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All You Need To Know Going Into Trade On Dec. 18

Stocks in the news, big brokerage calls of the day, complete trade setup and much more! 

Nothing like  a steaming cup of tea and your Sunday morning reads. 
Nothing like a steaming cup of tea and your Sunday morning reads. 

Asian stocks were mixed Wednesday as investors take a breather after the partial U.S.-China trade deal that sent global equities close to record highs.

Shares dipped in Tokyo and were little changed in Sydney and Seoul. U.S. futures were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.1 percent to 12,202.50 as of 6:56 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 inched upward on Tuesday as manufacturing and housing data topped expectations, just as the sugar rush of a partial trade deal between America and China began to wear off.
  • Oil dropped in Asian trading on Wednesday after a report showed a large increase in U.S. crude and gasoline supplies in the past week, stoking demand concerns.
  • The pound slumped by the most since January after the prime minister announced plans to set a Brexit deadline of December 2020 with or without a trade deal between the U.K and the European Union.

Get your daily fix of global markets here.

Key Events To Watch

  • The Goods and Services Tax Council will meet today to review the taxation structure for shoring up the revenue as lower-than-expected collections have led to a delay in compensation paid to states.
  • The National Company Law Appellate Tribunal will pronounce its judgement over the petition moved by former Tata Sons Chairman Cyrus P Mistry and the two investment firms challenging his removal from the group.

Indian ADRs

All You Need To Know Going Into Trade On Dec. 18

Stocks To Watch

  • Telecom Stocks: India’s telecom operators will continue to pay cross-network call charges for another year—a move that will benefit the two incumbent operators Bharti Airtel Ltd. and Vodafone Idea Ltd. For domestic calls, the interconnect use charge of Rs 0.06 per minute will now stay till Dec. 31, 2020, the Telecom Regulatory Authority of India said in a media note today. “From Jan. 1, 2021 onwards, the termination charge for wireless to wireless domestic calls shall be zero.”
  • NMDC received extension in respect of mining leases for four deposits for 20 years by Chhattisgarh Government. The mining leases were earlier valid up to March 2020. The company has also received an allocation of Rohne Coal Block, which would ensure the coking coal requirement of NMDC's upcoming steel plant at Nagarnar, Chattisgarh to some extent. The mineral company said in a media statement that the allocation would reduce the import of coking coal.
  • NBCC received approval from the committee of creditors to take over Jaypee Infratech.
  • HDFC reappointed Renu Sud Karnad as Managing Director of the Corporation till September 2022.
  • Future Supply Chain Solutions: Board approved allotment of 37.89 lakh shares to Nippon Express on a preferential basis at a price of Rs 664 per share, which is at a 36 percent premium to the closing prices as on Dec. 17.
  • Tata Motors: Jaguar Land Rover Automotive Plc plans to sell high-yield bonds for the second time in less than a month following last week’s U.K. election result and an initial trade agreement between the U.S. and China. The company is raising an additional 200 million euros of its 6.875 percent notes due 2026, the proceeds of which will be used for general corporate purposes, according to Bloomberg report.
  • Zee Entertainment Enterprises: Brickwork Ratings downgrades ratings to ‘BWR AA’ from ‘BWR AA+’ in connection with 6 percent Cumulative Redeemable Non-Convertible Preference Shares and the Issuer rating. The downgrade in the rating factors in the resignation of certain independent directors and the Company Secretary, along with dilution of controlling stake of the promoter and promoter group which now owns 5 percent in the company and the stepping down of Subhash Chandra as Chairman of the Board.
  • Axiscades Engineering Technologies said that it has been selected by Airbus to work on fuselage, product development and customer support services across different Airbus locations.
  • Tata Group: Tata Power received National Company Law Tribunal Mumbai’s nod for transferring the Strategic Engineering Division to Tata Advanced Systems. Tata Motors received NCLT Mumbai’s nod for transferring of the Defense Undertaking to Tata Advanced Systems. NCLT Hyderabad’s approval is still pending in respect of application filed by Tata Advanced Systems for both aforementioned schemes.
  • TCS: America’s pet speciality retailer Petco to deploy the company’s digital merchandising solutions.
  • Whirlpool, Blue Star, Voltas: TCL to enter AC Market in India next month and launch internet enabled models with plans to locally manufacture them, India MD Mike Chen said. (BN)
  • Mahindra CIE Automotives: Acacia Group increased its stake from 5.54 percent to 7.73 percent stake in the company on Dec. 10.
  • Persistent Systems: HDFC MF increased its stake from 5.17 percent to 7.2 percent stake in the company on Dec. 16.
  • Goodyear to close its manufacturing operations for Haryana Plant from Dec. 21-30 to align production with market demand.
  • Prestige Estate Projects to consider raising funds via preferential issue on Dec. 20.
  • HealthCare Global Enterprises has launched a cancer care center in Mumbai.
  • BSE has signed a memorandum of understanding with IHS Markit for developing new bond valuation service in India.
  • Nocil promoter Hrishikesh Mafatlal and Gurukripa Trustees increased their stake from 1.01 percent to 64.35 percent, as a result of acquiring the holding of acquirer in Suremi Trading, which held 12.54 percent stake in Nocil.
  • Allcargo Logistics has executed the business transfer agreement for sale of its two warehouses for Rs 300 crore.

