The market ended with strong gains on Friday, with the Nifty closing above 12,050 mark. The gains were supported by positive global cues triggered by US reaching 'in-principle' deal with China and Boris Johnson's crushing victory in UK election. A dovish stance by the European Central Bank (ECB) further helped to provide support.

The barometer index, the BSE Sensex, rose 428 points or 1.05% to 41,009.71. The Nifty 50 index rose 114.90 points or 0.96% to 12,086.70.

The buying was broad based. The S&P BSE Mid-Cap index rose 0.92% and the S&P BSE Small-Cap index added 0.82%.

The market breadth was strong. On BSE, 1548 shares advanced while 985 shares declined. A total of 170 shares were unchanged.

Economy:

Moody's Investors Service on Friday said it has lowered its 2019 GDP growth forecast for India to 5.6% as slow employment growth weighs on consumption. It expects economic growth to pick up in 2020 and 2021 to 6.6% and 6.7% respectively, but sees the pace of growth remaining lower than past.

Moody's said fiscal measures undertaken by the government - such as corporate tax rate cuts, bank recapitalisation, infrastructure spending plans, support for the auto sector and others - do not directly address widespread weakness in consumption demand, which has been the chief driver of the economy.

India's retail inflation jumped to a 40-month high in November on higher food prices, while industrial output contracted in October from a year earlier, data showed on Thursday.

India's IIP declined for third straight month at 3.8% in October 2019, in addition to 4.3% dip in September 2019 and 1.4% decline in August 2019. The numbers were better than expected given that in October there are several holidays when factories were shut.

The manufacturing sector output declined 2.1%, while electricity generation plunged 12.2% in October 2019 contributing to the overall decline in industrial production. Further, the mining sector production plunged 8.0% in October 2019.

The all-India general CPI-based retail inflation jumped to 5.54% in November 2019, compared with 4.62% in October 2019. The higher inflation was driven by transitory factors such as increase in food inflation while core inflation continued to remain subdued, reflecting the tepid demand in the economy. The core CPI inflation rose marginally to 3.50% in November 2019 compared with 3.44% in October 2019.

Food price inflation (rural and urban) climbed 10.01% in November 2019, as against 7.89% in October 2019. Food inflation rose sharply as unusually heavy rains at the end of the monsoon season hit crop yields and caused a spurt in prices of vegetables such as onions.

The RBI in its fifth bi-monthly monetary policy statement on 5 December 2019, revised retail inflation projection upwards to 4.7-5.1% for the second half of FY2020 and 3.8-4% for the first half of FY2021.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.787% compared with 6.770% in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.82, compared with its close of 70.835 during the previous trading session.

In the commodities market, Brent crude for February 2020 settlement was up 94 cents at $65.14 a barrel. The contract rose 48 cents, or 0.75%, to settle at $64.2 a barrel during the previous trading session.

Foreign Markets:

Shares in Europe and Asia jumped on Friday after news that the U.S. and China have reached a phase one trade deal in principle, while the U.K.'s ruling Conservative Party has won a commanding majority in the general election.

The White House has offered to scrap the next round of tariffs on Chinese exports to the U.S. that are set to take effect on Sunday. Washington has also proposed slashing existing duties on $360 billion in Chinese products by 50%.

In Europe, U.K. Prime Minister Boris Johnson's Conservative Party has won a commanding majority in the country's general election, granting Johnson the power to drive through his Brexit deal and take the U.K. out of the EU before the January 31 deadline.

Meanwhile, ECB left its key interest rates and stimulus package unchanged during Christine Lagarde's first policy meeting in charge on December 12th, with the main refinancing rate remaining at 0% and the deposit rate at -0.5%. It also confirmed that net asset purchases had started in November at a monthly rate of 20 billion euros ($22.3 billion) and that this will continue to run “as long as necessary” to reinforce the accommodative policy stance.

US stocks surged to new records on Thursday propelled by reports of the US-China trade deal. In US economic data, new unemployment claims jumped by 49,000 to 2.52 lakh during the week ended 7 December 2019 the highest level since September 2017, though the data was likely affected by the US Thanksgiving holiday.

US inflation remained tame, with the producer-price index unchanged in November, with core producer prices, which strips out volatile energy and food prices, falling to a three-year low of 1.3%.

Buzzing Indian Sectors:

The Nifty Metal index rose 2.26% to 2,626.75, buoyed by the positive developments on the US-China trade war front. The index is up 4.67% in two sessions.

Vedanta (up 3.75%), Hindalco Industries (up 3.63%), Tata Steel (up 2.39%), SAIL (up 2.01%), Hindustan Copper (up 1.34%), JSW Steel (up 1.13%), NALCO (up 0.69%), NMDC (up 0.35%) and Hindustan Zinc (up 0.22%) advanced.

The Nifty Bank index rose 1.10% to 32,014.25. The index is up 2.74% in three sessions.

