Domestic equity market benchmarks BSE Sensex and Nifty 50 ended the first trading day of December on a positive note, surging over one per cent eachShare Market News Today | Sensex, Nifty, Share Prices HIGHLIGHTS: Domestic equity market benchmarks BSE Sensex and Nifty 50 ended the first trading day of December on a positive note, surging over one per cent each. BSE Sensex zoomed 506 points or 1.15 per cent to end at 44,655, while the broader Nifty 50 index rose 140 points or 1.08 per cent to settle at 13,109. Sun Pharma shares were the best performers, rising over 5.5 per cent, followed by IndusInd Bank, Tech Mahindra, ONGC, Bharti Airtel, Infosys, ICICI Bank and TCS. On the flip side, Kotak Mahindra Bank, Nestle India, Titan Company, Bajaj Finance, HUL and NTPC were among the top laggards. Barring Nifty FMCG index, all the sectoral indices ended in the positive territory, led by Nifty PSU Bank, and Nifty IT index. Equity benchmarks outperformed the broader markets today. S&P BSE MidCap index rose 0.94 per cent or 158 points to end at 17,073, while the S&P BSE SmallCap index ended at 17,013, up 138 points or 0.82 per cent.
Highlights
With frequency indicators and GDP data conveying meaningful rebound in economic activity and retail inflation remaining stubbornly high, we not only expect the RBI to maintain status quo in Dec-20 policy meeting, but the minimal chance of a 25bps rate cut in Feb-21 also appears to be fading away. We also believe that the MPC may not do much on the non-interest rate tools, as significant measures (OMOs, TLTROs) have already been unleashed during the last policy meeting. The fact that liquidity remains high, while growth is gaining traction, makes us feel that RBI will adopt a wait-and-watch approach for next few months. We will likely see RBI upgrade its growth outlook, wherein the Central bank will scale down on its earlier pessimistic GDP projection of 9.5% for FY21. Similarly, RBI will also update on the inflation trajectory, when compared with the earlier expectations of CPI moderating in Q4 FY21: Amar Ambani, Senior President & Institutional, Research Head, YES Securities
BSE Sensex zoomed 506 points or 1.15 per cent to end at 44,655, while the broader Nifty 50 index rose 140 points or 1.08 per cent to settle at 13,109.
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Since the news of Pfizer and BioNtech’s vaccine started doing the rounds, investors are eagerly eyeing the much awaited normalcy. However, this has taken a toll on the much loved FAANG stocks and Microsoft -- the tech giants that skyrocketed during the lockdown months. Their recent underperformance makes one question -- have these stocks run out of steam now? “It increasingly looks like growth has peaked, just like it increasingly looks like Big Tech’s share of the S&P500 market cap has peaked,” said Chris Wood, global head (equity strategy), Jefferies.
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What should a central banker do when one is seeing rising yet likely-to-cool-off inflation? When you see a good Q2 GDP growth data, yet uncertainty exists with respect to coming quarters. When you need liquidity to provide credit to real sector, yet grapple with not so high credit offtake. These could be the centre point for discussion ahead of the RBI monetary policy. We expect the RBI to be on hold yet another time – and suggest an extended pause as conflicting signals emerge from macro data points. Focus also could be on how much is the desired liquidity to ensure optimum balance between rates and monetary transmission: Lakshmi Iyer, President and Chief Investment Officer (Debt) & Head Products, Kotak Mahindra Asset Management Company
The government collected GST revenue of more than Rs 1 lakh crore for the second consecutive month in November 2020. GST collections stood at 1.05 lakh crore in the month, according to the Ministry of Finance. At a time when the government is struggling with revenue collections, October and November have seen decent growth in GST collections, signalling the recovery in the economy.
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The RBI faces a challenge of elevated inflation, high government borrowing and large capital inflows. CPI inflation has been outside the 2-6% tolerance band for seven months. Alongside, public sector borrowing is likely to rise to about 16% of GDP in FY21. The RBI has understandably stepped up on state and central government bond purchases to manage the elevated supply.
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Burger King India’s initial public offer (IPO) is set to open for subscription on Wednesday. The Rs 810-crore IPO will close on December 4, 2020. The IPO of one of the fastest-growing QSR brands would be the fourteenth IPO in the current fiscal. Ahead of the IPO, the grey market premium of Burger King India shares has risen.
