All You Need To Know Going Into Trade On Dec. 6
Stocks dropped Asia with U.S. equity futures, suggesting a resumption of the selling pressure investors have coped with for much of this quarter.
Equities in Japan, Korea and Australia declined, while the yen edged up. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.81 percent to 10,746 as of 7:15 a.m.
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Here’s a quick look at all that could influence equities today.
U.S. Market Check
- The U.S. New York Stock Exchange and Nasdaq were both closed on Wednesday to mark the day of mourning for the late former President George H.W. Bush, who died on November 30 at age 94.
The big puzzle
Meanwhile, U.S. index futures lurched lower today, signaling no respite to the rout that’s lopped more than $3 trillion from the market since late September.
S&P 500 Index contracts plunged as much as 1.9 percent from Tuesday’s close, before trading at 2,675, down 1 percent, as of 9:49 a.m. in Singapore. Concern about China-U.S. trade relations deepened after the arrest of Huawei Technologies Co.’s Chief Financial Officer Wanzhou Meng, though traders were still puzzled at the magnitude of the declines.
Europe Market Check
- European stocks tumbled the most in more than a month, led by miners, as investors weighed conflicting trade-war comments.
- Japan’s Topix Index fell 0.5 percent.
- Hang Seng futures added 0.1 percent overnight.
- Australia’s S&P/ASX 200 Index fell 0.2 percent.
- Futures on the S&P 500 Index fell 0.7 percent.
- Kospi Index was down 0.6 percent
- West Texas Intermediate crude fell 0.3 percent to $52.76 a barrel, after reaching the highest in two weeks.
- Brent crude traded lower for the second day, down 0.31 percent to $61.37 a barrel.
- Gold was little changed at $1,237.81 an ounce.
London Metal Exchange:
- Aluminium ended 0.25 percent lower.
- Copper ended lower for the second day, down 0.55 percent.
- Zinc ended higher for the sixth day, up 1.1 percent.
- Nickel ended 0.67 percent higher.
- Lead ended 1.2 percent lower.
- Tin ended a little changed.
Stocks To Watch
- Power Grid Corporation of India was declared a successful bidder under tariff based competitive pricing to establish transmission system for 2 X 660MW Thermal Power Project and construction of 400Kv substation with associated lines in Uttar Pradesh.
- Cabinet will consider the proposal for PFC acquiring entire government holding in state-owned REC, which will fetch the government around Rs 15,000 crore (PTI)
- Moody’s changed GlaxoSmithKline PLC outlook to negative from stable and its guaranteed subsidiaries. The change in outlook followed the company’s Dec. 03 announcement of its intention to acquire Tesaro for $5.1 billion as the company will deleverage more slowly than expected and credit metrics will remain weak for prolonged periods of time says Knut Slatten, Senior Analyst, Moody’s. (Bloomberg News)
- Tata Communications said it will collaborate with UROS Group to deploy Internet of Things and Smart City Solutions across large commercial and public sectors organisations globally.
- Deepak Nitrite: China phenol spot prices fall by 27 percent from Rs 1.3 lakh per metric ton to Rs 94,740 per metric ton since the beginning of November till date. Over the last five trading sessions, phenol prices have fallen by 6.7 percent in rupee terms. On Nov. 1 the company had announced commencement of production at its Mega Plant for phenol and acetone with a capacity of 200,000 MTPA for phenol and 1.2 lakh MTPA for its co-product Acetone.
- Adani Green Energy’s arm won a contract for 390 MW Wind-Solar Hybrid Auction at Rs 2.69 per KW-hour, said Sanjay Sharma, General Manager of Solar Energy Corporation of India. In the auctions for 840 MW worth of project the remaining tender was won by Softbank’s India JV for clean energy at a price of Rs 2.67 per KW-hour. (Bloomberg News)
- Sagar Cements board approved an investment of Rs 150 crore in Satguru Cement in order to set up green field cement manufacturing plant of 1 million-ton capacity and waste heat recovery plant in Madhya Pradesh. The board also approved investment of Rs 108 crore in Jajpur Cements to set up green field grinding unit of 1.5 million-ton capacity in Odisha. The company says both these projects are being planned to be completed by March 2021 The cement company will issue convertible warrants worth Rs 224.75 crores.
