A trader speaks on a fixed line phone as he monitors financial data on computer screens on the trading floor. (Photographer: Luke MacGregor/Bloomberg)  

All You Need To Know Going Into Trade On Nov. 19

Asian stocks pushed higher Monday even as U.S.-China trade tensions showed no sign of improvement over the weekend.

Tension between Chinese President Xi Jinping and U.S. Vice President Mike Pence quashed optimism that relations would improve at Group of 20 meetings starting next week. Equities from Tokyo to Hong Kong rose, while Australian shares retreated.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, rose 0.43 percent to 10,743 as of 7:20 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 finished Friday higher as President Donald Trump appeared to signal a willingness to reach a deal with China at this month’s G-20 summit.
  • But Friday’s gains couldn’t compensate for a rocky week in which the retail picture soured and technology shares languished.
All You Need To Know Going Into Trade On Nov. 19

Also read: Pence's Sharp China Attacks Fuel Fears of New Cold War

Europe Market Check

  • Europe’s stocks declined, again unable to sustain early gains. But the benchmark index pared losses in the afternoon on hopes that the U.K. government will withstand immediate political challenges, as Prime Minister Theresa May named a new Brexit Secretary.
All You Need To Know Going Into Trade On Nov. 19

Also read: Embattled May Asks Business Leaders to Back Her Brexit Deal

Asian Cues

  • Japan’s Topix index rose 0.6 percent.
  • FTSE China A50 Index futures added 1 percent.
  • Hong Kong’s Hang Seng Index futures were little changed.
  • Australia’s S&P/ASX 200 Index slid 0.2 percent.
  • South Korea’s Kospi Index added 0.7 percent.
  • Futures on the S&P 500 fell 0.3 percent.

Also read: China's Fight Against Smog Makes Palladium 2018's Best Metal

Commodity Cues

  • West Texas Intermediate crude traded at $57.15 a barrel, up 1.2 percent.
  • Brent crude traded higher for the fourth day, up 0.9 percent at $67.33 per barrel.
  • Gold slid 0.1 percent to $1,222.53 an ounce.

Key Events To Watch This Week

  • The Reserve Bank of India board discusses government demands to give up some surplus reserves and loosen liquidity norms for lenders on Monday.
  • Bank of England Governor Mark Carney appears before parliament on Tuesday.
  • It’s a holiday-shortened week and Black Friday, the day after Thanksgiving, marks the traditional start to the U.S. holiday shopping season.

Indian ADRs

All You Need To Know Going Into Trade On Nov. 19

Stocks To Watch

  • Tata Sons said that talks to buy a stake in cash-strapped airline Jet Airways are in early stages and there hasn’t been any decision taken yet.
  • Vodafone India clarified that the company has not considered any proposal to sell fibre assets to Bharti Infratel and the news is factually incorrect.
  • Dr. Reddy’s Laboratories received zero observations from audit of formulations plant in Andhra Pradesh by the U.S. FDA.
  • Tata Investment Corporation’s board approves buyback of 45 lakh shares, representing 8.17 percent of total paid-up capital, at Rs 1,000 per share, aggregating to Rs 450 crore.
  • Power Grid Corporation’s board approved increasing shareholding limit of foreign portfolio investors to 35 percent of the paid-up capital.
  • Infosys completed the formation of joint venture with Singapore based global investment company - Temasek, to further strengthen its footprint in South East Asia.
  • BSE has decided to snap ties with S&P Dow Jones, which manages and operates the benchmark Sensex, and plans to develop indices through its own in-house development team.
  • SRF said that its technical textiles unit in Tamil Nadu has been damaged by Cyclone Gaja. The company stated that they have adequate insurance cover for the unit and steps are being undertaken to restore normal operations.
  • Deepak Nitrate confirmed that the Income Tax department carried out search operations, without disclosing additional details.
  • Shalimar Paints proposed rights issue of 3.4 crore equity shares at Rs 64.5 per share. The company plans to raise Rs 217 crore through the issue.
  • LKP Finance’s acquirer Dakshin Mercantile announced an open offer for 26 percent stake in the company at Rs 198 per share.

Media Reports

  • Nestle pitted against Unilever in the final round of negotiations for GlaxoSmithKline’s consumer nutrition business (Economic Times)
  • Global and Indian investors eye Raymond’s land parcel. The potential suitors includes Prestige Estates, Purvankara Projects among others. (Economic Times)

Offerings

  • Titagarh offer-for-sale share in Cimmco for retail investors gets 92 percent demand on the second day of sale; Non-retail portion gets 5 percent demand on Nov. 15.

Earnings Reaction To Watch

Seshasayee Paper (Q2, YoY)

  • Net sales up 45.8 percent to Rs 331 crore.
  • Net profit up 92 percent to Rs 50.4 crore.
  • Ebitda jumped 70.6 percent to Rs 82 crore.
  • Margin stood at 24.7 percent versus 21.1 percent.

