All You Need To Know Going Into Trade On Dec. 6

Asian stocks saw modest gains Friday as traders awaited news on the U.S. job market and a looming scheduled American tariff hike on Chinese goods.

Shares edged higher at the open in Tokyo, Sydney and Seoul. U.S. futures were little changed after stocks eked out a small gain on Thursday. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.27 percent to 12,076.50 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. stocks advanced as investors speculated the Trump administration won’t move forward with a tariff hike on Chinese goods scheduled for Dec. 15. Bonds and the dollar fell.
• Oil prices sputtered after OPEC failed to impress traders with what appeared to be a cosmetic revision to output quotas.

Get your daily fix of global markets here.

Indian ADRs

Stocks To Watch

• Yes Bank: Moody’s Investors Service on Thursday downgraded Yes Bank Ltd.’s long-term foreign currency issuer rating to ‘B2’ from ‘Ba3’, bringing it down by two notches. The ratings agency has also downgraded the bank’s long-term foreign and local currency bank deposit ratings to ‘B2’ from ‘Ba3’, foreign currency senior unsecured medium-term note program rating to ‘(P)B2’ from ‘(P)Ba3’, and baseline credit assessment and adjusted BCA to ‘b3’ from ‘b1’, it said in a statement. The outlook for the bank has been retained at negative, Moody’s said. It had put the bank’s rating on review last month.
• Allcargo Logistics: Allcargo Logistics Ltd.’s board has approved acquisition of 19.43 percent stake in Gati Ltd., effectively taking over management control of the Hyderabad-based supply chain solutions company. Allcargo Logistics will acquire the stake for Rs 177.9 crore from promoters and via preferential issue of equity shares, according to its exchange filing. The container freight stations operator also announced an open offer for acquisition of up to 3.17 crore shares, which represent 26 percent of the paid-up voting share capital, to comply with the Securities and Exchange Board of India’s norms, the filing said. The acquisition, expected to be completed by March 30 next year, is subject to approval from shareholders and other authorities, it said.
• Gati said in a media statement that Japan’s Kintetsu Group continues to remain invested in a joint venutre with the company, which was formed in 2012 and will retain its existing association with the company. Gati has sold the entire stake of 12.43 percent in TCI Finance on Nov. 1.
• Bharti Airtel: S&P kept the ratings for long-term facilities at BBI, with ratings with negative implications, due to Rs 34,300 crore setback from the Department of Telecom’s litigation will decisively weaken Bharti Airtel's leverage.
• RBL Bank closed institutional placement of shares. The lender approved the allocation of 5.77 crore shares at Rs 351 per share, which is at a discount of 0.45 percent to the floor price of Rs 352.57 each. The allocation price is at a discount of 4 percent to the closing prices of Dec. 5. Bank has raised Rs 2025.3 via this QIP issue. Bajaj Finance did not participate in the preferential issue of the Bank.
• LIC Housing Finance will raise Rs 550 crore via debt, according to Bloomberg report.
• Tata Motors: Board approved allotment of 20.16 crore ordinary shares at a price of Rs 150 each, which is at a discount of 9.7 percent to the closing prices as on Dec. 5. The Board also approved allotment of 23.13 crore warrants, with each warrant carrying a right to subscribe one ordinary share per warrant, at a price of Rs 150 per warrant to Tata Sons. Company will raise up to Rs 6540 crore by this allotment.
• Bank of Baroda: Board approved raising Rs 1,850 via Tier-1 Bonds.
• Mahindra & Mahindra acquired 36.63 percent stake in Meru for Rs 44.71 crore. On Aug. 31 the company had signed an agreement to acquire 55 percent stake in Meru. Post this transaction, the company will have the right to appoint majority of directors in the cab service company.
• Welspun Group: Promoters acquired majority stake in warehousing platform. The group will be the exclusive development manager for a portfolio of ready land assets owned by the promoters in their personal capacity with an estimated value of US$ 50 million and development potential of over 50 lakh square feet of Grade-A industrial/warehousing space. This includes a marquee 50 lakh square feet project in Mumbai Metropolitan Region.
• Info Edge said that due to change in FDI laws, SoftBank will directly invest in Etechaces instead of the Bank’s arm Dipdha.
• Camline Lifesciences said that the commercial production for Dahej product is most likely to be expected in January 2020.
• VST Tiller Tractors November Sales: Power Tillers Sales down 41 percent year-on-year to 1238 units. Tractor Sales down 10 percent year-on-year to 568 units.
• Nirlon signed long-term leave and license agreement with JPMorgan who will take up 1.15 million square feet of office space and this is expected to be delivered by the second quarter of 2021.
• Sadbhav Infra Projects’ arm has canceled concession agreement with NHAI due to non-availability of required 80 percent of right of way by NHAI within stipulated time period. Agreement will be treated as terminated with mutual consent of the parties without any outstanding claims on each other.
• Narayana Hrudayalaya to discontinue its hospital project in Kenya due to the inability to fund the project by a financial institution partner.
• Greaves Cotton completed the acquisition of Ampere Vehicles. The company acquired 18.72 percent stake for the target company’s promoter Hemlatha Annamalai through secondary purchase.
• Indiabulls Ventures record date for share-buyback on Dec. 19.

