All You Need To Know Going Into Trade On Jan. 10

The rally in global equities showed signs of stalling on Thursday, with Asian stocks opening mixed.

Equities slipped in Japan, while they were little changed in South Korea and Australia.  The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.23 percent to 10,900.50 as of 6:50 a.m.

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Here’s a quick look at all that could influence equities today.

U.S. Market Check

• U.S. stocks rose as investors cheered the dovish approach discussed in minutes from the latest Federal Reserve meeting, but the gains were muted by concerns that the partial shutdown of the U.S. government will continue for some time.
• The yield on 10-year Treasuries held at 2.71 percent.

Asian Cues

• Japan’s Topix index fell 0.9 percent.
• Australia’s S&P/ASX 200 Index and South Korea’s Kospi were little changed.
• Hong Kong’s Hang Seng Index futures gained 0.2 percent.
• S&P 500 futures ticked 0.2 percent lower.

Commodity Cues

• West Texas Intermediate crude slipped 0.4 percent to $52.16 a barrel, after surging 5.2 percent to the highest in a month.
• Brent crude clocked its longest winning streak in over 18 months, closed 4.63 percent higher at $61.44 per barrel.
• Gold traded at $1,292.11 an ounce.

London Metal Exchange

• Aluminium ended lower for the second day, down 0.64 percent.
• Copper resumed rally after a one-day blip, up 0.88 percent.
• Lead ended higher for the fourth day, up 0.15 percent.
• Zinc resumed rally after a one-day blip, ended 0.28 percent higher.
• Tin ended higher for the third day, up 0.63 percent.
• NIckel ended higher for the fourth day, up 0.63 percent.

Indian ADRs

Stocks To Watch

• Yes Bank’s board of directors said they had finalised names of potential candidates for the position of Managing Director, Chief Executive Officer. They will submit their application on Jan. 10 seeking the Reserve Bank of India’s approval.
• Ashok Leyland bagged orders for 2,580 buses from three state transport undertakings. The company also acquired 12.5 percent additional stake in Ashley Aviation for Rs 25.5 lakh, to increase its holding to 88.75 percent.
• Adani Enterprises: Government of Andhra Pradesh signed a memorandum of understanding with Adani Group to build Data Center Parks up to 5GW capacities over the next twenty years. Adani Group says that it will invest over Rs 70,000 crore over the afore mentioned time frame.
• HUDCO Loan Sanctions (Dec. 31) were up 2.4 times at Rs 12,116 crore versus Rs 5107 crore on a year to date basis, while loan releases up 66 percent at Rs 18,850 crore versus Rs 7,743 crore.
• Government of India is expected to cut levies on real estate and exempt some small businesses from paying goods and services tax on Jan. 10. Prime Minister Narendra Modi also proposed slashing rates on under-construction apartments to 5 percent from 12 percent. (Bloomberg News)
• AGC Networks’ Singapore arm completed the acquisition of the U.S. based digital solutions provider ‘Black Box Corporation’. The company said the combined entity will add $600 million to the company’s revenue and strengthen its presence across more than 25 countries.
• Tata Steel BSL board approved issuing non-convertible redeemable preference shares up to Rs 12,000 crore and/or issue convertible preference shares up to Rs 12,000 crore to Tata Steel.
• Vakrangee said that no irregularities were made in the Preliminary Findings reported by the Ministry of Corporate Affairs. But some observations were made in such findings such as whether funds from Franchisee to be considered as Deposits or not and certain disclosure requirement with respect to financials as per Schedule III of the Companies Act, 2013. The company stated that after they give these explanations then Ministry of Corporate Affairs will release the final report.

Nifty Earnings To Watch

• Tata Consultancy Services

Other Earnings To Watch

• Bandhan Bank
• Goa Carbon

Earnings Reaction To Watch

Delta Corp (Q3, YoY)

• Revenue up 27 percent at Rs 205.8 crore.
• Net profit up 13 percent at Rs 50.5 crore.
• Ebitda up 22.3 percent at Rs 84 crore.
• Margin at 40.8 percent versus 42.4 percent.

