All You Need To Know Going Into Trade On Dec. 26

Japan’s stocks opened flat after reaching the highest in more than a quarter century Monday, while the euro rebounded from a brief slump during holiday-thinned trading.

U.S. equity-index futures opened little changed in their first trading this week. Australia and Hong Kong markets remain shut Tuesday, though most of the rest of Asia comes back online.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India was a little changed at 10,532 as of 6:50 a.m.

Short on time? Well, then listen to this podcast for a quick summary of the article!

DayBreak

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

Global Cues

  • The U.S. dollar and Russia’s ruble advanced in thin trading on a day when most markets worldwide are closed for a holiday.

Asian Cues

  • The Topix index of Japanese stocks was little changed, as was the Nikkei 225 Stock Average.
  • Contracts on the S&P 500 Index were little changed.
  • South Korea’s Kospi index rose 0.6 percent.

Among the events in focus for investors this week:

  • Bank of Japan Governor Haruhiko Kuroda delivers a speech Tuesday.
  • U.S. consumer confidence, home prices and trade data are on tap.
  • Vietnam, which has been averaging around 6 percent growth, reports fourth-quarter GDP.
  • Italy’s parliament is expected to be dissolved ahead of elections in 2018.

Commodity Cues

  • West Texas Intermediate crude was little changed at $58.55 a barrel.
  • Gold was little changed at $1,274.31 an ounce.
  • Brent crude ended higher at $65.25/barrel, up 0.5 percent.

Shanghai Exchange

  • Steel trades lower for second day; down 1.2 percent.
  • Aluminium trades lower; down 0.6 percent.
  • Zinc trades lower; down 0.7 percent.
  • Copper snaps eleven-day losing streak; down 0.1 percent.
  • Rubber snaps three-day losing streak; up 0.3 percent.

Indian ADRs

Stocks To Watch

  • BHEL gets Rs 672 crore order from Indian Railways.
  • CBI files corruption charges against NBCC chairman.
  • Larsen & Toubro gets Delhi Expo Centre phase-I contract for Rs 2,790 crore.
  • Tata Power wins mining license project in Kamchatka province in Russian Far East.
  • EID Parry to hive off its bio-pesticides business to Coromandel on a slump sale basis for Rs 338 crore.
  • Religare unit to divest its entire 50 percent holding in Bartleet.
  • Thyssenkrupp to have 50 percent stake in Tata Steel joint venture for six years.
  • Bharat Financial completes the third securitisation, sells loan portfolio worth Rs 653 crore.
  • Suzlon to sell its stake in Shanay and Saroja to Skeiron renewable energy for Rs 280 crore.
  • GVK Power unit wins bid for 17,06,300 tonnes coal.
  • Tech Mahindra to acquire 32.07 percent stake in Comviva Technologies for Rs 328.65 crore.
  • Dewan Housing Finance approves additional investment of Rs 16.33 crore in Social Worth Technologies.
  • Lumax Auto says tax department conducting search at group’s locations.
  • SEBI revokes shell company status on Prakash Industries.
  • Welspun Corp receives an order for the supply of 1.24 lakh MT pipes.
  • Jindal Poly’s Netherlands subsidiary to issue 2.6 lakh shares to a third-party investor.

Bulk Deals

  • Ester Industries: Garnet International bought 7.5 lakh shares or 0.9 percent equity at Rs 49.86 each.
  • Rushil Décor: Aspire Emerging Fund bought 1.6 lakh shares or 1.1 percent equity at Rs 900 each.
  • Lokesh Machines: Sushmita Ashish Kacholia sold 1.2 lakh shares or 0.7 percent equity at Rs 73.95 each.
  • Tara Jewels: Promoter Rajeev Sheth sold 3.4 lakh shares or 1.4 percent equity at Rs 16.86 each.
  • The Byke Hospitality: Promoter Anil Patodia bought 2.01 lakh shares or 0.5 percent equity at Rs 173.91 each.

Who's Meeting Whom?

