Sensex Finishes Flat; Dr Reddy's Slump 3%
Closing

Indian share markets witnessed selling pressure in the afternoon session hour of trade and finished on a flat note. At the closing bell, the BSE Sensex closed lower by 19 points and the NSE Nifty finished flat. The S&P BSE Mid Cap finished up by 0.5% while S&P BSE Small Cap finished up by 1%. Gains were largely seen in capital goods sector, metal sector and consumer durables' sector. Auto stocks and software stocks finished in red.

Asian stock markets continued their positive start to the year following more record closes on Wall Street, but the dollar faced further selling pressure. The Shanghai Composite gained 0.62% and the Hang Seng rose 0.15%. European markets are mixed today. The CAC 40 is up 0.38% while the DAX gains 0.27%. The FTSE 100 is off 0.04%.

Rupee was trading at Rs 63.48 against the US$ in the afternoon session. Oil prices were trading at US$ 60.52 at the time of writing.

Bitcoin prices advanced over 10% in two trading sessions after The Wall Street Journal reported Peter Thiel's Founders Fund has amassed hundreds of millions of dollars of the volatile cryptocurrency.

The report further said that the fund bought US$15 to US$20 million worth of the cryptocurrency and multiplied the principal investment by over 5 times.

Bitcoin jumped to US$14,951 on January 3 from US$13,354 on January 1. During the period, the digital currency hit a high and low of US$15,300 and US$12,787, respectively.

Titan share price finished on an encouraging note (up 1.1%) after the company said its third-quarter jewellery retail growth is in-line with the company's expectation.

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Jewellery sales were supported by the government's decision to suspend the application of stringent customer information norms under the Prevention of Money Laundering Act.

As per an article in The Livemint, Titan's main business segments-jewellery and watches-performed well in the October-December festive season quarter.

Titan's watches segment posted healthy same-store-sales growth in Q3 2017-18 across all retail formats and its end-of-season sale, which began towards the end of the quarter, is expected to boost sales further. The watches business also benefited from a regulatory change during the period, with the government lowering the goods and service tax (GST) rate on the category to 18% from 28%.

Moving on to news from pharma sector. Dr Reddy's Lab share price plunged 3% on fears that clearance for the company's injectables unit in Duvvada, Andhra Pradesh, may get delayed from the US Food and Drug Administration (USFDA).

USFDA had issued a warning letter for the company's unit in 2015. The unit was issued an establishment inspection report in which the US regulator did not clear the unit but pointed out areas of concern that the company needed to address.

The total filings of abbreviated new drug applications (ANDAs) for generic drugs rose to 1,292 in FY17 from 852 in the previous year. While, faster approvals expedite the commercialisation of product pipelines of domestic pharma companies spurring growth. At the same time however, it has raised the intensity of competition resulting in pricing pressures. The price erosion has been further compounded by a consolidation among US distributors and the decline in the number of products going off-patent over the past few years.

Generic Drug Approvals Hit The Roof


Indian pharma companies catering to the US markets are breathing a sigh of relief. After being adversely affected by import bans and the suspension of new drug approvals from manufacturing facilities in the past three years, there has been a sharp pick-up in new drug approvals in FY17.

With an aim to lower the overall healthcare costs in the country, the USFDA approved a record 763 generic drugs for the financial year ending 30th September.

Power stocks finished the day on a strong note with NHPC share price and KSK Energy share price leading the gains.

As per a leading financial daily, India's renewable energy installed capacity has surpassed 62 gigawatt (GW) mark as on November 30, 2017. The country's renewable energy capacity stood at 62.05 GW, which comprises 32.75 GW of wind energy, 16.61 GW of solar power, 8.29 GW of bio-power and 4.40 GW of small hydro power (up to 25 MW).

The government has already up-scaled the target of renewable energy capacity to 175 GW by the year 2022 which includes 100 GW from solar, 60 GW from wind, 10 GW from bio-power and 5 GW from small hydro-power.