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Our sales in these two months saw a 78% y-o-y jump over the same period in 2019. Much can be attributed to the multiple schemes and offers available across cities this year - particularly the limited-period stamp duty cuts in Maharashtra. In many cities, these incentives add up to an overall financial benefit of 5-15% of the property cost. The rock-bottom home loan interest rates have also played a role in India, while NRIs seem to be making the most of the reduced property prices in Dubai: Anuj Puri, Chairman – ANAROCK Property Consultants
Aurobindo Pharma stock up by 2.5% after positive market news of completion of disposition of Natrol LLC for ₹4048 crores. Aurobindo Pharma Limited has entered into an agreement to dispose business assets of Natrol LLC, a wholly owned step-down subsidiary in USA dated 25th October 2020 with New Mountain Capital LLC & Jarrow Formulas Inc. Natrol annual sales for the 12 months ended March 31, 2020 was about USD 157 Million. This disposal cum sale of business will help Aurobindo to reduce its debt and focus on its core business. Company has completed this transaction before the aforesaid date earlier given: Yash Gupta Equity Research Associate, Angel Broking Ltd
NSE Nifty 50 might take a breather in December, after repeatedly setting fresh all-time highs last month. The rally that the benchmark index saw last month was backed by the strong foreign fund inflows and the positive newsflow around the covid-19 vaccine. “In the coming month, we maintain our overall constructive stance with an incremental shift to broader markets, as the Nifty is expected to undergo consolidation amid positive bias in the range of 12800-13200 after a sharp 14% rally in November,” said brokerage and research firm ICICI Direct.
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We maintain REDUCE on Siemens India Ltd. (SIL) and roll forward TP (Rs 1,370) to Dec-22 (35x). We upgrade FY21E/22E/23E EPS on account of improved margin profile. SIL delivered Revenue/EBIDTA/APAT beat of 31/37/33%. After a washout 3QFY20, margins across all segments improved both YoY and QoQ, driven by higher services and exports in the revenue mix (low base of revenue for FY20). Coming two quarters will give a better visibility on sustainability of improvement in EBIDTA margins of 12.9% (+305/+1350bps YoY/QoQ) in 4QFY20. SIL has indicated good margins in order backlog backed by corrective cost optimization measures and some of it sustaining.
~ HDFC Securities
"Aurobindo Pharma stock up by 2.5% after positive market news of completion of disposition of Natrol LLC for ₹4048 crores. Aurobindo Pharma Limited has entered into an agreement to dispose business assets of Natrol LLC, a wholly owned step-down subsidiary in USA dated 25th October 2020 with New Mountain Capital LLC & Jarrow Formulas Inc. Natrol annual sales for the 12 months ended March 31, 2020 was about USD 157 Million. This disposal cum sale of business will help Aurobindo to reduce its debt and focus on its core business. Company has completed this transaction before the aforesaid date earlier given," said Yash Gupta Equity Research Associate, Angel Broking.
Cement stocks were in focus today as ACC, Shree Cement, JK Cement, Ramco Cement, Dalmia Bharat among others hit their respective 52-week highs. Analysts at Nirmal Bang said that the cement prices were strong in November 2020 due to pick-up in demand in the non-trade segment (infra segment) and continuation of demand from the individual house building (IHB) segment.
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The manufacturing activity in the month of November was at a three-month low; still, it has significantly expanded. The manufacturing PMI stood at 56.3, compared to 58.9 in October, according to the IHS Markit report. While all three broad areas of the manufacturing industry recorded expansion, the growth was led by consumer goods, which was the only sector to see a stronger rate of increase, the report added.
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Gold prices in India started trading firm on the first day of December, after falling nearly 6 per cent in the previous month. On MCX, gold February futures were trading Rs 172 or 0.36 per cent higher at Rs 48,090 per 10 gram while silver March futures were ruling at Rs 60,955 per kg, up Rs 733 or 1.22 per cent. Yesterday, the trading in the commodity market started in the evening as it was shut in the morning on the occasion of Guru Nanak Jayanti. Gold prices crashed by Rs 2,859 or 5.63 per cent in the month of November on MCX.
