All You Need To Know Going Into Trade On Jan. 7

Asian stocks rebounded as the risk-off mood sparked by geopolitical tensions in the Middle East ebbed.

Shares rose in Tokyo, Sydney and Seoul. Hong Kong futures tipped a firmer open. U.S. equity futures were flat. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.56 percent to 12,116 as of 7:06 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.

• Oil steadied as investors weighed the risk to Middle East oil supplies in the fallout from the U.S. airstrikes that killed Iran’s most powerful military general and sparked a severe escalation in hostilities between the two nations.
• U.S. stocks advanced as heavyweight technology companies led a rebound.

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Key Events/Data To Watch

• India to release the advance estimate of GDP growth for 2019-20
• RBI Governor Shaktikanta Das, Singapore Minister Tharman Shanmugaratnam to speak in Mumbai.

Earnings Reaction To Watch

ITI (Q3, YoY)

• Revenue rose 47 percent to Rs 828 crore.
• Net profit was up 12.4 time to Rs 168.3 crore.
• Ebitda at Rs 64.8 crore versus Ebitda loss of Rs 19.4 crore.
• Other Income was up 2.1 times to Rs 150.9 crore.

Earnings To Watch

• GM Breweries

Indian ADRs

Stocks To Watch

• HDFC Bank Q3 Update: Advances were up 20 percent year-on-year to Rs 9,34,000 crore . Deposits rose 25 percent year-on-year to Rs 10,67,500 crore. CASA Ratio was at 39.5 percent versus 40.7 percent. During the quarter, the Bank purchased loans aggregating to Rs 4,258 crore through direct assignment route under home loan arrangement with HDFC.
• PI Industries said that factory accident happened in one section of a multi-product plant at Jambusar fine chemicals manufacturing site in Gujarat has resulted in two fatalities and nine persons being injured. The impact of the incident is being ascertained, damaged equipment is fully covered by insurance, according to the company’s media statement.
• Tata Group: Supreme Court has set Jan. 10 as the hearing date for Tata Sons petition, according to Bloomberg report.
• Sagar Cements: December sales fell 4.33 percent to 3,12,132 units.
• Mishra Dhatu Nigam dispatched the first consignment for high strength steel and cobalt alloys to Indian Space Research Organisation.
• Aster DM Healthcare will consider share buyback on Jan. 9.
• Reliance Home Finance said that total amounts of default from loans from financial institutions stood at Rs 982.18 crore on Dec. 31. Total financial indebtedness stood at Rs 11,891.24 crore.
• Canara Bank: Repo rate linked lending rate for Retail and MSME loans at 8.05 percent with effect from Jan. 7. Base Rate will be 9.1 percent and one-year MCLR at 8.35 percent.
• Bank of Maharashtra reduced MCLR and Base Rate across various tenors with effect from Jan. 7. One-year MCLR was at 8.25 percent and Base Rate was at 9.4 percent.
• Container Corporation of India has incorporated its wholly-owned arm CONCOR Last Mile Logistics, to develop goods sheds, operate and manage freight terminals/ goods sheds, develop warehouses etc.
• IL&FS defaulted in payment of interest on Loan worth Rs 33.5 crore on which was due on Jan. 1. IL&FS Realty Fund has terminated its management pact with IL&FS Investment Advisors.
• TCI Finance defaulted in payment of principal and interest amounting to Rs 60 lakh of a term loan from HDFC.
• Zenith Birla entered into a one-time settlement with Oriental Bank of Commerce against credit facilities by the company.
• Ajmera Realty & Infra will consider the proposal of internal restructuring on Jan. 10.
• Morepen Laboratories defaulted in payment of interest and principal of compulsory redeemable preference shares worth Rs 33.4 crore to J&K Bank, UTI Bank, Oriental Bank of Commerce, General Insurance Corporation, Oriental Insurance and Kuoni Travel. Preference shares could not be redeemed on respective due dates as the company had accumulated losses.
• Rail Vikas Nigam: Ministry of Railways has conveyed the conceptual framework to introduce competition among public sector undertakings for awarding Railway work.
• Biocon has appointed MB Chinappa as the chief financial officer of Biocon Biologics.

