All You Need To Know Going Into Trade On Nov 21
Asian stocks are back in bear-market territory after another dive on Wall Street, where concerns have spread to the corporate-bond market.
Equity benchmarks retreated in Japan, Australia and South Korea, while futures show Hong Kong is set to open lower. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, fell 0.45 percent to 10,623 as of 7 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 fell Tuesday as sinking oil prices hit energy companies, tech hardware continued to plunge with Apple leading the way, and retailers saw little joy from the coming Christmas shopping season.
- The yield on 10-year Treasuries nudged higher to 3.07 percent, remaining near the lowest since September.
Europe Market Check
- European shares reeled lower, weighed by the tech sector rout as Apple entered bear market territory, with investors reappraising risk appetites.
- Japan’s Topix index fell 1.3 percent.
- Australia’s S&P/ASX 200 Index fell 1 percent.
- South Korea’s Kospi index lost 1.3 percent.
- Hong Kong’s Hang Seng Index futures lost 0.7 percent.
- S&P 500 futures were little changed.
- West Texas Intermediate crude stabilised at $53.53 a barrel after sliding 6.6 percent to the lowest since October 2017.
- Brent crude ended 6.4 percent lower at $62.53 a barrel, the lowest level in nearly a year.
- Gold fell 0.1 percent to $1,221.03 an ounce.
London Metal Exchange
- Aluminium ended 0.3 percent higher.
- Copper halted a five-day rally, down 1.2 percent.
- Zinc ended lower for the second day, down 1.88 percent
- Nickel ended lower for the second day, down 0.76 percent.
- Lead halted a tow-day rally, down 2.1 percent.
- Tin ended 1.02 percent lower.
Stocks To Watch
- Dr Reddy’s Laboratories: Indivior lost an appeals court ruling that opened the door for the company to begin sales of a generic version of the opiod treatment Suboxene Film. Dr. Reddy’s had received regulatory approval to sell a generic version of the drug before it was shut down by a federal judge who said it had to wait for a final decision in a patent-infringement case. The appeals court set aside an order that blocked Dr. Reddy’s and remanded the case to the trial court for further proceedings. (Bloomberg News)
- Bank of Baroda agreed to sell 4 percent stake in Clearing Corporation of India to HDFC Bank at Rs 620 per share, with consideration aggregating to Rs 124 crore. Post the acquisition, HDFC Bank will increase its stake in CCIL from 5 percent to 9 percent.
- Suzlon Energy completed sale of two arms to Canadian Solar. The total consideration received for both companies stood at Rs 54.53 crore.
- Minda Corporation reduced its stake in its joint venture with Japan based Furukawa Group from 51 percent to 25 percent.
- NBCC submitted expression of interest for resolution plan of Jaypee Infratech and the company has been provisionally shortlisted by resolution professional of Jaypee Infratech as prospective resolution applicant.
- NTPC signed an accord with seven electric vehicle aggregators. The company says accord is for developing charging infrastructure. (Bloomberg News).
Earnings To Watch
- Dewan Housing Finance Corporation
- UBS Asia acquired 1 crore shares or 1.93 percent equity at Rs 147.05 each.
- York Asian Opportunities Fund sold 1 crore shares or 1.93 percent equity at Rs 147.05 each.
Who’s Meeting Whom
- Tamil Nadu Newsprint and Papers to meet HDFC AMC on Nov. 22.
- Tata Steel to meet Blackrock on Dec. 4.
- Cipla to meet ICICI Pru MF, Resona Bank and other investors from Nov. 21-Dec.3.
- Godrej Agorvet to meet Piper Serica, Rare Enterprise and other investors on Nov.21.
- Orient Abrasives promoter group acquired 37,000 shares between Nov. 9-15.
- Axis Bank promoter LIC sold 14 lakh shares on Nov. 19.
- Ramco Industries promoter Deepa Shah sold 90,000 shares on Nov. 19.
- Nitin Spinners promoter group acquired 4.2 lakh shares on Nov. 19.
- Veto Switchgears and Cables to move into ASM Framework.
- Dolat Investments price band revised to 5 percent.
Money Market Update
- Rupee on Tuesday rose for the sixth straight day and closed at 71.45/$ versus Monday’s 71.66/$. This has been the currency’s longest rising streak In 13 months.
- Nifty November futures closed trading at 10672, premium of 16 points
- Nifty November open interest down 3 percent; Nifty Bank November open interest down 0.6 percent.
- Max open interest for November series at 10,800 Call option (open interest at 36 lakh shares).
- Max open interest for November series at 10,000 Put option (open interest at 41 lakh shares).
Stock In F&O Ban
- In Ban: Adani Power, Adani Enterprises, Jet Airways, PC Jeweller, DHFL
- New in Ban: DHFL
- Nifty PCR at 1.64 from 1.73.
- Nifty Bank PCR at 1.01 from 1.33.
On Dr. Reddy’s Laboratories
- Maintained ‘Underperform’, with a price target of Rs 2,100, implying a potential downside of 14.1 percent from the last regular trade.
- Expect immediate competition from Authorised generic and Mylan for Suboxone.
- So in a steady state, Suboxone should be six generic player market.
- Dr. Reddy’s received approval for generic of Diprivan; Excect $20 - 25 million sales.
- Maintained ‘Neutral’ with a price target of Rs 2,500, implying a potential upside of 2.3 percent from the last regular trade.
- Expect gSuboxone ‘at risk’ re-launch immediately.
- Probability of favourable verdict in the full trial on the ‘305 patent increases.
- Expect $50 - 60 million sales of Suboxone in the current financial year; $70 million in the next financial year.
- Mylan’s entry could be imminent.
- Maintained ‘Buy’ with a price target of Rs 2,989, implying a potential upside of 22.3 percent from the last regular trade.
- gSuboxone springs back to life as Dr Reddy’s wins ruling.
- PI ruling win has strong bearing on pending litigations.
- Competition from other firms can catch up and is a risk.
- See Rs 27 per share opportunity with three firms in fray.
UBS on ONGC
- Maintained ‘Buy’ with a price target of Rs 240, implying a potential upside of 56.8 percent from the last regular trade.
- ONGC stock took a beating due to soaring crude, will it reverse with crude fall.
- OVL's consolidated profit during the first half of the current financial year was up almost nine time on a yearly basis on higher crude oil price.
- Share buyback, stable crude oil prices should improve investors' sentiments.
BofA on Jubilant Foodworks
- Maintained ‘Buy’ with a price target of Rs 1,600, implying a potential upside of 31.8 percent from the last regular trade.
- Strong showing likely to continue in the third quarter despite challenging base.
- New product launches; third quarter’s SSSG likely to be in high teens.
- See upside risk to our estimates after strong first half.