- Kirloskar Industries clarified that the news of promoter group of insider trading will not impact the company materially as this case refers to the purchase of shares in its arm in 2010 and the SEBI had not initiated any inquiry or investigation against the company.
- Lemon Tree Hotels opened a 201-room hotel property in Pune.
- Elecon Engineering board said it will consider raising Rs 150 crore via Non-Convertible Debentures on Dec. 10.
- Key Mindtree investors looking to sell stake in the company. KKR likely investor (Mint).
- Kishore Biyani may keep FMCG arm Future Consumer off the deal table in talks with Amazon. (Business Standard)
- Dec 05-31: India third quarter BoP current account balance; estimates at $19.8 billion deficit, prior $15.8 billion.
Earnings To Watch
- Muthoot Finance
- Founder Arbutus Consultancy OFS for 6.49 crore shares of RattanIndia Infrastructure at floor price Rs 3.4 each for non-retail investors open; retail investors can bid on Friday.
- Prime India Opportunity Fund acquired 47.5 lakh shares or 2.14 percent equity at Rs 79.3 each.
- Nomure Singapore sold 47.5 lakh shares or 2.14 percent equity at Rs 79.3 each.
Who’s Meeting Whom
- Mahindra & Mahindra Financial Services to meet Enam Holdings on Dec. 6.
- Sandhar Technologies to meet ICIC Pru MF, SBI MF and other investors from Dec. 6-7
- Dr LalPathLabs to meet Morgan Stanley, India Nivesh and other investors from Dec. 7-14
- Capital Trust price band revised to 10 percent.
Money Market Update
- The rupee on Wednesday ended at 70.46/$ versus Tuesday’s closing of 70.50/$.
- Nifty December futures closed trading at 10,828, premium of 44 points.
- Max open interest for December series at 11,000 Call option, open interest at 27.8 lakh shares.
- Max open interest for December series at 10,000 Put option, open interest at 38.9 lakh shares.
- Nifty PCR at 1.63 from 1.7.
- Nifty Bank PCR at 0.75 from 0.92.
Credit Suisse on Tractors
- Tractor stocks de-rated on concerns that the industry is now poised for a decline in the next financial year.
- Near-normal monsoon, state subsidies and strong construction activity to help sustain strong growth for two years
- Post a sharp de-rating, Escorts and M&M trade at very attractive valuations.
- Expect Escorts to grow faster than industry and improve margins at the same time.
HSBC on UPL
- Maintained ‘Buy’; hiked price target to Rs 880 from Rs 850.
- Strong Latin America performance could continue with more sowing in Brazil.
- Trade war to benefit UPL in LatAm markets; global consolidation another opportunity.
- UPL to gain market share with high quality generic and innovative products.
JPMorgan on Aurobindo Pharma
- Maintained ‘Overweight’; hiked price target to Rs 940 from Rs 835.
- Building on the core business growth through recent acquisitions.
- Auro’s execution should provide comfort on the Sandoz deal.
- Sandoz deal is unlikely to be RoIC dilutive unlike investments by peers.
Macquarie on Siemens
- Upgraded to ‘Outperform’ from ‘Underperform’; hiked price target to Rs 1,128 from Rs 811
- Business mix steadily moving towards short cycle product business.
- Expect margin recovery to continue which would drive 13 percent earnings CAGR over FY18-21.
- Value Siemens at 10 percent premium to Cummins on business diversification and large opportunity size.
CLSA on HCL Tech
- Maintained ‘Buy’ with a price target of Rs 1,500.
- Expect return of large deal wins to drive organic growth acceleration.
- Mega deal wins, IP launches and low PE make HCL Tech Top Buy.
- HCL promises highest stock return among peers given its rerating potential & high-teen EPS growth.