Brokerage Radar

Macquarie on Tata Power

• Upgraded to ‘Outperform’ from ‘Neutral’; cut price target to Rs 76 from Rs 83.
• Expect Mundra tariff resolution in the next two quarters.
• Multiple triggers ahead: disinvestments from non-core, growth in renewables and distribution.
• Believe the stock is way too attractive.

JPMorgan on Zee Entertainment

• Maintained ‘Neutral’; hiked price target to Rs 320 from Rs 260.
• Advertising revenue growth remain muted.
• Domestic subscription revenue growth is healthy.
• Improvement in balance sheet and cash flow and success of Zee5 key for stock re-rating.

PhillipCapital on Camlin Fine

• Maintained ‘Buy’ with a price target of Rs 140.
• Dahej plant to drive rapid value growth.
• Expect saving in input materials to improve margins by 400 basis points.
• Expect sales and Ebitda to grow rapidly at a CAGR of 22 percent and 60 percent respectively over FY19-22.

Kotak Securities on Jindal Steel and Power

• Maintained ‘Buy’ with a price target of Rs 170.
• Allocation of Gare Palma coal block still uncertain.
• Coal block contributes Rs 32 per share to target price.
• Investment thesis remains intact with volume growth-led deleveraging.

HSBC on Bharti Airtel

• Maintained ‘Buy’; hiked price target to Rs 540 from Rs 510.
• Equity raise likely creating a near-term share sale overhang on the stock.
• Fund raise bodes well for its balance sheet in the medium term.
• Expect regulatory clarity to emerge on multiple issues over next few week.

Nomura on Reliance Industries

• Maintained ‘Buy’; hiked price target to Rs 2,020 from Rs 1,785.
• Sharp tariff increase further improves outlook.
• More tariff hikes look likely.
• Jio tariffs still at discounts to peers; market share gain will likely sustain.

Edelweiss on Hindustan Unilever

• Maintained ‘Buy’ with a price target of Rs 2,250.
• Expect Unilever’s focus on India to remain high.
• Repose faith in HUL’s ability to clock superior volume and earnings growth.
• Retain HUL among our top consumer picks.

UBS on JSW Energy

• Maintained ‘Sell’ with a price target of Rs 68.
• Spot power prices remain under pressure post monsoon season.
• Subdued power demand to continue impinging on merchant rates.
• Weakening power demand growth; spot prices at Rs2.7-2.8/kWh.

IIFL Securities on AIA Engineering

• Maintained ‘Add’ with a price target of Rs 1,664.
• Growing share in a largely stable end-market.
• Expanding moat via solutions-based offering.
• Post capex, enough capacity in place, but RoE improvement to be slow.

