Nifty hits record high; breadth remains strong

The Sensex and the Nifty pared gains and were trading near the flat line in morning trade. The Nifty trimmed gains after hitting a fresh record high of 12,349.75 in morning trade. Positive global cues boosted market sentiment.

At 10:28 IST, the S&P BSE Sensex, was up 3.02 points or 0.01% at 41,862.71. The Nifty 50 index was up 9.8 points or 0.08% at 12,339.36.

The broader market significantly outperformed the benchmark indices. The S&P BSE Mid-Cap index was up 0.67% while the S&P BSE Small-Cap index was up 0.69%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1216 shares rose and 625 shares fell. A total of 103 shares were unchanged. In Nifty 50 index, 34 stocks advanced while 16 stocks declined.

Economy:

The all-India general CPI inflation jumped to 7.35% in December 2019, compared with 5.54% in November 2019. The inflation accelerated for the fifth straight month, remaining the highest rate since July 2016. Main upward pressure came from cost of food and beverages (12.16%), namely cereals (4.36%), milk (4.22%), vegetables (60.5%), fruits (4.55%) and pulses (15.44%). The food price index alone jumped to 14.12%, the highest since November 2013.

The corresponding provisional inflation rate for rural area was 7.26% and urban area 7.46% in December 2019 as against 5.27% and 5.76% in November 2019.

Meanwhile, the Reserve Bank of India (RBI) in its monthly bulletin noted that India's external debt witnessed an increase of $13.9 billion (i.e., 2.6%) over its level a year ago and was placed at $543.2 billion. It further expanded by $14.3 billion (i.e., 2.6%) to $557.5 billion at end-September 2019.

Although the size of India's external debt has increased since 2017-18, it has remained about 20% of GDP. While the increase in external debt was largely due to borrowings by non-government sector, the share of short-term debt (on residual maturity basis) in total debt increased since 2017-18 driven by non-resident deposits, commercial borrowings, and short-term trade credit. India's external vulnerability, in terms of reserve adequacy indicators, remained low compared to earlier years. Empirical analysis suggests that the movements in the US dollar against Indian rupee and major currencies influence the size of India's external debt while the impact of current account deficit (CAD) is not statistically significant, RBI said.

Q3 Earnings:

Among Nifty stocks, Wipro (up 0.55%) and IndusInd Bank (up 0.06%) will announce their Q3 earnings today.

Bandhan Bank (up 0.23%), MindTree (up 1.29%), Network 18 Media & Investments (up 0.37%) and TV18 Broadcast (down 1.21%) will also announce their Q3 results today.

Delta Corp was down 3.24%. On consolidated basis, net profit rose 9% to Rs 55.07 crore in Q3 December 2019 as against Rs 50.53 crore in Q3 December 2018. Net sales remained muted and stood at Rs 205.13 crore on YoY basis. The result was announced after market hours yesterday, 13 January 2020.

Stocks in Spotlight:

Yes Bank (down 3.44%) continued to be banned from trading in NSE's F&O segment today after the security crossed 95% of market wide position limit.

Piramal Enterprises rose 1.93% to 1464. The company issued 1.16 lakh compulsorily converted debentures (CCDs) to Canadian pension fund manager Caisse de d et placement du Quec (CDPQ) on 19 December 2019, which has increased its total diluted shareholding from 3.68% to 8.99%. The announcement was made after trading hours yesterday, 13 January 2020.

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