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Nifty Settles Below 10,450; SBI, Axis Bank Among Top Losers

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European Shares Slide

Fab Four Stocks Of The Day

  • Bajaj Hindusthan Sugar: The sugar maker rose as much as 17 percent, the most since May 25, to Rs 18.80 after the company said that it has successfully implemented S4A scheme.
  • Ramco Systems: Shares of the Chennai-based IT company rose as much as 8.6 percent to Rs 570.95 after it secured order from Papillon group, world’s largest aerial sightseeing company, for the maintenance and engineering operations of its fleet, the company said in an exchange filing.
  • Ashok Leyland: The Chennai-based commercial vehicle maker rose nearly 4 percent to Rs 123.40 after its December sales rose 79 percent to 19,253 units compared with 10,731 units during the same period last year.
  • Varun Beverages: The beverage maker extended its winning streak to day six the stock has risen as much as 16 percent to record high of Rs 761.55.

Rupee Hits Two-And-A-Half Year High

Stocks Moving On Heavy Volumes

Advanced Enzyme Technologies

  • Stock rose as much as 15.5 percent to Rs 321.50.
  • Trading volume was 26.6 times its 20-day average.

Varun Beverages

  • Stock rose as much as 16.2 percent to Rs 761.55.
  • Trading volume was 17.9 times its 20-day average.

Rolta India

  • Stock rose as much as 18.3 percent to Rs 74.25.
  • Trading volume was 20.5 times its 20-day average.

Eros International Media

  • Stock rose as much as 8.6 percent to Rs 220.90.
  • Trading volume was 10 times its 20-day average.

Mideast Integrated Steel

  • Stock rose as much as 5 percent to Rs 78.90.
  • Trading volume was 9.4 times its 20-day average.

Government Cuts General PF Rate

Ramco Systems Gains On Order Win

Shares of the Chennai-based IT company rose as much as 8.6 percent to Rs 570.95 after it secured order from Papillon group, world’s largest aerial sightseeing company, for the maintenance and engineering operations of its fleet, the company said in an exchange filing.

NLC India Gains On Commissioning 130 MW Solar Power Project

Shares of the state-run mining and power generation company rose as much as 10.36 percent to Rs 119.75 after it commissioned 130 megawatt solar power project at Neyveli, the company said in a stock exchange filing.

Power Lunch

Bajaj Hindustan Sugar Gains On Implementing S4A

Shares of the sugar maker rose as much as 12.4 percent to Rs 18.10 after it successfully implemented Scheme for Sustainable Structuring of Stressed Assets (S4A).

The company allotted 34.83 crore fully paid optionally convertible debentures (OCDs) of face value of Rs 100 to joint lenders forum and sold and transferred 11.99 crore shares to joint lenders forum, Bajaj Hindustan said in an exchange filing.

#Ask BQ

TVS Motor Company Hits Record High Post December Sales

Shares of the Chennai-based two-wheeler maker rose as much as 3.72 percent to record high of Rs 794.90 after it reported sales for the month of December. Its sales jumped 39 percent to 2.56 lakh units in December from last year, led by buoyancy in demand for two-wheelers.

  • Scooter sales grew 50.5 percent to 83,640 units year-on-year.
  • Two-wheeler exports climbed 52.7 percent to 39,852 units.
  • Three-wheeler sales increased 72.1 percent to 9,279 units.

Prestige Estates Rises On Acquiring Stake In CapitaLand

Shares of the Bangalore-based real estate developer rose as much as 3.46 percent to Rs 328.10 after ithe company informed stock exchanged that it will buy CapitaLand's stake in various mall entities worth Rs 342 crore.

Hot Money

Tata Motors Gains On Robust December Sales

Shares of the automaker rose as much as 3.46 percent to Rs 328.10 after its total sales in December grew 52 percent (YoY), Tata Motors said in a press release.

  • Commercial vehicles sales grew 62 percent to 40,447 units versus 24,998 units
  • Medium and heavy commercial vehicle sales rose 83 percent to 15,828 units
  • Light commercial vehicle truck sales jumped 78 percent to 5,103 units
  • Domestic passenger vehicle sales rose 31 percent to 14,180 units

Thermax Gains On Order Win

Shares of the Pune-based heavy electrical equipment maker rose as much as 5.26 percent to Rs 1,270.55 after it won an order worth Rs 327 crore for a co-generation power plant, Thermax said in a stock exchange filing.

The project is for a BTG (boiler-turbine-generator) package on EPC basis for their captive co-generation power plant 2x65 MW capacity, the stock excghnage filing added.

Trend Spotting

Lovable Lingerie Rises As Board Sets Share Buyback Date

Shares of the Mumbai-based innerwear maker rose as much as 3.10 percent to Rs 245.35 after its management announced that the proposed share buyback will start from Jan. 8 and end on Jan. 19.

