Vinod Nair, Head of Research at Geojit financial services:
The market started this week continuing its winning streak, much of the momentum was from pharma and small caps stocks, the broader market is outperforming the main indices. European stocks have turned focus to the on-going post Brexit trade deal between the UK and EU, trading a bit cautiously.
We expect the domestic market to remain strong backed by vaccine progress, economic recovery and strong FII inflows. However, it is advisable for investors to consider partial profit booking in pockets trading very expensive like highly valued large caps and trade vigilantly on small & micro caps though the momentum is expected to remain positive in the short to medium-term.
S Ranganathan, Head of Research at LKP Securities
Bears today got a taste of what a broad based market rally means as Bulls took complete control with market breadth improving dramatically as we witnessed more advances than declines. The rally was widespread across market capitalisation and across sectors.
Ajit Mishra, VP - Research, Religare Broking:
Markets started the week on a positive note amid supportive global cues. Further, news of progress in the Covid vaccine and healthy inflows by FII helped markets to continue its upward trend. Consequently, the Nifty ended near a record high at 13,356 up by 0.7%. On the sector front, FMCG, Healthcare and PSU were the top gainers. Further, midcap and smallcap outperformed and ended with decent gains in the range of 0.95-1.3%
We are seeing buying interest emerging on every dip, thanks to rotational participants across the sectors. Technically, Nifty could face a hurdle around 13,450. The stock-specific trading approach is yielding decent returns so far and we suggest continuing with the same. Also, keep a close watch on global markets and upcoming domestic macro data for cues.
Market Close:
Indian indices continued their upward momentum and ended at fresh record closing highs on December 7 supported by the financials, pharma and FMCG stocks.
At close, BSE Sensex was up 347.42 points or 0.77% at 45426.97, and the Nifty was up 97.30 points or 0.73% at 13355.80. About 1972 shares have advanced, 936 shares declined, and 190 shares are unchanged.
UPL, Adani Ports, HUL, Bharti Airtel and Coal India were among major gainers on the Nifty, while losers included Kotak Mahindra Bank, JSW Steel, Tata Steel, Nestle and SBI Life.
On the sectoral front, PSU Bank index rose 2 percent, while pharma, infra and FMCG indices added 1 percent each. BSE Midcap and Smallcap indices gained 1 percent each.
Ashis Biswas, Head of Technical Research, CapitalVia Global Research:
It has witnessed some strong trends in the market and an attempt to overcome the resistance level around the Nifty 50 Index level of 13340. While sustaining above 13200 is the key factor from a short-term perspective, our research suggests, maintaining above this level market to gain momentum and to open the gate for a movement till 13390. The momentum indicators like RSI, MACD to stay positive and market breadth to improve, further strengthening the view of a short-term bullish outlook.
Emkay on ICICI Bank:
Research house believe that ICICI’s likely strong delivery on growth, asset quality and return ratios despite the Covid-induced disruption, coupled with its evolution as a strong retail-cum-digital bank, will call for a re-rating. Retain Buy/OW in EAP with a revised target price of Rs 600.
BSE Oil & Gas sector gained 1 percent led by the Castrol, Gail and ONGC:
Abhishek Bansal, Founder Chairman, Abans Group:
WTI crude oil prices rallied to nine month high due to weakness in dollar index and OPEC+ production plan. Although rising number of coronavirus cases across the globe is likely to keep oil a lid on the price rally.
OPEC+ ministers have agreed to add 500,000 bpd of crude production starting in January. Also, OPEC+ ministers agreed to hold monthly meetings to decide whether to approve similar-sized crude production increases in subsequent months.
Meanwhile, China Nov crude imports rose +4.9% m/m to 10.6 million bpd, the first increase in four months. It is indicating an improvement in economic condition for China and is supportive for crude oil prices.
Rising optimism over stimulus is also providing support to crude oil prices. House Speaker Pelosi have said "there is momentum building" toward a compromise on the $908 billion fiscal stimulus plan.
WTI Crude oil prices for January expiry contract is likely to find support near 20 days EMA at $43.94 per barrel and 50 days EMA at $42.16 per barrel meanwhile critical resistance is seen around $47.35 per barrel and $48.40 per barrel.
Jefferies on Adani Ports:
Jefferies has maintained buy and raised target price to Rs 525 from Rs 475 per share.Company showcased management focus to improve Krishnapatnam Port’s margins. Jefferies revised its FY21e-23e estimates by 3-7% to factor the November 2020 volume data.
