All You Need To Know Going Into Trade On Dec. 2
A woman pours freshly brewed tea into a cup. (Photographer: Taylor Weidman/Bloomberg)

All You Need To Know Going Into Trade On Dec. 2

Stocks in Asia rose along with U.S. equity futures as investors weighed data on China’s economy that showed a bright spot for manufacturing and the latest news on the trade front.

S&P 500 futures edged up and shares opened higher in Sydney, Seoul and Tokyo. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 12,089.00 as of 6:53 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 dropped from record highs on Friday in the wake of lower European and Asian equities, rounding out a lackluster finale to the third straight month of gains for global benchmarks.
  • Oil recovered some lost ground in Asian trade on Monday after an upbeat Chinese economic report at the weekend offered grounds for optimism on the global demand outlook.

Get your daily fix of global markets here.

Datawatch

  • Markit India manufacturing PMI for November will be released at 10:30 a.m.
  • India GDP growth falls to 4.5% in July-September quarter.
  • India’s fiscal deficit in October at 102.4% of 2019-20 target.
  • India’s core industries contract the most in fourteen years in September.

Indian ADRs

All You Need To Know Going Into Trade On Dec. 2

Stocks To Watch

  • Yes Bank: After a 12-hour long board meet on Friday, the board of the company approved the issue of $2 billion worth of equity shares on a preferential basis to a clutch of investors.
  • RBL Bank's board has approved the lender’s plan to raise about Rs 825 crore via preferential issue of shares, according to an exchange notification. The private lender plans to sell 24,238,310 shares aggregating at Rs 340.70 apiece, it said in a statement. Of the Rs 825 crore, Bajaj Finance Ltd. and East Bridge Capital Master Fund I will be investing nearly Rs 150 crore each, WF Asian Reconnaissance Fund will infuse Rs 224 crore, lshana Capital Master Fund and FEG Mauritius FPI will be investing about Rs 214 crore and 86 crore, respectively, the statement said.
  • Bharti Airtel, Reliance Industries, Vodafone Idea: India’s three largest telecom firms on Sunday announced new and costlier prepaid plans, signalling an easing of a price war that started after Asia’s richest man entered the sector in 2016. Airtel and Vodafone Idea’s new plans will be effective Dec. 3; Reliance Jio's will roll out on Dec. 6. The incumbents raised the minimum monthly recharge plan to Rs 45 from Rs 39 earlier, while the upstart didn’t disclose its plan details. Reliance Industries' telecom unit—Reliance Jio, however, said that its customers will get up to 300 percent more benefits under the new prepaid plans and will offer fair usage policy for outgoing calls to rival telecom networks. Besides, Bharti Airtel plans to consider raising funds via debt and equity on Dec. 4.
  • DHFL: The Reserve Bank of India has filed for insolvency proceedings to be initiated against the company. The action, it said, was initiated under powers vested with it through a recent amendment to the Insolvency and Bankruptcy Code.
  • Adani Group: The Zurich Airport International AG was on Friday was selected as the concessionaire for developing the Jewar airport, billed to be the biggest airport in India upon completion, PTI reported quoting officials. The Switzerland-headquartered company made the highest per passenger bid for the airport, outbidding competitors like Delhi International Airport Ltd., Adani Enterprises Ltd., and Anchorage Infrastructure Investments Holdings Ltd., the report added.
  • Infosys gets deal for digital solutions from Services Australia.
  • NCC: Reliance Nippon Life Asset Management reduced stake to 4.87 percent from 5.58 percent in the company.
  • Jagran Prakashan to consider share buyback on Dec. 9.
  • Shoppers Stop has opened a new store in Kolkata. Company now has 86 stores under its operations.
  • NTPC has listed its commercial paper in BSE for an issue size of Rs 1,500 crore.
  • Kohinoor Foods has requested Oriental Bank of Commerce to keep all its actions-on hold and has already submitted the one-time settlement proposal to the bank for their consideration.
  • 5paisa Capital’s arm received certificate of registration to act as a non-banking financial company for P2P business from the RBI with effect from Nov. 29.
  • Reliance Power: ICRA has upgraded the company’s arm Rosa Power Supply Company’s long term rating and short term rating to ICRA B+ and ICRA A4, respectively from ICRA D citing regularisation of debt servicing in the current financial year by the company, track record of the plant operations and the adequate coal availability.
  • Vedanta plans to offer up to Rs 3,000 crore in non-convertible debentures.
  • Sun Pharma must face antitrust suit over Nexium, Diavan Generics, reports Bloomberg.
  • Cochin Shipyard signed agreement with Andaman & Nicobar administration for operation and management of the marine dockyard in Port Blair and for development of ship repair ecosystem for the islands. Company will be entitled to a management fee of Rs 15 crore per annum.
  • Bank of India said board will meet on Dec. 5 to consider raising funds via QIP.
  • Dilip Buildcon wins Rs 1,250 crore road project in Uttar Pradesh.

November Auto Sales Highlights (YoY)

  • Maruti Suzuki: Total Sales down 2 percent to 1,50,630 units (Bloomberg Estimate: 1,46,598 units)
  • Tata Motors: Total sales down 25 percent to 41,124 units (Bloomberg Estimate: 38,780 units)

M&M

  • Auto sales down 9 percent to 41,235 units (Bloomberg Estimate: 41,764 units)
  • Mahindra Tractor Sales Down 19 percent to 21,032 units (Bloomberg Estimate: 23,706 units)

Catch all the live auto sales update here.

