Sensex, Nifty Gain The Most In Eight Weeks Aided By Banking, Metal Stocks

India's stock benchmarks rose the most in eight weeks, aided by banking, metal and media stocks. This is the second consecutive week in which the S&P BSE Sensex and NSE Nifty 50 advanced.

The rise comes amid comments from Pfizer and BioNTech that a third dose of their vaccine would neutralise the impact of omicron strain. Investors will assess the November CPI reading in the U.S., due to be released later today for cues on the rising cost-pressures in the world's largest economy and timeline of tapering. Concerns over faster tapering of monetary stimulus by the U.S. Federal Reserve as well the official default of China Evergrande Group on their dollar debt remained other crucial factors.

On Friday's session, Sensex was little changed at 58,786.67. The Nifty 50 also closed little changed at 17,511.30. Both the benchmarks snapped a winning streak of three sessions. Housing Development Finance Corp. contributed the most to the index decline, decreasing 1.2%. Divi's Laboratories Ltd. had the largest drop, falling 1.5%. Today, 26 of 50 shares fell, while 24 rose.

The broader indices outperformed their larger peers with the S&P BSE MidCap adding 0.4% and S&P BSE SmallCap rising 0.85%. Fourteen of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Realty rising nearly 3% on Friday.

The market breadth was skewed in the favour of bulls. About 2,099 stocks advanced, 1,167 declined and 127 remained unchanged.

"The market witnessed profit booking in the first half of the session but firmed up in the afternoon amid positive global cues. Easing worries over the omicron variant of coronavirus also supported buying", Mitul Shah, head of research at Reliance Securities wrote in a note. He added that India was at the beginning of capex revival phase and therefore corporate earnings recovery looked sustainable and premium valuations might sustain, barring near term hiccups.

Domestic equities gave positive returns this week amid easing concerns pertaining to the potential severity of the Omicron covid variant", according to Head of Equity Research (Retail), Kotak Securities Ltd., Shrikant Chouhan, who noted that the majority of the sectoral indices saw positive returns. "With weekly gains ranging between 4.5-4.8%, BSE Real Estate Sector and BSE Metal index saw renewed interest amongst market participants. RBI’s monetary policy committee unanimously kept the repo rate unchanged at 4% along with an accommodative stance. Markets in the immediate term will keenly watch out for the actions on asset tapering and key policy rates in the upcoming US Federal Reserve meet."

Warburg Pincus sold 6.9 million shares, or a 6.2% stake, in MedPlus Health Services Ltd. ahead of the Indian pharmacy firm’s IPO, according to information updated on an issue manager’s website.

• Lavender Rose Investment Ltd, a unit of Warburg Pincus, sold shares to investors, including asset management and life insurance businesses of State Bank of India and Motilal Oswal Financial Services, an addendum to the company’s IPO prospectus showed.

• The shares were sold at Rs 796 apiece, the top of IPO’s price band

• Lavender Rose held a 24.6% stake in the company before the sale and hadn’t offered to sell any shares in the IPO that is scheduled to open for subscription on Dec. 13.

• MedPlus Health is seeking to raise about $186 million via IPO, which has been downsized from $219 million earlier.

Source: Bloomberg

Shares of Gujarat Gas Ltd. rose 2% in intraday trade to Rs 675 apiece, after CRISIL issued AA+/Positive long-term rating for its total bank loan facilities of Rs 2,350 crore.

Of the 31 analysts tracking the company, 20 maintained 'buy', six maintained 'hold' and five maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 5%.

Shares of Bajaj Consumer Care Ltd. rose for the fifth straight day, extending the longest winning streak since the period ended Aug. 12, 2020.

Bajaj Consumer has gained a total of 11% during the streak while the S&P BSE Sensex increased 1.5%.

Of the 16 analysts tracking the company, 13 maintained 'buy', one maintained 'hold' and two maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 47.2%

Shares of Sun Pharma Advanced Research Co Ltd. rose as much as 3.68% to Rs 257.9 apiece after the company said that it has been selected to present updated clinical data of Vodobatinib drug in leukemia subjects, at the 63rd American Society of Hematology annual meeting.

The drug has already been granted orphan drug designation for the treatment of a type of leukemia - CML. The current study provides crucial updates on long-term safety and efficacy

Shares of Dixon Technologies India Ltd. rose over 2.5% to Rs 5,527 apiece after Jefferies reiterated its 'buy' recommendation on the stock and increased the target price to Rs 6,450 from Rs 5389.20, citing growth opportunities for the company from the PLI approvals.

