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All You Need To Know Going Into Trade On December 10
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
10 Dec 2020, 08:11 AM IST 
A pedestrian wearing a protective face mask passes a luxury clothing store during coronavirus lockdown measures in the Notre Dame district of Paris, France. (Photographer: Cyril Marcilhacy/Bloomberg)
Asian markets have slipped this morning amid dimming prospects for fresh stimulus. Overnight closing on Wall Street was negative.
Benchmark indices in South Korea are facing the brunt of the losses while those in Japan and Australia are seeing more modest declines.
The U.S. Dollar was steady while treasuries ticked lower.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.7% to 13,472 as of 7:00 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.
Let’s take a look at the factors that may influence equities in today’s session:
- Futures on the Dow Jones are trading little changed. The index fell 0.35% on Wednesday. The Nasdaq snapped a 10-day winning streak.
- Facebook shares fell overnight after being sued by U.S. antitrust officials while Tesla too declined as JPMorgan Chase & Co. called it 'dramatically overvalued.'
- Talks between U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen ended without a breakthrough on Wednesday night as large gaps remain between the two sides.
- “You are probably going to get something done, but it’s probably not going to be enough to put a lot of pressure on rates overall,” Matt Brill of Invesco told Bloomberg on prospects of a stimulus package.
- Yield on the 10-year treasuries stood at 0.93%.
- West Texas Intermediate crude rose 0.3% to $45.65 per barrel.
Get your daily fix of the global markets here.
Stock To Watch:
- IRCTC: Government intends to sell 20% stake in the company through an Offer for Sale. The initial sale will be of 15% stake or 2.4 crore shares with a greenshoe option of another 5% stake or 80 lakh shares. Floor price of Rs 1,367 per share is a 15% discount to Wednesday's closing price. The OFS for non-retail investors opens on December 10 while for retail investors it opens on December 11.
- Mahindra & Mahindra: The company has said that its automotive division will be affected by the global supply shortage of micro-processors (Semiconductors) used in Electronic Control Units, supplied by Bosch. The company anticipates a reduction in production and sales volume of itself and its subsidiary MVML in the fourth quarter of FY21. The estimation of likely reduction in production / sales is not ascertainable at this stage. Tractor operations and manufacturing of three-wheelers remains unaffected due to this shortage.
- TCS: Share buyback opens on December 18 and will close on January 1, 2021. The company on October had announced plans to buyback shares worth Rs 16,000 crore at Rs 3,000 per share. The proposal was given approval by the company's shareholders in November.
- Maruti Suzuki India: To increase prices across models in January 2021. The company said that it has become imperative to pass on some of the impact of the rise in cost of the company's vehicles which was adversely impacted due to rise in various input costs.
- ICICI Securities: OFS for non-retail investors gets demand of 4.4 times the shares of offer. Bids were received at an indicative price of Rs 459.34 per share, as per Bloomberg. OFS for retail investors opens today.
- L&T Technology Services: Wins $100 million plus plant engineering engagement from a global O&G major.
- Federal-Mogul Goetze: The company's promoter plans to sell 1.15 crore shares or nearly 21% of the total equity through the OFS. The floor price of 335 rupees per share is a 4% discount to Wednesday's closing price. This OFS too opens for non-retail investors on December 10 and for retail investors on December 11. The promoter needs to bring down his stake to 75% by January 2021. As per the latest shareholding pattern, the promoter holds 96.8% stake in the company.
- REC & PFC: Brokerage house Emkay expects both companies to react negatively to the new NBFC dividend rules, says as per new norms, both NBFCs will be eligible for a ~25% dividend payout, whereas both the entities have a historic dividend payout of ~45%.
- Varroc Engineering: VarrocCorp Holding B.V., a wholly-owned subsidiary of the company, has acquired the remaining 30% stake or 60,000 equity shares of Varroc-Elba Electronics held by the other JV Partner, Elba SA, Romania for an aggregate consideration of €1.05 million. After the acquisition, Varroc Elba has become a ‘wholly-owned subsidiary’ of VarrocCorp Holding and in turn a ‘step-down subsidiary’ of the company.
- Glenmark Pharmaceuticals: Has redeemed $18,25,00,000 in aggregate principal amount of its 2021 Notes, representing approximately 91.25% of the aggregate principal amount of the 2021 Notes at the time of initial listing. As on the date of this announcement, $1,75,00,000 in aggregate principal amount of the 2021 Notes remain outstanding
- Paisalo Digital: Antara India Evergreen Fund has acquired 5.08 lakh shares of the company on December 7. The total shareholding of the fund stands at 15.04 lakh shares i.e. 5.91%.
