Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas:
The Nifty continues to trade in the rising channel on the hourly chart. Post the positive start, an intraday dip dragged the index into the negative territory; however the index found support near the lower channel line as well as near the key hourly moving averages & the Nifty recovered thereon. Though the upside momentum has weakened in the last few sessions the bulls are managing to hold on the support parameters. Hence as long as the Nifty trades above the support zone of 13450-13400, it is expected to stretch towards 13700.
Vinod Nair, Head of Research at Geojit Financial Services:
Market is continuing its bull run with a sustained interest in PSU banks and small & mid-cap stocks. Industrial output data, shows a growth in consumer durables production surpassing the pre-covid level and strong pickup in electricity and manufacturing sectors. The domestic market is expected to gain its momentum from the global market, due to an eventful week ahead with Britain & EU moving for a no-deal Brexit and the US markets awaiting the outcome of the Fed meeting.
Rohit Singre, Senior Technical Analyst at LKP Securities:
Index closed a day at 13558 with gains of 44 points and formed a doji candle for third consecutive session hinting indecision in the markets. Nifty has formed a good base near 13500-13440 zone holding above said levels we may see bullish momentum to continue towards immediate hurdle zone of 13600-13650 zone, below 13400 zone we may see some immediate trend reversal. Nifty Bank closed a day at 30746 with gains of half a percent, support for Nifty Bank is coming near 30500-30200 zone and resistance is coming near 31000-31200 zone.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
We have closed within the resistance range of 13400-13700. Until we do not get past 13700 or break 13400 we will not witness any meaningful trading move. Since the bias is on the upside, falls or corrections can be utilised to accumulate long positions. 13350-13400 is a good support for the Nifty.
Ashis Biswas, Head of Technical Research, CapitalVia Global Research:
The lackluster movement in the market and an attempt to break the resistance level around the Nifty 50 Index level of 13580. The short-term technical condition of the market appears like a sideways correction in the process. Sustaining above 13400 levels, we expect the market to gain momentum, that could lead to an upside projection till the 13730 level. The momentum indicators like RSI, MACD to show divergence, indicating a likelihood of further consolidation around the current market level.
Market Close:
Benchmark indices ended higher for the second consecutive day on December 14 with Nifty above 13,550.
At close, Sensex was up 154.45 points or 0.34% at 46,253.46, and the Nifty was up 44.30 points or 0.33% at 13,558.20. About 1769 shares have advanced, 1009 shares declined, and 131 shares are unchanged.
L&T, Cipla, ONGC, Coal India and IOC were among major gainers on the Nifty, while losers were Eicher Motors, Hero MotoCorp, M&M, HDFC Life and Divis Labs.
Except Auto other sectoral indices ended in the green led by the metal and PSU Bank. BES Midcap and Smallcap indices rose 0.8 percent each.
Asahi starts operations at Dahej
Asahi Songwon Colors Limited, a global leader in Blue Pigments, Monday announced commencement of commercial operations at the Dahej plant of Asahi Tennants Color, its joint venture with Tennants Textile Colours Limited (TTC) of UK.
The state-of-the-art Dahej plant will make Red & Yellow pigments. The installed capacity of the AZO pigment plant is 2400 metric tonnes per annum. The plant has been set up at a cost of Rs 82 crore.
EI Paso Water selects Infosys
Infosys announced a strategic partnership with EI Paso Water (EPWater), a municipal utility in EI Paso, Texas, to transform its legacy customer information systems (CIS) with Oracle Utilities Customer to Meter (C2M). As part of this engagement, Infosys will leverage its Preconfigured Accelerator for Customer Experience (PACE), to digitize EPWater’s customer engagement and billing platforms.
Abhishek Bansal, Founder Chairman, Abans Group:
Doubts over US stimulus measures, and strength in the Dollar Index, are keeping gold prices lower, although “no deal Brexit” concerns, along with the worsening covid pandemic situation, are likely to keep gold prices firm.
Uncertainty regarding the passage of a U.S. pandemic relief package is keeping gold prices lower. Bipartisan talks on a $908 billion pandemic relief package have stalled, and are hung up on differences.A “no-deal Brexit” is also likely to support precious metals. U.K. Prime Minister, Boris Johnson, has said on Friday that a “no-deal Brexit” at the end of the year now looks "very, very likely."
