Sensex Off Day’s High As BJP’s Victory Margin Narrows In Gujarat

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eClerx Services Gains On Buback Proposal

Shares of the Mumbai-based data analytics service provider rose as much as 5.25 percent, the most since Nov. 21, to Rs 1,350 ahead of its board meet on Dec. 22 to consider buying back equity shares of the company.

Eros International Gains On Signing Co-Production Deal

Shares of the Mumbai-based film distributor rose as much as 4 percent, the most since Nov. 29, to Rs 204.50 after it signed four film production deals with Drishyam Films, the company said in a stock exchange filing.

Sreeleathers Locked In 20% Upper Circuit

Shares of the Kolkata-based leather accessories maker rose as much as 20 percent, the most in over six months, to nearly three-year high of Rs 257. The stock rose for second day in a row after it announced September quarter earnings post market hours on Thursday.

  • Revenue up 52 percent to Rs 43.3 crore versus Rs 28.5 crore
  • PAT up 41 percent to Rs 6.4 crore versus Rs 4.5 crore
  • EBITDA up 56 percent at Rs 9.8 crore versus Rs 6.3 crore
  • EBITDA margin at 22.7 percent versus 22.2 percent

Meanwhile, Sreeleathers also got a boost after government announced grant of Rs 2,600 crore for employment generation in leather and footwear sector. �|N,$

Metal Stocks Lead Rally On BSE

Shares of metal makers were among the top performers on the BSE. The S&P BSE Meatl Index was the top sectoral gainer, up 1.89 percent. Gains were led by Jindal Steel, Vedanta and Hindalco.

Power Lunch

Stocks Moving On Heavy Volumes

  • Prism Cement: The Hyderabad-based cement maker rose as much as 2.05 percent, the most since Dec. 15, to Rs 116.75. Trading volume was 19.5 times its 20-day average.
  • Endurance Technologies: The Aurangabad-based auto component maker rose as much as 1.6 percent, the most since Monday, to Rs 1,294.75. Trading volume was 3.9 times its 20-day average.
  • Schaeffler India: The Mumbai-based ball bearing maker fell as much as 2.6 percent, the most in over two months, to Rs 5,063. Trading volume was 10 times its 20-day average.
  • Adani Enterprises: The Gujarat-based coal mining firm rose as much as 7.25 percent, the most since Nov. 17, to Rs 166.45. Trading volume was 9.3 times its 20-day average.

Porinju Veliyath To BloombergQuint

Government Seeks Nod For Additional Expenditure

#Ask BQ

IPO Update

  • Astron Paper's initial public offer was overall subscribed 2.2 times till 11:45 am.

Source: NSE

Market Check In 100 Seconds

Sanjeev Bhasin Of IIFL To BloombergQuint

  • Liquidity and expectations of better earnings will drive the markets forward
  • Second half of next year will see better earnings
  • Expect Nifty to be at 10,700 by the end of 2017

Stocks Reacting To Sensex Reshuffling

IN:

  • IndusInd Bank: Shares of the Mumbai-based private sector lender rose as much as 1.06 percent to Rs 1,694.9 after falling more than 2.7 percent in the morning.
  • Yes Bank: Shares of the Mumbai-based private sector lender rose as much as 0.73 percent to Rs 318.2 after falling more than 3 percent.

OUT:

  • Cipla: Shares of the Mumbai-based drug maker rose as much as 3.2 percent to Rs 594.9
  • Lupin: Shares of the Mumbai-based drug maker rose as much as 1.35 percent to Rs 871.9

Stocks Reacting To Block Deals

ICICI Bank:

  • 52 lakh shares changed hands in a block deal
  • Shares of ICICI Bank Ltd. rose as much as 1.86 percent to Rs 308.8 after falling more than 5.3 percent in the morning.

