All You Need To Know Going In To Trade On January 4
Global equities held near a record high as Asian markets began trading for the first time in 2021.
Benchmark indices rose in Australia but slid in Japan. Most global markets were shut on January 1. Gold climbed along with treasury yields.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.3% to 14,058 as of 6:55 a.m.
Short on time? Well, then listen to this podcast for a quick summary of All You Need To Know before the opening bell.
Let’s take a look at the factors that may influence equities in today’s session:
- Futures on the Dow Jones are trading lower by 50 points, as are futures on the Nasdaq. The S&P 500 futures are fluctuating between gains and losses.
- Chinese stocks will be in focus as the country's oil majors may be next in line for delisting in the U.S. The New York Stock Exchange said last week that it will remove the country's three biggest telecom companies.
- “Stock markets are headed higher and they are headed higher without the old traditional valuation techniques” as long as the Fed “keeps the liquidity bubble going,” David Kotok, Cumberland Advisors chairman and chief investment officer, said on Bloomberg TV.
- Yield on the 10-year treasuries stood at 0.93%.
- West Texas Intermediate crude fell 0.2% to $48.44 per barrel. An OPEC+ alliance will decide on Monday whether it can continue to restore crude supplies without impacting the price recovery.
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Stocks To Watch
- BEML: Government to divest 26% stake in the company along with the management control. SBI Capital Markets has been appointed as the transaction advisor for the strategic divestment process. The process is to be implemented through an open competitive bidding route. The government currently holds 54.03% stake in the company.
- Reliance Industries: SEBI imposes penalties on the company, Chairman Mukesh Ambani and two other entities for alleged manipulative and fraudulent trading in the shares of erstwhile Reliance Petroleum, back in November 2007. Fines of Rs 25 crore and Rs 15 crore have been imposed on Reliance Industries and Mukesh Ambani respectively. Also, Navi Mumbai SEZ Pvt. Ltd. has been asked to pay a penalty of Rs 20 crore.
- Rashtriya Chemicals & Fertilisers: Government plans to sell 10% stake in the company through an Offer For Sale and has invited bids from merchant bankers and legal firms to manage the share sale process. The government currently holds 75% stake in the company.
- Federal Bank: Overall deposits up 12% year-on-year to Rs 1,61,670 crore. Advances up 6% to Rs 1,28,174 crore. CASA up 23% to Rs 55,739 crore while CASA ratio at 34.48% from 31.46% last year. Liquidity Coverage Ratio at 248.26% from 181.3% in Q3FY20.
- CSB Bank: The lender in its December quarter business update stated that total deposits rose 16.5% year-on-year to Rs 17,752.97 crore while gross advances rose 22.64% year-on-year to Rs 13,425.24 crore. Advances against Gold and Gold Jewellery saw a growth of 60.36% year-on-year to Rs 5,633.75 crore.
- Coal India: Production in December up 0.5% year-on-year to 58.3 MT while Offtake declined 2.1% year-on-year to 52.6 MT.
- NMDC: December production up 23% to 3.86 MT from 3.13 MT year-on-year. Sales up 19% to 3.62 MT versus 3.04 MT year-on-year.
- Tata Chemicals: The wholly owned subsidiary of the company, Tata Chemicals (Soda Ash) Partners, has served a notice to withdraw from American Natural Soda Ash Corporation effective December 31, 2022. TCSAP will continue to fulfil all its obligations as a member of ANSAC until the termination date including utilising ANSAC as its exclusive export sales outlet for all of its U.S. produced soda ash sold to all territories serviced by ANSAC.
- I.T. Stocks: U.S. President Donald Trump extends a ban on new green cards and work visas until March 31, citing continued weakness in the U.S. labor market due to the pandemic.
- Tata Steel: The company has transferred the 51% stake it holds in Jamshedpur Continuous Annealing and Processing Company and 50% stake it holds in Tata BlueScope Steel to Tata Steel Downstream Products, a wholly-owned subsidiary. This is in line with the company's strategy to reorganise its India footprint into four clusters, to drive scale, synergies and simplification along with creating value for all stakeholders.
