S Ranganathan, Head of Research at LKP Securities
Buoyed by Positive global cues, tech stocks together with auto stocks powered the Nifty closer to the 14500 mark. While we did see profit booking in metals during afternoon trade, the sheer momentum in IT & Auto kept the bulls in total control ahead of Q3 earnings.
Ajit Mishra, VP - Research, Religare Broking:
Markets started the week on a robust note led by positive global cues and strong earnings from IT behemoth TCS. Despite a tepid show by banking stocks, the Nifty managed to end with gains of 1% to close just shy of 14,500 levels. The broader markets underperformed wherein both Midcap and Smallcap ended flat. On the sector front, IT and Auto were the top outperformers in today’s trade whereas Metal, Capital Goods and Oil & Gas ended with losses.
The anticipation of better than expected earnings season combined with supportive global cues aided the upbeat start. Going forward, stock-specific volatility would remain high as earnings season would gain pace. Further, key macro data like CPI, WPI and IIP would also be actively tracked by investors. Amid all, we reiterate our positive yet cautious stance on markets and advise aligning positions according to the prevailing trend.
Rohit Singre, Senior Technical Analyst at LKP Securities:
Index opened a day with gap and managed to hold the bullish stream for a day and closed a day near good hurdle zone of 14500 with gains of nearly one percent forming a dragonfly kind of Doji candle pattern on the daily chart. Going forwards index has shifted its support to 14400-14300 zone if managed to hold above-said levels we may see the index to march towards 14550-14600 zone which is immediate hurdle on the higher side.
Vinod Nair, Head of Research at Geojit Financial services:
Improved outlook for 3rd quarter earnings along with strong global cues helped Sensex to breach 49,000 mark. The rally in the market was led by the IT sector backed by firm earnings results, however, small and mid-cap stocks were under pressure. Hopes of a new US stimulus to be unveiled this week created an upbeat movement in Wall Street while profit booking is seen in the European markets. This ongoing rally is being fueled by strong Q3 earnings preview, foreign fund inflow and optimism around Union Budget 2021.
Rupee Close
Indian rupee has recoveredfrom the lowbut stillendedlower at 73.38 per dollar, amid buyingsawin the domestic equity market.It opened 23 paise at 73.47 per dollar against previous close of 73.24 and traded in the range of 73.37-73.50.
Market Close
: Benchmark indices ended at fresh record closing highs with just shy away from the 14500 level.
At close, the Sensex was up 486.81 points or 1% at 49,269.32, and the Nifty was up 137.50 points or 0.96% at 14,484.80. About 1423 shares have advanced, 1672 shares declined, and 137 shares are unchanged.
Tata Motors, HCL Tech, Infosys, HDFC and Wipro were among major gainers on the Nifty, while losers were Tata Steel, Bajaj Finance, Bajaj Finserv, Reliance Industries and L&T
Among sectors, IT index rose 3 percent, Auto index added 2.6 percent and FMCG and Pharma indices rose 1 percent each, while metal and PSU Bank indices shed 1 percent.
Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities:
Rupee traded in a range manner between 73.30-73.50 with weak tone in early morning sessions as the dollar index takes supports near $89.50. But looking capital markets liquidity inflows rupee weakness was measured near 73.50 as it keeps taking support near 73.40-73.55 zone for now. Crude prices higher and Gold in softer tone its looks rupee can be in the range of 73.00-73.60 for some time before big announcement kicks in from the US on stimulus package.
Abhishek Bansal, Founder Chairman, Abans Group
Gold prices touched a near six-week low, and are currently trading near $1,837. U.S. Treasury yields have put pressure on the bullion prices. The US 10-year Treasury yield was trading firm above 1%, which helped the US dollar to reach a near three-week high.
Federal Reserve Vice Chair, Richard Clarida's comments on Friday, also pushed gold and silver prices lower, when he said that the U.S. economy was headed for an "impressive" year, helped by coronavirus vaccines, and the potential for larger government spending.
However, negative US nonfarm payroll data is likely to support bullion prices. The US economy unexpectedly shed 140,000 jobs in December, the first decline since April, while the jobless rate remained at 6.7%. U.S. President-elect, Joe Biden, on Friday, hinted at more direct pandemic relief to families, including $2,000 stimulus checks, after seeing the monthly NFP data.
