Taking Stock | Omicron Cases Spook Investors; Sensex Plunges 949 Points, Nifty Ends Below 17,000
Except UPL, all Nifty50 stocks ended in the red. Coal India, IndusInd Bank, Tata Consumer Products, Bajaj Finserv and HCL Technologies were among the top losers... Read More
Ajit Mishra, VP - Research, Religare Broking:
Markets plunged sharply lower and lost over one and a half percent, in continuation to Friday’s fall. After the flat start, weak global cues and updates on the new COVID variant started weighing on the sentiment as the day progressed. Consequently, the Nifty ended near day’s low to close at 16,912.25 levels. The sectoral indices traded in tandem and mostly ended in the red wherein IT, auto, FMCG and pharma were among the top losers.
The rise in COVID cases has again started haunting the global markets and the situation may deteriorate further in near future. Besides, the upcoming MPC’s policy review outcome and macroeconomic data (IIP and CPI inflation) would keep the volatility high. Keeping in mind the scenario, we reiterate a cautious stance and suggest continuing with a hedged approach.
Santosh Meena, Head of Research, Swastika Investmart:
Nifty is continuing its corrections after a minor pullback where it has again slipped below its 100-DMA. The selling can be attributed to rising cases of omicron variant in India along with other countries whereas FIIs are also continuing to hold their hand on the sell button. There was a sharp selling on Tech stocks in the USA in Friday's trading session and the same was replicated in our market where the Nifty IT index ended with a cut of 2.7%, however there was broad-based selling because there was no sectorial index that ended on a positive note. The market may continue to remain volatile amid news flow related to the omicron variant.
Technically, 16800-16700 is a critical support zone for the Nifty where we can expect a bounceback while below this zone, 16400 will be the next important support level. On the upside, 17000 will act as an immediate intraday resistance for tomorrow while 100-DMA of 17181 will be the next hurdle; above 100-DMA, we can expect a short covering move towards the 17300-17350 zone.
Bank Nifty still manages to close above its 200-DMA that is currently placed at 35700 level. If it starts to trade below this level then we can expect further weakness towards the 35000 level otherwise it may witness a bounceback. On the upside, 36000 will be immediate and intraday resistance while 36500/37000 will be the next resistance levels.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
There was no respite for the markets as investors continued to dump stocks at will due to uncertainty over the current threat of the omicron variant of coronavirus. Weakness in other Asian markets also further worsened the sentiment.
After last Friday's sharp fall, the Nifty quickly broke the 17100 support level. The index has formed a long bearish candle and closed below the 17000 mark which is broadly negative for the market. However, on intraday charts, the market looks extremely oversold and as long as the Nifty doesn't breach the 17000 intraday breakout level, the weak wave could remain intact.
For day traders, the texture is volatile and weak and 17000 could act as a trend decider level. Below the same, the correction wave will continue up to 16850-16800 levels.
On the flip side, above 17000 intraday breakout, a pullback rally could move the index up to 17085-17125 levels. Contra traders can take a long bet near 16800 with a strict 16750 support stop loss.
Vinod Nair, Head of Research at Geojit Financial Services:
Ambiguity surrounding Omicron continued to dent the morale of domestic investors ahead of the important RBI policy announcement on Wednesday. The domestic market is expected to be volatile as the near-term will be dominated by developments on new variant and, RBI and FED policy decisions.
Market expects RBI to hold-on to the accommodative policy considering short-term uncertainties. However, a change is expected during H1 2022, which Indian market is factoring while global equities are trading mixed.
Mohit Nigam, Head - PMS, Hem Securities:
Benchmark Indices closed lower today with Nifty and Sensex falling more than -1.6% each today with nifty closing below 17000 levels. Key benchmark indices have extended losses and registered fresh intra-day lows with major weakness witnessed in IT and FMCG stocks.
On the Economy front, investors would be eyeing the RBI MPC Meeting and data of Index of Industrial Productions (IIP) which is set to be released on 8th & 10th December.
