The domestic equity market fell over 1 per cent on Thursday as investors booked profit amid weak global cues. Among headline indices, the S&P BSE Sensex ended at 43,600, down 580 points, or 1.31 per cent while NSE's Nifty settled at 12,772, down 167 points, or 1.29 per cent.
HDFC Bank, HDFC, ICICI Bank, Axis Bank, and Infosys were the major contributors to the Sensex's fall. In the intra-day session, Sensex hit a fresh high of 44,230 before retreating later.
Sectorally, barring Nifty FMCG, and Nifty Media, all other sectoral indices ended in the red. Nifty Bank fell 2.85 per cent to 28,903 levels with all the 12 constituents declining. Nifty FMCG, on the other hand, rose 0.43 per cent to 31,085 levels.
In the broader market, the S&P BSE MidCap index dropped 0.65 per cent to 16,238 levels while the S&P BSE SmallCap index ended at 16,059, up 0.03 per cent.
World stocks eased for the third day in a row and oil fell on Thursday tracking overnight weakness in Asia and Wall Street as widening Covid-19 restrictions weighed on market sentiment.
Positive news about potential vaccines had helped push the MSCI World Index to a record high earlier in the week, only to see investors pull back as a host of countries announced record infection rates and tougher lockdowns.
In Europe, too, stocks opened lower. The pan-European STOXX 600 fell 0.7 per cent at the time of writing this report, with growth-sensitive oil and gas, banking, and mining sectors leading early losses.
MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services
"The increasing virus infections raised fears of additional restrictions and considering its impact on global economic activity, global market sentiments turned negative. This was in spite of the optimism surrounding the advanced stages of vaccine development. Indian markets also witnessed profit booking from recent highs, as investors turned cautious. Financials led the losses while defensive sectors such as FMCG and Pharma fared better. The positivity in auto sales numbers continued and could be an indicator of economic recovery. However, increasing virus infections, which are again being reported in some parts of India, can offset this nascent recovery. We can expect short-term volatility in the markets and investors are advised to remain cautious."
MARKET AT CLOSE | Losers and gainers on the S&P BSE Sensex
Nifty PSU Bank slips over 3%
The S&P BSE Sensex slipped 580 points, or 1.31 per cent to settle at 43,600 while NSE's Nifty ended at 12,772, down 167 points, or 1.29 per cent.
BROKERAGE VIEW | ICICI Securities on Mahindra Lifespace Developers
RATING: HOLD | TARGET PRICE: Rs 300
We like MLD given its strong parentage, the management’s focus on expanding its overall scale of operation and a comfortable balance sheet. The new land purchases could enable it to scale up its residential business, which otherwise saw lethargic movement. However, we would await fructification of such deals and traction thereof, before turning constructive. Hence, we maintain our HOLD rating on MLD with a target price of Rs 300.
MARKET CHECK | Sensex slips nearly 600 pts
Stressed debt across sectors falls 37% in Q2 to Rs 15 trn: Credit Suisse
The share of debt with loss-making companies was also down to 23 per cent as compared to 28 – 30 per cent pre-Covid-19. A large part of this has been on account of the fall in the stressed debt levels in the metal (Tata Steel & SAIL) and telecom (Bharti Airtel) sectors, Credit Suisse said. READ MORE
Snowman Logistics zooms 77% in 8 days on healthy demand prospects
At 02:30 pm, Snowman Logistics was trading 7 per cent higher at Rs 61.50 as compared to a 1.3 per cent-decline in the S&P BSE Sensex. Trading volumes on the counter more-than-doubled with a combined 8.04 million shares changing hands on the NSE and BSE till the time of writing of this report. READ MORE
Dow Jones Futures slip over 100 pts
Nifty Bank index tumbles over 850 pts
Interest Waiver Case :: SC defers hearing till next week
>> SC directs for Power Gencos, other petitioners to submit suggestions before RBI counsels.
