Closing Bell: Nifty above 20,250, Sensex up 493 pts; FMCG, power gain, autos drag

With exit polls of the recent state elections showing an upper hand to BJP, markets have reacted positively to the development today. If the final results of elections which are scheduled on Sunday are also on the same lines, we expect markets to further cement gains. The image of the BJP as a pro-reformist and the performance of the economy on various fronts, especially during the COVID period and gloomy global economic situation, have provided market participants confidence that a dual-aided right-wing government is beneficial in the longer term.

As we move closer to the 2024 general elections, we believe that any decisive win by the BJP in key states would send a strong message to investors betting on India’s rising growth potential and position the country on a stronger footing as compared to its peers.

Frenzied buying on the back of renewed optimism from the FIIs and positive European market cues lifted benchmark Nifty to a fresh record high. India remains a bright spot in an uncertain global economy as the recent data indicators such as strong GDP and manufacturing numbers along with external factors like falling US bond yields are keeping markets in good stead.

The good news is that the short-term technical outlook for Nifty continues to be in favor of the bulls, with support seen at 20089-19909 and resistance at 20500-20751.

The dispatches from PV OEMs in November displayed flattish growth despite the festive period owing to sustained weakness in the entry level portfolio. The utility portfolios of all OEMs showed healthy growth driven by the solidifying premiumization trend. The OEM’s had offered 25-30% higher discounts for lower end models but unexpectedly uneven monsoons deteriorated semi-urban and rural markets even further.

We expect discounts to increase in December, but will be more towards entry-level models and not on the premium ones. The EV car demand was stagnant, with Tata Motors’ EV portfolio growing by 7% YoY. PV exports saw a revival as foreign markets start looking up due to inflation around the globe cooling further. Going forward, we expect the small car portfolio to see a revival following the onset of the wedding season in December and anticipate some pre-buying from dealers due to the scheduled price hikes post January.

A reason to celebrate as Nifty reaches historic highs today! The Mid-Small Cap segment is also on the rise, fueled by faster-than-expected economic growth in the September quarter and increased optimism regarding the global interest rate outlook.

Nifty concluded at 20,267.90, marking a gain of 134.75 points or 0.67%, while Sensex reached 67,481.19, climbing 492.75 points or 0.74%, just 446 points away from its all-time high of 67,927.23. Although today's figures could have been higher, investors exercised caution due to the upcoming election results scheduled for Sunday.

Data signals a potential rally for Nifty, projecting an upward move to 20,600 in the coming sessions, with a robust support level at 20,150. However, there might be a pause in case of unfavorable election results. The overall trend remains positive, painting an optimistic picture for the market.

Markets edged higher for yet another session and gained over half a percent. Among the benchmark indices, Nifty made a new record high at 20,291.55 and finally settled at 20,267.90 levels. Most sectors contributed to the move wherein FMCG, realty and metal were among the top gainers. The broader indices too continued their positive trend and settled higher in the range of 0.50%-1.05%.

The rotational buying across the key sectors is helping the index to inch higher and we are now eyeing 20,500 in Nifty ahead. Apart from the domestic factors, upbeat global cues, especially the performance of the US markets, are further adding to the positivity. We thus recommend continuing with a “buy on dips” approach with a focus on stock selection.

Better-than-estimated India GDP numbers will raise the growth outlook for FY24 and provide cheer for the market to continue its upward momentum. The capex by the government and the pickup in manufacturing activity, led the capital goods and infra stocks to outperform.

The global market too rallied on hopes that the ECB has completed its rate-hiking cycle on the back of easing inflation and ahead of the FED chair speech today. Oil prices continued to move on the downside despite the OPEC+ supply cut, which will support the H2FY24 operating margins of the corporations. The auto sales numbers witnessed a festival cheer, while the premium valuation restricted the upside potential.

Indian rupee ended 11 paise higher at 83.29 per dollar versus previous close of 83.40.

: Benchmark indices ended higher for the fourth consecutive session on December 1 with Nifty above 20,250.

