Sensex, Nifty Log Second Best Day In Nearly Two Months

India's stock benchmarks logged their second best day in nearly two months, aided by gains in metals, capital goods, basic materials, as stocks held on to their gains after Finance Minister Nirmala Sitharaman presented budget 2022.

The S&P BSE Sensex rose 1.46% to 58,862.57. The 30-stock gauge added over 1,000 points to an intraday high of 59,032.20. The NSE Nifty 50 also advanced by similar magnitude to 17,576.85. The 50-stock gauge gained nearly 300 points to an intraday high of 17,622.40.

The broader indices underperformed their larger peers with both the S&P BSE MidCap and S&P BSE SmallCap rising 1%. Barring S&P BSE Telecom, S&P BSE Energy, S&P BSE Auto, S&P BSE Oil & Gas indices, all the other 15 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Metal adding nearly 5%.

The market breadth was skewed in the favour of bulls. About 1,762 stocks advanced, 1,585 declined and 102 remained unchanged.

"Despite a roller-coaster session, markets ended with solid gains, as investors cheered the government's focus on higher growth and capital expenditure boost in the Budget. The north-bound trend was also aided by overnight gains in the US market and a strong European markets trend in early trades", Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. and added that "on daily charts, the market maintained an uptrend continuation formation and after a long time, it succeeded to close above the 50 day SMA which is broadly positive. For the day short-term traders, 17,400 and 17,250 would be key support levels to watch out for. Above the same, the Nifty would touch the level of 17,750-17,850. However, if the index slips below 17,500, a quick intraday correction could drag down the index up to 17,400-17,350 levels".

Shares of Cigarette makers ITC and Godfrey Phillips India rose after India's budget did not propose any change in taxation of tobacco products, in a relief for the sector.

• ITC is expected to see its EPS growing at 11%, with the stock attractively placed at 16.5 x price-to-earnings with a dividend yield of 5.5%.

• Analysts expect ITC to report 6% YoY volume growth in FY23 with profits from tobacco sale rising 12% YoY.

Source: Bloomberg

Shares of Larsen & Toubro advanced nearly 5% to Rs 1,999.9 apiece after the company stepped up the outlay for capital expenditure by 35.4% from Rs 5.54 lakh crore to Rs 7.50 lakh crore in 2022.23.

• The increase in capital expenditure is expected to aid Larsen & Toubro, Cummins, SKF India, Bharat Forge and Honeywell Automation.

• Besides the government's announcement to earmark 65% of capital for local procurement of defence systems and equipment.

• Dr. Reddy's raised to 'buy' from 'accumulate' at KR Choksey; price target set at Rs 5,261.

Source: Bloomberg

Shares of Gujarat Narmada Valley Fertilisers & Chemicals fell over 3%, the steepest intraday decline in over a week to Rs 455.1 apiece after the government announced that it would reduce customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining.

• The reduction of custom duty on acetic acid has led to the decline of Gujarat Narmada Valley Fertilisers & Chemicals shares as it is the leading producer of acetic acid in India.

• On the flipside, shares of Alkyl Amines and Balaji Amines rose after the budget announcement as they use acetic acid as a raw material for the synthesis of acetonitrile and methyl amines, before paring the gains.

• Grasim, SRF Industries, Gujarat Alkalies, Meghmani Organics also would benefit from the custom duty cut as they use methanol as a raw material for the manufacture of chloromethanes.

• Similarly Atul Industries also uses acetic acid for mono chloro acetic acid production and hence this move would be a positive for the company.

• The other chemical companies in focus are Thirumalai and IGPL, which stand to benefit from custom duty cut from 10% to 0% for orthoxylene; Supreme Petro and Ineos Styrolution, which rose after the custom duty reduction from 10% to 2% on Styrene.

• Finolex also rose due to the import duty cut on EDC and import duty reduction on VCM. Both these chemicals are raw materials used the manufacture of PVC Resin.

• Duty is being raised on sodium cyanide for which adequate domestic capacity exists. The changes are aided at enhancing domestic value addition.

Supreme Court asks lenders of Future Retail to detail their opposition to the company’s petition against possible NPA classification.

