Ajit Mishra, VP - Research, Religare Broking:
Markets started the week on a robust note and made a new record high, largely led by firm global cues and encouraging domestic macro-economic data. The benchmark opened gap up and hovered in a range for most of the session however renewed buying in the last hour helped the index to close around the day’s high. Consequently, the Nifty index closed at 15,315 levels, up by 1%. A mixed trend continued on the sectoral front wherein banks and realty were the top gainers that supported the rally while FMCG, IT and consumer durables ended in the red.
Markets have resumed the trend after a week-long consolidation phase and we are now eyeing the 15,500 in Nifty. With no major events, participants should keep a close watch on global markets for cues. Also, maintain focus on the selection of stocks and avoid a contrarian approach.
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities:
The market has made a strong start to the week on the back of strong and positive domestic flows. The increase in the number of IIP and the easing of CPI inflation led to a recovery in financials. Bank Nifty rose by 1300 points, Finance Nifty rose by 900 points, Nifty 50 rose to 15340 levels and Sensex gained by more than 500 points throughout the day.
It has proven to be the smartest rally after 4 days of aggregation. Based on the daily chart, Nifty / Sensex are moving towards 15500/52500 levels with minor resistance at 15360/52250 level and on the downside, 15270/51850 and 15100/51200 would be the big supports. Our strategy is to reduce weak long positions and we need to make partial profits in positions where there are abnormal gains. Along with financial, the focus should also be on auto stocks.
Dr. Joseph Thomas, Head of Research, Emkay Wealth Management:
The markets closed the day on a high note with the Sensex crossing the 52000 mark, with both Sensex and Nifty closing with a gain of more than 1%. What moved the markets was the Bank Nifty, which climbed by 3.65% to 37,425, a significant surge from the 31,000-32,000 levels where it was basing itself for a couple of weeks.
Midcaps, small caps, realty and healthcare too participated in the rise today. Markets elsewhere, in the East as well as early Europe, has been well supported by the fruition of large scale vaccination as also expectations of larger economic stimulus in the US.
Rohit Singre, Senior Technical Analyst at LKP Securities:
Index started a day with good gap and managed to hold the gains throughout the session and closed the day at 15,314 with gains of one percent. Both the indices Nifty & Nifty Bank has witnessed a fresh breakout in today’s session hints overall structure is still buying on the dip and we may see more upside in the near term if managed to hold above 14,250 in Nifty & 37,000 in the Nifty Bank which is immediate & strong support on the downside.
Vinod Nair, Head of Research at Geojit Financial Services:
Optimistic global sentiment & improving corporate earnings are leading an uptrend in the market dictated by banking and realty stocks. Mild consolidation is noticed in Pharma & IT, but Mid-caps continue to beat the broad market. WPI inflation soared to 2.03% in January compared to 1.22% in December which is positive for the manufacturing sector showing upside in demand.
Food inflation dipped cooling CPI to 4.06% in January from 4.59% in December 2020, moderation in inflation is in-line with the RBI views, positive for the domestic economy.
S Ranganathan, Head of Research at LKP Securities:
Bulls powered Indices to new highs as FPI flows till date in February far exceeded January flows. Buoyed by Q3 earnings and CPI inflation, the day witnessed a ferocious rally in financials backed by positive global cues and return of the elusive capex cycle.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The Nifty continued its strong form and closed almost at the high of the day. We should be heading to 15,500 soon where we could face the next level of resistance. The stop level has been raised to 15,100 and hence traders can build fresh positions for a new target of 15,500.
Nirav Karkera, Head of Research, Fisdom:
Benchmark indices have surged on the back of broad buying across the board. With strong global health recovery, pro-growth public policies, systemic liquidity abundance, corporate earnings recovery and improving economic metrics, we seem to be entering a whole new cycle of wealth creation.
Considering the strong positive undercurrent, we expect portfolios with an orientation towards financial services, discretionary consumption and industrials to benefit significantly in the medium term. At this juncture, risk events can be expected to emanate from outside of the country as most Indian macro-economic metrics are supporting a strong growth resurgence.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research:
Market witnessed a positive trend today after a few days of the lackluster movement. The expected levels of the market are likely to be in the range of 15,250 and 15,470, and it’s going to be crucial for the short-term market scenario to sustain above the 15,250 Nifty50 index level. The momentum indicators like RSI, MACD to support the upside move and indicating potential upside from the current market level.
