All You Need To Know Going Into Trade On December 3
Asian markets are trading flat this morning as the rally in global equities appears to take a pause near record highs.
Benchmark indices in Japan are flat while those in Australia are trading with modest gains.
The U.S. Dollar touched a more-than two-year low, treasury yields ticked lower while oil prices declined.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, was little changed at 13,139 as of 6:55 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 currently trading 30 points lower. The index gained 0.2% on Wednesday.
- House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer called for immediate talks and said a bipartisan $908 billion aid proposal should be the foundation for negotiations.
- European Union’s chief Brexit negotiator Michel Barnier reportedly told envoys the outcome of any deal is still too close to call.
- “The message here really is that better days are ahead and that dips and consolidations are eminently buyable,” Alicia Levine, chief strategist at BNY Mellon Investment Management told Bloomberg TV.
- Yield on the 10-year treasuries stood at 0.93%.
- West Texas Intermediate crude fell 0.6% to $45 per barrel.
Get your daily fix of the global markets here.
Stocks To Watch
- HDFC Life: A unit of Standard Life Aberdeen Plc is selling 27.8 million shares in the company through a single large deal, according to terms of the deal accessed by Bloomberg. Shares are being offered between Rs 605 -636.5 each. Price range represents a discount of 0.03% to 4.98% to Wednesday’s closing price. There is a lockup on Standard Life until March 29, 2021. Bank of America is sole bookrunner.
- Bharti Infratel: Nettle Infrastructure Investments, a wholly-owned subsidiary of Bharti Airtel, acquired additional equity stake of 4.94% in the company worth Rs 2,882.32 crore. Nettle's stake now stands at 18.62% while Bharti Airtel now holds over 41% stake in Bharti Infratel.
- Wipro: Won a multi-year contract from Verifone to drive agility across its cloud services offerings. Wipro will develop new features, capabilities and interfaces for Verifone’s Cloud Services offerings, enabling seamless and flexible transaction processing for the company.
- Good Year: To consider declaration of interim dividend for the Financial Year 2020-21 on December 7. The record date for the same has been set at December 15.
- SpiceJet: Having experienced success in cargo operations during the pandemic, the company intends to expand it considerably over the next two years, said Chairman and Managing Director, Ajay Singh in annual report.
- Raymond: Wholly-owned subsidiary Silver Spark Apparel has entered into a share transfer agreement to divest its entire stake in its own wholly-owned subsidiary Dress Master Apparel. This will be done for a cash consideration of Rs 19.07 crore and the transaction is likely to be completed within two months from the date of signing. Buyers Monisha Monnappa Bachangada and Bachangada Nachappa Monnappa do not belong to any promoter group or promoter entity.
- Mahindra & Mahindra: CARE Ratings reaffirmed AAA rating on long-term bank facilities of Rs 1,402.42 crore and A1+ rating short-term bank facilities of Rs 38.58 crore.
- Jindal Stainless: Made timely repayment of interest and principal obligations on the Non-Convertible Debentures issued by the company.
- Trident: Has issued Commercial Paper worth Rs 50 crore. The maturity date for the same has been set at February 2, 2021. The coupon/interest offered is 4.75% per annum.
- Bharti Infratel: Manish Dawar will not be able to join the company as CFO due to 'unavoidable reasons.'
- BHEL: Dada Dhuniwale Khandwa Power Limited - a Joint Venture company of BHEL and Madhya Pradesh Power Generation Company Limited, which was under liquidation, has been dissolved.
- Karur Vysya Bank: ICRA reaffirmed A1+ rating on certificate of deposit programme.
- Gujarat Ambuja Exports: CRISIL has revised (upgraded) its rating on the bank facilities of the company. The long-term rating has been upgraded from A+/Positive to AA-/Stable and short term rating has been upgraded from A1 to A1+.
- Burger King IPO: Issue fully subscribed on the first day of bidding. Overall subscription stands at 3.14 times. Institutional portion subscribed 0.17 times, non-institutional portion subscribed 0.72 times while retail portion subscribed 15.68 times.
Morgan Stanley On Larsen & Toubro
- Overweight rating maintained
- Price target raised to Rs 1,387 from Rs 1,211
- Increased visibility of public capex bouncing back in FY22
- National infra pipeline provides good visibility until FY25
- Catalysts to watch out for: Stronger execution, stronger order inflows, commencement of state orders, lower losses in Hyderabad metro, increase in local procurement of defence equipment
- Remains top pick in Indian Industrials
Nomura On Voltas
- Buy rating maintained
- Price target of Rs 980
- Management said festive demand has been good
- More scope to gain market share in AC segment from current levels
- Voltbek is ramping up well
- AC business can sustainably trade in the 40-45x PE range depending on market share gains and profitability
- Remains top pick in the consumer durables space
Morgan Stanley On Indian Steel
- Large steel players have announced price hikes of Rs 2,000-2,500 per tonne across product portfolios
- HRC prices in India have moved up by Rs 12,000-13,000 per tonne while long product prices have increased by $110-120 per tonne
- Dealer checks suggest that there is potential for another hike in mid-December
- Current Indian HRC prices are at a 6% discount to import parity prices from China
- Tata Steel, SAIL likely to be biggest beneficiaries of current price hikes, given backward integration into captive iron ore mines
- JSPL to also benefit in the short-term until it is able to consume its pre-paid iron ore inventory
- Indian steel companies are well placed for H2FY21
- Material earnings upgrades likely if this trend would continue for a few months
Haitong On Indian Autos
- Feel the glimpse of weak demand as most players posted modest growth in November despite peak festive season
- Industry experts fear that demand may fall sharply in coming months
- Hero's 14.4% growth over a low base was disappointing, given the 27% MoM decline and management commentary of a strong festive demand
- Remain cautious on the sector given the strong rally over the last few months
- Top Underperforming stocks: TVS Motor, Eicher Motors, Ashok Leyland
Antique Stock Broking On Hindustan Zinc
- Buy rating maintained
- Price target raised to Rs 266 from Rs 256
- Volumes set to grow post expansion with reduction in costs
- Refined metal volumes to increase with firm prices
- Zinc outlook will be supported by relatively low global inventory levels and net Chinese imports
- Firm silver prices, lower costs and recovery in metal volumes to support earnings
- Increase Zinc price assumptions by ~5% for FY22/23
Pledge Share Details
- Adani Ports & SEZ: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.42 crore shares on December 1.
