Sensex closes above 41,000 on US-China trade hopes

The Sensex and the Nifty scaled record closing peaks on Wednesday as investors tracked positive mood around US-China trade talks. However, strong gains were capped amid surprising turn of political events in the Maharashtra. Investors were also concerned about India's economic growth.

The barometer index, the BSE Sensex, rose 199.31 points or 0.49% to 41,020.61, its record closing high. The Nifty 50 index rose 63 points or 0.52% to 12,100.70, its record closing high.

In the broader market, the S&P BSE Mid-Cap index rose 0.82% while the S&P BSE Small-Cap index rose 0.19%.

The market breadth ended in the favour sellers. On the BSE, 1227 shares rose and 1289 shares fell. A total of 213 shares were unchanged.

Politics:

Ahead of his swearing-in ceremony on Thursday, Maharashtra CM-designate Uddhav Thackeray met Governor Bhagat Singh Koshyari at Raj Bhavan on Wednesday. Thackeray, who is the first from his family to be sworn-in as the CM, will have six months to become a member of the Legislative Assembly.

Newly-elected 288 MLAs were administered the oath in the Maharashtra Assembly today. The final break-up of the number of cabinet berths in the Maharashtra Assembly for the Shiv Sena-NCP-Congress alliance has been decided upon. The Shiv Sena has 16, the NCP 15, while the Congres has a total of 13 berths. The development comes a day after Devendra Fadnavis tendered his resignation following the Supreme Court's order for a floor test. NCP's Ajit Pawar also resigned as the Deputy chief minister. He later met NCP chief and his uncle Sharad Pawar at the latter's residence.

Economy:

India's GDP data for September quarter is scheduled to be published on Friday, 29 November 2019. Ratings firm ICRA expects further deterioration in the growth of India's GDP to 4.7% in Q2 of FY2020, due to weakening momentum in the industry.

The Organisation for Economic Co-operation and Development (OECD) recently cut India's economic growth forecast for 2019 to 5.8%, but said it would pick up to 6.2% in 2020 and further to 6.4% in 2021. India's economy grew 6.8% in FY19.

Foreign Markets:

Overseas, markets in Europe and Asia edged higher on Wednesday as investors focused on U.S.-China trade talks and an upbeat assessment of the economy from Federal Reserve Chairman Jerome Powell.

As for data, fresh figures showed that Chinese industrial profits dropped for a third consecutive month in October.

US markets advanced to close at new all-time highs Tuesday after top Chinese and U.S. negotiators reportedly agreed on talks toward a preliminary 'phase one' deal, China's Commerce Ministry said Tuesday.

President Donald Trump on Tuesday said that Washington and Beijing were in the "final throes" of talks aimed at securing a trade deal.

Meanwhile, Fed Chair Powell, in remarks Monday evening, outlined an optimistic view of the US economy but signaled that low inflation would likely keep interest rates low. The Fed chief said that the central bank's three rate cuts this year have helped to spur home purchases, contributing to the economy's longest expansion on record.

In US economic data, consumer confidence fell in November for the fourth month in a row, with the Conference Board's index falling from 125.5 from 126.1 in October.

New-home sales fell in October to a seasonally adjusted annual rate of 733,000, from 738,000 in September. But the Case-Shiller home-price index for September showed home prices rising nationally at a 3.2% annual pace, up from a 3.1% rise in August.

Back in Europe, market participants kept a close watch on the latest political developments out of the U.K., as the country heads for a fresh set of elections on 12 December.

Buzzing Index:

The Nifty Auto index rose 1.27% to 8,202.85. Media reports suggested that the Cabinet may consider approving scrappage policy.

TVS Motor Company (up 4.78%), Maruti Suzuki India (up 2.38%), Tata Motors (up 1.19%), Bajaj Auto (up 1.18%), Hero MotoCorp (up 1.06%), Eicher Motors (up 1.05%) and Mahindra & Mahindra (up 0.22%) advanced.

Ashok Leyland rose 1.3% after the company bagged an order from TN STU (Tamil Nadu State Transport Undertakings) for 1750 buses. This order comes closely on the back of orders received from various state transport undertakings recently, the company added. The announcement was made during market hours today, 27 November 2019.

Stocks in Spotlight:

L&T Finance Holdings rose 4.62% to Rs 107.65 on plans to raise Rs 60 crore through private placement of cumulative compulsorily redeemable non-convertible preference shares. The company will determine price for the proposed issue on 29 November 2019.

Biocon advanced 4.63% to Rs 276.55. Biocon and Mylan's supplemental Biologics License Application (sBLA) for Pegfilgrastim Drug Substance to be manufactured at Biocon's new Biologics manufacturing facility has been approved by the U.S. Food and Drug Administration (FDA). This additional approval of its new manufacturing facility for Pegfilgrastim in Bengaluru will enable Biocon Biologics, a subsidiary of Biocon Ltd, and Mylan to scale up capacity multi-fold and address the growing market opportunities in the U.S. and other global markets. The U.S. FDA had conducted a Pre-Approval Inspection of this new Drug Substance manufacturing facility from 10 to 19 September 2019.

Seamec jumped 6.97% to Rs 507.25 after the company's vessel, Seamec Princess, has been contracted with Posh Subsea for working at Mumbai High Offshore. The tenure of the contract is for a period of 180 days with an option of extension. The value of charter during firm period is

Yes Bank surged 7.65% to Rs 68.25. The bank's board will meet on 29 November 2019 to consider raising of funds by issuing equity/equity linked securities through permissible modes, subject to necessary shareholders and regulatory approvals.

NSE has banned Yes Bank from the derivatives segment after crossing 95% of market wide position limit.

HCL Technologies rose 1.68% to Rs 1128.90. The company said that 7 December 2019 has been fixed as the record date for determining the eligible shareholders entitled for the proposed 1:1 bonus issue of shares.

HDFC rose 1.41% to Rs 2336.30 after a global brokerage maintain 'overweight' rating on the stocks and increased its price target to Rs 2,900 from Rs 2,600.

Cheviot Co. jumped 9.68% to Rs 784 after the Union Cabinet on Wednesday approved extension of norms for mandatory packaging in jute materials.

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi has accorded its approval for mandatory packaging of foodgrains and sugar in jute material for the Jute Year 2019-2020. The decision of the Cabinet mandates that 100% of the food grains and 20% of the sugar shall be mandatorily packed in diversified jute bags.

RBL Bank rose 5.81% to Rs 367.65 after the media reported suggested that the bank is looking to raise about Rs 1,500 crore within a week through a mix of a preferential issue and a qualified institutional placement of equity shares.

CreditAccess Grameen (CAGL) advanced 4.33% to Rs 781.40 after the micro-finance company signed definitive agreements for acquisition of a controlling majority in Madura MicroFinance (MMFL) and subsequently, a merger of MMFL into CAGL.

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