Closing Bell: Market reverses 4 days of gains to end lower, Nifty below 12,800; financials slip
Indian indices ended over 1 percent lower on Thursday after 4 sessions of gains, following losses in global peers, as widening COVID-19 restrictions weighed on market sentiment. The domestic indices were mainly dragged by financials but IT and metal sectors also contributed to the fall.
The Sensex ended 580 points lower at 43,600 while the Nifty fell 166 points to settle at 12,772. Broader markets were also lower with the Nifty Midcap down 0.7 percent while the Nifty Smallcap index fell 0.23 percent.
Among sectors, Nifty Bank declined 3 percent while Nifty Fin Services shed 2.4 percent. IT, Metal and Pharma indices also ended in the red for the day, down 0.5-1 percent. However, Nifty FMCG rose 0.4 percent.
On the Nifty50 index, Powergrid, ITC, NTPC, Coal India and Tata Steel were the top gainers while SBI, ICICI Bank, Axis Bank, Tata Motors and JSW Steel led the losses.
India’s GDP growth will return to pre-COVID levels by Q1FY22, says Morgan Stanley
Morgan Stanley’s Chetan Ahya expects India’s Gross domestic product (GDP) growth to return to pre-COVID levels by Q1of FY22.
“That’s the time when the central bank should begin to think about taking back some of the extraordinary support that they are providing to the economy,” he said.
According to him, India’s GDP may contract by 5.7 percent in 2020 and rebound to 9.8 percent in 2021.
On global inflation, he said, “We are highlighting that there will be an inflation upside in developed markets, especially in the US, but in 2021 it will still be moderate inflationary pressures, not aggressive enough that the policymakers begin to tighten aggressively and slow down the growth.”
According to Ahya, RBI may look to unwind some monetary stimulus.
“There is no need for additional accommodation in monetary policy. The pullback should be done by RBI now,” he added.
Ahya expects emerging markets to see a good run for the next two years.
Yash Gupta Equity Research Associate, Angel Broking: Dr. Reddy’s stock opened negative on news of detailed investigation in Ukraine and other countries but then recovers. Company has informed that it has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals in Ukraine and potentially in other countries were provided with improper benefits in violation of US laws.
The investigation is being carried out by a reputed independent US law firm. Stock is not reacting to the investigation but if any negative development from this investigation may hurt the stock in the short term.
Buzzing | Vodafone Idea stock price jumps 4% after reports of funding offer
The stock price of Vodafone Idea shot up by more than 4 percent after media reports stated that the company is in talks with several groups for fundraising. According to a Bloomberg report, Oaktree Capital and Varde Partners are said to have offered Vodafone Idea at least $2 billion in funding.
Vodafone Idea’s net debt stands at Rs 1,14510 crore. The Board of Directors of the debt-laden telecom operator, at its meeting held on September 04, 2020, had approved the fund-raising plan of up to $ 2 billion or approximately Rs 25,000 crore. Read more here.
Pritesh Mehta of Yes Securities suggests buying two stocks
According to Pritesh Mehta, Adani Ports look good. “For a mild stop headwind facing resistance supply around Rs 361-370 zone and it eventually broke out at the start of its peak. Thereafter it has been sustaining. We can see a bullish broadening pattern playing out, therefore, one can buy Adani Ports for a target of Rs 430,” said Mehta.
He further advised to buy Coforge. Mehta said, “This was one of the big movers in last 6 months from the IT space. Thereafter it went through a bit of a correction but the stock is a first one from the entire space to create a base and is now moving higher. I am expecting a move towards Rs 2,570 from hereon.”
HDFC Securities upgrades earnings estimates for 65% stocks in its coverage
September has been a strong quarter, beating expectations across most sectors, led by margin surprises and in-line revenue performance. The net profit of Nifty50 companies increased by double digits compared to muted expectations and revenues rebounded at a faster pace than costs after the lockdown, resulting in robust earnings.
In a recent report, HDFC Securities noted that 65 percent of stocks in its coverage of a total of 150 stocks saw earnings upgrades for FY21 and FY22 after their Q2 results. Also, 70 percent of those 150 companies beat expectations in the quarter.
“Given Q2 trends and management commentaries for our coverage universe, we have seen aggregate PAT change by ̃4.1 percent and over 2.4 percent for FY21 and FY22, respectively. We are now building in over 3.3 percent and 37.1 percent YoY growth for aggregate PAT for FY21 and FY22, respectively. Nifty consensus EPS for FY22 has also increased by ̃2-3 percent post Q2,” the brokerage stated. Here’s more on this
Heavy Industries Min to soon share a draft with industry on PLI scheme. Sources say, eligible applicants could receive incentives on sales value and it’s likely to be on different slabs as per distance from factory to point of sale, reports @Parikshitl pic.twitter.com/AerL1Nno9s
— CNBC-TV18 (@CNBCTV18Live) November 19, 2020
Kingfisher Plc expands partnership with TCS: Tata Consultancy Services has expanded its partnership with Kingfisher plc, a leading home improvement company in the UK and Europe, to provide consolidated application management and infrastructure support services, to accelerate the retailer’s transformation to be a digital first organization.
