All You Need To Know Going Into Trade On Dec. 11
A person pours a cup of coffee. (Photographer: Kiyoshi Ota/Bloomberg)

All You Need To Know Going Into Trade On Dec. 11

Asian stocks were off to another muted open as investors debated whether China and the Trump administration will reach a meaningful trade deal ahead of the looming tariff deadline.

Japanese equities opened flat. They were modestly higher in Australia and South Korea. S&P 500 futures were little changed. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 11,917 as of 6:50 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.

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

  • U.S. stocks fell for a second day as investors pulled back ahead of the Federal Reserve rate decision, U.K. election and Sunday’s tariff deadline.
  • The pound fell in early Asia trading Wednesday as an update to an election poll which successfully predicted the 2017 election suggested U.K. Prime Minister Boris Johnson’s Conservative party is on track to win a smaller majority than previously projected.
  • Oil eased gains after a surprise build in U.S. crude stockpiles contrasted with analyst expectations for a draw.

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Indian ADRs

All You Need To Know Going Into Trade On Dec. 11

Stocks To Watch

  • Yes Bank’s board said that it’s willing to favourably consider the $500 million offer from Citax Holdings and Citax Investment Group. The board will decide on the final allocation of equity stake at its next meeting.
  • ADNOC and Reliance Industries signed an agreement to explore the development of ethylene dichloride facility in Ruwais. ADNOC would supply ethylene to the potential joint venture and provide access to world-class infrastructure at Ruwais, while Reliance will deliver operational expertise and entry to the large and growing Indian vinyls market, in which it is a key participant.
  • Bharti Airtel to seek shareholder’s nod for raising capital via QIP, FCCBS and NCDs on Jan. 3. On Dec. 4, the company had planned to raise $3 billion or Rs 21,500 crore via debt and equity shares or convertible instruments.  The equity issuance can lead to a dilution of 6 percent .
  • IDBI Bank: Board gave in-principle approval to sell Bank’s stake in its arm IDBI Capital Market Securities and IDBI Intech to the extent of 49 percent to prospective investors and retaining controlling stake.
  • Bharti Infratel declared dividend of Rs 2.75 per share. Record date set as Dec. 20.
  • Piramal Enterprises: Competition Commission of India approved subscription of CCDs of the company by CDPQ. Upon conversion, equity shareholding of CPDQ in Piramal Enterprises will increased from 3.68 percent to 8.99 percent, according to Bloomberg report.
  • Future Supply Chain Solutions: CCI approved acquisition by Nippon Express for about 22 percent stake in the company.
  • Jet Airways’ Creditors agreed to extend the deadline for submission of a resolution plan. The deadline for submission of a resolution plan for the carrier may be extended beyond Dec. 16, according to Bloomberg report.
  • KDDL’s arm Ethos launched two new stores in Jaipur.
  • CG Power and Industrial Solutions: SFIO Investigation has been initiated. The company is committed to co-operate with SFIO to enable them to complete its investigation in a time bound manner.

Offering

  • L&T Infrastructure Finance plans up to Rs 5,000 crore public bond sale.

Brokerage Radar

Emkay on GAIL

  • Maintained ‘Buy’ with a price target of Rs 160
  • AGR hit concerns may have gripped stock performance
  • Believe the AGR demand is not tenable
  • Core business outlook mixed but downsides unlikely; valuations attractive

Haitong on HDFC AMC

  • Initiated ‘Buy’ with a price target of Rs 3,435.
  • Well positioned to capture positive changes taking place in Indian AMC industry.
  • High RoE business and expect to improve further; expect dividend payout ratio of 80 percent over FY20-22.
  • HDFC AMC was able to weather out regulatory challenges successfully.

Nomura on Yes Bank

  • Maintained ‘Neutral’ with a price target of Rs 63.
  • Board outcome on bids negative as $1.2 billion bid unlikely to go through.
  • Unavailability of capital, raises questions on going concern status.
  • Likely to be few merger options available (ex-SBI) if company fails to raise capital.

Trading Tweaks

  • Piramal Phytocare ex-date for amalgamation.
  • Uttam Value Steels to move out of ASM Framework.
  • TCI Finance to move into short term ASM Framework.
  • Sanwaria Consumer to move out of short term ASM Framework .
  • Accel, TCI Finance, Karda Constructions, KIC Metaliks price band revised to 10 percent.
  • HCL Infosystems, Pokarna price band revised to 5 percent.
  • Best Agrolife to move into ASM Framework.

Insider Trading

  • Harrisons Malayalam promoter Rainbow Investments acquired 58,000 shares on Dec. 9.

Money Market Update

Traders in India’s bond market will be assessing a report that said the government may widen the budget deficit to between 3.5-3.8 percent of the gross domestic product in the current fiscal year.

A final decision will be taken by Finance Minister Nirmala Sitharaman and her budget team after the advance tax numbers are available mid-December, the Business Standard reported, citing senior government officials it didn’t name. The target for fiscal year to March is 3.3 percent of the GDP.

The yield on benchmark 10-year bonds rose four basis points on Tuesday to 6.71 percent and it has climbed 20 basis points last week which is the most since April 2018, after the central bank unexpectedly left interest rates unchanged.

In the currency market, the rupee may start firmer. The dollar lost ground on Tuesday to end at 70.9250 and is likely to start trading around 70.88 per dollar with traders keeping an eye on recent foreign fund outflows from bonds and stock markets.

F&O Cues

Index Futures

  • Nifty December futures closed at 11898.2, premium of 41.4 points versus 29.2 points.
  • Nifty December futures series open interest up 1 percent, adds 87,000 shares in open interest.
  • Nifty Bank December futures closed at 31,226.5, premium of 66.2 points versus 81 points .
  • Nifty Bank December futures series open interest up 6 percent, adds 78,000 shares in open interest.

Options

  • Nifty PCR at 1.17 versus 1.32 (across all series)

Nifty Weekly Expiry: Dec. 12

  • Max open interest on call side at 12,000 (29.6 lakh shares).
  • Max open interest on put side at 11,900 (16.3 lakh).
  • open interest addition seen in 11,900C (+10.5 lakh shares), 11,950C (+6 lakh shares), 11,850C (+5.2 lakh shares).

Nifty Monthly Expiry: Dec. 26

  • Max open interest on call side at 12,000 (27 lakh shares).
  • Max open interest on put side at 11.500 (32.3 lakh shares).
All You Need To Know Going Into Trade On Dec. 11
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