Share Market Highlights: Sensex, Nifty end muted after hitting record highs; M&M, SBI, NTPC, ITC top gainers

Sensex nears 50,000: Five big risks that could disrupt the rally on Dalal Street

The barometer of stock market, the Bombay Stock Exchange's (BSE)  30-share index Sensex, is within kissing distance of key 50,000 mark. It's a remarkable feat as the index rose from 25,638 points in March last year after the outbreak of Covid  and the news of subsequent lockdown. Sensex has almost doubled in a year's time. This frenzy in the market is expected to continue due to roll-out of vaccine globally, normalisation of business operations  and the monetary and fiscal support from the government. Like they say , everything that goes up, comes down. What are the big risks or things that could disrupt the rally and bring down the market.

Sensex nears 50,000: Five big risks that could disrupt the rally on Dalal Street

Indigo Paints IPO opens on 20 January

The Rs 1,000 crore initial public offering (IPO) for Indigo Paints will be open for subscription on January 20, 2021 and close on January 22. The company received a nod from market watchdog Securities and Exchange Board of India (SEBI) earlier in January. The Sequoia Capital-backed company has filed preliminary papers with SEBI for the IPO in November last year.

Indigo Paints’ plan to raise about Rs 1,000 crore through the public issue from the capital markets, that comprises fresh issuance of shares of Rs 300 crore and an offer-for-sale of up to 58,40,000 equity shares by Investor Selling Shareholder Sequoia Capital through its SCI Investments IV and SCI Investments V and Promoter Selling Shareholder, Hemant Jalan.

Bharti Airtel share rises over 6%

Share of Bharti Airtel rose over 6 per cent today after the company said it has received approvals for relevant downstream investments post FDI nod from the Department of Telecommunications. Bharti Airtel stock touched an intraday high of Rs 601.8, rising 6.37% against previous close of Rs 565.75 on BSE.

The large cap stock has gained 8.42% in the last 3 days. The stock opened with a gain of 3.93% at Rs 588.

Bharti Airtel share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Bharti Airtel share rises over 6% after telco receives nod to raise FDI limit

India Real Estate sector update

Manish Agrawal from JM Financial Institutional Securities said,"As real estate consolidation picks up pace in the post pandemic era we look at the historical data points and see how it has panned out over the years. We note in Tier 1 cities (Bangalore, Chennai, Kolkata, Hyderabad, MMR, NCR and Pune) the share of projects from top 25 developers has gone up to 5% in CY19 (3% in CY16) while the share in units has gone up to 14% in CY20 (10% in CY16; peak of 16% in CY19). We further delve deeper and observe markets like Gurugram and Noida have seen maximum consolidation (63% / 82% share of units launched by top 10 developers in CY19-20 respectively) while Hyderabad has actually seen the share of top 10 developers go down over the years (24% in CY11-12 to 18% in CY19-20) as competition has stepped up on launches. Even in the listed space, we find mid-sized developers looking to scale-up opportunistically by launching projects and acquiring new land parcels (Birla Estates: started in FY16 and has 3.6msf under construction; Kolte Patil: targets 2x sales in 3-4 years; Mahindra Lifespaces: targets 2.5x sales in 3-4 years; Sunteck Realty: has done large acquisitions in MMR region). While we believe the consolidation will increase going further but the extent of it remains to be seen."

Brent crude futures at 11 month high

Brent crude futures, the global oil benchmark, rose 1.34 per cent to USD 57.34 per barrel. Oil price hit 11 month high as restricted crude supply and expectation of fall in US crude inventories overshadowed concerns regarding rising covid-19 cases.

Rupee surges 13 paise to 73.12

Indian rupee, the domestic currency appreciated for the second straight session, rising 13 paise to 73.12 per dollar on Wednesday's opening trade, as heavy buying in domestic equities and weakness of the American currency in the overseas market lifted investor sentiment. Moreover, FPI flows into the domestic equity markets also supported the domestic unit.

The domestic unit opened at 73.16 per dollar at the interbank forex market, inched 13 paise higher to 73.12 against the greenback over its previous close.