Siemens (Q4CY18, YoY)

  • Revenue up 25.4 percent at Rs 3,939.2 crore.
  • Net profit down 55.2 percent at Rs 279.2 crore.
  • Company had an exceptional gain of Rs 560 crore in the year-ago period.
  • Reported Ebitda up 31.9 percent at Rs 418.6 crore.
  • Margin at 10.6 percent versus 10.01 percent.

Bulk Deals

  • Indiabulls Housing Finance: Principal Global Investors LLC sold 27,000 shares at Rs 767.26 each.
  • Info Edge: Aranda Invest (Mauritius) sold 11.7 lakh shares or 0.96 percent equity at Rs 1,370.39 each.

Vikas Ecotech

  • Nomura Singapore acquired 70 lakh shares or 2.50 percent equity at Rs 14 each.
  • Promoter Vikas Garg sold 1.1 crore shares or 4.07 percent equity at Rs 14 each.

Mindtree

  • Copthall Mauritius Investment sold 16.9 lakh shares or 1.03 percent equity at Rs 840 each.
  • Northern Multi Manager Emerging Markets Equity Fund acquired 16.9 lakh shares or 1.03 percent equity at Rs 840 each.

Tejas Networks

  • Aditya Birla Sun Life MF acquired 11.4 lakh shares or 1.25 percent equity at Rs 257 each.
  • Intel Capital (Cayman) Corporation sold 13.6 lakh shares or 1.49 percent equity at Rs 257.03 each.

Who’s Meeting Whom

  • Castrol India to meet Aberdeen Standard Investments on Nov. 20
  • Tata Motors to meet DNB Asset Management, Nomura and other investors from Nov. 19-23
  • Mahanagar Gas to meet Marlborough Asset Management, U.K. on Nov. 29
  • Dr. Lal Pathlabs to meet Reliance Nippon AMC, ICICI Securities and other investors on Nov. 23
  • Supreme Industries to meet Axis MF, IDFC and other investors on Nov. 19

Insider Trades

  • Mangalore Chemicals & Fertilizers promoter McDowell Holdings sold 59,000 shares between Nov. 13-14.

(As reported on Nov. 16)

Trading Tweaks

  • Natco Pharma buy-back window opens.
  • RCI Industries & Technologies price band revised to 10 percent.

Money Market Update

  • Rupee strengthened for the fourth consecutive day on Friday, its longest winning streak since March. The domestic currency closed at 71.93 against the U.S. dollar after ending at 71.99 per dollar on Thursday.

F&O Cues

  • Nifty November futures closed trading at 10,687, premium of 8 points.
  • Nifty November Open Interest up 2.4 percent; Nifty Bank November OI down 2.4 percent.
  • Max OI for November series at 10,800 Call, OI at 34 lakh shares.
  • Max OI for November series at 10,000 Put, OI at 47.2 lakh shares.

Stocks In F&O Ban

  • In ban: Adani Power, Adani Enterprises
  • Out of ban: Jet Airways
  • New in ban: Adani Enterprises

Put-Call Ratio

  • Nifty PCR at 1.64 from 1.57.
  • Nifty Bank PCR at 1.26 from 1.20.

Fund Flows

All You Need To Know Going Into Trade On Nov. 19

Brokerage Radar

Deutsche Bank on Power Grid

  • Maintained ‘Hold’ with a price target of Rs 216, implying a potential upside of 14.8 percent from the last regular trade.
  • Sweating of assets is a good strategy.
  • Large capex plans to support government programs.
  • To see lesser dividends, alternate usage of cash in non-core areas.

Deutsche Bank on tyre companies

  • Continued volume growth across companies.
  • Price hikes taken to counter commodity cost pressures.
  • Forecast FY18-21 EPS CAGR of 16-26 percent.
  • Apollo Tyres remains top pick.
  • Remain constructive on MRF, CEAT
  • Apollo Tyres: Maintained ‘Buy’ with a price target of Rs 300, implying a potential upside of 32.6 percent from the last regular trade.
  • MRF: Maintained ‘Buy’ with a price target of Rs 80,000, implying a potential upside of 21 percent from the last regular trade.
  • Ceat: Maintained ‘Buy’ with a price target of Rs 1,570, implying a potential upside of 25.4 percent from the last regular trade.

JP Morgan on NMDC

  • Maintained ‘Overweight’ with a price target of Rs 145, implying a potential upside of 43 percent from the last regular trade.
  • Donimalai mine renewal issue becomes more difficult.
  • There could be a long legal route ahead and possibility of production being lost.
  • Potential loss of production creates near-term earnings risk.

Citi on Nestle

  • Maintained ‘Buy’, with a price target of Rs 11,800, implying a potential upside of 10.4 percent from the last regular trade.
  • Our forecasts call for volume growth of 8-9 percent over the next two years.
  • Cluster strategy should result in faster execution and decision making.
  • Nestle is still trading at a discount to its average premium to the sector.