All You Need To Know Going Into Trade On December 7
Asian markets have begun the new trading week on a positive note. Peers on Wall Street ended at a record high on Friday.
Sentiment gets a boost on benign outlook for policy support and signs that the deployment of a Covid-19 vaccine may be nearing.
The pound retreated as investors questioned how close Britain and the European Union are to sealing a final Brexit trade agreement.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, fell 0.4% to 13,272 as of 7:55 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 little changed. The index gained 0.8% on Friday.
- U.S. Payroll figures on Friday showed a less-than-forecast increase, fueling hopes for more federal relief.
- A senior U.S. health official said that all Americans who want a vaccination should be able to get one by the second quarter of next year, and that vaccinations can begin as early as Friday.
- “Investors are yet to fully discount the potential for a very strong economic and profit recovery next year as stimulus combines with vaccines,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd.
- Yield on the 10-year treasuries stood at 0.97% - near the highest level in nine months.
- West Texas Intermediate crude fell 0.4% to $46.08 per barrel.
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Stocks To Watch
- NMDC: Government of India reaches an agreement with the Government of Karnataka and the Ministry of Steel to extend the Donimalai Iron Ore Lease. The mine has a total concession area of 597.54 hectares and estimated resource of 149 MT. This will increase the annual iron ore production in the country by 7 MTPA. Based on the existing prices, the company believes that the Donimalai Iron ore mine will contribute around Rs 400 crore to the state exchequer, during the ongoing financial year.
- APL Apollo Tubes: Company sets December 16 as the record date for splitting 1 equity share of face value of Rs 10 into five equity shares having a face value of Rs 2 each.
- Apollo Tyres: Has allotted 6.3 crore equity shares pursuant to conversion of Compulsorily Convertible Preference Shares to Emerald Sage Investments. Post the allotment, the cumulative ownership of Warburg Pincus and affiliates is approximately 18%.
- State Bank of India: The PTI reported that the Central Bureau of Investigation carried out search operation at three locations in Delhi in connection with an alleged Rs 1,800-crore fraud at State Bank of India. CBI had earlier booked Jay Polychem in connection with the alleged fraud. The agency had received a complaint from SBI against the Lajpat Nagar-based company and its promoters and directors for causing a loss of Rs 1,800.72 crore to a consortium led by the bank.
- ONGC: The company's overseas arm ONGC Videsh has made a significant strike of oil in its onshore block CPO-5, Colombia. ONGC Videsh is the operator in the block with a 70% stake. This is the fourth commercial find in the block by the company. The well is currently flowing under short-term testing with multi bean study for further evaluation.
- Tata Consumer Products: Step-down subsidiary Earth Rules Pty Ltd., Australia has entered into an asset sale and purchase agreement for the sale of its MAP Coffee Business to Buccheri Group. The transaction will be for a total consideration of 1.25 million Australian Dollars or Rs 6.74 crore. Post the transaction, the seller will continue to remain a step-down subsidiary of the company.
- Likhita Infrastructure: Gets order of Rs 112.88 crore from IHB Pvt. Ltd. - a JV company of IOC, HPCL and BPCL for laying pipeline in the Gujarat region which is a part of the Kandla-Gorakhpur Pipeline Project.
- Deepak Fertilisers: Delhi High Court has ordered the Ministry of Chemicals and Fertilisers to return the bank guarantee worth Rs 310.5 crore to Smartchem Technologies, a wholly-owned subsidiary, within a period of four weeks.
- Maruti Suzuki India: Production for the Month of November up 5.9% year-on-year to 1,50,221 units.
- Bharat Dynamics: Indian Airforce successfully test fired the Akash Missiles, manufactured by the company.
- Eicher Motors: Volvo Eicher Commercial Vehicles commences production at its new truck plant in Bhopal.
