Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
Nifty after making an all-time high of 18604 in mid-October went through a corrective phase over last 2 months. The putative swing low made during this period was at around 16800 levels. However, at sub-17000 levels, the aggression from Bears was found to be missing leading to an eventual recovery which we are witnessing presently.
This could be partly explained by the oversold readings at lower levels coupled with the support coming in at the 16900 mark from the 38.2% retracement (of the rally from the April’21 lows of 14151 up to the all-time highs of 18604).
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services:
Indian equity market witnessed strong positive momentum for the second consecutive day on the back of positive global cues and status quo maintained by RBI policy committee. Nifty opened positive and witnessed by interest throughout the day and closed with gains of almost 300 points.
Both Sensex and Nifty gained around 1.7% for the day. Broader market to performed in line with midcap and smallcap indices gaining 1.6- 1.8%. Strong buying was seen in rate sensitive like PSU banks, auto, banking and realty stocks. Metals too were in focus.
RBI in its monetary policy meeting decided to keep repo rate unchanged at 4%. The central bank retained its GDP growth forecast at 9.5%, and inflation at 5.3% for the full year. Both Nifty and Bank Nifty are recovering well from the recent correction. Strength is clearly visible along with strong buying interest in the market. Hence, traders are advised to maintain buy on dips strategy for the next few days.
Jio-bp and Mahindra Group sign MoU for EV and low-carbon solutions
Reliance BP Mobility Limited (RBML), operating under the brand name Jio-bp and The Mahindra Group, today announced a non-binding MoU for exploring creation of EV products and services, alongside identifying synergies in low-carbon and conventional fuels.
The MoU also covers evaluating charging solutions by Jio-bp for Mahindra vehicles including electric 3 and 4 wheelers, quadricycles and e-SCV (Small Commercial Vehicles – sub 4 ton). This would include captive fleets and last-mile mobility vehicles of Mahindra Group.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
RBI's decision to keep the policy rate unchanged and maintaining an accommodative stance helped benchmark indices propel sharply for the second straight session. Post reversal, the market has maintained an uptrend continuation formation, and on daily charts it has formed a bullish candle.
The texture of the market is positive and is likely to continue in the near term. But due to an overstretched rally, some profit booking at higher levels cannot be ruled out.
For Nifty, 17400 -17340 would act as a key intraday support, while 17575-17620 could act as a strong resistance zone for the day traders.
Ajit Mishra, VP - Research, Religare Broking:
Markets extended gains for the second consecutive day and rose over one and a half percent. Firm global cues triggered a gap up start which further strengthened following the dovish stance of the RBI. Consequently, the Nifty index closed around the day’s high to settle at 17,469 levels. The broader markets as well as all the sectoral indices ended in the green.
As RBI policy is behind us, the focus will shift back to global cues and upcoming macro data (IIP & CPI). Further, as the number of IPOs is lined up, primary markets will keep investors busy. Given the high volatility in the market, we would remain cautiously optimistic on the markets.
Mohit Nigam, Head - PMS, Hem Securities:
Benchmark Indices continued its upward journey on the second consecutive day with Nifty and Sensex hovering near day’s high. The Nifty reclaimed 17450 levels. Among sectors, all the key indices were trading with a positive momentum. The European markets are trading flat today.
RBI keeps accommodative stance with interest rate unchanged at 4% and reverse repo rate at 3.35% and will maintain this stance as long as necessary to revive and sustain growth which gives a clear signal that RBI is giving a strong & durable support to the economy without downsizing any support which will be beneficial for the equity markets as well.
Hence, the markets have given a stellar run up today giving a thumbs up to RBI's comments today. Despite record equity selling by FIIs, RBI has done well to defend the currency and made sure that imported inflation is under check.
Immediate support and resistance for Nifty 50 is 17200 and 17700 and for Bank Nifty is 36900 and 37800.
Vinod Nair, Head of Research at Geojit Financial Services:
Fears over Omicron faded as recent reports suggested that the new virus isn’t deadly as earlier anticipated and this helped the market to add-on to recent strong gains.
The market turned positive over RBI’s continued accommodative stance and MPC kept the rates unchanged. The GDP forecast for FY22 remained high at 9.5% showing confidence over economic recovery and inflation forecast is below the market estimates.
Sachin Gupta, AVP, Research at Choice Broking:
The benchmark index has extended the gain consecutively for the second day in a row. The Nifty settled at 17469.75 levels with 1.7% gains while the Bank Nifty increased by 1.75% to close at 37285.80 levels.
