Sensex, Nifty End Higher For Second Day

Indian equity benchmarks ended higher for the second straight trading session on Monday.

The S&P BSE Sensex Index closed 0.43 percent higher at 35,850.16 and the NSE Nifty 50 Index ended at 10,776.60, up 0.46 percent.

Eight out of 11 sectoral gauges compiled by NSE advanced, led by the NSE Nifty Realty Index's 1.19 percent gain. On the flipside, the NSE Nifty Pharma Index was the top sectoral loser, down 0.58 percent.

Shares of state-owned NHPC Ltd. were trading unchanged after the company announced complete shutdown of its Chamera-III Power Station from Jan. 6 to Jan.14. The shutdown will cause tentative loss of 9.48 million units in generation and 2.74% in Plant Availability Factor (PAF), NHPC said in a notification to the exchanges.

The central bank has not taken a decision on the interim dividend payment yet, RBI Governor Shaktikanta Das said.

While a lot of discussions taken place between the RBI and the government, no specific communication has taken place regarding this, he added.

Reuters, in a report today, said that the RBI is likely to transfer an interim dividend of Rs 30,000-40,000 crore to the government by March, citing sources.

IL&FS groups unit— IL&FS Transportation Networks Ltd. defaulted on dividend payment of Rs 7.12 crore citing insufficient funds, according to its stock exchange filing.

• Berger Paints: About 54 lakh shares changed hands in two block deals on BSE and NSE.
• Coal India: About 21 lakh shares changed hands in a single block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Shares of Indiabulls Real Estate rose as much as 6.5 percent, the most since Dec. 19, to Rs 92.80.

Trading volume was double, its 20-day average, Bloomberg data showed. The stock has declined 58 percent in the past 12 months compared to a 5.3 percent advance in the Sensex.

About 13.4 lakh shares of Bharat Electronics changed hands in a block deal, according to Bloomberg data. Buyers and sellers were not known immediately.

• Reliance Jio says the issue of spectrum dues must be resolved between RCom and DoT.
• Supreme Court asks Jio to give undertaking to abide by DoT guidelines for spectrum trading.
• Jio says it is willing to abide by spectrum trading norms if bank guarantee are deposited by RCom.

• Supreme Court Asks Reliance Communications to file a reply in four weeks.
• Reliance Communications offers to deposit 118 crore in form of two Demand Drafts.
• Reliance Communications owes Rs 550 crore to Ericsson and the contempt was filed in connection with the same case.

Key highlights from BloombergQuint's conversation with Johan Jooste, chief investment officer at Bank of Singapore:

• 2019 can be a lot better than 2018.
• Some bright spots for emerging markets are visible.
• 2019 is going to be a challenging year and will be a volatile year.
• Equity markets will struggle in 2019.
• If the U.S. market is drifting sideways or weakens, it doesn't mean that the global market will suffer.
• There is no reason to panic right now; gold is a panic asset.
• U.S. payroll data and trade talks are progressing well.

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

Premium on the contract surged 27.48 percent to Rs 99.50. Over 1.32 lakh shares were removed from the open interest which stood at over 37.57 lakh shares.

Portfolio managers failed to recover from the rout in mid-cap stocks and the liquidity crisis for non-bank lenders in 2018 even as the nation’s two benchmark indices managed to end higher. (Read the full story here)

• Indian equity benchmarks traded at day's high.
• The S&P BSE Sensex Index rose as much as 1.07 percent to 36,076 and the NSE Nifty 50 Index rose as much as 1.01 percent to 10,835.95.
• About 1,124 stocks advanced and 480 shares declined in the NSE.

The NSE Nifty Realty Index rally for the second day, led by the gains in Indiabulls Real Estate Ltd. and Godrej Properties Ltd.

• Bharti Infratel: About 13.4 lakh shares changed hands in a block deal.
• SBI: About 11.9 lakh shares changed hands in a block deal.

Buyers and sellers were not known immediately.

Source: Bloomberg

Shares of Astral Poly Technik extended gains for the fifth day and is set for its longest winning streak in nearly five months. The stock rose as much as 1.5 percent to trade at a new all-time high at Rs 1,196.

The stock traded at 64 times its estimated earnings per share for the coming year, Bloomberg data showed.

Shares of the private lender fell as much as 4.5 percent, the most in over two months, to Rs 505.05.

Bandhan Bank and Gruh Finance, a housing-finance company controlled by HDFC, is said to merge through a share-swap deal, according to a Times of India report. The deal is valued at around $12 billion, the report said.

The trading volume was four times the 30-day average for this time of the day, according to Bloomberg data.

Shares of the auto components maker fell as much as 2.5 percent to Rs 470, its lowest level since February 2017.

