Market Closing: Sensex jumps 650 pts; Nifty ends above 18K; Titan, Maruti rally

Indian benchmark indices closed 1% higher for the second day in a row on Monday. Sensex surged 650.98 points to 60,395.63 and Nifty reclaimed the crucial 18,000 level. BSE Midcap and Smallcap indices gained  0.5-1% in line with the benchmarks. ICICI Bank, HDFC, Infosys powered the rally in Sensex. Wipro, Nestle and Asian Paints were the biggest laggards.

Banks, financials and auto stocks were the best gainers. 

India's health ministry said on Monday only 5-10% of active covid patients have needed hospitalisation this time around compared with 20-23% in the previous wave that peaked in May. 

“Indian markets opened on a positive note following mixed to marginally positive Asian market peers as investors await more U.S. inflation data. During the afternoon session markets were trading in fine fettle as sentiments’ were upbeat after three months of selling spree, foreign investors have turned net buyers in the first week of January by infusing ₹3,202 crore in Indian equities. Additional support came as total employment generated by nine select sectors stood at 3.10 crore in the July-September 2021 quarter, which is 2 lakh more than that of the April-June period, according to a quarterly employment survey by the labour ministry. Traders also took solace as India has begun administering booster doses of the COVID-19 vaccine to frontline workers and vulnerable elderly people.”

The Delhi Disaster Management Authority (DDMA) on Monday decided not to impose lockdown to contain the spread of COVID-19 and discussed further restrictions such as closing dine-in facility in restaurants and scaling down seating capacity in Metro trains and buses, officials said. (PTI)

European shares slipped in early trading on Monday after marking their first weekly drop in three last week amid surging Covid-19 infections and an increasingly uncertain interest rate outlook.

The pan-European STOXX 600 dropped 0.4%, as of 0830 GMT, weighed down by real estate, tech and industrial stocks, while major global share markets eked out gains.

Gold prices eased on Monday as traders awaited December U.S. inflation data that could stress the need for earlier-than-anticipated interest rate hikes by the Federal Reserve.

Spot gold was down 0.2% to $1,792.40 per ounce by 0820 GMT, after hitting its lowest level since Dec. 16 of $1,782.10 on Friday. U.S. gold futures fell 0.3% to $1,792.30.

Sachin Bansal-backed Navi Finserv (Navi) will offer high-value personal loans of up to ₹20 lakh through the Navi Lending App, at interest rates starting from 9.9% per annum with tenure up to 72 months.

Customers can avail of loans through the Navi app with flexible loan and EMI options, and zero pre-closure charges if they wish to pre-pay their loans before the chosen tenure.

Tech Mahindra Ltd has partnered with US-based analytics platform Pyze to accelerate digital transformation and application modernization using low code and legacy process optimization.

“Through this partnership, low-code developers, IT teams, and business teams will be able to reduce process inefficiencies faster. It will further enable organizations to improve user productivity and adoption, and maximize ROI of process transformation and application modernization projects,” Tech Mahindra said in a statement.

Revenue growth of Abbott India Ltd (AIL) for FY21 has outpaced the Indian Pharma Market (IPM) growth by 100 bps majorly contributed by addition of new products (15) in therapeutic areas like Gastroenterology, Central Nervous System and Metabolic and consumer health. AIL has leadership position in 9 top brands out of 10 in their respective therapies. Abbott India’ strategy of Going Digital and Services beyond the pill is the key differentiator and game changer for the company.

* Abbott India’ continuous endeavor to move from awareness to compliance to lifestyle modification has resulted in its success in the industry. The above strategy has led Abbott India’ branded business to grow 1.5x -1.8x of the industry growth. Investment Rationale q Delivered Strong Growth: Abbott India reported average growth of 11% as compare to IPM growth of 5.8% during month of October and November for year 2021.

* Abbott India has outpaced the industry growth by 520 bps during last 2 months. Gastrointestinal segment reported strong growth of ~30% led by normalcy in OPD operations in the country. Duphaston (Gynecological) sales have been stabilized as it received competition from Mankind.

