All You Need To Know Going Into Trade On Dec. 13

Asian equities ticked higher alongside U.S. equity futures Thursday after a series of positive developments in U.S.-China trade talks buoyed global stocks.

Benchmarks were higher in Japan, Australia and South Korea, and futures on the S&P 500 rose as news broke that Chinese importers have bought U.S. soybeans. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.41 percent to 10,832 as of 7:25 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 advanced as the outlook for trade took a positive turn and the British prime minister defeated a challenge to her leadership.
• The yield on 10-year Treasuries held at 2.91 percent after gaining three basis points.

Europe Market Check

European equities rallied on optimism over easing tensions between China and the U.S., and between Italy and the European Union.

Asian Cues

• Japan’s Topix index rose 0.4 percent.
• Australia’s S&P/ASX 200 Index was little changed.
• South Korea’s Kospi index added 0.3 percent.
• FTSE China A50 Index futures gained 0.4 percent.
• Hang Seng Index futures were up 0.9 percent.
• Futures on the S&P 500 gained 0.1 percent.

Commodity Cues

• West Texas Intermediate crude added 0.3 percent to $51.32 a barrel.
• Brent crude traded a little changed at 60.23 per barrel.
• Gold was steady at $1,245.72 an ounce.

London Metal Exchange

• Aluminium ended a little changed at $1,939 per MT.
• Copper ended 0.45 percent lower.
• Nickel halted a two-day decline, up 0.23 percent.
• Zinc resumed declines, ends 0.77 percent lower.
• Lead ended higher for the second day, up 0.08 percent.
• Tin ended higher for the second day, up 1.05 percent.

Indian ADRs

Stocks To Watch

• Lupin announced that European Union’s General Court upheld European Commission’s decision in Perindopril litigation. The pharma company is liable to pay fine of 40 million euros. The company stated that it will study the General Court’s judgement and will evaluate further course of action.
• Sun Pharma’s Taro received tentative ANDA approval for Dapsone by the U.S. FDA.
• Bandhan Bank: RBI allowed the bank to open 40 new branches. The bank was earlier debarred from opening new branches by the central bank of India. An email statement from the company stated that it has opened five branches and will open additional 35 branches will be opening by end of this month.
• Pricol signed a joint venture agreement with Israel-based mobile resource management company ‘Pointer Telocation’ to provide digital telematic solutions to both OEM and after-market segment players in India and other countries in South East Asia.
• Strides Pharma Sciences’ Singapore arm received U.S. FDA approval for Lidocaine Ointment, which is used to numb the skin. This drug will be immediately launched by the company in the U.S.
• Sadbhav Engineering received appointed date from NHAI for EPC project worth Rs 981 crores in Uttar Pradesh.
• Soril Infra Resources said that the company has initiated the process to foray into financial services business with primary focus in rural India. The company has started the necessary process of acquiring an existing NBFC.
• United Bank of India increased interest rates on domestic term deposits for less than Rs 1 crore by 25 basis points across various tenors. one-year term-deposit rate at 6.5 percent.
• DLF’s board approved QIP of 17.3 crore equity shares. The company’s Saurabh Chawla, Group CFO resigned, while Ashok Tyagi (who was the CFO till December 2017) will be the new group CFO.
• Punjab & Sind Bank to raise equity via QIP upto Rs 500 crore and issue bonds worth Rs 1,500 crore in next 12 months. To issue five crore equity shares to employees.
• Infibeam Avenues’ board meet to consider strategic growth opportunities rescheduled to December 17.
• Yes Bank’s board meets today to shortlist names for new chairman for RBI’s approval and also consider the appointment of independent directors.
• Indian Oil’s board meet today to consider and approve buyback of equity shares and interim dividend.

Data Watch

• India November trade balance, Bloomberg Estimates at -$15.1 billion, prior -$17.1 billion.
• India November Exports YoY, prior 17.9 percent.
• India November Imports YoY, prior 17.6 percent.