Concerns over the pandemic are providing support to precious metals. The overall number of global coronavirus cases has topped 72.2 million, while the deaths have surged to more than 1.61 million (according to a Johns Hopkins University report).Gold prices are likely to find support at the 200-days EMA at $1,818 per ounce, while key resistance is likely to be seen around $1,905 per ounce -$1,958 per ounce.
SEAMAC signs subcontract with Posh India Offshore
A fresh subcontract with M/s Posh India Offshore Pvt Ltd, Indian arm of Posh Group, has been signed for doing jobs in Mumbai High Offshore in the current working season ending May 2021. The additional value of the contract is about USD 7,435,765 exclusive of GST.
L&T bags contracts
The construction arm of L&T has secured orders from prestigious clients for two of its businesses.
Barclays:
Wholesale price inflation inched up to 1.55% y/y in November, which was lower than the consensus expectation. The slight increase in wholesale prices comes against a backdrop of perishable food prices reaching a near-term peak, while energy prices also rose at the margin. Pulses and other non-food articles saw the largest sequential rises, while fruits and vegetables saw sharp price declines.
We see signs of the rises in perishable food prices easing, but think downside in non-perishable food prices is likely to be limited. Modest increases in minerals and iron ore prices are also feeding into headline WPI inflation, and negating the drop in energy prices seen in the past few months.
Rupee Updates
Indian rupee is trading higher at 73.56per dollar, amidbuying seen in thedomestic equity market.It opened flat at 73.64 per dollar against Friday's close of 73.65.
Nifty PSU Bank index up 1 percent led by the Indian Bank, Bank of India and Bank of Baroda
Sanjay Kumar, CEO & MD, Elior India:
The increasing trend in the wholesale price inflation is essentially a mixed bag. At one end hopefully the price rise is on the back of increased demand and not because of increase in input cost for manufacturing, because that would be a cause of concern as it would mean that the logistics and supply chain cost are driving inflation. If it is not that and is driven purely by demand, then it is a welcome sign as it signals an improvement in the economy, however one would have to watch with caution whether the RBI decides to tighten the monetary policy in view of the rising inflation.
IRCTC shares rise 6%:
Shares of IRCTC jumped about 6 percent in intraday trade on BSE on December 14 after its offer for sale (OFS) concluded successfully on Friday, December 11.
The Government of India sold 3.2 crore shares, which will raise Rs 4,374 crore for the exchequer starved of funds due to the COVID-19 crisis.
The retail investor's portion of the OFS was fully subscribed while the institutional investor portion was subscribed 1.34 times.
After the share sale, the government's stake in IRCTC will reduce to 67.4 percent from 87.4 percent earlier.
The floor price for the OFS, which was held on Thursday and Friday, was set at Rs 1,367 per share.
Shares of IRCTC traded 4.48 percent higher at Rs 1,489 on BSE at 1410 hours.
Market update:
Even though the market benchmarks Sensex and Nifty traded with mild gains in intraday trade on December 14, more than 250 stocks hit their 52-week highs on BSE while over 400 stocks hit their upper circuits.
Among the stocks that hit 52-week highs were Nestle India, Tata Steel, Titan, Adani Ports, Dixon Technologies, Colgate-Palmolive, Godrej Properties, SAIL, Jubilant FoodWorks, Marico and Cyient.
On the other hand, Intellect Design Arena, Welspun India, Adani Power, Coral India Finance, Sical Logistics and Alchemist were among the stocks that hit their upper circuits on BSE.
DHFL shares locked in 5% lower circuit
Shares of Dewan Housing Finance Corporation (DHFL) were locked in a 5 percent lower circuit in intraday trade on BSE on December 14 after fraudulent transactions have been detected by transaction auditor Grant Thornton.
Crisis-ridden non-banking finance company DHFL said fraudulent transactions of Rs 1,058.32 crore by way of undervaluation, fraud and preferential treatment to certain entities have been detected by transaction auditor Grant Thornton (GT). The company is undergoing a resolution process under the Insolvency and Bankruptcy Code (IBC).
Buzzing
Shares of YES Bank were locked in a 5 percent lower circuit at Rs 18.45 on BSE on December 14.
The company, in a BSE release on December 11 said it had "sold 15,00,000 equity shares having a nominal value of Rs 10 each, constituting 2.56 percent of the paid-up share capital of SICAL logistics limited (SICAL) in various tranches."