Technically, the Nifty index has taken support at Lower Bollinger Band and settled above 100-days Moving Average, which suggests further upward move in the coming day. The index has also formed a Double Bottom pattern on an hourly chart, which indicates bullish sentiments.
A momentum indicator RSI & Stochastic have suggested positive crossover on the daily chart. At present, the index has support at 17300 levels while resistance comes at 17600 levels.
On the other hand, Bank Nifty has support at 36800 levels while resistance at 38000 levels.
S Ranganathan, Head of Research at LKP Securities:
Positive global cues coupled with the continuation of an accomodative policy stance of the RBI by holding rates fired up the bulls today even as the Central Bank decided to enhance the variable reverse repo rate auctions to rebalance liquidity.
The bullish undertone was reflected in the sectoral indices as well as in advance-declines as the market breadth was healthy with small & midcaps too participating in the rally. Several smaller companies today have access to capital and this is getting reflected in the markets as well.
Market Close:
Benchmark indices ended strong for the second consecutive day on December 8 after Reserve Bank of India (RBI) kept the key rates unchanged.
At close, the Sensex was up 1,016.03 points or 1.76% at 58,649.68, and the Nifty was up 293.10 points or 1.71% at 17,469.80. About 2270 shares have advanced, 941 shares declined, and 121 shares are unchanged.
Bajaj Finance, Hindalco Industries, Maruti Suzuki, SBI and Bajaj Finserv were among the top Nifty gainers. Losers included HDFC Life,
Kotak Mahindra Bank, Power Grid Corp, Divis Labs and IOC.
All the sectoral indices ended in the green, with PSU bank, auto, II indices rising 2 percent each. BSE midcap and smallcap indices rose over 1 percent each.
Nikhil Gupta, Chief Economist, Motilal Oswal Financial Services
As expected, RBI keeps all policy rates unchanged today. Further, the RBI maintains its FY22 real GDP growth/inflation projections at 9.5%/ 5.3%.
Going forward, we fear that real GDP growth could be lower than the RBI projections, with inflation falling broadly in line. Along with the rising threat from the Omicron variant, there is a possibility that a hike in reverse repo could be postponed further to April 2022.
However, if growth turns out to be better than our expectations (or in line with/better than RBI projections) and Omicron threat doesn't materialize, a 15bps hike in reverse repo rate in Feb'22 cannot be ruled out. In any case, the Union Budget 2022-23 will also play an important role in the next MPC meet.
Nifty PSU Bank index rose 2 percent led by the SBI, Bank Of Baroda, Canara Bank, PNB
Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW PE:
RBI has maintained the accommodative stance on expected lines. The good news is that the economy continues to be on the path of recovery and likely to achieve the target of 9.5% growth in FY22. We have seen the positive impact of economic recovery on our portfolio companies as well, notwithstanding the increase in uncertainties due to emergence of Omicron variant.
While the inflation is likely to remain within RBI projections, it will be closely watching the impact of Omicron variant of COVID on the GDP growth to take any further decision on policy rate.
Also, the decision of RBI to release a discussion paper on digital payments is extremely positive, which is likely to further accelerate the growth of digital payments, especially UPI, with a huge multiplier effect on Indian economy.
Texmaco Rail & Engineering completes rights issue of 7.15 crore equity shares
Texmaco Rail & Engineering has informed about the successful completion of its rights issue of 7,15,26,643 equity shares for an aggregate amount of up to Rs 16,451.13 lakhs, company said in its release.
The issue saw an overwhelming response across all categories and was oversubscribed in overall terms by approximately 1.35 times. The issue was oversubscribed by approximately 1.47 times from the public category, led by participation fiom the institutional investors as well as retail investors.
Texmaco Rail and Engineering was quoting at Rs 29.90, up Rs 2.25, or 8.14 percent
Gaurav Garg, Head of Research, Capitalvia Global Research:
Indian Equity Benchmarks continued to trade higher in the noon session with both Sensex and Nifty trading on a strong note.
Sentiments were getting support from other Asian markets. 58000 will remain act as an important support level in the market. We can expect the market to remain positive for the short period of time and may trade in the range of 58800-59000.
Market at 3 PM
Benchmark indices extended the gains in the final hour of trading with Sensex rising over 1000 points.
The Sensex was up 1,057.68 points or 1.84% at 58691.33, and the Nifty was up 302.80 points or 1.76% at 17479.50. About 2223 shares have advanced, 835 shares declined, and 92 shares are unchanged.