Bulk Deals

Shalimar Paints

• Porinju Veliyath run Equity Intelligence India acquired 3 lakh shares or 1.33 percent equity at Rs 67.17 each.
• Atul Goel sold 3.36 lakh shares or 1.49 percent equity at Rs 67.38 each.
• Rajasthan Global Securities sold 2.55 lakh shares or 1.13 percent equity at Rs 67.3 each.

Matrimony.Com

• Marathon Edge India Fund acquired 4.14 lakh shares or 1.83 percent equity at Rs 470 each.
• Small Cap World Fund sold 4.16 lakh shares or 1.83 percent equity at Rs 470 each.

IOL Chemicals and Pharma

• Oregon Public Employees Retirement System acquired 3.03 lakh shares or 0.54 percent equity at Rs 196.88 each.

Supreme Industries

• Nalanda India Fund sold 12 lakh shares or 0.94 percent equity at Rs 1,034 each.

Alert: Nalanda India Fund is run by former Managing Director of Warburg Pincus India-Pulak Prasad.

Trading Tweaks

• Tata Investment Corporation ex-date for share buy-back.
• Acrysil ex-date for share split from Rs 10 to Rs 2 per share.
• Bharat Road Network price band revised to 5 percent.

Insider Trading

• Jay Bharat Maruti promoter Super Auto Industries sold 12,000 share between Dec. 13-19.
• Confidence Petroleum India promoters acquired 3.21lakh shares between Jan. 1 and 4.
• Astra Microwave Products promoter and director C. Prameelamma sold 51,000 shares from Jan. 3-7.
• Jindal Stainless promoter and director Abhuday Jindal acquired 28,000 shares from Jan. 7-8.

(As reported on January 9)

F&O Cues

• Nifty January futures closed trading at 10,878, premium of 23 points.
• Max open interest for January series at 11,000 strike value call, (open interest at 38.1 lakh shares)
• Max OI for Jan series at 10,500 strike value put, (open interest at 38.5 lakh shares.)

Stocks In F&O Ban

• Adani Power
• Jet Airways

Put-Call Ratio

• Nifty PCR at 1.43 versus 1.41
• Nifty Bank PCR at 1.4 versus 1.3

Brokerage Radar

Emkay on Delta Corp

• Maintained ‘Buy’ with a price target of Rs 380.
• December quarter was inline; Robust Casino performance.
• Online business ramp-up on expected lines.
• Rising footfalls and improving gross gaming revenue to benefit.

Kotak on Metals

• Expect demand to be soft in CY19 in China and globally.
• Aluminum fundamentals—large capacities in losses, but weak demand can keep prices subdued.
• Zinc—expect more supplies in 2019, but markets in tight balance.
• Vedanta: Maintained ‘Buy’; cut price target to Rs 290 from Rs 330.
• Hindalco: Maintained ‘Buy’; cut price target to Rs 280 from Rs 330.
• NALCO: Maintained ‘Buy’; cut price target to Rs 82 from Rs 87.
• Hindustan Zinc: Maintained ‘Reduce’; cut price target to Rs 245 from Rs 265.

On IndusInd Bank

CLSA

• Maintained ‘Buy’ with a price target of Rs 1,910.
• Slippages rise and IL&FS will be back-ended to Q4.
• Healthy growth in operating profit but CASA growth needs to improve.
• Normalisation of slippage and uptick in CASA growth key.

Axis Capital

• Maintained ‘Buy’; hiked price target to Rs 2,000 from Rs 1,950.
• Expect robust loan growth to continue given adequate capitalization and liquidity tightening in NBFCs.
• Re-pricing and borrowing mix to support NIM at current level.
• Offers decent risk-reward as merger with Bharat Financials will help increase share of retail business.

IDFC Securities

• Maintained ‘Outperform’; cut price target to Rs 1,820 from Rs 1,935.
• Q3 – inline, but Q4 credit cost to be substantially higher.
• Expect Q4 provisions to be higher as the haircut on IL&FS would be 60 percent.
• Maintain rating after sharp correction since Q2 earnings and strong loan and fee growth.