All You Need To Know Going Into Trade On Jan. 9

Asian equities built on the best start to a year since 2006 as Japanese traders returned from a holiday following new all-time highs for U.S. shares.

The Singapore traded SGX Nifty, an early indicator of Nifty 50's performance in India, rose 0.2 percent to 10,651 as of 7:05 a.m.

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DayBreak

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

Global Cues

• U.S. stocks rose for a fifth straight day, with technology shares bolstering major indexes, as investors continue to price in the impact of tax cuts before corporate earnings start later in the week.
• Major wall street banks from JPMorgan Chased & Co. to Wells Fargo & Co. kick off earnings later this week, with the impact of the tax cuts in focus.
• With risk assets globally enjoying a strong start to 2018, outlooks from leading companies may dictate the next move for equity markets.

#BQMarketsNow | U.S. stocks rose for a fifth straight day, while oil held above $61 a barrel.https://t.co/BSxiC5b7jp pic.twitter.com/A2iehJn2oA

Europe Check

• European equities added to the biggest weekly advance since April, and markets in Tokyo were closed for a holiday.
• In Europe data showed confidence in the euro area continued its advance at the end of 2017, but Germany's continued struggle to form a government restrained the euro.
• The pound fell and U.K. stocks were flat after weak economic data and reports that Prime Minister Theresa May is considering creating a position for a minister in charge of contingency planning for a no-deal Brexit.

May kicks off overhaul of Cabinet ahead of critical #Brexit year.https://t.co/8jsUY9Z2UC pic.twitter.com/pWs5ZWCepc

Asian Cues

• Japan's Topix index rose 0.6 percent.
• Futures on the S&P 500 Index were flat.
• The MSCI Asia Pacific Index climbed 0.2 percent and is up 3.7 percent since the year began.
• Australia's S&P/ASX 200 Index added 0.2 percent and South Korea's Kospi was little changed.
• Futures on Hong Kong's Hang Seng Index rose 0.1 percent.

Why Pimco and Citigroup are warning against complacency in global economic outlook this year. https://t.co/UXTO6eedMW pic.twitter.com/SW4RhBwYq8

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

• Australian retails sales numbers are due on Thursday.
• U.S. inflation data are forecast to show price pressures remain muted, giving hawks little reason to argue for faster tightening.
• St. Louis Fed bank President James Bullard and head of the New York Fed Bill Dudley are among central bankers scheduled to speak.
• China producer and consumer prices data come Wednesday, while a reading on the country's money supply is expected in coming days.
• Talks between South Korea and North Korea are set to take place Tuesday.

One of Asia's best-performing stock markets in 2017 is not done yet.https://t.co/F4SbUiIMCg pic.twitter.com/9xnO0IT2mL

Commodity Cues

• Gold futures slid 0.2 percent to $1,318.08 an ounce.
• West Texas Intermediate crude rose 0.7 percent to $62.13 a barrel.
• Brent crude ended higher at $67.78 per barrel, up 0.2 percent.
• Gold trades lower at $1,318 an ounce; down 0.2 percent.
• Sugar ended lower for fourth day at 14.78 cents per pound; down 2 percent.

Shanghai Exchange

• Steel snaps three-day losing streak; up 1.4 percent.
• Aluminium trades lower for second day; down 0.5 percent.
• Zinc trades higher; up 0.8 percent.
• Copper trades higher; up 0.04 percent.
• Rubber snaps four-day losing streak; up 0.1 percent.

Big oil finds hurdles buried in Trump's ‘America-first' tax plan, especially if they drill abroad.https://t.co/3ZtIJ3TiwK pic.twitter.com/01OgnpmVBe

Indian ADRs

Earnings To Watch

• Shalby
• South Indian Bank

Stocks To Watch

• Gujarat NRE Coke employees move to Supreme Court to keep it afloat (Business Standard)
• IDFC Bank and Capital First in exploratory talks for a possible merge (CNBC TV18)
• Tata Motors' Jaguar Land Rover sales in December rose 0.6 percent to 55,697 units. Full year sales up 6.5 percent to 6.2 lakh units.
• Government to sell 1.5 percent stake in NMDC through an offer for sale at floor price of Rs 153.50 per share.
• Aarti Drugs to buyback 2.75 lakh shares (1.15 percent) at Rs 875 each
• Bharti Airtel says payments bank has terminated some retailers.
• Sutlej Textiles and Industries to set up a plant in Jammu and Kashmir to manufacture polyester staple fibre. It also deferred plans of expanding its Baddi facility due to uncertain markets conditions in the yarn segment.
• Deep Industries incorporated subsidiary Deep International DMCC in Dubai on Jan. 7.
• Sun Pharma hiked stake in Ranbaxy Malaysia to 85.9 percent from 79.55 percent.