TCS shareholders approve up to Rs 16,000-crore buyback plan
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.
“….the members of the company have duly passed the special resolution approving the Buyback,” TCS said in a regulatory filing on Wednesday.
The voting, which started on October 20 and ended on November 18, saw 99.57 percent of the votes being cast in favour of the buyback offer. There was 100 percent voting in favour of the proposal by the promoters, 98.11 percent by public institutional shareholders and 98.43 per cent by other shareholders. Click here to read more
From Bloomberg | Vodafone Idea said in talks with several groups for funding, Oaktree, Varde said to have offered Vodafone Idea at least $2 bn funding pic.twitter.com/T5NhQfDYRA
— CNBC-TV18 (@CNBCTV18Live) November 19, 2020
Analysis: Airlines scramble to prepare for ultra-cold COVID-19 vaccine distribution
Airlines are scrambling to prepare ultra-cold shipping and storage facilities to transport COVID-19 vaccines developed by Pfizer and Moderna, whose doses, which require deep freezing, are likely to be among the first to be distributed. A recent survey by an air cargo association and a drug shippers’ group found only 15 percent of industry participants felt ready to transport goods near the minus 70 degrees Celsius (-94°F) required by the Pfizer Inc vaccine, while around 60% could meet Moderna Inc’s less stringent -20°C requirement.
Typically, airlines use containers with cooling materials such as dry ice to transport pharmaceutical products, but some don’t have temperature controls, making products susceptible to unforeseen events such as flight delays. Read more here
From a failed union with Indiabulls Housing Finance, here’s a timeline of how LVB got itself in the midst of a storm
Private lender Lakshmi Vilas Bank (LVB) has been in the public eye for all the wrong reasons since last year. The private lender had last year merged with Indiabulls Housing Finance (IBHF), which was later halted by RBI after it put LVB in the PCA (Prompt Corrective Action). Now, the apex bank has proposed DBS Bank India to merge with the lender while it’s under moratorium.
The stock fell 20 percent today to Rs 12.45 per share on the NSE. Last year, it plunged 71 percent in 6 months after RBI stopped the merger with IBHF.
The bank has faced some serious flak in terms of earnings, credit rating downgrade, and allegations. Continue reading
Overweight on telecom, metals, passenger vehicles: Citi India
Surendra Goyal, Head of Research at Citi India says there are opportunities available in the financials space. “There are still opportunities in this market. If you look at the broader market today, at a sector specific level, we see an opportunity in financials, which is why in October for a couple of times we raised our active overweight on financials,” he said in an interview with CNBC-TV18.
“If you look at our key overweights, we have telecom stocks, we have steel stocks, we have auto stocks, one IT stock. Beyond that, it becomes very stock specific rather than sector specific,” he added. On autos, Goyal said, “At this point our overweight is on the passenger vehicle (PV) space.” He believes from hereon, with the market at current levels, it is going to be a stock specific play. Watch video for more
Buy midcaps, small caps; positive on housing finance co, cement: Sundaram MF
S Krishna Kumar, Chief Investment Officer for Equity at Sundaram Mutual Fund believes the underperformance of midcaps and smallcaps will correct itself in the next 12 months. “So we should position ourselves more there,” he said in an interview with CNBC-TV18.
“To a large extent, most of the negativity is behind us. We should continue to build on the equity end of the asset allocation. The rally is more into the largecaps given the liquidity that comes through,” he added. “Slowly the midcaps and smallcaps will enjoy further run, it is going to be very good time for midcaps and smallcaps in the next two years,” Kumar said. Watch video for more
Dr Reddy’s starts detailed investigation into anonymous complaint
Drug major Dr Reddy’s Laboratories on Thursday said it has commenced a detailed investigation into an anonymous complaint regarding healthcare professionals in Ukraine and potentially in other countries being provided with improper benefits. The company has a wholly-owned subsidiary and a global office in Ukraine. ”Dr Reddy’s Laboratories has commenced a detailed investigation into an anonymous complaint. The complaint alleges that healthcare professionals in Ukraine and potentially in other countries were provided with improper benefits in violation of US laws,” the company said in a regulatory filing.
Delhi High Court begins hearing Future Retail’s suit against Amazon.