At close, the Sensex was up 492.75 points or 0.74 percent at 67,481.19, and the Nifty was up 134.70 points or 0.67 percent at 20,267.90. About 2041 shares advanced, 1566 shares declined, and 132 shares unchanged.

Biggest gainers on the Nifty included NTPC, ITC, L&T, Britannia Industries and Axis Bank, while losers were Hero MotoCorp, HDFC Life, Wipro, M&M and SBI Life Insurance.

Except Auto, all other sectoral indices ended in the green with Capital Goods, FMCG, Metal, Power and Realty up 1-1.5 percent each.

BSE Midcap index added 1 percent, while smallcap index up 0.5 percent.

-Equal-weight call, target Rs 1,028 per share
-Cut India soda ash prices by 4 percent
-This is fifth price cut since April, implies a cumulative price cut of $90/T since April
-Company’s India soda ash makes up 12-15 percent of total basic chemistry volumes
-India contributes 30 percent of consolidated F24 EBITDA
-See limited upside to pricing and margins in near term
-See limited upside amid well supplied markets and competition from imports
-Costs and demand greenshoots will be key to watch

Sensex Today | BSE FMCG Index gained 1.5 percent supported by S H Kelkar, Agro Tech Foods, Andrew Yule:

-Outperform call, target Rs 7,050 per share
-NDR takeaways show company expects to improve cross-selling
-NDR takeaways show increase number of services used by a client to 5-6 versus 2-3 currently
-NDR takeaways show company to grow its top-100 accounts to drive 70 percent of revenue
-Manufacturing, energy, travel & insurance segments expected to see better growth versus other segments
-M&A might be an option for the healthcare vertical as it is currently small

We see crude oil prices falling under $70 in coming sessions as the OPEC+ conclusion lacks clarity on the quota of members oil cuts, which largely remain a voluntary discretion of members. Eight members of OPEC+ decided to announce further additional cuts totalling almost 2.2mbpd for 1Q24. However, this includes the rollover of Saudi Arabia’s current additional voluntary cut of 1mbpd, as well as Russia’s export cut of 500mbpdd.

We expect oil market balance to remain in surplus in Q12024 at the present level of productions cuts from OPEC+. On the other hand, EIA reported US production to have hit all time high of 13.24 mbpd last week. Overall demand has been weakening in Q4, while supplies are becoming plentiful from non-OPEC nations.

The economic data from US signals slowdown in coming quarters and China remain sluggish. We remain bearish on crude oil with prices testing the support of $72 and $70 in short term.

-Overweight call, target Rs 9,300 per share
-Company announced acquisition of Kesoram's cement business
-Acquisition of Kesoram's cement business is incrementally positive for the industry
-UltraTech’s acquisition of Kesoram reduces the risk of excess organic supply medium-term
-The acquisition also positive for the company given its increased footprint in the South
-Acquisition should help drive economies of scale and thus potential operating synergies

Oil prices pared losses on Friday, after falling sharply in early trade and by over 2% on Thursday on perceptions that the voluntary oil output cuts agreed by OPEC+ producers were underwhelming.

Brent crude futures for February rose 6 cents, or 0.1%, to $80.92 a barrel by 0820 GMT. U.S. West Texas Intermediate crude futures rose 17 cents, or 0.2%, to $76.13.

OPEC+, which pumps over 40% of the world's oil, is focusing on reducing output as prices have fallen from about $98 in late September amid concerns over weaker economic growth in 2024 and expectations of a supply surplus.

Saudi Arabia, Russia and other members of OPEC+ agreed to voluntary output reduction of 900,000 bpd in addition to extending 1.3 million bpd in production cuts already in place. Delegates had earlier discussed as much as 2 million bpd in new output curbs.

Sensex Today | Market at 3 PM

The Sensex was up 481.21 points or 0.72 percent at 67,469.65, and the Nifty was up 136.10 points or 0.68 percent at 20,269.30. About 1996 shares advanced, 1208 shares declined, and 102 shares unchanged. 

