All You Need To Know Going Into Trade On Jan. 4

Asian stocks headed toward fresh historic highs, with Japan's markets coming back from New Year holidays to see solid gains in the wake of U.S. records. The dollar and oil rose, while gold slipped.

Chinese stocks were little changed after a gauge of services industries indicated a pick-up in growth last month. There's little further on the Asian calendar this week. The global highlight is set to be the key monthly U.S. jobs report Friday, which is forecast to show that unemployment held at 4.1 percent last month.

The Singapore traded SGX Nifty, an early indicator of Nifty 50 Index's performance in India, rose 0.3 percent to 10,518 as of 6:30 a.m.

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DayBreak

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

Global Cues

• U.S. stocks climbed to record highs, gold fell and the dollar extended gains as the minutes from the Federal Reserve's December policy meeting showed officials continued to back gradual interest-rate increases.
• Most participants at the Fed gathering reiterating support for “continuing a gradual approach to raising the target range” for the benchmark policy rate, according to minutes of the Federal Open Market Committee's Dec. 12-13 meeting.

#BQMarketsNow | U.S. stocks climbed to record highs for second day.https://t.co/4b7fGo1LsE pic.twitter.com/wPf3auSSGV

Europe Check

• European stocks rose following a positive session in Asia and bonds gained as the region's new investment regulations finally took effect.
• European bonds rose after strong investor interest in an Irish debt sale, and the euro retreated for the first time in six days.
• In Europe the MiFID II rules are one of the most seismic regulatory shifts in history, affecting everything from investment research to trade execution.

Asian Cues

• Japan's Topix index was up 1.5 percent, with the Nikkei 225 Stock Average climbing 1.8 percent.
• Futures on U.S. indexes were little changed Thursday.
• Australia's S&P/ASX 200 gained 0.4 percent. South Korea's Kospi Index rose 0.3 percent.

Here are highlights of key events investors will be monitoring the rest of the week:

• The Caixin measure of China services PMI data come Thursday.
• U.S. December employment data are due on Friday.
• India releases an estimate for 2018 economic growth Friday.

Commodity Cues

• Brent crude ended higher at $67.84/barrel, up 1.9 percent
• West Texas Intermediate oil rose 0.4 percent to $61.85 a barrel.
• Gold dropped 0.3 percent to $1,308.96 an ounce.
• Spot Gold trades lower at $1,309 an ounce; down 0.3 percent.
• Sugar snaps five-day winning streak, ended lower at 15.31 cents per pound; down 0.13 percent.

Shanghai Exchange

• Steel snaps three-day winning streak; down 0.8 percent.
• Aluminium trades lower for second day; down 0.6 percent.
• Zinc snaps five-day winning streak; down 0.4 percent.
• Copper trades lower for third day; down 0.4 percent.
• Rubber trades lower for second day; down 1.8 percent.

Indian ADRs

Data To Watch

• 10:30am: Nikkei India Services PMI for Dec. (prior 48.5)
• 10:30am: Nikkei India Composite PMI for Dec. (prior 50.3)

IPO Watch

• Apollo Micro System may announce price band, offer dates for IPO

Stocks To Watch

• HDFC Ltd: The mortgage lender said its third quarter profit on the sale of investments stood at Rs 5,270 crore compared to Rs 3 crore a year ago. The figure includes Rs 5,250 crore from the IPO of HDFC Life. Its dividend income stood at Rs 151 crore from Rs 179 crore year-on-year. HDFC said it will also make additional special provision of Rs 1,575 crore.

