Closing Bell: Sensex ends 282 points higher, Nifty above 12,850; financials rally
Indian indices ended higher on Friday mainly led by gains in financials. IT and FMCG stocks also contributed to the gains. The Sensex 282 points higher at 43,882 while the Nifty rose 72 points to settle at 12,844. For the week, the benchmarks ended around a percent higher. Broader markets were also higher with the Nifty Midcap and Nifty Smallcap indices up 0.8 percent and 1.2 percent, respectively. Among sectors, Nifty Fin Services and Nifty IT rose 1.5 percent each while Nifty FMCG rose 1 percent. Nifty Bank was also u 0.8 percent and Nifty Metal added 0.5 percent. However, Nifty Media and Nifty Pharma ended the day in the red. On the Nifty50 index, Bajaj Finserv, Titan, GAIL, Bajaj Finance and Bharti Airtel rose the most while RIL, Adani Ports, IndusInd Bank, Axis Bank and Sun Pharma led the losses.
Planning to add cement stocks to your portfolio? Here’s JM Financial’s outlook for the sector
The cement sector has delivered a positive surprise in the September quarter earnings. The consolidated volume growth for 14 listed companies was 5 percent year-on-year (YoY) in Q2FY21 due to the sustained rural demand and overall pick-up in the infrastructure segment, said global brokerage firm JM Financial. According to the brokerage house, the cement sector remains healthy even more so as companies have upped their volume guidance. The gradual reopening of the economy has fared well for the realty sector and the businesses associated with it. Steady demand in residential property has led to company managements staying positive on the future growth given that they’re gearing to resume capex now. More here
Nifty close to highest valuation multiple, core economy sectors to do well: CLSA
Vikash Kumar Jain, Invest Analyst-India Market at CLSA believes that core economy sectors like banks and infrastructure will do well going forward. “Core economy sectors like banks, some of the other domestic sectors like materials, some infra names should start looking up and that’s the side of COVID impacted stocks that we will be focusing on,” he added. CLSA’s fundamental opinion is that the beta part of the rally is largely done and now it’s more towards sector rotation and that’s the interesting trade. According to Jain, Nifty is very close to the highest valuation multiple. “2020 was about COVID impact, next year will be about recovery,” he added. For entire interview, watch video
COVID-19 vaccine: Have the global markets priced it in? UBS tells where to invest
Global markets have been on a high on the back of positive developments across the COVID-29 vaccines. As per brokerage house UBS, in a scenario where the world comes close to herd immunity by the end of 2021 either by the rapid rollout of vaccine or if the efficacy of the vaccine is high, market moves could seriously accelerate. However, the brokerage added that it will not be easy to get 3-4 billion doses next year, and preparing for deep refrigeration storage. Markets are likely to price the vaccine development in now before acknowledging logistical challenges, it further explained.
UBS also noted that since April, vaccine hopes have contributed a median 15.3 percent upside across markets. Liquidity has been the main driver of markets over the last six months, but its contribution has flattened over the last two months, however, recently, the vaccine hope has become a bigger driver, it stated.
As per UBS, the vaccine is 80-85 percent priced in growth stocks while 60-70 percent priced in Value stocks, therefore have more upside potential. The brokerage estimates further 3-4 percent gains for growth indices and 6-7 percent for value indices before the vaccine is fully priced in. Read more here.
BPCL Divestment | Government sources told CNBC-TV18, that they were not expecting bids from giants like Saudi Aramco and Reliance Industries. The government is keen to divest BPCL’s stake now as the world moving to renewables. Given the global shift to renewable energy, Finance Minister feels that the government can get the right valuation now. The finance minister is evaluating proposals submitted for BPCL divestment, they added.
Jyoti Roy- DVP- Equity Strategist, Angel Broking Ltd
TCS Ltd. has announced that the company has fixed record date of November 28, 2020, for the Rs 16,000 crore share buyback programme announced by the company during the Q2FY21 numbers. The company had announced that it would consider a share buyback of upto Rs 16000 crore at a price of Rs 3000 per share which is at a premium to current market price.
However, the acceptance ratio for TCS buyback is expected to be lower than that of Wipro given more widespread holdings by retail investors in TCS as compared to Wipro. Amongst large cap IT companies both Wipro too has announced a buyback of Rs 9,500 crore. We expect more IT companies to reward shareholders in the form of buybacks going forward as most of them have large surplus cash on books.
L&T Technology Services | The company has been selected as a consulting and professional services (CPS) provider to support Amazon Alexa Voice Service (AVS) integration in various connected devices spanning multiple domains and industries.
Buzzing | Bharti Infratel jumps over 13% on completion of merger with Indus Towers; Vodafone Idea up 4%
The share price of Bharti Infratel surged over 13 percent on Friday after it completed its merger with Indus Towers. It rose as much as 13.6 percent to its day’s high of Rs 210.85 per share on the BSE.