Emkay on IIP
The IIP print hints at a sequential improvement in demand - in line with other high-frequency indicators. However, the data still is somewhat fogged by pent-up and festive-led demand, and thus needs to be watched out as inventory restocking may possibly be fading. Overall, Q3FY21 and Q4FY21 should see continuation of the V-shaped recovery. We maintain overall GDP growth of -7.1% for the year, with manufacturing growth at -5%
In the near term, even as the growth backdrop remains sub-par, despite nascent signs of a recovery, above-target inflation is constraining the RBI from delivering further rate cuts - the upcoming print of inflation will likely confirm it. We expect November CPI to print close to 7.1%, led by food, while core inflation will also likely firm up on cost-push pressures.
Rupee Updates
Indian rupee is trading higher at 73.54per dollar, amid volatile trade seen in the domestic equity market.It opened flat at 73.64 per dollar against Friday's close of 73.65.
Hemang Jani, Head - Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services:
Burger King India Ltd (BKIL) is one of the fastest growing international QSR chains in India got positive response on its IPO (oversubscribed 157 times). Today it got strong listing at Rs 115 versus the issue price of Rs 60.
It is one of the fastest growing QSR chain India with 268 restaurants spread across 17 states/UTs and 57 cities. It has already garnered 5% market share in India’s INR348billion QSR market.
At the CMP of INR125, BKIL is valued at 5.7x FY20 Price/sales and 17.3x FY20 P/BV which fully captures its strong brand positioning, robust store expansion plans and the bright growth prospects of the QSR industry in India. However given its weak financials, the valuation seems a little stretched vs players like Jubiliant Food and Westlife Dev.
Nifty IT index rose 1 percent led by the Indian Bank, Bank of Baroda, Union Bank of India
Inflation Data
November WPI Inflation at 1.55% versus 1.48% (MoM). Primary articles inflation at 2.72% versus 4.74% and manufactured products inflation at 2.97% versus 2.12% (MoM).
Dolat Capital on NRB Bearings:
NRB Bearings is expected to be a key beneficiary of robust growth in the automobile sector, with the domestic OEM segment accounting for 70% of its revenue. NRB caters to almost all the segments in the automobile sector viz. 2W (35%), CV (28%), PV (21%) and farm/off-highway (17%). The company’s client portfolio is well-diversified, with the average contribution of any customer not exceeding ~10% of revenue. Maintain Buy. Target Rs 157.
Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking:
Last week, Spot Gold prices ended marginally higher by 0.08 percent as a drag on the stimulus talks by U.S., a stronger Dollar and the vaccine euphoria moved the investors away from Gold, the safe haven asset.
Investors charged towards riskier asset class on hopes of improvement in the global economic outlook as distribution of the covid19 vaccine commenced in a few nations. However, the yellow metal prices found some support as alarming increase in the covid19 cases around the globe and many countries in partial lockdowns kept a lid on markets risk appetite. Another supporting element for the yellow metal was the mounting tension between U.S. & China. Reports stated that U.S. was planning to impose sanctions on a few Chinese officials over the political issues in Hong Kong.
Last week, Spot silver prices dipped about 1.05 percent to close at $23.9 per ounce while Silver prices on the MCX gained about 2 percent closing at Rs.63735 per kg.
Pfizer and Biotech’s vaccine getting approved by U.S. regulator is expected to dent the appeal for the safe haven, Gold. As for today traders can go for sell in gold at Rs 49300 levels with the stop loss of Rs 49800 levels for the target of 48700 levels. They can also go for sell in Silver at Rs 63,800 levels, with the stop loss of 64300 levels and for the target of 62500 levels.
L&T Tech gets order
L&T Technology Services has been selected by Schindler, the Switzerland-based global leading provider of elevators, escalators, moving walks and related services as one of its key partners to provide innovative digital engineering capabilities
Prabhudas Lilladher on Mrs. Bector Food Specialties:
The company has reported strong margin expansion in 1H, which seems unsustainable, although bounce back in Institutional business will provide reasonable profit growth in FY22. We believe that MBF is well placed to grow in the bread and Buns business but needs to scale up in the Biscuits business, given small size than Britannia, Parle and Sunfeast.
The stock is being offered at ~28xFY21 in comparison to 48xFY21 EPS for Britannia which provides a long term re-rating opportunity if it scales up the Biscuits business. Subscribe.
Rupee Updates
Indian rupee is trading higher at 73.56 per dollar, amid volatile trade seen in the domestic equity market.It opened flat at 73.64 per dollar against Friday's close of 73.65.
