Traders work on the trading floor of the Motilal Oswal Financial Services Ltd. office in Mumbai, India. (Photographer: Vivek Prakash/Bloomberg)

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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DayBreak

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

Global Cues

  • 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.

Europe Check

  • 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.

Asian Cues

  • 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.

Commodity Cues

  • 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.

Indian ADRs

All You Need To Know Going Into Trade On Dec. 4

Earnings To Watch

  • Alphageo
  • Fiem Industries
  • GPT Infra
  • Lumax Auto
  • Nestle India
  • Sandur Manganese
  • Shirpur Gold
  • Shree Pushkar Chemicals
  • Southern Petro
  • Virinchi

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.

Bulk Deals

  • 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

Escorts:

  • 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.

5Paisa Capital

  • 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.

Mold Tek

  • 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.

Insider Trades

  • 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

All You Need To Know Going Into Trade On Dec. 4

Index Trends

All You Need To Know Going Into Trade On Dec. 4

F&O Cues

  • 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.
All You Need To Know Going Into Trade On Dec. 4

F&O Ban

  • No securities in ban.

Put-Call Ratio

  • Nifty PCR at 1.20 versus 1.32.
  • Nifty Bank PCR at 0.96 versus 0.92.

Brokerage Radar

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.