-Overweight call, target Rs 2,182 per share
-DAC cleared acceptance of necessity worth Rs 2.23 lakh crore with 98 percent indegenisation
-HAL products include LCA MK1A, LCH and Su-30 upgrades
-The combined HAL produces are estimated at approximately Rs 1.11 lakh crore
-Rs 1.11 lakh crore value includes 97 units of LCA MK1A 156 units of LCH (Rs 45,000 crore)
-Rs 1.11 lakh crore value includes 12 units of SU-30 MKI upgrades (Rs 11,000 crore)
-Clarity on ordering and execution time line are still to come

Sensex Today | BSE Auto index down 0.4 percent dragged by Ashok Leyland, UNO Minda, Tube Investment:

Shares of Sharika Enterprises jumped over 10 percent after the company said it got an order for turnkey project worth Rs 61.4 crore from J&K Power

Laurus Labs is gearing up to transform itself from a pure ARV API and FDF player to more of a valued CDMO and non ARV API and FDF player. For this the company has been investing heavily over the last 3 years at an estimated cost of Rs 26.0 – Rs 27.0 billion across FDF, API and CDMO segments as also to take advantage of the favorable trend taking shape towards contract manufacturing for both bulk and finished formulations.

However, we do believe that as the CDMO custom synthesis business is undergoing R&D for several projects and has Animal Health and Crop Protection deals, which are yet to add to revenue substantially, broking house do not expect meaningful impact on profitability until after FY26E.

KRChoksey envisage an 11.6% CAGR and flat CAGR in earnings over FY23-FY26E and value the company’s shares at 26x its FY26E EPS of Rs. 15.5 and arrive at a target price of Rs 403, which is 8% above its CMP. Initiate with an ACCUMULATE rating on the shares.

Sensex Today | BSE Metal index up 1 percent supported by Vedanta, Jindal Steel, Nalco:

UltraTech Cement will acquire the cement business of Kesoram Industries on a share swap basis. Shareholders of Kesoram Industries will get one share of UltraTech Cement for every 52 shares held by them. For Kesoram Industries, the transaction will unlock the value of the cement business for the shareholders of the company and also substantially deleverage the balance sheet including reduction of debt and outflow of interest.

In a clarification note, Jammu and Kashmir Bank said the news of search conducted by the Enforcement Directorate in the money laundering case at six locations in Srinagar (J&K) related to fraudulent loan of more than Rs 250 crore is pertained to J&K State Cooperative Bank and is not attributable to Jammu and Kashmir Bank.

Tata Technologies Ltd. more than doubled in its trading debut, with the surge putting the company on track to deliver the best listing gains ever for any Indian initial public offering of comparable size.
Shares gained as high as Rs 1,400 versus an offer price of Rs 500.

The engineering research unit of Tata Motors Ltd., the maker of Jaguar Land Rover cars, raised Rs 30.4 billion in an IPO that was oversubscribed 69 times. It is the first company to list from the salt-to-software Tata conglomerate since 2004.

Tata Tech is trading at a P/E multiple of 75.6x at a CMP of Rs 1,337, which appears to be comparable to its peers. We believe that these valuations are not sustainable, and we would recommend booking profits on the counter over the next couple of weeks. For long term investors we believe that there would be better entry points in the next 5-6 months when this stock could be available at cheaper valuations.

Strong optimism in the domestic market has fueled the surge in IPO listings in the last 2-3 years. A large number of IPOs have been listed at a substantial premium making IPOs an attractive method to invest in good quality companies. We see the IPO frenzy fading after a couple of months as the global economy starts slowing down in CY 2024.

The board of directors of JSW Energy, at its meeting held today, based on the recommendation of the Compensation & Nomination and Remuneration Committee, has approved the appointment of Mr. Sharad Mahendra as a Whole-time Director (Joint Managing Director & CEO – Designate) of the company with effect from December 1, 2023.

Shares of PVR-Inox gained 2 percent to day's high of Rs 1,755 per share on December 1 after the company opened its new 6-screen property at Jio World Plaza in Mumbai. With another Imax screen, the multiplex operator has taken the total tally of Imax screens to 4 in Mumbai and 22 in India.