- CG Power: Board of Directors approve issuance of unlisted, unsecured, unrated, redeemable NCDs of the company of face value of Rs 1 lakh each, aggregating to Rs 200 crore. The tenure of the NCDs will be five years from the deemed date of allotment.
- IL&FS Transportation: Has entered into a Share Purchase Agreement with Cube Highways and Infrastructure II Pte, to sell and transfer the entire equity shareholding held by the company in Chenani Nashri Tunnelway, a wholly-owned subsidiary of the company. The total consideration received from this transaction is Rs 3,906.7 crore and is likely to be completed by March 2021. This has not been done on a slump sale basis.
- Jagran Prakashan: Issued and allotted 600 units of Commercial Paper worth Rs 5 lakh each, aggregating to an issue size of Rs 30 crore, at an interest of 4.10%. The maturity date for the same is March 4, 2021.
- Sun Pharma: Pledged 67.40 lakh shares on November 26, 2020 in favour of Bajaj Finance Ltd. in respect of loan availed by the third party.
- ITD Cementation India: ICRA Limited, has reaffirmed the long-term rating for the Line of Credit at A. The outlook on the long-term rating has been revised to Negative from Stable. ICRA has also reaffirmed the short-term rating for the captioned LOC at A1.
- Bannari Amman Sugars: CARE Ratings has reaffirmed the credit ratings for the credit facilities availed by the company from bankers. Reaffirmed A+ rating on long term fund based credit facilities of Term Loans of Rs 93.50 crore and Cash Credit of Rs 745 crore. Reaffirmed A+ rating on long term/short term non-fund based limits of Rs 15.40 crore. Reaffirmed A1+ rating on short term fund based facility of Rs 10 crore.
CLSA On Indian I.T.
- Strong deal pipeline across segments in the global technology ecosystem
- Stable I.T. spends among large U.S. BFS firms
- 5G rollout on track at global telecom service providers
- Cross-currency expected to be a minor tailwind in Q3FY21
- Strong earnings defence by most I.T. stocks appears priced-in, especially for midcap names
- Incremental consensus EPS upgrades to be revenue-led
- Deal wins / order bookings in Q3FY21 to be a key trigger
- Elevated valuations could be a deterrent and may induce a time correction
- HCL Technologies, Infosys, Tech Mahindra are preferred bottom-up stock picks
Jefferies On Adani Ports
- Buy rating maintained
- Price target raised to Rs 525 from Rs 475
- Acquired ports have given significantly better returns
- KPCL is a value accretive acquisition
- Revise FY21-23E estimates by 3-7% to factor in the November 2020 volume data
- Promoter pledge reduction and efficient cash flow utilisation key for further re-rating
- Key Risks: Sustainable sharp slowdown in port volumes, divergent trends on promoter pledges Vs management commitment
Jefferies On ICICI Bank
- Buy rating maintained
- Price target raised to Rs 600 fron Rs 570
- Bank is approaching clients with product suites and not just products
- Ecosystem banking is a key focus area
- Business is getting better and provisions are adequate
- Management says H2FY21 should see higher downgrades and Covid restructuring for corporate/SME loans would be almost 1% of total loans
- See earnings recovery from FY22 with improved growth and lower credit costs
Motilal Oswal On ICICI Bank
- Buy rating maintained
- Price target raised to Rs 630 apiece from Rs 525 apiece
- Gaining market share with strong risk control
- Technology remains the key growth driver
- Firmly placed to deliver healthy sustainable growth
- Remains one of the top ideas in the BFSI space
- See RoA/RoE of 1.7% and 15.2% respectively for FY23E
Pledge Share Details
- Adani Enterprises: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.08 shares between December 2-3.
- Adani Transmission: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.15 crore shares on December 3.
- JSW Energy: Promoter Danta Enterprises revoked pledge of 2 lakh shares on December 1.
- Jubilant FoodWorks: Promoter Jubilant Consumer revoked pledge of 3 lakh shares December 2.
- Solara Active Pharma Sciences: Promoter Chayadeep Properties invoked pledge of 5.15 lakh shares on December 1.
