All You Need To Know Going Into Trade On Dec. 4
Stocks in Asia opened steady and U.S. equity-index futures rallied after U.S. Senate narrowly approved tax reform in early hours Saturday. The dollar recovered some of Friday’s losses.
The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.3 percent to 10,159.50 as of 6:50 a.m.
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Here’s a quick look at all that could influence equities on Monday.
- Futures on the S&P 500 rose 0.6 percent after Senate passage of tax-cut legislation drew focus away from the continuing investigation into connections between Donald Trump’s aides and Russia .
- S&P 500 fell 0.2 percent on Friday after Michael Flynn pleaded guilty to lying to federal agents.
- The Russell 2000 Index of small caps fell 0.6 percent Friday.
- The Stoxx Europe 600 Index declined 0.7 percent.
- The MSCI Emerging Market Index fell 0.4 percent, falling for the fourth day in five.
- Japan’s Topix index was little changed, while the Nikkei 225 Stock Average down 0.2 percent.
- Australia’s S&P/ASX 200 Index was steady.
- South Korea’s Kospi index rose 0.4 percent.
Key Events This Week
- On Monday, Euro-area finance ministers discuss the future of the euro area, vote for a new president, and debate Greece’s bailout review in Brussels.
- On Wednesday, the Reserve Bank of India’s Monetary Policy Committee will announce its interest rate decision.
- The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
- The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
- U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report next Friday may also show a bump up in average hourly earnings.
- Countries setting monetary policy include Australia, Brazil, Canada, India and Poland.
- West Texas Intermediate crude advanced 1.7 percent to settle at $58.36 a barrel. Futures ended the week down 1 percent, the biggest loss since early October.
- Gold futures rose 0.5 percent to $1,282.70 an ounce.
Earnings To Watch
- Fiem Industries
- GPT Infra
- Lumax Auto
- Nestle India
- Sandur Manganese
- Shirpur Gold
- Shree Pushkar Chemicals
- Southern Petro
Earnings Reaction To Watch
Setco Automotive (Q2, YoY)
- Revenues up 31 percent at Rs 135 crore.
- Net profit up 1,300 percent at Rs 14 crore.
- Other income of Rs 7 crore.
- Ebitda up 54 percent at Rs 18.5 crore.
- Margins at 13.7 percent versus 11.7 percent.
Mahindra Logistics (H1, YoY)
- Revenues up 37 percent at Rs 1,688 crore.
- Net profit up 29 percent at Rs 28.7 crore.
- Ebitda up 48 percent at Rs 51.8 crore.
- Margins at 3.1 percent versus 2.9 percent.
Stocks To Watch
- Biocon says U.S. FDA approved Trastuzumab, jointly developed with Mylan. The biosimilar is used for treatment of patients with breast or metastatic stomach cancer.
- Coal India production for November at 51.29 million tonnes. Offtake at 50.67 million tonne.
- Dr. Reddy’s gets EIR from U.S. FDA for CPS facility at Telangana.
- JSW Energy secured PPAs aggregating to 208 MW. Proportion of long-term PPAs increased to 69.3 percent from 64.6 percent in July-September period.
- Asahi India Glass to make strategic investment in Timex Group Precision Engineering.
- Transformers & Rectifiers received order worth Rs 127 crore from Power Grid.
- Tata Steel to acquire 74 percent stake in Bhubaneshwar Power for Rs 255 crore from JL Power Ventures.
- VST Tillers November sales up 34 percent YoY at 2,922 units.
- TVS Motor November sales up 12 percent YoY at 2.51 lakh units.
- Tata Motors November sales up 58 percent YoY at 52,464 units.
- Hero MotoCorp November sales up 26 percent YoY at 6.05 lakh units.
- Wipro to contest $140 Million lawsuit filed by National Grid U.S.
- Eris Lifesciences to avail loan of Rs 400 crore from Axis bank. Loan proceeds to part-fund Strides deal
- DLF to raise Rs 11,250 crore via CCDs, warrants and QIP.
- Astral Poly Technik hikes stake in Astral Pipers, Kenya from 37.5 percent to 50 percent.
- Mirc Electronic to raise Rs 144 crore via allotment of shares & warrants to non-promoter group (Ashish Kacholia and others) at Rs 37.53 per share/warrant.
- Future Retail Board approves allotment of 93 lakh shares at Rs 537 per share to Hypercity Retail shareholders.
- REC to hold roadshow from Dec. 6, Bloomberg reported citing people familiar with the matter.
- Digjam: JSL Enterprises bought 4.55 lakh shares or 0.5 percent equity at Rs 18.85 each.
- Sri Adhikari Brothers: Canara Bank Securities sold 2.17 lakh shares or 0.6 percent equity at Rs 18.9 each.