Alert: Future Retail is seeking an ad-interim stay on Amazon from writing to regulators like SEBI pic.twitter.com/ZMwRp6ULs9
— CNBC-TV18 (@CNBCTV18Live) November 19, 2020
Flying High: Spicejet shares surge over 13% after USFAA lifts ban on Boeing 737 Max aircraft
Shares of Spicejet rallied over 13 percent on Thursday after the US Federal Aviation Administration (FAA) lifted its 20-month ban on Boeing 737 Max aircraft and cleared it for flying. SpiceJet has 13 Boeing 737 Max planes in its fleet and is the sole operator of these planes in India after Jet Airways was grounded. The stock rose as much as 13.6 percent to its day’s high of Rs 75.40 per share. The stock has risen nearly 38 percent in just the past 4 sessions as the DGCA further eased restrictions and allowed airlines to sell seats up to 70 percent capacity from 60 percent earlier. The MAX was grounded after two fatal crashes that killed 346 people within five months in 2018 and 2019 and led to a hailstorm of investigations.
India’s GDP growth will return to pre-COVID levels by Q1FY22, says Morgan Stanley
Morgan Stanley’s Chetan Ahya expects India’s Gross domestic product (GDP) growth to return to pre-COVID levels by Q1o f FY22. “That’s the time when the central bank should begin to think about taking back some of the extraordinary support that they are providing to the economy,” he said. According to him, India’s GDP may contract by 5.7 percent in 2020 and rebound to 9.8 percent in 2021. On global inflation, he said, “We are highlighting that there will be an inflation upside in developed markets, especially in the US, but in 2021 it will still be moderate inflationary pressures, not aggressive enough that the policymakers begin to tighten aggressively and slow down the growth.” For the entire interview, watch video.
Buzzing | Hero MotoCorp shares rally 5% on robust festive season sales
The share price of Hero MotoCorp surged over 5 percent in the early trade on Thursday, driving a rally in the Nifty Auto index in an otherwise weak market, after the company reported robust sales during the festive period.
Hero MotoCorp, the world’s largest two-wheeler manufacturer, sold more than 14 lakh units of motorcycles and scooters, in retail sales during the just concluded 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% of the festive season volumes sold by the Company in the previous year (2019) and 103% compared to the same period in 2018,” the company said in a regulatory filing on Wednesday.
This enabled the company to reduce the vehicle stocks at its dealerships to less than four weeks, the lowest ever post-festive inventory. Read more here.
Buzzing | Pfizer shares surge over 6% as co ends Phase 3 vaccine trial with 95% efficacy
The share price of Pfizer gained significantly on Thursday after the American pharmaceutical corporation (Pfizer Inc) said that the final results from the late-stage trial of its COVID-19 vaccine were 95 percent effective. The company added that it would apply for emergency US authorization within days.
The drugmaker said the efficacy of the vaccine developed with German partner BioNTech SE was consistent across age and ethnicity demographics, and that there were no major side effects, a sign that the immunization could be employed broadly around the world. Read more here.
Technical View | The Nifty has opened with a gap down but until we do not break 12,500, the trend continues to remain on the upside. We still have an open target of 13,100 which the index is capable of achieving this month. A buy on dips approach is recommended, says Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
With 55% returns this year, this Internet company stock has surpassed Nifty IT
One of the India’s oldest internet companies Info Edge suffered losses during the COVID-19 pandemic in its various business units. However, surprisingly, the stock has outperformed the big IT names and the Nifty IT index on a year-to-date (YTD) basis. The stock has been hitting its all-time high level since four days. On a YTD basis, Info Edge’s shares rose 55 percent to current market levels as compared to Nifty IT’s 37 percent. In the last six trading session, the stock has climbed over 15 percent. Info Edge runs recruitment services (Naukri.com), real estate platform (99acres.com), matrimony site (Jeevansathi,com), food delivery service (Zomato) and education service (Shiksha.com) along with other businesses. More here
Opening Bell: Sensex opens over 250 points lower, Nifty below 12,850; financials drag
Indian shares opened lower on Thursday, snapping three sessions of gains, following losses in global peers. The sentiment was lower as concerns about rising coronavirus infections and new shutdowns in major US cities overshadowed investors’ enthusiasm about COVID-19 vaccine developments. At 9:18 am, the Sensex was down 269 points at 43,910 while the Nifty fell 76 points to 12,862. The indices were mainly dragged by financials with HDFC Bank, ICICI Bank, Axis Bank, and HDFC contributing the most to the losses. Broader markets were also lower with the Nifty Midcap and Nifty Smallcap indices down 0.4 percent each. Among sectors, the banking and fin services indices fell over 1 percent while the metal and pharma indices were also in the red. However, the Nifty IT index was in the green at opening.
Axis Bank-Max Life deal may receive final approval by mid-December
It has been a long road for the Axis Bank-Max Life transaction. In the last six months since the announcement, the deal has already hit many regulatory roadblocks forcing the promoters to make multiple tweaks to the contours. But, finally, the wait could come to an end as sources tell CNBC-TV18 that all regulators involved in the transaction have agreed on the suggested deal structure between Axis Bank and Max Life Insurance. According to sources, the insurance regulator had recently written to the Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) seeking their clearance on the deal structure between Axis Bank and Max Life Insurance. Both banking and market regulator have given their go ahead on the suggested structure. More here
