All You Need To Know Going Into Trade On Jan. 2
Asian stocks look set to kick off 2019 on a muted note, with a holiday in Japan likely to dampen volumes, after global stocks finished their worst year since the financial crisis.
The benchmark index in Australia edged higher, while futures relative to fair value suggest slight declines in Hong Kong. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.1 percent to 10,956 as of 6:40 a.m.
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Here’s a quick look at all that could influence equities today.
- The S&P/ASX 200 Index rose less than 0.1 percent.
- Futures on Hong Kong’s Hang Seng Index relative to fair value point to an early drop of 0.1 percent.
- S&P 500 futures rose 0.4 percent. The S&P 500 Index rose 0.9 percent Monday.
- West Texas Intermediate crude rose 0.8 percent to $45.77 a barrel.
- Gold dipped 0.1 percent to $1,281.50 an ounce.
Also read: U.S. Gulf Refiners Feast on Domestic Oil
Key Events To Watch This Week
- 10:30 a.m.: Nikkei India Manufacturing PMI for Dec., prior 54.0.
- The U.S. December jobs report is due Friday, Jan. 4.
- Fed Chair Powell is interviewed with predecessors Janet Yellen and Ben Bernanke at the annual meeting of the American Economic Association Friday. Atlanta Fed President Raphael Bostic joins a panel on long-run macroeconomic performance.
Stocks To Watch
- NMDC said it would consider share buyback on Jan. 8.
- Chambal Fertilisers and Chemicals declared commencement of commercial production from Rajasthan plant with effect from Jan. 1.
- Weizmann Forex promoters intended to sell their entire stake of 74.84 percent stake in the company to EBIX Group. With this the acquirers have made on open offer for 28 crore shares, representing 25.16 percent stake in Weizmann Forex for offer price of Rs 528 per share.
- Glenmark Pharma completed the transfer of the company’s API business to its wholly owned arm Glenmark Life Sciences.
- Coal India said its coal production in December was down 0.9 percent at 54.13 MT versus 54.63 MT on a year on year basis.
- Bank of Maharashtra said its board would consider raising equity capital aggregating to Rs 4,498 crore via preferential allotment to Government of India on Jan. 4.
- Power Grid Corporation of India’s Madhya Pradesh arm commissioned transmission project. This project has started its commercial production from Jan. 1.
- Infrastructure Leasing & Financial Services: Deloitte Haskins & Sells would seek two weeks to submit a reply to allegations made by Ministry of Corporate Affairs on the auditor’s role, Mustafa Doctor, a lawyer representing the firm, tells Mumbai Court. He also stated that case of fraud against auditors is totally illusory and the action cannot be taken against auditors until Institute of Chartered Accountants of India’s inquiry ends.
- Tech Mahindra: High Courts of Telengana and Andhra Pradesh set aside the order of provisional attachment of fixed deposits of Satyam Computers aggregating to Rs 822 crore by the Directorate of Enforcement of Hyderabad. Satyam Computers had merged with Tech Mahindra in the year 2012.
- IOL Chemicals and Pharma: CARE Ratings revised Long Term Bank Facilities worth Rs 529.33 rating from BBB- to BBB+ with stable outlook. The rating agency also revised short term bank facilities worth Rs 150 crore from A3 to A2. The agency gave the rationale for this upgrade that there was improvement in the operational performance of the company reflected by significant growth in total income and expansion in margins resulting in healthy growth in cash accruals.
- LIC Housing Finance’s Chairman VK Sharma resigned from his post with effect from Dec. 31, consequent to attainment of superannuation from the services of LIC.
- Karnataka Bank revised its Marginal Cost of funds based Lending rate across various tenors. One-year MCLR at 9.1 percent and Overnight MCLR set at 8.5 percent. The bank says it is also offering housing loan up to Rs 75 lakh at 8.8 percent per annum. These rates are effective from Jan. 1.
- Adani Infra’s board would consider raising capital via issue of NCD on Jan. 4.
- MOIL: Prices cut on different grades of manganese ore by 10 percent effective from January 2019. Company also offering 5-20 percent discount on select grades.