Market Close
: Benchmark indices rallied for the third consecutive day hitting their fresh record highs intraday on the back of buying seen in the realty and financial names.
At close, the Sensex was up 609.83 points or 1.18% at 52,154.13, and the Nifty was up 151.40 points or 1% at 15,314.70. About 1337 shares have advanced, 1648 shares declined, and 149 shares are unchanged.
Axis Bank, ICICI Bank, SBI, Bajaj Finance and IndusInd Bank were among major gainers on the Nifty, while losers were HDFC Life, SBI Life Insurance, Dr Reddy’s Laboratories, Hero MotoCorp and TCS.
Nifty Bank index rose 3.3 percent, while PSU Bank index added over 2.3 percent. BSE Realty index jumped 1.4 percent, while Midcap and Smallcap indices rose 0.3-1.4 percent.
Jyoti Roy, DVP – Equity Strategist, Angel Broking:
The Sensex has today hit new all time high levels of 52,000 driven by continued strong flows due to positive global cues. After record monthly inflows of over Rs 60,000 in Nov and Dec 2020 flows slowed down somewhat in January to ~ Rs 19,500 crore. While we did see some profit booking in the second half of January the Union Budget 2020-21 turned the tide around for the market. So far we have already witnessed FII flows of over Rs 20,000 crore in February which is helping drive the markets.
We expect the flows to remain strong for now which should help propel the markets to new highs. However, we expect the pace of the rally to moderate from here on and some profit booking cannot be ruled out at higher levels.
Rahul Gupta, Head Of Research-Currency, Emkay Global Financial Services:
Across the globe, equities are charged on ‘risk-on’ tone as countries and regions are rolling out vaccines and easing lockdown restrictions. This optimism has pushed Indian rupee to surge to 72.57, highest level since Mar 3, 2020. The trading range has shifted to 72.00-73 and RBI seems to be comfortable with rupee appreciating below 73 level.
This week is a holiday thinned market, so fx trading may be uninspiring but RBI intervention will be eyed. The focus will remain on global flash PMIs and Fed minutes and until then 72.50 will act as a strong support in USDINR spot, a break of which can push the spot price towards 72 zone, while 73 will act as an immediate resistance.
Nearly 300 stocks, including Axis Bank, Bajaj Finserv, Bajaj Finance, HDFC and ICICI Bank, hit their fresh 52-week high on BSE today: Click for more
Nish Bhatt, Founder & CEO, Millwood Kane International:
The Indian rupee has appreciated, it is trading near the psychological level of 72.50/$, almost a 1-year high level for the rupee. The appreciation in the rupee is primarily due to RBI intervention, positive comments by rating agency Moody's on India's economic outlook, record fund flows in Indian equities by FIIs.
The rally in crude prices, a hope of an extra stimulus package from the US government, and the policy stance of the US Fed to keep rates low for a longer duration of time has kept the Dollar lower. Moving forward RBI's action via OMO to support the rupee, global economic recovery, and vaccination process will guide the INR/USD movement.
JLR is on path towards double-digit EBIT margin: Tata Motors
JLR aims to become net zero carbon business by 2039. The future Jaguar models will be built exclusively on a pure electric architecture, while JLR targets positive cash net-of-debt by 2025, said Tata Motors.
JLR is on path towards double-digit EBIT margin with positive cash flow, while it will curate closer collaboration and knowledge-sharing with Tata group companies. All JLR nameplates to be available in pure electric form by end of the decade, it added.
At 15:06 hrs Tata Motors was quoting at Rs 334.85, up Rs 9.45, or 2.90 percent.
TVS Motor in distribution partnership with Public Motors:
TVS Motor Company announced today their new distribution partnership with Public Motors; part of the reputed Ghaf Investments L.L.C, in the United Arab Emirates. As a part of this association, a 2000 sq ft marquee showroom was inaugurated, along Sheikh Zayed Road in Dubai. Apart from hosting a wide range of two-wheelers, the showroom will provide spare parts and feature a service facility.
