All You Need To Know Going Into Trade On Dec. 03

Risk appetite returned to markets on Monday, as U.S. equity futures climbed alongside Asian stocks, the Australian dollar and the Chinese yuan, after a truce between Washington and Beijing emerged from the Group-of-20 summit.

S&P 500 Index futures jumped over 1.5 percent, while the Aussie and the currencies of South Africa, Turkey and Mexico all rose. Shares from Sydney to Seoul gained. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.4 percent to 11,000.50 as of 6:50 a.m.

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BQ Live

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

U.S. Market Check

• U.S. stocks gained as investors turned positive on the outlook for trade ahead of a meeting between the American and Chinese presidents.
• The yield on 10-year Treasuries climbed four basis points to 3.03 percent.

Asian Cues

• Futures on the S&P 500 gained 1.7 percent.
• Japan’s Topix index advanced 1.1 percent.
• Australia’s S&P/ASX 200 Index rose 1.4 percent.
• South Korea’s Kospi climbed 1.5 percent.

Commodity Cues

• West Texas Intermediate crude climbed 2.7 percent to $52.28 a barrel.
• Brent crude jumped 4.12 percent higher on Friday, the most in over two years, to $61.30 per barrel.

London Metal Exchange

• Aluminium ended higher for the third day, up 0.9 percent.
• Copper ended a two-day rally, down 0.23 percent.
• Zinc ended higher for the third day, up 2.9 percent.
• Nickel ended higher for the third day, up 1.3 percent.
• Lead ended higher for the third day, up 2.1 percent.
• Tin ended 0.67 percent lower.

Key Events To Watch This Week

• Ford, Fiat Chrysler, other automakers report November U.S. sales on Monday.
• Fed Chairman Jerome Powell is scheduled to testify on the economic outlook before Congress’s Joint Economic Committee on Wednesday.
• U.S. financial markets will close Wednesday for a national day of mourning to honor former President George H.W. Bush.
• China November trade data is due on Saturday.

Indian ADRs

Stocks To Watch

• Biocon’s jointly developed product “Fulphila” with Mylan has been granted marketing authorisation from the European Commission.
• Monte Carlo Fashion’s board approved buy back of 4.6 percent of equity paid-up share capital at Rs 550 per share, aggregating to Rs 55 crore.
• Indian Oil Corporation to reduce Delhi’s non-subsidized LPG price by Rs 133 per bottle from Dec. 01, according to a Bloomberg report.
• SAIL’s Durgapur alloy plant is showing improved performance and the unit is geared up to make profit next year said Steel Minister, Birender Singh. He also added that Durgapur Steel plant is in the process of scaling up crude output from 1.8 million tons now to 2.2 million tons next year and losses at Salem Mill have been reduced this year and may drop by around 20 percent, Bloomberg reported.
• TV Today Network’s Chief Executive Officer Vivek Khanna resigned from his post.
• Aviation stocks in focus as ATF prices for October cut by 11 percent pan India due to lower crude prices and stronger rupee.
• The Uttar Pradesh government state advised prices (SAP) for sugarcane at Rs 315 a quintal.
• Sandhar Technologies signed JV pact with South Korea's Kwangsung to make plastic-mould parts for cars, trucks.

Media Reports

• SEBI to reopen insider trading case against Sun Pharma (PTI).
• NMDC cuts iron order prices by upto 8 percent in December (Mint).
• Sale process of NIIT Tech gathered momentum; Many global local players like Tech Mahindra have been approached (Economic Times).
• Tata Sons rejected acquisition proposal of Prabhat Dairy for Rs 400 crore by Tata Global Beverages (Economic Times).

Offering

• Reliance Mutual Fund managed DPSE ETF FPO raises Rs 27,300 crore against the government’s proposal to raise Rs 8,000 crore from the offering.
• The government will accept Rs 17,000 crore of bids following the over-subscription.

Data To Watch

• Automobile manufacturers will continue reporting their monthly sales data for November.
• 10:30 a.m. Nikkei India Manufacturing PMI for November, prior 53.1.

Data Reaction To Watch

• GDP growth drops to 7.1 percent in the second quarter.
• Fiscal deficit reaches 103.9 percent of full year target in October.

November Auto Sales (YoY)

• Maruti Suzuki down 0.7 percent at 1.53 lakh units.
• M&M up 17 percent 45,101 units.
• Escorts up 56 percent at 8,005 units.
• Tata Motors down 4 percent at 50,470 units.
• Hero MotoCorp up 0.8 percent to 6.1 lakh units.

Catch all the live updates of November auto sales here.

Bulk Deals

• Bharat Heavy Electricals: Integrated Core Strategies (Asia) acquired 3.01 crore shares 0.82 percent equity at Rs 68.57 each.
• CARE Ratings: Copthall Mauritius Investment acquired 1.52 lakh shares or 0.52 percent equity at Rs 957.2 each.
• Divi’s Laboratories: Integrated Core Strategies (Asia) sold 18.86 lakh shares or 0.71 percent equity at Rs 1,438.98 each.
• Repco Home Finance: Pabrai Investment Fund sold 6.84 lakh shares or 1.09 percent equity at Rs 338.17 each.