Brokerage Radar
Credit Suisse On Vedanta
- Downgrade to neutral from outperform
- Price target raised to Rs 160 from Rs 140
- Remain watchful of steps at easing liquidity stress
- Fully utilised the loan to VRL, repayable in four installments
- Dividends can only be deferred
- Do not expect near-term liquidity issues at VRL, extension of FY22+ maturities will be crucial
- Raise FY22E EPS by 25%
- Do not see risk-reward as favourable now given VRL's overhang, despite improving fundamentals of the Indian business
PhillipCapital On Indian Life Insurers
- Initiate coverage on the life insurance sector with a positive view
- Insurers are set to leverage opportunities in the protection segment
- Non-par guaranteed products provide a cyclical opportunity, their low surrender value could pose a regulatory risk
- Improving product mix, higher persistency, and cost optimisation should continue to aid new business margins
- SBI Life offers a better risk-reward while Max Financial is a potential re-rating candidate
- Initiate coverage on HDFC Life with a buy rating and price target of Rs 750
- Initiate coverage on SBI Life with a buy rating and price target of Rs 1,100
- Initiate coverage on ICICI Prudential with a buy rating and price target of Rs 600
- Initiate coverage on Max Financial services with a buy rating and price target of Rs 800
Antique Stock Broking On Cummins India
- Upgrade to buy from hold
- Price target raised to Rs 675 from Rs 495
- Domestic sales on a gradual recovery path as demand from key end markets shows initial signs of recovery post sharp decline in H1FY21
- Exports to benefit from China+1 strategy and improved demand from data centre and 5G rollout
- CPCB IV norms can lead to further market share gains
- Well placed to take advantage given its preparedness on the technology front and market leadership position
- Raise earnings estimates by 16% and 14% respectively for FY22 and FY23E
- Factoring-in better-than-estimated recovery in business scenario and better-than-estimated margins
Pledge Share Details
- Chambal Fertilisers & Chemicals: Promoter Zuari Global created a pledge of 20 lakh shares on December 7.
- JSW Steel: Promoters JSW Techno Projects Management, JTPM Metal Traders, Sahyog Holdings, Vividh Finvest and Danta Enterprises revoked pledge of 1.28 crore shares between December 3-7.
- Adani Enterprises: Promoter Adani Tradeline revoked pledge of 27.83 lakh shares on December 7.
- Sun Pharma Advanced Research Company: Promoter Raksha Valia created a pledge of 13.40 lakh shares on December 8.
- Adani Ports & SEZ: Promoter Adani Tradeline revoked pledge of 8.82 lakh shares on December 7.
- JSW Energy: Promoter Glebe Trading revoked pledge of 44.24 lakh shares on December 8.
- Adani Transmission: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.84 crore shares on December 8.
As Reported On December 9
Who’s Meeting Whom
- GATI: To meet Edelweiss Broking on December 10.
- Syngene International: To meet Capital Research Global Investors and Novo Holdings on December 10.
- Polycab India: To meet Premji Invest on December 10 and Convergent Finance LLP on December 11.
- UPL: To meet Truist Financial Corporation, DWS Group and Jarislowsky Fraser and Co on December 10.
- Eicher Motors: To meet Temasek on December 10 and SBI Life Insurance on December 11.
- Cummins India: To meet Tata AMC on December 10.
Bulk Deals
- Snowman Logistics: Adani Logistics sold 8.85 lakh shares (0.53%) at Rs 58.17 per share.
- Nath Bio-Genes India: Anirudh Damani bought 1 lakh shares at (0.53%) Rs 287.9 per share.
Trading Tweaks
- AGM: Rushil Décor, DCM Financial Services, Advani Hotels & Resorts (India), Paras Petrofils
- Price Band Revised From 10% to 5%: Industrial Investment Trust, Indo Rama Synthetics India, Reliance Communications, Reliance Home Finance, Sintex Plastics Technology,
- Price Band Revised From 20% to 10%: Birla Tyres, Welspun Investments and Commercials.
- Move In To ASM Framework: Sequent Scientific, Reliance Home Finance, Pennar Industries, Arshiya, Birla Tyres.
- Move In To Short-term ASM Framework: Trident, Reliance Communications, Reliance Infrastructure, Goodyear India, Omaxe, Patel Engineering.
- Move Out Of Short-term ASM: Action Construction Equipment.
- Ex Buyback: Wipro, Garware Technical Fibres.
Insider Trades
- Axis Bank: Promoter Administrator of the Specified Undertaking of The Unit Trust of India sold 91.96 lakh shares between December 7-9.
- Astra Microwave Products: Promoter C. Prameelamma sold 70,000 shares on December 7.
- Texmaco Infrastructure & Holdings: Promoter Adventz Finance acquired 1.38 lakh shares on December 7.
- Sequent Scientific: Promoter Chayadeep Ventures sold 7.44 lakh shares between December 7-8.
As Reported On December 9
Money Market Update
- The rupee ended little changed at 73.56 against the U.S. Dollar on Wednesday as compared to Tuesday's close of 73.53.
F&O Cues
- Nifty December futures end at 13,576; premium of 47 points
- Nifty December futures add 1.6% and 1.94 lakh shares in Open Interest
- Nifty Bank December futures end at 30,769; premium of 60 points
- Nifty Bank December futures add 3% and 50,800 shares in Open Interest
- Nifty Put-Call Ratio at 1.92
- Out of F&O Ban: Canara Bank
- Enters F&O Ban: Punjab National Bank
Nifty: December 10 Expiry
- Maximum Open Interest on Call side at 13,700 strike (34.9 lakh shares)
- Maximum Open Interest on Put side at 13,500 strike (34.4 lakh shares)
- Active Options: 13,400 Call (-13.6 lakh shares) and 13,500 Put (+30.3 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 13,000 strike (25.1 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (38.4 lakh shares)