Power and New & Renewable Energy Minister RK Singh has said that the power generated from these sources is fed into the grid and then utilised by distribution companies to provide the same to consumers.

The minister further highlighted that the peak power supply deficit in April-November 2017 was 2% in the country as 160.75 billion units (BU) was supplied against the peak demand of 164.06 BU.

According to the Central Electricity Authority (CEA) 2017 Load Generation Balance Report, India would become power surplus nation. It said that all India power supply position indicates that the India is expecting a power surplus of 8.8% and peak surplus of 6.8% in the country during 2017-18.

And here's a note from Profit Hunter:

The Indian indices traded strongly in the first hour of the trading session earlier today. But later, they witnessed selling pressure and gave all of its gain to trade in the negative territory. Despite this, Tata Chemicals witnessed buying interest throughout the day.

The last time we reviewed the stock, it had broken out of its 590 - 660 range with healthy volumes. This indicated a resumption of the uptrend. As a result, the stock rallied more than 15% from the break out level to touch a new life-time high of 765. It went on to consolidate for a while, finding resistance from the falling trendline (blue line).

Today, Tata Chemicals is up 3% with strong volumes and touched a new life-time high of 766. Consequently, it broke above the falling resistance line.

Is this an indication that the stock will again resume its up move?

Let's keep a track of it...

Tata Chemical Hits New Life-time High
Tata Chemical Hits New Life-time High


Sensex Trades Marginally Higher; Capital Goods & Realty Stocks Rise
01:30 pm

Indian share markets continue to trade on a flat marginally higher in the noon session. Gains are largely seen in capital goods stocks, metal stocks and realty stocks. Meanwhile, automobile stocks are witnessing majority of the selling activity.

The BSE Sensex is trading higher by 65 points and the NSE Nifty is trading higher by 24 points. Meanwhile, the BSE Mid Cap index is trading up by 0.6% & the BSE Small Cap index is up by 1%. The rupee is trading at 63.67 to the US$.

In the news from bond markets, as per an article in the Economic Times, Finance minister Arun Jaitley has unveiled the framework for electoral bonds which is aimed at cleaning up political funding.

The framework comes with conditions such as a limited tenure and eligibility restricted to parties with a track record of at least one election.

The move comes in Finance Minister's pledge to establish a system for party donations that would help stamp out black money as a source of funding in his February 2017 Budget in the wake of demonetisation.

Accordingly, the new framework allows donors to buy these bonds and give them to the party of their choice. The party can encash them through designated bank accounts within 15 days.

Electoral bonds would be issued/purchased for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 1 million and Rs 10 million from specified branches of SBI.

The above development is a step in the right direction.

To ensure transparency in political funding in the country, the government had proposed that any maximum donation from any one source can only be Rs 2,000.

Earlier, the donation limit was Rs 20,000. The Finance Minister Arun Jaitley had also said these donations can be made either through cheques or digital means only.

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The government had also proposed an amendment to the Reserve Bank Act to enable issuance of electoral bonds. These bonds can be redeemed by the political parties in registered accounts and within a specified time only.

This is precisely what we have been talking about for a long time. Vivek Kaul, our big picture expert had started a petition to end special privileges to political parties. And over 25,000 of our dear readers signed up for the petition to get equal rights and bring about an era of transparency in the funding of political parties.

It would be interesting to see how these electoral bonds fare over the year. We'll keep you updated on the developments form this space.

Speaking of bond markets, note that the bond market in India is witnessing a strong revival.

Foreign debt raised by Indian companies has surged ten-fold to US$ 41 billion in 2017. This is the highest ever infusion of foreign funds in the domestic debt markets in the last 15 years.

At US$ 23 billion, foreign investments in government securities and corporate paper took the cake. This was followed by dollar denominated bonds that attracted around US$ 16 billion of foreign investments whereas funds of US$ 2 billion were mopped up by masala bonds. Masala Bonds are rupee-denominated borrowings by Indian entities in the overseas markets.

