All You Need To Know Going Into Trade On Dec. 3

Asian stocks slumped Tuesday after a sell-off on Wall Street triggered by fresh tariffs announced by President Donald Trump, renewing concerns about global trade tensions.

Shares in Japan, Australia and South Korea opened lower. Hong Kong futures were down. U.S. stock futures were little changed. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.14 percent to 12,074 as of 6:50 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.

• The S&P 500 Index fell the most in almost eight weeks after the U.S. President Donald Trump announced that he is reinstating tariffs on steel and aluminium from Argentina and Brazil, nations he criticised for cheapening their currencies to the detriment of U.S. farmers.
• Oil rose the most in more than a week as traders sifted for fresh signals of whether OPEC and allied crude producers will tighten supplies when they meet later this week.

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Indian ADRs

Stocks To Watch

• DHFL: The Mumbai bench of the National Company Law Tribunal on Monday admitted petition by the Reserve Bank of India seeking bankruptcy proceedings to resolve the credit and liquidity crisis at the mortgage player, according to a PTI report.
• Biocon and Mylan launched Trastuzumab biosimilar in the U.S. The Food and Drug Administration approved product was unanimously recommended by the regulator’s Oncologic Drugs Advisory Committee, Biocon said in an exchange filing. The drug is used to treat breast and stomach cancers.
• United Spirits: Board approved merger of company’s listed arm Pioneer Distilleries with self. Ten equity shares of the company will be issued for every 47 equity shares held by shareholders of Pioneer Distilleries.
• Oil & Natural Gas Corporation plans to invest about Rs 1.6 lakh crore and Oil India Rs 1,758 crore in domestic exploration and production in the next five years, Bloomberg reported quoting Oil Minister Dharmendra Pradhan's written reply in Parliament.
• RBL Bank has opened its QIP. The board will meet on or after Dec. 5 to consider the issue price. The floor price has been set at Rs 352.57 each, a discount of 5.6 percent to Monday’s closing price.
• Crompton Greaves Consumer Electricals: Private equity firm Advent International and Singapore state investment company Temasek are offering to sell 4.485 crore shares of the company, according to terms of the deal obtained by Bloomberg. The base offering is valued at Rs 1,077 crore ($150 million) based on the floor price of Rs 240 apiece, priced at a discount of 4.8 percent to Monday's close, according to the terms.
• Aurobindo Pharma: Shareholders approved the merger of six arms of the company with self.
• Bank of Baroda to consider raising capital via debt instruments on Dec. 5.
• Tata Motors has won an order to supply over 2,300 buses to five state transportation companies. The company said that it is working to complete the order by February 2020, according to a Bloomberg report.
• Jaypee Infratech: Yes Bank has filed a petition before NCLT to initiate insolvency proceedings against the company’s arm Jaypee Healthcare.
• Prime Focus: IDBI Trusteeship Services has invoked pledge of 7.33 crore shares or 24.5 percent equity in the company. IDBI Trusteeship Services is the debenture trustee for Credit Suisse AG (Singapore). The capital was pledged by Reliance Mediaworks Financial Services. Pledge was invoked on Nov. 28.
• Dr. Reddy’s Lab: NCLT has said that unsecured creditors meeting is to be held on Jan. 2 for considering amalgamation of Dr. Reddy’s Holdings and the company.
• Altico Capital has defaulted on Rs 72.5 crore debt obligation and also failed to pay Rs 138 crore obligations which were due on Nov. 28, according to a Bloomberg report.
• Piramal Enterprises and Piramal Phytocare’s merger scheme has come into effect. Record date has been fixed as Dec. 12. One share of Piramal Enterprises will be allotted for every 70 shares held by the shareholders in Piramal Phytocare.
• IFCI said that it has received bids for the sale if its entire stake in NSE.
• Kei Industries to consider raising funds via QIP on Dec. 5.
• Gati to consider raising fund via preferential issue on Dec. 5.
• Reliance Capital: Vistra ITCL (India) Ltd., trustees for the debentures issued by the company, has filed Original Application, before the Debts Recovery Tribunal – Mumbai, towards recovery of dues to the debenture holders. The company is legally advised that the said DRT filing is entirely misconceived and in violation of the provisions and the same will be duly challenged on those among other grounds.
• Bajaj Finance: The non-banking finance company moved the Securities Appellate Tribunal on Monday to challenge Securities and Exchange Board of India’s decision on restore Karvy Stock Broking's pledged securities to its clients, according to Moneycontrol. This after PTI reported that the markets regulator’s action against Karvy resulted in nearly 83,000 investors, or 90 percent of investors, getting back their securities that were illegally transferred by the broker to its own account and were even pledged without any authorisation.