New Offerings

  • Ujjivan Small Finance Bank has finalised allocation of 8.21 crore shares to anchor investors at a price of Rs 37 per share. Key anchor investors are Government of Singapore, CX Partners Fund and Goldman Sachs.

Brokerage Radar

HSBC on Tata Power

  • Maintained ‘Hold’; cut price target to Rs 65 from Rs 75.
  • Deleveraging effort and Mundra resolution remains slow in current uncertain environment.
  • Regular progress on renewable commissioning and acquisition of distressed power plants provide hope for future.
  • Cut price target to factor in delay timeline for resolution and lower coal price.

Motilal Oswal on Tata Motors

  • Maintained ‘Buy’; hiked price target to Rs 195 from Rs 185.
  • JLR–turnaround in sight led by better mix, cost cuts.
  • India business bottoming out but recovery to be gradual.

JPMorgan on Reliance Industries

  • If Jio matches incumbents tariff hike, then focus would shift to subcriber-retention.
  • Post tariff hike, implied premium to Jio’s existing plan surges to 50 percent.
  • Multi-simming could reduce; subscriber addition growth could slow down for Jio.

UBS on JSW Steel

  • Upgraded to ‘Buy’ from ‘Neutral’; hiked price target to Rs 315 from Rs 290.
  • Expansion in margins not priced in; lower raw material costs to aid margins.
  • Timely completion of expansion and upgrade projects a key trigger.
  • Domestic demand outlook mildly positive.

UBS on Tata Steel

  • Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 360 from Rs 675.
  • Weakening India earnings to delay deleveraging.
  • Investors to focus on European turnaround and South-East Asia stake sale.
  • Some respite ahead if domestic steel market becomes supportive.

On Telecom Sector

Emkay

  • Historic tariff hike move; flow-through is crucial for sustained re-rating.
  • See risk among lower end consumer’s spending behavior after the steep hikes.
  • Tariff hike absorption will prove if heavy data consumption will sustain.
  • Content offering and network quality are key differentiators.
  • Vodafone Idea: Upgraded to ‘Hold’ from ‘Sell’; hiked price target to Rs 8 from Rs 5
  • Bharti Airtel: Upgraded to ‘Buy’ from ‘Hold’; hiked price target to Rs 507 from Rs 434
  • Bharti Infratel: Maintained ‘Sell’; hiked price target to Rs 264 from Rs 248

Goldman Sachs

  • Tariff hike significantly higher than expected.
  • Hikes suggests annual Ebitda of telecom companies could go up by $1 billion.
  • See some risk to subscriber additions of Airtel and Vodafone Idea on lower end.

On Yes Bank

Macquarie

  • Maintained ‘Underperform’ with a price target of Rs 50.
  • Funding raising raises more questions than answers.
  • Have big reservations regarding the quality of investors.
  • Doubt whether RBI will give approval to such investors who want more than 10 percent stake.

Nomura

  • Maintained ‘Neutral’ with a price target of Rs 63.
  • Fund raising raises worry on quality of investors.
  • Large capital raise would address the going concern worry for the bank.

Trading Tweaks

  • Coffee Day Enterprises, SREI Infrastructure Finance to move out of ASM Framework
  • Ballarpur Industries, Hubtown, Pokarna to move into short term ASM Framework
  • Precision Camshafts price band revised to move into 5 percent.

Who’s Meeting Whom

  • TCS to meet Fidelity International, Lazard Asset Management from Dec. 2-6.
  • Mahindra & Mahindra to meet Neuberger Berman, Canara HSBC Life Insurance and other investors from Dec. 3-10.
  • Cipla to meet CLSA, SBI Life Insurance and other investors from Dec. 2-6.
  • Mahindra Logistics to meet JHP Securities, Anand Rathi and other investors from Dec. 2-4.
  • Mahanagar Gas to meet Neuberger Berman on Dec. 2.
  • Tata Motors to meet CLSA, Goldman Sachs and other investors from Dec. 2-6.
  • PSP Projects to meet various institutional investors on Dec. 2
  • Finolex Industries to meet HDFC AMC, Tata MF, ICICI Pru and others on Dec. 2.

Insider Trading

  • Great Eastern Shipping promoter group Laadki Trading & Investments acquired 6 lakh shares from Nov. 26-29.
  • Star Cement promoter Sumangal International sold 10.64 lakh shares on Nov. 28.

Money Market Update

  • Rupee ended Friday at 71.74/$ versus 71.60/$ on Thursday.

F&O Cues

Futures

  • Nifty December futures closed at 12,099.8, premium of 43.8 points versus 35 points.
  • Nifty December futures series OI down 4 percent, sheds 5.2 lakh shares in OI.
  • Nifty Bank December futures closed at 32003.8, premium of 39.7 points versus 47.2 points.
  • Nifty Bank December futures series OI down 9 percent, sheds 1.6 lakh shares in OI.

Options

  • Nifty PCR at 1.53 versus 1.77 (across all series).

Nifty Weekly Expiry: Dec 5

  • Max OI on call side at 12,100 (21.7 lakh shares)
  • Max OI on put side at 12,000 (20.5 lakh)
  • OI addition seen in 12,100C (+12 lakh shares), 12,200C (+6.9 lakh shares)

Nifty Monthly Expiry: Dec 26

  • Max OI on call side at 12,500 (18.1 lakh shares)
  • Max OI on put side at 12,000 (28.8 lakh shares)
All You Need To Know Going Into Trade On Dec. 2
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