All this has made the Indian bond market flush with foreign debt investments lately, as can be seen from the chart below:

Bond Markets on a High

Apart from the above, the recent sovereign rating upgrade by Moody's coupled with factors such as economic stability, abundant global liquidity and diversification needs of investors have stoked demand for Indian bonds in the overseas markets.

In the news from the Goods and Services Tax (GST) space, the government has notified lower 1% GST rates for manufacturers who have opted for composition scheme as well as easier norms for traders opting for it.

The finance ministry has notified the changes decided by the GST Council in November 2017 which stipulates that manufacturers who have opted for composition scheme will now have to pay 1% GST as against 2% earlier.

After studying these and other finer aspects of GST, our colleague Vivek Kaul, has penned his views on what could go right and wrong. Get a balanced perspective on the entire GST saga from Vivek. The report is titled The Good, the Sad and the Terrible (GST). Claim your own copy of his special report now.


Indian Indices Trade Marginally Higher; Metal Sector Up 1.6%
11:30 am

Stock markets in India are presently trading marginally higher. Sectoral indices are trading on a positive note with stocks in the metal sector and consumer durables sector witnessing maximum buying interest.

The BSE Sensex is trading up 108 points (up 0.3%) and the NSE Nifty is trading up 39 points (up 0.4%). The BSE Mid Cap index is trading up by 0.7%, while the BSE Small Cap index is trading up by 1.1%. The rupee is trading at 63.46 to the US dollar.

In the news from the IPO space, Apollo Micro Systems is going to launch its IPO next week. The offer will be open from 10th January till 12th January and the company intends to raise Rs 1.5 billion from its public offering.

The price band of the IPO is finalised at Rs 270 to Rs 275 per share.

Apollo Micro Systems Ltd is Hyderabad based company engaged in the business of electronic, electro-mechanical, engineering designs, manufacturing and supply. The company designs, develops and sells high-performance, mission and time critical solutions to Defense, Space and Home Land Security for Ministry of Defense, government controlled public sector undertakings and private sectors.

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The company offers custom built COTS (commercially off-the shelf) solutions based on specific requirements to defense and space customers.

We are tracking this IPO and will shortly release our analysis on the company. Stay tuned.

Speaking of IPOs, the demand for IPO's has reached sky-high levels. Avenue Supermarts was seen as the first company last year to cross the 100-time subscription mark swiftly followed by CDSL and Dixon technologies, among others.

IPO Subscription Times (2017)

This euphoria is something similar to what was seen in 2007-08. When everyone around you is clamoring to get a piece of the IPO pie, it makes sitting tight difficult. And, why should you sit tight when stocks like Avenue Supermart lets you pocket a cool 100% gain from day 1 of the listing?

History suggests that these cases are few and far between. More than 70% of the IPOs listed in 2007 and 2008 are in the red, even today when the Sensex is at an all-time high.

A merit-based selection primarily including valuation, business, and management quality is the logical way to go about investing in IPOs. If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often than not.

To know more, download this FREE report now and discover How to Get Rich with IPOs. This guide will show you how to safely profit from the ongoing IPO rush.

In other news, as per a report published by Assocham, 2017 was the year of mergers and acquisitions (M&A).

M&A transactions in India soared 70% to 944 during the year. At US$ 46.5 billion, the transactions were valued 170% higher as compared to 2016.

Sectors such as healthcare, telecom, energy, real estate, media & entertainment, banking, insurance, cement, and consumer products remained in the M&A activity spotlight.

As per the report, the above activity in the M&A is going to continue in 2018 with a number of stressed corporate assets, particularly in real estate and steel, being referred to the National Company Law Tribunal under the Insolvency and Bankruptcy Code.

With several of these assets on offer at mouth-watering valuations, the industry body has projected M&A worth US US$50 billion in 2018.

It would be interesting to track the developments in this space.


Sensex Opens 100 Points Up; Power & Metal Stocks Gain the Most
09:30 am

Asian stock markets were mostly trading firm in the morning trading session tracking sizable increases seen on Wall Street overnight as the dollar remained sluggish. Shares in Hong Kong are higher today as the Hang Seng gains 0.33% while the Shanghai Composite is up 0.89%. Stock markets in Europe finished the previous session in red.