- Dilip Buildcon: Four laning of Byrapura to Challakere section of NH-150 A on a Hybrid Annuity Mode under the Bharatmala Pariyojna has been provisionally completed. The authority has issued the Provisional Completion Certificate and declared the project fit for entry into commercial operations as on December 15, 2020. The company is entitled to receive the bonus of Rs 8.84 crore in lieu of early completion.
- Adani Green Energy: Adani Renewable Energy Holding Eight Ltd. (AREHEightL), a wholly-owned subsidiary of the company received the Letter of Award to set up 600 MW Wind-Solar Hybrid project. AREHEightL participated in a tender issued by the Solar Energy Corporation of India for setting up 1,200 MW ISTS-connected Wind-Solar Hybrid Power Project. The fixed tariff for this project capacity is Rs 2.41/ kWh for a period of 25 years. The project is expected to be commissioned in 18 months from the effective date of PPA.
- Adani Gas: Name of the company now changed to Adani Total Gas Ltd. from January 1, 2021.
- E.I.D.-Parry (India): The Board of Directors have decided that the sugar unit of the company at Pettavaithalai, Tamilnadu, which is not in operation due to continuous non-availability of adequate sugar cane, will not be operated in future as the expectation of a revival of the cane cultivation in the area is low due to a variety of factors.
- PTC India Financial Services: Achieved resolution of one of its NPA loan account in the hydro segment - Dirang Energy Pvt. Ltd. The resolution was achieved under the one-time settlement proposal offered by the promoter company Patel Engineering Ltd. The company has issued the LoA at a consideration of Rs 41.37 crore. This comprises of cash worth Rs 9 crore and issuance of equity shares of Patel Engineering worth Rs 32.37 crore. The documentation process is in the advanced stage. Post the transaction, the stressed loan portfolio is expected to reduce by Rs 74.25 crore with a significant write-back on the provisioning already made.
- Edelweiss Financial Services: The Board of Directors has decided to close the public issue of secured NCDs, of face value of Rs 1,000 each for an amount of up to Rs 100 crore with an option to retain oversubscription up to Rs 100 crore aggregating up to Rs 200 crore, on January 4, 2021.
December Auto Sales
- Tata Motors: Domestic sales rise over 20% in December led by M&HCV and PV sales. Total domestic sales up 21% to 53,430 units from 44,254 units. Total PV sales up 84% to 23,545 units from 12,785 units. Total CV sales decline 4% to 32,869 units from 34,082 units. M&HCV sales up 20% to 8,377 units from 6,957 units. CV Exports up 14% to 2,984 units from 2,613 units.
- Eicher Motors: Total Royal Enfield sales in December up 37% to 68,995 units from 50,416 units. Exports up 82% to 3,503 units from 1,927 units.
- Hero MotoCorp: Total sales in December rise 5.15% to 4,47,335 units from 4,24,845. Sales during the third quarter were the best ever at 18.45 lakh units. Domestic sales up 3.11% to 4,25,033 units from 4,12,009 units. Exports up 73.74% to 22,302 units from 12,836 units. The company expect positive sentiment to continue into the new year.
- TVS Motor: Overall sales up 17.5% year-on-year to 2,72,084 units as compared to 2,31,571 units. Overall two-wheeler sales up 20% to 2,58,239 units from 2,15,619 units. Motorcycle sales up 27% to 1,19,051 units from 93,697 units. Exports up 28% to 94,629 units from 73,512 units. Three-wheeler sales down 13.2% to 13,845 units from 15,952 units.
- VST Tiller Tractors: Power Tiller sales up 62% to 2,290 units from 1,410 units. Tractor sales up 48% to 542 units from 366 units.
Jefferies On Indian Metals & Mining
- Indian metal stocks should deilver strong earnings rebound in FY22
- Higher steel prices should drive strong margin expansion, especially for Tata Steel
- Upgrade FY22-23 EPS for Tata Steel / JSW Steel by 7-9%
- FY22 steel and aluminium price assumptions are still 15% and 5% below spot
- Strong operating cash flows in FY22 should ease balance sheets
- Maintain buy rating on Hindalco with price target of Rs 310
- Maintain buy rating on JSW Steel; price target raised to Rs 450 from Rs 430
- Maintain Hold rating on Coal India; price target raised to Rs 130 from Rs 120
- Maintain buy rating on Tata Steel; price target raised to Rs 850 from Rs 800
Prabhudas Lilladher On Polycab India
- Initiate coverage with buy rating
- Price target of Rs 1,247
- Fast emerging as a B2C player
- Strong potential in FMEG and Retail wires segment
- Well placed to capitalise on uptick in demand for housing construction given wide range of products
- Estimate 13% and 24% CAGR in sales of B2C wires and FMEG over the next five years.
