The domestic equity market ended with decent gains on Wednesday. Shares rebounded in the last hour of trade on report that the United States and China were moving closer to agreeing on the amount of tariffs to be rolled back in a phase-one trade deal. Following the news reports, the US Dow futures jumped 148.5 points.
The barometer index, the BSE Sensex, rose 174.84 points or 0.43% to 40,850.29. The Nifty 50 index rose 49 points or 0.41% to 12,043.20.
Both these indices fell as much as 0.49% in afternoon trade after U.S. President Donald Trump on Tuesday said a trade deal with China might have to wait until after the 2020 presidential election.
The Nifty fell 1.29% in three sessions to 11,994.20 on Tuesday, from its close of 12,151.15 on 28 November 2019.
In the broader market, the S&P BSE Mid-Cap index rose 0.52% while the S&P BSE Small-Cap index advanced 0.33%.
The market breadth turned positive in late trade. On the BSE, 1241 shares rose and 1222 shares fell. A total of 210 shares were unchanged.
Economy:
The Reserve Bank of India (RBI)'s monetary policy outcome is due on Thursday. Investors are hoping for a 25 basis points rate cut.
The Union Cabinet on Wednesday approved six bills including the Citizenship Amendment Bill and extended reservation for SCs and STs in the Lok Sabha and the State Assemblies for another 10 years. Information and Broadcasting Minister Prakash Javadekar said the Bill will be introduced in Parliament in a day or two. The Cabinet also approved land monetisation at Pragati Maidan to build a five-star hotel.
The Cabinet also approved the launch of Bharat Bond Exchange Traded Fund (ETF). Bharat Bond ETF would be the first corporate bond ETF in the country. It will provide additional money for CPSUs, CPSEs & other government organizations.
Further, Finance Minister Nirmala Sitharaman said that the government is looking into the issue of unpaid GST compensation to certain states. The finance ministers of Delhi, Punjab, Puducherry and Madhya Pradesh and representatives Kerala, Rajasthan, Chattisgarh and West Bengal attended the meeting over delay in payment of compensation.
Global credit rating agency Standard & Poor's reaffirmed India's sovereign rating at 'BBB-' with stable outlook. S&P said that India's economy continues to achieve impressive long term growth rates despite a recent deceleration. The economic slowdown is cyclical rather than structural. Furthermore, S&P expects the economy to outperform its peers on the back of rising domestic demand and strong demographics.
Meanwhile, the IHS Markit India Services Business Activity Index grew 52.7 in November from 49.2 in October, signalling output growth for the first time in three months. The upturn was associated with a pick-up in demand, improved technology and rising client numbers. That said, the headline figure remained below its long-run average of 54.2.
Foreign Markets:
European stocks bounced back from early losses after media reports suggested that the U.S. and China were edging closer to a trade deal. According to reports, the two countries were moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal.
Asian markets ended lower on Wednesday after an overnight fall in US stocks.
Speaking to reporters in London on Tuesday, Trump said he had "no deadline" for striking a deal with Beijing. It had previously been expected the world's two largest economies could sign a so-called "phase one" trade deal before the end of 2019.
Trade tensions escalated on other fronts, including Brazil, Argentina and France after Trump said he was bringing back tariffs on Brazilian and Argentinian steel, while the administration also proposed tariffs of up to 100% on $2.4 billion in French imports.
In the U.K., several world leaders have gathered in London to mark the 70th anniversary of NATO.
Buzzing Indices:
The Nifty Metal index rose 1.51% to 2,602.85. The index lost 2.60% in the previous session amid US-China trade deal worries.
NMDC (up 4.62%), SAIL (up 3.42%), Vedanta (up 3.15%), Jindal Steel & Power (up 2.84%), Hindalco Industries (up 2.6%), Tata Steel (up 2.42%), JSW Steel (up 1.11%), NALCO (up 0.69%) and Hindustan Zinc (up 0.4%) advanced.
The Nifty IT index jumped 1.62% to 15,161.85, extending Tuesday's 0.46% rise.
Mindtree (up 4.11%), Hexaware Technologies (up 3.74%), Wipro (up 2.30%), Mphasis (up 2.12%), Tech Mahindra (up 1.71%), Persistent Systems (up 1.65%), Infosys (up 1.41%), TCS (up 1.39%), Oracle Financial Services Software (up 0.73%) and HCL Technologies (up 0.11%) advanced.
Stocks in Spotlight:
Shares of CSB Bank settled at Rs 300.1 on BSE, a premium of 53.90% over the initial public offer (IPO) price of Rs 195. The stock debuted at Rs 275, a premium of 41.02% to IPO price. The stock hit a high of Rs 307 and low of Rs 275.
The CSB Bank IPO received bids for 100.44 crore shares as against 1.15 crore shares on offer. The issue was subscribed 86.93 times. The issue opened for bidding on 22 November 2019 and closed on 26 November 2019. The price band was fixed at Rs 193 to Rs 195 per share.
HDFC Asset Management Company declined 3.26% to Rs 3329.10. The company's promoter, Standard Life Investments, kicked off its offer-for-sale (OFS) issue to offload 2.23% stake in the fund house. The OFS opened for institutional investors today, 4 December. The trading window will open for retail investors on Thursday, 5 December. The floor price for the sale has been set at Rs 3,170 per equity share.
Standard Life is offering 47.50 lakh shares with an option to sell an additional upto 38.50 lakh shares. Retail investors are offered upto 8.60 lakh shares while the non-retail investors are offered upto 77.40 lakh shares.
On the first day of the bidding for OFS today, 4 December 2019, bids were received for 73,41,323 shares from the non-retail investors, representing a subscription of 94.85%.
ICICI Bank gained 4% to Rs 529.35 after global brokerages maintained bullish stance on the stock.
A global research firm has reportedly maintained an 'overweight' stance on the stock with a price target of Rs 775 per share. Another foreign brokerage has reportedly maintained a 'buy' rating on ICICI Bank and has raised the target from Rs 610 to Rs 645 per share.
Yes Bank advanced 5.97% to Rs 63.05 on bargain hunting after a recent sell off. The stock slipped 15.06% in the past three trading sessions to settle at Rs 59.50 yesterday, 3 December 2019, from its close of Rs 70.05 on 28 November 2019.
The recent sell off was triggered by the bank's board approving a decision to raise upto $2 billion through preferential allotment of shares. The bank, in an exchange filing post trading hours on 29 November, said that various investors have expressed willingness to subscribe to equity shares of the bank. The stock declined amid reservations about the quality of the investors.
Tata Motors surged 7.11% to Rs 169.40 after Jaguar Land Rover reported best ever U.S. November sales.
Tata Motors' UK unit, Jaguar Land Rover (JLR)'s total November U.S. sales reached 12,472 units, up 6% from November 2018. For the calendar year, JLR achieved 111,895 units, an increase of 3% compared with 108,377 units in 2018.
For the month of November, Jaguar sales were 2,958 units, 7% lower than a year ago. For the month of November, the Land Rover brand sold 9,514 units, an increase of 11% from 8,547 units in November 2018.
Edelweiss Financial Services rose 1.30% to Rs 113.10. The proposed Bharat Bond ETF will be rolled out by Edelweiss Asset Management Company (AMC). The ETF will carry expense ratio of 0.0005%.
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