BSE Capital Goods index rose 1 percent led by the Grindwell Norton, Graphite India, Bharat Forge
Shanti Ekambaram, Group President – Consumer Banking, Kotak Mahindra Bank
: In line with expectations, the MPC left the key rates unchanged and its stance continues to be “accommodative”. The MPC acknowledged that the economic recovery is becoming broad-based thanks to increased vaccination and a slump in COVID cases. While rural demand is likely to stay resilient, pent-up demand will continue to bolster urban consumption. Having said this, the RBI also pointed out that the economy may face downside risks from volatile commodity prices and financial markets, persisting global supply disruptions, and new mutations of the virus. RBI retained both the GDP estimate at 9.5%, and the inflation target at 5.3% for FY21-22. This is assuming that there would be no fresh spurt in COVID cases.
The MPC will use liquidity and other tools at its disposal to maintain price stability and continue to support the nascent but firm economic growth. The RBI has stated that they will provide continued policy support to economic growth. The RBI will continue to balance economic growth and inflation and watch global events and domestic data for further policy outlines and interventions.
European markets update
Kopran stock price hits upper circuit:
The Board of Directors of the Company at its meeting approved the issuance of up to 49,59,999 equity shares of face value of Rs 10 each to the Proposed Allottees as per Annexure-I, on a preferential basis in accordance with Chapter V of the Securities and Exchange Board of India. The stock was trading at Rs 284.20, up Rs 13.50, or 4.99 percent. It has touched an intraday high of Rs 284.20 and an intraday low of Rs 271.10. There were pending buy orders of 19,942 shares, with no sellers available.
Market update at 2 PM: Sensex is up 990.31 points or 1.72% at 58623.96, and the Nifty jumped 282.50 points or 1.64% at 17459.20.
Brokerages raise Bharti Airtel's ARPU estimates, expect 22% upside
Bharti Airtel share was trading higher in the afternoon on December 8 after Goldman Sachs maintained a "buy" rating on the stock with the target of Rs 870 a share, an upside of 22 percent from the current market price.
"Bharti Airtel offers high earnings visibility. We forecast 38 percent FY21-24 EBITDA CAGR for wireless business. See upside risks to earnings if ARPUs were to be closer to the company-guided number," it said.
ARPU or average revenue per unit gives a picture of a business’ revenue generation capability and growth at the per-unit level.
"The stock trades at 8x FY23e EV/EBITDA, broadly in-line with its historical trading average. India business may generate USD 2.5 billion+ of annual FCF on average for the next four years," it added.
Dhaval Ajmera, Director of Ajmera Realty & Infra India:
RBI maintaining status quo on rates augurs well for brining equilibrium in the demand-supply economics of the real estate industry. With low loan interest rate regime, the home sales velocity witnessed across key Indian cities will continue on upward trajectory. The stock markets are expected to remain buoyant and realty index will continue to advance with positive bias in the short to medium term.
The revision of GDP and inflation targets are seen to be milder than expectation. The upcoming discussion paper to make the digital payments more affordable is a positive take-away from Governor’s speech. The announcements related to digital payments can offer disruption and bring dynamism in financial inclusivity expedition in the country.
JBM Auto recommends sub-division of equity share
The board of directors of JBM Auto recommended the proposal of sub-division of equity share having face value of Rs 5 each fully paid up into equity shares having face value of Rs 2 each fully paid up at the record date to be determined as authorized by the Board of Directors, subsequent to the approval of shareholders through Postal Ballot.
JBM Auto was quoting at Rs 1,141.60, up Rs 35.30, or 3.19 percent.
Marwadi Shares and Finance view on C.E. Info Systems Limited IPO:
Considering the TTM (Sept-2021) adjusted EPS of Rs 16.30 on the post-issue basis, the company is going to list at a P/E of 63.37 with a market cap of Rs 55,000 mn.
There are no listed companies in India whose business is comparable with that of the company’s business. We assign the “subscribe” rating to this IPO as the company is one of the leading data and technology products and platform company having a well-known brand MapmyIndia with customers like PhonePe, Hyundai and Flipkart. Also, it is available at a reasonable valuation considering the future growth potential.
CRISIL assigns ratings to PG Electroplast
CRISIL Ratings assigned to PG Electroplast, partial Long Term Rating "CRISIL A-/Stable".
PG Electroplast touched a 52-week high of Rs 674 and was quoting at Rs 647.50, up Rs 49.40, or 8.26 percent on the BSE.
Vikash Khandelwal, CEO, Eqaro Guarantees:
The RBI has maintained continuity in its accommodative stance by keeping the key rates unchanged. While India has emerged as the fastest-growing major economy the RBI’s decision today will further support growth and hasten the economy’s return to normalcy. The central bank has been pushing for a stable policy regime as the economy recovers in aftermath of the pandemic.
