All You Need To Know Going Into Trade On Dec. 20

Asian stocks were mixed on Wednesday after U.S. benchmarks dipped, with investors awaiting the final votes on U.S. tax-cut legislation. Bond yields climbed amid focus on the outlook for increased supply in 2018, with less central bank buying.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index's performance in India, fell 0.4 percent to 10,430.50 as of 6:50 a.m.

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Day Break

Here's a quick look at all that could influence equities on Wednesday.

Global Cues

• The S&P 500 Index slipped from a record on Tuesday while longer-dated U.S. Treasury yields jumped to the highest since October overnight stocks,with traders attributing the move to an unwinding of bets on a shrinking gap with shorter-dated notes.

#BQMarketsNow | Wall Street fell ahead of final tax reform vote.https://t.co/4gBV6RR0i9 pic.twitter.com/IqfyBugTTr

• Most fund managers see U.S. tax cuts boosting bond yields, along with stocks, next year, a Bank of America Merrill Lynch monthly survey showed. A net 83 percent of respondents viewed bond markets as overvalued.

Europe Check

• Equity markets were mixed in Europe. The region's core bonds declined, with German yields seeing their biggest gains in more than five months after a European Central Bank Governing Council member said discussions were moving to the future use of interest rates rather than asset purchases to regulate the economy.

Asian Cues

• Japan's Topix index was up 0.1 percent, while the Nikkei 225 Stock Average was down by the same degree.
• Futures on the S&P 500 Index rose 0.1 percent.
• Futures on Hong Kong's Hang Seng were down 0.5 percent.
• Australia's S&P/ASX 200 fell 0.2 percent.

Here are some of the key events scheduled for this week:

• The U.S. and U.K. publish updated estimates of third-quarter GDP.
• The U.S. House of Representatives voted to approve the tax bill Tuesday, but will have to vote again today because the current draft doesn't comply with Senate rules.
• The Bank of Japan meets on Thursday to set monetary policy.
• Catalonia votes in an election Thursday that will pose a test for the Spanish region's secession movement.

Morgan Stanley's Chetan Ahya believes that growth is gathering further momentum in India. pic.twitter.com/nBtFSAMxlR

Commodity Cues

• Brent crude ended higher at $63.80 per barrel, up 0.6 percent.
• West Texas Intermediate crude was little changed at $57.69 a barrel after advancing 0.7 percent Tuesday.
• Gold was at $1,261.96 an ounce.
• Sugar ended near two-week high of 14.41 cents per pound; up 4.7 percent.

Shanghai Exchange

• Steel trades lower for second day; down 0.05 percent.
• Aluminium trades higher; up 0.7 percent.
• Zinc trades flat.
• Copper trades higher for nine consecutive session; up 0.4 percent.
• Rubber trades higher; up 0.8 percent.

Indian ADRs

Stocks To Watch

• HDFC to raise up to Rs 13,000 crore by issuing a mix of instruments. Up to Rs 8,500 crore will be used to subscribe to the preferential allotment of HDFC Bank.
• Tata Steel to increase the capacity of Kalinganagar plant to 8 MTPA with capital expenditure of Rs 23,500 crore.
• Tata Steel to raise up to Rs 12,800 crore through rights issue.
• Welspun Enterprises will not invest in Welspun Financial. Instead the amount earmarked for NBFC venture will be used for further growth in infrastructure space.
• Consortium of GMR-Megawide emerged as the preferred bidder for the Clark Airport project in Philippines.
• Matrimony.com received Rs 12.81 crore from promoter and managing director.
• AU Small Finance Bank signed agreement with Sahaj E-village for providing banking and financial services.
• Garden Silk Mills says promoters to pledge 51 percent of the total paid up equity in favour of IDBI Trusteeship.
• Indian government withdraws stock holding and turnover limit on sugar dealers with immediate effect.
• Indian Bank to raise Rs 7,000 crore through issue of shares.
• Emami Infra holders to consider absorbing Zandu Realty on Jan. 20.
• IndusInd Bank says CCI approved merger of Bharat Financial.

