Final hour surge
Closing

With buying activity picking up in the final hour of today's session, the BSE-Sensex today closed higher by 106 points, while the NSE-Nifty closed higher by 40 points. Midcaps and Small caps too finished on a positive note. While the BSE Mid Cap index closed higher by 0.7 %, the BSE Small Cap index closed the day with gains of 0.4%. Gains were largely seen in metal and IT stocks while realty and capital goods' stocks witnessed maximum selling pressure.

Asian markets ended on a mixed note. The Shanghai Composite gained 2.51%, while the Nikkei 225 led the Hang Seng lower. They fell 1.8% and 0.72% respectively. European markets are broadly higher today with shares in France leading the region. The CAC 40 is up 1.05% while London's FTSE 100 is up 0.78% and Germany's DAX is up 0.61%. The rupee was trading weak at 66.99 against the US$ in the afternoon session.

Infosys has reportedly made an investment of $3 million in WHOOP. WHOOP is an early stage company offering a performance optimization system for elite professional sports teams. The company's system includes a device worn by athletes on their wrist that continuously measures key strain and recovery variables, and actionable analytics powered by proprietary algorithms that generate intensity and recovery scores. Reportedly, the investment will be completed by December 16, 2015. Infosys is a global leader in consulting, technology, and outsourcing and next-generation services.

Infosys recently delivered a strong performance in 2QFY16. In rupee terms, the consolidated sales increased by 8.9% QoQ during 2QFY16. In US dollar terms, revenues were up 6% QoQ. This is the highest quarterly growth rate in the last 16 quarters. Here is our detailed analysis of the results (Subscription Required). The company's stock ended the day higher by 1.5% on the BSE.

According to a leading financial daily, Indian Oil Corporation (IOC) is planning to invest Rs 1,750 billion over the next seven years in a bid to expand its refinery capacity, building petrochemical plants and laying pipelines.

Of total, the company will spend Rs 345.55 billion in the 15 million tons a year from Paradip oil refinery in Odisha that has recently started producing fuel. Besides, the refinery expansion projects planned include raising Panipat refinery capacity to 20.2 million tons from 15 million tons currently at a cost of Rs 150 billion as well as raising capacity at Koyali, Mathura and Barauni units by 2020.

IOC is the largest enterprise in the country and the foremost ranked Fortune Global 500 Company in India and has presence in the complete hydrocarbon value chain from downstream refining & marketing, pipeline transportation, Petrochemicals, E&P and Gas Marketing.

Given the plunge in oil prices during the year, companies from the downstream segment (retail) have seen their stock prices rise while those of the upstream segment (exploration and refining) have been battered. 2015 has been a mixed year for the stocks from the . In our recent editions of 'The 5 Minute Wrap Up Premium', we highlight the companies that have outperformed the Indian benchmark (Subscription Required) and how oil prices play an important role in determining the fortunes of companies in the energy space.


Metal Stocks in Favor
01:30 pm

The benchmark indices continued to trade above the dotted line in the post-noon trading session. All sectoral indices are witnessing buying activity barring auto sector. Gains are largely seen in metal and pharma stocks.

The BSE-Sensex is trading up by 112 points. The NSE-Nifty is trading up by 40 points. The BSE Mid Cap index is trading up 0.8% and the BSE Small Cap index is trading up 0.6%. The rupee is trading at 66.79 to the US dollar.

Healthcare stocks are trading on an positive note with Aurobindo Pharma and Sun Pharma leading the gains. According to a leading financial daily, Sun Pharmaceutical Industries' subsidiary Sun Laboratories is planning to tap the domestic bond market in order to raise up to Rs 10 billion to fund an internal restructuring.

The company has divided the issue into two parts of Rs 5 billion, one maturing in two years and the other in three years. Reportedly, it is priced in the range of 7.90%-7.96%, 25-35 basis points higher than similar maturity government securities, making the borrowing cost less than any term bank loan.

Sun Pharma is the fifth largest specialty generic pharmaceutical company in the world. The company provides medicines used by healthcare professionals and patients in over 150 countries worldwide.

According to a leading business daily, Cairn India is set to roll out the world's largest enhanced oil recovery program. In this regard the company will invest about US$760 million in the site where its first oil was discovered in the Thar Desert of Rajasthan.

The company is expected to complete 100 exploration and appraisal wells and 350 development wells in 2016. The enhanced oil recovery (EOR) spending spans over Mangala and Bhagyam oil fields in the Rajasthan block to help arrest the natural decline and maintain production.

Cairn India is one of the largest independent oil and gas exploration and production companies in India with a market capitalization of US$10 billion.


Indian Markets Rebound
11:30 am

After opening the day on a negative note, Indian equity markets have bounced back in the green territory. Barring automobile, major sectoral indices are trading on a positive note. Stocks in capital goods and fmcg sector are witnessing maximum buying interest.

The BSE-Sensex is trading higher by 45 points and NSE-Nifty is trading higher by 20 points. Both, BSE Mid Cap and BSE Small Cap have surged upwards and are trading higher by 0.5% and 0.4% respectively. The rupee is trading at 66.78 to the US dollar.

As per an article in leading financial daily, passenger vehicle sales in India rose for a thirteenth straight month in November. The passenger vehicles rose by 10.4% YoY to 173,111 units as per the data provided by Society of Indian Automobile Manufacturers (SIAM). Further, softening interest rates coupled with cheaper fuel led to a spurt in the growth in the passenger car segment. To add to this, commercial vehicles (CV) also reported a growth of 8.6% in the month of November. The growth in the CV segment can be attributed to a potential pickup in the economy.

