MARKET WRAP: Sensex snaps 2-day losing streak, ends 181 pts up; PSBs rally

Among sectors, the Nifty PSU Bank rose the most on Friday, gaining 2.32 per cent led by Syndicate Bank, Punjab National Bank (PNB) and State Bank of India (SBI)

2:01 PM

IIFL Securities on life insurance sector

 

Banking-led insurance players, in our view, have a substantial medium to long-term outlook and are trading at attractive valuations, which offers a favorable entry point for investors. We recommend 

(1) ICICI Prudential Life Insurance (IPru Life; FY20E P/EV target multiple of 2.3x) owing to improvement in product mix; persistency to drive VNB margin coupled with robust digital platform; 

(2) SBI Life Insurance (SBI Life; 2.6x) due to operating cost leadership in the industry; and 

(3) HDFC Standard Life Insurance (HDFC Life; 4.3x), owing to best-in-class VNB margin.

2:00 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,637.05	+123.34	+0.35
S&P BSE SENSEX 50	11,196.62	+28.32	+0.25
S&P BSE SENSEX Next 50	32,491.44	+161.94	+0.50
S&P BSE 100	10,992.88	+31.61	+0.29
S&P BSE Bharat 22 Index	3,440.27	+27.44	+0.80

1:47 PM

DIIs race ahead of foreign peers as anchors in initial public offerings

Domestic institutional investors (DIIs), led by mutual funds, are now playing an active role as anchor investors in initial public offerings (IPOs) apart from the secondary markets, where they have stepped up their purchases. DIIs contributed nearly 51 per cent of the Rs 7,837 crore of anchor money invested in IPOs last year, data from PRIME Database shows.

 

In comparison, foreign portfolio investors (FPIs) invested Rs 3,817 crore. This is only the second time that DIIs have invested more than FPIs as anchors since the anchor book was started in 2009. Read more

1:30 PM

Sebi brings in rules for merger of FPI, NRI fund inflows in single regime

Markets regulator Sebi has come out with rules for merger of foreign portfolio investment (FPI) and non-resident Indian/overseas citizens of India routes to bring in a single regime for foreign investors and regulate NRI and person of Indian origin fund inflows.

 

The regulator has also exempted housing finance companies and systemically important NBFCs (non-banking financial companies) from disclosure of increase or decrease in shareholding due to encumbrance or release of encumbered shares, Sebi said in a notification. READ MORE

1:14 PM

RBI's decision to allow loan restructuring may hurt credit culture: Fitch

India's central bank’s decision to allow a one-time restructuring of some loans to small businesses is bound to foster indiscipline among borrowers. That’s the view of India Ratings and Research Pvt, a Fitch group company, on the relaxation extended to the so-called micro, small and medium enterprises. “This dispensation may encourage some of the MSME borrowers, which are otherwise operating satisfactorily, to opt for the scheme and impair the credit discipline,” according to Karan Gupta, associate director at India Ratings. Read more

 

12:49 PM

Top gainers in BSE500

COMPANY	PRICE()	CHG()	CHG(%)	VOLUME
ITD CEM	118.85	5.80	5.13	1017715
CERA SANITARY.	2479.90	103.45	4.35	258
MAX FINANCIAL	438.45	14.10	3.32	24356
JOHNSON CON. HIT	1735.00	55.35	3.30	48
KARNATAKA BANK	113.65	3.55	3.22	40905

12:27 PM

TCS' premium valuation will persist, amid high growth visibility: Analysts

With a sharp 40 per cent rally in its share price in 2018, Tata Consultancy Services (TCS) currently trades at 20 times its FY20 estimated earnings, which is valued at over 25 per cent premium to peer and another IT major – Infosys. In fact, TCS’ stock outperformed the NIFTY IT index that rose 24 per cent in 2018. However, analysts believe the TCS’ premium valuation will persist for now, amid high growth visibility. Read more

12:12 PM

Market check

Index	Current	Pt. Change	% Change
S&P BSE SENSEX	35,588.06	+74.35	+0.21
S&P BSE SENSEX 50	11,187.82	+19.52	+0.17
S&P BSE SENSEX Next 50	32,509.20	+179.70	+0.56
S&P BSE 100	10,986.38	+25.11	+0.23
S&P BSE Bharat 22 Index	3,437.85	+25.02	+0.73

