All You Need To Know Going Into Trade On Dec. 17

Asian stocks saw modest gains Tuesday after new highs on Wall Street, amid investor optimism over easing U.S.-China trade tensions.

Stocks edged higher in Tokyo and Seoul, and were flat in Australia after outperforming in Asia Monday. S&P 500 futures slipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.26 percent to 12,101 as of 7:05 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. equities climbed to a new high Monday amid hopes that a partial trade deal between America and China will ease a key risk for investors heading into year-end.
• Oil edged higher to settle at a three-month high on optimism that a partial trade deal between the world’s two largest economies will spur demand for fuel to power trucks, trains, airplanes and cars.
• The pound slumped following reports U.K. Prime Minister Boris Johnson plans to change the law to guarantee the Brexit phase isn’t extended beyond the end of next year, increasing the threat of a no-deal divorce.

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Indian ADRs

Stocks To Watch

• Cipla acquired the brand name and trademark rights of Vysov (anti-diabetic drug) for the Indian market.
• NIIT Technologies: Board will consider proposal for share-buyback on Dec. 23.
• Reliance Industries and British energy giant BP Plc. on Monday signed a partnership agreement to jointly grow the Indian firm's network of petrol pumps to 5,500 from current 1,400, according to its statement. The venture is expected to be formed during the first half of 2020, subject to regulatory and other customary approvals.
• Shriram Transport Finance: S&P Finance revised company’s outlook to ‘Negative’ from ‘Stable’. The rating agency has affirmed 'BB+' long-term and 'B' short-term issuer credit ratings on the company. The revision in the outlook is due to the increased risk of a deterioration in the company’s asset quality, which could also affect availability of credit to the company over the next 12 months or so.
• Magma Fincorp: ICRA revised company’s outlook from ‘Negative’ to ‘Stable’ for term loans and non-convertible debentures worth Rs 2,391.67 crore. The ratings for these instruments have been reaffirmed at ‘AA-’. The revision in the outlook on the Group’s rating factors in the deterioration in the asset quality indicators following the reduced collection efficiencies in certain geographies and loan segments of commercial vehicles and construction equipment.
• IRB Infra: Board approved allotment of NCDs amounting to Rs 1,400 crore on a private placement. About 50 percent of this issue has been subscribed by GIC affiliate and the balance by company’s arm.
• Raymond promoter JK Investo Trade increased the stake from 4.57 percent to 9.49 percent in the company via preferential allotment on Dec. 12.
• Elgi Equipments has acquired 100 percent stake in Michigan Air Solutions for Rs 42 crore. The target company is the distributor and specialist in air compressor sales, maintenance and services.
• Vikas Proppant & Granite has commenced production on Dec. 14 for making 3 containers (60 tonne) ordinary shipment to Algeria.
• Texmaco Rail & Engineering: Operational creditor Veekay General has filed an application under insolvency proceedings for an alleged operational debt of Rs 63 lakh, which has been admitted by National Company Law Tribunal Kolkata. Company has filed its appeal against the order before National Company Law Appellate Tribunal.
• Mcleod Russel: Financial creditor Techno Electric & Engineering filed an application under insolvency proceeding before NCLT Kolkata for recovery of term loan of Rs 100 crore. Them matter has been adjourned for hearing on Jan. 28.
• Whirlpool: Sunil D’Souza to resign as the managing director with effect from April 3, 2020. Vishal Bhola has been appointed the new MD.
• Punj Lloyd said that IOCL has invoked Bank Guarantees worth Rs 176 crore for two projects. The company said that it is taking legal recourse in the said matter.
• JM Financial to consider raising funds on Dec. 19.

Offerings

• Equitas Small Finance Bank filed draft red herring prospectus with SEBI for Rs 1,000 crore initial public offer, according to a PTI report.
• “The IPO comprises a fresh issue aggregating up to Rs 550 crore and an offer for sale of up to 80,000,000 equity shares by Equitas Holdings Ltd., the promoter,” the new agency reported quoting company’s statement.

Brokerage Radar

BofA Securities On Maruti Suzuki

• Upgraded to ‘Buy’ from ‘Neutral’, raised price target to Rs 8,650 from Rs 7,450.
• Well placed for cyclical uptick in 2021-22 with limited BS6 risks.
• Earnings downgrade cycle to bottom in 2019-20.
• Best placed for recovery in passenger vehicles segment.

Kotak on Amara Raja Batteries

• Maintained ‘Add’; raised price target to Rs 800 from Rs 720.
• Automotive segment revenues trajectory to remain robust over the next three years.
• New segments such as motive power, solar energy and e-rickshaws to aid industrial segment.

IIFL on Ultratech Cement

• Maintained ‘Sell’ with a price target of Rs 3,350.
• Recommend Sell due to rich valuation and sluggish sector fundamentals.
• See flattish cycle for the industry for the next two years too.
• Industry utilisation is likely to decline in 2019-20 due to weak demand growth.
• Flattish cycle for the past few years has resulted in dependency on discipline.

Trading Tweaks

• Shriram EPC to move into ASM Framework.
• Jaypee Infratech, R Systems International to move out of short term ASM Framework.
• JBF Industries price band revised to 5 percent.

Who’s Meeting Whom

• ACC to meet Millennium Capital Management on Dec. 17.
• Brigade Enterprises to meet Franklin Templeton, Sundaram MF and other investors on Dec. 18.
• Cipla to meet HDFC AMC, Premji Invest and other investors from Dec. 17-24.
• Care Ratings to meet Edelweiss Securities and Acacia Partners from Dec. 19-20.
• Eris Lifesciences to meet Arisaig Partners on Dec. 17.
• Asian Paints to meet Invesco Advisors and American Century Investment Management from Dec. 19-19.
• Tata Steel to meet East Bridge Capital on Dec. 17.

Insider Trading

• Electrosteel Castings promoter Electrocast Sales acquired 2.5 lakh shares from Dec. 11-12.
• KRBL promoters acquired 1.02 lakh shares on Dec. 16.
• Jaiprakash Power Ventures promoter Jaypee Infra Ventures sold 66.5 lakh shares on Dec. 13.
• Max Ventures and Industries promoter Siva Enterprises acquired 2.21 lakh shares from Dec. 12-13.

Money Market Update

• The rupee snapped an eight-day winning streak to close at 71.00/$ versus 70.81/$ on Friday.

F&O Cues

Index Futures

• Nifty December futures closed at 12,082.5, premium of 28.6 points versus 55.6 points.
• Nifty December futures series open interest down 4 percent, sheds 5.4 lakh shares in open interest.
• Nifty Bank December futures closed at 32,010.3, premium of 36 points versus 88.5 points.
• Nifty Bank December futures series open interest up 0.4 percent, adds 56,000 shares in open interest.

Options

• Nifty PCR at 1.43 versus 1.62 (across all series).

Nifty Weekly Expiry: Dec. 19

• Max open interest on call side at 12,100 (23 lakh shares).
• Max open interest on put side at 12,000 (17.4 lakh shares).
• Open interest addition seen in 12,100C (+11.2k shares), 12,200C (+4.7 lakh shares).
• Open interest shedding seen in 12000P (-3.7 lakh shares).

Nifty Monthly Expiry: Dec. 26

• Max open interest on call side at 12,000 (23.7 lakh shares).
• Max open interest on put side at 12,000 (41.4 lakh shares).