Markets end volatile day flat, Nifty dips below 10150 ahead of RBI policy

In a volatile trading session, the benchmark indices pared most of their intraday gains to settle flat as investors remained cautious ahead of the RBI monetary policy meeting due on Tuesday. 

Although the central bank is widely expected to keep rates on hold, investors will watch out for any hints of a cut in its policy statement.

Infosys remained in focus as it rallied nearly 4% and was the top gainer on Sensex after the IT giant on Saturday named Salil S Parekh, a member on the board of its global rival Capgemini, as its new chief executive officer (CEO) and managing director (MD), ending a three-month-long search. 

Overseas, Asian markets were listless as traders marked the passage of a US Senate tax bill over the weekend, a move that raises the risk of more aggressive rate hikes in the world’s largest economy.


Jayant Manglik, President Retail Sales, Religare Securities
In another volatile trade, the benchmark indices hovered in a narrow range ahead of the RBI policy meet. However, the broader market indices saw selling pressure on account of profit taking, as investors remained cautious on the outcome of the monetary policy. FMCG, auto and banking indices were among the losing indices. IT index gained the most led by surge in Infosys after appointment of new CEO in the company.
The next two days would be important as RBI will announce its policy decision on December 06. We expect RBI to maintain status quo citing incoming data dependency over the next few months, as a firm inflation trajectory limits the room for further monetary easing for now. We advise traders to hedge their positions until RBI policy decision.
Broader markets underperform
The BSE Smallcap index shed 0.5%, while the BSE Midcap index remained little changed. 
Sensex heatmap at close

Source: BSE

Markets at close

The S&P BSE Sensex ended at 32,869, up 36 points, while the broader Nifty50 settled at 10,127, up 6 points. 

Index Current Pt. Change % Change
S&P BSE SENSEX 32,869.72 +36.78 +0.11
S&P BSE SENSEX 50 10,573.73 +10.96 +0.10
S&P BSE SENSEX Next 50 35,033.32 -64.80 -0.18
S&P BSE 100 10,599.23 +6.01 +0.06
S&P BSE Bharat 22 Index 3,675.25 -2.18 -0.06

Source: BSE
63 Moons hits lower circuit 
63 Moons Technologies (formerly Financial Technologies) was locked in lower circuit of 5% at Rs 131, down 7% from intra-day high on the BSE, after the company said the Hon'ble Bombay High Court has dismissed its writ petition on the National Spot Exchange Limited (NSEL) merger.
A combined 462,581 shares changed hands and there were pending sell orders for 1.1 million shares on the NSE and BSE till 02:58 PM. READ FULL REPORT
Markets check

At 3:05 pm, the S&P BSE Sensex was trading at 32,866, up 34 points, while the broader Nifty50 was ruling at 10,125, up 54 points. 

Index Current Pt. Change % Change
S&P BSE SENSEX 32,867.53 +34.59 +0.11
S&P BSE SENSEX 50 10,571.81 +9.04 +0.09
S&P BSE SENSEX Next 50 34,978.60 -119.52 -0.34
S&P BSE 100 10,594.95 +1.73 +0.02
S&P BSE Bharat 22 Index 3,673.37 -4.06 -0.11

Source: BSE
Auto ancillary shares in focus
Shares of auto ancillary companies, mainly mid and small-sized firms, were in focus and traded higher by up to 15% on the back of positive corporate announcements.
Setco Automotive hit a 52-week high of Rs 48.40, up 15% on the BSE in intra-day trade on back of heavy volumes. The company reported nearly 14-fold jump in its standalone net profit of Rs 13.76 crore in September quarter (Q2FY18), on back of healthy operational performance. It had profit of around Rs 1 crore in the same quarter last year and a net loss of Rs 11.89 crore in June 2017 quarter. READ MORE
KNR Constructions, Sadbhav Engineering among road infra space's top picks
The infrastructure sector remains in a sweet spot looking at the government's focus on ramping up execution, increasing project awards, and construction activities, especially in the road segment. The end-October announcement on the Bharatmala programme has set the ball rolling further now. Analysts at Motilal Oswal Securities (MOSL) say that for the past three years, the government has been ironing out issues hampering the road sector. It has cleared bottlenecks through suitable policy changes and early signs of revival in the sector have been evident for some time now. Players with strong balance sheets, execution track record, and robust asset portfolio would be the key beneficiaries. READ MORE
Interview of the Day
After a sharp run-up in the mid-cap and small-cap stocks thus far in 2017, Hong Kong-based Mark Matthews, head of research for Asia, Julius Baer Group, tells Business Standrad he would steer clear of these two segments for now.