The continuing operational improvement and continuing reduction in promoter pledges should drive further re-rating from current levels, reported CNBC-TV18.
Sriram Iyer, Senior Research Analyst at Reliance Securities:
Domestic gold ended marginally lower, while silver rose on December 4, tracking firm overseas prices.The dollar recovered from the lows of the session after investors shrugged off a weaker-than-expected US employment report.
Domestic bullion is expected to trade flat on the morning of December 7, tracking a subdued start in the international prices.Technically, MCX February gold may see some hurdle near 49,500, which is near its 21-daily moving average. However, above it, gold can rally up to Rs 49,750-49900 levels.
MCX March silver is trading above Rs 64,000 levels; above Rs 63,500 indicates a positive momentum up to 65250-66300 levels. Support is at Rs 63,900-63,000.
European Markets trade lower
L&T bags order
The construction and mining equipment business of Larsen & Toubro has secured multiple orders for supply of 90 units of Komatsu Mining Equipment from Coal India subsidiaries, leading Infra companies engaged with the Coal sector and customers from the Cement and Iron Ore sectors.
Rupee Updates
Indian rupee erased intraday gains and trading lower at 73.89 per dollar, amid buying seen in the domestic equity market.It opened flat at 73.79 per dollar against Friday's close of 73.78.
Tapan Patel- Senior Analyst (Commodities), HDFC Securities:
Gold prices traded lower with COMEX spot gold prices traded near $1836 on December 7. Gold December future contract at MCX were trading flat to Rs 49,165 per 10 grams on rupee fluctuation. Gold prices traded under pressure on dollar recovery on vaccine hopes while expectations of COVID-19 aid package and more stimulus has kept down side limited in gold prices.
We expect gold prices to trade sideways to down with COMEX gold resistance at $1850 and support at $1820. MCX Gold December support lies at Rs 48,800 with resistance at Rs 49,500.
DCB Bank cuts lending rate
NSE Introduces Trading On Weekly F&O Contracts For EUR-INR, GBP-INR, JPY-INR Currency Pairs
National Stock Exchange of India (NSE) on December 7 said it launched weekly futures and options contracts on the EUR-INR, GBP-INR and JPY-INR currency pairs in the currency derivatives segment from December 7, 2020. NSE currently offers cash-settled futures and options on 4 FYCINR pairs - USD-INR, EUR-INR, GBP-INR and JPY-INR and 3 cross currency pairs – EUR-USD, GBP-USD and USD-JPY. Read more
Market update
: Sensex is up 208.77 points or 0.46 percent at 45288.32, and the Nifty gained 58.20 points or 0.44 percent at 13316.70. IndusInd Bank, Hindustan Unilever and SBI are the top gainers while SBI, ICICI Bank and Tata Chemicals are the most active stocks.
Most active stocks on NSE in terms of volumes
Buzzing Stock
Goodyear India share price surged 14 percent after the company declared interim dividend of Rs 80 per equity share of face value of Rs 10 each, for the financial year 2020-21, the company said in an exchange filing.
Abhishek Bansal, Founder Chairman, Abans Group
: Weakness in dollar index pushed gold prices higher. The lawmakers in US may pass additional debt-fueled pandemic stimulus before they break for the Christmas holiday after Speaker Pelosi late Tuesday sent a new proposal to Treasury Secretary Mnuchin. According to the CFTC Commitments of Traders report for the week ended December 1, net longs for gold futures increased by +16412 contracts to 260314 for the week. Speculative long position gained +4020 contracts, while shorts dropped -12392 contracts. Gold prices are likely to find support at $1816 and $1790 per ounce levels while key resistance is likely to seen around at 50 days EMA at $1875 per ounce.
Gold Updates
Gold prices ticked higher on Monday, as grim U.S. jobs data bolstered hopes for more fiscal stimulus, although optimism around coronavirus vaccine rollouts kept gains in check.
Asian markets update
Asian shares retreated from a record peak on Monday after a Reuters report the United States was preparing to impose sanctions on some Chinese officials highlighted geopolitical tensions, while oil prices fell on surging virus cases.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities:
Comex gold was trading unchanged near $1,842 after a flat close in the previous session. Gold turned sharply higher from lower levels of $1,764 as support from disappointing US non-farm payroll data, rising virus cases and hopes of additional fiscal stimulus triggered bargain buying.
