Market Live: Nifty ranged ahead of FO expiry; copper rally lifts Hindalco, Vedanta 2-4%

12:20 pm Coal sector 2018 outlook: The government is looking at 2018
with renewed optimism for the coal sector in the wake of demand upturn and expecting 6-7 per cent growth in supply of the dry fuel next year.

Also, the government is hopeful of a better show by state-owned Coal India (CIL), which is expected to achieve an output of 600 million tonnes (MT) in 2017-18.

In 2017, there has been a resumption in demand for coal and this has been the greatest difference from the last year, Coal Secretary Susheel Kumar told PTI in an interview.

Bottlenecks in coal supply to power plants turned out to be a big issue this year.

12:05 pm Management Interview: Harsh Mariwala, CMD, Marico said in an interview to CNBC-TV18 that the GST related issues are behind them and so are the issues related to demonetisation. One is seeing definite improvement in the overall business demand, he said.

The distribution channels were definitely impacted due to GST, but things are now settling down, he said.

Volumes for 2018 are definitely expected to be better than 2017, said Mariwala.

He said the two trending products like health foods and male grooming will continue to see investments because they are categories of the future.

When asked if lower edible oil prices would benefit them he said no, because the company is not so much into edible oil but higher copra prices have impacted their margins to some extent.

He is also hopeful of increase in rural demand next year on back of government reforms and focus on infrastructure etc.

Here are the top headlines at 12 pm from Moneycontrol News’ Anchal Pathak

11:55 am Gold Update: Tracking firm overseas trend, gold prices advanced 0.32 percent to Rs 29,034 per 10 grams in futures trade today as speculators created fresh positions.

At the Multi Commodity Exchange, gold for delivery in February rose Rs 92, or 0.32 percent, to Rs 29,034 per 10 grams in business turnover of 429 lots.

On similar lines, the yellow metal for delivery in April contracts was trading Rs 81, or 0.28 percent, higher at Rs 29,035 per 10 grams in 16 lots.

11:40 am Market Update: Benchmark indices remained volatile in late morning deals ahead of last F&O expiry of the year.

The 30-share BSE Sensex was down 0.66 points at 33,911.15 and the 50-share NSE Nifty rose 4 points to 10,494.80.

About 1,389 shares advanced against 1,026 declining shares on the BSE.

Metals stocks like Hindalco and Vedanta gained 2-4 percent as copper prices are at highest level in 4 years and rallied 39 percent in 2017 so far.

11:15 am Banking reforms in 2018?: The government is likely to push ahead with banking sector reforms alongside infusion of fresh capital in state-owned lenders in the new year as it looks to lift banks out of NPA crisis and revive lending growth from a 25-year low.

The government in October announced infusion of an unprecedented Rs 2.11 lakh crore capital over two years in public sector banks that are reeling under high non-performing assets (NPAs). Their NPAs have increased more than two-and-a-half times to Rs 7.33 lakh crore as of June 2017, from Rs 2.75 lakh crore in March 2015.

Of the Rs 2.11 lakh crore package, Rs 1.35 lakh crore would be infused through recapitalisation bonds.

11:00 am Drug Approval: Dr Reddy’s Laboratories shares gained nearly a percent intraday on receiving approval from the US health regulator for drug that reduces blood phenylalanine.

The pharma major has received tentative approval from US Food and Drug Administration for Sapropterin Dihydrochloride (100 mg) tablets.

These tablets are indicated to reduce blood phenylalanine concentrations in patients.

10:51 am Order Win: The power transmission and distribution business of L&T Construction has bagged orders worth Rs 1,600 crore.

The segment has received an order from the Saudi Electricity Company for construction of 380kV double circuit overhead transmission line.

In UAE, orders have been won for design, supply, installation, testing and commissioning of three 132 / 11kV substations and associated works, one each from Dubai Electricity & Water Authority, Shamal Development LLC and Meraas Development LLC.

In the domestic market, the business has secured a major order for EPC construction of 250MW solar plant in Rewa district of Madhya Pradesh.

10:42 am Buzzing: Shares of Axis Bank today tanked nearly 2 percent after market regulator Sebi ordered the lender to conduct a probe into the alleged data leak.

In its first order in the WhatsApp leak case, regulator Sebi last night ordered Axis Bank to strengthen its systems and conduct an internal probe to fix responsibility as the initial investigation showed that the leakage was due to
“inadequacy” of processes at the bank.

10:29 am Rupee Trade: The rupee fell 3 paise to 64.18 against the dollar today on concerns that the government’s additional borrowing this fiscal may lead to a breach in the fiscal deficit target.

The American unit retained its appeal among importers and
banks.

The government yesterday said it has decided to make an additional borrowing of Rs 50,000 crore this fiscal through dated securities, a move that may put burden on the fiscal deficit target of 3.2 percent of GDP.