Government looks to raise Rs 750 crore from NMDC stake sale.https://t.co/s9RVTgmcwg pic.twitter.com/WhquFVnswO

Bulk Deals

• Gitanjali Gems: Russell Investment Co PLC bought 9.18 lakh shares or 0.8 percent equity at Rs 77.27 each.
• Snowman Logistics: Norwest Venture Partners VII A Mauritius sold 42 lakh shares or 2.5 percent equity at an average of Rs 61.6 each.
• Sobha Ltd: Adawi Investments Holdings Ltd sold 41.60 lakh shares or 4.3 percent equity at an average of Rs 599.85 each.
• Sangam Industries: Mentor Capital bought 2 lakh shares or 0.5 percent equity at Rs 190 each.
• Monnet Ispat: Oswal Greentech sold 16.29 lakh shares or 0.8 percent equity at Rs 33.62 each.
• Coral India Finance: India Max Investment sold 6.75 lakh shares or 1.4 percent equity at Rs 44.1 each.
• Shah Alloys: United India Insurance sold 1 lakh shares or 0.5 percent equity at Rs 22.12 each.

Pennar Engineered Building Systems Ltd:

• Crest Capital & Investment bought 2.72 lakh shares or 0.8 percent equity at Rs 110.1 each.
• Ganesh Trading Investment bought 3 lakh shares or 0.9 percent equity at Rs 110.1 each.
• Zephyr Peacock India Fund sold 8.87 lakh shares or 2.6 percent equity at an average of Rs 110.2 each.

Menon Bearings

• Promoter Sucheta Menon sold 22.42 lakh shares or 4 percent equity at Rs 100.5 each.
• Astute Investments bought 22.16 lakh shares or 4 percent equity at Rs 100.5 each.

LP Securities

• New Berry Advisors sold 4.23 lakh shares or 0.6 percent equity at Rs 24.45 each.
• LKP Panday bought 7.48 lakh shares or 1 percent equity at Rs 24.45 each.

Jio vs Airtel, Idea: Who offers the cheapest tariff?https://t.co/j0w4R5P9bi pic.twitter.com/uO22gH5CL9

Who's Meeting Whom?

• TBZ to meet FE Securities on Jan. 9.
• Pennar Industries and Pennar Engineered Building systems to meet DSP Blackrock, Maybank Kimeng Securities, Aditya Birla Sun life AMC and Kotak MF on Jan. 9.
• Shriram Transport Finance to meet SBI MF on Jan. 9 & Macquarie Funds on Jan. 10
• Endurance Tech to meet Investec Capital Services on Jan. 9.
• Tata Steel to meet Credit Suisse on Jan. 9.
• Mahindra and Mahindra to meet Karvy Stock Broking on Jan. 9, Fidelity International and Axis Capital on Jan. 10, and Janus Capital and ICICI Prudential MF on Jan. 11.

Insider Trades

• DB Realty promoter Vinod Goenka HUF acquired 14,500 shares.
• DCW promoter Varsha Jain sold 10,000 shares.
• Shaily Engineering Plastics promoter Purnima Shah sold 3,492 shares.
• Warren Tea promoter Vinay Goenka sold 3,972 shares.
• Omax Auto promoters sold 8,474 shares.
• Kisan Moulding promoter Sanjeev Agarwal acquired 53,000 shares.
• Navin Fluorine promoter Pamil Investments sold 1,500 shares.
• GNA Axles Promoter and director Gursaran Singh acquired 11,456 shares.

Rupee

• Rupee closed at 63.51/$ on Monday from 63.37/$ on Friday.

Top Gainers And Losers

Index Trends

F&O Cues

• Nifty January futures trading at 10,631, premium of 8.5 points versus 14 points.
• January Series: Nifty open interest up 4 percent; Bank Nifty open interest up 18 percent.
• India VIX ended at 13.7, up 4.7 percent.
• Max open interest for January series at 11,000 Call (open interest at 45.2 lakh, up 4 percent).
• Max open interest for January series at 10,400 Put (open interest at 64.4 lakh, up 6 percent).

F&O Ban

• In ban: Fortis, GMR Infrastructure, HDIL, IFCI, Jindal Steel and Power, Jain Irrigation, JP Associates, Reliance Communications, Reliance Capital, Reliance Power, Wockhardt.
• New in ban: Reliance Capital, Wockhardt.
• Out of ban: Reliance Power.