A phased unwinding of liquidity, stable energy prices, and the manner in which the government navigates through the pandemic will be key to growth in FY22 & FY23.
Shriram Properties IPO issue subscribed 59% on Day 1
The initial public offering (IPO) of Shriram Properties, a south India-based real estate developer, was subscribed 59 percent on December 8, the first day of bidding.
Bids had come in for 1.73 crore equity shares against issue size of 2.93 crore equity shares. The portion set aside for retail investors was subscribed 3.23 times, while employees had bid for 14 percent of the shares reserved for them.
Non-institutional investors portion has subscribed by 3 percent, while qualified institutional buyers are yet to put in their bids for the offer.
Shishir Baijal, Chairman & Managing Director, Knight Frank India:
We welcome the decision of the MPC on maintaining status quo on the key policy rates as well as continuing its accommodative stance that has so far helped the Indian economy to beat the gloomy shadows of COVID – 19.
Most high frequency indicators have bounced back to pre-COVID levels; however, some slack in the economy remains. The low interest regime and adequate liquidity into the system is critical to further strengthen the domestic market.
Market at 1 PM
Benchmark indices extended the gains and trading near the day's high with Sensex rising above 800 points.
The Sensex was up 865.96 points or 1.50% at 58499.61, and the Nifty was up 247.80 points or 1.44% at 17424.50. About 2228 shares have advanced, 774 shares declined, and 103 shares are unchanged.
Rahul Bajoria, Chief India Economist, Barclays:
The RBI today paused the normalisation process that began in October and indicated it will maintain a growth-centric normalisation of policy.
However, the resilience of economic activity will keep the RBI on track to normalise its policy conditions in 2022.
Dishman Carbogen Amcis' clinical research study shows positive result for Calcifediol
Dishman Carbogen Amcis annonced the results of a new Clinical Research Study which shows that oral 25-Hydroxyvitamin D3 (Calcifediol) was able to correct vitamin D deficiency/insufficiency in patients with COVID-19 and that it resulted in improved immune function by increasing blood lymphocyte percentages.
Dishman Carbogen Amcis was quoting at Rs 247.80, up Rs 2.50, or 1.02 percent.
Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank:
The MPC expectedly maintained status quo on the policy rates and stance. The rhetoric too has remained focused on maintaining durable growth as long as inflation remains well in check.
We continue to expect RBI to fine tune the surplus liquidity to manage rates and consequently provide guidance on the operating target rate shifting closer to the Repo rate. We retain our base case of reverse repo rate hike in February.
Power Mech Projects bags orders worth Rs 454.2 crore
Power Mech Projects has received letter of intent for the bags orders worth Rs 454.2 crore. The orders included balance Civil and Architectural Works of the main plant area and various buildings, watch towers, patrol roads & drains outside BTG area of Unit 1&2 and structural works of Unit-2 at 2x660 MW Udangudi Super Critical Thermal Power Project from BHEL.
Civil, Structural & Architectural Works (including piling works) for FGD system area of 4X210 MW Stage-I and Common System, Kahalgaon STPP Bihar from BHEL.
Power Mech Projects was quoting at Rs 1,022.05, down Rs 1.70, or 0.17 percent.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
Conceding that "there is considerable uncertainty in the growth-inflation dynamics" the MPC has again decided in favour of growth by contnuing with accommodative monetary stance and status quo in rates.
More importantly, the guidance also is dovish with no indications of a rate hikes in the immediate future. The CPI inflation projection for Q3 and Q4 of FY22 at 5.1% and 5.7% respectively is an indication of RBI's belief that higher food inflation is temporary, since it is caused by crop damages during unseasonal rains.
Also, the central bank believes that lower crude prices and reduced petrol and diesel prices will "mitigate the cost push build up". In brief, a pro-growth policy and very positive from the market perspective.
Nifty Metal index added over 1 percent led by the Welspun Corp, Jindal Steel, Ratnamani Metals
Lakshmi Iyer, CIO – Debt & Head – Products, Kotak Mahindra Asset Management Company:
In what seemed like a close call, the RBI MPC chose to maintain status quo on key benchmark rates. No material changes to growth and inflation forecasts too. This suggests RBIs caution on the recent developments on the pandemic front. While 14 day VRRR amount has been increased in a graded manner, there seems to be no sense of urgency on RBI’s part to initiate any abrupt liquidity drain out measures.
Bond markets should draw comfort from this decision and continue to trade range bound. Global cues to dominate the rate moves going forward.