Complaints to Banking Ombudsman rose 27% in FY17.https://t.co/XLkX3TD1eo pic.twitter.com/Pfpzd2W13n

Bulk Deals

• KNR Construction: Promoter Kamidi Yashoda sold 16 lakh shares or 1.1 percent equity at Rs 276 each.
• Orchid Pharma: Serum Institute of India sold 7.05 lakh shares or 0.8 percent equity at Rs 19.37 each.
• Tara Jewels: Promoter Rajeev Vasant Sheth sold 4.66 lakh shares or 1.9 percent equity at Rs 19.32 each.

Ashiana Housing

• ICICI Prudential MF bought 22.59 lakh shares or 2.2 percent equity at Rs 157 each.
• Jwalamukhi Investment Holding sold 26.42 lakh shares or 2.6 percent equity at Rs 157.03 each.

Butterfly Gandhimathi

• Ashish Kacholia bought 2 lakh shares or 1.1 percent equity at Rs 525 each.
• Reliance Alternative Investment Fund I sold 2 lakh shares or 1.1 percent equity at Rs 525 each.

Bharti Airtel

• Societe Generale bought 42.78 lakh shares or 0.1 percent equity at Rs 523.25 each.
• Morgan Stanley Mauritius sold 5.22 lakh shares or 0.01 percent equity at Rs 523.25 each.
• Morgan Stanley France SAS sold 37.56 lakh shares or 0.1 percent equity at Rs 523.25 each.

HDFC Bank

• Societe Generale bought 15 lakh shares or 0.1 percent equity at Rs 1883.5 each.
• Morgan Stanley France SAS sold 15 lakh shares or 0.1 percent equity at Rs 1883.5 each.

ICICI Bank

• Societe Generale bought 71.19 lakh shares or 0.1 percent equity at Rs 310.5 each.
• Morgan Stanley France SAS sold 71.19 lakh shares or 0.1 percent equity at Rs 310.5 each.

Infosys

• Societe Generale bought 15.84 lakh shares or 0.1 percent equity at Rs 1012.5 each.
• Morgan Stanley France SAS sold 15.84 lakh shares or 0.1 percent equity at Rs 1012.5 each.

Tata Motors

• Societe Generale bought 3.21 lakh shares or 0.01 percent equity at Rs 411.25 each
• Morgan Stanley France SAS sold 3.21 lakh shares or 0.01 percent equity at Rs 411.25 each.

Indian equities are unlikely to see a repeat of this year's "abnormally" good returns in 2018: Samir Arorahttps://t.co/Ymr05xXY6m

Corporate Actions

• Godawari Power and Ispat circuit filter revised to 10 percent.
• Somany Ceramics: RBI allows further FII buying.
• Future Supply Chain added to BSE IPO Index.
• Castrol, Vakrangee and Balkrishna Industries last trading day before 1:1 bonus.

IPO

• Astron Paper and Board Mill subscribed 12.4 times on final day.

Who's Meeting Whom?

• ACC to meet Premji Investment on Dec. 20.
• Dr. Lal Pathlabs to meet ICICI Securities on Dec. 20.
• Shriram Transport to meet Davidson Kempnor India on Dec. 20.
• Trent to meet ICICI Securities on Dec. 20.
• Eicher Motors to meet Voyager Capital on Dec. 20.
• Balaji Tele to meet Kotak PCG, Elara Capital and Anand Rathi on Dec. 20 - 21.
• Symphony to meet Amundi Hong Kong on Dec. 21.
• VRL Logistics to meet BNP Paribas Asset Management on Dec. 21.
• JMC Projects to meet BOB Capital on Dec. 21 and Motilal Oswal on Dec. 27.

Insider Trades

• Apollo Tyres promoter PTL Enterprises bought 10,000 shares on Dec. 18.
• Info Edge promoters sold 1.2 lakh shares on Dec. 13.

Rupee

• Rupee closed at 64.04/$ on Tuesday from 64.24/$ on Monday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty December Futures closed trade at 10,471, premium of 7.9 points from 15.6 points.
• December Futures: Nifty open interest unchanged; Bank Nifty open interest up 1 percent.
• India VIX at 12.1, down 7 percent.
• Maximum open interest for December series at 10,500 Call (open interest at 62.5 lakh, down 14 percent).
• Maximum open interest for December series at 10,000 Put (open interest at 82.9 lakh, up 2 percent).