On the technical front, markets are trading around crucial support zone ~16800-850 levels and if it does not sustain above this level then we might see some volatility in the coming days . Immediate support and resistance for Nifty 50 is 16800 and 17250 and for Bank Nifty is 35350 and 36500, respectively.
S Ranganathan, Head of Research at LKP securities:
Indices started the day weak and selling intensified during afternoon trade with almost all sectoral indices ending in the red. As the street awaits the RBI stance on interest rates, the Nifty sold off below 17K today as Bears held upper hand on a day which saw no recovery.
FII selling continued with no respite despite accumulation seen today in high quality financials by local investors.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
The markets continued its downward trajectory and has threatened the 16900 level. The index is heading towards the recent low of 16750-16780. If we break that, the Nifty can fall to 16400-16450.
Market Close
: Market ended lower for the second consecutive day on December 6 with Nifty closing below 17,000 amid rising concern over Omicron variant.
At Close, the Sensex was down 949.32 points or 1.65% at 56,747.14, and the Nifty was down 284.40 points or 1.65% at 16,912.30. About 1340 shares have advanced, 1948 shares declined, and 165 shares are unchanged.
Except UPL, all other stocks under Nifty50 ended in the red with Coal India, IndusInd Bank, Tata Consumer Products, Bajaj Finserv and HCL Technologies were among the top Nifty losers.
Market Close: Market ended lower for the second consecutive day on December 6 with Nifty closing below 17,000 amid rising concern over Omicron variant.
At Close, the Sensex was down 949.32 points or 1.65% at 56,747.14, and the Nifty was down 284.40 points or 1.65% at 16,912.30. About 1340 shares have advanced, 1948 shares declined, and 165 shares are unchanged.
Except UPL, all other stocks under Nifty50 ended in the red with Coal India, IndusInd Bank, Tata Consumer Products, Bajaj Finserv and HCL Technologies were among the top Nifty losers.
Among sectors, IT index fell over 2 percent, while other sectors lost a percent each. The BSE midcap and smallcap indices fell over 1 percent each.
Oil rebounds above $71 on Omicron hopes, Iran talks
Oil rose by more than $1 a barrel to above $71 on Monday as hopes that the Omicron coronavirus variant may cause mostly mild symptoms boosted riskier assets and as the prospect of an imminent rise in Iranian oil exports looked less likely.
Helping ease Omicron concerns, reports in South Africa said cases there only had mild symptoms and the top U.S. infectious disease official told CNN "it does not look like there's a great degree of severity" so far.
Brent crude gained $1.77, or 2.5%, to $71.65 by 0920 GMT while U.S. West Texas Intermediate crude advanced $1.69, or 2.6%, to $67.95. Both benchmarks declined for a sixth week in a row last week.
BSE Auto index slipped nearly 2 percent dragged by Balkrishna Industries, Tata Motors, Bosch
BSE Midcap index declined 1 percent dragged by the Motilal Oswal Financial Services, Balkrishna Industries, Tata Consumer Products
Tata Motors JLR November sales:
Tata Motors JLR UK sales declined 35.2% at 4,097 units versus 6,326 units, YoY.
Tata Motors was quoting at Rs 468.45, down Rs 11.55, or 2.41 percent.
Nifty FMCG index fell 1 percent dragged by the Tata Consumer, Dabur India, Emami
Market at 3 PM
Benchmark indices extended the losses with Nifty below 17000 and Sensex falling over 700 points.
The Sensex was down 876.72 points or 1.52% at 56819.74, and the Nifty was down 261.50 points or 1.52% at 16935.20. About 1326 shares have advanced, 1853 shares declined, and 140 shares are unchanged.
JUST IN |
China Central Bank has cutreserve ratios by 50 basis points.
Tata Power, IIT Madras signed MoU:
Tata Power and IIT Madras have inked pact to collaborate on R&D, consultancy, advocacy, training and technology solutions.
According to a statement, the two organisations have signed a memorandum of understanding (MoU) to facilitate this collaboration.
As a part of the MoU, Tata Power and IIT Madras will aim to pursue advanced research in areas of future technology.