Offerings

• Ujjivan Small Finance Bank IPO fully subscribed, gets 162 percent demand on first day of sale; offer closes tomorrow

Brokerage Radar

UBS on SBI

• Maintained ‘Buy’; hiked price target to Rs 450 from Rs 375.
• IBC resolutions likely to offset recent stress.
• Three potential risks: telecom, NBFCs and mid-sized corporates.

Morgan Stanley on Reliance Industries

• Maintained ‘Overweight’; hiked price target to Rs 1,753.
• With higher telecom tariffs, RIL’s Return on Capital Employed should rise above 10 percent.
• See chemical margin trend reversing as supply rationalisation and demand pick-up.
• Combined with asset monetisation and slowing investments, expect 25 percent FY20-F22 earnings per share compounded annual growth rate.

IIFL on Sudarshan Chemical

• Initiated ‘Buy’ with a price target of Rs 500.
• Well-placed to continue rapid growth in context of imminent exit of its two largest global competitors.
• Positives: low-cost manufacturing, technical capabilities, wide product portfolio, growing client relationships and environmental compliance.
• Expect its aggressive growth plan to drive a 30 percent EPS CAGR over FY19-22.

Macquarie on Zee Entertainment

• Maintained ‘Outperform’ with a price target of Rs 446.
• Events over the past week to improve corporate governance and strengthen Zee’s balance sheet.
• Most issues raised were known; management to work swiftly to restore investor confidence.
• Investors would hope no further material negative surprises.

On Biocon

HSBC

• Maintained ‘Buy’; hiked price target to Rs 325 from Rs 280.
• Ogivri is well set to grab market share on flexible dosage offering, supported by Biocon’s robust manufacturing setup.
• Gaining favourable formulary coverage will be a key factor for Ogivri’s success.
• Biocon remains well placed to gain from a favourable push for biosimilars in regulated markets.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 350.
• The addressable market for branded Herceptin is $2.2 billion.
• Biocon-Mylan could generate $180-220 million in sales at high margins in 1-2 years.
• bGlargine is the next potential U.S. biosimilar launch by Biocon, by March 2020.

Trading Tweaks

• Gayatri Projects, Max India, Sequent Scientific to move into Surveillance Measure in respect of companies with high promoter pledge.
• Bajaj Consumer Care, Jindal Stainless, Metropolis Healthcare to move out of Surveillance Measure.
• Tejas Networks, Precision Camshafts, One Point One Solutions to move into short term Additional Surveillance Measure framework.
• Indiabulls Real Estate, Gayatri Projects, Cerebra Integrated Technologies, Forbes & Co to move out of short term ASM Framework.
• CHD Chemicals price band revised to 10 percent.
• Mukand Engineers, Tips Industries, Gayatri Projects price band revised to 5 percent.

Who’s Meeting Whom

• Titan to meet Aditya Birla Capital, Motilal Oswal AMC and Neuberger Berman from Dec. 3-5.
• Pidilite Industries to meet Hill Fort Capital on Dec. 4.
• KEC International to meet JP Morgan on Dec. 4.
• Thyrocare Technologies to meet ADD Capital on Dec. 4.
• Brigade Enterprises to meet Axis MF, Motilal Oswal AMC and other investors from Dec. 3-4.

Insider Trading

• Electrosteel Castings promoter Electrocast Sales acquired 8 lakh shares from Nov. 27-29.

Money Market Update

• The rupee closed at 71.66/$ versus 71.74/$ on Friday.

F&O Cues

Index Futures

• Nifty December futures closed at 12,091.4, premium of 43.2 points versus 43.8 points.
• Nifty December futures series open interest down 1 percent, sheds 1.3 lakh shares in open interest.
• Nifty Bank December futures closed at 31,921, premium of 49.9 points versus 39.7 points.
• Nifty Bank December futures series open interest down 2 percent, sheds 3,36,000 shares in open interest.

Options

• Nifty PCR at 1.44 versus 1.53 (across all series).

Nifty Weekly Expiry: Dec. 5

• Max open interest on call side at 12,100 (27.6 lakh shares).
• Max open interest on put side at 12,000 (25.2 lakh).
• Open interest addition seen in 12,100C (+5.9 lakh shares), 12,000P (+4.7 lakh shares).

Nifty Monthly Expiry: Dec. 26

• Max open interest on call side at 12,500 (18.8 lakh shares).
• Max open interest on put side at 12,000 (31.2 lakh shares).