Petronet LNG:

  • 52 lakh shares changed hands in a block deal
  • Shares of Petronet LNG Ltd. rose as much as 3.99 percent to Rs 257.75

Rupee Stages Smart Recovery

The rupee applied brakes on its slide in fortunes against the dollar with a loss of only 5 paise at 64.09 as the BJP's tally of leads improved in Gujarat and Himachal Pradesh Assembly election results.

The domestic unit opened lower and crashed instantly to 64.72 as early reports of vote counting had pointed to a close fight between the BJP and the Congress in Gujarat and Himachal Pradesh state elections.

However, things took a dramatic turn for the rupee, with the BJP taking the lead for both the states. The impact was immediate as the local unit turned around and hit 64.09, but still down by 5 paise, at 1109 hours.

Seeking a sixth straight term in Gujarat, the BJP is ahead in 100 seats while the opposition Congress is leading in 70 seats, the Election Commission (EC) trends available for 175 of the 182 seats at stake showed. At this stage, the BJP has a vote share of 49.2 per cent while it is 41.5 per cent for the Congress.

The F&O Show

Deven Choksey To BloombergQuint

  • Time has come to focus more on reforms and not just keep talking about cast and religion
  • Stocks to return to normalcy after key polls
  • Polls signal BJP win, margin less than expected
  • Investors to focus on India earnings and Budget

BJP Heads For A Big Win In Himachal Pradesh

Elections 2017: BJP Set To Form Government In Himachal, Gujarat

Steel Strips Wheels Rises 3% After Wining New Export Order

Shares of the steel wheel rim maker rose as much as 3.1 percent to Rs 1,022 after the it received a new export order for 24,500 wheels.

The stock has returned 63.8 percent so far this year, compared to 28 percent advance in the country's benchmark Sensex.

Nirmal Jain, Chairman IIFL To BloombergQuint

  • BJP winning elections will be taken positively but it's a wakeup call at the same time
  • It's clear in a democracy, nothing can be taken for granted
  • Liquidity is very strong in markets
  • Market will focus on positive news rather than negative
  • Market not only driven by politics, India story fundamentally looks strong
  • FIIs are looking for valuations in Indian market
  • BJP has got majority primarily because of its corruption free and development-focused policy
  • Very positive on long-term growth prospects
  • The economy firmly set on path of recovery

Nifty Recovers Over 350 Points From Day's Low

Market Check

Indian equity benchmarks erased losses and moved higher after trends showed that the Prime Minister Narendra Modi-led Bhartiya Janata Party crossed the half-way mark in Gujarat and Himachal Pradesh.

The S&P BSE Sensex rose 0.5 percent to 33,641 and the NSE Nifty 50 Index rose 0.57 percent to 10,393.

Future Supply Chain Makes Quiet Debut On Stock Exchanges

Shares of Future Supply Chain made a quiet debut on stock exchanges. The stock opened for trading at Rs 674 per share against issue price of Rs 664. The stock rose as much as 4.8 percent to Rs 696.

FII Perspective On Gujarat, Himachal Pradesh Elections

Bill Maldonado, chief investment officer-Asia Pacific at HSBC Global asset Management to BloombergQuint:

  • BJP win factored in by FIIs
  • Surprise in election outcome may have temporary impact on the market
  • Rally in market will be backed by domestic flows
  • Valuations not cheap for India, looking for earnings improvement
  • Government has a good partnership with RBI
  • Investors want economic reforms to continue

Block Deal Alerts

  • ICICI Bank: About 52 lakh shares changed hands in a block deal.
  • Petronet LNG: About 52 lakh shares changed hands in a block deal.

Buyers and sellers were immediately not known.

Source: Bloomberg

Rupee Falls Below 64.50 Per Dollar

IndianOpen

10-Year Government Bond Yield Stages Sharp Spike

Opening Bell

Indian equity benchmarks nosedived in trade after early counting trend showed that Congress was leading on 60 seats while BJP was leading on 53 seats in Gujarat.