Shriram Properties IPO issue subscribed 51% on Day 1
The initial public offering (IPO) of Shriram Properties, a south India-based real estate developer, was subscribed 51 percent on December 8, the first day of bidding.
Bids had come in for 1.50 crore equity shares against issue size of 2.93 crore equity shares. The portion set aside for retail investors was subscribed 2.83 times, while employees had bid for 9 percent of the shares reserved for them.
Non-institutional investors and qualified institutional buyers were yet to put in their bids for the offer.
Market at 12 PM
Benchmark indices were trading near the day's high level with Nifty above 17400.
The Sensex was up 849.70 points or 1.47% at 58483.35, and the Nifty was up 243.90 points or 1.42% at 17420.60. About 2247 shares have advanced, 707 shares declined, and 113 shares are unchanged.
ABB India partners with Indore Smart City Development
ABB has partnered with Indore Smart City Development Limited (ISCDL) to deploy next-generation digital technology that enables the continuous supply of electricity to homes and businesses, company said in its release.
In the first phase of the collaboration, this technology has enabled more than 2300 connections to achieve 24/7 electricity supply with an efficient automatic response system (ARS) in case of power outages or disruption. ABB and ISCDL now plan to replicate the same model in other areas of the city and position Indore as the model for smart city projects across India, it added.
ABB India was quoting at Rs 2,096.10, up Rs 29.75, or 1.44 percent on the BSE.
BSE Smallcap index rose 1 percent led by the HCC, Gufic Biosciences, Kiri Industries
Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities:
The policy was as expected and cautious on the uncertainty due to the Omicron variant. Also, the RBI continued with the liquidity normalisation on expected lines without any explicit signal of liquidity withdrawal.
The inflation estimates are also lower than what the markets are expecting. Broadly, the policy is more dovish-than-expected possibly given the uncertainty from the new Covid variant.
If the Omicron variant is benign, we expect reverse repo hike of around 20 bps possible in the February policy and tad more aggressive liquidity withdrawal.
Nifty Auto Index gained 1 percent supported by the Balkrishna Industries, Bharat Forge, Tube Investments on India
Alembic Pharmaceuticals gets USFDA tentative approval for Selexipag Tablets
Alembic Pharmaceuticals has received tentative approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Selexipag Tablets, 200 mcg, 400 mcg, 600 mcg, 800 mcg, 1,400 mcg, and 1,600 mcg.
The tentatively approved ANDA is therapeutically equivalent to the reference listed drug product (RLD) Uptravi Tablets, 200 mcg, 400 mcg, 600 mcg, 800 mcg, 1,400 nicg, and 1,600 mcg, of Actelion Pharmaceuticals, Ltd. (Actelion).
Alembic Pharmaceuticals was quoting at Rs 808.20, up Rs 16.75, or 2.12 percent.
Rohit Poddar, Managing Director, Poddar Housing and Development:
The RBI’s decision to maintain the repo rate unchanged at 4%, point towards the road to economic recovery. An overall economic activity progressing towards retained inflation is a good news and showcases that the overall economic activity in the country has evolved.
While the rise in commodity prices has put upward pressure on input material costs, economy's low-interest rate has been a major contributor to the housing sector's recovery. When the real estate industry was just getting back on its feet, it was slammed by the new variant. The new COVID variant Omicron has again pushed the global and Indian economy into a state of uncertainty and nervousness.
In order to encourage consumption and investment in the real estate sector, consistent demand stimulant measures and favorable financing conditions would be required. Compare to last year, we are in a much better place owing to the proactive measures taken by the government which is resulting into achieving stability in the economic fundamentals of the country.
Shriram Properties IPO issue subscribed 45% on Day 1
The initial public offering (IPO) of Shriram Properties, a south India-based real estate developer, was subscribed 45 percent on December 8, the first day of bidding.
Bids had come in for 1.31 crore equity shares against issue size of 2.93 crore equity shares. The portion set aside for retail investors was subscribed 2.48 times, while employees had bid for 6 percent of the shares reserved for them.
Non-institutional investors and qualified institutional buyers were yet to put in their bids for the offer.
D.R.E Reddy, CEO and Managing Partner, CRCL LLP:
It is a welcome move to keep key interest rates unchanged, reiterating an accommodative stance on both rates and liquidity. Food inflation is still a matter of concern, even as fuel inflation has risen, and CPI inflation and fuel inflation, have remained elevated.
Continued policy support is a good stance for growth. The Indian economy has recovered from its greatest slump; we are now better prepared to deal with the upcoming Omicron variant.
