All You Need To Know Going Into Trade On December 9
Asian equities are rising in mid-week trading after their U.S. counterparts rose to a new record on Tuesday.
Benchmark indics in South Korea are outperforming while those in Japan and Australia are trading with healthy gains.
The U.S. Dollar was steady while oil prices were little changed.
The Singapore-traded SGX Nifty, an early indicator of the Nifty 50 Index’s performance in India, rose 0.4% to 13,452 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 60 points higher. The index gained 0.35% on Tuesday. The Nasdaq 100 ended higher for the 10th day in a row - its longest winning streak in nearly a year.
- U.S. Treasury Secretary Steven Mnuchin said he presented a new $916 billion Covid-19 relief proposal to House Speaker Nancy Pelosi. Senate Majority Leader Mitch McConnell suggested setting aside some issues that have been roadblocks to a relief package.
- The pound pared declines after the U.K. dropped controversial parts of an internal bill that would have given it the power to unilaterally override the Brexit divorce treaty.
- A key sentiment indicator for U.S. stocks has reached its most bullish level in two decades. The weekly Cboe ratio of volume traded in puts versus calls fell to the lowest since July 2000 last week.
- Yield on the 10-year treasuries stood at 0.93%.
- West Texas Intermediate crude fluctuated between gains and losses, currently at $45.56 per barrel.
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Stock To Watch:
- ICICI Securities: ICICI Bank has approved selling another 2.2% stake in the broking firm through an Offer for sale. The floor price of 440 rupees per share is a 4.5% discount to Tuesday's closing price. The OFS opens for non-retail investors today and for retail investors tomorrow.
- JSW Steel: Crude steel production up 3% to 13.32 lakh tonnes in November. Average capacity utilisation in November at 89%. The company said shortage of iron ore remained a key constraint in achieving higher capacity utilisation.
- Dr Reddy's Laboratories: U.S.-based Exelixis has in-licensed the company's wholly-owned subsidiary Aurigene's Novel CDK7 inhibitor and has filed an investigational new drug application with the U.S. FDA for phase I clinical trials of the molecules used in treatment of advanced solid tumours. Exelixis will make an option exercise payment of 12 million dollars to Aurigene, who will be eligible for clinical development, regulatory and sales milestones as well as royalties on sales. Aurigene will also retain limited development and commercial rights for India and Russia.
- TCS: Launches new blockchain-based, digital bank guarantee platform in Israel. The platform looks to improve cycle times, reduce fraud and enhance transparency. Bank Hapoalim - Israel's largest bank that manages more than 30% of the total bank guarantees in the country, has signed up as the anchor customer for the platform.
- Gujarat Industries Power: The district collector of Kutch has approved the allotment of land measuring 4750 hectares to develop a renewable energy park having a capacity of 2,375 MW. This will be for a period of 40 years on a leasehold basis with a scheduled completion of 50% of the total capacity within a period of three years and the entire capacity within a period of five years.
- Tata Steel: S&P affirms company's rating as B+. Outlook for the company and its subsidiary ABJA Investment has been revised to stable from negative. The stable outlook reflects that the company's earnings would improve over the next 18 months, such that its key financial metrics would be at levels appropriate for the current rating. S&P also said that while Tata Steel has adequate headroom at the current rating, but high leverage limits further upside.
- Hindustan Aeronautics Ltd: ICRA and CARE Ratings have reaffirmed A1+ ratings on the proposed Commercial Paper issue worth Rs 2,500 crore.
- IRB Infrastructure: Acuite Ratings & Research has assigned AA-/Stable rating on total bank facilities worth Rs 2,600 crore.
- Yes Bank: Brickwork Ratings upgraded the rating of Tier-I Subordinated Perpetual Bonds (Basel II) to BB+/Stable from D. The rating upgrade factors in improvement in capitalisation ratios of the bank, strong shareholder base and experienced board members.
- Indian Bank: Raised tier-1 capital fund worth Rs 1,048 crore through private placement of Basel-III compliant AT-1 perpetual bonds. Coupon payable annually stands at 8.44%.
Credit Suisse On ITC
- Upgrade to outperform from neutral
- Price target raised to Rs 255 from Rs 200
- FMCG margins now within sight of 'acceptable' levels
- See a path towards 12% Ebitda margin over next five years
- Core brands like Aashirvaad and Sunfeast continue to mature
- One of the highest total addressable market expansion prospects among FMCG peers
- Should trade at the top end of the global cigarette valuation range
- Key Risk: Possibility of cigarette tax hike in FY22
CLSA On Zee Entertainment
- Buy rating maintained
- Price target of Rs 280
- TV viewership now higher than pre-Covid levels
- Top-19 advertisers' ad insertions have recovered to all-time highs and are up 38% year-on-year
- PE offers value despite stock gaining over 70% from March lows
- Should emerge stronger with returning ad growth and improved board of directors along with net cash balance sheet
Morgan Stanley On Auto PLI Scheme
- Reports suggest that the PLI scheme will offer export incentives to large exporters
- This will support earnings of OEMs, improve industry utilisation and in-turn, encourage the next auto capex cycle
- See Bajaj Auto, TVS Motor and Bharat Forge as beneficiaries of export incentives
- Exports can see earnings upside for FY22
- Assuming a 2% incentive on export sales, FY22E Ebitda can go up by 5-7% for Bajaj, TVS and Bharat Forge.
