The benchmark indices further extended gain and hit fresh intraday high in afternoon trade. While domestic economic data was weak, global cues were supportive on the back of US reaching 'deal in-principle' with China and Boris Johnson heading for crushing UK election victory. A dovish stance by the European Central Bank further helped to provide support.
Finance Minister Nirmala Sitharaman will address the media at 03:15 pm today, 13 December 2019, at the National Media Centre, New Delhi. The agenda of the meet are unclear.
At 13:27 IST, the barometer index, the S&P BSE Sensex, was up 416.29 points or 1.03% at 40,998.00. The Nifty 50 index was up 105.25 points or 0.88% at 12,077.05.
The S&P BSE Mid-Cap index was up 0.62%. The S&P BSE Small-Cap index was up 0.64%.
The market breadth was titled in favour of buyers. On the BSE, 1402 shares rose and 872 shares fell. A total of 166 shares were unchanged. In Nifty 50 index, 36 stocks advanced while 14 stocks declined.
Economy:
India's WPI inflation data for November 2019 is due today. WPI rose 0.16% year-on-year in October 2019, slowing from a 0.33% gain in the previous month. It was the lowest wholesale inflation rate since a decline in June 2016, as cost of both fuel and manufacturing continued to fall.
India's retail inflation jumped to a 40-month high in November on higher food prices, while industrial output contracted in October from a year earlier, data showed on Thursday.
India's IIP declined for third straight month at 3.8% in October 2019, in addition to 4.3% dip in September 2019 and 1.4% decline in August 2019. The numbers were better than expected given that in October there are several holidays when factories were shut.
The manufacturing sector output declined 2.1%, while electricity generation plunged 12.2% in October 2019 contributing to the overall decline in industrial production. Further, the mining sector production plunged 8.0% in October 2019.
The all-India general CPI-based retail inflation jumped to 5.54% in November 2019, compared with 4.62% in October 2019. The higher inflation was driven by transitory factors such as increase in food inflation while core inflation continued to remain subdued, reflecting the tepid demand in the economy. The core CPI inflation rose marginally to 3.50% in November 2019 compared with 3.44% in October 2019.
Food price inflation (rural and urban) climbed 10.01% in November 2019, as against 7.89% in October 2019. Food inflation rose sharply as unusually heavy rains at the end of the monsoon season hit crop yields and caused a spurt in prices of vegetables such as onions.
The RBI in its fifth bi-monthly monetary policy statement on 5 December 2019, revised retail inflation projection upwards to 4.7-5.1% for the second half of FY2020 and 3.8-4% for the first half of FY2021.
Stocks in Spotlight:
IT major Wipro rose 1.78% to Rs 243.65. The company was awarded a strategic multi-year cyber governance, cloud and infrastructure services transformation engagement by Tokyo-based Olympus.
Infosys advanced 1.16% to Rs 710. The company said its subsidiary, EdgeVerve Systems, announced partnership with IDEGO, a leading consulting firm for digital transformation, to develop and deliver innovative tech products to their customers across Latin America. Together, they will assist enterprises across telecom and financial services to help improve enterprise-wide productivity and efficiency.
Separately, Infosys in an exchange filing during market hours today, 13 December 2019, said that it was aware of several media stories referencing an additional securities class action lawsuit against Infosys. The company clarified that is not aware of any additional complaints, other than the initial complaint, which was disclosed on 24 October 2019.
It added that it is not uncommon for plaintiffs' lawyers to issue press releases or other media communications asking potential plaintiffs to contact them in order to apply for lead plaintiff status in an existing lawsuit. It appears that the press communications by the Schall Law Firm is soliciting potential lead plaintiff applicants.
The Schall Law Firm, a US-based shareholder rights litigation firm, announced the filing of a class action lawsuit against Infosys in a US court.
Reliance Industries (RIL) rose 0.63% to Rs 1577.45 after a foreign brokerage maintained a 'buy' rating with a target at Rs 2,010 per share. The brokerage reportedly said that RIL's 45% of FY22 EBITDA is expected to come from telecom and retail, while 80% of incremental EBITDA aided from telecom and retail could drive further re-rating.
RIL on Thursday, 12 December 2019, announced that its subsidiary, Reliance Strategic Business Ventures (RSBVL), acquired 85% stake in NowFloats Technologies for Rs 141.63 crore.
Foreign Markets:
European stocks opened higher while Asian continued trading higher on Friday after news that the U.S. and China have reached a phase one trade deal in principle, while the U.K.'s ruling Conservative Party has won a commanding majority in the general election.
In Europe, U.K. Prime Minister Boris Johnson's Conservative Party has won a commanding majority in the country's general election, granting Johnson the power to drive through his Brexit deal and take the U.K. out of the EU before the January 31 deadline.
Meanwhile, the European Central Bank (ECB) left its key interest rates and stimulus package unchanged during Christine Lagarde's first policy meeting in charge on December 12th, with the main refinancing rate remaining at 0% and the deposit rate at -0.5%. It also confirmed that net asset purchases had started in November at a monthly rate of 20 billion euros ($22.3 billion) and that this will continue to run as long as necessary to reinforce the accommodative policy stance.
US stocks surged to new records on Thursday propelled by reports the US and China had reached at trade deal, pending approval from President Donald Trump, to avoid new tariffs due on Sunday, and roll back existing levies, in exchange for purchases of American agricultural products.
In US economic data, new unemployment claims jumped by 49,000 to 2.52 lakh during the week ended 7 December 2019 the highest level since September 2017, though the data was likely affected by the US Thanksgiving holiday.
Wholesale price inflation remained tame, with the producer-price index unchanged in November, with core producer prices, which strips out volatile energy and food prices, falling to a three-year low of 1.3%.
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