All You Need To Know Going Into Trade On Dec. 12

Asian stocks were mixed Thursday after the Federal Reserve signaled U.S. interest rates will remain unchanged throughout 2020 amid a solid economy.

Stocks were little changed in Tokyo, climbed in Seoul and slipped in Sydney. S&P 500 futures nudged higher. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, gained 0.32 percent to 11,987 as of 06:33 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 halted a two-day slide as the central bank’s decision to keep rates unchanged fueled bets that the bar for an increase in rates remains high as economic growth is steady without stoking inflation. The 10-year Treasury yield fell below 1.8 percent.
• Focus now turns to trade ahead of a Sunday deadline for the imposition of U.S. tariffs on Chinese good.
• West Texas Intermediate crude rose 0.3% to $58.91 a barrel.
• Gold traded little changed at $1,475.47 an ounce after jumping 0.7 percent.

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Data To Watch:

• 5:30pm: India Nov. Consumer Price Inflation y/y; est. 5.3 percent (prior 4.62 percent)
• 5:30pm: India Oct. Industrial Production y/y; est. -5.0 percent (prior -4.3 percent)
• Between 12 and 15 Dec.: India Nov. trade balance, est. -$12.3 billion, prior $11.0 billion deficit

--India Nov. Exports YoY, no est., prior -1.1 percent
--India Nov. Imports YoY, no est., prior -16.3 percent

Stocks To Watch

• Bharti Airtel said reports of merging DTH operations with Dish TV are speculative in nature.
• GMR Infra: GMR Airports to consider raising Rs 250 crore via bonds. (Bloomberg)
• Prakash Industries declared successful bidder for Bhaskarpara Coal Mine. Sees coal availability substantially raising margins.
• Cadila Healthcare launched oral anti-diabetic tablet Vinglyn.
• Yes Bank said deferring investor decision not a time-buying tactic. It plans to club other offers from investors before reaching a financial decision. (Bloomberg)
• RSWM: Board approved rights issue up to Rs 150 crore.
• Magma Fincorp: Board approved allotment of non-convertible debentures worth Rs 350 crore to Nederlandse Financierings on a private placement basis.
• Vodafone Idea clarified on the news of the company selling some assets to Brookfield, Edelweiss. The company has denied such negotiations taking place between the aforementioned parties.
• Prestige Estates Projects will consider raising funds on Dec. 14.
• Maruti Suzuki tied up Federal Bank for dealer and retail car financing.
• Phoenix Mills: Atul Ruia will retire from managing director’s as per SEBI guidelines. He will continue to be the chairman and the non-executive director. Joint Managing Director Shishir Shrivastava takes over as managing director with effect from Dec. 11.
• South Indian Bank said that Kerala Infra Fund Management holds 7.83 percent stake in the bank post share allotment.
• Mcleod Russel: Yes Bank has clarified that the bank had filed an application against McLeod Russel, before Kolkata National Company Law Tribunal, as per the insolvency proceedings.

New Listing

• Ujjivan Small Finance Bank’s shares to start trading on BSE/NSE after IPO which gets 166 times demand at Rs 37 each

Brokerage Radar

On HDFC Life

Kotak Securities

• Retains ‘Add’ rating, estimates fair value at Rs 605 per share.
• Invested in developing technology to diversify growth engine.
• Increases operational efficiencies and customer satisfaction.
• Company is dominant in digital ecosystems.

Motilal Oswal Securities

• Remains ‘Neutral’; target unchanged at Rs 600 per share.
• Operating metrics stay robust.
• The company’s channel diversification to help sustain growth.
• It’s using technology to simplify customer’s from on-boarding to settlement.
• This is helping attract more channel partners.

Emkay

• Maintains ‘Hold’, target price Rs 580 per share.
• Forty out of the 270 distribution partners operate in new age ecosystems.
• The firm scores over peers in product innovation.
• Interest rate risk is the key risk with scale up in guaranteed products.

