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All You Need To Know Going Into Trade On Dec. 9

Stocks in the news, big brokerage calls of the day, complete trade setup and much more!  

Pedestrians walk past NYSE in New York, U.S. (Photographer: John Taggart/Bloomberg)  
Pedestrians walk past NYSE in New York, U.S. (Photographer: John Taggart/Bloomberg)  

Asian stocks kicked off the week with modest gains after U.S. equities rallied Friday on better-than-expected jobs data.

Equity benchmarks opened higher in Tokyo, Sydney and Seoul. Gains were modest with the key Dec. 15 U.S.-China tariff deadline looming with no specific plan for a trade deal. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 11,942 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 continued to rebound on Friday from a sell-off sparked by a spike in trade tensions that many investors now view as negotiating bluster.
  • Crude prices held firm in Asia on Monday after OPEC and its allies agreed to enlarge production cuts and Saudi Arabia said it would go even further with its own reductions.

Get your daily fix of global markets here.

Indian ADRs

All You Need To Know Going Into Trade On Dec. 9

Stocks To Watch

  • Dish TV: Care Ratings has cut ratings for the company’s banking facilities worth Rs 850 crore to CARE D from CARE A4+. Rating revised after the company defaulted in payment of short-term loan due on Nov. 28.
  • Axis Bank: After over four years, the lender’s Chief Financial Officer Jairam Sridharan has tendered his resignation and will vacate the position after serving a three-month notice period. In a stock exchange disclosure on Dec. 6, the bank said that Sridharan had resigned from his post as group executive and CFO of the private sector bank as he would like to pursue other career opportunities. He was appointed as CFO in October 2015.
  • Equitas Holdings: Equitas Small Finance Bank approved issuance of 4.75 crore shares or 4.51 percent equity at Rs 52.68 per share aggregating to Rs 250 crore, by private placement to IIFL Group, High Conviction Fund and Trivantage Capital.
  • KNR Constructions has signed a concession agreement of HAM project with a bid cost of Rs 920 crore with NHAI.
  • ITC has acquired 11.15 percent stake in Delectable Technologies.
  • Punjab & Sind Bank: Board approved raising up to Rs 500 crore through QIP within a period of 12 months.
Opinion
India Tycoon to Tap Banks for $823 Million DMart Share Sale
  • RSWM: Board to consider raising funds via issue of equity shares on Dec. 11.
  • Altico Capital has approved a cash distribution to all lenders in proportion to their respective overdue principal outstanding and interest accrued up to September 12. The company said it has defaulted in payment of obligations since September 12, according to Bloomberg report.
  • MCX: Sanjay Wadhwa has resigned from the post of CFO with immediate effect.
  • Indian Oil Company and Can Fin Homes to list commercial papers on BSE for an issue size of Rs 4370 crore and Rs 300 crore, respectively.
  • 8K Miles Software Services: Board has appointed K Gopal Rao as the new statutory auditor of the company. Company also approved setting up of wholly-owned arm in India for catering business pertaining to Healthcare IT.
  • Reliance Capital said that it has apprised the debenture holders of their legal position. Company has requested the debenture trustee to withdraw the proceedings initiated before the debt recovery tribunal and sought for a meeting of debenture holders to consider a resolution plan.
  • Mangalore Chemicals & Fertilizers: Vistra ITCL (Trustee for Zuari Agro Chemicals) increased its pledge from 41.55 percent to 50.55 in the company on Dec. 6.
  • Bank of India: Board approved issuance of 125 crore fresh equity shares via QIP and also approved raising Rs 10,000 crore via debt.
  • Goa Carbon: November production up seven times to 15,413.9 million tonne.
  • Pokarna said that U.S. Department of Commerce has preliminarily determined anti-dumping duty of 2.62 percent on quarts surface products from company’s arm shipped to the U.S. company will take legal steps and said that it has not been engaged in dumping of quartz products in the U.S.
  • Sagar Cements: November sale down 23.46 percent to 2,41,195 million tonne.
  • TTK Prestige aims to double turnover by FY24-25, Financial express reported.
  • KNR Construction received work order of Rs 165.7 crore from Hyderabad Municipal Corporation
  • NTPC has signed term loan of Rs 5,000 crore with SBI, according to PTI report.
  • Dilip Buildcon received a completion certificate for EPC Project worth Rs 346.5 crore in Punjab.
  • Shailey Engineering Plastics said the GST authorities carried out search proceedings at the company's Rania Unit and the same has ended.
  • NBCC received government order worth Rs 621 crore in New Delhi where the company will work a project management consultant.
  • Allahabad Bank: Board approved raising Tier 2 capital of the Bank by raising bonds up to Rs 1,500 crore.
  • Oriental Bank of Commerce has reduced MCLR across various tenors with effect from Dec. 10. One Month MCLR at 7.75 percent and One Year MCLR at 8.3 percent.
  • Welspun Corp: In last one month, company has been awarded contracts for supply of 179 KMT of pipes for multiple projects on a global basis of which 161 KMT will be serviced from USA facility. The company’s order book stands at 1,459 KMT valued at approximately Rs 12,100 crore.
  • Andhra Bank: Government-owned lender, which had decided not to exercise a “call option” included in the terms of a perpetual bond issued by the bank, is rethinking its decision after pressure from investors.
  • PC Jeweller: CRISIL downgraded rating on bank facilities worth Rs 3937 crore to D from BB+ and A4+ for long term and short term. The downgrade factors in the instances of devolvement of Letter of Credits and overutilization in working capital limits for more than 30 days. The same is reflective of the fact that the liquidity profile of the group has deteriorated in past few months on account of cash flow mismatches.
Opinion
Bharti Telecom Seeks Rs 4,900 Crore FDI Nod That Will Make Airtel A Foreign Firm