• Earnings To Watch: GM Breweries

• Coal India examining feasibility of producing methanol.
• SJVN to consider share buyback on Jan. 8.
• Bank of Maharashtra to raise Rs 650 crore via equity.
• NBCC secured total business of Rs 315 crore in December
• Kridhan Infra's Rs 128 crore institutional share sale closes. Investors include Singapore government, DSP Blackrock and HDFC AMC.
• Rushil Décor to import plywood as well as low thickness MDF boards.
• Aurionpro Solutions subsidiary Cyberinc to sell its Identity and Access Management business to KPMG in an all cash deal worth Rs 217.6 crore.
• KM Sugar Mills sold 7.30 lakh shares (73 percent) in subsidiary KM Energy.
• Tata Motors: JLR U.S. sales down 9 percent year-on-year to 11,394 units in Decembers 2017. For the full year 2017, JLR U.S. sales reached 114,333 units, up 9 percent year-on-year.
• HPCL: ONGC may pay Rs 45,000 crore (45 percent premium to market cap) for company's stake (Financial Express)
• Greaves Cotton: To make new BS-VI engines for Piaggio (PTI)

Bulk Deals

• WPIL: Promoter V N Enterprises bought 1.08 lakh shares (1.1 percent) at Rs 679.18 each.
• Viceroy Hotels: ICPA Health Products bought 2.50 lakh shares (0.6 percent) at Rs 21.27 each.

Aro Granite Industries

• Dilipkumar Lakhi bought 1.5 lakh shares (1 percent) at Rs 80.93 each.
• Surefin Financial Cons. Pvt Ltd sold 96,000 shares (0.6 percent) at Rs 81.01 each.

Navkar Corp

• Ashish Kacholia bought 10 lakh shares (0.7 percent) at Rs 187 each.
• Everest Finance and Investment Co. bought 10 lakh shares (0.7 percent) at Rs 187.06 each.

Orchid Pharma

• Fortune Intercontinental sold 11.28 lakh shares (1.3 percent) at Rs 20.2 each (average).
• Serum Institute of India sold 13.12 lakh shares (1.5 percent) at Rs 20.1 each.

Trading Tweaks

• Nagarjuna Fertiliser circuit filter revised to 10 percent.
• Fineotex and Graphite India circuit filter revised to 5 percent.
• Novartis India buyback period starts today, until Jan. 17.
• Aarti Industries ex-date for determining buyback eligibility.

Who's Meeting Whom?

• Monte Carlo Fashions meet ICICI Prudential Asset Management on Jan. 4 and Edelweiss Securities on Jan. 5.
• S Chand to meet Sundaram Mutual Fund, Franklin Templeton and others on Jan. 4.
• GE Shipping to meet Franklin Templeton on Jan. 4.

Rupee

• Rupee closed at 63.54/$ on Wednesday from 63.48/$ on Tuesday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty January futures trading at 10,469, premium of 26 points from 30 points earlier.
• January series: Nifty open interest up 3 percent; Bank Nifty open interest up 14 percent.
• India VIX ended at 13.6, down 0.4 percent.
• Max open interest for January series at 11,000 Call (open interest at 43.3 lakh, down 2 percent).
• Max open interest for January series at 10,300 Put (open interest at 48.3 lakh, down 3 percent).

F&O Ban

• In ban: Fortis Healthcare, GMR Infrastructure, HDIL, IFCI, JP Associates, Reliance Communications, Reliance Power.
• New in ban: Fortis Healthcare.

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

Put-Call Ratio

• Nifty PCR at 1.48 from 1.50.
• Nifty Bank PCR at 0.81 from 0.89.

Fund Flows

Brokerage Radar

Equirus on FIEM Industries

• Initiated ‘Long' rating with price target of Rs 1,336.
• Second largest player in Indian automotive lighting market.
• Key beneficiary of shift to LED usage in two wheelers.
• Effective AHO regulations to fuel LED usage in two wheelers.
• LED lamps to drive strong value growth; Lower competition to aid RoIC.
• Strong track record of adding new products.
• Margin and return profile to rebound after a blip in the previous financial year.
• Expect RoIC to rebound to 13 percent by March 2020.
• Expect revenue, operating income and net profit to grow at a compounded rate of 18 percent, 21 percent and 33 percent over the financial years through March 2020.