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Glenmark stock up by 1% on news of Glenmark to divest in Anti-Allergy brands to Dr Reddy’s. Glenmark Pharmaceuticals Ltd. announced that it has entered into a definitive agreement with Dr. Reddy’s Laboratories Ltd. to divest its brand Momat for Russia, Kazakhstan, Uzbekistan, Russia, Kazakhstan, Uzbekistan and Ukraine along with rights to the trademarks, dossiers and patents for the territories mentioned. The divested brand and its extensions represent two types of products, (a) Mometasone mono product and (b) combination of Mometasone with Azelastine, and are indicated for the treatment of Seasonal and Perennial Allergic Rhinitis. This is positive development for the company. Glenmark pharma committed to the respiratory space globally in line with the company strategy, company will launch Ryaltris which is global brand for the company in Russia and CIS market: Yash Gupta Equity Research Associate, Angel Broking Ltd
13050 is the resistance for the Nifty - we need to keep above this level to continue the upward journey. If we can get past 13050, we should achieve 13200. The support is at 12800 and till this level holds, we can continue buying on dips for higher targets: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
Lack of dominant theme can let rupee trade sideways driven on the basis of foreign inflows and RBI’s stance. In the past month, despite receiving inflows worth Rs. 60,358 crores and dollar remain on the weaker note, rupee couldn’t strengthen in line with peers as RBI remain firm in the dollar buying intervention. If RBI remains proactive in its intervention as seen in November, the strength in the pair shall be steady and capped near 73.20-73.50 levels. As the pressure is on the appreciation side, it is advisable to sell above 74.00-74.50 levels and for buying one can hedge via at the money call option: Amit Pabari, managing director, CR Forex Advisors
Lack of dominant theme can let rupee trade sideways driven on the basis of foreign inflows and RBI’s stance. In the past month, despite receiving inflows worth Rs. 60,358 crores and dollar remain on the weaker note, rupee couldn’t strengthen in line with peers as RBI remain firm in the dollar buying intervention. If RBI remains proactive in its intervention as seen in November, the strength in the pair shall be steady and capped near 73.20-73.50 levels. As the pressure is on the appreciation side, it is advisable to sell above 74.00-74.50 levels and for buying one can hedge via at the money call option: Amit Pabari, managing director, CR Forex Advisors
The trend among sectoral indices was mixed in early trade. The nifty Metal index jumped 0.68 per cent while Nifty Financial Services index fell 0.35 per cent.
Top BSE Sensex contributors were Infosys, Reliance Industries Ltd (RIL), ICICI Bank, L&T and UltraTech Cement.
BSE Sensex was up 41 points or 0.09 per cent to trade at 44,191 while the broader Nifty 50 index was trading up 25 points or 0.20 per cent at 12,994 on Tuesday.
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We expect the index to continue its last two session’s pullback. Thus, intraday dip towards 12938-12960 should be used to create long position for target of 13048. Going ahead, we expect outperformance of broader indices to extend on relative terms, while Nifty to consolidate in the broad range of 12800-13200 levels with positive bias, as prices have approached overbought reading (weekly stochastic at 94) after 14% rally in November 2020. Such a consolidation after sharp rally should not be construed negative, rather utilise declines as an incremental buying opportunity. Structurally, formation of a higher high-low on weekly and monthly charts supported by improving market breadth makes us confident to maintain support base at 12500: ICICI Direct Research
Indian markets are likely to see a flat to negative opening following weak global cues. Despite rising hopes around vaccines, worries about surging Coronavirus cases weighed on sentiments. However, global news flows and sector specific developments will be key monitorables: ICICI Direct Research
BSE Sensex jumped 259 points to 44,409 while the broader Nifty 50 index was trading up 140 points at 13,108 in the pre-opening session on Tuesday.