Brokerage Radar

Citi Research on Jubilant Foodworks

  • Maintained ‘Buy’ with a price target of Rs 1,655.
  • Well placed in attractive Indian food services market.
  • Business momentum continues to be steady.
  • Less concerned from slowdown; valuations reasonable.

CLSA on Inox Leisure

  • Maintained ‘Buy’ with a price target of Rs 450.
  • Strong ad-revenue growth to continue.
  • Focus on organic growth and footfall monetisation continues.
  • Cautious on inorganic opportunities.

Morgan Stanley on Financials

  • Expect fairly weak 2020 for financial sector; struggle to improve balance sheet and profitability.
  • Loan growth will be slow; NPL formation will be elevated.
  • ICICI Bank and HDFC Bank are top picks.
  • Underweight on Yes Bank, RBL, IDFC First Bank, Federal Bank and Government owned banks ex-SBI.
  • Underweight on Indiabulls Housing Finance and PNB Housing Finance.

Edelweiss on SpiceJet

  • Maintained ‘Buy’ with a price target of Rs 160.
  • Sweet spot to capitalise on the opportunistic vacuum.
  • Yields are set to expand due to supply moderation.
  • SpiceJet set to win away substantial market share from Indigo.

Investec on Ceramic Industry.

  • Kajaria: Initiated ‘Buy’ with a price target of Rs 752.
  • Cera Sanitaryware: Initiated ‘Buy’ with a price target of Rs 3,214.
  • Somany Ceramics: Initiated ‘Buy’ with a price target of Rs 297.
  • Branding/Distribution to take centre stage; bundling, product extension strategies are key.
  • Earnings should remain subdued in the near-term.
  • Efficient capital allocators should see a rerating in the long run.

Trading Tweaks

  • Jain Irrigation Systems to move into ASM Framework
  • Sical Logistics, Talwalhars Better Value Fitness, Indiabulls Ventures, DHFL to move out of ASM Framework
  • Asian Oilfield Services, Jaypee Infratech, Nitco to move into short term ASM Framework
  • Allied Digital Services, HCL Infosystems, Tilaknagar Industries to move out of short term ASM Framework

Who’s Meeting Whom

  • Cipla to meet Sundaram MF, JP Morgan and other investors from Dec. 9-19
  • Tata Motors to meet ICICI Prudential MF, Tata AIG and other investors from Dec. 9-12
  • Tata Steel to meet FIL Investment Management on Dec. 13

Insider Trading

  • Alembic promoter Nirayu acquired 35,000 shares on Dec. 4
  • Nava Bharat Ventures promoter Ashwin Devineni acquired 1.3 lakh shares on Dec. 4

Money Market Update

Indian bonds may continue to reel under pressure after the worst weekly loss since April last year as a report last Thursday may show retail inflation accelerated, vindicating the central bank’s stance to keep interest rates unchanged.

Consumer prices probably rose 5.24 percent on a yearly basis in November compared with 4.62 percent gain in October, according to Bloomberg survey.

Yields on benchmark 10-year bonds rose 5bps on Friday and 20 basis points last week, most since the period ended April 21, 2018, to 6.67 percent after the central unexpectedly refrained from cutting rates last week.

In the currency market, the implied opening from the forwards suggests that the rupee may start trading at 71.28 per dollar, weaker than Friday’s close of 71.20.

Any losses in the rupee are likely to be checked by slightly better risk appetite in global markets, with Asian stocks making modest gains on Monday.

F&O Cues

Futures

  • Nifty December futures closed at 11955.7, premium of 34.2 points versus 29.3 points
  • Nifty December futures series open interest up 2 percent, adds 2.7 lakh shares in open interest
  • Nifty Bank December futures closed at 31,418.3, premium of 76.8 points versus 49.6 points
  • Nifty Bank December futures series open interest down 9 percent, sheds 1.4 lakh shares in open interest

Options

  • Nifty PCR at 1.25 versus 1.53 (across all series)

Nifty Weekly Expiry: Dec. 12

  • Max open interest on call side at 12,100 (25.3 lakh shares)
  • Max open interest on put side at 11,900 (14.4 lakh)
  • Open interest addition seen in 12,000C (+17.9 lakh shares), 12,100C (+12 lakh shares), 11,700P (+4.5 lakh shares)

Nifty Monthly Expiry: Dec. 26

  • Max open interest on call side at 12,000 (21.9 lakh shares)
  • Max open interest on put side at 12,000 (32.4 lakh shares)
All You Need To Know Going Into Trade On Dec. 9