Sensex Kicks Off 2019 With 186-Point Rally

Indian equity benchmarks kicked off 2019 on a strong note led by gains in HDFC twins, ICICI Bank and Infosys.

The S&P BSE Sensex rose 0.52 percent or 186 points to 36,255 and the NSE Nifty 50 Index advanced 0.44 percent or 48 points to 10,910.

For most part of the day, Sensex and Nifty traded with a negative bias but late buying in private sector lenders lifted the benchmarks higher.

Fourteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Realty Index's 2.2 percent gain. On the flipside, S&P BSE Metal Index was top loser, down 0.74 percent.

Shares of the Rajkot-based three-wheeler maker were locked in a 20 percent upper circuit at Rs 349 after its sales jumped 49.90 percent to 4,332 units in December, Atul Auto said in an exchange notification.

Markets will see political overhang in the first half of 2019 and we are recommending clients to sit on some amount of cash and invest in good quality large caps, Ajay Bagga, executive chairman at OPC Asset Solutions told BloombergQuint in an interview.

Key highlights of the conversation:

• Markets will see political overhang in the first half of 2019.
• Recommending clients to sit on some amount of cash and invest in good quality large caps and not try to dip into small caps as they can see violent moves.
• There is strong possibility of either of the national political parties forming stable government at centre.
• Think markets would bottom out between March-April and that could be a good time to buy the dips.
• Investors should wait for allocating fresh money in markets.
• Expecting 20 percent plus earnings growth for Indian markets.
• Indian markets outperformed China by 30 percent on the back of domestic money entering Indian markets.
• Like private sector corporate and retail focused banks.
• Like consumption space on the back of more money in rural economy in form of farm loan waivers and pay commission based salary increase and arrears being paid out.
• Cement stocks are likely to do well.
• Not convinced about telecom sector's revival.
• Not convinced about aviation stocks as passenger volumes are increasing but it is not reflecting in margins.
• Metal stocks will rise only if there is a stimulus from China.

Indian equity benchmarks recovered from intraday low levels led by gains in Axis Bank, Yes Bank, ICICI Bank and HDFC twins.

The S&P BSE Sensex rose 0.07 percent or 26 points to 36,095 and the NSE Nifty 50 Index was little changed at 10,865.

The Sensex rose as much as 335 points from intraday low levels while Nifty touched high of 10,885.30 and low of 10,807.10.

Eight of 11 sector gauges compiled by National Stock Exchange were trading higher led by Nifty Realty Index's 2 percent gain. On the flipside, Nifty Auto Index declined 0.7 percent on the back of weak December sales posted by M&M and Maruti Suzuki.

Shares of Faridabad-based tractor maker erased losses and rose as much as 1.26 percent to Rs 715 after it reported December sales numbers.

• Key sales highlights:
• Tractor sales up 37.5 percent at 4,598 units

Shares of the country's largest utility vehicle maker fell as much as 2.28 percent to Rs 785.50 after it reported December sales numbers.

Key sales highlights:

• Total auto sales up 1 percent at 39,755 units.
• Total domestic sales decline 1 percent to 36,690 units.
• Passenger vehicle sales drop 3 percent to 15,091 units.
• Utility vehicle sales fall 4 percent to 13,891 units.
• Commercial vehicle sales decline 4 percent to 16,906 units.
• total tractor sales drop 6 percent to 17,404 units.

Shares of the Mumbai-based logisitics services provider fell as much as 3.24 percent to Rs 125.30 after it informed exchanges that it could not raise money to fund acquisition of shares in Gateway Rail Freight held by Blackstone, Gateway Distriparks said in an exchange notification.

"Due to un-contemplated events arising in the debt market, GDL could not raise the required funds before the due date of 28 December 2018 to make the balance payment of Rs 560 crore plus compensation at 15 percent per annum from 28 September 2018 to 28 December 2018", the company said.

Meanwhile, Blackstone Mauritius has sent an arbitration notice under share subscription and shareholders agreement entered between GDL, GRFL and Blackstone.

Indian equity benchmarks continue to trade on a weak note paced by losses in Hindalco, IndusInd Bank and Tata Steel.

