Market bounces in last hour of trading

The benchmark indices ended higher after a roller-coaster session on Wednesday. After starting the day in the green, the indices sharply pared gains and hit the day's low in mid-afternoon trade. Strong buying support in the final hour of trade, pushed the Nifty above 11,900.

The barometer index, the BSE Sensex, rose 172.69 points or 0.43% to 40,412.57, as per the provisional closing data. The Nifty 50 index rose 53.35 points or 0.45% to 11,910.15, as per the provisional closing data.

The recovery was broad based. The S&P BSE Mid-Cap index rose 0.52% and the S&P BSE Small-Cap index rose 0.01%.

The market breadth was negative. On BSE, 1012 shares advanced while 1468 shares declined. A total of 192 shares were unchanged. In Nifty 50 index, 32 stocks advanced and 18 stocks declined.

Trading sentiment took a hit in morning trade after the Asian Development Bank (ADB) lowered India's growth forecast.

Economy:

ADB on Wednesday announced it trimmed its forecasts for economic growth in developing Asia this year and next year as growth in the People's Republic of China (PRC) and India is weighed down by both external and domestic factors.

India's growth is now seen at a slower 5.1% in fiscal year 2019 as the foundering of a major non-banking financial company in 2018 led to a rise in risk aversion in the financial sector and a credit crunch. Also, consumption was affected by slow job growth and rural distress aggravated by a poor harvest. Growth should pick up to 6.5% in fiscal year 2020 with supportive policies. In September, ADB forecast India's GDP to grow 6.5% in 2019 and 7.2% in 2020.

Buzzing Index:

The Nifty Metal index slipped 0.20% to 2,510.85, as uncertainties on the US-China trade war front continued to persist. The index has fallen 1.60% in two sessions.

Hindustan Copper (down 2.81%), Vedanta (down 1.63%), National Aluminium Company (down 1.28%), Hindalco Industries (down 0.98%), Hindustan Zinc (down 0.44%) and JSW Steel (down 0.34%) declined.

Jindal Steel & Power (up 2.23%), NMDC (up 1.73%) and Tata Steel (up 0.7%) advanced.

Stocks in Spotlight:

Yes Bank slumped 15.83% to Rs 42.55. The bank said its board is willing to favorably consider the offer of $500 million of Citax Holdings and Citax Investment Group and the final decision regarding allotment to follow in the next board meeting, subject to requisite regulatory approvals. The binding offer of $1.2 billion submitted by Erwin Singh Braich / SPGP Holdings also continues to be under discussion. The bank shall continue to evaluate other potential investors to raise capital upto $2 billion.

Reliance Industries (RIL) rose 0.01% to Rs 1562.40. RIL said it has signed a Framework Agreement with The Abu Dhabi National Oil Company (ADNOC) to explore development of an Ethylene Dichloride facility in Ruwais. Under the terms of the agreement, ADNOC would supply ethylene to the potential joint venture and provide access to world-class infrastructure at Ruwais, while RIL will deliver operational expertise and entry to the large and growing Indian vinyls market, in which it is a key participant.

Bharti Airtel slipped 0.76% to Rs 443.65. The telecom company said it will seek approval of its shareholders to raise capital through qualified institutional placement (QIP), foreign currency convertible bonds (FCCBs) and non-convertible debentures (NCDs) on 3 January. It plans to raise $3 billion via debt and equity shares or convertible instruments.

Wipro shed 0.42% to Rs 237.15. Wipro and the Ministry of Technology and Communications (MTC), a government authority of the Sultanate of Oman, have signed a Memorandum of Understanding (MoU) to launch a Center of Excellence (CoE) for open source. Under this MoU, Wipro and MTC will collaborate to build, deploy and sustain the CoE as well as accelerate adoption of open source technologies in thc public and private sectors of Oman and the Gulf Cooperation Council (GCC) region.

IDBI Bank rose 1.04% to Rs 33.85. IDBI Bank said the Board of Directors of IDBI Bank Ltd., at its meeting held on Tuesday, December 10, 2019, has given in-principle approval to divest/ dilute IDBI Bank's stake in its subsidiaries namely IDBI Capital Market Securities Limited (ICMS) and IDBI Intech Limited (IIL) to the extent of 49% to the prospective investors and retaining controlling stake with the Bank.