Morgan Stanley

• Maintain ‘Equal-Weight’ with target price of Rs 580.
• Executed sharp turnaround from a "traditional distributor and product play" model to a more evolved player.
• Believe HDFC Life is one of the best plays on India's insurance story.
• Key strengths: a balanced product mix, strong operating metrics and ongoing product innovation

On L&T Infotech

Morgan Stanley

• Maintain ‘Overweight’ with target price of Rs 1,860.
• Confident on the demand outlook for second half of the year.
• Focus on winning large deals and opening new logos to drive growth.
• Challenges in the BFSI vertical has bottomed.

Motilal Oswal

• Maintain ‘Buy’ with target price of Rs 2,030.
• Continuity in strategy with a few areas of further focus.
• Deal pipeline strong and encouraging.
• Key concerns for the stock largely behind and expect a re-rating.

Motilal Oswal On Strides Pharma

• Maintain Buy with target price of Rs 440.
• U.S. generics business on robust growth path.
• New launches, increased penetration to drive business in other regulated markets.
• Expect earnings to increase five times over FY19-21, partly led by a low base of FY19.

Pledge Share Details

• JSW Steel promoter Sahyog Holdings released pledge 3.3 crore shares from Dec. 5-9.
• JSW Energy promoters released pledge of 4.6 crore shares from Dec. 5-9.
• Kalaptaru Power Transmission promoter Kalpataru Constructions released pledge of 13,000 shares on Dec. 9.
• Future Consumer promoter Future Capital Investment created pledge of 85 lakh shares on Dec. 9.

Trading Tweaks

• Piramal Phytocare record date for amalgamation.
• Renaissance Global, Karda Constructions, Optiemus Infracom to move into short-term ASM Framework.
• GTL Infrastructure to move out of short term ASM Framework.
• Aditya Birla Capital price band revised to 20 percent.
• Simplex Infrastructures price band revised to 5 percent.

Who’s Meeting Whom

• Tata Steel to meet UBS Securities and Millennium Capital Management on Dec. 18.
• CG Consumer Electricals to meet Manulife Investment and Ashmore on Dec. 12.
• Shriram City Union Finance to meet Batlivala & Karani Securities on Dec. 13.
• IRCTC to meet Fidelity Group on Dec. 12.
• Mahindra Holidays & Resorts to meet Sundaram MF, Unifi Capital and other investors between Dec. 13-16.

Insider Trading

• J Kumar Infraprojects promoter Kusum Gupta acquired 1 lakh shares between Dec. 9-11.

Money Market Update

Sovereign Indian bonds may extend losses ahead of a report that’s likely to show inflation accelerated last month. Consumer price index probably rose 5.30 percent in November from a year earlier, after rising 4.62 percent in October, according to a Bloomberg survey ahead of data due later in the evening.

This would be the highest inflation print since July 2016 and is likely to back the central bank’s decision to keep interest rates unchanged last week. Yields on the benchmark 10-year bonds surged 6 basis points on Wednesday to 6.77 percent after S&P warned of a downgrade with yields climbing 30 basis points since Dec. 4, a day before the central bank unexpectedly left rates unchanged.

In the currency market, the rupee is likely to open stronger, with implied forward suggesting it may start trading at 70.71 per dollar, having risen nearly 0.1 percent on Wednesday to end at 70.84. A drop in crude oil prices as well as foreign fund inflows could help sentiment, traders said.

F&O Cues

Index Futures

• Nifty December futures closed at 11938, premium of 28 points versus 41.4 points.
• Nifty December futures series open interest up 1 percent, adds 1.4 lakh shares in open interest.
• Nifty Bank December futures closed at 31,314, premium of 57.5 points versus 66.2 points.
• Nifty Bank December futures series open interest down 7 percent, sheds 1 lakh shares in open interest.

Options

• Nifty PCR at 1.20 versus 1.17 (across all series).

Nifty Weekly Expiry: Dec 12

• Max open interest on call side at 12,000 (26 lakh shares).
• Max open interest on put side at 11,900 (21.6 lakh).
• Open interest addition seen in 11,850P (+5.6 lakh shares), 11,900P (+5.2 lakh shares), 12,200C (+1.8 lakh shares).

Nifty Monthly Expiry: Dec 26

• Max open interest on call side at 12,000 (26.2 lakh shares).
• Max open interest on put side at 11.500 (33.3 lakh shares).