“Merger of Indus Towers Limited & Bharti Infratel Limited has been completed today. The combined entity, to be renamed as Indus Towers Limited, is listed on the National Stock Exchange of India Limited & BSE Limited,” Bharti Airtel said in a filing.
After the merger, Bharti Airtel’s stake in the firm will be over 36.7 percent from 53.5 percent earlier whereas Vodafone will hold a 28 percent stake after selling its 11 percent stake.
Vodafone Idea also jumped over 4 percent after the telecom company received Rs 3,760.1 crore cash consideration for its 11.15 percent holding in Indus Towers.
Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking
In last 3 days, there is a lot of positive news are coming for Vodafone Idea (VIL) such as (a) on completion of Bharti Infratel and indus tower mega-merger, VIL receives Rs,3760 crore 2) Possibility of capital infusion from a consortium led by Oaktree Capital Management for capital expenditure and debt servicing. The above news is positive for all lenders, and IDFC First bank has Rs 3,244 crore exposure (Funded – Rs. 2,000cr and Non-Funded – Rs. 1,244cr) which is 18% of net worth and had 50% provision on it. However, in Q2FY21 Bank has released Rs 811crore against a VIL Exposure based on improved prospects and management commentary at the company, and utilized it to create additional COVID provisions during Q2 FY 21.
If Balancesheet of VIL improves further than IDFC First Bank can additionally write back remaining provision to strengthen balance sheet for future uncertainties and built additional non-specific provision which will provide comfort to an investor. In the last few quarters, IDFC first bank has been able to build liability (CASA and retail deposit) which will help them to reduce high-cost borrowing, and eventually, retail customers will increase daily cash management activity into IDFC first infrastructure. Presently IDFC First Bank is trading at 1x FY22 Book value which is reasonable considering retail mix and growth in liability franchise. We have a Buy rating on IDFC First bank.
CLSA has raised target price for this NBFC. Do you own it?
The share price of Shriram Transport rose over 3 percent on Friday after global brokerage house CLSA reiterated an ‘outperform’ rating and raised its target price from Rs 800 to Rs 1,050 per share.
As per the brokerage, Shriram Transport management continues to see faster-than-expected recovery with 93 percent collection efficiency after Q2. Given this trend, management is optimistic for pre-Covid-level disbursements to be achieved by December, it added.
The stock rose as much as 3.3 percent to its day’s high of Rs 949.90 per share on the BSE. The stock price has gained 38 percent in the last 1 month. It has outperformed Nifty by 20 percent in the last three months rising 32 percent in that period.
For FY22-23. CLSA estimates an AUM growth of 10 percent YoY. “This is slightly conservative versus guidance of double-digit YoY growth. We cut estimated FY21-22 credit costs 78-55 bps although we continue to be cautious in an evolving economic environment,” added the brokerage. Read more
Gold rate today: Yellow metal trades higher; may face resistance at Rs 50,700 per 10 gms level
Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Friday on concerns over rising coronavirus infection cases amid a muted trend in the international spot prices. Silver price also rose above Rs 62,000 level.
At 11:20 am, gold futures for December delivery rose 0.34 percent to Rs 50,160 per 10 grams as against the previous close of Rs 49,992 and the opening price of Rs 50,041 on the MCX. Silver futures traded 0.79 percent higher at Rs 61,995 per kg. The prices opened at Rs 61,610 as compared to the previous close of Rs 61,510 per kg.
“Concerns over the second wave of coronavirus infections and new lockdown in several countries is supporting gold prices. Further, weakness in US dollar and short-covering due to weekend may push bullion prices higher for today,” said Ajay Kedia, director, Kedia Commodity Comtrade. Read more
Angel Broking believes LVB merger to be beneficial for DBS: “Lakshmi Vilas Bank (LVB) continue to hit the lower circuit and would correct further, investors who bought in hope of revival, on an expectation of healthy gain got stuck. LVB networth almost got eroded due to escalated provision and weak business. In this merger shareholder of LVB will not get any benefit. We believe a merger would be beneficial for DBS bank as it would be able to grow business in the south that has business and individual route to Singapore. As of Q1FY21 DBS CRAR stands at 15.99 percent and GNPA and NNPA at 2.7 percent and 0.5 percent, respectively. DBS is ready to put fresh capital to initiate new business,” Jaikishan Parmar- Sr. Equity Research Analyst, Angel Broking said.