Mark Matthews, Head of Research for Asia, Julius Baer Group

Axis Securities on Tata Motors
CV volume/ pricing outlook: Management indicated infra push and recovery in economy shall drive MHCV volumes for FY18 and beyond. Its SCR technology has been well accepted and should drive market share gains.
We shift focus to volume growth given a strong model cycle – Velar ramp-up, mid-cycle refresh RR/RR Sport (with plug in hybrid variants), and E-Pace over next 12-15 months.
Hedging losses: Based on its hedge book, there is an additional GBP 1.1 bn worth of realized losses in the balance sheet (assuming currency stays where it is), of which GBP 800 mn would be realized over the next 12 months. The management expects hedging losses to start coming down from Q4FY18.
Target EBIT margin: The company plans to maintain EBIT margin in the range of 8-10% (5% this quarter), as positive operating leverage and lower realized forex losses improve the margin.
We maintain a BUY with a target of Rs 443.
Infosys rally to be short-lived 

Infosys rallied 3% to Rs 988 levels on the Bombay Stock Exchange (BSE) in intra-day trade on Monday, after the its board appointed Salil S. Parekh as its chief executive officer and managing director (CEO & MD) for a period of five years effective January 2, 2018.
While markets gave a thumbs-up to the development, analysts say Infosys still has a long road to recovery. Parekh, they say, has his task cut out in terms of turning around the business at a time when the information technology (IT) sector is undergoing a transformation. That said, the appointment does end the market’s anxiety as to who the new CEO, but the strategies he adopts will take time to reflect on the financials, they say. READ FULL REPORT
Sensex heatmap in noon trade

Source: BSE

Tata Motors picks momentum on strong sales in Nov
Tata Motors gained nearly 2% on BSE after the company reported strong sales in November.
Tata Motors said that its commercial and passenger vehicles sales in domestic market grew by 58% to 52,464 units in November 2017 over November 2016, due to growing demand across segments, introduction of new products and strong customer initiatives. READ MORE
Buzzing stock
Jubilant Life Sciences was up 5% to Rs 729 on the BSE in early noon deals after media report suggested that the company’s pesticide project in Gujarat got the green panel nod.
The stock of an integrated global pharmaceutical and life sciences company has rallied 14% in past three trading sessions. READ MORE

Markets check

At 12:00 pm, the S&P BSE Sensex was trading at 32,924, up 92 points, while the broader Nifty50 was ruling at 10,148, up 27 points. 

Index Current Pt. Change % Change
S&P BSE SENSEX 32,928.03 +95.09 +0.29
S&P BSE SENSEX 50 10,592.91 +30.14 +0.29
S&P BSE SENSEX Next 50 35,041.26 -56.86 -0.16
S&P BSE 100 10,615.72 +22.50 +0.21
S&P BSE Bharat 22 Index 3,680.83 +3.40 +0.09

Source: BSE
New CEO faces twin tests at Infosys 
After well over a decade with Capgemini, Salil Parekh is returning home to head unsettled Indian software services firm Infosys, where he will seek to replicate his success in notching up record growth at the divisions he ran.   
Alongside, Parekh has to help the bellwether of India's $154 billion software services sector recover from a nasty public spat between its board and founders that led to the dramatic exit of the previous CEO, Vishal Sikka, in August. READ FULL REPORT

Salil Parekh, Infosys

Lupin, Glenmark Pharma hit 52-week lows 
Shares of two pharmaceutical companies Lupin (Rs 810) and Glenmark Pharmaceuticals (Rs 550) hit their respective 52-week lows on the BSE in intra-day trade in an otherwise firm market.
In the past one month, the market price of Lupin fell by 23%, while of Glenmark Pharmaceuticals by 12% on account of negative news flow from the US health regulator. By comparison, the S&P BSE Sensex was down 2% during the same period. READ MORE
Street signs: LIC pares holdings in PSBs
India’s largest institutional investor Life Insurance Corporation (LIC) slashed its holdings in several public sector banks (PSBs) including State Bank of India (SBI) and Bank of Baroda (BoB) during the September quarter. In SBI, the stake has reduced by 231 basis points (bps), while in BoB it fell by 274 bps. READ FULL REPORT
Crude oil casts a shadow on Dalal Street
The recent weakness on Dalal Street has raised fears of crude oil’s adverse impact on Indian equities. The benchmark Nifty 50 index is down 3.2 per cent from the lifetime high it hit on November 3.
In the same period, Brent crude oil is up 1.9 per cent and hit a new 52-week high. This also suggests the Indian markets are now struggling to hit fresh highs as oil prices inch up. In stock market parlance, every rally is being sold into by long-term investors, creating fear of a major market correction if oil prices rise any further. READ FULL ANALYSIS
Biocon surges 14%
Biocon surged 14% to Rs 510, also its all-time high on the BSE in early morning trade, after the company said it has secured a regulatory approval to market a biosimilar for anti-cancer drug Herceptin in the US.
Mylan and Biocon announced that US Food and Drug Administration (FDA) have approved Mylan’s Ogivri, a biosimilar to Herceptin, co-developed with Biocon. CLICK HERE FOR MORE 