- Chambal Fertilisers & Chemicals: Promoter Zuari Global revoked pledge of 3.4 lakh shares on December 2.
- LG Balakrishnan & Bros: Promoter V Rajvirdhan revoked pledge of 1.98 lakh shares on December 2.
- Steel Strips Wheels: Promoter Chandigarh Developers revoked pledge of 1 lakh shares on December 3.
Who’s Meeting Whom
- Mahindra & Mahindra: To meet Banyan Tree Advisors on December 7, Goldman Sachs Securities on December 9 and Nomura Securities December 11.
- Computer Age Management Services: To meet Siddhartha Asset Management, Singapore on December 7 and Invesco Canada on December 8.
- Bajaj Electricals: To meet PhillipCapital (India) on December 8.
- EIH: To attend Ambit’s Travel Ecosystem Conference on December 8.
- ADF Foods: Authum Investment & Infrastructure bought 1.16 lakh shares (0.58%) at Rs 518.43 per share and sold 2 lakh shares (1%) at Rs 501.2 per share. Infinity Holdings bought 4 lakh shares (2%) at Rs 501.2 per share. Alpana Dangi sold 2 lakh shares (1%) at Rs 501.2 per share.
- Apollo Pipes: Rajasthan Global Securities bought 1.13 lakh shares (0.87%) at Rs 680 per share.
- Tata Chemicals: Promoter Tata Sons bought 25.71 lakh shares (1.01%) at Rs 471.88 per share.
- AGM: ATN International, DiGiSPICE Technologies
- Move In To ASM Framework: Dewan Housing Finance Corporation, JSW Ispat Special Products, Sanghvi Movers, HCL Infosystems, Ind-Swift Laboratories, Hathway Cable & Datacom.
- Move Out Of ASM Framework: Prince Pipes And Fittings, Xchanging Solutions, IOL Chemicals & Pharmaceuticals.
- Move In To Short-term ASM Framework: Olectra Greentech, Sundaram-Clayton, Varroc Engineering, Borosil Renewables, Edelweiss Financial Services.
- Move Out Of Short-term ASM Framework: Equitas Holdings, Future Lifestyle Fashions, Future Retail, HCL Infosystems, Dewan Housing Finance Corporation.
- Sudarshan Chemical Industries: Promoter NJR Finance and Archana Rathi sold 18.18 lakh shares on December 3.
- Axis Bank: Promoter Administrator of the Specified Undertaking of The Unit Trust of India sold 61.43 lakh shares between December 2-4.
- Filatex India: Promoter Yaduraj Bhageria acquired 15 lakh shares on December 2.
- Arvind: Promoters Arvind Farms and Adore Investments sold 4.49 lakh shares between December 2-3.
- Tata Motors: Promoter Tata Sons acquired 22.02 lakh shares on December 1.
- Chalet Hotels: Promoter Palm Shelter Estate Development acquired 2.28 lakh shares on December 3.
As Reported On December 4
Money Market Update
- The rupee ended stronger at Rs 73.79 against the dollar on Friday versus Rs 73.92 against the dollar on Thursday.
- Nifty December futures ended at 13,322; premium of 64 points
- Nifty December futures add 4.6% and 5.47 lakh shares in Open Interest
- Nifty Bank December futures ended at 30,265; premium of 213 points
- Nifty Bank December futures add 10% and 1.6 lakh shares in Open Interest
- Nifty Put-Call Ratio at 1.74
- Stocks In F&O Ban: Canara Bank
Nifty: December 10 Expiry
- Maximum Open Interest on Call side at 13,500 strike (26.1 lakh shares)
- Maximum Open Interest on Put side at 13,100 strike (30.3 lakh shares)
- Active Options: 13,500 Call (+10.7 lakh shares) and 13,200 Put (+22.7 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 13,000 strike (27.1 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (30.8 lakh shares)