Equirus on Lumax Industries

• Initiated ‘Long' rating with price target of Rs 2,486.
• Market leader in automotive lighting market in India with 35 percent market share.
• Set to be a key beneficiary of shift to LEDs in two and four wheelers.
• Focus on increasing market share in commercial vehicles, tractors and two wheelers.
• Expect gain in share in Hero Motor's light sourcing.
• Large exposure to Maruti provides good growth visibility.
• Maruti recently introduced LED in mid to premium segment.
• Return matrix to improve led by growth, margin expansion.
• Expect revenue, operating income and net profit to grow at a compounded rate of 15 percent, 24 percent and 27 percent over thr financial years through March 2020.

IIFL on IRB InvIT

• Initiated ‘Buy' with fair value of Rs 97.
• Natural hedge against inflation.
• Established and stable concession agreements.
• Significant government support for highway development.
• Strong leverage to underlying traffic growth.
• Healthy balance sheet provides room to expand portfolio.
• Large pipeline of assets from IRB Infrastructure.
• Fair value assuming 8 percent toll revenue growth.

CLSA on Consumer Sector

• Expect 2018 to witness a pick-up in demand.
• Triggers: recovery in consumer sentiment, supportive base, GST-rate cuts and return to normalcy for channels.
• Rise in oil prices and related derivatives is a worry.
• Expect margins to sustain led by price hikes, premiumisation, cost savings and volume recovery.
• More positive on rural India given rising government spending and 2019 elections.
• ITC: Maintained ‘Buy'; raised price target to Rs 330 from Rs 310.
• Asian Paints: Upgraded to ‘Buy' from ‘Underperform'; raised price target to Rs 1,365 from Rs 1,250.
• Emami: Maintained ‘Buy'; raised price target to Rs 1,585 from Rs 1,450.
• GSK: Maintained ‘Buy'; raised price target to Rs 7,850 from Rs 7,500.
• Varun Beverages: Maintained ‘Buy'; raised price target to Rs 885 from Rs 665.
• Jubilant Foodworks: Maintained ‘Buy'; raised price target to Rs 2,300 from Rs 2,200.
• Westlife: Maintained ‘Buy'; raised price target to Rs 450 from Rs 320.
• HUL: Maintained ‘Outperform'; raised price target to Rs 1,515 from Rs 1,460.
• Titan: Downgraded to ‘Outperform' from ‘Buy'; raised price target to Rs 970 from Rs 900.
• Nestle: Maintained ‘Outperform'; raised price target to Rs 8,950 from Rs 8,500.
• Godrej Consumer: Upgrade to ‘Outperform' from ‘Underperform'; raised price target to Rs 1,150 from Rs 1,025.
• Dabur: Maintained ‘Outperform'; raised price target to Rs 400 from Rs 365.
• United Spirits: Maintained ‘Outperform'; raised price target to Rs 4,000 from Rs 3,500.
• Kansai: Downgraded to ‘Outperform' from ‘Buy'; raised price target to Rs 640 from Rs 600.
• Marico: Upgraded to ‘Underperform' from ‘Sell'; raised price target to Rs 330 from Rs 300.
• Colgate: Upgraded to ‘Underperform' from ‘Sell'; raised price target to Rs 1,120 from Rs 1,000.

Credit Suisse on India Steel Sector

• Odisha shutdown takes out 10 percent of India's output.
• With output cut, India to turn iron ore importer again.
• Iron ore prices to rise if India turns net-importer.
• Steelmaking cost up $55-60/tonne vs $60/tonne rise in steel prices.
• Cost-push steel price hikes good for Tata Steel.

IIFL on Axis Bank

• Upgraded to ‘Buy' from ‘Add'; raised price target to Rs 650 from Rs 520.
• Increase in share capital to boost capital position by over 200 basis points.
• Share capital boost to enhance ability to absorb large write-downs.
• Expect earnings growth to rebound strongly by March 2020.
• Expect sharp decline in loan loss provisions.
• Profitability could normalise by March 2019 under Indian Accounting Standards.
• Positives: crystallization of loan losses, reduced uncertainty on capital adequacy and resumption of loan growth.

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