- Sadbhav Infra: Xander Investment Holding XVII sold 1.20 crore shares or 3.4 percent equity stake at Rs 136.02 each.
- Hubtown: Epoch Synthetics sold 3.8 lakh shares or 0.5 percent equity at Rs 134.3 each.
- Apcotex Industries: Promoter Devanshi Anant Veer Jalan sold 1.26 lakh shares or 0.6 percent equity at Rs 471.05 each
- Benefit and Welfare Trust sold 36 lakh shares or 2.9 percent equity at Rs 701.15 each.
- Emerging Markets Equity Fund bought 23.7 lakh shares or 1.9 percent equity at Rs 697.65 each.
- Altavista Capital India Fund bought 1.19 lakh shares or 0.5 percent equity at Rs 199.89 each.
- Lobco bought 88,906 shares or 0.5 percent equity at Rs 198.83 each.
- UNO Metals bought 2.08 lakh shares or 0.8 percent equity at Rs 74.91 each.
- NG Industries sold 2.10 lakh shares or 0.8 percent equity at Rs 75.54 each.
Who’s Meeting Whom?
- Gujarat Pipavav to meet Credit Suisse on Dec. 4.
- PC Jewellers to meet investors in the U.S. from Dec. 4 – 8.
- LT Foods to meet investors in the U.S. from Dec. 4 – 8.
- Sical Logistics promoter V G Siddhartha bought 4 lakh shares between Nov. 30 and Dec 1.
- Sadbhav Engineering promoter sold 5 lakh shares on Nov. 29.
- GNA Axles promoter bought 63,000 shares between Nov. 29 – 30.
- Glenmark promoter Glenn Saldanha bought 17,000 shares on Nov. 29.
- Panacea Bio promoter sold 2.4 lakh shares between Nov. 27 – 29.
Top Gainers And Losers
- Nifty December futures trading at 10,154, premium of 32 points versus 52 points.
- December Futures: Nifty open interest up 3 percent , Bank Nifty OI up 8 percent.
- India VIX at 14.7, up 9 percent.
- Max OI for Dec. series at 10,500 Call, OI at 57.8 lakhs, OI up 17 percent.
- Max OI for Dec. series at 10,000 Put, OI at 791 lakhs, up 15 percent.
- No securities in ban.
- Nifty PCR at 1.20 versus 1.32.
- Nifty Bank PCR at 0.96 versus 0.92.
IDFC’s India Strategy
- Expect Nifty earnings to register 15.1 percent compounded annual growth rate by March 2019.
- March 2019 Nifty earnings per share target at Rs 579. i.e., 20.9 percent YoY growth.
- Asset-heavy and export-oriented industries to do well as global economy recovers.
- Consumption to find growth impetus from retail credit.
- Overweight on engineering and capital goods, construction, metals and mining, oil and gas, consumer goods, automobiles, media and pharmaceuticals.
- Top large-cap picks: SBI, ONGC, Motherson Sumi, HPCL, Hindalco, BEL, Aurobindo Pharma, & Ashok Leyland.
- Top mid/small cap picks: Kajaria Ceramics, SpiceJet, Ashoka Buildcon, Greenply Industries.
- Top sell: Bajaj Auto.
Edelweiss On DLF
- Maintained ‘Buy’; hiked price target to Rs 273 per share from Rs 185.
- Balance sheet recovery to provide significant operational flexibility.
- NCR residential segment to be focus area.
- Expect gradual uptick in DLF’s operations in coming quarters.
- Positives: Key beneficiary of consolidation, steady rental portfolio, improvement in balance sheet.
Jefferies On Cement
- Cement sector is facing two headwinds in the near term.
- Pet coke ban could lead to 2-11 percent cut in operating income.
- Sand mining ban to impact demand in at least five states.
- Demand will remain subdued in the near term.
- Dalmia Bharat: Downgraded to ‘Hold’ from ‘Buy’; cut price target to Rs 2,957 from Rs 3,038.
- ACC: Maintained ‘Underperform’; raised price target to Rs 1,502 from Rs 1,359.
- Ambuja: Maintained ‘Underperform’; raised price target to Rs 238 from Rs 203.
- Shree Cement: Maintained ‘Hold’; raised price target to Rs 18,188 from Rs 18,109.
- UltraTech: Maintained ‘Hold’; raised price target to Rs 4,210 from Rs 3,585.
CLSA On Infosys’ New MD & CEO
- Salil Parikh’s appointment is a promising choice.
- Salil brings tenured experience with added advantage of working in a global firm.
- This is perhaps the best of three outcomes for Infosys.
- Positives: hire an external CEO within three months and with a long tenure.