Stock Update: At 11:35 am, Gland Pharma’s shares gained 19 percent to trade at Rs 1,780.10. The stock got listed at Rs 1,710 per share on the NSE, a 14 percent premium to the issue price of Rs 1,500 apiece. Meanwhile, on the BSE, the shares opened at Rs 1,701, a 13.4 premium over its issue price. To read more on the company, click here
Real estate picking up on lower interest rates: HSBC Global
Tushar Pradhan, CIO of HSBC Global Asset Management (India) feels that the real estate sector is picking up because of interest rates being low. “Inflation has picked up to about 7 percent and above in India. Interest rates are at negative real yields for quite some time now. Therefore, typically when negative real yields start to happen in any economy the shift to real assets starts to happen,” Pradhan said in an interview to CNBC-TV18. On aviation, he said the sector has seen a sharp uptick as it is seen as a safe mode of travelling during the pandemic. For full interview, watch video
Gold rate today: Yellow metal trades higher; may face resistance at Rs 50,700 per 10 gms level
Gold prices in India traded higher on the Multi Commodity Exchange (MCX) Friday on concerns over rising coronavirus infection cases amid a muted trend in the international spot prices. Silver price also rose above Rs 62,000 level. At 11:20 am, gold futures for December delivery rose 0.34 percent to Rs 50,160 per 10 grams as against the previous close of Rs 49,992 and the opening price of Rs 50,041 on the MCX. Silver futures traded 0.79 percent higher at Rs 61,995 per kg. The prices opened at Rs 61,610 as compared to the previous close of Rs 61,510 per kg. “Concerns over the second wave of coronavirus infections and new lockdown in several countries is supporting gold prices. Further, weakness in US dollar and short-covering due to weekend may push bullion prices higher for today,” said Ajay Kedia, director, Kedia Commodity Comtrade.
Market Watch: Sameet Chavan, Angel Broking
“One should go long in Bharti Infratel if it gives a dip towards 196-195. From hereon this stock will be heading to Rs 202-205, use declines to go long with a stop around Rs 187. Sell call is on Axis Bank. The stock would be giving a profit booking towards Rs 588-585, it can be sold on a minor pullback towards Rs 610 with a stop around Rs 622. Sundaram Fasteners at current levels look encouraging, keep a stop loss around Rs 504 and we would expect this stock heading towards Rs 555.”
Technical Veiw | The markets have opened in a see-saw mood! It is still trying to figure out the direction for the day. As long as 11,500 holds, we continue to remain in the hands of the bulls and can enter the Nifty on all dips for a potential target of 13,100, says Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
Buzzing | Shares of Bharat Electronics rallied over 5 percent after Jefferies maintained a Buy call on the stock with a target of Rs 130 per share. The brokerage is of the view that the impact of lowered margin on nominated projects began in FY20 adding that operational leverage and cost-saving indigenisation benefits will offset the impact.
Prestige Estates’ Irfan Razack speaks to CNBC-TV18, says that the co needs to undertake regulatory approvals for stake sale in office portfolio to PE major Blackstone, he is expecting the deal to fructify in mid-December. Here’s more pic.twitter.com/6EECATwQhy
— CNBC-TV18 (@CNBCTV18Live) November 20, 2020
New Listing | Gland Pharma lists at Rs 1,710 per share on the NSE, a 14 percent premium over the issue price of Rs 1,500 per share
Gland Pharma listed at Rs 1,710 on the NSE, a 14 percent premium to the issue price of Rs 1,500 apiece. Soon after opening, the shares traded about 5.5 percent higher to Rs 1,795.30. On BSE, the shares opened at Rs 1,701, a 13.4 premium over its issue price.
It had opened its Rs 6,480 crore IPO during November 9-11. The issue closed with 2.06 times subscription last week.
Gland Pharma is one of the largest and fastest growing injectable focused B2B company. The issue price was fixed at Rs 1,500 per share.
The funds raised from this issue will be used to fund capital expenditure, working capital requirements and general corporate purposes, said the company. Read more here.
Two vaccines could be authorized soon, say EU official
The European Union’s top official said Thursday that two COVID-19 vaccines could receive conditional market authorisation as early as the second half of December. Speaking after a meeting of EU leaders, European Commission president Ursula von der Leyen said the vaccines developed by Moderna and Pfizer, which created its serum with German drugmaker BioNTech, could be approved by the end of the year by the European Medicines Agency (EMA) if all proceeds now without any problem. Von der Leyen added this is the very first step to be able to be on the market. Von der Leyen said the EMA is in constant contact with the FDA to synchronize the assessment of the vaccines. More here
Opening Bell: Sensex opens 100 points higher, Nifty above 12,750; IT, metal stocks gain
Indian indices opened higher on Friday mainly led by gains in IT and metal stocks even as the global sentiment remained negative due to rising coronavirus cases. At 9:18 am, the Sensex was up 120 points at 43,720 while the Nifty 18 points to 12,789. Broader markets were also high at opening with the Nifty Midcap and Nifty Smallcap up over half a percent each. All sectors were also in the red with Nifty Metal rallying around 2 percent. Meanwhile, Nifty Bank and Nifty Auto als orose 0.6 percent. Tata Steel, Bajaj Finserv, Hindalco, JSW Steel, and Titan were the top gainers on the Nifty50 index while UPL, SBI Life, Adani POrts, HUL and Bajaj Auto led the losses.