>> SC directs Centre, RBI to reply to suggestions put forth before the SC & directs for case to be listed next week
NEWS ALERT :: Esker, Birlasoft tie-up to automate Procure-to-Pay and Order-to-Cash with Artificial Intelligence
SpiceJet, IndiGo: Aviation stocks look set for a further rally, charts show
Investors have turned to the beaten-down aviation stocks ever since Pfizer and then Moderna Inc said their Covid-19 vaccine candidates have shown over 90 per cent efficacy. Shares of SpiceJet and IndiGo have outperformed the markets this month as investors were seen rotating out of 2020 winners such as IT and pharma and buying into sectors that were badly bruised because of the Covid-19 pandemic. READ MORE
Sensex at day's low
DHFL hits 5% upper circuit for third straight day; stock nears 52-week high
In the past one month, stock of the housing finance company has gained 46 per cent as against a 9 per cent-rise in the S&P BSE Sensex. It was quoting close to its 52-week high level of Rs 23.30 touched on November 25, 2019. The stock had hit a record high of Rs 680 in September 2018 and had touched a multi-year low of Rs 8.40 on April 2020. READ MORE
BROKERAGE VIEW | Emkay Global Financial Services on Wipro
RATING: HOLD | TARGET PRICE: Rs 360
We prefer to wait to see any signs of sustainable operating performance improvement before taking any constructive view on the stock, particularly as in the past, the company went through multiple restructurings but failed to solve client mining and revenue leakage issues. We maintain Hold on the stock with a TP of Rs 360 at 18x Sept’22E earnings.
BSE Utilities up over 2.5%
BUZZING STOCK | BEL surges over 9%
Q&A :: We continue to prefer medium-to-long end bonds, says Saurabh Bhatia, DSP Inv Mgr
Over the past few months bond markets have been trading in a relatively narrow range. Shorter end of the yield curve has immensely benefited courtesy sustenance of the liquidity surplus. Super surplus liquidity coupled with held to maturity (HTM)-enabled Targeted Long-Term Repo Operations (TLTRO) has enabled the credit spreads to remain compressed, especially in the shorter-end of the curve. READ MORE
Sensex Heatmap at this hour
Bollinger Band shows 37 mid, small-cap stocks may surge over 25%
One of the momentum indicators used in technical analysis of stocks is Bollinger Band. Bollinger Band (BB) helps to ascertain the volatility with the support of standard deviation.
Herein, the upper band defines the higher range that a stock can deviate from the mean and vice versa. Besides ascertaining the price range and volatility, Bollinger Band also reflects the breakout in the form of “Expansion” and “Contraction” formation. READ MORE
Titan gains 4%, nears 52-wk high on healthy business in the festive season
"The jewellery business witnessed a mid-teens growth (around 15 per cent) for the 30-day festive season starting from Dussehra till Diwali over the corresponding period last year, with a decent recovery in studded jewellery sales," Titan said in the business update.
The watches and wearables business also did quite well in the festive season with recovery close to last year's levels. Eyewear business has also witnessed good traction, it said. READ MORE
Tata Chemicals rallies 9%, hits record high in a range-bound market
Shares of Tata Chemicals hit a record high of Rs 357, up 9 per cent on the BSE in the intra-day trade on Thursday in an otherwise range-bound market. The stock of the Tata Group commodity chemicals company surpassed its previous high of Rs 345.80, touched on August 25, 2020. In comparison, the S&P BSE Sensex was down 0.05 per cent at 44,159 points. The counter has seen huge activities with trading volumes surging more than four-fold today. A combined 7.16 million shares had changed hands on the counter on the NSE and BSE till 11:33 am. READ MORE
BROKERAGE VIEW | HDFC Securities on Ahluwalia Contracts
RATING: BUY | TARGET PRICE: Rs 382
Gross debt increased marginally to Rs 440mn from Rs 430mnQoQ. With cash balance at Rs 2.2bn, AHLU remains a net cash company. We have tweaked our FY21/FY22 estimates and maintain BUY on AHLU with a slightly increased target price of Rs 382 (13x Sep-22E EPS), given its robust order book, strong balance sheet, and better RoE/RoCE than peers.
BROKERAGE VIEW | Prabhudas Lilladher on Wipro
RATING: BUY | TARGET PRICE: Rs 415
New CEO believes in sustainable margin led growth driven by structural margin levers and pricing power derived from investing in next gen capabilities. We value Wipro on Sep-22 earnings of 20X to arrive at unchanged TP of INR 415. Wipro is currently trading at 17.5X/15.9X for FY22/23E earnings of Rs 19.8/21.7 respectively with EPS CAGR of ~14% for FY21-23 respectively. Maintain Buy.