However, deputy director general of SIAM stated that apart from few new models which are selling well, things are not looking gloomy for the entire industry.

As per an article in leading financial daily, Competition Appellate Tribunal (COMPAT) set aside a penalty of Rs 63.17 bn imposed on eleven cement firms by Competition Commission of India (CCI). The tribunal also allowed the cement manufacturers to withdraw the 10% penalty amount already deposited with the CCI. The judgment follows appeals filed by the cement firms and their industry body Cement Manufacturers Association against the two CCI orders passed in June-July 2012. The companies included ACC, Ambuja Cements, Binani Cements, Century Textiles Ltd, India Cements, JK Cements, Lafarge India, Madras Cements, Ultratech, JP Associates and Shree Cements.

However, COMPAT have asked CCI to pass fresh orders in relation to this case within a period of three months. Thus CCI will look into the matter again and pass a fresh order in relation to the same. Hence, it is just a temporary relief for the cement sector players.


Indian Markets Open Weak
09:30 am

Barring China, major Asian stock markets have opened the day in red, with stock markets in Japan (down 2.1%) and Hong Kong (down 1.4%) being the top losers. Major stock indices in Europe and US ended their previous session on a dismal note. The benchmark indices in US tumbled by 2.3% on the last trading day of the week gone by. The rupee is trading at 66.78 per US dollar.

Indian stock markets too have too opened the day on a negative note on fears of rate hike in the upcoming Fed meet scheduled on 15 December 2015. BSE-Sensex is trading lower by 115 points (down 0.5%) and NSE-Nifty is trading lower by 30 points (down 0.4%). Both BSE Mid Cap and S&P BSE Small Cap are trading lower by 0.2% and 0.3% respectively. Major sectoral indices have opened in red. Stocks from automobile and information technology sector are witnessing maximum selling pressure.

The economic data was recently released. As reported in a leading financial daily, Index of Industrial Production (IIP) rose 9.8% in the month of October. Reportedly, index rose at the fastest pace in the month of October in the preceding five years. Manufacturing, mining and electricity sector grew by 10.6%, 4.8% and 9% respectively in the month of October. To add to this, 17 out of 22 industries posted a growth in the month.

However, experts stated that the spurt in the numbers was mainly on account of the festive season demand. Mr Subramanian, Chief Economic Advisor, stated that one should not make too much of the monthly data as there was a Diwali effect.

As per an article in leading financial daily, Government of India (GOI) imposed an anti-dumping duty on cold rolled flat products of stainless steels.

The anti-dumping duty is imposed in a range of 5.3-57.4%. The duty is imposed to protect the domestic industry which is currently in a dismal state. GOI has imposed the maximum anti-dumping duty i.e 57.4% on imports from China. Further, a duty of 37% is imposed on imports from South Africa.

To add to this, GOI is also considering a proposal to impose a safeguard duty on hot rolled flat sheets of alloy or non-alloyed steel. The consequences of the suppressed steel industry are already being faced by the banking sector as steel makers account for a big chunk of the bad loans. The poor performance of the banking sector, public sector banks in particular are quite well known.


Is India Ready for the Fed Rate Hike?
Pre-Open

The most anticipated and debated event for the global financial markets is almost here. The financial world is nervously awaiting the US central bank's upcoming policy meeting on 15-16 December 2015. Will the US Federal Reserve finally hike interest rates?

Let us tell you that if the rate hike goes through, it will be the US central bank's first interest rate hike in nearly a decade.

You will recall that the US Fed has been planning the interest rate hike since quite some time. But so far it has been unable to increase the rates because of economic growth and unemployment reasons. With these factors showing signs of improvement, there is growing consensus that the US will hike interest rates this time around.

And this can be seen from the way the global markets and currencies have been moving in recent times. The US dollar has been strengthening against all major currencies. Major stock markets across the globe have been sliding lower. This is a clear sign that the markets are anticipating a rate hike to happen this time.

As you may have noticed in recent weeks, the benchmark Indian indices as well as the Indian rupee have been on a downward slope. It means that foreign investors are switching from Indian rupee to the US dollar. It is important to understand that as a thumb rule, money flows where the interest rate is on the rise. In India, we have seen a slew of policy interest rate cuts by the RBI as inflation levels have come within comfort levels. With the strong prospects of a US interest rate hike, foreign investors are switching back to the greenback.

If the US Fed interest rate hike is announced this week, how will it affect the Indian stock markets? What are the factors that investors should focus on?

Many market participants expect that the US Fed will hike interest rates by about 25 basis points. But this is not the only factor that market participants are worried about. The comments that Fed members make at the policy meet will be critical. Investors will seek to gauge the prospects of future interest rate hikes. Will the Fed go slow on future rate hikes? Or will it set a strong agenda for a series of rate hikes in the coming times?

So, it is really uncertain how the global markets will react after the Fed's meeting this week. One thing is for sure. The markets are going to be quite volatile.

In conclusion, we would like to quote the recent comments of RBI Governor Raghuram Rajan:

'I think going forward the best defense against global volatility is sound domestic policies. So, in another words don't worry so much about what is happening outside, but make sure that what you are doing inside is sensible and create the atmosphere of small and sustainable growth.'

In our view, this is the best advice for policy makers and investors. We should be less focused on external factors that may result in medium term uncertainty and volatility. The real factors that will drive long term returns on investments are within our economy. Are we setting the right policies that will create conducive climate for economic growth and development? Are we carrying out the much needed reforms to cut out the inefficiencies, roadblocks and dysfunctionalities from the economic system? Are we making the necessary investments in improving the country's infrastructure and human capital? In the long run, it is these questions that will shape the destiny of our economy.