Tata Power Company was quoting at Rs 221.95, down Rs 3.65, or 1.62 percent.
HDFC Securities on HCL Technologies
HCL Technologies has a strong globally diversified presence and provides comprehensive IT services to an established customer base. It has strong expertise in engineering and R&D services and its end-customers are spread across industry segments.
The company continues to win multiyear deals in Cloud transformation, cyber security, etc. The company has a good track record in client acquisitions and engaging in vendor consolidation opportunities over the recent past. HCL Tech has strong presence in data science and engineering. The company expects healthy double digit growth in revenues in FY22E
We believe the base case fair value of the stock is Rs 1271 (20x Sept FY23E EPS) and the bull case fair value of the stock is Rs 1339 (21x Sept FY23E EPS) over the next two quarters. Investors can buy at LTP and add further on dips in the Rs 1042-1062 band (16.5x Sept FY23E EPS). At the LTP of Rs 1171, the stock is trading at 18.4x Sept FY23E EPS
European markets are trading in the green with FTSE, CAC and DAX up over half a percent each
Gaurav Garg, Head of Research, Capitalvia Global Research
: Indian equity benchmarks added losses in the noon session, with both Sensex and Nifty trading in the red. Indian shares fell as the country recorded more cases of the Omicron variant over the weekend. Investors awaited the central bank decision that could leave interest rates on hold to sustain an economic recovery from the pandemic lows in 2020. Our research suggests that 56800-56350 levels may act as support level in the market. We can expect the market to take a reversal from the support levels of 56800-56350.
Anand Rathi IPO updates
The initial public offering of Anand Rathi Wealth, one of the leading non-bank wealth solutions firms in India, has been subscribed 5.21 times on December 6, the final day of bidding, garnering bids for 4.41 crore equity shares against the IPO size of 84.75 lakh equity shares.
The reserved portion for qualified institutional buyers was subscribed 60 percent, and that of non-institutional investors saw 8.19 times subscription. Retail investors continued to provide strong support to the issue with their allotted quota being subscribed 6.82 times, and employees have put in bids 1.05 times the portion set aside for them.
Market update at 2 PM: Sensex is down 503.59 points or 0.87% at 57192.87, and the Nifty down 153.20 points or 0.89% at 17043.50.
Nifty Pharma index shed 1 percent dragged by the Divis Laboratories, Dr. Reddy's Laboratories, Strides Pharma Science
Anand Rathi IPO sees 4.81 times subscription on day 3
The initial public offering of Anand Rathi Wealth, one of the leading non-bank wealth solutions firms in India, has been subscribed 4.81 times on December 6, the final day of bidding, garnering bids for 4.08 crore equity shares against the IPO size of 84.75 lakh equity shares.
The reserved portion for qualified institutional buyers was subscribed 18 percent, and that of non-institutional investors saw 7.63 times subscription.
Retail investors continued to provide strong support to the issue with their allotted quota being subscribed 6.49 times, and employees have put in bids 1.03 times the portion set aside for them.
Yash Gupta, Equity Research Analyst, Angel One
Shriram Properties Limited IPO to open from 8th December 2021 to 10th December 2021, company has fixed the price band of Rs 113 - Rs 118. The total issue size will be Rs 600 crores which include Rs 250 crores of fresh issue and an offer for sale of Rs 350.
The company has fixed the market lot of 125 shares. The expected listing will be on 20th December 2021. Company has reported a negative profit after tax of Rs 60 crores in the first half of 2022 along with that company has also reported a negative profit after tax of Rs 68.1 crores in 2021.
Company has reported degrowth in revenue since the last 2 years, 2021 the company reported revenue of Rs 501 crores down by 20.7% from Rs 631.8 crores in 2020.
Market at 1 PM
Market erased some of the intraday losses but still trading lower with Nifty below 17100.
The Sensex was down 390.74 points or 0.68% at 57305.72, and the Nifty was down 119.20 points or 0.69% at 17077.50. About 1573 shares have advanced, 1544 shares declined, and 141 shares are unchanged.