Jindal Steel & Power (JSPL) rose 2.45% to Rs 144.50 after the company said it commissioned its fourth coke oven battery at Angul steel plant in Odisha, making it self-sufficient in coke requirement.

HDFC Asset Management Company (HDFC AMC) rose 4.84% to Rs 3030.95 after a foreign brokerage initiated coverage on the stock with a 'Buy' rating and a price target of Rs 3,435. The brokerage reportedly stated that the company is in a good position to capture positive changes in the Indian AMC industry. It is set to provide a high return on equity (RoE) business and investors may expect a dividend payout ratio of 80% during FY 2020-22. HDFC AMC was also able to weather out regulatory challenges successfully over a period, it added.

HDFC AMC tanked 15.99% in the past five trading sessions to settle at Rs 2,890.90 yesterday, 10 December 2019, from its close of Rs 3,441.45 on 3 December 2019. The company's promoter, Standard Life Investments, concluded its offer for sale (OFS) last week. It sold 3.10% stake via OFS. The floor price for the sale was set at Rs 3,170 per equity share.

CSB Bank fell 6.92% to Rs 241.40, extending its losses for fifth session. It hit a record low of Rs 238.95 in intraday today. Shares of the Kerala-based bank have tumbled 17.04% in just five trading sessions since listing on bourses on 4 December 2019. Profit booking at higher levels and overall weak sentiment in market has pulled the stock lower.

The stock debuted on 4 December 2019 at Rs 275, a premium of 41.02% to the initial public offer (IPO) price of Rs 195. The stock hit its record high of Rs 314.2 on 5 December 2019.

Shares of Adani Transmission rose 1.55% to Rs 341.40. Adani Transmission (ATL), Adani Electricity Mumbai (AEML) and a subsidiary of Qatar Investment Authority (QIA) have signed definitive agreements for the sale of a 25.1% stake in AEML to QIA and for a shareholder subordinated debt investment by QIA in AEML (the transaction). The total QIA investment in AEML will be approximately Rs 3,200 crore (equivalent to approximately $450 million).

Shaily Engineering Plastics gained 1.44% to Rs 625.25 after the Goods and Service Tax (GST) authorities vacated seizure of moulds owned by the company and its customers.

The company had informed on Saturday, 7 December 2019, that there was a search at its Rania plant in Gujarat by Goods and Services Tax (GST) authorities and the same has ended. As part of the investigation, the authorities seized some moulds belonging to the company as well its customers as part of the process which is being contested by the company. The firm said it is extending all co-operation and the investigation and submissions by the company is continuing.

Foreign Markets:

Shares in Europe traded mostly lower while stock markets in Asia closed mixed on Wednesday ahead of the U.S. Federal Reserve's interest rate decision due later in the day stateside.

Investors awaited the Fed's final interest rate decision for the year with expectations that the central bank will keep the rate on hold.

Further, developments on U.S.-China trade were watched as Sunday inches closer, when more tariffs on Chinese exports to the U.S. are set to kick in. That comes as markets have been expecting a "phase one" trade deal to be reached between Washington and Beijing.

As per reports, the U.S. plans to delay slapping China with additional tariffs as both sides try to work out the agreement.

U.S. negotiators have also asked Chinese officials to commit to some agricultural purchases upfront before moving forward with a deal, the report added. Meanwhile, China wants its agricultural purchases to be proportional with the amount of tariffs the U.S. rolls back. The U.S. is also reportedly pushing for a quarterly review of the promised purchases.

Saudi Aramco Debut:

Saudi Arabia's energy giant Saudi Aramco saw a blockbuster debut on Riyadh-based stock exchange on Wednesday, 11 December 2019. The stock debuted at a premium of 10% at 35.20 riyal.

Earlier this month, the Saudi government raised $25.6 billion by selling a 1.5% stake in state-owned Aramco at 32 riyal each. The IPO received total bids of $119 billion.

Funds from the sale will be transferred to the Public Investment Fund, which will help diversify the kingdom away from dependence on oil and create jobs for a growing population.

In August 2019, Saudi Aramco signed a non-binding letter of intent to acquire a 20% stake in the oil to chemicals division of Reliance Industries (RIL) valued at an enterprise value of $75 billion.

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