- Steady increase in B2C mix will likely re-rate the stock in the long-term
Emkay On State Bank of India
- Buy rating maintained
- Price target raised to Rs 340 from Rs 265
- Limited retail/SME stress and corporate resolution to limit NPAs/Credit costs
- Well-positioned to ride economic recovery, digital wave and consolidate market share
- Subsidiaries emerge as net capital providers; value accretion/unlocking to continue
- Raise FY21-23E EPS by 3-15% on better growth/asset quality expectations
- Risks: Treasury losses stemming from sharp rise in G-Sec yields, higher NPAs in corporate/SME book and slower growth
Emkay On Mahindra & Mahindra
- Buy rating maintained
- Price target raised to Rs 824 from Rs 783
- Steps taken to improve capital allocation in recent quarters are noteworthy
- Sales cycle recovery should drive revenue/earnings CAGR of 7%/15% over FY20-23E
- Key Risks: Rising competition, failure of new products, increasing losses in subsidiaries and adverse input commodity prices
Pledge Share Details
- Chambal Fertilisers & Chemicals: Promoter Zuari Global revoked pledge of 4 lakh shares on December 30.
- JSW Steel: Promoters Danta Enterprises and Glebe Trading created a pledge of 7 lakh shares on December 29.
As Reported On January 1.
- Antony Waste Handling Cell: Elixir Wealth Management bought 4.56 lakh shares at Rs 435.11 per share and sold 4.31 lakh shares at Rs 436.43 per share. Edelweiss Finvest sold 2.51 lakh shares at Rs 439.7 per share. SMC Real Estate Advisors bought 3.74 lakh shares at Rs 458.52 per share and sold 3.66 lakh shares at Rs 455.38 per share.
- Ex Date EGM: Anisha Impex
- Move In To Short-term ASM Framework: IFGL Refractories
- Move Out Of Short-term ASM Framework: Patel Engineering, Puravankara.
- Move In To ASM Framework: Arshiya, Tanla Platforms.
- Move Out Of ASM Framework: Yaarii Digital Integrated Services, IFB Industries, Globus Spirits.
- West Coast Paper: Promoters Veer Enterprises and Shree Satyanarayan Investments acquired 38,000 shares between December 30-31.
- Confidence Petroleum India: Promoters Confidence LPG Bottling and Essenn LPG Bottling acquired 5.25 lakh shares between December 28-31.
- V-Mart Retail: Promoter Smiti Agarwal sold 10,700 shares on December 31.
- Astra Microwave Products: Promoter C Prameelamma sold 70,000 shares on December 31.
- Satia Industries: Promoter Chirag Satia acquired 32,500 shares on December 31.
- Vardhman Textiles: Promoter Vardhman Holdings acquired 38,000 shares on December 31.
- Ganesha Ecosphere: Promoters acquired 15,250 shares between December 2-31.
- Bhageria Industries: Promoter Rakesh Bhageria acquired 5,318 shares on December 31.
As Reported On January 1.
- Nifty January futures end at 14,050; premium of 32 points
- Nifty January futures add 5.1% and 6.1 lakh shares in Open Interest
- Nifty Bank January futures end at 31,285; premium of 60 points
- Nifty Bank January futures add 4.4% and 62,775 shares in Open Interest
- Nifty Put-Call Ratio at 1.53
- No stocks in the F&O Ban
Nifty: January 7 Expiry
- Maximum Open Interest on Call side at 14,000 strike (27.8 lakh shares)
- Maximum Open Interest on Put side at 14,000 strike (25.2 lakh shares)
- Active Options: 14,300 Call (+13.1 lakh shares) and 14,000 Put (+12.1 lakh shares)
Nifty: January 28 Expiry
- Maximum Open Interest on Call side at 14,000 strike (21 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (27 lakh shares)