Top gainers on the BSE at this hour
Nifty Realty index surges nearly 3%; DLF, Prestige Estates advance 5% each
Shares of real estate companies were in focus with the Nifty Realty index gaining nearly 3 per cent on the National Stock Exchange (NSE) on Thursday on the expectation of revival of the real estate sector. DLF and Prestige Estates Projects rallied 5 per cent each and Godrej Properties gained 4 per cent, while Sobha, Indiabulls Real Estate and Brigade Enterprises were up in the range of 2 per cent to 3 per cent on the NSE. READ MORE
TECH VIEW | Here's why pivot points are a must for any profitable trading model
Pivot points are the price levels that help traders determine directional movement and potential support/resistance levels of a stock/index. These are calculated considering the open, high, low, and close of the previous sessions. Market participants consider pivot levels as turning points, besides looking at support and resistance. READ MORE
NEWS ALERT :: Moody's increases India FY22 GDP growth forecast to 10.8%
>> Recent fiscal package positive for India's growth
>> Medium-term growth could remain around 6%
Nifty Metal index up around 2%
Coming out of the woods: Grasim's core biz sees significant recovery in Q2
Grasim Industries' performance for the September quarter (Q2) marked a strong rebound after significant weakness in lockdown-impacted June quarter (Q1). Capacity utilisations rebounded led by rising demand, which in turn is helping realisation too. Analysts feel, the bottom of business cycle is behind. READ MORE
Sensex turns positive
SpiceJet extends rally, soars 14% as Boeing 737 Max gets US FAA clearance
At 9:54 am, the stock was ruling 10 per cent higher at Rs 73 on the BSE, as 0.08 per cent dip in the benchmark S&P BSE Sensex index at 44,146. With today's rally, the stock of the airline has surged 38.4 per cent on the BSE compared with 1.6 per cent gain in the Sensex index in the past four trading sessions READ MORE
Hero MotoCorp rallies 5% on good retail sales in festive season
Despite the severe disruptions on account of the Covid-19 this year, the good retail off-take during the 32-day festival period - spread between the first day of Navratra and the concluding day after Bhai Duj – was 98 per cent of the festive season volumes sold by the Company in the previous year (2019) and 103 per cent compared to the same period in 2018, the company said. READ MORE
BSE Smallcap index trades over 0.7% higher
TCS fixes November 28 as record date for share buyback; stock gains 2%
Shares of Tata Consultancy Services (TCS) were up 2 per cent to Rs 2,678.60 on the BSE in the early morning trade on Thursday after the company fixed November 28, 2020, as the record date for the purpose of determining the entitlement and the names of the equity shareholders who shall be eligible to participate in the buyback. READ MORE
Nestle trades in the green in a weak market
>> The country’s largest food company, Nestlé India, is planning to avail the Union government’s production-linked incentive (PLI) scheme to boost exports. The first food major to express interest in the PLI plan is awaiting the finer details of the flagship scheme.
BPCL up 2%
>> Vedanta Group on Wednesday confirmed putting in a preliminary expression of interest (EoI) for buying government's stake in Bharat Petroleum Corp Ltd (BPCL).
BUZZING STOCK | Hero MotoCorp gains over 4%
BUZZING STOCK | SpiceJet continues to rally, surges another 12%
FIRST TRADE | Nifty Auto, Nifty IT trade in the green
FIRST TRADE | Losers and gainers on the S&P BSE Sensex
At 09:17 AM, the S&P BSE Sensex was trading 234 points, or 0.53 per cent lower at 43,946 levels while NSE's Nifty was trading at 12,839.50, down 99 points, or 0.76 per cent.
NEWS ALERT :: Dr Reddy's Lab begins investigation into an anonymous complaint
>> The complaint alleges that healthcare professionals in Ukraine & other countries were provided with improper benefits in violation of US laws.
>> Investigation is being carried out by a US law firm
Top gainers and losers on the S&P BSE Sensex at Pre-open
Markets at Pre-open
Markets at Pre-open
Stocks to watch today
Wipro: IT services firm Wipro on Wednesday said it has fixed December 11 as the record date for its up to Rs 9,500 crore share buyback programme. Its Board of Directors and shareholders have already approved its proposal to buyback up to 23,75,00,000 equity shares of the company at Rs 400 per share, it added.
TCS: India's largest IT services firm Tata Consultancy Services (TCS) on Wednesday said its shareholders have approved its up to Rs 16,000 crore share buyback plan. Last month, TCS' board of directors had approved a proposal to buy back up to 5,33,33,333 equity shares of the company for an aggregate amount of up to Rs 16,000 crore.
SpiceJet: The Directorate General of Civil Aviation (DGCA) will examine the Federal Aviation Administration’s (FAA’s) order rescinding the ban on Boeing 737 MAX aircraft and will take appropriate action on the issue. SpiceJet is the only Boeing 737 MAX operator in India, with 13 aircraft of the type in its fleet and a total of 205 planes on order. READ MORE
BROKERAGE VIEW :: MOFSL on Gujarat State Petronet
CMP: Rs 192 | TP: Rs 300 (+57) | Reco: Buy
>> Over the last five years, EBITDA grew ~11% CAGR, in line with volumes CAGR of ~10% (to ~38msmcmd in FY20 from 23mmscmd in FY15) despite average implied tariff of Rs 1,215 lower than ~INR1,240 in 2QFY21.