The S&P BSE Senses fell 0.34 percent or 121 points to 35,947 and the NSE Nifty 50 Index declined 0.33 percent or 36 points to 10,826.

Fourteen of 19 sector gauges compiled by BSE were trading higher led by the S&P BSE Metal Index's 0.9 percent decline. On the flipside, S&P BSE Realty Index was top gainer, up 1.90 percent.

Broader markets were mixed as the S&P BSE MidCap Index fell 0.14 percent while the S&P BSE SmallCap Index rose 0.25 percent.

The overall market breadth was positive was 1,260 shares were advancing while 976 were advancing on the BSE.

• Rupa & Company: The Kolkata-based innerwear maker rose as much as 10.32 percent, the most in over a month, to Rs 363.60. Trading volume was more than 16 times its 20-day average.
• Tube Investments: The Chennai-based metal products maker fell as much as 3.05 percent to Rs 345.40. Trading volume was 17 times its 20-day average.
• Prestige Estates: The Bengaluru-based real estate developer rose as much as 5.41 percent, the most since Dec. 13, to Rs 231.80. Trading volume was more than nine times its 20-day average.
• HCC: The Mumbai-based construction company rose as much as 9.16 percent to Rs 14.30. Trading volume was nine times its 20-day average.

• Bank of Baroda has 12.30 lakh shares change hands in a block on National Stock Exchange. Stock up 2.53 percent at Rs 121.80.

Buyers and sellers were not immediately known

Source: Bloomberg

Shares of the liquor makers fell after Maharashtra government decided to raise excise duty on Indian Made Foreign Liquor (IMFL) by 20 percent, from Jan. 1, to mobilise additional Rs 150-200 crore per month, The Times of India reported citing a senior bureaucrat.

Shares of the Vishakhapatnam-based dredging services provider rose for fifth fay in a row and has risen 35 percent in last five sessions to Rs 474.

In intraday trade the stock rose as much as 8.44 percent to Rs 478 on heavy volumes. Trading volume was 15 times its 20-day average, according to data compiled by Bloomberg.

Over 6.10 lakh shares changed hands on the BSE compared with an average of 1.34 lakh shares traded daily in the past two weeks, according to information on BSE's website.

Shares of the Pune-based real estate developer rose as much as 14 percent, the most in over three months, to Rs 272, also its highest level since Sept. 24.

CRISIL Ratings has reaffirmed A+/Positive outlook for its long-term bank facilities worth Rs 600 crore, Kolte-Patil Developers said in an exchange filing.

Shares of the Delhi-based cable supplier rose as much as 4.65 percent to Rs 185.50.

The company emerged as the lowest bidder (L1) for supply of cadmium catenary wire to East Coast Indian Railways for Rs 106.64 crore, CMI 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 fell 19 percent to Rs 114.35. Over 3.20 lakh shares were added to the open interest which stood at over 29.60 lakh shares.

Shares of the country's largest carmaker extended losses and fell as much as 0.94 percent to Rs 7,395 after its sales declined 1.3 percent to 1,28,338 units in December, also its lowest monthly sales in 2018.

Key sales highlights:

• Sales of mini segment comprising of Alto and WagonR fell 14 percent to 27,661 units.
• Sales of compact segment comprising of Swift, Celerio, Ignis, Baleno and Dzire declined 3.8 percent to 51,334 units.
• Ciaz sales rose 98.7 percent to 4,734 units.
• Total passenger cars sales fell 4.7 percent to 83,729 units.
• Utility vehicle sales comprising of S-Cross, Vitara Brezza, Ertiga and Gypsy rose 4.9 percent to 20,225 units.
• Omni, Ecco sales rose 38.8 percent to 15,850 units.
• Total exports fell 36.4 percent to 6,859 units.
• Total domestic sales rose 1.8 percent to 1,21,479 units.

Shares of the Ahmedabad-based construction company rose as much as 11.26 percent, the most since in over two months, to Rs 96.85 after it secured new orders worth Rs 596 crore.

The company won order for construction of residential and commercial real estate projects in South India worth Rs 434 crore and for civil works at a steel plant in Odisha for Rs 162 crore, JMC Projects said in an exchange notification.