  • Dixon Tech to meet Nine Rivers Cap on Dec. 26.
  • Chola to meet ASK Investment managers on Dec. 26.
  • NCC to meet investors from Dec. 27- Jan. 25 in India and abroad.

Trading Tweaks

  • Morepen Labs and DB Realty’s circuit filter revised to 10 percent
  • Jindal Worlwide: Ex date for 2:1 stock split.
  • Confidence Finance And Trading: Last trading day before consolidation from Re1 to Rs10 per share.

Rupee Check

  • The home currency ended at 64.05 a dollar, up 0.03 percent from its Thursday’s close of 64.06.

Top/Worst Performers Last Week

Index Trends

F&O Cues

  • Nifty December Futures closed trade at 10505, premium of 12 points versus 18 points.
  • December Futures-Nifty open interest down 2 percent and Bank Nifty open interest down 1 percent.
  • India VIX ended at 11.5, down 4 percent.
  • Max open interest for December series at 10,500 Call, open interest at 56.4 lakhs, open interest down 14 percent.
  • Max open interest for December series at 10,000 Put, open interest at 75 lakh, open interest down 6 percent.

F&O Ban

  • In Ban: Balrampur Chini, DHFL, DLF, Fortis Healthcare, GMR Infrastructure, IFCI, Jaiprakash Associates, RCom, Wockhardt
  • Out Of Ban: HDIL, Jet Airways, JSW Energy

Only intraday positions can be taken in stocks which under F&O ban. There is a penalty in case of rollover in intraday positions.

Brokerage Radar

Credit Suisse on Tata Steel

  • Maintained ‘Outperform’ and a price target of Rs 830 per share, implying a potential upside of 16 percent from Friday’s close.
  • Assess sensitivity around Rs 12,800 billion rights issue and capacity expansion.
  • 5mt brownfield capacity expansion to cost Rs 23,500 billion over four years.
  • Rights issue to keep leverage ratios at a comfortable level for organic expansion.
  • Capex will lead to higher debt, no Ebitda generation at a point making the stock look expensive.
  • Project EV much higher than CapEx cost.
  • Outlook does not change, and we remain constructive on the stock.

Kotak On Wipro

  • Maintained ‘Reduce’ with a price target of Rs 275 per share.
  • Management confident of catching up with industry peers on growth by the next quarter.
  • EBIT margins to remain steady and possibly have an upward bias in the next two years.
  • Stock builds in management optimism.
  • Pressure on market share especially in vendor consolidation decision a concern.
  • Shrinkage in revenues on Healthplan already has played out.
  • Valuations are full even after building in acceleration in growth.

Motilal Oswal On NHPC

  • Initiated a coverage with ‘Buy’ rating and a price target of Rs 30, implying a potential upside of 23 percent from yesterday’s close.
  • Valuations attractive at one-time book value and 6 percent dividend yield.
  • Regulated equity to increase 35 percent, despite Subhanshiri project being on hold.
  • Under-recoveries to decline on natural attrition and approval of five tariff orders.
  • Higher dividend pay-out is boosting return on equity; room for even higher payout/buyback.
  • Earnings are at inflexion after five years of stagnation.

Nomura On HDFC

  • Upgraded to ‘Buy’ From ‘Neutral’ and price target of Rs 2000, implying a potential upside of 17.5 percent from Friday’s close.
  • Risk reward evenly placed now.
  • Core mortgage – Growth robust; spread pressure could remain.
  • HDFC’s subsidiaries contribute above 50 percent of SOP value and best in class.
  • HDFC’s strategy of investing more in subsidiaries a high-value accretion for investors.

Nomura On Ashok Leyland

  • Maintained ‘Buy’ rating with price target of Rs 145 per share.
  • Improving on MHCV demand visible.
  • Roadmap for the e-way bill to curtail overloading: positive for demand.
  • Higher tonnage share continues to rise.
  • Ashok Leyland is a pure play on MHCV segment and commands a higher share in the higher tonnage segments.
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