Who’s Meeting Whom

• Mahindra Logistics to meet Ashmore Capital on Dec. 24.
• Mahindra Holiday’s and Resorts to meet HDFC AMC and Edelweiss Securities on Dec. 14.
• PSP Projects to meet Bellwether Capital and other investors from Dec. 13-17.
• Eicher Motors to meet India Nivesh, Sundaram MF and other investors from Dec. 13-14.

Insider Trading

• Greaves Cotton promoter group Karun Carpets acquired 1lakh shares on Dec. 10.
• Filatex India promoter group Fargo Estates acquired 2lakh shares from Dec. 10-11.
• Confidence Petroleum India promoter acquired 42k shares on Dec. 10.
• Jindal Stainless promoter and director Abhuday Jindal acquired 43,000 shares from Dec. 10-11.
• Skipper promoter group Skipper Polypipes acquired 80,000 shares from Dec. 10-11.

Trading Tweaks

• Oriental Aromatics ex-date for bonus issue 1:1 and stock split from Rs 10 to Rs 5
• Tata Steel Bsl price band revised to 10 percent

Money Market Update

• The Indian rupee ended at 72.02/$ on Wednesday from 71.86/$ on Tuesday.

F&O Cues

• Nifty December Futures closed trading at 10784, premium of 46 points.
• Max open interest for December series at 11,000 Call (open interest at 43.5 lakh shares).
• Max open interest for December series at 10,000 Put (open interest at 42.9 lakh shares).

Stocks In F&O Ban

• Adani Enterprises
• Adani Power

Put-Call Ratio

• Nifty PCR at 1.47 from 1.33
• Nifty Bank PCR at 1.44 from 1.14

Brokerage Radar

HSBC on Gujarat State Petronet

• Initiated ‘Reduce’ with a price target of Rs 152.
• Despite positive tariff revision, see earnings decline in the next financial year.
• Decline in volumes and lower capacity utilisation to impact top-line.
• Stock expensive at current multiples as a decline in earnings expected.

Morgan Stanley on InterGlobe Aviation

• Upgraded to ‘Overweight’ from ‘Equalweight’; hiked price target to Rs 1,311 from Rs 790.
• Competitive position has strengthened in recent downcycle.
• Signs of receding cost headwinds with rising yields.
• Attractive valuations; risk reward favourable.

Morgan Stanley on SBI

• Maintained ‘Overweight’; hiked price target to Rs 375 from Rs 350
• Bad loans caused large losses in the previous financial year and the first half of the current financial year; expect this to turn around from the next financial year.
• Provisions to drop quickly from the second half of the current financial year and core earnings to pick up
• Expect profit of more than Rs 30,000 crore and Rs 37,000 crore in the nest two financial years respectively.

Macquarie on Ujjivan Financial

• Maintained ‘Outperform’; cut price target to Rs 290 from Rs 460.
• RBI rules an overhang, but opportunity for long-term investors.
• Improving business fundamentals are being overlooked.
• Cut EPS estimates to factor in higher cost of funds.
• Think there is a case for stock to double in next three years.

CLSA on NTPC

• Maintained ‘Buy’; cut price target to Rs 180 from Rs 190.
• Stock has fallen on CPSE ETF-related share supply and OFS speculation.
• Speculated acquisition of SJVN would be value accretive from day one.
• Start of plant shutdown to help return on equity recovery in the second half of the current financial year.

Morgan Stanley on ACC and Ambuja

• Announces next round of expansion.
• Capacity expansion is a medium-term positive.
• Near-term volume growth constrained as utilisations at over 80 percent.

Jefferies on Dabur

• Maintained ‘Buy’ with a price target of Rs 460.
• Market share gain continues amidst steady demand.
• Management reiterated steady demand scenario and improving execution.
• Investments to impact the current financial year’s margins but should uptick in the next financial year aided by benign raw material cost.