The S&P BSE Sensex fell as much as 2.59 percent or 867 points to 32,595.63 and the NSE Nifty 50 Index slumped as much as 2.5 percent, the most in a year to 10,074.80.

SGX Nifty Slumps As Polls Show Close Contest In Gujarat

  • Nifty futures traded on Singapore Exchange fell 1.6 percent to 10,197 after early trends showed Congress leading on 47 seats while BJP was leading on 43 seates in Gujarat.

Rupee Falls Against U.S. Dollar

  • Rupee opened lower at 64.22 per dollar against Friday's close of 64.04.

BQ Heads Up!

DayBreak

IPO/New Listing Watch

  • Astron Paper & Board Mill IPO gets 94 percent demand for shares offered on first day sale. Offer closes on Dec. 20
  • Future Supply Chain Solutions to start trading on BSE/NSE after selling shares at Rs 664 each in IPO that got 7.56 times demand
  • ICICI Securities files for public offer of up to 6.44 crore shares

Sensex Rebalance

The weight of banking and financial services sector in the Sensex is now at its highest, rising twofold in the last decade. The share of pharmaceuticals, telecom and capital goods has declined.

Bulk Deals

Fortis Healthcare

  • Pensionskasse Des Bundes Publica bought 28.60 lakh shares or 0.6 percent equity at Rs 135.81 each

Greenply Industries

  • Reliance MF bought 9.90 lakh shares or 0.8 percent equity at Rs 335 each

Kisan Mouldings

  • TCG Fund Fund 1 bought 2.75 lakh shares or 1 percent equity at Rs 136 each
  • Madhu Ranchhoddas Mehta sold 3.02 lakh shares or 1 percent equity at Rs 136.13 each

Transpek Industries

  • Promoter Ashwin Shroff bought 1.6 lakh shares or 2.9 percent equity at Rs 1,310 each
  • Ruchit Patel sold 1.60 lakh shares or 2.9 percent equity at Rs 1,310 each

Stocks To Watch

  • KKR, GIC in final lap to invest $2billion in HDFC: BloombergQuint.
  • Dish TV Receives Approval From Government For Merger Of Videocon D2H With Co.
  • Kesoram Industries to raise Rs 350 crore via issue of convertible warrants on preferential basis to promoter.
  • SBI completes transfer of 14 percent stake in SBI cards to GE Capital.
  • Government approves special package for leather and footwear sector.
  • Ultratech to seek shareholders approve to raise FII cap to 40 percent from 30 percent.
  • E-Clerx Services to consider buyback of shares on Dec 22.
  • Petronet LNG to buy 1.2 million tons/year additional LNG from Exxon Mobil.
  • Container Corp of India signs pact with Andhra Pradesh for setting up an integrated logistics and Manufacturing zone.
  • Quess Corp completes acquisition of 51 percent stake in Trimax Smart Infraprojects.
  • RBI increases FII limit from 24 percent to 49 percent in JSW holding.
  • Shalimar Paints to raise Rs 50 crore via rights issue. To issue 35.5 lakh shares at Rs 140 per share. Rights entitlement ratio fixed at 6:32.
  • L&T Infotech Completes Acquisition Of Syncordis & Subsidiaries.
  • Axiscades Engineering says it has completed Phase I acquisition of Mistral solutions.
  • JMC Projects secures multiple orders worth Rs 790 crore.
  • Weilchensee 884 VV GmbH proposes to acquire majority stake in SQS AG. Acquisition to trigger open offer for the shares of company’s India subsidiary.
  • Ramky Infra allots 1.20 crore warrants to promoters and non promoters.
  • RBI imposes fine of Rs 5 crore on Syndicate Bank for non-compliance of KYC norms.
  • Jaypee plans to put entire hospitality assets on the block (ET).
  • HDFC AMC is said to have hired bankers for $300-$600 million IPO (IFR).

