All You Need To Know Going Into Trade On Dec. 18

A sell-off in U.S. stocks that sent the S&P 500 Index to its lowest close in 14 months spread to Asia, suggesting investor worries about the outlook for growth that are at odds with the projected Federal Reserve interest-rate hike on Wednesday.

Equities declined in Japan, Australia and South Korea. U.S. futures were little changed after the S&P 500 finished Monday at the lowest since October 2017 and the Russell 2000 Index of smaller companies entered a bear market. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.35 percent to 10,875 as of 6:51 a.m.

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BQ Live

Here’s a quick look at all that could influence equities today.

U.S. Market Check

• U.S. equity indexes slid to their lowest close in 14 months as investors weighed the impact of the Fed on growth in a market already anxious over trade, geopolitical tensions and a possible government shutdown.

Asian Cues

• Japan’s Topix index fell 1.6 percent as of 9:13 a.m. in Tokyo.
• Australia’s S&P/ASX 200 Index slid 1.2 percent.
• FTSE China A50 futures dropped 0.5 percent.
• Hong Kong’s Hang Seng Index futures were little changed overnight.
• S&P 500 futures rose 0.2 percent. The S&P 500 Index fell 2.1 percent as of 4 p.m. New York time.

Coming Up

• The Fed holds its final policy meeting of 2018 on Tuesday and Wednesday. The rate decision will be followed by a press conference with Chairman Jerome Powell.
• The Bank of Japan’s monetary policy decision is due Thursday, followed by a briefing from Governor Haruhiko Kuroda. A Bank of England decision is also Thursday.
• A partial U.S. government shutdown could start this week if lawmakers and Trump fail to resolve how much money to allocate for Trump’s wall along the Mexican border.

Commodity Cues

• West Texas Intermediate crude declined 1.1 percent to $49.32 a barrel, on track for a third day of declines.
• Gold was steady at $1,246.10 an ounce.
• The Bloomberg Commodity Index dipped 1.2 percent to the lowest in almost 18 months Monday.

Indian ADRs

Stocks To Watch

• Karnataka State Pollution Control Board renewed the consent to operate for Graphite India’s electrode plant in Bengaluru for a period up to June 30, 2020 only with the condition to shift the unit from the existing location. The company said that this condition will not have adverse impact on the production capacity of the graphite electrode division in the medium term and long-term horizon.
• Tata Steel and Thyssenkrupp AG’s European joint venture will be headed by the latter’s steel division chief Andreas Goss, who will also chair the management board. Hans Fischer, the current chief executive officer of Tata Steel Europe, will be the deputy chief executive officer and chief technology officer of the new entity. It also announced the elevation of Tata Steel’s Group Executive Vice President Sandip Biswas as the designated chief financial officer, and the Thyssenkrupp’s steel business’ Chief Financial Officer Premal Desai as the chief strategy officer of the new partnership which will be headquartered in Amsterdam.
• Tata Motors-Jaguar Land Rover hired Boston Consulting Group for $3.2 billion turnaround plan, the spokesperson of JLR worker’s representative body Unite Union said. He added that the workers had not been informed of any job reductions in January next year and do not expect any, as they have to be given at least 45 days of notice. (Bloomberg News)
• Bombay Dyeing and Manufacturing Company’s board approved closure of loss-making Indonesian arm from Dec. 31.
• Sadbhav Infrastructure and its parent company Sadbhav Engineering arrived at an amicable settlement with Montecarlo Limited with the help of settlement of litigation. Both, NCLT and Gujarat High Court, disposed the matter and accordingly the legal matters now stands closed.
• Jet Airways said that as per directions of State Bank of India, forensic audit of specific transactions of the company for the period of April 2014 to March 2018 was already in progress and the aviation company is co-operating fully with auditors and providing them all the information.
• Ashoka Buildcon board approved to raise Rs 150 crore via non-convertible debentures. Company’s arm also raised Rs 150 crore from Morgan Stanley India Infrastructure for city gas distribution.
• NMDC revised prices of lump ore at Rs 3,250 per ton and fines ore at Rs 2,860 per month with effect from Dec. 13.
• IL&FS said it was looking to sell 22 assets and businesses in its domestic roads vertical to seek expressions of interest for road projects. The company appointed Arpwood Capital and JM Financial as financial and transaction advisers. Alvarez & Marsal to act as resolution consultants.
• Punjab & Sind Bank revised its MCLR across various tenors. One month MCLR is at 8.2 percent and one year MCLR at 8.85 percent.

Who’s Meeting Whom

• Great Eastern Shopping to meet ICICI Prudential AMC on Dec. 18.
• Mahindra & Mahindra to meet Canara Robeco, SBICap Securities and other investors from Dec. 19-20.
• MIRC Electronics to meet RARE Enterprises, Emkay Global and other investors on Dec. 18.

Insider Trading

• Jindal Stainless Promoter Abhuday Jindal acquired 43,000 shares on Dec. 14.

Trading Tweaks

• Capital India Finance ex-date for rights issue at 4:5.
• EIH Associated Hotels, Nitco price band revised to 10 percent.
• Goa Carbon price band revised to 5 percent.

Money Market Update

• Rupee closed at 71.55/$ on Monday versus Friday’s close of 71.89/$.

F&O Cues

• Nifty December futures closed trading at 10,910, premium of 12 points.
• Maximum open interest for December series call at 11,000 strike price, open interest at 44.4 lakh shares.
• Maximum open interest for December series put at 10,500 strike price, open interest at 42.7 lakh shares.

Stocks In F&O Ban

• Adani Enterprises
• Adani Power
• Jet Airways
• Reliance Capital

Put-Call Ratio

• Nifty PCR at 1.61 from 1.53.
• Nifty Bank PCR at 1.38 from 1.21.

Get a detailed drawdown of derivatives on BloombergQuint's F&O page.

Fund Flows

Brokerage Radar

Antique on Indian IT

• Buy-back season for Indian-IT expected to continue.
• Expect Infosys to buy back shares worth $1.6 billion; Wipro buyback post NCLT approval.
• Believe that buyback and increase in overall payout ratio to be key driver.

Kotak Securities on upstream oil companies

• ONGC: Maintained Buy; Hiked target price to Rs 190 from Rs 185.
• Oil India; Upgraded to ‘Buy’ from ‘Sell’; Hiked target price to Rs 200 from Rs 190.
• Higher gas and steady crude to augur well.
• Recent increase in gas prices in U.S. and U.K. to drive sharper increase in domestic gas price.
• Don’t expect government to put excess subsidy burden on oil PSUs.

Kotak Securities on InterGlobe Aviation

• Maintained ‘Buy’; Hiked target price to Rs 1,220 from Rs 950.
• Healthy capacity addition driving share gains.
• Yields data points indicate that the worst is over.
• Favorable movement of either crude or rupee to drive material swing in profits.

Motilal Oswal on IGL

• Maintained ‘Buy’; Hiked target price to Rs 381 from Rs 371.
• Volumes traction remains strong; more room to grow.
• Gurugram could be a key contributor; to start by mid-CY19.
• Triggers: Gas under GST, ban on polluting industrial fuels and increasing penetration.

Nomura on Container Corp

• Maintained ‘Buy; for target price of Rs 800.
• Indian Railways cuts haulage charge for empty containers and wagons by 25 percent.
• Bigger benefit to come from market share gains as the move could boost rail volumes.
• ConCor to see early benefits from Q4; Further recent price hikes to compensate rise in cost.