ICICI Lombard General Insurance

• Red Bloom Investment sold 1.3 crore shares or 2.92 percent equity at Rs 800 each.
• RWC Global Emerging Equity Fund acquired 21.9 lakh shares or 0.48 percent equity at Rs 800 each.
• Fidelity Funds Asia Pacific Dividend Fund acquired 19.2 lakh shares or 0.42 percent equity at Rs 800 each.
• DSP MF acquired 15 lakh shares or 0.33 percent equity at Rs 800 each.

Ramkrishna Forgings

• Abakkus Growth Fund acquired 5 lakh shares or 1.53 percent equity at Rs 515 each.
• Old Bridge Capital Management acquired 8 lakh shares or 2.46 percent equity at Rs 515 each.
• Vantage Equity Fund acquired 2.8 lakh shares or 0.86 percent at Rs 516.67 each.
• Amansa Holdings sold 19 lakh shares or 5.24 percent equity at Rs 515.24 each.

Who’s Meeting Whom

• Shriram Transport Finance to meet Matthews Asia, Oppenheimer Fuds and other investors from Dec. 03-17.
• TCS to meet Blackrock, Axis AMC and Capital World Investors from Dec. 05-21.
• Cipla to meet Birla Sun Life Insurance and Stewart Investors from Dec. 03-4.
• Tata Chemicals to meet HDFC MF, Ambit Securities and Aditya Birla Sun Life Insurance from Dec. 03-06.
• Tata Motors to meet Moon Capital, Franklin Capital and other investors from Dec. 03-04.

Insider Trading

• Arvind promoter Aura Business Ventures LLP acquired 1.67 lakh shares from Nov. 28-29.
• Alembic promoter group Nirayu acquired 2.05 lakh shares from Nov. 28-29.
• Astra Microwave Products promoter sold 1 lakh shares on Nov. 28.
• Mahindra Logistics promoter group Partners Enterprise sold 16.22 lakh shares on Nov. 29.

(As reported on Nov. 30)

Trading Tweaks

• Oil India record date for share buyback.
• Rain Industries price band revised to 5 percent.

Money Market Update

• Rupee ended at 69.58/$ on Friday versus 69.84/$ on Thursday. The home currency clocked its biggest monthly gain in almost seven years.

F&O Cues

• Nifty December Futures closed trading at 10900, premium of 23 points.
• Max OI for December series at 11,000 Call, OI at 25.4 lakh shares.
• Max OI for December series at 10,000 Put, OI at 37.8 lakh shares.

Put-Call Ratio

• Nifty PCR at 1.7 from 1.75
• Nifty Bank PCR at 1.17 from 1.33

Fund Flows

Brokerage Radar

Nomura on Indian Tyre

• Believe industry fundamentals are in better shape now with healthy demand and high utilisation.
• Play on healthy growth outlook, pricing discipline, benign commodity prices to support margins.
• Despite capacity expansion, a strong demand scenario to keep utilisation healthy.
• Apollo Tyres: Initiated ‘Buy’ with a price target of Rs 288.
• CEAT: Initiated ‘Neutral’ with a price target of Rs 1,346.
• Balkrishna Industries: Initiated ‘Neutral’ with a price target of Rs 1,008.

IDFC Securities on Shankara Building

• Downgraded to ‘Underperform’ from ‘Neutral’; cut price target to Rs 525 from Rs 1,065.
• Competitive intensity is high and value proposition needs to be further improved.
• Revenue growth benefit lower compared to cost involved in terms of margin trade off.
• Cut price target and Downgrade given weak potential benefit of change in strategy and visibility in terms of execution.

CLSA on Motherson Sumi

• Maintained ‘Outperform’; cut price target to Rs 180 from Rs 223.
• Indian business in soft patch, but remain positive on outlook.
• Weak European auto demand hurting, but new plant ramp-up to offer a cushion.
• Cut FY19-21 EPS estimates by 7-14%; see further downside to consensus estimates.

UBS on Sun Pharma

• Maintained ‘Buy’ with a price target of Rs 690.
• Whistle-blower allegations are valuation dampener at the minimum.
• Negatively impacts Mgmt.’s bandwidth at a time when key brands are getting launched.
• Expect stock to react negatively to the whistle-blower allegations.

Nomura on Glenmark Pharma

• Maintained ‘Buy’; hiked price target to Rs 850 from Rs 825.
• Remain constructive due to strong domestic growth and progress in clinical development.
• Hike 2018-19 EPS estimates by 22 percent to factor in forex and inlicensing income in the first half.
• Catalysts: out-licensing deals, key ANDA approvals and strong India growth.

Motilal Oswal on Indian Auto

• November sales of Commercial vehicles & Two-wheelers in line; passenger vehicles above estimate.
• Liquidity crunch, non-easy availability of finance impacting retail.
• New product launch drives sales in passenger vehicles.
• Prefer passenger vehicles and commercial vehicles over two wheelers due to stronger volume growth and stable competitive environment.

Nomura on Indian IT

• Lack of client financial improvement and weaker Europe could temper acceleration hopes.
• Macro demand indicators do not suggest a material rebound.
• Structural factors to outweigh cyclical improvement.
• Despite a recent correction, valuations at premium.