All You Need To Know Going Into Trade On Dec. 7

Asian stocks posted modest gains in early trade following an afternoon rally in the U.S. that erased most of the day’s losses, as investors grappled with shifting indications on U.S.-China trade talks and prospects for a pause in Federal Reserve tightening.

Japanese shares climbed with those in South Korea and Australia. Futures on the S&P 500 Index were little changed after the U.S. equity market recovered the bulk of the day’s declines on Thursday, though still ended lower.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.6 percent to 10,688 as of 7:15 a.m.

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BQ Live

Here’s a quick look at all that could influence equities today.

U.S. Market Check

• U.S. equities closed up from the lows of the day after a late rally in large technology stocks helped to propel the Nasdaq 100 higher in what was the biggest reversal for the index since April.

Europe Market Check

• The optimism over the U.S.-China trade talks is gone, all European sectors are in the red, Germany’s DAX index is set enter a bear market, while U.S. stocks tumble as investors rush for the exits.

Asian Cues

• Japan’s Topix index added 0.9 percent.
• Hang Seng futures fell 0.9 percent overnight.
• FTSE China A50 Index futures rose 0.3 percent.
• Australia’s S&P/ASX 200 Index gained 0.8 percent.
• Futures on the S&P 500 were little changed.
• The MSCI Emerging Market Index slumped 2.3 percent.

Commodity Cues

• West Texas Intermediate crude added 0.2 percent to $51.57 a barrel.
• Crude ended 2.44 percent lower at $60.0.6 per barrel.
• Gold held at $1,237.83 an ounce.

London Metal Exchange

• Aluminium ended 1.68 percent lower.
• Copper ended lower for the third day, down 1.78 percent.
• Zinc halted a six-day rally, down 0.95 percent.
• Nickel ended 3.34 percent lower.
• Lead ended 0.05 percent higher.
• Tin halted a three-day rally, down 1.33 percent.

Indian ADRs

Stocks To Watch

• HCL Technologies to buy select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019. The software products in scope represent a total addressable market of more than $50 billion. HCL to conduct conference call at 8.15 am today. As of Sept 30, the company had an a cash and cash equivalent of $1.6 billion.
• Finance Minister Arun Jaitley said the Cabinet Committee on Economic Affairs approved strategic sale of 52.63 percent stake in REC to PFC. along with management control. He expected the deal to be completed by the end of the financial year. A Government official said with PFC buying government’s stake in REC, Government’s divestment receipts will reach around Rs 53,000 crore to Rs 54,000 crore.
• Sonata Software plans to acquire Australia Headquartered.
• Lupin’s Canada arm received an approval from Health Canada for Zaxine drug used for the treatment of irritable bowel syndrome. The drug will be launched in December under strategic licensing agreement with Salix Pharma. The agreement grants Lupin exclusive rights to promote, distribute and market Zaxine in Canada.
• Government sold 2.21 percent equity shares of Coal India. worth Rs 3,300 crore to Reliance Nippon Life Asset Management as the asset management company of the CPSE ETF mutual fund scheme. With this sale, Government’s holding in Coal India falls from 75.13 percent to 72.92 percent of the equity paid up share capital
• Reliance Industries’ Reliance Jio Infocomm board was considering restructuring and reorganising proposals on Dec. 11.
• Zydus Wellness said it will raise funds by issuing preference shares worth Rs 2,575 crore to Cadila Healthcare, Zydus Family Trust, Pioneer Investment Fund and True North Fund. The board also approved that NCDs worth Rs 1,500 crore will also be raised within one year from now.
• Wipro’s digital business arm announced expanded global partnership with the U.S. based ‘Alfresco’ to offer open source digital solutions.
• MPS Ltd. received intimation from ADI BPO Services for withdrawal of scheme of amalgamation of the latter company with MPS. The communication states that demerger may not be commercially viable due to legal uncertainties/risks and the current stamp duty position in Tamil Nadu post the issuance of recent circular declaring that amalgamation/ demerger schemes may be liable to stamp duty.
• Majesco said it will invest up to $35 million in U.S. unit’s right offering to fund remainder of Exaxe acquisition, pay off debt and accelerate crowd solution growth.
• Sagar Cements consolidated November cement sales up 36.3 percent at 3.15 lakh MT versus 2.31 lakh MT on a yearly on basis.