International brokerage and research firm CLSA downgraded its stock rating to to ‘Sell’ from ‘Outperform’ and its cut price target to Rs 420 from Rs 680, implying a potential downside of 10.6 percent from the current market price.

Trading volume was 6.2 times its 20-day average, Bloomberg data showed. The Relative Strength Index was 29, indicating that the stock may be oversold.

Shares of the real estate developer rose as much as 1.5 percent to 447.

During the third quarter the real estate company had achieved new sales volume of 908,824 square feet valued at Rs 698.8 crore .

The company’s share of sales value has decreased by 2 percent from Rs 610.5 crore to Rs 600.2 crore on a year on year basis and the price realisation marginally increased by 1 percent to Rs 6,604 per square feet, for the same period.

The developer also stated that in next two-to-three quarters they will be launching one more affordable housing project in Gujarat’s GIFT City along with other projects in Southern India and Pune.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 605.
• New launch momentum picked up during the December quarter.
• Temporary dip in market weakened Gurgaon sales.
• Expect presales to remain steady driven by both ongoing and new projects.

JMFinancial

• Muted December quarter sales; Affordable housing launch to improve March quarter’s operations.
• Well placed to benefit from macro changes; demand revival key for improvement in land bank valuation.
• Key monitorable remains affordable housing launch and commercial segment foray.

Shares of Titan rose as much as 3.8 percent to trade at near eight-month high at Rs 964.

The company said good growth momentum seen across all its businesses in seasonally strong third quarter. For the jewellery division strong same sales growth continues to occur, expected growth for full year stands at 22 percent and the customer demand remained buoyant in the festive season.

The Watches segment will have a subdued EBIT margins due to higher advertising spends. Overall retail network crossed two million square feet mark.

Trading volume was seven times its 20-day average, Bloomberg data showed.

Here'’s what analysts had to say post company’s comments:

Citi

• Maintained ‘Buy’ with a price target of Rs 1020
• December quarter updates suggests healthy growth trends have continued driven by market share gains.
• Expect overall revenue, EBIT and net profit to grow 25 percent, 19 percent and 18 percent respectively on a yearly basis.
• Expect solid jewellery business led by festive season, increase in gold price and steady margins.

PhillipCapital

• Maintained ‘Buy’ with a price target of Rs 1,075.
• Expect EBITDA margin to see 130 basis points improvement led by jewellery business and operating leverage.
• Watch segment are likely to remain subdued on account of higher ad spends.
• Expect Titan Eyeplus to report more than 15 percent revenue growth in December quarter as well.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,186.
• December quarter updates highlight continued strong growth in jewellery division.
• Implied growth run rate for jewellery in the second half is 30 percent on a yearly basis.
• Remains top pick and a Macquarie Marquee idea.

Indian equity benchmarks strengthened for the second day, mirroring positive Asian cues after soothing Federal Reserve comments and an easing of monetary policy in China stoked a renewed appetite for risk assets.

The S&P BSE Sensex Index rose as much as 0.95 percent to 36,033.20 and the NSE Nifty 50 Index rose as much as 0.86 percent to 10,819.60.

The market breadth was tilted in favour of buyers. All the sectoral gauges compiled by NSE advanced, led by the NSE Nifty Metal Index's 1.72 percent gain.

The Indian rupee strengthens for the second day. the home currency appreciated as much as 0.54 percent to 69.35 against the U.S. dollar.

The local legal tender traded in line with Asian peers after Federal Reserve Chairman signalled it could pause rate increases.

An easing of monetary policy in China also triggered a renewed demand for riskier assets overseas with Indian stocks likely to benefit from this.

Also due later today is the GDP estimates for the current fiscal year to March and according to forecasts, the economy is expected to expand at 7.2 percent, up from 6.7 percent last year.

Implied opening from forwards suggest the rupee/dollar pair may start trading around 69.36, up from 69.7325 it closed on Friday.

While the growth pace of 7.2 percent will make India the fastest growing major economy in the world, it will be lower than the RBI's estimate of 7.4 percent for this year. There are also signs that a global slowdown could hurt India's growth prospects and the central bank may shift to an easing bias in coming months.

As a result, Indian bonds which endured a sell off last week could draw some support. The 10-year bond yield rose 2 basis points to 7.45 percent on Friday, adding six basis points last week as worries about India's spending and budget deficit weighed.

F&O Cues

• Nifty January Futures closed trading at 10778, premium of 51 points.
• Max OI for January series at 11,000 Call, OI at 38.9 lakh shares.
• Max OI for January series at 10,500 Put, OI at 40.5 lakh shares.