In the past month, the stock of PVR-Inox has surged 8 percent as against a 6 percent rise in the benchmark Sensex.

Apart from movie offerings, PVR-Inox has also opened a bar and lounge at Mumbai's Jio World Plaza. Read More

After rising 2 percent intraday, Hindustan Petroleum Corporation Ltd (HPCL) shares erased the gains to trade flat on December 1.

HPCL plans to start operations at the 5 million tonne a year Chhara LNG import terminal in Gujarat in the next couple of months and has already got offers from 6-7 parties to hire capacity, a senior company official said on Thursday.

Sensex Today | BSE Midcap index gained 1 percent supported by POwer Finance, REC, NHPC:

Balrampur Chini Mills will file an appeal for the demand raised by the I-T Department in the Assessment Order amounting to Rs 33.55 crore. The company has received an assessment order, pertaining to AY 2020-21, wherein certain additions / disallowances with respect to the income shown in the income tax return, have been proposed by the Assessing Officer.

-Outperform call, target Rs 9,450 per share
-Company entered into an agreement to acquire cement business of Kesoram via share swap (1:52)
-The Kesoram acquisition implies an estimated value of Rs 7,500 crore
-Kesoram has a total capacity of 10.75 million tonne (clinker backed 8.5 million tonne) in South India (Gulbarga Region)
-Kesoram operated at 65 percent utilisation in FY23
-The acquisition with ongoing organic expansion, would take company’s total capacity to 192 million tonne
-Total capacity to reach 192 million tonne in next 4 years
-Total capacity rise will bring company a step closer to its stated goal of 200 million tonne capacity by FY28

Dixon Technologies' subsidiary Padget Electronics has inaugurated a new smartphone manufacturing plant in the Noida, Uttar Pradesh. The new manufacturing facility has commenced the production of smartphones for global technology giant - Xiaomi India in Q3-2023.

The Reserve Bank of India approved the dilution of shareholding by promoter, FIH Mauritius Investments (FIHM), in the paid-up capital of CSB Bank. This is in line with the extant RBI Master Direction. FIHM will bring down its shareholding to 26% in the bank within 15 years from the date of completion of investments instead of 15% as advised by RBI at the time of approval of the investment proposal of FIHM in the year 2018.

Profusion Investment Advisors LLP sold 19.4 lakh equity shares in Timken India via open market transactions. These shares were sold at an average price of Rs 2,890.41 per share, amounting to Rs 560.92 crore.

SEAMEC has entered into a Memorandum of Agreement (MOA) with M/s. SHIPS & BOATS OIL SERVICES, for Purchase of Vessel “SEA PEARL”, for USD 7,000,000.

The acquisition will be around the third week of January, 2024 as per the terms of agreement, upon completion of required formalities.

Sensex Today | Market at 1 PM

The Sensex was up 511.87 points or 0.76 percent at 67,500.31, and the Nifty was up 144.10 points or 0.72 percent at 20,277.30. About 2022 shares advanced, 1138 shares declined, and 106 shares unchanged. 

At 7.6%, India's Q2 GDP growth beats street estimates. In line with the trend witnessed at the time of IIP's data release in September 2023, the GDP growth of the mining and manufacturing industry has also seen an uptrend of nearly double growth.

Data released by the Indian Bureau of Mines in July 2023 showcased India's significant surge (10.7% compared to the same month the previous year) in the mineral production sector. Plus, with crude oil prices falling and India's natural gas production surging 9.3% Y-o-Y in October 2023, the growth in mining appears to complement the overall sentiment.

Overall, the Q2 GDP data surpasses RBI estimates (6.5%). These growth numbers come across as taking effect from a decent Q2 profit and earning releases by companies, increasing demand for credit and ease of borrowing, and such. However, the effect of poor agri performance and the underperformance of the service industry remains to be seen in the second half of the financial year.

Milind Patil has retired as Chief Financial Officer of Pfizer with effect from November 30, 2023. Consequently, Patil also ceased to be a senior management personnel of the company.