Bids for DHFL received
As per a report by CNBC-TV18, deadline to submit revised bids for DHFL has ended and three suitors have submitted new offer.
Adani has submitted bids under two options- entire portfolio, wholesale and SRA books.Piramal Group has also submitted bids under two options- entire portfolio and retail assets.
Oaktree Capital has submitted a bid for the entire portfolio. DHFL Creditors Committee will meet today to evaluate all bids received.
ICICIdirect:
Volatility remained high in the forex market in anticipation of the Brexit deal. We believe there may be an intermediate bounce in the Dollar index. However, higher levels for the rupee remain a shorting opportunity.
The dollar-rupee December contract on the NSE was at 73.87 in the last session. The open interest increased marginally by 1.8% for the December series contract.
Keshav Lahoti, Associate Equity Analyst, Angel Broking
Burger King made a stellar listing on the exchange by listing at 87.5 percent above the issue price. Such listing was in line with our expectation as the company issue was priced at a significant discount compared to listed peers such as Jubilant FoodWorks (Domino’s Pizza) and Westlife Development (McDonald).
Short-term investors can book profit. We advise long-term investors to stay invested in the company as there is ample scope available for the company to increase its business in India.
Even after such a bumper listing, there is no issue with the valuation of the company.
In the future, we expect the company to gain market share by opening more stores compared to the competitors. As the store count will increase, operating leverage will kick in and the company will be able to report profit and it will lead to re-rating of the multiple for the stock.
HDFC Securities maintains buy on Cipla:
HDFC Securities Institutional Research has maintained a 'buy' rating on Cipla and increased the target price to Rs 940 based on 23 times September 22 EPS, Rs 29 per share for gAdvair and Rs 40 per share for gRevlimid.
"We believe Cipla is in a sweet spot with key businesses witnessing strong growth momentum. While COVID sales could normalise in India, recovery in ex-COVID prescription business, structural savings in costs and ramp up in gAlbuterol share in the US is likely to drive an earnings growth of about 28 percent CAGR over FY20-23E," said Bansi Desai, Institutional Research Analyst, HDFC Securities.
Lower-than-expected growth in India, a slower ramp-up in Albuterol, delay in resolution of Goa warning letter and higher price erosion in the US are the key risks.
Sensex gainers and losers
Biocon Biologics and Mylan receive CHMP recommendation
Biocon Biologics Ltd., (a subsidiary of Biocon Ltd.), and Mylan (a subsidiary of Viatris Inc.) have received a positive opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommending approval of the market authorization of Kixelle, a biosimilar Insulin Aspart, which is a rapid acting insulin for the treatment of Type 1 and 2 diabetes.
Nifty Metal index added 1 percent led by the NMDC, Coal India, SAIL
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments:
While the markets have opened on a positive note this morning, we must not lose sight of the fact that we are in a patch of resistance. This range is between 13400-13700. The Nifty is currently trading around the upper end of this range. Unless we do not get past 13700 or break 13400, we will not see a convincing rally up or down. There is strong support around the 13350-13400 range and as long as that holds, traders can utilise dips to accumulate long positions.
Rupee Opens flat
Indian rupee opened flat at 73.64 per dollar on Monday against Friday's close of 73.65, amid buying seen in the domestic equity market.
On December 11, rupee ended flat at 73.66 per dollar against Thursday's close of 73.66.
Burger King debuts at premium
Quick restaurant chain Burger King India shares had a strong opening premium of 92.25 percent on the first day of trade on December 14.
The listing premium was better-than-expected given the stellar subscription and consistent strong revenue growth as well as store additions in last more than five years of operations.
The stock opened at Rs 115.35, against issue price of Rs 60 on the BSE, while on the National Stock Exchange, shares made a debut at Rs 112.50, a 87.50 percent premium over IPO price. Read More
Cipla reaches settlement with Celgene Corp
Cipla share price rose 5 percent on December 14 after company announced the settlement of its litigation with Celgene Corporation, and wholly-owned subsidiary of Bristol Myers Squibb relating to patents for REVLIMID (lenalidomide).
As part of the settlement, the parties will file consent judgments with the United States District Court for the District of New Jersey that enjoin Cipla from marketing generic lenalidomide before the expiration of the patents-in-suit, except as provided for in the settlement. Read More
NBFCs asset under management to grow at 5-6% in FY22: Crisil
The asset under management (AUM) of non-banking finance companies, including housing finance companies, is likely to see a positive growth but will be muted at 5-6 percent in the next financial year, according to Crisil Ratings.