- Adani Transmission: Promoters Gautam Adani and Rajesh Adani) revoked pledge of 17 lakh shares on December 1.
- Adani Enterprises: Promoters Gautam Adani and Rajesh Adani revoked pledge of 40 lakh shares on December 1.
As Reported On December 2
Who’s Meeting Whom
- Eicher Motors: To meet Alchemy Capital on December 3 and ICICI Prudential Mutual Fund on December 4.
- NIIT: To participate in Asian Markets Securities conference on December 3.
- VST Tillers Tractors: To meet Stewart Investor on December 3.
- Torrent Pharma: To meet Aditya Birla Sun Life AMC and The Universities Superannuation Scheme, U.K. on December 3, and Nippon India Asset Management on December 4.
- Adani Transmission: To participate in Barclays ESG Emerging Markets Corporate Day on December 3.
- Gujarat Gas: To attend India SMID Corporate Forum & Property Day 2020 organised by Citi on December 3.
- Motherson Sumi Systems: To participate in Macquarie Momentum India 2020 conference on December 3.
- lnfibeam Avenues: To participate in Jefferies India Internet Summit on December 3.
- Advanced Enzyme Technologies: To meet Phillip Capital (India) on December 4.
- Jubilant Life Sciences: To attend Prabhudas Lilladher Pharma Day on December 3.
- Polycab India: To meet Grandeur Peak Global Advisors on December 3.
- Mindspace Business Parks REIT: To attend JM Financial Real Estate Conference on December 4.
- Tata Chemicals: Promoter Tata Sons bought 18.07 lakh shares (0.71%) at Rs 420.92 per share.
- Indoco Remedies: Dovetail India Fund bought 5 lakh shares (0.58%) at Rs 265.31 per share. OHM Juniper Longterm Fund sold 0.54% at 265.31 per share.
- Snowman Logistics: Adani Logistics sold 9.59 lakh shares (0.57%) at Rs 55.64 per share.
- Move In To ASM framework: Jai Balaji Industries, Jindal Drilling & Industries, Brooks Laboratories.
- Move In To Short-term ASM Framework: ABB Power Products And Systems India, Man Infra, Genesys International Corporation, Dewan Housing Finance Corporation.
- Move Out Of Short-term ASM Framework: Wockhardt, Apollo Pipes
- Price Band Revised From 10% To 5%: DB Realty, HCL Infosystems, Jindal Drilling & Industries.
- Price Band Revised From 20% To 10%: Subex, Vakrangee.
- AGM: Winsome Yarns, JBM Auto, PVP Ventures, GIC Housing Finance.
- Ex-buyback: Kanchi Karpooram
- Godfrey Phillips India: Promoter KK Modi Investment And Financial Services acquired 50,000 shares on December 1.
- LG Balakrishnan & Bros: Promoter V Rajvirdhan sold 41,000 shares on December 1.
- UPL: Promoter Uniphos Enterprises acquired 23,800 shares on November 27.
- Confidence Petroleum India: Promoters acquired 2.84 lakh shares between November 27 and December 1.
- Axis Bank: Promoter Specified Undertaking of The Unit Trust of India sold 36.25 lakh shares between November 26-27.
- V-Mart Retail: Promoter Hemant Agarwal sold 25,000 shares on November 26.
- Panama Petrochem: Promoters acquired 1.48 lakh shares between November 27 and December 2.
As Reported On December 2
Money Market Update
- The currency ended weaker at 73.80 against the U.S. Dollar as compared to Tuesday's close of 73.64.
- The rupee was the worst performer in Asia on Wednesday.
- Nifty December futures closed at 13,148; a premium of 35 points from 27 points
- Nifty December futures shed 2% and 2.33 lakh shares in Open Interest
- Nifty Bank December futures closed at 29,543; premium of 80 points from 45 points
- Nifty Bank December futures add 6.8% and 1 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.69
Nifty: December 3 Expiry
- Maximum Open Interest on Call side at 13,500 strike (40.6 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (41.1 lakh shares)
- Active Options: 13,250 Call (+8.2 lakh shares) and 12,850 Put (+4.1 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 13,000 strike (27.5 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (22.1 lakh shares)