Broking house expect execution to pick up in the coming quarters due to a healthy order book and margins to stabilise in the coming quarters due to the softening of commodity prices.

It assign an Accumulate rating with a Target Price of Rs 2,913 and roll forward our valuation based on FY26 EPS at a P/E of 38x.

At 7.6% YoY, growth momentum continued in Q2 FY 2024. Robust growth in investments and government expenditure led to the higher-than-expected GDP print. Private consumption growth was modest on a high base.

Due to a comparatively dry monsoon, manufacturing and mining activities were robust. Both registered double-digit growth on an annual basis. The agriculture sector was subdued as erratic monsoon weighed on kharif crop output. Meanwhile, services growth also remained strong on an unfavourable base. RBI had projected GDP growth in Q2 FY 2023 at 6.5%.

The strong reading would lead RBI to revise its full-year growth projections at its next meeting. Given the positive growth and inflation backdrop, the central bank will remain on hold on policy rates.

Sensex Today | BSE Smallcap index up 0.7 percent led by Shalimar Paints, Datamatics Global Services, Oriental Hotels:

The dollar dipped on Friday, while the euro edged higher after steep overnight losses as traders weighed data that showed inflation was easing, stoking expectations that interest rates had peaked and central banks would soon start cutting rates.

The dollar index, which measures the U.S. currency against six rivals, was 0.116% lower at 103.33, after clocking its weakest monthly performance in a year in November, despite a 0.6% jump overnight.

Data on Thursday showed U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest in more than 2-1/2 years.

-GDP growth for September was higher than we expected at 7.6 percent YoY
-Mark our GDP growth forecasts for FY24 to 6.9 percent YoY (from 6.4 percent)
-Raise GDP growth forecast driven by robust domestic demand
-Maintain our FY25 growth estimate at 6.5 percent

The first trading day of December month witnessed a strong start, with Nifty achieving a new record high and Sensex surging by over 400 points. These dynamic market movements in key indices coincide with our GDP data surpassing expectations for the July-September quarter.

In the derivatives, notable Open Interest (OI) is observed in Nifty's 20300 Call strike, with 23 lakh shares, and the 20000 Put strike, which displays substantial OI of 60 lakh shares. Turning to Bank Nifty, the 44500 Call strike stands out with a meaningful OI of 19 lakh shares, while the 44500 Put strike on the opposite side holds a sizeable OI of 14 lakh shares.

It's essential to approach the market cautiously, considering that exit polls are non-directional. Investors may consider booking partial profits, given the one-way rally from 19800.

Aether Industries has informed that the Gujarat Pollution Control Board has ordered through the correspondence dated November 30, 2023, not to carry out production activity at the affected site until further instructions, and to pay Rs. 50 lakhs as Interim Damage Compensation.

NCC has received two new orders Rs 553.48 crores (Excluding GST) in the month of November 2023. The orders are relating to building division. These orders are received from private agency and does not include any internal orders.

Zydus Lifesciences has received final approval from the United States Food and Drug Administration (USFDA) for Ivabradine Tablets, 5 mg and 7.5 mg.

Ivabradine is indicated to reduce the risk of hospitalization for worsening heart failure in adult patients with stable, symptomatic chronic heart failure with reduced left ventricular ejection fraction. It is also used in children aged 6 months and older for the treatment of stable symptomatic heart failure due to cardiomyopathy. The drug will be manufactured at the group’s formulation manufacturing facility at Ahmedabad SEZ, India.

Venus Remedies has received marketing authorizations for Paclitaxel 100mg/16.7ml and Zolendronic Acid 4mg in the Philippines, located in the dynamic region of Asia (South East).

ln addition, the company has also secured marketing authorization for Bleomycin 15 IU from SaudiArabia.

Shares of Delta Corporation jumped over 6 percent on December 1, a day after it announced a foray into the real estate sector through a joint venture with Peninsula Land. Delta Corp will invest Rs 99.99 crore in Peninsula Land, which will issue 1.5 crore equity shares and 77.27 lakh CCDs at Rs 44 to the listed gaming company.