However, the progress on the vaccine front and continuing ETF outflows remain a concern. Gold has bounced back from recent lows but has stalled near 1,850, a strong support level turned resistance. A sharp rise is unlikely unless ETF buying picks up or there are concrete stimulus measures.
Nifty PSU Bank index added 1 percent led by the Maharashtra Bank, Central Bank of India, Canara Bank:
Buzzing
ADF Foods share price jumped over 4 percent on December 7 after Infinity Holdings acquired another 4 lakh shares in the company at Rs 501.2 per share on the NSE. However, Dangi Alpana Sanjay sold 2 lakh shares at same price.
Also, private equity firm Convergent Finance has bought a 10 percent stake in ethnic Indian packaged food maker ADF Foods Ltd for Rs 100 crore, picking up shares from existing shareholders of the company.
TCS in partnership with Extreme Networks
Tata Consultancy Services has helped Extreme Networks to successfully adopt a flexible consumption-as-a-service subscription model,enabling the roll-out of its ExtremeCloud IQ cloud management platform, strengthening its customer relationships and helping the cloud-driven networking leader gain market share.
HSBC on Glenmark Pharma:
HSBC maintained hold on the stock and raised target price to Rs 570 from Rs 520. The successful capital raise by Ichnos Sciences would ease R&D & debt burden, however, timeline remains uncertain, said HSBC.
The recovery of US sales & improved execution to be key for operational turnaround and notable debt reduction, reported CNBC-TV18.
Zydus announces Phase I trials of ZYIL1
Zydus has received permission to initiate the Phase 1 clinical trial of ZYIL1, a novel oral small molecule NLRP3 inhibitor candidate.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
RBI's assurance on ensuring sufficient liquidity in the system and projection of positive GDP growth rates in H2FY21 pushed markets to record closings on benchmark indices on Friday.
FII inflows continue to be strong in the initial days of December too. This, along with better than expected Q3 results provide strong support to markets.But since market levels and valuations are high, profit-bookings can happen any time. Investors may increase cash levels in portfolios.
Bhansali - Head Treasury, Finrex Treasury Advisors:
The dollar rupee is in a range with RBI standing on one side buying dollars and all sellers on the other. They have intervened in CF also on Friday to ensure rupee liquidity is not passed on.
The RBI has many tools and will use it appropriately as and when required. Near term imports may be covered near 73.65 while exports for say December end or maximum january should be covered near 73.85 to 73.95.
Nifty Pharma Index added 1 percent led by the Sun Pharma, Lupin, Dr Reddy's Lab:
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking:
Last week, WTI Crude gained over 1.6 percent as depleting U.S. Crude inventory levels coupled with rising bets on a potential vaccine boosted Oil prices. Oil prices jumped during the week as OPEC and Russia agreed to a modest output increase of 500,000 barrels per day from January onwards.
The increase means the Organization of the Petroleum Exporting Countries (OPEC) and Russia, a group known as OPEC+, would move to cutting production by 7.2 million bpd, or seven percent of global demand from January, compared with current cuts of 7.7 million bpd. US crude oil inventories came in at -0.7 M for the week against market expectations of -1.7 M and previous reading of -0.8 M.
As for today traders can go for BUY in Crude Oil at Rs 3370 levels with the stop loss of Rs 3320 levels for the target of 3470 levels. WTI Crude Oil May test $48 per barrel levels and Brent Crude Oil may test $52 per barrel very soon.
Anil Kumar Bhansali, Head Treasury, Finrex Treasury Advisors:
The dollar rupee is in a range with RBI standing on one side buying dollars and all sellers on the other. They have intervened in CF also on Friday to ensure rupee liquidity is not passed on. The RBI has many tools and will use it appropriately as and when required. Near term imports may be covered near 73.65 while exports for say Dec end or maximum january should be covered near 73.85 to 73.95.
Rupee Updates
Indian rupee is trading higher at 73.71 per dollar, amid buying seen in the domestic equity market.It opened flat at 73.79 per dollar against Friday's close of 73.78
Buzzing Stock
Oil and Natural Gas Corporation share price gained over 3 percent after the company's subsidiary ONGC Videsh made 'significant' oil strike in Colombia. This is the fourth commercial find in the block by OVL. ONGC Videsh Ltd, the overseas investment arm of state-owned Oil and Natural Gas Corporation (ONGC), has made a “significant” oil discovery in an onshore block in Colombia.