• Supreme Court has asked the 27 banks which have been made party to Future’s petition to file a short affidavit within two days.

• The top court will next take up the case after the replies from the banks are filed.

• In its petition, Future Retail challenged the event of default notice by its lenders.

• The 30-day grace period for clearing the dues expired on January 29.

• The next logical step is classification as NPA and an application for initiating insolvency, Future Retail told the Supreme Court.

• December : 2,50,933 units

• January : 2,66,788 units

• Rise: 6.3% units

Source: Company statement

• December : 1,53,149

• January : 1,54,379

• Rise : 0.80%

Source: Company statement

India will remove anti-dumping duties on some steel products including stainless steel, in a bid to curb high prices of the metal, according to the country's annual budget presented by finance minister Nirmala Sitharaman on Tuesday.

It also said it won't tax steel scrap imports for another year to aid smaller manufacturers.

Source: Bloomberg

• Budget is on 'A I M': Agriculture, Infrastructure, Mobilisation of Funds

• Rs 7.5 lakh crore allocated for capex program

• Rs 2.7 lakh crore for MSP payments

• PPP for funding capex program

• Budget is simply direction provider to India at 100 years, This will have the power to attract lots of foreign capital in the country.

Deven Choksey, Managing Director, KRChoksey Holdings

Shares of digital financial services providers in India gain as the federal budget focuses on expanding such services.

• PB Fintech, the parent of PolicyBazaar, a platform for online financial services, gains as much as 8.6%

• Shares of Paytm’s owner One 97 Communications surge 6.6%; eClerx 4.1%

• Paisalo Digital, which provides smaller loans through its app, gains as much as 17%

Source: Bloomberg

Shares of metals, cement, road builders, piped water and logistics rose on the back of government's proposals focussing on these sectors.

• Allocation of Rs 48,000 crore for housing projects aided cement makers while proposal to start new trains aided the surge in steel and stainless steel makers.

• Fabrication firm Schaeffler India, Timken India, pipe-maker APL Apollo Tubes rises as much as 2.6% and VA Tech Wabag also advanced.

Source: Bloomberg

India's stock benchmarks rose as Finance Minister presented the union budget, aided by gains in metal and banking stocks.

The S&P BSE Sensex rose 1.67% to 59,016.59. The NSE Nifty 50 advanced by similar magnitude to 17,606.80.

The broader indices underperformed their larger peers with S&P BSE MidCap shedding 0.6% and S&P BSE SmallCap slipping 0.72%. Barring S&P BSE Auto and S&P BSE Oil & Gas indices, all the other 17 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Metal index gaining nearly 2.5%.

The market breadth was skewed in the favour of bulls. About 1,710 stocks advanced, 1,533 declined and 105 remained unchanged.

India plans to launch a central bank digital currency in the financial year starting in April, Finance Minister Nirmala Sitharaman said in her budget speech.

• The digital rupee will help to usher in cheaper, more efficient currency management, Sitharaman said Tuesday. The Reserve Bank of India has been working on a phased implementation strategy for its digital currency, which could reduce dependency on cash.

• India’s move comes after China already began CBDC trials in several cities, while the U.S. Federal Reserve and Bank of England are looking into possibilities for their economies.

Source: Bloomberg

Indian government bonds slide after Finance Minister Nirmala Sitharaman announced a higher-than-expected fiscal deficit for the financial year ending March 2023.

• Benchmark 10-year yields rise 7bps to 6.75%.

• The rupee trims gains; up 0.1% to 74.57/USD.

• India is estimating a fiscal deficit at 6.4% of GDP in the next fiscal year, higher than 6.1% estimated in a Bloomberg survey

Source: Bloomberg

• Telecom infrastructure providers HFCL, Tejas Networks gain as Finance Minister Nirmala Sitharaman announces plan for 5G rollout. 

• India to auction 5G spectrum in 2022, Nirmala Sitharaman announced during presentation of federal budget in India’s Parliament.

Source: Bloomberg

• India plans solar spending amid climate change threat.

• India plans additional allocation of Rs 19,500 crore in PLI for solar modules.

Nirmala Sitharaman, Finance Minister

Shares of battery makers gain as the federal budget proposes introducing battery swapping policy.