Inox Wind subsidiary to raise up to Rs 500 crore via IPO:
The board of directors of Inox Wind’s material subsidiary, Inox Green Energy Services (Earlier known as Inox Wind Infrastructure Services Limited) (IGESL) in their meeting held today i.e. 6 December, 2021, has approved fund raising, by way of an initial public offer of its Equity Shares comprising of fresh issue of equity shares aggregating upto Rs 500 crore (fresh issue) and/ or an offer of sale of equity shares by certain existing and eligible shareholders of the company, the company said in a stock exchange filing.
Inox Wind was quoting at Rs 143.20, down Rs 3.10, or 2.12 percent on the BSE.
Indiabulls Housing Finance approved the public issue of NCDs of up to Rs 800 crore
The Securities Issuance Committee of the board of directors of Indiabulls Housing Finance in the meeting held on December 3, 2021, wherein the Committee considered and approved the public issue by the company of secured, redeemable, non-convertible debentures of face value of Rs 1,000 each (NCDs) for an amount up to Rs 200 crore with an option to retain oversubscription up to Rs 800 crores, aggregating up to Rs 1,000 crores, which is within the shelf limit of Rs 2,000 crores.
At 12:34 hrs Indiabulls Housing Finance was quoting at Rs 247.05, down Rs 9.75, or 3.80 percent.
Nomura maintained buy on Dr Reddy’s Laboratories, target at Rs 5,856
Research firm Nomura has maintained buy rating on Dr Reddy’s Laboratories with a target at Rs 5,856 per share.
None of the observations for Duvvada is classified as a repeat observation, while some observations are procedural in nature, it added.
As a base case, expect company to address observations to satisfaction of US FDA, while there are no indications of any significant lack of control on current processes, Nomura said.
Dr Reddy’s Laboratories was quoting at Rs 4,541.50, down Rs 56.50, or 1.23 percent.
Yash Gupta, Equity Research Analyst, Angel One:
NMDC Limited announced an interim dividend of Rs 9.01 per share i.e 6.20% on current market price of Rs 145.
Company in its board meeting has fixed the record date of 15th December 2021 for the interim dividend of Rs 9.01 per share, so the company will get ex-dividend on 14th December 2021. This will be the first dividend by NMDC Limited in the current financial year.
Market at 12 PM:
Benchmark indices extended the losses and trading near the day's low with Nifty below 17100.
The Sensex was down 400.51 points or 0.69% at 57295.95, and the Nifty was down 117.90 points or 0.69% at 17078.80. About 1580 shares have advanced, 1490 shares declined, and 145 shares are unchanged.
Ramkrishna Forgings wins biggest domestic order worth Rs 720 million
Ramkrishna Forgings won a recent biggest domestic order worth Rs 720 Million from an Indian OEM in the MHCV segment to be executed over a four-year period, compamy said in the release.
Ramkrishna Forgings was quoting at Rs 963.30, down Rs 1.05, or 0.11 percent on the BSE.
BSE oil & gas index slipped 1 percent dragged by the Gail India, Indraprastha Gas, Adani Total Gas
Marwadi Shares and Finance view on Rategain Travel Technologies IPO
Considering FY22 annualized EBITDA of Rs 108.96 million on the post-issue basis, the company is going to list at EV/EBITDA of 421.34 with the market cap of Rs 45,367 million.
There are no listed companies in India whose business is comparable with that of the company’s business.
We assign an avoid rating to this IPO as valuation is expensive on an absolute basis.
Elara Securities on Aditya Birla Sun Life Asset Management Company
The company has a strong MFD-led retail distribution (51% of AUM contribution). It is one of the lowest cost operators (19bp as a percentage of AUM in FY21) among listed peers, with an improving share of equity assets, up 1,289bp from FY17 to 37.2%. We expect a revenue CAGR of 12.5% and a NOPLAT CAGR of 17.0% over FY21-24E. We initiate coverage with a buy rating and a DCF-based target of Rs 715 with 30.8x FY23E EV/NOPLAT, which is at a 27.5% discount to that of NAM’s 42.5x). It is trading at 27.0x FY22E EV/NOPLAT and 24.3x FY23E EV/NOPLAT. Our target implies 23% upside from current levels.