Brokerage Radar

Motilal Oswal on KNR Construction

  • Maintained ‘Buy’ with price target of Rs 320.
  • Order inflow momentum to pick up from the fourth quarter of the current financial year.
  • BOT projects on self-sustaining mode.
  • Regulatory hurdles put off annuity project deal with Essel Infra.
  • Like KNR for its robust execution track record.
  • Positives: strong balance sheet with net debt-equity of 0.1 time and consistent operating margins.

Investec on Inox Leisure

  • Maintained ‘Buy’; raised price target to Rs 350 from Rs 320.
  • Cost efficiency core DNA; Focus on consumer experience and premiumisation.
  • Improved occupancy and realisations – to drive margins/returns.
  • Screen addition pipeline intact.

Macquarie on BHEL

  • Maintained ‘Underperform’ with price target of Rs 72.
  • Order win fails to surprise; Order pipeline beyond L1 remains bleak.
  • Expect order intake at Rs 34,000 crore in the next financial year.
  • Profitability to remain under pressure in absence of strong revenue growth.
  • Expect no reduction in the receivables level.

Goldman Sachs on BHEL

  • Maintained ‘Sell’ with price target of Rs 75.
  • Expect order wins of Rs 18,000 crore in second half primarily where company is L1.
  • Any miss to potentially drive downside to our order-inflow and revenue estimates.
  • BHEL trades in line but is expected to generate lowest return on equity in the next financial year.

Macquarie on HUL

  • Maintained ‘Outperform’ with price target of Rs 1,402.
  • Management suggests a gradual demand recovery in last three months.
  • Lower base will help boost volume growth in the current quarter.
  • GST rate cuts to have significant positive impact in the medium term.
  • Profitability to remain on track despite input cost inflation.
  • Investments in Lever Ayush will continue in the second half.
  • Higher earnings growth to be driven by margin expansion.
  • Expect 250 basis points of margin expansion over by March 2020.
  • Expect earnings to grow at a compounded rate of 18 percent by March 2020.
  • HUL is top pick in the India Consumer sector.

Credit Suisse on Cement Sector

  • Custom duty on Petcoke increased to 10 percent, Could hurt profitability by 4-5 percent.
  • Industry should pass on higher petcoke cost.
  • Price increase would reduce margin expansion opportunities.

Nomura on HDFC Bank

  • Maintained ‘Buy’; raised price target to Rs 2,350 from Rs 2,200
  • Expect Rs 18,000 crore capital raise. Capital raise to add 12 percent to the next financial year’s book.
  • Expect faster earning growth over the next three years.
  • Normalisation of demonitisation and GST key trigger to earnings growth.
  • HDFC Bank remains top pick among large caps.

Talking Points

Good Morning!

Asia-Pacific stocks kicked off the penultimate week of the year on a positive note after a Republican agreement on the shape of U.S. tax cuts aimed at boosting growth in the world’s largest economy.

Equity benchmarks climbed from Sydney to Tokyo, after the S&P 500 Index and other American gauges closed at records on Friday.

Back home, it is a big day for the Narendra Modi-led BJP government with election results from two key states, which includes the prime minister’s home turf, due later in the day. (Catch Gujarat Election Results 2017 Live Blog Here and Himachal Pradesh Assembly Election Results 2017 Live Blog Here)

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.45 percent to 10,409 as of 8:15 a.m.

Here are the key events investors will be watching this week:

  • President Donald Trump delivers a national-security speech Monday, when he will call out China for engaging in “economic aggression,” the Financial Times says.
  • South Africa’s ruling party delayed its leadership vote to Monday.
  • The U.S. and U.K. publish updated estimates of third-quarter GDP
  • The Bank of Japan meets to set monetary policy.
  • The Czech Republic, Hungary, Taiwan and Thailand also set interest rates this week.
  • Nike Inc., FedEx Corp., CarMax Inc., Bed Bath & Beyond, drugstore operator Rite Aid Corp. and Micron Technology Inc. are among companies scheduled to announce earnings.

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