What lies ahead for Infosys?
Since the resignation of its CEO in August, the stock price of Infosys has recovered around 14 percent,  outperforming the Sensex. The buyback program of Infosys (buyback of 11.3 crore number of shares at a price of Rs.1,150 per share for total value up to Rs.13,000 crore) opened on November 30, 2017. This offer is still at a significant premium of 32% when the market panicked on the eve of former CEO Vishal Sikka's resignation. Infosys’ share price movement is an opt example of market’s anxiety to overreact to both good and bad news in disproportion to what fundamentals would dictate. READ FULL VIEW
Marketc check

At 10:00 am, the S&P BSE Sensex was trading at 32,864, up 31 points, while the broader Nifty50 was ruling at 10,121, up 0.1 point. 

Index Current Pt. Change % Change
S&P BSE SENSEX 32,865.41 +32.47 +0.10
S&P BSE SENSEX 50 10,567.19 +4.42 +0.04
S&P BSE SENSEX Next 50 34,992.77 -105.35 -0.30
S&P BSE 100 10,591.63 -1.59 -0.02
S&P BSE Bharat 22 Index 3,673.89 -3.54 -0.10

Source: BSE
RBI policy: Case for a pause
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is due to meet in the first week of December, and expectations from the government to cut the policy interest rate, currently at six per cent, continue to be high. The government’s argument is simple.
In its last statement after its October meeting, the MPC had highlighted some actions it expected the government to take, including moving forward on the insolvency process and cleaning up the implementation of the goods and services tax, or GST. READ MORE 
Sectoral trend at open 

Source: NSE

Broader markets underperform 
Broader markets underperformed the headline indices with the BSE Smallcap index slipping 0.2%, while the BSE Midcap index was down 0.1%. 
Sensex heatmap at open 

Source: BSE

Markets at open

At 9:18 am, the S&P BSE Sensex was trading at 32,931, up 98 points, while the broader Nifty50 was ruling at 10,149, up 28 points. 

Index Current Pt. Change % Change
S&P BSE SENSEX 32,914.65 +81.71 +0.25
S&P BSE SENSEX 50 10,579.20 +16.43 +0.16
S&P BSE SENSEX Next 50 35,196.16 +98.04 +0.28
S&P BSE 100 10,611.73 +18.51 +0.17
S&P BSE Bharat 22 Index 3,681.31 +3.88 +0.11

Source: BSE
Technical picks by Prabhudas Lilladher
CMP: Rs  60.90     
TARGET: Rs 67.50     
Commodity picks by Prerana Desai 
Soybean prices at the Indore spot market are trading at Rs 2,990 a quintal. For the week ahead, prices are expected to head towards Rs  3,030 a quintal. CLICK HERE FOR MORE
Nifty outlook by Devang Shah
Short-term outlook for the market remains positive till Nifty trades below 10,094 levels. The index expects target of 10,600-10,800 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and is expecting targets in the range of 12,000-12,200 levels in medium term. READ MORE
Technical calls by Devang Shah
CLOSE – Rs 181.15
TARGET – Rs 195-210
Wall Street on Friday

Wall Street fell on Friday, whipsawed by developments with a probe into Russia’s alleged involvement in the U.S. election as well as with progress on a tax bill in Congress.
The Dow Jones Industrial Average fell 40.76 points, or 0.17%, to 24,231.59, the S&P 500 lost 5.36 points, or 0.20%, to 2,642.22 and the Nasdaq Composite dropped 26.39 points, or 0.38% to 6,847.59.
Asian shares listless
Asian shares were less euphoric, with MSCI’s broadest index of Asia-Pacific shares outside Japan hovering near a one-month trough on fears US policy tightening could suck liquidity from emerging markets and derail global growth.
Traders will be focusing their attentions on a meeting scheduled for British Prime Minister Theresa May and EU President Jean-Claude Juncker to work on a Brexit deal.
EMini S&P stock futures jumped 0.6% on Monday, though most major Asian markets started the week with a whimper.
China’s CSI 300 index and SSE Composite were down 0.2% each, while Australian shares dipped 0.1%. Japan’s Nikkei eased 0.2%.
Singapore Nifty
At 8:45 am, the SGX Nifty was trading at 10,156, up 25 points or 0.25%.
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