Anand Rathi IPO updates
The initial public offering of Anand Rathi Wealth, one of the leading non-bank wealth solutions firms in India, has been subscribed 3.77 times on December 6, the final day of bidding, garnering bids for 3.19 crore equity shares against the IPO size of 84.75 lakh equity shares.
The reserved portion for qualified institutional buyers was subscribed 17 percent, and that of non-institutional investors saw 4.34 times subscription. Retail investors continued to provide strong support to the issue with their allotted quota being subscribed 5.76 times, and employees have put in bids for 70 percent of the portion set aside for them.
Market update at 11 AM:
Sensex is down 257.70 points or 0.45% at 57438.76, and the Nifty shed 74.20 points or 0.43% at 17122.50. Tata Steel, ICICI Bank and UPL are the top gainers while Coal India, HCL Tech and Asian Paints are the top losers.
Among the sectors, the realty index added a percent while IT and auto sectors are under pressure.
Nifty Metal index rose nearly 1 percent supported by the JSW Steel, Welspun Corporation, Hindalco Industries
Eris Lifesciences forms 10-year joint venture with MJ Biopharm to enter the insulin segment
Shares of Eris Lifesciences jumped almost 10 percent in trade on December 6 after the company, on December 3, announced that it has formed a 10-year joint venture with MJ Biopharm to enter the insulin segment.
The objective of the joint venture is to expand the product portfolio to offer biotherapeutic options to cardio-metabolic patients, the company said in a regulatory filing.
Anand Rathi IPO sees 3.38 times subscription on day 3
The initial public offering of Anand Rathi Wealth, one of the leading non-bank wealth solutions firms in India, has been subscribed 3.38 times on December 6, the final day of bidding, garnering bids for 2.86 crore equity shares against the IPO size of 84.75 lakh equity shares.
The reserved portion for qualified institutional buyers was subscribed 17 percent, and that of non-institutional investors saw 3.79 times subscription.
Retail investors continued to provide strong support to the issue with their allotted quota being subscribed 5.2 times, and employees have put in bids for 68 percent of the portion set aside for them.
Amit Pabari, MD at CR Forex Advisors
The theme for this week would be economic data. The source of volatility in the USDINR pair could be Wednesday’s 'RBI monetary policy' or Friday’s 'US CPI data'. That apart, the market will be focusing on trade balance data and CPI data from India’s immediate peer country- China.
It would be a little sluggish start to the second week of December for the USDINR pair with a slight depreciating move towards 75.25 levels as a stronger dollar on the back of a sharp fall in the US unemployment rate and FII’s big bang selling equities have weighed down.
One can expect the pair to trade in the range of 75.00 - 75.45 with a higher potential for the bullish move for the day.
BSE Information Technology index fell 1 percent dragged by HCL Infosystems, Datamatics Global Services, Mastek
Rupee Opens:
Indian rupee opened marginally lower at 75.21 per dollar on Monday against Friday's close of 75.17.
The US non-farm payroll did not come out as per expectations but the corona virus fear and FED quickening tapering has kept dollar well bid. The RBI MPC starts today with no expectation of a rate hike but RBI could be hawkish in its speech, said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.
USDINR range for the day should be 75 to 75.30. Exporters may sell near to 75.30 while importers can wait for hedging and for cash and near term imports should do it at the bottom end of the range around 75, he added.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The markets have opened on a tepid note. We have failed to keep above the 17400-17500 level which is a major hurdle for the Nifty. A bullish trend can emerge only post that. Until then a "sell on rallies" approach can be adopted.
16900 is a near-term support for the index and if we break that, the markets can crack further.
Market at 10 AM
Benchmark indices are trading lower with Nifty around 17100 dragged by auto, IT, pharma and banking stocks.
At 10:02 IST, the Sensex was down 251.79 points or 0.44% at 57444.67, and the Nifty was down 67.40 points or 0.39% at 17129.30. About 1566 shares have advanced, 1284 shares declined, and 159 shares are unchanged.