Among private sector banks, Axis Bank (up 4.21%), RBL Bank (up 3.18%), IndusInd Bank (up 3.07%), Yes Bank (up 2.87%), Federal Bank (up 1.88%) and ICICI Bank (up 0.44%) rose.

Kotak Mahindra Bank (down 1.38%), City Union Bank (down 1.22%) and HDFC Bank (down 0.05%) declined.

Among public sector banks, UCO Bank (up 11.84%), Corporation Bank (up 8.42%), Union Bank of India (up 6.90%), Punjab National Bank (up 6%), Canara Bank (up 4.61%), IDBI Bank (up 4.34%), Bank of Baroda (up 3.93%) and State Bank of India (up 3.39%) rose.

Stocks in Spotlight:

Dr Reddy's Laboratories fell 2.70% to Rs 2827.10 after US-based Amneal Pharmaceuticals beat the Indian drug maker to launch EluRyng (etonogestrel/ethinyl estradiol vaginal ring), the first generic version of NuvaRing. According to IQVIA database, NuvaRing U.S. annual sales for the 12 months ended October 31, 2019 were approximately $976 million.

BGR Energy Systems hit 20% upper circuit at Rs 35.50. The company was awarded a contract by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) for execution of of 1x660 MW supercritical ennore thermal power station expansion project under EPC basis. The total value of the project is Rs 4442.75 crore. The overall contract completion period is 36 months from the date of letter of intent.

IT major Wipro rose 1.80% to Rs 243.70. The company was awarded a strategic multi-year cyber governance, cloud and infrastructure services transformation engagement by Tokyo-based Olympus.

Infosys advanced 1.34% to Rs 711.25. The company said its subsidiary, EdgeVerve Systems, announced partnership with IDEGO, a leading consulting firm for digital transformation, to develop and deliver innovative tech products to their customers across Latin America. Together, they will assist enterprises across telecom and financial services to help improve enterprise-wide productivity and efficiency.

Separately, Infosys in an exchange filing during market hours today, 13 December 2019, said that it was aware of several media stories referencing an additional securities class action lawsuit against Infosys. The company clarified that is not aware of any additional complaints, other than the initial complaint, which was disclosed on 24 October 2019.

It added that it is not uncommon for plaintiffs' lawyers to issue press releases or other media communications asking potential plaintiffs to contact them in order to apply for lead plaintiff status in an existing lawsuit. It appears that the press communications by the Schall Law Firm is soliciting potential lead plaintiff applicants.

The Schall Law Firm, a US-based shareholder rights litigation firm, announced the filing of a class action lawsuit against Infosys in a US court.

Sterling & Wilson Solar was locked in an upper circuit of 5% at Rs 300.stake in software major TCS. The move led to the fundraising of Rs 400 crore. The amount will be used entirely to bring down Sterling & Wilson's debt, reports added. 60, extending its gains for third session. Media reported that Shapoorji Pallonji Group reduced its

Meanwhile, Sterling & Wilson Solar announced at the fag end of market hours yesterday, 12 December 2019, that its Australian subsidiary, Sterling & Wilson Solar Australia, executed a definitive contract for engineering, construction and procurement (EPC) for a 144 MW DC solar farm in Australia amounting to about Rs 827 crore.

Magma Fincorp was locked in an upper circuit of 5% at Rs 55 after the company announced that it has raised Rs 350 crore by way of NCDs from Nederlandse Financierings Maatschappij Voor Ontwikkelingslanden N.V. (FMO), a Dutch Entrepreneurial Development Bank. Fresh capital raising will help the company in supporting its on-going growth plans. The NCDs issued on a private placement basis are unlisted, redeemable, senior secured and transferable.

Navin Fluorine International rose 3.30% to Rs 937.95. The company is planning a capex program at Dahej (Gujarat) through a wholly owned subsidiary with an estimated aggregate capital outlay of over Rs 450 crore over the next 3-4 years.

Premier Explosives surged 12.03% to Rs 149. The company has received the license from Telangana state government to work a factory at Katepally, near Hyderabad.

Politics:

President Ram Nath Kovind on Thursday gave his assent to the Citizenship (Amendment) Bill, 2019, turning it into an Act. According to an official notification, the Act comes into effect with its publication in the official gazette on Thursday. The Citizenship (Amendment) Bill was passed by Rajya Sabha on Wednesday and by Lok Sabha on Monday.

According to the Act, members of Hindu, Sikh, Buddhist, Jain, Parsi and Christian communities who have come from Pakistan, Bangladesh and Afghanistan till December 31, 2014 and facing religious persecution there will not be treated as illegal immigrants but given Indian citizenship. The Act will grant the refugees of the six communities Indian citizenship after residing in India for five years, instead of earlier requirement of 11 years. The Act also proposes to give immunity to such refugees facing legal cases after being found as illegal migrants.

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