12:01 PM

IT shares trade weak; TCS, Infosys and HCL Tech decline over 2%

Shares of information technology (IT) companies were trading weak with Nifty IT index down by more than 2 per cent on Friday amid rise in Indian rupee against US dollar. Tata Consultancy Services (TCS), Infosys, HCL Technologies, MindTree, Tata Elxsi and Tech Mahindra from the Nifty IT index were down more than 2 per cent on the National Stock Exchange (NSE) in the intra-day trade. Persistent Systems, Larsen & Toubro Infotech, Hexaware Technologies, Mphasis, Cyient and Zensar Technologies fell by up to 6 per cent in intra-day trade. Read more

 

11:51 AM

Board meetings today

COMPANY	DATE	AGENDA
BANK OF MAHA	04-01-2019	BOARD MEETING
IMC FINANCE	04-01-2019	BOARD MEETING
RAGHUVIR SYNTH	04-01-2019	BOARD MEETING
RAVALGAON SUGAR	04-01-2019	BOARD MEETING
ROCKON ENTERP.	04-01-2019	BOARD MEETING

» More on Board

11:36 AM

Top gainers on BSE500

COMPANY	PRICE()	CHG()	CHG(%)	VOLUME
ITD CEM	120.05	7.00	6.19	996421
CERA SANITARY.	2462.65	86.20	3.63	121
INDIAN HOTELS	148.75	4.65	3.23	21436
REL. COMM.	13.94	0.43	3.18	6841311
DR LAL PATHLABS	937.90	27.65	3.04	3036

11:28 AM

Weekly future recommendation by ICICI Direct Research

 

As the Nifty continues to consolidate near 10900, price buoyancy was also seen in the defensive space like pharma. We recommend long on Ajanta Pharma, as it is starting the January series with a long bias. The current OI of 0.61 million shares is higher than three month average OI. However, OI leverage and price suggests scope for up move from current levels based on long addition trend. Lot of delivery based buying was seen in the stock from 1090-1110 range in the trailing two months and, hence, remains a key support.

11:25 AM

Reliance Securities on Bajaj Auto

 

Bajaj Auto (BAL) closed 0.4% up as against Nifty falling by 1.1% yesterday. BAL’s strategy of focusing overseas markets would result in strong export volume. Management expects exports to grow by ~15% CAGR over next 5 years, while we expect its exports to grow >20% YoY over FY18-FY19E. Moreover, favourable exchange rate would take care of higher commodity cost. Envisaging a strong bounce back in export volume coupled with rupee depreciation, we expect BAL to record an EPS of Rs 179 in FY20E. In view of ~22% return on equity (RoE), healthy margin profile and positive export outlook, we recommend BUY on BAL with a target price of Rs 3,015, valuing the stock at 16x FY20E EPS and adding Rs 150/ share for BAL’s stake in KTM.

11:12 AM

Oil & gas sector is estimated to witness 36% YoY earnings decline: Elara Capital

 

We expect GRM of PSU refiners (BPCL, CPCL, HPCL, IOCL, and MRPL) would be in the range of negative USD0.7-3.8/bbl and would decline by USD9.3-16.1/bbl YoY on USD26/bbl QoQ Brent crude decline in Q3FY19 versus USD8/bbl QoQ Brent crude strengthening during Q3FY18. 

 

However, core refining margins of PSU refiners improved USD0.6-3.9/bbl YoY to USD3.9-8.1/bbl on stronger middle & heavy distillates cracks. We expect RIL GRM would be USD8.1/bbl, a USD3.5/bbl YoY decline and USD1.4/bbl QoQ decline on weaker light distillate cracks and inventory losses.

11:09 AM

India's services activity dips in December, but firms step up hiring

Growth in India's services sector slowed slightly in December, but firms hired at a faster clip on continuing optimism as new business and employment remained buoyant, a private survey showed on Friday.

 

The Nikkei/IHS Markit Services Purchasing Managers' Index declined to 53.2 in December from November's four-month high of 53.7, but remained above the 50 mark threshold that separates growth from contraction for the seventh consecutive month. READ MORE