* Leadership position in major therapies: AIL retained the leading position (90%) in the respective therapies that involves women’s health, gastroenterology, metabolics, pain management, CNS, and vaccines. AIL has leadership position in 9 top brands out of 10 in their respective therapies Products like Diegene, Brufen, Cremaffin, Influvac reported strong growth based on new features added.

* Healthy cash flow generation strengthening Balance Sheet: AIL reported healthy cashflow generation of ₹470 Cr in H1FY22 that has increased the cash to ₹2,250 Cr in the company’s Balance Sheet. The overall improvement in the Operating Margins in H1FY22led led to higher RoCE. Branded business is expected to improve overall profitability. The company has strong FCFF at 65.0% of EBITDA with high return ratios and dividend payout. Axis Securities recommends BUY with a TP of ₹20,000/share.

The Midcap Index performance was resilient in 2021 despite Covid disruption with the index (+46%) outperforming Nifty (+24%). Likely domestic cyclical recovery and global liquidity could aid midcaps in 2022, said Jefferies in a note on Monday.

The brokerage has recommended a bottom-up approach and its top stock picks in the midcap space are Crompton with target price of ₹605, Dixon Technologies (target price: ₹6,450), Kajaria Ceramics (target price: 1,570) and Supreme Industries (target price: ₹3,130), for their strong brand franchise, cost control, premium launches and entrenched reach.

Asset management company, Axis Mutual Fund, has announced the launch of Axis CPSE Plus SDL 2025 70:30 Debt Index Fund, a target maturity scheme whose benchmark maturity date is 30 April 2025. The new fund offer (NFO), which opened today, will remain open for subscription till 20 January.

The scheme will track the Crisil IBX 70:30 CPSE Plus SDL - April 2025 benchmark and the portfolio is designed to invest predominantly in AAA-rated central public sector undertakings (CPSEs) and SOV-rated State Development Loans (SDL) securities.

A sharp rise in coronavirus cases in India is seen hurting the economy’s growth prospects, albeit milder than during the previous waves.

Economists, including those at Citigroup Inc., India Ratings & Research Pvt., and ICICI Bank Ltd., have lowered their gross domestic product estimates after official data Friday showed Asia’s third-largest economy will likely expand by 9.2% in the fiscal year to March -- a pace that’s slower than the 9.5% previously expected by the nation’s central bank, as well as the International Monetary Fund. (Bloomberg)

Mumbai-based Sunteck Realty on Monday reported a marginal increase in its sales bookings to ₹352 crore for the quarter ended December 2021.

Its sales bookings stood at ₹349 crore in the year-ago period, according to a regulatory filing.

During April-December period of the current fiscal, the company's sales bookings grew by 23 per cent to ₹800 crore from ₹651 crore in the corresponding period of the previous year.

The growth in Indian Pharma Market (IPM) softened to 5.3% year on year in December 2021, as compared to 6.6% recorded in November, according to reports. Ipca Laboratories Ltd, Ajanta Pharma Ltd, Sun Pharmaceutical Industries Ltd, Torrent Pharmaceuticals Ltd, marked the strongest growth in the month. (Full report)

Emerging economies must prepare for U.S. interest rate hikes, the International Monetary Fund said, warning that faster than expected Federal Reserve moves could rattle financial markets and trigger capital outflows and currency depreciation abroad.

In a blog published Monday, the IMF said it expected robust U.S. growth to continue, with inflation likely to moderate later in the year. The global lender is due to release fresh global economic forecasts on Jan. 25. (Reuters)

The year 2022 is likely to witness the start of the rate tightening cycle in U.S. In preceding interest rate hike cycles, gold has performed well as it marks higher inflation, an improving economic cycle and ample liquidity.

The euphoria surrounding crypto currencies if subside, may result in liquidity flowing back to traditional asset classes like precious metals.

Realty major DLF on Friday launched its luxury housing project, comprising 913 units, in the national capital with a starting price of ₹3 crore. DLF is developing this project in partnership with Singapore sovereign wealth fund GIC.