"Navigating a raft of headwinds for over two fiscals culminating in de-growth in the current fiscal assets under management (AUM) of non-banking financial companies (NBFCs) is set to grow again although at a relatively subdued 5-6 percent next fiscal," the agency said in a report.
Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers:
Buoyed by pent-up demand and festive sales, Industrial growth during Oct’20 at 3.6% was ahead of expectations but unlikely to sustain. We do not expect any change in monetary or fiscal measures. Industrial production growth during Oct’20 at 3.6% was ahead of expectations.
In terms of latest industrial growth, India is the third best performing among the G 20 countries, behind Turkey and China. On year till date basis, however, India is the worst performing among the G 20 countries. Pent up demand for durables from the lock down period coincided with festive sales leading to robust growth.
While this has been ahead of expectations, the pace is unlikely to sustain. Positive surprise on growth side coupled with higher than expected inflation would constraint the RBI to carry out further monetary accommodation in the near-term. However, given the early phase of the recovery and the possibility of growth dip, reversal of current accommodation is likely. At the same time, we do not expect any fiscal accommodation during the current year.
Geojit on Mrs Bectors Food Specialities IPO
At the upper price band of Rs 288, Mrs. Bectors Food Specialities (MBFSL) is available at a P/E of 22x on FY21E EPS (annualized), which looks attractive, given its higher profitability compared to similar sized peers. Considering its future growth prospects in packaged biscuits and QSR segment, we recommend a “Subscribe” rating with a long-term perspective.
Purpose of IPO is to raise funds for Rajpura manufacturing facility project to establish new biscuits, production line (Rs.40.54cr), proceeds from OFS will be paid to the selling shareholders and the Company will not receive any such proceeds.
Key risks are the company do not have any long-term contracts with its QSR customers and overdependence on biscuits business.
Gainers and Losers on the BSE Sensex:
Market Opens:
Indian indices opened strong note hitting fresh record highs on December 14 with Nifty above 13,550.
At 09:17 IST, the Sensex was up 210.60 points or 0.46% at 46,309.61, and the Nifty was up 65.50 points or 0.48% at 13,579.40. About 1292 shares have advanced, 255 shares declined, and 60 shares are unchanged.
ICICIdirect:
Indian markets are likely to see a gap up opening on the back of strong global cues amid positive developments on the vaccine front. However, global news flows and sector specific developments will be key monitorables. US markets ended mixed amid uncertainties related to fiscal stimulus package.
Market at pre-open:
Benchmark indices are trading firm in the pre-opening session.
At 09:03 IST, the Sensex was up 46.98 points or 0.10% at 46145.99, and the Nifty was up 50.00 points or 0.37% at 13563.90.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services:
The overall trend of the market remains positive as it is showing resilience on the back of abundant liquidity, positive developments on the vaccine front and signs of economic recovery. The market may however, consolidate at these levels for some time given stalement in US stimulus and concerns over probable no-deal Brexit talk.
Technically too, Nifty formed a Doji Candle on daily scale which indicates absence of momentum at higher zones but declines are nicely being bought. On weekly front, it continues its northward trend and has been forming higher highs from the last six weeks with consecutive positive close.
Now it has to continue to hold above 13350 to witness an up move towards 13750 while on the downside support exists at 13300. India VIX was up by 0.5% to 18.8 levels. Overall lower levels of volatility suggests that Bulls are holding the tight grip and any small decline could be bought in the market.
Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services:
This is a second consecutive month that India's industrial production has turned positive. The Oct IIP has surged to 3.6% compared to 0.2% in Sep. The easing of lockdown restrictions and increase in demand on the back of festive season has given rise to industrial output.
RBI policymakers are already indicating that things can only get better from here. So, going ahead the pickup in demand and an eventual positive IIP figure will put India's GDP in a better position.
Industrial output grows 3.6% in Oct
India's index of industrial output for the month of October was at 3.6 percent, against 0.5 percent September, as per the Index of Industrial Production (IIP) data released by the government on December 11.
"While the IIP growth stood at an eight month-high, and displayed its best performance since the pandemic struck, the pace of the improvement in October 2020 was feebler than expected," Aditi Nayar, principal economist, ICRA said. Read More