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Domestic bullion could start flat and trade range-bound this Tuesday morning. Technically, MCX Gold February has bounced back from a support of 47500 levels where above 48000 will resume some upside momentum. However it could trade in a range of 47700-48250 levels. MCX Silver March held support near 58880 levels where it bounced back and started to trade above 60000 levels indicating positive momentum up to 60400-61100 levels. Support is at 59900-59000 levels. MCXBULLDEX December contract could see a bounce back from 14500 level and can trade in sideways momentum in a range of 14550-14900 levels: Sriram Iyer, Senior Research Analyst at Reliance securities
Maruti Suzuki, Bajaj Auto: Auto companies shares would be in focus today as November sales data would start coming. Stocks such as Maruti Suzuki, Hero MotoCorp, Tata Motors, M&M will be keenly watched.
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Sept Qtr GDP at -7.5% is much better than our upwardly revised -8.4% YoY. The uptick is driven by positive growth in manufacturing which was anticipated by us, but the sharp improvement in ‘trade, hotels & transportation’ is a surprise. Bunching up of demand in September Qtr has helped lift YoY growth. In addition, manufacturing has benefitted more from pent up demand than high contact services. We believe personal safety and convenience is the root driver of discretionary demand in auto and durables in Q2. With the rapid pace of normalization of the economy is it clear that the size of unaffected parts of the economy is far greater than stressed sectors. Momentum in the recovery phase of the economy can be sustained by government spending, the vaccine and monetary policy tailwinds. We see upside risk to our -10.3% full year FY21 forecast. For e.g. if we extrapolate current GST collections and back calculate GDP from there we shouldn’t be surprised if full year FY21 GDP is closer to -6% YoY: Prithviraj Srinivas, Chief Economist, Axis Capital
The Q2 GDP numbers came in at a big positive surprise. Though Agriculture and Services numbers came in a little below expectations, Manufacturing growth has come in much stronger than expected. This will entail revising downward the full year GDP contraction forecasts. The key thing to watch out for is the time services will take to come back to normal and whether manufacturing growth reflects restocking/pentup demand or is reflective of normal demand conditions which have revived sustainably. Equity markets could open higher on Tuesday reflecting the positivity of the Q2 GDP numbers: Dhiraj Relli, MD & CEO, HDFC Securities
Sensex and Nifty begin trading today for the first time in this holiday-shortened week. S&P BSE Sensex is at 44,149 points while the 50-stock Nifty is at 12,968. Technical analysts expect the Nifty 50 to move range bound in the coming sessions. “The study of long term charts like weekly and monthly time-frames signal crucial overhead resistance for the market around 13100-13150 levels. The lower area of 12850-12750 is going to be an important base for the Nifty and a decisive move below this area could open a sharp downward correction in the market,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
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The peak margin mechanism is designed to prevent brokers from providing leverage over & above the SEBI stipulated limits from 1st December. SEBI also passed a new rule which disallows brokers to pass on margin penalties to clients. Essentially, with this move, the burden of margin shortfall will have to be borne by the intermediaries and not the clients. While the peak margin rules aim to eradicate excess leverage from the capital markets ecosystem, there are several matters which need further clarification. For example, if a trader has a hedged position (Long Nifty Futures & Long NIFTY Put option) the margin requirements are much lesser as compared to a naked position in futures as per the exchanges' requirements. In any circumstance, if the trader squares off the hedge, the margin requirements will go up as required for the naked position that is open. Such trades are initiated by traders & making brokers liable to pay for such penalties may trigger undesirable trading behavior: Tejas Khoday, Co-Founder & CEO, FYERS
In overnight trade on Wall Street, the Dow Jones Industrial Average dropped nearly one per cent to close at 29,638.64. The S&P 500 declined half a per cent to end its trading day at 3,621.63 while the Nasdaq Composite closed 0.06 per cent lower at 12,198.74.
Asian stock markets were trading higher in the early trade on Tuesday. Japan’s Nikkei 225 advanced 1.38 per cent while the Topix index added 0.82 per cent. South Korea’s Kospi gained 1.11 per cent.
Reserve Bank of India may not cut the repo rate in the upcoming Monetary Policy Committee meeting this week; however, it may raise the inflation and growth forecasts. High prices, labour shortages, elevated logistics costs, and high tax burdens remain factors driving costs higher in the economy, said a report by Barclays. While the phased unlocking of the economy continues to ease supply chain disruptions and facilitate broader labour mobility, fiscal constraints will likely keep the tax burden from easing materially, the report added.
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