On Tuesday, the domestic currency recouped yesterday's losses and closed 15 paise higher at 73.25, supported by weakness in the greenback overseas and recovery in domestic equities.

Rupee surges 13 paise to 73.12 amid weak dollar, positive FPI flows

Tata Elxsi share rises 11%

Tata Elxsi share rose nearly 11% today after the product design arm of the Tata Group reported a 39.5 per cent rise in Q3 net profit. Share of Tata Elxsi touched an all-time high of Rs 2,299.9, rising 10.73% against the previous close of Rs 2,087.60 on BSE.

The stock opened with a gain of 4.86% at Rs 2,150.

Tata Elxsi share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. The stock has gained 23.24% since the beginning of this year and risen 153.46% since the beginning of this year.

In a month, the mid cap share has gained 40.8%. Market cap of the firm rose to Rs 14,076 crore.

Tata Elxsi share rises 11% post strong Q3 earnings

CPI inflation & IIP data

Deepthi Mathew, Economist at Geojit Financial Services.

"After eight months, the inflation rate has fallen back to the permissible range. The decline is mainly contributed by the fall in food prices, especially vegetables. Vegetable price registered a negative growth rate of 10.4 per cent YoY in December'20. Though the fall in inflation was a relief,  contraction in IIP is a cause of concern. It shows the weak demand in the economy. The manufacturing sector contracted by 1.68 per cent in November'20, compared to a growth of 4.12 per cent in October'20. Festive demand aided the positive growth in October"

 

Nifty Outlook

Geojit Financial Services said in its note," After stalling an hour or so near 14540, our first objective, Nifty marched ahead, ideally heading for 15200. Meanwhile 14700 appears an intermediate objective, with 14470/40 as the downside marker for the day."

 

Global markets

Asian markets are trading mixed as investors look for details on coronavirus front. Japan to expand state of emergency to more areas.

US markets closed slightly higher as weakness in tech stock blocked big gains. Investors expect more positivity ahead as vaccine rollout and more govt. spending could boost economy. European markets closed on a mixed note as investors remained concerned over spike in coronavirus cases and political developments in US.

 

Outlook for Real Estate sector

Raman Gupta, Director-Branding and Construction, GBP Group says, "We are looking at the upcoming Budget with great expectations as it might turn out to be a day when profound policy decisions can be announced to smoothen the functioning of the real estate sector. This year's budget is going to be laying the roadmap for developments as per the prevalent new normal. Real estate, being the second largest employer in the country, is currently undergoing a sensitive time, as buyers are interested, developers want to deliver timely but some policies need quick addressal to give timely possession of the properties to their customers. Single window clearance, issues related to Input Tax Credit being some prominent ones. The construction raw materials have reported a spike in their prices due to the disrupted supply chain, which if subsidized will resolve multiple roadblocks for construction and real estate industries."

Market turns muted after hitting highs

After a positive start, market indices turned volatile by the afternoon session and traded tad lower on Wednesday, amid mixed global equities. Erasing early gains, Sensex was trading 30 points lower at 49,484 and Nifty fell by 2 points to 14,560.

In today's session, Sensex and Nifty hit new lifetime highs of 49,776 and 14,645, respectively.

Market techical outlook

 Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said,"The decline in CPI inflation to 4.59% is a big positive for markets. But the steady rise in crude is an area of concern. Looks like Sensex is headed for 50000. But there are bumps ahead. The market is likely to turn highly volatile during the budget. Since valuations are high and investors are sitting on good profits, partial profit booking can be considered at every rise. It is impossible to time the market"

 

Nifty technical outlook

 On markets opening --Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said,"We have achieved the 14600 level. The key resistance patch is now between 14650-14750. It needs to be seen how markets react here. Is it going to resist or fly out of those levels like all other resistance levels have been treated over the past couple of months? If we can get past the 14750 level on a closing basis, we should be headed towards 15000. The current support range for the Nifty is 14200-14250."

