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Market Highlights

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December 28, 2023

*India Daybook – Stocks in News*
*Petronet LNG:* Company in pact to set up LNG terminal at Gopalpur Port in Odisha. (Positive)
*KPI Green Energy:* Company and arm commission 17.35 MWP solar power projects (Positive)
*PTC Industries:* Company in pact with Nasmyth U.K. for offering solutions to defence, aerospace customers in India and globally (Positive)
*Canara Bank:* Gives in-principle approval to start process of listing its mutual fund subsidiary Canara Robeco Asset Management Company through an IPO. (Positive)
*Affle:* Company to acquire minority stake in Explurger for approximately Rs 37.3 crore. (Positive)
*Credo Brands:* S I INVESTMENTS bought 7.50 lakh shares at 308.73 per share (Positive)
*Cement Companies:* Cement sales volumes show signs of robust demand in infrastructure, construction. (Positive)
*South Indian Bank:* Approves raising Rs 1,750 crore via rights issue (Positive)
*Tata Power:* Company has signed a Share Purchase Agreement and acquired 100 percent equity stake in Bikaner III Neemrana II Transmission. (Positive)
*JSW Steel:* CEO Jayant Acharya has announced a bold strategy for the company, revealing plans for a capital expenditure (Positive)
*NTPC:* Company is aiming to increase its capital expenditure at least by 30–40% going forward, according to Gurdeep Singh, chairman (Positive)
*Swan Energy:* Company on Wednesday said it has made a ₹40-crore repayment of debt towards its entire fund-based facilities of the textile unit to the consortium of banks led by Union Bank of India. (Positive)
*Lupin:* Company has received approval from the USFDA for its ANDA for loteprednol etabonate ophthalmic suspension (Positive)
*Sula Vineyards:* Wine tourism achieves new heights over Xmas weekend (Positive)
*KPI Green:* Board meeting on 30th December to consider bonus issue (Positive)
*Exide:* Company invests Rs 40 crore in arm Exide Energy Solutions. (Neutral)
*Power Grid:* Company acquired Vataman Transmission Limited for Rs 18.19 cr. (Neutral)
*LIC:* Company appointed S Sunder Krishnan as chief risk officer (Neutral)
*M&M:* Company to divest 0.58% stake in IPO of FirstCry parent Brainbees Solutions. (Neutral)
*Paytm:* As many as 912 crore merchant transactions were made using Paytm in Q2FY24, parent One97 Communications said (Neutral)
*Zomato:* Company received show cause notice for Rs 402 cr tax liability. (Negative)
*Very Good Morning!!!*
*US Markets in Detail...*
*GIFTNifty: 21,792: +122: +0.56%*
*Last Heard*
Azad Eng: 205…IPO Px: 524… Est Listing: 729 (+39%)..IPO size: 740cr
Innova Captab:86…IPO Px: 448… Est Listing: 534 (+19%)..IPO size: 570cr
(Source Chittorgarh)
*Today*
*Listing of Equity Shares of Azad Engineering Limited*
59112993 Equity Shares Of Rs.2/- each fully paid up @ 524
*Listing of Equity Shares of Sundaram-Clayton Limited*
2,02,32,104 Equity shares of Rs. 5/- each allotted pursuant to Scheme of Arrangement. The Scrip will be in Trade-for-Trade segment for 10 trading days
*Provisional Cash Rs. In Crs. (27th Dec)*
FIIs +2,926 (10,654 - 7,728)
DIIs -192 (9,137 - 9,329)
Sensex: 72,038: +702: +0.98%
Nifty: 21,655: +213: +1%
BankNifty: 48,282: +557: +1.17%
NiftyIT: 35,741: +248: +0.7%
MIDCAP: 45,559: +171: +0.38%
Dow: 37,657: +111: +0.3%
S&P: 4,782: +7: +0.14%
Nas: 15,099: +25: +0.16%
Brazil: 134,194: +661: +0.49%
Ftse: 7,725: +27: +0.36%
Dax: 16,742: +36: +0.21%
Cac: 7,572: +3: +0.04%
MOEX: 3,097: +3: +0.09%
WTI Oil: $73.83 (-2.3%)
Brnt: $79.41 (-2.05%)
Natural Gas: 2.62: +2.71%
Gold: $2093: +23: +1.13%
Gold 22 Carat/g: 5,850: +10: +0.17%
Silver: $24.64: +1%
Copper: $396: +6: +1.47%
Cotton: $80.5: +0.6%
Copper (LME): $8,574 (-22) (-0.26%) : shut
Alluminum (LME): $2,326: +86: +3.65%: shut
Zinc (LME): $2,601: +54: +2.12%: shut
Tin (LME): $24,866 (-287) (-1.14%) : shut
Eur-$: 1.1106: +0.6%
GBP-$: 1.2798: +0.6%
Jpy-$: 141.79 (-0.4%)
Re: 83.35: +0.19%
USD-RUB: 91.6257 (-0.75%)
US10yr: 3.79% (-10 bps)
GIND10YR: 7.205: +0.31%
$ Index: 100.946 (-0.51%)
US Vix: 12.43 (-4.31%)
India Vix: 15.55: +5.93%
BalticDry: 2,094: +7: +0.34% : shut
*ADR/GDR*
Cogni: +0.17%
Infy: +0.81%
Wit: +1.09%
IciciBk: +0.59%
HdfcBk: +0.48%
DrRdy: +1.32%
TatSt: +7.01%
Axis: +0.76%
SBI: +1.17%
RIGD(-0.48%)
INDA: +0.64% (IShares MSCI INDIA ETF)
INDY: +0.96% (IShares MSCI INDIA 50 ETF)
EPI: +0.64% (Wisdom Tree India Earning)
PIN: +0.38% (Invesco India Etf)
*US Futures*
S&P 500 futures are near flat Wednesday night as the benchmark index closed in on a new all-time high.