Stocks In F&O Ban

• Adani Power
• Jet Airways

Put-Call Ratio

• Nifty PCR unchanged at 1.34.
• Nifty Bank PCR at 1.12 versus 0.83.

• Is Bajaj Finance — last year’s best-performing Nifty 50 stock — losing steam?
• What to make of Titan, Sobha’s Q3 business updates and the latest North America truck sales data.

Get the heads-up on BQEdge

Citi on India Infrastructure

• New project announcements decline 55 percent on a yearly basis in December quarter.
• Project completions also witness a decline.
• Stalled projects reduce but continue to remain high.
• General Elections will likely to have a negative impact.
• A steady Government post general elections important.

Citi on Container Corp

• Maintained ‘Buy’ with a price target of Rs 806.
• December quarter’s volume growth decelerates as expected.
• Volume de-growth to weigh on stock price in short run.
• Continues to enjoy structural advantages in India’s logistics sector.

Citi on Voltas

• Maintained ‘Buy’ with a price target of Rs 615.
• December quarter witnessed strong UCP performance; Industry headwinds not abated.
• Industry checks suggest Voltas is unable to effect price hikes.
• Long-term prospects intact despite weak December quarter.

UBS on PVR

• Maintained ‘Buy’; hiked price target to Rs 1,905 from Rs 1,560.
• Screen additions to fuel higher growth; GST rate cut is positive.
• PVR will be valued richly due to high earnings expectations and content risk diversification.
• Overhang: capital raising and pending verdict on outside F&B.

Axis Capital on Tube Investments

• Initiated ‘Buy’ with a price target of Rs 470.
• Expect stock to double in three years; 10 percent profit before tax margins with possible upside surprises.
• Growth areas: improving export revenue, capturing product adjacencies and inorganic opportunities.
• Positives: operating leverage, lower fixed cost, efficiency gains, higher realisations and lower finance cost.

CLSA on Auto

• Testing times in 2019-20 given subdued demand and large regulatory cost push ahead
• Passenger vehicle growth to outpace two-wheelers and trucks in the next two financial years.
• Competition high in two-wheelers and trucks, but benign in passenger vehicles.
• Bajaj Auto: Downgraded to ‘Sell’ from ‘Outperform’; cut price target to Rs 2,450 from Rs 2,850.
• Bharat Forge: Downgraded to ‘Sell’ from ‘Outperform’; cut price target to Rs 420 from Rs 680.
• Eicher Motors: Downgraded to ‘Outperform’ from ‘Buy’; cut price target to Rs 22,300 from Rs 30,000.
• Ashok Leyland: Maintained ‘Sell’; cut price target to Rs 85 from Rs 100.
• M&M: Maintained ‘Buy’; cut price target to Rs 900 from Rs 1,020.
• Tata Motors: Maintained ‘Sell’; cut price target to Rs 150 from Rs 170.

On Sobha

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 605.
• New launch momentum picked up during the December quarter.
• Temporary dip in market weakened Gurgaon sales.
• Expect presales to remain steady driven by both ongoing and new projects.

JMFinancial

• Muted December quarter sales; Affordable housing launch to improve March quarter’s operations.
• Well placed to benefit from macro changes; demand revival key for improvement in land bank valuation.
• Key monitorable remains affordable housing launch and commercial segment foray.

On Titan

Citi

• Maintained ‘Buy’ with a price target of Rs 1020
• December quarter updates suggests healthy growth trends have continued driven by market share gains.
• Expect overall revenue, EBIT and net profit to grow 25 percent, 19 percent and 18 percent respectively on a yearly basis.
• Expect solid jewellery business led by festive season, increase in gold price and steady margins.

PhillipCapital

• Maintained ‘Buy’ with a price target of Rs 1,075.
• Expect EBITDA margin to see 130 basis points improvement led by jewellery business and operating leverage.
• Watch segment are likely to remain subdued on account of higher ad spends.
• Expect Titan Eyeplus to report more than 15 percent revenue growth in December quarter as well.

Macquarie

• Maintained ‘Outperform’ with a price target of Rs 1,186.
• December quarter updates highlight continued strong growth in jewellery division.
• Implied growth run rate for jewellery in the second half is 30 percent on a yearly basis.
• Remains top pick and a Macquarie Marquee idea.

• Odisha Cement price band revised to 10 percent.