 

Oil prices rise as US crude gains for seventh day

Oil prices rose on Wednesday, with US crude gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic. US West Texas Intermediate (WTI) was up 40 cents, or 0.8%, at $53.61 a barrel by 0128 GMT after gaining nearly 2% on Tuesday. Brent crude was up 47 cents, or 0.8%, at $57.05, having risen 1.7% in the previous session.

Both benchmarks are trading at the highest since February, before the coronavirus outbreak in China began spreading across the world and billions of people went into lockdowns to prevent a pandemic that is now in a deadlier second wave. Prices are shrugging off the latest developments in Europe and the United States where death tolls and new infections keep rising, with the focus on rollouts of vaccines, however patchy, but risks to the market remain.

Oil prices rise as US crude gains for seventh day

Stocks in news: SBI, Wipro, Tata Motors, Tata Elxsi, Airtel, Tech Mahindra, Hero MotoCorp

Stocks to watch today on January 13: SBI, Wipro, Tata Motors, Tata Elxsi, Airtel, Tech Mahindra, Hero MotoCorp among others are the top stocks to watch out for in Wednesday's trading session

Stocks in news: SBI, Wipro, Tata Motors, Tata Elxsi, Airtel, Tech Mahindra, Hero MotoCorp

Gold outlook for today

Anuj Gupta- DVP- Commodities and Currencies Research, Angel Broking said," Today Gold price corrected by 0.54% and trading at 49075 levels on the back of strength of Dollar and increase in US Bond yields. Traders are expecting stability in US economy as Biden won the US election and over optimism on US economy. Silver trading at 0.11% higher and trading at 65585 levels. It is expecting that gold may fade out its safe haven demand as people looking towards US Dollar for investment.

 

Investors pulled money from the gold as safe haven to plow into Treasuries as U.S. 10-year note yields surged to March highs. People may also sell their Gold ETF holding as they are expecting stability in US Politics with President-elect Biden and as the U.S. begins to speed up their vaccine rollout.

 

As of now traders can go for sell in Gold at 49200 levels with the stop loss of 49550 for the target of 48700 levels. Also sell silver at 65800 levels with the stop loss of 66300 levels for the target of 64500 levels."

IIP data

On the macro front, the Index of Industrial Production (IIP) contracted 1.9% for November 2020, data released on Tuesday showed. The factory output in the country had grown at 3.6% in October. India's Consumer Price Index (CPI) eased to 4.59% in December from 6.93% in November.


 

Global markets

Geojit Financial said in its note,"Overseas, Asian stocks are trading mixed on Wednesday morning trade as investors watch for developments on the coronavirus front. In corporate news, Hong Kong-listed shares of Lenovo jumped after the firm announced Tuesday a proposed issuance and admission of Chinese depositary receipts on the Shanghai Stock Exchange's Science and Technology Innovation Board.

The Japanese government is set to expand the state of emergency to more areas on Wednesday, as per reports. That comes after Japanese Prime Minister Yoshihide Suga recently declared a state of emergency in Tokyo and three other areas in a bid to stem a rise in coronavirus infections. Meanwhile, local Chinese authorities in regions near Beijing are reportedly stepping up restrictions on social activity following a rise in new coronavirus cases.

In US, stocks closed along the flatline on Tuesday as traders weighed higher rates, possible stimulus and political turmoil.

Investors will watch for developments from Washington, with the U.S. House set to push ahead with efforts to remove President Donald Trump from office over his role in sparking last week's deadly attack on the Capitol. U.S. Vice President Mike Pence, however, said Tuesday night he will not remove Trump from office. The developments came just days ahead of President-elect Joe Biden's inauguration on January 20."

Nifty outlook

Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking) said, "Barring a couple of days breather in the previous week, the markets continued its merry run in the new calendar year as well. Almost every day in the first half, market gives small correction and that decline is getting bought into comfortably by the bulls. Honestly, we have not seen such kind of optimism over the past decade or so and hence, it's becoming difficult to ride this move now. In fact, the contrarian bets from retail participants are not letting the markets fall, which is the practical aspect of the relentless move. Without thinking much, it's better to follow levels and take one step at a time. On the higher side, 14600 is the next level to watch; whereas on the lower side,  14500 - 14430 - 14380 to be seen as immediate supports."