Both firms will also start a joint venture of Rs 250 crore where Delta Corp will be the major shareholder, the company said in a regulatory filing.

“Considering that Delta Corp’s flagship project at Dhargalim, Goa has been deferred and given its free reserves and cash flows, the company sees a compelling opportunity for long-term growth in this sector,” Delta Corp said. Read More

Gold prices were set to mark a third straight weekly rise on Friday, after data showing cooling inflation cemented bets for a rate cut in the U.S., with traders looking forward to comments from Federal Reserve's Chair Powell later in the day.

Spot gold rose 0.2% at $2,039.42 per ounce by 0427 GMT, after marking an over $60 rise in November - its second straight monthly rise.

U.S. gold futures for February delivery rose 0.1% to $2,059.

Sensex Today | Market at 12 PM:

The Sensex was up 525.21 points or 0.78 percent at 67,513.65, and the Nifty was up 148.60 points or 0.74 percent at 20,281.80. About 2081 shares advanced, 1052 shares declined, and 106 shares unchanged. 

Shares of Dixon Technologies climbed nearly 2 percent in trade on December 1 after the launch of a smartphone manufacturing plant in Noida. At 10:33 am, the stock was trading at Rs 5624.03 on the NSE.

Dixon Technologies subsidiary Padget Electronics has opened a smartphone manufacturing facility in the Noida, Uttar Pradesh, and it has started production of smartphones for global technology giant Xiaomi, according to an exchange filing on November 30.

The Noida plant is built across 2.7 lac square feet and has an annual capacity of making 25 million units. The plant represents a significant stride in India's efforts to bolster its footprint in local smartphone manufacturing the notification said. Read More

India GDP growth rose to 7.6% in July-September quarter, beating street estimate of 6.8%, and maintaining its status as the fastest-growing major economy in the world.

This growth has outperformed RBI's projection of 6.5%, largely propelled by robust consumption, increased government expenditure and vigour in service activity and urban demand, despite the challenges posed by geopolitical issues and the global economic downturn affecting export growth. Notably, in the quarter, sectors like oil and gas, automobiles, and construction have shown substantial increases in profitability.

However, we believe that the impact of climate change and erratic rainfall, the possible slowdown in capex as we approach the general elections, lower external demand due to geopolitical risk and global slowdown might translate into lower GDP growth in coming quarters.

The Indian equity market is in a strong bullish mood and is hitting a fresh all-time high. We may continue our momentum and outperform our other global peers, backed by the strong fundamentals and under-ownership of FIIs. FIIs may become net buyers amid rising US bond yields and the strong macroeconomics of India. State election results may create some kind of volatility, but we are preparing ourselves for a pre-election rally. In terms of level, 21,000 looks like an easy task in the near term for the Nifty.

When it comes to portfolio construction, Kotak Mutual Fund's Pankaj Tibrewal says that it is crucial to aim for a portfolio that can withstand significant drawdowns and avoid permanent capital losses. In a note, as he moves on from his role at Kotak after 14 years, Tibrewal said that while he is still mastering the art of portfolio construction, his preferred approach is creating a diversified portfolio - the "Gorilla to King Kong Strategy." READ MORE

-Details reveal that industry was stronger than services
-Urban was stronger than rural
-Weaker FDI inflows, a likely softness in credit growth, and normalising base effects
-Over the next few months, could soften growth from these levels

Shares of Dixon Technologies climbed nearly 2 percent in trade on December 1 after the launch of a smartphone manufacturing plant in Noida. At 10:33 am, the stock was trading at Rs 5624.03 on the NSE.

Dixon Technologies subsidiary Padget Electronics has opened a smartphone manufacturing facility in the Noida, Uttar Pradesh, and it has started production of smartphones for global technology giant Xiaomi, according to an exchange filing on November 30. Read More

Megastar Foods announced on Thursday, that its Board of Directors had approved the issuance of up to 13,00,000 equity shares on a preferential basis to promoters, non-promoters and public shareholders of the company.