According to the CFTC Commitments of Traders report for the week ended January 5, net long for gold futures gained +10,446 contracts, to 279,318 for the week. Speculative long positions jumped +8,134 contracts, while shorts dropped -2,312 contracts, this is positive for gold prices.
The worsening pandemic is curbing global economic growth, and is likely to keep gold prices firm. The overall number of global coronavirus cases has topped 86.37 million, while the deaths have surged to more than 1.87 million, according to the Johns Hopkins University.
Gold prices are likely to find support at the 200-days EMA at $1,830 per ounce, while key resistance is likely to be seen around the 50-days EMA at $1,878.
Nifty Pharma index rose 1 percent led by the Lupin, Cipla, Cadila Healthcare
J Kumar Infra bags project
J Kumar Infraprojects received Letter of Acceptance (LoA) from Gujarat Metro Rail Corporation (GMRC) Limited for "Design, construction and completion of Underground stations and tunnel from Surat Railway station to Chowk Bazar Ramp worth of Rs 8,66,00,00,000 and USD 1,03,11,647.
Gold Updates
Gold prices reversed course on Monday from a near six-week low touched earlier in the session, although a stronger dollar and higher U.S. Treasury yields capped bullion's gains.
Market Updates
Benchmark indices extended the gains and trading at day's high level.
At 14:57 IST, the Sensex was up 440.87 points or 0.90% at 49,223.38, and the Nifty was up 124 points or 0.86% at 14,471.30. About 1264 shares have advanced, 1611 shares declined, and 112 shares are unchanged.
Emkay on TCS
TCS reported strong revenue growth of 4.1% qoq/0.4% YoY in CC terms, beating our and consensus estimates. Despite salary hike impact, Adj. EBIT margin expanded 40bps QoQ on the back of revenue acceleration, operating efficiencies and forex.
It raise FY21/FY22/FY23E EPS by 2.8%/4.0%/4.6%, factoring in Q3 beat. It believe that TCS is well poised to benefits from acceleration in cloud adoptions and digital transformation opportunities, considering its end-to-end capabilities. However, valuations are rich. Maintain hold with a target price of Rs 3,150 (earlier Rs 3,000) at 26x Mar’23E earnings.
Rupee Updates
Indian rupee has recovered some of the losses but still trading lower at 73.40 per dollar, amid buying seen in the domestic equity market. It opened 23 paise at 73.47 per dollar against previous close of 73.24.
Abhishek Bansal, Founder Chairman, Abans Group
Crude oil prices have rallied nearly 7% in the last week, after Saudi announced surprises cuts. The positive trend is likely to continue, following a prospect for additional stimulus, after US December nonfarm payrolls unexpectedly declined.
Heating demand in China, due to the cold winter, is likely to provide support to energy prices. Nine Chinese northern provincial power grids have reached record-high loads, as heating demand surged due to the extreme cold weather.
Meanwhile, according to the CFTC Commitments of Traders report for the week ended January 5, net long for crude oil futures gained +6,918 contracts to 518,649 for the week. Speculative long positions jumped +28,438 contracts, while shorts rose +21,520 contracts. The data is positive for crude oil prices.
Baker Hughes reported on Friday that the number of oil rigs in the United States rose by 8, to 275, well above August's 15-year low of 172 rigs. An increase in US oil production is likely to keep a lid on oil prices.
WTI Crude oil prices for the February expiry contract are likely to find support near the 10-days EMA at $50.49 per barrel, and the 20-days EMA at $49.07 per barrel. Meanwhile, critical resistance is seen around $52.60 per barrel and $55.92 per barrel.
Dr Reddy's launches Febuxostat Tablets in the US market:
Company announced the launch of Febuxostat Tablets, a therapeutic equivalent generic version of Uloric (Febuxostat) Tablets approved by USFDA.
Most active stocks on NSE in terms of volumes
Passenger vehicle retail sales increase 24% in December: FADA
Automobile dealers' body FADA on Monday said passenger vehicle (PV) retail sales in December witnessed a year-on-year increase of 23.99 percent to 2,71,249 units. According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,270 out of the 1,477 regional transport offices (RTOs), PV sales stood at 2,18,775 units in December 2019.