HEM Securities on RailTel Corporation of India IPO:
Company is bringing the issue at p/e multiple of approx 21x at higher end of price band of Rs 93-94/share on FY20 PAT basis. Although company’s valuation looks fully priced but looking after the industry dynamics of Telecom & Telecom data services where broadband market is gaining pace with enterprise data services to register volume driven growth along with huge potential offer by Indian market as India has lowest fixed broadband subscription per 100 people will give boost to company’s performance going forward.
Also the edge which company holds over its peers in terms of financial performance makes this issue attractive to deploy the funds in. Hence we recommend investor to subscribe the issue for short & long term.
European markets are trading in the green with FTSE and CAC up half a percent each
Prabhudas Lilladher on ONGC:
We increase our earnings estimates for FY21E to factor rise in global crude oil prices given production cuts by OPEC countries and similarly for FY22/23 to factor in lower cost. Global crude oil and gas prices will likely remain weak given uncertain demand environment plus new supplies may come in March 2021 when production cuts get reviewed; accordingly, we factor in USD 45/55/bbl for FY21/22E. ONGC stock has underperformed broader index due to concerns on divestment of Government of India share and inefficient capital allocation policies. We reiterate buy with a price target of Rs125 (Rs114 based on 4.5x FY22E EV/E).
RBI announces Rs 10,000 crore special open market operations on February 25
The Reserve Bank of India (RBI) February 15 said it will conduct simultaneous sale and purchase of government bonds under a special Open Market Operations (OMO) on February 25. The RBI will buy and sell bonds worth Rs 10,000 crore each on that day.
“On a review of current liquidity and financial conditions, the Reserve Bank has decided to conduct simultaneous purchase and sale of Government securities under OMO for an aggregate amount of Rs 10,000 crore each on February 25, 2021,” said the RBI.
Most active stocks on NSE in terms of volumes
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
: Sensex and Nifty started the week on a front foot and set new highs above the level of 15260 and 51835 respectively. However, it should not be forgotten that the recent rally has been without any meaningful correction. In the past, whenever the market increased by 1700 to 2000 points, it had retreated by 500 to 1000 points. Given the strength of the global markets and the CPI inflation figures, Nifty and Sensex can rise to the level of 15500 and 52500 levels respectively. However, that could be the time to shift the portfolio from weak stocks to strong large-cap companies. We also advise our clients to keep lowering the cost value of the portfolio by making a profit on investments that are yielding windfall gains. On the downside, support would be at the 15100 and 51200 and 14800 and 50300 levels respectively.
ICICI Securities on Hindalco Industries:
For the quarter, both Indian operations as well as Novelis reported a healthy performance. Furthermore, Hindalco also reduced its consolidated net debt levels. During Q3FY21, Hindalco repaid Rs 4,199 crore. Subsequently, consolidated net debt as on December 31, 2020 was at Rs 53802 crore compared to Rs 58001 crore as on September 30, 2020. Going forward, in the near term, Hindalco plans to unveil its capital allocation policy, which would be a key monitorable. We introduce FY23E estimates and roll over our valuations to FY23E. We value the stock on a SoTP basis and arrive at a target price of Rs 309 (earlier Rs 240). On the back of the recent run-up witnessed in the stock, we downgrade the stock from buy to hold.
Naveen Kulkarni, Chief Investment Officer, Axis Securities:
The market rally has been very strong and India has multiple triggers which includes - Contained covid infections, Blockbuster budget and Economic revival. With this scenario as a backdrop, a higher beta portfolio will do well. BFSI should be the top sector in the portfolio, followed by discretionary, cyclicals and some allocation to industries. Also, digital is an evergreen theme and a significant allocation to the IT sector should be maintained. Overall, the market will continue to do well over the medium term. Risks are now more global than local.
Joseph Thomas, Head of Research - Emkay Wealth Management:
The IIP gives some broad indications of a rebound in economic activity with the reading for Dec 20 at 1% as against - 2.10% for Nov 20. What is significant is the pickup in both consumer durables and non- durables as also infra goods.
While the general direction be of improvement in the reading, it may be too early to make any inference based on IIP numbers of a month of two.
Reserve Bank of India (RBI) to simultaneously purchase and sell government securities under Open market operations (OMO) for Rs 10,000 crore on February 25.