- Remain overweight on Bajaj Auto
Nomura On November MF Flows
- Strong market performance aided 12% year-on-year growth in equity AUMs despite weak flows
- MF AUM drags have reduced considerably
- We find risk-reward turning favourable for AMCs at the margin, driven by buoyant capital markets
- Pressure on equity flows and a moderating SIP book remain key monitorables in the near-term
Pledge Share Details
- Chambal Fertilisers & Chemicals: Promoter Zuari Global revoked pledge of 23.40 lakh shares on December 4.
- Sun Pharma: Promoter Shanghvi Finance created a pledge of 20 lakh shares on December 3.
- Emami: Promoters Bhanu Vyapaar and Diwakar Viniyog revoked pledge of 14 lakh shares between December 3-4.
- Adani Ports & SEZ: Promoter Adani Tradeline revoked pledge of 58 lakh shares on December 7.
- Adani Transmission: Promoters Gautam Adani and Rajesh Adani revoked pledge of 1.60 crore shares on December 7.
- JSW Energy: Promoters Danta Enterprises and Glebe Trading revoked pledge of 93.50 lakh shares between December 4-7.
- SMS Pharma: Promoter Potluri Infra Projects created a pledge of 8 lakh shares (0.95%) on December 7 in favour of Vistra ITCL India.
As Reported On December 8
Who’s Meeting Whom
- Affle (India): To meet Franklin Templeton, Aditya Birla Asset Management, Kotak Mahindra Asset Management, L&T Mutual Fund and HDFC Life Insurance on December 9. To meet GIC Singapore on December 10.
- Gland Pharma: To meet Nirmal Bang Institutional Equities on December 9. To meet FSSA Investment Managers and Motilal Oswal Asset Management on December 10.
Mahindra Logistics: To meet Anand Rathi Financial Services on December 10.
- Tata Steel Long Products: To meet HDFC Mutual Fund on December 10.
- Blue Star: To meet FSSA Investment Managers on December 10.
- KEC International: To meet Edelweiss Broking on December 10.
- Carborundum Universal: To participate in an investor call organised by Edelweiss on December 9.
- Laurus Labs: To participate in JP Morgan - India Emerging Opportunities Forum 2020 on December 9.
- Lemon Tree Hotels: To participate in the Ambit’s Travel Ecosystem Conference on December 9.
- Crompton Greaves Consumer Electricals: To meet Alchemy Capital on December 10 and Axis Mutual Fund on December 21.
- Majesco: Edelweiss ELSS Fund bought 1.58 lakh shares (0.53%) at Rs 978.01 per share.
- Likhitha Infrastructure: Adroit Financial Services sold 1.08 lakh shares (0.55%) at Rs 158.69 per share and 6,120 shares at Rs 159.04 per share. Kirtan Rupareliya sold 2.24 lakh shares (1.13%) at Rs 157.03 per share. Hsquare Globetrade sold 1.33 lakh shares Rs 157.02 per share.
- AGM: Religare Enterprises, National Fertilizers, Tamilnadu Telecommunication, Excel Realty N Infra, SPML Infra, Blue Chip India, JIK Industries, S.A.L. Steel, Shah Alloys, Pritish Nandy Communications.
- Move In To ASM Framework: Oriental Hotels, MEP Infrastructure Developers, Hindusthan National Glass & Industries, Artemis Medicare Services.
- Move In To Short-term ASM Framework: ADF Foods, Lemon Tree Hotels, Kabra Extrusiontechnik, Jaiprakash Power Ventures, Tejas Networks, SORIL Infra Resources, Chalet Hotels.
- Move Out Of Short-term ASM: OnMobile Global, Plastiblends India.
- Price band revised from 20% to 10%: Jaiprakash Associates, Jaypee Infratech, Suven Life Sciences, Adhunik Industries.
- Bonus Issue Ex Date: Hatsun Agro Product.
- Godrej Industries: Promoter Anamudi Real Estates acquired 1.09 lakh shares between December 2-3.
- NRB Bearings: Promoter Harshbeena Zaveri acquired 82,959 shares between December 3-4.
- Astra Microwave Products: Promoter C. Prameelamma sold 60,000 shares between December 3-4.
- Religare Enterprises: Promoter Nimrita Parvinder Singh acquired 25,000 shares between November 30-December 4.
- Texmaco Rail & Engineering: Promoter Adventz Finance acquired 1.5 lakh shares on December 4.
As Reported On December 8.
Money Market Update
- The currency ended at 73.52 against the U.S. Dollar, as compared to Monday's close of 73.91.
- The rupee was the best performing currency in Asia on Tuesday.
- Nifty December futures end at 13,424; premium of 31 points
- Nifty December futures add 0.3% and 41,775 shares in Open Interest
- Nifty Bank December futures end at 30,316; premium of 54 points
- Nifty Bank December futures shed 3.1% and 53,575 shares in Open Interest
- Nifty Put-Call Ratio at 1.83
- Stocks In F&O Ban: Canara Bank
Nifty: December 10 Expiry
- Maximum Open Interest on Call side at 13,500 strike (39 lakh shares)
- Maximum Open Interest on Put side at 13,200 strike (36 lakh shares)
- Active Options: 13,700 Call (+9.7 lakh shares) and 13,400 (+9.7 lakh shares)
Nifty: December 31 Expiry
- Maximum Open Interest on Call side at 13,000 strike (26.02 lakh shares)
- Maximum Open Interest on Put side at 13,000 strike (35.9 lakh shares)