Adani Green commissions 25 MW solar plant in Chitrakoot:
Adani Green Energy commissioned a 25 MW solar power plant in Chitrakoot, Uttar Pradesh. This plant has a power purchase agreement with Noida Power Company Ltd (NPCL) at Rs 3.08/KWh. With this commissioning, AGEL’s total operational renewable capacity has grown to 2,975 MW.
GNA Axles Q3:
Consolidated net profit at Rs 26.6 crore against Rs 7.6 crore (YoY). Consolidated revenue was up 28.9 percent at Rs 276 crore against Rs 214.1 crore (YoY). Consolidated EBITDA at Rs 48.1 crore against Rs 24 crore (YoY). Consolidated EBITDA margin at 17.4 percent against 11.2 percent (YoY).
BHEL bags order
Bharat Heavy Electricals (BHEL) has secured a prestigious order for a steam and power plant from National Aluminium Company Limited (NALCO). Valued at around Rs 450 crore, the order has been placed on BHEL by NALCO for its 5 Stream Alumina Refinery Expansion Project at Damanjodi, Odisha.
Nifty Media index fell 1 percent dragged by the ZEE, Inox Leisure, Jagran Prakashan
Crude Updates
Oil prices fell on Monday, hit by renewed concerns about global fuel demand amid tough coronavirus lockdowns in Europe and new curbs on movement in China, the world’s second-largest oil user, where infections jumped.
Sharekhan on Vinati Organics
Vinati Organics’ dominant global market share in ATBS/IBB segments, a pipeline of 12 new products in R&D phase and massive export opportunities in specialty chemical sector (amid China plus one strategy by global customers) would drive sustained long-term high double-digit earnings growth. Moreover, concerns on ATBS demand and margins are also expected to recede as strong global economic recovery has led to sharp rise in oil price.
Upgraded rating on Vinati Organics to buy (from hold) with a revised price target of Rs. 1,550. The stock is trading at 35.6x FY2022E EPS and 29.9x FY2023E EPS.
TVS Motor shareholding
LIC raised stake in the company to 6.46% in Q3 from 4.87% in Q2. Also, FPIs raised stake to 11.15% in Q3 from 10.64% in Q2.
Nifty FMCG index added 1 percent supported by the Godrej Consumer Products, HUL, Jubilant FoodWorks:
Ujaas Energy hits upper circuit
Ujaas Energy share price hit 5 percent upper circuit on January 11 after Alpha Leon Enterprises LLP picked up a stake in the company. According to bulk deal data on NSE, Alpha Leon Enterprises LLP bought 13,51,280 equity shares in the company at Rs 3.85 apiece.
Market Updates
Benchmark indices are trading higher with Nifty above 14400.
At 11:35 IST, the Sensex was up 328.90 points or 0.67% at 49111.41, and the Nifty was up 82 points or 0.57% at 14429.30. About 1147 shares have advanced, 1552 shares declined, and 138 shares are unchanged.
Anil Kumar Bhansali, Head- Treasury, Finrex Treasury Advisors:
USD-INR to open around 73.43 and stay in the range of 73.30/73.60 as dollar index moves up. Sell the upticks near to 73.60 for exporters while buy the downside towards 73.30 for importers.
Trident December business update:
Bath linen production up 36 percent, bed linen up 32 percent and yarn up 2 percent (YoY). Paper production down 5 percent and chemicals down 40 percent (YoY).
Sadbhav Engineering bags Gujarat Metro Rail project:
The Company has received Letter of Acceptance (LOA) from Gujarat Metro Rail project for Metro Rail Project for a contract value of Rs 779.73 crore.
Motilal Oswal of TCS:
We believe IT services has entered into a technology upcycle, led by cloud- and data-driven deals coming onto the market. Given TCS’ size, capabilities, and portfolio stretch, it is rightly positioned to leverage expected industry growth. Additionally, TCS has consistently maintained its market leadership and shown best-in-class execution. This gives the company continued room to increase its margins, along with demonstrating industry-leading return ratios.