>> Available LNG regas capacity is expected to jump by 54% to 40mmtpa over the next 2-3 years in Gujarat from the current 24mmtpa, presenting a huge volume growth opportunity for GUJS.
>> At a 25% holding company discount, the 54% stake in GUJGA provides a valuation of Rs 152/share for GUJS (i.e. ~80% of CMP), thus implying a mere 2x Sep’22E P/E for the standalone business.
>> The value of GUJS standalone business is the lowest in its stock price history, despite record high volumes, thus presenting an excellent investment opportunity. Reiterate Buy.
>> We value GUJS at 8x Sep’22E standalone EPS to arrive at our target price of R300.
BROKERAGE VIEW :: MOFSL on SBI Life
CMP: Rs 858 | TP: Rs 1,050 (+22%) | Reco: Buy
>> SBILIFE posted a rebound in business premium with individual APE growing at 14% YoY in Oct’20 after reporting a consecutive decline for the past many months. During 2QFY21, the ULIP business declined 13% YoY but grew 166% QoQ from the troughs seen earlier. Protection growth remains robust both in individual and group segments and is expected it to remain strong. The revival in credit growth, with parent SBIN indicating that the retail disbursement run-rate is now higher than pre-Covid levels, further augurs well for SBILIFE.
>> The company reported an improvement in persistency rate across cohorts, with the highest improvement seen in the 61st month (up 340bp YoY to ~61% in 1HFY21). Persistency in the Protection business remains strong. The ULIP business is showing signs of a recovery on improved capital market performance.
>> SBILIFE is also looking to optimize its product mix in the Protection/Annuity business. This should help VNB margin to further expand to ~22% by FY23E, which
should drive 19% CAGR in VNB over FY20-23E. We expect operating RoEV to remain steady ~18%, while EV clocks 17% CAGR over FY20-23E. Maintain Buy with TP of Rs 1,050/share (2.7x Sep’22E EV).
BROKERAGE VIEW :: MOFSL on Wipro
CMP: Rs 345 | TP: Rs 385 (+12%) | Reco: Neutral
>> The key focus of Wipro’s Analyst Day was on operational changes and the steps undertaken to accelerate revenue growth. The company expects the shift to four Strategic Market Units (SMUs; focused on sales) and two Global Business Lines (GBLs; focused on delivery) to help streamline operations and increase its focus outside of the US. It is also de-prioritizing some sectors (Hospitality, Airlines, Public Sector, etc.) and regions (Asia, Africa, and South America – 2-3% of revenues) to increase the focus on high-growth businesses.
>> In our view, streamlining P&L to four SMUs (v/s 20 P&Ls earlier) should free up internal resources to invest in growth initiatives, which is positive. In addition, the creation of the global account executive (GAE) role would help WPRO better address the long-standing issue in client mining and retention.
>> We are less sure of the utility of delineating clients by region (unlike by industry at peers) as this could impact its ability to tap into global accounts and seamlessly utilize sectoral strength across regions.
>> With the new strategy operationalizing from Jan’21, any near-term impact would be closely monitored and could impact the stock’s valuation.
Nifty outlook by Gaurav Garg of CapitalVia Research
As per weekly options data, heavy put writing on lower strikes ranging from 12,600 to 12,900 is witnessed which shows Nifty might face support in the zone of 12,800 as maximum put open interest (OI) is placed here for weekly expiry. We can witness a short-covering move along with the addition of a fresh position only if Nifty breaches 13,000. Therefore, traders should try to create a long position keeping a close eye on 12,800. READ MORE
FII/FPI & DII trading activity on NSE, BSE and MSEI
Oil prices slip on surging Covid-19 cases
>> US crude futures fell in early trade on Thursday, giving up some of gains from the previous day as surging Covid-19 cases and widening lockdowns raised fears over fuel demand, offsetting further upbeat vaccine news.
>> US West Texas Intermediate (WTI) crude CLc1 futures were down 39 cents, or 0.9%, to $41.43 a barrel, after gaining nearly 1% on Wednesday. Brent crude LCOc1 was yet to trade, having risen 1.4% on Wednesday.
SGX Nifty hints at gap-down start
>> At 8:20 am, the index was at 12,880 level, down 114 points or 0.88 per cent.
Asia stocks take a breather, bonds bet on Fed action
Wall Street dives as shutdown worries overshadow vaccine hopes
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