A stock broker reacts during market hours in a dealing room in Mumbai (Photographer: Prashanth Vishwanathan/Bloomberg News)

All You Need To Know Going Into Trade On Dec. 28

Stocks in Asia flirted with a record high on Thursday in muted trading after a listless U.S. session overnight offered little direction ahead of New Year holidays.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.3 percent to 10,559 as of 6:50 a.m.

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

Global Cues

  • U.S. stocks edged higher on Wednesday, amid trading thinned by a holiday-shortened week. The dollar weakened against most peers.
  • 10- year Treasury yields headed for a fourth day of declines, while the dollar traded near month lows.
  • The best year for U.S. equities since 2013 is ending with a bit of a whimper after stocks soared in the week before the holidays as Republicans passed a major overhaul of the tax code.
  • Bitcoin fell below $15,000 after its biggest gain in two weeks took it above $16,000.

Europe Check

  • Stocks in Europe ended slightly higher following a mixed session in Asia.
  • The euro and pound gained, while bonds in Europe were mixed.

Asian Cues

  • Japan’s Topix index was little changed in early trade, as was the Nikkei 225 Stock Average
  • Contracts on Hong Kong’s Hang Seng Index were also little changed.
  • Futures on the S&P 500 Index were little changed.

Here are some of the key events scheduled for this week:

  • U.S. trade figures are due Thursday.
  • Egypt decides on interest rates.

Commodity Cues

  • Brent crude snapped six-day winning streak; ended lower at $66.44/barrel, down 0.9 percent
  • West Texas Intermediate crude was little changed at $59.61 a barrel.
  • Gold futures were little changed at $1,287.55 an ounce.
  • LME copper futures advanced 1.6 percent to $7,240.00 per metric ton Wednesday, reaching the highest in about four years.
  • Sugar ended near three-week high at 14.9 cents per pound; up 1.6 percent.

Shanghai Exchange

  • Steel trades lower; down 1.4 percent.
  • Aluminium trades higher for second day; up 1.3 percent.
  • Zinc trades higher for second day; up 0.1 percent.
  • Rubber trades lower; down 0.5 percent.

Indian ADRs

Stocks To Watch

  • Star Cement received Rs 158.82 crore as capital investment subsidy from Central government.
  • Quess Corp acquired Master staffing solutions and 60 percent stake in Golden Star Facilities and Service.
  • Riddhi Siddhi board approved proposal to de-list shares of the company. Promoters set the offer floor price at Rs 510 apiece.
  • SEBI asked Axis Bank to conduct inquiry on leak of unpublished price sensitive financial information within three months.
  • Kolte Patil’s Pune township signed Rs 193 crore agreement with KKR.
  • SBI board approved raising up to Rs 8,000 crore through tier-1 bonds by March.
  • United Bank raised Rs 100 crore through tier-1 bonds.

Bulk Deals

  • Bajaj Auto: Nirav Trust sold 16.69 lakh shares or 0.6 percent equity at Rs 3351.40 each.
  • JHS Svendgaard: Sixth Sense India Opportunities-I sold 3.16 lakh shares or 0.7 percent equity at Rs 74.06 each.
  • Bajaj Finserv: Anant Bajaj Trust sold 9.19 lakh shares or 0.6 percent equity at Rs 5372.14 each.
  • Sintex Plastics: Hypnos Fund sold 30 lakh shares or 0.5 percent equity at Rs 81.01 each.

Bajaj Electricals

  • Madhu Bajaj bought 7.70 lakh shares or 0.8 percent equity at Rs 475 each.
  • Neelima Bajaj Swamy bought 7.90 lakh shares or 0.8 percent equity at Rs 475 each.
  • Anant Bajaj Trust sold 21.80 lakh shares or 2.1 percent equity at Rs 475 each.

Bajaj Holding

  • Nirav Trust bought 21.99 lakh shares or 2 percent equity at Rs 3012.40 each.
  • Anant Bajaj Trust bought 21.65 lakh shares or 1.9 percent equity at Rs 2963.76 each.
  • Kumud Bajaj sold 12.12 lakh shares or 1.1 percent equity at Rs 2987.50 each.
  • Madhu Bajaj sold 18.97 lakh shares or 1.7 percent equity at Rs 2987.50 each.