Here's a summary of Jefferies' view on the company...

Jefferies

• The three new PLI approvals in Q3 in telecom, AC, LED components, coupled with earlier PLIs in mobiles and IT hardware likely to drive growth.

• Rising traction in wearables and appliances could set the tone for the next leg of growth.

• PLIs could evolve component ecosystem in India, aiding the company's prospects.

• Dixon is enhancing R&D capability and augmenting capacities across products which bode well for the growth prospects.

• Expect revenue to growth exponentially by 8x over FY20-24 in mobile phones segment which I.T. hardware segment could lead to 3x+ revenue growth over FY22-24.

• Growth prospects appear superior to most peers.

Key Risks:

• Demand slowdown,

• market share loss for key customers,

• supply chain issues and

• cost inflation.

Of the 24 analysts tracking the company, 16 maintained 'buy', five maintained 'hold' and three maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 5.8%

Shares of Greenlam Industries Ltd. shed over 2% to Rs 1,575 apiece, after the company's factory located at Behror in Rajasthan has been shut temporarily following an order from panel monitoring air quality in NCR and adjoining areas.

In an exchange filing, the company said that the facts and reports, based on which the order was issued, seemed improper. The company stated that it is taking necessary steps to resolve the matter at the earliest.

Of the eight analysts tracking the company, six maintained 'buy', one maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 5.8%.

India's stock benchmarks declined, dragged by losses in banking, consumer durables and information technology stocks.

The S&P BSE Sensex fell 0.61% to 58,448.90. The NSE Nifty 50 also declined by similar magnitude to 17,409.45.

The broader indices outperformed their larger peers with S&P BSE MidCap trading little changed and S&P BSE SmallCap notching gains as much as 0.6%. Ten of the 19 sectoral indices compiled by BSE Ltd. declined with S&P BSE Finance shedding 0.7% and S&P BSE Consumer Durables slipping 0.9%.

The market breadth was skewed in the favour of bulls. About 1,920 stocks advanced, 1,274 declined and 135 remained unchanged.

• Lupin Ltd. announced the launch of Lupin Diagnostics in India, as part of its strategy to provide integrated healthcare in the country.

• In an exchange filing, Lupin said that the goal of Lupin Diagnostics is to ensure quality diagnostics services. The company has already established a state-of-the-art 45,000 square feet National Reference Laboratory in Navi Mumbai.

• The company will provide a range of diagnostics tests like flow cytometry, molecular diagnostics, cytogenetics, serology, immunology, amongst others.

SIAM Auto Sales: November (MoM)

Passenger cars: 100,906 units, down 2.8% MoM

• Passenger vehicles: 215,626 units, down 4.7% MoM

• Utility vehicles: 105,091 units, down 6.26% MoM

Two-wheelers: 1,050,616 units, down 31.8% MoM

• Motorcycle: 699,949 units, down 31.23% MoM

• Scooter: 306,899 units, down 34.30% MoM

Source: Society of Indian Automobile Manufacturers

Shares of Deepak Fertilisers & Petrochemicals Corp Ltd. rose over 6%, the biggest intraday gain this month so far, to Rs 389.05 apiece after the company's subsidiary Smartchem Technologies Ltd. invested Rs 2,200 crore in its Technical Ammonium Nitrate (TAN) plant in Gopalpur, Odisha.

Smartchem Technologies is a 100% subsidiary of Deepak Fertilisers.

The project at Tata Steel Industrial park will have a capacity of 377 KTPA and is expected to be completed by August 2024. The plant uses technology from Casale to ensure its safety and low emissions.

TAN is a much-sought international commodity and the state could become a key source of TAN for the entire Eastern belt. The project is expected to generate employment to 1,500 people during the project phase and 325 people during the operation place. It will also contribute Rs 3,000 crore in GST and Rs 1,100 crore in income tax to the exchequer over 10 years.

Cadila Healthcare Ltd. has received U.S.FDA node to initiate Phase 2(b)/3 placebo-controlled adaptive clinical trial to evaluate the efficacy and safety of Saroglitazar Magnesium in subjects with primary biliary cholangitis.

Primary biliary Cholangitis is a severe liver disease that leads to liver cirrhosis, liver failure and even death. The global market for PBC treatment is expected to grow at a CAGR of 36.3% from 2018-2026 and is estimated to reach $10.8 billion by 2026, according to Coherent market insights.