"17950 is a stiff resistance for the Nifty and if we can close above this level, the index can go up to 18500. The overall market trend is positive and intraday corrections can be utilized to accumulate long positions. 17700 is the revised support for this week."

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Radhakishan Damani-promoted retail chain Avenue Supermarts' (DMart) profit rose by 24.6% to ₹586 crore during October-December. Total revenue for the quarter ended December stood at ₹9,065 crore, as compared to ₹7,433 crore in the same period last year.

Gold and silver struggled in Indian markets today, extending recent losses in the precious metals. Gold futures fell 0.16% to two-month lows of ₹47,375 per 10 gram on MCX while silver futures dropped 0.31% to ₹60,420 per kg. In Friday's session, gold had ended flat while silver rose 0.4%

Shares of Bengaluru-based real estate developer Sobha Ltd rose around 4% on the National Stock Exchange in opening deals on Monday after the company reported robust sales performance for the December quarter. In its operational update, the company said that including its share in joint development projects, it has achieved sales volume of 1.32 million square feet (msf), up 17% year-on-year (y-o-y) with sales value at ₹1,048 crore, up 18% y-o-y. Sequentially, however, sales dropped a marginal 2%. Average realisations on a per square feet basis rose 4% sequentially, but was flat compared to Q3FY21.

RBL Bank partners with Google to upgrade the bank’s customer experience strategy

India on Monday reported 410 new cases of Omicron variant, taking the overall caseload to 4,033. Of the total Omicron cases in India, 1,552 patients have been discharged. Maharashtra accounts for the highest number of Omicron cases in the country (1,216)

India logged 1,79,723 fresh Covid-19 cases on Monday, the most since late May, while the active cases increased to 7,23,619, according to the govt data updated at 8 am.

India's largest IT firm said its Board will consider a buyback proposal on 12 January. The Board of the Mumbai-based company is scheduled to meet on 12 January to approve and take on record the financial results of the company for the third quarter.

The third quarter of FY22 will be characterised by growth gathering pace and uptick in collections with recovery in business activities. Leading financiers have reported 3-8% QoQ loan growth and YoY growth, too, has gained traction. With lower slippages and improving collections/recoveries, we expect improvement in the overall stress pool and credit cost for banks. Behaviour of ECLGS lending pool and restructured portfolio would be key to watch out. For NBFCs/HFCs, the RBI’s notification relating to harmonisation of IRACP norms would likely result in an uptick in GNPAs. However, excess provisioning under ECL framework over IRACP norms is likely to limit rise in credit cost. HFCs are now required to implement minimum 50% LCR, the drag may weigh on their NIMs. For Q3FY22, we estimate 9% YoY growth in NII for banks, 2-4% operating profit growth while subsiding credit cost is expected to support >35% earnings growth.

Preferences and recommendations:

Growth momentum is gaining traction for HDFC Bank, Kotak, Federal and stress is being managed well by SBI, Axis Bank, thereby, improving visibility on earnings trajectory. We stay with them as our preferred picks. Amongst non-banks, we prefer Aditya Birla Capital, HDFC, Chola and CreditAccess Grameen.

Engineering, procurement and construction major KEC International on Friday said it has bagged new orders worth ₹1,025 crore across its various businesses.

The company's transmission and distribution business has secured orders for projects in India and the Middle East, the RPG Group firm said in a filing to the BSE.

Packaged consumer goods firms witnessed an increase in demand in the past two weeks as consumers stocked up in the wake of rise in covid-19 cases across the country, and have ramped up supplies to their stockists to avoid supply shortage.

Companies such as Parle Products Pvt. Ltd, Dabur Ltd, and ITC Ltd, which are already facing inflationary pressures on inputs, are keeping extra stock of raw materials to avoid any disruptions in the supply chain due to the fresh wave of the pandemic, putting in use their learnings from the past two waves. (read more)

Radhakishan Damani-promoted retail chain Avenue Supermarts' (DMart) profit rose by 24.6% to ₹586 crore during October-December. Total revenue for the quarter ended December stood at ₹9,065 crore, as compared to ₹7,433 crore in the same period last year.