Futures tied to the benchmark index and Nasdaq 100 were both little changed. Dow Jones Industrial Average futures slipped 23 points, also near flat.
Stocks are now in the middle of a period dubbed the “Santa Claus rally,” which refers to the last five trading days of an ending year and first two of a new one. The S&P 500 has risen about 1.3% over this timeframe on average, per data going back to 1950 from the Stock Trader’s Almanac.
Traders will monitor economic data on jobless claims and pending home sales Thursday morning.
*US Markets*
Dow Jones posts record close as stocks end mostly higher: S&P 500 edges nearer to all-time high finish
The Dow Jones Industrial Average ended slightly higher Wednesday, notching an all-time high finish, while the S&P 500 edged nearer record territory as investors attempted to continue a year-end rally fueled by expectations that U.S. interest rates will fall in 2024.
Stocks struggled to find solid ground after approaching a record on speculation the Federal Reserve will cut rates in 2024. (Showed Signs of Fatigue Near Record)
The Dow notched a fresh closing high, while the S&P 500 finished less than 0.5% off of its closing record of 4,796.56 set in January 2022. Along with the Dow and Nasdaq, the S&P is also enjoying an eight-week winning streak — its longest since 2017.
Stocks are in the thick of what’s referred to as the “Santa Claus rally,” a period comprised of the last five trading days of an ending year and first two of a new one. The S&P 500 has risen about 1.3% over this timeframe on average, according to data going back to 1950 from the Stock Trader’s Almanac.
"When you have very few catalysts and minimal trading activity you tend to see continuation of the trends," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
"We’ve got three days left of trading in the year," Carlson added. "That means three days left of tax harvesting, three days of portfolio window dressing ... those sort of things can get magnified because of the lack of trading volume."
Reaching a new record close would confirm the bellwether index entered a bull market when it reached the bear market closing trough in October 2022.
"Those kind of milestones are important because they can generate activity for investors who are sitting on the fence," Carlson said.
In the wake of Friday's cooler-than-expected U.S. PCE price index data, bets are firming that the Fed will start issue its first rate cut as soon as March, which is supporting interest rate sensitive shares and giving Wall Street's major indexes an upward bias.
At last glance, financial markets have priced in a 73.9% probability that policymakers will reduce the Fed funds target rate by 25 basis points at the conclusion of their March policy meeting, according to CME's FedWatch tool.
Despite the upbeat sentiment, some on Wall Street worry that the market may be overly optimistic, which could lead to disappointment if the Federal Reserve starts cutting rates later than expected, said CFRA’s Stovall. Fed funds futures pricing reflects a significant probability of rate cuts as early as next March, according to CME Group’s FedWatch tool.
In another sign of possible overexuberance, Stovall said that 90% of stocks in the S&P 500 are trading above their 50-day moving average, suggesting a “bit of frothiness” in the market. Recent bullish sentiment data showing overexcitement could also put investors at risk of getting “sideswiped” by unanticipated events.
“Despite the possibility of a pause after recovering all that was lost in the 2022 bear market, history reminds us that the S&P 500 typically enjoyed a post-recovery gain of 10% in four months before stumbling into another decline of 5% or more — none of which became a new bear market,” Stovall noted.
With just a few days left before the year is over, equities barely budged. While some traders cited an old Wall Street adage that says “never short a dull market,” concerns have surfaced amid overbought levels and warnings about overly dovish Fed bets. The S&P 500 wavered near its all-time high — a feat recently achieved by the Nasdaq 100 and the Dow Jones Industrial Average that’s fueled a debate on whether investors should be worried or celebrating.