Media Reports

• Jet Airways sought $350 million soft loan from Etihad. (PTI)
• NTPC likely to buy centre’s stake in SJVN. (PTI)

Offerings

• RattanIndia Infrastructure OFS for retail investors opens; Non-retail investors gets 111 percent demand Thursday.

Data Watch

• Dec 05-31: India third quarter BoP current account balance; estimates at $19.8 billion deficit, prior $15.8 billion.

Earnings To Watch

• IFCI

Bulk Deals

Kajaria Ceramics

• Wasatch International Growth Fund acquired 10.37 lakh shares or 0.65 percent equity at Rs 435.35 each.
• Abu Dhabi Investment Authority sold 10.1 lakh shares or 0.64 percent equity at Rs 435.26 each.

Trading Tweaks

• IL&FS Transportation Networks Limited to move into ASM Framework
• Mishtann Foods, Sadhana Nitrochem price band revised to 2 percent.

Insider Trading

• Dabur India promoter acquired 30,000 shares from Dec. 4-5.
• Alembic promoter group Nirayu acquired 1.67 lakh shares from Dec. 4-5.
• Sequent Scientific promoter Padmakumar PillaI sold 45,000 shares on Dec. 5
• Nava Bharat Ventures promoter group acquired 30,000 shares from Dec. 4-5.
• Axis Bank promoter United India Assurance sold 56,000 shares from Dec. 3-5.
• Man Infra promoter and director Parag Shah acquired 44,500 shares on Dec. 5
• Skipper Promoter acquired 43,500 shares from Dec. 4-5.

(As reported on Dec. 6)

Money Market Update

• Rupee on Thursday closed at 70.90/$ versus 70.46/$ on Wednesday.

F&O Cues

• Nifty December futures closed trading at 10,626, premium of 25 points.
• Max open interest for December series at 11,000 strike value call option (open interest at 40.9 lakh shares)
• Max open interest for December series at 10,000 strike value put option (open interest at 37.9 lakh shares)

Put-Call Ratio

• Nifty PCR at 1.44 from 1.63.
• Nifty Bank PCR at 0.98 from 0.75.

Get a detailed drawdown of derivatives on BloombergQuint's F&O page.

Brokerage Radar

CLSA on Sun TV

• Maintained ‘Buy’; cut price target to Rs 770 from Rs 870.
• New channel launches for long-term ad-revenue boost.
• Multiple catalysts for growth in subscription revenues.
• Cut earnings estimates by 3-4% to factor in higher content costs.

CLSA on GAIL India

• Maintained ‘Buy’; cut price target to Rs 420 from Rs 465.
• U.S. LNG arbitrage may stay negative through 2019.
• Upcoming quarterly results may be quite weak.
• Futures suggest U.S. LNG will be at significant premium to Asian spot LNG price.

BofAML on Maruti Suzuki

• Maintained ‘Underperform’ with a price target of Rs 6,850
• Management commentary suggests that volumes remains weak despite recent drop in fuel prices.
• Urban demand remains weak; incentives continue to rise as well.
• With weak pricing, EPS risks remain; Despite recent correction, stock remains expensive.

Citi on Indian Steel

• Falling steel prices, rising leverage and valuations make India steel unattractive.
• Expect steel prices to normalise in 2019 as China demand slows.
• Tata Steel: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 440 from Rs 620.
• JSW Steel: Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 290 from Rs 410.
• SAIL: Downgraded to ‘Sell’ from ‘Neutral’; cut price target to Rs 40 from Rs 72.