All You Need To Know Going Into Trade On Jan. 2

Traders eyed a cautious start on Thursday in Asia as they assessed the latest policy move by China’s central bank and awaited data on the country’s manufacturing sector. U.S. equity futures nudged higher.

Activity is set to pick up as most global markets reopen from holiday closures on Jan. 1, though Japanese equities remain shut for the remainder of this week. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded little changed at 12,250 as of 6:56 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.

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

• Most equity markets across the globe were shut on Jan. 1 for New Year.
• Futures on the S&P 500 Index rose 0.1 percent in Hong Kong.

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Key Events/Data To Watch

• India’s first exchange-traded corporate bond—Bharat Bond ETF—controlled by the government to start trading.
• Markit India Manufacturing PMI for December to be released.
• Automakers to report their monthly sales data for December.

Stocks To Watch

• Gujarat Narmada Valley Fertilizers & Chemicals received a demand notice from Telecom Department directing the company to deposit Rs 15,020 crore before Jan. 23 in connection with V-SAT and ISP Licenses held by the company.
• Muthoot Capital Services completed securitisation transaction of Rs 145.37 crore on Dec. 31. The Company has so far raised funds of Rs 578.81 crore through securitisation/direct assignment transactions during the fiscal year 2020.
• Prakash Industries secured long term coal linkages of 1.69 lakh metric tonnes per annum for the next five years for its 6th Sponge Iron Kiln. The total long-term Coal Linkages now stand at 17.04 lakh tonnes per annum. These linkages will result in substantial cost savings in Sponge Iron production at its Integrated Steel Plant at Champa, Chhattisgarh.
• Asian Granito said that the Goods and Services Tax department conducted a search at the company’s registered office and plant offices on Dec. 31. The search operations were regarding the reversal of GST input tax credit of Rs 48 lakh for goods purchased from a vendor.
• Sintex Industries: Punjab National Bank filed for initiating insolvency proceedings against the company for Rs 1,077.62 crore. The company said in a statement that it has cumulatively defaulted on payments of Rs 2,007 crore in loans, including facilities like cash credit from banks and financial institutions. The total financial indebtedness of the company stands at Rs 6,774.9 crore and total outstanding due from banks and financial institutions stand at Rs 6,101.54 crore.
• Lemon Tree Hotels signed a license agreement for a 40 room Hotel in Dehradun.
• SAIL: December sales jumped 47 percent to 1.68 million tonnes, according to a Bloomberg report.
• Abans Enterprises completed the 100 percent acquisition in LifeSurge BioSciences.
• Future Retail will consider raising funds on Jan. 4.
• Care Ratings: LT Mutual Fund increased stake from 4.8 percent to 5.18 percent.
• Bharat Gears promoters Ultra Consultants increased stake from 8.23 percent to 15.16 percent on Dec. 30.

December Auto Sales

Eicher Motors

• VECV Sales fell 19.1 percent to 5042 units.

Tata Motors

• Domestic sales fell 12 percent to 44,254 units.
• Passenger vehicles sales declined 10 percent to 12,785 units.
• Commercial vehicles sales fell 15 percent to 34,082 units.

Catch all the updates here.

Brokerage Radar

JPMorgan on India Steel

• More steel price hikes on the way in January.
• Hikes should support steel stock performance.
• Expect very strong Q4 as coking coal prices are also weak.
• With likely price hikes, steel stocks will enter an upgrade cycle.
• Citi on Persistent Systems
• Maintained ‘Sell’; hiked price target to Rs 590 from Rs 540.
• Hike FY20-21 EPS estimate by 1-4 percent to factor in the exchange rate and operational assumption.
• Raise valuation multiple given rerating in the sector and the broader Indian market.

Citi on Mindtree

• Maintained ‘Neutral’; hiked price target to Rs 860 from Rs 800.
• Hike FY20-21 EPS estimate by 2 percent to factor in the exchange rate and operational assumption.
• Raise valuation multiple given rerating in the sector and the broader Indian market.

Emkay on Media

• Reduction in channel pricing cap will impact broadcasters only if a large proportion of subscribers shift to a-la-carte model and subscribe to fewer channels.
• Large broadcasters that have driver channels across the genres will have limited impact or risk of revenue loss due to the shift to a-la-carte.
• The impact could be in the form of lost advertisement and subscriber revenues due to non-subscription of non-driver channels.
• Believe that India will remain a bouquet subscription market.

Citi on India Equity Strategy

• 2020 outlook still appears tough although central bank stimulus could continue to support.
• In 2020, continue to see a rather challenging environment for mid-caps overall.
• Top Overweight: Financials, Healthcare, Industrials.
• Top Underweights: Consumer staples, materials (ex-Cement), autos.

Trading Tweaks

• Bharat Bond ETF to be listed on bourses.
• Arrow Textiles, Navkar Builders, Hindusthan National Glass & Industries, Max Ventures and Industries , Tejas Networks to move out of short term ASM Framework.
• AksharChem, Den Networks, Indiabulls Ventures to move into short term ASM Framework.
• Shree Renuka Sugars to move into Surveillance Measure in respect of high promoter pledge.
• Future Enterprises, Gayatri Projects, Sequent Scientific to move out of Surveillance Measure in respect of high promoter pledge.
• Dwarikesh Sugar, Dalmia Bharat Sugar price band revised to 10 percent.

Insider Trading

• JK Tyres promoters sold 50,000 shares on Dec. 30.

Money Market Update

• The rupee closed at 71.22/$ versus 71.38/$ on Tuesday.

F&O Cues

Index Futures

• Nifty January futures closed at 12,243.8, premium of 61.3 points versus 77.8 points.
• Nifty January futures open interest down 2 percent, sheds 2.4 lakh shares in open interest.
• Nifty Bank January futures closed at 32,285, premium of 182 points versus 204.4 points.
• Nifty Bank January futures open interest down 0.4 percent, sheds 53,000 shares in open interest.

Options

• Nifty PCR at 1.14 versus 1.12 (across all series)

Nifty Monthly Expiry: Jan. 2

• Max open interest on call side at 12,300 (34.8 lakh shares).
• Max open interest on put side at 12,100 (20.6 lakh shares).
• Open interest addition seen at 12,150P (+6 lakh shares), 12,100P (+5.6 lakh shares), 12,250C (+3.6 lakh shares).

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,500 (23.2 lakh shares).
• Max open interest on put side at 12,000 (35.4 lakh shares).