“Perhaps the most important question is: what has the S&P 500 done after it has climbed out of its hole?” said Ed Clissold at Ned Davis Research. “Did the rally to new highs leave the market overbought and in need of a correction? Or was it a breakout to a new up leg? History sides with the latter.”
The S&P 500 has outperformed its long-term average one-, three-, six-, and 12-months later, Clissold noted. The one-month returns are not quite as strong, suggesting a short-term overbought condition in some cases. One year later, the gauge has risen 13 out of 14 times by a median of 13.4%.
The S&P 500 traded less than 0.5% away from its all-time high of 4,796.56. Strong demand for a $58 billion sale of five-year notes sent bond yields slumping. That followed Tuesday’s surprisingly solid two-year auction that drew buyers seeking to lock in higher yields before the Fed starts easing policy.
Benchmark 10-year Treasury rates sank to around 3.8% — the lowest since July
Traders have stepped up bets on rate cuts as early as March, according to Fed swaps pricing. That view has gained momentum since policymakers updated their forecasts this month to show they expect to reduce rates at a stronger pace than indicated in their previous projections.
To Jose Torres at Interactive Brokers, optimism about the Fed having potentially won the war against inflation is excessive as data in coming months will likely persuade officials to delay rate cuts until May at the earliest.
“Markets have priced in the dovish pivot and stocks never discount the same news twice,” said Tom Essaye, a former Merrill Lynch trader who founded The Sevens Report newsletter. “As we start 2024, markets will need to see new, positive catalysts to send the S&P 500 to new all-time highs.”
Bespoke Investment Group said the Goldman Sachs US Financial Conditions Index has gone from rapid tightening to rapid easing. The gauge is currently at the lowest since August 2022. Rapid easing in the past has been followed by strong periods for both large and small-cap equities, Bespoke noted.
It has been a strong year for stocks. The Dow and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively. The Nasdaq Composite has jumped 44%, outperforming amid mega-cap technology’s rebound and the artificial intelligence craze. The tech-heavy benchmark is also on track for its biggest one-year gain since 2003, when it surged 50%.
*Volume on U.S. exchanges was 11.96 billion shares, compared with the 12.67 billion average for the full session over the last 20 trading days.*
*What drove markets*
Stocks briefly extended gains after the Treasury Department auctioned $58 billion in 5-year notes, prompting a further pullback in benchmark bond yields.
Market participants were hoping to see strong demand, much like what was seen for Tuesday’s sale of 2-year notes.
A steady rally into the year’s end has further propelled the benchmark S&P 500 toward an all-time high. The Wall Street equity benchmark is striving for a ninth consecutive week of gains, which would be its best such winning streak since 2004, having jumped 24.4% so far in 2023.
Investors have piled into stocks primarily on hopes that with inflation falling back near the Federal Reserve’s 2% target, the central bank will start reducing borrowing costs by the spring of 2024, all while the U.S. economy avoids a recession.
But that’s also prompted concerns that market participants have gotten ahead of themselves.
“The stock market is too optimistic about the quantity of rate cuts expected in 2024, and we may be borrowing some of 2024’s gains now as the year-end rally continues, because we don’t expect to see as many rate cuts as the market is currently predicting,” said Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, a Punta Gorda, Fla.-based firm with $1 billion in assets under management.
“We expect to see three rate cuts in 2024 starting in July, and not any sooner than that unless something unexpected happens in the economy that warrants lower interest rates,” Landsberg said.
Tom Lee, head of research at Fundstrat Global Advisors, said his team leans toward markets continuing to rally in the last three trading days in 2023, given the strength of December already, which has seen the S&P 500 rise 4.5% so far this month.
“Given the trailing performance of fund managers, and the notion of ‘never short a dull market,’ we see the drift higher into the final days of 2023,” Lee said in a Wednesday client note.
“Asset prices continue to march slowly higher towards year-end,” said Louis Navellier, chief investment officer at Navellier & Associates. “January may see some delayed profit-taking, but there’s still plenty of money on the sidelines to pick up any bargains that may be created.”
For many traders, the soft-landing scenario that investors see for next year points to further gains in US stocks. But it also dims the prospect of another stretch of wild outperformance for the technology giants that dominated in 2023.
With added fuel from the artificial-intelligence boom, the group rose almost 100% through mid-July, compared with roughly 20% for the S&P 500. But as confidence in the economy grew after the Fed’s July interest-rate hike, which investors now see as the last of this cycle, the tech titans’ gains became more muted.
“If you were fortunate enough to own the ‘Magnificent 7’ in 2023, look to trim and rebalance back to where you were at the start of 2023,” said Michael Landsberg at Landsberg Bennett Private Wealth Management. “We still like the majority of those names, but trimming after big runs makes sense.”