The company will buy back up to 20 lakh shares of face value of Rs 10 each at Rs 250 per share from all the interested shareholders who held shares on record date i.e. Dec. 8, 2017, Lovable Lingerie said in an exchange notification.

India Manufacturing PMI Rises To 5-Year High In December

The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, rose to a 5 year high of 54.7 in December from 52.6 in November.

A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.

"Strong business performance was underpinned by the fastest expansions in output and new orders since December 2012 and October 2016 respectively. Anecdotal evidence pointed to stronger market demand from home and international markets," said Aashna Dodhia, economist at IHS Markit, which compiles the survey.

"However, the sector continues to face some turbulence as delayed customer payments contributed to greater volumes of outstanding work... Challenges remain as the economy adjusts to recent shocks, but the overall upturn was robust compared to the trend observed for the survey history," Dodhia said.

(Nikkei)

PSU Banks Decline On Stock Exchanges

Shares of the government-owned lenders were trading lower as banks gear up to refer as many as 24 out of 28 identified large stressed accounts to insolvency proceedings. The Nifty PSU Bank Index was the top sectoral loser, down 1.7 percent.

The F&O Show

Reliance Group Shares Fall

Shares of the companies promoted by Anil Ambani were trading lower on the back of profit booking.

  • Reliance Communications falls 6.4 percent
  • Reliance Infrastructure declines 2.58 percent
  • Reliance Capital slips 1.45 percent
  • Reliance Naval and Engineering declines 2.23 percent
  • Reliance Power declines 5.28 percent
  • Reliance Home Finance slips 4.20 percent
  • Reliance Nippon Life AMC declines 2.25 percent

Opening Bell

Indian equity benchmarks moved higher led by gains in ONGC, Mahindra & Mahindra and Sun Pharma.

The S&P BSE Sensex rose 0.24 percent to 33,884 and the NSE Nifty 50 Index advanced 0.4 percent to 10,477.

All sector gauges compiled by BSE were trading higher led by the S&P BSE Realty Index's 0.9 percent gain.

IndianOpen

Money Market Heads Up!

The government will auction a new 10-year bond this week, which will help the yields to ease. Importantly, they have risen 27 basis points in December, a fifth consecutive month of advance, amid concerns of inflation and extra government borrowing. Analysts expect the new paper to carry a coupon of 7.20-7.25 percent.

For today, six states will sell bonds of Rs 7,900 crore and yield may stay in a range of 7.30-7.35 percent

In the currency markets, strong Asian cues may lead rupee to open higher but investors expect the central bank to be actively looking at levels to buy. The currency has been gaining for the last three sessions and traders expect a range of 63.50-63.90 a dollar in the day.

BQ Heads Up!

F&O Cues

  • Nifty January futures trading at 10,498.7, premium of 64 points versus 27 points.
  • January series: Nifty open interest down 3 percent; Bank Nifty open interest up 5 percent.
  • India VIX ended at 13.3, up 5.3 percent.
  • Max open interest for Jan. series at 11,000 Call (open interest at 41.2 lakh, up 11 percent).
  • Max open interest for Jan. series at 10,300 Put (open interest at 47.1 lakh, up 3 percent).

Trading Tweaks

  • Circuit filter revised to 10 percent: Unitech and Adhunik Metaliks.
  • Circuit filter revised to 5 percent: 3i Infotech, Jyoti Structures and Waterbase.

Bulk Deals

Nandan Denims

  • LTS Investment Fund bought 2.41 lakh shares (0.5 percent) at Rs 164.5 each

Subex

  • QVT Mauritius West Fund – FCCB A/C sold 34.76 lakh shares (0.6 percent) at Rs 10.42 each

Gujarat NRE Coke

  • Orange Mauritius Investment sold 5 lakh shares (1 percent) at Rs 1.8 each

Stocks To Watch

  • Salil Parekh to take over as Infosys CEO, MD today.
  • Prestige Estates to buy Capitaland’s stake in various entities for Rs 342 crore.
  • Bajaj Hindusthan successfully implements S4A scheme.
  • PVR opens three-screen multiplex in Ghaziabad taking its total tally to 603 screens at 132 properties in 51 cities.
  • Acrysil Ltd. acquires additional 3.75 percent stake in U.K. based Homestyle products Ltd for Rs 27.3 crore in a debt-free, cash-free deal.
  • GAIL commissions India’s second largest rooftop solar plant.
  • Idea Cellular to consider fund raising on Jan. 4
  • SRF commissions 40,000 tonnes per annum chloromethanes plant at Dahej.
  • NLC commissions 130 MW solar power project at Neyveli.
  • Future Consumer allots 6.68 crore equity shares to International Finance Corporation on conversion of CCDs.
  • Thermax wins Rs 327 crore order for a co-generation power plant.
  • JM Financial seeks shareholders’ approval to raise Rs 650 crore.
  • Kiri Industries says promoter Equinaire Chemtech acquires 24 lakh shares on conversion of warrants.
  • Coal India Dec. output stands at 5.46 crore tonne versus 5.88 crore tonne target.
  • Axis Bank to sell Rs 2,000 crore Bhushan Steel loan (Economic Times).
  • Adani Power, Neyveli Lignite and Sembcorp Vie to buy stake in GMR’s power projects (Economic Times).
  • ITC, JK Paper Among Potential Suitor For Sirpur Paper (Mint).

