Nifty ends above 11,950, Sensex gains 169 points; metal, bank shine

12 Dec 2019

Market Close: Indian indices ended higher for the second consecutive day on December 12 with Nifty finished above 11,950 level.

At close, the Sensex was up 169.14 points at 40581.71, while Nifty was up 61.60 points at 11,971.80. About 1352 shares have advanced, 1035 shares declined, and 172 shares are unchanged.

Tata Motors, Yes Bank, Vedanta, Tata Steel and SBI were the top gainers on the Nifty, while losers were Infosys, ONGC, HCL Technologies, Bharti Airtel and TCS.

Except IT, all other sectoral indices ended in the green led by the metal, auto, pharma, bank, infra and energy.

Vinod Nair, Head of Research at Geojit Financial Services:

The experience of Ujjivan Financial Services as an erstwhile microfinance institution, coupled with the ability to address mass market customers will further aid Ujjivan Small Finance Bank to be among the leading players in Small Finance Banking space. With strong asset quality and attractive valuation, we have a positive view on a long-term perspective.

Talbros Engineering gains 2%: Care Ratings Limited has assigned CARE BBB+ with a stable outlook for long term bank facilities of Rs 11.72 crore and CARE BBB+ /CARE A2 for short term bank facilities of Rs 57.80 crore of Talbros Engineering.

Market Update: Benchmark indices extended the gains with Nifty above 11,950 level.

The Sensex is up 201.79 points or 0.50% at 40614.36, and the Nifty up 65 points or 0.55% at 11975.20. About 1236 shares have advanced, 932 shares declined, and 153 shares are unchanged.

Aavas Financiers to issue NCDs worth Rs 460cr: Aavas Financiers approved the issuance of secured, rated, unlisted, redeemable, transferable NonConvertible Debentures (NCDs) having a face value of Rs 10,00,000 each, aggregating up to an amount of Rs 460 crore on a private placement basis.

Motilal Oswal Institutional Equities neutral on HDFC Life Insurance:

HDFC Life Insurance has maintained strong momentum in business growth while improving the business mix (toward non-par products), driving a sharp improvement in the VNB margin. The company continues seeing significant potential in the annuity/protection business which will help sustain growth momentum and drive profitability. While we remain positive on the company, the robust 49% stock return over the past year implies limited upside to our target price. Maintain neutral with an unchanged target price of Rs 600.

Godrej Properties Adds New Projects

Godrej Properties announced the addition of three new projects in MMR in the micro markets of Navi Mumbai, Ambernath, and Thane and one new project in North Bangalore. "These new projects will add approximately 1.18 million square metres (12.70 million square feet) to its development portfolio," it said.

Rupee Update: The Indian rupee erased some of its morning gains but trading higher by 12 paise at 70.72 per dollar.

Rahul Gupta, Head of Research - Currency, Emkay Global Financial Services:

The Fed’s policy decision was in line with market expectations, the Fed left the fed fund rate unchanged at 1.5-1.75% after cutting the benchmark index three times. However, the central bank removed an earlier reference to “uncertainties” and said that it will continue to monitor the implications of data for the economic outlook “including global developments and muted inflation pressures.

This has eased the recessionary fears despite the prolonged US-China trade war, and has led to a surge in risk appetite.

The US 10-year yields, Dollar index declined post the policy outcome. This, will have a positive impact on rupee, however, it will be on an edge until ahead of Sunday, when additional Chinese exports to the US are set to kick in.

USD/INR range has come back to 70.50-71.50 for short term, 70.50 will act as a strong support and we can see some reversal from there towards 71 and plus levels.

TCS forms partnership with Flisa Smart Factory: Tata Consultancy Services (TCS) has announced a new partnership with Flisa Smart Factory to market and deploy the Flisa's industrial loT (lloT) and advanced analytics solutions to a wide range of manufacturers across the world.

Cholamandalam Investment approves payment of an interim dividend: Cholamandalam Investment and Finance Company has approved payment of an interim dividend on the outstanding equity shares of the Company at the rate of 50 percent being Re1 per equity share of Rs 2 each for the year ending March 31, 2020. Record date for the purpose of payment of interim dividend shall be December 24, 2019.

Buzzing: Bharat Petroleum Corporation (BPCL) share price rose 2 percent on December 12 after rating agencies has revised their rating on NCDs and senior unsecured debts-foreign currency.