Expect Maruti Suzuki to report flattish numbers for the month of December, Ankit Merchant from SMC Institutional Equities told BloombergQuint in an interview.

Key highlights of the conversation:

• Bajaj Auto will remain range bound; Could be bought around Rs 2,600.
• Ashok Leyland growth could decline by 16 to 17 percent; Negatives priced in the stock.
• Liquidity prices have impacted commercial vehicle sales.
• Buy Ashok Leyland with target of Rs 134.
• We expect M&M to be the best auto stock.

Shares of the Delhi-based crop protection company fell 2.36 percent to Rs 453.80 after went ex-buyback.

Dhanuka Agitech had on Nov. 14 approved buyback of equity shares of the company and the board agreed to buy back 15 lakh shares at Rs 550 per share aggregating to Rs 82.50 crore.

Shares of the Anil Ambani-led AMC rose as much as 2 percent to Rs 162 after HDFC Securities initiated coverage with a 'buy' for target price of Rs 227.

HDFC Securities in a note said:

• Appreciate RNAM’s focus on building granular stickier retail assets.
• Profits hit in FY18 and Q2FY19; increase in profitability is key trigger for re-rating.
• Inter-corporate deposits remain a concern.
• Expect AUM, revenue and net profit to grow at a CAGR of 19 percent, 1.2 percent and 9.5 percent respectively over FY18-21.

Shares of UCO Bank rose as much as 15.8 percent to trade at Rs 23.50, its highest level in over eight months.

The central government infused Rs 3,076 crore capital in the lender, according to its stock exchange filing.

Trading volume was 32.2 times its 30-day average, Bloomberg data showed. The Relative Strength Index was at 73, indicating that the stock may be overbought.

Indian equity benchmarks witnessed a shaky start to 2019. The S&P BSE Sensex Index fell nearly 250 points from day's high to trade at 36,012.83, while the NSE Nifty 50 Index fell as much as 0.27 percent to 10,832.90.

The market breadth was tilted in favour of sellers. Eight out of 11 sectoral gauges compiled by NSE fell, led by the NSE nifty Auto Index's 0.36 percent decline. On the flipside, the NSE Nifty Realty Index was the top sectoral gainer, up 0.41 percent.

The Indian rupee opened higher against the U.S. dollar. The home currency depreciated as much as 0.19 percent to 69.63 against the greenback.

F&O Cues

• Nifty January Futures closed trading at 10917, premium of 55 points.
• Max OI for January series at 11,200 Call, OI at 28.2 lakh shares.
• Max OI for January series at 10,500 Put, OI at 33.2 lakh shares.

Stocks In F&O Ban

• Adani Power

Put-Call Ratio

• Nifty PCR at 1.53 versus 1.54.
• Nifty Bank PCR at 1.03 versus 1.11.

HDFC Securities on Asset Management Companies

• Mutual fund industry is under-penetrated; Expect financialisation of savings to grow at 9.7 percent CAGR over FY18-30.
• Impact of changes in TER to become clear over 1-2 quarters; Expect 75-85 percent pass through.

HDFC Securities on HDFC AMC

• No Rating/Recommendation.
• Business does not need incremental capital; Expect RoICs to improve.
• Expect AUM, revenue and net profit to grow at a CAGR of 18.3 percent, 6.7 percent and 17.4 percent respectively over FY18-21
• See one-year forward fair value at Rs 1708 per share versus current market price of Rs 1,510.

HDFC Securities on Reliance Nippon

• Initiated ‘Buy’ with a price target of Rs 227, implying a potential upside of 43 percent from the last regular trade.
• Appreciate RNAM’s focus on building granular stickier retail assets.
• Profits hit in FY18 and Q2FY19; increase in profitability is key trigger for re-rating.
• Inter-corporate deposits remain a concern.
• Expect AUM, revenue and net profit to grow at a CAGR of 19 percent, 1.2 percent and 9.5 percent respectively over FY18-21.

Emkay on JK Cement

• Upgraded to ‘Buy’ from ‘Accumulate’; hiked price target to Rs 864 from Rs 846.
• Grey cement: capacity expansions to drive volume growth.
• White cement segment more sustainable than grey cement in terms of profitability.
• Prefer JK Cement due to its exposure to white cement.