Choice Broking on Nureca IPO:
Annualizing the H1 FY21 earnings, the demanded valuation comes out to at 5.5x, which is attractive for a company in growth phase along with asset light business model. However, there are few risks associated with trading company like Nureca. Risk like business continuity, product exclusivity, lack of supplier & customer engagement, operating in highly fragmented market etc. Thus considering the above observation, we assign an Avoid rating for the issue.
Joseph Thomas, Head of Research - Emkay Wealth Management:
The CPI has come down from 4.59% in Dec 20 to 4.06% in Jan 21, indicating a consistent fall in the retail inflation in the last couple of months, owing to moderation in food inflation. Except for pulses food inflation has cooled down from 3.41% in Dec to 1.89% in Jan.
Finally, the inflation rate has come well below the RBI's threshold rate, and this actually gives some relief to the markets on the immediate trajectory of interest rates. However, core inflation is perched at 5.70, something that may take more time to move down.
Likely pressures in future from escalating oil prices cannot be ruled out. But the more pertinent factor is that the immediate threat of the price level pressures may not be there before the policy makers.
Sriram Iyer, Senior Research Analyst at Reliance Securities
International gold dipped on February 12 as the dollar firmed. However, silver pushed higher, supported by industrial demand. Domestic gold and silver prices ended mixed, with the yellow metal in the red. Silver tracked overseas prices to close higher.
Domestic gold and silver could trade flat on February 15, tracking overseas markets.
Technically, MCX April gold is below 47,500 and will continue its bearish momentum up to 47,100-46,900. Resistance is at 47,500-47,650.
March silver bounced back from 68,500 and could take prices to 69,700-70,200 levels. Support is at 68,700-68,000 levels.
Nureca IPO fully subscribed:
The Rs 100-crore initial public offering of Nureca, the solution provider of home healthcare products in India, has been subscribed 1.79 times so far on February 15, the first day of bidding.
The full subscription of public issue is largely backed by retail investors whose reserved portion has been subscribed more than 10 times, and that of employees' is 26 percent subscribed. Click to read more
January WPI Inflation At 2.03%
January WPI Inflation was at 2.03 percent against 1.22 percent (MoM). The primary articles inflation at -2.24% versus -1.61% and food inflation was at -0.26% versus 0.92%, MoM.
Angel Broking on RailTel Corporation of India IPO:
The company is going to play a key role in digital transformation of Indian Railways. Company’s margins & return ratios are better compared to other telecom players in India. Company also has a strong financial position (debt free) and has been consistently paying dividends since 2008. There are no listed peers for the company.
Company has priced its issue at 21.4x PE on a FY20 trailing basis, which is quite reasonable by looking at the strong future growth rates of the company. We expect a good listing for the company. We are positive on the long term prospects of the industry as well the company, we recommend "SUBSCRIBE" to the RailTel IPO for long term as well as for listing gains.
Rupee Updates
Indian rupee is trading 16 paise higher at 72.59 per dollar, amid buying seen in the domestic equity market.It opened 14 paise higher at 72.61 per dollar against previous close of 72.75.
Ravindra Rao, VP- Head Commodity Research at Kotak Securities:
Comex gold was trading little changed near $1,824/oz after a 0.2 percent decline in the previous session. Gold was trading in a range as support from US stimulus expectations, recent weakness in the dollar and mixed economic data from major economies is countered by continuing ETF outflows and improvement in virus situation and progress on the vaccine front.
Gold may continue to witness mixed trade unless there are fresh triggers, however, general bias may be on the upside owing to US stimulus expectations.
BSE Power Index rose a percent supported by the Adani Transmission, Thermax, KEC International:
Kshitij Purohit, Product Manager, Currency & Commodities at CapitalVia Global Research:
Technically, USDINR pair closed firm against the US Dollar taking ques from weak dollar index. USDINR spot is trading near 72.60 and broke the strong support of 72.75-72.80 level, following the Septkember 2019 peak of 72.37 and the highs marked during early 2020 near 72.20 will precede USD/INR sellers targeting the 72.00 threshold.
Shilpa Medicare launches Sunitinib Capsules in India:
Shilpa Medicare announced launch of Sunitinib Capsules, under the brand name SUNISHIL. Three strengths of Sunitinib capsules 12. 5 mg, 25 mg and 50 mg is launched at an attractive price for the benefit of patients.
Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors:
Rupee opening near a crucial support of 72.50. Still lots of flows with only RBI as buyer. More selling near 72.80 if we get the same. Importers to hold on to their imports with a stop at 72.85.
Only cash and very near terms to be hedged by importers. Exporters may sell six months to one year which will give them comfort of the premium. Then when they find better levels they may sell near term Range for the day 72.40/72.80.
Market Updates:
Benchmark indices are holding on the early gains with Nifty above 15300, while Sensex rises more than 500 points.
At 11:11 IST, the Sensex was up 580.63 points or 1.13% at 52,124.93, and the Nifty was up 150.80 points or 0.99% at 15,314.10. About 1435 shares have advanced, 1153 shares declined, and 117 shares are unchanged.
FPIs invest Rs 22,038 crore in February so far amid post-Budget cheer
Continuing their buying trend, foreign portfolio investors (FPIs) have pumped in a net Rs 22,038 crore into the Indian markets in February so far amid positive sentiments around the Union Budget. According to depositories data, overseas investors poured in Rs 20,593 crore into equities and Rs 1,445 crore in the debt segment, taking the total net investment to Rs 22,038 crore during February 1-12.
Narnolia Research on IIP and CPI:
The Index of Industrial Production for the month of December 2020 moved back into the positive territory. The IIP for the month of December'20 saw a 1.0 percent growth. The IIP for the April-Dec period stood at -13.5 percent as opposed to 0.3 percent in the same period during the previous year. Consumer Price Index for the month of January 2021 further slumped to 4.06 percent as opposed to 4.59 percent a month ago. The Inflation for a second month in a row stood in the RBI's comfort band. Food inflation halved to 1.89 percent in January as compared to 3.41 percent in December 2020 leading to a fall in the general inflation.
A further fall in the CPI in the month of January and IIP's move in the positive territory will ensure RBI continues with its accommodative stance in the upcoming rate cuts without any ado. The RBI's move to stabilize the CRR back to the 4 percent level will also ensure the future inflationary trends to be sustainable in the RBI's comfort zone of 4(+-2).
HDFC Securities on Petronet LNG
: Our buy recommendation on Petronet LNG with a price target of Rs 295 is premised on robust volume offtake in FY22/23E as benign LNG prices will ensure its high imports, in turn allowing full utilisation at Dahej on its expanded capacity, and with the completion of the Kochi-Mangalore pipeline, it will raise utilisation at the Kochi terminal. Q3 EBITDA/APAT was 11 percent/13 percent above our estimates, owing to higher-than-anticipated marketing margin and lower-than-anticipated depreciation.
YES SECURITIES review on NSE200 companies earnings:
PBT growth of NSE200 stood at 53 percent YoY, excluding financials and telecom at 41 percent. Revenue de‐growth (excluding finance) at 0.4 percent – significantly better than the preceding quarters of FY21, thanks to strong volume recovery in both urban and rural markets on sequential basis, accompanied with sustained price hikes.
Effective cost management and improving economies of scale resulted into EBITDA (excluding finance) growth of 26.5 percent growth YoY. Consensus FY22 Nifty50 EPS witness further upgrades, this comes after a healthy upside revision during Q2 earnings results. Sequential earnings upgrade has been quite rare, the first time since Q2 FY15.
Steel stocks, CV players and select PSU banks see major EPS upgrades for FY22. Consumer facing companies like aviation, hotels and retail get an EPS downgrade. Interest coverage ratio for NSE200, improved to 4.7 times, depicting the most favourable situation for enterprises in the last 12 quarters.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments:
The Nifty has opened the week with a gap up and is headed to its next target of 15,500. We have good support for the index at 15,100 and until that does not break on a closing basis, we can buy on dips or intraday corrections. Traders are advised to maintain stops and book profits at regular intervals.
BSE Realty Index added 1 percent supported by the Oberoi Realty, Phoenix Mills, Godrej Properties:
India's forex reserves down by $6.24 billion to $583.945 billion
The country’s foreign exchange reserves declined by a massive USD 6.24 billion to reach $583.945 billion in the week ended February 5, RBI data showed on Friday. In the previous week, the reserves had touched a record high of $590.185 billion after rising by $4.852 billion.
In the reporting week ended February 5, the decline in the forex kitty was mainly on account of a fall in foreign currency assets (FCAs), a major component of the overall reserves.