Gold Update: Gold prices were little changed on Thursday as investors waited to see if the United States would slap fresh tariffs on Chinese goods this weekend, while palladium continued its record run on fears of a deepening supply deficit.

KEC International Gains 2%

Shares of KEC International gained 2.5 percent intraday on December 12 after Japanese brokerage firm Nomura has initiated coverage on the stock with a buy call and target price of Rs 388, implying 40 percent potential upside from current levels.

"Company's focus on growth with stable margins offers comfort and rising market share amid reduced competition is a key catalyst," the research house said.

Nomura expects strong near-term growth with stable margin and estimates 23 percent EPS CAGR over FY19-22 with broadly stable margin.

Technical Outlook

"In last few sessions, market has given up some of the recent gains. However, this just seem to be a correction within an uptrend and hence, we continue with our advised for traders to take this dip as an opportunity to accumulate stocks for positional trades. For today's session, 11,850-11,800 is seen as the immediate support zone whereas; 11,960-11,980 could be the immediate resistance," Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking) said.

Confidence Petroleum gets contract: Company's project division has been awarded with contract for commissioning of CNG Dispensing Stations by Gujarat Gas in the State of Gujarat. The project division of the company shall aggressively pursue commissioning of CNG Stations and other related projects across the nation in near future.

Rupee Update: The Indian rupee holding on its morning gains and trading higher by 17 paise at 70.67 per dollar.

Buzzing: Cipla share price added more than 2 percent in the morning trade on December 12 after the pharmaceutical major announced submission of application for intravenous (IV) tramadol with USFDA.

Market Update: Benchmark indices are holding on their morning gains with Nifty trading above 11,950 level.

The Sensex is up 147.37 points or 0.36% at 40559.94, and the Nifty up 46.30 points or 0.39% at 11956.50. About 1002 shares have advanced, 504 shares declined, and 98 shares are unchanged.

Ujjivan Small Finance Bank IPO: Ujjivan Small Finance Bank, the subsidiary of microfinance lender Ujjivan Financial Services, settled at Rs 58 on the Bomaby Stock Exchange on December 12 in the pre-opneing session.

Prakash Industries rises 5% on successful bidder: ?Prakash Industries share price rose 5 percent in the early trade on December 12 after company declared a successful bidder for the Bhaskarpara coal mine.

Reliance Industries' arm acquires 85% stake in NowFloats Technologies: Reliance Strategic Business Ventures (RSBVL), a wholly-owned subsidiary of Reliance Industries has acquired equity shares of NowFloats Technologies for a cash consideration of Rs 141.63 crore. The said investment represents 85% holding in the equity share capital of Nowfloats.

Market Opens: It is positive start for the Indian indices on December 12 with Nifty around 11,950 level.

The Sensex is up 141.48 points or 0.35% at 40554.05, and the Nifty up 38.10 points or 0.32% at 11948.30. About 397 shares have advanced, 109 shares declined, and 22 shares are unchanged.

Yes Bank, Bharti Infratel, Vedanta, BPCL, Cipla, Hindalco Industries, Vodafone Idea and Tata Motors are among major gainers on the Indices, while losers are Bharti Airtel, Zee Ent, ONGC, HDFC and Britannia Industries.

Rupee Opens: The Indian rupee gained in the early trade on Thursday. It opened higher 15 paise by at 70.69 per dollar against Wednesday's close 70.84.

Market at pre-open: Benchmark indices are trading firm in the pre-opening session on December 12.

At 09:01 hrs IST, the Sensex is up 98.91 points or 0.24% at 40511.48, and the Nifty up 24.80 points or 0.21% at 11935.

Dollar Update: The dollar nursed its steepest losses in weeks on Thursday, after the US Federal Reserve’s benign inflation outlook hosed down expectations for a rate hike any time soon, pushing Treasury yields lower.