Trading Tweaks

• Thomas Cook record date for demerger.
• GTL, Sintex Plastics Technology, Indiabulls Integrated Services, Adhunik Industries to move into short ASM Framework.
• Shree Renuka Sugars, Hindustan Construction Company, MEP Infrastructure Developers, D B Realty to move out of short term ASM Framework.

Price Band Revisions

From 2 percent to 5 percent

• B&A Packaging
• GBL Industries
• CHD Developers
• Ludlow Jute & Specialities
• Raunaq EPC International
• Premier Synthetics

From 5 percent to 10 percent

• 5paisa Capital
• Aksh Optifibre
• Alphageo
• Arshiya
• ARSS Infrastructure Projects
• Aurionpro Solutions
• Bajaj Healthcare
• BF Utilities
• Birla Cable
• Camlin Fine Sciences
• Edelweiss Financial Services
• Electrotherm, Eveready Industries
• Filatex Fashions
• Gati
• Genus Paper & Boards
• GSS Infotech
• Indiabulls Real Estate
• Jaypee Infratech
• JBF Industries
• Jubilant Industries
• Mangalam Organics
• Mcleod Russel
• MT Educare
• Pioneer Distilleries
• R P P Infra Projects
• Ramky Infrastructure
• Rajnish Wellness
• Shankara Building Products
• Shyam Century Ferrous
• Siti Networks
• SMS Lifesciences
• SORIL Infra Resources
• SREI Infrastructure Finance
• The New India Assurance Company
• Vakrangee
• Williamson Magor

From 5 percent to 20 percent

• Coffee Day Enterprises
• GVK Power & Infrastructur
• Hathway Cable & Datacom
• Patel Engineering
• Shilpa Medicare

From 10 percent to 20 percent

• 63 Moons Technologies
• Apex Frozen Foods
• Bharat Gears
• Birla Precision Technologies
• Corporation Bank, Essel Propack
• IL&FS Investment Managers
• India Tourism Development Corporation
• LGB Forge
• Lyka Labs
• MSTC
• Omax Autos
• RPG Life Sciences
• Sadhana Nitro Chem
• Sundaram Multi Pap
• Tata Teleservices (Maharashtra)
• UCO Bank
• United Bank of India
• V2 Retail

Who’s Meeting Whom

• Tata Steel to meet HDFC MF, Goldman Sachs and other investors from Dec. 9-17.
• Affle to meet New Vernon Capital, Sixteenth Street Capital and Bank of America Merrill Lynch from Dec. 6-11.

Insider Trading

• Electrosteel Castings promoter Malay Commercial acquired 8 lakh shares from Dec. 2-3.
• Vakrangee promoter Dinesh Nandwana acquired 10 lakh shares on Dec. 5.
• Filatex India promoter Nouvelle Securities acquired 1 lakh shares on Dec. 3.
• KRBL promoters acquired 65,000 shares from Dec. 3-4.

Money Market Update

• The rupee closed at 71.29/$ versus 71.53/$ on Wednesday.

F&O Cues

Index Futures

• Nifty Dec futures closed at 12,047.7, premium of 29.3 versus 46.6 points.
• Nifty Dec futures series open interest down 3.7 percent, sheds 5 lakh shares in open interest.
• Nifty Bank Dec futures closed at 31,762.5, premium of 49.6 points versus 101.6 points.
• Nifty Bank Dec futures series open interest down 4 percent, sheds 75,000 shares in open interest.

Options

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

Nifty Weekly Expiry: Dec. 12

• Max open interest on call side at 12,100 (13.2 lakh shares).
• Max open interest on put side at 12,000 (11.8 lakh).
• Open interest addition seen in 12,100C (+9 lakh shares), 12,500C (+7.8 lakh shares), 11,500P (+6.8 lakh shares).

Nifty Monthly Expiry: Dec. 26

• Max open interest on call side at 12,000 (18.2 lakh shares).
• Max open interest on put side at 12,000 (32.2 lakh shares).