• Titan Q3 update: Company said good growth momentum seen across all its businesses in seasonally strong third quarter. For the jewellery division strong same sales growth continues to occur, expected growth for full year stands at 22 percent and the customer demand remained buoyant in the festive season. The Watches segment will have a subdued EBIT margins due to higher advertising spends. Overall retail network crossed two million square feet mark.
• Reliance Industries received a nod from the Reserve Bank of India for the merger of U.S. arm-Reliance Holding USA Inc with wholly owned arm Reliance Energy Generation and Distribution Ltd. The company said that the board will consider the said proposal for amalgamation at a meeting.
• NHPC said that its 390 MW Power Station in Jammu and Kashmir is under complete shutdown from Jan. 01-12 for replacement work. The company also stated the above shutdown will cause tentative loss of 21.4 MU and 0.55 percent in PAF.
• GMR Infrastructure said the reason for contract termination from Malaysian Airports Holdings Berhad in its airport arm was that long stop date of Dec. 31 for meeting various conditions could not be extended. The company said that discussions are underway to enter into updated agreement.
• IDBI Bank: S&P revised its credit rating to BB/Stable from BB/Watch Negative. The rationale for this move given by the rating agency is that they expect the bank to meet regulatory capital requirement following a capital infusion from LIC.
• Sobha Q3 Update: During the third quarter the real estate company had achieved new sales volume of 908,824 square feet valued at Rs 698.8 crore .The Company’s share of sales value has decreased by 2 percent from Rs 610.5 crore to Rs 600.2 crore on a year on year basis and the price realisation marginally increased by 1 percent to Rs 6,604 per square feet, for the same period. The developer also stated that in next two-to-three quarters they will be launching one more affordable housing project in Gujarat’s GIFT City along with other projects in Southern India and Pune.
• Responsive Industries launched luxury flooring tiles, which will be the company’s first foray in the B2C segment.
• Future Lifestyles Fashions increased its foreign portfolio investment limit in the company from 24 percent to 49 percent. The company said that this action has been noted by the National Securities Depository Ltd..
• Bharat Road Networks: Chairman and Director Brahm Dutt resigned from his post with immediate effect, citing personal reasons.
• The board of Shalimar Paints approved a rights issue with an allotment of 3.1 crore shares at Rs 64.5 per share, aggregating to Rs 201 crore.
• BHEL has commissioned a 800 MW thermal plant in Telangana.
• Kirloskar Electric will sell 1.065 acre of land situated at  Bangalore to Brigade Enterprises for Rs 55 crore.
• Sagar Cements’ December cement sales rose 28.3 percent year-on-year to 326,272 MT.
• ONGC Videsh Ltd., the overseas arm of ONGC, reported a significant discovery of oil in its offshore block in Columbia. OVL, which is Operator, holds 70 percent stake in the block along with its Partner Petrodorado South America S.A. Sucursal (PDSA), Colombia (30 percent)
• Spentex Industries said that both Indian Bank and SBI have assigned their respective debts due and payable to them by the company in favour of Asset Reconstruction Company (ARCIL) under SARFAESI Act.
• The central government ordered an amalgamation of Punjab Gramin Bank, Malwa Gramin Bank and Sutlej Gramin Bank into single rural bank w.e.f. Jan. 1, 2019. NABARD, the Government of Punjab and Punjab National Bank, State Bank of India and Punjab and Sind Bank are sponsors of these regional rural banks.

• 5:30 p.m.: India annual GDP estimate for year ending March 2019; estimates at 7.2 percent, (prior 6.7 percent).
• A U.S. delegation is in Beijing for trade talks with Chinese officials, the first face-to-face encounter since Trump and Xi agreed to a temporary truce on Dec. 1.
• Wednesday sees the release of minutes from the Fed’s Dec. 18-19 policy meeting. Powell will speak to the Economic Club of Washington D.C. on Thursday.
• U.K. Parliament resumes a debate on the Brexit withdrawal bill, with Prime Minister Theresa May seeking to avoid defeat in a vote set for the week of Jan. 14.

• West Texas Intermediate crude climbed 1.9 percent to $48.86 a barrel.
• Brent crude traded higher for the sixth day, up 1.33 percent to $57.82 per barrel.
• Gold was at $1,284.41 an ounce, down 0.1 percent.

London Metal Exchange

• Aluminium ended higher for the second day, up 1.63 percent.
• Copper halted a three-day decline, up 3.17 percent.
• Lead halted a three-day decline, up 0.88 percent.
• Tin halted a two-day rally, down 0.1 percent.
• Nickel ended 2.16 percent higher.
• Zinc halted a two-day decline, up 2.48 percent.

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose over 1 percent to 10,890 as of 7:55 a.m.

Stocks across Asia kicked off the week with strong gains after soothing Federal Reserve comments and an easing of monetary policy in China triggered a renewed appetite for risk assets.

Shares in Japan led the charge, with advances also in Hong Kong, South Korea and Australia. U.S. futures climbed, signaling Friday’s rally in U.S. stocks could continue.