Offerings

  • Prince Pipes & Fittings will launch its three-day initial public offering on Wednesday as it plans to repay loans and promoters look to pare holdings. The maker of polymer pipes and fitting plans to raise Rs 500 crore by selling 2.81 crore equity shares at Rs 177-178 apiece, according to its red herring prospectus.
  • Mazagaon Dock Shipbuilders received the Securities and Exchange Board of India’a approval for IPO. To see a sale of 2.8 crore equity shares (12.5 percent). Earlier in August 2018, the company had received SEBI’s approval for the IPO but did not go ahead with the plan.
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Brokerage Radar

HSBC on Hindalco

  • Maintained ‘Buy’ with a price target at Rs 260.
  • Management expects Novelis to sustain Ebitda per tonne upwards of $400.
  • Merger economics will not be impacted by potential sale of Aleris’s auto sheet facilities.
  • Company has no plans to infuse further capital in Idea.
  • Hindalco is preferred name in India non-ferrous metals space.

Axis Capital on L&T

  • Maintained ‘Buy’; cut price target to Rs 1,610 from Rs 1,803.
  • Reckon public sector spending has picked up and is back to monthly ordering.
  • Expect infra spending to be back-ended this year verus front-ended last year.
  • Cut EPS estimates for the next two financial years by 4 percent and 6 percent respectively on risks to bullet train order.

Credit Suisse on Dr Reddys Laboratories

  • Maintained ‘Outperform’ with a price target Rs 3,055.
  • Revlimid trial delayed by six months due to delay in closure of expert discovery.
  • Revlimid is a large opportunity for Dr. Reddy's, in which the case in terms of timing is ahead of others.
  • Revlimid could add more than $500 mn NPV for Dr. Reddy's even in the worst case.

On HUL

Credit Suisse

  • Maintained ‘Neutral’; cut price target to Rs 2,150 from Rs 2,180
  • Unilever cuts guidance for 2019 implies sharp slowdown for the December quarter.
  • India the most important driver for Unilever's guidance cut.
  • Expect HUL's revenue growth in December quarter to be below 5 percent, with volume growth at 3 percent.
  • Stock has the overhang of the potential stake sale by GSK in March quarter.

Goldman Sachs

  • Maintained ‘Sell’ cut price target to 1,730 from 1,771.
  • Lower our FY20E-22 EPS by 1-2 percent to factor in slower sales growth.
  • Expect volume growth of 5 percent in both December quarter and March quarter for HUL.
  • See implication on rural focused cos like Dabur, Colgate and Emami.

JPMorgan

  • Maintained ‘Neutral’; cut price target to Rs 2,100 from Rs 2,140.
  • Lower EPS estimates for the current and the next financial year by 1 percent and 2 percent respectively as we build in lower revenue growth expectations.
  • Expect December quarter’s revenue growth to moderate to 4 percent compared to 7 percent that was seven over the first half of the current financial year.

Trading Tweaks

  • Indiabulls Ventures ex-date for share buyback.
  • Arvind Fashions, BGR Energy Systems, Gayatri Projects to move into short term ASM Framework.
  • Dhunseri Investments, Rushil Decor Limited to move out of short term ASM Framework.

Who’s Meeting Whom

  • MCX to meet PI Square Investments on Dec. 20.
  • Affle to meet Axis Capital and Taiyo Pacific Partners from Dec. 18-19.
  • Mahindra & Mahindra Financial Services to meet Enam Asset Management and Matthews International Capital from Dec. 18-23.
  • Tata Steel to meet Torq Capital and Bajaj Allianz on Dec. 20.

Insider Trading

  • KRBL promoter acquired 26,000 shares on Dec. 17.
  • IIFL Finance promoter Ardent Impex acquired 4,17,000 shares on Dec. 17.

Money Market Update

  • The rupee closed at 70.98/$ versus 71.00/$ on Monday.

F&O Cues

Index Futures

  • Nifty December futures closed at 12,187.1, premium of 22 points versus 28.6 points.
  • Nifty December futures series open interest up 0.4 percent, adds 4,96,000 shares in open interest.
  • Nifty Bank December futures closed at 32,206.3, premium of 66 points versus 36 points.
  • Nifty Bank December futures series open interest down 1.2 percent sheds 16,000 shares in open interest.

Options

  • Nifty PCR at 1.67 versus 1.43 (across all series).

Nifty Weekly Expiry: Dec. 19

  • Max open interest on call side at 12,100 (12.9 lakh shares).
  • Max open interest on put side at 12,100 (27.6 lakh shares).
  • Open interest addition seen in 12,100P (+17.5k shares), 12,150P (+10.5 lakh shares).
  • Open interest shedding seen in 12100C (-10 lakh shares).

Nifty Monthly Expiry: Dec. 26

  • Max open interest on call side at 12,000 (22.5 lakh shares).
  • Max open interest on put side at 12,000 (44.6 lakh shares).
All You Need To Know Going Into Trade On Dec. 18
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