Credit Suisse on Financial Sector

Wholesale debt market differentiation among NBFCs hasn’t eased

Long-dated funding is still largely available to select few NBFCs

Limited headroom for increase in NBFC exposure for PSU banks from 10-15%

Continue to prefer retail-focussed NBFCs HDFC, M&M Fin, Chola Fin & LIC Housing

Credit Suisse on Insurance Sector

Life insurance growth remains strong

LIC & HDFC Life Lead, ICICI Pru lags

Continue to like the space despite the recent run-up

Maintain outperform ratings on ICICI Pru & SBI Life

Credit Suisse on L&T Infotech

Maintain outperform, target at Rs 1,900 per share

'Go To' mkt strategy & client focus leading to high win rates in deals

Overall deal pipeline is up 42% YoY, with share of new logos up 2x

Major efforts to train people across new technologies

Co expects a strong recovery in H2

Jefferies on Financials

Govt extending partial credit guarantee scheme for BBB+ rated asset pools

It’s positive as it broadens the scope of the scheme

Doubt PSBs' appetite for buying lower rated asset pools

Bankruptcy code tweaked to provide immunity to cos resolved u/insolvency process

It should clear a key hurdle & pave the way for resolution of Bhushan Power & Essar Steel

SBI should be a key beneficiary

Morgan Stanley on NTPC

Overweight rating, target at Rs 152 per share

Believe the share price will rise in next 15 days

5 of 6 plants contributed to under-recoveries in FY19/H1FY20, have improved

Morgan Stanley on Financials

Credit guarantee scheme for NBFCs relaxed

Doubt that the scheme will resolve clear divergence between credit supply to NBFCs

SMA-0-categorized NBFCs / HFCs now eligible to benefit from the scheme

Minimum rating of underlying asset pool relaxed to 'BBB+'

Scheme is effective up to June 30, 2020 & fin min can extend it by a further 3 months

Morgan Stanley on HDFC Life

Equal-weight call, target at Rs 580 per share

Expect strong/consistent VNB growth over the medium term

Co one of the best plays on India's insurance story

Morgan Stanley on Adani Ports

Overweight rating, target at Rs 433 per share

Mundra volumes were down 5% in Q2 & are likely to rebound

Rebound May be driven by restocking of coal by IPPs & ramp-up at refineries

Growth in Nov was 6% Vs -5% in Oct & -7% in Nov 2018

While QTD growth is flat, Mundra has started growing faster than JNPT

Morgan Stanley on CONCOR

Equal-weight rating, target at Rs 572 per share

EXIM container movement in rail rebounded to 9% in Oct-Nov Vs flat in Q2

Co Has lost market share for past nine quarters as it focuses on profitable growth

Morgan Stanley on L&T Info

Overweight call, target at Rs 1,860 per share

Management sounded confident regarding H2FY20 growth

Co remains a preferred midcap pick in our coverage

Analysis indicates significant synergies if Mindtree & L&T Info work together

Nomura on KEC International

Initiate coverage with buy rating, target at 388 per share

Focus on growth with stable margins offers comfort

Rising mkt share amid reduced competition a key catalyst

Expect strong near-term growth with stable margin

Estimate 23% EPS CAGR over FY19-22 with broadly stable margi

HSBC on M&M Financial

Retain buy rating, target at Rs 400 per share

Retail auto sales improved during the festive period

Sustainability will depend on rural demand revival

Delayed govt payment & untimely rainfall key factors affecting H2 collections

Valuation multiples well below historical mean makes risk-reward favourable

Oil prices stabilize on OPEC supply deficit forecast: Oil prices steadied on Thursday with the market mood switching to relief as OPEC forecast a supply deficit next year, from doom and gloom over data showing a surprise increase in US crude inventories.

Brent futures rose 19 cents, or 0.3% to 63.61 a barrel by 0100 GMT, after skidding 1% on Wednesday on the US stocks build-up. West Texas Intermediate crude was down 9 cents at $58.85 a barrel, following a 0.8% drop the previous session.

US Markets: Wall Street’s main stock indexes ended modestly higher on Wednesday after the US Federal Reserve held interest rates steady and signaled that borrowing costs are likely to remain unchanged indefinitely.

The Dow Jones Industrial Average rose 29.37 points, or 0.11%, to 27,911.09, the S&P 500 gained 9.1 points, or 0.29%, to 3,141.62, and the Nasdaq Composite added 37.87 points, or 0.44%, to 8,654.05.

SGX Nifty: Trends on SGX Nifty indicate a positive opening for the broader indices in India, a gain of 47.50 points or 0.40 percent. Nifty futures were trading around 11,996.50-level on the Singaporean Exchange.