F&O Ban

• In ban: Fortis, HDIL, Jet Airways, JP Associates, JSW Energy, TV18 Broadcast, Wockhardt.
• New in ban: Jet Airways.
• Out of ban: Jain Irrigation.

Only intraday positions can be taken in stocks which are in F&O ban. There is a penalty in case of a rollover of these intraday positions.

Put-Call Ratio

• Nifty PCR at 1.44 from 1.30.
• Nifty Bank PCR at 1.22 from 1.11.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Macquarie on ONGC

• Initiated ‘Outperform' with price target of Rs 290; implying a potential upside of 60 percent from yesterday's close.
• Relative to expectation of $65/bbl long-term Brent assumption.
• ONGC's share price implies a low $52 per barrel.
• Expect production growth after five years of lacklustre performance.
• Oil & gas production to rise 35 percent by March 2022.
• Realizations and margins to gradually rise.
• Expect favourable dividend yield of 6 percent March 2022.
• ONGC-HPCL deal 1-8 percent earnigns per share accretive even if ONGC pays 50 percent premium to Hindustan Petroleum's current share price
• Bull case price target of Rs.345: $75/bbl long-term brent adds Rs 55 per share.

Kotak on Maruti Suzuki

• Maintained ‘Add'; raised price target to Rs 10,300 from Rs 9,300.
• Maruti Suzuki to enjoy golden run over next 3-5 years.
• Positives: limited competition, stable industry growth and change to BS-VI from BS-IV.
• Expect operating margin to surpass historical peaks.
• Multiple triggers for margin improvement.
• Electric vehicles do not pose an immediate threat to PV industry.

JPMorgan on Tata Steel

• Balance sheet flexibility critical to pursue opportunities.
• Rights issue implies dilution of 18.5 percent based on current price.
• Financial leverage post Europe JV very manageable.

IDFC Securities on Tata Steel

• Maintained ‘Outperform' with price target of Rs 759.
• Fund raising at 10 percent discount to current market price to lead to equity dilution of 20 percent.
• Fund raising to help in pursuing inorganic growth without stretching balance sheet.
• Buying distressed good steel assets will be a unique opportunity.
• Focus on growth opportunity in India to help in doubling capacity within next five years.
• Consolidated net debt to remain high, but manageable.
• Incremental cash flows could have taken care of expansion plans at Kalinganagar.

Morgan Stanley on Tata Steel

• Expansion at Kalinganagar positive for medium term growth.
• Expansion to increase the share of value added products to total volumes.
• Estimated Capital Expenditure implies cost of $730/tonne vs $1,300/tonne earlier.
• Fund raising to lead to 16 percent earnings per share dilution without factoring any reduction in debt.

Deutsche Bank on Jubilant Foodworks

• Maintained ‘Buy' with price target of Rs 2,000.
• Consumer feedback positive on recent extension of ‘everyday value'.
• Expect national launch of Rs 99 price point in 2018 to enhance value-proposition positioning.
• Now low-hanging opportunity is to increase consumption frequency.
• Remains top pick in consumer discretionary.

IIFL on Oil & Gas

• Expect earnings of Oil Marketers to grow at 10 percent per annum till March 2020.
• Growth may seem moderate; Earnings visibility remains strong.
• Earnings Drivers: volume growth, expansion in marketing margins, capacity addition and strong Gross Refinery Margins.
• Oil Marketers well placed to overcome possible competition from private players.
• Favourable risk reward; Maintained ‘Buy' on Hindustan Petroleum, Bharat Petroleum and Indian Oil.

PhillipCapital on Sintex Plastics

• Initiated ‘Buy' with price target of Rs 145; implying a potential upside of 85 percent from yesterday's close.
• Custom moulding: Stable and sustainable growth.
• Retail to provide higher growth because of GST.
• Prefab business to grow on spending on healthcare, education, and sanitation.
• Expect revenue, operating income and net profit to grow at a compounded rate of 9 percent, 6 percent and 10 percent respectively by March 2020.
• Sintex Plastics cash profit to help deleverage its balance sheet.
• In strong position to capitalise on economic recovery and growth in retail, warehousing and cold chain post GST.

Public sector banks' capital raises credit positive, says Moody's.https://t.co/hz8sgb8doP pic.twitter.com/62XNL6zP5y

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