Brokerage Radar

Angel Broking on Capital First

  • Initiated ‘Buy’ rating with price target of Rs 850.
  • Change in ownership and management brought new life to company.
  • Strong capital adequacy and pick up in retail credit to ensure loan growth.
  • Favorable loan mix with expansion in NIM to drive earnings.
  • Expect asset under management and earnings ot grow at a compounded rate of 23 percent and 32 percent respectively over the financial years through March 2020.
  • Formalisation of economy to open new opportunities Housing finance is small but has huge potential.
  • Reducing dependence on bank borrowings to lower cost of funds.
  • Stock poised for re-rating with improving return ratios.

IDFC Securities on India Strategy

  • Asset heavy and export-oriented industries to benefit by recovery in global economy.
  • Consumption and discretionary consumption to find growth impetus from retail credit.
  • Recent reduction in tax rates for discretionary consumer sector to boost overall consumption.
  • Nifty’s earnings per share target for the next financial year is at Rs 577, i.e., 20.6 percent year-on-year (YoY) growth
  • Mild downgrade risk to continue in near term, but earnings to bounce from the next financial year.
  • Overweight: Engineering and Capital goods, Construction, Metals & Mining, Oil & Gas, Consumer Goods, Automobiles, Media and Pharmaceuticals.
  • Neutral: Banks, Cement, Chemicals, Power and IT.
  • Underweight: Real Estate and Telecom.
  • Large caps Top Picks: SBI, ONGC, Motherson Sumi, HPCL, Hindalco Industries, Aurobindo Pharma, Bharat Electronics and Ashok Leyland.
  • Small and Mid caps Top Picks: Kajaria Ceramics, SpiceJet , Ashoka Buildcon and Greenply Industries.
  • Top Sell: Bajaj Auto.

CLSA on Mahindra & Mahindra

  • Maintained ‘Buy’; raised price target to Rs 910 from Rs 885.
  • Good outlook and priced cheap.
  • Positives: healthy demand in tractors and a cyclical recovery in light commercial vehicles.
  • Expect volume and warnings per share to grow at a compounded rate of 10 percent and 14 percent respectively over the financial years through March 2020.
  • M&M is top Buy in Indian Autos for 2018.
  • SUVs weak volumes bottoming out; Upcoming MPV launches key trigger.
  • Positive on rural India given rise in government spending and general elections in 2019.

CLSA on India Financial Sector

  • Expects rates and bank credit growth to rise; 25-50 basis points hike in rates.
  • Expect financialisation of savings and capital raising to continue.
  • Expects pick-up in affordable housing; Porject compounded growth rate of 16-17 percent by March 2022.
  • 2018 to be litmus test for NCLT; $70 billion (50% of gross NPL) worth NPL cases to be resolved.
  • Transition to Ind-AS to cost $25-30 billion mostly to PSU banks.
  • Extent of haircut for steel sector and timely recap will be key.
  • Wild cards: Election politics, regulations and wage negotiations.
  • Non-lending financials to benefit from financialisation of savings and low penetration levels.
  • Top picks: ICICI Bank, IndusInd Bank, HDFC and ICICI Pru Life.

Nomura on Coal India

  • Maintained ‘Neutral’ with price target of Rs 283.
  • Despite moderation in offtake growth in past two months, but 9MFY18 is still fairly robust.
  • Coal stock situation at power plants improved in December but remains at sub-par levels.
  • Growth outlook remains healthy for the rest of the current financial year.
  • CIL’s output target of 600 MT for the current financial year appears out of reach.

Talking Points

Good Morning!

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.41 percent to 10,518.

Chinese equities started the year with gains, led by the H-share index in Hong Kong, as property stocks soared and a gauge of manufacturing strength beat expectations.

The China Caixin manufacturing PMI showed a December reading of 51.5, beating the expected 50.7 and up from 50.8 the previous month. That positive figure followed Monday’s release of the official China manufacturing PMI, which at 51.6 still represented expansion in December.

What to watch for:

  • Nikkei India manufacturing PMI for December to be released today.
  • PMIs are also due for India, Malaysia, Indonesia and the Philippines.
  • Indonesia will report December CPI.
  • U.K. Markit manufacturing and U.S. Markit manufacturing PMIs are due later Tuesday.

Commodity Cues

  • West Texas Intermediate crude fell 0.3 percent to $60.25 a barrel.
  • Gold climbed 0.3 percent to $1,306.07 an ounce, hitting the highest since September.

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