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
: We have been hovering in the overbought territory since the last 2-3 weeks; but sometimes the market does not respect the theory and hence, it can remain overbought for a long time as well. But in our sense, the optimism has now turned into a bit of euphoria and when such a condition happens, it’s advisable to be a proactive bit and take some money off of the table, especially for a momentum trader. Undoubtedly, the broader degree trend remains strongly bullish and in case of any meaningful decline, one should stick to the ‘buy on decline’ strategy.
The level of 13,300-13,500 would be seen as immediate resistance zone; whereas on the lower side, 13,150-13,100 are the levels to watch out for. If we meticulously observe the intraday charts, we can see a formation of ‘Rising Wedge’ pattern on hourly chart and hence, a move below 13,100 would lead to further profit booking towards 12,980-12,900. Hence, traders are advised to take a note of all these key levels and act accordingly.
HDFC Bank's Multiple Digital Outages Credit Negative: Moody’S
Multiple digital outages reported by private sector lender, HDFC Bank, are credit negative, global rating agency Moody’s said on December 7. Last week, the RBI asked the lender to temporarily halt all new digital launches following multiple instances of digital outages. The bank has assured that it is working with the regulator on the issue and the customers will not face any problems. Read More
ICICIdirect:
USD-INR December futures appreciated post monetary policy as rates remained unchanged and declined below 74 levels once again. We believe higher levels of 74.20 should remain immediate resistance and can be utilised for shorting the pair.
The dollar-rupee December contract on the NSE was at 73.90 in the last session. The open interest remained almost unchanged for the December series contract.
Ajit Mishra, VP - Research, Religare Broking:
With all the major events behind us, we feel global markets would dictate the market trend ahead. Besides, the updates related to COVID vaccines will also be in focus. On the domestic front, participants will be eyeing macroeconomic data viz. IIP and CPI inflation numbers.
Markets have been gradually inching higher, but at a slower pace which indicates a positive yet cautious approach among the participants. We feel the recent buoyancy in the rate-sensitive pack may help the index to inch further higher next week but the upside seems capped.
Technically, Nifty has been trading in a rising broadening formation and the upper band of the pattern currently lies around 13,450. On the flip side, 13,100 and 12,900 would act as support in case of any profit-taking. We reiterate our advice focusing more on the selection of sectors and stocks as there are plenty of trading opportunities across the board. Since the overall trend is up, we recommended avoiding contrarian trades and utilising the corrective phase to accumulate quality stocks.
Market Updates
Benchmark indices erased some of the early gains but still trading higher with Nifty around 13300.
At 10:16 IST, the Sensex was up 107.00 points or 0.24% at 45186.55, and the Nifty was up 35.50 points or 0.27% at 13294. About 1741 shares have advanced, 573 shares declined, and 132 shares are unchanged.
Rupee Opens
Indian rupee opened flat at 73.79 per dollar on Monday against Friday's close of 73.78, amid buying seen in the domestic equity market.
On December 4, rupee ended 15 paise higher at 73.78 per dollar versus Thursday's close of 73.93.
Gold Updates
Gold prices steadied on Monday as grim U.S. jobs data bolstered hopes for more fiscal stimulus, although optimism around coronavirus vaccine rollouts kept gains in check.
Nifty FMCG Index added 1 percent supported by the Varun Beverages, ITC, Emami, United Breweries:
Global debt to hit $200 trillion: S&P Global
Global debt is set to reach $200 trillion, or 265 percent of the world's annual economic output, by the end of the year, S&P Global has forecast - although it doesn't expect a crisis any time soon. The credit ratings giant said it amounted to a 14-point rise as a percentage of world GDP, having been amplified by both the economic plunge caused by COVID and the extra borrowing that governments, firms and households have had to resort to.
"Global debt-to-GDP has been trending up for many years; the pandemic simply exacerbated the rise," S&P's report said.
Prabhudas Lilladher on ICICI Bank:
With strong capital base and relatively large COVID related issues moving behind, bank will continue to invest heavily in technology. Broking house believe these initiatives will gradually help towards sustained doubled digit return ratios of 14-15% by FY23. Maintain buy with largely unchanged earnings and revised target price to Rs 614 (from Rs 520) as increase multiple to 2.0x from 1.8x and roll over to Mar-23 ABV.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities:
The short-term trend of Nifty continues to be positive. The pickup of upside momentum in the latter part and the negation of bearish pattern of daily (bearish engulfing) and weekly (doji) timeframe chart is expected to result in further strengthening of up move in the near term. The upside levels to watch this week is 13,500 and the immediate support is placed at 13,150.