Meanwhile, Indian share markets have opened the day on a positive note. BSE Sensex is trading higher by 100 points and NSE Nifty is trading higher by 26 points. S&P BSE Mid Cap is trading up by 0.4% and S&P BSE Small Cap is trading up by 0.5%.

Gains are largely seen in power stocks, metal stocks and consumer durables' stocks. The rupee is trading at Rs 63.67 against the US$.

India was among the three emerging markets, which gained more than 35% in dollar terms. The other two are Hungary and South Korea.

The BSE Sensex earned a 35.1% return in the dollar terms and 28% in the local currency in 2017. However, this wasn't enough to beat the midcap and smallcap indices.

The midcap and smallcap indices saw a sharp increase of 47% and 58% respectively in 2017.

With this, the market cap to GDP ratio is close to 100%, indicating market at its peak. The sharp rally was due to huge inflows from domestic institutional investors (DIIs) and foreign institutional investors (FIIs).

India Outperforms Emerging Market Peers in 2017


This is despite the sluggishness in corporate earnings thanks to the lingering effects of demonetization and GST implementation. Not to mention, uncertainties from international arena such as tensions between the US and North Korea, Middle-East geopolitics, and three fed hikes in 2017 that kept the market on tenterhooks.

In news from the economy, manufacturing activity quickened to the fastest pace in five years in December, bolstered by a sharp rise in output and new orders, according to a private sector survey.

The Nikkei India Puchasing Managers' Index registered a value of 54.7 in December, compared with 52.6 in November.

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Reportedly, at the broad market group level, growth was seen across all three monitored categories (consumer, intermediate and investment). Higher order book volumes and improved underlying demand conditions reportedly contributed to greater production.

Moving on to news from engineering sector. L&T share price opened the trading day on a firm note (up 0.7%) after it was reported that the company's construction arm of L&T Construction, has won orders worth Rs 14.54 billion across various business segments.

S.N Subrahmanyan, CEO and MD L&T said that it was a significant win for the company in smart solutions space and reaffirms its credentials as a technology leader.

He further added that the company will use cutting edge technology to provide an integrated solution capable of high-end analytics in-line with the central government's plan to reduce the aggregate technical and commercial losses of state utilities.

This project is expected to be the largest such rollout program ever in a single lot in the industry.

In international market, the business has bagged a breakthrough order from the Egyptian Electricity Transmission Company for turnkey construction of the Sokhna 500/220kV Gas Insulated Substation.

Meanwhile, in power sector, NTPC share price opened 0.8% in early trade after NTPC Ltd recorded its highest ever quarterly generation of 67,781 million units in the three months ended 31 December, indicating a recovery in electricity demand.

NTPC's total installed capacity reached 51,383 MW with the commercial declaration of 4,415 MW capacity during the current financial year.

The company has also generated 912 million units from its solar and wind stations during the current financial year. This is three times its renewable generation during corresponding period of last year.

In news from automobile sector, as per an article in The Economic Times, a surging stock market, year-end stock clearance offers and improved consumer sentiment on the back of a broader economic revival pushed up sales of passenger vehicles in December.

Maruti Suzuki reported an 11.4% expansion in sales at 118,560 units in the last month of 2017, continued to be driven by compact cars and utility vehicles.

Only, Mahindra & Mahindra (M&M) was among the automobile companies that reported sales on Monday to post a drop in monthly sales. The company's volume fell 7% to 15,543 units in December.

Two-wheeler makers also seemed to have fared well with TVS Motor reporting a nearly 38% increase in sales at 247,630 units in the past month.

Meanwhile, the country's largest two-wheeler maker Hero MotoCorp reported a growth of 43% to sell 472,731 in December.

The company had sold 330,202 units in the corresponding period of the last financial year. The cumulative sales of Hero MotoCorp in the financial year 2017 (April-December 2017), increased 11% to 5,585,558 units.