Landsberg also noted he expects to see a meaningful broadening of stock-market participation in 2024 “as it’s not healthy to have such a small number of heavily owned stocks drive overall market performance.”
*Traders also kept an eye on the latest geopolitical developments.*
*Shipping giant Hapag-Lloyd AG said it will keep its vessels away from the Red Sea even after the launch of a US-led taskforce to protect the key trade route from militant attacks. Oil retreated from its highest close in almost a month as key technical gauges flashed weakness amid thin holiday trading.*
*Israeli forces pounded central Gaza by land, sea and air and Palestinian authorities reported dozens more deaths, with the U.N. health agency saying thousands of people were trying to flee the fighting.*
*North Korean leader Kim Jong Un has ordered its military, the munitions industry and the nuclear weapons sector to accelerate war preparations to counter what he called unprecedented confrontational moves by the U.S., state media said on Thursday.*
Speaking on the policy directions for the new year at a key meeting of the country's ruling party on Wednesday, Kim also said Pyongyang would expand strategic cooperation with "anti-imperialist independent" countries, news agency KCNA reported.
North Korea has been expanding ties with Russia, among others, as Washington accuses Pyongyang of supplying military equipment to Moscow for use in its war with Ukraine, while Russia provides technical support to help the North advance its military capabilities.
Elsewhere, Bitcoin recovered amid renewed speculation that the US securities regulator is getting close to approving an exchange-traded fund investing directly in the biggest token.
*BTIG’s Justin Zelin said AstraZeneca’s acquisition of Gracell Biotechnologies, which was announced on Tuesday, was “momentous,” as it marked the first time a large multinational pharma company acquired a Chinese biotech firm. He sees the move as “bullish for Chinese biotech companies broadly.”*
“Despite recent volatility in Chinese biotech stocks, we continue to see promise in the innovation engine for China biotech, especially in cell therapies,” he said. Zelin called out buy-rated Legend as an example of a company that could benefit if this becomes a bigger trend.
*European markets closed higher on Wednesday to kick off the final trading week of 2023, as major indexes around the world hovered near record highs*.
Stock markets in Europe were closed on Monday and Tuesday in observance of Christmas Day and Boxing Day.
Shares in Asia-Pacific advanced overnight, with Chinese and Hong Kong indexes bouncing on the back of a strong showing for video game stocks. Australia’s S&P/ASX 200 hit its highest level since April 2022.
*Companies in focus*
# *Apple Inc*. won a legal victory Wednesday when a U.S. appeals court temporarily blocked a government commission’s import ban on popular Apple Watch models following a patent dispute with medical-technology firm Masimo Corp. Apple shares rose 0.1%
# Shares of *Cytokinetics Inc.* rose 82.5%, rallying after the cardiovascular-biopharmaceutical company announced positive results from a Phase 3 trial of aficamten, a treatment for hypertrophic cardiomyopathy.
# *CIovance Biotherapeutics Inc.’s* stock fell 18.7% after the cancer-therapy company said the U.S. Food and Drug Administration placed a clinical hold on its trial for IOV-LUN-202.
# *New York Times Co.* shares rose 2.8% after the media company filed a federal copyright lawsuit against Microsoft Corp. and ChatGPT creator OpenAI in a legal action expected to shape the debate over generative-artificial-intelligence technologies. Microsoft shares lost 0.2%.
*Key events this week:*
# Japan industrial production, Thursday
# US wholesale inventories, initial jobless claims, Thursday
# South Korea industrial production, Thursday
# Thailand trade, Thursday
# Mexico unemployment, Thursday
# Bank of Portugal releases quarterly report on banking system, Thursday
# South Korea CPI, Friday # Spain CPI, Friday
# UK nationwide house prices, Friday
# Brazil unemployment, Friday # Chile unemployment, Friday
# Colombia unemployment, Friday
*Currencies*
# The Bloomberg Dollar Spot Index fell 0.4%
#The euro rose 0.6% to $1.1106
# The British pound rose 0.6% to $1.2798
# The Japanese yen rose 0.4% to 141.79 per dollar
*Cryptocurrencies*
# Bitcoin rose 2.7% to $43,470.76
# Ether rose 5.8% to $2,353.2
*Bonds*
# The yield on 10-year Treasuries declined 11 basis points to 3.79%
# Germany’s 10-year yield declined eight basis points to 1.90%
# Britain’s 10-year yield declined seven basis points to 3.44%
*Commodities*
# West Texas Intermediate crude fell 2.3% to $73.84 a barrel
# Spot gold rose 0.5% to $2,077.97 an ounce
*ANUPAM RASAYAN HAS BEEN INCLUDED FROM IN NSE SMALL CAP TOP 50 SCRIP FROM JAN 1st 2024* The List of Other Scrip is Attach here with

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