Indigo Paints upcoming IPO

Keshav Lahoti-Associate Equity Analyst, Angel Broking said,"Indigo Paints are the fastest growing amongst the top five paint companies in India. Company is the fifth largest company in the Indian decorative paint industry in terms of their revenue from operations for Fiscal 2020. Company manufactures a complete range of decorative paints including emulsions, enamels, wood coatings, distempers, primers, putties and cement paints. Company has increased its profits manifold from F.Y. 2018 to F.Y. 2020 by increasing it from Rs. 12.8 cr to Rs. 47.8 cr especially due to improvement in the gross margins. Company revenue from operations have grown at a CAGR of 41.9% between Fiscal 2010 and Fiscal 2019, compared to the range of 12.1% to 13.1% recorded by the top four paint companies in India. Although, Company margins and return on capital are lower than industry leading players like Asian Paints, Berger Paints. If the issue is priced reasonably, we expect a good response for this IPO. We expect the Indigo Paints issue to start within the next two weeks.

 

FII data

Foreign portfolio investors (FPIs) bought shares worth Rs 571.47 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,334.50 crore in the Indian equity market on 12 January, provisional data showed.


 

Opening session

Market indices continued hitting record highs for the fourth straight session on Wednesday, amid mixed global equities. SGX Nifty on the Singapore Exchange was rising by 90 points, indicating positive trend in domestic grounds today. Sensex was trading 200 points higher at 49,710 and Nifty gained by 60 points to 14,625. In today's session, Sensex and Nifty hit new lifetime highs of 49,776 and 14,645, respectively.

Earnings today

Infosys, Wipro, 5paisa Capital, Amtek Auto, Asian Tea & Exports, CESC, Capital Trade Links, GTPL Hathway, Mideast (India) and Rajoo Engineers will announce their quarterly earnings today.

 

Nifty technical outlook

Reliance Research in its note said," NSE-NIFTY extended gain post a strong start for the week. Yesterday, up-beat global cues and strength across rate sensitive space, especially Realty and PSU Banks supported the up-move. Major technical indicators remained in favour of bulls. As mentioned earlier, we believe that undergoing positive momentum will continue. This could lead the index towards 14,650-14,800 level. In case of decline, the index will find support at 14,250 level initially and 14,100 mark subsequently."

As for the day, support is placed at around 14,467 and then at 14,371 levels, while resistance is observed at 14,625 and then at 14,687 levels.

Nifty outlook

Ajit Mishra, VP - Research, Religare Broking said,"Markets will react to the macroeconomic data (IIP & CPI) in early trade on Wednesday. Further, earnings announcements from select IT majors such as Infosys and Wipro would also remain on the participants' radar. We advise participants to align their positions according to the trend but strictly avoid overleveraging at current levels."

Rupee outlook

On the currency front, Indian rupee, the domestic currency recouped yesterday's losses and closed 15 paise higher at 73.25, supported by weakness in the greenback overseas and recovery in domestic equities.

Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said," We are witnessing a reversal in the dollar index, while political stability in the U.S. and the probability of a further fiscal stimulus package has pushed the long-term U.S. yields higher. Moreover, there is a possibility that the Fed may reduce its bond-buying plan towards the end of this year, which could further push U.S. yields higher and consequently hurt the rupee. Back home, with RBI mopping up dollar inflows, the local currency can test 73.80 to 74 levels in the coming sessions. We expect the rupee to trade in a broad range of 73 to 74.20 levels for the rest of this month."

Closing

Market indices continued hitting record highs for the third straight session and ended on a bullish note on Tuesday, amid mixed global equities. Sensex ended 247 points higher at 49,517 and Nifty gained 78 points to 14,563.

Sensex and Nifty hit new lifetime highs of 49,479 and 14,563, respectively. Reliance Industries, L&T, Bharti Airtel, ITC, Bajaj Finserv and TCS were among the gainers on Sensex chart.