• Finance Minister announces plans to promote clean technology in public transport.

Source: Bloomberg

• Shares of IRCTC Ltd. rose nearly 4% after Finance Minister Nirmala Sitharaman proposed to start 400 new 'Vande Bharat' trains in three years.

• Rail, post to work together on logistics.

Source: Bloomberg

• Shares of road builders like Dilip Buildcon, PNC Infratech, Ashoka Buildcon and KNR Constructions climbed as Finance Minister announced plans to increase spending to expand highways network by 25,000 km in 2022-23.

• Logistics, infrastructure are key areas of focus, says Finance Minister.

Source: Bloomberg

• ECLGS Scheme to be extended to March 2023.

• ECLGS Scheme to have Rs 5 lakh crore total cover.

Nirmala Sitharaman, Finance Minister

Finance Minister Nirmala Sitharaman announced a project named Parvat Mala.

• The projects aims to build roads and highways in India's mountainous region stretching from north to north eastern India, that also borders China.

Goals For ‘India at 100’: Complementing macro-growth with micro-all-inclusive welfare, digital economy and fintech, tech-enabled development, energy transition and climate action

• Transferring of ownership of Air India has been completed

• LIC IPO listing process is expected to be completed shortly

• PLI Schemes in 14 sectors have received with potential to create 60 lakh new jobs, and additional new production of Rs 30 lakh crore

• Public issue of LIC shortly, others too are in the process for FY23

• FY22 real GDP growth estimated at 9.2%

• Sharp rebound and recovery in our economy reflects India’s strong resilience

• India in strong position to withstand challenges, will continue journey with strong growth

• Confident that with ‘sab ka prayas’ we will continue our journey towards economic recovery

Nirmala Sitharaman, Finance Minister

• Most yields along the India sovereign yield curve fell, with 10-year bonds moving the most in Tuesday session.

• The 5-year yield fell 0.8bps to 5.881%

• The 10-year yield fell 3.1bps to 6.652%

• The 18-year yield remained unchanged at 7.133%

• The 5-year-10-year yield spread was 77.1bps vs previous close 79.4bps.

Source: Bloomberg

Shares of Alembic Pharmaceuticals Ltd. rose over 1.3% after the company announced it has received final approval for the U.S. FDA for its Abbreviated New Drug Application for Clarithromycin tablets USP, 250 mg and 500 mg.

• Clarithromycin tablets is used to treat infections caused due to acute bacterial exacerbation of chronic bronchitis in adults; acute maxillary sinusitis, community-acquried pneumonia and duodenal ulcer disease in adults among others.

• The tablets have an estimated market size of $11 million for twelve months ending September 2021, according to IQVIA.

Of the 18 analysts tracking the company, seven maintained 'buy', seven maintained 'hold' and four maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 11.6%

Source: Exchange Filing, Bloomberg

Indian bonds trade steady and rupee edged higher as traders await the budget for the fiscal deficit and borrowing numbers. They are also on the lookout to see if capital gains tax on bonds is scrapped.

• USD/INR falls 0.1% to 74.56.

• 10-year yields down 1bp at 6.67%. The yields fell 7bps on Monday after government switched Rs 1.19 lakh crore of bonds with RBI, raising hopes of lower gross borrowings.

• Finance Minister Nirmala Sitharaman to start budget speech at 11 a.m.

Source: Bloomberg

• NTPC has 1.01 million shares change hands in a large trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

• Manufacturing PMI falls to 54 in January 2022 from 55.5 in December 2021.

Source: IHS Markit

Shares of Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. fell after the Q3 results lagged estimates due to rising costs.

• The state-run refiners are among the worst performers on NSE Nifty 100 index.

• This is the steepest intraday decline for Indian Oil and HPCL since Jan. 21.

• This is the steepest intraday decline for BPCL since Dec. 20

Source: Bloomberg

• December : 3,62,470

• January : 3,63,443

• Rise : 0.3%

Source : Exchange filing

Shares of Navin Fluorine International Ltd. rose 7.45%, the biggest intraday rise in this week, after the company reported net income for the third quarter that beat the average analyst estimate.