We increase our EPS estimate for FY21/FY22/FY23E by 3 percent/4 percent/6 percent on account of a strong beat in Q3. Our target implies 25x FY23E EPS on our revised estimates. While we remain positive on the company, we remain neutral given the rich multiples.
Buzzing Stock
Bharti Airtel share price gained 2 percent. The company in an exchange filing said that it has appointed Pradipt Kapoor as its Chief Information Officer (CIO). The telecom major received almost all regulatory approvals required to raise foreign direct investment (FDI) in its downstream companies. According to sources, Bharti Airtel has got approval to raise FDI in its payments bank from the Reserve Bank of India (RBI) and the Foreign Investment Promotion Board (FIFB), the nodal agency.
Himanshu Nayyar, Lead Analyst – Institutional Equities, Yes Securities:
After the recent outperformance, the stock is currently trading at 68x FY23E P/E and 45x EV/EBITDA. While we turned positive on the stock around Rs 2000 levels citing favorable multiples, increasing traction in online business and strong balance sheet advantages, those advantages seem to be broadly captured in current valuations around Rs 3000 levels.
We therefore, expect a period of consolidation in the stock with investors waiting to see the impact of aggressive online competition in the grocery space. We expect the management to aggressively expand both its offline and online footprint over the next two years utilizing its strong balance sheet, which should provide strong earnings visibility and thereby sustain these premium multiples.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments:
We have achieved our next level of target and resistance which is 14,450. If we can keep above this, the next target should be 14,600. Since we are in unchartered territory, the target levels are getting smaller. We have new support for the Nifty between 14,200-14,250. Intraday dips can be utilized to enter the index for higher targets. Stops must be placed and strict caution should be practiced.
Nifty Metal index shed 1 percent dragged by the Hindustan Copper, Hindustan Zinc, SAIL:
Rupee Opens
Indian rupeeslipped in the early trade on Monday. It opened 23paiseat 73.47 per dollar against previous close of 73.24, amid buying seen in the domestic equity market.
ICICIdirect:
Volatility remained high in the USD-INR pair last week. However, looking at the writing in OTM strike Calls, we feel upsides could be limited.
The dollar-rupee January contract on the NSE was at Rs 73.39 in the last session. The open interest fell 0.85% of the January series contracts.
Gold Updates
Gold prices touched a near six-week low on Monday, extending losses from the previous session, as a stronger dollar and higher U.S. Treasury yields pressured the non-yielding bullion.
Results Today
Bheema Cements, Dolat Investments, GNA Axles, Netlink Solutions, Nidhi Granites, Venmax Drugs and Pharmaceuticals and Zicom Electronic Security Systems will announce their quarterly earnings on January 11.
Nifty IT index added 2 percent led by the Infosys, Wipro, HCL Tech:
Gainers and Losers on the BSE Sensex:
Market Opens:
Indian indices opened on January 11 with Nifty above 14,400 on the back of positive global cues.
At 09:16 IST, the Sensex was up 329.33 points or 0.68% at 49,111.84, and the Nifty was up 83.90 points or 0.58% at 14,431.20. About 1270 shares have advanced, 307 shares declined, and 86 shares are unchanged.
ICICIdirect:
Indian markets are likely to open gap up on the back of strong global cues amid additional fiscal stimulus in the US along with optimism on the earnings season. However, global news flows and sector specific developments will be key monitorables. US markets ended higher amid optimism on additional fiscal stimulus.
Market at pre-open
: Benchmark indices are trading higher in the pre-opening session with Nifty above 14,500.
At 09:02 IST, the Sensex was up 384.98 points or 0.79% at 49,167.49, and the Nifty was up 224.20 points or 1.56% at 14,571.50.
NHAI might target raising Rs 65,000 crore in 2021-22: Report
The National Highways Authority of India (NHAI) is planning to raise around Rs 65,000 crore in 2021-22, similar to the target set in the current fiscal year. The highways building authority might rely on models such as infrastructure investment trust (InvIT) and toll-operate-transfer, among others, to raise capital, The Economic Times reported.
"The NHAI board has approved the external funding plan; next year we will be looking to raise around Rs 65,000 crore from the markets," an official told the paper.