ADF Foods

  • Kuber India Fund bought 6 lakh shares or 2.8 percent equity at Rs 324 each.
  • Promoter Priyanka Thakkar sold 8 lakh shares or 3.8 percent equity at Rs 324.23 each.

Who’s Meeting Whom?

  • General Insurance Corp met Edelweiss Financial Services on Dec. 27.

Top Gainers And Losers

Index Trends

F&O Cues

  • Nifty December futures closed trade at 10500, premium of 9.5 points versus discount of discount of 5 points.
  • Nifty January futures trading at 10,533, premium of 42 points versus premium of 37 points.
  • Across all series: Nifty open interest down 1 percent; Bank Nifty open interest up 0.4 percent.
  • Nifty rollover at 51 percent, Bank Nifty rollover at 44 percent.
  • India VIX ended at 12.4, up 3.6 percent.
  • Max open interest for Dec. series at 10,600 Call (open interest at 54.5 lakh, up 21 percent).
  • Max open interest for Dec. series at 10,000 Put (open interest at 64.4 lakh, down 9 percent).

F&O Ban

  • In ban: Balrampur Chini, DHFL, DLF, GMR Infra, HDIL, IFCI, Jet Airways, Jain Irrigation, JP Associates, Reliance Communications, Reliance Capital, TV18 Broadcast, Wockhardt.
  • New in ban: Reliance Communications, TV18 Broadcast.

Only intraday positions can be taken in stocks which are in F&O ban. In case of a rollover of these intraday positions, there is a penalty.

Put-Call Ratio

  • Nifty PCR unchanged at 1.59.
  • Nifty Bank PCR at 0.94 from 1.17.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Motilal Oswal On Mahindra CIE Automotive

  • Initiated ‘Buy’ rating with target price of Rs 297, implying a potential upside of 19 percent from yesterday’s close.
  • Mahindra CIE Automotive is all primed for a growth phase after three years of consolidation.
  • Mahindra CIE Automotive's India (ex BFL) business is focused on fast-growing/recovering segments.
  • A strong, focused and disciplined parent, CIE has instilled financial discipline.
  • The Bill Forge (BFL) acquisition is an excellent strategic fit for Mahindra CIE Automotive.
  • Estimate consolidated revenue to grow at a compounded rate of about 8 percent by 2019.
  • Expect Ebitda margin expansion of about 260 basis points to around 15.1 percent by 2019.
  • Strong earnings growth, limited capex (5-6 percent of sales) to drive improvement in capital efficiencies.

Motilal Oswal On NTPC

  • Maintained ‘Buy’ rating with a price target of Rs 211, implying a potential upside of 19 percent.
  • Revised norms provide relief from low PLF inefficiencies.
  • Three plants had PLF of less than 75 percent in the financial year-ended March 2014, which increased to five plants in the previous financial year.
  • The revised regulatory norms can compensate earnings by about 2 percent, visible in September quarter results.
  • Swapping/flexible coal linkages also a positive since this leads to reduction in landed cost of coal.
  • Expect earnings to grow at a compounded rate of 14 percent over the financial years through March 2020, driven by strong capitalization.
  • Stock could re-rate as return on equity could get a boost from capitalization outpacing the capex.

Ventura On Hyderabad Industries

  • Maintained ‘Buy’ rating with a price target of Rs 1700, implying a potential upside of 21 percent from yesterday’s close.
  • Fiber cement roofing sheets is a cash cow for Hyderabad Industries.
  • Management to launch new product in fiber cement roof segments by March.
  • Hyderabad Industries is planning a capacity expansion in the pipes & fittings segment.
  • See higher contribution from low costing AAC blocks, boards and panels segment.
  • Expect revenue, operating income and net profit to grow at a compounded rate of 12 percent, 21 percent and 22 percent in three years.

Goldman Sachs On Sun Pharma

  • Maintained ‘Buy’ rating and price target at Rs 600, implying a potential upside of 4 percent from yesterday’s close.
  • NDA filing of OTX-101 for Dry Eye Disease in line with expectation.
  • Expect an NDA approval for OTX-101 over the next 12 months.
  • Expect commercialization of OTX drug to follow in the financial year-ending March 2020.
  • Potential generic entry for Restasis could reduce the overall market potential for the drug.
  • Delayed Halol plant resolution timeline, US price erosion intensity a key risk.
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