Shares of Cadila Healthcare rose 1.6% in intraday trade. Of the 35 analysts tracking the company, 17 maintained 'buy', nine maintained 'hold' and nine maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 18.2%

Maturities across the India sovereign yield curve were little changed in Friday morning trading.

• The 4-year yield fell 0.9bps to 5.346%

• The 10-year yield was little changed at 6.351%

• The 20-year yield remained unchanged at 6.872%

• The 4-year-10-year yield spread was 100.5bps, vs previous close 99.3bps

Source: Bloomberg

• Star Health pre-market discovery price at Rs 848.80

Source: Bloomberg

• Prices of commodities, raw material and other input costs continue to rise, the company said.

• Tata Motors is compelled to increase prices of its passenger cars.

Source: Exchange Filing, Tata Motors

• Shriram Transport cut to 'add' from 'buy' at Kotak Securities; price target at Rs 1,650

• Indoco Remedies: Coverage initiated with a 'buy' rating at Yes Research; price target at Rs 530

Source: Bloomberg

Shares of Bajaj Electricals Ltd. rose as much as 11.72%, the biggest intraday gain in the ten months since Feb. 9, 2021, to Rs 1,169.15 apiece, after the company announced a review of its corporate structure and evaluate options including demergers, subsidiarisation and strategic partnerships.

The company said it will also consider housing the power transmission and distribution business verticals as standalone legal entity, in an exchange filing Thursday.

Bajaj Electricals intends to appoint various advisors and consultants to assist the board in evaluating the options.

All the 17 analysts tracking the company maintained 'buy' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 21.1%.

Trading volume on the stock was up 42.7 times the 30-day average volume, for this time of the day.

India's stock benchmarks opened lower, dragged by energy and select banking stocks, amid tepid global cues as investors weighed the economic threat of virus infections due to omicron strain and the official default of China Evergrande Group on their dollar debt.

The S&P BSE Sensex shed nearly 0.25% to 58,673.86. The NSE Nifty also declined by similar magnitude to 17,476.20.

The broader indices outperformed their larger peers with both the S&P BSE MidCap and S&P BSE SmallCap gaining over 0.2%. Twelve of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Capital Goods and Consumer Durables adding over 0.25%.

The market breadth was skewed in the favour of bulls. About 1,673 stocks advanced, 710 declined and 83 remained unchanged.

• Indian bond traders are looking forward to a Rs 24,000 crore ($3.2b) weekly auction to gauge demand for the government debt after the central bank left interest rates unchanged on Wednesday. 

• 10-year yields little changed at 6.35% on Thursday; down 2bps on the week

• USD/INR little changed at 75.5200 Thursday; up 0.5% this this  week so far

• Global funds sell net Rs 1,590 crore of India stocks Thursday: NSE

• They sold Rs 282 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 32 crore of corporate debt

• State-run banks sold Rs 824 crore of sovereign bonds on Dec. 9: CCIL data. Foreign banks sold Rs 902 crore of bonds.

Source: Bloomberg

• LIC currently holds 5.4% stake in IndusInd Bank

• Approval is valid till Dec 8, 2022

• On Nov 30, RBI had allowed LIC to raise stake in Kotak Mahindra Bank

Investors seeking to raise their stake in private banks beyond 5% need RBI approval

Source: Exchange Filing

The bigger risk facing the global economy by late 2022 could be stagnation, not stagflation, as cost-driven price pressures hurt still-weak domestic demand and tighter fiscal and monetary policies turn into a drag, according to Nomura Holdings.

For most countries, there is a "dominance of cost-push inflation -- the bad type of inflation that squeezes profit margins, erodes real household income and tends to self-correct when demand is weak", Nomura economics led by Rob Subbaraman wrote in a 2022 outlook report, released December 10.

Asian energy stocks may move after oil fell on concern the spread of the omicron variant will hurt economic activity and hit fuel demand.

• Oil futures in New York closed down 2% on Thursday

• S&P 500’s energy index fell 0.9% for its first decline this week

• Stocks to watch: India’s Reliance Industries, HPCL, BPCL, Indian Oil, ONGC, Oil India

Stocks in information technology sector are/or linked to Oracle Corp. may be active after the company reported better-than-expected quarterly revenue, buoyed by strong cloud sales and increased demand for I.T. solutions.

• Oracle's stock rose 10% in extended trading.

• Oracle's majority owned Indian unit Oracle Financial Services Software gets 38% of its revenue from the parent, according to Bloomberg data.

• In Focus: Oracle's competitors in India, TCS and Infosys