However, there will be no change in net borrowing as envisaged in the Budget for 2017-18, a finance ministry statement said.

10:15 am Buzzing: Shares of Kolte-Patil Developers added 5 percent in morning as the company is going to raise Rs 193 crore from global investment firm KKR.

“The company has announced that global investment firm KKR has committed Rs 193 crore in Kolte-Patil I-Ven Townships (Pune) (KPIT), a joint venture of Kolte-Patil and ICICI Venture Funds Management Company,” company said in press release.

KPIT is developing Life Republic, a 383-acre township located in Pune’s IT hub, Hinjewadi.

10:05 am FII View: Indranil Sen Gupta of Bank of America Merrill Lynch said the government’s decision to borrow another Rs 50,000 crore was an avoidable negative surprise in an already nervous G-Sec market.

The sell off in G-Secs is delaying lending rate cuts, notwithstanding bank recapitalisation and pushing back recovery, he added.

While the Finance Ministry has pointed out that this will get funded by maturity of T-Bills, TB maturity typically releases liquidity in the ‘busy’ industrial season in the March quarter, he said.

According to Gupta, it would have been better for the Center to have drawn down its surplus balances with the RBI.

Here are the top headlines at 10 am from Moneycontrol News’ Anchal Pathak

10:00 am Market Update: Benchmark indices continued to be rangebound in morning ahead of last expiry of futures & options contracts of the year.

The 30-share BSE Sensex was up 24.71 points at 33,936.52 and the 50-share NSE Nifty gained 12.60 points at 10,503.40.

About two shares advanced for every share falling on the BSE.

9:50 am Market Outlook: Devam Modi, Director – Equirus Securities said in an interview to Moneycontrol that the Nifty is currently trading at TTM P/E & P/B multiple of 26.8 & 3.54 respectively. The average TTM P/E & P/B multiple of Nifty since January 2000 is 19.1 & 3.6, respectively. The markets have risen in the past few months on the back of strong liquidity and expectations of earnings recovery in second half of FY18.

“We are cautious on the broader markets since there are various risks related to USD depreciation, crude run up, higher inflation expectations, firming up of bond yields and relatively high TTM valuations. However, we have a bottom up approach in stock selection and any correction in these stocks because of dampening in general markets shall remain a “buy on dip”,” he said.

9:38 am Fiscal deficit: Samiran Chakraborty of Citi said the last time government resorted to extra borrowing of roughly Rs 90,000 crore was in FY12 when the fiscal deficit was revised from the budgeted level of 4.6 percent of GDP to 5.9 percent of GDP.

After around 5 years of fiscal marksmanship, the spectre of extra borrowing and fiscal slippage has returned, he added.

The research house estimated a 30 bps slippage in FY18 fiscal deficit target (from 3.2 percent of GDP to 3.5 percent of GDP) after taking into account the shortfall in RBI dividend, revenue foregone from excise duty cut and supplementary grants, he said. “The extra borrowing announcement, therefore, vindicates our view of fiscal slippage.”

9:29 am Subsidy Claim: Cement maker Star Cement said it has received Rs 158.82 crore towards capital investment subsidy claim from the government.

The company will use these funds to repay loans, it said.

Star Cement along with its subsidiary, Star Cement Meghalaya has received Rs 158.82 crore “towards capital investment subsidy claim from the central government and this amount will be utilised towards repayment of loans,” the company said in a regulatory filing.

9:21 am SEBI on Axis Bank: The Securities & Exchange Board of India (SEBI) has directed Axis Bank to conduct an internal inquiry in the WhatsApp leak case. The inquiry needs to be conducted within a period of 3 months from the date of order and the bank will need to file a report on it within 7 days from the completion of the inquiry.

Moneycontrol had earlier reported that the market regulator had initiated an examination into leakage of price-sensitive information through WhatsApp groups.

SEBI, in a release on Wednesday, said that before its earnings on July 25, 2017, “financial results circulated on the groups were either matching in totality or were close to the actual announcements”. The only exception, it said, was the slippage figure as can be seen in the following table:

9:15 am Market Check: Equity benchmarks rebounded with mild gains amid volatility on Thursday morning, ahead of expiry of December futures and options contracts.

The 30-share BSE Sensex was up 51.96 points at 33,963.77 and the 50-share NSE Nifty gained 21 points at 10,511.80.

Hindalco Industries, Vedanta, Aurobindo Pharma, BPCL, Lupin, HUL, Tata Steel, Coal India and Dr Reddy’s Labs were early gainers.

The Nifty Midcap was up 0.24 percent.

Star Cement, Monnet Ispat, Reliance Communications, Kolte-Patil Developers and Hindustan Copper rallied 4-12 percent.

The Indian rupee has slipped to its lowest level since December 18, trading at around 64.26 against the US dollar while 10-year bond yield rose to 7.33 percent, the highest level since July 13, 2016.