ‘Hold’; cut price target to Rs 200 from Rs 210.
• JLR’s weakness looks set to bottom out in 2019; absolute valuations appear undemanding.
• Upside triggers are missing with multiple worries over long-term business outlook.
• Cash flows to remain stretched for the foreseeable future.

Edelweiss on Hero MotoCorp

• Maintained ‘Hold’ with a price target of Rs 3,162.
• Management says availability of liquidity is not concerning for two wheelers, but channel inventory is high.
• Management to focus on features over pricing as a sustainable business strategy.
• Stock re-rating likely to be driven by success of recent as well as upcoming launches.

Emkay on Two-Wheelers

• Subdued festive season behind; two wheeler volumes to recover gradually
• Volume growth seen at 11 percent and 5 percent for the next two financial years respectively.
• Eicher Motors: Upgraded to ‘Buy’ from ‘Accumulate’; hiked price target to Rs 27,700 from Rs 25,700.
• Hero Moto: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 3,350 from Rs 3,560.
• TVS: Maintained ‘Accumulate’; hiked price target to Rs 595 from Rs 590.
• Bajaj Auto: Maintained ‘Accumulate’; hiked price target to Rs 2,910 from Rs 2,870

On Ashok Leyland

Stewart & Mackertich

• Initiated ‘Accumulate’ with a price target of Rs 113.
• See limited market share gains due to Tata Motor’s aggressive pricing strategy.
• See pre-buy of commercial vehicles in the next financial year in due to BS-VI; volume de-growth in 2020-21 highly expected.
• Scrappage policy to create additional demand, but still no clarity on the same.

Emkay

• Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 113 from Rs 152.
• Channel check indicate a reversal in MHCV sales cycle driven by surplus capacity, increasing cost of ownership, selective financing by NBFCs and high base.
• Product mix turned adverse after implementation of new axle-load norms.
• Competitive intensity increased due to subdued volumes and aggressive marketing by Tata Motors.

• Coal India ex-date for interim dividend at Rs 7.25 per share.
• Rites record date for interim dividend at Rs 4.75 per share.
• Sayaji Industries record date for stock split from Rs 10 to Rs 5.
• Triveni Turbine record date for share buyback.
• Ruchi Soya Industries price band revised to 5 percent.

• Lemon Tree Hotels entered into a joint venture with private equity firm-Warburg Pincus affiliate ‘Magnolia Grove Investment’ with a primary focus on co-living. This joint venture marks the entry of the company into a new business segment for rental housing accommodation for students and working professionals. The Joint Venture partners will initially invest Rs 1,500 crore in equity over a period of time, with an option to invest another Rs 1,500 crore. Warburg Pincus will hold 68 percent stake while Lemon Tree Hotels will hold 30 percent stake and the balance stake will be held by Patanjali Keswani.
• United Bank of India: Government said it would infuse Rs 2,159 crore in the equity capital via preferential allotment. (Here’s how much other banks are expected to get)
• Kansai Nerolac entered in to share-purchase agreement with Perma Construction Aids for Rs 29.1 crores. The target company belongs to construction chemicals industry and the paint company says the acquisition will be completed by Jan. 28.
• Hindustan Construction Company raised Rs 498 crore via rights issue. The promoter stake in the company has increased from 27.8 percent to 33.12 percent.
• Majesco’s U.S. Insurance arm announced Jan. 7 as record date for rights offering to its shareholders at $7.1 per share. The company says it will use the net proceeds from this offering to fund the remainder of the Exaxe acquisition, pay off debt and accelerate cloud growth.
• Ashoka Buildcon’s board approved raising Rs 150 crore via non-convertible debentures.
• WABCO India clarified that the news of Wabco signing $950 million supply pact with commercial vehicle maker is for its parent company and not for the Indian arm.
• Corporation Bank appointed Canara Bank’s Executive Director PV Bharathi as its Managing Director and Chief Executive Officer till March 2020.

• West Texas Intermediate crude advanced 2 percent to $45.48 a barrel.
• Brent crude rose 2.3 percent to $53.37 per barrel after falling 4.24 percent yesterday.
• Gold was at $1,274.55 an ounce, reaching the highest in more than six months.

London Metal Exchange:

• Aluminium ended 2.2 percent lower.
• Copper hated a three-day decline, down 0.52 percent.
• Nickel ended 1.15 percent lower.
• Zinc halted a three-day decline, up 0.85 percent.
• Tin ended higher for the second day, up 2.2 percent.
• Lead ended higher for the second day, up 2.2 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.18 percent to 10,780.50 as of 8:20 a.m.

Wall Street’s wild afternoon rebound failed to reverberate through to Asia on Friday, with the region’s benchmarks putting in a mixed performance and U.S. futures retreating. The yen edged up, heading for its best two-week advance since February.

Equity benchmarks fell in Tokyo, saw modest gains in Sydney, Seoul and Hong Kong. Earlier, the the S&P 500 Index erased a drop of almost 3 percent in its afternoon recovery -- the biggest upward reversal since 2010.

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