With demonetisation and transition to GST behind them, industry experts expect the momentum in the market to continue through the fiscal year.

Automobile stocks opened on a mixed note with Ashok Leyland share price and TVS Motors share price leading the gains.


Sensex Remains Unchanged, Manufacturing Activity at 5-year High & Cues to Watch out Today
Pre-Open

On Tuesday, share markets in India finished on a dull note red after trading range bound throughout the day. The BSE Sensex closed flat, while the broader NSE Nifty ended the day higher by 7 points to close at 10,442.

Among BSE sectoral indices, realty stocks fell the most by 1%, followed by pharma stocks by 0.7%. Tata Motors and ONGC were among the top gainers.

Top Stocks in Action Today

IOC share price and BPCL share price is set to be in focus today amid reports that the oil majors are both keen to acquire gas utility GAIL India to become fully integrated energy companies.

Both IOC and BPCL have separately indicated to the petroleum ministry their interest in taking over GAIL to help add natural gas transportation and marketing business to their kitty.

L&T share price is likely to be in focus today after the engineering conglomerate's construction arm - L&T Construction bagged orders worth Rs 14.5 billion across various business segments.

The company's Smart World & Communications Business Unit secured an order worth Rs 8.6 billion for the implementation of 5 Million Smart Meters. Further, its Power Transmission & Distribution Business has bagged orders worth Rs 5.7 billion from both international and domestic customers.

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Manufacturing Activity Charts Healthy Growth

Manufacturing activity in India accelerated at a swift pace in the month of December to hit 5 year high. This came on the back of improved operating conditions and strong production.

The substantial inflow of new orders too underpinned the expansion in manufacturing sector. However, Goods and Services Tax (GST) continued to exert upward pressure on manufacturers' cost burdens in December.

Reportedly, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI)-a composite single-figure indicator of manufacturing performance- rose to 54.7 in December from 52.6 in November, indicating a healthy growth in manufacturing sector since December 2012.

The reading signaled an expansion for the fifth consecutive month, remaining above the no-change mark of 50.

On the price front, rising input costs continued to spark cost pressures on manufacturers and to pass on their cost burdens, firms raised output charges for the fifth month in succession. Further, the inflation rate rose to a 10-month high, but was modest and weaker than its long-run series average.

In line with improved manufacturing activity, the employment growth also accelerated to the strongest since August 2012. This came on the back of favorable demand conditions in domestic and international markets.

Tackling unemployment has remained one of the biggest economic challenges for successive governments. So, while the Modi-led government has unveiled a number of breakthrough reforms such as notebandi, GST and the Insolvency and Bankruptcy Act, poor growth in job creation remains its biggest sore point.

IPO Buzz

Private sector lender Bandhan Bank has filed for its IPO to raise over Rs 25 billion. This will make it the biggest banking IPO till date.

As per the news, the company filed draft papers with markets regulator SEBI yesterday for its proposed initial public offering of up to 11,92,80,494 equity shares of face value of Rs 10 each.

The IPO consists of a fresh issue of up to 9,76,63,910 equity shares and an offer for sale of up to 1,40,50,780 scrips by International Finance Corporation (IFC) and up to 75,65,804 shares by IFC FIG Investment Company.

Speaking of IPOs, the demand for IPO's has reached sky-high levels. Avenue Supermarts was seen as the first company last year to cross the 100-time subscription mark swiftly followed by CDSL and Dixon technologies, among others.

Global Markets Mixed as 2018 Trading Begins

Global stock markets were more or less tepid as holiday-thinned trading was the biggest feature on Tuesday, with stocks in emerging nations turning lower and most major currencies lacking direction. Chinese indices were trading in green amid positive manufacturing data.

A survey by Chinese business magazine Caixin found manufacturing activity in December accelerated by its biggest margin in four months. The magazine's purchasing managers' index rose to 51.5 from November's 50.8 on a 100-point scale on which numbers above 50 show activity improving. The surveyed showed exports, total output and buying activity rising.