December Auto Sales

• VST Tillers Tractors: Power Tillers sales rose 4 percent to 1,410 units. Tractors sales fell 39 percent to 366 units.

Offerings

• ESAF Small Finance Bank seeks SEBI approval for Rs 976-crore initial public offering.

Brokerage Radar

BofAML on Reliance Industries

• Maintained ‘Buy’ with a price target of Rs 1,700.
• Jio-Mart is RIL’s first phase of new commerce initiative.
• Jio-Mart provides end-to-end offering, but not without challenges.
• New commerce still a 2-3 year project; core retail strong.

JPMorgan on Crompton Consumer

• Maintained ‘Neutral’ with a price target of Rs 270.
• Lighting: revenue challenges persist; profitability improvement in focus.
• Fans: premiumisation and market share gain led growth strategy in place; new energy rating norms to aid.
• Looking for strategic M&A opportunities at reasonable valuations.

HSBC on India Infrastructure

• The government task force identifies $1.4 trillion in spending and reforms over the next five years.
• The report cannot solve execution-related problems, but having a plan is a step in the right direction.
• L&T appears best positioned to benefit from NIP drive for infrastructure investment.
• L&T: Maintained ‘Buy’ with a price target of Rs 1,790.
• ABB India: Maintained ‘Hold’; cut price target to Rs 1,125 from Rs 1,411.

IIFL on IT

• Believe the Indian IT sector may deliver limited absolute returns in 2020.
• Valuations could see time correction driven by deceleration in IT spending growth.
• Expect deterioration in the BFSI and retail verticals, which constitute close to 45 percent of the revenue.
• Expect slower growth in deal wins.
• Uncertainty around the U.S. elections, trade disputes and Brexit to impact sector.

Trading Tweaks

• Dishman Carbogen Amcis, Indiabulls Real Estate to move into ASM Framework.
• Adani Green Energy, Gallantt Ispat, Supreme Infrastructure, Suzlon Energy, Vakrangee, Weizmann Forex , Zuari Global, Jaiprakash Power Ventures to move into short term ASM Framework.
• Sundaram Brake Linings to move of short term ASM Framework.
• Reliance Industrial Infrastructure, Suzlon Energy price band revised to 10 percent.
• Shankara Building Products, GSS Infotech price band revised to 5 percent.

Who’s Meeting Whom

• Balrampur Chini Mills to meet Kotak Institutional Equities on Jan. 7.
• HPCL to meet Mirae MF on Jan. 7.
• Shriram City Union Finance to meet GoDigit General Insurance on Jan. 7.
• Punjab National Bank to meet HSBC Global, Doric Capital and Fidelity Group from Jan. 7-8.

Insider Trading

• Astec Lifesciences promoter Godrej Agrovet acquired 15,000 shares on Dec. 31.
• Aarti Industries promoter Chandrakant Gogri sold 13,000 shares on Dec. 31.

F&O Cues

Index Futures

• Nifty January futures closed at 12,043.7, premium of 50.7 points versus 29.8 points.
• Nifty January futures open interest up 1 percent, adds 1.1 lakh shares in open interest.
• Nifty Bank January futures closed at 31,362, premium of 124.9 points versus 92 points.
• Nifty Bank January futures open interest up 10 percent, adds 1.2 lakh shares in open interest.

Options

• Nifty PCR at 1.11 versus 1.36 (across all series).

Nifty Weekly Expiry: Jan. 9

• Max open interest on call side at 12,200 (25.4 lakh shares).
• Max open interest on put side at 12,000 (19.8 lakh shares).
• open interest addition seen at 12,100C (+19.4 lakh shares), 12,200C (+13.7 lakh shares), 12,000C (+12 lakh shares).
• open interest shedding seen at 12,200P (-11.1 lakh shares), 12,100P (-6.6 lakh shares).

Nifty Monthly Expiry: Jan. 30

• Max open interest on call side at 12,500 (26.2 lakh shares).
• Max open interest on put side at 12,000 (38.3 lakh shares).