December Auto Sales (YoY)
- Motorcycle Sales down 13 percent at 58,278 units.
- Motorcycle Export Sales up 41 percent at 2,252 units.
- Domestic Commercial and Passenger Vehicles Sales down 8 percent at 50,440 units.
- Export Commercial and Passenger Vehicles Sales down 36 percent at 3,999 units.
- December liquidity crisis in the industry, higher interest rates and rising fuel costs continued to impact the commercial vehicle sales, Tata Motors said. The company also stated that its exports were subdued due to sharp Total Industrial Volume contraction in Bangladesh due to elections and political uncertainty in Sri Lanka.
VST Tillers Tractors:
- Power Tillers Sales down 55 percent at 1353 units.
- Tractors Sales down 1 percent at 602 units.
- Jay Shree Tea & Industries promoter Manav investment & Trading sold 1.8 lakh shares on Dec. 27 to Dec. 31.
- Dhanuka Agritech record date for share buyback.
- Techno Electric & Engineering Company ex-date for share buyback.
- 5paisa Capital Limited, CMI, Butterfly Gandhimathi Appliances, Indo Rama Synthetics to move into ASM Framework.
- Mahanagar Telephone Nigam, Butterfly Gandhimathi Appliances price band revised to 10 percent.
Money Market Update
- Rupee strengthened for third day straight and closed at 69.43/$, highest since Aug. 10, 2018, on Tuesday versus 69.77/$ on Monday.
- Nifty January futures closed trading at 10,960, premium of 55 points.
- Maximum open interest for January series call at 11,200 strike price, open interest at 27.9 lakh shares.
- Maximum open interest for January series put at 10,500 strike price, open interest at 35.8 lakh shares.
Stocks In F&O Ban
- Adani Power
- Nifty PCR at 1.57 versus 1.53.
- Nifty Bank PCR at 1.15 from 1.03.
Deutsche Bank Research on L&T
- Maintained ‘Buy’ with a price target of Rs 1,620.
- Order announcements lagging guidance.
- L&T’s guidance could be cut to 0-2 percent.
- Expect good execution in December quarter; stock valuations undemanding.
Emkay on Dynamatic Technologies
- Maintained ‘Buy’ with a price target of Rs 2,052.
- Aluminium business sale to improve financials.
- Sale to improve profit before tax by Rs 24 crore from April.
- Company positioning for profitable growth in ferrous division.
CLSA on Metals
- Deteriorating Chinese demand outlook to weigh on commodity prices
- Cut FY20-21 EPS estimates by 9-38 percent factoring in lower commodity prices and stronger rupee.
- Tata Steel: Downgraded to ‘Sell’ from ‘Buy’; cut price target to Rs 460 from Rs 855.
- JSW Steel: Downgraded to ‘Sell’ from ‘Underperform’; cut price target to Rs 260 from Rs 375.
- Hindalco: Downgraded to ‘Sell’ from ‘Underperform’; cut price target to Rs 210 from Rs 255.
- Vedanta: Maintained ‘Buy’; cut price target to Rs 250 from Rs 300.
- Coal India: Maintained ‘Buy’; cut price target to Rs 310 from Rs 360.
Motilal Oswal on Cement
- Demand outlook fortified by affordable housing and infra traction.
- Positives: government programs, road project executions and increase in infrastructure activities.
- Expect 4 percent incremental annual demand from PMAY in FY20.
- Key Beneficiaries: ACC, Shree Cement, Dalmia Bharat.
Motilal Oswal on Auto Sales
- Maruti: Lowering volume growth estimates to 5 percent and 10 percent for the current and the next financial year respectively from 8 percent and 11 percent respectively; cut EPS estimates by 4-5 percent for the current and the next financial year.
- M&M: Volumes miss estimate as both Tractors and utility vehicles disappoint.
- Tata Motors: Wholesale units in line estimate; Passenger Vehicles above estimates.
- Eicher Motors: Royal Enfield big disappointment; Lower Royal Enfield volume estimates for the current and the next financial year by 46,000 and 89,000 respectively; cut EPS estimates by 6 percent and 9 percent for the current and the next financial year respectively.