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 1.63 versus 1.58.
• Nifty Bank PCR at 0.93 versus 1.09.

Stocks Seeing High Open Interest Change

Fund Flows

Brokerage Radar

Macquarie on ICICI Lombard General Insurance

• Initiated ‘Underperform' with price target of Rs 565; implying a potential downside of 33 percent from yesterday's close.
• A float business with unfathomable valuations.
• Large opportunity, but competition a big pain point.
• Suffers underwriting losses due to intense price competition.
• Industry has growth tailwinds.
• Large float of 3.5-4 times, coupled with high interest rates, make it to make profits.
• Float profits cross-subsidise underwriting losses.
• Expect growth in premium at a compounded rate of 21 percent over the financial years through March 2020; improving quality to be challenging.
• Proposed Motor Vehicle Act to boost underwriting profitability.
• Current valuations leave no upside.

Macquarie on Suprajit Engineering

• Aims to sustain revenue growth at 5-10 percent above auto industry production growth for next 5-10 years.
• Positives: rising share of business in India and globally, market share gains in aftermarket.
• Positives: entry into new non-automotive segments and expansion of its product portfolio.
• Management strategy: De-risk and grow profitably.
• Exports, aftermarket and non-auto are key growth drivers.
• High and steady profitability, return ratios across cycles.
• Management guiding for dividend payout ratio of 20-25 percent.

Macquarie on Endurance Tech

• Management focused on diversifying customer mix in India.
• Focus also on growing content in scooters and growing European business profitably.
• Technology content is increasing across product portfolio.
• Focused on customer diversification and growing content.
• Pursuing profitable revenue growth in European operations.
• Track record of prudent investments and high return on capital employed.
• Endurance to pursue strategic alliances and inorganic growth opportunities.

Jefferies on Oil & Gas

• Auto fuel prices up sharply but more needed to normalise marketing margins.
• Elevated Brent and busy political calendar to keep marketing margins under pressure.
• Lower marketing margins and softer refining margins to weigh on earnings.
• Like cheaper and more resilient Indian Oil to Bharat Petroleum or Hindustan Petroleum.

IDBI Capital on Larsen & Toubro Infotech

• Initiated ‘Buy' with price target of Rs 1,300, implying a potential upside of 16.7 percent from yesterday's close.
• LTI has all the ingredients of being a sustainable growth engines.
• Has strong presence in high growth digital solutions.
• Expect LTI to continue to outperform the sector.
• LTI to become more aggressive than before; To be most feared competitor.
• Momentum across – large clients + large deal wins + large deal pipeline to continue.
• Expect revenue in dollar terms and earnings per share to grow at a compounded rate of 14 percent and 13 percent respectively over the financial years through March 2020.
• Strong growth performance warrants premium valuation.

Prabhudas Lilladher on Zensar Technologies

• Initiated ‘Buy' with price target of Rs 1,000, implying a potential upside of 13.6 percent from yesterday's close.
• Increasing proportion of revenues from Digital SBU coupled with deal wins to revive revenue growth trajectory.
• Expect gradual recovery on the margin front.
• Revival in growth to drive SG&A leverage and margin expansion over the financial years through March 2020.
• Strong expertise in Oracle offerings remains the key proposition.
• Zensar now positioned to address complete value chain in Retail eCommerce
• EPS estimates for the current and next two financial years are Rs 52, Rs 65 and Rs 80 respectively.
• Dollar Revenue growth for the current and next two financial years estimated at 3.7 percent, 10.3 percent and 11 percent respectively.
• Valuations remain reasonable; Room for re-rating over two-year period.

Edelweiss Investment on Deepak Nitrate

• Initiated ‘Buy' with a price target of Rs 360, implying a potential upside of 31 percent from yesterday's close.
• New plant to revitalise business dynamics from April 2019 onwards
• Positives: improving product mix, efficiency to drive performance products business.
• Company set to reap benefits of capacities as well as performance products
• Expect spectacular revenue and margin spurt with higher utilisation levels and business expansion
• Revenue is expected to double and margins quadruple; Net profit to grow at a compounded rate of 38 percent over the financial years through March 2020.
• Debt funded capex to generate healthy returns.
• Debt-to-equity expected to soar two times; return on capital employed to expand to 17 percent by March 2020.
• Free cash flows from April 2019 with scope for forward integration.
• Low valuations for a strong cash flow generating business.
• Bull case price target of Rs 414.

#ChartOfTheDay by @iYashUpadhyaya | These 5 stocks have become analysts' favourite in a period of just one year. https://t.co/pyvsQBqPKJ pic.twitter.com/q5mFl7yU47

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