Emkay on Britannia Industries

• Maintained ‘Hold’ with a price target of Rs 2,950.
• Stepping up its foods play; Aggressive new-launch pipeline ahead.
• Potential to scale up reach and drive growth through small packs.
• Believe that a lot is already baked in and there exist downside risks to margin.

• Dhanuka Agritech ex-date for share buy-back.
• 5paisa Capital price band revised to 5 percent.

• Hindustan Construction Company: Promoter Arya Capital Management sold 1.45 crore shares or 1.44 percent equity at Rs 11.87 each.
• AVG Logistics: Sixth Sense India Opportunities acquired 51,600 shares at Rs 74.45 each (Alert: This Stock is listed on NSE Emerge)

• Automobile manufacturers will be in focus as they are set to announce their monthly sales data for December. (Here’s how they are expected to fare.)
• Lupin received FDA approval for Clobazam Oral Suspension. This is a generic version of Lundbeck Pharma’s Onfi Oral Suspension for adjunctive treatment of seizures associated with Lennox-Gastaut Syndrome in patients two years of age or older.
• JMC Projects received order worth Rs 596 crore. Out of this, Rs 434 crore is for residential and commercial projects in South India and the remaining Rs 162 crore is for civil works for a steel plant in Odisha. This company is a listed arm of Kalpataru Power Transmission.
• HDFC revised its Retail Prime Lending Rate on which its adjustable rate home loans are benchmarked by 10 basis points across various tenors, with effect from Jan. 1.
• Dynamatic Technologies said it will receive Rs 40 crore as consideration for transfer of all the fixed assets relating to the aluminum business of the Auto Division from Hi-Tech Arai. Along with this, the investors will also pay between Rs 5.5 and Rs 6.5 crore in order to acquire the company’s inventories.
• Centrum Capital’s arm acquired supply chain finance business of L&T Finance whose asset book consists of Rs 650 crore.
• Hindustan Construction Company said that its group Chief Financial Officer Praveen Sood has ceased to be the CFO and Key Managerial Personnel with effect from Dec. 31, upon the completion of the term of his contract. The company stated it is in the process of appointing the next CFO.
• Fortis Healthcare's board approved the extension of long stop date under the Master Purchase Agreement to March 26. The company and its arm had entered into the agreement to purchase Indian Entities of RHT Trust under this agreement in Nov. 2017. On Dec. 28, statutory auditors Deloitte Haskins & Sells LLP had resigned.
• Jindal Steel & Power's current CEO Naushad Akhter Ansari became the joint MD of the company with effect from Jan. 1.
• KEC International and Adani Transmission mutually agreed to extend the date of sale to Jan. 31. They entered into this agreement on Nov. 3 in which KEC International was to sell its entire stake in ‘KEC Bikaner Sikar Transmission Private Limited’ to Adani group’s transmission arm.
• Allahabad Bank revised MCLR by 10 basis points across various tenors. Overnight MCLR at 8.25 percent and One Year MCLR at 8.75 percent.
• CreditAccess Grameen said it has completed a direct assignment of Rs 277.73 crore and securitiastion transaction of Rs 110.5 crore.
• Shriram Transport Finance would consider raising fund via debt during the month of January.

• The Bloomberg Commodity Index fell 1.1 percent.
• West Texas Intermediate crude rose 8 cents to $45.41 a barrel.
• U.S. natural gas futures slid 9.8 percent to $2.979.
• Gold futures rose 0.1 percent to $1,284.30 an ounce.

London Metal Exchange

• Aluminium halted a five-day decline, ends 0.05 percent higher.
• Copper halted a two-day rally, ends 0.53 percent lower.
• Nickel ended lower for the third day, down 0.37 percent.
• Zinc ended 1.11 percent higher.
• Lead halted a three-day rally, down 1.99 percent.
• Tin ended 0.05 percent lower.

Good Morning!

Wishing everyone a happy new year!

Most Asian markets are closed, with the U.S. stocks ending the worst year since the financial crisis with a narrow gain in thin pre-holiday trading.

Stocks around the world limped into the end of a dismal year that’s seen bear markets in equities from Japan to Germany. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded a little changed at 10,921 as of 6:50 a.m.

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