Third Quarter Results (Consolidated)

• Net income up 17% YoY to Rs 68.79 crore vs Bloomberg consensus estimate of Rs 60.28 crore

• Revenue up 22% YoY to Rs 378.95 crore vs estimate of Rs 320 crore

• Total costs up 22% YoY at Rs 292.87 crore

• Other income at Rs 7.48 crore vs Rs 11.20 crore YoY

• Ebitda up 25% YoY to Rs 99 crore

• Margin remains flat at 26%

Of the 23 analysts tracking the company, 12 maintained 'buy', six maintained 'hold' and five maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 6.6%. Trading volume on the stock was nearly nine times the 30-day average volume at this time of the day.

Source: Exchange Filing, Bloomberg

India's stock benchmarks opened higher, ahead of federal budget due to be presented in the parliament by Finance Minister Nirmala Sitharaman at 11 a.m., aided by information technology, banking, metal and realty stocks. The rise comes amid rebound in global equities due to positive spillover effects from the technology-led rally in the U.S.

The S&P BSE Sensex rose nearly 1% to 58,548.31. The NSE Nifty 50 also advanced by similar magnitude to 17,488.05.

The S&P BSE MidCap underperformed its larger peers with gains of 0.4% while the S&P BSE SmallCap almost mirrored the Sensex and Nifty. Barring S&P BSE Oil & Gas, all the other 18 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Information Technology adding 1.2%.

The market breadth was skewed in the favour of bulls. About 1,779 stocks advanced, 656 declined and 87 remained unchanged.

• DLF Ltd. has 1.95 million shares change hands in a block trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

Zomato has completed the acquisition of 11,214 compulsorily convertible preference shares and 10 equity shares collectively aggregating to 19.48% of the share capital of Adonmo Pvt Ltd. for Rs 112.21 crore approximately.

• The company also acquired 1,259 compulsorily convertible preference shares and one equity shares collectively aggregating to 5% of the share capital of UrbanPiper Technology Pvt Ltd, for Rs 37.39 crore, on Monday.

• The company had intimated these proposed acquisitions in an exchange filing on Thursday.

Source: Exchange Filing

Shares of hotel, movie theatre and mall operators will be in focus after Maharashtra after Mumbai further eased covid-19 restrictions.

• Maharashtra allowed reopening of tourism-related activities as well as permitted amusement parks, swimming pools to operate with 50% capacity.

• In focus: Amusement park operator Imagicaaworld Entertainment, hotel stocks like Indian Hotels, EIH, Lemon Tree Hotels, Chalet Hotels, Mahindra Holidays, tour operators like Thomas Cook, Easy Trip besides PVR, Inox Leisure, Phoenix Mills.

Source: Bloomberg

Indian bond traders are waiting on the federal budget for the next fiscal deficit and borrowing numbers. They are also awaiting to see if capital gains tax on bonds is scrapped to facilitate transactions on offshore platforms.

• Government is expected to announce bond sales of Rs 13 lakh crore ($174 billion) in the fiscal year starting April, about 8% more than the current period, according to a survey of 18 traders and economists.

• Net borrowing in the next fiscal year is estimated at Rs 9.4 lakh crore, according to the survey.

• USD/INR fell 0.6% to 74.6225 on Monday.

• 10-year yields fell 7bps to 6.68% on Monday after the government switched Rs 1.19 lakh crore of bonds with RBI, raising hopes of lower gross borrowings.

• Overseas investors sold Rs 3,620 crore of stocks on Monday.

• They sold Rs 13 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 201 crore of corporate debt.

• State-run banks sold Rs 1,090 crore of sovereign bonds on Jan. 31: CCIL data. Foreign banks sold Rs 838 crore of bonds.

Source: Bloomberg

• Sun Pharmaceuticals raised to 'neutral' from 'underperform' at Credit Suisse; price target set at Rs 810.

• Century Plyboards raised to 'buy' from 'hold' at BOB Capital Markets; price target set at Rs 735.

• Equitas Holdings: Nirmal Bang initiated coverage of the stock with a recommendation of 'buy'; price target set at Rs 73.

Source: Bloomberg